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PHOTO BY DANIEL GARRIGA WWD Sportswear/Men’s Women’s Newspaper Daily •March26,2009$3.00 Wear •TheRetailers’ Daily costumes, page3. Muglerconcert Thierry gets fierce with FASHION: ▲

WWDBaselPreview ▲ Beyoncé SECTION II: THURSDAY THURSDAY

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Bigsby & Kruthers Kruthers Retailer ▲ Neck and Neck page 8. MEN’S: turtleneck worn with a pleated fl annel trouser by Michael Kors. versatile investment piece — increasingly important given given important increasingly — piece investment versatile rich textures and romantic versions, making it the perfect the economic times. Here, a Gilded Age braided cashmere The move toward the turtleneck trend for fall is yielding yielding is fall for trend turtleneck the toward move The

far-flung operations and then set out to draft a listening tour to all the $7.9 billion company’s at Lauder, Freda embarkedon aglobal company in March of last year. Upon arriving officer in November 2007, and joined the named Lauder’s president and chief operating Global SnacksforProcter&GambleCo.,was emeritus. chairman father LeonardA.Lauder, 75,whowillbecome takingtheplacevacatedbyhis chairman, Lauder, 48,whowillmoveuptoexecutive July 1,followingaboardvoteonWednesday. officer of the Estée Lauder Cos. Inc., effective has been named president and chief executive After 16monthsofanticipation,Fabrizio Freda By Pete BornandMollyPrior Fabrizio Freda asCEO Cos.TapsEstée Lauder Changing of the Guard: Freda, the 51-year-old former president of As expected,hewillsucceedWilliam P. For more, seepages 6and7. See

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page 5. to surreal, from edgy Week, Fashion Japan ▲ FASHION:

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WWDThursSportswear/Men’sDay FASHION 6 The incredible allure of the turtleneck, its richness ™ and simplicity, has led designers to create the chicest alternative to neckwear this season. A weekly update on consumer attitudes and behavior based GENERAL on ongoing research from Cotton Incorporated After much anticipation, Fabrizio Freda has been 1 named president and chief executive officer of the OOH LA LA, MAMA! Estée Lauder Cos. Inc., effective July 1. 5 William Fung, global managing director of Li & Maternity Wear Meets The Designer Challenge Fung Ltd., sees flat growth in 2009 as its customers predict 10 to 20 percent sales declines. Twenty years ago, maternity wear was a necessary “incredibly well.” On the other hand, she says her Japan Fashion Week took off with plenty of s evil, defined by tent dresses, mini-floral trapeze tops, business model has included a wide range of prices 5 theatrics, from models in Mexican wrestling and floppy bows. Today’s maternity apparel, on the since starting up in 2002. masks to the lifelike robot at the Shinmai show. other hand, is so flush with designer style that moms- “That’s allowed for a good transition into this 9 DENIM: Calvin Klein is bringing its expertise in to-be want to indulge in a new wardrobe. economy, as customers know they can find many innerwear and denim together for its latest project, Destination Maternity’s Rebecca Matthias, price points in our stores and online,” she says. Calvin Klein Jeans Body, to bow in July. president and chief creative officer, says she doesn’t Matthias says the down economy has even like to use the word “maternity” when Motherhood performing well – with items like 10 BEAT: Marvel Entertainment is starting 2009 describing the apparel offered through the company’s jeans that retail for $19.99 every day. Higher-end with a major push into the women’s apparel, nameplates, which include Motherhood Maternity, A Pea in The Pod is doing well, she says, because cosmetics and accessories markets. A Pea in the Pod and Destination Maternity. of promotional 2-for-1 events and price breaks 11 CHICAGO: Midwest retailers and vendors will enter “I like to say it’s fashion, we on certain items displayed front- Saturday’s Stylemax regional women’s apparel just make it fit you when you’re of-store. market with tempered expectations. pregnant,” she explains. “Our “I like to say it’s fashion, we “Value means different things mission is to make a woman’s to different people,” Matthias EYE wardrobe as nice as the last month just make it fit you when says. “A $300 dress that’s marked Talking with Hope Davis, who runs a theatrical before she became pregnant.” you’re pregnant.” to $200-something will be viewed 4 gauntlet in “God of Carnage” that leaves the In the last six months, 7% of – Rebecca Matthias, as a real value for the better audience in hysterics and her breathless. females have purchased maternity customer.” president and chief creative officer, Basel Preview is included as a clothing for themselves, according Pardue adds that sales in her Araisara Destination Maternity Section II in this issue. to the Cotton Incorporated Lifestyle better and designer bottoms have Classified Advertisements...... 15 Monitor™ survey. Ten percent of increased in the last two years. the lowest earners – those with a “Fashion is where mommies To e-mail reporTers and ediTors aT WWd, The address is [email protected], using The individual’s name. household income of less than $25,000 – bought are willing to spend... even in a battered economy,” WWD IS A ReGISteReD tRADeMARK oF ADVANCe MAGAZINe PUBLISHeRS INC. CoPYRIGHt ©2009 maternity apparel, while 8% of women earning she notes. “We offer these higher price-point pieces FAIRCHILD FASHIoN GRoU P. ALL RIGHtS ReSeRVeD. PRINteD IN tHe U.S.A. more than $75,000 bought pregnancy clothing. to pair with lower-priced basics. Women justify the VOLUME 197, NO. 64. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one additional issue in January, May, October, November and December, two additional issues in March, April, June Just 4% of women with household incomes in the expensive jeans [because] they’ll get tons of wear and and August, and three additional issues in February and September) by Fairchild Fashion Group, which is a division $25,000-$74,000 range did so. look hip.” of Advance Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services More than 4.3 million babies were born in the provided by Condé Nast Publications: S. I. Newhouse, Jr., Chairman; Charles H. Townsend, President/CEO; John W. Julia Beck, founder of Forty Weeks, a consulting Bellando, Executive Vice President/COO; Jill Bright, Executive Vice President/Human Resources. Periodicals postage U.S. in 2007, more than any other year in the nation’s and marketing firm that studies expectant and new paid at New York, NY, and at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. history, according to numbers released March 18 mothers, says a wardrobe that works for the entire Canadian Goods and Services Tax Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian addresses to: P. O . Box 503, RPO West Beaver Cre, Rich-Hill, ON L4B 4R6 PoStMASteR: SeND ADDReSS CHANGeS from the National Center for Health Statistics, pregnancy and into the “fourth trimester,” (the post- to WoMeN’S WeAR DAILY, P. o. Box 15008, North Hollywood, CA 91615–5008. FoR SUBSCRIPtIoNS, ADDReSS which resulted in American women spending more partum pudgy period) is embraced by many moms- CHANGeS, ADJUStMeNtS, oR BACK ISSUe INQUIRIeS: Please write to WWD, P. O . Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or visit www.subnow.com/wd. Please give both new and old addresses as printed than $1.2 billion on maternity apparel. to-be. on most recent label. First copy of new subscription will be mailed within four weeks after receipt of order. Address all According to data from NPD Fashionworld’s “Each piece in a limited wardrobe needs to editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. AccuPanel, purchases of maternity clothing were up For permissions and reprint requests, please call 212-630-4274 or fax requests to 212-630-4280. Visit us online perform well and offer a lot of wearing options,” at www.wwd.com. To subscribe to other Fairchild magazines on the World Wide Web, visit www.fairchildpub.com. 3.6% from 2007 to 2008, compared to purchases of Beck states. “This has become a big focus – building Occasionally, we make our subscriber list available to carefully screened companies that offer products and services total women’s apparel, which declined 5.6%. a wardrobe around a few key pieces that work that we believe would interest our readers. If you do not want to receive these offers and/or information, please advise us at P. O . Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273. WOMEN’S WEAR DAILY IS NOT Song Pardue, founder and CEO of Pickles & endlessly. And of course, comfort is essential.” RESPONSIBLE FOR THE RETURN OR LOSS O F, OR FOR DAMAGE OR ANY OTHER INJURY TO, UNSOLICITED MANUSCRIPTS, Ice Cream, a maternity boutique chain and online Since 78% of female respondents tell the UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER store, says there has been a lot of growth in casual Monitor survey that soft, breathable cotton and MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED TO DO SO BY and business-casual attire. cotton blends are their favorite fiber, it is a natural WOMEN’S WEAR DAILY IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE “Our mommies are passing on suits and choice for maternity. ACCOMPANIED BY A SELF-ADDRESSED STAMPED ENVELOPE. building their Belly Dance maternity wardrobe Maternity is seeing with separates, and Women Who Have Purchased Maternity tunics and maxi dresses DAILY Deflation is then mixing-and- Clothing For Themselves in the Past 6 Months trending well for spring matching those pieces and summer, as well as QUote here“ to stay. to create several new Female Age Ranges designer denim. looks,” says Pardue. Pardue says Pickles — William Fung, group” managing director of Total Females Ages 20-29 Ages 30-39 Ages 40-49 “In this economy, & Ice Cream’s key sourcing giant Li & Fung Ltd. Page 5. our customers want 7% 10% 12% 0% players are seamless pieces that can be worn knits, tissue jerseys CORRECTION multiple ways.” Female Household Income and supima cottons. The interest in Fit2BMom yoga wear The surname of Ben Belton, owner of Benjamin’s of Morganton in casual maternity – be Under $25K $25-$49K $50-$74K $75K+ is hot, as are tops Morganton, N.C., was misspelled in the Atlanta Market Preview on page 14, March 19. it Michael Stars tops, 10% 4% 4% 8% featuring candy colors, Juicy Couture hoodies ruffles, side-ruching or Serfontaine denim – or banded-bottoms reflects the taste for premium brands and designer that accentuate the growing belly. Né-net, fall TODAY ON names that moms-to-be are used to wearing. Matthias says loungewear and designer denim 2009. Matthias says her team goes to runway shows have grown tremendously in recent years. “The and views designer looks, then translates it to current look is skinny jeans and stirrup pants, with maternity. For example: Vince, the L.A.-based line tunic tops.” of luxurious wardrobe basics like tees and cashmere Maternity has come a long way, declares Strom sweaters, “doesn’t have a maternity collection, so we Simonte. “For our fashion conscious customers, look at the line they’re delivering and work to get it’s great to have all these options.” the specs to meet a maternity fit.” WWD Half of all maternity clothes are purchased at .com specialty stores, according to the NPD data. Compare This story is one in a series of articles based on find- that to total women’s apparel, where just 27% was ings from Cotton Incorporated’s Lifestyle Monitor™ • Ongoing coverage of bought at specialty stores. The NPD data also show tracking research. Appearing Thursdays in these Japan Fashion Week that 20% of maternity purchases came from national • More images from the chains, 20% from mass merchants, 5% from off- pages, each story will focus on a specific topic as it

relates to the American consumer and her attitudes BE WWDMen’s turtleneck trend pricers and 1% from department stores. o S and behavior regarding clothing, I Belly Dance Maternity carries names like o • Additional photos of the new K u

appearance, fashion, fiber selection and y Chaiken, Habitual and Paige Premium Denim that style from Calvin Klein Jeans y B

owner Jennifer Strom Simonte says continue to sell many other timely, relevant subjects. o

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P • Daily stock prices WWD, THURSDAY, MARCH 26, 2009 3 WWD.COM

Thierry Mugler’s costumes for Beyoncé. Beckman Named President, CEO of FFG Richard Beckman, most re- Beckman to employees Wednesday af- cently chief marketing officer for ternoon. Townsend praised Beckman Condé Nast and president of the Condé as “one of the most creative minds in Nast Media Group, has been named the media business.” president and chief executive officer Beckman is one of Condé Nast’s of the Fairchild Fashion Group. His most seasoned sales executives. In appointment is effective immediately. 2002, he was named executive vice Beckman will be responsible for president, chief marketing officer of all of the FFG businesses, comprised Condé Nast, and in 2004 was promot- of Women’s Wear Daily, WWD.com, ed to president of Condé Nast Media Footwear News, Fairchild Summits, Group while retaining his chief mar- Fairchild Books and Fairchild keting officer title. As president, Classified. He will continue to report Beckman oversaw large corporate to Charles Townsend, Condé Nast sales and marketing programs for the president and chief executive officer. company, including Fashion Rocks “We decided to put the largest, and Movies Rock, and in turn was richest marketing asset in charge responsible for 80 percent of the ad of running this business,” said revenue at Condé Nast. Townsend when he introduced His 23-year career at Condé Nast includes top sales positions at its largest magazines. He was vice presi- Richard dent and publisher of Vogue from Beckman 1998 until 2002, served as publisher of GQ from 1996 to 1998, and was pub- lisher of Condé Nast Traveler from 1994 to 1996. He also has been twice named Condé Nast Publisher of the Year. Beckman started his career at The New Yorker in 1986. Beckman takes over from former FFG president Dan Lagani, who is leaving the company. Louis Cona, se- nior vice president of the Condé Nast Media Group, will now oversee the Media Group and report to Townsend. Beckman will have profit and loss responsibility for the business and editorial operations of FFG. On con- tent issues, WWD editor in chief Ed Nardoza continues to report to Patrick Mugler for Beyoncé: Woman Meets Warrior McCarthy, chairman and editorial di- rector of FFG. McCarthy continues to report to Condé Nast Publications chairman S.I. Newhouse Jr. — Stephanie D. Smith Williamson Gets Colorful for H&M

By Sharon Edelson A leather biker’s Matthew Williamson’s bright pea- jacket cock feather-colored designs will strut around and ruffle H&M twice this spring. The British designer gown. created two collections for the fast-fashion re- tailer inspired by the brilliant blue, green and iridescent plumage of the swaggering bird. The first, a premium, limited edition wom- en’s collection, will bow on April 23 at 200 H&M units worldwide. Featuring cashmere, leather, sequins and embroidery, prices for the line range from $49.90 for shorts to $349 for a ruffle gown. As an encore, H&M on May 14 will in- troduce a more populist collection of Williamson’s women’s and men’s styles in all the retailer’s 1,700 locations. This will be the first time a designer collaboration is available at all H&M stores. “We like his signature style, colorful patterns and ethnic influences,” said Margareta van den Bosch, H&M’s creative director, of Williamson. “The huge interest that these collaborations garner means that often the collections sell out very quickly. We wanted everybody to have a For more looks from the chance to own some of the collection. In a new step, the second part will be available in stores collection, see WWD.com. for a longer period of time.” “The duality between being a woman and a warrior.” “I was inspired by the idea of the colors of That’s the spirit Thierry Mugler wanted to capture with the costumes he designed for a peacock feather,” said Williamson, who reworked iconic shapes from his rep- Beyoncé’s upcoming world tour, and from the look of these illustrations, he succeeded. ertoire. “There’s a leather biker jacket and a tailored silk electric blue trouser The tour kicks off today in Edmonton. suit inspired by my last show.” Several pieces contain a peacock feather motif, “Sasha Fierce is another aspect of Beyoncé’s personality,” Mugler offered via e-mail. including a jersey dress, patchwork clutch and peacock feather necklace. “She is Fierce on stage and Beyoncé in real life. I tried to understand these two sides An ad campaign shot in Tulum, Mexico, featuring Daria Werbowy and with my own perception of both aspects.” Williamson as the face of the men’s line, will promote the H&M collaboration. The look pictured here captures that duality. It imagines Beyoncé as a tough, chic, In Europe, there will be print and television spots. superheroine type who likes her power glam with a bit of froth; hence, the bow bustle “There’s a certain eclecticism to the collection,” Williamson said. “It was and mismatched gloves that pair lacy fishnet with articulated metal. interesting for me to do the men’s wear. For the first time in 12 years, I could But don’t expect Beyoncé to stay in that guise for long. “There will be a lot of drama- think of what I’d want to wear myself. I went to my wardrobe and picked out tization and metamorphosis on stage,” Mugler promised. my favorite pieces and reworked things I’ve collected. The vibe is British The designer said he and Beyoncé share “the sense of mise-en-scène.” As the tour’s boy on holiday in Cuba returning to England by way of Ibiza or one of the creative director, he has worked on all of the show’s visual aspects — lights, sets, cos- Greek islands.” tumes — while “working hard to achieve her dreams. “He describes the costumes as Asked whether customers of his signature collection will shop for his de- “very elaborate,” and rooted in the songs’ meanings. “Feminine. Free. Warrior. Fierce. signs at H&M, Williamson said, “There’s a definite crossover in the aesthetic As a creative adviser for this tour, it is my responsibility to make her vision come true,” and the way women buy clothes now. It’s not about one singular idea or de- the designer said. signer, it’s about mixing things up. It would be interesting to see a woman in — Bridget Foley both collections.” 4 WWD, THURSDAY, MARCH 26, 2009 WWD.COM Audacity of Hope PLUS ONE The new film “Guest of Cindy Sherman” may just as well Eight times a week, Hope Davis must run a theatrical have been called “Successful Female Artists and the Boyfriends Who gauntlet in “God of Carnage” — she cries, she yells, she Resent Them.” projectile vomits, she incurs wounding insults from her In the documentary-style flick, opening Friday, director Paul H-O fictional husband, she launches lacerating barbs in return, she (which stands for Hasegawa-Overacker) chronicles the pressures of flails, she hyperventilates. It is a performance that leaves the conducting a romance with photographer and filmmaker Sherman under audience in hysterics and its star breathless. the white-hot halogen lights of New York City’s art scene. The scene afterward in Davis’ dressing room at the Bernard Jacobs When we first see H-O, he’s a struggling artist and host of a Theatre is blessedly more serene — as is its inhabitant. As she lounges in local access cable show, “Art Beat.” With the help of Art in America a pair of fuzzy white slippers with little pink bows, the only vestige of her contributing editor Walter Robinson, H-O gains access to big name character’s antics is her diminished voice. artists such as Andres Serrano, Brice Marden and Alex Katz. Still, he The play, the latest from French playwright Yasmina Reza, is Davis’ first says over lunch at the Great Jones Cafe, “interviewing Cindy Sherman time on stage in nearly a decade. She stars as Annette, a wealth manager would have been a great coup.” who, along with her lawyer husband, Alan (Jeff Daniels), meets with a fellow When he and the notoriously shy Sherman finally meet, she agrees, Brooklyn couple (Marcia Gay Harden and James Gandolfini) to discuss a much to his surprise, to submit to a series of interviews that result in a half- violent fight between their respective sons. What begins as a polite, yuppie hour local access show called “Cindy’s World.” conference — complete with espresso and clafoutis — quickly devolves into “She’s this cute, sexy girl,” says H-O, who has a preternaturally a raucous, take-no-prisoners battle that pits husband against wife and man young face. “She’s hugely admired and much collected. Cindy was a against woman in all possible permutations. vessel into which every female artist dropped her hopes and ambitions.” “It is a really interesting treatise on human nature and the mask we In other words, if women wanted to be Cindy Sherman, then men like put up until we can’t distinguish ourselves from Third World or violent H-O, a longtime art-world gadfly, wanted to be with her. countries….Deep down, people really aren’t so different,” Davis explains. “And there’s nothing in [Reza’s] plays that’s predictable: You’re never going from point A to point B; it’s careening all over the map.” “Annette is seemingly a glamorous, demure businesswoman, and she becomes wild and degenerate and foulmouthed,” says director Matthew Warchus, who oversaw the London production of “God of Carnage” last year in which British actress Tamsin Greig played Annette. “Hope’s got a great range and is authentic in lots of absurd and hilarious ways.” Indeed, Davis is most comical when her cool, patrician exterior is forced to break rank. The reeling emotional pitch of the play was so intense that all its cast members were dropping lines during rehearsals, according to co-star Daniels. “I did that once. I just completely wasn’t there, and the play stopped and all of a sudden Hope turned and looked at me and all but channeled the line right between my Hope eyes. She was just going, ‘Say it,’” he recalls. Davis Such onstage sparring abilities were honed during Davis’ years of theatrical experience. The middle of three daughters growing up in New Jersey, Davis began playacting at a young age with her neighborhood friend Mira Sorvino. But it wasn’t until a drama-focused semester abroad in London (in the midst of her cognitive science studies at Vassar College) that she thought, “theoretically, I’d like to do this.” Theory became practice when she moved to Chicago to join a theater group started by friends, followed by a breakout moment when she took over for Madonna in a 1988 production of “Speed-the-Plow.” Soon, New York beckoned. “It never occurred to me that I could get jobs in film — that seemed like this other thing,” says Davis, 45, who lives with her husband and two young daughters in Brooklyn. “I just wanted to be a working theater actor. I wasn’t overly ambitious.” Even so, these days Davis is perhaps most recognized for her work in indies like “Next Stop Wonderland,” eichner “The Secret Lives of Dentists” and “American Splendor,” for which she earned a Golden Globe nod. Starting steve

April 5, she will star in the second season of HBO’s “In Treatment” as a “single, 42-year-old, very successful, by very lonely lawyer, who really wants a baby and a family and is nowhere near having those things.”

If all of her screen work has perhaps upstaged her initial theater track, it has not changed Davis’ davis professional approach. “I’m not a workaholic,” says Davis. “I’ve never really had the desire to climb the ladder — then you don’t fall off the ladder, and you can just do your own thing.” centeno; — Vanessa Lawrence talaya by photo Mark Webber is not the first actor to become a director. But to his credit, the 28-year- webber old, who has appeared on screen in Woody Allen’s “Hollywood Ending” and Moisés Kaufman’s “The Cut to the film, in which H-O gushes, “I’ve moved in with my Laramie Project,” also penned “Explicit Ills,” girlfriend Cindy, who I love very, very much because she’s the most his debut feature playing in theaters now. The film wonderful woman I’ve ever met in my life.” But it’s not long before H-O, explores poverty and addiction through a series of who trades his modest Brooklyn apartment for Sherman’s Manhattan vignettes set in the Philly badlands. It stars Rosario penthouse, begins noticing the inequities of the relationship. Dawson, The Roots’ Tariq Trotter and Paul Dano “My best friend, my lover, just doesn’t have the kind of struggles [I and is executive produced by Jim Jarmusch — whom have] at all,” he says in the film. “Her lifestyle is so different, and her Webber befriended during “Broken Flowers.” world is so much bigger than mine. Cindy’s a celebrity. She was going KEEPING IT REAL: The movie’s subject matter is out with Steve Martin when I met her.” particularly personal, as Webber spent a year and a H-O has his own celebrity pals who drop in and out of the movie half of his life homeless after his single mother, Cheri offering relationship advice — Carol Kane, Molly Ringwald, Jeanne Honkala, a well-known social activist, was fired from Tripplehorn, Eric Bogosian, Danny DeVito and John Waters among them. her Minneapolis high school teaching job after being When H-O asks David Furnish, Elton John’s partner, how he feels about accused of welfare fraud, although the charges were being “the wife” in the relationship, Furnish replies, “It really did my later dropped. The two moved to North Philly, where head in, and I completely lost it. I took it out on Elton.” they lived on the streets until Honkala married a Eventually H-O breaks under the weight of Sherman’s stardom and local union leader and settled into a house. ambition. The final straw is the slight he receives at a party in Sherman’s LEARNING CURVE: Webber credits his tough honor hosted by New York-based gallerist Sean Kelly. As H-O looks for upbringing for fostering his gift for show business. his seat, he watches Kelly lead Sherman to the head table, where he and “I had to do a lot of acting and a lot of hustling when other A-list artists are seated. When H-O finds his place card, it’s not even I was a little kid, just keeping the game going that addressed to him, but says, “Guest of Cindy Sherman.” “I was sitting I wasn’t homeless to my friends [at school]. That next to the date of the lawyer for the gallery,” he tells the camera. “I feel was a big performance every day,” he recalls. “I’ve like I’ve sort of been swallowed up by the whole Cindy Sherman thing.” always wanted to be an actor. Initially, it was for Eventually, “I couldn’t take playing second fiddle anymore,” H-O shallow reasons and a form of escapism…quickly says during the interview. “She could tell I was starting to become those shallow reasons changed when I realized, unhappy with the social situations. We weren’t getting along. I assumed ‘Wow, I kind of have a knack for this.’” that we were going to get old together. [Instead,] six months after I PLAYING ALONG: The soft-spoken actor may have moved out, she wasn’t talking to me.” plenty of experience on set, but the publicity part of Sherman, who’s now dating musician David Byrne, had approval over his job description remains a challenge. “I don’t do the final cut of the film, though she refuses to be a part of its promotion. well at premieres.…I’m shy and it feels way too self- “She tried to excise our relationship moments,” H-O says. “You know, Mark important. I can step into those shoes and play the Cindy’s not very happy about this movie. She feels the movie turned into Webber game — I’m not hatin’ on it. I just get really anxious.” what she was afraid of, which is revealing too much about her.” — V.L. — Sharon Edelson WWD, THURSDAY, MARCH 26, 2009 5 WWD.COM N.Y. Eyes 8th Ave. Manufacturing Site Li & Fung Forecasts Flat ’09 By Rosemary Feitelberg By Constance Haisma-Kwok the company’s turnover in soft goods or apparel NEW YORK — City officials have proposed earmarking a decreased 3 percent in favor of hard goods. 300,000-square-foot Eighth Avenue building for apparel manu- HONG KONG — “Deflation is here to stay.” The company also is looking for further acqui- facturing and running it as a nonprofit organization. So said William Fung, global managing direc- sitions. In 2008, the group made two large acquisi- The vacant building is said to be between West 36th and West tor of Li & Fung Ltd., who said Wednesday that tions: Van Zeeland handbags in the U.S. and Miles 42nd Streets, and it remains to be seen whether it would be dedi- the sourcing giant is budgeting for flat growth in Fashion from Germany, which Fung expects to be- cated solely to manufacturing or would house other aspects of 2009 because its customers are predicting 10 to 20 come an anchor business for Li & Fung in Europe. the fashion business such as mom-and-pop operations, fabric percent decreases in sales. “Miles’ main customer is Aldi, which is like Wal- shops, patternmakers and designer showrooms. “I’d be remiss if I said things looked rosy,” Mart in the U.S.; it’s really growing now,” he said. About 15 industry insiders, including a few Council of Fashion said Fung as the group unveiled 2008 results that “We look at acquisitions as opportunistic,” said Designers of America representatives, Fashion Center Business showed a decline in operating profits. Fung, who explained that the company keeps a Improvement District members, landlords and city officials, Offsetting what is expected to be a tough 2009 $100 million fund on hand for smaller deals. He discussed the prospect at a closed-door City Hall meeting on is an increase in Li & Fung’s outsourcing mar- said, “2009 will be challenging, but we want to Wednesday. But given the tug-of-war negotiating that has gone ket share. “We expect to emerge make deals.” on for years over the area’s rezoning, few attendees were about stronger, to take a lot of market For 2008, Li & Fung reported a to outright support the idea or even detail the discussions. share,” said Fung. “It’s been a 3 percent decrease in operating “It’s all to be considered,” said Steven Kolb executive direc- busy year. The silver lining in profit to 3.08 billion Hong Kong tor of the CFDA. the economic situation is that we dollars, or $396.1 million, as well It’s unclear when the interested parties will meet again. have more retailers coming to us as a decrease in net profit, down However, a few attendees speculated the economic down- because they are asking, ‘Is hav- 21 percent to 2.42 billion HK dol- turn could help speed the process along, since landlords, ing our own sourcing office the lars, or $311.1 million. Earnings city officials and Garment Center tenants are all gunning for right way to go?’ per share were also down, by 23 optimal deals. “There is no doubt that con- percent, compared to 2007. It has not been determined whether the Eighth Avenue site would sumer sentiment is very weak, The only bright spot, accord- become the extent of the Garment Center’s designated zoning. but the group continues to gain ing to Fung, is the strong growth in “The only fear I have is that we would give up too much significant market share through turnover, which reached $110.72 bil- square footage,” said one meeting attendee, who requested ano- an accelerated flow of outsourc- lion HK dollars, or $14.2 billion, a 20 nymity. “That is something that needs to be worked out.” ing deals,” continued Fung, listing percent increase over last year. There is said to be some 1 million square feet in the Garment Timberland’s apparel business, “It was a difficult year for ex- District being used for manufacturing, a sliver of the area’s total Mexx, and Toys ‘R’ Us private port and consumer businesses, 10 million square feet. Preserving between 250,000 and 500,000 label business as examples of even before the financial crisis square feet is considered to be an acceptable compromise. The gained market share in 2008. Uden Graham by hit. Happily in top-end sales we anticipated uptick in domestic manufacturing due to shorter The trend is continuing in 2009. William Fung increased market share, and turn- runs, closer-to-need orders and rising production costs in India In February, Li & Fung signed Photo over growth was solid,” he said, and China may make the new proposal more enticing to some, a deal to do the sourcing for all of Liz Claiborne’s adding, “The main point is the top line is good one attendee said. brands, including Juicy Couture, Kate Spade, Lucky even if the bottom line is affected.” “We are encouraged with the direction taken in today’s Jeans, Dana Buchman and Mexx. Fung called the Fung attributed the decline in profits to the gen- meeting. However, there are still many details that need to be agreement a “landmark deal. It puts us at the top eral slowdown in consumer demand as well as to worked out and other stakeholders to consult before we final- of the line for any branded companies looking for three one-time expenses incurred by the company ize a solution to ensure the Garment Center remains the vital sourcing. The market is buzzing with this.” in 2008: the development of the on-shore business core of the fashion industry,” said Patrick M. Murphy, head of In the meantime, Li & Fung is spending con- in Europe; restructuring costs, particularly in the fashion/retail growth initiatives for New York City’s Office of siderable effort trying to diversify. While America U.S., and customers that declared bankruptcy. Economic Development. still accounts for the lion’s share of the company’s “We don’t expect to repeat these in 2009,” said Stan Herman, former CFDA president, who attended market, 62 percent in 2008, that is a decrease of 3 Fung. “The group’s financial strength is highly Wednesday’s meeting, said, “There is good will on the part of the percent from 2007. “We are steadily reducing our resilient despite uncertainty in the external fi- city to make this work. They don’t want the Garment Center to be reliance on the U.S. market,” said Fung. Similarly, nancial market.” just a statue in its memory.”

Né-net Matohu

Theatrics Rule the Runway at JFW t By Amanda Kaiser Araisara TOKYO — Japan Fashion Week is in full swing and offering up plenty of theatrics — from the models in Mexican wrestling masks at Né-net to the eerily lifelike robot that introduced the Shinmai show for emerging design talents. The clothes have been just as interesting, including a vast assortment of deli- cate dresses, structured outerwear and innovative knits. Standouts so far have included the quirky stylings of Mintdesigns, kimono-style wrap dresses and coats at Matohu and the colorful tailored men’s looks at John Lawrence Sullivan. Still, designers here are putting on a brave face as they attempt to do business in a recession and a fast-shrinking market for luxury goods. On Wednesday, Japan got its latest dose of sobering economic news. Exports, which drive the world’s second-largest economy, plunged a record 49 per- cent in February, following January’s already steep drop of 46 percent. “I’m an optimist, so I don’t want to think about it,” said support surface designer Norio Surikabe of market conditions. But speaking after his show of tailored, minimalist pieces, he warned that more of his designing col- leagues who run small labels need to take the commercial side of fashion more seriously. “In Japan there are many small designers, but they don’t manage to sell,” he said. “For me, business and creativity are linked. In my opinion, you have to John think that way.” Lawrence Highlights of the week so far have included: Sullivan • Matohu: Hiroyuki Horihata and Makiko Sekiguchi once again mined a distinctly Japanese theme, turning out kimono-style wrap dresses and coats almost entirely in black silks and jacquards. • Mintdesigns: Hokuto Katsui and Nao Yagi are known for their quirky prints and dis- tinctly Tokyo style sense. This season they delivered on that front again — albeit with slightly darker undertones. Yagi said backstage that this show represents a “rebellion” against the fashion system. The result? Models bearing crowns of thorns and colorful masks showed off a mix of plasticized ponchos, delicately embroidered pieces in gray and white and dresses bearing velour skeleton motifs. • John Lawrence Sullivan: The show may have been off the official Japan Fashion Week calendar, but it was undoubtedly one of the hottest tickets in town, attracting a legion of press and the brand’s devoted followers. Designer Arashi Yanagawa, a former professional boxer, founded his own men’s wear label six years ago, naming it after the famed 19th cen- tury champion of the sport. The show, staged outdoors next to the batting cage of Tokyo’s baseball stadium, offered up some tailored looks in hues like mustard, jade and purple. Rounding out the collection were sporty parkas cropped at chest level, high-waisted trou- sers and long johns that lace up the leg. • Araisara: Sara Arai, who has built up her own made-to-order clothing business, just Isobe ko Yu

launched this prêt-à-porter line to connect traditional Oriental culture and fashion. Her debut show for the brand took a refined and modern take on Asian shapes and fabrics. Inspired by Meiji-era kimonos, she used ancient dyeing techniques and incorporated hun-

dreds of different fabrics including silk, lace and velvet into a dramatic lineup. Photos by 6 WWD, THURSDAY, MARCH 26, 2009

TheNeck incredible allure of the turtleneck — its richness and simplicity — has led designers to create the chicest alternative to neckwear this season. The offerings range from thick cashmere braided sweaters to modern- inspired fitted turtlenecks. — Alex Badia

Patrik Ervell’s cashmere, silk and cotton turtleneck; TSE’s wool and cashmere jacket, and Rag & Bone’s Tales wool pants.

PHOTOS BY DANIEL GARRIGA WWD, THURSDAY, MARCH 26, 2009 7 WWD.COM

Trussardi 1911’s cashmere turtleneck and wool pants worn with Spurr’s wool and cashmere WwD coat. Sermoneta gloves. Men’s

For more men’s looks, see WWD.com.

s Alexander McQueen’s wool turtleneck and Patrik Ervell’s wool pants. Rag & Bone belt; Sermoneta gloves.

s Nautica’s cashmere turtleneck, Burberry London’s polyester and cotton coat and Trussardi’s 1911 wool rio

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CAMPUZANO; LUIS ASSISTANT: FASHION MICHENER AND SABRINA RALSTON; INTERNS: KEELEY FASHION CLINIQUE; ANNA BERNABE AT BY

s Etro’s wool, cashmere and mohair turtleneck worn with Filippa K’s wool and elastic jacket. MODEL: JERRETH/DNA; HAIR AND MAKEUP 8 WWD, THURSDAY, MARCH 26, 2009 WWD.COM Men’s Thom Browne Denies Bigsby & Kruthers to be Revived Financial Straits, By Jean E. Palmieri Block 37 will open this BIGSBY & KRUTHERS, A MEN’S WEAR INSTITU- fall across from Macy’s Still Seeks Partner tion in Chicago, is being resurrected. downtown Chicago store. The business, which closed in 2000, has signed on By Jean Scheidnes as a tenant at a new development, Block 37, slated to open in downtown Chicago this fall. The store will be WHILE THOM BROWNE CONTINUES HIS operated by one of its original owners, Joe Silverberg, search for a fi nancial partner, the controver- in concert with Jack Shniderman of Robert Vance, an sial designer denied that he is having cash- upscale men’s wear store in the Chicago suburb of fl ow problems or considering bankruptcy. Lincolnshire, Ill. “I would love to fi nd an investor who “Joe and I have been talking about this for a couple would be able to inject some funds into my of years,” Shniderman told WWD on Wednesday. He company so that I can further grow my busi- noted that some of the employees at Robert Vance ness,” said Browne, responding to media were formerly with Bigsby and customers still men- reports Wednesday. “But the conditions and tion Bigsby when shopping. “I called Joe and told the fi t have to be right. Thom Browne Inc. is him I thought the Bigsby & Kruthers name is still not having a cash-fl ow problem and has no viable. He was open to the idea, so we started intention to fi le for bankruptcy.” scouting locations.” In fact, because of the exposure he re- After 18 months, the duo came across cently enjoyed in Europe — including a Block 37, a mixed-use project with 280,000 presentation at Pitti Uomo in January square feet of retail space on State Street. and a dedicated space at Colette during It is located across the street from Macy’s, Ironically, the news of Bigsby’s return came the Paris men’s shows — Browne said he formerly Marshall Field’s, and will encom- two days after another important Chicago men’s picked up an additional 10 doors in Europe pass a full city block. A hotel, restaurants wear player, Mark Shale, fi led for Chapter 11 and Japan, and the wholesale business as and offi ces will also be part of the project, WWD bankruptcy protection and said it would close of January was up 117 percent. which has signed Ben Sherman, Puma, Zara, fi ve of its eight stores and put the remaining units “He shipped spring on time, and the mo- Anthropologie and Aveda, among others, as part up for sale. mentum and excitement about the collec- of its retail mix. Men’s “It was just a giant coincidence,” Shniderman tion continues to grow,” said Tommy Fazio, “When Joe and I saw the project, we looked at said. “We’d heard rumors about Mark Shale for a fashion director of Bergdorf Goodman Men, each other and said, ‘This is it,’” Shniderman said. “It’s at month or so, but we just signed our lease yesterday.” a strong supporter of the designer. the edge of the fi nancial district, the edge of the theater district Although he acknowledged the “climate is a bit diffi cult and across from the old Marshall Field’s. And we like the idea now,” Shniderman believes that “adversity creates real op- that the project is going to help revitalize State Street.” portunity. When times get better, we’ll be well-positioned to Silverberg said he’s owned the name of the business since benefi t. It’ll be great.” it closed and a call from a company that deals in dormant Silverberg opened the first Bigsby & Kruthers store brands a couple of years ago convinced him it was time for a with his brother, Gene Silverberg, in Chicago in 1970. Gene return. “The name never got dragged through the mud so it Silverberg will not be involved in the new project. Joe was time to bring it back,” he said. Silverberg said there is no bad blood between the brothers. Bigsby will take 9,000 square feet on the second fl oor of the “I probably missed [the business] more than he did,” he said. project, which will allow the store to present a comprehensive Silverberg also noted that the new business is “well capital- assortment of men’s wear as well as a smaller representation ized, so that’s not an issue.” of women’s. “It’s going to be a bit younger than the old Bigsby,” Shniderman, a native of Chicago, began his career at Eric Shniderman said. He said downtown Chicago is full of schools Salm in Lincoln Village. Recruited by Robert Vance Ltd. in and there are 80,000 young people and their parents that the 1979 as a buyer, he worked his way up to president of the store is hoping to attract. “There will also be an opportunity company with three retail stores and an outlet. He bought for a 30-year-old businessman looking for a specialty store en- the company in 1985. vironment and some interesting, edgy product.” In a statement, Larry Freed, president of Joseph Freed Shniderman said the store will not turn away more-ma- and Associates LLC, the project’s developer, said: “Putting ture customers either, noting, “There will be something for a Bigsby & Kruthers store in the heart of downtown Chicago everyone.” on this historic block is especially appropriate when you He declined to mention brand names at this point, calling consider the strength and longevity of the Bigsby brand in it “a work in progress. But we’ve already talked to some ven- Chicago.” dors and there will be some dedicated shops.” Tailored cloth- After 30 years in business, Bigsby & Kruthers fell on hard CHINSEE ing will represent 30 percent of the mix and sportswear the times in the late Nineties and fi led for bankruptcy in 2000. It remainder. There will also be an area for custom clothing. was liquidated later that year. Thom Browne GEORGE PHOTO BY Etnies Founder Unveils Green Fashion Line Like every independent designer in the luxury market, Browne’s business is feel- By Brenner Thomas Technology Inc., which also owns other ing the effects of the retail slowdown. A action-sports brands like ES footwear and backer could inject the capital required to A MOMENT OF RED-CARPET ANXIETY LED Altamont, runs on solar power; Senizergues broaden the scope of his business, which Pierre André Senizergues, the founder of skate recently committed to becoming a carbon- was founded on suits with shrunken pro- brand Etnies, to launch his newest venture, neutral company by the year 2020. Last year, portions. C-PAS, a line of contemporary eco-apparel. the executive launched a line of furniture en- Browne has been open to potential The entrepreneur needed a tuxedo to tirely constructed from old skateboards; Karl backers for about three years. He has had wear to the 2007 Cannes International Film Lagerfeld is reportedly a fan. discussions with about fi ve suitors in that Festival, where he was promoting “The 11th “For me, it’s all about the environment,” period, including Japanese distributors Hour,” an environmental documentary star- said Senizergues, whose company does $200 who were deemed unsuitable because the ring Leonardo DiCaprio that he had helped fi - million in footwear and apparel sales annually, designer wants to maintain control of his nance. The trouble was, Senizergues couldn’t according to market sources. “I want to raise distributors in that key market, according fi nd anything that refl ected the movie’s mes- the bar on sustainable fashion.” to Miki Higasa, Browne’s spokeswoman. sage of sustainable living. So he designed his But environmentally guiltless clothing — The latest potential backer is New York- own green tux, fashioned from organic wool all of it made in America — does not come based Individualized Apparel Group, whose and trimmed in a shiny synthetic made from cheap. The blanket blazer retails for $2,400. Oxxford Clothes, Gitman Bros. and Holland recycled cassette tapes. Recycled oxford shirts start at $280; the cas- & Sherry divisions already produce suits, “It didn’t seem right to make an Etnies sette-tape tie, $170. shirts and fabrics for Thom Browne. The suit,” said Senizergues, 45, of the young men’s Select pieces will retail on the line’s Web two parties have talked, but no terms have skate line he founded in 1986. “That customer site, collectionpas.com, starting April 15. been broached and they are nowhere near doesn’t wear suits. I wanted to make some- Custom suits are also available out of the a deal, according to Higasa. thing tailored and dressy that refl ected my company’s showroom in Manhattan by ap- “We have a great relationship with IAG passion for the environment.” pointment. The full line will launch at Colette on the production side, and that will con- That one-off became the genesis for C-PAS, in Paris this June. tinue. Never say never, but at this point I’m a 30-piece collection of contemporary tailored C-PAS marks Senizergues’ fi rst foray into the just looking forward to continuing our pro- clothing and sportswear, all made from organ- dressier fashion market, and refl ects the en- duction relationship,” said Browne. ic and cleverly recycled textiles. The shiny trepreneur’s evolving personal tastes. “I have Browne is unwilling to sell a majority cassette fabric is reprised in the tuxedo, suit been skating for years, but now I need to get stake in the eight-year-old business. jackets and neckwear. He used surplus Air dressed up more these days,” he said. “I want- “The right partner understands what the Force parachutes for a nylon bomber. Old ed something that refl ected who I am now.” collection is and what the potential of the Army blankets were transformed into thick, But he won’t be trading fashion for fi lm business is. I don’t want to partner with the wooly coats. anytime soon. “Making a movie is not easy,” wrong person, because I want the partner- This is not the executive’s fi rst foray into Senizergues said. “I loved raising awareness ship to be forever, with someone who has sustainable business. The Lake Forest, Calif., A look from C-PAS. about the environment, but no wonder people the same vision for the business as I do,” headquarters for his holding company, Sole go cuckoo in Hollywood.” Browne said. WWD, thursday, march 26, 2009 9 WWD.COM Denim Report Calvin Klein Jeans Brings on Body for Fall By Ross Tucker ments of Body and Calvin Klein Jeans into a focused product for launch, Calvin Klein is bringing its expertise in in- noted Janice Sullivan, president of nerwear and denim together for its latest project. Calvin Klein Jeans. Calvin Klein Jeans Body will hit stores in July “We felt that we’d have one mes- with a one-style collection for men and women that sage and one great product, and we’ll incorporates the body-enhancing elements of Calvin put it out there and kick off from Klein Body underwear with the iconic look of Calvin there,” said Sullivan. “I think the Klein Jeans. priority is to give people a reason “It’s all about the physique and celebrating to make that purchase. Whether it’s the body, celebrating the profile,” said Kevin a value proposition or innovation, Carrigan, creative director of ck Calvin Klein you’ve got to deliver more now.” and Calvin Klein Jeans. Carrigan anticipates expanding The result is a fashion-forward sublabel the collection in future seasons to in- featuring design elements that have been clude boot cuts, shorts and jackets. developed to accentuate fit and body shape. “There’s an expansion of product The women’s skinny-leg style features an inverse that I can work on here if she reacts yoke, flattened side seams that have been shifted to- to this,” said Carrigan. ward the front of the leg and a hidden elastic waist- Tom Murry, chief executive officer band that keeps the jeans fitted to the wearer’s back. and president of Calvin Klein, said the For the men’s straight-leg style, extra layers of fabric launch will be supported by a global were added to the fly in order to enhance the profile of marketing campaign. Details of the the area. Both men’s and women’s styles also have a lon- campaign have not been determined,

ger leg hem in the back to give a more tailored look when but Murry said celebrity involvement worn with shoes. was possible. Regardless, Murry said “We felt that the market needed a really new fit, a tech- advertising would be in keeping with nological fit that enhanced the body,” said Carrigan. centeno Calvin’s long-established DNA. Read: “Because we’ve had such success with our Body un- sexually charged and provocative. derwear, it was something we wanted to be known For more images, talaya “Hopefully, this will occur when for. It was a synergy that I’m starting to work on see WWD.com. we’re beginning to see a little bit of between all our brands.” recovery at retail,” said Murry. Calvin’s management and design teams kept photos by In the U.S., the women’s line will in mind that they were setting out to introduce The line will launch one style for men and one for women. launch in 800 doors, while the men’s a product line at a time when consumers are style will roll out in 150. The style will subjecting potential purchases to heightened retail for $79.50 in the U.S. and slightly above the $100 mark abroad. In Europe and levels of scrutiny and foot traffic at retail is soft. As Asia, the collection will launch in some 300 freestanding Calvin Klein Jeans stores. a result, efforts were directed toward developing a dual- Murry believes difficult times offer a prime opportunity for a global push to succeed. gender denim product that would have a distinct point of view “We feel we’re picking up market share,” said Murry. “If the execution is carried and a global target. It took about eight months to meld the ele- out well, the strong get stronger in a weakening environment.” Trying Times Push Premium Labels Back to Boutiques The boutiques and specialty stores that helped build some of the gevity of the brand,” said Scott. “There’s certain ones we’re cutting back on because premium denim industry’s biggest names are being given renewed attention this fall. they’re just too accessible.” While still representing the biggest volume opportunity for premium jeans brands, Scott said the boutique-only product he’d seen was distinct enough to stand out months of heavy discounting at department stores have taken some of the shine off from the now more generally conservative offering at department stores. the channel. In a depressed retail environment, the need to get quicker reads on what “Stores are going deep into their money makers and shallow with their marginal products are working has swung the pendulum back in favor of specialty stores. brands,” said Scott. “My prediction for fall is it’s going to be a sea of basics out there. Seven For All Mankind and J Brand have been the most notable labels to come Whoever doesn’t take a chance on a special item, they’re going to be the losers.” out with specialty store-only brands for fall. J Brand Boutique emphasizes exclusive Thomas George, owner of three E Street Denim stores in the Chicago area, also washes and wholesale prices that run at least 11 per- feels the new product from J Brand and Seven can pro- cent more than the starting price for the flagship line. vide a point of distinction for his stores. Jeff Rudes, who co-founded J Brand with Susie “As we’ve seen with several different brands that Crippen five years ago, told WWD in February that there have spread themselves a little broad, there still is this was a desire to bring customers back to boutiques. romance in having something unique and different,” “We want the line to be sold and romanced the old- said George. fashioned way, with service and trying it on in the bou- The boutique-only offerings from J Brand and Seven tique,” he said. are appealing to owners because they have greater con- Seven For All Mankind will introduce Premiere 7 fidence in their ability to develop, produce and deliver exclusively to independent retailers, offering product their product. New product with a lower risk factor is priced between $174 and $198 and featuring special fits, something few retailers can pass up in this economic washes and labeling. climate. George also expects J Brand and Seven to offer “This is commercially priced product that specialty marketing support that emphasizes the limited nature stores can build volume on,” said Topher Gaylord, pres- of the product. Jason Verhoeven, owner and designer ident of Vernon, Calif.-based Seven, a unit of VF Corp., of premium denim brand Brown Label, said all brands during the Project Las Vegas trade show. “They don’t targeting the boutique channel are going to run into want to give all the volume to department stores.” similar problems regardless of their size. That said, volume is likely to be difficult to come “They just don’t have the money; that’s the biggest by in the specialty channel, particularly in the near issue,” said Verhoeven of boutiques. “They’re in a good term. Boutiques have been hammered by the reeling position, but they don’t have the money to pay for the economy and extreme discounting at major depart- goods and it’s really hard to ship them. You do every- ment stores in their areas. They have seen their credit thing you can to do it.” capacity evaporate and many have closed their doors. Michael Press, president of premium label Earnest The best glimpse of exactly just how dire the situation Sewn, likens the boutiques to high school coaches dis- had become was presented in True Religion’s financial covering and mentoring talent that eventually goes pro. results for 2008. “They tend to be the ones that find these brands,” “Sales to [U.S.] boutiques in the fourth quarter de- said Press. “They tend to be the ones that gain the ini- clined 36.3 percent compared to the prior-year period,” tial interest in the brands and grow them and then they said Michael Buckley, president, during a conference get handed over to the department stores.” call with analysts. “As economic conditions worsened When the economy was booming, specialty stores throughout the year, we saw a corresponding negative Looks from Premiere 7 and J Brand Boutique. had to accept brands devoting attention to department trend in sales to this channel. We suspect that some of stores, but Press understands how the recent spate of the consumers that previously purchased True Religion merchandise through this discounting has swept the legs out from under boutiques. channel shifted their buying to majors and our own retail stores, as boutiques were “We went past promotion for the last five months, we went into deep heavy mark- not always able to offer the newest styles.” downs,” said Press. True Religion’s U.S. boutique sales were down 11 percent for 2008 and management Now the boutiques may find themselves a bit more in the driver’s seat as brands anticipates its American wholesale business will fall between 17 and 19 percent in that have been burned by the department store fallout decide they can live without 2009, again driven largely by declines in the specialty store channel. chasing volume. That said, Press warns the whole scenario could, and likely will, re- Boutique owners have welcomed the offerings from J Brand and Seven. Lawrence peat itself. Scott, owner of Pittsburgh Jeans Co., has seen some brands lose their value due to “Anyone who starts a boutique-only line, if it’s successful, department stores may overexposure. come looking to stock the line and the cycle could begin anew,” said Press. “There’s so many brands now that are so widely distributed that it’s killing the lon- — R.T. 10 WWD, THURSDAY, MARCH 26, 2009 WWD.COM The Beat A Super Push for Women at Marvel By Julee Kaplan to females, relevance to trends is key. Simply relying on the character alone to sell themselves doesn’t fly. The consumer products team at Marvel is “Hulk was a big component for us when it came to thinking big when it comes to females. being eco-friendly, with T-shirts featuring The entertainment company, best known the character and sayings like ‘go for its library of comic book superheroes green.’ We also introduced a more ranging from Spider-Man to Iron Man, is stylized character graphic which starting 2009 with a major push into the looks like Japanese animation,” women’s apparel, cosmetics and ac- said Susan Fields, vice presi- cessories markets. This move comes dent of product merchandising after more than 70 years of gearing at Marvel. “Also, anything that the bulk of its merchandise assort- we can relate to current music ment to the young men’s market, selling trends does well. For instance, we everything from Spider-Man comic books to have a T-shirt where all the superheroes Captain America business card holders and were assembled into a band with a say- Incredible Hulk T-shirts. ing like, ‘I heart boys that rock.’” “Since our core customer has always been With more than 5,000 characters guys, we need to be very careful when we available in the company’s archives introduce female product so that we don’t — from superheroes and villains to alienate our core,” said Paul Gitter, presi- friends and relatives of these heros dent of consumer products, North America, and villains — Fields said the options for Marvel Entertainment Inc. “What we are limitless. If a high-end department have found through testing is that we haven’t store wants to sell Spider-Man T-shirts alienated them, which gives us the OK to and a specialty retailer is also inter- move forward with female product.” ested, Marvel can adjust the images Since 2007, the $5.7 billion consumer specifically for each retailer. This products division at Marvel has been test- way, the merchandise can be tailored Superhero jewelry is expanding for holiday. ing select items for females, such as graph- for all levels of retail distribution. ic character T-shirts at Hot Topic and Gap, A Marvel T-shirt. In 2009, Fields said the company with a major designer. The result, Gitter said, will be and jewelry at Claire’s, among other items plans to roll out a series of female- substantial growth in sales, although he would not give at select mass and mid-tier retailers. What executives friendly products with a new range of licensing part- specific projections. at the firm found while testing was that when it comes ners. Currently, stores are selling contemporary fashion “We are not recession proof, but I would like to think tops licensed to Mighty Fine, ju- we are recession resistant,” he said. “I believe that if nior fashion tops from Junk Food, you can layer innovation and newness, even in tough mass fashion tops with Fortune economic times, you can have a highly saleable product.” Fashions and jewelry with H.E.R. Accessories. Starting with holiday, a larger array of items will be in- troduced, including handbags from Bioworld, stationary with iScream, color cosmetics with Lotta Luv, and watches and fashion jewelry with MZ Berger. The plan, Gitter said, is to have a full Marvel lifestyle brand of products available before 2012. Marvel is negotiating deals for footwear, swimwear, outerwear, intimates and loungewear. Also, 79% of 1,000 people surveyed Fields said, the firm is looking for retail partners that can sup- nationwide can’t get rid of a port the Marvel brand in a big way by merchandising it as a full favorite, sentimental old T-shirt. lifestyle. In addition, Fields said (Source: Synovate for BlueCotton.com) Marvel has signed a deal with Lotta Luv for cosmetics. they eventually hope to co-brand

S-3 Group Created to Encourage Consumers to Think Small NEW YORK — Business might be bad, but small retailers “We want to make the month of May a joyful here are working to fight back. one where people can come to our stores and have As the economy moves through the recession, fun, shop and help support the economy,” said many independent retailers are suffering. That’s why Brookoff, who has been running her Legacy store a group of about 60 store owners in Manhattan have for more than 30 years. “We need people to spend banded together to start S-3, or Shop Small Stores, in our stores and support us because without us, an organization on a mission to educate consumers the fabric of New York will not be the same.” about the importance of supporting small, indepen- S-3, which hopes to become a model for a city- dent retailers. wide umbrella organization, is trying to get local The group was founded by Fern Penn, owner of officials involved. the SoHo boutique Rosebud. Penn was soon joined “We’d like to have the city help us out with by two other local shop owners, Rita Brookoff from more tax-free days to get consumers back to Legacy and Linda Pagan from The Hat Shop. Penn spending again,” said Penn. said high rents are having an adverse impact when Recognizing the plight of such retailers and sim- combined with lower sales. ilar small businesses, President Obama offered a “Slashing prices by 70 percent is not the answer,” fresh aid package last week with steps to get credit Penn said. “We have to make the customer under- flowing to small companies. Obama said small busi- stand that small stores lend character to a neighbor- nesses were responsible for about 70 percent of the hood and character to the city, and provide personal new jobs created in the last decade. attention and expertise.” Betsy Imershein speaks about May “Every other store down here is closing,” said Representatives of more than 25 Manhattan Madness at an S-3 meeting last week. ERICKSEN KYLE BY Larry Davis, manager of Selima’s SoHo store. “It’s stores, with many from SoHo, attended the group’s pretty bleak. It’s happening everywhere: SoHo, first meeting in January, including Selima Optique, PHOTO Madison Avenue.” Sacco, Koos, Legacy and Wendy Mink jewelry. After the third meeting last week, near- Members of S-3 plan to share information and resources. ly 60 retailers were on board, including a SoHo children’s boutique, Bundle, Olive & “People come in all the time asking where they should buy this or that,” Davis said. Bette’s and even a NoLIta-based cafe, Divalicious Chocolate. “All the retailers will work together to cross-promote one another.” Members of the organization have designed bright yellow decals with the S-3 logo Betsy Imershein, a consultant who is advising the group, said she’s looking at Shop for store windows and are distributing postcards with the names and addresses of par- Brooklyn, an initiative rolled out by the borough president’s office in December, for ideas. ticipating stores. A May Madness event is planned with a Thompson Street block party. “Shop-local movements around the country have been incredibly successful,” she said. Store owners are encouraged to offer a partylike atmosphere in each of their stores for “There are tax benefits for chains that can afford bigger rents, but none of that money the month of May, ranging from upbeat music, serving refreshments or just decorating stays in the community. With small stores, the sales go back into the community.” the store with yellow balloons or streamers, since yellow is the color of the S-3 logo. — Sharon Edelson and J.K. 3x7 (right)

WWD, THURSDAY, MARCH 26, 2009 11 WWD.COM Chicago Market Preview MARKET CALENDAR NEW LINES

Stylemax, the Midwest’s largest women’s apparel and The following labels are making their Chicago accessories trade show, will take place March 28 to 31 at market debuts. Chicago’s Merchandise Mart, 222 Merchandise Mart Plaza, showcasing more than 4,000 resources for fall on 100,000 Women’s Apparel square feet on the Mart’s 7th floor. The market runs concurrently 2 B Rych: Contemporary sportswear; Booth 6072 with “National Bridal Market Chicago,” March 29 to 31, also at Snowflake: Tailored contemporary sportswear the Merchandise Mart on the 8th floor. from Canada; Booth 8065 Sanctuary: Contemporary denim and sweaters; Stylemax Show Hours: Atrium. View select bridge Booth 8063 Saturday to Monday, 9 a.m. and designer brands in this Blue Canoe: Eco-friendly lifestyle line; Booth to 6 p.m.; Tuesday, 9 a.m. to runway presentation. 3078 3 p.m. March 29 CBE Hoody: Men’s and women’s fleece hoodies 8 a.m.: Breakfast from Canada; Booth 9097 Special Events 8:30 a.m.: Montreal Fever Knitwear: Sweater collection; Booth 6042 March 28 Collections Fashion Show, Spratters and Jane: Knitted wool shawls with Writing orders at Stylemax in October. 6 p.m.: “The Collections” 8th Floor Special Event recycled buttons; Booth 3081 Fashion Show and cocktail Atrium; Runway show Rebel Green: Contemporary T-shirts; Booth party. Show starts at 6:30 sponsored by the Quebec 7130 p.m., 8th Floor Special Event Delegation Chicago. Dirty Pink: Novelty T-shirts; Booth 8066 Bejeweled: Graphic-inspired embellished T-shirts and sportswear; Booth 7070 The New Reality Sugar and Bruno: Contemporary yoga and SCENE dancewear; Booth 7129 By Beth Wilson KEEP IT LOCAL: In these tough economic times, even the Windy Intimate Apparel Like their counterparts across the country, Midwest City’s well-heeled are opting for a weekend stay-cation. The Cotn Lu: Contemporary lingerie; Booth 4130 retailers and vendors will enter saturday’s stylemax, the region’s 14th floor spa suites at the downtown Trump International Urban Posh: Lingerie; Booth 4109 largest women’s apparel market, with tempered expectations. Hotel & Tower, located just slipper-clad footsteps away from the DKNY Intimates: Booth 3130A “they tell me ‘even’ is the new ‘up,’” quipped susan Mccullough, hotel’s relaxing spa, boasts 600- to 900-square-foot rooms with Kay Anna: Robes and loungewear; Booth 3130 senior vice president for apparel for Merchandise Mart properties their own yoga kits, healthy minibar snacks (including dried inc. “nobody’s going to write the same amount of orders they did fruit and lemongrass green tea) and a warming caddy to heat Accessories and Footwear last year. we’re all living in a new reality. we’re just trying to get herbal-scented neck and eye pillows. Soft music and a custom DeGroot Handbags: Upscale leather handbags; through this year. everyone’s just trying to hang on.” spa scent fill the hallways, adding to the Zen-like atmosphere. Booth 2085 early predictors, including the number of booked hotel rooms So far, hotel employees say the suites, which opened last Sherpani: Trendy handbags and laptop bags; and vendors registered, are tracking as expected, said Mccullough fall, have been a hit with business travelers seeking a respite, Booth 4033 about stylemax, which runs March 28 to 31 on the 7th floor of the nearby residents looking for a getaway and those planning AC Lynn: Higher-end handbags; Booth 2087 city’s Merchandise Mart. a special girls’ get-together. Signature spa services include Michal Negrin: Vintage inspired jewelry; Booth “we’re on par with last year,” she said, noting there has been no gemstone massages (complete with diamond or sapphire- 4097 reduction of vendors, “but it’s a little bit of a wild card this year.” infused oils) and the Ultimate Kate, a Kate Somerville facial Pea Pack Mittens: Recycled handmade mittens; the March edition of stylemax is traditionally the largest of the — a favorite of Ivanka Trump, vice president of real estate Booth 3083 year and this market coincides with the national Bridal Market development for the Trump Organization and daughter of the Spare Soles: Ballet-style flats and other chicago, held on the Mart’s 8th floor. Donald, who is a regular at the hotel. footwear; Booth 4129 in turn, Mccullough expects retailers will turn out to shop. “they have to buy something somewhere,” she said. “people are just looking twice at things, which, as good business people, i think they should. what we’re hoping is that by fall, there will be pent-up demand.” not surprisingly, Mindy kobusch, owner of koastal konnection showroom at chicago’s apparel center, said labels with the poten- tial for higher markups are moving well, particularly a lower-priced line of scarves from Vsa, selling at wholesale for $6 to $11 and at retail for $26 to $38. “My prices are sharp and even though the market is down, we’re getting reorders,” she said. still, kobusch has had to work hard to keep business steady, traveling more and offering event-planning ideas to retailers. But at least she’s able to move product, she said, citing success with the designer-inspired Luii jacket line, which wholesales for $36 to $46; XcVi, a collection of poplin and French terry separates that wholesales from $34 for cropped pants to $55 for poplin blazers, and novelty tops from Mystery, which wholesale for $12 to $22. kobusch, like many others, declared the current climate is the worst she’s seen in her 30-plus years in business. Midwest specialty stores in more rural areas were hurt by the entry of big-box retail- ers like target, wal-Mart and others. some of those in Michigan, home of the country’s struggling auto industry, have been unable to survive and closed. she’s also concerned about the number of retailers canceling orders. “we’ve had great shows,” she said, “where it looks good on paper and then you start getting cancellations due to poor business.” kobusch recommends that stores consider discounting merchan- dise that doesn’t sell within the first month to 45 days. “a lot of re- tailers hold on to the bitter end,” she said. “if it hasn’t sold in six weeks, put it on sale. at least then you’ll get some money back.” For fall, she believes novelty tops and jackets will be the stron- gest sellers because they pair with what shoppers already own. “everyone has jeans and their favorite black pants,” kobusch said. in response to the economy, specialty store owner Jessa Brinkmeyer added a vintage section this February to her eco-fash- ion boutique, pivot, on west Fulton Market in chicago. selections include previously worn blazers, printed blouses and handbags selling for $15 to $100, averaging about $40. “customers like the variety it adds,” said Brinkmeyer, who opened pivot in 2007. today, the shop stocks bamboo sweater vests from local designer Lara Miller as well as light organic cotton dress- es and tailored jackets from eco-Ganic. overall, prices run from about $35 for basic tanks to $350 for jackets. Brinkmeyer, who plans to investigate new eco-friendly lines at stylemax, said while people have been shopping less, the fact that her store carries clothes that are kinder to the environment remains a key point of difference she hopes will resonate with chicagoans this spring. “people are looking for pieces that are unique and meaningful,” she said. “and people have been pent up this winter. the warmer weather and change in seasons will bring people out.” 3x7 (left)

12 WWD, THURSDAY, MARCH 26, 2009 WWD.COM Inditex Net Slips, Sales Gain FASHION SCOOPS WU-ING THE CROWD: “I’ll never be about the $20,000 phantom dress that By Robert Murphy Spain],” he said. no one wears,” said Jason Wu, who was the guest of honor at a small dinner Inditex has been concentrating on opening hosted by Net-a-Porter.com Tuesday night at Blakes in London. “I try to walk PARIS — Inditex, the Spanish parent of the Zara more stores outside of Spain, which last year ac- that fine line between commercial, editorial and runway looks.” The crowd, fast-fashion chain, on Wednesday posted better- counted for 34 percent of total business. mostly editors and private clients — including Sly Bailey, chief executive of than-expected fourth-quarter results as it resisted Europe outside of Spain last year accounted the U.K.’s largest newspaper publisher, Trinity Mirror — were all wowed by recessionary trends. for 45 percent of sales, with Asia and the Americas the designer’s kudos at the tender age of 26. But Wu was having none of it. The retailer said net income in the three kicking in 10 percent and 11 percent, respectively. “I’m going to be 27 this year,” he said. The designer was on a flying visit to months through January declined 3.5 percent to Inditex’s Zara cash-cow chain represented London, a place he hadn’t seen since he was a teenager. “The city is so chic 410 million euros, or $598.6 million, outpacing more than 65 percent of the firm’s overall busi- — I love all the low buildings.” most analysts’ expectations. ness last year. Zara’s net sales improved 9 percent Sales in the quarter advanced 8.9 percent to to 6.82 billion euros, or $9.96 billion. The sales IF THE SHOE FITS: Only in a fairytale would luxury brands like Jimmy Choo 3.05 billion euros, or $4.45 billion, from 2.8 billion growth in local currency and constant store count give away glamorous footwear. Or for a fairytale-inspired charity, that is. euros, or $4.09 billion, a year earlier, as the firm improved 11 percent, Inditex said. Enter the Cinderella Project, where stylists, designers and fashion opened more stores outside of its home market Inditex said its Stradivarius chain, which rep- experts come together by donating clothing, accessories and shoes to high- of Spain. resented 6 percent of total sales, and the Pull and school girls who otherwise couldn’t afford the apparel to attend their senior Revenues for the 12 months ended Jan. 31 rose Bear stores, representing almost 7 percent of total prom and other events. Each spring, the nine-year-old Los Angeles-based 10.3 percent to 10.41 billion euros, or $15.19 bil- sales last year, contributed strong performances. organization accepts donations of footwear, gowns and handbags to outfit lion. Inditex opened 573 stores last year, augment- Economic turbulence wreaked more havoc hundreds of young, disadvantaged girls throughout Los Angeles for the ing its total store space by 15 percent. on the Zara Home and Oysho lingerie chains last upcoming prom and special event season. For the year, however, like-for-like sales were year, Inditex said. A force behind the charity drive is Florence Azria, wife of Joie label owner unchanged and net profits inched up only 0.2 per- Meanwhile, the firm said its recently launched Serge Azria (brother of BCBG’s Max), who’s a footwear fanatic herself — she cent to 1.25 billion euros, or $1.83 billion. Dollar Uterqüe accessories chain, which finished the runs The Shoe Goddess, a blog dedicated to luxury footwear. figures are converted at average exchange rates year with 31 stores, outpaced expectations and “It’s such an amazing thing to see these girls feel so good about for the period. that more new international markets would be themselves, and they deserve to. How can you not love that?” Azria said. Pablo Isla, chief executive officer of Inditex, targeted for Uterqüe stores this year. Jimmy Choo, BCBG, Chinese Laundry and Payless Shoe Source have already told a press conference in Madrid that though Looking ahead, Isla said the firm would con- donated hundreds of pairs of shoes for the project’s 2009 collection drive, Inditex was “not immune to crisis,” the results tinue to open stores despite the “challenging” en- which will take place May 1. demonstrated the “strength of our business plan.” vironment. He predicted business would remain “[Our commitment] is to better our product and tough through the year. BODY BY ANYA: Fashion showrooms are typically pristine, rarefied places customer service,” he said, pledging continued ag- He said capital expenditure this year was where products are carefully displayed on glossy shelves. But on Monday gressive expansion, particularly in China, as well earmarked at 600 million euros, or $875 million, night, Anya Hindmarch’s Meatpacking District studio in Manhattan was as Japan and South Korea. He said Zara would mainly to open more Zara stores. Ninety-eight transformed into a gym for a boot camp led by fashion favorite (and open its first stores in India next year. percent of some 135 Zara stores scheduled to open Equinox trainer) Lacey Stone. Among girls there to get sweaty were house Sales in February increased 9 percent in local this year will be outside of Spain. model Poppy Delevingne and “Gossip Girl” star Nicole Fiscella — who, currencies, and Inditex said it would focus on Overall, 370 to 450 new stores under such despite her tiny frame, won the push-up competition and was arguably “profitable expansion” by adding some 2.5 million banners as Zara, Pull and Bear, Massimo Dutti, the fastest in the multifloor stair run. The session, the second in a square feet of retail space in 2009, about 95 per- Bershka and Stradivarius are scheduled to open series, was inspired by the weekly fitness class the designer hosts at cent of it outside the sluggish Spanish market. over the course of the year, with 75 percent of her London office. Of course, it wouldn’t be an Anya Hindmarch event Isla said sales in Spain, beset by the credit those openings targeted for the second half, sug- if it wasn’t properly accessorized — there were Anya-branded yoga mats crunch and a disintegrating real estate market, gesting Inditex expects the cloudy economic envi- and tank tops reading “Anya’s Gym Class: Bags & Biceps.” After happily grew about 1 percent last year. “Currently we are ronment to clear somewhat later this year. huffing and puffing their way through star jumps, squat holds and being very selective about adding new stores [in — With contributions from Barbara Barker, Madrid endless lunges, the group gathered for a nutrition session courtesy of Heather Bauer, founder of Nu-Train. Among her tips? Always leave three quarters of your plate empty and put your knife and fork down at least three times during the meal. SHOW SPECIAL WWD Professional Subscription Pinault Speaks On Stay on top of Sustainable Luxury the fashion By Mahlia Lone NEW DELHI — Luxury goods and sustainable development are not industry mutually exclusive, according to luxury and retail titan François- Henri Pinault. Speaking at an International Herald Tribune luxury conference ANYTIME. here Wednesday, Pinault asserted that “more than ever, people want to return to genuine values such as timelessness, sincerity and ex- emplary standards.” ANYWHERE. Pinault, who is chairman and chief executive officer of PPR, par- ent of Gucci Group, said in a keynote address that his version of sus- tainable luxury — the conference’s theme — encompasses ethics, collectivity and conservation. Conservation of the world’s natural resources is desirable, but also the continuation of knowledge and respect for craft and materials, he said. Luxury is not superfluous, as it protects trades and skills, the sus- tainability of which is a necessity for human endeavor, he argued. “The duty of luxury is not only to act, but also to mobilize,” he said. “I believe luxury is not just sustainable, but responsible.” Pinault also took the occasion to trumpet PPR’s new foundation for women and the PPR-produced documentary “Home,” slated for worldwide release on the Internet, television and in theaters on June 5, World Environment Day. Let us design a subscription How luxury brands can sustain their growth of the last 15 years program for your company. Contact is a hot topic at the two-day conference, hosted by IHT fashion edi- tor Suzy Menkes. Richard Franz at 212-790-4457 or Sustainability has become the most important ingredient [email protected] of fashion now, said Nicolas Ghesquière, creative director of Balenciaga. He said he chose to make his new Los Angeles store eco-friendly and energy efficient, and it will serve as the model for all his future boutiques. Dries Van Noten, who has been getting his clothes and accessories embellished in Indian ateliers for 20 years, said he has invested in im- proving the working conditions and income of his embroidery work- ers in Calcutta. Earlier, it was not possible to produce white garments, as the workshops were too dirty. Recently, the Belgian designer used white in his collection and had the clothes produced in India. “Time is required to achieve deep luxury,” said Christian Go to www.subnow.com/wo/fto for your Blanckaert, executive vice president of Hermès International. He as- serted that in times of economic recession, people prefer to spend ONE MONTH FREE TRIAL OF WWD.COM money on quality, durability and timelessness rather than fast fashion. WWD, THURSDAY, MARCH 26, 2009 13 WWD.COM BEAUTY BEAT Freda Named Estée Lauder’s Next CEO Continued from page one plan to restructure the business for a needed resur- William P. Lauder and gence of profi table growth. Fabrizio Freda Recently, during an exclusive interview with WWD, Freda prefaced his analysis of the 63-year-old beauty fi rm. “The landscape I found is a great company with great brands, very strong people and an amazing rela- tionship with their channel — their core channel — and a great ability to execute in store. Most importantly, amaz- ing creativity and entrepreneurship are really in the genes of the company,” said Freda. On the other hand, he said, “I found a company with little ability to exploit scale, little ability to leverage the strengths across the op- portunities and across the markets internationally.” In early February, he started to outline the broad strokes of the restructuring plan to resize the company. The four-year restructuring effort, when completed, is expected to wring out $450 million to $550 million in costs. The fi rst steps of that effort include trimming its workforce by 6 percent, or 2,000 employees, over the next 18 to 24 months. As a result of the plan, the fi rm expects to achieve an operating margin of 12 to 13 percent. Longer term, Freda forecasts the company has potential to achieve a 15 percent operating margin with a very solid growth plan. He acknowledged because of the recession’s grip, Lauder is now operating in the 7 to 8 percent arena. Turning to the need for increased effi ciencies, Freda Leonard has framed a plan to consoli- Lauder date brand infrastructure globally. Freda noted that over the decades, Lauder amassed 29 brands, each which has their own support structures and global strategies. Freda said, “Every country is like its own little kingdom have identifi ed which brands we want to invest given enough creativity discipline is not needed to bring with its own organization, its in, which brands we want to build and acceler- a product to market. own rules, its own distribution ate growth, and which brands are today under- “It’s about making one company, one team, one center, even its own buying of- performing by our standards,” said Freda. “For dream all together versus let’s each one [operate] on its fi ce….There was little coordina- each of the underperforming brands, we have own. It can be a real one-dream company.” tion and a lot of duplication.” put a specifi c plan in place for the next 18 to The backbone of this vision is the call for Lauder to Earlier this week, BMO 24 months.” become “more fi nancially disciplined.” Capital Markets analyst If the company is not successful in turn- The engine of his plan for brand growth is driven by Connie Maneaty said of ing around these brands, Freda said, “We will an intense and ingrained belief that the company must Freda’s ability to succeed at make different decisions.” put the consumers’ desires in the center of its market- Lauder, “The family’s stock In all the talk of sweeping restructuring, ing plans. interest speaks volumes. But Freda very deliberately pointed out that the During a separate interview this week, William Freda is coming to a company essential brand dominated character of the Lauder reiterated that he will work in close partnership where the brands were run independently and had little company will not be tampered with. with Freda. In addition, to handling corporate responsi- coordination. So there’s lots of duplication. It’s an op- Although the structure will be simplifi ed, he said, bilities and tackling issues of strategy, for which he has portunity to drive out costs.” “The concept of being a brand-led organization will not a passion, Lauder said he will work to enable Freda to Freda’s remedy is to reorganize operations into con- change.” succeed and provide support. tinentalwide groups, such as North America, Europe, One of the more eye-opening departures involves Leonard Lauder added that his son is very adept at Middle East, Asia, Latin America and travel retail. compensation as a carrot for managers to work toward handling increasingly voluminous and complex propos- Freda said the company-wide mission is to remain the same leadership mission outlined by Freda. als on the government regulatory front. “He’s the right the global specialist in prestige beauty. “If you imagine To solidify the call for person at the right time,” the a company which is about, fi rst of all, a global prestige more collaboration among elder Lauder said. beauty leader, well diversifi ed brand powerhouse pivot- the brands, Freda explained Although in the past Wall ing on creative innovation — that’s the heart of the com- that the new compensation [Freda’s] strategic vision and Street has chided the com- pany. That’s what we have confi rmed because it has been structure will be used as an “ pany for what was consid- like this for a long time. That’s what we want to be.” incentive to get executives ability to keep the consumer at ered laggard productivity Freda repeatedly made the distinction between top- to work together to achieve a and slow-moving efforts to di- line gains and sustainable, profi table growth. He is common goal. the center of our business model versify into other U.S. retail clearly intent on achieving the latter. People will continue to be channels, the senior Lauder Freda said the company’s goal — even in this re- rewarded for their own unit’s will be instrumental in continuing asserted, “I am extremely cession period — is to grow one percent ahead of the results, but part of the reward proud of how far William global markets. will be tied to the results of to take us forward. has taken the company dur- “If it is a recession, the markets will be fl at, so we ex- the total company. ing his tenure as ceo. During pect to grow at least one percent. If one day the markets For instance, he said if — Leonard Lauder, the Estée” Lauder Cos. Inc. his watch, the company suc- go back to growing 5 percent a year, we expect to grow a you are working in a region cessfully expanded its global minimum 6 percent a year.” that is doing very well, but if reach by entering new coun- Freda appears to work on the concept of portfolios of your brand is not contributing to the results then “your tries such as Vietnam and India and accelerated our brands. He noted, “We want to have more brands above compensation will be affected in a relevant way.” international growth signifi cantly, particularly in China $1 billion and we want to have more brands above half a During the WWD interview, Freda tipped his hat and Brazil.” billion dollars. However, we can have brands which are to certain Lauder family values that have become in- He added that during his son’s 5-year tenure, William smaller and very profi table.” grained in the corporate culture. “For family values I Lauder expanded distribution into new areas, includ- He pointed out, Lauder’s long-standing belief that a mean their respect for individuals, their passion for ing company-owned freestanding stores and TV retail- brand’s productivity by door is more important than its entrepreneurship, their great respect for creativity, ing. He also led the company’s e-commerce area, which total size. He said he prefers a small brand with very selec- their great sense of humanity — which is in every- today is the fastest-growing segment. He also spearhead- tive distribution, meaning that it is very important to those thing we do — the excellent relationships with the ed the formation of BeautyBank. Prior to becoming ceo, retailers, rather than widely distributed brands that have trade and making personal relationships as one of the he founded the Origins brand and served as president low sales per door. “They are not very profi table,” he said. key steps of trust building…the key challenge would of Clinique. Under Freda’s plan, Lauder’s 29 brands have been be actually to maintain them and there is no reason In speaking of Freda, Leonard Lauder said, “Fabrizio sorted into three groups. The top $1 billion dollar club for changing them. is a perfect fi t with the Estée Lauder Cos.’ culture. His includes Clinique, the Lauder brand and MAC Cosmetics. “On the contrary, there are elements that we need to strategic vision and ability to keep the consumer at the Then there is the middle half-billion tier, followed by the change,” he continued, pointing to the silos approach center of our business model will be instrumental in smallest brands in the range $100 million and up. to business that each brand and “the fact that growth continuing to take us forward. I have every confi dence There’s also a list of underperforming brands in need is the only thing that counts and cost control and pro- that Fabrizio and William will make this leadership of improvement. ductivity are less important, or that creativity is every- transition seamlessly and together, they will lead the “We have fi nished the review of the brands and we thing.” Freda added that part of this attitude is that company to new heights.” 14 WWD, thursday, march 26, 2009 WWD.COM Financial For full daily stock changes, see WWD.com.

Charges Lead Signet to Loss in Qtr. 10 Best Performers The weakening business envi- sales in the new year helped to lift shares ronment and accounting quirks took their of Signet $1.22, or 10.8 percent, to $12.50. DAILY COMPANIES P/E Volume Amt toll on the fourth-quarter results of Signet While charges threw Signet to a loss, Jewelers Ltd., parent to Kay Jewelers and the sale of its CCS skateboard catalogue High Low Last %Change Jared the Galleria of Jewelry. business to Foot Locker Inc. allowed Also on Wednesday, Delia’s Inc. re- Delia’s Inc. to more than triple its ported a fourth-quarter profit, largely fourth-quarter profits. 0.45 0.30 Birks & Mayors (BMJ) - 17114 0.45 +66.67 from the sales of its skateboard cata- Net income for the three months ended logue business, and Citi Trends Inc. re- Jan. 31 soared 275.8 percent to $22.6 mil- 0.15 0.09 NexCen (NEXC) - 760138 0.12 +33.33 ported higher profits for the quarter and lion, or 73 cents a diluted share, compared also named David Alexander, president with $6 million, or 19 cents a share, in the and chief operating officer, to succeed year-ago period. Excluding the aftertax 0.14 0.11 Phoenix Footwear (PXG) - 5400 0.14 +27.27 Ed Anderson as chief executive officer impairment and restructuring costs relat- upon Anderson’s retirement April 4. ed to the sale of the CCS business on Nov. 2.20 1.74 Zale (ZLC) - 2249938 2.04 +24.39 In the three months ended Jan. 31, a 5, the firm registered a net loss of $873,000, $516.9 million charge to write down the or 3 cents a share. Revenue grew 0.1 per- 0.35 0.28 Joe’s Jeans (JOEZ) 2.8 316862 0.34 +20.94 value of legacy acquisitions led Signet cent to $67.2 million, from $67.1 million a to a net loss of $424 million, or $4.97 a year earlier. Retail sales increased 6.9 per- 0.53 0.41 Eddie Bauer (EBHI) - 2892850 0.49 +19.51 diluted share, versus year-ago earn- cent to $33.9 million, while direct sales fell ings of $143 million, or $1.65. Based in 6 percent to $33.3 million. Hamilton, Bermuda, Signet changed the For the year, the retailer had net 2.80 2.30 CBL (CBL) 15.3 3291457 2.66 +16.16 way it handles its books after switching income of $17.2 million, or 55 cents a the primary listing of its shares to the share, versus $2.3 million, or 8 cents a 1.80 1.60 Bon-Ton (BONT) - 200289 1.77 +10.63 New York Stock Exchange and adopt- share, in 2007. Net sales rose 7 percent ing U.S. generally accepted accounting to $215.6 million, from $201.6 million. 0.72 0.60 General Growth (GGP) 6.4 6118922 0.70 +9.37 principles, or GAAP. Most of the good- Value-priced retailer Citi Trends post- will that was written off related to ac- ed a 20 percent leap in fourth-quarter 2.71 2.43 Coldwater Creek (CWTR) - 510664 2.69 +9.35 quisitions made in 1990 and before. profits. Net income moved to $10.1 mil- For the quarter ended Jan. 31, sales lion, or 70 cents a diluted share, versus fell 18.9 percent to $1.12 billion from $8.4 million, or 59 cents a share, in the $1.38 billion. year-ago period. Net sales grew 8.9 per- For the full year, Signet’s losses of cent, to $146.6 million from $134.6 mil- 10 Worst Performers $393.7 million, or $4.62 a diluted share, lion, but fell 1.9 percent on a same-store compared with earnings of $219.8 million, basis. Analysts were looking for earnings DAILY COMPANIES P/E Volume Amt or $2.55, a year earlier. Sales dropped 8.8 per share of 55 cents on sales of $146.6 percent to $3.34 billion. U.S. sales ac- million, according to Yahoo Finance. High Low Last %Change counted for $2.54 billion of the total. For the year, net income grew 22.3 per- “Given the very challenging environ- cent to $17.4 million, or $1.22 a share, com- ment, the group has made an encour- pared with $14.2 million, or $1 a share, in 0.37 0.33 sport-Haley (SPOR) - 400 0.33 -21.43 aging start to fiscal 2010,” said Terry 2007. Revenues increased 11.6 percent, to Burman, ceo. “In the U.S., same-store $488.2 million from $437.5 million. sales for the first seven weeks were Following his retirement, Anderson 2.36 1.82 Retail Ventures (RVI) 1.7 207142 1.90 -16.67 down 2.7 percent….In the U.K., same- will remain with Citi Trends as execu- store sales for the first seven weeks tive chairman as well as chairman of 7.44 5.80 Macerich (MAC) 2.8 6120494 6.38 -7.94 were down 3.8 percent.” the company’s real estate committee. The relatively upbeat assessment of — Evan Clark and Alexandra Steigrad 9.94 8.50 DSW (DSW) 12.5 524707 9.22 -7.52 Victorinox Awarded Consent Judgments in Suit 1.45 1.20 Glimcher (GRT) - 454335 1.36 -6.85 0.32 0.29 Charles & Colvard (CTHR) - 16750 0.29 -6.45 Consent judgments were en- as serial numbers had been removed. tered against three independently op- Companies, particularly those in the erated perfume distributors last month, beauty industry, typically pay special 5.38 4.62 Chico’s (CHS) - 4192046 4.90 -5.95 the end result of a lawsuit filed by attention when such codes are missing Victorinox Swiss Army Inc. in November because they provide assurance to the 17.15 15.42 Urban Outfitters (URBN) 13.7 10090523 16.02 -5.93 involving the alleged sale of “decoded” buying public that products have been Swiss Army fragrances. manufactured and distributed under a 23.52 21.72 Alberto Culver (ACV) 10.0 1691537 21.75 -5.02 The lawsuit was filed in Manhattan fed- brand’s quality control standards. eral court by Victorinox against Perfume The defendants were enjoined from 2.70 2.33 stein Mart (SMRT) - 132673 2.50 -4.94 Network Inc., R.K. Fragrances Inc. and selling or distributing any decoded Perfumes 4 All Inc. R.K. Fragrances does Swiss Army fragrances or “any other business as Perfume Americana Inc., products bearing confusingly similar * Editor’s note: European stocks are quoted in the currency of their principal exchanges. Shares on and Perfumes 4 All Inc. does business marks,” among other points. the London Stock Exchange are quoted in pence, Richemont and The Swatch Group are quoted in Swiss as Fragrance Globe, according to court Victorinox has been active in protect- francs and Hennes & Mauritz is quoted in Swedish kronor. All other European stocks are in euros. records. A copy of the complaint was not ing the Swiss Army brand against both available through the court. infringers and counterfeiters. “Already, The consent judgments said the lawsuit counterfeit imitations of our fragrances asserted claims for trademark infringe- with an estimated retail value of more Retail Stocks’ Wild Ride Ends With 0.9% Gain ment and unfair competition, as well as than $1 million have been seized by the Retail stocks rose and fell and the number of new homes sold was false designation. They also disclosed the alert action of the U.S. Customs and rose again Wednesday, ending with a 0.9 down 41.1 percent from a year earlier, legal action involved Swiss Army fragranc- Border Protection with our coopera- percent increase as investors tried to de- illustrating just how far the real estate es, which had been “decoded,” meaning tion,” said Veronika Elsener, chairman termine if the rally of the last two weeks market has fallen. that batch codes or radio frequency iden- of Victorinox. would continue. Economists argue the housing sector tification tags containing information such — Vicki M. Young The S&P Retail Index increased led the country into the recession and the 2.47 points to 288.71 and the broader credit crunch and must begin to rebound Dow Jones Industrial Average climbed for a recovery to set in. 89.84 points, or 1.2 percent, to 7,749.81. The downturn has hit not only the av- Swarovski Plans More Cuts at Austria Plant Retail stocks have risen 26.2 percent erage consumer, but also to a lesser ex- MILAN — Crystal giant Swarovski is to February and more than 700 employees since March 9, the day before banking tent, the executive suite. make yet another round of cuts at its pro- lost their jobs there last year. giant Citigroup Inc. encouragingly said Despite Gregg Steinhafel’s rise to duction facility in Wattens, Austria, in re- In September, Swarovski, which has it had turned profitable in January and Target’s Corp.’s corner office in May, sponse to worsening market conditions. operated sites in and around Wattens February. the discounter’s chief executive of- A Swarovski spokeswoman confirmed since 1895, said it was to invest 120 mil- Some of Tuesday’s back and forth ficer took a 2.9 percent cut in his pay Wednesday that 600 more jobs were to go lion euros, or $163.2 million, to modernize came as weaker-than-expected demand last year, bringing in $5.9 million, at the site this year, reducing the head- the plant. At the time, the company also for five-year Treasury notes at a govern- according to a proxy filed with the count to around 5,000. She added the fam- said it was considering shifting parts of its ment auction outweighed news that new Securities and Exchange Commission. ily-owned company was mulling a further production to India or China before 2010. home sales rose. China, a key holder of Steinhafel’s take-home included a base 500 layoffs there next year, although the It has plants in eight other countries, in- U.S. debt, has recently expressed con- salary of $1.3 million as well as $72,794 precise number was still to be decided. cluding the Czech Republic and Thailand, cerns about the U.S. dollar and the finan- worth of personal travel in company It is the fourth wave of cuts at the facil- and employs 23,900 people worldwide. cial crisis, and floated the idea of a new aircraft, which Target said was a secu- ity in the last 18 months, after Swarovski, Last year, Swarovski generated rev- global currency to replace the dollar. rity precaution. Steinhafel succeeded which counts two-thirds of its produc- enues of 2.52 billion euros, or $3.7 bil- New home sales increased a season- Robert Ulrich, former chairman and tion in the euro zone, saw revenues and lion. Dollar figures were converted at ally adjusted 4.7 percent in February ceo, as chairman on Jan. 31. Shares of earnings growth dented by the economic average exchange rates for the periods compared with January, the first Target increased 0.5 percent to $33.23 crisis and competition from emerging to which they refer. month-to-month increase since July, on Wednesday. markets. There were 150 redundancies in — Andrew Roberts said the Commerce Department. Still, — E.C. WWD, THURSDAY, MARCH 26, 2009 15 WWD.COM/CLASSIFIEDS

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