G-III Apparel Group, Ltd. (GIII) 2006年年度報告「NASDAQ」.pdf

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1、G-I I IA P PA R E L G R O U P,LT D.G-I I I A P PA R E L G R O U P,LT D.WWW.G-III.COM2 0 0 6 A N N UA L R E P O R T F O R M 1 0-KWOMENSM E N SS P O R T S G-I I IAPPAREL GROUP,LTD.G-I I I A P PA R E L G R O U P,LT D.WWW.G-III.COM2 0 0 5 A N N UA L R E P O R T F O R M 1 0-KWOMENSM E N SS P O R TSG-I I

2、IA P PA R E L G R O U P,LT D.TOUCHG-III SPORTKENNETH COLEGUESSSEAN JOHNKENNETH COLEG-III SPORTNINE WESTEXSTOCOLE HANNB OA R D O F D I R E C TO R SMorris GoldfarbChairman and Chief Executive OfficerG-III Apparel Group,Ltd.Sammy AaronVice ChairmanG-III Apparel Group,Ltd.Thomas J.BrosigSenior Vice-Pres

3、identPark Place Entertainment,RetiredPieter DeitersDirector of Royal Ten Cate B.V.,Berghave B.V.Venture Capital,Bandolera B.V.,Tootal B.V.,Lowland Fashion Investments B.V.Alan FellerExecutive Vice-PresidentG-III Apparel Group,Ltd.,RetiredCarl KatzExecutive Vice-PresidentSiena Leather,Ltd.,RetiredLau

4、ra PomerantzPrincipal,PBSRealty Advisors,LLCWillem van BokhorstManaging PartnerSTvB AdvocatenRichard WhiteManaging DirectorOppenheimer&Co.Inc.Private Equity Investment DepartmentCO R P O R AT E O F F I C E R SMorris GoldfarbChairman and Chief Executive OfficerSammy AaronVice ChairmanJeanette NostraP

5、residentWayne S.MillerChief Operating OfficerNeal S.NackmanChief Financial OfficerCO R P O R AT E I N F O R M AT I O NCORPORATE OFFICE512 7th AvenueNew York,New York 10018AUDITORSErnst&Young L.L.P.5 Times SquareNew York,New York 10036LEGAL COUNSELFulbright&Jaworski L.L.P.666 Fifth AvenueNew York,New

6、 York 10103CORPORATE STOCK LISTINGNASDAQ Global Market Symbol:GIIIREGISTRAR AND TRANSFER AGENTWells Fargo Bank Minnesota,N.A.Stock Transfer161 North Concord ExchangeSouth St.Paul,Minnesota 55075-0738ANNUAL MEETINGThe Annual Meeting of Shareholders will be held at the offices of:FULBRIGHT&JAWORSKI L.

7、L.P.,666 Fifth Avenue,New York,NY 10103,24th floor at 10:00 A.M.on Thursday,June 7,2007.All shareholders are cordially invited to attend.SHAREHOLDER INFORMATION G-I I IAPPAREL GROUP,LTD.TOUCHG-III SPORTKENNETH COLEGUESSSEAN JOHNKENNETH COLEG-III SPORTNINE WESTEXSTOCOLE HANNB OA R D O F D I R E C TO

8、R SMorris GoldfarbChairman and Chief Executive OfficerG-III Apparel Group,Ltd.Sammy AaronVice ChairmanG-III Apparel Group,Ltd.Thomas J.BrosigSenior Vice-PresidentPark Place Entertainment,RetiredPieter DeitersDirector of Royal Ten Cate B.V.,Berghave B.V.Venture Capital,Bandolera B.V.,Tootal B.V.,Lowl

9、and Fashion Investments B.V.Alan FellerExecutive Vice-PresidentG-III Apparel Group,Ltd.,RetiredCarl KatzExecutive Vice-PresidentSiena Leather,Ltd.,RetiredLaura PomerantzPrincipal,PBSRealty Advisors,LLCWillem van BokhorstManaging PartnerSTvB AdvocatenRichard WhiteManaging DirectorOppenheimer&Co.Inc.P

10、rivate Equity Investment DepartmentCO R P O R AT E O F F I C E R SMorris GoldfarbChairman and Chief Executive OfficerSammy AaronVice ChairmanJeanette NostraPresidentWayne S.MillerChief Operating OfficerNeal S.NackmanChief Financial OfficerCO R P O R AT E I N F O R M AT I O NCORPORATE OFFICE512 7th A

11、venueNew York,New York 10018AUDITORSErnst&Young L.L.P.5 Times SquareNew York,New York 10036LEGAL COUNSELFulbright&Jaworski L.L.P.666 Fifth AvenueNew York,New York 10103CORPORATE STOCK LISTINGNASDAQ Global Market Symbol:GIIIREGISTRAR AND TRANSFER AGENTWells Fargo Bank Minnesota,N.A.Stock Transfer161

12、North Concord ExchangeSouth St.Paul,Minnesota 55075-0738ANNUAL MEETINGThe Annual Meeting of Shareholderswill be held at the offices of:FULBRIGHT&JAWORSKI L.L.P.,666 Fifth Avenue,New York,NY 10103,24th floor at 10:00 A.M.on Thursday,June 7,2007.All shareholders arecordially invited to attend.SHAREHOL

13、DER INFORMATIONCALVIN KLEINCALVIN KLEIN LETTER TO SHAREHOLDERSDear Shareholders,Fiscal2007was,simply put,thestrongest year in the history of our com-pany.Our core outerwear performed wellacross every tier of distribution.Weacquired great new licenses in non-out-erwear categories to further diversify

14、our product offerings and added busi-ness for Wal-Marts Exsto label,an urbaninspired young mens junior brand.Wetook advantage of our scale andmomentum to drive significant prof-itability gains.We also accessed the cap-ital markets twice in the past year toenhance the strength of our balancesheet and

15、 to position us for additionalgrowth.All of the above are part of ourstrategy of becoming an all season,diversified apparel company.Our financial results speak for them-selves.For the full year,we grew our netsales by31.8%to$427million.Our netincome increased 86.0%to$13.2millionfrom$7.1million and o

16、ur earnings pershare increased by 62.1%to$0.94pershare from$0.58 per share.We continue to be mindful of the sea-sonality inherent in our core outerwearbusiness,which represents a substantialmajority of our total sales volume.As you can appreciate,we faced somesignificant challenges as this past fall

17、and winter was one of the warmest onrecord for the United States.Despitewhat could have been a tough season,we still achieved excellent financialresults.The strength,diversification anddistribution of our outerwear brandswere important factors in achieving oursuccess this past year.Although we expec

18、t to continue to growour outerwear business,we also expectthat our reliance on this category willgradually be reduced.We believe thatour licenses for Calvin Klein dresses andwomens suits,as well as the sportswearprograms we are conducting for theExsto brand sold at Wal-Mart and for theSean John bran

19、d will play importantroles in our all season strategy.We have significant strengths in ourdesign department,our sales team andour management for these new areas ofbusiness.We expect our strongest ratesof sales growth to occur in our non-out-erwear businesses.We believe that thelessened effect of sea

20、sonality andgreater diversity in product mix that are expected to result from these effortswill help us to drive further profitabilityincreases.In July 2006,we completed a privateplacement for approximately$15 millionof new equity.This gave us additionalworking capital flexibility in pursuinggrowth

21、opportunities.The financial mar-kets rewarded us for our performanceand,in March 2007,we completed apublic offering that resulted in net pro-ceeds to us of an additional$36.3mil-lion.Our combination of strong funda-mental performance,significant opportu-nities for growth and additional capitalhas in

22、creased our ability to continue toserve our shareholders.We have built and reinforced a talentedmanagement team and a deep organiza-tion.Over the past six years,we havecompleted four acquisitions.In additionto the sales and cash flow they havecontributed,these acquisitions haveinfused our organizati

23、on with new ideasand a great deal of energy.We believethat our entire company is striving tofulfill its potential and is dedicated toour future success.We believe that fiscal 2008will prove tobe another excellent year.We are dedi-cated to further diversifying and maxi-mizing our opportunities.We exp

24、ect toexpand and build on the new range ofcapabilities we have in womens andmens sportswear,womens suits anddresses.Our long-term mission is tokeep our core outerwear businessstrong,while also growing our other cat-egories of product.Our goal is tobecome an all season,highly diversified,full-range a

25、pparel company capable ofachieving profitability throughout theyear.This is a very exciting time in ourdevelopment and we believe that we willprove capable of continuing to drivevalue to our shareholders as we go for-ward.We thank you for your supportand we look forward to continuing ourpartnership

26、with you.Best regards,Morris GoldfarbChairman and Chief Executive Officer*Includes a charge of$3.4 million,net of tax,associated withexpenses related to closing the Companys manufacturing facility in Indonesia.*Includes a charge of$0.9 million,net of tax,associated with thesale of a joint venture in

27、terest in China.*All share and per share amounts have been adjusted to giveretroactive effect to a three-for-two split of our Common Stock effective on March 28,2006.NET SALES($000s)0604050307450,000400,000350,000300,000250,000200,000150,000100,00050,000(Years Ended January 31)0604050307$1.00$0.80$0

28、.60$0.40$0.20DILUTED NET INCOME PER SHARE*$.03*$.76$.06*$.58$.94(Years Ended January 31)F I S C A L Y E A R S E N D E D JA N UA RY 3 12 0 0 32 0 0 42 0 0 52 0 0 62 0 07Net Sales$203,301$225,061$214,278$324,072$427,017 Net Income$382(a)$8,376$703(b)$7,092$13,189Diluted Net Income Per Share(c)$0.03(a)

29、$0.76$0.06(b)$0.58$0.94Working Capital$47,260$57,388$59,868$61,197$81,858Total Assets$70,956$80,696$80,595$138,317$173,530Stockholders Equity$55,748$65,272$66,930$82,011$115,642Return on Stockholders Equity 0.7%13.9%1.1%8.6%13.6%Common Shares Outstanding(c)10,31410,65510,91612,33414,163(excluding sh

30、ares held in Treasury)FINANCIAL HIGHLIGHTS(000S EXCEPT PER SHARE DATA)(a)Includes a charge of$3.4 million,net of tax,associated with expenses related to closing the Companys manufacturing facility in Indonesia.(b)Includes a charge of$0.9 million,net of tax,associated with the sale of a joint venture

31、 interest in China.(c)All share and per share amounts have been adjusted to give retroactive effect to a three-for-two split of our Common Stock effective on March 28,2006.UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K?ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE

32、SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended January 31,2007ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OFTHE SECURITIES EXCHANGE ACT OF 1934For the transition period fromtoCommission file number 0-18183G-III APPAREL GROUP,LTD.(Exact name of registrant as specified in its charter)

33、Delaware41-1590959(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)512 Seventh Avenue,New York,New York10018(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code:(212)403-0500Securities registered pursuant to

34、Section 12(b)of the Act:NoneSecurities registered pursuant to Section 12(g)of the Act:Common Stock,$.01 par value.Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.YesNo?Indicate by check mark if the registrant is not required to fi

35、le reports pursuant to Section 13 or 15(d)of the Act.YesNo?Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)ofthe Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant wasrequired

36、to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes?NoIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405 of thischapter)is not contained herein,and will not be contained,to the best of registrants kno

37、wledge,in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark if the registrant is a large accelerated filer,an accelerated filer,or a non-accelerated filer.Seedefinition of accelerated filer and

38、large accelerated filer in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filerAccelerated filerNon-accelerated filer?Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).YesNo?As of July 31,2006,the aggregate market value of the registr

39、ants voting stock held by non-affiliates of the registrant(based on the last sale price for such shares as quoted by the Nasdaq Global Market)was approximately$66,910,074.The number of outstanding shares of the registrants Common Stock as of March 31,2007 was 16,047,845.Documents incorporated by ref

40、erence:Certain portions of the registrants definitive Proxy Statement relating to theregistrants Annual Meeting of Stockholders to be held on or about June 7,2007,to be filed pursuant to Regulation 14Aof the Securities Exchange Act of 1934 with the Securities and Exchange Commission,are incorporated

41、 by reference intoPart III of this Report.ITEM 1.BUSINESS.Unless the context otherwise requires,G-III,us,we and our refer to G-III Apparel Group,Ltd.and its subsidiaries.References to fiscal years refer to the year ended or ending on January 31 of thatyear.For example,our fiscal year ended January 3

42、1,2007 is referred to as fiscal 2007.Our Internetaddress is www.g-.All share and per share information in this Annual Report has been adjusted to give retroactiveeffect to a three-for-two stock split of our Common Stock in March 2006.OverviewG-III designs,manufactures and markets an extensive range

43、of outerwear and sportswear,includingcoats,jackets and pants,as well as womens suits and dresses.We sell our products under licensed brands,our own proprietary brands and private retail labels.We provide high quality apparel under recognizedbrands to retailers such as Macys,Nordstrom and Saks.We dis

44、tribute our products through a diverse mixand a large number of retailers at a variety of price points.Licensed brands have been an important part of our strategy for over 10 years.We currently havelicenses to produce branded fashion apparel,including,among others,under the Calvin Klein,Sean John,Ke

45、nneth Cole,Cole Haan,Guess?,Jones New York,Nine West,Ellen Tracy,IZOD,House of Deronand Tommy Hilfiger labels.We also have licenses to produce branded sports apparel containingtrademarks of the National Football League,National Basketball Association,Major League Baseball,National Hockey League,Loui

46、sville Slugger,World Poker Tour and over 100 U.S.colleges anduniversities.We work with leading retailers,such as Federated,Wal-Mart,JC Penney and Kohls,in developingproduct lines to be sold under their own proprietary private labels.In March 2006,we announced that wehad expanded our relationship wit

47、h Wal-Mart to design and produce a new young mens and boysbranded urban sportswear line under its Exsto label.We began shipping Exsto product duringJuly 2006 and are shipping to over 500 Wal-Mart locations.We also produce apparel under our ownproprietary brands,including Marvin Richards,G-III,Black

48、Rivet,Siena Studio,Colebrook,G-III byCarl Banks,Winlit,NY 10018 and La Nouvelle Renaissance.In July 2005,we acquired the business of Marvin Richards and the operating assets of Winlit Group,Ltd.As a result of the Marvin Richards acquisition,we added licenses for mens and womens outerwearunder the Ca

49、lvin Klein brand name,as well as Marvin Richards own proprietary labels.As a result ofacquiring Winlits assets,we added licenses for mens and womens outerwear under the Guess?brand,mens leather outerwear under the Tommy Hilfiger brand and womens outerwear under the Ellen Tracybrand.We also acquired

50、Winlits own proprietary labels.In addition,we added significant management,merchandising,manufacturing and design expertise as a result of these acquisitions.As an immediate benefit of our acquisition of Marvin Richards,we expanded our relationship withCalvin Klein by entering into license agreement

51、s in September 2005 to manufacture and distributewomens better suits,and in April 2006 to manufacture and distribute womens dresses,under the CalvinKlein label.We operate our business in two segments,licensed apparel and non-licensed apparel.The licensedapparel segment includes sales of apparel bran

52、ds licensed by us from third parties.The non-licensedapparel segment principally includes sales of apparel under our own brands and private label brandsowned by retailers.See Note M to our Consolidated Financial Statements for financial information withrespect to these segments.We are a Delaware cor

53、poration that was formed in 1989.We and our predecessors have conductedour business since 1974.1Competitive StrengthsOur broad portfolio of high-profile brands combined with our extensive distribution relationshipspositions us for growth.We intend to capitalize on the following competitive strengths

54、 in order to achieveour goal of creating an all-season diversified apparel company:Broad portfolio of recognized brands.Over the past 10 years,we have built a broad and deepportfolio of over 25 licensed and proprietary brands.We believe we are a licensee of choice forwell-known brands that have buil

55、t a loyal following of both fashion-conscious consumers and retailerswho desire high quality,well designed apparel.We have selectively added the licensing rights to premierbrands in womens,mens and sports categories catering to a wide range of customers.In an environmentof rapidly changing consumer

56、fashion trends,we benefit from a balanced mix of well-established andnewer brands.In addition to our licensed brands,we own several successful proprietary brands.Ourexperience in developing our licensed brands and our own proprietary labels,as well as our reputation forproducing high quality,well-de

57、signed apparel,has led major department stores and retailers,includingFederated,Wal-Mart,JC Penney and Kohls,to select us as a designer and manufacturer for their privatelabel programs.We currently market apparel under the following licensed and proprietary brand names:WomensMensSportsLicensed Brand

58、sCalvin KleinCalvin KleinNational Football Leagueck Calvin Kleinck Calvin KleinMajor League BaseballKenneth Cole NYKenneth Cole NYNational Basketball AssociationReaction Kenneth ColeReaction Kenneth ColeNational Hockey LeagueSean JohnSean JohnCollegiate Licensing CompanyCole HaanCole HaanLouisville

59、SluggerGuessGuessWorld Poker TourGuess?Guess?House of DeronIZODJones New YorkTommy HilfigerJones NY CollectionNine WestEllen TracyCompany Ellen TracyIZODProprietary BrandsG-IIIG-IIIG-III Sports by Carl BanksBlack RivetBlack RivetMarvin RichardsColebrookWinlitWinlitColebrookNY 10018La Nouvelle Renais

60、sanceLNRSiena StudioDiversified distribution base.We market our products at multiple price points and across multiplechannels of distribution,allowing us to provide products to a broad range of consumers,while reducingour reliance on any one demographic segment,merchandise preference or distribution

61、 channel.Ourproducts are sold to approximately 2,400 customers,including leading department and specialty storessuch as Macys,Nordstrom and Saks,mid-tier and mass merchants such as Wal-Mart,JC Penney,Targetand Kohls,and membership clubs such as Costco and Sams Club.As a result of our broad distribut

62、ionplatform,we are a licensee and supplier of choice and can more easily adapt to changes in the retail2environment.In addition,we believe our strong relationships with retailers have been established throughmany years of personal customer service and adherence to meeting or exceeding retailer expec

63、tations.Superior design,sourcing and quality control.Our in-house design and merchandising team of over100 professionals designs substantially all of our licensed,proprietary and private label products.Ourdesigners work closely with our licensors and private label customers to create designs and sty

64、les thatrepresent the look they want.We believe that our creative design team and our sourcing expertise giveus an advantage in product development.We have a network of worldwide suppliers that allows us tonegotiate competitive terms without relying on any single vendor.In addition,we employ a 25-pe

65、rsonquality control team and a 33-person sourcing group in China to ensure the quality of our products.Webelieve we have developed a significant customer following and positive reputation in the industry as aresult of our design capabilities,sourcing expertise,on-time delivery and high standards of

66、quality control.Leadership position in the outerwear wholesale business.As one of the largest outerwear wholesalers,we are widely recognized within the apparel industry for our high-quality and well-designed products.Ourknowledge of the outerwear business and our industry-wide reputation provide us

67、with an advantagewhen we are competing for outerwear licenses and private label business.We are known for our leathermanufacturing expertise,a skill that has given us another competitive advantage in the outerwear market.Our expertise and reputation in designing,manufacturing and marketing outerwear

68、 have enabled us tobuild strong customer relationships and to expand into womens suits,dresses and other productcategories.Experienced management team.Our executive management team has extensive experience in theapparel industry.Morris Goldfarb,our Chief Executive Officer and son of our founder,has

69、been with usfor 35 years,Jeanette Nostra,our President,has been with us for 25 years,and Wayne S.Miller,our ChiefOperating Officer,has been with us for eight years.In 2005,we added significant management,merchandising,manufacturing and design expertise as a result of our acquisition of the Marvin Ri

70、chardsand Winlit businesses.The principals of those businesses,Sammy Aaron and David Winn,each have morethan 25 years experience in the apparel industry.The experience,expertise and depth of our managementteam have enabled us to implement new initiatives in new product categories with existing licen

71、sees,suchas Calvin Klein and Sean John,and private label customers,such as Wal-Mart.Growth StrategyOur goal is to build an all-season diversified apparel company with a broad portfolio of brands thatwe offer in multiple channels of retail distribution through the following growth strategies:Execute

72、new initiatives.We are continually seeking opportunities to produce products for allseasons as we attempt to reduce our dependency on our third fiscal quarter for the majority of our netsales and substantially all of our net income.We have initiated the following product diversificationefforts,each

73、of which we believe has significant revenue potential:We expanded our relationship with Calvin Klein,one of the most recognized fashion brands inthe United States,in September 2005 to include a license for womens suits.We began to ship thisline to department and specialty stores in January 2006 and

74、had product in over 400 doors by fall2006.In March 2006,we announced that we would be designing and producing for Wal-Mart a newurban young mens and boys branded sportswear line,under its Exsto label.We began shippingExsto product during July 2006 and were shipping to over 500 Wal-Mart locations by

75、fall 2006.We further expanded our relationship with Calvin Klein in April 2006 to include a license forwomens dresses and began shipping this line to department and specialty stores in October 2006.We expanded our relationship with Sean John to include a license for womens sportswear.Weexpect to lau

76、nch this line in department stores and urban specialty stores for fall 2007.Continue to grow our outerwear business.We have been a leader in the outerwear business for manyyears and believe there is significant growth potential for us in this category.Specifically,our Calvin Kleinmens and womens out

77、erwear businesses is expected to benefit from Calvin Kleins strong brand3awareness and loyalty among consumers.In May 2006,we added a license for Sean John womensouterwear to our existing license for their mens outerwear.Extend our new product categories to additional brands.We have been able to lev

78、erage ourexpertise and experience in the outerwear business to expand our licenses to new product categories suchas womens suits,dresses and sportswear.We will attempt to expand our distribution of products in thesecategories under other licensed brands,private label brands and our own brands.Specif

79、ically,we expectto seek additional licenses to produce dresses and private label programs to produce womens suits.Seek attractive acquisitions.We plan to continue to pursue acquisitions of complementary productlines and businesses,which could include wholesale and retail opportunities.In July 2005,w

80、e acquired twobusinesses,Marvin Richards and Winlit,both of which added name-brand licenses,including CalvinKlein,Guess?,Tommy Hilfiger and Ellen Tracy,to our expanding brand portfolio.In addition,each ofthese companies has recognized proprietary labels and significant private label programs.Theseac

81、quisitions have increased our portfolio of licensed brands,added additional retail customers andallowed us to realize economies of scale.We believe that our existing infrastructure and managementdepth will enable us to complete additional acquisitions in the apparel industry.Products Development and

82、 DesignG-III designs,manufactures and markets womens and mens apparel at a wide range of retail salesprices.Our product offerings primarily include outerwear,sportswear and womens suits and dresses.Wesell products under licensed brands,our own brands and private retail labels.G-IIIs licensed apparel

83、 consists of both mens and womens products.Our strategy is to seek licensesthat will enable us to offer a range of products targeting different price points and different tiers ofdistribution.Our womens licensed apparel includes products that sell at retail prices generally rangingfrom$100 for sport

84、swear items to$800 for outerwear,with some of this product selling for up to$2,800.Our mens licensed apparel consists of garments that generally sell at retail prices ranging from$50 forsportswear items to$500 for outerwear,with some of this product selling for up to$2,000.G-IIIs proprietary branded

85、 apparel also consists of both mens and womens products.The BlackRivet,Colebrook,Marvin Richards,Winlit and NY 10018 lines of womens apparel consist of moderatelypriced womens outerwear and sportswear that typically sell at retail prices from$40 for sportswear itemsto$250 for outerwear.Products in o

86、ur mens outerwear lines,primarily consisting of leather outerwear,sold under the G-III,Colebrook and Winlit labels,typically have retail prices between$40 and$400.SienaStudio,LNR and La Nouvelle Renaissance,our bridge-priced lines of womens leather and textile apparel,primarily consist of jackets,sk

87、irts and related sportswear separates with retail prices from$100 for skirtsto$700 for outerwear.We also work with retail chains,such as Federated,Wal-Mart,Sams Club,JC Penney and Kohls,indeveloping product lines sold under their own proprietary private labels.We meet frequently withdepartment and s

88、pecialty chain store buyers who custom order products by color,fabric and style.Thesebuyers may provide samples to us or may select styles already available in our showrooms.We believe wehave established a reputation among these buyers for our ability to produce high quality product on areliable,exp

89、editious and cost-effective basis.Our in-house designers are responsible for the design and look of our licensed and non-licensedproducts.We work closely with our licensors to create designs and styles for each of our licensed brands.Licensors generally must approve products to be sold under their b

90、rand names prior to production.Werespond to style changes in the apparel industry by maintaining a continuous program of style,color,leather and fabric selection.In designing new products and styles,we attempt to incorporate currenttrends and consumer preferences.We seek to design products in respon

91、se to trends in consumerpreferences,rather than attempt to create new market trends and styles.Our design personnel meet regularly with our sales and merchandising department,as well as withthe design and merchandising staffs of our licensors,to review market trends,sales results and thepopularity o

92、f our latest products.In addition,our representatives regularly attend trade and fashion showsand shop at fashion forward stores in the United States,Europe and the Far East.Our designers present4sample items along with their evaluation of the styles expected to be in demand in the United States.Wea

93、lso seek input from selected customers with respect to product design.We believe that our sensitivity tothe needs of retailers,coupled with the flexibility of our production capabilities and our continualmonitoring of the retail market,enables us to modify designs and order specifications in a timel

94、y fashion.LicensingThe following table sets forth for each of our principal licenses the date on which the current termends and the date on which any potential renewal term ends:LicenseDate CurrentTerm EndsDate Potential RenewalTerm EndsFashion LicensesCalvin Klein(Mens outerwear)December 31,2010Dec

95、ember 31,2015Calvin Klein(Womens outerwear)December 31,2008December 31,2013Calvin Klein(Womens dresses)December 31,2011December 31,2016Calvin Klein(Womens suits)December 31,2011NoneCole Haan(Mens and Womens outerwear)January 31,2010January 31,2012Ellen Tracy/Company Ellen Tracy(Womensouterwear)Decem

96、ber 31,2007December 31,2010Guess/Guess?(Mens and Womensouterwear)December 31,2009NoneIZOD(Mens and Womens outerwear)December 31,2007December 31,2012Jones New York/Jones NY Collection(Womens outerwear)January 31,2009NoneKenneth Cole NY/Reaction Kenneth Cole(Mens and Womens outerwear)December 31,2008D

97、ecember 31,2012Nine West(Womens outerwear)January 31,2008NoneSean John(Mens outerwear)January 31,2010NoneSean John(Womens outerwear andsportswear)December 31,2009December 31,2022Tommy Hilfiger(Mens outerwear)March 31,2009NoneSports LicensesCollegiate Licensing CompanyMarch 31,2010NoneMajor League Ba

98、seballDecember 31,2007NoneNational Basketball AssociationSeptember 30,2007NoneNational Football LeagueMarch 31,2010NoneUnder our licensing agreements,we are generally required to achieve minimum net sales of licensedproducts,pay guaranteed minimum royalties,make specified royalty and advertising pay

99、ments(usuallybased on a percentage of net sales of licensed products),and receive prior approval of the licensor as toall design and other elements of a garment prior to production.If we do not satisfy any of theserequirements or otherwise fail to meet our obligations under a license agreement,a lic

100、ensor usually willhave the right to terminate our license.Our ability to renew the current term of a license agreement is usually subject to attaining minimumsales and/or royalty levels and to our compliance with all of the terms of the agreement.Other criteriamay also impact our ability to renew a

101、license.As a result,we cannot be sure that we will be able to renewa license agreement when it expires if we desire to do so.We believe that brand owners are looking toconsolidate the number of licensees they engage to develop product and to choose licensees who have asuccessful track record of deve

102、loping brands.We continue to seek other opportunities to enter into licenseagreements in order to expand our product offerings under nationally recognized labels and broaden themarkets that we serve.Revenues from the sale of licensed products accounted for 63.0%of our net sales during fiscal2007 com

103、pared to 60.8%of our net sales in fiscal 2006 and 63.6%of our net sales in fiscal 2005.5Manufacturing and SourcingG-III arranges for the production of products from independent manufacturers located primarily inChina and,to a lesser extent,in South Korea,the Ukraine,Eastern Europe,the Dominican Repu

104、blic,Macau,Sri Lanka and Vietnam.A small portion of our garments is manufactured in the United States.In fiscal 2006,we completed the transition from a branch office in Korea to two representative officesin Qingdao and Hangzhou,China.As a result,we closed our branch office in Korea that had acted as

105、 aliaison between us and manufacturers in the Far East.Because a majority of our production is beingsourced in China,we believe it is more efficient to provide the liaison functions in closer proximity towhere the manufacturing occurs.Our China offices will perform all the functions that had previou

106、sly beenperformed in Korea.At January 31,2007,we had 32 employees in our Qingdao office and 39 employeesin our Hangzhou office.G-IIIs headquarters provides these liaison offices with production orders stating the quantity,quality,delivery time and types of garments to be produced.Liaison office pers

107、onnel negotiate and place orderswith one or more manufacturers.In allocating production among independent suppliers,we consider anumber of criteria,including,but not limited to,quality,availability of production capacity,pricing andability to meet changing production requirements.To facilitate bette

108、r service for our customers and accommodate the volume of manufacturing in theFar East,we also have an office in Hong Kong.The Hong Kong office also supports third party productionof products on a commission-fee basis that we arrange as agent directly for some of our customers.Weutilize our China an

109、d Hong Kong office employees to monitor production at each manufacturers facilityto ensure quality control,compliance with our specifications and timely delivery of finished garments toour distribution facilities and customers.At January 31,2007,the Hong Kong office employed fivepersons.In connectio

110、n with the foreign manufacture of our apparel,manufacturers purchase leather,wool andother fabrics under our direction.In addition,they purchase necessary submaterials(such as linings,zippers,buttons and trimmings)according to parameters specified by us.Prior to commencing themanufacture of garments

111、,samples of raw materials or submaterials are sent to us for approval.Weregularly inspect and supervise the manufacture of our products in order to ensure timely delivery,maintain quality control and monitor compliance with our manufacturing specifications.We also inspectfinished apparel at the fact

112、ory site.The manufacture of the substantial majority of our apparel is performed manually.A pattern is usedin cutting fabric to panels that are assembled in the factory.All submaterials are also added at this time.We inspect products throughout this process to insure that the design and quality spec

113、ifications of theorder are being maintained as the garment is assembled.After pressing,cleaning and final inspection,thegarment is labeled and ready for shipment.A final random inspection by us occurs when the garments arepacked for shipment.We generally arrange for the production of apparel on a pu

114、rchase order basis with completedgarments manufactured to our design specifications.We assume the risk of loss predominantly on aFreight-On-Board(F.O.B.)basis when goods are delivered to a shipper and are insured against casualtylosses arising during shipping.As is customary in the apparel industry,

115、we have not entered into any long-term contractualarrangements with any contractor or manufacturer.We believe that the production capacity of foreignmanufacturers with which we have developed,or are developing,a relationship is adequate to meet ourapparel production requirements for the foreseeable

116、future.We believe that alternative foreign apparelmanufacturers are readily available.A majority of all finished goods manufactured for us is shipped to our New Jersey warehouse anddistribution facilities or to designated third party facilities for final inspection and allocation,as well asreshipmen

117、t to customers.The goods are delivered to our customers and us by independent shippers.Wechoose the form of shipment(principally ship,truck or air)based upon a customers needs,cost and timingconsiderations.6Quotas and CustomsUntil January 1,2005,our textile apparel was subject to quota restrictions.

118、Quotas represent the rightto export amounts of certain categories of merchandise into a country.On January 1,2005,pursuant tothe Agreement on Textiles and Clothing,quotas on textile and apparel products were eliminated forWorld Trade Organization,or WTO,members,including the United States.Chinas acc

119、ession agreementfor membership in the WTO provides that WTO member countries,including the United States,mayre-impose safeguard quotas on specific products if it is determined that imports from China have surgedand are threatening to create a market disruption for these categories of products.In May

120、 2005,theUnited States imposed unilateral safeguard quotas on several product categories,limiting growth inimports of these categories to 7.5%a year.The safeguard quotas in several categories have been extendedby the United States government and will likely continue through 2008.These limitations ap

121、ply to alimited number of products imported by us from China.We do not,however,expect these limitations tohave a negative impact on our ability to manufacture and import womens suits,dresses and sportswear.Our arrangements with textile manufacturers and suppliers are subject to requisite customsclea

122、rances for textile apparel and the imposition of export duties.United States Customs duties on ourtextile apparel presently range from duty free to 28%,depending upon the type of fabric used and howthe garment is constructed.Countries in which our products are manufactured and sold may,from timeto t

123、ime,impose new duties,tariffs,surcharges or other import controls or restrictions or adjust prevailingduty or tariff levels.We continually monitor duty,tariff and other import restriction developments.Weseek to minimize our potential exposure to import related risks through,among other measures,geog

124、raphical diversification of manufacturing sources and shifts of production among countries andmanufacturers.Raw MaterialsWe purchase most products manufactured for us on a finished goods basis.We coordinate thesourcing of raw materials used in the production of our apparel,such as leather,wool and c

125、otton,whichare available from numerous sources.The leather apparel industry competes with manufacturers of otherleather products for the supply of leather.Leather skins are a byproduct.Accordingly,raw material costsfor leather products are impacted by changes in meat consumption worldwide,as well as

126、 by the popularityof leather products.Marketing and DistributionG-IIIs products are sold primarily to department,specialty and mass merchant retail stores in theUnited States.We sell to approximately 2,400 customers,ranging from national and regional chains tosmall specialty stores.Sales to Federate

127、d Department Stores accounted for an aggregate of 19.0%of our net sales in fiscal2006 and 18.5%of our net sales in fiscal 2007.Federated completed the acquisition of May DepartmentStore Company in August 2005.Sales to Federated in fiscal 2006 include sales to the Macys,Lord&Taylor and Marshall Field

128、s retail chains that were part of the combined Federated and May.Sales toFederated in fiscal 2007 do not include sales to Lord&Taylor,which was sold by Federated during thatperiod.Sales to department store divisions of Federated and May accounted for an aggregate of 11.3%ofour net sales in fiscal 20

129、05.Sales to the Sams Club and Wal-Mart divisions of Wal-Mart Stores,Inc.accounted for an aggregateof 15.0%of our net sales in fiscal 2005,13.2%of our net sales in fiscal 2006 and 11.9%of our net sales infiscal 2007.The loss of either Federated or Wal-Mart,or a significant reduction in purchases by e

130、ithercustomer,could have a material adverse effect on our results of operations.Sales to our 10 largestcustomers accounted for 61.0%of our net sales in fiscal 2007 compared to 60.7%of our net sales in fiscal2006.Almost all of our sales are made in the United States.We also market our products in Can

131、ada,Europe and the Far East,which,on a combined basis,accounted for less than 1%of our net sales in fiscal2007.7G-IIIs products are sold primarily through a direct sales force that consisted of 51 employees as ofJanuary 31,2007.Our principal executives are also actively involved in sales of our prod

132、ucts.Some of ourproducts are also sold by various retail buying offices and independent sales representatives locatedthroughout the United States.Final authorization of all sales of product is solely through our New Yorkshowrooms,enabling our management to deal directly with,and be readily accessibl

133、e to,major customers,as well as to more effectively control our selling operations.Brand name products sold by us pursuant to a license agreement are promoted by institutional andproduct advertisements placed by the licensor.Our license agreements generally require us to pay thelicensor a fee,based

134、on a percentage of net sales of licensed product,to pay for a portion of theseadvertising costs.We may also be required to spend a specified percentage of net sales of a licensedproduct on advertising placed by us.We primarily rely on our reputation and relationships to generate business in our non-

135、licensedsegment.We believe we have developed a significant customer following and positive reputation in theindustry as a result of,among other things,standards of quality control,on-time delivery,competitivepricing and willingness and ability to assist customers in their merchandising of our produc

136、ts.In addition,we have,to a limited extent,advertised our own labels and engaged in cooperative advertising programswith retailers.We believe we have developed brand awareness of our own labels primarily through ourreputation,consumer acceptance and the fashion press.SeasonalityRetail sales of outer

137、wear apparel have traditionally been seasonal in nature.Sales of outerwearconstitute a significant majority of our sales.Although we sell our apparel products throughout the year,net sales in the months of July through November accounted for approximately 81%of our net sales infiscal 2007,82%of our

138、net sales in fiscal 2006 and 74%of our net sales in fiscal 2005.The percentage ofour net sales increased during this period compared to fiscal 2005 because of the two acquisitions we madein July 2005.The July through November time frame is expected to continue to represent adisproportionate amount o

139、f our net sales and net income.Order BookA portion of our orders consists of short-term purchase orders from customers who place orders onan as-needed basis.Information relative to open purchase orders at any date may also be materiallyaffected by,among other things,the timing of the initial showing

140、 of apparel to the trade,as well as by thetiming of recording of orders and shipments.As a result,we do not believe that disclosure of the amountof our unfilled customer orders at any time is meaningful.CompetitionWe have numerous competitors with respect to the sale of apparel,including distributor

141、s that importapparel from abroad and domestic retailers with established foreign manufacturing capabilities.Many ofour competitors have greater financial and marketing resources and greater manufacturing capacity thanwe do.We also compete with vertically integrated apparel manufacturers that also ow

142、n retail stores.Thegeneral availability of contract manufacturing capacity also allows ease of access by new market entrants.Sales of our products are affected by style,price,quality,brand reputation and general fashion trends.TrademarksSeveral trademarks owned by us have been granted federal tradem

143、ark protection through registrationwith the U.S.Patent and Trademark Office,including G-III,G-III(&Design),G-III Sports By Carl Banks&Design,J.L.Colebrook,JLC,Colebrook&Co.,American Classics By Colebrook,Black Rivet,BlackRivet&Design lower diamond,Black Rivet&Design upper diamond,Black Rivet&Design

144、circlesand diamond,ColeB Co.(&Design),Siena,Siena Studio,Sports 58(&Design)and Studio 512.We haveapplications for several additional marks pending before the U.S.Patent and Trademark Office,includingthe trademarks we acquired from Marvin Richards.8We acquired trademarks registrations previously owne

145、d by Winlit Group,Ltd.,including WINLIT,WINLIT(Stylized),LNR,LNR(Stylized),La Nouvelle Renaissance and NY 10018 upon our acquisitionof specified assets of Winlit.We have a pending U.S.application for La Nouvelle Renaissance.We alsoacquired the J.Percy Sport,Marvin Richards and J.Percy For Marvin Ric

146、hards United Kingdomtrademark registrations upon our acquisition of Marvin Richards.We have been granted trademark registration for G-III in Canada,the European Union,France andMexico,for J.L.Colebrook in Canada,France,Great Britain,Mexico and the European Union,for J.L.C.(&Design)and JLC(&Design)in

147、 Canada,and for BR(&Design)in the European Union and Russia.We also have applications for several additional marks in Canada.Although we regard our trademarks as valuable assets and intend to vigorously enforce ourtrademark rights,we do not believe that any failure to obtain federal trademark regist

148、rations for whichwe have applied would have a material adverse effect on us.EmployeesAs of January 31,2007,we had 510 full-time employees,of whom 82 worked in executive oradministrative capacities,213 worked in design,merchandising and sourcing,164 worked in warehouseand distribution facilities,and

149、51 worked in sales.We employ both union and non-union personnel andbelieve that our relations with our employees are good.We have not experienced any interruption of anyof our operations due to a labor disagreement with our employees.We are a party to an agreement with the Amalgamated Clothing and T

150、extile Workers Union,covering approximately 103 of our full-time employees as of January 31,2007.This agreement,which iscurrently in effect through October 31,2007,automatically renews on an annual basis thereafter unlessterminated by us or the union prior to September 1 of that year.Website Access

151、to ReportsOur internet website is http:/www.g-.We make available free of charge on our website(underthe heading About G-III)our Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K and amendments to those reports as soon as reasonably practicable afterwe electronica

152、lly file such material with,or furnish it to,the Securities and Exchange Commission.9EXECUTIVE OFFICERS OF THE REGISTRANTThe following table sets forth certain information with respect to our executive officers.NameAgePositionMorris Goldfarb56Chairman of the Board,Chief Executive Officer,DirectorSam

153、my Aaron47Vice Chairman,President Marvin Richards Division,DirectorJeanette Nostra55PresidentWayne S.Miller49Chief Operating Officer and SecretaryNeal S.Nackman47Chief Financial Officer and TreasurerDeborah Gaertner52Vice President Womens Sales Division of G-III LeatherFashionsMorris Goldfarb is our

154、 Chairman of the Board and Chief Executive Officer,as well as one of ourdirectors.Until April 1997,Mr.Goldfarb also served as our President.Mr.Goldfarb has served as anexecutive officer of G-III and our predecessors since our formation in 1974.Mr.Goldfarb is also a directorof Lakes Entertainment,Inc

155、.Sammy Aaron became our Vice Chairman and President of our Marvin Richards division,as well asone of our directors,after the Marvin Richard acquisition in July 2005.Prior to joining G-III,Mr.Aaronserved as the President of Marvin Richards from 1998 until July 2005.Jeanette Nostra became our Presiden

156、t in April 1997.She had been our Executive Vice President sinceMarch 1992.Ms.Nostras responsibilities for G-III include sales,marketing,merchandising,productdevelopment and public relations for our licensed fashion brands.We have employed Ms.Nostra since1981.Wayne S.Miller has been our Chief Operati

157、ng Officer since December 2003 and our Secretary sinceNovember 1998.He also served as our Chief Financial Officer from April 1998 until September 2005 andas our Treasurer from November 1998 until April 2006.Neal S.Nackman has been our Chief Financial Officer since September 2005 and was electedTreas

158、urer in April 2006.Mr.Nackman served as Vice President Finance from December 2003 untilApril 2006.Prior to joining G-III,Mr.Nackman was a financial consultant with Jefferson WellsInternational from January 2003 until December 2003.From May 2001 until October 2002,he was SeniorVice President Controll

159、er of Martha Stewart Living Omnimedia,Inc.From May 1999 until May 2001,he was Chief Financial Officer of Perry Ellis International Inc.From August 1995 until May 1999,he wasthe Vice-President Finance with Nautica Enterprises,Inc.Deborah Gaertner is the Vice President Womens Division of G-III Leather

160、 Fashions and has heldthis position since March 1992.Ms.Gaertner is responsible for sales and marketing of certain of ourwomens apparel lines.She previously served as Vice President,Imports from June 1989 until March 1992,coordinating production and merchandising.Carl Katz,one of our directors,and J

161、eanette Nostra are married to each other.10ITEM 1A.RISK FACTORS.We believe that the occurrence of any one or some combination of the following factors could havea material adverse effect on our business,financial condition and results of operations.Risk Factors Relating to Our OperationsThe failure

162、to maintain our licensing agreements could cause us to lose significant revenues and have amaterial adverse effect on our results of operations.We are dependent on sales of licensed product for a substantial portion of our revenues.In fiscal2007,revenues from the sale of licensed product accounted f

163、or 63.0%of our net sales compared to60.8%of our net sales in fiscal 2006 and 63.6%of our net sales in fiscal 2005.We are generally required to achieve specified minimum net sales,make specified royalty andadvertising payments and receive prior approval of the licensor as to all design and other elem

164、ents of agarment prior to production.License agreements also may restrict our ability to enter into other licenseagreements for competing products.If we do not satisfy any of these requirements,a licensor usually willhave the right to terminate our license.Even if a licensor does not terminate our l

165、icense,the failure toachieve net sales sufficient to cover our required minimum royalty payments could have a materialadverse effect on our results of operations.If a license contains a renewal provision,there are usuallyminimum sales and other conditions that must be met in order to be able to rene

166、w a license.Even if wecomply with all the terms of a licensing agreement,we cannot be sure that we will be able to renew anagreement when it expires even if we desire to do so.The failure to maintain our license agreements couldcause us to lose significant revenue and have a material adverse effect

167、on our results of operations.Our success is dependent on the strategies and reputation of our licensors.Our business strategy is to offer our products on a multiple brand,multiple channel and multipleprice point basis.As a part of this strategy,we license the names and brands of numerous recognizedc

168、ompanies,designers and celebrities.In entering into these license agreements,we plan our products tobe targeted towards different market segments based on consumer demographics,design,suggestedpricing and channel of distribution.If any of our licensors decides to reposition its products under thebra

169、nds we license from them,introduce similar products under similar brand names or otherwise changethe parameters of design,pricing,distribution,target market or competitive set,we could experience asignificant downturn in that brands business,adversely affecting our sales and profitability.For exampl

170、e,we have five different license agreements relating to a variety of products sold under the Calvin Klein andIZOD brands owned by Phillips-Van Heusen Corporation.Any change by Phillips-Van Heusen in themarketing of its branded products or in our relationship with Phillips Van-Heusen could have an ad

171、verseaffect on our results of operations.In addition,as products may be personally associated with designersor celebrities,our sales of those products could be materially and adversely affected if any of thoseindividuals images,reputations or popularity were to be negatively impacted.If we are unabl

172、e to successfully translate market trends into attractive product offerings,our sales andprofitability could suffer.Our ability to successfully compete depends on a number of factors,including our ability toeffectively anticipate,gauge and respond to changing consumer demands and tastes across multi

173、pleproduct lines and tiers of distribution.We are required to translate market trends into attractive productofferings and operate within substantial production and delivery constraints.We cannot be sure we willcontinue to be successful in this regard.We need to anticipate and respond to changing tr

174、ends quickly,efficiently and effectively in order to be successful.Expansion of our product offerings involves significant costs and uncertainty and could adversely affect ourresults of operations.An important part of our strategy is to expand the types of products we offer.For example,we haveadded

175、licenses for new lines of womens suits,sportswear and dresses.We have limited prior experience11designing,manufacturing and marketing these types of products.We intend to continue to add additionalproduct lines in the future.As is typical with new products,demand and market acceptance for any newpro

176、ducts we introduce will be subject to uncertainty.Designing,producing and marketing new productsrequire substantial expenditures.We cannot be certain that our efforts and expenditures will successfullygenerate sufficient sales or that sales that are generated will be sufficient to cover our expendit

177、ures.If our customers change their buying patterns,request additional allowances or develop their own privatelabel brands,our sales to these customers could be materially adversely affected.Our customers buying patterns,as well as the need to provide additional allowances to vendors,could have a mat

178、erial adverse effect on our business,results of operations and financial condition.Customers strategic initiatives,including developing their own private labels brands and reducing thenumber of vendors they purchase from,could also impact our sales to these customers.We have significant customer con

179、centration,and the loss of one of our large customers could adversely affectour business.Our 10 largest customers accounted for approximately 61.0%of our net sales in fiscal 2007 comparedto 60.7%of our net sales in fiscal 2006,with our two largest customers accounting for 18.5%and 11.9%ofour net sal

180、es in fiscal 2007.Consolidation in the retail industry,such as the combination of the Federatedand May department store chains,has increased the concentration of our sales to our largest customers.We do not have long-term contracts with any customers,and sales to customers generally occur on anorder

181、-by-order basis that may be subject to cancellation or rescheduling by the customer.A decision byour major customers to decrease the amount of merchandise purchased from us,to increase the use oftheir own private label brands or to change the manner of doing business with us could reduce ourrevenues

182、 and materially adversely affect our results of operations.If we miscalculate the market for our products,we may end up with significant excess inventories for someproducts and missed opportunities for others.We often produce garments to hold in inventory in order to meet our customers deliveryrequi

183、rements and to be able to quickly fulfill reorders.If we misjudge the market for our products,we maybe faced with significant excess inventories for some products and missed opportunities for others.Inaddition,weak sales and resulting markdown requests from customers could have a material adverseeff

184、ect on our results of operations.We are dependent upon foreign manufacturers.We do not own or operate any manufacturing facilities.Almost all of our products are imported fromindependent foreign manufacturers.The failure of these manufacturers to ship products to us in a timelymanner or to meet requ

185、ired quality standards could cause us to miss the delivery date requirements of ourcustomers.The failure to make timely deliveries could cause customers to cancel orders,refuse to acceptdelivery of products or demand reduced prices,any of which could have a material adverse effect on ourbusiness.We

186、do not have long-term written agreements with any of our manufacturers.As a result,anyof these manufacturers may unilaterally terminate its relationship with us at any time.We are also dependent on these manufacturers for compliance with our policies and the policies ofour licensors and customers re

187、garding labor practices employed by factories that manufacture product forus.Any failure by these manufacturers to comply with required labor standards or any other divergencein their labor or other practices from those generally considered ethical in the United States,and thepotential negative publ

188、icity relating to any of these events,could result in a violation by us of our licenseagreements and harm us and our reputation.We are subject to the risks of doing business abroad.Our arrangements with foreign manufacturers are subject to the usual risks of doing business abroad,including currency

189、fluctuations,political or labor instability and potential import restrictions,duties andtariffs.We do not maintain insurance for the potential lost profits due to disruptions of our overseas12factories.Because our products are produced abroad,political or economic instability in China orelsewhere co

190、uld cause substantial disruption in the business of our foreign manufacturers.This couldmaterially adversely affect our financial condition and results of operations.There have been threats ofanti-dumping cases with respect to apparel sourced from several countries,including Vietnam and China.Height

191、ened terrorism security concerns could subject imported goods to additional,more frequent ormore thorough inspections.This could delay deliveries or increase costs,which could adversely impact ourresults of operations.In addition,since we negotiate our purchase orders with foreign manufacturers inUn

192、ited States dollars,the value of the United States dollar against local currencies could impact our costin dollars of production from these manufacturers.We are not currently engaged in any hedging activitiesto protect against these currency risks.If there is downward pressure on the value of the do

193、llar,ourpurchase prices for our products could increase.We may not be able to offset an increase in product costswith a price increase to our customers.Fluctuations in the price,availability and quality of materials used in our products could have a materialadverse effect on our cost of goods sold a

194、nd our ability to meet our customers demands.Fluctuations in the price,availability and quality of the leather,wool and other materials used in ourproducts could have a material adverse effect on our cost of sales or our ability to meet our customersdemands.We compete with numerous entities for supp

195、lies of materials and manufacturing capacity.Thesupply and price of leather are vulnerable to animal diseases as well as natural disasters that can affect thesupply and price of raw leather.For example,in the past,the outbreak of mad-cow and foot-and-mouthdisease in Europe,and its aftereffects,adver

196、sely affected the supply of leather.Any recurrence of thesediseases could adversely affect us.The prices for wool and other fabrics used in our products dependlargely on the market prices for the raw materials used to produce them,such as raw wool or cotton.Wemay not be able to pass on all or any po

197、rtion of higher material prices to our customers.If we lose the services of our key personnel,our business will be harmed.Our future success depends on Morris Goldfarb,our Chairman and Chief Executive Officer,andother key personnel.The loss of the services of Mr.Goldfarb and any negative market or i

198、ndustryperception arising from the loss of his services could have a material adverse effect on us and the priceof our shares.Our other executive officers have substantial experience and expertise in our business andhave made significant contributions to our success.The unexpected loss of services o

199、f one or more of theseindividuals could also adversely affect us.We have expanded our business through acquisitions that could result in diversion of resources,an inabilityto integrate acquired operations and extra expenses.This could disrupt our business and adversely affect ourfinancial condition.

200、Part of our growth strategy is to pursue acquisitions.For example,in July 2005,we acquired MarvinRichards and the operating assets of Winlit.The negotiation of potential acquisitions as well as theintegration of acquired businesses could divert our managements time and resources.Acquiredbusinesses m

201、ay not be successfully integrated with our operations.We may not realize the intendedbenefits of any acquisition.Acquisitions could also result in:substantial cash expenditures;potentially dilutive issuances of equity securities;the incurrence of debt and contingent liabilities;a decrease in our pro

202、fit margins;andamortization of intangibles and potential impairment of goodwill.If acquisitions disrupt our operations,our business may suffer.We may need additional financing to continue to grow.The continued growth of our business depends on our access to sufficient funds to support ourgrowth.Our

203、primary source of working capital to support our growth is our line of credit and related term13loan entered into in July 2005.Our need for working capital and the amount of our debt increased as aresult of our two acquisitions in July 2005.In December 2005,we began to make quarterly paymentsunder o

204、ur term loan of$1,650,000.A final balloon payment under the term loan is due in July 2008 lessan estimated prepayment of$2.0 million for fiscal 2007 based on our excess cash flow as determined underour term loan agreement.The amount of the balloon payment would be approximately$9.8 million,if noprep

205、ayment is required with respect to fiscal 2008.Our growth is dependent on our ability to extend andincrease the line of credit and may be dependent on our ability to refinance the term loan if we do notgenerate sufficient cash to make the payments due under the term loan.If we are unable to refinanc

206、e ourdebt,we cannot be sure we will be able to secure alternative financing on satisfactory terms or at all.We are dependent on sales during the July through November period each year for the substantial majorityof our net sales and net income,and our results of operations may suffer in the event th

207、at the weather isunusually warm during the peak outerwear selling season.Retail sales of outerwear have traditionally been seasonal in nature.Sales of outerwear constitute asignificant majority of our sales.As a result,we are dependent on our sales from July through Novembereach year for the substan

208、tial majority of our net sales and net income.Net sales in the months of Julythrough November accounted for approximately 81%of our net sales in fiscal 2007,82%of our net salesin fiscal 2006 and 74%of our net sales in fiscal 2005.Any difficulties we may encounter during this periodas a result of wea

209、ther or disruption of manufacturing or transportation of our products will have amagnified effect on our net sales and net income for the year.In addition,because of the large amountof outerwear we sell,unusually warm weather conditions during the peak fall and winter outerwear sellingseason could h

210、ave a material adverse effect on our results of operations.The July through November timeframe is expected to continue to provide a disproportionate amount of our net sales and net income forthe foreseeable future.Risk Factors Relating to the Apparel IndustryThecompetitivenatureoftheapparelindustrym

211、ayresultinlowerpricesforourproductsanddecreasedgrossprofit margins.The apparel business is highly competitive.We have numerous competitors with respect to the saleof apparel,including distributors that import apparel from abroad and domestic retailers with establishedforeign manufacturing capabiliti

212、es.Many of our competitors have greater financial and marketingresources and greater manufacturing capacity than we do.We also compete with vertically integratedapparel manufacturers that also own retail stores.The general availability of contract manufacturingcapacity also allows ease of access by

213、new market entrants.The competitive nature of the apparel industrymay result in lower prices for our products and decreased gross profit margins,either of which maymaterially adversely affect our sales and profitability.Sales of our products are affected by style,price,quality,brand reputation and g

214、eneral fashion trends.If major department,mass merchant and specialty store chains continue to consolidate,our business couldbe negatively affected.We sell our products to major department,mass merchant and specialty store chains.Continuedconsolidation in the retail industry,such as the purchase of

215、May Department Store Company byFederated Department Stores,Inc.,could negatively impact our business.Consolidation could reduce thenumber of our customers and potential customers.With increased consolidation in the retail industry,weare increasingly dependent on retailers whose bargaining strength m

216、ay increase and whose share of ourbusiness may grow.As a result,we may face greater pressure from these customers to provide morefavorable terms.If purchasing decisions become more centralized,the risks from consolidation increase.Customers may also concentrate purchases among a narrowing group of v

217、endors.This could adverselyaffect our business.The cyclical nature of the apparel industry and uncertainty over future economic prospects and consumerspending could have a materially adverse effect on our results of operations.The apparel industry is cyclical.Purchases of outerwear,sportswear and ot

218、her apparel tend to declineduring recessionary periods and may decline for a variety of other reasons,including changes in fashion14trends and the introduction of new products or pricing changes by our competitors.Uncertaintiesregarding future economic prospects could affect consumer-spending habits

219、 and have an adverse effect onour results of operations.Uncertainty with respect to consumer spending as a result of weak economicconditions has in the past caused our customers to delay the placing of initial orders and to slow the paceof reorders during the seasonal peak of our business.Weak econo

220、mic conditions have had a materialadverse effect on our results of operations at times in the past and could have a material adverse effecton our results of operations in the future as well.The significant increase in fuel prices could adversely affect our results of operations.Fuel prices have incr

221、eased significantly during the past two years,including as a result of HurricaneKatrina and tensions in the Middle East.Increased gasoline prices could adversely affect consumerspending,including discretionary spending on apparel.In addition,higher fuel prices could cause ouroperating expenses to in

222、crease,especially with respect to freight.Any significant decrease in sales orincrease in expenses as a result of higher fuel prices could adversely affect our results of operations.If new legislation restricting the importation or increasing the cost of textiles and apparel produced abroadis enacte

223、d,our business could be adversely affected.Legislation that would restrict the importation or increase the cost of textiles and apparel producedabroad has been periodically introduced in Congress.The enactment of new legislation or internationaltrade regulation,or executive action affecting internat

224、ional textile or trade agreements,could adverselyaffect our business.International trade agreements that can provide for tariffs and/or quotas can increasethe cost and limit the amount of product that can be imported.The quota system established by the World Trade Organization was eliminated on Dece

225、mber 31,2004.We cannot be certain of the full impact that this elimination will have on international trade in generaland the apparel industry in particular.We also cannot be certain of the impact of quota elimination on ourbusiness,including increased competition that could result from the importat

226、ion of an increasing amountof lower priced apparel into the United States.Notwithstanding quota elimination,Chinas accessionagreement for membership in the WTO provides that WTO member countries,including the UnitedStates,may re-impose safeguard quotas on specific products.In May 2005,the United Sta

227、tes imposedunilateral quotas on several product categories,limiting growth in imports of these categories to 7.5%ayear.The safeguard quotas in several categories have been extended by the United States government andwill likely continue through 2008.These limitations apply to a limited number of pro

228、ducts imported by usfrom China.We are unable to assess the potential for additional action by the United States governmentwith respect to these or other product categories in the event that the quantity of imported apparelsignificantly disrupts the apparel market in the United States.Additional acti

229、on by the United States inresponse to a disruption in its apparel markets could limit our ability to import apparel and increase ourcosts.Other Risks Relating to Ownership of Our Common StockTwo persons may be in a position to control matters requiring a stockholder vote.As of April 13,2007,Morris G

230、oldfarb,our Chairman and Chief Executive Officer,and his father,Aron Goldfarb,our founder and former director,beneficially own an aggregate of approximately 23.3%of our common stock.As a result,if they vote together,they may have the ability to control the outcomeon matters requiring stockholder app

231、roval including,but not limited to,the election of directors and anymerger,consolidation or sale of all or substantially all of our assets.They also may have the ability tocontrol our management and affairs.The price of our common stock has fluctuated significantly and could continue to fluctuate si

232、gnificantly.Between February 1,2005 and April 24,2007,the market price of our common stock has ranged froma low of$4.35 to a high of$26.74 per share.The market price of our common stock may changesignificantly in response to various factors and events beyond our control,including:15fluctuations in o

233、ur quarterly revenues or those of our competitors as a result of seasonality orother factors;a shortfall in revenues or net income from that expected by securities analysts and investors;changes in securities analysts estimates of our financial performance or the financial performanceof our competit

234、ors or companies in our industry generally;announcements concerning our competitors;changes in product pricing policies by our competitors or our customers;general conditions in our industry;andgeneral conditions in the securities markets.Our actual financial results might vary from our publicly dis

235、closed financial forecasts.From time to time,we publicly disclose financial forecasts.Our forecasts reflect numerousassumptions concerning our expected performance,as well as other factors which are beyond our controland which might not turn out to be correct.As a result,variations from our forecast

236、s could be material.Our financial results are subject to numerous risks and uncertainties,including those identifiedthroughout this Risk Factors section and elsewhere in this prospectus and in the documentsincorporated by reference in this Annual Report.If our actual financial results are worse than

237、 ourfinancial forecasts,the price of our common stock may decline.The failure to comply with the internal control evaluation and certification requirements of Section 404 ofSarbanes-Oxley Act could harm our operations and our ability to comply with our periodic reportingobligations.We will be requir

238、ed to comply with the internal control evaluation and certification requirements ofSection 404 of the Sarbanes-Oxley Act of 2002 by the end of our fiscal year ending January 31,2008.Wehave begun the process of determining whether our existing internal controls over financial reportingsystems are com

239、pliant with Section 404.This process may divert internal resources and will take asignificant amount of time,effort and expense to complete.If it is determined that we are not incompliance with Section 404,we may be required to implement new internal control procedures andreevaluate our financial re

240、porting.We may experience higher than anticipated operating expenses as wellas outside auditor fees during the implementation of these changes and thereafter.Further,we may needto hire additional qualified personnel in order for us to be compliant with Section 404.If we are unableto implement these

241、changes effectively or efficiently,it could harm our operations,financial reporting orfinancial results and could result in our being unable to obtain an unqualified report on internal controlsfrom our independent auditors,which could adversely affect our ability to comply with our periodicreporting

242、 obligations under the Securities and Exchange Act of 1934,as amended,and the rules of theNasdaq Global Market.ITEM 1B.UNRESOLVED STAFF COMMENTS.None.ITEM 2.PROPERTIES.Our executive offices,sales showrooms and support staff are located at 512 Seventh Avenue in NewYork City.We lease an aggregate of a

243、pproximately 42,500 square feet in this building throughMarch 31,2011 at a current aggregate annual rent of approximately$1.4 million.We also leaseapproximately 4,000 square feet at a current annual rent of$100,000 in an adjoining building at500 Seventh Avenue for additional design staff.We assumed

244、leases for an additional 28,000 square feet of office and showroom space at 512 SeventhAvenue in connection with our acquisition of Marvin Richards.The current aggregate annual rent for thisspace is$520,000.One of these leases expires in January 2008 and the other expires in December 2013.16We assum

245、ed a lease in New York City for approximately 20,000 square feet of office and showroom spaceat 463 Seventh Avenue in connection with the Winlit transaction.The current annual rent is approximately$440,000 and the lease expires in December 2011.In February 2005,we extended the lease on our warehouse

246、 and distribution facility,located inSecaucus,New Jersey,through February 2011.As part of the new lease,we leased an additional95,000 square feet of adjacent space that we have utilized since October 1,2005,giving us total space atthe facility of approximately 205,000 square feet.Annual rent for the

247、 entire premises is approximately$1.2 million.We obtained the additional space to reduce our reliance on third party warehouses andaccommodate the additional volume we anticipate being generated from our newly signed licenses.Infiscal 2007,we spent approximately$943,000 to renovate the new and exist

248、ing warehouse space.In June 2006,we entered into a seven-year lease for an additional distribution center in SouthBrunswick,New Jersey.This facility contains approximately 305,000 square feet of space which will beused by us for product distribution.Annual rent for this facility is approximately$1.2

249、 million.As a resultof adding this new facility,we did not renew our lease for our distribution center in Edison,New Jersey,which expired in January 2007 and covered approximately 89,000 square feet of space.The additionalspace is expected to allow us to meet some of our anticipated increased shippi

250、ng volume.We estimate thatthe renovation of this new facility will cost us up to$1.5 million.Through January 31,2007,we incurredapproximately$1.1 million of renovation expenses.This facility is expected to be fully operational byMay 2007.A majority of our finished goods is shipped to our New Jersey

251、warehouse and distributionfacilities for final reshipment to customers.We also use third-party warehouses to accommodate ourfinished goods storage and reshipment needs.We also leased office space at 345 West 37th Street in New York City for administrative personnelfrom a corporation owned by Morris

252、Goldfarb and Aron Goldfarb.Aggregate payments under this leasein fiscal 2007 were$240,000.In March 2007,we entered into an agreement to terminate the leaseagreement with respect to our office space at 345 West 37th Street effective May 31,2007.Ouradministrative personnel located at 345 West 37th Str

253、eet will move into other office space currently leasedby us.ITEM 3.LEGAL PROCEEDINGS.In the ordinary course of our business,we are subject to periodic lawsuits,investigations and claims.Although we cannot predict with certainty the ultimate resolution of lawsuits,investigations and claimsasserted ag

254、ainst us,we do not believe that any currently pending legal proceeding or proceedings to whichwe are a party will have a material adverse effect on our business,financial condition or results ofoperations.ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.None.17PART IIITEM 5.MARKET FOR THE

255、REGISTRANTS COMMON EQUITY,RELATEDSTOCKHOLDER MATTERS AND ISSUER REPURCHASES OF EQUITYSECURITIES.Market For Common StockOur Common Stock is quoted on the Nasdaq Global Market under the trading symbol GIII.Thefollowing table sets forth,for the fiscal periods shown,the high and low sales prices for our

256、 CommonStock,as reported by the Nasdaq National Market until June 30,2006,and the Nasdaq Global Marketafter that date.All share prices have been adjusted to give retroactive effect to a three-for-two split of ourCommon Stock effective March 28,2006.High PricesLow PricesFiscal 2006Fiscal Quarter endi

257、ng April 30,2005.$5.91$4.49Fiscal Quarter ended July 31,2005.$7.84$4.35Fiscal Quarter ended October 31,2005.$7.93$6.23Fiscal Quarter ended January 31,2006.$9.89$6.33Fiscal 2007Fiscal Quarter ending April 30,2006.$12.82$8.80Fiscal Quarter ended July 31,2006.$11.25$7.91Fiscal Quarter ended October 31,

258、2006.$15.50$9.03Fiscal Quarter ended January 31,2007.$22.95$13.79Fiscal 2008Fiscal Quarter ending April 30,2007(through April 24,2007).$26.74$17.17The last sales price of our Common Stock as reported by the Nasdaq Global Market on April 24,2007was$18.15 per share.On April 24,2007,there were 49 holde

259、rs of record and,we believe,approximately 2,600 beneficialowners of our Common Stock.Dividend PolicyOur Board of Directors currently intends to follow a policy of retaining any earnings to finance thecontinued growth and development of our business and does not anticipate paying cash dividends in th

260、eforeseeable future.Any future determination as to the payment of cash dividends will be dependent uponour financial condition,results of operations and other factors deemed relevant by the Board.Our loanagreement limits payments for cash dividends and stock redemptions to$1.5 million plus an additi

261、onalamount based on the proceeds of sales of equity securities.See Managements Discussion and Analysisof Financial Condition and Results of Operations Liquidity and Capital Resources in Item 7 belowand Note E to our Consolidated Financial Statements.18Performance GraphThe following Performance Graph

262、 and related information shall not be deemed to be filed with theSecurities and Exchange Commission,nor shall such information be incorporated by reference into anyfuture filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,each as amended,except to the extent that we speci

263、fically incorporate it by reference into such filing.The Securities and Exchange Commission requires us to present a chart comparing the cumulativetotal stockholder return on our Common Stock with the cumulative total stockholder return of(i)a broadequity market index and(ii)a published industry ind

264、ex or peer group.This chart compares the CommonStock with(i)the S&P 500 Composite Index and(ii)the S&P Textiles Index,and assumes an investmentof$100 on January 31,2002 in each of the Common Stock,the stocks comprising the S&P 500 CompositeIndex and the stocks comprising the S&P Textile Index.G-III

265、Apparel Group,Ltd.Comparison of Cumulative Total Return(January 31,2002 January 31,2007)0501001502002503003504004505001/31/20021/31/20031/31/20041/31/20051/31/20061/31/2007DATEPRICEG-IIIS&P 500S&P Textile(Apparel)19ITEM 6.SELECTED FINANCIAL DATA.The selected consolidated financial data set forth bel

266、ow as of and for the years endedJanuary 31,2003,2004,2005,2006 and 2007 have been derived from our audited consolidated financialstatements.Our audited consolidated financial statements as of January 31,2003,2004 and 2005 and forthe years ended January 31,2003 and 2004 are not included in this filin

267、g.The selected consolidatedfinancial data should be read in conjunction with Managements Discussion and Analysis of FinancialCondition and Results of Operations(Item 7 of this Report)and the audited consolidated financialstatements and related notes thereto included elsewhere in this Annual Report o

268、n Form 10-K.Certainamounts in the Income Statement Data for fiscal years 2003 through 2005 have been reclassified toconform to the current year presentation.Our results of operations for the year ended January 31,2006 include the results of our MarvinRichards and Winlit divisions from July 11,2005,t

269、he date we acquired the stock of Marvin Richards andcertain assets from Winlit.Our results for fiscal 2006 exclude the seasonal losses that were incurred by theacquired companies in the first half of fiscal 2006.Results for fiscal 2007 include the operations of theacquired companies for the entire p

270、eriod,as well as interest expense and depreciation and amortizationexpense relating to the acquisitions for the entire period.All share and per share information in the table below have been adjusted to give retroactive effectto a three-for-two split of our Common Stock effective March 28,2006.(in t

271、housands,except per share data)Year Ended January 31,20032004200520062007Consolidated Income Statement Data:Net sales.$203,301$225,061$214,278$324,072$427,017Cost of goods sold.153,367162,229161,534239,226311,470Gross profit.49,93462,83252,74484,846115,547Selling,general&administrative expenses.40,8

272、4146,78447,45264,76383,258Depreciation and amortization.1,3601,2551,3443,1254,431Non-recurring charge.3,556882Operating profit.4,17714,7933,06616,95827,858Interest and financing charges,net.1,9071,1791,0864,3496,362Income before income taxes.2,27013,6141,98012,60921,496Income taxes.1,8885,2381,2775,

273、5178,307Net income.$382$8,376$703$7,092$13,189Basic earnings per share.$0.04$0.81$0.07$0.62$1.00Weighted average shares outstanding basic.10,14710,36810,77311,50913,199Diluted earnings per share.$0.03$0.76$0.06$0.58$0.94Weighted average shares outstanding diluted.11,02011,02211,29212,23613,982As of

274、January 31,20032004200520062007Consolidated Balance Sheet Data:Working capital.$47,260$57,388$59,868$61,197$81,858Total assets.70,95680,69680,595138,317173,530Short-term debt.8858529727,57811,130Long-term debt,excluding current portion.88051021,75013,143Total stockholders equity.55,74865,27266,93082

275、,011115,64220ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATION.Statements in this Annual Report on Form 10-K concerning our business outlook or future economicperformance,anticipated revenues,expenses or other financial items,product introductions and plans an

276、dobjectives related thereto,and statements concerning assumptions made or expectations as to any futureevents,conditions,performance or other matters,are forward-looking statements as that term is definedunder the Federal securities laws.Forward-looking statements are subject to risks,uncertainties

277、and otherfactors which could cause actual results to differ materially from those stated in such statements.Such risks,uncertainties and factors include,but are not limited to,dependence on licensed product,reliance on foreignmanufacturers,risks of doing business abroad,the nature of the apparel ind

278、ustry,including changingconsumer demand and tastes,seasonality,customer acceptance of new products,the impact of competitiveproducts and pricing,dependence on existing management,possible disruption from acquisitions andgeneral economic conditions,as well as other risks detailed in our filings with

279、the Securities and ExchangeCommission,including this Annual Report on Form 10-K.Unless the context otherwise requires,G-III,us,we and our refer to G-III Apparel Group,Ltd.and its subsidiaries.References to fiscal years refer to the year ended or ending on January 31 of thatyear.For example,our fisca

280、l year ended January 31,2007 is referred to as fiscal 2007.The following presentation of managements discussion and analysis of our consolidated financialcondition and results of operations should be read in conjunction with our financial statements,theaccompanying notes and other financial informat

281、ion appearing elsewhere in this Report.OverviewG-III designs,manufactures,imports and markets an extensive range of outerwear and sportswear,including coats,jackets,pants,skirts,suits,dresses and other sportswear items under licensed labels,ourown proprietary labels and private retail labels.Our pro

282、ducts are distributed through a broad mix of retailpartners at a variety of price points.The concentration of sales to our largest customers has increased overthe past few years.Sales to our ten largest customers were 60.7%of our net sales in fiscal 2006 and61.0%of our net sales in fiscal 2007.We op

283、erate in fashion markets that are intensely competitive.Our ability to continuously evaluateand respond to changing consumer demands and tastes,across multiple market segments,distributionchannels and geographies,is critical to our success.Although our portfolio of brands is aimed atdiversifying our

284、 risks in this regard,misjudging shifts in consumer preferences could have a negative effecton our business.Our success in the future will depend on our ability to design products that are acceptedin the markets we serve,source the manufacture of our products on a competitive basis,particularly inli

285、ght of the impact of the elimination of quota for apparel products,and continue to diversify our productportfolio and the markets we serve.We operate our business in two segments,licensed apparel and non-licensed apparel.The licensedapparel segment includes sales of apparel brands licensed by us fro

286、m third parties.The non-licensedapparel segment includes sales of apparel under our own brands and private label brands.The sale of licensed product has been a key element of our business strategy for many years.As partof this strategy,we added several new fashion and sports apparel licenses over th

287、e past few years.Webelieve that consumers prefer to buy brands they know and we have continually sought licenses thatwould increase the portfolio of name brands we can offer through different tiers of retail distribution,fora wider array of products and at a variety of price points.The sale of licen

288、sed product accounted for63.0%of our net sales in fiscal 2007 compared to 60.8%of our net sales in fiscal 2006 and 63.6%of ournet sales in fiscal 2005.On July 11,2005,we acquired the business of Marvin Richards.Marvin Richards has been anouterwear manufacturer and supplier for over 20 years under th

289、e Marvin Richards brand name.As aresult of this acquisition,we have licenses under the Calvin Klein and ck Calvin Klein brand names.Marvin Richards also conducts a variety of private label programs.On July 11,2005,we also acquired specified operating assets of Winlit Group,Ltd.Winlit has beena suppl

290、ier of outerwear for over 35 years.As a result of acquiring Winlits assets,we have licenses for21mens and womens outerwear under the Guess?brand,leather outerwear under the Tommy Hilfigerbrand,and ladies outerwear under the Ellen Tracy brand.Winlit also sells apparel under the Winlit,LNR,and NY 1001

291、8 owned names and through private label programs.The operating results of Marvin Richards and Winlit,which we acquired on July 11,2005,have beenincluded in our financial statements since the date of acquisition.Marvin Richards and Winlit are in thewholesale outerwear business and are subject to the

292、same seasonality that we are.Our results for the firstthree quarters of fiscal 2006 and for the full 2006 fiscal year exclude the seasonal losses that were incurredby the acquired companies in the first half of fiscal 2006.Results for fiscal 2007 include the operations ofthe acquired companies for t

293、he entire year,as well as interest expense and amortization expense for theentire year relating to the acquisitions.These acquisitions are consistent with our strategy to increase the portfolio of brands that we offerthrough different tiers of retail distribution,for a wider array of products and at

294、 a variety of price points.Both transactions have complemented our existing group of licensed brands,G-III owned labels andprivate label programs.We continue to believe that brand owners will look to consolidate the number of licensees theyengage to develop product and they will continue to look for

295、 licensees with a successful track record ofdeveloping brands.We are continually having discussions with licensors regarding new opportunities.Itis our objective to continue to expand our product offerings.As a result of our acquisition of MarvinRichards,we have licenses for mens and womens outerwea

296、r with Calvin Klein.In September 2005,weentered into a license agreement to manufacture and distribute womens better suits under the CalvinKlein label and in April 2006,we entered into a license agreement to manufacture and distribute womensdresses under the Calvin Klein label.We began shipping the

297、womens suit line in January 2006.We have had a license agreement with Sean John for mens outerwear for over five years.InMarch 2006,we added license agreements to manufacture womens sportswear and outerwear under SeanJohn labels.We began shipping Sean John womens outerwear in October,2006 and expect

298、 to launch theSean John sportswear line for Fall 2007.We also design and produce a line of urban sportswear forWal-Mart under their Exsto label,which began shipping during the second quarter of fiscal 2007.Significant trends that are affecting the apparel industry include the continuing consolidatio

299、n of retailchains,the desire on the part of retailers to consolidate vendors supplying them,the increased focus bydepartment stores on their own private label brands and a shift in consumer shopping preferences awayfrom traditional department stores to other mid-tier and specialty store venues.There

300、 has also beensignificant downward pressure on average retail prices for many categories of apparel.We have respondedto these trends by continuing to focus on selling products with recognized brand equity,by attention todesign,quality and value and by improving our sourcing capabilities.We believe t

301、hat our broaddistribution capabilities help us to respond to the various shifts by consumers between distributionchannels.We also believe that our operational capabilities will enable us to continue to be a vendor ofchoice for our retail partners.Use of Estimates and Critical Accounting PoliciesThe

302、preparation of financial statements in conformity with generally accepted accounting principlesrequires management to make estimates and assumptions that affect the reported amounts of assets andliabilities at the date of the financial statements and revenues and expenses during the reporting period

303、.Significant accounting policies employed by us,including the use of estimates,are presented in the notesto our consolidated financial statements.Critical accounting policies are those that are most important to the portrayal of our financialcondition and our results of operations,and require manage

304、ments most difficult,subjective and complexjudgments,as a result of the need to make estimates about the effect of matters that are inherentlyuncertain.Our most critical accounting estimates,discussed below,pertain to revenue recognition,accounts receivable,inventories,income taxes,goodwill and inta

305、ngible assets and stock-basedcompensation.In determining these estimates,management must use amounts that are based upon itsinformed judgments and best estimates.On an on-going basis,we evaluate our estimates,including those22related to customer allowances and discounts,product returns,bad debts and

306、 inventories,and carryingvalues of intangible assets.We base our estimates on historical experience and on various otherassumptions that we believe are reasonable under the circumstances.The results of these estimates formthe basis for making judgments about the carrying values of assets and liabili

307、ties that are not readilyapparent from other sources.Actual results may differ from these estimates under different assumptionsand conditions.Revenue RecognitionWe recognize a sale at the time merchandise is shipped to the customer.We also act as an agent inbrokering sales between our customers and

308、overseas factories.On these transactions,we recognizecommission fee income on the sales that are financed by and shipped directly to our customers.Thisincome is also recorded at the time the merchandise is shipped.Net sales take into account reserves forreturns and allowances.We estimate the amount

309、of reserves and allowances based on current andhistorical information and trends.Sales are reported net of returns,discounts and allowances.Discounts,allowances and estimates of future returns are recognized when the related revenues are recognized.Accounts ReceivableIn the normal course of business

310、,we extend credit to our customers based on pre-defined creditcriteria.Accounts receivable,as shown on our consolidated balance sheet,are net of allowances andanticipated discounts.In circumstances where we are aware of a specific customers inability to meet itsfinancial obligation(such as in the ca

311、se of bankruptcy filings or substantial downgrading of credit sources),a specific reserve for bad debts is recorded against amounts due to reduce the net recognized receivableto the amount reasonably expected to be collected.For all other customers,an allowance for doubtfulaccounts is determined thr

312、ough analysis of the aging of accounts receivable at the date of the financialstatements,assessments of collectability based on historical trends and an evaluation of the impact ofeconomic conditions.An allowance for discounts is based on reviews of open invoices where concessions have beenextended

313、to customers.Costs associated with allowable deductions for customer advertising expenses arecharged to advertising expenses in the selling,general and administrative section of our consolidatedstatements of income.Costs associated with markdowns and other operational charge backs,net ofhistorical r

314、ecoveries,are included as a reduction of net sales.All of these are part of the allowancesincluded in accounts receivable.We reserve against known charge backs,as well as for an estimate ofpotential future deductions by customers.These provisions result from seasonal negotiations with ourcustomers a

315、s well as historical deduction trends,net of historical recoveries and the evaluation of currentmarket conditions.InventoriesInventories are stated at lower of cost(determined by the first-in,first-out method)or market.Wecontinually evaluate the composition of our inventories,assessing slow-turning,

316、ongoing product as wellas fashion product from prior seasons.The market value of distressed inventory is based on historical salestrends of our individual product lines,the impact of market trends and economic conditions,and the valueof current orders for this type of inventory.Income TaxesAs part o

317、f the process of preparing our consolidated financial statements,we are required to estimateour income taxes in each of the jurisdictions in which we operate.This process involves estimating ouractual current tax exposure,together with assessing temporary differences resulting from differingtreatmen

318、t of items for tax and accounting purposes.These differences result in deferred tax assets andliabilities,which are included within our consolidated balance sheet.Goodwill and Intangible AssetsOn July 11,2005,we acquired Marvin Richards and specified operating assets of Winlit.SFAS No.142 requires t

319、hat goodwill and intangible assets with an indefinite life be tested for impairment at least23annually.Goodwill and intangible assets with an indefinite life are required to be written down whenimpaired,rather than amortized as previous accounting standards required.Goodwill and intangibleassets wit

320、h an indefinite life are tested for impairment by comparing the fair value of the reporting unitwith its carrying value.Fair value is generally determined using discounted cash flows,market multiplesand market capitalization.Significant estimates used in the fair value methodologies include estimate

321、s offuture cash flows,future short-term and long-term growth rates,weighted average cost of capital andestimates of market multiples of the reportable unit.If these estimates or their related assumptionschange in the future,we may be required to record impairment charges for our goodwill and intangi

322、bleassets with an indefinite life.The process of evaluating the potential impairment of goodwill is subjective and requires significantjudgment at many points during the analysis.In estimating the fair value of a reporting unit for thepurposes of our annual or periodic analyses,we make estimates and

323、 judgments about the future cash flowsof that reporting unit.Although our cash flow forecasts are based on assumptions that are consistent withour plans and estimates we are using to manage the underlying businesses,there is significant exercise ofjudgment involved in determining the cash flows attr

324、ibutable to a reporting unit over its estimatedremaining useful life.In addition,we make certain judgments about allocating shared assets to theestimated balance sheets of our reporting units.We also consider our and our competitors marketcapitalization on the date we perform the analysis.Changes in

325、 judgment on these assumptions andestimates could result in a goodwill impairment charge.We allocated the purchase price of the companies we acquired in fiscal 2006 to the tangible andintangible assets acquired and liabilities assumed,based on their estimate fair values.These valuationsrequire manag

326、ement to make significant estimations and assumptions,especially with respect tointangible assets.The amount allocated to goodwill was increased with respect to each of fiscal 2006 andfiscal 2007 as a result of additional payments made based on the performance of these companies.Critical estimates i

327、n valuing intangible assets include future expected cash flows from licenseagreements,trade names and customer relations.In addition,other factors considered are the brandawareness and market position of the products sold by the acquired companies and assumptions about theperiod of time the brand wi

328、ll continue to be used in the combined companys product portfolio.Managements estimates of fair value are based on assumptions believed to be reasonable,but which areinherently uncertain and unpredictable.If we did not appropriately allocate these components or we incorrectly estimate the useful liv

329、es ofthese components,our computation of depreciation and amortization expense may not appropriatelyreflect the actual impact of these costs over future periods,which will affect our net income.Stock-based CompensationEffective February 1,2006,we adopted Statement of Financial Accounting Standards N

330、o.123R,Share Based Payment(SFAS 123R).We elected to use the modified prospective transition method;therefore,prior period results were not restated.Prior to the adoption of SFAS 123R,stock-basedcompensation expense related to stock options was not recognized in our results of operations if theexerci

331、se price was at least equal to the market value of our common stock on the grant date.As a result,the recognition of stock-based compensation expense in prior periods was generally limited to theexpense attributed to restricted stock awards.SFAS 123R requires all share-based payments to employees,in

332、cluding grants of employee stockoptions,to be recognized as compensation expense over the service period(generally the vesting period)in the consolidated financial statements based on their fair values.We utilize the Black-Scholes optionpricing model to estimate the fair value of stock-based compens

333、ation at the date of grant.TheBlack-Scholes model requires subjective assumptions regarding dividend yields,expected volatility,expected life of options and risk-free interest rates.These assumptions reflect managements bestestimates.Changes in these inputs and assumptions can materially affect the estimate of fair value and theamount of our stock-based compensation expenses.We recognized approxim