Tommy Hilfiger RTW Spring 2020

Stefan Larsson is seeing some “green shoots” at Tommy Hilfiger and Calvin Klein parent PVH Corp.  

Granted there’s still plenty of wreckage across the industry and at the company from COVID-19 — PVH’s first-quarter net losses tallied $1.1 billion with a 43 percent drop in sales, to $1.3 billion. (PVH has buttressed its finances with $1.8 billion in cash and borrowings on its balance sheet — seen by the firm as enough to see it through the pandemic.)

But with all of that trouble — and a still uncertain future — business is moving forward and evolving at a super-charged pace. PVH has fine-tuned Calvin Klein, is becoming more digital and also looking to cut more, potentially in the store base and the Heritage business. 

Larsson, who is president and heir apparent at PVH, joined chief executive officer Manny Chirico and other top executives to walk Wall Street analysts through it all on a conference call Friday morning.

For starters, all of the company’s stores in China are open and are showing week-to-week improvement and are now on par with a year ago. In Europe, about 85 percent of the company’s stores are open, a benchmark North America will hit next week. 

“Overall, we believe that Europe’s recovery will be about one calendar quarter behind the trends we’re seeing in China,” Larsson said. “We believe that the recovery in North America will follow a slightly slower recovery trajectory than Europe, and we expect that promotions will be elevated.”

PVH has cut costs sharply — by canceling orders, consolidating future collections and a number of other steps — and the money it is spending to prompt people to shop has shifted to the web.

“We have supercharged our e-commerce channels across all brands and regions, both own and operated, and we are collaborating very closely with Tmall, Zalando and Amazon, among others, in ways that moves us to where the consumer is going in terms of live events, product launches as well as connecting our inventory from our bricks-and-mortar stores to serve our own e-commerce as well as partner platforms,” Larsson said. “What is exciting to see is that our consumers have expressed a strong demand for our brands across all digital platforms.”

Stefan Larsson of PVH Corp.

Stefan Larsson  Masato Onoda/WWD

In Calvin Klein’s North American business, turned a quarterly profit for the first time.  

The Calvin Klein brand was already being tweaked after the critically acclaimed but rocky tenure of Raf Simons and now that work is done, although Larsson only teased at the specifics.  

“The evolved brand direction is built around going back to the iconic DNA of the brand and reconnecting it to the consumer and culture of today,” he said. “It’s focused on telling clients unique strengths as one of few authentic global lifestyle brands and will be a very strong foundation to drive consumer engagement and profitable growth for the years to come.”

But getting to the future could involve letting go of even more of the past — at PVH and across fashion. 

Chirico said the company was “taking a hard look” at the Heritage business, which has already been trimmed with the $170 million sale of Speedo — a business he described as “good” but not quite fitting with the direction of the overall firm. 

“We’ll take a hard look at continuing to prune the Heritage business back and look for streamlining opportunities in the future,” Chirico said. “We are not seeing the return on our investment and return on invested capital. So I think we will continue to be aggressive in that area.”

The division collects a host of brands, including Van Heusen, Izod, Arrow, Warner’s, Olga and True&Co.

PVH’s brick-and-mortar is also under the microscope.

“When we look at the store portfolio, I think we’re taking a hard look at how that needs to develop,” Chirico said. “And I think those stores that were six months ago, four months ago, cash flow positive, marginally profitable, I think those stores, the pressure that’s been put on from the pandemic and the shift to digital is really pointing to the need to reevaluate those stores and look to streamline the portfolio.” PVH operates more than 1,800 stores globally.

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