PVH Corp. has signed an agreement to sell certain intellectual property and other assets of its Heritage Brands business to Authentic Brands Group (ABG) and will exit its Heritage Brands business. The company said in a release that the cash purchase price for the transaction is approximately 220 million dollars and the transaction includes the Izod, Van Heusen, Arrow and Geoffrey Beene brand trademarks and is expected to close in the third quarter of 2021.
Commenting on the development, Stefan Larsson, Chief Executive Officer, PVH Corp. said: “This transaction reflects our commitment to driving our next chapter of sustainable, profitable growth – focused on the Calvin Klein and Tommy Hilfiger brands, our international markets, driving product strength with increased pricing power and margin expansion, and winning in the marketplace through super-charging e-commerce.”
PVH updates revenue outlook following sale of Heritage Brands business
As a result of the transaction, PVH now projects that revenue for the full year 2021 will increase 22 percent to 24 percent or increase 19 percent to 21 percent on a constant currency basis as compared to 2020. The company’s prior guidance a projected increase in full year 2021 revenue of 24 percent to 26 percent or increase of 21 percent to 23 percent on a constant currency basis compared to 2020.
The company now is projecting earnings per share on a GAAP basis for the full year of approximately 6.60 dollars, which includes an estimated pre-tax net gain of approximately 100 million dollars as a result of the transaction. The company’s prior guidance for the full year earnings per share on a GAAP basis was approximately 5.50 dollars.
The company has reiterated its guidance for the second quarter of an increase of 34 percent to 36 percent or 29 percent to 31 percent on a constant currency basis compared to the prior year period. The company’s projected earnings per share on a GAAP basis of 79 cents to 82 cents for the second quarter is unchanged.
The company added that PVH will continue to own and operate the intimates and underwear businesses, led by Warner’s, as well as continue to operate the dress shirts and neckwear business. Centric Brands and United Legwear & Apparel Company have been granted licenses to operate parts of the Izod, Van Heusen and Arrow sportswear businesses.
The company also announced it intends to reinstate the dividend on its common stock.