Calvin Klein Abandons High Fashion And Hopes To Improve Positioning.

After parting with Raf Simons, Calvin Klein gave up high fashion.

According to fashion business news, in January, after closing the Calvin Klein 205W39NYC flagship store in New York, Calvin Klein said on Wednesday that it will abandon the senior garment series, has disbanded the team of New York and Milan offices, laid off 100 people, and Milan office has also closed down. Calvin Klein 205W39NYC CEO Michelle Kessler-Sanders will be leaving, but the chief executive officer, Steve Steve, will remain in office.

In December last year, Calvin Klein's parent company PVH group said it would reconsider the brand's attitude and positioning towards the luxury market. The original plan was to rename the 205W39NYC series and set up a new position. It also announced that it would spend $120 million on restructuring, mainly including severance payment, deposit reduction and quotas, and closing stores.

Calvin Klein decided to end the senior garment business, demonstrating the determination of brand restructuring and relocation. According to a spokesman for Bloomberg's Calvin Klein, the company is positioning itself out of high fashion and is looking for a new creative director to replace Raf Simons and supervise the design of brand businesses.

Calvin Klein, founded in 1968 by the same name designer Calvin Klein, is known for its tailored and simple women's wear design. The designer Calvin Klein himself is also one of the few representative American designers in the contemporary European centric fashion industry.

With the expansion of the brand, Calvin Klein's clothing product matrix extends from women's clothing to men's fashion, jeans, underwear, perfume and accessories. It has Calvin Klein Collection, men's and women's garments CK Calvin Klein, leisure fashion line Calvin Klein, the main jeans jeans Calvin, the underwear oriented, the main household furniture, and the main line of furniture, such as sports and sports.

Calvin Klein, which has a full range of contacts with consumers, has become a well-known brand in the United States. However, its development path and market positioning gradually fall into the middle end market. In August 2016, Raf Simons, the star creative director, took the lead in Calvin Klein as chief creative officer, including men's underwear, perfume, jeans, accessories and men's and women's fashion. Under the leadership of Raf Simons, Calvin Klein ushered in the largest and the highest frequency innovation in history, from brand culture to creative marketing, from online to offline, toward artistic and high-end spanformation.

After taking office, his first move was to replace the brand Logo, so that the Calvin Klein, which was originally positioned in the high-end market, became more "luxurious" and changed its clothing series to CALVIN KLEIN 205W39NYC. Subsequently, Raf Simons's first ready-made garment series in Calvin Klein was well received by the fashion industry. Some people sighed, "Calvin Klein is finally resurrected."

From the data point of view, Raf Simons is indeed one of the heroes who led PVH to step closer to the club of annual revenue of $9 billion. Before the third quarter, Calvin Klein has been described as the main growth engine of group performance in PVH's earnings.

However, the situation of Calvin Klein was in a downward spiral in the second half of 2017, and Raf Simons's drastic changes were not enough, and its performance began to show a negative reaction. According to fashion headline data, in the third quarter ended November 4th, Calvin Klein sales growth slowed to 2% and recorded $963 million, and profits before interest tax depreciation dropped 15% to $121 million. PVH group's performance was also dragged down, for the first time in two years, revenue fell short of analysts' expectations.

Emanuel Chirico, chairman and chief executive officer of PVH group, said that after the accession of Raf Simons, most of the products sold by Calvin Klein really performed well, but the ready-made clothing products were too expensive to exceed the target consumers' range. "Whether we design the fashion or the price, we have gone too far and too fast."

Waterloo's performance in PVH group is just like a wake-up call. In the fierce market competition, the impatient PVH released the Raf Simons eight months ahead of schedule, and began a series of strategic adjustments. In order to better enhance profitability, PVH decided to merge Calvin Klein men's sportswear and Calvin Klein jeans business. At the same time, retail and electricity providers were classified as the same department, and the CMO department, called "consumer marketing organization", was set up to implement innovative digital marketing strategy.

It is reported that Calvin Klein executives also plan to follow the strategy of cooperation with Justin Bieber, Cameron Dallas, Shawn Mendes, Kendall Jenner and other traffic celebrities and network red, and deepen cooperation with the e-commerce giant Amazon, and launch online try on jeans and other APP to attract more millennial consumers.

Steven Shiffman said that now more than ever, it is necessary to push forward fashion and culture development, create new products and experience to meet the needs of consumers. These strategic initiatives will enable the brand to develop in a more modern, dynamic and efficient way. He further stressed that in this critical period, the commercialization of Calvin Klein will create huge growth opportunities for the group, and annual revenue is expected to enter the $12 billion club in the next few years.

Some analysts pointed out that Calvin Klein and Raf Simons's high-profile breakup, to some extent, highlighted the contradiction between designer's creativity and business. Every new strategy formulated by the group emphasizes that it does not want to repeat the mistakes of Raf Simons. Although the group still considers culture and creativity to be very important, the group has chosen a more business oriented development path than Raf Simons's single-minded approach to art.

The industry has different opinions on the practice of completely closing the advanced garment series. There is a view that the closure of the advanced garment series, the reduction of pricing and other initiatives imply that Calvin Klein will withdraw from the high-end market, and the Calvin Klein, which lost the high-end series and designer halo, will once again overturn the fashion brand's operation mode for many years.

Kim Vernon, President and chief executive officer of Vernon, a consultancy, says it is a great challenge to run a brand without a designer series. It requires experienced management to launch a unique business model by combining the core value of the brand with the product that captures the minds of consumers.

Susan Soko, co-founder and chief executive officer of High Alchemy, thinks that the advanced garment series is only a small part of Calvin Klein. Brand jeans, underwear, perfume and other series are the main sources to support the brand performance. Therefore, the closure of the senior garment series will not cause too much impact on the brand.

It is not yet known whether a series of initiatives of Calvin Klein will take effect. But when brands want to improve their positioning, Calvin Klein's complete abandonment of advanced garment making measures may bring introspection to the market. Author: Sherry Wang