GIII G-III Apparel Dashboard

Management Discussion

• Net sales for the three months ended April 30, 2021 increased to $519.9 million from $405.1 million in the same period last year. Net sales of our segments are reported before intercompany eliminations.
• Net sales of our wholesale operations segment increased to $511.5 million for the three months ended April 30, 2021 from $378.9 million in the comparable period last year. This increase is primarily the result of a $47.7 million increase in net sales of Calvin Klein licensed products, a $42.8 million increase in net sales of Tommy Hilfiger licensed products, a $27.7 million increase in net sales of our DKNY and Donna Karan products and a $5.8 million increase in net sales of Karl Lagerfeld licensed products. In the prior year period, we experienced a significant decrease in net sales across substantially all of our brands primarily due to the effects of restrictions that began in March 2020 on business and personal activities imposed by governments in connection with the COVID-19 pandemic. As a result, most of our retail partners closed their stores in North America, beginning in mid-March, 2020. The governmental restrictions imposed in connection with the COVID-19 pandemic resulted in significant increases in unemployment, a reduction in business activity and a reduction in consumer spending on apparel and accessories, all of which contributed to the reduction of our net sales which occurred during the majority of fiscal 2021. During the three months ended April 30, 2021, substantially all stores operated by our retail partners were open and governmental restrictions were eased in most regions of the United States due to the reduction of the severity of the COVID-19 pandemic. The lessening of COVID-19 restrictions has resulted in an increase in business activity which has contributed to an increase in consumer spending on apparel and accessories.  
• Net sales of our retail operations segment decreased to $19.4 million for the three months ended April 30, 2021 from $33.9 million in the same period last year. This decrease is primarily due to the significant reduction in our store count as a result of the restructuring of our retail operations segment that resulted in the closure of our Wilsons, G.H. Bass and Calvin Klein Performance stores during fiscal 2021. The number of retail stores operated by us decreased from 257 at April 30, 2020 to 50 at April 30, 2021. In addition, while the impact of the COVID-19 pandemic has lessened in this year’s first quarter compared to last year, reduced demand and store traffic, as well as domestic and international travel restrictions, continue to have a negative impact on net sales of our retail operations segment.