PVH Corp and Grupo Axo to form joint venture in Mexico
The joint venture will be formed by merging PVH Mexico, S.A. de C.V. with Baseco, S.A. de C.V. PVH Mexico is the wholly owned subsidiary of PVH and the operator of Calvin Klein and Heritage Brands businesses in Mexico, and Baseco is a wholly owned subsidiary of Axo and a distributor in Mexico of Tommy Hilfiger brands. The terms of the joint venture were not disclosed, and the closing is expected to occur early in the third quarter of 2016.
“This strategic move allows us to maintain a direct ownership interest in our Calvin Klein and Heritage Brands businesses in Mexico, while gaining more control over our Tommy Hilfiger business in the region,” said Emanuel Chirico, Chairman and CEO of PVH. “Grupo Axo, which will oversee the joint venture’s day-to-day operations, is an experienced multi-channel distributor, including successfully managing our Tommy Hilfiger business in Mexico for the last 22 years. We believe that leveraging Grupo Axo’s in region expertise across our brand portfolio should ensure the long-term potential in Mexico of our brands.”
Grupo Axo is a multi-brand company in Mexico for apparel, accessories and home brands. As of 2016, the company operates over 2,200 points of sale within major department stores and over 400 freestanding stores in both Mexico and Chile. Grupo Axo also represents Abercrombie & Fitch, Brooks Brothers, Brunello Cucinelli, Coach, Emporio Armani, Guess, Kate Spade, Theory, Hollister, Loft and Victoria’s Secret among others.
PVH expects this transaction to be neutral to its 2016 earnings on a non-GAAP basis.
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