Underwear has long been The Warnaco Group's foundation. One of the leading marketers of bras, the firm designs and distributes intimates, swimwear, and sportswear under its own and licensed brands, including Calvin Klein, Speedo, Olga, and Warner's. Warnaco also makes menswear under the Chaps by Ralph Lauren brand. The manufacturer sells apparel to department stores, mass merchandisers, warehouse clubs, and specialty retailers in Asia, Europe, and North and South America. In addition, The Warnaco Group operates about 1,360 Calvin Klein retail stores worldwide, and it markets Calvin Klein and Speedo brand merchandise online.
Faced with increased competition from retailers and tough economic conditions in certain markets, the company has seen improved demand and rising profits. In 2010 it logged revenues of $2.3 billion, an almost 15% increase from $2 billion the year before. Calvin Klein is Warnaco's top-selling brand, accounting for nearly 75% of sales. The company's bottom line climbed to $138 million, a nearly 45% gain.
Contributing to those improved results has been Warnaco's growing international direct-to-consumer business. The company has targeted regions of Asia, Europe, and South America that can tout rising income levels. In 2009 the company acquired a dozen retail stores in Brazil, Chile, and Peru for a total of $12 million. Warnaco followed up those deals by acquiring the operations of Calvin Klein products distributors in Italy, Singapore, and China for $31 million total in 2010. (That year acquisitions added 85,000 sq. ft. of retail space.) At the start of 2011 Warnaco acquired inventory and leases of retail stores from its Calvin Klein distributor in Taiwan for $1 million. Warnaco's direct-to-consumer business has contributed a growing portion of sales in recent years, from 15% of total revenues in 2006 to about 25% in 2010. The amount of revenues generated internationally has also increased during this time, from about 40% of total sales to more than 55%.
To help stabilize its business, Warnaco has shed less-profitable divisions. In 2009 the company discontinued its Calvin Klein Golf and Calvin Klein Collection businesses, both of which operated in Korea and distributed the brand's merchandise to area retailers.
Investment giant FMR owns about 15% of the company's shares.
▲ Show Less▼ Show Full Description