NEW YORK — Phillips-Van Heusen Corp. has entered the Calvin Klein era.
For Bruce J. Klatsky, chairman and chief executive officer of PVH, the company’s annual meeting on Tuesday was a symbolic moment of the changing complexion of PVH, where the addition of several executives from its trophy acquisition, Calvin Klein Inc., blended into an overflow crowd in a midtown auditorium.
“This is the most exciting annual meeting I have attended in my years at PVH,” Klatsky told a group of about 200 investors, noting that the acquisition of CKI, completed in February, diversified the company’s brand portfolio and also provided “the growth opportunity we have been looking for.”
He compared the acquisition to the proportions of David and Goliath.
“It was a couple of intense months, but the real challenge lies ahead of us to make this acquisition work,” Klatsky said.
Since the completion of that deal, PVH has discovered that the Calvin Klein opportunity was even greater than the company had initially forecasted. Following the traditional housekeeping details of reelecting its 10 directors, approving its stock-option plan and ratifying its auditor, Mark Weber, president and chief operating officer of PVH, detailed the corporation’s performance in several key areas and outlined some new developments within the CKI organization. These included the extension of its CK watch license with Swatch Co. to include jewelry and agreements with its Italian and Asian licensees for CK Calvin Klein Jeans to roll out new stores throughout Europe (new ones opened in Amsterdam, Rome and Moscow this year) and in China.
With the conclusion of its license negotiations for a women’s better CK collection in the U.S. only days away, while the men’s counterpart is being developed in-house, PVH is poised to develop the collections into businesses that could have sales up to $1 billion each, relatively quickly, Weber said. Market sources have indicated that Kellwood Co., which recently landed PVH’s Izod women’s business, is the leading candidate for the CK license.
“We are extremely happy with the results,” Weber said. “The more time we spend looking for problems, the less we find them. As a growth vehicle, Calvin Klein is going to be extraordinary for our company.”Weber expects that the men’s main floor CK product could begin shipping in one year, in time for Father’s Day 2004 retailing, while the women’s launch would take place early next spring to take advantage of “some discomfort in the women’s market as we speak.”
Additionally, the company is planning a new product launch for its underwear brand this year under the “Pro-Stretch” category, Weber said, and indicated that 2003 could provide PVH some momentum following a difficult 2002, even though revenues of $1.4 billion for the year were only off by $27 million from 2001.
“This was once a great, stable company that is now a great, stable company poised for growth,” Weber said.
However, the meeting took a tense turn when a man who identified himself as a PVH shareholder and a filmmaker, Joe Vecchio, asked the opening question, delivering a rambling address on his current project and the need for an undershirt that better suits the needs of men and their bodily functions.
Two security guards approached Vecchio, whose business card indicates he is also connected to a company called Freedomwear Undershirts, and were apparently concerned about what he was going to reveal, but allowed him to conclude his speech.
Klatsky asked, “He didn’t put a kibosh on any other questions, did he?”
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