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NEW YORK — Calvin Klein has been on a roll, and now it’s adding another wheel.
This story first appeared in the August 25, 2008 issue of WWD. Subscribe Today.
The fashion house today will break into e-tailing with an enhanced Web site that will sell merchandise from the women’s and men’s better lines, including sportswear, coats, dresses, jeans, underwear, sunglasses and watches, as well as a selection from Calvin Klein Home, from bedding to table linens, flatware and glassware.
The launch comes as the brand has become more aggressive about its own retail expansion worldwide, both with Collection stores and with Calvin Klein better stores. Tom Murry, president and chief operating officer of Calvin Klein Inc., said the timing of the launch was the result of a combination of factors, particularly the 10 specialty retail stores CKI opened in the past 12 months.
Murry said these stores “provide the platform for fulfillment. Initially, the product that will be offered on the Web site will be reflective of product that is also available in our specialty retail stores.
“We have also been observing the successes and challenges of other branded sites over the past several years,” Murry added. “We learned a lot. I think we are better prepared to do it now than we would have been two or three years ago.”
Calvin Klein, which is generally known for being ahead of the curve, is joining the e-commerce game a bit late. Polo Ralph Lauren has been selling merchandise online since 2000 and recently added an e-commerce element to its Rugby Web site. Gucci launched e-commerce in 2002, and the Web as a sales channel has gained steam over the last 18 months with recent designer entrants including Prada, Louis Vuitton, Yves Saint Laurent and Stella McCartney. In the mainstream, The Limited finally broke down and will add e-commerce to its Web site in September.
The incentive is clear: In today’s down economy, the online channel is one of the few retail areas still doing well. Perhaps fueled by the increased cost of gasoline and certainly by consumers’ greater comfort with technology, U.S. online sales are expected to climb 17 percent to $204 billion this year, $34.5 billion of which is projected to be from apparel and accessories, according to Forrester Research Inc.
Adding this channel of distribution to the business will create another growth driver for Calvin Klein parent company Phillips-Van Heusen Corp. Although PVH reported a decline in second-quarter earnings last week, Calvin Klein’s numbers remained strong.
“We are very pleased with our second-quarter results, particularly given the current economic environment,” said Emanuel Chirico, PVH chairman and chief executive officer. “Calvin Klein remains a key driver of our growth and profitability as it continues to outperform our expectations, both internationally and domestically. The broad global presence and continued international growth of Calvin Klein has helped to offset the impact of the economic downturn in the U.S. on our heritage brand businesses.”
The new Web site offers Calvin Klein’s better-priced white label merchandise, on which Calvin Klein is focusing its attention. Last week Calvin Klein moved its white label women’s sportswear license to G-III, which already holds the Calvin Klein licenses for coats, suits, dresses and performance activewear.
Calvin Klein white label had been underperforming for years, with both PVH and management for Kellwood Co., which held the license, saying they were disappointed with its lackluster results. Kellwood, which was taken over by Sun Capital Partners earlier this year, still holds the bridge ck Calvin Klein license, which could be the next to change hands.
The site’s selection mirrors that of the Calvin Klein better stores, featuring apparel and accessories designed specifically for the site and stores by a CKI in-house design team, which is led by Jacquie Wolfson, Calvin Klein Retail’s creative director.
“In our research of specialty retail and retail in general, we found that it’s important to have a crossover component for consumers shopping in the stores, from online to the stores, and from the stores to online,” said John Walsh, president and chief operating officer of Calvin Klein Retail.
Walsh added that the site starts out with 1,400 stockkeeping units, with plans to build on that in the future.
The site was designed by the interactive agency Createthegroup, whose other clients include Balenciaga, Burberry, Vuitton, Marc Jacobs and Stella McCartney. GSI Commerce Inc., meanwhile, is handling areas such as Web hosting, fulfillment services and the customer care call center.
The site is as close to the actual retail experience as possible: Visitors can zoom in and out on product, see the garment in their choice of color and create wish lists. Shipping is free for purchases of more than $200.
“The site really brings true the lifestyle component we try to create with our specialty retail stores, as well as completely delivering upon the Calvin Klein aesthetic,” Walsh said. “You truly get the brand experience when you are shopping on the site.”
Currently, the site is exclusive to the U.S. market. International visitors to calvinklein.com will be redirected to the company’s global branding site.
To kick off e-commerce, CKI is planning a sweepstakes program next month, where shoppers registering on the site can qualify for a $1,000 online shopping spree.
“We see it as a key volume opportunity for us,” Walsh said. “It creates a great vehicle for us to grow our retail business and grow the retail presence in the U.S.”
Murry added, “It’s one of the fundamental components to a well-balanced and successful brand in this era.”
The site currently doesn’t offer items from the designer Calvin Klein Collection label and the bridge ck Calvin Klein line, but Murry said that could change down the line. “We will learn a lot next week, next month and next year, and we will just keep learning and modifying the site based on our learnings,” Murry said. “I wouldn’t rule out any of the product categories [of CKI] being offered on the site in the future.”�