Wild Mannered
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PLUS: Dylan ON THE CLOCK Lauren gets a ACCESSORIES: THE sweet- LATEST TRENDS FROM THE toothed BASELWORLD WATCH FAIR. wedding STYLE, PAGE ONE shower. STYLE, PAGE 8 L TAX DECISION Dolce, Gabbana Cleared by Judge By LUISA ZARGANI MILAN — Innocenti. A judge here ruled Friday that designers Domenico Dolce and Stefano Gabbana will not stand trial for alleged tax evasion. After four-and-a- ■ ■ MONDAY, APRIL 4, 2011 WOMEN’S WEAR DAILY $3.00 half hours behind closed doors evaluating evidence WWD by Milan-based prosecutor Laura Pedio and state- ments from the defendants, judge Simone Luerti on Friday dismissed the charges and deemed there was foundation for a trial. The designers’ lawyer, Massimo Dinoia, was visibly pleased and fi elded questions by a handful of journalists assembled at the Milan courthouse, but declined comment. The designers also declined comment. “There are no elements of penal relevance,” said Giuseppe Bana, lawyer for the designers’ accoun- tant, Luciano Patelli, following the preliminary court hearing. “I am very pleased with this decision and I’m not in the least surprised. The judge prevent- ed this from going too far, it’s an investigation that should never have been initiated in the fi rst place.” Luerti had the option to dismiss the case if the evidence didn’t justify moving forward. Wild The judge’s decision cleared Dolce, Gabbana, Patelli, and four others involved: Dolce’s brother and board member Alfonso Dolce, managing direc- tor and board member Cristiana Ruella, and compa- ny managers Giuseppe Minoni and Antoine Noella. None of the defendants attended the hearing, Mannered which was not open to the public or the media. A source said Dinoia, who has been repre- Their shapes may senting the designers for the past three years, be ladylike, but wrote a fi le of more than 300 pages refuting the these accessories accusations. Lawyer Alberto Simbari, who works in Dinoia’s offi ce, told WWD in February “the are anything but challenges for fraud and fi scal irregularities do demure. Fall’s not exist in fact and in law. [The designers have richly colored acted] in a legitimate and transparent manner and we reject any accusation.” furs and skins are SEE PAGE 3 the makings of one fi ercely chic IN WWD TODAY season. For more, see pages 4 and 5. All Eyes on American Apparel PAGE 2 RETAIL: With its mounting losses and debt woes, the retailer is said to be trying to line up new fi nancing without which observers say it might have to fi le Chapter 11. Hermès Eyeing Sale of Gaultier Stake PAGE 2 FASHION: The luxury goods house said it is in talks with several prospective buyers for its 45 percent holding in Jean Paul Gaultier. Marlies Dekkers’ L New Brand STYLE, PAGE 3 INNERWEAR: The Dutch designer gets set to introduce a diffusion line in July. From top: Nancy Gonzalez’s crocodile and suede bag, Adrienne Landau’s raccoon fur boa, Jimmy Choo’s mink and crocodile bag and Sergio Rossi’s calf hair and fox fur shoe. PHOTO BY ROBERT MITRA; STYLED BY SHOSHANNA FISCHHOFF 2 WWD monday, april 4, 2011 Hermès Looking to Sell Jean Paul Gaultier Stake American Apparel Facing By Miles socha Growing Financial Squeeze PaRis — hermès international and Jean apparel can win waivers for this covenant, its Paul Gaultier — unlikely bedfellows since By DaViD liPke loans will go into default, preventing the com- 1999 — moved a step closer to a full divorce pany from making any additional borrowings, Friday when hermès said it has initiated aMeRicaN aPPaRel is scrambling to and the entire debts become immediately due. discussions to sell its 45 percent stake in find new financing as it faces a severe in addition, defaulting on the Bank of Gaultier following “an expression of interest cash crunch and a looming april 30 dead- america credit agreement would trigger a from potential buyers.” line that could cut off its ability to borrow default on the lion capital loan. The identity of the suitors could not im- from banks and cover daily operating costs, “it’s a pretty meaningful date,” said lyndon mediately be learned; however, sources said which could potentially trigger a chapter 11 lea, a founding partner at lion capital, of the they would likely include beauty firms with bankruptcy filing. potential april 30 covenant breach. experience in fashion — with spain’s Puig, The company has tapped the Rothschild lea and Neil Richardson, also of lion owner of Nina Ricci and Paco Rabanne, a investment bank to shake the money tree for capital, both resigned from the american likely suspect — or an asian player keen potential investors, but so far there have been apparel board last week, which some observ- to leverage Gaultier’s Parisian cachet in no takers, according to company insiders. ers saw as an indicator that the investment fast-growing markets like china. such con- “Without an additional injection of cash, firm is losing faith in charney. however, lea tenders could include acquisition-hungry the company is done. somebody has to write countered the move was taken to prevent a Fung capital, which on Friday said it had a check,” said howard Davidowitz, chairman conflict of interest for the equity firm. acquired majority control of French shoe- of New York-based Davidowitz & associates, “as board members, we were responsible maker Robert clergerie. (see story, page 6.) a retail consulting and investing banking for a lot of different interests in terms of last year, hermès ended its seven-year design firm. “There is no way the company can con- shareholders and creditors and stakehold- collaboration with Gaultier, who was tapped in tinue in its present state.” ers. Now that we have 2004 to succeed Martin Margiela as its designer of Dov charney, chairman been talking about raising women’s ready-to-wear. The madcap couturier was re- and chief executive officer Dov Charney new forms of liquidity, and cruited and championed by former hermès chief exec- of american apparel, in- we’d have to have a clear utive officer Jean-louis Dumas, who died in May 2010. A Jean sisted the company will not point of view on whose in- christophe lemaire, best known for his earlier role Paul file for bankruptcy. “in my terest we were looking out as lacoste’s creative director, was named Gaultier’s suc- Gaultier opinion, there’s no chance for, that made it more dif- cessor and showed his first women’s collection last month design. of that. That’s not an option ficult. something that was during Paris Fashion Week, a quiet parade without the we are going to explore,” good for american apparel humor or antics unleashed every season by Gaultier. he told WWD. “We have a might be bad for lion hermès bought 35 percent of Gaultier in 1999 by in- variety of options. We could capital,” explained lea. vesting $23.4 million in the business. The plan was to ex- do a private placement of asked why the two pand the designer’s network of boutiques at the rate of stock. or we could use the joined the board in the three a year. at present, there are about 30, with a new one resources we have. We do first place, lea respond- slated to open soon in Taiwan. $10 million a week in sales.” ed: “That’s a damn good in 2008, hermès raised its stake in Gaultier to 45 percent. The same however, the company’s question. But hindsight is year, hermès Parfums’ ceo Véronique Gautier was appointed president financial picture is bleak. 20/20. We didn’t think there at the Gaultier fashion house, suggesting tighter synergies between the last week, it reported a net would be these liquidity maker of Birkin bags and silk scarves and the maverick designer, who has loss for 2010 of $86.3 mil- issues when we first made put men in skirts and Madonna in conical bustiers. lion and an eBiTDa loss of the investment and the But Gautier exited the role in mid-2010 to become international general man- $7.4 million. as of Feb. 28, it company was doing $80 ager of Giorgio armani Parfums. The designer himself took on the title of presi- had just $5.3 million in cash and $1.9 million million in eBiTDa.” dent and put caroline le Borgne in charge of day-to-day operations at Jean Paul of availability for additional borrowings on a lion capital may provide additional fi- Gaultier. she has been Gaultier’s deputy managing director sinces eptember 2006. Bank of america credit agreement and $1.2 nancing to american apparel itself, with lea “We are aware that hermès has been approached,” said a Gaultier million on a Bank of Montreal credit agree- saying he was “favorably inclined” to doing spokeswoman. ment. The company owed $58.2 million on the so but that no final decisions had been made. she declined to comment on reports suggesting the designer initiated Bank of america facility and $4 million on lion capital is exploring various loan and in- a sale effort to raise capital for expansion. the Bank of Montreal facility. additionally, as vestment options, he added, noting that an ad- it is understood the Gaultier fashion house remains loss mak- of Dec. 31, american apparel owed $81.2 mil- ditional cash infusion into american apparel ing, despite healthy royalties from beauty licensee Beauté Prestige lion to lion capital, the london-based private was probably necessary “within weeks.” international. equity firm that rescued the company from its asked his views on a possible american according to hermès’ most recent annual report, 2009 revenues at last financial precipice, in 2009.