Excellent example of a modern brand-based corporation
, one that doesn't actually make
anything but instead mass-market
s its brand
onto a variety of disparate products.
Hilfiger himself was born in 1951 in Elmira, NY. Fashion-oriented from early on, he skipped college to work in retail, and in 1969 opened The People's Place to sell bell-bottoms and fringe from NYC to college kids in upstate New York. The business went bust in 1977, and he took a job designing for disco-era Jordache, from which he was fired after a month.
Undaunted, he formed a partnership with an Indian entrepreneur who owned licenses for Gloria Vanderbilt and Coca-Cola(!) clothing, who in turn hired adman George Lois to launch the brand with a bang. "The whole concept was to make Tommy famous with the first ad", said Lois,"... the hubris was beyond belief." The 1986 billboard in Times Square ran a single line of copy: THE 4 GREAT AMERICAN DESIGNERS FOR MEN ARE: R-L, P-E, C-K, T-H, meaning Ralph Lauren, Perry Ellis, Calvin Klein, and of course Tommy. Despite resentment from the atelier establishment, the strategy worked and Hilfiger's nouvelle-preppy line began doubling sales each year. Hilfiger's formula was "classics with a twist", pitched to Young Republicans; contrasting-stitch buttonholes, or pastel lining on an oxford shirt, and a hip, abstract logo.
In the early 90's, with sales around $100 million, Hilfiger noticed the appeal of his merchandise to inner-city poor and working-class kids obsessed with "living large", as reflected in clothing normally associated with upscale leisure activities such as yachting and golf. He began to tailor his marketing to appeal to these hip-hop fantasies, added hoods, cords and baggy sizes to the line, and actively recruited rap artists to wear the gear. Hilfiger had his breakthrough when Snoop Dogg wore a Tommy rugby on Saturday Night Live in March 1994. Once the ghetto appeal was established, Hilfiger ingeniously inverted it and used the ghetto cachet to sell his line to the much bigger market of white middle-class kids obsessed with hip-hop style. Sales in 1998 were up to $845 million. To quote Naomi Klein:
Hilfiger's marketing journey feeds off the alienation at the heart of America's race relations: selling white youth on their fetishization of black style, and black youth on their fetishization of white wealth.
Another element of the Hilfiger story is his successful extrication of the company from anything to do with actual production
of the goods
it sells. Licensing agreements, not design
, constitute the company's core competency
. Jockey International makes the underwear. Estée Lauder
makes the fragrance. Pepe London makes the jeans; shirts are by Oxford Industries, and shoes by Stride Rite
. Tommy himself neither designs nor chooses the clothes that make it into a season's line:
"I have a creative team. I sit with the men's designers on a regular basis and tell them what's on my mind... I give them primitive sketches from time to time."
Sales in 2000
were over $2 billion, and a deal was in the works to buy Calvin Klein
(the company, not the designer) but at this point, the dark side of being in the business of image instead of product emerged: when your market turns against you or loses interest, your brand
has only the momentum of air
to sustain it. The hip-hop crowd spurned Tommy in favor of hipper, blacker newcomers such as FUBU
and Phat Farm
. Runway shows were cancelled, Spike Lee
satirized the designer as "Timmi Hilnigger" and the share price plunged from $41 to less than $7. Wall Street
cringed and the fashion jackals crowed, but the brand had been embedded deeply enough in the teenage American psyche that as of mid-2000, they still buy Tommy clothes more than those from Old Navy
Tommy Hilfiger Corporation (NYSE: TOM) is based in Hong Kong and has 172 stores worldwide, with net revenue in 2001 of $1.88 billion.
No Logo by Naomi Klein