HAIR NEW TUNE ONE DIRECTION RAISING LAUNCHES THE HAIR-CARE MARKET IS BOOMING THANKS THEIR FIRST HAMPTONS TO THE GROWTH FRAGRANCE, OF TREATMENTLIKE OUR MOMENT. HOME PRODUCTS. ISAAC MIZRAHI TO OPEN A POP-UP SHOP IN SOUTHAMPTON. PAGE 8 PAGES 10 TO 14 PAGE 16 WORKER SAFETY IN BANGLADESH Senate Panel Blasts U.S. Firms Over Accord By KRISTI ELLIS WASHINGTON — U.S. retailers and brands came under fire in the Senate Thursday for refusing, with the exception of three companies, to sign a legally binding Bangladesh fire and safety plan. FRIDAY, JUNE 7, 2013 ■ $3.00 ■ WOMEN’S WEAR DAILY Sen. Robert Menendez (D., N.J.), chairman of the infl uential Foreign Relations Committee, took a hard WWD line against American companies that have formed their own alliance to tackle fi re and building safety issues in Bangladesh after declining to sign an inter- national accord, warning them to get their act togeth- er “sooner rather than later.” The committee stepped into the controversy swirl- ing around inadequate fi re and building safety stan- dards and enforcement in the Asian nation’s apparel industry in the wake of the Rana Plaza building col- lapse in April that has claimed 1,129 lives and a fi re at Tazreen Fashions in November that killed 112 gar- ment workers. “Why is it that only a handful of American retailers have signed on, but many more European companies have signed on to the IndustriALL accord?” asked Menendez, addressing the hearing, which included three Obama administration offi cials and an attor- Ralph ney representing major retail and apparel industry groups. “What confi dence can you give me that there are serious efforts under way by American retailers to help improve labor conditions?” Eric Biel, acting associate deputy undersecretary Revs Up for international affairs at the Department of Labor’s Bureau of International Labor Affairs, noted that the Labor Department is not endorsing any plan, but said, Don’t call it resort. “It is our hope that as some of the details become Ralph Lauren prefers clearer [with implementation of the IndustriALL-led “pre” — in this case, accord], maybe some of those concerns will be obvi- ated and there will be momentum for additional [U.S.] pre-spring, which he brands to sign on, but they have to make their own showed for the fi rst time in determination.” An alliance of North American retailers led by Wal- a formal way on Thursday Mart Stores Inc. and Gap Inc. has declined to sign the at his Madison Avenue’s SEE PAGE 20 women’s store. “Cruise used to be sailor pants and bathing suits, and it’s become a much more J. Crew’s Global Push important season,” Lauren By SHARON EDELSON said, showing the season’s breadth with such looks NEW YORK — J. Crew Group Inc. sees plenty of as this suede wrap coat. “Pre” isn’t the only thing room for expansion. top of the designer’s mind. There’s Polo Red, the The retailer plans to open more stores in the U.S., new fragrance aimed at men who, like him, are even in markets where it already has a presence; ramp up growth in Canada, where it has eight stores; fans of fast cars. For more on resort, see pages open a handful of units in London, the fi rst of which 4 to 7. For more on Polo Red, see page 15. on Regent Street will bow before the holidays, and unveil locations in Hong Kong and Tokyo. Its men’s retail concept, with 10 units, is also ripe for growth, Stuart C. Haselden, chief fi nancial offi cer, told WWD following the company’s fi rst-quarter con- ference call with analysts on Thursday. 2014 Generally, in the U.S., “we’re still identifying op- portunities to densify,” he said. “Beyond that, we’re looking at markets where we’re underrepresented RESORT and continue to evaluate the men’s business, which COLLECTIONS has exciting growth potential.” The retailer opened its fi rst men’s warehouse store on Long Island during the quarter. The expansion plans come as J. Crew’s sales continued to grow in double digits in the fi rst quarter even as profi ts were pressured by markdowns and higher expenses. For the three months ended May 4, net income de- clined 4.5 percent to $29.3 million from $30.7 million in the prior-year quarter. Adjusted earnings before interest, taxes, deprecia- tion and amortization was $101 million, compared to $101.6 million in the fi rst quarter of last year. Total revenues rose 12 percent to $564.1 million PHOTO BY JOHN AQUINO from $503.5 million as store sales were up 7.4 percent SEE PAGE 20 2 WWD FRIDAY, JUNE 7, 2013 WWD.COM LVMH Files Another Suit Against Hermès THE BRIEFING BOX “I’ll let you decide,” he said. IN TODAY’S WWD By PAULINA SZMYDKE Speaking at LVMH’s annual meeting last April, Arnault said: “ Yo u know, we found ourselves owning PARIS — The legal tussle between LVMH Moët shares in this company…unexpectedly. We had not Hennessy Louis Vuitton and Hermès just got nastier. planned to be shareholders in this firm. We made a LVMH filed civil charges on Tuesday against an financial investment, and that financial investment unidentified manager at Hermès, an LVMH spokes- had an outcome that we had not expected.” man confirmed Thursday without elaborating further. This is the latest lawsuit between the two lux- In an article published in French daily Le ury giants in their increasingly heated battle. As Figaro on Wednesday, LVMH vice president Pierre reported, in September 2012 LVMH filed a suit Godé was quoted as saying the group had filed the against Hermès for slander, blackmail and unfair charges “following what was said by the manager.” competition after Hermès had filed a criminal com- Although vague in his statement, Godé was pre- plaint against LVMH, accusing it of insider trading sumably referring to Patrick Thomas, chief execu- and manipulation. tive officer of Hermès International, who alleged Godé added in Le Figaro: “Hermès’ [multiple] during the company’s annual meeting on Tuesday campaigns [are] aimed to destabilize us. Our A resort look that LVMH had built up its 22.6 percent stake in patience has its limits. It’s time that the public by Balenciaga. Hermès in a “fraudulent” way. learns the truth.” For more Asked by one shareholder how Hermès account- Godé’s statement Tuesday came just days after resort, see ed for a recent declaration by LVMH chairman and the French market authority, the Autorité des WWD.com. ceo Bernard Arnault that he came into the holding Marchés Financiers, recommended that LVMH be unexpectedly, Thomas said “either LVMH is disor- fined 10 million euros, or $13.2 million at current ex- ganized” for not knowing how it came to amass its change, for dissimulating its gradual acquisition of initial 17.1 percent stake — yielding more than a Hermès stocks between 2001 and 2010. U.S. retailers and brands came under fire Thursday for billion euros, or $1.3 billion, in capital gains — or The authority’s enforcement committee is to re- refusing, with the exception of three companies, to sign a Arnault did not tell the truth. veal its final decision no later than July 31. legally binding Bangladesh fire and safety plan. PAGE 1 J. Crew Group Inc. on Thursday said first-quarter profits declined as higher expenses and markdowns offset a double- digit sales gain. PAGE 1 Cool Weather Drags Down Ann Inc. Net Starting today, shoppers can head to Southampton, N.Y., to significant impact on our busi- The company is focusing see the world of Isaac Mizrahi from his retail lens. PAGE 8 By EVAN CLARK ness, primarily at Loft,” said Kay on a number of areas to drive Krill, president and chief execu- growth this year, including The continually shrinking number of retailers reporting NEW YORK — Ann Inc.’s profits tive officer, on a conference call multichannel fulfillment that monthly comparable-store sales emitted some signs of caught a chill in the first quarter. with analysts. makes better use of inventory PAGE 9 Net income fell 27.2 percent Krill said business picked up as across its Web and store op- economic vitality in May. to $20.9 million, or 44 cents a di- the weather grew warmer and that erations, international ship- luted share, from $28.7 million, both Ann Taylor and Loft were on ping and real estate tweaks. After years of flat growth, mass retailers, which generate the or 58 cents, a year earlier. The The company plans to continue bulk of hair-care sales, are once again experiencing a sales retailer warned investors last “right-sizing” its Ann Taylor bounce in the category with three-step regimens. PAGE 10 month that unseasonably cool doors, shifting to its smaller, weather had hurt results. more productive new concept The multitasking philosophy of recent skin-care trends is Sales for the quarter ended 2.5% store layout. Loft is being ex- transforming the often-marginalized hair-care category, even in May 4 gained 2.5 percent to panded into small and midsize the traditionally uninterested prestige retail realm. PAGE 12 $574.5 million from $560.4 ANN INC.’S FIRST-QUARTER markets. million as comparable sales SALES GROWTH. Roxanne Meyer, an analyst Boy band One Direction unveiled its debut women’s slipped 0.5 percent. Comps in at UBS, said the Loft division fragrance, Our Moment, in London Thursday. PAGE 16 Ann Taylor’s mainline business would likely make more use of increased 6.2 percent as Ann track to be more profitable.