Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2022 | Dec. 01, 2022 | |
Document And Entity Information Abstract | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Oct. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 0-18183 | |
Entity Registrant Name | G III APPAREL GROUP LTD /DE/ | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 41-1590959 | |
Entity Address, Address Line One | 512 Seventh Avenue | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10018 | |
City Area Code | 212 | |
Local Phone Number | 403-0500 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | GIII | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding | 47,488,999 | |
Entity Central Index Key | 0000821002 | |
Current Fiscal Year End Date | --01-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 |
Current assets | |||
Cash and cash equivalents | $ 150,719 | $ 465,984 | $ 279,564 |
Accounts receivable, net of allowance for doubtful accounts of $18.3 million, $17.4 million and $17.4 million, respectively | 881,135 | 605,512 | 844,382 |
Inventories | 900,987 | 512,155 | 448,991 |
Prepaid income taxes | 1,110 | 14,502 | 994 |
Prepaid expenses and other current assets | 50,594 | 54,704 | 53,532 |
Total current assets | 1,984,545 | 1,652,857 | 1,627,463 |
Investments in unconsolidated affiliates | 25,870 | 65,503 | 61,413 |
Property and equipment, net | 54,185 | 48,805 | 49,948 |
Operating lease assets | 216,663 | 169,595 | 176,530 |
Other assets, net | 54,206 | 54,992 | 60,405 |
Other intangibles, net | 34,585 | 31,361 | 32,208 |
Deferred income tax assets, net | 8,973 | 3,559 | 4,682 |
Trademarks | 607,526 | 453,329 | 450,252 |
Goodwill | 303,668 | 262,527 | 265,116 |
Total assets | 3,290,221 | 2,742,528 | 2,728,017 |
Current liabilities | |||
Current portion of notes payable | 91,613 | 4,237 | 4,063 |
Accounts payable | 223,154 | 236,921 | 233,893 |
Accrued expenses | 150,349 | 128,124 | 141,456 |
Customer refund liabilities | 99,528 | 86,788 | 81,271 |
Current operating lease liabilities | 50,645 | 42,763 | 45,117 |
Income tax payable | 26,956 | 9,995 | 38,974 |
Other current liabilities | 933 | 1,977 | 2,228 |
Total current liabilities | 643,178 | 510,805 | 547,002 |
Notes payable, net of discount and unamortized issuance costs | 787,892 | 515,344 | 513,466 |
Deferred income tax liabilities, net | 34,894 | 40,010 | 21,306 |
Noncurrent operating lease liabilities | 185,171 | 142,868 | 147,688 |
Other noncurrent liabilities | 16,787 | 13,118 | 11,558 |
Total liabilities | 1,667,922 | 1,222,145 | 1,241,020 |
Redeemable noncontrolling interests | 41 | 471 | 758 |
Stockholders' Equity | |||
Preferred stock; 1,000 shares authorized; no shares issued | |||
Common stock - $0.01 par value; 120,000 shares authorized; 49,396, 49,396 and 49,396 shares issued, respectively | 264 | 264 | 264 |
Additional paid-in capital | 465,230 | 456,329 | 450,768 |
Accumulated other comprehensive loss | (42,744) | (14,529) | (11,428) |
Retained earnings | 1,245,061 | 1,117,005 | 1,068,575 |
Common stock held in treasury, at cost - 1,907, 829 and 1,480 shares, respectively | (45,553) | (39,157) | (21,940) |
Total stockholders' equity | 1,622,258 | 1,519,912 | 1,486,239 |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ 3,290,221 | $ 2,742,528 | $ 2,728,017 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Millions | Oct. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 |
Statement Of Financial Position [Abstract] | |||
Allowance for doubtful accounts | $ 18.3 | $ 17.4 | $ 17.4 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized | 120,000,000 | 120,000,000 | |
Common stock, shares issued | 49,396,000 | 49,396,000 | 49,396,000 |
Treasury stock, shares | 1,907,000 | 1,480,000 | 827,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,078,299 | $ 1,015,392 | $ 2,372,300 | $ 2,018,383 |
Cost of goods sold | 733,672 | 667,882 | 1,552,708 | 1,282,526 |
Gross profit | 344,627 | 347,510 | 819,592 | 735,857 |
Selling, general and administrative expenses | 239,893 | 182,360 | 616,351 | 470,803 |
Depreciation and amortization | 7,270 | 7,024 | 20,021 | 21,166 |
Asset impairments, net of gain on lease terminations | 250 | 212 | ||
Operating profit (loss) | 97,214 | 158,126 | 183,008 | 243,888 |
Other (loss) income | (2,795) | 898 | 24,823 | 4,693 |
Interest and financing charges, net | (16,052) | (12,354) | (40,805) | (36,932) |
Income before income taxes | 78,367 | 146,670 | 167,026 | 211,649 |
Income tax expense (benefit) | 17,521 | 40,198 | 39,489 | 59,692 |
Net income | 60,846 | 106,472 | 127,537 | 151,957 |
Less: (Loss) income attributable to noncontrolling interests | (257) | (202) | (519) | (206) |
Net income attributable to G-III Apparel Group, Ltd. | $ 61,103 | $ 106,674 | $ 128,056 | $ 152,163 |
Basic: | ||||
Net income per common share | $ 1.29 | $ 2.20 | $ 2.68 | $ 3.14 |
Weighted average number of shares outstanding (in shares) | 47,488 | 48,567 | 47,832 | 48,474 |
Diluted: | ||||
Net income per common share | $ 1.26 | $ 2.16 | $ 2.62 | $ 3.07 |
Weighted average number of shares outstanding (in shares) | 48,475 | 49,458 | 48,866 | 49,499 |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | $ (26,473) | $ (4,402) | $ (28,111) | $ (9,340) |
Other comprehensive loss | (26,473) | (4,402) | (28,111) | (9,340) |
Comprehensive income | 34,373 | 102,070 | 99,426 | 142,617 |
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest [Abstract] | ||||
Net (loss) income | (257) | (202) | (519) | (206) |
Foreign currency translation adjustments | (45) | (104) | 6 | |
Comprehensive income attributable to noncontrolling interests | (302) | (202) | (623) | (200) |
Comprehensive income attributable to G-III Apparel Group, Ltd | $ 34,071 | $ 101,868 | $ 98,803 | $ 142,417 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Treasury Stock, Common [Member] | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance at beginning of period at Jan. 31, 2021 | $ 264 | $ 448,417 | $ (2,094) | $ (271) | $ 916,683 | $ (271) | $ 1,336,241 | |
Balance at beginning of period, treasury at Jan. 31, 2021 | $ (27,029) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity awards exercised/vested, net | (5,089) | 5,089 | ||||||
Share-based compensation expense | 11,773 | 11,773 | ||||||
Taxes paid for net share settlements | (4,333) | (4,333) | ||||||
Other comprehensive income (loss), net | (9,334) | (9,334) | ||||||
Net income (loss) | 152,163 | 152,163 | ||||||
Balance at end of period, treasury at Oct. 31, 2021 | (21,940) | (21,940) | ||||||
Balance at end of period at Oct. 31, 2021 | 264 | 450,768 | (11,428) | 1,068,575 | 1,486,239 | |||
Balance at beginning of period at Jul. 31, 2021 | 264 | 447,476 | (7,026) | 961,901 | 1,380,612 | |||
Balance at beginning of period, treasury at Jul. 31, 2021 | (22,003) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity awards exercised/vested, net | (63) | 63 | ||||||
Share-based compensation expense | 3,354 | 3,354 | ||||||
Taxes paid for net share settlements | 1 | 1 | ||||||
Other comprehensive income (loss), net | (4,402) | (4,402) | ||||||
Net income (loss) | 106,674 | 106,674 | ||||||
Balance at end of period, treasury at Oct. 31, 2021 | (21,940) | (21,940) | ||||||
Balance at end of period at Oct. 31, 2021 | 264 | 450,768 | (11,428) | 1,068,575 | 1,486,239 | |||
Balance at beginning of period at Jan. 31, 2022 | 264 | 456,329 | (14,529) | 1,117,005 | 1,519,912 | |||
Balance at beginning of period, treasury at Jan. 31, 2022 | (39,157) | (39,157) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity awards exercised/vested, net | (10,226) | 10,226 | ||||||
Share-based compensation expense | 28,917 | 28,917 | ||||||
Taxes paid for net share settlements | (9,790) | (9,790) | ||||||
Other comprehensive income (loss), net | (28,215) | (28,215) | ||||||
Repurchases of common stock | (16,622) | (16,622) | ||||||
Net income (loss) | 128,056 | 128,056 | ||||||
Balance at end of period, treasury at Oct. 31, 2022 | (45,553) | (45,553) | ||||||
Balance at end of period at Oct. 31, 2022 | 264 | 465,230 | (42,744) | 1,245,061 | 1,622,258 | |||
Balance at beginning of period at Jul. 31, 2022 | 264 | 461,621 | (16,226) | 1,183,958 | 1,584,001 | |||
Balance at beginning of period, treasury at Jul. 31, 2022 | (45,616) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity awards exercised/vested, net | (63) | 63 | ||||||
Share-based compensation expense | 3,672 | 3,672 | ||||||
Other comprehensive income (loss), net | (26,518) | (26,518) | ||||||
Net income (loss) | 61,103 | 61,103 | ||||||
Balance at end of period, treasury at Oct. 31, 2022 | $ (45,553) | (45,553) | ||||||
Balance at end of period at Oct. 31, 2022 | $ 264 | $ 465,230 | $ (42,744) | $ 1,245,061 | $ 1,622,258 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Cash flows from operating activities | ||
Net income attributable to G-III Apparel Group, Ltd. | $ 128,056 | $ 152,163 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 20,021 | 21,166 |
Loss on disposal of fixed assets | 127 | 55 |
Non-cash operating lease costs | 38,264 | 31,635 |
Loss (gain) on lease terminations | (38) | |
Asset impairments | 250 | |
Dividend received from unconsolidated affiliate | 1,376 | |
Equity (gain) loss in unconsolidated affiliates | (817) | (2,783) |
Change in fair value of equity investment | 1,182 | (1,206) |
Share-based compensation | 28,917 | 11,773 |
Deferred financing charges and debt discount amortization | 7,629 | 7,212 |
Deferred income taxes | (1,347) | 1,747 |
Non-cash gain on fair value of prior minority ownership of Karl Lagerfeld | (30,925) | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (248,280) | (351,683) |
Inventories | (355,313) | (32,488) |
Income taxes, net | 29,444 | 52,229 |
Prepaid expenses and other current assets | 5,274 | 9,071 |
Other assets, net | (718) | 1,003 |
Customer refund liabilities | 12,740 | (18,085) |
Operating lease liabilities | (38,312) | (34,720) |
Accounts payable, accrued expenses and other liabilities | (11,484) | 136,147 |
Net cash provided by operating activities | (415,330) | (15,388) |
Cash flows from investing activities | ||
Operating lease assets initial direct costs | (85) | |
Investment in e-commerce retailer | (25,000) | (25,000) |
Investment in equity securities | (22,378) | |
Sale of equity securities | 22,434 | |
Capital expenditures | (14,803) | (13,004) |
Acquisition of KLH, net of cash acquired | (168,592) | |
Acquisition of foreign hospitality business, net of cash acquired | (2,701) | |
Investment in brand acquisition | (13,266) | |
Net cash used in investing activities | (211,125) | (51,270) |
Cash flows from financing activities | ||
Repayment of borrowings - revolving facility | (172,513) | |
Proceeds from borrowings - revolving facility | 512,748 | |
Repayment of borrowings - foreign facilities | (28,512) | (277) |
Proceeds from borrowings - foreign facilities | 36,863 | 100 |
Purchase of treasury shares | (16,622) | |
Taxes paid for net share settlements | (9,790) | (4,333) |
Net cash (used in) provided by financing activities | 322,174 | (4,510) |
Foreign currency translation adjustments | (10,984) | (1,202) |
Net increase in cash and cash equivalents | (315,265) | (72,370) |
Cash and cash equivalents at beginning of period | 465,984 | 351,934 |
Cash payments: | ||
Interest, net | 38,391 | 36,954 |
Income tax payments, net | $ 4,643 | 5,370 |
Stock received from licensing agreement | $ 4,831 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Oct. 31, 2022 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation As used in these financial statements, the term “Company” or “G-III” refers to G-III Apparel Group, Ltd. and its subsidiaries. The Company designs, sources and markets an extensive range of apparel, including outerwear, dresses, sportswear, swimwear, women’s suits and women’s performance wear, as well as women’s handbags, footwear, small leather goods, cold weather accessories and luggage. The Company also operates retail stores and licenses its proprietary brands for several product categories. The Company consolidates the accounts of its wholly-owned and majority-owned subsidiaries. Karl Lagerfeld Holding B.V. (“KLH”) is a Dutch limited liability company that was 19% owned by the Company through May 30, 2022 and was accounted for during that time using the equity method of accounting. Effective May 31, 2022, the Company acquired the remaining 81% interest in KLH that it did not previously own and, as a result, KLH began being treated as a consolidated wholly-owned subsidiary. KL North America B.V. (“KLNA”) is a Dutch joint venture limited liability company that was 49% owned by the Company and 51% indirectly owned by KLH through May 30, 2022 and was accounted for during that time using the equity method of accounting. Effective May 31, 2022, KLNA became an indirect wholly-owned subsidiary of the Company as a result of the Company’s acquisition of the remaining 81% interest in KLH it did not previously own. All material intercompany balances and transactions have been eliminated. The results of KLH are included in the Company’s consolidated financial statements beginning May 31, 2022. Vilebrequin International SA (“Vilebrequin”), a Swiss corporation that is wholly-owned by the Company, KLH, Fabco Holding B.V. (“Fabco”) and Sonia Rykiel, which the Company purchased in October 2021, report results on a calendar year basis rather than on the January 31 fiscal year basis used by the Company. Accordingly, the results of Vilebrequin, KLH, Fabco and Sonia Rykiel are included in the financial statements for the quarter ended or ending closest to the Company’s fiscal quarter end. For example, with respect to the Company’s results for the nine-month period ended October 31, 2022, the results of Vilebrequin, Fabco and Sonia Rykiel are included for the nine-month period ended September 30, 2022. For the three and nine month periods ended September 30, 2022, the results of KLH, which includes KLNA, are included for the period from July 1, 2022 through September 30, 2022 and June 1, 2022 through September 30, 2022, respectively. The results of the Company’s previous 49% ownership interest in KLNA and 19% ownership interest in KLH are included for the period from February 1, 2022 through May 30, 2022. The Company’s retail operations segment reports on a 52/53-week fiscal year. For fiscal 2023 and 2022, the three and nine-month periods for the retail operations segment were each 13-week and 39-week periods, respectively, and ended on October 29, 2022 and October 30, 2021, respectively. The results for the three and nine months ended October 31, 2022 are not necessarily indicative of the results expected for the entire fiscal year, given the seasonal nature of the Company’s business and the effects of the COVID-19 pandemic on the Company’s business. The accompanying financial statements included herein are unaudited. All adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations and cash flows for the interim period presented have been reflected. The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2022 filed with the Securities and Exchange Commission (the “SEC”). Assets and liabilities of the Company’s foreign operations, where the functional currency is not the U.S. dollar (reporting currency), are translated from the foreign currency into U.S. dollars at period-end rates, while income and expenses are translated at the weighted-average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive loss within stockholders’ equity. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 9 Months Ended |
Oct. 31, 2022 | |
Allowance for Doubtful Accounts [Abstract] | |
Allowance for Doubtful Accounts | Note 2 – Allowance for Doubtful Accounts The Company’s financial instruments consist of trade receivables arising from revenue transactions in the ordinary course of business. The Company considers its trade receivables to consist of two portfolio segments: wholesale and retail trade receivables. Wholesale trade receivables result from credit the Company has extended to its wholesale customers based on pre-defined criteria and are generally due within 30 to 60 days. Retail trade receivables primarily relate to amounts due from third-party credit card processors for the settlement of debit and credit card transactions and are typically collected within 3 to 5 days. The Company’s accounts receivable and allowance for doubtful accounts as of October 31, 2022, October 31, 2021 and January 31, 2022 were: October 31, 2022 Wholesale Retail Total (In thousands) Accounts receivable, gross $ 898,383 $ 1,010 $ 899,393 Allowance for doubtful accounts (18,192) (66) (18,258) Accounts receivable, net $ 880,191 $ 944 $ 881,135 October 31, 2021 Wholesale Retail Total (In thousands) Accounts receivable, gross $ 860,245 $ 1,586 $ 861,831 Allowance for doubtful accounts (17,412) (37) (17,449) Accounts receivable, net $ 842,833 $ 1,549 $ 844,382 January 31, 2022 Wholesale Retail Total (In thousands) Accounts receivable, gross $ 620,737 $ 2,166 $ 622,903 Allowance for doubtful accounts (17,307) (84) (17,391) Accounts receivable, net $ 603,430 $ 2,082 $ 605,512 The allowance for doubtful accounts for wholesale trade receivables is estimated based on several factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations (such as in the case of bankruptcy filings (including potential bankruptcy filings), extensive delay in payment or substantial downgrading by credit rating agencies), a specific reserve for bad debt is recorded against amounts due from that customer to reduce the net recognized receivable to the amount reasonably expected to be collected. For all other wholesale customers, an allowance for doubtful accounts is determined through analysis of the aging of accounts receivable at the end of the reporting period for financial statements, assessments of collectability based on historical trends and an evaluation of the impact of economic conditions. The Company considers both current and forecasted future economic conditions in determining the adequacy of its allowance for doubtful accounts. The allowance for doubtful accounts for retail trade receivables is estimated at the credit card chargeback rate applied to the previous 90 days of credit card sales. In addition, the Company considers both current and forecasted future economic conditions in determining the adequacy of its allowance for doubtful accounts. The Company had the following activity in its allowance for credit losses: Wholesale Retail Total (In thousands) Balance as of January 31, 2022 $ (17,307) $ (84) $ (17,391) Provision for credit losses, net (935) 18 (917) Accounts written off as uncollectible 50 — 50 Balance as of October 31, 2022 $ (18,192) $ (66) $ (18,258) Balance as of January 31, 2021 $ (17,429) $ (30) $ (17,459) Provision for credit losses, net (54) (7) (61) Accounts written off as uncollectible 71 — 71 Balance as of October 31, 2021 $ (17,412) $ (37) $ (17,449) Balance as of January 31, 2021 $ (17,429) $ (30) $ (17,459) Provision for credit losses, net (103) (54) (157) Accounts written off as uncollectible 225 — 225 Balance as of January 31, 2022 $ (17,307) $ (84) $ (17,391) |
Inventories
Inventories | 9 Months Ended |
Oct. 31, 2022 | |
Inventories [Abstract] | |
Inventories | Note 3 – Inventories Wholesale inventories, which comprise a significant portion of the Company’s inventory, are stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. Retail and Vilebrequin inventories are stated at the lower of cost (determined by the weighted average method) or net realizable value. Substantially all of the Company’s inventories consist of finished goods. The inventory return asset, which consists of the amount of goods that are anticipated to be returned by customers, was $17.1 million, $13.9 million and $18.9 million as of October 31, 2022, October 31, 2021 and January 31, 2022, respectively. The inventory return asset is recorded within prepaid expenses and other current assets on the condensed consolidated balance sheets. Inventory held on consignment by the Company’s customers totaled $6.5 million, $5.6 million and $4.5 million at October 31, 2022, October 31, 2021 and January 31, 2022, respectively. Consignment inventory is held by the Company’s customers. The Company reflects this inventory on its condensed consolidated balance sheets. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Oct. 31, 2022 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 4 – Fair Value of Financial Instruments Generally Accepted Accounting Principles establish a three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy for a particular asset or liability depends on the inputs used in its valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally-derived (unobservable). A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: ● Level 1 — inputs to the valuation methodology based on quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 — inputs to the valuation methodology based on quoted prices for similar assets or liabilities in active markets for substantially the full term of the financial instrument; quoted prices for identical or similar instruments in markets that are not active for substantially the full term of the financial instrument; and model-derived valuations whose inputs or significant value drivers are observable. ● Level 3 — inputs to the valuation methodology based on unobservable prices or valuation techniques that are significant to the fair value measurement. The following table summarizes the carrying values and the estimated fair values of the Company’s debt instruments: Carrying Value Fair Value October 31, October 31, January 31, October 31, October 31, January 31, Financial Instrument Level 2022 2021 2022 2022 2021 2022 (In thousands) Secured Notes 1 $ 400,000 $ 400,000 $ 400,000 $ 379,000 $ 400,000 $ 422,020 Revolving credit facility 2 340,235 — — 340,235 — — Note issued to LVMH 3 119,415 112,613 114,255 118,173 107,983 110,123 Unsecured loans 2 10,446 8,444 8,367 10,446 8,444 8,367 Overdraft facilities 2 3,664 2,841 2,903 3,664 2,841 2,903 Foreign credit facility 2 10,416 — — 10,416 — — The Company’s debt instruments are recorded at their carrying values in its condensed consolidated balance sheets, which may differ from their respective fair values. The fair value of the Company’s secured notes is based on their current market price as of October 31, 2022. The carrying amount of the Company’s variable rate debt approximates the fair value, as interest rates change with the market rates. Furthermore, the carrying value of all other financial instruments potentially subject to valuation risk (principally consisting of cash, accounts receivable and accounts payable) also approximates fair value due to the short-term nature of these accounts. The 2% note in the principal amount of $125 million (the “LVMH Note”) issued to LVMH Moet Hennessy Louis Vuitton Inc. (“LVMH”) in connection with the acquisition of DKNY and Donna Karan was recorded on the balance sheet at a discount of $40.0 million in accordance with ASC 820 – Fair Value Measurements The fair value of the LVMH Note was considered a Level 3 valuation in the fair value hierarchy. Non-Financial Assets and Liabilities The Company’s non-financial assets that are measured at fair value on a nonrecurring basis include long-lived assets, which consist primarily of property and equipment and operating lease assets. The Company reviews these assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable. For assets that are not recoverable, an impairment loss is recognized equal to the difference between the carrying amount of the asset or asset group and its estimated fair value. For operating lease assets, the Company determines the fair value of the assets by discounting the estimated market rental rates over the remaining term of the lease. These fair value measurements are considered level 3 measurements in the fair value hierarchy. During the fourth quarter of fiscal 2022, the Company recorded a $1.5 million impairment charge primarily related to leasehold improvements, furniture and fixtures and operating lease assets at certain DKNY, Karl Lagerfeld Paris and Vilebrequin stores as a result of the performance at these stores. |
Leases
Leases | 9 Months Ended |
Oct. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 5 – Leases The Company leases retail stores, warehouses, distribution centers, office space and certain equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Most leases are for a term of one one Certain of the Company’s lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants. The Company’s lease assets and liabilities as of October 31, 2022, October 31, 2021 and January 31, 2022 consist of the following: Leases Classification October 31, 2022 October 31, 2021 January 31, 2022 (In thousands) Assets Operating Operating lease assets $ 216,663 $ 176,530 $ 169,595 Liabilities Current operating Current operating lease liabilities $ 50,645 $ 45,117 $ 42,763 Noncurrent operating Noncurrent operating lease liabilities 185,171 147,688 142,868 Total lease liabilities $ 235,816 $ 192,805 $ 185,631 The Company’s operating lease assets and operating lease liabilities increased during fiscal 2023 primarily due to the acquisition of KLH. The Company recorded lease costs of $17.1 million and $46.1 million during the three and nine months ended October 31, 2022, respectively. The Company recorded lease costs of $14.0 million and $41.1 million during the three and nine months ended October 31, 2021, respectively. Lease costs are recorded within selling, general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income. The Company recorded variable lease costs and short-term lease costs of $6.1 million and $16.7 million for the three and nine months ended October 31, 2022, respectively. The Company recorded variable lease costs and short-term lease costs of $2.8 million and $6.2 million for the three and nine months ended October 31, 2021, respectively. Short-term lease costs are immaterial. As of October 31, 2022, the Company’s maturity of operating lease liabilities in the years ending up to January 31, 2027 and thereafter are as follows: Year Ending January 31, Amount (In thousands) 2023 $ 17,526 2024 63,708 2025 55,124 2026 44,808 2027 34,691 After 2027 75,086 Total lease payments $ 290,943 Less: Interest 55,127 Present value of lease liabilities $ 235,816 As of October 31, 2022, there are no material leases that are legally binding but have not yet commenced. As of October 31, 2022, the weighted average remaining lease term related to operating leases is 5.5 years. The weighted average discount rate related to operating leases is 7.7%. Cash paid for amounts included in the measurement of operating lease liabilities is $47.6 million and $44.5 million during the nine months ended October 31, 2022 and October 31, 2021, respectively. Right-of-use assets obtained in exchange for lease obligations were $96.7 million and $24.6 million during the nine months ended October 31, 2022 and October 31, 2021, respectively. |
Karl Lagerfeld Acquisition
Karl Lagerfeld Acquisition | 9 Months Ended |
Oct. 31, 2022 | |
Business Combinations [Abstract] | |
Karl Lagerfeld Acquisition | Note 6 – Karl Lagerfeld Acquisition On April 29, 2022, the Company entered into a share purchase agreement (the “Purchase Agreement”) with a group of investors pursuant to which the Company agreed to acquire, on the terms set forth and subject to the conditions set forth in the Purchase Agreement, the remaining 81% interest in KLH that it did not already own, for an aggregate consideration of €202.0 million (approximately $216.8 million) in cash, after taking into account certain adjustments. The acquisition closed on May 31, 2022. The Company funded the purchase price from cash on hand. On May 31, 2022, the effective date of the acquisition, the Company’s previously held 19% investment in KLH and 49% investment in KLNA were remeasured at fair value using a market approach based on the purchase price of the acquisition and a discount for lack of control related to the Company’s previously held minority investment in KLH. As a result of this remeasurement, a non-cash gain of $30.9 million was recorded as of the effective date of the acquisition. The addition of KLH to the Company’s portfolio of owned brands advances several of its strategic initiatives, including increasing its direct ownership of brands and their licensing opportunities and further diversifying its global presence. This acquisition offers additional opportunities to expand the Company’s international growth by further developing its European-based brands, which also include Vilebrequin and Sonia Rykiel. The Company believes that KLH’s existing digital channel presence provides an opportunity for the Company to enhance its omni-channel business and further accelerate its digital initiatives. Purchase Price Consideration The purchase price of $216.8 million, after taking into account certain adjustments, was paid from cash on hand. The purchase price has been revised to include adjustments in accordance with the Purchase Agreement. The initial purchase price and the valuation of the prior minority ownership for the acquisition of KLH is as follows (in thousands): Cash disbursed for the acquisition of KLH $ 168,592 Plus: cash acquired 38,499 Plus: aggregate adjustments to purchase price 9,729 Initial purchase price 216,820 Plus: fair value of prior minority ownership 102,858 Total consideration $ 319,678 Allocation of the Purchase Price Consideration The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition: (In thousands) Cash and cash equivalents $ 38,499 Accounts receivable, net 27,331 Inventories 33,489 Prepaid income taxes 1,100 Prepaid expenses and other current assets 3,347 Property, plant and equipment, net 11,545 Operating lease assets 55,753 Goodwill 45,894 Trademarks 178,823 Customer relationships 4,294 Investments in unconsolidated affiliates 1,381 Deferred income taxes 9,183 Other long-term assets 2,237 Total assets acquired $ 412,876 Notes payable 3,606 Accounts payable 8,057 Accrued expenses 15,261 Operating lease liabilities 58,942 Income taxes payable 2,099 Other long-term liabilities 5,233 Total liabilities assumed $ 93,198 Total fair value of acquisition consideration $ 319,678 During the quarter ended October 31, 2022, the Company recorded adjustments to the fair values of assets acquired and liabilities assumed at the date of acquisition based on additional information obtained. The Company recorded an additional $2.8 million in both total assets and total liabilities The Company recognized goodwill of approximately $45.9 million in connection with the acquisition of KLH. The goodwill was assigned to the Company’s wholesale operations reporting unit. The Company intends to make an election under Internal Revenue Code Section 338(g) to amortize the total goodwill and intangible assets over a 15 year period for income tax purposes in the United States. The fair values assigned to identifiable intangible assets acquired were based on assumptions and estimates made by management using unobservable inputs reflecting the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability based on the best information available. The fair values of the trademarks were determined using the relief from royalty method and the fair value of the customer relationships were determined using an income approach. The Company classifies these intangibles as Level 3 fair value measurements. Identifiable intangible assets acquired include the following (in thousands): Weighted Average Fair Value Amortization Period Trademarks $ 178,823 — Customer relationships 4,294 8 $ 183,117 — The Company recognized approximately $5.4 million of acquisition related costs that were expensed in fiscal 2022 and fiscal 2023. The fiscal 2022 and fiscal 2023 acquisition and integration costs are recorded within selling, general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income for the fiscal year ended January 31, 2022 and for the nine months ended October 31, 2022, respectively. The estimates of fair value of assets acquired and liabilities assumed are preliminary and subject to change based on completion of certain working capital adjustments and the tax implications of the Company’s purchase price allocation. The purchase price allocation for acquired companies can be modified for up to one year from the date of acquisition. Net Sales, Operating Income and Pro Forma Impact of the Transaction The amount of net sales and operating income of KLH since the acquisition date included in the condensed consolidated statements of operations and comprehensive income for the three months ended October 31, 2022 were $51.9 million and $4.0 million, respectively. The amount of net sales and operating income of KLH since the acquisition date included in the condensed consolidated statements of operations comprehensive income for the nine months ended October 31, 2022 were $69.2 million and $5.1 million, respectively. The following table reflects the unaudited pro forma consolidated results of operations of the Company for the periods presented, as though the acquisition of KLH had occurred on February 1, 2021. Three Months Ended October 31, Nine Months Ended October 31, 2022 2021 2022 2021 (unaudited, in thousands, except per share amounts) Net sales $ 1,078,299 $ 1,054,143 $ 2,441,024 $ 2,127,604 Net income 63,729 105,240 105,428 168,397 Earnings per share: Basic 1.33 2.17 2.20 3.48 Diluted 1.30 2.13 2.15 3.40 The pro forma adjustments are based upon available information and certain assumptions that the Company considers reasonable. The unaudited pro forma condensed combined financial data is based on preliminary estimates and assumptions set forth in the accompanying notes. Pro forma adjustments are necessary to reflect (i) the changes in depreciation and amortization expense resulting from fair value adjustments to intangible assets, (ii) amortization of the inventory fair value adjustment, (iii) expenses for incentive compensation arrangements acquired as part of the acquisition agreement, (iv) elimination of royalty expenses related to the Company’s license agreement with KLNA, (v) the taxation of G-III’s and KLH’s combined income as a result of the acquisition, as well as the tax effects related to such pro forma adjustments, (vi) the $30.9 million gain recorded to remeasure to fair value the previously held investments in KLH and KLNA as though the gain was recorded on February 1, 2021 and (vii) adjustments for accounting policy changes to conform to G-III’s presentation. The pro forma results do not include any realized or anticipated cost synergies or other effects of the integration of KLH. Accordingly, such pro forma amounts are not indicative of the results that actually would have occurred had the acquisition been completed on February 1, 2021, nor are they indicative of the future operating results of the combined company. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Oct. 31, 2022 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 7 – Intangible Assets Intangible assets consist of: October 31, 2022 Estimated Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) Finite-lived intangible assets Licenses 14 years $ 18,414 $ (16,808) $ 1,606 Trademarks 8-12 years 2,194 (2,194) — Customer relationships 15-17 years 51,847 (21,973) 29,874 Other 5-10 years 7,444 (4,339) 3,105 Total finite-lived intangible assets $ 79,899 $ (45,314) $ 34,585 Indefinite-lived intangible assets Goodwill 303,668 Trademarks 607,526 Total indefinite-lived intangible assets 911,194 Total intangible assets, net $ 945,779 October 31, 2021 Estimated Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) Finite-lived intangible assets Licenses 14 years $ 19,481 $ (17,088) $ 2,393 Trademarks 8-12 years 2,194 (2,194) — Customer relationships 15-17 years 48,291 (19,632) 28,659 Other 5-10 years 8,526 (7,370) 1,156 Total finite-lived intangible assets $ 78,492 $ (46,284) $ 32,208 Indefinite-lived intangible assets Goodwill 265,116 Trademarks 450,252 Total indefinite-lived intangible assets 715,368 Total intangible assets, net $ 747,576 January 31, 2022 Estimated Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) Finite-lived intangible assets Licenses 14 years $ 19,334 $ (17,113) $ 2,221 Trademarks 8-12 years 2,194 (2,194) — Customer relationships 15-17 years 48,240 (20,224) 28,016 Other 5-10 years 8,534 (7,410) 1,124 Total finite-lived intangible assets $ 78,302 $ (46,941) $ 31,361 Indefinite-lived intangible assets Goodwill 262,527 Trademarks 453,329 Total indefinite-lived intangible assets 715,856 Total intangible assets, net $ 747,217 Amortization expense Amortization expense with respect to finite-lived intangibles amounted to $1.0 million and $2.7 million for the three and nine months ended October 31, 2022, respectively. Amortization expense with respect to finite-lived intangibles amounted to $0.9 million and $2.8 million for the three and nine months ended October 31, 2021, respectively. Amortization expense with respect to finite-lived intangibles amounted to $3.7 million for the year ended January 31, 2022. The estimated amortization expense with respect to intangibles to be recorded for the next five years is as follows: Year Ending January 31, Amortization Expense (In thousands) 2023 $ 1,275 2024 3,921 2025 3,869 2026 3,811 2027 3,579 Intangible assets with finite lives are amortized over their estimated useful lives and measured for impairment when events or circumstances indicate that the carrying value may be impaired. Change in Goodwill Changes in the amounts of goodwill for the nine months ended October 31, 2022 and the year ended January 31, 2022 are summarized by reportable segment as follows (in thousands): Wholesale Retail Total January 31, 2021 $ 263,135 — $ 263,135 Acquisition of Sonia Rykiel 1,518 — 1,518 Currency translation (2,126) — (2,126) January 31, 2022 262,527 — 262,527 Acquisition of Karl Lagerfeld 45,894 — 45,894 Acquisition of other foreign business 3,523 — 3,523 Currency translation (8,276) — (8,276) October 31, 2022 $ 303,668 $ — $ 303,668 Impairment Goodwill represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method. The Company reviews and tests its goodwill and intangible assets with indefinite lives for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may be impaired. The Company performs its goodwill test as of January 31 of each year using a qualitative evaluation or a quantitative test using an income approach through a discounted cash flow analysis methodology. The discounted cash flow approach requires that certain assumptions and estimates be made regarding industry economic factors and future profitability. The Company also performs its annual test for intangible assets with indefinite lives as of January 31 of each year using a qualitative evaluation or a quantitative test using a relief from royalty method, another form of the income approach. The relief from royalty method requires assumptions regarding industry economic factors and future profitability. The Company performed its annual tests of its wholesale reporting unit and its indefinite-lived trademarks as of January 31, 2022 and determined that no impairment existed at that date. The result of the Company’s annual test determined that the estimated fair value of its wholesale reporting unit and its indefinite-lived trademarks were substantially in excess of their carrying values. The Company’s indefinite-lived trademark balance is primarily composed of the Donna Karan/DKNY trademark that was acquired in fiscal 2017 and the Karl Lagerfeld trademark that was acquired in fiscal 2023. The fair value of the Company’s goodwill and indefinite-lived intangible assets are considered a Level 3 valuation in the fair value hierarchy. |
Net Income (Loss) per Common Sh
Net Income (Loss) per Common Share | 9 Months Ended |
Oct. 31, 2022 | |
Net Income (Loss) per Common Share | |
Net Income (Loss) per Common Share | Note 8 – Net Income per Common Share Basic net income per common share has been computed using the weighted average number of common shares outstanding during each period. Diluted net income per share, when applicable, is computed using the weighted average number of common shares and potential dilutive common shares, consisting of unvested restricted stock unit awards and stock options outstanding during the period. Approximately 310,600 and 258,600 shares of common stock have been excluded from the diluted net income per share calculation for the three and nine months ended October 31, 2022, respectively. Approximately 68,800 and 18,300 shares of common stock have been excluded from the diluted net income per share calculation for the three and nine months ended October 31, 2021. All share-based payments outstanding that vest based on the achievement of performance conditions, and for which the respective performance conditions have not been achieved, have been excluded from the diluted per share calculation. The following table reconciles the numerators and denominators used in the calculation of basic and diluted net income per share: Three Months Ended October 31, Nine Months Ended October 31, 2022 2021 2022 2021 (In thousands, except share and per share amounts) Net income attributable to G-III Apparel Group, Ltd. $ 61,103 $ 106,674 $ 128,056 $ 152,163 Basic net income per share: Basic common shares 47,488 48,567 47,832 48,474 Basic net income per share $ 1.29 $ 2.20 $ 2.68 $ 3.14 Diluted net income per share: Basic common shares 47,488 48,567 47,832 48,474 Dilutive restricted stock unit awards and stock options 987 891 1,034 1,025 Diluted common shares 48,475 49,458 48,866 49,499 Diluted net income per share $ 1.26 $ 2.16 $ 2.62 $ 3.07 |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Oct. 31, 2022 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | Note 9 – Notes Payable Long-term debt consists of the following: October 31, 2022 October 31, 2021 January 31, 2022 (In thousands) Secured Notes $ 400,000 $ 400,000 $ 400,000 Revolving credit facility 340,235 — — LVMH Note 125,000 125,000 125,000 Unsecured loans 10,446 8,444 8,367 Overdraft facilities 3,664 2,841 2,903 Foreign credit facility 10,416 — — Subtotal 889,761 536,285 536,270 Less: Net debt issuance costs (1) (4,671) (6,369) (5,944) Debt discount (5,585) (12,387) (10,745) Current portion of long-term debt (91,613) (4,063) (4,237) Total $ 787,892 $ 513,466 $ 515,344 (1) Does not include debt issuance costs, net of amortization, totaling $4.4 million, $6.0 million and $5.6 million as of October 31, 2022, October 31, 2021 and January 31, 2022, respectively, related to the revolving credit facility. These debt issuance costs have been deferred and are classified in assets in the accompanying condensed consolidated balance sheets in accordance with ASC 835. Senior Secured Notes In August 2020, the Company completed a private debt offering of $400 million aggregate principal amount of its 7.875% Senior Secured Notes due 2025 (the “Notes”). The terms of the Notes are governed by an indenture (the “Indenture”), among the Company, the guarantors party thereto and U.S. Bank, National Association, as trustee and collateral agent (the “Collateral Agent”). The net proceeds of the Notes were used (i) to repay the $300 million that was outstanding under the Company’s prior term loan facility due 2022 (the “Term Loan”), (ii) to pay related fees and expenses and (iii) for general corporate purposes. The Notes bear interest at a rate of 7.875% per year payable semi-annually in arrears on February 15 and August 15 of each year. The Notes are unconditionally guaranteed on a senior-priority secured basis by the Company’s current and future wholly-owned domestic subsidiaries that guarantee any of the Company’s credit facilities, including the Company’s ABL facility (the “ABL Facility”) pursuant to the ABL Credit Agreement, or certain future capital markets indebtedness of the Company or guarantors. The Notes and the related guarantees are secured by (i) first priority liens on the Company’s Cash Flow Priority Collateral (as defined in the Indenture), and (ii) a second-priority lien on the Company’s ABL Priority Collateral (as defined in the Indenture), in each case subject to permitted liens described in the Indenture. In connection with the issuance of the Notes and execution of the Indenture, the Company and the Guarantors entered into a pledge and security agreement (the “Pledge and Security Agreement”), among the Company, the Guarantors and the Collateral Agent. The Notes are subject to the terms of the intercreditor agreement which governs the relative rights of the secured parties in respect of the ABL Facility and the Notes (the “Intercreditor Agreement”). The Intercreditor Agreement restricts the actions permitted to be taken by the Collateral Agent with respect to the Collateral on behalf of the holders of the Notes. The Notes are also subject to the terms of the LVMH Note subordination agreement which governs the relative rights of the secured parties in respect of the LVMH Note, the ABL Facility and the Notes. The Company may redeem some or all of the Notes at any time and from time to time at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. If the Company experiences a Change of Control (as defined in the Indenture), the Company is required to offer to repurchase the Notes at 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. The Indenture contains covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to incur or guarantee additional indebtedness, pay dividends or make other restricted payments, make certain investments, incur restrictions on the ability of the Company’s restricted subsidiaries that are not guarantors to pay dividends or make certain other payments, create or incur certain liens, sell assets and subsidiary stock, impair the security interests, transfer all or substantially all of the Company’s assets or enter into merger or consolidation transactions, and enter into transactions with affiliates. The Indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest, breach of other agreements in the Indenture, failure to pay certain other indebtedness, failure of certain guarantees to be enforceable, failure to perfect certain collateral securing the Notes, failure to pay certain final judgments, and certain events of bankruptcy or insolvency. The Company incurred debt issuance costs totaling $8.5 million related to the Notes. In accordance with ASC 835, the debt issuance costs have been deferred and are presented as a contra-liability, offsetting the outstanding balance of the Notes, and are amortized over the remaining life of the Notes. Second Amended and Restated ABL Credit Agreement In August 2020, the Company’s subsidiaries, G-III Leather Fashions, Inc., Riviera Sun, Inc., CK Outerwear, LLC, AM Retail Group, Inc. and The Donna Karan Company Store LLC (collectively, the “Borrowers”), entered into the second amended and restated credit agreement (the “ABL Credit Agreement”) with the Lenders named therein and with JPMorgan Chase Bank, N.A., as Administrative Agent. The ABL Credit Agreement is a five year senior secured credit facility subject to a springing maturity date if, subject to certain conditions, the LVMH Note is not refinanced or repaid prior to the date that is 91 days prior to the date of any relevant payment thereunder. The ABL Credit Agreement provides for borrowings in the aggregate principal amount of up to $650 million. The Company and its subsidiaries, G-III Apparel Canada ULC, Gabrielle Studio, Inc., Donna Karan International Inc. and Donna Karan Studio LLC (the “Guarantors”), are Loan Guarantors under the ABL Credit Agreement. The ABL Credit Agreement refinanced, amended and restated the Amended Credit Agreement, dated as of December 1, 2016 (as amended, supplemented or otherwise modified from time to time prior to August 7, 2020, the “Prior Credit Agreement”). The Prior Credit Agreement provided for borrowings of up to $650 million. The ABL Credit Agreement extended the maturity date of this facility from December 2021 to August 2025, subject to a springing maturity date if, subject to certain conditions, the LVMH Note is not refinanced or repaid prior to the date that is 91 days prior to the date of any relevant payment thereunder. Amounts available under the ABL Credit Agreement are subject to borrowing base formulas and overadvances as specified in the ABL Credit Agreement. Borrowings bear interest, at the Borrowers’ option, at LIBOR plus a margin of 1.75% to 2.25% or an alternate base rate margin of 0.75% to 1.25% (defined as the greatest of (i) the “prime rate” of JPMorgan Chase Bank, N.A. from time to time, (ii) the federal funds rate plus 0.5% and (iii) the LIBOR rate for a borrowing with an interest period of one month) plus 1.00%, with the applicable margin determined based on Borrowers’ availability under the ABL Credit Agreement. The ABL Credit Agreement is secured by specified assets of the Borrowers and the Guarantors. In addition to paying interest on any outstanding borrowings under the ABL Credit Agreement, the Company is required to pay a commitment fee to the lenders under the credit agreement with respect to the unutilized commitments. The commitment fee accrues at a tiered rate equal to 0.50% per annum on the average daily amount of the available commitments when the average usage is less than 50% of the total available commitments and decreases to 0.35% per annum on the average daily amount of the available commitments when the average usage is greater than or equal to 50% of the total available commitments. As of October 31, 2022, interest under the ABL Credit Agreement was being paid at an average rate of 4.91% per annum. The revolving credit facility contains covenants that, among other things, restrict the Company’s ability to, subject to specified exceptions, incur additional debt; incur liens; sell or dispose of certain assets; merge with other companies; liquidate or dissolve the Company; acquire other companies; make loans, advances, or guarantees; and make certain investments. In certain circumstances, the revolving credit facility also requires the Company to maintain a fixed charge coverage ratio, as defined in the agreement, not less than 1.00 to 1.00 for each period of twelve consecutive fiscal months of the Company. As of October 31, 2022, the Company was in compliance with these covenants. As of October 31, 2022, the Company had $340.2 million of borrowings outstanding under the ABL Credit Agreement. The ABL credit agreement also includes amounts available for letters of credit. As of October 31, 2022, there were outstanding trade and standby letters of credit amounting to $6.5 million and $3.4 million, respectively. At the date of the refinancing of the Prior Credit Agreement, the Company had $3.3 million of unamortized debt issuance costs remaining from the Prior Credit Agreement. The Company extinguished and charged to interest expense $0.4 million of the prior debt issuance costs and incurred new debt issuance costs totaling $5.1 million related to the ABL Credit Agreement. The Company has a total of $8.0 million debt issuance costs related to the ABL Credit Agreement. As permitted under ASC 835, the debt issuance costs have been deferred and are presented as an asset which is amortized ratably over the term of the ABL Credit Agreement. LVMH Note As a portion of the consideration for the acquisition of Donna Karan International (“DKI”), the Company issued to LVMH a junior lien secured promissory note in the principal amount of $125.0 million that bears interest at the rate of 2% per year. $75.0 million of the principal amount of the LVMH Note is due and payable on June 1, 2023 and therefore has been recorded within the current portion of notes payable on the condensed consolidated balance sheets and $50.0 million of such principal amount is due and payable on December 1, 2023. ASC 820 requires the note to be recorded at fair value at issuance. As a result, the Company recorded a $40.0 million debt discount upon issuance of the LVMH Note. This discount is being amortized as interest expense using the effective interest method over the term of the LVMH Note. Unsecured Loans Several of the Company’s foreign entities borrow funds under various unsecured loans of which a portion is to provide funding for operations in the normal course of business while other loans are European state backed loans as part of COVID-19 relief programs. In the aggregate, the Company is currently required to make quarterly installment payments of principal in the amount of €0.4 million under these loans. Interest on the outstanding principal amount of the unsecured loans accrues at a fixed rate equal to 0% to 5.0% per annum, payable on either a quarterly or monthly basis. As of October 31, 2022, the Company had an aggregate outstanding balance of €10.7 million ($10.4 million) under these unsecured loans. Overdraft Facilities During fiscal 2022, T.R.B International SA (“TRB”) entered into several overdraft facilities that allow for applicable bank accounts to be in a negative position up to a certain maximum overdraft. TRB entered into an uncommitted overdraft facility with HSBC Bank allowing for a maximum overdraft of €5 million. Interest on drawn balances accrues at a rate equal to the Euro Interbank Offered Rate plus a margin of 1.75% per annum, payable quarterly. The facility may be cancelled at any time by TRB or HSBC Bank. As part of a COVID-19 relief program, TRB and its subsidiaries have also entered into several state backed overdraft facilities with UBS Bank in Switzerland for an aggregate of CHF 4.7 million at varying interest rates of 0% to 0.5%. As of October 31, 2022, TRB had an aggregate of €3.7 million ($3.7 million) drawn under these facilities. Foreign Credit Facility KLH has a credit agreement with ABN AMRO Bank N.V. with a credit limit of €15.0 million which is secured by specified assets of KLH. Borrowings bear interest at the Euro Interbank Offered Rate (“EURIBOR”) plus a margin of 1.7%. As of October 31, 2022, KLH had €10.6 million ($10.4 million) of borrowings outstanding under this credit facility. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Oct. 31, 2022 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 10 – Revenue Recognition Disaggregation of Revenue In accordance with ASC 606 – Revenue from Contracts with Customers Wholesale Operations Segment. Retail Operations Segment. Contract Liabilities The Company’s contract liabilities, which are recorded within accrued expenses in the accompanying condensed consolidated balance sheets, primarily consist of gift card liabilities and advance payments from licensees. In some of its retail concepts, the Company also offers a limited loyalty program where customers accumulate points redeemable for cash discount certificates that expire 90 days after issuance. Total contract liabilities were $3.3 million, $3.8 million and $5.1 million at October 31, 2022, October 31, 2021 and January 31, 2022, respectively. The Company recognized $2.7 million in revenue for the three months ended October 31, 2022 related to contract liabilities that existed at July 31, 2022. The Company recognized $3.2 million in revenue for the nine months ended October 31, 2022 related to contract liabilities that existed at January 31, 2022. There were no contract assets recorded as of October 31, 2022, October 31, 2021 and January 31, 2022. Substantially all of the advance payments from licensees as of October 31, 2022 are expected to be recognized as revenue within the next twelve months. |
SEGMENTS
SEGMENTS | 9 Months Ended |
Oct. 31, 2022 | |
Segments [Abstract] | |
SEGMENTS | Note 11 – Segments The Company’s reportable segments are business units that offer products through different channels of distribution. The Company has two reportable segments: wholesale operations and retail operations. The wholesale operations segment includes sales of products under the Company’s owned, licensed and private label brands, as well as sales related to the Vilebrequin and Karl Lagerfeld businesses, other than sales of the Karl Lagerfeld Paris brand from retail stores and digital outlets. Wholesale revenues also include revenues from license agreements related to our owned trademarks including DKNY, Donna Karan, Vilebrequin, Karl Lagerfeld, G.H. Bass, Andrew Marc and Sonia Rykiel. The retail operations segment consists primarily of direct sales to consumers through Company-operated stores, which consists primarily of DKNY and Karl Lagerfeld Paris stores, as well as the digital channels for DKNY, Donna Karan, Karl Lagerfeld Paris, G.H. Bass, Andrew Marc and Wilsons Leather. Substantially all DKNY and Karl Lagerfeld Paris stores are operated as outlet stores. The following segment information is presented for the three and nine month periods indicated below: Three Months Ended October 31, 2022 Wholesale Retail Elimination (1) Total (In thousands) Net sales $ 1,069,574 $ 28,762 $ (20,037) $ 1,078,299 Cost of goods sold 740,734 12,975 (20,037) 733,672 Gross profit 328,840 15,787 — 344,627 Selling, general and administrative expenses 216,916 22,977 — 239,893 Depreciation and amortization 6,224 1,046 — 7,270 Asset impairment 250 — — 250 Operating profit (loss) $ 105,450 $ (8,236) $ — $ 97,214 Three Months Ended October 31, 2021 Wholesale Retail Elimination (1) Total (In thousands) Net sales $ 1,013,440 $ 26,164 $ (24,212) $ 1,015,392 Cost of goods sold 678,959 13,135 (24,212) 667,882 Gross profit 334,481 13,029 — 347,510 Selling, general and administrative expenses 162,357 20,003 — 182,360 Depreciation and amortization 6,089 935 — 7,024 Operating profit (loss) $ 166,035 $ (7,909) $ — $ 158,126 Nine Months Ended October 31, 2022 Wholesale Retail Elimination (1) Total (In thousands) Net sales $ 2,338,435 $ 87,758 $ (53,893) $ 2,372,300 Cost of goods sold 1,564,595 42,006 (53,893) 1,552,708 Gross profit 773,840 45,752 — 819,592 Selling, general and administrative expenses 548,411 67,940 — 616,351 Depreciation and amortization 17,304 2,717 — 20,021 Asset impairment, net of gain on lease terminations 250 (38) — 212 Operating profit (loss) $ 207,875 $ (24,867) $ — $ 183,008 Nine Months Ended October 31, 2021 Wholesale Retail Elimination (1) Total (In thousands) Net sales $ 1,991,967 $ 72,869 $ (46,453) $ 2,018,383 Cost of goods sold 1,293,086 35,893 (46,453) 1,282,526 Gross profit 698,881 36,976 — 735,857 Selling, general and administrative expenses 416,982 53,821 — 470,803 Depreciation and amortization 18,388 2,778 — 21,166 Operating profit (loss) $ 263,511 $ (19,623) $ — $ 243,888 (1) Represents intersegment sales to the Company’s retail operations segment. The total net sales by licensed and proprietary product sales for each of the Company’s reportable segments are as follows: Three Months Ended Nine Months Ended October 31, 2022 October 31, 2021 October 31, 2022 October 31, 2021 (In thousands) Licensed brands $ 669,408 $ 661,148 $ 1,403,142 $ 1,265,544 Proprietary brands 400,166 352,292 935,293 726,423 Wholesale net sales $ 1,069,574 $ 1,013,440 $ 2,338,435 $ 1,991,967 Licensed brands $ — $ — $ — $ 45 Proprietary brands 28,762 26,164 87,758 72,824 Retail net sales $ 28,762 $ 26,164 $ 87,758 $ 72,869 The total assets for each of the Company’s reportable segments, as well as assets not allocated to a segment, are as follows: October 31, 2022 October 31, 2021 January 31, 2022 (In thousands) Wholesale $ 2,257,232 $ 1,461,600 $ 2,073,834 Retail 121,632 111,875 111,517 Corporate 911,357 1,154,542 557,177 Total assets $ 3,290,221 $ 2,728,017 $ 2,742,528 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Oct. 31, 2022 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 12 – Stockholders’ Equity For the three months ended October 31, 2022, the Company issued no shares of common stock and utilized 2,366 shares of treasury stock in connection with the vesting of equity awards. For the three months ended October 31, 2021, the Company issued no shares of common stock and utilized 2,366 shares of treasury stock in connection with the vesting of equity awards. For the nine months ended October 31, 2022, the Company issued no shares of common stock and utilized 385,485 shares of treasury stock in connection with the vesting of equity awards. For the nine months ended October 31, 2021, the Company issued no shares of common stock and utilized 191,837 shares of treasury stock in connection with the vesting of equity awards. |
Canadian Customs Duty Examinati
Canadian Customs Duty Examination | 9 Months Ended |
Oct. 31, 2022 | |
Canadian Customs Duty Examination [Abstract] | |
Canadian Customs Duty Examination | Note 13 – Canadian Customs Duty Examination In October 2017, the Canada Border Service Agency (“CBSA”) issued an audit report to G-III Apparel Canada ULC (“G-III Canada”), a wholly-owned subsidiary of the Company, challenging the valuation used by G-III Canada for certain goods imported into Canada between February 1, 2014 and October 27, 2017. The CBSA requested that G-III Canada reassess its customs entries for that period and change the valuation method used to pay duties with respect to goods imported in the future. As a result of this reassessment, in March 2018, G-III Canada provided a bond to the CBSA in the amount of CAD$26.9 million ($20.9 million) representing customs duty and interest through December 31, 2017 that was claimed to be owed to the CBSA. Beginning February 1, 2018, the Company began paying duties based on the new valuation method. Cumulative amounts paid and deferred through October 31, 2022, related to the higher dutiable values, were CAD$15.8 million ($11.6 million). G-III Canada filed a Notice of Appeal with the Canadian International Trade Tribunal (the “Tribunal”) appealing the CBSA decision. A hearing on the appeal was held on December 7, 2021. On August 22, 2022, the Tribunal ruled in favor of G-III Canada and G-III Canada’s appeal has been allowed by the Tribunal. The decision was not appealed by the CBSA. As a result, The Tribunal ruling requires the CBSA to issue a CAD $1.8 million ( $1.3 million) refund, including interest and net of the design assist, for amounts paid by G-III Canada between February 1, 2014 and January 31, 2018. G-III Canada is in the process of filing adjustment requests with the CBSA for the period from February 1, 2018 to January 31, 2022 to amend declared dutiable values. These amendments are expected to result in a refund of duty and interest of approximately CAD $13.0 million ( $9.5 million) after deductions for the design assist and related interest. The bond issued by G-III Canada in March 2018 is in the process of being released back to the Company. |
Recent Adopted and Issued Accou
Recent Adopted and Issued Accounting Pronouncements | 9 Months Ended |
Oct. 31, 2022 | |
Recent Adopted and Issued Accounting Pronouncements [Abstract] | |
Recent Adopted and Issued Accounting Pronouncements | Note 14 – Recent Adopted and Issued Accounting Pronouncements Recently Adopted Accounting Guidance There was no accounting guidance adopted during the three months ended October 31, 2022. Issued Accounting Guidance Being Evaluated for Adoption In March 2020, the Financial Accounting Standards Board issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and in January 2021, issued ASU 2021-01, “Reference Rate Reform: Scope”. Both of these updates aim to ease the potential burden in accounting for reference rate reform. These updates provide optional expedients and exceptions, if certain criteria are met, for applying accounting principles generally accepted in the United States to contract modifications, hedging relationships and other transactions affected by the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). The amendments were effective upon issuance and allow companies to adopt the amendments on a prospective basis through December 31, 2022. The Company has not applied this ASU to any existing contracts in the current year. As of October 31, 2022, the Company had availability of approximately $290 million under its revolving credit facility. The interest rate under this facility is indexed to LIBOR. As such, the revolving credit facility is likely to be impacted when LIBOR quotations cease to be available. The Company is evaluating the impact that the guidance will have on its condensed consolidated financial statements and related disclosures and currently does not expect that any impact would be material. |
Recent Adopted and Issued Acc_2
Recent Adopted and Issued Accounting Pronouncements (Policies) | 9 Months Ended |
Oct. 31, 2022 | |
Recent Adopted and Issued Accounting Pronouncements [Abstract] | |
Recently Adopted Accounting Guidance | Recently Adopted Accounting Guidance There was no accounting guidance adopted during the three months ended October 31, 2022. |
Allowance for Doubtful Accoun_2
Allowance for Doubtful Accounts (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Allowance for Doubtful Accounts [Abstract] | |
Accounts Receivable and Allowance for Doubtful Accounts | The Company’s accounts receivable and allowance for doubtful accounts as of October 31, 2022, October 31, 2021 and January 31, 2022 were: October 31, 2022 Wholesale Retail Total (In thousands) Accounts receivable, gross $ 898,383 $ 1,010 $ 899,393 Allowance for doubtful accounts (18,192) (66) (18,258) Accounts receivable, net $ 880,191 $ 944 $ 881,135 October 31, 2021 Wholesale Retail Total (In thousands) Accounts receivable, gross $ 860,245 $ 1,586 $ 861,831 Allowance for doubtful accounts (17,412) (37) (17,449) Accounts receivable, net $ 842,833 $ 1,549 $ 844,382 January 31, 2022 Wholesale Retail Total (In thousands) Accounts receivable, gross $ 620,737 $ 2,166 $ 622,903 Allowance for doubtful accounts (17,307) (84) (17,391) Accounts receivable, net $ 603,430 $ 2,082 $ 605,512 |
Activity in Allowance for Credit Losses | The Company had the following activity in its allowance for credit losses: Wholesale Retail Total (In thousands) Balance as of January 31, 2022 $ (17,307) $ (84) $ (17,391) Provision for credit losses, net (935) 18 (917) Accounts written off as uncollectible 50 — 50 Balance as of October 31, 2022 $ (18,192) $ (66) $ (18,258) Balance as of January 31, 2021 $ (17,429) $ (30) $ (17,459) Provision for credit losses, net (54) (7) (61) Accounts written off as uncollectible 71 — 71 Balance as of October 31, 2021 $ (17,412) $ (37) $ (17,449) Balance as of January 31, 2021 $ (17,429) $ (30) $ (17,459) Provision for credit losses, net (103) (54) (157) Accounts written off as uncollectible 225 — 225 Balance as of January 31, 2022 $ (17,307) $ (84) $ (17,391) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Fair Value of Financial Instruments [Abstract] | |
Schedule of carrying values and estimated fair values of debt instruments | Carrying Value Fair Value October 31, October 31, January 31, October 31, October 31, January 31, Financial Instrument Level 2022 2021 2022 2022 2021 2022 (In thousands) Secured Notes 1 $ 400,000 $ 400,000 $ 400,000 $ 379,000 $ 400,000 $ 422,020 Revolving credit facility 2 340,235 — — 340,235 — — Note issued to LVMH 3 119,415 112,613 114,255 118,173 107,983 110,123 Unsecured loans 2 10,446 8,444 8,367 10,446 8,444 8,367 Overdraft facilities 2 3,664 2,841 2,903 3,664 2,841 2,903 Foreign credit facility 2 10,416 — — 10,416 — — |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Leases [Abstract] | |
Schedule of lease assets and liabilities | Leases Classification October 31, 2022 October 31, 2021 January 31, 2022 (In thousands) Assets Operating Operating lease assets $ 216,663 $ 176,530 $ 169,595 Liabilities Current operating Current operating lease liabilities $ 50,645 $ 45,117 $ 42,763 Noncurrent operating Noncurrent operating lease liabilities 185,171 147,688 142,868 Total lease liabilities $ 235,816 $ 192,805 $ 185,631 |
Schedule of maturity of operating lease liabilities | Year Ending January 31, Amount (In thousands) 2023 $ 17,526 2024 63,708 2025 55,124 2026 44,808 2027 34,691 After 2027 75,086 Total lease payments $ 290,943 Less: Interest 55,127 Present value of lease liabilities $ 235,816 |
Karl Lagerfeld Acquisition (Tab
Karl Lagerfeld Acquisition (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule of total consideration paid for acquisition | The initial purchase price and the valuation of the prior minority ownership for the acquisition of KLH is as follows (in thousands): Cash disbursed for the acquisition of KLH $ 168,592 Plus: cash acquired 38,499 Plus: aggregate adjustments to purchase price 9,729 Initial purchase price 216,820 Plus: fair value of prior minority ownership 102,858 Total consideration $ 319,678 |
Schedule of fair values of assets acquired and liabilities | The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition: (In thousands) Cash and cash equivalents $ 38,499 Accounts receivable, net 27,331 Inventories 33,489 Prepaid income taxes 1,100 Prepaid expenses and other current assets 3,347 Property, plant and equipment, net 11,545 Operating lease assets 55,753 Goodwill 45,894 Trademarks 178,823 Customer relationships 4,294 Investments in unconsolidated affiliates 1,381 Deferred income taxes 9,183 Other long-term assets 2,237 Total assets acquired $ 412,876 Notes payable 3,606 Accounts payable 8,057 Accrued expenses 15,261 Operating lease liabilities 58,942 Income taxes payable 2,099 Other long-term liabilities 5,233 Total liabilities assumed $ 93,198 Total fair value of acquisition consideration $ 319,678 |
Schedule of identifiable intangible assets | Weighted Average Fair Value Amortization Period Trademarks $ 178,823 — Customer relationships 4,294 8 $ 183,117 — |
Schedule of pro forma consolidated results of operations | Three Months Ended October 31, Nine Months Ended October 31, 2022 2021 2022 2021 (unaudited, in thousands, except per share amounts) Net sales $ 1,078,299 $ 1,054,143 $ 2,441,024 $ 2,127,604 Net income 63,729 105,240 105,428 168,397 Earnings per share: Basic 1.33 2.17 2.20 3.48 Diluted 1.30 2.13 2.15 3.40 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Intangible Assets [Abstract] | |
Schedule of intangible assets | Intangible assets consist of: October 31, 2022 Estimated Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) Finite-lived intangible assets Licenses 14 years $ 18,414 $ (16,808) $ 1,606 Trademarks 8-12 years 2,194 (2,194) — Customer relationships 15-17 years 51,847 (21,973) 29,874 Other 5-10 years 7,444 (4,339) 3,105 Total finite-lived intangible assets $ 79,899 $ (45,314) $ 34,585 Indefinite-lived intangible assets Goodwill 303,668 Trademarks 607,526 Total indefinite-lived intangible assets 911,194 Total intangible assets, net $ 945,779 October 31, 2021 Estimated Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) Finite-lived intangible assets Licenses 14 years $ 19,481 $ (17,088) $ 2,393 Trademarks 8-12 years 2,194 (2,194) — Customer relationships 15-17 years 48,291 (19,632) 28,659 Other 5-10 years 8,526 (7,370) 1,156 Total finite-lived intangible assets $ 78,492 $ (46,284) $ 32,208 Indefinite-lived intangible assets Goodwill 265,116 Trademarks 450,252 Total indefinite-lived intangible assets 715,368 Total intangible assets, net $ 747,576 January 31, 2022 Estimated Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) Finite-lived intangible assets Licenses 14 years $ 19,334 $ (17,113) $ 2,221 Trademarks 8-12 years 2,194 (2,194) — Customer relationships 15-17 years 48,240 (20,224) 28,016 Other 5-10 years 8,534 (7,410) 1,124 Total finite-lived intangible assets $ 78,302 $ (46,941) $ 31,361 Indefinite-lived intangible assets Goodwill 262,527 Trademarks 453,329 Total indefinite-lived intangible assets 715,856 Total intangible assets, net $ 747,217 |
Schedule of estimated intangible amortization expense | The estimated amortization expense with respect to intangibles to be recorded for the next five years is as follows: Year Ending January 31, Amortization Expense (In thousands) 2023 $ 1,275 2024 3,921 2025 3,869 2026 3,811 2027 3,579 |
Schedule of changes in amounts of goodwill | Changes in the amounts of goodwill for the nine months ended October 31, 2022 and the year ended January 31, 2022 are summarized by reportable segment as follows (in thousands): Wholesale Retail Total January 31, 2021 $ 263,135 — $ 263,135 Acquisition of Sonia Rykiel 1,518 — 1,518 Currency translation (2,126) — (2,126) January 31, 2022 262,527 — 262,527 Acquisition of Karl Lagerfeld 45,894 — 45,894 Acquisition of other foreign business 3,523 — 3,523 Currency translation (8,276) — (8,276) October 31, 2022 $ 303,668 $ — $ 303,668 |
Net Income (Loss) per Common _2
Net Income (Loss) per Common Share (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Net Income (Loss) per Common Share | |
Schedule of reconciliation between basic and diluted net income per share | The following table reconciles the numerators and denominators used in the calculation of basic and diluted net income per share: Three Months Ended October 31, Nine Months Ended October 31, 2022 2021 2022 2021 (In thousands, except share and per share amounts) Net income attributable to G-III Apparel Group, Ltd. $ 61,103 $ 106,674 $ 128,056 $ 152,163 Basic net income per share: Basic common shares 47,488 48,567 47,832 48,474 Basic net income per share $ 1.29 $ 2.20 $ 2.68 $ 3.14 Diluted net income per share: Basic common shares 47,488 48,567 47,832 48,474 Dilutive restricted stock unit awards and stock options 987 891 1,034 1,025 Diluted common shares 48,475 49,458 48,866 49,499 Diluted net income per share $ 1.26 $ 2.16 $ 2.62 $ 3.07 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Notes Payable [Abstract] | |
Schedule of long-term debt | Long-term debt consists of the following: October 31, 2022 October 31, 2021 January 31, 2022 (In thousands) Secured Notes $ 400,000 $ 400,000 $ 400,000 Revolving credit facility 340,235 — — LVMH Note 125,000 125,000 125,000 Unsecured loans 10,446 8,444 8,367 Overdraft facilities 3,664 2,841 2,903 Foreign credit facility 10,416 — — Subtotal 889,761 536,285 536,270 Less: Net debt issuance costs (1) (4,671) (6,369) (5,944) Debt discount (5,585) (12,387) (10,745) Current portion of long-term debt (91,613) (4,063) (4,237) Total $ 787,892 $ 513,466 $ 515,344 (1) Does not include debt issuance costs, net of amortization, totaling $4.4 million, $6.0 million and $5.6 million as of October 31, 2022, October 31, 2021 and January 31, 2022, respectively, related to the revolving credit facility. These debt issuance costs have been deferred and are classified in assets in the accompanying condensed consolidated balance sheets in accordance with ASC 835. |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Segments [Abstract] | |
Schedule of information regarding reportable segments | The following segment information is presented for the three and nine month periods indicated below: Three Months Ended October 31, 2022 Wholesale Retail Elimination (1) Total (In thousands) Net sales $ 1,069,574 $ 28,762 $ (20,037) $ 1,078,299 Cost of goods sold 740,734 12,975 (20,037) 733,672 Gross profit 328,840 15,787 — 344,627 Selling, general and administrative expenses 216,916 22,977 — 239,893 Depreciation and amortization 6,224 1,046 — 7,270 Asset impairment 250 — — 250 Operating profit (loss) $ 105,450 $ (8,236) $ — $ 97,214 Three Months Ended October 31, 2021 Wholesale Retail Elimination (1) Total (In thousands) Net sales $ 1,013,440 $ 26,164 $ (24,212) $ 1,015,392 Cost of goods sold 678,959 13,135 (24,212) 667,882 Gross profit 334,481 13,029 — 347,510 Selling, general and administrative expenses 162,357 20,003 — 182,360 Depreciation and amortization 6,089 935 — 7,024 Operating profit (loss) $ 166,035 $ (7,909) $ — $ 158,126 Nine Months Ended October 31, 2022 Wholesale Retail Elimination (1) Total (In thousands) Net sales $ 2,338,435 $ 87,758 $ (53,893) $ 2,372,300 Cost of goods sold 1,564,595 42,006 (53,893) 1,552,708 Gross profit 773,840 45,752 — 819,592 Selling, general and administrative expenses 548,411 67,940 — 616,351 Depreciation and amortization 17,304 2,717 — 20,021 Asset impairment, net of gain on lease terminations 250 (38) — 212 Operating profit (loss) $ 207,875 $ (24,867) $ — $ 183,008 Nine Months Ended October 31, 2021 Wholesale Retail Elimination (1) Total (In thousands) Net sales $ 1,991,967 $ 72,869 $ (46,453) $ 2,018,383 Cost of goods sold 1,293,086 35,893 (46,453) 1,282,526 Gross profit 698,881 36,976 — 735,857 Selling, general and administrative expenses 416,982 53,821 — 470,803 Depreciation and amortization 18,388 2,778 — 21,166 Operating profit (loss) $ 263,511 $ (19,623) $ — $ 243,888 (1) Represents intersegment sales to the Company’s retail operations segment. |
Schedule of total net sales for each reportable segments | The total net sales by licensed and proprietary product sales for each of the Company’s reportable segments are as follows: Three Months Ended Nine Months Ended October 31, 2022 October 31, 2021 October 31, 2022 October 31, 2021 (In thousands) Licensed brands $ 669,408 $ 661,148 $ 1,403,142 $ 1,265,544 Proprietary brands 400,166 352,292 935,293 726,423 Wholesale net sales $ 1,069,574 $ 1,013,440 $ 2,338,435 $ 1,991,967 Licensed brands $ — $ — $ — $ 45 Proprietary brands 28,762 26,164 87,758 72,824 Retail net sales $ 28,762 $ 26,164 $ 87,758 $ 72,869 |
Schedule of total net sales and long-lived assets by geographic region | The total assets for each of the Company’s reportable segments, as well as assets not allocated to a segment, are as follows: October 31, 2022 October 31, 2021 January 31, 2022 (In thousands) Wholesale $ 2,257,232 $ 1,461,600 $ 2,073,834 Retail 121,632 111,875 111,517 Corporate 911,357 1,154,542 557,177 Total assets $ 3,290,221 $ 2,728,017 $ 2,742,528 |
Basis of Presentation - Textual
Basis of Presentation - Textuals (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Jul. 31, 2022 | May 31, 2022 | May 30, 2022 | Jan. 31, 2022 | Oct. 31, 2021 | Jul. 31, 2021 | Jan. 31, 2021 |
Schedule of Equity Method Investments [Line Items] | ||||||||
Cumulative effect of adoption of ASC | $ 1,622,258 | $ 1,584,001 | $ 1,519,912 | $ 1,486,239 | $ 1,380,612 | $ 1,336,241 | ||
Retained Earnings | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Cumulative effect of adoption of ASC | $ 1,245,061 | $ 1,183,958 | $ 1,117,005 | $ 1,068,575 | $ 961,901 | 916,683 | ||
Karl Lagerfeld Holding B.V. ("KLH") | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership percent | 19% | |||||||
KL North America B.V. [Member] | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership percent | 49% | 49% | ||||||
Karl Lagerfeld Holding B.V. ("KLH") | KL North America B.V. [Member] | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership percent | 51% | |||||||
Karl Lagerfeld Holding B.V. [Member] | Karl Lagerfeld Holding B.V. ("KLH") | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Remaining percentage of interest | 81% | |||||||
Karl Lagerfeld Holding B.V. [Member] | Karl Lagerfeld Holding B.V. ("KLH") | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership percent | 19% | |||||||
Remaining percentage of interest | 81% | |||||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Cumulative effect of adoption of ASC | (271) | |||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Cumulative effect of adoption of ASC | $ (271) |
Allowance for Doubtful Accoun_3
Allowance for Doubtful Accounts (Narrative) (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 31, 2022 USD ($) segment | Oct. 31, 2021 USD ($) | Jan. 31, 2022 USD ($) | |
Allowance for Doubtful Accounts [Abstract] | |||
Number of reportable segments | segment | 2 | ||
Increase in allowance for doubtful accounts | $ | $ 917 | $ 61 | $ 157 |
Allowance for Doubtful Accoun_4
Allowance for Doubtful Accounts (Accounts Receivable and Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2021 |
Segment Reporting Information [Line Items] | ||||
Accounts receivable, gross | $ 899,393 | $ 622,903 | $ 861,831 | |
Allowance for doubtful accounts | (18,258) | (17,391) | (17,449) | $ (17,459) |
Accounts receivable, net | 881,135 | 605,512 | 844,382 | |
Wholesale operations | ||||
Segment Reporting Information [Line Items] | ||||
Accounts receivable, gross | 898,383 | 620,737 | 860,245 | |
Allowance for doubtful accounts | (18,192) | (17,307) | (17,412) | (17,429) |
Accounts receivable, net | 880,191 | 603,430 | 842,833 | |
Retail | ||||
Segment Reporting Information [Line Items] | ||||
Accounts receivable, gross | 1,010 | 2,166 | 1,586 | |
Allowance for doubtful accounts | (66) | (84) | (37) | $ (30) |
Accounts receivable, net | $ 944 | $ 2,082 | $ 1,549 |
Allowance for Doubtful Accoun_5
Allowance for Doubtful Accounts (Activity in Allowance for Credit Losses) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Beginning balance | $ (17,391) | $ (17,459) | $ (17,459) |
Provision for credit losses, net | (917) | (61) | (157) |
Accounts written off as uncollectible | 50 | 71 | 225 |
Ending balance | (18,258) | (17,449) | (17,391) |
Wholesale operations | |||
Segment Reporting Information [Line Items] | |||
Beginning balance | (17,307) | (17,429) | (17,429) |
Provision for credit losses, net | (935) | (54) | (103) |
Accounts written off as uncollectible | 50 | 71 | 225 |
Ending balance | (18,192) | (17,412) | (17,307) |
Retail | |||
Segment Reporting Information [Line Items] | |||
Beginning balance | (84) | (30) | (30) |
Provision for credit losses, net | 18 | (7) | (54) |
Ending balance | $ (66) | $ (37) | $ (84) |
Inventories - Textuals (Details
Inventories - Textuals (Details) - USD ($) $ in Millions | Oct. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 |
Inventory [Line Items] | |||
Inventory held on consignment | $ 6.5 | $ 4.5 | $ 5.6 |
Prepaid Expenses and Other Current Assets | |||
Inventory [Line Items] | |||
Inventory return asset | $ 17.1 | $ 18.9 | $ 13.9 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 |
Level 2 | Secured notes | |||
Debt Instrument [Line Items] | |||
Debt instruments, carrying value | $ 400,000 | $ 400,000 | $ 400,000 |
Debt instruments, fair value | 379,000 | 422,020 | 400,000 |
Level 2 | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Debt instruments, carrying value | 340,235 | ||
Debt instruments, fair value | 340,235 | ||
Level 2 | Unsecured Loan | |||
Debt Instrument [Line Items] | |||
Debt instruments, carrying value | 10,446 | 8,367 | 8,444 |
Debt instruments, fair value | 10,446 | 8,367 | 8,444 |
Level 2 | Overdraft facilities | |||
Debt Instrument [Line Items] | |||
Debt instruments, carrying value | 3,664 | 2,903 | 2,841 |
Debt instruments, fair value | 3,664 | 2,903 | 2,841 |
Level 2 | Foreign credit facility | |||
Debt Instrument [Line Items] | |||
Debt instruments, carrying value | 10,416 | ||
Debt instruments, fair value | 10,416 | ||
Level 3 | LVMH Note | |||
Debt Instrument [Line Items] | |||
Debt instruments, carrying value | 119,415 | 114,255 | 112,613 |
Debt instruments, fair value | $ 118,173 | $ 110,123 | $ 107,983 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Textuals (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2022 | Oct. 31, 2022 | |
Level 3 | ||
Debt Instrument [Line Items] | ||
Impairment of the operating lease assets, net of tax | $ 1.5 | |
LVMH Note | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 2% | |
Debt Instrument, Face Amount | $ 125 | |
Debt discount | $ 40 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Lessee, Operating Lease, Description [Abstract] | ||||
Option to extend | true | |||
Lessee, operating lease, option to terminate | The exercise of lease renewal options is generally at the Company’s sole discretion. The exercise of lease termination options is generally by mutual agreement between the Company and the lessor. | |||
Variable lease costs and short-term lease costs including rent forgiveness | $ 6.1 | $ 2.8 | $ 16.7 | $ 6.2 |
Minimum | ||||
Lessee, Operating Lease, Description [Abstract] | ||||
Operating lease, contract term | 1 year | 1 year | ||
Renewal term | 1 year | 1 year | ||
Maximum | ||||
Lessee, Operating Lease, Description [Abstract] | ||||
Operating lease, contract term | 10 years | 10 years | ||
Renewal term | 10 years | 10 years |
Leases - Lease assets and liabi
Leases - Lease assets and liabilities (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 |
Assets and Liabilities, Lessee [Abstract] | |||
Operating lease assets | $ 216,663 | $ 169,595 | $ 176,530 |
Classification of operating lease assets | Operating lease assets | ||
Current operating lease liabilities | $ 50,645 | 42,763 | 45,117 |
Classification current operating lease liabilities | Current operating lease liabilities | ||
Noncurrent operating lease liabilities | $ 185,171 | 142,868 | 147,688 |
Classification of noncurrent operating liabilities | Noncurrent operating lease liabilities | ||
Total lease liabilities | $ 235,816 | $ 185,631 | $ 192,805 |
Leases - Lease cost (Details)
Leases - Lease cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Selling, general and administrative expenses | ||||
Lease, Cost [Abstract] | ||||
Lease costs | $ 17.1 | $ 14 | $ 46.1 | $ 41.1 |
Leases - Future minimum payment
Leases - Future minimum payments under our operating lease (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||
2023 | $ 17,526 | ||
2024 | 63,708 | ||
2025 | 55,124 | ||
2026 | 44,808 | ||
20726 | 34,691 | ||
After 2027 | 75,086 | ||
Total lease payments | 290,943 | ||
Less: Interest | 55,127 | ||
Present value of lease liabilities | $ 235,816 | $ 185,631 | $ 192,805 |
Leases - Other information (Det
Leases - Other information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Leases [Abstract] | ||
Operating lease, lease not yet commenced, description | As of October 31, 2022, there are no material leases that are legally binding but have not yet commenced. | |
Weighted average remaining lease term | 5 years 6 months | |
Weighted average discount rate | 7.70% | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 47.6 | $ 44.5 |
Right-of-use assets obtained in exchange for lease obligations | $ 96.7 | $ 24.6 |
Karl Lagerfeld Acquisition (Det
Karl Lagerfeld Acquisition (Detail) - May 31, 2022 - Karl Lagerfeld Holding B.V. [Member] $ in Thousands, € in Millions | EUR (€) | USD ($) |
Business Acquisition [Line Items] | ||
Initial Purchase Price | $ 216,820 | |
Plus: fair value of prior minority ownership | 102,858 | |
Total consideration | $ 319,678 | |
Total consideration | € | € 202 |
Karl Lagerfeld Acquisition (Fai
Karl Lagerfeld Acquisition (Fair Value of Assets Acquired) (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | May 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2021 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 303,668 | $ 262,527 | $ 265,116 | $ 263,135 | |
Karl Lagerfeld Holding B.V. [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 38,499 | ||||
Accounts receivable | 27,331 | ||||
Inventories | 33,489 | ||||
Prepaid income taxes | 1,100 | ||||
Prepaid expenses & other current assets | 3,347 | ||||
Property, plant and equipment | 11,545 | ||||
Operating lease assets | 55,753 | ||||
Goodwill | $ 45,900 | 45,894 | |||
Investments in unconsolidated affiliates | 1,381 | ||||
Deferred income taxes | 9,183 | ||||
Other long-term assets | 2,237 | ||||
Total assets acquired | 412,876 | ||||
Notes payable | 3,606 | ||||
Accounts payable | 8,057 | ||||
Accrued Expense | 15,261 | ||||
Operating lease liabilities | 58,942 | ||||
Income taxes payable | 2,099 | ||||
Other long-term liabilities | 5,233 | ||||
Total liabilities assumed | 93,198 | ||||
Total fair value of acquisition consideration | 319,678 | ||||
Karl Lagerfeld Holding B.V. [Member] | Trade Names [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 178,823 | ||||
Karl Lagerfeld Holding B.V. [Member] | Customer Relationships | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 4,294 |
Karl Lagerfeld Acquisition (Cas
Karl Lagerfeld Acquisition (Cash Purchase Price of Acquisition) (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2022 | Oct. 31, 2022 | |
Minus cash acquired and non-cash consideration | ||
Cash disbursed for the acquisition of KLH | $ 168,592 | |
Karl Lagerfeld Holding B.V. [Member] | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 168,592 | |
Minus cash acquired and non-cash consideration | ||
Cash acquired | 38,499 | |
Plus: aggregate adjustments to purchase price | $ 9,729 |
Karl Lagerfeld Acquisition (Int
Karl Lagerfeld Acquisition (Intangible Assets Acquired) (Details) - Karl Lagerfeld Holding B.V. [Member] $ in Thousands | 9 Months Ended |
Oct. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | |
Fair value | $ 183,117 |
Weighted average amortization period | 0 years |
Transaction cost | $ 5,400 |
Modified period | 1 year |
Trade Names [Member] | |
Business Acquisition [Line Items] | |
Fair value | $ 178,823 |
Weighted average amortization period | 0 years |
Customer Relationships | |
Business Acquisition [Line Items] | |
Fair value | $ 4,294 |
Weighted average amortization period | 8 years |
Karl Lagerfeld Acquisition (Pro
Karl Lagerfeld Acquisition (Pro Forma) (Details) - Karl Lagerfeld Holding B.V. [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Net sales | $ 1,078,299 | $ 1,054,143 | $ 2,441,024 | $ 2,127,604 |
Net income | $ 63,729 | $ 105,240 | $ 105,428 | $ 168,397 |
Basic | $ 1.33 | $ 2.17 | $ 2.20 | $ 3.48 |
Diluted | $ 1.30 | $ 2.13 | $ 2.15 | $ 3.40 |
Karl Lagerfeld Acquisition - Te
Karl Lagerfeld Acquisition - Textual (Detail) $ in Thousands, € in Millions | 3 Months Ended | 9 Months Ended | |||||||
May 31, 2022 USD ($) | May 31, 2022 EUR (€) | Feb. 01, 2021 USD ($) | Oct. 31, 2022 USD ($) | Oct. 31, 2022 USD ($) | May 30, 2022 | Jan. 31, 2022 USD ($) | Oct. 31, 2021 USD ($) | Jan. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |||||||||
Investments in unconsolidated affiliates | $ 25,870 | $ 25,870 | $ 65,503 | $ 61,413 | |||||
Recorded gain | 30,925 | ||||||||
Goodwill | $ 303,668 | $ 303,668 | $ 262,527 | $ 265,116 | $ 263,135 | ||||
Karl Lagerfeld Holding B.V. ("KLH") | |||||||||
Business Acquisition [Line Items] | |||||||||
Ownership percent | 19% | ||||||||
KL North America B.V. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Ownership percent | 49% | 49% | 49% | ||||||
Pro Forma [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Recorded gain | $ 30,900 | ||||||||
Karl Lagerfeld Holding B.V. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Initial Purchase Price | $ 216,820 | ||||||||
Business combination, consideration transferred | € | € 202 | ||||||||
Recorded gain | 30,900 | ||||||||
Net sales since acquisition | $ 51,900 | $ 69,200 | |||||||
Operating income since acquisition | 4,000 | 5,100 | |||||||
Adjustment to assets in acquisition | 2,800 | ||||||||
Adjustment to liabilities in acquisition | 2,800 | ||||||||
Goodwill | $ 45,894 | $ 45,900 | $ 45,900 | ||||||
Estimated Life | 15 years | ||||||||
Karl Lagerfeld Holding B.V. [Member] | Karl Lagerfeld Holding B.V. ("KLH") | |||||||||
Business Acquisition [Line Items] | |||||||||
Remaining percentage of interest | 81% | ||||||||
Ownership percent | 19% | ||||||||
Karl Lagerfeld Holding B.V. [Member] | Karl Lagerfeld Holding B.V. ("KLH") | |||||||||
Business Acquisition [Line Items] | |||||||||
Remaining percentage of interest | 81% |
INTANGIBLE ASSETS - Intangible
INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2022 | Jan. 31, 2021 | |
Goodwill And Intangible Assets [Line Items] | ||||
Subtotal | $ 79,899 | $ 78,492 | $ 78,302 | |
Accumulated amortization | (45,314) | (46,284) | (46,941) | |
Total finite-lived intangible assets | 34,585 | 32,208 | 31,361 | |
Indefinite-lived intangible assets | ||||
Goodwill | 303,668 | 265,116 | 262,527 | $ 263,135 |
Trademarks | 607,526 | 450,252 | 453,329 | |
Total indefinite-lived intangible assets | 911,194 | 715,368 | 715,856 | |
Total intangible assets, net | 945,779 | 747,576 | 747,217 | |
Trademarks | ||||
Indefinite-lived intangible assets | ||||
Trademarks | 607,526 | 450,252 | 453,329 | |
License Agreements | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Subtotal | 18,414 | 19,481 | 19,334 | |
Accumulated amortization | (16,808) | (17,088) | (17,113) | |
Total finite-lived intangible assets | $ 1,606 | $ 2,393 | $ 2,221 | |
Indefinite-lived intangible assets | ||||
Estimated Life | 14 years | 14 years | 14 years | |
Trademarks | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Subtotal | $ 2,194 | $ 2,194 | $ 2,194 | |
Accumulated amortization | $ (2,194) | $ (2,194) | $ (2,194) | |
Trademarks | Minimum | ||||
Indefinite-lived intangible assets | ||||
Estimated Life | 8 years | 8 years | 8 years | |
Trademarks | Maximum | ||||
Indefinite-lived intangible assets | ||||
Estimated Life | 12 years | 12 years | 12 years | |
Customer Relationships | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Subtotal | $ 51,847 | $ 48,291 | $ 48,240 | |
Accumulated amortization | (21,973) | (19,632) | (20,224) | |
Total finite-lived intangible assets | $ 29,874 | $ 28,659 | $ 28,016 | |
Customer Relationships | Minimum | ||||
Indefinite-lived intangible assets | ||||
Estimated Life | 15 years | 15 years | 15 years | |
Customer Relationships | Maximum | ||||
Indefinite-lived intangible assets | ||||
Estimated Life | 17 years | 17 years | 17 years | |
Other | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Subtotal | $ 7,444 | $ 8,526 | $ 8,534 | |
Accumulated amortization | (4,339) | (7,370) | (7,410) | |
Total finite-lived intangible assets | $ 3,105 | $ 1,156 | $ 1,124 | |
Other | Minimum | ||||
Indefinite-lived intangible assets | ||||
Estimated Life | 5 years | 5 years | 5 years | |
Other | Maximum | ||||
Indefinite-lived intangible assets | ||||
Estimated Life | 10 years | 10 years | 10 years |
INTANGIBLE ASSETS - Estimated a
INTANGIBLE ASSETS - Estimated amortization expense (Details) $ in Thousands | Oct. 31, 2022 USD ($) |
Intangible Assets [Abstract] | |
2023 | $ 1,275 |
2024 | 3,921 |
2025 | 3,869 |
2026 | 3,811 |
2027 | $ 3,579 |
INTANGIBLE ASSETS - Change in G
INTANGIBLE ASSETS - Change in Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 31, 2022 | Jan. 31, 2022 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | $ 262,527 | $ 263,135 |
Acquisition | 1,518 | |
Currency translation | (8,276) | (2,126) |
Goodwill, Ending Balance | 303,668 | 262,527 |
Karl Lagerfeld Holding B.V. [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 45,894 | |
Goodwill, Ending Balance | 45,900 | |
Foreign Hospitality Business [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 3,523 | |
Wholesale operations | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | 262,527 | 263,135 |
Acquisition | 1,518 | |
Currency translation | (8,276) | (2,126) |
Goodwill, Ending Balance | 303,668 | $ 262,527 |
Wholesale operations | Karl Lagerfeld Holding B.V. [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 45,894 | |
Wholesale operations | Foreign Hospitality Business [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | $ 3,523 |
INTANGIBLE ASSETS - Textuals (D
INTANGIBLE ASSETS - Textuals (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2022 | Jan. 31, 2021 | |
Business Acquisition [Line Items] | ||||||
Intangible assets amortization expense | $ 1,000 | $ 900 | $ 2,700 | $ 2,800 | $ 3,700 | |
Goodwill | $ 303,668 | $ 265,116 | $ 303,668 | $ 265,116 | 262,527 | $ 263,135 |
Reduction in goodwill related to unrecorded indemnification obligations from LVMH | 1,518 | |||||
Impairment of intangible assets | $ 0 |
Net Income per Common Share - R
Net Income per Common Share - Reconciliation between basic and diluted net income per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Net Income (Loss) per Common Share | ||||
Net income attributable to G-III Apparel Group, Ltd. | $ 61,103 | $ 106,674 | $ 128,056 | $ 152,163 |
Basic net income (loss) per share: | ||||
Basic common shares | 47,488 | 48,567 | 47,832 | 48,474 |
Basic net income (loss) per share (in dollars per share) | $ 1.29 | $ 2.20 | $ 2.68 | $ 3.14 |
Diluted net income (loss) per share: | ||||
Basic common shares | 47,488 | 48,567 | 47,832 | 48,474 |
Diluted restricted stock awards and stock options | 987 | 891 | 1,034 | 1,025 |
Diluted common shares | 48,475 | 49,458 | 48,866 | 49,499 |
Diluted net income (loss) per share (in dollars per share) | $ 1.26 | $ 2.16 | $ 2.62 | $ 3.07 |
Net Income per Common Share - T
Net Income per Common Share - Textuals (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Net Income (Loss) per Common Share | ||||
Common stock excluded from the diluted net income per share calculation | 310,600 | 68,800 | 258,600 | 18,300 |
NOTES PAYABLE - Long-term debt
NOTES PAYABLE - Long-term debt (Details) $ in Thousands, € in Millions | Oct. 31, 2022 USD ($) | Oct. 31, 2022 EUR (€) | Jan. 31, 2022 USD ($) | Oct. 31, 2021 USD ($) |
Debt Instrument [Line Items] | ||||
Total | $ 787,892 | $ 515,344 | $ 513,466 | |
Long-term Debt | ||||
Debt Instrument [Line Items] | ||||
Subtotal | 889,761 | 536,270 | 536,285 | |
Less: Net debt issuance costs | (4,671) | (5,944) | (6,369) | |
Debt discount | (5,585) | (10,745) | (12,387) | |
Current portion of long-term debt | (91,613) | (4,237) | (4,063) | |
Secured notes | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | 8,500 | |||
Secured notes | Long-term Debt | ||||
Debt Instrument [Line Items] | ||||
Subtotal | 400,000 | 400,000 | 400,000 | |
Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | 4,400 | 5,600 | 6,000 | |
Revolving credit facility | Long-term Debt | ||||
Debt Instrument [Line Items] | ||||
Subtotal | 340,235 | |||
LVMH Note | ||||
Debt Instrument [Line Items] | ||||
Debt discount | (40,000) | |||
LVMH Note | Long-term Debt | ||||
Debt Instrument [Line Items] | ||||
Subtotal | 125,000 | 125,000 | 125,000 | |
Unsecured Loan | ||||
Debt Instrument [Line Items] | ||||
Total | 10,400 | € 10.7 | ||
Unsecured Loan | Long-term Debt | ||||
Debt Instrument [Line Items] | ||||
Subtotal | 10,446 | 8,367 | 8,444 | |
Overdraft facilities | Long-term Debt | ||||
Debt Instrument [Line Items] | ||||
Subtotal | 3,664 | $ 2,903 | $ 2,841 | |
Foreign credit facility | Long-term Debt | ||||
Debt Instrument [Line Items] | ||||
Subtotal | $ 10,416 |
NOTES PAYABLE - Textuals (Detai
NOTES PAYABLE - Textuals (Details) $ in Thousands, € in Millions, SFr in Millions | 1 Months Ended | 9 Months Ended | 27 Months Ended | ||||||
Aug. 06, 2020 USD ($) | Aug. 31, 2020 USD ($) | Oct. 31, 2022 EUR (€) | Oct. 31, 2022 USD ($) | Oct. 31, 2022 EUR (€) | Oct. 31, 2022 CHF (SFr) | Jan. 31, 2022 USD ($) | Oct. 31, 2021 USD ($) | Aug. 07, 2020 USD ($) | |
Debt Instrument [Line Items] | |||||||||
Outstanding amount | $ 787,892 | $ 515,344 | $ 513,466 | ||||||
Unamortized debt issuance costs | $ 3,300 | ||||||||
Interest expense | $ 400 | ||||||||
Term Loan [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Prepayment of principal amount | $ 300,000 | ||||||||
Long-term Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instruments, carrying value | 889,761 | 536,270 | 536,285 | ||||||
Debt discount | $ 5,585 | 10,745 | 12,387 | ||||||
Secured notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate terms | The Notes bear interest at a rate of 7.875% per year payable semi-annually in arrears on February 15 and August 15 of each year. | ||||||||
Debt instrument interest rate | 7.875% | 7.875% | 7.875% | 7.875% | |||||
Frequency of periodic payment | semi-annually | ||||||||
Principal amount of debt | $ 400,000 | ||||||||
Debt issuance costs | $ 8,500 | ||||||||
Secured notes | If Company experiences a Change of Control [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption percentage | 101% | ||||||||
Secured notes | Long-term Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instruments, carrying value | $ 400,000 | 400,000 | 400,000 | ||||||
Revolving credit facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issuance costs | 4,400 | 5,600 | 6,000 | ||||||
Revolving credit facility | Long-term Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instruments, carrying value | $ 340,235 | ||||||||
LVMH Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument interest rate | 2% | 2% | 2% | ||||||
Principal amount of debt | $ 125,000 | ||||||||
Debt discount | 40,000 | ||||||||
LVMH Note | Notes Payable Due On June 1 2023 | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of debt | 75,000 | ||||||||
Maturity date | Jun. 01, 2023 | ||||||||
LVMH Note | Notes Payable due on December 1, 2023 | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of debt | 50,000 | ||||||||
Maturity date | Dec. 01, 2023 | ||||||||
LVMH Note | Long-term Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instruments, carrying value | 125,000 | 125,000 | 125,000 | ||||||
Unsecured Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding amount | 10,400 | € 10.7 | |||||||
Installment payments | € | € 0.4 | ||||||||
Unsecured Loan | Long-term Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instruments, carrying value | $ 10,446 | $ 8,367 | $ 8,444 | ||||||
Overdraft facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of debt | € 5 | SFr 4.7 | |||||||
Fixed rate | 1.75% | 1.75% | 1.75% | ||||||
Debt facility amount | $ 3,700 | € 3.7 | |||||||
Standby Letters of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Borrowings outstanding | 3,400 | ||||||||
Foreign credit facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing amount | € | 15 | ||||||||
Borrowings outstanding | 10,400 | € 10.6 | |||||||
Foreign credit facility | Euro Interbank Offered Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 1.70% | ||||||||
Trade | |||||||||
Debt Instrument [Line Items] | |||||||||
Borrowings outstanding | $ 6,500 | ||||||||
Minimum | Unsecured Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Fixed rate | 0% | 0% | 0% | ||||||
Minimum | Overdraft facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable interest rate | 0% | 0% | 0% | ||||||
Maximum | Unsecured Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Fixed rate | 5% | 5% | 5% | ||||||
Maximum | Overdraft facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable interest rate | 0.50% | 0.50% | 0.50% |
NOTES PAYABLE - Second Amended
NOTES PAYABLE - Second Amended and Restated ABL Credit Agreement (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Aug. 07, 2020 | Oct. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 | |
Debt Instrument [Line Items] | ||||
Outstanding amount | $ 787,892 | $ 515,344 | $ 513,466 | |
Second amended and restated credit agreement | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 4.91% | |||
Outstanding amount | $ 340,200 | |||
Second amended and restated credit agreement | Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument commitment fee percentage | 0.50% | |||
Second amended and restated credit agreement | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument commitment fee percentage | 0.35% | |||
Senior secured credit facility | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 8,000 | |||
Senior secured credit facility | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Spread interest rate | 1% | |||
Senior secured credit facility | Federal funds rate | ||||
Debt Instrument [Line Items] | ||||
Spread interest rate | 0.50% | |||
Senior secured credit facility | Second amended and restated credit agreement | ||||
Debt Instrument [Line Items] | ||||
Term of credit agreement | 5 years | |||
Senior secured credit facility | $ 650,000 | |||
Fixed charge coverage ratio | 1% | |||
Credit covenant compliance | As of October 31, 2022, the Company was in compliance with these covenants. | |||
Debt issuance costs | $ 5,100 | |||
Senior secured credit facility | Second amended and restated credit agreement | Base rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Spread interest rate | 1.25% | |||
Senior secured credit facility | Second amended and restated credit agreement | Base rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Spread interest rate | 0.75% | |||
Senior secured credit facility | Second amended and restated credit agreement | LIBOR plus | Maximum | ||||
Debt Instrument [Line Items] | ||||
Spread interest rate | 2.25% | |||
Senior secured credit facility | Second amended and restated credit agreement | LIBOR plus | Minimum | ||||
Debt Instrument [Line Items] | ||||
Spread interest rate | 1.75% | |||
Term Loan | Senior secured credit facility | Second amended and restated credit agreement | ||||
Debt Instrument [Line Items] | ||||
Senior secured credit facility | $ 650,000 |
Revenue Recognition - Textuals
Revenue Recognition - Textuals (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2022 | |
Revenue Recognition [Abstract] | |||
Contract liability | $ 3,300 | $ 3,800 | $ 5,100 |
Customer refund liabilities | (99,528) | (81,271) | (86,788) |
Revenue recognized related to contract liabilities | 2,700 | 3,200 | |
Contract assets | $ 0 | $ 0 | $ 0 |
SEGMENTS - Information Regardin
SEGMENTS - Information Regarding Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 1,078,299 | $ 1,015,392 | $ 2,372,300 | $ 2,018,383 |
Cost of goods sold | 733,672 | 667,882 | 1,552,708 | 1,282,526 |
Gross profit | 344,627 | 347,510 | 819,592 | 735,857 |
Selling, general and administrative expenses | 239,893 | 182,360 | 616,351 | 470,803 |
Depreciation and amortization | 7,270 | 7,024 | 20,021 | 21,166 |
Asset impairments, net of gain on lease terminations | 250 | 212 | ||
Operating profit (loss) | 97,214 | 158,126 | 183,008 | 243,888 |
Wholesale operations | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,069,574 | 1,013,440 | 2,338,435 | 1,991,967 |
Retail | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 28,762 | 26,164 | 87,758 | 72,869 |
Operating Segments | Wholesale operations | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,069,574 | 1,013,440 | 2,338,435 | 1,991,967 |
Cost of goods sold | 740,734 | 678,959 | 1,564,595 | 1,293,086 |
Gross profit | 328,840 | 334,481 | 773,840 | 698,881 |
Selling, general and administrative expenses | 216,916 | 162,357 | 548,411 | 416,982 |
Depreciation and amortization | 6,224 | 6,089 | 17,304 | 18,388 |
Asset impairments, net of gain on lease terminations | 250 | 250 | ||
Operating profit (loss) | 105,450 | 166,035 | 207,875 | 263,511 |
Operating Segments | Retail | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 28,762 | 26,164 | 87,758 | 72,869 |
Cost of goods sold | 12,975 | 13,135 | 42,006 | 35,893 |
Gross profit | 15,787 | 13,029 | 45,752 | 36,976 |
Selling, general and administrative expenses | 22,977 | 20,003 | 67,940 | 53,821 |
Depreciation and amortization | 1,046 | 935 | 2,717 | 2,778 |
Asset impairments, net of gain on lease terminations | (38) | |||
Operating profit (loss) | (8,236) | (7,909) | (24,867) | (19,623) |
Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (20,037) | (24,212) | (53,893) | (46,453) |
Cost of goods sold | $ (20,037) | $ (24,212) | $ (53,893) | $ (46,453) |
SEGMENTS - Schedule of Total Ne
SEGMENTS - Schedule of Total Net Sales by Licensed and Proprietary Product Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 1,078,299 | $ 1,015,392 | $ 2,372,300 | $ 2,018,383 |
Wholesale operations | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,069,574 | 1,013,440 | 2,338,435 | 1,991,967 |
Wholesale operations | Licensed Brands [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 669,408 | 661,148 | 1,403,142 | 1,265,544 |
Wholesale operations | Proprietary Brands [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 400,166 | 352,292 | 935,293 | 726,423 |
Retail | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 28,762 | 26,164 | 87,758 | 72,869 |
Retail | Licensed Brands [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 45 | |||
Retail | Proprietary Brands [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 28,762 | 26,164 | 87,758 | 72,824 |
Operating Segments | Wholesale operations | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,069,574 | 1,013,440 | 2,338,435 | 1,991,967 |
Operating Segments | Retail | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 28,762 | 26,164 | 87,758 | 72,869 |
Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ (20,037) | $ (24,212) | $ (53,893) | $ (46,453) |
SEGMENTS - Information of Total
SEGMENTS - Information of Total Assets for Company's Reportable Segments (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 |
Segment Reporting Information [Line Items] | |||
Total assets | $ 3,290,221 | $ 2,742,528 | $ 2,728,017 |
Wholesale operations | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,257,232 | 2,073,834 | 1,461,600 |
Retail | |||
Segment Reporting Information [Line Items] | |||
Total assets | 121,632 | 111,517 | 111,875 |
Corporate Segment | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 911,357 | $ 557,177 | $ 1,154,542 |
SEGMENTS - Method of Overhead A
SEGMENTS - Method of Overhead Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Segments [Abstract] | ||||
Revenues | $ 1,078,299 | $ 1,015,392 | $ 2,372,300 | $ 2,018,383 |
STOCKHOLDERS' EQUITY - Textuals
STOCKHOLDERS' EQUITY - Textuals (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Stockholders' Equity [Abstract] | ||||
Common stock, shares issued | 0 | 0 | 0 | 0 |
Treasury stock, shares utilized of equity awards | 2,366 | 2,366 | 385,485 | 191,837 |
Aggregate purchase price | $ 16,622 |
Canadian Customs Duty Examina_2
Canadian Customs Duty Examination - Textuals (Details) $ in Millions, $ in Millions | 1 Months Ended | 9 Months Ended | 48 Months Ended | |||
Mar. 31, 2018 CAD ($) | Mar. 31, 2018 USD ($) | Oct. 31, 2022 CAD ($) | Oct. 31, 2022 USD ($) | Jan. 31, 2018 CAD ($) | Jan. 31, 2018 USD ($) | |
Canadian Customs Duty Examination [Line Items] | ||||||
Value of bond issued for prepayments of additional duties | $ 26.9 | $ 20.9 | $ (1.8) | $ (1.3) | ||
Amendment in prepayments of additional duties | $ 13 | $ 9.5 | ||||
CBSA | ||||||
Canadian Customs Duty Examination [Line Items] | ||||||
Deferred higher dutiable value | $ 15.8 | $ 11.6 |
Recent Adopted and Issued Acc_3
Recent Adopted and Issued Accounting Pronouncements (Details) $ in Millions | Oct. 31, 2021 USD ($) |
Revolving credit facility | |
Line of Credit Facility [Line Items] | |
Availability under revolving credit facility | $ 290 |