At a recent conference in New York, Chief Operating Officer Wayne Miller and Chief Financial Officer Neal Nackman said they are focusing on women's wear businesses with sales of $100 million to $1 billion.
The "sweet spot" for G-III would be sales of around $500 million, and although women's apparel would be the most attractive, the company could consider other categories, Miller and Nackman said. And G-III has the balance sheet to make deals.
With about $200 million in annual Ebitda (earnings before interest, taxes, depreciation and amortization), the company could borrow up to four times that amount, or about $800 million, and still remain investment grade, according to an industry source. G-III listed no debt and nearly $86 million in cash in a 10-Q filed with the Securities and Exchange Commission on June 5.
G-III declined to comment on specific targets. The industry source said the potential acquirer was more likely to target wholesale brands that would fit well with the company's other businesses. One such target could be Anne Klein, the wholesale brand sold in major department stores and owned by New York-based private-equity firm Sycamore Partners, the source said. Less likely would be targets such as Nanette Lepore, which is considered too small for the likes of G-III, or banners such as Eddie Bauer, because those kinds of businesses are largely operating their own stores.