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G-III Apparel Group powerpoint
- 6. 7 ACQUISITIONS IN PAST TEN YEARS WINLI T
- 7. STOCK CHART
- 9. RISKS
- 14. 0.5% Avg. Gross Margin Growth
- 15. SEASONALITY
- 16. SEASONALITY 56% TOTAL SALES IN THIRD QUATER 18% INCREASE IN THIRD QUARTER SALES
- 17. 47.53 CURRENT PRICE 44 BUY IN PRICE 26% 12 MONTH IRR 55.95 PROJECTED VALUE
- 18. • STRONG COMPANY • LOW RISK • GREAT RETURN
- 19. INVEST LIKE A SHARK
Editor's Notes
- BRIAN
- KATIA: G-III has liscenses to produce huge brand names such as ______,_______,______,_______.
- KATIA: Major retailers
- KATIA: Morris Goldfarb served as executive officer for 40 years, since the company was founded in 1974 and has been a large proponent of the companies growth. Additionally, G-III has a great team of executives with an average of 30 years experience in the textile and fashion industry.
- JAKUB: The quality of this management is reflected in its increasing sales. This graph shows how between 2008 and 2015, the company has seen an average of 20% Sales growth. We project that the company will continue to do the same into the future by utilizing its strong management, ability to acquire great companies, and diversifying. 20% increasing sales Strong Management Acquisitions Diversifying their portfolio
- JAKUB: G-III’s ability to acquire new subsidiaries and brands is one of its greatest strengths, having acquired seven companies in the last ten years. Among these acquisitions are G. H. Bass, Vilebrequin, Andrew Marc, Wilson’s Leather, Marvin Richards, and Jessica Howard. Their ability to pick good companies and grow their portfolio is reflective of quality officer corps. Additionally, this shows G-III actively perusing their strategy to diversify their portfolio.
- JAKUB: Confidence in G-III’s leaders is reflected in its stock price. G-III has gone from a stock price that was consistently below $10 to $50 in the last ten years. Additionally, the majority of this growth happened in the last 5 years.
- JAKUB: Some of the companies that G-III cites as its largest competitors a Columbia and Nike. These companies measure up to G-III their strong financial ratios and market multiples. But these companies are challenging to compare because they operate with different business models. Both companies are sportswear distributors and gain the majority of their sales from their own proprietary brands. In contrast, G-III is mostly a licensed brand distributor. This means that they have license fees driving down their net incomes.
- HK: The company does face a number of risks. First:
- HK: 58% of G-III sales come from their top 10 retailers. Macy’s makes up 18.7% of their sales. This means that if one of their large customers does not do well or ends their relationship with G-III will bring down sales. (Next Slide)
- HK: G-III is addressing this issue by diversifying their distribution channels. As you can see, G-III’s top 10 retailers made up 58% of GIII’s sales last year, but this number is declining each year as the company diversifies.
- HK: 58% of G-III Sales are from licensed products. This means that loss of major licensor relationships with companies such as Calvin Klein could have a large adverse impact on G-III. However, G-III recently renewed it’s license with Calvin Klein and others. It is unlikely that this risk will come to fruition because of the mutually beneficial relationship G-III has with its licensors. Not only will ending one of these relationship hurt G-III it would also result in a loss of sales for its licensors. None the less, (next slide)
- HK: Also, licensed products as a % of total sales are declining. This is shows that G-III is diversifying and should continue to see growing margins as license fees reduce.
- BRIAN : Though seasonality is an issue that is not unique to G-III, it is important to note because of the time of the year in which we find ourselves. Winter is a huge time for outerwear divisions at retailers. With warmer weather in the united states due to el nino this year, retailers are seeing lower sales in their stores. Nonetheless, during the 3rd quarter conference call, G-III noted that they planned ahead by let up on their outerwear inventories for the season and stocking less coats. G-III believes that it will be able to stay in the game with its growing dress and performance wear divisions. G-III also saw a 18% increase in sales during its 3rd quarter; the quarter that they have historically seen 56% of their sales.
- BRIAN : Additionally, 56% of G-III’s sales are done during their third quarter. G-III saw an 18% increase in third quarter sales. This year has been a great year for them, making record second quarter sales growth, and though they did not hit their mark for third quarter, this still shows strong company growth.
- BRIAN : G-III’s Current stock price is at _____ and we project its present value, without projecting acquisitions, is _______. An investment in G-III provides you with a safe investment, in a strong company, that will land you 26% IRR. Given the low risk of this investment, this is a highly competitive return.
- BRIAN :
- BRIAN : END SHOW
- KATIA: G-III Is the leading dress seller in many of its larger retailers. Calvin Klein and Jessica Howard are two of their largest selling dress ware. This shows that they are able to lead the dress industry and are able to be a leader in fashion and design.