Since the existing markets of Calvin Klein and Tommy Hilfiger were saturated and frozen, a new mode has been adopted by both companies to expand through new markets. The new expansion would be via distribution channels as well new target populations. American spirit is such that both aesthetic as well as the business style of both companies occupy a core position in their lifestyle. This approach is the opposite from the traditional European luxury houses, which keep a control over manufacturing and distribution. This control is kept so as to highlight the European heritage and maximize true prestige. The two companies Calvin Klein and Tommy Hilfiger are flexible to compromise on control and aim at exclusively maximizing revenues.
[...] Licensing remains the most profitable segment for last five years while retail profit shows a negative trend and wholesale profit remains constant. Tommy Hilfiger- Retail Strategy 1994 Opened outlets and specialty stores in the US retail stores US: Opened 28 specialty stores; Developed a line of distinctive products exclusively for specialty stores; Invested 35% of the capital expenditure in specialty retail business & 30% in selectively updating in-store shops 1999 Europe: Opened the 1st company-owned retail store retail stores US: Closed 19 specialty stores; Decreased in-store shops to reduce over-distribution; Europe: 26 retail stores (11 outlets & 15 specialty stores); 9 showrooms; Continued to expand retail business retail stores US: Opened 5 specialty stores; Closed 18 specialty stores; Europe: 20 retail stores (11 specialty stores & 9 outlets); top 10 customers represent 29% of total revenue; retail stores US: Closed 1 specialty store; Opened 12 outlets; Europe: 38 retail stores (16 outlets & 22 specialty stores); Initial foray of e-commerce; Tommy Hilfiger- Retail Stores As of March As of March Outlet Specialty Total Outlet Specialty Total Canada Europe Total US Conclusion: Tommy Hilfiger's outlets and specialty stores are targeted at the North America and Europe markets. [...]
[...] US market remains the largest market for TH and the emphasis is on outlets. Outside the US TH puts its emphasis on both outlets and specialties. [...]
[...] Hifilger Tommy Hilfiger Strategy • Consolidate the masstige market and more towards the prestige --Maintaining the wholesale volume by global strategy ( EU US) Steps to upscale apparel segment by H.Hilfiger and Karl Lagerfeld Global Expansion EU market Japan & South Korea Australia US market Continents EU 2002-2003 2003-2004 • Tommy Hilfiger Europe acquisition • Karl Lagerfeld acquisition • A multi-dimensional expansion • Overall volume reduction US • Reductive level of consumer spending • New competitors • Loss of menswear market Global • Far East, Asia, Australia, Canada • Reconstruction of wholesale business, tests on various retail formats • Improving operational efficiency • Introduction of Karl Lagerfeld • E-Commerce What Annual Reports Reveal 2004-2005 2002-2003 –Still focus on different strategies according to sectors, such as womenswear sector or menswear secor. [...]
[...] through new markets, via distribution as well new target populations. American Americanspirit spiritisiscore coreto tothe thelifestyle lifestyleaesthetic aestheticas aswell wellas asbusiness businessstyle style ofof both companies. [...]
[...] The company uses more in-house distribution than its competitors and brings its products to new geographic markets by signing licensing agreements. Tommy Hilfiger- Brands Tommy Hilfiger Brand: 25-55 25-55 FLAG CREST 15-22 TOMMY JEANS Department Stores & Specialty Stores 20-40 29-45 SPORT H HILFIGER Company owned Specialty Stores Karl Lagerfeld: 29-45 25-45 Lagerfeld Men's: Specialty Stores Europe & Asia KL Lagerfeld: Distributed only in Asia Lagerfeld Gallery Boutique Specialty Stores Upscale Department Stores Lagerfeld Tommy Hilfiger- Accessories Watches Eyewear Belts Fragrance Wallets Apparel Shoes Hats Socks Luggage Home Ties Tommy Hilfiger- Segments Wholesaling: design & sourcing of Men's sportswear & jeanswear, women's casualwear & jeanswear and childrenswear Retailing: the operations of the Company's outlet and specialty stores Licensing: operations of licensing the Company's trademarks for specified products in specified geographic areas & operations of the Company's Far East buying offices Tommy Hilfiger- Segments Wholesale Retail Licensing Total Fiscal year ended March Total segment revenue Segment profits Segment profit % $ $ $ $ $ $ $ $ Fiscal year ended March Total segment revenue Segment profits Segment profit % $ $ Fiscal year ended March Total segment revenue Segment profits Segment profit % $ $ Tommy Hilfiger- Segments Wholesale Retail Licensing Total Fiscal year ended March Total segment revenue Segment profits Segment profit % $ $ $ $ Fiscal year ended March Total segment revenue Segment profits Segment profit % $ $ $ $ Conclusion: Wholesale is absolutely the largest segment in Tommy Hilfiger, followed by retail and licensing. [...]
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