USA: G-III Apparel Axes Indonesian Plant, Q3 Profit Up
The New York-based company, which has fashion licenses with Kenneth Cole Productions, Nine West Group, Timberland and Cole Haan, reported a net profit of $8.5 million versus $5m in the year-ago period.
It said sales in the 13 weeks to October 31 climbed 13 per cent to $102.3m from $90.6m in 2001 with nine month sales slipping to $155m from $170.7m last year.
G-III cited higher costs and “political and economic instability” in Indonesia for its decision to shut the plant which will result in a charge of up to $5m.
CEO Morris Goldfarb said: "We are very pleased with our third quarter results, particularly in the mid-tier and mass distribution channels. We achieved a higher level of shipments, kept our inventories clean, and executed well.
"Due to rapidly rising costs and political and economic instability in Indonesia, we have decided to close our factory in Indonesia. We estimate that our fiscal fourth quarter results will reflect a pre-tax charge in the range of $3m to $5.0m in connection with closing this facility.
"We believe that closing this facility will not affect our ability to produce product and will enable us to become more efficient in meeting our sourcing needs."
He added the company continues to see full-year sales of $190m but now expects to post lower earnings per share of 60 to 65 cents due to the charge associated with the Indonesia factory closure.
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