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PVH to Sell 4 Brands, Including Izod, for $220 Million

PVH agrees to sell four prominent brands - Izod, Van Heusen, Arrow and Geoffrey Beene - for $220 million and the company affirms its financial outlook.
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The New York fashion company PVH  (PVH) - Get Report said on Wednesday that it agreed to sell four prominent clothing brands - Izod, Van Heusen, Arrow and Geoffrey Beene - for $220 million to Authentic Brands Group.

The move enables PVH to focus on its Calvin Klein and Tommy Hilfiger brands, the company said. 

PVH said it would use the proceeds from the deal to buy back stock. It also said it would reinstate its dividend.

PVH also affirmed its earnings estimates for the second quarter.

PVH shares were trading 3.3% higher at $108.23 on Wednesday.

"This was a difficult decision," PVH Chief Executive Stefan Larsson said in a statement. The four brands, which make up the Heritage Brands division of PVH, "provided the resources that laid the foundation" of PVH, he said.

The company has been focusing more resources on businesses with wider profit margins, he said.

PVH, which traces its history back to 1881, also owns the Warner's brand of women's intimate apparel.

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Authentic Brands is the closely held New York manager of brands in apparel, sports, media and entertainment.

Jamie Salter, Authentic Brands' chairman and CEO, said that each of the brands in the deal "has strong consumer recognition, global distribution anchored at leading retailers, and robust product programs with best-in-class licensing partners."

Authentic Brands licensed to PVH operation of all four brands' dress furnishings businesses in North America.

The companies expect to close the deal in PVH's fiscal third quarter, subject to conditions including regulatory clearance.

PVH Swings to First-Quarter Profit as Recovery Accelerates

As for PVH's financial update, the company reiterated that for its second quarter it expected to earn 79 cents to 82 cents a share on a GAAP basis, or an adjusted $1.15 to $1.18 a share.

The company affirmed that it expected revenue for the second quarter to rise 34% to 36% from a year earlier.

A survey of analysts polled by FactSet produced consensus estimates for the quarter of GAAP earnings of $1.20 a share, or an adjusted $1.19, on revenue of $2.14 billion.