PVH Corp., mother company of Calvin Klein and Tommy Hilfiger, plans to streamline its North American operations to face the changed retail scene caused by Covid-19 pandemic.
The company’s actions focus on its Heritage Brands division with brands such as Van Heusen, Izod, Arrow and Geoffrey Beene and includes exiting its 162 outlet store Heritage Brands Retail business and reducing 12% of its office workforce that involves approximately 450 positions. The group’s revenues of the first quarter of 2020 decreased 43% to $1.344 billion compared to the prior year.
As PVH states in an official press release, the North American office workforce reductions are expected to result in annual cost savings of about US$80 million. The Heritage Brands Retail stores, that sell brands such as Van Heusen and Izod, are expected to operate through mid-2021.
“The structural changes occurring in the North American retail landscape have required us to take a hard look at our North American operations and identify where we can optimize costs across our business model,” said Manny Chirico, chairman and CEO, PVH. “As a result, we are making the incredibly difficult decisions to close our Heritage Brands Retail business and eliminate a significant number of positions throughout our North American organization to align with the lower revenue base.”
Stefan Larsson, PVH’s president, said: “The Covid-19 crisis is dramatically reshaping the retail landscape in ways that we believe will be long-term in nature and far-reaching in terms of consumer purchasing behavior. We are adapting our businesses and rebalancing our cost base to improve our competitiveness and financial profile and, where appropriate, are reallocating resources to our businesses that drive greater returns.”