Evan Clark
4 min read
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Updated 4:14 p.m. ET June 6
Morris Goldfarb is finding new retail territory to explore as he hits the accelerator on Donna Karan and his other brands, filling the void left as licenses for Calvin Klein and Tommy Hilfiger transition back to PVH Corp.
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The effort is starting to pay off, even as the trade war scrambles the market and supply chains.
G-III Apparel Group, which Goldfarb has led for more than 50 years as chief executive officer, saw first-quarter sales fall 4 percent to $583.6 million, but made up for it on the bottom line, with earnings rising to $7.8 million, or $0.17 a diluted share, from $5.8 million, or $0.12, a year earlier. Adjusted earnings per share rose to $0.19 from $0.12.
But investors reacted strongly to news that the company withdrew profit forecast for the year, as many other companies have given the uncertain impact of tariffs.
Shares of G-III fell 18.7 percent to $22.51 on Friday, leaving the company with a market capitalization of $975 million.
“I can’t control the tariffs, but it’s not unique to G-III,” Goldfarb told WWD in an interview. “It’s a global issue that nobody’s got their arms wrapped around.” China, which is most impacted by U.S. President Donald Trump’s trade war, will represent less than 20 percent of the firm’s production by the end of the year, down from nearly 90 percent several years ago.
But Goldfarb said despite the tariffs, macroeconomics and some unfavorable weather, business is manageable.
“We are finding that price points are not an issue,” the CEO said. “Our brands — Donna Karan and Karl Lagerfeld, particularly — have higher price points.…They are unique, well-crafted, quality product and they’re paying for it. There’s no pushback at all. We’re expanding the categories in Donna Karan and certainly further penetrating the categories that we’ve launched. We’ve found our way back into people like Nordstrom and Saks and their full-price areas. Historically, we’ve not shipped pretty much any product from the PVH assets into full-price, Nordstrom or Saks.”
G-III, which relaunched the Donna Karan business once PVH started to withdraw, sees the potential to grow the business up to $1 billion over the long run.
“There’s a world that goes beyond the current distribution that we’re penetrated in,” Goldfarb said. “It’s opened up a new field for us on our own acquired brands. We will be in approximately 50 doors of Nordstrom full-price for Donna Karan. We have no distribution in the off-price channel, which is an attraction to people like Nordstrom and Dillard’s and even Macy’s.
