And Simons — the former artistic director for women’s at Christian Dior, who joined the brand chief creative officer after months of well-traveled rumors — already has something of a running start. Calvin Klein revenues gained 12 percent in the second quarter, helping push PVH’s revenues up 3.7 percent to $1.93 billion.
On a call with Wall Street, where Chirico did something of a victory lap to tout the quarter, when adjusted profits also gained, analysts were keen to know what the new creative lead would mean for the brand.
“For the first time since we have owned the business we have gotten one clear strategic direction for the brand,” Chirico said. “You can’t underestimate what that will mean to us from a brand point of view moving forward.
“We have a cohesive view of the brand and the product and being able to really take advantage of the collection business to diffuse it down to our white label and bridge lines,” he said. “I think it will be a huge benefit for us as we go forward.”
The label, which the company is trying to build into a $10 billion business, has seen a disproportionate amount of its marketing spending go toward its jeans and underwear offering.
“As we move in 2017 and beyond, you’ll see more lifestyle marketing of the brand that will capture and take advantage of all the product category as where we think there is significant growth,” the ceo said. “All very positive from a licensing point of view. And I don’t think it changes any of our direction. We continue to look to take control of a more geographic components of our brand where it make sense, particularly where we have strong operating platforms like we did with the Tommy Hilfiger business in China.”
PVH’s Calvin Klein and Tommy Hilfiger businesses in general have been growing in their U.S. wholesale accounts and online, while the brand’s own stores have suffered as tourism has dried up in markets such as New York, Miami and Los Angeles.
Chirico said those stores are by far the company’s most largest and most profitable ones. By way of comparison, he pointed to the dynamic at one of PVH’s biggest wholesale Partners, Macy’s Inc.
“Macy’s Herald Square is the most profitable department store in the world, I believe, and it’s being impacted by international tourism, but it is still one of the most — the largest, most profitable department stores in the world,” he said, noting tourism would balance out. “I’m not going to sit here and say it’s coming back, but I do think, as we get through the third and fourth quarter of this year, it should level off.”
Online, PVH has been working to drive its business through its own sites and through partners, including macys.com, Amazon, Zalando, Alibaba and Tmall.
“We’ve tried to segment our product, make sure that we’re well-positioned in those areas, significantly investing,” Chirico said. “From a digital presentation point of view, clearly, our marketing campaigns have shifted their spend to — well over 50 percent of our marketing spend now is digital [for] both Calvin and Tommy.”
In the second quarter, PVH’s own e-commerce revenue growth topped 20 percent.
“Key measures we have taken include enhancing the navigation on our sites, elevating our own sites to focus less on promotions, investing in mobile capabilities and taking steps to ensure that we are in stock in high-core demand items, which is the key to profitability on digital commerce,” he said.