NEW YORK — A Phillips-Van Heusen Corp. deal with Calvin Klein Inc. appears to be nearing the finish line.
According to sources Monday, PVH is getting closer to an agreement to buy the designer’s fashion house, with some sources speculating a deal could come as early as this week.
The development comes less than a week after VF Corp.’s apparent effort to snap up CKI and its primary licensee, Warnaco Group Inc., fell apart, according to sources.
So far, no one’s talking for the record. A CKI spokesman on Monday declined to comment on the reports that his firm is near to a deal with PVH, and a VF spokeswoman likewise declined to say whether her firm remained interested in CKI or Warnaco.PVH officials could not be reached for comment Monday. It’s been more than three years since Klein first put his firm on the block with a reputed asking price of $1 billion. But time — along with the Warnaco bankruptcy and the slowdown in the economy — has taken its toll and current suitors are said to be offering between $600 million and $800 million for the firm.“The PVH people feel very confident that a deal is going to be done and that Calvin and [PVH chairman and chief executive] Bruce Klatsky are getting along very well,” one financial source, who requested anonymity, said.“PVH needs something, and this could be a great complement to what they have,” the source continued. “They need a higher-end sportswear business to balance out the promotional business they’ve got in dress shirts and sportswear in department stores and their own outlets. Izod’s got a lot of potential, both the men’s sportswear PVH is doing and the women’s sportswear that Kellwood now has, but there’s no telling how far Kellwood can take Izod women’s. If it works, that’s royalties on $100 million or so going pretty much to the bottom line [of PVH].”PVH’s stable of offerings already includes the top-selling dress shirt brand Van Heusen; Bass for men’s, women’s and children’s casual footwear; Geoffrey Beene designer shirts and sportswear; Izod sportswear and golfwear; and dress shirt licenses for DKNY, Kenneth Cole, Arrow and Aigner. In August, PVH also added a Calvin Klein staple to its roster when it signed a deal to produce cK Calvin Klein dress shirts and formal shirts.While PVH has several designer-name licenses on the men’s dress shirt side, it hasn’t been an important player in the women’s apparel market up to now. That may change, though, as a result of its Izod deal with Kellwood Co., which executives on both sides predict could become a $500 million women’s business.The financial source speculated that, if PVH lands CKI, it might have to add to its top management.“PVH has a nice business with DKNY and Kenneth Cole,” the source said. “They’re both profitable and higher margin, but they’re relatively small. CKI could give them their first really meaningful presence in men’s sportswear.They’ve got [PVH vice chairman] Ken Duane there, but they may need someone with a bit more of a name if they’re going to make CKI live up to its potential.”When its third quarter ended Nov. 3, PVH’s cash holdings were $63.4 million, up from $593,000 a year earlier. Its long-term debt stood at $249 million, essentially unchanged. The firm, which last year earned $15.2 million on $1.42 billion in sales, saw revenues slip 1 percent through the first nine months of 2002. Net income was up 22.7 percent for the period.The privately held CKI is said to have revenues of $30 million to $50 million at its women’s and men’s designer lines, and flush with licensing royalties, is likely highly profitable. Sales of its licensed goods dwarf that figure, with Warnaco’s CK jeans and underwear sales coming to $539 million and Anglo-Dutch Unilever’s sales of Calvin Klein Cosmetics estimated at $600 million to $700 million.But while PVH currently appears to be in the lead to snap up CKI, it’s not clear that other suitors are out of the running.The $5.52 billion jeanswear powerhouse VF remains in a position to buy, if it wants to re-enter the bidding. At the end of September, its cash on hand stood at $255 million, while its long-term debt level was $602.6 million, down from $904.2 million a year earlier.VF officials have neither confirmed nor denied that they were bidding for Calvin Klein and Warnaco. When reached for comment Monday, a VF spokeswoman said, “I don’t have anything to say.”VF late last year sparked a wave of speculation on its plans when chairman, president and chief executive officer Mackey McDonald said the company was interested in acquiring a major lifestyle brand with revenues in the $500 million range. He said at the time that VF was interested in the Warnaco brands.
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@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
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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
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