CK OKs deal with Van Heusen

Calvin Klein, the designer clothing business best known for tight-fitting underwear and slick adverts, is likely to be sold to the men's shirt maker Phillips-Van Heusen.

The deal, in the final stages of negotiation in New York, links two firms at different ends of the fashion spectrum. Van Heusen, which has built up a solid clientele among business executives, is hoping the purchase will add some glamour to its staid reputation and help the company to nurture more of a designer business. Executives believe the new firm – Calvin Klein Co – can capitalise on an image built on seminal advertising campaigns from Brooke Shields's "Nothing Comes between Me and My Calvins" jeans billboards in the 1970s to Larry Clarke's advertisements in the 1990s.

Van Heusen will pay $400m (£250m) in cash and $30m in stock for the label. The deal, expected to be closed within 60 days, is expected to make a positive contribution to Van Heusen's annual earnings by 2004. The deal would signal the end of one of the few remaining independent fashion labels such as Ralph Lauren and Giorgio Armani. It would also be the end of an era at the company's headquarters on New York's Seventh Avenue.

Mr Klein and his partner, Barry Schwartz, founded the company in 1968 with an initial stake of $10,000. The men built a high-profile business whose products were known from Hong Kong to Paris. However, the company suffered setbacks and never went public. The deal does not include its jeans and underwear brands.