Calvin Klein

Calvin Klein Incorporated
Subsidiary
Industry Apparel, perfume, Fashion
Founded 1968
Founder Calvin Klein
Headquarters New York City, United States
Number of employees
 1001-5000 (2015)
Parent PVH
Website CalvinKlein.com

Calvin Klein Inc. is an American fashion house founded by the fashion designer Calvin Klein.[1] The company is headquartered in Midtown Manhattan, New York City[2] and is currently owned by PVH.[3][4]

History

A Calvin Klein store in Fairview Mall

The early years

In 1968, Klein founded Calvin Klein Limited, a coat shop in the York Hotel in New York City, with $10,000.[5][6] The first Calvin Klein collection was a line of "youthful, understated coats and dresses" featured at the New York City store, Bonwit Teller.[5]

In September 1969, Klein appeared on the cover of Vogue magazine.[7]

1970s

By 1971, Klein had added sportswear, classic blazers, and lingerie to his women's collection.

In 1973, he received his first Coty American Fashion Critics' Award for his 74-piece womenswear collection - the youngest recipient at that time.[7] Klein won the award again in 1974 and 1975.[7] By 1977, annual revenues had increased to $30 million (equivalent to $117 million in 2016), and Klein had licenses for scarves, shoes, belts, furs, sunglasses, and sheets. Klein and Schwartz were making $4 million each. After the company signed licenses for cosmetics, jeans, and menswear, Klein's annual retail volume was estimated at $100 million (equivalent to $390 million in 2016). In 1978, Klein claimed sales of 200,000 pairs of his famous jeans the first week they were on the market. By 1981, Fortune figured Klein's annual income at $8.5 million a year. In the mid-1970s, he had created a designer-jeans craze by putting his name on the back pocket. Klein's design assistant at the time, Jeffrey Banks, has claimed credit for the logo garments, stating that he had the logo from a press folder silkscreened onto the sleeve of a brown T-shirt as a present for Klein.[8] The gift was assumed by Schwartz to be part of the upcoming line, and similar logo shirts formed the uniform for the front-of-house staff at Klein's next catwalk show, leading to buyer demand.[8]

In the late 1970s, the company also made attempts to set up its own fragrance and cosmetics lines, but soon withdrew from the market with big financial losses. In the 1980s, as the designer-jeans frenzy reached its all-time high, Calvin Klein introduced a highly successful line of boxer shorts for women and a men's underwear collection which would later gross $70 million in a single year. Calvin Klein's underwear business, promoted later in the 1990s with giant billboards showing images of pop singer Mark "Marky Mark" Wahlberg, became so successful that his underpants became generally known as "Calvins".

1980s–1985: Underwear

In the early 1980s, Klein changed the American market of men's underwear—one where most men's underwear was white, purchased in packs of three by a "wife, mother or girlfriend when they needed to be" to one where "the American male to care about the brand of something few ever see".[9]

The stunning growth continued through the early eighties. The licensing program, which brought in $24,000 when it was initiated in 1974 (equivalent to $115,158 in 2016), had royalty income of $7.3 million ten years later (equivalent to $16.63 million in 2016). That year, worldwide retail sales were estimated at more than $600 million (equivalent to $1366.62 million in 2016). Klein's clothes were sold through 12,000 stores in the United States and were available in six other countries through licensing deals, namely Canada, the United Kingdom, Ireland, Australia, New Zealand, and Japan. His annual income passed $12 million (equivalent to $27.33 million in 2016).

Financial problems, increased pressure from all sides, disagreements with the licensee of the menswear line and its disappointing sales as well as an enormous employee turnover both within Calvin Klein and its licensing partners led to the first rumors that Calvin Klein Industries, as the company had been known by then, was up for sale. And indeed, in late 1987, it was said that the sale of the company to Triangle Industries, a container manufacturer, had only failed because of the crashing stock market.

Although the company almost faced bankruptcy in 1992, Calvin Klein managed to regain and increase the profitability of his empire throughout the later 1990s, mainly through the success of its highly popular underwear and fragrance lines, as well as the ck sportswear line. During his 1990-1995 stint as Calvin Klein's head of menswear design, John Varvatos pioneered a type of men's underwear called boxer briefs, a hybrid of boxer shorts and briefs.[10] Made famous by a series of 1992 print ads featuring Mark "Marky Mark" Wahlberg,[10][11] they have been called "one of the greatest apparel revolutions of the century."[10] Klein was named "America's Best Designer" for his minimalist all-American designs in 1993, and it came as a surprise in 1999 when it was announced that CKI was again up for sale. Planning to expand its business, the company had been approached by two luxury goods companies, LVMH and Pinault Printemps Redoute, to join Calvin Klein, but nothing resulted. Other potentials like Tommy Hilfiger Corp. and Italy's Holding di Partecipazioni proved to be similar disappointments because of CKI's steep price tag of supposedly $1 billion. After seven months and no potential buyer, Klein announced that his empire was not on the market anymore. The company would never manage to go public, which had supposedly been Klein's plan once.

2002–present: Acquisition by Phillips van Heusen

In mid-December 2002, Calvin Klein Inc. (CKI) was sold to Phillips Van Heusen Corp (PVH),[12] 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.[13] The sale also included an ongoing personal financial incentive for Klein based on future sales of the Calvin Klein brand.

PVH outbid 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 in the US, 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.[14]

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.[15]

CKI thus became a wholly owned subsidiary of PVH. In the beginning, 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. 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.

In a 2010 report, PVH, who manages the ready-to-wear activities, had estimated sales of €4.6 billion of Calvin Klein products.[3]

In Feb 2013 Warnaco Group was acquired by PVH which united Calvin Klein formal, underwear, jeans and sportswear lines.[16][17]

Products and marketing

Product & brand history

The most visible brand names in the Calvin Klein portfolio include:

For details, see Current brands and licenses.

Fragrances

Calvin Klein has various lines of perfumes and colognes, including Obsession and Eternity. Until May 2005, their perfumes and the corresponding fragrance lines were maintained by Calvin Klein Cosmetics Company (CKCC), a Unilever company. Cosmetics giant Coty, Inc. of New York bought the fragrance licensing agreements from Unilever.

Advertising

Calvin Klein models

The early ads were shot by Bruce Weber and Richard Avedon. One of his male underwear models, Mark Wahlberg, went on to fame as hip hop star "Marky Mark", launching himself into the Hollywood scene to become a current actor. Another Hollywood star first appearing in Calvin Klein advertisements is Antonio Sabato Jr.. Calvin Klein employed Kate Moss at the start of her career in the early 1990s and in 2002 after allegations of cocaine use. Other models who have appeared in advertisements early in their careers are Natalia Vodianova, Scott King and Toni Garrn. Currently Calvin Klein uses Tyson Ballou and Lara Stone, and in the past has also used Christy Turlington, Jerry Hall, Patti Hansen, Tom Hintnaus, David Agbodji, Travis Fimmel, Doutzen Kroes, Mini Anden, Garrett Neff, Sean O'Pry, Edita Vilkeviciute, Jamie Dornan, Liu Wen, Edward Furlong and Vladimir Ivanov. Fit Models include Dale Noelle.[21] Actors such as Eva Mendes, Mehcad Brooks, Scarlett Johansson, Kellan Lutz, Andie MacDowell, Alexander Skarsgard, Zoe Saldana, Rita Ora, Rooney Mara and Diane Kruger have also been chosen to model for the brand. Swedish footballer Freddie Ljungberg starred in a series of adverts for the company.[22] Recently, singer Justin Bieber shot for a campaign for Calvin Klein's underwear range.[23]

They also have experimented with emerging technologies. When advertising cKone perfume in 1999, they placed e-mail addresses in print advertisements, targeted at teenagers. When these teens mailed these addresses, they would be placed on a mailing list that sent them mails with vague details about the models' lives, with fake details meant to make them more relatable. These mails came at unpredictable intervals, and were supposed to give readers the feeling that they had some connection with these characters. Though the mailing lists were discontinued in 2002, the campaign has inspired similar marketing tactics for movies and other retail products.

Branding

Like other fashion brands, Calvin Klein established a monogram: the "cK" emblem.[24]

Licensees

As of 2012, the top three licensees were:

Internet

In 2004, the company bought the domain name CK.com. Calvin Klein is one of the few corporations worldwide to own a two letter domain name.

Designers

The current creative director for Calvin Klein Collection for women is Brazilian-born Francisco Costa who had already worked with Klein directly before the founder's departure from the company. Costa had taken over the job in 2003.[25]

Italo Zucchelli, a former Jil Sander and Romeo Gigli designer, had collaborated with Calvin Klein for six seasons before he became head designer of the Calvin Klein Collection menswear line in spring 2004.

Kevin Carrigan, an Englishman, is the creative director of the ck Calvin Klein and Calvin Klein (white label) brands and their related licensed products. Carrigan has been with Calvin Klein since 1998.

Corporate

Stores

In the late 1990s the company opened elegant Calvin Klein Collection stores in Paris, Seoul, and Taipei and ultra high-end cK Calvin Klein stores in Hong Kong, Milan and Kuwait City. As of today, there is only one Calvin Klein Collection store operated by CKI. It is located in New York City. Out of the two Calvin Klein Collection stores that existed in the US, the Dallas location in Highland Park Village which had been open for 20 years was closed in mid-2005. The only international location, in Paris, was closed by PVH in March 2006. The New York store, which serves as the company's flagship store at 654 Madison Ave., remains open still today. Partners maintain Calvin Klein Collection stores in Hong Kong, Shanghai, Mumbai, Seoul, Singapore, Kuala Lumpur, Bangkok, Dubai and Qatar.

Specialty retail Calvin Klein stores, designed by New York architecture firm Lynch/Eisinger/Design have been opened at Lenox Square in Atlanta, Beverly Center in Los Angeles; now closed down, Cherry Creek Mall in Denver; now closed down, Natick Collection in Natick, MA; closing down on July 25, 2010, The Mall at Partridge Creek in Michigan; now closed down, Aventura Mall in Aventura, Florida, South Coast Plaza in Costa Mesa California. An additional eight stores also designed by Lynch/Eisinger/Design are set to open in 2008. There are also several Calvin Klein Outlet stores, mostly located within factory outlet malls in the US, that sell the white label sportswear and sometimes the Calvin Klein white label at reduced prices but do not carry the Collection lines. It has been reported that Calvin Klein will close all White Label locations within the next year.

Calvin Klein Jeans stores exist around the globe. Among many other countries in the UK, Germany, Greece, Russia, Brazil, México, Croatia, Egypt, Chile, Argentina, India, the Philippines, Australia and New Zealand. They also offer franchisee and opened in Cali last year.

Signature Calvin Klein Underwear boutiques can be found in Buenos Aires, Cardiff (as of April 2011), Mexico City, Edinburgh, Glasgow, Melbourne, Hong Kong, London, Manchester, Manila, New York City, Shanghai, Singapore, Frankfurt am Main, Munich, Toronto and Hatfield, Metropolis at Metrotown in Burnaby, B.C. (Metro Vancouver).

The major department stores in the US, including Macy's, Lord & Taylor and Nordstrom, as well as many small independent stores carry the ck, white label and/or Jeans collections. Some high-end department stores, such as Bergdorf Goodman, Saks Fifth Avenue and Neiman Marcus also carry the Calvin Klein Collection. Notable retailers in the UK offering Calvin Klein include stores such as John Lewis, Debenhams and KJ Beckett. In Australia the dominant retailer is Myer. Calvin Klein products are also found online with particular internet focus on selling Calvin Klein underwear and fragrance.

In Europe, Calvin Klein is predominantly known for its underwear, accessories and perhaps the Collection business, rather than for the medium-priced sportswear lines which are available at select high-end retail stores. In Asia, there are also signature ck Calvin Klein stores that carry diffusion line, aka grey label including womenswear, menswear, accessories.

Controversies

In 1980, Richard Avedon photographed and directed the Calvin Klein Jeans campaign that featured a fifteen-year-old Brooke Shields. Some of those television commercials were banned, including the infamous ad where Brooke asks "Do you want to know what comes between me and my Calvins? Nothing!"

The 1995 adverts promoting Calvin Klein jeans received criticism for being "kiddie porn".[26][27][28][29]

In August 2012, Lululemon Athletica filed suit against Calvin Klein and supplier G-III Apparel Group for infringement of three Lululemon design patents for yoga pants.[30] The lawsuit was somewhat unusual as it involved a designer seeking to assert Intellectual Property protection in clothing through patent rights. On November 20, 2012, Lululemon filed a notice of voluntary dismissal in the Delaware courts based upon a private settlement agreement reached between the parties that would dismiss the suit.[31] According to a Lululemon press release, "Lululemon values its products and related IP rights and takes the necessary steps to protect its assets when we see attempts to mirror our products.”[32]

However, according to Chevalier's brand book Luxury Brand Management, Klein "is seldom involved in the design and the development of products bearing his name"[3] and "all activities are subcontracted to licensees."[3]

In 2014, Klein was criticized for the designation of Myla Dalbesio in its "Perfectly Fit" advertising campaign as a "plus-size" model, despite not using the term itself.[33]

See also

References

  1. ↑ Lisa Marsh (August 18, 2003). The House of Klein: Fashion, Controversy, and a Business Obsession. John Wiley & Sons. p. 1. ISBN 978-0-471-45563-9. Retrieved October 27, 2012.
  2. ↑ "Calvin Klein unaccessorizes its desk jockeys". The Toronto Star. August 12, 2004.
  3. 1 2 3 4 5 6 7 8 9 10 Chevalier, Michel (2012). Luxury Brand Management. Singapore: John Wiley & Sons. ISBN 978-1-118-17176-9.
  4. ↑ Goodison, Donna (February 16, 2012). "Tie maker looks to score with Orr designs". The Boston Herald.
  5. 1 2 Grant, Linda (February 23, 1992). "Can Calvin Klein Escape? : He Built an Empire on Raunch and Elegance. Then, Overpriced Jeans and Junk-Bond Debt Pushed It to the Edge. But Look Out, Here Comes His Spring Collection.". Los Angeles Times. Retrieved 12 September 2012.
  6. ↑ MobileReference (January 1, 2007). 100 Most Influential Jews of All Times (Mobi History). MobileReference. pp. 77–. ISBN 978-1-60501-125-7. Retrieved November 24, 2012.
  7. 1 2 3 Valerie Steele (November 15, 2010). The Berg Companion to Fashion. Berg. pp. 463–65. ISBN 978-1-84788-563-0. Retrieved November 24, 2012.
  8. 1 2 Manlow, Veronica (2009). Designing clothes : culture and organization of the fashion industry (1st pbk. ed.). New Brunswick, [N.J.]: Transaction Pub. p. 99. ISBN 9781412810555.
  9. ↑ Lisa Marsh (May 4, 2004). The House of Klein: Fashion, Controversy, and a Business Obsession. John Wiley & Sons. pp. 47–52. ISBN 978-0-471-47895-9. Retrieved October 27, 2012.
  10. 1 2 3 Gell, Aaron (September 1, 2010). "Rock Steady". Hemispheres. Retrieved June 29, 2014.
  11. ↑ Wilson, Eric (May 12, 2010). "Stretching a Six-Pack". The New York Times. Retrieved June 29, 2014.
  12. ↑ Rozhon, Tracie (December 18, 2002). "Calvin Klein Selling His Company To Biggest Shirtmaker in the U.S.". New York Times. Retrieved January 13, 2009.
  13. ↑ Marsh, Lisa (December 18, 2002). "Phillips-Van Heusen Snags Calvin for $400M in Cash". New York Post. Retrieved 12 September 2012.
  14. ↑ "Warnaco Group Emerges from Bankruptcy". New York Times. February 5, 2003. Retrieved September 12, 2012.
  15. ↑ "Phillips-Van Heusen buttons up purchase of Calvin Klein". Agence France Presse. December 17, 2002.
  16. 1 2 3 4 "PVH unites Calvin Klein lines in $2.8 billion deal". Reuters.com (Thomson Reuters). Retrieved 31 October 2012.
  17. ↑ http://www.pvh.com/
  18. 1 2 3 "WARNACO GROUP INC /DE/ CIK#: 0000801351". United States Securities and Exchange Commission. Retrieved August 24, 2010.
  19. ↑ Ella, Alexander (September 27, 2012). "Ck One Lifestyle". Vogue. Retrieved 12 September 2012.
  20. ↑ "Calvin Klein fragrances". Household & Personal Products Industry. September 1, 2011.
  21. ↑ Kimberly Kinrade, Good Reads: What is a Fit Model?
  22. ↑ "Between Them and Their Calvins". New York Times. May 13, 2010. Retrieved September 12, 2012.
  23. ↑ "Justin Bieber bags Calvin Klein endorsement deal". news.biharprabha.com. IANS. 25 July 2014. Retrieved 27 July 2014.
  24. ↑ Johnson, Marylin (September 7, 2003). "Monograms: Initially Rated". The Atlanta Journal-Constitution.
  25. ↑ Rubin, Sylvia (May 12, 2011). "Calvin Klein successor Francisco Costa". The San Francisco Chronicle.
  26. ↑ New York Media, LLC (September 18, 1995). New York Magazine. New York Media, LLC. pp. 46–. ISSN 0028-7369. Retrieved October 27, 2012.
  27. ↑ Catherine Grant; Lori Waxman (May 15, 2011). Girls! Girls! Girls! In Contemporary Art. Intellect Books. pp. 25–. ISBN 978-1-84150-348-6. Retrieved October 27, 2012.
  28. ↑ Paul Rutherford (July 30, 2007). A World Made Sexy: Freud to Madonna. University of Toronto Press. pp. 204–. ISBN 978-0-8020-9466-7. Retrieved October 27, 2012.
  29. ↑ John Corvino (1999). Same Sex: Debating the Ethics, Science, and Culture of Homosexuality. Rowman & Littlefield. pp. 339–. ISBN 978-0-8476-8483-0. Retrieved October 27, 2012.
  30. ↑ Weller, Susan Neuberger (September 21, 2012). "S. 3523: Louboutin, Lululemon, and Fashion Design: Finally Getting Some Respect?". The National Law Review. Retrieved January 15, 2013.
  31. ↑ Weller, Susan Neuberger; Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (November 27, 2012). "Lululemon and Calvin Klein Settle Yoga Pants Design Litigation". The National Law Review. Retrieved January 14, 2013.
  32. ↑ "lululemon athletica canada inc., calvin klein, inc. and g-iii apparel group, ltd. reached a settlement agreement in design patent litigation". November 20, 2012.
  33. ↑ Swash, Rosie (2014-11-10). "Calvin Klein ads featuring 'plus size' model Myla Dalbesio ignite online debate". The Guardian. Retrieved 2015-01-24.

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