Blog: Leonie BarrieMacy's hopes for Hilfiger

Leonie Barrie | 10 September 2008

Less than a year after it agreed an exclusive strategic alliance with Macy's, Tommy Hilfiger has now rolled out the sportswear line that the department store retailer will sell exclusively in the US.

Both companies see the deal as a win-win situation, with Macy's hoping the well-known brand will draw customers into its stores and set it apart from its rivals, and Tommy Hilfiger relishing the chance to focus its wholesale team on one nationwide account and garner increased exposure in the retailer's 800 stores.

Like many department stores, Macy's is struggling to gain momentum as consumers cut back on apparel and other discretionary items amid rising food and fuel prices and the ongoing housing slump.

First-half profits plummeted as the company bore the brunt of charges of consolidating its three divisions under a reorganisation plan announced in February, while first-half same-store sales fell 2.2%.

But Macy's says it continues to out-perform "most of our major competitors in same-store sales" – and is clearly hoping that exclusive lines from high-profile designers like Hilfiger (deals are already in place with the likes of Elie Tahari and Oscar de la Renta) will give it the boost it needs.

It's also a touch ironic that its possible saviour, Tommy Hilfier, was itself languishing in the doldrums not so long ago, after struggling to realign itself into more sophisticated, pricier markets. Now, though, it's setting itself up for global expansion after posting a record 23.9% hike in full year earnings in June on a 14.4% jump in sales. What a difference three years make.

US: Tommy Hilfiger launches sportswear at Macy’s


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