Tommy
Hilfiger India is a success story for the brand. TH was one of the first
premium international designer brands that entered India (in 2004). The focus
was not immense on the Asian markets. However
with its American heritage and appeal it connected very well with Indian customers
in the super premium segment.
The product range is varied
across menswear and women’s wear categories of top wear, bottom wear and
footwear.
The line is further divided into sportswear and denim. While
sportswear caters to the urban, peppy, matured customer the denim line with its
street and sexy edgy styling is more targeted at teens and youngsters who are
in their early 20s. Some key categories include men’s shirts, women and men’s
knits, denims, pants and dresses. They also make accessories like bags,
wallets, belts, caps, stoles, sunglasses and watches.
The $4.6-billion Tommy Hilfiger, a unit of
PVH Corp, operates in more than 1,000 stores in over 90 countries in North and
South America, Europe, Asia Pacific among others.
A quick look at the history of the brand:
Murjani brought Tommy Hilfiger to India in
2004 through an equal joint venture with Arvind Brands, Arvind Murjani Brands,
for apparel only. Murjani has also licensed the brand for accessories and other
products to various players, including Eastman Export group for innerwear, Titan
Industries for watches, and Creative Portico India for home textiles and
furnishings range, among others.
The association of Tommy Hilfiger with
Murjani goes back to 1984 when he roped in Hilfiger to design jeans line for
his firm Murjani International. Four years later, Tommy Hilfiger, Mohan
Murjani, and two others formed a new company, called Tommy Hilfiger Co. Inc,
buying out Murjani International. Murjani exited the next year, but retained
the rights of the brand in India in perpetuity.
In 2006, Tommy Hilfiger sold his company to
Apax Partners for nearly $1.6 billion due to declining sales, and last year PVH
Corp bought it from the private equity company for nearly $3 billion.
India was not part of these global
transactions because Mohan Murjani had the rights for India.
The company roped in Sailesh Chaturvedi from
Benetton HongKong, as its CEO in 2006. An engineer & MBA
by education, Sailesh has been working in the apparel industry for the last 18
years.
In 2011 Tommy Hilfiger bought out the 50%
stake of the Murjani group in the joint venture (Arvind Murjani Brands). Though
Tommy Hilfiger did not disclose the terms of the deal, it is believed to be
between $50 million to $60 million (around Rs 250 crore). Arvind will continue
to remain as a joint venture partner and the redefined joint venture will
continue its existing businesses going forward and take on the management of
the other sublicenses in India.
In 2011 the JV applied to the Registrar of
Companies for a change of name from Arvind Murjani Brands to Tommy Hilfiger
Arvind Fashion. Now, the alliance has filed an application with the DIPP
seeking approval to open Tommy Hilfiger branded stores in India via the window
for single-brand retailing.
Growth Plans
The $89 bn Indian
Textile and Apparel Industry is expected to o
become $221 bn by 2021. Apparel in
organised retail sector is growing at the rate of 23%. There
are many factors contributing to the boom in this sector. As the
lifestyles of India’s prospering urban consumers has evolved, their clothing
needs have broadened, reflecting more varied usage occasions. More Indians are travelling abroad and are exposed to
different cultures and way of life and thereby more brands. Moreover increased
consumerism with a capacity to spend on luxury items and increased spending
power in the hands of Indians has also contributed to the growth of this
sector. Many brands are flocking the country and many existing brands are
strategising on how to increase presence across the country. At the same time
there are leading brands that are still struggling or are in a phase out stage
despite having strong product lines. The story of survival is different for
most.
Let’s understand Tommy Hilfiger: The 320 crore brand has shown robust financial
performance over the years and has clocked 50%
growth consistently in the last few years and is growing aggressively. It
clearly followed the strategy of first establishing its presence in India
through a known local partner followed by integrating the Indian market into
its global platform.
Tommy Hilfiger has been one of the early
movers among international lifestyle brands. They have
a substantial lead as compared to any other international brand in India which has
given them a deeper understanding of the Indian consumer than most of the other
competitors. They were the first ones to bring
the international shopping experience to India with the same collection, the
same store look and the same service standards. The brand ‘s unique blend of
youthfulness, spirited energy and vibrancy appealed to the customer and
very soon they were able to establish a loyal base. The brand stayed
away from much discounting in the initial years and created a loyal following
across metro cities.
The buyout of the Murjani
group's stake in its India business clearly signals the brand's intention to
grow fast in India. It shows an effort to integrate India into its global
platform for design and sourcing. This
move also supports its strategy of consolidating brand management and
approaching the markets in a more coordinated manner. They did the same in
China in 2011. Tommy Hilfiger plans to add 500 stores in India over the next
five years to capitalize on the brand's surging popularity, Tommy Hilfiger
Arvind Fashion Pvt Ltd, a 50:50 joint venture between Tommy Hilfiger and Arvind
ltd will invest Rs 60 crore in 45 company-owned stores and a significant number
of the stores will be opened through franchisees. Currently, Tommy Hilfiger
operates 58 franchisee outlets and over 60 shop-in-shops in other department
stores. The expansion will take Tommy Hilfiger's presence to 631 points of sale
by 2016-17.
