Around 1,000 staff at Warnaco will be made redundant as a result of its merger with Calvin Klein owner PVH, Drapers has learned.
This morning it was announced that brand house PVH is to acquire licensee group Warnaco in a move that will bring the whole of Calvin Klein under a single company with Warnaco’s Calvin Klein Jeans and Calvin Klein Underwear licences coming under PVH, which already owns the overall brand.
While this will lead to greater control over the brand for PVH, president and chief executive of Calvin Klein Tom Murry told Drapers that the company expects to make around 20% of the Warnaco team, which currently totals more than 5,000 people, redundant.
Manny Chirico, chief executive of PVH, explained: “We will see very little change in business operations, for example the creative, merchandising and designing side.
“Where the duplications really reside are in the back office, IT, logistics and supply chain.”
The redundancies would take place over the coming months, with the company providing an “advanced severance deal” to those affected.
But Chirico told Drapers there were “significant benefits” to merging two companies together.
“When you do have a licensing relationship it slows down the decision making process, the design process and the store opening processes.” In bringing all operations under one roof processes would be much more effective and streamlined, he added.
Murry said the PVH would now focus on expanding “all categories and regions around the world”., particularly Northern Europe, Brazil, Russia, India and China.