NEW YORK — Tommy Hilfiger Corp., seeking to restore sales and profits, is in the midst of a three-pronged growth strategy that includes diversification through acquisitions.

David Dyer, president and chief executive officer, said during a presentation Thursday at the Eleventh Annual Global Retailing Conference here at The Plaza that the company’s initiatives are intended to fix the firm’s core U.S. wholesale business, expand its European operations, and add businesses.

The fashion firm’s merchandise this year for holiday, and even spring 2005, is better balanced than its been in years, Dyer said. The “mix two years ago was too basic,” and last year was more of an “explosion of fashion,” he said.

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 compared with last year’s earnings of $17 million. Sales fell 10.5 percent to $328.6 million from $367.2 million.

The company is also expanding its e-commerce operation, an area that Dyer said “could be a major growth opportunity in the future.”

Hilfiger’s first e-commerce operation, when it launches in spring 2005, will feature a range of product offerings, including fragrance and accessories. The company Web site, tommy.com, provides information but doesn’t have any ordering capabilities.

While the firm said previously that it was looking for good acquisition candidates, Joseph Scirocco, chief financial officer, said during the presentation any purchase should “generate free cash flow within a reasonable time.’’

Good candidates for acquisition are businesses for which Hilfiger can “roll the brands out” through licensing opportunities at the international level as well as at retail. Even better are brands that have the potential for derivative lines and generating e-commerce sales, Scirocco said.

Hilfiger has $100 million in free cash flow per year and a solid balance sheet, he said. “We can do it. We have a lot of cash and a manageable debt level, which enables us to be very deliberate.”

— Vicki M. Young

This story first appeared in the September 10, 2004 issue of WWD. Subscribe Today.