NEW YORK — Kellwood Co. and Phillips-Van Heusen Corp. have revised three licensing arrangements between the companies.
Under a new deal revealed Tuesday, PVH has granted Kellwood the ck Calvin Klein women’s bridge sportswear license for North America, extended the license for the Calvin Klein women’s better sportswear line and taken back the Izod women’s sportswear license.
“We are focusing on increasing the percentage of Kellwood’s business done in better and above, as part of our corporate strategy to increase the percentage of higher-profile, upscale brands in our portfolio,” said Robert C. Skinner Jr., Kellwood chairman, president and chief executive officer. “At the same time, we are focusing in the moderate arena on developing our own brands rather than licensed brands.”
As Kellwood, the $2 billion apparel firm, shifts its strategy, recognizable brands like Calvin Klein’s derivative lines have become more appealing as licenses than the moderately priced Izod, said Skinner. Kellwood has held the women’s Izod license since 2002, and the business generates an estimated wholesale volume of $40 million. Upon mutual agreement, Kellwood will return the Izod license next June to PVH, which manufactures the men’s Izod collection.
“We believe we can replicate in the women’s sportswear arena the success we have had with the Izod brand in men’s sportswear,” Emanuel Chirico, ceo of PVH, said in a statement. “The design, merchandising, price positioning and distribution for the women’s sportswear line will mirror that of our Izod men’s product. It is a natural progression for the company to move in this direction.”
The dual Calvin Klein licenses, which will run concurrently through 2012 with a renewal option to 2017, give Kellwood a stronger foothold in the destination apparel market. In addition to its fall relaunch of the Calvin Klein better line, Kellwood recently announced its purchase of contemporary resource Vince and the relaunch of the licensed O Oscar better line for spring 2007. The ck line will be Kellwood’s entrée into the bridge market.
G.A.V. previously held the license for the ck bridge line. It also originally held the license for the Calvin Klein better line, in a joint venture with Kellwood, before Kellwood relaunched the collection on its own. Now, G.A.V. has only the Emanuel by Emanuel Ungaro line. Andrew Grossman, ceo of G.A.V., could not be reached for comment.
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According to industry sources, G.A.V. did not make money on the ck Calvin Klein bridge line. That collection faced several challenges since it was the only bridge line among its competitive set that had to pay a royalty to a design house, and it was launched at a time when the bridge market was having difficulties.
Stephen L. Ruzow, president of Calvin Klein women’s better sportswear, will also oversee the ck Calvin Klein women’s bridge sportswear line. He is optimistic that controlling both Calvin Klein’s bridge and better businesses will allow the company to take advantage of synergies between the management and design teams. Chris Jackson, who joined as vice president of design for Calvin Klein at Kellwood, will also head the ck Calvin Klein design team, but Kellwood is hiring a separate design team to work with him for the bridge line. With almost a decade at DKNY, Jackson brings modern bridge experience to the line.
Jackson and Ruzow already work with Kevin Carrigan, creative director of both Calvin Klein’s better and bridge collections, and Tom Murry, CKI’s president and ceo.
The bridge line — which will be a smaller business than the better line, with a more exclusive distribution — will be relaunched for spring 2008. Ruzow said Kellwood hopes to sell to such stores as Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue, Bloomingdale’s, Nordstrom, Lord & Taylor and Holt Renfrew in Canada.
Kellwood declined to comment on the volume potential of the bridge line, but Todd Slater, a retail analyst for Lazard Capital Markets LLC, here, said he expected it could bring Kellwood $20 million to $30 million in revenue, calling the license acquisition an “incremental positive” for the St. Louis manufacturer.
Slater considers Tuesday’s news “a non-issue in the near term.” On Izod, he added, “We believe the Izod brand was generating approximately $40 million in annual revenue and was only slightly profitable after accounting for royalty fees to PVH. An exclusive with May Co., Izod fell victim to the upscaling of May doors by Federated post-acquisition. We believe Kellwood was having a difficult time placing the product in new doors and generating enough of a return to cover royalty and advertising payments to PVH.”