MOODY’S DOWNGRADES HILFIGER
NEW YORK — Moody’s Investors Service downgraded Tommy Hilfiger USA Inc.’s debt and bank loans to high-level junk status from low-level investment grade because of concerns about “a more intense competitive landscape.”
Moody’s assigned the company’s senior unsecured debt and bank facility ratings to Ba1 from Baa3 following a review of the company initiated last month and its parent firm’s 24.7 percent decline in fourth-quarter earnings to $34.8 million, exclusive of special charges, announced last week.
While citing price pressure, new entrants in the designer field and “weakened results in men’s and women’s (including junior’s) wholesale lines,” Moody’s also noted its belief that “Tommy will remain a key player in the industry” and start to regain the sales and margin momentum it has recently lost in the second half of the company’s fiscal year. Hilfiger’s current fiscal year runs through March 2001.