One of the World’s Largest Branded Lifestyle and Apparel ...€¦ · One of the World’s Largest...

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1 WE ARE PVH, One of the World’s Largest Branded Lifestyle and Apparel Companies Kenneth L. Wyse President, PVH Heritage Licensing

Transcript of One of the World’s Largest Branded Lifestyle and Apparel ...€¦ · One of the World’s Largest...

Page 1: One of the World’s Largest Branded Lifestyle and Apparel ...€¦ · One of the World’s Largest Branded Lifestyle and Apparel Companies Kenneth L. Wyse President, PVH Heritage

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WE ARE PVH, One of the World’s Largest

Branded Lifestyle and Apparel Companies

Kenneth L. Wyse President,

PVH Heritage Licensing

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PVH Is A Global Leader In The Apparel Industry

With ~$8.2 BN in revenues, PVH is one of the largest global apparel companies in the world

Source: Factset.

$11.4

$8.2

$7.5

$5.1

$3.7 $3.4 $3.3 $3.3

$2.6

VFC PVH RL COH BRBY BOSS KORS FOSL GES

2013 Revenue ($ in billions)

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A World Class Portfolio Of Brands

CHAPS DKNY

Donald J. Trump Signature Elie Tahari

Geoffrey Beene Ike Behar

John Varvatos Kenneth Cole Reaction Kenneth Cole New York MICHAEL Michael Kors

Nautica Sean John

GLOBAL GROWTH BRANDS

* Partial list

(1) The Speedo brand is licensed for North America and the Caribbean in perpetuity from

Speedo International, Ltd.

Owned*

Licensed*

(1)

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Our 2013 Warnaco Acquisition Expands Our Focus on Calvin Klein and

Tommy Hilfiger…

Total Revenue by Business

Segment (2013)

TOMMY HILFIGER

CALVIN KLEIN

HERITAGE BRANDS

Calvin Klein & Tommy Hilfiger currently account for ~75% of PVH’s revenues and ~85% of PVH’s EBIT

(1) Figures exclude non-recurring and one-time items and corporate expenses. Refer to Appendix for GAAP reconciliation.

42%

34%

24%

(1)

EBIT by Business

Segment (2013)

45%

41%

14%

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… and Provides PVH With A Significant Presence in Asia and Latin

America

Total Revenue by Region (2013)

NORTH AMERICA

EUROPE

ASIA

LATIN AMERICA

Asia and Latin America now account for ~12% of PVH’s revenues and over 20% of PVH’s EBIT

28%

9%

61%

2%

(1)

EBIT by Region

(2013)

15%

56%

24%

Note:

North America includes Mexico.

Europe includes the Middle East and Africa.

Asia includes Australia and New Zealand.

Latin America includes South America, the Caribbean and Central America.

(1) Figures exclude non-recurring and one-time items.

5%

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Role of Licensing Within a Corporation

• Enhance and extend the trademarks in the domestic and international markets with consistent brand image and recognition through strategic partnerships

• Protect and defend the trademarks in domestic and international markets

• Generate royalty income

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The Licensing Process

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Tommy Hilfiger — Brand Overview

12%

42%

39%

7%

2013 Global Retail Sales: $6.4 BN

10%

43%

41%

6%

Classic American Cool/Preppy With A Twist

Strong Global Brand Awareness

Proven Accessible Designer Lifestyle Brand

(1) Latin America includes South America, the Caribbean and Central America.

(2) Asia includes Australia and New Zealand.

(3) Europe includes the Middle East and Africa.

(2)

North America

Latin America

Europe (3)

Asia

(1)

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Tommy Hilfiger Licensing Model

OVERVIEW • Originally a license with Dickson Poon for China & Southeast Asia • Transitioned to joint venture with Apax and PVH Corp. for China only • Dickson Poon is still the licensee for the rest of Southeast Asia & Hong Kong • Over 100 stores currently in operation in China

LOCAL PARTNERS • Operate the retail stores and handle the wholesale business • Do not source locally

• Product comes from Europe

• No specialized Asian sizing – using mostly European size scale (sized 1 size scale down) • E-commerce business

GLOBAL LICENSED CATEGORY PARTNERS • Fragrance – Estee Lauder • Watches – Movado Group, Inc.

• Eyewear – Safilo

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Calvin Klein — Brand Overview

19%

23%

52%

6% 19%

23% 54%

4%

- Calvin Klein Collection offers halo and inspiration to Calvin Klein

platinum label (bridge apparel), Calvin Klein white label (better

apparel), Calvin Klein Jeans and Calvin Klein Underwear

- Brand leveraged across multiple products, channels & price points

- Significant underperformance of Calvin Klein Jeans in Europe and

U.S. impacted global retail sales

(1) Latin America includes South America, the Caribbean and Central America.

(2) Asia includes Australia and New Zealand.

(3) Europe includes the Middle East and Africa.

North America

Latin America

Asia

Europe

(3)

(1)

(2)

19%

20% 57%

4%

2013 Global Retail Sales: $7.8 BN

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Calvin Klein Licensing Model

OVERVIEW

• Originally Warnaco licensed the business for Jeans & Underwear • After Warnaco acquisition in 2012, PVH Corp. took control of all Jeans and Underwear business • Club 21 (Singapore-based) still licenses Platinum Label for bridge sportswear in China • PVH operates many stores in China • Both PVH and Club 21 have created special Asian sizing

GLOBAL LICENSED CATEGORY PARTNERS

• Watches & Jewelry –Swatch Group • Eyewear – Marchon • Fragrance – Coty

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Heritage Brands — Overview & Financials

Heritage Brands

~80% 3Q14 LTM Revenues(1) as % of Total ~20%

Wholesale Retail

Wholesale sportswear has generally been strong, reflecting initiatives to better position the Van

Heusen, IZOD and ARROW brands within department and chain store accounts

Warner’s, Olga and Speedo performing well

Retail performance has been challenging

(1) Refer to Appendix for reconciliations of LTM figures. LTM EBIT margin excludes non-recurring and one-time items.

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Our Heritage Brands Categories Have Strong Market Share Positions

(1) Based on percentage of 2013 unit volume in US Department and Chain Stores combined.

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PVH Heritage Brands – Business By Region

2014 Global Retail Sales: $3.8 billion North America

Europe

Latin America

Asia

1% 3%

11%

85% North America includes U.S. PVH-Owned Businesses:

Sportswear, Dress Shirts, Neckwear, Retail Outlet Stores

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2014 Licensed Global Retail Sales: $900 million North America

Europe

Latin America

Asia

32%

6%

12%

50% North America includes

licensed business only

PVH Heritage Brands – Licensed Business By Region

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LICENSING

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Case Study: IZOD in China

LICENSEE: DISHANG FASHION BRANDS COMPANY LTD.

• Subsidiary of Weihai-based Dishang Group • Dishang Group CEO: Mr. Lihua Zhu

• Headquartered in Beijing

• Licensee for IZOD apparel and accessories since 2010

• Presently operating 55 stores/shops specializing in

men’s apparel

• Goal is to grow to over 100 stores and $100M+ business

• Licensee designs and manufactures a product line that syncs with U.S. brand DNA

• PVH and licensee collaborate across many disciplines: including Product Design, Marketing, Store Design and Special Events

Mr. Lihua Zhu

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Communicating an American Brand in China

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Examples of Winter 2014

United States Magazine Advertising

Communicating an American Brand in China

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CHALLENGES WITH A LICENSING ARRANGEMENT: • Lack of brand understanding

• Lack of advertising nuance

• “Their way” vs. “our way”

• Sizing and color differences

• Youth market vs. mature U.S. customer

• Complications in communication

• 1st generation vs. 2nd generation

Case Study: IZOD in China

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Date: April 2nd, 2014

Setting: Conrad Hotel, Beijing

Participants: Mall Owners, Fashion and News Media,

VIP’s and Potential Franchisees Components: • Immersion Summit (Brand Story & Heritage, Business Strategy)

• Product showcase

• 2014 Autumn & Winter Fashion show

• Welcome Cocktail & Gala Dinner

IZOD China Brand Summit Event, April 2014

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PRODUCT SHOWCASE

IZOD China Brand Summit Event, April 2014

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FASHION SHOW

IZOD China Brand Summit Event, April 2014

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SEAN LI PERFORMANCE

IZOD China Brand Summit Event, April 2014

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IZOD China Brand Summit Event, April 2014

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IZOD China Stores

Beijing, Xizhimen Kaide Chongqing, Nanping Wanda

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KEY FACTORS FOR LONG-TERM LICENSING SUCCESS Quality relationships with outstanding partners

• Shared ethics, principles & integrity

Understanding that licensing is a slow-build business:

• It takes 3 full seasons to effectively launch

a fashion apparel brand in a new market

• Requires: • Patience • Forebearance • Fortitude

• Evolution of Licensing: Licensing Distribution Joint Venture Ownership

Licensing in China

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Kenneth L. Wyse

President, PVH Heritage Licensing