Between love and madness lies obsession
Calvin Klein
Tagline
Net Worth
$700,000,000
Started in (City)
New York City
Started in (Country)
United States
Incorporation Date
01st December, 0962
Bankruptcy Date
-
Founders
- Calvin Klein
- Barry K. Schwartz.
About
Calvin Klein Inc. is an American fashion house established in 1968. It specializes in leather, lifestyle accessories, home furnishings, perfumery, jewelry, watches, and ready-to-wear. The company has a substantial market share in retail and commercial lines as well as haute couture garments.
The company was founded by designer Calvin Klein and his childhood friend, Barry K. Schwartz. The company is headquartered in Midtown Manhattan, New York City.
In 1968, Calvin Klein founded Calvin Klein Limited, a coat shop in the York Hotel in New York City, for $10,000. The first Calvin Klein collection was a line of "youthful, understated coats and dresses" featured at the New York City store Bonwit Teller.
In September 1969, Klein appeared on the cover of Vogue magazine.
Beginning
By 1971, Klein had added sportswear, classic blazers, and lingerie to his women's collection. In 1973, he received his first Coty American Fashion Critics' Award for his 74-piece womenswear collection - the youngest recipient at that time. Klein won the award again in 1974 and 1975. By 1977, annual revenues had increased to $30 million (equivalent to $127 million in 2021), and Klein had licenses for scarves, shoes, belts, furs, sunglasses, and bedsheets. Klein and Schwartz were making $4 million each. After the company signed licenses for cosmetics, jeans, and menswear, Klein's annual retail volume was estimated at $100 million (equivalent to $422 million in 2021). In 1978, Klein claimed sales of 200,000 pairs of his famous jeans the first week they were on the market. By 1981, Fortune figured Klein's annual income at $8.5 million. In the mid-1970s, he had created a designer-jeans craze by putting his name on the back pocket. Klein's design assistant at the time, Jeffrey Banks, has claimed credit for the logo garments, stating that he had the logo from a press folder silkscreened onto the sleeve of a brown T-shirt as a present for Klein. The gift was assumed by Schwartz to be part of the upcoming line, and similar logo shirts formed the uniform for the front-of-house staff at Klein's next catwalk show, leading to buyer demand.
In the 1980s, as the designer-jeans frenzy reached its all-time high, Calvin Klein introduced a highly successful line of boxer shorts for women and a men's underwear collection which would later gross $70 million in a single year. The American market for men's underwear was changed.
Growth continued through the early eighties.
During his 1990-1995 stint as Calvin Klein's head of menswear design, John Varvatos pioneered a type of men's underwear called boxer briefs, a hybrid of boxer shorts and briefs.
Road to Success
In the beginning, Klein himself, who was included as a person in the 15-year contract he had signed with PVH, remained creative head of the collections but then continued as an advisor (consulting creative director) to the new company from 2003 on and has since been more withdrawn from the business. Barry K. Schwartz was said to concentrate on his role as chairman of the New York Racing Association, a horse-racing club. The current President and COO of the CKI division within PVH are Tom Murry, who had filled this position already before the acquisition.
Upon the acquisition of Calvin Klein, Phillips-Van Heusen announced plans of launching a new men’s sportswear collection that rivals Ralph Lauren’s collection. This line is produced by Van Heusen.
With the fall 2006 Collection runway presentations in New York City, CKI inaugurated an 8,600 sq ft (800 m2) showroom space that can seat up to 600 people on the ground floor of 205 West 39th Street, in Times Square South where Calvin Klein has been headquartered since 1978.
In a 2010 report, PVH, which manages the ready-to-wear activities, had estimated sales of €4.6 billion of Calvin Klein products.
In February 2013, Warnaco Group was acquired by PVH which united Calvin Klein's formal, underwear, jeans, and sportswear lines.
The early ads were shot by Bruce Weber and Richard Avedon. One of his male underwear models, Mark Wahlberg, went on to fame as hip hop star "Marky Mark", launching himself into the Hollywood scene to become a current actor. Another Hollywood star first appearing in Calvin Klein advertisements is Antonio Sabato Jr., Calvin Klein employed Kate Moss at the start of her career in the early 1990s and 2002 after allegations of cocaine use. Other models who have appeared in advertisements early in their careers are Natalia Vodianova and Toni Garrn. Currently, Calvin Klein uses Shawn Mendes, Tyson Ballou, and Lara Stone, and in the past has also used Christy Turlington, Jerry Hall, Patti Hansen, Tom Hintnaus, Travis Fimmel, Doutzen Kroes, Mini Anden, Garrett Neff, Sean O’Pry, Edita Vilkeviciute, Jamie Dornan, Liu Wen, and Edward Furlong.
Actors such as Eva Mendes, Mehcad Brooks, Scarlett Johansson, Kellan Lutz, Andie MacDowell, Alexander Skarsgard, Zoe Saldana, Rita Ora, Rooney Mara, Lupita Nyong’o, Margot Robbie, Saoirse Ronan, Jake Gyllenhaal, and Diane Kruger have also been chosen to model for the brand. Swedish footballer Freddie Ljungberg starred in a series of adverts for the company. Recently, singer Justin Bieber appeared in advertising for Calvin Klein’s underwear range, as did fashion model Kendall Jenner. In 2017 Solange Knowles became the face of the campaign Our Music, #MYCALVINS. On July 16, 2018, Saoirse Ronan and Lupita Nyong’o were announced as the faces of Raf Simons first fragrance for the brand, named Women. They also have experimented with emerging technologies. When advertising cKOne perfume in 1999, they placed e-mail addresses in print advertisements, targeted at teenagers. When these teens mailed these addresses, they would be placed on a mailing list that sent them mails with vague details about the models’ lives, with fake details meant to make them more relatable. These mails came at unpredictable intervals and were supposed to give readers the feeling that they had some connection with these characters. Though the mailing lists were discontinued in 2002, the campaign has inspired similar marketing tactics for movies and other retail products. In 2019, Calvin Klein featured an ad by Sarah Rae Vargas for plus-sized women. In 2020, Calvin Klein invited black trans model Jari Jones and other eight LGBTQ models to feature its pride campaign #PROUDINMYCALVINS.
In 1980, Richard Avedon photographed and directed a Calvin Klein Jeans campaign that featured a fifteen-year-old Brooke Shields. Some of those advertisements were banned, including an infamous advert where Brooke asks, "Do you want to know what comes between me and my Calvins? Nothing!"
Challenges
The 1995 adverts promoting Calvin Klein jeans received criticism for being "kiddie porn".
In August 2012, Lululemon Athletica filed suit against Calvin Klein and supplier G-III Apparel Group for infringement of three Lululemon design patents for yoga pants. The lawsuit was somewhat unusual as it involved a designer seeking to assert Intellectual Property protection in clothing through patent rights. On November 20, 2012, Lululemon filed a notice of voluntary dismissal in the Delaware courts based upon a private settlement agreement reached between the parties that would dismiss the suit. According to a Lululemon press release, "Lululemon values its products and related IP rights and takes the necessary steps to protect its assets when we see attempts to mirror our products.”
However, according to Chevalier’s brand book Luxury Brand Management, Klein “is seldom involved in the design and the development of products bearing his name” and “all activities are subcontracted to licensees”,
In 2014, Klein was criticized for the designation of Myla Dalbesio in its "Perfectly Fit" which offended many women as it is made for plus sizes.
The licensing program, which brought in $24,000 when it was initiated in 1974 (equivalent to $124,421 in 2019), had a royalty income of $7.3 million ten years later (equivalent to $17.96 million in 2021). That year, worldwide retail sales were estimated at more than $60 million (equivalent to $1476.55 million in 2021). Klein's clothes were sold through 12,000 stores in the United States and were available in six other countries through licensing deals, namely Canada, the United Kingdom, Ireland, Australia, New Zealand, and Japan. His annual income passed $12 million (equivalent to $29.53 million in 2021).
Financial problems increased pressure from all sides, disagreements with the licensee of the menswear line and its disappointing sales as well as an enormous employee turnover both within Calvin Klein and its licensing partners led to the first rumors that Calvin Klein Industries, as the company had been known by then, was up for sale. And indeed, in late 1987, it was said that the sale of the company to Triangle Industries, a container manufacturer, had only failed because of the crashing stock market. In mid-December 2002, Calvin Klein Inc. (CKI) was sold to Phillips Van Heusen Corp (PVH), whose then CEO Bruce Klatsky was the driving force behind the deal, for about $400 million in cash, $30 million in stock as well as licensing rights and royalties linked to revenues over the following 15 years that were estimated at $200 to $300 million. The sale also included an ongoing personal financial incentive for Klein based on future sales of the Calvin Klein brand.
Failures
PVH outbid VF Corp., the maker of Lee and Wrangler jeans, which had also been interested in the jeans, underwear, and swimwear business of CK that had been controlled by Warnaco Group, maker of Speedo swimwear in the US, since 1997. The deal with PVH did not include these businesses, and they remained with Warnaco. Unable to pay debts from acquisitions and licensing agreements and due to bad publicity by a later dismissed lawsuit with Calvin Klein over selling license products to retailers other than agreed upon with Calvin Klein, Warnaco had filed for chapter 11 protection in mid-2001 but eventually emerged from bankruptcy in February 2003.
The transaction between Calvin Klein and PVH was financially supported by Apax Partners Inc., a New York private equity firm, which is said to have made a $250 million equity investment in PVH convertible preferred stock, as well as a $125 million, a two-year secured note, all in exchange for seats on the board of PVH.
CKI thus became a wholly-owned subsidiary of PVH.
In 1999 when it was announced that CKI was again up for sale, it came as a surprise. Planning to expand its business, the company had been approached by two luxury goods companies, LVMH and Pinault Printemps Redoute, to join Calvin Klein, but nothing resulted. Other potentials like Tommy Hilfiger Corp. and Italy's Holding di Partecipazioni proved to be similar disappointments because of CKI's steep price tag of supposedly $1 billion. After seven months and no potential buyer, Klein announced that his empire was not on the market anymore. The company would never manage to go public, which had supposedly been Klein's plan once.
Achievements
- In 1974, Calvin Klein became the first designer to receive outstanding design in men’s and women’s wear from the Council of Fashion Designers of America (CFDA) award show
Subsidies
- Phillips-Van Heusen Corporation
CEOs
- Steve Shiffman
- Cheryl Abel-Hodges