NEW YORK — Warnaco Group Inc. is aiming to become a Calvin Klein powerhouse.
The company on Tuesday said it agreed to purchase the licenses and corresponding wholesale and retail businesses for several Calvin Klein-related entities from Florence-based Fingen SpA for 240 million euros, or $286 million at the current exchange rate.
The deal, which is expected be completed in the first quarter of 2006, involves the Calvin Klein Jeans and accessories license for Europe and Asia and the ck Calvin Klein bridge sportswear and accessories license in Europe for a 40-year term. In addition, Warnaco will take over the worldwide Calvin Klein Collection apparel and accessories license from Fingen from 2008 to 2013.
"We'd been having opportunities to review several different companies that different investment bankers have approached us with," Joseph Gromek, president and chief executive officer of Warnaco, said in an interview. "By far, the Fingen businesses that we are acquiring were at the top of our list. For us, this was a very strategic move. It completes our company in terms of the Calvin Klein aspects. We are focusing on our core competencies, which is manufacturing jeans. It gives us the geographic expansion and also gives us a direct-to-the-consumer channel, and it also expands our relationship with the Calvin Klein organization."
In fiscal 2005, Calvin Klein Jeans is projected to generate sales of about $240 million in Europe and Asia.
The deal will have no impact on the existing U.S. licenses with Kellwood Corp. for the Calvin Klein women's better sportswear line and with G.A.V. for the ck Calvin Klein bridge sportswear business.
Warnaco already owns the rights to produce Calvin Klein underwear and also has the U.S. license for the Calvin Klein Jeans label. The deal will likely help boost the brand's overall growth efforts worldwide.
"We always like to have as many businesses within one licensee as we can," said Tom Murry, president and chief operating officer of CKI. "It makes it easier to coordinate ... From a strategic and a distribution standpoint, it's very advantageous."
"Over time, with the global network and organization that Warnaco has in place, the operation of the businesses will be more efficient and the synergies and coordination aspects will be better," he added.
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