Welcome to the G-III Apparel Group Third Quarter Fiscal 2016 Earnings Conference Call. My name is Loraine and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Mr. Wayne Miller, Chief Operator Officer. Mr. Miller, you may begin.

Thank you. Before we begin, I would like to remind participants that certain statements made on today’s call and in the Q&A session may constitute forward-looking statements within the meaning of the Federal Securities Laws. Forward-looking statements are not guarantees and actual results may differ materially from those expressed or implied in forward-looking statements. Important factors that could cause actual results of operations or the financial condition of the company to differ are discussed in the documents filed by the company with the SEC. The company undertakes no duty to update any forward-looking statements. In addition, during the call, we will refer to non-GAAP net income per diluted share and to adjusted EBITDA, which are both non-GAAP financial measures. We've provided reconciliations of these non-GAAP financial measures to GAAP measures in our press release and on our website. As a reminder, all share and per share data have been adjusted to give retroactive effect to a two for one split of our common stock effective on May 1, 2015. And now I'll turn the call over to our Chairman and Chief Executive Officer, Morris Goldfarb.

Good morning and thank you for joining us. Here with me today are Sammy Aaron, our Vice Chairman; Wayne Miller, our Chief Operating Officer; Neal Nackman, our Chief Financial Officer; and Jeff Goldfarb, our Director of Strategic Planning. We're pleased to report a really good third quarter. Our sales and profit growth is the result of a powerful strong brand portfolio, great execution and our market leadership position across a range of categories. We grew net sales to $910 million up 12% compared to last year. The increases were broad based. Our adjusted EPS for the third quarter reached $1.85 up 20% compared to a $1.54 last year. We're excited by the progress we've made on a number of important growth initiatives that will help us sustain a strong pace of sales and profit growth in fiscal 2017 and beyond. Before I detail the quarter and update you on our new business initiatives, I would like to comment briefly on our short term outlook, which we've updated to reflect primarily the impact of abnormally warm weather this fall and the soft retail traffic levels in outlet centers. We now expect to see full year adjusted EBITDA increase between 22% and 28% to $227 million to $238 million, compared to $186 million last year. Our revised guidance for adjusted EPS is now $2.65 to $2.80 per share. This is projected increase between 17% and 24% compared to the $2.26 we reported last year. While the weather is going to make for a tougher coat season this year, it is manageable. We expect to end the season with clean inventories and acceptable margins, both for us and for our retail partners. Our expectation for full year double-digit top-line growth with nearly twice that rate on the bottom line continues to show a…

Thank you, Morris. Net income for the third quarter ended October 31, 2015, was $87.2 million or $1.87 per diluted share compared to $80.6 million or $1.76 per diluted share in last year's third quarter. Included in our net income in the current quarter is approximately $1 million of other income equal to $0.02 per diluted share, which consists of the reduction of the estimated contingent consideration payable in connection with the acquisition of Vilebrequin. Our prior year's third quarter other income was approximately $12 million or $0.22 per diluted share and primarily consisted of payments for the sale of the rights to operate Calvin Klein Performance stores in Asia, including the sale of the Company's interest in a joint venture that operated Calvin Klein Performance stores in China again in connection with the reduction of the estimated contingent consideration payable in connection with the acquisition of Vilebrequin and again with respect to the early extinguishment of debt at a discount constituting a portion of the consideration for the acquisition of Vilebrequin. On an adjusted basis excluding these items in the current and prior year's quarter, non-GAAP net income per diluted share was $1.85 for the quarter ended October 31, 2015, compared to a $1.54 in the prior year's third quarter. Net sales for the third quarter ended October 31, 2015 increased 12% to $909.9 million from $812.3 million in the same period last year. Net sales of wholesales operations increased 11.8% to $807 million from $722.1 million, primarily a result of increased sales of Calvin Klein license products with the largest increases incurring in handbags, women's outwear dresses and women's suites. In addition, we had increases in sales of our team sports license products of Ivanka Trump license products and private label programs and started shipping G.H. Bass wholesale…

Thanks Wayne. We've become one of the strongest companies in our industry. We're pleased to have reported a very good third quarter. An important part of our skill set is the ability to make decisive, accurate decisions that maximize the opportunity both for us and for our customers basically in any environment. Even with the revision to our forecast this will be another record year and we're positioned with the powerful growth initiatives as we move into fiscal 2017. We will continue to drive growth across a range of categories and brands in our portfolio. We expect to continue to grow organically and are positioned well to make appropriate acquisitions. Karl Lagerfeld is a great example of both as our G.H. Bass and Vilebrequin. Calvin Klein is another example of our ability to partner and drive value for a well established brand. From a starting point of only $36 million in 2005 this year we will do over $900 million up 15% from last year's $785 million with this great brand. We believe that we’re still in a phase of our overall development where strong top and bottom-line annual growth is in our plans for the next several years. Thank you, operator. Let's open it up for questions.

Thank you. [Operator Instructions] And our first question is from Erinn Murphy from Piper Jaffray. Erinn, your line is open.

Great, thank you good morning. Morris, I was hoping you could talk a little bit more about the guidance. A number of moving parts in the guidance, clearly the EPS moving down, but you did hold sales. So maybe two parts; on the gross margin, what are you implying in the range for the fourth quarter? And then on the sales, clearly there's some confidence in other parts of your portfolio despite having a bit of a soft start to the quarter with outerwear and some of the trends you're seeing in retail, so maybe speak to kind of what gives you that confidence to maintain the full year.

Well, There are two elements to it. One is retail, our own retail and the other is wholesale. And they're both on a course to achieve top line growth, the growth that we have forecasted. We have a major percentage of our inventory today is not coats. Its sportswear, dresses. It's the elements of footwear entering into our business, and so is handbags, so we're currently proportioned well in our inventory to achieve what we've set out to achieve. We don't see very much of a problem in moving our inventory. Our order book supports it. We're managing markdowns well and we believe that we can achieve the top line goal that we've set. On the retail front, the biggest part of Wilsons business, which is the -- I guess I'd describe it as more of the problem than Bass is, because it's driven by outerwear and we had a difficult third quarter with Wilsons. We see that opening up as weather improves in regions of the country. We’re seeing major improvements, so it’s not a product issue. We’ve modified our inventory as we saw a change, so we’re on track to achieve both margin and top line as we have forecasted.

Okay. That’s helpful and then may be just for Wayne on that gross margin for the fourth quarter and how should we be thinking about what's implied in your guidance?

My deal with Wayne was I would take the questions even though I wouldn't do the speech.

Okay, thanks Neal.

So the -- look I think that we’re going to have a little bit of gross margin pressure. I think that’s kind of what we’ve anticipated in the guidance for Q4. We do go into the quarter with some heavy or outerwear inventories and we’re going to want to move them. So, that’s really some of what we’ve built into our guidance right now.

Okay. And then I guess just on the outerwear piece, Morris you kind of referenced them already, but you said its manageable inventory, should be clean by year end. Are you some retailers -- are you seeing cancellations or are you just adjusting orders kind of interest fees and to kind of account for maybe the lower demand profile. Just help us think about what the relationship or the conversations are with retailers right now to clean up that business?

We saw a change in third quarter. We anticipated some cancellations and the same as retailers we had product that we directed differently overseas. We either had factory sold piece goods or began to sell off inventory early on to accommodate some of the cancellations or the pushbacks that we were getting. We have a staff of planners that evaluate retailer's business on a daily basis. As we get information, we process it and we respond. So we’ve been responding to seasonal fluctualities since early October.

Okay. And then just last question just on the buyback, could you just remind us when the last time was that you guys bought back stock? And then should we assume that with today’s announcement of increasing the authorization. So that mean that you’ll be in the market given where the stock price is currently? Thanks.

Last time we bought stock was about four years ago and the anticipation is if we see that our resources are better spent on buying our own stock, we’ll spend it. Today is not the day that I’m going to make that decision or the Board will make that decision, but I guess we’re armed to go.

Got it, great. Thank you guys and best of luck.

Thank you, Erinn.

Our next question comes from Ed Yruma from KeyBanc Capital. Ed your line is open.

Hi good morning. Thanks for taking my questions. I guess first on the markdown reserves, when you see weak sell-throughs like you do, do you take the markdown in the quarter and reserve against it? And can you maybe, I know you haven’t really talked about guidance for next year, but can you talk about how much of the change in markdown reserve might occur in the first quarter?

Well Ed the way we do that is for most of our businesses, we’ve actually got negotiated markdowns when we close our quarter. The only one that sort of lapses is the outerwear in this third quarter and for that -- and for this quarter what we do is we try to make an estimate of what we think the full year’s markdowns will be and that’s what we provided as we do the shipping in the third quarter. So the last part of your question in terms of carryover into the first quarter, no, we would not. We would expect that we would have fully accrued by the end of the year, the actual outerwear markdowns for the year for the full year.

Got it. You guys obviously had some positive commentary about dresses, sportswear, accessories. The department stores have obviously had some fairly weak commentary and discussion about having inventory levels. I guess how do you feel about your inventories in the channel on your non-outerwear business?

Our inventory is appropriate in non-outerwear businesses. We're best-in-class and pretty much all the classifications that we’re shipping. Our dresses are outperforming the department. We're best actually in most of our accounts. Our dresses are performing best and suit separates are the same way. So you might be reading that dress or a suit business is not doing well but if you dissect it and evaluate it by resource you will find that our brands are doing extremely well. The handbag business has grown and continues to show signs of dramatic growth going forward. We've grown our Calvin handbag business 30% this year with good margin for both us and the retailer. The reserves are appropriate. The sell-throughs are stellar and we’re pleased with the season. I think what we’re looking at right now is some climatic changes and a little bit of a blip for us in retail because of lack of tourism in our key stores. So short of that we’re fine. On the coat side, I think I would like to add that generally historically, coats are our best margin classification for our retailer's margin out extremely well and they’re doing fine right now. We're reserved -- we believe we're reserved appropriately for the future and along with cancellation some of what we’ve accrued for gift bags goes away. Cancellation doesn’t come from free. So we have good retail partners that do understand partnerships.

Okay. And one final follow-up on just kind of carrying to the last question or the last question, in terms of the share buyback, you guys did an opportunistic capital raise of little over a year ago; I think with the intention using it for acquisitions I guess at this point has your thought process on acquisitions changed vis-à-vis share repurchase. Thank you.

No, not at all. We're still very aggressive in seeking appropriate acquisitions. We spend a good deal of time looking at quality companies and they don’t all cross the finish line. We’re not going to make a foolish mistake on negotiating either a fair price or fair deal or for a good brand not necessarily in that order, but we're active in that area not less than we were a year ago, but if the opportunity today is to buy back stock because we see great value in our own equity we'll do that.

Great. Best of luck this holiday.

Thank you.

Our next question comes from Rick Patel from Stephens. Rick, your line is open.

Good morning, everyone and congrats on executing well in a tough environment. I’m hoping for a little bit more detail on inventories being up more than your anticipated sales growth. So is there a way to dissect how much of that represents growth in existing categories in branch versus new ones that you either launch recently or will launch this spring?

So Rick, we really haven't giving out that level of detail, but you’re absolutely right to the extent that we step into new businesses. We actually -- there is always a disproportional load in inventory to get those things up and running. Look overall our inventories are up 17%. We’re forecasting for the fourth quarter to be up about 15%. As I said before, the outerwear inventories are obviously ones we're the most sensitive to right now only because we've had such a unusual start to the season in terms of weather. But we think that on balance our goal we're starting to move our inventories at the end of the year to be more in line with the sales increases that we will expect going forward.

And I think recently Macy’s announced plans to close around 40 stores. I think these are supposed to be underperforming locations but I am sure there are still distribution points of yours. So can you talk about the negative impact you think this could have on 2016 results and what kind of headwind we should be baking in from a modeling perspective?

The closure of the 40 stores has a positive impact on us, not a negative impact. Those are the poor performing doors and those are the doors that when there is a vendor participation that’s needed, it’s generally to support these poor performing doors. So as Macy’s eliminates the underachievers, we’re fine with it. In our effort to be a good partner to the Macy’s we take on the challenge of doing well in their A stores as well as their B stores and their B stores are more of the challenge.

Great and then lastly can you just talk a little bit more about the Hilfiger opportunity? I’m curious if there is any way to frame how much this launch could be over the long term and is it safe to assume that the overarching strategy here is to extend this brand to new category licenses beyond dresses or do you think it’s going to remain focused in dresses for the foreseeable future.

Well, currently we have the coat business both men’s and ladies and we’ve just signed a dress business. To give you the scale of the coat business and Tommy Hilfiger at Macy's today, on the men’s side it's running pretty much neck in neck with Calvin Klein. The size of the business and obviously the demand for the brand seems to be equal to that of Calvin Klein. On the dress side, the classification side of the business in dresses has been very strong for us as a resource. We know how to make dresses. We know how to make the best dresses at the best price and now given another power brand we're very helpful that this is a brand that, can either come in number one or number two in our portfolio. And as far as the future, we’re always talking about and trying to get other classification. So, currently what we’re talking about the dress of Tommy Hilfiger and coats. And the women’s coat business is just entering into its own. It was a late arrival for us. This is -- this brand will pick up steam next year. In a tough coat environment, we’ve grown that brand and we anticipate at least a 25% growth in the women’s coat business for next year.

Thank you. Hope everyone has a great holiday.

Let me qualify it.

And our next question comes from Joan Payson from Barclays. Joan, your line is open.

Hi good morning, everyone. Could you talk a little bit about the broad environmental challenges in the department, mid-tier department store channel in particular, does that affect how you think about expansion into that channel and does it influence at all how you think about the plan for 20% EPS growth in fiscal '17 and beyond?

Well, we look at generally is the strength of what we have to offer to an environment that is not growing aggressively and what we believe is we have some very dominant brands that in difficult environments take a senior position. So at the department store level, if you’re going through a difficult time, you tend to eliminate the low Tier of your brand performance or brand importance and historically what’s happened is we’ve grown in difficult times with our power brands. So having several power brands in our portfolio gives us a strong belief that we’re going to prosper in the coming years with retailers with the mid-tier department store sector. So we’re not overly concerned about it. We’re doing all the appropriate things. You build good product at a good price and you deliver it on time and you’re a good partner to your customers, you tend to win and historically we have won. We’ve -- if I look back at the periods of GIII that were important to the growth there were difficult periods of time for overall retail. So I think the strength of our balance sheet and all the wonderful things that we do with product will enable us to grow.

Great. And you touched a little bit on the M&A opportunity, but has the environment and some of the pullbacks in valuation influence the M&A capability or opportunity at all in your ability to be acquisitive?

Unfortunately, I think valuations for us have changed as well. So we were trading at a different multiple and there might have been the thought of using our stock as a currency. Today I would tell you I wouldn’t look strongly at that. So valuations assuming that we stayed at the valuation we traded at and the rest of the world changed their valuations down it would be a better world for us. But we’re looking at opportunities. Valuations are fair. We’re not looking to steal the company. We’re looking to find a strong brand with good management that has opportunities that are consistent with what we look for and a lot of it I’ve just described to you just being a dominant brand that can sustain difficult times. So they're out there and we’ll find them and if not, they've been amazing amount of growth that's left in this company that we can achieve organically.

Great. And then just my last one is on G.H. Bass and Karl Lagerfeld since I think you've already begun selling those through and just if you could talk about the consumer reception to those so far?

The consumer reception for Karl Lagerfeld at both Dillard’s and at Lord & Taylor and the Bay has been exceptionally good. Our sportswear has done well. Our handbags which are barely in the stores for two weeks are doing well and the best is yet to come. This is our first delivery into the stores and we’ve got great real estate. We have customer support. Both the retailer and the consumer recognize the importance of this brand and we’re aggressive in building it. What we achieved that was a little bit more difficult in the past is we garnered some amazing talent from people like Ralph Lauren and Michael Coors and Jones New York where these companies were looking to streamline their labor force or they eliminated divisions of their business. We were lucky enough to get that talent. So we’ve got great talent on Board that’s doing nicely in building collections and selling into the department store and managing the business. So we’re very pleased with the Lagerfeld business. The Bass business we have a licensee on the men’s side, which is PVH. In a tough environment they are beating plan in men's. Their build-outs look great. If you have a chance to go to Harold Square I would encourage you to look at it. So they’re helping us to build this brand and for the first time we’re collecting royalties from them, which is not a bad thing. We launched the women side of Bass. We’ve build out a 150 doors. We're in Dillard’s. We're in Macy's. We're in Lord & Taylor and we’re learning the brand. The first deliveries were just okay. We weren’t extremely pleased with the performance, but as usual we fixed some pieces that need to fix. Genesco is the licensee for the footwear piece of our business at Bass and they're best-in-class provider of footwear. What we’re doing right now is we're liquidating some of the inventory from a prior licensee whose last month as a licensee is this month and Genesco takes over for future distribution. We have some strong initiatives in place for Bloomingdale’s. All the department stores are on Board to buy the product from Genesco, which was a different story a year ago and we’re building an aggressive advertising campaign as we speak. The brand is very, very much in demand. So as we match up the product or the demand I think we’re going to have a very good year with it.

Okay. Thank you and happy holidays to everyone.

Thank you, Joa8n. Same to you.

Our next question comes from Eric Beder from Wunderlich. Eric, your line is open.

Good morning. Congratulations on the quarter. When you look at licensing categories you are in and the expansions you’ve done, do you want to find even more -- how aggressive are you going to be looking for other licenses in key categories like handbags and sportswear going forward or is it a goal to buy more of that product in terms of the brands?

Well we’re launching another handbag brand, a very important handbag brand, which Karl Lagerfeld. And so the fact that we have less of runway left with Calvin Klein and we’ve now have an equity stake in Karl Lagerfeld we have two power brands to build on that’s an awful lot. Historically our model in the outerwear business we would look at outerwear brands and say, if we can sign on brands that can do $30 million in wholesale sales we’ve got a pretty good model if we have eight or 10 brands. The coat business really caps out, I can’t think of very many brands that do $100 million in wholesale sales. I can't think of many handbag businesses that do $300 million to $500 million in sales and I think in our hands, we have the potential with two brands to build sizeable businesses. So we’re not aggressively looking for small pieces of business call it the $30 million range of businesses to back on as licenses and again, our first goal is to acquire -- to acquire brands. If we can afford them and if they’re right I would rather own and rent in this environment. And again speaking to the size of classifications, we have sportswear initiatives that are in the same scale as the handbag businesses can be. We’re growing our Calvin business every year. We’re north of $150 million in sales in Calvin Sportswear and we believe that Karl Lagerfeld has got the ability again of being a very large business. So we’re not necessarily tackling small initiatives to add on to our portfolio. Yet if a large initiative came around, yeah we would consider it strongly.

Great and when you look at the Bass business, I know you had double-digit comps in the first half and Q2 is a little bit less. When you look at that, do you still feel very confident that you can get back to the level and kind of get it to the level of success in terms of profitability and sales per square foot that you had at or have at Wilson?

Oh yeah very much so. I think it will be better. It’s a heritage brand. It’s much more recognized. I think the problem that we have at Bass is that we haven’t gotten the footwear right yet. We’re in the middle of -- we’re kind of in the middle of an old licensee where we've bought product from our own retail stores. We’ve hired new management to develop footwear. We've aggressively spilled out a resource structure to support the needs. We’re making a much better quality shoe for the future. If you look at the performance in Bass for the apparel, the apparel in our Bass stores is comping up north of 25% to last year. The footwear is more the issue and I think we’ve solved that problem. So we’ve got a little bit of a weather issue. Our boots are not selling the way they need to, but the fact that we’ve gotten the quality right, we’ve gotten the styling right and we’ve built the resource structure going forward, gives me great confidence that we’re on track to build an important brand. As soon as we get that done, we'll build several flagships to showcase what we would like our retail customers to buy.

Great. Thank you and congrats and good luck on the holiday season.

Thank you.

Same to you.

Our next question comes from David Glick from Buckingham Research. David, your line is open.

Thank you. Good morning. Either Wayne or Neal, I just wondered if you can give us a better sense for what your assumptions are in the fourth quarter for retail, obviously third quarter you’ve talked us through. Just wondering how much improvement you are assuming and kind of what the range of outcomes you’re expecting maybe some recent trends would be helpful just so that we can be able to assess kind of how conservative or not you’re being on the retail side of your business for the holiday?

Yes David look for Wilson’s we're in low to mid single digit comps is what we’re looking to achieve. November has still not been bullish for us just yet, but that’s kind of what our initial assessment is. And for G.H. Bass, we’re in the high single to low double digit comps for the quarter and that certainly seems very achievable based upon really if you go back to the fourth quarter of last year we were at 15 comp. We're in double-digits for over this past third quarter.

And you’re seeing some improvements there in November?

Yes.

Okay. And then just a follow-up question, I’m just wondering you’ve kind of give us some color on the environment, are you seeing any adjustments for Spring of 2016 in terms of your order book and given all your growth initiatives weather its Bass, Karl Lagerfeld, Tommy Hilfiger dresses, CK etcetera, is this still a business that you think can generate double digit revenue growth?

I’ll answer the last question first. Yes, we believe that it can generate double digit growth for the next few years. We don’t see an issue with it. We were not fans of pointing fingers at the weather, but I don’t think I have a choice right now. Right now the issues that we’re faced with are weather related and not product related. I think it’s quite an accomplishment to achieve what we have being the dominant coat manufacturer in the United States. So I still believe that there is still double digit growth left in this company and our first quarter should be fine. We're not ready to give you that yet, but there is a good deal of excitement in our showrooms on a daily basis. They’re writing new launches. They’re writing comfort power brands that we have and we’ll have lot of it in first quarter and we're going to anticipate I believe when we get to it, we'll forecast a reasonably good 2017.

Great. Thank you. Good luck in the holiday quarter.

Thank you, David.

Our next question comes from John Kernan from Cowen. John your line is open.

Hey, good morning guys. Congrats on executing in a tough environment. I just wanted to get your opinion and if you see any parallel for 2011 when it was the last time weather was just big of the headwind to retail? I know there were some margin pressure in the third and fourth quarter and a little bit into the first quarter of that fiscal year, but then margins inflected after that. So is it really just getting through next year in terms of the markdowns and reestablishing the gross margin expansion trajectory you’ve been on in the past?

Number one, our business in 2011 was much larger on the coat side. Today we’re barely 40% coats and we’ve a different mix of brands. Some of the brands that we had in that time periods are no longer part of the portfolio. Part of the advantage sometimes in licensing is as you see a diminishing brand you do have the opportunity as the license expires to terminate the brand. So we've had several. One was Sean John. The other was Nine West. There was a couple of others that are in the same vein. So what's happened over time is we've become much stronger in -- it’s a lesser dependency as a percentage of our business and greatest trends in the power of the brands that we support. So we're -- we believe we’re really well positioned for the future and sometimes some very famous men once told me that sometimes history is your enemy. So I think what we look at is what we can achieve for the future and build -- just build better product. And all the things that I’ve been saying on this call there is very little that needs to be done to correct the quality of our product, the design of our product, the sourcing structure. I would say that I am very, very proud of what's been achieved and those are the consistent components that you back on for growth.

Okay. That's helpful. And then just on the retail gross margin expansion the past three quarters has been impressive in the face of a difficult environment. So can you help remind us where G.H. Bass is and what inning it's in, in terms of margin recovery? I know that margins are depressed relative to where you think they can go and where they've historically been. So where are we in terms of the G.H. Bass operating margin recovery cycle?

Yes, so we're looking in the mid 40s now and we think that it is going to get up to the 50% level for G.H. Bass. Look, some of our improvement is that we also covered off of some weak comps and one of the things that has also happened is that we really haven't in this environment been dropping price off at the Wilsons business. We felt it hasn’t been stimulating sales. So the Wilsons' gross margins have really been maintaining themselves as well and the combination of both of those is really what's been keeping the retail gross margin percentage up.

Okay. That's helpful. And then just one last question. Just given the initiatives around share buyback and potential acquisitions now that the stock has pulled back a little bit maybe as not as quite as currency, can you help us understand what your cash balance will be at the end of the year and what your free cash flow this year will look like given that it seems there will be somewhat of a working capital drag with inventory through the fourth quarter? Thank you.

Yes, so look the company is very, very strong from a cash standpoint. I estimate our free cash flow was in the mid 60s, will end the year with -- last year we ended with $130 million. We'll end up higher than that even with the working capital growth that we have. So essentially when you look at our company, we really are debt free company. We borrow for about four months during the year during peak, during peak working capital lease and the other eight months of the year we're positive cash and the average build out, we're probably just around at zero in terms of the improved debt level. And so when you couple that with the revolving credit line of $450 million and the working capital that we've got, we've got hundreds of millions of dollars of availability in just our company alone.

Okay. Thank you.

And the next question comes from Liz Pierce from Brean Capital. Liz, your line is open.

Thanks. Good morning, everyone. Nice job on a tough environment. Morris, I am curious on the department store particularly on dresses and suit separates and sportswear, as I look at some of the floors and I totally see what you're saying in terms of your taking market share in some of the lesser brands are being kicked out. But it seems to me that there are fewer and fewer of those lesser brands. So just trying to square that in terms of where the opportunity continues to come from on some of the bigger brands?

Not only has the lesser brands lost some space, some of the power brands have lost some space. So when a power brand loses its space, it's a lot of space and some of that becomes allocated to us as long as we perform and we're performing. We're outshining pretty much any and when you speak about dresses specifically and we've decided we're outperforming pretty much any of the power brands. So there is a willingness from the department stores to give us more space as we can create more product. And as we speak to the less important brands, there is still launch of new opportunities that department stores try to diversity of product to and when they don't achieve, they do get eliminated and I've seen quite a few brands on the floor that I don't believe are achieving their goals and there is a change they get eliminated as well. But nonetheless in a difficult environment we're growing our dress business, we're growing our suite business by over 20% this year, we're growing our handbag business all of that coming in difficult environments where we're all seeing slow growth at the department store level where we're achieving double-digit growth in most of our categories.

Okay. That's helpful. And then in terms of the Jimmy Fallon, is that -- it's something that you feel based on the response, do you see your ability to take that into different channels, distribution channels etcetera and the specialty or is that just locked up at a particular distribution segment?

Not until we have Jimmy Fallon as license in hand tie that can -- that can cross channels. It has men's and women's and it has the ability of doing kids in some of our licenses. So we've been very fortunate to have Jimmy Fallon work with us and present to the colleges his idea, not our idea, his idea that we're executing and it's working well. Our orders for our spring and fall of 2016 are very strong. We launched carefully. We launched in Dick's and Lids and Fanatics and stadium shops that's down the only place you're really able to find the hand tie product for our launch, but going forward it's much, much broader. Our order book is filling up nicely for the hand tie brand with Jimmy.

Great. Thanks and best of luck for the holiday.

Thank you very much Liz. Thanks for your question.

We have no further questions at this time. I'll turn it back to management for closing remarks.

Okay. Thank you, everybody and have a great day and a great holiday.