Glossy – PVH Corporation, the company that owns Calvin Klein and Tommy Hilfiger, is adding an extra $20 million to its marketing budget for the holiday season, and the majority of that money will be spent on fostering its close relationship with Amazon.
In November, Calvin Klein announced that it would be selling its underwear exclusively with the retailer, cutting out other wholesale partners including Urban Outfitters and Macy’s, which is Calvin Klein’s largest retail distributor, according to CEO Emanuel Chirico. On top of the new partnership, Calvin Klein has teamed up with Amazon Fashion for two physical pop-up retail stores in New York and Los Angeles, themed around the brand’s “My Calvins” tag. The stores have Amazon Echo technology throughout, including inside fitting rooms, as well as customized product. Online, the brand has built a My Calvins storefront, where it’s selling denim alongside its underwear, with exclusive products and branded imagery with models like Karlie Kloss.
As the holiday shopping season is underway, PVH is increasing its marketing budget to drive sales, particularly through the Amazon partnership, as well as through updated store and online advertising imagery, focusing on its latest My Calvin campaign featuring Solange Knowles. The goal is to maintain momentum from the company’s third quarter of its financial 2017, which saw revenue increase 5 percent year over year. The latest results pushed the company’s predictions for year-end revenue to a 7 percent increase, up from a previous 6 percent prediction.
Calvin Klein revenue for the quarter increased 6 percent, to $943 million. The brand, under guidance by creative director Raf Simons, has seen a turnaround at the runway collection level, with the brand shifting away from its department store-brand status and back towards being an aspirational brand. But during the all-important holiday season, runway collections aren’t going to be the ones driving the most sales.
To turn quick sales over the holidays, an exclusive product strategy with a major retailer like Amazon is one way to do it, but there’s a lot in it for Amazon, too.
“Retail brands, like Calvin Klein, that partner with Amazon with exclusive products only available in Amazon pop-up stores or online are doing so to boost their revenues – very quickly,” said Ken Morris, principal at Boston Retail Partners. “While it is quite tempting from a sales impact, retailers need to be careful. If Amazon gains access to your customers and builds profiles for them, they are one step away from converting them to loyal Amazon fashion customers – disintermediating your brand.”