Calvin Klein is facing costs of hundreds of millions of dollars in rebranding to following Raf Simons‘ departure. Though the company enjoyed a surge in sales powered by the holidays, completely retooling the American brand will inevitably take a toll on profits.
PVH Corp, Calvin Klein’s parent company, has removed its 205W39NYC high-end diffusion line and closed the flagship store on Manhattan’s Madison Avenue following Simons’ departure. In efforts to recuperate the profits not gained from the 205W39NYC line, PVH Corp faces a rebranding financial deficit of $240 million USD, $50 million USD more than the conglomerate first anticipated.
Michelle Kessler-Sanders, president of Calvin Klein 205W39NYC, will leave Calvin Klein in June and her departure follows on from a total of 100 employees leaving the Milan and New York offices. Raf Simons left Calvin Klein back in December 2018, eight months prior to his contract ending as a result of going “too far [and] too fast on both fashion and price,” according to Emanuel Chirico, Chief Executive Officer PVH Corp.
PVH Corp has designated $65.7 million for severance and termination, $55 million for “long-lived asset impairment,” which includes the closure of the 205W39NYC business and the flagship, $45 million for lease and contract termination costs and $5 million for inventory markdowns, as reported by WWD.
In case you missed it, Roberto Cavalli has announced it will be axing all its North American operations.