Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the G-III Apparel Group Limited third quarter earnings call 2009. (Operator Instructions) I would like to turn the conference over to Mr. Neal Nackman, Chief Financial Officer of G-III Apparel Group. Please go ahead, sir.

Thank you. Good afternoon, everybody. Before we get started, I want to remind you of the company’s Safe Harbor language. Some statements made today on the call are forward-looking statements as that term is defined under the federal securities laws. Forward-looking statements are subject to risks, uncertainties, and factors which include but are not limited to reliance on licensed products, reliance on foreign manufacturers, the nature of the apparel industry, including changing customer demands and taste, customer concentration, seasonality, customer acceptance of new products, weakness in the retail sector, risks related to the operation of the retail chain, the impact of competitive products and pricing, dependence upon existing management, possible business disruptions from acquisitions, weak economic conditions, and the turmoil in the credit and financial markets, as well as other risks detailed in the company’s filings with the Securities and Exchange Commission. The company assumes no obligation to update information in this call. I will now turn the call over to our Chairman and Chief Executive Officer, Morris Goldfarb.

Good afternoon and thank you for joining us to review our third quarter. With me today are Wayne Miller, our Chief Operating Officer; Neal Nackman, our Chief Financial Officer; and Sammy Aaron, our Vice Chairman. Our results over the last nine months of this fiscal year illustrate that our business is strong and has performed well. Over that same time period, we’ve also completed two acquisitions that are enabling us to further diversify our business and to create new substantial opportunities for growth. In general, we continue to be proud of what we are accomplishing and optimistic about the potential of the business opportunities in front of us. The third quarter is the most important to our annual financial results and I am pleased to tell you that we executed well. Net sales for the third quarter were $351.6 million, up 29.6% compared to the same period last year. The increase was driven primarily by contributions from Andrew Mark and Wilson’s outlet retail businesses that we acquired during the past year, as well as strong increases from our Calvin Klein, Guess, and Kenneth Cole business. Net income per share for the quarter was $1.68, up 19.1% compared to the $1.41 from the year-ago quarter. Given that is both our largest licensed business and the top performing brand in our mix, I will start by updating you with respect to Calvin Klein. The business has been excellent across nearly every category. This certainly has something to do with the brand’s position in the market. Calvin Klein is well-suited to compete in this kind of environment. The strong fashion heritage of this brand, combined with high quality and extremely competitive price points, is going to work in our advantage across a number of categories. The status level is associated with this pure…

Thank you, Morris. First for the quarter’s review -- net sales for the quarter were $351.6 million, up approximately 29.6% compared to $271.2 million last year. Net sales of licensed apparel in the quarter increased to $229.1 million from $193 million and net sales of non-licensed apparel in the quarter increased to $98 million from $78.2 million in the prior year. Net sales for our retail segment were approximately $24.4 million, primarily from the Wilson’s outlet stores which we acquired in July 2008. The increase in our net sales of licensed apparel in the quarter was primarily attributable to sales of Dockers and Levis product under new licenses acquired with the purchase of Andrew Mark in February 2008 and a liberal increase in our Calvin Klein products, including the CK performance division, which began shipping in the fourth quarter last year, and an increase in Guess outerwear. The increase in net sales of non-licensed apparel was primarily attributable to the Andrew Mark division acquired in February 2008 and accordingly, there are no sales of Andrew Mark product in the prior year. This increase was offset in part by a decrease in our other non-licensed outerwear programs. Our net income for the quarter increased to $28.8 million, or $1.58 per diluted share, compared to net income of $23.8 million, or $1.41 per diluted share in the same period last year. Our gross margin percentage increased to 32% in the quarter compared to 29.6% last year. The gross margin percentage in our license segment increased slightly to 32% this year, as compared to 31.5% in the prior year. The gross margin percentage in a non-licensed segment increased to 29.2% from 25% in last year’s quarter. The increase in the gross profit percentage in our non-licensed apparel segment is primarily attributable to the…

Thank you, Neal. I know we all can appreciate that in some ways, these are unprecedented times with a great deal of uncertainty. However, we believe that [lasting] organizational improvement can result from a strong response to market challenges. We are a proactive and forward-thinking organization with a great deal of talent and opportunity. We expect that our high level of diversification will help protect our business and provide for growth opportunities regardless of the character of the market in general. It is important to recognize that this kind of market environment can prompt significant changes in the competitive landscape. We believe that there will be consolidation by retailers, competitors, and suppliers. We believe that we will ultimately benefit from this consolidation in the form of increased market share and a wide availability of business opportunities. This is the time when strong companies distinguish themselves. We are one of those and we intend to demonstrate it. Thank you for being with us today and we are now open for questions.

(Operator Instructions) We’ll hear first from Eric Beder with Breen Murray. Eric Beder - Brean Murray, Carret & Co.: Good afternoon. Could you talk a little bit about where we are with the other big rollouts for 2009, the Calvin Klein active wear and the Jessica Simpson rollout?

The sportswear collection at Calvin Klein is being received very, very well. As most of you know, this was in the hands of [Kellwood] last year and what we have done is we believe we have corrected the design, corrected the pricing, and have a wide response from retailers. It’s actually quite good. There are retailers that have been sitting on the sidelines for several seasons that are back with us buying the line. We have approximately 200 doors that we are launching with and our bookings are ahead of plan. The Jessica Simpson [inaudible] business is actually okay. It’s not as -- quite honestly, it’s not anticipated to be as exciting as Calvin Klein. It’s a niche business and it integrates quite well with some of our other pieces. It’s not costing us an incredible amount of business -- amount of money to be in this business and this is an example of how we are levering our labor pool and real estate, as well as our sourcing capabilities. We will be shipping Jessica Simpson in February and it’s been pretty well-received. We think we will be happy with it. It’s not going to change the course of the world for us. It doesn’t have the same impact as Calvin Klein but we are in approximately 125 doors to start, which is more than acceptable. Eric Beder - Brean Murray, Carret & Co.: Okay, and in terms of Wilson’s leather, how has the response been to some of the brand [inaudible] you put in and where do you expect to further penetrate that going forward?

Well, the problem that we have incurred with Wilson’s is number one it’s lost its identity, partly due to the fact that as we were building the outlets in the last few months, they -- unanticipated, they shut down all their mall locations. So there’s some confusion as to whether the outlets are the same as mall. We never acquired the mall locations. Our intent was to build outlets and have it as an independent retail on the G-III. The product that is currently in the Wilson’s outlet is not planned product. We have no time to manufacture and distribute product, as we finally consummated our deal in I guess late July and scrambled to get inventory in. So it is at best, it’s a patchwork job that is in the process of being corrected. Part of the problem at Wilson’s is the consumer has known Wilson’s forever and is accustomed to walking in and finding an affordable leather jacket, a handbag, an accessory, and we have confused them for the short-term. There’s a breadth of product that is not as focused as it needs to be and we are conscious of it. We are working on it and we believe even in a tough environment that we are likely to face for next year that our Wilson’s business will improve significantly. Eric Beder - Brean Murray, Carret & Co.: Okay. Thank you.

We’ll hear next from Jody Kane with Sidoti & Company. Jody Kane - Sidoti & Company: Thanks. Neal, if you could just talk a little bit about the gross margin for this quarter -- about 32%. Could you just break out what that was and how you see it going forward?

I think that what I indicated before, Jody, is that the margin at one point in the quarter was -- at the retail segment, the retail was 43.6%, the non-license segment was 29.2%, and the license business was 31.9%. And we really expect that prospectively, we are going to continue to see lift in the gross margin from the Wilson’s business. [inaudible] on our earlier calls [that we got] 200 basis points. It’s probably down to about 150 basis points, and then the rest of the year, we’ll see the same thing that we’ve seen so far, which is a pretty steady lift in license, a good percentage of flattened license margins and an up-tick in the non-license sector. Jody Kane - Sidoti & Company: And as you start to work through the Wilson’s business, should that gross margin go higher or is that 43% about as good as it gets?

I think prospectively, we will -- we certainly had planned for that to be higher this year and prospectively we expected that margin will be higher in that business segment. Jody Kane - Sidoti & Company: All right. Can you talk a little bit about the DNA for the end of the year, where you are expecting it to be?

We have -- we are proposing that it will be about $7.1 million for the full year. Jody Kane - Sidoti & Company: All right, great. And then on the balance sheet, the debt is significantly higher, the short-term debt or revolving debt is significantly higher this time than last time. Are we going to see the same decline or the same sort of level of decline as we move into the end of the year, even this quarter, to pay down some of that?

The debt is up from last year about $170 million against last year’s $70 million. The debt is up because of the two acquisitions and then in addition to that, our business has grown, so we will and do expect that seasonal debt, it grows really with the growth of our receivables and our inventory, and similar to what happened last year, we will have a pay-down of net debt in year-end. And that in fact that pay down this year will be greater as we move from Q3 to Q4. That will be a greater reduction in debt going into Q4 than what we saw last year, but we will reduce that debt significantly into -- by year-end. Jody Kane - Sidoti & Company: And just finally, would you be prepared to give us sort of a range of where you expect inventory to be at the end of the year?

I would tell you that the inventory level will see still a slight increase to last year involving an anticipation of really an increase in business that we expect to have in Q1 of next year. Jody Kane - Sidoti & Company: Great. Thanks.

(Operator Instructions) We’ll hear next from Jim Duffy with Thomas Weisel.

Thank you. Neal, a couple of questions for you on the balance sheet -- can you give us the receivables and the payables?

Sure. Accounts receivable at October 31 are about $218 million, and the accounts payable and the included expenses are about $87 million.

Okay, and then did you say inventories ex the acquisitions were up 5%?

That’s right, Jim.

That’s the right number? Okay. And then in terms of the revolver balance at year-end, you said you expect to pay it down from where it is now. What level should we expect to see it at.

We expect that to be down at least $140 million from this period in time.

Okay. And then looking at your senior leverage ratio, have you guys have conversations with the lending group to try to restructure? It looks like some of the covenants may even be antiquated relative to what your business model is now, relative to what it was maybe when you signed up for the revolver?

No, we haven’t had any conversations like that. The two covenants that we have really are they are somewhat consistent with really the way the company has always operated. There’s a senior debt-to-EBITDA coverage, which was similar to what we used to have, which was a [clean-up] to cash coverage, so that just limits our total debt -- that’s similar to what we have always had and we don’t anticipate any problem with that. The second covenant is a [inaudible] ratio [with a continue to warrant] [inaudible] EBITDA as covering the interest taxes and our capital expenditures at an appropriate level and we’ve had no problem at all with that covenant either.

Okay. And then are we getting to the point in fiscal 2010 where you may be likely to break out Calvin Klein as a percent of your overall business?

We’re not there yet. It’s something that we will probably evaluate when we get to our year-end reporting with our 10-K, but we’re not there at this point.

And then with regard to license agreements, given some of the pressure that we are seeing from the economic environment, are there a number of license agreements that aren’t hitting the minimums?

Who knows? Quite honestly, all our minimums are more than covered. We are quite comfortable with our businesses. The troubled pieces of our business, I think we’ve described earlier the Andrew Mark business, as well as the Wilson business. Other than that, we are pretty much operating on all burners in a very, very tough environment.

Okay, and then final question, what are the channels that you will use, likely use for the liquidation of inventory in the fourth quarter?

When it comes to our licensed product, there are strict guidelines as to how we can move that inventory and it’s your usual categories -- it’s [inaudible], it’s a little bit of [Rock Star], depending on the brand. Nothing has changed. What’s changing a little bit is our own outlet stores.

Okay. Thank you and good luck.

We’ll hear next from Mimi Bartel with Telsey Advisory Group.

Thank you. Could you just talk a little bit -- is the [coat] business still 70% to 75% of the business, and is the goal still to reset 50-50?

Our coat business is approximately 70% of our overall business. The coat business is ending up as a strong piece of our business, but depending on where the market really takes us, we have an opportunity to build the Calvin Klein sportswear business into a very, very large business and that all by itself can take down the percentage of business we do relative to the whole. Our dress businesses are doing exceptionally well, so that also is bringing down the percentage but our outerwear business is on growth mode. I don’t believe we’d give up any volume or as stated, our brands are all doing well, our private label is doing well in the coat area and it’s still a nice growth area. But the faster growing pieces of our business will be sportswear, dresses, so it’s just a healthier business than it’s ever been.

Okay, great and then --

As far as seasonality is concerned, we’re very, very satisfied as to the progress we are making.

Okay, great. And just on the Wilson’s business, obviously everybody is sort of struggling from a traffic perspective and we are starting to hear about pushing back on realtors, mall developers. Have you guys had an opportunity to sit down and kind of talk about rent expense or think about that, just in terms of the outlook there?

All of our locations are outlet locations. They are not traditional regional malls and our real estate department is aggressive in trying to renegotiate situations and better the terms that we currently have. As leases end, our terms become a little bit better.

Okay, great. Thank you.

We’ll take a follow-up question from Eric Beder with Brean Murray. Eric Beder - Brean Murray, Carret & Co.: Just a quick one -- could you talk a little bit about the changes that we are going to see in Andrew Mark in ’09 and how that’s going to affect the business?

When we acquired Andrew Mark, it was very clear to us that from a design point of view, a price point of view, and an organizational point of view, they were on the wrong path. So what we did is we -- I guess we altered the organization to a major expense and what we are in the process of doing was rebuilding the collection. It’s impossible to go back to accounts that had written the collection on a go forward basis and tell them guess what, we were wrong. We want to readjust it and we want you to rewrite orders in different fashion. So the season was really cooked. We did the best we could do to adjust the factories that the product was being produced in. We altered some of the fit that we felt was inappropriate but the basic fashion was what we inherited. So we’ve been aggressive in trying to reformat the business. The price points at Mark’s New York are changing. The business at Andrew Mark is [marquee] for us. It’s going to stay consistent with the original DNA, which was their prior to the ownership that we bought it from. We are trying to keep it pure. We are in the middle of negotiations for another licensing agreement, so hopefully within the next 30 to 60 days, we will announce another license. We are changing our sourcing structure. We believe there are some benefits in margin that are quite significant, and we hopefully will either launch Andrew Mark outlet store in a new location or convert one of the Wilson’s locations into an Andrew Mark store to test the concept. So we are still very aggressive with that brand. We believe there’s a future for GIII owning a brand that is built with good integrity and is a long-term benefit for it. This was a difficult year for the luxury tier. The stores that are most important for Andrew Mark are Neiman Marcus, Saks, and Bloomingdales. And if there is a sector that we all know is the most difficult, that’s it. So all said, I think that we proved out that we can even address that sector with good product, with good price points and make it work. We do it with Cole Haan and clearly we believe that we can do it with Andrew Mark. Eric Beder - Brean Murray, Carret & Co.: Okay, great. Thank you.

We’ll take another follow-up from Jody Kane with Sidoti & Company. Jody Kane - Sidoti & Company: Thanks. Morris, did you say that you are incurring the expense, design rational expense for some of the Calvin Klein business, the Jessica Simpson business, and the Ellen Tracy business, and you will only see revenues start to flow through it next year?

Yes, the -- since our signing of Andrew Mark -- I’m sorry, not Andrew Mark, the Calvin Klein sportswear business, we have been very busy traveling, designing, hiring, allocating space, and recruiting space and there’s a possibility that we get a little bit of product in for fourth quarter. That’s doubtful. The benefits should start to come in first quarter but we are incurring the cost in fiscal 2009 of building the collection and all the associated expenses with that. And with Jessica Simpson very much the same way, to a lesser economic strain and Ellen Tracy is something that we’ve been keeping all year, so that wouldn’t appear to be [at any great] expense to that at all. Jody Kane - Sidoti & Company: And just finally, did you say you were going to pay down debt by $140 million or it’s just going to be $140 million?

We are going to pay it down by $140 million. Jody Kane - Sidoti & Company: Okay, so it should end the year -- [Multiple Speakers]

Jody, I’m sorry, our current debt is well below 140. Jody Kane - Sidoti & Company: Okay.

So you had the quarter end was 170 and our current debt is south of 120, so we shouldn’t have difficulty in getting to the [inaudible].

$140 million pay-down but --

-- million dollar pay-down from the 170. Jody Kane - Sidoti & Company: Perfect. Thank you very much.

We’ll hear next from Todd Slater with Lazard Capital.

Thanks very much. Morris, recognizing that none of us have ever seen this type of environment before, I’m just wondering what you anticipate will be your biggest challenges for 2009?

You know, that’s a real hard one to anticipate. I could tell you that I’m happy with where we are. When you go to battle in this environment and you’ve got the best soldiers in the industry, I think you win. I can’t forecast what the economy will -- I can’t forecast what consumer buying habits will change to. What I can tell you that we will be there and we will be there in force. We described all the reasons for it. We have the financial viability to sustain tough business. We have great brands and these great brands are proving themselves out in this environment. The misses that we really have are almost predictable. They are newly acquired properties that we did not have the time to turn around and bring into the G-III fold. The Andrew Mark piece was a hurt, or will be hurt for the year, as well as the Wilson’s, and both for different reasons. But there’s not been an acquisition that we have made that has not turned good, and I feel comfortable that both of these acquisitions are great for the future of our company -- again, for different reasons. So we are positioned with retail outlets, we are positioned with great brands, we’re positioned as the go-to resource for private label development. We seem to be a wonderful partner for the retailer for all of these reasons. There’s going to be a reduction in factories overseas. The important ones are aligning themselves with us. They also see a weakness in our world and they want to be ensured that a company like ourselves support them in the form that they need to be supported. So we’ve made more trips than you can imagine to the Orient in the last three months to ensure the fact that our vendor base stays at our side and does what is required for the long-term benefit of business in the apparel sector. So I can’t really tell you that what we are in control of concerns me. We’ve got it. What I can’t control, I guess I don’t know and therefore it doesn’t concern me. So we are reducing our headcount. We are conscious of what the world is like today. We are all great operators. The leadership of this company doesn’t invest in the company -- they invest financially. They invest their blood and they all come through acquisitions, they all come from I guess self-taught, self-learned operations and they have all seen trouble times. They know what it’s like to make payroll, they know what it’s like to cut back and they know what it’s like to survive. And we have [inaudible] of that -- I’ve gone through difficult times in my career. This is my 37th anniversary in this company and I’ve gone through many different cycles. You’re betting on somebody that knows it, somebody that understands it and yet I can’t predict what the environment is going to be.

Okay, fair enough and just speaking of Asia, since you mentioned having been there recently several times --

Not me -- every leader in our company has been there to make sure that their sector of business is protected.

Sure. Okay, so is there an opportunity for a lower sourcing cost, given what is going on with factories and raw material costs and so on and so forth?

There is. We are taking advantage of some of those situations, so it’s a wonderful thing that there is -- there’s price advantage but it’s hard to take advantage of it when you are trying to insulate yourself from severe markdowns in inventory. There are several areas of our business that have a competence level and we as a group fear that they should buy early and take advantage of it. And there’s another sector that’s more reactionary and therefore I guess time will tell if there’s a benefit.

Okay, great. Fair enough and all the best.

Thank you.

And we have no further questions from the phone audience at this time. I will turn the conference back over to our speakers for any additional or closing remarks.

Thank you for being with us this afternoon and we look forward to a different year. We will talk to you at the end of next quarter.

That does conclude today’s conference call. We’d like to thank you all for your participation. Have a great day.