PVH Brands Australia, the local licensee for Calvin Klein, Van Heusen and Tommy Hilfiger, is undertaking negotiations with Amazon to potentially bring its products to marketplace at launch. Inside Retail Weekly has learned that PVHAU has flown in one of parent and brand owner PVH Corp’s Amazon experts from the states, Patrick DiLoreto, to spearhead talks with the ecommerce giant’s Aussie executives. DiLoreto, who started last Monday, was formerly the director of merchandising for PVH Corp’
s sportswear brand IZOD, where he was chiefly responsible for the brand’s global retail distribution, including Amazon.
He’s now Down Under with a mandate to extend the longstanding relationship PVH Corp has with Amazon in the US to the imminent launch of Amazon marketplace in Australia.
The move would represent a significant win for Amazon in the first phase of its local operation, with the possible addition of well-known brands like Calvin Klein, Van Heusen, Tommy Hilfiger, Pierre Cardin and Spanx to its platform.
US-based PVH Corp, has been one of Amazon’s highest profile partners in America, helping to cement its position in apparel in what chairman and CEO Emanuel Chirico has previously described as a “very profitable” relationship.
Its Australian operation, a joint venture with ASX-listed retailer/wholesaler Gazal Corporation, already supplies the likes of Myer, David Jones, Country Road and Specialty Fashion Group with a range of men’s and women’s formal, corporate and casualwear.
A deal would be one of the first partnerships in what local analysts expect to be a long line of competitive pressures set to befall established Australian retailers when Amazon launches.
In a 110-page report on the impact of Amazon released recently, UBS analysts predicted that Amazon will capture two per cent of Australian retail sales within five years of entry, growing revenue from $400 million to around $3.5 billion by 2023.
Margins are forecasted to be impacted by up to 200 basis points, constraining the earnings of major retailers such as Myer by up to 20 per cent.
In the US, a pair of Calvin Klein men’s slim fit jeans retail for US$32.30 on Amazon, compared to $69.50 at Macy’s, whereas at Myer, a similar pair retail online for AU$129.95.
Queensland University of Technology business school associate professor Gary Mortimer anticipates that impact will be concentrated on higher volume lines like underwear, but said that department stores will still maintain an experience advantage.
“If you know your size and its small spend, then it’s a quick online purchase,” he said. “But those who want to touch, feel and try on products will continue to engage in that department store experience.”
PVHAU is not the only large company looking to ink a deal with the giant. Inside Retail Weekly has also learned that Victorian based fresh-food wholesaler DandyFresh, which is located across the road to Amazon’s new warehouse in Dandenong, has contacted the giant with the intention of bringing its produce to marketplace.
As revealed in July, Adairs CEO Mark Ronan is also planning an internal review to assess bringing its range of up-market Manchester to marketplace, while Temple & Webster CEO Mark Coulter has said publicly that he’ll “probably” partner with Amazon.
The growing number of retailers indicating their interest in Amazon comes as the giant begins to cement its local plans, announcing last week its longstanding German executive Rocco Braeuniger would be coming on as Australian country manager.
He joins former Appliances Online head of buying Fabio Bertola, who is country leader for marketplace, in charting the trajectory of Amazon’s plans from its first distribution centre in Melbourne’s south-east.
PVHAU was unavailable for comment.