Tommy Hilfiger

As Tommy Hilfiger’s star faded in America, it rose in Europe, which gave the brand a second chance back in America, reports Eric Wilson in the New York Times (5/16/10). Not long ago, things had gotten so bad for the Hilfiger label that "the company seriously considered selling his clothes at Walmart." When Macy’s placed orders, it was for "stretch cotton poplin dress shirts … because that’s what was selling from other designers." But at the same time, Hilfiger’s licensing business, headed by Fred Gehring (formerly of Ralph Lauren) began taking off in Europe.

This gave Hilfiger the proverbial second chance at a first impression, returning the label to its original image — "bright, preppy clothes and premium prices, but none of the hype." The fashions were "sold in more than 4,000 small stores from Spain to Germany" and "grew to more than $1 billion at the same time sales in the United States were falling." However, Fred Gehring remained worried that "the designer’s problems in America would eventually cross over to Europe," and engineered taking the company private.

Fred’s next move was "a deal with Macy’s to carry the line exclusively in exchange for more desirable placement in its stores and help with marketing." Macy’s now says Hilfiger is one of its strongest-performing lines. Hilfiger has since "opened a new flagship store on Fifth Avenue … And the business is now highly profitable, earning about $300 million annually, largely thanks to the European operation." It was acquired by Phillips-Van Heusen about two weeks ago for $3 billion, "nearly seven times what Phillips-Van Heusen paid for Calvin Klein in 2003."