Our Company > Global Growth

We are a company transformed, focused on continued global growth of our world-renowned designer lifestyle brands.

During 2012, PVH continued to invest in its business while delivering solid revenue growth and operating margin expansion along with substantial free cash flow. 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, new markets and multiple demographics.

While the global macroeconomic challenges and uncertainty have continued in 2013 (and we expect them to continue) and our strategic investments in the acquired Warnaco business will add pressure to our 2013 earnings, we are optimistic about our long-term prospects. The strength of our brands and the opportunities created through the acquisition of Warnaco, coupled with the sound execution of our business strategies, should enable us to continue to drive our long-term growth and deliver improved financial returns. We believe that these opportunities will drive retail sales of our Calvin Klein, Tommy Hilfiger and Heritage Brands businesses from $16.8 billion in 2012 to over $20 billion over the next few years, and that we will be able to grow EPS in excess of 15% in 2014 and beyond on a non-GAAP basis.

We expect that a significant portion of our growth will be generated from our international operations, which are becoming an increasingly large and important component of our sales and operating profit breakdown and long-term growth profile. Over the last few years, PVH has truly become a global lifestyle apparel company with non-domestic revenues growing to approximately 40% of our 2012 pro forma revenues from 11% in 2009. As we look ahead, while we have already accomplished significant growth overseas to date, we believe that there is substantial revenue potential to unlock, particularly in emerging markets such as China and Brazil, over the next few years.

Our key strategies by brand include:

Calvin Klein

Since our acquisition of Calvin Klein in 2003, the brand's global retail sales have grown at a 12% compound annual growth rate. Significant growth opportunities exist to drive Calvin Klein from $7.6 billion in global retail sales in 2012 to over $10.0 billion over the next few years. These key opportunities include:

  Continued Growth Within Our North American Business

In 2012, Calvin Klein North America, which includes the United States, Canada and Mexico, generated approximately $4.1 billion in global retail sales. Our products are distributed through the wholesale channel, our approximately 160 retail stores, which are principally located in premium outlet centers, and through our e-commerce site.

We are implementing initiatives across the wholesale channel to help increase our market share and improve our products, our brand positioning and our distribution. Our key initiatives for sportswear include:

  • Gaining market share as we expand our presence in top wholesale doors;
  • Elevating our offerings through quality upgrades, enhanced detailing and innovation;
  • Entering new categories and focusing on notable category expansion opportunities such as logo and performance product within sportswear; and
  • Improving shop performance through focused merchandising and marketing initiatives, and investing in point-of-sale marketing and in-store coordinators.

Over the next 12 to 24 months, one of our most pressing priorities is to reposition our jeanswear business. Specific initiatives for jeanswear include:

  • Reducing the brand’s dependence on off-price and club customers;
  • Re-establishing the brand’s premium designer jeans positioning, with a focus on elevated design and quality; and
  • Emphasizing geographic segmentation and local market fits.

While our underwear business is solid, we have identified several initiatives to drive sales and margin growth over the next 12 to 24 months, which include:

  • Elevating our women’s intimate apparel product with design, detailing and quality enhancements;
  • Upgrading our product packaging to appropriately represent the Calvin Klein brand and design aesthetic; and
  • Improving the in-store presentation and shopping experience in our own stores and shop-in-shops at our wholesale customers.

Our retail business is experiencing continued momentum and is focused on driving comparable store sales growth and improved store productivity while adding square footage growth. Specific target areas for the retail channel include:

  • Expanding Calvin Klein’s store base within premium outlet centers across the United States, Canada and Mexico;
  • Improving productivity of key product categories and replenishment businesses;
  • Maximizing Calvin Klein Accessory store growth based on encouraging results from our initial store openings in 2012;
  • Growing digital brand presence and the e-commerce business; and
  • Better leveraging the global supply chain to drive speed to market as well as efficiencies across the larger North American organization.

  Strategic Repositioning of the European Business

Our acquisition of Warnaco provided us with direct ownership of Calvin Klein’s European operations, which generated $1.8 billion in global retail sales in 2012. With direct control over these operations, we intend to restructure the business across the region with an emphasis on driving improved margins by generating healthier and more profitable sales through the rationalization of certain wholesale and retail sales in an effort to elevate and reposition the brand in the marketplace. In order to successfully reposition the European business, we plan to implement several strategic initiatives including:

  • Providing brand-right product across jeanswear, which includes upgrading the design and quality of the product while tailoring product to local customer tastes and retailer needs;
  • Optimizing our distribution base, which includes identifying and exiting wholesale accounts that either are not brand-enhancing accounts or creditworthy, rationalizing the off-price and club business and closing retail stores that are either unprofitable or are not brand-appropriate locations;
  • Investing in our supply chain to better support and meet local market needs;
  • Investing in shop-in-shops and retail stores as we seek to elevate the in-store shopping experience for the Calvin Klein customer, at both wholesale and retail;
  • Re-launching and repositioning the Calvin Klein "bridge" apparel and accessories business across the market beginning in Fall 2014. As we focus on being the one brand steward for Calvin Klein with one global vision for the brand, we are rebranding our "bridge" brand as Calvin Klein on a platinum label. We believe that this is an important step in offering the European consumer a broader Calvin Klein offering within "The House of Calvin Klein," and
  • Upgrading and elevating our women’s intimates assortments with improved design, detailing and quality, and improving the functionality of our overall intimates replenishment businesses and inventory management.

  Continuing to Drive Robust Operating Performance in Asia

With approximately $1.4 billion in global retail sales in 2012, Asia represents one of the highest growth regions for the Calvin Klein brand. We anticipate that Asia will continue to deliver robust sales and margin potential as we expand in key markets such as China, Korea and Southeast Asia, and as we realize operating efficiencies. Investment initiatives to drive brand momentum in Asia include:

  • Within jeanswear, we are elevating product assortments through enhanced design and quality, and also introducing local-market fits. To this extent, we are adding key talent, particularly in design, merchandising and marketing;
  • Expanding product assortments beyond jeanswear and underwear in each market within existing and new distribution;
  • Growing our "bridge" apparel business in the region by offering product that is brand-right to reflect Calvin Klein's modern design aesthetic and tailored to meet the local customer’s preferences. Additionally, launching new products and classifications that are complementary to our existing offerings;
  • Continued focus on the global supply chain including better planning, improved speed-to-market, operating efficiencies and innovation in fabrics and product;
  • Upgrading systems and technologies to facilitate regional market needs to better support this high growth region and the future opportunities for the region;
  • Launching new store designs for 2014 to communicate the brand’s sleek and modern American design positioning and better showcase our apparel and accessory offerings;
  • Upgrading and elevating our women’s underwear assortments with improved design, detailing and quality. We also plan to improve the functionality of our replenishment businesses and inventory management; and
  • Introducing e-commerce operations for the region.

  Latin America Represents One of Calvin Klein's Largest Growth Opportunities

While Calvin Klein’s Latin America operations, primarily Brazil, have grown rapidly over the last few years, posting approximately $300 million in global retail sales, they are still in the infancy stage in this region. This region remains highly underpenetrated and offers significant opportunities for future growth. Key initiatives for continued brand momentum in Latin America include:

  • Continued focus on our jeanswear, including enhanced design and quality;
  • Expansion of premium sportswear and apparel under the Calvin Klein platinum and white labels over time;
  • Introducing and developing the accessory category in Latin America, including footwear, handbags and small leather goods, which we believe will perform well given our strong and growing brand acceptance and recognition in the region;
  • Increasing the profitability of the underwear business through better sourcing and by improving our replenishment categories. Also, we plan to upgrade women’s intimates, improving the design, detailing and quality of our offerings;
  • Consistently elevating our brands through improved wholesale presentations;
  • Improving the consumer experience at retail through in-store marketing, customer service initiatives, investments in fixturing and overall improved in-store product presentation;
  • Focusing on operational excellence, such as inventory management;
  • Developing a specific marketing strategy for Brazil, as this is the largest underpenetrated country in Latin America; and
  • Launching an e-commerce site for Latin America.

  Continued Expansion of Our Licensing Business

Calvin Klein’s licensing business is an important aspect of the brand, as licensed products currently represent slightly over 50% of global retail sales. Our key objectives within licensing include:

  • Continuing to work with Coty as a key strategic partner for our existing fragrance offerings and to develop and launch new fragrances. This includes our Holiday 2013 women’s fragrance launch of DOWNTOWN with actress Rooney Mara featured in brand advertising;
  • Adding incremental marketing campaigns for select high-profile fragrance products to generate increased awareness;
  • Working with G-III to maintain and accelerate the current momentum that we are seeing across their licensed product categories, including men’s and women’s outerwear, swimwear, women’s sportswear, dresses, suits, performance apparel and handbags, as well as luggage. We also plan to expand our current category offerings and introduce new products that are brand-appropriate;
  • Working with Club 21 to grow the bridge apparel business in Asia by offering assortments that are brand-right to reflect Calvin Klein's modern design aesthetic and tailored to meet the local customer’s preferences; and
  • Collaborating with our licensees to introduce new accessory items that complement our existing assortments, including watches, jewelry, eyewear and footwear, which reflect current fashion trends.

Tommy Hilfiger

Since Tommy Hilfiger has been under our ownership, the brand’s growth and performance has far exceeded our expectations, posting approximately $6.0 billion in global retail sales in 2012. Tommy Hilfiger continues to demonstrate its power as a truly iconic global designer lifestyle brand overseen by a strong management team that has built a robust international operating platform and distribution network. We continue to be exceedingly pleased with the business' performance, cash flow generation and growth prospects.

Since 2005, the Tommy Hilfiger management team has driven the growth of the brand’s global retail sales at a 13% compound annual growth rate through its focused expansion in Europe and Asia Pacific, repositioning of the brand in North America and further penetration of its licensed regions and product categories. Looking ahead, we believe the brand should achieve 8% to 10% annual global retail sales growth by capitalizing on our investments in existing and new product categories, distribution channels and geographic regions, which should drive Tommy Hilfiger from $6.0 billion in global retail sales in 2012 to over $8.0 billion within the next few years. Our key growth strategies include:

  Continue to Grow the European Business

While Tommy Hilfiger has well-established operations in Europe, with retail sales of over $2.5 billion in 2012, we believe that there is significant potential for further expansion in Europe. Our strategy to drive growth in the European business includes:

  • Growing the business in product categories that we believe are currently underdeveloped in Europe, such as pants, outerwear, underwear and accessories, as well as our tailored apparel collection (a business we took in-house in late 2012) and womenswear collection;
  • Expanding the bags and small leather goods business, which we took in-house in 2010;
  • Concentrating on the development of the business in underpenetrated "Conquer" markets where we have experienced accelerated growth and see tremendous opportunities for further potential, including Russia, Eastern Europe, the Middle East, France and the United Kingdom, through both increased wholesale operations and expansion of owned retail, which we intend to support with increased advertising and marketing activities. We will also seek to further penetrate "Expand" countries, such as Germany, Austria, Switzerland, Scandinavia and Turkey, where we have significant operations but significant growth opportunities remain. In "Nurture" countries, we have a well-established presence and plan to improve productivity, including the Netherlands and Belgium, and markets that are in crisis 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;
  • Increasing Tommy Hilfiger's presence in Europe through the expansion of specialty and company retail stores. As part of our focus on global brand positioning, we are adding new stores in "A" locations, including several accessory and footwear-only and dedicated tailored stores. We are also pursuing controlled growth of our very profitable outlet store business;
  • Enhancing the brand experience for customers by aligning the product, store design, visual merchandising and marketing across Europe, and upgrading product with superior quality, detailing and design; and
  • Recruiting new talent, particularly in our design and marketing departments.

  Further Strengthen and Drive the North American Business

Our North American business is performing well, as evidenced by the 10% revenue growth and 10% comparable store sales gain in the region during 2012. We intend to achieve continued growth in the North American business by:

  • Strengthening the brand’s image as an iconic American designer brand with the North American consumer by investing in product quality and design and leveraging our centralized design and buying platform across our wholesale and retail businesses;
  • Further optimizing our strategic alliance with Macy's and Hudson’s Bay by leveraging our logistics capabilities and "preferred vendor" relationships. At Macy’s specifically, we seek to add product categories to the merchandise assortments; increase the square footage and enhance the location of "shop-in-shop" locations in high-volume Macy's stores; feature Tommy Hilfiger products in national Macy's marketing campaigns; and concentrate on brand enhancement and elevation through strategic marketing investments alongside our retail partner;
  • Expanding product offerings by Tommy Hilfiger and its licensees in both the retail and wholesale channels; and
  • Increasing Tommy Hilfiger's presence and brand positioning in North America with new retail stores at premium outlet centers, launching new retail concepts and expanding square footage in select existing stores to house a more comprehensive assortment of Tommy Hilfiger apparel, accessories and lifestyle products.

  Expansion Opportunities in Asia Pacific

Tommy Hilfiger products are sold in 12 countries in Asia Pacific with over 1,000 points of distribution in the region. With 2012 retail sales in excess of $700 million, we intend to capitalize on opportunities to grow the Tommy Hilfiger business in Asia Pacific by:

  • Implementing strategic initiatives in Japan to turn around the business, such as focusing on sportswear product enhancements and local market fits. We are also shifting business to department stores in order to accommodate local market shopping preferences;
  • Improving brand visibility and positioning in Japan and capitalizing on our flagship store in Omotesando, Tokyo – opened in 2012 as the brand’s first flagship in the fashion capital of the Asia Pacific region;
  • Investing in high growth markets such as China and India. In 2011, our China joint venture commenced operating and we acquired a direct interest in the wholesale and retail distribution of Tommy Hilfiger products in India. We have seen extraordinary growth in these two countries, with strong growth in 2012 and with both regions exceeding our margin expectations. Our direct involvement in the operation of these businesses allows the regions to better leverage our global design, sourcing and marketing platforms to support development and expansion in these high-priority growth markets;
  • Introducing regional sizing and other initiatives targeted at meeting local market needs; and
  • Pursuing a balanced strategy of acquiring licensees, distributors and franchisees where we believe we can achieve greater scale and success compared to our partners, while at the same time licensing businesses for product categories and markets when we believe experienced and/or local partners provide the best opportunity for success.

  Expansion Opportunities in Latin America

Latin America is another focus market with compelling growth opportunities for the Tommy Hilfiger brand. With 2012 retail sales of approximately $400 million and approximately 150 franchised stores, we have established a notable presence in the region, but we believe that there remains significant capacity for brand growth. Our initiatives include:

  • Leveraging our joint venture in Brazil as a means to gain a direct entry in this high-growth emerging market, as we believe this remains the largest underpenetrated opportunity in Latin America;
  • Furthering our focus on growing our Latin American businesses with our licensees, with an emphasis on elevated product, "wear-now" offerings which take into account varied seasonal timings, local market fits and price positioning; and
  • Pursuing a balanced strategy of acquiring licensees, distributors and franchisees where we believe we can achieve greater scale and success compared to our partners, while at the same time licensing businesses for product categories and markets when we believe experienced and/or local partners provide the best opportunity for success.

  Further Penetrate e-Commerce Channel

Over the last several years, we have significantly grown and developed our Tommy Hilfiger e-commerce websites for North America, Europe (including Russia), Japan and China as consumers are increasingly relying on this channel to buy our products and to familiarize themselves with our brand initiatives and product offerings. We will continue to improve the online capabilities and functions of the Tommy Hilfiger e-commerce sites to enhance the consumer shopping experience and attract additional business globally. Current initiatives include:

  • Driving growth of the highly profitable e-commerce business in Europe by continuing to offer advanced functionality and cutting-edge web features. We also plan to invest in e-commerce sites in new markets with significant growth potential (i.e., Brazil and key Asian markets) to drive conversion through a scalable market channel.
  • Investing in e-commerce in North America, which entails a distinct Company Store section launched in August 2013;
  • Launching a loyalty program in Fall 2013 in North America, which will focus on brand presentation; and

Heritage Brands

In 2012, our Heritage Brands business reported revenues of approximately $1.7 billion (which includes our "heritage" brands – Van Heusen, IZOD, ARROW and G.H. Bass & Co., which we subsequently sold in November 2013, – plus the Speedo, Olga and Warner’s brands we acquired in connection with the Warnaco acquisition, as well as numerous licensed brands). It was an important year for Heritage Brands, as we improved focus on our core businesses, exited underperforming businesses, successfully rolled out IZOD shop-in-shops at J.C. Penney, and saw momentum in our Van Heusen business that launched at Kohl’s in Spring 2012. The acquisition of Warnaco in the beginning of 2013 spurred several changes in our Heritage Brands business. First, we added the Speedo swim products and Warner’s and Olga women’s intimates businesses to our Heritage Brands business portfolio, which, like our existing Heritage Brands businesses, are expected to provide consistent profitability and generate strong cash flows to help fuel the future growth of PVH. Second, we sold the G.H. Bass & Co. business.

While we continue to grow our market share in the United States, we are also looking to opportunistically expand the successful dress furnishings business model by investing in our top brands, evaluating additional licensing opportunities, collaborating with key partners and investing in design and marketing. We believe that we can grow the Heritage Brands business from $3.2 billion in global retail sales in 2012 to over $3.7 billion over the next few years through organic growth and also through the addition of and growth in our newly acquired Speedo and Core Intimates businesses. Our key growth strategies include:

  Continuing to Strengthen the Competitive Position and Image of Our Current Wholesale Brand Portfolio

Our wholesale brand portfolio consists of our dress furnishings business, as well as our sportswear business. Across these categories, we intend for each of our brands to be a leader in its respective market segment in the United States, with strong consumer awareness and loyalty. Overarching initiatives within our wholesale business include:

  • Continuing to design and market our branded products to complement each other, satisfy lifestyle needs, emphasize product features important to our target consumers and drive consumer loyalty;
  • Increasing our market share in our businesses by expanding our presence through product extensions and increased floor space; and
  • Investing in our brands through marketing, advertising and other means to maintain strong customer recognition of our brands.

    Key initiatives in dress furnishings include:

    • Continuing to gain market share as we introduce innovative new products and designs;
    • Focusing on cross-channel expansion;
    • Focusing on our Insignia business, which includes brands such as Ike Behar, Valentino, Ted Baker, Elie Tahari, John Varvatos and Michael Kors Collection, with distribution in retailers such as Nordstrom, Neiman Marcus, Saks Fifth Avenue, Bloomingdales and better specialty stores. This piece of our business allows us to diversify our distribution base beyond our well-established operations in the mid-tier and better department stores; and
    • Growing our underwear business and expanding assortments by infusing more fashion, such as new colors and trims.

    Within wholesale, focus areas for our Van Heusen and ARROW brands include:

    • Reinforcing the value equation for each brand, as we are constantly evaluating pricing, product quality and competitive positioning vs. other brands;
    • Growing through cross-channel expansion; and
    • Strengthening our positioning within the mid-tier department stores; in June 2013, Van Heusen was repositioned on the modern pad next to Claiborne at J.C. Penney and in Fall 2013, Van Heusen will undergo a soft shop rollout at Kohl’s.

    Several target areas for our Izod wholesale business include:

    • Growing our golf business by increasing our presence in the department store channel through market share gains and by expanding our distribution into the golf specialty channel. To support this initiative, we have signed on brand ambassadors to "Team IZOD" which consists of PGA Tour Members Webb Simpson, Scott Piercy and Spencer Levin;
    • Maintaining our department store presence and growing profitability through investments in in-store branding and new shop-in-shops. We are also focused on improving our average unit retail prices as we elevate our products with superior quality, detailing and fashion; and
    • Growing our mid-tier business by expanding the square footage devoted to our shop-in-shops and strategically improving the placement of our products within stores.

  Developing and Growing Our Newly Acquired Speedo and Core Intimates Businesses

We are pleased to add Warnaco’s leading brands – Speedo, Warner’s and Olga – to our Heritage Brands portfolio. We plan to allocate important resources and invest in the long-term growth potential of the businesses conducted under these brands, while leveraging our existing Heritage Brands operating platform.

Key initiatives for the Speedo business include:

  • Fortifying its leadership position in competitive swimming;
  • Creating a lifestyle component so that consumers start to perceive Speedo as a sports-related brand that offers products for any activity in or around the water. This includes expanding consumer and product segmentation into Performance, Fitness and Active Recreation;
  • Building a further presence and position with sporting goods retailers, such as Dick’s Sporting Goods and The Sports Authority; and
  • Growing the sport of swimming and aquatic activities – encouraging more people to "dive in."

Within Core Intimates, our focus areas include:

  • Defending our leading market share positions, including Warner's #1 position in wire-free;
  • Increasing the penetration of opportunity categories, such as Warner's underwire bras and panties;
  • Increasing margins to allow for investment spending, which includes enhanced retail presentation and additional marketing support for both Warner's and Olga; and
  • Increasing our penetration in the mass market channel.

  Strategic Turnaround of Retail Business

Our retail store base is an important component of how we showcase our Heritage Brands business and interface with our Van Heusen and IZOD customers. We are committed to improving performance at our Heritage Brands retail stores and leveraging our stores as a strategic complement to our wholesale businesses. Accordingly, we have identified several strategic initiatives which are designed to improve the customer experience and help grow the business’ operating margins, including:

  • Refocusing on each brand’s heritage and strategic positioning to reinvigorate customer interest;
  • Sharpening price points to underscore our compelling price / value proposition;
  • Investing strategically in the product, enhancing quality and design in areas where the customer has told us that they want a more elevated product;
  • Elevating the in-store shopping experience across all brands through investments in in-store marketing (which we have historically under-invested in compared to our peers), fixturing, and improving in-store layouts so that they are convenient for customers and their shopping patterns and needs; and
  • Optimizing our real estate portfolio to ensure that our store footprint corresponds to customer demand. This entails right-sizing and closing select underperforming store locations, and opening select new stores in centers that meet our demographic needs.

  Pursuing International Growth for Heritage Brands

We intend to expand the international distribution of our brands. To date, we have done so principally through licensing. We have approximately 40 license agreements, covering approximately 145 territories outside of the United States to use our heritage brands in numerous product categories, including apparel, accessories, footwear, soft home goods and fragrances. We also conduct international business directly, selling dress furnishings and sportswear products to department and specialty stores throughout Canada and operating a select few stores in Canada. We believe that our strong brand portfolio and broad product offerings enable us to seek additional growth opportunities in geographic areas where we believe we are underpenetrated, such as Europe, Asia and Latin America.

Other Strategic Opportunities for PVH

We continue to build our brand portfolio through acquisition and licensing opportunities. While we believe we have an attractive and diverse portfolio of brands with growth potential, we will also continue to explore acquisitions of companies or trademarks and licensing opportunities that we believe are additive to our overall business. New license opportunities allow us to fill new product and brand portfolio needs. We take a disciplined approach to acquisitions, seeking brands with broad consumer recognition that we can grow profitably and expand by leveraging our infrastructure and core competencies and, where appropriate, by extending the brand through licensing.

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. MORE

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.


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, ARROW and G.H. Bass & Co. 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.