Tommy Hilfiger has discontinued its Canadian wholesale women’s and men’s business to concentrate exclusively on the expansion of its retail business there, in which it operates 56 stores.
This story first appeared in the April 22, 2009 issue of WWD. Subscribe Today.
Last month, Hilfiger said it would integrate Tommy Hilfiger Canada and Tommy Hilfiger USA Inc. under the umbrella of Tommy Hilfiger North America and restructure its personnel. Gary Sheinbaum, group president of North American retail, was named to oversee the retail business in Canada as well as the U.S.
As a result of exiting the Canadian wholesale business, the Montreal office will remain the Canadian corporate office, and the Toronto and Vancouver offices will close, as they were operating as regional showrooms for wholesale customers. This will result in the elimination of about 24 employees within the wholesale and operations divisions in Canada.
The company anticipates that exiting the wholesale sportswear business, combined with the integration of the U.S. and Canadian retail divisions, will improve overall profitability.
“Over the last 10 years, our business in Canada has evolved from what was originally a wholesale-based business to become predominantly retail driven. We project at the closing of our 2009 fiscal year (ending March 31, 2009) that 80 percent of the Canadian business will be generated through our network of 56 retail stores,” said Fred Gehring, Tommy Hilfiger group chief executive officer. “Concentrating on the retail business in Canada is in line with our continued effort to improve efficiency and productivity, a process which was accelerated by the current economic crisis,” added Gehring.
The product sold in Hilfiger’s Canadian retail stores is primarily European sportswear with a mix of U.S. sportswear pieces.
For the six-month period ended Sept. 30, Hilfiger’s U.S. sales rose 16.7 percent to $356 million from $305 million. At the wholesale level, Hilfiger said its partnership with Macy’s Inc. saw “significant growth” compared with last year. Last fall, Macy’s became the exclusive department store retailer of Tommy Hilfiger women’s and men’s sportswear in the U.S.
In the U.S., retail store sales grew 15.8 percent, while comparable sales were up 6 percent. In Canada, overall sales were 1.9 percent lower than last year due to the strategic downsizing of the wholesale business, the company said.