Warnaco Takes Calvin Klein to India - Analyst Blog
July 15 2011 - 8:30AM
Zacks
Warnaco Group Inc.
(WRC), the leading global apparel company engaged in the business
of designing, sourcing, marketing and selling men’s, women’s and
children’s sportswear is planning to tap into the growing Indian
market along with Brand Marketing India.
Under the agreement Warnaco will
market and distribute Calvin Klein Underwear, Calvin Klein Jeans,
Calvin Klein Jeans Accessories and other Calvin Klein branded
apparels and accessories.
Warnaco will hold 51 percent share
in the joint venture. Some of Warnaco’s license agreements with
Calvin Klein, Inc. had to be modified to include India with
Warnaco’s licensed territories for selling Calvin Klein Jeans and
Calvin Klein Jeans Accessories, as well as for Calvin Klein branded
apparels and accessories.
Calvin Klein Inc. is one of the
leading fashion studios in the world. It designs and markets
women’s and men’s designer collection and a range of other products
that are manufactured and marketed through an extensive network of
licensing agreements and other arrangements worldwide. It is a
wholly owned subsidiary of Phillips-Van Heusen
Corporation (PVH).
Besides, it needs to be mentioned
that in 2000, Calvin Klein, Inc. had sued Warnaco Group alleging
Warnaco of diluting the Calvin Klein brand name by producing
merchandise that was not authorized or approved by Calvin Klein.
Warnaco was also found guilty of distributing Calvin Klein
jeanswear through unapproved discount outlets, such as warehouse
clubs like Costco.
Though Warnaco was able to retain
its Calvin Klein licenses, Calvin Klein was able to regain some of
the creative control it had ceded in the original license.
Brand Marketing India ("BMI") is
the company that markets the Calvin Klein Jeans, Calvin Klein
Underwear in India. Within a short span of over 3 years, BMI has
introduced Calvin Klein through over 100 sales stores across 13
Indian cities.
Warnaco delivered decent first
quarter results of $1.10 per share. However, it missed the Zacks
Consensus Estimate by 13.4%.
Warnaco, which competes with
Limited Brands Inc. (LTD) and Maidenform
Brands Inc. (MFB), has strong international presence and
an ever expanding direct-to-consumer business, which acts as an
impetus and helps open up more prospects.
We currently have a Zacks #3 Rank
on Warnaco shares, which translates into a short-term ‘Hold’
rating.
LIMITED BRANDS (LTD): Free Stock Analysis Report
MAIDENFORM BRND (MFB): Free Stock Analysis Report
PVH CORP (PVH): Free Stock Analysis Report
WARNACO GRP INC (WRC): Free Stock Analysis Report
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