PVH, The Parent Company Of Calvin Klein, Abandons Non Core "Traditional Brand" Store Closure And Layoffs

Philips van Heusen group (PVH), the parent company of brands such as Calvin Klein and Tommy Hilfiger, announced on Tuesday that it would take measures to streamline its business in North America.

PVH said it would gradually close 162 heritage brands retail stores in North America by mid-2021. There will also be about 450 job cuts, or 12% of North American employees, and the cuts will involve all three of the group's brands, not just heritage brands.

The PVH group hopes these measures are expected to help the group save $80 million annually. In the next 12 months, layoffs and store closures will result in additional costs of about $80 million, including severance payments, lease termination costs, inventory depreciation, and non cash asset impairment, of which about $10 million is non cash costs.

Emanuel Chirico, chairman and CEO of the group, said: "the structural changes in the retail landscape in North America require us to take a serious look at the North American business and optimize the business model. For many years, we have to thank all the relevant personnel for their hard work. One of our oldest sales targets is brands. "

Stefan Larsson, President of the group, said that layoffs and structural adjustment are of strategic significance for the long-term and healthy development of PVH. The impact of the epidemic on consumers is long-term and far-reaching. The group needs to adjust its business, rebalance costs to improve its competitiveness and financial position, and, where appropriate, reallocate resources to achieve greater profits.

PVH group was founded in 1881. At first, it operated in the mode of multi brand direct selling. The initial brands included van Heusen, Izod, etc. In 2003, PVH acquired Calvin Klein and Tommy Hilfiger, and merged other brands into heritage brands. At present, heritage brands' brands include van Heusen, Izod, arrow, Warner's, Olga, true & Co. and Geoffrey Beene.

In 2013, PVH group completed the acquisition of underwear and sportswear manufacturer warnaco group with a price of $2.9 billion. The latter owns Calvin Klein jeans and Calvin Klein underwear production license. PVH has also completed the integration of all control rights of Calvin Klein brand. Emanuel Chirico revealed in an interview with Bloomberg Television in October that the group was looking for new acquisition targets.

In the fourth quarter of fiscal year 2019 to February 2, 2020, the sales of PVH group increased by 3% compared with the previous year, but the net loss was US $68.5 million; among them, the sales of heritage brands (Group's traditional brands) decreased by 1% to $359 million due to the weak business in North America.

In April, Pentland group, a British brand management company, bought back Speedo's North American business from PVH for $170 million.