L PLUS: ALL FOR O ZOE SALDANA Gwyneth Paltrow, Jimmy Fallon, TAPS BRADLEY COOPER FOR HER Tory Burch, Alicia Keys and more GLAMOUR MAGAZINE turned out for a fund-raiser SHORT FILM. for President Obama. PAGE 6 PAGE 9 EXCLUSIVE P&G’s McDonald Out to Cover Globe By MOLLY PRIOR and ANDREA NAGEL BOB MCDONALD WANTS seven billion customers. As the leader of the multibillion-dollar consumer FRIDAY, AUGUST 12, 2011 ■ $3.00 ■ WOMEN’S WEAR DAILY products giant Procter & Gamble Co., McDonald has the world within his reach. And his goal is as im- WWD mense and vast as P&G’s $82.56 billion global busi- ness: Convert every person on the planet into a cus- tomer, and get every one of the fi rm’s categories into every country. His sights are set on the developing world, where razors and shampoo are not commodities but aspi- rational luxuries. “There’s no question that 30 years from now, when people look back at this moment in time they are going to ask, ‘Did the [P&G] leadership team prop- erly move the center of gravity of the company more toward Asia and Africa where the babies are being born, or in this country to the Hispanic population, or in the Middle East to the Islamic population?” said McDonald, P&G’s chairman, president and chief executive offi cer, during an exclusive interview. He also wants current customers to spend more. “The average American spends roughly $100 on P&G products every year [across 35 product cat- egories in the U.S.]. In China — where we are the number-one consumer goods company and do $5 bil- lion in sales, over half of which is beauty — the av- erage Chinese consumer spends less than $3 a year on P&G products across 15 categories. You can see the tremendous opportunity,” he said. McDonald ultimately sees Chinese customers spending much more per head on P&G products. When it comes to beauty, the company said the average U.S. household spends $270 a year on fe- male beauty products in general across all distri- bution channels, with $66 of that total dedicated to P&G beauty products, and $290 on beauty and SEE PAGE 4 IN WWD TODAY A New Name for Polo PAGE 3 NEWS: Polo Ralph Lauren Corp. is now just Ralph Lauren Corp. to show the group’s expanding number of brands. Nordstrom Profi ts Up 20% PAGE 2 RETAIL: Nordstrom joins the fl ock of retailers reporting strong second-quarter results, with the Seattle-based company’s profi ts being driven by special sales events. A Touch of Color Domenico Dolce and Stefano Gabbana are adding two new elements to their L ACRIA Atop Manhattan color cosmetics range in September. PAGE 10 STYLE: ACRIA’s Young Friends had Perfect Finish Creamy Foundation is quite a view during a party on the the brand’s fi rst cream foundation, and roof of the yet-unopened Hôtel Passion Duo Gloss Fusion is a cream Americano. lipstick with a gloss center. The line is in 70 doors globally. Industry sources estimate that the two new products could add $15 million at retail to the PHOTO BY JOHN AQUINO; STYLED BY TYLER RESTY brand’s sales. For more, see page 6. 2 WWD FRIDAY, AUGUST 12, 2011 Kohl’s earnings per share for the quarter Nordstrom Net Up 20% beat analysts’ forecasts by one cent. By DaviD Moin EvEryboDy lovEs a good fashion deal, even in hard times. Take it from nordstrom inc., which on Thursday said net earnings rose 20 percent in the second quarter ended July 30, and credited its anniversary sale, which offers shoppers new merchandise at a discount, for much of the period’s success. nordstrom’s earnings rose to $175 million, or 80 cents a di- luted share, from $146 million, or 66 cents a diluted share, in the same quarter last year. same-store sales increased 7.3 percent, marking the seattle-based retailer’s seventh-straight quarter of same-store gains. net sales rose 12.4 percent in the quarter to $2.72 billion, from $2.42 billion in the same period in fiscal 2010. “The anniversary sale was a significant factor. it was the best yet in the history of our company,” said nordstrom inc. president Kohl’s, Dillard’s Profits Rise in 2Q blake nordstrom, during a conference call. “it remains unique. it offers the customer preseason savings on new merchandise. after ship with Capital one allowed Kohl’s to increase the event, everything goes back to regular price. it’s fresh new By sHaron EDElson its approval rate by 300 basis points. merchandise at considerable savings. our customers love it.” Kohl’s, which incurred cost increases of 10 to 15 The anniversary sale is nordstrom’s biggest sale of the year. it KoHl’s CorP. may have seen profits rise 16.5 percent in apparel, is planning inventories conser- starts in mid-July and lasts two weeks. The event this year had the percent in the second quarter, but chairman and vatively. “increased penetration in private and ex- added dimension of providing early access for reward customers. chief executive officer Kevin Mansell was less clusive brands will help us retain margins if there’s in addition, “strong executions” on two clearances — the half- pleased with the retailer’s sales performance. resistance to price increases,” Mansell said. “staying yearly women’s and kids sale and the half-yearly men’s sale — helped The Menomonee Falls, Wis.-based retailer within her budget is our customer’s number-one con- the quarter, though nordstrom officials said full-price selling out- Thursday reported net profits of $303 million, or cern. We know we have to be very aggressive with paced these clearances and that they are becoming less significant. $1.09 a share, for the quarter ended July 30, from marketing to motivate the consumer to buy.” nordstrom’s showing beat Wall street estimates and the retail- $260 million, or 84 cents, in the prior year’s quarter. sales, general and administrative expenses in- er raised guidance for the year to $2.95 to $3.10 in diluted earnings While earnings per share beat Wall street ana- creased 0.7 percent for the quarter, well below the per share from an earlier $2.80 to $2.95 forecast. nordstrom also lysts’ estimates of $1.08 a share, Mansell said dur- company’s 3 to 4.5 percent forecast. operating in- expects same-store sales to grow 4 to 6 percent for the year. ing a conference call that, “We were not happy come rose 14 percent to $510 million. Capital expen- nordstrom’s results mirrored the double-digit profit gains with our sales performance.” sales for the quar- ditures were $473 million for the first half of 2011. reported by Macy’s inc., ralph lauren Corp. and Kohl’s Corp. ter were up 3.6 percent to $4.2 billion, from $4.1 Kohl’s by the end of september will have unveiled earlier this week. billion in the 2010 period, and comps rose 1.9 per- 31 new stores. its third e-commerce fulfillment cen- shares of nordstrom closed up 5.5 percent to $42.33 prior to its cent, below the company’s estimate. ter will be up and running in time for the holidays. after-market earnings report. Equity markets rose sharply Thursday, The lack of a big apparel launch was one rea- “our stock is undervalued,” Mansell said. “our pushing retail stocks up 3.8 percent after Wednesday’s 4.6 percent son cited for what Mansell called peak working capital needs will decline, while the Dow Jones industrial average advanced 4 percent, a “subpar sales performance.” be in the third quarter, but we still or 423.37 points, to 11,143.31, recapturing most of Wednesday’s losses. also, axcess, “a pretty big anchor expect to buy back at least $500 The s&P retail index increased 17.46 points to 483.36. brand that we purchased from million of stock in that quarter.” signs of U.s. economic weakness and the fears that the debts liz Claiborne, was eliminated,” Kohl’s closed up $3.21, at of italy and spain or others could cripple the banking sector he said. “it’s been a drag on the 3.6% $47.50, on Thursday on the new have had markets on a ragged path over the last two weeks as first half of the year.” However, Percentage increase of sales york stock Exchange, a 7.25 per- investors sought safety and direction. exclusive brands such as Fila, in Kohl’s second quarter cent jump. at nordstrom, shoes, cosmetics and designer apparel were lauren Conrad, simply vera compared to a year ago. Meanwhile, Dillard’s inc. late standouts in the quarter, though according to Pete nordstrom, pres- vera Wang and Mudd achieved Thursday reported that second- ident of merchandising, women’s apparel lately has “lagged the av- “strong double-digit increases.” quarter earnings nearly tripled erage. We hope to have some things we can talk about in coming Kohl’s won’t want for launches in the third quar- as sales picked up 3.8 percent. quarters on the work we are doing to improve the business.” ter, when its exclusive Jennifer lopez and Marc net income for the 13 weeks ended July 30 was regionally, the south and Midwest were the top perform- anthony brands bow. Mansell said the lines will $17.6 million, or 32 cents a diluted share, eclipsing ers for full-line stores.