NEW YORK — At Phillips-Van Heusen's annual meeting on Tuesday, there was much laughter, some tears, the passing of a torch and even a standing ovation. Had the event not been held at the City University's Graduate Center at 365 Fifth Avenue, it would have been perfectly suited for Broadway.
Effective Tuesday, PVH's chairman and chief executive officer, Bruce Klatsky, 56, officially stepped down from his ceo post, and was succeeded by Mark Weber, 55, president and chief operating officer. Emanuel Chirico, executive vice president and chief financial officer, became president and chief operating officer and was also elected to the board.
At the annual meeting, Klatsky reminisced about his 34 years at PVH and thanked those dear to him professionally, while Weber set forth his vision for the company.
"We do not need to make acquisitions to meet our numbers or exceed them," Weber said. "We will make acquisitions where it makes sense. We will only buy brands that people know. We will only buy companies that we feel we can grow dramatically. We have a very bright future, provided to us by a great board, a great retiring ceo, great partners and management team. I am thrilled to be a part of it and very confident in our future."
After the meeting, Weber elaborated: "We want brand names the consumer knows ... We know how to develop the product, we know how to do the marketing, we know how to advertise, but what we don't want to do is take something that needs to be explained."
Klatsky, who was instrumental in PVH's purchase of Calvin Klein Inc., disclosed that David Landau of Apax Partners (which helped finance the purchase of CKI and owns 38 percent of PVH), decided to separate from Apax and will no longer be its representative on PVH's board. Peter Solomon is also stepping down from the board this year. The 11 directors for the coming year were approved at the meeting. Rita M. Rodriguez was a newly elected director.
Klatsky lauded his successor Weber, the sixth ceo in the company's history, with whom he worked in tandem for over three decades."Thirty-three years ago, somebody decided I needed an assistant. They didn't consult with me, they didn't talk to me about what kind of person I should have," Klatsky recalled. "All of a sudden, this guy with this crazy hair who was wearing a suit that's worth more than my entire wardrobe shows up outside of my office. And there started a relationship of 33 years ... We have consistently over the years experienced the highs and lows of business. People don't know it, but we consider ourselves alter egos."
In the fiscal year ended Jan. 30, PVH's net income almost quadrupled to $58.6 million from $14.7 million in the year ending Jan. 30, 2004. Total revenues increased 4.7 percent, to $1.64 billion from $1.57 billion, while net sales rose 2.5 percent, to $1.46 billion from $1.43 billion.
Weber was brimming with confidence in his outlook, citing the success of such products as underwear, jeans and fragrances under the Calvin Klein label. Fragrances, in fact, are up more than 25 percent in sales this summer through new launches Eternity Moment, Obsession Night and CK One.
"All our licensees for Calvin Klein are energized," Weber said. "Their businesses are sensational. We are very pleased with the performance this year of our largest licenses." He lauded the Calvin Klein sportswear launch as being particularly successful.
Weber said that the momentum is continuing into the current fiscal year: The company finished the fourth quarter strong and had a solid first quarter.
"We have conservative estimates for the balance of the year ... if our trend continues, we will continue to improve on these numbers," Weber said. "Our future is bright. Everything we have accomplished today has been wonderful but easy. The tough stuff is ahead. I believe we are going to have a great run. I believe, as Bruce said, the best times are ahead."
Major growth opportunities will come from areas such as accessories and CK Calvin Klein men's and women's bridge sportswear. Calvin Klein Inc. just signed a licensing deal with Fingen SpA to market CK Calvin Klein throughout Europe and part of the Middle East.
"Last but not least, some of you wonder what is the difference in the end between Bruce and me? I am more fun," Weber quipped.When Klatsky opened the floor for questions, one shareholder held the glossy annual report that PVH put out earlier this year. "I am very pleased with your performance over the past few years," the shareholder said. "I'd like to not be a nitpicker, but I have to say that as a sophisticated investor, when I got this mailing of your annual report, I thought, it's a stunning piece of work, but why the hell spend this kind of dough to promote so successful a story that you have already? And I got a paper cut when I lifted this thing up this morning, so I was doubly angry. You might want to consider the cost of this."
"I appreciate your comments," Klatsky replied. "Rest assured, we argue about this on a regular basis. The only comment I would share with you is that there is no picture or photography that is done for the report. It's all done off of other advertising expenditures that we would have."
Klatsky ended the meeting with a personal reflection.
"I grew up with a wonderful group of people," he said, holding back tears. "I have extraordinary pride that the communities in which we operate are much, much better for our presence. The future is definitely bright ... I thank you all." The audience gave him a standing ovation.
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