Tommy Hilfiger Announces Record Results for the Financial Year Ended 31 March 2008

AMSTERDAM, Netherlands, June 23 /Xinhua-PRNewswire/ --

Financial Highlights[1]

- Total Group net sales increased 14.4% to EUR1,340 million

- Global retail value of net sales of EUR 3 billion

- European sales up 22.8% to EUR707 million with an increase

in EBITDA margin to 26.0% (FY07: 25.4%)

- North American sales of $836 million up 2.5% with EBITDA

margin at 14.2% (FY07: 13.4%)

- EBITDA grew 23.9% to EUR268 million

- EBITDA margin increase of 160 basis points to 20.0% of sales

Operational Highlights

- 140 new freestanding store openings, taking the global store

portfolio to 796

- Entered into a strategic alliance with Macy's, one of the

United States' premier department stores, due to commence in Fall 2008

- Acquired former licensees Tommy Hilfiger Japan and Tommy

Hilfiger Europe Footwear

- Signed lease for global flagship store on Fifth Avenue in

New York City

Commenting on the results Fred Gehring, Chief Executive Officer, said:

"We are extremely proud of these record financials. For many years now our international business outside of the US has delivered consistent growth at a premium position. We are especially pleased as well that the initiatives we have undertaken in the past two years to elevate and reposition the brand in the US have delivered such strong results. Not only does our global forward order book show a double digit increase for the fall of '08, our US business at our retail stores and at Macy's has performed exceptionally well throughout the year and in the currently challenging economic environment. We believe that the Group is now perfectly aligned globally and is strongly positioned for continued global expansion."

Notes to Editors

Tommy Hilfiger is one of the world's most recognized premium lifestyle brands and one of the largest designer apparel brands globally. For over twenty years, Tommy Hilfiger has offered consumers around the world a range of high quality product lines including men's, women's and children's casual apparel, sportswear, denim, and a range of licensed products such as accessories, fragrances and home furnishings. Tommy Hilfiger has been built upon a powerful design philosophy - Classic American Cool - which brings a fresh perspective to traditional, all-American styling by giving time-honored classics an updated look for today. Distributed in over 65 countries, the Company's products can be found in its network of nearly 800 dedicated retail stores, as well as in leading specialty and department stores around the world. The brand is supported by approximately 8,000 employees from around the world who share the Tommy Hilfiger values: those of quality, respect, entrepreneurship, optimism and the spirit of youth.

Operational Review

Europe

Throughout Europe, both our wholesale and retail businesses continued to show strong double-digit growth with further improved gross margins.

In Europe, wholesale revenue increased by 22.4% due to a strong performance from all divisions and countries and the September 2007 acquisition of the Group's former footwear licensee, Tommy Hilfiger Footwear, which accounted for 8.2% points of the growth.

Retail revenue increased by 26.4%, mainly due to new and refurbished stores. The like-for-like growth was 3.8%.

Gross margins in both channels were stronger by 120 basis points compared to the year ended 31 March 2007, largely caused by higher price points and improved sourcing.

U.S.

In the U.S., our initiatives to reposition the brand by trading up have paid off substantially. After a number of years of decline, the U.S. business has started to contribute to the overall growth of the group (4.9% for FY08 versus FY07 for retail and wholesale combined).

Retail net revenue for the U.S segment was driven by comp growth of 6.7% for the year, and an improved gross margin of 260 basis points. In addition the group opened 13 new stores. The specialty stores showed significantly higher sales and gross margins compared to FY07.

Total U.S. wholesale net revenue decreased 11.4 % following planned declines in discontinued product lines, wholesale customer orders and doors and reduced clearance sales. This was partially offset by increases in sales at better margins to Macy's, where business has performed very well with double digit comp sales year on year. Accordingly, the wholesale gross margin improved by 480 basis points. Licensing net revenue decreased as underperforming licensees were discontinued during the period.

Canada

In Canada, total revenue decreased by 2.1%, which was a mix of solid growth in retail and a decline in wholesale due to a planned reduction of doors. This resulted in an overall increase in gross margin of 250 basis points.

Rest of World/Other

In the Rest of the World all businesses have shown double digit growth, with particularly strong performances in Japan, Korea and Latin and South America, which increased the licensing revenue.

Store Portfolio

There are nearly 800 Tommy Hilfiger stores around the world, of which approximately 50% are operated by the Company with the balance operated by franchisees, distributors or licensees. During the fiscal year ended March 31, 2008, 140 new stores were opened, 42 of which are Company owned.

Current Trading and Outlook

The European forward order book for wholesale continues to show a double digit increase for Fall 2008 whereas retail comparable results on a pan European basis are up mid single digit on a comparative basis versus the previous year for the Spring '08 season to date. Most notably we have seen the brand perform very well in the U.S. in a difficult economic environment. For the Spring '08 season, comparable sales were up by high single digits for our retail business (period February 1, 2008 through May 31, 2008) whereas our business at Macy's has experienced double digit growth on a comparable basis for the same period.

FINANCIAL REVIEW (on a comparable basis)

EUR'000 FY08 FY07 % change at

comparable

actual comparable rates

Sales 1,340 1,172 14.4%

Gross margin 797 664 20.1%

(59.5%) (56.7%)

EBITDA 268 216 23.9%

BY REGION

FY08 EUR'000 Europe US Canada RoW/Other Total

Sales 707 454 136 43 1,340

Cost of sales (268) (208) (61) (6) (543)

Gross margin 439 246 75 37 797

SG&A (256) (181) (56) (37) (530)

EBITDA 184 65 19 - 268

FY07 EUR'000 Europe US Canada RoW/Other Total

Sales 575 437 139 21 1,172

Cost of sales (224) (217) (66) (1) (508)

Gross margin 351 220 73 20 664

SG&A (206) (162) (53) (27) (448)

EBITDA 146 57 20 (7) 216

Note on the Accounts

The figures included in this report are prepared under the Company's accounting standards, which are based on IFRS. The FY08 figures are derived from our consolidated financial statements for the year ended 31 March 2008. The FY07 comparative figures were derived from pro-forma combined financial information for the year ended 31 March 2007. Totals may deviate from the sum of the individual inputs due to rounding.

Warning about Forward Looking Statements

Some statements in this document are forward-looking statements. These forward-looking statements are based on current expectations, estimates, forecasts and projections and our beliefs and assumptions about future events. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. These forward-looking statements involve known and unknown risks, uncertainties and other factors that are outside of our control and impossible to predict and may cause actual results to differ materially from any future results expressed or implied.

About the Tommy Hilfiger Group

With a premium lifestyle brand portfolio that includes Tommy Hilfiger, Hilfiger Denim and Karl Lagerfeld, The Tommy Hilfiger Group of Companies is one of the world's most recognized designer apparel groups globally. The Group's focus is designing and marketing high-quality menswear, womenswear, children's apparel and denim collections. Through select licensees, the Group offers complementary lifestyle products such as accessories, fragrances and home furnishings. Tommy Hilfiger Group merchandise is available to consumers worldwide through an extensive network of dedicated retail stores, leading specialty and department stores and other carefully controlled distribution channels. For additional information about the Tommy Hilfiger Group of Companies, please visit http://www.tommy.com

[1] On a comparable basis, which is based on an ongoing scope, constant exchange rate and excluding exceptional items. FY07 has been presented on a pro-forma 12 month basis.