PVH enters JV in Mexico with Grupo Axo
PVH Corp has signed a joint venture agreement in Mexico that will allow it to maintain a direct ownership interest in its Calvin Klein and Heritage Brands businesses in the country, while gaining more control over Tommy Hilfiger in the region.
The joint venture, with a unit of Grupo Axo, will license from wholly-owned subsidiaries of PVH the rights to operate and manage the distribution of Calvin Klein, Tommy Hilfiger, Warner's, Olga and Speedo brand products in Mexico.
The deal will see the merging of PVH México with Baseco, a subsidiary of Axo and a distributor in Mexico of PVH's Tommy Hilfiger brand products.
"Grupo Axo, which will oversee the joint venture's day-to-day operations, is an experienced multi-channel distributor, including successfully managing our Tommy Hilfiger business in Mexico for the last 22 years," says Emanuel Chirico, CEO of PVH. "We believe that leveraging Grupo Axo's in-region expertise across our brand portfolio should ensure the long-term potential in Mexico of our brands."
The deal is expected to close early in the third quarter of 2016. Terms of the joint venture were not disclosed and PVH expects the transaction to be neutral to 2016 group earnings on a non-GAAP basis.
"We have a long and successful relationship with Tommy Hilfiger and PVH," notes Grupo Axo CEO Andres Gomez. "We are excited about the opportunity to expand our relationship to include the global megabrand Calvin Klein, as well as the Warner's, Olga and Speedo heritage brands. We believe all these brands have huge potential for growth in Mexico and we look forward to partnering with PVH to make that potential a reality."
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