Retail

CEO of Calvin Klein owner: Clothes returned to go into quarantine

Key Points
  • PVH CEO Manny Chirico told CNBC that products returned to company-owned stores go into quarantine for 48 to 72 hours as a precaution against the coronavirus. 
  • Retail during the pandemic is "a brave new world," Chirico said on "Squawk Box."
  • "It looks like the consumers really want to come back and shop, and we have to just manage this whole process," he said. 
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PVH CEO on the state of retail during the Covid-19 pandemic

The Tommy Hilfiger polo that just got returned is headed into quarantine for a few days. Then after a cleaning, it can go back out on the floor for sale. 

Such is retail in what PVH CEO Manny Chirico called "a brave new world" during the coronavirus pandemic. Chirico is among those who survived having Covid-19.

"We've closed our fitting rooms for now, and we've extended our return policy and we've made it more generous," Chirico said Wednesday on CNBC's "Squawk Box." "When goods are returned, we basically put goods in quarantine for 48 to 72 hours. We provide a cleaning to those goods before they go back onto the floor."  

PVH, whose brands include Hilfiger and Calvin Klein, is also shortening its store hours to provide robust cleaning and will offer masks to customers upon entry, Chirico said. While face coverings are encouraged for shoppers, employees are required to wear masks and gloves, he said. 

Plexiglass shields are installed at registers, too, providing a safety buffer between shopper and worker.

The coronavirus is believed to mainly be transmitted through respiratory droplets, although it can survive on surfaces for lengths of time depending on the material. For example, the virus remained active on stainless steel and plastic surfaces for two to three days, according to one National Institutes of Health study

About 180 company-operated stores are now open across North America, representing about one-third of its locations, Chirico said. In Europe, about 60% of PVH stores are open, while in Asia around 90% are back in business.

Chirico said that globally, once a store opens, traffic and sales build up over time. The trend is now playing out in the U.S. as states ease coronavirus-related restrictions

Traffic at stores is being restricted to 25% capacity, so social distancing can be maintained, Chirico said. In an optimistic sign, a higher percentage of people who go to shop at PVH's stores make a purchase, he added. 

"We think the consumers that are entering the stores are ... more dedicated shoppers. They're really there on a mission," said Chirico, who was asymptomatic when he was diagnosed with Covid-19. "It looks like the consumers really want to come back and shop, and we have to just manage this whole process."

As for what people are buying, Chirico said casual, core basic items are doing well both in store and online, "as you would expect." 

Formal items and tailored clothing continue to remain less popular, he said, with work-from-home policies remaining common and events canceled. 

But those categories are starting to come back in Europe and Asia as people return to work and social gatherings, Chirico said. 

Shares of PVH were up 2.4% on Wednesday. The stock is down nearly 60% in 2020.