PVH Sells 4 Heritage Brands to Authentic Brands Group for $220M
PVH Corp entered a definitive agreement to sell its Heritage brands ARROW, Geoffrey Beene, IZOD, and Van Heusen to focus on global growth brands Calvin Klein and TOMMY HILFIGER. The company will sell the four Heritage brands to Authentic Brands Group (ABG) for $220 million in cash. The transaction is expected to close in Q3 2021, following regulatory approvals. While PVH is narrowing its brand portfolio, opting to invest in growing sustainable profits for the Calvin Klein and TOMMY HILFIGER brands, ABG is taking the opposite approach, continuing its acquisition spree. The business has acquired Eddie Bauer and Forever 21 in the last year-plus, and is now growing its portfolio with the addition of four new brands.
Total Retail's Take: By betting on the futures of its more casual, lifestyle brands — Calvin Klein, TOMMY HILFIGER — and divesting itself of formal wear brands ARROW, Geoffrey Beene, IZOD, and Van Heusen, PVH is signaling a greater trend in the apparel space. With more people working from home and going into corporate offices less (if at all), consumer demand for formal wear has plummeted. Conversely, demand for casual, lifestyle apparel, which can be worn around the house as well as in social settings, has steadily increased. With that in mind, it's easy to understand PVH's willingness to make this deal. As for ABG, it's strengthening its brand portfolio while also betting on the long-term prospects of the formal wear market. By getting the four brands at a seemingly friendly price, it can afford to be more patient for those businesses to bear fruit.