G-III Announces Strategic Partnership with AWWG

Rhea-AI Summary

G-III Apparel Group (Nasdaq: GIII) has announced a strategic partnership with All We Wear Group (AWWG), obtaining a 12% ownership stake. AWWG will act as the agent for G-III's brands DKNY, Donna Karan, and Karl Lagerfeld in Spain and Portugal. AWWG, which oversees brands like Hackett, Pepe Jeans, and Façonnable, generates $650 million in revenue across 3,500 points of sale in 86 countries. This partnership aims to expand G-III's presence in Europe and India, while AWWG will leverage G-III's North American operations to grow its brands. The collaboration promises to accelerate the European expansion of G-III's key brands and support AWWG's growth in North America.

Positive

• G-III acquires a 12% ownership stake in AWWG, diversifying its investments.
• AWWG generates over $650 million in revenue, indicating a strong partner.
• Partnership expands G-III's brands into Spain and Portugal, increasing market presence.
• Plans to leverage AWWG's presence in India, targeting a fast-growing market.
• AWWG will utilize G-III's North American operations to expand its brands, fostering mutual growth.
• AWWG manages Iberian business for PVH Corp., suggesting expertise and credibility.
• G-III's strategic priorities include scaling European business, supporting international growth.

Negative

• Partnership involves significant investment, which could impact short-term financials.
• G-III's expansion into new markets carries inherent risks, including cultural and operational challenges.
• Dependence on AWWG's performance in Spain and Portugal may lead to uncertainties.
• Expansion plans in India might face stiff competition and regulatory hurdles.

Financial Analyst

G-III's strategic partnership with AWWG is a notable move aimed at boosting its international footprint, particularly in Europe and India. From a financial perspective, this deal can be significant as it leverages AWWG's established distribution and market presence.

First, the investment secures an ownership stake of approximately 12% in AWWG. This means G-III will benefit not only from potential appreciation in AWWG's value but also from dividends and synergies as the businesses integrate. The immediate financial implication could be a positive market reaction due to the strategic nature of the partnership.

Second, the partnership enhances G-III's revenue streams by tapping into AWWG's revenue-generating power, which spans over $650 million annually across 3,500 points of sale in 86 countries. It suggests potential for revenue growth and diversification, particularly in high-growth markets like Spain, Portugal and India.

Lastly, the potential for operational efficiencies and cost savings should not be overlooked. As G-III leverages AWWG's infrastructure in Europe, it can potentially reduce the costs associated with entering these markets independently. This could lead to margin improvements, positively impacting the bottom line.

Market Research Analyst

From a market research perspective, this partnership between G-III and AWWG harbors considerable strategic value. AWWG's strong market position in Spain and Portugal and its management of the Iberian business for PVH Corp., indicates significant market insights and established networks that G-III can now access.

One of the key benefits is the ability to accelerate brand penetration and growth in Europe. With brands like DKNY and Karl Lagerfeld, which already have a global appeal, leveraging AWWG’s local expertise can drive faster market adaptation and consumer acceptance.

Additionally, the move into India—one of the world’s fastest-growing fashion markets—presents a significant growth opportunity. India's burgeoning middle class and increasing disposable incomes align well with G-III's brand portfolio, suggesting substantial revenue potential.

Given that the fashion industry is highly competitive, the ability to leverage AWWG’s operational platform could offer G-III a distinct competitive advantage in these regions, potentially resulting in better market share and brand loyalty.

Brand Strategist

For a brand strategist, this partnership offers intriguing possibilities. G-III owns notable global brands like DKNY and Karl Lagerfeld, which are well-positioned to benefit from AWWG’s expertise in the Iberian and Indian markets.

The strategic alignment with AWWG can provide immediate brand visibility and operational support in Spain and Portugal, markets where AWWG has substantial clout. This supports G-III's objective of scaling its European business by ensuring that its brands are effectively marketed and distributed.

Furthermore, AWWG’s established presence in India offers a strategic foundation for G-III to introduce and expand its brands in a thriving market. This is particularly significant as India’s fashion market is not only growing but also rapidly evolving, demanding a nuanced approach to brand positioning and consumer engagement.

This partnership therefore offers a unique opportunity to enhance brand value through localized strategies and effective market penetration, both of which are important for long-term brand growth and equity.

Accelerates the International Expansion of G-III’s Owned Brands

NEW YORK--(BUSINESS WIRE)-- G-III Apparel Group, Ltd. (Nasdaq: GIII) (“G-III” or the “Company”), a global leader in fashion, today announced a strategic partnership and investment in All We Wear Group (“AWWG” or “Group”), for an ownership stake of approximately 12%. AWWG now becomes the Agent for DKNY, Donna Karan and Karl Lagerfeld across Spain and Portugal.

Madrid-based AWWG, which is owned by M1 Group, LCatterton and founder Carlos Ortega, is a premier platform for international brands including Hackett, Pepe Jeans and Façonnable, and generates over $650 million in revenues across over 3,500 points of sale in over 86 countries. The Group, which also manages the Iberian business for PVH Corp., offers significant expertise to unlock the Spain and Portugal markets for G-III’s brands as the Company seeks to maximize its European growth opportunity. Additionally, G-III plans to leverage AWWG’s notable presence in India to expand its key brands, led by DKNY, in one of the fastest growing fashion markets in the world. In turn, AWWG will benefit from G-III’s best-in-class operations in North America to expand their footprint in the market.

Morris Goldfarb, G-III’s Chairman and Chief Executive Officer, said, “This exciting partnership with AWWG helps us accelerate a number of our strategic priorities. It not only affords us the opportunity to meaningfully invest in a company with iconic brands, but also represents a sizable international presence with a strong infrastructure and talented leadership team that will benefit our efforts to scale our European business. At the same time, we look forward to supporting AWWG’s overall growth and advancement of their brands here in North America.”

Marcella Wartenbergh, CEO of AWWG, stated, "We are incredibly proud to have G-III, an industry leader with a track record of scaling brands, as our shareholder. We look forward to partnering together to propel the growth and European expansion of DKNY, Donna Karan and Karl Lagerfeld, leveraging our global brand platform, operational excellence and Indian market capabilities. AWWG will also benefit from G-III’s expertise and investment as we seek to expand our brands Hackett, Pepe Jeans and Façonnable in North America and further solidify our operational platform during this critical moment of our growth journey. This agreement is the result of a relationship built on mutual trust and a unified vision for brand growth and product development.”

About G-III Apparel Group, Ltd.

G-III Apparel Group, Ltd., a global leader in fashion with expertise in design, sourcing and marketing, owns and licenses a portfolio of over 30 preeminent brands. The Company is differentiated across unique brand propositions, product categories and consumer touch points. G-III owns ten iconic brands including, DKNY, Karl Lagerfeld, Donna Karan and Vilebrequin, and licenses over 20 brands, including Calvin Klein, Tommy Hilfiger, Nautica, Halston and National Sports leagues, among others.

Statements concerning G-III's business outlook or future economic performance, anticipated revenues, expenses or other financial items; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters are "forward-looking statements" as that term is defined under the Federal Securities laws. Forward-looking statements are subject to risks, uncertainties and factors which include, but are not limited to, risks related to the reliance on licensed product, risks relating to G-III’s ability to increase revenues from sales of its other products, new acquired businesses or new license agreements as licenses for Calvin Klein and Tommy Hilfiger product expire on a staggered basis, reliance on foreign manufacturers, risks of doing business abroad, supply chain disruptions, risks related to acts of terrorism and the effects of war, the current economic and credit environment risks related to our indebtedness, the nature of the apparel industry, including changing customer demand and tastes, customer concentration, seasonality, risks of operating a retail business, risks related to G-III’s ability to reduce the losses incurred in its retail operations, customer acceptance of new products, the impact of competitive products and pricing, dependence on existing management, possible disruption from acquisitions, the impact on G-III’s business of the imposition of tariffs by the United States government and business and general economic conditions, including inflation and higher interest rates, as well as other risks detailed in G-III's filings with the Securities and Exchange Commission. G-III assumes no obligation to update the information in this release.

About All We Wear Group (AWWG)

At AWWG transformation is embedded in our DNA. Founded in 1998 under the name of Pepe Jeans Group, with headquarters in Madrid, Spain and design offices in London and Nice, this global fashion group integrates the iconic brands Pepe Jeans London, Hackett, and Façonnable. AWWG also is the Master Franchisee and Agency for Tommy Hilfiger (Spain and Portugal) as well as the Agency for Calvin Klein (Spain and Portugal).

AWWG currently has over 3,500 points of sale, with a presence in 86 countries globally and a workforce of more than 4,500 employees of 79 nationalities. As a global retail platform, the Group is committed to constant evolution and to create brand equity by transformation, in line with the changes, challenges, and inherent needs of the industry. The three iconic brands are unified as part of AWWG while each maintaining their own strong DNA and values, built up over thirty years in the retail sector with strong design teams, product development and brand enhancement. AWWG continuously evolves, pushing the limits and defying the status quo to create value through innovative, aspirational, and sustainable product that prioritize excellence, craftsmanship, differentiation, and quality.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240606678939/en/

G-III Apparel Group, Ltd.

Company Contact:

Priya Trivedi

SVP of Investor Relations and Treasurer

(646) 473-5228

Company Media Contact:

Andrew Blecher

andrew.blecher@kekstcnc.com

AWWG:

Company Contact:

Maria Maldonado

Corporate communications

+34 686 895 799

Maria.maldonado@awwg.com

Source: G-III Apparel Group, Ltd.

FAQ

What is the significance of G-III's partnership with AWWG?

The partnership provides G-III with a strategic 12% ownership stake in AWWG, expanding its brands DKNY, Donna Karan, and Karl Lagerfeld into Spain and Portugal.

How much revenue does AWWG generate?

AWWG generates over $650 million in revenue, indicating a strong financial performance.

What markets will G-III target through this partnership?

G-III plans to expand its presence in Europe, particularly Spain and Portugal, and leverage AWWG's presence in India for further growth.

How will AWWG benefit from this partnership with G-III?

AWWG will leverage G-III's best-in-class operations in North America to expand its brands, including Hackett, Pepe Jeans, and Façonnable.

What brands does G-III plan to expand in Europe through AWWG?

G-III plans to expand its key brands DKNY, Donna Karan, and Karl Lagerfeld in Europe through AWWG.

What are the potential risks of G-III's expansion plans?

Potential risks include cultural and operational challenges in new markets, dependence on AWWG's performance, and competition and regulatory hurdles in India.