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Warnaco Group

From Alfawiki
Warnaco Group, Inc.
Company typePublic (former)
IndustryTextiles, Apparel
PredecessorWarner Brothers Corset Manufacturers
Founded1874
FounderDr. Lucien Warner, Dr. Ira De Ver Warner
Defunct2013 (acquired by PVH)
FateAcquired by PVH Corporation
SuccessorPVH Corporation
Headquarters
Bridgeport, Connecticut
,
United States
Area served
Worldwide
Key people
Linda J. Wachner (former CEO)
ProductsUnderwear, sportswear, swimwear
ParentPVH Corporation (2013–present)

Overview

Warnaco Group, Inc. was a prominent American company specializing in textiles and apparel, engaged in designing, sourcing, marketing, licensing, and distributing an extensive assortment of underwear, sportswear, and swimwear across global markets. Its product portfolio featured well-known brands such as Calvin Klein, Speedo, Chaps, Warner's, and Olga.

On 31 October 2012, Warnaco disclosed plans to be acquired by PVH in a transaction valued at $2.8 billion, comprising both cash and stock components.

This acquisition enabled PVH to consolidate control over the Calvin Klein brand by integrating its formal wear, underwear, denim, and sportswear segments. The merger was finalized in February 2013.

In November 2023, PVH divested the Warners and Olga brands to Basic Resources, Inc.

History

File:LucienWarner1889.jpg
Lucien Warner, 1889.
Dr. Warner's Coraline Health Corset, 1895
Dr. Warner's Coraline Health Corset

Dr. Warner's Health Corsets

During the late 1800s, Dr. Lucien Warner, a well-known physician from Cortlandville, New York, left his medical practice to pursue a career as a lecturer focused on women's health concerns. He spoke extensively about the damaging consequences of the stiff steel-boned corsets prevalent at the time. Observing that his presentations had minimal impact on changing women's fashion choices, he returned home to New York and adopted a more proactive strategy to address the health problems caused by traditional corsets.[1]

In 1873, Dr. Warner introduced a corset design that combined the fashionable silhouette women desired with enhanced flexibility to permit greater movement and reduce injury risks associated with earlier models. The following year, Lucien and his brother Dr. Ira De Ver Warner left their medical careers to establish Warner Brothers Corset Manufacturers.[2]

Marketed as Dr. Warner's Coraline Health Corsets,[3] these innovative garments consisted of two fabric panels fastened by lacing or clasps. They incorporated shoulder straps along with more pliable boning and side bust supports[4] crafted from Coraline—a material derived from fibers of the Mexican Ixtle plant.[5][6] By 1876, growing demand for this flexible corset prompted the company to relocate production to Bridgeport, CT. There, around 1,200 workers manufactured roughly 6,000 corsets daily.[7] In 1883, Harper's Bazaar featured Dr. Warner's models as four of the most sought-after corsets in the United States.[8] The Warner brothers secured patents and trademarks for their "health corset" and expanded manufacturing internationally.Cite error: The opening <ref> tag is malformed or has a bad name Their success turned them into millionaires, and in 1894 they retired, passing company leadership to De Ver’s son D.H., while transforming the partnership into a corporation.

The Warner Brothers Corset Co.

At the dawn of the 20th century, the company experienced heightened prosperity under the leadership of the founders' sons. Innovations introduced during this period included a rust-resistant corset and a combined corset with an integrated hose-supporter. By 1913, annual sales had climbed to $7 million, with profits averaging around $700,000. Two years later, The Warner Brothers Corset Co. acquired Mary Phelps Jacob's patent for the brassiere for $1,500, a strategic purchase that helped elevate revenues to $12.6 million by 1920.

During the 1920s, the Jazz Age and Flapper era brought a shift toward less constrictive attire. Women embraced a more liberated lifestyle, replacing corsets and pantaloons with breast-binding bandeaus and step-in panties.

This period posed significant challenges for the company. Sales declined throughout the decade, and attempts to adjust to evolving fashion trends met with limited success.

Depression Era

The Great Depression of the 1930s proved challenging for the apparel sector, and Warner was no exception to these economic hardships. Although curvier silhouettes replaced the boyish styles favored by Flappers, Warner continued to face difficulties. By 1932, losses had surpassed $1 million. Compounding these financial woes was the deteriorating personal life of CEO D. H. Warner, notorious for his indulgent lifestyle. Following his wife's death in 1931, D.H. financed his excesses with company funds and struggled with alcoholism until his death in 1934 at age 66. Leadership then passed to his son-in-law, John Field.

Warner's ABC Alphabet Bras
Warner's ABC Alphabet Bras offer expertly crafted designs ensuring an ideal fit for every customer—A, B, C, or D.

ABC and IPO

By the mid-1930s, as corsets became obsolete, new management directed efforts toward product innovation. In 1937, the company transformed brassiere design by introducing lettered cup sizes. The ABC Alphabet Bra established a sizing system still recognized today. By the early 1940s, profitability returned, reaching $1 million by 1947. Strong sales of bras and girdles, along with cross-promotion of the Merry Widow corselet line tied to Lana Turner’s 1952 film of the same name, resulted in record earnings.

A collaboration between DuPont and Warner in 1959 led to the creation of Lycra, enabling advancements in shapewear and more form-fitting bras. In the late 1950s, Warner Brothers broadened its product range to include menswear, accessories, and sportswear for both genders. Distribution expanded through major chain department stores such as JC Penney and Sears. Production facilities were also established internationally in South America and Europe. The acquisition of prominent American shirtmaker C.F. Hathaway in 1960 further solidified Warner Brothers’ position in sportswear. The company went public in 1961 and soon surpassed $100 million in revenue. In 1966, it acquired another significant apparel producer, White Stag Manufacturing Company.

Warnaco

In 1968, The Warner Brothers Company rebranded itself as Warnaco, Inc., embarking on significant expansion through numerous mergers and acquisitions during the 1970s. By the mid-1970s, Warnaco had evolved into a global apparel conglomerate encompassing nearly 20 distinct divisions. Despite this broad diversification, the company faced challenges in achieving profitability. Anticipating potential failure, Field transferred leadership responsibilities to James Walker and Philip Lamoureux, with Walker appointed as CEO in 1977.

Under the guidance of Lamoureux and Walker, the company experienced a swift recovery; however, Lamoureux departed in 1982 and Walker unexpectedly passed away the following year. In 1983, Warnaco reported revenues of $28.3 million. Nevertheless, some cost-reduction strategies implemented by the duo—such as scaling back research and advertising expenditures—ultimately proved detrimental to the company’s performance. After a nine-year absence, former lingerie division president Linda J. Wachner orchestrated a $550 million hostile takeover in 1986. Wachner had previously revitalized Max Factor, turning the struggling cosmetics firm profitable within two years. Upon assuming control at Warnaco, she immediately consolidated the company's fifteen divisions into two primary sectors: menswear and underwear.

The Wachner years

In 1990, Wachner established Authentic Fitness Corp., a new entity designed to separate Warnaco’s activewear brands like Speedo and White Stag ski apparel. Her vision was to evolve Speedo from solely a swimwear brand into a broader retail concept. Authentic Fitness went public in June 1992 and launched its first Speedo Authentic retail outlet five months later. By 1993, Authentic Fitness had secured a licensing agreement with Oscar de la Renta, Ltd. and acquired several swimwear brands—Cole, Catalina, and Anne Cole—all emerging from bankruptcy proceedings. That same year, Wachner also secured sponsorship for the 1996 Summer Olympics held in Atlanta, Georgia.

By 1991, Warnaco’s lingerie division held licensing agreements with prominent designers such as Valentino, Ungaro, Scaasi, Bob Mackie, Victoria's Secret, and Fruit of the Loom. Its menswear segment produced shirts, sweaters, neckties, and other accessories under prestigious labels including Christian Dior, Hathaway, Chaps by Ralph Lauren, and Jack Nicklaus. The company achieved gross profits of $195.4 million by the end of that year, earning Linda Wachner the title of Business Woman of the Year from Fortune magazine.

Throughout the remainder of the decade, Wachner aggressively expanded Warnaco’s portfolio by acquiring notable designer brands including Calvin Klein Underwear, Body Slimmers (purchased from Nancy Ganz), ABS by Allan Schwartz, as well as private label sleepwear manufacturer GJM Group and French lingerie firm Lejaby-Euralis. Additionally, Warnaco obtained licenses for Calvin Klein Jeans and Calvin Klein retail outlets via its acquisition of Designer Holdings, Inc., and acquired rights for Calvin Klein children's apparel from Commerce Clothing. Toward the end of the 1990s, the company divested its underperforming Hathaway brand and reacquired Authentic Fitness.

Warnaco’s peak success came in 1998 with revenues reaching $1.95 billion. However, sales soon declined sharply and burdened by debt from its numerous acquisitions and mergers, the company reported losses amounting to $200 million in 2000. Consequently, Warnaco filed for Chapter 11 bankruptcy protection in 2001, leading to Linda Wachner's dismissal from her leadership role.

A fresh start

Warnaco emerged from bankruptcy on 4 February 2003. During its reorganization, the company divested the White Stag trademark to Wal-Mart and later chose to withdraw from the designer swimwear segment, concentrating instead on enhancing its Speedo product line.

After owning Ocean Pacific for only three years, Warnaco sold the brand to Iconix Brand Group. Additionally, the company parted with the Catalina, Anne Cole, and Cole of California labels, generating roughly $25 million from these transactions.

In 2008, Warnaco discontinued operations under the Michael Kors and Nautica brands due to combined losses amounting to $1.7 million. To further strengthen its swimwear division, Speedo extended its endorsement agreement with eight-time Olympic gold medal winner Michael Phelps, securing his partnership through the 2012 Summer Games.

Warnaco manufactures private label swimwear for Victoria's Secret.

To reinforce its "core intimates" portfolio, which includes Warner's, Olga, and Calvin Klein Underwear, the company divested private label GJM and the upscale lingerie brand Lejaby.

Since emerging from bankruptcy, Warnaco Group has demonstrated consistent growth in its annual income reports.

Calvin Klein remains a key contributor to the company's success within both jeans and intimates categories. As of 2 January 2010, Warnaco operated more than 1,000 Calvin Klein retail locations globally along with three e-commerce stores. It also licenses or franchises an additional 624 outlets. In 2009, Calvin Klein accounted for 75% of Warnaco Group's $2 billion net sales.

By the end of the second quarter of 2010 (ending 3 July), all three divisions—Intimates, Swimwear, and Sportswear—played a role in driving a 14% increase in net revenues to $519.3 million. Industry experts anticipate ongoing expansion. In August 2010, The Motley Fool recognized Warnaco as one of its Top 10 Values in Consumer Durables, highlighting the stock’s attractive price-to-earnings ratios, low risk profile, and growth prospects.

Further information on Current brands and licenses: § Current Licenses

Bridgeport Strike of 1915

In the summer of 1915, roughly 1,300 female employees at The Warner Brothers Corset Company factory in Bridgeport, Connecticut initiated a work stoppage. This strike was among 179 labor disputes documented that year and centered on demands for an eight-hour workday and a 20% wage increase. By August 18, nearly 4,000 workers—organized under the International Textile Workers of America—agreed to management’s proposal granting an eight-hour day and a 12.5% pay raise.

During the strike, reports emerged of one employee sustaining injuries. According to Connecticut’s The Day, a Miss Jones, believed to have opposed negotiation efforts, was allegedly assaulted by fellow strikers who almost tore her clothing. No arrests followed this incident.

Made in the U.S.A.

File:Saipan Garment Factory 1.JPG
Loading ramp of garment factory on Saipan

In early 1999, Warnaco was among eighteen corporations initially implicated in multiple class-action lawsuits filed under the US Federal RICO laws. These suits were brought forth by various labor and human rights organizations representing over 50,000 workers from countries including China, the Philippines, Bangladesh, and Thailand. Ultimately, twenty-six U.S. firms and twenty-three garment factories based in Saipan, Northern Mariana Islands, a United States Commonwealth, were named defendants.

The allegations stated that these Saipan factories routinely employed immigrant laborers who were deceived into paying recruitment fees up to $7,000 for U.S. employment opportunities. Upon arrival, workers were compelled to surrender their passports and work off these debts, effectively placing them in conditions akin to indentured servitude. Additionally, plaintiffs claimed they were forced to sign clandestine agreements relinquishing fundamental rights such as freedom to marry or date. The complaints also highlighted overcrowded, unsanitary working environments and substandard housing arrangements that flagrantly violated federal regulations.

Warnaco promptly denied any misconduct, asserting that their subcontractors comply fully with U.S. laws. In spring 1999, Warnaco was among the first companies to reach a settlement. By 2004, all involved companies except Levi Strauss—whose case was eventually dismissed—had resolved the litigation without admitting fault. The settlement secured $20 million collectively for the Saipan garment workers alongside enhanced monitoring and improved labor conditions.

SEC investigation

On May 11, 2004, the Securities and Exchange Commission disclosed a settlement concluding its extensive three-year inquiry into Warnaco and its auditor, PricewaterhouseCoopers. This probe originated from a $145 million inventory overstatement reported in Warnaco's 1998 Form 10-K. The SEC asserted that Warnaco was aware of this discrepancy when it issued a press release celebrating "record results" for the fourth quarter and fiscal year of 1998. Consequently, Warnaco was compelled to restate its earnings for the preceding three years. The commission criticized the company for inaccurately presenting the inventory write-down as part of a write-off related to deferred start-up costs under a new accounting standard.

The SEC's allegations also implicated PwC, stating that although the firm identified the error during its audit, it failed to challenge Warnaco’s misrepresentation of the issue. Moreover, PwC incorporated this misleading characterization into its audit report on Warnaco’s 1998 financial statements.

The lawsuit named William Finkelstein, who served as vice president and CFO during the period in question. The SEC claimed that as CFO, Finkelstein managed the offsetting of cash against debt and reviewed and signed the quarterly report. Linda Wachner, then president and CEO, was also charged; according to the SEC's settlement announcement, she either knew or should have known that the financial restatement resulted from significant deficiencies in cost accounting and internal controls within one of Warnaco’s major divisions—not from deferred start-up costs as claimed. The commission further concluded that Wachner was aware or should have been aware of the division’s inadequate inventory costing control system and failed to implement sufficient internal controls. Stanley P. Silverstein, Warnaco’s general counsel at that time, was similarly named for his role in approving the report.

PricewaterhouseCoopers agreed to settle with the SEC by paying a $2.4 million fine. Wachner was held responsible for the oversight and ordered to disgorge $1.3 million. Finkelstein faced disgorgement of $189,464 plus a civil penalty of $75,000 and received a four-year prohibition from holding officer or director positions in public companies. Silverstein was censured and required to pay $165,772.

Calvin Klein, et al. vs. The Warnaco Group, et al.

On May 30, 2000, Calvin Klein, Inc. initiated legal action against Warnaco Group, Inc. and its CEO, Linda Wachner. The complaint asserted that Warnaco had diluted the Calvin Klein brand by manufacturing products without authorization or approval from Calvin Klein. Additionally, Warnaco was accused of distributing Calvin Klein jeanswear through unauthorized discount retailers, including warehouse clubs such as Costco and BJ's Wholesale Club. Shortly after the lawsuit was announced, Calvin Klein appeared on CNN's Larry King Live and revealed that these questionable practices had been ongoing since Warnaco obtained the license three years earlier. Klein aimed to reclaim control over the jeanswear licensing rights. Warnaco’s initial reply to the allegations—read aloud by Larry King during the broadcast—dismissed the claims as "baseless." The statement also charged Calvin Klein with "casting blame on Warnaco" in a "desperate effort... to divert attention from CKI's severely declining business condition." In reaction to Klein’s televised remarks, Warnaco filed a countersuit accusing him of trademark defamation, alleging that he disparaged both Warnaco and his own product lines. The dispute was ultimately resolved in 2001 with a settlement concluded by a symbolic "fashionista air kiss" on the steps of a New York courthouse.

Although the full terms of the settlement remain confidential, certain details have been disclosed publicly. Warnaco retained its Calvin Klein licensing rights, while Calvin Klein regained some creative authority that had previously been relinquished under the original licensing agreement. The settlement begins with:

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Financial setbacks and executive exit

When Linda Wachner assumed control of Warnaco through a hostile takeover, she succeeded in cutting the company's debt by 35% within a span of four years. However, following a series of acquisitions in the mid-1990s, her leadership once again pushed the apparel giant toward financial distress. Notably, in 1995, under her direction, Warnaco missed inclusion in the Fortune 500 list for the first time in almost three decades.

Time magazine characterized Warnaco’s repurchase of Authentic Fitness as "financial maneuvers that temporarily boosted Wachner's personal earnings but ultimately burdened Warnaco's balance sheet with an additional $600 million in liabilities." Between 1998 and 2000, the company's stock value plummeted by roughly 75%, yet Wachner maintained a base compensation of $2.7 million alongside bonuses and private stock totaling $12.5 million.

Following her removal from the CEO position, Wachner was denied the $25 million golden parachute stipulated in her contract. She pursued legal action against Warnaco and ultimately settled in 2002 for $3.5 million worth of new company shares plus $200,000 in cash, which she pledged to contribute to cancer research. Wachner remained a member of the board of directors until her term concluded in 2003.

Former licenses

Information derived from the Warnaco 2009 Annual Report:

Template:Blockquote

The table below lists the Company's trademarks and licenses as of January 2, 2010:

Owned Trademarks

  • Warner's
  • Olga
  • Body Nancy Ganz/Bodyslimmers
  • Calvin Klein and formatives (held beneficially for men's, women's, and children's underwear, loungewear, and sleepwear)

Trademarks Licensed Indefinitely

Before Warnaco was acquired by PVH, these trademarks were licensed indefinitely to Warnaco, with the licenses subsequently assumed by PVH.

Trademark Region
Speedo United States, Canada, Mexico, Caribbean Islands
Fastskin (a secondary Speedo brand) United States, Canada, Mexico, Caribbean Islands

Trademarks Previously Licensed for a Fixed Duration

These trademarks had been licensed for a defined period prior to PVH's acquisition of Warnaco.

Trademark Region Present Status
Calvin Klein (men's, women's, juniors' jeans and related denim products) North America, South America, Central America Brand owner PVH acquired Warnaco.
CK/Calvin Klein Jeans (retail stores selling men's, women's, juniors' jeans and related products bearing the Calvin Klein marks) Canada, Mexico, Central and South America Brand owner PVH acquired Warnaco.
CK/Calvin Klein (bridge clothing, accessories, and retail stores selling these items) European Union countries, Norway, Switzerland, Monaco, Vatican City, Liechtenstein, Iceland, parts of Eastern Europe, Russia, Middle East, Africa Brand owner PVH acquired Warnaco.
CK/Calvin Klein (retail stores selling bridge and jeans accessories) Central and South America (excluding Mexico), Europe and Asia Brand owner PVH acquired Warnaco.
Calvin Klein and CK/Calvin Klein (men's, women's, children's jeans and related apparel including retail stores) Western Europe (including Ireland, Great Britain, France, Monte Carlo, Germany, Spain, Portugal, Andorra, Italy, San Marino, Vatican City, Benelux countries, Denmark, Sweden, Norway, Finland, Austria), Switzerland, Liechtenstein, Greece, Cyprus, Turkey and Malta; parts of Eastern Europe; Russia; Middle East; Africa; Japan; China; South Korea; and other Asian regions such as Hong Kong, Thailand, Australia, New Zealand, Philippines, Taiwan, Singapore, Malaysia, Indonesia, New Guinea, Vietnam, Cambodia, Laos, Myanmar, Macau and the Federated States of Micronesia Brand owner PVH acquired Warnaco.
CK/Calvin Klein (independent or shared e-commerce platforms for jeans and accessories) North America, Europe and Asia Brand owner PVH acquired Warnaco.
CK/Calvin Klein (independent or shared e-commerce platforms for jeans and accessories) Central and South America (excluding Mexico) Brand owner PVH acquired Warnaco.
Calvin Klein (jeans accessories) European Union countries plus Norway, Switzerland, Monaco (Monte Carlo), Vatican City, Liechtenstein Iceland; parts of Eastern Europe; Russia; Middle East; Africa; Asia Brand owner PVH acquired Warnaco.
Chaps (men's sportswear including jeanswear, activewear and swimwear) United States, Canada, Mexico, Puerto Rico and Caribbean Islands License returned to brand owner Ralph Lauren Corporation after PVH acquisition; currently licensed to O5 Apparel.
Calvin Klein and CK/Calvin Klein (women's and juniors' swimwear) Worldwide for Calvin Klein; worldwide in approved forms for CK/Calvin Klein Brand owner PVH acquired Warnaco.
Calvin Klein (men's swimwear) Worldwide Brand owner PVH acquired Warnaco.
Lifeguard (clothing excluding underwear and loungewear) Worldwide including United States, Canada Mexico Caribbean Islands and all other trademark filing jurisdictions Current status unknown.

See also

References

  1. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named autogenerated6
  2. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named autogenerated7
  3. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named autogenerated9
  4. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named autogenerated10
  5. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named patent403161
  6. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named sanitary
  7. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named autogenerated11
  8. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named autogenerated12

Further reading

External links

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