Leading apparel maker Warnaco is to buy the companies that operate the licenses and related wholesale and retail businesses of Calvin Klein jeans and accessories in Europe and Asia for EUR240m (US$286m). The deal will provide Warnaco with the worldwide rights for Calvin Klein Jeans.


It will also secure the rights for the CK Calvin Klein 'Bridge' sportswear and accessories line in Europe, and the Calvin Klein Jeans accessories line in Europe and Asia.


Warnaco is buying 100% of the share of the companies that operate these licenses and related wholesale and retail businesses from Fingen, a holding company controlled by Corrado and Marcello Fratini of Florence, Italy.


Calvin Klein Inc, the licensor of the businesses being acquired, is a wholly owned subsidiary of Phillips-Van Heusen Corporation and a minority shareholder of certain of the entities being acquired.


Warnaco will fund the acquisition using a combination of cash on hand and borrowings under a new credit facility. The acquired licenses between Warnaco and Calvin Klein will have 40-year terms.


Additionally, beginning in 2008 and continuing until December 2013, Warnaco will assume the license for Calvin Klein men's and women's Collection apparel and accessories worldwide from Fingen. Warnaco anticipates that the transaction should be accretive in financial 2006.


Warnaco president and chief executive officer Joe Gromek said: "This acquisition is consistent with our strategic focus on developing powerful global brands within our core competencies.


"Combining under one roof the worldwide Calvin Klein jeans, underwear and swimwear businesses should enable us to maximise opportunities in existing geographies and access new markets in a powerful way.


"With Warnaco's existing Calvin Klein businesses and the addition of the jeans and accessories in Europe and Asia and men's and women's bridge sportswear licenses in Europe, Warnaco's Calvin Klein businesses are expected to generate over $900 in revenue beginning in 2006, and Warnaco's international concentration will grow to approximately 38% from the current 28%."


The companies Warnaco will acquire are expected to generate revenue of approximately $240m from the Calvin Klein jeans brand in Europe and Asia in fiscal 2005.


Gromek continued: "The strong retail component of this acquisition will further enhance Warnaco's Calvin Klein direct-to-consumer business, and the combined companies will have over 350 directly managed freestanding stores and concession 'shop-in-shops' worldwide, with an additional network of over 90 doors operated by third-party partners."


Tom Murry, Calvin Klein president and chief operating officer, said:  "We are pleased to extend our partnership with Warnaco.


"Warnaco has a proven track record of successfully developing and distributing Calvin Klein products, including jeans, underwear, and swimwear, and we believe Warnaco will be able to grow these newly acquired Calvin Klein businesses by leveraging its international retail and wholesale network."


"We also feel very good about Warnaco assuming our men's and women's collection apparel and accessory businesses in 2008 and are pleased that Fabio Fusco will continue at the helm.


"We see strategic synergies created by consolidating the businesses for collection apparel and accessories, CK Calvin Klein bridge apparel and accessories, jeans, and underwear, with one partner."


Warnaco said in a conference call that it expected to make a new leadership announcement in conjunction with the signings shortly.


Gromek said during the call that the company wanted to expand its product mix, enhance its direct-to consumer presence and grow its relationship with Calvin Klein.


He said that, after considering a range of alternatives, the new partnerships had looked to be "the most compelling strategic fit for the company" and that it fitted in with Warnaco's focus on "powerful global lifestyle brands".