In 1968, Calvin Klein founded Calvin Klein Limited, a coat shop in the York Hotel in New York City, with $10,000. The first Calvin Klein collection was a line of "youthful, understated coats and dresses" featured at the New York City store, Bonwit Teller. Just one year later, in September 1969, Klein’s designs appeared on the cover of American Vogue.
By 1971, Klein had added sportswear, classic blazers, and lingerie to his women's collection. In 1973, he received his first Coty American Fashion Critics' Award for his 74-piece womenswear collection - the youngest recipient at that time. Klein won the award again in 1974 and 1975. By 1977, annual revenues had increased to $30 million, and Klein had licenses for scarves, shoes, belts, furs, sunglasses, and sheets. In 1978, Klein claimed sales of 200,000 pairs of his famous jeans the first week they were on the market. By 1981, Fortune figured Klein's annual income at $8.5 million a year. In the mid-1970s, he had created a designer-jeans craze by putting his name on the back pocket.
In the late 1970s, the company also made attempts to set up its own fragrance and cosmetics lines, but soon withdrew from the market with big financial losses. In the 1980s, as the designer-jeans frenzy reached its all-time high, Calvin Klein introduced a highly successful line of boxer shorts for women and a men's underwear collection which would later gross $70 million in a single year. In the early 1980s, Klein changed the American market of men's underwear—one where most men's underwear was white, purchased in packs of three by a "wife, mother or girlfriend when they needed to be" to one where "the American male to care about the brand of something few ever see".
The stunning growth continued through the early eighties. The licensing program, which brought in $24,000 when it was initiated in 1974, had royalty income of $7.3 million ten years later. That year, worldwide retail sales were estimated at more than $600 million. Klein's clothes were sold through 12,000 stores in the United States and were available in six other countries. His annual income passed $12 million.
Financial problems, increased pressure from all sides, disagreements with the licensee of the menswear line and its disappointing sales as well as an enormous employee turnover both within Calvin Klein and its licensing partners led to the first rumors that Calvin Klein Industries, as the company had been known by then, was up for sale. And indeed, in late 1987, it was said that the sale of the company to Triangle Industries, a container manufacturer, had only failed because of the crashing stock market.
Although the company almost faced bankruptcy in 1992, Calvin Klein managed to regain and increase the profitability of his empire throughout the later 1990s, mainly through the success of its highly popular underwear and fragrance lines, as well as the ck sportswear line. During his 1990-1995 stint as Calvin Klein's head of menswear design, John Varvatos pioneered a type of men's underwear called boxer briefs, a hybrid of boxer shorts and briefs.
Made famous by a series of 1992 print ads featuring Mark "Marky Mark" Wahlberg, they have been called "one of the greatest apparel revolutions of the century." Klein was named "America's Best Designer" for his minimalist all-American designs in 1993.
The early ads were shot by Bruce Weber and Richard Avedon. Avedon photographed and directed the Calvin Klein Jeans campaign that featured a fifteen-year-old Brooke Shields. Some of those television commercials were banned, including the infamous ad where Brooke asks "Do you want to know what comes between me and my Calvins? Nothing!" Calvin Klein's advertising campaigns are frequently controversial, but prove this can be very successful, to the point of making a blitz career. One of his male underwear models, Mark Wahlberg, went on to fame as hip hop star "Marky Mark", launching himself into the Hollywood scene to become a current popular actor. In the early 1990s, Calvin Klein was also responsible for launching the international career of supermodel Kate Moss and offering her another opportunity to revive her career in 2002 after cocaine allegations.
Other spokes models were Natalia Vodianova , Scott King and Toni Garrn, whose career were launched by Calvin Klein, too. Current spokesmodels of the brand are Tyson Ballou and Lara Stone. Other models who have modelled for Calvin Klein include Christy Turlington, Jerry Hall, Patti Hansen, Tom Hintnaus, David Agbodji, Travis Fimmel, Doutzen Kroes, Mini Anden, Garrett Neff, Sean O'Pry, Edita Vilkeviciute, Jamie Dornan, Liu Wen , Edward Furlong and Vladimir Ivanov. Actors such as Eva Mendes, Mehcad Brooks, Scarlett Johansson, Kellan Lutz, Andie MacDowell, Alexander Skarsgard, Zoe Saldana, Rooney Mara and Diane Kruger have also been chosen to model for the brand. Swedish footballer Freddie Ljungbergstarred in a series of hugely successful underwear adverts for the brand.
In mid-December 2002, Calvin Klein Inc. was sold to Phillips Van Heusen Corp (PVH), whose then CEO Bruce Klatsky was the driving force behind the deal, for about $400 million in cash, $30 million in stock as well as licensing rights and royalties linked to revenues over the following 15 years that were estimated at $200 to $300 million. The sale also included an on-going personal financial incentive for Klein based on future sales of the Calvin Klein brand.
PVH outbid VF Corp., the maker of Lee and Wrangler jeans, which had also been interested in the jeans, underwear and swimwear business of CK that had been controlled by Warnaco Group, maker of Speedo swimwear in the US, since 1997. The transaction between Calvin Klein and PVH was financially supported by Apax Partners Inc., a New York private equity firm, which is said to have made a $250 million equity investment in PVH convertible preferred stock, as well as a $125 million, two-year secured note, all in exchange for seats on the board of PVH.
CKI thus became a wholly owned subsidiary of PVH. In the beginning, Klein himself, who was included as a person in the 15-year contract he had signed with PVH, remained creative head of the collections but then continued as an advisor (consulting creative director) to the new company from 2003 on and has since been more withdrawn from the business.
Calvin Klein is also world famous for various lines of perfumes and colognes, including Obsession and Eternity. Until May 2005, Calvin Klein Cosmetics Company (CKCC), a Unilever company, maintained their perfumes and the corresponding fragrance lines. Cosmetics giant Coty, Inc. of New York bought the fragrance licensing agreements from Unilever.