Tommy Hilfiger, one of the most iconic fashion companies, has announced its intention to close its flagship store on Fifth Avenue in Manhattan, New York.
The famous four-level store on Fifth Avenue, with an area of more than 2000 square meters. m, opened ten years ago. It was designed by renowned construction company Callison in close collaboration with the Tommy Hilfiger creative team. The reason for the closure of the store is a drop in retail sales and low profitability. For the same reason, another major Tommy Hilfiger store will close at the end of April, this time on Collin Avenue in Miami. Other Tommy Hilfiger Stores successfully operate in the outlet format, the brand's corners are located in the largest American retail chain Macy's.
As Tommy Hilfiger CEO Daniel Grieder told the Women's Wear Daily, by making these moves, the company will focus more on engaging with "digital-savvy consumers." The brand will focus on online sales as well as expanding its wholesale supply.
Despite the decline in retail sales, the company is doing well. For the 3rd quarter of 2018, its revenues exceeded 1.1 billion dollars, having increased immediately by 11%. So closing stores does not mean a problem at all, but a rethinking of the existing business model. It is expected that the main emphasis will now be placed on the youth audience, which is more inclined to shop online.
By the way, Tommy Hilfiger is not the first company to close large offline stores, more and more leaning towards the online sales model. Previously, such steps were taken by such famous brands as Abercrombie & Fitch, Lord & Taylor and Gap. However, this does not mean that the classic sales model is gradually becoming a thing of the past; on the contrary, many large brands prefer to open new stores. So, recently on the same Fifth Avenue was opened huge Nike storewith an area of 6000 sq. m.