WWD.com/beauty-industry-news/financial/lagerfeld-gets-behind-apax-hilfiger-deal-550627/
government-trade
government-trade

Lagerfeld Gets Behind Apax-Hilfiger Deal

Karl Lagerfeld has given a thumbs-up to Apax Partners' $1.6 billion deal to buy Tommy Hilfiger Corp.

PARIS – Karl Lagerfeld has given a thumbs-up to Apax Partners’ $1.6 billion deal to buy Tommy Hilfiger Corp.

Lagerfeld, having just returned here from Monaco, where he spent the holidays, told WWD, “It seems like a positive thing. My relationship with David Dyer was good in terms of the studio and operations and the people he hired were perfect. I hope it will continue in the same way.”

Dyer is chief executive officer of Hilfiger and will depart the firm once the deal closes. He will be replaced by Fred Gehring, ceo of Tommy Hilfiger Europe.

The Apax deal to buy Hilfiger comes as the group gears up for the rollout of the Lagerfeld business. The Lagerfeld company has moved into a 20,000-square-foot office and studio at West 26th Street in Manhattan as it prepares for the February showing of a Karl Lagerfeld contemporary collection during New York Fashion Week and the relaunch of Lagerfeld Gallery, which up to now has been presented in Paris. Meanwhile, a limited-edition line of the Karl Lagerfeld contemporary collection will be available at Bergdorf Goodman and Neiman Marcus in March.

“We’re very excited about Karl’s business here [in the U.S.] and in the rest of the world,” Tommy Hilfiger told WWD late last week after the Apax deal was finalized.

Meanwhile, in New York, ratings agency Moody’s Investors Service said Wednesday that it is continuing the review for possible downgrade of Tommy Hilfiger USA’s debt ratings.

Moody’s said that it expects the company’s overall leverage will rise following the acquisition by Apax, which could result in a lower corporate family rating for the new consolidated entity following the proposed buyout. The ratings already were on review pending the delayed filing of the company’s financial statements. Tommy Hilfiger Corp. updated its financial statements on Dec. 23 when it filed its second-quarter report for fiscal year 2006 with the Securities and Exchange Commission.

Moody’s noted that the existing debt is expected to be repaid as part of the Apax transaction, which is still subject to shareholder approval. Apax expects to close on its acquisition in the spring of 2006.