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.