Posted on 12/17/2002 11:45:10 AM PST by Paul Atreides
Calvin Klein Inc., the fashion company known for its sexy clothes and flamboyant advertising, is near an agreement to sell itself to shirt maker Phillips-Van Heusen Corp. (NYSE:PVH - News) for about $400 million in cash, roughly $30 million in stock and potential royalties that could be valued at $200 million to $300 million over time, Tuesday's Wall Street Journal reported.
Final details were being hammered out Monday night, and a deal is expected to be announced as early as Tuesday, people familiar with the matter said.
The proposed sale marks the end of an era on New York's Seventh Avenue. Mr. Klein and his partner, Barry Schwartz, founded their company in 1968 with an initial stake of $10,000. Together, the two friends built a glamorous, high- profile business whose brand-name products were known from Hong Kong to Paris.
However, the company suffered some serious business reversals and never succeeded in going public. An earlier effort to sell the company for $1 billion three years ago failed.
For Phillips-Van Heusen, which like Calvin Klein is based in New York, the purchase is a bold move to position itself as a designer business while raising its profile in retail circles. The deal is a personal victory for Bruce Klatsky, Phillips-Van Heusen chief executive who pushed hard for the Calvin Klein deal because it fit with his plans to bring designer brands to the company's stable and then expand them, as the company is doing with Izod. Mr. Klatsky didn't return phone calls seeking comment.
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