Hilfiger and a business partner have signed a contract to pay USD170 million for the Clock Tower office building near Madison Square Park, planning to convert it into a luxury hotel that will cater to a young, affluent crowd. Hilfiger’s former company that is now part of Phillips-Van Heusen Corp isn’t involved in the hotel project.
The project is one of many new hotels under way as the city’s lodging industry recovers from the economic downturn with rebounding room rates and lower vacancies. Other big fashion names also have expanded into the hotel world. Versace has hotels in Australia and Dubai, and Armani also has hotels.
Some American apparel companies have also explored the concept, says Bjorn Hanson, dean of New York University’s Preston Robert Tisch Center for Hospitality, Tourism and Sports Management. Richard Branson’s newly formed Virgin Hotels is also looking actively in Manhattan for a hotel. “There are natural affinities between lifestyle hotels and fashion brands,” Hanson says. While office conversions often lead to unorthodox floor plans, he added, that can work to a boutique hotel’s advantage because “unusually configured rooms, if packaged right, can be very successful.”
Hilfiger, who is still a principal designer for the fashion company he founded, has been looking to launch a hotel for some time, say people familiar with the matter. Earlier this year, he and real-estate investor JSR Capital put in a bid of about $110 million for eight floors at the former New York Times building on West 43rd Street to create a hotel there. But Hilfiger and JSR Capital later changed their mind.
The duo also looked at the Hotel Chelsea, which its owners put up for sale last year, but didn’t make a formal bid. Instead, they have agreed to buy the Clock Tower building, which was sold by Africa Israel USA. Hilfiger may also convert a portion of the building into condos.
