Blog: Wal-Mart to accessorise with Hilfiger?
Leonie Barrie | 28 September 2005
Is Wal-Mart Stores really planning to buy Tommy Hilfiger Corp? That’s the rumour doing the rounds this week, with unnamed financial and industry sources suggesting the world’s largest retailer could start due diligence on Hilfiger any day now. There are certainly signs that Wal-Mart is taking a more contemporary direction in its clothing, including presenting its George apparel brand in a more upscale setting and taking an eight-page ad insert in the September issue of Vogue, so an acquisition could well be a logical progression.
A tie-up with Tommy Hilfiger would give Wal-Mart an entry to an upscale but younger consumer base, and as CEO H Lee Scott Jr has said, many customers shop for basic goods like food and paper towels at Wal-Mart but bypass other departments such as apparel. Appealing to these shoppers with more trendy and exclusive lines would make a lot of sense, and it’s likely Wal-Mart is hoping to replicate the success of Target which managed to attract higher-end customers with new lines from designers like Isaac Mizrahi.
There may well be other synergies to exploit too; after all, the two names are both looking a bit faded just now. Tommy Hilfiger has been seeking a buyer for a while now, and Wal-Mart’s sales have flagged in recent months. Turning to new markets may well be just what they each need to boost their fortunes.
But it could also be the worst thing to happen – particularly for Tommy Hilfiger which has embarked on its own makeover (including purchasing the Karl Lagerfeld brand) in an attempt to recapture some of its cachet it had the heady days of the 1990s. Aligning itself with the Wal-Mart could make it impossible for Hilfiger to pick up the pieces.
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