G III Apparel Group (GIII) risk factors, FY2025 10-K

Other

1. 01The failure to maintain our material license agreements could cause us to lose significant revenues and have a material adverse effect on our results of operations
2. 02We are dependent on sales of licensed products for a substantial portion of our revenues. In fiscal 2025, net sales of licensed product accounted for 48.0% of our net sales compared to 53.4% of our net sales in fiscal 2024 and 58.6% of our net sales in fiscal 2023
3. 03Any adverse change in our relationship with PVH and its Calvin Klein or Tommy Hilfiger brands, including as a result of the limited extension period of our license agreements for these brands, could have a material adverse effect on our results of operations
4. 04Our success is dependent on the strategies and reputation of our licensors
5. 05Our business and the success of our products could be harmed if we are unable to maintain or enhance the images of our proprietary brands
6. 06Use of social media and influencers may adversely affect our reputation or subject our proprietary brands to fines or other penalties
7. 07If our customers change their buying patterns, request additional allowances, develop their own private label brands or enter into agreements with national brand manufacturers to sell their products on an exclusive basis, our sales to these customers could be materially adversely affected
8. 08We have significant customer concentration, and a reduction in purchases or the loss of one of our large customers could adversely affect our business

Risks Relating to Our Retail Operations

1. 09Our retail operations may continue to incur losses if our retail turnaround strategy does not significantly improve the results of operations of our retail business
2. 10Leasing of significant amounts of real estate exposes us to possible liabilities and losses
3. 11Our retail stores are heavily dependent on the ability and desire of consumers to travel and shop. A reduction in the volume of outlet mall traffic could adversely affect our retail sales
4. 12Our digital business faces distinct risks, and our failure to successfully manage this business could have a negative impact on our profitability
5. 13If we lose the services of our key personnel, or are unable to attract key personnel, our business will be harmed
6. 14We have expanded our business through acquisitions and investments that could result in diversion of resources, an inability to integrate acquired operations and extra expenses. This could disrupt our business and adversely affect our financial condition
7. 15We may need additional financing to continue to grow
8. 16Our business is highly seasonal
9. 17Extreme or unseasonable weather conditions could adversely affect our business
10. 18Our ability to deliver our products to the market could be disrupted if we encounter problems affecting our logistics and distribution systems
11. 19In the past, supply chain disruptions have adversely affected our ability to import our product in a timely manner that allowed for timely delivery to our customers, caused elevated inventory levels and resulted in us incurring significant demurrage, labor and storage costs
12. 20shipping due to limited alternatives for moving goods. Our shipping costs to North America and Europe also continued to increase in the second half of fiscal 2025
13. 21Fluctuations in the price, availability and quality of materials used in our products could have a material adverse effect on our cost of goods sold and our ability to meet our customers’ demands
14. 22If we inadequately protect, maintain and enforce our trademark and other intellectual property rights, or infringe the intellectual property rights of third parties, our business could be harmed
15. 23We are subject to the risk that our partners may not generate expected sales or maintain the value of our brands
16. 24Recent and future economic conditions, including volatility in the financial and credit markets, inflation and increases in interest rates, may adversely affect our business
17. 25The cyclical nature of the apparel industry and uncertainty over future economic prospects and consumer spending could have a material adverse effect on our results of operations
18. 26The competitive nature of our industry may result in lower prices for our products and decreased gross profit margins
19. 27If major department, mass merchant and specialty store chains consolidate, continue to close stores or cease to do business, our business could be negatively affected
20. 28The effects of war, conflicts in Ukraine and the Middle East, acts of terrorism, natural disasters or public health crises could adversely affect our business and results of operations
21. 29the conflicts in Ukraine and the Middle East could have a material adverse effect on our business and our results of operations

Risks Related to Our International Operations

1. 30We are dependent upon foreign manufacturers
2. 31We have foreign currency exposures relating to buying and selling in currencies other than the U.S. dollar, our functional currency
3. 32We are subject to numerous risks associated with international operations

Risks Related to Cybersecurity, Data Privacy and Information Technology

1. 33Laws on privacy continue to evolve, and place further limits on how we collect or use customer information could adversely affect our business
2. 34We are subject to rules relating to the processing of credit card payments. Failure to comply with these rules could result in an ability to process payments which would adversely affect our retail business
3. 35Our systems, and those of our third-party vendors, containing personal information and payment data of our customers, employees, and other third parties could be breached, which could subject us to adverse publicity, costly government enforcement actions or private litigation, and expenses
4. 36A data security or privacy breach could adversely affect our business
5. 37Artificial intelligence presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data

Legal and Regulatory Risks

1. 38Changes in trade policies and tariffs imposed by the United States government and the governments of other nations could have a material adverse effect on our business and results of operations
2. 39Changes in tax legislation or exposure to additional tax liabilities could impact our business
3. 40legislation in the jurisdictions in which we operate. A material change in tax laws or policies, or their interpretation, related to the Pillar Two Model Rules could result in a higher effective tax rate and have an adverse effect on our financial condition, results of operations and cash flows
4. 41We are subject to significant corporate regulation as a public company and failure to comply with applicable regulations could subject us to liability or negatively affect the market price of our securities
5. 42The national security law implemented in Hong Kong may result in disruptions to our business operations in Hong Kong and additional tariffs and trade restrictions
6. 43The price of our common stock has fluctuated significantly and could continue to fluctuate significantly
7. 44Our actual financial results might vary from our publicly disclosed financial forecasts
8. 45The focus by stakeholders on corporate responsibility issues, including those associated with environmental, social and governance issues, as well as matters of significance related to sustainability, could result in additional costs or risks and adversely impact our reputation

Risks Related to Our Indebtedness

1. 46Our indebtedness could have a material adverse effect on our financial condition and our ability to obtain financing in the future and to react to changes in our business
2. 47Any debt we incur in the future could limit our ability to satisfy our obligations, limit our ability to operate our business and impair our competitive position
3. 48We may not be able to generate sufficient cash to service all of our indebtedness, including the ABL Credit Agreement, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
4. 49Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly
5. 50Our credit rating and ability to access well-functioning capital markets are important to our ability to secure future debt financing on acceptable terms. Our credit ratings may not reflect all risks associated with our indebtedness