G-III Apparel (GIII) Shines on Digital Gains and Brand Power
G-III Apparel's (GIII) brand strength and robust business strategies appear encouraging. The company's digital business also looks good.
G-III Apparel Group, Ltd. GIII ranks among the recognized players in the Zacks Textile – Apparel industry, which is in the top 2% of all the Zacks Classified industries.
Shares of this New York-based company have increased 26.6% in the year-to-date period, outperforming the industry’s 13.1% growth. This presently Zacks Rank #1 (Strong Buy) company’s bullish run on the bourses is justified by its robust business strategies including digital progress and brand strength. You can see the complete list of today’s Zacks #1 Rank stocks here.
G-III Apparel is focused on growing its digital business with expansion in the distribution channel. Digital sales of the company’s products have been accelerating for a while now. Management is on track to launch the revamped websites of DKNY and Karl Lagerfeld Paris. These sites are likely to offer an immersive brand content to engage consumers, thus facilitating conversion to sales tools, such as virtual selling.
It is steadily investing in data analytics capabilities to better know its customers across channels and boost their shopping experiences. Management informed that the company is partnering with GEODIS, its logistics provider, to aid the direct-to-consumer capabilities. We believe that G-III Apparel’s digital business will continue to make significant contributions ahead.
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Regarding brand strength, the company is armed with a robust portfolio of recognized brands. Management remains optimistic about its five global power brands, namely DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. It expects the annual net wholesale sales potential for these five brands to be $4 billion.
In addition, it is witnessing continued strength in casual categories. These categories have a potential growth opportunity with expansion into the outdoor and sports market. Also, its broader lifestyle categories, such as dresses, more polished sportswear and wear-to-work clothing are impressive. The shoes and handbag categories also continue to grow while the jeans category is a bright spot too.
Recently, management announced that the company 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. Sonia Rykiel is among the recognized figures of Parisian fashion who developed an iconic brand that defines the spirit of the modern woman. G-III Apparel intends to accelerate the relaunch of this brand during the fall of next year with collections across several categories, mainly in Europe.
With respect to athleisure and sportswear, the company is consistently expanding its collections to cash in on the consumers' growing demand. It had also successfully unveiled the Karl Lagerfeld Paris women's brand across 75 doors at Macy's M. It remains on track 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 spring.
Given all the aforesaid tailwinds, we believe, G-III Apparel will continue to perform well and retain its solid momentum on the bourses. In addition, the Zacks Consensus Estimate for 2022 sales and earnings is currently pegged at $2.68 billion and $3.18, respectively. These estimates suggest corresponding growth of about 30% and 342% from the respective year-ago reported figures.
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