Today, iconic fashion designer Tommy Hilfiger is the founder and lead designer of his eponymous clothing company, which does about $6.5 billion in annual sales.
But when he was in his early 20s, he was an aspiring entrepreneur struggling to break even and had to file for bankruptcy.
Hilfiger tells CNBC the early financial struggles served as his real-life MBA.
"I was bankrupt when I was under 25 years old. I was in my mid-20s with my first business," Hilfiger says.
"That was the best learning experience I ever had," he says. "It was my MBA."
When Hilfiger was a teenager living in Elmira, New York, he opened a local clothing store called People's Place in 1969 with $150, which he writes about in his new memoir "American Dreamer: My Life in Fashion & Business."
Business was booming, and Hilfiger decided to forego college and start opening new stores across the state.
But soon after, Hilfiger's accountant told him that the company had run out of money and that he needed to file for Chapter 11 bankruptcy.
It was a turning point that forced Hilfiger to get serious about business.
"Some people learn a lesson and then make the same mistake again," he says. "I tried very hard not to make the same mistake twice."
The near crisis taught him an important lesson about money: You have to know your company's numbers inside and out.
That was the best learning experience I ever had.Tommy Hilfigerfounder and principal designer of The Tommy Hilfiger Group
"I taught myself how to avoid the pitfalls and the mistakes I had made early on," Hilfiger says. "I paid attention to the business part of the business."
The scary experience only made Hilfiger that much more determined to succeed.
In the years following the bankruptcy, Hilfiger re-built his business model. He went on to launch the Tommy Hilfiger brand in 1985. He relentlessly pursued major retailers like Macy's, Saks Fifth Avenue and Bloomingdale's until the retailers finally bought shipments.
Hilfiger's fashion empire now spans 115 countries and more than 1,600 stores, and he has worked with celebrities like Britney Spears and Beyonce.