PVH has joined a growing list of US-based fashion groups taking drastic actions as they face the ongoing financial challenges posed by the Coronavirus crisis. The NYC-based owner of Tommy Hilfiger and Calvin Klein is closing its heritage brands retail business as part of wider efforts to streamline its operations in North America in the wake of the COVID-19 pandemic.
The fashion group’s heritage brands include Van Heusen, Geoffrey Beene, Izod, Arrow, Warner’s, True & Co and Olga. The division’s retail business is made up of 162 outlet stores, with Van Heusen constituting the primary owned brick-and-mortar retail channel. Streamlining plans in North America also involve the reduction of office workforce in the region by 450 positions. These reductions will be spread across PVH’s three brand businesses and corporate functions, and are expected to result in annual cost savings of around $80 million.
As it carries out these strategic initiatives, PVH expects to incur pre-tax charges of approximately $80 million over the next 12 months, $10 million of which should be noncash. These charges will largely be related to severance, lease terminations and inventory markdowns, as well as noncash asset impairments.