In the Buff NEW YORK — Glycolic Peels and Microdermabrasion Treatments Were Once Solely the Province of Dermatologists’ Offices
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TARGET CORP. SELLS MERVYN’S FOR $1.65B/2 Women’s Wear Daily • The Retailers’ Daily Newspaper • July 30, 2004 • $2.00 ▲ Origins launches a chocolate-inspired line WWDFRIDAY of bath and body products. See page 7. Beauty In the Buff NEW YORK — Glycolic peels and microdermabrasion treatments were once solely the province of dermatologists’ offices. Now, they’re moving to retail counters. The latest and most broadly distributed entry is coming from Lancôme, which intends to add consumer appeal to the chemical procedure with Resurface Peel Restructuring and Soothing System, due in October. It could ring up sales of $25 million in its first year. For more, see page 7. Democrats’ Party Delivers Little Boost for Boston Retailers By Katherine Bowers for a crowd chanting “We love Bill,” $12,000 timepiece donated by Swiss BOSTON — On Tuesday afternoon, and leaving with several shiny maker Carl F. Bucherer and, Y BRYN KENNY shortly before his flight out, former shopping bags prominently in hand. according to sources, a watch for President Bill Clinton made a swing It was a photo op par excellence. one of Clinton’s handlers. into jeweler Alpha Omega’s All it took to pull it off was many In the end, as Alpha Omega Harvard Square flagship, mugging frenzied phone calls, the gift of a See Boston, Page 4 PHOTO BY ROBERT MITRA; STYLED B ROBERT PHOTO BY 2 WWD, FRIDAY, JULY 30, 2004 WWDFRIDAY Target Sells Mervyn’s for $1.65B Beauty GENERAL By Arthur Zaczkiewicz to GE Consumer Finance. The re- Mervyn’s as an ongoing business In a week in which police often outnumbered shoppers, sales plunged for tailer said Mervyn’s would oper- reflects our long-term commit- all but the best-located and flashiest names in Boston retail. NEW YORK — Target Corp. is ate as an independent company. ment to create substantial value 1 selling its Mervyn’s division in Sun Capital and Cerberus for our shareholders over time Weathering double-digit decreases in its namesake and moderate two separate transactions for a could not be reached for com- and enhances the opportunity 3 businesses, Liz Claiborne navigated strong second-quarter results. total of $1.65 billion in cash. ment. Target referred media in- for all of our stakeholders.” Victoria’s Secret let out all of the stops Thursday for the national launch of The price tag is about 10 quiries to a prerecorded call on For Sun Capital Partners, times Mervyn’s pretax profits of its Web site, which said the deal this deal extends the investment 3 its hot subbrand, Pink, at its megastore at Herald Square in Manhattan. $160 million. The deal is expect- is expected to add a pretax gain firm’s reach into the retail in- ed to close in the third quarter. of $270 million, or 18 cents a dustry. Prior acquisitions for SUZY IS ON VACATION As reported in WWD on share, to Target’s bottom line. Sun Capital include companies Wednesday, a group of investors “Due to the seasonality of such as Sam Goody, SunCoast, Classified Advertisements........................................................................15 led by Sun Capital Partners Inc. Mervyn’s earnings, the sales of Media Play, Anchor Blue and To e-mail reporters and editors at WWD, the address is and Cerberus Capital Manage- this division is expected to be Wicke’s Furniture. [email protected], using the individual’s name. ment LP is buying Mervyn’s retail dilutive to Target Corp. by about Cerberus is considered a vul- operations for $1.2 billion in cash. 4 to 5 cents in the fourth quarter ture fund, which has been mak- WOMEN’S WEAR DAILY IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLICATIONS, INC. COPYRIGHT ©2004 FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. In a statement released late of this year,” the retailer said. ing investments in distressed VOLUME 188, NO. 21. WWD (ISSN # 0149-5380) is published daily except Saturdays, Sundays and holidays, with one additional Thursday, well after the market Mervyn’s is based in Hayward, companies. Last year the firm issue in January, May, June and November; two additional issues in February, April, September, October and December; and three closed, Target also named Calif., and operates 257 stores in bought Fila. Cerberus also additional issues in March and August, by Fairchild Publications, Inc., a subsidiary of Advance Publications, Inc. PRINCIPAL OFFICE: 7 Lubert-Adler/Klaff and Partners 13 states, mostly in the West and bought or financed troubled com- West 34th Street, New York, NY 10001. Shared Services provided by Advance Magazine Publishers Inc.: S.I. Newhouse, Jr., Chairman; Steven T. Florio, Vice Chairman; Charles H. Townsend, C.O.O.; John W. Bellando, Executive Vice-President and C.F.O.; Jill Bright, LP as part of the “investment South. Mervyn’s sales for 2003 panies such as specialty retailer Executive Vice-President_Human Resources; John Buese, Executive Vice-President_ Chief Information Officer; David Orlin, Senior consortium” buying the name- were $3.6 billion. The deal to the G&G, textile supplier Guilford Vice-President_Strategic Sourcing; Robert Bennis, Senior Vice-President_Real Estate; David B. Chemidlin, Senior Vice- plate, which it describes as a investment group includes Mills and intimate apparel retail- President_General Manager, Advance Magazine Group Shared Services Center. Periodicals postage paid at New York, NY and at additional mailing offices. Canada Post Publications Mail Agreement No. 40032712. Canadian Goods and Services Tax Registration “promotional, middle-market Mervyn’s distribution centers. er Frederick’s of Hollywood. No. 88654-9096-RM0001. Canada post return undeliverable Canadian addresses to: 4960-2 Walker Road, Windsor, ON N9A 6J3. department store.” Bob Ulrich, chairman and Cerberus also was seen as a po- POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008. In a separate transaction, chief executive officer of Target tential investor in Versace, which FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008; Call 800-289-0273; or visit www.subnow.com/wd . Four weeks is Target is selling $475 million of Corp., said in a statement that is looking to sell a minority stake required for change of address. Please give both new and old address as printed on most recent label. First copy of new Mervyn’s credit card receivables he believes “the sale of in its business some time this year. subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 7 West 34th Street, New York, NY 10001. For permissions and reprint requests, please call 212-221-9595 or fax requests to 212-221-9195. Visit us online: www.wwd.com. To subscribe to other Fairchild magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our subscriber list available to carefully screened companies that offer products and services that we believe would interest our readers. If you do not want to receive these offers and/or information, please advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273. WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR LOSS, DAMAGE, OR ANY OTHER INJURY TO UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART Claiborne Hikes Outlook on Net Rise WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED TO DO SO BY WWD IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE ACCOMPANIED BY A SELF-ADDRESSED OVERNIGHT-DELIVERY RETURN ENVELOPE, POSTAGE PREPAID. By Evan Clark The Liz Claiborne NEW YORK — Liz Claiborne Inc., overcoming a brand saw second- double-digit decline in its namesake business quarter sales amid competition from private labels and new decrease 19.4 lines, reported a 13.3 percent increase in net in- Quote of the Week percent, but also a come for the second quarter and an improved much higher forecast for the full year. percentage of full- Boosted by improved performance from “The good thing is she’s getting brands such as Juicy Couture and Ellen Tracy, net price selling. income went up to $50.6 million, or 46 cents a di- treatment. It will probably make luted share, which put the bottom line 3 cents ahead of what analysts had projected, according her a better executive because to Reuters Estimates. Profit during the same peri- od last year was $44.6 million, or 41 cents. she will be able to function a “Our businesses continued to yield sales in- creases at retail due largely to a strong fashion little bit more.” cycle, increased full-price sell-through and our own conservative inventory planning, which has — Barry Schwartz on Donatella Versace been enabled by the substantial investment in entering rehab. technology made in recent years,” said chair- man and chief executive officer Paul Charron, in a statement. Revenue for the 13 weeks ended July 3 rose 6.9 percent to $1.03 billion from $959.4 million. Investors In Brief pushed shares of the firm up $1.56, or 4.6 percent, to $35.70 on the New York Stock Exchange Thursday. Claiborne’s other problem area was its moder- Apparel sales of the Liz Claiborne brand fell ately priced special markets business, which re- ● HIGHER GALERIES: Aided in part by a rebound in tourism, 19.4 percent for the quarter. Claiborne has been ported a 10.7 percent sales decline for the quarter. French retailer Groupe Galeries Lafayette said sales rose 4 per- working to turn around the brand with fewer Charron pointed to brands that contributed to cent to 1.34 billion euros, or $1.62 billion, in the quarter ended markdowns and a more focused presentation the quarter’s upside, including Enyce, acquired June 30.