LINDA AND CALVIN
UNDERWEAR’S POWER PAIR
Byline: Karyn Monget
NEW YORK — Two powerhouses of the apparel industry — Calvin Klein and Linda J. Wachner — share a passion for underwear.
Now, nearly a year after The Warnaco Group — Wachner’s company — closed the deal to acquire the Calvin Klein underwear businesses for men and women, the duo is poised to make underwear bearing the Calvin Klein name a product as recognizable in the international marketplace as Coca-Cola.
Last week, in a joint interview at the designer’s offices, Klein and Wachner were brimming with confidence as they outlined some of the ways they plan to girdle the globe with Klein underwear.
“This is a win-win situation,” said Klein. “In this world, fit is so important, and you have to have the resources to produce and distribute the underwear. Linda has that.”
“We’re the happy couple,” said Wachner.
Here are some of the things they have in mind:
Spending $10 million this year on national print and TV advertising, three times as much as last year’s budget.
Distributing Klein’s men’s underwear to Japan and Southeast Asia for the first time.
Expanding his wo-men’s underwear to Europe, Japan and Southeast Asia.
Doubling the number of U.S. department store doors to 1,000.
Warnaco acquired Klein’s men’s underwear business as well as the trademarks for men’s accessories worldwide from the designer’s company last March in a deal worth $62.5 million ($38.5 million in cash and $24 million in Warnaco common stock) plus ongoing fees.
As part of the deal, Warnaco took over the women’s underwear business at the beginning of this year, after a licensing pact for that category with Heckler Manufacturing & Investment Group expired.
In expanding U.S. department store distribution this year in both the men’s and women’s underwear businesses, the number of doors will double to 1,000 outlets by August, according to Warnaco executives. The men’s and women’s underwear will be showcased in separate in-store Calvin Klein boutiques with new white formica fixturing and white packaging.
As part of the strategy to build the Calvin Klein women’s underwear business — an area that has been underdeveloped — Klein’s concept of items that address lifestyle needs has been expanded for spring to include textured sleepwear and at-homewear items of cotton knit. Shipments for the spring line started in early January.
“We will be spending like crazy to make this a big success,” said Wachner, Warnaco’s chairman, president and chief executive officer. “We will spend $10 million in 1995 on national print and TV advertising [men’s and women’s combined] — three times as much as in 1994.”
She further noted that this will be the first time Warnaco will do a national TV ad campaign. The commercials, breaking this week, feature Christy Turlington, who, as reported, also appears in the print ads for the underwear.
The image he wants to convey for the women’s underwear, Klein said, is “modern and sexy — and with an attitude.” He described Turlington as “the woman of right now — not terribly skinny, very approachable, very womanly.”
He also said the association with Wachner will be a culmination of a longtime dream of making the Calvin Klein underwear business for women as prominent as the men’s underwear business.
“This is very exciting,” Klein said, “because I’m at the stage of beginning to realize that something I’ve wanted to do for a long time is really happening.
“The men’s business has really been important,” said Klein, who introduced that line of underwear in 1984, “but my frustration has been that I’m known as primarily as a women’s wear designer, and we had such an underdeveloped women’s underwear business.”
The underwear deal was one of three big licensing deals Klein completed last year. His CK Calvin Klein jeanswear business was licensed to a joint venture of Rio Sportswear and Charterhouse Group International, and he entered the home goods arena in a licensing deal with Home Innovations. They will add new dimensions to the continuing bonanza the designer has seen with his licensed fragrance business, Calvin Klein Cosmetics, a unit of Unilever.
For her part, Wachner, who has gleaned a reputation as a hard-as-nails businesswoman, said, “This is really exciting for me, too. The presence of the Calvin Klein underwear business at stores is very important, but the presence of Calvin himself is extremely important — it’s bigger, stronger, more recognizable than ever before.
“We think the Calvin Klein fragrance business and underwear business will be very much alike, just sensational,” continued Wachner. “We’ll be bigger than ever in Europe, Southeast Asia, and we plan to enter Latin America and Mexico for the first time.”
Distribution of Calvin Klein men’s underwear will be expanded to Japan and Southeast Asia for the first time early this year; deliveries of Klein’s women’s underwear will be expanded to Europe in May, as well as to Japan and Southeast Asia. Shipping dates have not yet been decided upon for Latin America and Mexico.
Wachner said she feels so bullish about building the Calvin Klein underwear business for men, she expects to reach the initial sales projection two years from now — not five, as originally planned.
Sales of the men’s line are projected to reach more than $100 million this year, doubling sales in 1994, she said.
“We think the men’s business can generate annual sales in excess of $300 million by 1997,” Wachner added.
She said the women’s business “could be bigger at some point in time,” but would not be specific. Industry estimates were forecasting a volume of only $16 million for the women’s underwear at the start of 1994, when it was still being done by Heckler.
Regarding the acceptance of the Calvin Klein name abroad, Klein said, “It’s a good time. Right now people want items that are American. It’s cool, hip, and we’ve had no problems penetrating the European market.
“People are waiting for us to make Calvin Klein underwear available to them,” he continued. “As I travel, more people ask me about my underwear, and it has more of an international franchise than my jeans or fragrance.
“College kids think it’s the cool thing to wear if you’re going to take down your pants.”
Looking at the department store business in the U.S., John Kourakos, president of the Calvin Klein Underwear and Accessories subsidiary of Warnaco, said, “We added 25 employees to the company to act as a support staff to the stores. They make sure the products are merchandised properly, and they also give seminars.
“Our retail philosophy was that the men’s and women’s underwear be housed in a total Calvin Klein environment, and we’ve made a significant dollar commitment to stores with the fixturing. In return, we wanted the commitment from the stores that it always be housed as an entire collection.”
Kourakos added that the wholesale prices for the women’s underwear are approximately in the same range as a year ago, starting at $3.75 for basic bikini panties of cotton knit and going to $17.85 for a bodysuit of nylon and Lycra spandex with molded underwire cup bra. Leggings of cotton and spandex are $15. Sleepwear of rib-pattern cotton knit wholesales from $18.80 for a sleep shirt to $40 for a long wrap robe.