and more. Sustainability is also a cornerstone of the brand’s strategy, focusing on people, planet, and partners, with more than half of in-house collections already produced with eco-conscious methods.
The brand’s immersive global digital and retail presence includes approximately 120 mono-brand company and partner-operated stores, with key locations in Paris, London, Berlin, Dubai, and Shanghai. The brand further boasts an extensive wholesale distribution network in the United States, Europe, the Middle East, and Asia, with impressive partners. The brand has a successful online business through its flagship websites www.karl.com and www.karllagerfeldparis.com, as well as through other digital retail platforms.
Karl Lagerfeld’s near-term expansion strategy focuses on growth in geographic regions through both owned and partner-operated channels spanning digital, retail, wholesale, new product categories, and increased licensing opportunities. Additionally, the power of the name extends into broader lifestyle projects, unique experiences and collaborations across cultures and industries, such as hospitality and residential real estate. These initiatives, along with the Karl Lagerfeld brand’s strengths and diverse customer base, provide a significant runway for future growth.
Transaction and Financial Details
G-III will purchase the remaining 81% of Karl Lagerfeld for €200 million ($210 million USD) in cash, subject to certain adjustments and customary closing conditions, funding the acquisition with cash on hand. G-III currently owns 19% of the brand and, through this transaction, will become the sole owner of the brand. The acquisition includes Karl Lagerfeld’s existing 10% stake in its established joint venture in China. G-III believes that the acquisition enhances the Company’s overall economic value and is expected to drive improved long-term shareholder value. Additional transaction benefits include:
| ● | The acquisition adds approximately $200 million in initial annual sales. Combined with G-III’s revenues of $175 million in its fiscal 2022 year ended January 31, 2022, from its existing Karl Lagerfeld business in North America, this acquisition will result in a business expected to generate an initial annual revenue base of approximately $375 million. G-III believes that the combined revenues of G-III’s Karl Lagerfeld business and the acquired Karl Lagerfeld business represent an annual net revenue potential of approximately $1 billion or in excess of $2 billion in sales to end consumers, and that this acquisition will expand G-III’s global presence. |
| ● | The acquisition is expected to be modestly accretive in our fiscal 2023 year ending January 31, 2023, and incrementally more accretive thereafter. |
The transaction is expected to close in the second or third quarter of fiscal year 2023, subject to certain adjustments and customary closing conditions, including the receipt of required regulatory approvals. G-III received legal advice from Simpson Thacher & Bartlett LLP and De Brauw Blackstone Westbroek N.V. and financial advice from Barclays Capital, Inc.
Conference Call Details
The Company will host a conference call today May 02, 2022, before the market opens at 8:30 a.m. ET to further discuss this transaction which will be followed by a question and answer session for the investment community. A live webcast of the call can be accessed at https://ir.giii.com “News & Events - Events & Presentations” section. To access the call, dial toll-free 1-833-423-0487 or 1-918-922-2381 (international). The pass code is 5981289. For additional information concerning the transaction, please see the investor presentation available on the Investor Relations page of the G-III Apparel Group, Ltd. website at https://ir.giii.com “News & Events - Events & Presentations” section. For the avoidance of doubt, the contents of that website are not incorporated into and do not form part of this press release.
About G-III Apparel Group, Ltd.
G-III designs, sources and markets apparel and accessories under owned, licensed and private label brands. G-III’s substantial portfolio of more than 30 licensed and proprietary brands is anchored by five global power brands: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. G-III’s owned brands include DKNY, Donna Karan, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York and Sonia Rykiel. G-III has fashion licenses under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole, Cole Haan, Guess?, Vince Camuto, Levi’s and Dockers brands. Through its team sports business, G-III has licenses with the National Football League, National Basketball Association, Major League Baseball, National Hockey League and over 150 U.S. colleges and universities. G-III also distributes directly to consumers through its DKNY, Karl Lagerfeld Paris and Vilebrequin stores and its digital channels for the DKNY, Donna Karan, Vilebrequin, Karl Lagerfeld Paris, Andrew Marc, Wilsons Leather and G.H. Bass brands.
