NEW YORK — Expanding its retail footprint globally is a key initiative for The Warnaco Group Inc.
This story first appeared in the May 13, 2010 issue of WWD. Subscribe Today.
Speaking after the company’s annual meeting Wednesday, Joseph R. Gromek, president and chief executive officer, told WWD that last year Warnaco grew retail square footage by 20 percent, adding 120,000 square feet to the current 620,000-square-foot portfolio. “The plan is to continue to grow [square footage] by approximately 20 percent annually,” said Gromek. He said current retail sales from the company’s freestanding Calvin Klein Jeans, Calvin Klein Underwear and Calvin Klein Accessories stores account for $450 million, and the plan for next year is to increase that to $600 million.
Gromek said another of Warnaco’s strategies is to expand its direct operations by acquiring key distribution and franchise partners. Warnaco, which last year generated $2 billion in net revenues, recently acquired its Brazilian joint venture partner. “Brazil is the fastest growing market,” he said, noting he expects to reach $100 million in Calvin Klein Jeans and Underwear sales there this year. Warnaco has taken direct control of its business in Beijing and Shanghai and plans to take over distributorships in South China and Singapore. “We are looking at opportunities with our European partners that will make good use of our solid balance sheet,” said Gromek.
He added the Calvin Klein bridge lines in Europe (women’s, men’s and accessories) are performing “at a high level,” and accessories is one of the fastest growing businesses for Warnaco. Calvin Klein Accessories stores are planned for Europe, with one already opened outside Rome and another expected to open soon outside Milan.
Charles Perrin, non-executive chairman of Warnaco, presided over the 11-minute shareholder’s meeting at Warnaco headquarters here, which was attended by 20 of the firm’s key executives. No questions were asked, nine directors were elected and the appointment of Deloitte & Touche LLP was ratified.
During the meeting, Gromek discussed the company’s performance in 2009, as well as first-quarter results for 2010. e said first-quarter net revenues from the Calvin Klein businesses increased by 11 percent; international net revenues rose 18 percent, and net revenues from its direct-to-consumer business jumped 31 percent.
On Wednesday, the company’s board also approved a new multiyear five-million share repurchase program, which represents about 11.3 percent of the company’s outstanding stock.