Why Calvin Klein's Launch of ck one Lifestyle Has Great Potential
It's hardly business as usual right now at Calvin Klein, despite the prevailing aesthetic of sleek minimalism and scent of gender-neutral cologne. The company -- under the Phillips-Van Heusen (PVH) umbrella -- is set to launch a new lifestyle brand named after one of its most popular fragrances: ck one.
By next spring, jeans, swimsuits and -- you guessed it -- underwear will hit store racks under the new ck one label. Here's how the legacy fashion brand can ensure its spawn will hit the mark.
Stable Base â€" Overall, Calvin Klein's business continues to grow despite tepid retail sales. The second quarter showed increases across the board. Royalty revenues, sales and comps were up 11, 17 and 14 percent, respectively and earnings rose 21 percent. CK also enjoyed a handsome improvement in gross margins which will help as the company invests in marketing and ads to support this new assortment.
But Calvin Klein's not going it alone. Warnaco (WRC), famous maker of all things bra and panty, will manufacture the clothing as part of the partnership that also includes Coty Prestige (home of its fragrances).
Smart Tie-In â€" By naming its new collections after the highly successful fragrance, Calvin Klein is not only cashing in on established brand recognition, but in the case of ck one, its unisex appeal. All of the fragrance's ads feature nubile (ahem, scantily-clad) guys and girls, so the general populace is not going to have to make too big a leap to associate the moniker with sexy swimwear and barely-there underpinnings.
Serious Positioning - According to WWD, the strategy for ck one will "cultivate a younger, fashion-conscious male and female consumer." Though team ck one has yet to reveal prices, they are expected to come in 15 to 20 percent below Calvin Klein Jeans and CK Underwear â€" a very sage move as the young consumer (think 16-28) is label-hungry but doesn't necessarily have the dough to support an haute habit buying luxury brands.
With ck one's lower price points and a planned global launch, the company's right to bet that it will be a much bigger business over time. That is, if that pricing structure allows Calvin Klein to maintain margins as the cost of raw goods continues to rise.
Image via Calvin Klein
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