Profile: Phillips-Van Heusen Corporation (PVH.N)

Phillips-Van Heusen Corporation, incorporated in 1976, is an apparel company. The Company’s portfolio of brands includes its owned brands, Calvin Klein Collection, ck Calvin Klein, Calvin Klein, Van Heusen, IZOD, ARROW, G.H. Bass & Co., Bass, City of London, Bugatti and Eagle, and its licensed brands, Geoffrey Beene, BCBG Max Azria, BCBG Attitude, CHAPS, Sean John, Donald J. Trump Signature Collection, JOE Joseph Abboud, Kenneth Cole New York, Kenneth Cole Reaction, MICHAEL Michael Kors, Michael Kors Collection, DKNY, Tommy Hilfiger, Nautica, Ted Baker, Ike Behar, Valentino, Hart Schaffner Marx, Gianfranco Ruffini, Studio by Fumagalli’s, Zylos by George Machado, Jones New York and Timberland, as well as various private label brands. Its portfolio of licensed brands also includes J. Garcia, Claiborne, U.S. POLO ASSN. and Axcess. The Company designs and markets branded dress shirts, neckwear, sportswear, and footwear and other related products. Additionally, it licenses its owned brands over a range of products. The Company manages its business through five operating divisions: Calvin Klein Licensing; Wholesale Dress Furnishings; Wholesale Sportswear and Related Products; Retail Apparel and Related Products, and Retail Footwear and Related Products. In January 2008, the Company acquired Confezioni Moda Italia S.r.L. (CMI), the licensee of the men’s and women’s Calvin Klein Collection apparel and accessories businesses from Warnaco, Inc.

The Company’s Calvin Klein businesses primarily consist of licensing and similar arrangements worldwide of the Calvin Klein Collection, ck Calvin Klein and Calvin Klein brands for an array of products, including sportswear, jeans, underwear, fragrances, cosmetics, eyewear, men’s tailored clothing, shoes, hosiery, socks, footwear, swimwear, jewelry, watches, outerwear, handbags, leather goods, home furnishings and accessories, as well as to operate retail stores (Calvin Klein Licensing segment); the marketing of the Calvin Klein Collection brand men’s and women’s apparel and accessories collections through its Calvin Klein Collection flagship store (Retail Apparel and Related Products segment); its Calvin Klein dress furnishings and men’s better sportswear businesses (Wholesale Dress Furnishings and Wholesale Sportswear and Related Products segments, respectively); its Calvin Klein retail stores located in outlet malls in the United States (Retail Apparel and Related Products segment), and its Calvin Klein Wholesale Collection business.

Calvin Klein Licensing

The main source of the Company’s revenue is Calvin Klein’s arrangements with licensees and other third parties worldwide that manufacture and distribute globally an array of products under the Calvin Klein brands. During the fiscal year ended February 1, 2009 (fiscal 2009), approximately 39% of Calvin Klein’s royalty, advertising and other revenue was generated domestically, and approximately 61% was generated internationally. Calvin Klein combines its design, marketing and imaging skills with the manufacturing, distribution and geographic capabilities of its licensing and other partners. Calvin Klein’s largest licensing and other partners in terms of royalty, advertising and other revenue earned by Calvin Klein, during fiscal 2009, were Warnaco, accounting for approximately 42%, and Coty, Inc., accounting for approximately 15%.

Wholesale Dress Furnishings

The Company’s Wholesale Dress Furnishings segment principally includes the design and marketing of men’s dress shirts and neckwear. The Company markets both dress shirts and neckwear principally under the ARROW, Calvin Klein, ck Calvin Klein, Calvin Klein Collection, IZOD, Eagle, BCBG Max Azria, BCBG Attitude, Sean John, Donald J. Trump Signature Collection, Kenneth Cole New York, Kenneth Cole Reaction, JOE Joseph Abboud, DKNY and MICHAEL Michael Kors brands. It also markets dress shirts under the Van Heusen, Geoffrey Beene and CHAPS brands and neckwear under the Tommy Hilfiger, Nautica, Jones New York, Michael Kors Collection, Valentino, City of London, Bugatti, ck Calvin Klein, Ike Behar, Ted Baker, Hart Schaffner Marx, Gianfranco Ruffini, Studio by Fumagalli’s, Zylos by George Machado, J. Garcia, Claiborne, U.S. POLO ASSN. and Axcess brands.

The Company offers private label dress shirt and neckwear programs to retailers. Private label offerings enable a retailer to sell its own line of exclusive merchandise at generally higher margins. It markets private label dress shirts and neckwear to national department and mass market stores. Its private label dress shirt program consists of George for Wal-Mart and Apt. 9 for Kohl’s. Its private label neckwear programs include Murano, Daniel Cremieux and Roundtree & Yorke for Dillard’s, Club Room and Via Europe for Macy’s, Croft & Barrow and Apt. 9 for Kohl’s, Covington for Sears, Merona for Target Corporation, John W. Nordstrom for Nordstrom, Inc. and Stafford and J. Ferrar for JCPenney.

Wholesale Sportswear and Related Products

The Company markets its sportswear, including men’s knit and woven sport shirts, sweaters, bottoms, swimwear, boxers and outerwear, at wholesale, principally under the IZOD, Van Heusen, ARROW, Geoffrey Beene, Timberland and Calvin Klein brands. It also markets women’s sportswear, including knit and woven sport shirts, sweaters, bottoms and outerwear under the IZOD brand.

Retail

The Company operates over 650 retail locations under the Van Heusen, IZOD, Bass, Calvin Klein and Calvin Klein Collection names. During fiscal 2009, it announced its decision not to renew its license to operate Geoffrey Beene outlet retail stores. The Company’s stores are primarily located in outlet malls throughout the United States. It also operates a full price store located in New York City under the Calvin Klein Collection brand, in which it sells men’s and women’s apparel and accessories, soft home furnishings and tableware. The Company’s stores range in size from 1,000 to 14,000 square feet, with an average of approximately 5,000 square feet.

Retail Apparel and Related Products

The Company’s Van Heusen stores offer men’s dress shirts, neckwear and underwear, men’s and women’s suit separates, men’s and women’s sportswear, including woven and knit shirts, sweaters, bottoms and outerwear, and men’s and women’s accessories. Its IZOD stores offer men’s and women’s active-inspired sportswear, including woven and knit shirts, sweaters, bottoms and activewear and men’s fragrance. These stores focus on golf, travel and resort clothing. The Company’s Calvin Klein outlet stores are located principally in outlet centers, and offer men’s and women’s apparel and other Calvin Klein products to communicate the Calvin Klein lifestyle. It also operates one Calvin Klein Collection store, located on Madison Avenue in New York City, that offers Calvin Klein Collection men’s and women’s apparel and accessories and other products under the Calvin Klein brands.

Retail Footwear and Related Products

The Company’s Bass stores offer casual and dress shoes for men, women and children. Most of its Bass stores also carry apparel for men and women, including tops, neckwear, bottoms and outerwear, as well as accessories, such as handbags, wallets, belts and travel gear.

The Company competes with Ralph Lauren Corporation, Tommy Hilfiger Corporation, Nautica Enterprises, Inc., Perry Ellis International, The Timberland Company, The Rockport Company, LLC, The Donna Karan Company, LLC, Polo Ralph Lauren’s Purple Label, Giorgio Armani SPA, Gucci Group N.V. and Prada SPA Group.