By  on March 18, 1994

TOKYO -- With the formation of Calvin Klein Japan Co. Ltd., and an initial capital investment of $1.8 million, Calvin Klein Inc. expects its Japanese business to total more than $3 billion over the next 10 years.

As expected, the agreement between Klein and four Japanese partners to form this new company was announced Thursday at a press conference here. The partners include Mitsui & Co., with a 40 percent stake; Onward Kashiyama Co., 30 percent; Isetan Co., 10 percent, and Okano Associates Co., 5 percent. Klein holds a 15 percent share.

Plans for Japan include expanded licensing deals, increased department store distribution through in-store shops in Isetan stores, and freestanding stores. The firm expects to open 12 freestanding stores within five years. They are expected to reach a combined volume of $45 million in 1999.

Wholesale volume of the men's and women's Collection lines, CK Calvin Klein bridge sportswear line, CK Calvin Klein Jeans, and licensed products are expected to hit over $3 billion over the next ten years, according to the company.

"Now with this very exciting joint venture we have the potential to do much, much more," said designer Calvin Klein, vice chairman of Calvin Klein Inc. "It's a great breakthrough for us."

Although the company has been active in Japan for nearly two decades through a licensing agreement with Isetan, Barry Schwartz, chairman of Calvin Klein, pointed out that the joint venture will allow further growth. The firm's combined annual wholesale and retail volume in Japan now is around $200 million, according to Isetan.

As an umbrella organization, Calvin Klein Japan will be responsible for intensifying Klein's presence in Japan, for creating in-store shops, and establishing men's and women's collection businesses in Japan. It will also oversee advertising, public relations, licensees and distribution. Each of the partners will oversee a particular operation of Klein's Japanese operation, with final approval of all advertising and public relations decisions by Calvin Klein Inc., which will also have final design approval of all collections. Mitsui, a major trading firm, will be responsible for finances of Calvin Klein Japan Co. Ltd., and will oversee all imported products in Japan.Onward Kashiyama will manufacture and distribute men's and women's CK Calvin Klein sportswear and CK Calvin Klein Jeans and will be general consultants for Calvin Klein Japan. The men's and women's signature collections will be imported.

Isetan will establish and build in-store shops in Isetan Co. stores and will consult with Calvin Klein Japan on other retail business.

Okano, a home furnishings company, will support advertising and promotional efforts. Although Klein stated at the press conference that he is not ready to enter the home furnishings market, he is interested in the business. Okano would develop that merchandise.

Hideo Hisamichi was named president of Calvin Klein Japan. He was formerly with Onward Kashiyama.

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