Monday, November 10, 2014

JAB THEY FAILED: Tommy Hilfiger- When Tommy turned Hip-Hop

B Ushashree | IIM Shillong

Revolution or evolution? – it is a classic question brands and businesses are faced with today. Tommy Hilfiger is a well-known fashion brand that decided to take the revolution route which backfired. The brand was started in 1984, in a partnership with Mohan Murjani, an Indian entrepreneur who started Gloria Vanderbilt label, to design a preppy line along the same lines as Ralph Lauren. By late 1980’s Hilfiger found a new partner, Hong Kong knit-maker Silas Chou, and the brand grew steadily over the years. The company went public in 1992 and became even more famous. It was associated with “classic and preppy” and more importantly it was affordable. According to Hilfiger, this made it wearable and hence saleable. By the 1990’s it seemed like Tommy Hilfiger was everywhere. It was clinging to Britney Spears, hanging off Snoop Dogg and draped around Kate Moss. The Tommy logo became synonymous with cool and Hilfiger used it extensively. The Logo was present on every apparel and prominently visible, which is exactly what the consumers wanted. Hilfiger was happy to respond to its popularity among hip-hop musicians and athletes and gradually introduced hip-hop elements in its line. By the close of the decade, however, the line began to fall out of vogue and the sales plateaued. 
In order to gain relevance again, Hilfiger decided to completely revamp its brand. According to Hilfiger, the ideawas to be the first in trends. And in 2000, the brand decided to push the envelope further than ever believing that the customers would respond. However, in doing so it moved away from its roots and the brand elements which had initially made it click. The first misconception the brand had was that people didn’t want the Tommy logo anymore. They took it off a lot of stuff and in many places they made it tiny. In other words, they became insecure about the very thing which had propelled them to success earlier. Hilfiger also launched a ‘Red Label’ a logoless sub-brand aimed at the very top of the market. This range included garments in the range of US $7,000 such as patchwork, python-skin trousers. Not only were these items very different from Tommy’s preppy style, they were out of the reach of the average Tommy Hilfiger customer also. Another mistake that Tommy Hilfiger made was to open stores in locations such as London’s Bond Street and Beverly Hills’ Rodeo Drive. In doing so, Tommy Hilfiger hoped to follow successful Euro-brands such Gucci and Prada which played on exclusivity and style. However, this was never Tommy’s forte. The brand completely shed its personality and tried to revolutionize itself. Needless to say, all these moves failed horribly. Sales plummeted like never before, customers and investors lost faith in the brand. Many of its new stores had to be shut down. 
Tommy learnt from its mistakes and decided to go back to its roots – “classic with a twist”. The brand was about color, preppy and class. It re-introduced its logo and went back to its colorful and preppy designs. It shut down several stores and entered into a contract with Macy’s, a leading retail giant in US. Sales of Hilfiger clothing have rebounded, according to the designer, and the company is positioning itself to respond to changes in the industry. Every brand has its image and attitude it should never forget or let go of this. Tommy Hilfiger chose to stick to its heritage and not chase trends as it had proved to be catastrophic. Chasing trends is an easy option that comes to businesses naturally but it is dangerous to do so. It’s more important for brands to be consistent. Time and again, it has been proved that a brand should never let go off its formula – its reason for being. Another mistake Tommy did was to compete with irrelevant rivals – brands like Gucci and Luis Vuitton had a different playing field and very different principles. In doing so the brand entered unnecessary and illogical brand extensions which proved to be its bane.

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