Tommy Hilfiger Corp. (Kowloon, Hong Kong) acknowledged that it isexploring a possible bid for the acquisition of Brooks Brothers from Marks & Spencer.
Earlier this month, there was a report that Tommy Hilfiger co-chairmenSilas K.F. Chou and Lawrence Stroll submitted a bid of at least $325million for the troubled U.S. menswear retailing division of thetroubled U.K. retail organization. The amount would qualify the Hilfigerexecutives to then make a presentation to M&S.
It was not clear whether or not the two Hilfiger chairmen would bejoined by the rest of their company in the bidding, and a Tommy Hilfigerspokesperson declined to comment. However, sources indicated that Chouand Stoll, who bought Asprey & Garrard Ð the London-based jewelryretailer – last year, do have the money to buy Brooks Brothers on theirown, especially after having recently sold blocks of their TommyHilfiger shares.
Tommy Hilfiger's finances are also regarded as healthy, even though itjust bought back its European licensee at the beginning of July for $200million. But its men's business has been uncharacteristically downlately, and it is also in the midst of plans to open its own full-pricedspecialty stores. An acquisition of Brooks Brothers “might be adistraction,” one retail analyst speculated.
Marks & Spencer bought New York-based Brooks Brothers for $750 millionin 1988, and has been trying to unload it since March after failing torevive its sagging sales and profits. The bidding process began lastmonth and will likely continue through late August into early September.Among the names of possible acquirees that keep coming up are NeimanMarcus, Saks Fifth Avenue, May Department Stores Co., Men's Wearhouse,Retail Brand Alliance Group (which owns the Casual Corner stores), TexasPacific (the leveraged buyout specialist that owns J Crew and Ballyshoes), Bain Capital (a Boston-based venture capital firm), DicksonConcepts (the Hong Kong- based retailer that already operates BrooksBrothers franchises in Southeast Asia) and, as of last month, Polo RalphLauren. The May Co. has been considered the front-runner because it hasthe deepest pockets.
Tommy Hilfiger Corp. insisted that it does not intend to make anyfurther statements or comments regarding its potential interest inBrooks Brothers. Similarly, spokespersons for May Co. and Polo RalphLauren also declined to comment on the speculation.
The Brooks Brothers brand, which always stood for authentic, classic,traditional clothes, has suffered in recent years, according to MikeToth, a New York branding and imaging consultant who assisted bothBrooks Brothers and Tommy Hilfiger in the early 1990s. “They tried tomodernize and make the brand more relevant, but they gave up thepersonality of the brand,” Toth said. “There was no differentiation. Itlooked like everyone else's clothes.”