Tommy Hilfiger eyeing $3bn European float?

UK: Tommy Hilfiger eyeing $3bn European float?

By just-style.com | 17 October 2007

Upmarket US fashion label Tommy Hilfiger is examining the possibility of a float on the European markets in a deal that could see the company valued at up to EUR3bn (US$4.2bn), media reports suggested today (17 October).

According to the Daily Telegraph, private equity firm Apax Partners, which owns around 80% of Tommy Hilfiger, has appointed investment bank Credit Suisse Group Inc to study a listing of the business, possibly in London.

The latest speculation follows rumours earlier this month that Apax Partners had invited several investment banks to pitch for the business.

Apax bought Tommy Hilfiger for $1.6bn in early 2006 after sales slipped on lower orders from US department stores, and subsequently embarked on a sweeping reorganisation of the business.

Around 250 jobs were axed as the brand's corporate headquarters were relocated to Amsterdam and the business was divided into four independently managed business units in the US, Canada, Europe and the Far East.

Other shake-ups included discontinuing the H Hilfiger vertical retailing business and its children's wear collection, and the Karl Lagerfeld contemporary sportswear line, which was based in New York and launched at Neiman Marcus and Bergdorf Goodman.

And in February this year, a wholly-owned subsidiary of global sourcing giant Li & Fung bought Tommy Hilfiger's sourcing operations for US$247.8m.

The Tommy Hilfiger brand has been struggling to shore up sales after being dropped by the rap fans who made up its core customers in the 1990s. Despite attempts to move into more sophisticated, pricier markets, demand has continued to be lacklustre.

Although neither Apax nor Tommy Hilfiger have commented on the rumours, a listing is believed to be the obvious exit route for the business.

Sectors: Apparel, Finance, Retail

Companies: Hilfiger, Karl Lagerfeld, Neiman Marcus