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.

+ Click here for reconciliation of operating profit.

Calvin Klein

With global retail sales of approximately $7.8 billion in 2013, Calvin Klein is one of the best known designer names in the world, offering provocative, modern designs.


Our products are distributed through our wholesale partners and through nearly 3,000 retail locations (including free-standing stores and concession shops) across the world. Within the Calvin Klein brand portfolio, Calvin Klein Collection acts as a halo brand and offers inspiration to the other brands, which include Calvin Klein (platinum label)1, which is our "bridge" line, Calvin Klein (white label), which is our "better" line, Calvin Klein Underwear and Calvin Klein Jeans. 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 the United States, calvinklein.com. E-commerce capabilities will be launched in Europe, Brazil and China in the second half of 2014, and in Canada and Mexico in 2015. Additionally, in certain markets our products are distributed through licensees, franchisees and distributors.

We believe that the strategic investments we have been making in Calvin Klein will put the brand in a much stronger position to grow globally, strengthen its customer base and thrive over the long-term. Now that we have obtained the direct global control of the brand image and commercial operations for the two largest Calvin Klein apparel categories, jeanswear and underwear, our teams have taken steps to strengthen management, improve operations, unify our brand messaging, and coordinate and improve design, merchandising, retail distribution and marketing functions on a regional and global basis. We believe that these steps, which we will build upon in the coming years, will strengthen Calvin Klein's image, positioning and execution across all markets to drive sustainable growth. We are also focused on identifying and capitalizing on new opportunities to unlock the additional growth potential of this powerful designer brand, which may include buying back various product categories or regional businesses that are currently licensed or operate under a joint venture arrangement.

  Calvin Klein 2014 Summary Financials

CALVIN KLEIN 2014 SUMMARY FINANCIALS
ESTIMATED ANNUAL REVENUE GROWTH: ~4%
ESTIMATED OPERATING MARGIN: ~14%
Excludes non-recurring and one-time items.

  Global Store Count


Global Store Count

NORTH AMERICA†† TOTAL STORES: ~160
EUROPE††† TOTAL STORES: ~850
LATIN AMERICA†††† TOTAL STORES: ~95
ASIA††††† TOTAL STORES: ~745

Store Counts as of May 4, 2014.
††Includes the U.S., Canada and Mexico.
†††Includes the Middle East and Africa. Includes franchisee stores and concession locations.
††††Includes Central and South America. Includes franchisee stores.
†††††Includes shop-in-shops.

Calvin Klein Business Structure and Overview

Our Calvin Klein business consists of two reportable segments: (i) Calvin Klein North America – which includes all of our 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 our wholesale, retail; and licensing operations for the brand in Asia, Europe, the Middle East 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 $4.4 billion in global retail sales in 2013. Calvin Klein North America revenues accounted for slightly over 50% of our Calvin Klein reported revenues in 2013. Product categories that are distributed in North America include men's and women's sportswear, jeanswear, outerwear, performance wear, fragrance, 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 accounted for approximately 60% of Calvin Klein's North America sales 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 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, Dillard's, Hudson's Bay (Canada) and Liverpool (Mexico).

Retail

Retail sales accounted for approximately 40% of Calvin Klein's North America sales in 2013. Our retail operations include approximately 160 stores, primarily located in premium outlet centers, as well as our e-commerce site. Our outlet stores mainly offer men's and women's apparel and accessories made specifically for the channel, which is designed by our team in New York. Over the last few years, we have also opened five Calvin Klein Accessory stores, which offer handbags and footwear, as well as small leather goods and other accessories.

Our North America retail division generated a comparable store sales increase of 3%2 in 2013 on top of 5%2 comparable store sales growth in 2012, and experienced double-digit square footage growth, as we opened additional retail locations, increased square footage of existing locations and opened several Calvin Klein Accessory stores.

  Calvin Klein International

Calvin Klein International

Our international operations generated approximately $3.4 billion in global retail sales in 2013. The Warnaco acquisition gave us direct control of a much larger portion of the international operations conducted under the brand. Our Calvin Klein International segment accounted for close to 50% of our Calvin Klein business' 2013 reported revenues (including sales generated in Asia, Europe and Latin America). Our penetration in Asia and Latin America has increased significantly, with reported revenues from the two regions growing from 9% of total Calvin Klein revenues in 2012 to 26% in 2013 and operating profit for the two regions growing from 20%3 in 2012 to 36%3 of total Calvin Klein reported operating profit in 2013. Internationally, our products are sold through the wholesale channel, our own network of retail locations under the Calvin Klein Jeans and Calvin Klein Underwear names, and licensee stores under the Calvin Klein Collection, Calvin Klein (platinum label), Calvin Klein Performance and Calvin Klein Watch & Jewelry names. Product assortments that are distributed internationally primarily include men's and women's jeanswear, accessories and underwear. Calvin Klein (platinum label) apparel is expected to be reintroduced for men in Europe in Fall 2014 through a limited launch.

Asia

Calvin Klein's Asian operations accounted for 19% of Calvin Klein global reported revenues in 2013. Our regional headquarters is located in Hong Kong, and we have commercial teams based in Shanghai and Seoul and satellite offices in Tokyo, Taiwan and Singapore, to support our business in major markets such as China, South Korea, and across Southeast Asia. We also own an interest in a joint venture in India. In these countries, we sell Calvin Klein jeanswear, underwear and accessories primarily through the retail channel, which includes concessions, shop-in-shops, retail stores (both full price and outlet) and travel retail locations, which are located in major international airports. Our retail portfolio includes approximately 590 company-operated retail stores and approximately 150 concessions. We also operate a wholesale business, through which we primarily sell our products to distributors and franchisees, and in certain markets, including Japan and South Korea, we have a department store presence. E-commerce will be another focus area, with transactional sites set to launch in Hong Kong and China in 2015.

We have continued to perform well in China, as customers are attracted to the Calvin Klein brand image and product assortments; Central and Southeast Asia also continue to experience solid momentum, while South Korea has been more challenged. In order to drive performance across all countries in the region in which we do business, we are continually working to 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 have also hired key personnel, including a President of Calvin Klein Asia (December 2013) and we have added talent in the design, planning, merchandising and marketing functions to support this high-growth business.

Europe

Calvin Klein's European business accounted for 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, underwear and accessories, and we expect a limited launch for men's Calvin Klein (platinum label) apparel 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 580 concessions.

We are currently focused on turning around the European operations now that we have direct ownership of them. Importantly, we are rationalizing our distribution in Europe, closing approximately 40 stores by the end of fiscal 2014 and exiting wholesale accounts that either are not brand-enhancing accounts or do not meet our credit requirements. We are also repositioning our jeanswear business, placing a greater focus on design and further building out the line with additional products. New, regionally based teams have been established to focus on design and merchandising for Europe, and we are leveraging our established back-office operations that previously serviced only Tommy Hilfiger's European operations. New showrooms have been built to showcase the new products, which we believe are more brand-appropriate and on-trend. 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. E-commerce will be another focus area, with a transactional site set to launch in late 2014. We expect that these investments will pay dividends for our business and could ultimately enable us to double the size of our Calvin Klein Europe operations.

Latin America

Calvin Klein Latin America, which consists primarily of our directly controlled operations in Brazil, accounted for 6% of Calvin Klein total reported revenues in 2013. Calvin Klein jeanswear, underwear and related products are sold primarily through the wholesale and retail channels in Brazil. We also see a notable opportunity to expand the Calvin Klein (white label) "better" apparel and accessories in the region and plan to launch an e-commerce site in late 2014.

Given the significant growth opportunities, we are making key investments in the region, 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 45 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, hosiery, socks, footwear, jewelry, watches, handbags, and leather goods; women's sportswear, suits and dresses, and performance wear; men's tailored clothing; home furnishings and accessories; and men's and women's Calvin Klein (platinum label) apparel in Asia. 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 revenues were reduced to less than 10% of Calvin Klein's reported revenues in 2013. Calvin Klein's two largest third-party licensees in terms of 2013 global retail sales are:

  1. Coty, Inc., our fragrance licensee, which generated approximately $1.4 billion in global retail sales in 2013. 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 $1.3 billion in global retail sales in 2013 (primarily in North America) selling men's and women's outerwear, and women's sportswear, dresses, performance wear, suits and handbags, as well as luggage, under the Calvin Klein (white label) brand.

Tommy Hilfiger

With global retail sales of approximately $6.4 billion in 2013, Tommy Hilfiger, which is distributed in over 90 countries, is a global designer lifestyle brand.

The brand's essence is its "classic American cool" designs and "preppy with a twist" point of view. It 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 to a diverse consumer following. We design and market the Tommy Hilfiger and Hilfiger Denim brands and distribute them through the wholesale, retail and e-commerce channels. 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; they are also distributed in North America, Europe, Asia and Latin America through licensees, joint ventures, franchisees and distributors.

  Tommy Hilfiger 2014 Summary Financials

TOMMY HILFIGER 2014 SUMMARY FINANCIALS
ESTIMATED ANNUAL REVENUE GROWTH: ~7%
ESTIMATED OPERATING MARGIN: ~14%
Excludes non-recurring and one-time items.

  Global Store Count


Global Store Count

NORTH AMERICA†† TOTAL STORES: ~230
EUROPE††† TOTAL STORES: ~600
JAPAN†††† TOTAL STORES: ~165
ASIA (Excluding Japan) LICENSEES' STORES: ~300
REST OF WORLD††††† LICENSEES' STORES: ~180

Store Counts as of May 4, 2014.
††Includes the U.S. & Canada.
†††Includes franchisee stores.
††††Includes shop-in-shops and department store locations.
†††††Includes Central and South America.

Tommy Hilfiger Business Structure and Overview

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

  Tommy Hilfiger Organization Chart

  Tommy Hilfiger North America

Tommy Hilfiger North America

Tommy Hilfiger North America accounted for approximately 45% of Tommy Hilfiger'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 slightly over 70% of Tommy Hilfiger's North American sales. This consists principally of sales generated from approximately 230 store locations in the United States and Canada. Our store base includes flagships, which are our largest stores carrying the full range of Tommy Hilfiger apparel and accessories, and are situated in high-profile locations in major cities that are intended to enhance local exposure of the brand; anchor stores, which are 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 4%2 comparable store sales growth in 2013, on top of 10%2 comparable store sales growth in 2012, and grew square footage by approximately 5% year-over-year. Additionally, we generate sales from our website, tommy.com, which acts as an effective brand marketing tool and 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 30% of North American sales. Our men's and women's sportswear apparel is sold exclusively at Macy's in the United States and 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 expanding the brand's presence in top doors at both department stores, maximizing sales of key items and upgrading the in-store experience by creating clear and impactful store presentations. We also license other lifestyle products sold at Macy's and Hudson's Bay and through other wholesale customers.

  Tommy Hilfiger International

Tommy Hilfiger International

Tommy Hilfiger International accounted for approximately 55% of the business’ reported revenues in 2013. Products are sold by us at wholesale and retail in Europe and Japan, through joint ventures and partnerships in China, India and Brazil, and by third party distributors, licensees and franchisees in Europe, Asia and Latin America. We also operate e-commerce sites in Europe (shipping to 23 countries), Japan and China, and will launch our Brazilian e-commerce site in late 2014.

Europe

Tommy Hilfiger has well-established operations in Europe. Tommy Hilfiger Europe sells products primarily through the wholesale channel, which represents over 60% of sales – with customers ranging from large department stores to small independent stores – and through approximately 600 retail stores (of which approximately 40% are company-operated, while the remainder is franchisee and distributor stores) and approximately 160 concessions. Our company-operated store base in Europe consists of flagships, anchor stores, specialty stores and outlet stores.

In 2014, Tommy Hilfiger International is planning for approximately 25 net company-operated store openings, with a particular focus on our underpenetrated markets, including the Middle East and Eastern Europe.

Northern and Central Europe represent over 70% of Tommy Hilfiger Europe reported revenues. We follow a "matrix" approach to centralize certain elements of the European 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 current macro-economic condition of the markets. "Nurture" countries represent markets where we have a well-established presence and plan to improve productivity, or markets that are in crisis in which we want to sustain the existing business and grow our presence over the medium-to-long term. This category includes Spain, Italy and Ireland. "Expand" countries are those in which we have significant operations but also significant growth opportunities, such as Germany, Scandinavia, Turkey and the UK. "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 and France.

Asia

With the exception of our Japanese operations, we license Tommy Hilfiger to third parties or 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 approximately $135 million of retail sales in 2013. We entered into our India joint venture one month later in September 2011, and it generated over $90 million in retail sales in 2013. 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 25% of the region’s retail sales, which are generated through our own base of approximately 155 stores. Our Japan business has been struggling, given issues with our product and positioning in the marketplace. We are currently addressing the issues and have restructured the management team in the region to bring the market into greater alignment with the global brand strategy for the Tommy Hilfiger Group by focusing on the global Tommy Hilfiger and Hilfiger Denim brands. We believe that our measures to upgrade the product in stores, introduce local market fits and elevate the in-store shopping experience will improve performance over the next several years.

Latin America

Our Latin America operations are showing continued momentum. Revenues in the region are primarily generated in Panama and Brazil, where we have a joint venture with a local partner. Brazil is our newest joint venture, established in January 2013. We believe that Brazil is our largest underpenetrated market opportunity and, over the next several years, we plan to expand our presence significantly in the country through our joint venture. Outside of Brazil, we operate in Latin America under license and distribution agreements and we have approximately 180 franchise stores in the region.


Heritage Brands

With 2013 reported revenues of approximately $2.0 billion, our Heritage Brands business encompasses the design, sourcing and marketing of a varied selection of branded label dress shirts, neckwear, sportswear, swim products and intimate apparel under our Van Heusen, IZOD and ARROW, Speedo4, Warner's and Olga brands, and trademarks we license from third parties, which generated approximately $300 million of revenues in 20135. 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 2014 Summary Financials

HERITAGE BRANDS 2014 SUMMARY FINANCIALS
ESTIMATED ANNUAL REVENUE GROWTH: (~6%)
ESTIMATED OPERATING MARGIN: ~8%
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 accounted for approximately 80%6 of total Heritage Brands 2013 reported revenues. Within the segment, we operate four businesses: dress furnishings (dress shirts, neckwear and men’s underwear), sportswear, swimwear and intimate apparel.

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, DKNY, Elie Tahari, J. Garcia, Ike Behar, MICHAEL Michael Kors, Michael Kors Collection and John Varvatos. We also market dress shirts under the Geoffrey Beene and Chaps brands and neckwear under the Nautica, Jones New York, Ted Baker, Claiborne and Valentino brands, plus an array of other licensed and private label brands, which comprise approximately 25% of our neckwear business revenues. These offerings are primarily sold to department, mid-tier department, chain and specialty stores. To a lesser degree, our products are sold in mass market stores and higher-end department stores, such as Neiman Marcus, Nordstrom and Saks Fifth Avenue. 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 43% market share in dress shirts based on our percentage of 2013 unit volume in U.S. Department and Chain Stores combined.

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, chain, specialty, mass market, club and off-price stores.

Swimwear

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 products are available in the United States, Canada and Mexico through all major distribution channels.

  Heritage Brands Retail

Heritage Brands Retail

Heritage Brands Retail accounted for approximately 20%6 of total Heritage Brands 2013 reported revenues. Our Heritage Brands Retail segment consists of approximately 310 retail stores under the Van Heusen and IZOD names, which are primarily located in outlet centers. We believe that our retail presence complements 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 Van Heusen and IZOD 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 excess inventory. Recently, our store performance has been below our expectations and we are focused on improving in-store productivity. From a product and merchandising standpoint, we are 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. In order to improve the financial returns of the business, we continue to optimize our real estate portfolio by right-sizing and closing underperforming store locations as appropriate.


1Calvin Klein (platinum label) was previously referred to as ck Calvin Klein.
2Comparable store sales percentages are based on comparable weeks and, therefore, exclude the extra week in 2012.
3Excludes non-recurring items.
4The Speedo brand is licensed for North America and the Caribbean in perpetuity from Speedo International, Ltd.
52013 revenues included our G.H. Bass & Co. footwear and related products business, which we sold on the first day of the fourth quarter of 2013.
6Figure excludes revenues from G.H. Bass & Co. Please click here for reconciliation.

Global Growth

We are a company transformed, focused on continued global growth of our world-renowned designer lifestyle brands. By leveraging our best-in-class platforms, which encompass wholesale, retail, e-commerce 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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