PVH Corp., the American clothing company, is planning to lay off 10 per cent of its workforce.
The Company, which owns brands such as Tommy Hilfiger and Calvin Klein, is all set to scale back the outlook for the year amidst the inflationary conditions. These layoffs will reportedly result in net annual savings of more than $100 million.
Formerly known as Phillips-Van Heusen Corp., PVH aims to bring down people costs across its offices, globally, as rising prices are adversely affecting consumer demand, especially for clothing and other discretionary products.
According to Bloomberg, the Company seeks to improve efficiency with these job cuts. The Company’s revenue is expected to dip this year, contrary to expectations.
Already, the revenue has dipped to $2.1 billion, that is, eight per cent YOY. That is because, wholesale has dipped about 11 per cent, Tommy Hilfiger has fallen five per cent, Calvin Klein one per cent and Heritage Brands 44 per cent. Gross margin has shrunk a little to 57.2 per cent, Last year, it was 57.7 per cent. While inventory has gone up about 19 per cent, net income has dropped 36.6 per cent to $115.3 million.
In addition, Trish Donnelley, who was serving as CEO, PVH Americas and Calvin Klein Global, is moving on.
Inflation remains quite the threat, not just in the US but the world over. Although consumer prices rose at a slow pace in June and July, they are high enough to remain a threat. That means, interest rates will be raised till prices come down.