Tommy Hilfiger is the king of street fashion and a multimillionaire whose associates range from Lauren Bush to Mick Jagger.

But 30-odd years in the notoriously fickle fashion industry have left him well accustomed to setbacks of the sort he experienced yesterday.

The entrepreneur was only 17 when he launched his first business, selling bell-bottom jeans, in his hometown of Elmira, New York. “I was too small to make it in football, so I thought I'd try fashion,” he once said. Mr Hilfiger used £100 of savings to buy stock, selling it initially from the back of his ageing Volkswagen before using the profits to open The People's Place.

The shop went bankrupt but, undeterred, he headed off to New York City. There a combination of canny marketing and good contacts helped him to exploit the designer jeans trend that was hot on Seventh Avenue and build a fashion empire.

By 1990 his eponymous label - famous for its baggy jeans and sweatshirts plastered with the Hilfiger red, white and blue logo - was selling an estimated $100million of clothes annually.

Ambassadors for the brand, which opened its first UK store in London in 1999, have included Lauren Bush, niece of the American President. Paris Hilton, the hotel heiress, has also sat on the front row of his catwalk shows.

But the label became over-exposed - it was sold through more than 1,500 department stores - and lost favour with its core teenage cutomer base. As competition for the urban youth market increased, Mr Hilfiger, the son of a Catholic watchmaker and one of nine children, knew drastic action was required. In 2005 the entrepreneur, whose assets include a holiday home in Mustique, agreed a $1.6billion takeover by Apax Partners in a deal that netted him £40million.

Mr Hilfiger, who is dyslexic, has in part credited this condition for his success saying that it “drove me to ... focus on my creativity”. The entrepreneur, who announced a “mutual and amicable” separation from his wife, Susie, after 20 years, in 2000, has four children.

His family have joined in his success - in 2000 one sister, Ginny, was vice-president of Tommy Jeans while another, Betsy, owned a Hilfiger store in New York. His daughter, Ally, was recently featured in the MTV reality show Rich Girls.

Today Mr Hilfiger is seeking to reposition his brand once more. His goal, he said recently, is to be “more upscale, more sophsticated”.

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