In an industry that’s seen a lot of flashes in the pan, Tommy Hilfiger has had staying power.
The 35-year-old fashion business is as busy today as it was when it started. WWD talked with Tommy Hilfiger and Martijn Hagman, chief executive officer of Tommy Hilfiger Global and PVH Europe, about the brand’s history, how it’s doing during the COVID-19 pandemic and where it’s headed in the future.
In building what’s become a $9.2 billion retail business, the 69-year-old Hilfiger has successfully capitalized on celebrities, music and entertainment to keep the label current and top-of-mind with younger consumers. The company’s see-now-buy-now initiative, which featured codesigners Gigi Hadid, Zendaya and Lewis Hamilton, proved to be a big win for the brand, which also has pushed forward with initiatives such as 3-D design, artificial intelligence, digital showrooms and sustainability and diversity practices.
But it wasn’t always smooth sailing for Hilfiger, whose business in the Nineties suffered from over-distribution and counterfeiting, and the company had to pull back in order to spring ahead. A sale to Apax Partners in 2006, and then to PVH Corp. in 2010, proved to be a lifesaver for the brand, and gave the house stability and support in many areas, such as sourcing and technology.
In a fashion world that’s constantly changing and demanding newness all the time, Hilfiger said the company made many moves that kept the brand’s momentum going. “Our main focus is keeping the brand relevant. Keeping it eternally youthful, keeping the momentum and spirit very positive, but at the same time putting the consumer first always. That has never changed in the 35 years,” he said.
What propelled the brand throughout its history was surrounding it with pop culture, and what Hilfiger calls “Fame: Fashion, Art, Music, Entertainment.” From early on the company incorporated celebrities in its marketing and advertising. In the early days, it featured Britney Spears, Usher, Aaliyah and the sons and daughters of well-known people such as Mick Jagger’s children, Rod Stewart’s children, Quincy Jones’ daughter, Kidada, and Ivanka Trump, who was in one of the brand’s campaigns when she was 15. “We were always keeping the brand fresh by looking at new ways to always reinvent and create momentum,” said Hilfiger.
He recalled when he was introduced to Mohan Murjani, chairman of the Murjani Group and the backer of his brand. Hilfiger had landed a new job at Calvin Klein. “The day after I accepted the Calvin Klein job, I met Murjani in his office after having been introduced to his family in Hong Kong. He asked what I’m doing these days, and I told him I was going to work for Calvin Klein as the designer of his jeanswear/sport division. And he said, ‘Why do that? Why don’t we start the Tommy Hilfiger brand together?'”
Murjani knew about Hilfiger because he had just won an award from Abraham & Straus, designing his brand called Click Point, said Hilfiger. After Murjani suggested they do a line together, Hilfiger said they should call it Tommy Hill since Hilfiger would be too difficult to pronounce. “Mohan said, ‘People can pronounce Yves Saint Laurent, why can’t they pronounce Tommy Hilfiger?'” recalled Hilfiger. Besides, he found out that the name Tommy Hill had already been registered by someone else.
Murjani told Hilfiger he could design what he would want to wear. “I wanted it to be preppie but cool, but different than any clothes out there. I wanted it to be oversized and full of really cool detail. In 1985, we launched Tommy Hilfiger classics with a twist. And the brand took off,” said Hilfiger.
He recalled the breakthrough ad campaign created by George Lois featuring a hangman image comparing Hilfiger to such well-known men’s wear designers as Ralph Lauren, Perry Ellis and Calvin Klein.
“We didn’t have a lot of money for advertising,” recalled Hilfiger. “When George Lois came up with the hangman campaign, we thought the only way we’re going to become known is through some disruption. Even though I was hesitant to run the hangman campaign, it was disruptive enough to create a lot of attention for the brand,” said Hilfiger.
Marvin Traub, the late ceo of Bloomingdale’s, was the first to embrace the brand and opened shops at Bloomingdale’s. Saks Fifth Avenue, Neiman Marcus, Barneys New York also carried the brand, followed by Macy’s Inc., Nordstrom Inc. and Dillard’s Inc. They then added women’s wear, and Estée Lauder signed a fragrance license with Hilfiger.
His strategy was to dress cool musicians, and hope that their fans would then flock to the brand.
“We [he and his brother Andy] went out and gifted musicians and cool people with a lot of our clothes. In the late Eighties and early Nineties, we starting gifting the hip-hop crowd. We learned that they had discovered it. This is when we started doing big logos and sport-inspired designs with a lot of red, white and blue, and using sporty, athletic details, but with real giant logos. We found that these kids were wearing these clothes on the street, and we really created what is known today as streetwear,” said Hilfiger.
The designer attributed a lot of the brand’s popularity to Snoop Dogg, who wore Hilfiger’s clothes. “It gave us real credibility in the hip-hop community when Snoop Dogg wore our rugby shirt on ‘Saturday Night Live,'” said Hilfiger.
The entry into women’s apparel wasn’t nearly as smooth and successful as the men’s wear. “It was a struggle at first and then when Silas Chou and Lawrence Stroll came as partners [in 1989 when they founded Sportswear Holdings to acquire Hilfiger and Chou became chairman] with Joel Horowitz and me, we decided to put women’s on the back burner, build up men’s which was our main focus, and Silas said when men’s becomes really strong, then we can do women’s. We did do that. After that, we said we have to do jeans, so we did Tommy Jeans and then we did children’s and then we started with the licensing of underwear, fragrances, watches and other product categories,” said Hilfiger.
But then Hilfiger hit a wall. “The U.S. business was really very bloated. The distribution was far and wide. The brand was on every street corner, there was a lot of counterfeiting going on. We really overexpanded and over-distributed,” admitted Hilfiger. He said it was a function of being public [the brand had gone public in 1992] and needing to please Wall Street with growth.
In the meantime, the European business was growing steadily and was positioned at a higher level. Fred Gehring, then ceo of Hilfiger, and his team positioned the European business with more sophisticated product. It was higher-priced, higher-quality and they opened stores shoulder-to-shoulder with leading luxury brands.
“Fred Gehring and his team thought that the Europeans would pay a higher price for higher quality, more sophisticated styling, not heavily logoed and was absolutely right,” said Hilfiger. “He positioned the brand in a slightly understated and more sophisticated way.”
The next step was taking the company private with Apax in May 2006 for $1.6 billion. “We decided to take a step backward to go forward. We cleaned up the distribution and this was under Fred Gehring as ceo and his team. We took a page out of the European book because of the success and we started growing again,” said Hilfiger.
For the North American business, they signed an exclusive deal with Macy’s, which ran from 2007 to 2019. They also started distributing a lot of the European product in the U.S. through its own stores and department stores, and at the same time, introduced tommy.com.
“It was difficult to put [the elevated] product in the other stores, although we were in Saks online and eventually went into Nordstrom’s with the elevated Tommy Jeans line and the Hilfiger Collection,” said Hilfiger.
The 45-year-old Hagman noted because the products were at a different label, it was the international stripe label, they were able to sell in higher-tier distribution under the Macy’s exclusivity contract.
The brand’s fortunes started to run around in the U.S., and the company was sold to PVH Corp. in 2010 in a cash-and-stock deal valued at $3 billion.
In 2019, Hilfiger generated $4.7 billion in global revenues, which grew 8 percent in all regions, channels and collections.
Throughout its history, the celebrity connection has always been a critical component of the brand. Hilfiger had featured celebrities in its advertising, such as David Bowie and Iman, and sponsored concerts and dressed stars such as The Rolling Stones, Lenny Kravitz and Jewel. Beyoncé became the face of their women’s True Star fragrances, and Enrique Iglesias was the face of its men’s True Star fragrance. They also featured Spears, Mark Ronson and Usher in campaigns, but these singers and performers never really were involved in creating any product, said Hilfiger.
“When we started talking about where to go in the future, we were looking at Gigi on our runway thinking that she had great personal style on and off the runway,” said Hilfiger. “We thought why not bring her in to actually design with us, as opposed to just being the face of the brand? So when we asked Gigi, she was really excited about doing it, and it was the beginning of our ‘See Now Buy Now’ chapter,'” said Hilfiger.
The company staged the “TommyNow” fashion shows — with elaborate themes and sets — in New York (twice), Los Angeles, London, Milan, Shanghai and Paris. Themes ranged from “Tommy Pier” in New York and “Tommyland” in L.A., to “Rock Circus” in London and Tommy and Zendaya at The Apollo Theater in Harlem.
The first Gigi Hadid show in September 2016 generated 900 percent increased traffic to tommy.com in the 48 hours following the show. There were 2.2 billion social media impressions surrounding the event and the halo effect was double-digit sales growth in all women’s categories in every region.
“Which I don’t have to tell you, it’s been nothing but incredibly successful,” said Hilfiger. “A lot of it came from the fact that we were able to execute it well. It wasn’t an item or two on the runway that you could ‘see now buy now,’ but it was everything.” The collection was codesigned by Hadid and the Hilfiger team. They later went on to do a codesigned collaboration with Lewis Hamilton and Zendaya. “We invited our celebrities into our design room and gave them the free rein to design what they wanted to design and what they love,” said Hilfiger.
Asked whether they were required to make it look like Tommy Hilfiger, the designer said, “Zendaya did not look like Tommy Hilfiger at all. It was much more elevated than in the past. It was dressier, it was very Seventies-inspired women’s wear, dresses, jumpsuits, skirts, blouses, leather pieces. It was a real true designer collection. But really designed by Zendaya, Law Roach, her stylist, and her team.” He said it sold very well.
“People are so obsessed with Zendaya. People want to wear what she wears, and what she loves,” he said. Zendaya designed for two seasons and Hadid for four seasons.
The fall 2020 Tommy x Lewis capsule was the fifth collaborative collection with Hamilton. The fall 2020 collection incorporated 100 percent recycled denim, organic cotton and postconsumer recycled materials into almost 80 percent of the styles. It also featured gender-neutral pieces. Hilfiger’s deal with Hamilton will wrap up after the fall 2020 season.
Hilfiger is still sorting out whether these designer collaborations will continue into 2021 and beyond. He said they’re always looking to come up with something disruptive, exciting and unique. “We really believe you have to always evolve and move forward, and never get stuck in doing what you did before,” he said.
As for the future of the catwalk, Hilfiger said, “For us, it has to change. It should not be as it was. A lot of companies will possibly never change, but for us, the excitement is all about change.”
The company has begun a Drop Shop program with smaller drops from influencers, artists, entertainers and sports people. They have also initiated the People’s Place program (named after Hilfiger’s first store in Elmira, N.Y.), which develops collaborations with minority designers, starting in 2021. These are smaller drops, not large-scale collections. They are giving people of color opportunities they wouldn’t have normally and unlocking doors for them, said Hilfiger.
According to Hagman, “What is interesting about the drop shop and the smaller collaborations, you have all this creative talent, and you ask for their interpretation of the Tommy Hilfiger brand. What is their twist to our products? That clash is sparking a lot of creativity that also resonates really well with the end consumer. It’s fresh, it’s exciting, it’s unexpected and that’s what we’re trying to achieve. To bring those sparks every month in much smaller capsules than the bigger collaborations we’ve seen in the past.”
Another first for the company is using 3-D design for its products. Hilfiger said they were introduced to 3-D design through Jeffrey Katzenberg, cofounder of Dreamworks (who has since founded a new media and technology company called WndrCo). This is the same technology that Dreamworks was using for its animated films, but they felt it could be used to design other products, said Hilfiger.
“Jeffrey brought it to us, and we immediately embraced it and incorporated the whole concept in our design system, whereby 3-D design allows the designer to design without obstacles in portraying details that can be very difficult to get, even in computer-aided design or sketching,” said Hilfiger. He explained that they can send the 3-D design to a factory and they can understand how to make the product down to the smallest detail that sometimes you can’t explain or describe through a sketch or the older way of doing it.
Hagman said about 25 to 75 percent of all the divisions, including men’s, women’s wear, jeans and kids, are using 3-D design. “We are accelerating our effort through this crisis, where everybody has to work remotely. We’re seeing a very, very large adaptation by the entire organization,” said Hagman. At present, more than 65 percent of Hilfiger’s design teams have been trained in 3-D design, with the goal of 100 percent by the end of 2022.
“You can imagine that once you start something like this there is some hesitation on the designer side, who have been trained and educated from sketching and more traditional way of product development,” said Hagman. “But now they’re seeing that scale and all those benefits that Tommy was mentioning, and it helps them be more creative and also to be faster and to respond faster to the changes in consumer behavior.”
At times like this when customers can’t come physically to the showroom and vendors are on lockdown and can’t produce physical samples, Hilfiger was able with 3-D software to have digital samples to show them.
In 2015, Hilfiger created the digital showroom. Until then, they had showrooms full of samples and would make multiple sample lines for every showroom in the world. It was an enormous expense, said Hilfiger. “We created a digital showroom for buyers of all stores, as well as specialty stores and department stores to buy from this digital showroom, either in our showrooms, or in their home, on their own iPads. We were really ahead of the game, way before COVID-19, and way before we incorporated 3-D design into it,” said Hilfiger.
Today the digital showroom has been rolled out across 31 cities, with 40 theaters with 229 workstations now in place around the world.
The digital showrooms allow the buyer to map out their assortments and buys, see it on the big screen, and e-mail it to themselves. The retailers can see the store assortments and what it all looks like on the selling floor. They can see all the details of the garment, the interior and front, back and wide views.
Turning to their business with stores, Hagman acknowledged that the wholesale model is in flux, but still feels it’s an important channel for the company, accounting for 60 percent of the business.
“We will not walk away from wholesale,” said Hagman. “It will remain a very important channel for us, whether it’s in North America, whether it’s in Europe and to a degree in Asia, whose marketplace is much more retail-oriented. The wholesale market is contracting for sure. The digital sales channel is growing much faster. The pure players are growing very rapidly. The wholesalers are developing their own dot-com and investing in that channel. They have to,” he said.
Hagman said the consumer wants to shop online and has found it very convenient. He feels that in Hilfiger’s distribution mix, the share of digital sales channels will increase over time. But the brick-and-mortar channel remains important from a brand-positioning and brand-equity point of view, he said.
“It’s still a very important space where you can portray the brand in a very good way in collaboration with your wholesale customers. We have very strong relationships [we] built with them over the years, and they are aware that they have to reinvent their model. We are partnering with them to adjust the model and to find that new operating model that is future-proof and serving the changing customers’ needs,” he said.
As far as its direct-to-consumer business, Hilfiger has 2,000 stores worldwide. The company just finished a big renovation of its Paris store. In the U.S., there are 186 outlet stores. At one point in 2014, the company had seven full-price retail stores in the U.S., all of which have since closed. “We’re really contemplating where to go next. Certainly the e-comm business in the U.S., Europe and Asia has been better than ever,” he said. Hilfiger said they’re not abandoning opening retail stores in the right cities.
Having PVH as a parent the past 10 years has been a real advantage for Hilfiger, particularly in light of the support they’ve provided. “We always say that PVH has a very strong balance sheet, so there’s a lot of strength through that, whether it’s through financing or any type of support that they can give to the brands that they own,” said Hagman. “Since 2010, they’ve really helped to grow the brand and to fuel the brand, and to unlock all the opportunities it has globally.”
“I think that due to the fact that PVH is so strong financially, we feel very secure. But it hasn’t been an easy year for anyone,” said Hilfiger.
Hagman noted that PVH is a strong company, with a strong foundation and very strong brands. “And we didn’t lose any of that strength in the crisis. We’re building on that and we’re seeing the recovery progressing well. We knew it was going to be a long journey, and we anticipated a second wave and even a third wave. Full recovery will take some time, but we planned for it and are progressing nicely against our plans,” said Hagman.
In PVH’s third-quarter results, released Dec. 2, Hilfiger experienced a 12 percent decrease in its business compared to a year ago, with Tommy Hilfiger North America revenue down 37 percent and Tommy Hilfiger International revenue flat compared to the prior year. The business in China continued to achieve positive year-over-year results.
Over the past decade, Hilfiger has made tremendous strides on the sustainability front.
According to Hagman, PVH and Hilfiger, as well as Calvin Klein, have had a strong social sustainability program looking after the rights of factory workers and other initiatives. Ten years ago, the Hilfiger brand started looking more at the environmental side of it. “We started looking into how are we manufacturing, how much energy are we consuming, how much water are we consuming, how much chemicals are we using in our manufacturing process? And which type of raw materials are we producing, and how are those raw materials being produced?” said Hagman.
This year Hilfiger launched the third wave of its sustainability program, called “Make It Possible.” That strategy is focused on wasting nothing and welcoming all, with 24 targets to become a sustainable brand by 2030. Wasting nothing looks at protection of natural resources, and welcome all is the inclusivity part of the sustainability program. It not only looks at workers’ rights and human rights, but what type of inclusive products and inclusive shopping experience can they bring to the market.
Hilfiger has launched a number of initiatives around waste nothing and welcome all. The People’s Place Program, which aims to advance the representation of Black, Indigenous and people of color within the fashion and creative industries, fits under that header. The company has also built the world’s largest solar roof in the Netherlands on top of its distribution center providing electricity for all its operations in the Netherlands.
The company has always had a distinct culture. Hilfiger said from the beginning until 15 years ago, the culture was “very American.” Then when the Amsterdam headquarters opened, it became very international. “Today, it’s very, very international, inclusive and diverse.” The company has 105 nationalities represented across the U.S., European Union and Asia.
Asked what they see as the biggest challenges facing the company, Hilfiger said, “Right now, COVID-19.”
Hagman pointed out that with the acceleration of digital sales and so many new companies and marketplaces opening up in the digital space, one has to be very aware of where one’s product is ending up. “Who’s selling your product? Are there counterfeits on these digital platforms? That pivoting of the distribution mix is one of the challenges we have to deal with,” said the ceo.
Hilfiger sells on Amazon in both the U.S. and Europe. “It’s one of those big, powerful platforms that we have to figure out the right way of partnership. It’s the traditional question: What product do you want to show and how much volume do you want to do over that platform, versus the many other digital platforms that are available,” said Hagman.
Hilfiger noted the company also sells such platforms as Alibaba’s Tmall, JD.com, Zalando, Farfetch and Asos.
With so many upstarts coming along, as well as young, hip brands chipping at their heels, how does a brand like Hilfiger manage to stay fresh?
“We have to collaborate with the young and hip, like Kith,” said Hilfiger. “We did an incredible collaboration with them twice in a row. The same with Vetements. We’re always doing collabs with not only individuals, but cool companies to create some fresh, new exciting products and drops. We like to stay in touch with young talent through mentoring them, or collaborating with them, or somehow embracing them,” said Hilfiger.
Over the years, the company also stayed connected to popular culture through many art, music, entertainment and sports collaborations with Rafael Nadal, Hamilton, America’s Cup, Formula One, Tommy x Mercedes Benz, Looney Tunes, Zooey Deschanel, Coca-Cola, Keith Haring, The Rolling Stones, Sheryl Crow and The Chainsmokers, among others.
As for how his role has changed over the 35 years and where he sees it going, Hilfiger said, “I would say that I share my vision with the team on a continual and regular basis. I will give them an overall big idea and then they will come back to me on how to execute it and take it to another level.
“‘See-now-buy-now’ was just a thought, an idea, and opening up our runway shows to the public and going on a world tour similar to a rock group going on a world tour,” continued Hilfiger. “Avery Baker [then chief marketing officer and chief brand officer and now president and chief brand officer] and team took that idea and made it into something much more phenomenal that I had anticipated. I think sharing my vision with the team is really what I do more than anything else. I also introduce the team to a lot of celebrities and opportunities that maybe are not in front of us today but may be in front of us tomorrow or years to come,” he said.
Hagman circled back to this several minutes later. “I think Tommy was down-playing his role and was modest about his own role. For the full 35 years, he has obviously been incredibly important to the brand, and his curiosity, his push for innovation, his famous question, ‘What’s next?’ has always inspired our teams and pushed us forward, including myself over the years and my position today. He has been invaluable for the brand and still is, throughout all the 35 years.
“Not many brands have that,” added Hagman. “And we are fortunate to still have the founder in the middle of the business. Even talking about artificial intelligence and the gaming industry, and he’s continually pushing us forward.”
Last month Baker, 49, returned to the company as president and chief brand officer. Asked the rationale behind a new global position, Hagman said, “We recognize that the brand is our single most important asset and we want to unify all aspects that drive brand unity under one leadership from marketing to design to product merchandising.…We believe we can really unlock that global brand potential and at the same time, protect the global premium brand positioning that we have built so successfully throughout the world. And having Avery in that leadership role, she can really protect that one creative voice throughout, protect the brand equity and build the business from there.”
Hilfiger added that Baker’s real focus is also “to make sure we’re a brand with purpose…in the coming months we’ll be able to unfold that and show you what that really means.”
“Brands today not only have an opportunity, but a responsibility to make a positive impact on the world,” said Baker, in a separate interview. “At Tommy Hilfiger, our determined optimism has always driven us forward and been a foundation for change. From our People’s Place Program to our ambitious Make it Possible sustainability journey, we are writing the next chapter for this brand and it will have a positive impact on our society and our industry.”
As Hilfiger looks back over the past 35 years, he said he has a lot to be proud of.
“It was always my dream to build a global lifestyle brand. It continues to show promise, growth, excitement. It’s all about having this determined optimism. We democratized fashion. We say that anything is possible. We’re inclusive, we’re diverse,” said Hilfiger.
He noted that the company developed adaptive clothing for people with special needs which has been very successful. It started out in children’s wear, and they found that adults were eager for it. They sell it on Amazon. It is available to consumers in North America, Europe, Japan and Australia. He also pointed to a new circular sustainability program called Tommy for Life, where they re-imagine and redesign Tommy Vintage, and recycle from the past.
According to Hagman, they are piloting Tommy for Life in the Netherlands, and plan to roll it out across Europe (in three markets) in spring 2021 and fall 2021. It’s all pre-owned and pre-loved Tommy Hilfiger and Jeans product that they clean and repair. If it’s in great condition, they put it immediately on the site. Sometimes they re-mix it and they make unique, new items out of it. If there’s too much damage and they can’t sell it anymore, they recycle it for different uses. They don’t throw anything away.
Looking ahead, one of the biggest growth opportunities for the brand is increasing its Chinese business. At present, the company’s two largest markets are Germany and the U.S. “What we see as the biggest opportunity is China. That’s what we’re going to focus on and really push – raising the overall awareness of the brand in the Chinese market and its extension with the pure players in the market, like the Alibabas and JD.com,” said Hagman. “Then there is an opportunity for our Tommy Jeans line, which is targeting the younger consumer and the more streetwear consumer, as well as women’s wear. That’s still under-penetrated in Asia, and we see an opportunity to extend.”
Overall, Hilfiger’s business is 60 percent men’s, and 40 percent women’s, and that includes not only apparel, but footwear and accessories.
As for new categories that they would be interested in pursuing, Hagman said they’re well represented in all the product categories, but the health and well-being sector would be worth exploring. The company recently launched Tommy Hilfiger Electronics, headphones, ear buds, speakers and gadgets which are selling well in their own stores and online, said Hilfiger.
Discussing the high points of the last 35 years, Hilfiger said first and foremost that Murjani believed in him, and that George Lois taught him what disruptive advertising really was. “When Joel Horowitz and I became partners with Silas Chou and Lawrence Stroll is was a big turning point. We were the first fashion company to go public on the New York Stock Exchange, which was another milestone. Taking the company private with Apax and then selling it again to PVH were all business milestones,” said Hilfiger.
“A creative milestone was being the first to do streetwear in the world in 1988-1989, and that’s something I’ll always be proud of. Recently, the collaborations with Gigi, Zendaya and Lewis Hamilton in doing the ‘see-now-buy-now,'” he added.
As for the low points, Hilfiger admitted, “The lowest point was probably having to contract the business in the late 1990s as a result of the over-distribution, then when my partners, Silas, Lawrence and Joel decided to move on, I felt rudderless. Somehow things worked out. We’re now probably more powerful than we’ve ever been as a brand. We had a blowout year. We did almost $10 billion in retail sales. I never dreamed we would be a brand doing that kind of business. It was always my dream to do $1 billion. This has far surpassed my greatest expectations. I think it is due to having an incredible and passionate team,” said Hilfiger.
“Going forward, I really believe we are at a tipping point, where a lot is going to change in the industry, in general. And that’s exciting to me because I love change and evolution,” he added.