New York, Dec. 17 (Reuters): Fashion company Calvin Klein Inc. is near an agreement to sell itself to shirt maker Phillips-Van Heusen Corp for about $ 400 million in cash, The Wall Street Journal reported on Tuesday.
The report said that final details were being hammered out on Monday night, and a deal, involving roughly $ 30 million in stock and potential royalties that could be valued between $ 200 million to $ 300 million over time, is expected to be announced as early as Tuesday.
Calvin Klein and his partner Barry Schwartz founded the company in 1968 with an initial stake of $ 10,000. Together, the two men built a glamorous, high-profile business with a brand known from Hong Kong to Paris.
However, the company suffered some serious reversals and has never succeeded in going public, the article said. An earlier effort to sell the company for $ 1 billion three years ago failed.
The purchase is a personal victory for Bruce Klatsky, Phillips-Van Heusen chief executive, who pushed hard for the deal because it fits with his plans to bring designer brands under the companyís stable and then expand them, as the company is doing with Izod, the report said.
Phillips-Van Heusen beat out a competing proposal from VF Corp, the Greensboro, N.C. maker of Lee and Wrangler Jeans. VF was also interested in buying Calvin Kleinís jeans and underwear businesses, now controlled by Warnaco Group Inc. that is under Chapter 11 bankruptcy protection.
After the deal is complete, Phillips-Van Heusen will be renamed Calvin Klein Co, the article said.
Klein is expected to negotiate a consulting agreement with Phillips-Van Heusen and will have a hand in picking his successor.
Officials at Calvin Klein and Phillips-Van Heusen were not immediately available to comment on the report early Tuesday.