Transformation Suffered Pains CK Parent Company'S First Quarter Profit Fell 54%

In addition to the restructuring plan for Calvin Klein, which has undergone pformation pains, the PVH will face more challenges.

According to fashion business news, in the three months to May 5th, PVH group revenue increased by 1.8% to 2 billion 360 million US dollars over the same period, with a fixed exchange rate of 6% growth, a significant slowdown from 16% in the same period of the previous year, and the negative impact of the high cost of reorganizing the Calvin Klein, and the net profit fell by 54% to 82 million US dollars over the same period.

During the reporting period, sales of Calvin Klein were unchanged at 890 million US dollars in the same period last year, and sales in North America increased by 2.4% to US $424 million over the same period last year, compared with the 5% decline in sales.

Affected by weak regional performance and unfavorable exchange rate trend, sales of brand international market fell 2% to 465 million US dollars.

The group's other brand, Tommy Hilfiger, grew by 4% to $1 billion 100 million in the first quarter, of which sales grew by 3% to $372 million in the North American market, due to the growth of wholesale business in North America, but the market was offset by a 4% drop in comparable sales.

Driven by European market performance, sales in the international market increased by 4% to US $680 million over the same period, representing an increase of 9% in sales.

The first quarter sales of its Heritage department, which owns Van Heusen, IZOD, ARROW and Warner's, rose 1.5% to $414 million.

The report shows that PVH group has spent $131 million on the restructuring of Calvin Klein and the closing of Tommy Hilfiger stores in the United States this quarter, of which the pre tax cost related to Calvin Klein restructuring is about $105 million, including the impairment of non cash assets, other non cash assets impairment, severance payment, termination of contracts and other costs due to the closure of the flagship store in Madison Avenue, Manhattan, New York.

Up to now, PVH group has spent more than 170 million US dollars to revive Calvin Klein.

According to analysis, brand new creative director Raf Simons's impact on Calvin Klein is the most serious blow to its cowboy business. Group Chairman and CEO Emanuel Chirico believes that until later this year, a more commercially designed brand can be accepted by consumers.

In order to return the focus to jeans, underwear, perfume and other key categories that support group performance and strengthen management power, PVH group has carried out a series of change plans.

Emanuel Chirico last week appointed Ralph Lauren chief executive officer Stefan Larsson as PVH president, with a contract term of 5 years. After taking office, she was mainly responsible for supervising and managing Tommy Hilfiger, Calvin Klein and other brand matters and reporting to the company.

It is reported that the plan of Emanuel Chirico is to deliver CEO's duties to Stefan Larsson in the next 3 to 4 years, and I will continue to serve as chairman of the board.

Earlier, the group appointed Marcella Wartenbergh to be the chief marketing officer of the brand, reporting to Steve Shiffman, chief executive of Calvin Klein.

Ulrich Grimm, which has been in the Calvin Klein for more than 20 years, has been promoted to be the director of global non garment design. Previously, he was responsible for the design of shoes and accessories. In the future, its business involves home products, and Suzanne Barton has been promoted as the global leader in brand underwear design, to ensure the consistency of Calvin Klein Underwear, Calvin Klein and brand.

In order to no longer put all the reform expectations on the role of creative director, Marie Gulin-Merle, chief marketing officer of PVH group, announced an InCKubator marketing plan in an internal memorandum in May 17th. It aims to convene external creative talents, conduct various forms of cooperation in fashion and retail space, and launch four to six cooperation projects for different consumer groups annually.

InCKubator plans to have its own design team and will continue to look for creative director. The project will be launched in September when Calvin Klein is about to launch its new brand.

Calvin Klein is still actively looking for brand creative director, but the new creative director will not be responsible for the same comprehensive business scope as Raf Simons.

At the same time, Calvin Klein has deliberately stepped up digital marketing after the departure of Raf Simons, making it clear that young positioning.

In February of this year, Calvin Klein released its digital marketing campaign called "#MyCalvins". It invited 90's supermodel Kendall Jenner, hip-hop musician A$AP Rocky and singer Shawn Mendes to appear in the advertising videos and videos of the cowboy and underwear series that Glen was shot.

In order to adapt to the changing consumer pattern and the challenge of the retail industry environment, PVH is also strengthening the diversified development mode of the group.

It is understood that the group's acquisition of Gazal 78% stake in Australian apparel brands and the acquisition of Tommy Hilfiger retail business in central and Southeast Asian markets are expected to be completed in the second quarter, which is expected to increase revenue by about $150 million for the group.

PVH group also reached an agreement with Nike in May to design production and distribute Nike men's underwear products worldwide.

Tommy Hilfiger, which has more stable performance, has also been active. It has launched sporting goods stores in Messi's department store, and has expanded the sales range of brand sportswear through retail channels such as Dillard, Amazon and other high-end retail chains in the US. It is expected to increase sales by $100 million.

It is noteworthy that in addition to the high cost of restructuring, the strength of the US dollar and Sino US trade friction also hurt the PVH retail sales in North America, and resulted in a decline in comparable sales of Calvin Klein and Tommy Hilfiger in the North American market, which had a negative impact on its supply chain and consumer sentiment.

As one of the first fashion groups to enter the Chinese market, Emanuel Chirico believes that its wide distribution in the Chinese market is part of the overall strength of the brand. Compared with other competitors, PVH group's business in China is more extensive, which means that the group will suffer more negative effects in the trade friction.

The PVH Group expects that the turbulent situation in the retail industry will continue until the second quarter. The weakness of the group's performance in China and the US market will be particularly severe.

Revenue in 2019 is expected to grow by about 3% over 2018, and sales of Calvin Klein will remain flat.

After the release of the earnings report, PVH group fell 6.28% on the same day, and continued to drop 11.32% to $88 after the market. The market value is now about $7 billion 600 million.