The owner of Calvin Klein and Tommy Hilfiger left the business in the Russian Federation

Large foreign clothing manufacturers continue to reduce their presence in Russia. The American Phillips-Van Heusen Corporation (PVH), which owns the Calvin Klein and Tommy Hilfiger brands, transferred the local division to a top manager, who renamed the company and, apparently, will continue to manage local outlets. The deal may help reduce pressure on international markets, while maintaining the possibility of returning to the Russian Federation, experts say.

American PVH in mid-August withdrew from the capital of the Russian division of LLC “Pivery Stores Rus”, as follows from the data of the Unified State Register of Legal Entities. Denis Shchukin became the new owner and general director of the company, and the name of the structure was changed to Retail Excellence LLC. Denis Shchukin’s profile on LinkedIn says that since 2018 he has been the director of the PVH retail chain in Russia, before which he worked at the local Adidas office. PVH did not answer Kommersant’s questions and failed to contact Mr. Shchukin.

PVH Corporation is a large clothing manufacturer that owns the brands Tommy Hilfiger, Calvin Klein, Warner’s, Olga and True & Co. In Russia, the company developed its own retail chain of Tommy Hilfiger and Calvin Klein stores. At the beginning of March 2022, PVH announced the suspension of work in the Russian market due to Russian military actions in Ukraine. The corporation’s report for the first half of 2023 said that PVH completely exited the Russian business, including wholesale sales. In 2021, the revenue of the Russian division of PVH grew by 42%, to 3.52 billion rubles, net profit increased by 28.2%, to 211.82 million rubles. There are no data for 2022.

PVH’s profile on HeadHunter says that in Russia the corporation operated more than 150 stores, including those operating under franchises. Retail Excellence will apparently continue to manage the former PVH locations. On Tuesday, September 12, a vacancy for a salesperson appeared on HeadHunter for the Tommy Hilfiger store in the Outlet Village in Pulkovo with an email address for communication on the Retailexc.ru domain.

The Tommy Hilfiger and Calvin Klein brands in Russia are also developed by franchise distributor BNS Group. According to its own data, this company operates 11 Tommy Hilfiger stores under the TH and TH Legend banners, as well as ten CK Jeans locations. Previously, BNS Group opened a multi-brand chain called Under based on Calvin Klein Underwear stores. The distributor did not answer Kommersant’s questions.

Managing partner of Vanchugov and Partners, Alexey Vanchugov, notes that transferring a division to a local top manager may be the softest option for mothballing the business. In his opinion, the deal with PVH was most likely non-cash; it could include the rights to rent stores, obligations to employees and contractors. As Mr. Vanchugov notes, such a scheme allows foreign companies to formally leave the Russian market, and on the other hand, retain the opportunity to return. One Story partner Olga Sumishevskaya also notes that such a deal will make it possible not to completely lose the established connections and contacts in the Russian Federation. Despite Russia’s small share in the total revenue of international fashion brands, the market remains interesting, since the most profitable goods can be sold here, points out Alexey Vanchugov.

Many international fashion brands, due to the tightening of Western sanctions, have also lost the opportunity to direct funds to business development in Russia. The American brand Guess, which nevertheless continues to operate in the Russian Federation, mentions the US ban on new investments in the Russian Federation and the impossibility of supplying goods worth more than $300 and €300 in its financial report.

Senior Director of CORE.XP Marina Malakhatko notes that clothing from the Calvin Klein and Tommy Hilfiger brands continues to be popular among Russian buyers. However, in her opinion, when transferring the business to local management, the company is unlikely to have significant resources for large-scale development of the network. In addition, the devaluation of the ruble and complicated logistics will inevitably lead to rising prices for goods, the expert adds.

Alina Savitskaya