The Trench Connection
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CONSUMER CONFIDENCE FALLS/2 L.A. INSPIRATIONS/6-8 WWDWomen’s Wear DailyWEDN • The Retailers’ Daily Newspaper •ESDAY October 27, 2004 • $2.00 Sportswear The Trench Connection PARIS — Alber Elbaz’s beautiful spring collection for Lanvin had a very Parisian esprit, using the moody sophistication of the house’s heritage to make a winning statement of his own. He played with volume — one of the big trends of the season — in looks such as a lightweight mock parka over a full skirt and loose evening dresses with a touch of the Twenties. He also created a great version of one of the season’s most popular styles, the trenchcoat shown here. Coach Still on a Roll: As Profits Leap 60%, Big Expansion Ahead By Meredith Derby NEW YORK — Coach is painting its accessible luxury on a broader canvas. As the company reported a 60 percent leap in first-quarter earnings and a 33.2 percent rise in revenues, it said it was looking to add 100 stores over the next few years, remodel its New York flagship and introduce a higher-priced special collection for holiday retailing. Summing up how the surge in luxury spending has benefited Coach Inc., Lew Frankfort, chief executive officer of the company, said in a conference call, “During the last several years, we See Coach, Page16 PHOTO BY GIOVANNI GIANNONI GIOVANNI PHOTO BY 2 WWD, WEDNESDAY, OCTOBER 27, 2004 WWW.WWD.COM WWDWEDNESDAY Sportswear Consumer Confidence Falls GENERAL Coach’s first-quarter sales jumped 33 percent, earnings rose 60 percent, 1 its store count is set to add 100 units and it will remodel its flagship. As Job, Income Woes Loom A decline in October’s Consumer Confidence Index to 92.8 from 96.7 was 2 dragged down by a 5.9 percent drop in the Expectations Index. By Vicki M. Young wrote in a research note that “weaker assessments of the future accounted for most of the deteriora- Celanese Acetate on Tuesday said it would shutter its textile operations, NEW YORK — Consumers aren’t expecting a lot of tion” in the index, while the impact from a wave of 2 ending an 80-year run and costing 1,100 jobs. good news over the next six months. hurricanes last month understated the strength of SUZY: Dance, Dance, Dance at the American Ballet Theatre…Journeys A decline in October’s Consumer Confidence the labor market. He still expects hiring to rebound 4 with George Clooney…Rules of Engagement. Index to 92.8 from 96.7 last month was dragged to 225,000 in October from 96,000 in September. down by a 5.9 percent drop in the Expectations “High energy prices, a weaker stock market FASHION: Dolly Parton, Ginger from “Gilligan’s Island,” bohemians and beer Index, which fell to 92 from 97.7 in September. and hurricanes likely have sapped confidence in 6 are providing inspiration in spring collections for Los Angeles designers. The fall in the confidence index represents the the future,” Harris said. WEST: With the growing importance of contemporary specialty boutiques, third consecutive monthly decline, hitting its low- Economist Stephen Gallagher at SG Cowen 17 retailers and designers are confronting the issue of the exclusive. est level since March. The decline also was steep- wrote in his report that the pullback in consumer er than expected. Topping the list of concerns of confidence was a “disappointment,” but noted Classified Advertisements ..................................................................18-23 those polled were fewer jobs as well as a lack of that the weaker view of the future must be condi- To e-mail reporters and editors at WWD, the address is improvement in their income. tioned on worries over oil prices and to a lesser [email protected], using the individual’s name. “Subdued expectations, as opposed to eroding extent the upcoming presidential election. WOMEN’S WEAR DAILY IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLICATIONS, INC. COPYRIGHT ©2004 present-day conditions, were the major cause be- Gallagher cautioned, however, that “how much FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. hind October’s decline in consumer confidence,” higher oil prices stem consumption and hiring plans VOLUME 188, NO. 90. WWD (ISSN # 0149-5380) is published daily except Saturdays, Sundays and holidays, with one additional said Lynn Franco, director of The Conference remains a critical question going forward, and the issue in January, May, June and November; two additional issues in February, April, September, October and December; and three additional issues in March and August, by Fairchild Publications, Inc., a subsidiary of Advance Publications, Inc. PRINCIPAL OFFICE: 7 Board’s Consumer Research Center, which com- responses by consumers in this survey reveal a keen West 34th Street, New York, NY 10001. Shared Services provided by Advance Magazine Publishers Inc.: S.I. Newhouse, Jr., Chairman; piles the index. awareness of the risks even as they report stable to Steven T. Florio, Vice Chairman; Charles H. Townsend, C.O.O.; John W. Bellando, Executive Vice-President and C.F.O.; Jill Bright, Franco said while consumers’ assessment of slightly improving current employment trends.” Executive Vice-President_Human Resources; John Buese, Executive Vice-President_ Chief Information Officer; David Orlin, Senior Vice-President_Strategic Sourcing; Robert Bennis, Senior Vice-President_Real Estate; David B. Chemidlin, Senior Vice- the labor market improved, the gain was not Should job growth fail to rebound and wage President_General Manager, Advance Magazine Group Shared Services Center. Periodicals postage paid at New York, NY and at enough to ease concerns about future job growth. growth slow, a big risk is that retail sales could additional mailing offices. Canada Post Publications Mail Agreement No. 40032712. Canadian Goods and Services Tax Registration Meanwhile, the Present Situation Index, a “dry up,” according to Bernstein Research analyst No. 88654-9096-RM0001. Canada post return undeliverable Canadian addresses to: 4960-2 Walker Road, Windsor, ON N9A 6J3. POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008. component of the Consumer Confidence Index, Emme Kozloff. She added in a report that softer FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WOMEN’S WEAR dipped to 94.2 in October from 95.3 in September. sales “could drive downside to retail stocks on the DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008; Call 800-289-0273; or visit www.subnow.com/wd . Four weeks is According to October’s survey, consumers were order of 10 percent to 15 percent.” required for change of address. Please give both new and old address as printed on most recent label. First copy of new cautious about the future, with those anticipating For intellectual property attorney Kara Cenar, subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 7 West 34th Street, New York, NY 10001. For permissions and reprint requests, conditions to worsen increasing to 10.3 percent partner at Welsh & Katz in Chicago, the slowdown please call 212-221-9595 or fax requests to 212-221-9195. Visit us online: www.wwd.com. To subscribe to other Fairchild from 9.4 percent in the prior survey. Consumers in confidence means more work for her. “When magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our subscriber list available to carefully expecting business conditions to improve fell to confidence is low, consumers become more cau- screened companies that offer products and services that we believe would interest our readers. If you do not want to receive these offers and/or information, please advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273. 20.6 percent from 21.6 percent. tious, and they start to look for ways to stretch WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR LOSS, DAMAGE, OR ANY OTHER INJURY TO UNSOLICITED On the jobs front, those expecting fewer jobs to their dollars. Infringers knock off branded goods MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND become available jumped to 18.4 from 16.2 last to get their share of those dollars, causing brand- TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED month. In addition, consumers expecting their in- ed manufacturers to spend more money fighting TO DO SO BY WWD IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE comes to improve over the next six months dipped knockoffs and counterfeiters,” Cenar said. ACCOMPANIED BY A SELF-ADDRESSED OVERNIGHT-DELIVERY RETURN ENVELOPE, POSTAGE PREPAID. to 18.4 percent from 20 percent. She said as consumers gravitate toward the While the consensus forecasts by economists Internet in search of bargains, there’s a greater pegged the index at 94, the steeper decline didn’t need for her firm’s services to protect domain seem to be a problem for some. names and keep track of new sites to make sure In Brief Maury Harris, chief U.S. economist at UBS, they don’t sell bogus goods. ● GILAN’S NEW FLAGSHIP: Turkish fine jeweler Gilan has signed a lease for its first U.S. flagship at 743 Fifth Avenue in New York. The 1,950-square-foot boutique will be sandwiched between Louis Vuitton’s flagship at the corner of 57th Street and Celanese Set to Pull Out of Textiles Bergdorf Goodman’s men’s store. The Phillips Group, which also worked on the Vuitton flagship, will supervise construction of the space, which will be designed by architect Sinan Kafader, look and the related economic who has worked on numerous Four Seasons Hotels.