The Color of Money

FUND BIG IS BETTER HOLT RENFREW AIMS TO ENHANCE ITS LUXURY NICHE RAISER GOING BY FOCUSING ON ITS LARGER STORES. PAGE 8 E-COMMERCE SITE WEARABLE JUST FAB RAISES AN ADDITIONAL $85 MILLION TO HELP FUEL GLOBAL REBECCA MINKOFF GETS SET TO EXPANSION. PAGE 9 LAUNCH A COLLECTION OF ACCESSORIES WITH WEARABLE TECHNOLOGY. PAGE 3 PICKY TEENS A &F Changes Strategy As Logos Lose Allure By VICKI M. YOUNG LOGOS ARE LOSING some of their consumer appeal — and nowhere is that more evident than at teen re- WWD tailers like Abercrombie & Fitch Co. Abercrombie revealed Thursday it is moving away from the logo business, and will eventually exit the FRIDAY, AUGUST 29, 2014 Q $3.00 Q WOMEN’S WEAR DAILY category entirely in its North American stores. That’s a major change from the company’s heritage, and the days when the three As — Abercrombie, American Eagle Outfitters and Aéropostale — dominated the mall corridors competing against each other with their logos front and center in store windows and on display tables. To be sure, brands in general have been relying The less on logos, particularly in the accessories sector where companies from Coach to Gucci have been de- emphasizing their logo products. The move by Abercrombie is also a nod to how the teen consumer has changed over the years and why teen retailers have seen pressure in the last few quarters. Color of In the case of Abercrombie, the female consumer has been more oriented toward fast fashion. And while logo product has been decreasing at the A&F brand, it hasn’t been moving out as fast at the Hollister brand, which typically has a higher percent- Money age of logo offerings. That was evidenced by the steep second-quarter comparable-store sales decline of 10 The ever-ubiquitous percent at Hollister compared with a dip of 1 percent at the core A&F branded stores. Kardashian clan is known Michael Jeffries, chief executive officer, said in a for many things, but one conference call to Wall Street analysts, “In the spring season, we’re looking to take the North American logo in particular is its ability business to practically nothing, but protect logo in in- to generate mountains ternational stores.” of cash. The latest Jonathan Ramsden, chief operating officer, said in a telephone interview, “Our consumer is less logo- example is Kim, Khloé oriented. They are [no longer] walking billboards.” and Kourtney’s venture Ramsden explained that for now, the company will with Farouk Systems support the logo category in its overseas stores because to market a collection SEE PAGE 9 of hair tools and styling products in salon and mass-market distribution. Macy’s New Bronx Store: “I am going for a billion [dollars],” Localization in Action exulted Farouk Shami, executive chairman and By DAVID MOIN founder of the company. NEW YORK — Macy’s Inc. might be thinking global, Although he qualified eyeing China and the Middle East for stores, yet it his grandiose vision as still acts local. That’s evident in the Bronx, where the retailer this a long-term effort, he month opened a three-level, 160,000-square-foot store nevertheless predicted in the Mall at Bay Plaza in Baychester, at the foot of Co-op City. It’s the first new store to be built by Macy’s the Kardashian Beauty in New York City in 40 years — the last time was on hair-product line would Queens Boulevard in Queens — and is a case study generate more than of how the company taps an urban market and micro- manages the merchandising of the big national brands $200 million in retail and private brands it carries throughout the chain. sales in the first year. Macy’s has opened several city doors through take- For more, see page 4. overs of existing boxes like Abraham & Straus and Stern’s, but the new enclosed 780,000-square-foot Mall at Bay Plaza, developed by Prestige Properties, en- abled the 850-unit, $28 billion department store group to build from the ground up. “As big as we are, we feel small. We feel connect- ed,” said Randy Scalise, senior vice president and re- gional director of stores for Macy’s Northeast region, and a 33-year veteran of the company. On the selling floor, Scalise talks demographics and how Macy’s homes in, as part of its My Macy’s localization program. The Bronx store has a clean, crisp look, with ceramic white tiling and overhead LED lighting, but the distinction is in the merchandising. While the labels are predictable — tried and true PHOTO BY JOHN AQUINO, STYLED BY SHARON BER brands like Michael Michael Kors, Tommy Hilfiger, SEE PAGE 8 2 WWD FRIDAY, AUGUST 29, 2014 Sales Rise, Profits Ebb at Ferragamo DIGITAL BRIEFING BOX cent of sales. “China has a differ- change rates. The region was pe- FOR MORE COVERAGE, FIND US ON WWD.COM, SOCIAL AND MOBILE. By LUISA ZARGANI ent speed for different cities,” said nalized by a 4 percent decrease Norsa. Hong Kong and Macau are in the second quarter due to an MILAN — Salvatore Ferragamo “still growing,” he said. While ac- expected slowdown following the SpA’s net profit in the first half knowledging a slowdown there, he consumer tax increase. Norsa ex- ON FACEBOOK of the year dropped 3 percent, said Hong Kong had a “very strong” pects low-single-digit growth for to 78 million euros, or $106.8 first half of August and expressed a the year in the country. million, compared with 81 mil- positive outlook in the medium to Revenues in Central and lion euros, or $106.1 million, long term. Greater China is “over- South America climbed 16.7 per- in the same period last year. performing,” said Norsa, who was cent, thanks to the area’s distri- However, if the capital gain “still very positive” on China, es- bution reorganization and repre- derived from last year’s sale of pecially in second- and third-tier senting 4.4 percent of the total. the Florence-based firm’s stake in cities. Two new stores are expected The region is “built on a strong ZeFer to the Ermenegildo Zegna to open in China in the second half. Mexico base,” and Brazil is grow- Group were excluded, profits He said Taiwan was very positive ing with a new store, opened in would have increased 14 percent. after two years of not being so, and the period, said Norsa. Net profit in the six months South Korea “performed well and During the call, chief financial ended June 30 — including a mi- extremely well at duty-free, driven officer Ernesto Greco described nority interest of 4 million euros, by Chinese travelers.” as “reasonable” the consensus of or $5.4 million — reached 82 mil- year-end revenues of between 1.33 lion euros, or $112.3 million, down and 1.35 billion euros, or $1.82 bil- 6 percent compared with the first lion and $1.84 billion. He also said half of last year but, excluding the $106.8M the gross margin forecast for the full capital gain, up 10 percent. year was “very similar” to that of Buoyed by the performance of FIRST-HALF NET PROFIT AT 2013 and that the earnings before in- its handbags, leather goods and SALVATORE FERRAGAMO. terest, taxes, depreciation and amor- Most Liked: footwear collections as well as tization margin could be expected Lady Gaga and Tony Bennett are set to appear in its solid growth in the Americas, to be slightly above 21 percent, al- H&M’s television commercial making its debut globally at the Europe and the Asia-Pacific re- Europe, despite the geo-political though it is “very difficult to read end of November, and in print, outdoor and online ads, too. gion, revenues rose 6 percent, to tensions that negatively impacted and predict the geopolitical future.” 659 million euros, or $902.8 mil- global tourist flows, posted a 9 per- Dollar amounts are converted lion, compared with 625 million cent sales rise and represented 27.6 at average exchange for the peri- euros, or $818.7 million, last year. percent of the total. Norsa said tour- ods to which they refer. ON INSTAGRAM At constant exchange, revenues ism is growing while “domestic con- Sales of handbags and leather would have grown 8 percent. sumption is stagnating” and lament- accessories climbed 13.3 percent Chief executive officer Michele ed the fact that Russian tourism had and footwear was up 3.5 percent, Norsa addressed the “unstable, been affected in the second quarter. together representing more than volatile and unclear geopoliti- North America was up 5 per- 78 percent of the group’s total rev- cal picture” in a conference call cent, accelerating in the second enue. Norsa cited an improvement with analysts on Thursday, citing quarter after a first quarter that in leather goods as women’s bags Russia, Ukraine and the Middle was strongly impacted by unfavor- were positioned at a higher price East as “major areas of concern.” able weather conditions. “There range. The performance of fragranc- The Asia-Pacific region was are good opportunities for the sec- es, which was penalized in the first once again the group’s main mar- ond part of the year,” said Norsa, quarter by shipping issues in Russia, ket, showing a 3.6 percent gain; that citing a significant number of Ukraine and China, recovered and market was lifted by the company’s Asian travelers to the West Coast. accelerated in the second quarter, Back-to-School: Dancing broke out behind the scenes at Greater China retail channel, The Japanese market edged resulting in a 5 percent increase in our photo shoot on ﬁrst-day style.

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