Glenview Capital and PVH
Glenview Capital is a $9.2 billion hedge fund. It’s administered by Larry Robbins. It raised its stake in PVH, an apparel company, in December 2014. According to Glenview’s 13G filing, the fund increased its position in PVH Corp. (PVH) by 427,000 shares. This brought its position to 4.5 million shares in the company. Now, the group holds 5.5% of PVH’s outstanding shares.
Glenview Capital’s retail holdings
Glenview Capital’s 3Q14 disclosure also showed several holdings in the retail sector. As of 3Q14, Glenview invested 8.62% in retail stocks—including J.C. Penney (JCP), Dollar General (DG), Family Dollar Stores (FDO), Carter’s Inc. (CRI), Fossil Group (FOSL), and PVH.
Currently, the US economy is in good shape. This is reflected by its robust gross domestic product, or GDP, growth rate of 5% in 3Q14. In turn, this was driven by strong consumption expenditure. During expansionary periods, retail stocks should benefit from the higher spending levels.
Carter’s, Fossil Group, and PVH’s business models have a lower proportion of fixed costs. They carry out a large extent of their operations through the wholesale channel. As a result, they have less of a burden associated with fixed costs impacting their profitability.
PVH is one of the world’s largest apparel companies. It owns and markets the iconic Calvin Klein and Tommy Hilfiger brands worldwide. It’s the world’s largest shirt and neckwear company. It markets a variety of goods under its own brands—Van Heusen, Calvin Klein, Tommy Hilfiger, IZOD, ARROW, and Warner’s and Olga.
Its licensed brands include Speedo, Geoffrey Beene, Kenneth Cole New York, Kenneth Cole Reaction, MICHAEL Michael Kors, Sean John, Chaps, Donald J. Trump Signature Collection, DKNY, Ike Behar, and John Varvatos.
The SPDR S&P 500 ETF (SPY) has an allocation of 0.05% for PVH.
In the apparel industry, operators are focusing on the retail side of their business. Through retail operations, companies generate higher margins.
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