Could Calvin Klein Jeans, which are done in-house by Calvin Klein Inc., be changing hands again?
According to knowledgeable sources, G-III Apparel Group, which has the Calvin Klein license for women’s ready-to-wear, accessories, outerwear, swimwear and dresses in North America, has an executive search out for a president of women’s Calvin Klein Jeans. That would mean that G-III could very well be scooping up the Calvin Klein Jeans women’s license for North America.
CKI got the jeans business back when its parent firm, PVH Corp., acquired Warnaco Group in 2012.
If a deal is struck, sources say G-III would manufacture and distribute Calvin Klein women’s Jeans in North America, while the European Calvin Klein Jeans line would remain with CKI, and continue to be designed out of Amsterdam, where Tommy Jeans are produced. Both Tommy Hilfiger and Calvin Klein are divisions of PVH.
Morris Goldfarb, chairman and chief executive officer of G-III, was traveling in Europe and unreachable for comment. A spokeswoman for PVH Corp. said Thursday the company doesn’t comment on rumors.
G-III, which has been a savior for Calvin Klein, has healthy distribution in major department stores and reportedly generated about $1.2 billion in wholesale volume for its Calvin Klein products last year. In releasing third-quarter numbers in December, Goldfarb called Calvin Klein “a trophy business,” and said the brand performs “incredibly well.”
“I can only speak to really the women’s piece of the business, and I can speak to the American piece of the business and the outerwear piece of the business that we have in both genders. There’s nothing better. I wish I could find another Calvin Klein for long-term growth. The brand is still an aspirational brand and we believe there’s plenty of runway left to continue to grow this,” said Goldfarb at the time.
In January, CKI said it planned to consolidate operations for its men’s Calvin Klein Sportswear and Calvin Klein Jeans business.
PVH acquired Warnaco for $2.9 billion, which included the then-troubled Calvin Klein Jeans and Underwear businesses, in 2012. During its first few years under Klein and PVH, the integration was difficult and CKI needed to clean up distribution and reinvigorate the jeans line with improved fit and innovative design. In 2014, Emanuel Chirico, chairman and ceo of PVH, told investors, “The bleeding has stopped, and I think the business feels better,” especially in men’s. He said women’s jeans were also showing improvement.
At the time of the Warnaco acquisition, Chirico said, “This is a unique opportunity to reunite the ‘House of Calvin Klein’ and reinforces our strategy to drive the global growth of Calvin Klein. Having direct global control of the two largest apparel categories for Calvin Klein — jeans and underwear — will allow us to unlock additional growth potential of this powerful designer brand across all major product categories, geographies and distribution channels.”
Fast-forward four years, and Calvin Klein Jeans is giving PVH another hard time.
When the group released third-quarter results in November, Chirico said there was a weak response to the Calvin Klein Jeans’ rebranding. He had said the relaunched Calvin Klein product under former chief creative officer Raf Simons was too elevated and did not sell through as well as had been planned. Calling it a “fashion miss,” Chirico told investors, “From a product perspective, we went too far, too fast on both fashion and price. We are working on fixing this fashion miss, and we believe that our CK Jeans offering will be much more commercial and fashion-right beginning in 2019, especially for the fall 2019 season.”
For fall 2018, the Calvin Klein Jeans line was reworked with upgraded fabrics and featured bold pop-inflected irreverence, oversize logos, trucker jackets, Western shirts, cowboy boots, color-blocking, patchwork denim, an Andy Warhol segment, and a theme Simons made his own at Calvin: Americana. Sources say the Calvin Klein Jeans business does around $400 million in the U.S.
Since Simons and CKI amicably parted ways in December, there have been several big developments at CKI.
After deciding in January to shutter its 205W39NYC business, the renamed high-end designer collection under Simons, Calvin Klein said Wednesday it has decided not to move forward with a traditional collection business at all, as reported. As a result, 50 employees in the New York office and 50 people in the Milan office were let go. The company also plans to shutter the Milan office. Consequently, Michelle Kessler-Sanders, president of Calvin Klein 205W39NYC and Calvin Klein by Appointment, will be leaving the company, but will stay on through June to help close down that segment of the business. She may continue in an advisory role. Klein has shipped the final 205W39NYC for spring. Steve Shiffman, ceo of Calvin Klein Inc., remains in his position.