PHOTO BY PASHA ANTONOV; STYLED BY DANILO MATZ Frédéric ▲ BEAUTY: Fekkai, A Q&A A Q&A page 6. page 6. with with Women’s Newspaper Daily •August 8,2008•$2.00 Wear Retailers’ •The Daily WWD Beauty

opens its page 12. ▲ store in RETAIL: largest Kenzo Paris,

FRIDAY expectations forhislatestmen’sfragrance,dueasaMacy’sexclusive Industry sources estimated that the scent could do upward of $100 sourcesestimatedthatthescentcoulddoupwardof$100 Industry million globallyinitsfi in DecemberbeforerollingouttowiderdistributionFebruary. By dubbing it I Am King, Sean Combs leaves no doubt as to his By dubbingitIAmKing,SeanCombsleavesnodoubtastohis A New Reign New A percent to359.70. Retail Indexfellmoresharply, contracting2.1 to 11,431.43,whiletheStandard&Poor’s Average fell224.64points,or1.9percent, on Thursday, theDowJonesIndustrial With oilrising retailsalessluggishandcrude critical retailmetric. with aprojectionof1to2percentgaininthe July andtemperingexpectationsforAugust store salesgaininitsU.S.discountstores analysts’ estimateswitha3percentsame- school andfallselling. month asstoresgetseriousaboutback-to- overthis raisingconcerns economic downturn, Retailers inJulyclearlyfelttheimpactof By Alexandra Steigrad Report Weak Comps Weak Report FallsDow Stores as July: in Fireworks No Even Wall StreetcaughtthechillThursday. Wal-Mart StoresInc.setthetone,missing rst yearoncounter. For more,seepage5. fragrance, Féerie,page4. Arpels launchesanother BEAUTY:▲ Van Cleef& sales slideinfi

Magazine newsstand rst half, ▲ page 13. See MEDIA:

Weak ,

Page

11 2 WWD, FRIDAY, AUGUST 8, 2008 WWD.COM Polo Meeting Stresses Continuity By Vicki M. Young Berman, the portfolio manager, questioned the quality and discounting of American Living at WWDFRIDAY NEW YORK — Age was an issue at Polo Ralph J.C. Penney, suggesting it might have been a bet- Beauty Lauren Corp.’s annual meeting here Thursday. ter program with the retailer’s former chairman A day after reporting stellar fi rst-quarter re- and ceo, Allen Questrom, at Penney’s helm, rath- GENERAL sults, the company conducted its 11th annual er than current chairman and ceo Myron “Mike” meeting at the St. Regis Hotel, with chairman Ullman 3rd. 1 With the benefi ts of tax-rebate checks exhausted, and chief executive offi cer Ralph Lauren striving Lauren fi rmly retorted, “American Living is retailers struggled to make their numbers in July, to make his presentation anything but formulaic a terrifi c line. We’re proud of it. J.C. Penney is a Alterna’s and August doesn’t promise to be better. Color Hold while having his patience tested by some of the great company. J.C. Penney needs product that The Warnaco Group Inc. saw earnings rise 41 Spray 2 usual shareholders. we can make. Anytime you have new product, you percent in the second quarter, to $19.4 million, Harry Korba, an individual shareholder, and [need time to] learn. This is a tough economy all Leave-in driven by international growth at Calvin Klein. Philip Berman, a portfolio manager, took turns over the place. I’ve done a lot of shopping and Conditioner. asking a wide range of questions. Korba, who walking all these stores.” 5 BEAUTY: Sean “Diddy” Combs knows he might opened the Q&A session with one about where Berman pushed again about J.C. Penney on raise a few eyebrows by calling his latest scent I the meetings for the board are held, prefaced his additional issues, such as how much American Am King, but he doesn’t care. remarks by noting that Lauren is 68 years old. Living product would be showcased at the retail- The professional hair care world is gearing up for a The designer retorted good-naturedly, “Do er’s upcoming Manhattan location. ▲ 10 slew of new launches to excite consumers during you have to mention my age all “I’m not sure why you keep the time?” That comment drew referring to J.C. Penney con- the last half of the year. some laughs from the crowd of Ralph tinuously,” the ceo said. “The 12 With a high-powered retail neighbor — Louis roughly 100 attendees, about 30 Lauren economy is challenging right Vuitton’s largest store in the world — Kenzo of whom were connected with now. It will be good again…. opened its biggest unit on Paris’ Avenue George V. the company, including Jerry We work with great companies, Showing momentum on the eve of the Olympics, Lauren, Jackwyn Nemerov, great retailers. I’m not here to 14 Puma posted a 0.9 percent rise in second-quarter Buffy Birrittella, Wayne defend anybody. There’s noth- Meichner, Scott Bowman and ing to defend. We focus on our net income to $71.3 million. Bette-Ann Gwathmey. business. We’ve had great suc- 14 A Canada judge awarded Louis Vuitton Malletier The age question was also cess. It’s been a challenging the largest payout in a trademark counterfeiting directed, although more subtly, year. Most are not doing well. and copyright suit in the country’s history. at Roger Farah, Polo’s 55-year- We’re doing amazingly well.” old president and chief operat- Berman also asked about Classifi ed Advertisements...... 15 ing offi cer. However, Berman’s the bundling of candy from query about when Farah, who is Lauren’s daughter Dylan TO E-MAIL REPORTERS AND EDITORS AT WWD, THE ADDRESS IS also on the boards of Aetna Inc. Lauren’s store, Dylan’s Candy [email protected], USING THE INDIVIDUAL’S NAME. and Progressive Corp., is “plan- Bar, with Polo fragrances sold WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2008 FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. ning to retire” didn’t elicit a at Lord & Taylor and Sephora. VOLUME 196, NO. 30. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with response. Lauren told the port- Lauren said his daughter “runs one additional issue in January, October and December, two additional issues in March, April, May, June, August and folio manager, “He’s one of the her own company. She asks me November, 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 most talented in our industry to taste her candy occasionally. provided by Condé Nast Publications: S. I. Newhouse, Jr., Chairman; Charles H. Townsend, President/CEO; John W. and we’re lucky to have him.” She sometimes asks me for ad- Bellando, Executive Vice President/COO; Debi Chirichella Sabino, Senior Vice President/CFO; Jill Bright, Executive Vice Lauren thanked Farah for vice, [but] she makes her own President/Human Resources. Periodicals postage paid at New York, NY, and at additional mailing offi ces. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services Tax Registration No. 886549096-RT0001. his contributions to the company, saying how his decisions….When she goes public, you can ask Canada Post: return undeliverable Canadian addresses to: P.O. Box 503, RPO West Beaver Cre, Rich-Hill, ON L4B talent and knowledge have helped position the her all the questions.” 4R6 POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA company to grow both here and abroad. Korba queried why non-executive directors 91615–5008. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please The 45-minute meeting began shortly after 9:30 who can “afford it” get discounts to shop at the write to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or visit www.subnow.com/wd. Please give both new and old addresses as printed on most recent label. First copy of new subscription will be mailed a.m. with security extra tight this year. Guests Polo stores but shareholders don’t. Lauren point- within four weeks after receipt of order. Address all editorial, business, and production correspondence to WOMEN’S were asked to check briefcases, and signs were ed out that the board members “work very hard WEAR DAILY, 750 Third Avenue, New York, NY 10017. For permissions and reprint requests, please call 212-630-4274 posted stating electronic equipment such as cam- for the company. They hold premier spots in their or fax requests to 212-630-4280. Visit us online at www.wwd.com. To subscribe to other Fairchild magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our subscriber list available to carefully screened eras and tape recorders were not allowed in the fi eld, and they help the company. They well de- companies that offer products and services that we believe would interest our readers. If you do not want to receive meeting room. serve [the discount] and they deserve a lot more these offers and/or information, please advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call The chairman, wearing a black suit and look- than what they’re getting.” 800-289-0273. WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR THE RETURN OR LOSS OF, OR FOR DAMAGE OR ANY OTHER INJURY TO, UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, ing svelte and well rested, returned this week Farah added that the suggestion to give share- PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, from a monthlong vacation. “There is a continuity holders a discount was a valid one and that the PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS [at Polo in its] spirit and direction,” he said. “In company would “look at it in the new year.” SPECIFICALLY REQUESTED TO DO SO BY WOMEN’S WEAR DAILY IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND this challenging economy, we have handled our- On a more cordial note, shareholder David OTHER MATERIALS SUBMITTED MUST BE ACCOMPANIED BY A SELF-ADDRESSED STAMPED ENVELOPE. selves very well. We have a very well-equipped Finkle told attendees that he buys Polo products team, with great talent, great management and because they are durable and because he likes the great design,” Lauren added. service he gets at the stores. He noted that he was DAILY As content becomes “I don’t have a crystal ball, so I can’t tell you what wearing Polo apparel, setting up Lauren’s fi nal “ next year will be like….My money is here, I keep it quip of the morning. ”I noticed when you came in QUOTE free on the Internet, I here. I hope to see you next year,” Lauren said, con- that you looked very sharp,” the ceo said. cluding the formal part of his presentation. — With contributions from Marc Karimzadeh question whether or not the future of magazines will be opt-in and nonpaid.” Warnaco Earnings Leap, Raises Guidance — Robin Sternberg, senior vice president and director of print investment and activation at Mediavest. Page 13. By Whitney Beckett of the company’s total, led by 51 percent growth in Europe.” THE WARNACO GROUP INC. SAW EARNINGS Warnaco revised its 2008 outlook, projecting TODAY ON rise 41 percent in the second quarter, driven by sales would grow 13 to 15 percent over 2007, with international growth in its Calvin Klein business adjusted diluted earnings per share from con- and prompting the company to raise guidance for tinuing operations expected to range from $2.80

.COM MOST VIEWED ▲ WWD the second time this year. to $2.90. When the company revised its outlook Michael Kors For the three months ended July 5, net income after the fi rst quarter, Warnaco said it expected • Calvin Klein’s climbed to $19.4 million, or 41 cents a diluted revenues to grow 10 to 12 percent and diluted Latest Controversy share, from $13.8 million, or 31 cents, in the sec- earnings per share growth of $2.65 to $2.75. • Obama Press Tour ond quarter last year. During the second quarter, sportswear sales • Global • Industry Digests Sales in the quarter grew 22 percent to $503.8 increased 29 percent to $249.4 million, led by the Breaking News Mervyns Bankruptcy million from $412.5 million, driven by a strong Calvin Klein Jeans business, which grew in all re- • Staffer Blogs • Fashion’s First-Aid Kit performance in Calvin Klein abroad. gions — from 57 percent increases in Europe to • First Look, the “Our second-quarter results included broad- 14 percent in the U.S. Chaps sales were fl at, but on the Michael Blending Begins, based strength with all operating segments and operating margins improved to 19 percent from Kors’ Moment, Post Night geographies recording increased revenue and 11 percent. the Credit Card profi tability,” said Joe Gromek, Warnaco’s presi- For the fi rst half, net income fell 28 percent MOST E-MAILED dent and chief executive offi cer. “Our key expan- to $37.1 million, or 80 cents a diluted share, from Bust, P&G’s Impressive • Boscov’s Files sion initiatives, including international, direct- $51.8 million, or $1.11, due to restructuring costs Chapter 11 to-consumer and our Calvin Klein businesses, and exits from the swim business in the fi rst quar- Run and More • July Sales Tough for continued to fuel our growth. During the quarter, ter. Sales so far this year increased 22 percent to • Vote for Retailers international revenues accounted for 50 percent $1.07 billion from $881.7 million. Fashion’s • Fashion’s First-Aid Kit Defi ning • Madonna’s Costumes CORRECTION Moments for Her Sticky and Sweet Tour Nina Garcia begins her new position as fashion director of Marie Claire on Sept. 2. She has not begun her offi cial • People and duties at the magazine and has not moved into her offi ce there. This was incorrect in a Memo Pad item on July 28. • Las Vegas Retail A Marie Claire spokeswoman said, “Nina is on contract with Elle that prohibits her from working for Marie Claire Companies in Feels Economic before Sept. 1. She has been in the offi ce only to work out her travel schedule for the European shows this fall.” the News Squeeze FREE ACCESS TODAY

COMPLIMENTS OF

The All-New WWD.COM A New Era Begins 4 WWD, FRIDAY, AUGUST 8, 2008 The Beauty Report WWD.COM Van Cleef & Arpels Evokes Luxe Aveda Promotes 3, PARIS — Van Cleef & Arpels and its fragrance license holder, Inter Parfums, have Buys Distributor dreamed up a new women’s scent meant to be close to its roots in high-end jewelry. Féerie by Féerie is expensive and has a cap resembling a work of sculpture. It will be the Van Cleef & AVEDA HAS NAMED A NEW GEN- fourth Van Cleef & Arpels women’s scent on the market today. Arpels. eral sales manager, promoted two “We wanted for Van Cleef to have something original and creative, but at the same other executives and acquired its time it had to give the impression of high luxury,” said Philippe Benacin, chairman distributor in Australasia. and managing director of Inter Parfums SA. “The code name for it was bijou romantique Emmanuel Rey, formerly brand [French for romantic jewel].” general manager of Aveda U.K. and For the project, Givaudan’s Antoine Maisondieu created a fl oral woody scent whose Ireland, has been named general notes include violet, black currant, mandarin from Italy, jasmine from Egypt, iris sales manager, North America, a new from Florence and vetiver from Haiti. There is also absolute of rose from Bulgaria post. In this position, Rey will be re- and essence of rose. sponsible for developing Aveda’s Joel Desgrippes, who created the North American salon, spa, retail, We wanted for Van Féerie bottle and outer packaging, was shown education and Institute businesses, “ some Van Cleef & Arpels jewelry to inspire the design and will be charged with enhanc- Cleef to have something meant to give the impression of fairies and magic. ing Aveda’s North American market The new scent’s advertising, meantime, share. North America, said the com- original and creative, but features the fl acon in a star-spangled set- pany, currently represents close to ting and is to come in single and double 80 percent of Aveda’s global sales. at the same time it had pages. It was created by Co and Co. “Emmanuel provided keen stra- Féerie was introduced at the end of tegic leadership and contributed to give the impression of July exclusively in Parfumerie Marionnaud, greatly to the growth of the Aveda Harrods and Neiman Marcus. Its turnout U.K. and Irish business,” stated high luxury. has been strong, according to an industry Dominique Conseil, president of source, who said during the fi rst week in Aveda, to whom Rey will report. “His — Philippe Benacin,” Inter Parfums SA Marionnaud on Paris’ Champs-Elysées depth of knowledge of the salon and the scent generated sales of more spa business and outstanding ability than $46,400 in retail revenues, for to inspire growth will position him instance. Then, in September, Féerie is due out in the rest of the world in ex- well in this pivotal new role.” tremely tight distribution. Conseil noted that Rey was Inter Parfums executives would not divulge sales projections, but industry named brand general manager of sources estimate Féerie will generate up to $23 million in retail revenues during Aveda U.K. and Ireland in 2005, the September to December period. leading that business to a 44 per- The price points in the Féerie line are higher than for any other Van Cleef & cent sales growth and 49 percent Arpels scents. The 100-ml. eau de parfum spray, for instance, retails for 120 euros, profi t growth in three years. Rey or $185.60 at current exchange rates, while the 50-ml. edp spray goes for 78 euros, also tripled the number of Aveda or $120.65. Ancillaries include a 150-ml. body milk for 34 euros, or $54.15; a 150-ml. Lifestyle Salons in his territory, shower gel for 30 euros, or $46.40, and a 200-ml. body cream for 70 euros, or $108.30. restructured Aveda’s retail divi- — Jennifer Weil sion, led the acquisition of the Aveda London Institute and the launch of the company-owned location on the high-profile Marylebone High Street, and over- Lalique’s White Knight: Men’s Fragrance on Tap saw the launch of the Aveda U.K. e-commerce site. PARIS — Lalique is introducing a fresh men’s scent, called Lalique ity, such as Calabrian bergamot. Rey will be based in Blaine, White, into its portfolio this fall. Lalique White’s top notes include lemon tree leaves, Calabrian Minn. Rey’s general manager du- “We are missing a fresh fragrance,” said Dominique Daviaud, bergamot, Sicilian tamarind and elemi from the Philippines. In ties for the U.K. and Ireland will Lalique Parfums’ managing director. the heart, there are notes of white pepper, nutmeg, Guatemalan be assumed by Vincenzo Minore, Yet the house wanted to avoid using notes traditional- cardamom and violet fl ower, and in the base are notes of moss, previously brand general manager ly found in fresh men’s scents, said Laurence Paul Keller, white cedar, white amber and musks. of Aveda Italy. Minore’s successor Lalique Parfums’ marketing director, who explained Fragrance Perfumers were given no limits, according to Lalique executives. in Italy is Alfonso Emanuel, previ- Resources’ Christine Nagel came up with the idea of working For the scent’s name, inspiration came from the brand’s pol- ously director of European market- freshness with spicy notes instead. The advantage of spices ished and unpolished crystal pieces that play with light. ing for Aveda. is that they are at the same time fresh and warm, explained Lalique White, whose bottle was created in-house, will be Elsewhere, Aveda acquired the Keller, adding specifi c ingredients were chosen for their qual- available as 75- and 125-ml. eau de toilette sprays retailing distribution and Aveda Experience for 59 euros and 73 euros, or $90.80 and $112.30 at current Centre assets of Aroma Science Pty, exchange, respectively. Prices are for Europe. There will also Ltd., which introduced the brand to be ancillaries. Australia and New Zealand in 1993. The scent is to be introduced in Europe and the Middle East in Since its launch, the Aveda business mid-October, and then the Far East and the Americas in early 2009. has experienced high double-digit While Lalique executives would not divulge sales estimates, in- growth in Australia with 160 salons, dustry sources say the company’s new scent will generate $5 mil- spas, retail experience centers and lion in wholesale revenues during its the fi rst year worldwide. the Aveda Institute Melbourne. Lalique is also to produce 25 numbered and signed limited “Australasia is very dear to edition geometric crystal bottles fi lled with a hanging opales- the heart of Aveda because of the cent crystal bubble and an extract of the Lalique White scent. It dedicated salons and spas, artistic should be available starting in October for an estimated 15,000 talents and passionate colleagues euros, or $23,077, each. that this network includes,” stated For men, too, are 1,500 signed and numbered crystal bottles Conseil. “Australasia is not only a featuring wrestlers on the cap and containing the Lalique Pour strong and growing marketplace Homme juice. These have just been introduced for 960 euros, or for Aveda services and products; it $1,476, each. And for women, 3,000 signed and numbered crystal is also a source of indigenous wis- bottles, topped with a reclining female form and fi lled with the dom, sustainable, high-quality raw Lalique de Lalique juice, go for 980 euros, or $1,507, apiece. materials and creative inspiration — J.W. for the Aveda network.” To that end, Darren Potter has been named brand general manag- er of Aveda Australasia. Potter pre- viously served as general manager of national sales and education for Aveda U.K. “Darren is an excellent business leader who embodies the Aveda mission,” stated Amanda Le Roux, brand general manager of Aveda Europe, Middle East and Australasia, to whom Potter will report. “I’m confi dent that Darren’s extraordinary contribution to the growth of Aveda’s U.K. business and experience and depth of knowledge of the salon and spa business will position Aveda Australasia for fu- ture success.” Lalique White — Julie Naughton WWD, FRIDAY, AUGUST 8, 2008 5 WWD.COM WWD.COM

Here and below, images from the ad campaign.

$150 MILLION Volume generated globally by Combs’ Unforgivable for Men in its fi rst year. Combs Crowns New Men’s Scent

By Julie Naughton The print and television advertising campaign for I Am King has a distinctly James Bond fl avor. The campaign depicts Combs as SEAN “DIDDY” COMBS KNOWS HE MIGHT RAISE A FEW EYE- a mogul in a suit — gallivanting around Monaco and Saint-Tropez brows by calling his latest scent I Am King, but he doesn’t care. with models Bar Rafaeli and Ana Paula, on Jet Skis around the “I Am King is a statement about all men,” said Combs, during an French Riviera, lounging aboard his palatial yacht and playing interview at his Bad Boy Entertainment offi ces in Manhattan. “We the tables inside the Casino de Paris in Monte Carlo, among other are all descendents of royalty — and if we carry ourselves and re- things. The TV campaign’s creative direction is by Combs, and the spect ourselves in that manner and believe in ourselves, then we are print ad was shot by Anders Overgaard. all kings.” Teaser ads will run in October issues of urban magazines, with It’s a matter of mind-set, he opines. “I believe in positive affi r- the bulk of the advertising planned for December issues. “TV and mations. If I say, ‘I am not going to succeed, I’m a loser,’ then that’s outdoor are our prime points of advertising — this is a story that what I am going to be. If we say we’re kings and we say we’re queens, needs to be told,” said Diana Espino, vice president and general that’s what we’re going to be. It has nothing to do with being arro- manager of Sean John Fragrances. “Our focus will be on national gant. I Am King is not a statement about myself — I Am King is about and cable TV with 30- and 50-second mixes.” TV ads will begin run- every man who is going to go and buy the fragrance.” (As for empow- ning Dec. 12 in the U.S. ering the female sex, there will be an I Am Queen women’s scent in “You have to look at all of the images they have out about fall 2009.) African-Americans,” said Combs. “So when you see this image, you “The fi rst [fragrance, Unforgivable for Men] was pure sexuality,” need to understand it’s bigger than the fragrance, it’s bigger than said Combs. Industry sources estimate the scent did upward of $150 me. When a young African-American male or a young Latino male million globally in its fi rst year. “I Am King is more about sophistica- sees this image, they see this elegant sophistication and they see tion. It’s strong and also sexy, with an elegance and simplicity to it.” I Am King next to it — it hits their senses and they believe; that’s Developed by Combs and the Estée Lauder Cos.’ Karyn Khoury what motivates me when I’m taking the pictures.” and Trudi Loren in cooperation with International Flavors & Turning playful, Combs said, “Yeah, we defi nitely do wear jeans Fragrances, I Am King opens with tangerine zest, juicy orange, suc- that sag off our ass, we defi nitely like our music loud, but we’re culent cranberry and a proprietary Imperial French berry note. also very intelligent, very smart — you know, as they say about The heart is of kir royal, crème de cassis, premium Champagne and Barack Obama, we’re also very articulate. Yes, we speak well and cooling Mediterranean water accord. Base notes are of key lime we can also wear tuxedos. And we also smell good.” pie, lemon cream, rich labdanum extract, cedarwood, vetiver, white Despite the man-of-mystery air to the new campaign, make no moss, sandalwood essences and clean powdery undertones. mistake: Combs takes pride in getting tongues wagging with his “Like Sean, I Am King has a lot of savoir faire,” said John Demsey, advertising. But this time, Combs said, he wants to be sexy in a less the group president at the Estée Lauder Cos. who oversees the Sean in-your-face manner. John Fragrances division. “As he has matured over the years, he has “I don’t think that everyone has to be naked for an ad to repre- evolved in terms of his taste, which is nothing short of amazing, and sent sexuality,” he said. “I think that one of the sexiest things to a he has maintained his street cred with the next generation.” man and to a woman is when they see strength.” The I Am King collection will include eaux de toilette in two Still, Combs relishes being controversial. “I think that is the fun sizes, 1.7 oz. for $57 and 3.4 oz. for $74; a 3.4-oz. aftershave balm, you get to have in fragrance and fashion sometimes — you get to $54; a 6.7-oz. shower gel, $25, and a 2.5-oz. deodorant, $18. The eaux push people’s buttons and you get to expose some of their insecu- de toilette will bow exclusively in the U.S. at Macy’s and in the U.K. rities and help them get over it. Eventually, they’re just exposing at Debenhams in December, along with a Macy’s-only I Am King what turns them on and what they are attracted to; I think that they Limited Edition — a 3.4-oz. scent in a signed Lucite case with a sto- are sometimes afraid to feel a certain way…we take pride in push- rybook of ad visuals for $100. In February, the eaux de toilette and ing some people’s buttons. And breaking down some barriers.” aftershave will roll out, with the shower gel and deodorant slated to Combs has a passel of other projects in production, including be on counter in May. a third crack at women’s apparel, two reality series and a new In February, the scent will enter its full U.S. distribution, some fi lm role he declines to discuss. Earlier this week, he hired a new 2,200 department store doors, and select international partners, in- president for Sean John — Dawn Robertson, who held the same cluding House of Fraser and Selfridges in the U.K. I Am King will go role at Old Navy. He’s also celebrating his apparel company’s into wider distribution globally in July 2009. 10th anniversary. While Combs and Lauder executives declined to discuss sales fi g- And no matter what Combs chooses to do in the future, expect ures or advertising spending, industry sources estimated I Am King him to keep kicking down doors. “We really do feel like we are would do upward of $100 million at retail globally in its fi rst year on forging a revolution every time we do something new; we are counter, with about 70 percent of that total expected to come from breaking down barriers and paving the way and making people the U.S. Sources estimated Lauder is spending at least $10 million see, so we do take pride in opening doors, so people can come be- in the U.S. on advertising alone. hind us and take opportunities,” he said. 6 WWD, FRIDAY, AUGUST 8, 2008 The Beauty Report Coty’s R&D Widens Scope Ajune Spa By Molly Prior MORRIS PLAINS, N.J. — Coty Inc.’s research and development facility here is a brick-and- mortar reminder of the firm’s hypergrowth. Over the last fi ve years, Coty has evolved from a $1.3 billion fragrance house in 2003 to a $4 billion beauty company this year. During a recent visit to Coty’s R&D labs here, a construction crew worked to fi nish sev- eral new labs, and staff huddled in a newly painted conference room. Ralph Macchio, Coty’s chief scientifi c offi cer and senior vice president, R&D, said when he joined Coty 16 years ago the fi rm’s U.S. R&D arm consisted of fewer than 20 people housed in a 15,000-square-foot building. Today, there are 115 employees working in two fa- cilities totaling 70,000 square feet. Coty’s global R&D force is 217 people strong, and addi- tional locations include Monaco; Granollers, Spain, and Plainview, N.Y. (which it acquired through its Del Laboratories buy). Macchio noted that the current construction marks the facility’s second expansion in two years, and that since 1993 there have been a total of seven expansions. During a half-decade span, Coty acquired the Marc Jacobs and Kenneth Cole fragrance licenses from LVMH Moët Hennessy Louis Vuitton for an estimated $50 million; Unilever Cosmetics International’s designer fragrance brands — including Calvin Klein, Vera Wang, Chloé and Cerruti — for an estimated $800 million, and in December, Del Labs, best known Ajune’s Medical-Service Jump Is on Trend for its Sally Hansen brand, for an estimated $800 million. The DLI acquisition pushed the By Andrea Nagel fi rm’s revenues past the $4 billion mark, according to Coty, closer to its goal of reaching $5 billion by 2010. AJUNE SPA LLC IS FINDING THAT ITS CLIENTS ARE PUSHING THE New acquisitions have moved Coty — a com- firm toward a more medical positioning by demanding more medical type pany that’s core strength is fragrance — deeper treatments. into additional beauty categories, including color The Manhattan-based spa, which was founded in 1999 by plastic sur- cosmetics with Sally Hansen Natural Beauty, geon Mauro C. Romita and is located at 1294 Third Avenue, has noticed NYC New York Color and its Rimmel brand, and a clear increase in demand for medical type treatments. According to the to a lesser extent, skin care. fi rm, the spa generated $3.7 million in sales for 2007, with about 30 per- For instance, Macchio said the Del Labs acqui- cent, or $1.1 million, of sales coming from medical type treatments, which sition has added depilatories (a chemical used to marks a 16 percent increase in these treatments over the past three years remove unwanted hair), waxes and bleaches to the on a compounded growth rate. Injectables, the spa said, have increased fold, and required Coty to outfi t its labs for these 24 percent since 2005, and retail sales of beauty products with SPF have new categories. He added, given Coty’s heritage increased 61 percent between 2005 and 2007. is fragrance, one of the fi rst orders of business on Ajune’s increased demand in medical type treatments actually mir- the depilatories front is to improve their smell. rors nationwide service increases. Improvements to the facility have been con- According to the International Spa Association (ISPA), the industry stant. A few years ago Coty built a new nail pol- has seen a surge in the portion of spas that offer medical services, such ish lab with a shockproof fl oor. The lab, which as those that offer microdermabrasion (97 percent in 2007 versus 59 per- has shelves lined with a rainbow of lacquers, cent in 2004) and chemical peels (93 percent in 2007 versus 54 percent in will also handle the infl ux of nail polish formu- 2004). These two services, ISPA data said, have overtaken Botox (76 per- las, treatments and hues that Del’s Sally Hansen cent) as the top medical service from 2004. Photo-facial/Intense Pulsed brand brings. Macchio noted Sally Hansen has Light (IPL) therapy is also “quite popular,” according to ISPA, and is about a 50 percent share of the mass market nail offered by two-thirds (67 percent) of those offering medical services. polish category. To be sure Ajune’s operations are better poised to meet demand for In its fragrance laboratory, Coty relies on clinical skin care treatments, Ajune is restructuring its business to cre- trained noses, or fragrance experts, who can ate two teams: a clinical team and an aesthetic team. break down a scent formula to its ingredient list. “Ajune has embraced the importance of nonsurgical cosmetic options The diffi cult exercise ensures the quality of the based on minimally invasive rejuvenation of the face,” said Romita. PHOTO BY GERALD JANSSEN GERALD PHOTO BY Inside the nail polish lab at Coty Inc.’s formula created by the outside fragrance houses, The two teams of aestheticians will be divided into three groups. R&D facility. said Macchio. Members of the Top Tier Clinical team will perform all intense pulse The R&D facility here is also outfi tted with a light services, Profect laser treatments and Gentle Waves with aminole- consumer testing institute, which the fi rm opened in May 2007. The center, adjacent to the vulinic acid, and will work directly with Romita. Members of the Clinical R&D building, is currently testing cell regeneration products. It also has a working sauna, Tier will perform all Dermaplaning with Cryogen Therapy (which is ex- where Coty tests sweatproof claims on competitors’ antiperspirant clusive to Ajune), all facial peels with 40 percent to 60 percent glycolic deodorants and on its own personal care brands, like Adidas. acid levels, medical microdermabrasion and Vitalize Peel. Those in the Back in the deodorant lab, where the technologies are created, a Aesthetic Tier will perform all aesthetic facials, microdermabrasion, scientist demonstrated Adidas’ new Dry Max moisture-absorbing adding and facial peels with 20 percent to 30 percent glycolic acid, salicylic and technology. When the Dry Max formula was poured into a bea- lactic acid peels, Gentle Waves LED and Illuminize Peel. ker of water, it instantly turned into a gel, which stayed solidly According to Ajune, the most requested facial treatments there are in place when the beaker was fl ipped over. Adidas deodorants injectables, such as Botox, and fi llers such as Juvéderm. Evolence, a new with Dry Max technology will be introduced next year. fi ller the spa is carrying, is expected to do well, too. All injectables are Macchio stressed each product born out of the labs must ad- injected by Romita. IPL laser addressing hyperpigmentation — Ajune here to regulatory and environmental regulations, which vary by uses the Lumenis One machine, is also popular. market, and in his view have become increasingly complex. The most popular body treatments include Endermologie, which “As a company we’ve tried to make more global products, so we beauty fi ghts cellulite; Body Facial, which utilizes chemical peels and micro- test in many markets,” said Macchio. “Coty’s growth has changedup dermabrasion; and Laser Hair Removal. the game plan.” The spa is on track to hit $4.1 million in sales for 2008.

Frédéric Fekkai WWD: We’ve seen a rash of sharply angled bobs of late. What’s FREDERIC FEKKAI next on the hairstyle front? F. F. : Since we have continued to see every variation on the WWD: Now that the Frédéric Fekkai hair care brand bob, I think some of those elements from the style will is under the Procter & Gamble Co. portfolio, what is remain. For example, I think we will continue to see longer & your role at the company? bangs cut straight across worn with either straight hair or Q Frédéric Fekkai: My role with Fekkai is that of slightly wavy — an updated take on the Jane Birkin look. brand architect. With this newly established role I think the middle part will also be making a strong comeback. I will continue to lend my creative vision and It’s a great, youthful look and when paired with tousled hair is drive creative efforts, brand image and product less severe and more modern. development in addition to my current ongoing role at the salons. WWD: Do women’s hairstyles mirror what’s happening beyond fashion to capture the consumer psyche? If yes, can you site WWD: You obviously wear both the creative and some examples? A the business hat well. Which one do you get the F. F. : Absolutely. While the consumer may be pinching their most fulfi llment from? pennies, women still continue to purchase product and hair F. F. : I think it’s a really nice balance of both worlds. Of course services, albeit in a different way. Some women may opt since I made my living cutting hair, that area of my life will to do their color at home. Since there are now a variety of always give me fulfi llment. But what really energizes me and options for at-home hair color available — including my own, keeps me motivated is fi guring out ways to merge the two — Salon Color — the results achieved are often salon-worthy. to be really creative in business, and to constantly challenge Consumers may also go a little longer between their hair ourselves to delight our customer in ways she never expected. appointments. The bottom line is that cosmetics products WWD, FRIDAY, AUGUST 8, 2008 7

WWD.COM ECRM Works to Chase Away Rain Clouds Sally Beauty Doubles Profi t THIRD-QUARTER PROFITS AT SALLY BEAUTY HOUSTON — It wasn’t just the pounding rains of using sterilized European human hair that is said Holdings Inc. more than doubled on a 3.4 percent in- Edouard that put a damper on retailers’ spirits at the to be softer and more easily shaped than tradition- crease in same-store sales, which executives attributed Efficient Collaborative Retail Marketing Cosmetics al hair. Suggested retail is $10, and buyers said in- in part to customers trading down from pricier salon and Skincare Meeting held here Aug. 3 to 6, but also terest continues to climb in false lashes. For those brands to less-expensive hair care products. the grim economy that has shoppers holding back on who don’t want to go the faux route, the company Net earnings for the quarter ended June 30 leapt beauty purchases. launched Ardell’s MagicLash Growth Enhancer, 118.3 percent to $29.4 million, or 16 cents a diluted Even with rebate checks, consumers kept their which can remedy skimpy lashes. According to the share, from $13.4 million, or 7 cents, in the same pe- spending limited to basics in July, said retailers, company, stress, aging, even something as simple as riod last year. who added for the most part they missed their July an eyelash curler, can cause damage over An interest rate swap that resulted in a $7.6 million sales goals. time and even can result in lash loss. noncash credit helped reduce Sally’s interest expens- But, retailers are always an optimistic crowd One hot new line to debut at es to $29.9 million, from $36.8 million in the year-ago and many came to the show looking for some- ECRM was Almay Pure Blends—a quarter, contributing to the boost in profi ts. Adjusted thing to change their outlook. new natural makeup line chains earnings per share came in at 13 cents after the fi rm The meeting, the second beauty-related think can gives Physicians accounted for the interest credit, beating Wall Street Effi cient Program Planning Session this Formula a run for its money. analysts’ earnings estimates of 10 cents per share. year, is traditionally somewhat lighter in at- critical An added upscale boost: Pure Quarterly revenues were up 6.6 percent to $676.8 tendance than the winter show. And storms Blends has a hang tag instead million from $634.9 million a year ago. delayed or halted some execu- by mass of blister carding. At the end of the third quarter, the company had tives from getting to the Hilton- Faye Brookman Bonne Bell, which was not 2,801 Sally Beauty Supply stores, which rang up sales Americas hotel (manufactur- at Marketplace, showed it is get- of $428 million, a 6.1 percent increase over last year. ers noted that retailers Duane ting aggressive in driving girls to Sales at the fi rm’s 915 Beauty Systems Group stores Reade and Katz were originally its beauty wall. According to Scott were up 7.6 percent to $248.9 million. scheduled). Those who did get Sumser, vice president of retail marketing Comparable-store sales rose 2.1 at Sally Beauty there, however, praised the fa- and North American sales, Bonne Bell has Supply and were up by 7.2 percent at BSG. cility as “perfect for ECRM.” many new launches to highlight its unique Given the economic Since EPPS is close in position in drugstores with its strong heri- downturn, “There is a lit- time frame to the National tage built by products such as Smackers, tle bit of trade down from Association of Chain Drug Stores’ while bringing incremental sales via value- pricier salon brands,” Gary Marketplace meeting held at the added collections. Also, he said Bonne Bell Winterhalter, president and end of June, many of the larger will continue to spend behind print and TV chief executive offi cer of chains passed on attending. “We and plans for a new Web site. Sally Beauty Holdings, said didn’t see the big three,” said one Sometimes in tough times, truly unique when asked by an analyst vendor. “But it was well attended companies provide retailers with that extra during a conference call by regional chains,” said Marc something special to get consumers to buy. Thursday about comp-store Orlinsky, vice president of sales That was what attracted several buyers to growth. He added that “a for Prestige Cosmetics. Demeter, a company known for its offbeat lot of growth we’ve been And, buyers and suppli- scents in department and specialty stores experiencing in recent ers were quick to add that al- such as Sex on the Beach and Dirt. The com- months is due to [Sally’s] A Sally though the show was a bit qui- pany is expanding its presence into mass marketing initiatives.” locationlocation inin eter than usual, it was still an (some chains offer a limited assortment of The retailer carries Springfi eld, Ill.

effi cient way to reach several the existing scents) with unique body lotions, SETH PERLMAN/AP PHOTO PHOTO BY lines from Clairol, L’Oréal, chains. “If you had something bath gels and fragrance products under the Wella and Conair in its unique, you really stood out,” Tootsie Collection with scents inspired by Sally stores, while its BSG locations also carry Wella explained Brandyn Stugart, Tootsie Roll, Dots and Junior Mints. in addition to Paul Mitchell, Sebastian, Goldwell vice president of sales for Jane In skin care, Added Extras said its and Tigi. Private label penetration in the quarter & Company. For her fi rm, it was Aquafi na skin care and new Aquafi na pre- reached 41 percent. a great chance to give buyers mium bath and body gel is meeting with During the third quarter, Sally fi nalized its acquisi- a glimpse of a new line called great success in the market. A commercial tion of 40-store Belgian beauty supply chain Pro-Duo Aquaceuticals while also show- starring Debbie Matenopoulos is build- NV for $30 million. ing that the company is jumping ing interest in the brand, said vice presi- While balancing growth with debt reduction is the on several hot trends, such as dent Michael Kaplan. For kids, the com- fi rm’s main strategic focus, acquisition is also part of new mascaras. From top: Duo by International pany exhibited its new Hello Kitty license the equation, according to Winterhalter. Without nam- Mascaras are indeed one of Industries and Ardell MagicLash. as well as Mr. Men and Little Miss from ing specifi c targets, he said acquisition activity would the brisk growing segments in Cartoon Network. be focused outside the U.S., as it was with Pro-Duo, beauty, and Prestige introduced Advanced Beauty Systems agreed that and that small “tuck-in” buys could be made to comple- two new mascaras as well as Total Intensity Eye bath is getting more consumer interest, especial- ment the fi rm’s existing holdings or be used as an av- Pencils as the industry gears up for bold eye looks ly niche items such as its Dr. Teals as well as its enue into a new market. for fall. Orlinsky also used the meeting to show 2009 Bodycology. “We especially see a great response to He also noted that the fi rm’s partnership with Paris promotional prepacks, such as Love and Kisses, our Epsom Salts,” said Jordan Morrow, product di- Hilton for hair extensions, which was unveiled in May, a new moisturizing lipstick; Summer Perfection, a rector. “And Bodycology is a strong positive infl uence has helped bring a younger customer into stores and mix of lip gloss, cheek stain and mascara items, and in the bath category.” “has accelerated growth in some of our other categories Brow Essentials, a kit for shaping and coloring the The bath category had been in hot water as chains and product lines geared [toward] that generation.” eye brow. Keeping its strength in bronzers, Prestige overassorted and lost focus. In the past year, leading During the fi rst nine months of the year, profi ts touted a larger bronzer compact and brush. companies such as Rite Aid and CVS have tried to vaulted 103 percent to $56.1 million, or 31 cents a The focus on eyes is not lost on American revitalize bath with new lines and a greater point of share, from $27.6 million, or 15 cents, in the same pe- International Industries, which launched its new difference. Buyers said those efforts are starting to riod a year ago. Revenues were up 5.4 percent to $1.96 line of premium faux eyelashes called Duo. Duo pay off. “Or,” concluded one buyer, “maybe we are billion, from $1.87 billion in the prior year. Eyelashes are high-quality eyelashes handcrafted all so stressed we’re relaxing with more baths.” — Matthew W. Evans

and services make women feel good about themselves and few WWD: For a luxury brand like Fekkai, what retail channels are really willing to give up those elements. Times like these only interest you most? force the consumer to be more economical and make smarter F. F. : We have been fortunate to be able to carve out a niche decisions about their purchases. market for our product line. With Fekkai we’ve really hit all the right outlets. While we have specifi c distribution for the WWD: You’ve established a business model that many would brand, I always try to pay attention to what is going on at the like to duplicate: a salon brand that’s also available in prestige retail level, what consumers are doing and their trends. I think retailers. How did you carve out that channel? it is marvelous how certain retailers have elevated their image F. F. : When I started creating the product line, it was important through a selective process of the brands they offer. to me to make it available where my customers shop. It was really an extension of our philosophy inside the Fekkai salons WWD: What publications do you read regularly? What Web sites — meeting our customers’ needs on every level. The women in do you frequent? our salons were also in Saks Fifth Avenue, Bergdorf Goodman F. F. : I read Allure, W, WWD, the New York Post, Wall Street and Neiman Marcus, and those retailers were the fi rst supporters Journal, The New York Times, The Economist, Vogue and of our brand and remain among our strongest partners today. Crain’s, and visit the following Web sites: lefi garo.fr, WWD.com, As shopping patterns continue to evolve, our goal is still to be Style.com and Huffi ngton Post. where our customer goes for her beauty purchases. She is in Bloomingdale’s and Sephora and Space NK and Bluemercury. WWD: Will you still see clients in the salon? She’s in malls and online, and shopping QVC. She may not be F. F. : Absolutely, I make it a point to visit all of my able to come in to a Fekkai salon, but it is important that Fekkai salons regularly. products are available to her when and where she chooses to shop for them. — M.P. Select Frédéric Fekkai hair care products. ADVERTISEMENT

HBA GLOBAL EXPO – WHERE BEAUTY MEANS BUSINESS

As the health and beauty industry curriculum. Attendees will leave with information and insight The HBA Industry Awards Dinner, September 9 at the that will help ensure professional and product success,” said Marriott Marquis, is a must-attend event for the beauty continues to evolve and grow, Jill Birkett, Event Director of HBA Global Expo. and personal care community to celebrate peers for innovation becomes not only critical their work and inspiration in new product development, HBA: GLOBAL RESOURCES to success, but an absolute necessity. technical advancement, marketing achievement and Complementing the educational agenda is an exhibit floor packaging design. With a strong mission to support showcasing resources, ideas for new products and services The dinner also salutes individuals and companies and educate, HBA Global Expo as well as strategies for improving existing products from leading the way in new ingredients, cosmetics, fragrances more than 600 exhibitors from around the world. Exhibitors and brand positioning including Catherine Walsh of COTY (www.hbaexpo.com) – which will take include private label, contract manufacturing, prestige and Prestige, Dr. Robert Pierce of Colgate-Palmolive and place September 9, 10,11, at the mass-market packaging components, delivery systems, David Prague of L’Oreal and recognizes the year’s most design houses, raw material and ingredient suppliers, outstanding package designs. Javits Center in New York – offers new naturals and organics, analytical and testing devices, “For beauty industry professionals seeking new products, enhancements, increased networking biotechnology processes, nutraceuticals, cosmeceuticals, information, partners, services and materials, HBA Global opportunities and comprehensive nutricosmetics, senso-cosmetics and prestige glass Expo makes it easy to do it all in a day or two while having the companies from France. chance to see, touch and smell the products as well as meet educational programming designed the people who will be their new suppliers face-to-face,” said to make the event a valuable HBA: THE BEST IN BEAUTY Jill Birkett. “It doesn’t get any better than that.” The New Product Innovations Showcase, sponsored by experience for all who attend. HAPPI and Mintel, will offer announcements ranging from the latest in skin care formulations and delivery systems to 2008 highlights include: unique and sustainable packaging design. New this year will be “Innovative Trends,” brought to you by Mintel and featuring HBA: INNOVATION THROUGH EDUCATION scheduled tastings and product samplings that will enhance With more than 50 sessions, 200 expert speakers, new product development plans. content, workshops and the return of the Regulatory Summit The Presentation Theater, conveniently located on the show and Fragrance Business, the HBA Global Expo Conference fl oor, will offer concise, ready-to-implement solutions. A time- will provide the latest information, research and advice on effi cient way to review exhibitors’ products and solutions side- business development strategies, brand enhancements and by-side, the Presentation Theater will focus on specifi c sectors package design as well as advancements in skin care and hair within cosmetics, fragrance, wellness and personal care. care, high-performance ingredients and technical solutions. The HBA VIP Lounge provides a convenient, comfortable, Top-of-mind this year will be developments in naturals, exclusive venue for the industry’s top beauty buyers to organics, and sustainability. Kicking off the Program will be network or just relax and enjoy special amenities. a Keynote Address by skin care and anti-aging expert, Dr. Nicholas Perricone. “HBA is committed to being a leader in industry education. No other event provides the depth or breadth of this year’s

To receive a Complimentary Exhibit Hall Pass (valued at $25) to HBA Global Expo, use Priority Code: PWWD8 when you register on-line at www.hbaexpo.com . For more information call 212-600-3117. HBA Global Exposition & Educational Conference September 9, 10, 11, 2008 Jacob K. Javits Convention Center, New York City www.hbaexpo.com

SHOW HIGHLIGHTS • Keynote Address by Nicholas Perricone, M.D., FACN • Identify 100’s of new products & emerging technologies • More than 50 educational sessions with 200 industry experts • More than 60 countries represented and international pavilions • Fragrance Business Conference and Pavilion • International Safety, Regulatory, and Certification Summit • More than 600 exhibitors and speakers • New Product Showcase & Presentation Theater on show floor • HBA Industry Awards Dinner including the International Package Design Awards (IPDA) • HBA's renowned conference program includes sessions such as: "Going Green Gets Going, Thinking Outside the Box: New Opportunities, Creating a Successful Beauty Brand, Beauty Influences and Color Trends by Peclers Paris, Personal Care: As a special offer to WWD subscribers, The New Intimacy, Certified Organics: The undeniable Market Pull" receive complimentary admission to the Register by August 12th to receive the Early Bird Rates! Exhibit Hall by registering online at www.hbaexpo.com with Priority Code: PWWD8

Free HBA Exhibit Pass Compliments of WWD (a $25 value).

September 9, 10, 11 2008 • Jacob K. Javits Convention Center • New York City Register on-line at www.hbaexpo.com GUEST PASS FOR EXHIBITS ONLY Priority Code: PWWD8 PLEASE READ ALL INSTRUCTIONS BEFORE COMPLETING THIS FORM Please complete this form in its entirety. Incomplete or illegible forms will not be processed. Use one form per person; photocopy if necessary. Payment must accompany registration to be processed. This form may only be used in advance of the show and is not valid for on-site registration. You may register on-site at a higher rate schedule. Badges will be mailed for registrations received by August 19, 2008. Badges will be mailed to addresses within the United States and Canada. Badges for all other international attendees may be picked up on-site. HBA 2008 is a professional trade event. Persons under 18 years of age may not register or enter the show. Your credentials are not transferable. HBA reserves the right to use photographs of you at the show for promotional purposes. Conference program and speakers are subject to change without notice. Registration refund requests will not be accepted after August 12th. There is a $75 fee for the processing of any refund.

1. PRINT ALL INFORMATION as you wish it to appear on your badge. 2. REGISTRATION INFORMATION First Name______1. What is your Industry Sector(s)? (please check all that apply) 1A ❑ Advertising/Promotion/ 1I ❑ Media/Press Last Name______Public Relation Agency 1J ❑ Medical/Healthcare 1B ❑ Consulting 1K ❑ Packaging Title______1C ❑ Contract Packager 1L ❑ Private Label 1D ❑ Import / Export 1M ❑ Regulatory/Legal ❑ ❑ Company______1E Marketers/Mfr/Distr of Cosmetics, 1N Retailers Fragrance and Personal Care 1O ❑ Salon/Spa 1F ❑ Marketers/Mfr/Distr of Functional 1P ❑ Supermarket Address______Foods and Nutraceuticals 1Q ❑ Wellness/Clinic Center 1G ❑ Marketers/Mfr/Distr of Nutritional and 1R ❑ Wholesaler City______State______Dietary Supplements 1S ❑ Other; please specify 1H ❑ Mass Merchandisers (Wal-Mart, Target, Costco) ______Postal/Zip Code______Country______2. Which of the following best describes your Job Function? (choose one only) Telephone______Fax______2A ❑ Brand Manager 2I ❑ Packaging Design/Engineer 2B ❑ Product Mangaement/Development 2J ❑ Research & Development/ E-mail Address* ______2C ❑ Biochemist/Chemist/Lab Manager Research Scientist 2D ❑ Corporate General Management/ 2K ❑ Purchasing *By providing your email address, you grant CMPi permission to contact you via e-mail regarding Owner/CEO 2L ❑ Quality Control your registration, event updates and promotional materials from exhibitors. 2E ❑ Creative/Graphic Designer 2M ❑ Regulatory Specialists/ Attorney 2F ❑ Esthetician/Skin Care Professional 2N ❑ Other; please specify 2G ❑ Health/Medical Practitioner/ ______Please clip and fax back to 203-846-0091 or send via postal mail to: Dermatologist ❑ CMP Princeton 2H Marketing/Sales Management HBA Global Expo 16 Thistle Road For more information about HBA Global Expo, please call us directly at TO REGISTER FOR CONFERENCES: 212-600-3117 or 203-846-0083. Norwalk, CT 06851-1915 USA Visit us on the Web at www.hbaexpo.com 10 WWD, FRIDAY, AUGUST 8, 2008

The HBA Report WWD.COM Salon Makers Target Various Hair Needs The professional hair care world is gearing up for a slew of new launches to excite con- sumers during the last half of the year. The latest products include several nighttime treat- ments from various L’Oréal Professional Products Division brands — namely Kerastase and L’Oréal Professionnel. Privé, fresh from its split from Procter & Gamble Co., has several new items under its herbal range; Alterna is breaking new ground — at least packaging wise — with a leave-in conditioner spray packaged in a container taller than a liter of Poland Spring water, while California’s hairstylist-to-the stars, Jonathan Antin, has a new “green” range for consumers looking to be gentle on their tresses — and the earth. — Andrea Nagel

Kérastase Paris is joining the nighttime treatment trend with Noctogenist, an overnight remedy designed to restore softness to tresses. When tapping into L’Oréal’s Luxury Division, Shane Wolf, vice president, marketing at L’Oréal’s Prestige Professional Brands, uncovered that nighttime remedies account for between 8 and 12 percent of the market, and therefore saw an opportunity to expand Kérastase into a 24-hour treatment brand. There are two Noctogenist formulas available, one for thick, coarse hair (Sérum Nuit) and one for fi ne hair (Voile Nuit), each of which is infused with Nocto- Active, a technology that combines amino acids and a vitamin E derivative to restore and protect the hair. Voile Nuit’s formula also features ingredients to build internal hair fi ber strength, while Sérum Nuit uses silk protein for manageability. Special care was taken to be sensitive to smell, said Wolf. In turn, Noctogenist has a light vanilla/lavender/eucalyptus scent, and formulas are fast absorbing so as not to leave residue on linens. Products launch this month and will sell for $65 each, a new price high for Kérastase.

Privé, which is now privately held after splitting from P&G, unveiled its fi rst two new products as a stand-alone company to supplement the Privé Formule Aux Herbes lineup. Flash Brilliance is an ultrafi ne spray intended to control frizz and protect hair from UV damage. It can be used on all hair types and is applied to dry tresses. The spray’s ingredients include balm mint, chamomile, lemongrass, jojoba and sunfl ower extract. The price is $19.50 for a 2-oz. bottle. Thermal Protection Detangling Spray is an on-the-go spray conditioner that is meant to penetrate cuticles to protect hair from styling damage. Key ingredients are bamboo and cactus. In salons it can set the foundation for a great cut. At home, users should apply the detangler to towel-dried hair before applying other products. Items retail for $20 a 6-oz. bottle. Privé Products are available in about 500 salons.

Stylist Jonathan Antin must have had his mind on the Green Goddess for his latest range, Green Rootine, a collection of cleansers and styling items free of synthetic chemicals, sulfates, parabens and petrochemicals. The three-item range includes Green Rootine Shampoo, Conditioner and Silkening Crème, which are formulated with ingredients including black cumin, aloe vera, shea butter, and oil of avocado, jojoba, olive and orange. Items are scented with spearmint. Packages alert consumers to the new formula with a note, explaining to them that the products “may feel different from what you’re used to” since formulas do not contain sulfates, a foaming agent, but that “performance is enhanced when the products are used together and regularly.” Green Rootine retails between $20 for the shampoo to $24 for the creme. Products launched in July and are available exclusively at jonathanproduct.com, Sephora and sephora.com through Sept. 1, at which point they will also be sold at Ulta and beauty.com.

KMS California, a salon brand under Kao’s Professional Salon Services Division, is adding to its popular HairPlay styling line with four new products. There’s a new texture shampoo, which has been designed to deliver “two-day-old hair” right out of the shower, said Michael Crispel, a salon owner and hairstylist in Toronto, who is also part of KMS’ artistic team. There’s also Makeover Spray, a matte spray designed for in-between shampooing, that’s made with rice powder to absorb excess oils. Dry Wax is a powerful spray wax formulated to add dimension without a sticky feel. Then there’s Clay Creme, to help users defi ne shape for strong hold for layered and short styles. HairPlay’s newest items launched last month to salons and sell for between $15.95 for the shampoo and $16.95 for the other items.

Alterna is taking color control to a whole new level with its new Color Hold Spray Leave-in Conditioner. The spray uses fennel seed extract and wasabi extract, as well as organic hemp seed oil and organic cranberry to help round out the formula. The new conditioner is available now for $20 at salons as well as Fred Segal Studio, beauty.com and Ulta stores.

L’Oréal Professionnel is continuing its efforts to upgrade its Series Expert franchise and has now built on its technology of Liss Extreme and relaunched the line as Série Expert Liss Ultime, a collection made especially to treat coarse hair. Items, which include a shampoo, a hair masque, a night treatment and an in-salon treatment, aim to smooth the cuticle layer, nourish hair fi ber and provide protection from humidity. The line’s two new products — Liss Ultime Nuit, a smoothing night treatment, and Liss Ultime Power Defi ne, an exclusive in-salon smoothing treatment — bring the brand into the night treatment trend and continue its drive toward providing a luxurious in-salon experience, respectively. Liss Ultime uses polymer AR, a double-action technology of argan and olive oils, and a shielding polymer to nourish and smooth hair. Products ship to salons in September and will sell for between $21 for the 8.45-oz. Liss Ultime Smoothing Shampoo and $35 for the 4.2-oz. night treatment.

Alfaparf Milano’s Semi di Lino Diamante range is launching an antiage line in September as part of the overall Diamante line, which contains diamond powder. The new antiage range includes three items, a shampoo, a conditioner and an in-salon treatment vial. WWD, FRIDAY, AUGUST 8, 2008 11 WWD.COM Weak July Sales Raise B-t-s Worries Continued from page one b-t-s, but added that July comparable-store sales Since April, consumers, bearing the burden of higher fuel were a “discouraging sign.” costs, have pocketed roughly $100 billion in tax rebate checks, Piper Jaffray & Co. analyst Neely Tamminga but because the last checks were mailed out early last month, said that, even though it may seem too early to tell few believe retailers saw much benefi t this period. “Stimulus how b-t-s will shape up, some retailers already checks have been fully refunded,” said Stifel Nicolaus retail have tightened up their expectations for the just- analyst Richard Jaffe. “Rebate checks had no impact on July. completed second quarter. It’s done, in my humble opinion.” Both Abercrombie & Fitch Co. and Chico’s FAS Others have a different view. According to Craig Johnson, presi- Inc. lowered guidance for the period after reporting dent of Customer Growth Partners LLC, consumers have spent only decreases in comps of 7 and 18.5 percent, respectively. 25 percent of the tax rebates, most of which went “straight out the However, in a demonstration of the value of stringent door to pay for higher gasoline costs, which, for the three months internal discipline, J.C. Penney, Gap and Hot Topic — of April to June, were also $22 billion higher than last year.” with comps down 6.5, 2.1 and 11 percent, respectively The good news, Johnson predicted, is that what families have — guided second-quarter estimates higher. not spent will “provide a halo” over b-t-s season, the second- “From a Wall Street perspective, we are head- Buckle continued to pick up market share. most-important selling period for retailers behind Christmas. ing into back-to-school with some uncertainty,” Citigroup analyst Kimberly Greenberger said that, with this Tamminga said. “We would expect you’re going to month’s dropping oil prices, retailers may see dividends for have several of these companies guide down the second half during their Q2 earnings cycles, which really kick off next week. If you are tied to back- to-school buying trends, you might actually wait JULY SAME-STORE SALES before making that call.” But, like last month, consumers are spending less on discretionary purchases such as clothing JULY JUNE MAY and more on staple merchandise. Mass merchants tracked by WWD averaged a 3.8 percent increase in 2008 2007 2008 2008 comps in July, while specialty stores and department % Change % Change % Change stores were down 1.5 and 4 percent, respectively. Of 37 companies tracked, only 14 had gains, 22 had de- DEPARTMENT STORES clines and one — The Children’s Place — was fl at. BON-TON 0.7 -7.6 -6.5 -9.9 “As a whole, discounters are still doing well,” said Michael Niemira, chief economist at the DILLARD’S 2.0 -6.0 -5.0 -7.0 International Council of Shopping Centers. “It’s GOTTSCHALKS -2.1 -3.9 -9.5 -8.6 really a story that value and convenience are the KOHL’S -10.4 0.0 2.3 -7.2 driving forces behind retail demand right now.” BJ’s Wholesale Club Inc. registered a 16.7 in- NEIMAN MARCUS -2.0 8.3 -2.4 0.2 crease in July comps, including gasoline, which NORDSTROM -6.1 9.4 -18.6 10.9 accounted for 9.7 percent, versus July 2007’s 1.5 J.C. PENNEY -6.5 10.8 -2.4 -4.4 percent gain. Costco Wholesale Corp. also did SAKS -5.3 14.9 1.9 -8.7 well, posting a 10 percent increase compared with a 6 percent gain a year ago. STAGE STORES -6.2 -1.7 1.2 0.1 Not all discounters were buoyant, though: Target AVERAGE: -4.0 2.7 -4.3 -3.8 Corp., which generally has struggled of late in the face of a revived Wal-Mart, reported a 1.2 decrease for July versus a 6.1 percent increase last year. SPECIALTY CHAINS Department stores continued to have a tough time ABERCROMBIE & FITCH -7.0 -4.0 -3.0 -1.0 last month as seven out of the nine retailers tracked AEROPOSTALE 13.0 -11.9 12.0 6.0 by WWD posted negative comps. Same-store sales Chico’s lowered quarterly guidance after an 18.5 percent slid 4 percent on average, with Kohl’s Corp. leading comp drop in July. AMERICAN EAGLE -7.0 -6.0 -11.0 -9.0 the list of decliners with a 10.4 percent decrease. AMERICAN APPAREL 14.0 N/A 16.0 24.0 However, Bon-Ton Stores and Dillard’s Inc. managed Jaffe cited Kohl’s, which posted negative comps but BANANA REPUBLIC -8.0 1.0 -5.0 -5.0 increases of 0.7 and 2 percent, respectively. had fairly good margins. BATH & BODY WORKS -5.0 -2.0 -8.0 -11.0 Higher-end players weren’t immune, either, Analyst Jennifer Black of Jennifer Black & raising further questions over the health of the Associates, agreed: “It’s all about margin, and less BUCKLE 20.9 7.6 28.9 34.7 luxury sector. Nordstrom Inc. reported a 6.1 de- about sales.” CACHE 2.0 6.0 6.0 5.0 crease for the month, compared with a 9.4 percent Regardless, some companies understand how to CATO -1.0 -5.0 4.0 2.0 gain last July, while Saks Inc.’s comps slid 5.3 per- control inventory better than others, and how to pro- cent, compared with a 14.9 percent gain last year. vide a new and exciting line at good price, Black said. THE CHILDREN’S PLACE 0.0 -1.0 16.0 10.0 Neiman Marcus same-store sales were down 2 per- The teen market, which is gearing up for b-t-s, is one CHICO’S FAS -18.5 -6.7 -12.9 -16.9 cent for the month. of the most competitive sectors right now, she said: “The GAP (U.S. STORES) -6.0 2.0 -5.0 -7.0 Specialty store composite fi gures would have teen line is struggling a little more than others. There is been worse if not for so much competition.” HOT TOPIC -2.1 -7.4 -0.3 -0.2 Buckle Inc.’s 20.9 percent Taking into consider- MOTHERS WORK 2.8 -5.4 0.8 4.3 increase in comps, 13.3 ation all the promotions OLD NAVY -16.0 -9.4 -10.0 -25.0 percentage points better From a Wall Street across the board, Black than July 2007. American said it was very diffi cult PACIFIC SUNWEAR -4.0 -4.6 3.0 -3.0 “ Apparel Inc. also did perspective, we are heading to distinguish one’s brand. RITE AID 1.2 1.6 -0.4 1.3 well, delivering a 14 per- Buckle, for instance, has VICTORIA’S SECRET -6.0 -4.0 -12.0 -4.0 cent gain, while Urban into back-to-school with done well because it has WALGREENS 4.1 7.2 3.4 3.9 Outfitters Inc., which great brand strength and doesn’t report monthly some uncertainty. provides differentiated WET SEAL -8.2 -7.2 -2.9 -2.0 comps, wowed analysts ” merchandise, she said. ZUMIEZ -1.4 9.7 -3.4 0.2 with a 13 percent jump in — Neely Tamminga, Piper Jaffray & Co. “The product, not the AVERAGE: -1.5 -2.0 0.8 0.3 second-quarter comps. price, continues to be the But the long-struggling Gap Inc. posted an 11 per- driving factor behind sales,” said Needham & Co. re- cent decrease across the board, with brands Banana tail analyst Christine Chen. “We believe unique, qual- MASS MERCHANTS Republic, Gap North America and Old Navy report- ity, trend-right product is even more valuable to the BJ’S WHOLESALE CLUB* 16.7 1.5 8.3 6.8 ing 8, 6 and 16 percent decreases, respectively. consumer in this environment as shoppers make pur- Comps for teen retailer American Eagle chases on a ‘want it’ versus ‘need it’ basis.” COSTCO 10.0 6.0 9.0 7.0 Outfi tters Inc. fell 7 percent, while rival Aéropostale Going into this month, Chen anticipates better re- ROSS STORES 4.0 1.0 8.0 7.0 Inc. charged ahead with a 13 percent jump. sults as new fall products make their way into stores. STEIN MART -8.7 -3.4 -7.7 -12.4 Stifel Nicolaus’ Jaffe wasn’t alarmed by the July Piper Jaffray’s Tamminga agreed, and saw a silver results. “July is a clearance month,” he said. “This lining. “The women’s apparel retailers, come second TARGET -1.2 6.1 0.4 -0.7 is the time when people fl ush out all the spring quarter, will be about 10 months into a contraction cycle TJX COS. 3.0 5.0 5.0 2.0 and summer merchandise and reposition them- on their margins,” she said. “And heading into the back WAL-MART (U.S. DISCOUNT)* 3.0 1.3 6.1 4.0 selves for the fall season. So, for the best of times, half of this year, given much leaner inventories, better AVERAGE: 3.8 2.5 4.2 2.0 you want to have an effective and timely clearance product and maybe a fashion-starved customer at this of merchandise where you preserve margins and point, they might, counterintuitively in this environment, set the stage for fall.” have an opportunity for upside relative expectations.” TALLY: In a tough economy, retailers are concerned Shoppers might get a renewed itch to shop, as well, UP 14 17 18 21 with keeping inventories as lean as possible. “The but in the meantime, retailers will have to continue good news is you preserve margin and live to fi ght with their current strategies, according to Jaffe. FLAT 1 1 0 2 another day,” he said. “The bad news is you might “You run your business more tightly, looking to turn DOWN 22 18 19 13 not have as many dollar sales as you did the prior inventories more quickly to generate more sales and TOTAL 37 36 37 37 year, but because they are low-quality sales, sales more gross margin dollars on a smaller inventory as- at a discount, sales at depressed margin, you don’t sortment,” he said. “That would be the strategy all fall,

*Excludes fuel sales SOURCE: COMPANY REPORTS mind giving some of those up.” but we’ve seen it play out this month, as well.”

12 WWD, FRIDAY, AUGUST 8, 2008 WWD.COM image Kenzo’s Biggest OF THE WEEK Paris Unit Opens

Penélope Cruz in Chanel Haute Couture at a New York screening of “Elegy.” Photograph by Steve Eichner. A view of the new Kenzo boutique on Avenue George V. PHOTO BY FRANCK MURA FRANCK PHOTO BY By Miles Socha PARIS — With a high-powered retail neighbor — Louis Vuitton’s largest store in the world — Kenzo has opened its biggest unit here on the Avenue George V. The two-level corner store, spread over 5,400 square feet, opened for business Wednesday af- ternoon and is designed to “create intimacy in a big space,” James Greenfi eld, Kenzo’s senior vice president, said during a walk-through. With accessories fi xtures resembling retro coffee tables, fitting rooms equipped with piped-in bird chirps and lots of kimono-print lounge-style seating, the store has a cozy, home- like atmosphere, peppered with lots of Antonio Marras touches. Kenzo’s artistic director since 2003, Marras, in concert with the Milanese architects Beltrame-Gelmetti Associates, has created a re- tail vocabulary for Kenzo that includes clothing racks inspired by fi sh spines and stucco fl owers blooming out of walls. Some 53 new or renovated Kenzo points of sale are slated to get the fashion house’s new black-and-white design concept this year, said Greenfi eld, who recently assumed operational management of the company, part of LVMH Moët Hennessy Louis Vuitton. A Kenzo fl agship unit in New Delhi is slated to open in October, he noted.

For more views of the new Kenzo store, see WWD.com.

The George V fl agship, one of six Paris Kenzo locations, puts women’s wear at the forefront, with an accent on luxurious accessories and runway looks. Children’s wear also gets a special showcase, demarcated by a mannequin seated in a toy car. Avenue George V — already home to a plethora of high-fashion boutiques includ- ing Balenciaga, Givenchy, Armani Collezioni, Paris Hermès and Jean Paul Gaultier — is on a retail Hilton upswing, with Sonia Rykiel recently arriving and Paris Hilton Takes Copenhagen Bulgari coming soon. The luxury hotel Fouquet’s Barrière, which opened last year, also is funnel- COPENHAGEN IS TURNING INTO PARIS’ FASHION WEEK WITH she said. “We’re opening everywhere.” ing more upscale clients to the Champs-Elysées the appearance of Paris Hilton at the Copenhagen International In October, PH Europe will introduce end of the street, anchored by Vuitton. Fashion Fair Thursday. a new retail concept designed to take the The Kenzo store boasts the brand’s first Hilton arrived surrounded by bodyguards, photographers and Hilton brand to the next level. The shop-in- VIP suite to accommodate high-profi le clients. fans who had waited for hours at the Paris Hilton stand, where she shops, dubbed “Enter my world,” feature a Greenfi eld noted that some 46 percent of Kenzo’s signed handbags from her latest line and posed for photos with minimalist white and pink decor with a back customers at a previous location on George V look-alikes wearing matching Paris Hilton T-shirts. wall emblazoned with a giant photo of Hilton, were tourists, a number likely to increase. Such scenes have been repeating themselves across the city while the fl oor includes a runway under the Men’s wear and men’s accessories, show- all week — when the celebutante’s not in the studio shooting her banner, “Join me on the catwalk.” Other cased on the lower level, include exclusive handbag campaign. Outside her hotel, where local journalists have categories include “Share my accessories” pieces to cater to an upscale clientele. Candy checked in to be close to the star, fans have waited outside all and “Open my jewelry box.” The corners Box handbags are among women’s products ex- day for a glimpse, with shrieks of “I love you, Paris,” when she’s could even be adapted to include Hilton’s clusive to the unit. appeared. other lines, such as fragrances and apparel, Market sources estimate that the Kenzo bou- Meanwhile, there was chaos when Hilton and her beau, Good according to Peter Bur, the retail design tique should generate annual revenues of about Charlotte band member Benji Madden, headed to the Tivoli strategist behind the concept. 10 million euros, or $15.4 million at current ex- Gardens amusement park, which Hilton cites as the highlight of The brand’s consumers range in age from 13 to 20 in Europe, change. her Danish sojourn so far. “I went on one roller coaster, like, three while in the Middle East and Asia, fans go up to 30. “She is an Meanwhile, workmen are putting the fi nish- times in a row,” she said. icon,” said PH Europe brand director Jens Gregersen. “Of course ing touches on Kenzo’s new headquarters in a But this is very much a business trip. Hilton’s outfi ts have included you have ups and downs, but she gets back on her feet.” 17th-century mansion on the Rue Vivienne, just yellow heels from her own shoe line paired with a strappy blue dress Next up is a reality TV show, which airs next month, called steps away from Kenzo Takada’s fi rst boutique, from her clothing collection, while one of her new handbags is worn in “Paris Hilton Is My New Best Friend,” plus a new album out the which opened in the Galeries Vivienne in 1970. such a way that it makes it into every single photograph. same month. “I love Kylie Minogue, so it’s very inspired by her,” Boasting high ceilings and two courtyards, Indeed, the celebrity, whose bags are licensed to the Danish Hilton said. “It’s very dance music. My last album was more hip- the headquarters will house showrooms, design fi rm PH Europe, takes a very hands-on approach to the business. hop.” A new fragrance called Fairy Dust is also in the offi ng. studios, ateliers and press and administration “We’re opening, like, 400 doors only for the handbags worldwide,” — Ellen Groves areas when it opens in September. WWD, FRIDAY, AUGUST 8, 2008 13 WWD.COM Media/Advertising Newsstand Sales: Redefi ning the Word ‘Down’ By Irin Carmon seen disappointing sales for several periods in a row, even when “I don’t think we would have seen these types of declines if the the economy was fl ush, suggesting more of an overall move away economy had been in a different place,” said Robin Steinberg, THE PHRASE “FLAT IS THE NEW UP” BECAME A MANTRA IN from big women’s titles. (Perhaps in reaction, Glamour unveiled senior vice president and director of print investment and recent years when it came to assessing newsstand sales. Well, as a redesign this month.) Even newsstand stalwart Cosmopolitan activation at MediaVest. “We would have seen some declines, core fashion titles, women’s service books and men’s magazines dropped 6 percent in this period, a difference of more than but not deep declines.” That said, she added: “The future of have almost universally posted declines in their single-copy sales in 100,000 copies, after essentially fl at newsstand sales since 2004. magazines is not going to have the same distribution exposure the fi rst half of 2008, how does “less down is the new up” sound? The only source of growth across the board has been in as in years past,” as the business model shifts from emphasizing To wit, Hachette Filipacchi Media’s Tom Masterson, senior vice total circulation, which, given the newsstand declines, usually the number of eyeballs to assessing quality of audience. president for consumer marketing and manufacturing, pointed out means that publishers are spending more than ever to build and And media companies are experimenting with new that, while Elle’s newsstand was down 6.3 percent in the fi rst six maintain their subscriber bases. And advertisers are traditionally distribution tools such as Maghound, the so-called “Netfl ix for months, “many of Elle’s competitors decreased more.” more skeptical of that kind of audience-building, given magazines” launching in September. A subsidiary of Time Inc., That’s true — Vogue was down nearly 15 percent, though publishers’ past practices of steeply discounting subscriptions. Maghound will allow consumers to switch in and out titles for a it still outsells Elle on the newsstand by an average of about That Men’s Vogue’s newsstand is down 39.1 percent, for fl at monthly fee, and around 300 titles have signed up so far. 50,000 copies monthly; Harper’s Bazaar fell 8.3 percent, and example, even as it’s raising its rate base to 400,000, can be Magazine publishers also are trying to fi gure out how to leverage W, which gets the vast majority of sales through subscription, explained several ways: fi rst, that it suffers from an apples-and- their Web sites to build a subscription base — a potentially more was down 10 percent. oranges comparison between fi ve issues published in the fi rst effi cient, or at least cheaper, way to add subscribers than direct Or take Shape, which was down about 10 percent overall half of 2008 and three in the fi rst half of 2007; second, and mail or verifi ed circulation. Hearst magazines in particular — many on the newsstand in the fi rst half, but still averaged higher more signifi cantly, that it’s growing its audience the expensive of which tend to be big, single-copy-heavy titles in an age of grim total sales than the troubled fi tness category in general. (Self way, through subscriptions, and not wowing on the newsstand. newsstand — have suggested this as a winning strategy. In the face had the dubious honor of being less down, but is still smaller; The title also has upped its verifi ed circulation (bulk of a newsstand decline of 17.3 percent, for example, Oprah’s Seelig Shape has beefed up its distribution at checkout and added copies in public places) by 43.6 percent since last year. A pointed to the fact that the magazine hasn’t had to resort to verifi ed 17,000 pockets nationwide.) spokeswoman said, “Men’s Vogue continues to take risks on circulation and that subscriptions were up 7 percent, in part because Growing market share might be the last remaining competitive covers to recognize accomplishment over celebrity.” Case in “we played around with the subscription offers on Oprah.com.” advantage in an environment where nearly every editor in chief point: the model-free Bugatti cover in May, which sold 45,000 She added, “The simple truth is consumers are not going to is seeing the kind of declines that once would have gotten them copies, according to Rapid Report. (That was still better than the places where our magazines are sold as frequently as they fi red. The long-standing expectation that a healthy magazine is the worst cover to date, April with Alex Rodriguez, at 41,000.) were,” i.e., airports, supermarkets, drugstores and other retailers. one that sees successive growth on the newsstand is in question As such, given the fl ood of negative newsstand fi gures That said, the magazine recently saw the exit of editor in — you can’t exactly fi re everyone. in the fi rst half, the few examples of uptick in sales should chief Amy Gross, billed as voluntary, and new editor of former Whether the change is cyclical (uncertain economic times be particularly celebratory — among them, In Style, which, Golf for Women editor Susan Reed will have to fi gure out how that include high gas prices, fewer supermarket trips and whether you consider it a core fashion title or a peer of Glamour and if the newsstand can be turned around. George Janson, less disposable income) or secular (consumer behavior is and Marie Claire, was the only one in either group to see any managing partner/director of print at Mediaedge:cia, said, undergoing a fundamental change away from newsstand, or rise in newsstand, by 4 percent to 783,254. That’s before the “Some magazines have reached a natural level of circulation,” from print magazines themselves) depends on whom you ask. recently unveiled redesign was even tested on the newsstand. pointing to Oprah in particular. Editors and publishers would have it be the former. And Rodale’s David Zinczenko showed once again that he “Magazines are also coming off a period where [advertising] “I don’t think newsstand softness is systemic to magazines, can put his money where his mouth is, maintaining Men’s spending and circulation have, for the most part, been fl at to but rather systemic to the economy,” said O, The Oprah Health’s position as the number-one newsstand seller in the up,” added Janson — meaning that what goes up sometimes Magazine publisher Jill Seelig. men’s category with a 2 percent growth, and having a hand in has to come down. But some advertisers and observers are beginning to wonder two newer magazines, which also have seen good news: Women’s But if the latest newsstand numbers prove to be long-term whether the second diagnosis is upon us. As consumers’ attention Health, with its 12 percent rise, and Best Life, up almost 20 indicators, publishers could be faced with hard choices, such fractures, spoiled by choice and easy digital access, the culture and percent. Maybe that’s why Men’s Health Living has been given a as cutting rate bases or rethinking their distribution models. “As entertainment industries already have adjusted their expectations, go-ahead in a tough environment for shelter magazines. content becomes free on the Internet, I question whether or not the counting smaller sales numbers than ever as blockbusters. The So, do the steep declines serve as a harbinger of equally future of magazines will be opt-in and nonpaid,” said Steinberg. magazine industry might be falling prey to the same tectonic shift. sharp falls in advertising revenue as fi rms seek other media? — With contributions from Several magazines, such as Glamour and Marie Claire, have Well, for now, media buyers seem to be seeing the big picture. Stephanie D. Smith and Amy Wicks

FIRST-HALF 2008 CIRCULATION FIGURES TOTAL PAID AND TOTAL PAID AND NEWSSTAND 1H08 NEWSSTAND 1H07 % CHANGE VERIFIED CIRC 2008 VERIFIED CIRC 2007 % CHANGEE FASHION Allure 228,667 253,056 -9.6% 1,091,147 1,062,778 2.7% Cosmopolitan 1,753,700 1,867,481 -6.1% 2,937,800 2,915,867 0.8% Elle 332,167 354,333 -6.3% 1,082,278 1,072,729 0.9% Essence 233,265 254,698 -8.4% 1,051,130 1,089,495 -3.5% Glamour 685,633 755,289 -9.2% 2,354,973 2,262,242 4.1% Harper’s Bazaar 167,300 182,506 -8.3% 716,800 722,058 -0.7% In Style 783,254 753,358 4.0% 1,827,644 1,780,681 2.6% Lucky 237,750 250,240 -5.0% 1,156,306 1,167,020 -0.9% Marie Claire 289,700 329,473 -12.1% 979,500 971,348 0.8% Self 331,183 360,229 -8.1% 1,495,033 1,486,992 0.5% Shape 338,607 376,684 -10.1% 1,703,421 1,747,569 -2.5% Town & Country 44,400 50,293 -11.7% 461,100 461,571 -0.1% Vanity Fair 376,500 355,190 6.0% 1,144,001 1,153,517 -0.8% Vogue 385,500 452,207 -14.8% 1,224,131 1,301,575 -6.0% W 34,917 38,974 -10.4% 458,867 457,996 0.2% Women’s Health 306,864 275,284 11.5% 1,140,068 786,892 44.9% TEEN Cosmogirl 302,800 369,238 -18.0% 1,426,300 1,446,836 -1.4% Seventeen 328,400 355,480 -7.6% 2,024,100 2,052,666 -1.4% Teen Vogue 201,200 238,713 -15.7% 1,017,125 973,172 4.5% LIFESTYLE/SERVICE Martha Stewart Living 271,500 307,320 -11.7% 2,037,630 2,005,980 1.6% More 156,200 186,400 -16.2% 1,266,980 1,254,273 1.0% O, The Oprah Magazine 734,000 887,836 -17.3% 2,394,300 2,436,703 -1.7% Real Simple 389,016 398,137 -2.3% 2,026,466 1,973,306 2.7% Redbook 202,200 244,537 -17.3% 2,228,000 2,374,237 -6.2% MEN Best Life 80,378 67,333 19.4% 518,763 468,777 10.7% Details 72,680 75,365 -3.6% 458,536 457,186 0.3% Esquire 112,900 108,480 4.1% 726,400 721,133 0.7% GQ 211,700 223,452 -5.3% 915,173 931,694 -1.8% Maxim 426,673 483,281 -11.7% 2,535,884 2,568,339 -1.3% Men’s Health 559,136 547,958 2.0% 1,868,500 1,816,671 2.9% Men’s Journal 72,792 75,323 -3.4% 710,255 707,808 0.3% Men’s Vogue* 53,600 87,977 -39.1% 368,898 307,501 20.0%

SOURCE: PUBLISHERS ESTIMATES PROVIDED TO AUDIT BUREAU OF CIRCULATIONS *Men’s Vogue published three issues in the fi rst half of 2007 and fi ve issues in the fi rst half of 2008. 14 WWD, FRIDAY, AUGUST 8, 2008 WWD.COM Financial

Investors moved away from retail issues amid a broader sell-off Thursday as July same-store sales indicated potential trouble for back-to- DAILY STOCK WRAP school and fall because consumers curtailed spending with the last of the tax rebate checks. The Standard & Poor’s Retail Index fell 2.1 per- cent for the day, and the Dow Jones Industrial Average broke a two-day winning streak and dropped 1.9 percent. Wal-Mart led retail stocks on the way down with a 6.3 percent drop. Other broadline decliners included Target, 4.7 percent; Sears, 4 percent, and Macy’s, 3.9 percent. Among the specialty stores posting declines over 6 percent were: Abercrombie & Fitch, American Eagle Outfi tters, Chico’s FAS, Hot Topic, Pacifi c Sunwear and Talbots. Vendors also took a beating in the markets, though there were some gainers, including Polo Ralph Lauren, which was up 1.8 percent after its annual meeting Thursday and strong fi rst-quarter results on Wednesday. On the other side of the pond, shares of Burberry slid 1.5 percent and LVMH Moët Hennessy Louis Vuitton fell 1 percent.

10 BEST PERFORMERS 10 WORST PERFORMERS

DAILY COMPANIES P/E VOLUME AMT DAILY COMPANIES P/E VOLUME AMT HIGH LOW LAST CHANGE HIGH LOW LAST CHANGE

47.50 45.00 Warnaco (WRC) 34.1 2469527 47.38 +9.3% 20.75 18.26 Citi Trends (CTRN) 26.2 2148797 20.45 -17.7%

29.00 26.20 True Religion (TRLG) 21.5 3765261 28.61 +7.1% 6.05 5.14 Bon-Ton (BONT) 14.0 394815 5.22 -13.6%

1.57 1.43 Hartmarx (HMX) - 82487 1.56 +6.9% 0.44 0.40 NexCen (NEXC) - 305931 0.40 -12.8%

34.66 33.23 J.C. Penney (JCP) 7.1 11954552 33.53 +6.1% 14.04 12.41 Talbots (TLB) - 2987316 12.64 -12.2%

12.26 11.23 Charlotte Russe (CHIC) 8.3 1069203 12.12 +5.9% 14.17 12.50 Zumiez (ZUMZ) 16.8 853077 12.77 -11.5%

1.99 1.91 Bluefl y (BFLY) - 3400 1.99 +5.9% 52.72 49.29 Abercrombie & Fitch (ANF) 10.6 9259238 49.80 -10.6%

10.15 10.15 Bulgari (BULIF) - 0 10.15 +4.1% 48.98 44.26 Buckle (BKE) 19.0 1368092 45.35 -10.1%

1.68 1.59 Delia’s (DLIA) - 47670 1.66 +3.8% 6.26 5.78 Hot Topic (HOTT) 18.9 1224874 5.95 -9.9%

21.90 20.83 Oxford (OXM) 7.3 184903 21.90 +3.1% 0.90 0.84 Nitches (NICH) - 853 0.90 -9.1%

2.57 2.32 Bakers (BKRS) - 15586 2.44 +3.0% 15.47 14.21 Shoe Carnival (SCVL) 19.1 82548 14.28 -9.0% Retail Ventures’ Wilansky Out in January By David Moin The company reported that second- WWD quarter sales for the 13 weeks ended Aug. $9.59 RETAIL VENTURES INC. WILL NOT 2 decreased 1 percent to $459.8 million renew the employment contract of from $464.6 million in the year-ago peri- INDEX Heywood Wilansky, president and chief ex- od. Same-store sales fell 5.1 percent. TRILLION ecutive officer, which expires Jan. 31, 2009. Total sales for the 26 weeks slid 0.5 per- COMPOSITE The company cited cost savings and the cent to $926.1 million from $930.5 million TOTAL U.S. FEDERAL DEBT AS OF JULY 31. sale of 81 percent of the 113-unit Value and same-store sales declined 4.7 percent. SOURCE: TREASURY DEPARTMENT 957.19 City discount department store chain Shares in the company dropped 31 last January as reasons for not extending cents on Thursday to close at $4.14 on the Wilansky’s tenure. The stake was sold to New York Stock Exchange. The stock has an entity consisting of VCDS Acquisition lost about two-thirds of its value over the Holdings LLC, Emerald Capital past year. Management LLC and Crystal Value LLC. Wilansky has headed Retail Ventures $2.45 Retail Ventures operates the DSW since November 2004. According to footwear chain selling brands at dis- Securities and Exchange Commission fi l- count prices in about 260 locations, and ings, Wilansky was paid a $1.1 million sal- TRILLION Filene’s Basement, the 36-unit off-price ary last year. He received no bonus for the fashion chain, primarily in Boston, New year ended Jan. 31. In 2006, his total com- WAL-MART’S TOTAL SALES OVER York, Atlanta, Chicago, Baltimore and pensation was $7.6 million, including sala- THE LAST 10 FISCAL YEARS. -27.11 Washington. ry, stock awards, options and other items. LVMH Wins Canadian Trademark Suit Olympics Fuel Puma’s 2nd Qtr. By Matthew Lynch According to the June ruling, the four By Damien McGuinness pionships, Euro 2008, earlier this year also defendants continued to operate three contributed to brand visibility, with Puma IN A SIGN THAT CANADA IS STEPPING stores under the Wynnie Lee Fashion BERLIN — German sportswear giant Puma sponsoring five teams. Going forward, up its pressure on fake luxury goods, a name in malls and continued to sell coun- AG, majority owned by PPR, reported an Puma will take part in the round-the-world judge has awarded Louis Vuitton Malletier terfeit goods after the initial Anton Pillar increase in second-quarter net profits on sailing marathon, the Volvo Ocean Race, SA the largest payout in a trademark coun- action. In March 2006, defendant Wynnie Thursday, thanks to a rise in global sales. which sets off from Alicante in October. terfeiting and copyright suit in the coun- Lee entered into a settlement with Louis The Herzogenaurach-based company, All regions contributed to sales try’s history. Vuitton Malletier to stop selling infring- which is the world’s third-largest sport- growth, but Latin America performed The award of 982,556 Canadian dol- ing goods and pay a penalty. An investiga- ing goods brand, saw net income rise by particularly well, and sales in the U.S. lars, or $933,989 at current exchange, tion conducted by Louis Vuitton Malletier 0.9 percent over the second quarter to 45.6 market were up signifi cantly compared came after a four-year legal battle be- later that year revealed the defendants million euros, or $71.1 million. Dollar fi g- with the fi rst quarter. tween Louis Vuitton Malletier and a were continuing to sell fake goods. ures are converted from euros at average Sales in the Americas as a whole in- group of British Columbia shop owners Michael Manson, a partner at the exchange rates for the period. creased by 14 percent currency-neutral who continued to sell counterfeit goods Vancouver law fi rm Smart & Biggar who Earnings before interest and taxes to 147 million euros, or $229.3 million. despite court orders. served as counsel to Louis Vuitton Malletier were up by 2.1 percent to 62.3 million However, sales were negatively affected In her ruling, fi led in British Columbia in the action, said the size of the judgment euros, or $97.2 million. Consolidated by the diffi cult economic environment: Supreme Court in Vancouver on June 19, refl ected the defendants’ continued actions. sales, meanwhile, increased more than Compared with the previous year, sales Madam Justice Mary Ellen Boyd took “I think that judges are sending a message 11 percent currency-adjusted or more in this region decreased by 1 percent. the operators of Wynnie Lee Fashion to that recidivist activities and disregard for than 6 percent in euro terms to 577 mil- Apparel orders in America did improve, task for their continued infringement. the court won’t be tolerated,” he said. lion euros, or $900.1 million. Puma said with a rise of 15 percent currency-neutral “Damages ought to be awarded on the Madam Justice Boyd presided over a it is pleased with the results, which dem- in the fi rst quarter. high end of the scale where the conduct two-day trial in early June in which only onstrate impressive sales growth despite Looking forward, Zeitz admitted that of the defendants, both before and dur- one of the four defendants presented the sluggish consumer environment. overall economic conditions were diffi cult, ing proceedings, is dismissive of law and herself in court. Manson said that defen- During an analyst conference call on but said he was confi dent Puma will post order and demonstrates a necessity for de- dant Jacqueline Lee left the court during Thursday, chief executive Jochen Zeitz at- another year of sales growth in 2008. “The terring future infringements,” she wrote. a lunch break on the fi rst day of trial and tributed much of Puma’s success to the current volatile market environment and Louis Vuitton Malletier, a unit of LVMH never returned. Olympic Games. The label’s main focus is low consumer sentiment make it extreme- Moët Hennessy Louis Vuitton, seized hun- A representative for Wynnie Lee on track and fi eld and the core category ly diffi cult to provide a concrete forecast dreds of counterfeit articles at a Wynnie Fashions and the defendants could not is running. In total, Puma sponsors 16 na- on 2008 profi ts, while Puma’s profi tability Lee Fashion store in Vancouver in 2004 be located for comment. The telephone tional teams, including Jamaica, Sweden should still remain on a very high level in under an Anton Pillar order. at the store had been disconnected. and Morocco. The European soccer cham- a competitive comparison,” he said. WWD, FRIDAY, AUGUST 8, 2008 15 WWD.COM/CLASSIFIEDS

For more career opportunities log on to fashioncareers.com. Call 1.800.423.3314 or e-mail [email protected] to advertise. COMMERCIAL REAL ESTATE

DESIGNER & SALESPERSON Jr. Sportswear Co. looking for talented Showrooms & Lofts designer & salesperson who love fashion BWAY 7TH AVE SIDE STREETS and are creative, organized, and detail Great ’New’ Office Space Avail Associate Designer oriented. Seeking energetic individual ADAMS & CO. 212-679-5500 who have ability to multi-task & meet Knits/Sweaters- NY deadlines. Designer response from We are seeking someone who is concept thru production. Proficiency in Illustrator & Photoshop req’d to make highly creative & possesses strong detailed sample tech packs for overseas knowl. of the contemporary mkt. factories. Fax to: Steve: 212-840-0500 Divisional Merchandise Manager Will be responsible for knit fabrics, The DMM will analyze product trends and historical yarns, stitch, trim & trend research, INDEPENDENT REPS data and channel input at departmental level. Will flat sketching, presentation boards We are a Hot, New, Cutting Edge, Junior develop seasonal strategies based on analysis and & lab dip approvals. Must have Contemporary Line seeking established excellent organizational and sales representation in ALL Major PATTERNS, SAMPLES, review financial targets with Planning at the depart- Markets. Come see us at: WWDMAGIC ment, class or style level as appropriate. Will lead communication skills along with North Hall, Booth YC14026, E-mail PRODUCTIONS proficiency in Photoshop & Web your info to: [email protected]. All lines, Any styles. Fine Fast Service. weekly cross-functional meetings to share information Please visit us on the Web: Call Sherry 212-719-0622. on current business issues. pdm. 3+ yrs exp. in contemporary www.wetteaze.com mkt is req. Pls e-mail resumes to: PATTERNS, SAMPLES, [email protected] E-Commerce Marketing Manager Product Development...... $75-90K PRODUCTIONS Responsible for developing long-term marketing Full service shop to the trade. APPAREL/HOME FASHION Intimates, Construction experience Fine fast work. 212-869-2699. strategies resulting in best ROIs while delivering SRI SEARCH INC Jennifer Glenn SRI Search Inc sales according to budget. Will create online market- WWW.SRISEARCH.COM 212-465-8300 212-465-8300 [email protected] ing strategy for all sites based on deep analysis of Allen Platt /Jennifer Glenn www.srisearch.com buying trends, site analytics and e-marketing results. [email protected] Search Will identify new opportunities to generate prospec- [email protected] Production Asst./Coord. tive new online customers and test new channels/op- We are seeking a Production hundreds of portunities and develop roll-out plan for those deemed CUSTOMER SERVICE Asst/Coordinator whose responsibilities include: style master set up and as profitable growth opportunities. REPRESENTATIVE issuing/trackimg POs, following-up on positions in Growing apparel manufacturer seek- production samples and comments. ing a qualified and energetic individu- measuring fit samples and updating fashion, retail Senior E-Commerce Inventory Analyst al to work in Customer Service. Previ- tech packs, and maintaining production The Sr. E-Commerce Inventory Analyst will ensure ous experience in Sales/ Sales Support reports & files. Must be very responsible, a plus; experience working with better organized & self-motivated. Knowledge and beauty. the financial success of E-commerce sites by ana- boutiques and department stores pre- of Excel is a must. Some experience lyzing business and developing plans that meet or ferred. Competitive salary and excel- with AS400 or similar- but will train. lent benefits. Please email resume to exceed targets (sales, gross margin and inventory Opportunity for growth. [email protected] Please e-mail your resume with salary turn goals). Will develop program assortment plans reqs to: [email protected] based on inventory levels, planned sales volume and Design Director or fax to: 212 328-1281 seasonal variances. Childrenswear Company has immediate opening for indiv. w/ min. 10 yrs exp. Must be able to oversee trend direction, P/T EXEC/ADM ASST E-Commerce Merchandiser develop & adhere to product calendar, Access. co. seeks reliable P/T Asst to The E-commerce Merchandiser will coordinate, and manage staff of 6 to 8, etc. Please CEO (Mon-Thur only). Good computer merchandise, and market E-commerce stores. Will send resume to: HR @ 212-967-4369 skills (type 50+): Word, Excel & Email. Good command of English language; monitor and analyze customer behavior, manage resp. for phones. Fax Res 212-869-7811 online product content including product descriptions, pictures, product metadata, and categorization and pricing. Will partner with cross-functional teams to accomplish website merchandising, marketing and overall aesthetics of the website.

Planner The Retail Planner will lead the development, planning, execution and communication of a prod- uct strategy and assortment that meets or exceeds financial goals. Will direct and manage the people and activities of the Buying team. Will review actual sales performance weekly/monthly, and recommend strate- gies to achieve financial goals.

Qualified Candidates, please visit our website to create a profile and upload your resume: http://guessinc.com/Work/

SALES PRESIDENT Contemporary, Junior Co. is seeking a Sales President to lead the sales team in our New York office. Must have experience working INDEPENDENT REP Needed in Pacific Northwest with Dept. and Chain stores. to rep top quality Women’s RTW to Please Fax your resume to: independent dealers. Liberal comm. % 323-263-0772 Resumes to: or E-mail to: [email protected] [email protected]

For subscriptions, call 800-289-0273 or visit our website WWD.COM MAKE an IMPRESSION

COLLECTIONS { SEASON } SEPTEMBER 6 — OCTOBER 8 NEW YORK | LONDON | MILAN | PARIS

IN PRINT | ONLINE | IN PERSON PHOTO BY JOHN AQUINO, STEVE EICHNER, KYLE ERICKSEN AND GIOVANNI GIANNONI GIOVANNI AND KYLE ERICKSEN EICHNER, STEVE AQUINO, JOHN BY PHOTO

For more information on advertising in WWD, contact Christine Guilfoyle, publisher, at 212-630-4737, or your WWD sales representative.