Designs for life

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Tom Murry, Calvin Klein president.

Calvin Klein president Tom Murry tells Andrew White how the iconic US fashion studio plans to drive expansion throughout the Middle East.

At the real high-end level, designer fashion is a very difficult business to make money in," muses Tom Murry as we take our seats in the plush living room of a suite at Dubai's lavish Park Hyatt hotel. "It's not impossible, of course. But it's difficult."

While he cannot imagine sowing a cash cow purely out of haute couture, the president of iconic fashion studio Calvin Klein Ltd (CK) does himself dress at the top end of the US giant's range.

Reclining in a US$1500 'Black Label' suit and shirt, he keeps cool even when the air conditioning splutters to a stop near the end of our interview.

Still, pricey personal preferences aside, Murry is acutely aware that the most profit is to be made in prêt-a-porter apparel, as opposed to high-end fashion.

"The reason we and most of our competitors are in at the luxury designer level is to set the halo, set the image for the brand so that they can sell some of the lower priced products," he explains.

"I don't know if it will ever become a money maker, but then it's not really important because any loss that occurs there I consider a marketing expense."

For a brand such as CK, marketing and image is everything, which is why Murry is in the Gulf for a gala reception to showcase products from the company's Spring 2008 lines.

The event also promises a sneak peek at 'ck Calvin Klein Beauty', a new line of colour cosmetics that will debut at the Mall of the Emirates later this month.

"Most of our management team is here with me this week, and although this region is a relatively small percentage of our volume, it's growing very quickly," suggests Murry.

"We're seeing compounded double digit growth, and I see no reason why that won't continue. We have nine stores in Dubai today, and 18 in the region in total, and we'll continue to add stores for many years to come."

While such growth is encouraging, CK is in over 70 markets globally, and the Middle East's contribution to the company coffers does pale in comparison with that of the US and European markets.

The Gulf represents around US$50m of CK's global retail business of just under US$5.4bn - a healthy slice, but one that indicates that the region has plenty to do if it is to become a significant revenue driver for CK.

Fortunately, Murry believes that the Gulf will not have to wait for long before it is responsible for a far greater proportion of CK's revenues.

"Today our balance is good geographically - about 50% US, 25% Asia, and 25% Europe and the Middle East," Murry explains. "The projections we have in place today show those balances remaining constant for at least the next five years."

"However, if you look way long-term, 10 years and beyond, I think it's entirely conceivable that more than half of our business could be in Asia," he continues.

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