PLUS: BANGKOK WRIGHT CHOICE RETAIL BOOMS. PAGE 12

Robin Wright and Peter Lindbergh teamed up again for Gerard Darel’s latest ad campaign, which will be the French firm’s first international one. PAGE 9

HOLIDAY HANGOVER Shares Plummet On Store Closure Plan

By VICKI M. YOUNG

SEARS HOLDINGS CORP. is the latest company to join the store-closing game that is likely to be a WWD major feature of retailing in the year ahead. The company on Tuesday said it expects to close between 100 and 120 and Sears full-line WEDNESDAY, DECEMBER 28, 2011 Q $3.00 Q WOMEN’S WEAR DAILY stores, or 5 percent of its 2,200 full-line store loca- tions. It joins the ranks of specialty women’s chains Talbots, Coldwater Creek and Christopher & Banks, which are cutting their store base by 12 to 15 percent each. In addition, Gap Inc. said at its annual inves- tors meeting in October that it plans to shave 189 locations from the brand’s nonoutlet fleet in North America, reducing it to 700 stores by the end of 2013. The planned closures indicate the increasing squeeze on retailers that have struggled through the holiday period, and even before. And Sears is perhaps among the most pressured of them all, as the strategy of chairman and owner, hedge fund bil- lionaire Edward Lampert, misfires in the current consumer environment. Further evidence of Sears’ financial woes came Tuesday, when the company said it expects to record a noncash charge of $1.6 billion to $1.8 billion in the fourth quarter in connection with a valuation allowance on certain deferred tax assets. Sears’ two chains have been declining for years, and the period leading up to Christmas proved no better. In a statement that provided an update on its quarter-to-date performance, Sears said compara- ble-store sales for the eight-week and year-to-date periods ended Dec. 25 for Kmart fell 4.4 percent and 1.8 percent, respectively. The company said the declines reflected drops in the consumer electron- ics and apparel categories and lower layaway sales. SEE PAGE 6

IN WWD TODAY

Consumer Confidence Climbs PAGE 2 FINANCIAL: Consumer confidence rose again in December, returning to levels not seen since April as the improving jobs picture overcame worries about the housing sector.

Wild Mannered Designers are going crazy for animal prints, colorful beads and African handicrafts Kellwood Waves the Flag PAGE 8 ▼ this spring. Subtleties not included. For more, see pages 4 and 5. DENIM: Kellwood has big plans for its first in-house developed retail brand, Lamb & Flag, the first of which was unveiled earlier this month in California. The Louboutin/YSL Battle Goes On PAGE 2 FASHION: From top: Balenciaga by Nicolas Ghesquière’s Yves Saint Laurent painted snakeskin pump; Fiona Paxton’s leather and filed its documents with the metal necklace with wooden beads; Roger Vivier’s appellate court in its ongoing embroidered cotton, lacquered cork and raffia clutch; legal battle with Christian Barbara Bui’s beaded and embroidered leather boot, Louboutin over the use of a red PHOTO BY THOMAS IANNACCONE; STYLED BY ROXANNE ROBINSON-ESCRIOUT and R.J. Graziano’s beaded silk bangles. sole in footwear. Consumer Confidence Rose in December 2 WwD WEDNESDAY, DECEMBER 28, 2011 The confidence index was 9.3 points higher WWD.COM than November’s reading, reflecting an im- proved jobs picture in the U.S. Consumer Confidence Rises in December YSL Files Response rise in their incomes, with 17.1 percent anticipating an By Vicki M. Young increase, up from 14.1 percent last month. Chris G. Christopher Jr., senior principal econo- In Louboutin Appeal NEW YORK — The Consumer Confidence Index rose mist at IHS Global Insight, said, “Even though con- 9.3 points in December, getting a boost from consum- sumer confidence is gaining some ground, Americans NEW YORK — Lawyers for Yves Saint Laurent made ers’ perception of an improved labor market. face many hurdles, especially on the housing, employ- a federal court of appeals deadline to file its response According to the Conference Board, the index was ment and wage fronts. Wage gains are not keeping up in the Christian Louboutin red-sole trademark appeal 64.5 points in December, compared with 55.2 points last with price increases, and the housing market is taking before yearend. month. Both components of the index rose, with the a major beating.” The YSL attorneys filed their appellate brief on present situation portion climbing to 46.7 from 38.3 and He added that the fall in the unemployment rate to 8.6 Tuesday. the expectations part increasing to 76.4 from 66.4. percent in November and the decline in gasoline prices The dispute began in April, when Louboutin sued Lynn Franco, director of The Conference Board offered some relief to consumers. His firm is forecasting YSL in a New York federal court in Manhattan, Consumer Research Center, said, “After two months of e-commerce retail sales of about $60 billion for the fourth claiming that YSL’s red pump violated its red-sole considerable gains, the Consumer Confidence Index quarter, with holiday sales overall rising 4.8 percent trademark. In August, the presiding judge denied is now back to levels seen last spring [April 2011, 66.0]. above last year’s $453 billion in sales. “This is a relatively Louboutin’s request for a preliminary injunction and Consumers’ assessment of current business and labor good [confidence] report, especially at this time of year,” instead questioned the validity of the trademark, market conditions improved again. Looking ahead, con- the economist concluded. which Louboutin obtained in 2008. sumers are more optimistic that business conditions, The confidence front didn’t help U.S. stocks, with District court Judge Victor Marrero concluded that employment prospects, and their financial situations will the Dow Jones Industrial Average dipping slightly no one designer should have a “monopoly” on any color. continue to get better. While consumers are ending the by 0.02 percent, or 2.65 points, to close at 12,291.35. He also rejected Louboutin’s arguments that infringing year in a somewhat more upbeat mood, it is too soon to However, the S&P Retail Index managed to inch up on its trademark would cause “irreparable harm” and tell if this is a rebound from earlier declines or a sustain- 0.2 percent, or 1.29 points, to 530.06, despite news that YSL’s shoe caused “consumer confusion.” able shift in attitudes.” from Corp. that it would close be- Louboutin’s attorneys appealed the decision and Boosting confidence levels were improved assess- tween 100 and 120 Kmart and Sears full-line stores. in October filed their appellate brief focused on ments of the job market. Respondents said the job mar- Many of the major overseas indices were closed on Judge Marrero’s “errors of law” in determining that ket was more positive, with those indicating jobs were Tuesday. In Asia, the Nikkei 225 remained unchanged Louboutin’s red outsole mark was invalid. “plentiful” rising to 6.7 percent from 5.6 percent, while at 8,440.56 points. The Hong Kong stock market was In the court document filed Tuesday, YSL argued those claiming jobs are “hard to get” declined to 41.8 closed due to a holiday. In Europe, Frankfurt’s DAX that Louboutin cannot overcome the “formidable percent from 43 percent. The outlook for the next six rose 0.2 percent, or 10.83 points, to 5,889.76. The CAC hurdle” necessary to obtain a reversal of the lower months was favorable too, as those anticipating more 40 in Paris gained 0.03 percent, or 1.02 points, to court’s denial of the request for a preliminary injunc- jobs ahead rising to 13.3 percent from 12.4 percent. 3,103.11. The FTSE MIB in Milan was down 1 percent, tion. YSL said appellate review of the denial is based Those expecting fewer jobs decreased to 20.2 percent or 149.98 points, to 14,924.01. The London exchange on an abuse of discretion, a deferential standard that from 23.8 percent. Consumers also said they expected a was closed due to a holiday. shouldn’t be disturbed so long as it “falls within a range of permissible decisions.” It argued that func- tionality in trademark cases has long been treated as a question of fact reviewed under the clear error standard. YSL also cited a case in which a court de- Stamford Officials Rule on Cause of Fire termined that when there are two permissible views of Officials in Stamford, Conn., said the Michael Borcina, described as a friend of Badger’s the evidence, the fact finder’s “choice between them Christmas Day fire that killed the family of fashion and a contractor who was overseeing the renovations to cannot be clearly erroneous.” advertising executive Madonna Badger was appar- the house, jumped out of the building and told firefight- YSL also argued that there were other reasons why ently caused by embers from a fireplace that had been ers that he had led the children down to the second floor. the lower court’s decision should be upheld, such as taken to a mudroom or trash enclosure. However, the heat of the blaze had apparently driven the Louboutin’s inability to show “irreparable harm” and The fire at Badger’s Victorian home in the upscale children and grandparents back up to the third floor. a failure to establish a secondary meaning for the red- suburban town killed her three children — twin seven- Lomer Johnson, 71, who had spent the day before colored trademark. year-old girls Grace and Sarah and their playing Santa Claus at the Saks Fifth What seems key, however, is whether there’s even 10-year-old sister, Lily — as well as her Avenue flagship in Manhattan, apparently enough of a record of evidence and documents for the parents, Pauline and Lomer Johnson. Madonna died trying to save one of his granddaugh- district court to rule as it did. Stamford officials said at a press con- Badger ters. His body was found face down, ap- As expected, that’s a key point in both the ference Tuesday afternoon that portions of parently after stepping out a window onto Louboutin and YSL briefs on file with the appellate the home were in the middle of being ren- a temporary structure put up as part of court. Louboutin said the undeveloped record pre- ovated and should not have been occupied. the renovation, officials said. cluded any definitive ruling on the functionality issue. “They should not have been in the Badger, a fashion advertising execu- YSL, in its brief, argued that Louboutin’s admission home,” said Ernie Orgera, the director tive, founded the branding and creative of the lack of a record should mean that substantive

of operations for the town. ilt services firm Badger & Winters Group in appellate review should wait until a final decision is B

Orgera said there was a hard-wired fire y 1994. Prior to that, she made a name for made on the merits, one based on a fully developed

alarm system that would have notified fire arve herself at Calvin Klein’s in-house CRK transcript of the issues and documents presented be- H

officials in the event of a blaze, but it does y agency, where, as senior art director, she fore the court. not appear that it was connected. Orgera b played a key role in the designer’s cam- Harley I. Lewin, a partner at McCarter & English,

said it was not clear whether the home Photo paigns with Mark Wahlberg and Kate Moss which represents Louboutin, said, “We have taken a had battery-operated smoke detectors. The and his launch of the CK One fragrance. quick review [of the brief and], there are no surprises family was apparently asleep when the fire broke out, According to the Badger & Winters Web site, the here. YSL essentially is mirroring the arguments it and several bedrooms appear to have been on the second firm has worked with clients such as Vera Wang, Calvin used at the lower level, which is entirely expected.” floor, where renovations were taking place. Klein, Chanel, 5S Shiseido, Adidas, A|X Armani According to Lewin, a hearing date has been set for “Ms. Badger was out a window,” said an official, add- Exchange, BCBG Girls, The Limited, Perricone MD, Jan. 24 for oral argument in the afternoon before the ing that her bedroom was on the side of the house op- Rochas and Zac Posen. Second Circuit Court of Appeals in Manhattan. posite the children’s and had a flat roof outside the win- Officials said due to the circumstances, personal “We are pretty confident our brief is persuasive. dow, where she apparently escaped. “When the crews interviews had not yet been conducted with Badger Nonetheless, it remains the decision of the Court of arrived on the scene, the male occupant was down on and Borcina, which could help to clarify some details Appeals at the end of the day,” Lewin said. the ground. He was trying to gain entry into the house.” of the tragedy. — ARTHUR FRIEDMAN — V.M.Y.

Today on WWD.COM To e-mail reporters and editors at WWD, the address is Sectors in this issue [email protected], using the individual’s name. WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. ■ EYE: See more pictures of Robin Wright COPYRIGHT ©2011 FAIRCHILD FASHION MEDIA. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. LEGAL 2 TRADE 7 on the set of Gerard Darel’s spring-summer VOLUME 202, NO. 132. WEDNESDAY, DECEMBER 28, 2011. WWD (ISSN 0149–5380) is published daily RETAIL 1,6,7,12 DENIM 8 (except Saturdays, Sundays and holidays, with one additional issue in May, June, October and December, and print campaign shoot at WWD.com/eye. two additional issues in February, March, April, August, September and November) by Fairchild Fashion Media, FASHION 4-5 PEOPLE 9,10,11 ■ RETAIL: More images of the Lamb & Flag which is a division of Advance Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Condé Nast: S.I. Newhouse, Jr., Chairman; Charles H. Townsend, Chief store in the Brea Mall at WWD.com/retail-news. Executive Officer; Robert A. Sauerberg Jr., President; John W. Bellando, Chief Operating Officer & Chief Financial ■ BUSINESS: More business news and daily Officer; Jill Bright, Chief Administrative Officer. Periodicals postage paid at New York, NY, and at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services Tax Daily Quote markets coverage at WWD.com/business-news. Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian addresses to P.O. Box 503, ■ GLOBAL BREAKING NEWS RPO West Beaver Cre, Rich-Hill, ON L4B 4R6. POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615 5008. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P.O. Box 15008, North Hollywood, CA Robin Wright 91615-5008, call 800-289-0273, or visit www.subnow.com/wd. Please give both new and old addresses as It was really a hokey city printed on most recent label. Subscribers: If the Post Office alerts us that your magazine is undeliverable, we have no further obligation unless we receive a corrected address within one year. If during your subscription term or up to one year after the magazine becomes undeliverable, you are ever dissatisfied with your subscription, let us when I arrived here. I can’t know. You will receive a full refund on all unmailed issues. First copy of new subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. For permissions requests, please call 212-630-5656 or fax the put it any differently. request to 212-630-5883. For reprints of articles, please contact Scoop ReprintSource at 800-767-3263 or via e-mail at [email protected]. Visit us online at www.wwd.com. To subscribe to other Fairchild Fashion Media magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our ella

d subscriber list available to carefully screened companies that offer products and services that we believe I’d come from the Waldorf. would interest our readers. If you do not want to receive these offers and/or information, please advise us at Sar P.O. Box 15008, North Hollywood, CA 91615-5008 or call 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, PHOTOGRAPHS, AND

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w28a002a;10.indd 1 12/27/11 7:31 PM 12272011193140 JANUARY 25, 2012 \\ NEW YORK CITY

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Sponsored by: 4 WWD WEDNESDAY, DECEMBER 28, 2011 Tribal Beat Mulberry’s calfskin bag. The bolder, the better this spring as accessories designers pile on a medley of Africa-inspired prints, materials and intricacies. — Roxanne Robinson-Escriout

PHOTOS BY THOMAS IANNACCONE

Guess’ leather and satin cord shoe.

MZ Wallace’s nylon and leather bag.

Deepa Gurnani’s beaded and sequined cotton clutch.

Michael Kors’ R&Y Augousti’s antique brass cuffs beaded linen, in alligator (left) and mother-of-pearl painted ayers skin. and black pearl minaudière. WWD WEDNESDAY, DECEMBER 28, 2011 5 WWD.COM

Brian Atwood’s silk satin and straw pump.

Christian Louboutin’s panama fabric and cork wedge.

Kara by Kara Ross’ 14-karat gold-plated metal and white jasper necklace.

Gryson’s leather and linen bag. DEUTSCHMAN

Donna Karan’s leather ALEXANDRA sandal with wooden heel.

Rosena Sammi’s silk thread bangles. ASSISTANT: FASHION 6 WwD WEDNESDAY, DECEMBER 28, 2011 Sears, Kmart to Close Stores {Continued from page one} Management Agency, believes there is still For Sears domestic stores, comps for the Sears’ comp-store sales fell 4.4 percent. a reason for the two nameplates to exist. quarter-to-date dropped 6 percent and for the “Kmart and Sears are the only game in small year-to-date were down 3.3 percent. The de- towns, but [owner Edward] Lampert needs to crease at Sears was attributed to lower con- do some soul searching and surround himself sumer electronics and home appliance sales. with a team that really understands what the Apparel sales at Sears were flat, but were up American public is looking for.” midsingle digits at Lands’ End. Walter Loeb, retail consultant of his own “Given our performance and the difficult firm and former senior retail analyst at Morgan economic environment, especially for big- Stanley & Co., said, “I think this is just the be- ticket items, we intend to implement a series ginning....We have seen for the past five years of actions to reduce ongoing expenses, adjust that what Edward Lampert has been trying to our asset base and accelerate the transforma- do doesn’t work. As Sears rationalizes its busi- tion of our business model. These actions will ness, it will eventually close many more stores. better enable us to focus our investments on They need to develop a new formula and be in-

serving our customers and members through novative in their thinking. There is still a lot of integrated retail — at the store, online and in improvement that can be done.” the home,” said Sears chief executive officer Lampert heads up hedge fund ESL Lou D’Ambrosio. Investments, which in 2003 bailed Kmart The ceo said the store closures are expect- Holdings out of bankruptcy proceedings. ed to generate $140 million to $170 million of Kmart’s roots go back to 1897 when Sebastian S.

cash as the net inventory in the stores is sold. Kresge invested in two five-and-dime stores and It also expects the sale or sublease of the lo- named them S.S. Kresge. In 2005, Lampert or- cations to be shuttered to generate more cash chestrated the $12.3 billion acquisition by Kmart for its balance sheet. Excluding the impact of Sears, Roebuck. The combined entity became of store closures, the company expects to re- Sears Holdings, of which Lampert is chairman. duce peak inventory in 2012 by $300 million Loeb said that while neither the Kmart nor from the 2011 level of $10.2 billion at the end ’’ Sears nameplate is great, Sears probably has of the third quarter. more brand value. He foresees the possibility Including store closures and inventory re- of “closing the Kmart name completely, and duction actions, peak inventory in 2012 is ex- that Sears will eventually sell off Lands’ End.” pected to be reduced by $500 million to $580 started a million, which would reduce peak borrowing catalogue business selling watches, and later needs by $300 million to $350 million in 2012, joined forces with Alvah C. Roebuck. The busi- the company said. Sears also plans to reduce ness became known in 1893 as Sears, Roebuck fixed costs by $100 million to $200 million. & Co., and the first Sears general merchandise Sears said, “While our past practice has catalogue was printed in 1888. Lands’ End, been to keep marginally performing stores y/Corbis which has origins as a sailboat equipment nn open while we worked to improve their per- company, was acquired by Sears, Roebuck in formance, we no longer believe that to be the Fea 2002 for $1.9 billion. appropriate action in this environment. We in- Robert Passikoff, founder and president of tend to accentuate our focus and resources to Najlah brand and customer loyalty research and stra- by our better performing stores with the goal of tegic planning consultancy firm Brand Keys,

converting their customer experience into a photo said, “You only close stores when people are world-class integrated retail experience.” not coming in, so clearly Sears needs to re- The company said it expects to report vamp the stores in terms of brands because fourth quarter and full-year results “on or [Sears needs] to develop a new it isn’t just a matter of location and perceived about Feb. 23, 2012.” values anymore.” Analyst Gary Balter of Credit Suisse said He explained that while for that Sears’ announcement “point[s] to deep- formula and be innovative in their tools, for appliances and Diehard for ening problems at this struggling chain and automotive batteries remain the top brands renew worries about Sears’ survivability.” thinking. There is still a lot of that Sears is known for, many other brands Sears said that it expects fourth-quarter in the stores don’t really hold much cachet. consolidated adjusted earnings before inter- improvement that can be done. Destination brands Lands’ End at Sears and est, taxes, depreciation and amortization will and Jaclyn Smith at Kmart are all be “less than half of last year’s amount.” Last — Walter Loeb, loeb associates inc. available online, which means consumers have year the firm generated $933 million of adjust- less of a need to head to actual brick-and-mor- ed EBITDA in the quarter, with $795 million tar stores to buy what they want. from U.S. operations and $138 million in Canada. level, it will be a stop on the way to liquidation.” According to Brand Keys, both Sears for department Balter, who noted that the EBITDA projection does Shares of Sears plummeted 27.2 percent in over-the- stores and Kmart in the discounter arena rank at the not include pension expenses, said that despite the counter trading Tuesday, down $12.47 to close at $33.38. bottom of their respective categories. measures unveiled to sustain cash flow, “[W]e do not see Not everyone believes that Kmart and Sears are old “They do badly in all areas of the shopping experi- how they dig out of these problems. The shoe to watch is and tired nameplates — provided Lampert can get the ence, from customer service to merchandise to pricing. the supplier shoe, as to date vendors are still shipping.” strategy on track and begin to invest in the retailer rath- Sears cut back on Christmas decorations. That hurt the The analyst lowered the price target of shares of er than simply cut back. consumer shopping experience [during the holidays], Sears stock to $20, but said, “We...believe if we see that Marc Beckman, ceo and founder of Designers which is a big differentiator for retail,” Passikoff said. Retailers Gauge Impact of N. Korea’s’’ Leadership Change May, with the slowing pace accelerating Investment & Securities. Yoon-hee, a saleswoman at the Zadig & By Hye-Seung Seo from August. The sales drop coincides For now, though, it’s relatively busi- Voltaire outlet in Shinsegae Department with a surge in household debt and in- ness as usual among retailers in South Store. “The business was slow the first SEOUL — As the world struggles to ana- creased late debt and interest payments Korea, despite the news of Kim Jong-il’s and second day [after the news], but, lyze the implications of North Korea’s at banks. The country’s household debt is death and his succession by his youngest thankfully, holiday shopping picked up change in leadership, observers also expected to increase by 60 trillion won, son, Kim Jong-un. Shinsegae Department before Christmas Eve,” she added. are concerned over what impact it might or $51.87 billion at current exchange, Store, in a posh neighborhood in south- Another Shinsegae official said afford- have on South Korea, a key market for from last year to top 900 trillion won, or ern Seoul, was crammed with customers able luxury items like Hermès scarves global fashion brands. $778.16 billion, by the end of the year. busy with last-minute holiday shopping and leather products on special vending In the long run, experts said, the uncer- The data suggest South Koreans are late last week. Department stores were corners were already sold out. tainly created by the death of North Korean having a hard time meeting their debt pay- aggressively promoting deals, extending Sales at TV home shopping channels leader Kim Jong-il could further dampen ments, which will likely restrain shopping. sales periods and increasing shopping were also unaffected. While declining to consumer sentiment and spending. Sales of Worse, financial authorities and experts hours in the hopes of persuading con- disclose details, an insider of a major TV the three major department store chains — fear the debt problem that has been so sumers to open their wallets. home shopping channel hinted sales were Lotte, Shinsegae and Hyundai — dropped far restricted to the low-income segment But when Kim’s death was revealed in fact helped by the news of Kim’s death. 1.1 percent in November from a year ear- of the population could spill over to the on Dec. 17, there was no panicked shop- “At times of extraordinary news like Kim’s lier, according to the Ministry of Strategy higher-income bracket, with serious impli- ping to hoard canned food, instant ramen, death, people have TV on all day. But they and Finance. It is their first loss in revenue cations for fashion and luxury brands. and bottled water in fear of a war, as hap- get fatigued by hearing the same news and since a 0.3 percent decline in February 2009 “Consumers are already feeling inse- pened in 1994 when Kim’s father and turn to other channels. They usually stop amid global financial jitters from the Wall cure due to weakened affordability and North Korea’s founder Kim Il-sung died. at home shopping channels and make a Street meltdown. fears of economic slowdown. If instabili- “The department store was practi- call if they see a deal they like,” she said. After hitting a peak of a 24 percent ty in North Korea pans out long, consum- cally empty around noontime soon after She said her company also launched year-on-year surge in January, revenue er sentiment could further deteriorate,” the news [of Kim’s death], but in the af- popular deals that day to take advantage growth has slipped to single digits since said Lee Seung-joon, a researcher at HI ternoon customers returned,” said Kwon of increased TV viewership.

w28a006a;6.indd 6 12/27/11 7:59 PM 12272011200014 WWD WEDNESDAY, DECEMBER 28, 2011 7 WWD.COM China Currency Reform Meets U.S. Satisfaction

By ARTHUR FRIEDMAN

THE U.S. TREASURY DEPARTMENT, in its semian- nual report on international economic and exchange rate policies of America’s major trading partners, said China has made enough progress in reforming its cur- rency that it will not recommend it be declared a cur- rency manipulator. Such an action could have led to punitive actions and heated up an already fragile economic relationship be- tween the world’s two largest economies. However, the Treasury report stated, “While China’s real exchange rate has appreciated, the process of ap- preciation remains incomplete. China’s long-standing pattern of reserve accumulation, the persistence of its current account surplus and the incomplete apprecia- tion of the renminbi, especially given rapid productiv- ity growth in the traded goods sector, indicate that the

XINHUA/LANOV/PHOTOMALL real exchange rate of the renminbi is persistently mis-

BY aligned and remains substantially undervalued. It is in Mexico is looking to gain control over an abundance of Chinese imports. China’s interest to allow the exchange rate to continue PHOTO to appreciate, both against the dollar and against the currencies of its other major trading partners.” Mexico Eyes Antipiracy Deal With China The report noted that the Chinese government has identified shifting away from growth driven by exports toward a greater reliance on domestic consumption as a ness partners. We can’t wait for our government critical goal for sustaining growth in the medium term. By IVAN CASTANO to accuse them of dumping, rely on our customs to At the G20 Leaders Summit in November, G20 members, modernize or our government to chase criminals. We including China, committed to “move more rapidly to- MEXICO CITY — Mexico’s apparel industry associa- must take action ourselves.” ward more market-determined exchange rate systems tion Canaive hopes to sign an antipiracy cooperation Under the cooperation agreement’s third objec- and enhance exchange rate flexibility to reflect underly- agreement with Chinese counterpart China National tive, Canaive will also seek research and development ing economic fundamentals, avoid persistent exchange Textile and Apparel Council early next year, as it strug- partnerships between the two countries’ trade bodies rate misalignments and refrain from competitive deval- gles to tame a flood of subvalued Chinese imports. and manufacturers. uation of currencies.” China also stated that its rebal- It is also seeking similar agreements with five “The Chinese are pioneers in apparel-manufac- ancing actions “will be reinforced by ongoing measures other regional apparel associations, which it intends turing technology,” Cherem noted. “They have de- to promote greater exchange rate flexibility to better re- to sign throughout 2012, Canaive’s president, Marcos veloped the best machinery, technology and product flect underlying economic fundamentals and gradually Cherem, revealed to WWD. development. We want them to teach our companies reduce the pace of accumulation of foreign reserves.” “We hope to meet with them in late January or their know-how. In exchange, we will give them the Since the Chinese authorities decided in June 2010 early February and hopefully sign a cooperation deal chance to invest and forge partnerships and business to allow the exchange rate to appreciate, the renmin- then,” Cherem said. synergies with Mexico’s leading apparel producers bi has appreciated 7.5 percent against the dollar as He could not say at this stage which regional asso- and exporters.” of Dec. 16. Taking into account the higher rate of do- ciations Canaive plans to meet with, as “the schedule According to Canaive and Canaintex, six out of 10 mestic inflation in China than the U.S., the renminbi, is still being set up.” garments sold in Mexico are contraband or fake. Most or yuan, has appreciated against the dollar on a real, In October, Canaive met with Zhang Xinmin, vice come from China or other Southeast Asian countries inflation-adjusted basis of nearly 12 percent since June chairman of the China Chamber of Commerce for under “triangulation” activities that masquerade 2010 and nearly 40 percent since China first initiated Import & Export of Textiles, during the 27th World Chinese merchandise as originating from Malaysia, currency reform in 2005, said the report. Apparel Convention in Puerto Vallarta, Mexico. Soon Indonesia or Vietnam. Treasury did note that it will continue to closely afterward, it also met with the Shandong Government In an interview with WWD last October, both monitor the pace of China’s currency appreciation Council in Mexico City to explore the possibility of lobbies’ representatives expressed optimism that and press for policy changes that yield greater ex- ironing out a cooperation agreement with that prov- Mexican government promises to combat the activ- change rate flexibility, level the playing field and sup- ince, one of China’s largest ity could slash the trade port a pronounced and sustained shift to domestic-de- apparel producers. to the point where only mand-led growth. U.S. textile manufacturers and some Cherem said the meet- every three out of 10 gar- politicians have said China undervalues its currency, ings provided a launching ments were illegal. But leading to unfairly priced exports. pad for a greater collabo- $728M Canaive’s general man- ration deal with CNTAC ager, Claudia Ramos, con- and the other regional tex- CHINESE APPAREL EXPORTS FOR YEAR TO MEXICO. ceded those targets are tile and apparel lobbies. now less realistic, unless Carrefour Set to Reduce Striking a cooperation the administration fulfills deal with the Chinese has its earlier promises, some- become Mexican clothiers’ last resort against China’s thing that is highly uncertain in the short term. Supermarket Properties rising exports of undervalued and counterfeit appar- On Dec. 9, customs association Caaarem and tax el, the bulk of which reach Mexico “well below” their regulating agency SAT said that a new merchan- manufacturing and shipment cost, Canaive claimed. dise inspection system had been installed in all of By JENNIFER WEIL “It’s clear that the government does not want to Mexico’s customs ports. The new system of “pre-vali- help us resolve this issue,” Cherem said, conceding dation” will use industry feedback on the true cost of PARIS — Beleaguered retailer Carrefour SA said Canaive and compatriot textiles chamber Canaintex hundreds of textile raw materials to flag undervalued Tuesday that it will dispose of a real estate portfolio in- have failed to persuade the government to toughen garments. It will also have a greater ability to detect cluding 97 supermarket properties in France owned by customs and step up raids against the organized crime where cargoes originate from, helping stamp out tri- Carrefour Property and operated by Carrefour Market to rings that bring in the underpriced merchandise. “We angulation activities. investment vehicles run by La Française AM. have realized that the only way to address this issue is However, Ramos said the initiative is “just the The deal is worth 365 million euros, or $477.3 mil- by cooperating directly with the Chinese.” beginning” of what needs to be a much stronger war lion at current exchange. When it meets with CNTAC and the other prov- against the illicit garment trade. “With this transaction, Carrefour optimizes the use of its inces, Canaive hopes to sign a three-pronged col- “If the government gets really serious on the pre- capital employed, which will be reinvested, notably into real laboration deal. The first goal will seek to develop a validation system, this [the three out of 10 target] may estate development projects,” the company stated, adding trade information exchange between the Chinese and be achieved, but so far, we don’t have any clarity on how that the disposal value reflects a capitalization rate of about Mexican associations to stamp out the arrival of sub- much this effort will actually be enforced,” he said. 6.5 percent, including transfer duties. valued clothing into Mexico. The situation is likely to become even fuzzier next Looking ahead, Carrefour — the world’s second-larg- “The CNTAC has the ability to trace most gar- year as Mexico holds general elections that are ex- est retailer behind Wal-Mart Stores Inc. — is to continue ments [and their producers] shipped to Mexico. By pected to see the end of President Felipe Calderón’s operating those Carrefour Market supermarkets with 12- giving this information to our customs officials, we reign, which Canaive criticized for failing to thwart year initial leases and multiple renewal options. can trace the illegal exporters and importers in both organized crime’s stronghold on many industries. By the end of 2010, La Française AM managed assets countries,” Cherem said, adding that for every illegal As imports continued to spiral out of control, worth 35 billion euros, or $46.48 billion at average ex- Chinese exporter, there is a Mexican importer. China accounted for the bulk of this year’s 20 percent change for that year. Of that, 5.8 billion euros, or $7.7 bil- The second initiative will be to promote Chinese jump to $728 million in apparel imports, Canaive said, lion, was in real estate. investment and co-investment in Mexico’s apparel adding that some 300 apparel producers shut down, The news about the supermarket properties comes and textiles industry. leaving some 3,000 people unemployed. On the bright- just days after Carrefour, in mid-December, said it “The Chinese are interested in benefiting from our er side, exports rose 8 percent to $4.2 billion, while would exercise its put option on its stake in Altis Group, free-trade deal with the U.S. [NAFTA], so if we show domestic clothing sales jumped 11.3 percent. a company franchisee in southwest France. Carrefour them how they can invest and coinvest in our produc- However, Cherem expects Chinese imports to rise even also revealed at that time its intention to buy French tion chain to access the U.S. market without paying du- more next year, bringing further losses to the industry. operator Guyenne et Gascogne. ties, they are going to be interested,” Cherem added. The first quarter already looks “very disappoint- Over the past three years, Carrefour has struggled to He continued: “Rather than fighting the Chinese, ing, and in fact terrifying,” he said, adding that 15,000 turn around its ailing hypermarket business in France what we have to become is their trading and busi- jobs could go in the first half of 2012. and posted a string of profit warnings. 8 WWD WEDNESDAY, DECEMBER 28, 2011 denim

The Brea store’s exterior evokes the pub for which it was named. with menus detailing the store’s con- tents and tempered glass windows to give it an older feel, but no manne- quins dressed in the latest duds behind them. Inside, salvaged wood is used IANNACCONE for the flooring, and the cash wrap has the feel of a worn bar. To foster a sense of discovery for shoppers, behind the THOMAS cash wrap there are small so-called li- BY brary rooms with shelves full of men’s PHOTOS and women’s denim. Kellwood worked Consumers hit the stores at the last minute. with brand strategy consultancy Graj + Gustavsen and architectural service provider Menemsha on the store. Winston highlighted Lamb & Flag’s Traffic Counts Up attempts to tweak merchandising norms. The denim is presented on hangers or, less conventionally, is rolled. Jeans are At Apparel, Beauty displayed on two vintage dry-cleaning racks as well. Clothes are often mixed Specialty Stores with books on tables. Inside the dress- ing rooms, which have morning, daytime and evening light settings, a video plays By ARNOLD J. KARR of a woman who cheekily acknowledges the customer while she herself tries on APPAREL AND BEAUTY specialty Lamb & Flag outfits. “The whole idea stores were the two biggest beneficia- Lamb & Flag Combines of this brand is to be disruptive and to ries of consumers’ shift to stores from come up with new ways of doing things,” their computers and smartphones in said Winston. the week leading up to Christmas. When Lamb & Flag is a mature con- According to The NPD Group’s House, Outside Brands cept, it could grow to 700 to 800 doors, Shopping Activity Weekly Holiday with as many as 500 to 600 of these Trends Report, beauty specialty abroad, but its future will depend on stores saw a 30.6 percent increase The store’s merchandise is around 60 the success of its initial three Southern in shopping visits during the week By RACHEL BROWN percent women’s and 40 percent men’s. California stores at the Brea Mall, The ended Dec. 26, the highest of all gen- Winston estimates tops and outerwear Shops at Mission Viejo in Mission Viejo eral merchandise channels monitored AS KELLWOOD CO. resets its strategic will account for roughly 60 percent of and Los Cerritos Center in Cerritos. by the Port Washington, N.Y.-based re- priorities for the post-Michael Kramer Lamb & Flag’s sales, and bottoms 40 per- After Brea — which was chosen to get search firm. Apparel specialty stores era, its new mall-based, denim-heavy cent. There are six denim fits for men the first store because it attracts a broad were second with a 26.2 percent in- specialty store concept Lamb & Flag and eight for women in the Lamb & Flag cross-section of shoppers with its wide- crease. Bookstores, footwear specialty will be a crucial test of whether the ap- brand. Winston singled stores and department stores round- parel firm can successfully develop a out the slim fit as likely Jeans are hung and rolled. ed out the top five with visit increas- retail chain in-house. being the top pick for es of 22 percent, 21 percent and 19 Lamb & Flag launched earlier this men, and the skinny being percent, respectively. month with a store at the Brea Mall the top pick for women. While the overall brick-and-mortar in Brea, Calif. Kramer green-lit the Other key Lamb & Flag conversion rate fell to 67.9 percent concept about 18 months ago, long be- pieces are graphic Ts at last week from its second highest fore he left his chief executive officer $28 and military jackets mark of the season, 68.1 percent, dur- post at Kellwood to become chief op- at $78. There are minor ing the week ended Dec. 19, the larg- erating officer at J.C. Penney Co. Inc. floor set updates every est increases in conversion rates were Sun Capital Partners-owned Kellwood two weeks, and store mer- seen by bookstores and sporting goods has developed stores for its apparel chandise is largely re- stores, both of which had a 16 percent brands such as Vince and Rebecca freshed monthly. rise in conversion, which is the per- Taylor, but the 3,100-square-foot Lamb The Lamb & Flag centage of those buying out of all those & Flag location marks the company’s team was also convinced engaged in shopping visits. Beauty spe- entrance into the retail business with- a group of 18- to 25-year- cialty stores saw the fifth highest con- out an existing brand. olds were unenthusiastic version increase from the prior week, “Creating a [retail] brand from the about and even alien- 7 percent, reaching 69 percent, while bottom up is new for Kellwood, and we ated from the choices at apparel specialty store conversion cut our teeth on it with this,” said Gary traditional malls. Lamb rose 1.7 points, to 45.8 percent. Winston, vice president of Lamb & Flag, & Flag’s brand tagline, Marshal Cohen, NPD’s chief in- who emphasized the retailer has con- “beautiful rebellion,” dustry analyst, called the stability of tinued to receive Kellwood’s support speaks to this group’s the week-on-week conversion rate “a even with Kramer gone. “Kellwood and nonconformist side. The good sign that holiday held its own Sun Capital are behind this 100 percent. laid-back, rocker aes- this year. With so much of the season They believe in the concept,” he said. thetic of Lamb & Flag is being front-loaded with ‘self-gifting,’ Winston honed his merchandising encapsulated in a brand it would have been easy for the con- skills at Pacific Sunwear of California video that plays on a sumer to be tapped out and forgo Inc. and Abercrombie & Fitch Co. prior to wall seen just as custom- some important gift shopping for becoming Kellwood’s first hire last year ers walk into the store, those on their list.” dedicated to Lamb & Flag. Since then, with a male and female NPD reported that 69 percent of U.S. he has built the Lamb & Flag team to model filmed in Malibu consumers visited stores last week, up

nine people, notably Kiernan Lambeth, and Santa Monica riding KEENAN from 68 percent in the prior week. the design director of bottoms and ac- motorcycles, frolicking in As expected, the online share of cessories whose background includes the hills and lounging on buying visits declined significantly STEFANIE

stretches at Seven For All Mankind and the beach fully clothed. BY in the week leading up to and includ- Quiksilver, and Hethe Breuer, design “No one has broken ing the holiday as retailers passed director of tops and outerwear, who has through in the mall space the cutoff dates for guaranteed and, PHOTOS held design positions at American Eagle since Hollister, and we in many cases, free delivery. The on- Outfitters and Ralph Lauren. feel the customer is longing for some- ranging anchors Nordstrom, J.C. Penney, line portion of visits slumped to 13.9 The team detected an opportunity for thing different,” said Winston. “It’s been Sears and Macy’s — the next two open- percent from 16.4 percent in the prior a retailer priced in between cheap fast- such a stale environment, and Kellwood ings are scheduled for February. No week and 17.4 percent in the week fashion emporiums like Forever 21 and has the appetite to step out and build a firm number of store openings is set for ended Dec. 12. Free Shipping Day oc- contemporary designer resources like concept when no one else has.” He went next year beyond February, although 20 curred on Dec. 16. American Rag. Lamb & Flag’s denim on to describe Lamb & Flag’s customer to 30 additional units could bow in 2013. For apparel specialty stores, the runs from $58 to $78 and its T-shirts as “not the college football player. It’s not “The plan is to get these stores online share of buying visits slid to are $28 to $48. The house brand con- the cheerleader. It’s the musician, the open and see the sales to determine 16.4 percent from 25.6 percent in the stitutes 60 percent of Lamb & Flag’s artist, the entrepreneur.” how quickly we roll out the rest of the prior week. merchandise, while the other 40 per- Surrounded by Pottery Barn, Janie stores,” said Winston. He declined to Cohen said that retailers had a cent is made up of 11 third-party men’s and Jack, Kors Michael Kors, Cotton forecast sales for Lamb & Flag, but did “nice Christmas, with a full load of apparel brands and nine third-party On, Sunglass Hut and Williams-Sonoma suggest Hollister is an apt comparison. shoppers, buyers and online visitors,” women’s apparel brands to start. Among at the Brea Mall, Lamb & Flag’s dark In fiscal year 2010, Abercrombie & Fitch but may be confronted with consum- the third-party brands, which sell jeans storefront stands out. Named for a pub Co.-owned Hollister generated $384 in ers pulling back in the holiday’s af- from $60 to $198, are WeSC, RVCA, in Oxford, England, Lamb & Flag’s store sales per square foot. With similar pro- termath as many are “ ‘bought out’ or Nudie, Kill City, Insight, A.P.C., Comune, design is inspired by classic pubs. The ductivity, the Brea store would generate even ‘tapped out’ after the first week Cheap Monday, Lucca and Blank. exterior could be on a street in Oxford, sales of about $1.2 million a year. in January.” rodeo royalty: Catching up with Fred Hayman, Mr. Rodeo Drive. Page 11 photoW b y donato sardell a w D STYLE

Wright Turn Fresh from her role as Daniel Craig’s editor-lover in David Fincher’s much-discussed “Girl With a Dragon Tattoo,” Robin Wright gets in front of the camera again for Peter Lindbergh to shoot Gerard Darel’s first international advertising campaign in 40 years. For more, see page 10.

Nicole Kidman by media observers as much smaller Whalen season internationally. than expected, comes as the Times And just like the Oscars, the new

Memo pad Co. faces even more scrutiny from its omody version will be split into two parts. The S newspaper guild for freezing pension winners of AACTA’s technical awards OUT OF THE REGIONS: On Tuesday, The benefits for foreign employees overseas will be revealed at a lunch at Sydney’s

New York Times Co. sold its regional and for potentially planning to freeze Kristen Westin Hotel on Jan. 15. Simultaneously newspaper business to Halifax Media those benefits for other employees at by — as facilitated by a live satellite hookup Holdings, a Daytona Beach, Fla.-based the Times. An open letter to Sulzberger, between the two venues and the 13 hour Photo investment firm, for $143 million in addressing these concerns, was posted time difference between the two cities cash. Last week, the Times Co. revealed on Dec. 23 at saveourtimes.com. As of — the nominees for AACTA’s inaugural it was in advanced discussions with Tuesday evening, 301 employees had International Awards for Best Film, Halifax Media to sell all 16 of its signed the guild letter. Acting, Direction and Screenplay will regional newspapers, including the Following the sale of the regional be revealed at the G’Day USA Black Sarasota Herald-Tribune of Florida and group, the Times Co. will own its Tie Gala in Los Angeles on Jan. 14. A Tuscaloosa News of Alabama. namesake newspaper, The Boston Globe, posse of Australian stars is expected to Halifax will notify employees within Boston.com, the International Herald attend the L.A. party, which famously the next 48 hours about whether they Tribune, the Worcester Telegram & first introduced Nicole Kidman to future will have a job with the company. Gazette and the About Group. It continues husband Keith Urban back in 2005. Then, The Times stated the money from to have a 7 percent stake in the Fenway on Jan. 31, the main AACTA Awards will the sale would be used for general Sports Group, owner of the Boston Red take place at the Sydney Opera House. corporate purposes. “The sale of our Sox, after selling more than half its share With high-profile Australians such as Regional Media Group will enable The earlier this year. — AMY WICKS AACTA’s founding president Geoffrey New York Times Company to continue Rush, Sam Neill, Hugo Weaving and Frances our transformation to a digitally AUSSIE POWER: Australia’s red carpet rechristened the Australian Academy O’Connor competing against Charlotte focused, multiplatform media company,” ante is about to be upped when the of Cinema and Television Arts Awards, Rampling, Emily Watson and Willem Dafoe in said chairman Arthur Sulzberger Jr. The premier film and television awards after the creation of the brand-new the acting categories for their roles in regional group, which accounted for Down Under are renamed, relocated Australian Academy. Beginning in 2012, local productions “The Hunter,” “The only 11 percent of the Times Co.’s and moved to a new time slot next the awards are migrating to Sydney Eye of the Storm” and “Oranges and overall business, reported a 6.7 percent month. Originally launched in 1958 from their longtime Melbourne home Sunshine,” the event already has more of revenue decline for the third quarter. as the Australian Film Institute and being held a month later than usual an international flavor than ever before. The $143 million price tag, criticized (AFI) Awards, the event was recently so as to better sync with the awards — PATTY HUNTINGTON

w28a009a;13.indd 1 12/27/11 7:43 PM 12272011194412 10 WwD WEDNESDAY, DECEMBER 28, 2011

Peter Lindbergh and Robin Wright eye

Face

sardella

For more

Images, see donato WWD.com/eye. by Time ’’ photo

the product and more about Robin. There are very “This ad campaign doesn’t represent a revolution, as By Marcy Medina few brands that respect women and want to give them we are known for telling colorful, cinematic stories in clothes to make them look good at every age, and that our ads,” said Romestain, who came onboard in June LOS ANGELES — It’s a typically sunny winter day in concept is so exportable.” after serving as managing director of the French division Los Angeles, where actress Robin Wright tilts her head Said Wright, 45, “I normally wouldn’t do this sort of of Fast Retailing Co., where she oversaw the rapid over- back and closes her eyes to get into character while a thing, but I really feel like the brand is about individ- seas expansion of French contemporary brand Comptoir small camera crew hovers nearby. uality. It’s not like, ‘Here, wear this blazer and be this des Cotonniers. “But in order to retail outside of France But today’s job is not a movie helmed by a Hollywood person.’ I wouldn’t be a good model for any designer’s we need to give people a clear message of who we are.” director. Peter Lindbergh is shooting French retailer idea of what fashion is. This is about letting your own At Darel, a company with annual sales of 200 million Gerard Darel’s spring-summer print campaign as ad- personality come through.” euros, or $260.7 million at current exchange, Romestain vertising guru David Lipman stands watch. While she portrays a woman vacationing on the plans to increase business by 15 percent each year for The team of Wright, Lindbergh and Lipman is a tight French Riviera, Wright is not necessarily acting. “I the next five years, mostly by way of international ex- one; the agency has conceptualized five Darel cam- have always loved France. After I graduated [from high pansion in the U.S., U.K., Spain and China. paigns since Wright signed on in 2010; Lindbergh has The brand is currently sold through 300 directly op- been shooting the ads since 1993. erated stores and 1,200 multibrand retailers in more “I hadn’t met Peter until I started working with than 40 countries, including Bloomingdale’s. But high Darel, but we absolutely fell in love with each other. Emotion is the direction on Romestain’s list for 2012 are retail stores in New I could work with him all day, every day,” said Wright. York and Los Angeles. Lindbergh is working intensely to shoot the five set-ups ads are going. And it’s Romestain believes a French actress, or even a before the light fades, and has banished all but key crew French set (the ads have also been shot in Malibu, from the poolside set, but it only takes Wright minutes to time we pushed those Calif.), isn’t the key to getting Darel’s message across, summon the expressions and poses he’s looking for. but rather a woman like Wright — mother, actress and The set, at Chateau Marmont, has been designed to activist — whose attitude and lifestyle enhance the al- resemble Saint-Tropez, with buckets of peonies, red boundaries again. lure of the company’s offerings. Past models shot by and white striped backdrops and a vintage Porsche Lindbergh for Darel have included American actress convertible. Lindbergh also directed a short film for the — DAvid lipman Mamie Gummer, Charlotte Gainsbourg, Stephanie brand co-written and voiced by Wright about her own Seymour, Brooke Shields and Nastassja Kinski. connection with France. school] I got on a plane to Paris the next day and stayed Throughout her five wardrobe changes, ranging from “There’s such a high level of trust between them, for years,” said Wright, who modeled in Europe before a long aqua silk dress to a crisp white basque top and which means Robin gives so much during the shoots,” becoming an actress. Today she’s one of the busiest sleek pants paired with an orange Simple Bag, the com- added Lipman between takes. women in Hollywood, currently garnering positive re- pany’s “It” accessory, Wright’s porcelain face conveys So while there’s an obvious comfort level on the shoot, views as Daniel Craig’s editor-lover in “The Girl With the bliss of a woman on holiday. the stakes have never been higher. Under new president the Dragon Tattoo,” which she called “a dream project.” “Emotion is the direction ads are going,” Lipman Marianne Romestain, the 40-year-old company is poised She’s also heading to Australia next month to shoot noted, “and it’s time we pushed those boundaries again.” to expand its retail reach outside of France, and has “The Grandmothers” with Naomi Watts, based on a Other firsts for the agency include the James Franco- charged Lipman with branding it on an international Doris Lessing short story about two childhood friends, written, directed and photographed ads and films level. The ads will break in March magazines including both grandmothers, who fall for each other’s sons. “I for Seven For All Mankind and Hickey Freeman’s British Elle, Harper’s Bazaar, Vogue and Spanish Vogue. know that sounds strange, but when you read the script, Francesco Carrozzini-directed docu-film featuring NHL “Marianne is pushing us further to connect with it makes perfect sense,” said Wright. “I’m always look- player Sean Avery. Lipman described his firm’s latest Robin emotionally,” Lipman added. “It’s less about ing for different projects because I get bored’’ easily.” creative efforts as “realism with a heartbeat.”

w28a010c;13.indd 10 12/27/11 6:25 PM 12272011182616 WwD WEDNESDAY, DECEMBER 28, 2011 11 WWD.COM Fred Hayman Recounts eye Fred Hayman Wild Ride on Rodeo Drive Grants’ store, which would become By Rachel Brown Giorgio Beverly Hills, before assuming sole ownership for an additional $6,500. BEVERLY HILLS — At the height of Giorgio Beverly In 1967, Hayman was gone from Hills, in 1981, when the Rodeo Drive store rang up $6 the Beverly Hilton and had ended an million in sales a year, Fred and Gale Hayman spent unceremonious run as a restaurateur. six months and $260,000 to turn a parking lot into an He turned his attentions to repairing unparalleled party hosted by Merv Griffin under a big Giorgio, although he thought it would top flown in from Oregon that had nearly everything, be a short-lived occupation. “It was not including catering from five premier Los Angeles good. It was just like any other store. restaurants, cheerleaders and a marching band, for the They had mostly sweaters and things like launch of the store’s signature scent — which would that. They were not buyers in any sense soon go on to hit $100 million in sales. whatsoever,” says Hayman of the Grants. The scent was heady and so was Rodeo Drive in Hayman and his wife at the those days, driven onto the world’s stage by Hayman’s time, Gale, would ultimately throw marketing wizardry, as is documented in Rose themselves into transforming Giorgio. Apodaca’s book, “Fred Hayman — The Extraordinary “Gale was a very good buyer, so I felt Difference: The Story of Rodeo Drive, Hollywood there was a great future in it,” he Glamour and the Showman Who Sold It All,” which recalls. “Then we started buying the begins by recounting the famous fragrance fete. little stores that were on Rodeo Drive, Coupled with being honored with the Rodeo Drive maybe five of them, and we became

Walk of Style award last May, which he helped to a business in a true sense. I will say create, Hayman has received much appreciation this for Gale that she was a great teacher, year, sometimes uncomfortably for the man referred to because I’m a hotel man and a beverage as the Godfather of Rodeo Drive, or Mr. Rodeo Drive. man, and I started appreciating what “That’s bulls--t,” Hayman, 86, says of the titles, sitting she did, and I saw a big future.” in his office on Canon Drive in Beverly Hills, which Giorgio would nurture designers

pays tribute to Giorgio Beverly Hills with a replica of such as Zandra Rhodes, Halston, the storefront on the exterior of its ground floor. “If it Thea Porter, Kenneth Jay Lane and wasn’t done by me, it would have been done by I don’t Judith Leiber. And it would do so know who. It’s not what I would ever say.” With a large with the showmanship Hayman dose of tongue-in-cheek self-deprecation, he adds, “It is had cultivated from his hospitality certainly lovely to be so old and successful.” career, transporting customers in Certainly, Hayman wasn’t entirely alone in shaping’’ a Rolls-Royce and serving them Rodeo Drive’s rise. He had contemporaries with Rodeo cocktails and cappuccinos. A pool Drive stores who played roles, notably Herb Fink of table and fireplace added to the Theodore; Jerry Magnin, the department store progeny clubby ambience. Celebrities came responsible for Ralph Lauren and a namesake store for the merchandise and to play pool on the street; the late Richard Carroll of Carroll & Co.; or grab a drink, which undoubtedly David Orgell of the eponymous jewelry and gifts store encouraged spending.

bought by the Soltani family in 1989 after Orgell’s death “Natalie Wood was a very big Keenan in 1987 and moved around two years ago to the Two customer and a lovely woman,” says Rodeo complex, and two who passed away earlier this Hayman, whose celebrity client Stefanie

year: Guy Greengard of Mr. Guy and Bijan Pakzad of list at Giorgio also boasted Barbra by Bijan, the sole vestige of independent ownership from Streisand, Ali MacGraw, Zsa Zsa

Rodeo Drive’s formative years still at its original address. Gabor, Diana Ross and Lucille Ball. Photo “Those were the main thoroughbreds that drove “Sinatra was there a lot because we Rodeo Drive to new heights, which then other had a big bar, eventually with two bartenders. Sinatra and his charm in getting people to do what is really designers followed — Prada, Dolce & Gabbana, Chanel, liked the environment, and he liked to play pool, and great for the big picture,” says Apodaca. “Over the Louis Vuitton, Fendi and he liked the women as well.” years, Fred encountered this in the Seventies and Cartier,” says Daryoush “Dar” The celebrities didn’t cloud Eighties, people maybe thought, ‘What is in it for Mahboubi, Pakzad’s partner Hayman’s vision for Rodeo Fred?’ Really, what he tried to convey to all of them and a Rodeo Drive developer. We [Hayman and Drive beyond Giorgio. He saw was, ‘What’s in it for me is in it for all of you.’ ” “Rodeo Drive wasn’t what it it as one of the great retail Giorgio’s most visible achievement outside of the is now, but truly the credit wife Gale] started thoroughfares — and he wanted store walls was its perfume. Selected by Gale, the strong of starting the Rodeo Drive his fellow merchants to join him scent, evocative of the early Eighties and marketed movement should go to buying the little in beautifying and promoting it. with the pioneering concept of scent strips, would the original designers and “I don’t think anyone realized enter department stores in 1982 and cause a sensation, merchants.” what we had here — except Fred,” climbing from $5 million in first-year sales to $20 million Hospitality, not retail, was stores that were on Magnin is quoted as saying in the next year and $100 million the year after. “It’s Hayman’s early calling. Building Apodaca’s book. To bring Magnin certainly not my thing, fragrances,” says Hayman. “I left his hospitality résumé, Hayman Rodeo Drive, maybe and others on board with his it all to Gale, who was really very great developing the came to California in 1954 to vision, Hayman conjured up the fragrance. I was better at packaging the fragrance and erect the banquet and catering five of them, and we Rodeo Drive Committee, which probably better in marketing it, but it was her fragrance.” operations at the Beverly Hilton brought the independent owners of The Haymans joined forces publicly at the party upon transferring from a prime Rodeo Drive stores together. for their breakthrough fragrance, but the couple were post at the Waldorf-Astoria. became a business “The great thing about the Rodeo headed their separate ways. Under strain from his His first impression of Beverly Drive Committee in those days is divorce, Hayman sold Giorgio Inc. to Avon Products Hills was not flattering. “It in a true sense. that you had owners of businesses, Inc. for $165 million in 1987. Proctor & Gamble was really a hokey city when I so they could make decisions in a acquired it from Avon in 1994. Giorgio Beverly Hills arrived here. I can’t put it any — FRED HAYMAN room and not have to go back to the would continue to operate on Rodeo Drive under differently,” he says. “I’d come corporations,” says John Carroll, Hayman’s control. It was later rebranded Fred Hayman from the Waldorf. I’d come from New York.” who took over Carroll & Co., which has relocated from Beverly Hills and traded its characteristic yellow-and- But Hayman relished the opportunity to develop the Rodeo Drive to North Canon Drive, from his father, white-striped shopping bags for solid yellow ones, until Beverly Hilton’s banquet and catering department, which Richard. “Rodeo Drive was their own flagship” — and Hayman leased out the space to Louis Vuitton in 1998. under his watch became the second largest in the Hilton they knew what was going on in their stores and on the Today, Hayman remains saddened by the chain following the Waldorf. Apodaca’s book details that, street. Hayman, for instance, was at Giorgio, “from early disappearance of Giorgio Beverly Hills on Rodeo flush with cash from the department’s growth, Hayman morning, before the store opened, until closing. I closed Drive. “There’s a great deal of emotion, absolutely gave friends Barbara and Richard Grant $12,000 to keep up every day,” he says. there is. You put your heart and soul into it. It becomes their apparel store afloat. He received a 30 percent stake “They are all very enterprising entrepreneurs on more important than anything you do, really,” he says, in return. Later, he poured another $12,000 into the Rodeo, but I think Fred stands apart in his leadership adding, “It was an all-time great store.”

suede, patent leather and napa, some 14 pairs of shoes originally designed ’’ with hand-painted effects, start at 380 for the actress by the late Salvatore Fashion Scoops euros, or $496. — WWD STAFF Ferragamo. The styles were bought at a Christie’s auction in 1999 and will be SHOE OFF: Gaspard Yurkievich is the latest sequins, silk, wool, feathers and pearls, MORE OF MARILYN: Salvatore Ferragamo on display with a number of Monroe’s designer advocating European savoir and sporting python print leather soles, will hold an exhibition dedicated to costumes and artworks dedicated to the faire with the launch of a new Italy- retail at around 1,200 euros, or $1,565 Marilyn Monroe at the brand’s museum iconic film star. The exhibit succeeds produced footwear line for spring. Six at current exchange rates. Prices for in Florence, which will run from June to one last year centered on another movie elaborate styles embroidered with a range of nonembroidered styles in January. The Ferragamo museum owns legend, Greta Garbo. — WWD STAFF

w28a011a;8.indd 11 12/27/11 8:05 PM 12272011200617 12 WWD WEDNESDAY, DECEMBER 28, 2011 Bangkok Luxury Retail Market ExpandsWWD.COM

Calling the tax “quite restrictive,” Pitchon By JOYCE BARRETT wouldn’t predict whether the government will respond to the luxury retailers. BANGKOK — More than 3 million square With some 19 million visitors a year feet of new retail space is opening in — 4.5 million of whom are from the nine Bangkok in the next two years, as the ASEAN countries — Bangkok is well luxury brand market expands in the city placed to position itself as a retail desti- center and community malls serving the nation. The Thai capital is the third most mid-market sprout in the suburbs. popular destination in the world for inter- “It’s a retail revolution,” said James national travelers, behind London, which Pitchon, executive director of CB Richard ranks first, and second-place Paris, accord- Ellis Research & Consulting in Bangkok. ing to a May 2011 report by MasterCard “Twenty years ago, Bangkok retailing was Worldwide. The report shows that Bangkok just department stores and shop houses. ranks fourth in the world for visitor spend- It’s evolving in multiple directions. We’re ing at an annual $14.4 billion. It follows seeing the death of the shop house.” London, which tops the list at $25.6 billion, Much of downtown Bangkok’s retail New York City at $20.3 billion and Paris at construction borders the Skytrain, which $14.6 billion. Other cities in the top 10 are zips shoppers in air-conditioned com- Frankfurt, Sydney, Los Angeles, Madrid, fort through the city center above the Singapore and Hong Kong. clogged streets. Ragged, moldy buildings Hotel occupancy rates in downtown along the public transportation route at Bangkok were 57 percent in the second Sukhumvit Road are being torn down quarter of 2011, according to a study by CB and replaced by luxury hotels attached Richard Ellis Consulting. There are more to high-rise shopping centers. than 30,000 hotel rooms downtown, with One of the biggest projects is going up 10,000 more expected to open by 2014. The six-floor, 600-shop Terminal 21 mall. next to Central Chitlom, the flagship de- “There is growing interest in Thai- partment store of Central Retail Corp., the land,” Pitchon said. Uniqlo’s first Bangkok outlet. largest retailer in Thailand. A $326 million, Luxury retailers first consider eight-story shopping center, and a 30-floor, Singapore and Hong Kong, he said, but six-star Park Hyatt Hotel are being built are increasingly considering Bangkok as on 35 acres the retailer bought from the its market becomes more sophisticated. British Embassy. The complex will include Bangkok’s high-end market is also 753,000 square feet of retail space, and 30 growing as younger Thais want to live percent of that is expected to feature local downtown. According to a 2011 report by designers from Thailand’s emerging de- CB Richard Ellis, there are 307,000 apart- sign segment. Central Chitlom next door is ments and condominiums downtown, and under renovation and will connect to the this prosperous young generation is look- new complex via a sky bridge. ing for places to shop. A Dean & Deluca The center, expected to open in 2013, gourmet food store is opening on the is designed to appeal to the Asian mar- ground floor of a 34-floor office and five-star ket and not just Thailand, said managing hotel building at the busy intersection of director Chart Chirathivat. It’s part of a Witthayu and Sukhumvit. The intersection concerted effort by Thai retailers to com- is blocks from the American Embassy and pete against the upscale shopping dis- is surrounded by luxury apartment build- tricts in Singapore and Hong Kong. ings. The Japanese retailer Uniqlo just “Thai retailers want to attract more opened its first Bangkok outlet at nearby tourists and shoppers from Asia, those CentralWorld, at 30,000 square feet its big- people who would visit Hong Kong and gest in Southeast Asia. It plans to have 100 Singapore,” said Suttatip Peerasub, a re- Uniqlo outlets in Thailand by 2020. Farther tail analyst at Kim Eng Securities. “Their out of the city, on Bang Na-trat Road, Ikea target is high-end Thai people and high- just opened the first of three planned end tourists. We still haven’t reached ca- Bangkok outlets. Opening during the flood- pacity for high-end shopping.” ing, the retailer donated its $660,000 pro- One of the biggest drawbacks to the ex- motional budget to relief efforts. pansion of Bangkok’s luxury shopping is Central Retailing and its sister com- a 30 percent tax on luxury imports. In the pany Central Pattana are planning to midst of the worst flooding the country has spend about $3 billion in the next year on experienced in decades, retailers have ap- new projects, many of which will be com- pealed to the government to repeal the levy. munity malls in rural Thailand. Those BARRETT JOYCE BY PHOTOS

projects include a one-million-square- Terminal 21, which cost $186 million, foot mall in Surathani, a southern prov- has 377,000 square feet of retail space, ince in Thailand; renovations at a center and management expects about 50,000 in Udon Thani, in Thailand’s northeast; visitors daily. Terminal 21 executive two new malls in Chiang Mai; rebuilding director Prasert Sriuranpong said 80 per- CentralWorld, the downtown mall that cent of the center’s shoppers will be Thai was burned by antigovernment protesters people, but the airport theme is likely to in May 2010, and a one-million-square-foot attract tourists, as well. The mall focuses mall in Phitsanulok, in northern Thailand. on fashion, food and movie theaters. Also, the one-million-square-foot shop- “For fashion, our concept is mix and ping center CentralPlaza Grand Rama 9 match, and our shoppers will go to the is set to open next month in Bangkok, and big and small shops we have,” he said. a renovated Central Department Store at Another 10 blocks down Sukhumvit Lat Phrao just reopened after a $30 mil- Road, construction of a 500,000-square- lion renovation. foot shopping center across from the Farther down Sukhumvit Road, at the upscale Emporium Mall has begun. The busy intersection of the Skytrain and center, also slated to be a luxury shop- Bangkok’s underground metro, is the ping center, is to open by 2015. new mall Terminal 21. Targeted at the MBK Plc, which operates MBK shop- 100,000 commuters who pass through ping center, a variety mall in Bangkok’s the intersection daily, the six-floor mall retail district targeting budget shoppers, has 600 shops. Each floor of the mall, de- also is expanding and plans to spend about signed to resemble an airport, represents $13 million in the next two years on new an international city. Paris is on the mez- retailing, office and hotel developments, An Oscar statue zanine, and upper floors resemble travel said vice president Sakchai Suthipipat. in Terminal 21. landmarks in London, San Francisco, “There is still room to grow in Tokyo, Istanbul and Hollywood. Bangkok,” Suthipipat said.