Open Air 57 Percent of All Internet Traffi C by 2018, up from 33 Percent Last Year
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SEEKING INSPIRATION DONE DEAL A LOOK AT WHAT L’ORÉAL BUYS NYX SPARKED MILAN COSMETICS FOR AN MEN’S DESIGNERS’ ESTIMATED $500 BRIONI GOES BIG IMAGINATIONS MILLION. PAGE 2 FOR SPRING 2015. THE ITALIAN MEN’S FASHION BRAND GETS SET TO PAGE MW1 UNVEIL A 13,000-SQUARE-FOOT FLAGSHIP IN MILAN. PAGE MW1 AIMING TO OWN CHANNEL Mobile Seen E-tail’s Next Battleground By RACHEL STRUGATZ THE HOTTEST DIGITAL real estate is still up for grabs. The competition is fi erce to control the mall in consumers’ pockets and the victor — should one player gain a commanding share of the mobile mar- THURSDAY, JUNE 19, 2014 ■ $3.00 ■ WOMEN’S WEAR DAILY ket — will be in prime position to shape the next WWD phase of commerce. Tech giants and brands alike are scrambling to develop apps and optimize their Web sites to ac- commodate an on-the-go consumer who expects a seamless experience. The rush to control the chan- nel has been front and center this week. First, Wal- Mart Stores Inc.’s @WalmartLabs bought shopping app Stylr in its drive to improve its mobile com- merce. Then, on Wednesday, Amazon entered the ultracompetitive fray by launching its own smart- phone, the Fire. For Amazon, the goal is less about the device than it is to grab a greater share of mo- bile commerce. And no wonder — mobile is on course to domi- nate digital traffi c. Cisco’s state of the Internet re- port this month said mobile devices would make up Open Air 57 percent of all Internet traffi c by 2018, up from 33 percent last year. Remembering their childhood “No one has really won mobile yet,” John vacations in Bali, sisters Mulligan, Target Corp.’s interim chief executive of- fi cer, said during an appearance on Bloomberg TV Nicky and Simone last month. 2015 Zimmermann riffed on Mulligan said that is where Target believes it can batik prints for their gain an edge over the likes of Amazon — although Amazon clearly won’t cede any ground easily. Jeff RESORT Zimmermann resort Bezos, founder and ceo of the e-commerce giant, collection. They introduced the Fire, which ships on July 25 and is available in 32GB and 64GB versions retailing for often interspersed $199 and $299, respectively. The phone features a 4.7- the textiles with inch screen, unlimited storage of photos in Amazon delicate latticework, Cloud Drive and a Firefl y tool that uses the phone’s camera to identify things in the physical world, such as shown on this structured dress as QR codes, books and games. worn over a matching bodysuit. For SEE PAGE 8 more resort, see pages 4 and 5. Target’s Tough Search By SHARON EDELSON TARGET CORP. is in the midst of a moment of truth. “Target has to decide what kind of company it will become,” said Amy Koo, a senior analyst at Kantar Research. “It needs new energy. It’s at a crossroads.” The retailer has been badly bruised by the mas- sive data breach last holiday season, its struggles in launching in Canada and e-commerce that hasn’t kept pace with its nearest competitors. Just last week- end, checkout glitches were reported at terminals in Target stores; the company said this was unrelated to security matters. Most signifi cantly, Target has been without a chief executive offi cer since Gregg Steinhafel was fi red in May. The problems are making it harder to recruit a successor. Korn Ferry is conducting the search. John Mulligan, executive vice president and chief fi nancial offi cer, was named interim president and ceo after Steinhafel’s exit, while Roxanne S. Austin, a member of the board, was appointed interim non- executive chairman of the board. Mulligan quickly moved Target’s entire leadership team to the 26th fl oor of its headquarters in an effort to become more effi cient. He instituted other mea- sures to speed the decision-making process and re- duce bureaucracy. Mulligan is likely being considered for the top job as he leads the charge and goes on the road with executives to reassure Wall Street that the company is moving forward. “John Mulligan is acting like a ceo and sounding PHOTO BY JOHN AQUINO like a ceo,” said Joseph Feldman, an analyst at Telsey SEE PAGE 6 2 WWD THURSDAY, JUNE 19, 2014 H&M Profit Up; Adding Footwear THE BRIEFING BOX quarter of this year, but it did not have as big a per- IN TODAY’S WWD By JOELLE DIDERICH centage impact on results as in Q1. This is because Q2 is a much larger quarter, both in terms of sales PARIS — First sportswear, now shoes. and in terms of results,” he added. Hennes & Mauritz AB revealed Wednesday that H&M reiterated its plans to expand its store net- it would further broaden its product offer this fall work by 10 percent to 15 percent annually, with a Actress Jennifer with the launch of an extended footwear range for forecast 375 new stores in 2014, including its first Morrison in a gown women, men, teenagers and children. The line will units in India and the Philippines. Next year, H&M from Georges be launched in selected H&M stores in will enter South Africa and Peru. Hobeika’s fall couture nine countries — including China, the It will also continue to grow e-com- collection. For more U.S., the U.K. and Sweden — and online. merce following the launch of online celebrity fashion, At the same time, the Swedish fast- sales in France in March. The retailer see WWD.com. fashion giant will expand distribution will open online stores in Spain, Italy of its beefed-up H&M Sport line in re- and China by yearend and plans to add sponse to positive customer feedback. eight to 10 online markets in 2015. The extended range is available in “We see these investments as very IMAGES around 50 stores, with 2,000 stores car- important for H&M’s future success. rying ladies’ sports apparel. They cost a lot now but will be very The retailer started to reap the important for H&M for many years to POOL/GETTY benefits of its heavy investment pro- come. The long-term investments are PLS gram in the fiscal second quarter, with aimed at further strengthening H&M’s BY net profits leaping 24.8 percent as its market position and securing future ex- PHOTO spring collections performed well at pansion,” said Vinge. retail and it expanded its store net- The retailer reported operating work, including opening its first unit in profit rose 25.6 percent to 7.56 billion Australia. kronor, or $1.16 billion, in the second Tech giants and fashion brands are racing to gain share in the H&M posted after-tax profits of 5.8 quarter. All dollar rates are calculated mobile market. PAGE 1 billion Swedish kronor, or $892.3 mil- at average exchange for the period to lion, in the three months ended May which they refer. Target Corp. is finding it hard to find a chief executive officer 31, up 24.8 percent versus the same pe- However, external factors including since Gregg Steinhafel was fired in May. PAGE 1 riod a year ago. foreign exchange rates and rising labor “We have had a good second quar- costs weighed on the gross margin, a key Online shopping is set to become increasingly important in the ter with a strong increase in both sales indicator of profitability. It eased to 60.8 Middle East in the next few years. PAGE 3 and profits and increased market percent in the second quarter from 61.1 share,” said H&M chief executive of- percent in the same period in 2013. French family-owned company JSB International has opened ficer Karl-Johan Persson. As reported, sales including value-add- PAGE 3 “All our brands — H&M, COS, & ed tax in the second quarter advanced 16 a new Scherrer outpost in Paris. Other Stories, Monki, Weekday, Cheap percent in local currencies to 44.18 billion Monday and H&M Home — enjoyed kronor, or $6.78 billion. Sales are acceler- Chow Tai Fook Jewellery Group Ltd. said Wednesday it plans PAGE 6 good sales development during the sec- Distribution of H&M ating in local currencies, having jumped to buy Hearts on Fire Co. LLC for $150 million. ond quarter. We are very pleased that Sport will be expanded. 17 percent in April, 13 percent in March H&M Sport, which we are broadening and 11 percent in February. Cindy Crawford next fall will release a book with Rizzoli about further, continued to gain market share H&M said so far, sales in June have her career and the lessons she’s learned. PAGE 7 within the sports segment,” he added. gotten off to a good start. Meanwhile, turnover in The retailer plans to keep up the heavy pace of the U.S. rose 23 percent in the second quarter. The Richard Avedon Foundation is introducing an iPad app spending, which has dented profits in recent quar- “We’re still a very small player in the U.S. mar- that gives access to more than 1,000 Avedon images. PAGE 7 ters. In 2014, its long-term investments in IT, online, ket, even though we’re now nationwide and we new formats and new concepts will increase by 600 have 313 stores and we’re expanding quickly. And Brioni’s sprawling new Milan flagship will be officially unveiled million kronor to 800 million kronor, or $90 million we continue to take market share, we continue to during men’s fashion week in the Italian city.