Tommy Hilfiger Corporation and Karl Lagerfeld announced today that Tommy Hilfiger Corporation will acquire the Karl Lagerfeld trademarks, which include Lagerfeld Gallery, the women's luxury ready-to-wear collection, Lagerfeld, licensed women's, men's and an accessories lines and two Lagerfeld Gallery boutiques in Paris and Monaco, for an undisclosed cash amount. A five-year contract has also been signed which will allow Lagerfeld to continue to design and provide creative direction for his brands. The contract reportedly includes automatic three-year renewals. The acquisition does not include the designer's agreements with Chanel and Fendi. The acquisition is expected to be completed before the end of January 2005.

Global expansion is the main objective for Lagerfeld and his new parent company. Tommy Hilfiger Corp. plans to expand the distribution of Lagerfeld's women's and men's collections geographically, open retail stores worldwide and add apparel and accessories categories.

The Lagerfeld business will remain based in Paris however will reportedly be run by Tommy Hilfiger Corp.'s president of new business development. The Hilfiger firm is also planning to open a New York showroom for the Lagerfeld brands.

"This acquisition is an important first step in our long-term strategy of building a multi-brand portfolio of businesses," stated David Dyer, chief executive officer of Tommy Hilfiger Corporation in press release. "The Karl Lagerfeld name has tremendous cachet. We believe this opportunity will provide an exciting new growth platform with the upscale apparel segment and complement our existing business."