Tommy Hilfiger will bring most of its footwear business in-house as of January 2009.

Stride Rite, a division of Collective Brands Inc., has been the licensee for Hilfiger’s women’s, men’s and children’s footwear for over a decade. The license was slated to expire on Dec. 31. Stride Rite will cease production of Hilfiger’s women’s and men’s footwear, but will remain as a licensee for kids.

According to a joint statement from Hilfiger and Collective Brands, Collective Brands expects no material financial impact in fiscal year 2008 due to the change.

Stride Rite will deliver the full Tommy Hilfiger Footwear collection for 2008 and several Stride Rite employees will join Tommy Hilfiger USA under the newly created Tommy Hilfiger Footwear division, headed by Anne Marino, president of Tommy Hilfiger licensing.

“The Tommy Hilfiger team has been a great business partner, and we look forward to continuing our relationship with the Tommy Hilfiger Kids business,” said Stride Rite chief executive officer Greg Ribatt. “This transition plan is very thorough and ensures the utmost commitment to the brand and to our customers. Furthermore, for Stride Rite, it allows our teams to focus on the key opportunities before us with our owned brands such as Sperry Top-Sider, Saucony, Stride Rite and Keds.”

Fred Gehring, ceo of Tommy Hilfiger Group, said: “We have always had a very successful relationship with Stride Rite and appreciate its valuable contributions to the brand over the past decade. However, since the Tommy Hilfiger Group acquired Tommy Hilfiger Footwear GmbH in 2007, the company that operates the footwear business internationally under a separate license agreement, we have experienced the benefits of having this type of dedicated expertise in-house….Therefore, we firmly believe that bringing the U.S. footwear business in-house as well will allow us to benefit from global economies of scale and further brand alignment.”

Tommy Hilfiger Footwear will continue to be sold through its distribution networks and Hilfiger’s stores in the U.S.

Last year, Hilfiger said Macy’s Inc. would be the exclusive retailer of Tommy Hilfiger sportswear in the U.S. beginning in fall 2008. All products distributed through Hilfiger’s licensees, including home, footwear, accessories, watches and fragrances, will continue to be sold on a nonexclusive basis to Macy’s and other retailers.

This story first appeared in the March 5, 2008 issue of WWD. Subscribe Today.