NEW YORK — PVH Corp. is looking to close its designer gender gap.
On a Tuesday morning conference call to discuss the group’s better-than-expected second-quarter earnings and sales, Emanuel Chirico, chairman and chief executive officer, told analysts the company’s two designer brands, Tommy Hilfiger and Calvin Klein, are both weighted toward men’s sales, with Hilfiger about 60 percent and Klein about 55 percent men’s.
“If you think about both of our lead brands, Calvin and Tommy, the women’s business is always one that we’ve looked at, that we felt should be bigger and had bigger opportunities,” he said. “If you look at the women’s potential in the market, the women’s business is much bigger than the men’s business.”
He then stated that two-thirds of the opportunity for growth with the designer brands is expected to come from women’s, versus one-third from men’s. While both brands are global in scope, that two-to-one ratio of opportunity is nearly identical to the breakdown of sales between women’s and men’s apparel in the U.S. which, according to The NPD Group, were $110.16 billion and $55.72 billion, respectively, in 2011.
“I think if we have fallen down anywhere on the brand level, our execution has just been stronger on men’s product than it has been on the women’s side of it,” Chirico continued, “and I think some of the initiatives, both with our licensing partners on Calvin and internally with our Tommy product both in North America and Europe, we believe has significantly been improved and the positioning there has significantly improved.”
Focusing primarily on Calvin Klein, he cited numerous programs expected to help boost the women’s share of the brands’ businesses from their current levels of about 40 percent for Hilfiger and 45 percent for Klein. He described G-III Apparel Group Ltd.’s efforts with Calvin Klein dresses, suits, handbags and accessories as “just off the charts, strong” and noted an excellent performance by Klein footwear licensee Jimlar Corp., with royalty revenues for G-III and Jimlar rising 15 percent in the second quarter.
The Klein jeans and underwear businesses, rights to which are held by Warnaco Group Inc., have been problematic “due to uncertainty in Europe and the weakness we see in our global jeans business,” the ceo said, leading PVH to plan royalties from Warnaco’s licenses in Europe at contractual minimums for the year, about 10 percent below 2011 levels.
The ceo expressed confidence in Warnaco’s plan to turn around the jeans business, citing “some of the great design talent that they’ve brought in, the investments they’re making in their infrastructure and merchandising.” He expects benefits from those efforts to be realized beginning in 2013 with top-line growth resuming in the second half of next year.
While Warnaco works to rectify its Klein jeans business and streamline its European operations, PVH next year will take back the CK Calvin Klein bridge apparel and accessories in Europe previously licensed to Warnaco, converting royalties from a licensee into direct revenue. Chirico said PVH is at the start of a “total repositioning of where the product was. We’re not going to be using the CK logo, so it’s not going to be CK Calvin Klein. It’s going to be Calvin Klein product.…We’re going to start with men’s next year, fall of next year, and then go into women’s in fall of 2014.”
Late Monday, PVH reported that its net income for the quarter ended July 29 rose 29.3 percent to $87.7 million, or $1.19 a diluted share, while revenues eked out a 0.2 percent increase to $1.34 billion. Hilfiger revenues rose 4.2 percent to $721.9 million and volume at Klein, which depends more heavily on licensing royalties, expanded 4.7 percent to $251.2 million. Excluding special items, operating income at Hilfiger was up 28.5 percent, to $97.3 million, while Klein’s contracted 8.8 percent, to $60.2 million, on a heavier investment in marketing.
The strong performance, coupled with upbeat guidance for the remainder of the year, helped boost the New York-based company’s stock $4.42, or 5 percent, to $92.91 a share Tuesday. Earlier in the day, shares hit a new 52-week high of $94.74.
PVH’s strength in men’s is in part derived from its roots with the Van Heusen dress shirt brand. The Heritage Brands unit, which houses that label, saw a 9.5 percent drop in revenues, to $363.5 million, as operating income dropped 23.2 percent to $23.2 million. With product costs declining from a year ago, average unit retails up in the midsingle digits, Izod among the vendors anointed to be part of the new J.C. Penney and the closure of the Izod women’s and Timberland businesses approaching their anniversaries, Chirico sounded an optimistic note on the segment.
“Clearly, the Heritage business is in the midst of a major turnaround,” he said.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)