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Dress Furnishings Remain Key Driver for PVH Corp.

A multitude of owned and licensed brands provide stability and positive cash flow for the corporation.

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If it wasn’t for Van Heusen, there would be no Tommy or Calvin — at least not for PVH Corp.

The revenue generated by the dress furnishings division, led by Van Heusen, the country’s largest-selling dress shirt brand, has provided the corporation with the stability and assets it needed to acquire two high-profile designer brands over the past decade. “If it wasn’t for the cash flows and the consistency of the heritage business, we wouldn’t own Calvin and Tommy today,” said Emanuel Chirico, chief executive officer of PVH.

The corporation has been a factor in the nation’s dress shirt business since 1881, when Polish immigrant Moses Phillips started selling hand-sewn shirts to coal miners in Pennsylvania. What really put the company on the map, however, was when Moses’ son bought the U.S. patent for a soft-folding collar shirt from the Dutchman, John Manning van Heusen, in 1919.

 

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Since that time, PVH has grown to become the nation’s largest dress furnishings producer, amassing an industry-leading 47 percent share of the dress shirt market in department and chain stores, and a 50 percent share of all neckwear sold in this country.

The business continues to be strong, buoyed by updates in silhouette, pattern and color — a strength that was evident in the fourth quarter, when sales within the heritage dress furnishings business grew 8.5 percent to $145.6 million.

The company’s Dress Furnishings Group is an umbrella division that encompasses both owned and licensed dress shirts, neckwear and underwear labels. The dress shirt group is made up of six owned brands — Van Heusen, Arrow, Eagle, Izod, Calvin Klein and Tommy Hilfiger, along with 14 licensed brands, including Kenneth Cole New York, Sean John, JOE Joseph Abboud, Michael Michael Kors, Michael Kors Collection, Chaps, Donald J. Trump Signature Collection, DKNY, Elie Tahari, Nautica, Ted Baker and Robert Graham.

“Geoffrey Beene was one of the first brands that we licensed,” said Mitchell Lechner, president of the PVH Dress Furnishings Group, “while John Varvatos is one of the newest additions to our stable of brands. Each of our brands has its own design aesthetic and lifestyle, incorporating unique modeling, fabrications, finishes and trims to engage and appeal to a wide range of customers.”

Price points for dress shirts, both owned and licensed, reflect that diversity, and range from $18.99 to $250 retail, he said.

“Growth in this category is driven by newness and by continuing to engage and excite the consumer with new fabrics, patterns, colors and modeling details,” Lechner added. “In addition to offering trend-right product, fit has also proven to be a key component for future growth. With regular, fitted and slim-fit dress shirts available, our consumers are able to find a dress shirt that suits their physique and individual sense of style.”

Within the neckwear group, there are the same six owned brands, as well as 30 licensed brands. “Jones New York, DKNY, Michael Kors, Ike Behar and Ted Baker are some of the brands that have been wwith us the longest,” he said. “Our newest additions are John Varvatos, Valentino, Robert Graham and Marc New York. Between our owned and licensed brands, we cover all tiers of distribution, offering price points from $14.99 to $135.”

The underwear group consists of three owned brands — Tommy Hilfiger, Izod and Van Heusen — in addition to three licensed brands: Geoffrey Beene, Chaps and Michael Kors. “We are continuing to grow our business by expanding our product offerings, adding new silhouettes and providing new fabrics options (luxurious and/or technical fabrics),” he said. “This provides us with a strong foundation to further expand our channel of distribution and drive sales.”

Lechner said that today underwear and socks are the hottest businesses in furnishings. “Shirts are good, neckwear is OK, but underwear and socks are on fire,” he said. The business is being driven by color, which men are embracing in large numbers.

With so many brands in its repertoire, how does PVH differentiate between the labels? According to Lechner, it’s all based on the lifestyle of the brand.

“The lifestyle is determined by its aesthetic, price point and market that it appeals to,” he explained. “We strive to ensure that there is always a synergy between our dress shirt and neckwear offerings. Collaboration between these two divisions is essential to ensure the authenticity and aesthetic of each brand.”

Owned and licensed brands are both managed in a similar manner, he added. “We have dedicated teams for each brand that specialize in sales, marketing, planning, operations, product development, design and field service. Our success has come from managing each label individually based on its unique brand DNA and values. This strategy is essential to gain market share and afford us new opportunities for growth.”
Lechner has seen a lot of growth during his tenure with the company.

“I have been with PVH Corp. for 28 years,” he said. “The early acquisition of Izod [in 1995] and Bass [in 1987] changed the face of our company. The acquisition of Calvin Klein transformed who we are, while the most recent acquisition of Tommy Hilfiger has truly made us an international/global corporation. Throughout all of these changes, PVH Corp. has remained true to its core values. Central to our identity is a genuine commitment to corporate responsibility, a fundamental component of how we run our business that is directly linked to our strategies and practices.”

And through it all has been one constant, Allen Sirkin, who is viewed as the architect behind the creation of the company’s dress shirt licensing model and the catalyst to its monumental shift from a one-brand dress shirt company to a multilabel apparel industry behemoth.

“I have worked with Allen for the past 27 years,” said Lechner. “Allen has always been an integral part of what we do at PVH Corp. His vision and leadership have had a dynamic impact on our business and its success. Allen has the ability to look at situations from multiple perspectives, which has allowed us to succeed in many forums. His insight and positive outlook is something we all appreciate. Allen is the type of leader that is easy to respect and admire.”

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