Inside Tommy Hilfiger’s American Dream | The Business of Fashion

[Music] tommy hilfiger set up his first fashion business at the age of 18 bringing big city styles to elmira his hometown in upstate new york the business grew rapidly but by the age of 25 hilfiger filed for chapter 11 bankruptcy protection and moved to new york city to try his luck there he met mohan morjani an indian businessman who encouraged tommy to set up a label under his own name to launch the brand hilfiger and morgani conceived of a bold advertising campaign comparing tommy hilfiger to fashion giants calvin klein ralph lauren and perry ellis it got all of 7th avenue talking and soon hilfiger's store was teaming with customers and the newest american fashion brand was born but a true american dream does not come without its challenges after a few years hilfiger had to seek out new financial partners and found them in the form of silas chao and lauren stroll who encouraged tommy to think big and think global in 1992 tommy hilfiger became the first fashion company to go public on the new york stock exchange leading to a decade of hyper growth and over 2 billion dollars in annual sales but soon the brand found itself overexposed and over distributed in 2006 the company was taken private by apex which saw potential for the brand in europe a new premium positioning strategy worked and was soon implemented globally in 2010 the restructured business was acquired by pvh with global retail sales of 6.7 billion dollars tommy hilfiger is now focused on securing the future of the brand he has worked so hard to build today at the brand showroom in london the business of fashion goes inside tommy hilfiger's american dream [Music] hello tommy nice to be with you today thank you for sitting down with me and the business of fashion um i wanted to spend some time talking about your career it's been 30 years now since you launched your business so let's go back to elmira okay new york where you grew up and where you set up your first fashion business um i i was curious to hear about kind of what motivated a young man living in a small upstate new york town uh what motivated you to think that fashion or you know starting a fashion business even back then was the right path for you i think it was by mistake in a way yeah because i had no idea that i would ever go into the fashion business yeah i was too small to play on the basketball team school too small and frail to play on the football team and in the mid to late 60s i became obsessed with music yeah the beatles came to america the rolling stones the who led zeppelin hendrix and all of the sort of super groups of the time were very influential there was a fashion music revolution taking place with woodstock and i wanted to be very much a part of that scene so because i couldn't really play an instrument i decided to look like a rock star right and i had long hair and wore bell bottoms and cool clothes and most of the students at my school were dressing in preppy clothes and very normal sort of classics but they all wanted to look like me because it was like you know sort of a rebellion against parents because the parents hated long hair they hated seeing like mod hippie type clothing on their children and at that time i decided to take 150 dollars i'd save from working nights in a gas station buy 20 pairs of jeans from the streets of new york city bell-bottom jeans and sell them to my friends okay so i opened a shop called people's place okay painted it black and played music burned incense and candles and sold cool really cool clothes but this was like way before the internet and way before kind of mass media i mean how did you because i've never been to elmira obviously but like how did you kind of figure out what was cool and like translate that into this this retail store it was all about what the musicians were wearing okay that was cool i mean seeing jimi hendrix and seeing the stones and the beatles and the who and all of these groups dress in such incredible ways i really wanted to be part of that whole world so i wanted to feature that type of clothing in my stores yeah so i searched new york city for the type of clothing i i needed to put in my stores and i would go to like obscure boutiques on the lower east side and before soho was soho and the east village and i would find really cool items sometimes vintage items and bring them back up to elmira new york which is a college town okay and i sold them to like cool young people right but along the way i was thinking wait i think if i were to add a pocket or embellish these jeans or change the design i would have a better product okay so i started designing on my own right and having these items made for my store and then stores subsequently people loved what i was doing and while i was doing that it was it was so much fun i thought designing clothes is something that that i never thought of you weren't trained as a fashion no no not at all so how did you how did you teach yourself basically how to design and and kind of put together a garment and there's a lot of technical you know skill that goes into designing i knew coming up with the ideas and sketching them was my forte that that was fun that was inspiring it was interesting and i knew that i would never be able to cut a pattern and sew these garments together right i would make a mess out of them right so i hired local people to work for me and i guided them and as i was doing that i was thinking i should build my own brand and it was my dream at that time in the 70s to build my own brand but i didn't really know exactly how to do it and at one point in time i said i'm just doing it so i moved to new york city i sold my stores but wait before you get into that there was the stores grew very quickly they drew very they grew very quickly i opened jean boutiques on college campuses throughout new york state right on the cornell campus cortland auburn uh corning new york lake george new york we opened a lot of stores i had a couple of high school friends who were partners and we over expanded and we had a bankruptcy which was like a master's degree in business for me because i realized we knew nothing about business and at that point in time i figured that in order to build a brand and to become successful you really should understand business right so i taught myself business and i toiled over reading a balance sheet and looking at the bank statements and really doing primitive math trying to figure out uh how to become profitable and i and i figured out that you know you have to sell more than your spending and it was quite simple at the end but it was uh it was difficult for me to grasp this idea of having to be a designer and a businessman right but i had no choice right so i forced myself into it so then you know you moved to new york city after having this like humbling thing and i imagine that's like a really difficult thing to go through and you're designing as a freelancer and you're kind of working with some of these big seventh avenue brands tell me about that experience and what what what that was like well it was very difficult to get a job without having gone to design school so i basically knocked on doors and showed people my work and begged people to to hire me and this jeans company called giordash had one gene that was like the gene in 1979 and i convinced them that they should do a whole collection i said look in order to expand your business you need a whole collection i could design a collection for you so i did and they paid me but then they fired me why did they fire you they said we don't need a collection we have one gene that is the basis of our entire company and our entire brand we really don't need it so we don't need you so i went to another company called bonjour jeans sort of a 70s designer gene vehicle and the same thing happened i went to work for them i designed a collection for them they didn't even want to look at it they said no we you know we have two or three genes that are really the basis of the business we don't need anything else so i met an indian gentleman by the name of munabeg and he told me at a factory in india and i said well i would love to go to india and i would love to design clothing in india because i think the fabrics are really cool and i've seen other brands do that so he said well why don't you come to my factory so i went to bombay first time first time which was an eye-opener yeah it was incredible i fell in love with india indian people the culture and i spent a lot of time there designing my first real collection under my own name which is really not my own name i named it tommy hill so then i was fortunate enough to meet another indian gentleman called mohammed yes and mohan at the time had gloria vanderbilt which is a big big jeans company and he saw something in me i think that was maybe unusual he saw that i was really driven to become successful but at the same time he he thought that it shouldn't be called tommy hill it shouldn't be called 20th century it should be called tommy hilfiger and i said are you sure you want to call tommy hilfiger because if if we call it tommy hilfiger do people really know how to pronounce that name and he said tommy do you think people know how to pronounce on the wrong and i said no that it's a very good point and he said so what would you design and i said well i would design for myself so we created tommy hilfiger in 1985. so that was 30 years ago 30 years ago and that was really the beginning of all of this you know where we sit today how did you know mr murjani was the right business partner it's you know it's something that um a lot of designers think about as their businesses are growing obviously you know some things don't change in fashion and whenever you know money men see a talent you know they they you go and proposition them and one of the questions i get asked a lot by young designers is like how do i know who the right investor or the right partner is what was it about mr morgani that that made you feel like okay this is this is a good one so when i met mohan it was like we'd known each other for years and he felt the same way and by the way we both feel the same way today we're both very close and connected but when we met each other it was just like a meeting of the minds and we knew that we would do well together so when he offered me the opportunity to have my own brand with him i jumped at it and then i went to the calvin klein people and told them that i was not going to take the job because i was going in to business for myself right but that was a hard thing to do because getting a calvin klein job was like a major dream right and i was quite enamored with calvin and the company they were the company at the time in in the early 80s and i thought i will really learn a lot from calvin and the company and then someday start my own but when this opportunity came about i couldn't refuse it so we went into business in 1985. there's a story that is now almost like fashion lore about this hangman advertisement this campaign that you put up um can you tell us a little bit about how that happened it was shortly after you set up the business with mr murjani that's right and you know it really puts you on the map i think yeah well it was very interesting because we were in our first year of business and we were talking about doing some sort of advertising and we didn't have a lot of money to do it and certainly we were so new he wasn't going to fund a big advertising campaign so i was thinking we should take these incredible young cool models out to the hamptons on the beach and photographed them in my cool casual clothes and i had it all sort of worked out in my mind that they would be on sand dunes and there would be barefoot and the shirts untucked and just you know this really cool vibe and marjani came into my office my studio one day and he said look i met this advertising guy by the name of george lois we need a meeting with him he's coming in this afternoon so i met george louis and george lewis big guy and he said so tell me about this company and i said well we're you know really going to compete against calvin klein ralph lauren perry ellis we sort of had this preppy casual cool line and i showed him i said i'd really like to do an advertising campaign with models on the beach and he said no no no no you can't do that and i said what what would you do he said give me 24 hours right so he came back in 24 hours with these big boards and he showed me pictures of calvin ralph perry ellis with x's drawn through them and said these guys are done now it's tommy he'll figure i said there's no way you can you can't do that i would never do that and he said okay well i've got another idea so we brought the other idea out and the other idea was comparing me to the other designers or comparing the other designers to me and you would have to fill in the blanks of their names so i said i i can't do that either that's you know obnoxious and i just can't i can't do that i want to go back to the photographing the models on the beach and he said i've got another board to show you so he pulled out another board and it was photographs of the armani campaign the john franco ferreira campaign the versace campaign the calvin campaign the ralph campaign with the names taken off the ads and this is when bruce weber was shooting a lot of these campaigns and they all look the same they all look the same he said you could put anyone's name on anyone and this is when calvin was using horses in his ad ads and ralph of course was polo by ralph lauren so there was there were so many similarities and i said no you're right about that and he said look it would take you millions of dollars and many many years to become known so if you're if you want your name to become known we should do something unique and do something out of the box i was shaking because i thought this this is going to ruin me because mohan rajani said no we have to do this would be a great idea to do and joel horowitz said no we should do it we should do it so i was torn finally i agreed to do the hangman campaign and when it launched i was really nervous and the next day was the first and only day i thought of leaving the business right because it caused such a stir with fashion people and people basically trashing me and becoming so incensed it was all over the news all of the newspapers all over the thousands who does he think he is he couldn't hold a candle to these guys they've been in business many years he didn't he never went to design school he doesn't know but people came into my store on columbus avenue they came into bloomingdale's macy's sacks and all the other stores and the clothes started selling so it worked it worked and i take my hat off to george lois and mohammed for i think first george for creating the campaign and mohan and joel for coercing me into doing it but ultimately i mean it was your decision and it was a pretty ballsy decision it was it was a frightening decision and and after all of the fashion flock decided they should bury me in the sand i decided that i had to just work very hard to create clothes that would be relevant so i really focused hard on every detail so the business starts to perform super well you've made this like pretty bold uh communications move you have all of 7th avenue watching you now some of them whose feathers are ruffled the retailers are interested because people are talking about your brand but again you run into some challenges right as every journey has challenges and you know mr morgani has his own financial problems exactly how how did how did that happen and what was the impact on your business well mr marijuana came to me one day and he said look i've got the license for coca-cola clothes and i said coca-cola clothes yeah what do you do red t-shirts i mean what did he talk he said no no no i mean i you know coca-cola clothes it's the biggest name in the world we could do a lot with it and his glory event built business was slowing down and my business was tiny but starting to grow he said i need you to design it for me so i said oh what am i gonna do i don't even have enough to design enough time in the day to do my own but it was paying him back for all he had done for me exactly so i i did i designed it and i decided to design it the way i would design cool casual sportswear but put the coca-cola label on it and it exploded it took off it was 250 million dollar business in 18 months wow it was it was enormous but like any quick trend it hit the wall and started falling down so he was running into financial problems from the glory of vanderbilt fall off and the coca-cola downfall while still funding my business so basically i had to find new financing and i i went to hong kong i went to banks and i went to wall street i talked to everybody no no no no no we don't finance fashion brands two members yeah i mean i goldman sachs merrill lynch everyone they took meetings but no so i had to make a trip to hong kong to go to the factories to see how i could possibly get my merchandise to ship to the stores and i walked into south ocean knitwear company and i met a man by the name of silas ciao now silas ciao had been shopping at my store on rodeo drive in beverly hills and bought clothes for himself and he said i like your clothes and i said great i need some i need some help financially because i don't have the money to pay for the sweaters i'm making with you and i have orders from the stores and i'm trying to find a partner or financing and i'm having a difficult time and he said let's go partners i go partners with you and i said on the spot on the spot so i said well i have a partner now marjani his name is marjani and we have to probably buy him out so he said put him on the phone put him on the phone and uh we bought rajani out silas became my backer joel horowitz became the ceo and partner and lawrence strohl who is silas's partner became the other partner so it was four of us but silas said you have to put your name into the company you are no longer going to own your name entirely i said wait wait my name is my only asset that's all i have yeah and i've worked really hard in building my name and he said look do you want to be a small part of an elephant or a large part of a pea i said maybe small part of a an elephant he said so put your name in we're going to invest we have a great team in place and we're going to grow the business the rest is history right we built it from 25 million to 50 million to 100 million to 500 million to a billion to 2 billion and just it's still growing today but without having silas chow lawrence stroll and joel horowitz that wouldn't have happened right they were a great team and we're still very close today we all had an amazing journey together and we were fortunate enough to expand it to europe early find a guy by the name of fred gearing who was a superstar ceo and although we had some bumps as a result of over distribution and too many logos and you know well let's talk about that for a minute because that's that's actually one of the things i want to talk about because i feel like it's really topical at the moment i mean one of the things you're reading now about you know other american fashion businesses that are you know publicly traded businesses your business eventually went public in 1992 i believe you know and as soon as a business goes public there's pressure for it to that's grow and you know at some point you tap into uh this you know fast-growing urban trend of oversized clothes and you know the business is growing and growing and growing but then again like things can change very quickly in fashion i mean this is why so many investors are you know reticent or scared of the fashion industry because of the risk trends come in and trends go out that's right um can you talk about you know the risks of overexposure especially in the context of businesses that are facing that today what happened first of all and what did you learn from that well i started the company with a collection designed for myself and i was over my hippie stage no more long hair no more long hair no more bell bottoms but i went back to my preppy roots because i i dressed you know we were pretty preppy growing up but i hated the preppy clothes because they were boring the fit was terrible they were stiff people who wore preppy clothes were not cool so i decided to redesign all the classics i took the button down shirt the chino pant the polo shirt all these things and redesigned everything to suit my needs which at the time were very casual but i wanted them to be cool and meaningful and have thought in the design so i added detail i washed them i made them oversized i created a couple of logos i really redesigned the classics that i thought would be relevant for young people of the time so there were preppy classics and they really took off but then in the early 90s all of these street kids started wearing my clothes and i'd done these athletic inspired jerseys with big logos because i wanted to become more sporty so i took authentic hockey jerseys football jerseys basketball jerseys and did patches and logos and really big bold statements and they sold like crazy and snoop dogg went on saturday night live wearing one of them in the next monday morning they sold out of the stores and so all of a sudden this thing started multiplying like crazy and we couldn't supply the demand we we were always selling out and we did the carpenter pants and we did uh lots of red white and blue t-shirts and sweatshirts and sweaters and it was like the trend of the early 90s for young people all over and really worn by a lot of hip-hop kids street kids skaters urban crowd yeah they are the urban crowd and we started designing into it and chasing the trend ourselves and i think that was a big mistake because trends come and go we know that and they become almost addictive if you're selling a lot of certain merchandise because you don't want to stop but i think that it was a great lesson and getting back to our preppy roots was was an incredible thing because it put us back to the dna of the brand and pushed us forward again how much how much of that pressure to grow do you think came from being public 100 because every quarter we had to show the markets that we were growing and we had such phenomenal growth in the beginning they expected that growth to continue and the minute it didn't continue they were off the brand and i think that's happening to maybe someone else right right yeah no i mean that's happening to business you know coach and michael kors and other businesses are facing the same thing you go really quickly for several years and then all of a sudden you know you're everywhere and all of a sudden people don't aren't as interested in you anymore so what you did was you you retrenched everything that's right you pulled everything back so talk about that that part of the story and why that was the right strategy okay uh early on silas and lawrence said let let's plant some seeds in europe so we opened a store in london and we hired fred gearing who had worked with silas and lawrence early on i mean earlier than that when they were the polo ralph lauren european licensees and fred took over the tommy hilfiger brand and he grew it steadily with a positioning a premium positioning was very thoughtful in where he opened stores it was very thoughtful in the distribution so we had this incredible philosophy and strategy going on in europe with great slow growth and one day when we were in a dilemma trying to figure out what the hell to do with the brand because the stores were marking it down it wasn't cool anymore abercrombie had come around polo's business was was taking a lot of our business back uh the gap was hot banana was hot and all of a sudden the landscape was changing so we said what do we what do we do and fred said why don't you look at what i'm doing in europe what he was doing in europe was he was celebrating the dna of the brand which was preppy all-american premium sportswear so we decided to take a page out of that book and apply it to the us business interesting that you'd have to take the lessons from europe and apply them to america but you know it really did seem to you know help reposition the whole brand it did yeah there came a certain point though when you know the business was still public and then again you decided to take it private right i feel like this is a whole business case in like every type of structure of potential structure you can have for a company so you went from being a small private company that went public faced some problems brought it back in started expanding in europe and then you know took the business private with apex yeah and that was a really critical part of the um story because it removed some of this public market pressure that's right and it was part of the the kind of european story as well let's let's fast forward to today now because you know the you know the business is in a very different position today it's now doing over you know six billion dollars in retail sales at value at retail um you have multiple collections at different tiers and you are now you know in a way kind of you know not actively involved with the business every single day but you're playing a very directional role to help this entire global business work how is your role in the business changed from the beginning when you were the scrappy entrepreneur to the to the position you're in today well we have incredible teams in the world we have great leadership and we have a very i would say solid structure so it allows me to be a visionary and give direction to the brand from a creative standpoint the clothes the collections the fashion shows the advertising the marketing the collaborations the stores the design of the stores the cool factor and i mean i couldn't be happier because it allows me the time to do this whereas before i was juggling a lot but now that we have pvh as a partner and or as the the owner and they handle really the the business end of the business it allows me to do i think what i'm probably best at anyway and in terms of the way you think about your the business as it goes forward i mean you've hit this 30-year milestone that's right what do you what do you hope for what do i hope as you as you think about the business going forward i mean it now seems like it's in a really solid place after lots of twists and turns and ups and downs and different partners and different market positioning what's what's your what's your vision now as the visionary well first of all i i'm always afraid of becoming too complacent and i'm always talking to our people about never being satisfied with today looking ahead and looking at how we could always evolve and become better at everything we do and never patting ourselves in the back saying oh we're we're great i like to say there are a lot of great people around a lot of competition there's a lot of competition we have to always strive to work harder to be better and as a perfectionist i find a lot of fault with a lot of things but you know those are the details that always need fine-tuning but going forward i would like to think that we would continue to grow and evolve as a light a global lifestyle brand with premium positioning which i think is a sweet spot in in the world of positioning expand our women's business our women's accessory business continue to elevate the brand continue to be innovative in advertising and marketing embrace social media and digital as we have continue to surprise the consumer with new ideas but always back it up with the best product you can possibly offer the best value one last question for you tommy which is really i mean you've talked about your career as being kind of the equivalent of a masters in business yeah and you know one of the things i talk to a lot of young designers and creatives about is understanding that fashion is a business do you do you think fashion designers need to understand business and and if so why if if not why not i mean how important is that business side i think it's important for designers to understand the business end of the business as much as possible because without having that understanding they will never understand the necessity of the business being healthy because you have to make clothes that actually sell and that become profitable and that become wearable otherwise why be in the business i mean we're not doing school projects we're making clothes that we want people to wear and at the same time in order to continue to do all the things we do the fashion shows the advertising the showrooms the stores and doing all of the fun things it takes a lot of funding and it takes a lot of profit so you need money to sustain your creativity we do yeah we do and i think that if you look at lvmh you look at a lot of the big players they're very financially driven to allow the creativity to exist okay well it was a pleasure hearing your story and learning from your twists and turns thank you and uh congratulations on your 30th anniversary thank you all right thank you

Channel: The Business of Fashion

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Keywords: insider, The Business of Fashion, Luxury, Tommy Hilfiger (Fashion Designer), fashion, Imran Amed, Fashion (Industry), Fashion, Luxury Fashion, business, Exclusive

Id: OsSxNE4IH-g

Length: 36min 12sec (2172 seconds)

Published: Sun Jun 21 2015