Tensions Flare Between CK, Raf Simons
Emanuel Chirico amplified his disappointment with the runway and jeans collections under Simons’ leadership.
Could the grand Raf Simons experiment at Calvin Klein Inc. be in jeopardy?
Emanuel Chirico, chairman and chief executive officer of PVH Corp., parent company of Calvin Klein, last week stated for the first time — and in unusually blunt terms, even for an executive known for being a straight-shooter — that the reimagined Calvin Klein isn't clicking.
“While many of the product categories performed well, we are disappointed by the lack of return on our investments
in our Calvin Klein 205W39NYC halo business and believe that some of the Calvin Klein Jeans' relaunched product was too elevated and did not sell through as well as we planned,” Chirico said as the group released third-quarter results. He vowed to quickly implement a new, more commercial direction for the iconic American brand.
Describing Simons' overhaul of Calvin Klein Jeans, Chirico said, “From a product perspective, we went too far, too fast on both fashion and price. We are working on fixing this fashion miss, and we believe that our CK Jeans offering will be much more commercial and fashion-right beginning in 2019, especially for the fall 2019 season.”
Chirico's statements highlighted the gulf that often exists between critical acclaim and commercial realities, and the complex relationship between creative types and the business executives charged with executing their vision.
”On a personal level, for me, this is a credibility issue,” Chirico said. “And I really feel strongly about what has to be done and the actions that need to be taken as we go forward. So we will reposition the expense structure.”
Reports have been circulating in the market for the past two weeks that PVH and Simons, chief creative officer of Calvin Klein Inc., might not renew their contract when it expires in August. Simon is said to be equally disenchanted — and those both inside and outside the company speculated he could potentially walk even before his contract expires.
When asked whether Simons' contract was going to be renewed, a
PVH spokeswoman said, “We aren't commenting further than what Manny [Chirico] said on the call.”
Simons could not be reached for comment. According to sources, relations between the designer and management soured long before Chirico's public chastisement of Calvin Klein's design direction last week. Simons is said to be frustrated by “mismanagement of resources” at the brand and production and distribution support for the runway and jeans collections. According to the designer's camp, the underwear division, led by Cheryl Abel-Hodges, and certain licensed products are thriving by properly exploiting the “halo” of his runway and effective deployment of the “trickle down” effect — translating ideas and design elements in approachable, commercial ways.
What's more, Simons claims PVH has run afoul of his current contract regarding his purview over certain functions such as marketing, and other protocols.
It is understood a renewal offer came to the designer in recent weeks, even though his current pact doesn't expire until August. Sources indicated that when PVH presented Simons with the new contract, negotiations hit some roadblocks. When the designer signed his original contract he was given total creative control, and PVH was said to be trying to dial back some of that power, sources said. Simons is said to have rebuffed the new offer and is now considering his options, according to sources.
“How shameful for a company to attack its creative leader after all he's done for them,” asserted one source. “Everyone's assuming he's leaving after this. He could walk out tomorrow and sue them.”
Despite Chirico's comments, PVH is continuing with business as usual, and the company is planning to stage a runway show for Calvin's 205W39NYC collection during New York Fashion Week in February.
To be sure, Chirico's confidence in the Simons era at Calvin Klein dimmed sharply in a matter of months.
As recently as last May, the ceo was trumpeting the designer when he told investors, “We couldn't be happier with Raf's contributions to the brand and how it's really benefited not just the 205 business, but clearly has benefited what's gone on in our jeans and underwear business, in particular, where we've put a real focus on the marketing investment. As you go into spring, but really into fall 2018, you're going to see that black thread that starts with the 205 collection. You're really going to see that carry through our jeans, our sportswear and even our underwear business.”
In an interview in October when he received WWD's Edward Nardoza Honor for Corporate Leadership, he said he was pleased with the hiring of Simons.
“It was Steve's recommendation,” he said referring to Calvin Klein ceo Steve Shiffman. “I met with Raf throughout the process. It was not only a big change and investment we were making, but the idea of bringing in someone of that skill level. Recognizing there would be a huge cultural change. So yes, I was intimately involved in that decision. It's worked really well so I'll take some credit for it. You make those decisions, you keep evaluating those decisions, and you hope that you stay on the strategic course.”
Shiffman's compensation is tied to the performance of the brand under Simons' design purview.
A May regulatory filing from the company noted, “Mr. Shiffman received an upward adjustment of his bonus of $120,000 [13 percent of his base salary] for his efforts, including the execution of his initiative to create a unified global vision for our Calvin Klein brand under one chief creative officer, Raf Simons, and his management of the business and creative organizations to facilitate Mr. Simons' success and the business' growth.”
The realignment of Calvin Klein under Simons has been a major enterprise for PVH, seen as key to the brand's future growth. Prior to joining Calvin Klein, Simons was artistic director of Christian Dior for women's haute couture, ready-towear and accessory collections for three years. Earlier he was creative director of Jil Sander for both women's wear and men's wear. He also continues to have his own eponymous men's wear brand.
Simons has been the chief creative officer at Calvin since August 2016 when he was basically handed the keys to the
Klein kingdom, given the kind of complete creative control that had not been seen since the days when Calvin Klein himself, and his partner Barry Schwartz, were running the business. Upon joining the company, Simons immediately set out to rethink the collections, change the teams, change the ad campaigns and basically reinvent the business, which was generating some $8 billion in sales but had lost its momentum in some respects. Chirico has repeatedly said he believes Calvin Klein will become a $10 billion business.
Simons has oversight for all the brand's categories, from the signature collection, which he renamed 205W39NYC shortly after arriving to lower-price apparel and accessories, including jeans, underwear and fragrances — the cash cows of the brand — as well as home goods. In addition, Simons oversees all aspects of global marketing and communications, visual creative services and store design. Sources said the designer is being paid $18 million annually.
His inner circle that he brought with him to Calvin Klein includes Pieter Mulier, his longtime number two and now the creative director of Calvin Klein, and Mulier's boyfriend, Matthieu Blazy, the design director of women's rtw.
While Chirico expressed disappointment in the performance of the signature 205W39NYC collection, Simons has been winning a slew of awards for his work at Calvin. For the second year running, he won the CFDA Award for Womenswear Designer of the Year, and the year before, he scooped up both the women's and men's prizes — a feat that had never been done before. His directional, often disquieting fashion shows have brought the company a lot of buzz, taking the brand in a different direction from the clean, modern, minimalist roots planted by its renowned founder and strengthened by Simons' predecessor, Francisco Costa.
Over the last two years, Simons has explored the dark side of the American pop landscape, the immigrant “outsider” experience, cowboy culture, the high school years, horror movies and the actual apocalypse with models walking the runway in hazmat suits, firefighter coats and Mylar accessories.
”It's not a balance of art and commerce. There's too much art and not enough commerce,” said one industry source about the collections.
The brand's ad campaigns, which had futuristic and artistic overtones, have featured androgynous and otherworldly looking models, as well as the Kardashian-Jenner clan, and was another shift from the highly sexualized and controversial campaigns for which the brand has been known.
As reported, sources indicate
Klein might be making a change in its photographers, hiring Glen Luchford to shoot the spring campaign rather than Simons' longtime collaborator, Willy Vanderperre, who has shot the campaigns since the designer's arrival.
Chirico told analysts over the last three years the group has invested between $60 million and $70 million in 205W39NYC — and it hasn't seen a return on the investment.
“First of all, we've been disappointed that our investments in the 205 collection business have not delivered the results we expected. We will cut back on a number of these planned investments in the 205 collection business, and we — as we move forward, will be taking a more