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Tommy Hilfiger and Calvin Klein’s Australian Expansion Plans

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By Published On: May 10, 20180 Comments

The company behind global brands, Tommy Hilfiger and Calvin Klein, is planning a major Australian expansion to combat any potential fallout from the shift away from traditional department store models.

In an investor’s presentation, Gazal Corp, a half owner of PVH Brands expressed concern over the financial and operational concerns that have emerged in relation to department stores in Australia. Myer is a particular concern for the international brand since it has been plagued with poor sales, share price drops and store closures in recent years.

“There is much speculation in the press that the department store model is currently being challenged,” the presentation said. “Since 2012 Myer has closed 10 stores and there is a risk of more store closures in the coming years.”

“To minimise this risk, PVHBA has a plan to significantly grow the size and number of its own retail stores.”

As part of the expansion, PVHBA plans to open 34 new stores covering the Calvin Klein, Tommy Hilfiger and Van Heusen brands, as well as the development of a new Australian e-commerce offering. The dedicated e-commerce stores are slated for launch in late 2018, while the retail shopfronts will be a longer-term plan.

So far, PVHBA has confirmed the opening of four Tommy Hilfiger, three Van Heusen, and two Calvin Klein stores by January 2019, which will bring the company’s global store count to 75.

The retail brand is confident it can open as many as 100 stores in the Australian and New Zealand market in larger locations in the coming years, as the company is looking to increase its average outlet store space from 300 square metres per store to 500-550 square metres per store.

PVHBA is reportedly working with its offices in Amsterdam and New York to develop three brand-specific online stores for Australia and New Zealand. The company hopes each online offering will act as an omnichannel solution for consumers, enabling each brand to leverage the customer loyalty and VIP customer database that will be built in-store.

In the investor presentation on Wednesday, Gazal said its enhanced web presence is also being developed so the company can remain competitive with the likes of Amazon, as consumer shopping habits start to shift, and expectations for order fulfilment become more challenging.

“There has been much speculation in the press about increased competition from the entry of Amazon into the Australian market. There is little doubt that the retail channel mix is moving and changing,” the report said.

“To minimise this risk, additional to PVHBA’s plan to significantly grow the size of its own retail stores, PVHBA is launching its own e-commerce sites, as well as commencing a wholesale relationship with Amazon Australia.”

PVHBA hasn’t confirmed whether or not Tommy Hilfiger, Calvin Klein and Van Heusen products will continue to be sold through local department stores, only that it’s “minimising its exposure to other department stores”.

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