Phillips-Van Heusen Corporation to Acquire Arrow Brand from Cluett American.

NEW YORK -- Phillips-Van Heusen Corporation (NYSE:PVH) announced today that it has entered into a definitive agreement to acquire the Arrow brand worldwide and the related licensing business from Cluett American Group for approximately $70 million. The transaction is subject to customary conditions and governmental approvals, and is expected to close by year end.

PVH currently operates the men's Arrow dress shirt and sportswear businesses in the United States under a long-term licensing agreement with the Cluett American Group and sublicenses the boy's businesses. Subsequent to signing the licensing agreement in July 2000, these businesses have grown to approximately $160 - $170 million in annual sales volume for PVH.

Bruce J. Klatsky, Chairman and Chief Executive Officer of Phillips-Van Heusen Corporation stated, "The performance of the Arrow business has exceeded our expectations. By bringing control of the global Arrow brand under our management, we have the ability to significantly invest in marketing and advertising the brand. Based on the performance of the brand since 2000, we believe that there is considerable opportunity for expansion in the U.S. and similarly see growth opportunity in international markets." Mr. Klatsky concluded that, "in addition to gaining control to the Arrow brand, we expect this transaction will be accretive to our earnings in 2005."

Phillips-Van Heusen Corporation is one of the world's largest apparel companies. It owns and markets the Calvin Klein brand worldwide. It is the world's largest shirt company and markets a variety of goods under its own brands, Van Heusen, Calvin Klein, Izod, Bass and G.H. Bass & Co., and its licensed brands Geoffrey Beene, Arrow, Kenneth Cole New York, Kenneth Cole Reaction, BCBG Max Azria, BCBG Attitude, MICHAEL Michael Kors, Sean Jean and, beginning later this year, Chaps.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Forward-looking statements in this press release , including, without limitation, statements relating to the Company's future revenues and earnings, plans, strategies, objectives, expectations and intentions, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy, and some of which might not be anticipated, including, without limitation, the following: (i) the Company's plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the levels of sales of the Company's apparel and related products, both to its wholesale customers and in its retail stores, and the levels of sales of the Company's licensees at wholesale and retail, and the extent of discounts and promotional pricing in which the Company and its licensees are required to engage, all of which can be affected by weather conditions, changes in the economy, fuel prices, reductions in travel, fashion trends and other factors; (iii) the Company's plans and results of operations will be affected by the Company's ability to manage its growth and inventory, including the Company's ability to realize revenue growth from developing and growing Calvin Klein; (iv) the Company's operations and results could be affected by quota restrictions (which, among other things, could limit the Company's ability to produce products in cost-effective countries that have the labor and technical expertise needed), the availability and cost of raw materials (particularly petroleum-based synthetic fabrics, which are currently in high demand), the Company's ability to adjust timely to changes in trade regulations and the migration and development of manufacturers (which can affect where the Company's products can best be produced), and civil conflict, war or terrorist acts, the threat of any of the foregoing or political and labor instability in the United States or any of the countries where the Company's products are or are planned to be produced; (v) disease epidemics and health related concerns, which could result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas; (vi) acquisitions and issues arising with acquisitions and proposed transactions, including without limitation, the ability to integrate an acquired entity into the Company with no substantial adverse affect on the acquired entity's or the Company's existing operations, employee relationships, vendor relationships, customer relationships or financial performance; (vii) the failure of the Company's licensees to market successfully licensed products or to preserve the value of the Company's brands, or their misuse of the Company's brands and (viii) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission.

The Company does not undertake any obligation to update publicly any forward-looking statement, including, without limitation, any estimate regarding revenues or earnings, whether as a result of the receipt of new information, future events or otherwise.