Apparel marketer and NYSE listed, PVH Corp said it will close its Izod retail division, with the closing expected to be completed by the end of fiscal 2015.
“However, the closure of the retail business is not expected to impact the company’s growing Izod wholesale business,” PVH said.
PVH plans to convert several of the best Izod locations into Calvin Klein and Tommy Hilfiger stores and hopes that this should result in significantly higher operating margins in these stores.
The Izod retail division currently operates approximately 120 stores and around 20 stores will be converted to store formats under Calvin Klein and Tommy Hilfiger, with the remaining to be closed.
The Company expects to record pre-tax charges in connection with the closure of approximately $40 million, half of which is expected to be non-cash.
The charges relate principally to asset impairments, severance, inventory markdowns and lease exit costs.
CEO Emanuel Chirico said, “The Izod retail business model can no longer achieve acceptable return metrics as a result of the increasingly competitive environment driven by more premium brands.”
“The closing of our Izod retail division has no bearing on our Izod wholesale business strategy, which has shown great growth with our most recent launch at Kohl’s for the Fall 2014 season,” he added.
PVH Corp is the world’s largest shirt and neckwear company and markets a variety of goods under its own brands, Van Heusen, Calvin Klein, Tommy Hilfiger, Izod, Arrow, Warner’s and Olga.
Its licensed brands include Speedo, Geoffrey Beene, Kenneth Cole New York, Kenneth Cole Reaction, Sean John, Chaps, Donald J. Trump Signature Collection, DKNY, Ike Behar and John Varvatos. (AR)
