|
Delaware
(State or other jurisdiction of incorporation or organization)
512 Seventh Avenue, New York, New York
(Address of principal executive offices) |
| |
41-1590959
(I.R.S. Employer Identification No.)
10018
(Zip Code) |
|
|
Title of Class
|
| |
Name of Exchange on which registered
|
|
|
Common Stock, $0.01 par value
|
| |
Nasdaq Global Select Market
|
|
| Large accelerated filer ☒ | | | Accelerated filer ☐ | |
| Non-accelerated filer ☐ | | | Smaller reporting company ☐ | |
| Emerging growth company ☐ | | |
Women’s
|
| |
Men’s
|
| |
Team Sports
|
|
Licensed Brands | | | | | | | |
Calvin Klein | | | Calvin Klein | | | National Football League | |
Tommy Hilfiger | | | Tommy Hilfiger | | | Major League Baseball | |
Karl Lagerfeld Paris
|
| |
Karl Lagerfeld Paris
|
| |
National Basketball Association
|
|
Guess? | | | Guess? | | | National Hockey League | |
Kenneth Cole | | | Kenneth Cole | | | Touch by Alyssa Milano | |
Cole Haan | | | Cole Haan | | | Hands High | |
Levi’s | | | Levi’s | | | Collegiate Licensing Company | |
Vince Camuto | | | Dockers | | | Starter | |
Ivanka Trump | | | | | | | |
Kensie | | | | | | | |
Proprietary Brands | | | | | | | |
DKNY | | | DKNY | | | G-III Sports by Carl Banks | |
Donna Karan | | | Donna Karan | | | G-III for Her | |
Andrew Marc | | | Andrew Marc | | | | |
Marc New York | | | Marc New York | | | | |
Vilebrequin | | | Vilebrequin | | | | |
G.H. Bass | | | G.H. Bass | | | | |
Black Rivet | | | Black Rivet | | | | |
Wilsons | | | Wilsons | | | | |
Eliza J | | | | | | | |
Jessica Howard
|
| | |
License
|
| |
Date Current
Term Ends |
| |
Date Potential Renewal
Term Ends |
|
Fashion Licenses | | | | | | | |
Calvin Klein (Men’s outerwear)
|
| |
December 31, 2023
|
| | None | |
Calvin Klein (Women’s outerwear)
|
| |
December 31, 2023
|
| | None | |
Calvin Klein (Women’s dresses)
|
| |
December 31, 2023
|
| | None | |
Calvin Klein (Women’s suits)
|
| |
December 31, 2023
|
| | None | |
Calvin Klein (Women’s performance wear)
|
| |
December 31, 2023
|
| | None | |
Calvin Klein (Women’s better sportswear)
|
| |
December 31, 2023
|
| | None | |
Calvin Klein (Better luggage)
|
| |
December 31, 2023
|
| | None | |
Calvin Klein (Women’s handbags and small leather goods)
|
| |
December 31, 2023
|
| | None | |
Calvin Klein (Women’s performance retail)
|
| |
December 31, 2023
|
| | None | |
Calvin Klein (Men’s and women’s swimwear)
|
| |
December 31, 2023
|
| | None | |
Cole Haan (Men’s and women’s outerwear)
|
| |
December 31, 2020
|
| |
December 31, 2025
|
|
Dockers (Men’s outerwear)
|
| |
November 30, 2021
|
| | None | |
Guess/Guess? (Men’s and women’s outerwear)
|
| |
December 31, 2018*
|
| |
December 31, 2023
|
|
Guess/Guess? (Women’s dresses)
|
| |
December 31, 2018*
|
| |
December 31, 2023
|
|
Ivanka Trump (Women’s sportswear, suits, dresses, activewear, jeanswear, sweaters and blouses)
|
| |
December 31, 2018*
|
| | None | |
Karl Lagerfeld (Women’s apparel, women’s handbags, men’s and women’s outerwear, women’s shoes)
|
| |
December 31, 2020
|
| |
December 31, 2030
|
|
Kenneth Cole NY/Reaction Kenneth Cole (Men’s and women’s outerwear)
|
| |
December 31, 2019
|
| |
December 31, 2022
|
|
Kensie (Women’s sportswear, dresses, suits, activewear and sweaters)
|
| | January 31, 2021 | | | None | |
Levi’s (Men’s and women’s outerwear)
|
| |
November 30, 2021
|
| | None | |
Tommy Hilfiger (Men’s and women’s outerwear)
|
| |
December 31, 2021
|
| |
December 31, 2025
|
|
Tommy Hilfiger (Luggage)
|
| |
December 31, 2017*
|
| | None | |
Tommy Hilfiger (Women’s sportswear, dresses, suit separates, performance wear and denim)
|
| |
December 31, 2021
|
| |
December 31, 2025
|
|
Vince Camuto (Women’s dresses)
|
| |
December 31, 2020
|
| | None | |
Team Sports Licenses | | | | | | | |
Collegiate Licensing Company
|
| |
December 31, 2018
|
| | None | |
Major League Baseball
|
| | October 31, 2017* | | | None | |
National Basketball Association
|
| |
September 30, 2020
|
| | None | |
License
|
| |
Date Current
Term Ends |
| |
Date Potential Renewal
Term Ends |
|
National Football League
|
| | March 31, 2020 | | | None | |
National Hockey League
|
| | June 30, 2017* | | | None | |
Hands High
|
| |
December 31, 2018
|
| |
December 31, 2026
|
|
Starter
|
| |
December 31, 2019
|
| | None | |
Name
|
| |
Age
|
| |
Position
|
|
Morris Goldfarb
|
| | 67 | | | Chairman of the Board, Chief Executive Officer and Director | |
Sammy Aaron
|
| | 58 | | | Vice Chairman, President and Director | |
Wayne S. Miller
|
| | 60 | | | Chief Operating Officer and Secretary | |
Neal S. Nackman
|
| | 58 | | | Chief Financial Officer and Treasurer | |
Jeffrey Goldfarb
|
| | 41 | | | Executive Vice President and Director | |
Fiscal Year Ending January 31,
|
| |
Number of
Stores |
| |||
2019
|
| | | | 111 | | |
2020
|
| | | | 46 | | |
2021
|
| | | | 51 | | |
2022
|
| | | | 39 | | |
2023 and thereafter
|
| | | | 211 | | |
Total
|
| | | | 458 | | |
|
| | |
High Prices
|
| |
Low Prices
|
| ||||||
Fiscal 2017 | | | | | | | | | | | | | |
Fiscal Quarter ended April 30, 2016
|
| | | $ | 55.89 | | | | | $ | 41.14 | | |
Fiscal Quarter ended July 31, 2016
|
| | | $ | 51.81 | | | | | $ | 36.14 | | |
Fiscal Quarter ended October 31, 2016
|
| | | $ | 44.85 | | | | | $ | 25.73 | | |
Fiscal Quarter ended January 31, 2017
|
| | | $ | 32.98 | | | | | $ | 24.41 | | |
Fiscal 2018 | | | | | | | | | | | | | |
Fiscal Quarter ended April 30, 2017
|
| | | $ | 27.48 | | | | | $ | 19.11 | | |
Fiscal Quarter ended July 31, 2017
|
| | | $ | 26.66 | | | | | $ | 18.00 | | |
Fiscal Quarter ended October 31, 2017
|
| | | $ | 31.19 | | | | | $ | 22.66 | | |
Fiscal Quarter ended January 31, 2018
|
| | | $ | 40.96 | | | | | $ | 23.19 | | |
Fiscal 2019 | | | | | | | | | | | | | |
Fiscal Quarter ending April 30, 2018 (through March 28, 2018)
|
| | | $ | 38.94 | | | | | $ | 23.06 | | |
| | |
Consolidated Income Statement Data
Year Ended January 31, |
| |||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||||||||
| | |
(in thousands, except per share data)
|
| |||||||||||||||||||||||||||
Net sales
|
| | | $ | 2,806,938 | | | | | $ | 2,386,435 | | | | | $ | 2,344,142 | | | | | $ | 2,116,855 | | | | | $ | 1,718,231 | | |
Cost of goods sold
|
| | | | 1,752,033 | | | | | | 1,545,574 | | | | | | 1,505,504 | | | | | | 1,359,596 | | | | | | 1,133,222 | | |
Gross profit
|
| | | | 1,054,905 | | | | | | 840,861 | | | | | | 838,638 | | | | | | 757,259 | | | | | | 585,009 | | |
Selling, general and administrative
expenses |
| | | | 855,247 | | | | | | 704,436 | | | | | | 628,762 | | | | | | 571,990 | | | | | | 440,506 | | |
Depreciation and amortization
|
| | | | 37,783 | | | | | | 32,481 | | | | | | 25,392 | | | | | | 20,374 | | | | | | 13,676 | | |
Asset impairment
|
| | | | 7,884 | | | | | | 10,480 | | | | | | — | | | | | | — | | | | | | — | | |
Operating profit
|
| | | | 153,991 | | | | | | 93,464 | | | | | | 184,484 | | | | | | 164,895 | | | | | | 130,827 | | |
Other income (expense)
|
| | | | (454 ) | | | | | | (27 ) | | | | | | 1,340 | | | | | | 11,488 | | | | | | — | | |
Interest and financing charges, net
|
| | | | (43,488 ) | | | | | | (15,675 ) | | | | | | (6,691 ) | | | | | | (7,942 ) | | | | | | (8,599 ) | | |
Income before income taxes
|
| | | | 110,049 | | | | | | 77,762 | | | | | | 179,133 | | | | | | 168,441 | | | | | | 122,228 | | |
Income tax expense
|
| | | | 47,925 | | | | | | 25,824 | | | | | | 64,800 | | | | | | 59,450 | | | | | | 45,826 | | |
Net income
|
| | | | 62,124 | | | | | | 51,938 | | | | | | 114,333 | | | | | | 108,991 | | | | | | 76,402 | | |
Add: Loss attributable to noncontrolling interest
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,370 | | | | | | 958 | | |
Net income attributable to G-III
|
| | | $ | 62,124 | | | | | $ | 51,938 | | | | | $ | 114,333 | | | | | $ | 110,361 | | | | | $ | 77,360 | | |
Basic earnings per share
|
| | | $ | 1.27 | | | | | $ | 1.12 | | | | | $ | 2.52 | | | | | $ | 2.55 | | | | | $ | 1.90 | | |
Weighted average shares outstanding – basic
|
| | | | 48,820 | | | | | | 46,308 | | | | | | 45,328 | | | | | | 43,298 | | | | | | 40,646 | | |
Diluted earnings per share
|
| | | $ | 1.25 | | | | | $ | 1.10 | | | | | $ | 2.46 | | | | | $ | 2.48 | | | | | $ | 1.85 | | |
Weighted average shares outstanding – diluted
|
| | | | 49,750 | | | | | | 47,394 | | | | | | 46,512 | | | | | | 44,424 | | | | | | 41,728 | | |
| | |
Consolidated Balance Sheet Data
As of January 31, |
| |||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Working capital
|
| | | $ | 612,434 | | | | | $ | 567,519 | | | | | $ | 657,636 | | | | | $ | 557,703 | | | | | $ | 344,964 | | |
Total assets
|
| | | | 1,915,177 | | | | | | 1,851,944 | | | | | | 1,184,070 | | | | | | 1,043,761 | | | | | | 830,897 | | |
Short-term debt
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 48,843 | | |
Long-term debt
|
| | | | 391,044 | | | | | | 461,756 | | | | | | — | | | | | | — | | | | | | 20,560 | | |
Total stockholders’ equity
|
| | | | 1,120,689 | | | | | | 1,021,236 | | | | | | 888,128 | | | | | | 761,258 | | | | | | 521,996 | | |
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
Net sales
|
| | | | 100.0 % | | | | | | 100.0 % | | | | | | 100.0 % | | |
Cost of goods sold
|
| | | | 62.4 | | | | | | 64.8 | | | | | | 64.2 | | |
Gross profit
|
| | | | 37.6 | | | | | | 35.2 | | | | | | 35.8 | | |
Selling, general and administrative expenses
|
| | | | 30.5 | | | | | | 29.5 | | | | | | 26.8 | | |
Depreciation and amortization
|
| | | | 1.3 | | | | | | 1.4 | | | | | | 1.1 | | |
Asset impairments
|
| | | | 0.3 | | | | | | 0.4 | | | | | | — | | |
Operating profit
|
| | | | 5.5 | | | | | | 3.9 | | | | | | 7.9 | | |
Interest and financing charges, net
|
| | | | (1.6 ) | | | | | | (0.6 ) | | | | | | (0.3 ) | | |
Income before income taxes
|
| | | | 3.9 | | | | | | 3.3 | | | | | | 7.6 | | |
Income tax expense
|
| | | | 1.7 | | | | | | 1.1 | | | | | | 2.8 | | |
Net income
|
| | | | 2.2 % | | | | | | 2.2 % | | | | | | 4.8 % | | |
|
| | |
Payments Due By Period
|
| |||||||||||||||||||||||||||
Contractual Obligations
|
| |
Total
|
| |
Less than
1 Year |
| |
1-3 Years
|
| |
3-5 Years
|
| |
More than
5 Years |
| |||||||||||||||
Operating lease obligations
|
| | | $ | 483.4 | | | | | $ | 94.2 | | | | | $ | 162.1 | | | | | $ | 121.9 | | | | | $ | 105.2 | | |
Minimum royalty payments
(1)
|
| | | | 563.0 | | | | | | 148.3 | | | | | | 188.7 | | | | | | 153.5 | | | | | | 72.5 | | |
Long-term debt obligations
(2)
|
| | | | 437.0 | | | | | | — | | | | | | — | | | | | | 437.0 | | | | | | — | | |
Purchase obligations
(3)
|
| | | | 6.4 | | | | | | 6.4 | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 1,489.8 | | | | | $ | 248.9 | | | | | $ | 350.8 | | | | | $ | 712.4 | | | | | $ | 177.7 | | |
|
Plan Category
|
| |
Number of Securities to
be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) |
| |
Weighted Average
Exercise Price of Outstanding Options, Warrants and Rights (b) |
| |
Number of Securities
Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) |
| |||||||||
Equity compensation plans approved by
security holders |
| | | | 1,835,243 (1) | | | | | $ | 11.50 (2) | | | | | | 1,252,317 | | |
Equity compensation plans not approved
by security holders |
| | | | N/A | | | | | | N/A | | | | | | N/A | | |
Total
|
| | | | 1,835,243 (1) | | | | | $ | 11.50 (2) | | | | | | 1,252,317 (3) | | |
|
| | | | | |
Incorporated by Reference
|
| ||||||
Exhibit No.
|
| |
Document
|
| |
Form
|
| |
File No.
|
| |
Date Filed
|
|
2.1 | | | Stock Purchase Agreement, dated as of July 22, 2016, by and between G-III Apparel Group, Ltd. (“G-III”) and LVMH Moet Hennessy Louis Vuitton Inc. (“LVMH”) (including the exhibits thereto). | | | | | | | | |||
2.1(a) | | | Amendment No. 1 to Stock Purchase Agreement, dated November 30, 2016, by and between G-III and LVMH. | | | | | | | | |||
3.1 | | | Certificate of Incorporation. | | |
8-K
|
| |
000-18183
|
| |
7/2/2008
|
|
3.1(a) | | | Certificate of Amendment of Certificate of Incorporation, dated June 8, 2006. | | | | | | | |
| | | | G-III APPAREL GROUP, LTD. | | |||
| | | | By: | | |
/s/ Morris Goldfarb
Morris Goldfarb,
Chief Executive Officer |
|
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Morris Goldfarb
Morris Goldfarb
|
| |
Director, Chairman of the Board and Chief Executive Officer (principal executive officer)
|
| |
April 2, 2018
|
|
|
/s/ Neal S. Nackman
Neal S. Nackman
|
| |
Chief Financial Officer (principal financial and accounting officer)
|
| |
April 2, 2018
|
|
|
/s/ Sammy Aaron
Sammy Aaron
|
| |
Director, Vice Chairman and President
|
| |
April 2, 2018
|
|
|
/s/ Thomas J. Brosig
Thomas J. Brosig
|
| |
Director
|
| |
April 2, 2018
|
|
|
/s/ Alan Feller
Alan Feller
|
| |
Director
|
| |
April 2, 2018
|
|
|
/s/ Jeffrey Goldfarb
Jeffrey Goldfarb
|
| |
Director
|
| |
April 2, 2018
|
|
|
/s/ Jeanette Nostra
Jeanette Nostra
|
| |
Director
|
| |
April 2, 2018
|
|
|
/s/ Laura Pomerantz
Laura Pomerantz
|
| |
Director
|
| |
April 2, 2018
|
|
|
/s/ Allen Sirkin
Allen Sirkin
|
| |
Director
|
| |
April 2, 2018
|
|
|
/s/ Willem van Bokhorst
Willem van Bokhorst
|
| |
Director
|
| |
April 2, 2018
|
|
|
/s/ Cheryl Vitali
Cheryl Vitali
|
| |
Director
|
| |
April 2, 2018
|
|
|
/s/ Richard White
Richard White
|
| |
Director
|
| |
April 2, 2018
|
|
| 10.4(g) | | | | |
| 21 | | | Subsidiaries of G-III. | |
| 23.1 | | | Consent of Independent Registered Public Accounting Firm, Ernst & Young LLP. | |
| 31.1 | | | | |
| 31.2 | | | | |
| 32.1 | | | | |
| 32.2 | | | | |
| 101.INS | | | XBRL Instance Document. | |
| 101.SCH | | | XBRL Schema Document. | |
| 101.CAL | | | XBRL Calculation Linkbase Document. | |
| 101.DEF | | | XBRL Extension Definition. | |
| 101.LAB | | | XBRL Label Linkbase Document. | |
| 101.PRE | | | XBRL Presentation Linkbase Document. | |
| | |
Page
|
| |||
| | | | F-2 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | | |
| | | | F-8 | | | |
| | | | S-1 | | |
| | |
January 31,
2018 |
| |
January 31,
2017 |
| ||||||
| | |
(In thousands, except per share amounts)
|
| |||||||||
ASSETS
|
| | | | | | | | | | | | |
CURRENT ASSETS | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 45,776 | | | | | $ | 79,957 | | |
Accounts receivable, net of allowances for doubtful accounts, accrued returns and sales discounts of $165,416 and $155,488, respectively
|
| | | | 294,430 | | | | | | 263,881 | | |
Inventories
|
| | | | 553,323 | | | | | | 483,269 | | |
Prepaid income taxes
|
| | | | 15,058 | | | | | | 8,885 | | |
Prepaid expenses and other current assets
|
| | | | 51,014 | | | | | | 46,946 | | |
Total current assets
|
| | | | 959,601 | | | | | | 882,938 | | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES
|
| | | | 62,422 | | | | | | 61,171 | | |
PROPERTY AND EQUIPMENT, NET
|
| | | | 97,857 | | | | | | 102,571 | | |
OTHER ASSETS, NET
|
| | | | 32,478 | | | | | | 36,181 | | |
OTHER INTANGIBLES, NET
|
| | | | 46,405 | | | | | | 48,558 | | |
DEFERRED INCOME TAX ASSETS, NET
|
| | | | 11,439 | | | | | | 15,849 | | |
TRADEMARKS
|
| | | | 442,265 | | | | | | 435,414 | | |
GOODWILL
|
| | | | 262,710 | | | | | | 269,262 | | |
TOTAL ASSETS
|
| | | $ | 1,915,177 | | | | | $ | 1,851,944 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | | | | | | | | | | |
CURRENT LIABILITIES
|
| | | | | | | | | | | | |
Income tax payable
|
| | | $ | 19,748 | | | | | $ | 2,242 | | |
Accounts payable
|
| | | | 232,364 | | | | | | 217,902 | | |
Accrued expenses
|
| | | | 95,055 | | | | | | 95,275 | | |
Total current liabilities
|
| | | | 347,167 | | | | | | 315,419 | | |
NOTES PAYABLE, net of note discount and unamortized costs
|
| | | | 391,044 | | | | | | 461,756 | | |
DEFERRED INCOME TAX LIABILITIES, NET
|
| | | | 15,888 | | | | | | 14,300 | | |
OTHER NON-CURRENT LIABILITIES
|
| | | | 40,389 | | | | | | 39,233 | | |
TOTAL LIABILITIES
|
| | | | 794,488 | | | | | | 830,708 | | |
STOCKHOLDERS’ EQUITY
|
| | | | | | | | | | | | |
Preferred stock; 1,000 shares authorized; No shares issued and outstanding
|
| | | | | | | | | | | | |
Common stock – $0.01 par value; 120,000 shares authorized; 49,219
and 49,016 shares issued, respectively |
| | | | 245 | | | | | | 253 | | |
Additional paid-in capital
|
| | | | 451,844 | | | | | | 437,777 | | |
Accumulated other comprehensive loss
|
| | | | (5,522 ) | | | | | | (27,722 ) | | |
Retained earnings
|
| | | | 674,542 | | | | | | 612,418 | | |
Common stock held in treasury, at cost – 106 and 376 shares, respectively
|
| | | | (420 ) | | | | | | (1,490 ) | | |
TOTAL STOCKHOLDERS’ EQUITY
|
| | | | 1,120,689 | | | | | | 1,021,236 | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | $ | 1,915,177 | | | | | $ | 1,851,944 | | |
|
| | |
Year Ended January 31,
|
| |||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
| | |
(In thousands, except per share amounts)
|
| |||||||||||||||
Net sales
|
| | | $ | 2,806,938 | | | | | $ | 2,386,435 | | | | | $ | 2,344,142 | | |
Cost of goods sold
|
| | | | 1,752,033 | | | | | | 1,545,574 | | | | | | 1,505,504 | | |
Gross profit
|
| | | | 1,054,905 | | | | | | 840,861 | | | | | | 838,638 | | |
Selling, general and administrative expenses
|
| | | | 855,247 | | | | | | 704,436 | | | | | | 628,762 | | |
Depreciation and amortization
|
| | | | 37,783 | | | | | | 32,481 | | | | | | 25,392 | | |
Asset impairments
|
| | | | 7,884 | | | | | | 10,480 | | | | | | — | | |
Operating profit
|
| | | | 153,991 | | | | | | 93,464 | | | | | | 184,484 | | |
Other income (loss)
|
| | | | (454 ) | | | | | | (27 ) | | | | | | 1,340 | | |
Interest and financing charges, net
|
| | | | (43,488 ) | | | | | | (15,675 ) | | | | | | (6,691 ) | | |
Income before income taxes
|
| | | | 110,049 | | | | | | 77,762 | | | | | | 179,133 | | |
Income tax expense
|
| | | | 47,925 | | | | | | 25,824 | | | | | | 64,800 | | |
Net income
|
| | | $ | 62,124 | | | | | $ | 51,938 | | | | | $ | 114,333 | | |
NET INCOME PER COMMON SHARE: | | | | | | | | | | | | | | | | | | | |
Basic:
|
| | | | | | | | | | | | | | | | | | |
Net income per common share
|
| | | $ | 1.27 | | | | | $ | 1.12 | | | | | $ | 2.52 | | |
Weighted average number of shares outstanding
|
| | | | 48,820 | | | | | | 46,308 | | | | | $ | 45,328 | | |
Diluted:
|
| | | | | | | | | | | | | | | | | | |
Net income per common share
|
| | | $ | 1.25 | | | | | $ | 1.10 | | | | | $ | 2.46 | | |
Weighted average number of shares outstanding
|
| | | | 49,750 | | | | | | 47,394 | | | | | | 46,512 | | |
Net income
|
| | | $ | 62,124 | | | | | $ | 51,938 | | | | | $ | 114,333 | | |
Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | 22,200 | | | | | | (4,033 ) | | | | | | (13,584 ) | | |
Other comprehensive income (loss)
|
| | | | 22,200 | | | | | | (4,033 ) | | | | | | (13,584 ) | | |
Comprehensive income
|
| | | $ | 84,324 | | | | | $ | 47,905 | | | | | $ | 100,749 | | |
|
| | |
Common
Stock |
| |
Additional
Paid-in Capital |
| |
Accumulated
Other Comprehensive Loss |
| |
Retained
Earnings |
| |
Common
Stock Held in Treasury |
| |
Total
|
| ||||||||||||||||||
| | |
(In thousands)
|
| |||||||||||||||||||||||||||||||||
Balance as of January 31, 2015
|
| | | $ | 230 | | | | | $ | 328,885 | | | | | $ | (10,105 ) | | | | | $ | 446,147 | | | | | $ | (3,899 ) | | | | | $ | 761,258 | | |
Equity awards exercised/vested, net
|
| | | | (1 ) | | | | | | (838 ) | | | | | | — | | | | | | — | | | | | | 1,256 | | | | | | 417 | | |
Tax benefit from exercise/vesting of equity awards
|
| | | | — | | | | | | 10,127 | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,127 | | |
Share-based compensation expense
|
| | | | — | | | | | | 15,576 | | | | | | — | | | | | | — | | | | | | — | | | | | | 15,576 | | |
Effect of exchange rate changes
|
| | | | — | | | | | | — | | | | | | (13,584 ) | | | | | | — | | | | | | — | | | | | | (13,584 ) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | 114,333 | | | | | | — | | | | | | 114,333 | | |
Balance as of January 31, 2016
|
| | | | 229 | | | | | | 353,750 | | | | | | (23,689 ) | | | | | | 560,480 | | | | | | (2,643 ) | | | | | | 888,127 | | |
Equity awards exercised/vested, net
|
| | | | (2 ) | | | | | | (892 ) | | | | | | — | | | | | | — | | | | | | 1,153 | | | | | | 259 | | |
Adjustments related to tax withholding for share-based compensation
|
| | | | — | | | | | | (6,956 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (6,956 ) | | |
Shares issued to LVMH in connection with the DKI Acquisition
|
| | | | 26 | | | | | | 74,974 | | | | | | — | | | | | | — | | | | | | — | | | | | | 75,000 | | |
Share-based compensation expense
|
| | | | — | | | | | | 16,901 | | | | | | — | | | | | | — | | | | | | — | | | | | | 16,901 | | |
Effect of exchange rate changes
|
| | | | — | | | | | | — | | | | | | (4,033 ) | | | | | | — | | | | | | — | | | | | | (4,033 ) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | 51,938 | | | | | | — | | | | | | 51,938 | | |
Balance as of January 31, 2017
|
| | | | 253 | | | | | | 437,777 | | | | | | (27,722 ) | | | | | | 612,418 | | | | | | (1,490 ) | | | | | | 1,021,236 | | |
Equity awards exercised/vested, net
|
| | | | (8 ) | | | | | | 516 | | | | | | — | | | | | | — | | | | | | 1,070 | | | | | | 1,578 | | |
Share-based compensation expense
|
| | | | — | | | | | | 19,665 | | | | | | — | | | | | | — | | | | | | — | | | | | | 19,665 | | |
Adjustments related to tax withholding for share-based compensation
|
| | | | — | | | | | | (6,114 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (6,114 ) | | |
Effect of exchange rate changes
|
| | | | — | | | | | | — | | | | | | 22,200 | | | | | | | | | | | | — | | | | | | 22,200 | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | 62,124 | | | | | | — | | | | | | 62,124 | | |
Balance as of January 31, 2018
|
| | | $ | 245 | | | | | $ | 451,844 | | | | | $ | (5,522 ) | | | | | $ | 674,542 | | | | | $ | (420 ) | | | | | $ | 1,120,689 | | |
|
| | |
Year Ended January 31,
|
| |||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
| | |
(In thousands)
|
| |||||||||||||||
Cash flows from operating activities | | | | | | | | | | | | | | | | | | | |
Net income
|
| | | $ | 62,124 | | | | | $ | 51,938 | | | | | $ | 114,333 | | |
Adjustments to reconcile net income to net cash provided by operating activities, net of assets and liabilities acquired:
|
| | | | | | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 37,783 | | | | | | 32,481 | | | | | | 25,392 | | |
Asset impairments
|
| | | | 7,884 | | | | | | 10,480 | | | | | | — | | |
Dividend received from unconsolidated affiliate
|
| | | | 3,575 | | | | | | — | | | | | | — | | |
Equity (gain) loss in unconsolidated affiliates
|
| | | | 454 | | | | | | 27 | | | | | | (272 ) | | |
Change in contingent purchase price payable
|
| | | | — | | | | | | — | | | | | | (899 ) | | |
Share-based compensation
|
| | | | 19,665 | | | | | | 16,901 | | | | | | 15,576 | | |
Deferred financing charges and debt discount amortization
|
| | | | 10,890 | | | | | | 5,157 | | | | | | 845 | | |
Deferred income taxes
|
| | | | 4,078 | | | | | | (7,319 ) | | | | | | 3,590 | | |
Loss on disposal of fixed assets
|
| | | | 2,922 | | | | | | 3,201 | | | | | | 625 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | | | | | | | |
Accounts receivable, net
|
| | | | (29,947 ) | | | | | | (29,310 ) | | | | | | (23,616 ) | | |
Inventories
|
| | | | (68,775 ) | | | | | | 12,633 | | | | | | (59,908 ) | | |
Income taxes, net
|
| | | | 11,284 | | | | | | 14,233 | | | | | | (16,833 ) | | |
Prepaid expenses and other current assets
|
| | | | (3,877 ) | | | | | | (6,300 ) | | | | | | 725 | | |
Other assets, net
|
| | | | 10,991 | | | | | | (10,863 ) | | | | | | (97 ) | | |
Accounts payable, accrued expenses and other liabilities
|
| | | | 10,683 | | | | | | 12,436 | | | | | | 14,835 | | |
Net cash provided by operating activities
|
| | | | 79,734 | | | | | | 105,695 | | | | | | 74,296 | | |
Cash flows from investing activities | | | | | | | | | | | | | | | | | | | |
Investment in unconsolidated affiliates
|
| | | | (49 ) | | | | | | (35,432 ) | | | | | | (25,490 ) | | |
Acquisition, net of cash acquired
|
| | | | — | | | | | | (465,403 ) | | | | | | — | | |
Proceeds from sale of a retail store
|
| | | | 644 | | | | | | — | | | | | | — | | |
Capital expenditures
|
| | | | (34,507 ) | | | | | | (24,928 ) | | | | | | (42,172 ) | | |
Net cash used in investing activities
|
| | | | (33,912 ) | | | | | | (525,763 ) | | | | | | (67,662 ) | | |
Cash flows from financing activities | | | | | | | | | | | | | | | | | | | |
Proceeds from term loan, net
|
| | | | — | | | | | | 283,204 | | | | | | — | | |
Repayment of borrowings – new revolving credit facility
|
| | | | (2,018,892 ) | | | | | | (413,282 ) | | | | | | — | | |
Proceeds from borrowings – new revolving credit facility
|
| | | | 1,939,774 | | | | | | 524,748 | | | | | | | | |
Repayment of borrowings – old revolving credit facility
|
| | | | — | | | | | | (20,344 ) | | | | | | — | | |
Proceeds from exercise of equity awards
|
| | | | 1,578 | | | | | | 260 | | | | | | 417 | | |
Taxes paid for net share settlement
|
| | | | (6,114 ) | | | | | | (6,955 ) | | | | | | — | | |
Net cash provided by (used in) financing activities
|
| | | | (83,654 ) | | | | | | 367,631 | | | | | | 417 | | |
Foreign currency translation adjustments
|
| | | | 3,651 | | | | | | (193 ) | | | | | | (2,818 ) | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | (34,181 ) | | | | | | (52,630 ) | | | | | | 4,233 | | |
Cash and cash equivalents at beginning of year
|
| | | | 79,957 | | | | | | 132,587 | | | | | | 128,354 | | |
Cash and cash equivalents at end of year
|
| | | $ | 45,776 | | | | | $ | 79,957 | | | | | $ | 132,587 | | |
Supplemental disclosures of cash flow information: | | | | | | | | | | | | | | | | | | | |
Cash payments:
|
| | | | | | | | | | | | | | | | | | |
Interest
|
| | | $ | 31,644 | | | | | $ | 21,773 | | | | | $ | 5,544 | | |
Income taxes, net
|
| | | | 32,934 | | | | | | 18,915 | | | | | | 68,067 | | |
Non-cash investing and financing activities:
|
| | | | | | | | | | | | | | | | | | |
Shares of common stock issued to LVMH in connection with the acquisition of DKI
|
| | | $ | — | | | | | $ | 75,000 | | | | | $ | — | | |
Note issued to LVMH in connection with the acquisition of DKI
|
| | | | — | | | | | | 125,000 | | | | | | — | | |
| | |
Year Ended January 31,
|
| |||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
| | |
(In thousands, except per share amounts)
|
| |||||||||||||||
Net income
|
| | | $ | 62,124 | | | | | $ | 51,938 | | | | | $ | 114,333 | | |
Basic net income per share: | | | | | | | | | | | | | | | | | | | |
Basic common shares
|
| | | | 48,820 | | | | | | 46,308 | | | | | | 45,328 | | |
Basic net income per share
|
| | | $ | 1.27 | | | | | $ | 1.12 | | | | | $ | 2.52 | | |
Diluted net income per share: | | | | | | | | | | | | | | | | | | | |
Basic common shares
|
| | | | 48,820 | | | | | | 46,308 | | | | | | 45,328 | | |
Stock options and restricted stock unit awards
|
| | | | 930 | | | | | | 1,086 | | | | | | 1,184 | | |
Diluted common shares
|
| | | | 49,750 | | | | | | 47,394 | | | | | | 46,512 | | |
Diluted net income per share
|
| | | $ | 1.25 | | | | | $ | 1.10 | | | | | $ | 2.46 | | |
|
| | | | | |
January 31,
|
| |||||||||
| | | | | |
2018
|
| |
2017
|
| ||||||
| | | | | |
(In thousands)
|
| |||||||||
Machinery and equipment
|
| |
5 years
|
| | | $ | 1,529 | | | | | $ | 1,376 | | |
Leasehold improvements
|
| |
3 – 13 years
|
| | | | 77,091 | | | | | | 82,658 | | |
Furniture and fixtures
|
| |
3 – 10 years
|
| | | | 88,733 | | | | | | 79,292 | | |
Computer equipment and software
|
| |
2 – 5 years
|
| | | | 28,301 | | | | | | 15,907 | | |
| | | | | | | | 195,654 | | | | | | 179,233 | | |
Less: accumulated depreciation
|
| | | | | | | 97,797 | | | | | | 76,662 | | |
| | | | | | | $ | 97,857 | | | | | $ | 102,571 | | |
|
|
Initial Purchase Price
|
| | | $ | 650,000 | | |
|
plus: 338(h)(10) tax election adjustment
|
| | | | 38,100 * | | |
|
plus: aggregate adjustments to purchase price
|
| | | | 26,278 | | |
|
Minus: LVMH Note discount
|
| | | | (40,000 ) | | |
|
Total consideration
|
| | | $ | 674,378 | | |
|
(In thousands)
|
| | |||||
Cash and cash equivalents
|
| | | $ | 44,375 | | |
Accounts receivable
|
| | | | 18,652 | | |
Inventories
|
| | | | 13,727 | | |
Prepaid expenses & other current assets
|
| | | | 22,907 | | |
Property, plant and equipment
|
| | | | 15,414 | | |
Goodwill
|
| | | | 211,675 | | |
Tradenames
|
| | | | 370,000 | | |
Other intangibles
|
| | | | 40,000 | | |
Other long-term assets
|
| | | | 3,052 | | |
Total assets acquired
|
| | | | 739,802 | | |
Accounts payable
|
| | | | (21,096 ) | | |
Accrued expense
|
| | | | (35,582 ) | | |
Income taxes payable
|
| | | | (3,661 ) | | |
Other long-term liabilities
|
| | | | (5,085 ) | | |
Total liabilities assumed
|
| | | | (65,424 ) | | |
Total fair value of acquisition consideration (net of $40 million imputed debt discount)
|
| | | $ | 674,378 | | |
|
|
Purchase price
|
| | | $ | 674,378 | | |
| Minus cash acquired and non-cash consideration | | | | | | | |
|
Cash acquired
|
| | | | (44,375 ) | | |
|
Note issued to LVMH, net of discount
|
| | | | (85,000 ) | | |
|
338(h)(10) election tax election adjustment – paid in fiscal 2019
|
| | | | (4,600 ) | | |
|
Common Stock issued to LVMH
|
| | | | (75,000 ) | | |
|
Cash disbursed for the acquisition of DKI as of January 31, 2018
|
| | | $ | (465,403 ) | | |
|
| | | | | |
January 31,
|
| |||||||||
| | |
Estimated Life
|
| |
2018
|
| |
2017
|
| ||||||
| | | | | |
(In thousands)
|
| |||||||||
Finite-lived intangible assets | | | | | | | | | | | | | | | | |
Licenses
|
| |
14 years
|
| | | $ | 19,714 | | | | | $ | 18,846 | | |
Trademarks
|
| |
8 – 12 years
|
| | | | 2,194 | | | | | | 2,194 | | |
Customer relationships
|
| |
15 – 17 years
|
| | | | 48,371 | | | | | | 48,071 | | |
Other
|
| |
5 – 10 years
|
| | | | 5,876 | | | | | | 4,387 | | |
Subtotal
|
| | | | | | | 76,155 | | | | | | 73,498 | | |
Accumulated amortization
|
| | | | | | | (29,750 ) | | | | | | (24,940 ) | | |
Total finite-lived intangible assets
|
| | | | | | | 46,405 | | | | | | 48,558 | | |
Indefinite-lived intangible assets | | | | | | | | | | | | | | | | |
Goodwill
|
| | | | | | | 262,710 | | | | | | 269,262 | | |
Trademarks
|
| | | | | | | 442,265 | | | | | | 435,414 | | |
Total indefinite-lived intangible assets
|
| | | | | | | 704,975 | | | | | | 704,676 | | |
Total intangible assets, net
|
| | | | | | $ | 751,380 | | | | | $ | 753,234 | | |
|
Year Ending January 31,
|
| |
Amortization Expense
|
| |||
| | |
(In thousands)
|
| |||
2019
|
| | | | 4,453 | | |
2020
|
| | | | 4,426 | | |
2021
|
| | | | 3,903 | | |
2022
|
| | | | 3,102 | | |
2023
|
| | | | 3,057 | | |
| | |
Wholesale
|
| |
Retail
|
| |
Total
|
| |||||||||
January 31, 2016
|
| | | $ | 48,721 | | | | | $ | 716 | | | | | $ | 49,437 | | |
DKI acquisition
|
| | | | 220,649 | | | | | | — | | | | | | 220,649 | | |
Currency translation
|
| | | | (824 ) | | | | | | — | | | | | | (824 ) | | |
January 31, 2017
|
| | | | 268,546 | | | | | | 716 | | | | | | 269,262 | | |
Adjustments to acquired goodwill
|
| | | | (8,973 ) | | | | | | — | | | | | | (8,973 ) | | |
Goodwill impairment
|
| | | | — | | | | | | (716 ) | | | | | | (716 ) | | |
Currency translation
|
| | | | 3,137 | | | | | | — | | | | | | 3,137 | | |
January 31, 2018
|
| | | $ | 262,710 | | | | | $ | — | | | | | $ | 262,710 | | |
|
| | |
January 31, 2018
|
| |
January 31, 2017
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Accrued bonuses
|
| | | $ | 36,137 | | | | | $ | 25,543 | | |
Other accrued expenses
|
| | | | 58,918 | | | | | | 69,732 | | |
Total
|
| | | $ | 95,055 | | | | | $ | 95,275 | | |
|
| | |
January 31, 2018
|
| |
January 31, 2017
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Term loan
|
| | | $ | 300,000 | | | | | $ | 300,000 | | |
New revolving credit facility
|
| | | | 12,003 | | | | | | 91,121 | | |
Note issued to LVMH
|
| | | | 125,000 | | | | | | 125,000 | | |
Subtotal
|
| | | | 437,003 | | | | | | 516,121 | | |
Less: Net debt issuance costs
(1)
|
| | | | (12,626 ) | | | | | | (15,317 ) | | |
Debt discount
|
| | | | (33,333 ) | | | | | | (39,048 ) | | |
Total
|
| | | $ | 391,044 | | | | | $ | 461,756 | | |
|
Year Ending January 31,
|
| |
Amount
|
| |||
| | |
(In thousands)
|
| |||
2019
|
| | | $ | — | | |
2020
|
| | | | — | | |
2021
|
| | | | 12,003 | | |
2022
|
| | | | 300,000 | | |
2023 and thereafter
|
| | | | 125,000 | | |
| | |
Year Ended January 31,
|
| |||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
| | |
(In thousands)
|
| |||||||||||||||
Current | | | | | | | | | | | | | | | | | | | |
Federal
|
| | | $ | 28,723 | | | | | $ | 22,925 | | | | | $ | 47,585 | | |
State and city
|
| | | | 2,592 | | | | | | 4,034 | | | | | | 5,910 | | |
Foreign
|
| | | | 12,532 | | | | | | 6,150 | | | | | | 7,768 | | |
| | | | | 43,847 | | | | | | 33,109 | | | | | | 61,263 | | |
Deferred | | | | | | | | | | | | | | | | | | | |
Federal
|
| | | | 4,084 | | | | | | (4,776 ) | | | | | | 3,458 | | |
State and city
|
| | | | 1,285 | | | | | | (2,807 ) | | | | | | 535 | | |
Foreign
|
| | | | (1,291 ) | | | | | | 298 | | | | | | (456 ) | | |
| | | | | 4,078 | | | | | | (7,285 ) | | | | | | 3,537 | | |
Income tax expense
|
| | | $ | 47,925 | | | | | $ | 25,824 | | | | | $ | 64,800 | | |
Income before income taxes | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | 93,691 | | | | | $ | 55,363 | | | | | $ | 149,578 | | |
Non-United States
|
| | | | 16,358 | | | | | | 22,399 | | | | | | 29,555 | | |
| | | | $ | 110,049 | | | | | $ | 77,762 | | | | | $ | 179,133 | | |
|
| | |
2018
|
| |
2017
|
| ||||||
| | |
(In thousands)
|
| |||||||||
Deferred Income Tax Assets: | | | | | | | | | | | | | |
Compensation
|
| | | $ | 10,783 | | | | | $ | 10,323 | | |
Straight-line lease
|
| | | | 6,856 | | | | | | 4,279 | | |
Provision for bad debts and sales allowances
|
| | | | 17,819 | | | | | | 11,919 | | |
Supplemental employee retirement plan
|
| | | | 415 | | | | | | 519 | | |
Inventory write-downs
|
| | | | — | | | | | | 10,163 | | |
Net operating loss
|
| | | | 2,983 | | | | | | 2,274 | | |
Other
|
| | | | 212 | | | | | | 2,343 | | |
Gross deferred income tax assets
|
| | | | 39,068 | | | | | | 41,820 | | |
Less valuation allowance
|
| | | | (1,648 ) | | | | | | — | | |
Net deferred income tax assets
|
| | | | 37,420 | | | | | | 41,820 | | |
Deferred income tax liabilities: | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | (16,234 ) | | | | | | (14,724 ) | | |
Intangibles
|
| | | | (22,804 ) | | | | | | (21,347 ) | | |
Prepaid expenses and other
|
| | | | (2,585 ) | | | | | | (3,383 ) | | |
Inventory
|
| | | | (246 ) | | | | | | — | | |
Other
|
| | | | — | | | | | | (817 ) | | |
Total deferred income tax liabilities
|
| | | | (41,869 ) | | | | | | (40,271 ) | | |
Net deferred tax assets (liabilities)
|
| | | $ | (4,449 ) | | | | | $ | 1,549 | | |
|
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
Provision for Federal income taxes at the statutory rate
|
| | | | 33.8 % | | | | | | 35.0 % | | | | | | 35.0 % | | |
State and local income taxes, net of Federal tax benefit
|
| | | | 0.5 | | | | | | 1.0 | | | | | | 2.4 | | |
Permanent differences resulting in Federal taxable income
|
| | | | 8.8 | | | | | | 9.6 | | | | | | 3.6 | | |
Tax reform
|
| | | | 7.5 | | | | | | — | | | | | | — | | |
Foreign tax rate differential
|
| | | | 0.2 | | | | | | (1.7 ) | | | | | | (1.4 ) | | |
ASC 718 adoption
|
| | | | (1.2 ) | | | | | | (3.8 ) | | | | | | — | | |
Foreign tax credit
|
| | | | (7.7 ) | | | | | | (6.5 ) | | | | | | (3.1 ) | | |
Valuation allowance
|
| | | | 1.5 | | | | | | — | | | | | | — | | |
Other, net
|
| | | | 0.2 | | | | | | (0.4 ) | | | | | | (0.3 ) | | |
Actual provision for income taxes
|
| | | | 43.6 % | | | | | | 33.2 % | | | | | | 36.2 % | | |
|
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
Balance at February 1,
|
| | | $ | 1,094 | | | | | $ | 1,094 | | | | | $ | 1,094 | | |
Additions based on tax positions related to the current year
|
| | | | — | | | | | | — | | | | | | — | | |
Additions for tax positions of prior years
|
| | | | — | | | | | | — | | | | | | — | | |
Reductions for tax positions of prior years
|
| | | | — | | | | | | — | | | | | | — | | |
Settlements
|
| | | | — | | | | | | — | | | | | | — | | |
Lapses of statutes of limitations
|
| | | | (1,012 ) | | | | | | — | | | | | | — | | |
Balance at January 31,
|
| | | $ | 82 | | | | | $ | 1,094 | | | | | $ | 1,094 | | |
|
Year Ending January 31,
|
| |
Amount
|
| |||
| | |
(In thousands)
|
| |||
2019
|
| | | | 94,175 | | |
2020
|
| | | | 86,262 | | |
2021
|
| | | | 75,878 | | |
2022
|
| | | | 63,917 | | |
2023
|
| | | | 57,993 | | |
Thereafter
|
| | | | 105,214 | | |
| | | | $ | 483,439 | | |
|
Year Ending January 31,
|
| |
Amount
|
| |||
| | |
(In thousands)
|
| |||
2019
|
| | | $ | 148,246 | | |
2020
|
| | | | 102,500 | | |
2021
|
| | | | 86,203 | | |
2022
|
| | | | 78,197 | | |
2023
|
| | | | 75,328 | | |
Thereafter
|
| | | | 72,503 | | |
| | | | $ | 562,977 | | |
|
| | |
Awards
Outstanding |
| |
Weighted Average
Grant Date Fair Value |
| ||||||
Unvested as of January 31, 2016
|
| | | | 2,048,883 | | | | | $ | 30.79 | | |
Granted
|
| | | | 630,642 | | | | | $ | 25.82 | | |
Vested
|
| | | | (678,164 ) | | | | | $ | 22.43 | | |
Canceled
|
| | | | (2,500 ) | | | | | $ | 17.95 | | |
Unvested as of January 31, 2017
|
| | | | 1,998,861 | | | | | $ | 31.70 | | |
Granted
|
| | | | 279,479 | | | | | $ | 16.28 | | |
Vested
|
| | | | (495,372 ) | | | | | $ | 26.39 | | |
Canceled
|
| | | | (10,391 ) | | | | | $ | 28.42 | | |
Unvested as of January 31, 2018
|
| | | | 1,772,577 | | | | | $ | 29.51 | | |
|
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Weighted
Average Exercise |
| |
Shares
|
| |
Weighted
Average Exercise |
| |
Shares
|
| |
Weighted
Average Exercise |
| ||||||||||||||||||
Stock options outstanding at beginning of year
|
| | | | 251,131 | | | | | $ | 9.16 | | | | | | 331,651 | | | | | $ | 10.59 | | | | | | 469,176 | | | | | $ | 11.16 | | |
Exercised
|
| | | | (188,465 ) | | | | | $ | 8.38 | | | | | | (20,520 ) | | | | | $ | 12.65 | | | | | | (37,525 ) | | | | | $ | 11.11 | | |
Granted
|
| | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | |
Cancelled or forfeited
|
| | | | — | | | | | $ | — | | | | | | (60,000 ) | | | | | $ | 15.87 | | | | | | (100,000 ) | | | | | $ | 13.08 | | |
Stock options outstanding at end of year
|
| | | | 62,666 | | | | | $ | 11.50 | | | | | | 251,131 | | | | | $ | 9.16 | | | | | | 331,651 | | | | | $ | 10.59 | | |
Exercisable
|
| | | | 62,666 | | | | | $ | 11.50 | | | | | | 251,131 | | | | | $ | 9.16 | | | | | | 253,151 | | | | | $ | 9.07 | | |
|
Range of Exercise Prices
|
| |
Number
Outstanding as of January 31, 2018 |
| |
Weighted
Average Remaining Contractual Life |
| |
Weighted
Average Exercise Price |
| |
Number
Exercisable as of January 31, 2018 |
| |
Weighted
Average Exercise Price |
| |||||||||||||||
$0.00 – $12.00
|
| | | | 25,600 | | | | | | 0.93 | | | | | $ | 6.56 | | | | | | 25,600 | | | | | $ | 6.56 | | |
$12.01 – $16.00
|
| | | | 20,400 | | | | | | 2.36 | | | | | $ | 12.51 | | | | | | 20,400 | | | | | $ | 12.51 | | |
$16.01 – $40.00
|
| | | | 16,666 | | | | | | 4.19 | | | | | $ | 17.85 | | | | | | 16,666 | | | | | $ | 17.85 | | |
| | | | | 62,666 | | | | | | | | | | | | | | | | | | 62,666 | | | | | | | | |
|
| | |
January 31, 2018
|
| |||||||||||||||||||||
| | |
Wholesale
|
| |
Retail
|
| |
Elimination
(1)
|
| |
Total
|
| ||||||||||||
Net sales
|
| | | $ | 2,454,008 | | | | | $ | 502,494 | | | | | $ | (149,564 ) | | | | | $ | 2,806,938 | | |
Cost of goods sold
|
| | | | 1,649,726 | | | | | | 251,871 | | | | | | (149,564 ) | | | | | | 1,752,033 | | |
Gross profit
|
| | | | 804,282 | | | | | | 250,623 | | | | | | — | | | | | | 1,054,905 | | |
Selling, general and administrative
|
| | | | 571,164 | | | | | | 284,083 | | | | | | — | | | | | | 855,247 | | |
Depreciation and amortization
|
| | | | 27,679 | | | | | | 10,104 | | | | | | — | | | | | | 37,783 | | |
Asset impairments
|
| | | | 2,310 | | | | | | 5,574 | | | | | | — | | | | | | 7,884 | | |
Operating profit (loss)
|
| | | $ | 203,129 | | | | | $ | (49,138 ) | | | | | $ | — | | | | | $ | 153,991 | | |
|
| | |
January 31, 2017
|
| |||||||||||||||||||||
| | |
Wholesale
|
| |
Retail
|
| |
Elimination
(1)
|
| |
Total
|
| ||||||||||||
Net sales
(2)
|
| | | $ | 2,021,736 | | | | | $ | 474,217 | | | | | $ | (109,518 ) | | | | | $ | 2,386,435 | | |
Cost of goods sold
|
| | | | 1,388,175 | | | | | | 267,427 | | | | | | (110,028 ) | | | | | | 1,545,574 | | |
Gross profit
|
| | | | 633,561 | | | | | | 206,790 | | | | | | 510 | | | | | | 840,861 | | |
Selling, general and administrative
|
| | | | 457,785 | | | | | | 246,651 | | | | | | — | | | | | | 704,436 | | |
Depreciation and amortization
|
| | | | 21,483 | | | | | | 10,998 | | | | | | — | | | | | | 32,481 | | |
Asset impairments
|
| | | | — | | | | | | 10,480 | | | | | | — | | | | | | 10,480 | | |
Operating profit (loss)
|
| | | $ | 154,293 | | | | | $ | (61,339 ) | | | | | $ | 510 | | | | | $ | 93,464 | | |
|
| | |
January 31, 2016
|
| |||||||||||||||||||||
| | |
Wholesale
|
| |
Retail
|
| |
Elimination
(1)
|
| |
Total
|
| ||||||||||||
Net sales
|
| | | $ | 1,949,646 | | | | | $ | 514,027 | | | | | $ | (119,531 ) | | | | | $ | 2,344,142 | | |
Cost of goods sold
|
| | | | 1,348,109 | | | | | | 276,926 | | | | | | (119,531 ) | | | | | | 1,505,504 | | |
Gross profit
|
| | | | 601,537 | | | | | | 237,101 | | | | | | — | | | | | | 838,638 | | |
Selling, general and administrative
|
| | | | 398,476 | | | | | | 230,286 | | | | | | — | | | | | | 628,762 | | |
Depreciation and amortization
|
| | | | 17,413 | | | | | | 7,979 | | | | | | — | | | | | | 25,392 | | |
Operating profit (loss)
|
| | | $ | 185,648 | | | | | $ | (1,164 ) | | | | | $ | — | | | | | $ | 184,484 | | |
|
| | |
January 31
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
| | |
(In thousands)
|
| |||||||||
Wholesale
|
| | | $ | 1,554,191 | | | | | $ | 1,477,259 | | |
Retail
|
| | | | 215,568 | | | | | | 228,352 | | |
Corporate
|
| | | | 145,418 | | | | | | 146,333 | | |
Total Assets
|
| | | $ | 1,915,177 | | | | | $ | 1,851,944 | | |
|
| | |
2018
|
| |
2017
|
| |
2016
|
||||||||||||||||||||||||||
Geographic Region
|
| |
Net Sales
|
| |
Long-Lived
Assets |
| |
Net Sales
|
| |
Long-Lived
Assets |
| |
Net Sales
|
| |
Long-Lived
Assets |
|||||||||||||||||
| | |
(In thousands)
|
||||||||||||||||||||||||||||||||
United States
|
| | | $ | 2,466,107 | | | | | $ | 770,128 | | | | | $ | 2,180,409 | | | | | $ | 790,341 | | | | | $ | 2,157,889 | | | | | $ | 150,949 |
Non-United States
|
| | | | 340,831 | | | | | | 185,448 | | | | | | 206,026 | | | | | | 178,665 | | | | | | 186,253 | | | | | | 130,681 |
| | | | $ | 2,806,938 | | | | | $ | 955,576 | | | | | $ | 2,386,435 | | | | | $ | 969,006 | | | | | $ | 2,344,142 | | | | | $ | 281,630 |
|
| | |
Quarter Ended
|
||||||||||||||||||||
| | |
April 30,
2017 |
| |
July 31,
2017 |
| |
October 31,
2017 |
| |
January 31,
2018 (1) |
|||||||||||
Net sales
|
| | | $ | 529,042 | | | | | $ | 538,006 | | | | | $ | 1,024,993 | | | | | $ | 714,897 |
Gross profit
|
| | | | 201,856 | | | | | | 202,891 | | | | | | 390,865 | | | | | | 259,293 |
Net income (loss)
|
| | | | (10,391 ) | | | | | | (8,568 ) | | | | | | 81,625 | | | | | | (542 ) |
Net income (loss) per common share | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | (0.21 ) | | | | | $ | (0.18 ) | | | | | $ | 1.67 | | | | | $ | (0.01 ) |
Diluted
|
| | | $ | (0.21 ) | | | | | $ | (0.18 ) | | | | | $ | 1.65 | | | | | $ | (0.01 ) |
| | |
Quarter Ended
|
||||||||||||||||||||
| | |
April 30,
2016 |
| |
July 31,
2016 |
| |
October 31,
2016 |
| |
January 31,
2017 (2) |
|||||||||||
Net sales
|
| | | $ | 457,403 | | | | | $ | 442,267 | | | | | $ | 883,476 | | | | | $ | 603,289 |
Gross profit
|
| | | | 165,669 | | | | | | 155,643 | | | | | | 321,452 | | | | | | 198,097 |
Net income (loss)
|
| | | | 2,771 | | | | | | (1,293 ) | | | | | | 70,564 | | | | | | (20,104 ) |
Net income (loss) per common share | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | 0.06 | | | | | $ | (0.03 ) | | | | | $ | 1.54 | | | | | $ | (0.42 ) |
Diluted
|
| | | $ | 0.06 | | | | | $ | (0.03 ) | | | | | $ | 1.50 | | | | | $ | (0.42 ) |
Description
|
| |
Balance at
Beginning of Period |
| |
Charges to
Cost and Expenses |
| |
Deductions
(a)
|
| |
Balance at
End of Period |
| ||||||||||||
| | |
(In thousands)
|
| |||||||||||||||||||||
Year ended January 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | |
Deducted from asset accounts
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for doubtful accounts
|
| | | $ | 1,192 | | | | | $ | 854 | | | | | $ | (47 ) | | | | | $ | 2,093 | | |
Reserve for returns
|
| | | | 59,802 | | | | | | 32,710 | | | | | | 31,333 | | | | | | 61,179 | | |
Reserve for sales allowances
(b)
|
| | | | 94,494 | | | | | | 303,734 | | | | | | 296,084 | | | | | | 102,144 | | |
| | | | $ | 155,488 | | | | | $ | 337,298 | | | | | $ | 327,370 | | | | | $ | 165,416 | | |
Year ended January 31, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | |
Deducted from asset accounts
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for doubtful accounts
|
| | | $ | 1,346 | | | | | $ | 682 | | | | | $ | 836 | | | | | $ | 1,192 | | |
Reserve for returns
|
| | | | 61,437 | | | | | | 40,783 | | | | | | 42,418 | | | | | | 59,802 | | |
Reserve for sales allowances
(b)
|
| | | | 72,915 | | | | | | 266,263 | | | | | | 244,684 | | | | | | 94,494 | | |
| | | | $ | 135,698 | | | | | $ | 307,728 | | | | | $ | 287,938 | | | | | $ | 155,488 | | |
Year ended January 31, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | |
Deducted from asset accounts
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for doubtful accounts
|
| | | $ | 1,074 | | | | | $ | 515 | | | | | $ | 243 | | | | | $ | 1,346 | | |
Reserve for returns
|
| | | | 52,740 | | | | | | 36,620 | | | | | | 27,923 | | | | | | 61,437 | | |
Reserve for sales allowances
(b)
|
| | | | 52,367 | | | | | | 212,145 | | | | | | 191,597 | | | | | | 72,915 | | |
| | | | $ | 106,181 | | | | | $ | 249,280 | | | | | $ | 219,763 | | | | | $ | 135,698 | | |
|
Exhibit 10.4(g)
EIGHTH AMENDMENT OF LEASE
(2nd Floor (including mezzanine), 3rd, 4th, 5th, 21st, 22nd, 23rd, 24th, 27th, 28th, 29th, 30th, 31st, 36th, 39th and 40th Floors)
THIS EIGHTH AMENDMENT OF LEASE (this “Agreement” or “Eighth Amendment”) is made as of June 16, 2016 (the “Effective Date”), by and between 500-512 SEVENTH AVENUE LIMITED PARTNERSHIP, a New York limited partnership (“Landlord”) having an address c/o Newmark Grubb Knight Frank, 125 Park Avenue, New York, New York 10017, and G-III LEATHER FASHIONS, INC., a New York corporation, having an address at 512 Seventh Avenue, New York, New York, 10018 (“Tenant”).
RECITALS:
WHEREAS , 500/512 Seventh Avenue Associates, Landlord’s predecessor-in-interest, and BET Studio LLC, Tenant’s predecessor-in-interest, entered into a certain agreement of lease dated as of April 23, 1997 (“Original Lease”), as amended by (i) the First Amendment to Lease dated as of July 1, 2000 (“First Amendment”), (ii) the Second Amendment to Lease dated as of May 1, 2001 (“Second Amendment”), (iii) the Third Amendment of Lease dated as of March 26, 2010 (“Third Amendment”), (iv) the Fourth Amendment of Lease dated as of September 1, 2010 (“Fourth Amendment”), (v) the Fifth Amendment of Lease dated as of November 2, 2010 (“Fifth Amendment”), (vi) the Sixth Amendment of Lease dated as of May 23, 2013 (“Sixth Amendment”), and (vii) the Seventh Amendment of Lease dated as of April 25, 2014 (collectively, and as amended hereby, the “Lease”) currently for the 2nd Floor (including mezzanine), the 21st, 22nd, 23rd, 24th, 27th, 28 th , 29th, 30th, 31st, 36th, 39th and 40th Floors (collectively, the “Premises”) as more particularly described in the Lease, in the office building located at and known as 512 Seventh Avenue, New York, New York (the “Building”); and
1 |
WHEREAS, Landlord and Tenant desire to add to the Premises the entire rentable area of the 3rd, 4th, and 5th Floors of the Building (collectively the “3, 4, 5 Floor Space”), as more fully described in Exhibit A annexed hereto and made a part hereof, for a term expiring May 31, 2026 (provided, however, if the Delivery Date (as defined below) occurs after June 1, 2016, this date shall be extended by the number of days after June 1, 2016 that the Delivery Date occurs), pursuant to the terms and conditions of the Lease; and
WHEREAS, Landlord and Tenant desire to set forth the terms of Tenant’s option to renew the Lease (for a renewal term of five (5) years) with respect to the 3, 4, 5 Floor Space; and
NOW, THEREFORE , in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto by these presents do covenant and agree as follows:
1. Recitals; Definitions . The Recitals set forth above are true and correct and are incorporated herein and form a part of this Agreement. Unless otherwise defined in this Agreement, all terms used in this Agreement that are defined in the Lease shall have the meanings ascribed to them in the Lease.
2. 3, 4, 5 Floor Space Term . Landlord and Tenant agree that the term of the Lease is hereby extended with regard to the 3, 4, 5 Floor Space only, to May 31, 2026 (provided, however, if the Delivery Date occurs after June 1, 2016, this date shall be extended by the number of days after June 1, 2016 that the Delivery Date occurs). The extension of the term of the Lease to May 31, 2026 (subject to extension as set forth above) for the 3, 4, 5 Floor Space does not extend Tenant’s right to occupy the balance of the Premises (i.e., 2nd Floor (including Mezzanine) and 21st, 22nd, 23rd, 24th, 27th, 29th, 31st, 36th, 39th and 40th Floors). Tenant acknowledges and agrees that the Tenant’s right to occupy the 2nd Floor (including Mezzanine) and 21st, 22nd, 23rd, 24th, 27th, 29th, 31st, 36th, 39th and 40th Floors) expires on March 31, 2023 and that Tenant’s right to occupy the 28th and 30th Floors expires on December 31, 2023, pursuant to the terms of the several Lease Amendments identified above, subject, however, to the options to renew set forth in such Lease Amendments.
2 |
3. 3, 4, 5 Floor Space . The Premises shall be expanded to include each of the 3rd Floor, 4th Floor, and 5th Floor Spaces identified on Exhibit A hereto for the period commencing on the Delivery Date and ending May 31, 2026 (subject to extension as set forth in paragraph 2 above, both dates inclusive) (“3, 4, 5 Floor Space Term”). Tenant acknowledges that Landlord shall complete Landlord’s Work on each of the 3 rd , 4 th and 5 th floors at different times, and agrees to deliver possession of each floor, in the condition required hereunder, when Landlord’s Work on such floor has been completed. For the purposes of this Agreement, the “Delivery Date” shall be the date upon which Landlord gives Tenant possession of the final floor of the 3, 4, 5 Floor Space pursuant to the terms of the Lease, in its “as is”, “where is” condition, with all faults; provided however, that (A) Landlord shall, prior to the Delivery Date, complete Landlord’s Work to each floor as set forth on Exhibit B attached hereto and made a part hereof in a good and workmanlike manner and (B) the 3, 4, 5 Floor Space shall, on the Delivery Date, be free of (i) all tenancies and occupants other than Tenant and its employees, agents and subsidiaries, (ii) violations (other than violations caused by Tenant or Tenant’s agents, contractors or employees) that would prevent Tenant from obtaining a work permit for the performance of Tenant’s Initial 3, 4, 5 Floor Work (as hereafter defined), and (iii) asbestos in friable condition. Tenant agrees that if at any time, it uncovers asbestos while making improvements to the 3, 4, 5 Floor Space and the asbestos is not in friable condition, or is or can be encapsulated, then Landlord will have no obligation to remove the asbestos. By way of example, if there is VAT tile, which is covered, or shall be covered by Tenant with other floor covering, Landlord shall have no obligation to remove the VAT tile. If Tenant elects to perform demolition work within the 3, 4, 5 Floor Space, Landlord agrees to obtain for Tenant an ACP-5 for any such work within twenty (20) days after receipt from Tenant of demolition plans for the 3, 4, 5 Floor Space. LANDLORD AND LANDLORD’S AGENTS HAVE MADE NO REPRESENTATION OR WARRANTY TO TENANT, EXPRESS OR IMPLIED, RESPECTING THE CONDITION OF THE 3, 4, 5 FLOOR SPACE LEASED HEREUNDER OR THE BUILDING, INCLUDING WITHOUT LIMITATION (A) ANY IMPLIED OR EXPRESS WARRANTY OF QUALITY, CONDITION OR TENANTABILITY, OR (B) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. Except for the removal of asbestos in friable condition, if any, (as expressly required pursuant to this Article 3 of this Agreement), Landlord shall not be obligated or required to do any work or make any alterations or decorations or install any fixtures, equipment or improvements or make any repairs or replacements to the 3, 4, 5 Floor Space to prepare or fit the same for Tenant’s use or for any other reason whatsoever. Except as expressly set forth herein, Landlord shall not be obligated or required to pay any work contribution or construction allowance in connection with Tenant’s lease of the 3, 4, 5 Floor Space.
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4. Fixed Rent for 3, 4, 5 Floor Space During 3, 4, 5 Floor Space Term . During the 3, 4, 5 Floor Space Term, Tenant shall pay to Landlord, in accordance with the terms and conditions set forth in the Lease, Fixed Rent for the 3, 4, 5 Floor Space in the amounts set forth below:
Time Period | Fixed Rent per Annum and per Month (3, 4, 5 Floor Space) |
Delivery Date – May 31, 2017* |
$2,044,020.00 per annum
($170,335.00 per month) |
June 1, 2017 – May 31, 2018 |
$2,095,120.50 per annum
($174,593.38 per month) |
June 1, 2018 – May 31, 2019 |
$2,147,498.51 per annum
($178,958.21 per month) |
June 1, 2019 – May 31, 2020 |
$2,294,095.98 per annum
($191,174.66 per month) |
June 1, 2020 – May 31, 2021 |
$2,351,448.38 per annum
($195,954.03 per month) |
June 1, 2021 – May 31, 2022 |
$2,410,234.59 per annum
($200,852.88 per month) |
June 1, 2022 – May 31, 2023 |
$2,563,400.95 per annum
($213,616.70 per month) |
June 1, 2023 – May 31, 2024 |
$2,627,485.46 per annum
($218,957.12 per month) |
June 1, 2024 – May 31, 2025 |
$2,693,172.60 per annum
($224,431.05 per month) |
June 1, 2025 – May 31, 2026* |
$2,760,501.91 per annum
($230,041.83 per month) |
*If | Landlord delivers the 3, 4, 5 Floor Space to Tenant after June 1, 2016, this date shall be extended by the number of days after June 1, 2016 that the Delivery Date occurs, and Fixed Rent shall be pro-rated for partial months. |
Provided and on the condition that Tenant is not then in default under the terms of the Lease beyond any applicable notice and cure periods as of the date of the application of the credit, Tenant shall be entitled to a credit against the obligation to pay Fixed Rent for the 3, 4, 5 Floor Space only, in the aggregate amount of $1,022,010.00 (“3, 4, 5 Floor Space Credit”) to be applied only against the Fixed Rent for the 3, 4, 5 Floor Space in the amount of $170,335.00 on each of June 1, 2016, July 1, 2016, June 1, 2017, July 1, 2017, June 1, 2018, and July 1, 2018. Except for the 3, 4, 5 Floor Space Credit and as otherwise may be expressly set forth herein or elsewhere in the Lease, Tenant shall not be entitled to any free rent, rent abatement, or rent credit of any kind against Tenant’s obligation to pay Fixed Rent for the 3, 4, 5 Floor Space.
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5. Electricity, Water, Sewer and Sprinkler for 3, 4, 5 Floor Space During 3, 4, 5 Floor Term . During the 3, 4, 5 Floor Space Term, Tenant shall pay for all of the following with respect to the 3, 4, 5 Floor Space: (i) electrical use on a ‘submetering’ basis in accordance with Article Twenty-Second of the First Amendment, (ii) water and sewer charges of $102 per month for each floor in the 3, 4, 5 Floor Space in accordance with Article Twenty-Third of the Original Lease, and (iii) a sprinkler supervisory service charge of $102 per month for each floor in the 3, 4, 5 Floor Space in accordance with Article Twenty-Fourth of the Original Lease.
6. Real Estate Taxes for 3, 4, 5 Floor Space During 3, 4, 5 Floor Space Term . During the 3, 4, 5 Floor Space Term, Tenant shall pay real estate tax escalation with respect to the 3, 4, 5 Floor Space in accordance with Article Fifty-Eighth of the Original Lease except that (i) the base tax year shall be the New York City Real Estate tax year commencing July 1, 2017 and ending June 30, 2018, (ii) the base tax year and each of the comparative years’ taxes shall be calculated without giving effect to any tax abatement or exemption, and (iii) the Percentage for the 3, 4, 5 Floor Space shall be 8.57%.
7. Additional Rent for 3, 4, 5 Floor Space During 3, 4, 5 Floor Space Term . In addition to the Fixed Rent and specific items of additional rent set forth above, during the 3, 4, 5 Floor Space Term, Tenant shall be responsible for all additional rent with respect to the 3, 4, 5 Floor Space as set forth in the Lease. Except as otherwise may be expressly set forth herein or elsewhere in the Lease, Tenant shall not be entitled to any free rent, rent abatement, or rent credit of any kind against Tenant’s obligation to pay additional rent for the 3, 4, 5 Floor Space.
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8. Work Contribution (3, 4, 5 Floor Space) . Provided Tenant shall not be in default under this Lease beyond the expiration of any applicable notice and cure periods, Landlord shall contribute as hereinafter provided an amount (“3, 4, 5 Floor Work Contribution”) not to exceed a maximum of $1,393,650.00 toward (a) Tenant’s actual “hard costs” of performing and completing Tenant’s build out of the 3, 4, 5 Floor Space (“Tenant’s Initial 3, 4, 5 Floor Work”), which Tenant’s Initial 3, 4, 5 Floor Work shall be subject to the Tenant alteration provisions of the Lease (including, without limitation, the requirement that Tenant obtain Landlord’s prior written consent thereto), (b) “Soft Costs” incurred in connection with Tenant’s Initial 3, 4, 5 Floor Work, including architectural and engineering fees and other soft costs incurred in connection with Tenant’s Initial 3, 4, 5 Floor Work (Soft Costs shall mean the cost of space planning, engineering and design costs, third party construction management fees, permitting, furniture, moving and other soft costs and data and voice equipment, cabling, wiring and related expenses), and (c) the actual Hard Costs and/or Soft Costs of any other alterations being performed by Tenant to the Premises on any floor of the Premises (which alterations shall be subject to Tenant alteration provisions of the Lease (including, without limitation, the requirement that Tenant obtain Landlord’s prior written consent thereto).
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Provided that the Lease is in full force and effect and no event of default shall have occurred and is continuing hereunder beyond the expiration of any applicable notice and cure periods, and provided further that there are no outstanding mechanic’s liens, financing statements or other liens, charges or orders in existence filed against Landlord, or against all or any portion of the Premises, or the Building due to any act or omission of Tenant or any of Tenant’s contractors or affiliates that has not been actually released and discharged of record or bonded or insured over to the reasonable satisfaction of Landlord, Landlord shall make progress payments to Tenant on account of the 3, 4, 5 Floor Work Contribution on a periodic basis as set forth below in reimbursement of the cost of the work performed by or on behalf of Tenant and paid for by Tenant for Tenant’s Initial 3, 4, 5 Floor Work and/or other alterations to the Premises (and not previously reimbursed out of disbursements from the 3, 4, 5 Floor Work Contribution). Concurrently with a request by Tenant for reimbursement out of the 3, 4, 5 Floor Work Contribution, Tenant shall provide documentation to Landlord evidencing that Tenant has retained a portion of the total amounts then due to Tenant’s general contractor which portion shall not be less than (a) ten percent (10%) until at least fifty percent (50%) of the Tenant’s Initial 3, 4, 5 Floor Work and/or other alterations to the Premises have been substantially completed and (b) five percent (5%) until all of Tenant’s Initial 3, 4, 5 Floor Work have been substantially completed. Each of Landlord’s progress payments will be limited to an amount equal to (a) the aggregate amounts theretofore paid by Tenant (as certified by an authorized officer of Tenant) to Tenant’s contractors, subcontractors and material suppliers (excluding any payments for which Tenant has previously been reimbursed out of previous disbursements from 3, 4, 5 Floor Work Contribution), multiplied by (b) a fraction (which shall not exceed 1.0), the numerator of which is the amount of 3, 4, 5 Floor Work Contribution, and the denominator of which is the total contract price (or, if there is no specified or fixed contract price for Tenant’s Initial 3, 4, 5 Floor Work, and/or other alterations to the Premises, then Landlord’s reasonable estimate thereof) for the performance of all of Tenant’s Initial 3, 4, 5 Floor Work and/or other alterations to the Premises shown on all plans and specifications approved by Landlord. Provided that Tenant delivers requisitions to Landlord no more than once every sixty (60) days, such progress payments shall be made within sixty (60) days after the delivery to Landlord of requisitions therefor (the date that each requisition is delivered to Landlord being referred to herein as the “Requisition Delivery Date”), signed by an officer of Tenant, which requisitions shall set forth the names of each contractor and subcontractor to whom payment is due, and the amount thereof, and shall be accompanied by (i) copies of partial waivers of lien from all contractors, subcontractors and material suppliers covering all work and materials which were the subject of previous progress payments by Landlord and Tenant, (ii) a written certification from Tenant that the work for which the requisition is being made has been completed substantially in accordance with the plans and specifications approved by Landlord, (iii) copies of canceled checks from Tenant’s general contractor evidencing the payment in full of the work for which such requisition is being made, and (iv) such other documents and information as Landlord may reasonably request. Provided true, correct and complete requisitions are made no more often than every sixty (60) days, and provided further that the required accompanying documentation as set forth in this Article 8 is delivered to Landlord with such requisition, such requisition shall be paid by Landlord within sixty (60) days after Landlord’s receipt of the applicable requisition. If only a portion of the requisition is rejected by Landlord as provided in this Article, Landlord shall cause the non-rejected portion of such requisition to be paid within the original sixty (60) day timeframe set forth above. Notwithstanding anything set forth above, Landlord shall review each requisition submitted by Tenant and, within ten (10) business days after the applicable Requisition Delivery Date, either (i) provide written notice to Tenant of Landlord’s approval of such requisition or (ii) provide written notice to Tenant setting forth in reasonable detail any items that in Landlord’s reasonable judgment would prevent payment of such requisition by Landlord in accordance with the provisions set forth herein. If Landlord fails to respond to Tenant’s requisition as set forth above within ten (10) business days after the Requisition Delivery Date, Tenant shall have the right to provide Landlord with a second written notice requesting such approval. Said second written notice shall include in bold uppercase writing that “ PURSUANT TO THE EIGHTH AMENDMENT OF LEASE, LANDLORD’S FAILURE TO RESPOND TO THE ENCLOSED REQUISITION WITHIN FIVE (5) BUSINESS DAYS AFTER LANDLORD’S RECEIPT OF THIS REQUEST, SHALL BE DEEMED TO MEAN THAT THE ENCLOSED REQUISIITON IS APPROVED BY LANDLORD.” If Tenant provides the second notice in accordance herewith and Landlord fails to respond to the second notice within five (5) business days after Landlord’s receipt thereof, as Tenant’s sole and exclusive remedy, such requisition shall be deemed approved, subject only to any written comments from Landlord’s lender or said lender’s servicer. All requisitions shall be submitted on AIA Form G702 and G703. All requisitions must be submitted on or before May 31, 2019 (the “3, 4, 5 Floor Final Submission Date”), time being of the essence as to such date; provided, however, if the Delivery Date is after June 1, 2016, the 3, 4, 5 Floor Final Submission Date shall be extended by the number of days after June 1, 2016 that the Delivery Date occurs. The amounts requested under Tenant’s final requisition of the 3, 4, 5 Floor Work Contribution (which shall include, without limitation, the 5% Retainage (as hereafter defined)) shall not be disbursed until all documentation required under this Article 8, together with (A) proof of the satisfactory completion of all required inspections and issuance of any required approvals, permits and sign-offs for Tenant’s Initial 3, 4, 5 Floor Work and other alterations to the Premises by all Governmental Authorities having jurisdiction thereover (it being acknowledged that a copy of the back of the building permit with “sign-offs” from the applicable inspectors shall satisfy the requirements of this subsection (A)). Notwithstanding anything set forth above to the contrary, the requirements set forth in this subsection (A) shall not be a prerequisite to payment by Landlord of the final requisition of the 3, 4, 5 Floor Work Contribution; provided, however, should Tenant fail to submit the items required by this subsection (A), Landlord shall have the absolute right to retain an amount equal to five percent (5%) of the 3, 4, 5 Floor Work Contribution (“5% Retainage”) until such time as Tenant submits the items required by this subsection (A), (B) final “as-built” plans and specifications for Tenant’s Initial 3, 4, 5 Floor Work, (C) the issuance of final lien waivers by all contractors, subcontractors and material suppliers (in each case having contracts with a value over $10,000) covering all of Tenant’s Initial 3, 4, 5 Floor Work, and (D) copies of canceled checks from Tenant’s general contractor evidencing the payment in full of Tenant’s Initial 3, 4, 5 Floor Work. Notwithstanding anything to the contrary set forth in this Lease, the 3, 4, 5 Floor Work Contribution shall be paid by Landlord in no less than five (5) installments with each installment other than the final installment constituting no more than twenty percent (20%) of the 3, 4, 5 Floor Work Contribution. Notwithstanding anything to the contrary set forth in this Article 8, if Tenant fails to pay when due any sums due and payable to any of Tenant’s contractors or material suppliers, and Tenant shall fail to remove or bond any lien within ten (10) days after notice from Landlord of such failure, such failure shall constitute an event of default under the Lease without the requirement of any other notice of any kind, and, without limitation of Landlord’s other rights and remedies hereunder, Landlord shall have the right, but not the obligation, to promptly pay to such contractor or supplier all sums so due from Tenant, and sums so paid by Landlord shall be deemed additional rent and shall be paid by Tenant within ten (10) days after Landlord delivers to Tenant an invoice therefor. Under no circumstance shall Landlord be required pursuant to this Agreement to contribute in excess of the 3, 4, 5 Floor Work Contribution. Any costs in excess of the 3, 4, 5 Floor Work Contribution shall be the sole responsibility of Tenant. Tenant shall be entitled to receive a portion of the 3, 4, 5 Floor Work Contribution (which portion shall in no event exceed $278,730.00 (the “3, 4, 5 Floor Maximum Portion”)) not actually expended by Tenant in the performance of Tenant’s Initial 3, 4, 5 Floor Work or Tenant’s other alterations and/or Soft Costs and/or not paid by Landlord as required herein, as a credit against Fixed Rent for the 3, 4, 5 Floor Space, but not additional rent, for the period beginning June 1, 2018 and continuing thereafter until exhausted but only provided on the condition that at the time of application of such credit, (i) Tenant is not then in default under this Lease beyond the expiration of any applicable notice and cure periods, and (ii) Tenant has completed Tenant’s Initial 3, 4, 5 Floor Work and has provided to Landlord reasonable proof that Tenant has paid in full the cost of Tenant’s Initial 3, 4, 5 Floor Work and Soft Costs. For the sake of certainty, in the event that as of June 1, 2018 (subject to extension as set forth above, i.e., the day immediately following the 3, 4, 5 Floor Final Submission Date) with time being of the essence , Tenant shall have failed to requisition (in accordance with the Lease) a portion of the 3, 4, 5 Floor Work Contribution which exceeds the 3, 4, 5 Floor Maximum Portion, Tenant shall forever waive Tenant’s right to receive (in every respect, including, without limitation as a credit and/or as a work contribution) such excess portion of the 3, 4, 5 Floor Work Contribution over and above the 3, 4, 5 Floor Maximum Portion. No portion of the 3, 4, 5 Floor Work Contribution may be assigned by Tenant prior to the actual payment thereof by Landlord. Landlord has made no representations as to the projected cost of Tenant’s Initial 3, 4, 5 Floor Work or Soft Costs.
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9. Scaffolding at 512 Seventh Avenue . Landlord shall use commercially reasonable efforts to remove the existing scaffolding installed at street level in front of the Seventh Avenue portion of 512 Seventh Avenue by June 1, 2017. The scaffolding on the remaining portion of 500-512 Seventh Avenue, including (i) on the 38th Street side of 512 Seventh Avenue, (ii) in front of 500 Seventh Avenue, and (iii) in front of 228 West 38th Street may remain in place after June 1, 2017 without abatement. In the event that Landlord is unable to remove the street level scaffolding in front of the Seventh Avenue portion of 512 Seventh Avenue as set forth in the first sentence above, then Tenant shall be entitled to an abatement of Fixed Rent (in addition to the abatement described paragraph 4 above) in the amount of $967.74 per day for each day that the street level scaffolding remains in front of the Seventh Avenue portion of 512 Seventh Avenue after June 1, 2017. The abatement shall end upon the removal of the scaffolding from in front of the Seventh Avenue portion of 512 Seventh Avenue. Any portion of the abatement accrued shall be credited against the next installment of Fixed Rent payable by Tenant until Tenant has received the full amount of the abatement pursuant to this paragraph.
10. Renewal Option with Respect to 3, 4, 5 Floor Space . Tenant’s one (1) time option to renew the term of the Lease for a term of five (5) years, as set forth in Article 14 of the Third Amendment, shall apply and extend to Tenant’s lease of the 3, 4, 5 Floor Space except that the renewal term shall mean the period commencing June 1, 2026 and ending May 31, 2031 (provided, however, if the Delivery Date occurs after June 1, 2016, these dates shall be extended by the number of days after June 1, 2016 that the Delivery Date occurs) (said renewal term with respect to the 3, 4, 5 Floor Space herein being referred to as the “3, 4, 5 Floor Renewal Term”). Each such option shall be subject to Tenant’s satisfaction of all of the conditions set forth in Article 14 of the Third Amendment, including, without limitation, (i) that this Lease is in full force and effect and that no default exists hereunder beyond the expiration of any applicable notice and cure periods at the time of delivery of the Renewal Notice or on June 1, 2026, (ii) that Tenant has already renewed for a term of five (5) years leases in the Building aggregating no less than eight (8) full floors, and (iii) that Tenant delivers the Renewal Notice by no later than June 1, 2025. Once Tenant timely delivers the Renewal Notice, such Renewal Notice shall not under any circumstance be revocable by Tenant. For the sake of certainty, nothing contained herein shall in any way modify the Renewal Option with respect to portions of the Premises other than the 3, 4, 5 Floor Space.
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The Renewal Option for the 3, 4, 5 Floor Space shall be on all of the same terms, covenants and conditions set forth in the Lease except that during the 3, 4, 5 Floor Renewal Term (i) Landlord shall have no obligation to perform any work in the Premises; (ii) Tenant shall not be entitled to any Landlord work contribution or Landlord construction allowance; (iii) Tenant shall not be entitled to any free rent, rent credit, concession or abatement; (iv) Tenant shall have no option to renew or extend the term of the Lease with respect to the 3, 4, 5 Floor Space to beyond May 31, 2031 (subject to extension as set forth above); and (v) Fixed Rent during the 3, 4, 5 Floor Renewal Term for the 3, 4, 5 Floor Space shall be as follows:
*If | the Delivery Date occurs after June 1, 2016, these dates shall be extended by the number of days after June 1, 2016 that the Delivery Date occurs, and Fixed Rent shall be pro-rated for partial months. |
11. Insurance . Tenant hereby agrees to (at Tenant’s sole cost and expense) procure and maintain in full force and effect throughout the remainder of term of the Lease (and any extension thereof) any and all additional insurance in the forms and with the minimum limits reasonably required by Landlord. All such insurance shall (i) name Landlord, Landlord’s managing agent, and such other parties as Landlord shall require as certificate holder and additional insured and (ii) extend to all floors (and partial floors) comprising the Premises. Concurrently with its execution and delivery of this Agreement, Tenant shall furnish to Landlord documentation (including, without limitation certificates and endorsements) evidencing Tenant’s having obtained such insurance and paid the premiums for such insurance.
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12. Brokerage . Landlord and Tenant each warrant to the other that it has not dealt with any broker or agent in connection with the negotiation or execution of this Agreement. Tenant and Landlord shall each indemnify the other against all costs, expenses, reasonable attorneys’ fees, and other liability for commissions or other compensation claimed by any other broker or agent claiming the same by, through, or under the indemnifying party. The provisions of this Article shall survive the expiration or sooner termination of the Lease.
13. Ratification . This Agreement amends and forms a part of the Lease. Landlord and Tenant hereby ratify and confirm their obligations under the Lease and represent and warrant to each other that each has no defenses thereto. Additionally, Landlord and Tenant further confirm and ratify that, as of the date hereof, (i) the Lease is and remains in good standing and in full force and effect, (ii) each has no claims, counterclaims, set-offs or defenses against the other arising out of the Lease, and other leases for space occupied by Tenant in the Building, or in any way relating thereto or arising out of any other transaction between Landlord and Tenant, and (iii) except as may be otherwise be expressly set forth in the Lease, Tenant is not entitled to any free rent, rent abatement, Landlord’s work contribution or allowance, or Landlord’s work. Tenant acknowledges that to Tenant’s knowledge, Landlord has performed all obligations imposed on Landlord by the Lease, and other leases for space occupied by Tenant in the Building, prior to the date hereof.
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14. Entire Agreement; No Waiver . This Agreement, together with the Lease, constitutes the entire agreement of the parties hereto with respect to the matters stated herein, and may not be amended or modified unless such amendment or modification shall be in writing and shall have been signed by the party against whom enforcement is sought. No waiver by either party or any failure or refusal by the other party to comply with its obligations hereunder shall be deemed a waiver of any other or subsequent failure or refusal to so comply. If any provision of this Agreement shall be invalid or unenforceable, the remainder of this Agreement or the application of such provision other than to the extent that it is invalid or unenforceable shall not be affected, and each provision of this Agreement shall remain in full force and effect notwithstanding the invalidity or unenforceability of such provision, but only to the extent that application and/or enforcement, as the case may be, would be equitable and consistent with the intent of the parties in entering into this A greement.
15. Submission of Amendment . The submission by Landlord to Tenant of this Agreement shall have no binding force or effect, shall not constitute an option for the leasing of the Premises, nor confer any rights or impose any obligations upon either party until the execution thereof by Landlord and the delivery of an executed original copy thereof to Tenant or its representative.
16. Binding Effect; Governing Law . This Agreement shall be binding upon and inure to the benefit of Landlord and Tenant and their respective successors and assigns. In the event of any conflict or inconsistency between the terms of this Agreement and the remaining terms of this Lease, the terms of this Agreement shall govern and control. This Agreement shall be governed by the laws of the State of New York.
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17. Counterparts . This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one and the same document.
18. No Recordation . Landlord and Tenant agree that this Agreement shall not be recorded.
19. Attorneys’ Fees . Should any party hereto employ an attorney for the purpose of enforcing or construing this Agreement, or any judgment based on this Agreement, in any legal proceeding whatsoever between or including the parties, including, but not limited to, insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing party shall be entitled to receive from the other party hereto reimbursement for all actual reasonable out-of-pocket attorneys’ fees and costs, including, but not limited to, service of process, filing fees, court and court reporter costs, investigative costs, expert witness fees and the cost of any bonds, whether taxable or not, and such reimbursement shall be included in any judgment, decree or final order issued in that proceeding. The “prevailing party” means the party in whose favor a final unappealable judgment, decree or order is rendered.
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IN WITNESS WHEREOF , intending to be legally bound hereby, the parties hereto have duly executed this Agreement as of the date first written above.
LANDLORD: | |||
500-512 SEVENTH AVENUE LIMITED PARTNERSHIP | |||
By: 500-512 Seventh Avenue GP LLC | |||
By: | /s/ Jacob Chetrit | ||
Jacob Chetrit, President | |||
TENANT: | |||
G-III LEATHER FASHIONS, INC. | |||
By: | /s/ Wayne S. Miller | ||
Wayne S. Miller, COO |
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EXHIBIT A
3, 4, 5 Floor Space
EXHIBIT B
Landlord’s Work
1. Demolish existing conditions within the Premises.
2. Deliver broom clean.
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NAME OF SUBSIDIARY
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JURISDICTION OF ORGANIZATION
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G-III Leather Fashions, Inc.
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New York
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AM Retail Group, Inc.
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Delaware
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CK Outerwear LLC
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New York
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G-III Apparel Canada ULC
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British Columbia, Canada
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G-III Hong Kong Limited
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Hong Kong
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Kostroma Limited
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Hong Kong
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G-III Asia, Limited
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Hong Kong
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Hangzhou G-III Apparel Trading Co., Ltd
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China
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Riviera Sun, Inc.
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Delaware
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VBQ LLC
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Delaware
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VBQ Acquisition B.V.
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Netherlands
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G-III Foreign Holdings C.V.
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Netherlands
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Vilebrequin International SA
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Switzerland
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GK Holdings Coöperatief U.A.
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Netherlands
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G-III Europe Coöperatief U.A.
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Netherlands
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GKL Holdings B.V.
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Netherlands
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T.R.B. International SA
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Switzerland
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Tropezina S.L.
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Spain
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Vilebrequin France SAS
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France
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TRB (Singapore) S.E. Asia PTE Ltd.
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Singapore
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Lobst SAS
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France
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TRB Belgique SPRL
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Belgium
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Riley SA
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Switzerland
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Sole SRL
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Italy
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La Plage Ltd.
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United Kingdom
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T.R.B. Hong Kong Ltd.
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Hong Kong
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TRB Macao Ltd.
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Macao
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Riley & Cie S.C.S.
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Monaco
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TRB Portugal, Comercio de Vestuario Unipessoal LDA
|
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Portugal
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TRB International SA, succursale Saint Bathelemy
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France
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TRB International SA, succursale Serris
|
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France
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TRB Mexico
|
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Mexico
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Naiman GmbH
|
| |
Switzerland
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Vilebrequin Saint Maarten
|
| |
St. Maarten
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Vilebrequin Deutschland GmbH
|
| |
Germany
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|
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VBQ France
|
| |
France
|
|
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Donna Karan International Inc.
|
| |
Delaware
|
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Gabrielle Studio, Inc.
|
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New York
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The Donna Karan Company LLC
|
| |
New York
|
|
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The Donna Karan Company Store LLC
|
| |
New York
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NAME OF SUBSIDIARY
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JURISDICTION OF ORGANIZATION
|
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Donna Karan Studio LLC
|
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New York
|
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Donna Karan (Italy) S.r.l
|
| |
Italy
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Donna Karan Service Company B.V.
|
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Netherlands
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Donna Karan Company Store Ireland Limited
|
| |
Ireland
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Donna Karan Company Stores UK Holding Ltd.
|
| |
United Kingdom
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|
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The Donna Karan Company Store (UK) Limited
|
| |
United Kingdom
|
|
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Donna Karan Company Stores UK Retail Ltd.
|
| |
United Kingdom
|
|
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Donna Karan Management Company UK Ltd.
|
| |
United Kingdom
|
|
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Donna Karan Company Store (Germany) GmbH
|
| |
Germany
|
|
| April 2, 2018 | | |
/s/ Morris Goldfarb
Morris Goldfarb
Chief Executive Officer |
|
| April 2, 2018 | | |
/s/ Neal S. Nackman
Neal S. Nackman
Chief Financial Officer |
|