G-III Apparel Group, Ltd. (GIII) 2004年年度報告「NASDAQ」.pdf

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1、2004Form 10-kAnnual ReportG-III APPAREL GROUG-III APPAREL GROUP P,LT,LTD D.G-IIIMENSSPORTSWOMENSC CECEECE C CORDORDG-IIIJones New YorkSPORTSCollegiateNational Football LeagueMajor League BaseballMajor League BaseballNational Football LeagueMENSSean JohnIzodBlack RivetCole HaanKenneth ColeWOMENSBlack

2、 RivetSiena StudioCole HaanJones New YorkHouse of Deronby BeyoncNine Westwe have positioned our business advantageously for fiscal2006 and into the future.In terms of our business mix,we looked to add new programs and made excellent progress in this regard.First,we augmented our mix with some great

3、new busi-nesses.We are excited to have recently signed a mens and womens outerwear license with Phillips-Van Heusen for the IZOD brand.This line will be inspired by a culture of sport and leisure and will be targeted at a 25 to 45 year-old customer with a modern relaxed attitude towards dressing.We

4、have also signed a new license with House of Deron,a brand by the entertainer,Beyonc Knowles.Beyonc is one of the most sought after entertainers in our country today.The brand has great style and a clear message for the consumer.We expect to launch this line for the 2005 holiday season with an 18 to

5、 28year-old target consumer.We also expanded our license with Kenneth Cole to include the mens outer-wear business.Kenneth Coles mens outerwear is already established in the marketplace and will be a good addition to our business.Many of our existing lines continue to be well positioned.We are pleas

6、ed with our core sports business,which is off to a good start this year.Cole Haan and Sean Jean,While we were not satisfied by the financial results we experienced in fiscal 2005,we believe that our Company is well positioned for the future.There was a sharp decline in the popularity of fashion vint

7、age sports apparelwhich had excellent results in fiscal2004.However,sales of this type of product decreased dramatically in fiscal 2005.Our results were also impacted by a slow start to the outerwear season in general.Promotional efforts started sooner than normal as retailers looked to rebound from

8、 poor early season sales.As a consequence,our results of operations were negatively impacted by higher levels of off-price sales,allowances and markdowns than we initially anticipated.For the 2005 fiscal year that ended January 31,2005,we reported net sales of$214.3 million compared to$225.1 million

9、 last year and net income of$703,000,or$0.09 per diluted share,compared to$8.4million,or$1.14 per diluted share,last year.Fortunately,these results do not tell the whole story.We have made good strategic and operational progress over the course of the year.Our main initiative was to make our Company

10、 more competitive and efficient.We took a hard look at our business from a number of standpoints and are addressing our business mix,our sourcing and our distribution infrastructure.We believe Dear Shareholders,Shareholders Letterboth of which are strong brands,are also performing very well.We conti

11、nue to develop our own Black Rivet brand and are encouraged by its prospects.Coming on the heels of a successful launch of the Black Rivet womens line,we expect to introduce Black Rivet mens outerwear for the fall 2005 season.Our Jones Wool line should deliver another successful year.Finally,we are

12、looking forward to expanding our distribution of the CeCe Cord brand,given the continuing strength of the luxury market.Retailers and apparel manufacturers are merging at a rapid pace and retailers have indicated a desire to deal with fewer vendors.There is continued pressure on margins as average r

13、etail prices continue to drop.We believe our strategy of focusing on branded products that are distributed across all retail channels is sound.As a result of our continued attention to design,quality and value,we believe we are well positioned to respond to the consolidations taking place.We also be

14、lieve our strong operational capabilities will continue to make us a leading vendor of choice for our retail partners.As part of our growth strategy,we continue to evalu-ate strategic acquisition candidates in order to foster our growth,further diversify our business,and enhance shareholder value.Wh

15、ile growing the revenue base is important,we have also pushed for efficiency.We reviewed our staffing levels on a Company-wide basis.In addition,by moving our primary sourcing offices to China from Korea,we will be able to work closer with our vendor base,incur lower staffing costs,and expect to be

16、able to improve our margins.Additionally,in the year ahead we will be almost doubling our internal warehouse capacity to over 200,000 square feet.We believe this expansion will help us ship better and more efficiently.With renewed focus on how we allocate our resources,more efficient sourcing and di

17、stribution operations,and initial development of our new properties,we begin the current fiscal year in a much stronger position and expect improved results for our shareholders in fiscal 2006.As always,I would like to again thank our employees for their persistent dedication and hard work,our retai

18、l partners for their continued commitment to us,and,lastly,our shareholders for their unwavering support.Morris GoldfarbCo-Chairman and Chief Executive Officer0$0.50$1.00$1.5001 05*0403*02Diluted Earnings per Share$2.00010,00020,00030,00040,00050,00060,00070,0000105040302Gross Profit($000)050,000100

19、,000150,000200,0000105040302Net Sales($000)250,000*Includes a charge of$3.4 million,net of tax,associated with expenses related to closing the Companys manufacturing facility in Indonesia.*Includes a charge of$.9 million,net of tax,associated with the sale of the Companys joint venture interest in C

20、hina.($000 except per share data)Fiscal Years Ended January 31 2001 2002 2003 2004 2005Net Sales(a)$187,398$201,855$203,301$225,061$214,278Net Income$11,154$2,364$382(b)$8,376$703(c)Diluted Earnings Per Share$1.57$0.32$0.05(b)$1.14$0.09(c)Working Capital$41,931$46,140$47,260$57,388$59,868Total Asset

21、s$71,952$67,701$70,956$80,696$80,595Stockholders Equity$52,142$54,813$55,748$65,272$66,930Return on Stockholders Equity 21.4%4.3%0.7%13.9%1.1%Book Value Per Share$7.86$8.18$8.11$9.19$9.20Common Shares Outstanding (excluding shares held in Treasury)6,633 6,699 6,876 7,103 7,277(a)Amount for fiscal ye

22、ars 2001 through 2004 have been reclassified to conform to the current year presentation.(b)Includes a charge of$3.4 million,net of tax,associated with expenses related to closing the Companys manufacturing facility in Indonesia.(c)Includes a charge of$.9 million,net of tax,associated with the sale

23、of a joint venture interest in China.Financial HighlightsSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM10-K?ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THESECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED JANUARY 31,2005ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OFTHE

24、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)Delaware41-1590959(State or other jurisdiction ofincorporation or organization)(I.R.S.Employer Identification No.)512 Seventh Ave

25、nue,New York,New York10018(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code:(212)403-0500Securities registered pursuant to Section 12(b)of the Act:NoneSecurities registered pursuant to Section 12(g)of the Act:Common Stock,$.01 par value.Indicate by ch

26、eck mark whether the registrant(1)has filed all reports required to be filed by Section13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorterperiod that the registrant was required to file such reports),and(2)has been subject to such filingrequirements f

27、or 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 this Chapter)is not contained herein,and will not be contained,to the best of registrantsknowledge,in definitive proxy or information statements incorporated by refer

28、ence in Part III of thisForm 10-K or any amendment to this Form 10-K.Indicate by checkmark if the registrant is an accelerated filer(as defined in Rule 12b-2 of the Act).YesNo?As of July 31,2004,the aggregate market value of the registrants voting stock held by non-affiliatesof the registrant(based

29、on the last sale price for such shares as quoted by the Nasdaq National Market)was$23,749,663The number of outstanding shares of the registrants Common Stock as of March 31,2005 was7,283,498.Documents incorporated by reference:Certain portions of the registrants definitive Proxy Statementrelating to

30、 the registrants Annual Meeting of Stockholders to be held on or about June 9,2005,to be filedpursuant to Regulation 14A of the Securities Exchange Act of 1934 with the Securities and ExchangeCommission,are incorporated by reference into Part III of this Report.ITEM 1.BUSINESSUnless the context othe

31、rwise 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 31,2005 is referred to as fiscal 2005.Our Internetaddress is www.g-.OverviewG-III

32、designs,manufactures,imports and markets an extensive range of outerwear and sportswearincluding coats,jackets,pants,skirts and other sportswear items,as well as handbags and accessories,under licensed labels,our own proprietary labels and private retail labels.Our strategy is based upondelivering s

33、uperior apparel value to the retail consumer through recognizable brands.We distribute ourproducts through a broad mix of retail partners at a variety of price points.The sale of licensed products is a key element of our strategy.We have been distributing productsunder licensed brands for over ten y

34、ears.We have licenses to produce products under the Kenneth ColeNew York,Reaction Kenneth Cole,Nine West,Cole Haan,Jones New York,Jones NY Collection,SeanJohn,Bill Blass,Blassport,and James Dean fashion labels.We are also licensed to produce productscontaining trademarks of the National Football Lea

35、gue,National Basketball Association,Major LeagueBaseball,National Hockey League,Louisville Slugger,Hardwood Classics and many colleges anduniversities located in the United States.During fiscal 2005,we continued to expand our portfolio of licensed fashion brands.We entered intoa long-term license ag

36、reement with Cece Cord for handbags,accessories and apparel.We have begunbuilding this brand carefully with the initial product being luxury handbags.We signed a licenseagreement with Phillips-Van Heusen with respect to their IZOD brand for mens and womensnon-leather outerwear and added Kenneth Cole

37、 mens outerwear to our business while also extending ourKenneth Cole womens outerwear license.In March 2005,we announced a license to manufacture ayoung,contemporary womens outerwear line for House of Dere on,a brand by the entertainer,Beyonce Knowles.We also expanded our portfolio of sports license

38、s during fiscal 2005.Our agreement with NFLProperties was renewed for two years,effective April 1,2005.We will continue to manufacture andmarket a comprehensive line of adult outerwear under a variety of NFL trademarks.We added licenseswith NASCAR for active wear and outerwear for men,women and juni

39、ors,and with World Poker Tourfor mens and womens casual sportswear and outerwear.In addition,we became the exclusive mens andwomens licensee for The Yard,a branding program launched by the Collegiate Licensing Companydedicated to the tradition,culture and aspiration of historically black colleges an

40、d universities.Proprietary labels under which we currently sell product include G-III,Black Rivet,Siena,SienaStudio,Colebrook&Co.,JLC,J.L.Colebrook,Colebrook,Colebrook Essentials,Colebrook Classics andG-III by Carl Banks.We operate our business in two segments,licensed apparel and non-licensed appar

41、el.The licensedapparel segment includes sales of apparel brands 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,as well as commission fee income received on sales that are financed

42、 by and shippeddirectly to our customers.See Note L to our Consolidated Financial Statements for financial informationwith respect to these segments.We are a Delaware corporation that was formed in 1989.We and our predecessors have conductedour business since 1974.Products Development and DesignG-II

43、I manufactures and markets womens and mens apparel at a wide range of retail sales prices.Ourproduct offerings primarily include leather,wool and textile outerwear and sportswear.We sell productsunder licensed brand names,our own brand names and private retail labels.3G-IIIs licensed apparel consist

44、s 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.Womens licensed apparel includes leather,wool and textile garments that sell at retail pricesgenerally ranging from$

45、100 for sportswear items to$2,500 for outerwear.Mens licensed apparel consistsof leather and textile garments that generally sell at retail prices ranging from$50 for sportswear itemsto$2,000 for outerwear.We work closely with our licensors in creating designs and styles for each licensed brand sold

46、 by us.Licensors generally must approve products to be sold under their brand names prior to production by us.G-IIIs proprietary branded apparel also consists of both mens and womens products.The BlackRivet,Colebrook,Colebrook Essentials and Colebrook Classics lines of womens apparel consist ofmoder

47、ately priced womens outerwear and sportswear that typically sell at retail prices from$40 forsportswear items to$250 for outerwear.Products in our mens outerwear lines primarily consisting ofleather outerwear,sold under the G-III and Colebrook labels,typically have retail prices between$40 and$400.S

48、iena Studio,our bridge-priced line of womens leather and textile apparel,primarily consists ofjackets,skirts and related sportswear separates with retail prices from$100 for skirts to$700 forouterwear.We also work with retail chains in developing product lines sold under private labels.We meetfreque

49、ntly with department and specialty chain store buyers who custom order products by color,fabricand style.These buyers may provide samples to us or may select styles already available in ourshowrooms.We believe we have established a reputation among these buyers for the ability to arrangefor the manu

50、facture of apparel on a reliable,expeditious and cost-effective basisOur in-house designers are responsible for the design and look of our licensed and non-licensedproducts.We respond to style changes in the apparel industry by maintaining a continuous program ofstyle,color,leather,and fabric select

51、ion.In designing new products and styles,we attempt to incorporatecurrent trends and consumer preferences in our product offerings.We seek to design products in responseto trends in consumer preferences,rather than to attempt to establish market trends and styles.Design personnel meet regularly with

52、 our sales and merchandising department,as well as with thedesign and merchandising staffs of our licensors,to review market trends,sales results and the popularityof our latest products.In addition,our representatives regularly attend trade and fashion shows and shopat fashion forward stores in the

53、 United States,Europe and the Far East.Their efforts include extensiveresearch using trend and color services.They present sample items to us along with their evaluation of thestyles expected to be in demand in the United States.We also seek input from selected customers withrespect to product desig

54、n.We believe that our sensitivity to the needs of retailers,coupled with theflexibility of our production capabilities and our continual monitoring of the retail market,enables us tomodify designs and order specifications in a timely fashion.Manufacturing and SourcingG-III imports its products from

55、independent manufacturers located primarily in China and,to alesser extent,in South Korea,the Ukraine,Eastern Europe,Macau,Sri Lanka and Vietnam.A portionof our wool garments is manufactured in the United States.In January 2005,we sold our joint venture interest in a factory in Northern China to our

56、 joint venturepartner.We manufactured approximately 12%of our products at this factory in fiscal 2005.We expect tocontinue to source comparable levels of production through this factory.As of January 31,2005,wecontinued to employ 39 people at this factory to perform quality control and supervisory f

57、unctions.We are in the process of opening two representative offices in China.As a result,we are also in theprocess of closing our branch office in Korea that had acted as a liaison between us and manufacturers inthe Far East.Our new offices are located in Qingdao and Hangzhou,China.Because a majori

58、ty of ourproduction is being sourced in China,we believe it is more efficient to provide the liaison functions incloser proximity to where the manufacturing occurs.Our China offices will perform all the functions thathad previously been performed in Korea.At January 31,2005,we had 19 employees in ou

59、r Qingdaobranch office,8 employees in our Hangzhou branch office and 5 employees remaining in our SouthKorean office.4G-IIIs headquarters provides these liaison offices with production orders stating the quantity,qualityand types of garments to be produced.Liaison office personnel negotiate and plac

60、e orders with one ormore manufacturers.In allocating production among independent suppliers,we consider a number ofcriteria,including quality,availability of production capacity,pricing and ability to meet changingproduction requirements.To facilitate better service for our customers and accommodate

61、 the volume of manufacturing in theFar East,we also have an office in Hong Kong.Similar to the offices in China,the Hong Kong office actsas a liaison between G-III and various manufacturers of textile and leather apparel located in China.Weutilize our domestic and Hong Kong office employees to monit

62、or production at each manufacturersfacility to ensure quality control,compliance with our specifications and timely delivery of finishedgarments to our distribution facilities or customers.At January 31,2005,the Hong Kong office employed5 persons.In connection with the foreign manufacture of our app

63、arel,manufacturers purchase leather skinsunder our direction.In addition,they purchase necessary submaterials(such as linings,zippers,buttonsand trimmings)according to parameters specified by us.Prior to commencing the manufacture ofgarments,samples of the skins or submaterials are sent to us for ap

64、proval.We regularly inspect andsupervise the manufacture of products for us in order to ensure timely delivery,maintain quality controland monitor compliance with our manufacturing specifications.We also inspect finished apparel at thefactory site.The manufacture of the substantial majority of our a

65、pparel 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.Products are inspected throughout this process to insure that the design and quality specifications of theorder provided by us are being maintained

66、 as the garment is assembled.After pressing,cleaning and finalinspection,the garment is labeled and ready for shipment.A final random inspection occurs when thegarments are packed for shipment.We generally arrange for the production of apparel on a purchase order basis,with each order to aforeign ma

67、nufacturer generally backed by an irrevocable international letter of credit.Substantially allletters of credit arranged by us require as a condition,among others,of release of funds to themanufacturer that an inspection certificate be signed by our representative.Accordingly,if an order is notfille

68、d,the letter of credit is not paid and we do not bear the risk of liability for the goods beingmanufactured.We assume the risk of loss predominantly on a F.O.B.basis when goods are delivered toa shipper and are insured against casualty losses arising during shipping.As is customary in the apparel in

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

70、eable future.We believe that alternative foreign apparelmanufacturers are readily available.Until January 1,2005,our textile apparel was subject to quota restrictions.Quota represented theright to export amounts of certain categories of merchandise into a country.On January 1,2005,pursuantto the Agr

71、eement on Textiles and Clothing,quota on textile and apparel products was eliminated forWorld Trade Organization,or WTO,members,including the United States.Chinas accession agreementfor membership in the WTO provides that WTO member countries may re-impose quotas on specificcategories of products if

72、 it is determined that imports from China have surged and are threatening tocreate a market disruption for these categories of products.It is too soon for us to assess the effect of theelimination of quotas.Our arrangements with textile manufacturers and suppliers are subject to requisite customscle

73、arances 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

74、time,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.We5seek to minimize our potential exposure to import related risks through,among other measures,ge

75、ographical diversification of manufacturing sources and shifts of production among countries andmanufacturers.Virtually all of our imported leather products are subject to United States Customs dutiesof approximately 6%.A majority of all finished goods manufactured for us is shipped to our New Jerse

76、y warehouse anddistribution facility or to designated third party facilities for final inspection and allocation and reshipmentto customers.The goods are delivered to our customers and us by independent shippers,choosing theform of shipment(principally ship,truck or air)based upon a customers needs,

77、cost and timeconsiderations.Marketing and DistributionG-IIIs products are sold primarily to department,specialty and mass merchant retail stores in theUnited States.We sell to approximately 3,000 customers,ranging from national and regional chains ofspecialty retail and department stores,whose annua

78、l purchases from us exceed$1 million,to smallspecialty stores whose annual purchases from us are less than$1,000.Sales to the Sams Club and Wal-Mart divisions of Wal-Mart Stores,Inc.accounted for an aggregateof 20.2%of our net sales in fiscal 2003,15.3%of our net sales in fiscal 2004 and 15.0%of our

79、 net sales infiscal 2005.The loss of this customer,or a significant reduction in purchases by this customer,could havea material adverse affect on our results of operations.No other customer accounted for more than 8%ofour net sales during any of these three fiscal years.Almost all of our sales are

80、made in the United States.We also market our products in Canada andEurope,which account for less than 1%of our total net sales.Along with our foreign offices,our trading company subsidiary,Global International TradingCompany,or Global,located in Seoul,Korea,had assisted in providing services to our

81、customers.Inconnection with our opening of the two new representative offices in China,Global is currentlytransitioning these functions to our China offices.The functions include managing a sample room andassisting in the procurement of finished garments.As of January 31,2005,Global employed 12 pers

82、ons.G-IIIs products are sold primarily through a direct sales force that consisted of 38 employees as ofJanuary 31,2005.Our principal executives are also actively involved in sales of our products.Some of ourproducts are also sold by various retail buying offices and independent sales representative

83、s locatedthroughout the United States.Final authorization of all sales of products is solely through our New Yorkshowroom,enabling our management to deal directly with,and be readily accessible to,major customers,as well as to more effectively control our selling operations.Brand name products sold

84、by us pursuant to a license agreement are promoted by institutional andproduct advertisements placed by the licensor.Our license agreements generally provide that we arerequired to pay the licensor a fee,based on a percentage of net sales of licensed product,to pay for aportion of these advertising

85、costs.We may also be required to spend a specified percentage of net salesof a licensed product on advertising placed by us.We primarily rely on our reputation and relationships to generate business in our non-licensedsegment.We believe we have developed a significant customer following and positive

86、 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 products.In addition,we have,to a limited extent,advertised our own labels and engaged in cooper

87、ative advertising programswith retailers.We believe we have developed brand awareness of our own labels primarily through ourreputation,consumer acceptance and the fashion press.Raw MaterialsWe purchase most products manufactured for us on a finished goods basis.Raw materials used in theproduction o

88、f our apparel are available from numerous sources.The leather apparel industry competeswith manufacturers of other leather products for the supply of leather.Leather skins are a byproduct.6Accordingly,raw material costs for leather products are impacted by changes in meat consumptionworldwide,as wel

89、l as by the popularity of leather products.We are not aware of any manufacturer of our apparel not being able to satisfy its requirements forany required raw materials due to an inadequacy of supply.LicensingThe sale of licensed products is a key element of our strategy and we have continually expan

90、ded ourofferings of licensed products over the past ten years.During fiscal 2005,we expanded our license with Kenneth Cole Productions to include mensouterwear under the Kenneth Cole New York and Reaction Kenneth Cole fashion labels,while alsoextending our license for Kenneth Cole womens outerwear.W

91、e entered into license agreements withCece Cord for handbags,accessories and apparel,and with Phillips-Van Heusen Corporation with respectto its IZOD brand for mens and womens non-leather outerwear.Our initial products under the CeCeCord label are luxury handbags.We expect to begin shipping mens IZO

92、D product for the 2005 fall seasonand womens IZOD product for the 2005 holiday season.We expanded our portfolio of sports apparel licenses to include the World Poker Tour for mens andwomens casual sportswear and outerwear,NASCAR for activewear and outerwear for men,women andjuniors and The Yard for

93、mens and womens apparel and outerwear.We also extended our agreementwith NFL Properties for a two year period effective April 1,2005.In March 2005,we announced a license to manufacture a young,contemporary womens outerwearline for House of Dere on,a brand by the entertainer,Beyonce Knowles.We expect

94、 to launch this line forthe 2005 holiday season.Our license with Timberland expired by it terms on December 31,2004.Sales of Timberland productdid not represent a significant portion of our revenue.7The following table sets forth for each of our principal licenses the date on which the current terme

95、nds and the date on which any potential renewal term ends:LicenseDate CurrentTerm EndsDate PotentialRenewal Term EndsKenneth Cole NY/Reaction Kenneth ColeDecember 31,2008December 31,2012Nine WestJanuary 31,2007NoneCole HaanJanuary 31,2007NoneJones New York/Jones NY CollectionJanuary 31,2007January 3

96、1,2009Sean JohnJanuary 31,2007January 31,2010Cece CordJanuary 31,2024NoneIZODDecember 31,2007December 31,2013House of Dere onJanuary 31,2009January 31,2012Bill Blass/BlassportJanuary 31,2006January 31,2009National Football LeagueMarch 31,2007NoneNational Basketball AssociationSeptember 30,2006NoneMa

97、jor League BaseballDecember 31,2007NoneNational Hockey LeagueJune 30,2006NoneNHL CanadaDecember 31,2005NoneHardwood ClassicsSeptember 30,2005NoneCollegiate Licensing CompanyMarch 31,2007NoneCLC/The YardJune 30,2006NoneLouisville SluggerJanuary 31,2008January 31,2011United States Tennis AssociationDe

98、cember 31,2005NoneJames Dean LeatherDecember 31,2006December 31,2010James Dean DenimDecember 31,2006NoneNASCARDecember 31,2005NoneWorld Poker TourSeptember 30,2007NoneUnder our licensing agreements,we are generally required to achieve minimum net sales of licensedproducts,pay guaranteed minimum roya

99、lties,make specified royalty and advertising payments,usuallybased on a percentage of net sales of licensed products,and receive prior approval of the licensor as toall elements of a garment prior to production.If we do not satisfy any of these requirements,a licensorusually will have the right to t

100、erminate our license.Our ability to extend 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.In addition,othercriteria may also impact our ability to renew a license.We cannot be sur

101、e that we will be able to renewa license agreement when it expires even if we desire to do so.In November 2004,we entered into a license agreement with Kenneth Cole Productions(LIC),Inc.to manufacture,market and distribute mens and womens outerwear under the Kenneth Cole NewYork and Reaction Kenneth

102、 Cole trademarks.We previously had a license agreement with KennethCole Productions for these trademarks for womens outerwear that was to expire December 31,2004.Thenew agreement expands our relationship with Kenneth Cole Productions from the prior agreement toinclude both womens and mens outerwear.

103、The license agreement,which was effective January 1,2005,is for a term of four years with onefour-year renewal term,subject to satisfying certain performance conditions,including achieving certainlevels of net sales.The agreement provides for the payment to Kenneth Cole Productions of a licenseacqui

104、sition fee payable one third at signing and the remainder in equal annual installments over the termof the agreement,as well as the issuance of 50,000 shares of our common stock to Kenneth ColeProductions.Under the terms of the agreement,we are required to achieve minimum net sales of licensedproduc

105、t each year,make royalty and advertising payments to Kenneth Cole Productions based on apercentage of net sales,pay guaranteed minimum royalty and advertising payments to Kenneth ColeProductions each year and spend amounts to promote and market licensed products based on apercentage of net sales.8We

106、 continue to seek other opportunities to enter into license agreements in order to expand ourproduct offerings under nationally recognized labels and broaden the markets that we serve.Revenuesfrom the sale of licensed products accounted for 68.0%of our net sales during fiscal 2005 compared to78.4%of

107、 our net sales in fiscal 2004 and 52.8%of our net sales in fiscal 2003.In fiscal 2005,the decreasein sales of licensed product as a percentage of total net sales was primarily attributable to our largestcustomer shifting from orders for licensed product to orders for our proprietary branded product.

108、Thesignificant increase in fiscal 2004 compared to fiscal 2003 in the percentage of our net sales accounted forby licensed products was the result of increased sales of our licensed sports apparel and the shift in salesto our largest customer from primarily proprietary branded product to primarily l

109、icensed product.SeasonalityRetail sales of outerwear apparel have traditionally been seasonal in nature.Although we sell ourapparel products throughout the year,net sales in the months of July through November accounted forapproximately 74%of our net sales in fiscal 2005,75%of our net sales in fisca

110、l 2004 and 76%of our netsales in fiscal 2003.The July through November time frame is expected to continue to provide adisproportionate amount of our net sales.BacklogA portion of our orders are short-term purchase orders from customers who place orders on anas-needed basis.Information relative to op

111、en purchase orders at any date may also be materially affectedby,among other things,the timing of the initial showing of apparel to the trade,as well as by the timingof recording of orders and shipments.As a result,we do not believe that disclosure of the amount of ourunfilled customer orders at any

112、 time is meaningful.TrademarksSeveral trademarks owned by us have been granted federal trademark protection through registra-tion with the U.S.Patent and Trademark Office,including G-III,G-III(&Design),J.L.Colebrook,JLC,Colebrook&Co.,Ladies First by G-III/Carl Banks,American Classics By Colebrook,Bl

113、ack Rivet&Design lower diamond,Black Rivet,Black Rivet&Design upper diamond,Black Rivet&Designcircles and diamond,ColeB Co.(&Design),Siena Studio and Sports 58(&Design).We haveapplications for several additional marks pending before the U.S.Patent and Trademark Office.We have been granted trademark

114、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,and forJ.L.C.(&Design)and JLC(&Design)in Canada.We also have one application pending in Canada.Although we regard our trademarks as valuable assets and

115、intend to vigorously enforce ourtrademark rights,we do not believe that any failure to obtain federal trademark registrations for whichwe have applied would have a material adverse effect on us.Risk FactorsWe believe that the occurrence of any one or some combination of the following factors could h

116、avea material adverse effect on our business,financial condition and results of operations.Competition and MarketplaceThe apparel business is highly competitive.We have numerous competitors with respect to the saleof leather and textile apparel,including distributors that import leather apparel from

117、 abroad and domesticretailers with established foreign manufacturing capabilities.Many of our competitors have greaterfinancial and marketing resources and greater manufacturing capacity than we do.We also compete withvertically integrated apparel manufacturers that also own retail stores.The aggres

118、sive and competitivenature of the apparel industry may result in lower prices for our products and decreased gross profitmargins,either of which may materially adversely affect our sales and profitability.Sales of our productsare affected by style,price,quality and general fashion trends.9We sell ou

119、r products to major department,mass merchant and specialty store chains.Continuedconsolidation in the industry,such as the proposed purchase of May Department Store Company byFederated Department Stores,Inc.,could negatively impact our business.Our customers buyingpatterns,as well as the need to pro

120、vide additional allowances to vendors,could have a material adverseeffect on our business,results of operations and financial condition.Customers strategic initiatives,including developing their own private labels brands and reducing the number of vendors they purchasefrom,could also impact our sale

121、s to these customers.Dependence on Licensed ProductWe are dependent on sales of licensed product for a substantial portion of our revenues.In fiscal2005,revenues from the sale of licensed product accounted for 68.0%of our net sales compared to 78.4%of our net sales in fiscal 2004 and 52.8%of our net

122、 sales in fiscal 2003.We are generally required to achieve specified minimum net sales,pay specified royalties andadvertising payments and receive prior approval of the licensor as to all elements of a garment prior toproduction.License agreements also may restrict our ability to enter into other li

123、cense agreements forcompeting products.If we do not satisfy any of these requirements,a licensor usually will have the rightto terminate our license.Even if a licensor does not terminate our license,the failure to achieve net salessufficient to cover our required minimum royalty payments could have

124、a material adverse effect on ourresults of operations.If a license contains a renewal provision,there are usually minimum sales and otherconditions that must be met in order to be able to renew a license.Even if we comply with all the termsof a licensing agreement,we cannot be sure that we will be a

125、ble to renew an agreement when it expireseven if we desire to do so.Nature of Apparel IndustryOur 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 multipleproduct lines and t

126、iers 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.For example,a key part of our success in fiscal 2004 was a resultof in

127、creased sales of fashion sports apparel.This trend did not continue in fiscal 2005 and,as a result,ourresults of operations were materially adversely affected.We need to respond to changing trends in orderto be successful.We often produce garments to hold in inventory in order to meet our customers

128、deliveryrequirements 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 with others.Inaddition,weak sales and resulting markdown requests from customers could have a mater

129、ial adverseeffect on our business,results of operations and financial condition.The apparel industry is cyclical.Purchases of outerwear,sportswear and other apparel tend to declineduring recessionary periods and sales of our products may decline at other times as well for a variety ofreasons,includi

130、ng changes in fashion trends and the introduction of new products or pricing changes byour competitors.Uncertainties regarding future economic prospects could affect consumer-spendinghabits and have an adverse effect on our results of operations.Uncertainty with respect to consumerspending as a resu

131、lt of weak economic conditions has in the past caused our customers to delay the placingof initial orders and to slow the pace of reorders during the seasonal peak of our business.This had amaterial adverse effect on our results of operations at times in the past and could have a material adverseeff

132、ect on our results of operations in the future as well.Dependence on Key PersonnelWe are dependent on Morris Goldfarb and other key personnel.The loss of the services of Mr.Goldfarb and any negative market or industry perception arising from the loss of his services could havea material adverse effe

133、ct on us and the price of our shares.Our other executive officers have substantialexperience and expertise in our business and have made significant contributions to our success.Theunexpected loss of services of one or more of these individuals could adversely affect us.10Doing Business Abroad and D

134、ependence on Independent Foreign ManufacturersOur arrangements with foreign manufacturers are subject to the usual risks of doing business abroad,including currency fluctuations,political instability and potential import restrictions,duties and tariffs.Wedo not maintain insurance for the potential l

135、ost profits due to disruptions of our overseas factories.Because our products are produced abroad,political and/or economic instability in China or elsewherecould cause substantial disruption in the business of our foreign manufacturers.This could materiallyadversely affect our financial condition a

136、nd results of operations.Almost all of our products are imported from independent foreign manufacturers.Our dependenceon independent manufacturers has increased as a result of the closing of our Indonesian manufacturingfacility and the sale of our joint venture interest in a manufacturing facility i

137、n China.The failure ofindependent manufacturers to ship products to us in a timely manner or to meet required qualitystandards could cause us to miss the delivery date requirements of our customers.The failure to maketimely deliveries could cause customers to cancel orders,refuse to accept delivery

138、of products or demandreduced prices,any of which could have a material adverse effect on our business.We are also dependent on these manufacturers for compliance with our policies and the policies ofour licensors and customers regarding labor practices.In addition,since we negotiate our purchase ord

139、erswith foreign manufacturers in United States dollars,the value of the United States dollar against localcurrencies could impact our cost in dollars of production from these manufacturers.If there is continueddownward pressure on the value of the dollar,our purchase prices for our products could in

140、crease.Wemay not be able to offset an increase in product costs with a price increase to our customers.Quotas and Other Trade RegulationLegislation that would restrict the importation or increase the cost of textiles and apparel producedabroad has been periodically introduced in Congress.The enactme

141、nt of new legislation or internationaltrade regulation,or executive action affecting international 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

142、 imported.The quota system established by the World Trade Organization was eliminated on December 31,2004.We cannot be certain of the full impact that this elimination will have on international trade ingeneral and the apparel industry in particular.We also cannot be certain of the impact of quotael

143、imination on our business,including increased competition that could result from the importation of anincreasing amount of lower priced apparel into the United States.Notwithstanding quota elimination,Chinas accession agreement for membership in the WTO provides that WTO member countries,including t

144、he United States,may re-impose quotas on specific product.We are unable to assess thepotential for action by the United States government in the event that the quantity of imported apparelsignificantly disrupts the apparel market in the United States.Action by the United States in response toa disru

145、ption in its apparel market could limit our ability to import apparel and increase our costs.Need for FinancingThe continued growth of our business depends on our access to sufficient funds to support ourgrowth.Our primary source of working capital to support our growth is our existing line of credi

146、t.Wehave had this line of credit for over ten years and have been able to increase the maximum availabilityunder this line several times in the past few years.This line of credit expires on May 31,2008.Our growthis dependent on our ability to continue to extend and increase this line of credit.If we

147、 are unable to doso,we cannot be sure we will be able to secure alternative financing on satisfactory terms.Raw MaterialsFluctuations in the price,availability and quality of leather or other raw materials used by us couldhave a material adverse effect on our cost of goods sold and ability to meet c

148、ustomer demands.Wecompete with numerous entities for supplies of raw materials and manufacturing and tanning capacity.The supply of leather is vulnerable to animal diseases as well as natural disasters that can affect the supply11and price of raw leather.For example,in the past the outbreak of mad-c

149、ow and foot-and-mouth diseasein Europe,and its after effects,adversely affected the supply of leather.Any reoccurrence of thesediseases could adversely affect us.General Business RisksIn addition to the factors described above,our business,including our revenues and profitability,isinfluenced by and

150、 subject to a number of factors that are inherently uncertain and difficult to predictincluding,among others:the variability of our results in any period due to the seasonal nature of thebusiness;risks associated with consolidations,restructurings and other ownership changes in the retailindustry;ch

151、anges in regional,national and global economic conditions;and our ability to correctly balancethe level of our finished goods,leather and other raw material commitments with actual orders.Control by Principal StockholdersAs of March 31,2005,Morris Goldfarb and Aron Goldfarb beneficially own an aggre

152、gate ofapproximately 53.0%of our outstanding common stock.As a result,if they vote together,they effectivelyhave the ability to control the outcome on all matters requiring stockholder approval including,but notlimited to,the election of directors and any merger,consolidation or sale of all or subst

153、antially all of ourassets.They also have the ability to control our management and affairs.Section 404 of Sarbanes-Oxley ActWe are required to comply with the internal control evaluation and certification requirements ofSection 404 of the Sarbanes-Oxley Act of 2002 by no later than the end of our 20

154、07 fiscal year.We haveonly recently begun the process of determining whether our existing internal controls over financialreporting systems are compliant with Section 404.This process may divert internal resources and will takea significant amount of time and effort to complete.If it is determined t

155、hat we are not in compliance withSection 404,we may be required to implement new internal control procedures and reevaluate ourfinancial reporting.We may experience higher than anticipated operating expenses as well as outsideauditor fees during the implementation of these changes and thereafter.Fur

156、ther,we may need to hireadditional qualified personnel in order for us to be compliant with Section 404.If we are unable toimplement these changes effectively or efficiently,it could harm our operations,financial reporting orfinancial results and could result in our being unable to obtain an unquali

157、fied report on internal controlsfrom our independent auditors.EmployeesAs of January 31,2005,we had 384 full-time employees,of whom 78 worked in executive,administrative or clerical capacities,158 worked in design,merchandising and manufacturing,110 workedin warehouse facilities,and 38 worked in sal

158、es.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 Textile Workers U

159、nion,covering approximately 75 full-time employees as of January 31,2005.This agreement,which is currentlyin effect through October 31,2005,automatically renews on an annual basis thereafter unless terminatedby us or the union prior to September 1 of that year.Website Access to ReportsOur internet w

160、ebsite 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 electronically file such material w

161、ith,or furnish it to,the Securities and Exchange Commission.12EXECUTIVE OFFICERS OF THE REGISTRANTThe following table sets forth certain information with respect to our executive officers.NameAgePositionExecutive Officeror SignificantEmployee SinceMorris Goldfarb54Co-Chairman of the Board,Chief Exec

162、utive Officer,Director1974Jeanette Nostra-Katz52President1981Wayne S.Miller47Senior Vice President,Chief Operating and Financial Officer,Treasurer and Secretary1998Deborah Gaertner50Vice President Womens SalesDivision of G-III Leather Fashions1989Keith Sutton-Jones55Vice President Foreign Manufactur

163、ingof G-III Leather Fashions1989Neal S.Nackman45Vice President Finance2003Morris Goldfarb is our Co-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 the Company

164、and our predecessors since our formation in 1974.Mr.Goldfarb is alsoa director of Lakes Entertainment,Inc.Jeanette Nostra-Katz became our President in April 1997.She had been our Executive VicePresident since March 1992.Ms.Nostra-Katzs responsibilities for the Company include sales,marketing,public

165、relations,and operations as they relate to sales.We have employed Ms.Nostra-Katz since 1981.Wayne S.Miller has been our Chief Financial Officer and Senior Vice President since April 1998.InDecember 2003,Mr.Miller was appointed Chief Operating Officer.In November 1998,Mr.Miller waselected Secretary a

166、nd Treasurer.Prior to his joining G-III,Mr.Miller held various senior level positionsin the apparel industry.Deborah Gaertner is the Vice President Womens Division of G-III Leather Fashions and has heldthis position since March 1992.Ms.Gaertner is responsible for sales and marketing of certain of ou

167、rwomens apparel lines.She previously served as Vice President,Imports from June 1989 until March 1992,coordinating production and merchandising.Keith Sutton-Jones is the Vice President Foreign Manufacturing of G-III Leather Fashions and hasbeen employed in this capacity since January 1989.His respon

168、sibilities include coordinating andcontrolling all aspects of our Far Eastern sourcing and production.Neal S.Nackman has been our Vice President Finance since December 2003.Prior to joining G-III,Mr.Nackman was a financial consultant with Jefferson Wells International from January 2003 untilDecember

169、 2003.From May 2001 until October 2002,he was Senior Vice President-Controller of MarthaStewart Living Omnimedia,Inc.From May 1999 until May 2001,he was Chief Financial Officer of PerryEllis International Inc.From August 1995 until May 1999,he was the Vice-President Finance withNautica Enterprises,I

170、nc.Aron Goldfarb,one of our directors,and Morris Goldfarb are father and son,respectively.Carl Katz,one of our directors,and Jeanette Nostra-Katz are married to each other.13ITEM 2.PROPERTIESOur executive offices,sales showrooms and support staff are located at 512 Seventh Avenue,whichis one of the

171、leading apparel buildings in New York City.We lease an aggregate of approximately 42,500square feet in this building through March 31,2011 at a current aggregate annual rent of approximately$1.2 million.We also lease approximately 4,000 square feet at a current annual rent of$88,000 in anadjoining b

172、uilding at 500 Seventh Avenue for additional design staff.Our warehouse and distribution facility,located in Secaucus,New Jersey,contains approximately110,000 square feet.In February 2005,we extended the lease on this facility through February 2011.Aspart of the new lease,we leased an additional 95,

173、000 square feet of adjacent space that will be availableto us on October 1,2005.Annual rent for the entire premises will be approximately$1.2 million startingOctober 1,2005.The additional space will be used for product distribution.We obtained the additionalspace to reduce our reliance on third part

174、y warehouses and accommodate the additional volume weanticipate being generated from our newly signed licenses.We expect the construction for the renovationsto the existing space and the new space to cost approximately$1 million.A majority of our finished goods is shipped to our New Jersey distribut

175、ion facilities for finalreshipment to customers.We also use third-party warehouses to accommodate our finished goods storageand reshipment needs.We also lease office space at 345 West 37thStreet in New York City.This space is leased from acorporation owned by Morris Goldfarb and Aron Goldfarb.Aggreg

176、ate payments under this lease in fiscal2005 were$200,000.We lease three floors in the building as well as parking spaces and a billboard.Totalleased space in this building is approximately 10,100 square feet.ITEM 3.LEGAL PROCEEDINGSNone.ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSNone.

177、14PART IIITEM 5.MARKET FOR THE REGISTRANTS COMMON EQUITY,RELATED STOCK-HOLDER MATTERS AND ISSUER REPURCHASES OF EQUITY SECURITIESMarket For Common StockOur Common Stock is quoted on the Nasdaq National Stock Market under the trading symbolGIII.The following table sets forth,for the fiscal periods sh

178、own,the high and low sales prices for ourCommon Stock,as reported by the Nasdaq Stock Market.High PricesLow PricesFiscal 2004Fiscal Quarter ended April 30,2003.$6.50$4.62Fiscal Quarter ended July 31,2003.$8.25$5.95Fiscal Quarter ended October 31,2003.$12.00$6.50Fiscal Quarter ended January 31,2004.$

179、11.90$8.42Fiscal 2005Fiscal Quarter ended April 30,2004.$10.89$7.21Fiscal Quarter ended July 31,2004.$9.45$6.85Fiscal Quarter ended October 31,2004.$7.53$5.75Fiscal Quarter ended January 31,2005.$8.29$5.69Fiscal 2006Fiscal Quarter ending April 30,2005(through April 20,2005).$8.66$7.55The last sales

180、price of our Common Stock as reported by the Nasdaq Stock Market on April 20,2005was$8.00 per share.On April 20,2005,there were 54 holders of record and,we believe,approximately 850 beneficialowners of our Common Stock.Issuance of Common StockIn November 2004,we issued 50,000 shares of our Common St

181、ock to Kenneth Cole Productions aspartial consideration for its entry into the license agreement with us to manufacture,market and distributemens and womens outerwear.See Licensing under Item 1 above.We issued these shares in reliance onthe exemption from the registration requirements of the Securit

182、ies Act of 1933,as amended,provided bySection 4(2)of this Act.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 theforeseeable future.Any

183、 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 the payment of cash dividends and stock buybacks to an aggregate of$1.7 millionwithout the consent of

184、the lenders.See Managements Discussion and Analysis of Financial Conditionand Results of Operations Liquidity and Capital Resources in Item 7 below and Note H to ourConsolidated Financial Statements.15ITEM 6.SELECTED CONSOLIDATED FINANCIAL DATAThe selected consolidated financial data set forth below

185、 as of and for the years ended January 31,2001,2002,2003,2004 and 2005 have been derived from our audited consolidated financial statements.Our audited consolidated financial statements as of January 31,2001,2002 and 2003 and for the yearsended January 31,2001 and 2002 are not included in this filin

186、g.The selected consolidated financial datashould be read in conjunction with Managements Discussion and Analysis of Financial Condition andResults of Operations(Item 7 of this Report)and the audited consolidated financial statements andrelated notes thereto included elsewhere in this Annual Report o

187、n Form 10-K.Certain amounts in theIncome Statement Data for fiscal years 2001 through 2004 have been reclassified to conform to the currentyear presentation.(In thousands,except share and per share data)Year Ended January 31,20012002200320042005Income Statement Data:Net sales.$187,398$201,855$203,30

188、1$225,061$214,278Cost of goods sold.136,099158,160153,367162,229161,534Gross profit.51,29943,69549,93462,83252,744Selling,general&administrativeexpenses.30,20136,24342,20148,03948,796Unusual or non-recurring charge.(643)3,556882Operating profit.21,7417,4524,17714,7933,066Interest and financing charg

189、es,net.2,8393,5771,9071,1791,086Income before minority interest andincome taxes.18,9023,8752,27013,6141,980Minority interest of joint venture.(312)Income before income taxes.18,5903,8752,27013,6141,980Income taxes.7,4361,5111,8885,2381,277Net income.$11,154$2,364$382$8,376$703Basic earnings per shar

190、e.$1.70$0.35$0.06$1.21$0.10Weighted average shares outstanding basic.6,561,5376,676,2706,764,3986,911,6447,182,072Diluted earnings per share.$1.57$0.32$0.05$1.14$0.09Weighted average shares outstanding diluted.7,120,9867,373,7237,346,9257,348,1017,528,241As of January 31,20012002200320042005Balance

191、Sheet Data:Working capital.$41,931$46,140$47,260$57,388$59,868Total assets.71,95267,70170,95680,69680,595Short-term debt.1,580906885852972Long-term debt,excluding currentportion.0203880510Total stockholders equity.52,14254,81355,74865,27266,93016ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIA

192、L CONDITIONAND RESULTS OF OPERATIONSStatements 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 andobjectives related thereto;and statements concerning assumptions m

193、ade 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 and otherfactors which could cause actual results to differ materia

194、lly 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 industry,including changingconsumer demand and tastes,seasonality,cust

195、omer acceptance of new products,the impact of competitiveproducts and pricing,dependence on existing management,general economic conditions,as well as otherrisks detailed in our filings with the Securities and Exchange Commission,including this Annual Report onForm 10-K.Unless the context otherwise

196、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 31,2005 is referred to as fiscal 2005.The following presentation of managements discussi

197、on and analysis of our financial condition andresults of operations should be read in conjunction with our Financial Statements,the accompanyingnotes and other financial information appearing elsewhere in this Report.OverviewG-III designs,manufactures,imports and markets an extensive range of outerw

198、ear and sportswearincluding coats,jackets,pants,skirts,handbags and other sportswear items under licensed labels,our ownproprietary labels and private retail labels.Our products are distributed through a broad mix of retailpartners at a variety of price points.We sell to approximately 3,000 retail c

199、ustomers in the United States,including most major department stores,mass merchants and specialty retail stores.Our largest customeris Wal-Mart Stores Inc.Sales to two of Wal-Marts retail chains represented approximately 15.0%of ournet sales in fiscal 2005.No other customer represented more than 8%o

200、f our net sales in fiscal 2005.We operate 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 o

201、f brands is aimed atdiversifying our 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

202、 competitive basis,particularly inlight of the impact of the recent elimination of quota for apparel products,and continue to diversify ourproduct portfolio and the markets we serve.We operate our business in two segments,licensed apparel and non-licensed apparel.The licensedapparel segment includes

203、 sales of apparel brands licensed by us from third parties.The non-licensedapparel segment includes sales of apparel under our own brands and private label brands,as well ascommission fee income received on sales that are financed by and shipped directly to our customers.The sale of licensed product

204、 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 in the past year.We believe thatconsumers prefer to buy brands they know and we have continually sought licenses that would increasethe portfolio of name b

205、rands we can offer through different tiers of retail distribution and at a variety ofprice points.As a result,the sale of licensed product accounted for 68.0%of our net sales in fiscal 2005compared to 78.4%of our net sales in fiscal 2004 and 52.9%of our net sales in fiscal 2003We continue to believe

206、 that brand owners will look to consolidate the number of licensees theyengage to develop product and they will continue to look for licensees with a successful track record ofdeveloping brands.We are continually entering into discussions with licensors regarding new opportu-nities.We believe that w

207、e have expanded our product capability offerings within outerwear fabrications.17This expansion of our product offerings has enabled us the shift over the last several years from havingleather apparel constituting a significant majority of our sales to non-leather apparel constitutingapproximately 5

208、1%of our net sales in fiscal 2005.Recent significant trends that are affecting the apparel industry include a desire on the part ofretailers to consolidate vendors supplying them and a shift in consumer shopping preferences away fromtraditional department stores to other mid-tier and specialty store

209、 venues.There has also been significantdownward pressure on average retail prices for many categories of apparel.We have responded to thesetrends by continuing to focus on selling products with recognized brand equity,by attention to design,quality and value and by improving our sourcing capabilitie

210、s.We believe that our broad distributioncapabilities help us to respond to the various shifts by consumers between distribution channels.We alsobelieve that our operational capabilities will enable us to continue to be a vendor of choice for our retailpartners.On January 1,2005,The World Trade Organ

211、ization lifted all quotas on apparel and textiles.As aresult,all textile apparel manufactured in a member nation that is exported on or after January 1,2005will no longer be subject to quota restrictions.This will allow retailers,apparel firms and others to importunlimited quantities of apparel and

212、textile items from China,India and other countries wheremanufacturing costs are low.The effects of this action could lead to lower production costs or allow us toimprove the quality of our products for a given cost.It could also increase price competition and pricingpressure in the marketplace.Litig

213、ation and political activity has been initiated by interested partiesseeking to re-impose quotas.As a result,we are unable to predict the effects of the lifting of quotarestrictions and related events on our results of operations.In September 2004,we committed to attempt to sell our 39%interest in a

214、 joint venture whichoperated a factory located in China.As a result of that decision,we recorded a non-cash charge of$882,000 that was reflected in our results of operations for the three months ended July 31,2004.InJanuary 2005,we sold our 39%interest in this joint venture for$200,000.The sale proc

215、eeds approximatethe carrying value of this investment after the charge that was taken.We expect to continue to sourceproduct through this factory.In February 2005,we extended the lease on our distribution center through February 2011.As partof the agreement,we also leased approximately 95,000 square

216、 feet of adjacent space in the existing facilitythrough the same date at a comparable cost.The additional space will be used for product distribution.We obtained the additional space to reduce our reliance on third party warehouses and accommodate theadditional volume we anticipate being generated f

217、rom newly signed licenses.We expect the constructioncost,which includes renovations to the existing space and the additional space,will be approximately$1million.We have undertaken certain initiatives to improve our operating efficiency.We believe that relocatingour foreign offices to China from Kor

218、ea will improve and quicken communication with the factories weuse and improve our sourcing capabilities.We also anticipate that,in addition to operational efficiencies,the cost to operate these offices will be reduced after we complete the closing of our Korean offices.Use of Estimates and Critical

219、 Accounting PoliciesThe 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 dur

220、ing the reporting period.Significant accounting policies employed by us,including the use of estimates,are presented in the Notesto Consolidated Financial Statements.Critical accounting policies are those that are most important to the portrayal of our financialcondition and our results of operation

221、s,and require managements 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 and income

222、 taxes.In determining these estimates,management must useamounts that are based upon its informed judgments and best estimates.On an on-going basis,we18evaluate our estimates,including those related to customer allowances and discounts,product returns,baddebts and inventories.We base our estimates o

223、n historical experience and on various other assumptionsthat we believe are reasonable under the circumstances.The results of these estimates form the basis formaking judgments about the carrying values of assets and liabilities that are not readily apparent fromother sources.Actual results may diff

224、er from these estimates under different assumptions and 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 overseas factories.On these transactions,we recognizecommission fee income

225、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 of reserves and allowances based on current andhistorical information and t

226、rends.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,we extend credit to our customers based on pre-defined creditcriteria.Acco

227、unts 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 case of bankruptcy filings or substantial downgrading of credit sources),a sp

228、ecific 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 through analysis of the aging of accounts receivable at the date of the financ

229、ialstatements,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 to customers.Costs associated with allowable deductions for customer advert

230、ising 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 recoveries,are included as a reduction of net sales.All of these are part of

231、 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 as well as historical deduction trends,net of historical recoveries and the

232、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,ongoing product as wellas fashion product from prior seasons.The market val

233、ue 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 of the process of preparing our consolidated financial statements,we are req

234、uired 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 differingtreatment of items for tax and accounting purposes.These differences result in defe

235、rred tax assets andliabilities,which are included within our consolidated balance sheet.19Results of OperationsThe following table sets forth selected operating data as a percentage of our net sales for the fiscalyears indicated below:200320042005Net sales100.0%100.0%100.0%Cost of goods sold75.472.1

236、75.4Gross profit24.627.924.6Selling,general and administrative expenses20.821.322.8Non-recurring charge1.80.4Operating profit2.06.61.4Interest and financing charges,net0.90.50.5Income before income taxes1.16.10.9Income taxes0.92.40.6Net income0.2%3.7%0.3%Results of OperationsYear ended January 31,20

237、05(fiscal 2005)compared to year ended January 31,2004(fiscal 2004)Net sales for fiscal 2005 were$214.3 million compared to$225.1 million for fiscal 2004.Net sales oflicensed apparel decreased$30.8 million to$145.7 million from$176.5 million in fiscal 2004,primarily asa result of decreased sales of o

238、ur fashion sports apparel($27.2 million),as well as a change in purchasesthis year by our largest customer from licensed products to our own proprietary brands(a decrease of$18.4 million).These decreases were partially offset by increased sales of other licensed apparel,primarilyCole Haan and Sean J

239、ohn(aggregate increase of$11.1 million).Net sales of non-licensed apparelincreased$20.0 million to$68.6 million from$48.6 million in fiscal 2004.This increase was primarily theresult of our largest customer buying outerwear under our own womens and mens labels rather thanunder licensed labels as was

240、 done last year(an increase of$16.2 million),as well as increased sales of ourBlack Rivet brand(an increase of$4.6 million),which was launched in fiscal 2004.Gross profit was$52.7 million,or 24.6%of net sales,for fiscal 2005 compared to$62.8 million,or27.9%of net sales,in fiscal 2004.Gross profit of

241、 licensed apparel was$36.5 million(25.1%of net sales)compared to$49.6 million(28.1%of net sales)in fiscal 2004.The decrease in gross profit,both in amountand percentage,in the licensed apparel segment for fiscal 2005 was primarily the result of the decline insales in our higher margin fashion sports

242、 apparel business.The gross profit percentage in the prior yearwas favorably impacted by a$1.2 million decrease in our receivable reserves in the second quarter of fiscal2004 which predominantly impacted our licensed apparel segment.These reserves were established in thefourth quarter of fiscal 2003

243、,but were no longer deemed necessary as actual discounts and allowanceswere less than anticipated.Gross profit from non-licensed apparel was$16.3 million(23.7%of net sales)for fiscal 2005 comparedto$13.2 million(27.3%of net sales)in fiscal 2004.The decrease in gross profit percentage in ournon-licen

244、sed apparel segment resulted primarily from lower commission based sales.Commission feeincome,which is primarily generated in the non-licensed apparel segment,decreased to$2.2 millionduring fiscal 2005 from$4.3 million in fiscal 2004.There is no cost of goods sold component associatedwith these comm

245、ission transactions.Selling,general and administrative expenses for fiscal 2005 were$48.8 million compared to$48.0million in fiscal 2004.This increase resulted primarily from increases in advertising and promotion($1.4million),design and product development($710,000)and personnel costs($320,000),whi

246、ch include healthinsurance benefits offset by a decrease in sales commission expense($1.7 million).Advertising andpromotion expenses increased due to increases in our co-operative advertising,national advertisingcommitments and purchased advertising.Design and product development expenses increased

247、primarilydue to more extensive sample development in our sports and Black Rivet lines and due to the newly20launched Cece Cord division.The increase in personnel costs was attributable to additional personnelhired last year as well as increases in the cost of our health benefits partially offset by

248、decreased bonusexpense compared to last year.The decrease in sales commissions resulted from lower sales of fashionsports apparel which are made primarily by an outside sales force.In fiscal 2005,we recorded a non-cash charge to operations in the amount of$882,000 associated withthe sale of our join

249、t venture interest in a factory located in China.We have taken no tax benefit for thischarge.Interest expense and financing charges were$1.1 million in fiscal 2005 compared to$1.2 million infiscal 2004.We had lower borrowings in fiscal 2005 that were offset by higher interest rates.We had an income

250、tax expense of$1.3 million for fiscal 2005 compared to an income tax expense of$5.2 million in fiscal 2004.Our effective tax rate was 64.5%in fiscal 2005 compared to 38.5%in fiscal 2004.The higher effective tax rate in fiscal 2005 reflects the charge of$882,000 for which we did not record atax benef

251、it.Year ended January 31,2004(fiscal 2004)compared to year ended January 31,2003(fiscal 2003)Net sales were$225.1 million in fiscal 2004 compared to$203.3 million in fiscal 2003.Net sales oflicensed apparel increased to$176.5 million in fiscal 2004 from$107.5 million in fiscal 2003.Sales oflicensed

252、apparel constituted 78.4%of our net sales in fiscal 2004 compared to 52.9%of our net sales infiscal 2003.The increase in sales of licensed apparel was primarily attributable to increased sales of ourcore and fashion sports apparel($41.2 million)and a shift in fiscal 2004 in sales to our largest cust

253、omerfrom primarily proprietary branded product to primarily licensed product($20.1 million).Net sales ofnon-licensed apparel decreased to$48.6 million in fiscal 2004 from$95.8 million in fiscal 2003.Thedecrease in net sales of non-licensed apparel was primarily due to a decrease in sales of womens a

254、ndmens leather apparel,primarily as a result of the shift in sales to our largest customer from proprietarybranded product to licensed product along with lower sales to this customer.Gross profit increased to$62.8 million in fiscal 2004 from$49.9 million in fiscal 2003.Commission feeincome,for which

255、 there is no related cost of goods sold,was$4.3 million in fiscal 2004 compared to$3.3million in fiscal 2003.The increase in commission fee income over the prior year was in the non-licensedbusiness segment primarily within womens leather apparel.As a percentage of net sales,gross profitincreased to

256、 27.9%in fiscal 2004 compared to 24.6%in fiscal 2003.Gross profit for licensed apparel was$49.6 million in fiscal 2004,or 28.1%of net sales of licensedapparel,compared to$29.0 million in fiscal 2003,or 27.0%of net sales of licensed apparel.The increasein the gross profit margin percentage for licens

257、ed apparel was due to sales of higher margin sports apparelproduct.Gross profit for non-licensed apparel was$13.2 million in fiscal 2004,or 27.3%of net sales ofnon-licensed apparel,compared to$20.9 million in fiscal 2003,or 21.9%of net sales of non-licensedapparel.The increase in gross profit percen

258、tage for non-licensed apparel was primarily a result of lossesduring the prior fiscal year at the Indonesian facility prior to its closedown in December 2002(approximately$1.3 million),and the portion($554,000)of the aggregate charges relating to theclosedown of the Indonesian subsidiary that was in

259、cluded in cost of goods sold in fiscal 2003.The increasein gross profit percentage for non-licensed apparel also resulted from the increase in commission feeincome in fiscal 2004 while net sales of non-licensed apparel decreased.Selling,general and administrative expenses increased to$48.0 million,o

260、r 21.4%of net sales,in fiscal2004 from$42.2 million,or 20.8%of net sales,in fiscal 2003.Of this increase,approximately$3.6 millionrepresented increased personnel expenses relating to expansion of our Classics Sports,Cole Haan andSean John divisions,and increased bonus payments to our officers and em

261、ployees.In addition,we hadincreased selling expenses of approximately$2.3 million primarily as a result of commissions paid toindependent sales representatives in connection with sales of our Classics Sports apparel and Sean Johnproducts,and increased third party shipping costs of approximately$1.3

262、million as a result of an increasein the number of units required to be shipped,primarily because of increased sales of sports apparelproduct.These increases were offset,in part,by a reduction in advertising expenses of$938,000 and in baddebts of$504,000.21Interest and financing charges,net were$1.2

263、 million in fiscal 2004 compared to$1.9 million in fiscal2003.This decrease resulted primarily from lower borrowings due to lower inventory levels,as well as dueto lower interest rates.As a result of the foregoing,we had income before income taxes of$13.6 million in fiscal 2004compared to income bef

264、ore income taxes of$2.3 million in fiscal 2003.Income taxes were$5.2 million in fiscal 2004 compared to$1.9 million in fiscal 2003.Our effective taxrate for fiscal 2004 was 38.5%compared to 83.2%in fiscal 2003.The tax rate in fiscal 2004 reflects thefavorable conclusion of Federal and New York State

265、 tax audits through the year ended January 31,2001.The tax rate in fiscal 2003 was significantly higher because we did not take a financial statement tax benefitfor some of the charges and expenses relating to the closedown of our Indonesian facility.Liquidity and Capital ResourcesOur primary cash r

266、equirements are to fund our seasonal build up in inventories and accountsreceivable,primarily during the second and third fiscal quarters each year.Due to the seasonality or ourbusiness,we generally reach our maximum borrowing under our asset-based credit facility during ourthird fiscal quarter.The

267、primary source to meet our cash requirements are borrowings under this creditfacility and cash generated from operations.Ordinarily,our capital expenditures are not significant.Wehave recently entered into a lease that will increase our warehouse space effective October 1,2005.Weexpect that we will

268、spend an aggregate of approximately$1.0 million during fiscal 2006 and 2007 toconstruct the new warehouse space and renovate our existing warehouse space.Our loan agreement,which was recently extended to May 31,2008,is a collateralized working capitalline of credit with six banks that provides for a

269、 maximum line of credit in amounts that range from$35million to$110 million at specific times during the year.The line of credit provides for maximum directborrowings ranging from$25 million to$75 million during the year.The unused balance may be used forletters of credit.Amounts available for borro

270、wing are subject to borrowing base formulas and overadvances as specified in the agreement.Direct borrowings under the line of credit bear interest at our option at either the prevailing primerate(5.75%as of April 1,2005)or LIBOR plus 225 basis points(5.37%at April 1,2005).Our assetscollateralize al

271、l borrowings.The loan agreement requires us,among other covenants,to maintainspecified earnings and tangible net worth levels,and limits payments for cash dividends and stockbuybacks to an aggregate of$1.7 million without the consent of our lenders.The amount borrowed under the line of credit varies

272、 based on our seasonal requirements.Themaximum amount outstanding including open letters of credit,under our loan agreement was approxi-mately$80.1 million during fiscal 2003,$74.7 million in fiscal 2004 and$64.9 million in fiscal 2005.As ofJanuary 31,2004 and 2005,there were no direct borrowings an

273、d no bankers acceptances outstanding.Ourcontingent liability under open letters of credit was approximately$1.8 million at January 31,2005compared to approximately$2.8 million as of January 31,2004.At January 31,2005,we had cash and cash equivalents of$16.6 million.We generally use significantcash i

274、n the first nine months of our fiscal year as we build inventory and then generate receivables duringthe July to November period,which normally has our highest sales volumes of the year.During both fiscal2004 and 2005,we fully repaid our borrowings under our credit agreement in late December.PT Bali

275、hides,our Indonesian subsidiary,had a separate credit facility with an Indonesian bank.InDecember 2002,we closed the manufacturing facility operated by this subsidiary.The notes payable underthis facility represent borrowings as of January 31,2005 of approximately$770,000.The loan iscollateralized b

276、y the property,plant,and equipment of this subsidiary.No other G-III entity hasguaranteed this loan.We continue to be in discussions with the bank regarding settlement of this debt.We generated$390,000 of cash from operating activities in fiscal 2005,resulting primarily from adecrease in inventory o

277、f$4.3 million and non cash charges for depreciation and amortization expense of$1.3 million and the write-down of$882,000 in our joint venture interest,offset in part by an increase inaccounts receivable of$5.5 million.The decrease in inventory in fiscal 2005 resulted primarily from22reduced fashion

278、 sports apparel inventory.Accounts receivable increased primarily due to increased salesin the fourth quarter of fiscal 2005 as compared to fiscal 2004.In fiscal 2004,we had$12.9 million of cash provided from our operating activities resulting primarilyfrom net income of$8.4 million,a decrease of$2.

279、6 million in inventories,and$1.3 million in non-cashdepreciation and amortization expense.The decrease in inventory was attributable to reduced inventoryof leather skins associated with lower production of leather apparel.In fiscal 2003,we had$1.9 million of cash provided from our operating activiti

280、es resulting primarilyfrom a decrease of$6.2 million in inventories,an increase of$1.9 million of accounts payable and accruedexpenses and$1.5 million in non-cash depreciation and amortization expense,offset by an increase of$9.2million in accounts receivable.The decrease in inventory was attributab

281、le to lower levels of leather skinsinventory resulting from the shutdown of our Indonesian facility.The increase in accounts receivable wasattributable to higher sales in the fourth quarter.We used$865,000 of cash in investing activities in fiscal 2005.Capital expenditures,which wereprimarily for le

282、asehold improvements for office and showroom space and computer equipment,amountedto$1.1 million partially offset by the proceeds of$200,000 from the sale of our joint venture interest.Infiscal 2004,we used$693,000 of cash in investing activities to pay for capital expenditures.In fiscal 2003,we use

283、d$1.2 million of cash in investing activities to pay an earn-out of$720,000 in connection with theacquisition of certain assets of Gloria Gay,and$443,000 of capital expenditures.Cash flows generated by financing activities in fiscal 2005 were primarily from financing obtainedunder a capital lease ar

284、rangement($600,000)and the exercise of stock options($523,000).We had$493,000 of cash provided by financing activities in fiscal 2004 primarily due to$609,000 received inconnection with the exercise of stock options,partially offset by$116,000 in payments of capital leaseobligations.We had$249,000 o

285、f cash provided by financing activities in fiscal 2003 primarily due to$385,000 received in connection with the exercise of stock options,partially offset by$106,000 in paymentsof capital lease obligations.We believe that our cash on hand and cash generated from operations,together with funds availa

286、blefrom our line of credit,are sufficient to meet our operating and capital expenditure requirements.We mayseek to acquire other businesses in order to expand our product offerings.We may need additionalfinancing in order to complete one or more acquisitions.We cannot be certain that we will be able

287、 toobtain additional financing,if required,on acceptable terms or at all.New Accounting PronouncementsIn December 2004,the Financial Accounting Standards Board(FASB)issued SFAS No.123(Revised 2004),Share-based Payment that will require us to expense costs related to share-basedpayment transactions w

288、ith employees.With limited exceptions,SFAS No.123(R)requires that the fairvalue of share-based payments to employees be expensed over the period service is received.SFAS No.123(R)becomes effective for us on February 1,2006.We believe the pro forma disclosures in Note A to the financial statements un

289、der the caption StockBased Compensation provide an appropriate short term indicator of the level of expense that will berecognized in accordance with SFAS No.123(R).In November 2004,the FASB issued SFAS No.151,Inventory Costs,an amendment of ARB No.43,Chapter 4.SFAS No.151 requires certain abnormal

290、expenditures to be recognized as expenses in thecurrent period.It also requires that the amount of fixed production overhead allocated to inventory bebased on the normal capacity of the production facility.The standard is effective for fiscal years beginningon or after January 1,2006.We do not expec

291、t SFAS No.151 to have a material effect on our results ofoperations or financial position.Off Balance Sheet ArrangementsWe do not have any off-balance sheet arrangements as such term is defined in Item 303 ofRegulation S-K of the SEC rules.23Tabular Disclosure of Contractual ObligationsAs of January

292、 31,2005,our contractual obligations were as follows(in thousands):Payments Due By PeriodContractual ObligationsTotalLess than1 Year1-3Years3-5YearsMore than5 YearsLong-Term Debt Obligations(1).$770$770Capital Lease Obligations.784236$436$112Operating Lease Obligations.17,5032,6205,7685,584$3,531Min

293、imum royalty payments(2).36,31912,55820,1493,612Purchase obligations(3).1,8241,824Total.$57,200$18,008$26,353$9,308$3,531(1)Includes notes payable by PT Balihides(an Indonesian subsidiary)under a previously existing lineof credit.No other G-III entity has guaranteed this loan.(2)Includes obligations

294、 to pay minimum scheduled royalty,advertising and other required paymentsunder various license agreements.(3)Includes outstanding trade letters of credit,which represent inventory purchase commitments whichtypically mature in less than six months.ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOU

295、T MARKET RISKImpact of Inflation and Foreign ExchangeOur results of operations for the periods discussed have not been significantly affected by inflationor foreign currency fluctuation.We negotiate our purchase orders with foreign manufacturers in UnitedStates dollars.Thus,notwithstanding any fluct

296、uation in foreign currencies,our cost for any purchase orderis not subject to change after the time the order is placed.However,if the value of the United States dollaragainst local currencies were to decrease,manufacturers might increase their United States dollar pricesfor products.We believe that

297、 inflation has not had a material effect on our costs and net revenues during the pastthree years.Interest Rate ExposureWe are subject to market risk from exposure to changes in interest rates relating primarily to our lineof credit.We borrow under the line of credit to support general corporate pur

298、poses,including capitalexpenditures and working capital needs.All of our debt is short-term with variable rates.We do notexpect changes in interest rates to have a material adverse effect on income or cash flows in fiscal 2006.Based on our average borrowings during fiscal 2005,we estimate that each

299、100 basis point increase in ourborrowing rates would result in additional interest expense of approximately$140,000.ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAFinancial statements and supplementary data required pursuant to this Item begin on page F-1of this Report.ITEM 9.CHANGES IN AND DISAG

300、REEMENTS WITH ACCOUNTANTS ON ACCOUNTINGAND FINANCIAL DISCLOSURENone.24ITEM 9A.CONTROLS AND PROCEDURES.As of the end of the period covered by this report,our management,including the Chief ExecutiveOfficer and Chief Financial Officer,carried out an evaluation of the effectiveness of the design andope

301、ration of our disclosure controls and procedures.Based on that evaluation,our Chief ExecutiveOfficer and Chief Financial Officer concluded that our disclosure controls and procedures are effective inalerting them to material information,on a timely basis,required to be included in our periodic SECfi

302、lings.During our last fiscal quarter,there were no changes in our internal control over financial reportingthat have materially affected,or are reasonably likely to materially affect,our internal control overfinancial reporting.ITEM 9B.OTHER INFORMATION.On April 22,2005,we entered into Amendment No.

303、5 to our Sixth Amended and Restated LoanAgreement with Fleet National Bank,a Bank of America Company,JPMorgan Chase Bank,N.A.,TheCIT Group/Commercial Services,Inc.,Israel Discount Bank of New York,HSBC Bank USA NationalAssociation and Bank Leumi USA.This amendment extended the term of our existing l

304、oan agreementfor three years to May 31,2008 and increased the maximum amount available under the loan agreementto$110 million.For a description of the key terms of the loan agreement,as amended by this amendment,see Liquidity and Capital Resources in Item 7 of this Annual Report on Form 10-K.A copy

305、of this amendment is attached as Exhibit 10.3(e)to this Annual Report on Form 10-K.25PART IIIITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTWe have adopted a code of ethics and business conduct,or Code of Ethics,which applies to ourprincipal executive officer,principal financial officer,p

306、rincipal accounting officer or controller and personsperforming similar functions.Our Code of Ethics is located on our Internet website at www.g-under the heading About G-III.Any amendments to,or waivers from,a provision of our Code ofEthics that apply to our principal executive officer,principal fi

307、nancial officer,principal accounting officeror controller and persons performing similar functions will be disclosed on our internet website within fivebusiness days following such amendment or waiver.The information contained on or connected to ourInternet website is not incorporated by reference i

308、nto this Form 10-K and should not be considered partof this or any other report we file with or furnish to the Securities and Exchange Commission.The information contained under the heading Proposal No.1 Election of Directors in ourdefinitive Proxy Statement(the Proxy Statement)relating to our Annua

309、l Meeting of Stockholders tobe held on or about June 9,2005,to be filed pursuant to Regulation 14A of the Securities Exchange Actof 1934 with the Securities and Exchange Commission is incorporated herein by reference.Forinformation concerning our executive officers and other significant employees,se

310、e Business-ExecutiveOfficers of the Registrant in Item 1 above in this Report.ITEM 11.EXECUTIVE COMPENSATIONThe information contained under the heading Executive Compensation in our Proxy Statement isincorporated herein by reference.26ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ANDMANAGE

311、MENT AND RELATED STOCKHOLDER MATTERSSecurity ownership information of certain beneficial owners and management as called for by thisItem 12 is incorporated by reference to the information set forth under the heading BeneficialOwnership of Certain Stockholders and Management in the 2005 Proxy Stateme

312、nt.Equity Compensation Plan InformationThe following table provides information as of January 31,2005,the last day of fiscal 2005,regardingsecurities issued under the Companys equity compensation plans that were in effect during fiscal 2005.Plan CategoryNumber of securities tobe issued upon exercise

313、of outstanding options,warrants and rightsWeighted averageexercise price ofoutstandingoptions,warrantsand rightsNumber of securities remainingavailable for future issuanceunder equity compensationplans(excluding securitiesreflected in column(a)Equity compensation plans approvedby stockholders981,949

314、$4.87384,800Equity compensation plans notapproved by stockholdersN/AN/AN/ATotal981,949$4.87384,800ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSThe information contained under the heading Certain Relationships and Related Transactions inour Proxy Statement is incorporated herein by reference

315、.ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES.The information contained under the heading Principal Accountant Fees and Services in our ProxyStatement is incorporated herein by reference.27PART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES(a)1.Financial Statements.2.Financial Statement Sche

316、dules.The Financial Statements and Financial Statement Schedules are listed in theaccompanying index to consolidated financial statements beginning on page F-1 of thisreport.All other schedules,for which provision is made in the applicable accountingregulations of the Securities and Exchange Commiss

317、ion are not required under therelated instructions,are shown in the financial statements or are not applicable andtherefore have been omitted.3.Exhibits:3.1Certificate of Incorporation.13.2By-Laws,as amended,of G-III Apparel Group,Ltd.(the Company).610.1Employment Agreement,dated February 1,1994,bet

318、ween the Company and MorrisGoldfarb.410.1(a)Amendment,dated October 1,1999,to the Employment Agreement,dated February 1,1994,between the Company and Morris Goldfarb.810.3Sixth Amended and Restated Loan Agreement,dated April 29,2002,by and amongG-III Leather Fashions,Inc.(G-III),the banks signatories

319、 thereto(the Banks),andFleet Bank,N.A.(Fleet Bank),as Agent.1010.3(a)Amendment No.1 and Waiver to Sixth Amended and Restated Loan Agreement,datedMarch 18,2003,by and among G-III,the Banks and Fleet Bank.1110.3(b)Amendment No.2 and Waiver to Sixth Amended and Restated Loan Agreement,datedDecember 1,2

320、003,by and among G-III,the Banks and Fleet Bank.1310.3(c)Amendment No.3 and Waiver to Sixth Amended and Restated Loan Agreement,datedMarch 12,2004,by and among G-III,the Banks and Fleet Bank.1310.3(d)Amendment No.4 to Sixth Amended and Restated Loan Agreement,dated July 31,2004.by and among G-III,th

321、e Banks and Fleet Bank.1410.3(e)Amendment No.5 to Sixth Amended and Restated Loan Agreement,dated April 22,2005.by and among G-III,the Banks and Fleet Bank.10.6Lease,dated September 21,1993,between Hartz Mountain Associates and theCompany.310.6(a)Lease renewal,dated May 27,1999,between Hartz Mountai

322、n Associates and theCompany.910.6(b)Lease modification agreement,dated March 10,2004,between Hartz MountainAssociates and the Company.10.6(c)Lease modification agreement,dated February 23,2005,between Hartz MountainAssociates and the Company.1310.7Lease,dated June 1,1993,between 512 Seventh Avenue A

323、ssociates(512)and theCompany.410.7(a)Lease amendment,dated July 1,2000,between 512 and the Company.92810.8Lease,dated January 31,1994,between 512 and the Company.510.8(a)Lease amendment,dated July 1,2000,between 512 and the Company.910.10G-III Apparel Group,Ltd.1989 Stock Option Plan,as amended.410.

324、11G-III Apparel Group,Ltd.Stock Option Plan for Non-Employee Directors.210.12G-III Apparel Group,Ltd.1997 Stock Option Plan,as amended.1310.12(a)Form of Option Agreement for awards made pursuant to the G-III Apparel Group,Ltd.1997 Stock Option Plan,as amended.10.13Letter Agreement,dated December 2,1

325、998,between the Company and Aron Goldfarb.710.14G-III Apparel Group,Ltd.1999 Stock Option Plan for Non-Employee Directors,asamended.1310.15Lease Agreement dated February 1,2003 between 345 W.37th Corp.and G-III LeatherFashions,Inc.1210.16Management Services Agreement dated February 1,2003 between 34

326、5 W.37th Corp.and G-III Leather Fashions,Inc.1210.17First Amendment of Lease Agreement dated April 1,2004 between 345 W.37thCorp.and G-III Leather Fashions,Inc.1310.18License Agreement dated November 29,2004 between Kenneth Cole Productions(LIC),Inc.and G-III Apparel Group,Ltd.1421Subsidiaries of th

327、e Company.23.1Consent of Ernst&Young LLP,dated April 22,2005.31.1Certification by Morris Goldfarb,Chief Executive Officer of G-III Apparel Group,Ltd.,pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,in connection with G-IIIApparel Group,Ltd.s Annual Report on Form 10-K for the fiscal year e

328、nded January31,2005.31.2Certification by Wayne S.Miller,Chief Financial Officer of G-III Apparel Group,Ltd.,pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,in connection with G-IIIApparel Group,Ltd.s Annual Report on Form 10-K for the fiscal year ended January31,2005.32.1Certification by M

329、orris Goldfarb,Chief Executive Officer of G-III Apparel Group,Ltd.,pursuant to 18 U.S.C.Section 1350,as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002,in connection with G-III Apparel Group,Ltd.s AnnualReport on Form 10-K for the fiscal year ended January 31,2005.32.2Certification

330、by Wayne S.Miller,Chief Financial Officer of G-III Apparel Group,Ltd.,pursuant to 18 U.S.C.Section 1350,as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002,in connection with G-III Apparel Group,Ltd.s AnnualReport on Form 10-K for the year ended January 31,2005.1/Previously filed as

331、an exhibit to the Companys Registration Statement on Form S-1(no.33-31906),which exhibit is incorporated herein by reference.2/Previously filed as an exhibit to the Companys Annual Report on Form 10-K for the fiscal year endedJuly 31,1991,which exhibit is incorporated herein by reference.293/Previou

332、sly filed as an exhibit to the Companys Annual Report on Form 10-K for the fiscal year endedJuly 31,1992,which exhibit is incorporated herein by reference.4/Previously filed as an exhibit to the Companys Annual Report on Form 10-K for the fiscal year endedJanuary 31,1994,which exhibit is incorporate

333、d herein by reference.5/Previously filed as an exhibit to the Companys Annual Report on Form 10-K for the fiscal year endedJanuary 31,1995,which exhibit is incorporated herein by reference.6/Previously filed as an exhibit to the Companys Quarterly Report on Form 10-Q for the fiscal quarterended April 30,1997,which exhibit is incorporated herein by reference.7/Previously filed as an exhibit to the