In 1971, Tommy Hilfiger used his life savings to open a clothing store in downtown Elmira. At the time, those savings amounted to a fairly tiny $150. Fast forward to 2020, and according to Celebrity Net Worth, those savings have grown into the rather more substantial figure of $400 million. Here’s how he did it.
The Early Years
In 1971, Hilfiger opened People’s Place. The store stocked the kind of hippie fashions made famous by the bands and artists of the day. "There was a revolution taking place and I wanted to be part of it," Hilfiger has recalled to Business of Fashion. "It was all about the musicians. Seeing them dressed in these incredible ways made me want to be part of that world."
And he was – for a while at least. And then in 1977, overexpansion and local recession got the better of him. People’s Place was forced to file for bankruptcy, putting Hilfiger out of a job and at something of a loose end. It didn’t take him long to figure out his next move. Having dabbled in design for a few years, he decided to make it his new job title, subsequently spending the next couple of years freelancing for various labels as a designer.
By 1979, he’d clearly had enough of being a footnote to someone else’s success: in 1979, he established his own company, Tommy Hill, swiftly followed by 20th Century Survival in 1981 and Click Point in 1982. Hilfiger enjoyed moderate success with his companies, but it was his meeting with businessman Mohan Murjani in 1985 that proved the biggest gamechanger in his career.
Murjani encouraged Hilfiger to pursue his long-held ambition of setting up a label under his own name, even putting up the funds needed to get the business off the ground.
When it came to deciding the type of clothing Tommy Hilfiger Corporation would focus on, there was only one look Hilfiger had in mind: preppy, Ivy League fashion with a twist. "(Wanting to create a label) came from wanting to create something that wasn't out there. I wanted this to be different,” he’s since recalled.
“I've always loved the prep school look. I wanted to take these familiar things and make them cool...with (the brand) I finally felt like I was doing work that felt natural, that felt good. The brand we were building was so true to who I am, it didn't feel like a struggle at all." After getting off to a bang with a huge, attention-grabbing publicity campaign, Hilfiger spent the next decade building his brand.
In 1992, he introduced his signature menswear collection; four years later, he began distributing women's clothing. By the end of the 1990s, he’d opened stores across the world, had published the first of what would be many books (All American: A Style Book), sponsored numerous musical events (including Britney Spears 1999 ...Baby One More Time Tour and Lenny Kravitz's 1999 Freedom tour), and become the designer de jour among both the fashionable preppy community and the hip-hop crowd.
After several years of success, Hilfiger came crashing down to earth with a bang in the early 2000s when his marriage broke down... and when his business almost did the same. After falling out of favor with the hip-hop set, sales at Tommy Hilfiger Corporation dropped by as much as 75%. The problem, it seemed, was that the brand had become just a little too popular for its own good.
"The large logos became ubiquitous," Hilfiger later said. "It got to the point urban kids didn't want to wear it and the preppy kids didn't want to wear it." Some major re-strategizing was obviously in order. In 2006, the company was sold for the princely sum of $1.6 billion to private equity firm Apax, which saw the potential for growth in Europe. The following year, Hilfiger pulled the reins on the brand’s ubiquity by signing an exclusive deal with Macy's to sell the best-selling Hilfiger lines only at their stores.
Since then, the Hilfiger brand hasn’t looked back. By 2014, global sales in retail had reached $6.7 billion and today, Tommy Hilfiger clothing lines are sold in over 2000 free-standing retail stores and thousands more department stores across 100 countries.
The brand has also diversified into other product lines, capitalizing on the fragrance market by partnering up with the like of Jennifer Lopez, Beyoncé Knowles, and Enrique Iglesias to release several huge selling celebrity scents.
Hilfiger began winning commercial success in the 1990s. However, it would take several years for the elite of the fashion world to begin embracing him as a credible designer. Since then, his work has been honored on numerous occasions, with some of his most notable tributes including:
- Council of Fashion Designers of America – Menswear Designer of the Year (1995)
- FiFi Awards – Men's Fragrance of the Year – Luxe, for the fragrance "Tommy" (1997)
- Parsons School of Design – Designer of the Year Award (1998)
- GQ Magazine – Designer of the Year for 'Men of the Year' issue (1998)
- FiFi Awards – Best Marketing Innovation of the Year, for Toiletries for Tommy's (American running series) (2000)
- GQ Germany – International Designer of the Year (2002)
- GQ Spain – Designer of the Year (2006)
- Hispanic Federation – Individual Achievement Award (2007)
- Women's Wear Daily – No. 1 Designer and No. 16 Brand in annual "100 List" (2008)
- Marie Claire Magazine – Lifetime Achievement Award (2009)
- Pratt Institute – Legends Award (2010)
- Council of Fashion Designers of America – Geoffrey Beene Lifetime Achievement Award (2012)
The Route to a $400 Million Net Worth
Tommy Hilfiger may have been written off by large swathes of the fashion elite in the 1990s. However, that hasn’t stopped him from building a multi-billion dollar, internationally recognized brand. Since the1970s, he’s grown into one of the most commercially successful designers of the last century.
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Written by Allen Lee
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