Page 1 Wednesday ▲ ▲ WEST: Economy FINANCIAL: ▲ FASHION: stalls downtown Prada Surveying L.A. retail projects, profi ts the crop of page 13. decline new ready- 22 percent, to-wear ▲ RETAIL: Michael page 2. designers, Kors’ upbeat opening page 4. in London, page 7. Women’s Wear Daily • The Retailers’ Daily Newspaper • April 29, 2009 • $3.00 WWDWEDNESDAYSportswear Cape Town Not all caped crusaders are of the comic book sort. For the cool and chic, there are edgy versions, such as this cotton and metal embroidered one, worn over an acetate and polyester brocade dress, both from Gryphon New York. Rebecca Taylor belt; Hue tights; Robert Clergerie shoes. Planning the Structure: Estée Lauder Cos. Sets Core Management Team By Molly Prior As Fabrizio Freda readies to ascend to the chief executive post, the Estée Lauder Cos. Inc. is rejiggering its leadership ranks in a move to gather key decision makers around one table to draft the future direction of the 63-year-old beauty giant. Freda’s new leadership structure and the other new appointments will become effective July 1. Replacing Lauder’s current structure of an executive committee comprised of group presidents and a regional head will be the Executive Leadership Team of 27 senior executives from all the brands, regions and functions. “The idea behind the structure is to create a more integrated organization,” said Freda, who joined the company as president See Lauder, Page3 PHOTO BY ROBERT MITRA; MODEL: LINA FOR NEW YORK MODELS; HAIR AND MAKEUP BY MICHELLE COURSEY FOR ARTISTSBYTIMOTHYPRIANO.COM; FASHION ASSISTANT: GRETCHEN KATIGBAK; STYLED BY ANTONIA SARDONE STYLED BY GRETCHEN KATIGBAK; ASSISTANT: FASHION MICHELLE COURSEY FOR ARTISTSBYTIMOTHYPRIANO.COM; MODELS; HAIR AND MAKEUP BY MITRA; MODEL: LINA FOR NEW YORK ROBERT PHOTO BY 2 WWD, WEDNESDAY, APRIL 29, 2009 WWD.COM Prada Earnings Slide 22 Percent in ’08 By Andrew Roberts Prada said cash flow from operations and good working capital management made it pos- WWDWEDNESDSportswearAY MILAN — Prada SpA on Tuesday added its name sible to maintain a balanced net financial posi- to the list of luxury firms blighted by the eco- tion, adding careful handling of the warehouse FASHION nomic downturn, reporting a 22 percent drop in had helped reduce product inventory. 6 New designers must figure out how to develop earnings in fiscal 2008. The group did not break down revenues by a luxury business around expensive clothes that For the 12 months through Jan. 31, net profits at brand or geography. have garnered praise but lack a core clientele. the Italian fashion group, which owns the Prada, Last year, Prada increased net investments by Miu Miu, Car Shoe and Church’s brands, fell to 68.8 percent to 158.7 million euros, or $231.7 mil- GENERAL 98.8 million euros, or $144.2 million, from 126.8 lion, to open 34 new stores, predominantly in Asia Estée Lauder is rejiggering its leadership ranks in million euros, or $173.8 million, in fiscal 2007. and Europe, and strengthen industrial facilities. 1 a move to gather key decision makers around one Dollar figures were converted at average ex- At the close of 2008, Prada’s directly operated table to draft the future direction of the beauty giant. change rates for the periods to which they refer. store network totaled 238 boutiques worldwide. Group revenues dipped 0.7 percent to 1.65 “In 2008 the Prada Group implemented the 2 Prada SpA, which owns the Prada, Miu Miu, Car billion euros, or $2.4 billion, although at con- most aggressive investment plan it has ever un- Shoe and Church’s brands said earnings fell 22 stant exchange and factoring in the same level of dertaken,” Bertelli said. “When the crisis is over, percent in fiscal 2008 to $144.2 million. consolidation of the Church’s brand, which was the Prada Group will be able to benefit from an A day after it announced a round of layoffs, acquired in June 2007, these gained 0.2 percent. industrial and distribution structure that is even 9 Hanesbrands Inc. held its annual meeting in “Above and beyond the uncertainty of the stronger than before in order to make the most Manhattan, while protesters picketed outside. moment, I am convinced that it is an entrepre- of the opportunities that will arise during the neur’s task to meet difficult times head-on with new development cycle.” MARKETING: The recession has reduced the s 10 a medium-long-term vision,” chief executive of- By channel, sales via directly operated stores consumer experience to drudgery for many ficer Patrizio Bertelli stated. gained 5.6 percent at constant exchange to 871.3 Americans, according to a new study. A company spokesman added Prada’s oft- million euros, or $1.27 billion, and were 1.5 per- The Sunglass Hut shop in Rockefeller Center in postponed initial public offering was not a man- cent up on a like-for-like basis. Wholesale rev- 12 Manhattan has been restaged this week as the agement priority for now due to the unfavorable enues fell 4.7 percent to 737.5 million euros, or first Prada Eyewear Concept Store. market conditions. $1.08 billion, which Prada attributed to the im- Earnings before interest, taxes, depreciation plementation of a selective distribution policy WEST: The recession has crashed the downtown and amortization fell 10.7 percent to 282.2 million and weaker demand in the U.S. market. A dress from J.C. 13 party conceived for car-obsessed Los Angeles, euros, or $412 million, which the company attrib- Revenue from royalties decreased 15 percent Penney’s I [Heart] short-circuiting a major push for retail. uted primarily to exchange rate fluctuations and to 39.5 million euros, or $57.7 million, due to the Ronson collection. efforts to strengthen the retail channel. consolidation of the sales campaign for the first Net financial indebtedness increased 6 per- Prada phone by LG, the company said. Classified Advertisements.................................................................................................15 cent to 537.4 million euros, or $784.6 million. For more on Prada, see page 12. TO E-MAIL REPORTERS AND EDITORS AT WWD, THE ADDRESS IS [email protected], USING THE INDIVIDUAL’s NAME. WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2009 FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. VOLUME 197, NO. 90. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one additional issue in January, May, October, November and December, two additional issues in March, April, June VF Profits Fall, Firm Lowers Forecast 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 pectedly deteriorated.” provided by Condé Nast Publications: S. I. Newhouse, Jr., Chairman; Charles H. Townsend, President/CEO; John W. By Ross Tucker Bellando, Executive Vice President/COO; Jill Bright, Executive Vice President/Human Resources. Periodicals postage Revenues in the jeanswear coalition, home paid at New York, NY, and at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. 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First copy of new subscription will be mailed within four weeks after receipt of order. Address all In addition to reporting a double-digit decline European jeans business. editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. For permissions and reprint requests, please call 212-630-4274 or fax requests to 212-630-4280. Visit us online in earnings for the three months ended March “The change in market conditions is impact- at www.wwd.com. To subscribe to other Fairchild magazines on the World Wide Web, visit www.fairchildpub.com. 31, VF’s management said revenues were antici- ing our jeans business more than our other busi- Occasionally, we make our subscriber list available to carefully screened companies that offer products and services pated to fall between 5 and 7 percent in 2009, a nesses,” said Karl Heinz Salzburger, president that we believe would interest our readers. 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