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SEGMENT DATA
9 Months Ended
Oct. 28, 2012
Notes to Financial Statements [Abstract]  
SEGMENT DATA
SEGMENT DATA

The Company manages its operations through its operating divisions, which are aggregated into seven reportable segments: (i) Heritage Brand Wholesale Dress Furnishings; (ii) Heritage Brand Wholesale Sportswear; (iii) Heritage Brand Retail; (iv) Calvin Klein Licensing; (v) Tommy Hilfiger North America; (vi) Tommy Hilfiger International; and (vii) Other (Calvin Klein Apparel).

Heritage Brand Wholesale Dress Furnishings segment - This segment consists of the Company’s heritage brand wholesale dress furnishings division. This segment derives revenue primarily from marketing both dress shirts and neckwear in North America under the brand names Van Heusen, ARROW, IZOD, Kenneth Cole New York, Kenneth Cole Reaction, Sean John, Donald J. Trump Signature Collection, JOE Joseph Abboud, DKNY and MICHAEL Michael Kors, as well as dress shirts under the brand names Geoffrey Beene and Chaps. The Company markets these dress shirt and neckwear brands, as well as certain other owned and licensed brands and various private label brands, primarily to department, mid-tier department and specialty stores.

Heritage Brand Wholesale Sportswear segment - The Company aggregates the results of its heritage brand wholesale sportswear divisions into the Heritage Brand Wholesale Sportswear segment. This segment derives revenue primarily from marketing in North America men’s sportswear under the brand names Van Heusen, IZOD and ARROW to department, mid-tier department and specialty stores. This segment also derived revenue through the second quarter of 2012 from marketing men’s sportswear under the brand name Timberland and through the third quarter of 2012 from marketing women’s sportswear under the brand name IZOD.

Heritage Brand Retail segment - The Company aggregates the results of its three heritage brand retail divisions into the Heritage Brand Retail segment. This segment derives revenue principally from operating retail stores, primarily in outlet centers in North America, which sell apparel, footwear, accessories and related products under the brand names Van Heusen, IZOD, Bass and G.H. Bass & Co.

Calvin Klein Licensing segment - The Company aggregates the results of its Calvin Klein licensing and advertising division into the Calvin Klein Licensing segment. This segment derives revenue principally from licensing and similar arrangements worldwide relating to the use by third parties of the brand names Calvin Klein Collection, ck Calvin Klein and Calvin Klein for a broad array of products and retail services. This segment also derives revenue from the Company’s Calvin Klein Collection wholesale business and from selling Calvin Klein Collection branded high-end collection apparel and accessories through the Company’s own full price Calvin Klein Collection retail store located in New York City, both of which the Company operates directly in support of the global licensing business.

Tommy Hilfiger North America segment - The Company aggregates the results of its Tommy Hilfiger wholesale and retail divisions in North America into the Tommy Hilfiger North America segment. This segment derives revenue principally from (i) marketing Tommy Hilfiger branded apparel and related products at wholesale in North America, primarily to department stores; and (ii) operating retail stores and an e-commerce website in and for North America, which sell Tommy Hilfiger branded apparel, accessories and related products.

Tommy Hilfiger International segment - The Company aggregates the results of its Tommy Hilfiger wholesale and retail divisions that operate outside of North America and its proportionate share of the net income or loss of its investments in unconsolidated affiliates into the Tommy Hilfiger International segment. This segment derives revenue principally from (i) marketing Tommy Hilfiger branded apparel and related products at wholesale principally in Europe, primarily to department and specialty stores and franchise operators of Tommy Hilfiger stores, and through distributors and licensees; and (ii) operating retail stores in Europe and Japan, as well as operating an international e-commerce site, which sell Tommy Hilfiger branded apparel, accessories and related products.

Other (Calvin Klein Apparel) segment - The Company aggregates the results of its Calvin Klein apparel divisions into the Other (Calvin Klein Apparel) segment. This segment derives revenue principally in North America from the Company’s marketing at wholesale of apparel and related products under the brand name Calvin Klein, primarily to department, mid-tier department and specialty stores, and at retail through the Company’s e-commerce website and Calvin Klein retail stores, which are primarily located in outlet centers.


The following tables present summarized information by segment:
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
10/28/12
 
10/30/11
 
10/28/12
 
10/30/11
Revenue – Heritage Brand Wholesale Dress Furnishings
 
 
 
 
 
 
 
 
Net sales
 
$
155,436

 
$
163,173

 
$
380,889

 
$
421,633

Royalty revenue
 
1,314

 
1,681

 
4,146

 
4,634

Advertising and other revenue
 
620

 
496

 
2,157

 
1,314

Total
 
157,370

 
165,350

 
387,192

 
427,581

 
 
 
 
 
 
 
 
 
Revenue – Heritage Brand Wholesale Sportswear
 
 
 
 
 
 
 
 
Net sales
 
157,761

 
187,344

 
369,926

 
418,905

Royalty revenue
 
2,470

 
2,498

 
7,477

 
7,646

Advertising and other revenue
 
778

 
408

 
1,598

 
1,289

Total
 
161,009

 
190,250

 
379,001

 
427,840

 
 
 
 
 
 
 
 
 
Revenue – Heritage Brand Retail
 
 
 
 
 
 
 
 
Net sales
 
169,407

 
169,269

 
477,062

 
476,158

Royalty revenue
 
1,285

 
1,268

 
3,717

 
3,805

Advertising and other revenue
 
438

 
143

 
945

 
661

Total
 
171,130

 
170,680

 
481,724

 
480,624

 
 
 
 
 
 
 
 
 
Revenue – Calvin Klein Licensing
 
 
 
 
 
 
 
 
Net sales    
 
12,104

 
16,339

 
29,327

 
31,774

Royalty revenue
 
78,888

 
80,052

 
203,607

 
202,491

Advertising and other revenue
 
31,909

 
30,216

 
86,151

 
82,546

Total
 
122,901

 
126,607

 
319,085

 
316,811

 
 
 
 
 
 
 
 
 
Revenue – Tommy Hilfiger North America
 
 
 
 
 
 
 
 
Net sales
 
376,267

 
350,281

 
999,729

 
911,678

Royalty revenue
 
6,553

 
5,537

 
16,178

 
12,658

Advertising and other revenue
 
2,429

 
2,002

 
6,401

 
5,293

Total
 
385,249

 
357,820

 
1,022,308

 
929,629

 
 
 
 
 
 
 
 
 
Revenue – Tommy Hilfiger International
 
 
 
 
 
 
 
 
Net sales
 
433,721

 
456,456

 
1,263,066

 
1,272,088

Royalty revenue
 
13,434

 
11,505

 
36,792

 
30,318

Advertising and other revenue
 
1,210

 
860

 
3,719

 
2,923

Total
 
448,365

 
468,821

 
1,303,577

 
1,305,329

 
 
 
 
 
 
 
 
 
Revenue – Other (Calvin Klein Apparel)
 
 
 
 
 
 
 
 
Net sales
 
196,746

 
174,632

 
513,912

 
469,974

Total
 
196,746

 
174,632

 
513,912

 
469,974

 
 
 
 
 
 
 
 
 
Total Revenue
 
 
 
 
 
 
 
 
Net sales
 
1,501,442

 
1,517,494

 
4,033,911

 
4,002,210

Royalty revenue
 
103,944

 
102,541

 
271,917

 
261,552

Advertising and other revenue
 
37,384

 
34,125

 
100,971

 
94,026

Total
 
$
1,642,770

 
$
1,654,160

 
$
4,406,799

 
$
4,357,788


 
Thirteen Weeks Ended
 
 
Thirty-Nine Weeks Ended
 
 
10/28/12
 
 
10/30/11
(10) 
 
10/28/12

 
10/30/11
(10) 
Income before interest and taxes – Heritage Brand Wholesale Dress Furnishings
$
27,162

 
 
$
26,026

 
 
$
45,718

 
 
$
60,961

 
 
 
 
 
 
 
 
 
 
 
 
 
Income before interest and taxes – Heritage Brand Wholesale Sportswear
15,807

 
 
11,033

(5) 
 
31,380

 
 
20,100

(5) 
 
 
 
 
 
 
 
 
 
 
 
 
Income before interest and taxes – Heritage Brand Retail
4,409

 
 
8,535

 
 
11,223

 
 
28,224

 
 
 
 
 
 
 
 
 
 
 
 
 
Income before interest and taxes – Calvin Klein Licensing
62,350

 
 
59,271

 
 
148,408

 
 
137,862

 
 
 
 
 
 
 
 
 
 
 
 
 
Income before interest and taxes – Tommy Hilfiger North America
66,174

 
 
41,752

(6) 
 
147,801

(4) 
 
60,967

(8) 
 
 
 
 
 
 
 
 
 
 
 
 
Income before interest and taxes – Tommy Hilfiger International
62,583

(2) 
 
48,820

(6) (7) 
 
177,176

(4) 
 
165,475

(7) (8) 
 
 
 
 
 
 
 
 
 
 
 
 
Income before interest and taxes – Other (Calvin Klein Apparel)
30,073

 
 
26,898

 
 
62,584

 
 
69,955

 
 
 
 
 
 
 
 
 
 
 
 
 
Loss before interest and taxes – Corporate(1)    
(31,135
)
(2) (3) 
 
(25,493
)
(6) 
 
(84,961
)
(3) (4) 
 
(92,779
)
(8) (9) 
 
 
 
 
 
 
 
 
 
 
 
 
Income before interest and taxes
$
237,423

 
 
$
196,842

 
 
$
539,329

 
 
$
450,765

 

(1) 
Includes corporate expenses not allocated to any reportable segments. Corporate expenses represent overhead operating expenses and include expenses for senior corporate management, corporate finance, information technology related to corporate infrastructure and actuarial gains and losses from the Company’s defined benefit pension plans.

(2) 
Income (loss) before interest and taxes for the thirteen weeks ended October 28, 2012 includes costs of $6,561 associated with the Company’s integration of Tommy Hilfiger and the related restructuring. Such costs were included in the Company’s segments as follows: $6,301 in Tommy Hilfiger International and $260 in corporate expenses not allocated to any reportable segments.

(3) 
Loss before interest and taxes for the thirteen and thirty-nine weeks ended October 28, 2012 includes costs of $6,412 associated with the Company’s pending acquisition of The Warnaco Group, Inc. (“Warnaco”), which is expected to close in early 2013.

(4) 
Income (loss) before interest and taxes for the thirty-nine weeks ended October 28, 2012 includes costs of $14,418 associated with the Company’s integration of Tommy Hilfiger and the related restructuring. Such costs were included in the Company’s segments as follows: $379 in Tommy Hilfiger North America; $9,798 in Tommy Hilfiger International; and $4,241 in corporate expenses not allocated to any reportable segments.

(5) 
Income before interest and taxes for the thirteen and thirty-nine weeks ended October 30, 2011 includes costs of $502 and $7,152, respectively, related to the Company’s negotiated early termination of its license to market sportswear under the Timberland brand.

(6) 
Income (loss) before interest and taxes for the thirteen weeks ended October 30, 2011 includes costs of $9,264 associated with the Company’s integration of Tommy Hilfiger and the related restructuring. Such costs were included in the Company’s segments as follows: $3,421 in Tommy Hilfiger North America; $1,500 in Tommy Hilfiger International; and $4,343 in corporate expenses not allocated to any reportable segments.

(7) 
Income before interest and taxes for the thirteen and thirty-nine weeks ended October 30, 2011 includes a one-time expense of $20,709 recorded in connection with the Company’s reacquisition of the rights to the Tommy Hilfiger trademarks in India that had been subject to a perpetual license. Please refer to Note 3, “Acquisitions” for a further discussion.

(8) 
Income (loss) before interest and taxes for the thirty-nine weeks ended October 30, 2011 includes costs of $50,949 associated with the Company’s integration of Tommy Hilfiger and the related restructuring. Such costs were included in the Company’s segments as follows: $33,563 in Tommy Hilfiger North America; $1,948 in Tommy Hilfiger International; and $15,438 in corporate expenses not allocated to any reportable segments.

(9) 
Loss before interest and taxes for the thirty-nine weeks ended October 30, 2011 includes costs of $16,233 associated with the Company’s modification of its senior secured credit facility. Please refer to Note 7, “Debt,” for a further discussion.

(10) 
In the fourth quarter of 2011, the Company changed the way actuarial gains and losses from its defined benefit pension plans are allocated to its reportable segments. Actuarial gains and losses are now included as part of corporate expenses and are not allocated to any reportable segment. Prior periods have been restated in order to present that information on a basis consistent with the current year.

Intersegment transactions consist of transfers of inventory principally from the Heritage Brand Wholesale Dress Furnishings segment to the Heritage Brand Retail segment and Other (Calvin Klein Apparel) segment. These transfers are recorded at cost plus a standard markup percentage. Such markup percentage is eliminated principally in the Heritage Brand Retail segment and Other (Calvin Klein Apparel) segment.