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page 4. Issue,” first yearoncounter. For more, see page 6. of more than $150 million globally in about 30,000 doors in its sources estimated the new addition could generate retail sales the scent is the third in a series of The One fragrances. Industry in October. Inspired by the Italian design duo’s favorite flower, launch Aug. 30 at Saks Fifth Avenue, followed by a wider launch to their fragrance franchise: Rose The One, set for an initial Domenico Dolce and Stefano Gabbana are adding a new flower s Growing Garden Injecting Better Service Injecting Better Pumping Up Beauty Side, Reade’s NewFace:Duane EYE: Du By MollyPrior coat, stood alongside a sleek white display coat, stoodalongsideasleekwhitedisplay stopped oneshopperinhertracks. “Would you like a complimentary facial?” suggestion byaDuaneReadeemployee, held bydepartmentstores. aimtoeatintothemarketshare drugstores trendas it totheforefrontofanindustry and more prestige beauty brands, thrusting aggressive overhaulfeaturinganupscaleface turnaround, the retailer is rolling out an national chains and aiming for a profits wars. squarely intothedrugstore scrappy hometown chain, has stepped The beauty adviser, outfitted in a white lab thecheerful On arecentafternoon, againstencroaching Protecting itsturf

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2 WWD, FRIDAY, AUGUST 21, 2009 WWD.COM Gap Reports Profit Virtually Unchanged By David Moin marketing investments to gain market share.” • Fifty more Old Navy stores will be remod- At Gap Inc., the glass seems half filled. eled in the next two months, after four test re- Continued cost cutting and expense controls models were launched earlier this year. WwDfridayBeauty offset weak sales, enabling Gap to report virtually • Gap’s Piperlime Web site will introduce ap- GENERAL flat net earnings for the second quarter ended Aug. parel with contemporary styles at the beginning Duane Reade, Manhattan’s scrappy hometown 1 and looking relatively good considering most re- of September. 1 chain, has stepped squarely into the drugstore tailers are reporting losses or declining profits. • The company will work on strengthening wars. The specialty chain reported net profits of its pricing message, particularly at Old Navy With cost cutting and expense controls offsetting $228 million, or 33 cents a diluted share, com- and the outlets, and would, as Murphy said, “err 2 weak sales, Gap Inc. said second-quarter net pared with $229 million, or 32 cents a diluted to make sure the value part of all our brands is earnings were essentially flat at $228 million. share, for the second quarter last year. clear and comes through to the customer.” Second-quarter net sales were $3.25 billion, • The Gap brand could resume television Domenico Dolce and Stefano Gabbana turned to down 7.1 percent from $3.5 billion for the second advertising in the fourth quarter. The strat- 6 their favorite flower, the rose, to base their latest quarter of last year. Comparable-store sales fell egy will be considered in the coming weeks, scent, Rose the One, which is set to bloom. 8 percent, compared with a decrease of 10 per- Murphy said. 7 Donna Karan’s Cashmere Mist fragrance is cent for the second quarter of 2008. Online sales In addition, Murphy said Gap will celebrate celebrating its 15th birthday with a new ad increased 17 percent to $224 million, compared its 40th anniversary today by dressing up the campaign and a luxurious new interpretation. with $191 million. New York Stock Exchange in 1969 Premium Salvatore Ferragamo Parfums is getting into the “We’re proud to deliver second-quarter earn- Jeans, a new collection launched last week and s 7 ings per share above last year, especially during named in honor of Gap’s debut year. Gap officials home fragrance business with a line called the a challenging environment,” said Glenn Murphy, will remotely ring the exchange’s closing bell Tuscan Soul Lifestyle Home Collection. chairman and chief executive officer. “Our focus today from Gap headquarters in San Francisco. 9 Yves Rocher, a pioneer of the botanicals movement, is to find the right balance between maintaining By division, Gap North America was down is opening franchise units in Canada and dipping our cost discipline and making appropriate, tar- 10 percent to $878 million in sales; Banana its toe back into the U.S. market at Sears. geted investments to gain back market share.” Republic North America was down 15 percent to Murphy later stressed in a conference call $516 million; Old Navy North America was down 13 Italy’s Stefanel agreed to sell Munich-based that the retailer’s balance sheet is healthy but 4 percent to $1.24 billion, and the International specialty chain Hallhuber to private equity firm that building traffic and comparable-store sales, division was off 5 percent to $361 million. Change Capital Partners as it looks to reorganize. and communicating its pricing message, particu- The company expects operating expenses in 14 Sears Holdings Corp. cut expenses and closed larly at Old Navy and the outlets, are priorities. the third quarter to be flat to up about $20 mil- stores in the second quarter, but weakness in The company ended the quarter with $2.1 lion compared with the third quarter of last apparel contributed to a $94 million loss. billion in cash and cash equivalents, an 11.6 year, primarily due to an increase in marketing percent operating margin compared to 10.7 per- expense of about $25 million. EYE cent in the year-ago quarter and with a 150 basis Gap Inc. ended the second quarter with At the premiere of R.J. Cutler’s documentary point increase in gross margins. Operating ex- 3,145 store locations, and net square footage de- 4 penses in the quarter were down about $50 mil- creased 0.3 percent from the end of fiscal year “The September Issue,” Anna Wintour said her lion compared with the second quarter last year, 2008. Year to date, the company has opened 23 process today doesn’t differ much from 2007. and since the beginning of fiscal year 2007, oper- store locations and closed 27. Gap Inc. continues Classified Advertisements...... 15 ating expenses are down about $650 million. to expect that it will open about 50 stores and To e-mail reporters and editors at WWD, the address is Officials also disclosed: close about 100 stores this year, bringing square [email protected], using the individual’s name. • Gap Inc. is now making “targeted selected footage down about 2 percent. WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2009 FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. VOLUME 198, NO. 39. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one additional issue in January, May, October, November and December, two additional issues in March, April, June and August, 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 provided by Condé Nast Publications: S. I. Newhouse, Jr., Chairman; Charles H. Townsend, President/CEO; John W. Bellando, Executive Vice Penney’s Units Victimized by Burglars President/COO; Jill Bright, Executive Vice President/Human Resources. Periodicals postage paid at New York, NY, and at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services By Holly Haber The Penney’s unit in Covington was robbed Tax Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian addresses to: P.O. Box 503, RPO early Sunday and the surveillance video shows 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 Five J.C. Penney stores in three states two men carrying 2-by-4 wooden planks and ISSUE INQUIRIES: Please write to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or have been robbed of jewelry and other merchan- black garbage bags for the loot. The same sce- visit www.subnow.com/wd. Please give both new and old addresses as 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 dise worth millions since June by brazen burglars nario played out at a Penney’s in Lafayette, 125 address within one year. If during your subscription term or up to one year after the magazine becomes undeliverable, who broke in through the roofs. miles away, on Wednesday. you are ever dissatisfied with your subscription, let us know. You will receive a full refund on all unmailed issues. First copy The most recent heists this week were filmed “Obviously, they had some previous knowl- 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 and reprint requests, by surveillance cameras that showed a pair of edge of the establishment,” said Lt. Craig please call 212-630-4274 or fax requests to 212-630-4280. Visit us online at www.wwd.com. To subscribe to other masked, glove-wearing thieves. Police said they Stansbury, a spokesman for the Lafayette Parish Fairchild magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our subscriber list available descended into two stores in Covington and Sheriff ’s office. “They were pretty precise and to carefully screened companies that offer products and services that we believe would interest our readers. If you do not want to receive these offers and/or information, please advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or Lafayette, La., via ropes, evoking images of a knew exactly what they were after.” call 800-289-0273. WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR THE RETURN OR LOSS OF, OR FOR DAMAGE OR ANY Hollywood thriller. Robbers hit a Penney’s store Large-scale retail theft is on the rise, said OTHER INJURY TO, UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, in Indianapolis in June and units in the Houston Joseph LaRocca, senior adviser for asset protec- PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS suburbs of Pasadena and Rosenberg in July. tion at the National Retail Federation. SPECIFICALLY REQUESTED TO DO SO BY WOMEN’S WEAR DAILY IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER The losses at the off-mall stores — primar- “Organized retail crime gangs are figuring out MATERIALS SUBMITTED MUST BE ACCOMPANIED BY A SELF-ADDRESSED STAMPED ENVELOPE. ily gold and diamond jewelry, denim and other new ways and paths of least resistance to get in items — are “into the millions,” Penney’s spokes- and get merchandise and ultimately liquidate it Results such as these are man Tim Lyons said Thursday. on the secondary market,” LaRocca said. “Rooftop DAILY Authorities are trying to determine if all five burglaries are a tactic being used by these groups. extraordinary“ at any time, but robberies are linked. There have been no ar- By cutting though the roof or glass skylights or even QUote especially in contrast to this rests. The Plano, Tex.-based retail chain is of- a glass panel, those aren’t necessarily alarmed the fering a $10,000 reward for information leading same way that utility doors and hatches might be economic panorama. to the arrest and conviction of the burglars. and someone can come in virtually undetected.” “Unfortunately, it is part of the trend that is An NRF survey in April found that 92 percent of — Aéropostale chairman and ceo Julian Geiger” on the retailer’s going on in the industry with organized retail retailers had been the victim of organized theft in 83 percent rise in second-quarter profits. Page 3. crime,” Lyons said. “The loss has been substan- the previous 12 months compared with 85 percent tial in each case. In some of the cases they spent in April 2008, he noted. And 73 percent said the CORRECTION a considerable amount of time in the store.” problem was increasing versus 66 percent in 2008. The Hello Kitty retrospective “Three Apples” will run at the Royal/T gallery in Culver City, Calif., from Oct. 23 through Nov. 15. The exhibition will not travel to a New York gallery. These details were incorrect in a story on page 16, Thursday due to Escada’s Sälzer, Lackas Divest Stakes in Firm misinformation from the company. By Melissa Drier could say I pushed, as a shareholder, in a par- ticular direction,” Sälzer told WWD. “And if a TODAY ON BERLIN — Escada AG’s chief executive officer Bruno possible investor wants my business model, it’s Sälzer and chief operating officer Werner Lackas best not to be a shareholder.” have sold their stakes in the German fashion house. In addition, from the bondholder side, “it According to the company, Sälzer and his wife was always a problem that they thought I was sold about 286,000 shares for 229,000 euros, or very close to the Herz brothers [Wolfgang and about $326,000 at current exchange. When Sälzer Michael, who are major shareholders]. Now I WWD assumed the top post at Escada in July 2008, he have one hat on, and I’m interested to keep it .com and his wife reportedly paid about 3 million on,” the ceo said. euros, or $4.7 million at that time, for the shares, Despite reports of interested parties, it is much • More images from the New York which equal a stake of about 1 percent. Lackas too early for any kind of talks, an Escada spokes- premiere of “The September Issue” sold 100,960 shares. man emphasized. One week after filing for insol- • Beauty Roundup: August 21, 2009 The executives sold their shares to avoid any vency, the administrator is concentrating on stabi- • Online this weekend: Week in conflict of interest as shareholders in future lizing the business and gaining an overview of the Anne SlaterSlater atat talks with potential investors. “If a solution is company’s situation. The next step, the spokes- “The SeptemberSeptember Review and Story of the Week reached in the next couple of weeks, someone man said, is talks with potential investors. Issue”Issue” premiere.premiere. • Global breaking news WWD, FRIDAY, AUGUST 21, 2009 3 WWD.COM Buckle, Aéropostale Lead Specialty Earnings Pack By Alexandra Steigrad Teen retailing’s two top performers Thursday continued to outpace their specialty store competitors with double-digit increases in second- quarter sales and profits. In reporting stellar quarterly results, The Buckle Inc. and Aéropostale Inc. pulled well ahead of the pack — and marginally above analysts’ consensus expec- tations — at a time when, confronted by weak mall traffic and indifferent consumers, most youth-focused chains would be content to simply tread water. If there are questions about the two specialty re- tailers among investors, they stem from their ability to sustain such strong performances. Aéropostale’s shares rose 0.6 percent to $35.88 be- fore its results were released and were up another 0.3 percent in after-hours trading. However, follow- ing its morning release, Buckle’s shares dropped 3.9 percent to $26.84 despite a 12.2 percent increase in second-quarter net income, accompanied by a 13.6 percent gain in revenues and an 8.6 percent climb in comparable-store sales. The Buckle saw income rise 12.2 percent in the second quarter, while Aéropostale recorded an 83.3 percent jump. “There’s always the question: how long can this go on?” said Marie Driscoll, an equity analyst at Standard & Poor’s. Buckle’s numbers came without the heavy expense- quarter profit from a year-ago loss, but projected a third- Investors appear worried that Buckle may be unable cutting practiced by many other retailers. In the quar- quarter loss far worse than analysts expected. to sustain its remarkable comp performance — high- ter, selling, general and administrative expenses in- The Anaheim, Calif.-based firm forecast a third- lighted by a 20.6 percent gain last year. The Kearney, creased 19.5 percent to $44.2 million from $37 million quarter loss of 16 cents to 23 cents a share, versus Neb.-based firm’s comps have been slipping since May, a year earlier. analysts’ initial estimates of a 9 cent loss. The pro- when the company reported a 13.4 percent jump, fol- The company has opened 15 stores this year and ex- jection assumes comp declines in the high teens to lowed by a 9.4 rise in June and a 2.8 percent increase in pects to open another five units. low 20s. July. In the third quarter, it’s up against a 23.7 percent Reporting after the market closed, Aéropostale post- During the second quarter, PacSun’s net loss came comp increase, a number achieved despite the near ed an 83.3 percent jump in quarterly profits to $38.6 mil- to $14.2 million, or 22 cents a share, 1 cent better than meltdown in the credit markets that stopped consumer lion, or 57 cents a share, versus $21.1 million, or 31 cents analysts estimated. In last year’s quarter, net income spending in its tracks in mid-September. a share, in the year-ago quarter. Net sales increased 20.7 amounted to $2.8 million, or 6 cents a share. Despite the challenge of sustaining its recent suc- percent to $861 million from $713.5 million, as quarterly Net sales declined 22.4 percent, to $242.8 million from cesses, Driscoll said Buckle, which operates 401 stores comps grew 12 percent. Analysts expected earnings per $312.7 million, and fell 24 percent on a comp basis. in 41 states, has the potential to grow to 500 to 600 share of 56 cents on sales of $451.9 million. Based on the “Clearly, we have a lot of work to do to stem our de- stores. “There are a lot of other regions where they can quarterly results, the company projected third-quarter cline in sales and ultimately return to profitability,” said go,” she said. EPS between 76 cents and 78 cents, in line with Wall Gary Schoenfeld, the former ceo of Vans Inc., who suc- For the quarter ended Aug. 1, Buckle posted net in- Street’s expectations. ceeded Sally Frame Kasaks in that capacity at PacSun come of $25 million, or 54 cents a diluted share, 2 cents in June. better than analysts expected, compared with profits While the slowdown in consumer spending pushed of $22.3 million, or 48 cents, in the year-ago period. We’re just very product driven. Zumiez Inc. into the red in the second quarter, its tumble Revenue rose to $196.9 million from $169.8 million in wasn’t as deep as Wall Street anticipated. the 2008 quarter, including a 39 percent jump in direct “We don’t decide on a price point The Everett, Wash.-based teen retailer posted a sales to $10.1 million. loss of $3.1 million, or 10 cents a diluted share, in Men’s, down to 40 percent of sales from 46.5 per- or any specifics when we go the three months against net income of $2.7 million, cent a year ago, declined about 2 percent as Buckle or 9 cents a share, in last year’s quarter. Excluding a faced the anniversary of last year’s strong Ed Hardy into shopping the market or charge of 3 cents a share related to a legal settlement, launch. Women’s sales rose 27.5 percent and now ac- the firm’s loss was 7 cents a share, 6 cents better than count for 60 percent of net sales, up from 53.5 percent developing product.­ analysts expected. a year ago. Net sales in the three months fell 7.7 percent to $85.2 The critical denim category accounted for 35.5 per- — Dennis Nelson,” The Buckle Inc. million from $92.3 million a year ago. Selling, general cent of sales, up from 35 percent in last year’s quarter. and administrative expenses increased 14 percent to Buckle, which lauds itself as a “denim destination,” in- “Our business has never been stronger,” said $29.9 million. creased its average denim price point in the men’s divi- Aéropostale chairman and ceo Julian Geiger on the “Operationally, we have cut costs that make sense, sion by 10.4 percent to $87.60 and 10.9 percent to $89.30 company call. Crediting the chain’s mix of value and but we are continuing to invest where we believe we’ll in the women’s division. fashion, he added: “Results such as these are extraor- have the highest returns and most opportunity for fu- Dennis Nelson, president and chief executive officer, dinary at any time, but especially in contrast to this eco- ture profitable growth,” said ceo Rick Brooks. said the addition of some higher-priced brands, such as nomic panorama.” Looking ahead, the company said it expects EPS be- Big Star, retailing from $120 to $150, had given it a de- The company said its early reads on back-to-school tween 5 cents and 7 cents in the third quarter. Analysts gree of pricing elasticity. were very strong, even in the West, hit hard by high un- had been expecting EPS of 7 cents, on average. It pro- “We’re just very product driven,” Nelson said dur- employment and a difficult housing market. jected a comp decline in the mid- to low-teen range in ing the company conference call. “We don’t decide on “It pretty much boils down to having the right fashion the current period. a price point or any specifics when we go into shopping at the right time,” said president and chief merchandis- Both PacSun and Zumiez reported results after the the market or developing product.” ing officer Mindy Meads, who added the retailer sees close of the markets. PacSun’s shares rose 5.3 percent Nelson stressed the firm gears product and prices an opportunity to raise its prices, while still remaining to $3.99 during the day, but fell as much as 9.8 percent to individual markets. “It’s not necessarily an all-store lower priced than its competition. in after-hours trading. Zumiez’s stock declined 1.8 basis at those price points,” he said, adding, “Our guest Buckle and Aéropostale’s results stood in sharp con- percent to $12.28 during the day and was off less than is looking for newness and willing to pay if they see the trast to other teen-oriented retailers reporting results. 1 percent in the early stages of after-hours trading. fit and value for that garment.” Pacific Sunwear of California Inc. not only swung to a second- — With contributions from Matthew Lynch

Nonetheless, the July decline showed Swiss export data for July. a modest recovery from June, when total Although all price segments declined Swiss Watch Exports Slide 25.9% exports fell 31.9 percent, the steepest de- in July, watches costing between 200 and cline since the beginning of the year. 500 Swiss francs, or $186 to $466, held up Swatch Group Ltd., the world’s largest best, with a decline of 7 percent. watchmaker by sales, last week raised More expensive ranges fell by more hopes for the watchmaking sector as it than 20 percent, while watches costing reported better-than-expected first-half more than 3,000 Swiss francs, or $2,797, Swatch watch designed by Ted Scapa. earnings and forecast a pick up in de- recorded a steeper fall than the others, mand in the second half, as retailers start falling more than 30 percent. reordering amid an improving economy. Gold watches suffered the biggest de- By Elena Berton $6.8 billion, reflecting wilting demand for The company — whose brands range cline in value terms, while the perfor- expensive timepieces amid the economic from brightly colored, inexpensive Swatch mance of steel and bimetal timepieces PARIS — Exports of Swiss watches continue crisis. Dollar figures are converted at av- watches to handmade Breguet timepieces was average, the federation said. to fall, declining 25.9 percent in July to 1.2 erage exchange rates for the periods to — was able to perform well in difficult Exports to Hong Kong were sharply billion Swiss francs, or $1.12 billion, com- which they refer. markets thanks to its diversified portfolio. lower, down 31.7 percent, while the decline pared with the previous year, according to The Swiss watch industry has been in Swatch Group Ltd.’s business model is was even more sustained in the U.S., drop- the Federation of the Swiss Watch Industry. decline since the end of 2008, after five also less dependent on premium brands, ping 39.2 percent, as has been the case Since January, watch exports have years of strong growth, with exports cur- which have suffered the most in the cur- in previous months. The main European fallen 26.3 percent to 7.3 billion francs, or rently below 2006 levels. rent downturn, as highlighted in the markets continued to hold up better. 4 WWD, FRIDAY, AUGUST 21, 2009 WWD.COM

Karlie Kloss in a ▲ Anna Wintour in Prada. Fashion’s Night Out T-shirt over a Jason Wu dress. Under the Cover WHEN VOGUE WAS PRODUCING ITS SEPTEMBER issue in 2007, ads were up 100 pages from 2006, Neiman Marcus’ Burt Tansky lamented that he didn’t have enough inventory and nearly $50,000 worth of work was thrown out when Anna Wintour trimmed an elaborate fashion story. That was a very different time in publishing and retail. But at Wednesday’s premiere of R.J. Cutler’s documentary “The September Issue,” Wintour insisted a fi lm chronicling her process these days wouldn’t be much different. “It’s still the same team putting it together,” she said as she hurried into the screening at MoMA. Not everyone on that team was enthusiastic about going in front of the camera. “My fi rst desire is to make sure that the shoot is good,” said Grace Coddington, whose occasional defi ance of Wintour and sense of humor make her one of the most compelling players in the fi lm. “I thought it was going to get in the way.” “She frowned at us like you would look at dog s--t,” confi rmed sound recordist Edward O’Connor of Coddington’s initial reaction to him and the crew. The designers in the crowd — including Carolina Herrera, Oscar de la Renta, Donna Karan, Marc Jacobs, Thakoon Panichgul, Vera Wang, Zac Posen, Tory Burch, Jason Wu, Kate Mulleavy, Georgina Chapman and Rachel Roy — could relate to the pressure Coddington and the rest of the staff were under. “I only have two major deadlines a year and these guys have 12,” said Cynthia Rowley. “I think that’s pretty admirable.” Many of the young actresses present were just starting their education in fashion editorial. “For me, the world of magazines has been a complete mystery until this year,” said Carey Mulligan, who stuck close to pal Zoe Kazan all evening. “I Carey Mulligan in see it much more as an art form now.” Thakoon with Zoe Even S.I. Newhouse Jr. learned a little something about his own business. “I realized Kazan in Jason Wu. that it’s a very complicated production to put out the September issue,” he said. Jack McCollough, But it couldn’t have been easy for Chanel Iman and Hilary Rhoda to sit in the Terry Richardson and audience while on-screen they were unceremoniously cut from a fashion story. And Lazaro Hernandez. what about cover girl Sienna Miller, whose photograph Wintour scrutinizes, down to her teeth and fi llings? “I think it’s an organic, natural part of what happens,” Miller said afterward, appearing to have taken the critique in stride. She then joined others who stuck around for a postshow Champagne, including André Leon Talley, Diddy, actor Jonny Lee Miller (who appears on Broadway this fall with

Sienna Miller), models including Karlie Kloss and Raquel Zimmermann, and late Vogue STEVE EICHNER OTHERS BY editor Diana Vreeland’s grandson, Nicholas Vreeland, a Buddhist monk.

Thakoon Panichgul OF PHASE 4 FILMS; ALL COURTESY STILL

For more photos, see WWD.com. CENTENO; “DEAD MEN” TALAYA PHOTO BY Grace Nicholas Carolina Herrera and Sienna Miller Coddington Vreeland Oscar de la Renta in Thakoon. STURGESS

bombs were made. “It’s easy to have the image of balaclava Jim Sturgess and the gunmen and not go further than that. That was certainly my interpretation of the IRA as a young kid growing SPY GAMES up in the Eighties.” ON A MUGGY MORNING IN THE MIDDLE OF AN AUGUST HEAT WAVE, Sturgess even stuck with a Belfast accent (he studied with a British actor Jim Sturgess cuts a cool cat fi gure across a Times Square offi ce. coach) for the duration of the shoot, refusing to drop it between His pewter gray suit is skinny and appropriately rumpled; his brown lace-ups takes or when phoning home to his mother. are artfully scuffed, and his close-cropped hair is mussed just so. He’s one “She hated it! She was like, ‘Speak properly! I can’t cigarette and a whiskey away from headlining the hippest indie band in town. understand what you’re saying,’” he laughs. But Sturgess’ drink of choice is English Breakfast tea (the “closest thing It was an approach that impressed his veteran co-star. to home”) and his manner is good-natured when discussing his latest fi lm, “I did not know Jim’s real voice until months after the fi lm,” “Fifty Dead Men Walking,” opening today . says Kingsley, who calls him “immensely thorough. Totally Based on the memoir of the same name written by Martin McGartland, the dedicated to serving the character and the narrative.” movie follows a young Irish hustler who is recruited by the British Metropolitan Though he has been passionate about performing for years, Police’s Special Branch to infi ltrate and spy on the Irish Republican Army. from childhood plays to studying acting, screenwriting and editing Against the backdrop of an extremely violent 1988 Belfast, Martin (Sturgess) at university in Manchester, Sturgess’ laid-back, unassuming must navigate the emotional and physical challenges of saving lives, while mien can disguise his drive. betraying his close-knit community. Sir Ben Kingsley is Fergus, Martin’s handler. “It’s not that I didn’t have any ambition,” says Sturgess, 28, “I was constantly swinging from feeling like a hero to feeling like a also an avid musician who once considered a singing career. “I rat,” says Sturgess of the experience (the real life McGartland’s cover was just didn’t believe that I could be in proper fi lms.” compromised and he remains in hiding). He has proved otherwise. Ever since his breakout as the The London native had a deep lead in Julie Taymor’s 2007 “Across the Universe,” Sturgess commitment to his role. Along with Kevin has worn the mantle of “hot young actor.” He appeared in “21” Zegers (who plays Martin’s IRA buddy), opposite Kevin Spacey and has just fi nished shooting Peter Sturgess settled in Belfast a month ahead Weir’s “The Way Back,” with Colin Farrell and Ed Harris, his of fi lming and fully immersed himself in the most diffi cult project to date. local community. The two actors went to “It’s about these prisoners who escape a labor camp in Siberia and walk on foot from Siberia to house parties, joined a boxing gym and met India,” he says. “There wasn’t a day when I wasn’t either freezing cold or walking through the Gobi with former IRA and Special Branch agents. Desert sweating like I’d never experienced before.” “It was to put a face and personality Needless to say, Sturgess has been enjoying his current domestic break, setting up his new to these terrorists, to actually spend time apartment in Camden, north London with girlfriend Mickey O’Brien, keyboardist for “It” synth-pop with them. It just upset and confused group La Roux. Sturgess with Ben Kingsley in me more than anything,” says Sturgess, “I’ve never enjoyed painting a radiator so much in my entire life,” he says. “Fifty Dead Men Walking.” who saw an interrogation room and how — Vanessa Lawrence 40 years ago today...

Doris and Don Fisher opened the first Gap store. They made it easy to buy a pair of jeans — and revolutionized how Americans shopped for clothes. Since then, we have invented and reinvented clean, classic, American design. The best is yet to come. 6 WWD, friday, august 21, 2009 The Beauty Report Dolce and Gabbana: Coming Up Roses By Stephanie Epiro “This is the segment that attracts most fragrance users globally, and could therefore potentially outpace MILAN — Domenico Dolce and Stefano Gabbana turned the existing The One versions,” he added. to their favorite flower, the rose, to base their latest Both the designers and the fragrance licensees scent, Rose The One. agree Rose The One will enjoy more success than The Rose The One is the last installment in the trilogy of One in Asian markets. scents under The One fragrance brand, which includes Feola declined to elaborate on the ad budget fig- The One and Eau The One, an eau de toilette version ure for the scent but said Rose The One’s television of the original fragrance. commercial would be shown in Dolce & Gabbana’s fra- “For Domenico and myself, roses have always been grances biggest markets. our favorite flowers, our gardens are full of roses in every color and type,” said Gabbana. He and Dolce spoke with WWD in an exclusive interview just before This fragrance has a perfume taking a summer vacation at their villa on the Sicilian “ island of Stromboli. that Dolce & Gabbana has never “This fragrance has a perfume that Dolce & Gabbana has never done before. We’ve never done something so done before. We’ve never done explicitly linked to one flower before,” said Dolce. Rose The One will launch at the end of August and something so explicitly linked to is projected by industry sources to generate as much as $150 million in retail sales in its first year. one flower before.­ Dolce described Rose The One as “a moment that’s ”— Domenico Dolce more delicate, a moment that’s more romantic, per- sonal and about love.” “We are planning a considerable budget for the “It’s about femininity,” added Gabbana. “It’s a mo- launch of Rose The One because it is a new proposal that ment [for women] that is intimate when you are in your Domenico we believe has a very strong appeal to attract new con- bedroom and you put on a perfume before you meet Dolce and sumers to the world of Dolce & Gabbana fragrances, and your boyfriend or husband.” Stefano a very strong right to win in the market,” Feola said. Like Dolce & Gabbana’s fragrances’ other eye-catch- Gabbana Rose The One’s U.S. launch will be spearheaded by ing television ads, Rose The One’s campaign is a striking an exclusive preview at Saks Fifth Avenue from Aug. 30, 30-second spot, starring actress Scarlett Johansson, who and will rollout to other department stores from Oct. 1. also fronted the duo’s recently launched makeup line. than a leitmotif of Scarlett Johansson, an American Worldwide, Rose The One’s distribution will reach “It’s a declaration of love for Scarlett,” explained actress who represents the fragrance of two Italian de- 30,000 doors by 2010. Dolce about choosing Johansson for the Rose The signers, combined with Morricone’s music, which gives The scent, a collaboration between the designers, One’s campaign. “If we could do everything with it a Mediterranean finish,” said Gabbana. Procter & Gamble’s fragrance team and fragrance Scarlett we would, because she is the person that rep- Fragrance licensee partners Procter & Gamble house Givaudan, features top notes of pink grapefruit, resents actual femininity most in this world.” Prestige Products said Rose The One could outdo The mandarin and cassis; Bulgarian rose at the heart com- Filmed in a Los Angeles studio, the commercial One’s success. bined with peony, lily and lychee and at the base notes depicts Johansson in a custom-made, curve-hugging “If you look at all of the elements of Rose The One of vanilla, musk and amber. Dolce & Gabbana rose pink tulle dress, lounging on a the concept, the design, to their vision of a femininely Designed by Dolce and Gabbana, the original The bed in a boudoir, eating strawberries and recounting seductive Scarlett fronting the campaign, it is clear One’s packaging was adapted with a more feminine a story about a past love. Playing in the background that Rose The One has a lot of potential to win in the look for Rose The One. A gleaming rose gold-colored is a dramatic score written by Italian composer Ennio market,” said Luigi Feola, global general manager, stopper caps the weighty rectangular clear glass bottle, Morricone. Fashion photographer Jean Baptiste Procter & Gamble Prestige Products. On July 1, Feola and the juice is tinted rose pink. Mondino directed the TV campaign and is also behind had succeeded Marcus Strobel in the post, who moved Rose The One will be available as an eau de parfum the print advertising shots for the scent. on to global vice president in P&G’s Braun division. in three sizes: 30-ml. for $48, 50 ml. for $70 and 75 ml “For us, Ennio Morricone is a symbol of Italy, the em- Also boosting Rose The One’s potential, according for $90, body lotion 200-ml. for $45, shower gel 200 ml. blem of Italian cinematography music. What is better to Feola, is its floral olfactive category. for $36 and a 26 gram shimmer body powder for $50. Lalique to Launch Women’s Scent L’Oréal Wins Round 1 in Nude Suit PARIS — Three years after the launch The launch is scheduled to start LONDON — Nude Brands lost the first skirmish in its legal war of words with Stella of Encre Noire, Lalique Parfums will in Europe and the Middle East in McCartney and L’Oréal Thursday. introduce a feminine iteration, Encre September. U.S. retailers are expected London’s High Court rejected the natural skin care firm’s bid for an interim in- Noire Pour Elle, starting in September. to sell Encre Noire Pour Elle beginning junction to block the launch this weekend of the designer’s StellaNude fragrance. “It’s a product that works very well,” in the spring. Nude is at loggerheads with Stella McCartney Ltd. plus McCartney’s license hold- said Dominique Daviaud, Lalique In France, the 50-ml. eau de parfum er L’Oréal and its YSL Beauté division as it claims their use of the word “nude” in Parfums’ managing director, of the spray will go for 69 euros, or $98.20 at the scent’s name infringes on its trademark. men’s scent. He added Encre Noire current exchange, and the 100-ml. eau de “The balance of injustice in this case requires me to refuse the injunction,” has been popular among women, so parfum spray is to be sold for 89 euros, stated the judge in his judgment. “It seems to me that, in this particular case, the Lalique decided to create the or $126.70. The 200-ml. body cream likely damage to [Stella McCartney Ltd.] and L’Oréal if an injunction is wrong- female version. will be 38 euros, or $54.10. ly granted outweighs the damage to [Nude Brands Ltd.] if it is refused. Whilst Fragrance Resources’ Ninety-nine limited edition [Nude] may ultimately prevail at the trial, it seems to me that an injunction and Christine Nagel blended its crystal bottles containing 60 damages at that stage, though far from perfect remedies, are more likely to be juice, which is a riff on Encre ml. of perfume extract that’s able to restore them to their rightful position than an award of damages under Noire’s woody fragrance a woodier take on Encre the cross undertaking to [Stella McCartney Ltd.]. composition. Her Noire Pour Elle are to “The effect of an injunction wrongly granted against [Stella McCartney Ltd.] challenge, explained sell for 650 euros, or would be to cause a massive disruption to their business, and probably cause Julie Carry, head of $925.30, each. them to abandon use of the brand altogether. Against this I regard the likelihood Lalique Parfums’ As is its annual of actual confusion between the products in the marketplace in the form in which product development, tradition, Lalique is they are currently presented as minimal.” was to create a femi- introducing limited In his judgment, the judge said StellaNude products, with a wholesale value nine vetiver scent. edition fragrances of 4.8 million euros, or $6.8 million at current exchange, have been manufactured Encre Noire Pour in crystal bottles for for worldwide distribution and 26,000 units have already been shipped to retail- Elle contains top notes 2010. For the wom- ers, including Boots and The Perfume Shop. of Sicilian bergamot, en’s scent Lalique de In a statement issued Thursday, Nude Brands said it considers the scent’s grains of Indonesian Lalique, 1,500 flacons launch to be a clear infringement of its trademark. amber and freesia. were produced. The “When asked for permission to use the trademark ‘nude’ for a Stella McCartney In the heart are notes design takes a cue from a perfume, Nude — though great admirers of Stella McCartney — respectfully re- of Turkish rose, os- Encre Noire fountain with a fish motif cre- fused, as a Nude scent is forthcoming,” the company stated, adding Thursday’s rul- manthus and kepha- Pour Elle ated by René Lalique. Containing ing noted Nude has a clearly arguable claim of trademark infringement. “The judge lis, while base notes 100 ml. of perfume extract, each sells also rejected L’Oréal’s arguments that Nude’s trademark in relation to perfume was include Haitian vetiver, Texan cedar for 980 euros, or $1,395. For the men’s obviously invalid saying he was not convinced ‘nude’ was descriptive of perfume.” and musks. fragrance Lalique Lion Pour Homme, Nude, which was founded by entrepreneur Bryan Meehan and Ali Hewson, Company executives would not dis- the house designed a flacon capped with said the case will be heard next year. Hewson is also founder of the eco-luxury cuss sales projections, but industry a scorpion motif. Five hundred bottles line Edun, and the wife of U2’s Bono. sources estimate the scent will gener- containing 30 ml. of the eau de parfum YSL Beauté and Stella McCartney Ltd. stated they were pleased with the ate $17 million in sales during its first go for 960 euros, or $1,366.50, each. court’s decision and that the launch of StellaNude will proceed as planned. 12 months worldwide. — Jennifer Weil — Brid Costello WWD, friday, august 21, 2009 7

The Beauty Report WWD.COM Cashmere Mist Celebrates 15th Birthday By Julie Naughton a body lotion. Then we started getting letters asking us to turn the ancillaries into a fragrance. So 10 years ago, we did just that.” The fragrance which began life as the scent of Donna Karan’s A fragrance — called Pure Cashmere Eau de Parfum — was launched at the first bath line has proven to be one of her most enduring beauty legacies. brand’s 10-year mark, and in 2007, Karan was inducted into the Fragrance Cashmere Mist — which was broken out as a separate scent in September 1994, Foundation’s Hall of Fame. after the bath line featuring the fragrance reportedly racked up sales of $8 million For the 15th anniversary, Cashmere Mist Luxe Edition Eau de Parfum will serve as at retail in 1993 in fewer than 200 doors — is celebrating its 15th birthday with a the brand’s birthday present. Trudi Loren, vice president of corporate fragrance de- new ad campaign and a luxurious new interpretation of the classic juice. velopment worldwide for Estée Lauder, worked with Evelyn Lauder, senior corporate So, what makes the scent — a mix of Moroccan jas- vice president, and IFF’s Jean-Marc Chaillan to create mine, lily of the valley, bergamot, sandalwood and musk the most luxurious version possible of the original. produced by International Flavors & Fragrances — “Luxe takes select raw materials and replaces them continue to thrive? “In this crazy world, it isn’t always with the highest-end possible versions of them,” said about what’s new and now — it’s about what endures,” Loren, adding that Luxe will be a permanent addition to said Veronique Gabai-Pinsky, global brand president of the line. For instance, two jasmine absolutes and orange Aramis Designer Fragrances (which holds Karan’s scent flower absolute were worked into the scent, which dries license), BeautyBank and IdeaBank, Lauder’s entrepre- down with modern blond wood notes, as well as touches neurial think tank. “For a designer to have a fragrance of moss, golden amber, heliotrope and labdanum. which has endured for 15 years — it is a real accomplish- “This is Cashmere Mist with more texture,” added ment. Why has it endured? It was born of passion, and it Loren. Two sizes will be offered, a 1 oz. for $48 and a has followed its own rules — and it worked.” 1.7 oz. for $70. It will be on counter in September. Karan and her late husband, Stephan Weiss, launched New advertising, breaking now in fashion, beauty Cashmere Mist themselves under their Donna Karan and lifestyle magazines, features a misty-skinned Milla Beauty Co. arm. In October 1997, Karan and Weiss signed Jovovich wrapped in cashmere. It was shot by Mikael a licensing deal with the Estée Lauder Cos. Inc., which Jansson — who also shot the brand’s first campaign. The new ad. continues to produce Karan’s fragrance portfolio in its “Milla is a mother, a singer, an actress — she’s mul- Aramis and Designer Fragrances division. At the time tifaceted and modern, like Donna,” said Diane Kim, that deal was signed, John Idol, then Karan’s chief executive officer, said that the senior vice president of global marketing for Donna Karan Cosmetics. Donna Karan Beauty Co. was doing a wholesale volume of at least $40 million. Carol Russo, senior vice president and general manager of sales and marketing, “When we inherited the brand, there were a lot of products,” said Catherine North America, Aramis and Designer Fragrances, added the brand is aiming for Walsh, the Coty executive who then was vice president of marketing and product de- 180 million scented impressions, with blow-ins, scented strips and 1 million vials- velopment for the brand, in September 1999. “We tested Cashmere Mist and found on-card all part of the campaign plan. While none of the executives would discuss that it was a sleeping giant, so we cleaned up the packaging and made it a brand.” sales figures or advertising spending, industry sources estimated that the Luxe edi- Lauder increased the brand’s distribution to about 1,400 department and specialty tion would do about $5 million at retail in the next year, and estimated Lauder is stores immediately after acquiring the license; the brand is currently in about 2,200 spending upward of $10 million on advertising and promotion for the Cashmere department and specialty store doors and online at donnakaranbeauty.com. Mist franchise in the next 12 months. Karan’s global fragrance business — including As the fragrance turned 10, Patti Cohen, executive vice president of global mar- her DKNY scent franchise — is said to do north of $500 million at retail yearly. keting and communications for Donna Karan International, noted, “We sort of did it “Our overall strategy, especially in the U.S., is to balance our support for classics backwards. Once the [bath and body] products hit the market, I had people stopping with new introductions,” said Gabai-Pinsky. “We’ll only do new products in these me on the street asking me what fragrance I was wearing — and I’d tell them it was times if they are meaningful to the brand, and we believe Luxe is.” Lubatti items. Ferragamo Heads Home Ferragamo home fragrance items. Salvatore Ferragamo Parfums is get- ting into the home fragrance business with a line called the Tuscan Soul Lifestyle Home Collection. This September, the firm will introduce, exclu- sively at its 39 boutiques in the U.S., the seven-item line of candles, sachets, a room spray and other am- bient fragrance items that are based on its year-old Tuscan Soul eau de toilette. “This is a long-term project,” said Alison Civale, sales and marketing manager for Ferragamo Parfums USA. “We’ll continue to build on this life- creativity and artisanal craftsmanship.” style theme. We’re hoping to capture a new cus- For the home fragrance collection, a total of tomer who is not as familiar with our scents,” she five handmade, paraffin candles are imbued with continued. “We [also] hope the home collection the scent. The largest of the candles is 1 kg. and is will boost the scent business.” priced at $119. There is also a 240 g. poured candle The Tuscan Soul eau de toilette, which was for $65, and a set of three 85 g. candles for $69. originally launched as part of an amenities pro- A highlight of the collection is the Designed Tracey Malone’s Skin Care Spin gram on Singapore Airlines in 2007, was rolled out Scented Stone, which is a ceramic stone that has Tracey Malone is bringing a touch of glamour worldwide in August 2008, she noted. It is carried been steeped in the scent for 20 days. It is designed to skin care. The facialist — who is beauty doyenne Jo in the U.S. at 41 Neiman Marcus locations and at to scent a room for three months and is priced at Malone’s sister — will introduce Lubatti, a treatment collec- Ferragamo’s boutiques. $119. The Ambient Fragrance spray is priced at $50 tion, starting in September. Since its launch it has generated some $300,000 for 100 ml. and a set of three sachets will cost $55. The 17-unit collection was inspired by concoctions created in retail sales and, for 2009, the launch of the home Rounding out the line is the Sculptural by Madame Lubatti, a London-based facialist and homeo- fragrance collection is expected to help push sales Ambiental Reed Coffret ($100). It is a diffuser that path who treated socialites and stars starting in the Twenties. of the fragrance to $350,000. uses a ceramic reed — instead of bamboo sticks Tracey Malone, whose private clients include members of The unisex scent mixes citrus notes with iris — to permeate the air with the Tuscan Soul scent. the British aristocracy, has been using Lubatti’s recipes for root and fig. It was composed by Pierre Bourdon The ceramic reed is designed to become com- the past 20 years after her mother Eileen, who worked with of Fragrance Resources. pletely saturated with the scent after 48 hours. Lubatti, handed them down to her. “The Lifestyle Home Collection is strongly In addition to the Ferragamo boutiques in the “We tried to stay as true to the original recipes as possible linked to the Salvatore Ferragamo company,” U.S. that will carry the home fragrance collec- as they’ve been tried, tested and trusted for years,” said Sharon said Luciano Bertinelli, chief executive officer tion, the firm’s 500-plus international boutiques Collins, the brand’s managing director, adding Malone hand of Ferragamo Parfums. “It expresses the idea of will also carry the line. blended creams for her clients in the past. “We didn’t need to natural beauty and life in Tuscany together with — Matthew W. Evans make too many changes as we know the products work.” The products’ formulations focus on nourishing, soften- ing and moisturizing skin with ingredients including sweet almond oil, Vitamin E and honey. Clinique Taps Lloreda for Global Makeup Post Lubatti’s lineup includes cleansers, moisturizers, face gel, night cream, body lotions, bath oils, eye gel, anticellulite Clinique has named Claudia Lloreda ing and implementing Clinique’s global makeup oil and hand cream. Prices will range from 27.50 pounds, or vice president of global makeup marketing, a strategy, including creatively marketing and de- $45.36 at current exchange, for a 200-ml. bottle of bath oil to 45 new position. veloping the brand’s seasonal collections, main- pounds, or $74.19, for a 150-ml. bottle of Anti-Cellulite Oil. In her new role, Lloreda will oversee all makeup taining Clinique’s foothold as a leader in the Lubatti will be launched at 43 Space NK stores in the U.K. marketing development and program execution glob- foundation category and continuing to grow its on Sept. 9 and in the beauty retailer’s 13 doors in the U.S. on ally for the Estée Lauder Cos. Inc.-owned brand, the mascara business, according to the company. Sept. 27. While Collins declined to discuss forecasts, industry firm stated. Lloreda, who has been with Lauder since Prior to joining Lauder, Lloreda worked for sources estimate Lubatti will generate first-year retail sales in 2005, was most recently vice president of strategy and McKinsey & Co. Inc. where she specialized in helping the region of $3 million. new business development. major companies and organizations identify trends — Brid Costello Lloreda’s additional duties will include evolv- and growth opportunities across various industries. Beauty Report Double

8 WWD, FRIDAY, AUGUST 21, 2009 The Beauty Report Duane Reade Is Moving on Up Continued from page one Duane Reade’s premium skin care of upscale skin care brands — This Works, Yu-Be and Rilastil, to name a few offering is found in 50 stores. — in Duane Reade’s Water Street store, located at the mouth of the heavily traffi cked South Street Seaport. The earnest beauty adviser and new store prototype represent an about- face for Duane Reade, known for convenience, but notorious for lackluster customer service. The store at 200 Water Street is one of about 20 locations that showcases Duane Reade’s overhauled image, and six to seven more are planned by year’s end. In this location, natural light spills into the store through large windows — which typically are the province of promotional items, ranging from po- tato chips to hand soap — and aisles are wide and easy to navigate. A slate- colored fl oor has replaced white-and-red linoleum tiles. Upon entering the store, the pharmacy is clearly visible beyond undulating gondolas stocked with personal care items. The merchandising philosophy of “stack them high, and let them fl y,” has been replaced by a streamlined assortment organized into three distinct color-coded areas of the store: How Do I Feel (blue), How Do I Look (purple) and What Do I Need (green). These colors have replaced royal blue and red in the company’s logo. The heavy lifting is the work of a new management team, led by chair- man and chief executive offi cer John PHOTOS BY THOMAS IANNACCONE PHOTOS BY Lederer, who joined Duane Reade in April 2008. Lederer previously was stores to drum up excitement about the changes taking place. president of Loblaws Cos. Ltd., a Duane Reade overhauled its assortment to make room for the im- $30 billion Canadian grocery chain. provements, the wide aisles and open windows in particular. As for Soon after arriving at Duane Reade, what stays and what goes, Magnacca said discussions were guided by Lederer tapped Joe Magnacca as se- “variety versus duplication.” “We just don’t need 14 sizes of Pepto- nior vice president, chief merchan- Bismol in our store,” he said. “We don’t need to over-sku our store. dising offi cer from Shoppers Drug In the past, we would have tried to jam everything in, and that cre- Mart Corp., Canada’s largest drug- ates a very diffi cult shopping experience for the customer.” store chain. Shoppers Drug Mart Now, the company is looking at the mix, category by category, made inroads in prestige beauty making edits if necessary, and then rolling out those changes chain- by selling department store brands wide. For instance, in the snack aisle, Duane Reade now merchan- in its Beauty Boutiques and in its dises the assortment by snack type — potato chips, pretzels, etc. — stand-alone Murale concept, which Outside the Water Street store. rather than by brand as it did in the past. Magnacca helped to conceive. adding “Even if you are not experiencing a new store [concept], you are Duane Reade’s effort to reintroduce the 250-plus store chain to experiencing a new assortment, new thinking about adjacencies and the denizens of New York City also includes an advertising cam- a more robust, productive product line up,” said Magnacca. paign guided by consumer research and the tag line, “Your City. Your The company would not comment on performance except to say Drugstore.” Ads across the city read, “Prescriptions. Easier to get the prototype stores are outperforming key metrics, including store than taxicabs,” “The one place even a tourist can fi nd,” and “All the traffi c, customer satisfaction and sales. medicine you need, from aspirin to chicken soup.” The tone of the ads In the beauty department — which in this store, runs at an angle is intended as almost an inside joke between Duane Reade and New offoff toto thethe sideside ofof thethe cashcash registersregisters — DuaneDuane ReadeReade emphasizesemphasizes skinskin Yorkers.Yorkers. BothBoth LedererLederer andand Magnacca,Magnacca, whowho hailhail fromfrom Canada,Canada, nownow residereside beauty ccare.are. IIt’st’s SSkinkin WWellnessellness CCenterenter — sstockedtocked wwithith FFrenchrench iimports,mports, nname-ame- inin Manhattan.Manhattan. InIn thethe evenings,evenings, LedererLederer makesmakes a habithabit ofof poppingpopping inin andand outouput llyy LLierac,ierac, VVichyichy aandnd LLaa RRoche-Posayoche-Posay — hhasas bbeeneen bbroadenedroadened ttoo iincludenclude of Duane Reade stores. more brands with premium price points, such as Skin by Monica Olsen. Duane The retailer is owned by the private equity fi rm Oak Hill Capital Partners, and Reade also is dropping the Skin Wellness Center moniker from the concept, which is has bondholders. Oak Hill bought Duane Reade in 2004 for about $748 million. in 50 doors. Each skin center is manned by a beauty adviser. For fi scal 2008, the chain’s net sales gained 5.4 percent to $1.77 billion, from $1.68 As Shoppers Drug Mart has done and CVS Pharmacy is attempting to do with its billion the prior year, with total same-store sales increasing 4.2 percent. Beauty 360 concept, Duane Reade is making a bid for department store brands. For the full year, the chain’s operating loss was $15.8 million, compared with a “Skin care is one of the fi rst areas you need to convince the New York consumer $24.6 million operating loss in the prior year. that you can move beauty up a notch. It’s our starting point,” said Magnacca, who al- Duane Reade’s near-term liquidity concerns have been lessened by a $300 million luded to plans to introduce an upscale beauty concept in Duane Reade’s upcoming debt issuance earlier this month, as well as a $125 million cash injection by Oakhill Herald Square store, slated to open in October. Capital Partners. Duane Reade’s current offerings of premium skin care brands are housed on At the time of the announcement on Aug. 7, Lederer stated, “We are very pleased lighted, white shelves with lavender headers. to complete this fi nancing, which reduces our leverage, improves our fi nancial fl ex- Nearby is a display of fragrances, housed in a rotating cylinder with a small open- ibility, and provides long-term capital support for the continued transformation of ing. The design is an attempt to bring the category out from behind lock and key, but Duane Reade.” still prevent theft. Magnacca said the drugstore will move to a full service fragrance Lederer told WWD the rollout of the new prototype, which began in the fall, will model, which Duane Reade plans to unveil at its renovated Empire State Building take place over the next three to four years, with Duane Reade completing about 30 store next month. to 35 units a year (the number includes remodels, relocation and new construction). Duane Reade’s color cosmetics aisles include mass market brands such as Cover Referring to the changes, Magnacca said, “This is a brand transformation project. Girl, Maybelline New York, Revlon and Neutrogena. End-of-aisle displays feature It’s about taking a stake in the fact that we are New Yorkers’ drugstore, one that Rimmel, N.Y.C. New York Color and Wet ‘n’ Wild. Magnacca stressed the importance people have trusted for 49 years.” of value and ethnic brands in the New York market. The Iman Cosmetics brand is Duane Reade’s Achilles’ heel, as Magnacca put it, is service. New Yorkers have sold in some 30 Duane Reade doors. Iman’s general manager, Desiree Reid, said, long grumbled about the lack of service inside the stores, but had few other options “Iman [Cosmetics] hosts in-store events, sending in makeup artists to Duane Reade for where to pick up prescriptions or razor blade refi lls. That has changed in re- stores three or four times a year. The new layout, wider aisle and better lighting cent years, as national chains have made a more aggressive effort to penetrate the makes it more conducive to do these events.” She added that Duane Reade’s move New York market. For instance, both CVS Pharmacy and Walgreens have fl agships into the premium tier also bodes well for Iman, given its bestsellers — foundation in Manhattan, located by Grand Central Terminal and in Times Square, respectively. and powders — retail for $15 each. Both stores seek to elevate the shopping experience for New Yorkers, who had come Duane Reade said it is in active discussions with department store beauty brands, to expect little from their neighborhood drugstore. and expects some of them to be on display at the Herald Square store. Magnacca “A market that Duane Reade had more or less to itself is fi lling up with com- said, “If you jump ahead three months, the beauty department that you will see will petition,” said Neil Stern, a senior partner at the retail-consulting fi rm McMillian be signifi cantly different than what we have today.” Doolittle. “The good news for Duane Reade is New York is still an incredibly diffi cult As for how Duane Reade will carve out room for this initiative, he said, “It puts market to penetrate.” Referring to the changes, Stern said, “It’s all part of an effort greater pressure on beauty’s space and you either expand beauty from a footprint to change the image of an iconic retailer. You can be iconic for good and bad reasons. point of view or you have to rationalize it. We are doing a little bit of both.” For Duane Reade, it was a little bit of both.” He added, “Ultimately, if you want to One brand that has disappeared from the assortment is Apt. 5, introduced as a change your image [as a retailer] you have to change the attitude of the people who proprietary cosmetics line in 2002. Duane Reade had already pruned most Apt. 5 work in your store.” products, save for beauty tools. Beauty tools will be cut, too, as Duane Reade plans Lederer said, “The customers in New York put up with an awful lot.” He added to repurpose the names as a household items brand. the company’s strategy is guided by the mantra, “New York Living Made Easy.” That “The name has great equity,” said Magnacca. “The learning from the cosmetics said, in addition to clean, well-lit stores, Duane Reade had added conveniences, was that for a company that was not that developed in private label, beauty is not such as shopping baskets with a retractable handle and wheels. And to ameliorate the place to start. It’s a diffi cult category to penetrate….It’s a fashion category and confusion (and to tame tempers) at the checkout, the drugstore has installed a corral retailers don’t generally have the capability to manage that.” system — lined with impulse items, including magazines and candy. Duane Reade plans to introduce additional private label brands in the To improve service, management has made a concerted effort to directly com- coming weeks. municate the business plan to store employees, and to hold brand pep rallies in the Lederer said, “We understand what New Yorkers want from us.” WWD, friday, august 21, 2009 9

The Beauty Report WWD.COM Yves Rocher Opens Atelier Format Water Heightens NEW YORK — Yves Rocher, one of the earliest pio- perfume, the 400- to 700-square-foot Atelier units neers of the botanicals movement, is opening fran- house products by “feeling” of the product. For Replay Scent Release chise units in Canada and dipping its toe back into example, a department called Feel Good includes the U.S. market with distribution in Sears. organic skin care, body care and specific skin care MILAN — Top off your scent with a spritz of water? After operating company-owned stores in such as items for dry, sensitive, oily or normal That’s the idea behind Replay’s new fragrance masterbrand, Canada, Yves Rocher is ready to rev up growth skin. Radiate Beauty includes antiaging skin care Replay Your Fragrance. The men’s and women’s scents are in- with a prototype called Atelier of Botanical for women in their late 20s to 60-plus. Captivate fused with a molecule called cyclodextrin that releases more Beauty offered as a franchise. is the space for makeup fragrance, while Savor perfume particles when it comes into contact with water. “Because the brand was not as well known in houses bath with flavorful fruit and plant body Though Replay’s fragrance licensee partner, Procter & Gamble Canada, we wanted to grow it ourselves first and mists, body washes and lotions. An overall um- Co., patented the reactivation technology in 2000, the firm tweaked ensure the success of our stores before providing brella called The Botanical Greenhouse resem- aspects of it over the past two years to use it for the Replay scents. Canadians with the chance to purchase a fran- bles a market and features Captivate and Savor The fragrances are set to launch in 17,000 doors globally chise,” said Stephane Duval, director of stores, products, while an area more reminiscent of a beginning Sept. 1. The new scents will coincide with the ar- North America. Botanical Laboratory tells the plant story exhib- rival of Italian denim brand’s jeans collection, Just Add Water, There are 67 Yves Rocher units in Ontario, ited by Feel Good and Radiant Beauty products. dyed with a new dyeing agent that cuts down on water use in Quebec and New Brunswick and the firm has a The Botanical Beauty Spa is dedicated to the re- the production cycle. desire to expand further throughout Canada. Yves juvenating experience with plants. There are spa “The reactivation technology is totally new and freshly cre- Rocher is also interested in uncovering a franchise cabins for services such as manicures, facials, ated for Replay,” explained Heike Hindenlang, global market- partner for the U.S. in the next two years, massages and hair removal. ing director for Procter & Gamble Prestige Products. “And it said Christina Hane, director of commu- Company officials hope the Atelier fits so well with the brand name.” nications. Yves Rocher had operated a format will generate sales 15 percent Will Andrews, fragrance scientist for P&G, explained the few stores in the U.S. that were shut- higher than the older concept. In fact, reactivation technology forced the firm to deviate from tradi- tered to focus on other markets. The in France, where Atelier has been tional perfume making practices when creating the scents. company has found success with implemented in several stores, the “We formulated the scents with more top and heart notes, which are the most volatile,” Andrews said. He added a natu- critical rally occurring molecule, part of the sugar family, cyclodex- Yves Rocher’s Atelier of trin, was an integral part to the technology. by Botanical Beauty. mass Industry sources predict the new Replay masterbrand will Faye Brookman net $60 million in retail sales for the first year — a figure in line with Replay’s first fragrances launched last year. “The molecules work like tiny sponges to capture per- fume oil in a outer shell, when water is added to it they are released. The end result takes fragrance into a different cat- egory, more active than passive.” Replay Your Fragrance scents will communicate the re-

franchising — about 75 percent of its existing units layout is generating increases of 20 percent on av- in 80 countries are franchised or run by agents. erage. The first Atelier in Canada opened at the Privately held, Yves Rocher’s most recent fiscal year end of May and is producing a 35 percent increase sales were $2.88 billion, of which 85 percent is pro- in sales over the former design. All existing 1,600 duced from household and personal care products. stores within the next four years will be converted Yves Rocher executives believe the economic in a $300 million-plus overhaul. Yves Rocher also climate is a good time to make the brand more has a robust catalogue and Internet retail arm. accessible, while also reaffirming its expertise in The company is actively looking for a brick- plant-based beauty care at a time when competi- and-mortar partner in the U.S., as well as looking tors are touting similar messages. at launching the franchise concept in the next In the Atelier format, Yves Rocher has a few years. The company would like to test a store- chance to communicate its heritage. For example, within-a-store concept that is an edited version of there is a reproduction of the actual table used the Atelier of Botanical Beauty. by creator Yves Rocher, who made his first plant- In the meantime, the company will begin test- based cream in his attic in 1959. There are also ing shelf distribution of its products in 13 select Replay fragrances. images of the organic fields in La Gacilly, France, Sears stores in the next two weeks and will be where 30 percent of botanicals used in products selling some of its best-selling products in a new activation technology via a series of diagrams on the outer are grown. Green bell-shaped lamps illuminate Sears beauty section. The products include Serum packaging as well as an in-store set-up where customers can the check out areas, creating the ambience of a Vegetal (France’s best-selling antiage cream), Riche put water onto blotter strips to release the scent. A dedicated true artisan of botanical cosmetics. Crème, Lipophenol, Couleur Nature and Plaisirs Internet site will also back the launches. Rather than using traditional merchandis- Nature. Many items have recently been repackaged “The technology really changes the way we wear scent and ing tactics of grouping of skin care, makeup and to help convey the botanical ingredients message. it is particularly resonant with the younger consumer, the trade is also excited about the launch as it is something new to tell the customer,” added Hindenlang. Stockholm-based watercolor artist Stina Persson’s design of Salon Outlook Bright Despite Business Contraction a couple is splashed over the fragrances’ outer packaging and also reprised in a television advertising campaign, which depicts The outlook for the salon and brightly hued watercolor designs flowing on from one another, di- spa industry rose slightly in the second rected by Kirsa Plewnia from Atletico agency. In keeping with the quarter, according to the Professional painterly theme, in-store marketing materials include a wooden Beauty Association’s Performance easel, and customers will be able to upload a photo to the scents’ Index, which surveys 700 salons and Internet site to have it transformed into a watercolor painting. spas nationwide. Designed by Robert Vattilana, who also created Replay’s sig- The quarterly composite index that nature scent bottles, the narrow, tall glass flacons feature paint tracks the health and outlook of spas splotches and faceted, brushed silver caps. Replay Your Fragrance and salons increased 0.7 percent from for Her is a fruity scent with top notes of orange, bergamot, freesia the first quarter. PBA launched the and middle notes of red fruits, orchid and rose and base notes of Performance Index this year, which cedar and sandalwood. Replay Your Fragrance for Him belongs to consists of two components: the cur- the aromatic water olfactory family with top notes of ivy leaf, man- rent situation index and the expecta- darin and cardamom, heart notes of clary sage, cedar leaf and a tion index. water accord, and base notes of sandalwood cedar and patchouli. The current situation index mea- The outlook for the salon The P&G fragrance creation team collaborated with International sures salon and spa owners’ customer business in on the rise. Flavors & Fragrances for Replay Your Fragrance for Her and traffic flow, employee hires and fires, Firmenich for Replay Your Fragrance for Him. capital expenditure and service and re- The reactivation technology added a euro to the price tail sales. The expectation index asks these own- contraction. However, expectations grew to 103.9 in list for the scents, said Hindenlang. The scents come in four ers about their outlook for the industry, what their the quarter, showing that there is a solid level of op- eau de toilette sizes: Replay Your Scent for Her, 20 ml. for feelings are about the future of business and how timism for industry growth in the months ahead. 17 euros, or $24.20, 40 ml. for 25 euros, or $35.61, 60 ml. for positive or negative these feelings are. The index was formed so that salons and 35 euros, or $49.85, and 90 ml. for 50 euros, or $71.21. Replay According to the survey, the current situation spas have a metric to gauge performance, such Your Scent for Him, 30 ml. for 17 euros, or $24.20, 50 ml. for index rose 0.9 percent and the expectation index as the restaurant and housing industries, said 25 euros, or $35.61, 75 ml. for 35 euros, or $49.85, and 125 ml. rose 0.6 percent. Sam Leyvas, director of Government & Industry for 49 euros, or $69.79. Auxiliary products include shower gel, While the increases are good, the current situ- Affairs for PBA. deodorant and aftershave products for the men’s line. ation index remained below 100 at 99.7, signifying — Andrea Nagel — Stephanie Epiro 10 WWD, FRIDAY, AUGUST 21, 2009

The HBA Report WWD.COM L.A. Beauty Firm Revamps Brands, Launches Twilight Line By Rachel Brown the moon themes in “Twilight,” is targeting older girls predominantly black packaging. Lola will emphasize and teenagers’ mothers and is launching in the middle translating runway trends into wearable makeup with LOS ANGELES — Harry Haralambus is a rare name, but of next month at Nordstrom and Dillard’s. DuWop is kits. “Lola has enormous potential because I think no- it is popping up pretty often these days in the Southern also a part of the Twilight initiative and has introduced body conveys sexiness and sophistication,” said Clark. California beauty industry. the lip stain Twilight Venom for $16 on Sephora.com. “The [Lola customer] goes to the Chanel counter and In the last two years, Haralambus’ investment firm, Prices for Volturi’s 21 stockkeeping units run from $9 walks into a Victoria’s Secret.” Lambus Partners, quietly acquired Los Angeles area to $19, and prices for Luna’s 35 sku’s are $18 to $34. Before Haralambus’ involvement, Lola had exited cosmetics brands DuWop Cosmetics and Lola Cosmetics, Haralambus’ initial beauty brand acquisition, Sephora and gone into Ulta, and Clark conjectured skin care brand Leaf & Rusher and manufacturer All DuWop, has undergone a thorough evaluation of its it lost its footing somewhere along the way. (The About Beauty Cosmetics Inc. for undisclosed sums. lineup. A brand known for innovation epitomized by brand is currently not carried by either chain.) Under ImaStar Corp., a company under Lambus Partners, also its Venom plumping products, he explained DuWop Haralambus’ leadership, the brand has been picked secured the license to produce makeup affiliated with doesn’t want to stop innovation, but is attempting up by Beauty 360, could enter another specialty beauty the “Twilight” series of movies and is piggybacking on to build a following for its basic products — the $38 chain and is on track to be in 400 doors by the end of Marc Jacobs’ fragrance business by allowing Coty Inc., Foundation of Youth antiaging foundation, for instance next year. It is in 150 now. the fragrance licensee for Lola Cosmetics, to use the — and widen its demographics beyond young shop- Lambus Partners’ only foray into skin care so far is moniker Lola for Jacobs’ newest perfume. pers. “You are going to find that we are not going to try Leaf & Rusher, a brand launched in 2003 by Beverly At a meeting earlier this month at Haralambus’ to be cutting edge across the board,” said Haralambus. Hills plastic surgeon Norman Leaf and registered nurse Sunset Boulevard offices here, the Rand Rusher. Chief executive offi- South Africa native of Greek de- cer Curt Meeuwsen said the brand, scent spoke for the first time pub- currently in 80 doors, reached a licly about his move from interna- height of 170 doors, with Bath & tional cosmetics distribution, which Body Works’ C.O. Bigelow being its he has handled over the years largest retailer, and couldn’t sup- for the likes of Stila and Fusion port the distribution.“We needed Brands, to beauty brand building. to rethink what we were doing,” he He gathered executives from the said. Leaf & Rusher has around 20 various Lambus and ImaStar prop- sku’s, including bestseller Rapid erties to discuss brand expansion Resurface, priced from $21 to $159. strategies and the broader objec- In the future, Leaf & Rusher’s tives of his budding portfolio. distribution is expected to be both “We’re now making the state- through prestige retail and via tele- ment that this company is a se- vision. A reality television show rious cosmetic company that is produced by Go Go Luckey, the doing very well,” said Kimberly production company behind MTV’s Clark, who founded All About “Laguna Beach,” featuring the Leaf Beauty with Esmy Mancia. “If you & Rusher medical clinic, is in de- look at the West Coast, what we’re Lambus Partners’Partners’ DuWopDuWop andand velopment and plans call for Leaf known for is innovation — the soon-to-be launchedlaunched Twilight.Twilight. & Rusher acne products, directed brands [such as] Hard Candy and chiefly at adults, to be spotlighted Too Faced….Harry understands in an infomercial. Haralambus said the entrepreneurialism that brands are built upon and Added Cristina Bartolucci, DuWop co-founder and an upcoming repackaging of the brand would align the the wonderful success of creativity, and what he brings chief creative officer, “The goal of DuWop is to become products with the divergent distribution points. is the business side.” an antidemographic line.” As a whole, Haralambus estimated his company’s Haralambus’ business acumen is being tested with DuWop is in 500-plus domestic doors, including business has skyrocketed 300 percent in the past sever- Twilight. Although hesitant to jump on the beauty li- Sephora and QVC, and has 104 sku’s priced from $11 al months, and he’s out to capture more growth. If ap- cense bandwagon, he decided to get on board with to $40. The brand recently launched at Shoppers Drug propriate opportunities arise, he said he could acquire Twilight because he believed its cachet could sustain Mart in Canada and will roll out to 50 Dillard’s stores one or two brands between now and the first quarter of cosmetics after the run of the movies and its appeal next month. Haralambus projected it will grow 20 to 30 next year. Brands with annual sales from $5 million to extended beyond teenagers. “If I walked into a store, I percent this year, but wouldn’t disclose exact revenue fig- $10 million are the primary targets. Haralambus also feel like I would buy it without affiliation,” said Jaega ures. “Our business was spread out over too many sku’s,” anticipates obtaining outside capital by next year to Haralambus, Harry’s daughter and Twilight project said Haralambus. “We are trying to meet our expecta- aggressively pursue additional acquisitions. coordinator. “You will find with fans of ‘Twilight,’ that tions with doing more of our business on fewer sku’s.” When All About Beauty, which vies for manu- it’s not just teenyboppers, the moms have all started Lola Cosmetics, operated under the entity Beauty facturing jobs for Lambus Partners-owned brands reading the books and watching the movies.” Partners Inc., a partnership of Lambus Partners and as well as brands not a part of the company, joined The Twilight beauty franchise has been separated Lola founder Victoria Jackson, is getting a packaging Lambus Partners, Clark said it was because she and into two lines. Volturi Twilight, named for a ruling revamp scheduled for a holiday launch. Its assort- Haralambus shared strong ambitions. “We wanted to vampire clan in the “Twilight” series, is aimed largely ment is being reduced from some 190 sku’s to around be the Estée Lauder of the West Coast,” Clark asserted. at teens and is launching the middle of next month at 70, with prices ranging from $14 to $45. The brand’s Shuddering at the comparison, Haralambus cautioned, Hot Topic, Torrid and Ulta. Luna Twilight, a play on signature color, red, is being retained in foil to accent “We are just getting started.”

Fusion Fusion Beauty Aims to Fatten Sales Beauty’s Fusion Beauty aspires to enlarge its lip-plumping presence Infatuation. and bolster its sexy science positioning with the September release of Infatuation Liquid Shine Multi-Action Lip Fattener, the Toronto-based brand’s first launch under the stewardship of its new chief executive officer. “It is a big step,” said Caroline Pieper-Vogt, who assumed the ceo post in June after former ceo and founder Randi Shinder sold her minority stake to majority shareholder Eugene Melnyk. “The ability to come back again with a completely fresh technology and reinvigorate the entire lip-plumping category is important. It is very strategic for us to continue to really show our leadership there.” Fusion Beauty planted its flag in the lip-plumping category four years ago with LipFusion and followed up with LipFusion XL, which senior vice president Roslyn Griner said is the number-one lip-plumping treatment at Sephora. Infatuation ad- vances Fusion Beauty’s lip plumping by combining the marine filling spheres of previous products for instant plumping with so-called Amplifat technology derived from sea foam for lasting lip fullness and firmness. “What we really wanted to do with Infatuation is bring a lip product that, un- like LipFusion, plumps lips for the long haul,” said Tammy Yaiser, director of product development for Fusion Beauty. “We found the technology and what it does is that it helps your body increase fatty acid promotion and storage. It takes about 28 days.” Due to the tough economy, Fusion Beauty opted to price Infatuation at $29 for 5 grams, compared with LipFusion’s price of $36 for 8 grams. There are 17 shades of LipFusion, but Infatuation will start with six shades in lacquer with more intense color than LipFusion’s sheers. technological approach. Infatuation will be sold at 1,000-plus doors, including Sephora, Ulta, Dillard’s Currently, the lip category constitutes 50 percent of Fusion Beauty’s sales, but and Beauty 360. Fusion Beauty is planning to build upon the Infatuation franchise Griner ultimately is aiming for lip to account for 30 percent, eye for 30 percent, with lipstick and skin care items possibly rolling out in the spring. skin care for 30 percent and the remainder in other segments. “I hope that it Fusion Beauty wouldn’t discuss sales projections for Infatuation, but industry will be more diversified,” said Griner. “It is a long-range goal. I am very happy to sources estimate it could generate $3 million in first-year sales. have such a dominant role in the lip category. It is not something that I want to To support the product, advertising will break in October magazines that Griner go away.” described as “pushing the envelope” to highlight Fusion Beauty’s cutting-edge — R.B. WWD, FRIDAY, AUGUST 21, 2009 11 WWD.COM PVH Focused on Potential Acquisitions FASHION SCOOPS PARIS POP: It appears last year’s Gap + Colette New York pop-up shop was more than a By David Lipke portion of that debt. Similarly, the company one-off for the American retail giant. WWD hears Gap will reprise its mass-meets-Parisian- could decide to buy its own common stock, concept shop again, this time with Merci, the French concept shop opened earlier this Phillips-Van Heusen Corp. increased as it did in the first quarter of 2007 when it year by former Bonpoint owners Marie-France and Bernard Cohen. Merci, which sells a its cash balance by $109.1 million over the past purchased $200 million in shares. curated selection of home wares, fragrances and children’s and women’s wear, is known as year, bringing it to $369.6 million at the end of Also on the conference call, Chirico much for its fashion as its charitable angle: All proceeds are donated — after the second quarter — and now the firm is look- addressed the stiff challenges facing its taxes, rent and employees are paid, however. Gap is said to be importing Merci’s ing to spend it. licensed Calvin Klein fragrance business philanthropic style for a monthlong stint at the Fifth Avenue and 54th Street store On a conference call with analysts on with Coty Inc. Royalty revenue in the cate- beginning Sept. 10. Thursday to discuss the quarter’s results, gory was down about 25 percent in the sec- PVH chief executive officer Emanuel ond quarter ended Aug. 2, due to continued MORE GRAFF ARRESTS: Three men have been arrested this week in connection with the $65 Chirico said the money is likely earmarked weakness in duty free airport shops and million armed robbery at Graff’s New Bond Street boutique earlier this month, London’s for potential acquisitions. high-end department stores impacted by Metropolitan Police said Thursday. One man was arrested Thursday while two were arrested “Our first priority would be continu- the recession. Despite the sales declines, Wednesday, the police said. The move follows the arrest last week of a 50-year-old man at ing to look for acquisition opportunities, Chirico said Calvin Klein has not lost any an address in East London in connection with the raid, during which 43 items of jewelry particularly ones that are branded in na- market share vis-à-vis competing brands, were taken from Graff’s Mayfair store. That man has since been released on bail. Police ture and potentially open up the opportu- which face similar difficulties. said Thursday they would not release further details of the arrests “for operational reasons,” nity for international distribution,” said This fall, Calvin Klein will launch its and added they are still appealing for information in relation to the robbery. Chirico. “I think we’ve demonstrated an new CK Free young men’s scent, which will ability in the past with some of our other be supported by a major advertising cam- A LIBERTY LANDMARK: Could Liberty be Target’s next target? According to sources, the acquisitions to integrate acquisitions well, paign. The first deliveries will be in stores central London store known for its fashion, vintage textiles and furniture, is in advanced get them on our platform at the end of this month. talks with Target about a collaboration, which would bow for spring, and see an array of and then maximize the Calvin Klein jeans and Liberty prints worked into clothing and accessories. Geoffroy de La Bourdonnaye, Liberty’s potential of the brands.” underwear royalties from chief executive, declined to comment Thursday. A collaboration with Target would be PVH acquired neck- licensee Warnaco Group the latest in a string of international partnerships Liberty has forged with brands and wear maker Superba in Inc. were down about 10 celebrities including Hermès, Luella Bartley, Grayson Perry and Ronnie Wood. 2007, creating synergies percent in the quarter, or with its legacy dress shirt 4 percent on a constant business, and bought currency basis, due to Calvin Klein in 2002 in a shifts in Warnaco’s sales deal that radically trans- calendar and the weak formed the company. retail climate. PVH has been look- In bright spots, Calvin ing at additional acquisi- Klein’s license with G-III tion targets but has yet to Apparel Group Ltd. — find a suitable company, which includes men’s and as the most attractive women’s outerwear and brands are reluctant to women’s dresses, suits chase deals in a climate Emanuel and better sportswear where valuations have Chirico — posted strong growth, been depressed, Chirico with royalty revenue up told WWD. more than 20 percent in “There have been slim pickings so far,” the quarter. PVH expects the G-III business he noted. “We’ve looked at some compa- to become the second largest Calvin Klein nies, but they’ve been troubled, and noth- license within the next six months, sur- ing has interested us so far. We haven’t passing Coty and behind Warnaco. Coty’s found any brands that we think will create Calvin Klein fragrance business is about true consumer demand. And good busi- $1.3 billion at retail and Warnaco’s jeans nesses that we might be interested in don’t and underwear is about $2.2 billion. DOWN SOUTH: Uche Ude, Lancaster West, Mary Porter and Drea James will be among the want to do transactions now, with valuation PVH’s dress shirt and neckwear divi- 20 designers trekking to New York City Wednesday for Southern Design Collections’ multiples where they are.” sion posted a 2 percent sales gain in the Fashion Secrets of the South trunk show. The six-hour event will be held at the Doubletree However, Chirico is optimistic that deals quarter, gaining 6 percentage points in Metropolitan Hotel and offer a glimpse of “slow fashion” as well as ready-to-wear, will materialize in 2010 if the credit mar- market share over the last year, according accessories and footwear. kets loosen and valuations go up. to Chirico. More than one-third of all dress PVH throws off about $100 million in shirts sold in the U.S. are made by PVH. THE BIG 4-0: Browns, the London retailer that launched many a designer’s career, is cash each year. “We’re not a bank and when In PVH’s retail segment, comp store gearing up for a big 40th anniversary celebration in the spring. The store, founded by it accumulates, we need to return it to trends have improved in the past few Joan and Sydney Burstein and now run by their children, Simon Burstein and Caroline Collis, shareholders,” explained Chirico. “Ideally, months, even moving into positive territory has asked designers including Donna Karan, Calvin Klein and Giorgio Armani to take part that would be through an acquisition, but last month. “In July, we posted a 1 percent in an exhibition that charts the past four decades in fashion — and Browns’ impact on we could also consider a stock or debt buy- comp store increase for the month and this the London retail scene. The store, which brought labels such as Missoni, Donna Karan back. We’ll end the year with about $400 improvement of 1 percent has continued and Comme des Garçons to the U.K. and talent-spotted fashion students including million in cash and we’ll have to decide into the first two weeks of August,” said John Galliano and Hussein Chalayan, also boasts a star-studded list of former employees, what to do with it.” Chirico. For the full second quarter, retail including Manolo Blahnik, Paul Smith, Richard James, Tamara Mellon and Sir Philip Green. PVH ended the quarter with $399.6 mil- comps were down 3 per- lion in long-term debt, which begins to cent, compared with an IN THE HOUSE: Like grads gearing up for a reunion, a group of former Vogue staffers- mature in 2011. If an acquisition does not 8 percent drop in the turned-designers have decided to band together for Fashion’s Night Out on Sept. 10. The materialize, cash could be used to retire a first quarter. lines Hester, Mauricio Quezada, Duskin, Doucette Duvall, Thread Social, Prova, Gryphon and Wren will take over the Bellhaus Bond Street pop-up store for their own temporary pop-up space, part of a miniblock party with the adjacent Billy Reid and Rogan boutiques. WwD Dubbed the Vogue Alumni House (they boast two former André Leon Talley assistants, two Topman Unveils Men’s Winners fashion writers and a jewelry and watch editor among their ranks), the evening will include By Emilie Marsh a key part of the British Men’s DJ sets by Sebastian Kim, Johnny Misheff and Skaught and customized Fashion Night Out Fashion Council’s design- T-shirts for sale. “Hello” name tags and drink tickets not included. MILAN — The British Fashion Council (BFC) er development and showcas- on Thursday launched NewGen Men, a new ing program,” said Simon Ward, BFC joint ART PARTY: New York Fashion Week typically has its share of parties to celebrate designers sponsorship program by Topman, chief executive officer. and their collections; this season, however, the scene will get artier thanks to Vladimir which aims to support emerging The award mirrors long-stand- Restoin-Roitfeld and Andy Valmorbida. They are teaming up with Giorgio Armani to present men’s wear talent, and named the ing female counterpart New “Richard Hambleton — New York,” an exhibit featuring the works of the reclusive New York award’s inaugural recipients. Generation, whose past winners in- artist who is a contemporary of Jean-Michel Basquiat and Keith Haring and the last living Designers Carolyn Massey and clude Alexander McQueen, Sophia member of the East Village Art Movement. The show at the gallery at 560 Washington James Long will receive funding Kokosalaki, Giles Deacon, Gareth Street will kick off during fashion week with a party on Sept. 15, and run through Oct. 2. and be given the opportunity to Pugh and Julien Macdonald, and show their spring 2010 men’s wear builds on the success of Topman EXCHANGE PROGRAM: Two shopping streets — one in London, the other in New York — collections at Somerset House on and Fashion East’s MAN show dur- will take part in a Freaky Friday-style experiment starting later this month. A group of Sept. 23 during London Fashion ing LFW, which strives to promote retailers based on London’s Newburgh Street, off Carnaby Street, and others in New Week, a day after the close of the promising young British men’s York’s Lower East Side will get a taste of the retail scene in each other’s cities as part of women’s runway season in the wear designers. a temporary location swap. From Thursday through Sept. 13, 15 London labels, including British capital. “[NewGen Men is] an excit- Twenty8Twelve, Fred Perry and jeweler The Great Frog, will set up in a space on Orchard Massey and Long, both 28 and ing initiative that rightfully posi- Street in the Lower East Side. Meanwhile, from Oct. 1 through Nov. 1, 15 Lower East former Royal College of Art grad- tions men’s wear at the forefront Side-based boutiques including Earnest Sewn, Wendy Mink Jewelry and By Robert James uates, were selected by a panel of of fashion, providing a deserved will take up residence in pop-up spaces on Newburgh Street, London and in nearby key opinion-makers from media platform for the very best men’s Lowndes Court. The stores will remain open in their respective cities during the swap. and retail including represen- wear maturing talent,” said “The Newburgh Quarter and Lower East Side swap is a great story about the strength of tatives from Esquire, Fantastic Gordon Richardson, Topman’s the independents in both of these areas, most of whom will never have retailed outside Man, Harvey Nichols, Selfridges design director. of their own country before,” said Simon Quayle, director of Shaftesbury Plc, which owns and Topman. Massey launched her London- and manages the stores in the Carnaby Street area, and whose company conceived the “We hope that NewGen Men based label in 2006, while Long idea. “We are always on the lookout for exciting and innovative retail concepts from will support London’s future debuted his collection at LFW’s overseas, and hopefully this swap could lead to some of the New York brands looking for a men’s wear stars and become A fall look by James Long. MAN show in 2007. permanent shop in our area.” 12 WWD, FRIDAY, AUGUST 21, 2009 WWD.COM Media/Advertising MEMO PAD WELL RED: Vogue’s creative director, Grace MEET THE BEAST: The Daily Beast is still aggressively staffi ng up, now adding Newsweek Coddington, continues to win far more than 15 deputy editor Tom Watson to the roster in the same capacity. Watson spent eight years at minutes of fame for her scene-stealing turn in Newsweek, including as national affairs editor and managing editor of the Web site. “I hear “The September Issue,” the documentary fi lm the future of journalism might be moving in this direction,” he joked to WWD, adding he about the magazine that premiered earlier this was eager to tackle the “cutting-edge problem of how to do compelling journalism on the week. The September issue of French Vogue, Web and make a business out of it. I’m rooting for my colleagues at Newsweek, but the arriving on newsstands Monday, devotes four long-term arc of the print magazine business is challenged.” pages to the fl ame-haired editor, including one It’s also something of a Tina Brown reunion for Watson, who was a founding editor at devoted to tear sheets from her modeling days. Talk a decade ago. Fellow Talk alums Gerald Posner and Gabe Doppelt also recently joined The accompanying two-page article delves The Daily Beast, as chief investigative reporter and West Coast bureau chief, respectively. into her sometimes-prickly relationship with Watson starts Aug. 31. — I.C. editor in chief Anna Wintour and contains this zinger: “Anna and I, we’ve known each other a MONEY TALKS: Rupert Murdoch is clearly serious about making readers pay for their news. On long time.…We have a real mutual respect for Thursday, the Murdoch-owned News International said it had begun a 30-day consultation each other, even though sometimes I feel like period with 60 staff on the proposed closure of The London Paper, the free evening tabloid killing her.” It’s a sentiment Coddington also the company launched in 2006. During consultation periods, U.K. employers talk to staff expresses in the documentary. and unions about proposed job cuts. The French Vogue piece follows an article James Murdoch, chairman and chief executive offi cer of News Corp. in Europe and Asia, said, in the fall 2009 issue of T magazine, in “The performance of the business in a diffi cult free evening newspaper sector has fallen short of which Coddington confesses she slyly used expectations. We have taken a tough decision that refl ects our priorities as a business.” fi lmmaker R.J. Cutler’s crew for espionage ▲ Model Lara Stone on the cover of He added the proposed closure refl ects the company’s aim to “streamline our operations purposes. “They were following Anna in the September’s French Vogue. and focus investment on our core titles.” art department, listening to her reaction to News International said The London Paper recorded a pretax loss of 12.9 million my pictures. So I would ask them, ‘What did she say? Did she like them?’” As for stealing pounds, or $21.2 million, in the year ended June 2008, and turnover of 14.1 million Wintour’s thunder, Coddington demurred: “It wasn’t intentional.” — Miles Socha pounds, or $23.2 million, during the period. The company will continue to publish the paper during the consultation period. COMEBACK — SORT OF: Sundance is reviving the “Full Frontal Fashion” brand to encompass The paper, which focuses on news, celebrity gossip and events in London, is distributed a blitz of fashion programming pegged to New York Fashion Week. free during the week by staff near London Underground stations. It recorded a circulation The original “Full Frontal Fashion” television show was discontinued in January amid of 500,348 in July. The title competes with London Lite, a free paper owned by disputes at parent company Rainbow Media Holdings, a Cablevision subsidiary that also Associated Newspapers, the Daily Mail’s publisher, which also launched in 2006. London owns Sundance. But the show isn’t coming back per se — “We don’t necessarily think that Lite recorded a circulation of 400,347 for July, according to the U.K.’s Audit Bureau of shooting runway shows is a very Sundance way to do it,” said Sundance general manager Circulations. — Nina Jones Sarah Barnett delicately — but a mix of television programming and Web content, much of it original, will fall under its umbrella. MORE AVEDON: The International Center of Photography in New York has extended Barnett said that when it comes to fashion, Sundance is most interested in showing its “Avedon Fashion” exhibition through Sept. 20 and also is planning an “Avedon the creative process. “For us, it’s not about the trendy — it’s just about this dramatic, and Fashion” panel for Sept. 10. Harold Koda, curator of the Costume Institute at the entertaining and, above all, creative perspective,” she said. Metropolitan Museum of Art; China Machado, Richard Avedon’s Sixties model, and The four-part “The Day Before” series is the centerpiece of the TV effort. Director Loïc photographer Lizzie Himmel will talk about the changing paradigm of fashion with ICP Prigent, whose previous credits include “Signé Chanel” and a 2007 feature on Marc Jacobs curators Carol Squiers and Vince Aletti. The event will be held in the HBO auditorium at and Louis Vuitton, follows four designers in the manic 36 hours preceding their shows. 1100 Sixth Avenue, at 7 p.m. — A.W. Shooting over the past year, Prigent captured Sonia Rykiel’s 40th anniversary celebration and Jean Paul Gaultier’s haute couture show in Paris, Karl Lagerfeld’s fall 2009 Fendi show FUN AND GAMES: HSN’s iPhone app is more playful than most. You can watch HSNtv in Milan and Proenza Schouler’s fall 2009 collection in New York. live and play a slot machine-type game. Shake the iPod to spin the machine. If the right Perhaps an even more ambitious aspect is the Web site, which launches Sept. 1 on discount coupons line up, you can win as much as $100 off your next purchase. If not, at Sundance’s own site and will stand alone by spring fashion least you’ve looked at a whole bunch of products. week, with continuous original content even between “This gives us the ability to be anywhere our customer seasons. There, Patrick McMullan will fi le video reports and is,” said Brian Bradley, executive vice president and a photo diary from the collections, alongside contributors general manager of HSN Online & Advanced Services. such as Lynn Yaeger, former Teen Vogue and Nylon fashion “We believe with the Apple iPhone, we will see some new editor Aya Kanai and Robin Sayers, editor at large for the customers and probably some younger customers.” Los Angeles Times magazine. The site also will feature a To complete a purchase, iPhone users call HSN or video and photo exhibition of the work of Bruce Weber. access the Web site. The retailer plans to introduce Also making its debut during the week is “Somebody shopping on the mobile Web later. Told Me About…Carla Bruni,” directed by George “Our customers who shop multiple channels — TV Scott, who appears to have had signifi cant access to and Web — are without a doubt our best customers,” he France’s fi rst lady at home and in the recording studio. said. — Cate T. Corcoran The channel will round out the offerings with the documentaries “Seamless,” “Lagerfeld Confi dential” and CRASH BOOM: Motion comics, cell phone comics and “Ralph Rucci: A Designer and His House,” among others. scented comics are sure to come, but Wednesday’s Sponsorships for the programming are forthcoming, “Comics: From Every Angle” discussion in Bryant Park said Barnett, but she was unable to name them as of yet. focused mostly on the here and now. Chip Kidd, the — Irin Carmon creative force behind “Bat-Manga: The Secret History of Batman in Japan,” said comics need to be viewed PAPER’S BIRTHDAY: Paper magazine is marking its 25th Karl Lagerfeld in as a genre as opposed to being a medium. “It’s like anniversary next month — and it includes a rise of 4 “The Day Before.” saying, ‘Let’s do a panel on movies.’ Uh, don’t you percent in ad pages at a time when many other titles are think we ought to narrow it down a little? Not that I reporting declines. New advertisers in the have a problem with this panel,” he said issue include Chanel, Nicole Miller, Intermix, with a laugh. CW Television, Morgans Hotel Group, Liz Panelists, which also included Marvel Claiborne and Showtime. Comics’ editor in chief Joe Quesada, artist “We started as an indie business in a and illustrator David Mazzucchelli, blogger recession and we are celebrating our 25th Heidi MacDonald and moderator Danny anniversary, still independent, in tough Fingeroth, Superhero Comics writer and economic times,” said David Hershkovits, co- editor, agreed that comics should no longer founder, publisher and editor. He added the be lumped together in one category, whether company has evolved and expanded, from they be superheroes, indie, “Naruto,” just a publishing business to now being in manga, graphic novels or anything else. the “content business.” “We have Buzzeteria ▲ Paper’s 25th anniversary covers. Quesada said giving artists and illustrators — our online network, which includes the respect they deserve helped his papermag.com — and our marketing division, Extra Extra, which does larger programs for company go from “bankruptcy to resurgence.” He said, “My job is just to get out of the blue-chip companies like Target, Sony and Absolut,” he said. way and let people do what they do.” Paper’s new issue also ushers in a top-to-bottom redesign, including a new logo from Producing movies such as “Iron Man” and its sequel, which is in development, as well design director Andrea Fella. Publisher, editor and co-founder Kim Hastreiter said fi ve as dropping 80 to 90 comic books a month and having a digital strategy helps his cause, different covers will be available on newsstands beginning Monday, each featuring fi ve too. Surprisingly, Quesada said he is confi dent that paper comic books will be around for 25-year-olds, such as Mamie Gummer, Alexa Chung, Lydia Hearst, Zoe Kazan and Jessica White. the next 10 years. LeSportsac has created a limited edition tote for Paper that will retail in stores for $58, MacDonald said, “I like to say, ‘Comics are kind of too small to fail.’” and the magazine is teaming up with HP (which is marking 25 years of the ink-jet printer) Mazzucchelli, whose “Asterior Polyp” topped the bestseller list this week, joked, “A lot for an anniversary celebration at the New York Public Library on Sept. 8, to kick off fashion of cartoonists and publishers are used to clawing their way out of things. We’re constantly week. — Amy Wicks redefi ning what failure is.” Each had their own take on how a magic wand or cosmic cube might make the world WENDA’S LATEST GIG: Wenda Harris Millard, president of Media Link, has been tapped better with comics. “It would all be drawn by Maurice Sendak,” Mazzucchelli said. to manage the day-to-day sales organization at MySpace. Millard will not become an “It would be mandatory to buy them or they would send you to a camp of some kind,” employee of MySpace; her fi rm has been hired by MySpace, in part, to provide guidance Kidd offered. on reconfi guring its ad products. Meanwhile, Jeff Berman, head of ad sales at MySpace, is “They would come with free shoes,” MacDonald added. stepping down “to explore other opportunities,” said chief executive Owen Van Natta in a “We would have a world where comic book illustrators were as revered as fi lmmakers,” blog post. Earlier this week, MySpace acquired iLike, a social music site. — A.W. Quesada said. — Rosemary Feitelberg WWD, FRIDAY, AUGUST 21, 2009 13 WWD.COM Tia’s Opens in Grand Central Izod Signs Swimwear License By Ross Tucker By Sharon Edelson Izod is looking to a new partnership to grow its swim- NEW YORK — The past year has been a wild ride for Megan O’Sullivan, whose Tia’s Place near wear category. the Grove Street PATH station in Jersey City hopped a train to Manhattan and spawned Tia’s The Phillips-Van Heusen Corp.-owned label has signed Studio Ray to at Grand Central Terminal. produce Izod swimwear for the men’s, women’s and children’s wear mar- The store, which bowed on Monday, is the first apparel retailer to lease a space actually kets. The Izod swimwear collection will begin retailing in department inside the terminal. Banana Republic and Kenneth Cole rent space from the MTA, but are ac- and specialty stores for spring, featuring surf-inspired boardshorts and cessed only through entrances on 42nd Street. tops for men and boys and a range of styles for its women’s and girls of- With an emphasis on young designers, niche brands, a smattering of better-known labels, ferings. accessories such as jewelry and scarves as well as handbags, Tia’s traffics in surprisingly low Kenneth Wyse, president of licensing at PVH, said Izod has long had price points that make pulling the purchase trigger easy in the busy terminal through which a small swimwear offering. However, management felt swimwear wasn’t about half a million people pass each day. one of its core competencies and, as a result, had a greater potential for Tia’s is one of the final steps in the terminal’s remerchandising of the Lexington Passage, growth. Wyse described the licensing agreement with Studio Ray as “the which began in April 2008. The long, wide corridor leads to the station’s main waiting room absolute correct marriage and match” for Izod. on one end and Lexington Avenue on the other. Retailers new to the station include MAC “They understand what the DNA of the brand is because they are a Cosmetics, Tea & Honey, InnaSense and Cursive. Pink Slip and Tumi relocated their stores and youth-inspired, action-oriented sportswear house,” he said. expanded. “We knew apparel would work,” said Laura Blaustein, assistant general manager of Wyse acknowledged that swimwear presents specific challenges. Jones Lang LaSalle. “It has some challenges.” “It’s always small and your window is not big, so you have to maximize O’Sullivan has identified the stumbling blocks. Consumers in Grand Central are usually in with the right product, the right fashion and the right price,” he said. a hurry, so Tia’s stocks items that are easy to try on, such as sweaters, wrap dresses and jeans. New York-based licensee Studio Ray was founded in 1998 by Ray Space is at a premium. Tia’s is just 500 square feet, compared with the 4,000-square-foot Jersey Haber and specializes in performance apparel, activewear, swim- wear, outerwear and accessories. It also produces its own brand, ZeroXposure. Tia’s carries easy try-on Izod has 29 product categories under license with 24 companies in the items with gentle prices. U.S. and abroad. Unit of Change Capital Partners To Buy Hallhuber From Stefanel By Andrew Roberts MILAN — Italian clothing manufacturer and retailer Stefanel SpA has agreed to sell Munich-based women’s wear retailer Hallhuber GmbH to private equity firm Change Capital Partners LLP as it looks to reorga- nize its business. The 25 million euro, or $35.4 million, sale to Blitz 09-450 GmbH, a German company controlled by Change Capital, is expected to be com- pleted Sept. 10, subject to approval by German tax authorities, a spokes- man for Stefanel confirmed Thursday. The figure could rise by another 4 million euros, or $5.7 million, following a conditional earn-out. Dollar figures were converted at average exchange rates for the peri-

george chinsee ods to which they refer. Stefanel, which acquired the 30-year-old Hallhuber for around $17.5 million in March 2000, posted pretax losses of 17.3 million euros, or photos by $22.6 million, in the first quarter, up from losses of 4.7 million euros, or $7 million, in the same period last year. The Italian firm has em- City flagship, which had sales of $1 million barked on a three-year plan to refocus its business, including reposi- last year. tioning the Stefanel brand as an accessible designer label. The group To compensate for the new unit’s small also operates the High and I’M Isola Marras casualwear brands under size, O’Sullivan gave Tia’s two doors to ease its Interfashion business unit and holds a 50 percent stake in airport traffic flow, and employed some decorating retailer The Nuance Group. Sales for the three months ending March sleight of hand, such as hiding storage areas 31 fell 25 percent to 66.8 million euros, or $87.4 million, after Stefanel behind white vinyl tufted walls decorated with stopped selling the Marithe & François Girbaud label. Swarovski crystal studs. A shelf displaying ac- Hallhuber, which has 93 points of sale across Germany, Austria and cessories sits inside a circle cut out of a mirrored the Netherlands, performed well in the first half of this year, reporting wall and mirrored display tables have overlays of a 13 percent rise in revenues to 29.6 million euros, or $39.5 million. For glossy white lattice designs. Megan the full year 2008, the middle market retailer generated revenues of Along with Max & Cleo, Quiksilver and Velvet, O’Sullivan 58.1 million euros, or $85.5 million. Earnings before interest, taxes, de- O’Sullivan offers young designers such as Piace, whose preciation and amortization reached 4.9 million euros, or $7.2 million, olive top has zippers on the neck and sleeves. The highest- while net profits were 1.7 million euros, or $2.5 million. priced item is a one-shoulder dress with a peacock motif by Tibi for $340. Jeans range in price The deal is Change Capital’s first in almost three years and follows from $52 for Flying Monkey to $164 for AG. its successful turnaround and sale of Jil Sander to Tokyo-listed apparel Delux, a California brand whose PVC handbags could be mistaken for leather, sells braided group Onward Holdings Co. Ltd. for $240 million in September 2008. styles for $130 and others with gold studs, $140. Tia’s sold out of a khaki green safari Collective dress with gold buttons, $48, and sold 20 pairs of sunglasses, priced at less than $30. The average rent in the passage is $255 a square foot, although some recent deals have been done at $309 a square foot, said Blaustein. Retail sales average about $2,200 a square foot. “If the terminal were a mall, it would be one of the most successful in the country,” said Nancy Juicy Promotes Laura Mays Marshall, the MTA’s director of development for Grand Central. “That’s higher than the Shops at Caesars Palace in Las Vegas and the Bal Harbour Shops in Bal Harbour, Fla.” Juicy Couture promoted Laura Mays to senior vice presi- O’Sullivan, who named the stores after her grandmother — a woman who always “dressed,” dent and managing director, North America. even if she wasn’t going out — sees a silver lining to the recession. “The barrier to entry for Mays had been divisional vice president of merchandising at the Liz retail in Manhattan five years ago would have been too much for me,” she said. Claiborne Inc.-owned brand. In her newly created role, she is respon- sible for retail, wholesale and online distribution for the brand, focusing on merchandising, company-owned stores, wholesale and marketing for the Juicy Couture and the new Bird brands. Founders Guez and Kay Acquire Tarrant Mays has been with Liz Claiborne for more than six years in a variety of jobs, first with the Liz Claiborne brand and then at Juicy Couture, Shareholders of Tarrant Apparel $15.2 million. where she has been senior vice president of sales, vice president and Group on Thursday approved a merger that Shares of the company closed trading general manager of accessories and, more recently, divisional vice will take the company private and return it to Thursday at 84 cents. president of merchandising. Mays has overseen the development and the control of its founders, the company said. Guez is Tarrant’s chairman and interim growth of the Juicy Couture accessories business and the positioning Investors representing more than 74 per- chief executive officer and Kay is the com- of apparel as well as the other categories — including children’s wear, cent of the company’s outstanding shares pany’s vice chairman. footwear and pet attire — which make up the Juicy Couture lifestyle voted in favor of the move at a special meet- Under the initially disclosed terms, the brand at wholesale. ing, the Los Angeles-based private label man- deal will merge the manufacturer with Mays is based out of the brand’s New York office and reports to Edgar ufacturer said. Sunrise Merger Co., which will then sell the Huber, president of Juicy Couture. In February, Tarrant agreed to sell its shares not already owned by Guez and Kay to “Laura’s history with the organization, understanding of the brand outstanding shares to an acquiring firm Sunrise Acquisition Co. The two are members and passion for the customer makes her an ideal choice for this role as headed by founders Gerard Guez and Todd and managers of Sunrise Acquisition. Juicy Couture grows and evolves,” Huber said. Kay at the price of 85 cents a share, or about — Matthew Lynch — Julee Kaplan 14 WWD, FRIDAY, AUGUST 21, 2009 WWD.COM For full daily stock changes and more Financial financial news, see WWD.com / business-news. Sears Struggles, Off-Pricers Shine By Evan Clark Sears apparel, limiting gross margin upside,” Asaeda said. line expectations were actually reduced, with the firm now Many analysts remain Sears skeptics. expecting a 7 to 9 percent decline in full-year same-store Sears Holdings Corp. continued to slash “As same-store sales continue to plunge, margins con- sales, versus its earlier forecast of a drop of 6.5 to 9 percent. expenses and shutter stores in the second quarter, but tract and earnings drop, Sears struggles to find its way Year-to-date selling, general and administrative ex- the Hoffman Estates, Ill.-based firm couldn’t overcome while shedding little light on its strategy and results for penses fell to $459.8 million, 8.4 percent below the first weakness in apparel and a 10.3 percent sales drop and its investors,” said Carol Levenson, director of research half of 2008. wound up with an unexpected $94 million loss. at Gimme Credit, in an analysis. In the off-price sector, Ross Stores saw its long-stand- The red ink took Wall Street by surprise and analysts Bill Dreher, an analyst at Deutsche Bank, noted, “It ing emphasis on lower prices pay dividends in the sec- continue to puzzle over chairman Edward Lampert’s plans appears the low-hanging fruit has been captured, and ond quarter. for the company, which is losing market share and faces [Sears] has limited opportunity to improve the funda- Ross’ profits shot up 45 percent to $103.4 million, or tough competition from Wal-Mart Stores Inc., Target Corp. mentals of its business.” 82 cents a diluted share, from $71.3 million, or 54 cents, and numerous other broadlines and specialty retailers. Sears’ losses for the quarter translated to a deficit of 79 a year earlier. Sales for the quarter advanced 7.8 per- Sears’ stock fell 11.9 percent to $65. Among the other cents a diluted share, and compared with earnings of $65 cent to $1.77 billion from $1.64 billion. Inventories fell broadline chains reporting results, The Bon-Ton Stores million, or 50 cents, a year ago. Excluding charges for store 9.1 percent from a year earlier. Inc.’s shares vaulted 29.1 percent to $5.23 as the firm closures and other items, Sears’ losses of 17 cents a share Michael Balmuth, vice chairman, president and said it would be profitable in the second half. And better were still well below the 35-cent profit Wall Street was ex- chief executive officer, said the company’s success bottom-line results fueled the shares of Ross Stores Inc., pecting. Sales fell to $10.55 billion from $11.76 billion. boiled down to its ability to give shoppers bargains which rose 3.9 percent to $46.40, and Stein Mart Inc., up while operating with lower inventories. 7.2 percent to $12.23. Stage Stores Inc.’s stock rose 3.5 And the Pleasanton, Calif.-based off-pricer said the pic- percent to $13.19, despite lower profits. Sears Holdings closed ture is only brightening. “We are optimistic about the impor- The S&P Retail Index picked up 0.4 percent Thursday 22 Kmart stores in tant back-to-school and holiday periods,” Balmuth said. to close at 358.41 while the Dow Jones Industrial Average the quarter. Ross boosted profit projections for the year to $3 to advanced 0.8 percent to 9,350.05 and the S&P 500 reclaimed $3.12 a share, up from the range of $2.62 to $2.72 pre- the 1,000 mark with a 1.1 percent jump to 1,007.37. dicted in May. Sears didn’t hold a conference call to discuss its results. Stein Mart, which also focuses on bargain shoppers, In the company’s press release, W. Bruce Johnson, Sears’ reversed year-ago losses as expense cuts helped over- interim president and chief executive officer, commented, come lower sales. “While the overall retail market remains difficult and its Profits for the quarter tallied $1.5 million, or 4 cents impact is reflected in our results, we continue to take ac- a share, and compared with losses of $8 million, or 19 tions to increase the efficiency of our operations.” cents, a year earlier. Sales fell 7.7 percent to $287.5 mil- The firm, which operates 3,909 stores, decided to close lion from $311.6 million. The Jacksonville, Fla.-based 28 doors in the quarter, 22 of them under the Kmart ban- firm cut SG&A expenses by $18.3 million and inventories ner. Adjusting to reflect the planned closures and other declined by $64 million from a year earlier. items, Johnson said the firm cut its selling and administra- “Although the customer is still very cautious, re- tive expenses by $212 million in the quarter, making for Sears and the other broadline retailers reporting re- sponse to our updated merchandise offering and new cuts of about $1 billion over the last 12 months. At the same sults Thursday all counted Aug. 1 as the end of their fis- marketing strategy is encouraging,” said David Stovall time, Sears spent $134 million on share repurchases. cal second quarters. Jr., president and ceo. Apparel was signaled out as a weakness at the Sears Bon-Ton might have gotten a boost from its more posi- At Stage Stores, inventory management and cost cuts U.S. and Kmart divisions and the company offered few tive outlook, but the regional department store contin- couldn’t stop second-quarter profits from falling. details on its plans, although it did say last week Kmart ued to be dogged by both bottom- and top-line weakness The Houston-based department store operator re- was introducing a preppy apparel line for back-to-school in the second quarter. corded a 5.9 percent slide in net income to $9.1 million, called Thre3. Comparable-store sales fell 12.5 percent at The York, Pa.-based regional department store chain or 24 cents a diluted share, 1 cent above analysts’ esti- the Sears U.S. division and 3.9 percent at Kmart. logged a net loss of $34.8 million, or $2.04 a diluted share, mates. A year ago, the firm’s quarterly profits totaled $9.7 “They always struggle with apparel and I don’t see higher than the loss of $33.8 million, or $2.01, reported in last million, or 25 cents a share. Revenues in the quarter fell that they have turned that sector around,” said Ana Lai, year’s quarter, which included a $17.8 million pretax good- 8.3 percent to $341.7 million from $372.7 million. a credit analyst at Standard & Poor’s. will impairment charge. However, the loss in the 2009 quar- The company reduced SG&A expenses by 5.3 percent Lai said the Sears division was better positioned for ter was 20 cents a share less than analysts had forecast. in the quarter to $83.9 million. the long term than Kmart by virtue of its emphasis on Sales fell 9.5 percent, to $609.2 million from $673.4 Stage said it expects comp sales to drop between 4 appliances, sales of which have been hurt lately by the million, and were down 9.8 percent on a same-store and 7 percent in the third quarter and 7 to 8.5 percent downturn in the housing market. basis. Gross margin improved to 37.1 percent of sales for the full fiscal year. In the second quarter, comps de- Jason Asaeda, a Standard & Poor’s equity analyst from 35.9 percent in last year’s quarter. clined 10.7 percent. who downgraded Sears stock to “sell” from “hold” But Bon-Ton drastically reduced its expectations for a The retailer projects a third-quarter loss per share Thursday, said second-quarter results were hurt by ag- full-year loss — to a range of $2.50 to $3.70 from the range of between 21 cents and 29 cents on revenues between $318 gressive clearance markdowns. $3.40 to $4.30 provided at the conclusion of the first quarter. million and $328 million. For the year, it issued earnings “While we see [Sears] doing a good job of improving The revision implies second-half profits of $1.02 to $2.22 a guidance of between 47 cents and 65 cents a share on net its cost structure through expense reductions and store share based, in part, on expectations of $80 million in sell- sales of $1.42 billion to $1.44 billion. closures, we also see promotional pricing, particularly on ing, general and administrative expense reductions. Top- — With contributions from Arnold J. Karr and Matthew Lynch

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

5.70 4.75 Bon-Ton (BONT) - 808238 5.23 +29.14 25.30 22.50 Citi Trends (CTRN) 20.0 2107888 22.92 -18.81

0.55 0.49 Charles & Colvard (CTHR) - 10530 0.54 +12.45 66.81 63.83 Sears (SHLD) 70.9 8232794 65.00 -11.88

45.17 42.48 Gymboree (GYMB) 13.0 3774635 44.87 +11.90 17.84 16.35 Cato (CTR) 14.9 592300 17.16 -4.98

2.25 1.75 Frederick’s of Hollywood (FOH) - 290987 2.04 +11.48 32.11 29.56 Children’s Place (PLCE) 11.0 1765089 30.66 -3.95

0.12 0.12 Cygne Designs (CYDS) - 105000 0.12 +9.09 29.00 26.59 Buckle (BKE) 11.5 3367974 26.84 -3.90

0.29 0.25 NexCen (NEXC) - 68800 0.27 +8.00 3.70 3.55 American Apparel (APP) 73.4 139378 3.58 -3.24

2.21 2.03 Quiksilver (ZQK) - 987330 2.20 +7.84 8.62 8.36 R.G. Barry (DFZ) 11.9 8180 8.56 -3.06

3.89 3.46 Liz Claiborne (LIZ) - 5204135 3.78 +7.69 7.40 6.80 Sally Beauty (SBH) 14.6 1102643 7.06 -3.02

11.46 10.61 Kimco Realty (KIM) - 6188842 11.41 +7.34 48.75 45.00 French Connection * (FCCN:L) - 67604 48.50 -3.00

12.37 11.41 Stein Mart (SMRT) - 509115 12.23 +7.19 4.92 4.75 Caché (CACH) - 46044 4.75 -2.86

* Editor’s note: European stocks are quoted in the currency of their principal exchanges. Shares on the London Stock Exchange are quoted in pence, Richemont and The Swatch Group are quoted in Swiss francs and Hennes & Mauritz is quoted in Swedish kronor. All other European stocks are in euros. WWD, FRIDAY, AUGUST 21, 2009 15 WWD.COM Prom Tops the Bill at Dallas Market Safety Commission Rules By Holly Haber A prom suits and one-shoulder dresses. Many dress buyers wore boyfriend jeans as they On Lead Testing for Textiles DALLAS — Prom was a bright spot in from placed additional orders for the style, an otherwise challenged market Aug. Scala. as well as snug denim leggings. By Liza Casabona 13 to 16 at FashionCenterDallas. Annette Ochoa, buyer for Joe Mothers and daughters still spend Brand in Laredo, Tex., wrote her first WASHINGTON — The Consumer Product Safety money on a new dress for the annual order for dresses by Studio M, a divi- Commission has exempted textiles from lead test- ritual, said vendors and retailers, sion of Max Studio. The jersey, sweat- ing requirements. and business reflected that opti- er and cocktail styles were slated to The panel, which posted the decision on its Web mism as the Dallas Market Center ship by the middle of next month and site Thursday, said it determined textile products cut the ribbon on its new cluster of wholesale for $60 to $75. typically do not contain levels of lead that are harm- prom showrooms. “Everyone wants something styl- ful to children and, therefore, don’t need to be sub- “I am not planning [prom] down ish and lower price,” Ochoa said. ject to the law’s testing requirements. — this spring it was fine,” said Kerry “These will fill a void for something The federal Consumer Product Safety Miller, buyer for Sharpe Dry Goods at a price with a sophisticated look. Improvement Act, which went into effect last year, in Pryor, Okla. “I’m shocked when We want to get holiday in early — in significantly lowered the lead limits for all products a junior high girl spends $500 for a September and early October — so designated for children aged 12 years or younger. dress, but they do. Their mothers we have longer selling.” The requirements will be phased in over a period of don’t even blink.” Yoni Segal, co-owner of Lucca in several years, eventually decreasing to a maximum Girls in small-town America go Oklahoma City, said business was of 100 parts per million by August 2011 from the cur- for big tulle Cinderella dresses and “solid, not exciting,” as he shopped rent 300 parts per million. Scarlett O’Hara styles with dramatic for his five contemporary stores. Natural fibers including cotton, linen, jute, silk

tucked skirts, Miller said, motioning COULTER NAN BY PHOTO Along with shredded, skinny and gold and wool, as well as manufactured fibers such as to a sapphire taffeta number and a studded jeans by Denim of Virtue, rayon, acetate, polyester and nylon, are all exempt metallic ice blue crinkle concoction slow, and vendors reported more key lines included Hazel, C. Luce, from testing requirements, according to the commis- by Scala. stores were financing their business- Diesel, Seven For All Mankind, Miss sion. Exceptions to the decision include fabrics that Slinky jeweled styles and short es with credit cards as banks and Me and Current/Elliott. have decals or prints added to them after the dyeing baby dolls were also popular amid a factors limited credit. In addition, an “I’m trying to get discounts at the and finishing process. Children’s leather items with vibrant palette featuring coral, pink, increasing number of resources re- bottom of invoices to pass on to my pigment-based coatings must also be tested. yellow, turquoise, plum and lime, quested deposits from buyers in an customers,” Segal said. “I shop with The interpretation of the testing requirements plus bold floral and animal prints. effort to prevent refusal of delivery. credit cards to be careful and not buy for textiles was one of a handful of major issues the “I think we’ll probably beat last “A lot of people are canceling or- more than I need.” industry was watching closely as the product safety year’s figures, and we had a good ders, and the vendors are nervous The Johnny Was showroom, full act rolled out, said Stephen Lamar, executive vice year last year,” said Marty Boikess, and most at risk,” said sales represen- of Swiss-style embroidery on cotton president of the American Apparel & Footwear whose Sam Sales showroom repre- tative Scott Harner. “Nobody is over- and linen tops, and vintage-print Association. However, he added that there are “still sents Mori Lee. “Of my major [inde- cutting anymore. People are nervous silk tops and dresses, was busy and a zillion questions out there.” pendent] stores, 5 to 7 percent have to write reorders. If they sell it, they had a “good market,” said Melanie They include how testing requirements will be increased their buy.” are happy and want to move on.” Jennings, showroom manager. applied to nontextile components used in apparel Cindy Morris, chief operating of- Most buyers focused on deliv- Tiffany Foster, owner of items. Further clarification from the commission is ficer of the Dallas Market Center, eries through the end of the year, Goosefeathers in Corpus Christi, expected on how lead testing requirements for com- said, “The official opening of the fully though some placed colorful spring Tex., spent hours there writing a full ponents like snaps, fasteners and zippers will be ap- leased prom and special occasion looks for delivery in 2010. Priorities two-page order for February and plied to apparel items. neighborhood was a market highlight, included jewelry, handbags, tops, March deliveries of the company’s “Common sense dictates that only those compo- as well as the continued upswing of dresses, leather jackets and denim. detailed looks. She said her oil- and nents that cannot receive a determination would attendance by new buyers.” The Eighties influence showed up in gas-rich customers were “inching require testing,” said commission chairwoman In general, however, traffic was banded tunics, slouchy jackets, jump- back” to shopping. Inez Tenenbaum.

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For more career opportunities log on to WWDCareers.com. Call 1.800.423.3314 or e-mail [email protected] to advertise. Spaces PATTERNS, SAMPLES, CAD ARTISTS SALES ASSISTANT COMMERCIAL PRODUCTIONS Needed Freelance Cad Artists At Once Well established clothing manufactur- Full service shop to the trade. must be expert at PhotoShop. er is seeking individuals who can work REAL ESTATE Fine fast work. 212-869-2699. Email: [email protected] in fast paced office and multi task. Candidates must be a team player and fast learner with great communication and computer skills. Assistant buyer experience is a plus! We offer benefits. Handbag Designer Email your resume to Seeking a self motivated creative Design- [email protected] Showrooms & Lofts er for a newly acquired license. candi- or fax to: 212-395-9775. EOE. BWAY 7TH AVE SIDE STREETS date must be energetic & have exp work- Great ’New’ Office Space Avail ing w/overseas offcs & factories. Resumes: ADAMS & CO. 212-679-5500 [email protected]

ASSISTANT DESIGNER Assist in the design process of private PATTERNMAKER label casual sportswear for the young Urban Outfitters Inc. is a Philadelphia- missy and jr markets. Research fabrics based retailer, home to the lifestyle brands, Urban Outfitters, Anthropologie, & trends, assemble presentation boards, prepare tech packs, review, + Free People. We are currently seeking spec & control all samples for buyer a skilled patternmaker to join our JNCO JEANS PATTERN/SAMPLES presentation & production. Must be home office technical design team. successfully launched its new contem- Garment center location. Professional detail oriented, 2-3 years experience in Work in Lectra to create patterns for porary premium denim line for /Reliable Quality. Men & women all style. related field, ability to prioritize, excellent all categories of product, including mid-tier retailers and department knits + wovens, men’s + women’s, stores. JNCO seeks a Sales Agent / Low Cost. Small production. 212-563-3331 flat sketching skills, great organizer & communicator, Photoshop, Illustrator tops + bottoms. Candidates should also Showroom for the East Coast territory have excellent draping skills. Competitive with retail expertise and relationships. PATTERNS, SAMPLES, & Outlook a must. Email cover letter with your resume explaining why you salary plus relocation. Visit us on the Capable to execute the sales strategy PRODUCTIONS are best suited for this job to : web at www.urbn.com or apply by and able to drive sales. Inquiries may All lines, Any styles. Fine Fast Service. [email protected] sending your resume to: be made to 323-881-3267 or emailed to: Call Sherry 212-719-0622. [email protected] [email protected] intoStep the spotlight PHOTO BY DELPHINE ACHARD

SPRING 2010 COLLECTION SEASON NEW YORK LONDON MILAN PARIS

DAILY COVERAGE IN PRINT & ONLINE: SEPTEMBER 11 – OCTOBER 9

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