In a 15-minute virtual annual meeting Thursday morning, Manny Chirico, chairman and chief executive officer of PVH Corp., addressed the challenging backdrop the company has navigated the last several months and how it’s well-positioned to face the future.
“The confluence of events, from the disturbing recent instances we have seen of systemic racism and social injustice to the current pandemic that we are living through, are deeply unsettling and we know that many of our stakeholders have been negatively impacted in one way or another in the events unfolding,” said Chirico.
The ceo said the company prides itself on its inclusivity and views its more than 40,000 associates as its PVH family. He said the company does everything it can to “drive the connectivity of its associate base, especially in a backdrop like this that can feel so isolating,” he said.
He explained that the purpose of the corporation is to drive fashion forward for good, and one of the best ways to do that to fight for racial equality within the walls of the company, throughout the industry and in society at large.
“We know that we can do more and are making changes in our processes to increase the representation of people of color, with a focus on Black and Hispanic associates across all levels and to position them for success in attaining leadership positions across our company,” said Chirico.
For the last several months, PVH has felt the devastating effects of the coronavirus across its business, in every region of the world, said Chirico. The company immediately responded with an action plan that prioritized the health, safety and well-being of its associates across its offices, stores and warehouses. It also implemented measures to protect the health and financial wherewithal of the company, from securing new financing to cutting every expense possible, proactively managing its inventory levels and re-directing resources to its digital channels “which are experiencing very strong growth,” he noted.
“I am confident that the actions we have undertaken will help us successfully navigate the crisis and emerge as a stronger company,” said Chirico.
As reported, PVH took a big bottom-line hit in the first quarter, ended May 3, logging net losses of $1.1 billion. The losses were a result of a 43 percent drop in revenues to $1.3 billion and charges tied to the bankruptcy of J.C. Penney Co. Inc. and some of the company’s past acquisitions, including the Calvin Klein Inc. portion of the Warnaco deal. Tommy Hilfiger saw a 39 percent sales decline, while Calvin Klein dropped 46 percent.
In the midst of challenges, PVH celebrated its 100-year anniversary trading on the New York Stock Exchange. It is the first apparel company and one of only 30 companies to reach this milestone. “What has made us stand the test of time are our unique competitive advantages: Our strong financial discipline, our healthy balance sheet, our iconic brands and our talented associates across the world,” said Chirico. He added that diversification has always been one of the company’s strong suits, and now more than ever, they have benefited from this, particularly its regional diversification.
Furthermore, he said, sustainability has always been at the heart of the organization, and it believes its practices make the company stronger, while positioning it to meet consumer needs. Last year, PVH launched Forward Fashion, which has 15 time-bound targets that provide a clear path of action to achieve a sustainable business. “As a leader in our industry, we believe that we could help set the industry standard to create a more sustainable future,” said Chirico.
Chirico said the company views 2020 as a year focused on its financial balance sheet, its financial positioning and its ability to capture market share as the world comes out of COVID-19. “While the current backdrop is certainly challenging, I believe that Calvin Klein and Tommy Hilfiger have exceptional brand power. And together with our business model and our talented associates, we will have the ability to navigate this environment. As we execute on our key value drivers over the next few years, I believe that we are well positioned to deliver sustainable, profitable, long-term growth for our stockholders, in addition to leading the fashion industry towards a more sustainable and responsible future,” said Chirico.
In other news, each of the 11 nominees for the board of directors was elected to a one-year term, the advisory proposal to approve the compensation paid to its named executive officers was approved, the vote on the proposal to approve amendments to the company’s stock incentive plan was approved, and Ernst & Young LLP was appointed as auditors for the fiscal year ending Jan. 31.
Chirico noted that Juan Figuero, one of the company directors, will retire at the end of the annual meeting.
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