NEW YORK — G-III Apparel Group, the $240 million diversified apparel firm, has chiseled off a larger piece of the outerwear industry by acquiring two privately held coat manufacturers, Marvin Richards and Winlit.
G-III, an outerwear and sportswear manufacturer and distributor here, has in recent years added labels and outerwear licenses such as Cole Haan and House of Deréon, the fashion house started by Tina and Beyoncé Knowles. The now 26-plus label juggernaut’s latest acquisitions should bolster annual volume by $125 million, according to Morris Goldfarb, chairman and chief executive officer of G-III.
By buying J. Percy for Marvin Richards, Marvin Richards’ parent company, G-III has picked up licenses for Calvin Klein women’s and men’s coats as well as St. John Knits outerwear.
Through the Winlit acquisition, G-III now holds the licenses for women’s and men’s Guess outerwear, Tommy Hilfiger leather outerwear and Ellen Tracy, London Fog, Pacific Trail and BCBG by Max Azria outerwear. Like Marvin Richards, Winlit also has its share of private label programs.
G-III acquired J. Percy for Marvin Richards Ltd. and affiliated companies for $19.2 million and 466,666 shares of G-III common stock. G-III may be required to issue up to 150,000 additional shares of common stock, based on the future market price of its shares. J. Percy for Marvin Richards will be entitled to receive additional compensation based on the performance of G-III’s new Marvin Richards division through the fiscal year ending Jan. 31, 2009.
G-III has acquired the operating assets of the Winlit Group Ltd. for about $7.3 million. Winlit will be entitled to receive additional money based on the performance of the new Winlit division at G-III through the fiscal year ending Jan. 31, 2009.
Sammy Aaron, president of Marvin Richards, will be vice chairman of G-III and president of G-III’s new Marvin Richards division. Aaron also will become a director of G-III. David Winn, president of Winlit Group Ltd., will join G-III as president of the company’s new Winlit division. Both men report to Goldfarb.
To finance the acquisitions and handle its increased need for working capital, G-III has set up $195 million in financing through CIT Group/Commercial services Inc. The arrangement includes a three-year revolving credit line with a maximum capacity of $165 million and a three-year term loan with a principal amount of $30 million.
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The bank is “very comfortable” with funding further expansion, said Goldfarb. “We’re going to try to sit back, integrate the three companies, try to maximize our opportunities and review opportunities in the market, but not necessarily the coat market,” Goldfarb said.