Tommy Hilfiger - The Struggles of an American Fashion Icon
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Case Details:
Case Code : MKTG090
Case Length : 15 Pages
Period : 1969-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Tommy Hilfiger
Industry : Branded Apparel
Countries : USA
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Tailoring the Success
According to analysts, one of the main reasons for the success of Tommy Hilfiger was the careful management of licensing deals. The company's products were manufactured through a series of licensing and distribution arrangements with outside parties (Refer Exhibit IV for a list of the domestic and international licensees)...
There's no Stopping Tommy!
At the end of the third quarter of the financial year 1996-97, Tommy Hilfiger was selling through over 1000 leading retail outlets within the US. In a 1998 survey of top US brands, Tommy Hilfiger was the number one amongst all the clothing labels, beating names such as Gap and Nike.
The company's continual strong performance and the impending European expansion program prompted a financial analyst to state, "The company is about to have huge licensing revenues...
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Why the Clothes Don't Fit Anymore
In January 2000, Hilfiger announced that profits would decline for the fourth quarter of the fiscal 2000 (ending in March 2000). Company sources said that markdowns at the retail level had led to this situation. On the day of this announcement, the company's stock declined by 18%, reaching a 52-week low of $13.81. Some analysts said that Tommy Hilfiger had reached its pinnacle in the late 1990s and that there was nowhere left for it to go but down...
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A Stitch in Time?
Even though Tommy Hilfiger had turned away many customers from the hip-hop/rap segment, it remained the number one brand in the apparel category in a 2000 survey conducted by American Express.
This seemed to indicate that there still was hope for the brand. According to an analyst, "It will never again be the hot, sexy, overly talked-about, flashy, zippy, fast-growing company it was, but it will be a damn nice company turning out lots of cash." In 2001, the home collection range was reported to be doing well... |
Exhibits
Exhibit I: Tommy Hilfiger - Handling the Racism Allegations
Exhibit II: Tommy Hilfiger Product Launches
Exhibit III: Tommy Hilfiger - Global Distribution Network
Exhibit IV: Tommy Hilfiger - Licensing Partners
Exhibit V: Tommy Hilfiger - Key Financials
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