NEW YORK -- Two industry giants agreed to tie the knot Tuesday.
The Warnaco Group will acquire one business of Calvin Klein Inc. -- men's underwear -- and license the trademarks for men's accessories worldwide. Warnaco will also acquire the worldwide trademarks for women's innnerwear when the U.S. license expires at the end of the year.
The deal, worth $64 million plus ongoing fees, gives Calvin Klein Inc. the capacity to be debt-free immediately, in addition to a steady stream of royalties.
The sale could also be the first of many similarly structured deals for various Klein divisions.
Sources said Klein has devised a strategy that will turn his firm into a complete licensing operation -- with the exception of the Collection business -- over the next few years, patterned after his highly profitable fragrance license.
For its part, Warnaco gets a powerful niche designer brand with enormous international growth potential.
In addition to the successful men's business, Warnaco will acquire the international trademarks for women's intimate apparel, which includes bras and panties and cotton underwear, when the license expires at the end of 1994, said Linda J. Wachner, Warnaco's president, chairman and chief executive officer.
Warnaco will also license the worldwide trademarks for men's accessories. The accessories license, a new venture to be launched in early 1995, will feature men's belts and wallets that will be in main-floor accessories departments and in Calvin Klein men's wear areas at major stores.
The deal is expected to be closed within 30 days.
According to the terms of the agreement, Klein will continue to design and create advertising for the men's underwear, women's innerwear and men's accessories, which had formerly been designed in-house.
All showrooms and design studios for the three businesses will be at the Calvin Klein offices here at 205 West 39th St.
The deal will enable Klein to erase a $58 million loan received last June from Citibank. Klein used the loan to buy back his bonds from entertainment tycoon David Geffen. The loan is collateralized entirely by Klein's royalty income. Sources estimate that Klein's licensing income in 1994, including royalties from Warnaco, will be $42 million to $45 million, up from $35 million to $36 million in 1993.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"