PVH CEO Chirico sees growth in international business, e-commerce
PVH on Wednesday reported fourth quarter sales and earnings that exceeded its guidance. The company achieved its goal due to strong international performances from its Tommy Hilfiger and Calvin Klein businesses. Emanuel Chirico, CEO of PVH, explained in a conference call that the European and Asian stores are not “under pressure” like in the US.
“The challenges that we’re facing in brick and mortar in the United States has to do with too many stores,” said Chirico. “I don’t believe that issue to the level that it exist in the United States exist in Europe and in Asia.”
The CEO also explained that the lack of a Pan European department store and the “currency situation” have benefited the company.
Calvin Klein and Tommy Hilfiger both posted revenue increases, with a 6% and 9% increase in international comparable sales, respectively, that offset the decline in North America sales. Chirico added that the top 20 retailers in Europe represent 30% of the business while the top 10 US retailers are 90% of the business.
PVH sees growth in the near future for the Tommy Hilfiger and Calvin Klein businesses, specifically in China where the businesses could double by fiscal 2022.
Chirico also believes that the company must enhance the online shopping experience in terms of efficiency and effectiveness. He said he is not sure if online shopping is as impulsive as brick-and-mortar shopping, because of a lack of “romance.”
“We are in the fashion industry and we need to romance that consumer much more than we do today,” he said. “I think some players do it well and some players don’t do it all, it’s like buying a bar or soap. So we really need to make that experience much better.”
PVH acquired intimates e-tailer True&Co. this week and the terms were not disclosed. Chirico said with the acquisition announcement that the company plans to leverage analytics tools and its intimates business to understand consumer habits.
“If there are opportunities from a digital point of view or we can make an investment, gain expertise, because it’s very expensive and challenging to go out and get the talent that’s necessary,” he said. “Sometimes it’s easier and more efficient to buy that talent like we did with the True acquisition.”
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