COTY, PUIG TEAM UP IN U.S./2 GAP CONTINUES TO STRUGGLE/2 Women’sWWD Wear Daily • The Retailers’ FRIDAYDaily Newspaper • February 24, 2006 • $2.00 Beauty Forward March MILAN — For fall, Domenico Dolce and Stefano Gabbana were inspired by Napoleon, and they brought his image to full fl ower in a Dolce & Gabbana collection full of fabulous-looking coats and military looks. Here, one of the designers’ numbers with enough brass buttons to delight the members of any regiment. For more on the shows, see pages 4 to 7. Strategy for Jil Sander: Buyer to Grow Brand, Sell It in 3 to 5 Years By Miles Socha MILAN — Powered by the design talent of Raf Simons and its current management team, the new owners of Jil Sander plan to launch the company into an expansion mode. Confirming an exclusive report in WWD Thursday, Change Capital Partners said it had acquired Sander from Prada Group for an undisclosed sum. The new owners have immediate plans to open three boutiques in Japan, find a replacement unit in London and bump up Sander’s U.S. business. The London-based private equity fund, which is headed by Carrefour See Buyer, Page9 PHOTO BY GIOVANNI GIANNONI GIOVANNI PHOTO BY 2 WWD, FRIDAY, FEBRUARY 24, 2006 WWD.COM Puig, Coty Sign Scent Deal the selling and provide back-of- million at wholesale in the U.S. WWDFRIDAY By Pete Born fi ce and logistics support, accord- with those brands. Beauty NEW YORK — The consolidation- ing to the companies. After the In a telephone interview driven realignment of the U.S. transition, Puig will maintain a from Barcelona, Marc Puig, fragrance industry has produced marketing squad housed in Coty chief executive offi cer of Puig MILAN COLLECTIONS more tremors with a distribution headquarters. Beauty & Fashion Group, said Dolce & Gabbana, Fendi and Burberry Prorsum were among the high- deal between Puig USA and the The deal will hand fi ve well- the ongoing consolidation of de- 4 lights as fashion week in Milan rolled on. Coty Prestige division of Coty Inc. established fashion and lifestyle partment stores convinced him As of July 1, Coty will become brands to Coty. These include that the way to make headway in the distributor of Puig’s five Prada, which is a venture be- the U.S. was to strike a strate- GENERAL main fragrance brands in the tween Puig and the Milan fash- gic alliance. Both he and Bernd Powered by the design talent of Raf Simons and its current management, U.S. prestige market. ion house; Carolina Herrera, Beetz, ceo of Coty Inc., described 1 the new owners of Jil Sander plan to launch the fi rm into expansion. The deal does not affect the with its six fragrance lines; Paco the resultant arrangement as a Gap Inc. on Thursday reported declines in fourth-quarter and year-end Barcelona-based firm’s mass Rabanne; Nina Ricci, and a li- “win-win” combination. sales, margins, earnings and traffi c. business, Puig Fragrance & censing agreement with Comme Puig said Coty has achieved 2 Personal Care USA, or any of des Garçons. the number-one ranking on Limited Brands Inc. said it is forging ahead with plans to keep improving the other markets in the rest of Puig does not break out sales, women’s fragrance bars in U.S. 11 sales and profi ts. the world. but industry sources estimate department stores. The addition A sharper focus on inventory management, merchandising and market- Under the terms, Coty will do that Puig does more than $50 Continued on page 13 11 ing helped Kohl’s post a 17.6 percent profi t gain in the fourth quarter. Continuing demand for luxury helped Nordstom post a 36 percent rise in 11 fourth-quarter earnings. MEDIA: This fall, Majed Al-Sabah will launch his own magazine, to be Gap Net Falls in 4th Quarter 18 called Alef: A New Language of Beauty. By David Moin fi rst half and turn “modestly positive” in the second BEAUTY half. Fiscal year earnings are projected at $1.23 to The realignment of the U.S. fragrance industry has produced more tremors NEW YORK — Gap Inc. is still far from recovery. $1.27 per share, including options expensing, which 2 with a deal between Puig USA and the Coty Prestige division of Coty Inc. On Thursday, the struggling retailer reported de- the fi rm sees amounting to about 3 cents per share. Racing’s popularity has spawned a Daytona 500 scent. Driver Jeff Gordon clines in fourth-quarter and year-end sales, mar- After repurchasing 98.5 million shares for $2 bil- gins, earnings and traffi c. lion during the year, the company ended the fourth 16 discusses his role with Elizabeth Arden, the race and his philanthropic efforts. Net earnings for the fourth quarter were down quarter with $3 billion in cash and short-term in- 10.8 percent to $337 million, or 39 cents per share vestments. The company expects to generate at least on a diluted basis, compared with $378 million, or $900 million in free cash fl ow for fi scal year 2006. 40 cents per share, for the same period last year. The company also announced an additional Classifi ed Advertisements.............................................................23 Fiscal year 2005 earnings per share were $1.24, up $500 million for its share repurchase program and To e-mail reporters and editors at WWD, the address is fi rstname. from $1.21 in 2004. expects to increase the annual dividend per share [email protected], using the individual’s name. Net sales of $4.8 billion for the fourth quar- from 18 cents in fi scal year 2005 to 32 cents for fi s- ter ended Jan. 28 decreased 2 percent compared cal year 2006. WOMEN’S WEAR DAILY IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLICATIONS, INC. COPY- RIGHT ©2006 FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. with $4.9 billion for the same period last year. Product promotions and markdowns contrib- VOLUME 191, NO. 41. WWD (ISSN # 0149-5380) is published daily except Saturdays, Sundays and holidays, with one ad- Comparable-store sales decreased 6 percent, com- uted to a 260 basis point decline in gross margin ditional issue in January and November, two additional issues in March, May, June, August and December, and three ad- pared with a decrease of 3 percent for the same in 2005 to 36.6 percent. Operating margin for fi scal ditional issues in February, April, September and October by Fairchild Publications, Inc., a subsidiary of Advance Publications, Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Advance Magazine Publishers period last year. year 2005 was 10.9 percent and is seen slipping to Inc.: S.I. Newhouse Jr., Chairman; Charles H. Townsend, President & C.E.O.; John W. Bellando, Executive Vice President and For the year, Gap posted sales of $16 billion, a 2 10 percent or 10.5 percent this year. C.O.O.; Jill Bright, Executive Vice President_Human Resources; John Buese, Executive Vice President_Chief Information Officer; percent drop compared with $16.3 billion for 2004. Inventory per square foot decreased 11 percent David Orlin, Senior Vice President_Strategic Sourcing; Robert Bennis, Senior Vice President_Real Estate; Maurie Perl, Senior Vice President_Chief Communications Officer. Shared Services provided by Advance Magazine Group: Steven T. Florio, Advance Comp-store sales for the year decreased 5 percent, at the end of the fourth quarter, and will continue Magazine Group Vice Chairman; David B. Chemidlin, Senior Vice President_General Manager, Shared Services Center. compared with fl at sales last year. to decline this quarter, but at a slower rate, the Periodicals postage paid at New York, NY and at additional mailing offices. Canada Post Publications Mail Agreement No. Concerns about getting the product right and company said. 40644503. 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