Hong Kong-based fashion company Tommy Hilfiger Corp is preparing to auction itself off, according to sources cited by The Wall Street Journal.

The company is said to have decided on the course of action after receiving a buyout offer a few months ago.

Hilfiger, which has a $1.5 billion market capitalisation and is debt free, will consider bids from private-equity as well as trade buyers.

The business has been reshuffling its operations recently, and has shut most of its specialty stores and reduced wholesale.

The Journal names apparel majors Jones Apparel Group Inc and Liz Claiborne Inc as possible suitors.