No part of the retail industry is immune from the wrath of eCommerce shopping trends. As more consumers continue to shift their buying habits to the online world, nearly every part of retail is feeling the aftershock.
One of the retail areas some may not have sprung to mind during this transition are clothing manufacturers. While the focus tends to fall on how retailers are revamping brick-and-mortar locations, little is mentioned of what’s happening behind the seams.
Clothing manufacturer G-III Apparel Group Ltd. is experiencing a downturn following a less-than-stellar spending retail cycle in August, thereby stunting the company’s annual forecast. Known for working with brands like Ivanka Trump and Donna Karan (a.k.a. DKNY), the company’s earnings fell short of its $1.34 projected average down to between $0.99 and $1.09. Shares of the company tumbled 14 percent to $19.71, which some are calling the single biggest downward slide since Aug. 30 of last year. Overall, G-III lost 22 percent during past fiscal years, with its sales totaling $2.73 billion, which is less than the $2.9 billion estimate.
In addition to eCommerce pulling dollars from brick-and-mortar stores carrying G-III’s brands, the company is also feeling the weight of its DKNY $650 million acquisition from LVMH. G-III’s CEO, Morris Goldfarb, commented on this and shared his thoughts on the future company impact. He said, “While our near-term financial outlook reflects the dilutive impact of our recent acquisition of Donna Karan, we believe the mid-year relaunch of the DKNY and Donna Karan brands will have a positive impact in the second half of the year.”
Although G-III’s shares fell $0.16 in Q4, its sales saw a 14 percent increase. Given this uptick and the company’s plans to relaunch the DKNY brand, there may be hope that this clothing manufacturer will quickly adapt and bounce back.