Over the Rainbow

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Over the Rainbow ARMANI PROFITS UP/2 CARREFOUR VS. WAL-MART IN CHINA/13 Women’sWWD Wear Daily • The Retailers’ DailyFRIDAY Newspaper • April 11, 2003 Vol. 185, No. 74 $2.00 Beauty Over the Rainbow NEW YORK — The Estée Lauder brand is heading for Fantasy Island with its newest women’s scent, Beyond Paradise, which will begin rolling out in August. The fragrance, which signals a number of departures for the venerable brand, could do more than $100 million at retail globally in its first year. For more, see page 6. Alibis Abound as Comp-Store Sales in March Lay a Big Egg KENNY By Jennifer Weitzman and Evan Clark public’s interest by war worries, Even in Easter-deprived BRYN Y B NEW YORK — Stores lost the battle for wintry weather and a lack of must- condition, a number of stores — Gap, consumers’ attention in March. have items, apparel retailers limped Pacific Sunwear and Chico’s notable STYLED They certainly had enough across the finish line in March with among them — outperformed the competition. Deprived of Easter few positive same-store results and competition and delivered solid IANNACCONE; revenues by the calendar and of the more than a few double-digit declines. See March, Page 5 THOMAS Y B PHOTO 2 2003 Armani Sales Boost On the Block? 11, LVMH Mum WWDFRIDAY Beauty APRIL , Annual Profits 9.7% On Sale Talks GENERAL War worries, wintry weather and the late Easter proved undefeatable foes By Amanda Kaiser NEW YORK — LVMH Moët Hen- FRIDAY Giorgio for March same-store sales, which finished below year-ago levels. nessy Louis Vuitton has de- 1 Armani MILAN — Double-digit sales in- clined comment on reports cir- Estée Lauder is launching Beyond Paradise, a fragrance it wants to push creases in jeans, watches, cos- culating in the market that at into the top five — which means sales around $100 million after a year. WWD, 6 metics and perfumes allowed least two cosmetics companies Double-digit sales gains in jeans, watches, cosmetics and perfumes allowed Giorgio Armani to post a 9.7 per- are talking about possibly ac- cent increase in pretax profits quiring the beauty licenses of 2 Giorgio Armani to post a 9.7 percent increase in pre-tax profits last year. last year despite less robust Michael Kors, Marc Jacobs and Andrea Pinto unexpectedly left Krizia this week after having been back at growth in other parts of its ap- Kenneth Cole from LVMH. 2 the company just eight months, WWD has learned. parel business. According to reports, Estée Armani’s pretax profit for the Lauder is negotiating for the Kors SUZY: The American Academy in Rome’s gala; more on the Russell Crowe- year ended Dec. 31 rose to $214.5 license, although there is no 4 Danielle Spencer merger; Jude and Sadie make up; Cornelia comes home. million from $196.2 million. sense of certainty at this point Sales advanced 2.3 percent to that any of the talks will be fruit- Obituary ..................................................................................................14 $1.4 billion from $1.37 billion, in ful. A spokeswoman for Lauder Classified Advertisements........................................................................15 line with preliminary figures re- declined comment on the grounds To e-mail reporters and editors at WWD, the address is leased earlier this year, but slow- that “the company does not com- [email protected], using the individual's name. er than the 5 percent growth in ment on rumors.” That was the SUBSCRIPTION RATES the first half of 2002. Dollar fig- same position taken by LVMH and U.S. and possessions, Retailer, daily one year, $99; Manufacturer, daily one year, $135. ures are converted from the euro the third company mentioned in All others U.S., daily one year $195. Canada/Mexico, daily one year, $295. All other foreign (Air Speed), daily one year $595. Please allow 6-8 weeks for service to start. Individual subscription information/Single Copy Sales : (800) 289-0273; at current exchange rates. speculation, Coty Inc. outside U.S. (818) 487-4526; new group subscription information 212-630-4196 Giorgio Armani, president, Coty reportedly has ex- Postmaster: Send address changes to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008. chief executive and owner of the pressed an interest in possibly WWD (ISSN #0149-5380) is published daily except Saturdays, Sundays and holidays, with one additional issue every month except July, and two additional issues in April and August, by Fairchild Publications, Inc. privately held designer house, acquiring the Marc Jacobs and a subsidiary of Advance Publications Inc., 7 West 34th Street, New York, NY 10001-8191. said he was optimistic that the Kenneth Cole licenses. WWD is a registered trademark of Fairchild Publications Inc.© 2003 by Fairchild Publications Inc., company will continue to deliver Jacobs figures prominently in a subsidiary of Advance Publications Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, positive results despite tough buoyant times again as there al- the LVMH stable, as chief design- including photocopying or recording, or by any information storage or retrieval system, except as may be times, but declined to offer spe- ways are. In the meantime, er of Louis Vuitton and the luxu- expressly permitted in writing by the copyright owner. Editorial Reprints: (212) 221-9595 cific forecasts. being successful means being ry giant holds a major stake in Periodicals postage paid at New York, NY and other offices. Mailed under Publications Mail Sales Agreement No. 517054. Canada Post Returns to: P.O.Box 1632, Windsor, ON N9A 7C9 “I never try to be involved in practical in answering the real his fashion firm. LVMH divested GST # 88654-9096-RM 0001 Canada Publications Agreement # 40032712 making predictions on the econ- needs of your customers.” its stake in Kors in January. Printed in the U.S.A. omy,” he said in an interview. Earnings before interest, Fragrances by all three design- All signed articles published in the paper represent solely the individual opinion of the writer and not those of “What is important to me is to taxes, depreciation and amortiza- ers are distributed and marketed WOMEN’S WEAR DAILY. run the business in a way that is tion rose 7.2 percent to $283.5 by the American Designer Fra- For Web site access, log on to www.WWD.com prudent and appropriate to the million from $265.2 million in grances division of Parfums current market conditions.” 2001. A company spokesman said Givenchy Inc. According to indus- However, in a reference to net profit for the year, which is try estimates, the two main fra- the difficult trading conditions expected to be released later, grances by Kors — a women’s and In Brief currently affecting world mar- also rose about 7.2 percent. a men’s — generated a combined kets, he noted, “Any brand that is “I look to the future with confi- $31 million in U.S. retail sales last G interested in building its busi- dence in the strength of the brand year, while the two limited-distri- FERRAGAMO’S ASIAN DEAL: Salvatore Ferragamo SpA and ness over the long term has to be and in our proven strategy for ex- bution Jacobs brands generated Hong Kong trading giant Li & Fung Ltd. have formed a joint ven- able to manage through econom- pansion, which has achieved a 14 $20 million. Kenneth Cole’s men’s ture to manage the Italian company’s accessories and clothing ic cycles. There will be more Continued on page 11 and women’s master brand re- business in Southeast Asia. The new entity is named Ferragamo portedly brought in $21 million. Singapore Pte. Ltd. Previously Li & Fung served as Ferragamo’s Meanwhile, speculation resur- distributor in the area, where there are currently nine Ferragamo faced that John Idol, chairman boutiques. The company declined to disclose details of the deal. and chief executive of Kasper ASL, was heading to Michael GUCCI’S JAPAN PLAN: Gucci will open a 10,800-square-foot China, Vietnam Imports Soar Kors. Idol firmly denied the talk flagship in Tokyo’s Ginza district in spring 2005, underscoring the Thursday. group’s intention to strengthen its presence in Japan. The build- ing housing the store, acquired by Gucci for an undisclosed sum, will also provide 41,040 square feet of office space for the group’s As Pressure on Limits Rises Japan headquarters, common space and parking areas. “Japan is the most important market in the luxury goods industry,” said as U.S. and Vietnam trade officials A Very Short Stay: Domenico De Sole, president and chief executive of the group, in By Joanna Ramey a statement. “Gucci will benefit enormously — both strategically and Kristi Ellis met for the second day in Wash- ington to negotiate terms for the Andrea Pinto Exits and financially — from this initiative.” The Gucci brand has WASHINGTON — China and U.S. to impose quotas on Viet- seven freestanding stores and 37 in-store shops in Japan; other Vietnam continued to dominate namese shipments. U.S. officials labels in the group have 65 directly operated stores, and YSL textile and apparel import growth have threatened to unilaterally set Krizia — Again Beauté has 65 corners in department stores throughout the coun- in February, the Commerce De- limits if this second round of talks try. Last year, Gucci posted sales of $538.1 million (converted from euros at the current exchange rate) in Japan, which ac- partment reported Thursday, as fails to produce an agreement by By Luisa Zargani agency officials came under today. The U.S. can set limits be- counted for about 20 percent of total group sales.
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