NEW YORK & SYDNEY--(BUSINESS WIRE)--Dec. 19, 2014--
PVH Corp. (NYSE:PVH) and Gazal Corporation Limited (ASX:GZL) announced
today that, through wholly owned subsidiaries, they had entered into an
agreement with their Australian joint venture to add businesses to the
joint venture, significantly expanding its scope.
The transaction, which is expected to close in early February 2015, will
add the Tommy Hilfiger, Van Heusen and Nancy Ganz businesses in
Australia and New Zealand to the joint venture, as well as certain of
Gazal’s other shirting, tailored and shapewear businesses.
PVH and Gazal’s 50/50 joint venture, PVH Brands Australia Pty Limited,
commenced operations in February 2014, with its entry into a license and
distribution agreement with Calvin Klein, Inc., a wholly owned
subsidiary of PVH, for Calvin Klein Jeans and Calvin
Klein Underwear in Australia, New Zealand and the rest of Oceania.
Under the agreement announced today, the JV will:
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Enter into a license and distribution agreement with Tommy Hilfiger
Europe B.V., a wholly owned subsidiary of PVH, for Tommy Hilfiger
in Australia and New Zealand. The JV will also acquire certain assets
of the existing wholesale and retail Tommy Hilfiger business in
Australia, including 12 stand-alone retail stores. The license and
distribution agreement has a 12-year term.
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Acquire Gazal’s shirting, tailored and men’s accessories business,
which is conducted under PVH’s Van Heusen and Calvin Klein brands,
as well as Gazal’s owned and licensed Bracks, Pierre Cardin
and Paramount brands. Gazal currently distributes the Van
Heusen brand, the Australasian businesswear leader, under license
from PVH. The current license agreement will be transferred to the JV
and extended to December 31, 2033.
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Acquire Gazal’s shapewear business, which consists of the Australian
and New Zealand rights to Nancy Ganz, the Australasian market
leader in this category, as well as the right to distribute the Spanx
brand in Australia and New Zealand under license from Spanx, Inc., and
Gazal’s own HoldmeTight brand. The JV will also enter into a
perpetual license with PVH for Nancy Ganz for all territories
outside of Australia and New Zealand.
“Australia is an important destination for Tommy Hilfiger. This
arrangement enables us to more directly support the development and
expansion of the Tommy Hilfiger retail and wholesale businesses, as we
continue to establish Tommy Hilfiger as a premium lifestyle brand
in the region,” said Daniel Grieder, CEO of Tommy Hilfiger.
“The expansion of our joint venture with Gazal allows us to consolidate
all our branded businesses in the Australasian market with one strong
local partner,” said Manny Chirico, Chairman and CEO of PVH. “We believe
that our joint venture is the best way to leverage the opportunities in
the market and drive growth of our Calvin Klein, Tommy
Hilfiger and Van Heusen brands in this part of the world.”
“We have great respect for PVH and are excited to be expanding our joint
venture with them. Together, we have developed some dynamic growth plans
for each brand in this market and we now look forward to the
implementation phase,” said Gazal’s Executive Chairman, Michael Gazal.
Certain additional details about the financial effect of these
transactions on Gazal are provided at the end of this announcement, in
accordance with Gazal’s Australian disclosure requirements.
About The Tommy Hilfiger Group
With a premium lifestyle brand portfolio that includes Tommy Hilfiger
and Hilfiger Denim, the Tommy Hilfiger Group is one of the
world’s most recognized designer apparel groups. Its focus is designing
and marketing high-quality menswear, womenswear, children’s apparel and
denim collections. Through select licensees, the Group offers
complementary lifestyle products such as sportswear for men, women,
juniors and children; footwear; athletic apparel (golf, swim and
sailing); bodywear (underwear, robes and sleepwear); eyewear; sunwear;
watches; handbags; men’s tailored clothing; men’s dress furnishings;
socks; small leather goods; fragrances; home and bedding products;
bathroom accessories; and luggage. The Hilfiger Denim product
line consists of jeanswear and footwear for men, women and children;
bags; accessories; eyewear and fragrance. Merchandise under the Tommy
Hilfiger brands is available to consumers worldwide through an
extensive network of Tommy Hilfiger retail stores, leading
specialty and department stores and other select retailers and retail
channels.
About PVH
PVH Corp., one of the world’s largest apparel companies, owns and
markets the iconic Calvin Klein and Tommy Hilfiger brands
worldwide. It is the world’s largest shirt and neckwear company and
markets a variety of goods under its own brands, Van Heusen,
Calvin Klein, Tommy Hilfiger, IZOD, ARROW,
Warner’s and Olga, and its licensed brands, including Speedo,
Geoffrey Beene, Kenneth Cole New York, Kenneth Cole
Reaction, MICHAEL Michael Kors, Sean John, Chaps,
Donald J. Trump Signature Collection, DKNY, Ike Behar
and John Varvatos.
About Gazal
Based in Sydney and listed on the Australian Securities Exchange, Gazal
Corporation is a leading apparel supplier and retailer in Australasia,
marketing both company owned and licensed brand names such as Calvin
Klein, Van Heusen, Bisley, Nancy Ganz, Spanx,
HoldmeTight, Bracks, Pierre Cardin, Midford and Trade
Secret.
Certain additional financial details in relation to Gazal
Under the transaction, each party will make a further equity
subscription in the JV of A$45.5 million which in the case of Gazal, it
will satisfy by transferring to the JV its shirting, tailored and
shapewear businesses at a value of A$33.6 million and making a cash
subscription of A$11.9 million. The cash component of A$11.9 million
will be funded from Gazal’s existing cash balances and debt facilities
and will be used by the JV to fund working capital and other
requirements. The transaction is subject to customary completion
adjustments applicable to both PVH and Gazal. In any event, PVH and
Gazal will continue to have a 50/50 interest in the JV following
completion of the transaction.
As at June 30, 2014, the carrying value of the assets of the shirting,
tailored and shapewear businesses which correspond to those to be
transferred by Gazal to the JV was A$11.7 million. These assets at the
time of transfer are expected to be between A$11.8 million and A$12.8
million.
This transaction will increase Gazal’s investment in the JV from A$6.4
million to A$51.9 million before transaction costs. Subject to
transaction costs and completion adjustments, Gazal expects to recognize
a pre-tax profit on the sale of these businesses and an increase in net
assets of between A$20.8 million and A$21.8 million.
As part of the transactions, Gazal will receive ongoing services fees
from the enlarged JV for the provision of administration services,
partnering (management) services and office and warehouse space.
In the financial year ended June 30, 2014 Gazal’s shirting, tailored and
shapewear businesses recorded sales of A$46.9 million and net profit
after tax of A$3.6 million. While these transactions will see ownership
of Gazal’s shirting, tailored and shapewear businesses transfer to the
JV, Gazal will hold a 50% interest in the substantially enlarged
business of the JV resulting from these transactions. Gazal expects that
from FY2016 the enlarged business of the JV will result in a net
contribution to Gazal’s reported earnings in excess of the current
contribution of the shirting, tailored and shapewear businesses.
PVH CORP. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: Forward-looking statements made in this press
release, including, without limitation, statements relating to PVH
Corp.’s future plans, strategies, objectives, expectations and
intentions, are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Investors are
cautioned that such forward-looking statements are inherently subject to
risks and uncertainties, many of which cannot be predicted with
accuracy, and some of which might not be anticipated, including, without
limitation (i) the Company's plans, strategies, objectives, expectations
and intentions are subject to change at any time at the discretion of
the Company; (ii) the levels of sales of the Company's licensees at
wholesale and retail, and the extent of discounts and promotional
pricing in which the Company's licensees and other business partners are
required to engage, all of which can be affected by weather conditions,
changes in the economy, fuel prices, reductions in travel, fashion
trends, consolidations, repositionings and bankruptcies in the retail
industries, and other factors; (iii) civil conflict, war or terrorist
acts, the threat of any of the foregoing, or political and labor
instability in any of the countries where the Company's licensees' or
other business partners' products are sold, produced or are planned to
be sold or produced; (iv) disease epidemics and health related concerns,
which could result in closed factories, reduced workforces, scarcity of
raw materials and scrutiny or embargoing of goods produced in infected
areas, as well as reduced consumer traffic and purchasing, as consumers
limit or cease shopping in order to avoid exposure or become ill; (v)
the failure of the Company's licensees to market successfully licensed
products or to preserve the value of the Company's brands, or their
misuse of the Company's brands and (vi) other risks and uncertainties
indicated from time to time in the Company's filings with the Securities
and Exchange Commission.
The Company does not undertake any obligation to update publicly any
forward-looking statement, whether as a result of the receipt of new
information, future events or otherwise.
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Source: PVH Corp.
Media & Investors
PVH
PVH Corp.
Dana
Perlman, +1-212-381-3502
Treasurer, Senior Vice President
Business
Development & Investor Relations
investorrelations@pvh.com
or
Gazal
Gazal
Corporation Limited
Peter Wood, +61-2-9316-2801
Company
Secretary
peter.wood@gazal.com.au
