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PVH pays $3bn for Tommy Hilfiger

They have appeared side by side in high-end department stores for decades, and from now on Tommy Hilfiger and Calvin Klein will be part of the same company.

Tommy Hilfiger, whose preppy American clothing briefly became the uniform for rap stars and their fans in the Nineties, has been sold to Phillips-Van Heusen for $3bn (£2bn).

The 58-year-old designer will stay with the company as its "principal designer and visionary". Hilfiger's current owners, the private equity firm Apax Partners, bought the company four years ago for $1.9bn. An attempt to refloat the business on the stock market was scrapped two years later as the credit crisis spiralled.

Phillips-Van Heusen is doubling in size with the deal. The New York-based company is the world's largest manufacturer of shirts, with a history that it traces back more than 100 years. It has owned the Calvin Klein designer brand since 2002.

Hilfiger, meanwhile, started out as a clothing retailer in upstate New York before jumping into fashion design. As well as department store concessions, the company has 1,000 of its own shops. Two-thirds of its $2.25bn annual sales are now outside North America.

Fred Gehring, the chief executive of Tommy Hilfiger, will stay on as chief executive and take charge of all of PVH's international operations. "This is the next phase in the global evolution and expansion of the Tommy Hilfiger brand," Hilfiger said. "I am confident that Manny Chirico and the PVH organisation will do what is necessary to take our brand to new heights." Emanuel Chirico, the PVH chairman, said he was impressed that the Hilfiger brand had stayed strongly profitable despite the recession, and was rebuilding its business in North America where its clothing had appeared to have dropped out of fashion.