HILFIGER STOCK DOWN 6.9 PERCENT AFTER NEWS OF SHL SALE OF SHARES
Byline: Vicki M. Young
NEW YORK — Shares of Tommy Hilfiger Corp. took a roller coaster ride Tuesday following Monday’s announcement that Sportswear Holdings Limited would sell up to 7 million shares of the company.
When the journey ended, the stock stood at $15.05, down $1.12, or 6.9 percent, in trading on the New York Stock Exchange. In intraday trading, the stock fell as low as $15 early before rising to $15.29 shortly after midday. The 52-week high is $17.25 and the low $6.31. Shares hit their 52-week high on Friday, the day after Tommy said it posted a third-quarter profit that fell short of year-ago results, but still managed to beat Wall Street’s estimates by 2 cents. The previous high was $15.50.
As reported, Tommy said Monday that Sportswear Holdings Limited, a company affiliated with Tommy co-chairmen Silas Chou and Lawrence Stroll, would sell up to 7 million, or 57 percent, of its 12.3 million Tommy shares. The proceeds are to fund investments in other companies within Sportswear Holdings’ portfolio.
Stacy W. Pak, equity analyst at Prudential Securities, said, “We see near-term pressure on the stock, but view it as a buying opportunity.” She added that “nothing has changed the fundamentals of the company.”
According to Pak, Chow and Stroll will still own 5.9 percent of Tommy after they sell their 57 percent stake. Tommy Hilfiger, the designer, and Joel Horowitz, the company’s chief executive officer, will continue to hold a combined 6 percent of the firm’s stock. She doesn’t anticipate any additional selling of stock by insiders.
Separately, Tommy Hilfiger Licensing Inc. and its Canadian licensee Tommy Hilfiger Canada Inc. said Tuesday that they have settled a trademark infringement dispute against Giant Tiger Stores Ltd., a retailer in Ontario and Quebec. According to Tommy, the lawsuit alleged that the 93-unit chain sold apparel with a fabric design containing words — such as “Tommy Style,” “Tommy Sport” and “Tommy Design” — that infringed on the Hilfiger trademarks.
As part of the settlement, Tommy said that the retailer has agreed to stop selling the offending apparel and will pay “100 percent of the gross profits earned on the sale of the infringing” apparel, as well as legal costs. The exact amount of the settlement was not disclosed.
Executives at Giant, a franchised family discount store chain, could not be reached for comment.