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G-III Apparel (GIII) to Acquire Sonia Rykiel Luxury Brand

G-III Apparel (GIII) agrees to buy the iconic European luxury fashion brand Sonia Rykiel. This will help the company boost its presence in the luxury...

This story originally appeared on Zacks

G-III Apparel Group, Ltd. GIII anchored by global power brands, such as Donna Karan and DKNY looks well poised to capture any growth opportunity that comes its way. In a latest development, the company announced that it agreed to acquire an iconic European luxury fashion brand Sonia Rykiel. Collaboration with this brand will enable G-III Apparel to further reinforce its global footprint in the luxury space. The deal is likely to be concluded by the end of October this year.

Sonia Rykiel is among the recognized figures of Parisian fashion who developed an iconic brand that defines the spirit of the modern woman. Founded in 1968, the Sonia Rykiel brand deals chiefly in clothing, accessories and fragrances. Per management, G-III Apparel intends to accelerate the relaunch of this brand with collections across several categories, mainly in Europe in the fall of next year.

Management believes that there is a major growth opportunity to unlock the brand’s inherent potential. G-III Apparel expects to leverage the present executive management group and infrastructure in Europe coupled with its own supply-chain expertise to scale and elevate the Sonia Rykiel business across areas like apparel, accessories and several other lifestyle categories. The aforesaid collaboration will help the company expand its product and lifestyle categories as well as fetch higher sales.

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What’s More?

G-III Apparel is armed with a robust portfolio of well-known brands, namely DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. Management expects the annual net wholesale sales potential for these five brands to be $4 billion.

The company is focused on incorporating a wider functionality in fabrics, intending to serve broader lifestyles. It is on track to add collections focusing on particular sports activities and high-performance fitness.

G-III Apparel is also witnessing momentum in casual categories with a potential to expand into the outdoor and sports market. The shoes and handbag categories are also growing steadily. The jeans category is a bright spot too. With respect to athleisure and sportswear, the company is consistently expanding its collections to cash in on the consumers' growing demand.

The company had also successfully launched the Karl Lagerfeld Paris women's brand across 75 doors at Macy's M. It remains on course to triple the distribution of its sportswear line to 250 doors by the end of fiscal 2022 and introduce a dress line to 75 doors by the forthcoming spring.

In addition, G-III Apparel’s digital business is constantly making a significant contribution to its results. Digital sales of the company’s products have been accelerating for a while now. Management is on track to unveil the revamped websites of DKNY and Karl Lagerfeld Paris.

It is continuously investing in data analytics capabilities to better know its customers across channels and boost their shopping experiences. The company has also been boosting its direct-to-consumer capabilities for some time now. Its restructured retail division is poised to attain profitability.

Buoyed by such strengths, shares of this New York-based company, which currently sports a Zacks Rank #1 (Strong Buy), have increased 25.2% in the year-to-date period, outperforming the industry’s 11.4% rally. You can see the complete list of today’s Zacks #1 Rank stocks here.

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