What changed in this filing

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Item 1A. Risk Factors

2023-03-27 compared with 2022-03-28 · 139 added, 163 removed, 463 unchanged (39% of the section changed)

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Furthermore, the COVID-19 pandemic (including federal, state and local governmental responses, broad economic impacts and market disruptions) has heightened risks discussed in the risk factors described in this Annual Report on Form 10-K.

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 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, 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 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;

● 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 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.

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.

The onset of additional COVID-19 waves threatens future periods of mandated store closures and additional restrictions on consumers that would limit commercial behavior.

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

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 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.

Risk Factors Relating to Our Wholesale Operations

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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.

Any adverse change in our relationship with PVH Corp.

and its Calvin Klein or Tommy Hilfiger brands, or inability to renew the license agreements for these brands, would have a material adverse effect on our results of operations.

As of January 31, 2023, 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.

Net sales of products under the Calvin Klein and Tommy Hilfiger brands constituted approximately 48.0% of our net sales in fiscal 2023 and approximately 50.7% of our net sales in fiscal 2022.

On November 30, 2022, we announced the extension of licenses for Calvin Klein and Tommy Hilfiger products.

The amendments to the license agreements for Calvin Klein and Tommy Hilfiger products provide for staggered extensions by category that expire beginning December 31, 2024 and continuing through December 31, 2027.

See the table in “Wholesale Operations-Licensed Products” above for information with respect to the new extension term, any potential renewal term or the existing current term for the Calvin Klein and Tommy Hilfiger license agreements.

PVH, the owner of these two brands, has indicated that it intends to produce these Calvin Klein and Tommy Hilfiger products itself once these license agreements expire.

Unless we are able to increase the sales of our other products, acquire new businesses and/or enter into other license agreements covering different products, the inability to renew the Calvin Klein and Tommy Hilfiger license agreements would cause a significant decrease in our net sales and 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 to granting us a license to produce and sell products, our licensors typically produce and sell their own products and may also grant licenses to third parties to produce and sell products.

If any of our licensors decides to “reposition” its products under the brands we license from them, introduce similar products under similar brand names or otherwise change the parameters of design, pricing, distribution, target market or competitive set, we could experience a significant downturn in that brand’s business, adversely affecting our sales and profitability.

sales and profitability.

Further, we are unable to control the quality of the products produced by our licensors and their other licensees.

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

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.

Our proprietary brands include DKNY, Donna Karan, Karl Lagerfeld, G.H.

Bass, Vilebrequin, Sonia Rykiel, 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.

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Our customers’ buying patterns, as well as the need to provide additional allowances to customers, could have a material adverse effect on our business, results of operations and financial condition.

Strategic initiatives undertaken by our customers, including developing their own private labels brands, selling national brands on an exclusive basis or reducing the number of vendors they purchase from, could also impact our sales to these customers.

Strategic initiatives undertaken by our customers, including developing their own private label brands, selling national brands on an exclusive basis or reducing the number of vendors they purchase from, could also impact our sales to these customers.

There is a trend among major retailers to concentrate purchasing among a narrowing group of vendors.

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group accounting for approximately 21.6% of our net sales in fiscal 2023, 23.9% of our net sales in fiscal 2022 and 20.9% of our net sales in fiscal 2021.

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.

In addition, TJX Companies accounted for approximately 15.4% of our net sales in fiscal 2023, 14.8% of our net sales in fiscal 2022 and 12.9% of our net sales in fiscal 2021.

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

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

Our retail operations segment reported an operating loss of $33.6 million in fiscal 2023, $24.8 million in fiscal 2022 and $126.8 million in fiscal 2021.

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 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.

We have recorded asset impairments in the past and may be required in the future to record impairments of fixed assets or right-of-use assets or incur other charges relating to our company-operated retail stores.

Impairment testing of our assets related to the operation of our retail stores requires us to make estimates about our future performance and cash flows that are inherently uncertain.

These estimates can be affected by numerous factors, including changes in economic conditions, our results of operations, and competitive conditions in the industry.

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 $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.

The recording of additional impairments or other charges in the future may have a material adverse impact on our business, financial condition and/or future results.

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

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 or may continue to report operating losses in our retail operations segment, which could adversely impact our business, results of operations and financial condition.

Leasing of significant amounts of real estate exposes us to possible liabilities and losses.

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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 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.

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We are investing in our digital business and seeking to increase the amount of business derived from our digital operations.

The successful operation and expansion of our digital business, as well as our ability to provide a positive shopping experience that will generate orders and drive subsequent visits, depends on operating an appealing digital platform and providing an efficient and uninterrupted operation of our order-taking and fulfillment operations.

providing an efficient and uninterrupted operation of our order-taking and fulfillment operations.

Risks associated with our digital business include:

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

● 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;

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

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Part of our growth strategy is to pursue acquisitions.

Our most recent acquisition resulted in our owning all of the interests in the parent company of Karl Lagerfeld.

The negotiation of potential acquisitions, as well as the integration of acquired businesses, could divert our management’s time and resources.

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If acquisitions disrupt our operations, our business may suffer.

We conduct certain of our operations through joint ventures.

Joint ventures could fail to meet our expectations or cease to deliver anticipated benefits.

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

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.

Joint ventures involve numerous risks, and could fail to meet our initial or ongoing expectations.

The anticipated synergies or other benefits of a joint venture may fail to materialize due to changing business conditions or changes in our business priorities or those of our joint venture partners.

Our joint venture partners, as well as any future partners, may have interests that are different from our interests that may result in conflicting views as to the conduct of the business or future direction of the joint venture.

In the event that we have a disagreement with a joint venture partner with respect to a particular issue to come before the joint venture, or as to the management or conduct of the business of the joint venture, we may not be able to resolve such disagreement in our favor.

Any such disagreement could have a material adverse effect on our interest in the joint venture, the business of the joint venture or the portion of our growth strategy related to the joint venture.

We may need additional financing to continue to grow.

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Historically, our wholesale business has been dependent on our sales during the third and fourth quarters.

Net sales during the third and fourth quarters accounted for approximately 64% of our net sales in fiscal 2022, 66% of our net sales in fiscal 2021 and 60% of our net sales in fiscal 2020.

Net sales during the third and fourth quarters accounted for approximately

60% of our net sales in fiscal 2023, 64% of our net sales in fiscal 2022 and 66% of our net sales in fiscal 2021.

We are highly dependent on our results of operations during the second half of our fiscal year.

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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.

There were numerous factors disrupting the shipping industry during fiscal 2023 that negatively affected transit times from our overseas suppliers.

These disruptions also affected our ability to import our product in a manner that allowed for timely delivery to our customers.

As a result of supply chain disruptions, we accelerated production schedules to allow for more lead time and to accommodate the anticipated extended transit times from our overseas suppliers in an effort to import our product in a manner that allowed for timely delivery to our customers.

As a result, our inventory levels are higher than in prior years.

Elevated inventory levels and lack of additional space in our distribution centers contributed to us incurring significant demurrage charges in our third fiscal quarter.

Demurrage charges are charges paid to steamship carriers for freight remaining in the terminal for longer periods than initially agreed upon.

These charges had a significant impact on our results of operations in our third fiscal quarter, and to a lesser extent, in our fourth fiscal quarter.

We expect that our inventory levels will be higher than normal through at least the first half of fiscal 2024.

As a result, we expect our warehouse operations may be less efficient, and we expect to incur additional labor and storage costs related to our inventory levels in the first half of fiscal 2024.

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.

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

The need of retailers to rationalize excess inventory could lead to discounts or excess promotional activities, which could adversely affect our results of operations.

In certain circumstances, such as in response to supply chain disruptions, companies in the apparel and retail industries that rely on the importation of merchandise may choose to accelerate their production schedule in order to meet expected customer demand, which can lead to higher inventory levels.

Higher marketplace inventories and a rapidly changing economic environment have caused retailers to rationalize their inventory levels.

As a result, retailers have increased promotional activity to reduce their inventory.

While we have planned for a certain amount of promotional activity, additional promotional activity in excess of what we have planned for could have an adverse effect on our results of operations.

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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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.

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, Karl Lagerfeld, Vilebrequin, G.H.

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

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Counterfeit products may reduce our net sales and may also damage our brands due to their lower quality.

If we are unable to protect, maintain or enforce our intellectual property rights against third parties, our business, financial condition and results of operations may be materially adversely affected.

If we are unable to protect, maintain or enforce our

intellectual property rights against third parties, our business, financial condition and results of operations may be materially adversely affected.

Furthermore, we cannot be certain that the conduct of our business does not and will not infringe, misappropriate or otherwise conflict with the intellectual property rights of others, and our efforts to enforce our trademark and other intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our trademark and other intellectual property rights.

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Risk Factors Relating to the Economy and the Apparel Industry

Recent and future economic conditions, including volatility in the financial and credit markets, may adversely affect our business.

Recent and future economic conditions, including volatility in the financial and credit markets, inflation and increases in interest rates, may adversely affect our business.

Economic conditions have affected, and in the future may adversely affect, the apparel industry and our major customers.

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.

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.

As a result, our reserves for doubtful accounts and write-offs of accounts receivable may increase.

Inflationary pressures have impacted the entire economy, including our industry.

We have experienced increased costs in many aspects of our business, including our product costs and freight.

During fiscal 2023, we have implemented price increases on many of our products.

Our price increases were an effort to mitigate the effect of higher costs, although, the impact of price increases on consumer demand and on our business and results of operations is uncertain.

We expect inflationary pressures to continue to impact our business throughout fiscal 2024.

Recent historic high rates of inflation, including increased fuel and food prices, have led to a softening of consumer demand and increased promotional activity

in our categories and may lead to further challenges to grow our sales.

Ongoing inflation may also negatively impact our cost structure and labor costs in the future.

The Federal Reserve raised interest rates multiple times in fiscal 2023 in response to concerns about inflation and it is expected to continue to raise interest rates in fiscal 2024.

Higher interest rates may increase the costs of our borrowing under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending.

Volatility in interest rates may adversely affect our business and our customers.

If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms.

The cyclical nature of the apparel industry and uncertainty over future economic prospects and consumer spending could have a material adverse effect on our results of operations.

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Retailers have also responded to the shift in the types of apparel purchased by consumers based on their adjusted lifestyle needs resulting from changes to the work environment and leisure activities caused by the COVID-19 pandemic.

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.

Uncertainties regarding future economic prospects, including as a result of concerns with respect to the possibility of a recession, the increase in interest rates or the COVID-19 pandemic, may affect consumer-spending habits and could have an adverse effect on our results of operations.

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.

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.

Various customers of ours, including Macy’s and Kohl’s, have reduced their store count and others have filed for bankruptcy.

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

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These types of decisions by our key customers could adversely affect our business.

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

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.

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.

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

States and world economies.

The imposition of additional sanctions by the United States and/or foreign governments, as well as the sanctions already in place, could lead to restrictions related to sales and our supply chain for which the financial impact is uncertain.

In addition, the war has also led to, and may lead to further, broader unfavorable macroeconomic implications, including unfavorable foreign exchange rates, increases in fuel prices, food shortages, a weakening of the European economy, lower consumer demand and volatility in financial markets.

These implications of the war in Ukraine could have a material adverse effect on our business and our results of operations.

Any other 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.

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.

Risks Related to the COVID-19 Pandemic

The COVID-19 pandemic has affected businesses around the world since our first quarter of fiscal 2021.

Federal, state and local governments in the United States and around the world, as well as private entities, mandated various restrictions, including closing of retail stores and restaurants, travel restrictions, restrictions on public gatherings, stay at home orders and advisories, and quarantining of people who may have been exposed to the virus.

The response to the COVID-19 pandemic negatively affected the global economy, disrupted global supply chains and created significant disruption of the financial and retail markets, including a disruption in consumer demand for apparel and accessories.

The continued impact of the COVID-19 pandemic on our business operations remains uncertain and cannot be predicted.

During fiscal 2022 and 2023, 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.

The extent to which COVID-19 impacts our results in fiscal 2024 will depend on continued developments in the United States and around the world in the public and private responses to the pandemic.

New information may emerge concerning the severity of the outbreak and the spread of variants of the COVID-19 virus in locations that are important to our business.

Actions taken to contain COVID-19 or treat its impact may change or become more restrictive if additional waves of infections occur.

The impact of COVID-19 on our business and operating results could differ materially from our assumptions based on a number of factors largely outside of our control.

Risks Related to Our International Operations

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The failure of these manufacturers to meet required quality standards could damage our relationships with our customers.

In addition, the failure by these manufacturers to ship products to us in a timely manner could cause us to miss the delivery date requirements of our customers.

In addition, the failure by these manufacturers to ship products to us in a timely manner could cause us to miss the delivery date requirements of our

The failure to make timely deliveries could cause customers to cancel orders, refuse to accept delivery of products or demand reduced prices.

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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 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.

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 37.6% of our inventory purchased in fiscal 2023, 34.2% of our inventory purchased in fiscal 2022 and 32.8% of our inventory purchased in fiscal 2021.

Products sourced from Vietnam represented approximately 31.4% of our inventory purchased in fiscal 2023, 32.2% of our inventory purchased in fiscal 2022 and 36.2% of our inventory purchased in fiscal 2021.

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

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.

In fiscal 2023, we sourced 25.7% and 15.2% of our purchases from two different vendors in Vietnam and in fiscal 2022, we sourced 35.5% and 17.1% of our purchases from two different vendors in Vietnam.

In fiscal 2023, we sourced 18.8% of our purchases from one vendor in China and 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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In addition, a manufacturer’s failure to comply with safety or content regulations and standards could result in substantial liability and harm to our reputation.

China’s Xinjiang Uyghur Autonomous Region (the “XUAR”) is a significant source of cotton and textiles for the global apparel supply chain.

The United States’ Uyghur Forced Labor Prevention Act (“UFLPA”) empowers the United States Customs and Border Protection Agency (the “US CBP”) to withhold release of items produced in whole or in part in the XUAR or produced by companies included on a government-created UFLPA entity list, creating a presumption that such goods were produced using forced labor.

We have established controls designed to preclude sourcing any products or materials from the XUAR (either directly or indirectly through our suppliers), and we prohibit our vendors from doing business with facilities in the XUAR If any of the vendors from which we purchase goods is found to have dealings, directly or indirectly, with entities operating in the XUAR, our products or materials (including potentially non-cotton materials) could be held or delayed by the US CBP, which could cause delays, impact our inventory levels and adversely affect our ability to timely deliver our products to our customers.

Our expansion into the European market exposes us to uncertain economic conditions in the Euro zone.

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, 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.

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

The economy in Europe is uncertain and potentially adversely affected by the impacts of the war in Ukraine and 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.

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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, or of our newly acquired Sonia Rykiel brand, 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, Vilebrequin and Sonia Rykiel businesses, as well as of the recently acquired Karl Lagerfeld brand, and successfully expand into international markets, is subject to risks associated with international operations.

These include:

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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”) 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 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.

The California Privacy Rights Act (“CPRA”) and the California Consumer Privacy Act (“CCPA”) regulate how we may collect, use, and process personal data of California residents, and provide California residents with certain rights regarding their personal data.

To comply with the CPRA and CCPA, we updated our data processing practices and policies.

However, these laws may require that we further modify our data processing practices and policies and incur substantial compliance-related costs and expenses.

Other states have enacted similar data privacy laws and additional states may do so in the future as the U.S.

state privacy landscape continues to evolve.

Non-compliance with these laws could result in penalties or significant legal liability.

Although we make reasonable efforts to comply with all applicable laws and regulations, there can be no assurance that we will not be subject to regulatory action, including fines, in the event of non-compliance.

If we fail to comply with these laws and regulations, we may additionally be subject to claims, or other obligations, as well as financial and reputational damage, which could impact our business, financial condition and results of operations.

Any limitations imposed on the use of customer information by federal, state, local or foreign governments, could have an adverse effect on our future marketing activities.

If we fail to comply with applicable laws and regulations, we may be subject to legal exposure, as well as financial and reputational damage, which could impact our business, financial condition and results of operations.

Any additional limitations imposed on the use of consumer information by federal, state, local or foreign governments, could have an adverse effect on our future marketing activities.

Governmental focus on data security and/or privacy may lead to additional legislation or regulations.

As a result, we may have to modify our business to further improve data security and privacy compliance, which would result in increased expenses and operating complexity, or in ways that negatively affect our or our third-party service providers’ business, results of operations or financial condition.

To the extent our, or our business partners’, security procedures and protection of customer information prove to be insufficient or inadequate, we may become subject to litigation or other claims, fines, penalties or other obligations, which could expose us to liability and cause damage to our reputation, brand and results of operations.

To the extent our, or our business partners’, security procedures and protection of consumer information prove to be insufficient or inadequate, we may become subject to litigation or other claims, fines, penalties or other obligations, which could expose us to liability and cause damage to our reputation, brand and results of operations.

We are subject to rules relating to the processing of credit card payments.

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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.

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.

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.

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

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The level of tariffs on these product categories was later increased to 25% beginning May 10, 2019.

Section 301 tariffs were set to expire in July and August of 2022, but were extended through September 30, 2023.

In May 2022, the Special Trade Representative invited public comments as to the effects of the tariffs and exclusions on different industries.

The government closed its most recent round of comments in January 2023 and is evaluating whether additional comments are necessary.

While the government considers these comments, it is not known which duties will or will not be continued, whether new products will be added to the scope of the tariffs, or whether duties will fluctuate in amount.

On August 1, 2019, the United States government announced new 10% tariffs that cover the remaining estimated $300 billion of inbound trade from China, including most of our apparel products.

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For fiscal 2022, approximately 34.2% of the products that we sold were manufactured in China.

The United States government continues to negotiate with China with respect to a “phase two” trade agreement, which could lead to the removal, lowering or postponement of the additional tariffs.

and China are not able to resolve their differences, additional tariffs may be put in place and additional products may become subject to tariffs.

Tariffs on additional products imported by us from China would increase our costs, could require us to increase prices to our customers and would cause us to seek price concessions from our vendors.

Following accusations against China that it employed forced labor in manufacturing processes within the country, a bill was introduced in January 2023 to strip China of its permanent Most Favored Nation status, effectively requiring China to re-secure its position by annually applying for presidential approval as a member country.

Because Most Favored Nation status grants special treatment among member counties with respect to tariffs, if this bill were to pass it would substantially increase tariffs between the United States and China.

and China are not able to resolve their differences, additional tariffs or quotas may be put in place and additional products may become subject to tariffs.

Tariffs or quotas on additional products imported by us from China would increase our costs, could require us to increase prices to our customers and would cause us to seek price concessions from our vendors.

If we are unable to increase prices to offset an increase in tariffs, this would result in our realizing lower gross margins on the products sold by us and will negatively impact our operating results.

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These efforts may not enable us to offset the adverse effects of any increases in tariffs.

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.

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.

We have been audited by the Canadian Border Services Agency (“CBSA”) and are in the process of appealing the CBSA ruling.

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 (“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 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 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.

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Other Risks Relating to Ownership of Our Common Stock

The increased focus by stakeholders on corporate responsibility issues, including those associated with environmental, social and governance issues, could negatively affect our business and operations.

Our business is susceptible to risks associated with climate change, including through disruption to our supply chain, potentially impacting the production and distribution of our products and availability and pricing of raw materials.

There is also increased focus from our stakeholders, including consumers, employees and investors, on corporate responsibility matters associated with environmental, social and governance issues.

Although we have announced our corporate responsibility strategy and increased focus on these issues, there can be no assurance that our stakeholders will agree with our strategy or that we will be successful in achieving our goals.

Failure to implement our strategy or achieve our goals could damage our reputation, causing our investors or consumers to lose confidence in us and our brands, and negatively impact our operations.

The increased focus by stakeholders on corporate responsibility issues, including those associated with environmental, social and governance issues, as well as matters of significance related to sustainability, could result in additional costs or risks and adversely impact our reputation.

There is an increased focus from our stakeholders, including consumers, employees and institutional investors, on corporate social responsibility matters, which we refer to as CSR, associated with environmental, social and governance issues and sustainability practices.

Although we have disclosed our corporate social responsibility strategy and increased focus on these issues, there can be no assurance that our stakeholders will agree with our strategy or that we will be successful in achieving our goals.

If our CSR practices do not meet investor or other industry stakeholder expectations and standards, which continue to evolve, our brands, reputation and customer and employee retention may be negatively impacted.

It is possible that stakeholders may not be satisfied with our CSR practices or the speed of adoption.

We could also incur additional costs and require additional resources to monitor, report and comply with our CSR practices.

In addition, our failure, or perceived failure, to meet the standards included in any sustainability disclosure could negatively impact our reputation, employee retention and the willingness of our customers and suppliers to do business with us.

Our processes and controls for reporting CSR and sustainability matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting related metrics, including related disclosures that may be required by the SEC, European and other regulators., Such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.

New government regulations could also result in new or more stringent forms of oversight and expanded mandatory and voluntary reporting, diligence, and disclosure.

Failure to comply with governmental regulations, implement our strategy or achieve our goals could damage our reputation, causing our investors or consumers to lose confidence in us and our brands, and negatively impact our operations.

The price of our common stock has fluctuated significantly and could continue to fluctuate significantly.

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● changes in tariff and trade policies;

● actual or perceived adverse effects from the coronavirus outbreak;

● actual or perceived adverse effects from the COVID-19 pandemic;

● general conditions in our industry;

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We take no responsibility for any losses suffered as a result of such changes in our stock price.

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.

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 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.

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

We recorded significant charges for the impairment of goodwill during the fourth quarter of fiscal 2023 which caused us to report a net loss for fiscal 2023.

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

As of January 31, 2023, we had trademarks and other intangibles in an aggregate amount of $663.0 million, or approximately 24% of our total assets and approximately 48% of our stockholders’ equity.

Approximately $395.5 million of our trademarks and other intangibles was recorded in connection with our acquisition of DKNY and Donna Karan and approximately $182.6 million of our trademarks and other intangibles was recorded in connection with our recent acquisition of Karl Lagerfeld.

A significant decline in our stock price and market capitalization or deterioration in our projected results could result in an impairment of our trademarks and/or other intangibles, or any future goodwill.

Other events or changes may 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 or slower growth rates in our industry.

Estimates of future cash flows and profitability are based on an updated long-term financial outlook of our operations.

However, actual performance in the near-term or long-term could be materially different from these forecasts, which could impact future estimates.

A significant decline in our market capitalization or deterioration in our projected results could result in an impairment of our goodwill, trademarks and/or other intangibles.

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.

As of January 31, 2023, we were required to record a $347.2 million charge to earnings in our financial statements as our goodwill was determined to be fully impaired as a result of our decline in market capitalization.

We may be required to record additional significant charges to earnings in our financial statements during a period in which an impairment of our trademarks and other intangible assets is determined to exist which could negatively affect the market price of our securities.

Risks Related to Our Indebtedness

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and world-wide economies and on our business.

Interest rates are expected to increase in fiscal 2023.

Interest rates increased in fiscal 2023 and are expected to increase in fiscal 2024.

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.

Higher interest rates increase the cost of our borrowings under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending.

Volatility in interest rates may adversely affect our business or our customers.

If interest rates continue to increase, our capacity to obtain necessary liquidity may be negatively impacted.

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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The borrowings under the ABL Credit Agreement will be at variable rates of interest and expose us to interest rate risk.

If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease.

Interest rates increased in fiscal 2023 and are expected to continue to increase in fiscal 2024.

As a result, our debt service obligations on our variable rate indebtedness increased.

Our net income and cash flows, including cash available for servicing our indebtedness decreased due to the increase in our debt service obligations.

Assuming all revolving loans were fully drawn under the ABL Credit Agreement, each one percentage point change in interest rates would result in a $6.5 million change in annual cash interest expense under the ABL Credit Agreement.

Financing extended to us under the ABL Credit Agreement is made at variable rates that use LIBOR or an alternate base rate (as determined by that Agreement) as a benchmark for establishing the interest rate.

LIBOR is the subject of recent proposals for reform.

The financial authority that regulates LIBOR has announced that it intends to stop persuading or compelling banks to submit rates for the calculation of LIBOR after 2021.

These reforms may cause LIBOR to cease to exist, new methods of calculating LIBOR to be established or the establishment of an alternative reference rate(s).

These consequences cannot be entirely predicted and could have an adverse impact on the market value for or value of LIBOR-linked securities, loans, and other financial obligations or extensions of credit to us.

LIBOR quotations will cease as of June 30, 2023.

We are in the process of transitioning the reference rate used in our ABL Credit Agreement from LIBOR to the Secured Overnight Financing Rate.

We expect this transition to be completed prior to the date LIBOR quotations cease.

The consequences of the change in the reference rate cannot be entirely predicted and could have an adverse impact on the market value for or value of LIBOR-linked securities, loans, and other financial obligations or extensions of credit to us.

Changes in market interest rates may influence our financing costs and could reduce our earnings and cash flows.

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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