The separately run Calvin Klein Underwear and Calvin Klein Jeans businesses in Australia will be operated under one entity from February under a new deal.
PVH Corp, the owner of the Calvin Klein trademarks worldwide, and Gazal have formed a joint venture, PVH Brands Australia, which will license from Calvin Klein the rights to operate, manage and distribute Calvin Klein brand products in Australia, New Zealand, and other island nations in the South Pacific.
Currently, the principal distribution in the region consists of a wholesale and retail Calvin Klein Underwear distribution business operated by Gazal, and a wholesale and retail Calvin Klein Jeans business operated by two other PVH subsidiaries.
As part of the joint venture Gazal will sell to the joint venture its subsidiary currently operating its Calvin Klein Underwear distribution business in Australia and New Zealand, while PVH will sell to the joint venture its subsidiaries currently operating the Calvin Klein Jeans businesses in Australia and New Zealand.
Gazal will make $6.5 million on the sale of its Calvin Klein Underwear distribution business to the joint venture and expects the new deal to provide positive earnings in the 2015 fiscal year. The license term is 20 years.
Gazal will oversee the day to day operations of the joint venture, which will establish a unified approach to maximise market opportunities across all products and distribution channels.
The joint venture is expected to be finalised on February 3, 2014. It will initially focus on the integration and expansion of the existing underwear and jeanswear businesses before expanding into other product categories.
“This strategic move allows us to directly support the development and expansion of our Calvin Klein brand in Australia and New Zealand,” said Tom Murry, CEO of Calvin Klein.
“With the tremendous expertise of Gazal, which has successfully managed our underwear business for many years, this partnership should ensure the long term potential of the brand in the region,” said Murray.
