Morris Goldfarb on G-III’s ‘Strongest Year’ Ever
Morris Goldfarb is good at finding a way forward.
He joined what would become G-III Apparel Group in May 1972 and became chief executive officer two years later, making him one of the longest serving CEOs on Wall Street. (Warren Buffett has him beat, having taken over the corner office of Berkshire Hathaway four years earlier.)
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And from that singular perch in fashion, Goldfarb successfully led the company as it evolved from a coat-maker into a multifaceted, publicly held powerhouse that has survived department store consolidation, the internet, a handful of recessions and, now, a pandemic.
G-III’s fourth-quarter gains, reported Thursday, cemented what was the company’s best year on record.
The industry mainstay’s fourth-quarter net income jumped to $48.4 million, or 98 cents per diluted share, from $14.6 million, or 30 cents, a year earlier. Sales for the three months ended Jan. 31 jumped 42 percent to $748.2 billion from $526.2 million as consumers — and the fashion industry — found their footing in the midst of the COVID-19 pandemic.
For the full year, G-III’s profits increased dramatically to $200.6 million, or $4.05 a diluted share, compared to profits of $23.5 million, or 48 cents, in 2020. Sales increased 35 to $2.77 billion from $2.06 billion.
Investors liked what they saw and sent shares of the company up 14.3 percent to $30.06.
G-III has grown big with big brands. Its portfolio of owned brands includes Donna Karan, DKNY and Karl Lagerfeld Paris and it makes goods for Calvin Klein and Tommy Hilfiger under a license agreement with PVH Corp.
The company is also growing with new partners online, including Amazon, looking to license out its own brands more, opening more stores, expand in Europe and more.
In an interview, Goldfarb said G-III has been able to successfully change with the times by learning a little something from the companies it worked with and applying it to its own business.
“My role model was Liz Claiborne,” Goldfarb said. “The company did an amazing job of building the Liz Claiborne brand, they were justified in getting all the real estate [in department stores] they garnered. It was a beautiful model, they were passionate about their product, they were passionate about their people and they were passionate about the environment as well.
“We used to do private label for them on the men’s side,” he said. “We got the opportunity to understand their back of house….We took best practices from all our licensors and said, ‘OK, we can do all this.’ We hired best-in-class talent.”
ANDREW MORALES / WWD
And while so much has changed in the industry, the approach is still the same and now being applied to a host of newer growth opportunities.
G-III is building in outdoor with Bass, which the CEO said is “pretty much in fast mode” and sold at 150 Macy’s stores as well as at Nordstrom and Anthropologie. Luxury swim brand Vilebrequin gained momentum as people sheltered in warmer climes for the pandemic.
And Karl Lagerfeld Paris, which the company controls in the U.S., is another growth center, fed still by the late designer’s iconic personality and famous fashion touch.
“His legacy goes on and will go on,” Goldfarb said.
“We had an interruption in our [Karl Lagerfeld] business just before the pandemic occurred, we lost our largest customer, which was Lord & Taylor at the time,” the CEO said. “Today our business is larger than it was pre-pandemic.”
The brand’s sales stood at about $130 million when G-III started with it and they now sit at $175 million without Lord & Taylor and Goldfarb said there’s a $500 million opportunity just in North America. (Overall, the brand supports over $1 billion in retail sales globally.)
Goldfarb also said DKNY has plenty of room to grow its wholesale business and other growth avenues.
Looking at growth on a broader scale, the CEO said the company has a foundation in Europe, with Vilebrequin and Sonia Rykiel and big plans to keep expanding. Then there’s room to continue to expand the company’s primary brands in North American wholesale.
After nearly 50 years, Goldfarb clearly has his eyes on the horizon still.
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