Tommy Hilfiger Big Winner in Macy's Deal

Implications: The only clear winner in this deal is Tommy Hilfiger which gets high profile exposure in 850 Macy’s stores and keeps its lucrative, free standing stores, online sales, and licensees business. Here's why.

Analysis: You have to give Macy’s credit for wanting to get an exclusive on designer apparel brands. But if the Tommy Hilfiger deal doesn’t bring more exclusive deals to Macy’s, it might not be worth the amount of space devoted to it.

Let’s face it Tommy Hilfiger isn’t the growth brand it used to be. Even Lungren admits the brand has had it ups and downs commenting in the New York Times “Tommy is very significant brand. [B]ut, Hilfiger has lost ground over recent years, going from preppy to urban and back again.” Such ups and downs is one reason why the brand has lost both position and space in many department stores.

Just what this deal means in terms of sales isn’t clear. If Macy’s devotes more space to Hilfiger, it may cause other, more profitable brands to lose sales. A case can be made that Macy’s will get a larger piece of a declining brands market share, a strategy that has proven to be a recipe for disaster.

The only clear winner in this deal is Tommy Hilfiger which gets high profile exposure in 850 Macy’s stores and keeps its lucrative free standing stores, online sales, and licensees business.