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This is the second time in four years that Calvin Klein Inc. has looked to outsource the manufacturing and distribution side of the designer business, while maintaining control over design and marketing from its headquarters in New York.
A former licensing deal with the Mariella Burani Fashion Group, which once operated under the name Selene SpA, had initially been conceived in 1999 as a means to improve the collection’s quality of construction and its European presence, but Klein bought back that license two years later during a campaign to regain centralized control of many of the company’s brands.
"The whole key to this is that we are forming a strategic partnership with someone who specializes in a very specific business," said Tom Murry, president and chief operating officer of CKI. "We’ve done a pretty good job at production since bringing both the men’s and women’s businesses in-house. The quality and the execution in-house is good, but there’s no way we can do the kind of job that Vestimenta can do."
The new agreement, which should be formalized by mid-March, was described by the companies as a long-term strategic partnership to manufacture and distribute the Calvin Klein women’s and men’s designer apparel collections on a worldwide basis, and the partners have also broached the subject of a similar arrangement for the production of Calvin Klein accessories.
The women’s and men’s designer lines are said to have sales in the $40 million to $50 million range, and act as a foundation for more than $3 billion in sales of licensed products.
The partnership would officially begin on Jan. 1, 2004, but prior to that, Vestimenta is expected to manufacture Klein’s fall collection, which was shown in New York on Feb. 14.
The terms of the arrangement made clear that CKI would retain all responsibilities for design, marketing, advertising and public relations, as well as control over distribution, with management of the partnership to be overseen by Murry, and Vestimenta gradually taking over more responsibilities during the coming year.