PVH Corp., one of the largest fashion companies in the United States, recently made a significant announcement regarding its licensing agreements with G-III Apparel Group. While PVH has extended most of its license agreements with G-III, the company is planning to bring its core women’s product categories back in-house. This strategic move is part of PVH’s long-term growth plan, known as the PVH+ Plan, which aims to unlock the full potential of its iconic Calvin Klein and Tommy Hilfiger brands in the North American market.

Under the new agreement, the Calvin Klein and Tommy Hilfiger brands in the U.S. and Canada, particularly the women’s North America wholesale business, will have staggered expirations between 2025 and 2027. This approach will allow for a smooth transition of the core product categories back to PVH when the extended terms end. PVH has emphasized that it will work closely with G-III to ensure a seamless transition for consumers and wholesale partners of both brands.

Stefan Larsson, CEO of PVH Corp., highlighted the significance of this decision in driving the company’s strategic growth plan. By bringing these core product categories in-house gradually, PVH will be able to leverage the expertise of its global brand teams and align them with the demand-driven supply chain that the company is developing. Larsson expressed appreciation to G-III for their partnership and continued commitment to Calvin Klein and Tommy Hilfiger in North America.

Zac Coughlin, CFO of PVH Corp., added that the multi-year transition period will allow PVH to reintegrate these core product categories, which previously accounted for approximately one-third of the company’s global licensing revenue and less than 10% of its consolidated EBIT in 2021. PVH plans to approach this process in a disciplined and methodical manner, with G-III remaining a key partner as PVH internalizes the direct operations of these businesses.

In addition to the licensing agreement news, PVH also announced a 2% decrease in third-quarter revenue, amounting to $2.281 billion compared to the same period last year. Tommy Hilfiger’s revenue saw a 4% decrease, while Calvin Klein’s revenue increased by 1% during the same period.

Overall, PVH’s decision to bring its women’s licenses back in-house represents a strategic move to fully capitalize on the potential of its Calvin Klein and Tommy Hilfiger brands in the North American market. With a focus on a seamless transition and leveraging its global brand teams, PVH aims to drive growth and solidify its position in the industry.

Sources:
1. PVH Corp. extends licensing agreements with G-III Apparel Group
2. PVH Corp. Investor Relations