Calvin Klein’s new strategy: don’t market the dream, market what sells


The morning Calvin Klein released its collab with skate brand Palace, Stefan Larsson, chief executive of the brand’s parent company, PVH Corp., received a text from his school-aged daughter that was both disturbing and exciting. “Calvin Klein website crashed, can you get it back?” »

Demand for the collection of T-shirts, sweatshirts, denim shorts and underwear emblazoned with the two brands’ logos was so strong that it briefly caused an outage at Calvin Klein’s online store. Roughly 70% of the apparel sold on launch day, Larsson told investors gathered at a PVH event in New York earlier this week, was “the most successful collaboration we’ve done so far.” .

The only scathing note came from a few online critics and branding experts, who questioned whether bras and boxers stamped with the alternating words “Calvin Klein” and “Palace” were the best expression of the two brands’ sensibilities. iconic.

“In terms of communications and marketing…it was a very powerful campaign,” said Naomi Accardi, a creative consultant who has worked with Nike and Adidas. “But when I saw the clothes themselves, I didn’t really get the point of the collaboration.”

For Larsson, who was named CEO of PVH Corp. last year, customers rushing to the Calvin Klein website was the point. Speaking to a room full of investors at the brand’s headquarters at 205 West 39th Street, where Calvin Klein itself staged shows in the 1990s, the message couldn’t be clearer: the era of Capital-F fashion at Calvin Klein is over and the era of the “hero product” is activated.

“Is it a flagship product? A test to be a product hero? A flagship product that we are phasing out? Larsson said while presenting PVH’s five-year plan. “This is the disciplined framework in which we want to operate.”

The strategy has helped Calvin Klein rebound from the pandemic, with sales of $3.7 billion in its fiscal year ending January, roughly equivalent to 2019. PVH’s goal is to increase sales by 46% to $5.4 billion by 2025.

The Opportunity

The Palace collaboration represents the culmination of a top-down rebranding that cost Calvin Klein three years and hundreds of millions of dollars. Under Raf Simons, who served as the brand’s first — and potentially last — creative director from 2016 to 2018, signatures and high-profile runways were aimed at the luxury shopper who could spend $400 on a t-shirt. instead of $40.

But the clothes didn’t sell as expected. After Simons left, the brand ditched the runway marketing platform it had revived from the ’90s and focused only on what it knew worked: selling underwear. In early 2020, Justin Bieber posed in Calvin Klein underwear emblazoned with the logo on a 4,000 square foot billboard in Manhattan.

Larsson joined in February 2021, succeeding longtime CEO Manny Chirico, who helped build Calvin Klein and sister brand Tommy Hilfiger into global behemoths. The company announced the departure of Calvin Klein Global Marketing Director Linh Peters and Executive Vice President Jamaal Layne in October 2021. Both spent less than a year in their respective roles. Calvin Klein has not named a global chief marketing officer to replace Peters.

Along with the new product approach, PVH plans to focus on “consumer engagement” and “brand experience,” i.e. marketing moments and sales touchpoints at the consistent detail throughout the shopping experience. Calvin Klein also plans to emphasize its own digital retail channels as well as physical channels. Although it does not currently have full-price retail stores in North America (it does in other regions), the brand operates more than 160 outlet stores in North America. The goal is to have “brand building” sites by 2025 in key cities, PVH Americas CEO Trish Donnelly said during the investor presentation.

For Larsson, flagship products and sales strategy are inextricably linked.

“As soon as you start improving product execution, you improve customer engagement, you improve and enhance the store experience and it pays off immediately, the customer immediately responds positively,” Larsson told BoF.

The product

Improving product execution, as Larsson puts it, means iterating on Calvin Klein “flagship products” like underwear, sweatshirts, and t-shirts with trendy colorways and materials. At Tommy Hilfiger, the other flagship brand in the PVH portfolio, this means that the brand’s bestsellers make up 80% of its assortment, with seasonal fashion items making up 15% and 5% being dedicated to limited edition collaborations. PVH declined to disclose whether this strategy would also apply to Calvin Klein.

It’s about striking a balance between appealing to what customers already love about Calvin Klein and newness supported by new cultural moments that will keep the brand current.

“You don’t want to index too much to one side,” said Jacob Jordan, head of product strategy and new products at Calvin Klein. “It’s a fine line.”

The “centerpiece” of the Palace collaboration was a remixed CK One unisex fragrance, while the apparel was built around denim and underwear, two iconic Calvin Klein categories. Black and white basketball jerseys with the CK1 Palace logo and a pair of “CalVans” – Calvin Klein Vans skate shoes – are the most adventurous products in the collection.

Calvin Klein hasn’t entirely severed its ties with the fashion establishment: When asked if the brand would host fashion week shows again, Larsson didn’t rule it out.

A previous collaboration came into the hands of designer Heron Preston in April 2021. (A second edition of the partnership came six months later, both of which were successful.)

In February 2021, Willy Chavarria, who designs his own menswear brand and is also a consultant on the Yeezy Gap project, began working as senior vice president of design at Calvin Klein. Jess Lomax, formerly at Nike, became executive vice president of global design while Jordan built his career partly at Apple and Louis Vuitton. The first collections under Lomax and Jordan will be released for Spring and Fall 2022.

The future

Where customers meet Calvin Klein is likely to have as big an impact on the bottom line as who designs the clothes, if not more. The brand is still striving to generate more sales from its own channels, preferably at full price, and less from wholesale and off-price retailers. Breaking away from unfavorable, even harmful, wholesale relationships is a strategy that other fashion brands have tried to implement, recalibrating to focus on their own e-commerce channels and stores.

“I’ve seen this movie before,” Larsson said of the focus on owned retail. “The good news is it’s fixable, there’s a proven way to do it… It’s an approach our top competitors have taken in North America – Levis, Ralph [Lauren]even Nike had to rebalance its distribution and lean in to win over the domestic consumer.

PVH still has a long way to go: Sales of e-commerce channels owned by Tommy Hilfiger and Calvin Klein in North America accounted for just 3% of revenue in 2019. A PVH spokesperson said the brand does not hadn’t reported those numbers for 2020 or 2021. On the fourth quarter earnings call for fiscal 2021, Larsson said the company grew its digital business 30% in 2021 after hitting 40% growth. in 2020 to represent 25% penetration of the activity.

Part of that means expanding its digital channels and only selling coveted collaborations like CK1 Palace on its own and collaborator’s website.

Denim, as seen in the CK1 Palace campaign, is also a priority for the brand. Calvin Klein can draw on its long history in the category: images of Calvin Klein denim advertisements from the 80s and 90s featuring Brooke Shields, Mark Wahlberg and Kate Moss are ripe for remixing.

“To tap into the denim category, I think it’s really smart,” said Jane Hali and Associates analyst Jessica Ramirez. The jeans in those iconic Calvin Klein ads – straight legs and looser styles – have themselves dethroned skinny jeans from their decade-long dominance. “Everyone has been talking about that larger silhouette… Calvin Klein obviously has the fuel to make that play.”


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