G-III Apparel Group Ltd. sees its G.H. Bass business, acquired from PVH Corp. 15 months ago, growing into a billion-dollar brand.
Morris Goldfarb, chairman, president and chief executive officer, told analysts on a Tuesday conference call to discuss the company’s fourth-quarter results that the footwear-based brand, including men’s and women’s apparel, footwear and licensees in other categories, accounted for “a little less than half” of G-III’s $400 million in sales gains during fiscal 2014 and has plenty of room for growth.
G-III, which operates 155 Bass stores, is launching its own Bass women’s apparel collection for fall and PVH has been licensed to operate the wholesale portion of men’s apparel under the Bass umbrella.
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While Goldfarb sees the potential for G-III’s wholesale women’s apparel business reaching $200 million “without a great deal of difficulty,” the path to $1 billion would include G-III’s own Bass businesses, in retail and women’s wholesale, and a royalty stream from a growing roster of licensees.
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After licensing U.K.-based Overland for Bass shoes in Europe, the company Monday reached an agreement with Genesco for wholesale women’s and men’s shoes in the U.S. and Canada beginning in 2016.
“The more successful we are on the retail and wholesale level, the better quality licensee we garner,” the ceo said.
Not all of Goldfarb’s optimism about the label was based on hopes for the future. “Comps were up 15.4 percent in the fourth quarter and have continued to be strong into spring,” he noted.
Integration of Bass continues and inventories at Bass stores were “still in transition” and “suboptimal” as the year ended, according to chief financial officer Neal Nackman.
In the three months ended Jan. 31, G-III’s net income was up 70.2 percent to $22.2 million, or 96 cents a diluted share, from $13.1 million, or 62 cents in the prior-year quarter. Revenues were up 8.8 percent to $514.3 million from $472.8 million while gross margin expanded to 35.7 percent of sales from 35.2 percent in the year-ago quarter. The Wilsons retail operation’s same-store sales grew 5.5 percent in the fourth quarter and its sales per square foot reached $387 for the year from $375 in 2013 and $250 when it was acquired in 2008.
G-III surpassed analysts’ consensus estimates for EPS of 83 cents by 15 cents but fell short of expectations for revenues of $528.3 million by $14 million.
The New York-based outerwear and sportswear marketer expects first-quarter EPS of between 5 and 15 cents on revenues of $406 million. Prior to the forecast, analysts on average expected EPS of 14 cents on revenues of $404.8 million.
For the full year, net income was up 42.7 percent to $110.4 million, or $4.97 a diluted share, on a revenue increase of 23.2 percent to $2.12 billion.
Shares finished the day at $112.92, up 0.1 percent, after hitting a 52-week high of $115.28 in midday trading.