PVH unveiled its new growth plan at its 2022 Investor Day yesterday (13 April). PVH+ Plan provides a roadmap for brand-, digital- and direct-to-consumer (DTC)-led sustainable, profitable growth through 2025 to deliver accelerated financial performance and long-term value creation, the company says.
The strategy is powered by leveraging the strength of PVH’s two global brands, Calvin Klein and Tommy Hilfiger, and connecting them closer to the consumer than ever before.
CEO Stefan Larsson says: “Having successfully driven an accelerated recovery and generated record earnings per share in 2021, our priority now is to connect with the consumer in ways that reflect the formula to win in the ‘new normal’ and create long-term value. The execution of the PVH+ Plan will accelerate the growth of Calvin Klein and Tommy Hilfiger, two of the most iconic brands in the world, by unlocking their full potential across each of our regions.”
PVH+ Plan builds on the core strengths of the group and aims to connect the brands closer to consumers through five key drivers:
- Win with product – PVH will develop the best hero products in the market across key growth categories, with a focus on expanding in large and growing global demand spaces where the company’s brands resonate most with consumers.
- Win with consumer engagement – By driving digital-first, 360-degree consumer engagement built around brand, hero products and key consumer moments, partnering with the best creators in the industry, and building out each brand’s ambassador programme, Calvin Klein and Tommy Hilfiger will meet consumers on their terms in new and engaging ways.
- Win in the digitally-led marketplace – The consumer of today shops digitally first and expects seamless integration of their physical and digital experiences. PVH is accelerating digital growth by building a holistic distribution strategy for Calvin Klein and Tommy Hilfiger, led by digital and direct-to-consumer channels, and supported by key wholesale partnerships.
- Develop a demand- and data-driven operating model – PVH is developing a demand- and data-driven operating model, starting with a systematic and repeatable product creation model that puts the consumer first and leverages data to bring new and fresh products to market with speed and agility.
- Drive efficiencies and invest in growth –A key driver of the PVH+ Plan will be the relentless focus on driving efficiencies to become more cost-competitive and reinvest in key strategic growth drivers. PVH is simplifying how its teams work and identifying efficiencies to fuel initiatives with the greatest positive impact and strongest return.
PVH says these five foundational drivers apply to each of its businesses and are activated in the regions to reflect consumer differences and their unique expectations. Leveraging the full power of Calvin Klein and Tommy Hilfiger, PVH says it is building on its market-leading strength in Europe, accelerating from strength in Asia Pacific, and unlocking the full potential of the strength of its brands in the Americas.
PVH financial objectives
The execution of the PVH+ Plan is expected to achieve the following financial objectives:
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- Revenue: High single-digit compounded annual growth (CAGR) from 2021 to approximately $12.5bn in 2025. The key drivers of revenue growth across brand, region and channel include:
- Balanced growth from Calvin Klein and Tommy Hilfiger globally
- High single-digit CAGR in Europe and the Americas; mid-teens CAGR in Asia Pacific
- 20%+ CAGR in digital channels
- Direct-to-consumer brick & mortar outpacing wholesale brick and mortar
- Operating margin: Expected to expand to approximately 15% in 2025
- Free cash flow: Expected to be over $1bn in 2025
The company reaffirms its first quarter and full year 2022 outlook previously announced last month.
PVH recently appointed Rick Relinger to the role of senior vice president, chief sustainability officer (CSO) on a permanent basis.