Why Does CK Look At The Sales Channels Of Department Stores That Others Are Not Optimistic About?

According to the world clothing and shoe net, recently, the Calvin Klein parent company PVH group announced the latest quarterly earnings report, and the progress was very obvious. CEO Emanuel Chirico also took the opportunity to announce the next development plan confidently. Its Calvin Klein and Tommy Hilfiger will intensify its efforts to open stores in department stores.

But such an idea is a bit unthinkable for most people.

After all, Michael Kors and Coach have announced the reduction of sales in department stores.

In the second quarter of July 31st, its data exceeded Wall Street's expectations. PVH group's sales volume was $2 billion 70 million, up 6% from the same period last year, the largest increase since January 2014.

Group net profit increased by 31.8% to $119 million, up from only $91 million last year.

What we need to know is that in the last quarter, the net profit of the group dropped by 70%. It can be seen that in the past three months, the progress of group business has been fierce.

The core of its performance has been greatly improved.

Calvin Klein, the brand accounted for 37.9% of total sales, and the second quarter sales rose 8% to 786 million dollars, the most outstanding overseas.

Calvin Klein's overseas sales rose by 20%, while its other brand Tommy Hilfiger also recorded an increase of 6%.

In the telephone conference of PVH Group CEO Emanuel Chirico and Wall Street analysts, Chirico said that department stores occupied the most important distribution channels of the two brands, even though the US Department stores frequently closed down or were seeking pformation, PVH still saw a positive industry trend.

For such an idea, Chirico gave its own explanation: "through our recent performance report, some of our competitors are facing a lot of revenue shocks because of the North American shopping malls, but on the contrary, the two brands of Tommy Hilfiger and Calvin Klein are growing."

So in order to maintain growth, Chirico plans to open more stores of two brands in department stores in the second half of the year. In view of the current growth rate of PVH group, Wall Street analysts have not shown much concern about such a decision.

Ike Boruchow, an analyst at Wells Fargo Bank, pointed out: "PVH is now a rare highlight in the retail industry."

The group's good positioning in the industry has been one of the main reasons why the big investors have been positive.

From the point of view of the channel, the fastest growing part is the online market. The group is investing continuously in its own vertical websites and third party platforms, and Chirico says "sales."

"In particular, fashion is not the same as selling soap." he hopes that companies driven by technology can be clear about this. "When you take technology companies into account within the scope of competitors, our learning curve and mechanism will still have a long way to go."

Chirico added.

The only decline in a good situation is the North American retail market. Sales of Calvin Klein and Tommy Hilfiger have declined slightly. Chirico also acknowledges that the domestic market will continue to face challenges. He expects that such sales will continue at least within this year.

But outside the US market is another scene.

Sales in Europe, Japan and China all showed higher expectations than expected. The company said it would expand further in the Chinese market, and there was still a lot of growth prospects unexplored. Compared to the US, the retail business in Europe was relatively stable. "The US market is clearly at a crisis of inventory backlog at all levels".

Chirico believes that a single Calvin Klein brand is likely to reach US $2 billion in Europe, which is comparable to that of Tommy Hilfiger in Europe.

Raf Simons's new series of perfume launched after taking office, and Kate Moss's commercials for old photos taken by the brand.

The recovery of Calvin Klein's performance may be attributed to Raf Simons, the chief creative officer who took office a year ago. When he formally took office, Chirico had made predictions on the growth prospects of Calvin. "10 billion" is the number that he believes the brand can achieve on a global scale.

As for whether this is too optimistic, it is too early to make a judgement. After all, the first series of Simons has just landed in stores, but the outside world is optimistic about the cooperation between Simons and Calvin Klein, which will become the backbone of PVH's entire group business.

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