PVH to cut 4% of workforce in $100 million savings drive

PVH Corp. told employees on Thursday it will cut about 4% of its global workforce, roughly 1,040 jobs, as part of a plan to save $100 million during fiscal 2027. The parent of Calvin Klein and Tommy Hilfiger began the fiscal year with about 26,000 employees.

The reductions fall mostly on non-consumer-facing positions and amount to around 12% of office-based associates, chief executive Stefan Larsson wrote in a memo obtained by WWD. He called the moves part of an enterprisewide effort to improve productivity and strengthen long-term growth.

Changes start immediately and continue through the first quarter, according to the memo. Larsson told staff the company would simplify how it works by cutting duplicative work and reducing organisational layers so that decisions can be made faster at the point where they matter.

“These are difficult decisions that we do not take lightly. Our colleagues who will be affected have helped build the progress we are proud of today,” Larsson said. He pledged that those leaving would be treated with care and given support, resources and guidance through the transition.

PVH framed the restructuring as an investment in product innovation, its supply chain and e-commerce rather than a retrenchment.

Larsson has been reshaping PVH for several years around a plan to push hero products with heavy marketing and digital reach while tightening operations. In the memo he listed what he called real progress: divesting non-core businesses to focus fully on Calvin and Tommy, and growing e-commerce.

He said the company had also strengthened its standing with younger consumers, built leading social followings and engagement, grown its key product franchises and begun elevating the shopping experience. The common thread, he wrote, is that leaning into the consumer offering works across both brands.

What the restructuring aims to scale

“When we lean in and drive improvements to the consumer offering all the way through to our doors and stores, it works,” Larsson said. Consumers respond and both revenues and margins grow across both brands and all three regions, he added, so the biggest opportunity now is scaling what works across more of the company.

The frame Larsson uses is a “consumer flywheel”: stronger products, stronger consumer engagement and stronger marketplace execution. The cuts are meant to free the organisation to spin that wheel faster by simplifying how it works and increasing the impact of what it does at every consumer touchpoint.

The memo closed with three bullet points that set the direction for the next phase, including getting closer to key partners and consumers and accelerating the flywheel across both Calvin and Tommy. Larsson struck a note of self-direction rather than reaction to outside pressure.

The quarter behind the cuts

PVH's second quarter, ended 2 August, brought revenue of $2.1 billion, a decline of 3% on a constant-currency basis. That was better than the 4% to 5% drop the company had projected and in line with analyst estimates. Retail Dive puts the comparable figure at about $2 billion, down 3%.

Tommy Hilfiger revenue was roughly flat in the quarter while Calvin Klein dropped 7%, according to the company's September release. Revenue fell in Europe, the Middle East and Africa and in the Americas, while Asia Pacific showed gains. The company held its full-year guidance at flat revenue compared with the prior year.

Larsson pointed to green shoots in areas where adjustments have been made, including Calvin Klein's underwear and jeans businesses, and he said Tommy Hilfiger had gained in key categories. E-commerce is the clearest evidence the brand investments are working, Jefferies analysts wrote after meeting management in October.

“E-com is the strongest evidence that brand investments are working,” the Jefferies analysts said in an emailed note. They expect the target consumer, marketing and product assortment to help e-commerce further, though they warned Europe has seen outsized pressure and the outlook for next year remains uncertain.

“We remain encouraged by recent greenshoots in the business,” the analysts wrote, even as they flagged that Europe weighs on the company and the coming year is hard to read. PVH earlier this year made a series of leadership changes, including a new chief financial officer and new heads for the Americas and Asia Pacific.

The layoffs land on a company that has spent the past two years narrowing itself to two global banners. Larsson's memo framed the job cuts not as a retreat but as the completion of that focus, positioning PVH to scale what has worked in the brands where it chose to concentrate.

“The world around us will keep changing, what we can control is how we work, where we choose to focus, and how well we deliver for our consumers,” Larsson said. He closed by saying the growth plan and the actions announced on Thursday put the company's future in its own hands.

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Image: PVH Corp.