PVH Corp., one of the world’s largest apparel companies, announced Wednesday that it will close its IZOD retail division by the end of the fiscal 2015. The retail business closure is not expected to impact the company’s expanding IZOD wholesale business.
PVH expects to record pre-tax charges in connection with the closure of an estimated $40 million, half of which will be non-cash. The charges relate to asset impairments, severance, inventory markdowns and lease exit costs.
Emanuel Chirico, chairman and CEO of PVH, said, “We have made the difficult decision to exit the IZOD retail business, as it has become clear that its business model can no longer achieve acceptable return metrics as a result of the increasingly competitive environment driven by more premium brands in the outlet retail channel. The closing of our IZOD retail division has no bearing on our IZOD wholesale business strategy, which has shown great growth with our most recent launch at Kohl’s for the fall 2014 season.”
He concluded, “The conversion of several of the best IZOD locations into Calvin Klein and Tommy Hilfiger stores under some of our newer concepts should result in significantly higher sales per square foot and higher operating margins in these stores, which should have a positive impact for the Company in fiscal 2016.”