What changed in this filing

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Item 1A. Risk Factors

2022-03-28 compared with 2021-03-26 · 113 added, 119 removed, 513 unchanged (31% of the section changed)

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Risks Related to the COVID-19 Pandemic

The global health crisis caused by the COVID-19 pandemic has had, and the current and uncertain future outlook of the outbreak will likely continue to have, a significant adverse effect on our business, financial condition and results of operations.

A novel strain of coronavirus, commonly referred to as COVID-19, has spread rapidly across the globe beginning in December 2019, including throughout all major geographies in which we operate (North America, Europe and Asia), resulting in adverse economic conditions and business and global supply chain disruptions, as well as significant volatility in global financial markets.

The global health crisis caused by the COVID-19 pandemic has had, and the current and uncertain future outlook of the outbreak may continue to have, a significant adverse effect on our business, financial condition and results of operations.

A novel strain of coronavirus, commonly referred to as COVID-19, spread rapidly across the globe beginning in December 2019, including throughout all major geographies in which we operate (North America, Europe and Asia), resulting in adverse economic conditions and business and global supply chain disruptions, as well as significant volatility in global financial markets.

Governments worldwide have imposed varying degrees of preventative and protective actions, such as temporary travel bans, forced business closures and stay-at-home orders, all in an effort to reduce the spread of the virus.

Such actions, among others, have resulted in a significant decline in retail traffic, tourism and consumer spending on discretionary items.

Additionally, during this period of uncertainty, companies across a wide array of industries have implemented various initiatives to reduce operating expenses and preserve cash balances, including work furloughs and reduced pay, which could lower consumers’ disposable income levels or willingness to purchase discretionary items such as apparel.

Further, even if such government restrictions and company initiatives are completely lifted, consumer behavior, spending levels and/or shopping preferences, such as willingness to congregate in shopping centers or other populated locations, could be adversely affected.

In connection with the COVID-19 pandemic, we have experienced varying degrees of business disruptions and periods of closure of our stores, distribution centers and corporate facilities, as have our wholesale customers, suppliers and vendors.

Our wholesale business has been adversely affected as a result of department store closures and lower traffic and consumer demand.

During the first half of fiscal 2021, the majority of our stores were closed for an average of 8 to 10 weeks, resulting in significant adverse impacts to our operating results.

Although nearly all of our stores were reopened by the end of the second quarter of fiscal 2021, the majority are still operating at limited hours and customer capacity levels in accordance with local health guidelines, with traffic remaining challenged.

Additionally, there has recently been a resurgence in the number of cases of COVID-19 in the U.S.

and certain other parts of the world, which could result in further shutdowns and business disruptions for us and/or our wholesale customers, suppliers and vendors.

Such actions, among others, resulted in a significant decline in retail traffic, tourism and consumer spending on discretionary items.

Additionally, during this period of uncertainty, companies across a wide array of industries implemented various initiatives to reduce operating expenses and preserve cash balances, including work furloughs and reduced pay, which could lower consumers’ disposable income levels or willingness to purchase discretionary items such as apparel.

Most operating restrictions on our stores were lifted during fiscal 2022, although customer traffic continued to be reduced compared to pre-pandemic levels.

Additionally, during fiscal 2022, there were periodic incidents of a resurgence in the number of cases of COVID-19 and its variants in the U.S.

and certain other parts of the world, which caused business disruptions for us and/or our wholesale customers, suppliers and vendors.

Even as government restrictions and company initiatives have been lifted or significantly reduced, consumer behavior, spending levels and/or shopping preferences, such as willingness to congregate in shopping centers or other populated locations, could be adversely affected.

The COVID-19 pandemic has had, and will likely continue to have, a significant adverse effect on our business, financial condition, and results of operations.

The effects of COVID-19 could affect our ability to successfully operate in many ways, including, but not limited to, the following factors:

● the impact of the pandemic on the economies and financial markets of the countries and regions in which we operate, including a potential global recession, a decline in consumer confidence and spending, or a further increase in unemployment levels, has resulted, and could continue to result, in consumers having less disposable income and, in turn, decreased sales of our products;

● “shelter in place” and other similar mandated or suggested isolation protocols, which have disrupted, and could continue to disrupt, brick-and-mortar retailers, including stores operated by us, as a result of store closures or reduced operating hours and decreased retail traffic;

● the impact of the pandemic on the economies and financial markets of the countries and regions in which we operate, including a potential global recession, a decline in consumer confidence and spending, or an increase in unemployment levels, has resulted, and could continue to result, in consumers having less disposable income and, in turn, decreased sales of our products;

● significant increases in online shopping and by other digital means, or other changes in consumer behavior, have been accelerated by COVID-19 and could adversely affect our sales;

● difficulty accessing debt and equity on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our ability to access capital necessary to operate our business

● a prolonged disruption of our business may impact our ability to satisfy the terms of our ABL Credit Agreement, including the covenants contained in that agreement, which could constitute an event of default under the terms of the ABL Credit Agreement, which may result in an acceleration of payment under that agreement or other debt agreements;

● our success in attempting to negotiate temporary royalty relief from our licensors, reduce operating costs and conserve cash;

● the failure of our wholesale customers to whom we extend credit to pay amounts owed to us on time, or at all, particularly if such customers are significantly impacted by COVID-19;

● a more promotional retail environment or our ability to move existing inventory, which may cause us to lower our prices, sell existing inventory at larger discounts than in the past, or write-down the value of inventory, and increase the costs and expenses of updating and replacing inventory, negatively impacting our margins;

● the risk that continued social distancing measures and general consumer behaviors due to the COVID-19 pandemic may continue to impact mall and store traffic and that the re-occurrence of COVID-19 outbreaks or the fear of additional outbreaks could cause governments to impose additional restrictions and customers to avoid public places, such as malls and outlets, where the retail stores of our wholesale customers and our stores are located;

● the risk that social distancing measures and general consumer behaviors due to the COVID-19 pandemic may continue to impact mall and store traffic and that the re-occurrence of COVID-19 outbreaks or the fear of additional outbreaks could cause governments to impose additional restrictions and customers to avoid public

places, such as malls and outlets, where the retail stores of our wholesale customers and our stores are located;

● the increase in the number of personnel working offsite may make our business more vulnerable to cybersecurity breach attempts, and, this period of uncertainty could result in an increase in phishing and other scams, fraud, money laundering, theft and other criminal activity.

● we may be required to revise certain accounting estimates and judgments such as, but not limited to, those related to the valuation of goodwill, indefinite-lived intangible assets, long-lived assets and deferred tax assets, which could have a material adverse effect on our financial position and results of operations.

Restrictions on travel and group gatherings, the closing or reduced operation of restaurants, sports leagues and all forms of communal entertainment and the fear of contracting COVID-19 have materially adversely affected store traffic and retail sales.

Restrictions on travel and group gatherings, the closing or reduced operation of restaurants, sports leagues and forms of communal entertainment and the fear of contracting COVID-19 have materially adversely affected store traffic and retail sales.

Most retail store chains and shopping malls operated on a reduced basis during the second half of fiscal 2021 compared to pre-pandemic operations.

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Certain states and cities reacted to the COVID-19 pandemic by instituting quarantines, restrictions on travel, “shelter in place” rules and phased reopenings.

While some of these restrictions have since expired, others have recently been reinstated in certain states or cities which saw a new spike in COVID-19 cases.

While the substantial majority of these restrictions have since expired, others have been reinstated in certain states or cities which saw a new spike in COVID-19 cases.

Such restrictions could be reinstated in the same or other areas as COVID-19 cases increase which could result in additional retail store restrictions or closures.

If the retail economy continues to weaken and/or consumers continue to reduce purchases in the near or long-term as a result of the negative effects of on the U.S.

and worldwide economies caused by COVID-19, retailers may need to further reduce or limit store operations, close additional stores and be more cautious with orders.

A slowing or changing economy as a result of the COVID-19 outbreak and the governmental restrictions imposed in the United States and around the world as a result thereof would adversely affect the financial health of our retail, distributor and joint venture partners, which in turn could have an adverse effect on our business, results of operations and financial condition.

The COVID-19 pandemic is ongoing, and its dynamic nature, including uncertainties relating to the geographic spread of the virus, the severity of the disease, the duration of the outbreak, the restrictive actions that are being taken by governmental authorities in the United States and around the world to contain the outbreak or to treat its impact, as well as the uncertainty associated with the timing and efficacy of efforts in the United States and around the world to vaccinate people against COVID-19, makes it difficult to forecast its effects on our fiscal 2022 results.

Our results of operations for fiscal 2021 reflected the impacts of the COVID-19 pandemic and we expect that fiscal 2022 will likely reflect further impacts.

If the retail economy weakens and/or consumers reduce purchases in the near or long-term as a result of the negative effects of on the U.S.

and worldwide economies caused by COVID-19, retailers may need to reduce or limit store operations, close additional stores and be more cautious with orders.

A slowing or changing economy as a result of the COVID-19 outbreak, and any governmental restrictions imposed in the United States and around the world as a result thereof, would adversely affect the financial health of our retail, distributor and joint venture partners, which in turn could have an adverse effect on our business, results of operations and financial condition.

The COVID-19 pandemic is ongoing, and its dynamic nature, including uncertainties relating to the geographic spread of the virus and its variants, the severity of the disease, the duration of any outbreak, the restrictive actions that are being taken by governmental authorities in the United States and around the world to contain an outbreak or to treat its impact, as well as the uncertainty associated with the timing and efficacy of efforts in the United States and around the world to vaccinate people against COVID-19, makes it difficult to forecast its effects on our fiscal 2023 results.

Our results of operations for fiscal 2021 reflected the significant impacts of the COVID-19 pandemic.

While our results improved in fiscal 2022, there could be adverse impacts in fiscal 2023.

It is difficult, if not impossible, at this time to predict the magnitude of the effect of the COVID-19 outbreak on our business and results of operations.

However, we expect our results for fiscal 2022 to be materially adversely affected as a result of the impact of COVID-19.

Risk Factors Relating to Our Wholesale Operations

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If a license does not contain a renewal option, and we desire to renew the license, we must negotiate renewal terms with the licensor.

However, even if we comply with all of the terms of a license agreement, we cannot guarantee that we will be able to renew an agreement when it expires even if we desire to do so.

However, even if we comply with all of the terms of a license agreement, we cannot guarantee that we will be able to renew an agreement when it expires even if we desire to do so as a licensor may decide to manufacture the licensed products itself or engage a new licensee for the products.

The failure to maintain or renew our material license agreements could cause us to lose significant revenue and have a material adverse effect on our results of operations.

Any adverse change in our relationship with PVH and its Calvin Klein or Tommy Hilfiger brands would have a material adverse effect on our results of operations.

As of January 31, 2022, we have license agreements relating to a variety of products sold under the Calvin Klein and Tommy Hilfiger brands, both of which are owned by PVH.

Net sales of these two brands owned by PVH constituted approximately 50.7% of our net sales in fiscal 2022 and approximately 53.5% of our net sales in fiscal 2021.

Any adverse change in our relationship with PVH or in the reputation of Calvin Klein or Tommy Hilfiger, or our inability to renew licenses for either the Calvin Klein or Tommy Hilfiger brands as their current terms end, would have a material adverse effect on our results of operations.

Our success is dependent on the strategies and reputation of our licensors.

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In addition, as licensed products may be personally associated with designers, our sales of those products could be materially and adversely affected if any of those individuals’ images, reputations or popularity were to be negatively impacted.

Any adverse change in our relationship with PVH and its Calvin Klein or Tommy Hilfiger brands would have a material adverse effect on our results of operations.

As of January 31, 2021, we have license agreements relating to a variety of products sold under the Calvin Klein and Tommy Hilfiger brands, which are owned by PVH.

Net sales of these two brands owned by PVH constituted approximately 53.5% of our net sales in fiscal 2021 and approximately 50.0% of our net sales in fiscal 2020.

Any adverse change in our relationship with PVH, or in the reputation of Calvin Klein or Tommy Hilfiger, would have a material adverse effect on our results of operations.

Our business and the success of our products could be harmed if we are unable to maintain or enhance the images of our proprietary brands.

The growth of our proprietary brands, their favorable images and our customers’ connection to our brands has contributed to our success.

The ownership of the DKNY and Donna Karan brands expanded our portfolio of proprietary brands that also includes G.H.

Bass, Vilebrequin, Andrew Marc and Wilsons Leather, among others.

In addition, brand value is based

in part on consumer perceptions of a variety of qualities, including merchandise quality and corporate integrity.

Negative claims or publicity regarding G-III, our brands, our products or the failure, on the part of the Company or our employees, to maintain the safety, integrity and ethics standards that we set for our operations, as well as those expected of members of our industry could adversely affect our reputation and sales regardless of whether such claims are accurate.

Our proprietary brands include the DKNY and Donna Karan brands, G.H.

Bass, Vilebrequin, Andrew Marc and Wilsons Leather, among others, including the recently acquired Sonia Rykiel brand.

In addition, brand value is based in part on consumer perceptions of a variety of qualities, including merchandise quality and corporate integrity.

Negative claims or publicity regarding G-III, our brands, our products or the failure, on the part of G-III or our employees, to maintain the safety, integrity and ethics standards that we set for our operations, as well as those expected of members of our industry could adversely affect our reputation and sales regardless of whether such claims are accurate.

Social media, which accelerates the dissemination of information, can increase the challenges of responding to negative claims.

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group accounting for approximately 23.9% of our net sales in fiscal 2022, 20.9% of our net sales in fiscal 2021 and 26.3% of our net sales in fiscal 2020.

In addition, TJX Companies accounted for approximately 12.9% of our net sales in fiscal 2021, 13.2% of our net sales in fiscal 2020 and 12.4% of our net sales in fiscal 2019.

TJX Companies accounted for approximately 14.8% of our net sales in fiscal 2022, 12.9% of our net sales in fiscal 2021 and 13.2% of our net sales in fiscal 2020.

In addition, Ross Stores accounted for approximately 12.7% of our net sales in fiscal 2022, 9.4% of our net sales in fiscal 2021 and 7.0% of our net sales in fiscal 2020.

We expect that these customers will continue to provide a significant percentage of our sales.

Reductions in purchases by Macy’s or other large retailers could adversely affect our sales.

Reductions in purchases by these customers or other large retailers could adversely affect our sales.

Sales to customers generally occur on an order-by-order basis that may be subject to cancellation or rescheduling by the customer.

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Risks Relating to Our Retail Operations

Our ongoing retail operations after completion of the restructuring may continue to incur losses if the revisions to our retail operations that we plan to implement do not significantly improve our results of operations.

Our retail operations may continue to incur losses if the revisions to our retail operations do not significantly improve our results of operations.

Our retail operations segment reported an operating loss of $24.8 million in fiscal 2022, $126.8 million in fiscal 2021 and $74.6 million in fiscal 2020.

After completion of the restructuring, this segment may continue to report operating losses for the near term.

This segment may continue to report operating losses for the near term even after the completion of the restructuring of our retail operations in fiscal 2021.

Our ongoing plan focuses on the operations and growth of our DKNY and Karl Lagerfeld Paris stores, as well as operating our digital business.

Our plan is based on the assumed continued strength of the DKNY and Karl Lagerfeld brands, changes in planning and allocation and improvements in gross margin.

We expect to reduce corporate headcount and administrative costs, while expanding our store base.

We need to successfully implement this strategy in order to significantly reduce the losses in our retail operations with the goal of ultimately attaining profitability in our retail operations segment.

If we are not successful in implementing and managing our plans with respect to operating our retail business after completion of the restructuring, we may not be able to achieve operating enhancements, sales growth and/or cost reductions, which could adversely impact our business, results of operations and financial condition.

We expect to reduce administrative costs while expanding our store base.

We need to successfully implement this strategy in order to continue to reduce the losses in our retail operations segment with the goal of ultimately attaining profitability in this segment.

If we are not successful in implementing and managing our plans with respect to operating our retail business, we may not be able to achieve operating enhancements, sales growth and/or cost reductions, which could adversely impact our business, results of operations and financial condition.

Restructuring of our retail operations resulted in our incurring charges for impairment of retail assets.

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Due to the fixed-cost structure associated with our retail operations, negative cash flows or the closure of a store could result in an impairment of leasehold improvements, operating lease assets, right-of-use assets or other long-lived assets, write-downs of inventory, severance costs, lease termination costs or the loss of working capital, which could adversely impact our business and financial results.

We recorded impairments related to our retail operations of $16.8 million, net of gain on lease modifications, in fiscal 2021, $19.8 million, net of gain on lease modifications, in fiscal 2020, and $2.8 million in fiscal 2019.

We recorded impairments related to our retail operations of $1.1 million, net of gain on lease modifications, in fiscal 2022, $16.8 million, net of gain on lease modifications, in fiscal 2021, and $19.8 million, net of gain on lease modifications, in fiscal 2020.

We may be required to record additional impairments or other charges relating to restructuring our retail operations.

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Sales at our outlet stores are derived, in part, from the volume of traffic at the malls where our stores are located.

In fiscal 2020, our outlet stores continued to experience a reduction in consumer traffic, which adversely affected the results of our retail operations segment.

In fiscal 2021, traffic at all retail stores has been significantly adversely affected by the COVID-19 pandemic.

Although stores have re-opened, subject to operational restrictions imposed by governments, we cannot predict if stores will be forced to close again or have their operations more severely restricted, how long store closures or more severely restrictions would be in effect as a result of additional outbreaks, whether additional outbreaks will affect purchases by consumers at retail stores or how large an effect additional outbreaks will have on retail sales volume.

In fiscal 2021, traffic at all retail stores was significantly adversely affected by the COVID-19 pandemic.

In fiscal 2022, retail store traffic continued to be adversely affected by the COVID-19 pandemic compared to pre-pandemic levels, particularly as a result of international travel restrictions.

Although stores have re-opened, we cannot predict if stores will be forced to close again or have their operations restricted, how long store closures or new restrictions would be in effect as a result of additional outbreaks, whether additional outbreaks will affect purchases by consumers at retail stores or how large an effect additional outbreaks will have on retail sales volume.

Our outlet stores benefit from the ability of a mall’s other tenants and other area attractions to generate consumer traffic in the vicinity of our stores and the continuing popularity of outlet malls as shopping destinations.

Changes in areas around

our existing retail locations, including the type and nature of the other retailers located near our stores, that result in reductions in customer foot traffic or otherwise render the locations unsuitable could cause our sales to be less than expected.

Changes in areas around our existing retail locations, including the type and nature of the other retailers located near our stores, that result in reductions in customer foot traffic or otherwise render the locations unsuitable could cause our sales to be less than expected.

A reduction in outlet mall traffic as a result of these or other factors could materially adversely affect our business.

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Risks associated with our digital business include:

● the security or failure of the computer systems, including those of third-party vendors, that operate our digital sites including, among others, inadequate system capacity, computer viruses, human error, changes in programming, security breaches or other cybersecurity concerns, system upgrades or migration of these services to new systems;

programming, security breaches or other cybersecurity concerns, system upgrades or migration of these services to new systems;

● disruptions in the Internet or telecom service or power outages;

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There could also be disagreements with our joint venture partners that could adversely affect our interest a joint venture.

Historically, we owned 49% in each of two joint ventures, one that licenses to G-III the right to produce and sell Karl Lagerfeld Paris products in the United States, Mexico and Canada and one that licenses the right to produce and sell DKNY and Donna Karan products in China.

Effective December 1, 2020, we increased our ownership interest in the joint venture that licenses DKNY and Donna Karan products in China to 75%.

We own 49% of a joint venture that licenses to G-III the right to produce and sell Karl Lagerfeld Paris products in the United States, Mexico and Canada and 75% of a joint venture that licenses the right to produce and sell DKNY and Donna Karan products in China.

We may enter into additional joint ventures in the future.

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The continued growth of our business, including as a result of acquisitions, depends on our access to sufficient funds to support our growth.

Our primary source of working capital to support the growth of our operations is our ABL Credit Agreement which extends to August 2025 and replaced our revolving credit facility.

Our primary source of working capital to support the growth of our operations is our ABL Credit Agreement which extends to August 2025.

Our growth is dependent on our ability to continue to be able to extend and, if necessary, increase this credit facility.

We also issued Senior Secured Notes in fiscal 2021 that replaced our term loan.

While we were recently able to refinance our debt, we cannot be sure we will be able to continue to secure alternative financing on satisfactory terms or at all.

We also issued Senior Secured Notes in fiscal 2021.

While we were able to refinance our debt in fiscal 2021, we cannot be sure we will be able to continue to secure alternative financing on satisfactory terms or at all.

The loss of the use of our credit facility or the inability to replace this facility or the Senior Secured Notes when each expires or matures would materially impair our ability to operate our business.

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If we encounter problems affecting our distribution system, our ability to meet customer expectations, manage inventory, complete sales and achieve operating efficiencies could be materially adversely affected.

Supply chain disruptions have adversely affected, and could continue to adversely affect, our ability to import our products in a timely manner and our freight costs.

The effects of the COVID-19 pandemic on the shipping industry have negatively impacted our ability to import our products in a manner that allows for timely delivery to our customers.

Congestion at ports of loading and ports of entry have caused significant delays in deliveries and changes to the itineraries of our steamship carriers.

Use of alternate routes or delivery methods would require additional trucking for us and our customers.

Truck driver shortages, shortages of truck equipment and the inability of ports to provide reliable pick up times, have also negatively impacted our ability to timely receive goods.

If we are unable to mitigate these supply chain disruptions, our ability to meet customer expectations, manage inventory and complete sales could be materially adversely affected.

Contractual shipping rates have increased as a result of increased demand for container space and the logistical delays experienced by the shipping industry.

Our costs have increased as a result of higher contractual shipping rates and the need to purchase additional container space on the secondary market at higher spot rates.

Terminals are also now imposing additional fees on importers not picking up containers on time, even when equipment and labor shortages negatively affect the ability of importers to pick up in a timely manner.

If we are unable to secure container space on a vessel due to limited availability, we may experience delays in shipping product from our overseas suppliers and ultimately to our customers.

Furthermore, even when we are able to secure space, ports around the world are experiencing congestion, slowing transit times of product through ports of entry which negatively affects our ability to timely receive and deliver product to our retail partners and customers.

If we are unable to mitigate these supply chain disruptions, our ability to meet customer expectations, manage inventory and complete sales could be materially adversely affected.

In addition, if we are unable to offset higher freight and other costs through product price increases or other measures, our results of operations may be adversely affected.

Fluctuations in the price, availability and quality of materials used in our products could have a material adverse effect on our cost of goods sold and our ability to meet our customers’ demands.

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Future increases in raw material prices could have an adverse effect on our results of operations.

Any raw material price increase or increase in costs related to the transport of our products (primarily petroleum costs) could increase our cost of sales and decrease our profitability unless we are able to pass higher prices on to our customers.

Any raw material price increase or increase in costs related to the transport of our products could increase our cost of sales and potentially decrease our profitability unless we are able to pass higher prices on to our customers.

In addition, if one or more of our competitors is able to reduce its production costs by taking greater advantage of any reductions in raw material prices, favorable sourcing agreements or new manufacturing technologies (which enable manufacturers to produce goods on a more cost-effective basis) we may face pricing pressures from those competitors and may be forced to reduce our prices or face a decline in net sales, either of which could have an adverse effect on our business, results of operations or financial condition.

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We cannot be sure that the actions we have taken to establish and protect our trademarks and other proprietary rights will be adequate to protect our rights, or that any of our intellectual property will not be challenged or held invalid or unenforceable, and we may not be able to prevent imitation of our products by others or to prevent others from seeking to block sales of our products as a violation of the trademarks and proprietary rights of others.

Our failure to protect our trademarks could diminish the value of our brands, and could cause customer or consumer confusion, which could, in turn, adversely affect the validity of our trademarks and our business, results of operations and financial condition.

Our failure to protect our

trademarks could diminish the value of our brands, and could cause customer or consumer confusion, which could, in turn, adversely affect the validity of our trademarks and our business, results of operations and financial condition.

In the course of our attempts to expand into foreign markets, we may experience conflicts with various third parties who have acquired ownership rights in certain trademarks, which would impede our use and registration of some of our trademarks.

Such conflicts are common and may arise from time to time as we pursue international expansion, such as with the international expansion of our DKNY, Donna Karan, Vilebrequin, G.H.

Bass, Andrew Marc and Wilsons Leather businesses.

Bass, Andrew Marc, Wilsons Leather and Sonia Rykiel businesses.

In addition, the laws of certain foreign countries may not protect proprietary rights to the same extent as the laws of the United States.

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Economic conditions have, at times, led to a reduction in overall consumer spending, which could have an adverse impact on sales of our products.

A disruption in the ability of our significant customers to access liquidity could cause serious disruptions or an overall deterioration of their businesses which could lead to a significant reduction in their orders of our products and the inability or failure on their part to meet their payment obligations to us, any of which could have a material adverse effect on our results of operations and liquidity.

adverse effect on our results of operations and liquidity.

A significant adverse change in a customer’s financial and/or credit position could also require us to sell fewer products to that customer, assume greater credit risk relating to that customer’s receivables or could limit our ability to collect receivables related to previous purchases by that customer.

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Uncertainties regarding future economic prospects, including as a result of the COVID-19 pandemic, may affect consumer-spending habits and could have an adverse effect on our results of operations.

Uncertainty with respect to consumer spending as a result of weak

economic conditions, including as a result of the COVID-19 pandemic, has, caused our customers to delay the placing of initial orders and to slow the pace of reorders during the seasonal peak of our business.

Weak economic conditions have had a material adverse effect on our results of operations at times in the past and could have a material adverse effect on our results of operations in the future as well.

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Continued consolidation in the retail industry, as well as store closing or retailers ceasing to do business, could negatively impact our business.

Lord & Taylor, which had filed for bankruptcy, has announced that it is liquidating its business and closing all stores, JC Penney and Christopher & Banks, each of which is a customer of ours, have filed for bankruptcy and Macy’s and Kohl’s, as well as other store chains, have announced their intention to close stores.

Various customers of ours have encountered reductions in operations including Macy’s and Kohl’s, as well as other store chains, that have reduced the number of stores they operated, Lord & Taylor, which closed all of its stores, and JC Penney and Christopher & Banks, each of which filed for bankruptcy.

Store closings could adversely affect our business and results of operations.

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The effects of war, acts of terrorism, natural disasters or public health crises could adversely affect our business and results of operations.

The continued threat of terrorism, heightened security measures and military action in response to acts of terrorism or civil unrest has, at times, disrupted commerce and intensified concerns regarding the United States and world economies.

The current war in Ukraine and the continued threat of terrorism, heightened security measures and military action in response to acts of terrorism or civil unrest has, at times, disrupted commerce and intensified concerns regarding the United States and world economies.

Any further acts of terrorism or new or extended hostilities may disrupt commerce and undermine consumer confidence, which could negatively impact our sales and results of operations.

Similarly, the occurrence of one or more natural disasters, such as hurricanes, fires, floods or earthquakes, or public health crises, such as the COVID-19 pandemic, could result in the closure of one or more of our distribution centers, our corporate headquarters or a significant number of stores or impact one or more of our key suppliers.

In addition, these types of events could result in increases in energy prices or a fuel shortage, the temporary or long-term disruption in the supply of product, disruption in the transport of product from overseas, delay in the delivery of product to our factories, our customers or our stores and disruption in our information and communication systems.

Similarly, the

occurrence of one or more natural disasters, such as hurricanes, fires, floods or earthquakes, or public health crises, such as the COVID-19 pandemic, could result in the closure of one or more of our distribution centers, our corporate headquarters or a significant number of stores or impact one or more of our key suppliers.

The world economy has experienced increases in energy prices, as well as shortages, as a result of the impact of the pandemic and the war in Ukraine.

These types of events could result in additional increases in energy prices or shortages, the temporary or long-term disruption in the supply of product, disruption in the transport of product from overseas, delay in the delivery of product to our factories, our customers or our stores and disruption in our information and communication systems.

Accordingly, these types of events could have a material adverse effect on our business and our results of operations.

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We do not maintain insurance for the potential lost profits due to disruptions of our overseas manufacturers.

Because our products are produced abroad, most significantly in China and Vietnam, political or economic instability in China, Vietnam or elsewhere could cause substantial disruption in the business of our foreign manufacturers.

Products sourced from China represented approximately 32.8% of our inventory purchased in fiscal 2021, 49.5% of our inventory purchased in fiscal 2020 and 61.5% of our inventory purchased in fiscal 2019.

Because our products are produced abroad, most significantly in Vietnam and China, political or economic instability in Vietnam, China or elsewhere could cause substantial disruption in the business of our foreign manufacturers.

Products sourced from Vietnam represented approximately 32.2% of our inventory purchased in fiscal 2022, 36.2% of our inventory purchased in fiscal 2021 and 24.6% of our inventory purchased in fiscal 2020.

Products sourced from China represented approximately 34.2% of our inventory purchased in fiscal 2022, 32.8% of our inventory purchased in fiscal 2021 and 49.5% of our inventory purchased in fiscal 2020.

While we source our products from many different manufacturers, we rely on a few manufacturers for a significant amount of our products.

We sourced 10.7% of our purchases in fiscal 2021 from one vendor in Vietnam.

We sourced 11.4% of our purchases in fiscal 2020 and 14.4% of our purchases in fiscal 2019 from one vendor in China.

In fiscal 2022, we sourced 35.5% and 17.1% of our purchases from two different vendors in Vietnam and in fiscal 2021, we sourced 10.7% of our purchases from one vendor in Vietnam.

In fiscal 2022, we sourced 19.4% of our purchases from one vendor in China.

The loss of key vendors or a disruption in receipt of products from key vendors could adversely affect our ability to deliver goods to our customers on time and in the requested quantities.

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Demand for our products depends in part on the general economic conditions affecting the countries in which we do business.

We are attempting to expand our presence in the European markets, including for our DKNY, Donna Karan and Vilebrequin businesses.

The strength of the economy in Europe is uncertain and has been significantly affected by the impacts of the COVID-19 pandemic.

There is some concern that certain European countries may default in payments due on their national debt obligations and from related European financial restructuring efforts.

If such defaults were to occur, or if European financial restructuring efforts create their own instability, current instability in the global credit markets may increase.

Continued financial instability in Europe could adversely affect our European operations and, in turn, could have a material adverse effect on us.

We are attempting to expand our presence in the European markets, including for our DKNY, Donna Karan and Vilebrequin businesses, as well as for our recently acquired Sonia Rykiel brand.

The economy in Europe is uncertain and potentially affected by the war in Ukraine and the impacts of the COVID-19 pandemic.

Financial instability in Europe could adversely affect our European operations and, in turn, could have a material adverse effect on us.

We have foreign currency exposures relating to buying and selling in currencies other than the U.S.

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We are subject to numerous risks associated with international operations.

Our ability to capitalize on the potential of our international operations, including to realize the benefits of our DKNY, Donna Karan and Vilebrequin businesses and successfully expand into international markets, is subject to risks associated with international operations.

Our ability to capitalize on the potential of our international operations, including to realize the benefits of our DKNY, Donna Karan and Vilebrequin businesses, or of our newly acquired Sonia Rykiel brand, and successfully expand into international markets, is subject to risks associated with international operations.

These include:

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Changes in regulatory, geopolitical, social or economic policies and other factors may have a material adverse effect on our international business in the future or may require us to exit a particular market or significantly modify our current business practices.

The new national security law adopted in Hong Kong may result in disruptions to our business operations in Hong Kong and additional tariffs and trade restrictions.

On June 30, 2020, a new security law was put into effect that would change the way Hong Kong has been governed since the territory was handed over by England to China in 1997.

The national security law adopted in Hong Kong may result in disruptions to our business operations in Hong Kong and additional tariffs and trade restrictions.

In June 2020, a new security law was put into effect that changes the way Hong Kong has been governed since the territory was handed over by England to China in 1997.

This law increases the power of the central government in Beijing over Hong Kong, limits the civil liberties of residents of Hong Kong and could restrict their ability to conduct business in the same way as in the past on a go forward basis.

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government’s special trade and economic relations with Hong Kong.

This may result in disruption to our offices and employees located in Hong Kong, as well as the shipment of our products from Hong Kong to the United States.

Further, the U.S.

may impose the same tariffs and other trade restrictions on exports from Hong Kong that it places on goods from mainland China.

This may result in disruption to our offices and employees located in Hong Kong, as well as the shipment of our products from Hong Kong.

The potential disruption to our business operations in Hong Kong and additional tariffs and trade restrictions could have an adverse impact on our results of operations.

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There are numerous laws and regulations regarding privacy and the storage, sharing, use, processing, transfer, disclosure and protection of personal data, the scope of which is changing, subject to differing interpretations, and may be inconsistent between states within a country or between countries.

For example, the European Union General Data Protection Regulation (“GDPR”) became effective in May 2018, and has resulted and will continue to result in significantly greater compliance burdens and costs for companies with users and operations in the European Union (“EU”) and European Economic Area (“EEA”).

For example, the European Union General Data Protection Regulation (“GDPR”) has caused significantly greater compliance burdens and costs for companies with users and operations in the European Union (“EU”) and European Economic Area (“EEA”).

Under GDPR, fines of up to 20 million Euros or 4% of a company’s annual global revenues, whichever is greater, can be imposed for violations.

The California Consumer Privacy Act (“CCPA”) went into effect on January 1, 2020, and limits how we may collect, use, and process personal data of California residents.

The California Consumer Privacy Act (“CCPA”) limits how we may collect, use, and process personal data of California residents.

To comply with the CCPA, we made certain changes to our data processing practices and policies but it may require that we further modify our data processing practices and policies and incur substantial compliance-related costs and expenses.

California recently enacted the California Privacy Rights Act (“CPRA”), effective January 1, 2023, which creates additional obligations regarding consumer data and could increase compliance risks, costs and expenses.

California also enacted the California Privacy Rights Act (“CPRA”), effective January 1, 2023, which creates additional obligations regarding consumer data and could increase compliance risks, costs and expenses.

Other states may decide to adopt similar privacy laws.

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We are required by Card Rules to comply with the Standard, and our failure to do so may result in fines or restrictions on our ability to accept payment cards.

Under certain circumstances specified in the Card Rules, we may be required to submit to periodic audits, self-assessments or other assessments of our compliance with the Standard.

certain circumstances specified in the Card Rules, we may be required to submit to periodic audits, self-assessments or other assessments of our compliance with the Standard.

Such activities may reveal that we have failed to comply with the Standard.

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China’s accession agreement for membership in the World Trade Organization provides that member countries, including the United States, may impose safeguard quotas on specific products.

We are unable to assess the potential for future action by the United States government with respect to any product category in the event that the quantity of imported apparel significantly disrupts the apparel market in the United States.

We are unable to assess the potential for future

action by the United States government with respect to any product category in the event that the quantity of imported apparel significantly disrupts the apparel market in the United States.

Future action by the United States in response to a disruption in its apparel markets could limit our ability to import apparel and increase our costs.

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Loss of this appeal could have an adverse effect on our results of operations.

In October 2017, the CBSA issued a final audit report to G-III’s Canadian subsidiary that challenged the valuation used by the Canadian subsidiary for certain goods imported into Canada.

The period covered by the examination is February 1,

2014 through October 27, 2017, the date of the final report.

The CBSA has requested us to reassess our customs entries for that period using the price paid or payable by the Canadian retail customers for certain imported goods rather than the price paid by us to the vendor.

The CBSA has also requested that we change the valuation method used to pay duties with respect to goods imported in the future.

We secured a bond to guarantee payment in the amount of CAD $26.9 million ($20.9 million) in March 2018, representing customs duty and interest that is claimed to be owed by us through December 31, 2017.

In October 2017, the CBSA issued a final audit report to G-III’s Canadian subsidiary (“G-III Canada”) that challenged the valuation used by G-III Canada for certain goods imported into Canada.

The period covered by the examination is February 1, 2014 through October 27, 2017, the date of the final report.

The CBSA has requested G-III Canada to reassess its customs entries for that period using the price paid or payable by the Canadian retail customers for certain imported goods rather than the price paid by G-III Canada to the vendor.

The CBSA has also requested that G-III Canada change the valuation method used to pay duties with respect to goods imported in the future.

In March 2018, G-III Canada provided a bond to guarantee payment to the CBSA for additional duties payable as a result of the reassessment required by the final audit report.

We secured a bond in the amount of CAD$26.9 million ($20.9 million) representing customs duty and interest through December 31, 2017 that is claimed to be owed to the CBSA.

In March 2018, we amended the duties filed for the month of January 2018 in accordance with the new valuation method.

This amount was paid to the CBSA.

Beginning February 1, 2018, we began paying duties in Canada on imported goods based on the price paid or payable by the Canadian retail customers.

Duties paid on the higher dutiable value through May 31, 2019 were not charged as an expense in our statement of operations, but were recorded as a deferred expense until the appeal process is concluded.

Effective June 1, 2019, we commenced paying based on the dutiable value of our imports in Canada based on pre-audit levels.

The CBSA has issued its final decision denying the appeal filed by G-III Canada with the President’s Office of the CBSA.

G-III Canada has filed a Notice of Appeal with the Canadian International Trade Tribunal (the “Tribunal”) further appealing the CBSA decision.

The Tribunal has confirmed receipt of the Notice of Appeal.

The deadline for filing the case brief and evidence is April 13, 2021 and a hearing date has been set for August 10, 2021.

Beginning February 1, 2018, we began paying duties based on the new valuation method.

Cumulative amounts paid and deferred through January 31, 2022, related to the higher dutiable values, were CAD$14.7 million ($11.6 million).

Effective June 1, 2019, we commenced paying based on the dutiable value of G-III Canada’s imports in Canada based on pre-audit levels.

G-III continued to defer the additional duty paid through the month of May 2019 pending the final outcome of the appeal.

The CBSA issued its final decision denying the appeal filed by G-III Canada with the President’s Office of the CBSA.

G-III Canada filed a Notice of Appeal with the Canadian International Trade Tribunal (the “Tribunal”) further appealing the CBSA decision.

A hearing on the appeal was held on December 7, 2021.

If our appeal of the audit findings is not successful, we will have to pay the duties and interest that have been secured by the bond.

This will result in a charge to our statement of operations for past duties, as well as for the additional duties we deferred or have not paid beginning on February 1, 2018 through the conclusion of the appeal process.

In addition, our loss of the appeal would result in increased duties paid in Canada on products imported into Canada and will increase our cost of sales and decrease our profitability unless we are able to pass higher prices on to our customers.

In addition, our loss of the appeal could result in increased duties paid in Canada on products imported into Canada and could increase our cost of sales and decrease our profitability unless we are able to pass higher prices on to our customers.

This could have an adverse effect on our results of operations.

Changes in tax legislation or exposure to additional tax liabilities could impact our business.

The recent changes in the U.S.

presidency and control of Congress could result in changes to U.S.

The change in the U.S.

presidency and control of Congress last year could result in changes to U.S.

tax laws that would have a negative impact on our results of operations.

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● general conditions in the securities markets.

We may not be able to provide financial forecasts and, if we do provide them, our actual financial results might vary from our publicly disclosed financial forecasts.

Our actual financial results might vary from our publicly disclosed financial forecasts.

From time to time, we have publicly disclosed financial forecasts.

Our forecasts reflect numerous assumptions concerning our expected performance, as well as other factors that are beyond our control and that might not turn out to be correct.

a result, variations from our forecasts could be material.

As a result, variations from our forecasts could be material.

Our financial results are subject to numerous risks and uncertainties, including those identified throughout this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K and in the documents incorporated by reference in this Annual Report.

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Similar to many other companies in our industry, we did not provide financial forecasts for the full fiscal 2021 year or for the first three quarters of fiscal 2021 due to uncertainty surrounding the financial impact of the COVID-19 pandemic on our business.

While we have provided a financial forecast for the first quarter of fiscal 2022, we have decided to not to provide financial forecasts for the full fiscal 2022 year at this time.

We do not have any responsibility to do so going forward or to update any of our forward-looking statements at such times or otherwise.

We cannot predict if or when we will resume providing financial forecasts.

We do not have any responsibility to provide financial forecasts going forward or to update any of our forward-looking statements at such times or otherwise.

If our goodwill, trademarks and other intangibles become impaired, we may be required to record charges to earnings.

As of January 31, 2022, we had goodwill, trademarks and other intangibles in an aggregate amount of $747.2 million, or approximately 27% of our total assets and approximately 49% of our stockholders’ equity.

Approximately $621.7 million of our goodwill, trademarks and other intangibles was recorded in connection with our acquisition of DKI.

Approximately $621.7 million of our goodwill, trademarks and other intangibles was recorded in connection with our acquisition of DKNY and Donna Karan.

Under accounting principles generally accepted in the United States (“GAAP”), we review our goodwill and other indefinite life intangibles for impairment annually as of January 31 of each fiscal year and when events or changes in circumstances indicate the carrying value may not be recoverable due to factors such as reduced estimates of future cash flows and profitability, increased cost of debt, slower growth rates in our industry or a decline in our stock price and market capitalization.

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We may be required to record a significant charge to earnings in our financial statements during a period in which an impairment of our goodwill is determined to exist which would negatively impact our results of operations and could negatively the market price of our securities.

Similar to many companies in our industry, our market capitalization was negatively impacted during certain periods during fiscal 2021 as stock prices dropped dramatically during the first quarter of fiscal 2021.

The uncertainty caused by the COVID-19 outbreak made it impracticable to forecast our business with any certainty during fiscal 2021.

Due to the impact of the COVID-19 pandemic on our operations, we performed a quantitative test of our goodwill and indefinite-lived intangible assets as of April 30, 2020.

There were no impairments identified as of April 30, 2020.

We performed either a qualitative evaluation or a quantitative test at January 31, 2021 and, while future impairment was not deemed to be a risk as of that date, the continuing uncertainty caused by the pandemic could require us to periodically evaluate the value of our intangibles with indefinite lives, including trademarks, goodwill and other long-lived assets, which could result in impairments to such assets in the future.

Risks Related to Our Indebtedness

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We have issued $400 million of Senior Secured Notes and are party to the ABL Credit Agreement that provides for borrowings of up to $650 million, subject to borrowing base availability.

In addition, we also incurred $125.0 million of debt pursuant to the LVMH Note that constituted a portion of the purchase price for the acquisition of DKI.

In addition, we also incurred $125.0 million of debt pursuant to the LVMH Note that constituted a portion of the purchase price for the acquisition of DKNY and Donna Karan.

Our significant amount of debt and our debt service obligations could limit our ability to satisfy our obligations, limit our ability to operate our business and impair our competitive position.

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and world-wide economies and on our business.

Interest rates increased in fiscal 2019, but decreased in fiscal 2020 and fiscal 2021.

Interest rates are expected to increase in fiscal 2023.

We cannot predict the future level of interest rates or the effect of any increase in interest rates on the availability or aggregate cost of our borrowings.

Even if the general level of interest rates does not increase, we expect to incur more interest and other charges as a result of the higher interest rates and fees to be paid in connection with the Senior Secured Notes and ABL Credit Agreement compared to the interest rates and fees that were paid in connection with the term loan and revolving credit facility that were replaced by the Senior Secured Notes and ABL Credit Agreement.

We cannot be certain that any additional required financing, whether debt or equity, will be available in amounts needed or on terms acceptable to us, if at all.

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Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control.

We cannot assure you that we will maintain a level of cash flows from

operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including under the Senior Secured Notes or the ABL Credit Agreement.

We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including under the Senior Secured Notes or the ABL Credit Agreement.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness.

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In particular, the ABL Credit Agreement contains provisions that require us, upon the sale of certain assets, to apply all of the proceeds from such asset sale to the prepayment of amounts due under that Agreement.

The mandatory prepayment obligations under the ABL

Credit Agreement will be effectively senior to our obligations to make an asset sale offer with respect to the Notes under the terms of the indenture.

The mandatory prepayment obligations under the ABL Credit Agreement will be effectively senior to our obligations to make an asset sale offer with respect to the Notes under the terms of the indenture.

Our credit rating and ability to access well-functioning capital markets are important to our ability to secure future debt financing on acceptable terms.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors