Apax ditches Tommy Hilfiger float scheme

Private equity firm Apax has halted plans for a US$4billion (£2 million) float of the US designer brand Tommy Hilfiger this week.

Apax blamed the credit crunch and volatile financial markets for its decision to halt an initial public offering on the Amsterdam Euronext exchange this year.

The companies issued a joint statement this week saying that although an IPO was a logical step for Tommy Hilfiger, which has its head office in Amsterdam, turmoil in the markets prevented the move.

The statement said that Tommy Hilfiger was "a very strong business that has been performing well in all geographical markets and product divisions over the past two years, including during recent months of economic uncertainty".

It added: "An initial public offering has always been recognised as a logical step. Investor feedback has been positive. However, considering recent volatile market conditions, management and shareholders have decided to postpone an IPO process until such time that market conditions have stabilised."

Apax bought Tommy Hilfiger for US$1.6bn (£800m) in 2005 after sales at the brand dropped dramatically.

Since then, Tommy Hilfiger has attempted to become more European-focused and has moved upmarket under chief executive Fred Gehring. Its European sales are estimated to have doubled to £400m since 2003.

The decision not to float sparked speculation that other high-profile designer brands including Prada, which is planning a listing in Milan, could rethink their plans to go public.

Last month, Tommy Hilfiger announced plans to acquire majority control of its Japanese licence partner from the Itochu Corporation. Tommy Hilfiger Japan Corporation has 105 standalone stores and 60 department store concessions in Japan. It has net sales of around ¥15.1 billion (£71m).