American clothing and licensing company, G-III Apparel Group filed a breach of contract amounting to US $ 250 million against PVH Corp – the owner of Calvin Klein and Tommy Hilfiger.
The suit was filed in a New York court and it signifies the rising tensions between the two companies since 2022. The tensions had begun when PVH’s chief executive officer, Stefan Larsson, took back the licences for Calvin Klein and Tommy Hilfiger’s women’s wholesale in North America – the licences of these companies and their businesses had earlier been managed by the G-III Apparel Group.
As per the complaint, G-III Apparel Group not only mentioned a breach of contract but the company also asked for a declaratory judgement that it won’t be required to make any royalty payments to Calvin Klein and Tommy Hilfiger if the company fails to meet the minimum sales requirements, which are a result of PVH Corp’s action as per G-III Apparel Group. Further, the company also asked for an order according to which PVH Corp be declared as tortiously interfering with the women’s suits licenses, and consequently G-III Apparel Group also demanded an award for damages caused by the PVH Corp.
However, a spokesperson for the PVH Corp deemed the claims as baseless and said that company will respond to the claims through a legal procedure and for now is all set to address these matters in court. A source, who is familiar with this ongoing legal battle, spoke in favour of G-III Apparel Group and revealed that the company has a legal right over the licenses of Calvin Klein and Tommy Hilfiger till 2029 but PVH Corp shortened the extension.
This decision led to the wrapping up of a major partnership, which had made more than US $ 15 billion in wholesale sales for over two decades. Additionally, the move is cited as more extreme for the G-III Apparel Group, which is predicted to lose out on a substantial amount of its business.
While both the sides are recovering with PVH taking more control of its brands and G-III Apparel Group focussing more on its existing brands like Donna Karan and taking on new licenses, this shift in partnership has however propelled the G-III Apparel Group to move the court.
While a full disclosure of the case remains to be seen as the complaint is still sealed but the case brought out PVH Corp’s intention of proving that it can manage the wholesale business and G-III Apparel Group, which deals with the wholesale market, wants to prove that it can manage big brands.
