TOMMY HILFIGER CORPORATION TO ACQUIRE KARL LAGERFELD TRADEMARKS AND BUSINESS

NEW YORK and PARIS, December 13, 2004 – Tommy Hilfiger Corporation (NYSE:TOM) and Karl Lagerfeld today announced an agreement under which Tommy Hilfiger Corporation will acquire the trademarks of Karl Lagerfeld for an undisclosed cash amount.  The transaction includes Lagerfeld Galleries and other Lagerfeld collections.  In connection with the transaction, the parties have also entered into a long-term contract with Mr. Lagerfeld to continue to design and provide creative direction for Mr. Lagerfeld’s brands.  The acquisition does not include Mr. Lagerfeld’s agreements with Chanel and Fendi.

Tommy Hilfiger Corporation and Mr. Lagerfeld plan to build Mr. Lagerfeld’s brands on a worldwide basis.  Their union is expected to draw upon the reputation of Mr. Lagerfeld as one of the world’s most successful and visible fashion designers, and the experience and global infrastructure of Tommy Hilfiger Corporation.  Mr. Lagerfeld’s collections are currently in a start-up phase, and consist of a women’s and a licensed men’s collection. They are distributed within select European and Asian markets.  
 
As part of the global expansion plan, Mr. Lagerfeld’s brands will be developed within the U.S., particularly through the upscale department and specialty store channels.  The goal is also to expand the distribution of Mr. Lagerfeld’s women’s and men’s collections geographically, and pursue opportunities for growth across multiple categories.  

David Dyer, President and Chief Executive Officer of Tommy Hilfiger Corporation, stated, “ This acquisition is an important first step in our long-term strategy of building a multi-brand portfolio of businesses.  The Karl Lagerfeld name has tremendous cachet.  We believe this opportunity will provide an exciting, new growth platform within the upscale apparel segment and complement our existing business.  Since the Lagerfeld business is currently in its start-up phase, we expect that the acquisition will be somewhat dilutive to the Company’s near-term results.  However, we see Mr. Lagerfeld’s brands as contributing significantly to revenue and earnings over the long term.”    

Tommy Hilfiger, Honorary Chairman and Principal Designer, added, “Karl is a true inspiration.  Designing for the world’s most prestigious collections, he has continuously set the benchmark for style, creativity and sophistication.  Karl will continue to have autonomy in executing his vision on a global scale, while benefiting from a supportive partner.  We look forward to the many opportunities ahead.”
 
Mr. Lagerfeld noted, “In choosing a partner to expand my business, I was looking for a company that has built a business on a global basis, and possesses the infrastructure and resources to make our vision for the Lagerfeld brand become a reality.  I have been impressed with David, Tommy and their team, and I look forward to working together on exciting new initiatives.”

Subject to customary closing conditions, the acquisition is expected to be completed within the next 30 days.

Tommy Hilfiger Corporation, through its subsidiaries, designs, sources and markets men’s and women’s sportswear, jeanswear and childrenswear under the Tommy Hilfiger trademarks.  Through a range of strategic licensing agreements, the Company also offers a broad array of related apparel, accessories, footwear, fragrance and home furnishings.  The Company’s products can be found in leading department and specialty stores throughout the United States, Canada, Europe, Mexico, Central and South America, Japan, Hong Kong, Australia and other countries in the Far East, as well as the Company’s own network of outlet and specialty stores in the United States, Canada and Europe.
Karl Lagerfeld’s business consists of the Lagerfeld Gallery, the women’s luxury ready-to-wear collection, Lagerfeld, the licensed business for men’s and women's and related accessories, as well as boutiques on the Left Bank in Paris and one in Monaco.  Mr. Lagerfeld is one of the most accomplished fashion designers in the world, and his work includes long-standing collaborations with Fendi and Chanel.  In addition, Mr. Lagerfeld recently designed a one time collection for H&M under the “Karl Lagerfeld for H&M” label.  Mr. Lagerfeld also oversees a publishing venture, Editions 7L, and a bookshop, 7L.  He is also an accomplished and well recognized photographer.