G-III Q1 Loss Expands Due to Acquisitions

G-III Apparel Group, Ltd. fiscal 2007 first quarter net sales were $14.4 million with a net loss of $8.9 million, or 72 cents per share, compared to net sales of $13.8 million and a net loss of $4.7 million, or 43 cents per share, during the comparable period last year. As expected, the seasonal loss in the first quarter was higher than last year primarily due to the inclusion of the results of the companies acquired in July 2005, as well as higher interest expenses and depreciation and amortization costs relating to these acquisitions.

All share and per share data have been retroactively adjusted for the Company’s three for two stock split effective March 28, 2006.

Morris Goldfarb, G-III’s Chief Executive Officer, said, “This was an important quarter for us. We built our order book at a solid pace and continued to execute our new initiatives. We are well positioned for the upcoming fall season and are excited by the broad-based strength evident in our business.”

Mr. Goldfarb continued, “Our new initiatives include Calvin Klein women’s suits and dresses, urban young men’s and boy’s sportswear under Wal-Mart’s Exsto brand and Sean John women’s sportswear. With these new initiatives, strength in our existing coat business for Calvin Klein and Sean John, as well as other new private label programs, we continue to make in-roads with key retailers in each tier of distribution. We believe that we are creating growth opportunities in many product categories as we transform our business.”

Mr. Goldfarb concluded, “As we look to the future, we believe that our growth opportunities have never been more compelling as we strive towards our goal of building an all-season diversified apparel company that will enable us to generate additional value for our shareholders.”

For the second quarter ending July 31, 2006, the Company is forecasting net sales of approximately $60 million and a net loss per share between 30 cents and 35 cents. In last year’s second quarter, net sales were $54.6 million and net loss per share was 3 cents. As previously reported, assuming the Company had acquired Marvin Richards and Winlit as of February 1, 2004, the pro forma net loss per share for the second quarter last year was 41 cents and the pro forma net loss per share for the six month period ended July 31, 2005 was $1.09. These pro forma results do not purport to be indicative of the results which actually would have resulted had the two acquisitions occurred as of February 1, 2004.

The Company is reaffirming its previous guidance for the full fiscal year ending January 31, 2007. For the fiscal year ending January 31, 2007, the Company is forecasting net sales of approximately $400 million and diluted net income per share between 58 cents and 62 cents. This compares to a fiscal 2006 diluted net income per share of 58 cents.

The Company continues to project EBITDA to increase 25% to 30%, or to approximately $25 to $26 million, up from $20.1 million in fiscal 2006.

When comparing guidance for the second quarter and full fiscal 2007 to results for the comparable periods in fiscal 2006, the Company noted that it completed two acquisitions in July 2005. As a result, the Company’s second quarter and full year results for fiscal 2006 exclude seasonal losses by the acquired companies in the first half of fiscal 2006, as well as the higher interest expenses and depreciation and amortization costs in fiscal 2007 relating to the acquisitions.

              G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
                             (NASDAQ:GIII - News)
               CONSOLIDATED STATEMENTS OF OPERATIONS AND
                      SELECTED BALANCE SHEET DATA

          (in thousands, except share and per share amounts)
                              (Unaudited)

                                                First Quarter Ended
                                                     April 30,
                                             -------------------------
                                                 2006         2005
                                             ------------ ------------

Net sales                                        $14,389      $13,767

Cost of sales                                     13,710       12,852
                                             ------------ ------------

Gross profit                                         679          915

Selling, general and administrative expenses      14,339        8,803

Depreciation and amortization                      1,084          300
                                             ------------ ------------

Operating loss                                   (14,744)      (8,188)
Interest income and financing charges, net           647            3
                                             ------------ ------------

Loss before income taxes                         (15,391)      (8,191)

Income tax benefit                                (6,541)      (3,522)
                                             ------------ ------------

Net loss                                         $(8,850)     $(4,669)
                                             ============ ============

Net loss per common share:

 Basic and Diluted                                $(0.72)     $(0.43)*
                                             ============ ============

Weighted average number of common shares
  outstanding                                 12,207,000   10,928,000*