Tommy Teams With Karl

Tommy Hilfiger Corp. (Kowloon, Hong Kong) has announced it will acquire the trademarks of fashion designer Karl Lagerfeld for an undisclosed cash amount. The transaction includes the Lagerfeld Galleries and other Lagerfeld collections.

The agreement also includes a long-term contract under which Lagerfeld will continue to design and provide creative direction for his brands. The acquisition does not include Lagerfeld's agreements with Chanel and Fendi.

“This acquisition is an important first step in our long-term strategy of building a multi-brand portfolio of businesses,” said David Dyer, president and ceo of Tommy Hilfiger Corp. “The Karl Lagerfeld name has tremendous cachet. We believe this opportunity will provide an exciting new growth platform within the upscale apparel segment and complement our existing business. Since the Lagerfeld business is currently in its start-up phase, we expect that the acquisition will be somewhat dilutive to the company's near-term results. However, we see Lagerfeld's brands as contributing significantly to revenue and earnings over the long term.”

Tommy Hilfiger Corp., through its subsidiaries, designs, sources and markets men's and women's sportswear, jeanswear and childrenswear under the Tommy Hilfiger trademarks. Its products can be found in department and specialty stores throughout the U.S., Canada, Europe, Mexico, Central and South America, Japan, Hong Kong, Australia and other countries in the Far East, as well as the company's own network of outlet and specialty stores in the U.S., Canada and Europe.

Karl Lagerfeld's business consists of the Lagerfeld Gallery, a women's luxury ready-to-wear collection, and Lagerfeld, a licensed business for men and women and related accessories, as well as boutiques in Paris and Monaco.