Our Company > Business Groups

We leverage our best-in-class global infrastructure, supply chain, brand-focused management and marketing teams to support each of our three business groups — Calvin Klein, Tommy Hilfiger and Heritage Brands — through a strategic combination of wholesale, retail, e-commerce and licensing operations.

We market our brands at multiple price points and across multiple channels of distribution and geographies, which allows us to provide products to a broad range of consumers, while minimizing competition among our brands and reducing reliance on any one demographic group, merchandise preference, price point, distribution channel or geography.

Calvin Klein

With global retail sales of approximately $7.6 billion in 2012, Calvin Klein is one of the best known designer names in the world, offering a modern design aesthetic.


In 2012, approximately 50% of the global retail sales of the brand were conducted outside of North America. Our products are distributed through our wholesale partners and through approximately 2,800 retail locations (including free standing stores and concessions) across the world. The Calvin Klein brands — Calvin Klein Collection, Calvin Klein platinum label (our "bridge" line, which had previously been referred to as ck Calvin Klein), Calvin Klein white label (our "better" line), Calvin Klein Underwear and Calvin Klein Jeans — provide us with the opportunity to market products both domestically and internationally at higher price points, in higher-end distribution channels and to different consumer groups than most of our Heritage Brands business product offerings. Calvin Klein products are available through our wholesale operations, at our own company-operated retail locations in North America, Europe, Asia and Latin America and online through our own e-commerce website in North America and are also distributed in certain markets through licensees, franchisees and distributors.

From a branding perspective, our acquisition of Warnaco reunites "The House of Calvin Klein" under our ownership, giving us complete direct global control of the brand image and commercial operations for the two largest Calvin Klein apparel categories – jeanswear and underwear. Under a single brand vision, we are able to better coordinate product design, merchandising, supply chain, retail distribution and marketing, which we believe will strengthen Calvin Klein's image, positioning and execution across all markets. We are also focused on identifying and capitalizing on new opportunities which can unlock the additional growth potential of this powerful designer brand across all major product categories, geographies, demographics and distribution channels.

  Calvin Klein 2013 Summary Financials

CALVIN KLEIN 2013 SUMMARY FINANCIALS
ESTIMATED REVENUES(1): ~$2.8 BN
ESTIMATED OPERATING MARGIN(1): ~15%
(1)Excludes non-recurring and one-time items. 2013 estimated revenues reconciled on Form 8-K dated 6/12/13.

  Global Store Count

Global Store Count(1)

NORTH AMERICA(2) TOTAL STORES: ~160
EUROPE(3) TOTAL STORES: ~1025
LATIN AMERICA(4) TOTAL STORES: ~150
ASIA TOTAL STORES: ~700

(1)Store Counts as of May 5, 2013.
(2)Includes the U.S., Canada and Mexico.
(3)Includes the Middle East and Africa.
(4)Includes Central and South America.

Calvin Klein Business Structure and Overview

Our Calvin Klein business consists of two reporting segments: (i) Calvin Klein North America – which includes all of the wholesale, retail, e-commerce and licensing operations for the brand in the United States, Canada and Mexico and (ii) Calvin Klein International – which includes all of the wholesale, retail and licensing operations for the brand in Asia, Europe and Latin America.

  Calvin Klein Organization Chart

  Calvin Klein North America

Calvin Klein North America

Our North American operations, which include sales generated in the United States, Canada and Mexico, generated approximately $4.1 billion in global retail sales in 2012. Calvin Klein North America revenues are expected to account for approximately 50% of our Calvin Klein reported revenues in 2013. Product assortments that are distributed in North America include men’s and women’s sportswear, jeanswear, underwear and intimates, as well as men’s dress furnishings. Products are sold by us and our licensing partners, through the wholesale channel, through our own network of retail stores, which are primarily located in premium outlet centers, and through e-commerce operations.

Wholesale

Wholesale sales are expected to account for approximately 55% of Calvin Klein’s North America revenues in 2013. The wholesale channel is an important component of our business mix and how we communicate our brand messaging and positioning to customers. Accordingly, we partner with our wholesale customers to ensure that our shop-in-shops, fixturing, marketing and customer service levels meet our standards given our premium brand positioning. Our wholesale customer base includes retailers such as Macy’s, Lord & Taylor, Hudson’s Bay (Canada) and Liverpool (Mexico).

Retail

Retail sales are expected to account for approximately 45% of Calvin Klein’s North America revenues in 2013. Our retail operations include approximately 160 stores, primarily located in premium outlet locations, as well as our e-commerce site. Our outlet stores mainly offer men’s and women's apparel made specifically for the channel, which is designed by our team in New York. In 2012, we also opened four Calvin Klein Accessory stores, which offer handbags and footwear, as well as small leather goods and accessories.

Our North America retail division generated a comparable store sales increase of 5% in 2012 on top of 16% comparable store sales growth in 2011, and experienced double-digit square footage growth as we opened additional retail locations, increased square footage of existing locations and opened our first Calvin Klein Accessory stores.

  Calvin Klein International

Calvin Klein International

Our international operations generated approximately $3.5 billion in global retail sales in 2012. Following our acquisition of Warnaco, the largest Calvin Klein licensee, we now directly control a much larger portion of the international Calvin Klein businesses. Accordingly, Calvin Klein International revenues are expected to account for approximately 50% of our Calvin Klein reported revenues in 2013, and include sales generated in Asia, Europe and Latin America. Importantly, as a result of the Warnaco acquisition, we have significantly increased our penetration of Asia and Latin America revenues from 7% to 14% and grew the penetration of Asia and Latin America operating income from 13%†† to 20%††. Internationally, our products are sold through the wholesale channel and our own network of retail locations under multiple banners, including Calvin Klein platinum label, Calvin Klein Jeans and Calvin Klein Underwear along with our licensee/franchisee stores, including Calvin Klein Performance and Calvin Klein Watch & Jewelry. Product assortments that are distributed internationally primarily include men's and women's jeanswear, accessories and underwear. "Bridge" apparel is expected to be reintroduced for men in Europe in Fall 2014. Our key geographies include Asia, Europe and Latin America.

Asia

Calvin Klein's Asian operations are expected to account for approximately 20% of Calvin Klein global reported revenues in 2013. With our regional headquarters located in Hong Kong, Shanghai and Seoul, we have operations in major markets such as China, Korea, Hong Kong and Southeast Asia, in addition to a 51% joint venture interest in India. In these countries, we sell Calvin Klein jeanswear and related products, underwear and accessories primarily through the retail channel, which includes concessions, shop-in-shops and retail stores (both full price and outlet). Our store fleet includes approximately 270 retail stores and over 440 concessions. Outside of the retail channel, we have a wholesale business, in which we primarily sell our products to distributors and franchisees, and in certain markets, such as Japan, we primarily have a department store presence. We sell Calvin Klein platinum apparel in Asia primarily through our licensee, Club 21.

Our performance in China has been robust, with revenues growing in the double digits, as customers are compelled by our brand image and product assortments. Central and Southeast Asia also continue to perform well. However, Korea has been more challenging, as excess denim inventories across numerous brands in the marketplace are pressuring performance for the classification. In order to drive performance across all countries in the region, we are working to continually raise our brand profile through elevated product quality, a more expansive selection of products and a more powerful and appealing in-store shopping environment and experience. We are also adding personnel, particularly in the areas of design, marketing and merchandising to support this high-growth business.

Europe

Calvin Klein's European business is expected to account for approximately 20% of Calvin Klein global reported revenues in 2013, with the largest operations currently in Southern Europe. In these countries, we sell Calvin Klein jeanswear and related products, underwear and accessories, and we expect to launch "bridge" apparel for men in both the wholesale and retail channels for Fall 2014. Our store base includes approximately 160 retail stores (full price and outlet locations) and approximately 860 concessions.

We are currently seeking to revitalize our European business, as sales and margins have been under pressure. Importantly, we are trimming our distribution in Europe, closing at least 30 stores over the next 18 months and rationalizing our wholesale customer base by exiting wholesale accounts that either are not brand-enhancing accounts or do not meet our credit requirements. We are also repositioning our jeans business, placing a greater focus on jeans design and further building out the line with additional products. With these actions as a foundation, we are also investing in the business in the areas of supply chain, systems and store environment, which includes store fixtures, signage and in-store marketing and merchandising. We expect that these investments will pay dividends for our business and ultimately enable us to double the size of our Calvin Klein Europe operations.

Latin America

Calvin Klein Latin America is expected to account for approximately 10% of Calvin Klein global reported revenues in 2013, and includes our directly controlled operations in Brazil, Chile and Peru. Brazil, where we sell Calvin Klein jeanswear, underwear and related products primarily through the wholesale and retail channels, is the largest business. We also see a notable opportunity to expand into bridge apparel and accessories in the region and to launch e-commerce capabilities.

Given the immense growth opportunities in Latin America, we are making key investments in the region, with an emphasis on Brazil, including new fixtures, signage and in-store marketing at wholesale and in our own retail stores. We are investing in a marketing and advertising campaign that is specifically targeted toward the Brazilian consumer. Operational excellence is another focus, including inventory management, particularly as the business is counter-seasonal to our North American and European businesses.

  Licensing

Licensing

Calvin Klein has approximately 40 licensing and similar arrangements worldwide with third parties for use of the Calvin Klein brands for a broad array of products (including men’s and women’s fragrances, eyewear, outerwear, golf apparel, socks, footwear, jewelry, watches and leather goods; women’s sportswear, suits and dresses, hosiery, handbags and performance apparel; men’s tailored clothing; home furnishings and accessories; and men's and women's "bridge" apparel in Asia), as well as the rights to operate retail stores outside of North America. Licensing revenues are included in the region in which they are realized.

Prior to our acquisition of Warnaco, licensing revenues accounted for approximately 34% of Calvin Klein’s reported revenues and Warnaco was our largest licensee, generating $2.7 billion of Calvin Klein’s $7.6 billion in global retail sales in 2012. As a result of the acquisition, licensing is expected to account for less than 10% of Calvin Klein’s reported revenues in 2013. Calvin Klein’s two largest third-party licensees in terms of expected revenues earned in 2013 are:

  1. Coty, Inc., our fragrance licensee, which generated approximately $1.4 billion in global retail sales in 2012. Calvin Klein is the third largest designer fragrance brand in the world behind Chanel and Dior; and
  2. G-III Apparel Group, Ltd., which generated approximately $1.0 billion in global retail sales in 2012 (primarily in North America) selling men’s and women’s outerwear, and women’s sportswear, dresses, suits and handbags, as well as luggage, under the Calvin Klein brand.

Tommy Hilfiger

With global retail sales of approximately $6.0 billion in 2012, Tommy Hilfiger, which is distributed in approximately 90 countries, is a global designer lifestyle brand.

The brand’s essence is its "classic American cool" designs with a preppy point of view and occupies a distinct position as an aspirational, yet accessible, premium brand. Tommy Hilfiger offers a wide range of high-quality apparel, accessories and lifestyle products with strong global brand awareness and a diverse consumer following. We design and market the Tommy Hilfiger, Hilfiger Denim and Tommy Girl brands and distribute them at wholesale and retail and through our e-commerce sites. We also license the Tommy Hilfiger brands for an assortment of premium lifestyle products and in various countries and regions. Tommy Hilfiger products are available from the company through wholesale operations and our e-commerce websites, as well as at our retail locations in North America, Europe and Japan, and are also distributed in North America, Europe, Asia Pacific and Latin America through licensees, joint ventures, franchisees and distributors.

  Tommy Hilfiger 2013 Summary Financials

TOMMY HILFIGER 2013 SUMMARY FINANCIALS
ESTIMATED REVENUES: ~$3.4 BN
ESTIMATED OPERATING MARGIN(1): ~14%
(1)Excludes non-recurring and one-time items.

  Global Store Count

Global Store Count(1)

NORTH AMERICA(2) TOTAL STORES: ~225
EUROPE(3) TOTAL STORES: ~540
REST OF WORLD(4) LICENSEES' STORES: ~160
JAPAN(5) TOTAL STORES: ~150
ASIA (Excluding Japan) LICENSEES' STORES: ~240

(1)Store Counts as of May 5, 2013.
(2)Includes the U.S. & Canada.
(3)Includes franchisee stores.
(4)Includes Central and South America.
(5)Includes shop-in-shops and department store locations.

Tommy Hilfiger Business Structure and Overview

Our Tommy Hilfiger business consists of two reporting segments: (i) Tommy Hilfiger North America – which includes all wholesale, retail, e-commerce and licensing operations for the brand in the United States and Canada and (ii) Tommy Hilfiger International – which includes all wholesale, retail, e-commerce and licensing operations for the brand in Asia Pacific, Europe and Latin America.

  Tommy Hilfiger Organization Chart

  Tommy Hilfiger North America

Tommy Hilfiger North America

Tommy Hilfiger’s North American operations are expected to account for approximately 45% of the brand’s reported revenues in 2013; this includes revenues generated from the wholesale channel, through our own retail stores, through our company-operated e-commerce site and through licensing agreements.

Retail

Retail accounts for roughly 75% of Tommy Hilfiger’s North American sales. This consists principally of sales generated from approximately 225 store locations in the United States and Canada. Our store base consists of flagships, which are our largest stores carrying the full range of Tommy Hilfiger apparel and accessories that are situated in high-profile locations in major cities and are intended to enhance local exposure of the brand; anchor stores, which are large stores located on high-traffic retail streets; specialty stores, which are located in premium shopping malls; and outlet stores, which are primarily located in premium outlet centers and carry specially-designed merchandise at a lower price point than our other stores. Our retail operations posted 10% comparable store sales growth in 2012 on top of 14% comparable store sales growth for the second through fourth quarter of 2011 (as we acquired Tommy Hilfiger early in the second quarter of 2010). Additionally, we generate sales from our website, tommy.com, which acts as an effective brand marketing tool, as well as an e-commerce platform.

In 2013, Tommy Hilfiger celebrated the opening of a flagship on Los Angeles’ Robertson Boulevard and also opened its first specialty store in San Diego at Fashion Valley, the city’s premium outdoor shopping center, in an effort to strengthen the brand presence in the West Coast of the United States.

Wholesale

Our wholesale business represents approximately 25% of North American sales. Our men’s and women’s sportswear apparel is exclusively sold at Macy’s in the United States and at Hudson’s Bay in Canada. We view Macy’s and Hudson’s Bay as key partners in further shaping our North American sportswear strategy and we are continually working to elevate our brand positioning and in-store experience within both department store chains. This includes our shop-in-shop aesthetics, our presence in store advertisements and our in-store marketing. We also license other lifestyle products sold at Macy’s and through other wholesale customers.

  Tommy Hilfiger International

Tommy Hilfiger International

Tommy Hilfiger International is expected to account for approximately 55% of the business’ global revenues in 2013. Products are sold by us at wholesale and retail in Europe and Japan, through joint ventures in which we are a partner in China, India and Brazil and by third party distributors, licensees and franchisees in Europe, Asia Pacific and Latin America. We also operate e-commerce sites in Europe (shipping to 23 countries, including Russia), plus Japan and China, and will soon launch our Brazilian e-commerce site.

Europe

Tommy Hilfiger has well-established operations in Europe, which are expected to generate revenues of approximately $1.6 billion in 2013. Tommy Hilfiger Europe sells products primarily through the wholesale channel, which represents approximately 65% of sales, with customers ranging from large department stores to small independent stores, and through approximately 540 retail stores (of which approximately 40% are company-operated, while the remainder are franchisee and distributor stores) and approximately 155 concessions. Our company-operated store base in Europe consists of flagships, which are our largest stores carrying the full range of Tommy Hilfiger apparel and accessories that are situated in high-profile locations in major cities and are intended to enhance local exposure of the brand; anchor stores, which are large stores located on high-traffic retail streets; specialty stores, which are located in premium shopping malls; and outlet stores, which are primarily located in premium outlet centers and carry specially-designed merchandise at a lower price point than our other stores.

In 2013, Tommy Hilfiger is planning for more than 80 net store openings in Europe and also reopened the newly renovated Düsseldorf store, nearly doubling the size of this important flagship location.

Northern and Central Europe represent over 70% of revenues. To allocate our resources appropriately going forward, we have established a "matrix" approach to centralize certain elements of the business, including design, merchandising and marketing, while leveraging local market demands and expertise. We manage the European business under a model in which we have divided the national markets across three different growth models reflecting both the brand presence in and the macro-economic condition of the markets. "Nurture" countries represent markets where we have a well-established presence and plan to improve productivity, including the Netherlands and Belgium, and markets that are under pressure in which we wish to sustain the existing business and grow our presence over the medium- to long-term, such as Spain, Italy and Ireland; "Expand" countries are those in which we have significant operations but also significant growth opportunities, such as Germany, Austria, Switzerland, Scandinavia and Turkey; and "Conquer" markets reflect newer, underpenetrated markets where we have experienced accelerated growth and see tremendous opportunities for further potential in the near-term, including Russia, Eastern Europe, the Middle East, France and the United Kingdom.

Asia Pacific

With the exception of our Japanese operations, we license or maintain joint ventures throughout Asia. China and India are high-growth markets where sales are generated through joint ventures. Our China joint venture commenced operations in August 2011 and generated over $100 million of retail sales in 2012. We entered our India joint venture one month later in September 2011, and it generated over $80 million in retail sales in 2012. Southeast Asia and Australia, where business is conducted through licensees, account for approximately 40% of the region’s retail sales. Japan, the second largest market, currently accounts for approximately 35% of the region’s retail sales, which are generated through our own base of approximately 150 stores. We are currently focused on elevating the brand in Japan through product upgrades, improvements to the in-store shopping experience and the introduction of local market fits. In conjunction with this, we are also repositioning and elevating our sportswear business to align with our global branding and messaging.

Latin America

The Latin America operations are showing significant momentum. Sales in the region are primarily generated in Brazil, where we have a joint venture with a local partner. This is our newest joint venture, established in January 2013. We believe that Brazil is our largest underpenetrated market opportunity and we plan to expand our presence significantly in the country through our joint venture over the next several years. Outside of Brazil, we operate in Latin America under license and distribution agreements and we have approximately 160 franchise stores in the region.


Heritage Brands

With 2012 revenues of approximately $1.7 billion, our Heritage Brands business encompasses the design, sourcing and marketing of a varied selection of branded label dress shirts, neckwear, sportswear, footwear, swim products and intimate apparel under our own Van Heusen, IZOD and ARROW brands, the Speedo, Warner's and Olga brands we acquired in the Warnaco transaction, and trademarks we license from third parties, which generated approximately $425 million of revenues in 2012†††. We also license our owned heritage brands for an assortment of products. We distribute our Heritage Brands products at wholesale and through our own retail stores (Van Heusen and IZOD) primarily in North America.

  Heritage Brand 2013 Summary Financials

HERITAGE BRANDS 2013 SUMMARY FINANCIALS
ESTIMATED REVENUES: ~$2.0 BN
ESTIMATED OPERATING MARGIN(1): ~8%
(1)Excludes non-recurring and one-time items.


Heritage Brands Business Structure and Overview

Our Heritage Brands business is comprised of two segments: Heritage Brands Wholesale and Heritage Brands Retail.

  Heritage Brands Organization Chart

  Heritage Brands Wholesale

Heritage Brands Wholesale

Heritage Brands Wholesale is expected to account for approximately 70% of total Heritage Brands 2013 revenues. Within the segment, we operate four distinct businesses: dress furnishings (dress shirts, neckwear and men’s underwear), sportswear, swimwear and swim products, and intimate apparel.

Heritage Brands Dress Furnishings

Our Dress Furnishings business principally consists of the design and marketing of men’s dress shirts and neckwear. We market both dress shirts and neckwear under brands including Van Heusen, ARROW, IZOD, Eagle, Sean John, Donald J. Trump Signature Collection, Kenneth Cole New York, Kenneth Cole Reaction, JOE Joseph Abboud, DKNY, Elie Tahari, J. Garcia, Ike Behar, MICHAEL Michael Kors, Michael Kors Collection, John Varvatos, Hickey Freeman and Hart Schaffner Marx. We also market dress shirts under the Geoffrey Beene and Chaps brands and neckwear under the Nautica, Jones New York, Ted Baker, Axcess, Claiborne, Robert Graham and Valentino brands, plus an array of private label brands which comprise 25% of our neckwear business. These offerings are primarily sold to department, mid-tier department and specialty stores, as well as, to a lesser degree, mass market stores. Collectively, our product offerings represent a sizeable portion of the domestic dress furnishings market, as we have greater than 50% market share in neckwear and approximately 45% market share in dress shirts based on our percentage of 2012 unit volume in U.S. Department and Chain Stores combined.

Heritage Brands Sportswear

Our Heritage Brands segment also includes the design and marketing of sportswear, including men’s knit and woven sport shirts, sweaters, bottoms and outerwear at wholesale, principally under the IZOD, Van Heusen and ARROW brands. Our products are primarily sold to department, mid-tier department and specialty stores.

Swimwear and Swim Products

We design, manufacture and sell men’s, women’s and children’s swimwear, footwear and swim products such as swim goggles, learn-to-swim aids, water-based fitness products and training accessories under the Speedo brand. Products are distributed in the United States, Canada, Mexico and the Caribbean through all major distribution channels, sporting goods stores, team dealers, catalog retailers and the www.SpeedoUSA.com website.

Core Intimates

Under our Warner's and Olga brands, we design, manufacture and market intimate apparel products such as bras and panties. Our brands are sold across a variety of retail channels, including department, chain and mass market stores. Warner's and Olga are available in the United States, Canada, Mexico and the Caribbean through all major distribution channels.

  Heritage Brands Retail

Heritage Brands Retail

Heritage Brands Retail is expected to account for approximately 30% of total Heritage Brands 2013 reported revenues. Our Heritage Brands Retail segment consists of approximately 325 retail stores under the Van Heusen and IZOD names, which are primarily located in outlet centers††††. We believe that our retail presence is an important complement to our wholesale operations, as we directly control all aspects of the in-store customer experience, and we are able to further enhance consumer awareness of our brands by offering products that are not available in our wholesale lines. At the same time, our retail stores are important strategically, as they provide us with a means for managing and clearing through excess inventory.

Recently, our store performance has been below our expectations, which was largely due to weakness at our G.H. Bass & Co. retail stores. We have been actively addressing the issues by taking measures that we expect will help improve performance at our Van Heusen and IZOD stores. This includes refocusing on each brand’s heritage and strategic positioning to reinvigorate customer interest, investing strategically in product quality and design and upgrading our in-store shopping experience and store appearance. We continue to optimize our real estate portfolio by right-sizing and closing underperforming store locations as appropriate.


The Speedo brand is licensed for North America and the Caribbean in perpetuity from Speedo International, Ltd.
††Excludes non-recurring and one-time items.
†††2012 revenues also included our G.H. Bass & Co. footwear and related products business, which we sold on the first day of the first quarter of 2014.
††††2013 revenues will include the sales of our G.H. Bass & Co. retail division, which we sold on the first day of the fourth quarter of 2014. The store count does not include G.H. Bass & Co. stores.

Global Growth

We are a company transformed, focused on global growth. By leveraging our best-in-class platforms, which encompass wholesale, retail and licensing operations, we seek to further penetrate our iconic lifestyle brands across new categories, existing markets and new markets. We believe that we have multiple growth opportunities driving worldwide retail sales of our Calvin Klein, Tommy Hilfiger and Heritage Brands businesses.

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Our Brands

We grow global brands. PVH leverages a diversified portfolio of brands — including Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, ARROW, Speedo, Warner's and Olga — and markets them globally. Our operational expertise, dedicated team of associates and leaders, and commitment to each brand's core values, allow us to gain market share as we pursue new markets and product categories globally.

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