November 30, 2005 Amelia Eveland Briskey Sivakumar Murugesan

Building Customer Relationships Bill Oksana

FOUNDATIONS OF AN EMPIRE
The story of Tommy Hilfiger Corporation, THC, begins in the 1960s with its name sake, Thomas J. Hilfiger and a small string of stores called The Peoples Place in upstate New York (site). The stores were short lived and went bankrupt in 1976. After the failed venture in upstate New York, Tommy Hilfiger moved to New York City and founded Tommy Hilfiger Incorporated with the backing of Mohan Murjani, the licensee of Gloria Vanderbilt Jeans. Murjani went bankrupt, but with the help of two partners, Hilfiger was able to buy back his company. Tommy Hilfiger, Inc. went public one year later.

Company leaders

Thomas J. Hilfiger
Thomas J. Hilfiger was born and raised in Elmira, New York (Infomat, 2005). He was the second of nine children in an Irish Catholic family (Infomat, 2005). Having no formal training, Hilfiger is self-taught (Tommy Hilfiger Press Release, 2003). After the failure of his first venture, Hilfiger moved with his wife, Susie, to New York where he was offered jobs with designers like Calvin Klein and Perry Ellis (Infomat, 2005). Hilfiger turned down all job offers, wanting to go it alone. He introduced his first signature collection in 1984 (Tommy Hilfiger Press Release, 2003). It was then that he founded what would become Tommy Hilfiger Corporation.

Hilfiger now resides in Greenwich, Connecticut with his four children and ex-wife (Infomat, 2005). Hilfiger has received numerous awards by the industry for his fashion design, which has not escaped his notice. Early on in his career, Hilfiger ran and ad campaign which proclaimed that he, along with Perry Ellis, Ralph Lauren, and Calvin Klein, are the 4 Great American Designers for Men (Infomat, 2005). Hilfiger has been honored by the Parsons School of Design, GQ magazine, and VH1 among others (Tommy Hilfiger Press Release, 2003) Thomas J. Hilfiger now holds the position of Principle designer for the Tommy Hilfiger Corporation (Tommy Hilfiger Corporation 2005 Annual Report, 2005). He has also been Honorary Chairman of the Board since 1994 (Tommy Hilfiger: Investor Relations, 2005). He was President of Tommy Hilfiger, Inc. from 1982 to 1989 (Tommy Hilfiger: Investor Relations, 2005). In his current role, Hilfiger acts as the figurehead for the company. In the past year Hilfiger stared in the CBS reality-television show, The Cut (CBS.com, n.d.). The show was fashioned in the same manor as Donald Trumps show The Apprentice. Young designers competed to win a job designing for the Tommy Hilfiger Corporation (CBS.com, n.d.). Thomas Hilfiger made also appearances on his daughter, Allys reality-television show for MTV called Rich Girls in 2003 (MTV.com, n.d.).

David F. Dyer
David F. Dyer joined the company as Chief Executive Officer in August 2003 (Tommy Hilfiger: Investor Relations, 2005). Prior to this, Dryer gained extensive experience in the apparel industry.

Dryer began his career working 17 years for Federated Department Stores, Inc., which owns Macys and Bloomingdales (PBS CEO Exchange, n.d.). Dyer worked several stints at Lands End, Inc., eventually serving as President and Chief Executive Officer. After Lands End, Inc.s acquisition by Sears, Roebuck and & Co., Dyer served as Executive Vice President and General Manger of the Customer Direct business until joining Tommy Hilfiger Corporation (Tommy Hilfiger: Investor Relations, 2005). Dyer was educated at Vanderbilt University, earning a Bachelor of Engineering in Computer Science

OPERATING AREAS
THC operates in four reportable segments: The U.S. and international wholesale segments both consist of mens and womens active wear, junior and childrens wear that are designed under Tommy Hilfiger trademarks. The retail segment consists of 200 outlets and specialty stores in the U.S., Canada, and Europe which offer clothing designed and sourced under Tommy Hilfiger trademarks. Licensee segment includes operations related to the licensing of Tommy Hilfiger trademarks for specified products in specific geographic areas. THC licenses apparel, accessories, footwear, fragrances, and home products.

BRANDS
Recent changes in consumer behavior have shifted from prescriptive to selfcreative styles, and Tommy designers have not responded well (New York Magazine, 2000). In the segments where the company operates, apparel with logos has fallen out of favor. Consumers have moved away from this structured approach toward wanting more freedom in what they wear. They do not desire to be connected as strongly to a brand label. As Belk describes, consumers view their possessions as an extension of self (Belk, R.W., 1988). The move toward selfcreative styles may reflect that consumers are shying from brand identification and wanting to exude a style that is unique and reflects their own personality, rather than an image created by a brand. Since 2000, THC lost its brand identity focus; collections were not targeted at specific segments and they were not designing for the newest urban lifestyle trends. For example, they targeted teenagers but the styles turned out to be attractive to parents brand, being the clothes that are bought for the kids by parents. In attempt to rescue the brand appeal, its Spirited All American style, THC made some drastic brand changes: Clarify brand structure by targeting each brand to a specific demographic area. Avoid being logo-centric. Complement brand structure by adding a new upscale brand through the acquisition of the Karl Lagerfeld brand.

Tommy Hilfiger Brand

The Tommy Hilfiger Brand is divided into three collections: H Hilfiger, Tommy Hilfiger, and Tommy. Each collection contains several lines. The H Hilfiger and Tommy Hilfiger collections overlap in their target markets. The Tommy collection is targeted toward a younger market segment. The Tommy Hilfiger brand is divided into the following collections:

H Hilfiger
The mens and womens lines of spring 2004 marked the launch of the H Hilfiger brand (Annual Report, 2005). The new line is in response to consumer seeking a higher level of sophistication in their style. The market is defined as upper end apparel and offers a dressier look that can be worn to the office (Annual Report, 2004). The company made a $10 million investment in marketing for the brand, including an advertising campaign that features rock star David Bowie and his supermodel wife Iman (Annual Report, 2004). The H Hilfiger collection was originally launched exclusively in 120 Federated Department Stores, but was pulled at the end of summer 2005 (Greenberg, J., 2005). In reviewing our brand strategy, it became evident that the H Hilfiger line was not appropriately positioned within the department store channel, said Dyer and Hilfiger in THCs Annual Report (2005). The company is repositioning H Hilfiger as a specialty store concept (Annual Report, 2005). There are plans to open five to ten specialty stores in the second half of 2006 (Annual Report, 2005). Eventually, the company seeks to have 200 stores worldwide (Greenberg, J., 2005).

Tommy Hilfiger
The signature line of Tommy Hilfiger is identified at the Tommy Flag Hilfiger label and the Tommy Crest Hilfiger label. The Tommy Hilfiger Corporation identifies the target market for their Flag and Crest labels as those 25-55 years old. The Flag collection consists of casual sportswear for men and women that emphasize classic with a twist style. The Crest label consists of tailored clothing and dress furnishing, as well as dress casual sportswear for men. The company defines the market as better apparel segment. The Flag label is distributed worldwide in department and specialty stores, while the Crest label is distributed in the United States and Canada only.

Tommy
The Tommy brand is a younger edgier line targeted at the 15-22 year age group. The clothes are designed with a youthful fit. The Tommy logo has been used on young mens jeans, junior jeans, and graphic tees, but as of fall 2005 the company closed the Young Mens Jeans division (Annual Report, 2005). The decision reflects the stronger market demand for more sophisticated premium denim washes rather than promotional commodity jeans (Annual Report, 2005).

Karl Lagerfeld Brand In 2004 THC added the Karl Lagerfeld label to its Tommy brand collections. This acquisition is an important first step in our long

term strategy, said the CEO of Tommy Hilfiger Corporation, David Dyer (Agenda Inc., n.d.). According to the contract, Karl Lagerfeld will create fashion lines for the Karl Lagerfeld brand for the next five years, with the option to extend the contract for an additional two years (Fashion monitor Toronto, n.d.). The limited time frame of the contract is due to the advanced age of the designer. Karl Lagerfeld is one of the most recognizable designers in the world of fashion. His appearance, with steadfast white ponytail, dark glasses, and black & white wardrobe, is instantly recognizable haute couture fashion industry. Now in his seventies, Lagerfeld creates eight collections a year, for Channel, Fendi, and his own trademark, yet still does not consider retiring (Business week). The agreement poses to be beneficial for both sides. Karl Lagerfeld brings an edgier fashion look to the Tommy Hilfiger Corporation. It also raised the level of the companys identity within the fashion community due to the respect of Karl Lagerfeld as a fashion icon. The agreement benefits Karl Lagerfeld by helping to gain a wider distribution of his trademarks using Tommys global retail structure worldwide (Fashion monitor Toronto). By entering in this acquisition, THC is trying to catch up on the latest trend in consumer apparel industry: a demand for more upscale, fashionable clothing. Despite this, it is still questionable whether this acquisition will help increase sales. Karl Lagerfeld is more appealing to women, but in the past it has been in the mens clothing segments where the Tommy brand has struggled. A strategic step toward improving its figures in the mens clothing segments was hiring one of Armani executives, Rodney Hutton to manage the new Karl Lagerfeld line. The Karl Lagerfeld brand combines modern styling and elegance for customers who desire luxury and exclusivity. It consists of following labels:

The Lagerfeld Gallery is a womens ready-to-wear collection targeted toward 29-45 year old customers (Tommy Hilfiger Corporation 2004 Annual Report). It is positioned within designer apparel market and is sold in boutique specialty stores and upscale department stores worldwide.

The Lagerfeld collection is comprised of licensed, contemporary lines for men and women. The focus is on fashionable, trend driven apparel. Lagerfeld mens line is positioned within the designer apparel market and is sold in specialty stores in Europe and Asia. The Lagerfeld womens collection is distributed only in Asia (Tommy Hilfiger Corporation 2004 Annual Report.).

CHALLENGES
Tommy Hilfiger Corporation has had to allocate energy toward facing several challenges during the last two years. The corporations Board of Directors has taken on three new members as well as a new President and CEO. According to company founder, Thomas J. Hilfiger, the addition of the new CEO has been useful to himself as well as the organization. Over the last few years the boundaries between our brands had begun to blur, confusing the customer and diluting the value of our individual trademarks (Annual Report, 2004) Mr. Hilfiger refers specifically to the new CEO in the companys annual report as he says, his focus on setting strategy and improving the operational side of our business has enabled me to keep my attention on design and marketing, allowing Hilfiger to focus on redefine the boundaries of the companys brands (Annual Report, 2004).

The most significant recent challenges to the company have been:

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THC was required by the U.S. Securities and Exchange Commission, SEC, to resubmit their 10K financial statements from 2002 to the present due to tax and lease accounting issues (Tommy Hilfiger Corporation Files Annual Report, 2005).

The company has put itself on the auction block and is being considered by multiple suitors. THC is attempting to create value and restore its fortunes (Schonberger, 2005). This is a strategy that is being observed by many financial experts, especially since Wal-Mart has been identified as a potential suitor. The company reports that a potential buyer will be announced in December 2005.

Wholesale business in the U.S. is suffering from distribution chain inefficiencies. The company has been leaning out its operation by reducing staff (Annual Report, 2005).

The brand is diluted in the U.S. and specific product lines are blurred. This is identified as the primary reason that the companys retail and wholesale profits have dropped considerably (Annual Report, 2004). THC has recently eliminated low performing wholesale and retail business units.

The company has been plagued over the years with rumors of racism by the companys founder, Thomas J. Hilfiger, being spread through the media and over the Internet. The direct financial impact of this has not been reported. The company has tried to mitigate the damage by including a Rumors page on its web site with links to other sources in an effort to confirm that the rumors are false (Tommy Hilfiger: Rumors, 2005). One prolific rumor stated that Hilfiger made racist remarks while a guest of The Oprah Winfrey Show. Responding to this, the Rumor page of

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the Tommy website quotes Oprah as saying, The rumor claims that clothing designer Tommy Hilfiger came on this show and made racist remarks, and that I then kicked him out. I just want to say that it is not true because it just never happened" (Tommy Hilfiger: Rumors, 2005).

FINANCIAL PICTURE
The financial performance of Tommy Hilfiger Corporation over the past few years has been relatively stable when the international and domestic businesses are considered together. The company experienced significant losses in the U.S. that were offset by significant revenue increases in European markets and by restructuring efforts (Annual Report, 2005). The company has benefited by hedging funds in foreign currency markets. THC has also profited by moving corporate headquarters to different locations to reduce tax exposure, and using intercompany transactions to shift tax liabilities. However, as a result of these actions, THC was investigated by the U.S. Attorneys Office for the way commissions were handled pertaining to taxes for the companys Hong Kong business(Annual report, 2004). Subsequent to the investigation, other changes were made in THCs accounting practices, and these were included in the recently released restated 10K reports for 2002 through 2005. Although the companys accounting practices were found to be incorrect, the company eluded criminal prosecution. However, they did have to pay over $18 Million in taxes and interest for these years (Annual Report, 2005). An analysis of performance ratios was done with 2004 financial statements THC and competitor Polo Ralph Lauren to identify significant differences. The following summary provides a comparison: 12

THCs 2005 profitability was about half of Polos, where as in 2004 THCs profitability was 30% higher than Polo. This change is significant and is attributed to losses by the U.S. division of THC and adjustments to the companys accounting practices. Earnings per share for each company were also weak. Polo pays regular dividends to shareholders, while Tommy does not.

THCs liquidity is slightly better. THCs solvency is better.

The data shows that THC is currently not as strong as Polo in this industry. Its lack of profitability and the fact it does not pay dividends to its shareholders suggest that unless an investor was willing to buy and hold shares in hopes of the company becoming more profitable, THC would not be a favored investment. When the company announced that it was up for sale, its stock prices increased, but this may have artificially increased the stocks market value. Once a purchaser is finalized the stock price may drop, resulting in a loss to investors. Company executives for Tommy Hilfiger predict the company will generate revenues for 2006 similar to net revenues as 2005. They expect a continued decline in their U.S. market that is offset by increases in European markets (Annual Report, 2005).

BRAND COMMUNITY MODEL AND STRUCTURE

Tommy Hilfiger Corporation operates in an environment where perception rules over the tangible. Their product itself does not provide any more practical benefit to the wearer than some other garment; it is the subjective and intangible feelings evoked by wearing the article that provide the lasting relational experience.

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THC strives to grow this experience for its consumers because it is the strongest mechanism by which customers are acquired and retained, which ultimately increases customer equity. The company tries to separate itself from competitors through its designs, attempting to stay on the front edge of the newest styles, yet remain within bounds beyond which the style would be acceptable by only the earliest adopters. This is a dangerous game at times too far in front of the edge and there is an increased risk of scaring away too many of those who are fashion-conscious but conservative too far behind and the product loses differentiation and thus its appeal for the fashionconscious audience in general. Regardless what the style, all offerings result in an adjustment of brand perceptions for consumers and non-consumers. THC has instituted many methods in an attempt to build a devoted community for its brand. These efforts are visible to consumers and are aimed specifically at increasing their awareness of all that the product offers its personality. This community is being developed by the company through activities that invite the customer to experience other connections to the product, company, brand, and other customers. One of these methods is aimed at their targeted teen group through an exclusive club membership opportunity. The company attempts to appeal to its adult markets through philanthropic activities to improve its company image, and a special line of apparel is aimed specifically at hip-hop youth. The paragraphs below describe many of the specific methods THC uses to build its brand community.

Club Tommy
Projecting its motto of Keep it Fresh, Alive, and On Brand, CLUB Tommy (Tommy.com Web site, 2005) has been a useful avenue for the company to express

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and cultivate its image with teen customers willing to embrace this kind of relationship (Keller,2002.). This channel is used to inform members of its philanthropic activities, fashion shows, events such as parties and celebrity appearances, company sponsorship of sporting activities, and other activities that appeal to CLUB Tommy audience. The Web site offers experiential opportunities for Club Tommy members including advanced views of new products, streaming fashion show videos, screensaver downloads, and rich media games. Members also have preferential access to catalogues, emerging new artist songs, and backstage coverage. CLUB Tommy members are regularly sent newsletters and emails promoting invitations to parties and previews of new Tommy brand fashions. CLUB Tommy hopes to encourage its members to be ambassadors for the brand. Participation or exposure to these activities help customers become aware of all facets of the brand community.

Tommy Foundation
The Tommy Foundation directs the philanthropic activities of the company in the U.S. The objective of the foundation is to support many health-related organizations and various cultural programs that impact a diverse population of American youth. The foundation espouses that education is the cornerstone for today's youth and will be a key factor for America to survive and remain competitive in the global marketplace (Annual Report, 2005). The foundation believes that placing a strong emphasis on exposing youth to quality education and career-related opportunities will help achieve this objective.

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The Tommy Foundation worked with the Boys club of New York to send 25 scholar-athletes and staff members to Cuba for a two-week educational and cultural tour by making a seventy thousand dollar contribution (Cuba News, 2001). The Foundation claimed that through this contribution its aim was to enrich the lives of youth, while implanting a sense of purpose by building self-esteem and strengthening the leadership skills of the youths selected to participate in the program. The foundation has contributed approximately three million dollars for a variety of major renovations including the Fresh Air Fund's campsite and Camp Tommy (Cuba News, 2001). In addition, the foundation has made a five million dollar commitment to the Washington, D.C. Martin Luther King, Jr. National Memorial Project Foundation fund to build a memorial for Dr. King. These philanthropic activities help the customer experience the brand through the company connection to good works.

The Hip-Hop culture

The Hip-Hop culture, which was thought of as an urban phenomenon among the 12 to 34 year-old demographic in the 1990s has now crossed borders from the streets of New York City to the fields of Iowa (What is Cool?, 1998). THC has actively pursued this audience to capture this entire community. Identified as "urban marketing" by THC, this effort now expands across the entire U.S. after a successful campaign on the East Coast. The primary geographic area for this revenue stream is not metro areas like New York City, Chicago, or Los Angeles; it is urban Middle America, allowing THC to cultivate another large segment of American buyers ( What is Cool?, 1998). Although the nation is separated into diverse geographic areas, the hip hop culture is a unifying force for youth across the country and the company has attempted to capitalize on this to extend its reach. THC is using the product and its 16

brand to augment an existing connection customers have to each other, embedding the brand experience into the culture that already exists.

SWOT ANALYSIS
Strength
The strong brand reputation among baby boomers and certain ethnic populations, like that of the Hispanic and Black communities, have crated brand value that translates into profit for the company. The strong distribution system throughout the world has made it comparatively easier for the company to deploy into new markets. This is illustrated by from the companys move into the competitive European markets, which are facilitated by the companys experienced upper management. Networks, contacts, knowledge, and experience in the industry possessed by THCs top management, like Thomas J. Hilfiger and David F. Dyer, are assets to both the companys operation and reputation. The company also enjoys higher production flexibility because of its strong base in the south-east Asian countries where product production transpires. This was an absolute competitive advantage for the company for company until it was found and exploited by its competitors, which is still a potential advantage to the company. The company was accepted as a creative and an innovator in the 1990s becoming a top trend setter for the industry. Though the company is facing more competition, has lost a significant market share to its rivals, and its reputation as a style trend setter has been diminished, it still influences the trends in the industry to a certain degree. The company was one of the first to promote the Hip-Hop style and has a strong

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background for it. This has been beneficial for the company as the culture has started to spread across the country, carrying Tommy along the way.

Weakness
The company has positioned itself as a true American company with its red, white and blue logo, is now expanding globally. The logo, which is instantly recognizable as a symbol of American culture, may hinder the companys ability to grow exponentially in the global market. Failure to adapt to the new cultures it enters may hinder the acceptance of the brand and the growth of the company. THC has not previously been flexible in adapting the various regional cultures it operates in, rather has taken an ethnocentric approach by trying to implement its own culture into new markets. Another issue that weakened the brands value in the eyes consumers is over licensing of the Tommy brand. The extensive licensing has resulted in the Tommy brand transforming from a premium brand supplying premium goods into a discounted brand selling commodities. These two factors reduced the brand image and brand value the company had among its customers. The resulting effect is consumers switching brands. In the recent past the company has weakened its position and gotten itself into trouble through its accounting practices. An investigation by the SEC resulted in the company paying the government and additional $18 million for taxes and interest accrued. The company also, has not paid dividends to its stockholders in the recent past.

Opportunities

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When analyzing THC opportunities and threats we are looking on the external factors that Influence Companys positioning in the market. These factors are not under companys control; at times they come unexpectedly and cause adjustments in long term strategy to adapt to new conditions. The apparel market growth in the Asia and Eastern Europe and diminishing trade restrictions in China it could tremendous opportunities for THC to expand in these areas. THC already licensees in Asia and that can pave the way into further exploring Asian and Easter European countries. Diversifying the target market of THC by acquiring the new Karl Lagerfeld brand was a good opportunity, but with the growing competition in apparel industry it becomes more difficult to find a customer for a new brand, even one which is inspired by fashion icon. The Karl Lagerfeld brand is a window of opportunity if THC manages to bring that potential into the light. Strengthening relationships with the customers will contribute to keeping the brand popular. In the saturated, highly competitive apparel industry, there are few constraints to keep customers from switching between brands, service and positive experience by shopping become and important avenue to retain loyal customers. A companys skill in retaining loyal customers is crucial. The new THC concept that includes opening new specialty stores designed in a way to create Tommys authentic American atmosphere, is dedicated to finding its way into heart of the customer and gaining their loyalty (Greenberg, J., 2005). The growing popularity of online shopping is another opportunity to increase the sales and reach those customers that have limited access to Tommys trademarks. THC has the opportunity to customize and individualized their product via its website. There is the opportunity to, for instance, give shoppers the ability to

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customize shoes, help customers to choose outfits that fit to their particular body measurements, or give trend and color advice. All of which would add value to the customers shopping experience. The companys decision to put itself on the auction block may be an opportunity for growth. It may inspire a renewal for the company. Much of what will

result from who buys the company.

Threats
Counterfeiting has always been a dark side of luxury and fashion industry. International Chamber of commerce estimated the annual value of counterfeited goods by 500 billion (Mintel, n.d.). Good that are heavily tied to recognizable logos, such as Tommys, are popular by counterfeiters because they are easy to copy. Counterfeiting undermines company identity, status, attitude of the customers toward product quality. The political situation in the world now does not favor the U.S. as the country and its symbols become less popular in the world. This is directly affecting the Tommy brand, a symbol of American style. Additionally, THCs commitment of reconnecting with customers by delivering new fresh American style does create the impression that THC understands what it means to be global (THC Annual Report 2005). We would rather recommend THC create the products appealing more to the countries where they are operated or at least not be too American style speaking, at least outside US. The speed of life and fashion are accelerating. To operate successfully in the apparel industry means being the first to catch the latest trends and changes in consumer demand and to adjust for these changes. If a

company does not, consumers will move to another brand, making it hard to regain previous market share. 20

The companys decision to put itself on the auction block was mentioned already as opportunity, but it can also be a threat if the buyer does not share and is not willing to carry forth the companys primary mission, vision, and goals. In this situation the whole company identity that was created throughout the years can be destroyed. This could happen if the company will be bought by its competitor.

SUMMARY
The dynamic framework supporting the brand community is complex. It

requires a significant effort to foster the relationships that need nurturing in order that the customer experience as many aspects of the brand as possible. Multiple

marketing tools must be used to understand what the product can truly offer the customer in terms of a relationship experience in order that the price, place, and promotion aspects can be adjusted to acquire and maintain the customers business. Once the marketer has assessed the needs and initiated a model, he/she must continually measure customer satisfaction and adjust the companys offering or product and the pieces that build the total brand community experience. At the root of this effort is the companys wherewithal to support the undertaking with appropriate resources and continue investing in the brand. THC has invested in these activities, but due to a loss of focus and/or appropriate support, the company has shifted off course and lost brand value in its core market and suffered financially as a result. THC is making moves to correct its image in the U.S. market. After

cheapening its brand image through efforts to compete with lesser quality brands, it has recognized its folly and is pulling out of those distribution venues. It is expected that THC will attempt to take the following steps to address its U.S. situation:

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Continue to bring its brand value up by isolating itself from low-cost brands and distribution channels. It will attempt to keep its prices high, suffering some financial losses for the next three years in an attempt to make the brand less accessible to increase demand at the higher end.

Reduce logo size on many of its clothing targeted at the increasingly nonlogo-centric customers in the 15 to 22 age group. Making its logo disappear for a while will help increase its appeal when the company brings it back.

Continue its efforts to associate itself with famous talent in the music and movie community to foster its image of being current with what is happening. This will be an area of confusion for THC, however. They are expected to continue to try to be everything to everybody in hopes of hitting on the right image. They dont appear to have chosen a specific artist for their image, so are expected to still confuse their customers with a variety of perceptions.

Improve its e-commerce activities to offer a more exciting look and feel to its Internet savvy consumers. This includes supporting its Tommy Club efforts with more dynamic offerings that pull customers deeper into the brandfest relationship and make the virtual experience as real as possible.

THC is not expected change anything in the accessory market. It already commands a reasonable profit from merely licensing others to use the THC logo on upscale jewelry, purses, and other apparel, and these items have not been offered to low-cost distribution venues.

A conflicting message is broadcast by Walmarts apparent interest in acquiring THC. Although bringing Walmarts value up, this would most certainly lessen THCs brand value. The most recent news suggests that Walmart may have stepped back from the list of suitors, so this may end up not being an issue. However, whoever does

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purchase the company will have an effect on the brand depending on consumer perception of them. In Europe, THC will continue to push its successful efforts to advance its more logo-centric customers. In the short term, THC will push its successful products into Europe and look for opportunities for additional acquisitions. After a few years, the company is expected to step up its segmentation efforts in Europe markets to search out areas it has not yet tapped. Its experience in the US should have been a telling lesson for them and it is expected that they will maintain their image by staying away from lesser brands. In summary, Tommy Hilfiger Corporation is expected to fix some problems, but still project a confusing image to its public. Its Annual Report speaks of being an international company that appeals to the world, yet it describes how strongly its values are American and represents the values of the country and its people. Watch for its U.S. business to decline for the next five years and unless it stops speaking out of both sides of its mouth, its European success will plateau in the same time frame as international perspectives change to become less supportive of an American company trying to cater to the world.

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WORKS CITED Agenda Inc. (n.d.). Hilfigers buys Lagerfeld http://news.agendainc.com/mt-agenda/content/archives/2004/12/hilfiger_buys_l.html Associated Press. (2005). Tommy Hilfiger Lowers Profit Estimate, Says Some Results Will Need to Be Restated Slightly. Retrieved October 11, 2005, from http://biz.yahoo.com/ap/050930/tommy_hilfiger_restatement.html?.v=4. Associated Press. (2005). Fashion Company Tommy Hilfiger Corp. Reportedly Making Plans to Put Itself on Auction Block. Retreived October 12, 2005, from http://biz.yahoo.com/ap/050818/tommy_hilfiger_sale.html?.v=9. Belk, R. W. (1988). Possessions and the Extended Self. Journal of Consumer Research, 15, 139-161. Business Week Online. (2005). BW 50: Coach's Split Personality. Retrieved November 13, 2005 from http://yahoo.businessweek.com/magazine/content/05_45/b3958072.htm. CBS.com. The Cut. Retrieved November 28, 2005 from http://www.cbs.com/primetime/the_cut/. Cuba News. (2001). Tommy hilfiger Corporate Foundation teams up with the Boys' Club of New York for a cultural exchange trip to Cuba. Retrieved November 15, 2005, from http://www.cubanet.org/CNews/y01/jun01/19e3.htm Domenco, S. (2000) Loosing his shirt. New York Magazine, Retrieved December 5, 2005 from
http://www.newyorkmetro.com/nymetro/news/politics/columns/citypolitic/3525/index.html

Fashion Monitor Toronto (n.d). Tommy Hilfiger to Acquire Karl Lagerfeld business. Retrieved December 11, 2005, from http://www.dexigner.com/fashion/news-g3396.html. Greenberg, J. (2005). Reinvention of H: Hilfiger to Launch Global Lifestyle Chain. WWD: Womens Wear Daily, 190, 1-13.

Hip-hop style: 20 years in the making. (1998). Hip-hop style: What is cool? Retrieved November 08, 2001, from http://www.pbs.org/newshour/infocus/fashion/hiphop.html Infomat. (2005). Whos Who: Tommy Hilfiger, Fashion Designer. Retrieved November 11, 2005, from http://www.infomat.com/whoswho/tommyhilfiger.html.

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Keller, Kevin L. (2002) Customer-Based Brand Equity. Strategic Brand Management, Upper Saddle River, NJ: Prentice Hall 75. Matlack, C. (2005). Karl Lagerfeld. Business Week. Retrieved December 7, 2005, from
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