PVH (Phillips-Van Heusen Corporation) SWOT & PESTLE Analysis

Strength

1. Legacy of strong brands popular across the world: PVH has a history of over 135 years, with 38,000 associates in 40 countries. It has many internationally renowned brands in its portfolio like Tommy Hilfiger, Calvin Klein, IZOD, Van Heusen, Arrow and more. The company also has third party brand licenses from Speedo, Unlisted, DKNY, Chaps and more. All these brands sell globally at different price points and using multiple distribution channels, which enables reaching out to a wide range of consumers, minimizes competition among the brands and reduces reliance on a single region, price point or demographic. The company also licenses usage of trademarks to third parties whenever the parties’ expertise would be useful for growing the brands.

2. Strong focus on customer experience: PVH focuses on delivering the ultimate brand experience to its customers through various innovative and interactive events for reaching out to existing and new customers especially the youngsters. Culture of imagination and being nimble has enabled the company offer newness through partnerships, for instance, the Kith X Tommy Hilfiger collection. The company also launched engaging brand activations like Calvin Klein X Amazon Fashion NYC Market, which was a mix of physical and digital brand experiences for consumers. Digital is always an important part of the company’s consumer engagement efforts. Consumer centric activations like global collaboration with digital commerce retailers, social media engagement and runway show livestreams help in driving PVH’s cultural relevancy and strengthening consumer relationship.

3. Efficient management of balance sheet and strong cash flows: PVH has been able to manage its balance sheet efficiently and use it to deliver stockholder value. In 2018, the company was able to repurchase $300 million of stock, which exceeded the plan of $200-250 million. The company was also able to pay off $150 million of debt, improving the net leverage ratio to 1.9x. PVH plans to continue using balance sheet to drive returns. The plan is to reinvest in the different brands and get more direct control over some Tommy Hilfiger and Calvin Klein licensed businesses, and also continue stock repurchase and debt payments. PVH has a strong credit profile as of 2020, and its steady free cash flows will enable it to deliver upon its strategic objectives,

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Initiatives for reduction in carbon emissions: The rising concern about global warming has led to the need for reducing carbon emissions. PVH in 2018 pledged to combat climate change by joining the RE100 initiative, signing the Fashion Industry Charter for Climate Action and committing to the Science Based Targets initiative. The company aims to source 50% renewable electricity for all its facilities by 2025 and 100% by 2030. By this initiative, the company hopes to increase the global demand and supply of renewable energy and encourage its supply chain partners to do the same. The target for greenhouse gas emission reduction across the supply chain is 30%.

2. Use of technology and innovation to increase sustainability: Creativity, innovation and technology have an important role to play in minimizing environmental impact. PVH always makes efforts to modernize and improve operational processes to become more efficient and reduce waste. PVH has introduced digital showrooms that use 3D design technology which can be used to showcase merchandise instead of using physical samples. The elimination of physical samples leads to reduction in waste, energy usage and emissions that are a result of shipping and production of the samples. PVH’s retail partners are also happy about this technology because it not only reduces waste but also enables accurate forecasting and reduction in the production time by 24 weeks.