NEW YORK - G-III Apparel Group, Ltd. (NASDAQ:GIII), known for its fashion design, sourcing, and marketing expertise, has announced an increased investment in the Madrid-based All We Wear Group (AWWG). The company's stake in AWWG has grown from 12% to approximately 19%, as part of a strategic partnership aimed at expanding its brand presence internationally.
AWWG, owned by M1 Group, LCatterton, and founder Carlos Ortega, manages prominent brands such as Pepe Jeans London, Hackett, and Façonnable. The group boasts a significant global reach, with revenues exceeding $650 million through more than 3,500 sales points across 86 countries.
The partnership has designated AWWG as the official agent for G-III's brands, including DKNY, Donna Karan, and Karl Lagerfeld, in Spain and Portugal. This move is intended to capitalize on the European market's growth potential. Moreover, G-III plans to utilize AWWG's strong market presence in India to further expand its key brands, with a particular focus on DKNY.
Morris Goldfarb, Chairman and CEO of G-III, expressed confidence in the expanded investment, stating, "We are pleased to expand our investment in AWWG and strongly believe this partnership is another growth opportunity for our business." He emphasized the strategic nature of the collaboration, which is expected to accelerate the growth of both companies' businesses.
G-III Apparel Group owns a portfolio of over 30 brands, including DKNY, Karl Lagerfeld, Donna Karan, and Vilebrequin, and holds licenses for well-known brands such as Calvin Klein and Tommy Hilfiger.
In other recent news, G-III Apparel Group has reported a robust start to fiscal 2025 with net sales hitting the $610 million mark, in line with market expectations. This success has been partly attributed to the company's strategic acquisition of a 12% stake in AWWG, a move that is expected to immediately boost earnings. G-III Apparel also raised its bottom-line guidance, projecting earnings per diluted share to fall between $3.58 and $3.68.
In addition to these financial milestones, G-III Apparel has been focusing on strengthening its own brands and reducing dependency on Calvin Klein and Tommy Hilfiger. The company plans to add over 2,500 new points of sale and is investing in marketing and product development, with recent collections receiving positive consumer feedback.
UBS has maintained a neutral rating on G-III Apparel, citing concerns about the company's significant reliance on Department Stores and the expected phase-out of PVH (NYSE:PVH) brands licenses. Despite these concerns, UBS acknowledged the potential of G-III's owned brands to contribute to growth and highlighted the recent investment in AWWG as a strategic move that could enhance G-III Apparel's global reach.
In the company's recent developments, G-III Apparel Group's financial position remains robust, boasting a net cash position and $1 billion in liquidity. The company anticipates a strong year ahead with strong sales growth in brands like DKNY and Karl Lagerfeld, projecting a long-term net sales potential of $5 billion.
InvestingPro Insights
G-III Apparel Group's (NASDAQ:GIII) recent move to increase its stake in the All We Wear Group (AWWG) underscores its strategy to leverage international markets for growth. The company's financial health and stock performance, as reflected in real-time metrics from InvestingPro, provide additional context to this strategic decision.
As of the last twelve months leading up to Q1 2025, G-III Apparel Group has demonstrated a robust gross profit margin of 40.33%, with a gross profit of $1,250.94 million. This profitability measure is a testament to the company's ability to maintain a strong markup on its products, which could be further enhanced by the expanded reach through AWWG.
The company's Price to Earnings (P/E) ratio stands at a low 6.77, adjusted to 6.51 for the same period, indicating that the stock may be undervalued relative to its earnings. This is complemented by a strong free cash flow yield, as suggested by one of the InvestingPro Tips. Such a valuation could attract investors looking for growth opportunities, especially given the company's strategic international partnerships.
Another InvestingPro Tip points out that G-III Apparel Group has a high shareholder yield, which, combined with the fact that it does not pay a dividend, suggests that the company is reinvesting its earnings back into the business, potentially funding its international expansion and partnership strategies.
For readers seeking a more detailed analysis and additional insights, InvestingPro offers a total of 10 InvestingPro Tips for G-III Apparel Group, which can be accessed at https://www.investing.com/pro/GIII. Readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing valuable investment guidance and real-time data for informed decision-making.
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