Out of Their Shells

REPEL AND ATTRACT DEAL IN LEANDRA MEDINE TALKS ABOUT HER FIRST BOOK, “THE MAN THE SUN REPELLER: SEEKING LOVE. FINDING SEQUENTIAL BRANDS GROUP BUYS SUNGLASS OVERALLS.” PAGE 9 BRAND REVO FROM LUXOTTICA. PAGE 2 TOUGH SCHOOLING Outlook for B-t-s Grows Gloomier By ARNOLD J. KARR RETAILERS CAN ONLY HOPE the early stages of WWD back-to-school aren’t a harbinger of holiday. As stores resort to virtually every device in their promotional toolboxes to build buzz for the b-t-s MONDAY, AUGUST 5, 2013 $3.00 WOMEN’S WEAR DAILY Q Q season, what had been already modest expecta- tions are becoming even gloomier. Researchers note the strength of year-ago sales as just one of several challenges faced by stores looking to move healthy amounts of apparel, footwear, computers and tablets and more algorithmic school supplies. Customer Growth Partners’ Craig Johnson com- pared consumer spending to “a car stuck between first and second gear” in projecting a seasonal in- crease of 3.4 percent for traditional b-t-s categories, below the 4.2 percent gain registered last year. On Friday, IHS Global Insight forecast a 3.2 percent gain, below the 3.6 percent advance to $40.9 billion logged by U.S. retailers during the 2012 season and also below the 4.1 percent gain expected for total retail sales during the third quarter. Chris Christopher Jr., director of consumer markets at IHS, cited improved consumer confidence and improvement in the equity and home markets as pluses for the season, with higher gas prices and a late start working against it. “Many students and parents will not splurge in the third quarter since they will wait for the heavy holiday season discounting that has been occurring sooner and sooner,” he said. “In addition, e-commerce retail sales have been gaining share of total retail and especially on clothing, books, shoes and computers.” He expects e-commerce to move from its current level of 5.5 percent of retail sales to 7.4 percent by the end of 2017. A number of analysts and researchers believe that it’s the shift to e-commerce that has changed the tim- ing of both b-t-s and its larger, later counterpart, the holiday season. SEE PAGE 12 India Revises FDI Rules By MAYU SAINI NEW DELHI — The Indian government has relented to pressure from overseas retailers and revised some of the rules for foreign direct investment in multibrand retailing. Out of Their Shells Although foreign retailers have been studying the $500 billion Indian market with steady interest over the last few years, and the government threw open Strictly prim and proper no more, pearls are the doors last November amid chaos and protests in Vibe’s 18-karat gold, gray Baroque having a high-drama moment as designers Parliament, multibrand retailers remained wary of pearl and diamond necklace; Melissa setting up operations that are 51 percent FDI owned Joy Manning’s 14-karat gold, flaunt the jewel’s provocative side with and 49 percent locally owned. Baroque pearl, Biwa pearl and keshi beautiful configurations of Baroque pearls. Unveiling the changes last week aimed at spurring pearl necklace, and Vieri by Bibi van For more, see pages 4 and 5. VALLE FDI in multibrand retailing, Anand Sharma, com- der Velden’s 18-karat pink and yellow DEL merce minister, said on Thursday that more “clarity gold, Baroque pearl and white and was required to benefit [global] retailers.” brown diamond ring. Overseas retailers can now set up stores in any city, a major shift from the earlier stipulation that CASSAUNDRA foreign stores could only be opened in cities with AND populations of more than 1 million. There are only 53 cities that have a population above that level, and the previous rule allowing each state to make its own de- cision as to whether to allow foreign retailers limited SHELHAMMER the opportunity even further. Several foreign retailers commented that they HAILEY were still concerned about the uncertainty in a pre- election year, in terms of central as well as state government. ASSISTANTS: The opposition Bharatiya Janata Party and sev- PHOTO BY GEORGE CHINSEE; STYLED BY ROXANNE ROBINSON eral other political parties have been vociferously FASHION SEE PAGE 12 2 WWD MONDAY, AUGUST 5, 2013 WWD.COM Sequential Buys Revo Brand THE BRIEFING BOX chief executive officer. Cynthia Rowley and Izod. IN TODAY’S WWD By VICKI M. YOUNG “The vision we have for the While the ceo declined to brand is one where we believe discuss the brand’s volume, he SEQUENTIAL Brands Group Inc. Revo can be extended to many noted, “Sequential is actively has acquired the Revo sunglass relevant categories within per- eyeing brands that it believes An image from the Helena brand for $20 million in cash from formance: outdoor space, outdoor can do $100 million at retail Christensen for Triumph Oakley Inc., which is owned by gear, footwear, active apparel and over the next few years.” look book. For more, see Luxottica Group SpA. technical apparel for outdoors. In that quest, Sequential is WWD.com. The cash transaction, which rep- We believe this is a unique oppor- still in acquisition mode and ex- resents the fourth deal Sequential tunity to leverage a brand that’s pects to do more deals. It is hop- has completed so far this year, will truly authentic,” Shmidman said. ing to do two to three deals a year be funded through cash on hand. over the next few years. Earlier in the year, the brand man- A Revo ad image. As for the opportunities that are agement firm picked up Heelys, out there, Shmidman said, “These Ellen Tracy and Caribbean Joe. The are interesting times. There are a firm has a total of seven brands in number of brands that we believe its portfolio. The other brands are will change hands. We are really fo- William Rast, People’s Liberation cusing on brands where we have the and DVS Action Sports. ability to grow them within our brand The purchase includes Revo’s management licensing model.” intellectual property plus certain Sequential at the end of July other assets. closed on a private placement Revo is a high-end perfor- with a group of accredited inves- mance line that contains the same tors in which the firm netted $44 technology NASA uses for sat- million from the sale of 8 million ellites to deflect radiation. The shares of common stock exempt Nonstop promoting hasn’t managed to generate consumer glare-blocking feature via high- from Securities and Exchange excitement about the approaching back-to-school season. Page 1 contrast polarized lens technology Commission registration at $5.50 a is ideal for outdoor sports and ac- share. Sequential ended the month The Indian government has relented to pressure from tivities as it blocks 100 percent of with $57 million in cash on hand. overseas retailers and revised some of the rules for foreign UVA, UVB and UVC light. Following the Revo transaction, direct investment in multibrand retailing. Page 1 Following the sale of Revo, Sequential has signed a long- Sequential has $37 million in cash Luxottica will still have as its high- term partnership agreement on its balance sheet to support its Frette has entered into a collaboration with Harry’s of end performance brands Ray-Ban with Sunglass Hut to continue acquisition strategy. The company London for a men’s and women’s footwear collection. Page 6 and Persol. Luxottica, started in the distribution of Revo-branded also has leveraged financing avail- 1961 by Leonardo Del Vecchio, ac- eyewear at Sunglass Hut stores able through Bank of America Coach is overhauling its watch collection, with the new styles quired Persol in 1995, Ray-Ban in globally. The agreement with Merrill Lynch. set to hit stores for fall and holiday. Page 7 1999, Sunglass Hut International Sunglass is nonexclusive, so Sequential posted net income Inc. in 2001 and Oakley in 2007. Revo-branded eyewear can be of $693,000, or 4 cents a diluted Lucchese, the maker of high-end cowboy boots, is launching Revo, launched in 1985, was part sold at other retailers as well. share, for the second quarter fashion footwear for women and men for spring. Page 7 of the Ray-Ban acquisition from B. Robinson also inked an ended June 30, against a net loss Bausch + Lomb, and later moved agreement with Sequential for a of $878,000, or 37 cents, a year Ann Taylor has tapped Camuto Group to help oversee and under the Oakley umbrella. long-term licensing agreement ago. Licensing and other revenue It was Revo’s premium perfor- for the manufacture of Revo jumped to $4.3 million from $1 source its shoe program. Page 7 mance positioning that attracted sunglasses and related product. million. The company converted Sequential to the brand, according The eyewear manufacturer also its business to the current brand Randa Accessories expects to boost its output and efficiency to Yehuda Shmidman, the group’s manufactures for Cole Haan, management model last year. as it expands in Reno, New Orleans and Toronto, and closes the Swank distribution center in Taunton, Mass. Page 8 Monica Rich Kosann has opened a 400-square-foot shop on Krakoff to Buy Namesake Brand for $10 Bergdorf Goodman’s seventh floor. Page 8 cial rundown shown to would-be if it isn’t closed by the end of the Leandra Medine of the Man Repeller blog, whose first book is By EVAN CLARK investors, the business lost on the month.

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