In 1968, Calvin Klein founded Calvin Klein Limited, a coat shop in the York Hotel in New York, with $10,000. The first Calvin Klein collection was a line of "youthful, understated coats and dresses" featured at the New York 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. 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 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 cared about the brand of something few ever see."
The stunning growth continued through the early '80s. The licensing program, which brought in $24,000 when it was initiated in 1974, had royalty income of $7.3 million ten years later. In 1984, 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.
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-to-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, the boxer briefs were 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.
Calvin Klein's advertising campaigns were frequently controversial, but this proved to be very successful. 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.
In mid-December 2002, Calvin Klein Inc was sold to Phillips Van Heusen Corp (PVH), whose then chief executive Bruce Klatsky was the driving force behind the deal, for about $400 million in cash and $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.
Initially, Klein remained creative head of the collections as part of the 15-year contract with PVH, but then continued as an advisor (consulting creative director) to the new company from 2003, 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. Calvin Klein Cosmetics Company was owned by Unilever until May 2005, when it was bought by Coty Inc.