Losing His Shirts

The handsomely rakish guy in the H&M shirt just about bit my head off when I got to Hilfiger. I was playing a little word-association game in a series of man-in-the-street interviews around Astor Place, throwing out the names of prominent youth-culture clothing brands in an attempt to divine just what those brands stand for these days in the mind of the typical urban consumer.

So, what do you think of when I say Tommy Hilfiger?

“Too many different fucking options,” snaps the scruffy-faced, wildly gesticulating Web producer, practically snarling. “There’s just absolute confusion about what the core product is! It’s impossible to get a grip.” He’s getting worked up now. “Tommy Hilfiger – what does Tommy Hilfiger stand for? It’s not even preppy gear anymore!”

That attitude – shared by many of those I talked to – is not good news for Tommy Hilfiger. But you already know this if you own Hilfiger stock, which is at about 7, down from a 52-week high of 41. Put another way, last summer Tommy had a nearly $4 billion shop. Today his market cap is $700 million. It’s no wonder that last Wednesday, Tommy’s CFO, Benjamin Ng, resigned “to pursue other interests.”

So what’s gone wrong with Tommy? To a certain extent, it’s obvious that Hilfiger’s been riding the nineties teen-pop-culture explosion, a psychographic bull market that was destined to run its course. But unlike some of its competitors, Tommy seems strangely out of focus. Think of Abercrombie & Fitch’s homoerotic soft-core porn; Calvin Klein’s edgy pop-culture icons as spokesmodels; Pacific Sunwear’s sun-kissed California preppies; Quicksilver’s partying surfer dudes. You may grow tired of these brands, but at least you can understand them.

Hilfiger, on the other hand, seems to be suffering from advertising ADD – a sort of saturation bombing of every possible consumer demographic. Tommy’s suburban appeal used to play off his urban cred; now he’s so mass, even suburbanites are bored.

Tommy Hilfiger, which has dominated the middle ground for so long, has lost a sense of its brand identity and needs to seriously rethink its logocentric designs – an admittedly daunting proposition.

“It’s all about urban backlash,” says one ad-agency executive close to the Hilfiger account. “It’s all about how Tommy first went black, then went mainstream – and then couldn’t go back.” While Tommy was busy hanging out backstage at Rolling Stones concerts, it seems, he was upstaged by black entrepreneurs who set their sights on selling Enyce and fubu to Tommy’s former customers.

Consider Hilfiger’s reputation as clothier to America’s rock and rap royalty – a landmark marketing strategy. The brand’s watershed moment came in 1994 when then-chart-topping Snoop Doggy Dogg agreed to wear a red-white-and-blue Hilfiger rugby shirt on Saturday Night Live. The problem since then is that Hilfiger himself has seemed so flattered by celebrity attention – any celebrity attention – that he’s been willing to dress just about anyone famous or even semi-famous, which means that anyone who’s really anyone doesn’t want to be dressed by Tommy anymore.

Three days before the recent MTV Movie Awards, for instance, Hilfiger put out a press release headlined tommy hilfiger to dress nominees and presenters at the 2000 mtv movie awards. The complete list? Chris Connolly (an MTV News utility player), Tom Green (the potty-mouthed MTV show host), and Jason Biggs (from American Pie). Not a style icon among them. (You’d think they’d have skipped the press release this year.)

“Tommy went over the top,” says my agency source. “He started to think he was an impresario and not a garmento. Like he tried to ‘discover’ that cheesy pop star, Michael Fredo, to sell jeans.” Fredo, a pop balladeer in the boy-band mold, sure looked good in Hilfiger duds, but his debut CD, released last fall, tanked.

In fact, Hilfiger’s high-profile concert sponsorships over the past couple of years, including tours not only by Fredo but by Jewel, Lenny Kravitz, the Stones, and Britney Spears, suggest a certain schizophrenia about which celebrity names – call them brands – are worth piggybacking. (Sponsorship of the Rolling Stones might make sense for Bud Light, or, you know, Winnebago. But rapperwear?) The sponsorships have had the net effect of canceling themselves out: A Lenny Kravitz fan is likely to resent Britney fans, and Mick Jagger fans are likely to resent Michael Fredo fans (if there are any).

Thanks to its all-over-the-map marketing, says Marian Salzman, worldwide director of Young & Rubicam’s Brand Futures Group, “Tommy Hilfiger is becoming the domain of kids’ parents. I had to laugh when a fortysomething colleague in Amsterdam came to the office on casual Friday wearing a Tommy Hilfiger T-shirt. It’s so mainstream that Dutch Establishment yuppie boomers don’t mind billboarding for the brand.”

So what can Tommy Hilfiger do to recover?

“This is the age of authenticity and of no-brow culture,” says Y&R’s Salzman. “It’s not style that’s prescriptive but style that incorporates self-creation. No-brow means that you can mix Old Navy with Prada and be way cool.” (No wonder Tommy Hilfiger, which has dominated the middle ground for so long, has lost a sense of its brand identity.) Hilfiger needs to seriously rethink its logocentric designs, something even company executives quietly admit is a daunting proposition. Though ridiculed by industry observers, the upscale Collection for Men and Women is seen within the company as a test lab, a way to figure out how to build lines around something other than a logo. Weaning dumpy middle-age parents from their Tommy tees and convincing them to slip into logo-free Tommy sportswear is a way of preserving revenue while refocusing the brand.

The red-white-and-blue logo gets to stay, perhaps, on the packaging of Hilfiger’s vast array of licensed goods – fragrance, lipstick, bedding – but starts to fade entirely from selected lines. (Already you can buy a $58 pair of men’s ripstop-nylon shorts in which the Tommy Hilfiger name appears only on the inside label.)

Hilfiger can also take cues from what other embattled apparel brands are doing to recapture their cachet: Levi’s, for instance, has been using the European market as an incubator for cutting-edge advertising which targets buyers with sophisticated niche advertising. The Über-brand, facing market saturation, recently announced that 1999 profits had plunged shockingly to $5.4 million, down from $102.5 million in 1998. But Levi’s Europe shows that it is possible to revive the company’s subbrands, like the Sta-Prest line of uniform-inspired pants, which saw a major resurgence overseas when Levi’s introduced a fuzzy yellow Sta-Prest mascot, a puppet named Flat Eric. The episodic Flat Eric spots, with an electronica soundtrack that was released as a single and hit the top ten on British charts, spurred an avalanche of fan sites and gained cult appeal, much as Budweiser’s “Whassup” spots have in the U.S.

Though Levi’s brought him to the U.S. only briefly for a quick run on MTV this past winter, Flat Eric (who is terribly amusing and endearing in the spots) scored editorial mentions in magazines like Flaunt, Out, and Paper this spring – essentially free viral marketing. Now Levi’s is returning the favor with a series of paid print advertisements in those same magazines for its sleek new Engineered Jeans line. Levi’s, the most “mass” of American brands, is engaging in some good old-fashioned boutique marketing.

Think of the Levi’s Sta-Prest and Engineered Jeans approach as a sort of self-imposed Microsoft-style breakup. A brand that’s become too big, too cumbersome, breaks up into subbrands that appeal to specific niche markets. Other brands have attempted to do this through acquisition – Ralph Lauren’s buyout last year of the fast-growing Canadian label Club Monaco, for instance. Meanwhile, Tommy Hilfiger briefly flirted with the idea of bringing a subbrand into his stable in exactly the wrong way: by attempting to acquire Calvin Klein. (Hello? One oversaturated brand buying another oversaturated brand?)

If Hilfiger is set on growing through acquisition, he’d be better off trying to buy a cult-appeal brand like Earl Jeans, worn not by Tom Green but by the type of celebrity Tommy used to be able to court: Sarah Michelle Gellar, Katie Holmes, and Liv Tyler. The marketing lesson Tommy can take home: When your brand gets played out, sometimes it’s best to bite the bullet and bury it for a while.

Losing His Shirts