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What changed in G III APPAREL GROUP LTD /DE/'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of G III APPAREL GROUP LTD /DE/'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+446 added−438 removedSource: 10-K (2023-03-27) vs 10-K (2022-03-28)

Top changes in G III APPAREL GROUP LTD /DE/'s 2023 10-K

446 paragraphs added · 438 removed · 279 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

89 edited+60 added−45 removed67 unchanged
Biggest change(Women's dresses) ​ December 31, 2023 ​ None Karl Lagerfeld Paris (Women's and men's apparel, women's handbags, women's and men's footwear and luggage) ​ December 31, 2026 ​ December 31, 2031 Kenneth Cole NY/Reaction Kenneth Cole (Men's and women's outerwear) ​ December 31, 2022 ​ December 31, 2025 Levi's (Men's and women's outerwear) ​ November 30, 2024 ​ None Tommy Hilfiger (Men's and women's outerwear) ​ December 31, 2025 ​ None Tommy Hilfiger (Luggage) ​ December 31, 2025 ​ None Tommy Hilfiger (Women's apparel) ​ December 31, 2025 ​ None Tommy Hilfiger x Leagues ​ December 31, 2024 ​ None Vince Camuto (Women's dresses) ​ December 31, 2025 ​ None Margaritaville (Men's and women's apparel) ​ December 31, 2025 ​ December 31, 2030 Team Sports Licenses ​ ​ ​ ​ Collegiate Licensing Company ​ December 31, 2022 ​ None Major League Baseball ​ December 31, 2023 ​ None National Basketball Association ​ September 30, 2025 ​ None National Football League ​ March 31, 2024 ​ None National Hockey League ​ June 30, 2022 ​ None Starter ​ December 31, 2024 ​ December 31, 2029 8 Table of Contents We have continually sought to increase our portfolio of name brands, product offerings and tiers of distribution because we believe that consumers prefer to buy brands they know and brand owners prefer to engage licensees who have a successful track record of developing brands. ​ Under our license agreements, we are generally required to achieve minimum net sales of licensed products, pay guaranteed minimum royalties, make specified royalty and advertising payments (usually based on a percentage of net sales of licensed products), and receive prior approval of the licensor as to all design and other elements of a product prior to production.
Biggest changeWe have separated these categories for presentation purposes in this chart as there are different term end dates for these categories in the amendment to the Women’s apparel license agreement. ​ We have continually sought to increase our portfolio of name brands, product offerings and tiers of distribution because we believe that consumers prefer to buy brands they know and brand owners prefer to engage licensees who have a successful track record of developing brands. ​ Under our license agreements, we are generally required to achieve minimum net sales of licensed products, pay guaranteed minimum royalties, make specified royalty and advertising payments (usually based on a percentage of net sales of licensed products), and receive prior approval of the licensor as to all design and other elements of a product prior to production.
Additionally, we license the DKNY brand in the United States and internationally for children’s clothing, children’s footwear, men’s and women’s watches, jewelry, men’s tailored clothing, men’s sportswear, men’s dress shirts, men’s underwear, men’s loungewear, men’s swimwear, men’s and women’s golfwear, men’s and women’s socks, furniture and digital clothing (skins). ​ In September 2021, we entered into a long-term global licensing agreement with Inter Parfums, Inc. for the creation, development and distribution of fragrances and fragrance-related products under the DKNY and Donna Karan brands.
Additionally, we license the DKNY brand in the United States and internationally for children’s clothing, children’s footwear, men’s and women’s watches, jewelry, men’s tailored clothing, men’s sportswear, men’s dress shirts, men’s underwear, men’s loungewear, men’s swimwear, men’s and women’s golfwear, men’s and women’s socks, and furniture. ​ In September 2021, we entered into a long-term global licensing agreement with Inter Parfums, Inc. for the creation, development and distribution of fragrances and fragrance-related products under the DKNY and Donna Karan brands.
Additionally, our experience in developing and acquiring licensed brands and proprietary labels, as well as our reputation for producing high quality, well-designed apparel, has led major customers to select us as a partner of choice for their own private label programs. ​ We currently market apparel and other products under, among others, the following licensed and proprietary brand names: ​ ​ ​ ​ ​ ​ Women's Men's Team Sports Licensed Brands ​ ​ ​ ​ Calvin Klein ​ Calvin Klein ​ National Football League Calvin Klein Jeans ​ Tommy Hilfiger ​ Major League Baseball Tommy Hilfiger ​ Karl Lagerfeld Paris ​ National Basketball Association Karl Lagerfeld Paris ​ Guess? ​ National Hockey League Guess? ​ Kenneth Cole ​ IMG Collegiate Licensing Company Kenneth Cole ​ Cole Haan ​ Starter Cole Haan ​ Levi's ​ ​ Levi's ​ Dockers ​ ​ Vince Camuto ​ Margaritaville ​ ​ Margaritaville ​ ​ ​ ​ ​ ​ ​ ​ ​ Proprietary Brands ​ ​ ​ ​ DKNY ​ DKNY ​ G-III Sports by Carl Banks Donna Karan ​ Andrew Marc ​ G-III for Her Andrew Marc ​ Marc New York ​ ​ Marc New York ​ Vilebrequin ​ ​ Vilebrequin ​ G.
Additionally, our experience in developing and acquiring licensed brands and proprietary labels, as well as our reputation for producing high quality, well-designed apparel, has led major customers to select us as a partner of choice for their own private label programs. ​ 6 Table of Contents We currently market apparel and other products under, among others, the following licensed and proprietary brand names: ​ ​ ​ ​ ​ ​ Women's Men's Team Sports Licensed Brands ​ ​ ​ ​ Calvin Klein ​ Calvin Klein ​ National Football League Calvin Klein Jeans ​ Tommy Hilfiger ​ Major League Baseball Tommy Hilfiger ​ Guess? ​ National Basketball Association Nautica* ​ Kenneth Cole ​ National Hockey League Guess? ​ Cole Haan ​ IMG Collegiate Licensing Company Kenneth Cole ​ Levi's ​ Starter Cole Haan ​ Dockers ​ ​ Levi's ​ Margaritaville ​ ​ Vince Camuto ​ ​ ​ ​ Margaritaville ​ ​ ​ ​ ​ ​ ​ ​ ​ Proprietary Brands ​ ​ ​ ​ DKNY ​ DKNY ​ G-III Sports by Carl Banks Donna Karan ​ Karl Lagerfeld ​ G-III for Her Karl Lagerfeld ​ Karl Lagerfeld Paris ​ ​ Karl Lagerfeld Paris ​ Andrew Marc ​ ​ Andrew Marc ​ Marc New York ​ ​ Marc New York ​ Vilebrequin ​ ​ Vilebrequin ​ G.
We also source and sell products to major retailers under their private retail labels. ​ Our products are sold through a cross section of leading retailers such as Macy’s, Dillard’s, Hudson’s Bay Company, including their Saks Fifth Avenue division, Nordstrom, Kohl’s, TJX Companies, Ross Stores and Burlington.
We also source and sell products to major retailers under their private retail labels. ​ Our products are sold through a cross section of leading retailers such as Macy’s, including its Bloomingdale’s division, Dillard’s, Hudson’s Bay Company, including its Saks Fifth Avenue division, Nordstrom, Kohl’s, TJX Companies, Ross Stores and Burlington.
Nackman, our Chief Financial Officer, has been with us for over 15 years and Jeffrey Goldfarb, our Executive Vice President, has been with us for almost 20 years.
Nackman, our Chief Financial Officer, has been with us for almost 20 years and Jeffrey Goldfarb, our Executive Vice President, has been with us for over 20 years.
Owning our own brands is advantageous to us for several reasons: ​ - We can realize significantly higher operating margins because we are not required to pay licensing fees on sales by us of our proprietary products and can also generate licensing revenues (which have no related cost of goods sold) for classes of products not manufactured by us. - There are no channel restrictions, permitting us to market our products internationally, and to utilize a variety of different distribution channels, including online and off-price channels. - We are able to license our proprietary brands in new categories and geographies to carefully selected licensees. - We are able to build equity in these brands to benefit the long-term interests of our stockholders. ​ ● Develop and expand our DKNY and Donna Karan businesses: We believe that DKNY and Donna Karan are two of the most iconic and recognizable power brands and that we are well positioned to unlock their potential and expand the reach of these brands.
Owning our own brands is advantageous to us for several reasons: ​ - We can realize significantly higher operating margins because we are not required to pay licensing fees on sales by us of our proprietary products and can also generate licensing revenues (which have no related cost of goods sold) for classes of products not manufactured by us. - There are no channel restrictions, permitting us to market our products internationally, and to utilize a variety of different distribution channels, including online and off-price channels. - We are able to license our proprietary brands in new categories and geographies to carefully selected licensees. - We are able to build equity in these brands to benefit the long-term interests of our stockholders. ​ ● Continue to develop and expand our DKNY business and re-position and expand the Donna Karan business: We believe that DKNY and Donna Karan are two of the most iconic and recognizable power brands and that we are well positioned to unlock their potential and expand the reach of these brands.
Inter Parfums, Inc. will become the exclusive licensee for these products effective July 1, 2022 with the initial term of the license extending through December 31, 2032. We believe the fragrance category enables our brands to connect more broadly with global consumers. ​ We intend to continue to focus on expanding licensing opportunities for the DKNY and Donna Karan brands.
Inter Parfums, Inc. became the exclusive licensee for these products effective July 1, 2022 with the initial term of the license extending through December 31, 2032. We believe the fragrance category enables our brands to connect more broadly with global consumers. ​ We intend to continue to focus on expanding licensing opportunities for the DKNY and Donna Karan brands.
Our product offerings primarily include outerwear, dresses, sportswear, swimwear, women’s suits and women’s performance wear. We also market footwear and accessories including women’s handbags, small leather goods, cold weather accessories, and luggage. ​ G-III’s licensed apparel consists of both women’s and men’s products in a broad range of categories. See “Wholesale Operations — Licensed Products” above.
Our product offerings primarily include outerwear, dresses, sportswear, swimwear, women’s suits and women’s performance wear. We also market footwear and accessories including women’s handbags, small leather goods, cold weather accessories, and luggage. ​ 12 Table of Contents G-III’s licensed apparel consists of both women’s and men’s products in a broad range of categories. See “Wholesale Operations — Licensed Products” above.
We sell to approximately 1,200 customers, ranging from national and regional chains to small specialty stores. We also distribute our products through our retail stores and through digital channels for the DKNY, Donna Karan, G.H.
We sell to approximately 1,700 customers, ranging from national and regional chains to small specialty stores. We also distribute our products through our retail stores and through digital channels for the DKNY, Donna Karan, G.H.
In an environment of rapidly changing consumer fashion trends, we benefit from a balanced mix of more than 30 licensed and proprietary brands anchored by five global power brands: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris, which have strong brand equity and long-standing consumer appeal.
In an environment of rapidly changing consumer fashion trends, we benefit from a balanced mix of more than 30 licensed and proprietary brands anchored by our global power brands: DKNY, Donna Karan, Karl Lagerfeld, Calvin Klein and Tommy Hilfiger, which have strong brand equity and long-standing consumer appeal.
For example, our fiscal year ended January 31, 2022 is referred to as “fiscal 2022.” ​ G-III Apparel Group, Ltd. is a Delaware corporation that was formed in 1989.
For example, our fiscal year ended January 31, 2023 is referred to as “fiscal 2023.” ​ G-III Apparel Group, Ltd. is a Delaware corporation that was formed in 1989.
Our experienced design personnel and our focused use of outside services enable us to incorporate current trends and consumer preferences in designing new products and styles. ​ 11 Table of Contents Our design personnel meet regularly with our sales and merchandising departments, as well as with the design and merchandising staffs of our licensors, to review market trends, sales results and the popularity of our latest products.
Our experienced design personnel and our focused use of outside services enable us to incorporate current trends and consumer preferences in designing new products and styles. ​ Our design personnel meet regularly with our sales and merchandising departments, as well as with the design and merchandising staffs of our licensors, to review market trends, sales results and the popularity of our latest products.
Besides its traditional advertising networks (print and outdoor advertising), Vilebrequin is seeking to develop new marketing channels through the use of digital media, product placement and public relations.
Besides its traditional advertising networks (print and outdoor advertising), Vilebrequin is seeking to develop new marketing channels through the use of digital media, product placement, impactful collaborations and public relations.
We choose the form of shipment (principally ship, truck or air) based upon a customer’s needs, cost and timing considerations. ​ 12 Table of Contents Vendor Code of Conduct ​ We are committed to ethical and responsible conduct in all of our operations and respect for the rights of all individuals.
We choose the form of shipment (principally ship, truck or air) based upon a customer’s needs, cost and timing considerations. ​ Vendor Code of Conduct ​ We are committed to ethical and responsible conduct in all of our operations and respect for the rights of all individuals.
Customs duties on our products presently range from duty free to 37.5%, depending upon the product, composition, construction, country of origin and country of import. A substantial majority of our product is imported into the United States and, to a lesser extent, into Canada and Europe.
Customs duties on our products presently range from duty free to 37.5%, depending upon the 16 Table of Contents product, composition, construction, country of origin and country of import. A substantial majority of our product is imported into the United States and, to a lesser extent, into Canada and Europe.
We believe that our sensitivity to the needs of retailers, coupled with the flexibility of our production capabilities and our continual monitoring of the retail market, enables us to modify designs and order specifications in a timely fashion. ​ Manufacturing and Sourcing ​ G-III’s wholesale operations and retail operations segments arrange for the production of products from independent manufacturers located primarily in Vietnam, China, Indonesia and, to a lesser extent, Jordan, India, Cambodia, Bangladesh, Egypt, Sri Lanka, and Central and South America.
We believe that our sensitivity to the needs of retailers, coupled with the flexibility of our production capabilities and our continual monitoring of the retail market, enables us to modify designs and order specifications in a timely fashion. ​ Manufacturing and Sourcing ​ G-III’s wholesale operations and retail operations segments arrange for the production of products from independent manufacturers located primarily in Vietnam, China, Indonesia and, to a lesser extent, Bangladesh, Cambodia, Jordan, Egypt and India.
We had several key hires at the company, including a new head of digital, who is building a new team to accelerate the development of our digital function.
We had several key hires at the Company, including a new head of digital, who is building a new team to accelerate the development of our digital business.
We vigorously protect our trademarks and other intellectual property rights against infringement. ​ INFORMATION ABOUT OUR EXECUTIVE OFFICERS ​ The following table sets forth certain information with respect to our executive officers. ​ ​ ​ ​ ​ ​ Name Age ​ Position Morris Goldfarb ​ 71 ​ Chairman of the Board, Chief Executive Officer and Director Sammy Aaron ​ 62 ​ Vice Chairman, President and Director Neal S.
We vigorously protect our trademarks and other intellectual property rights against infringement. ​ INFORMATION ABOUT OUR EXECUTIVE OFFICERS ​ The following table sets forth certain information with respect to our executive officers. ​ ​ ​ ​ ​ ​ Name Age ​ Position Morris Goldfarb ​ 72 ​ Chairman of the Board, Chief Executive Officer and Director Sammy Aaron ​ 63 ​ Vice Chairman, President and Director Neal S.
Taken together, we believe we have developed a strong approach and intend to continue to refine our oversight of our supply chain. ​ 14 Table of Contents ● Protect Our Environment - We continue to work towards reducing our environmental impact by enacting sustainable fashion practices.
Taken together, we believe we have developed a strong approach and intend to continue to refine our oversight of our supply chain. ​ ● Protect Our Environment – We continue to work towards reducing our environmental impact by enacting sustainable fashion practices.
We continue to focus on methods aimed at bolstering production and devising and implementing strategies to further diversify our production base and expand sourcing capabilities across the globe while leveraging best practices and strong vendor relationships. ​ Diversified business mix across customers, price points, products, and distribution channels.
We continue to focus on methods aimed at bolstering production and devising and implementing strategies to further diversify our production base and expand sourcing capabilities across the globe while leveraging best practices and strong vendor relationships. ​ ​ 7 Table of Contents Diversified business mix across customers, price points, products, and distribution channels.
We are a founding member of the groundbreaking Social Justice Center at the Fashion Institute of Technology, a premier fashion university, whose 13 Table of Contents purpose is to help establish a program that is intended to increase opportunities and accelerate social equity for BIPOC persons entering our industry for years to come.
We are a founding member of the groundbreaking Social Justice Center at the Fashion Institute of Technology (“FIT”), a premier fashion university, whose purpose is to help establish a program that is intended to increase opportunities and accelerate social equity for BIPOC persons entering our industry for years to come.
If we do not satisfy any of these requirements or otherwise fail to meet our material obligations under a license agreement, a licensor usually will have the right to terminate our license.
If we do not satisfy 9 Table of Contents any of these requirements or otherwise fail to meet our material obligations under a license agreement, a licensor usually will have the right to terminate our license.
We also inspect finished products at the factory site. ​ We generally arrange for the production of products on a purchase order basis with completed products manufactured to our design specifications.
We also inspect finished products at the factory site. ​ 13 Table of Contents We generally arrange for the production of products on a purchase order basis with completed products manufactured to our design specifications.
We also sell our products to customers in Canada, Central America, South America, Europe, the Middle East, the Far East and Australia, which, on a combined basis, accounted for approximately 14.5% of our net sales in fiscal 2022, 14.6% of our net sales in fiscal 2021 and 12.2% of our net sales in fiscal 2020. ​ Our products are sold primarily through our direct sales force along with our principal executives who are also actively involved in the sale of our products.
We also sell our products to customers in Europe, Canada, the Far East, the Middle East, Central America, South America and Australia, which, on a combined basis, accounted for approximately 19.1% of our net sales in fiscal 2023, 14.5% of our net sales in fiscal 2022 and 14.6% of our net sales in fiscal 2021. ​ Our products are sold primarily through our direct sales force along with our principal executives who are also actively involved in the sale of our products.
Prior to becoming Executive Vice President, he served as our Director of Business Development for more than five years. Jeffrey Goldfarb is the son of Morris Goldfarb. ​ 17 Table of Contents
Prior to becoming Executive Vice President, he served as our Director of Business Development for more than five years. Jeffrey Goldfarb is the son of Morris Goldfarb. ​
Wholesale revenues also include royalty revenues from license agreements related to our owned trademarks including DKNY, Donna Karan, Vilebrequin, G.H. Bass and Andrew Marc. ​ 3 Table of Contents Our retail operations segment consists of direct sales to consumers through our company-operated stores and through digital channels.
Wholesale revenues also include royalty revenues from license agreements related to our owned trademarks including DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Sonia Rykiel, G.H. Bass and Andrew Marc. ​ 3 Table of Contents Our retail operations segment consists primarily of direct sales to consumers through our company-operated stores and through digital channels.
We also sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos and have made a minority investment in an e-commerce retailer. Our strong relationships with retailers have been established through many years of personal customer service and our objective of meeting or exceeding retailer expectations.
We also sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos and have made minority investments in two e-commerce retailers. Our strong relationships with retailers have been established through many years of personal customer service and our objective of meeting or exceeding retailer expectations.
As of January 31, 2022, Vilebrequin products were distributed through select wholesale distribution, 96 company-operated stores and 79 licensed stores, located internationally and in the United States, as well as digitally on our websites. ​ Vilebrequin’s iconic designs and reputation are linked to its French Riviera heritage arising from its founding in St. Tropez over forty years ago.
As of January 31, 2023, Vilebrequin products were distributed through select wholesale distribution, 97 company-operated stores and 87 licensed stores, located internationally and in the United States, as well as digitally on our websites. ​ Vilebrequin’s iconic designs and reputation are linked to its French Riviera heritage arising from its founding in St. Tropez over forty years ago.
Our products are sold to approximately 1,200 customers, including a cross section of retailers such as Macy’s, Dillard’s, Hudson’s Bay Company, including their Saks Fifth Avenue division, Nordstrom, Kohl’s, TJX Companies, Ross Stores and Burlington, as well as membership clubs such as Costco and Sam’s Club.
Our products are sold to approximately 1,700 customers, including a cross section of retailers such as Macy’s, including its Bloomingdale’s division, Dillard’s, Hudson’s Bay Company, including its Saks Fifth Avenue division, Nordstrom, Kohl’s, TJX Companies, Ross Stores and Burlington, as well as membership clubs such as Costco and Sam’s Club.
Bass, Vilebrequin, Andrew Marc, Karl Lagerfeld Paris, Wilsons Leather and Sonia Rykiel businesses, as well as the digital channels of our retail partners such as Macy’s, Nordstrom, Amazon, Fanatics, Zalando and Zappos. ​ Sales to our ten largest customers accounted for 78.0% of our net sales in fiscal 2022, 73.3% of our net sales in fiscal 2021 and 72.4% of our net sales in fiscal 2020.
Bass, Vilebrequin, Andrew Marc, Karl Lagerfeld Paris, Wilsons Leather and Sonia Rykiel businesses, as well as the digital channels of our retail partners such as Macy’s, Nordstrom, Amazon, Fanatics, Zalando and Zappos. ​ Sales to our ten largest customers accounted for 74.2% of our net sales in fiscal 2023, 78.0% of our net sales in fiscal 2022 and 73.3% of our net sales in fiscal 2021.
G-III has a substantial portfolio of more than 30 licensed and proprietary brands, anchored by five global power brands: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. We are not only licensees, but also brand owners, and we distribute our products through multiple channels. ​ Our own proprietary brands include DKNY, Donna Karan, Vilebrequin, G.H.
G-III has a substantial portfolio of more than 30 licensed and proprietary brands, anchored by our global power brands: DKNY, Donna Karan, Karl Lagerfeld, Calvin Klein and Tommy Hilfiger. We are brand owners and licensees, and we distribute our products through multiple channels. ​ Our own proprietary brands include DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, G.H.
Our leadership team has demonstrated experience in successfully acquiring, managing, integrating and positioning new businesses having completed nine acquisitions and several joint ventures over the last 15 years, while also adding numerous new licenses and licensed products to our portfolio. ​ 7 Table of Contents Wholesale Operations ​ Licensed Products ​ The sale of licensed products is a key element of our strategy and we have continually expanded our offerings of licensed products for the past 25 years.
Our leadership team has demonstrated experience in successfully acquiring, managing, integrating and positioning new businesses having completed ten acquisitions and several joint ventures over the last 20 years, while also adding numerous new licenses and licensed products to our portfolio. ​ Wholesale Operations ​ Licensed Products ​ The sale of licensed products is a key element of our strategy and we have continually expanded our offerings of licensed products for over 25 years.
Nackman ​ 62 ​ Chief Financial Officer and Treasurer Jeffrey Goldfarb ​ 45 ​ Executive Vice President and Director ​ Morris Goldfarb is our Chairman of the Board and Chief Executive Officer, as well as one of our directors. Mr.
Nackman ​ 63 ​ Chief Financial Officer and Treasurer Jeffrey Goldfarb ​ 46 ​ Executive Vice President and Director ​ Morris Goldfarb is our Chairman of the Board and Chief Executive Officer, as well as one of our directors. Mr.
In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos and have made a minority investment in an e-commerce retailer. ​ We also distribute apparel and other products directly to consumers through our own DKNY and Karl Lagerfeld Paris retail stores, as well as through our digital channels for the DKNY, Donna Karan, Karl Lagerfeld Paris, G.H.
In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos and have made minority investments in two e-commerce retailers. ​ We also distribute apparel and other products directly to consumers through our own DKNY, Karl Lagerfeld, Karl Lagerfeld Paris and Vilebrequin retail stores, as well as through our digital channels for the DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin, G.H.
In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos and have made a minority investment in an e-commerce retailer. ​ Products — Development and Design ​ G-III designs, sources and markets women’s and men’s apparel at a wide range of retail price points.
In addition, we sell to leading pure online retail partners such as Amazon, Fanatics, Zalando and Zappos and have made minority investments in two e-commerce retailers. ​ Products — Development and Design ​ G-III designs, sources and markets women’s and men’s apparel at a wide range of retail price points.
Historically, our wholesale business has been dependent on our sales during our third and fourth fiscal quarters. Net sales during the third and fourth quarters accounted for approximately 64% of our net sales in fiscal 2022, 66% of our net sales in fiscal 2021 and 60% of our net sales in fiscal 16 Table of Contents 2020.
Historically, our wholesale business has been dependent on our sales during our third and fourth fiscal quarters. Net sales during the third and fourth quarters accounted for approximately 60% of our net sales in fiscal 2023, 64% of our net sales in fiscal 2022 and 66% of our net sales in fiscal 2021.
We are committed to making DKNY a fashion and lifestyle brand of choice. ​ ● Focusing on our five global power brands: While we sell products under more than 30 licensed and proprietary brands, five global power brands anchor our business: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris.
We are committed to making DKNY and Donna Karan fashion and lifestyle brands of choice. ​ ● Continued focus on our global power brands: While we sell products under more than 30 licensed and proprietary brands, our global power brands anchor our business: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld.
Our strategy is to seek licenses that will enable us to offer a range of products targeting different price points and different distribution channels.
We seek licenses that will enable us to offer a range of products targeting different price points and different distribution channels.
Vilebrequin products are sold in over 100 countries around the world. We believe that Vilebrequin has the potential to significantly develop its distribution network worldwide and expand its product offerings. A majority of Vilebrequin’s current revenues are derived from sales in Europe and the United States.
We believe that Vilebrequin has the potential to significantly develop its distribution network worldwide and expand its product offerings. A majority of Vilebrequin’s current revenues are derived from sales in Europe and the United States.
We also offer a wide range of products under our own proprietary brands. ​ We work with a diversified group of retail chains, such as Costco, Kohl’s, Ross Stores and Nordstrom in developing product lines that are sold under their private label programs. Our design teams collaborate with our customers to produce custom-made products for department and specialty chain stores.
We also offer a wide range of products under our own proprietary brands. ​ We work with a diversified group of retailers, such as Macy’s, Harley-Davidson, Costco, Kohl’s and Ross Stores in developing product lines that are sold under their private label programs. Our design teams collaborate with our customers to produce custom-made products for their stores.
Our success in the future will depend on our ability to design products that are accepted in the marketplace, source the manufacture of our products on a competitive basis, and continue to diversify our product portfolio and the markets we serve. ​ Segments ​ We report based on two segments: wholesale operations and retail operations. ​ Our wholesale operations segment includes sales of products to retailers under owned, licensed and private label brands, as well as sales related to the Vilebrequin business.
Our success in the future will depend on our ability to design products that are accepted in the marketplace, source the manufacture of our products on a competitive basis, and continue to diversify our product portfolio and the markets we serve. ​ Segments ​ We report based on two segments: wholesale operations and retail operations. ​ Our wholesale operations segment includes sales of products to retailers under owned, licensed and private label brands, as well as sales related to the Vilebrequin and Karl Lagerfeld businesses, other than sales of product under the Karl Lagerfeld Paris brand from our retail stores and digital outlets.
Some of our products are also sold by independent sales representatives located throughout the United States. The Canadian market is serviced by a sales and customer service team based both in the United States and in Canada. Vilebrequin products are sold through a direct sales force primarily located across Europe.
Some of our products are also sold by independent sales representatives located throughout the United States. The Canadian market is serviced by a sales and customer service team based both in the United States and in Canada.
We act as licensee of certain trademarks owned by third parties that are used in connection with our business. The principal brands that we license are summarized under the heading “Wholesale Operations – Licensed Products” above. We also use the licensed Karl Lagerfeld Paris brand in our retail operations segment.
We act as licensee of certain trademarks owned by third parties that are used in connection with our business. The principal brands that we license are summarized under the heading “Wholesale Operations – Licensed Products” above.
Our licensing program has significantly increased as a result of owning the DKNY and Donna Karan brands.
Our licensing 11 Table of Contents program has significantly increased as a result of owning the DKNY, Donna Karan and Karl Lagerfeld brands.
Bass brand in the United States and internationally for men’s, women’s and children’s footwear, children’s clothing, men’s and women’s graphic t-shirts, men’s denim, men’s underwear and loungewear, and bedding and bath products. ​ We license the Vilebrequin brand internationally for a denim line and the Andrew Marc brand in North America for men’s and boy’s tailored clothing and men’s and women’s denim. ​ 10 Table of Contents Retail Operations ​ As of January 31, 2022, our retail operations segment consisted of 60 stores operated under our DKNY and Karl Lagerfeld Paris brands, as well as digital channels for the DKNY, Donna Karan, Karl Lagerfeld Paris, G.H.
Bass brand in the United States and internationally for men’s, women’s and children’s footwear, children’s clothing, men’s denim, men’s underwear and loungewear, and bedding and bath products and the Andrew Marc brand in North America for men’s and boy’s tailored clothing and men’s and women’s denim ​ Retail Operations ​ As of January 31, 2023, our retail operations segment consisted of 59 stores operated under our DKNY and Karl Lagerfeld Paris brands, as well as digital channels for the DKNY, Donna Karan, Karl Lagerfeld Paris, G.H.
Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York, Wilsons Leather and Sonia Rykiel. We sell products under an extensive portfolio of well-known licensed brands, including Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Levi’s, Guess?, Kenneth Cole, Cole Haan, Vince Camuto and Dockers.
Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York, Wilsons Leather and Sonia Rykiel. We sell products under an extensive portfolio of well-known licensed brands, including Calvin Klein, Tommy Hilfiger, Levi’s, Guess?, Kenneth Cole, Cole Haan, Vince Camuto and Dockers. Beginning in January 2024, we will also sell products under the Nautica brand.
Sales to Macy’s, which includes sales to its Macy’s and Bloomingdale’s store chains, as well as through macys.com, accounted for an aggregate of 23.9% of our net sales in fiscal 2022, 20.9% of our 15 Table of Contents net sales in fiscal 2021 and 26.3% of our net sales in fiscal 2020.
Sales to Macy’s, which includes sales to its Macy’s and Bloomingdale’s store chains, as well as through macys.com, accounted for an aggregate of 21.6% of our net sales in fiscal 2023, 23.9% of our net sales in fiscal 2022 and 20.9% of our net sales in fiscal 2021.
In our most significant acquisition, we acquired Donna Karan International, which owns DKNY and Donna Karan, two of the world’s most iconic and recognizable power brands. In October 2021, we acquired European luxury fashion brand Sonia Rykiel.
In our most significant acquisition, we acquired Donna Karan International, which owns DKNY and Donna Karan, two of the world’s most iconic and recognizable power brands. In October 2021, we acquired European luxury fashion brand Sonia Rykiel and in May 2022, we acquired the remaining interests that we did not own in the iconic Karl Lagerfeld fashion brand.
Sales to TJX Companies accounted for an aggregate of 14.8% of our net sales in fiscal 2022, 12.9% of our net sales in fiscal 2021 and 13.2% of our net sales in fiscal 2020.
In addition, sales to TJX Companies accounted for an aggregate of 15.4% of our net sales in fiscal 2023, 14.8% of our net sales in fiscal 2022 and 12.9% of our net sales in fiscal 2021.
We believe this purchase further enables us to expand into the luxury space and that there is untapped potential for this brand. ​ Licensing of Proprietary Brands As our portfolio of propriety brands has grown, we have licensed these brands in new categories. We began licensing Andrew Marc, Vilebrequin and G.H. Bass in selected categories after acquiring these brands.
We also believe that there is untapped potential for this brand. ​ Licensing of Proprietary Brands As our portfolio of propriety brands has grown, we have licensed these brands in new categories. We began licensing Andrew Marc, Vilebrequin, Sonia Rykiel and G.H. Bass in selected categories after acquiring these brands.
Our Karl Lagerfeld Paris stores offer a range of products including sportswear, dresses, suit separates, outerwear, handbags and footwear. ​ As digital sales of apparel continue to increase, we are developing additional digital marketing initiatives on our websites and through social media.
Our Karl Lagerfeld Paris stores offer a range of products including sportswear, dresses, outerwear, handbags and footwear. ​ As digital sales of apparel continue to increase, we are developing additional digital marketing initiatives on our websites and through social media. We are investing in digital personnel, marketing, logistics, planning, distribution and other strategic opportunities to expand our digital footprint.
We are re-building the brand image through high impact ad campaigns that feature socially relevant talent. We are striving to create noteworthy marketing initiatives, collaborations and image programs to build brand awareness and bring in a new young customer. Donna Karan and DKNY will continue to support global licensees with brand campaigns and product images to tell the brand story.
We are re-building the brand image through high impact ad campaigns that feature socially relevant talent. We are striving to create noteworthy marketing initiatives, collaborations and image programs to build brand awareness and bring in a new young customer.
We have leveraged the strength of our power brands to become a supplier of choice in a diversified range of product categories. ​ ● Expanding our international business: We continue to expand our international business and enter into new markets worldwide. We believe that the international sales and profit opportunity is quite significant for our DKNY and Donna Karan businesses.
We have leveraged the strength of our power brands to become a supplier of choice in a diversified range of product categories. ​ ● Expanding our international business: We continue to expand our international business and enter into new markets worldwide.
Currently, over 50% of our leadership team and 70% of our overall workforce self-identify as women, and 47% of our overall workforce identify as Black, Indigenous and People of Color (“BIPOC”). Of our twelve Board members, there are three women and two persons of diverse backgrounds, exceeding NASDAQ requirements for board diversity.
Currently, over 40% of our leadership team and 71% of our overall workforce self-identify as women, and 48% of our overall workforce identify as Black, Indigenous and People of Color (“BIPOC”). Of our twelve Board members, there are four women and four people of diverse backgrounds, exceeding NASDAQ requirements for board 14 Table of Contents diversity.
Products developed reflect the DNA of the DKNY brand and emphasize a strong price-value relationship. We believe that DKNY is a premier fashion and lifestyle brand.
Our DKNY products are designed to provide a total wardrobe for a woman’s active, modern lifestyle. Products developed reflect the DNA of the DKNY brand and emphasize a strong price-value relationship. We believe that DKNY is a premier fashion and lifestyle brand.
We believe that we can capitalize on significant, untapped global licensing potential for these brands in a number of categories and we intend to grow royalty streams by expanding existing licenses, as well as through new categories with new licensees. ​ We license the G.H.
We believe that we can capitalize on significant, untapped global licensing potential for these brands in a number of categories and we intend to grow royalty streams by expanding existing licenses, as well as through new categories with new licensees. ​ We license the Karl Lagerfeld brand for a wide range of product categories including, but not limited to, footwear, men’s apparel, ready to wear fashions, fragrances, children’s clothing, and eyewear. ​ We license the G.H.
In fiscal 2022, we renewed our license agreement with the joint venture for Karl Lagerfeld Paris until 2026. ​ ​ ​ ​ ​ ​ ​ Date Current ​ Date Potential Renewal License Term Ends Term Ends Fashion Licenses ​ ​ ​ ​ Calvin Klein (Men's outerwear) ​ December 31, 2023 ​ None Calvin Klein (Women's outerwear) ​ December 31, 2023 ​ None Calvin Klein (Women's dresses) ​ December 31, 2023 ​ None Calvin Klein (Women's suits) ​ December 31, 2023 ​ None Calvin Klein (Women's performance wear) ​ December 31, 2023 ​ None Calvin Klein (Women's better sportswear) ​ December 31, 2023 ​ None Calvin Klein (Better luggage) ​ December 31, 2023 ​ None Calvin Klein (Women's handbags and small leather goods) ​ December 31, 2023 ​ None Calvin Klein (Men's and women's swimwear) ​ December 31, 2023 ​ None Calvin Klein Jeans (Women's jeanswear) ​ December 31, 2024 ​ None Cole Haan (Men's and women's outerwear) ​ December 31, 2023 ​ December 31, 2025 Dockers (Men's outerwear) ​ November 30, 2024 ​ None Guess/Guess?
First deliveries are expected to hit the floor in January 2024. ​ ​ ​ ​ ​ ​ ​ ​ Date Current ​ Date Potential Renewal License Term Ends Term Ends Fashion Licenses ​ ​ ​ ​ Calvin Klein (Men's outerwear) ​ December 31, 2025 ​ None Calvin Klein (Women's outerwear) ​ December 31, 2025 ​ None Calvin Klein (Women's dresses) ​ December 31, 2026 ​ None Calvin Klein (Women's suits) ​ December 31, 2026 ​ December 31, 2029 Calvin Klein (Women's performance wear) ​ December 31, 2025 ​ None Calvin Klein (Women's better sportswear) ​ December 31, 2024 ​ None Calvin Klein (Better luggage) ​ December 31, 2027 ​ None Calvin Klein (Women's handbags and small leather goods) ​ December 31, 2026 ​ None Calvin Klein (Men's and women's swimwear) ​ December 31, 2026 ​ None Calvin Klein Jeans (Women's jeanswear) ​ December 31, 2024 ​ None Cole Haan (Men's and women's outerwear) ​ December 31, 2023 ​ December 31, 2025 Dockers (Men's outerwear) ​ November 30, 2024 ​ None Guess/Guess?
We sell our products over the web through retail partners such as macys.com, nordstrom.com and dillards.com, each of which has a substantial online business.
Our digital business also includes our own web platforms at www.vilebrequin.com, www.soniarykiel.com and www.karl.com which are part of our wholesale operations segment. ​ We sell our products over the web through retail partners such as macys.com, nordstrom.com and dillards.com, each of which has a substantial online business.
We strive to create a workplace with opportunities for all. We have made progress and intend to continue to do so in the coming years. ​ Talent Acquisition, Development and Retention ​ Having the right talent in the organization is one of the most critical aspects of our business.
We have made progress and intend to continue to do so in the coming years. ​ Talent Acquisition, Development and Retention ​ Having the right talent in the organization is one of the most critical aspects of our business. This year we grew our HR team to enhance opportunities focused on hiring, developing and retaining talent.
We have registered, or applied for registration of, many of our trademarks in multiple jurisdictions for use on a variety of apparel and related other products. ​ In markets outside of the United States, our rights to some of our trademarks may not be clearly established.
Bass, Andrew Marc, Marc New York, Eliza J, Jessica Howard, Wilsons Leather, Sonia Rykiel and G-III Sports by Carl Banks. 18 Table of Contents We have registered, or applied for registration of, many of our trademarks in multiple jurisdictions for use on a variety of apparel and related other products. ​ In markets outside of the United States, our rights to some of our trademarks may not be clearly established.
DKNY products produced by us or by our various licensees are sold through department stores, specialty retailers and online retailers worldwide, as well as through company-operated retail stores, digital sites and international brand partners and distributors.
DKNY products produced by us or by our various licensees are sold through department stores, specialty retailers and online retailers worldwide, as well as through company-operated retail stores, digital sites and international brand partners and distributors. ​ We believe that the Donna Karan brand also offers significant growth potential. Donna Karan has been a small business for us to date.
In addition, our representatives regularly attend trade and fashion shows and shop at fashion forward stores in the United States, Europe and the Far East for inspiration. Our designers present their evaluation of the styles expected to be in demand in the United States. We also seek input from selected customers with respect to product design.
Our designers present their evaluation of the styles expected to be in demand in the United States. We also seek input from selected customers with respect to product design.
Bass ​ ​ ​ ​ Eliza J ​ ​ ​ ​ Jessica Howard ​ ​ ​ ​ Black Rivet ​ ​ ​ ​ Wilsons Leather ​ ​ ​ ​ ​ ​ 6 Table of Contents Long-standing relationships forged with retailers and license partners through emphasis on design, sourcing and quality control.
Bass ​ ​ ​ ​ Eliza J ​ ​ ​ ​ Jessica Howard ​ ​ ​ ​ Wilsons Leather ​ ​ ​ ​ ​ * We will market apparel for Nautica beginning in January 2024. ​ Long-standing relationships forged with retailers and license partners through emphasis on design, sourcing and quality control.
Sales outside of the United States and Canada may be managed by our salespeople located in our sales offices in Europe or Asia depending on the customer. ​ Brand name products sold by us pursuant to a license agreement are promoted by institutional and product advertisements placed by the licensor.
Sales outside of the United States and Canada may be managed by our salespeople located in our sales offices in Europe or Asia depending on the customer.
We believe this purchase further enables us to expand into the international luxury space and that there is untapped potential for this brand. ​ ● Increasing digital channel business opportunities: We are continuing to make changes to our business to address the additional challenges and opportunities created by the evolving role of the digital marketplace in the retail sector and expect to increase the sale of our products in an omni-channel environment.
Continued growth, brand development and marketing in overseas markets is critical to driving global brand recognition. ​ ● Increasing digital channel business opportunities: We are continuing to make changes to our business to address the additional challenges and opportunities created by the evolving role of the digital marketplace in the retail sector and expect to increase the sale of our products in an omni-channel environment.
Combined with ORITAIN TM ’s technology and our internal management systems, we are working to mitigate these global supply chain risks.
We routinely engage with counsel and industry organizations with respect to regulatory developments to ensure our practices and procedures are aligning with the continually developing regulatory landscape. Combined with ORITAIN TM ’s technology and our internal management systems, we are working to mitigate these global supply chain risks.
The five global power brands that serve as the anchor of our business position us to be the direct beneficiaries of this trend, whether by continuing to leverage our partnerships with the digital channel businesses operated by our licensors and major retailers to facilitate customer engagement or by building out our own digital capabilities. ​ 5 Table of Contents ● Opportunity for long-term profitability in our retail operations : Our retail operations segment consists of our DKNY and Karl Lagerfeld Paris stores, as well as the digital channels for DKNY, Donna Karan, Karl Lagerfeld Paris, G.H.
Our global power brands serve as the anchor of our business and position us to be the direct beneficiaries of this trend, whether by continuing to leverage our partnerships with the digital channel businesses operated by our licensors and major retailers to facilitate customer engagement or by building out our own digital capabilities. ​ Our Strengths ​ Broad portfolio of globally recognized brands.
Our ability to continuously evaluate and respond to changing consumer demands and tastes, across multiple market segments, distribution channels and geographic areas is critical to our success. Although our portfolio of brands is aimed at diversifying our risks in this regard, misjudging shifts in consumer preferences could have a negative effect on our business.
Although our portfolio of brands is aimed at diversifying our risks in this regard, misjudging shifts in consumer preferences could have a negative effect on our business.
We own a number of proprietary brands that we use in connection with our business and products including, among others, DKNY, Donna Karan, Vilebrequin, G.H. Bass, Andrew Marc, Marc New York, Eliza J, Jessica Howard, Wilsons Leather, Sonia Rykiel and G-III Sports by Carl Banks.
We own a number of proprietary brands that we use in connection with our business and products including, among others, DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, G.H.
Accordingly, the results of Sonia Rykiel are included in our consolidated financial statements beginning in the fourth quarter of fiscal 2022. ​ 4 Table of Contents Strategic Initiatives ​ We are focused on the following strategic initiatives, which we believe are critical to our long-term success: ​ ● Owning brands: We own a portfolio of proprietary brands including DKNY, Donna Karan, Vilebrequin, Eliza J, Jessica Howard, G.H.
We believe that the strength of the Donna Karan brand, along with our success with the DKNY brand, demonstrates the potential for our new Donna Karan products. ​ Strategic Initiatives ​ We are focused on the following strategic initiatives, which we believe are critical to our long-term success: ​ ● Owning brands: We own a portfolio of proprietary brands including DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Eliza J, Jessica Howard, G.H.
We believe that both the DKNY and Donna Karan brands have the potential for significant growth. In addition, we expect increased revenues from licensing and from sales growth across many categories of the business. ​ Our DKNY products are designed to provide a total wardrobe for a woman’s active, modern lifestyle.
We believe that both the DKNY and Donna Karan brands have the potential for significant growth. In addition, we expect increased revenues from licensing and from sales growth across many categories of the business. ​ After acquiring the brands in December 2016, we initially focused on re-positioning and re-launching the DKNY brand.
We believe that these five globally recognized power brands have potential for future growth. Our overall brand portfolio includes other complementary brands that are diversified across product categories, price points, demographics, occasions, fits and sizes, and styles and genres. Our proprietary brands include DKNY, Donna Karan, Vilebrequin, G.H.
Our overall brand portfolio includes other complementary brands that are diversified across product categories, price points, demographics, occasions, fits and sizes, and styles and genres. Our proprietary brands include DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Sonia Rykiel, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York and Wilsons Leather.
Our retail operations segment consists of our 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. ​ Recent Developments ​ Impact of COVID-19 ​ The COVID-19 pandemic has affected businesses around the world since the first quarter of fiscal 2021.
Our company-operated retail channels consist 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.
We expect to invest in digital media and storytelling for brand amplification and to establish comprehensive commercial marketing tools that will support our global wholesale and retail channels. ​ Vilebrequin’s marketing efforts have been based on continually offering new swimwear prints and expanding the range of its products to new categories such as women’s swimwear, ready-to-wear and accessories.
We believe these efforts will be the most significant moment for the brand to date and we expect them to drive awareness, interest and sales in the Karl Lagerfeld and Karl Lagerfeld Paris brands. ​ Vilebrequin’s marketing efforts have been based on continually offering new swimwear prints and expanding the range of its products to new categories such as women’s swimwear, ready-to-wear and accessories.
We believe that our well-diversified brand portfolio with power brands and complementary brands is well positioned to satisfy ongoing consumer needs and preferences.
We also license team sports oriented brands, including the National Football League, National Basketball Association, Major League Baseball, National Hockey League and over 150 U.S. colleges and universities. We believe that our well-diversified brand portfolio with power brands and complementary brands is well positioned to satisfy ongoing consumer needs and preferences.
G-III is committed to continuing its mission to help others in the community through corporate and employee donations and volunteerism. ​ As we emerge from the global pandemic, our teams are returning to the office and reestablishing the cohesion of a shared workspace and our commitment to our core CSR principles: Engage Our People, Protect Our Environment and Invest in Our Community.
G-III is committed to continuing its mission to help others in the community through corporate and employee donations and volunteerism. ​ Our work with our new consultants is expected to bring about greater change in this coming year as we continue to make progress on our core CSR principles: Engage Our People, Protect Our Environment and Invest in Our Community.
To further bolster our programs against this risk, w e engaged ORITAIN TM , a third-party that uses forensic technology to trace materials back to their fiber origins. We routinely engage with counsel and industry organizations with respect to regulatory developments to ensure our practices and procedures are aligning with the continually developing regulatory landscape.
To further bolster our programs against this risk, w e engaged ORITAIN TM , a third-party that uses forensic technology to trace materials back to their fiber origins. This traceability is essential to mitigating the risk that forced labor is used throughout the supply chain.
In working with our vendors, we tracked a 20% adoption rate which we intend to continue to grow. ​ We have continued to focus on the forced labor issues facing our industry and have reviewed our relationships in an attempt to protect against the use of forced labor in our supply chain.
This promotes standardized measurement for products and the supply chain and reduces redundancies among brands and factories performing audits of their sustainability practices. ​ We have continued to focus on the forced labor issues facing our industry and have reviewed our relationships in an attempt to protect against the use of forced labor in our supply chain.
Our need for seasonal associates was significantly reduced with the completion of the restructuring of our retail segment during the prior fiscal year. We employ both union and non-union personnel and believe that our relations with our employees are good.
We employ both union and non-union personnel and believe that our relations with our employees are good.
Sales of licensed products accounted for 67.2% of our net sales in fiscal 2022, 68.5% of our net sales in fiscal 2021 and 65.6% of our net sales in fiscal 2020. ​ Our most significant licensor is Calvin Klein with whom we have license agreements for wholesale sales in the United States and Canada.
Sales of licensed products accounted for 58.6% of our net sales in fiscal 2023, 67.2% of our net sales in fiscal 2022 and 68.5% of our net sales in fiscal 2021.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAlthough stores have re-opened, we cannot predict if stores will be forced to close again or have their operations restricted, how long store closures or new restrictions would be in effect as a result of additional outbreaks, whether additional outbreaks will affect purchases by consumers at retail stores or how large an effect additional outbreaks will have on retail sales volume. ​ Our outlet stores benefit from the ability of a mall’s other tenants and other area attractions to generate consumer traffic in the vicinity of our stores and the continuing popularity of outlet malls as shopping destinations.
Biggest changeOur outlet stores benefit from the ability of a mall’s other tenants and other area attractions to generate consumer traffic in the vicinity of our stores and the continuing popularity of outlet malls as shopping destinations.
We do not maintain insurance for the potential lost profits due to disruptions of our overseas manufacturers. Because our products are produced abroad, most significantly in Vietnam and China, political or economic instability in Vietnam, China or elsewhere could cause substantial disruption in the business of our foreign manufacturers.
We do not maintain insurance for the potential lost profits due to disruptions of our overseas manufacturers. Because our products are produced abroad, most significantly in China and Vietnam, political or economic instability in China, Vietnam or elsewhere could cause substantial disruption in the business of our foreign manufacturers.
In addition, we also incurred $125.0 million of debt pursuant to the LVMH Note that constituted a portion of the purchase price for the acquisition of DKNY and Donna Karan. ​ Our significant amount of debt and our debt service obligations could limit our ability to satisfy our obligations, limit our ability to operate our business and impair our competitive position. ​ 35 Table of Contents For example, it could: ​ ● make it more difficult for us to satisfy our obligations under the Senior Secured Notes and the ABL Credit Agreement; ● increase our vulnerability to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings are and will continue to be at variable rates of interest; ● require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures or other general corporate purposes; ● limit our flexibility in planning for, or reacting to, changes in our business and industry; ● place us at a disadvantage compared to competitors that may have proportionately less debt; ● limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements; and ● increase our cost of borrowing. ​ Despite our substantial indebtedness, we may still be able to incur significantly more debt.
In addition, we also incurred $125.0 million of debt pursuant to the LVMH Note that constituted a portion of the purchase price for the acquisition of DKNY and Donna Karan. ​ Our significant amount of debt and our debt service obligations could limit our ability to satisfy our obligations, limit our ability to operate our business and impair our competitive position. ​ For example, it could: ​ ● make it more difficult for us to satisfy our obligations under the Senior Secured Notes and the ABL Credit Agreement; ● increase our vulnerability to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings are and will continue to be at variable rates of interest; ● require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures or other general corporate purposes; ● limit our flexibility in planning for, or reacting to, changes in our business and industry; ● place us at a disadvantage compared to competitors that may have proportionately less debt; ● limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements; and ● increase our cost of borrowing. ​ 36 Table of Contents Despite our substantial indebtedness, we may still be able to incur significantly more debt.
These include: ​ ● the burdens of complying with a variety of foreign laws and regulations, including trade and labor restrictions; ● local product preferences and product requirements; ● more stringent regulation relating to privacy and data protection, including with respect to the collection, use and processing of personal information, particularly in Europe; ● more stringent regulation relating to privacy and data access to, or use of, commercial or personal information, particularly in Europe; ● less rigorous protection of intellectual property; ● compliance with United States and other country laws relating to foreign operations, including the Foreign Corrupt Practices Act, which prohibits U.S. companies from making improper payments to foreign officials for the purpose of obtaining or retaining business; ● unexpected changes in regulatory requirements; and ● new tariffs or other barriers in international markets. ​ We are also subject to general political and economic risks in connection with our international operations, including: ​ ● political instability and terrorist attacks; ● changes in diplomatic and trade relationships; and ● general and economic fluctuations in specific countries or markets. ​ Changes in regulatory, geopolitical, social or economic policies and other factors may have a material adverse effect on our international business in the future or may require us to exit a particular market or significantly modify our current business practices. ​ 29 Table of Contents The national security law adopted in Hong Kong may result in disruptions to our business operations in Hong Kong and additional tariffs and trade restrictions. ​ In June 2020, a new security law was put into effect that changes the way Hong Kong has been governed since the territory was handed over by England to China in 1997.
These include: ​ ● the burdens of complying with a variety of foreign laws and regulations, including trade and labor restrictions; ● local product preferences and product requirements; ● more stringent regulation relating to privacy and data protection, including with respect to the collection, use and processing of personal information, particularly in Europe; ● more stringent regulation relating to privacy and data access to, or use of, commercial or personal information, particularly in Europe; ● less rigorous protection of intellectual property; ● compliance with United States and other country laws relating to foreign operations, including the Foreign Corrupt Practices Act, which prohibits U.S. companies from making improper payments to foreign officials for the purpose of obtaining or retaining business; ● unexpected changes in regulatory requirements; and ● new tariffs or other barriers in international markets. ​ We are also subject to general political and economic risks in connection with our international operations, including: ​ ● political instability and terrorist attacks; ● changes in diplomatic and trade relationships; and ● general and economic fluctuations in specific countries or markets. ​ Changes in regulatory, geopolitical, social or economic policies and other factors may have a material adverse effect on our international business in the future or may require us to exit a particular market or significantly modify our current business practices. ​ The national security law adopted in Hong Kong may result in disruptions to our business operations in Hong Kong and additional tariffs and trade restrictions. ​ In June 2020, a new security law was put into effect that changes the way Hong Kong has been governed since the territory was handed over by England to China in 1997.
Risks associated with our digital business include: ​ ● the security or failure of the computer systems, including those of third-party vendors, that operate our digital sites including, among others, inadequate system capacity, computer viruses, human error, changes in 22 Table of Contents programming, security breaches or other cybersecurity concerns, system upgrades or migration of these services to new systems; ● disruptions in the Internet or telecom service or power outages; ● reliance on third parties for computer hardware and software and merchandise deliveries; ● rapid technology changes; ● the failure to deliver products to customers on-time, as ordered and without damage or to satisfy customer expectations; ● credit or debit card fraud and other payment processing issues; ● liability for online content; and ● consumer privacy concerns and regulations. ​ Problems in any of these areas could result in a reduction in sales, increased costs and damage to our reputation and brands, which could adversely affect our business and results of operations. ​ Risk Factors Relating to the Operation of Our Business ​ If we lose the services of our key personnel, or are unable to attract key personnel, our business will be harmed. ​ Our future success depends on Morris Goldfarb, our Chairman and Chief Executive Officer, and other key personnel.
Risks associated with our digital business include: ​ ● the security or failure of the computer systems, including those of third-party vendors, that operate our digital sites including, among others, inadequate system capacity, computer viruses, human error, changes in programming, security breaches or other cybersecurity concerns, system upgrades or migration of these services to new systems; ● disruptions in the Internet or telecom service or power outages; ● reliance on third parties for computer hardware and software and merchandise deliveries; ● rapid technology changes; ● the failure to deliver products to customers on-time, as ordered and without damage or to satisfy customer expectations; ● credit or debit card fraud and other payment processing issues; ● liability for online content; and ● consumer privacy concerns and regulations. ​ Problems in any of these areas could result in a reduction in sales, increased costs and damage to our reputation and brands, which could adversely affect our business and results of operations. ​ Risk Factors Relating to the Operation of Our Business ​ If we lose the services of our key personnel, or are unable to attract key personnel, our business will be harmed. ​ Our future success depends on Morris Goldfarb, our Chairman and Chief Executive Officer, and other key personnel.
The sufficiency and availability of credit may be adversely affected by a variety of factors, including, without limitation, the tightening of the credit markets, including lending by financial institutions who are sources of credit for our borrowing and liquidity; an increase in the cost of capital; the reduced availability of credit; our ability to execute our strategy; the level of our cash flows, which will be impacted by retailer and consumer acceptance of our products and the level of consumer discretionary spending; maintenance of financial covenants included in our ABL Credit Agreement, interest rate fluctuations and the adverse impact of the COVID-19 pandemic on the U.S. and world-wide economies and on our business. ​ Interest rates are expected to increase in fiscal 2023.
The sufficiency and availability of credit may be adversely affected by a variety of factors, including, without limitation, the tightening of the credit markets, including lending by financial institutions who are sources of credit for our borrowing and liquidity; an increase in the cost of capital; the reduced availability of credit; our ability to execute our strategy; the level of our cash flows, which will be impacted by retailer and consumer acceptance of our products and the level of consumer discretionary spending; maintenance of financial covenants included in our ABL Credit Agreement, interest rate fluctuations and the adverse impact of the COVID-19 pandemic on the U.S. and world-wide economies and on our business. ​ Interest rates increased in fiscal 2023 and are expected to increase in fiscal 2024.
These restrictions limit our ability, among other things, to: ​ ● incur, assume or permit to exist additional indebtedness (including guarantees thereof); ● pay dividends or certain other distributions on our capital stock or repurchase our capital stock or prepay subordinated indebtedness; ● prepay, redeem or repurchase certain debt; ● issue certain preferred stock or similar equity securities; ● incur liens on assets; ● make certain loans, investments or other restricted payments; ● allow to exist certain restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us; ● engage in transactions with affiliates; ● alter the business that we conduct; and ● sell certain assets or merge or consolidate with or into other companies. ​ 36 Table of Contents As a result of these restrictions, we may be: ​ ● limited in how we conduct our business; ● unable to raise additional debt or equity financing to operate during general economic or business downturns; or ● unable to compete effectively or to take advantage of new business opportunities. ​ A breach of the covenants under the indenture or the ABL Credit Agreement could result in an event of default under the applicable indebtedness.
These restrictions limit our ability, among other things, to: ​ ● incur, assume or permit to exist additional indebtedness (including guarantees thereof); ● pay dividends or certain other distributions on our capital stock or repurchase our capital stock or prepay subordinated indebtedness; ● prepay, redeem or repurchase certain debt; ● issue certain preferred stock or similar equity securities; ● incur liens on assets; ● make certain loans, investments or other restricted payments; ● allow to exist certain restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us; ● engage in transactions with affiliates; ● alter the business that we conduct; and ● sell certain assets or merge or consolidate with or into other companies. ​ As a result of these restrictions, we may be: ​ ● limited in how we conduct our business; ● unable to raise additional debt or equity financing to operate during general economic or business downturns; or ● unable to compete effectively or to take advantage of new business opportunities. ​ A breach of the covenants under the indenture or the ABL Credit Agreement could result in an event of default under the applicable indebtedness.
We do not, however, control these third-party service providers and cannot guarantee that no electronic or physical computer break-ins and security breaches will occur in the future. ​ Legal and Regulatory Risks ​ Tariffs that have been, and might be, imposed by the United States government or a resulting trade war could have a material adverse effect on our results of operations. ​ Legislation that would restrict the importation or increase the cost of textiles and apparel produced abroad has been periodically introduced in Congress.
We do not, however, control these third-party service providers and cannot guarantee that no electronic or physical computer break-ins and security breaches will occur in the future. ​ ​ 32 Table of Contents Legal and Regulatory Risks ​ Tariffs that have been, and might be, imposed by the United States government or a resulting trade war could have a material adverse effect on our results of operations. ​ Legislation that would restrict the importation or increase the cost of textiles and apparel produced abroad has been periodically introduced in Congress.
To the extent our, or our business partners’, security procedures and protection of customer information prove to be insufficient or inadequate, we may become subject to litigation or other claims, fines, penalties or other obligations, which could expose us to liability and cause damage to our reputation, brand and results of operations. ​ We are subject to rules relating to the processing of credit card payments.
To the extent our, or our business partners’, security procedures and protection of consumer information prove to be insufficient or inadequate, we may become subject to litigation or other claims, fines, penalties or other obligations, which could expose us to liability and cause damage to our reputation, brand and results of operations. ​ We are subject to rules relating to the processing of credit card payments.
Strategic initiatives undertaken by our customers, including developing their own private labels brands, selling national brands on an exclusive basis or reducing the number of vendors they purchase from, could also impact our sales to these customers. There is a trend among major retailers to concentrate purchasing among a narrowing group of vendors.
Strategic initiatives undertaken by our customers, including developing their own private label brands, selling national brands on an exclusive basis or reducing the number of vendors they purchase from, could also impact our sales to these customers. There is a trend among major retailers to concentrate purchasing among a narrowing group of vendors.
The mandatory prepayment obligations under the ABL Credit Agreement will be effectively senior to our obligations to make an asset sale offer with respect to the Notes under the terms of the indenture. ​ 38 Table of Contents Our credit rating and ability to access well-functioning capital markets are important to our ability to secure future debt financing on acceptable terms.
The mandatory prepayment obligations under the ABL Credit Agreement will be effectively senior to our obligations to make an asset sale offer with respect to the Notes under the terms of the indenture. ​ 39 Table of Contents Our credit rating and ability to access well-functioning capital markets are important to our ability to secure future debt financing on acceptable terms.
Failure to comply with the Standard or Card Rules could result in losing certification under the PCI standards and an inability to process payments. ​ If we do not successfully upgrade, maintain and secure our information systems to support the needs of our organization, this could have an adverse impact on the operation of our business. ​ We rely heavily on information systems to manage operations, including a full range of financial, sourcing, retail and merchandising systems, and regularly make investments to upgrade, enhance or replace these systems.
Failure to comply with the Standard or Card Rules could result in losing certification under the PCI standards and an inability to process payments. ​ 31 Table of Contents If we do not successfully upgrade, maintain and secure our information systems to support the needs of our organization, this could have an adverse impact on the operation of our business. ​ We rely heavily on information systems to manage operations, including a full range of financial, sourcing, retail and merchandising systems, and regularly make investments to upgrade, enhance or replace these systems.
In addition, while certain currencies (notably the Hong Kong dollar and Chinese Renminbi) are currently managed in value in relation to the U.S. dollar by foreign central banks or governmental entities, such conditions may change, thereby exposing us to various risks as a result. ​ Certain of our foreign operations purchase products from suppliers denominated in U.S. dollars and Euros, which may expose such operations to increases in cost of goods sold (thereby lowering profit margins) as a result of foreign currency fluctuations.
In addition, while certain currencies (notably the Hong Kong dollar and Chinese Renminbi) are currently managed in value in relation to the U.S. dollar by foreign central banks or governmental entities, such conditions may change, thereby exposing us to various risks as a result. ​ 29 Table of Contents Certain of our foreign operations purchase products from suppliers denominated in U.S. dollars and Euros, which may expose such operations to increases in cost of goods sold (thereby lowering profit margins) as a result of foreign currency fluctuations.
We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including under the Senior Secured Notes or the ABL Credit Agreement. ​ ​ 37 Table of Contents If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness.
We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including under the Senior Secured Notes or the ABL Credit Agreement. ​ If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness.
We cannot be certain that any additional required financing, whether debt or equity, will be available in amounts needed or on terms acceptable to us, if at all. ​ As of January 31, 2022, we were in compliance with the financial covenants in our credit facility.
We cannot be certain that any additional required financing, whether debt or equity, will be available in amounts needed or on terms acceptable to us, if at all. ​ As of January 31, 2023, we were in compliance with the financial covenants in our credit facility.
Additionally, during fiscal 2022, there were periodic incidents of a resurgence in the number of cases of COVID-19 and its variants in the U.S. and certain other parts of the world, which caused business disruptions for us and/or our wholesale customers, suppliers and vendors.
During fiscal 2022 and 2023, there were periodic incidents of a resurgence in the number of cases of COVID-19 and its variants in the U.S. and certain other parts of the world, which caused business disruptions for us and/or our wholesale customers, suppliers and vendors.
Our failure to protect our 25 Table of Contents trademarks could diminish the value of our brands, and could cause customer or consumer confusion, which could, in turn, adversely affect the validity of our trademarks and our business, results of operations and financial condition. ​ In the course of our attempts to expand into foreign markets, we may experience conflicts with various third parties who have acquired ownership rights in certain trademarks, which would impede our use and registration of some of our trademarks.
Our failure to protect our trademarks could diminish the value of our brands, and could cause customer or consumer confusion, which could, in turn, adversely affect the validity of our trademarks and our business, results of operations and financial condition. ​ In the course of our attempts to expand into foreign markets, we may experience conflicts with various third parties who have acquired ownership rights in certain trademarks, which would impede our use and registration of some of our trademarks.
If we are unable to protect, maintain or enforce our intellectual property rights against third parties, our business, financial condition and results of operations may be materially adversely affected. ​ Furthermore, we cannot be certain that the conduct of our business does not and will not infringe, misappropriate or otherwise conflict with the intellectual property rights of others, and our efforts to enforce our trademark and other intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our trademark and other intellectual property rights.
If we are unable to protect, maintain or enforce our 25 Table of Contents intellectual property rights against third parties, our business, financial condition and results of operations may be materially adversely affected. ​ Furthermore, we cannot be certain that the conduct of our business does not and will not infringe, misappropriate or otherwise conflict with the intellectual property rights of others, and our efforts to enforce our trademark and other intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our trademark and other intellectual property rights.
In the event our lenders or holders of the Senior Secured Notes accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. ​ Our ability to continue to have the necessary liquidity to operate our business may be adversely impacted by a number of factors, including uncertain conditions in the credit and financial markets, which could limit the availability and increase the cost of financing.
In the event our lenders or holders of the Senior Secured Notes accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. ​ 37 Table of Contents Our ability to continue to have the necessary liquidity to operate our business may be adversely impacted by a number of factors, including uncertain conditions in the credit and financial markets, which could limit the availability and increase the cost of financing.
Such conflicts are common and may arise from time to time as we pursue international expansion, such as with the international expansion of our DKNY, Donna Karan, Vilebrequin, G.H. Bass, Andrew Marc, Wilsons Leather and Sonia Rykiel businesses.
Such conflicts are common and may arise from time to time as we pursue international expansion, such as with the international expansion of our DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, G.H. Bass, Andrew Marc, Wilsons Leather and Sonia Rykiel businesses.
If any of our licensors decides to “reposition” its products under the brands we license from them, introduce similar products under similar brand names or otherwise change the parameters of design, pricing, distribution, target market or competitive set, we could experience a significant downturn in that brand’s business, adversely affecting our sales and profitability.
If any of our licensors decides to “reposition” its products under the brands we license from them, introduce similar products under similar brand names or otherwise change the parameters of design, pricing, distribution, target market or competitive set, we could experience a significant downturn in that brand’s business, adversely affecting our 20 Table of Contents sales and profitability.
A disruption in the ability of our significant customers to access liquidity could cause serious disruptions or an overall deterioration of their businesses which could lead to a significant reduction in their orders of our products and the inability or failure on their part to meet their payment obligations to us, any of which could have a material 26 Table of Contents adverse effect on our results of operations and liquidity.
A disruption in the ability of our significant customers to access liquidity could cause serious disruptions or an overall deterioration of their businesses which could lead to a significant reduction in their orders of our products and the inability or failure on their part to meet their payment obligations to us, any of which could have a material adverse effect on our results of operations and liquidity.
As a result, the ABL Credit Agreement and the indenture may prevent us from using the proceeds from such dispositions to satisfy our debt service obligations. ​ Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly. ​ The borrowings under the ABL Credit Agreement will be at variable rates of interest and expose us to interest rate risk.
As a result, the ABL Credit Agreement and the indenture may prevent us from using the proceeds from such dispositions to satisfy our debt service obligations. ​ 38 Table of Contents Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly. ​ The borrowings under the ABL Credit Agreement will be at variable rates of interest and expose us to interest rate risk.
These types of decisions by our key customers could adversely affect our business. ​ The effects of war, acts of terrorism, natural disasters or public health crises could adversely affect our business and results of operations. ​ The current war in Ukraine and the continued threat of terrorism, heightened security measures and military action in response to acts of terrorism or civil unrest has, at times, disrupted commerce and intensified concerns regarding the United States and world economies.
These types of decisions by our key customers could adversely affect our business. ​ The effects of war, including the war in Ukraine, acts of terrorism, natural disasters or public health crises could adversely affect our business and results of operations. ​ The current war in Ukraine and the continued threat of terrorism, heightened security measures and military action in response to acts of terrorism or civil unrest has, at times, disrupted commerce and intensified concerns regarding the United 27 Table of Contents States and world economies.
The successful operation and expansion of our digital business, as well as our ability to provide a positive shopping experience that will generate orders and drive subsequent visits, depends on operating an appealing digital platform and providing an efficient and uninterrupted operation of our order-taking and fulfillment operations.
The successful operation and expansion of our digital business, as well as our ability to provide a positive shopping experience that will generate orders and drive subsequent visits, depends on operating an appealing digital platform and 22 Table of Contents providing an efficient and uninterrupted operation of our order-taking and fulfillment operations.
Similarly, the 27 Table of Contents occurrence of one or more natural disasters, such as hurricanes, fires, floods or earthquakes, or public health crises, such as the COVID-19 pandemic, could result in the closure of one or more of our distribution centers, our corporate headquarters or a significant number of stores or impact one or more of our key suppliers.
Similarly, the occurrence of one or more natural disasters, such as hurricanes, fires, floods or earthquakes, or public health crises, such as the COVID-19 pandemic, could result in the closure of one or more of our distribution centers, our corporate headquarters or a significant number of stores or impact one or more of our key suppliers.
Financial instability in Europe could adversely affect our European operations and, in turn, could have a material adverse effect on us. ​ 28 Table of Contents We have foreign currency exposures relating to buying and selling in currencies other than the U.S. dollar, our functional currency. ​ We have foreign currency exposure related to foreign denominated revenues and costs, which must be translated into U.S. dollars.
Financial instability in Europe could adversely affect our European operations and, in turn, could have a material adverse effect on us. ​ We have foreign currency exposures relating to buying and selling in currencies other than the U.S. dollar, our functional currency. ​ We have foreign currency exposure related to foreign denominated revenues and costs, which must be translated into U.S. dollars.
Moreover, the misuse of our brand by, or negative publicity involving, a licensee, could have a material adverse effect on our brand and on us. ​ Risk Factors Relating to the Economy and the Apparel Industry ​ Recent and future economic conditions, including volatility in the financial and credit markets, may adversely affect our business. ​ Economic conditions have affected, and in the future may adversely affect, the apparel industry and our major customers.
Moreover, the misuse of our brand by, or negative publicity involving, a licensee, could have a material adverse effect on our brand and on us. ​ Risk Factors Relating to the Economy and the Apparel Industry ​ Recent and future economic conditions, including volatility in the financial and credit markets, inflation and increases in interest rates, may adversely affect our business. ​ Economic conditions have affected, and in the future may adversely affect, the apparel industry and our major customers.
Adverse outcomes from examinations may lead to adjustments to our income tax liabilities or provisions for uncertain tax position reserves. ​ 33 Table of Contents We are required to pay taxes other than income taxes, such as payroll, sales, use, value-added, net worth, property, and goods and services taxes, in both the United States and various other jurisdictions.
Adverse outcomes from examinations may lead to adjustments to our income tax liabilities or provisions for uncertain tax position reserves. ​ We are required to pay taxes other than income taxes, such as payroll, sales, use, value-added, net worth, property, and goods and services taxes, in both the United States and various other jurisdictions.
In fiscal 2022, net sales of licensed product accounted for 67.2% of our net sales compared to 68.5% of our net sales in fiscal 2021 and 65.6% of our net sales in fiscal 2020. ​ We are generally required to achieve specified minimum net sales, make specified royalty and advertising payments and receive prior approval from the licensor as to all design and other elements of each product prior to production.
In fiscal 2023, net sales of licensed product accounted for 58.6% of our net sales compared to 67.2% of our net sales in fiscal 2022 and 68.5% of our net sales in fiscal 2021. ​ We are generally required to achieve specified minimum net sales, make specified royalty and advertising payments and receive prior approval from the licensor as to all design and other elements of each product prior to production.
To date, no such disruptions have occurred. ​ Risks Related to Cybersecurity, Data Privacy and Information Technology ​ Laws on privacy continue to evolve, and place further limits on how we collect or use customer information could adversely affect our business. ​ We collect, store and process customer information primarily for marketing purposes and to improve the services we provide.
To date, no such disruptions have occurred. ​ ​ 30 Table of Contents Risks Related to Cybersecurity, Data Privacy and Information Technology ​ Laws on privacy continue to evolve, and place further limits on how we collect or use customer information could adversely affect our business. ​ We collect, store and process customer information primarily for marketing purposes and to improve the services we provide.
Any such breach or attack could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. ​ 31 Table of Contents Because the methods used to obtain unauthorized access change frequently and may not be immediately detected, we may be unable to anticipate these methods or promptly implement preventative measures.
Any such breach or attack could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. ​ Because the methods used to obtain unauthorized access change frequently and may not be immediately detected, we may be unable to anticipate these methods or promptly implement preventative measures.
Although we have announced our corporate responsibility strategy and increased focus on these issues, there can be no assurance that our stakeholders will agree with our strategy or that we will be successful in achieving our goals.
Although we have disclosed our corporate social responsibility strategy and increased focus on these issues, there can be no assurance that our stakeholders will agree with our strategy or that we will be successful in achieving our goals.
The market price of our common stock may change significantly in response to various factors and events beyond our control, including: ​ ● fluctuations in our quarterly revenues or those of our competitors as a result of seasonality or other factors; ● a shortfall in revenues or net income from that expected by securities analysts and investors; 34 Table of Contents ● changes in securities analysts’ estimates of our financial performance or the financial performance of our competitors or companies in our industry generally; ● announcements concerning our competitors; ● changes in product pricing policies by our competitors or our customers; ● changes in tariff and trade policies; ● actual or perceived adverse effects from the coronavirus outbreak; ● general conditions in our industry; and ● general conditions in the securities markets. ​ Our actual financial results might vary from our publicly disclosed financial forecasts. ​ From time to time, we have publicly disclosed financial forecasts.
The market price of our common stock may change significantly in response to various factors and events beyond our control, including: ​ ● fluctuations in our quarterly revenues or those of our competitors as a result of seasonality or other factors; ● a shortfall in revenues or net income from that expected by securities analysts and investors; ● changes in securities analysts’ estimates of our financial performance or the financial performance of our competitors or companies in our industry generally; ● announcements concerning our competitors; ● changes in product pricing policies by our competitors or our customers; ● changes in tariff and trade policies; ● actual or perceived adverse effects from the COVID-19 pandemic; ● general conditions in our industry; and ● general conditions in the securities markets. ​ Our actual financial results might vary from our publicly disclosed financial forecasts. ​ From time to time, we have publicly disclosed financial forecasts.
Our proprietary brands include the DKNY and Donna Karan brands, G.H. Bass, Vilebrequin, Andrew Marc and Wilsons Leather, among others, including the recently acquired Sonia Rykiel brand. In addition, brand value is based in part on consumer perceptions of a variety of qualities, including merchandise quality and corporate integrity.
Our proprietary brands include DKNY, Donna Karan, Karl Lagerfeld, G.H. Bass, Vilebrequin, Sonia Rykiel, Andrew Marc and Wilsons Leather, among others. In addition, brand value is based in part on consumer perceptions of a variety of qualities, including merchandise quality and corporate integrity.
In addition, the failure by these manufacturers to ship products to us in a timely manner could cause us to miss the delivery date requirements of our customers.
In addition, the failure by these manufacturers to ship products to us in a timely manner could cause us to miss the delivery date requirements of our 28 Table of Contents customers.
The loss of any of our large customers, the reduction in stores operated by a large customer or the bankruptcy or serious financial difficulty of any of our large customers, could have a material adverse effect on us. ​ Risks Relating to Our Retail Operations ​ Our retail operations may continue to incur losses if the revisions to our retail operations do not significantly improve our results of operations. ​ Our retail operations segment reported an operating loss of $24.8 million in fiscal 2022, $126.8 million in fiscal 2021 and $74.6 million in fiscal 2020.
The loss of any of our large customers, the reduction in stores operated by a large customer or the bankruptcy or serious financial difficulty of any of our large customers, could have a material adverse effect on us. ​ 21 Table of Contents Risks Relating to Our Retail Operations ​ Our retail operations may continue to incur losses if the revisions to our retail operations do not significantly improve the results of operations of our retail business. ​ Our retail operations segment reported an operating loss of $33.6 million in fiscal 2023, $24.8 million in fiscal 2022 and $126.8 million in fiscal 2021.
We may not be able to offset an increase in product costs with a price increase to our customers. ​ We are subject to numerous risks associated with international operations. ​ Our ability to capitalize on the potential of our international operations, including to realize the benefits of our DKNY, Donna Karan and Vilebrequin businesses, or of our newly acquired Sonia Rykiel brand, and successfully expand into international markets, is subject to risks associated with international operations.
We may not be able to offset an increase in product costs with a price increase to our customers. ​ We are subject to numerous risks associated with international operations. ​ Our ability to capitalize on the potential of our international operations, including to realize the benefits of our DKNY, Donna Karan, Vilebrequin and Sonia Rykiel businesses, as well as of the recently acquired Karl Lagerfeld brand, and successfully expand into international markets, is subject to risks associated with international operations.
To the extent that any of our key customers reduces the number of its vendors and, as a result, reduces or eliminates purchases from us, there could be a material adverse effect on us. ​ 20 Table of Contents We have significant customer concentration, and the loss of one of our large customers could adversely affect our business. ​ Our ten largest customers, all of which are department or discount store groups, accounted for approximately 78.0% of our net sales in fiscal 2022, 73.3% of our net sales in fiscal 2021 and 72.4% of our net sales in fiscal 2020, with the Macy’s Inc. group accounting for approximately 23.9% of our net sales in fiscal 2022, 20.9% of our net sales in fiscal 2021 and 26.3% of our net sales in fiscal 2020.
To the extent that any of our key customers reduces the number of its vendors and, as a result, reduces or eliminates purchases from us, there could be a material adverse effect on us. ​ We have significant customer concentration, and the loss of one of our large customers could adversely affect our business. ​ Our ten largest customers, all of which are department or discount store groups, accounted for approximately 74.2% of our net sales in fiscal 2023, 78.0% of our net sales in fiscal 2022 and 73.3% of our net sales in fiscal 2021, with the Macy’s Inc. group accounting for approximately 21.6% of our net sales in fiscal 2023, 23.9% of our net sales in fiscal 2022 and 20.9% of our net sales in fiscal 2021.
The failure to maintain or renew our material license agreements could cause us to lose significant revenue and have a material adverse effect on our results of operations. ​ 19 Table of Contents Any adverse change in our relationship with PVH and its Calvin Klein or Tommy Hilfiger brands would have a material adverse effect on our results of operations. ​ As of January 31, 2022, we have license agreements relating to a variety of products sold under the Calvin Klein and Tommy Hilfiger brands, both of which are owned by PVH.
The failure to maintain or renew our material license agreements could cause us to lose significant revenue and have a material adverse effect on our results of operations. ​ Any adverse change in our relationship with PVH Corp. and its Calvin Klein or Tommy Hilfiger brands, or inability to renew the license agreements for these brands, would have a material adverse effect on our results of operations. ​ As of January 31, 2023, we have license agreements relating to a variety of products sold under the Calvin Klein and Tommy Hilfiger brands, both of which are owned by PVH.
If an audit, self-assessment or other test determines that we need to take steps to remediate any deficiencies, such remediation efforts may distract the management team of our retail business and require it to undertake disruptive, costly and time-consuming remediation efforts.
Such activities may reveal that we have failed to comply with the Standard. If an audit, self-assessment or other test determines that we need to take steps to remediate any deficiencies, such remediation efforts may distract the management team of our retail business and require it to undertake disruptive, costly and time-consuming remediation efforts.
Historically, our wholesale business has been dependent on our sales during the third and fourth quarters. Net sales during the third and fourth quarters accounted for approximately 64% of our net sales in fiscal 2022, 66% of our net sales in fiscal 2021 and 60% of our net sales in fiscal 2020.
Historically, our wholesale business has been dependent on our sales during the third and fourth quarters. Net sales during the third and fourth quarters accounted for approximately 23 Table of Contents 60% of our net sales in fiscal 2023, 64% of our net sales in fiscal 2022 and 66% of our net sales in fiscal 2021.
A significant decline in our market capitalization or deterioration in our projected results could result in an impairment of our goodwill, trademarks and/or other intangibles.
A significant decline in our stock price and market capitalization or deterioration in our projected results could result in an impairment of our trademarks and/or other intangibles, or any future goodwill.
We may be required to record a significant charge to earnings in our financial statements during a period in which an impairment of our goodwill is determined to exist which would negatively impact our results of operations and could negatively the market price of our securities. ​ Risks Related to Our Indebtedness ​ We have a substantial amount of indebtedness, which could have a material adverse effect on our financial condition and our ability to obtain financing in the future and to react to changes in our business. ​ We have issued $400 million of Senior Secured Notes and are party to the ABL Credit Agreement that provides for borrowings of up to $650 million, subject to borrowing base availability.
We may be required to record additional significant charges to earnings in our financial statements during a period in which an impairment of our trademarks and other intangible assets is determined to exist which could negatively affect the market price of our securities. ​ Risks Related to Our Indebtedness ​ We have a substantial amount of indebtedness, which could have a material adverse effect on our financial condition and our ability to obtain financing in the future and to react to changes in our business. ​ We have issued $400 million of Senior Secured Notes and are party to the ABL Credit Agreement that provides for borrowings of up to $650 million, subject to borrowing base availability.
Under GDPR, fines of up to 20 million Euros or 4% of a company’s annual global revenues, whichever is greater, can be imposed for violations. ​ The California Consumer Privacy Act (“CCPA”) limits how we may collect, use, and process personal data of California residents.
Under GDPR, fines of up to 20 million Euros or 4% of a company’s annual global revenues, whichever is greater, can be imposed for violations. ​ The California Privacy Rights Act (“CPRA”) and the California Consumer Privacy Act (“CCPA”) regulate how we may collect, use, and process personal data of California residents, and provide California residents with certain rights regarding their personal data.
We are attempting to expand our presence in the European markets, including for our DKNY, Donna Karan and Vilebrequin businesses, as well as for our recently acquired Sonia Rykiel brand. The economy in Europe is uncertain and potentially affected by the war in Ukraine and the impacts of the COVID-19 pandemic.
We are attempting to expand our presence in the European markets, including for our DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin and Sonia Rykiel businesses. The economy in Europe is uncertain and potentially adversely affected by the impacts of the war in Ukraine and the COVID-19 pandemic.
If we fail to comply with these laws and regulations, we may additionally be subject to claims, or other obligations, as well as financial and reputational damage, which could impact our business, financial condition and results of operations. ​ Any limitations imposed on the use of customer information by federal, state, local or foreign governments, could have an adverse effect on our future marketing activities.
If we fail to comply with applicable laws and regulations, we may be subject to legal exposure, as well as financial and reputational damage, which could impact our business, financial condition and results of operations. ​ Any additional limitations imposed on the use of consumer information by federal, state, local or foreign governments, could have an adverse effect on our future marketing activities.
As a result, any of these manufacturers may unilaterally terminate its relationship with us at any time. Almost all of our products are imported from independent foreign manufacturers. The failure of these manufacturers to meet required quality standards could damage our relationships with our customers.
We also do not have long-term written agreements with any of our manufacturers. As a result, any of these manufacturers may unilaterally terminate its relationship with us at any time. Almost all of our products are imported from independent foreign manufacturers. The failure of these manufacturers to meet required quality standards could damage our relationships with our customers.
Failure to implement our strategy or achieve our goals could damage our reputation, causing our investors or consumers to lose confidence in us and our brands, and negatively impact our operations. ​ The price of our common stock has fluctuated significantly and could continue to fluctuate significantly. ​ Between February 1, 2019 and March 23, 2022, the market price of our common stock has ranged from a low of $2.96 to a high of $43.98 per share.
Failure to comply with governmental regulations, implement our strategy or achieve our goals could damage our reputation, causing our investors or consumers to lose confidence in us and our brands, and negatively impact our operations. ​ The price of our common stock has fluctuated significantly and could continue to fluctuate significantly. ​ Between February 1, 2020 and March 23, 2023, the market price of our common stock has ranged from a low of $2.96 to a high of $35.80 per share.
Uncertainties regarding future economic prospects, including as a result of the COVID-19 pandemic, may affect consumer-spending habits and could have an adverse effect on our results of operations.
Uncertainties regarding future economic prospects, including as a result of concerns with respect to the possibility of a recession, the increase in interest rates or the COVID-19 pandemic, may affect consumer-spending habits and could have an adverse effect on our results of operations.
Products sourced from China represented approximately 34.2% of our inventory purchased in fiscal 2022, 32.8% of our inventory purchased in fiscal 2021 and 49.5% of our inventory purchased in fiscal 2020. ​ While we source our products from many different manufacturers, we rely on a few manufacturers for a significant amount of our products.
Products sourced from Vietnam represented approximately 31.4% of our inventory purchased in fiscal 2023, 32.2% of our inventory purchased in fiscal 2022 and 36.2% of our inventory purchased in fiscal 2021. ​ While we source our products from many different manufacturers, we rely on a few manufacturers for a significant amount of our products.
In addition, Ross Stores accounted for approximately 12.7% of our net sales in fiscal 2022, 9.4% of our net sales in fiscal 2021 and 7.0% of our net sales in fiscal 2020. We expect that these customers will continue to provide a significant percentage of our sales.
In addition, TJX Companies accounted for approximately 15.4% of our net sales in fiscal 2023, 14.8% of our net sales in fiscal 2022 and 12.9% of our net sales in fiscal 2021. We expect that these customers will continue to provide a significant percentage of our sales.
We may not realize the intended benefits of an acquisition or an acquisition may fail to generate expected financial results. We also might not be successful in identifying or negotiating suitable acquisitions, which could negatively impact our growth strategy. If acquisitions disrupt our operations, our business may suffer. ​ We conduct certain of our operations through joint ventures.
Acquired businesses may not be successfully integrated with our operations. We may not realize the intended benefits of an acquisition or an acquisition may fail to generate expected financial results. We also might not be successful in identifying or negotiating suitable acquisitions, which could negatively impact our growth strategy.
To comply with the CCPA, we made certain changes to our data processing practices and policies but it may require that we further modify our data processing practices and policies and incur substantial compliance-related costs and expenses.
To comply with the CPRA and CCPA, we updated our data processing practices and policies. However, these laws may require that we further modify our data processing practices and policies and incur substantial compliance-related costs and expenses.
For fiscal 2022, approximately 34.2% of the products that we sold were manufactured in China.
For fiscal 2023, approximately 37.6% of the products that we sold were manufactured in China.
We are required by Card Rules to comply with the Standard, and our failure to do so may result in fines or restrictions on our ability to accept payment cards.
We are required by Card Rules to comply with the Standard, and our failure to do so may result in fines or restrictions on our ability to accept payment cards. Under certain circumstances specified in the Card Rules, we may be required to submit to periodic audits, self-assessments or other assessments of our compliance with the Standard.
These reforms may cause LIBOR to cease to exist, new methods of calculating LIBOR to be established or the establishment of an alternative reference rate(s). These consequences cannot be entirely predicted and could have an adverse impact on the market value for or value of LIBOR-linked securities, loans, and other financial obligations or extensions of credit to us.
The consequences of the change in the reference rate cannot be entirely predicted and could have an adverse impact on the market value for or value of LIBOR-linked securities, loans, and other financial obligations or extensions of credit to us.
This could have an adverse effect on our results of operations. ​ Changes in tax legislation or exposure to additional tax liabilities could impact our business. ​ The change in the U.S. presidency and control of Congress last year could result in changes to U.S. tax laws that would have a negative impact on our results of operations.
These efforts may not enable us to offset the adverse effects of any increases in tariffs. ​ 33 Table of Contents Changes in tax legislation or exposure to additional tax liabilities could impact our business. ​ The change in the U.S. presidency and control of Congress last year could result in changes to U.S. tax laws that would have a negative impact on our results of operations.
Products sourced from Vietnam represented approximately 32.2% of our inventory purchased in fiscal 2022, 36.2% of our inventory purchased in fiscal 2021 and 24.6% of our inventory purchased in fiscal 2020.
Products sourced from China represented approximately 37.6% of our inventory purchased in fiscal 2023, 34.2% of our inventory purchased in fiscal 2022 and 32.8% of our inventory purchased in fiscal 2021.
In fiscal 2022, we sourced 35.5% and 17.1% of our purchases from two different vendors in Vietnam and in fiscal 2021, we sourced 10.7% of our purchases from one vendor in Vietnam. In fiscal 2022, we sourced 19.4% of our purchases from one vendor in China.
In fiscal 2023, we sourced 25.7% and 15.2% of our purchases from two different vendors in Vietnam and in fiscal 2022, we sourced 35.5% and 17.1% of our purchases from two different vendors in Vietnam.
Approximately $621.7 million of our goodwill, trademarks and other intangibles was recorded in connection with our acquisition of DKNY and Donna Karan.
Approximately $395.5 million of our trademarks and other intangibles was recorded in connection with our acquisition of DKNY and Donna Karan and approximately $182.6 million of our trademarks and other intangibles was recorded in connection with our recent acquisition of Karl Lagerfeld.
If we encounter problems affecting our distribution system, our ability to meet customer expectations, manage inventory, complete sales and achieve operating efficiencies could be materially adversely affected. ​ 24 Table of Contents Supply chain disruptions have adversely affected, and could continue to adversely affect, our ability to import our products in a timely manner and our freight costs. ​ The effects of the COVID-19 pandemic on the shipping industry have negatively impacted our ability to import our products in a manner that allows for timely delivery to our customers.
If we encounter problems affecting our distribution system, our ability to meet customer expectations, manage inventory, complete sales and achieve operating efficiencies could be materially adversely affected. ​ Supply chain disruptions have adversely affected, and could continue to adversely affect, our ability to import our products in a timely manner and our freight costs. ​ There were numerous factors disrupting the shipping industry during fiscal 2023 that negatively affected transit times from our overseas suppliers.
This could disrupt our business and adversely affect our financial condition. ​ Part of our growth strategy is to pursue acquisitions. The negotiation of potential acquisitions as well as the integration of acquired businesses could divert our management’s time and resources. Acquired businesses may not be successfully integrated with our operations.
This could disrupt our business and adversely affect our financial condition. ​ Part of our growth strategy is to pursue acquisitions. Our most recent acquisition resulted in our owning all of the interests in the parent company of Karl Lagerfeld. The negotiation of potential acquisitions, as well as the integration of acquired businesses, could divert our management’s time and resources.
We cannot predict the future level of interest rates or the effect of any increase in interest rates on the availability or aggregate cost of our borrowings.
We cannot predict the future level of interest rates or the effect of any increase in interest rates on the availability or aggregate cost of our borrowings. Higher interest rates increase the cost of our borrowings under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending.
Any further acts of terrorism or new or extended hostilities may disrupt commerce and undermine consumer confidence, which could negatively impact our sales and results of operations.
These implications of the war in Ukraine could have a material adverse effect on our business and our results of operations. ​ Any other acts of terrorism or new or extended hostilities may disrupt commerce and undermine consumer confidence, which could negatively impact our sales and results of operations.
Even as government restrictions and company initiatives have been lifted or significantly reduced, consumer behavior, spending levels and/or shopping preferences, such as willingness to congregate in shopping centers or other populated locations, could be adversely affected. ​ The COVID-19 pandemic has had, and will likely continue to have, a significant adverse effect on our business, financial condition, and results of operations.
Even as government restrictions and company initiatives have been lifted or significantly reduced, consumer behavior, spending levels and/or shopping preferences, such as willingness to congregate in shopping centers or other populated locations, could be adversely affected. ​ The extent to which COVID-19 impacts our results in fiscal 2024 will depend on continued developments in the United States and around the world in the public and private responses to the pandemic.
If we are not successful in implementing and managing our plans with respect to operating our retail business, we may not be able to achieve operating enhancements, sales growth and/or cost reductions, which could adversely impact our business, results of operations and financial condition. ​ Restructuring of our retail operations resulted in our incurring charges for impairment of retail assets.
If we are not successful in implementing and managing our plans with respect to operating our retail business, we may not be able to achieve operating enhancements, sales growth and/or cost reductions or may continue to report operating losses in our retail operations segment, which could adversely impact our business, results of operations and financial condition. ​ Leasing of significant amounts of real estate exposes us to possible liabilities and losses. ​ All of the stores operated by us are leased.
This segment may continue to report operating losses for the near term even after the completion of the restructuring of our retail operations in fiscal 2021. Our ongoing plan focuses on the operations and growth of our DKNY and Karl Lagerfeld Paris stores, as well as operating our digital business.
Our ongoing plan for our retail operations focuses on the operations and growth of our DKNY and Karl Lagerfeld Paris stores, as well as operating our digital business.
If the U.S. and China are not able to resolve their differences, additional tariffs may be put in place and additional products may become subject to tariffs. Tariffs on additional products imported by us from China would increase our costs, could require us to increase prices to our customers and would cause us to seek price concessions from our vendors.
Tariffs or quotas on additional products imported by us from China would increase our costs, could require us to increase prices to our customers and would cause us to seek price concessions from our vendors.
Store closings could adversely affect our business and results of operations. Consolidation could reduce the number of our customers and potential customers. With increased consolidation in the retail industry, we are increasingly dependent on retailers whose bargaining strength may increase and whose share of our business may grow.
Consolidation could reduce the number of our customers and potential customers. With increased consolidation in the retail industry, we are increasingly dependent on retailers whose bargaining strength may increase and whose share of our business may grow. As a result, we may face greater pressure from these customers to provide more favorable terms, including increased support of their retail margins.
In addition, if we are unable to offset higher freight and other costs through product price increases or other measures, our results of operations may be adversely affected. ​ Fluctuations in the price, availability and quality of materials used in our products could have a material adverse effect on our cost of goods sold and our ability to meet our customers’ demands. ​ Fluctuations in the price, availability and quality of raw materials used in our products could have a material adverse effect on our cost of sales or our ability to meet the demands of our customers.
While we have planned for a certain amount of promotional activity, additional promotional activity in excess of what we have planned for could have an adverse effect on our results of operations. ​ Fluctuations in the price, availability and quality of materials used in our products could have a material adverse effect on our cost of goods sold and our ability to meet our customers’ demands. ​ Fluctuations in the price, availability and quality of raw materials used in our products could have a material adverse effect on our cost of sales or our ability to meet the demands of our customers.
Any adverse change in our relationship with PVH or in the reputation of Calvin Klein or Tommy Hilfiger, or our inability to renew licenses for either the Calvin Klein or Tommy Hilfiger brands as their current terms end, would have a material adverse effect on our results of operations. ​ Our success is dependent on the strategies and reputation of our licensors. ​ We strive to offer our products on a multiple brand, multiple channel and multiple price point basis.
Unless we are able to increase the sales of our other products, acquire new businesses and/or enter into other license agreements covering different products, the inability to renew the Calvin Klein and Tommy Hilfiger license agreements would cause a significant decrease in our net sales and have a material adverse effect on our results of operations. ​ Our success is dependent on the strategies and reputation of our licensors. ​ We strive to offer our products on a multiple brand, multiple channel and multiple price point basis.
We do not have any responsibility to provide financial forecasts going forward or to update any of our forward-looking statements at such times or otherwise. ​ If our goodwill, trademarks and other intangibles become impaired, we may be required to record charges to earnings. ​ As of January 31, 2022, we had goodwill, trademarks and other intangibles in an aggregate amount of $747.2 million, or approximately 27% of our total assets and approximately 49% of our stockholders’ equity.
If our trademarks and other intangibles become impaired, we may be required to record additional charges to earnings. ​ As of January 31, 2023, we had trademarks and other intangibles in an aggregate amount of $663.0 million, or approximately 24% of our total assets and approximately 48% of our stockholders’ equity.
Under accounting principles generally accepted in the United States (“GAAP”), we review our goodwill and other indefinite life intangibles for impairment annually as of January 31 of each fiscal year and when events or changes in circumstances indicate the carrying value may not be recoverable due to factors such as reduced estimates of future cash flows and profitability, increased cost of debt, slower growth rates in our industry or a decline in our stock price and market capitalization.
Under accounting principles generally accepted in the United States (“GAAP”), we review our goodwill and other indefinite life intangibles for impairment annually as of January 31 of each fiscal year and when events or changes in circumstances warrant.
Any such disagreement could have a material adverse effect on our interest in the joint venture, the business of the joint venture or the portion of our growth strategy related to the joint venture. ​ 23 Table of Contents We may need additional financing to continue to grow. ​ The continued growth of our business, including as a result of acquisitions, depends on our access to sufficient funds to support our growth.
If acquisitions disrupt our operations, our business may suffer. ​ We may need additional financing to continue to grow. ​ The continued growth of our business, including as a result of acquisitions, depends on our access to sufficient funds to support our growth.
The level of tariffs on these product categories was later increased to 25% beginning May 10, 2019. ​ On August 1, 2019, the United States government announced new 10% tariffs that cover the remaining estimated $300 billion of inbound trade from China, including most of our apparel products.
While the government considers these comments, it is not known which duties will or will not be continued, whether new products will be added to the scope of the tariffs, or whether duties will fluctuate in amount. ​ On August 1, 2019, the United States government announced new 10% tariffs that cover the remaining estimated $300 billion of inbound trade from China, including most of our apparel products.
It is difficult, if not impossible, at this time to predict the magnitude of the effect of the COVID-19 outbreak on our business and results of operations. ​ Risk Factors Relating to Our Wholesale Operations ​ The failure to maintain our material license agreements could cause us to lose significant revenues and have a material adverse effect on our results of operations. ​ We are dependent on sales of licensed products for a substantial portion of our revenues.
Furthermore, the COVID-19 pandemic (including federal, state and local governmental responses, broad economic impacts and market disruptions) has heightened risks discussed in the risk factors described in this Annual Report on Form 10-K. ​ 19 Table of Contents Risk Factors Relating to Our Wholesale Operations ​ The failure to maintain our material license agreements could cause us to lose significant revenues and have a material adverse effect on our results of operations. ​ We are dependent on sales of licensed products for a substantial portion of our revenues.
If we fail to comply with any of these regulations, we could be subject to a range of regulatory actions, fines or other sanctions or litigation. ​ Other Risks Relating to Ownership of Our Common Stock ​ The increased focus by stakeholders on corporate responsibility issues, including those associated with environmental, social and governance issues, could negatively affect our business and operations. ​ Our business is susceptible to risks associated with climate change, including through disruption to our supply chain, potentially impacting the production and distribution of our products and availability and pricing of raw materials.
If we fail to comply with any of these regulations, we could be subject to a range of regulatory actions, fines or other sanctions or litigation. ​ Other Risks Relating to Ownership of Our Common Stock ​ The increased focus by stakeholders on corporate responsibility issues, including those associated with environmental, social and governance issues, as well as matters of significance related to sustainability, could result in additional costs or risks and adversely impact our reputation. ​ 34 Table of Contents There is an increased focus from our stakeholders, including consumers, employees and institutional investors, on corporate social responsibility matters, which we refer to as CSR, associated with environmental, social and governance issues and sustainability practices.
Continued consolidation in the retail industry, as well as store closing or retailers ceasing to do business, could negatively impact our business.
Continued consolidation in the retail industry, as well as store closing or retailers ceasing to do business, could negatively impact our business. Various customers of ours, including Macy’s and Kohl’s, have reduced their store count and others have filed for bankruptcy. Store closings could adversely affect our business and results of operations.
Accordingly, these types of events could have a material adverse effect on our business and our results of operations. ​ Risks Related to Our International Operations ​ We are dependent upon foreign manufacturers. ​ We do not own or operate any manufacturing facilities. We also do not have long-term written agreements with any of our manufacturers.
The impact of COVID-19 on our business and operating results could differ materially from our assumptions based on a number of factors largely outside of our control. ​ Risks Related to Our International Operations ​ We are dependent upon foreign manufacturers. ​ We do not own or operate any manufacturing facilities.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES. ​ The offices, sales showrooms, distribution centers and warehouses that are material to us, all of which are leased, consist of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Location ​ Property Type ​ Lease Expiration ​ Renewal Option ​ Square Footage 500 and 512 Seventh Avenue, New York City ​ Corporate Office and showrooms ​ March 2023 / March 2028 ​ 5-year ​ 313,000 231 West 39th Street, New York City ​ Corporate Office and showrooms ​ June 2034 ​ - ​ 22,000 Jamesburg, New Jersey ​ Distribution center ​ December 2028 ​ 5-year ​ 583,000 South Brunswick, New Jersey ​ Distribution center ​ January 2025 ​ - ​ 305,000 Carlstadt, New Jersey ​ Distribution center ​ April 2024 ​ 10-year ​ 197,000 Brooklyn Park, Minnesota ​ Retail operations office, warehouse and distribution facility ​ April 2022 ​ - ​ 301,000 ​ As a result of the restructuring of our retail operations segment, the lease at our Brooklyn Park, Minnesota warehouse and distribution facility is expiring in April 2022 and will not be renewed.
Biggest changePROPERTIES. ​ The offices, sales showrooms, distribution centers and warehouses that are material to us, all of which are leased, consist of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Location ​ Property Type ​ Lease Expiration ​ Renewal Option ​ Square Footage 500 and 512 Seventh Avenue, New York City ​ Corporate Office and showrooms ​ March 2023 through March 2028 ​ 5-year ​ 313,000 231 West 39th Street, New York City ​ Corporate Office and showrooms ​ June 2034 ​ - ​ 22,000 Jamesburg, New Jersey ​ Distribution center ​ December 2028 ​ 5-year ​ 583,000 South Brunswick, New Jersey ​ Distribution center ​ January 2025 ​ - ​ 305,000 Carlstadt, New Jersey ​ Distribution center ​ April 2024 ​ 10-year ​ 197,000 ​ The leases for a large portion of our corporate office and showrooms located at 500 and 512 Seventh Avenue, New York City expires in March 2023.
In addition, we operated 26 DKNY stores in China that are 75% owned by us. ​ Most leases for retail stores in the United States require us to pay annual minimum rent plus a contingent rent dependent on the store’s annual sales in excess of a specified threshold.
In addition, we operated 22 DKNY stores in China that are 75% owned by us. ​ Most leases for retail stores in the United States require us to pay annual minimum rent plus a contingent rent dependent on the store’s annual sales in excess of a specified threshold.
Recently, store leases have been for shorter durations with an option to terminate if certain sales levels are not met. ​ Our leases expire at varying dates through 2032. Almost all of our stores, other than certain Vilebrequin and DKNY stores, are located in the United States.
Recently, store leases have been for shorter durations with an option to terminate if certain sales levels are not met. ​ Our leases expire at varying dates through 2035. Vilebrequin has 56 stores located in Europe, 20 stores located in the United States, 11 stores located in Asia, 7 stores located in Mexico and 3 stores in the Caribbean.
In addition, DKNY has 26 stores located in Asia operated by Fabco. ​ The following table indicates the periods during which our retail leases expire: ​ ​ ​ ​ ​ ​ Number of Fiscal Year Ending January 31, Stores 2023 ​ 48 2024 ​ 25 2025 ​ 28 2026 ​ 24 2027 and thereafter ​ 57 Total ​ 182 ​ ​ 40 Table of Contents
Karl Lagerfeld has 62 stores located in Europe. ​ 40 Table of Contents The following table indicates the periods during which our retail leases expire: ​ ​ ​ ​ ​ ​ Number of Fiscal Year Ending January 31, Stores 2024 ​ 54 2025 ​ 41 2026 ​ 35 2027 ​ 24 2028 and thereafter ​ 90 Total ​ 244 ​ ​
Vilebrequin has 53 stores located in Europe, 23 stores located in the United States, 10 stores located in Asia, 8 stores located in Mexico and 2 stores in the Caribbean. DKNY has 30 stores located in the United States, 3 stores located in Canada and 4 stores located in Europe.
DKNY has 22 stores located in the United States, 5 stores located in Europe and 2 stores located in Canada. In addition, DKNY has 22 stores located in Asia operated by Fabco. Karl Lagerfeld Paris has 29 stores located in the United States and 1 store located in Canada.
Removed
Our inventory, shipping and logistics needs for our retail operations segment will be operated from our other distribution centers. ​ Retail Stores ​ As of January 31, 2022, we operated 96 Vilebrequin retail stores and 60 DKNY and Karl Lagerfeld Paris stores.
Added
We are currently engaged in discussions with the landlord with respect to the renewal of these leases. ​ Retail Stores ​ As of January 31, 2023, we operated 97 Vilebrequin retail stores, 59 DKNY and Karl Lagerfeld Paris stores, 62 Karl Lagerfeld stores and 4 Sonia Rykiel stores.
Added
Sonia Rykiel has 3 stores located in Europe and 1 store located in the United States.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough we cannot predict with certainty the ultimate resolution of claims, investigations and lawsuits, asserted against us, we do not believe that any currently pending legal proceeding or proceedings to which we are a party will have a material adverse effect on our business, financial condition or results of operations. ​ Canadian Customs Duty Examination ​ See “Legal Proceedings” under Note 10 to Notes to Consolidated Financial Statements” for a description of the Canadian customs duty examination. ​
Biggest changeAlthough we cannot predict with certainty the ultimate resolution of claims, investigations and lawsuits, asserted against us, we do not believe that any currently pending legal proceeding or proceedings to which we are a party will have a material adverse effect on our business, financial condition or results of operations. ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn March 2022, our Board of Directors increased the authorized share repurchase program to 10,000,000 shares. ​ ​ ​ 42 Table of Contents Performance Graph ​ The following Performance Graph and related information shall not be deemed to be “soliciting material” or “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended, except to the extent that we specifically request that it be treated as soliciting material or incorporate it by reference into such filing. ​ The SEC requires us to present a chart comparing the cumulative total stockholder return on our Common Stock with the cumulative total stockholder return of (i) a broad equity market index and (ii) a published industry index or peer group.
Biggest changeRepurchases under the program may be made from time to time through open market purchases, accelerated share repurchase programs, privately negotiated transactions or other methods, as we deem appropriate. ​ ​ ​ 42 Table of Contents Performance Graph ​ The following Performance Graph and related information shall not be deemed to be “soliciting material” or “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended, except to the extent that we specifically request that it be treated as soliciting material or incorporate it by reference into such filing. ​ The SEC requires us to present a chart comparing the cumulative total stockholder return on our Common Stock with the cumulative total stockholder return of (i) a broad equity market index and (ii) a published industry index or peer group.
This chart compares the Common Stock with (i) the S&P 500 Composite Index and (ii) the S&P 500 Textiles, Apparel and Luxury Goods Index, and assumes an investment of $100 on January 31, 2017 in each of the Common Stock, the stocks comprising the S&P 500 Composite Index and the stocks comprising the S&P 500 Textiles, Apparel and Luxury Goods Index. ​ G-III Apparel Group, Ltd.
This chart compares the Common Stock with (i) the S&P 500 Composite Index and (ii) the S&P 500 Textiles, Apparel and Luxury Goods Index, and assumes an investment of $100 on January 31, 2018 in each of the Common Stock, the stocks comprising the S&P 500 Composite Index and the stocks comprising the S&P 500 Textiles, Apparel and Luxury Goods Index. ​ G-III Apparel Group, Ltd.
Our common stock is traded under the symbol “GIII”. ​ On March 23, 2022, there were 18 holders of record and, we believe, approximately 27,700 beneficial owners of our common stock. ​ Dividend Policy ​ Our Board of Directors (the “Board”) currently intends to follow a policy of retaining any earnings to finance the growth and development of our business.
Our common stock is traded under the symbol “GIII”. ​ On March 23, 2023, there were 16 holders of record and, we believe, approximately 27,700 beneficial owners of our common stock. ​ Dividend Policy ​ Our Board of Directors (the “Board”) currently intends to follow a policy of retaining any earnings to finance the growth and development of our business.
Our 2015 Long-Term Incentive Plan provides that shares withheld are valued at the closing price per share on the date withheld. (2) In December 2015, our Board of Directors reapproved and increased a previously authorized share repurchase program from the 3,750,000 shares remaining under that plan to 5,000,000 shares. This program has no expiration date.
Our 2015 Long-Term Incentive Plan provides that shares withheld are valued at the closing price per share on the date withheld. (2) In March 2022, our Board of Directors reapproved a previously authorized share repurchase program and increased the number of shares remaining under that program from 2,293,149 to 10,000,000 shares. This program has no expiration date.
Any future determination as to the payment of cash dividends will be dependent upon our financial condition, results of operations and other factors deemed relevant by the Board. ​ Issuer Purchases of Equity Securities ​ The following table sets forth the repurchases of shares of our common stock during the fourth quarter of fiscal 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Date Purchased ​ Total Number of Shares Purchased (1) (2) ​ Average Price Paid Per Share (1) ​ Total Number of Share Purchased as Part of Publicly Announced Program (2) ​ Maximum Number of Shares that may yet be Purchased Under the Program (2) November 1 - November 30, 2021 ​ — ​ $ — ​ — ​ $ 2,949,362 December 1 - December 31, 2021 ​ 561,861 ​ ​ 26.26 ​ 561,861 ​ ​ 2,387,501 January 1 - January 31, 2022 ​ 94,620 ​ ​ 26.94 ​ 94,352 ​ ​ 2,293,149 ​ ​ 656,481 ​ $ 26.36 ​ 656,213 ​ $ 2,293,149 (1) Included in this table are 268 shares withheld during January 2022 in connection with the settlement of vested restricted stock units to satisfy tax withholding requirements.
Any future determination as to the payment of cash dividends will be dependent upon our financial condition, results of operations and other factors deemed relevant by the Board. ​ Issuer Purchases of Equity Securities ​ The following table sets forth the repurchases of shares of our common stock during the fourth quarter of fiscal 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Date Purchased ​ Total Number of Shares Purchased (1) (2) ​ Average Price Paid Per Share (1) ​ Total Number of Share Purchased as Part of Publicly Announced Program (2) ​ Maximum Number of Shares that may yet be Purchased Under the Program (2) November 1 - November 30, 2022 ​ — ​ $ — ​ — ​ $ 9,188,126 December 1 - December 31, 2022 ​ 777,008 ​ ​ 13.31 ​ 775,707 ​ ​ 8,412,419 January 1 - January 31, 2023 ​ — ​ ​ — ​ — ​ ​ 8,412,419 ​ ​ 777,008 ​ $ 13.31 ​ 775,707 ​ $ 8,412,419 (1) Included in this table are 1,301 shares withheld during December 2022 in connection with the settlement of vested restricted stock units to satisfy tax withholding requirements.
Comparison of Cumulative Total Return (January 31, 2017 — January 31, 2022) ​ ​ ​ ​ 43 Table of Contents ​
Comparison of Cumulative Total Return (January 31, 2018 — January 31, 2023) ​ ​ ​ ​ ​ 43 Table of Contents ​
Removed
Repurchases under the program may be made from time to time over the period through open market purchases, accelerated share repurchase programs, privately negotiated transactions or other methods, as we deem appropriate.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changePSU’s are expensed over the service period under the accelerated attribution method and based on an estimated percentage of achievement of certain pre-established goals. ​ Results of Operations ​ The following table sets forth our operating results both in dollars and as a percentage of our net sales for the fiscal years indicated below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended January 31, ​ 2022 ​ 2021 ​ ​ (In thousands, except for percentage of net sales amounts) Net sales ​ $ 2,766,538 ​ 100.0 % ​ $ 2,055,146 ​ 100.0 % Cost of goods sold ​ ​ 1,778,349 ​ 64.3 ​ ​ ​ 1,310,704 ​ 63.8 ​ Gross Profit ​ ​ 988,189 ​ 35.7 ​ ​ ​ 744,442 ​ 36.2 ​ Selling, general and administrative expenses ​ ​ 648,015 ​ 23.4 ​ ​ ​ 605,102 ​ 29.4 ​ Depreciation and amortization ​ ​ 27,626 ​ 1.0 ​ ​ ​ 38,625 ​ 1.9 ​ Asset impairments, net of gain on lease terminations ​ ​ 1,455 ​ 0.1 ​ ​ ​ 17,873 ​ 0.9 ​ Operating profit ​ ​ 311,093 ​ 11.2 ​ ​ ​ 82,842 ​ 4.0 ​ Other income (loss) ​ ​ 9,549 ​ 0.3 ​ ​ ​ 3,238 ​ 0.2 ​ Interest and financing charges, net ​ ​ (49,666) ​ (1.8) ​ ​ ​ (50,354) ​ (2.5) ​ Income before income taxes ​ ​ 270,976 ​ 9.7 ​ ​ ​ 35,726 ​ 1.7 ​ Income tax expense ​ ​ 70,875 ​ 2.6 ​ ​ ​ 12,203 ​ 0.6 ​ Net income ​ ​ 200,101 ​ 7.1 ​ ​ ​ 23,523 ​ 1.1 ​ Less: Loss attributable to noncontrolling interests ​ ​ (492) ​ — ​ ​ ​ (22) ​ — ​ Net income attributable to G-III Apparel Group, Ltd. ​ $ 200,593 ​ 7.1 % ​ $ 23,545 ​ 1.1 % ​ Year ended January 31, 2022 (“fiscal 2022”) compared to year ended January 31, 2021 (“fiscal 2021”) ​ Net sales for fiscal 2022 increased to $2.77 billion from $2.06 billion in the prior year.
Biggest changePSU’s are expensed over the service period under the accelerated attribution method and based on an estimated percentage of achievement of certain pre-established goals. ​ Results of Operations ​ The following table sets forth our operating results both in dollars and as a percentage of our net sales for the fiscal years indicated below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended January 31, ​ 2023 ​ 2022 ​ ​ (In thousands, except for percentage of net sales amounts) Net sales ​ $ 3,226,728 ​ 100.0 % ​ $ 2,766,538 ​ 100.0 % Cost of goods sold ​ ​ 2,125,591 ​ 65.9 ​ ​ ​ 1,778,349 ​ 64.3 ​ Gross Profit ​ ​ 1,101,137 ​ 34.1 ​ ​ ​ 988,189 ​ 35.7 ​ Selling, general and administrative expenses ​ ​ 833,151 ​ 25.8 ​ ​ ​ 648,015 ​ 23.4 ​ Depreciation and amortization ​ ​ 27,762 ​ 0.9 ​ ​ ​ 27,626 ​ 1.0 ​ Asset impairments and gain on lease terminations ​ ​ 349,686 ​ 10.8 ​ ​ ​ 1,455 ​ 0.1 ​ Operating profit (loss) ​ ​ (109,462) ​ (3.4) ​ ​ ​ 311,093 ​ 11.2 ​ Other income ​ ​ 27,894 ​ 0.9 ​ ​ ​ 9,549 ​ 0.3 ​ Interest and financing charges, net ​ ​ (56,602) ​ (1.8) ​ ​ ​ (49,666) ​ (1.8) ​ Income (loss) before income taxes ​ ​ (138,170) ​ (4.3) ​ ​ ​ 270,976 ​ 9.7 ​ Income tax expense (benefit) ​ ​ (3,788) ​ (0.1) ​ ​ ​ 70,875 ​ 2.6 ​ Net income (loss) ​ ​ (134,382) ​ (4.2) ​ ​ ​ 200,101 ​ 7.1 ​ Less: Loss attributable to noncontrolling interests ​ ​ (1,321) ​ — ​ ​ ​ (492) ​ — ​ Net income (loss) attributable to G-III Apparel Group, Ltd. ​ $ (133,061) ​ (4.2) % ​ $ 200,593 ​ 7.1 % ​ 53 Table of Contents Year ended January 31, 2023 (“fiscal 2023”) compared to year ended January 31, 2022 (“fiscal 2022”) ​ Net sales for fiscal 2023 increased to $3.23 billion from $2.77 billion in the prior year.
We also source and sell products to major retailers under their private retail labels. ​ Our products are sold through a cross section of leading retailers such as Macy’s, including its Bloomingdale’s division, Dillard’s, Hudson’s Bay Company, including their Saks Fifth Avenue division, Nordstrom, Kohl’s, TJX Companies, Ross Stores and Burlington.
We also source and sell products to major retailers under their private retail labels. ​ Our products are sold through a cross section of leading retailers such as Macy’s, including its Bloomingdale’s division, Dillard’s, Hudson’s Bay Company, including its Saks Fifth Avenue division, Nordstrom, Kohl’s, TJX Companies, Ross Stores and Burlington.
We 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. We have a total of $8.0 million debt issuance costs related to our ABL Credit Agreement.
We 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. We have incurred a total of $8.0 million of debt issuance costs related to our ABL Credit Agreement.
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 part of a COVID-19 relief program, TRB and its subsidiaries 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%.
If these estimates or their related assumptions change in the future, we may be required to record impairment charges for our goodwill and intangible assets with an indefinite life. ​ We perform our annual test for goodwill as of January 31 of each year.
If these estimates or their related assumptions change in the future, we may be required to record impairment charges for intangible assets with an indefinite life and any future goodwill. ​ We perform our annual test for goodwill as of January 31 of each year.
Management’s estimates of fair value are based on assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. ​ If we did not appropriately allocate these components or we incorrectly estimate the useful lives of these components, our computation of amortization expense may not appropriately reflect the actual impact of these costs over future periods, which may affect our results of operations. ​ Trademarks having 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. ​ 50 Table of Contents We have allocated the purchase price of the companies we acquired to the tangible and intangible assets acquired and liabilities we assumed, based on their estimated fair values.
Management’s estimates of fair value are based on assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. ​ If we did not appropriately allocate these components or we incorrectly estimate the useful lives of these components, our computation of amortization expense may not appropriately reflect the actual impact of these costs over future periods, which may affect our results of operations. ​ Trademarks having 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. ​ We have allocated the purchase price of the companies we acquired to the tangible and intangible assets acquired and liabilities we assumed, based on their estimated fair values.
G-III has a substantial portfolio of more than 30 licensed and proprietary brands, anchored by five global power brands: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. We are not only licensees, but also brand owners, and we distribute our products through multiple channels. ​ Our own proprietary brands include DKNY, Donna Karan, Vilebrequin, G.H.
G-III has a substantial portfolio of more than 30 licensed and proprietary brands, anchored by our global power brands: DKNY, Donna Karan, Karl Lagerfeld, Calvin Klein and Tommy Hilfiger. We are not only licensees, but also brand owners, and we distribute our products through multiple channels. ​ Our own proprietary brands include DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, G.H.
Compensation expense for RSU’s is recognized in the consolidated financial statements on a straight-line basis over the service period based on their grant date fair value. ​ Performance Based Restricted Stock Units ​ Performance based restricted stock units consist of both performance based restricted stock units (“PRSU’s”) and performance stock units (“PSU’s”). ​ 51 Table of Contents PRSU’s were granted to executives prior to fiscal 2020 and included (i) market price performance conditions that provide for the award to vest only after the average closing price of the Company’s stock trades above a predetermined market level and (ii) another performance condition that requires the achievement of an operating performance target.
Compensation expense for RSU’s is recognized in the consolidated financial statements on a straight-line basis over the service period based on their grant date fair value. ​ Performance Based Restricted Stock Units ​ Performance based restricted stock units consist of both performance based restricted stock units (“PRSU’s”) and performance stock units (“PSU’s”). ​ PRSU’s were granted to executives prior to fiscal 2020 and included (i) market price performance conditions that provide for the award to vest only after the average closing price of the Company’s stock trades above a predetermined market level and (ii) another performance condition that requires the achievement of an operating performance target.
PRSU’s are expensed over the service period under the accelerated attribution method. ​ PSU’s were granted to executives in fiscal 2022 and 2020 and vest after a three year performance period during which certain earnings before interest and taxes and return on invested capital performance conditions must be satisfied for vesting to occur.
PRSU’s are expensed over the service period under the accelerated attribution method. ​ PSU’s were granted to executives beginning in fiscal 2020 and vest after a three year performance period during which certain earnings before interest and taxes and return on invested capital performance conditions must be satisfied for vesting to occur.
In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos. ​ We also distribute apparel and other products directly to consumers through our own DKNY and Karl Lagerfeld Paris retail stores, as well as through our digital channels for the DKNY, Donna Karan, Karl Lagerfeld Paris, G.H.
In addition, we sell to leading pure online retail partners such as Amazon, Fanatics, Zalando and Zappos. ​ We also distribute apparel and other products directly to consumers through our own DKNY, Karl Lagerfeld, Karl Lagerfeld Paris and Vilebrequin retail stores, as well as through our digital channels for the DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin, G.H.
As of January 31, 2022, we were in compliance with all covenants under our senior secured notes and revolving credit facility. ​ Senior Secured Notes ​ In August 2020, we completed a private debt offering of $400 million aggregate principal amount of our 7.875% Senior Secured Notes due 2025 (the “Notes).
As of January 31, 2023, we were in compliance with all covenants under our senior secured notes and revolving credit facility. ​ Senior Secured Notes ​ In August 2020, we completed a private debt offering of $400 million aggregate principal amount of our 7.875% Senior Secured Notes due 2025 (the “Notes).
Vilebrequin inventories are stated at the lower of cost (determined by the weighted average method) or net realizable value. ​ We continually evaluate the composition of our inventories, assessing slow-turning, ongoing product as well as fashion product from prior seasons.
Retail and Vilebrequin inventories are stated at the lower of cost (determined by the weighted average method) or net realizable value. ​ We continually evaluate the composition of our inventories, assessing slow-turning, ongoing product as well as fashion product from prior seasons.
The 55 Table of Contents ABL Credit Agreement extended the maturity date 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.
The ABL Credit Agreement extended the maturity date 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.
The net proceeds of the Notes have been used (i) to repay the $300 million that was outstanding under our 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, commencing on February 15, 2021. ​ The Notes are unconditionally guaranteed on a senior-priority secured basis by our current and future wholly-owned domestic subsidiaries that guarantee any of our credit facilities, including our ABL facility (the “ABL Facility”) pursuant to the ABL Credit Agreement, or certain future capital markets indebtedness of ours or the guarantors. ​ The Notes and the related guarantees are secured by (i) first priority liens on our Cash Flow Priority Collateral (as defined in the Indenture), and (ii) a second-priority lien on our 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, we and the Guarantors entered into a pledge and security agreement (the “Pledge and Security Agreement”), among us, the Guarantors and the Collateral Agent. ​ 54 Table of Contents 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 net proceeds of the Notes were used (i) to repay the $300 million that was outstanding under our prior term loan facility (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 our current and future wholly-owned domestic subsidiaries that guarantee any of our credit facilities, including our ABL facility (the “ABL Facility”) pursuant to the ABL Credit Agreement, or certain future capital markets indebtedness of ours or the guarantors. ​ The Notes and the related guarantees are secured by (i) first priority liens on our Cash Flow Priority Collateral (as defined in the Indenture), and (ii) a second-priority lien on our 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, we and the Guarantors entered into a pledge and security agreement (the “Pledge and Security Agreement”), among us, the Guarantors and the Collateral Agent. ​ 55 Table of Contents 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”).
For fiscal 2021 and 2022, the retail operations segment reported based on a 52-week fiscal year. ​ The following presentation of management’s discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our financial statements, the accompanying notes and other financial information appearing elsewhere in this Report. ​ A discussion with respect to a comparison of the results of operations of fiscal 2021 compared to the fiscal year ended January 31, 2020 (“fiscal 2020”), other financial information related to fiscal 2020 and information with respect to Liquidity and Capital Resources at January 31, 2020 and for fiscal 2020 is contained under the headings “Results of Operations” and “Liquidity and Capital Resources” in Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2021. ​ Overview ​ G-III 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.
For fiscal 2023 and 2022, the retail operations segment reported based on a 52-week fiscal year that ended on January 28, 2023 and January 29, 2022, respectively. ​ The following presentation of management’s discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our financial statements, the accompanying notes and other financial information appearing elsewhere in this Report. ​ A discussion with respect to a comparison of the results of operations of fiscal 2022 compared to the fiscal year ended January 31, 2021 (“fiscal 2021”), other financial information related to fiscal 2021 and information with respect to Liquidity and Capital Resources at January 31, 2021 and for fiscal 2021 is contained under the headings “Results of Operations” and “Liquidity and Capital Resources” in Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2022. ​ Overview ​ G-III 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 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, we are required to pay a commitment fee to the lenders under the credit agreement with respect to the unutilized commitments.
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, we are required 56 Table of Contents to pay a commitment fee to the lenders under the credit agreement with respect to the unutilized commitments.
In the aggregate, the Company is currently required to make quarterly installment payments of €0.2 million. Interest on the outstanding principal amount of the unsecured loans accrues at a fixed rate equal to 0% to 2.0% per annum, payable on either a quarterly or monthly basis.
In the aggregate, the Company is currently required to make quarterly installment payments of principal in the amount of €0.6 million. 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.
Historical return rates are calculated on a product line basis. The remainder of the historical rates for variable consideration are calculated by customer by product lines. ​ We recognize retail sales when the customer takes possession of the goods and tenders payment, generally at the point of sale.
Historical return rates are calculated on a product line basis. The remainder of the historical rates for variable consideration are calculated by customer by product lines. ​ 49 Table of Contents We recognize retail sales when the customer takes possession of the goods and tenders payment, generally at the point of sale.
A provision is recorded to reduce the cost of inventories to the estimated net realizable values, if required. ​ 49 Table of Contents Income Taxes ​ As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate.
A provision is recorded to reduce the cost of inventories to the estimated net realizable values, if required. ​ Income Taxes ​ As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate.
The results of our annual tests determined that the estimated fair values of our wholesale reporting unit and our indefinite-lived trademarks were substantially in excess of their carrying values. ​ Our indefinite-lived trademark balance is primarily composed of the Donna Karan/DKNY trademark that was acquired in fiscal 2017. ​ The fair value of our goodwill and indefinite-lived intangible assets are considered a Level 3 valuation in the fair value hierarchy. ​ Impairment of Long-Lived Assets ​ All property and equipment and other long-lived assets are reviewed for potential impairment when events or changes in circumstances indicate that the asset’s carrying value may not be recoverable.
The results of our annual tests determined that the estimated fair values of our indefinite-lived trademarks were substantially in excess of their carrying values. ​ Our indefinite-lived trademark balance is primarily composed of the Donna Karan/DKNY trademarks that were acquired in fiscal 2017 and the Karl Lagerfeld trademark that was acquired in fiscal 2023. ​ The fair value of our goodwill and indefinite-lived intangible assets are considered a Level 3 valuation in the fair value hierarchy. ​ Impairment of Long-Lived Assets ​ All property and equipment and other long-lived assets are reviewed for potential impairment when events or changes in circumstances indicate that the asset’s carrying value may not be recoverable.
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. ​ We incurred debt issuance costs totaling $8.5 million related to the Notes that will be amortized over the term of the Notes.
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. ​ We incurred debt issuance costs totaling $8.5 million related to the Notes.
A potential impairment has occurred if projected future undiscounted cash flows are less than the carrying value of the assets. ​ In fiscal 2022, we 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. ​ In fiscal 2021, we recorded a $20.1 million impairment charge primarily related to operating lease assets, leasehold improvements and furniture and fixtures at certain Wilsons Leather and G.H.
A potential impairment has occurred if projected future undiscounted cash flows are less than the carrying value of the assets. ​ In fiscal 2023, we recorded a $2.7 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. ​ In fiscal 2022, we 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. ​ 52 Table of Contents In fiscal 2021, we recorded a $20.1 million impairment charge primarily related to operating lease assets, leasehold improvements and furniture and fixtures at certain Wilsons Leather and G.H.
Significant estimates used in the fair value methodologies include estimates of future cash flows, future short-term and long-term growth rates, weighted average cost of capital and estimates of market multiples of the reportable unit.
Significant estimates used in the fair value methodologies include estimates of future cash flows, future short-term and long-term growth rates, weighted average cost of capital and estimates of market 50 Table of Contents multiples of the reportable unit.
We also sell our products using digital channels through retail partners such as macys.com, 44 Table of Contents nordstrom.com and dillards.com, each of which has a substantial online business.
We also sell our products using digital channels through retail partners such as macys.com, nordstrom.com and dillards.com, each of which has a substantial online business.
We had an aggregate of €7.4 million ($8.4 million) and €7.4 million ($9.1 million) outstanding under the Company’s various unsecured loans as of January 31, 2022 and January 31, 2021, respectively.
We had an aggregate of €10.1 million ($10.9 million) and €7.4 million ($8.4 million) outstanding under the Company’s various unsecured loans as of January 31, 2023 and January 31, 2022, respectively.
Net sales of our segments are reported before intercompany eliminations. ​ Net sales of our wholesale operations segment increased to $2.71 billion from $1.92 billion in the comparable period last year.
Net sales of our segments are reported before intercompany eliminations. ​ Net sales of our wholesale operations segment increased to $3.16 billion from $2.71 billion in the comparable period last year.
Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York, Wilsons Leather and Sonia Rykiel. We sell products under an extensive portfolio of well-known licensed brands, including Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Levi’s, Guess?, Kenneth Cole, Cole Haan, Vince Camuto and Dockers.
Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York, Wilsons Leather and Sonia Rykiel. We sell products under an extensive portfolio of well-known licensed brands, including Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Levi’s, Guess?, Kenneth 44 Table of Contents Cole, Cole Haan, Vince Camuto, Dockers and, as of January 2024, Nautica.
We believe that our broad distribution capabilities help us to respond to the various shifts by consumers between distribution channels and that our operational capabilities will enable us to continue to be a vendor of choice for our retail partners. ​ Inflationary pressures have impacted our industry.
We believe that our broad distribution capabilities help us to respond to the various shifts by consumers between distribution channels and that our operational capabilities will enable us to continue to be a vendor of choice for our retail partners. ​ Inflation and Interest Rates ​ Inflationary pressures have impacted the entire economy, including our industry.
Variable consideration includes trade discounts, end of season markdowns, sales allowances, 48 Table of Contents cooperative advertising, return liabilities and other customer allowances.
Variable consideration includes trade discounts, end of season markdowns, sales allowances, cooperative advertising, return liabilities and other customer allowances.
Although our cash flow forecasts are based on assumptions that are consistent with our plans and estimates we are using to manage the underlying businesses, there is significant exercise of judgment involved in determining the cash flows attributable to a reporting unit over its estimated remaining useful life.
Although our cash flow forecasts are based on assumptions that are consistent with our plans and estimates we are using to manage the underlying businesses, there is significant exercise of judgment involved in determining the cash flows attributable to a reporting unit.
The cash requirements of our business are primarily related to the seasonal buildup in inventories, compensation paid to employees, payments to vendors in the normal course of business, capital expenditures, interest payments on debt obligations and income tax payments. ​ As of January 31, 2022, we had cash and cash equivalents of $466.0 million and availability under our revolving credit facility in excess of $560.0 million.
The cash requirements of our business are primarily related to the seasonal buildup in inventories, compensation paid to employees, payments to vendors in the normal course of business, capital expenditures, interest payments on debt obligations and income tax payments. ​ As of January 31, 2023, we had cash and cash equivalents of $191.7 million and availability under our revolving credit facility in excess of $550 million.
As of January 31, 2022, there were outstanding trade and standby letters of credit amounting to $10.0 million and $4.0 million, respectively. ​ At the date of the refinancing of the Prior Credit Agreement, we had $3.3 million of unamortized debt issuance costs remaining from the Prior Credit Agreement.
As of January 31, 2023, there were outstanding trade and standby letters of credit amounting to $5.2 million and $3.4 million, respectively. ​ At the date of the refinancing of the Prior Credit Agreement, we had $3.3 million of unamortized debt issuance costs remaining from the Prior Credit Agreement.
Bass and DKNY stores as a result of the performance at these stores. ​ Equity Awards ​ Restricted Stock Units ​ Restricted stock units (“RSU’s”) are time based awards that do not have market or performance conditions and either (i) cliff vest after three years or (ii) vest over a three year period.
Bass stores, primarily due to the retail restructuring, as well as at certain DKNY and Vilebrequin stores as a result of the performance at these stores. ​ Equity Awards ​ Restricted Stock Units ​ Restricted stock units (“RSU’s”) are time based awards that do not have market or performance conditions and either (i) cliff vest after three years or (ii) vest over a three year period.
We had no borrowings outstanding under our revolving credit facility as of January 31, 2022. (3) Includes outstanding trade letters of credit, which represent inventory purchase commitments, which typically mature in less than six months. ​
We had $80.1 million borrowings outstanding under our revolving credit facility as of January 31, 2023. (3) Includes outstanding trade letters of credit, which represent inventory purchase commitments, which typically mature in less than six months. ​
We had $400 million in borrowings outstanding under the Notes at each of January 31, 2022 and January 31, 2021. Our contingent liability under open letters of credit was approximately $14.0 million at January 31, 2022 and $10.5 million at January 31, 2021.
We had $400 million in borrowings outstanding under the Notes at each of January 31, 2023 and January 31, 2022. Our contingent liability under open letters of credit was approximately $8.6 million at January 31, 2023 and $14.0 million at January 31, 2022.
The gross profit percentage in our retail operations segment was 50.9% for the year ended January 31, 2022 compared to 33.6% for the same period last year.
The gross profit percentage in our retail operations segment was 49.9% for the year ended January 31, 2023 compared to 50.9% for the same period last year.
As of January 31, 2022, the Company was in compliance with these covenants. ​ As of January 31, 2022, we had no borrowings outstanding under the ABL credit agreement. The ABL Credit Agreement also includes amounts available for letters of credit.
As of January 31, 2023, the Company was in compliance with these covenants. ​ As of January 31, 2023, we had $80.1 million of borrowings outstanding under the ABL credit agreement. The ABL Credit Agreement also includes amounts available for letters of credit.
We and our 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”), by and among the Borrowers and the Loan Guarantors (each as defined therein) party thereto, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., in its capacity as the administrative agent thereunder.
We and certain of our subsidiaries (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”), by and among the Borrowers and the Loan Guarantors (each as defined therein) party thereto, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., in its capacity as the administrative agent thereunder.
Bass, Andrew Marc and Wilsons Leather. ​ 46 Table of Contents Trends ​ Industry Trends ​ Significant trends that affect the apparel industry include retail chains closing unprofitable stores, an increased focus by retail chains and others on expanding digital sales and providing convenience-driven fulfillment options, the continued consolidation of retail chains and the desire on the part of retailers to consolidate vendors supplying them. ​ We sell our products online through retail partners such as macys.com, nordstrom.com and dillards.com, each of which has a substantial online business.
Substantially all DKNY and Karl Lagerfeld Paris stores are operated as outlet stores. ​ 46 Table of Contents Trends Affecting Our Business ​ Industry Trends ​ Significant trends that affect the apparel industry include retail chains closing unprofitable stores, an increased focus by retail chains and others on expanding digital sales and providing convenience-driven fulfillment options, the continued consolidation of retail chains and the desire on the part of retailers to consolidate vendors supplying them. ​ We sell our products online through retail partners such as macys.com, nordstrom.com and dillards.com, each of which has a substantial online business.
The primary sources to meet our operating cash requirements have been borrowings under this credit facility and cash generated from operations. ​ We had no borrowings outstanding under our ABL Credit Agreement at each of January 31, 2022 and January 31, 2021.
The primary sources to meet our operating cash requirements have been borrowings under this credit facility and cash generated from operations. ​ We had $80.1 million of borrowings outstanding under our ABL Credit Agreement as of January 31, 2023 and no borrowings outstanding under the facility as of January 31, 2022.
The gross profit percentage in our wholesale operations segment was 34.2% for the year ended January 31, 2022 as compared to 35.9% for the year ended January 31, 2021.
The gross profit percentage in our wholesale operations segment was 32.6% for the year ended January 31, 2023 as compared to 34.2% for the year ended January 31, 2022.
Our effective tax rate was 26.2% in fiscal 2022 compared to 34.2% in the prior year.
Our effective tax rate was 2.7% in fiscal 2023 compared to 26.2% in the prior year.
(2) Includes: (a) $400.0 million related to our Notes that will mature in 2026, (b) $125.0 million in face principal amount of the note issued to LVMH payable in 2023, (c) $8.4 million in our various unsecured loans which have maturity dates ranging from 2025 through 2027 and requires us to make quarterly installment payments of €0.2 million and (d) $2.9 million in our various overdraft facilities.
(2) Includes: (a) $400.0 million related to our Notes that will mature in fiscal 2026, (b) $125.0 million in face principal amount of the note issued to LVMH payable in fiscal 2024, (c) $10.9 million in our various unsecured loans which have maturity dates ranging from fiscal 2026 through fiscal 2029 and requires us to make quarterly installment payments of €0.6 million and (d) $3.7 million in our various overdraft facilities, (d) $7.8 million in our foreign credit facilities and (e) $3.7 million in our overdraft facilities.
In addition to the amounts outstanding under these two loan agreements, at January 31, 2022 and 2021, we had $125.0 million of face value principal amount outstanding under the LVMH Note.
In addition to the amounts outstanding under these two loan agreements, at January 31, 2023 and 2022, we had $125.0 million of face value principal amount outstanding under the LVMH Note. The amount outstanding under the LVMH Note is scheduled to be repaid during fiscal 2024.
Wholesale revenues also include royalty revenues from license agreements related to our owned trademarks including DKNY, Donna Karan, Vilebrequin, G.H. Bass and Andrew Marc. ​ Our retail operations segment consists primarily of direct sales to consumers through our company-operated stores and through digital channels. In fiscal 2021, we restructured our retail operations, including the closure of our Wilsons Leather, G.H.
Wholesale revenues also include royalty revenues from license agreements related to our owned trademarks including DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Sonia Rykiel, G.H. Bass and Andrew Marc. ​ Our retail operations segment consists primarily of direct sales to consumers through our company-operated stores and through digital channels.
We cannot be certain that we will be able to obtain additional financing, if required, on acceptable terms or at all. ​ Recent Accounting Pronouncements ​ See Note 1.19 – Effects of Recently Adopted and Issued Accounting Pronouncements in the accompanying notes to our Consolidated Financial Statements in this Annual Report on Form 10-K for a description of recently adopted accounting pronouncements and issued accounting pronouncements that we believe may have an impact on our Consolidated Financial Statements when adopted. ​ ​ 58 Table of Contents Tabular Disclosure of Contractual Obligations ​ As of January 31, 2022, our contractual obligations were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due By Period ​ ​ ​ ​ ​ Less Than ​ ​ ​ ​ ​ ​ ​ More Than Contractual Obligations Total 1 Year 1-3 Years 4-5 Years 5 Years Operating lease obligations ​ $ 231.4 ​ $ 55.8 ​ $ 81.9 ​ $ 53.3 ​ $ 40.4 Minimum royalty payments (1) ​ ​ 269.4 ​ ​ 118.0 ​ ​ 124.5 ​ ​ 26.9 ​ ​ — Long-term debt obligations (2) ​ ​ 536.3 ​ ​ 4.2 ​ ​ 129.1 ​ ​ 402.7 ​ ​ 0.3 Purchase obligations (3) ​ ​ 10.0 ​ ​ 10.0 ​ ​ — ​ ​ — ​ ​ — Total ​ $ 1,047.1 ​ $ 188.0 ​ $ 335.5 ​ $ 482.9 ​ $ 40.7 (1) Includes obligations to pay minimum scheduled royalty, advertising and other required payments under various license agreements.
We cannot be certain that we will be able to obtain additional financing, if required, on acceptable terms or at all. ​ 59 Table of Contents Recent Accounting Pronouncements ​ See Note 1.19 – Effects of Recently Adopted and Issued Accounting Pronouncements in the accompanying notes to our consolidated financial statements in this Annual Report on Form 10-K for a description of recently adopted accounting pronouncements and issued accounting pronouncements that we believe may have an impact on our consolidated financial statements when adopted. ​ Tabular Disclosure of Contractual Obligations ​ As of January 31, 2023, our contractual obligations were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due By Period ​ ​ ​ ​ ​ Less Than ​ ​ ​ ​ ​ ​ ​ More Than Contractual Obligations Total 1 Year 1-3 Years 4-5 Years 5 Years Operating lease obligations ​ $ 318.1 ​ $ 70.4 ​ $ 116.9 ​ $ 77.4 ​ $ 53.4 Minimum royalty payments (1) ​ ​ 315.5 ​ ​ 127.5 ​ ​ 152.3 ​ ​ 35.7 ​ ​ — Long-term debt obligations (2) ​ ​ 627.4 ​ ​ 219.4 ​ ​ 405.1 ​ ​ 2.2 ​ ​ 0.7 Purchase obligations (3) ​ ​ 5.2 ​ ​ 5.2 ​ ​ — ​ ​ — ​ ​ — Total ​ $ 1,266.2 ​ $ 422.5 ​ $ 674.3 ​ $ 115.3 ​ $ 54.1 (1) Includes obligations to pay minimum scheduled royalty, advertising and other required payments under various license agreements.
We have also responded with the strategic acquisitions made by us and new license agreements entered into by us that added to our portfolio of licensed and proprietary brands and helped diversify our business by adding new product lines and expanding distribution channels.
We have also responded with the strategic acquisitions made by us, such as our recent purchase of the interests not owned by us that resulted in Karl Lagerfeld becoming our wholly-owned subsidiary, and new license agreements entered into by us that added to our portfolio of licensed and proprietary brands and helped diversify our business by adding new product lines and expanding distribution channels.
As of January 31, 2022, the Company had an aggregate outstanding balance of €7.4 million ($8.4 million) under these various unsecured loans. ​ Overdraft Facilities ​ During fiscal 2021, TRB entered into several overdraft facilities that allow for applicable bank accounts to be in a negative position up to a certain maximum overdraft.
As of January 31, 2023, the Company had an aggregate outstanding balance of €10.1 million ($10.9 million) under these various unsecured loans. ​ Overdraft Facilities ​ During fiscal 2021, T.R.B International SA (“TRB”), a subsidiary of Vilebrequin, entered into several overdraft facilities that allow for applicable bank accounts to be in a negative position up to a certain maximum overdraft.
We also sell Karl Lagerfeld Paris products on our website, www.karllagerfeldparis.com. In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos and have made a minority investment in an e-commerce retailer. ​ A number of retailers have experienced financial difficulties, which in some cases have resulted in bankruptcies, liquidations and/or store closings.
In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos and have made minority investments in two e-commerce retailers. ​ A number of retailers have experienced financial difficulties, which in some cases have resulted in bankruptcies, liquidations and/or store closings.
In addition, at any time prior to August 15, 2022, during any twelve month period, we may redeem up to 10% of the aggregate principal amount of the Notes at a redemption price equal to 103% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. ​ If we experience a Change of Control (as defined in the Indenture), we are 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 our ability and the ability of our restricted subsidiaries to incur or guarantee additional indebtedness, pay dividends or make other restricted payments, make certain investments, incur restrictions on the ability of our 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 our assets or enter into merger or consolidation transactions, and enter into transactions with affiliates.
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. ​ We 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 we experience a Change of Control (as defined in the Indenture), we are 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 our ability and the ability of our restricted subsidiaries to incur or guarantee additional indebtedness, pay dividends or make other restricted payments, make certain investments, incur restrictions on the ability of our 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 our assets or enter into merger or consolidation transactions, and enter into transactions with affiliates.
Share repurchases may take place on the open market, in privately negotiated transactions or by other means, and would be made in accordance with applicable securities laws. As of January 31, 2022, we had 2,293,149 authorized shares remaining under this program. In March 2022, the Board increased the number of authorized shares under this program to 10,000,000.
Share repurchases may take place on the open market, in privately negotiated transactions or by other means, and would be made in accordance with applicable 58 Table of Contents securities laws. As of January 31, 2023, we had 8,412,419 authorized shares remaining under this program.
We generated $185.8 million of cash from operating activities in fiscal 2022, primarily as a result of our net income of $200.6 million and non-cash charges relating 57 Table of Contents primarily to depreciation and amortization of $27.6 million, deferred income taxes of $21.1 million and share-based compensation of $17.4 million.
These items were offset, in part, by non-cash charges relating primarily to asset impairments and gain on lease terminations of $349.7 million, share-based compensation of $32.5 million and depreciation and amortization of $27.8 million. ​ We generated $185.8 million of cash from operating activities in fiscal 2022, primarily as a result of our net income of $200.6 million and non-cash charges relating primarily to depreciation and amortization of $27.6 million, deferred income taxes of $21.1 million and share-based compensation of $17.4 million.
Pursuant to this program, during fiscal 2022 we acquired 656,213 of our shares of common stock for an aggregate purchase price of $17.3 million and during fiscal 2020 we acquired 1,327,566 of our shares of common stock for an aggregate purchase price of $35.2 million. No shares of common stock were acquired pursuant to this program during fiscal 2021.
Pursuant to this program, during fiscal 2023 we acquired 1,587,581 of our shares of common stock for an aggregate purchase price of $26.9 million and during fiscal 2022 we acquired 656,213 of our shares of common stock for an aggregate purchase price of $17.3 million.
This discount is being amortized as interest expense using the effective interest method over the term of the LVMH Note. ​ In connection with the issuance of the LVMH Note, LVMH entered into (i) a subordination agreement providing that our obligations under the LVMH Note are subordinate and junior to our obligations under the revolving credit facility and Term Loan and (ii) a pledge and security agreement with us and our subsidiary, G-III Leather, pursuant to which we and G-III Leather granted to LVMH a security interest in specified collateral to secure our payment and performance of our obligations under the LVMH Note that is subordinate and junior to the security interest granted by us with respect to our obligations under the revolving credit facility and Term Loan. ​ ​ 56 Table of Contents Unsecured Loans ​ During fiscal 2020 and fiscal 2021, T.R.B International SA (“TRB”), a subsidiary of Vilebrequin, borrowed funds under several unsecured loans.
This discount is being amortized as interest expense using the effective interest method over the term of the LVMH Note. ​ In connection with the issuance of the LVMH Note, LVMH entered into (i) a subordination agreement providing that our obligations under the LVMH Note are subordinate and junior to our obligations under the revolving credit facility and Term Loan and (ii) a pledge and security agreement with us and our subsidiary, G-III Leather, pursuant to which we and G-III Leather granted to LVMH a security interest in specified collateral to secure our payment and performance of our obligations under the LVMH Note that is subordinate and junior to the security interest granted by us with respect to our obligations under the revolving credit facility and Term Loan. ​ ​ ​ 57 Table of Contents Unsecured Loans ​ Several of our 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.
These valuations require management to make significant estimations and assumptions, especially with respect to intangible assets. ​ The fair values assigned to the identifiable intangible assets acquired were based on assumptions and estimates made by management using unobservable inputs reflecting our own assumptions about the inputs that market participants would use in pricing the asset or liability based on the best information available. ​ We performed our annual tests of our wholesale reporting unit and our indefinite-lived trademarks as of January 31, 2022, 2021 and 2020 and determined that no impairment existed at those dates.
These valuations require management to make significant estimations and assumptions, especially with respect to intangible assets. ​ The fair values assigned to the identifiable intangible assets acquired were based on assumptions and estimates made by management using unobservable inputs reflecting our own assumptions about the inputs that market participants would use in pricing the asset or liability based on the best information available. ​ Fiscal 2023 Annual Goodwill Impairment Testing ​ We performed our annual test of our wholesale reporting unit as of January 31, 2023 by electing to bypass the qualitative assessment and proceed directly to the quantitative impairment test using a discounted cash flows method to estimate the fair value of our wholesale reporting unit.
As of January 31, 2022, TRB had an aggregate €2.6 million ($2.9 million) drawn under these various facilities. ​ Outstanding Borrowings ​ Our primary operating cash requirements are to fund our seasonal buildup in inventories and accounts receivable, primarily during the second and third fiscal quarters each year.
As of January 31, 2023, KLH had €7.3 million ($7.8 million) of borrowings outstanding under this credit facility. ​ Outstanding Borrowings ​ Our primary operating cash requirements are to fund our seasonal buildup in inventories and accounts receivable, primarily during the second and third fiscal quarters each year.
Upon repayment of the Term Loan, these debt issuance costs were fully extinguished and charged to interest expense in our results of operations. ​ Second Amended and Restated ABL Credit Agreement ​ In August 2020, our 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.
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, our 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.
As digital sales of apparel continue to increase, we are developing additional digital marketing initiatives on our websites and through social media. We are investing in digital personnel, marketing, logistics, planning, distribution and other strategic opportunities to expand our digital footprint. Our digital business consists of our own web platforms at www.dkny.com, www.donnakaran.com, www.ghbass.com, www.vilebrequin.com, www.andrewmarc.com, www.wilsonsleather.com and www.soniarykiel.com.
As sales of apparel through digital channels continue to increase, we are developing additional digital marketing initiatives on both our web sites and third party web sites and through social media. We are investing in digital personnel, marketing, logistics, planning, distribution and other strategic opportunities to expand our digital footprint.
Accordingly, the results of Vilebrequin, KLNA, KLH and Fabco are and will be included in our financial statements for the year ended or ending closest to G-III’s fiscal year. For example, for G-III’s fiscal year ended January 31, 2022, the results of Vilebrequin, KLNA, KLH and Fabco are included for the year ended December 31, 2021.
(“Fabco”) and Sonia Rykiel, which we purchased in October 2021, report results on a calendar year basis rather than on the January 31 fiscal year basis used by G-III. Accordingly, the results of Vilebrequin, KLH, Fabco and Sonia Rykiel are and will be included in our financial statements for the year ended or ending closest to G-III’s fiscal year.
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. ​ The revolving credit facility contains covenants that, among other things, restrict our ability, subject to specified exceptions, to 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.
As of January 31, 2023, interest under the ABL Credit Agreement was being paid at an average rate of 5.31% per annum. ​ The revolving credit facility contains covenants that, among other things, restrict our ability, subject to specified exceptions, to 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.
Our ability to continuously evaluate and respond to changing consumer demands and tastes, across multiple market segments, distribution channels and geographic areas is critical to our success. Although our portfolio of brands is aimed at diversifying our risks in this regard, misjudging shifts in consumer preferences could have a negative effect on our business.
Although our portfolio of brands is aimed at diversifying our risks in this regard, misjudging shifts in consumer preferences could have a negative effect on our business.
We also had €2.6 million ($2.9 million) and €2.5 million ($3.0 million) outstanding under Vilebrequin’s overdraft facilities as of January 31, 2022 and January 31, 2021, respectively. ​ Share Repurchase Program ​ Our Board of Directors authorized a share repurchase program of 5,000,000 shares.
We also had €3.4 million ($3.7 million) and €2.6 million ($2.9 million) outstanding under Vilebrequin’s overdraft facilities as of January 31, 2023 and January 31, 2022, respectively and €7.3 million ($7.8 million) outstanding under our foreign credit facility as of January 31, 2023. ​ Share Repurchase Program ​ In March 2022, our Board of Directors authorized an increase in the number of shares covered by our share repurchase program to an aggregate amount of 10,000,000 shares.
We have also accelerated production schedules to allow for longer lead times in anticipation of the aforementioned delays. ​ Critical Accounting Estimates ​ The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period.
These implications of the war in Ukraine could have a material adverse effect on our business and our results of operations. ​ Critical Accounting Estimates ​ The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period.
Bass and Calvin Klein Performance stores. After completion of the restructuring, our retail operations segment consists of our DKNY and Karl Lagerfeld Paris stores, as well as the digital channels for DKNY, Donna Karan, Karl Lagerfeld Paris, G.H.
Our company-operated stores 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.
The extent to which COVID-19 impacts our results will depend on continued developments in the public and private responses to the pandemic and the success and efficacy of efforts in the United States and around the world to vaccinate people against COVID-19.
The extent to which COVID-19 impacts our results will depend on continued developments in the United States and around the world in the public and private responses to the pandemic. New information may emerge concerning the severity of the outbreak and the spread of variants of the COVID-19 virus in locations that are important to our business.
For example, our fiscal year ended January 31, 2022 is referred to as “fiscal 2022.” ​ We consolidate the accounts of all of our wholly-owned subsidiaries. Fabco Holding B.V. (“Fabco”) is a Dutch joint venture limited liability company that was 49% owned by us through November 30, 2020.
For example, our fiscal year ended January 31, 2023 is referred to as “fiscal 2023.” ​ We consolidate the accounts of all of our wholly-owned and majority-owned subsidiaries. Karl Lagerfeld Holding B.V.
We also made payments of $13.6 million in financing costs related to the issuance of our Notes and entering into the ABL Credit Agreement. ​ Financing Needs ​ We believe that our cash on hand and cash generated from operations, together with funds available under the ABL Credit Agreement, are sufficient to meet our expected operating and capital expenditure requirements.
We used $17.3 million of cash to repurchase 656,213 shares of our common stock under our share repurchase program and $4.3 million for taxes paid in connection with net share settlements of stock grants that have vested. ​ Financing Needs ​ We believe that our cash on hand and cash generated from operations, together with funds available under the ABL Credit Agreement, are sufficient to meet our expected operating and capital expenditure requirements.
These items were offset, in part, by increases of $112.8 million in accounts receivable and $95.7 million in inventories, as well as decreases of $12.6 million in customer refund liabilities. ​ At January 31, 2021, we had cash and cash equivalents of $351.9 million.
These items were offset, in part, by increases of $112.8 million in accounts receivable and $95.7 million in inventories, as well as decreases of $12.6 million in customer refund liabilities. ​ Cash from Investing Activities ​ In fiscal 2023, we used $218.0 million of cash in investing activities primarily as a result of cash paid, net of cash acquired, of $168.6 million for the acquisition of KLH.
We are working diligently to satisfy this demand from our retail partners and consumers. ​ We have attempted to respond to general trends in our industry by continuing to focus on selling products with recognized brand equity, by attention to design, quality and value and by improving our sourcing capabilities.
Exclusive brands are only made available to a specific retailer, and thus customers loyal to their brands can only find them in the stores of that retailer. ​ We have attempted to respond to general trends in our industry by continuing to focus on selling products with recognized brand equity, by attention to design, quality and value and by improving our sourcing capabilities.
We believe that our current income tax rate is more representative of what we expect our prospective effective rate will be based on our current income and applicable federal, state and foreign income tax rates. ​ Liquidity and Capital Resources ​ Cash Availability ​ We rely on our cash flows generated from operations, cash and cash equivalents and the borrowing capacity under our revolving credit facility to meet the cash requirements of our business.
This decrease in our effective tax rate is primarily due to the goodwill impairment charges which significantly decreased pretax book income in relation to tax expense. ​ Liquidity and Capital Resources ​ Cash Availability ​ We rely on our cash flows generated from operations, cash and cash equivalents and the borrowing capacity under our revolving credit facility to meet the cash requirements of our business.
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 ​ We issued to LVMH, as a portion of the consideration for the acquisition of DKNY and Donna Karan, a junior lien secured promissory note in favor of LVMH in the principal amount of $125 million (the “LVMH Note”) that bears interest at the rate of 2% per year. $75 million of the principal amount of the LVMH Note is due and payable on June 1, 2023 and $50 million of such principal amount is due and payable on December 1, 2023. ​ Based on an independent valuation, it was determined that the LVMH Note should be treated as having been issued at a discount of $40 million in accordance with ASC 820 — Fair Value Measurements .
We do not expect a material change to our interest expense or results of operations from the change in the reference rate used for our ABL Credit Agreement. ​ LVMH Note ​ We issued to LVMH, as a portion of the consideration for the acquisition of DKNY and Donna Karan, a junior lien secured promissory note in favor of LVMH in the principal amount of $125 million (the “LVMH Note”) that bears interest at the rate of 2% per year. $75 million of the principal amount of the LVMH Note is due and payable on June 1, 2023 and $50 million of such principal amount is due and payable on December 1, 2023.
We have increased the portfolio of brands we offer through licenses, acquisitions and joint ventures. Consumer recognition of our five power brands, two of which we own and three of which we license, is worldwide and very strong.
We have increased the portfolio of brands we offer through licenses, acquisitions and joint ventures.
It is our objective to continue to expand our product offerings and we are continually discussing new licensing opportunities with brand owners and seeking to acquire established brands. ​ Recent Developments ​ Impact of COVID-19 ​ The COVID-19 pandemic has affected businesses around the world since the first quarter of fiscal 2021.
It is our objective to continue to expand our product offerings and we are continually discussing new licensing opportunities with brand owners and seeking to acquire established brands. ​ Recent Developments ​ Calvin Klein and Tommy Hilfiger License Extensions ​ In November 2022, we announced the extension of the licenses for Calvin Klein and Tommy Hilfiger products.
In addition, the prior year also experienced higher depreciation and amortization due to write-offs taken in connection with the reduction in the number of retail stores operated by us and store asset disposals as a result of the retail restructuring. ​ In fiscal 2022, we recorded a $1.5 million impairment charge, net of gain on lease terminations, 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.
In fiscal 2022, we recorded $1.5 million of asset impairments and gain on lease terminations 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. ​ 54 Table of Contents Other income was $27.9 million in fiscal 2023 compared to other income of $9.5 million in fiscal 2022.
We used $17.3 million of cash to repurchase 656,213 shares of our common stock under our share repurchase program and $4.3 million for taxes paid in connection with net share settlements of stock grants that have vested. ​ In fiscal 2021, we generated $94.8 million of cash from financing activities primarily as a result of the proceeds of $400 million from the issuance of our Notes partially offset by the $300 million repayment of our term loan facility from the proceeds of the Notes.
These borrowings were also offset, in part, by $26.9 million of cash used to repurchase 1,587,581 shares of our common stock under our share repurchase program and $9.8 million for taxes paid in connection with net share settlements of stock grants that have vested. ​ In fiscal 2022, we used $23.4 million of cash in financing activities.
Net sales from our DKNY and Karl Lagerfeld Paris stores, which constitute our retail operations segment, increased by $39.1 million during the year ended January 31, 2022 compared to last year. ​ Gross profit was $988.2 million, or 35.7% of net sales, for fiscal 2022 and compared to $744.4 million, or 36.2% of net sales, last year.
Our Karl Lagerfeld Paris retail stores performed better than our DKNY retail stores, as our DKNY stores were adversely impacted by decreased tourism and spending from consumers in China. ​ Gross profit was $1.1 billion, or 34.1% of net sales, for fiscal 2023 and compared to $988.2 million, or 35.7% of net sales, last year.
Bass stores, primarily due to the retail restructuring, as well as at certain DKNY and Vilebrequin stores as a result of the performance at these stores. ​ In fiscal 2020, we recorded a $21.8 million impairment charge primarily related to leasehold improvements, furniture and fixtures and operating lease assets at certain of our Wilsons Leather, G.H.
This charge is primarily comprised of (i) a $347.2 million goodwill impairment charge as a result of our decline in our stock price and (ii) a $2.7 million impairment charge 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.
However, the COVID-19 pandemic could continue to adversely impact our business operations and results of operations. ​ The continued impact of the COVID-19 pandemic on our business operations remains uncertain and cannot be predicted.
While we have planned for a certain amount of promotional activity, additional promotional activity in excess of what we have planned for could have an adverse effect on our results of operations. ​ Impact of COVID-19 ​ The continued impact of the COVID-19 pandemic on our business operations remains uncertain and cannot be predicted.
This increase is primarily the result of a $207.9 million increase in net sales of our DKNY and Donna Karan products, a $193.6 million increase in net sales of Calvin Klein products, a $109.0 million increase in net sales of Tommy Hilfiger products and a $73.1 million increase in net sales of Karl Lagerfeld Paris products.
This increase is primarily the result of a $131.7 million increase in net sales of Calvin Klein licensed products, $130.4 million in net sales resulting from the inclusion of the results of the recently acquired Karl Lagerfeld business for seven months of fiscal 2023, a $32.4 million increase in net sales of Karl Lagerfeld Paris products, an $18.6 million increase in net sales of our DKNY and Donna Karan products and a $14.5 million increase in net sales of Tommy Hilfiger licensed products.
In addition, fiscal 2021 also had other income of $2.7 million related to the increased equity interest we acquired in Fabco. ​ Interest and financing charges, net for fiscal 2022, were $49.7 million compared to $50.4 million for fiscal 2021.
Other loss in the current period consisted of $4.7 million of foreign currency losses during fiscal 2023 compared to $2.6 million in fiscal 2022. ​ Interest and financing charges, net for fiscal 2023, were $56.6 million compared to $49.7 million for fiscal 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+1 added−1 removed5 unchanged
Biggest changeWe borrow under this credit facility to support general corporate purposes, including capital expenditures and working capital needs. Interest rates are expected to increase in fiscal 2023. The U.S. Federal Reserve Board recently increased interest rates for the first time since 2018. It is expected to approve additional increases in the interest rate in fiscal 2023.
Biggest changeWe borrow under this credit facility to support general corporate purposes, including capital expenditures and working capital needs. The U.S. Federal Reserve Board increased interest rates multiple times in fiscal 2023 and is expected to approve additional 60 Table of Contents increases in the interest rate in fiscal 2024.
These increases in interest rates by the Federal Reserve will result in increases in our interest expense under our ABL Credit Agreement. ​ Although we had no borrowings under our ABL Credit Agreement during the year ended January 31, 2022, we estimate that each 100 basis point increase in our borrowing rates would result in additional interest expense to us of approximately $1 million for each $100 million outstanding our ABL Credit Agreement. ​
These increases in interest rates by the Federal Reserve will result in increases in our interest expense under our ABL Credit Agreement. ​ Based on the outstanding balance of our ABL Credit Agreement during the year ended January 31, 2023, we estimate that each 100 basis point increase in our borrowing rates would result in additional interest expense to us of approximately $1 million for each $100 million outstanding our ABL Credit Agreement. ​
Removed
Although we do not believe that inflation has had a material impact on our financial position or results of operations in recent periods, our business could be impacted by continued or increasing inflation in future periods.
Added
We experienced increased costs in many aspects of our business during fiscal 2023. We implemented price increases on many of our products. Our price increases were an effort to mitigate the effect of higher costs. We expect inflationary pressures to continue to impact our business throughout fiscal 2024.

Other GIII 10-K year-over-year comparisons