INVESTMENTS IN UNCONSOLIDATED AFFILIATES
Australia
The Company formed a joint venture, PVH Brands Australia Pty. Limited (“PVH Australia”) in 2013, in which the Company owns a 50% economic interest. The joint venture licenses from a subsidiary of the Company the rights to distribute and sell certain Calvin Klein brand products in Australia, New Zealand and other island nations in the South Pacific. As part of the joint venture agreement, the Company contributed to the joint venture its subsidiaries that were operating the Calvin Klein jeans businesses in Australia and New Zealand. Upon completion of this contribution, which took place on the first day of fiscal year 2014, the Company deconsolidated these subsidiaries. The Company made a payment of $708 to PVH Australia during 2013 to contribute its 50% share of the initial funding. The Company will account for its investment in this joint venture under the equity method of accounting. Subsequent to February 2, 2014, the Company made an additional payment of $9,669 to PVH Australia to contribute its 50% share of funding. Such amount was placed into an escrow account prior to the end of 2013 and is classified as restricted cash, which is included in other current assets in the Company’s Consolidated Balance Sheets as of February 2, 2014.
Brazil
The Company formed a joint venture, Tommy Hilfiger do Brasil S.A., in Brazil in 2012, in which the Company owns a 40% economic interest. The joint venture holds an exclusive license for the Tommy Hilfiger brand in Brazil that became effective on January 4, 2013. The Company made payments of $2,760 and $6,464, to Tommy Hilfiger do Brasil S.A. during 2013 and 2012, respectively, to contribute its 40% share of the joint venture funding. This investment is being accounted for under the equity method of accounting.
China
The Company formed a joint venture, TH Asia Ltd., in China in 2010, in which the Company owns a 45% economic interest. The joint venture assumed direct control of the Tommy Hilfiger wholesale and retail distribution business in China from the prior licensee on August 1, 2011. The Company made payments totaling $17,100 to TH Asia Ltd. during 2011 to contribute its 45% share of funding. This investment is being accounted for under the equity method of accounting.
India
The Company acquired in 2011 for $30,000 a 50% economic interest in a company that has since been renamed Tommy Hilfiger Arvind Fashion Private Limited (“TH India”). TH India is the direct licensee of the Tommy Hilfiger trademarks in India for all categories (other than fragrance), operates a wholesale apparel, footwear and handbags business in connection with its license, and sublicenses the trademarks for certain other product categories. The Company made additional payments totaling $1,900 and $1,600 to TH India during 2012 and 2011, respectively, to contribute its 50% share of the joint venture funding. This investment is being accounted for under the equity method of accounting.
Included in other assets in the Company’s Consolidated Balance Sheets as of February 2, 2014 and February 3, 2013 is $71,331 and $62,021, respectively, related to these investments in unconsolidated affiliates.
