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What changed in G III APPAREL GROUP LTD /DE/'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of G III APPAREL GROUP LTD /DE/'s 2023 and 2024 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 2024 report.

+467 added−451 removedSource: 10-K (2024-03-25) vs 10-K (2023-03-27)

Top changes in G III APPAREL GROUP LTD /DE/'s 2024 10-K

467 paragraphs added · 451 removed · 321 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

105 edited+74 added−54 removed57 unchanged
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.
Biggest changeFirst deliveries of Champion product are expected for the Fall 2024 season. ​ ​ ​ ​ ​ ​ ​ 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 Champion (men's and women's outerwear) ​ December 31, 2028 ​ December 31, 2033 Cole Haan (Men's and women's outerwear) ​ December 31, 2028 ​ December 31, 2030 Dockers (Men's outerwear) ​ November 30, 2024 ​ None Halston (men's and women's apparel) ​ December 31, 2028 ​ December 31, 2048 Kenneth Cole NY/Reaction Kenneth Cole (Men's and women's outerwear) ​ December 31, 2027 ​ None Levi's (Men's and women's outerwear) ​ November 30, 2027 ​ None Margaritaville (Men's and women's apparel) ​ December 31, 2025 ​ December 31, 2030 Nautica (Women's sportswear, jeanswear, tailored clothing and dresses) ​ December 31, 2028 ​ December 31, 2043 Tommy Hilfiger (Men's and women's outerwear) ​ December 31, 2025 ​ None Tommy Hilfiger (Luggage) ​ December 31, 2027 ​ None Tommy Hilfiger (Women's sportswear) ​ December 31, 2025 ​ None Tommy Hilfiger (Women's dresses) ​ December 31, 2026 ​ None Tommy Hilfiger (Women's suits) ​ December 31, 2026 ​ December 31, 2029 Tommy Hilfiger x Leagues ​ December 31, 2025 ​ None Vince Camuto (Women's dresses) ​ December 31, 2025 ​ None Team Sports Licenses ​ ​ ​ ​ Collegiate Licensing Company ​ December 31, 2024 ​ None Major League Baseball ​ December 31, 2027 ​ None National Basketball Association ​ September 30, 2025 ​ None National Football League ​ March 31, 2028 ​ None National Hockey League ​ June 30, 2025 ​ None Starter ​ December 31, 2029 ​ December 31, 2039 ​ ​ 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. ​ 9 Table of Contents 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.
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 continue to focus on 7 Table of Contents 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.
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.
Our leadership team has demonstrated experience in successfully acquiring, managing, integrating and positioning new businesses having completed over 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.
The second half of the year is expected to continue to provide a larger amount of our net sales and a substantial majority of our net income for the foreseeable future. ​ Trademarks ​ We own some of the trademarks used by us in connection with our wholesale operations segment, as well as almost all of the trademarks used in our retail operations segment.
The second half of our fiscal year is expected to continue to provide a larger amount of our net sales and a substantial majority of our net income for the foreseeable future. ​ Trademarks ​ We own some of the trademarks used by us in connection with our wholesale operations segment, as well as almost all of the trademarks used in our retail operations segment.
This acquisition represents a significant opportunity to expand our international growth by further developing our European-based brands, which also include Vilebrequin and Sonia Rykiel. We believe that Karl Lagerfeld’s existing digital channel presence could enable us to enhance our omni-channel business and further accelerate our digital initiatives.
This acquisition represents a significant opportunity to expand our international presence by further developing our European-based brands which also include Vilebrequin and Sonia Rykiel. We believe that Karl Lagerfeld’s existing digital channel presence could enable us to enhance our omni-channel business and further accelerate our digital initiatives.
We expect to continue to expand with store openings in global key markets and reinforce the luxury status of Vilebrequin with immersive brand experiences. ​ Sonia Rykiel ​ In October 2021, we purchased European luxury fashion brand Sonia Rykiel. Sonia Rykiel, who created this well-known brand, was one of the leading figures of Parisian fashion.
We expect to continue to expand with store openings in global key markets and reinforce the luxury status of Vilebrequin through immersive brand experiences. ​ Sonia Rykiel ​ In October 2021, we purchased European luxury fashion brand Sonia Rykiel. Sonia Rykiel, who created this well-known brand, was one of the leading figures of Parisian fashion.
We currently license our proprietary brands in a variety of categories and continue to seek new licensing opportunities to broaden the reach of these brands. ​ We have strong relationships with category leading license partners, including, but not limited to, Fossil, Marchon, Komar and Inter Parfums.
We currently license our proprietary brands in a variety of categories and continue to seek new licensing opportunities to broaden the reach of these brands. ​ We have strong relationships with category leading license partners, including, but not limited to, Marchon, Komar and Inter Parfums.
Inspired by Karl Lagerfeld’s own passion for collaboration, we regularly foster partnerships with top tier tastemakers and icons. Our campaigns for the Karl Lagerfeld brand are intended to grow awareness across our retail, digital, wholesale and franchise channels.
Inspired by Karl Lagerfeld’s own passion for collaboration, we regularly foster partnerships with top tier artists, tastemakers and icons. Our campaigns for the Karl Lagerfeld brand are intended to grow awareness across our retail, digital, wholesale and franchise channels.
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 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, Karl Lagerfeld Paris, Vilebrequin, G.H. Bass & Co., Eliza J, Jessica Howard, Andrew Marc, Marc New York, Wilsons Leather and Sonia Rykiel.
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.
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 sales of our products in an omni-channel environment.
Our digital business for our retail operations segment consists of our own web platforms at www.dkny.com, www.donnakaran.com, www.karllagerfeldparis.com, www.ghbass.com, www.andrewmarc.com and www.wilsonsleather.com.
Our digital business for our retail operations segment consists of our own web platforms at www.dkny.com, www.donnakaran.com, www.karllagerfeldparis.com, www.ghbass.com and www.wilsonsleather.com.
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. ​ 8 Table of Contents In March 2023, we announced the signing of a long-term license with Authentic Brands Group for the Nautica brand in North America.
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. ​ 8 Table of Contents In March 2023, we announced the signing of a long-term license with Authentic Brands Group for women’s apparel under the Nautica brand in North America.
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. ​ We believe there are significant opportunities to enhance the digital business of DKNY and Donna Karan, prudently manage the retail store base for DKNY over the long term and capitalize on our industry relationships in seeking premium placement for DKNY and Donna Karan product categories in department and other retail stores globally. ​ 10 Table of Contents Karl Lagerfeld ​ In May 2022, we acquired the remaining interests in the Karl Lagerfeld fashion brand that we did not own.
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. ​ We believe there are significant opportunities to enhance the digital business of DKNY and Donna Karan, prudently manage the retail store base for DKNY over the long term and capitalize on our industry relationships in seeking premium placement for DKNY and Donna Karan product categories in department and other retail stores globally. ​ Karl Lagerfeld ​ In May 2022, we acquired the remaining interests in the Karl Lagerfeld fashion brand that we did not own.
We will produce across a number of categories, starting with jeans then expanding in a phased approach into additional categories including sportswear, suit separates and dresses. The new five-year license agreement, effective beginning in January 2024, includes three extensions, for five years each.
We will produce across a number of categories, starting with jeans then expanding in a phased approach into additional categories including sportswear, suit separates and dresses. The new five-year license agreement, effective as of January 2024, includes three extensions for five years each.
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 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 channels and geographies ​ After acquiring the brands in December 2016, we initially focused on re-positioning and re-launching the DKNY brand.
In the course of our attempt to expand into foreign markets, we may experience conflicts with various third parties who have acquired ownership rights in certain trademarks that would impede our use and registration of some of our trademarks. Such conflicts may arise from time to time as we pursue international expansion.
Our attempt to expand into foreign markets, we may experience conflicts with various third parties who have acquired ownership rights in certain trademarks that would impede our use and registration of some of our trademarks. Such conflicts may arise from time to time as we pursue international expansion.
We continue 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. ​ Karl Lagerfeld’s marketing efforts are inspired by Karl Lagerfeld’s own mantra: “embrace the present and invent the future.” We continuously seek to share relevant and engaging content, with a focus on digital content.
We continue 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. ​ Karl Lagerfeld’s marketing efforts are inspired by Karl Lagerfeld’s own mantra: “embrace the present and invent the future.” We continuously seek to share relevant and engaging content, with a focus on high impact campaigns and digital content.
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.
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 ​ Kenneth Cole ​ National Basketball Association Nautica ​ Halston ​ National Hockey League Halston ​ Champion ​ IMG Collegiate Licensing Company Champion ​ Cole Haan ​ Starter Kenneth Cole ​ Levi's ​ ​ Cole Haan ​ Dockers ​ ​ Levi's ​ Margaritaville ​ ​ Vince Camuto ​ ​ ​ ​ Margaritaville ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proprietary Brands ​ DKNY ​ G-III Sports by Carl Banks DKNY ​ Karl Lagerfeld ​ G-III for Her Donna Karan ​ Karl Lagerfeld Paris ​ ​ Karl Lagerfeld ​ Andrew Marc ​ ​ Karl Lagerfeld Paris ​ Marc New York ​ ​ Andrew Marc ​ Vilebrequin ​ ​ Marc New York ​ G.
In fiscal 2023, we acquired the remaining interests in the Karl Lagerfeld fashion brand which grew our European business and added new international expertise. In fiscal 2022, we purchased European luxury 5 Table of Contents fashion brand Sonia Rykiel. We own Vilebrequin, a premier provider of status swimwear, resort wear and related accessories that was founded in Europe.
In fiscal 2023, we acquired the remaining interests in the Karl Lagerfeld fashion brand which grew our European business and added new international expertise. In fiscal 2022, we purchased European luxury fashion brand Sonia Rykiel. We own Vilebrequin, a premier provider of status swimwear, resort wear and related accessories that was founded in Europe.
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.
For example, our fiscal year ended January 31, 2024 is referred to as “fiscal 2024.” ​ G-III Apparel Group, Ltd. is a Delaware corporation that was formed in 1989.
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.
In our most significant acquisition to date, we acquired Donna Karan International, which owns DKNY and Donna Karan, two of the world’s most iconic and recognizable 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.
Its portfolio of accessible, aspirational collections includes ready-to-wear apparel for women, men and children, as well as handbags and small leather goods. Licensed collections include watches, eyewear, footwear, perfumes, candles and fashion jewelry. As of January 31, 2023, Karl Lagerfeld products are distributed through more than 200 stores worldwide, including 62 company-operated stores, located primarily internationally and through digital channels.
Its portfolio of accessible, aspirational collections includes ready-to-wear apparel for women, men and children, as well as handbags and small leather goods. Licensed collections include watches, eyewear, footwear, perfumes, candles and fashion jewelry. As of January 31, 2024, Karl Lagerfeld products are distributed through more than 200 stores worldwide, including 70 company-operated stores, located primarily internationally and through digital channels.
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.
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 22.5% of our net sales in fiscal 2024, 19.1% of our net sales in fiscal 2023 and 14.5% of our net sales in fiscal 2022. ​ 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 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 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 our HR team focused on hiring, developing and retaining talent.
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.
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.
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.
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 ​ 73 ​ Chairman of the Board, Chief Executive Officer and Director Sammy Aaron ​ 64 ​ Vice Chairman, President and Director Neal S.
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 act as licensee of certain trademarks owned by third parties that 19 Table of Contents are used in connection with our business. The principal brands that we license are summarized under the heading “Wholesale Operations – Licensed Products” above.
We assume the risk of loss predominantly on a Freight-On-Board (F.O.B.) basis when goods are delivered to a shipper and are insured against casualty losses arising during shipping. ​ As is customary, we have not entered into any long-term contractual arrangements with any contractor or manufacturer.
We assume the risk of loss predominantly on a Freight-On-Board (F.O.B.) basis when goods are delivered to a shipper and are insured against losses arising during shipping. ​ We have not entered into any long-term contractual arrangements with any contractor or manufacturer.
We believe we have developed a significant customer following and positive reputation in the industry as a result of, among other things, our standards of quality control, on-time delivery, competitive pricing and willingness and ability to assist customers in their merchandising of our products. ​ As digital sales of apparel continue to increase, we are developing initiatives to increase our digital presence through our own websites and through the websites of our retail partners.
We believe we have developed a significant customer following and positive reputation in the industry as a result of, among other things, our standards of quality control, on-time delivery, competitive pricing and willingness and ability to assist customers in their merchandising of our products. ​ As digital sales of apparel continue to be an important part of our business, we are developing initiatives to increase our digital presence through our own websites and through the websites of our retail partners.
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.
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.
Bass, Andrew Marc, Wilsons Leather and Sonia Rykiel businesses. ​ We operate in fashion markets that are intensely competitive. 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.
Bass, Wilsons Leather and Sonia Rykiel brands. ​ We operate in fashion markets that are intensely competitive. 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.
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 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 believe that the production capacity of foreign manufacturers with which we have developed, or are developing, a relationship is adequate to meet our production requirements for the foreseeable future.
We believe that the production capacity of each foreign manufacturer with which we have developed, or are developing, a relationship is adequate to meet our production requirements for the foreseeable future.
As economic conditions waver and consumer trends change, we believe that our deep-rooted relationships across the retail landscape, diversified brands serving all types of consumers and our product portfolio mix that covers all price points allow us to operate on a flexible and advantageous basis. ​ Experienced management team.
As economic conditions waver and consumer trends change, we believe that our deep-rooted relationships across the retail landscape, diversified brands serving a wide range of consumers and our product portfolio mix that covers a broad mix of price points allow us to operate on a flexible and advantageous basis. ​ Experienced management team.
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.
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, Vilebrequin, Karl Lagerfeld, Karl Lagerfeld Paris, 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.
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, fragrances, children’s clothing, eyewear and tech accessories.
In addition to their contractual obligations, we evaluate our suppliers' compliance with our Vendor Code of Conduct through audits conducted both by our employees and third-party compliance auditing firms. ​ Human Capital ​ Our People ​ As of January 31, 2023, we employed approximately 3,600 persons on a full-time basis and approximately 1,100 on a part-time basis.
In addition to their contractual obligations, we evaluate our suppliers' compliance with our Vendor Code of Conduct through audits conducted both by our employees and third-party compliance auditing firms on an annual basis. ​ Human Capital ​ Our People ​ As of January 31, 2024, we employed approximately 3,500 persons on a full-time basis and approximately 1,100 on a part-time basis.
Additionally, we continued our partnership with UNCF (“United Negro College Fund”) by sponsoring four enriching and rewarding student internships. These interns were provided room and board at FIT. They participated in a program that consisted of educational master class sessions and experienced New York theatre and other local programs.
Additionally, we continued our partnership with UNCF (“United Negro College Fund”) by sponsoring two enriching and rewarding student internships. These interns were provided room and board at FIT. They participated in a program that consisted of educational master class sessions and experienced New York theatre and other local programs. In addition, we funded two scholarships through UNCF.
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.
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 and Costco.
Net sales of products under the Calvin Klein and Tommy Hilfiger brands constituted approximately 48.0% of our net sales in fiscal 2023 and approximately 50.7% of our net sales in fiscal 2022. ​ In November 2022, we announced the extension of licenses for Calvin Klein and Tommy Hilfiger products.
Net sales of products under the Calvin Klein and Tommy Hilfiger brands constituted approximately 41.0% of our net sales in fiscal 2024 and approximately 48.0% of our net sales in fiscal 2023. ​ In November 2022, we announced the extension of licenses for Calvin Klein and Tommy Hilfiger products.
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.
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 59% of our net sales in fiscal 2024, 60% of our net sales in fiscal 2023 and 64% of our net sales in fiscal 2022.
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, 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, tech accessories and rugs. ​ We have 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.
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.
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 19.2% of our net sales in fiscal 2024, 21.6% of our net sales in fiscal 2023 and 23.9% of our net sales in fiscal 2022.
We have not experienced any interruption of our operations due to a labor disagreement with our employees. ​ We are an Equal Opportunity Employer with policies, procedures and practices that recognize the value and worth of each individual, covering matters such as safety, training, advancement, discrimination, harassment and retaliation. We provide training on important issues to our personnel.
We have not experienced any interruption of our operations due to a labor disagreement with our employees. ​ 14 Table of Contents We are an Equal Opportunity Employer with policies, procedures and practices that recognize the value and worth of each individual, covering matters such as safety, training, advancement, discrimination, harassment and retaliation.
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 also source and sell products to major retailers for their own private label programs. ​ 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, Burlington and Costco.
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.
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.
We are now focused on the re-positioning and expansion of the brand for Spring 2024. The new Donna Karan will be a modern system of dressing created to appeal to a woman’s senses on every level, addressing the full lifestyle needs of a new consumer.
We are now focused on the re-positioning and expansion of the brand with first deliveries made for Spring 2024. The new Donna Karan is a modern system of dressing created to appeal to a woman’s senses on every level, addressing the full lifestyle needs of a new consumer.
Our licensing 11 Table of Contents program has significantly increased as a result of owning the DKNY, Donna Karan and Karl Lagerfeld brands.
Our licensing program has significantly increased as a result of owning the DKNY, Donna Karan and Karl Lagerfeld and Karl Lagerfeld Paris brands.
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.
Wholesale revenues also include revenues from license agreements related to our owned trademarks including DKNY, Donna Karan, Karl Lagerfeld, G.H. Bass, Andrew Marc, Vilebrequin and Sonia Rykiel. ​ Our retail operations segment consists primarily of direct sales to consumers through our company-operated stores and product sales through our digital sites for the DKNY, Donna Karan, Karl Lagerfeld Paris, G.H.
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.
Our DKNY stores offer a large range of products including sportswear, dresses, outerwear, handbags, footwear and athleisure apparel. ​ 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.
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. ​ 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 sites for our DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin, G.H.
We are planning to introduce a G-III Master Class training library in fiscal 2024 that will make these sessions and other educational tools accessible to our employees. ​ Through our aggressive recruiting, we have been able to bring in best-in-class talent.
We have procured a training solution program that will incorporate a G-III Master Class training library that will make these sessions and other educational tools accessible to our employees. ​ Through our aggressive recruiting, we have been able to bring in best-in-class talent.
In fiscal 2023, we will continue to support UNCF by providing students the opportunity to gain firsthand experience working at G-III. ​ Diversity, Equity and Inclusion are at the heart of G-III’s values. We strive to create a workplace with opportunities for all.
In fiscal 2025, we will continue to support our diversity efforts by working directly with Historically Black Colleges and Universities by providing two students the opportunity to gain firsthand experience working at G-III. ​ Diversity, Equity and Inclusion are at the heart of G-III’s values. We strive to create a workplace with opportunities for all.
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.
Bass, 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 70.1% of our net sales in fiscal 2024, 74.2% of our net sales in fiscal 2023 and 78.0% of our net sales in fiscal 2022.
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 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 a global network of independent, third-party manufacturers, primarily located in Asia.
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.
Sales to TJX Companies accounted for an aggregate of 13.6% of our net sales in fiscal 2024, 15.4% of our net sales in fiscal 2023 and 14.8% of our net sales in fiscal 2022.
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.
Sales of licensed products accounted for 53.4% of our net sales in fiscal 2024, 58.6% of our net sales in fiscal 2023 and 67.2% of our net sales in fiscal 2022.
G-III ensures compliance with labor and employment law issues through a variety of processes and procedures, using both internal and external expertise and resources.
We provide training on important issues to our personnel. G-III ensures compliance with labor and employment law issues through a variety of processes and procedures, using both internal and external expertise and resources.
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.
Currently, approximately 60% of our leadership team and 72% 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 fourteen Board members, there are four women and four people of diverse backgrounds, exceeding NASDAQ requirements for board diversity.
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.
Nackman ​ 64 ​ Chief Financial Officer and Treasurer Jeffrey Goldfarb ​ 47 ​ Executive Vice President and Director Dana Perlman ​ 43 ​ Executive Vice President and Chief Growth and Operations Officer ​ Morris Goldfarb is our Chairman of the Board and Chief Executive Officer, as well as one of our directors. Mr.
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 also sell our products using digital channels through retail partners such as macys.com, nordstrom.com and dillards.com, each of which operates significant digital businesses.
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.
In an environment of rapidly changing consumer fashion trends and preferences, we benefit from a balanced mix of more than 30 licensed and proprietary brands anchored by our key brands: DKNY, Donna Karan, Karl Lagerfeld, Nautica and Halston, as well as other major brands that currently drive our business, including Calvin Klein and Tommy Hilfiger, all of which have strong brand equity and long-standing consumer appeal.
The new five-year license agreement, effective beginning in January 2024, includes three extensions, for five years each. First deliveries are expected to hit the floor in January 2024. The product is expected to be distributed in better department stores, digital channels and Nautica’s stores and website in North America and franchised stores globally.
The new five-year license agreement, effective as of January 2024, includes three extensions, for five years each. First deliveries began in January 2024. The product is expected to be distributed in North America through our diversified distribution network, including better department stores, digital channels and Nautica’s stores and website, as well as in franchised stores globally.
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 brand in the United States and internationally for men’s, women’s and children’s footwear, children’s clothing, men’s and women’s sportswear apparel and bedding and bath products. ​ We license the Andrew Marc brand in North America for men’s and boy’s tailored clothing and men’s and women’s denim. ​ We license the Vilebrequin brand internationally for fragrance and soap related products, watches, denim and paddleboards. ​ We license the Sonia Rykiel brand internationally for children’s apparel, women’s footwear and women’s fashion jewelry. ​ Retail Operations ​ As of January 31, 2024, our retail operations segment consisted of 53 stores operated under our Karl Lagerfeld Paris and DKNY brands, as well as digital channels for the DKNY, Donna Karan, Karl Lagerfeld Paris, G.H.
We believe these brands can enable us to expand in the international space and that there is untapped potential for these brands. In addition, we believe that the international sales and profit opportunity is quite significant for our DKNY and Donna Karan businesses and, as a result, we are expanding our DKNY and Donna Karan businesses globally.
In addition, we believe that the international sales and profit opportunity is quite significant for our DKNY and Donna Karan businesses and, as a result, we are expanding our DKNY and Donna Karan businesses globally.
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.
As of January 31, 2024, Vilebrequin products were distributed through select wholesale distribution, 104 company-operated stores and 95 licensed stores across over 100 countries, as well as digitally on www.vilebrequin.com. ​ 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 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 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.
Bass, Andrew Marc and Wilsons Leather businesses. ​ Our DKNY stores offer a large range of products including sportswear, dresses, outerwear, handbags, footwear and athleisure apparel.
Bass, Andrew Marc and Wilsons Leather businesses. ​ 12 Table of Contents Our Karl Lagerfeld Paris stores offer a range of products including sportswear, dresses, outerwear, handbags and footwear.
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. ​
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. ​ Dana Perlman has joined us as our Executive Vice President and Chief Growth and Operations Officer in January 2024. Prior to joining us, Ms.
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.
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.
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.
In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos. ​ Products — Development and Design ​ G-III designs, sources and markets women’s and men’s apparel at a wide range of retail price points. Our product offerings primarily include outerwear, dresses, sportswear, swimwear, women’s suits and women’s performance wear.
We plan to continue adding more company operated and franchised retail locations and increase our wholesale distribution of Vilebrequin products throughout the world. ​ In September 2022, Vilebrequin acquired a beach concession in Cannes, and plans to open the first Vilebrequin Beach club at this location in the spring of 2023.
We plan to continue adding more company operated and franchised retail locations and increase our wholesale distribution of Vilebrequin products throughout the world. ​ In April 2023, Vilebrequin opened the first Vilebrequin Beach club in Cannes, France. Vilebrequin also opened a branded beach cabana club at the Boca Raton Hotel in Florida.
The amendments to the license agreements for these products provide for staggered extensions by category that expire beginning December 31, 2024 and continuing through December 31, 2027.
The amendments to the license agreements for these products provide for staggered extensions by category that expire beginning December 31, 2024 and continuing through December 31, 2027. ​ PVH Corp., the owner of Calvin Klein and Tommy Hilfiger, has indicated that it intends to produce these products itself once the license agreements expire.
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 are building global awareness through high impact ad campaigns that feature relevant and noteworthy talent. ​ 18 Table of Contents We strive to create marketing initiatives, collaborations and image programs to bring in a new, young customer. We will support global licensees with campaigns and product images through our brand story.
We are focused on the re-positioning and expansion of the Donna Karan brand for Spring 2024. The new Donna Karan will be a modern system of dressing created to appeal to a woman’s senses on every level, addressing the full lifestyle needs of a new consumer.
We initially repositioned and relaunched DKNY and we have successfully grown the brand. We are now focused on the repositioning and expansion of the Donna Karan brand with first deliveries made for Spring 2024. The new Donna Karan is a modern system of dressing created to appeal to a woman’s senses on every level, addressing her full lifestyle needs.
Donna Karan product is expected to be distributed in better department stores, digital channels and our own Donna Karan website in North America and internationally. Donna Karan is widely considered a top fashion brand and is recognized as one of the most famous designer names in American fashion. We believe this indicates that consumer demand exists for the brand.
Our Donna Karan product is currently being distributed in the United States through our diversified distribution network, including better department stores, digital channels and our own Donna Karan website. Donna Karan is widely considered to be a top fashion brand and is recognized as one of the most famous designer names in American fashion.
We may also be required to spend a specified percentage of net sales of a licensed product on advertising placed by us. ​ Our marketing and press efforts on behalf of the DKNY and Donna Karan brands are highly focused around communicating brand DNA and visual identity for the new evolution of DKNY and Donna Karan.
We may also be required to spend a specified percentage of net sales of a licensed product on advertising placed by us. ​ Our marketing efforts for the repositioned and expanded Donna Karan brand are focused on high impact brand campaigns with globally recognizable talent.
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.
H. Bass & Co. ​ ​ Vilebrequin ​ Wilsons Leather ​ ​ Sonia Rykiel ​ ​ ​ ​ G. H. Bass & Co. ​ ​ ​ ​ Eliza J ​ ​ ​ ​ Jessica Howard ​ ​ ​ ​ ​ ​ Long-standing relationships forged with retailers and license partners through emphasis on design, sourcing and quality control.
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.
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, Karl Lagerfeld Paris, Vilebrequin, G.H. Bass, Andrew Marc, Marc New York, Eliza J, Jessica Howard, Wilsons Leather, Sonia Rykiel and G-III Sports by Carl Banks.
Our China and Hong Kong offices monitor production at manufacturers’ facilities to ensure quality control, compliance with our specifications and timely delivery of finished garments to our distribution facilities and, in some cases, direct to our customers. ​ In connection with the foreign manufacture of our products, manufacturers purchase raw materials including fabric, wool, leather and other submaterials (such as linings, zippers, buttons and trim) at our direction.
In connection with the manufacture of our products, manufacturers purchase raw materials including fabric and other materials (such as linings, zippers, buttons, and trim) at our direction. We regularly inspect and supervise the manufacture of our products in order to ensure timely delivery, maintain quality control and monitor compliance with our manufacturing specifications.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese 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.
Biggest changeThey could also adversely affect our industry and the 34 Table of Contents global demand for our products, and as a result, our business, financial condition and results of operations could be adversely affected. ​ Changes in tax legislation or exposure to additional tax liabilities could impact our business. ​ Changes to U.S. and international tax laws could have a negative impact on our results of operations.
Other factors that could affect the success of our outlet stores include: ​ ● the location of the outlet mall or the location of a particular store within the mall; ● the other tenants occupying space at the outlet mall; ● increased competition in areas where the outlet malls are located; ● a downturn in the economy generally or in a particular area where an outlet mall is located; ● the shift to online shopping; ● a downturn in foreign shoppers in the United States; and ● the amount of advertising and promotional dollars spent on attracting consumers to outlet malls. ​ Sales at our outlet stores are derived, in part, from the volume of traffic at the malls where our stores are located.
Other factors that could affect the success of our outlet stores include: ​ ● the location of the outlet mall or the location of a particular store within the mall; ● the other tenants occupying space at the outlet mall; ● increased competition in areas where the outlet malls are located; ● a downturn in the economy generally or in a particular area where an outlet mall is located; ● the shift to online shopping; ● a downturn in foreign shoppers in the United States; and ● the amount of advertising and promotional dollars spent on attracting consumers to outlet centers. ​ Sales at our outlet stores are derived, in part, from the volume of traffic at the malls where our stores are located.
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.
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 2022 and 2023 that negatively affected transit times from our overseas suppliers.
A reduction in the volume of outlet mall traffic could adversely affect our retail sales. ​ Substantially all of the stores in our retail operations segment are operated as outlet stores and located in larger outlet centers, many of which are located in, or near, vacation destinations or away from large population centers where department stores and other traditional retailers are concentrated.
A reduction in the volume of outlet mall traffic could adversely affect our retail sales. ​ Substantially all of the stores in our retail operations segment are operated as outlet stores and located in larger premium outlet centers, many of which are located in, or near, vacation destinations or away from large population centers where department stores and other traditional retailers are concentrated.
The second half of the year is expected to continue to have a disproportionate effect on our annual results of operations for the foreseeable future. ​ Extreme or unseasonable weather conditions could adversely affect our business. ​ Extreme weather events and changes in weather patterns can influence customer trends and shopping habits.
The second half of our fiscal year is expected to continue to have a disproportionate effect on our annual results of operations for the foreseeable future. ​ Extreme or unseasonable weather conditions could adversely affect our business. ​ Extreme weather events and changes in weather patterns can influence customer trends and shopping habits.
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.
Similarly, the occurrence of one or more natural disasters, such as hurricanes, fires, floods or earthquakes, or public health crises, such as COVID-19, 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.
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.
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. ​ 38 Table of Contents A breach of the covenants under the indenture or the ABL Credit Agreement could result in an event of default under the applicable indebtedness.
Retailers have also responded to the shift in the types of apparel purchased by consumers based on their adjusted lifestyle needs resulting from changes to the work environment and leisure activities caused by the COVID-19 pandemic.
Retailers have also responded to the shift in the types of apparel purchased by consumers based on their adjusted lifestyle needs resulting from changes to the work environment and leisure activities caused by COVID-19.
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.
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; 30 Table of Contents ● 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 implemented 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.
Assuming all revolving loans were fully drawn under the ABL Credit Agreement, each one percentage point change in interest rates would result in a $6.5 million change in annual cash interest expense under the ABL Credit Agreement. ​ Financing extended to us under the ABL Credit Agreement is made at variable rates that use LIBOR or an alternate base rate (as determined by that Agreement) as a benchmark for establishing the interest rate.
Assuming all revolving loans were fully drawn under the ABL Credit Agreement, each one percentage point change in interest rates would result in a $6.5 million change in annual cash interest expense under the ABL Credit Agreement. ​ Financing extended to us under the ABL Credit Agreement was made at variable rates that use LIBOR or an alternate base rate (as determined by that Agreement) as a benchmark for establishing the interest rate.
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.
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. ​ 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.
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.
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. ​ 40 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.
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.
Our ongoing plan for our retail operations focuses on the operations of our Karl Lagerfeld Paris and DKNY stores, as well as operating our digital business.
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.
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.
If our information technology systems suffer severe damage, disruption or shutdown, by unintentional or malicious actions of employees and contractors or by cyber-attacks, and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience business disruptions, reputational damage, transaction errors, processing inefficiencies, increased overhead costs, excess inventory, product shortages and a loss of important information, causing our business, financial condition and results of operations to be adversely affected.
If our information technology systems suffer severe damage, disruption or shutdown, by unintentional or malicious actions of employees and contractors or by cyber-attacks, and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience business disruptions, reputational damage, transaction errors, processing inefficiencies, increased overhead costs, excess inventory, product shortages and a loss of important information, causing our business, financial condition and results of operations to be 32 Table of Contents adversely affected.
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.
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, 2024, we were in compliance with the financial covenants in our credit facility.
Discovery and disclosure of a material weakness in our internal control over financial reporting could have a material impact on our financial statements and could cause the market price of our securities to decline. ​ While we have developed and instituted corporate compliance programs and continue to update our programs in response to newly implemented or changing regulatory requirements, we cannot provide assurance that we are or will be in compliance with all potentially applicable corporate regulations.
Discovery and disclosure of a material weakness in our internal control over financial reporting could have a material impact on our financial statements and could cause the market price of our securities to decline. ​ 35 Table of Contents While we have developed and instituted corporate compliance programs and continue to update our programs in response to newly implemented or changing regulatory requirements, we cannot provide assurance that we are or will be in compliance with all potentially applicable corporate regulations.
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.
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.
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.
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.
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.
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.
A reduction in outlet mall traffic as a result of these or other factors could materially adversely affect our business. ​ Our digital business faces distinct risks, and our failure to successfully manage this business could have a negative impact on our profitability. ​ We are investing in our digital business and seeking to increase the amount of business derived from our digital operations.
A reduction in outlet mall traffic as a result of these or other factors could materially adversely affect our business. ​ 23 Table of Contents Our digital business faces distinct risks, and our failure to successfully manage this business could have a negative impact on our profitability. ​ We are investing in our digital business and seeking to increase the amount of business derived from our digital operations.
Any failure by these manufacturers to comply with required labor standards or any other divergence in their labor or other practices from those generally considered ethical in the United States and the potential negative publicity relating to any of these events, could result in a violation by us of our license agreements, and harm us and our reputation.
Any failure by these 29 Table of Contents manufacturers to comply with required labor standards or any other divergence in their labor or other practices from those generally considered ethical in the United States and the potential negative publicity relating to any of these events, could result in a violation by us of our license agreements, and harm us and our reputation.
If our actual financial results are worse than our financial forecasts or forecasts provided by outside investment analysts, or others, the price of our common stock may decline. Investors who rely on these predictions when making investment decisions with respect to our securities do so at their own risk.
If our actual financial results are worse than our financial forecasts or forecasts provided by outside investment analysts, or others, the price of our common stock 36 Table of Contents may decline. Investors who rely on these predictions when making investment decisions with respect to our securities do so at their own 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.
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.
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.
Our proprietary brands include DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, G.H. Bass, Vilebrequin, Sonia Rykiel, Andrew Marc and Wilsons Leather. In addition, brand value is based in part on consumer perceptions of a variety of qualities, including merchandise quality and corporate integrity.
The loss of the use of our credit facility or the inability to replace this facility or the Senior Secured Notes when each expires or matures would materially impair our ability to operate our business. ​ Our business is highly seasonal. ​ Retail sales of apparel have traditionally been seasonal in nature.
The loss of the use of our 24 Table of Contents credit facility or the inability to replace this facility or the Senior Secured Notes when each expires or matures would materially impair our ability to operate our business. ​ Our business is highly seasonal. ​ Retail sales of apparel have traditionally been seasonal in nature.
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.
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; ● 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.
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.
These types of decisions by our key customers could adversely affect our business. ​ 28 Table of Contents The effects of war, including wars in Ukraine and the Middle East, acts of terrorism, natural disasters or public health crises could adversely affect our business and results of operations. ​ The current wars in Ukraine and the Middle East 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.
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.
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, Karl Lagerfeld, Vilebrequin and Sonia Rykiel businesses and successfully expand into international markets, is subject to risks associated with international 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.
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 experience and providing an efficient and uninterrupted operation of our order-taking and fulfillment 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.
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 inflation, may affect consumer-spending habits and could have an adverse effect on our results of operations.
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.
(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; 37 Table of Contents ● 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.
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.
These implications of the wars in Ukraine and the Middle East 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.
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.
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 70.1% of our net sales in fiscal 2024, 74.2% of our net sales in fiscal 2023 and 78.0% of our net sales in fiscal 2022, with the Macy’s Inc. group accounting for approximately 19.2% of our net sales in fiscal 2024, 21.6% of our net sales in fiscal 2023 and 23.9% of our net sales in fiscal 2022.
Other states have enacted similar data privacy laws and additional states may do so in the future as the U.S. state privacy landscape continues to evolve. Non-compliance with these laws could result in penalties or significant legal liability.
Other states have enacted similar data privacy laws and additional states may do so in the future as the U.S. state privacy landscape continues to evolve. Non-compliance with these laws could result in penalties or 31 Table of Contents significant legal liability.
If we do not satisfy any of the material requirements of a license agreement or receive approval with respect to a restricted transaction, a licensor will usually have the right to terminate our license.
If we do not satisfy any of the material requirements of a license agreement or receive approval with respect to a restricted transaction, a licensor may have the right to terminate our license.
Our primary source of working capital to support the growth of our operations is our ABL Credit Agreement which extends to August 2025. Our growth is dependent on our ability to continue to be able to extend and, if necessary, increase this credit facility. We also issued Senior Secured Notes in fiscal 2021.
Our primary source of working capital to support the growth of our operations is our ABL Credit Agreement which matures in August 2025. Our growth is dependent on our ability to continue to be able to extend and, if necessary, increase this credit facility. We issued Senior Secured Notes in fiscal 2021 that are also due in August 2025.
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.
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.
Reductions in purchases by these customers or other large retailers could adversely affect our sales. ​ Sales to customers generally occur on an order-by-order basis that may be subject to cancellation or rescheduling by the customer.
Reductions in purchases by these customers or other large retailers could adversely affect our sales. ​ 22 Table of Contents Sales to customers generally occur on an order-by-order basis that may be subject to cancellation or rescheduling by the customer.
As a result of supply chain disruptions, we accelerated production schedules to allow for more lead time and to accommodate the anticipated extended transit times from our overseas suppliers in an effort to import our product in a manner that allowed for timely delivery to our customers.
Because of supply chain disruptions in fiscal 2023, we accelerated production schedules to allow for more lead time and to accommodate the anticipated extended transit times from our overseas suppliers in an effort to import our product in a manner that allowed for timely delivery to our customers.
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.
In fiscal 2024, net sales of licensed product accounted for 53.4% of our net sales compared to 58.6% of our net sales in fiscal 2023 and 67.2% of our net sales in fiscal 2022. ​ 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.
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.
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 the results of operations of our retail business. ​ Our retail operations segment reported an operating loss of $30.5 million in fiscal 2024, $33.6 million in fiscal 2023 and $24.8 million in fiscal 2022.
We do 35 Table of Contents not have any responsibility to provide financial forecasts going forward or to update any of our forward-looking statements at such times or otherwise. ​ We recorded significant charges for the impairment of goodwill during the fourth quarter of fiscal 2023 which caused us to report a net loss for fiscal 2023.
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. ​ We recorded significant charges for the impairment of goodwill during the fourth quarter of fiscal 2023 which caused us to report a net loss for fiscal 2023 and we recorded charges for the impairment of trademarks during the fourth quarter of fiscal 2024.
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.
Products sourced from Vietnam represented approximately 35.7% of our inventory purchased in fiscal 2024, 31.4% of our inventory purchased in fiscal 2023 and 32.2% of our inventory purchased in fiscal 2022. ​ While we source our products from many different manufacturers, we rely on a few manufacturers for a significant amount of our products.
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.
We cannot predict the future level of interest rates or the effect of 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. Volatility in interest rates may adversely affect our business or our customers.
In addition, the laws of certain foreign countries may not protect proprietary rights to the same extent as the laws of the United States.
In addition, the laws of certain foreign countries may not protect proprietary 26 Table of Contents rights to the same extent as the laws of the United States.
We have established controls designed to preclude sourcing any products or materials from the XUAR (either directly or indirectly through our suppliers), and we prohibit our vendors from doing business with facilities in the XUAR If any of the vendors from which we purchase goods is found to have dealings, directly or indirectly, with entities operating in the XUAR, our products or materials (including potentially non-cotton materials) could be held or delayed by the US CBP, which could cause delays, impact our inventory levels and adversely affect our ability to timely deliver our products to our customers. ​ Our expansion into the European market exposes us to uncertain economic conditions in the Euro zone. ​ Demand for our products depends in part on the general economic conditions affecting the countries in which we do business.
If any of the vendors from which we purchase goods is found to have dealings, directly or indirectly, with entities operating in the XUAR, our products or materials (including potentially non-cotton materials) could be held or delayed by the US CBP, which could cause delays, impact our inventory levels and adversely affect our ability to timely deliver our products to our customers. ​ Our expansion into the European market exposes us to uncertain economic conditions in the Euro zone. ​ Demand for our products depends in part on the general economic conditions affecting the countries in which we do business.
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.
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, including as a result of the limited extension period of our license agreements for these brands, could have a material adverse effect on our results of operations. ​ As of January 31, 2024, 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.
Adverse developments in the economy, including as a result of the COVID-19 outbreak, could lead to reduced consumer spending which could adversely impact our net sales and cash flow, which could affect our compliance with our financial covenants. A violation of our covenants could limit access to our credit facilities.
Adverse developments in the economy could lead to reduced consumer spending which could adversely impact our net sales and cash flow, which could affect our compliance with our financial covenants. A violation of our covenants could limit access to our credit facilities.
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.
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, 2021 and March 21, 2024, the market price of our common stock has ranged from a low of $11.60 to a high of $35.80 per share.
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.
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 limited extension period of the amended Calvin Klein and Tommy Hilfiger license agreements could cause a significant decrease in our net sales and have a material adverse effect on our results of operations. ​ 21 Table of Contents 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.
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.
Products sourced from China represented approximately 34.2% of our inventory purchased in fiscal 2024, 37.6% of our inventory purchased in fiscal 2023 and 34.2% of our inventory purchased in fiscal 2022.
Net sales of products under the Calvin Klein and Tommy Hilfiger brands constituted approximately 48.0% of our net sales in fiscal 2023 and approximately 50.7% of our net sales in fiscal 2022. ​ On November 30, 2022, we announced the extension of licenses for Calvin Klein and Tommy Hilfiger products.
Net sales of products under the Calvin Klein and Tommy Hilfiger brands constituted approximately 41.0% of our net sales in fiscal 2024 and approximately 48.0% of our net sales in fiscal 2023. ​ In November 2022, we announced the extension of licenses for Calvin Klein and Tommy Hilfiger products.
As a result, our reserves for doubtful accounts and write-offs of accounts receivable may increase. ​ Inflationary pressures have impacted the entire economy, including our industry. We have experienced increased costs in many aspects of our business, including our product costs and freight. During fiscal 2023, we have implemented price increases on many of our products.
As a result, our reserves for doubtful accounts and write-offs of accounts receivable may increase. ​ Inflationary pressures have impacted the entire economy, including our industry. We have experienced increased costs in many aspects of our business, including our product costs and freight.
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.
If our trademarks and other intangibles become impaired, we may be required to record additional charges to earnings. ​ As of January 31, 2024, we had trademarks and other intangibles in an aggregate amount of $662.0 million, or approximately 25% of our total assets and approximately 43% of our stockholders’ equity.
See the table in “Wholesale Operations-Licensed Products” above for information with respect to the new extension term, any potential renewal term or the existing current term for the Calvin Klein and Tommy Hilfiger license agreements. ​ PVH, the owner of these two brands, has indicated that it intends to produce these Calvin Klein and Tommy Hilfiger products itself once these license agreements expire.
See the table in “Wholesale Operations-Licensed Products” above for information with respect to the current terms of these agreements. ​ PVH, the owner of these two brands, has indicated that it intends to produce these Calvin Klein and Tommy Hilfiger products itself once these license agreements expire.
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.
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 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.
As of January 31, 2024, we were required to record a $5.9 million charge to earnings in our financial statements as our Sonia Rykiel trademark was determined to be partially impaired as a result of the performance of the brand. ​ 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 our results of operations and 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.
The amendments to the license agreements for Calvin Klein and Tommy Hilfiger products provide for staggered extensions by category that expire beginning December 31, 2024 and continuing through December 31, 2027.
The amendments to the license agreements for Calvin Klein and Tommy Hilfiger products provide for staggered extensions by category that expire beginning December 31, 2024 and continuing through December 31, 2027. In addition, the license for Tommy Jeans expired on January 31, 2023.
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.
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 59% of our net sales in fiscal 2024, 60% of our net sales in fiscal 2023 and 64% of our net sales in fiscal 2022.
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.
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 wars in Ukraine and the Middle East.
Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations and the services we provide to customers and damage our reputation, which could adversely affect our business, revenues and competitive position.
Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations and the services we provide to customers and damage our reputation, which could adversely affect our business, revenues and competitive position. ​ 33 Table of Contents We are also reliant on the security practices of our third-party service providers.
In fiscal 2023, we sourced 18.8% of our purchases from one vendor in China and in fiscal 2022, we sourced 19.4% of our purchases from one vendor in China.
In fiscal 2024, we sourced 13.6% of our purchases from one vendor in China and in fiscal 2023, we sourced 18.8% of our purchases from one vendor in China.
These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. If our operating results and available cash are insufficient to meet our debt service obligations, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.
If our operating results and available cash are insufficient to meet our debt service obligations, we could face 39 Table of Contents substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.
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.
Approximately $393.2 million of our trademarks and other intangibles was recorded in connection with our acquisition of DKNY and Donna Karan and approximately $188.2 million of our trademarks and other intangibles was recorded in connection with our acquisition of Karl Lagerfeld. ​ 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.
We could also be required to spend significant financial and other resources to remedy the damage caused by a security breach or to repair or replace networks and information systems.
Any disruptions affecting our information systems could have a material adverse impact on the operation of our business. We could also be required to spend significant financial and other resources to remedy the damage caused by a security breach or to repair or replace networks and information systems.
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.
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 and interest rate fluctuations. ​ Interest rates increased in fiscal 2024 and while interest rates many not increase further in fiscal 2025, it is unclear whether the Federal Reserve will reduce interest rates or maintain the current high rates in fiscal 2025.
Higher interest rates may increase the costs of our borrowing under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending. Volatility in interest rates may adversely affect our business and our customers.
It is unclear whether the Federal Reserve will reduce interest rates or maintain the current high rates in fiscal 2025. Higher interest rates may increase the costs of our borrowing under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending. Volatility in interest rates may adversely affect our business and our customers.
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.
In fiscal 2024, we sourced 28.3% and 22.8% of our purchases from two different vendors in Vietnam and in fiscal 2023, we sourced 25.7% and 15.2% of our purchases from two different vendors in Vietnam.
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.
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 footprint and others have filed for bankruptcy. Macy’s also recently announced that it planned to close an additional 150 stores over the next three years.
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.
The Company is not yet able to determine the effect, if any, this new security law may have on its business or results of operations. ​ 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.
In addition, the war has also led to, and may lead to further, broader unfavorable macroeconomic implications, including unfavorable foreign exchange rates, increases in fuel prices, food shortages, a weakening of the European economy, lower consumer demand and volatility in financial markets.
In addition, the continuation or escalation of these wars, including the potential for additional countries to declare ware against each other, may lead to further, broader unfavorable macroeconomic implications, including unfavorable foreign exchange rates, increases in fuel prices, food shortages, a weakening of the worldwide economy, lower consumer demand and volatility in financial markets.
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.
In addition, sales to Ross Stores accounted for an aggregate of 10.1% of our net sales in fiscal 2024, 9.2% of our net sales in fiscal 2023 and 12.7% of our net sales in fiscal 2022. We expect that these customers will continue to provide a significant percentage of our sales.
This may result in disruption to our offices and employees located in Hong Kong, as well as the shipment of our products from Hong Kong. The potential disruption to our business operations in Hong Kong and additional tariffs and trade restrictions could have an adverse impact on our results of operations.
This may result in disruption to our offices and employees located in Hong Kong, as well as the shipment of our products from Hong Kong.
Interest rates increased in fiscal 2023 and are expected to continue to increase in fiscal 2024. As a result, our debt service obligations on our variable rate indebtedness increased. Our net income and cash flows, including cash available for servicing our indebtedness decreased due to the increase in our debt service obligations.
Our net income and cash flows, including cash available for servicing our indebtedness decreased due to the increase in our debt service obligations.
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.
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.
Additional risks that we do not yet know of or that we currently think are immaterial may also affect our business operations. The risks discussed below also include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements.
Additional risks that we do not yet know of or that we currently think are immaterial may also affect our business operations.
Volatility in interest rates may adversely affect our business or our customers. If interest rates continue to increase, our capacity to obtain necessary liquidity may be negatively impacted.
If interest rates continue to increase or are maintained at their current high level, our capacity to obtain necessary liquidity may be negatively impacted.
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.
In addition, if we are unable to offset higher warehousing 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.
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.
Failure to comply with the Standard or Card Rules could result in losing certification under the PCI standards and an inability to process payments. ​ Our systems, and those of our third-party vendors, containing personal information and payment data of our customers, employees, and other third parties could be breached, which could subject us to adverse publicity, costly government enforcement actions or private litigation, and expenses . ​ 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.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeDKNY 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.
Biggest changeDKNY has 14 stores located in the United States and 4 stores located in Europe. In addition, DKNY has 16 stores located in Asia operated by Fabco. Karl Lagerfeld Paris has 32 stores located in the United States and 3 store located in Canada. Sonia Rykiel has 3 stores located in Europe.
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.
In addition, we operated 16 DKNY stores in China that are operated by a 75% owned subsidiary. ​ 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.
PROPERTIES. ​ 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.
PROPERTIES. ​ 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 ​ The leases for a large portion of our corporate office and showrooms located at 500 and 512 Seventh Avenue, New York City expired in March and December 2023.
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.
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 2037. Vilebrequin has 58 stores located in Europe, 22 stores located in the United States, 11 stores located in Asia, 10 stores located in Mexico and 3 stores in the Caribbean.
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.
We are currently engaged in discussions with the landlord with respect to the renewal of these leases. ​ Retail Stores ​ As of January 31, 2024, we operated 104 Vilebrequin retail stores, 53 DKNY and Karl Lagerfeld Paris stores, 70 Karl Lagerfeld stores and 3 Sonia Rykiel stores.
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 ​ ​
Karl Lagerfeld has 70 stores located in Europe. ​ The following table indicates the periods during which our retail leases expire: ​ ​ ​ ​ ​ ​ Number of Fiscal Year Ending January 31, Stores 2025 ​ 64 2026 ​ 53 2027 ​ 25 2028 ​ 19 2029 and thereafter ​ 85 Total ​ 246 ​ ​
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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. ​
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. ​ 43 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAny 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.
Biggest changeAny 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 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2023 ​ — ​ $ — ​ — ​ 10,000,000 December 1 - December 31, 2023 ​ 1,301 ​ ​ 29.17 ​ — ​ 10,000,000 January 1 - January 31, 2024 ​ — ​ ​ — ​ — ​ 10,000,000 ​ ​ 1,301 ​ $ 29.17 ​ — ​ 10,000,000 (1) Included in this table are 1,301 shares withheld during December 2023 in connection with the settlement of vested restricted stock units to satisfy tax withholding requirements.
Repurchases 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.
Repurchases 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. ​ ​ ​ 44 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, 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.
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, 2019 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, 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 common stock is traded under the symbol “GIII”. ​ On March 21, 2024, there were 16 holders of record and, we believe, approximately 21,300 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 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.
Our 2015 Long-Term Incentive Plan provides that shares withheld are valued at the closing price per share on the date withheld. (2) In August 2023, our Board of Directors reapproved our previously authorized share repurchase program and increased the number of shares remaining under that program from 6,813,851 to 10,000,000 shares. This program has no expiration date.
Comparison of Cumulative Total Return (January 31, 2018 — January 31, 2023) ​ ​ ​ ​ ​ 43 Table of Contents ​
Comparison of Cumulative Total Return (January 31, 2019 — January 31, 2024) ​ ​ ​ ​ ​ ​ 45 Table of Contents ​

Item 7. Management's Discussion & Analysis

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

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Biggest changeThis 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.
Biggest changeThis discount was amortized as interest expense using the effective interest method over the term of the LVMH Note. ​ 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 that were 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. ​ 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.
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. ​ 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.
Retail trade receivables primarily relate to amounts due from third-party credit card processors for the settlement of debit and credit card transactions and are typically collected within 3 to 5 days. ​ Inventories ​ Wholesale inventories are stated at the lower of cost (determined by the first-in, first-out method) or net realizable value, which comprises a significant portion of our inventory.
Retail trade receivables primarily relate to amounts due from third-party credit card processors for the settlement of debit and credit card transactions and are typically collected within 3 to 5 days. ​ Inventories ​ Wholesale inventories and Karl Lagerfeld inventories are stated at the lower of cost (determined by the first-in, first-out method) or net realizable value, which comprises a significant portion of our inventory.
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”).
The net proceeds of the Notes were used (i) to repay the $300 million that was outstanding under our prior term loan facility that was due in 2022 (the “Term Loan”), (ii) to pay related fees and expenses and (iii) for general corporate purposes. ​ The Notes bear interest at a rate of 7.875% per year payable semi-annually in arrears on February 15 and August 15 of each year. ​ The Notes are unconditionally guaranteed on a senior-priority secured basis by 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. ​ 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”).
Bass, Andrew Marc, Wilsons Leather and Sonia Rykiel businesses. ​ We operate in fashion markets that are intensely competitive. 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.
Bass, Andrew Marc, Wilsons Leather and Sonia Rykiel brands. ​ We operate in fashion markets that are intensely competitive. 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.
Borrowings bear interest, at the Borrowers’ option, at LIBOR plus a margin of 1.75% to 2.25% or an alternate base rate margin of 0.75% to 1.25% (defined as the greatest of (i) the “prime rate” of JPMorgan Chase Bank, N.A. from time to time, (ii) the federal funds rate plus 0.5% and (iii) the LIBOR rate for a borrowing with an interest period of one month) plus 1.00%, with the applicable margin determined based on Borrowers’ availability under the ABL Credit Agreement.
Borrowings originally bore interest, at the Borrowers’ option, at LIBOR plus a margin of 1.75% to 2.25% or an alternate base rate margin of 0.75% to 1.25% (defined as the greatest of (i) the “prime rate” of JPMorgan Chase Bank, N.A. from time to time, (ii) the federal funds rate plus 0.5% and (iii) the LIBOR rate for a borrowing with an interest period of one month) plus 1.00%, with the applicable margin determined based on Borrowers’ availability under the ABL Credit Agreement.
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.
Retail operations segment 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 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.
The Indenture provides for customary events of default which include (subject in certain cases to customary grace and 57 Table of Contents 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.
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 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 as of January 31, 2024 and $80.1 million borrowings outstanding under the facility as of January 31, 2023.
For the market approach, used to validate the results of the income approach method, we used the guideline company method, which analyzes market multiples of adjusted earnings before interest, taxes, depreciation and amortization for a group of comparable public companies. ​ As a result of our fiscal 2023 annual impairment test, we recorded a $347.2 million non-cash impairment charge during our fourth quarter of fiscal 2023 to fully impair the carrying value of our goodwill, which was included in asset impairments and gain on lease terminations in our consolidated statements of operations and comprehensive income (loss).
For the market approach, used to validate the results of the income approach method, we used the guideline company method, which analyzes market multiples of adjusted earnings before interest, taxes, depreciation and amortization for a group of comparable public companies. ​ As a result of our fiscal 2023 annual impairment test, we recorded a $347.2 million non-cash impairment charge during our fourth quarter of fiscal 2023 to fully impair the carrying value of our goodwill, which was included in asset impairments in our consolidated statements of operations and comprehensive income (loss).
Changes in judgment on these assumptions and estimates could result in a goodwill impairment charge. ​ We also perform our annual test for intangible assets with indefinite lives as of January 31 of each year using a qualitative evaluation or a quantitative test using a relief from royalty method, another form of the income approach.
Changes in judgment on these assumptions and estimates could result in a goodwill impairment charge. ​ 52 Table of Contents We also perform our annual test for intangible assets with indefinite lives as of January 31 of each year using a qualitative evaluation or a quantitative test using a relief from royalty method, another form of the income approach.
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.
For example, our fiscal year ended January 31, 2024 is referred to as “fiscal 2024.” ​ We consolidate the accounts of all of our wholly-owned and majority-owned subsidiaries. Karl Lagerfeld Holding B.V.
The discount rate applied to these cash flows were based on the weighted average cost of capital for the wholesale reporting unit, which takes market participant assumptions into consideration, inclusive of a 51 Table of Contents Company-specific 7.5% risk premium to account for the additional risk of uncertainly perceived by market participants related to our overall cash flows.
The discount rate applied to these cash flows were based on the weighted average cost of capital for the wholesale reporting unit, which takes market participant assumptions into consideration, inclusive of a Company-specific 7.5% risk premium to account for the additional risk of uncertainly perceived by market participants related to our overall cash flows.
PRSU’s generally vest over a two to five year period. For restricted stock units with market conditions, the Company estimates the grant date fair value using a Monte Carlo simulation model.
PRSUs generally vest over a two to five year period. For restricted stock units with market conditions, the Company estimates the grant date fair value using a Monte Carlo simulation model.
PSU’s granted in fiscal 2020 are also subject to a lock up period that prevents the sale, contract to sell or transfer shares for two years subsequent to the date of vesting.
PSUs granted in fiscal 2020 are also subject to a lock up period that prevents the sale, contract to sell or transfer shares for two years subsequent to the date of vesting.
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 ABL Credit Agreement extended the maturity date to August 2025, subject to a springing maturity date if, subject to certain conditions, the Notes are 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.
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.
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.
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. ​ We believe that consumers prefer to buy brands they know, and we have continually sought to increase the portfolio of name brands we can offer through different tiers of retail distribution, for a wide array of products at a variety of price points.
Our continued success depends 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. ​ We believe that consumers prefer to buy brands they know, and we have continually sought to increase the portfolio of name brands we can offer through different tiers of retail distribution, for a wide array of products at a variety of price points.
If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, or at all. ​ 47 Table of Contents Foreign currency fluctuation ​ Our consolidated operations are impacted by the relationships between our reporting currency, the U.S.
If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, or at all. ​ Foreign currency fluctuation ​ Our consolidated operations are impacted by the relationships between our reporting currency, the U.S.
We consider our trade receivables to consist of two portfolio segments: wholesale and retail trade receivables. Wholesale trade receivables result from credit we extend to our wholesale customers based on pre-defined criteria and are generally due within 30 to 60 days.
We consider our trade receivables to consist of two portfolio segments: wholesale and retail trade receivables. Wholesale 51 Table of Contents trade receivables result from credit we extend to our wholesale customers based on pre-defined criteria and are generally due within 30 to 60 days.
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.
We have also responded with the strategic acquisitions made by us, such as our purchase of the interests not previously owned by us that resulted in Karl Lagerfeld becoming our wholly-owned subsidiary, and new license agreements entered into by us, such as our recent license agreements for the Nautica, Halston and Champion brands, that added to our portfolio of licensed and proprietary brands and helped diversify our business by adding new product lines and expanding distribution channels.
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.
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, Karl Lagerfeld, Karl Lagerfeld Paris and Vilebrequin retail stores, as well as through our digital sites for our DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin, G.H.
As of January 31, 2023, TRB had an aggregate €3.4 million ($3.7 million) drawn under these various facilities. ​ Foreign Credit Facility ​ KLH has a credit agreement with ABN AMRO Bank N.V. with a credit limit of €15.0 million which is secured by specified assets of KLH.
As of January 31, 2024, TRB had an aggregate €2.4 million ($2.7 million) drawn under these various facilities. ​ Foreign Credit Facility ​ KLH has a credit agreement with ABN AMRO Bank N.V. with a credit limit of €15.0 million which is secured by specified assets of KLH.
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).
As of January 31, 2024, 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 August 2025 (the “Notes”).
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.
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.
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.
Our company-operated stores primarily consist of DKNY and Karl Lagerfeld Paris retail stores, substantially all of which are operated as outlet stores. ​ 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. ​ In addition, 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.
In certain circumstances, the revolving credit facility also requires us to maintain a fixed charge coverage ratio, as defined in the agreement, not less than 1.00 to 1.00 for each period of twelve consecutive fiscal months of the Company.
In certain circumstances, the revolving credit facility also requires us to maintain a fixed charge coverage ratio, as defined in 58 Table of Contents the agreement, not less than 1.00 to 1.00 for each period of twelve consecutive fiscal months.
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.
For fiscal 2024 and 2023, the retail operations segment ended on February 3, 2024 and January 28, 2023, 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 2023 compared to the fiscal year ended January 31, 2022 (“fiscal 2022”), other financial information related to fiscal 2022 and information with respect to Liquidity and Capital Resources at January 31, 2022 and for fiscal 2022 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, 2023. ​ 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 a five year senior secured credit facility subject to a springing maturity date if, subject to certain conditions, the LVMH Note is not refinanced or repaid prior to the date that is 91 days prior to the date of any relevant payment thereunder.
The ABL Credit Agreement is a five year senior secured credit facility subject to a springing maturity date if, subject to certain conditions, the Notes are not refinanced or repaid prior to the date that is 91 days prior to the date of any relevant payment thereunder.
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 also had €2.4 million ($2.7 million) and €3.4 million ($3.7 million) outstanding under Vilebrequin’s overdraft facilities as of January 31, 2024 and January 31, 2023, respectively and €8.1 million ($8.9 million) and €7.3 million ($7.8 million) outstanding under our foreign credit facility as of January 31, 2024 and 2023, respectively. ​ Share Repurchase Program ​ In August 2023, 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.
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.
As of January 31, 2024, the Company had an aggregate outstanding balance of €8.0 million ($8.8 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.
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.
As of January 31, 2024, there were outstanding trade and standby letters of credit amounting to $4.0 million and $2.9 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.
The grant date fair value for RSU’s are based on the quoted market price on the date of grant.
The grant date fair value for RSUs are based on the quoted market price on the date of grant.
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.
Compensation expense for RSUs are 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 (“PRSUs”) and performance stock units (“PSUs”). ​ PRSUs 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.
The gross profit percentage in our retail operations segment was negatively impacted in the current year by increased promotional activity. ​ Selling, general and administrative expenses increased to $833.2 million in fiscal 2023 from $648.0 million in fiscal 2022.
The gross profit percentage in our retail operations segment was negatively impacted in the current year by increased promotional activity. ​ Selling, general and administrative expenses increased to $924.2 million in fiscal 2024 from $833.2 million in fiscal 2023.
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.
Wholesale revenues also include revenues from license agreements related to our owned trademarks including DKNY, Donna Karan, Karl Lagerfeld, G.H. Bass, Andrew Marc, Vilebrequin and Sonia Rykiel. ​ Our retail operations segment consists primarily of direct sales to consumers through our company-operated stores and product sales through our digital sites for the DKNY, Donna Karan, Karl Lagerfeld Paris, G.H.
Dollar, and those of our non-United States subsidiaries whose functional/local currency is other than the U.S. Dollar, primarily the Euro. We continue to expect volatility in the global foreign currency exchange rates, which may have a negative impact on the reported results of certain of our non-United States subsidiaries in the future, when translated to the U.S.
Dollar, and those of our non-United States subsidiaries whose functional/local currency is other than the U.S. Dollar, primarily the Euro. 49 Table of Contents Volatility in the global foreign currency exchange rates may have a negative impact on the reported results of certain of our non-United States subsidiaries in the future, when translated to the U.S.
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.
We had $400 million in borrowings outstanding under the Notes at each of January 31, 2024 and January 31, 2023. Our contingent liability under open letters of credit was approximately $6.9 million at January 31, 2024 and $8.6 million at January 31, 2023.
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.
PRSUs are expensed over the service period under the accelerated attribution method. ​ 54 Table of Contents PSUs 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.
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.
As a result, 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 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 also source and sell products to major retailers for their own private label programs. ​ 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, Burlington and Costco.
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.
We had an aggregate of €8.0 million ($8.8 million) and €10.1 million ($10.9 million) outstanding under the Company’s various unsecured loans as of January 31, 2024 and January 31, 2023, respectively.
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.
The possible effects of these international conflicts could have a material adverse effect on our business and our results of operations. ​ 50 Table of Contents 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.
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.
The gross profit percentage in our retail operations segment was 48.1% for the year ended January 31, 2024 compared to 49.9% for the same period last 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.
As of January 31, 2024, KLH had €8.1 million ($8.9 million) of borrowings outstanding under this credit facility. ​ ​ ​ ​ 59 Table of Contents 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.
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.
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. ​ Other loss was $3.1 million in fiscal 2024 compared to other income of $27.9 million in fiscal 2023.
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.
The Intercreditor Agreement restricts the actions permitted to be taken by the Collateral Agent with respect to the Collateral on behalf of the holders of the Notes. ​ 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.
(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.
(2) Includes: (a) $400.0 million related to our Notes that will mature in fiscal 2026, (b) $8.8 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, (c) $2.7 million in our various overdraft facilities and (d) $8.9 million in our foreign credit facilities.
Less than 1% of our revenue in fiscal 2023 was generated in Russia and Ukraine. However, the imposition of additional sanctions by the United States and/or foreign governments, as well as the sanctions already in place, could lead to restrictions related to sales and our supply chain for which the financial impact is uncertain.
However, the imposition of additional sanctions by the United States and/or foreign governments, as well as the sanctions already in place, could lead to restrictions related to sales and our supply chain for which the financial impact is uncertain.
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 no borrowings outstanding under our revolving credit facility as of January 31, 2024. (3) Includes outstanding trade letters of credit, which represent inventory purchase commitments, which typically mature in less than six months. ​ 61 Table of Contents
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.
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, 2024, we had remaining 10,000,000 shares authorized for purchase under this program.
This is expected to remain a challenge in fiscal 2024 and may negatively impact our ability to deliver product to our retail partners and customers in a timely manner. ​ As a result of supply chain disruptions, we had accelerated production schedules to allow for more lead time and to accommodate the anticipated extended transit times from our overseas suppliers in an effort to import our product in a manner that allows for timely delivery to our customers.
We continue to monitor the transportation market for circumstances that may cause delays and negatively impact our ability to deliver product to our retail partners in a timely manner. ​ As a result of supply chain disruptions, in fiscal 2023, we accelerated production schedules to allow for more lead time and to accommodate the anticipated extended transit times from our overseas suppliers in an effort to import our product in a manner that allows for timely delivery to our customers.
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.
The gross profit percentage in our wholesale operations segment was 38.9% for the year ended January 31, 2024 compared to 32.6% for the year ended January 31, 2023.
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 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. ​ 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.
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.
As of January 31, 2024, we were in compliance with these covenants. ​ As of January 31, 2024, we had no borrowings outstanding under the ABL credit agreement. The ABL Credit Agreement also includes amounts available for letters of credit.
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 also sell our products using digital channels through retail partners such as macys.com, nordstrom.com and dillards.com, each of which operates significant digital businesses.
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 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. ​ Tabular Disclosure of Contractual Obligations ​ As of January 31, 2024, 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 ​ $ 288.3 ​ $ 73.3 ​ $ 109.7 ​ $ 65.2 ​ $ 40.1 Minimum royalty payments (1) ​ ​ 308.3 ​ ​ 108.6 ​ ​ 149.4 ​ ​ 48.0 ​ ​ 2.3 Long-term debt obligations (2) ​ ​ 420.4 ​ ​ 15.0 ​ ​ 403.9 ​ ​ 1.3 ​ ​ 0.2 Purchase obligations (3) ​ ​ 4.0 ​ ​ 4.0 ​ ​ — ​ ​ — ​ ​ — Total ​ $ 1,021.0 ​ $ 200.9 ​ $ 663.0 ​ $ 114.5 ​ $ 42.6 (1) Includes obligations to pay minimum scheduled royalty, advertising and other required payments under various license agreements.
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.
This impairment charge was recorded to our wholesale operations segment. ​ Our fiscal 2023 testing determined that the fair values of each of our indefinite-lived intangible assets substantially exceeded its carrying value and, therefore, there were no impairments identified as of January 31, 2023 as a result of these tests. ​ 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 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 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 new five-year license agreement, effective beginning in January 2024, includes three extensions, for five years each. First deliveries are expected to hit the floor in January 2024. The product is expected to be distributed in better department stores, digital channels and Nautica’s stores and website in North America and franchised stores globally.
The new five-year license agreement, effective as of January 2024, includes three extensions, for five years each. First deliveries began in January 2024. The product is expected to be distributed in North America through our diversified distribution network, including better department stores, digital channels and Nautica’s stores and website, as well as in 47 Table of Contents franchised stores globally.
Dollar. ​ Supply Chain ​ There were numerous factors disrupting the shipping industry that have negatively affected transit times from our overseas suppliers, as well as our ability to ensure that we were able to import our product in a manner that allows for timely delivery to our customers.
Dollar. ​ Supply Chain ​ In fiscal 2022 and 2023, there were numerous factors disrupting the shipping industry that negatively affected transit times from our overseas suppliers, as well as our ability to ensure that we were able to import our product in a manner that allows for timely delivery to our customers. ​ More recently, shipping costs and transit times have returned to levels comparable to, and in some cases lower than, pre-pandemic time periods.
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.
This increase in our effective tax rate is primarily due to the goodwill impairment charges which significantly decreased pretax book income in relation to tax expense in fiscal 2023, as well as operating losses generated in certain foreign jurisdictions during fiscal 2024 that are not expected to be realized. ​ 56 Table of Contents 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.
The results of KLH are included in our consolidated financial statements beginning May 31, 2022. ​ Each of Vilebrequin International SA (“Vilebrequin”), a Swiss corporation that is wholly-owned by us, KLH, Fabco Holding B.V.
The results of KLH are included in our consolidated financial statements beginning May 31, 2022. ​ Each of Vilebrequin International SA (“Vilebrequin”), a Swiss corporation that is wholly-owned by us, KLH, Fabco Holding B.V. (“Fabco”) and Sonia Rykiel report results on a calendar year basis rather than on the January 31 fiscal year basis used by G-III.
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.
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”).
Higher interest rates increase the costs of our borrowing under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending. Volatility in interest rates may adversely affect our business or our customers.
It is unclear whether the Federal Reserve will reduce interest rates or maintain the current high rates in fiscal 2025. Higher interest rates increase the cost of our borrowing under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending. Volatility in interest rates may adversely affect our business or our customers.
The results of our annual tests determined that the estimated fair value of our wholesale reporting unit was substantially in excess of its carrying value. ​ Fiscal 2023 Annual Indefinite-Lived Intangible Assets Impairment Testing ​ We performed our annual test of our indefinite-lived trademarks as of January 31, 2023 using a qualitative evaluation or a quantitative impairment test using a relief from royalty method, another form of the income approach.
There was no new goodwill recognized in fiscal 2024. ​ Annual Indefinite-Lived Intangible Assets Impairment Testing ​ We performed our annual test of our indefinite-lived trademarks as of January 31, 2024 and January 31, 2023 using a qualitative evaluation or a quantitative impairment test using a relief from royalty method, another form of the income approach.
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.
The cash requirements of our business are primarily related to the seasonal buildup in inventories, compensation paid to employees, occupancy, payments to vendors in the normal course of business, capital expenditures, interest payments on debt obligations and income tax payments.
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.
At January 31, 2023, we had $125.0 million of face value principal amount outstanding under the LVMH Note. The amount outstanding under the LVMH Note was repaid during fiscal 2024.
PSU’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.
SPSUs are expensed over the service period under the accelerated attribution method. ​ 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, ​ 2024 ​ 2023 ​ ​ (In thousands, except for percentage of net sales amounts) Net sales ​ $ 3,098,242 ​ 100.0 % ​ $ 3,226,728 ​ 100.0 % Cost of goods sold ​ ​ 1,856,395 ​ 59.9 ​ ​ ​ 2,125,591 ​ 65.9 ​ Gross Profit ​ ​ 1,241,847 ​ 40.1 ​ ​ ​ 1,101,137 ​ 34.1 ​ Selling, general and administrative expenses ​ ​ 924,223 ​ 29.8 ​ ​ ​ 833,151 ​ 25.8 ​ Depreciation and amortization ​ ​ 27,523 ​ 0.9 ​ ​ ​ 27,762 ​ 0.9 ​ Asset impairments ​ ​ 6,758 ​ 0.2 ​ ​ ​ 349,686 ​ 10.8 ​ Operating profit (loss) ​ ​ 283,343 ​ 9.2 ​ ​ ​ (109,462) ​ (3.4) ​ Other income (loss) ​ ​ (3,149) ​ (0.1) ​ ​ ​ 27,894 ​ 0.9 ​ Interest and financing charges, net ​ ​ (39,595) ​ (1.3) ​ ​ ​ (56,602) ​ (1.8) ​ Income (loss) before income taxes ​ ​ 240,599 ​ 7.8 ​ ​ ​ (138,170) ​ (4.3) ​ Income tax expense (benefit) ​ ​ 65,859 ​ 2.1 ​ ​ ​ (3,788) ​ (0.1) ​ Net income (loss) ​ ​ 174,740 ​ 5.7 ​ ​ ​ (134,382) ​ (4.2) ​ Less: Loss attributable to noncontrolling interests ​ ​ (1,428) ​ — ​ ​ ​ (1,321) ​ — ​ Net income (loss) attributable to G-III Apparel Group, Ltd. ​ $ 176,168 ​ 5.7 % ​ $ (133,061) ​ (4.2) % ​ Year ended January 31, 2024 (“fiscal 2024”) compared to year ended January 31, 2023 (“fiscal 2023”) ​ Net sales for fiscal 2024 decreased to $3.10 billion from $3.23 billion in the prior year.
The influential legacy of the Karl Lagerfeld brand embodies a creative expression that aligns with our goal to provide innovative products for our customers. ​ License Agreement with Nautica ​ In March 2023, we announced the signing of a long-term license with Authentic Brands Group for the Nautica brand in North America. ​ We will produce across a number of categories starting with a full women’s jeanswear collection and then expanding in a phased approach into additional categories including sportswear, suit separates and dresses.
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. ​ License Agreement for Nautica Brand ​ In March 2023, we entered into a long-term license with Authentic Brands Group for the Nautica brand in North America. ​ We plan to produce products under the Nautica brand across a number of categories starting with a full women’s jeanswear collection and then expanding in a phased approach into additional categories including sportswear, suit separates and dresses.
(“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.
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. For example, for G-III’s fiscal year ended January 31, 2024, the results of Vilebrequin, KLH, Fabco and Sonia Rykiel are included for the year ended December 31, 2023.
In addition, the war has also led to, and may lead to further, broader unfavorable macroeconomic implications, including unfavorable foreign exchange rates, increases in fuel prices, food shortages, a weakening of the European economy, lower consumer demand and volatility in financial markets.
In addition, the continuation or escalation of these international conflicts, including the potential for additional countries to declare war against each other, may lead to further, broader unfavorable macroeconomic conditions, including unfavorable foreign exchange rates, increases in fuel prices, food shortages, a weakening of the worldwide economy, lower consumer demand and volatility in financial markets.
As of March 23, 2023, we had approximately 46,488,488 shares of common stock outstanding. ​ Cash from Operating Activities ​ We used $104.6 million of cash from operating activities in fiscal 2023, primarily due to our net loss of $133.1 million, increases of $163.7 million in inventories and $41.0 million in accounts receivable, as well as a decrease of $107.2 million in accounts payable and accrued expenses.
We also generated cash from operating activities as a result of non-cash charges primarily related to depreciation and amortization of $27.5 million, share-based compensation of $17.2 million and asset impairments of $6.8 million. ​ We used $104.6 million of cash from operating activities in fiscal 2023, primarily due to our net loss of $133.1 million, increases of $163.7 million in inventories and $41.0 million in accounts receivable, as well as a decrease of $107.2 million in accounts payable and accrued expenses.
In addition, we used $13.2 million for our investment in connection with a brand acquisition. ​ Cash from Financing Activities ​ In fiscal 2023, we generated $51.6 million of cash in financing activities primarily as a result of borrowings of $587.3 million under our ABL Credit Agreement, partially offset by repayments of $507.2 million under that Agreement.
In addition, we used $26.1 million of cash to repurchase 1,598,568 shares of our common stock under our share repurchase program and $10.9 million for taxes paid in connection with net share settlements of stock grants that vested. ​ In fiscal 2023, we generated $51.6 million of cash in financing activities primarily as a result of borrowings of $587.3 million under our ABL Credit Agreement, partially offset by repayments of $507.2 million under that Agreement.
Ongoing inflation may also negatively impact our cost structure and labor costs in the future. ​ The Federal Reserve raised interest rates multiple times in fiscal 2023 in response to concerns about inflation and is expected to continue to do so in fiscal 2024.
Ongoing inflation may lead to further challenges to increase our sales and may also negatively impact our cost structure and labor costs in the future. We expect inflationary pressures to lessen in fiscal 2025. ​ The Federal Reserve raised interest rates several times in fiscal 2024 in response to concerns about inflation.
We classify cooperative advertising as a reduction of net sales. ​ Licensing revenue is recognized at the higher of royalty earned or guaranteed minimum royalty. ​ Accounts Receivable ​ In the normal course of business, we extend credit to our wholesale customers based on pre-defined credit criteria.
We classify cooperative advertising as a reduction of net sales. ​ Accounts Receivable ​ In the normal course of business, we extend credit to our wholesale customers based on pre-defined credit criteria. Accounts receivable, as shown on our consolidated balance sheet, are net of an allowance for doubtful accounts.
We had no borrowings outstanding under our revolving credit facility in the same period last year. ​ Income tax benefit for fiscal 2023 was $3.8 million compared to income tax expense of $70.9 million for the prior year primarily due to our net loss position resulting from a $347.2 million goodwill impairment charge.
The income tax benefit of $3.8 million in fiscal 2023 was primarily due to our net loss position resulting from a $347.2 million goodwill impairment charge. Our effective tax rate was 27.4% in fiscal 2024 compared to 2.7% in the prior 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.
Net sales of our segments are reported before intercompany eliminations. ​ Net sales of our wholesale operations segment decreased to $3.01 billion from $3.16 billion in the comparable period last year. This decrease was primarily the result of a decrease in net sales of Calvin Klein and Tommy Hilfiger licensed products.
Other income in the current period consisted primarily of a gain of $27.1 million during the year ended January 31, 2023 as a result of the remeasurement of our previously held 19% investment in the parent of Karl Lagerfeld and 49% interest in the North American operations of Karl Lagerfeld as of the effective date of the acquisition of the remaining interests in the parent of Karl Lagerfeld.
Other income in the prior year period consisted of a gain of $27.1 million as a result of the remeasurement of our previously held 19% investment in Karl Lagerfeld and 49% investment in KLNA as of the effective date of the acquisition by us of the interests in Karl Lagerfeld that we did not previously own.
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. ​ 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.
We believe this license aligns with G-III’s core competencies in outerwear and will fit seamlessly into our well-developed outerwear business. ​ 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 Karl Lagerfeld and Vilebrequin businesses, including from retail stores operated by Vilebrequin and Karl Lagerfeld, other than sales of product under the Karl Lagerfeld Paris brand generated by our retail stores and digital sites.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThese 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. ​
Biggest changeWe 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. ​
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.
We experienced increased costs in many aspects of our business during fiscal 2024 and fiscal 2023. In 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 lessen in fiscal 2025.
We 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.
We 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 several times in fiscal 2024. It is unclear whether the Federal Reserve will reduce interest rates or maintain the current high rates in fiscal 2025.
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Additional increases in interest rates, or the continuation of the current high rates, by the Federal Reserve will result in increases in our interest expense under our ABL Credit Agreement. ​ We had nominal borrowings under our ABL Credit Agreement during the year ended January 31, 2024.

Other GIII 10-K year-over-year comparisons