Fashion group Phillips-Van Heusen (PVH) is mooting prices rises on the back of an expected increase in product-related costs next year.
Speaking to analysts on a conference call for its second quarter results, the company said it expected cost increases of between three and eight per cent next year. PVH chairman and chief executive Emanuel Chirico said the company would test price rises “selectively” to test consumer reaction.
“We understand the consumer is under pressure. We are testing price increases with a number of our brands as we go into the fall-holiday season to see how moving MSRPs and moving promotional cadence, to see how we react to that and see what benefits may come from that. So we’re clearly experimenting with all the levers.”
He added the company, which owns the Calvin Klein and Van Heusen brands, would benefit from its greater dependence on woven, where price pressure if lower than in knits, and from the scale gained from its £2bn acquisition of Tommy Hilfiger in May.
The company reported revenue of $1.1bn (£714m), compared to $529.3m ($344m) a year ago, reflecting the Hilfiger acquisition and growth in its existing business. Its Calvin Klein business reported revenue growth of 15% to $201.1m (£130.6m), while the Heritage Brands division, which includes casual brand Izod, saw revenue grow by 6% to $778.2m (£505.2m). Tommy Hilfiger generated $532.2m (£345.5m).
The company said it had benefited from increased marketing spend, particularly for Izod and Van Heusen, over the past four year, and that it planned to increase investment by $15m (£9.7m).