PVH Corp. will close its Izod retail division, with the closing expected to be completed by the end of fiscal 2015. The closure of the retail business is not expected to impact the Company’s growing Izod wholesale business.
“The conversion of several of the best Izod locations into Calvin Klein and Tommy Hilfiger stores under some of our newer concepts should result in significantly higher sales per square foot and higher operating margins in these stores, which should have a positive impact for the Company in fiscal 2016.”
The Izod retail division currently operates approximately 120 stores. Approximately 20 stores will be converted to store formats under Calvin Klein and Tommy Hilfiger nameplates, with the remaining stores to be closed. The company expects to record pre-tax charges in connection with the closure of approximately $40 million, half of which is expected to be non-cash. The charges relate principally to asset impairments, severance, inventory markdowns and lease exit costs.
Emanuel Chirico, Chairman and Chief Executive Officer of PVH Corp., said, “We have made the difficult decision to exit the Izod retail business, as it has become clear that its business model can no longer achieve acceptable return metrics as a result of the increasingly competitive environment driven by more premium brands in the outlet retail channel. The closing of our Izod retail division has no bearing on our Izod wholesale business strategy, which has shown great growth with our most recent launch at Kohl’s for the Fall 2014 season.”
Chirico continued, “The conversion of several of the best IZOD locations into Calvin Klein and Tommy Hilfiger stores under some of our newer concepts should result in significantly higher sales per square foot and higher operating margins in these stores, which should have a positive impact for the company in fiscal 2016.”
