(Mark One) | ||
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the quarterly period ended | August 4, 2013 |
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||
For the transition period from | to |
PVH CORP. |
(Exact name of registrant as specified in its charter) |
Delaware | 13-1166910 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
200 Madison Avenue, New York, New York | 10016 | |
(Address of principal executive offices) | (Zip Code) |
(212) 381-3500 |
(Registrant’s telephone number, including area code) |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
August 4, | July 29, | August 4, | July 29, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net sales | $ | 1,884,439 | $ | 1,219,620 | $ | 3,707,484 | $ | 2,532,469 | |||||||
Royalty revenue | 62,561 | 82,513 | 129,628 | 167,973 | |||||||||||
Advertising and other revenue | 17,847 | 34,490 | 37,895 | 63,587 | |||||||||||
Total revenue | 1,964,847 | 1,336,623 | 3,875,007 | 2,764,029 | |||||||||||
Cost of goods sold | 938,759 | 593,962 | 1,897,058 | 1,264,539 | |||||||||||
Gross profit | 1,026,088 | 742,661 | 1,977,949 | 1,499,490 | |||||||||||
Selling, general and administrative expenses | 953,468 | 589,333 | 1,860,476 | 1,192,004 | |||||||||||
Debt modification and extinguishment costs | — | — | 40,395 | — | |||||||||||
Equity in income (loss) of unconsolidated affiliates, net | 813 | (74 | ) | 3,140 | 1,850 | ||||||||||
Income before interest and taxes | 73,433 | 153,254 | 80,218 | 309,336 | |||||||||||
Interest expense | 49,495 | 28,552 | 97,439 | 58,069 | |||||||||||
Interest income | 2,116 | 197 | 4,111 | 470 | |||||||||||
Income (loss) before taxes | 26,054 | 124,899 | (13,110 | ) | 251,737 | ||||||||||
Income tax expense | 41,963 | 34,981 | 22,812 | 66,343 | |||||||||||
Net (loss) income | $ | (15,909 | ) | $ | 89,918 | $ | (35,922 | ) | $ | 185,394 | |||||
Less: Net income attributable to redeemable non-controlling interest | 87 | — | 126 | — | |||||||||||
Net (loss) income attributable to PVH Corp. | $ | (15,996 | ) | $ | 89,918 | $ | (36,048 | ) | $ | 185,394 | |||||
Basic net (loss) income per common share attributable to PVH Corp. | $ | (0.20 | ) | $ | 1.24 | $ | (0.45 | ) | $ | 2.57 | |||||
Diluted net (loss) income per common share attributable to PVH Corp. | $ | (0.20 | ) | $ | 1.22 | $ | (0.45 | ) | $ | 2.52 | |||||
Dividends declared per common share | $ | 0.0375 | $ | 0.0000 | $ | 0.1125 | $ | 0.0750 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
August 4, | July 29, | August 4, | July 29, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net (loss) income | $ | (15,909 | ) | $ | 89,918 | $ | (35,922 | ) | $ | 185,394 | |||||
Other comprehensive (loss) income: | |||||||||||||||
Foreign currency translation adjustments, net of tax expense (benefit) of $107; $(690); $(330) and $(453) | (45,713 | ) | (150,188 | ) | (150,770 | ) | (133,187 | ) | |||||||
Amortization of prior service credit related to pension and postretirement plans, net of tax (benefit) of $(84); $(84); $(168) and $(168) | (135 | ) | (135 | ) | (271 | ) | (271 | ) | |||||||
Net unrealized and realized gain on effective hedges, net of tax expense (benefit) of $482; $(625); $(754) and $364 | 1,656 | 6,346 | 9,514 | 2,099 | |||||||||||
Comprehensive (loss) income | (60,101 | ) | (54,059 | ) | (177,449 | ) | 54,035 | ||||||||
Less: Comprehensive loss attributable to redeemable non-controlling interest | (1,771 | ) | — | (1,625 | ) | — | |||||||||
Total comprehensive (loss) income attributable to PVH Corp. | $ | (58,330 | ) | $ | (54,059 | ) | $ | (175,824 | ) | $ | 54,035 |
August 4, | February 3, | July 29, | |||||||||
2013 | 2013 | 2012 | |||||||||
UNAUDITED | AUDITED | UNAUDITED | |||||||||
ASSETS | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | 628,920 | $ | 892,209 | $ | 261,986 | |||||
Trade receivables, net of allowances for doubtful accounts of $22,121, $16,114 and $13,955 | 712,057 | 418,251 | 411,381 | ||||||||
Other receivables | 44,212 | 23,073 | 14,284 | ||||||||
Inventories, net | 1,348,598 | 878,415 | 909,447 | ||||||||
Prepaid expenses | 233,659 | 157,802 | 117,826 | ||||||||
Other, including deferred taxes of $88,189, $38,310 and $53,150 | 113,199 | 67,256 | 105,014 | ||||||||
Total Current Assets | 3,080,645 | 2,437,006 | 1,819,938 | ||||||||
Property, Plant and Equipment, net | 693,857 | 561,335 | 484,443 | ||||||||
Goodwill | 3,368,002 | 1,958,887 | 1,777,724 | ||||||||
Tradenames | 2,975,764 | 2,413,809 | 2,332,811 | ||||||||
Perpetual License Rights | 206,336 | — | — | ||||||||
Other Intangibles, net | 850,218 | 167,196 | 150,932 | ||||||||
Other Assets, including deferred taxes of $114,320, $61,465 and $5,315 | 339,924 | 243,316 | 165,640 | ||||||||
Total Assets | $ | 11,514,746 | $ | 7,781,549 | $ | 6,731,488 | |||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | 552,221 | $ | 377,231 | $ | 372,531 | |||||
Accrued expenses, including deferred taxes of $3,329, $0 and $0 | 755,326 | 646,130 | 554,078 | ||||||||
Deferred revenue | 29,208 | 40,239 | 41,972 | ||||||||
Short-term borrowings | 3,447 | 10,847 | 52,791 | ||||||||
Current portion of long-term debt | 85,000 | 88,000 | 88,021 | ||||||||
Total Current Liabilities | 1,425,202 | 1,162,447 | 1,109,393 | ||||||||
Long-Term Debt | 4,195,151 | 2,211,642 | 1,715,464 | ||||||||
Other Liabilities, including deferred taxes of $1,126,386, $589,796 and $501,858 | 1,841,033 | 1,154,891 | 1,125,803 | ||||||||
Redeemable Non-Controlling Interest | 5,600 | — | — | ||||||||
Stockholders’ Equity: | |||||||||||
Preferred stock, par value $100 per share; 150,000 total shares authorized | — | — | — | ||||||||
Series A convertible preferred stock, par value $100 per share; 0, 8,000 and 8,000 total shares authorized; 0, 0 and 4,000 shares issued and outstanding (with total liquidation preference of $0, $0 and $100,000) | — | — | 94,298 | ||||||||
Common stock, par value $1 per share; 240,000,000 shares authorized; 82,052,537; 73,324,491 and 70,951,932 shares issued | 82,053 | 73,324 | 70,952 | ||||||||
Additional paid in capital - common stock | 2,623,659 | 1,623,693 | 1,500,032 | ||||||||
Retained earnings | 1,398,797 | 1,445,673 | 1,202,722 | ||||||||
Accumulated other comprehensive income (loss) | 106 | 139,882 | (57,524 | ) | |||||||
Less: 478,934; 413,596 and 409,440 shares of common stock held in treasury, at cost | (56,855 | ) | (30,003 | ) | (29,652 | ) | |||||
Total Stockholders’ Equity | 4,047,760 | 3,252,569 | 2,780,828 | ||||||||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | $ | 11,514,746 | $ | 7,781,549 | $ | 6,731,488 |
Twenty-Six Weeks Ended | |||||||
August 4, | July 29, | ||||||
2013 | 2012 | ||||||
OPERATING ACTIVITIES | |||||||
Net (loss) income | $ | (35,922 | ) | $ | 185,394 | ||
Adjustments to reconcile to net cash provided by operating activities: | |||||||
Depreciation and amortization | 205,348 | 67,792 | |||||
Equity in income of unconsolidated affiliates, net | (3,140 | ) | (1,850 | ) | |||
Deferred taxes | (23,697 | ) | 15,906 | ||||
Stock-based compensation expense | 34,478 | 18,891 | |||||
Debt modification and extinguishment costs | 40,395 | — | |||||
Changes in operating assets and liabilities: | |||||||
Trade receivables, net | (14,276 | ) | 46,095 | ||||
Inventories, net | (34,010 | ) | (117,028 | ) | |||
Accounts payable, accrued expenses and deferred revenue | (145,871 | ) | 39,893 | ||||
Prepaid expenses | (28,923 | ) | (8,590 | ) | |||
Employer pension contributions | (30,000 | ) | (7,489 | ) | |||
Other, net | 97,659 | (31,716 | ) | ||||
Net cash provided by operating activities | 62,041 | 207,298 | |||||
INVESTING ACTIVITIES(1) | |||||||
Business acquisitions, net of cash acquired | (1,815,329 | ) | — | ||||
Purchase of property, plant and equipment | (105,571 | ) | (81,685 | ) | |||
Contingent purchase price payments | (26,734 | ) | (25,749 | ) | |||
Net cash used by investing activities | (1,947,634 | ) | (107,434 | ) | |||
FINANCING ACTIVITIES(1) | |||||||
Net proceeds from revolving credit facilities | 346 | 40,000 | |||||
Net payments on short-term borrowings | (34,673 | ) | (249 | ) | |||
Repayment of old credit facilities | (900,000 | ) | (89,680 | ) | |||
Repayment of new credit facilities | (181,688 | ) | — | ||||
Repayment of Warnaco’s previously outstanding debt | (197,000 | ) | — | ||||
Net proceeds from credit facilities | 2,993,430 | — | |||||
Payment of fees associated with issuance of senior notes | (16,257 | ) | — | ||||
Net proceeds from settlement of awards under stock plans | 24,256 | 4,377 | |||||
Excess tax benefits from awards under stock plans | 15,091 | 7,082 | |||||
Cash dividends | (9,203 | ) | (5,490 | ) | |||
Acquisition of treasury shares | (57,121 | ) | (13,633 | ) | |||
Payments of capital lease obligations | (4,655 | ) | (5,664 | ) | |||
Net cash provided (used) by financing activities | 1,632,526 | (63,257 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (10,222 | ) | (7,818 | ) | |||
(Decrease) increase in cash and cash equivalents | (263,289 | ) | 28,789 | ||||
Cash and cash equivalents at beginning of period | 892,209 | 233,197 | |||||
Cash and cash equivalents at end of period | $ | 628,920 | $ | 261,986 |
Cash | $ | 2,179,980 | ||
Common stock (7,674 shares, par value $1.00 per share) | 926,452 | |||
Warnaco employee replacement stock awards | 39,752 | |||
Elimination of pre-acquisition liability to Warnaco | (9,128 | ) | ||
Total fair value of the acquisition consideration | $ | 3,137,056 |
Pro Forma | Pro Forma | ||||||||||||||
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | ||||||||||||
Total revenue | $ | 1,964,847 | $ | 1,803,015 | $ | 3,938,037 | $ | 3,743,839 | |||||||
Net income attributable to PVH Corp. | 74,545 | 39,616 | 149,948 | 80,417 |
Cash and cash equivalents | $ | 364,651 | ||
Trade receivables | 290,964 | |||
Other receivables | 47,011 | |||
Inventories | 452,841 | |||
Prepaid expenses | 39,979 | |||
Other current assets | 60,626 | |||
Property, plant and equipment | 131,357 | |||
Goodwill | 1,451,479 | |||
Tradenames | 604,600 | |||
Perpetual license rights | 206,900 | |||
Other intangibles | 824,800 | |||
Other assets | 144,058 | |||
Total assets acquired | 4,619,266 | |||
Accounts payable | 179,931 | |||
Accrued expenses | 262,432 | |||
Short-term borrowings | 26,927 | |||
Current portion of long-term debt | 2,000 | |||
Long-term debt | 195,000 | |||
Other liabilities | 810,320 | |||
Total liabilities assumed | 1,476,610 | |||
Redeemable non-controlling interest | 5,600 | |||
Total fair value of acquisition consideration | $ | 3,137,056 |
Calvin Klein North America | Calvin Klein International | Tommy Hilfiger North America | Tommy Hilfiger International | Heritage Brands Wholesale | Total | ||||||||||||||||||
Balance as of February 3, 2013 | |||||||||||||||||||||||
Goodwill, gross | $ | 207,083 | $ | 201,542 | $ | 198,501 | $ | 1,196,619 | $ | 155,142 | $ | 1,958,887 | |||||||||||
Accumulated impairment losses | — | — | — | — | — | — | |||||||||||||||||
Goodwill, net | 207,083 | 201,542 | 198,501 | 1,196,619 | 155,142 | 1,958,887 | |||||||||||||||||
Contingent purchase price payments to Mr. Calvin Klein | 13,406 | 9,316 | — | — | — | 22,722 | |||||||||||||||||
Goodwill from acquisition of Warnaco | 443,419 | 878,786 | — | — | 129,274 | 1,451,479 | |||||||||||||||||
Currency translation | (1,930 | ) | (23,954 | ) | — | (38,715 | ) | (487 | ) | (65,086 | ) | ||||||||||||
Balance as of August 4, 2013 | |||||||||||||||||||||||
Goodwill, gross | 661,978 | 1,065,690 | 198,501 | 1,157,904 | 283,929 | 3,368,002 | |||||||||||||||||
Accumulated impairment losses | — | — | — | — | — | — | |||||||||||||||||
Goodwill, net | $ | 661,978 | $ | 1,065,690 | $ | 198,501 | $ | 1,157,904 | $ | 283,929 | $ | 3,368,002 |
8/4/13 | 2/3/13 | 7/29/12 | |||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||||||||||
Intangible assets subject to amortization: | |||||||||||||||||||||||||||||||||||
Customer relationships(1) | $ | 333,064 | $ | (54,411 | ) | $ | 278,653 | $ | 190,383 | $ | (41,158 | ) | $ | 149,225 | $ | 171,583 | $ | (35,213 | ) | $ | 136,370 | ||||||||||||||
Covenants not to compete | 2,220 | (2,220 | ) | — | 2,220 | (2,220 | ) | — | 2,220 | (2,190 | ) | 30 | |||||||||||||||||||||||
Order backlog(1) | 128,196 | (122,504 | ) | 5,692 | 32,287 | (32,287 | ) | — | 32,287 | (32,287 | ) | — | |||||||||||||||||||||||
Reacquired license rights(1) | 566,160 | (12,904 | ) | 553,256 | 8,565 | (3,636 | ) | 4,929 | 5,921 | (3,163 | ) | 2,758 | |||||||||||||||||||||||
Total intangible assets subject to amortization | 1,029,640 | (192,039 | ) | 837,601 | 233,455 | (79,301 | ) | 154,154 | 212,011 | (72,853 | ) | 139,158 | |||||||||||||||||||||||
Intangible assets not subject to amortization: | |||||||||||||||||||||||||||||||||||
Tradenames(1) | 2,975,764 | — | 2,975,764 | 2,413,809 | — | 2,413,809 | 2,332,811 | — | 2,332,811 | ||||||||||||||||||||||||||
Perpetual license rights(1) | 206,336 | — | 206,336 | — | — | — | — | — | — | ||||||||||||||||||||||||||
Reacquired perpetual license rights | 12,617 | — | 12,617 | 13,042 | — | 13,042 | 11,774 | — | 11,774 | ||||||||||||||||||||||||||
Total intangible assets not subject to amortization | 3,194,717 | — | 3,194,717 | 2,426,851 | — | 2,426,851 | 2,344,585 | — | 2,344,585 | ||||||||||||||||||||||||||
Total intangible assets | $ | 4,224,357 | $ | (192,039 | ) | $ | 4,032,318 | $ | 2,660,306 | $ | (79,301 | ) | $ | 2,581,005 | $ | 2,556,596 | $ | (72,853 | ) | $ | 2,483,743 |
Fiscal Year | Amount | |||
Remainder of 2013 | $ | 28,951 | ||
2014 | 44,823 | |||
2015 | 44,482 | |||
2016 | 44,482 | |||
2017 | 44,482 | |||
2018 | 44,482 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | ||||||||||||
Service cost, including plan expenses | $ | 4,823 | $ | 4,011 | $ | 9,420 | $ | 7,865 | |||||||
Interest cost | 6,528 | 4,530 | 13,067 | 8,986 | |||||||||||
Expected return on plan assets | (9,658 | ) | (5,254 | ) | (19,528 | ) | (10,476 | ) | |||||||
Amortization of prior service cost | 2 | 1 | 3 | 2 | |||||||||||
Total | $ | 1,695 | $ | 3,288 | $ | 2,962 | $ | 6,377 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | ||||||||||||
Service cost, including plan expenses | $ | 1,119 | $ | 814 | $ | 2,169 | $ | 1,787 | |||||||
Interest cost | 953 | 827 | 1,810 | 1,673 | |||||||||||
Amortization of prior service credit | (17 | ) | (16 | ) | (34 | ) | (33 | ) | |||||||
Total | $ | 2,055 | $ | 1,625 | $ | 3,945 | $ | 3,427 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | ||||||||||||
Service cost, including plan expenses | $ | 14 | $ | — | $ | 40 | $ | — | |||||||
Interest cost | 207 | 181 | 429 | 399 | |||||||||||
Amortization of prior service credit | (204 | ) | (204 | ) | (408 | ) | (408 | ) | |||||||
Total | $ | 17 | $ | (23 | ) | $ | 61 | $ | (9 | ) |
8/4/13 | 7/29/12 | ||||||
Senior secured term loan A facility due 2018 | $ | 1,672,297 | $ | — | |||
Senior secured term loan B facility due 2020 | 1,208,202 | — | |||||
4 1/2% senior unsecured notes | 700,000 | — | |||||
7 3/8% senior unsecured notes | 600,000 | 600,000 | |||||
7 3/4% debentures | 99,652 | 99,631 | |||||
Senior secured term loan A facility due 2016 - United States dollar-denominated | — | 592,000 | |||||
Senior secured term loan A facility due 2016 - Euro-denominated | — | 98,844 | |||||
Senior secured term loan B facility due 2016 - United States dollar-denominated | — | 395,000 | |||||
Senior secured term loan B facility due 2016 - Euro-denominated | — | 18,010 | |||||
Total | 4,280,151 | 1,803,485 | |||||
Less: Current portion of long-term debt | 85,000 | 88,021 | |||||
Long-term debt | $ | 4,195,151 | $ | 1,715,464 |
Remainder of 2013 | $ | 42,500 | |
2014 | 85,000 | ||
2015 | 116,875 | ||
2016 | 159,375 | ||
2017 | 170,000 | ||
2018 | 1,105,000 |
• | incur or guarantee additional debt or extend credit; |
• | make restricted payments, including paying dividends or making distributions on, or redeeming or repurchasing, the Company’s capital stock or certain debt; |
• | make acquisitions and investments; |
• | dispose of assets; |
• | engage in transactions with affiliates; |
• | enter into agreements restricting the Company’s subsidiaries’ ability to pay dividends; |
• | create liens on the Company’s assets or engage in sale/leaseback transactions; and |
• | effect a consolidation or merger, or sell, transfer, or lease all or substantially all of the Company’s assets. |
Asset Derivatives (Classified in Other Current Assets and Other Assets) | Liability Derivatives (Classified in Accrued Expenses and Other Liabilities) | ||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | ||||||||||||
Contracts designated as cash flow hedges: | |||||||||||||||
Foreign currency forward exchange contracts (inventory purchases) | $ | 1,432 | $ | 18,828 | $ | 4,231 | $ | 866 | |||||||
Interest rate contracts | 4,110 | 45 | 8,097 | 6,729 | |||||||||||
Total contracts designated as cash flow hedges | 5,542 | 18,873 | 12,328 | 7,595 | |||||||||||
Undesignated contracts: | |||||||||||||||
Foreign currency forward exchange contracts (inventory purchases) | 282 | — | 109 | 538 | |||||||||||
Foreign currency forward exchange contracts (intercompany loans) | 396 | — | 767 | 111 | |||||||||||
Total undesignated contracts | 678 | — | 876 | 649 | |||||||||||
Total | $ | 6,220 | $ | 18,873 | $ | 13,204 | $ | 8,244 |
Gain (Loss) Recognized in Other Comprehensive (Loss) Income (Effective Portion) | (Loss) Gain Reclassified from AOCI into (Expense) Income (Effective Portion) | ||||||||||||||||
Location | Amount | ||||||||||||||||
Thirteen Weeks Ended | 8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | |||||||||||||
Foreign currency forward exchange contracts (inventory purchases) | $ | 1,732 | $ | 6,592 | Cost of goods sold | $ | (280 | ) | $ | 1,007 | |||||||
Interest rate contracts | (897 | ) | (962 | ) | Interest expense | (1,023 | ) | (1,098 | ) | ||||||||
Total | $ | 835 | $ | 5,630 | $ | (1,303 | ) | $ | (91 | ) | |||||||
Twenty-Six Weeks Ended | 8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | |||||||||||||
Foreign currency forward exchange contracts (inventory purchases) | $ | 10,590 | $ | 4,916 | Cost of goods sold | $ | 2,901 | $ | 3,631 | ||||||||
Interest rate contracts | (1,106 | ) | (1,002 | ) | Interest expense | (2,177 | ) | (2,180 | ) | ||||||||
Total | $ | 9,484 | $ | 3,914 | $ | 724 | $ | 1,451 |
Gain (Loss) Recognized in Income | |||||||||
Thirteen Weeks Ended | Location | 8/4/13 | 7/29/12 | ||||||
Foreign currency forward exchange contracts (inventory purchases) | Selling, general and administrative expenses | $ | 661 | $ | (190 | ) | |||
Foreign currency forward exchange contracts (intercompany loans) | Selling, general and administrative expenses | (285 | ) | (1,224 | ) | ||||
Twenty-Six Weeks Ended | Location | 8/4/13 | 7/29/12 | ||||||
Foreign currency forward exchange contracts (inventory purchases) | Selling, general and administrative expenses | $ | 349 | $ | 679 | ||||
Foreign currency forward exchange contracts (intercompany loans) | Selling, general and administrative expenses | (38 | ) | (1,224 | ) |
8/4/13 | 2/3/13 | 7/29/12 | |||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||
Foreign currency forward exchange contracts | N/A | $ | 2,110 | N/A | $ | 2,110 | N/A | $ | 4,693 | N/A | $ | 4,693 | N/A | $ | 18,828 | N/A | $ | 18,828 | |||||||||||||||||||||||
Interest rate contracts | N/A | 4,110 | N/A | 4,110 | N/A | N/A | N/A | N/A | N/A | 45 | N/A | 45 | |||||||||||||||||||||||||||||
Total Assets | N/A | $ | 6,220 | N/A | $ | 6,220 | N/A | $ | 4,693 | N/A | $ | 4,693 | N/A | $ | 18,873 | N/A | $ | 18,873 | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||
Foreign currency forward exchange contracts | N/A | $ | 5,107 | N/A | $ | 5,107 | N/A | $ | 13,460 | N/A | $ | 13,460 | N/A | $ | 1,515 | N/A | $ | 1,515 | |||||||||||||||||||||||
Interest rate contracts | N/A | 8,097 | N/A | 8,097 | N/A | 5,058 | N/A | 5,058 | N/A | 6,729 | N/A | 6,729 | |||||||||||||||||||||||||||||
Contingent purchase price payments related to reacquisition of the perpetual rights to the Tommy Hilfiger trademarks in India | N/A | N/A | $ | 6,649 | 6,649 | N/A | N/A | $ | 7,003 | 7,003 | N/A | N/A | $ | 9,021 | 9,021 | ||||||||||||||||||||||||||
Total Liabilities | N/A | $ | 13,204 | $ | 6,649 | $ | 19,853 | N/A | $ | 18,518 | $ | 7,003 | $ | 25,521 | N/A | $ | 8,244 | $ | 9,021 | $ | 17,265 |
Twenty-Six Weeks Ended | |||||||
8/4/13 | 7/29/12 | ||||||
Beginning Balance | $ | 7,003 | $ | 9,559 | |||
Payments | — | — | |||||
Adjustments included in earnings | (354 | ) | (538 | ) | |||
Ending Balance | $ | 6,649 | $ | 9,021 |
Unobservable Inputs | Amount | ||
Approximate compounded annual net sales growth rate | 45.0 | % | |
Approximate discount rate | 20.0 | % |
8/4/13 | 2/3/13 | 7/29/12 | |||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||
Cash and cash equivalents | $ | 628,920 | $ | 628,920 | $ | 892,209 | $ | 892,209 | $ | 261,986 | $ | 261,986 | |||||||||||
Short-term borrowings | 3,447 | 3,447 | 10,847 | 10,847 | 52,791 | 52,791 | |||||||||||||||||
Long-term debt (including portion classified as current) | 4,280,151 | 4,358,547 | 2,299,642 | 2,398,200 | 1,803,485 | 1,886,289 |
Twenty-Six Weeks Ended | |||||||
8/4/13 | 7/29/12 | ||||||
Weighted average risk-free interest rate | 1.05 | % | 1.20 | % | |||
Weighted average expected option term (in years) | 6.22 | 6.25 | |||||
Weighted average Company volatility | 45.20 | % | 45.16 | % | |||
Expected annual dividends per share | $ | 0.15 | $ | 0.15 | |||
Weighted average grant date fair value per option | $ | 51.51 | $ | 40.59 |
Twenty-Six Weeks Ended | |||
8/4/13 | |||
Weighted average risk-free interest rate | 0.24 | % | |
Weighted average expected option term (in years) | 1.70 | ||
Weighted average Company volatility | 29.40 | % | |
Expected annual dividends per share | $ | 0.15 | |
Weighted average grant date fair value per option | $ | 40.60 |
Options | Weighted Average Price Per Option | |||||
Outstanding at February 3, 2013 | 1,958 | $ | 44.17 | |||
Replacement of Warnaco awards | 443 | 86.26 | ||||
Granted | 182 | 117.03 | ||||
Exercised | 381 | 64.43 | ||||
Cancelled | 12 | 93.60 | ||||
Outstanding at August 4, 2013 | 2,190 | $ | 54.95 | |||
Exercisable at August 4, 2013 | 1,511 | $ | 42.83 |
RSUs | Weighted Average Grant Date Fair Value | |||||
Non-vested at February 3, 2013 | 660 | $ | 62.24 | |||
Replacement of Warnaco awards | 120 | 120.72 | ||||
Granted | 234 | 119.06 | ||||
Vested | 244 | 61.24 | ||||
Cancelled | 24 | 79.78 | ||||
Non-vested at August 4, 2013 | 746 | $ | 89.25 |
Restricted Stock | Weighted Average Grant Date Fair Value | |||||
Non-vested at February 3, 2013 | — | $ | — | |||
Replacement of Warnaco awards | 271 | 120.72 | ||||
Granted | — | — | ||||
Vested | 174 | 120.72 | ||||
Cancelled | 8 | 120.72 | ||||
Non-vested at August 4, 2013 | 89 | $ | 120.72 |
Twenty-Six Weeks Ended | |||
8/4/13 | |||
Risk-free interest rate | 0.34 | % | |
Expected Company volatility | 38.67 | % | |
Expected annual dividends per share | $ | 0.15 | |
Grant date fair value per performance share unit | $ | 123.27 |
Performance Shares | Weighted Average Grant Date Fair Value | |||||
Non-vested at February 3, 2013 | 594 | $ | 57.08 | |||
Granted | 920 | 122.57 | ||||
Vested | 498 | 51.07 | ||||
Cancelled | 36 | 122.45 | ||||
Non-vested at August 4, 2013 | 980 | $ | 119.26 |
Foreign currency translation adjustments | Retirement liability adjustment | Net unrealized and realized (loss) gain on effective hedges | Total | ||||||||||||
Balance at February 3, 2013 | $ | 153,648 | $ | 1,552 | $ | (15,318 | ) | $ | 139,882 | ||||||
Other comprehensive (loss) income before reclassifications | (149,019 | ) | — | 9,503 | (139,516 | ) | |||||||||
Less: Amounts reclassified from AOCI | — | 271 | (11 | ) | 260 | ||||||||||
Other comprehensive (loss) income | (149,019 | ) | (271 | ) | 9,514 | (139,776 | ) | ||||||||
Balance at August 4, 2013 | $ | 4,629 | $ | 1,281 | $ | (5,804 | ) | $ | 106 |
Amount Reclassified from AOCI | Affected Line Item in the Consolidated Income Statements | |||||||
Thirteen Weeks Ended 8/4/13 | Twenty-Six Weeks Ended 8/4/13 | |||||||
Realized (loss) gain on effective hedges | ||||||||
Foreign currency forward exchange contracts | $ | (280 | ) | $ | 2,901 | Cost of goods sold | ||
Interest rate contracts | (1,023 | ) | (2,177 | ) | Interest expense | |||
Less: Tax effect | (391 | ) | 735 | Income tax expense | ||||
Total, net of tax | $ | (912 | ) | $ | (11 | ) | ||
Amortization of retirement liability items | ||||||||
Prior service credit | $ | 219 | $ | 439 | Selling, general and administrative expenses | |||
Less: Tax effect | 84 | 168 | Income tax expense | |||||
Total, net of tax | $ | 135 | $ | 271 |
Total Expected to be Incurred | Incurred During the Thirteen Weeks Ended 8/4/13 | Incurred During the Twenty-Six Weeks Ended 8/4/13 | Liability at 8/4/13 | ||||||||||||
Severance, termination benefits and other costs | $ | 175,000 | $ | 40,839 | $ | 97,952 | $ | 44,130 | |||||||
Inventory liquidation costs | 30,000 | — | 30,000 | 5,035 | |||||||||||
Lease/contract termination and related costs | 50,000 | 3,289 | 3,880 | 1,373 | |||||||||||
Total | $ | 255,000 | $ | 44,128 | $ | 131,832 | $ | 50,538 |
Liability at 2/3/13 | Costs Incurred During the Twenty-Six Weeks Ended 8/4/13 | Costs Paid During the Twenty-Six Weeks Ended 8/4/13 | Liability at 8/4/13 | ||||||||||||
Severance, termination benefits and other costs | $ | 763 | $ | — | $ | 422 | $ | 341 | |||||||
Lease/contract termination and related costs | 2,013 | — | 847 | 1,166 | |||||||||||
Total | $ | 2,776 | $ | — | $ | 1,269 | $ | 1,507 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | ||||||||||||
Net (loss) income attributable to PVH Corp. | $ | (15,996 | ) | $ | 89,918 | $ | (36,048 | ) | $ | 185,394 | |||||
Less: | |||||||||||||||
Common stock dividends paid to holders of Series A convertible preferred stock | — | — | — | (209 | ) | ||||||||||
Allocation of income to Series A convertible preferred stock | — | (2,591 | ) | — | (6,936 | ) | |||||||||
Net (loss) income available to common stockholders for basic net (loss) income per common share | (15,996 | ) | 87,327 | (36,048 | ) | 178,249 | |||||||||
Add back: | |||||||||||||||
Common stock dividends paid to holders of Series A convertible preferred stock | — | — | — | 209 | |||||||||||
Allocation of income to Series A convertible preferred stock | — | 2,591 | — | 6,936 | |||||||||||
Net (loss) income available to common stockholders for diluted net (loss) income per common share | $ | (15,996 | ) | $ | 89,918 | $ | (36,048 | ) | $ | 185,394 | |||||
Weighted average common shares outstanding for basic net (loss) income per common share | 81,337 | 70,403 | 80,653 | 69,471 | |||||||||||
Weighted average impact of dilutive securities | — | 1,105 | — | 1,346 | |||||||||||
Weighted average impact of assumed convertible preferred stock conversion | — | 2,095 | — | 2,785 | |||||||||||
Total shares for diluted net (loss) income per common share | 81,337 | 73,603 | 80,653 | 73,602 | |||||||||||
Basic net (loss) income per common share attributable to PVH Corp. | $ | (0.20 | ) | $ | 1.24 | $ | (0.45 | ) | $ | 2.57 | |||||
Diluted net (loss) income per common share attributable to PVH Corp. | $ | (0.20 | ) | $ | 1.22 | $ | (0.45 | ) | $ | 2.52 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | ||||
Weighted average potentially dilutive securities | 3,913 | 466 | 3,799 | 360 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | |||||||||||||
Revenue – Calvin Klein North America | ||||||||||||||||
Net sales | $ | 332,119 | $ | 150,546 | $ | 625,459 | $ | 312,520 | ||||||||
Royalty revenue | 22,610 | 28,891 | 48,026 | 60,199 | ||||||||||||
Advertising and other revenue | 8,024 | 14,201 | 16,719 | 26,075 | ||||||||||||
Total | 362,753 | 193,638 | 690,204 | 398,794 | ||||||||||||
Revenue – Calvin Klein International | ||||||||||||||||
Net sales | 286,152 | 12,124 | 541,340 | (1 | ) | 21,869 | ||||||||||
Royalty revenue | 15,796 | 30,355 | 34,149 | 64,520 | ||||||||||||
Advertising and other revenue | 5,884 | 15,114 | 12,750 | 28,167 | ||||||||||||
Total | 307,832 | 57,593 | 588,239 | 114,556 | ||||||||||||
Revenue – Tommy Hilfiger North America | ||||||||||||||||
Net sales | 357,081 | 324,482 | 694,757 | 623,462 | ||||||||||||
Royalty revenue | 6,034 | 5,101 | 12,524 | 9,625 | ||||||||||||
Advertising and other revenue | 1,748 | 2,285 | 4,206 | 3,972 | ||||||||||||
Total | 364,863 | 331,868 | 711,487 | 637,059 | ||||||||||||
Revenue – Tommy Hilfiger International | ||||||||||||||||
Net sales | 420,485 | 375,495 | 872,271 | 829,345 | ||||||||||||
Royalty revenue | 12,810 | 13,078 | 24,563 | 23,358 | ||||||||||||
Advertising and other revenue | 1,138 | 1,465 | 2,352 | 2,509 | ||||||||||||
Total | 434,433 | 390,038 | 899,186 | 855,212 | ||||||||||||
Revenue – Heritage Brands Wholesale | ||||||||||||||||
Net sales | 328,540 | 183,500 | 683,109 | 437,618 | ||||||||||||
Royalty revenue | 4,158 | 3,859 | 8,150 | 7,839 | ||||||||||||
Advertising and other revenue | 762 | 1,189 | 1,366 | 2,357 | ||||||||||||
Total | 333,460 | 188,548 | 692,625 | 447,814 | ||||||||||||
Revenue – Heritage Brands Retail | ||||||||||||||||
Net sales | 160,062 | 173,473 | 290,548 | 307,655 | ||||||||||||
Royalty revenue | 1,153 | 1,229 | 2,216 | 2,432 | ||||||||||||
Advertising and other revenue | 291 | 236 | 502 | 507 | ||||||||||||
Total | 161,506 | 174,938 | 293,266 | 310,594 | ||||||||||||
Total Revenue | ||||||||||||||||
Net sales | 1,884,439 | 1,219,620 | 3,707,484 | 2,532,469 | ||||||||||||
Royalty revenue | 62,561 | 82,513 | 129,628 | 167,973 | ||||||||||||
Advertising and other revenue | 17,847 | 34,490 | 37,895 | 63,587 | ||||||||||||
Total | $ | 1,964,847 | $ | 1,336,623 | $ | 3,875,007 | $ | 2,764,029 |
(1) | Includes $30,000 of sales returns for certain Warnaco wholesale customers in Asia in connection with the Company’s initiative to reduce excess inventory levels. |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | ||||||||||||||||
Income before interest and taxes – Calvin Klein North America | $ | 39,496 | (2) | $ | 36,412 | $ | 51,934 | (3) | $ | 72,490 | |||||||||
(Loss) income before interest and taxes – Calvin Klein International | (56,878 | ) | (2) | 23,777 | (105,032 | ) | (3) | 46,003 | |||||||||||
Income before interest and taxes – Tommy Hilfiger North America | 61,960 | 52,636 | 107,970 | 81,513 | (6) | ||||||||||||||
Income before interest and taxes – Tommy Hilfiger International | 37,859 | 41,113 | (5) | 110,001 | 114,593 | (6) | |||||||||||||
Income before interest and taxes – Heritage Brands Wholesale | 29,149 | (2) | 13,797 | 57,504 | (3) | 34,037 | |||||||||||||
Income (loss) before interest and taxes – Heritage Brands Retail | 4,013 | 9,306 | (2,790 | ) | 6,710 | ||||||||||||||
Loss before interest and taxes – Corporate(1) | (42,166 | ) | (2) | (23,787 | ) | (5) | (139,369 | ) | (3)(4) | (46,010 | ) | (6) | |||||||
Income before interest and taxes | $ | 73,433 | $ | 153,254 | $ | 80,218 | $ | 309,336 |
(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 pension and other postretirement plans. |
(2) | Income (loss) before interest and taxes for the thirteen weeks ended August 4, 2013 includes costs of $139,886 associated with the Company’s acquisition and integration of Warnaco and the related restructuring. Such costs were included in the Company’s segments as follows: $27,632 in Calvin Klein North America; $85,008 in Calvin Klein International; $11,247 in Heritage Brands Wholesale and $15,999 in corporate expenses not allocated to any reportable segments. |
(3) | Income (loss) before interest and taxes for the twenty-six weeks ended August 4, 2013 includes costs of $333,993 associated with the Company’s acquisition and integration of Warnaco and the related restructuring. Such costs were included in the Company’s segments as follows: $68,734 in Calvin Klein North America; $185,468 in Calvin Klein International; $28,770 in Heritage Brands Wholesale and $51,021 in corporate expenses not allocated to any reportable segments. |
(4) | Loss before interest and taxes for the twenty-six weeks ended August 4, 2013 includes costs of $40,395 associated with the Company’s debt modification and extinguishment. Please refer to Note 8, “Debt,” for a further discussion. |
(5) | Income (loss) before interest and taxes for the thirteen weeks ended July 29, 2012 includes costs of $4,541 associated with the Company’s integration of Tommy Hilfiger and the related restructuring. Such costs were included in the Company’s segments as follows: $3,497 in Tommy Hilfiger International and $1,044 in corporate expenses not allocated to any reportable segments. |
(6) | Income (loss) before interest and taxes for the twenty-six weeks ended July 29, 2012 includes costs of $7,857 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; $3,497 in Tommy Hilfiger International and $3,981 in corporate expenses not allocated to any reportable segments. |
Identifiable Assets | 8/4/13 | 2/3/13 | 7/29/12 | |||||||||
Calvin Klein North America | $ | 1,907,589 | $ | 752,029 | $ | 719,391 | ||||||
Calvin Klein International | 3,182,654 | 584,860 | 578,037 | |||||||||
Tommy Hilfiger North America | 1,220,896 | 1,137,404 | 1,139,287 | |||||||||
Tommy Hilfiger International | 3,209,996 | 3,278,813 | 2,981,087 | |||||||||
Heritage Brands Wholesale | 1,370,895 | 555,544 | 568,847 | |||||||||
Heritage Brands Retail | 206,313 | 175,717 | 185,756 | |||||||||
Corporate(1) | 416,403 | 1,297,182 | 559,083 | |||||||||
Total | $ | 11,514,746 | $ | 7,781,549 | $ | 6,731,488 |
References to the brand names Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, ARROW, G.H. Bass & Co., Warner’s, Olga and Speedo and to other brand names are to registered trademarks owned by us or licensed to us by third parties and are identified by italicizing the brand name. References to the acquisition of Warnaco refer to our February 13, 2013 acquisition of The Warnaco Group, Inc. and its subsidiaries, which we refer to collectively as “Warnaco.” References to the acquisition of Tommy Hilfiger refer to our May 6, 2010 acquisition of Tommy Hilfiger B.V. and certain affiliated companies, which we refer to collectively as “Tommy Hilfiger.” |
• | The aggregate addition of $456 million of net sales in our Calvin Klein North America and Calvin Klein International segments. The newly-acquired Calvin Klein businesses contributed $411 million of this increase. In addition, comparable store sales within our Calvin Klein North America retail business increased 6%, while our pre-acquisition Calvin Klein North America wholesale sportswear business experienced strong double-digit growth. Comparable store sales within the Calvin Klein International segment (which relate to newly acquired businesses) decreased 1%. The Calvin Klein businesses in China and Brazil continued to exhibit strong momentum, and the Korea business showed some improvement over first quarter trends. The Calvin Klein European business remained under pressure, as the jeans business is in transition and continues to be weak in Spain and Italy, where it is primarily concentrated. In addition, wholesale revenue in Europe decreased as we continued to rationalize our wholesale distribution to focus on accounts that we view as brand-enhancing and more creditworthy. |
• | The aggregate addition of $78 million of net sales attributable to growth in our Tommy Hilfiger North America and Tommy Hilfiger International segments. Within the Tommy Hilfiger North America segment, net sales increased 10%, principally driven by retail comparable store sales growth of 7% and retail square footage expansion. Net sales in the |
• | The aggregate addition of $132 million of net sales in our Heritage Brands Wholesale and Heritage Brands Retail segments, driven by the net impact of: (i) the addition of $131 million of net sales in our Heritage Brands Wholesale segment attributed to Warnaco’s Speedo swim product and Warner’s and Olga women’s intimate apparel businesses; (ii) strength in the wholesale dress furnishings and Van Heusen and Izod men’s wholesale sportswear businesses; (iii) a 10% decrease in retail comparable store sales due in large part to the continued soft performance of the Bass retail business; and (iv) a negative impact of $8 million resulting from the 2012 exit from the Izod women’s and Timberland wholesale sportswear businesses. |
• | The aggregate addition of $832 million of net sales in our Calvin Klein North America and Calvin Klein International segments. The newly acquired Calvin Klein businesses contributed $807 million of this increase. In addition, our Calvin Klein North America retail business experienced a 5% increase in comparable store sales and our pre-acquisition Calvin Klein North America wholesale sportswear business had a double-digit increase in net sales. With respect to the Warnaco Calvin Klein jeans and underwear businesses, strength in China and Latin America was partially offset by continued weakness in Korea. The Calvin Klein European business remained under pressure, as the jeans business is in transition and continues to be weak in Spain and Italy, where it is primarily concentrated. Wholesale revenue in Europe decreased as we continued to rationalize our wholesale distribution to focus on accounts that we view as brand-enhancing and more creditworthy. In addition, net sales in the Calvin Klein International segment in the current year include a reduction of $30 million due to sales returns for certain Warnaco wholesale customers in Asia in connection with an initiative to reduce excess inventory levels. |
• | The aggregate addition of $114 million of net sales attributable to growth in our Tommy Hilfiger North America and Tommy Hilfiger International segments. Within the Tommy Hilfiger North America segment, net sales increased 11%, principally driven by comparable store sales growth of 6% and retail square footage expansion, combined with strong first quarter performance in the North America wholesale business. Net sales in the Tommy Hilfiger International segment increased 5% as compared to the prior year’s first half, driven by European retail comparable store sales growth of 5% and retail square footage expansion, partially offset by a revenue decline in Japan, where our efforts to strategically reposition the brand are continuing. |
• | The aggregate addition of $228 million of net sales in our Heritage Brands Wholesale and Heritage Brands Retail segments, driven by the net impact of: (i) the addition of $257 million of net sales in our Heritage Brands Wholesale |
(in millions) | August 4, 2013 | February 3, 2013 | July 29, 2012 | ||||||||
Short-term borrowings | $ | 3 | $ | 11 | $ | 53 | |||||
Current portion of long-term debt | 85 | 88 | 88 | ||||||||
Capital lease obligations | 27 | 31 | 35 | ||||||||
Long-term debt | 4,195 | 2,212 | 1,715 | ||||||||
Stockholders’ equity | 4,048 | 3,253 | 2,781 |
• | incur or guarantee additional debt or extend credit; |
• | make restricted payments, including paying dividends or making distributions on, or redeeming or repurchasing, our capital stock or certain debt; |
• | make acquisitions and investments; |
• | dispose of assets; |
• | engage in transactions with affiliates; |
• | enter into agreements restricting our subsidiaries’ ability to pay dividends; |
• | create liens on our assets or engage in sale/leaseback transactions; and |
• | effect a consolidation or merger, or sell, transfer, or lease all or substantially all of our assets. |
Period | (a) Total Number of Shares (or Units) Purchased(1) | (b) Average Price Paid per Share (or Unit)(1) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||||
May 6, 2013 | ||||||||||||
June 2, 2013 | 2,472 | $ | 110.21 | — | — | |||||||
June 3, 2013 | ||||||||||||
July 7, 2013 | 299,794 | 120.86 | — | — | ||||||||
July 8, 2013 | ||||||||||||
August 4, 2013 | 3,829 | 127.00 | — | — | ||||||||
Total | 306,095 | $ | 120.85 | — | — |
The following exhibits are included herein: | |||
3.1 | Certificate of Incorporation (incorporated by reference to Exhibit 5 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 1977); Amendment to Certificate of Incorporation, filed June 27, 1984 (incorporated by reference to Exhibit 3B to the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 1985); Amendment to Certificate of Incorporation, filed June 2, 1987 (incorporated by reference to Exhibit 3(c) to the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1988); Amendment to Certificate of Incorporation, filed June 1, 1993 (incorporated by reference to Exhibit 3.5 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 1994); Amendment to Certificate of Incorporation, filed June 20, 1996 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the period ended July 28, 1996); Certificate of Amendment of Certificate of Incorporation, filed June 29, 2006 (incorporated by reference to Exhibit 3.9 to the Company’s Quarterly Report on Form 10-Q for the period ended May 6, 2007); Certificate of Amendment of Certificate of Incorporation, filed June 23, 2011 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on June 29, 2011). | ||
3.2 | Certificate of Designation of Series A Cumulative Participating Preferred Stock, filed on June 10, 1986 (incorporated by reference to Exhibit A of the document filed as Exhibit 3 to the Company’s Quarterly Report on Form 10-Q for the period ended May 4, 1986). | ||
3.3 | Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock of Phillips-Van Heusen Corporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on February 26, 2003); Corrected Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock of Phillips-Van Heusen Corporation, dated as of April 17, 2003 (incorporated by reference to Exhibit 3.9 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2003). | ||
3.4 | Certificate Eliminating Reference to Series B Convertible Preferred Stock From Certificate of Incorporation of Phillips-Van Heusen Corporation, filed on June 12, 2007 (incorporated by reference to Exhibit 3.10 to the Company’s Quarterly Report on Form 10-Q for the period ended May 6, 2007). | ||
3.5 | Certificate Eliminating Reference to Series A Cumulative Participating Preferred Stock From Certificate of Incorporation of Phillips-Van Heusen Corporation (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed on September 28, 2007). | ||
3.6 | Certificate of Designations of Series A Convertible Preferred Stock of Phillips-Van Heusen Corporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on May 12, 2010). | ||
3.7 | By-Laws of Phillips-Van Heusen Corporation, as amended through February 2, 2012 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on February 3, 2012). | ||
3.8 | Certificate Eliminating Reference to Series A Convertible Preferred Stock From Certificate of Incorporation of PVH Corp. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on May 3, 2013). | ||
4.1 | Specimen of Common Stock certificate (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the period ended July 31, 2011). | ||
4.2 | Indenture, dated as of November 1, 1993, between Phillips-Van Heusen Corporation and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.01 to the Company’s Registration Statement on Form S-3 (Reg. No. 33-50751) filed on October 26, 1993); First Supplemental Indenture, dated as of October 17, 2002 to Indenture dated as of November 1, 1993 between Phillips-Van Heusen Corporation and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.15 to the Company’s Quarterly Report on Form 10-Q for the period ended November 3, 2002); Second Supplemental Indenture, dated as of February 12, 2002 to Indenture, dated as of November 1, 1993, between Phillips-Van Heusen Corporation and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on February 26, 2003); Third Supplemental Indenture, dated as of May 6, 2010, between Phillips-Van Heusen Corporation and The Bank of New York Mellon (formerly known as The Bank of New York), as Trustee (incorporated by reference to Exhibit 4.16 to the Company’s Quarterly Report on Form 10-Q for the period ended August 1, 2010). | ||
4.3 | Securities Purchase Agreement, dated as of March 15, 2010, by and among Phillips-Van Heusen Corporation, LNK Partners, L.P. and LNK Partners (Parallel), L.P. (incorporated by reference to Exhibit 4.10 to the Company’s Quarterly Report on Form 10-Q for the period ended May 2, 2010). | ||
4.4 | Securities Purchase Agreement, dated as of March 15, 2010, by and between Phillips-Van Heusen Corporation and MSD Brand Investments, LLC (incorporated by reference to Exhibit 4.11 to the Company’s Quarterly Report on Form 10-Q for the period ended May 2, 2010). | ||
4.5 | Stockholders Agreement, dated as of May 6, 2010, by and among Phillips-Van Heusen Corporation, LNK Partners, L.P. and LNK Partners (Parallel), L.P. (incorporated by reference to Exhibit 4.13 to the Company’s Quarterly Report on Form 10-Q for the period ended August 1, 2010). | ||
4.6 | Stockholder Agreement, dated as of May 6, 2010, by and between Phillips-Van Heusen Corporation and MSD Brand Investments, LLC. (incorporated by reference to Exhibit 4.14 to the Company’s Quarterly Report on Form 10-Q for the period ended August 1, 2010). | ||
4.7 | Indenture, dated as of May 6, 2010, between Phillips-Van Heusen Corporation and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.15 to the Company’s Quarterly Report on Form 10-Q for the period ended August 1, 2010). | ||
4.8 | First Supplemental Indenture, dated as of November 8, 2012, to Indenture dated as of May 6, 2010, between PVH Corp. (formerly known as “Phillips-Van Heusen Corporation”) and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.9 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2013). | ||
4.9 | Indenture, dated as of December 20, 2012, between PVH Corp. and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K, filed on December 20, 2012). | ||
4.10 | Fourth Supplemental Indenture, dated as of February 13, 2013 to Indenture, dated as of November 1, 1993, between PVH Corp. and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.11 to the Company’s Quarterly Report on Form 10-Q for the period ended May 5, 2013). | ||
10.1 | PVH Corp. Performance Incentive Bonus Plan, as amended and restated effective May 2, 2013 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed June 26, 2013). | ||
10.2 | PVH Corp. Long-Term Incentive Plan, as amended and restated effective May 2, 2013 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed June 26, 2013). | ||
+10.3 | Third Amended and Restated Employment Agreement, dated as of July 1, 2013, between Calvin Klein, Inc. and Paul Thomas Murry. | ||
+10.4 | Amended and Restated Employment Agreement, dated as of July 23, 2013, between PVH B.V. and Fred Gehring. |
+31.1 | Certification of Emanuel Chirico, Chairman and Chief Executive Officer, pursuant to Section 302 of the Sarbanes – Oxley Act of 2002. | ||
+31.2 | Certification of Michael Shaffer, Executive Vice President and Chief Operating & Financial Officer, pursuant to Section 302 of the Sarbanes – Oxley Act of 2002. | ||
*,+32.1 | Certification of Emanuel Chirico, Chairman and Chief Executive Officer, pursuant to Section 906 of the Sarbanes – Oxley Act of 2002, 18 U.S.C. Section 1350. | ||
*,+32.2 | Certification of Michael Shaffer, Executive Vice President and Chief Operating & Financial Officer, pursuant to Section 906 of the Sarbanes – Oxley Act of 2002, 18 U.S.C. Section 1350. | ||
+101.INS | XBRL Instance Document | ||
+101.SCH | XBRL Taxonomy Extension Schema Document | ||
+101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||
+101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||
+101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||
+101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||
+Filed or furnished herewith. |
PVH CORP. | |
Registrant |
Dated: | September 12, 2013 | /s/ Bruce Goldstein |
Bruce Goldstein | ||
Senior Vice President and Controller (Chief Accounting Officer) |
10.3 | Third Amended and Restated Employment Agreement, dated as of July 1, 2013, between Calvin Klein, Inc. and Paul Thomas Murry. |
10.4 | Amended and Restated Employment Agreement, dated as of July 23, 2013, between PVH B.V. and Fred Gehring. |
31.1 | Certification of Emanuel Chirico, Chairman and Chief Executive Officer, pursuant to Section 302 of the Sarbanes – Oxley Act of 2002. |
31.2 | Certification of Michael Shaffer, Executive Vice President and Chief Operating & Financial Officer, pursuant to Section 302 of the Sarbanes – Oxley Act of 2002. |
32.1 | Certification of Emanuel Chirico, Chairman and Chief Executive Officer, pursuant to Section 906 of the Sarbanes – Oxley Act of 2002, 18 U.S.C. Section 1350. |
32.2 | Certification of Michael Shaffer, Executive Vice President and Chief Operating & Financial Officer, pursuant to Section 906 of the Sarbanes – Oxley Act of 2002, 18 U.S.C. Section 1350. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
CALVIN KLEIN, INC. | |
By: | /s/ Mark D. Fischer |
Name: | Mark D. Fischer |
Title: | Executive Vice President |
/s/ Paul Thomas Murry | |
Paul Thomas Murry |
If to the Company at: |
PVH Corp. |
200 Madison Avenue |
New York, New York 10016 |
Attention: Chairman |
With a copy to: |
PVH Corp. |
200 Madison Avenue |
New York, New York 10016 |
Attention: Senior Vice President, General Counsel |
1. | I have reviewed this Quarterly Report on Form 10-Q of PVH Corp.; |
2. | Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and |
d) | Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: | September 12, 2013 | /s/ EMANUEL CHIRICO |
Emanuel Chirico | ||
Chairman and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of PVH Corp.; |
2. | Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and |
d) | Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: | September 12, 2013 | /s/ MICHAEL SHAFFER |
Michael Shaffer | ||
Executive Vice President and Chief Operating & Financial Officer |
(i) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | September 12, 2013 | |
By: | /s/ EMANUEL CHIRICO | |
Name: | Emanuel Chirico | |
Chairman and Chief Executive Officer |
(i) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | September 12, 2013 | |
By: | /s/ MICHAEL SHAFFER | |
Name: | Michael Shaffer Executive Vice President and Chief Operating & Financial Officer |
DERIVATIVE FINANCIAL INSTRUMENTS
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Notes to Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company has exposure to changes in foreign currency exchange rates related to certain anticipated cash flows associated with certain international inventory purchases. In addition, the Company has exposure to changes in foreign currency exchange rates on certain intercompany loans. To help manage these exposures, the Company periodically uses foreign currency forward exchange contracts. The Company also has exposure to interest rate volatility related to its senior secured term loan facilities. The Company has entered into interest rate swap agreements to hedge against this exposure. Please see Note 8, “Debt,” for a further discussion of the Company’s senior secured term loan facilities and these agreements. The Company had also entered into an interest rate cap agreement, which expired on September 6, 2012. The Company records the foreign currency forward exchange contracts and interest rate contracts at fair value in its Consolidated Balance Sheets. Changes in fair value of the foreign currency forward exchange contracts associated with certain international inventory purchases and the interest rate contracts (collectively referred to as “cash flow hedges”) that are designated as effective hedging instruments are recorded in equity as a component of accumulated other comprehensive income (loss) (“AOCI”). The cash flows from such hedges are presented in the same category on the Consolidated Statements of Cash Flows as the items being hedged. Any ineffectiveness in such cash flow hedges is immediately recognized in earnings and no contracts were excluded from effectiveness testing. In addition, changes in the fair value of foreign currency forward exchange contracts that are not designated as effective hedging instruments are immediately recognized in earnings, including the changes in fair value of all of the foreign exchange contracts related to intercompany loans which are not of a long-term investment nature. Any gains and losses that are immediately recognized in earnings on such contracts related to intercompany loans are largely offset by the remeasurement of the underlying intercompany loan balances. The Company does not use derivative financial instruments for trading or speculative purposes. The following table summarizes the fair value and presentation in the Consolidated Balance Sheets for the Company’s derivative financial instruments:
At August 4, 2013, the notional amount outstanding of foreign currency forward exchange contracts for inventory purchases and intercompany loans was approximately $422,000 and $80,000, respectively. Such contracts expire principally between August 2013 and August 2014 for inventory purchases and between August 2013 and January 2014 for intercompany loans. The following table summarizes the effect of the Company’s hedges designated as cash flow hedging instruments:
There was no ineffective portion of hedges designated as cash flow hedging instruments during the twenty-six weeks ended August 4, 2013 and July 29, 2012. A net loss in AOCI on foreign currency forward exchange contracts at August 4, 2013 of $2,413 is estimated to be reclassified in the next 12 months in the Consolidated Income Statements to costs of goods sold as the underlying inventory is purchased and sold. In addition, a net loss in AOCI for interest rate contracts at August 4, 2013 of $6,601 is estimated to be reclassified to interest expense within the next 12 months. The following table summarizes the effect of the Company’s foreign currency forward exchange contracts that were not designated as cash flow hedges:
The Company had no derivative financial instruments with credit risk related contingent features underlying the related contracts as of August 4, 2013. |
DEBT DEBT Asia Revolving Credit Facility (Details) (Line of credit, Asia facility [Member], USD $)
In Thousands, unless otherwise specified |
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Aug. 04, 2013
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Line of credit, Asia facility [Member]
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Line of Credit Facility [Line Items] | |
Line of credit facility, maximum borrowing capacity | $ 10,000 |
Debt instrument, basis spread on variable rate | 1.75% |
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)
In Thousands, unless otherwise specified |
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Jul. 29, 2012
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Aug. 04, 2013
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Jul. 29, 2012
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Foreign currency translation adjustments, tax expense (benefit) | $ 107 | $ (690) | $ (330) | $ (453) |
Amortization of prior service credit related to pension and postretirement plans, tax (benefit) | (84) | (84) | (168) | (168) |
Net unrealized and realized gain on effective hedges, tax expense (benefit) | $ 482 | $ (625) | $ (754) | $ 364 |
ACQUISITIONS
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ACQUISITIONS | ACQUISITIONS Acquisition of Warnaco The Company acquired on February 13, 2013 all of the outstanding equity interests in Warnaco. The results of Warnaco’s operations since that date have been included in the Company’s consolidated financial statements. Warnaco designs, sources, markets and distributes a broad line of intimate apparel, sportswear and swim products worldwide. Warnaco’s products are sold under the Calvin Klein, Speedo, Warner’s and Olga brand names and were also previously sold under the Chaps brand name. Ralph Lauren Corporation reacquired the Chaps license effective contemporaneously with the Company’s acquisition of Warnaco. The Warnaco acquisition provided the Company with direct global control of the Calvin Klein brand image and commercial decisions for the two largest Calvin Klein apparel categories—jeanswear and underwear. In addition, the Company believes the acquisition takes advantage of its and Warnaco’s complementary geographic platforms. Warnaco’s operations in Asia and Latin America should enhance the Company’s opportunities in those high-growth regions, and the Company will have the ability to leverage its expertise and infrastructure in North America and Europe to enhance the growth and profitability of the Calvin Klein jeanswear and underwear businesses in those regions. Fair Value of the Acquisition Consideration The acquisition date fair value of the acquisition consideration paid at closing totaled $3,137,056, which consisted of the following:
The fair value of the 7,674 common shares issued was equal to the aggregate value of the shares at the closing market price of the Company’s common stock on February 12, 2013, the day prior to the closing. The value of the replacement stock awards was determined by multiplying the estimated fair value of the Warnaco awards outstanding at the time of the acquisition, reduced by an estimated value of awards to be forfeited, by the proportionate amount of the vesting period that had lapsed as of the acquisition date. Also included in the acquisition consideration was the elimination of a $9,128 pre-acquisition liability to Warnaco. The Company funded the cash portion and related costs of the Warnaco acquisition, repaid all outstanding borrowings under its previously outstanding senior secured credit facilities and repaid all of Warnaco’s previously outstanding long-term debt with the net proceeds of (i) the issuance of $700,000 of 4 1/2% senior notes due 2022; and (ii) the borrowing of $3,075,000 of term loans under new senior secured credit facilities. Please see Note 6, “Goodwill and Other Intangible Assets,” Note 8, “Debt,” Note 12, “Stock-Based Compensation,” and Note 14, “Stockholders’ Equity,” for a further discussion of these aspects of the acquisition. The Company incurred certain pre-tax costs directly associated with the acquisition, including short-lived non-cash valuation adjustments and amortization, totaling approximately $185,000, of which approximately $43,000 was recorded in fiscal 2012 and approximately $142,000 was recorded during the twenty-six weeks ended August 4, 2013. Please see Note 15, “Activity Exit Costs,” for a discussion of restructuring costs incurred during the twenty-six weeks ended August 4, 2013 associated with the acquisition. The operations acquired with Warnaco had total revenue of $1,027,878 and a net loss, after non-cash valuation adjustments and amortization and integration costs, of $(62,727) for the period from the date of acquisition through August 4, 2013. These amounts are included in the Company’s results of operations for the twenty-six week period then ended. Pro Forma Impact of the Transaction The following table presents the Company’s pro forma consolidated results of operations for the thirteen and twenty-six weeks ended August 4, 2013 and July 29, 2012, as if the acquisition and the related financing transactions had occurred on January 30, 2012 (the first day of its fiscal year ended February 3, 2013) instead of on February 13, 2013. The pro forma results were calculated applying the Company’s accounting policies and reflect (i) the impact on revenue, cost of goods sold and selling, general and administrative expenses resulting from the elimination of intercompany transactions; (ii) the impact on depreciation and amortization expense based on fair value adjustments to Warnaco’s property, plant and equipment and intangible assets recorded in connection with the acquisition; (iii) the impact on interest expense resulting from changes to the Company’s capital structure in connection with the acquisition; (iv) the impact on cost of goods sold resulting from acquisition date adjustments to the fair value of inventory; (v) the elimination of transaction costs related to the acquisition that were included in the Company’s results of operations for the thirteen and twenty-six weeks ended August 4, 2013; and (vi) the tax effects of the above adjustments. The pro forma results do not include any anticipated cost synergies or other effects of the planned integration of Warnaco. Accordingly, such pro forma amounts are not indicative of the results that actually would have occurred had the acquisition been completed on January 30, 2012, nor are they indicative of the future operating results of the combined company.
Allocation of the Acquisition Consideration The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
The Company is still in the process of valuing the assets acquired and liabilities assumed; thus, the allocation of the acquisition consideration is subject to change. In connection with the acquisition, the Company recorded goodwill of $1,451,479, which was assigned to the Company’s Calvin Klein North America, Calvin Klein International and Heritage Brands Wholesale segments in the amounts of $443,419, $878,786 and $129,274, respectively. None of the goodwill is expected to be deductible for tax purposes. The Company also recorded other intangible assets of $1,636,300, which included reacquired license rights of $578,000, order backlog of $97,000 and customer relationships of $149,800, which are all amortizable, as well as tradenames of $604,600 and perpetual license rights of $206,900, which have indefinite lives. |
NONCASH INVESTING AND FINANCING TRANSACTIONS
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6 Months Ended |
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Aug. 04, 2013
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|
Notes to Financial Statements [Abstract] | |
NONCASH INVESTING AND FINANCING TRANSACTIONS | NONCASH INVESTING AND FINANCING TRANSACTIONS During the twenty-six weeks ended August 4, 2013 and July 29, 2012, the Company recorded increases to goodwill of $22,722 and $22,226, respectively, related to liabilities incurred for contingent purchase price payments to Mr. Calvin Klein. Such amounts are not due or paid in cash until 45 days subsequent to the Company’s applicable quarter end. As such, during the twenty-six weeks ended August 4, 2013 and July 29, 2012, the Company paid $26,734 and $25,749, respectively, in cash related to contingent purchase price payments to Mr. Calvin Klein that were recorded as additions to goodwill during the periods the liabilities were incurred. During the first quarter of 2013, the Company issued 7,674 shares of its common stock, par value $1.00 per share (of which 416 shares were issued from treasury stock), as part of the consideration paid to the former stockholders of Warnaco in connection with the acquisition, which resulted in an increase in common stock of $7,258, an increase in additional paid in capital of $888,925 and a decrease in treasury stock of $30,269. In addition, the Company issued awards valued at $39,752 to replace outstanding stock awards made by Warnaco to its employees, which for accounting purposes are included in the total acquisition consideration. Also included in the acquisition consideration was the elimination of a $9,128 pre-acquisition liability to Warnaco. During the first quarter of 2013, the Company recorded a loss of $5,757 to write-off previously capitalized debt issuance costs in connection with the modification and extinguishment of its previously outstanding senior secured credit facilities. During the first quarter of 2012, one of the holders of the Company’s Series A convertible preferred stock converted an aggregate of 4 shares into 2,095 shares of the Company’s common stock, resulting in a decrease in Series A convertible preferred stock of $94,297, an increase in common stock of $2,095, and an increase in additional paid in capital of $92,202. The remaining shares of Series A convertible preferred stock were converted into the Company’s common stock during the fourth quarter of 2012. Please see Note 14, “Stockholders’ Equity.” Omitted from purchases of property, plant and equipment in the Consolidated Statement of Cash Flows for the twenty-six weeks ended August 4, 2013 and July 29, 2012 are $2,663 and $13,480, respectively, of assets acquired through capital leases. |
DEBT Schedule of Long Term Debt Instruments (Details)
In Thousands, unless otherwise specified |
0 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 13, 2013
USD ($)
|
Aug. 04, 2013
USD ($)
|
May 05, 2013
USD ($)
|
Feb. 03, 2013
USD ($)
|
Jul. 29, 2012
USD ($)
|
Aug. 04, 2013
USD ($)
|
Jul. 29, 2012
USD ($)
|
Feb. 03, 2013
USD ($)
|
Aug. 01, 2010
USD ($)
|
Jun. 06, 2011
Interest Rate Swap [Member]
USD ($)
|
Feb. 13, 2013
Term loan A facility Warnaco [Member]
USD ($)
|
Feb. 13, 2013
Term loan B facility Warnaco [Member]
USD ($)
|
Feb. 13, 2013
Current Outstanding Senior Secured Credit Facilities [Member]
USD ($)
|
Aug. 04, 2013
Current Outstanding Senior Secured Credit Facilities [Member]
Interest Rate Swap [Member]
USD ($)
|
Feb. 13, 2013
Previously Outstanding Senior Secured Credit Facilities Due 2016 [Member]
USD ($)
|
Mar. 02, 2011
Previously Outstanding Senior Secured Credit Facilities Due 2016 [Member]
USD ($)
|
Aug. 04, 2013
Previously Outstanding Senior Secured Credit Facilities Due 2016 [Member]
Interest Rate Swap [Member]
USD ($)
|
Aug. 04, 2013
7 3/4% debentures [Member]
USD ($)
|
Feb. 13, 2013
United States of America, Dollars
USD ($)
|
Feb. 13, 2013
United States of America, Dollars
Term loan A facility Warnaco [Member]
USD ($)
|
Feb. 13, 2013
United States of America, Dollars
Term loan B facility Warnaco [Member]
USD ($)
|
Aug. 04, 2013
United States of America, Dollars
Term loan B facility Warnaco [Member]
Eurocurrency rate loan [Member]
Minimum [Member]
|
Aug. 04, 2013
United States of America, Dollars
Term loan B facility Warnaco [Member]
One month adjusted Eurocurrency rate loan [Member]
Minimum [Member]
|
Feb. 13, 2013
United States Dollars and Canadian Dollars [Member]
USD ($)
|
Feb. 03, 2013
United States Dollars and Canadian Dollars [Member]
|
Feb. 13, 2013
Euro Member Countries, Euro
EUR (€)
|
Feb. 03, 2013
Multi-currency [Member]
|
Aug. 04, 2013
Line of Credit [Member]
United States of America, Dollars
Unites States federal fund rate [Member]
|
Aug. 04, 2013
Line of Credit [Member]
United States of America, Dollars
One month adjusted Eurocurrency rate loan [Member]
|
Aug. 04, 2013
Line of Credit [Member]
Canadian dollars [Member]
|
Feb. 13, 2013
Term Loan [Member]
USD ($)
|
Aug. 04, 2013
Term Loan [Member]
United States of America, Dollars
Term loan A facility Warnaco [Member]
Base rate loan [Member]
|
Aug. 04, 2013
Term Loan [Member]
United States of America, Dollars
Term loan A facility Warnaco [Member]
Eurocurrency rate loan [Member]
|
Aug. 04, 2013
Term Loan [Member]
United States of America, Dollars
Term loan B facility Warnaco [Member]
Base rate loan [Member]
|
Aug. 04, 2013
Term Loan [Member]
United States of America, Dollars
Term loan B facility Warnaco [Member]
Eurocurrency rate loan [Member]
|
Feb. 13, 2013
Senior notes [Member]
USD ($)
|
Aug. 04, 2013
Senior notes [Member]
4 1/2% senior notes [Member]
|
Aug. 04, 2013
Senior notes [Member]
7 3/8% senior notes [Member]
|
Feb. 13, 2013
Warnaco acquisition [Member]
USD ($)
|
|
Senior Secured Credit Facilities [Abstract] | |||||||||||||||||||||||||||||||||||||||
Amended facility, overall maximum borrowing capacity | $ 1,970,000 | ||||||||||||||||||||||||||||||||||||||
Amended facility, maximum borrowing capacity, term loans | 1,520,000 | ||||||||||||||||||||||||||||||||||||||
Number of revolving credit facilities | 1 | 2 | |||||||||||||||||||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | 750,000 | 450,000 | 475,000 | 25,000 | 185,850 | ||||||||||||||||||||||||||||||||||
Proceeds from issuance of long-term debt | 700,000 | 700,000 | 1,700,000 | 1,375,000 | 3,075 | ||||||||||||||||||||||||||||||||||
Original issue discount | 7,325 | 6,875 | |||||||||||||||||||||||||||||||||||||
Payments of financing costs | 67,370 | ||||||||||||||||||||||||||||||||||||||
Debt modification and extinguishment costs | 0 | 0 | 40,395 | 0 | 34,638 | ||||||||||||||||||||||||||||||||||
Deferred debt issuance costs | 5,757 | 5,757 | |||||||||||||||||||||||||||||||||||||
Letters of credit outstanding, amount | 79,105 | 79,105 | |||||||||||||||||||||||||||||||||||||
Term loan facility increase, maximum | 750,000 | ||||||||||||||||||||||||||||||||||||||
Term loan facility increase, maximum ratio | 1,250,000 | ||||||||||||||||||||||||||||||||||||||
Total outstanding senior secured credit facility | 2,880,499 | 2,880,499 | |||||||||||||||||||||||||||||||||||||
Debt instrument, basis spread on variable rate | 0.50% | 1.00% | 1.00% | 2.00% | 1.50% | 2.50% | |||||||||||||||||||||||||||||||||
Debt instrument, interest rate, stated percentage | 4.50% | 4.50% | 7.75% | 0.75% | 1.75% | 0.75% | 4.50% | 7.375% | |||||||||||||||||||||||||||||||
Notional amount outstanding of foreign currency forward exchange contracts | 632,000 | 1,228,750 | 436,608 | ||||||||||||||||||||||||||||||||||||
Derivative, fixed interest rate | 0.604% | 1.197% | |||||||||||||||||||||||||||||||||||||
Payment of fees associated with issuance of senior notes | 16,257 | 0 | 32,732 | 16,257 | |||||||||||||||||||||||||||||||||||
Gross proceeds from issuance of long-term debt | 600,000 | ||||||||||||||||||||||||||||||||||||||
Maximum redemption percentage | 35.00% | ||||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 100,000 | ||||||||||||||||||||||||||||||||||||||
Debt instrument, yield to maturity | 7.80% | ||||||||||||||||||||||||||||||||||||||
Derivative agreement term | 3 years | 3 years | |||||||||||||||||||||||||||||||||||||
Carry forward period revolving credit facility | 1 month | ||||||||||||||||||||||||||||||||||||||
Cost of funds index rate period | 3 months | ||||||||||||||||||||||||||||||||||||||
Carry forward period borrowings maximum | 1 year | ||||||||||||||||||||||||||||||||||||||
Won-denominated short term credit facility lender | 1 |
FAIR VALUE MEASUREMENTS
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Aug. 04, 2013
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Notes to Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS FASB guidance for fair value measurements defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a three level hierarchy that prioritizes the inputs used to measure fair value. The three levels of the hierarchy are defined as follows: Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 – Observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data. Level 3 – Unobservable inputs reflecting the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability based on the best information available. In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial assets and liabilities that are required to be remeasured at fair value on a recurring basis:
The fair value of the foreign currency forward exchange contracts is measured as the total amount of currency to be purchased, multiplied by the difference between (i) the forward rate as of the period end and (ii) the settlement rate specified in each contract. The fair values of the interest rate contracts are based on observable interest rate yield curves and represent the expected discounted cash flows underlying the financial instruments. Pursuant to the agreement governing the reacquisition of the rights in India to the Tommy Hilfiger trademarks, the Company is required to make annual contingent purchase price payments based on a percentage of annual sales in excess of an agreed upon threshold of Tommy Hilfiger products in India for a period of five years (or, under certain circumstances, a period of six years) following the acquisition date. Such payments are subject to a $25,000 aggregate maximum and are due within 60 days following each one-year period. The first one-year period commenced on July 1, 2011. During the third quarter of 2012, the Company made a contingent purchase price payment of $185 for the first one-year period. The Company is required to remeasure this liability at fair value on a recurring basis and classifies this as a Level 3 measurement. The fair value of such contingent purchase price payments was determined using the discounted cash flow method, based on net sales projections for the Tommy Hilfiger apparel and accessories businesses in India, and was discounted using rates of return that account for the relative risks of the estimated future cash flows. Excluding the initial recognition of the liability for the contingent purchase price payments and payments made to reduce the liability, changes in the fair value are included within selling, general and administrative expenses. The following table presents the change in the Level 3 contingent purchase price payment liability for the twenty-six weeks ended August 4, 2013 and July 29, 2012:
Additional information with respect to assumptions used to value the contingent purchase price payment liability is as follows:
A five percentage point increase or decrease in the discount rate would change the liability by approximately $1,000. A five percentage point increase or decrease in the compounded annual net sales growth rate would change the liability by approximately $1,000. There were no transfers between any levels of the fair value hierarchy for any of the Company’s fair value measurements. There were no material non-financial assets or liabilities that were required to be remeasured at fair value on a non-recurring basis during the twenty-six weeks ended August 4, 2013 and July 29, 2012. The carrying amounts and the fair values of the Company’s cash and cash equivalents, short-term borrowings and long-term debt as of August 4, 2013, February 3, 2013 and July 29, 2012 were as follows:
The fair values of cash and cash equivalents and short-term borrowings approximate their carrying values due to the short-term nature of these instruments. The Company estimates the fair value of its long-term debt using quoted market prices as of the last business day of the applicable quarter. The Company classifies the measurement of its long-term debt as a Level 1 measurement. |
DEBT Schedule of Mandatory Long-Term Debt Repayments (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 03, 2013
|
Aug. 04, 2013
|
Jul. 29, 2012
|
Feb. 03, 2013
|
Aug. 04, 2013
7 3/4% debentures [Member]
|
Aug. 04, 2013
Senior notes [Member]
7 3/8% senior notes [Member]
|
Aug. 04, 2013
United States dollar-denominated
|
Jul. 29, 2012
United States dollar-denominated
|
Feb. 13, 2013
United States dollar-denominated
Term loan A facility Warnaco [Member]
|
Feb. 13, 2013
United States dollar-denominated
Term loan B facility Warnaco [Member]
|
Aug. 04, 2013
Euro-denominated
|
Jul. 29, 2012
Euro-denominated
|
|
Debt Instrument [Line Items] | ||||||||||||
Mandatory Long Term Debt Repayment Remainder of 2013 | $ 42,500 | |||||||||||
Mandatory Long Term Debt Repayment 2014 | 85,000 | |||||||||||
Mandatory Long Term Debt Repayment 2015 | 116,875 | |||||||||||
Mandatory Long Term Debt Repayment 2016 | 159,375 | |||||||||||
Mandatory Long Term Debt Repayment 2017 | 170,000 | |||||||||||
Mandatory Long Term Debt Repayment 2018 | 1,105,000 | |||||||||||
Proceeds from issuance of long-term debt | 700,000 | 700,000 | 1,700,000 | 1,375,000 | ||||||||
Total debt percentage bearing fixed interest rates | 45.00% | |||||||||||
Total debt percentage bearing fixed interest rates due to swap agreement | 0 | |||||||||||
Senior secured term loan A facility due 2018 | 1,672,297 | 0 | ||||||||||
Senior secured term loan B facility due 2020 | 1,208,202 | 0 | ||||||||||
4 1/2% senior unsecured notes | 700,000 | 0 | ||||||||||
7 3/8% senior unsecured notes | 600,000 | 600,000 | ||||||||||
7 3/4% debentures | 99,652 | 99,631 | ||||||||||
Senior secured term loan A facility due 2016 - United States dollar-denominated | 0 | 592,000 | 0 | 98,844 | ||||||||
Senior secured term loan B facility due 2016 - United States dollar-denominated | 0 | 395,000 | 0 | 18,010 | ||||||||
Total | 4,280,151 | 1,803,485 | ||||||||||
Less: Current portion of long-term debt | 88,000 | 85,000 | 88,021 | 88,000 | ||||||||
Long-Term Debt | 2,211,642 | 4,195,151 | 1,715,464 | 2,211,642 | ||||||||
Debt instrument, interest rate, stated percentage | 4.50% | 7.75% | 7.375% | |||||||||
Maturities of Long-term Debt [Abstract] | ||||||||||||
Repayment of long term debt | $ 181,688 | $ 89,680 |
NET (LOSS) INCOME PER COMMON SHARE (Tables)
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Aug. 04, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The Company computed its basic and diluted net (loss) income per common share as follows:
|
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Potentially dilutive securities excluded from the calculation of diluted net (loss) income per common share were as follows:
|
RECENT ACCOUNTING GUIDANCE
|
6 Months Ended |
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Aug. 04, 2013
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Notes to Financial Statements [Abstract] | |
RECENT ACCOUNTING GUIDANCE | RECENT ACCOUNTING GUIDANCE The FASB issued in February 2013 guidance that requires an entity to provide information about significant amounts reclassified out of AOCI. For amounts that are required to be reclassified in their entirety to net income in the same reporting period, an entity must report the amounts by component and their corresponding effect on the respective line items of net income. Such information is required to be presented either on the face of the financial statements or as a separate disclosure in the footnotes to the financial statements. For other amounts that are not required to be reclassified to net income in their entirety, an entity is required to cross-reference to other disclosures. The Company adopted this guidance during the first quarter of 2013 and elected to present a separate disclosure in the Notes to Consolidated Financial Statements. The adoption did not have any impact on the Company’s consolidated results of operations or financial position. The FASB issued in March 2013 guidance that requires an entity to release any related cumulative translation adjustment into net income when it ceases to have a controlling financial interest in a subsidiary that is a foreign entity if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity. For an equity method investment that is a foreign entity, a pro rata portion of the cumulative translation adjustment related to the investment should be released into net income upon a partial sale of such investment. This guidance becomes effective for the Company in the first quarter of 2014. The adoption is not expected to have a material impact on the Company’s consolidated results of operations or financial position. The FASB issued in July 2013 guidance that requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward. However, to the extent (i) a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or (ii) the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. This guidance becomes effective prospectively for the Company in the first quarter of 2014. The adoption is not expected to have any impact on the Company’s consolidated results of operations or financial position. |
GUARANTEES
|
6 Months Ended |
---|---|
Aug. 04, 2013
|
|
Guarantees [Abstract] | |
GUARANTEES | GUARANTEES The Company guaranteed to a landlord the payment of rent and related costs by the tenant currently occupying space previously leased by the Company. The maximum amount guaranteed as of August 4, 2013 is approximately $3,600, which is subject to exchange rate fluctuation. The Company has the right to seek recourse of approximately $2,300 as of August 4, 2013, which is subject to exchange rate fluctuation. The guarantee expires on May 19, 2016. The Company has certain other guarantees whereby it guaranteed the payment of amounts on behalf of certain other parties, none of which are material individually or in the aggregate. |
REDEEMABLE NON-CONTROLLING INTEREST (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Aug. 04, 2013
individual
|
Feb. 03, 2013
|
Jul. 29, 2012
|
Aug. 04, 2013
Warnaco acquisition [Member]
|
Feb. 13, 2013
Warnaco acquisition [Member]
|
Aug. 04, 2013
24% ownership [Member]
|
Aug. 04, 2013
25% ownership [Member]
|
|
Non-controlling Interest [Line Items] | |||||||
Non-controlling shareholder | 1 | ||||||
Non-controlling interest, ownership percentage by parent | 51.00% | ||||||
Redeemable non-controlling interest, fair value | $ 5,600 | ||||||
Fair Value Adjustment to Equity | 1,625 | ||||||
Assets, Current | 3,080,645 | 2,437,006 | 1,819,938 | ||||
Redeemable Non-Controlling Interest | $ 5,600 | $ 0 | $ 0 | $ 5,600 | |||
Non-controlling interest, ownership percentage by non-controlling shareholders | 49.00% | 24.00% | 25.00% | ||||
Period used to determine put price based upon joint venture's earnings before interest, taxes, depreciation and amortization | 12 months |
FAIR VALUE MEASUREMENTS (Tables)
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Aug. 04, 2013
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10. Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial assets and liabilities that are required to be remeasured at fair value on a recurring basis:
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table presents the change in the Level 3 contingent purchase price payment liability for the twenty-six weeks ended August 4, 2013 and July 29, 2012:
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Table Text Block] | Additional information with respect to assumptions used to value the contingent purchase price payment liability is as follows:
A five percentage point increase or decrease in the discount rate would change the liability by approximately $1,000. A five percentage point increase or decrease in the compounded annual net sales growth rate would change the liability by approximately $1,000. |
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Fair Value, by Balance Sheet Grouping [Table Text Block] | The carrying amounts and the fair values of the Company’s cash and cash equivalents, short-term borrowings and long-term debt as of August 4, 2013, February 3, 2013 and July 29, 2012 were as follows:
The fair values of cash and cash equivalents and short-term borrowings approximate their carrying values due to the short-term nature of these instruments. The Company estimates the fair value of its long-term debt using quoted market prices as of the last business day of the applicable quarter. The Company classifies the measurement of its long-term debt as a Level 1 measurement. |
GENERAL (Details)
|
6 Months Ended |
---|---|
Aug. 04, 2013
|
|
Fiscal Period [Line Items] | |
Fiscal year, minimum number of weeks | P52W |
Fiscal year, maximum number of weeks | P53W |
Non-controlling interest, ownership percentage by non-controlling shareholders | 49.00% |
RETIREMENT AND BENEFIT PLANS (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | ||||||||
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Aug. 04, 2013
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Jul. 29, 2012
|
Feb. 02, 2014
|
Feb. 03, 2013
|
Aug. 04, 2013
Pension Plans, Defined Benefit [Member]
plans
|
Jul. 29, 2012
Pension Plans, Defined Benefit [Member]
|
Aug. 04, 2013
Pension Plans, Defined Benefit [Member]
plans
|
Jul. 29, 2012
Pension Plans, Defined Benefit [Member]
|
Aug. 04, 2013
SERP Plans [Member]
plans
|
Jul. 29, 2012
SERP Plans [Member]
|
Aug. 04, 2013
SERP Plans [Member]
plans
|
Jul. 29, 2012
SERP Plans [Member]
|
Aug. 04, 2013
Other Postretirement Benefit Plans, Defined Benefit [Member]
plans
|
Jul. 29, 2012
Other Postretirement Benefit Plans, Defined Benefit [Member]
|
Aug. 04, 2013
Other Postretirement Benefit Plans, Defined Benefit [Member]
plans
|
Jul. 29, 2012
Other Postretirement Benefit Plans, Defined Benefit [Member]
|
May 05, 2013
Warnaco acquisition [Member]
|
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||
Number of plans | 6 | 6 | 3 | 3 | 2 | 2 | |||||||||||
Vesting Period Non-Contributory Defined Benefit Pension Plans | 5 | ||||||||||||||||
Current Executives Covered By Capital Accumulation Program | 2 | ||||||||||||||||
Retired Executives Covered By Capital Accumulation Program | 15 | ||||||||||||||||
Plan Benefit Payment Activation Age | 65 | ||||||||||||||||
Plan Benefit Payment Period | 10 years | ||||||||||||||||
Minimum Number of Years of Employment | 10 years | 10 years | |||||||||||||||
Minimum Age Prior to Employment Termination | 55 | ||||||||||||||||
Percentage of corridor for determining minimum amount of amortization of actuarial gain or loss | 10.00% | ||||||||||||||||
Service cost, including plan expenses | $ 4,823 | $ 4,011 | $ 9,420 | $ 7,865 | $ 1,119 | $ 814 | $ 2,169 | $ 1,787 | $ 14 | $ 0 | $ 40 | $ 0 | |||||
Interest cost | 6,528 | 4,530 | 13,067 | 8,986 | 953 | 827 | 1,810 | 1,673 | 207 | 181 | 429 | 399 | |||||
Expected return on plan assets | (9,658) | (5,254) | (19,528) | (10,476) | |||||||||||||
Amortization of prior service cost (credit) | 2 | 1 | 3 | 2 | (17) | (16) | (34) | (33) | (204) | (204) | (408) | (408) | |||||
Total | 1,695 | 3,288 | 2,962 | 6,377 | 2,055 | 1,625 | 3,945 | 3,427 | 17 | (23) | 61 | (9) | |||||
Pension Contributions | $ 30,000 | $ 7,489 | $ 60,000 | $ 30,000 |
RETIREMENT AND BENEFIT PLANS (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 04, 2013
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Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plans Disclosures [Table Text Block] | Net benefit cost related to the Company’s Pension Plans was recognized in selling, general and administrative expenses as follows:
Net benefit cost related to the Company’s SERP Plans was recognized in selling, general and administrative expenses as follows:
Net benefit cost related to the Company’s Postretirement Plans was recognized in selling, general and administrative expenses as follows:
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ACCUMULATED OTHER COMPREHENSIVE INCOME RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended |
---|---|---|
Aug. 04, 2013
|
Aug. 04, 2013
|
|
Realized gain on effective hedges, tax benefit | $ (391) | $ 735 |
Amounts reclassified from AOCI, net unrealized and realized (loss) gain on effective hedges | (912) | (11) |
Amortization of retirement liability items | 219 | 439 |
Amortization of prior service credit related to pension and postretirement plan, tax benefit | 84 | 168 |
Amounts reclassified from AOCI, retirement liability adjustment | 135 | 271 |
Foreign Exchange Forward Inventory Purchases [Member]
|
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Realized gain on effective hedges | (280) | 2,901 |
Interest Rate Contract [Member]
|
||
Realized gain on effective hedges | $ (1,023) | $ (2,177) |
ACQUISITIONS Pro Forma Results Of Operations (Details) (Warnaco acquisition [Member], USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 04, 2013
|
Jul. 29, 2012
|
Aug. 04, 2013
|
Jul. 29, 2012
|
|
Warnaco acquisition [Member]
|
||||
Pro Forma Consolidated Results Of Operations [Line Items] | ||||
Total revenue | $ 1,964,847 | $ 1,803,015 | $ 3,938,037 | $ 3,743,839 |
Net income attributable to PVH Corp. | $ 74,545 | $ 39,616 | $ 149,948 | $ 80,417 |
NONCASH INVESTING AND FINANCING ACTIVITIES (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
0 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | |||||
---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 13, 2013
|
May 05, 2013
|
Aug. 04, 2013
|
Jul. 29, 2012
|
Feb. 03, 2013
|
Aug. 04, 2013
Calvin Klein licensing business [Member]
|
Jul. 29, 2012
Calvin Klein licensing business [Member]
|
Feb. 13, 2013
Warnaco acquisition [Member]
|
May 05, 2013
Warnaco acquisition [Member]
|
Jul. 29, 2012
Series A Preferred Stock Issuance And Conversion [Member]
|
Apr. 29, 2012
Series A Preferred Stock Issuance And Conversion [Member]
|
|
Nonmonetary Transaction [Line Items] | |||||||||||
Liabilities incurred related to contingent purchase price payments | $ 22,722 | $ 22,722 | $ 22,226 | ||||||||
Contingent purchase price payment terms | Due 45 days subsequent to the Company’s applicable quarter end | ||||||||||
Contingent purchase price payments | 26,734 | 25,749 | 26,734 | 25,749 | |||||||
Stock issued during period, shares, acquisitions | 7,674 | ||||||||||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 | $ 1.00 | |||||||
Business acquisition, equity interest issued, treasury stock, number of shares | 416 | ||||||||||
Increase in common stock | 7,258 | 2,095 | |||||||||
Increase in additional paid in capital | 888,925 | 92,202 | |||||||||
Decrease in treasury stock | 30,269 | ||||||||||
Warnaco employee replacement stock awards | 39,752 | 39,752 | 39,752 | ||||||||
Elimination of pre-acquisition liability to Warnaco | 9,128 | 9,128 | |||||||||
Deferred debt issuance costs | 5,757 | ||||||||||
Holders of Series A convertible preferred stock | 1 | 1 | |||||||||
Conversion of preferred stock, shares converted | 4 | ||||||||||
Stock issued during period, shares, conversion of convertible preferred stock | 2,095 | 2,095 | |||||||||
Conversion of preferred stock, amount converted | 94,297 | ||||||||||
Capital Lease Obligations Incurred | $ 2,663 | $ 13,480 |
SEGMENT DATA
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 04, 2013
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Notes to Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT DATA | SEGMENT DATA The acquisition of Warnaco significantly impacted the way the Company and its chief operating decision maker manage and analyze its operating results. As such, the Company changed its reportable segments beginning with the first quarter of 2013. Prior year periods have been restated in order to present that information on a basis consistent with the current year. The Company manages its operations through its operating divisions, which are presented as six reportable segments: (i) Calvin Klein North America; (ii) Calvin Klein International; (iii) Tommy Hilfiger North America; (iv) Tommy Hilfiger International; (v) Heritage Brands Wholesale; and (vi) Heritage Brands Retail. Calvin Klein North America segment - This segment consists of the Company’s Calvin Klein North America division. This segment derives revenue principally from (i) marketing Calvin Klein branded apparel and related products at wholesale in North America, primarily to department, mid-tier department and specialty stores; (ii) operating retail stores, which are primarily located in outlet centers, and an e-commerce website for North American customers, which sell Calvin Klein branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the brand names Calvin Klein Collection, ck Calvin Klein (in the process of being changed to Calvin Klein on a platinum label) and Calvin Klein for a broad array of products and retail services in North America. Calvin Klein International segment - This segment consists of the Company’s Calvin Klein International division. This segment derives revenue principally from (i) marketing Calvin Klein branded apparel and related products at wholesale principally in Europe, Asia and Brazil, primarily to department and specialty stores and franchise operators of Calvin Klein stores, and through distributors; (ii) operating retail stores in Europe, Asia and Brazil, which sell Calvin Klein branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the brand names Calvin Klein Collection, ck Calvin Klein (in the process of being changed to Calvin Klein on a platinum label) and Calvin Klein for a broad array of products and retail services outside of North America. Tommy Hilfiger North America segment - This segment consists of the Company’s Tommy Hilfiger North America division. This segment derives revenue principally from (i) marketing Tommy Hilfiger branded apparel and related products at wholesale in North America, primarily to department stores, principally Macy’s; and (ii) operating retail stores and an e-commerce website for North American customers, which sell Tommy Hilfiger branded apparel, accessories and related products. This segment also derives revenue from licensing and similar arrangements relating to the use by third parties of the Tommy Hilfiger brand name for a broad array of products in North America. Tommy Hilfiger International segment - This segment consists of the Company’s Tommy Hilfiger International division. 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. This segment also includes the Company’s proportionate share of the net income or loss of its investments in unconsolidated Tommy Hilfiger foreign affiliates. This segment also derives revenue from licensing and similar arrangements relating to the use by third parties of the Tommy Hilfiger brand name for a broad array of products outside of North America. Heritage Brands Wholesale segment - This segment consists of the Company’s heritage brands wholesale division. This segment derives revenue primarily from the marketing to department, mid-tier department and specialty stores in North America of: (i) dress shirts and neckwear under various owned and licensed brand names, including several private label brands; (ii) men’s sportswear under the brand names Van Heusen, IZOD and ARROW; (iii) swimwear, fitness apparel, swim accessories and related products under the brand name Speedo beginning in the first quarter of 2013; and (iv) women’s intimate apparel under the brand names Warner’s and Olga beginning in the first quarter of 2013. 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 Brands Retail segment - This segment consists of the Company’s Heritage Brands retail division. 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. The following tables present summarized information by segment:
Intersegment transactions consist of transfers of inventory principally from the Heritage Brands Wholesale segment to the Heritage Brands Retail segment and the Calvin Klein North America segment. These transfers are recorded at cost plus a standard markup percentage. Such markup percentage is eliminated principally in the Heritage Brands Retail segment and the Calvin Klein North America segment. The following table presents the Company’s total assets by segment:
(1) Corporate at February 3, 2013 included $700,000 of cash that arose from senior notes that were issued to fund a portion of the consideration for the Warnaco acquisition. |
GENERAL
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6 Months Ended |
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Aug. 04, 2013
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Notes to Financial Statements [Abstract] | |
GENERAL | GENERAL PVH Corp. and its consolidated subsidiaries (collectively, the “Company”) constitute a global apparel company whose brand portfolio consists of nationally and internationally recognized brand names, including Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, ARROW, Bass, Warner’s and Olga, which are owned, and Speedo, which is licensed, as well as various other owned, licensed and private label brands. The Company designs and markets branded dress shirts, neckwear, sportswear, swim products, intimates and, to a lesser extent, footwear and other related products and licenses its owned brands over a broad range of products. References to the aforementioned and other brand names are to registered trademarks owned by the Company or licensed to the Company by third parties and are identified by italicizing the brand name. The consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated in consolidation. Investments in entities that the Company does not control but has the ability to exercise significant influence over are accounted for using the equity method of accounting. Please see Note 4, “Investments in Unconsolidated Affiliates,” for a further discussion. The Company’s Consolidated Income Statements include its proportionate share of the net income or loss of these entities. As a result of the acquisition of The Warnaco Group, Inc. (“Warnaco”), the Company owns a majority interest in a joint venture in India that is consolidated and accounted for as a redeemable non-controlling interest. Please see Note 5, “Redeemable Non-Controlling Interest,” for a further discussion. The redeemable non-controlling interest represents the minority shareholders’ proportionate share (49%) of the equity in the Company’s consolidated subsidiary. The Company’s fiscal years are based on the 52-53 week period ending on the Sunday closest to February 1 and are designated by the calendar year in which the fiscal year commences. References to a year are to the Company’s fiscal year, unless the context requires otherwise. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, they do not contain all disclosures required by accounting principles generally accepted in the United States for complete financial statements. Reference should be made to the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended February 3, 2013. The preparation of interim financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from the estimates. The results of operations for the thirteen and twenty-six weeks ended August 4, 2013 and July 29, 2012 are not necessarily indicative of those for a full fiscal year due, in part, to seasonal factors. The data contained in these financial statements are unaudited and are subject to year-end adjustments. However, in the opinion of management, all known adjustments (which consist only of normal recurring accruals) have been made to present fairly the consolidated operating results for the unaudited periods. Certain reclassifications have been made to the consolidated financial statements and the notes thereto for the prior year periods to present that information on a basis consistent with the current year. Please see Note 6, “Goodwill and Other Intangible Assets,” Note 7, “Retirement and Benefit Plans,” and Note 18, “Segment Data,” for discussions of changes in accounting and/or reporting related to these areas. |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES
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6 Months Ended |
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Aug. 04, 2013
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Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | INVESTMENTS IN UNCONSOLIDATED AFFILIATES Brazil In 2012, the Company formed a joint venture, Tommy Hilfiger do Brasil S.A., in Brazil, in which the Company owns a 40% economic interest. The joint venture holds an exclusive license for the Tommy Hilfiger brand in Brazil that became effective on January 4, 2013. This investment is being accounted for under the equity method of accounting. China In 2011, the Company formed a joint venture, TH Asia Ltd., in China, in which the Company owns a 45% economic interest. The joint venture assumed direct control of the Tommy Hilfiger wholesale and retail distribution businesses in China from the prior licensee on August 1, 2011. This investment is being accounted for under the equity method of accounting. India In 2011, the Company completed an acquisition of a 50% economic interest in a company that has since been renamed Tommy Hilfiger Arvind Fashion Private Limited (“TH India”). TH India is the direct licensee of the Tommy Hilfiger trademarks in India for all categories (other than fragrance), operates a wholesale apparel, footwear and handbags business in connection with its license, and sublicenses the trademarks for certain other product categories. This investment is being accounted for under the equity method of accounting. Included in other assets in the Company’s Consolidated Balance Sheets as of August 4, 2013, February 3, 2013 and July 29, 2012 is $62,822, $62,021 and $46,880, respectively, related to these investments in unconsolidated affiliates. |
INVENTORIES
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6 Months Ended |
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Aug. 04, 2013
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Notes to Financial Statements [Abstract] | |
INVENTORIES | INVENTORIES Inventories are comprised principally of finished goods and are stated at the lower of cost or market. |
ACQUISITIONS (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||
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Feb. 03, 2013
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Aug. 04, 2013
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Feb. 03, 2013
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Feb. 13, 2013
Warnaco acquisition [Member]
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May 05, 2013
Warnaco acquisition [Member]
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Aug. 04, 2013
Warnaco acquisition [Member]
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Feb. 03, 2013
Warnaco acquisition [Member]
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Feb. 13, 2013
Warnaco acquisition [Member]
Calvin Klein North America [Member]
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Feb. 13, 2013
Warnaco acquisition [Member]
Calvin Klein International [Member]
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Feb. 13, 2013
Warnaco acquisition [Member]
Heritage Brands Wholesale [Member]
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Feb. 13, 2013
Loans Payable [Member]
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Feb. 13, 2013
Perpetual License Rights [Member]
Warnaco acquisition [Member]
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Feb. 13, 2013
Tradenames [Member]
Warnaco acquisition [Member]
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Feb. 13, 2013
Reacquired Perpetual License Rights [Member]
Warnaco acquisition [Member]
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Feb. 13, 2013
Order Backlog [Member]
Warnaco acquisition [Member]
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Feb. 13, 2013
Customer Relationships [Member]
Warnaco acquisition [Member]
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Business Acquisition [Line Items] | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 4.50% | |||||||||||||||
Calvin Klein categories | 2 | |||||||||||||||
Total fair value of the acquisition consideration | $ 3,137,056 | |||||||||||||||
Business acquisition, equity interest issued or issuable, number of shares | 7,674 | 7,674 | ||||||||||||||
Elimination of pre-acquisition liability to Warnaco | 9,128 | 9,128 | ||||||||||||||
Proceeds from issuance of long-term debt | 700,000 | 700,000 | 3,075 | |||||||||||||
Acquisition, integration and related restructuring costs | 142,000 | 185,000 | 43,000 | |||||||||||||
Warnaco revenue recorded from acquisition date through period-end | 1,027,878 | |||||||||||||||
Warnaco net loss recorded from acquisition date through period end | (62,727) | |||||||||||||||
Goodwill | 1,451,479 | 443,419 | 878,786 | 129,274 | ||||||||||||
Amortizable Intangible Assets | 1,636,300 | |||||||||||||||
Other intangibles | 824,800 | 578,000 | 97,000 | 149,800 | ||||||||||||
Intangible assets not amortizable | $ 206,900 | $ 604,600 |
GENERAL (Policies)
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6 Months Ended |
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Aug. 04, 2013
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General [Abstract] | |
Fiscal Period | The Company’s fiscal years are based on the 52-53 week period ending on the Sunday closest to February 1 and are designated by the calendar year in which the fiscal year commences. |
Consolidation, Policy [Text Block] | The consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated in consolidation. Investments in entities that the Company does not control but has the ability to exercise significant influence over are accounted for using the equity method of accounting. Please see Note 4, “Investments in Unconsolidated Affiliates,” for a further discussion. The Company’s Consolidated Income Statements include its proportionate share of the net income or loss of these entities. As a result of the acquisition of The Warnaco Group, Inc. (“Warnaco”), the Company owns a majority interest in a joint venture in India that is consolidated and accounted for as a redeemable non-controlling interest. Please see Note 5, “Redeemable Non-Controlling Interest,” for a further discussion. The redeemable non-controlling interest represents the minority shareholders’ proportionate share (49%) of the equity in the Company’s consolidated subsidiary. |
DEBT (Tables)
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Aug. 04, 2013
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Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | The carrying amounts of the Company’s long-term debt were as follows:
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Schedule of Mandatory Long-Term Debt Repayments [Table] | As of August 4, 2013, the Company’s mandatory long-term debt repayments for the next five years were as follows:
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GUARANTEES (Details) (USD $)
In Thousands, unless otherwise specified |
Aug. 04, 2013
|
---|---|
Guarantor Obligations [Line Items] | |
Guarantee Obligations Maximum Exposure, Rent and Related | $ 3,600 |
Guarantee Obligations Recourse | $ 2,300 |
ACTIVITY EXIT COSTS (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 04, 2013
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Warnaco Acquisition and Integration Costs [Member]
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Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs [Table Text Block] | In connection with the Company’s acquisition of Warnaco during the first quarter of 2013 and the related integration, the Company incurred certain costs related to severance and termination benefits, inventory liquidations and lease/contract terminations. Such costs were as follows:
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Tommy Hilfiger Integration and Exit Costs [Member]
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Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Restructuring Accrued Liabilities Costs Incurred And Paid [Table Text Block] | Liabilities for severance and termination benefits and lease/contract termination costs recorded in connection with the acquisition and integration of Tommy Hilfiger and the related restructuring were principally recorded in accrued expenses in the Company’s Consolidated Balance Sheets and were as follows:
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SEGMENT DATA (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
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Aug. 04, 2013
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Feb. 03, 2013
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Jul. 29, 2012
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Aug. 04, 2013
segment
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Jul. 29, 2012
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Feb. 03, 2013
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Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Segment Reporting, Number of Reportable Segments | 6 | |||||||||||||||||||||||||||
Net sales | $ 1,884,439 | $ 1,219,620 | $ 3,707,484 | $ 2,532,469 | ||||||||||||||||||||||||
Royalty revenue | 62,561 | 82,513 | 129,628 | 167,973 | ||||||||||||||||||||||||
Advertising and other revenue | 17,847 | 34,490 | 37,895 | 63,587 | ||||||||||||||||||||||||
Total revenue | 1,964,847 | 1,336,623 | 3,875,007 | 2,764,029 | ||||||||||||||||||||||||
Income (loss) before interest and taxes | 73,433 | 153,254 | 80,218 | 309,336 | ||||||||||||||||||||||||
Business Combination, Integration Related Costs | 139,886 | 4,541 | 333,993 | 7,857 | ||||||||||||||||||||||||
Debt modification and extinguishment costs | 0 | 0 | 40,395 | 0 | ||||||||||||||||||||||||
Assets | 11,514,746 | 7,781,549 | 6,731,488 | 11,514,746 | 6,731,488 | 7,781,549 | ||||||||||||||||||||||
Proceeds from issuance of long-term debt | 700,000 | 700,000 | ||||||||||||||||||||||||||
Calvin Klein North America [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Net sales | 332,119 | 150,546 | 625,459 | 312,520 | ||||||||||||||||||||||||
Royalty revenue | 22,610 | 28,891 | 48,026 | 60,199 | ||||||||||||||||||||||||
Advertising and other revenue | 8,024 | 14,201 | 16,719 | 26,075 | ||||||||||||||||||||||||
Total revenue | 362,753 | 193,638 | 690,204 | 398,794 | ||||||||||||||||||||||||
Income (loss) before interest and taxes | 39,496 | [1] | 36,412 | 51,934 | [2] | 72,490 | ||||||||||||||||||||||
Business Combination, Integration Related Costs | 27,632 | 68,734 | ||||||||||||||||||||||||||
Assets | 1,907,589 | 752,029 | 719,391 | 1,907,589 | 719,391 | 752,029 | ||||||||||||||||||||||
Calvin Klein International [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Sales returns | 30,000 | |||||||||||||||||||||||||||
Net sales | 286,152 | 12,124 | 541,340 | [3] | 21,869 | |||||||||||||||||||||||
Royalty revenue | 15,796 | 30,355 | 34,149 | 64,520 | ||||||||||||||||||||||||
Advertising and other revenue | 5,884 | 15,114 | 12,750 | 28,167 | ||||||||||||||||||||||||
Total revenue | 307,832 | 57,593 | 588,239 | 114,556 | ||||||||||||||||||||||||
Income (loss) before interest and taxes | (56,878) | [1] | 23,777 | (105,032) | [2] | 46,003 | ||||||||||||||||||||||
Business Combination, Integration Related Costs | 85,008 | 185,468 | ||||||||||||||||||||||||||
Assets | 3,182,654 | 584,860 | 578,037 | 3,182,654 | 578,037 | 584,860 | ||||||||||||||||||||||
Tommy Hilfiger North America [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Net sales | 357,081 | 324,482 | 694,757 | 623,462 | ||||||||||||||||||||||||
Royalty revenue | 6,034 | 5,101 | 12,524 | 9,625 | ||||||||||||||||||||||||
Advertising and other revenue | 1,748 | 2,285 | 4,206 | 3,972 | ||||||||||||||||||||||||
Total revenue | 364,863 | 331,868 | 711,487 | 637,059 | ||||||||||||||||||||||||
Income (loss) before interest and taxes | 61,960 | 52,636 | 107,970 | 81,513 | [4] | |||||||||||||||||||||||
Business Combination, Integration Related Costs | 379 | |||||||||||||||||||||||||||
Assets | 1,220,896 | 1,137,404 | 1,139,287 | 1,220,896 | 1,139,287 | 1,137,404 | ||||||||||||||||||||||
Tommy Hilfiger International [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Net sales | 420,485 | 375,495 | 872,271 | 829,345 | ||||||||||||||||||||||||
Royalty revenue | 12,810 | 13,078 | 24,563 | 23,358 | ||||||||||||||||||||||||
Advertising and other revenue | 1,138 | 1,465 | 2,352 | 2,509 | ||||||||||||||||||||||||
Total revenue | 434,433 | 390,038 | 899,186 | 855,212 | ||||||||||||||||||||||||
Income (loss) before interest and taxes | 37,859 | 41,113 | [5] | 110,001 | 114,593 | [4] | ||||||||||||||||||||||
Business Combination, Integration Related Costs | 3,497 | 3,497 | ||||||||||||||||||||||||||
Assets | 3,209,996 | 3,278,813 | 2,981,087 | 3,209,996 | 2,981,087 | 3,278,813 | ||||||||||||||||||||||
Heritage Brands Wholesale [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Net sales | 328,540 | 183,500 | 683,109 | 437,618 | ||||||||||||||||||||||||
Royalty revenue | 4,158 | 3,859 | 8,150 | 7,839 | ||||||||||||||||||||||||
Advertising and other revenue | 762 | 1,189 | 1,366 | 2,357 | ||||||||||||||||||||||||
Total revenue | 333,460 | 188,548 | 692,625 | 447,814 | ||||||||||||||||||||||||
Income (loss) before interest and taxes | 29,149 | [1] | 13,797 | 57,504 | [2] | 34,037 | ||||||||||||||||||||||
Business Combination, Integration Related Costs | 11,247 | 28,770 | ||||||||||||||||||||||||||
Assets | 1,370,895 | 555,544 | 568,847 | 1,370,895 | 568,847 | 555,544 | ||||||||||||||||||||||
Heritage Brand Retail [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Net sales | 160,062 | 173,473 | 290,548 | 307,655 | ||||||||||||||||||||||||
Royalty revenue | 1,153 | 1,229 | 2,216 | 2,432 | ||||||||||||||||||||||||
Advertising and other revenue | 291 | 236 | 502 | 507 | ||||||||||||||||||||||||
Total revenue | 161,506 | 174,938 | 293,266 | 310,594 | ||||||||||||||||||||||||
Income (loss) before interest and taxes | 4,013 | 9,306 | (2,790) | 6,710 | ||||||||||||||||||||||||
Assets | 206,313 | 175,717 | 185,756 | 206,313 | 185,756 | 175,717 | ||||||||||||||||||||||
Unallocated amount to segment [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Income (loss) before interest and taxes | (42,166) | [1],[6] | (23,787) | [5],[6] | (139,369) | [2],[6],[7] | (46,010) | [4],[6] | ||||||||||||||||||||
Business Combination, Integration Related Costs | 15,999 | 1,044 | 51,021 | 3,981 | ||||||||||||||||||||||||
Debt modification and extinguishment costs | 40,395 | |||||||||||||||||||||||||||
Assets | $ 416,403 | $ 1,297,182 | [8] | $ 559,083 | $ 416,403 | $ 559,083 | $ 1,297,182 | [8] | ||||||||||||||||||||
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DEBT DEBT Brazil Revolving Credit Facility (Details) (Line of credit, Brazil facility [Member])
In Thousands, unless otherwise specified |
Aug. 04, 2013
USD ($)
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Aug. 04, 2013
BRL
|
---|---|---|
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 19,000 | 44,000 |