Chasing Tommy: Apax and PVH Said in Lead, but Price an Issue

Apax Partners, in partnership with Phillips-Van Heusen, is in the lead in the bid for Tommy Hilfiger Corp., but the process is said to be "fluid."

Li & Fung's strategy is on building brands and adding value services based on the company's expertise in certain areas, such as sourcing. The company is not expected to be in an acquisition mode for at least another five years, according to a source close to the company. And while published reports have Li & Fung involved in a bid for Hilfiger with a financial player, the company's role would be limited to sourcing, such as working with a licensing firm while financial players have ownership of the company.

Regarding designer Tommy Hilfiger's employment contract, sources said it would be bought out for $150 million. It's unclear if Hilfiger would have a role in the acquired company or just collect a percentage on sales of branded goods, as in his current employment contract. Hilfiger's current agreement pays him between $14 million and $18 million a year.

Tommy Hilfiger Corp. filed its amended annual report Nov. 18 for the fiscal year ended March 31. Net income dropped 34.5 percent to $85.7 million, or 93 cents a share, from $130.8 million, or $1.43 a share, a year ago. Total revenue fell to $1.78 billion from $1.87 billion in 2004. U.S. wholesale revenue dropped to $679 million from $959 million.

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