How Tommy Hilfiger Manifested a $9 Billion Fashion Empire After Going Bankrupt!

0:00If you manifest, dreams come true. Today, we're joined by Tommy Hilfiger. From opening his first shop in New York to growing it into a global label sold in over 100 countries, along the way, he's collaborated with artists like Beyonce and Gigi Hadid, leaving a mark on fashion and culture for more than 35 years. Hi, I'm Tommy Hilfiger. Welcome to The Burnouts. Tommy Hilfiger, you're obviously now an American legend, a giant fashion label. I want to walk back to your first business for our listeners. The jean shop that you created, what happened and what did you learn from that? I sort of stumbled into it because in high school I was a very poor student.

0:43Grew up with eight brothers and sisters. My sister, who was a year younger, was always getting great grades. So my father thought I was just a loser. and I thought I was as well because I just could not grasp what the teachers were talking about. I found out I was dyslexic but nobody knew what dyslexia was at that time and I didn't really discover my diagnosis until years later. I have dyslexia. Oh you do? Yeah my parents I'll never forget they made me do all this testing and they sat me down they're like okay your IQ is scoring high here and here but your 20th percentile for reading. Turned out it was dyslexia and I got I was able to get incredible therapy for it.

1:23But I can't imagine growing up without support around dyslexia because with all the support I had and even knowing what the diagnosis was, I felt so stupid. I felt stupid. So I would sit in class and really check out. I would daydream, look out the window and really picture myself becoming successful. I didn't know how or when or where, but I knew I had to go after that North Star. I really created these scenarios in my mind. I wanted to be a ski patrol. I wanted to be a rock star. I wanted to be all these different things and none of them seemed like they would even happen. So in the late 60s, I was working in a boutique in Cape Cod and it was sort of like fashion accessories, things like that, and I I really, really liked the whole vibe.

2:16And I thought, wow, this would be great to be in this business. I saved$150 from working at a gas station nights. And I bought 20 pairs of bell-bottom jeans from the streets of New York City. I drove them back to my hometown of Elmira, New York, which is five hours driving away. And I started selling them to my friends. And then I opened a shop called People's Place. The jean shop turned into a success. and then I opened shops on college campuses like on the Cornell campus and throughout New York State. How old are you at this point? 18. What do your parents and siblings think? My father thought I would always fail.

2:52My mother was a little bit leery I guess you could say because had long hair and hippie type clothes and blasted rock music and burned incense and sold rolling papers so they were like, this is going to get you in trouble. But I thought, okay, well, eventually I want to start my own brand. So this is only a stepping stone. And when I told them that, they thought I was absolutely crazy. But I pictured myself creating my own brand. And I would look at people who were already doing that, like Calvin Klein, Ralph Lauren, other American designers. And I thought, I think I can do that. And I think I can compete with them.

3:31You had that billboard made, where you were like, there's only four great American designers, Ralph Lauren, Calvin Klein, Tommy, Hilfiger, you put yourself in it. How did that happen? I met a guy by the name of George Lois, who at the time was like an advertising genius. He created the first ads for MTV, Volkswagen, a lot of different brands, but never anything in fashion. Showed him what I was thinking of doing for my ad campaign. And I showed him a photograph of this really great looking model in the Hamptons on the beach. He said, you're crazy to do that. You'll never, ever get known. And people will look at the magazine page, turn it, they'll just flip through it, and it will cost you millions of dollars over time to become known or respected.

4:19You've got to do something disruptive. So I said, well, you know, what does that mean? And he said, I'll let you know. I'll show you in a couple of days. he brought back these big storyboards and he started showing me what I could do and I thought I can't do that I can't compare myself to other names he said yes you can there's no law against it no rule against it so really the billboard said the four great American designers are R-L C-K and then P-E which was Perry Ellis at the time and then the least known of the four is T-H. So people went crazy like who is this Tommy Hilfiger? Who does he think he is?

5:02He never went to design school. These designers are established. How can he compare himself? So the whole fashion world was really negative on him. Were any of the designers upset? Yes. Because they interviewed them for the newspapers and the magazines and everyone was very upset and very angry. I thought well look I'm either going to drop out of the business and do something else, or I'm going to really roll up my sleeves and I'm going to work hard to show them that I'm worthy and that I could actually create great clothes. I went to work in a major way. I went to the factories. I designed every button, every zipper, every color, every single thing myself, and it took off.

5:47It was all about what I wanted to wear in the beginning, cool preppy. So I made everything oversized. I made everything colorful. I made everything with some detail, some trim. I developed a logo that I thought would become known if I were to use it over and over. And I was criticized. I remember we met with the head of Bloomingdale's and the head of Bloomingdale's basically said, nobody wears logos. Our customers aren't going to wear logos. And I said, well, I really believe in logos. And they said, well, we're not buying logos from you. I developed this big rugby shirt with a logo. And I said, well, could you just put this on a mannequin so it's like at least signage for the shop?

6:34And everybody wanted to buy that shirt. Snoop Dogg wore it on SNL and it went viral. Millions of dollars worth of that shirt sold, right? Yes. Yes. Did you know it was going to go viral? How did you have so much back order? I just thought people were going to like it. People like sporty things. They like them colorful. I wanted to make incredible quality at an incredible price point. But I wanted everything oversized and relaxed and cool. I want to go back because it sounds like there was this period where your dad's putting you down. You kind of feel like a loser. Then you're going to do this big billboard.

7:07And then you're getting rejected by Bloomingdale's. But you've already stocked, I imagine, thousands of this shirt. You believe in yourself. You know it's going to sell. it does sell. What was the kind of switch factor going from feeling like, okay, my dad doesn't believe in me to, okay, I'm going to be successful and this is going to happen. This is just a matter of time. After being in business for about six years with People's Place, with my first chain of stores, I went bankrupt because I really didn't understand the business. And that really was the nail in the coffin, so to speak, with my dad, because he said, see, I told you.

7:44I told you you would never make it. You should have gone to college. You should have done this. You should have done that. And I thought at that point in time, I have to show him that I can actually do it. So after the bankruptcy, I moved to New York City and I begged my way into getting design jobs with gene companies of that era. And I was fired after my first job because they said, we don't need jean designs. We have jean designs. What else can you do? And they didn't want shirts. They just wanted jeans. So they fired me. And then I went to another company and I started another company with someone.

8:24But I was not going to give up. I had this vision in my mind of becoming successful and having a brand that would compete with Ralph Lauren, Calvin Klein, and others. Amongst the ups and downs, I still had this very strong, positive dream in my mind to make it. It took a lot of perseverance. I guess I became thick-skinned because there was so much criticism, but I kept going. And here we are today. We're 40 years in, and we're one of the most successful American designers in the world with 2 ,000 stores and a huge customer base. And the business continues to grow. And we're not only in fashion, but we're in watches and handbags and footwear and all sorts of different lifestyle objects to complete this vision of building a global lifestyle brand.

9:35and I love the point that you had around 2000 when the brand was plateauing you were like I need to reinvent myself designers need to constantly reinvent themselves like Madonna and I think that's so applicable to our listeners to even us as entrepreneurs how did you decide when you wanted to kind of reinvent the brand and change things I knew that it would plateau because it's fashion. And I kept thinking about what's next. What is next? So I thought that some genius people I looked up to were genius enough to reinvent themselves along the way. And I looked at David Bowie. He really reinvented himself many times along the way.

10:15And then there were other people in business who did the same. So I thought, okay, now I have to reinvent myself and I have to do something different. So I wanted to slim everything down from oversized. And when I started slimming everything down, it didn't work. People still wanted baggier, looser-fitting clothes. And I had a couple of difficult years. But what happened is we had a European business that was blossoming and the Europeans would be more apt to buy finer quality, even higher price points, more sophisticated, still preppy, still with a cool edge, but sort of on a different level. And it was working in Europe.

10:58So we brought that idea over to the US and then it started working worldwide. And then the business got on track again. Can you walk us through, especially for any other young creatives, what would be your advice for making sure that you're both adhering to this creative vision, but also bringing on people who can make sure the business is solid financially? Well, I think there are a lot of creative people around and a lot of amazing, talented designers. But many of them go out of business because they don't understand the business of the business. And as a result of the bankruptcy, I taught myself the business of the business.

11:37And I really focused on being equally as creative as business-minded. And I think that's helped tremendously because in order to survive, you need a bottom line. You need profits. You need growth. You need cash flow. You need banking relationships. You need all sorts of things that, tools, that aren't really taught in design schools. You know, they're teaching people to express their creativity, and that's cool and a lot of fun. But when you get out of design school and you start your own brand and you take your parents' money or your savings to start a brand and don't survive. It's usually because they don't have any business sense.

12:19So my advice to young designers is that they should find a business partner. Find a friend, find someone who understands business and join up with them. And a lot of young designers say, well, people have told me never to share my business. It should be mine. I should own the name 100%. I should own it and not ever have a partner. And I said, that's totally wrong. You should always have a partner and always have a partner who's a lot smarter than you are when it comes to business. When did you decide, okay, I need a business partner. And then what was that process of bringing someone on? A gentleman was running my company, was really the sort of, I would say, jack of all trades.

13:03His name was Joel Horowitz. and I asked him to become my partner. So I said, look, I'll share the ownership of the brand. And then we met two other gentlemen. One is a man by the name of Silas Chow from Hong Kong, from a Chinese family. They own factories. So that made sense to me. And he had a partner by the name of Lawrence Stroll who was the licensee and partner with Ralph Lauren in Europe. So we took these guys in as partners, and I shared my ownership with each of them. And a lot of people, including one of my lawyers, said, don't really share the ownership. And I said, look, I think one partner plus one plus one equals ten because each partner has a different expertise.

13:58It turned out to be successful, but it was a gamble. That's honestly the best advice that we got too, in terms of if we were building this business, we needed to bring on like incredible engineers and give them a piece of the company, et cetera, people who knew stuff that we didn't and that we would collectively share the ownership. And something I wanted to return to that I thought was really interesting about your life and the things that you've done is it kind of feels like you manifested a lot of your success. Do you believe in manifestation? How do you think that played a role in your success?

14:29You're laughing for me. Because people love manifestation. I think it's true. By the way, dreams come true. And you can make your dreams come true if you manifest. And if you go after that goal, that North Star, knowing that along the way, there are going to be roadblocks and obstacles. And my thought was always that when you run into a roadblock or an obstacle, it's an opportunity. and you have to figure out how to get over that roadblock, around it, under it, or through it. But there's a way to get to the other side and if you give up because you think there's not a way to get to the other side, you're cheating yourself because I really believe that those roadblocks have really been to my benefit because you're forced to maybe look at a situation in a different way thinking that, okay, well, this way didn't work and this way didn't work, but let me think of doing it another way.

15:31And I really believe that if you have confidence in yourself, you could just throw those ideas out there. And if they work, they work. If they don't work, change boats in midstream. What's the biggest roadblock you faced building Tommy Hilfiger? When my first backer, who was really the first person to believe in me, ran out of money three years after we started up together. And I had to go out and find money. So I went to banks on Wall Street. I went to investment people. And at that time, in the early 80s, they didn't believe in fashion businesses. They said fashion is fickle. It's not risk-free.

16:15We're not going to loan money and we're not going to invest money in fashion. So I then met these other gentlemen who helped me reestablish the business. The business was on very thin ice at the time. And then we decided that as soon as the business started getting traction, we would go public. And we did an IPO early on. And when we went public, we used all of that money to expand, open shops, open shops and department stores, advertise, hire people. So we used it as working capital. And it really strengthened the business and strengthened the growth. What did the process of going public look like?

16:59So in 1992, we decided we should go public. And we went to bankers. They said, well, you know, you need a little bit more history. You need a little bit more cash flow traction. So at the time, we had been in talks with the Estee Lauder company to do a fragrance. The first license he ever did or the Estee Lauder company ever did was with us. And when we took that back to Wall Street, they said, wow, this is incredible. How much money did that licensing make? Hundreds of millions of dollars over time. Wow. How is that deal structured? It's a license. So we would license our name to Estee Lauder and they would pay us a royalty.

17:39and they would invest in the advertising. So the investment in an advertisement for, say, a beauty company or a luxury fragrance company is really big. And we use that advertising worldwide to promote the name. So we opened territories that weren't originally with our strategy, like France, Germany, Holland, England, because we were just tiptoeing into Europe with a couple of shops here and a couple of shops there. But Estee Lauder had the wherewithal to advertise and promote the name Tommy Hilfiger all over the world. So Wall Street liked that. And we started going on a roadshow. So we went out to all the investors in America and showing them the growth path and showing them our dream and showing them what we were going to do.

18:36And they bought in, they bought a lot of stock, and our stock became epic. It became one of the most sought-after stocks in the 90s. And that was really the unlock of fashion companies then going public. What do you think were some of the best business moves that you made during your career with Tommy Hilfiger? One was international expansion because you'd think that a lot of countries and a lot of people in different territories would not really embrace the American look because you think, okay, France, for instance, is one of the fashion capitals of the world. Paris is really the fashion capital of the world.

19:20You'd think the French are not going to embrace an American brand. They have so many incredible brands. Italy, with everyone from Armani to Dolce & Gabbana, would never embrace an American brand. But we found that people loved American sportswear casual wear all over, from Tokyo to Rio to Shanghai to New Delhi. And the business started to explode as a result of international expansion. Something I also have always thought about Tommy Hilfiger is I remember going to, I think it was Macy's, and I would see your big billboard displays. I think it was the Gigi Hadid collab. And I always was like, oh my God, I want to look like her.

20:00I need this. This is so cute. Throughout the entire lifespan of the brand, you guys have been so strategic. You did the collab with Sophia Richie, all of these people. How did you basically become an early OG at influencer marketing? And how do you guys select these people to champion your brand? I'll go back to the 80s. Okay, we did the billboard. and we ran out of money because the billboard was expensive. We also put it in some magazines and put it on some phone kiosks, but we ran out of money for advertising. So I thought, you know, if we would dress musicians, their fans would also come to us, and we started dressing people like Britney Spears, Lenny Kravitz, Jewel.

20:46How do you get in contact with them? My brother is a musician, and he was in and around all the music studios in Manhattan, and he would introduce me to all these people. So we started dressing a lot of these people, giving them free clothes. And then we decided to sponsor concerts. So we sponsored the Lenny Kravitz concert, the Jewel concert, Sheryl Crow, the Rolling Stones. Then Aaliyah was brought to us by Kadada Jones, Quincy Jones' daughter. She was working for me as a stylist. She said, you have to meet this new musician. Aaliyah is going to be the next big female hip-hop artist. Incredibly talented.

21:29Really, really sweet. So we weren't really in women's wear in a big way, but we took the men's wear and dressed her in the men's wear. And we took men's T-shirts and made her bandos. We put her in men's underwear. We put her in men's jeans. We put her in men's jackets. And we did a campaign with Aaliyah and Mark Ronson. Then we added Kate Hudson and a couple of other unknowns. And then we did Sons and Daughters of Well-Known Athletes and Musicians. And that really started lighting us up. All the magazines were only using models, never any celebrities. But as the 90s progressed, all of the magazines converted to using celebrities on the covers of the magazines as they do now.

22:21But I think we were one of the first to embrace celebrities in advertising and marketing. And then how did that translate to today? Well, I believe in fames, fashion, art, music, entertainment, and sports. We always thought that having influencers and cool people into the brand, into our family, enhances the image of the brand, also reaches their fans. And I remember when we were casting Gigi, we decided that we would collaborate with her and we would actually have her co-design with us. whereas all the other companies were hiring celebrities as the face of the brand but they would never say what would you like to wear or what would you like to co-design so Gigi was in our design room picking the thread picking the buttons picking the colors and we surrounded her with all of our artists sketching her ideas showing her different fabrics showing her what could be manufactured what couldn't be manufactured and she came to us with this southern california cool vibe and product love that she had so we did the gg tommy collection we put it on the runway it was a huge success it was one of the biggest moments 2016 and then we converted the whole process of fashion shows.

23:50We decided that people would go to a fashion show and see the clothes and not be able to buy them for six months or eight months later. So we decided to create a click and buy opportunity for people to see the clothes on the runway, choose what they wanted, have it delivered the next day. And it was a game changer. And then we did Zendaya and then Lewis Hamilton and recently a collaboration with Sophia Ritchie. As a result of us doing collaborations, I think a lot of other people then developed and went into collaborations. Do you have a favorite talent that you've worked with? Well, Gigi was undoubtedly one of the favorites.

24:32Zendaya, Lewis Hamilton. I mean, Shawn Mendes was great. I went on tour with him in Europe. Oh, that's fun. I'm telling you, people were crazy with him. And he was just like humble and sweet and nice and hardly noticed it. Sponsoring the Rolling Stones tour was a highlight for me because I'm such a fan of the band. Come 2010, when you guys decide to sell the brand to do like major distribution and you say as a creative partner, what does that process look like and how does that feel as an entrepreneur? They're selling the brand and saying goodbye. Yeah. And then they're selling the brand and remaining on.

25:10Now, as a result of remaining on, I had way fewer headaches because I didn't have to really focus on all of the ins and outs of the business and the business became so large at that point dealing with being business meetings more than half the day became monotonous. What are you manifesting right now Tommy where you're like okay this is what's going to be five years from now. I never want to put a limit on it because I think that if you put a limit on it, then you have limitations. I like to think that it's going to be incredibly powerful and successful in the future. Which of the categories are you most passionate about right now?

25:51Menswear and women's wear. Menswear is becoming more sophisticated, more dressed up, but still casual. And if you think of the coolest guys you know, they're dressing up a little bit more, but there's a dress casual component to it. and women's wear is open territory the sky is the limit women love clothes and they want something that fits well and they want something that is going to be uh affordable because some of the pricing with the luxury brands has gone out of this world yeah smart people don't want to pay those prices so it's a sweet spot for us in a great growth area

26:44obviously you've been really early at identifying all these different opportunities in your business especially with the rise of ai and all these new technologies how do you view the fashion landscape evolving and are there any opportunities that you think should be good for young people to know about? Well, I think AI is going to be the game changer. AI will change a lot. And I don't even know how exactly, but I know in my mind how I would like to see it change our business. How would you like to see it change your guys' business? Well, design, fashion shows, advertising, and then logistics. I just think that it will be very helpful.

27:24I think there are dangers with it. And I certainly hope AI changes the dynamic of the medical field because that's maybe more important than anything else. I really believe that a lot of fashion companies are thinking about it, but they're afraid to take that step. I personally do not have fear because I think that if you live with fear, it sets you back. And I think too many people live with fear of doing something different and new and therefore fail. My focus is keeping our brand relevant. That's all I think about every day. How do we stay relevant? How do we do something new? What's next? And where's that North Star going?

28:09And how does that translate for you in terms of for young people starting out in their career? What are kind of your best pieces of advice that you would give them? Pick a lane. Be very prepared to work really, really hard. Stay focused. Stay consistent. but never give up. And never give up is sort of like the big one. For manifestation, I know we briefly touched on that, but also for young people who have a dream, like how do you suggest going about visualizing it and making that dream a reality the way that you did? Well, I have maybe a photogenic memory. So if I see something I like, it gets filed.

28:50and then at times I'll bring it up again. I may have seen a photograph of the Wild West and I think wouldn't it be cool to do a jeans campaign in Montana or somewhere and then bing it comes up. It's not really hard to do that. I think that if you see something you like you remember it. Yeah. Right? And you just access it when you need it and I think that that's part of the manifestation of picturing it. You have to have seen something that has some relationship to what you are planning for. I want to walk through what is your creative process? The team comes to you, it's a new season, you're making a new collection.

29:36I talk to them early on about what the theme will be. What are we thinking about? And then they'll show me mood boards and I'll say, well, I like this, I don't like that. Why don't we change this? And why don't we put A with D, eliminate B and C, combine the two? And then I continually send them images, photographs and images of what I like, whether I photograph somebody on the street or take something from Instagram, see someone wearing something. I'll continually feed them with ideas. and we were just in Florence at what they call Pittiwomo, it's a global menswear show with all the brands, all the menswear brands showing their clothes.