Apparel giant PVH Corp has inked a five-year licensing deal with G-III Apparel Group to produce and distribute Calvin Klein Jeans women’s wear collections in the US and Canada.
The agreement covers design, production and distribution and adds to the other women’s Calvin Klein businesses that are already licensed to G-III by PVH’s Calvin Klein Inc (CKI) subsidiary.
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PVH says the arrangement will support its strategy to build a successful women’s jeanswear business in North America by leveraging G-III’s category and market expertise. The launch of G-III’s first women’s Calvin Klein Jeans collection is expected for the spring 2020 season.
“G-III has been a great partner for us over the years and has successfully grown the Calvin Klein womenswear business to be a leading resource across the North American apparel market,” says Emanuel Chirico, chairman and CEO at PVH Corp. “We look forward to our expanded partnership with G-III, as this represents another great opportunity to leverage their market expertise to drive the continued expansion of the Calvin Klein women’s apparel categories.”
Analysts at B Riley estimate the Calvin Klein Jeans women’s business does about $300m in the US/Canada, with a mix of about 70%/30% wholesale/retail – which could lead to high single digit growth for G-III.
“Calvin Klein is G-III’s most important licensing relationship, generating more than $1bn in sales in 2018,” notes analyst Susan Anderson. “The addition further expands G-III’s Calvin Klein licensing portfolio, which also includes men’s and women’s outerwear, dresses, women’s suits, women’s performance wear, luggage, women’s handbags, and small leather goods, women’s performance retail and men’s and women’s swimwear.”
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By GlobalDataShe adds that “while G-III is heavily exposed to China sourcing (62% of revenues)…we believe this additional license agreement will help to offset pressure if these tariffs [on the remaining $330bn of imports into the US from China] are implemented.
“Additionally, we believe…there is potential apparel/footwear gets left out of the last tranche given the impact it will have on the consumer.”
The new license follows a shake-up of the Calvin Klein business in January as it works towards reaching US$12bn in global retail sales over the next few years. The changes included a consolidation of its men’s Calvin Klein Sportswear and Calvin Klein Jeans business in North America.
Recent changes have also seen PVH take back control of Tommy Hilfiger in SE Asia, the company has agreed a licensing deal for Nike men’s underwear; and it has just completed the acquisition of Gazal Corporation, its long-term partner in Australia.
