G-III Plans Donna Karan Expansion, Signs Nautica License – WWD

G-III Apparel Group is preparing to move on from Tommy and Calvin with Donna and Nautica. 

The company — which faced the prospect of losing half of its sales when PVH Corp. decided last year to transition out of licensing deals for its Tommy Hilfiger and Calvin Klein businesses — on Thursday laid out two new initiatives that will help it adjust. 

While releasing fourth-quarter results, which included losses driven by an impairment charge, G-III said it planned to expand on its small Donna Karan business and that it had also picked up a license for Natuica from Authentic Brands Group.

“Donna Karan and Nautica are two of the most recognized American lifestyle brands with significant opportunity in the women’s space,” said Morris Goldfarb, G-III’s chairman and chief executive officer. “Our track record of having successfully grown major brands to more than $3 billion in net sales today gives us confidence in our ability to unlock the potential of both Donna Karan and Nautica.”

G-III bought Donna Karan in 2016 from LVMH Moët Hennessy Louis Vuitton. Since then the spotlight has been on DKNY, which G-III repositioned and relaunched, building a roughly $600 million business. 

The Donna Karan brand has been a small business, but G-III said it is “now focused on the re-positioning and expansion of the brand for spring 2024. The new Donna Karan will be a modern system of dressing created to appeal to a woman’s senses on every level, addressing the full lifestyle needs of a new consumer.”

The plan is to distribute the brand through better department stores and through direct channels. 

While Donna Karan is not as big as Tommy HIlfiger, it has the potential to be a more profitable business for G-III since it won’t have to make royalty payments to use the brand.

But licensing is still clearly part of the picture at G-III. 

The company’s new five-year deal for Nautica starts in January and includes three extensions for five years each. G-III will start with a number of categories, including jeans, and then branch out into Nautica sportswear, suit separates and dresses. 

In revealing the deal, G-III reported fourth-quarter net losses of $261.1 million, which included a non-cash impairment charge of $291.5 million, and compared with year-ago earnings of $48.4 million

Adjusted earnings slid to 41 cents from $1.06 a year ago. 

Net sales for the quarter ended Jan. 31 rose 14.2 percent to $854.4 million. 

This year G-III expects to drive sales of $3.23 billion — flat with last year. 

The action is clearly going to come beyond that, with a new look for Donna Karan and Nautica and whatever else G-III cooks up in the meantime.