Of course it has something to do with Church. Church has reservations about sexually explicit advertising but Secular state has no objection with Calvin for its Artistic Freedom.

Now consider if Calvin Klein had instead, as a form of artistic or religious expression, blown up a picture of Jesus Christ. Do you think secularists would defend his "artistic" or "religious expression" in response to New Yorkers (and even the Christians) outrage for blowing up the image of a specific religious figure to market jeans? They wouldn't, they'd be foaming at the mouth to get it taken down and spout off that Calvin Klein is trying to "indoctrinate" New Yorkers into being Christians by associating Christianity with his popular brand of jeans.

Secularism would only be successful by compromising the believes and rituals of a huge/certain population.