"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.