NEW YORK — As if the pressure on Tommy Hilfiger to turn around his company wasn’t already enough, his decision to become a TV personality has just ratcheted it up a notch.
Observers said Hilfiger is taking a huge risk with his decision to go on TV in the 13-episode midseason offering from CBS called “The Cut,” which at first glance looks to be a hybrid of Bravo’s yet-to-air “Project Runway” and NBC’s “The Apprentice.” Sixteen contestants will compete for the opportunity to design a collection under the Tommy Hilfiger label, with Hilfiger presiding over the contest — and presumably uttering some variation of “You’re fired!” to usher out the might-have-beens. During each episode, guests will also serve on a Trump-style advisory board, critiquing contestants and offering up industry advice.
And though “The Apprentice” was a ratings boon for NBC and certainly took Donald Trump from New York celebrity to heartland household name, it didn’t stop his hotel and casino business from going belly-up.
Financial analysts said Hilfiger’s shot at television stardom could be a major distraction from his efforts to rebuild his business, which has seen better days. Over the last three quarters, Hilfiger earnings have seesawed from profit to loss, while top-line results have been inconsistent. For the most recent quarter, ended June 30, the company reported a net loss of $7.6 million versus last year’s earnings of $17 million. Sales fell 10.5 percent to $328.6 million from $367.2 million.
Since the beginning of the calendar year, the company’s stock has fallen 10 percent, or $1.46, to $13.20 from $14.66. Moreover, Hilfiger’s shares have substantially underperformed the broader market, lagging behind the S&P 500 by 9.7 percent year-to-date.
According to SEC filings, Hilfiger’s stake in the company has remained unchanged since last September’s proxy statement, in which it was disclosed that the designer owns 3,968,548 shares, or 4.4 percent of the firm’s outstanding stock.
Clearly Hilfiger doesn’t need the money a TV gig will provide, although Trump only earned $50,000 an episode in “The Apprentice’s” first season. As honorary chairman of Tommy Hilfiger Corp., the designer was the highest-compensated executive at a U.S. publicly listed apparel company in 2003. His $18.3 million salary — he took no bonus — was enough to grab the number-one spot on the list. Still, his compensation fell 10.8 percent from 2002, due to lower U.S. sales in fiscal 2003.
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