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BURBERRY PROFITS SLIP/2 A BIG YEAR FOR RALPH/3 Women’sWWD Wear Daily • The Retailers’FRIDAY Daily Newspaper • May 26, 2006 • $2.00 Beauty Straight Talk MIAMI — Beauty’s brightest stars and key decision-makers — including Tom Ford, Leslie H. Wexner, William P. Lauder, Andrea Jung, Susan Arnold and Marc Menesguen — gathered at the Mandarin Oriental Hotel here for the WWD Beauty CEO Summit May 10-12 to offer their prescriptions Andrea Jung for what ails the industry. The ideas were bold and the talk was unusually blunt. For more, see coverage starting on page 4. Leslie H. Wexner Susan Arnold Tom Ford Marc Menesguen William P. Lauder ALL WWD BEAUTY CEO SUMMIT PHOTOS BY JOHN CALABRESE CEO SUMMIT PHOTOS BY ALL WWD BEAUTY 2 WWD, FRIDAY, MAY 26, 2006 WWD.COM Tech Revamp Hits Burberry Profi ts By Samantha Conti amounting to 6 million pounds, or $11.2 million, in the current year. Licensing revenue is expected to LONDON — Profits at Burberry Group plc dipped be broadly fl at, while fi rst-half wholesale sales are WWDFRIDAY 4.9 percent last year as a result of costs related to up a low-single-digit percentage. Beauty the brand’s technology overhaul, Project Atlas. Burberry’s sales increase last year was due in Profi ts for the fi scal year ended March 31 fell to part to strong retail sales in the U.S., where the GENERAL Profi ts at Burberry Group dipped 4.9 percent last year as a result of 106.4 million pounds, or $190.1 million, from 111.9 brand opened seven stores, and in Asia-Pacifi c, million pounds, or $206.6 million. Currency con- where company-owned stores in China and Taiwan 2 costs related to the brand’s technology overhaul, Project Atlas. versions were made at average exchange rates for performed well. The statement said new, franchised Polo Ralph Lauren Corp. was at full gallop in the fourth quarter, as the respective periods. stores in emerging markets such as Istanbul, Turkey; 3 profi ts more than doubled and beat Wall Street estimates by a penny. Before the Atlas-related costs, operating profi ts Warsaw, Poland; São Paolo, Brazil; Jeddah, Saudi rose 2.7 percent to 165.6 million Arabia; Mumbai, Indai, and BEAUTY: The brightest stars and key decision-makers came to the WWD Beauty CEO Summit to offer prescriptions on what ails the industry. pounds, or $295.8 million, from Rose Marie Bravo Cancun, Mexico also contrib- 4 161.3 million pounds, or $297.8 uted to the rise in revenues. From Savile Row to the Serengeti, Andrew Bolton, associate curator at million. Sales in Europe were fl at, 23 the Costume Institute, was into transitions at the Parrish Art Museum. Turnover rose 3.8 percent to due to weak performance in 742.9 million pounds, or $1.33 bil- Spain, where Burberry has The Senate was poised to pass a comprehensive immigration reform bill lion, from 715.5 million pounds, just made a major transition to 23 late Thursday that sets the stage for a showdown with the House. or $1.32 billion. The turnover fi g- retail outlets from wholesale Sales of gold jewelry in the U.S. spiked 4.4 percent in 2005, a six-year ure, which had been released last ones, and in the U.K., where 27 high, reaching $17.7 billion, the 15th consecutive year of increases. month, has been slightly adjusted sales were soft generally. The to refl ect a change in the compa- rest of continental Europe re- ny’s foreign currency translation ported strong results. EYE method. From now on, the com- As reported, Burberry Plage des Palmes was transformed into a Versailles parlor for the “Marie- pany will convert fi nancial results reached a “tipping point” dur- 25 Antoinette” party, with sky blue tents, abundant roses and ottomans. every 30 days, based upon average ing the fi scal year with regard WWD will not publish on Monday in observance of Memorial Day. exchange rates for each month. to its sales channels. Retail “In a year of transition and sales accounted for 42.9 per- Classifi ed Advertisements.............................................................27 investment, the group achieved cent of all sales, with wholesale To e-mail reporters and editors at WWD, the address is fi rstname. solid fi nancial results,” said chief sales making up 46.2 percent. [email protected], using the individual’s name. executive Rose Marie Bravo in Burberry has been working a statement Thursday. “With a consistently to increase the WOMEN’S WEAR DAILY IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLICATIONS, INC. COPY- RIGHT ©2006 FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. strong spring season underway, percentage of its retail sales, VOLUME 191, NO. 113. WWD (ISSN # 0149-5380) is published daily except Saturdays, Sundays and holidays, with one ad- we enter our 150th year with con- buying previously franchised ditional issue in January and November, two additional issues in March, May, June, August and December, and three ad- ditional issues in February, April, September and October by Fairchild Publications, Inc., a subsidiary of Advance Publications, fi dence in Burberry’s future.” stores and converting whole- Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Advance Magazine Publishers It was Bravo’s last round of fi - sale corners to retail ones. Inc.: S.I. Newhouse Jr., Chairman; Charles H. Townsend, President & C.E.O.; John W. Bellando, Executive Vice President and nancial results before she makes “Within the next couple of C.O.O.; Jill Bright, Executive Vice President_Human Resources; John Buese, Executive Vice President_Chief Information Officer; David Orlin, Senior Vice President_Strategic Sourcing; Robert Bennis, Senior Vice President_Real Estate; Maurie Perl, Senior way for Burberry’s new chief ex- years, retail will be the pre- Vice President_Chief Communications Officer. Shared Services provided by Advance Magazine Group: Steven T. Florio, Advance ecutive, Angela Ahrendts, in July. dominant route to market, making up more than Magazine Group Vice Chairman; David B. Chemidlin, Senior Vice President_General Manager, Shared Services Center. Stacey Cartwright, chief fi nancial offi cer, said the 50 percent of turnover,” said Cartwright. “There Periodicals postage paid at New York, NY and at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services Tax Registration No. 88654-9096-RM0001. Canada post return undeliverable latest numbers were on track. “Underlying profi t for will always be a place for wholesale as a win- Canadian addresses to: DPGM, 7496 Bath Road, Unit 2, Mississauga, ON L4T 1L2. POSTMASTER: SEND ADDRESS the year was actually up 5 percent, and the decline dow to the brand, and licensing should make up CHANGES TO WWD, P.O. Box 15008, North Hollywood, CA 91615-5008. FOR SUBSCRIPTIONS, was just due to costs linked to the preparation and around 10 percent of revenue.” 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 initiation of Project Atlas,” said Cartwright, who In the current fi scal year, Burberry plans to in- weeks is required for change of address. Please give both new and old address as printed on most recent label. has been spearheading the project. crease its net retail selling space by a minimum Subscriptions Rates: U.S. possessions, Retailer, daily one year: $109; Manufacturer, daily one year $145. All other U.S., daily one year $205. Canada/Mexico, daily one year, $295. All other foreign (Air Speed), daily one year $595. “By October, we’re going to have global sales of 10 percent. New store openings will be concen- First copy of new subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and stock transparency — which we’ve never had trated mostly in U.S. and Asian markets. and production correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. For permissions before,” she added. “We’ll be able to have early New retail openings over the next six months 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 visibility on sales and stock trends, and frankly, I include stores in Atlantic City and Riverside, N.J.; our subscriber list available to carefully screened companies that offer products and services that we believe would can’t wait.” Kansas City, Mo.; Madrid, Spain; Sydney, Australia, interest our readers. If you do not want to receive these offers and/or information by mail and/or e-mail, please advise As reported, Project Atlas foresees investment and Vienna, Austria. The brand is also doubling the 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 MANU- of some $94 million during the fi rst three years, size of its Hong Kong store in Ocean Center. SCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPAR- generating cost savings in excess of $37.4 million As for the chief executive handover process, ENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, annually by the project’s third year in 2007-2008. which began in January, Cartwright said it’s been OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED In terms of guidance for the current fi scal year, a smooth one.

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