Tommy Hilfiger Corporation is to end its decade-long association with Jockey International, and will operate its men's underwear business as an in-house unit when the Jockey licensing agreement expires in May 2003.

In a statement today the company said the business will be overseen by Michael Spillane, who will add responsibility for men's underwear to his current position as president of the Tommy Hilfiger children's division. Mr Spillane formerly headed up the Tommy Hilfiger men's underwear business at Jockey and joined the company in 2001.

Joel Horowitz, chief executive officer of Tommy Hilfiger Corporation, said that as well as realising the direct financial benefits of "operating the business ourselves, it also makes sense from a distribution standpoint, since we have an identical department store customer base."

Under the terms of the agreement, which has been in place since 1993, the license with Jockey will expire on 31 May 2003. The timing of contract expiration will allow ample time for an orderly transition of the business.

The change is expected to have a modest positive impact on Tommy Hilfiger Corporation's revenue and earnings for the fiscal year ending 31 March 2004, as it receives the direct contribution of underwear sales and profits in place of royalty income and advertising contributions under the license.

Edward Emma, president, Jockey International Inc, commented: "Although the Tommy Hilfiger men's underwear business has grown substantially since Jockey became the licensee in 1993, Jockey has determined that it will focus its resources and expertise in men's underwear on its own brands."