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Red Revival Johnson, Ironically the Former Employer of Avon’S New E JACK LOUBOUTIN’S MULQUEEN DIES Seventh BIG STEP Avenue legend EXCLUSIVE: CHRISTIAN LOUBOUTIN was 69. TO LAUNCH BEAUTY LINE. PAGE 5 PAGE 12 EASTERN PROMISE P&G to Relocate Beauty HQ to Asia By PETE BORN IN A BOLD MOVE loaded with symbolism, Procter & Gamble Co. has decided to move the headquarters of its skin care, cosmetics and personal care business from FRIDAY, MAY 11, 2012 ■ $3.00 ■ WOMEN’S WEAR DAILY Cincinnati to where its sees the future — Asia. As one unintended consequence, the executive who WWD originally recommended the relocation strategy, 49-year- old Gina Drosos, has decided to retire as group president of skin care, cosmetics and personal care, rather than uproot her teenage children by making the move east. Drosos, who will step down Sept. 1, will be succeeded by Deb Henretta, who is now based in Singapore as group president of P&G Asia and the specialty channel. The relocation was fi rst reported by WWD.com on Thursday morning. The consumer products giant said Thursday that it will relocate the divisional leadership team of about 20 top executives to Singapore, which is a major P&G hub. The division, which represents about a quarter of P&G’s total beauty business — estimated by Beauty Inc maga- zine at more that $19 billion for 2010 — will be reestab- lished in Singapore during the next year or so, putting the business leadership in “the center of the greatest growth opportunity for these categories over the next fi ve years and beyond,” the company said. The personal care and beauty giant quickly pointed out that the busi- ness unit “will remain focused on the important North American business.” During an exclusive interview, Robert McDonald, chairman, president and chief executive offi cer, said, “These kinds of organization moves we make are not designed for the next quarter, they are designed for the next century, the next decade. “[The move] does recognize that we are a global busi- ness, that the skin care business is largest in Asia, that the competition there is fi erce and that many of the trends — a growing number of the trends — begin there.” He added that P&G believes in dispersing headquar- ters of business units around the world. The strategy is SEE PAGE 6 Coty Calls On Buffett By MOLLY PRIOR COTY INC. IS GIVING AVON Products Inc. one last chance to consider its takeover proposal — and it’s lined up none other than Warren Buffett to help it out. After spending the last month working to win over Avon shareholders, Coty is once again lobbying Avon’s board. This time around, Coty has sweetened the offer with a higher bid of $24.75 a share, or $10.65 billion — and a new investor, Buffett’s Berkshire Hathaway Inc. Buffett’s company also has an investment in Johnson & Red Revival Johnson, ironically the former employer of Avon’s new E. Scott Beattie has big plans for the Elizabeth Arden brand he acquired just over a chief executive offi cer, Sheri McCoy. Avon made Coty’s letter, which was dated May 9, decade ago: to double its $850 million in annual retail sales in the next fi ve years public on Thursday, and did not immediately reject and land the fl agship brand in the top 10 in every market in which it’s sold. A fl agship the offer, as it did on April 2 following Coty’s initial bid strategy, a slimmed-down product assortment and a more upscale positioning playing on of $23.25 a share, or $10 billion. Instead, Avon said its board “will consider the letter in due course.” the brand’s signature red door are among his tactics. For more, see page 8. Despite Coty’s lingering interest, Avon’s shares closed down 3.3 percent Thursday at $20.89 on the New York Stock Exchange. Bart Becht, chairman of Coty Inc., made clear that his company’s offer has an expiration date. Avon has until Monday to respond, or Coty will withdraw the new offer, which is subject to an expedited due diligence process of several weeks. Becht wrote, “When we contacted you again last week, you advised us that Avon’s board of directors was not prepared to engage in any discussions regarding any revised proposal until Avon had completed a stra- tegic and operational internal review with its new ceo. PHOTO BY JOHN AQUINO SEE PAGE 7 2 WWD FRIDAY, MAY 11, 2012 WWD.COM Cucinelli Profits Rise in First Quarter THE BRIEFING BOX in the first quarter, both in terms “excellent results” in Japan and By LUISA ZARGANI of sales and margins, confirm the Korea, said the company. IN TODAY’S WWD brand’s momentum at an inter- All distribution channels saw MILAN — Newly public Brunello national level,” said Cucinelli. “It growth in the period, especially Cucinelli SpA reported a 36 per- seems there is a strong positive at Brunello Cucinelli stores. cent rise in net profits to 7.2 million attitude towards our product, the Sales at directly operated euros, or $9.4 million, in the first way we present it and, as a conse- stores rose 53 percent (of which Pieces from Mischa quarter ended March 31, compared quence, the lifestyle that evokes 18 percent to be attributed to the Barton’s collection. with 5.3 million euros, or $7 mil- a Made in Italy [product] of great boutiques existing at the end of lion, in the same period last year. quality, artisanal craftsmanship March last year) to 15.1 million Sales gained 17.1 percent to and, we hope, modernity.” Sales euros, or $19.8 million, and ac- 77.6 million euros, or $101.6 mil- in Italy totaled 24 million euros, counting for 19.5 percent of total lion, compared with 66.3 million or $31.4 million, in the quarter, revenues. Franchised stores saw euros, or $86.8 million, last year. down 1.2 percent compared with a 74.1 percent spike to sales of Earnings before interest, the same period last year, and ac- 10.6 million euros, or $13.8 mil- taxes, depreciation and amortiza- counting for 30.9 percent of total lion, accounting for 13.6 percent tion climbed 27.6 percent to 12.9 revenues. Sales in other European of total sales. As of March 31, million euros, or $16.9 million. markets grew 18 percent to 24.2 Brunello Cucinelli stores totaled Dollar amounts have been con- million euros, or $31.7 million. 38, up two units compared with verted at average exchange rates Revenues in the U.S. climbed 30.6 the first quarter last year. for the periods to which they refer. percent to 18 million euros, or Wholesale sales totaled 52 mil- The brand’s namesake found- $23.6 million, accounting for 23.2 lion euros, or $68.1 million, up 3.2 er said that “expectations for the percent of sales. In Greater China, percent compared with last year, year are good, our goal is a solid, sales rose 23.5 percent to 2.9 mil- and accounting for 66.9 percent of Procter & Gamble Co. has decided to move the sustainable and graceful growth.” lion euros, or $3.8 million, or 3.8 total revenues, compared with a headquarters of its skin care, cosmetics and personal care PAGE 1 The company made its debut on percent of total revenues. 75.9 percent share last year. business from Cincinnati to Singapore. the Milan Stock Exchange on April The rest of the world grew On Thursday, shares closed 27, floating 30 percent of its shares. 59.8 percent to 8.5 million euros, down 1.41 percent to 10.50 euros, Coty Inc. increased its bid for Avon Products Inc. to $10.65 PAGE 1 “The solid results achieved or $11.1 million, also lifted by or $13.61 at current exchange. billion in a letter addressed to the direct seller’s board. The schedule of the 82nd edition of Pitti Uomo, running Kohl’s Eyes Improvement as Net Tumbles June 19 to 22, was revealed on Thursday. PAGE 4 MILWAUKEE — Kohl’s Corp. before making a judgment. Price cuts needed to drive Strong sales lifted Nordstrom’s net earnings 2.9 percent chairman and chief executive offi- Specialty stores did a much sales were to blame for lower in the quarter, but spending and hiring on e-commerce PAGE 4 cer Kevin Mansell told sharehold- better job with the color denim gross margins, the firm noted. and technologies cut into the bottom line. ers at the retailer’s annual meeting trend in the first quarter, Mansell The company also said here that the company “fell short” said on the call. Thursday that it is testing a new Christian Louboutin has established a joint venture with PAGE 5 of objectives in 2011, but empha- “There’s no way we had any- store prototype that introduces fur- Batallure Beauty to enter the beauty category. sized high rankings from shopper where near enough depth on it,” niture and lamps — items Kohl’s surveys and gains in Internet sales. he said. has been selling on its Web site. Hugo Boss will today announce that Gwyneth Paltrow will “We were outperformed by some Test stores are located in Atlanta, star in the T V, print and online campaigns for its latest PAGE 5 competition,” Mansell said of the Houston and Salt Lake City. women’s fragrance, Boss Nuit Pour Femme. company’s financial results. “Not to The furniture departments say there weren’t successes.” took over space from the chil- The selling season is in full swing, with a host of beauty PAGE 6 Kohl’s remodeled stores, im- dren’s clothing department, chief companies preening to attract potential buyers.
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