Tommy Hilfiger joined Philip van Heusen in 2010 to become the world's second largest fashion group and its most profitable business. This coming Sunday, the iconic American designer will present his next collection at the Tate Modern in London, with about 900 attendees and the intention of it becoming a reference to the company's turn towards sustainability and full digitalization. The brand is committed to Spain and to continue with its growth, always listening to what its customers want. the Economist Interview with designer Tommy Hilfiger and CEO of Tommy Hilfiger Global and PVH Europe, Daniel Griede.
What can we expect from the next parade this Sunday? There will be surprises?
TH. We have made a three-way collaboration, which had never been done in this business. They are always in two ways, but we decided that it was in three with the Museum, with Her. And obviously with Lewis Hamilton, who is our collaborator. Lewis is a influencer in men's fashion and Her will be an inspiration in women's fashion. So it will be very interesting to see you on the catwalk in the presentation of the collection, with the best of the best, with a great experience throughout the exhibition.
We are listening to the consumer and the consumer wants explanations. Want inclusion. He wants diversity.
What is changing in Tommy Hilfiger with the emergence of millennials?
TH. We are listening to the consumer and the consumer wants explanations. Want inclusion. He wants diversity. It wants meaning and a history of transparency behind the companies and the product we sell.
They have always had private equity funds around the company. What have you learned from them? Have they been useful?
TH. We had a participation years ago from a private equity fund (Apax Partners) and they helped us in the sale to PVH, which is a conglomerate. We are part of this family. Daniel is the CEO and leader of not only Tommy Hilfiger, but of PVH in Europe (includes Calvin Klein and Heritage). With private capital, you always have someone watching you all the time. PVH believes in this team and lets us do what we want to do, to grow the business. And success is proven, because the main business figures are growing.
What is your business plan for Spain?
DG. Our business in Spain is well developed at the moment. We are very successful with our 26 stores and continue to open. We have a great relationship with El Corte Inglés. We are an anchor brand for your stores and we will continue to grow with them, in addition to electronic commerce. When you see the industry and everyone who is complaining and seeing problems by switching from offline to online, what you need to see is that more than having many stores, what is necessary is to remain important. There are still many opportunities in switching from one place to another. In short, it's about being omnichannel.
When we made our collaboration with Rafael Nadal, I think that the consumers most closely linked to Spanish sports fashion embraced us.
Can we expect the opening of a megatienda in Madrid or Barcelona?
DG. We are always open to do it, when the opportunity can come. Of course, there is more and more space available and it becomes more attractive, but for us it is important not only to open the store, but to take care of the location. We have to offer experiences. We must arrive forming something relevant for Spain or for Madrid or for Barcelona and create an experience, so that people come and the store has traffic.
How do you see Spanish fashion?
TH. There are incredible companies in Spain. We see the consumer as in New York, Paris, Milan or London. The consumer is global. You have many options and we are satisfied, because we are very well positioned in the global market with a premium position. There is competition at the level of high and low prices, but we believe that we live in a great space and in the Spanish market we have always had great popularity. I think that everything originates from our colorful, fun, preppy (pija) fashion that is always changing even if it keeps its DNA. When we made our collaboration with Rafael Nadal, I think that the consumers most closely linked to Spanish sports fashion embraced us. It was very significant for us.
Can we see any other Spanish as their brand ambassador?
TH. We are always thinking who will be next. I am sure that in the coming months we will find some great collaborator. We are always analyzing the Spanish pop scene.
I like Rosalia. Rosalia is amazing, but it's taken by Nike.
Do you already have something closed?
TH. Nothing we can talk about yet, but I like Rosalia. Rosalia is amazing, but it's taken by Nike.
Can you tell me about the advances in your digital strategy?
DG. We will digitize the entire company. The whole value chain. Not only the digital store or the store of the future. I'm sure you've heard of our digital tester, but it also covers digital design. We will be the first company that has digitalized design, digital sales and the entire value chain in a single platform. We believe and we will make a tremendous effort in the business and in the opportunity, because we will be faster, more effective, more cost conscious and, most importantly, more sustainable. We have everything integrated already or ready to integrate and this will be a boost for our competitors, because we started doing it four or five years ago. Step by step, we have digitized the company completely and that is a great advantage. We remain involved, because in our total sales 30% are already online sales. Not only in our stores, we are already a pure player. We believe this will continue to grow, but that does not mean that we will lose our stores or the traditional business. We have to keep adding stories to tell and turn the customer that comes to the store into something special, powerful.
Do you think this can change the fashion world, with less durable and therefore less sustainable collections?
DG. You have to give the consumer a reason to buy. That circle is getting faster and faster. Basically, we have three references. We believe in speed, innovation and digitalization. And that is so, because it is what the consumer wants. We give you the opportunity to always buy what is new in the market.
What is your commitment to sustainability?
Less CO2, less water and better cotton.
Do you have a policy for this?
DG. Yes. We have approved a ten point system. We cannot be 100% sustainable overnight. We have to be better every day than we were yesterday. It is a continuous process, which we implement in the company, in the brand and in the product.
Do you have any commitment related to the Paris Agreement?
DG. We have clear objectives for the next five and ten years in the company, but also with some of our competitors. You cannot win alone in the battle of sustainability. Our industry needs to collaborate. It's not just the brands, it's also the companies that have to be together.
I would like to form a hotel chain. It has always been my dream and we are close to making it a reality.
After 35 years of career, what's next for Tommy Hilfiger?
TH. Thinking about 2020, we will evolve the whole experience. We will continue our digital path. We will connect technology with fashion, the media with fashion and we want to continue updating the product and updating it and strengthening our equipment. We have big plans for the future. We were already fashion disruptors with the seen now, bought now (see now, buy now) and we must see what is next. We think we know it and we will reveal it in the future.
He has spoken on occasion to form a hotel chain. Do you keep the idea?
TH. I would like. It has always been my dream. We keep talking about it and we are close to making it a reality. At some point in the near future I think I will.
How are international markets evolving?
DG. First, we are strong in all regions, but of course it is always a challenge. If we go to Asia, the coronavirus is a challenge, but we will run the company so that we can find new opportunities. There is always a plan, a strategy and the vision to grow in each of the regions, although there is a crisis that slows down a bit, but will not have an impact on our strategy for the next five years. Europe continues as a strong and solid market, which continues to grow, although we have a huge market share. And in the United States and South America we continue to grow, but the challenge is currently in North America, where the environment will change, although we continue to see opportunities. Whenever people keep dressing we are in business. We just have to find a way to know what they want to buy, how they want to buy it and where they want to buy it. We are always attentive to this, to be able to manage it.
Do you have any potential share repurchase operation? Did you talk about Mexico?
DG. We are always optimizing our project portfolio and how we can improve the business, improve our opportunities. Thus, we are completely open when it makes sense, but when you have good partners, sometimes it is not necessary to make these kinds of buybacks. but simply collaborate and go together towards the future.
Philip van Veusen is now the second world group in fashion. Do you aspire to become the number one?
DG. We have super strong brands like Tommy Hilfiger and Calvin Klein. Even so, there are many opportunities where we can grow and the group can be open for anything. I can't talk about anything concrete on the table, but we always have our eyes and ears open.
It started at a gas station
Tommy Hilfiger left his job as an employee of a gas station to work together with several friends to sell bell bottoms. With $ 150, People's Place formed its first company, which ended in bankruptcy when it had 26 stores. Years later, he created Tommy Hilfiger, with the help of investor Mohan Murjani, who helped build brands like Gloria Vanderbilt
Was the fall of People's Place the inspiring idea of the Fashion Frontier Challenge to help entrepreneurs?
TH. When we started with this idea, we wanted to receive the influence of innovative people, who really have a very important role in society, in sustainability and in the world of inclusion. We are very interested in all these matters as a brand. So we thought it would be a great idea to connect with these people, share with them, learn from them and give them opportunities to grow.
When People's Place went bankrupt, I was a teenager who didn't understand the world of business.
What did you learn from the bankruptcy of your first store?
TH: When People's Place went bankrupt, I was a teenager who didn't understand the world of business. What I learned at Tommy is that if you really want to have a business, you have to pay attention to the income statement and I told myself that I also had to focus on the business as a business. Luckily, now I have great partners to take care of all this, but it is a lesson I learned, although it does not have much to do with Fashion Frontier, which is born from our intention to connect with innovators and with those people who have a passion for Do something that is significant for culture, for sustainability, for inclusion and for diversity, in which we are interested as a brand.
What have you discovered after these two editions?
TH. There are many very intelligent people with great ideas. It is always very difficult to decide which one. There are some better than others, but they are very good ideas. We had 450 participants and we had to choose six. I am sure that all the others have also had great ideas and I think that, as I said, the cream rises to the top and eventually those who have the best ideas and the best business sense are the ones that are probably the most successful. We would like to be there for them and be able to help them along the way.
Are some of those ideas usable for your company?
TH Yes, they can be connected in some way.
D. G. It's what you say, they can reach Tommy's heart. Having a great idea is a second, but implementing it or doing a business from it is what they have to achieve. To do this, they must learn a lot and we can support them in their day to day, so that they can finally achieve it.