One of the top 90s brands recovered from a horrible crash -- and sales are soaring

Tommy HilfigerTommy Hilfiger Facebook PageTommy Hilfiger at his Fall 2014 Runway Show.

Fresh off the heels of its 30-year anniversary, Tommy Hilfiger is one of the most influential brands in the retail industry.

But it hasn’t always been a smooth ride for the preppy fashion house.

Originally founded as an American, classical-cool label, the company was immediately successful upon its launch in 1985.

Retail sales grew to $US70 million in 1987, and the company went public in 1992.

Throughout the ’90s, the brand drew interest from celebrities and media.

Traditional pieces the designer unveiled in his first collection for the brand were replaced with louder, edgier styles and flashier ad campaigns.

The Tommy logo was featured prominently in the hip-hop scene, from Snoop Dogg wearing the logo on SNL to artists like TLC, Destiny’s Child, and NSYNC decked out in Hilfiger garb at award shows.

AP9609280657AP Photo/Lynne SladkyTommy Hilfiger walks down the runway with supermodel Naomi Campbell following his debut show at LFW in 1996.

Sales at the company boomed, but the pressure to expand began to take its toll. At one point, you could buy Tommy Hilfiger in Kmart stores.

“Look, it fuelled a lot of growth, but it took us away from our roots,” Hilfiger told Bloomberg.

The brand’s overexposure led to a levelling off of sales in ’99.

“His first runup happened too fast, and it became ubiquitous. He veered off his brand,” said Robin Lewis, CEO of The Robin Report and co-author of The New Rules of Retail.

After a decade of double digit growth, the brand had its first major loss in 2000.

Earnings plunged by as much as 75% in the worst quarter; the company’s stock fell from $US41 to $US6.30 a share.

The company was suffering so much financially that it decided to go private in 2006. It was acquired by Apax Partners for $US1.6 billion.

After staying with Apax for four years, Tommy Hilfiger was sold to Phillips-Van Heusen Corporation for $US3 billion in 2010.

Fred Gehring Tommy HilfigerCraig Barritt/Getty ImagesFred Gehring, former-CEO of Tommy Hilfiger, pictured with the designer

With the purchase, PVH Corp.was looking to capitalise on Hilfiger’s strong presence in Europe.

The company also wanted to take advantage of the tremendous opportunity for growth with its other brands.

“He repositioned himself back to his roots with the help of PVH,” said Lewis.

Since the acquisition, PVH has centered its focus mainly on its apparel companies.

The Tommy Hilfiger and Calvin Klein brands now account for 85% of PVH’s operating profit.

Their Heritage Brands include a variety of different labels like IZOD, ARROW, Speedo, and Van Heusen.

Business for Tommy Hilfiger recently has been strong. The company reported a fourth consecutive earnings beat in the most recent fiscal quarter. Revenues increased 3% and EPS grew 20%, according to an earnings call.

Lewis credits Tommy Hilfiger’s positive trajectory to the company’s focusing on its customers and merchandise. He feels Tommy has been so successful because of his ability to drive the brand experience for the consumer.

“Hilfiger puts the focus on building an experience through wholesale and in opening their stores,” Lewis said.

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