Despite mounting pressure from Wall Street to name a new chief executive officer and make acquisitions, Tommy Hilfiger, honorary chairman of his eponymous firm, figures he still has plenty of time to replace Joel Horowitz, who plans to give up the ceo post when his contract expires in March. And Hilfiger doesn’t want to rush into any acquisitions that don’t feel right.
“Wall Street is always anxious. They want us to spend all our money on an acquisition, whether it’s right or wrong,” said Hilfiger in an exclusive interview with WWD. “They want us to put a ceo in place yesterday. We have to do what is right for the brand and the corporation.
“We’re looking at all different opportunities [for acquisitions]. There’s nothing at the forefront,” he said.
Hilfiger, whose core men’s wear brand has been battling market erosion and whose products have been greatly over-exposed in department stores, admits the company needs fixing, but believes there are still plenty of opportunities to grow.
Among them are launching a new women’s casual career line, H Hilfiger, for department store distribution and adding more dressy categories to the women’s offerings. In addition, Hilfiger sees plenty of international growth left for the company, especially in women’s apparel. He said he’s beginning to see a “turn in men’s already with the new product,” and the company is redeveloping much of Tommy Jeans.
“At the end of the day, it’s all about the product,” he said.
For the last fiscal year, Hilfiger sustained a massive $513.6 million loss, or $5.68 a diluted share, compared with income of $134.5 million, or $1.49, the previous year. The loss was due mostly to a $430 million charge reflecting the cumulative effect of a change in accounting principle. Revenues inched up 0.6 percent to $1.89 billion from $1.88 billion a year earlier.
According to the company’s annual report, released last month, Hilfiger’s women’s wear, up 4.9 percent to $564.7 million in revenues, was the largest segment of the company’s wholesale business in the last fiscal year, outpacing men’s wear for the first time, which saw its revenues decline 10.8 percent to $555.1 million, as reported. Hilfiger, as noted, has about $420 million in cash, and in May hired J.P. Morgan Chase to assist it in acquiring additional brands.