Fistful of Dreams
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Page 1 Friday BEAUTY: Prada launches BEAUTY: limited edition Kristin Davis fragrance, page 9. men’s collections/fall ’09 fronts Ahava’s new body line, page 11. PARIS For more, see WWD.com. Women’s Wear Daily • The Retailers’ Daily Newspaper • January 23, 2009 • $3.00 Beauty s MEN'S: Paris shows WwDFRIdAY kick off with Dries van Noten, Louis Vuitton, Yves Saint Laurent Fistful of Dreams and more, pages 6-7. Diesel hopes to pack a punch in the fragrance market this spring with its first solo men’s offering, Only the Brave. The scent, which will be rolled out by L’Oréal in Germany in late March, France in mid-April and everywhere else in May, features a bottle modeled after Diesel founder Renzo Rosso’s own hand. Sources estimate it could do at least $50 million at retail globally in its first year on counter. For more, see page 9. Balancing the Books: Jones’ $810M Charge Could Signal a Trend By Evan Clark If Jones Apparel Group’s $810 million noncash writedown for goodwill and trademarks is any guide, accountants might exact an even bigger toll on fourth-quarter profits than stingy consumers. Jones said Thursday that the aftertax charge, related mostly to its acquisitions of Nine West and Maxwell Shoe Co., and retail weakness would result in losses of $10.07 to $10.11 a share for the quarter, down from losses of $1.01 a year ago. And Jones isn’t alone. Fashion companies of all stripes could post far steeper losses than weak sales would dictate as they write down goodwill. Simply put, goodwill is the valuation placed on assets from acquisitions and needs to be adjusted on a regular basis to keep ATZ M See Jones, Page13 LO LO i AN D TYLED BY TYLED BY S HOMAS IANNACCONE; T PHOTO BY PHOTO BY 2 WWD, FRIDAY, JANUARY 23, 2009 WWD.COM Barneys Said On Block, Near CEO Pick By David Moin bidding battle and thinking the brand was export- able internationally. Istithmar bought Barneys at BaRNeYs New YoRK, thRoUgh all the the peak of the market. At the time, Barneys gen- WwDFRIdAYBeauty turmoil plaguing the retail industry this year erated about $50 million in EBITDA. FASHION and last, has kept its profile low under the cloak But the Dubai economy is facing serious pres- of private ownership — until now. sure as real estate values there plummet, un- 4 In a season where anything goes, the pre-fall The luxury chain is said to be up for sale again employment rises and tourism dries up. There lineups at Bottega Veneta, Akris and Azzaro had and close to naming a new chief executive officer. was speculation this week that on top of its re- their share of classic pieces. Sources said an individual has been selected tail difficulties, Istithmar’s real estate holdings GENERAL as ceo and might need to fulfill obligations on an- are losing value. Bloomberg News first report- other job before officially joining Barneys. The ed Barneys was up for sale. Instead of selling 1 Accounting measures like Jones Apparel Group’s identity of the individual could not be learned. Barneys outright, Istithmar could seek an equity $810 million write-down for goodwill and trade- David Jackson, ceo of Barneys owner partner in the business. marks could impact fourth-quarter profits. Istithmar, would not comment on whether the Selling Barneys for anywhere near its purchase John Varvatos is poised to launch his third men’s chain is for sale or that it’s found a new ceo. price of two years ago would seem almost impossi- 8 scent, Artisan, in March, in an effort to bolster a Meeting both objectives would be a feat for ble at this juncture. Jones acquired Barneys from growing Varvatos fragrance business. Barneys for several reasons. The deteriorat- Whippoorwill Associates Inc. and Bay Harbor ing economy has decimated the luxury sector Management in 2004 for $397.5 million. 9 Diesel’s new men’s scent, Only the Brave, made — both Saks Inc. and Neiman Marcus Inc. have Moody’s also cited concerns that Barneys by L’Oréal, will roll out in some 30,000 doors been saddled with excess inventories and dou- continued to operate in the tough retail environ- globally, starting in Germany at the end of March. ble-digit sales declines — and has dried up the ment for months without a ceo. Howard Socol Prada’s newest scent, Infusion de Fleur d’Oranger, market for mergers and acquisitions. served as Barneys president, ceo and chairman 9 is the first in a range of limited edition scents In addition, Barneys has an unproven expan- for over seven years but left the store at the end dubbed the Ephemeral Infusion Collection. sion strategy, with its flagship openings over the of last June amid speculation he disagreed with last three years in the U.S. not yet gaining momen- Istithmar on exactly how the chain should expand. Mineral makeup and natural products continued tum. Handsomely designed flagships were opened Barneys had sales of over $780 million for the year 10 to be a strong theme among many manufacturers in March 2006 in Boston, followed by Dallas, Las ended Aug. 2. “It’s strange there has been no ceo at showing at ECRM’s Efficient Program. Vegas and San Francisco. Barneys in that stretch Barneys since July,” said another financial source. 12 EYE: The Oscar nominees announced Thursday also relocated its stores in Chicago and Seattle. Since Socol’s departure, the luxury chain has been include such red-carpet stars as Anne Hathaway, “Barneys New York’s taste level has not been run by a tier of veteran Barneys executive vice Angelina Jolie, Kate Winslet and Penélope Cruz. widely accepted elsewhere, as they built stores presidents. To its credit, Barneys has maintained across the country,” said Joyce Greenberg, an in- its hip image and most of its senior staff. 14 Eddie Bauer Holdings Inc. on Thursday reported vestment banker, formerly with Financo Inc. “The U.S. luxury retail executives are not likely lower sales and estimated earnings results for the market for Barneys merchandise does not appear candidates for Barneys since most would have fourth quarter. to be as broad as originally anticipated.” non-compete clauses in their contracts, eliminat- s 14 Tommy Hilfiger USA Inc. is focusing more on its Last November, Moody’s Investors Service ing such individuals as Saks Fifth Avenue’s Ron e-commerce presence and continuing to bring its downgraded Barneys’ debt, citing weaker-than- Frasch, Jim Gold of Bergdorf Goodman or Karen Kate Winslet accessories business back in-house. expected operating performance and debt-protec- Katz of the Neiman Marcus stores. On the in- tion measures since the company was purchased ternational front, names that have surfaced are Classified Advertisements.................................................................................................15 in September 2007 by Istithmar, an investment Vittoria Radice of La Rinascente; Mark Lee, for- firm controlled by the government of Dubai. merly of Gucci; Caryn Lerner of Holt Renfrew, TO E-MAIL REPORtERS AND EDItORS At WWD, tHE ADDRESS IS Istithmar purchased Barneys from the Jones and former Topshop chief Jane Shepherdson. [email protected], USING tHE INDIVIDUAL’s name. Apparel Group Inc. for $942.3 million, beating Barneys also could choose an individual from WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2009 FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. out Link Theory Holdings Co. Ltd. of Tokyo in a outside the retail sector. VOLUME 197, NO. 15. 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