The Cost Of Rebranding Calvin Klein Is Estimated At £183 Million

The mission to rebrand Calvin Klein and reconnect the label with its customers is proving more costly than PVH Corp – the parent company which also has Tommy Hilfiger in its stable – anticipated. The conglomerate first predicted that unpicking the work of former creative director Raf Simons would cost $190 million (£145 million), however, new estimates forecast the financial deficit to be $240 million (£183 million).

Since Simons exited Calvin Klein in December, the brand has disbanded the 205W39NYC line and closed the flagship store on Manhattan’s Madison Avenue, which featured a floor-to-ceiling Sterling Ruby installation showcasing an edit of Simons's catwalk designs. Fifty employees in the New York office and 50 in the Milan office were let go, and Michelle Kessler-Sanders, president of Calvin Klein 205W39NYC, is due to leave the company in June.

In a breakdown of the restructuring costs, PVH designated around $65.7 million (£50 million) for severance and termination, $55 million (£42 million) for “long-lived asset impairment,” including the shuttering of the collection business and the flagship, $45 million (£34 million) for lease and contract termination costs and $5 million (£3.8million) for inventory markdowns, according to WWD.

To realise Simons’s 205W39NYC vision, PVH invested $60 million (£46 million) to $70 million (£53 million) in the luxury collections. It did not provide the return that PVH had hoped for, as the average Calvin Klein customer failed to connect with the conceptual fashion that seemed ions away from the denim and underwear lines that used to be the brand's bread and butter.

Amidst the costing reports, PVH failed to expand on its aforementioned plan to “[offer] an unexpected mix of influences and [move] at an accelerated pace”. The rumour mill has also gone quiet regarding news of Simons’s successor – if, indeed, the new Calvin Klein era still requires that role.