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Calvin Klein, Tommy Hilfiger chart major online, offline expansion Down Under

PVH Brands Australia is looking to minimise its exposure to beleagured department store Myer’s consolidation by embarking on a major expansion of its retail network in the coming years that could see its store footprint increased by more than a third.

The expansion could see PVH Australia – a 50/50 joint venture between listed apparel wholesaler Gazal Corp and US-based clothing giant PVH Brands – open 34 new stores across the Calvin Klein, Tommy Hilfiger and Van Heusen brands.

Dedicated local e-commerce stores for Calvin Klein and Tommy Hilfiger are also being constructed and are slated towards the end of 2018.

In a presentation to investors, half-owner Gazal Corp said that it was minimising its exposure to Myer and other department stores by expanding its retail business.

“There is much speculation in the press that the department store model is currently being challenged,” it said. “Since 2012 Myer have 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.”

Four Tommy Hilfiger, three Van Heusen and two Calvin Klein stores are forecast to be launched by January 2019 as part of the expansion, which would bring PVH’s footprint to 75 stores (39 Calvin Klein, 21 Tommy Hilfiger and 15 Van Heusen).

In the longer term PVH believes it could have as many as 100 stores across Australia and New Zealand, including 50 Calvin Klein, 30 Tommy Hilfiger and 20 Van Heusen locations.

Calvin Klein and Tommy Hilfiger outlet space will also be increased by up to 57 per cent in the coming years, moving from an average of 300sqm per store to 500-550sqm.

In Australia, Sydney Melbourne and Brisbane metro locations will be in-filled, while new urban stores will be opened in Adelaide, Perth and Hobart. Additional airport and high street strip stores are also being targeted.

The business has yet to launch in New Zealand, but said it intended to open stores across the Tasman in the coming years.

Gazal Corp, which revealed the plans as part of an investment roadshow, said the three PVH Australia brands generated a combined $224.7 million in revenue last year through retail, outlet and wholesale channels.

Flagship brands Tommy Hilfiger and Calvin Klein booked impressive growth in 2017, with sales up 33.9 per cent and 18.9 per cent respectively, while heritage brand Van Heusen’s sales declined by 6.5 per cent.

There are also plans to expand the breadth of product categories sold in Australia, with Tommy Hilfiger’s sportswear and Calvin Klein Underwear currently accounting for the bulk of local sales.

E-commerce platforms to future proof businesses

PVH Australia is working closely with PVH’s offices in Amsterdam and New York to build its dedicated Australian e-commerce platforms.

The websites are being billed as an omni-channel solution for Australian consumers that will allow them to leverage a growing database of VIP customers acquired through the physical store network.

Gazal said on Wednesday that increasing its web presence would future proof the brands against incoming competition from the likes of Amazon.

“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,” it said.

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

PVH Australia was one of Amazon’s first local partners and has been on its Australian marketplace since it launched last December.

Updated – 12:07 AEST

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