Steve Shiffman, chief executive officer of Calvin Klein, Inc., a unit of PVH Corp. unveiled a series of strategic changes to the company on Thursday in response to what he said was a rapidly evolving fashion and retail landscape.
The news came shortly after the company let its chief creative director go and said its jeans and high-end collection had been disappointing.
The brand’s current strategy includes three key initiatives. The business will be streamlining its North America division to become a more effective organization, including consolidation of operations for the men’s Calvin Klein Sportswear and Calvin Klein Jeans businesses to strengthen the brand’s positioning. The Calvin Klein retail and e-commerce teams will be integrated to create an omnichannel approach mirroring how consumers browse, shop and purchase today.
The third initiative will be a relaunch of the Calvin Klein 205W39NYC business under a new name, design approach and creative direction. The new business will focus on connecting directly to all of the other Calvin Klein brands and amplifying each category with special products and aspirational experiences. The relaunched business will be designed to evolve the traditional luxury fashion model by connecting with a diverse range of communities, offering an unexpected mix of influences and moving at an accelerated pace.
As a result of Calvin Klein Inc.’s ongoing assessment of its omnichannel strategy, the 654 Madison Avenue store in Manhattan will be closing this spring. The company is evaluating options for future retail locations and will also be unveiling new consumer experiences both online and offline.
“Calvin Klein has long been driven by its ability to balance art and commerce in a culturally relevant way–one that has often defied the status quo,” Shiffman said. “Our industry is witnessing a historic transformation in consumer behavior which presents a significant growth opportunity as we look to grow the brand to $12 billion in global retail sales over the next few years. Now more than ever, we must double down on meeting consumer demands by creating culturally relevant products and experiences that engage communities by pushing fashion and culture forward.”
In addition, the Calvin Klein Inc. leadership team has adopted a digital-first approach and introduced a newly formed “Consumer Marketing Organization (CMO).” The CMO is evolving to accommodate the rapidly changing demands of today’s consumers, with highly specialized teams focused on new areas including Consumer Engagement and Shopper Experience.
“These strategic initiatives will enable us to run a more modern, dynamic and effective business, as well as allow us to reinvest in the brand,” Shiffman said.
Last month, the Calvin Klein business cut ties with Raf Simons, the award-winning Belgian designer and the brand’s first chief creative officer, and cancelled its runway show during the upcoming New York Fashion Week.
Simons’ departure came eight months before the end of his two-year contract with the iconic American denim brand and just weeks after PVH missed its sales projections for the third quarter. It also came after PVH Corp. said it was “disappointed” in the Calvin Klein 205 W39 NYC business and poor sell-through on the Calvin Klein Jeans relaunch in December.
In conjunction, PVH said it expects to incur pre-tax costs of approximately $120 million over the next 12 months in connection with the Calvin Klein restructuring, primarily consisting of severance, inventory markdowns and allowances, asset impairments, and lease and other contract termination expenses. This includes costs from the closure of its flagship store.