Byline: Lisa Lockwood

NEW YORK — What’s next for Calvin Klein Inc.?
As reported in these columns Monday, sources said over the weekend that Tommy Hilfiger Corp. had withdrawn from the negotiations to buy the company because the price was too high.
Now, some observers are speculating that Calvin Klein and Barry Schwartz, respectively vice chairman and chairman of Calvin Klein Inc., might decide — after going through this five-month process — not to sell the business at all.
They’ve indicated all along that if they didn’t get the price they were looking for, they could pull the company off the market, continue to run it themselves and revisit the idea of selling two years down the road.
Several years ago, Schwartz and Klein explored selling the business and retaining a percentage of it themselves, but decided against it.
Another scenario, although less likely, could be that Linda Wachner, chairman of The Warnaco Group, which does the lion’s share of Calvin Klein’s apparel business through its CK jeans and underwear divisions, and has a real interest in buying the company, could try to get it at a good price. But Warnaco’s initial bid was turned down because it wasn’t high enough, so it’s unlikely Warnaco would give Klein and Schwartz the price they’re looking for. And when Warnaco acquired Authentic Fitness last year, it accumulated a lot of debt, which could make a Calvin Klein acquisition difficult. Whether Klein would be willing to sell to the strong-willed Wachner is another story. Wachner didn’t return repeated phone calls to her office seeking comment Monday.
A Calvin Klein spokesman told WWD Monday, “The process is continuing and we’re pleased [with the way it’s going],” which has been the company’s basic response to queries for the past month.
Last October, Klein retained Lazard Freres & Co. to explore strategic options for the company — whether an outright sale, a joint venture or a merger. Klein gave itself a deadline of the end of the first quarter to reach an agreement. Reportedly, bids have been around $1 billion.
This year, Holding di Partecipazioni Industriali, the Italian conglomerate, had scrutinized Klein’s books, but it has decided to concentrate its efforts on its publishing division.
Even though his company’s future ownership is up in the air, Klein has recruited several top executives and mid-level managers to run various divisions in the last few months. The apparel businesses are reportedly doing well, and the company is also having success with its color cosmetics launch at Saks Fifth Avenue and its own stores.

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