Mayor Looks to Albany for Help REAL ESTATE DEALS PLUS ______7 the INSIDER ______8 His Bold Strategy to Slow Spiraling Pension and How
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20110124-NEWS--0001-NAT-CCI-CN_-- 1/21/2011 8:16 PM Page 1 INSIDE WHERE TOP STORIES THE Kenneth Cole JOB$ struggles to fit in with consumers ® ARE PAGE 2 PHOTO ESSAY, PAGE 12 MTV too hot VOL. XXVII, NO. 4 WWW.CRAINSNEWYORK.COM JAN. 24-30, 2011 PRICE: $3.00 for its own good? PAGE 3 Property auctions hammered in NY PAGE 2 Brunch fever knows no bounds; lines form in Bushwick PAGE 3 HSBC offers a preview of what U.S. banks will look like in the future IN THE MARKETS, PAGE 4 BUSINESS LIVES RON VS. DON GOTHAM GIGS FOR DECADES, RONALD PERELMAN AND HIS BUSINESS PARTNER Donald Drapkin were pretty much Channeling Eloise at He sued. He countersued. inseparable.¶ Their workdays began with breakfast at Mr.Perelman’s palatial East Side town- The Plaza P. 21 He counter-countersued. house. For lunch, they held court at the place they jokingly called their “cafeteria”—Le ● ANNE FISHER on a new Cirque.Frequently,this was followed by a nighttime charity gala or business dinner with New matchmaker for Inside the painful breakup York’s and Hollywood’s elite. ¶ They shared important family occasions, such as Mr. Perel- nonprofits P. 21 man’s bachelor party at La Côte Basque before he married gossip columnist Claudia Cohen, and the bat mitzvah for Mr. Drapkin’s daughter at The Pierre hotel, during which Mr. Perel- ● MOVERS & SHAKERS of M&A duo Ron Perelman Mamma Mia! man played drums with the band, Kool & The Gang. ¶ The two shared an almost frat-boy- creator like camaraderie. Mr. Drapkin playfully called diminutive and balding Mr. Perelman “the celebrates 10 years P .. 22 and Don Drapkin Dwarf ” or “the Putz.” Mr. Perelman shot right back, calling his partner “the Asshole.” ● GAEL GREENE pigs out BY AR ARA ON ELSTEIN See RON VS. DON on Page 17 on upper Broadway P .. 23 INDEX Mayor looks to Albany for help REAL ESTATE DEALS PLUS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _7 THE INSIDER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _8 His bold strategy to slow spiraling pension And how. The mayor in his NEIGHBORHOOD JOURNAL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _9 speech advanced proposals to elim- inate seniority rules for teachers SMALL BUSINESS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _9 and health costs? Ride Cuomo’s coattails and establish a new pension tier for FOR THE RECORD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _15 deliver his annual State of the City teachers and other non-uniformed CLASSIFIEDS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _18 BY DANIEL MASSEY address, United Federation of public workers that would lift the EXECUTIVE MOVES _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _21 Teachers President Michael Mul- retirement age to 65 from the cur- RÉSUMÉ REVIEW _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _22 ABOUT FIVE MINUTES before Mayor grew’s BlackBerry rang out in the rent 55 or 57. He suggested barring THE WEEK AHEAD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _23 Michael Bloomberg walked onto a audience. A City Hall official was raises for city workers unless they stage in Staten Island last week to on the other end of the line. are tied to cost savings elsewhere, “I guess the mayor realized there reforming century-old civil service might be problems with what he rules and making pension benefits newscom was about to say about my mem- negotiable via collective bargain- PARTWAY THERE: Mayor Michael Bloomberg bers,” Mr. Mulgrew said. See BLOOMBERG on Page 20 has the ear of Senate Republicans. ELECTRONIC EDITION NY AREA’S LARGEST EXECUTIVE RECRUITING FIRMS P. 14 NEWSPAPER 20110124-NEWS--0002,0003-NAT-CCI-CN_-- 1/21/2011 8:18 PM Page 1 IN BRIEF Kenneth Cole downsizes RAFAEL CESTERO WILL LEAVE HIS POST AS COMMISSIONER OF THE CITY’S DEPARTMENT of Housing Preservation and Development at the end of March to join L+M Development for better fit with consumers Partners as a managing director. He will assist the firm, which builds affordable housing, in expanding its business outside of the New York FASHION BIZ: Kenneth area, focusing on the West Coast, New Jersey and Rock Center closure Cole remains on the creative the Gulf. In his nearly two years at HPD, Mr. side, while Jill Granoff Cestero has been credited with helping the city just one turnaround oversees operations. meet its ambitious affordable-housing goals and embarking on an effort to rescue overleveraged step, but company may properties across the city. Mayor Michael be a takeover target He remains executive Bloomberg said Mr. Cestero had launched “the chairman and chief most aggressive foreclosure prevention program creative officer. in the nation,” creating a $750 million initiative BY ADRIANNE PASQUARELLI Operational blun- to stabilize distressed multifamily properties ders over the past and transforming the process for inspecting and NEW YORKERS LOOKING to pick something decade have led shop- addressing troubled buildings. up at the Kenneth Cole shop in Rocke- pers to turn away from feller Center will now have to go else- the company, which LUCKY BRAND JEANS SHUTTERED ITS where. The 17,000-square-foot flagship includes the signature COLUMBUS AVENUE STORE LAST WEEK. THE closed last week—part of an overhaul that Kenneth Cole New closure of the shop, at West 70th Street, may be includes shuttering roughly 15% of the York and mass-appeal the result of negative sales at struggling parent Manhattan-based company’s full-price Kenneth Cole Reac- company Liz Claiborne Inc. Earlier this stores. tion lines. One mis- month, the clothier, whose brands include Kate Kenneth Cole Production Inc., a pur- take was removing the Spade and Juicy Couture, reported fourth- veyor of contemporary apparel, footwear former from depart- quarter sales that were “clearly disappointing,” and accessories, has been struggling for ment stores to sell ex- according to Liz Chief Executive William years with fewer customers and too many clusively at its own McComb. Lucky’s same-store sales were down locations. The recent moves are part of a shops, which the 10% in the period, including a 13% drop in long-term strategy to turn the company company continued December alone, the most important month of around. to add. the holiday shopping season.The denim brand Under the three-year tenure of Chief has five remaining stores in Manhattan, three Executive Jill Granoff, the $410 million Bungled branding of which are in SoHo. n firm has been righting fashion missteps THE COMPANY confused that alienated customers, mitigating hikes consumers further by in production costs and slashing real estate launching several BY THE NUMBERS expenses. Investors are still wary, however. other divisions, in- Kenneth Cole’s stock, currently trading cluding accessories Weekly shift of the city’s economy near $12.65, has risen only 12% over the and Unlisted, a low- past 12 months.That’s less than half of the newscom priced leather goods SIDETRACKED LOCOMOTIVES It’s one thing increase in the Standard & Poor’s retail in- label. when Citigroup’s earnings fall short, as they did dex in the same period and a long way from “Their message got diluted, and the last week. It’s another when Goldman Sachs Their message and American Express also disappoint. the $45 a share seen in the company’s hey- distinction between the different brands day in 2000. The restructuring and low got diluted, as did got blurred,” said Jeff Edelman, director of share price have made the company a retail and consumer products advisory at 33 487 $600M takeover target, according to sources. the distinction RSM McGladrey. MEDIAN AGE of NUMBER AMOUNT Ms. Granoff, a Long Island native who a Conan watcher, of foreclosures Netflix spends on “Taking the right steps” had spent nearly two years overseeing Liz versus 56 for in NYC in 4Q, postage each between labels Tonight Show down 32% from year “[KENNETH COLE] is taking the right steps Claiborne Inc.’s Juicy Couture and Lucky With Jay Leno a year earlier Source: Netflix CEO for a turnaround,” said Steven Marotta, a brands, took on a hefty to-do list when she Source: The Source: Property Reed Hastings, retail analyst at CL King.“But there are so joined Kenneth Cole, but analysts say she Nielsen Co.