In mid-December 2002, Calvin Klein Inc. (CKI) was finally sold to shirt maker Phillips Van Heusen Corp. Tracie Rozhon, Calvin Klein Selling His Company To Biggest Shirtmaker in the U.S., New York Times, 18 December 2002, whose then CEO Bruce Klatsky was the driving force behind the deal, for about $400 million in cash, $30 million in stock as well as licensing rights and royalties linked to revenues over the following 15 years that were estimated at $200 to $300 million. The sale also included an ongoing personal financial incentive for Mr. Klein based on future sales of the Calvin Klein brand.
PVH outcompeted VF Corp., the maker of Lee and Wrangler jeans, which had also been interested in the jeans, underwear and swimwear business of CK that had been controlled by Warnaco Group, maker of Speedo swimwear, since 1997. The deal with PVH did not include these businesses, and they remained with Warnaco. Unable to pay debts from acquisitions and licensing agreements and due to bad publicity by a later dismissed lawsuit with Calvin Klein over selling license products to retailers other than agreed upon with Calvin Klein, Warnaco had filed for chapter 11 protection in mid-2001 but eventually emerged from bankruptcy in February 2003. Mr. Klein himself had considered Linda Wachner, then CEO of Warnaco Group, a personal enemy.
In reaction to the announcement of the deal, Phillips-Van Heusen shares closed down 14 cents at $12.54 on the New York Stock Exchange on December 17, 2002. The industry feared that PVH had taken on too much with the acquisition. It is said that talks between Calvin Klein and PVH had begun as early as 2000.
The transaction between Calvin Klein and PVH was financially supported by Apax Partners Inc., a New York private equity firm, which is said to have made a $250 million equity investment in PVH convertible preferred stock, as well as a $125 million, two-year secured note, all in exchange for seats on the board of PVH.
CKI thus became a wholly owned subsidiary of PVH. In the beginning, Mr. Klein himself, who was included as a person in the 15-year contract he had signed with PVH, remained creative head of the collections but then continued as an advisor (consulting creative director) to the new company from 2003 on and has since been more withdrawn from the business. Mr. Klein has appeared in the news from time to time since then when his name was associated with drug abuse, withdrawal treatments and public nuisance. Barry K. Schwartz was said to concentrate on his role as chairman of the New York Racing Association, a horse-racing club. The current President and COO of the CKI division within PVH is Tom Murry, who had filled this position already before the acquisition.
With the fall 2006 Collection runway presentations in New York City, CKI inaugurated an 8,600 sq ft (800 m²) show room space that can seat up to 600 people on the ground floor of 205 West 39th Street, in Times Square South where Calvin Klein has been headquartered since 1978. Their current office space in the building is about 143,000 sq ft (13,300 m²) with lease costs probably figuring at around $30 per sq in that area.
PVH outcompeted VF Corp., the maker of Lee and Wrangler jeans, which had also been interested in the jeans, underwear and swimwear business of CK that had been controlled by Warnaco Group, maker of Speedo swimwear, since 1997. The deal with PVH did not include these businesses, and they remained with Warnaco. Unable to pay debts from acquisitions and licensing agreements and due to bad publicity by a later dismissed lawsuit with Calvin Klein over selling license products to retailers other than agreed upon with Calvin Klein, Warnaco had filed for chapter 11 protection in mid-2001 but eventually emerged from bankruptcy in February 2003. Mr. Klein himself had considered Linda Wachner, then CEO of Warnaco Group, a personal enemy.
In reaction to the announcement of the deal, Phillips-Van Heusen shares closed down 14 cents at $12.54 on the New York Stock Exchange on December 17, 2002. The industry feared that PVH had taken on too much with the acquisition. It is said that talks between Calvin Klein and PVH had begun as early as 2000.
The transaction between Calvin Klein and PVH was financially supported by Apax Partners Inc., a New York private equity firm, which is said to have made a $250 million equity investment in PVH convertible preferred stock, as well as a $125 million, two-year secured note, all in exchange for seats on the board of PVH.
CKI thus became a wholly owned subsidiary of PVH. In the beginning, Mr. Klein himself, who was included as a person in the 15-year contract he had signed with PVH, remained creative head of the collections but then continued as an advisor (consulting creative director) to the new company from 2003 on and has since been more withdrawn from the business. Mr. Klein has appeared in the news from time to time since then when his name was associated with drug abuse, withdrawal treatments and public nuisance. Barry K. Schwartz was said to concentrate on his role as chairman of the New York Racing Association, a horse-racing club. The current President and COO of the CKI division within PVH is Tom Murry, who had filled this position already before the acquisition.
With the fall 2006 Collection runway presentations in New York City, CKI inaugurated an 8,600 sq ft (800 m²) show room space that can seat up to 600 people on the ground floor of 205 West 39th Street, in Times Square South where Calvin Klein has been headquartered since 1978. Their current office space in the building is about 143,000 sq ft (13,300 m²) with lease costs probably figuring at around $30 per sq in that area.
