Tommy Hilfiger to Sell Exclusively at Macy’s

Designer Tommy Hilfiger and Macy’s have partnered in a deal in which the designer will agree to sell his biggest clothing lines only at Macy’s.

The deal has ramifications that could shake the department store industry, and is a vindication of sorts for Macy’s, a company which said, following its rough merger with May Department Stores in 2005, that the merger would give it leverage to ink many such deals, writes The New York Times.

Beginning in 2008, Hilfiger will no longer sell his men’s and women’s sportswear lines at competitor stores like Dillards. The company will still sell its entire line at its own branded stores, and competitors will be able to carry licensed products like fragrances and shoes.

The agreement poses the greatest risk for Tommy Hilfiger, which is betting its signature brand on the success of Macy’s. The men’s and women’s sportswear lines combined are estimated to have annual sales of around $200 million.

One benefit of the merger of Mays and Macy’s was the scale, which could potentially give Macy’s the ability to persuade manufacturers to sell products exclusively at Macy’s. So far, the company has snared a home decor line from Martha Stewart - which Macy’s is considering a major success, with sales exceeding expectations - and small clothing lines from Elie Tahari and Oscar de la Renta. The de la Renta line has not sold well.

Terry J. Lundgren, chief executive of Macy’s, says he is working on several additional exclusive agreements.