LONDON — Tommy Hilfiger is withstanding retail’s rocky waters.
Today, the brand will report a 21 percent rise in group sales to 1.6 billion euros, or $2.27 billion, from 1.34 billion euros, or $1.9 billion in the year ended March 31, thanks to double-digit growth in Europe and North America and the integration of Hilfiger’s Japanese operations. The figures do not adjust for currency fluctuations or discontinued operations.
Earnings before interest, taxes, depreciation and amortization were roughly flat year-over-year, rising to 270 million euros, or $383.4 million, from 268 million euros, or $380.6 million. All figures have been calculated at average exchange rates for the 12-month period.
“This is the toughest time we have ever faced, and we’re very happy with our progress. We were much less hurt than other brands,” chief executive officer Fred Gehring told WWD.
Although Hilfiger did not break out aftertax profits, Gehring said growth was positive. He said best-selling categories worldwide were men’s wear and denim. During the year, the company added 100 freestanding stores, taking the global portfolio to more than 900, half of which are directly owned and operated.
With regard to the current year, Gehring said it got off to a “challenging” start, although trading began to pick up in April, and the European market saw a strong recovery around Easter. He said the big challenge going forward will be “getting the consumer to return to a full-price mentality.”
North American sales rose 10 percent to 636 million euros, or $903.1 million, from 590 million euros, or $837.8 million. The company did not break out separate figures for the U.S.
Gehring said about one-third of the company’s U.S. business comes from Macy’s, while the balance is generated at the brand’s own retail stores. “Although we would have liked those numbers to be better, there is still double-digit growth at Macy’s, and we are beating the competition,” he said.
In Europe, sales rose 14 percent to 795 million euros, or $1.13 billion, from 707 million euros, or $1 billion. The company said the inclusion of European footwear sales, as well as growth in all regions and product groups, contributed to the sales rise.
In Europe, some 75 percent of Hilfiger’s business is wholesale, and Gehring said the brand has about 5,000 customers in the region. “As a result, we’re more vulnerable in that market, but so far we are getting stronger and gaining market share,” he said, adding that Europe currently generates about 50 percent of turnover, followed by the U.S. with 35 percent and the rest of the world with 15 percent.
Gehring said the company’s planned initial public offering remains on ice. “We are not even thinking about it right now. We’re focused on making this a leaner, meaner company and a better business,” he said.
After a few delays, the company plans to open its first global flagship, a 20,000-square-foot unit on Fifth Avenue in New York, at the end of August, he added.
Next spring, he said, Tommy Hilfiger plans “to put some muscle” behind its newly reacquired accessories businesses at Macy’s, and in September the brand will relaunch its e-commerce business “with high expectations,” he said.
Gehring added he’s far from a “pie-in-the-sky optimist,” but he’s looking forward to the current fiscal year. “The comps are going to get easier, and we’ll see some leveling out in the fall. Inventories will have been readjusted. We’ll all be getting back to normal — to a new normal,” he said.
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