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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
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