Source Pravda.Ru

Tommy Hilfiger may sell the company, source says

Casual clothing retailer Tommy Hilfiger Corp. is planning an auction to sell the company that may lure buyers from the fashion industry and private-equity firms, a person familiar with the matter said.

Tommy Hilfiger shares surged 11 percent after the Wall Street Journal reported today that the company may be up for sale. JPMorgan Chase & Co. has been hired to advise the retailer, the person said.

Tommy Hilfiger sales have declined for three of the last four fiscal years amid falling sales at U.S. department stores including Federated Department Stores Inc. The company is trying to reduce its reliance on department stores, exited the young men's jeans business and introduced an upscale line of apparel to try to boost sales.

“The brand is struggling,” said Ben Strom, an analyst at Variant Research in Boca Raton, who rates the shares “neutral.” “It really is known over the world, but the consumer continues to get more and more choices for fashion. When you miss a few seasons and start to deviate from who you are, it can be really difficult to get back on track,” reports Bloomberg.

According to Reuters, the resolution of Tommy Hilfiger Corp.'s tax issues lifted a dark cloud that had been hovering over the company for months. Federal regulators were looking into whether the company's payments to overseas affiliates artificially lowered its tax rate. The Office of the U.S. Attorney for the Southern District of New York said it would not press criminal charges, although the company will pay $15.4 million in additional federal income taxes and $2.7 million in interest.

Tommy's shares climbed as high as $18.75, an intraday peak unseen in more than 5-1/2 years. In late afternoon trading, they were up 11.8 percent, or $1.90, at $18.01.