Calvin Klein: PVH to merge Calvin Klein, Tommy ops
Mumbai:
American clothing giantPhilip Van Heusen Corporation (PVH) plans to consolidate its two Indian joint ventures running Tommy Hilfiger and Calvin Klein operations to create a company with retail sales
topping Rs 1,000 crore, people directly aware of the matter said.
The new
legal entity, taking shape shortly, will have Arvind as an equal partner and
managed by Tommy Hilfiger CEO Shailesh Chaturvedi, reporting to the board. The
combined operations will emerge as New York-listed PVH’s flagship business in
Asia’s third-largest economy, and a possible vehicle for future inroads into a
key market. PVH reported $8.2-billion revenue from operations across 40 markets
globally in 2016.
The move
to combine two joint ventures will be PVH’s most significant corporate action
in the county, which it started tapping two decades ago. The new entity has
over 450 point of sales. Tommy Hilfiger, including its licensed operations,
reported Rs 750 crore in retail sales, while Calvin Klein posted around Rs 250
crore in revenue, sources said. When contacted, Arvind CFO Jayesh Shah declined
to comment on the matter. PVH could not be reached for immediate comments over
the weekend.
Industry
experts said combining Tommy Hilfiger and Calvin Klein operations was a logical
outcome, which PVH has effected in multiple global markets. This would help the
clothing major to deliver focused growth for its two leading brands — both
offline and online — and set the stage for aggressive expansion plans.
Incidentally, PVH also operates two other brands — Arrow and IZOD — though
separate licensing deals with Arvind. It has a similar arrangement with Page Industries for swimwear and leisure brand Speedo, which has made rapid strides in
the domestic market recently.
While PVH
had acquired Tommy Hilfiger from Apax
Partners in a global transaction in 2010, it struck a separate
deal with the Murjani family, one of the original backers of the eponymous
American designer, to buy into the Indian operations. Murjani, along with
Arvind, had launched Tommy Hilfiger in India in 2004, making it one of the
earliest international designer brands to open stores in the country. PVH
acquired Calvin Klein Jeans from Warnaco Group four years ago, also getting 51%
ownership of the Indian operations.
The
latest development is seen as a positive for Sanjay Lalbhai-led Arvind, which
earlier this month announced de-merger of the lifestyle brands into a
separately listed company. The PVH move to combine operations makes Arvind a
crucial partner as the American clothier steps up attention on India. Arvind’s
de-merged fashion unit had nearly Rs 2,900 crore revenue in FY17.
Source: Etretail.com,India
Monday, 27 November 2017