The US leather goods chain of stores is about to face plenty of closures: Wilsons Leather to cut distribution. The top managers of G-III Apparel Group, which is in control over the company, have announced they are going to start a reorganization plan, which will lead the group to the closure of 110 selling stores. As announced by the President himself, Morris Goldfarb, in most cases they will supposedly dissolve the rental agreement ahead of time.
Wilsons Leather to cut distribution
As publicly stated by the group, due to reorganization they will have to shut 110 selling stores directly managed by Wilsons Leather. Such restructuring action will concern retail sales, but will not affect the wholesale segment.
“While aiming to enhance the stock value, to the benefit of shareholders, we regretfully decided to shut all of Wilsons Leather and GH Bass selling stores – pointed out Goldfarb –. In our opinion, this reorganization plan will enable us to reduce considerably our current retail loss; besides that, we will succeed, in the end, in turning that segment profitable”. At the same time, the president of G-III Apparel Group emphasized that wholesale business activities “strictly” rely on the five top brands of the group, namely DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld, which “are bound to keep working as our main propeller to boost the company’s development and profits”.
In the quarter
The company announced its reorganization plan while making public, at the same time, data and figures about the first quarter of the new financial year (ended on 30th April).
Net sales decreased by 36.1% as they went down to 405.1 million dollars: last year, in the same period, earnings from sales amounted to 633.6 million dollars. Simultaneously, as highlighted by Goldfarb, “in our wholesale segment net revenues from sales reached, at the end of 2020 business year, over 2.86 billion dollars.
We can build up our expansion on a highly reliable basis: in addition, thanks to a simpler retail sale system, we are due to create a sound basis for our prospective business activity”.