Tommy Hilfiger set to stitch up a merger with J-Lo

Troubled clothing group seeks sweetheart deal with Sweetface, Jennifer Lopez's fashion range

He's the leisurewear maker for every teenager from dropouts to swots. She's the pin-up who made big bottoms a fashion item. Now they could be working in tandem.

Tommy Hilfiger, the troubled clothing group founded by the eponymous American designer, is understood to be in talks to merge with The Sweetface Fashion Company, the group founded to exploit the J-Lo fashion range, based on the style of singer and actress Jennifer Lopez.

Though neither side will discuss the speculation, Wall Street, the New York garment district and the Hong Kong fashion industry are united in believing that a deal is on the cards.

Tommy Hilfiger is in trouble. The market value of the group, which is run out of Hong Kong, has collapsed since it fell into losses as a result of problems in its US wholesaling operation. A takeover by the American Jones Apparel Group fell apart earlier this year. And to add insult to injury, the company's chief executive, Joel J Horowitz, has said that he is stepping down. Mr Hilfiger, the honorary chairman and chief designer, is finding it hard to secure a new chief that both he likes and Wall Street will take to.

Meanwhile, the group is on the hunt for a deal. Mr Horowitz admitted this earlier this month, while also admitting to a $513m (£307m) annual loss, and Mr Hilfiger said he wanted the company to be "expanding into a multi-brand, multichannel business".

Analysts say that what the group needs is a younger, fresher brand, which it can turn into the Hilfiger of this decade.

Speculation has centred on Sweetface for three reasons. First, the J-Lo brand has taken the place of Hilfiger in many of the teenage markets that Hilfiger dominated only three or four years ago.

Second, Sweetface has a chief executive who could easily step into Mr Horowitz's shoes. She is Denise Seegal, the former president of DKNY, which she sold to LVMH, and the American fashion company Liz Claiborne.

The third reason is a family connection. Sweetface is half owned by Tommy Hilfiger's brother, Alan, with the remaining shares owned by Ms Lopez.

However, analysts are worried about how much Hilfiger, which last year had sales of $1.89bn, would have to pay for Sweetface, which despite its fast growth only has a turnover of about $100m.

The need for Hilfiger to make acquisitions to revitalise the business is believed to be the reason for the collapse of the purchase by Jones Apparel and an attempt to take the group private in a leveraged buyout late last year. The talk in Hong Kong is that the Jones Apparel deal is not entirely dead. The acquisitive US group, which owns Nine West footwear and Gloria Vanderbilt jeans, recently obtained a new $700m line of credit from its banks which would fund part of a Hilfiger deal.

Wall Street is convinced that Hilfiger has to do something to sort out its problems. J-Lo would be the answer to a designer's prayer.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Recruitment Genius: Experienced Financial Advisers and Paraplanners

Negotiable: Recruitment Genius: This extremely successful and well-established...

Guru Careers: FX Trader / Risk Manager

Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

Day In a Page

Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

Something wicked?

Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
10 best sun creams for body

10 best sun creams for body

Make sure you’re protected from head to toe in the heatwave
Women's World Cup 2015: How England's semi-final success could do wonders for both sexes

There is more than a shiny trophy to be won by England’s World Cup women

The success of the decidedly non-famous females wearing the Three Lions could do wonders for a ‘man’s game’ riddled with excess, cynicism and greed
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map
Lionel, Patti, Burt and The Who rock Glasto

Lionel, Patti, Burt and The Who rock Glasto

This was the year of 24-carat Golden Oldies
Paris Fashion Week

Paris Fashion Week

Thom Browne's scarecrows offer a rare beacon in commercial offerings
A year of the caliphate:

Isis, a year of the caliphate

Who can defeat the so-called 'Islamic State' – and how?