Operating at the global level and leveraging strong operating platforms in North America and Europe, PVH has enhanced its presence in both Asia and Latin America. The company utilises the region’s infrastructure to popularise its apparel brands in established markets, expand in underdeveloped markets and penetrate into new markets. In 2013, the company made significant progress by acquiring the Warnaco business and investing in the infrastructure critical for its long-term global success. The Warnaco acquisition follows PVH’s take-over of Calvin Klein in 2003 and Tommy Hilfiger in 2010.
According to Mr. Emanuel Chirico, Chairman & Chief Executive Officer, PVH Corp, the company is one of the largest branded apparel firms in the world, with a heritage dating back to over 130 years. Its brand portfolio consists of iconic lifestyle apparel brands led by Calvin Klein and Tommy Hilfiger. The year 2013 was one of transition for the company. Its acquisition of the Warnaco Group gave it direct control over the two largest Calvin Klein apparel categories, jeanswear and underwear.
The Warnaco acquisition provided a broader global platform for both the lifestyle brands and enabled the company to continue to transform itself from a primarily North American multi-brand business into a more diversified organization with significant operations in four distinct regions, with Asia and Latin America now accounting for approximately 20 per cent of its operating income. Calvin Klein and Tommy Hilfiger represented over 75 per cent of the company’s revenue in 2013. Its Heritage brand business also performed well, despite weakness in the retail segment.
Product sourcing
PVH has more than 1,300 factories in over 50 countries. With the exception of hand-made and hand-finished neckwear made at its Los Angeles facility, all its products are turned out by independent manufacturers in foreign countries, in Europe, the Far East, the Indian sub-continent, the Middle East, South America, the Caribbean, Central America and Africa. All the products conform to PVH’s quality and safety norms.
Sales turnover
Mr. Chirico has said that PVH revenues increased by over 35 per cent to $8.2 billion in 2013. Earnings before interest and taxes were at $967 million, an increase of 29 per cent over the previous year despite the uncertain macro-economic environment. The company’s newly acquired Speedo, Olga and Warner’s businesses are also faring well.
Calvin Klein’s revenues grew by over 140 per cent to $2.8 billion, driven by the acquisition of the Warnaco businesses. The company registered over 60 per cent growth in North America, and revenues for the rest of the world grew four-fold. Calvin Klein also continued to gain in China and Brazil where the brand’s position is strong enough.
Revenues for Tommy Hilfiger were $3.4 billion in 2013, making an increase of seven per cent over the previous year, with eight per cent growth in North America and six per cent growth for the rest of the world.
PVH continues to focus on elevating its products, touching existing and new consumers with the eclectic “Hilfiger family” marketing campaigns and investing in the in-store experience to drive the brand globally while continually improving its financial returns. The company’s Heritage Brand’s wholesale business strengthened its market position across key categories including dress shirts, neckwear, woven and knit sport shirts, bottoms and lingerie.
The Chairman further said that although the year posed several hurdles, PVH took timely steps to strengthen the Calvin Klein and Tommy Hilfiger businesses and to give a further boost to the brands globally. “With control over Calvin Klein’s two largest apparel categories and expanded operating platforms in Asia and Latin America, the company is highly optimistic about the opportunities available to enhance its offerings and improve and expand global distribution of the two designer lifestyle brands. The strategic initiatives taken will enable us to achieve significant increases in revenue and profitability over the long term”, he added.