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Tommy Hilfiger’s licensing empire started with a scent.
This story first appeared in the September 10, 2010 issue of WWD. Subscribe Today.
In 1993, the sportswear company signed its first global licensing agreement with the Estée Lauder Cos. Inc. to create fragrances and beauty products. This led to a slew of licenses that now number 18, ranging from swimwear to eyewear, hosiery to bedding.
The beauty range, now sold in 120 countries and territories, generates about $200 million annually in global retail sales, according to sources.
Overall licensing generates about 13 percent of global retail sales, or nearly $500 million, a year.
“Fragrance has proven to be a great decision,” said the designer. “Not only has it broadened our customer reach, especially in international markets, but it has also given us another way to communicate and relate to our [customers]. We’ve always wanted the brand to be a lifestyle, to inspire style, but to also appeal to the senses. Fragrance has a special way of elevating an experience — creating an association with a moment that lasts a lifetime. I think that connection is incredibly powerful, and find it a fun challenge every time we create a new fragrance.”
Signing Hilfiger to a beauty license marked the first time that Lauder had partnered with an outside designer. “As one of the first exclusive global license agreements signed by our company, our partnership with Tommy Hilfiger is extremely important to us,” said Veronique Gabai-Pinsky, global brand president for Aramis and Designer Fragrances, BeautyBank and IdeaBank at Lauder. “We continue to leverage creativity to build the brand and reach new heights. Tommy [the fragrance] reflects the classic yet cool all-American lifestyle theme of the designer and is a key asset in our overall portfolio.”
Tommy, the designer’s first fragrance, launched in February 1995. A men’s scent, it bowed in two flights: 650 department store doors, followed by an additional 150 doors four months later. Projected to do $25 million at retail in the U.S. in its first year on counter, it actually finished out its first 12 months with retail sales of $65 million.
Tommy Girl, the designer’s first women’s scent, followed in September 1996. Both fragrances are still on the market.
A color cosmetics line comprising 173 stockkeeping units rolled out in September 1999 but was pulled off the market in 2003.
With the exception of his latest fragrance masterbrand, Loud, most of Hilfiger’s scents have had all-American positioning, albeit within the designer’s FAME mantra — fashion, art, music and entertainment — from where he draws his inspiration. Loud’s m.o. is decidedly downtown, as in the Palladium in the late Eighties. Built around a music proposition and aimed at Gen-Y users, the scent duo will be released in Europe in October and in the U.S. next spring.
“In the years since our initial fragrance launch, our customer has really grown up,” Hilfiger told WWD in August, noting his classic fragrance business has become aligned with his collection and sport apparel lines, while Loud will be aimed at the same young and edgy consumers who purchase his denim.
“We wanted to make sure that we stayed connected to that consumer, but we also wanted it to be authentic,” he said. “We are talking to a generation that craves the newest — but they don’t want gimmicky and fake. We didn’t want something that professed to be a rock ’n’ roll fragrance; we wanted to have a real rock ’n’ roll fragrance. And to do that, we had to develop it in a way that has never been done in fragrance before.”
Industry sources estimated the project could generate first-year global retail sales of $100 million.
Hilfiger dipped into the celebrity category in 2004 with Beyoncé Knowles as the face of his True Star scent. He followed that a year later with Enrique Iglesias as the face of True Star Men.
“Every fragrance is different,” said Hilfiger. “But typically we begin with a concept, determine how relative it is for the market, then begin developing it by testing various notes and experimenting with blends. It takes a whole team to translate our creative inspiration into the perfect scent.”
After the fragrance pact, new deals followed at a rapid pace, including apparel licenses with Hartmarx, Jockey International, Superba, Oxford Industries, Trafalgar, Mountain High Hosiery, eyewear with Liberty Optical and Lantis Eyewear Corp. Home goods launched with Revman Industries of Greenville, S.C.; footwear, with Stride Rite Corp., and tailored men’s wear, jewelry and watches, with Stellson AG of Switzerland, Victoria + Co. Ltd. and Movado, respectively.
Embracing its urban-preppy appeal, the company partnered with Pepe Jeans International in 1996 to produce women’s wear and men’s. That move ultimately would be a turning point for the company, as it eventually bought Pepe, bringing those businesses in-house, establishing the foundation for the company it is today.
In 2000, a new Hilfiger partnership emerged with Swank Inc., for belts and small leather goods. According to its chairman and chief executive officer John Tulip, Swank had been offered the same deal 15 years earlier, in 1985, when Hilfiger had just begun his career.
“Somebody came to us and said, ‘We’ve got this young designer. He’s really excellent at what he does. His name is Tommy Hilfiger, from upstate New York.’ We took a look, and thought, Taking a chance with a young guy is not something we want to do,” Tulin laughed. “Fifteen years later, we rued that mistake.” He said the firm welcomed the second chance to form a partnership, and today, belts and leather goods are sold worldwide at an average price point of $40, primarily at Macy’s in the U.S.
In August, Hilfiger switched eyewear licensees to Safilo, which will produce sunglasses and optical frames. The optical line will retail from $130 to $180, while sunglasses will run from $90 to $140. The agreement is effective through 2015. Roberto Vedovotto, ceo of Safilo Group, said the collection will encapsulate the brand’s iconic heritage. “We were able to create a product that’s in line with the classic-American-cool world of Tommy Hilfiger, [blending] contemporary style and high-quality materials,” he said.
As a new partner, Vedovotto said he was surprised by “the power of the brand globally, its high awareness, the variety and the importance of its communication and the continuous evolution of the brand that stays true to its origins while reinterpreting itself in a contemporary way.”
With so many spokes in operation, part of the challenge remains maintaining unity throughout the various licensed categories. According to Anne Marino, president of Hilfiger’s global licensing, all its products aim to be “about classic with a twist…something that will allow the consumer to identify it as Tommy.”
This year, Tommy Hilfiger brought some of its licensed categories in-house, among them footwear and European handbags. “They were both very successful, but we thought from a brand perspective, they were both key to the perception of the brand and we were in a good position at that point to run them directly,” Marino said.
Going forward, Marino believes the future for Tommy lies in additions to home categories as well as jewelry. “We’re always looking to make better offerings,” she said. “A lot of categories we’ve already covered, and we’re pushing for better quality, design all the time.”