Sep 16, 2009
Tommy Hilfiger CEO restaging brand
Sep 16, 2009
By Martinne Geller
NEW YORK (Reuters) - Tommy Hilfiger has spent the last few years trying to undo the damage from its apparel brand going too mainstream, and is now presenting a "preppy" and "iconic American" brand, its chief executive said on Tuesday 15 September.
Less than 48 hours after opening a flagship Tommy Hilfiger store on Manhattan's Fifth Avenue, Chief Executive Fred Gehring told Reuters that establishing such a high-profile presence will have long-term benefits that outlast the immediate challenges of the weak economy.
"Even if there's a double-dip, eventually there will be a recovery to something that will be the new normal. But in any scenario, New York City will be a key spot," said Gehring, who hails from the Netherlands and became CEO in 2006 following the brand's acquisition by Apax Partners, a London-based private equity firm.
In its first days, Gehring said the new store -- which sells everything from $29 (17.57 pounds) T-shirts to suits costing more than $1,000 -- is seeing a good response in all categories, especially the pieces from its higher-end collections.
Still, the company is expanding faster abroad than in the United States, where it suffered years of sales declines after its logo-heavy designs and affordable prices made it a staple of urban streetwear but alienated many of its preppier customers.
After opening about 100 stores during the past year, the company has about 950 stores globally, Gehring said. He has adjusted the pace of expansion due to the economy, and now sees opening only 50 to 60 stores in the next year, with about a dozen of those in the United States, he said.
Last year Apax shelved plans to float the company on the Amsterdam stock exchange due to volatile market conditions. Nearly two years later, Gehring said an initial public offering remains the most likely exit scenario for the funds, which acquired Tommy Hilfiger for $1.6 billion.
"I think the most likely scenario will be an IPO but it may well be that it's going to be two years away or so," Gehring said. "When the market starts to stabilise and open up, I don't think we're going to be rushing out as one of the first ones."
He said selling to a strategic buyer was not out of the question, but unlikely, given Tommy Hilfiger's size. He also said he was not aware of any discussions between potential suitors and the brand's owners, whom he described as very comfortable with their investment and not pressuring to discuss their exit.
"It's very clearly not, at the moment, on the radar."
(Reporting by Martinne Geller; Editing by Phil Berlowitz and Richard Chang)
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