G-III Apparel Group, the parent company of popular fashion brands like DKNY and Donna Karan, has reported a significant decrease in net sales for the third quarter of 2020. The ongoing Covid-19 pandemic continues to negatively impact the company’s operations, resulting in a 27% decline in revenue.

During the third quarter, G-III generated $826.6 million in net sales compared to $1.13 billion in the same period last year. This decrease of 26.7% can be attributed to the challenging retail environment caused by the pandemic. In response, G-III has decided to restructure its retail operations, leading to the permanent closure of 110 Wilsons Leather and 89 G.H. Bass stores. These closures have contributed to the decrease in net sales, with the affected brands generating $38.2 million in the third quarter compared to $59.8 million in the same period last year. The company aims to complete these closures before the end of the fiscal year.

Despite the decline in sales, G-III reported a quarterly net income of $63.2 million, or $1.29 per diluted share. Although this is lower than the $95.4 million, or $1.97 per diluted share, achieved in the third quarter of the previous year, G-III’s chairman and CEO, Morris Goldfarb, emphasized the company’s progress in adapting to the impact of the pandemic. Goldfarb stated that G-III has developed product lines that align with consumer demand for casual, comfortable, and functional clothing. The company believes that its product assortment for its portfolio of global brands responds well to current market trends, enabling them to gain market share.

Financially, G-III remains in a strong position with approximately $800 million in cash and available credit at the end of the third quarter. Despite the challenges faced this year, G-III’s year-to-date sales have reached $1.53 billion, representing a 36.5% decline from the previous year’s $2.41 billion. Net income for the same period was $8.90 million, or $0.18 per diluted share, compared to $118.55 million, or $2.42 per diluted share, in the prior-year period.

Looking ahead, G-III has not provided detailed financial guidance due to the ongoing uncertainty caused by the Covid-19 pandemic. However, the company anticipates a 30% decline in fourth-quarter sales. G-III remains committed to adapting its operations to meet the evolving needs of consumers and navigating the challenges posed by the global health crisis.

Links:
1. G-III Apparel Group
2. AP News – G-III Apparel Group’s Q3 Sales Drop Significantly