Phillips-Van Heusen Corp. is said to be close to pulling the women’s ck Calvin Klein and Calvin Klein white label licenses from Kellwood Co., and will turn them over to G-III Apparel Group Ltd.
Industry sources said the deal could be finalized as early as this week, and was spurred by PVH’s disappointment with the lines’ lackluster sales performances under Kellwood.
G-III and PVH executives declined comment Monday, and a Kellwood spokeswoman did not return phone calls. A Calvin Klein spokeswoman said, “We do not comment on industry speculation or rumors.”
With Kellwood’s licenses in place to run through 2012, G-III executives have reportedly been negotiating a reduced minimum royalty. Kellwood’s parent company, Sun Capital Securities LLC, is said to be eager to unload the licenses and will have to pay the difference.
Some of Kellwood’s Calvin Klein staffers have reportedly already been interviewed about keeping their jobs once the licenses are moved, one industry source said.
In October 2006, PVH granted Kellwood the ck Calvin Klein women’s bridge sportswear license for North America and extended the license for the Calvin Klein women’s better sportswear label, which it had since 2003.
In May, Sun Capital said it was shuttering Hong Kong-based sourcing operation Kellwood Trading Ltd. Sun Capital acquired Kellwood in February for $762 million. The ck Calvin Klein line was supposed to be Kellwood’s entrée into the bridge market.
Over the years, the ck Calvin Klein and Calvin Klein white label licenses have had their share of fits and starts. GAV used to hold the license for the ck Calvin Klein bridge line, as well as the Calvin Klein better line through a joint venture with Kellwood. “That lasted for a few seasons until someone decided it wasn’t working,” which prompted Kellwood to take it in-house, said a source familiar with that arrangement.
A few industry executives said they weren’t surprised to hear the latest rumblings about the Calvin Klein licenses.
Kellwood, G-III and PVH executives have reportedly been negotiating for months, and a deal is expected to be finalized by the end of this month, if not sooner.
The move would be a coup for G-III, which already has licenses under Calvin Klein to make coats, suits and dresses. Having acquired certain assets of Wilsons The Leather Experts Inc., including 116 outlet store locations earlier this month, G-III now expects fiscal 2009 net sales in the range of $720 million to $730 million.
During last month’s annual shareholders meeting, PVH chairman and chief executive officer Emanuel Chirico said of the Calvin Klein licensing business, “We believe over the next five years, we can layer on additional $2 billion to $3 billion of global retail sales. By 2010, we believe global retail sales will be in excess of $7 billion.”
The Calvin Klein licensing business represents about 12 percent of PVH’s revenues, and an estimated 40 percent of its profitability. Since 2007, CKI has stepped up its international store count to 538 from 419. The brand, including apparel, accessories, underwear, jeans, home and fragrances, generates total global sales of more than $5.4 billion. At year-end 2007, the top-tier Calvin Klein Collection apparel and accessories had $200 million in sales; the bridge ck Calvin Klein brand apparel, accessories, beauty and fragrances generated $1 billion, and the better-priced Calvin Klein white label (including underwear, jeans, home and fragrances) had sales of $4.2 billion.
In the U.S., CKI is pushing ahead with its rollout of Calvin Klein white label stores. The company opened five such stores in the fourth quarter of 2007 and four stores this year. It also plans to open a unit at the Americana at Brand in Glendale, Calif., before yearend.
In addition, in late May, PVH said it would end its license to operate Geoffrey Beene outlets and close its Geoffrey Beene outlet retail division by the end of fiscal 2008. As a result, it is shuttering 75 of the existing 100 stores and is converting the remaining 25 into Calvin Klein outlets. “By converting a portion of the Geoffrey Beene store portfolio to Calvin Klein outlet retail stores, we will accelerate the growth of our most productive and profitable outlet retail division, and more quickly reach our desired number of Calvin Klein outlet retail stores,” Chirico said.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
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The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion