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Tommy's Tumble


The story Hilfiger tells about the past year is one of soul-searching and regrouping. "Learning from our mistakes is really positive," he says. "Because we looked at the situation and said, 'These things are wrong.' We reacted immediately. The London flagship store wasn't open for a year when we realized we had made a mistake." Snobby Bond Street, observers pointed out, was the wrong address for Tommy in the first place. It looked like a matter, one noted, of "keeping up with the Laurens" -- Ralph's big flagship is right down the street.

The Beverly Hills store, says Hilfiger, was also ill-conceived. "The average age on Rodeo Drive is probably 50 years old," he says. "My customers are much younger than that. We thought all the cool people in L.A. come to Rodeo. But they don't."

Buckingham Capital Management industry analyst Larry Leeds sees in the Hilfiger story a kind of fairy tale turned cautionary tale: "You have this little guy, who is a fine guy, who has a store. And he became a god, and built a business that's as big as Ralph's, you know? And he makes a fortune. And everything's great.

"But then he gets absolutely carried away with urban, ghetto youth. And he loses his preppy original niche. And the thing got very overdone, and Tommy had to get back to reality. And he did. He's a very rational guy."

Wall Street is buying this version of the story, complete with upbeat ending. By November, despite continuing declines in earnings, analysts were enthusiastic about the turnaround in the works, and the stock had climbed back to 13. By last week, when the most recent figures were released, the stock went as high as 15.

And Tommy, despite chagrin at abandoning some of his cutting-edge pretensions, has recovered his mainstream roots. "We're about color, we're about preppy, we're about classic, we're about America!" he says, reciting his mantra. "We learned the hard way that that's where we belong." He picks up a placard displaying a photo from an old Tommy ad campaign: a gaggle of meticulously art-directed models posing languidly in front of a billowing American flag. "It was my insecurity about being this," he says, his eyes misting over at the sight of the iconic tableau. "I thought we could be much more than this. When in reality, just this is incredible."

If Tommy seems to have an almost corny belief in the American dream, it may be because he has lived it. Thomas Jacob Hilfiger was born on March 24, 1951, in Elmira, New York, a dreary upstate town best known as Mark Twain's summer residence. The second-oldest of nine children, Hilfiger was raised in a white clapboard Victorian house. Richard Hilfiger, a watchmaker at a local jewelry store, was an affable man of Dutch-German descent. His wife, Virginia, worked as a nurse. Even with two incomes, the Hilfigers lived from one paycheck to the next.

Tommy began working at an early age: mowing lawns at 9 and pumping gas at the local Hess station at 16. "I worked the night shift and made $1.25 an hour, which was great money at the time," he says. "I bought all my own clothes. I helped out my brothers. I didn't depend on my parents for anything."

No one would dispute that the young Hilfiger was enterprising, but nothing about him suggested that he was destined for celebrity. Small for his age, he concealed fifteen-pound weights in his pockets to make the junior-high football team. Nor was he a star pupil. In fact, he had to repeat the tenth grade. It wasn't until much later that he was diagnosed as dyslexic. "Tommy was only a C guy, and he wasn't a great athlete either," remembers Marty Herrigan, Hilfiger's football coach at Elmira Free Academy. "I guess that's why he became a businessman."

What he did possess was a precocious sartorial flair, which he inherited from a father regarded as Elmira's resident Beau Brummel. And he and his siblings enjoyed a certain social cachet. "Our house rocked," says Hilfiger, grinning. "My brothers practiced their music in the basement, and all the kids from the neighborhood came to hang out. It was a very cool spot."

Tommy's first big fashion epiphany occurred in 1969. To finance a summer away from home, Hilfiger took a sales job at a hippie clothing store on Cape Cod. The former preppy returned home from vacation decked out in sandals and bell-bottoms. His hair had grown out, rock-star-style -- sort of Prince Valiant meets Brian Jones. He listened to Hendrix and Stones eight-tracks. He dropped acid. His parents were, to use Hilfiger's own words, "freaked." He was 17.

What happened next has become part of garmento folklore. Realizing that Elmira was a fashion wasteland, full of teenagers like himself who craved mod clothes but couldn't find them, Hilfiger and two high-school buddies pooled their life savings ($50 apiece) and went into the jeans business. Hilfiger drove his rusted '59 VW Bug to Ithaca and scrounged up ten pairs of bell-bottoms. The initial inventory sold out in a day.

Encouraged by the enthusiastic response, Hilfiger made the 250-mile trip to New York, where he stuffed his Bug with 600 pairs of jumbo-legged jeans, which he purchased for $3.50, and flipped them in Elmira for $5.88. In a week, all 600 pairs were snapped up.

Eventually the three high-school seniors decided to become retailers themselves. On December 1, 1969, they opened a store called People's Place in downtown Elmira. It conformed to the typical trippy-jean-boutique template (head shop downstairs, Day-Glo and incense all around) and became an instant hit with Elmira's high-school crowd. "I couldn't wait for three to bolt from school and open the store," recalls Hilfiger. At the end of their senior year, the three partners were doing almost $1 million in volume and pulling down $60,000 salaries.

The local newspaper wrote up People's Place and Hilfiger spouted off about rebelling against "the Establishment." Larry Stemerman, one of the three original People's Place investors, says he and Hilfiger weren't nearly as rebellious as they were portrayed to be: "We laughed about it because we weren't rebelling against the Establishment -- we were the Establishment."

In the early seventies, Hilfiger made his first trip to London. The swinging Carnaby Street scene was already winding down, but to Hilfiger "it was amazing," he says wistfully. "For the first time, I saw how music and fashion complemented each other perfectly." He came back with a rock-star wardrobe of frilly shirts and form-fitting velveteen pants.

By the mid-seventies, Hilfiger and his partners had seven stores scattered around upstate New York, a six-figure income, and an automotive fleet comprising a Porsche, a Mercedes, a Jeep, and a Jaguar. People's Place was hot, with a customer list that included the J. Geils Band and Bruce Springsteen.

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