Designer Tommy Hilfiger at the conclusion of his fall fashion show in New York. (AP)
Associated Press | Clothing maker Phillips-Van Heusen Corp.
said Monday it has agreed to buy privately held Tommy Hilfiger in a cash-and-stock deal valued at about $3 billion, creating one of the world’s biggest clothing companies.
Shares of Phillips-Van Heusen, a New York clothing retailer which owns and markets the Calvin Klein brand, rose more than 4 percent in premarket trading.
The deal includes approximately $2.6 billion euros in cash and $379.9 million in Phillips-Van Heusen stock.
Phillips-Van Heusen will also assume $137.6 million in liabilities.
A group led by the buyout firm Apax Partners acquired Tommy Hilfiger in May 2006 for about 1.2 billion euros. It said it has invested more than 400 million euros in the business, increased the number of employee by more than 1,000 and the number of stores to 1,002 from 574.
Phillips-Van Heusen, based in New York, said the combined company’s revenue will total about $4.6 billion. The combination will allow Phillips-Van Heusen to introduce some of its brands in international markets, Phillips-Van Heusen said.
Tommy Hilfiger will remain in his role as principal designer, setting the vision for the Tommy Hilfiger brand.
Fred Gehring will continue as CEO of Tommy Hilfiger, and also become CEO of Phillips-Van Heusen’s international operations. He will also join the Phillips-Van Heusen board of directors.
PVH shares rose $1.85, or 3.9 percent, to $49.59 in premarket trading.
The sale to Phillips-Van Heusen does not require a shareholder vote and is expected to close in Phillips-Van Heusen’s second quarter.
PVH said it expects the deal to immediately help earnings by 20 cents to 25 cents per share, excluding one-time items, beginning in the current fiscal year ending Jan. 30, 2011.
It said the deal will help earnings by 75 cents to $1 in the fiscal year ending Jan. 29, 2012.
Phillips-Van Heusen expects to save $40 million annually as a result of the deal.
Tommy Hilfiger?? No talent, no taste, just a stupid ol’ waste (of the cash you spent to buy it).
The Tommy Hilfiger brand was whored out a long time ago is a basically a ghetto brand. P-VH used to make quality, American-made dress shirts for the likes of Lord & Taylor and Bloomingdale’s. It, too, is now crap. All foreign made.
We are in the midst of the great ready-to-wear race to the bottom. You will either buy your clothes from Kohl’s or will have them custom made. Small specialty retailers like J. Press and Paul Stewart will gain a following, as well.
The myths of “global” competition and shareholder value.
A lot of lost jobs over the past 15 years. But sit tight, Obama is going to create some new ones.
What is whored out? They do sell at many retailers but isn’t that the point with expansion? I’d go for custom made but who really has that kind of cash unless you’re the exec’s at BCBS? Bonus checks on the way.
Calvin Klein shutting down more stores, not sure if they are going out of business or if they are just shutting more stores down. horrible for the 100 or so employees getting laid off
http://stopthesmell.wordpress.com/2010/04/27/calvin-klein-closing-down-stores/