Calvin Klein Storm Continued To Upgrade Parent Company'S Stock Rating Fell For The First Time In 8 Years

According to the women's wear daily, analysts of investment bank Cowen & Co. lowered the stock rating of American Apparel Group PVH from buying to holding in January 22nd, and lowered the target price from $142 to $119. This is the first time the group has been relegated for eight years.

In a statement to customers, John Kernan, an analyst with the rating adjustment, said that with the brand Calvin Klein entering the restructuring period, the next revenue and profit status of PVH would be disappointing.

Although PVH is one of the top companies with the highest net stock buying rate in the company previously evaluated by Cowen&Co., plus the expected earnings report for the 2018 fiscal year published by PVH, the Group expects total revenue in the 2018 fiscal year to reach at least 9 billion 570 million US dollars, exceeding the plan, and its earnings per share can also reach US $1.75, exceeding the highest level of investment guidance yield announced previously, but John Kernan insists that these expectations are all too high.

"Today's PVH faces a lot of challenges. In addition to investing about $120 million in funding for the Calvin Klein restructuring plan, the group will also face lower growth and higher risk environment," Kernan added. "It also includes competition from other garment suppliers, difficulties in the wholesale market in North America and obstacles in potential supply chains."

In 2002 and 2008, PVH acquired Calvin Klein and Tommy Hilfiger in 2015 and sold more than US $8 billion in 2015 to become the second largest clothing company in the world. In the past few months, the company has undergone a series of dramatic changes.

The main source of turbulence stems from the incident of designer Raf Simons leaving Calvin Klein not long ago. At the end of November, the Calvin Klein performance report released by Calvin Klein chairman and chief executive officer Emanuel Chirico showed that there was a significant disconnection between Calvin Klein's sales and consumers in the third quarter, and its pre tax profit dropped from $142 million a year ago to $121 million. The company attributed in part to the increase in the brand's creative and marketing costs of about $10 million this year. Emanuel Chirico even pointed out that the pot should be carried out by Raf Simons, the former chief creative officer of the brand.

He thinks that Raf Simons's remodeling of Calvin Klein jeans is a failed adjustment, and after the announcement of its performance, the investment in 205W39NYC series launched by Raf Simons has been drastically reduced.

For a while, there were many conjectures about Raf Simons's future in the brand. However, on Christmas Eve, part of the conjecture is a fact. Calvin Klein announced in a brief press release that it had suspended cooperation with Raf Simons.

A few weeks later, PVH took prompt action to remedy it, including re renaming the Calvin Klein 205W39NYC series designed by Raf Simons, closing the flagship store in New York Madison Avenue, which was designed by Calvin Klein, and reducing about 100 employees. Some investors have dispelled previous concerns, but others still believe that the future of PVH is highly uncertain.

The downgrade also showed a slight negative trend in PVH's share price. At the close of January 22nd, PVH group's share price fell 4.66% to $105.05. In the past 12 months, this figure has dropped by about 30%.

Up to now, PVH's spokesman did not comment on the relegation.