Tommy Hilfiger's latest focus on classic American fashion led the company to make this move. The new women's collection, slated to launch in Spring 2016, will incorporate a wide range of products, including dresses, cardigans and shrugs in a price range of $99-$149.
Further, this collection will complement the brand's existing sportswear collection for women, and will be available at various specialty stores, the company's eCommerce partners and at certain department stores like Macy's Inc. M from Feb 2016.
Tommy Hilfiger has been focused on expanding its women's category as it believes that this line of business has immense growth potential, which can ultimately drive the brand's international expansion.
Further, Tommy Hilfiger will gain from G-III Apparel's robust customer network, significant knowledge and market leading position in the women's category in North America. Tommy Hilfiger's association with G-III Apparel is not new as the two have partnership deals in place for luggage and outerwear products.
The new women's collection deal, which is initially expected to last for five years, is most likely to enhance the strategic ties between G-III Apparel and PVH Corp. Also, G-III Apparel can renew the agreement for another five years if it successfully meets the sales target.
The agreement is part of PVH Corp.'s strategy of focusing on higher-margin businesses. In this regard, the company is closing underperforming divisions, undertaking acquisitions and entering into various licensing agreements. Most recently, the company inked a licensing agreement with Accutime to make and sell watches for men and boys through the Van Heusen brand.
We believe that, based on the strength of many of its brands, particularly Tommy Hilfiger and Calvin Klein, coupled with opportunities with regard to distribution, PVH Corp. is poised for long-term growth.
PVH Corp. currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same industry is Perry Ellis International Inc. PERY , with a Zacks Rank #1 (Strong Buy).
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