PVH Corp and funds advised by Apax Partners have entered into a definitive agreement for PVH to acquire the 55 percent interest in TH Asia Ltd, their joint venture for Tommy Hilfiger in China. The closing of this deal to happen early in the second quarter of 2016 is expected to be slightly accretive to PVH’s 2016 earnings on a non-GAAP basis.
Since 2012, the first full year of operations after the joint venture acquired the Tommy Hilfiger China business from the former licensee, the Tommy Hilfiger business in China has doubled from approximately 70 million dollars in revenue to a projected 140 million dollars in revenue for 2015 with over 350 stores, of which 65 are directly operated.
“Today’s announcement represents a significant development for our company as we continue to execute against our key strategic priorities and demonstrates our commitment to making strategic investments to support the long term growth of PVH and our Tommy Hilfiger business. This transaction enables the Tommy Hilfiger business to directly operate its fastest growing market, while leveraging our well-established infrastructure in Asia, our regional leadership expertise and strong brand momentum across both our Tommy Hilfiger and Calvin Klein businesses in the region,” said Emanuel Chirico, Chairman and Chief Executive Officer, PVH Corp.
PVH and the funds advised by Apax Partners had established the Tommy Hilfiger China joint venture in connection with the Tommy Hilfiger acquisition in 2010. The other shareholders in the joint venture include an affiliate of Silas Chou and, indirectly through an investment vehicle controlled by funds advised by Apax Partners, such as Fred Gehring (former CEO and Executive Chairman, Tommy Hilfiger and current Vice Chairman, PVH), Daniel Grieder (CEO, Tommy Hilfiger), and Tommy Hilfiger.