The news has been reporting that Tommy Hilfiger is up for sale.
As of this writing, there are various clothing brands and investment groups pondering an acquisition of the Tommy Hilfiger company.
There is no question that Tommy is one of the leading clothing brands in the world.
It has been reported that it is gaining popularity in Europe which should more than offset any slowing of its market share growth in the US market.
What should be an interesting situation is the following.
It has been reported that Wal Mart is interested in making a deal with the future acquirer of Tommy.
Wal Mart would like to carry apparel and other accessories from Tommy Hilfiger.
But the dilemma for a buyer of Tommy would be the consequence of having their brand sold by a national discount retailer.
Would the brand lose its cache as a top brand if customers can buy it at a discount at Wal Mart?
Any sane buyer would stop buying Tommy clothing at department stores if they can buy it at Wal Mart for less.
This would lead to the department stores dropping Tommy Hilfiger clothing from their stock.
Why should Tommy Hilfiger take a chance on selling to Wal Mart when it will lose its department store accounts.
Here is what I would do from a brand management position.
I would restrict any clothing that Wal Mart would carry to entry level lower priced Tommy Hilfiger clothing.
The higher end, let’s say $30 plus clothing, would be exclusively carried by department stores.
My strategy would enable Wal Mart to carry a well known brand and increase its sales.
The department stores wold gain since more customers would be introduced to the brand. When those customers decide to buy the higher end Tommy clothing they will have to visit a department store.
Tommy Hilfiger would also benefit since it will see an increase of sales from these new customers, plus the sales it will make to Wal Mart.
Donny Lowy operates the following wholesale sites: