and How Long Does Ullman Have?
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LEGAL AFFAIRS SHOW OFF MARTHA STEWART WINS A ROUND MEN’S FURNISHINGS IN THE MACY’S CASE. PAGE 6 L GET BOLD AND COLORFUL. L CRISTIANA RUELLA REVEALS PAGE MW1 HOW DOLCE & GABBANA WAS ALMOST BOUGHT IN THE NINETIES AND EARLY AUGHTS. PAGE 2 WWDTHURSDAY, APRIL 11, 2013 Q $3.00 Q WOMEN’S WEAR DAILY Was Ron Right ... ... and how long does Ullman have? continued to skewer Johnson, his management approach By DAVID MOIN and hasty reinvention, and speculated on Penney’s future. Still, some were surprised Johnson was ousted so soon, RON JOHNSON’S STRATEGY for J.C. Penney, if it had worked, before results on all the new spring merchandise could would have reinvented modern department store retailing. be weighed. It was audacious, iconoclastic and long-term in its at- “My guess is the numbers had to have been so bad,” said tempt to modernize the retailer’s image, store design and one retail ceo, who requested anonymity. merchandise and cut all the coupons and price promoting. A few sources said some of Johnson’s innovations at But the former Penney’s chief executive offi cer was ousted Penney’s could survive — shops-in-shop for brands like on Monday, leaving the company in a tailspin, struggling Izod, Levi’s and Liz Claiborne; some of the newer contem- to recapture lost customers, and with a potential business porary merchandise like Joe Fresh, and the revamped home school case study on how not to manage a public company. department with exclusive brands, refl ecting an attempt to Even William Ackman, whose Pershing Square Capital modernize and to some extent upscale the presentation. still owns 17.8 percent of Penney’s and who had brought Right now, for Myron “Mike” Ullman 3rd, the new ceo, it’s in Johnson, eventually turned on him. Ackman, though, on all about stabilizing the company, assessing the incoming Wednesday told WWD he has no intentions of selling out. product, raising morale and reevaluating the marketing. To “We’re not going anywhere,” he said. a large extent, he’s stuck with much of Johnson’s imprint, Now others are dissecting Johnson’s tenure — and the and merchandise at least through part of fall. autopsy isn’t fl attering. Industry experts on Wednesday SEE PAGE 4 2 WWD THURSDAY, APRIL 11, 2013 Ruella Testifies at Dolce, Gabbana Trial THE BRIEFING BOX and I was constantly told that “That’s why you call in consul- By LUISA ZARGANI banks did not want to finance tants. I did not have the compe- IN TODAY’S WWD such a company. We needed to tence and did not know the meth- MILAN — The hearing have access to credit to develop ods to determine the value,” she Wednesday in the ongoing tax and compete with big brands,” said, adding that she did not dis- trial of Domenico Dolce and said Ruella, producing proof of cuss tax rates outside Italy. The Gwyneth Paltrow looks Stefano Gabbana offered a several appointments with main designers, Ruella, Patelli, Dolce’s Hamptons-ready in Rag glimpse into the past, lifting a bankers at the time — complete brother Alfonso, finance director & Bone. For more on veil on dealings unrevealed until with business cards. Giuseppe Minoni and Antoine the actress’ fashion now that could have reshaped As reported, a public listing Noella are charged with omitted style, see WWD.com. Italy’s fashion scene at the end was also considered at the time. and unfaithful earnings declara- of the Nineties and early Aughts. “Dolce & Gabbana was very tions. The defendants have de- Taking the stand for the first small; it could only depend on nied the charges. time and responding to pros- the very strong talent of the de- “Patelli told me we were not ecutor Gaetano Ruta, Cristiana signers. We did not have many obliged to provide a market value, Ruella, general director and choices: We could either con- but I was interested in knowing member of the board of Dolce & tinue alone but remain small, the value an experienced firm Gabbana, explained the reasons turn to the banks for credit, let could give to Dolce & Gabbana,” behind the designers’ decision minority shareholders in or go said Ruella. When she found CEBALLOS/FILMMAGIC to sell the signature and D&G public. At the time, there was a out the value, she said she was ALO brands they owned to a sepa- lot of talk about the Bourse,” said “happy to tell the designers that BY rate entity, the Luxembourg– Ruella. “To count our own brand they had, with their own dedica- PHOTO based holding company Gado and our own production pipeline tion and work, created such an Srl, in 2004. “The fact that the would have been the first steps enormous value, and this repre- brands were owned by the de- for an IPO.” sented more than 60 percent of Ron Johnson’s tenure at J.C. Penney Co. Inc. won’t get high signers was a serious weakness, Asked by the prosecutor if, fol- sales.” The brands were eventu- praise, but William Ackman continues to support the company, an element of risk, and the rea- lowing the sale to Gado, Ruella ally sold to Gado for 360 million which Myron “Mike” Ullman 3rd is working to stabilize. PAGE 1 sons had been made clearly told bankers about it, she firmly euros, or $484.4 million, because, evident to us by several parties and proudly replied: “Of course among other issues, during the President Obama placed a premium on international trade and bankers,” said Ruella, who I told them about the operation, negotiation, the Dolce family ac- in the federal budget blueprint he submitted to Congress on spoke calmly and unfaltering- there was nothing to hide, and quiesced to each designer keep- Wednesday. PAGE 6 ly throughout her deposition, it was all in our annual reports. ing his name and a possibility to wearing a white shirt, a black Yo u have to consider what the launch a namesake collection. Sears Holdings Corp. has created Shop Your Way Brands, sweater and black pants, with a The D&G brand has since which will focus on developing entertainment-driven fashion and black-and-white printed foulard. Cristiana been incorporated into the Dolce lifestyle brands. PAGE 6 In a period Ruella identi- Ruella & Gabbana label, said Ruella, fied as between the end of the adding that the younger line ac- Martha Stewart’s company on Wednesday scored a victory in Nineties and 2001-2002, there counted for between 35 and 40 court, albeit a small one, in its trial against Macy’s Inc. PAGE 6 were three different negotia- percent of sales but was part tions on the table, she said. The of a strategy to position the sig- first one was with L Capital, the nature brand in a higher range. Elie Tahari will unveil its first eyewear collection for spring investment fund controlled by Asked about the IPO, Ruella said 2014 through a partnership with Colors in Optics Ltd. PAGE 6 LVMH Moët Hennessy Louis the company “did not go public Vuitton. “[L Capital chairman] because of the situation,” noting Cartier has been awarded almost $30,000 in compensation Daniel Piette contacted us the investigations would hinder a by a Shanghai court in a trademark infringement case. PAGE 7 through J.P. Morgan, as L Capital listing. “Reputation is a key fac- intended to enter [Dolce & tor for an IPO.” Tod’s Group will donate 1 percent of net profits on a yearly Gabbana] with a minority stake. Also she underscored that “30 basis to support activities in Italy’s Marche region. PAGE 7 But it was made clear to us that percent of royalties were paid in the deal could have taken place Italy,” contesting that the compa- Karl Lagerfeld created a special installation for Milan’s only if the brands belonged to ny enjoyed Luxembourg’s 4 per- Cassina showroom, mixing pieces of furniture with some of his the company,” said Ruella. She cent tax rate. black-and-white pictures. PAGE 8 then named Vincenzo Maranghi, Asked about the role of the the late head of Mediobanca, designers in the restructuring, Weary of the polemic that has raged around his loyalties who she said spearheaded the Ruella said, “They were the ones and his staggering fortune, Bernard Arnault has withdrawn his acquisition of Valentino in 1998 who decided to sell the brand but application for Belgian citizenship. PAGE 8 (with Maurizio Romiti) through they were not aware of the opera- the now-defunct HdP, or Holding tions. They deal with creativity.” Furnishings brands are reaping the rewards of a more- di Partecipazioni Industriali. In As Minoni took the stand, fashionable men’s wear customer. addition to Dolce & Gabbana, company was back then com- one of the defendants’ lawyers, PAGE MW1 the plan was to also buy Versace, pared to bigger and more struc- Alberto Simbari, pointed out the shortly after the death of Gianni tured groups. We wanted to make significant differences between Bob Arnot has returned to Passport Brands with a single Versace in 1997, to “create an the company more appealing to the growth of actual royalties and mission — bring back the American business of Marithé + Italian luxury pole [under HdP] investors or for an IPO.” those estimated by Italy’s Revenue François Girbaud. PAGE MW3 to juxtapose to the French.” In The investigations that led Agency since 2005. For example, in this case, too, a must to move to both designers being charged 2009, royalties amounted to more Tommy Bahama is entering the Japanese market with two new forward was for the brands to be with alleged tax evasion related than 98 million euros, or $128 mil- stores, one of which includes a restaurant and bar.