PVH Takes Control of Hilfiger in China
PVH buys the remaining shares in its Tommy Hilfiger China joint venture to take full ownership.
PVH and funds advised by Apax Partners have reached an agreement for PVH to acquire the remaining 55 percent interest in TH Asia, their joint venture for the Tommy Hilfiger brand in China, that PVH did not already own.
The purchase price of the transaction is roughly $172 million and the deal is expected to close in the second quarter of this year.
Eventually taking full ownership of the joint venture was always part of the plan, since PVH and the funds advised by Apax Partners established the joint venture in connection with the Tommy Hilfiger acquisition in 2010.
Since 2012, the first year of operations after the joint venture acquired Tommy Hilfiger China from its former licensee, the Tommy Hilfiger business in China has doubled from nearly $70 million in revenue to a projected $140 million in revenue for 2015 with more than 350 stores.
“We are looking forward to executing a more fully integrated strategy for China that takes advantage of our current momentum in the region,” says Daniel Grieder, chief executive officer, Tommy Hilfiger. “This will allow us to further realize the growth opportunities that exist for the brand by offering consumers a greater breadth of Tommy Hilfiger product lines and a more elevated brand presentation. Building on our strong existing regional foundation, we plan to accelerate the growth of the Tommy Hilfiger business by increasing our brand marketing in China and capitalizing on our strong market positioning and price, value proposition. We plan to invest further in driving the expansion of the brand through new store openings (both company-operated and franchised stores) and improved productivity in existing stores, while rapidly expanding our traditional and digital marketing initiatives to further reinforce the brand in this exciting market.”