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Traffic at Majors Market Buzzing, but Economic Worries Remain NEWSPAPER 2ND CLASS $2.99 VOLUME 69, NUMBER 44 OCTOber 11–17, 2013 THE VOICE OF THE INDUSTRY FOR 68 YEARS Traffic at Majors Market Buzzing, but Economic Worries Remain By Andrew Asch and Deborah Belgum The California Market Center showroom building was buzzing with delegations of department-store buyers Oct. 7–9 during the LA Majors Market, the biannual show devoted to department-store business. The most recent show was focused on Spring 2014 merchandise. For many of the show’s vendors, the buyer traffic was just as good as previous shows. But something was different. “We have the same amount of appointments. Stores are still shopping,” said Steve Maiman, co-owner of Los Angeles–based juniors manufacturer Stony Apparel Corp., ➥ Majors Market page 6 Quarterly Report California Economy Shows Signs of Gain, Challenge By Deborah Belgum Senior Editor Levi Strauss & Co., the 147-year-old blue-jeans com- pany, has weathered its share of economic twists and turns. But so far, 2013 has been shaping up to be a good year. Recently reported third-quarter profits doubled to $57.1 million while sales inched up 3.7 percent to $1.14 billion. Still, Chip Bergh, the San Francisco–based company’s president and chief executive, is concerned. He believes the U.S. government shutdown, which started Oct. 1, could bog down consumer spending and put a crimp on the holiday season. “If this thing does get pro- ➥ Quarterly Report page 2 INSIDE: Knock Out Where fashion gets down to business SM 8 21 Juicy Couture sold ... p. 2 Showroom Profiles ... p. 10 This season’s sporty chic looks are sure to be a knockout. Surf Report ... p. 4 Education in Focus ... p. 19 For more on the trend, see pages 12–13. Denim Report ... p. 8 Fashion Resources ... p. 21 MIGUELSTARCEVICH.COM for DE ANNESLEY AGENCY KAIN LABEL “Churchill Sweatshirt” ($70). ECF PERFORMANCE “Power Suit” ($56). 8 OTHER REASONS “Undefeated” chain necklace ($23). www.apparelnews.net METTLE FAIR TRADE “Mod Circle” belt ($91). Cash Flow & Liquidity Solutions for over 75 ThisYears is the address box. Factoring—Letters of Credit—Working Capital Loans—Collateral ManagementThe Services size is 1.5 x 3.5 inches For a confidential consultation, please contact Harry Friedman: 818 914-5901 or [email protected] www.rosenthalinc.com ANNIVERSARY FINAL_Rosenthal_28542.indd 1 2/5/13 6:39 PM 01,2,6.cover.indd 1 10/10/13 7:29:30 PM NEWS Juicy Couture Sold to Authentic Brands Group Juicy Couture, the luxury casual line born in Los Angeles “Juicy Couture is a leading lifestyle brand that is recog- royalty payable to Authentic Brands Group,” said William and scooped up by a New York company a decade ago, has nized worldwide. We are honored and excited to build upon McComb, Fifth & Pacific’s chief executive. “In the com- been sold by Fifth & Pacific for $195 million to Authentic Juicy Couture’s unique heritage and to realize the brand’s ing weeks and months, we anticipate that Authentic Brands Brands Group. significant global potential,” said Jamie Salter, chairman and Group will announce licensees and affiliates that will work to The sale was announced Oct. 7 after a vote by Fifth & chief executive officer of Authentic Brands Group, which is take over elements of the operating business, including many Pacific’s board of directors. Fifth & Pacific, formerly known headquartered in New York. of the company’s talented associates, retail stores, wholesale, as Liz Claiborne Inc., bought the line in 2003 and sent it Fifth & Pacific started re-evaluating the Juicy Couture international and certain components of the e-commerce sailing with ritzy retail shops and fancy advertisements in brand after sales started to slip in the last few years. In 2012, site. We plan to work closely with these entities to ensure a glossy fashion magazines. Juicy Couture’s revenues declined 6.4 percent to $498.6 mil- smooth and orderly transition that is seamless to consumers But in the last few years, the label has had a few missteps lion on top of a drop in 2011. During the first half of this and our business partners.” and seen its sales diminish, prompting Fifth & Pacific to shed year, sales shrunk 10.7 percent to $192 million. Juicy Couture popped up on people’s fashion radar in the division. That is a drastic departure from Fifth & Pacific’s other 2001 when the brand’s founders, Pamela Skaist-Levy and Authentic Brands Group, a unit of Leonard Green & main brand, Kate Spade, the line of handbags and acces- Gela Nash-Taylor, fashioned a velour track suit for Madon- Partners, is a brand-management firm that acquires the in- sories that saw a 64.3 percent rise in revenues during the first na, who launched a new trend—sexy sweats. tellectual-property assets of brands. Last month it acquired half of this year, to $307 million. Fifth & Pacific is still looking for a buyer of its Lucky Spyder Active Sports. Spyder and, now, Juicy are part of a “With this sale, we have also entered into a short-term li- Brand label, another Los Angeles–founded company with portfolio that includes Hart Schaffner Marx, Hickey Free- censing agreement with Authentic Brands Group that allows headquarters in downtown Los Angeles. During the first half man, Judith Leiber, Tapout, Taryn Rose, Adrienne Vit- us to transition the business in an orderly fashion through the of this year, net sales for Lucky Brand totaled $226.4 million, tadini, Bobby Jones and Marilyn Monroe. first half of 2014, with a $10 million guaranteed minimum compared with $212.4 million last year.—Deborah Belgum QUARTERLY REPORT Quarterly Report Continued from page 1 domestic product grew at an annualized 2.5 and $65.2 billion in 2010. EBay Inc. saw its pre-recession level of workers. percent. That is much higher than the 1.7 sales rise to $14 billion in 2012, compared While housing is strong, manufacturing tracted, it will have a negative impact on the percent economists had expected, and many with $11.65 billion the previous year. is weak. “In California, many of the jobs economy,” he told the Wall Street Journal. are predicting GDP will grow 1.8 percent to This is all boosting taxable retail sales in that went away were jobs in manufactur- Many other California apparel businesses 2 percent this year. California, which are forecast to grow 4.5 ing, and they are not coming back,” said have the same concerns. “If the shutdown California’s economy also was shining percent this year after rising 6.6 percent last Jerry Nickelsburg, senior economist with the goes on much longer, it is going to dampen bright before the shutdown. The state’s year, said Robert Kleinhenz, chief econo- UCLA Anderson Forecast. “The growth in things,” conceded Mark Lesser, president of battered housing market was making a mist of the Los Angeles County Economic productivity in California is because compa- Barbara Lesser Fabrics, a decades-old Los comeback with the median price in August Development Corp. nies are using machines, robots and software Angeles women’s sportswear company that of a Southern California home up 24.6 Kleinhenz noted that durable sales of items to make gains.” survived the last recession. percent over last year. And the state’s tech- such as automobiles, washing machines and He pointed out that today’s job skills of Before the government shutdown, the U.S. nology sector is marching forward with new household goods are very strong. “New- the 21st century are different from the 20th economy was making measured gains recov- software developments and gadgets that are vehicle sales activity is at its highest level in century. “If you are a warehouse person, ering from the economic downturn that lasted beefing up companies’ revenues. Apple five years,” Kleinhenz said, noting that car your job was to walk down the aisles or from December 2007 to June 2009. Inc.’s total revenues were $156.5 billion in dealerships are on track to sell 16 million new drive down the aisles with a forklift, get In the second quarter of 2013, the gross 2012, compared with $108.2 billion in 2011 cars this year, compared with 14.5 million last boxes of garments and bring them up for year. “It’s a good sign for the economy.” shipment,” Nickelsburg observed. “That job may be gone due to a robot that is going Optimistic consumers up and down the aisles getting boxes, but now there is a job at that same company for With all these bright economic indica- someone to set up the software to operate tors, California consumers’ sentiment is at that robot.” a six-year high, according to a study by the In the apparel and textile industry, manu- A. Gary Anderson Center for Economic facturing jobs have been slipping away year Research at Chapman University in after year. In August, Los Angeles County Orange, Calif. counted 49,500 jobs in apparel and textile In the third quarter of this year, the con- manufacturing, compared with 52,700 a sumer sentiment index, which was measured year earlier. However, job opportunities before the U.S. government shutdown, rose on the wholesale side of the business rose to 100.3 from the second-quarter reading 1.8 percent during the same time period, to of 93.9. It marks the first time since the 22,700 jobs. first quarter of 2007 that it passed the 100 Retail job gains in California have been threshold. weak, rising only .02 percent this year. “We attribute that to several factors,” said Esmael Adibi, director of the A.
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