Benzinga  Jun 26  Comment 
Bernstein lowered Intel Corporation (NASDAQ: INTC) price target from $54 to $42. Intel shares closed at $50.71 on Monday. Credit Suisse raised the price target for PVH Corp. (NYSE: PVH) from $178 to $185. PVH shares closed at $149.75 on...
Benzinga  Jun 26  Comment 
Goldman Sachs took a bullish stance on three apparel stocks this week, a neutral stance on a luxury outerwear maker and a bearish position on one American clothing company.  The Analyst Goldman Sachs’ Alexandra Walvis initiated the...
Motley Fool  May 31  Comment 
PVH earnings call for the period ending April 30, 2018.
Benzinga  May 31  Comment 
Piper Jaffray lowered the price target for Michael Kors Holdings Limited (NYSE: KORS) from $70 to $66. Michael Kors shares closed at $60.41 on Wednesday. Lake Street cut the price target for Quantum Corporation (NYSE: QTM) from $6 to $4....


Phillips-Van Heusen (NYSE:PVH) is one of the most well known and popular clothing brands, with multiple brands. Brands under PVH include Calvin Klein, Van Heusen, and IZOD, and it has licensing agreements with many others, including Chaps, Sean John, and DKNY. As the bulk of its brands occupy the mid to lower-mid market range, the company sells its products largely in major department stores and some 700 Phillips-Van Heusen operated outlet locations.[1]. Given its heavy dependence on the U.S. market, PVH has recently began to focus on growing its international presence through licensing agreements and new brand acquisitions.

Evidence of its commitment to growing can be seen through its recent decision to acquire Tommy Hilfiger. PVH announced on March 15, 2010 that it would be paying €2.2 billion, or approximately $3.0 billion in total to acquire the brand.[2]

Company Overview

Business Financials

Total revenues for PVH in 2010 (PVH's fiscal year ends on January 31 of each year) were $2.4 billion, a slight decline from its previous year's revenues of $2.5 billion. Prior to this 2010 decline, PVH's revenues had grown at a steady state for the previous five years. However, despite the decrease in revenues, PVH was able to increase its net income in 2010. Net income in 2010 was $162 million, significantly higher than its 2009 net income of $92 million.

Business Segments

Although the company is frequently acquiring new brands and licensing agreements, Phillips-Van Heusen's broad divisions of holdings have been very stable in recent years. Although the company owns or has relationships with dozens of brands at a range of price points, the company's revenue can be broken down into three main sources: retail, wholesale, and licensing.


The company has wholesale contracts with department and specialty stores for several of its strong-selling brands, including IZOD, Calvin Klein, Van Heusen, and Geoffrey Beene. Most of these brands (with a few clear exceptions like the Calvin Klein collection) are mid-range, sold in department stores with moderate price points. Viewed by Phillips-Van Heusen as it's 'core business'[3], its wholesale revenue is heavily dependent upon a small group of major department stores: sales to the company's five biggest customers accounted for over 30% of total revenue.


Viewed as a complement to its wholesale business, the company sells a broad range of apparel and accessories at the 700 retail stores in operates in outlet locations across the United States.


Phillips-Van Heusen has over 100 different licensing agreements with a broad range of brands, from Valentino and Michael Kors Collection to Perry Ellis Portfolio and Jones New York. The company generally receives 4-8% of the sales of the licensed goods as payment.[4] Licensing brands it owns (as it does most noticably with Calvin Klein), or obtaining licenses from other company's gives the business a way to diversify it's holdings with much less effort than starting or acquiring a new label. However, companies can frequently run into trouble with too much licensing of their luxury brands, thereby oversaturating the market and hurting the label's cachet. This is a problem that Phillips-Van Heusen has as of yet avoided successfully with its Calvin Klein label. Although it has several licenses for Calvin Klein fragrances, intimate apparel, and accessories, thus far the company has kept a watchful eye on product development and design so as not to dilute its high-end collection label.

Trends and Forces

Dependency on Department Stores

Department stores in the United States have undergone significant changes in recent years. In response to declining margins, stores have implemented tighter inventory controls and have scaled back the quantities of merchandise that they purchase from wholesalers. As a company that describes wholesales as its 'core business', Phillips-Van Heusen appears especially vulnerable to such changes. Phillips-Van Heusen also has private label relationships with both Wal-Mart and Macy's, which puts the company in direct competition with some of its biggest clients. Such companies have a strong incentive to prefer their own private labels wherever possible because they can be sold at higher margins than outside brands.

Volatility of Fashion Trends

As fashion trends fluctuate in unpredictable ways, apparel companies must be careful to not fall behind from season to season. While Phillips-Van Heusen's high-end Calvin Klein collection has done well in recent years, there is always a risk that the brand will lose popularity, particularly in light of the many licensing agreements that could potentially dilute the label's prestige.

However, Phillips-Van Heusen appears to be better situated that some competitors in that several of the company's large core brands are comprised of basic wardrobe staples (e.g. IZOD polos, Van Heusen dress shirts) that are not particularly vulnerable to the swings in the high-end fashion world. In addition, the company's strong outlet presence allows it to market and sell excess inventory well.


Phillips-Van Heusen faces competition from a variety of sources. It's mid-range Van Heusen and IZOD brands compete with labels like Lacoste, Kenneth Cole, and Brooks Brothers. After the company acquired the Calvin Klein brand, it entered the highly competitive designer label market, gaining competitors like Gucci, Prada, and Georgio Armani.

In addition, some of the company's biggest competitors are brands with which it has licensing agreements. For example, while the company has a licensing agreement for Nautica neckties, Nautica polo and dress shirts compete directly with the IZOD brand in mid-range department stores nationwide.

Market Share

Phillips-Van Heusen is also one of the biggest sellers of dress shirts in the world: In 2001, the company had over a two-thirds market share of all dress shirts sold in the U.S.[5], and the company's Van Heusen dress shirt brand had a 60% market share of department store sales in 2006[6].


  1. Yahoo Finance! Phillips-Van Heusen Business Summary
  2. PVH 10-K 2009 Item 1 Pg. 2
  3. Phillips Van-Heusen's 2006 10-K, p. 2(filed April 5, 2007)
  4. Phillips Van-Heusen's 2006 10-K, p. 12(filed April 5, 2007)
  5. Wall Street Transcript interview with former CEO Bruce J. Klatsy, published April 23, 2001
  6. Phillips-Van Heusen 2006 Annual Report
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