Back in style

American Fashion guru Tommy Hilfiger sold his clothing empire last year to Apax Partners after a slump in sales. But in a rare interview, he tells Anil Bhoyrul about how Wall Street stifled his creativity – and how he now intends to make a comeback.

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By  Anil Bhoyrul Published  May 14, 2006

|~|26-Tom40-200.jpg|~|In the big time: Tommy Hilfiger admits that running a public company didn't help the creative juices flow. But he is back with a bang.|~|American Fashion guru Tommy Hilfiger sold his clothing empire last year to Apax Partners after a slump in sales. But in a rare interview, he tells Anil Bhoyrul about how Wall Street stifled his creativity – and how he now intends to make a comeback. Before Tommy Hilfiger enters the room, there is a sense of organised chaos. Flowers appear on the table, a candle is lit, and his spokeswoman makes clear where he will sit. “The one on the right is his favourite sofa,” she explains. Moments later, two minders, another public relations executive, and for good measure a make up artist, appear. They are huddled in conversation, before disappearing into another room (presumably the one where Tommy is hiding). Then the man himself finally appears. As you would expect, he is dressed immaculately. But surprisingly, despite all the hype that preludes his entrance, he is charming, warm, and most of all refreshingly candid. “I see you’re wearing one of my shirts,” he says. “Erm, no. It’s actually from Banana Republic,” I explain. His expression changes. “Well it looks exactly like one of mine. They’ve copied me. Everyone always copies me.” This, is a sentence, sums up the Tommy Hilfiger story. He has always been first in everything he does – taking his company to the stock exchange, bringing rock to fashion, bringing designer wear to the masses. Unfortunately, he did it so well, the rivals took a leaf out of his own book and did the same – often cheaper. Once at the helm of a multi-billion dollar empire, Hilfiger was just a year ago reading his own business obituaries. But after nearly thirty years in the business, the American fashion guru suddenly appears back to his very best. A chain of new stores are being opened around the globe, new designs being rolled out and new customers knocking on the door. Hilfiger, as he says himself, is back. “I feel a great buzz today. I feel I am back in the big time.” Hilfiger’s journey to the big time started with small fry, selling trendy clothes from the back of a car. By 1984 – while still at High School – he had opened his first boutique, and introduced his own line of clothing. A star was born, and by 1992 he ran a public company with sales of US$100million. That figure hit US$2 billion by 2000, but then the downward spiral came. Sales began to slump, falling to US$1.78 billion by 2005. So called “gangster rappers” appeared to hijack the brand, and in the UK, the comic Ali G ridiculed the brand. The company was put up for sale, snapped up by venture capitalists Apax Partners for US$1.6 billion in December last year – with Hilfiger made honorary chairman. So where does that leave Hilfiger today? A beaten man? Hardly. “You know something? My creativity over the last few years has been rather stifled. I was under the public auspice for around ten years and it’s a whole different ball game. Everything you do is looked at under a microscope, so you make decisions based upon Wall Street agendas, and maybe those aren’t always the right decisions to make. So right now we’re making certain decisions that I think are rather more appropriate for the business and much better in the long term for the business. It gives me more freedom to do what I want to do. Being a public company can somehow confine the creativity,” he says. For the last few years, despite still running a hugely successful empire, Hilfiger has been the subject of constant carping from financial analysts. They questioned his every move, his every decision, and generally came to the conclusion that he usually got both wrong. You can almost touch the relief on his face from not to have to deal with the City any more. He explains: “I can’t even describe how I felt about that. I was frustrated because I knew the problem. The problem was the department stores in the US. First of all they copy you, then they under price you and then they discount the brand. They don’t take care of your shop areas in stores. And if you are in 150 stores, less than a third of them are great stores. They are in outlying areas, so the fact is you don’t have control.” So why didn’t he just shut down the Hilfiger shops in departmental stores? He says: “For me to have sliced out all the stores, just chopped them out, would have had a great impact on the revenue. Automatically your profit line falls and Wall Street pounds on you. We were doing certain things for the wrong reasons. We were remaining in certain markets for the wrong reasons.” Hilfiger adds: “We enjoyed the ride for quite a while, because we were the first American designer to go public. We were the darlings of Wall Street for a good seven and a half years. The stock was flying, we wrote the book on how to expand. We showed how to market in a unique way, we were not traditional in our approach. Everything just fell into place. But then when the business starts leveling and not growing, Wall Street reverses its impression of you.” By last summer, the Hilfiger Group had hit 200 stores, across the United States, Canada, Europe, Asia, South & Central America. Not bad for a guy who started his business with just US$150 in his back pocket, buying trendy clothes in New York and selling them on to friends. By 1984, still only 32 years old, he had his own menswear collection, and was being ranked alongside the great trio of US male designers – Ralph Lauren, Perry Ellis and Calvin Klein. His red, white and blue style of clothing became popular with musicians include Snopp Dog. Suddenly, millions around the world were dressed in Tommy gear, and the brand expanded fast into Tommy Jeans, Tommy Girl, Hilfiger Athletics and Tommy Sport. Furniture and fragrances were thrown in for good measure, and through the nineties, everything Hilfiger touched turned to gold. “Right in the beginning I did it purely out of just passion. As time went on I discovered I could exercise my passion, enjoy my creativity and also make money. When you put all those three together, you can have your cake and eat it. I looked at that as being fantastic,” he says. But fashions change like the seasons, and many of Hilfiger musical fans turned to different brands such as Sean John and Rocawear. Last year, with sales falling, rival clothing retailer Abercrombie and Fitch saw a 20% sales surge, while Polo Ralph Lauren shot up 23%. Tommy Hilfiger’s star appeared to be waning, and the snipers were out in force, even once wrongly accusing him of making racist remarks. Hilfiger himself says: “When you are out there in the public you stand the chance of ridicule and criticism, rumours and all sorts of things. It happens to Coca Cola, to Ford, to IBM, to everyone big. Does it upset me? That didn’t. Only one thing ever upset me, and that was the racial rumour. That was so untrue and it was about me personally, and yes it really upset me. I was accused of saying something I never said. It upset me and affected me. But overall, you have to accept everything and all that that goes with it.” Hilfiger admits that the ups and downs – both in public and private – now come with the territory. He explains: “The fame side of things, I am just very used to now. It is part of my everyday life. I’ve never stopped to think whether I enjoy it or not. There was a time when I thought it would be really cool to be rich and famous. And then when people would bother me in restaurants while I was having dinner with my children, it would start to annoy me. I am friends with Mick Jagger and I asked him how he dealt with it. He said to me, if you let it bother you it will absolutely destroy you. And he is much more famous than I am!” Right now, Hilfiger has his eyes on the Middle East, having spent most of the last week in Dubai. Although officially here to open a new store, it was his first ever visit to the region, and he makes no secret of his desire to build a bigger business in the Gulf. “It’s amazing. I’ve never seen anything like it in my life. I’ve never seen such momentum, such movement. There’s a huge buzz about the place. And that translates into any kind of product, be it automobiles, cars, watches, electronics. And as for fashion, I think Dubai has already become a fashion hub. That makes it easier for us to get into the market because people are already in that frame of mind,” he says. Hilfiger says he is on the look out for another 25 stores to place his clothes into, and longer term has plans for a furniture shop and even a Hilfiger Hotel. The ideas, he insists, haven’t stopped flowing – even if he is now 55 years old. “The secret of fashion is you design something that pushes the right buttons. It’s comfort, it’s fit, it’s quality, it’s attitude. It is surrounding the brand with the right vibe. I think that attaching ourselves to pop culture the way we have has given us a tremendous edge. I like to link it with FAME – fashion, art, music, entertainment. When we link that together, it is really the spice of life. It is what makes the world go around, it makes the clock tick. It’s Hollywood, it’s entertainment, it’s celebrity. It’s all of that attached to a brand, to pull the brand forward. Otherwise a brand is a brand. Without some sort of edge, it becomes plain vanilla, almost boring.” So are there any thoughts of retiring? “Me? You gotta be kidding. I enjoy doing this today as much as I ever did. There is so much more I want to do and achieve, and I’m a long way from there. You see, at the end of the day, people will always need clothes, food and water. Do they really need music, do they really need movies, do they really need sport? It is a necessity in life. We may as well make it fun and interesting.” That, he is certainly doing. Even his biggest rivals would admit, Hilfiger is back.||**||

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