NEW YORK (AP) â¿¿ Warnaco Group Inc., the parent company of high-end clothing brands like Calvin Klein and Speedo, announced Monday that it is reviewing its European operations and expects to restructure the businesses there.
The move was spurred "in light of challenging macroeconomic conditions in Europe," Warnaco said. It expects to cut costs with the aim of fueling future profits and growth.
Companies of all stripes are concerned about Europe, where many countries are in recession or teetering near it, unemployment is high and governments are being forced to rein in long-held habits of big spending. Retailers are worried that customers there won't have as much money to spend. Banks are worried about investments there.
Warnaco's European revenue fell 13 percent in the January-March quarter, while overall revenue fell 7 percent. Europe made up about a quarter of the company's total revenue in the first three months of the year.
Helen McCluskey, who became Warnaco CEO in February when her predecessor retired, said in a statement that Calvin Klein jeans and underwear brands "are powerful and continue to resonate with European consumers." But accessories have been less so. Warnaco is giving up the Calvin Klein accessories business in Europe after failing to meet minimum sales requirements in 2010 and 2011 from CKI, the company that licenses the Calvin Klein brand.
Warnaco said it will provide more information when it releases second-quarter results, which will likely be in early August.