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The metamorphosis might not have occurred in the way the firm had foreseen, however, as women’s wear, on the rise, met men’s wear, once its sole classification, on the way down. The company disclosed in its annual report Tuesday that women’s wear, with $564.7 million in revenues, was the largest segment of its wholesale business in the fiscal year ended March 31.
The Form 10-K filed with the Securities and Exchange Commission shows women’s wear, with a 4.9 percent growth spurt, leapfrogging over men’s wear, which saw revenues decline 10.8 percent to $555.1 million last year. Children’s wear, the smallest of the three wholesale divisions, enjoyed a 7.1 percent revenue increase to $300.4 million.
Overall, wholesale revenues decreased 1.4 percent, ending the year at $1.42 billion versus the $1.44 billion performance in fiscal 2002. Segment profits, which exclude various financial items and certain expenses assigned to corporate overhead, declined 15.6 percent to $117.8 million.
As reported, Tommy Hilfiger Corp., hit with a $430 million accounting change and a number of other one-time items, sustained a $513.6 million loss in fiscal 2003 as revenues crept up 0.6 percent to $1.89 billion from $1.88 billion.
Hilfiger has been the center of intense industry speculation over the last few months, first as a potential takeover target and now as a result of its claims that it is looking for an acquisition — with everything from Sweetface to Nautica mentioned as possibilities. The report alludes to the firm’s interest in pursuing acquisitions but admits this quest “may be constrained by Mr. Hilfiger’s employment agreement,” which provides that the firm and its subsidiaries “cannot enter into any line of business” that the designer believes would be detrimental to the company’s trademarks.
The 10-K shed additional light on information previously discussed by Joel Horowitz, chief executive of Hilfiger, and others in recent months. A common thread running throughout the annual report was both the contribution made by TH Europe, the former licensee acquired by the firm in March 2002, and the costs associated with its acquisition and development. The company bought TH Europe for $200 million, plus acquisition-related costs of $6.8 million and $42.6 million in assumed debt.