Perry Ellis International, organized in 1967, is a global leader in the design,
manufacturing, marketing and distribution of branded lifestyle apparel and accessories.
We are one of the largest apparel companies in the world with a portfolio consisting
of nationally and internationally recognized lifestyle brand names, some of
which have a heritage dating back over 100 years.
We sell our products under our owned global brands, licensed brands and private
retailer labels. Our owned brands include the global designer lifestyle brands,
Perry Ellis® and Original Penguin ® by Munsingwear ® (“Original
Penguin”) as well as Ben Hogan ®, Cubavera ®, Farah ®, Grand
Slam ®, Jantzen ®, Laundry by Shelli Segal ®, Rafaella ® and
Savane ®. We license the Callaway Golf® brand, PGA TOUR® brand,
and the Jack Nicklaus® brand for golf apparel, the Jag® brand for swimwear
and cover-ups and the Nike® brand for swimwear and accessories.
We have four reportable segments – Men’s Sportswear and Swim, Women’s
Sportswear, Direct-to-Consumer, and Licensing – and we have a strategically
diversified global distribution network focused on leading department stores,
company-operated retail stores, specialty stores and select licensing partners.
We distribute our products primarily to wholesale customers that represent all
major levels of retail distribution including department stores, national and
regional chain stores, mass merchants, specialty stores, sporting goods stores,
the corporate wear market, e-commerce, as well as clubs and independent retailers,
in North America and Europe. Our largest customers include Walmart Stores Inc.,
which includes Sam’s Wholesale Club (“Sam’s”) together
(“Walmart”), The Marmaxx Group, and Macy’s, Inc. (“Macy’s”).
We also distribute through our own retail stores. As of April 1, 2016, we operated
41 Perry Ellis, 12 Original Penguin and two multi-brand retail outlet stores
located primarily in upscale retail outlet malls across the United States, United
Kingdom and Puerto Rico. As of April 1, 2016 we also operated three Perry Ellis,
two Cubavera, 16 Original Penguin and one multi-brand full price retail stores
located in upscale demographic markets in the United States and United Kingdom.
In addition, we leverage our design, sourcing and logistics expertise by offering
a limited number of private label programs to retailers.
The revenue generated through our licensing business, which we license to third
parties for certain production, sales and/or distribution rights through geographic
licensing arrangements is a significant contributor to our operating income
and our arrangements heighten the overall awareness of our brands without requiring
us to make capital investments or incur additional operating expenses.
Leadership position in the Men’s Wholesale business. We believe that
our established relationships with retailers allow us to maximize the selling
space dedicated to our products, monitor our brand presentation and merchandising
selection, and proactively introduce new brands and products. Because of our
quality brands and products, dedication to customer service, design expertise
and sourcing capabilities, we have developed and maintained long-standing relationships
with our largest customers. In addition, we are engaged in wholesale growth
initiatives that are designed to transform our respective brands’ displays
at select department stores into branded “shop-in-shops.” By installing
customized freestanding fixtures, wall casings and components, decorative items
and flooring, as well as deploying specially trained staff, we believe that
our shop-in-shops provide department store consumers with a more personalized
shopping experience than traditional retail department store configurations.
Growing Licensing business. The strengths of our brands have been instrumental
in helping us build our global licensing business. We collaborate with over
120 high-quality product licensees who produce and sell what we believe are
products requiring specialized expertise that are enhanced by our brands’
respective strengths. We provide support to these business partners and ensure
the integrity of our brand names by taking an active role in the design, quality
control, advertising, marketing and distribution of licensed products.
Continue to strengthen the competitive position and recognition of our lifestyle
brands. We intend to continue growing brand awareness and customer loyalty in
North America and internationally, in a number of ways including by:
Managing our brands individually, and developing a distinctive merchandising
and marketing strategy for every product category and distribution channel.
Opening new retail stores in key geographical locations.
We maintain our advertising position in global fashion publications, participation
in trade shows, event and celebrity sponsorships, cooperative advertising in
print and broadcast media, as well as growing our online advertising exposure
and internet presence directly to consumers.
Increasingly using e-commerce, digital, social media, and mobile applications
to both support the initiatives of our wholesale partners as well as interact
with our customers in order to enhance the shopping experience. We are investing
in initiatives to provide attractive, effective, reliable, user-friendly e-commerce
platforms that offer a wide assortment of merchandise with rapid delivery options
that continually meet the changing expectations of online shoppers. In addition,
we have built a state of the art photography studio to provide greater creative
functionality.
We partner with leading wholesale customers in national and regional department,
chain, mass market, specialty and independent stores in North America and Europe.
These longstanding relationships enable us to access large numbers of our key
consumers in a targeted manner. In addition, we are engaged in wholesale growth
initiatives such as advertising support in the form of point-of-sale fixtures
and signage to enhance the presentation and brand image of our products. We
also participate in shop-in-shops which are the primary component of our retail
marketing strategy to increase and brand floor space dedicated to our products
within our major retail accounts. The design and funding of our concept shops
within our major retail accounts has been a key initiative for securing prime
floor space, educating the consumer and creating an exciting environment for
the consumer to experience our branded products. Our shops enhance our brand’s
presentation within our major retail accounts with a shop-in-shop approach,
using dedicated floor space exclusively for our products, including flooring,
lighting, walls, displays and images. We participate in incentive programs with
our retailer customers, including customer loyalty, discounts, allowances and
cooperative advertising funds. We also offer sales incentive programs directly
to consumers through our “Supreme Perks” Loyalty Program which targets
consumers in our direct-to-consumer channel.
The strength and agility of our global brands has been instrumental in helping
us expand our licensing business. We collaborate with a select number of product
licensees who produce and sell products requiring specialized expertise that
are enhanced by our brands’ strengths. In addition, we have entered into
agreements with non-manufacturing licensees who have particular expertise in
the distribution of our products in countries and geographic territories such
as South Korea, the Philippines, the Middle East, China, South Africa, Latin
America and the Caribbean.
Expand our product offerings. We have been a leader in men’s apparel for
over 40 years and believe we can continue to grow this business by leveraging
our expertise and experience in design and manufacturing in our relationships
with leading retailers, and in our sourcing capabilities to expand to new product
categories by capitalizing on our brands’ strong awareness and loyalty
among consumers. We can both optimize our strong business opportunities and
attract new customers to our brands. For example, this year our product offerings
within Perry Ellis expanded to include “athleisure” components under
Perry Ellis 360°. The line incorporates performance fabrics, reflective
tape and materials that provide function and versatility.
Grow our Direct-to-Consumer channel. We seek to expand and leverage the high
gross margin direct-to-consumer channel, which includes e-commerce, outlet stores
and full-price stores, and where we control all aspects of the operation, thereby
complementing our wholesale business. This business segment operates under a
single operating group to ensure our omni-channel operations are interdependent.
This has enabled our company to increase comparable store sales with a number
of initiatives already under way to increase the size and frequency of purchases
by our existing customers and to attract new customers. Such initiatives include,
among others, maximizing productivity with existing stores, creating compelling
store environments and offering new products, including menswear, small leather
goods, and active footwear.
E-commerce is our fastest growing direct-to-consumer channel. As a complement
to our wholesale business, we currently market Perry Ellis, Original Penguin,
Farah, Rafaella, Cubavera and Callaway Golf Apparel products online in the United
States and internationally. We are continuing to enhance the online capabilities
and functionality of our e-commerce sites to improve the shopping experience
and increase sales. At the same time, these enhancements enable us to expand
the number of countries to which we are able to ship. In addition, we plan to
continue servicing our indirect e-commerce channel platforms for our retail
partners by further investing in product presentation and selling capabilities
to strengthen the competitive position and image of our current brands on their
respective websites.