PVH Corp. isn’t yet seeing the synergies it expected to see between Calvin Klein and Tommy Hilfiger.
Speaking at the Goldman Sachs Global Retail Conference, chief financial officer Michael Shaffer said that PVH fell behind on its accretion projections. The horizon got pushed from six to 18 months to more like 18 to 36 months.
“We’re starting to get those synergies through better product cost and through use of design talent across our divisions, sharing the logistics services, leveraging of our in-house infrastructure platforms, be it IT or warehousing and distribution,” said Shaffer. In terms of sourcing, Shaffer said it wouldn’t happen until next year. The company is looking at some commonality in fabrics and could potentially see a benefit of 1 percent to 3 percent in cost.
Related Articles
PVH’s business in Tommy Hilfiger and Calvin Klein is heavily skewed toward men’s wear, so the company sees the women’s business as an opportunity.
You May Also Like
The company reiterated that it was seeing a turnaround in denim and, like other retailers, the new comfortable jean is a hit with its consumers. PVH is also beginning to see higher prices for the jeans.
Ultimately, PVH was positive about its Tommy Hilfiger business, saying it was the number-one or number-two brand in many of the major European markets and the top brand in Germany.
The group is cautious about the Chinese consumer but so far hasn’t seen a slowdown. It has seen a heavy impact from tourist shopping areas in the U.S., as Brazilian and European customers quickly quit traveling when the dollar strengthened.
With regards to costs, PVH said it was seeing some relief on materials, but that labor costs had risen. The company said it was seeing wage inflation in China and that other countries were stepping up to become cheaper alternatives. Africa was mentioned as a possibility, but not in the near future. PVH did not rule out making strategic acquisitions, but emphasized that it had no interest in a broken brand.