PVH Corp. [NYSE:PVH], the owner of the Calvin Klein trademarks worldwide, and Gazal Corporation Limited [ASX:GZL], listed on the Australian Securities Exchange, announced today that they have formed a joint venture, PVH Brands Australia Pty. Limited, which will license from Calvin Klein, Inc., a wholly owned subsidiary of PVH, the rights to operate, manage and distribute Calvin Klein brand products in Australia, New Zealand and other island nations in the South Pacific. The license term is 20 years.
Currently, the principal distribution in the region consists of a wholesale and retail Calvin Klein Underwear distribution business operated by Gazal, with product supplied through a wholly owned subsidiary of PVH, and a wholesale and retail Calvin Klein Jeans business operated by two other PVH subsidiaries. The joint venture will combine these businesses and establish a unified approach for enhancing and expanding the distribution of the Calvin Klein brand in the region. The combination of Calvin Klein, Inc.’s brand vision and Gazal’s expertise in the region is intended to maximize the market opportunities across all products and distribution channels.
As part of the joint venture:
- Gazal will sell to the joint venture its subsidiary currently operating its Calvin Klein Underwear distribution business in Australia and New Zealand.
- PVH will sell to the joint venture its subsidiaries currently operating the Calvin Klein Jeans businesses in Australia and New Zealand.
The joint venture is currently scheduled to begin its wholesale and retail operations on February 3, 2014. The joint venture will focus initially on the integration, expansion and enhancement of the existing underwear and jeanswear businesses and will subsequently extend into additional product categories.“This strategic move allows us to directly support the development and expansion of our Calvin Klein brand in Australia and New Zealand,” said Tom Murry, CEO of Calvin Klein. “With the tremendous expertise of Gazal, which has successfully managed our underwear business for many years, this partnership should ensure the long-term potential of the brand in the region.” Gazal markets and manages national and international apparel brands in Australia and New Zealand, including a portfolio of local Australian and iconic global brands, including Van Heusen, the menswear brand that Gazal has operated for over 30 years under license from PVH. Gazal’s extensive multi-channel distribution network includes wholesale, company-operated retail and e-commerce channels. Gazal’s performance in the market confirms its position as a key player in the Australian wholesale and retail apparel sector. Drawing on this experience, Gazal will oversee the day-to-day operations of the joint venture. “ Calvin Klein is a global megabrand and we are excited to commence this joint venture. We have a long and successful relationship with PVH and are delighted to be expanding our relationship with such a powerhouse apparel brand. We look forward to growing the Calvin Klein business in the region,” said Michael Gazal, Executive Chairman of Gazal. Gazal will realize a one-time profit of A$6.5 million on the sale of its Calvin Klein Underwear distribution business to the joint venture. Gazal expects the joint venture to be earnings-neutral in its current 2014 fiscal year, with the expectation for positive earnings contribution in its 2015 fiscal year.