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NEW YORK — Calvin Klein Inc. is banking on its new better-price line, known simply as Calvin Klein, to be a winner right out of the box.

This story first appeared in the November 3, 2003 issue of WWD. Subscribe Today.

Taking its design cues from Klein’s Collection, sources estimate the better line will generate close to $100 million in wholesale volume in its first year.

“It’s going to be our biggest business,” said Tom Murry, president and chief executive officer of CKI, a division of Phillips-Van Heusen, in an interview last week. “It’s our most important business, and it consistently lines up with what we’ve established as a department store brand,” he said, referring to Klein’s other products such as underwear, intimate apparel, fragrances and home furnishings.

CKI has spent hundreds of millions of dollars over the past decade advertising the Calvin Klein name, but there’s never been a total lifestyle collection that’s been available to a broad audience.

“These pieces are what I believe women’s sportswear should be — it is a well-balanced, well-designed collection that sacrifices nothing in terms of design, fit or fabric,” said Calvin Klein Friday. “This makes it possible for many more women in America to wear something from Calvin Klein.”

According to Murry, “Calvin and I felt for a number of years that it would be appropriate to enter the better zone. We wanted to make the Calvin Klein aesthetic available to a larger segment of the population. Calvin’s always felt it’s not important to be the first in a category, but to be the best.”

Murry added that Bruce Klatsky, chairman and ceo of PVH, and Mark Weber, president and chief operating officer of PVH, were extremely eager to launch a better-price collection, which was a motivating factor in their desire to purchase CKI last December.

“Our exposure prior to this was designer and bridge,” said Murry, referring to CKI. Of course, Warnaco still retains the license for CK Calvin Klein Jeans, which includes jeans and jeans-related sportswear.

The new Calvin Klein label, which is similar to that of Klein’s other department store products such as underwear, home furnishings and intimate apparel, will have black lettering on a white background. To distinguish the name of the better line from that of the Collection, the latter will continue to be known as “Calvin Klein Collection.” For spring 2004, the Collection label will say Calvin Klein Collection in black lettering on an ecru label, but for fall 2004, Calvin Klein Collection will be written in black lettering on a black label.

Klein is entering the burgeoning better zone at a popular time, with lines such as H Hilfiger, Lauren by Ralph Lauren, Jones New York Signature and Liz Claiborne’s Realities all battling for both the consumers’ attention and space on the selling floor.

As reported, PVH granted the Calvin Klein better sportswear license last June to Kellwood Co., the $2.2 billion apparel firm, and G.A.V., a company formed to develop new lines, in an unusual joint venture arrangement. Kellwood handles distribution, fabric purchasing, production, warehousing and the entire financial side, while G.A.V. is responsible for design, sales, marketing and preproduction. Jay Schottenstein is G.A.V.’s financial backer.

“The category has evolved and it feels like the right time,” said Murry. He also said the team of G.A.V. and Kellwood “feels really good.”

According to Alexander Vreeland, president and chief operating officer of G.A.V., the plan is for limited distribution for spring to 150 doors around the country such as Bloomingdale’s, Macy’s West, Lord & Taylor, Marshall Field’s and May Co. G.A.V. doesn’t plan to sell all doors of a particular chain, but rather those that it feels can give it the proper presentation and can sell it at regular price.

“Retailers are looking for exclusive merchandise. That formula has worked so well in designer, and it hasn’t been applied in this price zone. We feel we could do just as much volume with fewer stores,” said Vreeland, former executive vice president at Giorgio Armani.

Murry said he likes G.A.V.’s exclusive strategy.

“I compliment G.A.V.’s approach to door selection. Those doors are capable of making strong presentations, are in good locations and have the ability to sell at regular price,” he said.

Frank Doroff, executive vice president and general merchandise manager at Bloomingdale’s, said, “We bought the line. I think it’s beautiful and we’ll put it in 10 to 12 stores. It has a great aesthetic. It’s very sophisticated and will add a whole other level to the better market.”

The first line will be shipped to stores in March, followed by monthly shipments through June. The company is currently working with stores to build in-store shops that resemble theaters, said Murry.

Andrew Grossman, G.A.V.’s ceo, said that G.A.V. chose the manufacturing facilities based on its expertise in that area. “Since 1977 we’ve been involved with the better-price zone, and we use the best of those facilities,” said Grossman, who was previously chief operating officer of Giorgio Armani Corp., and earlier served as ceo of Chaus Inc. and president of Jones Apparel Group. The line will be produced primarily in South Korea and Hong Kong, as well as southern China.

“We operate in lockstep with Kellwood. Once the goods are sourced and the fabrics are purchased and given to the right destination, Kellwood takes over to handle all logistics, and the distribution to the stores,” said Grossman.

Stephen Ruzow, president of women’s wear at Kellwood, noted that the firm’s agreement with G.A.V. is something the industry hasn’t seen before. He said the arrangement would not impact Kellwood’s margins on the line since the firm would have had to acquire the skills G.A.V. brings to the table elsewhere anyway.

“The business is changing so rapidly today, it can’t be business as usual,” said Ruzow. “You have to fight the war a different way. We are very comfortable with how the two organizations are coming together.” He added that there would be a “seamless” connection between the two firms with “no locked doors.”

Ruzow believes the line will stand out from its competitors in the better arena.

“It’s going to be very different from all the other offerings out there. It’s really different. It’s modern. It’s Calvin Klein at a price,” added Ruzow.

Grossman explained that he and Vreeland had originally been in touch with Klatsky and Weber about getting the Klein license, and Klatsky suggested that they team up with Kellwood.

“What we didn’t have was the infrastructure. [By going with Kellwood, a public company] it gave PVH the comfort that the proper product would be made and shipped,” said Grossman.

For spring, Calvin Klein will show retailers the line from CKI headquarters at 205 West 39th Street here, but next season it will be presented at G.A.V.’s new headquarters at 360 Park Avenue South.

Describing the line’s point of view, Grossman said, “We’re a Calvin Klein-inspired career sportswear line. It’s sexy, it’s pretty, it’s sophisticated and it’s a commercially slim fit. We believe it really appeals to a customer who’s not shopping in a department store and has left to go to specialty stores. Traditional better lines haven’t appealed to her.”

“We think the product has a sophisticated point of view. It’s at the higher end of better,” added Vreeland. Wholesale prices will range from $30 for a knit top to $247.50 for a leather jacket. Skirts wholesale from $47.50 to $75; knits are $30 to $87.50; tailored pants are $62.50 to $75, and tailored jackets wholesale from $112.50 to $125.

CKI will create a new ad campaign for the Calvin Klein launch, photographed by Mikael Janssen. The ads will break in April magazines. Advertising will also be done at the local level via direct mail and in-store events in top markets such as New York, Chicago, San Francisco and Los Angeles.

Kellwood will be contributing a percentage of the line’s sales to the marketing efforts. “This brand will be very, very heavily advertised and promoted in the spring,” said Ruzow.

There will be a separate campaign for the men’s Calvin Klein line, produced by PVH. That line will be introduced to stores for Father’s Day.

The women’s line is designed by Robin Howe, design director, who was previously head designer for Jones New York for 12 years.

“We love going back to Calvin’s design heritage, but in a new way,” said Kevin Carrigan, creative director for the Calvin Klein better line and CK Calvin Klein at CKI. He said the line sums up Klein’s American heritage. “It’s very luxurious-looking American sportswear. It’s luxury at a price,” he said.

Carrigan said one of the key looks pairs the softness of a skirt with the toughness of a leather jacket. The line includes skirts in feminine prints, influenced by Klein’s home and lingerie collections, as well as sexy slipdresses, fine-gauge sweaters, silk bomber jackets, tumbled perforated leather jackets, cropped trenchcoats, suede jackets and peacoats.

Klein’s classic color palette of grey, white and black is augmented with shades of soft blue, lavender and pale pink on one particular delivery.

“We’ve taken a lot of inspiration from Calvin’s heritage. We have a vast archive from Calvin,” said Carrigan, who’s been with CKI six years. Sometimes they took Klein’s well-known silhouettes and freshened them up, such as the slipdress or peacoat. And they added a few new silhouettes, in keeping with the season’s trends, such as the shorter skirt with pleats or the skinny leg pants with zippers on the hems.

“There are sporty, athletic looks, mixed with refined looks,” said Howe, pointing to a silk georgette top detailed with beads and edged in satin. Among the fabrics are suedes, linens, matte jersey, satin, silk charmeuse and silk georgette.

Was it hard to use all these luxury fabrics, and keep the prices at the better level?

“It all has do do with approaching fabrics from a taste level,” said Carrigan.

“It’s in better prices, we didn’t creep past it,” said Howe. “Good fabrics don’t have to be ridiculously priced.”

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