We believe in our brands. By staying true to each brand’s unique identity, we seek to harness each brand’s power to inspire deep, enduring relationships with consumers. Through our global platforms and heritage of operational excellence, our brands have the potential to capture market share around the world and create new opportunities for growth.
PVH's strategy is to take our powerful global iconic lifestyle brands and maximize their brand potential and consumer reach while staying true to their unique brand DNA and core values. Central to our identity is a genuine commitment to corporate responsibility, a fundamental component of how we conduct our business strategies and practices. As an industry leader, we understand our obligation to promote and maintain sustainable business practices that take into account the interests of all of our stakeholders.
Over the last few years, our company has been focused on the growth opportunities of our Calvin Klein and Tommy Hilfiger brands and we have been making important strategic investments in product, sourcing and infrastructure to achieve top and bottom line growth. In line with this, in early 2013, we completed a transaction that we believe will enable us to achieve even greater growth and extend the reach of Calvin Klein and Tommy Hilfiger in the years ahead: our acquisition of Warnaco. This deal, many years in the making, reunites "The House of Calvin Klein" to ensure a single global brand vision and gives us direct control over Calvin Klein’s two largest apparel categories: jeanswear and underwear. It also provides the combined company with strong established operations in Asia and Latin America, with our revenue penetration in these two regions growing to 14% from 7%.
Many changes have been percolating recently in our Heritage Brands division as well. The acquisition of Warnaco added the Speedo swim products and Warner’s and Olga women’s intimates businesses to our Heritage Brands 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. We have also undertaken several initiatives to improve performance of the Heritage Brands business, including exiting the Izod women’s and Timberland wholesale sportswear businesses in 2012, and our sale in November 2013 of our G.H. Bass & Co. business, in order to focus on our core competency in menswear and grow our global lifestyle businesses.
Across all divisions and brands, our focus remains on driving market share gains, preserving and improving operating margins and introducing new products. We are supporting these investments with integrated traditional and new media marketing programs that will further the global appeal and growth of our Calvin Klein, Tommy Hilfiger and Heritage Brands businesses.
We operate three business groups: Calvin Klein, Tommy Hilfiger and Heritage Brands.
- Calvin Klein: Calvin Klein consists of two operating segments – Calvin Klein North America and Calvin Klein International. Calvin Klein North America is operated from our offices in New York, which oversee the United States, Canada and Mexico with local corporate offices servicing Canada and Mexico. Our Calvin Klein International segment has several regional hubs: Europe, which is headquartered in Amsterdam; Asia, where our commercial operations are based in Hong Kong, Shanghai and Seoul; and Latin America, where we have corporate offices in Brazil.
- Tommy Hilfiger: Tommy Hilfiger is comprised of two operating segments – Tommy Hilfiger North America and Tommy Hilfiger International. Tommy Hilfiger North America is operated from our offices in New York, which oversee our businesses in the Americas (primarily the United States and Canada), while Tommy Hilfiger International is operated from our office in Amsterdam, which oversees Europe, Africa, the Middle East and Asia Pacific.
- Heritage Brands: There are two operating segments within Heritage Brands – Wholesale and Retail. These businesses utilize our "heritage" brands – Van Heusen, IZOD and ARROW – plus the Speedo†, Olga and Warner's brands we acquired in connection with the Warnaco acquisition, as well as numerous licensed brands. Operations are principally conducted in North America.
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We leverage a mix of wholesale, retail and licensing strategies that provide each brand with the opportunity to compete and succeed. We are also investing in and enhancing our e-commerce capabilities across all of our brands, as e-commerce is becoming an increasingly important distribution channel and marketing tool within the retail landscape. As a result, we believe that we are able to achieve a greater reach geographically and a wider breadth and depth in product categories as we maintain our unwavering commitment to the image of our brands and the quality of the goods sold under them. We support our brands with significant investments in marketing, and ensure the quality and delivery of our goods through world-class sourcing and distribution capabilities.
Despite the uncertainty that has impacted the global marketplace, we are optimistic that the strength of our brands, the PVH foundation underlying our brands, and the opportunities created through the acquisition of Warnaco will continue to generate solid revenue and profitability increases. We have maintained a disciplined approach to managing through the uncertain consumer environment and the increasingly competitive global retail landscape. We remain firm in our belief that the sound execution of our business strategies, investment in our world-class brands and concentration on a strong financial profile will continue to drive our long-term growth. At the core of our success, and our opportunity, is the power of our global designer lifestyle brands, Calvin Klein and Tommy Hilfiger. By exploiting the opportunities offered by these brands on our strong operating platforms and strategically expanding into appropriate product categories, channels and markets, we believe we can continue to grow our business profitably in the future. Additionally, we believe that we have the people, brands, partners and financial strength necessary to develop the strategies and implement action plans that will accelerate the growth of our business as we look to the future.
We leverage our best-in-class global infrastructure, sourcing network, 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 and licensing operations.
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.
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.