GIII

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How GIII rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

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The risks discussed below also include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements. Risk Factors Relating to Our Wholesale Operations The failure to maintain or renew our material license agreements could cause us to lose significant revenues and have a material adverse effect on our results of operations. We are dependent on sales of licensed products for a substantial portion of our revenues.
In fiscal 2026, net sales of licensed product accounted for 43.0% of our net sales compared to 48.0% of our net sales in fiscal 2025 and 53.4% of our net sales in fiscal 2024. We are generally required to achieve specified minimum net sales, make specified royalty and advertising payments and receive prior approval from the licensor as to all design and other elements of each product prior to production.
The failure to maintain or renew our material license agreements could cause us to lose significant revenue and have a material adverse effect on our results of operations. Our success is dependent on the strategies and reputation of our licensors. We strive to offer our products on a multiple brand, multiple channel and multiple price point basis.
To the extent that any of our key customers reduces the number of its vendors and, as a result, reduces or eliminates purchases from us, there could be a material adverse effect on us. We have significant customer concentration, and a reduction in purchases or the loss of one of our large customers could adversely affect our business. Our ten largest customers, all of which are department stores or off price accounts, accounted for approximately 67.6% of our net sales in fiscal 2026, with the Macy’s Inc. group (which includes sales to Macy’s and Bloomingdale’s store chains) accounting for approximately 20.6% of our net sales in fiscal 2026.
TJX Companies accounted for approximately 11.4% of our net sales in fiscal 2026.
In addition, sales to Ross Stores accounted for an aggregate of 11.0% of our net sales in fiscal 2026.
The loss of any of our large customers, the reduction in stores operated by a large customer or the bankruptcy or serious financial difficulty of any of our large customers, could have a material adverse effect on us. Risks Relating to Our Retail Operations Our retail operations may continue to incur losses if our retail turnaround strategy does not significantly improve the results of operations of our retail business. Our retail operations segment reported an operating loss of $5.0 million in fiscal 2026, $14.0 million in fiscal 2025 and $30.5 million in fiscal 2024.
A reduction in the volume of outlet mall traffic or the closing of outlet malls could adversely affect our retail sales. Substantially all of the stores in our retail operations segment are operated as outlet stores and located in larger premium outlet centers, many of which are located in, or near, vacation destinations or away from large population centers where department stores and other traditional retailers are concentrated.
Other factors that could affect the success of our outlet stores include: ● the location of the outlet mall or the location of a particular store within the mall; ● the other tenants occupying space at the outlet mall; ● increased competition in areas where the outlet malls are located; ● a downturn in the economy generally or in a particular area where an outlet mall is located; ● the shift to online shopping; ● a downturn in foreign shoppers in the United States; ● closure of the outlet malls; and ● the amount of advertising and promotional dollars spent on attracting consumers to outlet centers. Sales at our outlet stores are derived, in part, from the volume of traffic at the malls where our stores are located.
Goldfarb and any negative market or industry perception arising from the loss of his services could have a material adverse effect on us and the market price of our common stock. We also depend on the service and management experience of other key executive officers and members of senior management who have substantial experience and expertise in our industry and our business and have made significant contributions to our growth and success.
Any changes in our executive and senior management team may be disruptive to, or cause uncertainty in, our business and future strategic direction.
The departure of any key individual and the failure to ensure a smooth transition and effective transfer of knowledge involving senior employees could hinder or delay our strategic planning and execution, as well as adversely affect our ability to attract and retain other experienced and talented employees.
The success of our business also depends on our ability to attract and retain an adequate number of qualified employees to operate our retail stores and distribution centers and to perform various corporate functions. Competition in our industry to attract and retain employees is intense and is influenced by our reputation, our ability to offer competitive compensation and benefits, and economic conditions, among other factors.
Furthermore, the retail industry (among others) has experienced, and could again experience in the future, overall labor shortages resulting from a combination of pandemic diseases, labor disputes, strikes, and other factors.
The introduction of new work arrangements and company-specific requirements regarding when and how often employees are required to work on-site versus remotely may also impact companies’ ability to attract and retain employees.
As companies increasingly allow employees to work remotely, traditional geographic competition for talent may change in ways that we cannot predict. We have expanded our business through acquisitions and investments that could result in diversion of resources, an inability to integrate acquired operations and extra expenses.
Our most recent material minority investment was in AWWG, which we account for as an equity method investment as of January 31, 2026.
Net sales during the third and fourth quarters accounted for approximately 60% of our net sales in fiscal 2026.
Any difficulties we may encounter during the second half of the year as a result of weather or disruption of manufacturing or transportation of our products will have a magnified effect on our results of operations for the year.
If we encounter problems affecting our distribution system, our ability to meet customer expectations, manage inventory, complete sales and achieve operating efficiencies could be materially adversely affected. Supply chain disruptions have adversely affected, and could continue to adversely affect, our ability to import our products in a timely manner and our freight costs. The global supply chain continues to be negatively impacted by various factors, including the ongoing disruptions in the Middle East and the reciprocal tariffs imposed across all countries.
The latest developments as it relates to Iran has added further uncertainty to our supply chain operations.
Conflicts in the Middle East continue to cause major disruptions to global supply chains by impacting critical shipping routes through the Suez Canal and Red Sea for cargo, adding time and cost to shipments.
The escalation of these conflicts as a result of the latest developments in Iran may further negatively impact the timely receipt of inventory as well as increase our shipping costs. The imposition of tariffs by the U.S. government and certain foreign jurisdictions, along with geopolitical tensions, have created an uncertain environment for global trade.
In February 2026, the Supreme Court of the United States ruled against the current administration’s use of the International Emergency Economic Powers Act to impose certain tariffs levied in 2025.
While we have taken action to preserve our rights, there remains substantial uncertainty regarding the impacts of this decision on the availability, timing, and amount of potential refunds, if any, for the invalidated tariffs, the scope and duration of newly announced tariffs, and the possibility of further additional or modified tariffs or retaliatory actions.
Subsequent to the Supreme Court decision, the administration announced a new global tariff of 10% effective February 24, 2026, under a different statute (Section 122 Trade Act of 1974) which will expire in 150 days unless renewed by Congress. If we are unable to mitigate these challenges as well as potential future supply chain disruptions, our ability to meet customer expectations, manage inventory and complete sales could be materially adversely affected.
We have implemented price increases on many of our products in an effort to mitigate the effect of higher costs.
Continued high rates of inflation, including as a result of tariffs, in the future could result in a reduction of consumer demand and increased promotional activity, as well as increases in our operating costs. The Federal Reserve increased interest rates several times in fiscal 2024 in response to concerns about inflation.
Though the Federal Reserve decreased interest rates in both fiscal 2025 and fiscal 2026, it is unclear whether the Federal Reserve will reduce, increase or maintain the current rates in the future.
Higher interest rates increase the cost of our borrowing under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending.
If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, or at all.
We cannot be certain that any additional required financing, whether debt or equity, will be available in amounts needed or on terms acceptable to us, if at all. The 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. The apparel industry is cyclical.
In addition, we compete with other companies in the apparel industry on the basis of investments in technology and adapting to changes in technology, including the successful use of data analytics and artificial intelligence. If major department, mass merchant and specialty store chains consolidate, continue to close stores or cease to do business, our business could be negatively affected. We sell our products to major department, mass merchant and specialty store chains.
Various customers of ours, including Macy’s, have reduced their store footprint.
Macy’s plans to close a total of 150 underperforming stores through 2028.
Others have filed for bankruptcy in recent years, including Hudson’s Bay Company, which liquidated in 2025 and the recent bankruptcy filing by Saks Global.
Continued store closings could adversely affect our business and results of operations.
These types of decisions by our key customers could adversely affect our business. The 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. The conflicts in Ukraine and the Middle East, including the latest developments in Iran, and the continued threat of terrorism, heightened security measures and military action in response to acts of terrorism or civil unrest has, at times, disrupted commerce and intensified concerns regarding the United States and world economies.
Accordingly, these types of events could have a material adverse effect on our business and our results of operations. Our ability to anticipate and respond to changing customer preferences and shifts in fashion and industry trends in a timely manner could have a material adverse effect on our business, financial condition and results of operations. Our success largely depends on our ability to consistently gauge tastes and trends and provide a balanced assortment of merchandise that satisfies customer demands in a timely manner.
We enter into agreements to manufacture and purchase our merchandise well in advance of the applicable selling season and our failure to anticipate, identify or react appropriately in a timely manner to changes in customer preferences, tastes and trends and economic conditions could lead to, among other things, missed opportunities, excess inventory or inventory shortages, markdowns and write-offs, all of which could negatively impact our profitability and have a material adverse effect on our business, financial condition and results of operations.

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Gone since FY2025

The risks discussed below also include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements. Risk Factors Relating to Our Wholesale Operations The 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. We 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. We are generally required to achieve specified minimum net sales, make specified royalty and advertising payments and receive prior approval from the licensor as to all design and other elements of each product prior to production.
The failure to maintain or renew our material license agreements could cause us to lose significant revenue and have a material adverse effect on our results of operations. Any 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. We have license agreements relating to a variety of products sold under the Calvin Klein and Tommy Hilfiger brands, both of which are owned by PVH.
Net sales of products under the Calvin Klein and Tommy Hilfiger brands constituted approximately 34.0% of our net sales in fiscal 2025 and approximately 41.0% of our net sales in fiscal 2024. The licenses for Calvin Klein and Tommy Hilfiger products expire on a staggered basis beginning on December 31, 2024 and continuing through December 31, 2027.
The licenses for Calvin Klein (Women’s better sportswear) and Calvin Klein Jeans (Women’s jeanswear) expired on December 31, 2024.
See the table in “Complementary Portfolio of Licensed Brands” above for information with respect to the current terms of the remaining agreements. PVH has indicated publicly that it will produce these Calvin Klein and Tommy Hilfiger products itself once these license agreements expire.
Unless we are able to increase the sales of our other products, acquire new businesses and/or enter into other license agreements covering different products, the limited extension period of the amended Calvin Klein and Tommy Hilfiger license agreements could cause a significant decrease in our net sales and have a material adverse effect on our results of operations.
As we manage the partnership with PVH through this transition and expiration of the licenses, any adverse change in our relationship could have a material adverse effect on our results of operations. Our success is dependent on the strategies and reputation of our licensors. We strive to offer our products on a multiple brand, multiple channel and multiple price point basis.
To the extent that any of our key customers reduces the number of its vendors and, as a result, reduces or eliminates purchases from us, there could be a material adverse effect on us. We have significant customer concentration, and a reduction in purchases or the loss of one of our large customers could adversely affect our business. Our ten largest customers, all of which are department stores or off price accounts, accounted for approximately 69.6% of our net sales in fiscal 2025, with the Macy’s Inc. group accounting for approximately 18.0% of our net sales in fiscal 2025.
TJX Companies accounted for approximately 13.2% of our net sales in fiscal 2025.
In addition, sales to Ross Stores accounted for an aggregate of 12.6% of our net sales in fiscal 2025.
The loss of any of our large customers, the reduction in stores operated by a large customer or the bankruptcy or serious financial difficulty of any of our large customers, could have a material adverse effect on us. Risks Relating to Our Retail Operations Our retail operations may continue to incur losses if our retail turnaround strategy does not significantly improve the results of operations of our retail business. Our retail operations segment reported an operating loss of $14.0 million in fiscal 2025, $30.5 million in fiscal 2024 and $33.6 million in fiscal 2023.
A reduction in the volume of outlet mall traffic could adversely affect our retail sales. Substantially all of the stores in our retail operations segment are operated as outlet stores and located in larger premium outlet centers, many of which are located in, or near, vacation destinations or away from large population centers where department stores and other traditional retailers are concentrated.
Other factors that could affect the success of our outlet stores include: ● the location of the outlet mall or the location of a particular store within the mall; ● the other tenants occupying space at the outlet mall; ● increased competition in areas where the outlet malls are located; ● a downturn in the economy generally or in a particular area where an outlet mall is located; ● the shift to online shopping; ● a downturn in foreign shoppers in the United States; and ● the amount of advertising and promotional dollars spent on attracting consumers to outlet centers. Sales at our outlet stores are derived, in part, from the volume of traffic at the malls where our stores are located.
Goldfarb and any negative market or industry perception arising from the loss of his services could have a material adverse effect on us and the market price of our common stock.
Our other executive officers have substantial experience and expertise in our business and have made significant contributions to our success.
The unexpected loss of services of one or more of these individuals or the inability to attract key personnel could also adversely affect us. We have expanded our business through acquisitions and investments that could result in diversion of resources, an inability to integrate acquired operations and extra expenses.
Our most recent material minority investment was in AWWG, which we account for as an equity method investment as of January 31, 2025.
Net sales during the third and fourth quarters accounted for approximately 61% of our net sales in fiscal 2025.
We are highly dependent on our results of operations during the second half of our fiscal year.
Any difficulties we may encounter during this period as a result of weather or disruption of manufacturing or transportation of our products will have a magnified effect on our results of operations for the year.
If we encounter problems affecting our distribution system, our ability to meet customer expectations, manage inventory, complete sales and achieve operating efficiencies could be materially adversely affected. Supply chain disruptions have adversely affected, and could continue to adversely affect, our ability to import our products in a timely manner and our freight costs. In 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. In fiscal 2024, the Panama Canal experienced severe drought conditions which forced the canal to reduce the number of vessels transiting through it on a daily basis by approximately one-third.
In addition, conflicts in the Middle East have caused major disruptions to global supply chains by impacting critical shipping routes through the Suez Canal and Red Sea for cargo, adding time and cost to shipments.
Transit times have increased to destinations on the East Coast of the United States and Europe, which may result in increased transportation costs. In the first half of fiscal 2025, as the conditions at the Panama Canal started improving, port congestion and capacity shortages in Asia began to disrupt container shipping.
Transit times and transportation costs have increased to destinations on the East Coast of the United States and Europe.
In the second half of fiscal 2025, the global supply chain was also negatively impacted by recent and threatened port strikes on the East Coast of the United States, Gulf Coast and in Canada, as a result of which we have experienced some shipping delays, impacting the timing of inventory receipts.
Additional tariffs on Chinese imports have increased costs for importers, which has impacted demand and has affected ocean container shipping 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. If we are unable to mitigate these challenges as well as potential future supply chain disruptions, our ability to meet customer expectations, manage inventory and complete sales could be materially adversely affected.
Beginning in fiscal 2023, we have implemented price increases on many of our products in an effort to mitigate the effect of higher costs.
Continued high rates of inflation, including as a result of tariffs, in the future could result in a reduction of consumer demand and increased promotional activity, as well as increases in our operating costs. The Federal Reserve increased interest rates several times in fiscal 2024 in response to concerns about inflation, and began to decrease interest rates in fiscal 2025.
It is unclear whether the Federal Reserve will reduce, increase or maintain the current rates in the future.
Higher interest rates may increase the cost of our borrowing under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending.
If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, or at all. The 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. The apparel industry is cyclical.
In addition, we compete with other companies in the apparel industry on the basis of investments in technology and adapting to changes in technology, including the successful use of data analytics. If major department, mass merchant and specialty store chains consolidate, continue to close stores or cease to do business, our business could be negatively affected. We sell our products to major department, mass merchant and specialty store chains.
Various customers of ours, including Macy’s and Kohl’s, have reduced their store footprint and others have filed for bankruptcy in recent years, including the recent bankruptcy filing by Hudson’s Bay Company.
Macy’s also continues to confirm its planned closure of 150 stores through 2027.
Store closings could adversely affect our business and results of operations.
These types of decisions by our key customers could adversely affect our business. The 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. The conflicts in Ukraine and the Middle East, and the continued threat of terrorism, heightened security measures and military action in response to acts of terrorism or civil unrest has, at times, disrupted commerce and intensified concerns regarding the United States and world economies.
Accordingly, these types of events could have a material adverse effect on our business and our results of operations. Risks Related to Our International Operations We are dependent upon foreign manufacturers. We do not own or operate any manufacturing facilities.
In February 2025, the current administration imposed an additional 10% tariff on imports from China beyond the previous 25% tariff that was already in place.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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