Ch. 5 - Developing a Global Vision

The global expansion of Tommy Hilfiger began in 1988 when Tommy Hilfiger, Mohan Murjani and two others formed Tommy Hilfiger Co. Inc and bought out Murjani International. During this process the company found a financial backer in Silas Chou. Chou's firm, Novel Enterprises, was one of the largest sweater manufacturers in Asia, and the company was willing to invest money in Tommy Hilfiger Company to allow it to expand. With extensive contacts in the Asian garment industry, the new company not only designed but manufactured Hilfiger clothing, using Asian factories that produced low-cost, high-quality goods. Its first year the company made 25 million dollars which was a little under of what was expected. Upon entering the New York Stock Exchange in 1992 with stocks going for 15 dollars a share, the company made 70 million dollars in stock offerings that year alone. The company used this cash to expand its in-store shops and to develop new outlet stores, which would sell past-season Hilfiger garments at reduced prices. 

Hilfiger's sales continued increasing every year, from $107 million in 1992 to $138 million in 1993 and $227 million in 1994. Tommy Hilfiger had almost 500 sections in department stores alone the big 3 being Dillard's, Federated, and May. Sales and earnings kept going up dramatically. The company used its profits to expand in various ways. Between 1994 and 1995 Hilfiger Corporation added over 200 in-store men's shops. The company had introduced boys' clothes in spring 1995. The company had close to 500 in-store boys' shops. Hilfiger had a presence in Japan, with 36 shops inside Japanese department stores by 1995. Also in that year, the company launched 12 in-store shops across Central and South America.  The company had to move cautiously on its own stores in order not to appear to compete with the Hilfiger shops operated by its best customers, the large department chains.