SWEET HEADING TOOTH OVERSEAS PARIS IS SEEING CHICO’S IS TAKING ITS A BOOM IN NOUVEAU PRINTS ON THE PASTRY SHOPS. ROAD, FIRST TO CANADA. PAGE 9 PAGE 4

RETAILERS’ LAWSUIT GOES ON Macy’s, Martha Settle Dispute Over Penney’s

By VICKI M. YOUNG

TERRY HAS MADE UP with Martha, at least busi- nesswise — but he is still mad at J. C. Penney Co. Inc. Macy’s Inc., led by chairman, president and chief executive offi cer Terry J. Lundgren, has settled its FRIDAY, JANUARY 3, 2014 ■ $3.00 ■ WOMEN’S WEAR DAILY breach-of-contract lawsuit against Martha Stewart Living Omnimedia Inc., but its claim against Penney’s WWD remains subject to a decision by Manhattan state court judge Jeffrey Oing. Macy’s said: “Macy’s has resolved its breach-of-con- tract lawsuit against Martha Stewart Living Omnimedia. We are pleased to be able to put this matter behind us. The terms of our settlement are confi dential, will not be disclosed and are not deemed to be material to Macy’s. We can now return our focus to what we do best — bringing beautifully designed, high-quality, affordable products to consumers nationwide. We look forward to a continued, successful partnership together.” MSLO essentially said the same thing in its state- ment, also noting that the terms of the agreement are not deemed material to it. Macy’s added that the settlement has no effect on its outstanding claim against Penney’s. The court still has to rule on its claim, as well as assess damages. Neither Macy’s nor MSLO provided any additional comment. A spokeswoman for Penney’s declined com- ment. But Penney’s in October substantially scaled back its earlier tie-up with Martha Stewart, agreeing to sell a smaller number of categories and to return its stake in MSLO and give up its seat on the Martha Stewart board. Shares of Macy’s on Thursday slipped 0.02 percent to $53.39, while MSLO’s stock shot up 8.8 percent to close at $4.57. Shares of Penney’s were down 3 percent to $8.88. The settlement between Macy’s and MSLO defuses what had been one of retail’s most riveting legal cases in recent memory. The case has been intermittently at trial since February, and while the main presentation of the case was completed in June, closing statements SEE PAGE 12 China’s New Tourist Prefers Going Solo

By WWD STAFF

BEIJING — Many of China’s new jet-setters are ditch- ing the tour bus and opting to go solo, carving out a challenge for retailers who want to capture this grow- ing segment of independent Chinese travelers. Though organized group tours remain dominant for outbound travel, there’s a new wave of intrepid travel- Aiming High ers coming down the pipeline who are younger, richer and yearning for unique experiences. Sabrina Zhang, a 30-year-old marketing professional from the port Estée Lauder is amping up its luxe factor with the launch of Pure Color Envy, a new city of Tianjin, fi ts the profi le. After being shepherded 20-color lipstick lineup, which will bow globally in March. The formula is intended across Thailand for two weeks during the Lunar New to sculpt and moisturize lips with two proprietary molecules. The offering could Year in February, China’s busiest travel period, Zhang vowed to never step foot on another tour bus again. generate fi rst-year global retail sales of $60 million. For more, see page 6. “I hated it,” Zhang said, explaining how she was forced to eat Chinese food every day and paid for ac- tivities she didn’t want to partake in. To recover, Zhang booked a two-week vacation in June with three friends, stopping in Amsterdam, Barcelona and Paris. Zhang estimated that she spends around 10,000 euros, or $13,570 at current exchange, on luxury goods on each international trip she takes. “I bought a Versace handbag for 7,000 renminbi [$1,190 at current exchange] in Paris. I saw the same bag [in Tianjin] for over 20,000 renminbi [$3,400],” Zhang said, adding that China’s high taxes on import- ed goods prompt her to buy abroad. The majority of Chinese independent travelers are between the ages of 25 and 45, university educated and PHOTO BY JOHN AQUINO, STYLED BY SHARON BER more demanding as a result of growing up as single SEE PAGE 12 2 WWD FRIDAY, JANUARY 3, 2014 WWD.COM Chalayan to Design for Vionnet THE BRIEFING BOX en’s wear label in 1993, said, “The combined ele- IN TODAY’S WWD By ALESSANDRA TURRA ments of Goga Ashkenazi’s creative energy and entrepreneurial approach together with the unpar- MILAN — Vionnet has tapped Hussein Chalayan to alleled heritage of the house makes this an exciting design the brand’s Demi-couture line. collaboration for me”. A look from the The first collection conceived by the Cyprus- Launched in September 2012 to mark Vionnet’s Costume and Costume born designer will be unveiled on Jan. 21 during 100th anniversary, the label’s Demi-couture collec- collection. For more, couture week in Paris. tions, which are sold to private customers, consist see page 12 and “I’m extremely happy about this collaboration of one-of-a-kind dresses manufactured with high- WWD.com. because I think that Hussein is a supertalented, end, exclusive techniques, but which retail at more forward-thinking designer,” said Vionnet chairman affordable prices than haute couture pieces. and creative director Goga Ashkenazi. “He is a true “I’m looking at the Demi-couture as a very spe- artist, very conceptual, he thinks out of the box and cial, noncommercial project,” said Ashkenazi. “My

has a strong architectural approach. He represents goal is to show something very special, a little bit NATIONAL what Madeleine Vionnet represented in her era.” different from today’s fashion, a little bit revolu- Chalayan, who established his namesake wom- tionary, as Madeleine Vionnet was.” COSTUME OF

Upside Seen for Urban, AEO in 2014 COURTESY PHOTO

By ARNOLD J. KARR Macy’s Inc. has settled its breach-of-contract lawsuit against URBAN OUTFITTERS INC. and American Eagle Martha Stewart Living Omnimedia Inc., but its claim against J.C. PAGE 1 Outfitters Inc. are the teen retailers best positioned Penney Co. Inc. remains in the judge’s hands. to rebound from the “promotional war zone” of 2013. That was the conclusion of Jefferies analyst Many of China’s new jet-setters are opting to go solo, carving Randal Konik, who upgraded both companies to out a challenge for retailers who want to capture this growing “buy” from “hold” while downgrading youth mer- segment of independent Chinese travelers. PAGE 1 chants Abercrombie & Fitch Co. and Aéropostale Inc. to “hold” from “buy.” He raised his price target for Chico’s is taking its style of animal prints, jewel-tone colors Urban to $54 and American Eagle’s to $19 while low- and demonstrative jewelry to an international audience while ering Abercrombie’s to $30 and Aéropostale’s to $7. moving into smaller markets in the U.S. PAGE 4 Outside the teen sector, he lifted his ratings on both Ann Inc. and Chico’s FAS Inc. to “buy” from Investcorp’s Nemir Kirdar is busy plotting the next 30 years for “hold,” and lifted their respective price targets to the company he founded in Bahrain in 1982. PAGE 4 $45 and $23. (For more on the Chico’s brand, see page 4.) The Galleria at Kempinski Hotel is the first attempt to form a U.S. retail holdings lost ground on the first trad- space fully dedicated to luxury retail in Nairobi, Kenya. PAGE 5 ing day of the new year, with the S&P 500 Retailing Industry Group dropping 0.4 percent to 936.12, but Estée Lauder is further cementing its modern makeover with Konik’s stock picks for 2014 easily outperformed Pure Color Envy Sculpting Lipstick, a new color line which will the market at large. PAGE 6 Shares of Urban rose 1.8 percent to $37.78 while bow in March. American Eagle’s were up 2.3 percent to $14.73. Abercrombie’s shares were down 2.7 percent to The alphabet cream trend is entering new territory with an EE $32.01 while Aéropostale’s shed 0.1 percent to fin- offering, designed to exfoliate skin. PAGE 7 ish Thursday’s trading session at $9.08. Youth retailing was among the few sectors left A last-minute surge and post-Christmas traffic nudged on the sidelines last year as the retailing index rose mass-market holiday sales above last year. PAGE 7 43.9 percent to 939.81. Shares of American Eagle declined 47.1 percent, Aéropostale’s dropped 30.1 Desigual is importing its new fragrances into the U.S. with percent, Abercrombie’s were off 30 percent and plans for a full-out assault on the beauty category. PAGE 8 Urban’s surrendered 5.7 percent. Citing “an improving trajectory…driven by a Attempts to outdo New York’s croissant-donut confection has strengthening housing market, rising household the French capital in the grip of a pastry craze. PAGE 9 net worth and falling unemployment,” Konik was upbeat about the outlook for specialty retailers in Hearst Corp. president and chief executive officer Steven Swartz general. Low interest rates, easy comparisons for in a staff memo laid out his plans to carry on with Hearst’s the final three quarters of the new year and “still digital, business and television initiatives. PAGE 9 rising [free cash flow] profiles” will also help.

Urban, which registered profit improvement in Jefferies analyst Randal Konik upgraded Urban Outfitters Carlo Brandelli will return to the role of Kilgour creative the first nine months of the year as well as in its Inc. but downgraded Abercrombie & Fitch Co. third quarter, is expected to provide a “turnaround director with a spring collection that will make its debut on Mr PAGE 11 story” at its Urban Outfitters division to go along teenagers. In November, when the national unem- Porter in February. ployment rate fell to 7 percent, the figures in the teen and young adult age groups remained at dou- ON WWD.COM ble-digit levels, with the rate for those aged 16 to 19 at 20.8 percent and for those in the 20 to 24 stratum FASHION: Costume National is launching a new collection, 2.3% at 11.6 percent. called Costume and Costume, to replace C’N’C Costume The downgrade for Abercrombie reflects Konik’s National. For more, see WWD.com. INCREASE IN AMERICAN EAGLE OUTFITTERS INC. belief that “it will take longer than anticipated to rejuvenate impaired brand relevance in the U.S., SHARES ON THURSDAY. making it difficult to drive improved fundamentals TO E-MAIL REPORTERS AND EDITORS AT WWD, THE ADDRESS IS [email protected], USING THE INDIVIDUAL’S NAME. in the business and curtail ANF’s aggressive pro- WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. motional stance.” While much of the firm’s third- COPYRIGHT ©2014 FAIRCHILD FASHION MEDIA. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. with its “thriving” Anthropologie brand, and is quarter loss and a 130 basis point decline in gross VOLUME 207, NO. 2. FRIDAY, JANUARY 3, 2014. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one additional issue in March, May, June, August, October and December, and two seen as having “significant potential across mul- margin for the period were attributed to charges as- additional issues in February, April, September and November) by Fairchild Fashion Media, which is a division of Advance tiple channels, especially direct-to-consumer,” the sociated with the decision to close the Gilly Hicks Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Condé Nast: S.I. Newhouse, Jr., Chairman; Charles H. Townsend, Chief Executive Officer; Robert A. Sauerberg Jr., President; John W. Bellando, analyst said. stores, the firm’s projection for fourth-quarter com- Chief Operating Officer & Chief Financial Officer; Jill Bright, Chief Administrative Officer. Periodicals postage paid at New York, NY, American Eagle’s profits declined in the third parable sales, including those registered online, and at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services Tax Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian addresses to P. O . Box 503, RPO West quarter and for the nine months, but Konik sees was a “low double-digit decrease.” Beaver Cre, Rich-Hill, ON L4B 4R6. POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P. O . Box 6356, better prospects ahead. He said a strong man- Aéropostale’s numerous challenges include “de- Harlan, IA 51593. FOR SUBSCRIPTION, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P. O . Box 6356, Harlan, IA 51593, call 866-401-7801, or email customer service at wwdPrint@cdsfulfillment. agement team, headed by chief executive officer teriorating fundamentals and diminishing visibility com. Please include both new and old addresses as printed on most recent label. For New York Hand Delivery Service Robert Hanson, “is well equipped to drive mean- on the timing of a turnaround that has yet to mate- address changes or inquiries, please contact Mitchell’s NY at 1-800-662-2275, option 7. Subscribers: If the Post Office alerts us that your magazine is undeliverable, we have no further obligation unless we receive a corrected address within ingful margin and earnings recovery against easy rialize,” according to the analyst. “In the meantime, one year. If during your subscription term or up to one year after the magazine becomes undeliverable, you are ever compares and restore brand momentum.” merchandise changes have failed to connect with dissatisfied with your subscription, let us know. You will receive a full refund on all unmailed issues. 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scarves and handbags. For the woman who works, there’s the new line, 9 to 5abulous. Chico’s Plots International Growth “The Chico’s woman wants everything she could possibly from $149.5 million last year. prototype will carry the brand towns allow staff to easily track need,” Murray said. “Her biggest By SHARON EDELSON For Chico’s/Soma Intimates, across international borders. repeat customers. request over the years has been same-store sales were flat in the “Several of the international retail- “We do well in small markets shoes, which had a soft launch CHICO’S is taking its extrovert- first quarter and dropped 3.1 ers didn’t understand the ‘country’ and destination centers,” Murray in the fall. The collection will ed style of animal prints, jewel- percent in the second quarter part of the store decor,” Murray said. “She can pull right up in grow in the spring.” tone colors and demonstrative and 3.3 percent in the third quar- said. The new model, being tested her car. We bring fashion to the Murray calls shoes “a white- jewelry to an international audi- ter. During the second-quarter in Boston, has warm tones with markets, and in those markets, space opportunity in terms of ence while moving into smaller conference call with analysts, subtle animal prints, a woven we are [all there is]. Manhattan, offering both fashion and com- markets in the U.S. and growing Chico’s FAS chief executive offi- entry, luggage details on fixtures for example, only has two stores, fort. Shoes have the Chico’s its product line. cer David F. Dyer said the brand and artifacts layered in as props. while there are six or seven in DNA. We launched with a lot of As it marks its 30th anniversa- faced a significant challenge up Chico’s executives walk the Charlotte and we can still get animal prints, and 40 percent of r y, the Sanibel Island, Fla.-based against strong second-quarter walk, talk the talk and wear the growth out of that market. Small the assortment is boots. I see it retailer is “expanding interna- comparable sales in 2012. brand from head to toe. They towns are part of the formula, as growing into a very large busi- tionally next year as a corpora- is the whole wardrobing experi- ness. We won’t carry shoes in all tion and as a brand,” said Cinny ence. We customize and local- stores, but we’ll have tablets in Murray, president of Chico’s, re- A black-and-white ize the assortments. Turquoise stores” with the offering. ferring to Chico’s FAS Inc., which fashion story jewelry is big in Texas, but it Zynergy activewear contin- owns the signature label as well from Chico’s. wouldn’t be the first stone we’d ues to expand, and there’s a new as White House|Black Market, put into a store in Boston. golf collection. “We’re seriously Soma and Boston Proper. “We’re “Malls are closing and shift- rolling golf out to 400 stores in working on a more upscale pro- ing,” Murray added. “Patterns the spring,” Murray said. “Also totype that we’ll take internation- change in a community. Every in the spring, we’re working ally,” said Murray. year I do a complete store re- with the Ladies’ Professional The first stop will be Canada, view and close stores that are Golf Association and partnering launching next fall. “We have a not meeting expectations. As a with them on the Chico’s Patty very strong Canadian base known specialty brand, there is a cap Berg Memorial Tournament. to us through our Web site and on brick and mortar. What will Golf is very much a part of [our seen in Florida,” Murray said. change is the experience. Her customer’s] life, especially being “We’re going to Toronto. The cus- luxury is convenience. She’ll visit a Florida brand. Golfwear didn’t tomer is there.” all four or five stores in a market, have pizazz and femininity. A Chico’s has 700 boutiques so we change the assortments.” whole new world of customers today. About 800 stores is the Chico’s is not for wallflow- will find us through golf.” ceiling. “It’s natural to go inter- ers. Color is big and bold and Another new category, swim- national,” Murray said. patterned in blouses, dresses wear, is launching in Chico’s The president declined to re- and sweaters. The brand never resort book. It will roll out to veal other foreign locations, but in- met an animal print it didn’t stores in 2014. dicated that Europe is in the offing. like. Zebra, leopard and oce- “Other formats is where we The expansion comes against lot are splayed onto jackets, think there’s an opportunity,” the backdrop of disappointing coats, sweaters, skirts, pants Murray said. “We have such a financial results in the first nine and shoes. Leopard is so ubiqui- wide range of stores and catego- months of this year. For the pe- tous throughout the collection, ries. Those that are scalable will riod ended Nov. 2, Chico’s FAS Chico’s has four million active discuss clients as if they were Murray said, “we actually con- be tested with pop-ups.” Murray reported net income of $66.2 mil- customers, but still sees some friends, referring to the shop- sider it a solid.” A leopard-print said Chico’s is testing “some lion, compared with last year’s room to grow domestically. “In per as “she.” They feel it’s more duster coat from Chico’s new other sport-related things and $148.7 million, a 55.5 percent New York, we’ll add new stores personal than “customer.” They elevated Black Label collection other things that are a step be- drop. Excluding an impairment a mile away from existing ones,” know about shoppers’ personal is shown with a gigantic piece of fore jammies.” charge of $64.3 million in the Murray said, adding that the lives anecdotally from reports jewelry on the Web site. “Wouldn’t home be fun?” she most recent quarter and other company isn’t worried about can- from sales associates that find The higher-end Black Label said. “We’ve tested picture frames. charges, net income for the nine nibalization, with Manhattan’s their way to headquarters. Part collection is rolling out in 2014 We’re constantly in motion and months would have been $131.1 density and foot traffic. of the reason is that Chico’s lo- featuring cashmere, leather spend so much time trying to learn million, a 12.3 percent decline A new, more sophisticated store cations in smaller cities and and velvet. It includes jewelry, more about the Chico’s customer.”

Gulf to bolster its presence in the Investcorp’s Kirdar Looks to Future region, which is keen to develop its financial services activity. Kirdar’s original vision for — that’s our role,” he said. “We see a lot of specialty retail Investcorp was to create a brand By JOELLE DIDERICH And even if the global econom- opportunities as we speak. Our new financial institution to pro- ic crisis has made bank financ- pipeline is quite good, both from vide nontraditional investment PARIS — Having published his ing harder to come by, Kirdar is the London side and from the opportunities to private-sector memoirs last summer, Investcorp confident there is always another New York side. I’m pretty bullish players in the cash-rich zone. But founder, executive chairman and deal around the corner. that we can find interesting op- with sovereign wealth funds like chief executive officer Nemir “I really feel that the industry portunities,” he revealed, adding, the Qatar Investment Authority Kirdar could be forgiven for rest- of acquisition of companies is “You’ll hear more from us.” increasingly active on the inter- ing on his laurels. not going to slow down. I mean, Tung noted there are more national stage, Investcorp is look- But the Iraqi-born business- there will always be some com- players chasing deals these days, ing at many of these as coinves- man is busy plotting the next 30 pany which is ready for change with the likes of LVMH Moët tors on future deals. years for the company he found- of ownership,” he said. “We do Hennessy Louis Vuitton and Nemir Kirdar “Investcorp never had the ob- ed in Bahrain in 1982 — includ- about four deals a year, but we Kering competing with a host of jective of servicing government- ing his ambitious vision to see it cannot say we’re going to gear large private equity funds. now more eager to invest out- owned agencies,” said Kirdar. turn into the Gulf region’s pre- ourselves for four deals a year. “I think in our business we side, and I’m looking forward to “Now we have a track record, mier investment bank. We have to look at 100 [opportu- do have to work pretty hard, being in partnerships with some and we have capability that has In “Need Respect Trust,” nities] and sift through and see but I do see opportunities in of them. I am regularly talking been established, so we are con- published by Weidenfeld & which ones make sense to us, and the middle-sized transactions. to them,” Tung said. sidered among the best names Nicolson in the U.K. in July, what makes sense to us is not the There’s certainly many more “Overall, they are still test- in the world. So there is room, if Kirdar details his inspiring name of the company, but really, emerging Loro Piana-type com- ing the waters. They’re keen to the architecture of the company journey from entrepreneur in what is the opportunity there of panies around, and to some ex- do more in China, so anything is redesigned again, [for] sover- Iraq in the Sixties to the launch a turnaround? What is the role tent we look at Georg Jensen the they do outside, there has to be a eign wealth funds [to] be partici- of Investcorp, the company that needed from an investor?” same way,” he said. China angle for them,” he added. pants in ownership and benefi- would go on to buy and sell in- Kirdar’s book provides a He also welcomes the emer- Tung is also keeping an eye ciaries of Investcorp products.” dustry jewels including Gucci, glimpse of the feverish deal- gence of players from Asia, on large conglomerates that he Kirdar noted that Investcorp Tiffany and Saks Fifth Avenue. making and outsized personali- saying ones to watch include thinks are looking bloated. recently opened an office in Kirdar is keen to point out ties involved in those flagship private equity firms Trust “I think they are reaching a Riyadh, Saudi Arabia, and that although those are the deals Eighties transactions, as well Bridge Partners, Citic Private point that they cannot maximize has others in the works in Abu it is best known for, Investcorp as an unsparing account of how Equity Funds Management Co. the value of all the brands in Dhabi and in Doha, Qatar. today has most of its investments the company struggled in the Ltd., PAG Capital Partners, their stables,” he said. “My own “Relationships count a lot in in midsize firms outside the lux- decade leading up to the global Fountainvest Partners, Chinese prediction is that within the next this part of the world, and what ury sector — with the exception financial crisis of 2008 and 2009. conglomerate Fosun and invest- 10 years or so, you’re going to see we want to do is to nurture those of Danish brand Georg Jensen, Since what he termed its ment fund Hopu. more changes and a sort of de- relationships,” he said. “To which it bought in 2012 for $140 “disappointing” exit from Saks “There are several very blue- conglomerization of some of the parachute in from California million. “Being luxury is not the in 1998, the investment bank chip groups that are emerging, brand-name collectives. I think or from Illinois or from some- central factor, but recognizing has not been active on the re- and I think they’ll do more. that will be very interesting.” where, from France or from the potential of a company and tail front. But Savio Tung, They like consumer brand In the immediate future, Italy, and say there is money saying there is a locked potential Investcorp’s ceo, North America, names, and they like what they Investcorp plans to leverage its there, so let’s go and access it — here, and it needs to be unlocked said that is about to change. call ‘stepping out.’ They are history of doing business in the it’s a bit naïve and simplistic.” WWD FRIDAY, JANUARY 3, 2014 5 WWD.COM Galleria Aims to Boost Nairobi’s Luxe Factor

By ANDRE VLTCHEK

NAIROBI, Kenya — The work at the luxury Kempinski Hotel here is in full swing. Four stores are being built in the annex, which is called Galleria. To for- eigners, the annex may look modest, but in Kenya’s capital city, it is a real plunge into unknown, the first attempt to form a space fully dedicated to luxury retail. “We are trying to create a classic look for the entire area,” said Esther Moturi, guest relations manager at the Villa Rosa Kempinski Hotel. “It will be the first luxury corner in the entire city of Nairobi, ideally with at least four brand new boutiques.” As she speaks, security personnel are taking over the lobby, which has been seasonally decorated with a Christmas tree and striking white-blue lights. The president of Sri Lanka, Mahinda Rajapaksa, and his wife are returning to their suite at the hotel. Nairobi is the diplomatic, intelligence and media heart for all of East Africa. The city has a huge United Nations com- pound and is where countless banks, trading companies and nongovernmental Two Rivers’ organizations have been opening offices construction site. for decades. Nairobi’s Jomo Kenyatta

the first ones to offer a dedicated luxury lomatic blue zone in Nairobi.” The site is shopping experience. expected to contain 505,000 square feet “Luxury shops have to be in an ele- of retail, entertainment and lifestyle of- gant and enclosed area,” said Aziz Fazal, ferings; office parks; hotels, and apart- director of the Little Red Unmistakably ments, and eventually to cover 8.9 mil- boutique located at Yaya Center, on lion square feet. Argwings Kodhek Road, the store that Fazal can hardly contain his excite- for some time has been selling designer ment about the project. “There will be a clothes by Hugo Boss, Giorgio Armani luxury floor. At least 600 square meters and Ermenegildo Zegna. Little Red [6,400 square feet] of luxury retail is in Unmistakably will be one of those four pi- discussion. There will be plenty of luxury oneer stores soon moving to the Galleria. stores.…And several top architects from While the Galleria is clearly a van- all over the world are already making guard venue, there are other luxury sure that this will be a real luxury place; shopping malls and centers under con- elegant, full of marble and other expen- struction throughout Nairobi. The big- sive materials.” gest of them will be called Garden City The new Nairobi malls will be a sharp and is being built on Thika Road, with departure from the city’s current high- a shopping mall of about 500,000 square end stores, like those at Yaya Center, one The Two feet and a sizable entertainment area. of the few present-day upmarket outlets Rivers The mall is expected to attract interna- of Nairobi. These are all multibrand plan. tional fashion brands that currently are stores. And Segi and other professionals concentrated in several South African based in Nairobi are cautious about any impending luxury boom in the city. International Airport is the busiest one “Yes, there are a few new malls com- in East Africa. ing up, and it appears that big brands The city is awash with both “clean” FOR MORE IMAGES, SEE would finally arrive,” she said. “But money from trade and international based on our experience here, the goods agencies and expatriates and “dirty” WWD.com/ could remain much more expensive in money, cash flow that is pouring here retail-news. Nairobi than abroad, and those who are from the entire region, mostly brought in frequently traveling will continue shop- by corrupt East and Central African offi- ping in Paris or Tokyo.” cials and illegal traders on their periodic In addition, even as luxury brands in- outings or on shopping sprees. creasingly eye Nairobi and other African Nairobi has also become the tempo- markets, worries remain over a continent rary home for hundreds of thousands of continually wracked by turmoil, from relatively wealthy refugees from Somalia Egypt to South Sudan. In Nairobi itself, and the Democratic Republic of the there have been numerous terrorist at- Congo, two countries devastated for de- tacks over the last few years, including cades by civil wars. a grenade attack on the bus terminal, Surprisingly, given its wealth, the and the terrorist assault on the Westgate city still does not have any large luxury shopping center. The arrival building at malls or other shopping centers, not Nairobi’s international airport mysteri- even ones similar to those that can be ously burned down in August. Security is found in African metropolises like Cairo, extremely tight, and investor confidence Johannesburg and Cape Town. is dropping. Some analysts believe that “The shopping in Nairobi is limited to the country may even start experiencing the essential, though the choice has been The lobby of the Kempinski Hotel, negative economic growth. widening over the past two years,” said which will open the Galleria. Against that backdrop, Nairobi will re- Yayoi Segi, a Japanese education special- main the “servicing center” for all of East ist in a U.N. organization, who is based Africa, primarily because its infrastruc- in Nairobi. “For clothes and cosmetics, people were charged in the attack, stores. The developers of Garden City ture is significantly better than any other there is really no trusted shop that sells which was carried out by the Somalia- are promising to serve all of East Africa city’s in the region. The Kenyan capital’s quality products and brands. Most of based terrorist organization Al-Shabaab — especially, of course, its upper-class position received a further boost a few my colleagues still do their shopping in that is linked to al-Qaeda. The mall was clientele. The mall should open for weeks ago when Chinese construction Europe and Asia. Also, the prices here burnt down during the attack and the Christmas shopping at the end of 2014. companies began work on an enormous are higher and there are many counter- siege that followed. Then there is “Two Rivers,” which project that eventually will connect all of feits. One can’t really talk about ‘shop- While the Westgate was a magnet for is being constructed in one of the most East Africa — including Ethiopia, Uganda, ping experience’ in Nairobi.…Not yet.” expatriates living in Nairobi for its chic upmarket neighborhoods of Nairobi. South Sudan, the Democratic Republic of The attempt to improve the shopping cafés, its stores were mainly local fash- The developer, the Centum Investment the Congo, Rwanda and Burundi — with experience in Nairobi comes even as ion shops, and the neighborhood sur- Group, claims that “Two Rivers will be the Kenyan ports of Mombasa and Lamu. ANDRE VLTCHEK the city is still recovering from the ter- rounding it was filled with down-market 100 acres of prime property located in Most of the links will go through Nairobi, rorist attack at the Westgate mall last stores and restaurants. Therefore, Hotel the Runda/Gigiri area along Limuru where new roads, a new city railway and a

PHOTOS BY September that killed 67 people. Four Kempinski and its tiny Galleria will be Road within the highly sought-after dip- new airport terminal are being built. 6 WWD FRIDAY, JANUARY 3, 2014 beauty Lauder to Launch Lip Lineup

“From a formula standpoint, Coral, Tumultous Pink, Vengeful By JULIE NAUGHTON we wanted something totally Red and Insolent Plum. modern and unique and differ- “One day you might want to ESTÉE LAUDER is further ce- ent from anything we’ve ever be Dynamic or feel like a little The Pure Color Envy ad. menting its modern makeover offered before,” said Carullo. Rebellious Rose,” Ford added, with Pure Color Envy Sculpting “In all cases, women tell us they naming two additional shades in Lipstick, a new color line which want sculpted, curvaceous lips. the line. “This is a lipstick line it’s a symbol of the moderniza- consumers in the region, noted will bow in March. We’ve developed a formula from with attitude, and we wanted to tion of the brand. With each new Ford. “Our Asian consumers par- “We’re creating a modern the ground up to address that. leverage the names to tell a story launch, we’re tightening the vi- ticularly like slimline cases, so future for the Estée Lauder The structure of the formula is about the woman who’s using it.” sion and visualization of the that is the way we are packaging it brand,” said Jane Hudis, global almost like a lip crayon, with our Those pieces of a woman’s brand as a modern luxury icon.” for that market,” she said. brand president of the Estée proprietary Multi-Faceted Color personality will also be lever- A major digital campaign Europe is also expected to be Lauder brand. “It was extreme- Pigments creating both volume aged in the marketing, said Ford. is also in the works, which a strong region for Pure Color ly important to us that we set a and intense color. As well, anoth- Video vignettes created around will showcase the video vi- Envy. “We expect this to be a new level of aspiration with this er proprietary ingredient, Time each of the shades are being pro- gnettes and curate Twitter and major launch in Europe,” said brand. Modern Muse, our new Release Encapsulated Moisture duced, with the intention to tell Facebook comments with the Hudis. Added Ford, “The pric- fragrance, was an important step Complex with hyaluronic acid a story about the persona behind hashtag #LipstickEnvy. ing and all the luxury cues allow in that process. Pure Color Envy helps boost lips’ ability to attract, them. “We want to bring each The new lipstick packaging us to compete with very upscale is another major initiative to capture and seal in immediate shade to life,” said Ford. is another luxurious aspect, lipstick lines.” add to that movement. Lipstick and continuous hydration that Print advertising, shot by said Hudis. “The navy and gold In the U.S., the line will be is having a moment, and this lasts throughout the day. Not Mario Sorrenti and featuring shades evoke our signature sold in Lauder’s full distribu- Pure Color Envy is very much a only does it last, it’s comfortable Carolyn Murphy, will begin run- color cues, and golden tones tion of 2,200 department and luxury offering. We’re offering a for all-day wear and lasts up to ning in April fashion, beauty within the interior convey the specialty store doors. new case, a new formula, a new six hours. And it feels good on and lifestyle magazines. “Mario modern glamour and style of While executives declined attitude and a new point of view. the lips.” really gets that sexy glam feel- the brand. An internal magnet comment on projected sales, This is a transformational mo- Twenty shades, $30 each, will ing,” said Richard Ferretti, se- snaps the top into place with a industry sources estimated that ment for our brand.” be offered. Color families in- nior vice president and global weighty click, which is another Pure Color Envy could do up- The lipstick is intended to clude nudes, reds, mahoganies, creative director for Estée luxury cue. It makes the lipstick wards of $60 million at retail sculpt lips with multifaceted pinks and corals. Lauder. “That is something we fun to hold and to play with and in its first year on counter, with pigments, which deliver satu- As for the line and shade really wanted to express in this takes it beyond a merely func- about $18 million of that figure rated color. A proprietary com- names, those too were intended visual. Carolyn has a strong, tional product. This gives us an expected to be done in North plex also has been designed to to evoke an aspirational note, fierce appearance in this ad, opportunity to recruit a whole America. Industry sources esti- offer continuous moisturization, said Charisse Ford, senior vice and her persona is as an ul- new generation of Estée Lauder mated that Lauder would spend noted Anne Carullo, senior vice president of global marketing traglam film star. We wanted to customers around the world.” about $20 million globally on ad- president of global product de- for Estée Lauder, who noted that make a strong statement with In Asia, the line will get a slight vertising and promotion in the velopment for Estée Lauder. shade names include Defiant this ad, as it’s a moment where tweak to increase its appeal to line’s first year on counter. Yes to Carrots Gets Sensitive Saab Plans New Scent

to brighten skin and Ye s to Cucumbers is soothing By JENNIFER WEIL By BELISA SILVA and cooling. The Carrots Family, introduced in 2006, is the brand’s core range, as well as a personal fa- PARIS — Elie Saab has a THE YES TO franchise, which began with the vorite of Leffler’s, as evidenced by his consistently fashion-forward take for Carrot line and has since sprouted Blueberries, orange-based wardrobe. its upcoming women’s fra- Cucumbers, Grapefruits and Tomatoes offerings, is “The Ye s To fan base continues to increase, and grance L’Eau Couture. going fragrance-free. we are seeing exponential growth in terms of con- The new scent takes in- Launching this week, the new range, Ye s to sumer base, of people coming in,” said Leffler, add- spiration not only from the Carrots Fragrance Free, is meant to address the ing that because the line is unscented there is more brand’s ready-to-wear — needs of consumers with sensitive skin. universal appeal, including among men and both specifically its spring col- “ Ye s to Carrots has been such a primary driver, younger and older demographics. “This is very much lection that’s full of pale and the family is our oldest sibling,” said Ido Leffler, a universally needed concept.” green hues — but also from cofounder of Ye s To Inc. “A lot of people have very The range, which is rolling out to 20,000 doors, the notion of springtime, dry skin, irritated skin or skin that requires a little including Target, Walgreens and yestocarrots.com, explained Nathalie Helloin more TLC. These products are designed to nourish could generate upwards of $10 million in its first Kamel, vice president of and hydrate sensitive skin.” year at retail, according to industry Parfums Issey Miyake and The range, which includes five new sources. Elie Saab at Beauté Prestige products under the Ye s to Carrots Looking forward, Leffler said International, Shiseido’s category, is meant to impart nour- that the brand, which ventured into fragrance division. She Elie Saab’s latest fragrance. ishment without irritation. The the hair category in fall 2012, will noted, however, that the tra- collection includes an Intense continue broadening its horizons, ditionally springlike “l’eau” a vanilla infusion. Hydration Night Cream, Gentle primarily through research and de- scents, which can conjure Anja Rubik in a cityscape Cleansing Wipes, a Daily Cream velopment as well as online initia- up bucolic images, aren’t features in the scent’s sin- Facial Cleanser, an Exfoliating tives. relevant for the brand. gle- and double-page ad- Cleanser and a Daily Facial “One thing we don’t see slowing “So we started think- vertising, which was photo- Moisturizer with SPF 15. Priced be- down is innovation. We have got signifi- ing about how we can say graphed by Mert Alas and tween $5.99 for the wipes to $14.99 cant excitement for 2014, around ingre- spring in the city,” she said. Marcus Piggott. for the facial moisturizer, each prod- dients, also in regards to packaging,” “We wanted to have a l’eau, The new fragrance — uct’s formula includes carrot-derived beta- said Leffler, adding that Ye s To’s entry into but a l’eau that is balanced Elie Saab’s fourth since its The fragrance-free line. carotene, an antioxidant said to help skin hair has “exceeded” his expectations. “We with something that is re- signature scent made its retain its softness and protect it from environmental don’t rule any category out. And the feedback we got ally linked to a fashion DNA, debut in 2011 — is due out factors. In addition, the line was dermatologically from the hair [launch] shows us if we can figure out which is the reason why we in France and the United tested and features various naturally derived ingre- how to meet the natural criteria and deliver results created L’Eau Couture. It is Arab Emirates starting in dients like sustainably harvested bamboo (found in we can do it.” really the encounter between late January, with most of the Exfoliating Cleanser), aloe vera and shea butter. Leffler said that the line will be marketed pri- the l’eau [fragrance] segment the rest of the world follow- “The night cream is infused with avocado oil and marily through social media, sampling and other and the couture universe.” ing through April. squalene and ingredients that are meant to be used digital programs. Takasago perfumer The 30-, 50- and 90-ml. to give extreme nourishment,” said Leffler, adding “Sampling continues to be an incredible tool Francis Kurkdjian created eau de toilette sprays will that facial wipes — of which there are currently of ours that we continue to get excited about,” he the green-hued, “soft al- retail in France for 43 euros, scented versions across other Ye s To fragrance said. The brand primarily samples through the mondy floral” fragrance that or $59 at current exchange; categories — are “market leaders” for the brand. Ye s to Carrots Web site, Facebook and “Birchbox- includes in its top Calabrian 64 euros, or $88, and 89 “We are the first to have an all-natural toilette, and type companies.” bergamot essence, plus euros, or $122, respectively. having a fragrance-free option is something people In addition, Ye s To will launch a campaign on notes of magnolia, rose and While BPI executives have been asking for.” Jan. 28 to drive trial and awareness by encourag- lemon. In the middle is an would not talk numbers, in- According to Leffler, each of the Ye s To “fra- ing one million people join the Ye s To movement. orange blossom note — a sig- dustry sources estimate the grance families” has a different objective; for ex- The aim is to say “yes” to things big and small, giv- nature of Elie Saab scents — new fragrance will ring up ample, Ye s to Blueberries is antiaging, while Ye s to ing back to the community and sharing experienc- while in the base there’s an $25 million in retail sales Tomatoes is antiacne, Ye s to Grapefruit is designed es via social media. accord of green almond plus during its first year globally. WWD FRIDAY, JANUARY 3, 2014 7 WWD.COM

aside their Previse products,” said Harrington, adding that the line is gen- Alphabet Craze Moves to EE tle enough to be utilized also by cancer patients and consumers who have had IT BEGAN with a B, then a C, then a D. recommended a customized three-step ing category. “We built medical procedures. “There is nothing Then double letters. Then triple letters. regimen to help improve skin hydration, EE MarineGranules so in our products that is controversial.” Now, the alphabet cream trend is enter- elasticity, tone and texture. it could be used with As far as expansion, Harrington ing new territory with an EE offering, de- “Our [online] service is really any cleanser. It will has plans to enter markets like signed to exfoliate skin. about having a dermatologist or skin- blend and compound Australia, Canada and South America Previse Skincare EE MarineGranules, care expert at your fingertips,” said quite nicely,” he said, by 2015. He said the brand is looking launching in late March to about 150 doors, Harrington. “Everything is so personal- pointing out that it is rec- to launch a “lifestyle app” later in the including spas, medi-spas, doctor’s offices ized; it’s not one cleanser for oily skin ommended to be mixed year that would follow a user through and online, is a botanical-based marine types. We’ve embraced the idea of look- with the brand’s Purify GPS location, recommending products mousse, which can be added to a tradition- ing at geography, family history and a cleanser, which can be based on the corresponding weather al cleanser for “extra exfoliating” results. consumer’s lifestyle.” used on skin types 1 and UV index. “The idea sprang out of the fact that EE MarineGranules, which industry through 6, for best results. Harrington said he is also keeping most of our patients and clients have sources estimate could generate about “Also it is travel-ready; other categories as options, including tried, sampled and used these electron- $1 million in its first year at retail, is you don’t need replace- Previse EE textiles, cosmeceuticals, prescription- ic cleansing devices, and I know they also meant to extend and add category ment pads or batteries.” MarineGranules. only formulas and a series of profession- have gone very well,” said Sean Patrick dimension to the alphabet cream trend, The offering, which al products for salon use, as well as an Harrington, founder and chief executive according to Harrington. “We wanted to retails for $40, features ingredients after-sun body product. officer of Previse. “Clarisonic has taken have a little whimsy with these double like oatmeal, bamboo stem powder, ma- “We continue to chase down dermatol- over the marketplace in many ways.” letters,” he said. “We felt there was an rine algae extract and jojoba beads for ogists because they have been growing in Cape Cod, Mass.-based natural beauty opportunity to talk about adjacency abrasion-free exfoliation. It is designed importance, especially as they are mov- company Previse Skincare, which was products, about getting skin in its fit- to buff the skin while soothing it and ing beyond traditional clinics to become launched in January 2011, is centered on test condition. What we love about BBs the amount used can be personalized more holistic,” said Harrington, add- personalized professional-grade skin care and CCs is that they have multiple ben- for a consumer’s skin needs. Like all ing that the brand’s flagship is Marmur and sun protection. At the core of product efits and with the EE, it’s a double-duty Previse products, the formula is sensi- Medical in Manhattan. “We built this discovery is a Web site, previsecare.com, product as well.” tive-skin friendly and does not contain brand on personalization and customiza- which asks consumers targeted questions Harrington said that with the goal of silicones, preservatives, synthetic oils, tion and we see the brand going deeper about their everyday lives. After com- creating a travel-friendly, natural alter- dyes or fragrances. and wider. There is additional opportuni- pleting the consultation, clients are cat- native to a Clarisonic-type implement, “Quite a few of our clients are preg- ty to address unique skin types and build- egorized as one of six skin types and then the brand aims to shake up the cleans- nant or postnatal and don’t have to put ing awareness with skin experts.” — B.S.

blip in nail color, which buyers said they hadn’t seen since the summer. Other cat- Retailers Hope for Moderate Holiday Sales Lift egories singled out as providing some sales lifts were appliances such as power NEW YORK — Mass-market retailers Infiniti Pro by Conair’s Curl Secret online, point in beauty that had to be replaced cleansers, artificial eye lashes, red lip- banked on a last-minute surge and post- temporarily driving shoppers to stores to with $5 merchandise. sticks and certain color gift sets. Christmas traffic to nudge holiday sales get the new hot curler. Upscale retailers And, of course, Target suffered after “If there was something unique in a above last year. As retailers tally num- were out of the new Urban Decay Naked3 it reported its credit card malfunction gift set such as good colors or instruc- bers, most feel they eked out about a 3 Palette, prompting some shoppers to look topped off by its gift card problem. tions on how to use it, we sold it,” said a percent gain. for similar shades at mass. “At least there was good news for retail buyer for a discount chain. Despite efforts to kick holiday shop- Still, buyers said the holiday was doors when the postal service and FedEx At E.l.f., gift sets priced at $3, $5 and ping off as early as Thanksgiving, re- challenging and many only came out missed delivery dates,” quipped a drug- $10 sold well, including a nail cube tailers and vendors lamented that ahead because they had trimmed holi- store manager, who said he saw a nice blip brought back after a strong debut in 2012, consumers didn’t visit day buying budgets. of people rushing for last-minute gifts. Haynes noted. mass-market doors until the CRITICAL Retailers said efforts Moe Alkemade, group vice president To help offset relying on slashing pric- final countdown. were stymied this year by of consumables, sundries and seasonal at es, Markwins Beauty Products emphasized “It was a very late season, MASS the shorter selling period Walgreens, said many people dashed out exclusives and tying in products to retailer a slow start, with the major BY FAYE BROOKMAN between Thanksgiving for one last item — a move that often ben- rewards programs such as CVS ExtraCare. lift the last weekend and the and Christmas, storms efits drugstores. The chain’s research re- Surprisingly, said Eric Weeks, vice presi- Monday and Tuesday before on key selling weekends, vealed that 97 percent of consumers made dent of sales at Markwins, one of his firm’s Christmas,” said Shawn Haynes, vice pres- strong competition from online merchants an unplanned visit for a last-minute item. briskest sellers was a $30 beauty palette ident of sales for E.l.f. Cosmetics. “I don’t and a lack of vibrant new products. Off- To help, Walgreens offered a shopping under the Fergie franchise called Jet Set. know if it was the weather or consumer pricers such as TJ Maxx and warehouse guide, a gift finder tool accessible online Once again, the beauty category was confidence, but a lot of people waited for clubs like Costco also continue to ramp up or through a mobile app designed to help battered somewhat by competition from deals and as a result there was a surge just beauty offerings, giving chains new com- inspire gift ideas. other categories. Mass merchants point- before and even after Christmas.” petition for consumers. Although retailers said they were able ed to gains in jewelry and electronics. Store visits four days after Christmas Added to that, market reports were to move the fragrance gift sets they had, “It doesn’t look like it was a big beauty revealed price cuts helped clean out that some chains didn’t get merchandise they lamented a lack of new must-have business except maybe in electronics leftover merchandise. A Rite Aid in out to stores on a timely basis and missed products available to their channel. One [devices]. There wasn’t much beauty and Amsterdam, N.Y., had an almost empty fra- early sales. One vendor said it stepped in retailer said her efforts to pare back, fragrance advertising on TV either,” said grance gift set display after cutting prices when a major chain didn’t get merchan- eliminating more than 30 gift sets and two industry consultant Allan Mottus. “It was by at least 50 percent. A CVS Pharmacy dise from another supplier in time to previous vendors, helped push her sell- an e-commerce Christmas, where Wal- in Hillsborough, N.J., had bare nail-color fill a gap. One vendor left another chain through up 20 percent. Mart and Amazon slugged it out, making shelves. Bed Bath & Beyond ran out of without an important $3 and under price In color cosmetics, there was a nice most categories commodities.”

to enhance its American retail pres- Skinfix Plans Expansion in U.S. Market ence next year. Gordinier-Regan, how- ever, didn’t rule out the brand heading ers are Americans, so we have a growing The logo reinforces that “when people into the U.S. mass market in the future. By RACHEL BROWN base of consumers in the U.S.” Francine try Skinfix, they tell other people,” said She views sampling as a critical vehicle Krenicki, who joined Skinfix as vice pres- Gordinier-Regan. “It has quite a follow- to raise awareness of the brand and lift PEOPLE WITH skin problems are every- ident of product development last year ing throughout Canada, and it’s all been retail performance. In Canada, Skinfix where, and Skinfix, a natural brand that after stints in product development at through word of mouth.” doled out some 300,000 samples this year, specializes in addressing eczema, chaf- brands such as La Mer, Frédéric Fekkai In Canada, Skinfix is available at 4,000 which Gordinier-Regan said resulted in ing, dryness, rashes, redness and more, and Avon, stressed, “These conditions are doors, including Shoppers Drug Mart, a “massive bump” in sales. The brand is expanding to reach them. so global. It’s really a huge problem.” Loblaws, Sobeys and Lawtons. It competes is starting to sample in the U.S. with Skinfix’s roots are in England, where Skinfix has four products: Body Repair with the likes of Eucerin and Aveeno, and Birchbox in the first quarter of 2014. a Yorkshire merchant named Thomas Balm, Rapid Repair Balm, Diaper Rash depending on the store, has been placed Skinfix has a tight product collection Dixon originally concocted its formulas Balm and Gentle Eczema Balm. The for- in skin-care and baby aisles. This year, at the moment, but it will swell soon. A in 1850, and is based in Halifax, Nova mer two adult products are priced at Gordinier-Regan said Skinfix is on track sports balm is in the works, and Krenicki Scotia, the home of Dixon’s great-great- $18.50 for 2 oz. and $33 for 4 oz., and the to generate $6 million in revenues. If the mentioned that skin problems associated granddaughter Karen Warner, who in latter two baby products are priced at brand gains momentum in the U.S., she con- with diabetes are an area that Skinfix 2006 assembled those formulas into $9.50 for 2 oz. and $17.50 for 4 oz., and $20 tinued, “It could surpass that very quickly.” could tackle possibly as early as next year. the Skinfix line. Now owned by Amy for 2 oz. and $38 for 4 oz. Body Repair is Skinfix is aiming at prestige beauty “While eczema is our main focus now, Gordinier-Regan, a beauty industry vet- Skinfix’s best-selling product. specialty and pharmacy there are a lot of other categories we can eran who has held posts at L’Oréal, Space Upon taking over Skinfix in 2012, Offerings chains grow into where people need their NK, Jo Malone and Coty, Skinfix arrived Gordinier-Regan set out to repackage the from Skinfix. skin healed. There’s so much in the U.S. last month at C.O. Bigelow brand to make sure its message was clear going on from the neck down and is pressing forward, with additional and targeted. With assistance from Shari that skin-care brands aren’t American distribution expected next year. Creed of Creed Strategic Imaging, really addressing,” she said. Even before it entered retail in the Skinfix transitioned from a brand “We are the experts in irri- U.S., Americans suffering from skin is- that appeared made for apothecaries tated skin, so everything we sues were finding Skinfix. Gordinier- only to having a wider appeal with formulate going forward will Regan noted, “Most of our online purchas- sleek tubes and a speech bubble logo. have that in mind.” 8 WWD FRIDAY, JANUARY 3, 2014 WWD.COM BEAUTY

Products from Desigual Ramps Up Beauty Stemology. Each bottle is designed with a collage By FAYE BROOKMAN of colors in a “galactic ball” shape. The three fragrances are available in 1-oz., DESIGUAL, the fast-growing Barcelona- 1.7-oz. and 3.4-oz. versions. All retail for Stemology Makes Its U.S. Debut based retailer and wholesaler, is import- less than $80. 3.5-oz. Cell Refresh Foaming Facial Wash ing its new fragrances into the U.S. with The total Desigual brand is on track By RACHEL BROWN for $19, 3.5-oz. Cell Refresh Hydrating plans for an eventual full-out assault on to generate $1 billion in global sales in Cleanser for $19, 1.7-oz. Cell Rescue Active the beauty category. 2013. Its products span women’s, men’s, MANY skin-care brands have latched onto Gel Toner for $25, 1.5-oz. Cell Revive Packaged in the wildly colorful motif children’s, accessories, footwear and the promise of stem-cell science to reverse Serum Complete for $189, 1-oz. Cell Revive associated with Desigual, three scents home, and are carried in 347 Desigual aging, but Hal Simeroth argues they’ve de- Brightening Serum for $99, 1-oz. Cell — Sex, Fun and Love — will make their stores worldwide and in 11,000 whole- livered little. His new natural skin-care Revive Smoothing Serum for $99, 0.5-oz. debut in the U.S. early in 2014. The ex- sale doors. In the U.S., the brand is also brand, Stemology, is out to change that. Cell Revive Eye Serum Complete for $69, pansion into the 15 American doors fol- featured in department stores such as Simeroth explained that the stem- 1.76-oz. Cell Renew Moisture Complete lows what Manel Jadraque, chief execu- Bloomingdale’s and Lord & Taylor. cell by-products that have been used for for $75, 1.76-oz., Cell Reboot Ageless Mask tive officer of Desigual, called a “very Desigual entered the U.S. in 2009, and beauty purposes often can’t penetrate for $85 and 1.7-oz. Cell Reboot Exfoliating successful” launch in November in Spain. that business, which became profitable the skin and don’t have the power to Skin Polisher for $35. “It’s a very compre- Jadraque added fragrance is the “first in 2012, is expected to produce upwards reinvigorate mature skin. He stressed hensive line. We really tried to think of ev- step” into a full-color presence, especial- of $60 million in sales when tallied for Stemology’s so-called StemCore-3 tech- erything,” said Jacobus. ly nail lacquers, to complement the bold 2013. The U.S. volume is equally split nology doesn’t have those downsides. Cell Revive Serum Complete is hues and patterns featured in the appar- between its retail and wholesale opera- Rather than containing DNA or unwieldy Stemology’s hero product. “It’s designed el and home collection to build multiple tion. The company’s goal is to accelerate stem cells, it has cytokinal peptides, to address 12 signs of aging. It’s not just sales transactions. U.S. growth, especially with freestanding growth factors and proteins derived from a brightener or just a wrinkle product,” “Today we know having a perfume stores. Five more units are on the docket human adult stem cells, plant stem-cell said Jacobus. Simeroth elaborated, “The makes the brand more complete,” said to open in American by 2015. and botanical extracts, and antioxidants. early impact you will see is softness, Jadraque. “We know [fragrance] is Harvested from colonies of adult increased moisture, pore refinement, highly competitive and only 10 per- stem cells, Simeroth, the cofounder and tightness and redness being reduced. In cent succeed, but we think we are chief technical officer of Stemology par- four to six weeks, there is improvement doing something brand new and ent company Mission Viejo, Calif.-based in wrinkles and fine lines.” breaking rules. Our brand is DermaTech Research, who describes Stemology certainly isn’t cheap. The an attitude.” Stemology as the only antiaging brand prices are the result of a costly process To ensure Desigual has harnessing both plant and adult stem-cell to culture adult stem cells. Jacobus the right juice, each fra- advancements, said, “We are getting very also pointed out that, on a per-ounce grance was created with a small peptides. They provide signals to basis, Stemology is in line with its skin- proven resource — Sex by your skin stem cells that causes your skin care competitors and is packed with a Daphne Bugey, known for to renew itself. We speed up the renewal greater number of active ingredients Kenzo and Issey Miyake; Fun process, so it helps you look more like than products from those rival brands. by Christophe Raynaud, who you did when you were younger.” She added, “What we are seeing is that was behind Guerlain and Paco Simeroth’s interest in skin science people are ready to trade up, especially Rabanne, and Love by Fabrice was sparked in the early Aughts when at dermatologists and plastic surgeons’ Pellegrin, a well-known collaborator he worked with universities on emerg- offices, and medi-spas.” on hits such as Diesel and Jo Malone. Three new Desigual scents. ing technologies, including one at the Stemology is being distributed through University of Texas, Austin, on artificial the professional skin-care channel and skin for burn victims. “That research is planning to have a team of roughly 50 didn’t pan out, but I learned a lot about sales representatives in 2014 to grow its the use of stem cells for wound heal- presence in spas and doctor’s offices. “For ing,” he said. Those lessons eventually now, we are really focused on building the led to Stemulance, a professional anti- professional channel. They have really aging skin-care line Simeroth cocreated embraced us. They love the technology,” some three years ago fueled by an adult said Jacobus. “It doesn’t mean that there stem-cell extract combined with liquid isn’t a retail play down the line.” collagen tri-peptides, antioxidants and In its first year, Stemology expects to hyaluronic acid. Stemology picks up generate at least $8 million to $10 mil- where Stemulance left off. lion in revenues. Looking further into To assist in the development and mar- the future, Simeroth conjectured, “It’s keting of Stemology, DermaTech brought easy to conceive of this as a $100 to $200 on board former Murad chief marketing million business in four to five years.” officer Lori Jacobus. Jacobus came up Stemology’s product pipeline is full with the name Stemology to associate of stem-cell innovations it can bring to the brand with stem-cell science and de- the beauty segment, and those innova- signed Stemology’s mostly white packag- tions could target hair as well as skin. ing that has touches of green and blue, “We are committed to bringing cutting- most notably in a leaf logo that appears edge stem-cell research to the market,” molecular on one side and like a real leaf said Jacobus. “We know that stem-cell on the other to represent the brand’s con- science has huge applications, not just nection to science and nature. in skin care, and we have intentions of Stemology is starting with 10 products: playing in other categories.” Great Clips Names New Executives and will “establish visibility” among By JAYME CYK Great Clips’ thousands of franchisees across the U.S. and Canada. GREAT CLIPS is making changes to top Rob Goggins, former senior vice pres- management for the New Year. ident of real estate and development, Effective Jan. 1, former Great Clips will replace Hockett in the role of chief FEBRUARY 11, 2014 chief operating officer Steve Hockett operating officer and will oversee busi- was named president of the 30-plus- ness services and operations. year-old franchise and salon brand. Hockett, who told WWD he joined the Hockett replaced the company’s company in 1988 after unsuccessfully at- president, Charlie Simpson, who will tempting to operate a franchised salon stay on part-time as an executive advi- in Minneapolis-St. Paul, said he learned sor focusing on executive development valuable lessons from his experience. and strategic issues. He will also serve “I believe my lack of success as a @WWDSUMMITS • #WWDDIG • WWD.COM/DIGBEAUTY on the Great Clips Inc. board. franchisee motivates me to provide the “Steve has played an integral part in our direction and resources all of our Great To attend: [email protected], 212.630.4212 current growth,” said Rhoda Olsen, ceo of Clips franchisees need to be profitable,” To sponsor: [email protected], 212.630.4824 Great Clips.“[Steve] believes in the strength said Hockett. of the franchise model and understands Assuming the role of chief operating that growth can only come by working to- officer in 2012, Hockett is credited with SPONSORED BY: gether to make franchisees profitable.” “driving franchise profitability and growth In his new post, Hockett will concen- reaching billion-dollar-brand status. And trate his efforts on developing the se- the milestone of reaching the count of nior leadership team, according to the 3,500 salons in the U.S. and Canada,” ac- company. Hockett will report to Olsen cording to a company statement. A HOLIDAY ON THE SLOPES: Madonna dons Bogner for a Switzerland ski trip with her family. WWD STYLE PAGE 11 MEMO PAD

HEARST’S DIGITAL AGE: What better way to ring in the New Year than with a letter to employees? At least that’s what Hearst Corp. president and chief executive officer Steven Swartz must have thought. t In an everything-is-rosy internal memo dated Dec. 31 but sent out Thursday, Swartz, who succeeded Frank Bennack Jr. as ceo in June, laid out his plans to carry t on with Hearst’s digital, business and L’ÉCLAIR television initiatives. DE GÉNIE: Those initiatives have been the focal Christophe point for growth, according to Swartz, Adam’s who said roughly 60 percent of Hearst’s Rouge GÂTEAUX revenue is derived from “sources other Baiser than advertising revenue.” He added that THOUMIEUX: éclair. Jean- more than 20 percent of the company’s François t t revenue comes from outside the U.S. Piège’s When asked for clarification on the chou-chou. breakdown of business derived from advertising, a Hearst spokeswoman said, MICHALAK “Approximately 40 percent of total Hearst TAKEAWAY: Corp. revenue is from advertising.” t tChristophe Addressing its business wing, the Michalak’s K7. ceo mentioned Hearst’s recent slew of acquisitions of health care and financial services research data companies. Swartz also touted the launch of FYI, a channel owned by its A+E network that PÂTISSERIE will broadcast CYRIL lifestyle- Après LIGNAC: oriented One of programming. Lignac’s Another creations. launch that has garnered t media attention is SEC, a cable channel derived from Le Cronut t ESPN. The new network Parisian chefs’ attempts to outdo New York’s just tapped Tim Tebow as a croissant-donut confection has the French capital in college football the grip of a pastry craze. For more, see page 10. analyst, given his NFL career appears to be over. On the magazine front, Swartz trumpeted the group’s GAIL OSKIN/WIREIMAGE Steven “ambitious upgrade” of FAU Swartz all its Web PHOTO BY and mobile

LAURENT products for its various publications, BY beginning with cosmopolitan.com and elle.com. These upgrades will be

OTHERS fully unveiled this year, as will the development of other key partnerships. For instance, Cosmo has linked with t the William Morris Endeavor agency

ALL GABARRA; for its conference business, and & Seventeen is working with DreamWorks’ GOFF AwesomenessTV to produce streaming LE t

BY videos aimed at the teen demographic. DES GÂTEAUX Swartz concluded that Hearst created ET DU PAIN: Digital Studios, which allows it to build VICTOR Claire

ET and test new digital products. Those Damon’s initiatives will be spearheaded by

HUGO Lipstick cake. Hearst’s digital team, which consists of new hires Troy Young, former president of Say Media; Todd Haskell, ex-head of digital advertising at The New York Times, and DHELLEMMES; Mike Smith, forbes.com’s former president. HUGO ET “To truly succeed we can’t just offer THOMAS VICTOR: our customers digital products; we have BY LA PÂTISSERIE Hugues to become a more digital company in the DES RÊVES t t way we operate our businesses every

PHOTO Pouget’s Philippe pineapple chou day,” Swartz said. t t Conticini’s for Chloé. Which is exactly what every other LIGNAC Tarte Tatin. media company is trying to do.

CYRIL — ALEXANDRA STEIGRAD 10 WWD FRIDAY, JANUARY 3, 2014 eye WWD.COM Christophe Michalak MICHALAK TAKEAWAY AND MASTERCLASS Sugar Rush The Hôtel Plaza Athénée may be closed for reno- vation, but Michalak is busy. When he is not on FANCY FRENCH PASTRY SHOPS ARE SPROUTING all over the air, writing books or posing for advertising Paris. In the last few months, top chefs including Jean-François campaigns, he is at his new pastry boutique and Piège, Christophe Michalak, Cyril Lignac and Alain Ducasse have school, Michalak Takeaway and Masterclass. “I opened pastry shops, while La Pâtisserie des Rêves gained a new wanted to create my own style,” the chef said. The Paris location, ahead of the opening of a London outpost in early result is a nutty universe with his K7, chocolates in February. Meanwhile, Rue du Bac on the Left Bank has become the shape of video or audio cassettes. “I was born Sweet Alley: two doors down from La Pâtisserie des Rêves is the in 1973, hence the audio and video cassette,” new Des Gâteaux et du Pain, with its luxury black marble decor, he said with a laugh. His boutique in the 10th ar- sitting just across from a new Angelina boutique and a stone’s throw rondissement also offers a range of verrines, like a from La Grande Épicerie. Multiflavored macarons are clearly not gluten-free chocolate mousse dubbed Kosmik. the new game in town. Pastry chefs are coming up with creations that are sparking a following among foodies to rival the Stateside Michalak Takeaway and Masterclass craze for Dominique Ansel’s cronut. 60 Rue du Faubourg Poissonnière A case in point is Piège’s chou-chou. “It’s like Russian dolls: a puff inside a puff,” the chef said. Parisians are also lining up for Christophe Adam’s newfangled éclairs. On weekends, he sells PHOTO BY FRANCK MURA 2,500 a day, and production is limited, so latecomers risk leaving empty-handed. “In times of crisis, people indulge with sweets,” offered Michalak. He joined forces with Adam eight years ago to create Les Sucrés, or Gâteaux “The Sweet Ones,” a conclave reuniting the crème de la crème of Thoumieux pastry chefs every quarter in different locations. “We’re just a bunch GÂTEAUX THOUMIEUX of friends gathering to make cakes and have fun,” Michalak said. Last month, Piège opened his first Mostly in their 40s, the chefs grew up together professionally (Adam, pastry shop across from his Thoumieux Michalak and Des Gâteaux et du Pain’s Claire Damon worked at restaurant on Rue Saint-Dominique. Fauchon, the fine-food retailer, as did their pal Ansel). The place is designed by India It doesn’t hurt that some of these purveyors of sweetness are Mahdavi. In addition to the chef’s easy on the eye themselves, drawing interest from television and chou-chou, there is a selection of tradi- fashion alike: Gontran Cherrier, the baker from Montmartre who tional French pastries. is expanding rapidly in Asia, has signed up for the second season of his daily weekday show “La meilleure boulangerie de France,” Gâteaux Thoumieux or “France’s Best Bakery,” on French TV channel M6. Michalak 58 Rue Saint-Dominique also has a big slice of airtime on public channel France 2, with two

programs — including “Qui sera le prochain grand pâtissier?” or PHOTO BY ANNABELLE SCHACHMES “Who Will Be the Next Top Pastry Chef?” — and was chosen by French label IKKS to front its winter campaign. — LAURE GUILBAULT Christophe Adam Hugo et Victor L’ÉCLAIR DE GÉNIE Adam has given the traditional French éclair a makeover using flavors like salted caramel, yuzu and piña colada. Among his 84 creations: the Rouge Baiser, an éclair with a high-shine red glaze made of raspberries; the Xmas Mama, an éclair featuring a digital print of a pinup girl, and the Black Éclair, a tribute to the Little Black Dress, with dark chocolate and white truffle. Prices range from 5 to 8 euros, or $7 to $11 at current exchange. In addition to two Paris locations (in the chic 16th arrondissement and in the Marais), there are new locations on tap in Dubai and Japan. New York may follow, Adam says.

L’Éclair de Génie 14 Rue Pavée HUGO ET VICTOR

Rumor has it Kanye West stopped by at Hugo et Victor’s most PHOTO BY FRANCK MURA recent location at The Webster during Art Basel Miami Beach. He might have got the tip from Sofia Coppola or Catherine Deneuve, who have been to Hugues Pouget’s Paris store on Boulevard Raspail. There, they can get an assortment of choco- late spheres that comes in a writer’s notebook box, which has LA PÂTISSERIE DES RÊVES become the chicest gift to bring when invited to dinner in Paris. Philippe Conticini’s whimsical pastry shop is fa- Earlier this year, Hugo et Victor made three creations for Chloé’s mous for its tarte tatin and Paris-Brest, another 60th anniversary, including a pineapple chou pastry inspired by French staple, this one with praline-flavored the Ananas T-shirt that Stella McCartney designed for the label. cream. Since the fall, there is a new location in the Beaugrenelle shopping center. In the wake Hugo et Victor of its Asian expansion, La Pâtisserie des Rêves 40 Boulevard Raspail is slated to open in London in early February.

La Pâtisserie des Rêves Beaugrenelle shopping center La Pâtisserie Cyril Lignac 12 Rue Linois La Pâtisserie des Rêves in the Beaugrenelle LA PÂTISSERIE CYRIL LIGNAC shopping center. Parisian hipsters have a preference for the chef’s first boutique in the 11th arrondissement, with its simple, industrial look. DES GÂTEAUX ET DU PAIN But those who live in the The boutique has black marble coun- west of Paris go to the new ters and perfect lighting. Tourists are boutique, featuring mold- fond of the Lipstick cake, with its ing and paintings. Fashion high-shine coating that matches the aficionados head there for luxury setting. Locals have a penchant a sweet fix after visiting for the numerous varieties of bread. the Azzedine Alaïa exhibit, On whether she adapts her offer to on display at the neighbor- different cultural tastes, pastry chef ing Palais Galliera through Damon simply says, “A Kelly bag re- Jan. 26. mains a Kelly bag.”

La Pâtisserie Cyril Lignac Des Des Gâteaux et du Pain 2 Rue de Chaillot 89 Rue du Bac DERET YANN Gâteaux et du Pain PHOTO BY WWD FRIDAY, JANUARY 3, 2014 11 WWD.COM

Financial Guard said. All four have been current mood and movement of the arrested and charged with possession of brand. Launched at eddieborgo.com, the FASHION SCOOPS stolen goods and the import and storage of redesign boasts an easier-to-navigate counterfeit merchandise. e-commerce functionality, exclusive On Tuesday, Il Messaggero, a daily pieces and colorways, and a bigger range newspaper based in Rome, reported of product, including greatest hits like the BRANDELLI’S BACK: Carlo Brandelli has icon barely bared more than her eyes, that the fake shoes were now being best-selling fall 2010 collection — the one returned to Kilgour. The designer, who snowplowing the days away. Three of distributed to residents of Sardinia, inspired by spiders, orchids and other quit as creative director of the Savile Row her children — Lourdes, Mercy and David which was hit hard by floods in natural shapes. “People kept asking us tailor in 2009, will return to Kilgour in the — were easier to spot in North Face November and continues to struggle in for it,” Borgo said. “And frankly, because same role with a spring collection that will jackets, while her teenage son Rocco the aftermath. — CYNTHIA MARTENS we move from collection to collection make its debut on Mr Porter in February. went undercover in a camouflage jacket. and follow a calendar, we never really The tailor’s new owners, No. 14 Maybe his military-inspired look NEW TEAM: Alongside its recently unveiled considered reproducing those past Savile Row, which acquired Kilgour in reminded him of another family outing in collaboration with Jonathan Saunders, collections, but now the Web site will give September, approached Brandelli to August, when he and his style-conscious British knitwear label Lyle & Scott has us a chance [to do so].” return to the brand, the company said. No. another partnership set to launch for fall. The company also revealed its new 14 Savile Row is owned by Fung Capital, The heritage men’s label is partnering brand color — an inky bottle green, the private investment holding of the with David Keyte, the founder of Universal chosen for its connection to luxury and Fung family. Separately, the Fungs are the Works, a London-based men’s label that heritage — which will be represented controlling shareholders of the publicly spotlights rugged, workwear-inspired throughout the site and incorporated listed Li & Fung Ltd. and Trinity Ltd. pieces, to create an 11-piece capsule on all of the brand’s packaging. “We’ve To mark the brand’s relaunch, later collection. Lyle & Scott said that the been pinned over time as this rock ’n’ this month the label will release a film capsule line will be made up of knitwear, roll jewelry brand, but we’ve carved a on Showstudio.com and on Kilgour’s polo shirts, flannel shirts and woolen niche for ourselves in the marketplace soon-to-launch Web site, kilgour.com. accessories, and noted that Keyte has in that we’re not a fine jewelry company The film, which was conceived by taken inspiration for the collection from or a costume jewelry company, but Brandelli and shot by photographer Nick the Lyle & Scott designs he wore as a youth sort of in between,” Borgo said, adding Knight, is an abstract piece that revolves in the late Seventies and early Eighties. that retailers often don’t know where around the idea of how the bespoke Wholesale prices for the collection to place his brand on jewelry floors. process involves building and creating begin at 18.50 pounds, or $31 at current “I like the fact that we’re this modern layers. Tara Ferry, Bryan Ferry’s son, has exchange, for a hat, and rise to 59.50 imbalanced company.” created the soundtrack to the film. pounds, or $99, for knitwear. The The brand’s former e-commerce site While the spring line draws FOR MORE collaboration will be shown in a static made up less than 10 percent of its total on a number of Brandelli’s past SCOOPS, SEE presentation at next week’s London sales, but the company expects the new site collections for Kilgour, the label’s Collections Men shows and at Capsule in to be a significant driver of growth in 2014. first entirely new collection in WWD.com. Madonna on Paris from Jan. 17 to 19. — N.J. Up next could be a full-on launch INFPHOTO.COM four years will bow for fall. That the slopes into fine jewelry (Borgo produced a collection will take its cues from in Bogner. BIRTHDAY BORGO: Eddie Borgo’s brand is capsule collection of fine jewelry for Lane

Kilgour’s style signatures, such as the PHOTO BY turning five with a virtual makeover. Crawford in October), as well as leather house’s one-button suit, unstructured “I wouldn’t go so far as to say it was an and home goods. “I want the Web site to jackets and fly-fronted shirts, in a palette relatives suited up in camo jumpsuits for afterthought, but when we launched five be a launching pad for new categories, of ink navy, grays, white and black. an afternoon of paintball to celebrate his years ago, our Web site wasn’t something like home and objects,” Borgo said. “We’ve In addition, a new home for the 13th birthday. — ROSEMARY FEITELBERG that we invested a lot of time and effort already done a pencil case, a letter opener, house will open on Savile Row in June. into,” said the designer, who wanted the paperweights and jewelry trunks.…I Designed by Brandelli, the new flagship SHOPBOP LAUNCHES APP: Shopbop new site, designed with Magnus Berger would like to see the Web site become a will have an architectural feel, the launched its first iPhone application and Tenzin Wild of image and branding platform for not only jewelry, but for an label said, and will feature a concealed this week. Available through all Apple agency Berger & Wild, to reflect the entire accessories brand.” — K.G. bespoke room. In keeping with Kilgour’s iTunes Stores internationally, the app British heritage, the flagship will be carries over features from the Web site, fashioned in English materials such as including personalization options My silver granite, lime-tinted glass, gray Hearts, My Wish List and My Designers, limestone and steel. — NINA JONES and features push notifications for sales and low inventory. Items can be filtered HONOR BOUND: Yves Carcelle, vice by price, and the app was designed with president of the Fondation Louis 1.5x product zoom, as opposed to 1x Vuitton pour la Création and former zoom on the Web site. — JESSICA IREDALE chairman and chief executive officer of Louis Vuitton, was made an Officer of NEW YEAR, NEW N+TC: Nike’s updated the Legion of Honor, France’s highest N+TC app, which launched Tuesday civilian decoration, on New Year’s Day. for Nike Training Club’s nearly 11 Anthony Chalhoub, ceo of the Chalhoub million members, comes just in time small space Group, and Guerlain perfumer Thierry Wasser for annual New Year’s resolutions. The were both made Knights of the Legion of upgrade boasts new features such as Honor in the annual list. more than 100 customizable Meanwhile, Down Under, workouts, four-week Karen Walker rang in the programs to meet specific New Year with a new title goals, milestone rewards — Companion of the New that will be shareable via Zealand Order of Merit. The social media and a library order, established by Queen of regimens inspired by Elizabeth II in 1996, recognizes professional athletes, kicked those distinguished by their off by Maria Sharapova’s talents, contributions or 15-minute “New Year’s merits in any field. Walker, Crush” workout. a native of Auckland, was The new N+TC will also first made a member in 2004 feature Nike+ Running for her services to fashion integration and NikeFuel design. Her new appointment, enablement, helping athletes revealed during the Queen’s better measure their workouts. Big New Year celebrations, The app is free to download on signifies a rise in rank. iOS and Android in English, “It just makes you pause Spanish, Italian, Chinese, for a moment and consider The N+TC app. Japanese, Russian, French one’s own achievements, and German. — KRISTI GARCED which I don’t normally do,” Walker told Business local New Zealand press following the FINDING FAKES: Over the holidays, Rome’s appointment. “I’m normally thinking, Financial Guard uncovered a warehouse ‘What’s next, what’s next?”’ containing 57,000 pairs of fake Nike, In the field of fashion design, Trelise Adidas and Hogan shoes worth about WWD Marketplace is the premier destination Cooper and Francis Hooper were also 1.4 million euros, or about $2 million at honored, receiving the status of Dame current exchange, the Italian financial for the industry’s classified and career listings. Companion and Member, respectively. police said. The Fiumicino branch of the — JOELLE DIDERICH AND LAUREN MCCARTHY Guard discovered the illegal operation after following a car with a Bulgarian MADONNA’S CARRY-ON: During her license plate on the Milan-Naples highway. family’s recent ski vacation in Gstaad, “From the early stages of the Switzerland, Madonna looked every investigation, it emerged that the 800.423.3314 bit the ski bunny bundled up in a fur- warehouse was connected to four people trimmed hooded Bogner jacket. Her — three Moroccans and a Chinese citizen assistant picked up the black Mila D — probably the intermediate link in a wwd.com/marketplace down jacket from Bogner’s store in distribution chain run by organized crime New York’s SoHo last month. The pop leaders on the outskirts of Naples,” the

12 WWD FRIDAY, JANUARY 3, 2014 WWD.COM ’’ Macy’s did renew the agree- ment it had with MSLO months Macy’s and Martha Stewart Settle later, even after it filed its law- suit against MSLO. {Continued from page one} MSLO and Penney’s revised the people in the business have.” stand in February, he stuttered According to Lundgren: weren’t heard until August. their partnership agreement in Epner, who said that “most in response to whether he still “This is a very important busi- The three companies became October, essentially reversing of the Macy’s battle is done,” had a friendship with Stewart. ness to us. I don’t have an an- embroiled over Martha Stewart- the bulk of the original deal they noted: “What this agreement He said, “We were, we were, we swer of what to do if I don’t have branded shops-in-shop at Penney’s signed. There’s also now a more tells us is that when the dust were friends. I told my team to Martha Stewart brands in our stores in a deal that had been focused range of product catego- settles, Martha Stewart is still prioritize her business.” home [division]. I don’t have a inked by Penney’s former ceo Ron ries over a shorter period of time, married to Macy’s.” He also said he was “shocked substitute.…I don’t have a per- Johnson. Penney’s signed the deal through June 30, 2017, versus the While the two companies are and blown away” by Stewart’s sonal relationship with Martha even though Stewart already had original term that would have Stewart. I haven’t responded to her own line of exclusive branded expired in 2021. And the product her since that phone call and I home categories at Macy’s. MSLO’s categories that were never in dis- don’t intend to.” contract with Macy’s was signed in pute, and are now Penney’s do- What this agreement tells us is that As for possible insight on 2006, which the department store main, are in window treatments Stewart’s decision to partner with said gave it the exclusive for the and hardware, lighting, rugs and when the dust settles, Martha Stewart Penney’s, she said during her testi- cookware, bedding and bath cate- holiday and celebrations. MSLO mony: “I love Macy’s. I’ve shopped gories. MSLO’s deal with Penney’s will receive design fees and guar- is still married to Macy’s. at Macy’s since I was a young was inked in 2011, under which anteed minimum royalties. child. Macy’s has been a fixture the retailer also bought 11 million Mitchell Epner, counsel to the — MITCHELL EPNER, WILK AUSLANDER in our home. Macy’s has changed MSLO shares for $38.5 million. law firm Wilk Auslander, said, a lot over the years.…As a com- In addition to suing Penney’s for “It’s been clear all along that the pany, we couldn’t survive without interference of contract, Macy’s judge wanted, and still wants, the still working together, it wasn’t call to him regarding the deal growth.…Macy’s is a $300 million wants to bar Penney’s from sell- parties to settle this, and that if clear if the home doyenne and with Penney’s, and stated that business for MSLO. I don’t want it ing products designed by Stewart, he was called in to do the divid- Lundgren have managed to per- he had hung up on her, noting to go away, but I thought our busi- whether her name appears on the ing, he could not have done it sonally bury the hatchet. that he had never hung up the ness would be much bigger than product line or not. with the sort of knowledge that When Lundgren took the phone on anyone’’ before that. $300 million after five years.” China Travelers Get More Independent Costume National {Continued from page one} borders. [It’s] an increasing trend within a certain time frame to pull Launching New Line children. They also tend to plan we’ve seen in the past three, four up to the store,” said Lu, explain- trips months in advance and stay years, and it’s really starting to ac- ing how many of them already for- looks from the first Costume in one location longer, according celerate,” he said. mulate their own opinions about By ALESSANDRA TURRA and Costume collection will to a recent trend report from travel The majority of independent certain brands and target the ones be unveiled at Florence’s intelligence company Skift. outbound travel remains in Asia, to they know and trust. MILAN — Costume high-end boutique Luisa In the first five months of the places such as Hong Kong, Korea Brands that already have a National is launching a Via Roma during the three- year, the number of Chinese people and Thailand, but other key mar- presence in China might have an new collection, called day Firenze4Ever event traveling abroad rose 17.3 percent kets now are Los Angeles and New easier time luring Chinese tourists Costume and Costume. dedicated to fashion blog- to 37.5 million, according to the York City. Boston and Hawaii are abroad, according to Skift’s Trivett. The new brand will gers, closing on Monday. study. It said 83 million Chinese shaping up as emerging destina- “Before [consumers] get on replace C’N’C Costume The entire lineup is being traveled abroad in 2012, spend- tions. In Europe, Paris, London and the plane, the brand needs to be National, the company’s wholesaled at the brand’s ing $102 billion. The government Frankfurt are popular, said Brennan. the brand of their dreams, and younger sister to the designer Milanese showroom from expects the number of Chinese Christine Lu, chief executive retail presence in China helps,” line. Launched for fall 2004, Thursday and then in Paris, outbound travelers will exceed officer of luxury travel company said Trivett. C’N’C was produced under Düsseldorf, Amsterdam, 100 million by the end of this year, Affinity China, noted that indepen- Zhang, the tourist from Tianjin, license by troubled Italian Hong Kong and New York. according to Qunar.com, one of dent travelers are interested in cus- said she was particularly impressed manufacturer Ittierre SpA. According to Carlo China’s leading travel search en- tomized experiences like private when the staff of a Cartier store in “Compared to C’N’C, Capasa, the company gines. Qunar estimates that more shopping or invitation-only events. Italy offered her Champagne. But which was very focused on aims to open Costume and than 400 million Chinese will travel “[Independent travelers] are it’s not always like that, she said. sportswear and denimwear, Costume shops-in-shop and abroad over the next five years. sophisticated and already well- “In Paris, you have to queue up this new line will be more freestanding stores across Nearly half of Chinese indepen- traveled,” said Lu, explaining how outside the store and inside the store, contemporary and Web- the U.S., China, the Far East dent travelers spend 9,000 it felt like a big outlet mall…it oriented,” said Costume and Asia-Pacific, as well renminbi, or $1,530, a trip, was not nice. They were really National chief executive as Northern and Eastern more than the average arrogant and pretentious, the officer Carlo Capasa. Europe. The first Costume tourist, who spends 7,500 sales ladies,” she said. Designed by Costume and Costume boutique will renminbi, or $1,275, the A new tourism law in China National creative director open in Nanjing, in Eastern

Skift study said. China’s IMAGES might prompt even more Ennio Capasa, Costume and China, in February. “It will wealthy are driving out- Chinese to ditch group travel. Costume men’s and women’s show a new concept spe- bound travel, and more of The new law, a form of con- collections will be licensed cifically designed for the them are hitting the mil- sumer protection action that to Indian company FFI brand,” Capasa said. “It will lionaire mark every year. kicked into effect in October, Global, which operates two have an unfinished, minimal The average age of a mil- Many from outlines harsh fines for abu- factories in Italy, in Tuscany and sleek look, evoking an BUREAU/AFP/GETTY lionaire in China is 35, ac- China have sive tour operators, who are and the Veneto region. art gallery.” cording to China Luxury traveled abroad traditionally known to sell “We have decided to sign A number of the label’s MARTIN

Advisors, a company that for lower prices BY packaged tours below cost in a five-year licensing agree- key pieces will be sold in helps brands enter the on luxury items. an effort to recoup their losses ment with FFI because Costume National stores

China market. PHOTO through kickbacks and com- we are a small company in Milan and New York. “Ver y few Chinese missions from shops. Since the and we have to focus on In addition, the have passports, yet it is still the those returning to cities such as law came into effect, travel agencies the production of the company will put an biggest tourism source country,” Paris or New York for the third or have increased the prices of their main line,” said Carlo emphasis on e-com- said Vincent Trivett, author of the fourth time are looking for access. tours in order to meet profit mar- Capasa, who re- merce, launching a Skift report, titled “Rise of the The challenge for retailers, gins, making them less of a bargain. vealed that Costume directly operated Chinese Independent Traveler.” Brennan said, is how to engage Stories of organized tours’ un- and Costume col- online store dedi- Shopping is a top priority for these travelers who aren’t with expected detours and add-ons, lections “will cated to the new Chinese travelers since foreign the pack, but are renting their own forced shopping trips and being show the same contemporary luxury goods — ranging from cos- cars, and booking their own ac- locked in stores until a certain minimal, sexy and brand. Costume metics to automobiles — are much commodations and entertainment. amount of merchandise was pur- edgy look which and Costume more expensive in China. There Small groups consisting of four to chased are common, said China characterized is expected to are hefty Customs duties of up five people are most common. Luxury Advisors’ Brennan. More Costume National generate 50 mil- to 65 percent, in addition to con- Affinity China’s Lu said many recently, footage of a Chinese tour collections in the lion euros, or $68 sumption tax, which can go up to independent travelers are travel- guide threatening to stab tourists Nineties.” million at current 45 percent, according to a KPMG ing for a host of reasons, mainly if they didn’t shop enough went The line will offer exchange, in reve- study, analyzing the global reach for investment, immigration or to viral, becoming another horror a range of daywear nues in six seasons, of China’s luxury market. check out colleges for their kids. story to stack onto the growing list options, including Capasa said. More affluent Chinese are But they also want to experience of complaints against underhand- Ennio Capasa’s sig- He added that, “partially immigrating,” said Sage something off the beaten path ed tour operators. nature bomber and starting from the Brennan, cofounder of China when they’re away. “If a consumer complains, biker jackets, which spring 2015 col- Luxury Advisors, during an online “So what we’re finding out now they can come back and sue will be mixed and lection, Costume seminar in November about this now is, and to the disappointment those companies where they re- matched with more and Costume’s col- new travel trend. of luxury brands, independent ally never had a law behind them elegant styles, such lection will be ex- “[They’re] becoming global citi- Chinese travelers are more diffi- that could back them up if they as tuxedo jackets panded to include zens essentially, buying real estate, cult to market to because they’re wanted to do something like that,” and sharp-cut suits. accessories pro- sending their kids to school in the not all on a bus so you can’t devel- Brennan said, adding how some A small selec- A look from duced under license U.S., Europe, and really spend- op a relationship with a tour-guide operators have retrenched and are tion of nine fall Costume and by an undisclosed ing more time outside Chinese operator and get a busload of them now rethinking their itineraries. men’s and women’s Costume. manufacturer.