Tommy Hilfiger (A) The Rise and Fall
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Case Code: BSTR491 Case Length: 13 Pages Period: 2005-2010 Pub Date: 2016 Teaching Note: Available |
Price: Rs.500 Organization: Tommy Hilfiger Industry: Apparel Countries: USA Themes: Business Strategy, Brand Management |
Abstract Case Intro 1 Case Intro 2 Excerpts
The Beginning
Tommy Hilfiger was an eponymous name, the namesake being its founder; Hilfiger. Hilfiger was born in Elmira, a city in Chemung County, New York State, in 1951. While in high school, the teenaged Hilfiger wanted to be like a rock star. The dressing style of rock stars – bell-bottom jeans and long hair – appealed to him. In the 1960s, Hilfiger wanted to get himself some fashionable clothing, but he couldn't find it in local stores around Elmira. In 1968, at the age of 17, Hilfiger decided to open an outlet where he would sell bell-bottom jeans to the youngsters in Elmira, which was then a college town. He had saved US$150 from working at a petrol station and with a friend, Larry Stemerman (Stemerman), he bought 15 pairs of bell bottom jeans from the back-street of New York City and sold them to students from the boot of his car.
Hilfiger and Stemerman opened a basement shop in 1969 and named it 'People's Place'. The store became a huge hit with youngsters and generated revenue of US$ 1 million by the end of the year. Their key customers were youngsters who loved music and fashion and who wanted to be a part of the trend. People’s Place quickly expanded to 10 stores located around college campuses in upstate New York.
By the mid-1970s, however, business began to suffer as a host of competitors emerged, selling similar clothes. Growing competition, its rapid pace of expansion, mismanagement, and a downturn in the economy together with the end of the hippie era, resulted in bankruptcy for People's Place in 1977 and Hilfiger had to close down the chain of stores. Hilfiger later said, "We went bankrupt. I was devastated. I was embarrassed. I had started with nothing and worked so hard, and we were so close to making it really big, but I had taken my eye off the ball. I believed that the business would just continue to do well. But it didn’t, because I wasn’t paying attention to the "business" part of the business."...
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