G-III Apparel Group, the parent company of well-known brands like DKNY and Donna Karan, has just announced a substantial decline in its annual revenue. The company reported net sales of $2.06 billion for the fiscal year ending on January 31, 2021, which is a significant drop of 35.0% compared to the previous year’s sales of $3.16 billion.

Not only did G-III see a decline in revenue, but its annual net income also took a hit. The company’s net income for the year amounted to $23.5 million, or $0.48 per diluted share. This is a stark decrease from the previous year’s net income of $143.8 million, or $2.94 per diluted share.

G-III’s chairman and CEO, Morris Goldfarb, attributed this decline in revenue to the impact of the Covid-19 pandemic. He pointed out that the company was able to adapt to changing market demands by focusing on designing comfortable and casual clothing for its retail partners. With more people staying at home and prioritizing comfort, the popularity of laid-back attire has increased significantly during the ongoing pandemic.

Goldfarb also highlighted the successful restructuring efforts in G-III’s retail operations, specifically mentioning the closure of their Wilsons Leather and G.H. Bass stores. This restructuring affected around 200 locations and aimed to streamline the company’s retail footprint.

In the fourth quarter, G-III recorded net sales of $526.2 million, a decrease of 30.3% compared to the same period in the previous year. The quarterly net income was $14.6 million, or $0.30 per diluted share, down from $25.3 million, or $0.52 per diluted share, in the prior-year period.

Looking ahead, G-III expects net sales of approximately $460.0 million in the first quarter, compared to $405.1 million in the same period last year. The company predicts a net income between $0.05 and $0.15 per diluted share for the first quarter. This is a significant improvement from the previous year’s loss of $0.33 per share.

Goldfarb anticipates a shift in consumer preferences as the year progresses, with a growing desire for dressier apparel and accessories. G-III is actively collaborating with its retail and vendor partners to ensure it can bring these products to the market promptly.

The decline in annual revenue is undoubtedly a setback for G-III Apparel Group. However, the company’s ability to adapt to changing market demands and its strategic restructuring efforts provide hope for a potential recovery in the future. As consumer preferences evolve, G-III remains determined to position itself as a leading provider of fashionable and in-demand apparel and accessories.

For more information on G-III Apparel Group and its brands, please visit their website here.

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