The Boyfriend's Back

A RANDY JOHNSON AND ULYSSE DEAD HEAT PITCH THE PRESIDENTIAL STYLE NARDIN LINK UP STAKES ARE NOW AS CLOSE FOR ON A WATCH. AS THE ELECTION. WWDTIME PAGE 8 PAGE 8

THURSDAY, NOVEMBER 1, 2012 Q WOMEN’S WEAR DAILY Q $3.00

REUNITING CALVIN KLEIN PVH to Buy Warnaco In $2.9 Billion Deal owned by Warnaco, and Jeanswear, By MARC KARIMZADEH and licensed to it. EVAN CLARK Warnaco’s Calvin Klein busi- nesses will be folded into the NEW YORK — It’s the megadeal Calvin Klein Inc. division of PVH after the storm. and run by CKI chief executive On Wednesday morning, PVH officer Tom Murry. The Speedo, Corp. said it would acquire Warner’s and Olga brands will be Warnaco Group Inc. in a deal val- moved to PVH’s heritage division, ued at $2.9 billion. which includes Van Heusen and The transaction, delayed by 24 Bass. hours due to Hurricane Sandy, will Helen McCluskey, Warnaco’s turn PVH, which owns a portfolio president and ceo, will join PVH’s of brands led by Calvin Klein and board and help PVH through the Tommy Hilfiger, into an $8 billion integration, but she will no longer global branded lifestyle and fash- have day-to-day management re- ion powerhouse — one of the larg- sponsibilities. est in the world — and will reunite “The conversations started, I Calvin Klein with its two largest would say, almost eight years ago,” apparel categories: Underwear, SEE PAGE 4

The Post-Sandy Rush DEVIN HERSHEY ASSISTANT: FASHION ADRIANA DECERVANTES; T: As Stores Open Doors

By WWD STAFF

NEW YORKERS, AFTER being cooped up for two days and in many cases unable to go to work or school, took to the streets Wednesday and floated into stores, helping retailers rebound a bit from the paralyzing impact of Hurricane Sandy. Manhattan anchors Macy’s, Bergdorf Goodman, Bloomingdale’s and Saks Fifth Avenue, among The Boyfriend’s Back other stores, were able to reopen Wednesday after being closed since Monday, and reported decent traffic, but no record-setters. After a surplus of prints and patterns, it’s back to the basics for denim, SEE PAGE 6 including the return of the beloved boyfriend jean. On her, Williamsburg Garment Co.’s cotton jeans; on him, AG Adriano Goldschmied’s cotton jeans. For more, see What’s Next in Denim, Section II.

PHOTO BY GEORGE CHINSEE; STYLED BY KIM FRIDAY MODEL: RENATA G/MUSE AND JOHN/SOUL; HAIR BY SEIJI AT THE WALL GROUP; MAKEUP BY MISUZU MIYAKE FOR NARS COSMETICS; PHOTO ASSISTAN MISUZU MIYAKE GROUP; MAKEUP BY THE WALL SEIJI AT G/MUSE AND JOHN/SOUL; HAIR BY MODEL: RENATA 2 WWD THURSDAY, NOVEMBER 1, 2012 WWD.COM Shiseido First-Half Profits Tumble THE BRIEFING BOX yen,” the company said, adding tainty about customer purchas- By KELLY WETHERILLE that “the cosmetics markets in ing attitudes towards Japanese Europe, the Americas and Asia products. Elsewhere in Asia, we IN TODAY’S WWD TOKYO — Shiseido said Wed- reported positive year-on-year anticipate continued growth in nesday that first-half net profits growth.” the cosmetics market, thanks to fell by nearly 50 percent as sales The company issued a cau- moderate economic expansion,” in its home market of Japan re- tious forecast for its business the company said. mained slow, while marketing in China, where there have Shiseido’s first-half sales in expenses increased. Japan, which represents 55.9 The Japanese cosmetics percent of the company’s total manufacturer’s net income for revenue, fell 3.2 percent to the six months ended Sept. 30 186.63 billion yen, or $2.35 bil- dropped 44.8 percent compared 44.8% lion. Overseas sales grew 2.6 with the same period last year percent to 147.01 billion yen, to 5.02 billion yen, or about $63.2 DROP IN FIRST-HALF PROFITS or $1.85 billion. million at average exchange for FOR SHISEIDO. Shiseido cut its operating the period. income and sales guidance for First-half operating income the fiscal year ending March declined 61.2 percent to 8.34 bil- been recent protests targeting 31. Operating income is now ex- lion yen, or $105.1 million. Japanese products and busi- pected to grow by 2.2 percent to Net sales for the period slipped nesses amid a diplomatic dis- 40 billion yen, or $502.2 million. 0.8 percent year-on-year to 333.17 pute between the two countries. The company is predicting sales billion yen, or $4.2 billion. Some of Shiseido’s sales coun- will increase 2.6 percent to 700 “In the two-quarter period ters in China were damaged in billion yen, or $8.79 billion. under review, economic senti- the violence. The company left the full- ment in Japan, despite signs of a “In China, the growth rate year net income forecast un- moderate turnaround, was gen- for the cosmetics market is on changed at 22 billion yen, or erally weak, characterized by a downtrend for the time being, $276.2 million at current ex- such factors as concerns about amid a slowdown in economic change rates. This would repre- worldwide economic slowdown growth. In addition, the outlook sent a year-on-year increase of and prolongation of the strong is very unclear due to uncer- 51.6 percent.

Kate Spade Completes Japan Business Buy A look at the street style at to be material. It also doesn’t cal year ended Aug. 31, net By Poland fashion ALEXANDRA STEIGRAD anticipate the buyout to have sales were about $88 million, week. an impact on adjusted earnings an increase from the prior fis- DABROWSKI KUBA PHOTO BY KATE SPADE LLC SAID before interest, taxes, deprecia- cal year of 20 percent on a Wednesday that it bought out its tion and amortization for 2012. local currency basis. Excluding PVH Corp. on Wednesday morning said it would acquire Japanese joint venture partner. The Japan buyout is part of charges, the Japanese compa- Warnaco Group Inc. in a deal valued at $2.9 billion. PAGE 1 The Fifth & Pacific Cos. Inc.- Kate Spade’s international ex- ny recorded adjusted operat- owned Kate Spade acquired the pansion push, which includes ing margins in the high-single New Yorkers took to the streets Wednesday and floated into 51 percent interest held by KSJ recent store openings in the digits and EBITDA in the low- stores, helping retailers rebound a bit from the paralyzing impact Co. Ltd., a subsidiary of Sanei U.K., Dubai, Kuwait and Brazil. double digits, according to the of Sandy. PAGE 1 International Co. Ltd. The pur- The company intends to extend company. Kate Spade Japan, chase price for the Kate Spade its retail expertise in Japan to which distributes its products Shiseido said Wednesday that first-half net profits fell by Japan buyout, including debt its business in the rest of Asia. mainly through 53 points of nearly 50 percent as sales in its home market of Japan remained repayment, related transac- According to the New York- sale, said more than 90 percent slow, while marketing expenses increased. PAGE 2 tion fees and use of Kate Spade based company, Kate Spade of net sales in the Japan busi- Japan’s cash on hand, totaled Japan was formed between ness last year came from the Kate Spade LLC said Wednesday that it bought out its $47.6 million. Sanei and Kate Spade in direct-to-consumer business. Japanese joint venture partner, KSJ Co. Ltd. PAGE 2 Kate Spade is also required, August 2009. In Japan, it oper- Kate Spade, which has been during the fourth quarter, to ated the Kate Spade and Jack a bright spot for Fifth & Pacific, Add the Solomon R. Guggenheim Museum’s Artists’ Dinner to make a post-closing asset ad- Spade businesses. The com- recently reported third-quarter the list of New York social events canceled in the aftermath of justment payment to Sanei in pany will continue to oper- adjusted operating profits of $9 Hurricane Sandy. PAGE 7 conjunction with the buyout. ate those businesses in Japan million, up from $5 million in the Kate Spade said it does not ex- through its subsidiary. year-ago period, as sales jumped Evian has teamed with Diane von Furstenberg for the design of pect the post-closing payment For Kate Spade Japan’s fis- 35.1 percent to $102 million. its 2013 limited-edition bottle, marking the first time the water brand has linked with an American designer. PAGE 7

Former Major Leaguer Randy Johnson discusses life after baseball and his new gig as the North American ambassador for U.S. Joins WTO Case Against China Subsidies Swiss watch brand Ulysse Nardin. PAGE 8

that produce billions of dollars National Council of Textile By In Hurricane Sandy’s immediate aftermath, Tumblr became KRISTI ELLIS of apparel in China. Apparel Organizations. “For decades, online news media’s main evacuation center. PAGE 7 and textile imports from China, large and comprehensive sub- WASHINGTON — The U.S. has the number-one supplier to the sidies by the Chinese govern- ON WWD.COM joined as a third party with U.S., hit $40.7 billion in the year ment have prevented free and Mexico at the World Trade through Aug. 31. fair markets from operating in TAW: Polish Fashion Week: “Stay warm, stay cool” appeared Organization in a case that “Mexico’s request for con- world trade in textiles and ap- to be the mantra as bloggers, students and Eastern European charges China with using illegal sultations appears to raise parel. These subsidies have di- fashionistas faced the cold weather and heavy snowfalls during import substitution and export serious questions about nu- rectly contributed to the loss of Polish Fashion Week. For more, see WWD.com/fashion-news. subsidies in its apparel and tex- merous Chinese government hundreds of thousands of U.S. tile sector. subsidies that may be causing textile workers.” Mexico filed a WTO case market distortions in the tex- Johnson said it is a “land- against China’s apparel and tex- tiles and apparel sector,” said mark case” that “exposes the TO E-MAIL REPORTERS AND EDITORS AT WWD, THE ADDRESS IS [email protected], USING THE INDIVIDUAL’S NAME. tile subsidies on Oct. 15, charg- a spokeswoman with the U.S. Chinese government interven- WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. ing that China “appears to main- Trade Representative’s office. tion for exactly what it is — a COPYRIGHT ©2012 FAIRCHILD FASHION MEDIA. ALL RIGHTS RESERVED. 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Thank you for inspiring the Ann Taylor and LOFT brands to connect with clients and associates for a great cause. Under your leadership, ANN INC. has donated $13 Million to The Breast Cancer Research Foundation since 2005. We are all able to put our best selves forward every day because of you! 4 WWD THURSDAY, NOVEMBER 1, 2012 Megadeal! PVH to Acqu

{Continued from page one}

PVH chairman and ceo Emanuel Chirico said. “There has been constant dialogue be- tween the companies, ever since we bought Calvin Klein in 2003.” Talks became serious in mid-June during a lunch be- tween the two executives at Da Umberto. “We started a dialogue about potentially putting the compa- nies together and negotiations proceeded from there,” Chirico said, adding that the stars aligned themselves after the Hilfiger acquisition. “From an operating point of view, we feel we have the man- agement team and the operat- ing platforms and expertise to take on an acquisition that is as complicated as the Warnaco transaction,” he said. “It’s such a global business with operat- ing platforms in Asia, Latin America and a European and

North American business. The Tommy acquisition really gave us a much more global foot- print. Warnaco really was fur- ther developed in Asia and Latin America than PVH was. By having that platform,·· it gives us the ability to be a truly global company today with two strong lifestyle brands to drive the ship forward. I think it positions us well for the future.” McCluskey added the deal was too good to pass up. “While we have a lot of con- done, stand-alone.” Above: Helen McCluskey and fidence in the potential of our Holders of Warnaco com- Emanuel Chirico. Tom Murry business and believed in our mon stock will receive $51.75 stand-alone plan, the offer that in cash and 0.1822 of a share ships working together, the of PVH common stock for each licensee-licensor relationship, share of Warnaco common stock. just by its nature, is not as ef- This will leave existing Warnaco ficient as having it in-house. When you look at stockholders with about 10 per- There are contracts you have to cent of the outstanding common worry about. There are approv- it from a business stock of PVH. als and duplications of efforts Investors liked the deal on at times. As much as you try to perspective, to try both sides and Warnaco’s shares build that all into the business shot up 38.7 percent to $70.58 as model, it does slow the process PVH’s stock gained 20.2 percent slightly. By getting that out of to develop what to $109.99. But Moody’s Investors way, it will take a lot of this du- Service put PVH’s “Ba2” cor- plication and inefficiency you Warnaco has in porate family credit rating on may have out of the process, review for possible downgrade. which will help us significantly Asia and Latin The debt watchdog said the going forward.” transaction was generally seen Plus, he added, “When you as positive for PVH, but includ- look at it from a business per- America would ed a significant increase in its spective, to try to develop what debt. PVH received $4.33 bil- Warnaco has in Asia and Latin have taken years lion in financing from Barclays, America would have taken years Bank of America Merrill Lynch for us. It would have taken signif- for us. and Citigroup Global Markets icant capital investment to build, Inc., which will be used to help so to be able to acquire that over- —EMANUEL CHIRICO, fund the purchase and refinance night and be able to grow and en- PVH CORP. other debt. The credit review hance that with more resources “The growth in both of those own and operate it will improve will include a look at the firm’s is a tremendous strategic advan- areas has been in the 25 to 30 the efficiencies and synergies to exposure to Europe, which tage that will pay huge dividends percent range over time. We have a great level. It will streamline would account for about 27 per- for us down the road.” a great team on the ground oper- the whole process. We have a was put in front of us through cent of combined sales. Nearly 75 percent of ating these businesses. I think it good working relationship, and a series of negotiations was so Chirico said the transac- Warnaco’s business is with offers an opportunity over time it works as well as it can, but compelling for both our share- tion was appealing on multiple the Calvin Klein brand, half of to look at some of the other PVH when it gets to the size and com- holders as well as the business, fronts, including reuniting the which is through directly owned brands in the portfolio, and how plexity of Warnaco, it’s difficult. that the board evaluated the Calvin Klein brand. “As much retail channels. do we exploit the expertise that’s “It will give us the oppor- offer with outside counsel and as we have been able to grow According to McCluskey, Asia on the ground there.” tunity to control all aspects of determined that, ··for our share- the licensing model, to be able represents more than $500 mil- The Warnaco businesses rep- the brand to a greater degree, holders, this was really a fan- to grow the brand, having two lion, and Latin America more resent 36 percent of CKI’s total whether it’s the product, the tastic outcome,” she said. “As key categories that the brand than $200 million of Warnaco’s revenue and 40 percent of its li- stores, the in-store presentation, for the business itself, we know has such recognition for (jeans business. Of those, Brazil is more censing revenue. the points of sale within depart- we can accelerate the strate- and underwear) back in-house than $150 million and China CKI’s Murry added, “The ment stores,” Murry added. “We gies that were put in place, and is critical,” he said. “We will more than $200 million. “Those Warnaco business was such a will be able to have control over realize the full potential more be able to control the message. are two big emerging market large and complex business every aspect of the business.” quickly than we could have Even with the best of relation- businesses,” McCluskey said. that, going forward, to be able to He said in addition to Asia WWD THURSDAY, NOVEMBER 1, 2012 5 WWD.COM uire Warnaco for $2.9B

accompanied the devastation of ments. “At one point in time, cent domestic to 58 percent, and Hurricane Sandy. Manny [Chirico] had to drive to create a single focus for Calvin Chirico and McCluskey his church parking lot to attend Klein worldwide.” signed off on the deal about a conference call,” Berliner said. Beder said the deal could 6 p.m. Monday night, just two “So I guess you could say that also “open up international hours before the massive storm God was supporting this deal.” and domestic licensing oppor- made landfall near Atlantic City, Prior to the hurricane, tunities for G-III,” which pro- according to Kenneth Berliner, Chirico helped push the deal- duces Calvin Klein outerwear, president of Peter J. Solomon making along with food. “Manny women’s suits, dresses, women’s Co., which advised PVH on the was insistent that every Sunday performance wear and women’s acquisition. Much of Manhattan night that we worked we would better sportswear. had gone dark by the time all the order out from Bice for fresh Asked if there are any other legal documents and the financ- pasta,” Berliner said, referring to acquisitions in the near future, ing were completed at 4 a.m. the Midtown restaurant near the Chirico said “We don’t see any Tuesday morning. J.P. Morgan Peter J. Solomon offices. That’s other acquisitions in the next advised Warnaco in the deal. a switch for Chirico, who helped two or three years. “It was a challenging en- get the Tommy deal over the fin- “This is the strategic, tacti- deavor to finish this deal in the ish line by ordering ice cream. cal focus for us as we go through middle of a hurricane,” Berliner In the end, the businesses the next two to three years,” he said. “This was all carefully simply make sense together. added. “This will take the full ef- orchestrated and we had this “The combination of these fort of our management team and great plan and, as of Friday, ev- two players creates an $8 billion- of our board, and provide us with erything looked like it was going plus revenue giant, with global a tremendous amount of growth Calvin Klein and Linda Wachner kiss into a handful of large com- to be perfect and then all heck heft and strong brand recogni- for the foreseeable future.” and make up. panies. “There’s an emerging broke loose and everybody start- tion,” said Eric Beder, analyst PVH observers should take group of guys in the space who ed calling audibles.” at Brean Capital. “The deal will note, though. The fashion giant and Latin America, the acqui- are truly global and have pow- Nearly everyone who was part allow Tommy Hilfiger to lever- has made three major acquisi- sition will help strengthen the erhouse brands, like in the case of the deal was without power at age the direct global retail reach tions in the last nine years: Calvin businesses in North America of a Coach or a Ralph Lauren, the end, working on cell phones of Calvin Klein, as well as shift Klein in 2003, followed by Hilfiger and Europe. “The opportunities or in the case of PVH, Calvin or or from other people’s apart- PVH’s sales mix from 66 per- in 2010 and now Warnaco. we see are in North America and Tommy,” the financial source Europe, where the execution said. That puts more pressure hasn’t been up quite to the level on smaller businesses with sales it is in those other two regions,” of just a billion dollars or so. Murry said. “We see strong re- The Warnaco acquisition helps gional growth opportunities.” PVH close the gap with the A Look Back at the Past of Warnaco One financial source said the world’s largest apparel vendor, two firms tried to reach some sort VF Corp., which has revenues of However, the crown jewel was the Calvin Klein of agreement repeatedly over the more than $12 billion. By KARYN MONGET Underwear and Jeans brands. Warnaco bought the years. Which company was posi- The deal, which many in the accessories business from Calvin Klein Inc. in 1994 in tioned as the buyer depended on industry saw as inevitable for STEEPED IN FASHION AND financial lore, Warnaco a deal worth $62.5 million ($38.5 million in cash and “whose stock that year was better so long, withstood the howling Group Inc. has had a highly volatile and storied past — $24 million in Warnaco common stock), plus ongoing valued,” the source said. winds, rains and blackouts that and a lot of it revolves around Calvin Klein. fees. In late 1997, Warnaco acquired Designer Holdings Linda J. Wachner, a former foundations buyer Ltd., the maker of Calvin Klein Jeans, in a deal worth at Macy’s Herald Square who served as Warnaco’s about $354 million. At the time, the pact gave Warnaco president, chairman and chief executive over a 15-year one-third of the $2.5 billion Calvin Klein worldwide span, led a leveraged buyout with an investment group money machine. in 1986, wresting control of Warnaco away from existing Warnaco’s series of acquisitions in a little more than management. Observers say the move was akin to those two years had positioned it as a world-class competitor of other Nineties buyout specialists such as Henry with only two real rivals in the Nineties: Sara Lee Corp. Kravis, Saul Steinberg and Ronald Perelman. and VF Corp. Wachner and her group paid 14 times cash flow — The relationship between designer Calvin Klein and $500 million in borrowed money and a $200 million Wachner wasn’t always a smooth one, though. Calvin revolver for working capital — at a time when the going Klein grew increasingly frustrated over the distribution rate for that kind of deal was about six times cash flow. of the underwear and licensed jeans lines in discounters Warnaco went public in 1991 at $20 a share, effectively and, in 2000, CKI sued Warnaco and Wachner for $10 a share based on a two-for-one stock split in federal trademark violations and breach of fiduciary 1994, the same year it completed the purchase of the duty and contract. Warnaco countersued in one of the business and trademarks of Calvin Klein Inc.’s men’s highest-profile lawsuits in fashion history. underwear and a license for the trademarks in Calvin Klein publicly referred to Wachner as “a cancer on Klein men’s accessories worldwide. By 1996, Wachner the industry.” But the designer and Wachner famously had taken Warnaco from a $425 million-a-year apparel kissed and made up in January 2001. The lawsuit, smorgasbord to a sharply focused, branded apparel settled moments before trial was set to begin, added maker that generated sales of $1.06 billion. Wachner legal costs to Warnaco’s highly leveraged financial said the Calvin Klein name gave Warnaco a major entry structure. The mudslinging and unsavory nature of the into the men’s underwear business worldwide, while spectacle in national print and on TV — including an adding a strong designer name to the group’s core appearance by Klein on CNN’s “Larry King Live” — A Calvin Klein Jeans store and innerwear portfolio. caused erosion in investor confidence. Michael Phelps for Speedo. Warnaco’s bread-and-butter brands are Warner’s and All of it toppled Wachner’s empire and Warnaco Olga, both basic bra labels sold mainly at department filed for bankruptcy in June 2001 with $3.1 billion in The dynamic changed once stores. liabilities and $20 million in monthly debt payments. PVH brought Tommy Hilfiger The 138-year-old Warner’s specializes in seamless Wachner was succeeded as ceo in May 2001 by under its wing in 2010. PVH be- bras, average sizes and proprietary post-molding Antonio Alvarez, a turnaround specialist brought in as came the natural acquirer of the applications. The Olga brand is reportedly the second- chief restructuring officer. Wachner left the company smaller Warnaco, which also saw best-selling bra brand and Warner’s is the third at completely that November. a management change at the top department stores. Warnaco emerged from bankruptcy in February after former ceo Joe Gromek re- Diversifying the product mix is one way Wachner 2003, and turned a page that month when it named tired in February and was pres- continued to grow Warnaco’s empire. Warnaco’s Joe Gromek as its new ceo. Market observers said the sured by weakness in Europe. aggressive acquisitions posture took shape in 1996, story of its turnaround effort was by no means over. And PVH had the playing when it made three major purchases: GJM, a $100 But Gromek, who had served as chairman and ceo of field more or less to itself. The million private label maker of sleepwear based in Hong Brooks Brothers, curbed the company’s sales erosion Calvin Klein licensed business Kong, which does Calvin Klein sleepwear; Lejaby- and successfully put it back on track. Gromek retired would have reverted back to Euralis, a $120 million manufacturer of Lejaby bras in February, and Warnaco named Helen McCluskey PVH if another company made a and swimwear in Lyon, France, and Body Slimmers Inc., president and ceo. McCluskey was formerly chief play for Warnaco. a shapewear specialist with estimated 1996 sales of operating officer, a post she was promoted to in With PVH and Warnaco join- between $30 million and $34 million. October 2010. ing forces, power in the fashion industry is further consolidated 6 WWD THURSDAY, NOVEMBER 1, 2012 WWD.COM Retail Sees Slow Revival in Sandy Aftermath {Continued from page one} Barneys New York managed to open at 1 p.m. Tuesday, ahead of the competition. Though Fred’s restaurant inside the store remained closed Tuesday, the staff distrib- uted free coffee, cappuccinos and peanut butter and jelly sandwiches to customers. “Customers were pleased to find us open — we served complimentary coffee and sandwiches at Gene’s Cafe, and traf- fic was strong all day,” said chief execu- tive officer Mark Lee. “Overall, for the six hours we were open, we made a plan for those hours and would have exceeded it had we had more help on hand.” Lee said the decision to open the Madison Avenue store Tuesday was made after enough voluntary sales staff was de- termined to be available and able to ar- rive safely. Fifth Avenue in Midtown bustled with tourists Wednesday afternoon venturing to Saks, Sephora, Uniqlo, H&M, Tiffany, Cole Haan and Michael Kors. “We were the only retailer opened on the street. Shoppers gradually made their way back There was a line out the door,” said a to Manhattan stores Wednesday.

Kors sales associate. GEORGE CHINSEE PHOTO BY As of Wednesday morning, Fifth Avenue stores staying closed included Abercrombie & Fitch, Hollister, Lacoste, ers and bars were packed with people, and day, said UBS analyst Roxanne Meyer. ricane, 294 facilities — stores, clubs and De Beers and Tommy Hilfiger, though a often running low on food supplies. “Irene’s timing was at a more critical distribution centers — were closed, due staffer at Hilfiger later told passersby “We’re getting back on our feet,” time, at the end of August. Overall, it primarily to mandatory evacuations, power the store would open by 1:30 p.m. Fendi, said Steve Siegler, ceo of the 63-unit J. seems too soon to call the impact, but a outages and safety concerns. Although a few Versace, Bottega Veneta, Gucci and Pucci McLaughlin speciality chain. “We have few management teams believe it won’t associates have reported personal property were all open. traffic in the stores and doing business. be material to the overall quarter.” damage, the company said it has no reports Madison Avenue seemed less busy I don’t see a mad rush, but it’s too early Among department stores, Meyer of significant damages to facilities or associ- than Fifth, with many of the luxury re- to tell. I’m sure restaurants and stores said Saks and Macy’s had the most ex- ate injuries related to the storm. tailers closed and traffic minimal at bou- will get busy. People are getting cabin posure in the Northeast. The analyst As of midday Wednesday, 35 stores tiques that were open. Ugg on 59th, how- fever. All of our stores are manned and said Saks’ Manhattan flagship makes remained closed, the majority in New ever, had a big crowd buying the brand’s opened to do business, except for three,” up 22 percent of sales, while roughly 20 Jersey, although New York, Pennsylvania, rain and snow boots and slippers. in Bridgehampton and Southampton on percent of Macy’s business was affected Connecticut and West Virginia were also A smattering of high-end shops Long Island, and Morristown, N.J. The by the hurricane, including Macy’s and impacted. “All things considered, we feel were open, including Chopard, Kwiat, three were either without power or it was Bloomingdale’s flagships. extremely fortunate. We received very Vacheron Constantin, J. Crew Collection, too difficult for employees to get to work. “Assuming no significant store dam- minimal damages to our stores and clubs, Reed Krakoff, Ippolita, Oscar de la Siegler said the company will be donat- age, we still expect sales to accelerate in and the vast majority of our associates Renta, David Yurman and Graff. ing 10 percent of its sales through Sunday early November, post-hurricane and elec- are reporting they made it through the But Chanel, Hermès, Girard- to local firefighters in communities where J. tion, through Black Friday,” she noted. storm OK,” said Mark Cooper, senior di- Perregaux, Devi Kroell, Tory Burch, McLaughlin has stores. Other retailers also According to Eqecat, a catastrophe-risk rector of global emergency management Fred Leighton, Cartier (the Fifth Avenue initiated donations to the Red Cross and modeling company, economic damages in a press briefing Wednesday morning. location was open), Di Grisogono, Oliver various relief organizations and charities. from Sandy could reach $20 billion with $7 After initially closing 140 stores Peoples (which reopens at 10 a.m. today), The silver lining for retailers, ac- billion to $8 billion in insured losses, ex- across the East Coast, which fell to 60 CH Carolina Herrera, Derek Lam, cording to Morgan Stanley retail ana- cluding flooding, which would make Sandy on Tuesday, Target had only four stores Pomellato, Jimmy Choo, Mauboussin, lyst Kimberly Greenberger, is that the the fifth most damaging storm in economic still closed on Wednesday, in the Bronx Fabergé and Hublot remained closed. storm’s impact on sales should be in terms over the past 20 years. Irene was and Farmingdale, N.Y., and Fairfield and At The Shops at Columbus Circle in the first week of November, rather than estimated to have caused $15.8 billion in South Plainfield, N.J. “We have guests that the Time Warner Center, it was business later in the month, which is more criti- damages with $4.3 billion in insurance have started to come back to the stores to as usual, save for Whole Foods, which had cal as the kickoff of holiday shopping. losses, excluding flooding. shop for essentials that they need. It’s a a line and an associate-bouncer enforcing “While Sandy is a likely November sales As of Wednesday morning, Macy’s had lot of basic items, like bottled water, food, a one-in-one-out policy. While some shop- headwind, we think the timing limits about 25 stores still closed due to power paper products, cleaning supplies and pers wandered into A|X Armani Exchange the overall monthly impact,” she wrote outages, primarily in northern and cen- time-occupying activities such as games,” and C. Wonder upstairs, many searched in a research report. “Mall traffic likely tral New Jersey and on Long Island, as said Target spokeswoman Jessica Deede. for electrical outlets to power up cell turned negative starting Saturday [Oct. well as one in Cleveland. Macy’s Herald She said damages were confined to phones and computers. 27], while widespread power outages and Square reported that the store was busy. front doors and some leaking roofs, and In the Garment District, Kellwood Co. post-storm cleanup could drive disrup- “Many individuals have been under a nearly 40 stores were operating off gen- reopened its corporate office in New York tion through November, week one.” lot of stress, so shopping is a way to re- erator power on Wednesday. “Right now, on Wednesday. The Vince stores remained Greenberger said the retailers with lieve some stress,” said Macy’s corporate we are really focused on replenishing closed in New York City; Short Hills, N.J., the greatest exposure to Sandy were Saks spokesman Jim Sluzewski. stores,” and staying focused on invento- and Manhasset, N.Y. and hoped to reopen Inc. with a 42 percent overlap, Ann Inc. Saks still had two stores in New ries, vendor situations and road condi- on Thursday. The company’s Rebecca at 35 percent and Macy’s Inc. at 33 per- Jersey, in Bergen and Short Hills, closed, tions for receiving goods. “Some of our Taylor stores on Madison Avenue and in cent. The stores with the smallest over- as well as its Walt Whitman Mall store on stores are experiencing reduced hours, Westchester, N.Y., reopened, but the units lap included Lululemon Inc. at 20 per- Long Island. with limited lighting in parking lots, or in the Meatpacking District and NoHo re- cent, Tiffany & Co. at 17 percent, Coach Metro-area mall operators also report- they are in areas with curfews.” mained closed. Ralph Lauren’s corporate Inc. at 17 percent and Ross Stores Inc. at ed traffic returning Wednesday, aided by In Connecticut, “We are open today. office on Madison Avenue reopened on 9 percent. Discounters generally had less school closings, consumers’ need to re- Everyone is safe, but it’s terrible in terms Wednesday. exposure, with Target Corp. at 23 per- plenish essentials and basics, some late of getting around,” said Bob Mitchell, pres- Maintenance worker Robert Allen cent, Wal-Mart Stores Inc. at 18 percent Halloween shopping, or just people feel- ident of the Mitchells Family of Stores, said only 15 percent of the employees of and Costco at 14 percent. ing a touch of cabin fever and looking for which operates Mitchells and Richards in the 150-plus companies at 1407 Broadway Conversely, hard-line retailers like something to do. Connecticut, Marshs on Long Island and made it to work. He had been working Home Depot and Lowe’s are likely to ben- Taubman Centers Inc. said its Wilkes Bashford in San Francisco. “Eighty- there as well as at 499 and 462 Seventh efit from consumers spending on storm Stamford Town Center in Connecticut re- five to 90 percent of the towns in the area Avenue since Sunday. A security guard preparations and cleanups and repairs. opened Wednesday with normal operat- [of Mitchells and Richards] are completely at 1411 Broadway estimated that about Last year’s Hurricane Irene drove 100 ing hours. “Traffic through the mall has without power. Long Island is pretty much 10 percent of the building’s 1,500-plus basis points in same-store sales at Home been steady to heavy since late morning,” the same,” Mitchell said, though Marshs employees were at work Wednesday. At Depot and 60 basis points at Lowe’s. reported mall spokeswoman Pam Wiles. was expected to open today. 525 Seventh Avenue, only seven or eight According to research conducted by Taubman’s Fair Oaks Mall in Fairfax, Several apparel and beauty firms were of the 42 companies had offices open, ac- UBS, Sandy’s impact on specialty retail Va., reopened Tuesday at 10 a.m. “We forced to delay earnings announcements cording to Israel Perez, who manned the is “too soon to call,” but the timing of the had great traffic throughout the day, very due to the storm. Ralph Lauren Corp. security desk despite usually handling storm was “less critical than Irene.” much like a Saturday,” observed Robbie twice postponed the release of its second- freight for the building. At 530 Seventh The specialty retailers most exposed to Stark, the mall’s general manager. quarter earnings, which was originally Avenue, most of the 200 companies had Sandy’s wrath were Ann Taylor, The TJX Simon Property Group Inc., which scheduled for Wednesday, then Thursday some staff on the premises. Cos. Inc., Urban Outfitters, the Gap and experienced minor damage to certain and is now slated for Friday. True Religion Much of Manhattan below 42nd Street American Eagle Outfitters, with roughly 21 properties, had three premium outlets Apparel Inc. moved its third-quarter earn- was still without power, and gridlock was to 22 percent of their fleets impacted. and 12 malls still closed as of Wednesday, ings announcement, originally sched- widespread on both the East and West Sides, While Sandy likely caused more phys- principally in New Jersey and on Long uled for Tuesday, to Monday. Similarly, particularly Midtown, where most of the ical damage, most of the impact was on Island, and said it was working with the Elizabeth Arden Inc. postponed its first- shopping action occurred. Where opened, Monday and Tuesday during a transition- Red Cross to facilitate donations. quarter earnings announcement from McDonald’s, Starbucks, grocery stores, din- al product period, between fall and holi- Wal-Mart said at the peak of the hur- Wednesday to Monday. WWD THURSDAY, NOVEMBER 1, 2012 7 WWD.COM FASHION SCOOPS Penney’s Shares Fall After Report BOSS PAUSE: Add the Solomon R. Bovrisse’s charges include claims that Guggenheim Museum’s Artists’ Dinner Prada Japan chief executive officer to the list of New York social events Davide Sesia allegedly asked her to fire By EVAN CLARK canceled in the aftermath of Hurricane employees he deemed unattractive or Sandy. The event, which was set for overweight. Gael García Bernal designed a T-shirt as WALL STREET is starting to worry that J.C. tonight, would have seen the awarding Bovrisse’s agent put out a statement part of a Levi’s and Intel collaboration Penney Co. Inc. is falling off the promotion- of the biennial Hugo Boss Prize for shortly after last week’s court ruling, to benefit Los Angeles’ Museum of al wagon. contemporary art. The prize’s 2012 expressing frustration and stating that Contemporary Art. Shares of the company retreated 5.7 finalists are Trisha Donnelly, Rashid Johnson, Bovrisse is considering her options for percent to $24.01 Thursday after Deutsche Qiu Zhijie, Monika Sosnowska, Danh Vo and appeal. A Prada spokesman said that from the T-shirt sales to the museum’s Bank analyst Charles Grom said a recent Tris Vonna-Michell. — MATTHEW LYNCH the court’s decision “eliminates any educational programs. promotional offer for 30 percent off all possible doubt” about the matter and Following this project and the clearance goods might undermine the com- WATER WORLD: Evian declined to elaborate on the specifics film workshop it sponsored at MOCA pany’s two-tier pricing strategy. has teamed with Diane of the case. Prada has a countersuit last year, Levi’s is lining up more Chief executive officer Ron Johnson von Furstenberg for pending against Bovrisse alleging that collaborations. After partnering with swore off promotional sales when he laid the design of its 2013 she made false statements. — WWD STAFF Filson and Nike earlier this year, out his vision for the company in January. limited-edition bottle, the San Francisco denim company is But the transition to a simpler pricing sys- marking the first LUXOTTICA TO BUY MIKLI?: Luxottica working with Liberty Art Fabrics to tem without coupons has been a hard one. time the water brand Group SpA shares closed up 0.72 release a grouping of men’s and women’s Comparable-store sales fell 20.3 percent in has linked with an percent to 29.35 euros, or $38 at denim next April. “The end goal is to the first half and Johnson raised eyebrows American designer. current exchange, on Wednesday get people to look at this brand in a last month by offering shoppers $10 off In von Furstenberg’s amid speculation the Italian eyewear different way,” said Christian Parkes, Levi’s a purchase as a “gift” and an incentive to handwriting are the producer may be close to securing senior director of global marketing. draw consumers to the revamped stores. words “water is life French high-end eyewear maker Alain MOCA director Jeffrey Deitch is also On Sunday, the company sent out an e- is love is life is love Mikli. According to a report in Italy’s eager to work with brands from the mail advertising 30 percent off all clear- is life is water” daily Il Sole 24 Ore, a deal could fashion industry. Past collaborators ance items, Grom said. The discount is printed on the be unveiled by the end of the week. include Chanel, MAC Cosmetics and available to store and online shoppers bottle in organic Luxottica had no comment, while Fendi, the latter of which he’d like to through Saturday. ink along with officials at Mikli could not be reached link with again. “Decades ago, it would “On the heels of a $10 in-store coupon the designer’s for comment. be banks that funded museums,” he provided earlier [in October], free haircuts signature heart Luxottica owns the Oakley and Ray- said. “They don’t do that anymore. for kids and free family photos to begin logo in red. The Ban labels and holds eyewear licenses Now, we’re collaborating with brands later this week, we believe JCP is backtrack- bottle itself is with brands such as Bulgari, Burberry, like these.” — KHANH T.L. TRAN ing on its no-promotion strategy, confusing recyclable and Chanel, Dolce & Gabbana, Donna customers, and we, therefore, remain skep- features a new Karan, Polo Ralph Lauren, Prada, MODA OPERANDI POPS UP IN BRAZIL: tical of near-term improvement in business screw-cap design. Tiffany and Versace. Luxury e-tailer Moda Operandi is trends,” Grom said. Since 2008, Alain Mikli founded his company in 1978 headed to Brazil for its first brick- The analyst said the promotion could Evian has and opened his first store in Paris in the and-mortar pop-up store. Planned also indicate that Penney’s inventory levels collaborated Eighties, followed by New York in 1992. for the upscale Cidade Jardim mall “may be in poor shape relative to sales.” Diane von with designers In addition to the Alain Mikli brand, in São Paulo during the month of A spokeswoman for J.C. Penney said: Furstenberg’s tie-in such as Paul Smith, retail stores carry the collaborative March, the shop will focus on British “We are not changing our pricing strategy. with Evian. Issey Miyake, Jean brands Starck Eyes, Jean Paul Gaultier designers, including Jonathan Saunders, [J.C. Penney] still has two kinds of pricing: Paul Gaultier and and Vuarnet. — LUISA ZARGANI Peter Pilotto, Matthew Williamson, everyday low prices and clearance. We uti- Christian Lacroix on limited editions. Charlotte Olympia, Nicholas Kirkwood and lized a temporary percentage-off clearance, Von Furstenberg’s will be available in CREATIVE RECREATION: Fashion, Ostwald Helgason. as is common in the industry, to help reduce November in-store and through evian. technology and art converged to brew a “Brazil has emerged as a key inventory levels at the end of the season. fr for 2.49 euros, or $3.23 at current creative collaboration between Levi’s, market because of their strong Percentage-off clearance is a way for retail- exchange. — DAVID BAZNER Intel and Los Angeles’ Museum of demand for great international design. ers to take deeper price reductions on clear- Contemporary Art and young talent We are thrilled to be opening our ance merchandise without having to incur CASE CLOSED: A Tokyo District Court from the entertainment and art worlds. first pop-up store that will further the labor or expense to mark down each indi- has rejected former Prada Japan At a party Tuesday night at MOCA, introduce Brazilians to the talented vidual item of merchandise across the store.” retail manager Rina Bovrisse’s lawsuit the museum unveiled $34 T-shirts British designers that are having a The spokeswoman said the 30 percent off against the Japanese subsidiary of that were designed by actor Gael García true moment right now,” said Aslaug on clearance goods would help prepare the the Italian luxury goods company. Bernal, singer Santigold and artists Mariko Magnúsdóttir, cofounder and chief stores for the holiday season. Bovrisse filed a lawsuit in 2010 alleging Mori and Xu Bing. The tops will be sold executive officer of New York-based “We continue to stand behind selling that Prada Japan managers harassed starting Nov. 4 at MOCA, on Levi’s Web Moda Operandi. The site is partnering great product at everyday low prices,” she her and discriminated against her site and through its stores in the U.S., with Alice Ferraz, founder of the said. “Then, when it’s time to make room for and other employees on the basis of Asia, Australia and Europe. Intel and Brazilian blogging platform F*Hits, on fresh new merchandise, we clear through the physical appearance. Specifically, Levi’s pledged to contribute $100,000 the venture. — DAVID LIPKE older merchandise to make room for new.”

about gender politics. Officially, the MEMO PAD channel covers “gender dynamics in the workplace.” Contributors include several noted authors besides Slaughter, WOMEN ONLY: Here’s one benefit of being like Mark Oppenheimer, but one Atlantic based out of Washington: you get to veteran who won’t be blogging on it is launch your new digital channel without Hanna Rosin. She already blogs about any hurricane disruption. The Atlantic women and men at her Slate blog, The For more career opportunities log on to WWDCareers.com. magazine, which has heavily invested XX. — Erik Maza on new verticals like Quartz, a THE GLAMOUR LIST: business site, and When Glamour the Atlantic Wire, set out to pick its a news aggregator, annual list of the is courting women women of the year, next with a new it saw winning SALES PATTERNS, SAMPLES, topic channel qualities in both PRODUCTIONS Los Angeles based Junior & Girls tops dubbed The Sexes. Selena Gomez and Full service shop to the trade. manufacturer/importer looking for a Fine fast work. 212-869-2699 New York showroom/salesperson with It was set to quietly Each photo Supreme Court established and successful connec- launch Wednesday Justice Ruth Bader tions with major chains and dept in Glamour’s stores. Please e-mail your resume to: night. Helping guide women of Ginsburg. The annual [email protected] coverage is Anne- the year list list, always an Marie Slaughter, the was shot eclectic mix, this author and former by a female year also includes Hillary Clinton aide photographer. Jenna Lyons of J. Seeking a dynamic Sales Coordinator who had a viral Crew, Annie Leibovitz, for its Wholesale Division in NYC. PHOTO BY MARILYN MINTER MARILYN PHOTO BY Must be creative, organized and a self- hit on her hands architect Zaha Hadid, starter! Fashion, sales and customer with her “Why Women Can’t Have and the recipient of the most enviable service experience required. Whole- sale experience is a big plus. Great op- It All” cover story. Slaughter is also book deal this year, Lena Dunham of portunity and growth potential for the joining the magazine as a contributing “Girls.” In honor of Leibovitz, every right candidate! Please send CV to [email protected] editor. The Atlantic is following in the photo in the annual portfolio was shot footsteps of other media outlets covering by a female photographer — 114 in all. women’s interests with dedicated blogs A perfectionist until the bitter end, or verticals, like New York’s The Cut Leibovitz left her portrait to the staff of (800) 423-3314, or email [email protected] and Buzzfeed’s Shift, and the growing her studio. — E.M. cottage industry of books and articles {Continued on page 8} 8 WWD THURSDAY, NOVEMBER 1, 2012 WWD.COM Men’s MEMO PAD {Continued from page 7} ONLINE GLITCH: On Monday, the Huffington Post fully expected to blog every detail of Hurricane Sandy. Newspapers might Randy Johnson’s Watch Pitch have been saddled with delivery trucks unable to get through fallen trees and debris, but, online, Arianna Huffington’s gang I retired,” he said with a laugh. “I’ve vacationed could be read around the clock. Likewise, the people at By JEAN E. PALMIERI with my family, gone on safari to Africa and gone Buzzfeed and Gawker could envision the millions of eyeballs on three USO tours in Afghanistan and Kuwait.” He that would page through their disaster photo galleries as NO MATTER how old you get or how accomplished said he’s not really involved in baseball anymore, their dead-tree counterparts failed to keep up with the latest you might be, there’s always something new to be only attending games sporadically and coaching hurricane updates. Datagram, home to all their servers, had learned. Just ask Randy Johnson, the five-time Cy his son’s high school team. “I’m more of a fan now already tested its emergency systems in Battery Park on Young Award-winning pitcher. that I’m not playing the game,” he said. “But I enjoy Monday, and they were ready to take on Frankenstorm. “You can always learn something at any craft,” watching the young players. But within hours of Sandy’s shellacking of Manhattan, said Johnson. “The good ones always stay ahead of “And I’ve been taking some photos, things like Datagram’s basement was “completely filled with water and a the curve.” NASCAR, motocross racing, concerts and the few feet into the lobby,” according to a post on its Web site. On The 6-foot, 10-inch Johnson, nicknamed “The Big African safari. I’ve always enjoyed that.” Tuesday morning, HuffPo and Gawker were all dark; Buzzfeed Unit,” said the best advice he was ever given was Most recently he has a new gig, signing on to be was out for six hours after the hurricane made landfall. by another pitching ace, Nolan Ryan, the North American ambassador for So where did they all go? To Tumblr! who noticed a flaw in Johnson’s pitch- Ulysse Nardin, the Swiss watch brand. In Sandy’s immediate aftermath, the online receptacle ing mechanics during the 1992 sea- Patrik Hoffmann, chief executive offi- of myriad cat GIFs and other digital ephemera became son. “I’ve always struggled with my cer of Ulysse Nardin, said he got to know online news media’s main evacuation center. Buzzfeed, mechanics because of my height,” he Johnson around 10 years ago because he Capital New York and all of Gawker Media’s blogs took to the said. But Ryan suggested another way was an avid customer at a luxury watch microblogging platform. As for the newspapers’ Web sites — for him to land after releasing the ball, store in Scottsdale, Ariz. “I knew Randy they kept operating just fine throughout Sandy.

and the advice turned out to be golden. JOHN AQUINO PHOTO BY liked and wore our watches. And we’re The Tumblr analogues were bare-bones versions of the “It had a big impact on my career and not much into ambassadors, we only regular sites — there were lots of user-submitted videos really put me over the top,” Johnson have three at the moment, so I wasn’t re- and images of Manhattan in the dark; it seemed as though said. “And he was in a different organi- ally searching for anyone, but this was everyone had GIFs of Mayor Michael Bloomberg’s sign-language zation, which was unheard of.” just organic.” The other two are Russian interpreter. They were in use for less than six hours each, As Johnson aged, he tried to return figure skater Evgeni Plushenko and but they allowed the hyper-competitive sites to be in front of the karma by giving pointers to young Yuvraj Singh, a cricket player. their readers and disseminate their stories quickly. pitchers on his teams. “The biggest The company created a special watch While it was working to restore the home page, The thing I preached was never to be con- for Johnson called The Big Unit. The Huffington Post created a site on Blogsmith, AOL’s blogging tent with how good you are because stainless steel case is coated with rub- platform, for all its breaking news. Ryan Grim, HuffPo’s you’ll never know if it was your best ber and has a sapphire glass back that is Washington bureau chief, said engineers were working to year until after you retire and reflect both sporty and luxurious. The dial is in- build something similar for its election page, but it became back. I won five Cy Young Awards scribed with the words Big Unit, there’s clear that Tumblr would be faster to use. Randy Johnson and I could have been very content a baseball on the second hand, and The page existed already — they just hadn’t used it for hard after four, but I actually had my best Johnson’s number, 51, is on the bezel. news. And they didn’t have to alter their normal editing protocol: year statistically when I won my fifth.” He gave Only 100 of the watches have been made and they are Reporters filed to their editors, who then passed along stories to this advice to pitchers Tim Lincecum of the San being sold at the company’s 55 authorized dealers in HuffPo’s social media editor, Ethan Klapper, to post on Tumblr. Francisco Giants and Brandon Webb of the Arizona the U.S. as well as its two company-owned boutiques “It’s extremely user-friendly and shareable,” Grim said. Diamondbacks, two of the teams he played for dur- in Florida. The retail price is $15,500. With the election a week away, it was extra important for ing his 22-year Major League career. “I wore number 51 for the majority of my ca- HuffPo to be online immediately with political news. The last team he played for was the San reer,” Johnson said, “although Bernie Williams had “Reporters only care about being part of the conversation Francisco Giants, which just won the World Series that number for the Yankees so I wore number 41 and getting the news out there,” Grim said. “We couldn’t last week. “Many of the same kids are there today as when I played in New York.” afford to let a few hours slip by.” when I was there,” he said. “I was 46 years old then He said when Hoffmann asked him to be the With all the news sites on Tumblr, the microblogging site and it was fun to mentor them and try to help them face of the brand in North America, “I about fell off presumably had a blockbuster couple of days. A spokeswoman better understand how to be successful. They had my seat. Baseball allows you to travel and see a lot said, “We’re delighted we’re able to provide the tools to help the physical attributes, but they needed help from a of interesting places and when I was playing, I was our community,” but she did not to share exact traffic figures mental standpoint. I was able to give them insight.” really into watches. I got into collecting watches by deadline. He mentioned Giants pitcher Matt Cain as one of and other timepieces and even prior to coming on Newspapers like The New York Times and The Wall those he’s most proud of mentoring. “The organiza- board, I had six or seven Ulysse watches. So I was Street Journal anticipated delivery problems to continue to tion and the owner thanked me,” he said. honored to be asked to be a partner.” areas closed off by hurricane damage. But, alternatively, both Since retiring from the game in 2009, Johnson He said he hopes to travel to the company’s fac- papers took down paywalls to their Web sites. The Times has spent a lot of time touring the world, working tory in Switzerland to “meet the workers and see will remain free until at least Friday, a spokeswoman said, on his photography skills and visiting the troops in the process.” He plans to take his camera along to while the Journal had not decided how to proceed beyond the Middle East. “I’ve really had a boring life since document the process. Wednesday night. — ERIK MAZA

Pols of THE WEEK PRESIDENT OBAMA: B- MITT ROMNEY: B

This shirt is a The well-built  perfect square. His already American suit He’s worn chiseled features manages to maintain After weeks of With less than one better-fitting are getting the shape of his flawless hair, this shirts during the week to go before the sharper as he frame, but the excess time around, not campaign. This loses more weight wrinkling on the so much. He needs election, President week’s choice is under the stress sleeve makes it look a to visit his barber too boxy. Obama and Mitt of the race. Load bit unpolished. before Election Day. up on Powerbars; Romney might have it’s almost over. He’s normally After all these really good about weeks, he’s It must be bridal some of their last- showing a hint of a finally mastered week on the trail. minute campaign cuff, but he misses the sleeve roll to Although the subtle the mark this week, perfection. light blue stripe creating even more is not as literal as stops derailed by Thank the fashion A solid purple of a visual effect of Obama’s, it’s still gods he gave the mom Hurricane Sandy, silk pastel tie an oversize suit. in wedding-day evokes too many jeans a rest, opting for territory. We’re but they still bridal references these clean, sleek gray starting to miss the to be taken pants. worked the trail in The pants are club stripe. seriously. Stay hanging off of him. away from Vera unaffected areas in The only saving His square-toed Wang territory grace of the outfit dress shoe epitomizes hopes of converting and go back to is the perfect break one of the biggest the power tie. the remaining that highlights mistakes American the lace-up shoe to men make. We really undecided voters. perfection. miss the days when he wore a classic lace-up dress shoe with a hint of Italian flair. ROMNEY PHOTO BY JUSTIN SULLIVAN/GETTY IMAGES; OBAMA BY JOSHUA ROBERTS/BLOOMBERG VIA GETTY IMAGES ROBERTS/BLOOMBERG JOSHUA JUSTIN SULLIVAN/GETTY IMAGES; OBAMA BY ROMNEY PHOTO BY WWDWhat’sNextInDenim SECTION II

Back to Basics

Oversize slouches back in style. /PAGE 10

DUELING DISTRICTS/PAGE 4 Italy’s Marche and Veneto regions crave attention. ERVANTES; FASHION ASSISTANT: DEVIN HERSHEY FASHION ASSISTANT: ERVANTES; YOUTH MOVEMENT/PAGE 6 Children’s divisions and celebrity influences are growing.

SUSTAINABILITY FACTOR/PAGE 8 Brands push the issue with innovation.

Desigual cotton denim jeans

PHOTO BY GEORGE CHINSEE; STYLED BY KIM FRIDAY MODEL: RENATA G/MUSE; HAIR BY SEIJI AT THE WALL GROUP; MAKEUP BY MISUZU MIYAKE FOR NARS COSMETICS; PHOTO ASSISTANT: ADRIANA DEC MODEL: RENATA G/MUSE; HAIR BY SEIJI AT THE WALL GROUP; MAKEUP MISUZU MIYAKE FOR NARS COSMETICS; PHOTO ASSISTANT: 2 WWD THURSDAY, NOVEMBER 1, 2012

SECTION II WWD.COM

WHAT’S NEXT IN DENIM By the Numbers WHETHER IT BE BRIGHT SHADES OR PREMIUM PRICES, THERE ARE INDEED HOT POCKETS IN DENIM.

ferent finishes, a move back to blue, of dollars from 16.5 percent. and ombré looks, but we’re also see- By ARNOLD J. KARR prints, coatings, even multiple silhou- The biggest decline in channel ing strength in darker denim jeans and ettes and interest in sustainable and sales came from national chains, as some less overt pocket designs.” DENIM’S GOT ITS GROOVE BACK. recycled fabrics and models. Denim for J.C. Penney Co. Inc. struggled during Like many companies known for After floundering in the aftermath the first time in almost a decade had a the early stages of its transformation, their jeans, from premium to budget, of the recession — more so than even bit of a challenging period, but a lot of while Kohl’s Corp. dealt with tepid Silver is experiencing strong growth in the midst of it — women’s jeans that had to do with other categories sales generally linked to customers’ not only in its nonjeans bottoms but availed themselves of a rainbow of catching up.” lingering economic concerns. Sales at also in tops. The ceo said that about colors to hold consumers’ interest and Viewed in the context of overall the national chains declined 4 percent, half the company’s product offering help them justify additional purchases women’s apparel, denim bottoms saw to $1.02 billion, as share declined to is now in various tops, with the great- despite the abundance of denim al- their share of units hold steady in the 12.7 percent from 14.2 percent. est growth coming in jean jackets and ready in their closets. 12 months ended in August compared “With the exception of online, spe- vests in what’s seen as something of a The color movement remains to the prior year, at 4.1 percent, while cialty is growing at a better rate than return to the idea of a denim uniform.

strong, with stores and brands embrac- its share of dollars transacted rose other channels in fashion,” said Cohen. “It’s not that far beyond Woodstock, ing it somewhat more selectively than to 7.4 percent from 7.1 percent. And “They’re no longer looking for the wid- really,” he said. “The market is coming in the last few years, and the premium denim continued to provide the mar- est assortment; they’re looking for the back to that kind of feeling and look and fashion portions of the market are ketplace with a degree of price insu- best assortment. A lot of the brands in denim — open to all kinds of ideas moving forward with a menu of new and treatments. At the same time, it’s a and not-so-new ideas, from coatings fairly traditional look based on where

and prints to new takes on more tradi- this market has been.” tional indigo. WOMEN'S JEANS SALES* In addition to jeans companies that With continued growth of premium are new to the denim dance, various jeans exerting upward pressure on fashion brands with established con- prices and even mass- and midtier- temporary and designer businesses markets seeing prices lifted by higher 2012 2011 Change are moving towards the fabric and its

cotton and distribution·· costs in the $8,004,373 $7,454,787 7.4% various lifestyle expressions, as well as past year, it’s hardly surprising that Sales ($000) the opportunity it provides for incre- sales and the average price of women’s Units (000) 301,313 310,439 -2.9% mental sales gains. In reporting strong jeans went up even as units contracted. third-quarter results that were led by In the 12 months ended in August, Average Price $26.57 $24.01 10.7% its stable of denim brands, The Jones sales of women’s jeans rose 7.4 percent Group Inc. also lauded the progress of to $8 billion from $7.45 billion in the the Jones Jeanswear·· assortment. prior year while units declined to 301.3 “We continue to believe that denim million from 310.4 million during the is a great way to encourage a complete same time span, according to research WOMEN'S JEANS AS A PERCENTAGE OF WOMEN’S APPAREL* look for the Jones New York brand,” from The NPD Group. That set the av- said Richard Dickson, president and erage price for a pair of women’s jeans ceo of Jones’ branded businesses. “So 2012 2011 Change it’s not just about denim, but it’s what goes with denim. And again not get- Sales 7.4% 7.1% 0.2% ting too far down the road, but it also speaks to the evolving workplace. It’s not just about Units 4.1% 4.1% 0.0% Denim is not just sort of a casual life- denim, but it’s what Average Price 181.7% 173.6% 8.1% style aspect of our consumer’s life.” goes with denim. There may be a WOMEN'S JEANS SALES BY PRICE* — RICHARD DICKSON, JONES NEW YORK smaller market for 2012 2011 Change premium, but people Under $25 $2,801,416 $3,133,912 -10.6% at $26.57, a full 10.7 percent higher no longer balk at $75 than in the 2010-11 period. $25-$49.99 $3,171,333 $2,715,497 16.8% While jeans priced below $25 un- for a pair of jeans. derwent a sales decline of 10.6 percent, $50-$74.99 $1,092,144 $954,655 14.4% to $2.8 billion from $3.13 billion, the $650,723 44. — MARSHAL COHEN, three higher price categories tracked $75 and up $939,480 4% by NPD registered increases, and none THE NPD GROUP stronger than the 44.4 percent·· rise in *12 months through August jeans priced at $75 and up, which hit $939.5 million from $650.7 million. The $25-to-$49.99 stratum was up 16.8 per- lation — the average price of a pair of have opened up their own retail and Andreas Kurz, president of Akari cent, to $3.17 billion, and the $50-to- jeans was 81.7 percent above the aver- they’re cultivating customers who are Enterprises LLC, which provides con- $74.99 category nearly as much — 14.4 age for women’s wear, up from the 73.6 brand loyal, both online and in the sulting services to a number of fashion percent to $1.09 billion. percent edge enjoyed in the 2010-11 stores. And the move of brands into companies, feels that color has had its “We’ve elasticized the jeans busi- period. retail is more prevalent in denim than day. “It’s been everywhere and at every ness, just like gasoline,” said Marshal anywhere else.” price point, and now we’re seeing em- Cohen, NPD’s chief industry analyst. SPECIALTY SURGES AGAIN phasis on surface interest and prints,” “There may be a smaller market for With specialty stores strongly focused UNIFORM APPEAL he said. “When you’ve seen the prints premium, but people no longer balk at on denim and many denim vendors Among the vendors beginning to make and novelties, the next part·· of the cycle $75 for a pair of jeans. Consumers have starting or rapidly expanding their own the shift into retail is Silver Jeans Co., is that things will get blander again bought into the idea that a great pair of retail networks, online and off, special- which in May disclosed plans for a — away from prints and into denim jeans is worth the extra money.” ty stores continued to build on their network of up to 50 stores in the next again.” What consumers certainly won’t already commanding market share in decade. Michael Silver, chief executive He noted that there’s been a “sharp accept, he noted, is adding to their the women’s jeans business. Specialty officer of the Winnipeg, Canada-based incline” to interest in environmentally personal inventories of jeans already store jeans sales in the September- company, said he expects color to enjoy responsible denim, whether involving represented. So color, which many con- to-August period rose 15.7 percent continued strength moving into spring recycled yarns, such as Tencel, or or- sidered the savior of the denim market to $3.46 billion and their share of the 2013, although he sees it moving more ganic components and fabrics. in recent years, is no longer the un- women’s jeans business consequently towards nonjeans silhouettes such as “It’s kind of happening behind the limited opportunity it once seemed to was elevated to 43.3 percent of dol- shorts, skirts and capris and other mid- scenes, but there’s growing interest be, but instead has served to teach the lar volume from 40.2 percent. Market length leg styles. among brands and consumers,” Kurz market a lesson — if you create it, they share was flat or down for every other “In indigo and any of the colors said. “The brands don’t want to adver- will come. channel of distribution, with the sole people are talking about, one of the tise it and, while the consumer’s inter- “To me, the biggest change is the exception of department stores, which constants for us is surface interest,” ested, she isn’t necessarily willing to acceptance of multiple trends at the saw sales rise 8.7 percent, to $1.34 bil- he said. “We’re printing on color and pay for it. It’s not exactly at the point same time,” Cohen added. “We see dif- lion, while share moved to 16.7 percent doing color prints, doing weathered that organic food is.”

4 WWD THURSDAY, NOVEMBER 1, 2012

SECTION II WWD.COM

WHAT’S NEXT IN DENIM Italy’s Struggling Denim Districts MARCHE AND VENETO REGIONS BATTLE EURO ZONE WEAKNESS, FOREIGN COMPETITION.

ment crisis: Confindustria Pesaro vibrant textile industry, which is expe- finishing and rolling. Flavio Berto, a By CYNTHIA MARTENS and Urbino data show that hours of cassa in- riencing many of the same problems as fourth-generation family employee, said ALESSANDRA TURRA tegrazione, a government-funded leave, the Marche further south. the biggest competition for Italian denim saw a 34.3 percent increase in the sec- Flavio Berto, ceo of Berto Industria companies now comes from Turkey, fol- MILAN — Denim companies in Italy’s ond quarter of 2012 compared with Tessile and president of Padua’s lowed to a lesser extent by countries Marche and Veneto regions pride them- 2011. “Skilled workers manage to find fashion and textiles branch of such as Pakistan and China. selves on being international textile new jobs in similar sectors, but those Confindustria, said he had seen a dip “In the past, Turkey focused on hubs. As the euro zone crisis lingers with no specific training are still unem- in the number of textile companies that quantity. Now, more and more it offers and consumption in Italy continues to ployed. After the closure of many com- were members, which he attributed to products of quality,” he noted, add- decline, however, they’ve been forced panies in the region, only 20 percent of firms going out of business. “I thought it ing that price competition with Asian to adapt to foreign competition and employees found a new job in the same would be worse, but Veneto is holding countries is “a lost battle,” as operating meet changing customer demands. industry,” Sperandini said. its own. Still, there are some companies costs in Italy are far higher. According to a European Textile and Despite the general downturn, some disappearing from the registry,” he said. Giovanni Petrin, general manager of Apparel Association report, exports companies are still waving the Denim “Everyone knows the situation in Martelli Lavorazioni Tessili, which spe- of Italian textiles totaled 27 billion Valley banner. Manufacturer Industria Italy is difficult right now. There is cializes in dye-works and laundry and euros, or about $36 billion at average has a plant in Vedelago, in the Treviso exchange, in 2011, up 9.4 percent over province of Veneto, said Turkey has a 2010. While the majority — 56.4 per- rich textile culture that its government cent — of exports were intra-European is actively supporting. Union, demand from non-EU areas was “The textile sector made Italy fa- growing at a faster rate, up 14.2 per- mous, it built up our GDP [gross do- cent in a year. However, the number of mestic product], and we’re not protect- Italian textile companies dropped by ing it,” he said, adding that Turkey’s an average of 2.3 percent in the same non-EU status spared it from following period, or by roughly 1,200 business stringent European regulations. units. The total number of employ- Petrin also said many small textile ees decreased by 2.6 percent, a loss of laboratories had shuttered across Italy, about 11,700 workers. or, if they still existed, were frequently Here, an update on the Marche and run by Chinese immigrants — who may Veneto regions and the health of Italy’s be familiar with the textile business, denim districts. but not with Italian craftsmanship. Michele Ruffin, ceo of Okinawa, a MARCHE labels, belts and accessories compa- Nestled in the Marche region, the me- ny based in Montagnana in the prov- dieval town of Urbania is the beating ince of Padua, said Italian brands heart of central Italy’s “Denim Valley.” are still unrivaled for their creativity The concentration of denim compa- and workmanship. nies in the Montefeltro valley dates back “One of our weaknesses was moving to the Seventies, when local entrepre- a lot of production processes out of Italy neurs started producing jeans and open- A look at ISKO’s creative room, to make greater profits, believing that we ing washing and finishing companies. where style and design research could replicate the knowledge and man- According to a case study published in occurs, and (below) results of a ual skills of our artisans. This proved to 2010 by University of Urbino’s online collaboration with Diesel. be damaging both for the market and for newspaper, in the mid-Eighties Urbania- the quality of many products,” he said. based firms were producing about 40,000 Surviving companies in the Veneto pairs of jeans a day for labels such as El region have focused on more “exclu- Charro, Trussardi and Carrera. sive, polished offerings,” and have built The district began languishing in the up an international portfolio of clients, Nineties, as brands moved production said Berto. “Veneto’s textile compa- to low-cost countries such as Romania. nies are moving away from mass-mar- Recent euro zone woes have worsened ket products and over the past several the health of Denim Valley, and many years have been researching and carv- companies closed, including Italian ing out specialized niches,” he said. Fashion in 2009. The company, which Okinawa, for instance, has been invest- in 2003 reported revenues of 23 mil- ing in the luxury sector and focusing on lion euros, or $26 million at average ex- attracting foreign customers. “Our clients change, used to produce for a number of are very demanding, both in terms of prod- international brands, including Fiorucci, uct quality and performance, and in terms Kookai, Swish and its own brand, Maggie. of the respect of increasingly restrictive According to Cerved Group, which eco-toxic parameters,” said Ruffin. evaluates companies’ solvency, 6,500 Confezioni Moderne Incom SpA, which no consumer confidence, people are Among Okinawa’s innovations, firms in Italy filed for bankruptcy in produces denim garments for compa- watching their spending,” said Daniela Ruffin listed a group of materials the first half of 2012 and 14.3 percent of nies including Versace, Roberto Cavalli Riccardi, ceo of Diesel, which is head- and processes he calls “Eco Family.” them were based in the Marche. Data and Escada, registered a 15 percent quartered in Breganze, in the prov- Cellulose-based Jacroki, patented as from Confindustria Pesaro Urbino, the increase in revenues last year and ex- ince of Vicenza. She noted that Diesel both a material and as a production province’s association of industrial com- pects to close 2012 with revenues climb- has offset sluggish figures in Italy with process, exists in three versions: racy, panies, shows that in the second quarter ing 20 to 25 percent, said chief execu- strong results abroad, in northern soft and shine, each with a different of 2012, the Pesaro Urbino area, which tive officer Renzo Iacobucci. Europe and growing markets such as texture and look. Suitable for labels, includes Urbania, registered a 5.7 per- A few miles from Urbania, clothing Korea, Brazil and Russia. “Although our tags, belts, bags and clothing, Jacroki cent decrease in industrial production brand Siviglia, which has a denim divi- founder [Renzo Rosso] is from Veneto can be washed, ironed, creased and compared with the same period last sion, said business was good: The com- and we are based here — with all the even embroidered. Hydroki, a chrome- year, with sales dropping 0.7 percent. pany closed 2011 with revenues of 42 benefits that entails, Veneto is full of free, water-resistant leather, can be “The general situation is not positive millions euros, or about $56 million at hard-working visionaries — we are a machine-washed or dry-cleaned and for most companies, which are register- average exchange. global company,” she said. the company expects it to soon have ing a drop in revenues and seeing the “We were born in 2006 when the cri- “What has changed is the client’s OekoTex environmental certification. profits of previous years transformed sis was around the corner, but since approach to the market,” said Marco In addition to offering quality, as into losses,” said Corinna Sperandini, our foundation we have seen our rev- Lucietti, marketing director of ISKO, the a fashion center Italy anticipates vice president of Confindustria Pesaro enues constantly increase,” said Cesare world’s largest denim production com- market trends in denim, observed Urbino. She attributed the decreased Bianchetti, Siviglia’s marketing director. pany, which serves about 200 companies Lucietti, describing the interplay be- turnover to foreign competition from “We are perceiving that our clients have in Italy. “Brand clients are working hard tween “Italian taste, and the fact that Turkey, North Africa and Asia. been hit by the crisis, so we aim to con- to meet new demands, they need to de- Italian taste has a major impact on Sperandini said the crisis hit manu- solidate our business in Italy and develop liver their products quickly,” he noted. global taste in fashion.” facturing companies and those with commercial relations abroad this year.” Lucietti said client requests vary “Italy continues to be a country with more specialized services. “Although greatly by geographic area, and, in the enormous potential, we continue to the Italian denim industry is a leader in VENETO face of the crisis, ISKO is investing in pro- have very strong brands,” said Riccardi. washing, now even the companies spe- The northeastern Veneto region is not posals tailor-made for individual brands. “Whether they are from Veneto or the cializing in these kinds of treatments are only famous for its beauty — it is home Berto Industria Tessile, based in Marche or anywhere else, we are Italian suffering because of high costs,” she said. to Venice, one of the most visited cities Bovolenta, in the province of Padua, and we have a sense of style that re- The region is facing an unemploy- in Italy — but also its music, art and does its own spinning, dyeing, weaving, mains on the cutting edge in denim.”

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SECTION II WWD.COM

WHAT’S NEXT IN DENIM Brands Under Youth Influence CHILDREN’S DIVISIONS ARE GROWING AS TWEEN CELEBRITIES MAKE THEIR MARK.

▲ Tawil By KHANH T.L. TRAN Associates incorporates LOS ANGELES — The denim industry all of Seven has gathered a new set of muses and For All they all stand under four feet tall. Mankind’s With recognizable names such as washes for Kingston and Suri, bolstered by celebrity men and clans like Rossdale-Stefani and Cruise- women into Holmes, the pint-sized celebrities are the kids’ giving a boost to the $2.35 billion chil- line that it dren’s denim business. Photographed produces wearing zippy jeans in eye-catching col- under ors and patterns that sometimes match license. their stylish parents’ get-ups, the kids Here, a are helping transform denim into an as- snakeprint pirational product, even for preteens. style and a “Designer denim is the [fashion] glitter wash equivalent of having an iPhone or a tab- Tawil for girls. let in the electronic world,” said Jamie Associates Gutfreund, chief strategy officer at the relaunched Intelligence Group, a Los Angeles- Seven based trend research and forecasting For All firm owned by Creative Artists Agency. Mankind’s Gutfreund noted that another fac- children’s tor elevating the category’s profile is business in the Internet, which allows young cus- fall 2011 as tomers to tap into trends faster and re- a licensee. search brands on Web services such as Here are Pinterest, Instagram and Tumblr. the boys’ Indeed, in a February 2011 report styles for on the tween market, the Intelligence fall. ▲ Group found that 84 percent of tweens under 14 want more brands and stores for their age and 46 percent of tweens are researching products online before Having more than doubled in size over the last they go to a store. Moreover, 63 percent four years, Joe’s Jeans’ kids’ division now makes of parents are influenced by their kids’ up more than 10 percent of total sales. choices for apparel. Thanks to the kids’ sophistication and awareness, “the lines are blurring In the children’s jeans market, the search in this market before we begin.” and junior brands and through fashion between what is adult fashion and what premium denim category is booming. The kids’ business poses particular blogs to give children a stylistic edge. is tween fashion,” Gutfreund said. Jeans retailing for between $50 and challenges. Because of the variations in “It makes me better informed and For a number of denim companies, $74.99 surged 16 percent to $3 million in sizes — starting at 12 months and run- then I can predict where the [kids’] line the kids’ business is no longer viewed the 12 months ended August, according ning up to 24 months for infants, two to will head,” she said. as an afterthought. to The NPD Group, a market research 14 for girls and two to 20 for boys — the Jennifer Liquori, account manager After closing and repurposing its firm based in Port Washington, N.Y. In number of stockkeeping units can be at Tawil, expects to see more competi- Lucky Brand Kids stores and ceasing comparison, sales for jeans priced less overwhelming. Thus, executives said tion in children’s. “There’s not as much altogether the manufacturing of chil- than $25 fell 2 percent to $2.13 billion, the business lends itself to a licensing premium denim competition as there dren’s products in 2009, Lucky Brand and those for jeans costing $25 to $49.99 model, whereby the licensee can focus could be,” she said. reentered the space late last year. grew 22 percent to $214.3 million. purely on kids’ clothing and offer a For Joe’s Jeans, which works with Lucky, the Los Angeles-based division Total sales for children’s jeans fell 1 greater breadth of product. licensee Ever Blue LLC, operated by of New York’s Fifth & Pacific Cos. Inc., percent to $2.35 billion from $2.36 bil- That’s one reason why Levi Strauss & Albert Dahan, the brother of Joe’s Jeans now identifies expanding the chil- lion a year ago as business at department Co. is licensing its previously in-house founder Joe Dahan, the kids’ business is dren’s business as one of its strategic stores, national chains, mass merchants, boys’ business in the Americas to New also about strengthening the emotional priorities, along with developing the off-price retailers, factory outlets and York-based Haddad Apparel Group connection with the female customer. brand internationally. Its new course warehouse clubs slumped, said NPD. Yet Ltd., which already holds the rights to “She believes in the brand and is entailed forging a licensing deal with sales of the jeans at specialty shops, direct Levi’s girls’ wear and also manufactures emotionally attached to our brand,” New York’s Parigi Group to manufac- mail and e-commerce services are on the children’s clothes for Nike Inc.’s Nike, said Joe’s Jeans chief executive officer ture and market kids’ clothing to de- rise. The Intelligence Group noted that Jordan and Converse brands. Marc Crossman. “Then she sees the partment and specialty stores, starting due to the recession, 89 percent of parents Licensing seemed the best route for kids’ business. Because she’s emotion- in January. Next spring, Lucky plans are spending less money on themselves so Seven For All Mankind to pursue follow- ally attached to the brand, she wants to to test kids’ shops-in-shop in 17 of its they can spend more on their children. ing a period of designing and manufac- see her kids in them.” stores, including a location in Westfield The opportunity for growth interests turing kids’ clothing internally between Such emotions have currency. In Century City, that range in size from new potential players. 2005 and 2009. The Los Angeles-based the last four years, Joe’s Kids has more 200 to 500 square feet. If those shops- Hudson Jeans has dabbled in the kids’ division of VF Corp. partnered with than doubled in size to make up 10 to in-shop perform well, the company space by making special cuts of children’s New York’s Tawil Associates in 2010 to 15 percent of total sales. Retail prices is considering opening a freestand- products for a philanthropic event called restart the kids’ business for fall 2011. for kids’ products range between $49.99 ing kids’ store at the end of next year. Kidstock. While the City of Commerce, Under the direction of Tawil, which and $79.99. While back-to-school con- Lucky is also planning to launch a kids’ Calif.-based company is discussing mov- also makes kids’ products for Buffalo tributes to half of the sales in the over- catalogue next fall. In the most recent ing into the kids’ market in the future, it Jeans and baby gear for Juicy Couture all kids’ business, the holiday season quarter, Lucky’s sales rose 11 percent doesn’t have a definitive timeline. and Marimekko, the line has grown 30 comprises 30 percent and spring con- to $112 million while comparable di- Like many designers who have kids, percent from a year ago. Retailers in- stitutes the remainder. In the three rect-to-consumer sales, including its Chloe Lonsdale, founder of London- clude Bloomingdale’s, Neiman Marcus, months ended Aug. 31, Joe’s reported more than 200 stores and e-commerce based MiH Jeans, is tempted to test the Saks Fifth Avenue, Nordstrom, Bergdorf net income of $1.4 million, reversing a operations, were up 5 percent. waters. “Now that I have three chil- Goodman, Barneys New York and Fred net loss of $2 million in the year-ago pe- On the advertising front, Guess Inc. dren, it’s tough for me to ignore my de- Segal. With retail prices for jeans start- riod, as sales grew 25.5 percent to $30.3 is harnessing the star power of 12-year- sire to branch out into kids’ wear,” she ing at $69, the line incorporates all of million from $24.2 million a year ago. old Jackie Evancho, the “America’s Got said. “The fact my kids live exclusively Seven’s washes and Tawil is in regular Joe’s, like other denim compa- Talent” runner-up, in its fall market- in vintage dungarees definitely means discussion with its client’s mills. nies, can only benefit from the natural ing campaign for Guess Kids, to moti- there’s a gap in the market for this type By working closely with the wash- growth spurts that kids undergo. vate girls to scoop up Guess’ sequined of product, but my rule for kids’ denim houses and mills, Tawil can shorten the “They grow out of the clothes cer- tank dresses, fur vests, Pop Art graphic is that it must be both incredibly soft time it takes to translate trends from the tainly faster than the clothes wear out,” T-shirts and chambray shirts. and comfortable but hard-wearing.” adult market to kids. For instance, the Crossman said. “When the mom comes At True Religion Brand Jeans, sales Kids’ products are also on the radar glitter dust that shimmered on women’s in to buy something for herself and her in the kids’ category topped more than for AG Adriano Goldschmied in South jeans this spring was used on a $109 girls’ kid, she’s not going to buy last season’s $12.5 million, representing 3 percent of Gate, Calif. “We would love to dress kids skinny version this fall. Amy Pang, Tawil’s goods for her child.” the company’s total sales of $419.8 mil- in AG soon,” said AG creative director creative director for kids, even tracks — WITH CONTRIBUTIONS FROM lion last year. Sam Ku, “but we need to do proper re- trends on the runway, in contemporary RACHEL BROWN

8 WWD THURSDAY, NOVEMBER 1, 2012

SECTION II WWD.COM

WHAT’S NEXT IN DENIM Europe Plots a Sustainable Future A FLURRY OF INITIATIVES IN SUSTAINABLE DENIM ARE POPPING UP IN EUROPE, AT ALL ENDS OF THE PROCESS, FROM FIBERS TO FINISHING AND DYES.

By LAURE GUILBAULT

PARIS — The economy may be slow in the euro zone, but the area of sustain- able denim has a flurry of initiatives. Companies like Nudie in Sweden, with its organic cotton and recycling program, and a handful of others are innovating in a sustainable direction, using green methods of producing and washing jeans. Danish brand Jack & Jones has introduced Low Impact Denim, a new concept designed to lower its impact on the environment, described in a promotional video on YouTube. Meanwhile, in western Wales in the U.K., The Hiut Denim Co., founded by Pamela Ravasio, David Hieatt, is helping to revive the managing director small town of Cardigan. Before the of TexSture, a days of outsourcing, Cardigan boasted a consultancy firm. denim factory that crafted 35,000 pairs ▲ James Veenhoff, a week, the brand said. The new label’s president of the mission is to make jeans locally again. House of Denim “The markets in Europe, especially Jean School. Northern Europe, are very sensitive to green projects,” said industry veteran Adriano Goldschmied. Marithé and François Girbaud in France have long been leaders in this area, preaching the use of laser treat- ments that produce a worn look instead of sandblasting, which is dangerous for workers. An exhibition that opened on Oct. 24 at The Museum of Art and Industry in Saint-Etienne in central France looks back at the label’s innova- François Girbaud

tions such as “watt washing” and a 70 RVDA PHOTO BY percent waterless treatment, which is a combination of oxygen and ozone. stakes, too. era of transparency,” said Ravasio. beginning of 2012 a new technology “The biggest challenge is the finish- “There are innovations both from And an era of collaboration, too. called E-Soft, which softens garments es, that is where most of the environ- the hard-core, niche, retro brands and Levi’s and G-Star teamed up with without relying on water. E-Soft con- mental damage is done, but also where from the big brands,” said Veenhoff. H&M, Nike and the like in 2011 to de- sists of an electro flow reactor that there is the most gain to be made [if Europe’s guidelines regarding en- velop a joint road map toward achiev- produces nano bubbles, in which the we make them cleaner],” said James vironmental issues are also having an ing zero discharge of hazardous chemi- bubble flow is applied to garments. Veenhoff, president of the House of impact. REACH addresses chemical cals by 2020. The company claims that conven- Denim Jean School in Amsterdam. components and Biocidal, a new regu- According to Goldschmied, organic tional softening requires 10 liters of The school welcomed its first stu- lation, is set to come into force in 2013. cotton only has small potential. On the water and 20 grams of chemicals per dents in September and Veenhoff said The rule regards a family of chemical other hand, recycled fibers and break- garment. E-Soft reduces those figures sustainability is fully integrated in the substances that deal with killing germs throughs in cellulosic fibers, which are to 0.1 liters of water and 2 grams of curriculum. such as antigerms, antismell and anti- cellulosic fibers such as modal and chemicals per garment. “I see innovations coming from fungus for sportswear, for example. Tencel, make up an interesting area “There are 30 machines around the the high-tech and the low-tech, hand- “[Biocidal products regulation] for research. world for now,” Jeanologia’s president loomed denim coming out of India and will be relevant for fashion, spe- Another factor for Europe’s edge on Enrique Silla said. Turkey, reinvigorating age-old crafts- cifically around antimicrobial treat- sustainability issues, Goldschmied said, On the recycling front, KICI, a Dutch manship, at the same time, super- ments, which are part of the finish- is that the continent counts a flurry of re- charity that collects used garments in high-tech innovations like plasma- and ing process of some garments,” said puted suppliers. Among the best in class, the Netherlands, is creating momentum, ozone-based treatment,” said Veenhoff. Pamela Ravasio, managing director he praised Italy-based Martelli for its de- helping to develop a sorting machine, On the low-tech end, a high-brow of TexSture, a consultancy firm that velopments in vintage washing that im- set to be inaugurated in November. It initiative was taken by Delhi-based advises textile firms on sustainability prove the environmental impact of prod- sorts heaps of old clothes into six bins, Rajesh Dudeja which has launched issues. “They even get used for cases ucts compared with traditional washes. one each for pure wool, cotton, polyes- The Handloom Denim, a range of high- where, properly speaking, they are not Charline Ducas, textile sustainabili- ter, acrylic and bins for common cotton fashion apparel in handloom denim. needed, but convenient initially.” ty specialist at Textile Exchange, based mixtures. Recycled fabric can be spun The process is hand-based, involving In addition, there are numerous in Amsterdam, cited Lenzing Fibers, from the shreds of the used clothing. “hand-dyeing, hand-sizing, hand-reel- certification bodies (see box), so just the Austrian cellulosic fiber producer According to Textile Exchange’s ing, hand-warping and hand-weaving about every European denim firm has that practices a closed-loop produc- Ducas, big gains can also be made by for a very low carbon footprint,” ac- been subjected to — or voluntarily tion method that limits its energy and addressing the dyeing processes. cording to the firm. participated in — some kind of sus- water-waste usage. “There is very little communica- Larger companies including Dutch tainability standard. François Girbaud lauded Spain’s tion around dyeing processes as it is [a] denim brand G-Star and Levi’s, which “Levi’s has published its full list of Jeanologia, a firm that specializes in very complicated [process],” he said. has a large presence in Europe, are suppliers, not only the names but also environmentally friendly garment fin- “Chemical companies like Clariant are playing in the sustainability sweep- phone numbers. We have entered an ishing. The firm has introduced in the doing research, but it takes time.”

WHAT IS NOW ENVIRONMENTALLY REQUIRED OF DENIM SUPPLIERS IN THE EURO ZONE

CERTIFICATIONS ON FIBERS CERTIFICATIONS ON PROCESSES

ORGANIC: OE 100 AND OE BLENDED RECYCLED: GRS ■ GRS ■ OEKO-TEX 1000 is a certification They are standards that give verification It is intended for companies that are making ■ Bluesign, initiated in March 2010, is system for environmentally friendly to a final product containing a given and/or selling products with recycled content. a management system that covers all operations in the textile and clothing amount of organically grown cotton. The OE The standard applies to the full supply chain and environmental, health and safety aspects industry. On the basis of criteria that 100 and OE Blended are voluntary standards addresses traceability, environmental principles, along the textile manufacturing chain. are updated annually, the standard and do not address the use of chemicals social requirements and labeling. Developed with ■ ISO 14000 provides tools for compa- allows an assessment of the achieved or any other aspects of production beyond the textile industry in mind, the GRS may also be nies and organizations looking to identify environmental balance and social the integrity of the organic fiber. applied to products from any industry. and control their environmental impact. acceptability. silverjeans.com 10 WWD THURSDAY, NOVEMBER 1, 2012 SECTION II

WHAT’S NEXT IN DENIM

Girl Likes Boy

DENIM IS GOING BACK TO BASICS WITH A RENEWED INTEREST IN SIMPLE CUTS, FITS AND WASHES. WITH THAT COMES A REPLAY OF THE TRIED AND TRUE BOYFRIEND JEAN.

ATM’s cotton shirt and Levi’s cotton Williamsburg denim vest and Garment Co.’s Dear John’s cotton denim cotton and jeans. elastane jeans. Church’s boots. WWD THURSDAY, NOVEMBER 1, 2012 11 WWD.COM

PHOTOS BY GEORGE CHINSEE; STYLED BY KIM FRIDAY ERVANTES; FASHION ASSISTANT: DEVIN HERSHEY ASSISTANT: FASHION ERVANTES;

Seven For All Mankind’s cotton linen blazer; Diesel’s cotton and spandex denim jacket, over shoulder; Market’s cotton tank top, and Victoria Beckham Denim’s cotton denim jeans. Esquival shoes. MODEL: RENATA G/MUSE; HAIR BY SEIJI AT THE WALL GROUP; MAKEUP BY MISUZU MIYAKE FOR NARS COSMETICS; PHOTO ASSISTANT: ADRIANA DEC FOR NARS COSMETICS; PHOTO ASSISTANT: MISUZU MIYAKE GROUP; MAKEUP BY THE WALL SEIJI AT G/MUSE; HAIR BY MODEL: RENATA

Thvm’s cotton jacket; Not Your Daughter’s Jeans’ silk blouse and cotton denim jacket tied at waist, and Nudie Jeans Co.’s Cheap Monday’s cotton cotton denim denim shorts. jacket and jeans. Vintage boots. Wolford tights; Church’s boots. 12 WWD THURSDAY, NOVEMBER 1, 2012

SECTION II WWD.COM

WHAT’S NEXT IN DENIM

THE TRENDS A return to more traditional style is in full swing but there’s still plenty of fun to be had with novelty prints like stripes and tie-dyes.

BIG STAR

ALMOST FAMOUS

DIESEL BLACK GOLD Stripe It!

JUICY COUTURE JEANS

HUDSON nydj.com 14 WWD THURSDAY, NOVEMBER 1, 2012

SECTION II WWD.COM

WHAT’S NEXT IN DENIM

DITTOS

RED G-STAR ENGINE

AG ADRIANO GOLDSCHMIED

SILVER JEANS ShredTHE TRENDS It!

16 WWD THURSDAY, NOVEMBER 1, 2012

SECTION II WWD.COM

WHAT’S NEXT IN DENIM

STELLA MCCARTNEY DENIM

BlockTHE TRENDS It!

DL 1961

KORAL

EARNEST SEWN

JAMES JEANS

18 WWD THURSDAY, NOVEMBER 1, 2012

SECTION II WWD.COM

WHAT’S NEXT IN DENIM

CALVIN KLEIN JEANS

DyeTHE TRENDS It!

GUESS JEANS

JOE’S JEANS

TRUE RELIGION

HABITUAL

20 WWD THURSDAY, NOVEMBER 1, 2012

SECTION II WWD.COM

WHAT’S NEXT IN DENIM Jeans Enter the Beauty Domain AFTER WASHES, SUSTAINABLES AND ORGANICS, COSMETICS COULD BE DENIM’S NEW FRONTIER.

By NORMA QUINTO

BERLIN — Jeans have long been the popular way to help women look cool, fit and sexy with styles, silhouettes and construction details that lift, push up and shape the wearer. Now in their latest episode of reinvention, denim brands are taking on cosmetic qualities designed to add skin care and combat wrinkling, sagging and even weight gain. Chilean brand Mohicano Jeans launched a jeans cosmetics concept with aloe vera, while its new Denim Therapy collection features jeans with anticellulite properties. As brand man- ager Ricardo Cuevas explained, “The Denim Therapy collection was created with the latest technology, incorporat- ing nanoparticles of aloe vera in the cotton fibers. When these particles come in contact with the skin, they pro- vide several vitamins, such as vitamin E, amino acids, enzymes and antioxi- dants, reducing the appearance of cel- lulite and stretch marks. These stimu- late cell growth, collagen and elastin.” The latter, as the name suggests, helps cells that have been stretched to snap back to their original shape, not unlike the way stretch fibers have been A look from Wrangler’s enhanced to improve their recovery. Denim Spa Therapy for Cuevas claimed that after “wear- Legs collection. ing the jeans for at least six hours per day for 15 days, this special denim will have increased the skin’s hydration by about 11.5 percent. It’s a hypoaller- its cosmetic concept one step further genic fabric — ideal for sensitive skin Mohicano’s Gsus Sindustries’ with jeans it claims reduce the size of — and prevents odors and the forma- Denim Therapy new program hips and thighs 0.7 inches every time tion of mites.” Results were verified features with aloe vera you wear them. Eve LeRock, created by a study conducted by Brazilian firm anticellulite denim. by Luca Berti, professes to dissolve Kosmoscience that tested the jeans on properties. fat and fight cellulite and it backs women with dry skin. Kosmoscience is the claim with tests carried out on 20 the same firm that certifies the skin- women by the University of Pavia. care claims for cosmetics firms such as “These jeans are able to fight the Unilever, Revlon and Natura. dimples that appear in women’s legs In order for the jeans to last lon- due to heredity or weight gain. Our Eve ger, Mohicano recommended washing jeans are loaded with complex cos- inside-out at 86 degrees with a neutral metics that dissolve fat accumulation, detergent and hang-drying them with- promote drainage and prevent excess out wringing them first. water retention,” Berti commented. The downside is that the effects of The cosmetic jeans are a collabo- these aloe vera nanoparticles are ac- ration with Florence Bombard, a tive for up to 40 washes, after which French cosmetologist specializing in the jeans lose the cosmetic properties skin care. The fabric of the jeans is and become essentially just a regular equipped with microcapsules that re- pair of jeans. They are set to retail for lease when they come in contact with about $85. the skin and due to the natural mas- Similar benefits are found in sage obtained by walking. Wrangler’s new Denim Spa Therapy “The fibers of the jeans are infused for Legs collection, which has anticel- with a patented drug that includes lulite, moisturizers and other natural three components: caffeine, escin and elements infused into the denim. “This vitamin E,” Berti explained. “Caffeine is a revolutionary product that will is responsible for dissolving fat stor- change women’s jeans forever,” de- age; escin (also known as horse chest- clared Adam Kakembo, vice president and aloe vera treatment is expected against early aging and UV light,” nut) is used to promote microcircula- of product. “They look great and feel to last six to eight washes. After that, brand creative director Jan Schrijver tion and protects the skin, and finally, great, but the real difference is that they need to be sprayed to reload the explained. “The aloe vera in our jeans vitamin E is an antioxidant element. these soft jeans moisturize your skin as effects. They retail for 99.95 euros, or help to protect the skin from prema- “Combining these elements in the you wear them.” about $130.50 at current exchange. ture aging by reducing the effects that fabric manages to dramatically reduce The jeans’ therapeutic finishes have Amsterdam-based Gsus Sindustries noxious pollutants and UV exert upon fat mass by just wearing the jeans be- aloe vera or olive extracts to soothe launched its “made by instinct” pro- us. It’s all about looking good while cause these active ingredients continue the skin. The company claims that the gram with aloe vera denim for women. feeling great in your jeans.” to work as we carry on our daily life of collection’s jeans contain circulation- The denim is dipped in an extract To test the longevity of the jeans, either sitting in the office or walking boosting and cellulite-reducing ele- of the aloe vera plant and the re- Gsus’ laundry intensively washed them down the street,” he continued. ments, and also feature moisturizers sult is a special finish on the inside 30 times and still detected the pres- These effects have a duration of 28 and a delicate jasmine fragrance. of the jeans. The aloe vera bonds to ence of aloe vera. One drawback is days, allowing for four washes in 86-de- Kakembo said the jeans were tested the fibers of the denim, allowing it that Gsus does not yet have a way to gree water. After this period, the fibers in a trial involving 160 women. “Two- to moisturize the skin each time it keep the aloe vera in the jeans. They in the jeans have to be recharged with thirds said their thighs were more at- is worn. There is no particularly dif- are working on and testing a spray can the fluid provided in a 50-ml. bottle. tractive after four weeks with everyday ferent smell to the jeans, but what is filled with aloe vera liquid to replenish Each pair of jeans comes with one wear,” he reported. noticeable is that they get softer as the effects. free cosmetic kit and additional cos- He further noted that the initial they are worn. The aloe vera jeans are manufactured metic supplies costs 25 euros, or about loading of cosmetic ingredients would “Originating from Sudan, this plant in Tunisia and retail for 89.95 euros, or $32. Eve LeRock dark denim retails for provide benefits for 15 days of wear or has been used thousands of years for about $117.47 at current exchange 180 euros, or about $235, and the light- four to six washes. The olive extract its healthy effects, protecting the skin Italian brand LeRock has taken er wash is 210 euros, or about $275.

22 WWD THURSDAY, NOVEMBER 1, 2012

SECTION II WWD.COM

WHAT’S NEXT IN DENIM Cheap Jeans Rule in Japan LOWER-PRICED AND WESTERN LINES TAKING LARGER SHARE OF MARKET.

By KELLY WETHERILLE Uniqlo and sister company G.U. now hold a 4.7 percent share of TOKYO — Luxury and premium denim the jeans market. brands from around the world have long looked to Japan for production of top-quality jeans in the most novel and technologically advanced finishes, but the country also represents a denim market that, while gradually decreas- ing in size, remains robust. Japan’s jeans market was valued at 598.7 billion yen, or $7.48 billion at cur- rent exchange rates, in 2011, according to Euromonitor International. In 2008, the market was valued at 699.6 billion yen, or $8.74 billion. While the overall market size has fallen, Japanese retailers and manufac- turers say that this does not necessarily mean the number of pairs of jeans sold has decreased. On the contrary, many attribute the market contraction to the increasing popularity of fast-fashion and cut-price jeans that have flooded the market in recent years. One company in particular that is gaining ground in Japan’s denim market is Fast Retailing Co. Ltd., par- ent company of fast-fashion brands Uniqlo and G.U. Its share of the total jeans market climbed to 4.7 percent in 2011 from 3.5 percent in 2006, out- ranking companies such as Edwin and Levi Strauss & Co. Looking only at the economy jeans market, Fast Retailing jumped to an 18 per- cent share in 2011 from 14.2 percent in 2006, according to Euromonitor International. In comparison, Beauty & Youth United Arrows and Shimamura, the company with the (right) Beams stores in Tokyo. second-largest share of economy jeans, had only 4.8 percent in 2011. In the overall Japanese jeans market, another local manufacturer, Edwin, ranks as the number-two com- pany. It commanded 3.2 percent of total market share in 2011, unchanged from 2006. “If you look at the market, I think Uniqlo’s jeans sales are about 40 bil- lion yen [yearly, about $499.44 mil- lion],” said Hidekazu Hosokawa, di- rector of Lee Japan, which is licensed here by VF Corp. and belongs to the same group as Edwin. “The amount of sales in yen isn’t much different be- tween Uniqlo and Edwin, but because [Uniqlo] is cheaper, they sell about three times more pairs than Edwin.” Hiroshi Kubo, operating officer and creative director at Tokyo-based multibrand retailer Beams, agreed that more people are turning to low- priced brands for jeans and other $150. The offering, designed and large- Japanese customers, when buying Harajuku district, for example, Kubo clothing items. ly produced in Japan, is completely dif- jeans, are concerned with more than said sales of jeans have increased by “From the time Beams was found- ferent from its U.S. counterpart. just price, status symbols and origin. about 5 to 10 percent in recent years. ed [in 1976] until the beginning of the Hosokawa said the lack of major “I think it’s the sense of security He attributed this to the natural versa- Nineties, there were hardly any fast- international brands in the market they get from the brand name, especial- tility of the product. fashion retailers in Japan, so everyone presents a significant opportunity for ly among women,” Onuma said. “After “There are lots of types of bottoms, stretched their limits, saved money and such companies, but he warned that that, I think it’s the silhouette when like chino pants and slacks, but denim bought imported or other expensive in order to succeed, it is important wearing [the product] and the appear- is the material that adapts to trends jeans,” he said. “But I think now the av- to fully understand and cater to the ance of the design.” most easily, and it’s easy to wear and erage person doesn’t spend that much Japanese customer. Kubo has similar sentiments when care for,” he said. on fashion.” “If you want to grow your business... speaking about his male customers. Onuma painted a similar picture In addition to the rise of lower- it’s necessary to make things for Japan “More than the difference between of Beauty & Youth United Arrows, priced denim brands, it is notable that that fit with the market,” he said. Japanese and international brands, it’s saying sales of jeans continue to in- few international brands hold a sub- Yuko Onuma, a women’s buyer for about silhouette, color — the essence crease each year, even if only by a stantial share of Japan’s jeans market. the chain of multibrand stores Beauty of the product, not the brand,” he said. small amount. Levi’s is the biggest, with a share com- & Youth United Arrows, which targets “Now there are more people who focus “The denim market [in Japan] is parable to that of local brands Right- consumers in their 20s to early 40s, on the look of the product than the way evolving,” she said. “For example, the On and Edwin. Next come Wrangler said Lee, which she counts as a do- it was made.” development of things like thinner fab- and Lee, both of which are licensed by mestic brand, is the best-selling denim Even while economy brands and rics and microfiber fabrics, which feel VF Corp. While Wrangler occupies a name at her stores. Among smaller single-brand retailers gain ground good when worn and fit well, match- similar place in the market to the one international brands, she said Rag & in Japan’s denim market, some of the ing the shape of the legs. Because of it does in the U.S., Lee is decidedly Bone has been strong recently. She at- country’s coolest multibrand retailers, the strength of material development, more fashion-forward in Japan and is tributes this to its popularity among in- including Beams and United Arrows, things have evolved. And there are priced higher. An average pair of Lees ternational and local celebrities. are also seeing increased denim sales. more variations — skinny, boot-cut — here cost around 12,000 yen, or about Onuma and Kubo agree that At Beams’ men’s flagship in Tokyo’s so customers are also buying more.”