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G-III Apparel swings to fourth quarter loss after buying Donna Karan fashion label
G-III Apparel Group Ltd. (NASDAQ:GIII) swung to a fourth quarter loss, reflecting costs associated with its acquisition of fashion label Donna Karan International.
Shares dropped 12.74% to US$20.00 in early US trading.
The clothing and accessories maker reported a net loss of US$20.1mln, or US$0.42 per share, in the three months to 31 January, compared to a net income of US$80mln, or US$0.16 per share, the same period a year earlier.
The company agreed to buy Donna Karan from LVMH Moët Hennessy Louis Vuitton SE last July for US$650mln including debt. The French luxury goods maker decided to sell the iconic brand after failing to turn around the struggling business.
G-III said the acquisition, completed in December 2016, included an additional interest expense of US
However, DKNY contributed a boost to sales in the last two months of the quarter. Net sales, which rose 14.4% to US$603mln from US$527mln, were also bouyed by the non-outerwear wholesale business, including new product launches and sales.
“This acquisition further bolsters our value proposition and strengthens our position as an all-season diversified apparel company with a broad portfolio of brands offered in multiple channels of retail distribution,” said Morris Goldfarb, chairman and chief executive of G-III.
“Our non-outerwear wholesale business performed well in the face of significant headwinds as the traditional retail environment has become increasingly disrupted as a result of evolving consumer buying behaviour and continued penetration of e-commerce.”
Goldfarb added that its near-term financial outlook reflects the dilutive impact of the acquisition but expects the mid-year re-launch of the
The company expects net income of between
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/175471/g-iii-apparel-swings-to-fourth-quarter-loss-after-buying-donna-karan-fashion-label-175471.html
