Tommy Hilfiger is convinced that reinvention through new media and music is the way forward in the fashion industry.

Launching an online music channel in London, in partnership with SonyBMG, the street-fashion entrepreneur has promised to transform the brand he founded, which has lost sales to fashion labels such as Abercrombie & Fitch.

Mr Hilfiger told The Times: “Luxury brands with very high price points are starting to feel the pressure. People are not buying $2,000 (£1,013) handbags, but they are certainly buying affordable, wearable clothes.”

He gave warning that the credit crunch was hitting high-end brands but said that a £2 billion flotation of his empire, shelved during recent market uncertainty, would be revived.

Apax bought the Tommy Hilfiger brand, famous for its “preppie” look, for £1.6 billion in 2005. A planned flotation in January was postponed when equity markets dried up.

Mr Hilfiger said that interest in the initial public offering (IPO) remained strong, but that the company would concentrate on expansion plans, opening 50 more outlets, before returning to the market.

Mr Hilfiger, 57, remains the principal designer and a shareholder in the business, which is seeking to regain its cutting edge. Europe is the new focus after the brand had become overexposed in the United States.

Tommy TV, an online music channel, will offer exclusive concerts, called The Hilfiger Sessions, featuring stars such as Wyclef Jean and Beyoncé. Jean will appear at the first Hilfiger concert in London next month.

Young musicians, who upload their tracks to the site, will be chosen to join the stars. SonyBMG hopes that the initiative will uncover new talent that it can sign.

Mr Hilfiger said: “Fashion brands have to reinvent themselves, just like Madonna does. We felt it would be most appropriate to connect Hilfiger to new media and to the brand’s heritage with music.”

Hilfiger has clothed stars including Beyoncé, the Rolling Stones and Britney Spears, since the New York designer founded the company in 1984.

Mr Hilfiger has no plans to quit. He said: “I plan to be there for ever. I look at Giorgio Armani, Ralph Lauren and Karl Lagerfeld and those guys are ten to 15 years older but still going strong.”

Maarten Steinkamp, the chief executive of SonyBMG Europe, said that the Hilfiger partnership would help to offset the decline of CD sales.

He said: “File-sharing is here to stay and the fall in physical sales will continue. Branded entertainment, like X Factor and Tommy TV, allows us to uncover new talent and bring to it the marketing and distribution power where we remain strong.”

The Hilfiger empire stretches from its famous menswear that features baggy jeans and sweatshirts to fragrances and home furnishings.

The IPO was shelved in January after Apax, the London private equity group, blamed “recent volatile market conditions”. Mr Hilfiger said: “There was lots of interest and the IPO is still on the table but there is no hurry.”

The credit crunch is having a marked effect on fashion brands. Coach, the largest US maker of luxury handbags, reported its weakest profits growth for eight years.

Richemont, home to the Cartier and Montblanc brands, said that demand was slowing, and Burberry, the British label, said that it might miss profit targets after poor sales in Spain.

However, Mr Hilfiger said: “Our business has not been negatively affected by what is going on in the economy. We keep on growing. We have just signed a lease on a new Fifth Avenue store in New York.”

He acknowledged that the brand had room to improve in Britain. He said: “Our business is smaller in the UK than other European countries. We are strong in Spain and Germany.” European sales stood at about £400 million last year.

Ambassadors for the Hilfiger brand, which opened its first UK store in London in 1999, have included Lauren Bush, a model and niece of the American President. The range appeals to “middle youth” purchasers aged 40 and older, so Mr Hilfiger is talking up its rebellious roots to attract younger shoppers.

He said: “I wanted to dress like Mick Jagger, Pete Townshend or Jimmy Page but where I grew up it was impossible to find those outfits. That’s why I started designing clothing inspired by these musicians.

“The best artists have changed their music and image to keep on top. It’s important to know how to constantly reinvent yourself.”

Tommy TV will not link directly to purchase opportunities. Rather, it has been designed to create an “emotional engagement” with the brand among music fans.

Tommy Hilfiger CV

— Born March 24, 1951, in Elmira, New York

— Aged 18, buys jeans in New York and resells them in a local store

— Founds Tommy Hilfiger Corporation in 1984

— Takes company public in 1992

— Apax buys Hilfiger in 2005 for $1.6 billion