Photo by Robert Mitra; Styled by Danilo Matz months. For more,see page8. in retailsales duringits firstsix could generate as much as $30 million uses a new color dispersing technology, glosses and lip liners. The range, which a 48-shade lipstick range that also includes mass lipstick category with Color Sensational, Maybelline New York is looking to resuscitate the Wagon Paint Your Caught in a Vise: Closures,RentCaught inaVise: CutsSqueezeMallDevelopers Circuit City, Linens-N-Things, Steve & hit the profitability of many retailers. recession-hit developersmight follow. protection, the question is whether more Inc. has filed for Chapter 11 bankruptcy Now that General Growth Properties By SharonEdelson Plummeting consumer spending has RETAIL: store, page3. Women’s Newspaper Daily •April17,2009$3.00 Wear •TheRetailers’ Daily W quirky new Manhattan Beauty

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12 2 WWD, FRIDAY, APRIL 17, 2009 WWD.COM Bulgari Expects Loss, Gradual Improvement By Andrew Roberts close unprofitable stores this year after the com- pany’s earnings fell 45.1 percent to 82.9 million Bulgari SpA expects a first-quarter euros, or $122 million, in 2008. Full-year rev- loss, but the Italian jeweler anticipates a grad- enues slipped 1.4 percent to 1.08 billion euros, WwDfridayBeauty ual improvement later in the year, the company or $1.59 billion. GENERAL said Thursday. He reiterated those priorities Thursday and Bobbi During a shareholders meeting in Rome, repeated that prices would stay flat except where Brown’s 1 Now that General Growth Properties has filed chief executive officer Francesco Trapani and there have been significant currency fluctuations. Tokyo bankruptcy, the question is whether more mall Bulgari’s majority shareholders Paolo and Bulgari is negotiating with some of its banks to store. developers will follow in the sour economy. Nicola Bulgari also ruled out putting Bulgari up extend deadlines on as much as 30 million euros, 2 Bally International AG has parted company with for sale, a spokesman said. or $39.7 million, of debt, Trapani said. But he un- ceo Marco Franchini, who leaves after seven Trapani attributed the firm’s first quarterly derlined there were no significant credit risks. years at the luxury shoe and accessories firm. loss since 1999 partly to wholesalers running As of Dec. 31, Bulgari’s net indebtedness was 304 down their inventories. He said Bulgari could an- million euros, or $385.7 million. 2 Aiming to be Asia’s most recognized brand, ticipate a contained recovery in the second part Brothers Paolo and Nicola Bulgari — the Japanese merchant Uniqlo launched an online of the year after a pickup in third-party demand. grandsons of Bulgari founder Sotirios Voulgaris store for China in partnership with Taobao.com. Bulgari is to release its first-quarter results and chairman and vice chairman, respec- 4 The domestic textile industry was up in arms May 12. The company’s share price climbed 5.3 tively, of the firm — each hold 23.45 percent of over the Obama administration’s decision not to percent to 4.03 euros, or $5.33, at the close of Bulgari’s stock, while Trapani, their nephew, declare China a currency manipulator. trading Thursday in Milan. Dollar figures were owns 4.39 percent. Bobbi Brown is thinking globally, with a plan converted at average exchange rates for the pe- Shareholders authorized Bulgari to buy back s 6 riods to which they refer. up to 30 million euros, or $39.7 million, of stock that will nearly triple her number of international Trapani told WWD last month Bulgari would to stabilize the share price, which has fallen 43.6 freestanding stores within the next three years. cut jobs, reduce the number of products and percent in the last 12 months. Maybelline New York has experienced a string of 8 successes in the last five years, namely in the eye category, but it still ranks fourth in lipstick. 9 In the year since Coty Inc. began integrating Del Bally Severs Ties With CEO Marco Franchini Laboratories, the company has fortified its pres- MILAN — Bally International AG has parted compa- He added there would be no further manage- ence at mass and launched products. ny with chief executive officer Marco Franchini. ment changes and renewed his support for cre- Lawrence C. DeParis has been named as Franchini, 51, leaves after seven years at the ative director Brian Atwood, whom Franchini 11 president and ceo of Nat Nast Co., charged with helm of the luxury shoe and accessories label appointed in 2007. growing the family-owned men’s sportswear firm. for personal reasons, Bally stated Thursday. The “We face the same difficult economic envi- firm has yet to name a successor. ronment as all other companies in the industry. Classified Advertisements...... 15 “Marco has been pivotal for the successful However, as a brand with firm, authentic values turnaround of Bally since he joined in early and focus on quality, we feel Bally is well posi- To e-mail reporters and editors at WWD, the address is 2002. His outstanding efforts have helped make tioned to weather this storm. We are excited about [email protected], using the individual’s name. Bally into the successful company that it is its development and we remain committed to mak- WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2009 FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. today,” Bally stated. ing further investments to realize the long-term VOLUME 197, NO. 82. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with Franchini, a former Gucci veteran, guided strategy that has been defined. We take a counter- one additional issue in January, May, October, November and December, two additional issues in March, April, June Bally to break even in 2004 after 16 years of loss- cyclical stance and embrace the selective opportu- and August, and three additional issues in February and September) by Fairchild Fashion Group, which is a division of Advance Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services es. After bringing back production in-house and nities that this environment brings,” Harf stated. provided by Condé Nast Publications: S. I. Newhouse, Jr., Chairman; Charles H. Townsend, President/CEO; John W. expanding Bally’s retail network to 730 points He added that Bally’s goal remained that of Bellando, Executive Vice President/COO; Jill Bright, Executive Vice President/Human Resources. Periodicals postage of sale worldwide, Franchini said last April he growing into “a big and profitable luxury house” paid at New York, NY, 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 expected the label to close fiscal 2008 with sales and that management would focus on optimiz- addresses to: P.O. Box 503, RPO West Beaver Cre, Rich-Hill, ON L4B 4R6 POSTMASTER: SEND ADDRESS CHANGES of around 500 million Swiss francs, or $462.7 ing the retail network and company processes TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615–5008. FOR SUBSCRIPTIONS, ADDRESS million. Bally registered revenues of 400 million to do so. CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or visit www.subnow.com/wd. Please give both new and old addresses as printed Swiss francs, or $337.1 million, in 2007. “We will continue with a multichannel strat- on most recent label. First copy of new subscription will be mailed within four weeks after receipt of order. Address all Dollar figures were converted at average ex- egy of own retail, franchise, shop-in-shop and editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. change rates for the periods to which they refer. wholesale distribution,” Harf stated. For permissions and reprint requests, please call 212-630-4274 or fax requests to 212-630-4280. Visit us online at www.wwd.com. To subscribe to other Fairchild magazines on the World Wide Web, visit www.fairchildpub.com. Vienna-based Labelux Group acquired Bally Bally launched its first online store in Occasionally, we make our subscriber list available to carefully screened companies that offer products and services from TPG Capital last June for an undisclosed February. that we believe would interest our readers. If you do not want to receive these offers and/or information, please sum. TPG bought Bally for an estimated $200 The company was founded in 1851 by Swiss advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273. WOMEN’S WEAR DAILY IS NOT million in 1999. industrialist Carl Franz Bally and currently RESPONSIBLE FOR THE RETURN OR LOSS OF, OR FOR DAMAGE OR ANY OTHER INJURY TO, UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPARENCIES), OR Bally president Peter Harf stated Labelux re- trades in 66 countries worldwide. Footwear rep- ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER mained committed to its investment for the long resents 50 percent of sales; bags and accessories MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED TO DO SO BY term and underlined Franchini’s departure was 40 percent, and ready-to-wear 10 percent. WOMEN’S WEAR DAILY IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE ACCOMPANIED BY A SELF-ADDRESSED STAMPED ENVELOPE. unrelated to the current economic environment. — A.R. DAILY Uniqlo Turns to Web for Broader China Access QUote “That’s crazy. She [Edie By Lisa Movius Shanghai and Shenzhen, but online we can Beale] was very much reach all of China — even in Tibet and Xinjiang SHANGHAI — Declaring ambitions to create Asia’s we will have customers,” said Tadashi. in touch with the real world. So was her most globally recognized brand, Japanese retail- Pan Ning, Uniqlo’s China director, said the mother. Maybe more so than most people. er Uniqlo on Thursday launched an online store retailer had 21 stores in Mainland China as of for China in partnership with Mainland Internet June 2008, and that will have increased to 45 — Albert Maysles, co-director of the famed documentary “Grey” giant Taobao.com. by June this year, out of 848 internationally, “Just as everyone drinks coffee, and that has and is launching next week in Singapore. The Gardens,” on its subjects Edie and Edith Beales. Page 14. been turned into Starbucks, everyone wears brand’s Mainland sales doubled year-on-year clothes, and that can be made into a universal in 2008. Uniqlo experience,” said Jack Ma, or Ma Yun “Within Asia, China is our main focus. The A trio of TODAY ON in Chinese, chairman and chief executive of Internet provides great opportunities for both handbags at Taobao’s parent Alibaba Group. marketing and sales. It is a way to be available Marni. “Look at McDonalds, Starbucks and such, to consumers,” said Pan, who denied the Web they are all U.S. brands. We hope a Chinese or platform might compete with Uniqlo’s expand- Japanese brand will become like them,” added ing retail network. “The Web develops fast, and Tadashi Yanai, founder of Uniqlo and president the relationship between the Internet and physi- of its parent company Fast Retailing Co. Ltd. cal stores is symbiotic.” WWD Under the partnership, Uniqlo will have both The Web site launch marks not only the be- .com a virtual shop on Taobao, plus a dedicated China ginning of Uniqlo’s online presence in China, but Web site, uniqlo.cn, which will operate and sell also Taobao’s first dedicated site for an indepen- through Taobao’s system. dent brand. Ma hopes to establish about a hun- Uniqlo opted to operate through Taobao in dred such online shops through the site. “Taobao order to avail itself of the Web site’s user base of is not just consumer-to-consumer, but increas- 100 million, who conducted 99.96 billion yuan, or ingly business-to-consumer,” he said. “Combining $14.6 billion at current exchange, in transactions the Web with consumers is powerful.” • More images of Marni’s last year, according to the company. In recogni- “At first we were modeled upon eBay,” contin- tion of limited credit card use in China, the new ued Taobao president Lu Zhaoxi, “but three or new Manhattan store Uniqlo online store allows shoppers to purchase four years ago we started wanting to become bigger • Additional photos of preparing for through their existing Taobao accounts. The col- than that, and not just be consumer-to-consumer.” the upcoming Vionnet retrospective laboration additionally emerged out of Tadashi While Uniqlo is the trial effort for that, Ma • Beauty Roundup: April 17, 2009 and Ma’s friendship since meeting at a confer- added the brand has its own niche positioning. ence two years ago, both emphasized. “If Uniqlo can spark the dreams of young Chinese • WWD Week in Review 4/17/09 “We have stores in cities like Beijing, people, then this will be successful,” he said. • Global breaking news WWD, FRIDAY, APRIL 17, 2009 3 WWD.COM FASHION SCOOPS Marni Opens 2nd NYC Shop DECONSTRUCTING DOV: Woody Allen has been which encourages high-profi le actors, artists and By Sharon Edelson publicly mum on his pending lawsuit against musicians to donate their resources to children with American Apparel, but he was hardly understated serious medical conditions. NEW YORK — Consuelo Castiglioni doesn’t like the obvious. on the subject in a December deposition. In Her new Marni store is no exception. Rather than open a boutique on excerpts released Wednesday from a previously COVER GIRL: Cynthia Rowley and her husband, Fifth Avenue or Madison Avenue, Castiglioni opted for a 2,500-square- confi dential transcript, the fi lmmaker called the gallerist Bill Powers, are known to have an affi nity foot, two-level space on the quiet, tree-lined East 67th Street, at No. 21. retailer’s characteristically soft-core ads “sleazy” for contemporary art. It comes as little surprise, “Most of my stores are in a location that is somewhat discreet with a and “infantile.” Allen fi led a federal suit against then, that the two are well-known fi gures in the hidden element,” she said. “I like for our customer to have the sensa- American Apparel in March 2008 over the fi rm’s auction world — so much so they’re featured on tion of discovering the boutique.” unauthorized use of his the cover of Phillips de Pury There’s plenty to discover inside the store. Architecture fi rm image in a billboard & Co.’s latest “Saturday@ Sybarite cut a hole in the ceiling at the front to create a double-height campaign. “If I’m going Phillips” auction catalogue. entrance. Fiberglass mannequins dangle from the second-fl oor ceil- to do a commercial, it Rowley and Powers ing, visible to shoppers on the fl oor below. At the back of the store, in would have to be for, as are participating in the the shoe area, a giant abstract stainless steel tree grows through to I said, a large amount of auctioneers “Tastemaker” the second hole via another hole in the ceiling. Walls were purposely money, it would have to series, discussing their left unpainted near the top and bottom for an unfi nished look, with be a very clever, kind of favorite artworks. They were intentionally visible roller marks creating striations on the Sheetrock. witty or intellectual-style photographed at their West White angular plastic screens of different heights and shapes cover commercial…” the director Village townhouse by Dean areas of the walls. said under oath on Dec. 15. Kaufman enjoying cookies The unit is Marni’s second in Manhattan. A store on Mercer Street in He went on to say American at their dining table — the SoHo bowed in 2002 and was expanded in October when the brand took Apparel has a “sleazy image” hand and cookie popping up over the space next door, doubling in size. Marni, which had sales of $174 and that the company’s through the table belonging million in 2008, is expected to open a store at CityCenter in Las Vegas by ads, which often bear the to their nine-year old year’s end. Freestanding accessories stores “are in the planning stages.” imprint of chief executive daughter, Kit. The catalogue Castiglioni said she decided to open a second boutique here “to bet- offi cer Dov Charney, he had goes on sale Wednesday. ter service our customers living uptown.” seen were “sexually gross in While there is a thematic thread that runs through all Marni bou- a witless and infantile way.” PRADA TEST RUN: Prada’s tiques, the new store will have a different choice of merchandise than Earlier this month, the Los much-hyped Transformer the SoHo unit. “They will complement one another,” Castiglioni said. “A Angeles-based company fi led project is one step closer to special capsule collection will be presented only in the uptown store. It a motion to compel Allen to making its mark on Seoul. will include dresses, jewelry and shoes.” produce evidence related to Eunmin S&D, the project’s The store is long and narrow, with every bit of space pressed into his divorce from Mia Farrow contractor, has completed the service. An undulating rack and subsequent marriage structural work and the fi rst beneath the staircase displays to her adopted daughter rotation test of the building, Inside the ready-to-wear and feels like Soon-Yi Previn. Lawyers which will morph its shape to new Marni. Cynthia Rowley and Bill Powers on the cover a dark alcove. Handbags are for American Apparel of Phillips de Pury & Co.’s new catalogue. accommodate a fi lm festival, housed in beige velvet display contend the scandal that a contemporary art exhibition boxes suspended by metal wire surrounded the marriage dragged Allen’s potential and other events over the coming months. The that look like overhead luggage endorsement lower than the $10 million he is building’s movable geometric components are covered bins on airplanes. seeking in the suit. Allen’s team responded with with an elastic, white membrane normally used to On the second fl oor, another the portions of the deposition as proof that he had cover and store machinery like old airplanes. Miuccia longer undulating metal rod fulfi lled his obligations for the discovery phase of Prada and Rem Koolhaas, who designed the structure, shaped like a wave holds men’s the trial, during which plaintiff and defendant trade will host a cocktail April 23 to fete the Transformer’s and women’s rtw with a mirror evidence. His lawyers accused American Apparel inaugural exhibit — a reprise of the traveling exhibit dividing the two collections. The of using a “scorched earth” approach to the case “Waist Down: Skirts by Miuccia Prada.” stainless steel branches from and attempting to turn discovery into an “unfettered the ground level burst forth, exploration of Mr. Allen’s family life, personal SHOP TALK: Tony Parisian department store Le Bon encircled by an oval rail hold- fi nances and career.” The two sides are due to meet Marché is making it easier to achieve that je ne ing more rtw. Outside the fi tting at trial on May 18 in Manhattan. sais quoi style of hip French starlets: It has invited rooms, built in leather-lined dis- actresses Géraldine Pailhas and Julie Gayet to select play cases hold lingerie. CALVIN’S STAGE MOMENT: In 1990, Calvin Klein their summer must-haves from the store’s designer For spring, dots were a created costumes for Martha Graham’s “Maple collections and will display them from Saturday to theme with cotton and silk mac- Leaf Rag” production. Collaborating with Graham May 2. Meanwhile, designer Anne Valérie Hash is set ramé circles used to accent directly, Klein designed low-slung skirts to to test an innovative retail concept. Spurred by the skirts or for dresses ($1,440). A For more images, see WWD.com. accentuate the torso, and other pieces that are success of her recent ephemeral store in Paris’ Palais shirred chiffon top is $5,400, a still used for the production worldwide. Through Royal, the designer plans to open a boutique in her teardrop sequin skirt, $3,330. Saturday, Klein’s designs are once again in the headquarters on Paris’ Boulevard Bonne Nouvelle The white dots also appeared spotlight, as the Martha Graham Dance Company next month, also offering a made-to-measure service. on jacquard coats and shoes will performs “Maple Leaf Rag” and several other with thick platforms. The dances at Paris’ Théâtre du Châtelet. There’s no A BLING THING: Talk about spending your way out of Summer Edition 2009 capsule need, however, to fl y to Paris to sample some a recession: Selfridges has just unveiled a 2,000 collection is priced 30 percent vintage Calvin: The production moves to New York pound, or $3,000, Swarovski crystal-encrusted bikini, lower than the core Marni line University’s Skirball Center May 12 to 16. dubbed the bling-kini, which will go on sale Monday. and includes cotton blouses for Designed by Pistol Panties, the multicolored swimsuit $470 and jackets, $865. COAST TO COAST: The Art of Elysium has set its is joined from bust to base with sparkly gold rope. It sights on the East Coast. The Los Angeles-based is on display under a glass case. Three are available charity — known on the Hollywood party circuit for now, and the waiting list is already full. “We had its annual pre-Golden Globes soiree — opened an one woman in our Notting Hill store who wanted to L&T Holds Meetings to Alleviate Vendor Concerns offi ce in Harlem last week and is throwing a bash in wear the piece to a fabulous party in Ibiza,” said CALLING ALL VENDORS, CALLING ALL VENDORS. Manhattan to celebrate. a spokeswoman for Pistol Panties. “We think that Lord & Taylor, seeking to alleviate concerns about its business, is Co-hosts including Joy Bryant will be in there is defi nitely a demand for blingy products such staging two mass meetings with designers and apparel executives today attendance at the fete, which will take place on as this one.” Last week, Selfridges reported a 33 inside the Fifth Avenue fl agship. May 1 at quirky downtown hotel The Jane, and will percent increase in swimwear sales year-on-year. About 150 from the fashion community are expected to attend in feature a live performance by Santigold. Proceeds “There is still a huge demand for these kinds of what amounts to an unprecedented tactic by the privately held Lord from the evening will benefi t The Art of Elysium, [blingy] pieces,” said a Selfridges spokeswoman. & Taylor chain, prompted by the diffi cult economy and recent actions by the parent Hudson’s Bay Trading Co., to shore up the operations, including pumping in $70 million, laying off 1,000 workers, centralizing operations and closing the Fortunoff division. Muji Easing Pace of Store Expansion While the vendor meeting represents a fi rst for Lord & Taylor, the event is not unlike others that have been conducted by publicly owned By Kelly Wetherille about 10 stores in four countries across retailers such as Macy’s Inc. and J.C. Penney Co. Inc. for the benefi t of Europe, but will postpone roughly half of analysts and vendors. TOKYO — Muji is scaling back its international those projects indefinitely, mainly those At Lord & Taylor, designers and apparel executives will hear pre- expansion plans in the wake of the ongoing fi- planned for the U.K., the fi rst market the re- sentations by Hudson’s Bay’s top offi cials: Richard Baker, governor of nancial crisis. tailer entered in Europe. Hudson’s Bay Trading Co. and chief executive of NRDC Equity Partners, Ryohin Keikaku Co. Ltd., which owns The company still plans to expand interna- which owns Hudson’s Bay; Jeffrey Sherman, Hudson’s Bay chief execu- the Muji chain of apparel, interior and gen- tionally, but has now changed course to put its tive offi cer, and Brendan Hoffman, president and ceo of Lord & Taylor. eral goods stores, is curbing its ambitions in focus more on the Asian market, where Muji The offi cials are expected to discuss the state of the Lord & Taylor busi- Europe and the U.S. stores face less competition than in Europe ness and its plans, some of which appear to be on hold. Before the recession The company had planned to open about or the U.S. It will proceed with plans to open hit, the company unveiled intentions to renovate the fl agship, located be- 20 stores in the U.S., Europe and Asia during about 15 stores across the region, most of tween 38th and 39th streets, and convert much of it to nonretail space, and the current fi scal year, but has put many of the which will be located in China, where Muji’s to expand Lord & Taylor to Canada. Like other chains, Lord & Taylor has openings on hold. Five of the stores planned sales remain strong. The company will also been preoccupied with weathering the economy and has been continuing on for the U.S. have been shelved due to sluggish open its fi rst store in Indonesia this June. a path set by its previous ceo, Jane Elfers. She reduced the store count and consumer demand. As of the end of February, Ryohin Keikaku eliminated much moderate merchandise to recast the chain as a Northeast “We realized that things probably won’t go operated 98 freestanding stores outside of regional operation focused on contemporary, better and bridge labels. as planned,” a spokeswoman said. Japan. The company also stocks select Muji — David Moin Ryohin Keikaku had expected to open products at MoMA stores in New York City. 4 WWD, FRIDAY, APRIL 17, 2009 WWD.COM Industry Upset Over China Currency Stance South Korea Retail Under Strain By Liza Casabona By Brett Cole WASHINGTON — The domestic textile industry was up in arms Thursday over the Obama administration’s decision not to declare China a currency manipulator, ending hopes SEOUL — Walk into any of South Korea’s three biggest department stores and it would at least for the near future of any punitive action against the country’s exports. be hard to believe predictions that Asia’s fourth-biggest economy will contract this Congressional leaders said they would not immediately be introducing any legisla- year. The floors of Seoul’s biggest department stores are teeming with shoppers. tion against China’s currency policies, either. Critics argue that China undervalues its At Hyundai’s flagship in the trendy Apujong area, shoppers are overwhelm- currency by as much as 40 percent, which lowers the cost of Chinese imports and puts ingly well-heeled Korean women. Clad in designer jeans and jackets if under age goods from the U.S. at a competitive disadvantage. A nonmarket economy, China pegs 40 or in fur jackets if over 50, they clutch shopping bags with European designers’ the yuan against a basket of currencies, including the dollar. motifs as they ride escalators with friends to the store’s restaurants for lunch. “We are disappointed that the administration did not send a strong signal…that this “The rich are not influenced by the economic crises,” said An Ka-ram, a mar- model is unsustainable by labeling China as a currency manipulator,” said National keting analyst at Hyundai. Council of Textile Organization chairman Andy Warlick. Still, looks can be deceiving. Hyundai, Lotte and Shinsegae, South Korea’s In a report on exchange rate policies issued Wednesday, the Treasury Department three biggest department store operators, saw their collective sales in February backed off previous statements made by Treasury Secretary Tim Geithner during fall 0.3 percent, according to South Korea’s Ministry of Knowledge Economy. his confirmation hearing that China manipulated its currency. The biannual report That’s a relatively meager dip compared with retailers’ performance in many instead outlined steps it said China had taken to enhance exchange rate flexibility other parts of the world, but it’s coming off a 10.4 percent jump in January. And and appreciate its currency. China holds a major portion of U.S. foreign debt and has observers here expect things will only get worse. threatened counteractions if the U.S. took measures against its currency policy. South Korea’s finance ministry expects the economy to contract by 2 percent Chinese government officials said Thursday they had “taken note” of the Treasury this year, while a more pessimistic International Monetary Fund forecasts it will report and will continue to reform the country’s shrink 4 percent. exchange rate mechanism and keep it stable at a Swiss bank UBS said private consumption in South Korea will shrink 4.4 per- “reasonable and balanced level,” according to the cent in 2009. The central bank has cut interest rates to a record low in a bid to state-sponsored media outlet Xinhua. kick start the credit markets, ease the debt burden of businesses and bolster do- Geithner did say in a statement accompanying mestic demand. the report that China’s currency was undervalued, “The Korean economy is indeed in dire straits,” the country’s finance minister but stopped short of saying the country’s govern- Yoon Jeung-hyun said in his inaugural speech in February. ment manipulated it. The administration will re- Hyundai Department Store’s An draws a descending staircase to illustrate lease a second currency report in October. her forecast for retail sales. Koreans, she said, have yet to curtail their spend- Domestic textile groups would like to see ing but when they do, sales of luxury items are expected to fall far and fast. Lee Congress take up the issue again, arguing the im- Hee-jong, who has a shop that sells shirts to some of Korea’s most famous actors, balance is further hurting the U.S. economy. China expects that many consumers will begin shopping in Seoul’s Dongdaemun and shipped $32.7 billion worth of apparel and textiles Namdaemun districts where clothes are inexpensive. to the U.S. last year. A surge of tourists, mainly Japanese, has helped boost sales at Shinsegae, “Currency manipulation and these trade imbal- Hyundai and Lotte over recent months. The Japanese yen has just come off a strong ances have a far wider and more damaging impact run against the Korean won, which made the world’s leading fashion brands, espe- on our economy than a lot of people realized six cially if purchased at duty free prices, especially attractive for Japanese visitors. months ago,” said NCTO president Cass Johnson. Every morning at around 11 a.m. outside the Galleria department store in Seoul’s The Treasury report cited a range of external Gangnam district, a bus disgorges reasons for not labeling China a currency manipu- Japanese tourists. South Korea is a Tim Geithner lator, like the failing economy, which implied the popular destination for Japanese, par- administration felt it was the wrong time to take ac- ticularly women in their 20s such as tion, he said. Yukiko Yamada, who is traveling with “Why Treasury refused to cite China is highly perplexing,” said a spokesman for her three girlfriends. Seoul is less than the American Manufacturing Trade Action Coalition. “They are ignoring the facts. It’s a two-hour flight from Yamada’s resi- going to be like waving a red flag in front of a bull in Congress.” dence in Osaka or the Japanese capi- Sen. Debbie Stabenow (D., Mich.) said Thursday she would introduce the Currency tal, Tokyo. While in Seoul, Yamada Manipulation Act, which would define currency manipulation and establish mecha- planned to visit Louis Vuitton and nisms to address it. Stabenow did not indicate when she would take that action, but Gucci to buy a leather bag. sources said it could be in the next few weeks. Japanese tourists have helped Other Congressional leaders who supported currency legislation in the past — in- to make up for a 30 percent drop in cluding Sens. Max Baucus, Lindsey Graham and Charles Schumer — indicated they purchases between November and would not push forward immediately, but they left the door open. January by Koreans at a major Italian “I don’t sense a lot of enthusiasm in Congress for really being out there on the whole fashion label at the Galleria depart- currency issue,” said Erik Autor, vice president and international trade counsel at ment store, the store’s manager said. National Retail Federation. “I don’t see the level of agitation in Congress on the currency The manager is worried, fearing pur- manipulation issue that there was in the past. That said, there is still interest from power- chases by Japanese tourists will drop ful quarters on Capitol Hill and it’s something we’re watching very closely as a result.” now the traditional December to Importers said they would continue to monitor the issue. January sales season is over. “Given this determination on China’s currency, we expect Congress will likely wait Business in the first half of the year and see what objectives President Obama and Secretary Geithner have set for this is likely to be “disappointing,” said a summer’s Strategic Economic Dialogue with China before rushing to impose any re- distributor of another major Italian taliatory or punitive tariffs,” said Kevin Burke, president and chief executive officer fashion label in South Korea with out- of the American Apparel & Footwear Association. lets at Lotte, Shinsegae and Hyundai. Stores located outside the major department stores are also glum. Son Won-jong, who manages the women’s store Caramel on the Carrefour Sales Drop 2.8% in Qtr. fashionable Seoul street of Garoo By Miles Socha tious with the period that’s ahead of us.” Soo Gil, said sales have fallen 30 (Next month, Reiss will be become Hyundai, Lotte and Shinsegae, South Korea’s percent from a year ago. The drop PARIS — Reflecting a tough economic en- director of Carrefour’s hypermarkets in three biggest department store operators, saw has come despite the fact the store’s vironment in France and deterioration in Brazil and will be succeeded by Pierre their collective sales in February fall 0.3 percent. prices are about 40 percent cheaper Spain, Carrefour Group said first-quarter Bouchut, who comes from Schneider than those in department stores. revenues slipped 2.8 percent to 22.72 bil- Electric and was formerly chief executive Still, one of Korea’s best known designers, Junn J, said there is still a strong base lion euros, or $29.71 billion. On a same- officer of Carrefour rival Casino Group.) of support from a dedicated group of shoppers who buy local designers. “My fans ask store basis, sales fell 4 percent. Carrefour cited “unfavorable consum- me to be more creative. It is not very commercial, but I love it so much,’’ he said. The world’s second biggest retailer er trends” in most growth markets and a Lotte, Korea’s biggest department store company, is also optimistic. Its 25 after Wal-Mart Stores Inc. said its French mixed performance internationally, with Korean stores reported a more than 10 percent increase in January sales, thanks hypermarkets showed resilience, but con- revenues in Latin America bounding 14 in part to an earlier-than usual Lunar New Year holiday season. “I still believe sumers continued to shun nonfood pur- percent at constant exchange rates, while there is some [sales] growth” for 2009, said Kim Woo-kyung, the general manager chases and hunt for bargains. China growth slowed to 3.1 percent in the of the company’s investor relations team. Kim said wealthy Koreans and Japanese Sales in France, which account for three months ended March 31, versus a 6.9 tourists are buying luxury leather goods and cosmetics, but sales of men’s and about 42 percent of Carrefour’s revenues, percent gain in the fourth quarter. Sales women’s suits are down. dropped 5.1 percent to 9.59 billion euros, contracted 5.6 percent in Spain, 5.4 per- Seok Kang, chief executive officer of Shinsegae’s Department Store, is also try- or $12.55 billion. cent in Italy and 3.4 percent in Belgium. ing hard to be upbeat. He said the company hopes to bolster sales by stressing be- Dollar figures are converted from av- The retailer, whose largest share- fore and after sales service to its wealthiest customers. Shinsegae has 999 people erage exchange rates for the period. holder is LVMH Moët Hennessy Louis who are members of its “Trinity Club,” open to people who spend 75 million won, Carrefour also blamed price deflation Vuitton chief Bernard Arnault and Colony or $56,850 at current exchange, at its stores annually. There is also another group of food and petrol for the declines, and Capital, has been stepping up markdowns of 5,000 customers who spend more than 30 million won, or $22,740, a year. These highlighted the loss of a day of trading in to spur spending. Reiss told analysts two groups are lavished with personal attention. The company has sale personnel February and the fact that Easter fell in Carrefour increased promotional activity greet the customers, escort, introduce and advise them on purchases while carry- April this year as opposed to March in 2008. about 10 to 20 percent in the quarter. ing their bags and sending personal invitations to fashion shows at its stores. “We had a decent pre-Easter period Carrefour ceo Lars Olofsson said cost Seok said the company is targeting 2 to 3 percent sales growth in the first six overall in the group, but it’s too early to reductions and streamlined operations months of this year. The chain will have a network of eight stores as of March. speak about the month of April or the whole would only improve figures in the sec- The retail executive said he expects the Korean economy to turn around in the second quarter,” Eric Reiss, the firm’s out- ond half. In the first quarter, Carrefour second half of the year, recalling the dedication and hard work that lifted South going chief financial officer, told a confer- opened or acquired 210 new stores. Korea out of the 1990s Asian financial crisis. ence call Thursday. “We are being very cau- — With contributions from Liz Webber “Korea’s recovery will be faster than any other country,” he predicted. WWD, FRIDAY, APRIL 17, 2009 5 WWD.COM Teng Weighs In on Garment Center Prepping Vionnet for Display NEW YORK — Designer Yeohlee Teng and architect Calvin Tsao discussed the evo- By Katya Foreman meanwhile, the exhibition countdown is lution of the Garment Center and saving the jobs of behind-the-scenes craftspeo- proving a delicate race against time, espe- ple during an event at the nonprofit Val Alen Institute here. PARIS — A 72-year-old Madeleine Vionnet cially in view of the sensitivity of Vionnet’s They also spoke about encouraging a buy-local consumer initiative. halterneck gown, a crumpled heap of brit- favorite fabrics — namely silk crepe, tulle The talk, moderated by institute executive director Adi Shamir, included tle tulle and silk flowers, has been laid out and muslin — to dust and the elements. feedback from architects and urban planners in the audience who aired con- for inspection in the restoration rooms of “Vionnet worked with the weight of a cerns about whether the city’s proposed rezoning of the Garment Center might Les Arts Décoratifs — and Maximilien fabric, often using seven weights of chif- diminish the number of jobs for seamstresses, patternmakers and others who Durand, director of the restoration de- fon in one collection. With time her dress- are integral to the design process. partment, issues a grim diagnosis. es become more and more fluid and light,” City officials have suggested centralizing manufacturing in a 300,000-square- “This dress is really ill and will neces- explained Golbin. “One of the problems foot building at West 38th Street sitate 60 days of restoration without any we’re feeling now is that all of her light-as- and Eighth Avenue. There is certitude of being able to save it,” he said. a-feather tulle has almost disappeared.” about 850,000 square feet in the Things looked less serious for a silk frock To prepare the tired dresses for their Garment Center occupied by ap- dyed in a shocking flush of pink and a geo- long stint on mannequins, Durand and his parel manufacturers. metric dress from the Thirties with a cir- nimble-fingered team have been imple- Teng said “a proper study” is cular neckline in broken mauve lace. menting a network of fine support systems needed to determine how that In this clinic for wounded old clothes, across the garments’ tension zones, tacking setup would affect the people Durand has been overseeing the resto- skeletons of ribbon, for example, along the who work in the industry. ration of the museum’s vast Madeleine inner seams of certain dresses to spread “It seems like marginaliza- Vionnet archive that includes over 100 out tension. For the dress with the torn tion to me,” Tsao said. “We’re dresses donated by the late designer her- lace neck, a layer of lighter mauve silk not animals in a zoo that just self in 1952. crepe will be applied underneath so as to come out to perform from 1 let the original fabric stand out. to 3.” Often embellishment on When Teng referred to the A vintage dresses can lead to its downfall, waning presence of the garment Vionnet style. with certain Twenties Vionnet industry, an audience mem- designs weighing several kilos. ber cited Manhattan’s flower “These dresses, that were market, which now consists of worn for one evening 70 to 90 a block or so on Sixth Avenue years ago will be exhibited on “with a couple of little edges,” mannequins for [eight] months,” as another shrinking area de- noted Golbin. “The [new lin- spite its “daily wholesale and ings] are attached in such a retail life.” way that, if a piece cracks, it’s In addition, Tsao aired his the new bit that gives and not concerns about the city’s ar- the original fabric.” chitectural community. “Today Instead of resurrecting may be great, but down the road dresses to their former glory by we could be kicked out on the disguising flaws, the role of the street, and pretty soon we would restorer, Durand explains, is to Calvin Tsao, Adi Shamir and Yeohlee Teng. JOHN AQUINO PHOTO BY be out in Brooklyn and then stabilize each garment by con- Pittsburgh,” he said. solidating fragile spots with fab- Attendees also discussed the need to sustain the skilled craftspeople, as one rics that are as close as possible audience member explained, “It’s definitely a thriving part of our society.” in composition to the original, in

“And the middle class,” Teng added. re this case silk. The idea is to max-

Highlighting the creative process might be one way to encourage shoppers Mait imize the allure of a piece while

to buy locally made items, participants said. Several pointed to the success of e maintaining its authenticity.

famed California chef Alice Waters, who has long championed using locally iniqu Durand points to one mossy m grown food and fresh ingredients, and suggested American designers adopt a o green velvet Vionnet cape from D by

similar strategy. the Twenties whose collar of — Rosemary Feitelberg s dyed silk roses has grown fuzzy

photo over time, due to the crumbling of

A member of Les Bleak Outlook for Luxe Spending Arts Décoratifs’ For more images, restoration team By Cecily Hall see WWD.com. in action. There’s not much hope in sight for the luxury market, accord- ing to a new study. Sponsored by Spending among U.S. luxury consumers has reached a record low because investment firm of the economic outlook, and designer apparel and fine jewelry are among the Natixis, which has injected 1 categories taking a hit, the American Affluence Research Center said in a report million euros, or $1.3 million at released Thursday. current exchange, in the project, In six of 17 product categories surveyed, half or more than half of the re- the restoration has as its dead- spondents plan to spend less during the next 12 months. The six are: designer line the opening of a Madeleine apparel; fine jewelry and watches; dining in upscale restaurants; cameras and Vionnet retrospective on June photographic equipment; antiques, art or wine collectibles, and political con- 18, set to showcase gems span- tributions. ning the late designer’s career For the remaining 11 categories, which include dining in casual and family from 1912 to 1939. the molecule chains in the silk. His solution restaurants, entertainment (concerts), major home appliances and home furni- Pamela Golbin, the show’s curator, was to tack a net of fine silk crepe across the ture, more than 25 percent plan to spend less. noted that Vionnet-inspired designs are blooms so as to make them legible without The study found that more than two-thirds of high-end consumers have no sometimes seen on the runways of John masking their state of decay. plans to make any of eight major expenditures in the next 12 months: motor Galliano and Yohji Yamamoto, but that’s “We’ve imprisoned the original fabric vehicles; cruises; boats; major remodeling; building or purchasing a primary only part of the picture. “The masterpieces within a consolidating fabric; we don’t home, and building or purchasing a vacation residence. Acquisition plans for all have been seen, but not in their full con- want to lose any information. Restoration eight major items are equal to or at historic lows. text,” said Golbin, who is also penning a must always be visible,” he said. “The outlook among luxury consumers for an improvement in the economy book on Vionnet, to be published by Rizzoli “It’s not a facelift, it’s more a facial,” and their willingness to spend are at all-time lows for our studies,” said Ron in French and English. pitched in Golbin who, blown away by Kurtz, founder of the research center based in Alpharetta, Ga. “This signals con- Rodolfo Paglialunga, the newly ap- the simplicity and the sophistication of tinued weakness in the luxury market. pointed Vionnet designer who is to make Vionnet’s designs, likened the restoration “Their concerns are underlined by the emphasis placed on preservation of fi- his runway debut during Paris Fashion adventure to piecing together a puzzle. nancial assets, which contrasts with attitudes from prior years, when respondents Week in October, is bound to figure among Understanding the way Vionnet’s piec- said their primary objective was capital appreciation and growth,” he said. note-taking visitors to the show, along es were meant to look when worn has been Eighty-one percent of the respondents said they reduced overall expenditures with the house’s new co-owner Matteo possible thanks to 75 photo albums that during the past 12 months and/or will do so during the next 12 months. More than Marzotto, former chairman of Valentino were also donated to the museum by the half plan to take fewer or no domestic vacation trips during the next 12 months, Fashion Group, who acquired the house designer. It contains front, back and side and almost three in 10 respondents will stay in less expensive accommodations. with Marni’s chief executive officer Gianni shots of every Vionnet design, and was Vehicle purchases have declined 30 percent from 2008. Home remodeling Castiglioni in February. Marzotto recently compiled as a copyright tool. However, the plans are only half of what they were a year ago. And plans to acquire either a disclosed intentions to acquire a collec- photos cannot reveal fully the designer’s primary residence or a vacation home have declined to record lows. tion of archival dresses from Vionnet biog- notoriously complex constructions. The Affluent Market Tracking Study, conducted twice a year by the AARC, rapher Betty Kirke. The previous owners “Vionnet’s [thing] is not about little focuses on the luxury market and the 11.2 million households representing of the House of Vionnet, the de Lummen bows and ties, but construction and we the wealthiest 10 percent of all U.S. households, as determined by the Federal family, recently chewed through two cre- have to understand how to tackle that Reserve Board, based on net worth. The study included more than 640 partici- ative directors, Sophia Kokosalaki and problem,” explained Golbin. pants for the survey, who have an average annual household income of $290,000, Marc Audibet, in their attempt to revive The 750 dress patterns donated by average primary residence value of $1.2 million, average net worth of $3.1 mil- the legendary house’s clothing line. Vionnet were of no help, she noted, as not lion and average investable assets of $1.4 million. For the museum’s restoration team, a single one matches any of the dresses. 6 WWD, FRIDAY, APRIL 17, 2009

The Beauty Report A view of the shelves. Independents Get Their Day at Aépure PARIS — Hot off the press is Aépure, a new beauty concept Juliette Has A Gun, Lorenzo Villoresi Firenze, Miller store selling solely independent brands from around the Harris and Nasomatto. To facilitate the trialing of globe. It was opened on Paris’ Left Bank Thursday. scent, de Grossouvre has created and implemented a Located at 35 Rue Guénégaud in the heart of the system of glass bottles — one for each fragrance — in sixth arrondissement’s gallery district, the 1,200-square- which a juice is suspended in a type of gas. This allows foot selling space has a magazine theme that’s evident for an entire scent, including its top, middle and base throughout, from the stacks of actual magazine paper notes, to be sampled at once, he said. serving as podiums (fi ve tons, in fact, were delivered to The Séduction section has fi ve brands selected for the store for that purpose) to the articlelike explana- their products’ well-being properties, as well, such as tions of each brand lining the walls. The Laundress, Abahna and Yes For Lov. Aépure stocks 52 labels from countries including The “Homme” (Men’s) room is painted black and Iceland, New Zealand, Japan, Thailand, Switzerland, carries nine brands, like Baxter of California, Skin Germany, Sweden and Italy, a selection edited by Tech, Sharps, Au Bonheur des Hommes, Lifelab, The 15-year beauty industry veteran François de Grossouvre Art of Shaving and Task Essential. from an original pool of 1,800 brands. Aépure does not have any makeup products, but “They are brands with a soul,” he said, adding each was starting in September it will carry one yet-to-be-an- chosen to complement the others, among various criteria. nounced mineral color collection that’s to be exclusive His store, whose streamlined design was conceived to the store outside of the brand’s home market. with Olivier Saguez of Saguez & Partners, is chocka- At the back of Aépure is a “V.I.P. space,” where block with fake books, some of whose bindings read brands may give complimentary facials or meet with “Extraits de Beauté” (or Beauty Extracts, in English). distributors and journalists. De Grossouvre said he plans to open seven Parisian Aépure is divided into three color-coded rooms, Although many brands in Aépure are not sold else- stores within three years. Locations abroad should which de Grossouvre likens to a magazine’s “columns.” where in France, de Grossouvre does not intend to main- debut in 2010. (In North America, Canada is a possibil- There’s “Cocon” (Cocoon), the main area painted white tain their exclusivity. Rather, he plans to nurture brands ity, although the U.S. is not in the near term.) that is just inside the front door. Here are 32 treatment so that they can expand their distribution. De Grossouvre The name Aépure, a newfangled word, was chosen for brands for the face, hair and body, most of which have intends to make Aépure’s brands accessible to everyone. numerous reasons in sync with the concept’s philosophy. formulas containing plant-based ingredients. Among “We have a price offering that’s totally global,” he “There is the notion of purity inside,” explained them are Evidens de Beauté, Yu Be, Christophe Robin, said, of the selection ranging from about 10 euros to 750 de Grossouvre, referring to a play on the French verb Sacha Juan, Snowberry, Taer Icelandic, Antipodes, Dr. euros, or $13.20 to $990.80 at current exchange. “épurer,” which means to purify or refi ne. Bragi, Mama Mio, Erbaviva, Rodial and Lucia Iraci. While de Grossouvre would not discuss sales projec- De Grossouvre added, “In French, it is — above all The “Séduction” (Seduction) area, brown in hue, tions, industry sources estimate the fi rst Paris-based — the best of something.” includes nine fragrance brands, such as By Kilian, store will generate $1.5 million in fi rst-year retail sales. — Jennifer Weil Bobbi Brown’s Global Growth Plan Amala Readies Specialty Store Launch BOBBI BROWN IS THINKING GLOB- sketchbook and concept diary, intend- WHILE CONSUMERS PAY LIP SERVICE an ongoing challenge, because they are ally — with a plan that will nearly triple ed to take consumers through Brown’s to being green, just try to get them to created in the Earth, not the laboratory,” her number of international freestand- creative process. A video area allows stick with a skin care brand that doesn’t she said. “Different harvests make plants ing stores within the next three years. consumers to watch videos of Brown’s deliver results like a more chemically behave a little differently every year, and “I am looking at the current economy seasonal inspirations and how-tos. engineered one does. That is the niche that means the formulations have to be as a reset button, and as a time to re- Exclusive limited edition Bobbi Brown where Ute Leube, founder of Amala — adjusted from year to year.” evaluate what, where, when and how,” items will also be offered each season. an offshoot of Primavera, the German The Rejuvenating line, intended to said Brown, whose newest freestanding A hot pink replica of Brown’s signature producer of holistic lifestyle products — restore elasticity to and stimulate micro- store, her 13th, is slated to open in Paris is scrawled across each front window. hopes to build a business on in the U.S. circulation of facial skin, is built around next month. “And it’s about doing the right Eventually, Brown would like to offer “Amala is our youngest baby, and will Peruvian cocoa beans. The key ingredi- thing. I am passionate about education, lifestyle items in each of her stores, a con- soon enter the luxury beauty world at ent in Hydrating, for dry facial skin, is and I also want my stores to be places that cept she is test-marketing in her Montclair Barneys New York,” said Leube, noting Egyptian jasmine. Purify, for oily skin, make people feel good. That’s the vision: store with a range of scarves and jewelry the brand’s name comes from a Sanskrit features Indian blue lotus. The body care ccreatingreating a ccomfortable,omfortable, eeclecticclectic — “ “simplesimple t thingshings w whichhich m makeake word meaning most pure. The more line is built around Turkish myrtle, said sspacepace — ssortort ooff a ccombinationombination youryour faceface looklook greatgreat byby bring-bring- masstige Primavera, which marketing di- to clarify skin. ooff oold-fashionedld-fashioned aandnd mmod-od- iingng o outut t thehe c colorolor i inn y yourour rector Joi Ruud calls “the heritage brand,” Products range in price from $30 for a eernrn — wwherehere ppeopleeople ccanan cheekscheeks oror eyes,”eyes,” sheshe ex-ex- didn’t suit the prestige market the compa- cleanser to $316 for a 100-ml. Rejuvenating ccomeome a andnd l learnearn a andnd plained.plained. TheThe lifestylelifestyle ny hopes to gain in the U.S. “Primavera’s serum. Because the products are 100 per- hhangang oout.ut. AAndnd hhavingaving itemsitems inin thethe MontclairMontclair focus has never been beauty, but holistic cent natural, packaging is critical, said stores is such a great storestore areare fromfrom outsideoutside lifestyle products. It made sense to create Ruud: “We don’t use preservatives, so way to test the wa- vendors,vendors, althoughalthough a brand specifi cally for the prestige beau- using airless pumps for skin care and alu- ters. When you’re in BrownBrown isn’tisn’t opposedopposed ty market,” she said. The company hopes minum-lined tubes — along with a blend department stores, toto creatingcreating herher own.own. to bring Primavera to the U.S. masstige of essential oils — keep everything stable you have certain rules “The“The rightright opportu-opportu- market in the not-too-distant future. for up to two years,” she said. In total, the you have to live by.” nitynity hasn’thasn’t yetyet comecome Amala enters its fi rst U.S. specialty line has 61 stockkeeping units. The 800-square- along,”along,” sheshe said.said. store distribution at Leube and her team are currently ffootoot P Parisaris s storetore — Each store fea- the end of this month: formulating several other collec- ddubbed,ubbed, l likeike a allll o off tturesures a r rangeange o off p per-er- Barneys doors in New tions, including a men’s line, tthehe o otherther f freestand-reestand- The Tokyo store. ssonalizedonalized s serviceservices a andnd York City, Beverly Hills, which is expected to launch iingng B Brownrown s stores,tores, T Thehe llessons.essons. TThehe mmenuenu iincludesncludes San Francisco and SStudiotudio — w willill b bee l locatedocated a att thethe VIPVIP MakeupMakeup lesson,lesson, a one-one- Chicago. The brand is 1 Bis, Rue des Francs Bourgeois in on-one lesson intended to customize also available in 15 spa the Marais, noted Sandra Main, se- a skin care and makeup routine to the doors in the U.S. and nior vice president and general man- customer’s needs; makeup party work- aiming to be in 50 by ager, International, for Bobbi Brown shops, teenage beauty, a class for the yearend; it bowed in a Cosmetics. 18-and-under set. Services range from handful of spas in April The company opened an $15 (for a brow touch-up) to $250. 2008. Amala is also avail- 1,100-square-foot Studio store at 3-46 Brown is also amping up her Bobbi able in Singapore, China Kita-Aoyama, Minata-ku in Tokyo in Brown University program. Designed and Hong Kong. March and also operates stores in to teach students to become skilled Four Amala collec- Dubai, Bahrain, Kuwait, Malaysia and makeup artists, the program — which tions are available, three Hong Kong. The fi rst freestanding Bobbi began as a series of classes in her designed for facial skin Brown Studio bowed in Montclair, N.J., Montclair store — is partnering with care and a fourth for in May 2007, and Brown and Main are accredited universities, including body care. “Each has Part of the Amala range. aiming to open 35 to 40 more freestand- Emerson College (Brown’s alma mater) a key plant ingredient ing stores globally by the end of 2012. and Montclair State University, to offer surrounded by additional naturals,” said in the U.S. within the next two years. The central design component of college credits for the classes. Leube. “We took everything we learned The brand sources its ingredients via each of the stores is a communal art- “I’m aiming to increase the for-cred- about working with plant ingredients with fair-trade agreements with farmers glob- istry table. Meant to be a play station it program and partner with more col- Primavera and put it into this line. Any ally. As well, the ingredients are organi- for grown-up girls, the tables allow con- leges and universities,” she said, noting plant has hundreds of special properties, cally farmed and have won certifi cation sumers to try a wide variety of prod- she eventually hopes to have a Bobbi and if you isolate certain materials, they from Ecocert. ucts, either solo or with the help of Brown University attached to each of are not as effective overall. In the right While none of the executives would friends or makeup artists. Store walls her freestanding stores. “I’m not look- combinations plants can be as effective comment on projected sales or advertis- are devoted to several concepts. There ing to have the fl agship stores on main or more effective than chemically engi- ing spending, industry sources estimated is a product wall which features key streets,” she said, adding that she is neered ingredients.” Amala would generate sales of $4 million product categories and brand visuals, scouting for space in Washington, D.C. Leube does concede plant-based prod- to $5 million at retail in its fi rst year on and a press-inspiration wall with press “I’m looking to be the destination.” ucts do require patience: “Working with counter in the U.S. clips along with pages from Brown’s —Julie Naughton natural ingredients and whole plants is — J.N. WWD, FRIDAY, APRIL 17, 2009 7

The Beauty Report WWD.COM Italy’s Esxence Fair Highlights Niche Fragrances By Jennifer Weil forms of home fragrance. A personal scent, Malenostrom, is due out in September. Lorenzo Villoresi is also developing a 16,670-square-foot center for perfumery- MILAN — People on the scent of novelty have a new destination in Italy: the Esxence related projects in Florence. A section of it should be opened this fall and the rest in niche fragrance fair. Its debut session, which ran from April 2 to 5 here, drew more spring 2010. Villoresi, who has created scented products for Fendi, Giorgio Armani than 80 exhibiting brands and over 2,500 attendees, including buyers from Germany, and Seibu Department Stores, among others, explained the center will be multipur- Ukraine and Switzerland. pose and host courses for the public. As reported, Esxence was splintered off from Cosmoprof ’s Masterpieces Distributor Intertrade Europe, meantime, brought section after Celso Fadelli, of Gruppo HI Herbarium Intertrade, and Silvio 16 of its fragrance clients to the Esxence fair. Levi, of Calè Srl, had divergent opinions with organizers. Its overall goal is to have its brands in no “The niche beauty industry really needs an event like Esxence,” said more than 125 doors globally. In the U.S., Fadelli, adding the goal is ultimately to move Esxence to cities around the distribution plans include a corner with world, including London, Paris and New York. “The idea is to take the mes- Studio BeautyMix in Santa Monica, Calif.; sage outside of Italy, where the category is very strong.” Barneys, and luckyscent.com. There’s been international attention already; Fadelli said perfum- Among Intertrade’s new brands was the ery buyers from France’s Galeries Lafayette and Douglas Hype Noses line of 20 candles, which were Russia were among the show’s visitors. Those troll- launched this fall by painter Stéphane ing Esxence were on a particular quest. Humbert Lucas. Each retails for about “We are looking for something different $85. Recently introduced in the U.S. than the usual,” said Daniela Manzoni, product was Profumi Del Forte’s line of per- manager for perfumes and cosmetics at Italy’s sonal and home scents, which range Coin department store. in price from approximately $120 to Niche brands seem to be a top priority, in part $300. Each bottle is hand carved and for their strength in a downturn. some have round marble caps. The “We have the advantage of being small, so we latest addition to the collection will are not really impacted,” said Sebastián Alvarez be Forte by Night in September. The Murena, co-founder of Eau d’Italie. “With small Nasomatto fragrances, introduced brands, they have no salaries to pay. They should be exclusively in Barneys a year ago, more resilient.” have funky caps made of wood in Attendees weren’t let down by the selection at square shapes. Perfumer Alessandro Esxence. Among the standout brands spotted at the fair Gualtieri, who has collaborated were Humiecki & Graef, the brainchild of Sebastian with the likes of Versace, Diesel and Fischenich and Tobias Müksch, who also run a design Helmut Lang, is behind the line. The and communication agency. The label’s fi ve unisex fra- newest scent in the Nasomatto (mean- grances tout names such as Askew and Skarb; each is ing “crazy nose,” in Italian) line is meant to represent a particular emotion and features Black Afghan. The 30-ml. perfume a cap made of a different material (like porcelain extract is $148. or enamel). This year, two more fragrances will be Fashion brand Etro is celebrating introduced to the lineup, which is sold via lucky- its 20th anniversary in the fragrance scent.com in the U.S. and in concept stores such industry with a major overhaul. “We as Berlin’s Departmentstore Quartier 206. Every wanted to update the image of fra- 100-ml. eau de toilette concentrée spray retails for Clockwise from left: Sebastián Alvarez Murena; Etro’s grance to create a stronger link with 149 euros, or $198 at current exchange. new fragrance; Luisella Tepatti. fashion,” said Luisella Tepatti, gen- Also from the visual arts scene comes industrial, graphic and eral manager of Etro’s fragrance and interior designer James Heeley, who launched his signature brand some accessory division. four years ago in Europe. His products are retailed in numerous markets, includ- The 22 Etro fragrances’ packaging, which had formerly been in black-and-white, ing 30 sales points in Italy, at Barneys New York and Aedes de Venustas in the U.S., is now color-coded. Browns in London and Colette in Paris. The line includes nine eaux de parfum and “We’re proposing a new way for customers to select the scents,” she said. — to be launched soon — 10 candles, replete with wooden lids. Etro will introduce a new fragrance, Pegaso, this spring. The brand’s products Meanwhile, Lorenzo Villoresi Firenze introduced a collection of handmade scent- are sold in the U.S. in Etro’s fi ve stores, Bergdorf Goodman and some independent ed incense sticks and scented crystals as part of its fragrance and candle collection. sellers. Prices range from 70 euros, or $93, for a 50-ml. eau de toilette spray to 102 The brand is carried in about 30 countries worldwide and will soon branch into new euros, or $135, for a 100-ml. eau de toilette spray. Frederic Brandt Gives Product Collection a Face Lift DERMATOLOGIST FREDERIC BRANDT IS GIVING HIS SKIN fi rm maturing skin. The collection, which is scheduled to launch in Henri Bendel, care line a new prescription for spring: refreshed packaging, Sephora and medical offi ces in June, aims to counteract the loss of elasticity and two new product collections and lower price points are all fi rmness with Dr. Brandt’s proprietary Age Reversing Platinum Technology. The part of doctor’s orders for the eight-year-old brand. nano particle platinum delivery system is designed to function like the skin’s “We wanted to keep up with the consumer’s quest for rapid own GPS system, carrying active ingredients directly to targeted problem results, ease of shopping and identifi cation of products that suit areas deep within the skin’s epidermis. them,” said Brandt. “Not only have we rebranded our product “Time Arrest represents a quantum leap in the way we’re able to deliver line, but strengthened it with the latest technology and innovative active antiaging ingredients into the skin,” said Brandt. products.” The Time Arrest collection will include three new products Dr. Brandt will launch for spring and summer two skin care lines — and two reformulated items at launch: New Time Arrest crème, one that targets acne and another that addresses the signs of aging. The $100 for 1.7 oz.; eye serum, $85 for 0.5 oz., and face fl uid, $90 for collections are the fi rst new products the brand has come out with in 1 oz. Reformulations include a 1.7-oz. V-Zone neck cream for $60 almost two years, and company executives are hoping both ranges will and a 1.25-oz. laser-tight formula for $85. Both products were propel the Dr. Brandt brand towards double-digit retail sales growth. top-selling freestanding items in the Dr. Brandt line that have “We needed to bring some newness and excitement into the now been reformulated with the platinum delivery system brand,” said Melinda Wells-DeRocher, president and chief executive and incorporated into the Time Arrest range. offi cer of Dr. Brandt. “That is what our business partners are looking Industry sources estimate the Time Arrest collection will for and also what our consumers are looking for.” generate anywhere from $3 million to $5 million in fi rst- The new acne segment, Blemishes No More, consists of fi ve prod- year retail sales and place 2009 total global retail sales for ucts designed to treat adult acne through blemish reduction and the Dr. Brandt brand at roughly $50 million. breakout prevention. Scheduled for an exclusive three-month launch The entire Dr. Brandt assortment is also rebranding itself with at Sephora and Sephora inside J.C. Penney stores later this month, a fashion facelift. In an effort to make the brand more consumer- Blemishes No More consists of cleansing pads, a clarifying solution, friendly, Brandt and Wells-DeRocher simplifi ed product names an oil-free hydrator, redness relief cream and a travel kit. All products so that their function was more easily understood by consumers, in the range contain Dr. Brandt’s proprietary complex, Active Impurity and injected some color into the formerly black-and-white pack- Shield, which is intended to prohibit bacteria growth, remove impuri- aging to help delineate different franchises within the brand. ties and dead skin cells, and regulate oil and sebum production. Items from Dr. Brandt’s Time Arrest line. “We really wanted to take Dr. Brandt’s medical knowledge to With each product in the Blemishes No More range priced at retail in a way that made sense to our consumer today.” either $25 or $35, the new line represents the fi rst entry point for the usually pre- Signature skin care products, like Dr. Brandt’s Microdermabrasion, Crease Release mium-priced brand. “The pricing was done strategically,” said Wells-DeRocher. “We and Laser Appeal, have now been grouped in a line called House Calls, and packaged are targeting a younger consumer, aged 18 to 35, who doesn’t have as much money in in turquoise and black boxes. The Poreless collection was renamed Pores No More and her pocketbook. This is the lowest price point he has ever put a product out into the placed in easy to identify blue and black packaging. retail market with.” Industry sources estimate Blemishes No More to generate $7 to Going forward, Wells-DeRocher says Dr. Brandt’s main mission is to get new lines $8 million in fi rst-year retail sales. “out and motoring” in the U.S. while still growing international distribution to plac- Dr. Brandt’s other major initiative is the launch for summer of Time Arrest, a fi ve- es like China and Singapore via its retail partner Sephora. item skin care lineup geared towards Baby Boomers who want to lift, tighten and — Gillian Koenig 8 WWD, FRIDAY, APRIL 17, 2009 The Beauty Report Maybelline Adds Sheen to Lip Category With Color Sensational By Andrea Nagel will transfer on the lips. “Color Sensational’s pig- ments are dispersed in a patented polymer and emol- Maybelline New York is at an interesting lient blend. This blend saturates the pigment and al- moment in its brand life. Acquired by L’Oréal USA lows the color to bloom,” said Debra Coleman Nally, in 1995 and adopting its home city’s name in 2003, director, R&D, L’Oréal USA. Creating a lipstick that Maybelline New York has experienced a string of suc- feels soft on the lips was found to be the second most cesses over the last five years, namely in the eye cat- important lipstick trait. Color Sensational formulas egory, where it is the market leader in mascara. But address this concern by adding honey nectar. in lipstick, Maybelline ranks fourth — a cool $10 mil- In addition to the lipsticks, there are 12 shades lion behind the third best-selling player in an other- of lip gloss — using the same technology — and wise near-even competition among Revlon, L’Oréal and 10 lip liners. Lip items fall into one of four shade Cover Girl — a spread that is reflective of what brand families: red, pink, plum and natural, as consum- executives have, or have not, put into it. ers generally bucket themselves into one of these Maybelline’s strength is inarguably in eye. Sales of categories. Displays on the cosmetics wall group Maybelline’s Great Lash, Define-a-Lash and Volum’ Express franchises exceed $120 million in food, drug Steve Lutz, Serena Giovi, and mass stores, excluding Wal-Mart, for the most re- Debra Coleman Nally centeno talaya by cent 52-week period ended Feb. 22, according to data and David Greenberg. research firm Information Resources Inc. Maybelline also makes the second best-selling eye shadow (Expert photo Wear) and fourth best-selling foundation (Mineral 5 percent dollar share in its first six months, or Power), according to IRI. about $30 million in sales. “This is what happens when you bring innovation and Industry consultant Allan Mottus said excitement and a little bit of sexiness” into a category, Maybelline is being shrewd in its pricing, taking said David Greenberg, president of Maybelline New advantage of the gap left by value brands. York-Garnier. But in lip color, he said, “I don’t think we “The so-called value lines, like Jane and oth- have brought the highest level of innovation there.” ers, are really not doing well and [retailers] have “Over the last five years, our channel of distri- too much stock. So they are trimming them,” Mottus bution has been losing market share of lip color said. Mottus also sees the pricing as an aggressive to specialty stores. It has been the opposite in eye. move against Cover Girl, which is going head to You drive the consumer to where the interest, excite- head with Maybelline in mascara with LashBlast. ment and innovation is, so we haven’t done our job,” A merchandising “By dropping Moisture Extreme [which has said Greenberg, who was named to his post in August. display for Color Sensational. roughly a three percent dollar share] to a $5 price He was senior vice president of human resources for shade families together, so point, they are being shrewd,” said Mottus, “because L’Oréal USA prior to the change. consumers can immediately deselect a the hole in the drugstore area has been in the value The answer, Greenberg said, is the firm’s biggest lip- family they know doesn’t work for them. segment. It is an indication that this pricing situation stick launch in years — Color Sensational, a 48-shade “Usually, lipsticks are all piled on top of one another,” is going to be around for a while.” line complete with glosses, liners, a new color technol- said Greenberg. “This vehicle is much more consumer Maybelline execs said they are managing through ogy and a merchandising concept that has not yet been friendly. It allows her to navigate much more easily.” the sku rationalization programs going on everywhere explored in mass. Color Sensational, which enters Visuals at the cosmetics wall will feature models from Wal-Mart to Walgreens. stores in July, may be the aphrodisiac the cosmetics of different ethnicities and skin color within a certain “A lot we have managed ourselves. Fructis comes to category needs. Data from IRI show cosmetics sales shade family. mind,” said Lutz. ticked up 1 percent year-to-date to $671 million. For “This will align with what consumers will see in our Greenberg added that his group manages its own the most recent four weeks, sales dipped 1 percent. print campaign,” said Steve Lutz, senior vice president portfolio and each year refreshes about 20 to 30 per- Lipstick sales fared among the worst in cosmetics, de- of sales, Maybelline New York-Garnier. cent of sku’s. creasing 9 percent to $334.4 million for the most recent Maybelline executives said retailers have signed on But when it comes to Color Sensational, the breadth 52-week period, excluding Wal-Mart. While it seems to carry all 48 shades, as well as lip glosses and lip lin- of sku’s is warranted. women have cooled to lipstick, Maybelline research ers. Even in this era of stockkeeping unit rationaliza- “I could argue [that when consumers see one of two found consumers still have a desire for it, but today tion, Maybelline said retailers see Color Sensational as a trays of lipstick] that is why the consumer is going to she wants a new, modern take on lip color, from truer proposition that could drive consumers to their stores. specialty,” said Lutz. color payoff, to how it feels on lips, to how it is pack- An aggressive price point may help consumers re- Color Sensational, which was created under the leader- aged. A lipstick’s shade, the research revealed, is the turn to mass for lipstick, too. Color Sensational will ship of former president of Karen Fondu, who now helms number-one driver of lip-color purchases. be priced at $7.49, while its other leading lip proper- L’Oréal Paris, also looks to be more than just a lip range. “Consumers will never sacrifice that. It will influence ty, Moisture Extreme, will drop from $6.99 to $5.50 in “This will become the pillar of our color range. I’ll say them to buy from one brand to another,” said Serena Giovi, the back half of the year. Glosses and liners will retail it is a platform for expansion and it will receive all of vice president marketing, Maybelline New York-Garnier. for $6.49. Maybelline executives would not comment the attention that goes along with that,” said Greenberg. Due to a new, innovative color dispersion system, the on sales estimates for Color Sensational, but industry “This is something you do once in your career. This will color seen on a Color Sensational lipstick bullet is what sources expect the brand to achieve between a 4 and be our principal color brand 25 years from now.” John Frieda Seeks to Sharpen Creative Edge With Luigi Murenu John Frieda has named Italian hairstylist Luigi Murenu as global Jennifer Lopez to magazines like Vogue and Harper’s Bazaar. “Working with John creative consultant to help extend the brand’s worldwide reach. Frieda gives me a global platform to reach a worldwide audience.” “Luigi is very close to the fashion world, and he is certainly one of the best peo- And that global recognition, according to Meysselle and Frieda, is a key part of the ple to know about trends and to guide us in terms of edginess and what’s cool,” said brand’s strategy as it pursues international expansion. “His reach beyond the U.S., Arnaud Meysselle, global vice president for hair care at Kao Brands, which owns particularly in Europe as he is Italian and speaks three languages, is going to be a John Frieda. “His mission is to feed the brand with the visions and the style.” tremendous asset to all those European markets we are expanding in,” said Frieda. According to brand founder and global consultant John Frieda, Murenu’s role will John Frieda, which according to Meysselle has until now been a predominant- be multifaceted. In addition to serving as a spokesman promoting the brand, he will ly U.S. and U.K. “English-speaking brand,” recently opened distribution in Italy, work with agency Kirshenbaum Bond + Partners to create hairstyles for John Frieda’s Russia and Spain and is eyeing Turkey. John Frieda is the number-two brand in the print and advertising campaign and will also be responsible for innovation and con- U.K. — and according to company executives, the brand experienced solid growth sulting with Frieda and Kao Brand’s research and development team to create new in Europe in 2008, capturing market share in places like Germany, Belgium and product. “These are the guys that create the hair trends that the rest of the world fol- Spain. While Meysselle said 2008 “was a bit more difficult” in the U.S. in terms of lows,” Frieda said. “So we’ll be getting his ideas about what he growing market share, the U.S. market still remains number one needs when he is out working with celebrities in the studio or back- in terms of sales for the brand. stage with models, so that between us we can formulate the kind Information Resources Inc. data shows John Frieda generated of products we want to bring out.” Frieda, who has begun discuss- U.S. sales of about $121.2 million in food, drug and mass stores ing product ideas with his new global creative consultant, said he (excluding Wal-Mart) for the year ending Dec. 28, 2008, a sales de- didn’t anticipate the launch of any products Murenu has worked on crease of 5.5 percent compared with the previous year. until next year. Print and television campaigns featuring Murenu’s John Frieda is hoping Murenu will propel the brand’s sales in creative touch will run from the first quarter of 2010 in the U.S., all countries. “The reach of the brand is already there, but one of Europe, Canada and Australia. the great strengths he brings is that he’s a big deal and every edi- Murenu, a fixture on the editorial and runway scene who tor wants to hear what he has to say,” said Frieda. left his home of Sardinia, Italy, at age 20 to pursue a career as a Murenu, already a devout fan of the brand’s styling products, hairstylist in Paris and London, said the multiyear deal at John also has high expectations. “I want to take the brand to another Frieda presented an opportunity to try something new. The move level,” said Murenu. “The John Frieda brand and I are going to into the mass market arena is a first for Murenu, who previously bring a lot of excitement to the customers because that’s what partnered with professional brand Kérastase, which hired him they’re waiting for and that’s what we are going to bring to them.” as the artistic consultant for its Nutri-Sculpt styling products in Murenu will join international creative consultant Harry Josh, 2004. “I am already known for what I do, but this time I’m going to creative color director Nicola Clarke and international creative be able to speak not in a louder range, but to a wider audience,” Luigi Murenu consultant Kerry Warn as a member of the John Frieda team. said Murenu, who has worked with everyone from Madonna and and John Frieda — Gillian Koenig WWD, FRIDAY, APRIL 17, 2009 9

WWD.COM Coty Touts Integration Strides Laura Geller Goes Into Overdrive

NEW YORK — For attendees at last year’s market shopping environment more compel- National Association of Chain Drug Store’s ling. “The category is still strong and women Annual Meeting, Coty Inc. was the talk of the are still shopping,” said van Praag. “We need conference, as retailers awaited to hear the to work with our retail partners on the envi- firm’s plans for the then newly acquired Del ronment and adjacencies.” Retailers appear Laboratories beauty portfolio. willing, despite the effort it will take to rip up For many, it was their first glimpse of Mary van and reformat stores. Drugstore chains, such as Praag in her role as senior vice president of sales CVS Pharmacy, have already initiated efforts for Coty Beauty. Top-tier retail executives were to improve the mass beauty experience, and anxious to learn how Coty would integrate Del’s Walgreens plans to shine a brighter spotlight on cosmetics business, particularly the Sally Hansen beauty in an upcoming prototype. brand. As retail executives gather in Palm Beach Coty will present to retailers its solutions in for this year’s conference, van Praag hopes to show two key areas, namely the nail wall — which the how the firm delivered on last year’s agenda. company is dubbing Color and Care to reflect “We promised to reinvigorate and reinvent the the myriad products in the department — and business,” said von Praag during an interview on the fragrance section, where Coty is the mass Wednesday, a few days prior to the start of market leader. the NACDS Annual Meeting. “We know With the acquisition of Del’s flagship we have powerful brands. The piece brand Sally Hansen, Coty propelled we are reinvigorating is where it’s itself to the leadership position in all happening: retail.” nail care with a 43 percent share Coty Inc.’s total company sales in nail enamel. Russell noted that — post the Del acquisition — are critical Sally Hansen sells 115 bottles of near $4 billion. On the mass side nail lacquer every minute. of its business, Coty Beauty saw by Despite its brand equity,

sales grow 3.6 percent to $556 mil- women do struggle with finding sen

mass k lion for the latest 52-week period, Faye Brookman certain Sally Hansen products, and adding said the company. Coty executives with navigating the nail care wall,

point out that increase was accom- which also encompasses foot care, Inside Laura eric Kyle plished without products in rapidly grow- implements and makeup brushes, eye Geller Makeup ing segments, such as skin and hair care. lashes, artificial lashes and nails, and even de- Studios.

In the year since Coty began integrating Del, pilatories in some chains. Coty researched how photos by the company has fortified its presence at mass women shop the department and has devised a and launched products which have created what blueprint, under the Color and Care header, for By Molly Prior van Praag calls “bright spots” in challenging merchandising the space to build more robust beauty times. The company’s recent success, includes sales in the category. Along the wall, product up Makeup artist Laura Geller, best Sally Hansen Insta-Dri nail color and Rimmel categories are organized by blocks, with color in known for products called Spackle makeup London’s Stay Matte foundation, Kiss & Stay the first position, removers under that and foot primer and Caulk concealer, is banking on bricks-and-mortar to Lipgloss and Sexy Curves Mascara. In fragrance, care nearby. Makeup brushes and acrylic nails fuel a planned growth spurt this year. recent hits include the Tim McGraw scent, which are toward the end. “That is how women shop Geller, a fixture on QVC’s airwaves, continues to expand the was the number-one men’s fragrance introduc- the department,” said Russell. He said the cat- retail presence of her eponymous cosmetics range, Laura Geller tion in 2008, according to Coty; Celine Dion egory has some areas that are overspaced and Ingenuity — identifiable by its signature red lips logo — by set- Sensational; Playboy for men, which will expand others, like color, that require more footage. ting up shop in CVS Pharmacy’s upscale Beauty 360 concept and distribution to Wal-Mart, and Halle by Halle The time is right to reformat the department, in additional Macy’s and Sephora doors. as women rethink beauty rituals and The brand’s expanded retail foot- visit salons less, noted Russell, who print, upcoming product introductions cited industry data that indicates and spring debut on QVC Germany (it 45 percent of women surveyed have already airs in the U.S. and U.K.) is ex- curbed visits to spas and salons. pected to drive sales of the $60 million The drive to save money also is en- brand up by 20 percent this year, said couraging women to migrate from de- the makeup artist. partment stores to the mass market, and Geller also is priming her own retail that presents ample reason to spruce up concept for expansion. Last summer, the fragrance environment, said Coty. she renovated the Laura Geller Makeup The company is determined to get fra- Studios, a store on the Upper East Side grances out from lock and key. that she first opened in 1993. The re- Coty estimates that collectively freshed space retains it former layout of mass retailers are losing upward a center display island and three private of $100 million in sales by securing makeup alcoves, but the white, red and scents behind glass. The key to rein- black interior now showcases a more airy Laura Geller venting fragrance shopping at mass, design — with open counters, shelves said John Burgfechtel, vice president and windows. A 52-inch flat-screen TV hangs over the checkout David Russell, Mary of sales strategy for fragrance, is sam- counter, telecasting Geller’s live appearances on QVC. van Praag and John pling, signage and allowing customers “It could be a vision,” for future outposts, Geller acknowl- Burgfechtel.

Burgfechtel. centeno talaya hoto by to see both the bottle and outer carton. edged. “We had a branded look at Macy’s, at Beauty 360 and at P Putting fragrance behind glass makes Sephora, but not here,” said Geller standing in her 1,100-square- Berry, which is projected to reach $23 million it almost disappear from consumers’ sight. For foot studio, located at 1044 Lexington Ave. in retail sales and to be Coty Beauty’s biggest fe- instance, Coty research found that 40 percent of In addition to her studio, the brand is carried at CVS’ two Beauty male fragrance launch since Celine Dion. those polled claim they did not know the catego- 360 outposts (Geller said she anticipates CVS may open at least 30 To keep the momentum going, launches on ry was available at mass. “We want to take the more units this year), in 18 Macy’s doors and is expected to expand deck include Sally Hansen Hi-Definition nail opportunity to surprise them,” said Burgfechtel. to 170 Sephora stores by year’s end. Laura Geller Ingenuity will end color, inspired by brightly hued iPods, and an up- Retail buyers seem sold on open sell, but top the year in 220 retail doors, up from 170 last year. coming McGraw fragrance called Southern Blend management is still troubled by the cost of pil- When Geller is not on air, she splits her time between her store that aims to attract younger men to the franchise. ferage, said executives. Coty’s research main- and her midtown office, where product development takes place. Also in development is a nail care product, tains that the estimated sales lift of 25 to 30 per- “After standing behind a makeup chair for 25 years, I under- slated to be launched next spring, that Coty is cent of an open-sell fragrance department more stand women’s frustrations with makeup. That is why product billing as “the biggest nail color launch ever.” than offsets the expected 11 percent increase development is so easy for me,” said Geller. The mystery lacquer is expected to reap well of theft. A number of chains, including Target, Her proximity to her clientele has informed her most recent over $25 million in first-year retail sales. Kohl’s and Sears, have achieved positive results product introductions, as well, including the $21 Angle Eyes Rimmel London continues to be the fastest- by opening fragrance displays and adding tes- Waterproof Precision Liner with a bendable fiber tip, designed growing mass color brand for the third year in ters, said executives. for easier, smudge-free application; the $25 Baked To Go, a a row, with global sales exceeding $700 million, Coty’s commitment to building the business portable version of Geller’s number-one selling foundation said David Russell, vice president of sales strat- was fortified with the recent naming of Renato Balance-n-Brighten housed in a spring-fed cylindrical case with egy for cosmetics. Semerari as president of the Coty Beauty divi- a built-in sponge; and the $29 Spackle Tint & Glow, a twist of But beyond new product introductions, Coty sion. He’ll manage all Coty brands available in another best seller, the oil-free primer called Spackle. is primed to commit elbow grease and money to mass distribution in the Americas, Europe, Asia In its lid, the portable version contains two skin highlight- reinvent the shopping environment at a pivotal and the Middle East. Among his key responsibili- ers in Icy (white) and Rosy (pink). Other new additions include time for mass market stores. ties, Semerari will seek new business ventures Baked Lip Color & Gloss Palette for $29.50, Wrinkle Paver Pen “The trends are in our favor,” van Praag said, and collaborations, as well as oversee the con- for $24, Baby Cakes Baked Complexion Palette for $39 and Full noting that cost-conscious shoppers will contin- tinued development and expansion of the Coty Figured Mascara for $23.50. ue to buy beauty, but are migrating to mass in Beauty portfolio. He will also serve as a member “I’m an affordable luxury,” said Geller, referring to the line’s search of value. of Coty’s Executive Committee. The U.S. opera- price points. As for what her Upper East Side clientele cannot Armed with both sales data and consumer tions continue to be led by George Cleary. live without, even in a downturn, Geller says, “Red lipstick.” research, Coty is out to help make the mass — With contributions from M.P. Lipstick sales, her sales associates report, are up dramatically. 10 WWD, FRIDAY, APRIL 17, 2009

The HBA Report WWD.COM Snippets A Down-to-Urth Introduction IFF CFO: International Flavors & Fragrances Face care marketer Urth Skin Solutions for Men Inc. said Thursday it named Kevin Berryman is planning to branch into body care with the launch of four executive vice president and chief financial new products during the third quarter — an initiative that officer. Berryman, who was most recently cfo for stands to double the firm’s annual revenues. the Americas at Nestlé Professional, will officially While the Hollywood-based company has yet to finalize sizes and take the IFF post on May 15. He replaces prices for the body care products, the quartet is to consist of a body Douglas J. Wetmore, who left the company wash and body scrub, a moisturizer and a hand and foot scrub. last July, and will report to chairman and chief Urth, which was founded in late 2006 by Bob C. Mah — and executive officer Robert M. Amen. “[Berryman] whose name is a play on the word Earth — is also introducing brings a wealth of experience in managing a in mid-May a clay mask. global finance organization,” said Amen. “His “I used to run a beverage company based on Chinese expertise in strategy development, business medicine,” said Mah. “But, the men’s [personal care] cate- decision support and people development will gory was growing and I felt there was a niche for an Asian- help to accelerate IFF’s growth and build a inspired, men’s specific line.” stronger company.” Previously, Berryman, 50, The line’s five existing face products, which are carried at worked as Nestlé’s senior vice president of group a handful of spas and Web sites in the U.S. and Europe, fea- control in Switzerland. ture Asian herbs, Mah noted, as well as essential oils and vita- mins “to create nutrient and antioxidant rich” formulations. APPLE OF MY EYE: Recording artist Nelly is The assortment includes the white tea and ginseng-in- gearing up to introduce a signature scent for his fused Face Wash, 8 oz. for $29; Scrub, which contains green Apple Bottoms brand. Apple Bottoms by Nelly tea and rice, 4 oz for $36; Shave Formula, 6 oz. for $22, which is slated to launch in department and specialty employs ginseng and tea tree oil, and SPF 15 Face Balm, 4 stores this fall, priced at $58 for a 3.4-oz. eau oz. for $38, which uses white tea and vitamins C, D and A. de parfum and $48 for a 1.7-oz. size. Ancillary

There’s also an antiaging treatment product called john aquino photo by items include a pearlescent body wash for $20 Hydra Therapy, which contains red seaweed and white and a body lotion for $22. Apple Bottoms linked tea. The 2-oz. item is priced at $52 and it is designed to arms with Romane Fragrances LLC to create revive skin tone, texture and firmness. the fragrance, which features notes of citrus, Urth, which generates roughly $250,000 in annual sales, ac- A few of the existing Urth items. peony, rose, coconut, sandalwood, amber, musk cording to industry sources, could double that figure by year- and apple blossoms. A jewel-accented apple end with the new body care line and a strategy to boost distribution. medallion adorns the bottle. The fragrance Mah said he anticipates the brand could be carried in upward of 50 doors by yearend, a expands Apple Bottoms’ product lineup of denim, network he said will be a combination of retail stores and resort spas. jewelry, eyewear and handbags. ”Apple Bottoms “Men are no longer as shy about grooming,” said Mah, speaking about the opportunity he jeans make a woman feel great about herself, and said he feels the men’s market presents. “They want to look their best and demand quality, ef- men’s that’s exactly the same feeling our fragrance and fective products.” corner body care products create,” said Monte Henige, — Matthew W. Evans chief executive officer of Romane Fragrances.

CHINA OPENING: Acqua di Parma is making its debut in China. The Italian beauty and lifestyle brand has cut the ribbon for its first corner there, Pacifica Embarks on Push Into Retail Stores located in Beijing’s Mitsukoshi department store. Outfitted in dark wenge wood and steel, By Rachel Brown can successfully deliver that message.” Added Harvey- the 215-square-foot space will retail the iconic Taylor, 39, the creative force behind Pacifica, “As we go for- Italian brand’s fragrances, skin and body care Pacifica’s transition from gift brand to beau- ward with Pacifica, our focus is really on the experience line and leather accessories. After Beijing, Acqua ty brand has been given the stamp of approval from spe- with fragrance and that really is within the beauty realm.” di Parma plans to open two more sales points cialty beauty retailers. At beauty stores, the couple explained, Pacifica’s posi- in China, including another department store The Portland, Ore.-based fragrance marketer start- tioning as a natural brand that offers luxurious yet afford- location in Shanghai by October. ed rolling out its products to Sephora stores in the U.S. able perfumes and related products is paramount. Pacifica’s last month and is entering C.O. Bigelow this month. The assortment contains 23 fragrances, with bestsellers being FLAME GAME: Harrods added a 350-g. candle retail launches are the result of a push by husband and Tahitian Gardenia, Tuscan Blood Orange, Hawaiian Ruby to its own-brand home scents line last week. wife Billy Taylor and Brook Harvey-Taylor — founders of Guava and Brazilian Mango Grapefruit, that are available in Dubbed Boujie Luxe Candle, it will round out Pacifica, largely a candle specialist in the past, distributed spray perfumes, body butters, solid perfumes, soaps and soy Harrods Home Scents, a lineup of ambient through regional gift-oriented sales representatives — into candles. Sephora is exclusively carrying an $18 body wash fragrances and candles in seven scents, which the beauty market that began to gain momentum two years in six scents and a $22 body lotion in six scents. In general, bowed in March. “It feels very right given the ago with the release of spray perfumes. Pacifica’s retail prices range from roughly $5 to $22. current economic climate that we are launching “It is by far the most exciting time in the history of our “People love the fact that [Pacifica] is not a big commit- this range at this time, as we are experiencing brand,” said 45-year-old Taylor, who handles operations at ment. It is not like [buying] a signature fragrance that is going what I like to call the ‘cocooning effect,’” said Pacifica, which was established in 1998. “We really have to wear you around all day,” said Taylor. “Another reason we Marigay McKee, fashion and beauty director at clarified our message, and we have the retail partners that are launching at C.O. Bigelow and at Sephora is that Pacifica Harrods. “People are choosing to spend more is a good value. In today’s economy, that is of great concern to time at home and so are purchasing products Solid their customers. They want great quality at a good price.” that enhance the at-home experience. Our perfume Harvey-Taylor prides herself on creating wearable customer is, however, quite knowledgeable is among perfumes often rooted in fragrances inspired by places. and so they want this all within an affordable Pacifica’s For example, the history of Lotus Garden, a fragrance and competitive price range.” Lines within the newest introduced last month, can be traced to a lotus garden in collection, which include Champagne, Peach & offerings. Santa Barbara, Calif., not far from the Cassis; Leather, Tobacco & Cognac, and White home she shares with Taylor. While Tea & Wild Jasmine, comprise 350- and 180-g. sojourning in the garden, Harvey- candles, votive sets and 100-ml. room sprays. Taylor took in all the smells, down The products, which range from 20 pounds, or to the dirt, and reminisced about a $29.86 at current exchange, to 40 pounds, or trip to Anchor Wat, Cambodia. After $59.73, are sold at Harrods’ London flagship, its about a year in development, Harvey- airport stores and on harrods.com. Taylor settled upon a Lotus Garden fragrance drawing upon the garden DOVE’S LATEST TAKE: As the newest phase of its and the trip. Campaign for Real Beauty, Dove has partnered Pacifica has regularly released one with Warner Brothers and the CW to create to two fragrances per year, although “Gossip Girl: Real NYC Stories Revealed,” a Taylor and Harvey-Taylor anticipate promotional ad campaign and miniseries for the the number of new fragrances released brand’s new Burst variant in its Dove Go Fresh annually will slow in the future as the line. Targeting women in their twenties, the number of product extensions based on campaign profiles the real lives of four young existing fragrances mounts. They said women in Manhattan as they juggle career, the fragrances appeal to a broad array family, friends and relationships. “It shares of customers ages 18 to 60, but added the personal stories of four twentysomething that Pacifica’s arrival at Sephora and women — whose lives are very similar to the addition of solid perfumes last year those portrayed in ‘Gossip Girl’ — surviving have helped the brand attract younger and succeeding in New York City,” said Kathy audiences. O’Brien, Dove’s marketing director. “To reach this In the U.S., Taylor estimated that Pacifica has a sig- twentysomething target, you need to go where nificant presence, which he defined as at least seven to they are, and viewership of ‘Gossip Girl’ among 12 fragrances, in some 750 doors, including Whole Foods this demographic is huge.” The series, which and Sephora. He projected that Pacifica’s wholesale sales will run a 90-second spot for four weeks, will air will total $13 million to $15 million this year, up about 15 nationwide during the last commercial break of percent from last year. “Gossip Girl” beginning April 27. WWD, FRIDAY, APRIL 17, 2009 11 WWD.COM Port Authority Helping ‘Save Fashion’ Nat Nast Names DeParis President, CEO Save FaShion, a month-long pop-up Shop with a roSter oF rotat- By Jean E. Palmieri 1998 as co-president. he left the ing designer labels, will debut next month in the heart of the port authority Bus firm at the end of august. terminal in new York. lawrenCe C. DepariS according to Deparis, “i refinery 29 came up with the concept, and the Fashion Center Business has been named as presi- could not have asked for improvement District, the times Square alliance and the port authority are serv- dent and chief executive a more exciting opportu- ing as the sponsors for the retail initiative. it will be the first fashion-oriented officer of the nat nast nity than nat nast. nat event to be held in Blank Sl8, the new 2,500-square-foot space created to showcase Co., a Connecticut-based nast is a truly authentic design, fashion and visual arts created by new Yorkers. men’s sportswear firm, american brand with a refinery 29 has partnered with the consulting firm launch Collective for the effective monday. the terrific story and heritage. business side of Save Fashion, which may include expanding to other markets posts were formerly held patty, Barbara and their such as los angeles, Chicago and San Francisco. by patty nast Canton, WWD team have done a fabulous Barbara randall, executive director of the FCBiD, said thursday, “we are try- daughter of founder nat job in creating a solid base ing to create programs that really support the industry. and as we are having this nast, who will now assume Men’s of beautiful product, brand conversation about zoning [in the garment Center] we feel we have to address that the role of creative director. awareness and quality distribu- fashion has an address [in the neighborhood] that is here to stay.” the former president and ceo of tion, setting the stage for an excit- in total, about 60 la- escada uSa, Deparis will be charged with ing new phase of development in existing bels will be sold in the the development and growth of the family- and new product categories and distribu- space with a minimum of owned business. Founded in 1946, the label tion channels.” 50 percent markdowns, was relaunched by Canton and her sister Canton said nat nast sees many av- and each week a select Barbara nast Saletan in 2000 and is now enues for growth including licensing in group of names will be carried in over 600 doors in the u.S. Saletan men’s wear, a possible move into women’s featured. to try to make is executive vice president of sales. wear and home, retail stores and interna- a personal connection “we were looking to fill this position tional expansion. TYLER with shoppers, most of about three years ago,” Canton told wwD the line is carried in nordstrom, Saks the designers will make in an interview thursday. “we looked for Fifth avenue and better specialty stores.

CHADWICK cameos in the store. about a year and never found the right per- most recently it has moved into resorts,

BY r achel Comey, son.” instead, the company hired richard better hotels and golf shops. Currently madewell, victoria Cohen, the former head of Zegna uSa and limited to sportswear, Canton said the PHOTO Bartlett/vpl, Charlotte now president and ceo of robert talbott, brand is “dabbling” in children’s wear Save Fashion images will be used in the store and online. ronson, acne and rogan as an adviser. that association ended in and will introduce the first bowling shirts are among the labels that February, Canton said, noting Cohen “con- for kids at nordstrom for Father’s Day. will be offered. each week the merchandise and the store’s interior will be re- tinues to be a great friend and adviser and underwear is also on the drawing board vamped to create a different shopping experience. the third week of may will be helped me interview for this position.” and neckwear and dress shirts will be devoted solely to men’s wear, with Steven alan and thom Browne’s Black Fleece She added that although Cohen was not launched for resort ’09. among the participants. merchandise from the past four seasons will be available. officially ceo, “he played an active role in the company was founded in 1946 by refinery 29 co-founders philippe von Borries and Justin Stefno have 6,000 to 10,000 the business and was doing many of the entrepreneur nat nast in Kansas City, units of merchandise, and are banking on sell-through rates of 60 to 70 percent. things larry will be doing.” mo., who saw an opportunity in the bur- they will celebrate the endeavor with an april 30 party. Founded as an online Deparis began his career with escada geoning leisure activity of bowling. he is magazine three years ago, refinery 29 added an e-commerce component that spe- in 1986, as it began to expand the retail credited with creating the original “action cializes in emerging designers about two years ago. “to us, this is really a great op- component of its business. he left escada back” shirt which featured inverted pleats portunity because we have had this connection to these designers since Day one. in 1997 to join Calvin Klein inc. as global to allow for greater comfort and arm move- it is a nice branding position,” von Borries said. senior vice president and chief financial ment and gained the nickname of “the — Rosemary Feitelberg officer. he rejoined escada at the end of King of the Bowling Shirts.” 12 WWD, FRIDAY, APRIL 17, 2009

Financial Malls Struggle to Avoid Path of General Growth

Continued from page one chairman and interim chief executive officer, during a the landlord is unable to make debt service payments, per- jump since 1999, according to Reis Inc., a real estate conference call. haps triggering a bankruptcy filing. information company. With few, if any, new retail con- “We’re taking the lid off and looking at everything, in- “You need an anchor to draw customers,” said cepts in sight, shopping centers are loath to see retail- cluding underperforming stores and stores with leases Coolick. “If an anchor isn’t operating any longer, it ers fail. That’s creating immense financial pressure on coming up for renewal,” said Gayle Coolick, vice presi- changes the complexion of the center. We always have real estate investment trusts as centers lose tenants dent of investor relations. “The message we’re giving an eye out for co-tenancy. Charming has seen a higher while those retailers remaining aggressively push for our landlords is that we don’t take this lightly. We’ve cut number of co-tenancy issues in the past year. Our stores rent reductions. internally very deeply.” are usually in malls with anchors like Wal-Mart, Kmart Malls that wouldn’t have considered lowering rents “Everybody in the business — the landlords, retail- Holding Corp., which has closed stores, and Circuit City 10 years ago are now struggling to keep their centers ers and customers — is out to save money right now,” or another big-box retailer.” fully tenanted. The loss of rental income is taking a said Edward Glickman, president and chief operating REITS and mall developers once believed that if toll on the revenues of several REITs. General Growth officer of Pennsylvania Real Estate Investment Trust. they built it, the stores would come. Now, developers Properties, the second-largest mall operator in the “Recently, we’ve received more requests [for rent relief] want tenants to sign leases before a single shovel goes U.S., had been teetering on the verge of bankruptcy than in the past. Not every retailer is in trouble. Many into the ground. When one or more committed retailers for months (for more on the filing, see sidebar). Simon are asking for rent relief.” pulls out of a project, it can set a mass exodus in motion, Property Group on March 11 defaulted on payment of PREIT is taking a conservative position on rent relief. jeopardizing the viability of the mall. the principal of a loan for the Mall at the Source in “We have leases in place,” Glickman said. “The landlord And even before malls are now being built, prospec- Westbury, N.Y. Simon owns 25 percent of the property. can’t absorb reduced rent. We’re doing whatever we can tive tenants want to know who else is going to be there. Mills Corp. came close to seeking bankruptcy protec- to keep costs down. When there’s vacant space, we pick “Our client wasn’t going to do deals at the Palazzo tion in 2007, when it almost de- [in Las Vegas] unless the land- faulted on obligations on a $1.1 lord delivered eight to 10 of the billion loan. Mills was bought out 15 tenants specified in the co- by Simon Property Group and For more on tenancy clause,” said Jeffrey Farallon Capital Management later retailing, see C. Paisner, a broker at Ripco that year. The Macerich Co. last Real Estate. “With Christian month agreed to several refinanc- WWD.com. Louboutin and Diane von ings on debt totaling $446 million. Furstenberg, we named specific There are some who believe the tenants. The Palazzo asked if predominance of property owners they could replace one tenant has come to an end. “The balance with another tenant, and we of power has actually shifted from said, yes, as long as it was a re- landlords to tenants as a direct re- tailer of similar caliber.” sult of the business climate,” said Retailers cutting back on ex- Naveen Jaggi, senior managing di- pansion have pulled out of new rector of retail services at CBRE centers under development, mak- in Houston. ing other signed tenants nervous. “Where we have a tenant that All of this makes lenders even we believe is in extreme financial more wary. Not surprisingly, fi- distress, we’re trying to work with nancing for new shopping centers them to come up with a mutually has dried up and many projects acceptable basis for maintaining in the works have been scuttled their occupancy in the portfolio,” or put on hold. “The bigger chal- David Simon, Simon Property lenge is how many projects that Group’s chief executive officer, ad- were earmarked to open in 2009 mitted during the REIT’s year-end Strong properties such as Fashion Square Mall may not be as open to lowering rents. and 2010 have been delayed due conference call on Jan. 30, 2009. to the general retail environ- But the chief executive of a REIT ment,” Jaggi of CBRE said. who requested anonymity said the General Growth Properties’ Palisene, a Macerich project pressure is less on strong malls. South Street Seaport may in North Phoenix, could argu- “There is an increasing bifurcation be up for sale. ably have been further along had of the good and not so good proper- economic conditions been bet- ties,” he said. “In challenged prop- ter. “It is a market-driven project erties, where leases are coming up that focuses on the affluent trade for renewal, landlords are dealing. area of Northeast Phoenix,” said In good properties, when leases are Scott Nelson, vice president of coming up, they’re sticking with the development for Macerich. “It’s rents they want. The rents are hold- a flag we’ve planted, and we con- ing steady. In a good mall, even if trol the land. Tenants are saying, sales are down, rents will reflect fu- ‘In these times right now, we’re ture opportunities, not the business going to the existing assets. We of the moment.” know you have the opportunity Andy Grasier, co-president of to accommodate us at the right DJM Retail, which provides lease- time and right place.’ We’ll do it mitigation services to retailers, when we think the time is right. said mall owners are much more It is on hold.” open to making deals, however. On Las Vegas’ West side, “Just a year ago, landlords weren’t Tivoli Village, a 700,000-square- being very responsive to rent re- foot mixed-use project under ductions,” said Grasier. “Now it’s a construction was slated to open different game entirely.” in fall 2009 but has been pushed DJM is working with Pier 1 back to 2010. At High Street on Imports, which has said it will Westeimier in Houston, for ex- terminate the leases of up to 125 ample, “Construction has com- stores if rent reductions aren’t pletely stopped due to the lend- achieved. CVS, Modell’s and Urban Outfitters are also up the cost of that. Clearly, there are situations where ing environment and the retail environment,” Jaggi said. said to be among the chains requesting rent reduc- merchants are in trouble, and we try to do what we can. The project was to have 300,000 square feet of retail tions, which typically range from 5 percent to 25 per- When the retailers were doing well and in some cases space, 300 residential units, two hotels and office space cent, according to Grasier. A poorly performing big-box making a lot of money, they didn’t say, ‘We’re going to pay with a planned opening in fall 2010. retailer seeking rent relief could receive as much as a you 20 percent more rent because business is good.’” There have been reports that retailers are retracting 50 percent reduction if the store was considered im- Charming Shoppes and other chains are taking ad- leases for Xanadu, an ambitious shopping-cum-enter- portant to the center. vantage of co-tenancy clauses, which make leases con- tainment complex in the New Jersey Meadowlands. “Landlords are concerned about any financing or tingent on certain retailers operating in a mall. When Xanadu calls for a 300-foot-high Ferris wheel, co-tenancy issues that would arise if a certain retailer a key retailer closes, remedies the remaining tenant 5,000-foot-long roller coaster and 140-foot-high in- went away,” Grasier said. “They also look for evidence may seek from a landlord can include terminating the door ski slope, as well as retail districts dedicated that companies are being proactive in cutting costs and lease, not paying rent for a period of time, paying re- to teens, home and fashion. Sources said co-tenancy improving their business. Are they reducing sku’s and duced rent or giving the landlord a percentage of sales issues may have arisen. Xanadu officials could not be reducing inventory and the cost of capital associated in lieu of rent. reached for comment. with that? They want to understand the entire picture.” Co-tenancy clauses can cumulatively have a devastat- “Tenants make their decision to go into a mall be- After Charming Shoppes Inc.’s same-store sales ing effect on a mall. The more vacancies there are, the cause there will be a group of tenants that will hopefully dropped 15 percent and total sales declined 14 percent more co-tenancy clauses are potentially activated. make it successful,” said Mark Gilbert, executive vice in the fourth quarter, the retailer said it would close The remedies provided by a co-tenancy clause can president of Cushman & Wakefield’s investment sales 100 underperforming stores unless landlords provided steadily decrease a center’s cash flow, which effects the group in Miami, noting that the clause is written into rent relief. “We want to give our landlords the chance mall’s ability to maintain the property. A rundown cen- leases “to protect the downside for the tenant. There is to keep those stores open by making them cash-flow ter can turn off prospective tenants and shoppers. In the no upside for the landlord. Landlords would always pre- positive with their cooperation,” said Alan Rosskamm, worst-case scenario, the downward spiral continues until fer not to have it.” WWD, FRIDAY, APRIL 17, 2009 13 WWD.COM Financial For full daily stock changes, see WWD.com.

10 Best Performers

DAILY COMPANIES P/E Volume Amt High Low Last %Change

3.15 2.18 Glimcher (GRT) - 831495 2.74 +19.65

5.27 4.41 Zale (ZLC) - 1315199 5.04 +17.76

1.18 0.95 LJ Intl. (JADE) 11.9 327363 1.10 +15.79

3.02 2.55 Revlon (REV) 2.2 737668 2.85 +14.92

7.23 6.11 Ann Taylor (ANN) - 4404507 7.00 +14.75

4.00 4.00 Tefron (TFRFF) - 3111 4.00 +13.96

11.73 10.19 Cabela’s (CAB) 8.9 1007508 11.52 +13.50 General Growth filed for Chapter 11 Thursday. 0.20 0.17 Phoenix Footwear (PXG) - 14533 0.17 +13.33 GGP Fails in Bankruptcy Fight 5.20 3.99 CBL (CBL) 29.6 3975402 4.97 +11.94 By Vicki M. Young 2012, including past due maturities 26.88 23.85 Tiffany & Co. (TIF) 13.6 5627385 26.50 +11.67 of $2 billion, $1.3 billion more coming The Chapter 11 filing of General due in the remainder of 2009 and $6.4 Growth Properties Inc. early Thursday is billion in 2010.” He added that despite the biggest bankruptcy of the year — as attempts to refinance, “virtually every well as the largest in the history of U.S. source of commercial real estate fi- 10 Worst Performers real estate. nancing has dried up, leaving a vastly The nation’s second largest mall inadequate supply of credit to meet the DAILY COMPANIES P/E Volume Amt owner and 158 of its regional shopping demand created by current and upcom- centers filed for bankruptcy court pro- ing maturities.” High Low Last %Change tection in Manhattan. Much of the pressure on General The Chicago-based real estate Growth was a result of its 2004 ac- investment trust said it has a $375 quisition of Rouse Co. for more than 0.52 0.45 Joe’s Jeans (JOEZ) 5.1 97378 0.47 -7.84 million commitment for a debtor-in- $12 billion. Concern over General possession financing facility from Growth’s ability to refinance matur- Pershing Square Capital Management, ing mortgages had been escalating 3.20 2.90 Jaclyn (JCLY) - 1180 3.2 -5.88 the hedge fund run by activist inves- since last fall. With credit tight and tor Bill Ackman. The DIP facility is prospective buyers few, the developer 1.84 1.62 Pacific Sunwear (PSUN) - 1529172 1.64 -4.65 subject to bankruptcy court approval. had been unable to sell its three Las Ackman, who controls 7.8 percent of Vegas properties — the Fashion Show 3.42 3.13 Talbots (TLB) - 587320 3.19 -4.20 Target Corp.’s stock and has pushed mall, The Grand Canal Shoppes at the retailer, so far without success, to The Venetian and The Shoppes at The 24.15 22.52 Citi Trends (CTRN) 21.4 236789 22.73 -3.44 spin off its stores into a real estate in- Palazzo — to help pay down its debt. vestment trust, has been buying shares General Growth had asked holders of 0.80 0.78 Tarrant Apparel (TAGS) - 5987 0.78 -2.50 of General Growth as it’s battled bank- more than $2.2 billion in unsecured ruptcy in recent months. notes issued by Rouse to wait for pay- In its filing, General Growth, which ment until at least next year. 1.72 1.66 Parlux Fragrances (PARL) - 54409 1.67 -2.34 operates more than 200 malls total- On a conference call, Thomas Nolan, ing more than 200 million square feet, president and chief operating officer, 5.15 5.15 Hampshire (HAMP) - 500 5.15 -1.90 listed assets of $29.6 million and li- said the net operating income of the abilities of $27.3 million. The list of company’s portfolio was “higher in 12.59 11.60 Charlotte Russe (CHIC) 135.1 2306282 11.93 -1.89 top trade creditors included tenants 2008 than it was in 2007. So fundamen- which are some of the biggest names in tally, the business remains profitable 3.01 2.98 CCA (CAW) 15.1 2900 2.98 -1.65 fashion retailing, including Sephora, and remains strong.” He stressed the San Francisco, $1.5 million; Lerner REIT is able to pay ongoing interest New York Inc., now part of New York payments, just not the debt maturities * Editor’s note: European stocks are quoted in the currency of their principal exchanges. Shares on & Company Inc., New York; $999,816; when they come due. the London Stock Exchange are quoted in pence, Richemont and The Swatch Group are quoted in Swiss Guess Inc., Los Angeles, $581,460; Nolan said General Growth is still francs and Hennes & Mauritz is quoted in Swedish kronor. All other European stocks are in euros. Macy’s Inc., Cincinnati, $491,871, signing tenants to leases at its 200 prop- and Veneta Bottega Inc., New York, erties. The occupancy rate at the end of $294,400. Often, landlords reimburse 2008 was 92.5 percent, said Nolan, who tenants for outlays for new stores or added the percentage is one of the high- Strong Showing for Retail Stocks renovations on existing units. est levels in the firm’s history as a pub- By Evan Clark lowest investment grade, “BBB-minus.” Certain subsidiaries, including those lic company since 1993. Neiman Marcus Inc. was dropped to that are parties to joint ventures, have not Nolan also acknowledged that as the Retail shares rose 3.2 percent “B” from “B-plus,” and Dillard’s Inc. to filed for bankruptcy court protection. firm was attempting to negotiate for- Thursday as investors shrugged off “B-minus” from “B-plus.” Nordstrom Inc. While consumers might not care bearances with lenders to obtain some the bankruptcy filing of mall opera- remained in investment territory, but was if retailers or mall operators are in breathing room, it had contemplated tor General Growth Properties Inc. and lowered to “BBB-plus” from “A-minus.” bankruptcy, General Growth sought to selling a few properties. However, mixed signals on the economy. All the downgrades were based on expec- reassure its retail tenants that noth- the same capital crisis that prevented The S&P Retail Index gained 10.22 tations of a recovery that will be “slow ing has changed for its day-to-day op- General Growth from refinancing its points to 328.33, outpacing the Dow Jones and dependent on an improvement in the erations. “Our shopping centers and loans also kept potential buyers from Industrial Average, which advanced 1.2 macroenvironment,” S&P said. other properties will continue to offer putting together offers having “mean- percent, or 95.81 points to 8,125.43. Retail stocks weren’t affected by the the same great visitor experience for ingful capital structures.” Macy’s Inc. was among the retailers credit rating adjustments, which came which our company is so well known,” While the firm is obligated to assess being embraced by investors, rising 8.3 late Thursday. Gainers included Zale said Adam Metz, chief executive officer potential offers for any asset now that it percent to $12.52. The department store Corp., up 17.8 percent to $5.04; AnnTaylor of the REIT. is under bankruptcy court oversight, “I just added a new line from Rachel Roy Stores Corp., 14.8 percent to $7; Tiffany & He said the company’s core busi- don’t think it’s our ambition to be small- to its list of exclusives. Rachel Rachel Co., 11.7 percent to $26.50; Sears Holdings ness “remains sound and is performing er,” he said. Roy will be produced with the help of Corp., 9.2 percent to $58.29, and Saks Inc., well with stable cash flows. We believe The REIT is not planning any large- Jones Apparel Group Inc., which owns a 8.8 percent to $3.10. that Chapter 11 is the best process for scale changes in head count, although 50 percent stake in all Rachel Roy trade- Repeating a trend of recent weeks, restructuring maturing mortgage loans, Nolan did say that once DIP financing marks, and will bow in 85 Macy’s doors in economic indicators that could be reducing the company’s corporate debt, is approved by the bankruptcy court, August. Jones also got the nod of approval viewed as bad, but not worsening, sup- and establishing a sustainable, long-term “Bill [Ackman] will look at his role from investors and saw it stock jump 11.5 ported stocks. capital structure for the company.” ongoing with the company.” Nolan de- percent to $6.57. Last week’s 610,000 new jobless In an affidavit filed with the bank- scribed Ackman as one who has been However, Macy’s and J.C. Penney Co. claims marked an improvement from ruptcy court, Metz said General Growth a “very vocal proponent” of General Inc. both saw their credit ratings reduced the previous week, when 663,000 applied has “$18.4 billion in outstanding debt Growth, and said “I think he has ex- to junk status by Standard & Poor’s for unemployment assistance, according obligations that have matured or will pressed an interest at some point in Ratings Services, which assigned subin- to seasonally adjusted figures from the mature between now and the end of joining the board.” vestment ratings of “BB,” down from the Labor Department. 14 WWD, FRIDAY, APRIL 17, 2009 WWD.COM Media/Advertising MEMO PAD MEETING THE PREZ: The White House such as it still exists, in the friendly climes

IMAGES; Correspondents Association’s annual dinner of T rather than in the main magazine. has long been some combination of griping The New York Times Magazine as a whole (at the evident coziness between the press is down 41 percent in ad pages in the and the administration) and gawking (at fi rst quarter, according to the Publishers’ whichever celebrity the various media Information Bureau. In February, T’s PICTURES/GETTY organizations have managed to corral). The frequency was reduced from 15 to 13 LIFE fi rst such dinner in an Obama presidency, issues. — I.C. on May 9, seems guaranteed to amp up the demand for the dinner, and though LESS STYLE ALL AROUND: The Times isn’t some organizations are still wrangling and the only paper trimming fashion coverage.

BARCELLONA/TIME declined to divulge their guest lists, others The Houston Chronicle recently laid have already confi rmed them. off style critic Clifford Pugh, who spent Glamour is bringing along White House 15 years with the paper, during which

MARIANNE Social Secretary Desirée Rogers, who is also time he launched Gloss, the Chronicle’s

BY a “special guest” at the Capitol File after fashion monthly, and covered runway

IMAGES MICHAEL LOCCISANO/GETTY party with Valerie Jarrett and dinner talent shows in New York, Milan and Paris. This PHOTO Wanda Sykes. (The fi rst two are on the departure comes shortly after another Filmmaking brothers Albert cover of Capitol File’s summer issue, set for Hearst Newspapers title, the San Francisco and David Maysles. release on the day of the dinner.) Also at Chronicle, offered fashion editor Sylvia FILMMAKING BARRYMORE BY Glamour’s table: Narciso Rodriguez, Alicia Rubin a buyout, which she accepted. So is IN A CAREER THAT’S SPANNED NEARLY FIVE DECADES, ALBERT MAYSLES Keys, Kenneth Cole, Kerry Washington and Hearst Newspapers scaling back its fashion (and his brother David, who died in 1987) has taken on everyone from Bible the Vice President’s daughter, Ashley Biden. and lifestyle coverage? It’s unclear. A salesmen to The Beatles to Christo and Jean-Claude. But it’s the Maysles’ Time Inc., traditionally a major spokesman said the company will continue Q documentary “Grey Gardens” that’s endured above all else. It’s been the magazine presence at the dinner, will to provide readers with the “best style- basis of a Broadway musical and inspired as many fashion designers as continue this year with a Friday evening fashion coverage available.” He added, Halston and Schiaparelli combined. On Sunday, a bio-fi lm on Jackie cocktail co-hosted by Time and People “This kind of content will come not just Onassis’ quirky cousins (and the infamous documentary they appeared in) at Astor Terrace at the St. Regis. Time from journalists on staff, but from a wide comes to HBO. WWD spoke to the 82-year-old Maysles. said it was unready to reveal its guests, variety of other sources, including the very — Jacob Bernstein but People plans to have Sting and Trudie rich vein provided by Hearst’s own high- Styler, Miranda Cosgrove, Brooke Shields quality magazines.” — Amy Wicks WWD: So here we are with yet another chapter in the “Grey Gardens” saga. Are you surprised and Chris Henchy, Eva Longoria Parker, it’s gone on this long? Kevin Bacon, Chris “Ludacris” Bridges, Jon CHANGES IN WASHINGTON: In a memo to Albert Maysles: Yeah, I think anyone would be. The musical, the HBO fi lm, there have been a Hamm and Forest Whitaker. Sister title employees on Thursday, Washington Post couple of books already. My two daughters just fi nished a book on it. Fortune is striking a theme of celebrities executive editor Marcus Brauchli informed and their fi nance-oriented signifi cant employees about a reorganization at the WWD: What did you think of the HBO fi lm? others, arguably more on-brand than last newspaper that will create new reporting A.M.: I thought it was good. I’m not an expert on fi ction. I make documentaries and a good deal of year’s guests, Heidi Montag and Spencer groups and streamline editing desks, in the fi lm takes place before that. But the stuff that was contemporary with the fi lming was accurate. Pratt. At its table this year will be George anticipation of the impending integration Lucas and his girlfriend, Melody Hobson, of its print and digital news operations. WWD: There’s a hilarious moment in the HBO movie where you and your brother are putting on president of Ariel Investments, and Glenn As of May 1, Kevin Merida, now assistant fl ea repellent. Close and her husband David Shaw, a managing editor for national news will A.M.: We sprayed ourselves against the fl eas, and we put on anklets to protect us from them. All of managing partner at Black Point Group. become national editor; Emilio Garcia-Ruiz, which worked well because we never got fl ea bites. But they were so bad that when I was fi lming Last year, President Bush wondered assistant managing editor for sports and Edie on the porch, she was wearing a very short skirt and I noticed that whether Pamela Anderson and Mitt Romney weekend editor, will become local editor, her legs were totally covered in bites. in the same room wasn’t a sign of the and Sandy Sugawara, assistant managing apocalypse. This year, President Obama editor for business, will become editor WWD: Do you think things might have been different for the might note The Atlantic’s table, which of the universal desk. A spokeswoman Beales if antidepressants and antianxiety drugs had really will seat both Newt Gingrich and pouty said the new structure is intended to been on the market back then? “Gossip Girl” co-star Ed Westwick. (Bonus: streamline operations and “refl ects the A.M.: I don’t think they needed that. I get alarmed every Obama has already made jokes about the likelihood that some people will take the time I see in the press that they’re mad or crazy. There show.) Rick Schroder will also be there. The Voluntary Retirement Incentive Package. have been accusations of exploitation [on our part]. If Atlantic will also host a Friday night dinner We can’t rule out further changes.” you look up the obituary for Mrs. Beale, it says the two and a pre-dinner cocktail reception at the Brauchli added that there are still many women were the ‘targets’ of our fi lm. I think that was Hilton, co-hosted by the National Journal gaps in the new plan, including what will unfair to them and to us. We didn’t want to do any Group and ABC. happen in the Style department. He didn’t damage to them. We really liked them and dealt with Newsweek, Bloomberg, and Vanity Fair provide more details in the memo or at a them in a very respectful fashion. Some of the press were unable to comment on their guests town hall style meeting that was held at don’t understand that it’s a good thing for people to by press time, though the latter two have 2 p.m. Thursday. “Working with the new open their hearts and minds to a camera person. And already said they are cohosting an after leadership team, we will come back to it’s also important to recognize that when somebody party this year instead of the separate ones you with more specifi cs in coming weeks. opens their heart to a camera, it’s a sign of good health. they held in the past. A spokeswoman We plan to move as quickly as possible to for The New York Times said the paper announce further details of the structure WWD: Have you seen reality shows? You think those people would again be skipping the dinner, which of the reporting and editing groups. Some are all healthy? it stopped attending in 2007, citing the new roles will emerge from this process, A.M.: Well, that’s not real. So much of that is staged. What is appearance of excess friendliness with the and we expect to post those jobs as well,” it, “The Osbournes”? I sat and watched some of that and it was government. — Irin Carmon he said. — A.W. disgusting. The overuse of profanity is just revolting. It’s time that we put into the media people and events that illuminate NOT QUITE AS FASHIONABLE: Speaking of PERSONAL JESUS: According to sources, our own experience through theirs. When you see “Grey The New York Times, executive editor Bill Dolce & Gabbana’s fall-winter men’s wear Gardens” there’s something to be learned from that. In spite Keller rolled out details of the previously campaign will feature Madonna’s sometime of managing to live on very little income, they’re survivors and warned of budget cuts in a staff memo boy toy Jesus Luz alongside the house’s there’s love there between the two of them, and a lot of talent. I’ve Thursday. In addition to cuts to freelance runway and campaign staple David Gandy. spoken to people who know good voices and they say Edith could budgets and the elimination of the The new campaign, shot in New York very well have been a professional singer. And the fashion world has freelance-driven City and regional sections by Steven Klein, will also feature models been so excited by Edie’s fashionable dresses. on Sundays and the Escapes section on Noah Mills and Adam Senn. A company ▲ Drew Barrymore, star of the Fridays, the Times is spokeswoman declined HBO fi lm “Grey Gardens,” with WWD: But 40-something cats in a house and a couple dozen also axing the weekly to comment on the Albert Maysles at the New York raccoons? Painting your nails green is eccentric. This is… fashion spreads in its rumor. — Emilie Marsh premiere on Tuesday. A.M: It’s eccentric. Sunday magazine. “We will focus our NEW AT IN STYLE: WWD: No more than that? fashion coverage in the Ron Prince is the new A.M.: They didn’t cut their grass either. That’s kind of crazy, in view of the fact that their T Magazines, and the associate publisher, neighbors were doing that. Sunday and Thursday marketing, at In Style Styles sections,” Keller magazine. Most recently, WWD: Look, one of the things the new movie suggests is that you can’t exploit someone who wants wrote. “The last day he was a marketing to be exploited. And they wanted to make the movie. But that doesn’t make them not crazy. the weekly magazine consultant to magazines A.M.: Mmmm. Hmmm. Well, my fi rst profession was in psychology. will run a fashion such as Lucky, Self, spread is May 3. The Teen Vogue, Rolling WWD: Yes. You were a psychology professor at Boston University. Sunday magazine plans Stone and Us Weekly. A.M.: Right. And I worked at a mental hospital. So I know a little. I wouldn’t call them crazy. Walter to run T supplements Formerly, he was an Goodman wrote an article in The New York Times, a critique of the fi lm. He was trying to protect them several times a year.” associate publisher from the camera, so to speak, by saying, “Why are they showing all this fl abby fl esh?” Obviously he had The decision may at Allure, Travel + a problem with age. Not their problem. His. And Edie wrote a wonderful letter to answer the piece but it indicate the Times has Leisure and Food & wasn’t published. So I called the editor and asked them why not. And they said, “She’s schizophrenic.” been more successful Wine. He will report to That’s crazy. That’s crazy. She was very much in touch with the real world. So was her mother. Maybe more in capturing fashion publisher Connie Anne so than most people. She was on to the shenanigans of the Republican Party way before the rest of us. and luxury advertising, Phillips. — A.W. WWD, FRIDAY, APRIL 17, 2009 15 WWD.COM Atlanta Buyers Focus on Contemporary Looks By Elizabeth Thurman and she said she bought “broad and wide, not narrow and deep” in order to keep inventory down, adding that ATLANTA — The prevailing mood was “down but not out” her vendors are being more flexible with minimum or- at last month’s apparel market at AmericasMart. ders and are cutting to order. Buyers pared their budgets but were receptive to “If it’s a ‘wow’ piece, I’ll buy it, but it really has to fresh, creative product and agreed keeping lower in- jump off the rack at me,” she said. “Right now, it’s all ventories and buying closer to season are critical as a about keeping a balance between low bridge prices and hedge against the recession. high bridge prices. My customer may not buy a $900 Vendors, meanwhile, eased prices and payment jacket, but a $500 will sell if it pops.” terms to encourage orders. Contemporary apparel She noted the importance of bright colors and bold and accessories were among the strongest categories stripes, and said day dresses still sell strongly, particu- at the three-day show that ended March 30, and im- larly when paired with boots and tights. mediates with major visual interest took precedent Lisa Adams, principal of Therapy with Lisa Adams, among buyers. said that traffic and business were down in her show- “Coming into the show, I felt like I was going gro- room during the March show and reported that buy- cery shopping after eating Thanksgiving dinner,” said ers were writing closer to season and relying on im- Michael Evangelisti, owner of five Bermuda Bay resort mediate deliveries. shops in New Orleans, Miami, Charleston, S.C., and “Buyers are becoming very price-conscious,” Adams two in Newport, R.I. “But I ended up writing [orders Buyers at AmericasMart lessened their budgets and zeroed in on said. “The contemporary customer is requesting the for] some interesting things that were pretty special. visually appealing immediates. lower price points as well. The key to weathering the It was certainly not a bustling market, but there was Instead of pursuing new customers, many retailers recession is to keep overhead to a minimum and to sup- some life.” were working to cultivate existing accounts. ply the customers with those low price points.” Evangelisti, who hadn’t shopped AmericasMart in “Trying to get new customers right now is hard,” said Adams plans to host special events in her showroom about four years, picked up summer dresses and sports- Julie Routenberg, owner of two modern bridge Potpourri and offer buyers incentives to drum up interest. wear from Donna Morgan and Alberto Makali, whittling stores in the Atlanta area. “I’m just concentrating on Bradley Foster, owner of Bradley in Mobile, Ala., his budget by about 20 percent. He’s also dropped about nurturing the ones that are loyal to my stores.” stuck with core lines such as Lafayette 148, Fabrizio 10 lines that weren’t moving. Routenberg bought sportswear and dresses from Giani and Belford, and responded to more feminine Evangelisti said vendors were willing to work more Gender Bias, Linda Lundström and Lafayette 148; shapes and fabrics. She wrote orders for Suzi Rohr with him by switching out goods that weren’t selling well plenty of knits, and was particularly impressed with belts, especially those at lower price points. and offering lower prices. jackets, especially in casual knit styles, from lines “I really like longer sweaters right now,” Foster said. “People always say that buyers and vendors have a such as Damask. She picked up Sandy Duftler belts to “I think we’re getting away from the swing shape.” partnership,” he said. “Truthfully, this is the first time I add easy updates to existing looks and plans to focus Foster said she’s buying closer to season and carry- really feel like the majority of vendors and retailers are more on denim with lines such as Beija-Flor, Vitamina ing less inventory in order to cope with the tumultuous actually working together. We used to be adversaries al- and Cambio. economy, as well as holding special events to help nur- most, but now it really is a kinder, gentler relationship.” Routenberg’s fall budget was down about 15 percent, ture her customer base.

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