CHINA, VIETNAM IMPORTS SURGE/8 WOMEN’S NEW MIND-SET/12 WWDWomen’s Wear Daily • TheWEDNESDAY Retailers’ Daily Newspaper • May 14, 2003 Vol. 185, No. 99 $2.00 Sportswear The Mod Squad NEW YORK — Move over, Austin Powers. Mary Quant’s vision of fashion is back this season as fresh Mod looks take over for fall. Here, at left, cotton dress and boots from Marc by Marc Jacobs. Paco Rabanne’s polyamide and elasthane leggings. Christie Martin earrings. At right, Jill Stuart’s cotton jersey turtleneck and wool jersey dress. Stephane Kélian boots. Kangol hat. Selima Optics sunglasses. For more, see pages 4 and 5. AGEMENT; STYLED ANTONIA BY SARDONE AGEMENT;
Spring’s Cold Start: Wal-Mart Strong but Others Suffer in Qtr. By Evan Clark the retailers kicking off the first- able to boast of double-digit earnings NEW YORK — Consumers apparently quarter earnings season Tuesday, as growth and a high-single-digit sales are watching their wallets even more were J.C. Penney Co., The May increase, it sent a cautionary chill closely than retailers are minding Department Stores Co. and TJX through the apparel markets with its their inventories. Cos. While the world’s largest discussion of rising stock levels and Wal-Mart Stores Inc. was among company, unlike its competitors, was See Rough, Page 10 PHOTO BY JOHN AQUINO; MODELS: EMILY/ELITE, PHOTO CAROLINE/SUPREME; JOHN BY HAIR AQUINO; ERIC BY MODELS: SEBBAG, EMILY/ELITE, MAKEUP ROANNA,BY BOTH FOR WARREN TRICOMI MAN 2 WWDWEDNESDAY Sizing Up SARS’ Impact Sportswear By Miles Socha impact,” according to Claire Goldman Sachs retains a cau- GENERAL , MAY 14, 2003 Kent, chief luxury goods analyst tious view on the sector despite PARIS — Will the luxury goods at Morgan Stanley in London. the end of the war in Iraq and Designers are recalling the flirty and colorful looks of London’s Chelsea in business recover quickly from “With non-Japan Asia hit by promising signs that SARS could 4 the carefree Sixties, and this fall, the Mod trend is ladylike, cool and sexy. the impact of SARS? Or will the SARS and Europe hit by lower be contained. But Dossin warned Wal-Mart was among retailers kicking off the first-quarter earnings season deadly epidemic, which has al- tourism, probably the more re- that “SARS could once again be- 1 Tuesday, boasting double-digit profit growth and a high-single-digit sales increase. ready claimed some 550 lives silient parts of the world for lux- come a serious problem in the in- and infected more than 7,400 ury are Japan and the U.S.” fluenza season later this year, and Analysts are debating the impact of SARS on the luxury sector, and await people, afflict the sector for Kent noted that in general, luxury goods news flow is likely 2 clues as firms start reporting sales and earnings this week.
WWD, WEDNESDAY months to come? watch and jewelry firms “have a to worsen, particularly given re- China and Vietnam muscled out foreign competitors in the first quarter and Investors will be looking for fueled the overall growth in apparel and textile imports. fresh clues this week. Hermès 8 and Bulgari are slated to report SUZY HAS THE DAY OFF first-quarter sales today, and SARS could once again become a Bulgari has already warned that “ Classified Advertisements ...... 15-19 the SARS outbreak would cause serious problem in the influenza season To e-mail reporters and editors at WWD, the address is it to miss its financial targets [email protected], using the individual's name. this year. later this year, and luxury goods news SUBSCRIPTION RATES LVMH Moët Hennessy Louis U.S. and possessions, Retailer, daily one year, $99; Manufacturer, daily one year, $135. Vuitton, slated to hold its annual flow is likely to worsen, particularly given All others U.S., daily one year $195. Canada/Mexico, daily one year, $295. All other foreign (Air Speed), daily one year $595. Please allow 6-8 weeks for service to start. Individual subscription information/Single Copy Sales : (800) 289-0273; shareholders’ meeting Thursday, outside U.S. (818) 487-4526; new group subscription information 212-630-4196 is also expected to give an up- retailers’ large inventories. Postmaster: Send address changes to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008. WWD (ISSN #0149-5380) is published daily except Saturdays, Sundays and holidays, with one additional date on recent sales trends. In — Jacques-Franck Dossin,” Goldman Sachs issue every month except July, and two additional issues in April and August, by Fairchild Publications, Inc. reporting first-quarter sales last a subsidiary of Advance Publications Inc., 7 West 34th Street, New York, NY 10001-8191. WWD is a registered trademark of Fairchild Publications Inc.© 2003 by Fairchild Publications Inc., month, LVMH said only DFS was a subsidiary of Advance Publications Inc. All rights reserved. impacted by SARS and that higher exposure to non-Japan Asia tailers’ large inventories.” No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying or recording, or by any information storage or retrieval system, except as may be sales of Louis Vuitton products than leather goods companies.” Also, “any further spread of expressly permitted in writing by the copyright owner. Editorial Reprints: (212) 221-9595 were advancing at a double-digit In a report last week, Gold- SARS, particularly to Japan, Periodicals postage paid at New York, NY and other offices. rate in early April in Hong Kong, man Sachs analyst Jacques- could seriously jeopardize luxu- Mailed under Publications Mail Sales Agreement No. 517054. Canada Post Returns to: P.O.Box 1632, Windsor, ON N9A 7C9 GST # 88654-9096-RM 0001 Canada Publications Agreement # 40032712 one of the cities hardest hit by Franck Dossin said 2003 earn- ry goods sales, in our view.” Printed in the U.S.A. the disease. ings could be down by as much To be sure, travel flows with- All signed articles published in the paper represent solely the individual opinion of the writer and not those of WOMEN’S WEAR DAILY. Luxury analysts are divided as 23 percent in his worst-case in Asia are down sharply, by as on the medium-term impact of scenario because of reduced much as 35 to 40 percent in For Web site access, log on and subscribe to www.WWD.com. the health scare, but acknowl- travel flows caused by SARS, April, according to Goldman edge that non-Japan Asia has war, terrorism risks and a dim Sachs estimates. A 50 percent been hit hard in recent weeks. economic outlook. The invest- drop is forecast for May. Sources said sales have been ment firm estimates that travel Goldman Sachs acknowl- In Brief down by as much as 50 percent purchases account for 33 per- edged the difficulty in estimating for some high-end brands. cent of luxury sales, with Gucci the duration of all the risk fac- “In general, we expect sales and LVMH being most depend- tors, but concluded that if all fac- FRENCH ISSUE: French retailer Pinault-Printemps-Redoute in non-Japan Asia to be down 25 ent on travel purchases. The tors were to have an impact for said Tuesday that it was launching a $977.5 million bond issue. The to 30 percent in [the second “travel spend” in Asia accounts three months, it would result in a issue could be increased to $1.09 billion if the company exercises quarter], but this also incorpo- for 7 percent of total luxury 10 percent swing in earnings. its increase option and to $1.25 billion if the overallotment option rates a negative exchange rate sales worldwide. Continued on page 11 is exercised. Dollar figures are converted from the euro at current exchange rates. In a statement, PPR chief executive Serge Weinberg said the offer allows PPR “to diversify its source of fi- nancing, to reduce the average cost and extend the average matu- rity of its debt and, potentially, to strengthen shareholders equity.” PPR said the premium range of the bonds was set at 43 percent of its share price at the time final terms of the bonds are determined. The bonds will come to term four years and 255 days from the set- tlement date, expected to be May 21. PPR, controlled by tycoon François Pinault, has been reshaping its profile this year, shedding its business-to-business activities to concentrate on its higher mar- gin luxury and retail operations. PPR controls Italy’s Gucci Group.