G-III Apparel Group to Acquire Marc Jacobs Operating Business in $500M Deal

summarizeSummary

G-III Apparel Group is acquiring the Marc Jacobs operating business for $500 million, forming a joint venture for the brand's intellectual property, a major strategic move expected to be dilutive initially but accretive long-term.

check_boxKey Events

• Acquisition of Marc Jacobs Operating Business

  G-III Apparel Group will acquire and manage the global operating business of the Marc Jacobs brand from LVMH.

• $500 Million Investment

  G-III will fund its approximately $500 million investment using cash on hand and borrowings under its revolving credit facility.

• Joint Venture for Intellectual Property

  A newly formed 50/50 joint venture with WHP Global will retain ownership of Marc Jacobs' intellectual property.

• Long-Term Licensing Agreement

  G-III will operate the Marc Jacobs business under a long-term exclusive license from the joint venture, with an initial term through December 2041 and multiple 5-year renewal options.

auto_awesomeAnalysis

G-III Apparel Group is making a significant strategic move by acquiring the global operating business of the iconic Marc Jacobs brand for approximately $500 million. This transaction, structured as a joint venture for intellectual property and a long-term licensing agreement for operations, aims to diversify G-III's portfolio and drive long-term value. While expected to be dilutive in the first year, the company anticipates accretion thereafter. This comes after a period of declining profitability and internal control issues, making the successful integration and performance of Marc Jacobs critical for G-III's future.