Tommy Bahama Group sells the island life. The company designs and markets relaxed sportswear, swimwear, and other items under the Tommy Bahama name. Tommy Bahama's Fishbone pants, Cayman Camp shirts, and other clothing are sold through specialty stores, vacation resorts, and more than 110 namesake stores, as well as through about 15 tropical-themed Tommy Bahama "retail-restaurants" in the US. Licensees have extended the Tommy Bahama brand to such items as footwear, golf bags, luggage, eyewear, home furnishings, and rum. Founded in 1992 as a maker of shirts and pants, the company, which takes its name from a made up character, has evolved into a global lifestyle brand under the ownership of
The company's full-price retail shops and outlets account for more than 50% of sales, while its Wholesale, E-commerce, and Restaurant operations account for 25%, 10%, and 10% of sales, respectively.
The company operated 157 Tommy Bahama stores globally in 2015, consisting of 101 full-price retail stores, 15 restaurant-retail locations, and 41 outlet stores. The company's 15 restaurants are generally found adjacent to Tommy Bahama full-price retail stores. The retail-restaurant locations are situated in select locations, such as Naples, Florida and New York City and are meant to immerse shoppers and diners in the Tommy Bahama "Island" experience. On the wholesale side of the business, the company distributes apparel to better department stores, such as
and other specialty stores throughout the US.
The company boasts a buying office in Hong Kong from which it manages the production and sourcing efforts for practically all Tommy Bahama-branded products. The apparel firm keeps costs in check by enlisting the help of some 150 suppliers, mostly based in China, to make its products to-order.
The US is Tommy Bahama's primary market, accounting for 95% of sales. About 3% of sales are in Canada while the remainder is rung up primarily in Australia and Asia (Hong Kong, Japan, Macau, and Singapore). California and Florida are major markets for the company, which also licenses the Tommy Bahama name for stores in the United Arab Emirates.
Sales and Marketing
Tommy Bahama uses suppliers, distribution centers, and third party distributors to deliver its goods to retail locations. As part of its marketing strategy, the company holds special event promotions as well as public relations events to build brand awareness.
Tommy Bahama's sales and operating income have been growing at a healthy clip in recent years. The retailer's sales rose by 7% to $627.5 million in fiscal 2014 thanks to additional store sales, increases in comparable stores sales, and an increase in wholesale sales, though the company did see a decline in its outlet store business.
Despite higher revenue, the retailer's operating income fell due to lower gross margins and higher selling, general, and administrative costs resulting from new store additions. Altogether, the brand accounted for 63% of its parent company's sales.
Tommy Bahama parent,
, has transformed the company from being a domestic apparel manufacturer to designing and making branded apparel that lends itself to licensing opportunities. Oxford's primary focus is to boost its full-price retail store count, increase the visibility of the Tommy Bahama brand, and reach outside North America for growth in lucrative markets.
Indeed, the company has its eye on opening up to 10 new retail locations each year. It opened its first stores in Asia in 2012 and has grown to about half a dozen locations there. Besides establishing a retail store in Macau (at the Venetian Resort and Casino), and another on Singapore's Orchard Road, a new Tokyo flagship is its crowning jewel. The Ginza district location includes a restaurant, aptly named Tommy Bahama Restaurant, Bar and Store. The company also has locations in Hong Kong and Shanghai. In 2013, the firm acquired the Tommy Bahama business in Canada from its licensee, Jaytex Group. The purchase included nine Tommy Bahama stores in Canada and a wholesale business.
Strategically, Tommy Bahama is concentrating on this revenue-generating side of its business. The retailer's full-price retail locations, which also include shops with Tommy Bahama restaurants, bring in more sales per square foot than its other formats.
Tommy Bahama typically targets a worldly, well-traveled man or woman age 35 and older who enjoys adventure and leisure. Its target audience extended to the fairer sex in 2008, when the company added women to the Tommy Bahama lifestyle brand and an e-commerce website.