Phillips-Van Heusen, whose brands include Kenneth Cole, BCBG, and Calvin Klein, will add Tommy Hilfiger to its stable starting today. Phillips-Van Heusen will buy Hilfiger for $3 billion in cash and stock. The New York Times has the story:
With the acquisition, Phillips-Van Heusen…will seek to take advantage of Tommy Hilfiger’s strong European distribution channels for its own products. Despite Tommy Hilfiger’s reputation as a quintessentially American clothier, two-thirds of the company’s business is based in Europe.
The deal is only the latest to emerge from an active market for mergers and acquisitions, as corporate buyers feel more confident pursuing long-desired targets. The sale of Tommy Hilfiger would be a lucrative exit for its current owner, the British private equity firm Apax Partners. Apax has twice sought an initial public offering for the clothier, and Tommy Hilfiger’s chief executive, Fred Gehring, told Reuters in September that an I.P.O. was the most likely next step for the company.
(After experiencing a downturn in sales, Hilfiger has) sought to reclaim its preppy heritage, slimming down its sizes and returning to an image of young American aristocrats at play. That has rejuvenated the company’s fortunes, first in Europe and then elsewhere.
Tommy Hilfiger himself hasn’t managed the company in years, instead spending his time on activities like hitting Axl Rose. He remains a primary designer and public face for the company.