Emanuel Chirico is living the dream.
As chairman and chief executive officer of PVH Corp. since 2006, Emanuel Chirico has taken the $9 billion apparel company to new heights, changing the company’s complexion by acquiring several global brands, taking a leadership role in corporate responsibility, and amassing numerous awards. The company has been certified as a Great Place to Work, Forbes cited it as one of the best employers for women and diversity, and Fortune named it as one of the world’s most admired companies.
PVH has also been on the forefront of corporate responsibility, and Chirico, a 25-year PVH veteran, has received the Committee for Economic Development Leadership Award and the Responsible CEO of the Year Lifetime Achievement Award from Corporate Responsibility magazine. He’s also been named a Father of the Year by the Father’s Day Council, Person of the Year by the American Apparel & Footwear Association and Top CEO by Glassdoor.
On Tuesday night, Chirico will receive the Edward Nardoza Honor for CEO/Creative Leadership.
During his tenure as ceo, PVH has made some major acquisitions, namely Tommy Hilfiger and Warnaco Group, and the corporation is on the hunt for another major global brand to add to its stable, which also includes Calvin Klein, which PVH acquired in 2003.
Chirico takes this commitment to his employees and the community seriously and in a broad-sweeping interview at the firm’s New York headquarters, discussed issues that are most meaningful to him, how a boy from the Bronx made it to the top of one of the biggest apparel companies in the world, and where PVH is headed.
WWD: As a leader, where do you get your inspiration and which business leaders do you admire?
E.C.: I don’t usually look at business leaders for guidance, as far as leadership skills. I think there are great ceo’s out there, and I think they’ve done amazing jobs. When I think about leadership, I guess I look to more historical figures. I like to read autobiographies and biographies. Lincoln, Theodore Roosevelt, Franklin Roosevelt and how they had to [work] through challenging times. What I do doesn’t correlate to that, but I think there are a lot of leadership lessons there. Clearly when I took the [president’s job] in 2005, I wasn’t as experienced, I was a different person. I didn’t have some of the lessons I’ve learned now. You grow with the job. You make mistakes, and you try to learn the most from your mistakes. And you try to keep them under control. You do recognize decisions that you made that you wouldn’t do the same way today. It’s part of the experience that comes with that. Trying to bring a broad spectrum of leadership skills to the job, and really thinking about where do we want to take the company in the next three years, what’s the path to get there. And if you have to make some tough decisions, having the courage to make those decisions. As long as you’re moving the ball forward, you get people to follow you.
WWD: Do you take leadership classes or study leadership?
E.C.: I’m from the Bronx, we go to school in the street. Short answer, no. There are lessons to be learned. Seriously, you observe a lot. I think history is a great teacher, looking back at how people dealt with the issues, how they dealt with problems, even when they failed. How they made the mistakes, how they made their decisions.
WWD: How do you describe your management style?
E.C.: I try to make as few decisions as possible. It’s not that I’m afraid to make decisions. You lay out the road map, lay out the strategy, let the teams go out and really execute against that strategy. When you do that, I think people are on the same page and understand where you’re moving. I think it’s critical that people buy into the strategy, and you’re not stuck in your own strategy. By that I mean I’ve always tried to have a long-term vision for the company and how it’s going to move forward. I’ve always tried to be flexible about how we got there and how the decisions were made and allowed the brand teams to be able to work within that strategy and have the flexibility. If you think about PVH, there are three businesses: there’s Calvin, Tommy and the Heritage businesses.
What we’ve tried to do is lay out a path for the company and allow each of those business units to fit into that strategy as they’ve gone forward. They’ve taken different routes, although with the same broad strategic initiatives, but they’ve taken different routes to get there and allow the management team closest to it to really drive it. We’re really trying to drive the decision-making down to the lowest level that is closest to the issue, the customer, whatever it is. I think that’s worked really well for us. Every once in a while, you’re going to stop and say, “We’re going to do this.” And you have to stop the tracks and get people to refocus when they go off. But I think for the most part, it’s been pretty smooth sailing.
WWD: Which was the hardest business to integrate into PVH?
E.C.: Warnaco. Not even close. I think the two companies were totally culturally different. The management styles were different. The drivers and the goals were different. Every deal we did before we did Warnaco, when we were announcing it, people thought the next deal would be Warnaco. The outside market looked at it and said, “Wow, you’re just bringing the Calvin Klein brand together. That’s the easiest deal to get done.” We recognized it very early on. It wasn’t necessarily what they were doing was bad, per se, it was different and they had a different goal. We really had to change a lot of it. They were somewhat more short-term driven. It was all about driving the bottom line. There wasn’t as great a focus on strengthening the brand. There wasn’t as great a focus on some of the corporate responsibility issues. It was much more tactical, and I think we were a little more strategic, and the two cultures really clashed in the beginning.
WWD: How’s it going now?
E.C.: It’s gone very smoothly. We had to make a lot of changes. There were some really good people there, especially internationally. We’ve really allowed those businesses to grow and invested in those businesses internationally. I’m talking about their South American/Brazilian business and their Asian business, in particular. In Europe and North America, we really had to make some significant changes.
WWD: How disruptive is all this merger and acquisition activity to the company?
E.C.: Everybody wants to do the big deal. One big deal is easier to do than three small deals. What you find is you can be doing a $3 billion deal like Tommy or Warnaco, or you could be doing a $300 million deal. Both will take the same amount of effort from an integration point of view and a system point of view. And you don’t get the same bang for the buck. My experience would be bigger is better from a purely integration point of view.
WWD: PVH always integrates the companies it acquires. There are companies that buy businesses, and then leave them alone.
E.C.: What we try to do is integrate systems, back-office, anything that doesn’t touch the customer. Anything that touches the customer, we try to keep it brand-focused. As we’ve done big branded deals, like the Tommy deal, we’ve integrated the back office, but that front part of the business, we’ve invested more and put more resources against that and kept it separate and distinct. The last thing we want to do is homogenize the business.
As we’ve brought in licensed businesses, like we brought the Tommy Hilfiger China business into the fold a little over two years ago, we integrated that with the Calvin business, and we integrated the back office. In that case, there was a fair amount of integration across the board. We built up the resources in China, in order to support two businesses, rather than one. Even though the Tommy business was half the size of Calvin, the potential for Tommy is to be as big as Calvin. Both are growing pretty strongly. There you really wanted to have the infrastructure to support the growth as we went forward.
What I did learn, each deal is a little bit different and you have to understand the strengths of what you’re buying. When you’re buying a brand like a Tommy Hilfiger or Calvin Klein brand, you’re buying not only the brand and the business, you’re buying the people and the expertise to drive that business. There’s got to be a reason that you’re taking that in-house. The last thing we wanted to do when we bought Calvin was to Van Heusen-ize Calvin Klein. Same thing with Tommy Hilfiger. We didn’t want to Van Heusen-ize Tommy Hilfiger. It was critical that we kept that, and it sold the management teams. That was so important to our success. The Tommy deal was 2010, the leadership that was there then is the same leadership that is there today. Fred [Gehring] retired after five or six years, but Daniel Grieder who’s running it was working for Fred, and Gary Sheinbaum, who’s running North America, was there when we bought the company. We’ve been able to maintain that leadership. Even the Calvin Klein business, that was 2003, when we did the Warnaco transaction, Tom Murry was still running Calvin Klein. It was Tom’s decision to retire, and we brought in a new team. A great many had been working for Tom and the Calvin Klein brand.
WWD: Do you have an interest in acquiring a European brand as your next one?
E.C.: We’re looking for a strong brand, it could be a European brand, it could be a U.S. brand. We would hope given the infrastructure we have that anything we would buy, we would try and take it across the ocean. Given our platform in Asia, Europe, South America and North America, if we bought an asset, we’d want it to be able to plug into each of those regions.
WWD: Do you think it would be a $3 billion acquisition?
E.C.: Hopefully it would be cheaper. Our hope would be to add a third leg to the platform of Calvin and Tommy. It’s got to be the right brand at the right time at the right price. You need all those things.
WWD: What did you think of Michael Kors’ acquisition of Versace?
E.C.: I think it’s a great brand, and great brands are expensive and they proved it on both levels.
WWD: Were you interested in Versace?
E.C.: Interested yes, but it got a little frothy from an evaluation point of view. And I do think it’s a great brand.
WWD: Would that fit into your criteria?
E.C.: Yes, it would if you talk about a brand that had global appeal that works in all regions of the world and has a great heritage. Without knowing the financial details, it’s clearly a great brand that they bought.
WWD: How far away are you from acquiring another brand?
E.C.: It’s nothing close.
WWD: Tell me about your background and what prepared you for this role?
E.C.: Born and raised in the Bronx. Attended Cardinal Spellman High School, St. Anthony grammar school, Fordham University. Very Catholic education. That probably had the biggest influence on me.
WWD: Was it very strict?
E.C.: Strict, yes, but you felt very comfortable in it. You knew you were being cared for. It was the Seventies, Catholic social justice was a key driver. On my desk is a saying, “To much has been given, much is required.” I think that’s something that’s always stuck with me.
WWD: Were you a good student?
E.C.: I was a good athlete. I played basketball, I was a solid B student who could have worked a lot harder and been an A student.
WWD: Was it because you were tied up with basketball?
E.C.: It was because I was a kid from the Bronx. I was a good student, and never in any kind of trouble. But I wasn’t as focused as I could have been until I got to college.
WWD: What did you study in college?
E.C.: I studied finance and accounting. I commuted. I have three boys: 34, Dominic; 32, Michael, and 28, Vinny. The craziness of college recruiting and visiting campuses. Some parents love it, and I hated it. Every place was supposedly so hard to get into, I didn’t enjoy it. When I grew up, I did my college application in pencil. I went to Catholic high school. There were a couple of choices — Fordham, Manhattan, St. John’s, Iona. The thought of going away and my parents making all these sacrifices to send me to school. My father was, “Why do you need to go away? There are colleges here. You get a job and you work. If you want to play sports, great.”
WWD: Did you play basketball at Fordham?
E.C.: I tried to play for Fordham. I played my freshman year. I was either too short or too slow to play basketball. One dream died. I always tease everybody, the three great American heads came out of the Bronx: Ralph Lauren, Calvin Klein and Manny Chirico. (laughs) All around the same general area.
WWD: You had to give up your basketball dreams?
E.C.: They died hard.
WWD: Did you do well in accounting?
E.C.: I did well enough to get a job at Ernst & Young out of school. I stayed there for 14 years, I became a partner after 10. I ran the retail and apparel practice. I was always involved in the industry. And PVH was one of my clients, and I joined PVH in 1992, the year Larry Phillips announced his retirement as ceo. Bruce [Klatsky, who succeeded Phillips as ceo] hired me, and Irv Winter was the chief financial officer. Irv was a couple of years away from retirement, and they were looking for someone to come in as controller with the intention that I was being groomed as cfo.
WWD: I assume they had to offer you something interesting for you to leave a partnership at Ernst & Young?
E.C.: Yes, I always liked PVH’s culture. It was a big company for the apparel industry, but always had a sense of family. The Phillips family had a long paternal relationship with the associates and Bruce had maintained that. It was very comfortable from that point of view.
WWD: How quickly did you rise?
E.C.: I came in as controller, a couple of years later I became cfo. In 2003, I became president.
WWD: Was that unusual to become president from the financial side?
E.C.: Back then I think it was, more so than today. Before, it was more sales and merchandising, the merchant princes of the world, less coming from the financial side.
WWD: Did you have a feel for the product? Did they see that in you?
E.C.: No. (laughs). That was not the lead item on my résumé. I had an appreciation for the product and the process. In some ways it probably served me well. If this was a mono-brand company, I’m not sure I’d be the right person to be ceo. That takes a certain skill set. This is really a portfolio company — Calvin, Tommy and Heritage Brands — where we have divisional ceo’s who are running businesses that are as big or bigger than most of the public companies in our space. The Calvin Klein business at retail is a $9.1 billion brand, and the Tommy Hilfiger brand at retail is $7.4 billion. Steve Shiffman (ceo of Calvin Klein Inc.) and Grieder (ceo, Tommy Hilfiger global and PVH Europe) are running businesses that are bigger than most other apparel companies. My point being is they’re running the brand, the merchandising, the marketing plans. My job is to challenge those plans and also to have the strategy to pull the whole thing together. One of the skill sets is a recognition on the part of the ceo of the company that he has the humility not to get involved in those businesses. Especially in this industry.
Let’s be honest: This industry has a lot of appeal. It’s sexy. It’s fun being at the runway shows. I could be out three times a week at some industry event representing one of our brands, if I chose, and if I didn’t have my family. What I think is important to recognize is the brands’ ceo’s really have to be the face of the brands, along with the creative directors. It’s Daniel and Tommy Hilfiger and Steve and Raf Simons who have to be the face of the brands. If I’m at the fashion shows, which I am because I’m there to see it, I’ve got to blend in with the wallpaper at times. I think that is part of our success. If you want great talent, you have to give them the room to run their business. We really have great talent.
WW: How involved were you in the decision to bring in Raf Simons as chief creative officer of Calvin Klein, because that was a big risk to the company?
E.C.: It was Steve’s recommendation. I had to approve it. I met with Raf throughout the process. It was not only a big change and investment we were making, but the idea of bringing in someone of that skill level. Recognizing there would be a huge cultural change. So yes, I was intimately involved in that decision.
WWD: You could have put the kibosh on it if you didn’t think it was right.
E.C.: Sure, if I didn’t think it was right or if he didn’t have the right personality. It’s worked really well so I’ll take some credit for it. You make those decisions, you keep evaluating those decisions, and you hope that you stay on the strategic course.
WWD: Do you consider yourself a risk taker?
E.C.: Yes, I think the biggest apparel deals in the industry were Warnaco and Tommy Hilfiger, both $3 billion. I’m not aware of another one larger. Maybe there is. If they are not the two largest, they’re two of the largest in the industry. Obviously there was a level of risk taking that went along with it. I think it’s important to be willing to take the risk, but not to do it in a way that puts the ship at risk. When we did the Tommy transaction, we doubled our size overnight and we took on a significant amount of debt. I think we did it in a very intelligent way. It was long-term debt that could be paid back more quickly if we did well. It didn’t have any penalties built into it. In three years, our balance sheet was back to where it was before, and we even were a stronger company. We did the same thing when we did Warnaco. It was a big transaction, but we built the capital structure in a way that didn’t put pressure on the business, and gave us the ability to quickly pay back the debt over a three-year period. They were at a point now where our balance sheet was where it was pre-deal. (Warnaco was acquired in 2013). After four years there, we were really in very good shape.
That’s why the last 12 months, we’re talking how we’re well-positioned to do another deal. During that time, we bought back licenses for Calvin and Tommy, and added to the business portfolio and stayed on our strategic direction. And, despite the world and what’s going on, we continue to grow in a not-so-easy environment.
WWD: Where are the opportunities for Calvin Klein and Tommy Hilfiger?
E.C.: I think the biggest opportunities for Calvin Klein continue to be international because the brand is so big in the U.S., and I think the opportunity is Europe first. It’s a region, if you use Tommy as a reference point, where we can more than double our size. And we have doubled our size since we took the business back from Warnaco. They had the European license, we took the business back. It was doing $500 million. Today it’s doing just about $1 billion in sales. (Calvin Klein Jeans, Underwear and related categories). It was a break-even business when we took it, and today it’s a $1 billion business, earning 12 percent. It’s been a strong business. There continues to be significant growth within Europe. The biggest opportunity for Tommy is in Asia. We would expect our Tommy China business to double in size over the next five years.
WWD: Has Raf’s hiring helped Calvin Klein’s European business?
E.C.: I think that’s helped. But I think the brand is so strong. As awareness of the brand, consideration and intent to purchase is so strong, we’re filling in the potential for the brand. There are many product categories that are successful in the U.S., but haven’t been introduced in Europe…the women’s sportswear, men’s sportswear, tailored. We’ll do women’s ourselves for Europe; men’s and women’s active performance is just launching in Europe and Asia, our accessories business is smaller in Europe and Asia, and we see that as two big growth vehicles for us.
WWD: What price range will these businesses be in Europe?
E.C.: These are at the premium level within Europe. Probably twice the price points than the U.S. market is at. That’s how we position both Tommy and Calvin in Europe and Asia. Anywhere from two to three times the price points.
WWD: How do you describe PVH’s culture today?
E.C.: One of the challenges when you talk about these acquisitions, everybody thinks they just happen. I think the area where everybody underestimates acquisitions is culture. We talked about the different cultures between PVH and Warnaco and how to bring those together, and it took a lot of effort. But the other thing is communication. When I joined PVH in 1993, I was able to get a sense of what’s going on in the office by walking the floors. We were 5,000 employees, it was on one large floor (at 1290 Avenue of the Americas), 150,000 square feet. We had everybody together. There was our administrative center in New Jersey, and I was there once a week. You walked the floors, you’re able to communicate, if there was an issue you dealt with it. But when you have 40,000 employees on five continents, and you have to communicate with people, it’s much more of a challenge and it has to be much more thought-out. You have to think about how you communicate and how you make the connections.
WWD: Is there a PVH culture, or separate cultures for Tommy and Calvin?
E.C.: I think it’s critical that there’s a core corporate culture that is PVH, but you allow each of the brands to have their own spirit and vision as they lay into that. We talk about all of our brands and divisions and business units and we always talk about our five core values: integrity, accountability, passion, partnership and individuality. We talk about those five values and how they blend into our business strategy and our daily activities. I always make them part of our communication. Sometimes subtly, sometimes directly, sometimes highlighting one core value when it’s appropriate. It’s constant communication. Then you have to walk the talk. If you don’t live it and have transparency and allow people to really understand what’s going on. And if there’s an issue, [that] it’s being dealt with in an appropriate way, you really have to walk the talk. We try to communicate them (core values) and build them into our core strategy and they should be second-nature to us. And then allowing each brand to fit within that.
WWD: Do people feel they’re working for Tommy or they’re working for PVH?
E.C.: I think if you ask someone at the Tommy offices and ask who they work for, they’ll say they work for Tommy. That’s exactly what we want them to say. We want them to have that spirit. I’ve been surprised how the PVH identity has become the corporate umbrella. People really want that. People say, why do you have corporate responsibility? Milton Friedman would have said, the only reason that corporations should be in existence is to have returns for their shareholders to drive profitability. We don’t believe in that. I believe you can’t be a good corporate citizen if you’re not running a good corporate business. You need to be successful financially in order to be successful from a corporate responsibility perspective. You can’t have all these great virtues if you’re not a successful business. But being a successful business means more than just what your bottom line is and how strong your balance sheet is. I think it’s how you conduct business around the world, and I think people want to work for companies they can be proud of.
WWD: Do you think all your sustainability and corporate responsibility initiatives are apparent to your employees?
E.C.: This is the apparel business, stuff happens. It’s not always easy and it doesn’t always run like a top. If you’re going to source goods out of Bangladesh, there’s going to be floods and goods are going to be late at times and you’ll have to react. If you want to have a problem with PVH, do something that’s cutting the corporate values. Do something that’s not following the way we source goods or taking shortcuts.…People just recognize that’s not what we do. When we’re talking about sourcing strategy, where we’re making goods and our production schedules, at the same time, we’re also talking about what’s our human rights records in these facilities, do we have a problem in these facilities? And we recognize all these facilities have issues, but we’re there to make the situation better for the workers in those factories and to run the business in a way that makes our partners successful so they can do the right things.
WWD: Are you manufacturing all over the world?
E.C.: Yes, you name a country. We’re in Africa, we’re in the Caribbean, we’re in South America, we’re throughout Asia, China represents about less than 20 percent, Bangladesh, Vietnam, Sri Lanka, India, Africa — sub-Sahara and Ethiopia.
WWD: What do you think of the new U.S.-Mexico-Canada Agreement?
E.C.: I’m glad it was signed. I’m glad it’s tri-part. I think there are some good additives that the (Trump) administration put in. I don’t think it needed to be as painful as [what] it went through. There was a way to get here without all the drama. The biggest issue I have with all the trade is the total uncertainty. We’re sitting here in the apparel industry, and I was with a number of my executives in the industry a couple of nights ago at a dinner that Macy’s Inc. had, and everybody’s saying the same thing. Everyone wants to be proactive to figure out what’s going to happen with China. Right now there are no tariffs on apparel. We’re all trying to figure it out. We worry that they’re going to be imposed. We don’t know if it will be January or some later date. Will it be 10 percent or 25 percent? That’s no way to run a business. It’s not a way to run the world’s leading global economy.
WWD: Is that why you cut back your Chinese production?
E.C.: We’ve been on a path to reduce our exposure to China because we felt China is moving away from apparel over time, and we felt there are more strategic places for us to be. Still, it’s a big country for us. Four years ago we were close to 40 percent. Now we’re 20 percent.
WWD: Do you have plans to open more Calvin Klein stores?
E.C.: Around the world, we operate more than 1,000 stores. So we have globally Europe, Asia, South America, Australia, U.S., we have Calvin Klein Jeans stores, Calvin Klein Underwear stores, Calvin Klein Accessories stores and Calvin Klein Sportswear stores. It’s a combination of owned and operated. We own and operate around 1,000, and there are 500 that are partner-owned, depending on the country.
WWD: Do you still believe in brick-and-mortar in the U.S. for Calvin Klein?
E.C.: We do, we operate a number of stores here, both full-price and outlet. I think there’s an important component connected with the consumer. It’s a higher return business for us, retail. The financial returns are excellent. We’re managing that as the fastest-growing channel for us is digital. When I say digital, it’s our own digital sites and selling to our partners, such as macys.com and lordandtaylor.com.
WWD: Calvin Klein Jeans and Underwear are on the Lord & Taylor site on walmart.com. How is that doing?
E.C.: It’s still very small. They’re looking to try and expand it. There’s potential. It (Lord & Taylor) is a great brand and he (Richard Baker, executive chairman of Hudson’s Bay Co.) is trying to make it a digital brand, while keeping some level of brick-and-mortar. The Fifth Avenue store going away is sad on one level, but the financial realities of the space are worth so much more than the store itself. I think Richard had to make the decision he did. It was the right decision for his shareholders. When you see an iconic store leave Manhattan, it’s sad to see it go.
WWD: As far as your sustainability initiatives, what are you passionate about?
E.C.: For me, there are three key areas: There’s sustainability as it relates to our impact we have on the environment, there’s sustainability directly in our supply chain. The impact we have on people on our supply chain, who are working in our supply chain, who may not necessarily be our employees. But a million and a half people are working in factories and supply where we have a direct impact. Those are the two areas we’re very focused on. Having a positive impact on the communities where we operate and the communities where we live. The other area is our own people, under the banner of our diversity and inclusion initiatives. We’ve tried to take a leadership role in that from training and investing in people. At PVH, 65 percent of our workforce is female, more than 50 percent of our vice presidents are female, and four out of 11 of our board members are female.
WWD: Is that a big initiative to make sure you have a diverse workforce?
E.C.: There’s an awareness making sure the candidate pool, not only for the board, but for executive positions, includes a diverse pool of talent, male, female, minority. We’re all human beings and there’s unconscious bias built into everybody. We try to take that out of the equation as much as possible as we do recruiting for the board and the executives. We’re looking at a broad swath of talented people. Our last two board members were female. That wasn’t the driving force. The driving force was to make sure we had appropriate representation. If you look at our statistics against the general model, we tend to be somewhat overrepresented in those minority pools on a regular basis, but we can still do a better job. As you work your way up the organization at the vice president level, where we’ve done an excellent job with female representation and need to do more, I think we need to do more with minorities as well.
WWD: Were you mentored and do you mentor others?
E.C.: I’m not good at it. We have a bunch of really key programs. I’m always giving the groups career advice. What I always say to everybody is they have to take control of their careers. I think people don’t take control of their careers. Too many people let their careers happen to them. They don’t think about where do they want to be in five years. Are their expectations realistic? They don’t think about, “If I want to be the cfo of the company, maybe I shouldn’t be in design.” Seriously, if you have a goal and you want to move somewhere, let people know what it is. What I try to explain to people, if you let me know what you’re trying to do, now I’ve got skin in the game for you. I know you have a goal. I may have to counsel you, I may have to coach you, I may have to mentor you, I may have to tell you “that’s just not going to happen, but here’s the other alternatives,” but there’s a dialogue going on. As opposed to you want something and you expect you should get it in three years, and three years later, it’s here and it’s not happening, and everyone’s disappointed.
Too many times I’ve heard people say, “Why is Joe leaving, or why is Mary leaving?” They thought they should be this, but why did they think that? Their expectation wasn’t logical. Did anybody talk to them? How did they get there?
What we’ve tried to do is build that into the performance process. And get away from once-a-year evaluations and make it much more of an ongoing process where people are “forced” to really engage. And managers and vice presidents are evaluated on how they’re coaching their teams. And one thing that’s really helped this whole process, we’ve put in a very broad, very deep succession-planning process. By that I mean, this is who can do your job, you’ve got seven people reporting to you, who can do their jobs? Is there someone in the organization? If it’s a technical job, we may have to go to the outside, we want to make that as few as possible. We want to have internal candidates for the job. It forces us to think about the future and the talent pool, and then forces people to coach people about their careers and getting people to think about it. We started it about seven years ago. As soon as we talked about it, everybody pushed back on it, and thought “are you trying to replace me? But then we said, “You want to be promoted? So who’s going to do your job when you get promoted to vice president?”
I don’t want to be sitting here, saying Fred should be vice president in charge of merchandising, but have no one to be the divisional manager so we can’t promote Fred. As soon as that clicked with people, all of a sudden, everybody started to embrace it. It’s built into the annual strategy process that we go through. It starts way down at the management level and it goes right up to the board. We’re presenting, along with my senior management team, we’re reviewing that with the board: Where do we have holes, where’s the talent? Where do we need to bring resources from the outside? Where do we have high potentials? And the board is engaged in that conversation. That’s really been something that’s paid huge dividends for us. I think it shows in our lack of significant turnover, particularly at the executive level at PVH. If you look across the board here, the amount of unforced turnover is very low, and the amount of turnover is very low.
WWD: What about bringing young people in? Is this a company that has a lot of young people?
E.C.: I was shocked. I was told that 55 percent of our employee base is under the age of 32.
WWD: You see in some companies that the young people are running the show because they’re so digitally savvy and that’s where the action is. Is this still a company where the more experienced and senior employees are the leaders?
E.C.: One of the areas where we’re bringing in talent from the outside is the whole digital space…young and old. It’s been embraced from our senior leadership. From Daniel at Tommy to Steve at Calvin to Ken Duane at Heritage Brands. They’re driven by what’s going to drive the consumer and what’s going to move sales. I would say round numbers, 75 percent of our marketing is digital, whereas five years ago, 75 to 80 percent was print and television. Today it’s all shifted online, and it’s become the biggest part of our marketing efforts. It’s required us to go out and bring in a different set of talent. It’s required us to make some really serious investments in people.
WWD What are your main outside interests, and how do you relax in in your spare time?
E.C.: I always loved sports and played a lot of sports and played basketball all the time. Obviously at 60, I’m not playing basketball. At 50, I found golf. I play a lot of golf with my wife. My sons play, my brothers. It helps me relax. I’ve got two granddaughters. They keep me jumping. I’m pretty involved with the community. I’m on (the board of) Montefiore Hospital. I try to give back to the Bronx as much as possible. I’m on the board at Fordham. My wife and I have a foundation and we try and focus on the Bronx and lower Westchester. I think the Bronx is the underserved borough in New York. It doesn’t get the resources it needs to support the people there. My wife is from Mount Vernon. We live in Bronxville.
WWD: Are you comfortable with high-tech, and do you participate on Facebook, Instagram?
E.C.: I’m connected. I’m on Facebook. I do a little on LinkedIn, I’m a LinkedIn influencer. I’m trying to find the right balance, having a voice on issues that are important to the company, and at the same time, not trying to take my own personal platform and have it represent the company. At first I sent notes out to the organization, talking about immigration and climate accord. Talking about taxes and tariffs. I’m always amazed that our own people actually want to hear from me. They want to know where I stand. When you have 40,000 people, you have people on all sides of the political spectrum. You don’t want to alienate customers and you don’t want to alienate associates. But you can still talk about issues in a constructive way. We’ve done some of it on LinkedIn. We’re experimenting and trying to figure out a balanced way.
If it’s a company issue, it’s critical. Nobody had a larger voice when it came to the border adjustment tax — I was in Washington more than ever in my entire career. That was important, that was an industry company issue where I could have made the wrong decision. On trade, I sit on the President’s Trade Advisory Committee, I was appointed by the Obama administration. It’s a six-year term that I’m two years into. I’m there and I’m trying to give good advice there. I think it’s important to talk about certain things. Should I be talking about gun control?
We’re all from New York and I’m pretty sure we have a bent, but there’s another side to it. We have people throughout the South, stores throughout the country. We have customers everywhere. Most of these issues are not black-and-white, there’s a lot of gray on these issues, whatever your politics are. Everything the President has done is not wrong, and everything the President has done is not right. We’ve lost our ability to have social discourse in the country. You have to be careful on Thanksgiving when the whole family gets together. You really have to take a deep breath and listen to the other person who may have a different perspective. It doesn’t make them a bad person. Basically, people have chosen sides. You’re either with me or against me. It’s a horrible time, you can’t have legitimate conversations anymore, and compromise is a bad word.
WWD: How would you describe your tenure as chairman and ceo of PVH?
E.C.: Highly successful. Un-be-lieve-able. Very Italian. (laughs) I love this job. I love this company. Not to get sappy: I’ve been blessed to have this job on so many levels.
WWD: Do you get to stay as long as you want, or do you have to retire at 65?
E.C.: There’s no tenure. As long as we keep performing, it will be my decision, and I’m not in any rush to go anywhere at this point. I’m a very young 60. Hardly any gray. I have one more big deal to do. I just have to find it now.