February 08, 2019

PVH - Tommy Hilfiger Orders Positive Except for U.K.

PVH
By Patricia Newman

PVH’s FY4Q18 Tommy Hilfiger orders were up yy in France and Germany but decelerated in the United Kingdom, while U.S. sales and orders remained mostly positive, and Calvin Klein slowed in both regions.  

Tommy Orders Up Except for United Kingdom
Western European PVH Corp. Tommy Hilfiger orders for the next six months were up yy for six of eight buyers but down yy for two, a deterioration compared with the November note, when orders were up yy for all seven sources. Order growth was driven by strong brand awareness, attractive pricing and a young, loyal male and female customer base. French and German buyers were confident about the brand and upcoming collections. “Tommy for women's brand positioning, collections and pricing are all very competitive, and growth is still expected to strong,” a French buyer said. However, orders were down yy for two U.K. buyers who cited slowing sales momentum and declining interest in Tommy Hilfiger’s logos. “Orders are down because sales weren't doing as well as hoped. We don't think the trend for Tommy Hilfiger has passed, but for some reason it is struggling,” one said.   

Western European Tommy Hilfiger FY4Q18 Plan Attainment
(number of mentions)
 FY3Q18FY4Q18
Exceeded32
Met24
Fell below31

Tommy Hilfiger FY4Q18 (November-January) sales exceeded plan for two of seven buyers, met for four, and fell below for one, a slight improvement compared with FY3Q18, when three of eight buyers exceeded plan, two met and three fell below. Most menswear buyers reported continued share gains, notably at the expense of Ralph Lauren Corp. One French buyer said his sales were significantly affected by the yellow vest protests, but all the same Tommy Hilfiger sales met plan through share gains. “Tommy Hilfiger is still very strong, for all products,” he said. Both German buyers met plan but felt sales could have been better without the big logos. “Tommy Hilfiger continues to outperform, especially for jeans. We tried a few of the big-logo tops but they didn't work so well with our clientele. Our sales were up but not as much as they could have,” one said. Sales fell below plan for one U.K. source who noted slowing sales for Tommy Hilfiger. “Tommy has been really disappointing. Last year it was unstoppable, but it seems to have lost its momentum. I don't know why and I hope they pull it back. They're a great brand,” one said.

Quotes
“The '90s big-logo stuff we had did not sell well; maybe it's better suited for boutiques. Jeans, shirts, parkas, coats sold as well as ever, actually better than last year in the case of coats and parkas, especially in December.” Germany

“It could have been better. Some customers do not like the almost disappearance of the word Hilfiger and eventually did not buy. It just says “Tommy” jeans and some customers believe they are fake. I will see spring collections in mid-February and I hope they rectify this. France

“Tommy for women is still very strong, as usual. It still has strong ambassadors this year and good advertising campaigns.” France

“We took a break for a couple of seasons from Tommy and we won't be getting it back in. It's the same issue for us, '90s logo product is where demand is and that really isn't our customer base.” United Kingdom

Calvin Klein Europe: Western European Calvin Klein orders for the next six months yy were up for three of four sources and flat or down for two, compared with up for four of five buyers and down for one in FY3Q18. Two women's buyers in France said they increased orders because recent collections were nice. “I like the new collections and will order more,” one said. Calvin Klein menswear trends were more mixed in Western Europe. Orders were up yy for two men’s buyers, including one U.K. source who just added the brand and a French buyer who added it last year. Both buyers were pleased with sell-through, albeit on small volumes. Meanwhile, two buyers in France and the United Kingdom recently dropped the brand because of lack of appeal and high prices. “We've stopped carrying Calvin Klein in this store because our customers didn't take to it. I think it's expensive for what it is,” the U.K. buyer said.

Western European Calvin Klein FY4Q18 Plan Attainment
(number of mentions)
 FY3Q18FY4Q18
Exceeded--
Met43
Fell below11

Calvin Klein sales during FY4Q18 met plan for three buyers (all in France) and fell below for one, compared with meeting for four of five buyers in FY3Q18. One French menswear buyer who just added the brand to his stores was happy with initial sales. “[Calvin Klein] shirts are popular, which is not the case of most shirts but theirs are quite modern and appealing. They have a good fashion with the logo but not too big,” one said. Both womenswear buyers in France met plan, even if for one source it was a recent listing and it was based on modest volumes and expectations. “We just added the Calvin Klein brand so it’s too early to say. Ready-to-wear is doing well. It’s a bit more difficult for CK jeans,” one said.

Quotes
“I discontinued the brand [Calvin Klein] because it was rejected by my male customers.” France

“CK jeans is doing OK. The brand has its clientele. The new women's line just arrived so it's too soon to say, but it looks promising.” France

“Calvin Klein arrives next quarter. We're looking forward to working with them, getting something new in.” United Kingdom

U.S. Tommy Hilfiger Orders Aided by Solid Offerings and Marketing
Orders for Tommy Hilfiger for the next six months increased yy for two of three buyers who said they ordered more because of appealing spring/summer offerings. “They have some good programs for spring and we decided to order a little bit more,” one said. Orders were flat yy for one specialty chain buyer who only stocks a small selection of Tommy Hilfiger’s men’s merchandise.

For spring, Tommy Hilfiger is launching a collaboration collection with actress Zendaya, who is also the new brand ambassador.

U.S. Tommy Hilfiger FY4Q18 Plan Attainment
(number of mentions)
 FY3Q18FY4Q18
Exceeded--
Met33
Fell below--

Sales of Tommy Hilfiger merchandise during FY4Q18 met plan for all three buyers, who cited success with the brand’s T-shirts, hoodies and joggers. “We did pretty well with Tommy [Hilfiger] during the holiday season. We also put some items on sale so they moved well,” one said.

Quotes
“There's more excitement around [Tommy Hilfiger] right now.”

“We only have a very small selection with underwear and some accessories. We may increase our buys with [Tommy Hilfiger] because it's a good brand but for now we’re not.”

Calvin Klein U.S.: Orders for Calvin Klein for the next six months were flat yy for all three U.S. buyers who carry a small selection of offerings and didn't see a level of demand to warrant growth, similar to November. “Orders are similar to last year especially since we don't carry a lot. We have more Tommy than Calvin Klein. Tommy is more in demand right now,” one said.

U.S. Calvin Klein FY4Q18 Plan Attainment
(number of mentions)
 FY3Q18FY4Q18
Exceeded--
Met32
Fell below-1

Sales of Calvin Klein merchandise during FY4Q18 met plan for two of three buyers (compared with all three in November) who cited success of the brand’s T-shirts, underwear and casual offerings. “I have seen more casual wear programs from [Calvin Klein]. More brands are offering that type of package, which speaks to what guests are looking for in this stage of apparel buying. More brands are trying to mimic what Lululemon [Athletica Inc.] is doing,” one said. However, sales fell below plan for one buyer who cited lagging sales of denim as the reason. “Calvin Klein’s sales were slower than expected. The T-shirts did OK but the jeans didn’t do so well. It's just a shift away from denim right now,” one said.

Quotes
“Calvin Klein's T-shirts and crew necks did OK for us. We don't have a lot but what we have did OK.”

“Tommy is getting a lot more love than Calvin Klein is right now.”

Contributors: Pascal Benazet, Karsten Knothe and Michelle Noble

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