Shareholders of Phillips-Van Heusen voted on Thursday to shorten the name of the company to the acronym PVH Corp. at its annual meeting here. The aim of the change is to reflect the importance of its newer Tommy Hilfiger and Calvin Klein businesses — and its smaller dependence on the heritage dress shirt business, which includes Van Heusen, Arrow and Geoffrey Beene.
“The Phillips-Van Heusen name didn’t represent where the company is headed and where the growth is coming from,” said, chairman and chief executive officer of PVH. Calvin Klein and Tommy Hilfiger represent more than 75 percent of the company’s revenues and profits.
With the deal for Tommy Hilfiger finalized in May 2010, PVH is already on the hunt for another acquisition. “We are looking in earnest for acquisitions that make sense going into 2012,” Chirico told shareholders. Those acquisitions will likely include another global lifestyle brand, Chirico told WWD, as well as buying back licensed Tommy Hilfiger or Calvin Klein businesses, either in certain product categories or in geographic areas.
The company has paid down $400 million of debt on the Hilfiger acquisition and plans to pay off another $300 million by the end of the fiscal year, deleveraging its balance sheet to make other potential deals possible.
On a pro forma basis, PVH in 2010 had $5.3 billion in revenues, making it the third largest apparel firm globally after VF Corp. and Polo Ralph Lauren Corp.
Its three businesses combined gave PVH global retail sales of $14.6 billion. Tommy Hilfiger, at $4.6 billion in global sales, accounted for 49 percent of the revenue base, with 44 percent of the business in Europe and 36 percent in North America. Calvin Klein, at $6.7 billion, represented 18 percent of total revenue — smaller than Hilfiger due its reliance on a licensing model — with 25 percent of the business in Europe and 51 percent in North America. Heritage brands, including Izod and G.H. Bass & Co., at $3.3 billion, were 33 percent of total revenues, with 86 percent of the business in North America.
PVH now commands a 47 percent share of dress shirts in U.S. department and chain stores, including nine of the top 10 brands (Polo Ralph Lauren is the exception). In neckwear, its market share is more than 50 percent of all ties sold in the U.S.
Unlike in previous annual meetings, both Tom Murry, ceo of Calvin Klein Inc., and Fred Gehring, ceo of Tommy Hilfiger Group, addressed shareholders with overviews of their respective units.
Murry said the current plan is to grow global retail sales of the Calvin business to $9 billion by 2014. For the same time period, Gehring said his business is expected to grow globally to $6.5 billion.
For fiscal year 2011, PVH is projecting revenue between $5.7 billion and $5.75 billion, with earnings per share at $4.80 to $5.00, excluding special items.
The company ended its licensed Timberland sportswear business in the fourth quarter of last year. “Given the acquisition of Tommy Hilfiger, we decided to close a marginally profitable business of about $90 million,” he noted. PVH’s competitor VF Corp. recently revealed plans to acquire Timberland.
As with all apparel companies, rising production costs are a key issue for PVH. “You look for all the efficiencies you possibly can, including counter-sourcing and moving production to new countries,” said Chirico. “But the reality is cost of production is up on average 13 to 15 percent and it will require you to raise your average unit retails.”
PVH is aiming to do that through a combination of raising ticket prices, better management of inventory to reduce clearance rates and to sell clearance at higher prices. “In Tommy and Calvin we’ve been able to get higher retails through better execution rather than actually raising prices. But for the second half you’ll see the whole market raising prices,” said Chirico.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye