Two longtime partners — PVH Corp. and G-III Apparel Group — are heading into 2023 with a break up pending and big changes underway in both of their businesses.
In November, PVH said it would unwind its licensing arrangements with G-III for Calvin Klein and Tommy Hilfiger women’s wholesale apparel in the U.S. by 2027.
The businesses made up about a third of PVH’s global licensing revenues last year, or something like $113 million, but accounted for less than 10 percent of the company’s earnings before interest and taxes.
Stefan Larsson, chief executive officer of PVH, put the move in the context of his brand-centric and digitally focused PVH+ strategic plan.
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“Over time, being in complete control and leveraging the best of our brand — in product design, assortment, building pricing, channel mix, supply chain — it’s a critical component to deliver on the PVH+ commitment,” Larsson said.
“Wholesale is very important to us; it’s very important to the consumer,” the CEO said. “We have very strong relationships with Macy’s and other key partners and it’s about getting close and unlocking the full power of your brand.”
Bringing the businesses in house is going to be an ongoing project at PVH.
G-III is also going to have to start thinking about or making some major adjustments since Calvin Klein and Tommy Hilfiger accounted for 50.7 percent of the company’s total sales last year.
Morris Goldfarb, G-III’s chairman and CEO, who has steered the company through nearly 50 years of major changes, said the shift could open up new opportunities.
“This is not stress time,” Goldfarb told WWD when the change was revealed. “Everything stays the same” for now at Tommy and Calvin. “The big changes are the other company has to find the people to do what he’s planning on executing.”
Goldfarb has been busy diversifying G-III. Last year the company consolidated control of the Karl Lagerfeld brand, setting it alongside of Vilebrequin, acquired in 2012, and Sonia Rykiel, acquired in 2021, for a trio of European-based luxury houses. The company also owns the DKNY brand and other businesses.
“We’re at the early stage of all our assets,” Goldfarb said. “There’s plenty of organic growth, there’s plenty of opportunities to supplement them.”