G-III Apparel Group, Ltd. (GIII), a clothing company, said on Monday that it has signed a deal to buy the remaining 81 percent interest in Karl Lagerfeld for 200 million euros or $210 million in cash. G-III, which currently owns 19 percent of the brand, will buy the additional stake from a group of private and public investors, led by Fred Gehring of Amlon Capital BV.
The acquisition is expected to moderately add to G-III’s fiscal scheduled to end in January, 2023 and be incrementally more accretive thereafter, the company said in a statement.
In addition, the transaction, scheduled to close in the second or third quarter of the fiscal year 2023, will allow the acquirer to become the sole owner of the Karl Lagerfeld brand.
Morris Goldfarb, G-III’s CEO, said, “… The addition of this iconic fashion brand to the G-III portfolio advances several of our key priorities, namely an increase in the direct ownership of brands and their licensing opportunities and further diversification of our global presence.”
The acquisition is also includes Karl Lagerfeld’s existing 10 percent stake in its established joint venture in China.
The company projects its move will add around $200 million in initial annual sales.
Combined with G-III’s revenues of $175 million reported for its fiscal ended in January from its existing Karl Lagerfeld business in North America, the acquisition is estimated to generate an initial annual revenue base of around $375 million.
G-III said that it expects that the combined revenues of G-III’s Karl Lagerfeld business and the acquired Karl Lagerfeld business represent an annual net revenue potential of around $1 billion or in excess of $2 billion in sales to end consumers.
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