Fashion Circle: Gifted Design And Bold Marketing

In May 6th, PVH formally acquired TOMMY HILFIGER from Apax Partners.

This is the biggest takeover activity in the clothing industry since the financial crisis. The purchase amount is 3 billion dollars, plus the debt of 138 million dollars, and the combined income is 4 billion 600 million dollars.

The purchase price of US $3 billion was 7 times that of PVH CALVIN in 2003, and it was nearly 5 times that of DONNA KARAN acquired in LVMH2001 in the year of PVH.

Once a leader of campus style and a street style designer, Mr. Tommy Hilfiger was a cool character in the 90s of last century.

At the height of his career, he sold $1 billion 900 million in loose jeans and colored LOGO T-shirts in the US.

However, since about 10 years ago, he had lost this "bull".

People are far more interested in his divorce proceedings, dating news and his daughter's reality TV show than his clothes.

The situation has become so bad for Mr. Tommy Hilfiger. A few years ago, the company even seriously considered selling its own brand clothes in Wal-Mart (WAL-MART).

Magazines lost interest in him, reports on him were fewer and fewer, customers were also disappointed, and sales of department stores also fell by 75%.

Therefore, the May 6th clothing company PVH (Phillips-Van Heusen) has made a significant contribution to the acquisition of TOMMY HILFIGER30 billion, which at least proves that the fashion elite underestimated Mr. Tommy Hilfiger.

You know, the price of 3 billion dollars is 7 times that of PVH CALVIN KLEIN in 2003, and it is nearly 5 times that of DONNA KARAN acquired in LVMH2001.

This is undoubtedly a great satisfaction for the creator of the brand. After all, TOMMY HILFIGER was once the brand of CALVIN KLEIN and DONNA KARAN.

How did Tommy Hilfiger and his partners turn the tables? Tommy started his career in Hilfiger1985, when he was 34 years old and his partner was India textile giant Mohan Murjani.

With his partners' support, he created his men's wear series, which was based on elegant campus style and injected with fashion elements. At that time, it was absolutely a classic variation.

In the early 90s of last century, Tommy Hilfiger experienced a great change in life. With the help of senior investors Silas Chou and Lawrence Stroll, he officially took charge of his personal brand in 1989.

Genius design is natural, and innovative marketing is also indispensable.

Tommy Hilfiger is also daring in this respect. When he was obscurity, he dared to publicize in New York Times Square: another great male designer was born. He categorized herself into a very famous team of Calvin Klein, Ralph Lauren and Perry Ellis, which was a big joke in the fashion world at that time.

Fortunately, a few years later, this bold prophecy became a reality. With his talents and efforts, he made the company's popularity skyline. In 1992, TOMMY HILFIGER brand became a household name. In 1995, Tommy Hilfiger won the highest honor in the fashion industry.

By the end of the 90s, however, the company began to go downhill, and the stock price fell to 7.5 dollars, half of its original value.

People are becoming less and less interested in his brand.

In the face of this, his long - term partners, Silas Chou and Lawrence Stroll, decided to throw away the past.

In 2006, a private company named Apax Partners was founded by Fred Gehring, head of TOMMY HILFIGER Europe office, and bought TOMMY HILFIGER at the price of US $1 billion 600 million.

This change has not only led to the conversion of the head - Dutch Fred Gehring has become president of the company, but has also changed the direction of brand design.

In the years to come, this incident has become one of the lucky cases in business school classes.

TOMMY HILFIGER returned to its best condition - but this time the main battleground has become Europe.

Fred Gehring believes that the European market is different from the US market. The key to the US market is to concentrate on as many goods as possible onto the counter of the department store, and the key of the European market is to disperse. That is to provide small retail outlets with goods that can accurately match those customers with mature taste.

In Europe, TOMMY HILFIGER has almost more than 4000 stores, many of which are small shops that sell selected products.

In addition, the difference between different regions is also very obvious. What the Germans like, the Spanish do not necessarily like it.

"No matter who he is, if he thinks he can get mixed up with that old brand marketing idea, he will surely fall."

Fred Gehring says, "your way of thinking must be very localized."

In fact, the clothes sold in these stores were not designed by Tommy Hilfiger personally, but by a design team in Amsterdam.

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In these small shops, Sarah Lerfel, the owner of a more popular clothing store in Paris, is more astute. She sells TOMMY HILFIGER hip-hop style clothing to soccer star Thierry Henry. "He is quite famous here. Working with him is a very good way to let TOMMY HILFIGER enter the French market," Sarah Lerfel said.

"Because everyone here likes Thierry Henry."

A big business in fashion circles

After the establishment of Apax Partners, a private group was restructured through the authorization of TOMMY HILFIGER to avoid radical development strategy and vicious cycle.

In 2007, through the efforts of Fred Gehring, TOMMY HILFIGER co worked with Macy s (Messi department store) to provide apparel for exclusive Macy S800 store.

Macy s's chief executive, Terry J. Lundgren, said TOMMY HILFIGER was one of the best selling brands in the store, and even performed well during the financial crisis. Now, Macy's s business is still ahead of other department stores like Belk and Dillard.

"Of course, it was a gamble at the beginning," Mr. Lundgren said. "It was only proved that it was a good way of cooperation."

In September 2008, TOMMY HILFIGER opened a new flagship store in Fifth Avenue, New York.

The new store is four storeys high, occupying 22000 square feet, becoming the first TOMMY HILFIGER store to assemble all kinds of daily necessities, including escape series, clothing for men and women, children's wear, custom made garments, footwear, accessories, home furnishings, and all Hilfiger Denim brand clothes. And the sales here are very good, with an annual profit of about 300 million dollars.

It is the company that has gradually turned the tide, creating a good international platform for the brand, giving PVH group great confidence and finally facilitated the acquisition.

PVH chairman and chief executive officer Emanuel Chirico said that from a strategic point of view, TOMMY HILFIGER meets all acquisition standards, and as a powerful global brand, it has a very strong international operation platform.

The acquisition amounted to $3 billion, plus $138 million in debt and a combined gain of $4 billion 600 million.

In the short term, leverage is obvious.

The acquisition industry said that for PVH, this is an industry pformation, that is, this paction made PVH carry a large amount of debt.

Emanuel Chirico predicts that in the future, if we expand the business of TOMMY HILFIGER and use its international sales network to develop its brand like IZOD and ARROW, there will be a continuous flow of cash to make up for the debt.

Of the $3 billion paid, Apax will receive $2 billion 650 million in cash and $380 million in PVH common stock.

Apax bought TOMMY HILFIGER at the price of 1 billion 600 million US dollars in May 2006, and will have 13% of PVH company in the future.

PVH's share price rose 9.75 percentage points on the New York stock exchange as a result of investor takeover. This is the biggest takeover activity of the garment industry since the financial crisis.

More than 4 million 400 thousand shares were changed, and the average volume of pactions in 3 months was only 623392 shares, in stark contrast.

After the change, Fred Gehring will continue to serve as CEO of TOMMY HILFIGER, mainly to rebuild its business in North America and expand its international layout.

Tommy Hilfiger will continue to be the chief designer of the brand.

Therefore, the overall style of the brand will not change.