NEW YORK — Tommy Hilfiger Corp., the $1.89 billion apparel company that has been looking to make an acquisition for the past year, may have set its sights on Marc Ecko Enterprises, the hot men’s and women’s hip-hop lifestyle brand.
Hilfiger confirmed Tuesday that his company has held conversations with Marc Ecko Enterprises, but said there was presently no deal in the works.
“We’ve talked with them, but we’ve talked to a lot of people. We don’t have any plans to do it right now,” said Hilfiger.
That perhaps could be because Marc Ecko Enterprises claims to have acquisition plans of its own. In a statement to WWD, the company said it expects to buy a $1 billion company within the next month — and is down to a short list of two.
Hilfiger, in a telephone interview Tuesday, confirmed his company has looked at a lot of companies during the past year. “We have a strategy to buy a tier-one brand or a designer brand with better distribution,” he said. Even if negotiations were getting close, a deal would have to be approved by the company’s board of directors, which doesn’t meet for another two weeks.
Last May, Hilfiger hired J.P. Morgan Chase & Co. to assist in “exploring acquisitions of additional brands.” At the time, sources indicated Hilfiger’s firm had been in play, and that Jones Apparel Group was negotiating to buy it. However, instead of being acquired, Hilfiger decided to explore acquisitions of its own.
While Hilfiger has continued to talk to companies about potential acquisitions, some market observers believed Hilfiger needed to get its own house in order first. During the past year, David Dyer, Hilfiger’s chief executive officer, has tried to shore up the company’s troubled U.S. wholesale business, reducing distribution in order to bring supply and demand into a better balance.
As for Marc Ecko Enterprises, the firm said in the statement, “It should not serve as a surprise to anyone that Marc Ecko Enterprises is receiving calls from various companies interested in acquiring us. We received strong indications of interest from many different potential parties, from some of the industry’s largest corporations to other significantly smaller players, most notably, Triple 5 Soul, Pure Playaz and Drunken Monkey. The spirit and tenacity with which these firms have approached us has served to truly inspire our management team to do more with less as these fine companies have attempted to do. We therefore switched our tactics from a defensive position to an offensive position.”
Furthermore, it said, “over the next few months we will be making an acquisition in the billion-dollar range. We have thought about everything from Dockers to Lacoste and we hope to be making a public announcement within the next month. We have narrowed the candidates down to two companies and we have been spending a great deal of time with our astrological consultants to aid us with honing in on our choice.”
Marc Ecko Enterprises has been on a fast track since its founding in 1998 by Marc Ecko and Seth Gerszberg. The hip-hop lifestyle-influenced family of brands currently generates $350 million in wholesale volume. Its brands include the men’s line Ecko Unlimited; the G-Unit Clothing Co., which produces a men’s line for the rap group G-Unit; Zoo York, a line of skateboards and skate-influenced clothing and accessories; Femme Arsenal, an upscale line of women’s clothing, accessories and cosmetics; the junior label Ecko Red (produced under license), and Marc Ecko, a premium collection of men’s clothing and accessories. It also plans to launch a G-Unit junior line for fall.
Two weeks ago, the company purchased the Fetish brand, a line of junior apparel bearing rapper Eve’s name, from Innovo Group. Marc Ecko Enterprises will relaunch the Fetish brand for fall 2005 retailing.