TAKING STOCK OF TOMMY: THE BIG BOARD STORY
Byline: Thomas J. Ryan
NEW YORK — Tommy Hilfiger has flourished since going public in September 1992, and the stock continues to be pushed strongly by many Wall Street analysts despite its startling price appreciation.
The stock went public at 7 1/2, adjusted for a 2-for-1 split in January 1995, and rocketed to a high of 47 3/8 in January of this year before recently settling back to around 40. It closed at 41 1/8, off 1/4, on the New York Stock Exchange Tuesday.
The gains are all the more impressive given that Hilfiger followed its initial public offering with three secondary offerings. These offerings paid off handsomely for a group that included Hilfiger’s original backers and top management. The group has netted a combined $325 million on an original investment of $206,000. Insiders paid an average of one cent a share for their original stake in Hilfiger.
Apparel International Holdings Ltd. (AIHL), which is controlled by Silas K.F. Chou, Lawrence S. Stroll, Hilfiger and Joel J.Horowitz, raised $62.9 million in a November 1993 offering, $127.3 million in a June 1994 offering, and $135.4 million in a March 1995 offering.
Chou, Hilfiger’s chairman, and Stroll, director and chief executive officer of Tommy Hilfiger Far East, effectively own 70 percent of AIHL. The two also hold titles at Pepe Group PLC, where Chou is chairman and Stroll is group chief executive officer and director.
Hilfiger, the designer, who also has the title of honorary chairman, holds 22.5 percent of AIHL and Horowitz, ceo of Tommy Hilfiger Corp., holds 7.5 percent.
All of the offerings reduced AIHL’s stake in Hilfiger to 6.3 percent as of June 1995 — the date of Hilfiger’s latest proxy. AIHL owned 100 percent before Hilfiger’s September 1992 IPO.
Separately, the company itself raised $46.9 million in its IPO and an additional $65.5 million in the November 1993 stock sale.