Calvin Klein owner buys Tommy Hilfiger

The Tommy Hilfiger fashion group is being bought by the owner of Calvin Klein, Philips-Van Heusen. The £2bn deal will create one of the world's largest clothing companies with $4.6bn revenue. Tommy Hilfiger is being sold by private equity firm Apax partners who bought it for $1.6bn

in 2006.

"I look forward to remaining actively involved in the business," said the company's eponymous founder and principal designer, Mr Tommy Hilfiger. "This is the next phase in the global evolution and expansion of the Tommy Hilfiger brand."

Philips-Van Heusen's stock price reacted positively, rising around 9% on Monday. The deal is made up of 1.9bn euros in cash and 276m euros of Philips-Van Heusen stock, so Apax partners will remain a shareholder in the business. Philips-Van Heusen's clothing lines include Calvin Klein, Van Heusen, Arrow, IZOD and Bass.

Chief executive and chairman Emanuel Chirico hopes buying Tommy Hilfiger will help them launch some of their brands internationally, "leveraging a combined global platform". He expects 60% of their revenue to come for the US and 40% from overseas. Philips-Van Heusen also expects to save $40m of cost synergies through the deal.

Tommy Hilfiger began in 1985 with a men's clothing line, and expanded into shoes, perfumes and women's and children's clothing. Their performance stalled at the end of the 1990s but over the last four years Apax partners have restructured and repositioned the business, expanding from 574 stores to over 1,000 outlets.

They said today they expect revenue for the year ending March 2010 tobe $2.25bn.

Image: Tommy Hilfiger campaign