PVH Shifting to ‘Accelerated Recovery Phase’
Stefan Larsson, getting his footing as chief executive officer of PVH Corp., told Wall Street that the company is moving on to “an accelerated recovery phase” as vaccinations help key markets look beyond the pandemic.
“We had a very strong first quarter,” Larsson told analysts on a conference call Thursday going over first-quarter results. “We over delivered our revenue, gross margin rate and [earnings per share] versus our expectation. And the most important part of the strong performance is the underlying drivers behind it, which are important proof points for what we set out to achieve through our strategic focus areas.
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“As we are connecting closer to where the consumer is going, the strength and value-creating potential of our global growth brands, Calvin Klein and Tommy Hilfiger, is real and already starting to deliver results,” he said.
Larsson, who took the reins from longtime CEO Manny Chirico in February, is pushing a strategy that has PVH looking to drive brand relevance, take profitable market share and strengthen its platform capabilities.
“Over time, doing that more efficiently, we’re also becoming even more demand and data-driven, enabling us to create value in a more systematic and repeatable way,” he said.
It’s an evolution that is bringing, or happening alongside of, some C-suite changes.
Trish Donnelly, CEO, PVH Americas, who already has oversight of Calvin Klein, is taking global responsibility for the business as the brand’s current CEO, Cheryl Abel-Hodges, moves to an advisory role next month. Chief operating and financial officer Mike Shaffer is also leaving, in September, to pursue other opportunities.
Donnelly joined PVH in February after leading Urban Outfitters Group as CEO and takes operational control of Calvin Klein as the business seeks to flex its brand power.
Larsson noted that Calvin Klein launched its first global product collaboration with Heron Preston in the first quarter.
“The collection focuses on reinvented essentials, true to the Calvin Klein brand DNA and is connected to where culture is today,” Larsson said. “The response to date has been very positive, and we have a number of encouraging learnings. Globally, the collaboration has attracted a new, younger and very valuable consumer.”
At Tommy Hilfiger, Larsson said the brand was seeing increases in awareness and visibility as well as strong search interest.
“In Europe, Tommy drove strong sell-through for our spring capsules, including our collaboration with Patta, the Amsterdam-based streetwear brand, which was very well received. Additionally, the brand made another step towards circularity with the launch of our first limited-edition upcycle collection.”
Meanwhile, the future of PVH’s Heritage business is up in the air.
WWD previously reported that brand specialist Authentic Brands Group was “gunning hard” to buy the division, which includes Van Heusen, Izod, Arrow, Geoffrey Beene, Warner’s, Olga and True & Co.
While not addressing that report, Larsson told analysts on Thursday, “While we saw some improvements in our heritage brands this quarter, the business continued to face challenges.”
PVH is on track to exit the remaining stores tied to the Heritage division this summer and Larsson said, “We are continuing to actively review additional ways to optimize the business.”
The company is completing its metamorphosis in a world still disrupted by COVID-19, from supply chain back-ups to the lack of tourism in North America, where 30 to 40 percent of the Tommy Hilfiger and Calvin Klein business is driven by visitors.
“A big part of that is temporarily gone,” Larsson said. “Over time, we will see [tourism] come back. Question is, how soon it will come back?
“We have a lot of work to do with the domestic consumer in North America,” he said. “So we’re already leaning into this opportunity.”
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