CKI’s Latest Deal: Inks Collection Licenses With Vestimenta

NEW YORK — The future of Calvin Klein’s designer collection business is continuing to quickly evolve since the completion of the company’s...

A second phase planned for the fourth quarter of 2003 calls for a supply agreement with Vestimenta, meaning that the Italian company will handle all product development, as well as manufacturing, Murry said. CKI also plans to manage sales through the spring 2004 collections, but as of January 2004, Vestimenta will take responsibility for all functions except design and marketing.

"Design will stay in house and we will continue to produce and fund two major fashion shows for women’s and two for men’s each year," Murry said.

Klein, who turned over creative control to PVH with the sale of the company, said in a statement: "This strategic partnership, with Vestimenta’s diversified structure and consistent ability to produce the finest in both soft and tailored clothing that Italy offers, will help us achieve our global strategy."

Murry would not quantify the impact on CKI personnel in New York as a result of the deal, other than to confirm that some support functions will transfer over time to Vestimenta’s facilities in Milan or to new factories built exclusively for the production of Calvin Klein products.

"As far as the sales and merchandising organization, they remain intact and on our payroll through the end of this year," Murry said. "Over the next few weeks, Vestimenta’s management will evaluate their long-term strategy as it relates to that personnel."

Although the deal comes on the heels of the completion of the sale of CKI to PVH, Murry said it would have likely come to fruition regardless of the change in ownership. Giovanni Bassetti, chairman of Vestimenta, added from Milan that the companies had been talking even before PVH took control of Calvin Klein earlier this year.

"This was an incredible opportunity for us," Bassetti said. "Calvin Klein is one of the most known labels in the world and we believe that there is great potential to grow the brand," noting that there remains an enormous potential to develop the collection businesses in Europe and Asia.

Burani had similarly hoped to build the Calvin Klein collections in Europe, but was never able to successfully establish its presence there.

"We have had a lot of licensees and partners over the years and some work and some don’t," Murry said. "There has to be a philosophical alignment between the two companies, particularly in the designer business, because the quality has to be the top available in the world. Some of the licensees in the past were unable to deliver that level of quality for various reasons."
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