PVH will buy rival Warnaco Group for about $2.8bn (£1.7bn) in a deal that will give the company more control of the Calvin Klein clothing brand and boost profits immediately, sending PVH shares up as much as 23 per cent.
PVH bought Calvin Klein in 2003 and makes formal and sportswear under that brand, while Warnaco has held the licensing agreements for Calvin Klein jeans and underwear since 1997.
“Having direct global control of the two largest apparel categories for Calvin Klein – jeans and underwear – will allow us to unlock additional growth potential of this powerful designer brand,” PVH chief executive Emanuel Chirico said.
The parties expect the deal to close in early 2013, after which former Warnaco stockholders will own about 10 per cent of PVH stock. PVH will also have access to Warnaco heritage brands like Chap, Warner’s and Olga.
City A.M. Reporter