PVH Corp. Completes Acquisition of Gazal Corporation Limited
May 31 2019 - 4:15PM
Business Wire
Acquisition Completed to Give PVH Full Control of its Brands
in Australia
PVH Corp. [NYSE:PVH] announced today it completed the
acquisition of the approximately 78% of the outstanding shares of
Gazal Corporation Limited (“Gazal”), PVH’s long-term partner
in Australia, not previously owned.
The transaction is expected to result in a material increase to
PVH’s 2019 earnings per share on a GAAP basis, as PVH expects to
record a noncash gain to write-up to fair value its equity
investments in Gazal and PVH Brands Australia Pty Limited (a joint
venture between PVH and Gazal). The transaction is expected to be
slightly accretive to PVH’s 2019 earnings on a non-GAAP basis,
which excludes the noncash gain.
Four key members of management of Gazal and the joint venture
have entered into employment agreements and are expected to remain
in their roles for at least two years. These executives exchanged
approximately 25% of their interests in Gazal for approximately 6%
of the outstanding stock of the PVH subsidiary that is the parent
company of the acquirer.
“Our decision to acquire Gazal is aligned with PVH’s strategic
priority to expand our worldwide reach by assuming more direct
control over our brands’ regional licensed businesses. By joining
forces now, we believe we’re well positioned to capture the
significant growth in the Australia and New Zealand markets,”
said Emanuel Chirico, PVH Corp. Chairman and CEO. “We are
pleased to welcome Gazal into our PVH family and continue driving
our business forward together.”
About PVH Corp.
PVH is one of the most admired fashion and lifestyle companies
in the world. We power brands that drive fashion forward – for
good. Our brand portfolio includes the iconic CALVIN
KLEIN, TOMMY HILFIGER, Van
Heusen, IZOD, ARROW, Speedo*, Warner’s, Olga
and Geoffrey Beene brands, as well as the
digital-centric True & Co. intimates brand. We market
a variety of goods under these and other nationally and
internationally known owned and licensed brands. PVH has over
38,000 associates operating in over 40 countries and $9.7
billion in annual revenues.
*The Speedo brand is licensed for North
America and the Caribbean in perpetuity
from Speedo International Limited.
About Gazal
Based in Sydney, Gazal is a leading apparel
supplier and retailer in Australasia. Gazal manages PVH
Brands Australia Pty Limited, which licenses and operates in Oceana
PVH’s iconic lifestyle apparel brands, led by CALVIN
KLEIN and TOMMY HILFIGER, as well as other licensed
and Gazal-owned brand names, such as Pierre Cardin,
Bracks and Nancy Ganz.
PVH CORP. SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995: Forward-looking
statements made in this press release, including, without
limitation, statements relating to PVH Corp’s (the “Company”)
earnings, future plans, strategies, objectives, expectations and
intentions, are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Investors are
cautioned that such forward-looking statements are inherently
subject to risks and uncertainties, many of which cannot be
predicted with accuracy, and some of which might not be
anticipated, including, without limitation, (i) the Company’s
plans, strategies, objectives, expectations and intentions are
subject to change at any time at the discretion of the Company;
(ii) the Company may be considered to be highly leveraged, and
uses a significant portion of its cash flows to service its
indebtedness, as a result of which the Company might not have
sufficient funds to operate its businesses in the manner it intends
or has operated in the past; (iii) the levels of sales of the
Company’s apparel, footwear and related products, both to its
wholesale customers and in its retail stores, the levels of sales
of the Company’s licensees at wholesale and retail, and the extent
of discounts and promotional pricing in which the Company and its
licensees and other business partners are required to engage, all
of which can be affected by weather conditions, changes in the
economy, fuel prices, reductions in travel, fashion trends,
consolidations, repositionings and bankruptcies in the retail
industries, repositionings of brands by the Company’s licensors and
other factors; (iv) the Company’s plans and results of
operations will be affected by the Company’s ability to manage its
growth and inventory; (v) the Company’s operations and results
could be affected by quota restrictions and the imposition of
safeguard controls (which, among other things, could limit the
Company’s ability to produce products in cost-effective countries
that have the labor and technical expertise needed), the
availability and cost of raw materials, the Company’s ability to
adjust timely to changes in trade regulations and the migration and
development of manufacturers (which can affect where the Company’s
products can best be produced), changes in available factory and
shipping capacity, wage and shipping cost escalation, and civil
conflict, war or terrorist acts, the threat of any of the
foregoing, or political and labor instability in any of the
countries where the Company’s or its licensees’ or other business
partners’ products are sold, produced or are planned to be sold or
produced; (vi) disease epidemics and health related concerns,
which could result in closed factories, reduced workforces,
scarcity of raw materials and scrutiny or embargoing of goods
produced in infected areas, as well as reduced consumer traffic and
purchasing, as consumers become ill or limit or cease shopping in
order to avoid exposure; (vii) the failure of the Company’s
licensees to market successfully licensed products or to preserve
the value of the Company’s brands, or their misuse of the Company’s
brands and (viii) other risks and uncertainties indicated from
time to time in the Company’s filings with the Securities and
Exchange Commission.
Risks and uncertainties related to the acquisition include,
among others: competitive responses to the acquisition; costs,
charges or expenses resulting from the acquisition; the inability
to recognize the expected benefits of the acquisition; the
inability to integrate the acquired business without disruption to
the acquired business or existing operations; and any changes in
general economic and/or industry specific conditions.
The Company does not undertake any obligation to update publicly
any forward-looking statement, whether as a result of the receipt
of new information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20190531005341/en/
Dana PerlmanTreasurer and Senior Vice President, Business
Development & Investor Relations(212)
381-3502investorrelations@pvh.com
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