CK, Izod Tie Rights Back to PVH as Superba Deal Closes
NEW YORK – Phillips-Van Heusen Corp. has marked the successful completion of its acquisition of the principal assets of neckwear manufacturer Superba Inc. by establishing the PVH Neckwear Group, appointing Lee Terrill as the new unit’s president, and taking the neckwear licenses for Calvin Klein and Izod in-house.
Mervyn Mandelbaum, chief executive officer of Superba, will serve in the same capacity for PVH’s neckwear unit, which will consist of the Superba division and Insignia Design Group. Terrill, a 28-year veteran of PVH, was most recently president of PVH’s branded dress shirt group, a post he’d held since 1998. A successor to Terrill in his former position and other realignments in management responsibilities are expected in the next few weeks.
PVH has reached a separate agreement with Mallory & Church LLC allowing for the early termination of M&C’s licenses for Calvin Klein and Izod neckwear. PVH said it expects that arrangement to be finalized in early February and that its neckwear group will begin shipments of neckwear under the two brands for Fall 2007 selling.
PVH said in October that it had agreed to buy the assets of Superba for $110 million in cash, with earn-outs potentially adding up to $70 million to the purchase price over the next three years. Superba’s annual sales are estimated to be about $140 million. Its prestigious brand roster includes license for DKNY, Tommy Hilfiger, Nautica, Perry Ellis, Ted Baker, Ike Behar, Michael Kors, JOE Joseph Abboud, Original Penguin, Jones New York and Hart Schaffner Marx. It also has rights to the Arrow name, which is owned by PVH.
Separately, PVH said that it had reached a licensing agreement with Harbor Footwear Group, which will take over the design, sourcing and marketing of PVH’s Bass brand, and its related Weejun and Sunjun labels, for men’s, women’s and children’s footwear. PVH will retain its Bass outlet stores, which sell apparel and accessories as well as footwear. Harbor’s own brands include Brutini, GBX, Impulse and Zengara.
PVH said that the neckwear group’s marketing, sales and design staffs will be based in New York while manufacturing and back office operations will remain in Superba’s offices in Los Angeles.
Emanuel Chirico, CEO of PVH, commented in a statement, “Neckwear is, obviously, complementary to our heritage business in dress shirts, and Superba has followed the same multiple brand, multiple channel and multiple price point strategy that we have followed. We believe that the synergy created by coupling the leading neckwear and dress shirt businesses will provide us with additional opportunity to grow both businesses.”
He added that the “early return” of the Calvin Klein and Izod brands “will provide us with an immediate opportunity to expand our newly acquired neckwear business and enhance the growth we expect to see from it.”
During the first nine months of the current fiscal year, PVH’s earnings available to common shareholders rose more than 80% to $114.3 million while revenues added 5.9% to reach $1.53 billion despite a decline in third-quarter dress shirt business, which had been anticipated.
PVH owns the Calvin Klein, Van Heusen, Izod, Arrow, bass and G.H. Bass brands, markets under a variety of licensed names and bills itself as the largest shirt company in the world.
