Tommy Hilfiger - The Struggles of an American Fashion Icon

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Case Details:

Case Code : MKTG090
Case Length : 15 Pages
Period : 1969-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Tommy Hilfiger
Industry : Branded Apparel
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"A consistent program, a commitment to live the brand, a unique consumer experience and a lot of luck. Hilfiger has all those things."

- 'Born in the USA,' Adweek Western Edition, June 28, 1999.

"After years of being one of the coolest labels on the block, it suddenly looks like a loser."

- 'Why Tommy Hilfiger is so Like, um, 1998,' BusinessWeek, April 24, 2000.

"The brand may have been pushed to saturation point or diluted beyond recognition."

- 'Hilfiger Loses Edge by Staying in the Middle,' Media Asia, October 17, 2003.

Uncertain Times for a Successful Brand

In early 1997, one of the most popular clothing brands from the US, Tommy Hilfiger, found itself being maligned on the Internet for supporting racism.¹ Tommy Hilfiger (Hilfiger, the designer after whom the brand was named), was reported to have made derogatory remarks about Asian, Hispanic and African customers.

According to the postings on various e-mail groups and other websites, Hilfiger had made these comments on popular television shows, 'The Oprah Winfrey Show' and 'CNN's Style with Elsa Klensch.' He was alleged to have said that if he knew that blacks, Asians and Hispanics were wearing his clothes, he would not have made them 'so nice.'

There were many different versions of the above story - all of them ending with a remark on how Hilfiger and his company needed to be boycotted and taught a lesson.

The Economist magazine reported, "Everybody on the Internet knew that Hilfiger had made racist comments on the Oprah Winfrey Show."²Since Hilfiger had never appeared on the said shows, he brushed off the news as a minor nuisance. Controversy however continued to plague the company.

A while later, media reports stated that Tommy Hilfiger clothes were being manufactured by slave laborers in Thailand. The company was accused of human rights violation by using sweatshop labor. Tommy Hilfiger Corporation (which managed the various businesses built around the brand) took immediate steps to rectify the situation (Refer Exhibit I).

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1] Racism refers to the practice of discriminating/having prejudice against people of different races. It is based on the premise that 'one race is superior to the other' and leads to abusive behavior on part of the so-called superior race against the ones supposed to be inferior.

2] 'Gossip on the Web - Truth, Lies and Cyberspace,' The Economist, April 22, 1999.