Mad About Hue Won’T Be Available Until Jan
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HYDRO SOLUTION ADOLFO’S NEUTROGENA CALLS ON TECHNOLOGY FROM WISDOM THE EAST FOR ITS THE DESIGNER DISCUSSES ALL THINGS A MUSE MUSES LATEST LAUNCH. FASHION AND BEYOND, FROM TODAY’S TALENT A CANDID CONVERSATION WITH VICTOIRE DOUTRELEAU. PAGE 10 PAGE 2 TO THE DUCHESS OF WINDSOR. PAGE 12 SANTA DID ARRIVE Last-Minute Surge Saves Holiday 2014 By DAVID MOIN RETAILERS PULLED off a pretty good holiday sea- son after all, despite an erratic eight weeks of highs and lows, markdown mania and margin uncertainty. They owe it mostly to their aggressive and earlier- MONDAY, DECEMBER 29, 2014 ■ $3.00 ■ WOMEN’S WEAR DAILY than-ever promotions; sustained online growth; gen- erally good weather; an extra selling day; easy com- WWD parisons to last year when winter storms blanketed the country, and huge volume surges on Thanksgiving, Black Friday, Cyber Monday and the Saturday before and the day after Christmas. The Dow Jones Industrial Average topping 18,000, declining unemployment and lower gas prices — down $1 since June on average — also helped put consumers in the shopping spirit. The government re- ported last week that the economy grew at a 5 percent annual rate in the third quarter, spurring optimism for the year ahead, though the mood is offset some- what by ongoing concerns about the absence of trends in women’s apparel, and the lack of sustained wage growth to propel spending by the masses. Hard facts from retailers about the holiday season Mad About Hue won’t be available until Jan. 8, when December com- Forget the simple pop of color. Jewelers, parable-store sales are disclosed by a small group of especially fi ne, are going all in, livening up retailers, and the third week of February, when fi rms start reporting their fourth-quarter results, which will their pieces with a rainbow’s array of continue through late March. Retailers are expected stones. For more colorful creations, to report single-digit sales gains of around 4 percent see pages 4 and 5. for the season, consistent with a projection made last fall by the National Retail Federation. MasterCard indicated last week that U.S. retail sales rose 5.5 percent from the day after Thanksgiving through Christmas Eve. But there are concerns about profi t- margin erosion due to incessant promoting and mark- downs, and some retailers and retail analysts early in December estimated sales gains at 2 to 3 percent. “There was a lot of stuff given away,” observed Claudio Del Vecchio, chairman and chief executive offi cer of Brooks Brothers. “Consumers went out SEE PAGE 6 Above: Nam Market Share Fight Cho’s ruby, emerald, multicolor Takes Toll on Margins sapphire, blue zircon, amethyst, By EVAN CLARK tsavorite and diamond 18- PROFIT MARGINS are at serious risk of becoming the karat white first casualty in the ongoing battle for market share. gold and black Retailers won’t crunch the fi nal fourth-quarter rhodium earrings. numbers until February, but the early read from Left: Stephen revenues and price promotions shows that bottom Webster’s black lines are in jeopardy. With some exceptions, such diamond, citrine, as the luxury sector, sales have been lackluster and amethyst, even steep price promotions are not necessarily rhodolite, red moving the needle. Consumers are continuing to garnet, blue gravitate toward gadgets and all things technologi- topaz, peridot cal. When they do turn to fashion, they have more and iolite than enough brands to consider. And the vital wom- Erickson Beamon’s 18-karat white en’s business is ailing. vermeil and hand-painted gold collar. Witness the third-quarter mea culpa by J. Crew Swarovski crystal necklace. Group Inc.’s Millard “Mickey” Drexler, who told WWD: “In the shopping malls, people are not going to apparel stores, but restaurants are up, active is up and nonapparel is doing OK. Perhaps there are too many apparel businesses out there with too many players — and a lack of quality and style. Women’s has been denigrated or downgraded as a category.” Already, chains that were teetering on the edge have given up the ghost. So far, Deb Shops fi led for bankruptcy, Delia’s Inc. is planning to liquidate and the Dutch brand Mexx entered receivership. In years past, troubled companies typically would wait until January to pull the plug, keeping fi ngers crossed that shoppers would deliver some kind of STYLED BY ROXANNE ROBINSON Christmas miracle. SEE PAGE 9 2 WWD MONDAY, DECEMBER 29, 2014 WWD.COM American Apparel Hires Moelis THE BRIEFING BOX it’s a passion and one he seems unlikely to give up By EVAN CLARK anytime soon. IN TODAY’S WWD “What is most interesting and exciting is that THE HEAT is on American Apparel Inc., which American Apparel is building a business that in- has hired investment bank Moelis & Co. to explore volves manufacturing, distributing and retailing strategic options, according to sources familiar products that people desire and they are doing so in Victoire Doutreleau, Pierre Bergé and Roger with the situation. a humane fashion,” he said. “American Apparel pro- Thérond at La Coupole in 1959. For more on Moelis will fi eld interest from would-be acquir- vides living wage jobs and living wage opportunities Doutreleau, see page 10 and WWD.com. ers, such as Irving Place Capital, and also will re- in the United States. That to me is so electrifying.… view the company’s capital structure. The move We have proven that the Made in USA, sweatshop- could signal that the American Apparel saga has free business model not only works — but competes, entered a phase that will ultimately untangle the successfully, with offshore models. complicated web of forces vying for control of the “I remain focused on creating jobs, most impor- high-profi le U.S. apparel retailer. tantly in Los Angeles, and working to prove that It’s a tricky time for the company, which not only the sweatshop paradigm can be broken within the received a letter of interest from John Howard’s Irving context of the apparel industry,” he said. “This has Place, but is also working on a turnaround under new always been my life journey.” leadership while fending off Charney said the company has ousted founder Dov Charney, been unable to expand its store who could sue his former em- base over the past four years due ployer and is seen seeking dam- to a “constrained capital struc- ages of more than $100 million. ture, which has also impaired Shares of American Apparel the company’s ability to correctly spiked in recent weeks on ’’ manage the timing of raw-materi- hopes of a takeover — Howard al purchases and its manufactur- Retailers pulled off a pretty good holiday season, owing is said to have said the company ing fl ows in a way that maximizes mostly to their aggressive and earlier-than-ever promotions and could be worth as much as $1.40 sales and profi tability.” sustained online growth. PAGE 1 a share pending due diligence. American Apparel has 245 The stock, which traded as low stores, but people who have ex- as 50 cents this month, held amined the business believe it With sales consistently lackluster, profi t margins are at steady on Friday at $1.06, giving could profi tably expand to 500 serious risk of becoming the fi rst casualty in the ongoing battle the company a market capital- or so. for market share. PAGE 1 ization of $185 million. “American Apparel’s earn- But Charney, the company’s ings power to date has been Jean-François and Élodie Piège have opened the restaurant iconoclastic founder and cre- hampered by the leveraged Clover, an intimate eatery in the Saint-Germain-des-Prés ative lodestar, remains the big capital structure it has been district with just 10 tables for two. PAGE 10 question mark. saddled with as a result of the He’s the company’s larg- global fi nancial crisis of 2008,” London’s Victoria & Albert Museum will put luxury under est shareholder and holds a Charney said. “Under the the spotlight, with an exhibition called “What is Luxury?” 43 percent stake, although he company’s existing debt cov- opening in April. PAGE 11 shares the voting rights for Under the enants, American Apparel’s that stock with investment fi rm prospects have been and con- Costume National creative director Ennio Capasa and Standard General. Charney company’s existing tinue to be challenged.” Marina Abramovic are joining forces for her performance had a falling out with Standard Charney continues to find at The Art of Elysium’s annual “Heaven” gala. PAGE 11 General, which controls much support within the company of the board that ultimately debt covenants, and employees have been Ralph Lauren cast a herd of beach beauties — fi ve fi red him this month. weighing in with their backing camels and new face Sanne Vloet — for his spring American Apparel named at a new Web site, teamdov.com. American Apparel’s campaign shot by Bruce Weber. PAGE 11 Paula Schneider his successor With the hiring of Moelis, the as chief executive offi cer and battle for American Apparel ap- tapped Colleen Brown as chair- prospects have pears to have returned to where Retired French developer Jean-Louis Solal, considered man. The company is said to it began. the father of the European shopping mall, died on have offered the founder a mul- been and continue to According to sources famil- Christmas Day at 86. PAGE 11 timillion dollar gig as a consul- iar with his thinking, Charney tant if he would sign away his be challenged.