Channel Surfing

s MEN’S: Brooks FINANCIAL: s Brothers unveils smaller Cost cutting BEAUTY: store format, page 9. boosts retailers Mariah from Wal-Mart Carey’s FASHION: A record to Urban new number of shows at Outfitters, Forever s Copenhagen Fashion page 3. fragrance, s Week, page 13. page 4.

Women’s Wear Daily • The Retailers’ Daily Newspaper • August 14, 2009 • $3.00

WwDFRIdayBeauty Channel Surfing Lines continue to blur in the beauty world as beauty’s $1 billion brand, Cover Girl, builds out the Blast franchise with Blast Boutique, a collection of color cosmetics targeting the department store fashionista. Meanwhile, beauty’s former indie star, Hard Candy, reinvents itself for the masses with exclusive distribution to Wal-Mart. Each looks to generate $50 million in first-year sales. For more, see page 6.

Brighter Look for B’way: Bloomingdale’s Revamps Main Floor of Flagship By David Moin and Pete Born Amid the nation’s deepest slump since The Great Depression, Bloomingdale’s has come up with a bold response — rebuilding the entire 60,000-square-foot main floor of the Manhattan flagship. The department store is just two months from completing the project and unleashing a barrage of advertising and events touting 59th Street as “the biggest makeover in NYC.” There will be 525 events in cosmetics alone through December. According to sources, the renovation cost $45 million to $55 million including vendor contributions, and vendors are hoping for 10 to 20 percent sales gains as a result. “It’s a game-changer,” said Michael Gould, Bloomingdale’s chairman and chief See Bloomingdale’s, Page 10 PHOTO BY GEORGE CHINSEE; STYLED BY DANILO MATZ DANILO GEORGE CHINSEE; STYLED BY PHOTO BY 2 WWD, FRIDAY, AUGUST 14, 2009 WWD.COM Lauder Net Drops Due to Retooling By Molly Prior tional growth, gaining 9 percent to $1.3 billion. The firm continues to eye international ex- For a company in the business of pansion, noting that MAC Cosmetics is slated WwDfridayBeauty offering newness, the Estée Lauder Cos. Inc. to open some 50 doors globally and Origins will GENERAL ushered in a windfall of change in fiscal 2009, enter China in March. Bobbi Brown is gearing Bloomingdale’s is undergoing “the biggest introducing a new management team and a reor- up to launch in Poland next year. International s 1 makeover in NYC” by totally rebuilding the entire ganized company structure and culture. sales reached 59 percent of revenue in the quar- 60,000-square-foot main floor of the flagship in The latter two efforts stem from the beauty ter, boosted by softness in the U.S. market. firm’s four-year restructuring plan designed to Freda reiterated that Lauder will focus on time for an October opening. jump-start profitable growth and extend its glob- “fewer, bigger ideas in high-priority areas,” add- Five retailers filing second-quarter results al reach. Charges related to the restructuring ing the company has expanded its research-and- 3 Thursday all exceeded or met analysts’ expecta- contributed to a loss in the fourth quarter, but development efforts in its Paris-based “innova- tions despite declines in their same-store sales. the company remained profitable for the year. tion center,” and plans to do the same in Asia. Nanette by Nanette Lepore will be available at For the quarter ended June 30, losses totaled The beauty firm also is fine-tuning its con- 4 $17.9 million, or 9 cents a diluted share, com- sumer research, which Freda said will help di- fragrance counters in about 650 specialty store pared with year-ago earnings of $120.2 million, rect R&D and marketing decisions. doors, including Neiman Marcus, Nordstrom and or 61 cents a share. Excluding restructuring At the same time, Lauder has begun to do Sephora, next month. charges, earnings per share were on par with the heavy lifting to improve underperforming 5 Parfums Lolita Lempicka will introduce its first the 20 cents Wall Street expected. Sales for the segments of the business. For instance, Freda spicy floral women’s scent, Si Lolita, beginning three months fell 16.4 percent to $1.68 billion said the company has cut Aramis and Designer this summer. from $2.01 billion. Fragrances’ number of stockkeeping units by 50 Elizabeth Arden will roll out Mariah Carey’s percent from fiscal 2007 levels. 8 It also plans to reemphasize second fragrance, Forever, to about 2,000 classic scents and focus on department and specialty store doors. “fewer, bigger” launches. In a 9 Sales at specialty stores rose a seasonally similar move, Lauder is refo- adjusted 0.6 percent in July compared with cusing Darphin on skin care June, while department stores fell 1.6 percent, as it pulls the brand out of the according to the Commerce Department. makeup and fragrance cat- egories. Freda said the actions 9 MEN’S: Brooks Brothers opens its first “boutique,” Lauder is taking to address a 4,000-square-foot shop in Rockefeller Center that underperforming brands and could be the first of many smaller-size stores. segments include aggressive 14 Despite weak market conditions, Hong Kong- cost cutting, exiting certain based sourcing giant Li & Fung Ltd. posted categories or countries — as double-digit profit growth in the first half. in the case of Darphin — and, Classified Advertisements...... 15 in some cases, relaunching the brand. The company maintains To e-mail reporters and editors at WWD, the address is [email protected], using the individual’s name. it may ultimately decide to WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2009 shed underperformers. FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. Turning to the upcoming hol- VOLUME 198, NO. 34. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one iday selling season, the company additional issue in January, May, October, November and December, two additional issues in March, April, June and William Lauder said it anticipates sales to be flat August, and three additional issues in February and September) by Fairchild Fashion Group, which is a division of Advance and Fabrizio Freda Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Condé in comparison with last year. Nast Publications: S. I. Newhouse, Jr., Chairman; Charles H. Townsend, President/CEO; John W. Bellando, Executive Vice Lauder will continue to at- 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 For the year, earnings dropped 53.9 percent to tempt to cater to the shopper’s preoccupation Tax Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian addresses to: P.O. Box 503, RPO $218.4 million, or $1.10 a diluted share, on sales with value. “The consumer is actively respond- West Beaver Cre, Rich-Hill, ON L4B 4R6 POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box that declined 7.4 percent to $7.32 billion. ing to value messages,” said William Lauder. “Is 15008, North Hollywood, CA 91615–5008. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or Shares of the beauty firm gained 16 cents, an there one magic price point? No. But, there are visit www.subnow.com/wd. Please give both new and old addresses as printed on most recent label. Subscribers: If the increase of 0.4 percent, to $37.80 in New York magical price levels, which we are continuing to Post Office alerts us that your magazine is undeliverable, we have no further obligation unless we receive a corrected focus on and making sure consumers have access address within one year. If during your subscription term or up to one year after the magazine becomes undeliverable, Stock Exchange trading Thursday. you are ever dissatisfied with your subscription, let us know. You will receive a full refund on all unmailed issues. First copy The company continued its belt-tightening, to price points under $30, under $50, under $75. of new subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production squeezing out $250 million in costs this year as it “We are seeing some caution from the con- correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. For permissions and reprint requests, please call 212-630-4274 or fax requests to 212-630-4280. Visit us online at www.wwd.com. To subscribe to other put a freeze on hiring and salary increases and sumer, but certainly not the reticence she had Fairchild magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our subscriber list available pruned staff. Lauder indicated by December it from the late fall through the early spring 2009,” to carefully screened companies that offer products and services that we believe would interest our readers. If you do not will have notified about two-thirds of the 2,000 he added. “She is coming back, but she is re- want to receive these offers and/or information, please advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273. WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR THE RETURN OR LOSS OF, OR FOR DAMAGE OR ANY employees expected to be affected by the firm’s sponding to stronger value propositions.” OTHER INJURY TO, UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, plan to trim its workforce by 6 percent. Freda said the company is working to reframe PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, “We’ve learned to succeed with less,” said ex- the concept of value. He told WWD, “Today, the PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED TO DO SO BY WOMEN’S WEAR DAILY IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER ecutive chairman William Lauder. He was presid- consumer is seeing value in a simple way: pro- MATERIALS SUBMITTED MUST BE ACCOMPANIED BY A SELF-ADDRESSED STAMPED ENVELOPE. ing over his last earnings call before ceremoni- motions or price cuts. Our challenge is to com- ally handing over that baton to Fabrizio Freda, municate it in other ways.” He pointed to mini who officially took over the helm as president and facials at the Origins’ counter and signage dis- DAILY chief executive officer from Lauder on July 1. playing price as examples. For the year, by category, sales of skin care Looking forward, the company expects first- — Lauder’s primary area of focus going forward quarter net sales to decrease by 2 to 5 percent in QUote It’s a game changer…. — declined 3.7 percent to $2.89 billion on a re- constant currency. For fiscal 2010, Lauder fore- “ ported basis; makeup sales dipped 5.6 percent casts net sales growth of flat to 2 percent. It’s like a brand new store. to $2.83 billion; hair care sales decreased 5.8 Referring to Lauder’s strategic moves over ” percent to $402.4 million, and fragrance sales the last year, Freda said: “The level of activ- — Michael Gould, Bloomingdale’s chairman and chief executive officer, slid 19.6 percent to $1.15 billion. ity that is going on strategically — in terms of on the store’s remodeled ground floor. Page one. By region, the company reported annual sales restructuring, resizing the organization, elimi- in the Americas fell 7.8 percent on a reported nating all this cost, taking inventories down in basis to $3.42 billion. In Europe, the Middle East a dramatic way, refocusing the portfolio in the CORRECTION and Africa, sales declined 13.2 percent to $2.61 long term — those are activities that require a billion. Asia-Pacific continued to drive interna- lot of cultural change.” The belt shown here is from Leatherock. The resource was incorrect in a caption on page 9, Monday.

Inside TODAY ON Escada Files for Insolvency the Prada Transformer. BERLIN — Escada AG officially filed for insolvency at the Munich district court Thursday. The .com German fashion house said it would make the move after a bond exchange offer failed to gain suf- WWD ficient support this week, undermining its financial rescue plan. German law does not have an equivalent of Chapter 11, and planned insolvency is the closest proce- • Additional photos of the dure to bankruptcy. The court has appointed Christian Gerloff as interim insolvency administrator. Prada Transformer’s new shape Escada employs 2,300 people, 600 of them in Germany. The fashion house noted the company’s • More images of subsidiaries both in Germany and abroad are not affected by the insolvency proceedings at this time. However, in individual cases where subsidiaries are guaranteeing the fulfillment of the 2005/2012 bond, Bloomingdale’s new ground floor, which applies to the U.S., U.K. and Escada Asia Ltd., Escada said “restructuring and/or insolvency pro- Brooks Brothers’ new store and ceedings for these subsidiaries might be considered under the application of national laws.” Copenhagen Fashion Week Escada’s share price has been in free-fall this week, losing more than 70 percent of its value in • Beauty Roundup: Aug. 14, 2009 the last three days. Shares of Escada Thursday declined 0.02 euros, or 2.9 percent, to close at 0.68 euros, or 96 cents at current exchange. • Online this weekend: Week in — Melissa Drier Review and Story of the Week WWD, FRIDAY, AUGUST 14, 2009 3 WWD.COM Retailers Beat Muted Profit Expectations By WWD Staff Five retailers filing second-quarter re- sults Thursday, including the world’s largest, all ex- ceeded or met analysts’ expectations despite declines in their same-store sales. In a clear display of the importance being placed on inventory and balance-sheet management in a period of historically weak consumer demand, only one of the reporting companies — Wal-Mart Stores Inc. — posted an increase in earnings, and its 1.4 percent pickup came despite a 1.2 percent comparable-store sales decline, excluding fuel, after the first quarter in which it didn’t report its results monthly. Muted expectations also put something of a sheen on Thursday’s results. Wal-Mart’s higher profits exceeded consensus estimates, as did the lower earnings at Kohl’s Corp., Urban Outfitters Inc. and American Apparel Inc. Late Thursday, Nordstrom Inc. came in as expected.

Wal-Mart Wal-Mart’s net income grew to $3.45 billion, or 88 cents a share, 2 cents above expectations and at the high-end of its own guidance of 83 to 88 cents a share. Revenues slid 1.4 percent to $100.91 billion. “Even with lower sales than expected, our comp- store sales outperformed the retail sector,” Mike Duke, Urban Outfitters is eschewing basics in favor of fashion. president and chief executive officer of Wal-Mart, said. “We managed our operations in a disciplined manner and delivered earnings growth on top of last year’s enues declined 5.4 percent to $2.23 billion from $2.36 The firm’s shares ended the day ahead 3 percent growth. We’ve accelerated everything we do in terms of billion as sales fell 6.2 percent to $2.15 billion and credit at $29.06. efficiency and operations and are widening the gap be- card income gained 20.8 percent to $87 million. tween ourselves and our competitors.” Same-store sales were down 12.3 percent at full-line American Apparel The company noted inventory grew at half the rate stores and up 0.8 at Nordstrom Rack. Direct sales were American Apparel lowered full-year guidance Thursday of sales during the quarter. Eduardo Castro-Wright, vice up 3.5 percent. after reporting a 34.3 percent slide in second-quarter chairman of Wal-Mart U.S., said the company achieved a Sales at the company’s anniversary event were down 6.6 net income. 5.8 percent year-over-year reduction in inventory, about percent, better than the Seattle-based retailer expected. For the three months ended June 30, the maker of $1.4 billion less than a year ago. He said lower invento- Dresses and jewelry were cited as top performers at trendy basics said it recorded a profit of $4.5 million, ry not only provides an improved shopping experience, full-line stores and Nordstrom Direct. or 6 cents a diluted share, compared with net income but improves gross margins, shrinkage and markdowns. Noting improvement “over the last couple of months,” of $6.8 million, or 10 cents, in the year-ago quarter. Gross margin added 109 basis points from last year’s Blake Nordstrom, president, said on an afternoon con- Revenue grew 2.3 percent to $136.1 million from $133 second quarter, he said. ference call, “Our inventories today are clean and in million in 2008. Analysts surveyed by Yahoo anticipated “They’re showing dramatic improvement there,” said line, positioning us well for the second half of the year.” EPS of 3 cents on revenues of $140.2 million. Bill Dreher, broadlines analyst at Deutsche Bank. “Now He called the current mix “balanced with fashion, Same-store sales slid 10 percent while wholesale vol- there’s a rationalization in the store. They’re trying to get quality and sharp price points.” ume slid 17.3 percent to $35.5 million. the adjacencies right, putting cosmetics next to jewelry, the Peter Nordstrom, executive vice president and presi- “We have to continue to grow our top line from a way women like to shop. It’s like what you’d see in a depart- dent of merchandising, said trends in its women’s busi- manufacturing efficiency point of view,” Dov Charney, ment store. As far as new brands, they have Miley Cyrus & ness are improving. Additionally, he noted premium ceo, said on the company conference call regarding the Max Azria, which is nice, but we’re not seeing a migration of denim “has held up pretty well. I think where vendors Los Angeles-based firm’s vertical operations. “We are department store brands to the mass channel. They might have been able to deliver newness, it’s worked.” set up to do more business than we are doing. We have go to Kohl’s and [J.C.] Penney and maybe Target.” Including its first Manhattan store, scheduled to enough infrastructure to run an $800 million business.” The low-end of Wal-Mart’s full-year earnings guid- open next spring, the company plans 12 new Rack units Despite difficult market conditions, Charney is also ance was raised to $3.50 from $3.45 while the height next year and is finalizing plans for some others, Blake planning to increase American Apparel’s ad spending in of the range remained at $3.60. The company’s shares Nordstrom noted. the second half of the year. “We need to get back into the moved up 2.7 percent to $51.88 Thursday. The company raised earnings expectations for the game of advertising a bit more than we have during the year to $1.50 to $1.65 a share from earlier guidance of first and second quarter,” he said. “Advertising costs are Nordstrom $1.25 to $1.50. Same-store sales are expected to decline down so we want to cherry-pick a few things.” Matching Wall Street estimates, Nordstrom said net in- 9 to 12 percent. Shares were up 1.2 percent to $29.76 in The company reduced full-year guidance to a range of a come for the three months ended Aug. 1 fell 26.6 percent trading before the earnings announcement. loss of $1 million to a profit of $4 million from earlier guid- to $105 million, or 48 cents a diluted share, from $143 ance of a profit of between $8 million and $15 million. million, or 65 cents, in the year-ago quarter. Total rev- Urban Outfitters However, it still expects to open 25 to 30 stores this year Urban Outfitters posted a profit of $49 million, or 29 and has opened 20 units and close three to this point. Wal-Mart has high cents a diluted share, 3 cents above consensus estimates American Apparel’s shares rose 2 percent to $4.00 hopes for its new but 14 percent below the $57 million, or 33 cents, earned prior to the after-market earnings announcement. Miley Cyrus & Max in last year’s quarter. Azria collection. Net revenues inched up 1 percent to $458.6 million Kohl’s Corp. from $454.3 million, driven by a 17.2 percent increase in Kohl’s Corp. maintained relative balance in the second direct sales to $70.9 million. Net store sales dipped 1 per- quarter, with profits down 3 percent on a 2.2 percent cent to $361.8 million and wholesale sales slid 7.5 percent rise in sales, but the value-oriented retailer said it was to $25.9 million. Same-store sales declined 6 percent. ready to pick up market share and additional stores Women’s accessories led the way at Anthropologie, from its faltering competitors. while women’s apparel was strongest at the Urban “We believe there will continue to be more consoli- Outfitters division. dation, which may open up more real estate opportuni- “The customer is seeking fashion and there’s practically ties, and our balance sheet and cash flow will allow us no evidence of price elasticity,” said Glen Senk, ceo of the to act aggressively if that happens,” said Kevin Mansell, Philadelphia-based specialty retailer. On the other president and chief executive officer, on a conference hand, Senk said it’s a buyer’s market for basics and call with Wall Street analysts. He called Kohl’s first-half price is the bottom line for customers. market share gains “significant.” Urban’s second-quarter operating margin The 1,022-door chain will open 37 stores next month, of 17.1 percent “reflects the relative strength of mostly in former Mervyns locations. By the end of Urban’s product and its operating discipline,” October more than one-third of the chain will be new or said Roxanne Meyer, a retail analyst at UBS, in a remodeled over the last three years. Current plans for research note. next year include another 20 to 25 new stores. Sales at Urban Outfitters fell 6.7 percent to $177.1 In its continued expansion, Kohl’s is a retail aberration. million and dropped 8 percent on a comp basis, while Last year, 6,913 retail doors were shuttered and the indus- Anthropologie’s revenues grew 4.5 percent to $173.1 try is on track to close another 4,600 stores this year, ac- million despite a 4 percent comp dip. While Free cording to the International Council of Shopping Centers. People’s retail revenues grew 18.8 percent to $9.2 mil- Kohl’s has also expanded on the merchandising front, lion, same-store sales were down 16 percent and whole- with the relaunch of the Dana Buchman brand and the sale revenues dropped 13 percent. Yet Senk said it introduction of Hang Ten. The chain’s marketing ham- “outperformed most contemporary brands on the sell- mers home its focus on lowering prices. ing floor.” He also said Leifsdottir, Anthropologie’s new In the current quarter, the Menomonee Falls, Wis.- wholesale collection, had revenues of $2 million, “far based firm said its sales would range from down 1 per- exceeding expectations.” cent to up 1 percent and lead to earnings of 40 cents to Senk said the company is planning on a minimum of 44 cents a diluted share. While the profit guidance falls 100 stores in Europe, “and probably more,” between the below the 47 cents analysts projected, Kohl’s shares ad- Urban and Anthropologie nameplates. vanced 0.2 percent Thursday to $52.39. Beauty Report Double

4 WWD, FRIDAY, AUGUST 14, 2009 The Beauty Report Mariah Carey: Betting on Forever Mariah Carey takes her happiness seriously. While executives declined to discuss sales pro- That’s why she has named her new women’s scent jections, industry sources estimated that Forever “Forever.” It’s due out in September. would do upwards of $35 million at retail in its “I am in a wonderful place right now, surrounded first year on counter. Sources also estimated Arden by all the things I love, and Forever captures this mo- would spend at least $10 million on advertising ment in time,” said the entertainer, whose first scent, and promotion. M by Mariah Carey, launched in September 2007. Print advertising, shot by Michael Thompson “When we work with celebrities, we aim to put and featuring Carey, will break in October fash- together a project which is representative of their ion, beauty and lifestyle magazines, including Elle, life,” said Ron Rolleston, executive vice president for Mariah Vogue, Glamour and In Style. A TV campaign, which global fragrance marketing at Elizabeth Arden, of the Carey’s also features Carey, is slated for the holiday sea- new women’s launch. “Mariah’s happily married, has new scent, son. As well, vials on card, scented strips and other a movie coming out in November, which already did Forever. scented pieces are expected to deliver upwards well at Sundance, and she is releasing a new album of 49 million scented impressions, noted Noreen in September. She’s got a lot of joy and optimism in Dodge, senior vice president, fragrance, global her life right now, and we wanted to express that in brand development for Elizabeth Arden. a fragrance.” In addition to a dedicated Web site, Perfumer Olivier Gillotin of Givaudan worked MariahCareyBeauty.com, a strong social media with Carey to create the modern opulent floral, campaign will also be part of the campaign, Dodge which has top notes of neroli, lotus blossom and said. Arden plans MariahCareyBeauty pages on dewy green apple; a heart of tuberose and garde- Facebook, MySpace and Twitter, hoping to leverage nia, and a drydown of white musk and exotic woods. Carey’s 1.7 million followers on Twitter and 700,000 “When I first met with Mariah, I was inspired to cre- Facebook fans (Carey also has 132 fan separate fan ate a glamorous, opulent floral,” said Gillotin. “I pages on Facebook.) Arden is also working with so- wanted the scent to be radiant but to also evoke a cial media sites Imeem, Pandora and VideoEgg to warm sensuality. This fragrance has iconic white flo- further drive business. Pandora will create Carey rals, which convey a powerful message of feminine fragrance-branded backgrounds for users to see sensuality and classic glamour.” while listening to the singer’s music, while Imeem The collection includes eau de parfum in three will feature an exclusive Forever-themed playlist sizes — 1 oz. for $42, 1.7 oz. for $55 and 3.3 oz. for $65 customized by Carey on its home page. VideoEgg — as well as a 0.5-oz. parfum, $250, and a 6.8-oz. body lotion, $28. will feed into Facebook, MySpace, Twitter and YouTube in an effort to drive traffic In the U.S., the scent will be available in about 2,000 department and specialty to MariahCareyBeauty.com. DailyCandy will offer a “twitter-to-win” sampling pro- store doors, including Macy’s, Dillard’s and Belk’s. gram for the fragrance, and Sugar Inc. plans a customized Carey page on its site and The bottle, inspired by Carey’s love of the art deco style, is clear crystal with a a sweepstakes to win the scent. gold band around the top. Outer packaging is bright pink with a metallic trim. — Julie Naughton New Lepore Scent to Roll Out in September Vapour Beauty to Launch Nanette Lepore’s style is about to hit a runway of a different sort: Kevyn Aucoin Beauty co-founder Eric Sakas is hoping specialty store fragrance counters. to take natural to a new level with the launch of Vapour Organic In September, the designer will launch her new fragrance, Nanette by Nanette Lepore. Beauty, a new prestige beauty company and its eponymous certified “This is the grown-up Nanette Lepore fragrance,” said the designer during an interview in her organic color cosmetics collection. Manhattan showroom. “My fashion has evolved over the years, and so have I. I wanted to create Sakas is billing the new range as the next generation of min- a fragrance which symbolizes my current design aesthetic. This fragrance is intended to be the eral makeup. signature Nanette Lepore scent — it’s the one I will still be putting on, over and over, next year “We wanted to create high-performance prestige organics,” said and the year after that.” Sakas. “The concept of the line is to keep a tight classic approach to Lepore worked with perfumer Anne Flipo of International Flavors & Fragrances to create color rather than trend.” the amber-tinged scent. It opens with top notes of spicy pink pepper, glazed rose petals and The venture marks the first color cosmetics partnership for the neroli, followed by a heart of rose absolute, violet and muguet, and a drydown of amber, in- seasoned beauty veteran since Kevyn Aucoin Beauty, which Sakas cense and warm cedarwood. The touch of violet, said the designer, is a wink at her 11-year-old ran as creative director and partner until he left the company in daughter’s name. 2006. Now Vapour’s co-founder and director of beauty, Sakas, whose “Nanette’s creative process lends itself to tenure also includes a one-year stint as the director of color at fragrance very well,” said Ron Rolleston, ex- The Nanette ad. Philosophy, has teamed up with other Vapour co-founders Krysia ecutive vice president of global marketing Boinis, a botanical expert who will serve as Vapour’s chief execu- for Elizabeth Arden, the company that holds tive officer, colorist and abstract artist Kristine Keheley and Vapour Lepore’s scent license. “This scent is original, chief financial officer Greg Martin. and there is a lot of attention to detail. We’re Launching this week, Vapour’s line of chemical-free, 70 per- very optimistic about its prospects.” cent certified organic treatment-oriented products, offers items The collection includes eaux de parfum in for the face, eyes and lips as well as two skin care products. The three sizes, a 0.25-oz. rollerball for $18.50 and 30-stockkeeping-unit collection is designed to achieve rich mineral 1-oz. and 2.5-oz. sprays, $48 and $68, respective- color and healthy, younger-looking skin in a weightless texture and ly. A 3.4-oz. lotion, $40, also will be offered. breathable finish. Based in dry plant oils, the range is also infused As might be expected from a designer, with botanicals designed to provide antioxidants and moisture tar- Lepore actually began designing the bottle — geted to specific areas of the face. made of weighty lead crystal with a faceted “We start with mineral pigments, but suspend them in a 70 per- cap — before beginning to develop the juice. “I cent organic base, which allows minerals to move with your skin,” saw a beautiful vintage fragrance bottle in an said Sakas. “It’s meant to replicate a youthful glow and offer a light- antique store in Florence,” said Lepore. “The reflecting look.” shape, to me, captured the romance of being in Industry sources estimate the line could bring in anywhere from Italy — and it inspired the whole project.” The $3 million to $5 million in first-year retail sales. textured outer box contains a surprise once Launching on the brand’s Web site Aug. 14 and shopnbc.com Aug. opened: a signature Lepore pattern. 15, Vapour will introduce makeup items including a luminous founda- The scent will be available in about 650 spe- tion, perfecting concealer, eye-color treatment, lipstick and lip gloss cialty store doors, including Neiman Marcus, as well as a multiuse blush Nordstrom and Sephora. that can be used on lips, While Lepore and Rolleston declined to dis- Part of the Vapour line. cheeks and eyes. The range cuss sales figures and advertising spending, in- also includes an antiaging dustry sources estimated that the scent would skin perfector and lip con- do about $5 million at retail in its first year on ditioning treatment. Items counter, and that about $1 million would be in the range retail from spent on advertising and promotion. $16 for Vapour’s Lux Lip Advertising, shot by Poppy de Villeneuve, is Conditioner and Mesmerize breaking in November fashion, beauty and lifestyle magazines. The visual is of a pensive model in Eye Color Treatment, to $44 a floaty Lepore top. “It’s intended to be a personality caught in a private moment,” said Lepore. for its Stratus Instant Skin As well, a significant online campaign — involving Style.com, Sugar Inc., Twitter and many Perfector. other components — is planned, said Rolleston. While initial distribu- Despite the economic climate, Lepore is optimistic about fall business. “It’s a challenging time, tion is online, Sakas says but often out of challenge comes the best work,” she said. “With apparel, with fragrance — there’s they are “in talks” with a not room for anything that isn’t special. It results in a better product offering.” national beauty retailer. — J.N. — Gillian Koenig WWD, FRIDAY, AUGUST 14, 2009 5

The Beauty Report WWD.COM Sisley’s Ultra High-end Entry Cash Is King for New Bond Scent Niche fragrance marketer Bond No. 9 is playing up the It may not seem ideal to launch a “This stands alone as our flagship prod- value of the dollar with Andy Warhol Success is a Job in New York, the $750 night cream in this economy, but after uct,” said marketing and operations manag- newest addition to its Warhol-inspired fragrance portfolio. seven years of research on a new product er Dean Robert, “and it will be our flagship Due out in October, the unisex scent boasts the iconic dollar signs called Supremÿa, upscale cosmetics brand product going forward. The value is in the created by Warhol on both sides of its bottle, making light of both the Sisley says the timing is right. performance of the product.” battered economy and one of the bleakest fragrance markets in decades. “Some people say it’s not a good time, The intended benefits of the cream, which Warhol’s in-your-face, neon-colored dollar designs were ironically cre- but we will see,” Arnaud Naintré, presi- is designed to be used nightly, are to ex- ated in 1981—at the onset of a very different type of cash-obsessed era. dent of Sisley Americas, said of the tend of the lifespan of existing skin “If this weren’t the economic crisis I would have never done a dol- launch of Supremÿa, which is due cells and to boost the skin’s own re- lar sign, but we chose to give people what they all want right now — in September. The 1.7-oz. pump bot- generation process, according to ex- money,” said Bond No. 9 founder Laurice Rahme, who in 2007 signed a tle is designed to last three to four ecutives. These benefits are supposed long-term license agreement with the Andy Warhol Foundation for the months. “We are ready to launch it to then result in wrinkle filling, skin Visual Arts to develop a 12-item minimum fragrance collection. after seven years,” he said, adding, “I plumping and enhanced skin radi- Named after Warhol’s first assignment as an illustrator in the ‘50s think we’ll have a very good answer ance and hydration. for a piece in Glamour from our customer.” In testing of the formulation, Magazine called, Sisley found that over eight weeks of “Success is a Job in Bond nightly use, the appearance of wrin- New York,” the new No. 9’s kles declined by 11 percent. Also, in scent will be launched newest Some people say vitro testing showed that over a nine- at Bond No. 9’s four scent. “ day period, skin explants treated Manhattan boutiques it’s not a good time, with the Supremÿa formulation ap- and Saks Fifth Avenue peared to age at half the rate as un- doors nationwide but we will see. ­ treated explants. October 1. The fra- Supremÿa will be launched at grance will be then be — Arnaud” Naintré Sisley’s 100 points of sale in the U.S. rolled out to 300 inter- This highly limited distribution net- national doors in Bond work includes Neiman Marcus, Saks No. 9’s 25 global mar- He noted that the amount of re- Fifth Avenue and Bergdorf Goodman kets on November 1. search and development and the type stores. There are also plans for Industry sources of ingredients that went into the prod- launches at a few Nordstrom loca- estimate Andy Warhol uct are the factors that eventually de- tions and Bloomingdale’s 59th Street Success is a Job in

termined the price of Supremÿa. n aquino flagship in New York. New York could gen- The antiaging facial skin cream h “Our clientele is shopping mainly erate global wholesale contains a patent pending ingredi- in those top doors,” said Naintré. sales of $5 million in ent called Phyto-Complex LC 12 and Industry sources estimate its first year on counter,

is designed to reach DNA in the skin jo PHoto by Supremÿa could ring up first-year re- with $2 million of that in order to help skin cells regenerate. tail sales of $4 million in the U.S. expected to come from The complex comprises four botanical Sisley’s In order to promote Supremÿa, the U.S. active ingredients and claims to protect Supremÿa. deluxe samples will be given out to Success is a Job in DNA so that genetic aging is delayed. Sisley’s “core customers” beginning New York marks the “We’re now reaching the DNA level to alter this month, said Robert. Additionally, visuals 36th scent from the a natural process,” said Naintré, who added are to appear in retailer catalogues. New York-based per- that treatment is the firm’s core business. “Sampling, service and taking care of our fumer and the fourth Executives of the family-owned, privately core customer — that’s where we invest our fragrance in the Warhol held firm, which is based in Paris, contended [resources],” said Naintré. franchise. While the that 70 percent of the appearance of aging is Internationally, the Sisley brand is carried new scent injects a bit caused by external factors, such as UV damage, in 85 to 90 countries, and, in France the brand of humor into the on- while 30 percent of aging is genetic. Supremÿa is carried in some 1,200 doors. going financial crisis, Rahme acknowledged the state of the fragrance is designed to combat both in all skin types. — Matthew W. Evans business is no laughing matter. “If you look at a map of the U.S. and Europe, they’re in bad shape,” she explained. “So is Eastern Europe. And it’s also been tough in Japan.” Still, Rahme called Bond’s business “good” thanks in part to the suc- Lolita Lempicka Spices Things Up cessful opening of smaller markets this year in places like Argentina and Uruguay, which helped Bond No. 9 boast a 25 percent increase PARIS — Parfums Lolita Lempicka is introducing its first spicy floral women’s scent, Si Lolita, in wholesale sales this year for the time period between January and starting this summer. June. According to market sources, the company finished 2008 on plan, Its predecessors Lolita Lempicka, from 1997, and L, from 2006, are orientals, explained generating $30 million in revenues. Valérie Lecoanet, manager of Parfums Lolita Lempicka, which is part of Pacific Creation Andy Warhol Success is a Job in New York, an eau de parfum, is de- Parfum Beauté. scribed as a spicy oriental with gourmand notes. Blended by Claude Dir The project is meant to have an air of Parisian bohemian chic along with little girl whimsy of Givaudon, the new scent has top notes of coriander, cardamom, man- — capturing the child inhabiting every grown woman, according to company executives. darin, and bergamot; a heart of jasmine, tuberose, rose, plum and pi- Si Lolita’s bottle design, by Lempicka herself, takes a cue from a four-leaf clover whose leaves mento, and a drydown of vanilla, patchouli, and amber. The fragrance morph into heart shapes. will be available in three sizes: a 100-ml. bottle for $220, a 50-ml. bottle A swatch of Lolita for $145, and a .05-oz. solid perfume token, which will retail for $85. A Lempicka fabric is tied Si Lolita Success is a Job in New York body silk lotion, $90, body cream, $115, around the bottle’s neck. and soap, $35, will also be available. The outer packaging’s A print ad campaign for the fragrance, shot by Andy Warhol docu- design, by watercolorist mentarian and friend Billy Name, is scheduled to appear in the New Michel Charier, echoes York Times beginning in September, running throughout the fall. The ad, the theme. which features Warhol in action along with the Success is a Job In New Fragrance Resources York bottle, features the famous Warhol quote, “Think rich, look poor.” perfumers Christine As part of Bond No. 9’s collaboration with the Andy Warhol Nagel and Benoist Foundation, a portion of the proceeds from all Bond No. 9 Andy Warhol Lapouza concocted Si fragrances goes to promote the visual arts. Lolita’s juice. In the head — Gillian Koenig are notes of pink pep- percorn, bergamot and mandarin. Heart notes include wallflower, sweet Biopelle Acquires Prescribedsolutions pea and heliotrope, A five-year-old skin care brand, called Prescribed- while the base comprises solutions, has been acquired by Biopelle Inc., a subsidiary of the elemi, amber, patchouli Ferndale Pharma Group. and tonka bean notes. Prescribedsolutions is distributed through the offices of 500 derma- Christian Moser shot the print advertising campaign featuring model and actress Charlotte tologists and plastic surgeons. While the company did not break out fig- Le Bon. It comes in single and double pages. ures, industry sources estimates retail sales at roughly $5 million. “She incarnates the spirit of the young Parisian,” said Catherine Dauphin, president of The brand was founded in 2004 by two cosmetics industry veterans, Pacific Creation Parfum Beauté. Aurelian Lis and former Lancaster executive David May. Among the Si Lolita’s launch will take place in France in mid-August and in September in other mar- brand’s products are a DNA repair product, called Stop the Clock Triple kets, save for the U.S., which is to start selling Si Lolita in 2010. Action Anti-Aging Day Cream SPF 50, plus Control Tactics Neurocosmetic Although Lolita Lempicka executives would not divulge projections, industry sources Soothing Gel and Body of Knowledge, a slimming cream marketed with estimate the new fragrance will generate $28 million in wholesale revenues during its first clinical evidence of effectiveness. The products are designed to be custom- year worldwide. ized by adding a booster to adapt the product to meet a patient’s need. In France, an 80-ml. eau de parfum spray will cost 84 euros, or $120 at current exchange; a Biopelle was formed by the Ferndale Pharma Group to provide cut- 50-ml. edp spray, 65.40 euros, or $93.50, and a 30-ml. edp spray, 49 euros, or $70. ting-edge technologies to the medical community. — Jennifer Weil — Pete Born 6 WWD, friday, august 14, 2009 The Beauty Report

Blast Boutique Takes Aim at Prestige Hard Candy’s lipstick items. By Andrea Nagel HUNT VALLEY, Md. — Cover Girl is bent on becoming a fashionista. The $1 billion beauty brand continues to develop products that aim to bring run- way looks down the drugstore aisle, the latest being Blast Boutique, a collection of lip and eye products that utilize technology to address lash length, lip gloss payout and attaining a smoky eye in just two steps. Blast Boutique expands on the profitable Blast brand launched two years ago with LashBlast mascara, which, according to ACNielsen data obtained by market sources, exceeds Maybelline Great Lash, the long-standing mascara leader, in dollar sales. The first beauty brand to achieve $1 billion in retail sales in the U.S. — achieved in June, capping off Procter & Gamble Co.’s fiscal year — Cover Girl is on a roll. It has achieved eight consecutive years of share growth, and in concert with Cover Girl Drew Barrymore, has garnered attention from a coveted consum- er: the prestige shopper. “[LashBlast] didn’t help only our eye segment, it made women around the coun- try re-think Cover Girl. They started thinking, ‘If [Cover Girl] can do that, there’s no

reason they can’t bring me more products’,” said Vince Hudson, who leads business chinsee strategy and marketing for Cover Girl. “It was disruptive.” The new items include a LashBlast Length Mascara, Smoky ShadowBlast Eyecolor and ShineBlast Lip Gloss. During a tour of Cover Girl’s research and de- velopment facility, which is located here directly below marketing and sales offices,

scientists revealed what’s involved in making a new mascara and lip gloss. george photo by To create a lengthening mascara, Cover Girl used visual tracking technology to as- sess how women view eyelash length, which tends to be by observing corner lashes. “Eight out of 10 women look there first,” said Marilyn Glen, associate director of Hard Candy Crosses Over to Mass research and development, Cover Girl. To get longer corner lashes, Cover Girl de- signed a slender bristle core that mirrors the changes in the lash line, so the applica- Hard Candy has traveled in many circles: Fred Segal, Sephora, tor gets progressively more narrow toward the tip, with bristles more far apart in the Space NK and Duty Free shops across the world. Now, the brand that was founded middle. Corner lashes, said Glen, tend to be 40 percent finer and 30 percent lighter in 1995 by Dineh Mohajer with a funky pale-blue nail polish, is entering Wal-Mart, than lashes elsewhere re-created for the masses to be sold exclusively at the retail powerhouse. on the eye. Ultimately, Once known as the beauty brand that broke all the rules — its fashionable, LashBlast extends lashes A LashBlast trendsetting nail polishes had names like Trailer Trash; packaging married cool up to 80 percent without Length ad and girlish charm; print ads, shot by David LaChapelle, were irreverent and fan- flaking or breaking. featuring Drew tasylike — Hard Candy has experienced a roller-coaster sales and distribution LashBlast Length Barrymore. cycle over the past nine years. launches to stores in In the mid-Nineties, after landing in 800 stores, branching into color cosmetics early September. An on- from nail polish and generating about $12 million in wholesale sales, Hard Candy line presale will allow was sold to LVMH Moët Hennessy Louis Vuitton in 1999 for under $10 million. But women to order LashBlast just three years later, thanks to copycats, a tough market and a lack of focus, Hard Length starting Aug. 17 at Candy’s spotlight began to fade and the brand again changed hands, this time to covergirl.com. Falic Fashion Group, a subsidiary of Duty Free Americas, of Hollywood, Fla. The For Smoky ShadowBlast, purchase price was reportedly under $1 million. Over the past seven years, Hard Cover Girl tapped the Candy’s distribution shrank to several hundred select prestige outlets, as well as knowledge of P&G Global to Duty Free shops, with estimated retail sales between $7 million and $10 mil- Creative Design Director lion, according to Falic. Pat McGrath to design a col- In September, it appeared news was afoot, as products on Hard Candy’s Web orful palette of dual-ended- site were marked down 75 percent, sparking a flurry of speculation that the shadow sticks. One end has business was being shuttered. Today, Hard Candy’s Web site is under construc- a tapered tip, meant to line tion. At the time, Jerome Falic, chief executive officer of Falic Fashion Group, the lash and get into eye said its core color assortment had been phased out and new strategies were creases, while the other being explored. end has a rounded tip to get Apparently last year mass retailers came knocking, he said earlier this week, more surface coverage. believing the brand would fill a gap on the cosmetics wall. So Falic began contact- Formulas are smudge- ing manufacturers he thought would be interested in taking on a major revamp able with a fingertip, al- of the brand for mass distribution — yet maintain its prestige image. NuWorld lowing the consumer to Beauty, a beauty contract manufacturer based in Carteret, N.J., was ultimately play with the products, said tapped to make the brand, which is slated to hit 3,000 Wal-Mart stores by the end Hudson, who applied the of the year. Stu Dolleck, president of NuWorld, said he thought Hard Candy had Citrus Flair combination the magic and lure it did from more than a decade ago, and the legs to become a during this interview, and major brand again. A partnership was formed. topped it off with LashBlast “The overall approach was to take this prestige brand, which is fun, avant- Length. “You push it out at garde and edgy, and create it in the same way as if we were going into any pres- the ear,” he said of his mas- tige outlet. It still has the same graphics, brand presentation, componentry and cara application technique. formulas as if it were going to an elite store,” said Dolleck. So consumers fully understand shade options and end looks, tear pads will be The new line consists of 261 items ranging from shimmer lip glosses (Plexi available at shelf with premade makeup looks; online how-to’s will feature makeup Gloss, Lip Tattoo), baked eye shadow duos (Kal-eye-descope), glitter liquid eye- artist Molly Stern. liner (Walk the Line), volume mascara (Ginormous Lash) and eyeliner pencils that ShineBlast represents a new gloss formula, brush and tip. The brush has ridges, double as hair sticks (Take Me Out Eyeliner). Prices average $7. Several iconic which allows for more product on the tip. There’s also more curvature of the tip so it Hard Candy items will return, such as the Fortune Telling Lipgloss and the Eye hugs lips better. Formulas focus on shine and shimmer in relation to shade palette, Candy sliding compact with glitter eye shadow and coordinating glitter eyeliner, which uses a blend of polymers and light oils, as opposed to hard waxes, to deliver according to Lauren Kahn, Hard Candy’s senior brand manager, adding that the the pearls and pigments seen in the range. brand has exited its current retail partners and that sephora.com is clearing out Smoky ShadowBlast and ShineBlast Lip Gloss launch to stores in mid- to late- its existing Hard Candy inventory. December and can be purchased online beginning Nov. 2. Carmen Bauza, vice president of Beauty for Wal-Mart, said it seemed as if she Ad images photographed by Steven Meisel featuring Barrymore wearing the col- had given birth to the new line, seeing that she and Wal-Mart’s entire beauty team lection aim to drive the fashion-forward message home. had created and executed its entire development. Items in Blast Boutique will sell for $7.49 each. Industry sources estimate Blast “The customer will feel like she is in a candy store,” said Bauza of the new Boutique could generate $50 million in first-year sales. items, which “fills a gap in the marketplace, mainly with 18- to 35-, 40-year-old Tapping into the high-end shopper prior to the economic downturn may have women, as well as the young at heart. They’re very familiar with the brand. I know been a stroke of genius, or just pure luck, but data suggests that 56 percent of con- Hard Candy very well and felt it was the right choice based on our knowledge of sumers are crossover shoppers and someone should meet their needs at mass. the customer.” “I see it not as a temporary lapse in the economy. It is the reset button. She is re- Wal-Mart, she continued, will “lean on the equity of the brand and leverage the thinking everything and her mind has been opened. In [the first quarter] consumer recognition that the brand currently has and its existing cachet” which continues sentiment went up, but the gap between mass and prestige got wider. The lines are to live with consumers. Overall, she views Hard Candy as a “destination brand” blurred. She experiences across all channels,” Hudson said. that will build on Wal-Mart’s existing prestige beauty business, such as fragrance, Mass beauty is actually riding out the economic storm, according to data from where it offers many of the same brands sold in department stores. Information Resources Inc. “Retailers don’t just need another brand,” said Dolleck. “They’re eliminating Sales of facial cosmetics were about flat, with a 0.58 percent dip in sales to $487.9 duplicative brands and inventories. Hard Candy will look nothing like the brands million for the calendar year ended June 14. Lip sales are down 9.3 percent, and around it.” sales of eye products and skin care are each up 7 percent. Industry sources expect Hard Candy to be merchandised in four to eight foot And even though times are tough, don’t expect any value-oriented versions of the sets, as they speculate Hard Candy is taking over space left vacant by Max Factor, makeup brand, à la Tide Basic. which is exiting the U.S. marketplace by the end of this year. The items could “The recession has changed the way women shop for makeup, but what hasn’t generate as much as $50 million in sales the first year, sources said. changed is that women are not willing to sacrifice quality,” said Hudson. — A.N. WWD, FRIDAY, AUGUST 14, 2009 7

The Beauty Report WWD.COM Wet ‘n’ Wild Embraces 30 With a Bold Change NEW YORK — Executives at Wet ‘n’ Wild know 2010 will be a crucial year for the with a focus on three franchise categories — Color Icon, Mega Last and Lash Out. beauty brand. With Color Icon, Wet ‘n’ Wild sets out to be an authority in color with a mixture With Americans scaling back on beauty purchases, Wet ‘n’ Wild’s value pricing is of several shadow choices such as trios, six pan shadows, blushers and bronzers right in the ballpark, said one buyer, who called it her best-selling entry price brand. and eye shadow singles. All eye products feature new packaging and formulas with And, with other brands facing challenges or edits in footage, Wet ‘n’ Wild can stand applicators included. Mega Last is a collection of long-lasting demi-matte lipsticks to get into more doors or enlarge its footage. and cream nail polish. And Lash Out is what Haynes calls a “mascara destination,” But to do so, Wet ‘n’ Wild has to prove it can play with the big guys and keep up with new packaging and education for consumers on how to achieve a desired look. consistent sales growth since it, like other brands, has had its sales peaks and val- There are volumizers, lengtheners and curling products. Mascaras are now carded leys this year, according to another high-placed retailer. to provide the space to show the brush as well as explain the items. All of these facts aren’t wasted on Shawn Haynes, senior vice president of sales Haynes said the biggest overhaul in Markwins’ time with Wet ‘n’ Wild has been in and global development at Markwins Beauty Products. “It is such a tumultuous time the face category. While the budget brand wasn’t really a force in face when Markwins in the category,” said Haynes. “Some brands have fallen off; there is consolidation. bought it, today there’s a full range of face items. “We’ve really pushed the envelope Retailers are asking us to do more with less.” Chains, he said, are zeroing in on pro- there,” he said. With its low pricing, however, Wet ‘n’ Wild items haven’t nudged into ductivity and editing departments to avoid stockkeeping unit duplication. the top 10 sellers at drug chains in the facial category, which is led by Revlon ColorStay. Sensing that retailers are shrinking merchandise assortments to cull slow movers But Markwins has plans to move the needle, including a push on social networks and and reduce overlapping items, Wet ‘n’ Wild did some editing of a marketing message of saving money on a beauty routine without sacrifi cing qual- its own — tossing out sluggish movers and making way for ity. Recently the items were featured on “Good Morning America.” “Our year-to-date fresh items. Industry sources estimate Wet ‘n’ Wild cut 10 broadcast media features have reached over 25 million viewers,” Haynes said. percent of its least productive sku’s. While Wet ‘n’ Wild barrels ahead with its new planogram, one of its subsegments Since Markwins acquired the 30-year-old Wet ‘n’ remains under a smaller scope. Beauty Benefi ts, a line containing Lotus Marine Wild in 2003 from AM Cosmetics, the brand has under- Minerals Complex, remains in select accounts such as Duane Reade and Wal-Mart. gone numerous new looks while always maintaining While that stays in limited distribution, retailers said Markwins is muscling into value pricing. The majority of items fall critical new doors, including more channels. A recent visit to a ShopRite in New Jersey, for within the 99 cent-to-$2.99 range. “The by example, uncovered the addition of the Wet ‘n’ Wild brand to a newly renovated cos- brand looks nothing like it did seven years mass metics department. Haynes is enthusiastic about the holiday season and the future ago,” said one buyer. Faye Brookman for Wet ‘n’ Wild. “The mood is good so far [for holiday], and we are hitting our goal Haynes believes the of elevating this brand,” he said. latest iteration is the boldest presentation ever, and the 2010 plano- gram puts Markwins’ A selection of most upscale stamp on newly revamped Wet ‘n’ Wild to date. “We Wet ‘n’ Wild have a whole new plano- cosmetics. gram that organizes products the way women shop,” said Haynes of the set available in 1-foot in- crements with a wish list of at least 3 feet. “It is easy for shoppers to nav- igate the planogram.” The set is designed The Fairest Taps Online Sample Sale Model for Beauty Skin Authority By Rachel Brown rector for cosmetics, is wrangling brands for TheFairest.com, Takes On Wrinkles and Nadine Haobsh, the blogger behind Jolie Nadine, is provid- SKIN AUTHORITY, A SKIN CARE THEFAIREST.COM IS HOPING TO BE THE FAIREST OF ing editorial content. Hunt explained some beauty brands are company that makes professional- them all — all the private sale choices for beauty, that is. concerned about online private sales damaging their image, but grade products that are sold by Launching Sept. 1, the new private sale Web site is the brain- are assuaged by TheFairest.com’s brief sales, the company their doctors and used at spas, is look- child of Charles Perer and Mark Stiller, partners at Intermix brand will be in on the Web site and the ability to avoid retail ing for growth. Capital Partners LLC, the Beverly Hills investment fi rm backing confl icts with the online model. The newest product to join the retailer Studio BeautyMix at Fred Segal. TheFairest.com is at- “It is not TJ Maxx,” said Hunt, pointing out that Stila, Tarte, fi rm’s 26-item lineup is a Wrinkle tempting to distinguish itself from the rapidly expanding private Jurlique, Cosmedicine, Korres, Skyn Iceland, Fusion, Butter Reversing Serum, which uses sale pack by specializing in prestige beauty and evolving from a London and Juara have jumped on board TheFairest.com. “I skin growth factor technology. private sale focus into a well-rounded, direct-to-consumer plat- defi nitely see this as being a new opportunity for brands. It According to Celeste Hilling, chief form to help brands interact with beauty enthusiasts. wasn’t something anyone would consider years ago. QVC was executive offi cer and founder of “I don’t think the world needs not a consideration years ago Skin Authority, the serum is not a Gilt Groupe for beauty. I think and look at it now.” only meant to fi ght wrinkles and beauty needs another distribu- David Palmer, Venture aging but also to boost the immune tion point,” said Perer, refer- Commerce’s vice president of system using skin growth factors. ring to the New York-based on- marketing, suggested the long- “As we age our immune defense line private sale pioneer. “The term appeal of TheFairest.com starts to break down. By putting cost structure for traditional will be determined by whether skin growth factors in, it pushes beauty [retail] has been getting it can develop beyond private the skin to shoot back to the sur- higher and higher for years.… sales when excess inventory be- face,” said Hilling. TheFairest.com’s cost structure comes less available as brands This technology, she said, gives is affordable for brands to get and retailers fully adjust to the a glow to the skin. their word out.” economic realities or consumer Wrinkle Reversing Serum, Early on, TheFairest.com demand picks up again. “There which will sell for $125, is the fi rst sales are expected to last from is going to be a tightening in product to launch in a line Hilling 24 to 72 hours and take place the [online private sale] space,” is expected to launch in the fi rst on Tuesday, Wednesday and said Palmer. “As it tightens, the quarter of next year. Additional Thursday. One or several sales brands are not going to work items look to be an eye serum and could run at a time with an offer with everybody. You have to hair thickening shampoos. The of a single gift set to 60 or so The homepage of TheFairest.com. have other strings in your bow.” serum could generate as much as products from a brand. Products TheFairest.com’s plan is to $2 million in fi rst-year sales, ac- will span multiple categories — skin care, hair care, body care, communicate to consumers about brands using supplied informa- cording to industry sources. color cosmetics and natural among them — and price points tion and original material such as tips written by Haobsh, connect Since the late Nineties, Skin from impulse to indulgence. TheFairest.com takes a 30 percent brands to beauty bloggers, engage consumers in market research, Authority has been “coaching” cut of each sale. and perhaps initiate sampling programs. Ultimately, Perer and the consumer towards achieving Perer and Stiller have roped in Visionaire-owned Venture Stiller believe TheFairest.com could also become a launchpad healthy skin through online vid- Commerce, the Long Beach-based Web design, marketing for brands and develop a tie-in with Studio BeautyMix. eos, live chats, a radio show and a and fulfi llment house behind Web sites for Studio BeautyMix, TheFairest.com’s fi rst-year revenue goal is $5 million, a fi gure 24-hour hotline, Hilling said. William Rast, Kasil, J. Lindeberg and more, to handle infra- surpassed by the top online private sales venues. TheFairest. “Consumers can’t live in a der- structure for TheFairest.com. Venture Commerce, which has an com’s profi tability will hinge upon the number of customers it matologist office. Professional ownership stake in TheFairest.com, has experience in the pri- reaches and acquisition cost per customer, estimated by Perer to guidance isn’t really available to vate sale arena operating six-month-old online designer fashion be anywhere from $3 to $25. “There are a lot of people chasing them, and we provide 9-1-1 skin resource SecretStyle. this [online private sale] space, but a few dedicated to beauty,” care at no extra charge,” she said. Shelley Hunt, formerly Nordstrom’s national operations di- he said. “We want to own the niche.” — Alissa Cherry Beauty Report Single

8 WWD, FRIDAY, AUGUST 14, 2009

The HBA Report WWD.COM The Sea Pure line. Arden Narrows Its Q4 Loss Fourth-quarter losses were nar- He added that this destocking is ongoing. rowed at Elizabeth Arden Inc. as sales slipped “We finished fiscal 2009 as we had antici- for the three months ended June 30. pated, and while it was a challenging year, we The Miramar, Fla.-based firm incurred a accomplished a great deal,” stated Beattie. $3.6 million loss during the quarter compared “Our Global Efficiency Re-engineering ini- with a loss of $10.4 million during the same tiative allowed us to improve gross margins, period a year ago. On a diluted earnings per reduce inventories by $90 million year-over- share basis, the loss was 13 cents, versus 38 year and generate cash flow from operations cents a year ago. of $37 million. Wall Street analysts were expecting a loss of A third of the company’s business is in- 8 cents a share, according to Yahoo Finance. ternational and Beattie noted that, while the Revenues came in at $212.6 million for the Elizabeth Arden brand helped drive the inter- quarter, a decline of 10 percent from $236.3 national business, the firm’s international dis- million last year, due to “weakness” in tribution and travel retail businesses were the U.S. and travel retail during the “extremely soft for the second half of the third and fourth fiscal quarters. year.” In addition to the performance Quarterly gross profits of the Arden brand, another bright were up slightly at $91.9 mil- spot was Asia Pacific, which lion, from $90.1 million the helped offset declines overall on previous year, a 1.9 percent the international front. gain. As a percentage of Beattie said the firm’s “long- sales, the company posted E. Scott term goal is to double the size a gross profit margin of Beattie of the Elizabeth Arden brand,” 43.2 percent, from 38.1 per- with a focus on its core skin care cent in the year-ago period. and related color brands. He Depreciation and amortiza- added the brand will be celebrat- tion for the quarter totaled ing its 100th anniversary in 2010. H20 Plus Unveils Natural Side nearly $7 million, while, the For the full fiscal year, the firm previous year, that figure totaled swung to a loss of $6.2 million, or 22 By Andrea Nagel $6.3 million. cents a share, from profits of $19.9 mil- Two-thirds of Arden’s business is lion, or 68 cents a share, the previous year. H20 Plus is turning over a new leaf with its first based on fragrance in North America, which Full-year sales were $1.07 billion, a 6.2 percent all-natural collection of face and body products. includes department stores and mass market decline from $1.14 billion the previous year. The line, Sea Pure, is the firm’s first major launch since being retailers, as well as the firm’s businesses in The company set guidance for the first acquired in May 2008 by Cordova Smart & Williams and Goldman Canada, Puerto Rico and online. quarter of fiscal 2010 of net sales of $255 mil- Sachs Urban Investment Group. The $120 million beauty com- “[The firm’s] U.S. department store busi- lion to $265 million and a loss per diluted pany’s effort is an 11-item collection free of synthetic fragrances, ness had a very difficult year, especially in the share of 3 cents to 8 cents. parabens, petrochemicals, phthalates and sulfates, and expects second quarter, due to [retailers’] deleverag- For the fiscal year ending June 30 company to generate about $20 million in first-year retail sales. ing of inventory, particularly fragrance inven- expectations are for net sales to increase by Sea Pure fits in well with the strategy of Robert Seidl, chief tory,” E. Scott Beattie, chairman, president 2 percent to 3.5 percent, the firm stated, and executive officer, who joined H2O Plus three years ago, to trans- and chief executive officer, told analysts dur- earnings per diluted share to be in the range form the company’s paradigm, which meant growing the brand ing a conference call after the close of the of 50 cents to 65 cents. via retail partners rather than exclusively through its branded stock market Thursday. — Matthew W. Evans stores. The firm, which has grown sales in the double digits for the past three years, operates 60 stores around the world, with nine in the U.S., including outposts in Chicago, Los Angeles, Las Vegas, New York and San Francisco. For 2008, store sales were flat, said Seidl, who is also expect- Firms Pair Up for Facial Spa ing flat store sales for 2009. “We needed to bring it out so consumers could find it. No Dermatologist-headed skin care brand kaplanMD and Studio BeautyMix in matter how many stores you have, there are going to be parts [of Santa Monica, Calif., have partnered on a facial spa that opened last week in the Fred Segal store. the country] where consumers will not be exposed to it.” “The spa will allow customers to feel and look their best without having to leave the neigh- H2O Plus, which was founded in 1989 by Cindy Melk (Seidl borhood,” said Stuart Kaplan, who launched kaplanMD about a year ago. “We are all multitask- and Melk each own a small share of the company), is positioning ing, and I have women who come to my office and say I have to be out of here in five minutes. Sea Pure to be representative of a new era. Bill Colli, formerly The spa gives you, for the shortest period of the time, the most exposure to facial products by the head of sales at Frederic Fekkai, joined H2O Plus in April as someone that works under me.” senior vice president of sales and marketing, a new position. Physician’s assistant Sudi Fahim and facialist Rosi Bozefe, both employees of Kaplan, will see “It’s the right time for Sea Pure, which not only implies natu- clients at the facial spa that is converted office space. Services include Botox averaging $200 to $275 ral, but offers items for less than $40,” said Colli. per area, a Clarifying Facial to prevent breakouts at $55 for 30 minutes, and a Swedish massage at Formulas are fortified with therapeutic sea lavender, sea $75 for one hour. It is estimated that the spa will generate $650,000 in first-year revenues. moss, sea mayweed, marine extracts and the firm’s exclusive Robin Coe-Hutshing, founder Sea Mineral Complex. Every Sea Pure formula is 100 percent Items from kaplanMD. of Studio BeautyMix, said her cus- natural, with the exception of Renewing Prep Tonic, which is tomers’ response to kaplanMD, 96 percent natural. Body care items include a Cleansing Body which she called a “top brand” Oil, Reviving Body Buffer, Purifying Body Mud, Replenishing at the store, and Kaplan’s stellar Body Cream and Finishing Body Silk. Face care products in- reputation helped convince her a clude a Creamy Facial Cleanser, Renewing Prep Tonic, Gentle facial spa would be a good idea for Refining Polish, Sheer Lotion SPF 15, Deep Moisture Cream Studio BeautyMix. “This is a nod to and Perfecting Eye Cream. All packaging for Sea Pure is recy- convenience for our customer,” she clable. Items sell for between $18 for the Prep Tonic to $40 for said. “It will allow us to introduce the Sheer Lotion SPF 15. our products and our other ser- Since the acquisition, H2O Plus has rolled out to nine coun- vices to his customers, and it will tries in Latin America, as well as to countries in Europe, join- allow Dr. Kaplan to introduce his ing Spain and the Netherlands, where the brand is sold in product and services to our cus- Cortes Inglés and Body Bell (Spain), Ici Paris (the Netherlands, tomers. It is a win-win.” Belgium, Luxembourg) and House of Fraser and Clerys depart- The kaplanMD skin care line ment stores (Ireland). In China, H2O Plus has experienced 35 has eight products priced from $30 percent compounded annual growth over the past three years, to $185 intended to address skin where it is sold in 230 retail partners, including Sephora. aging resulting from environmen- Globally, the brand is sold in more than 20 countries in 2,000 tal damage, time and hormonal stores; in North America it is sold in Ulta, Lord & Taylor, select changes. Kaplan said his mission is to keep the line concise and ingredient-packed, with each Macy’s, Carson Pirie Scott and Beauty 360. product containing at least 10 active ingredients to combat skin dilemmas. In addition to Studio Building new locations is not a focus going forward, however BeautyMix, where Lip 20 Treatment, Perfecting Serum and Intensive Eye Cream are the line’s the company operates flagships in major cities so consumers bestsellers, kaplanMD is available at Neiman Marcus in Beverly Hills and on blissworld.com. can “see the entire brand,” because sometimes with retail part- “It is one of the first skin care lines that really addresses women’s skin in transition, which nerships “you don’t get the full feeling,” Seidl added. can cover any woman from age 30 on,” said Coe-Hutshing. “It has ingredients that really nor- One of its biggest partnerships was formed last year with malize and balance the skin and really take care of discoloration and uneven pigmentation and Disney, which brought H20 Plus into the amenities arena and the replenishment of moisture.” into about 30,000 hotel rooms, producing about 20 million units Kaplan said he would consider more spas after the one at Studio BeautyMix is running at of products each year. full speed, but he is hesitant to add locations that would make strong oversight difficult. “I “[Disney] continues to operate at 97 percent capacity. These would wait to see how this is received,” he said. “I don’t want it to become so far away from me people there are our target. There’s a higher-income family or that it is no longer me.” individual,” said Seidl. — Rachel Brown WWD, FRIDAY, AUGUST 14, 2009 9 WWD.COM Brooks Bros. Opens First NYC Boutique FASHION SCOOPS By Jean E. Palmieri cations to malls and when 10,000 square feet becomes available, a bank usually gets it. We can’t compete with SO YOU THINK YOU CAN DESIGN?: After a few months of Just call it Brooks Brothers Lite. what a bank will pay in rent.” modeling teaser pieces, Katie Holmes, who’s clearly intent The retailer on Thursday opened its first “boutique,” Del Vecchio said although the Rockefeller Center unit is on proving she’s not a one-trick pony (Broadway, “So You a 4,000-square-foot store in Manhattan’s Rockefeller “a different model,” it can help all of the company’s stores Think You Can Dance?”), is ready to unveil Holmes & Yang, Center that could be the first of several small stores in “fine-tune their merchandise flow. That’s our goal for all the collection she’s been designing with her stylist, Jeanne urban locations around the country. our stores — to improve our invento- Yang. The duo’s “premium designer” line, which includes “This is the smallest store we have The new store is only 4,000 square feet. ry turn. Here, we have no choice but women’s and children’s wear — presumably inspired by Suri — half the average size,” said Claudio to keep the assortment moving.” Cruise — and is said to be full of classic fare, will launch Del Vecchio, chairman and chief ex- Del Vecchio expects men’s exclusively at Maxfield in Los Angeles for fall. ecutive officer of Brooks Bros. shirts to be the strongest cat- Nevertheless, all categories of egory in the store, attracting JIL’S RETURN: Uniqlo and Jil Sander merchandise with the exception of area workers, tourists from A Uniqlo have finally set a date for the German Black Fleece are represented — al- WwD the nearby hotels or those ad image. designer’s long-awaited fashion beit in an abbreviated form. The visiting Radio City Music Hall comeback. The Japanese chain will store, which is two-thirds men’s and Men’s next door. Although suits are start selling the +J collection in the one-third women’s, offers a compre- available, the assortment tilts U.S. and the U.K. on Oct. 1 and in Asia hensive men’s shirt and tie selection more heavily toward sportswear. “We on Oct. 2. Prices range from 1,990 in the center with men’s suits, sports- think most men will buy their suits yen, or about $21 at current exchange, wear, outerwear and accessories on on Madison Avenue, but they can get for a stretch T-shirt to 14,900 yen, or the left and women’s dress and casu- them here, too,” Del Vecchio said. $155, for a Chesterfield coat. Photos of alwear and accessories on the right. In other news, Brooks Bros. has opened its first shop- the products, including tailored shirts, “This is untraditional for Brooks Bros.,” Del Vecchio in-shop in the U.K. in the women’s department of Harrods. button-down jackets and sweaters, said. “It’s more boutique-style merchandising.” For exam- The boutique, which opened on July 22, is 700 square feet. leaked online earlier this week. But ple, men’s shirts are assorted by size instead of style and Eraldo Poletto, president of strategic development on Thursday, Uniqlo unveiled a few shots from the line’s only limited sizes are available on the selling floor. Other and international business, said Brooks Bros. is hoping new advertising campaign, which will break Aug. 24 in GQ sizes and styles are either housed in the basement storage to add a similar shop in the men’s area of the London Japan. Shot by David Sims, the ads feature black-and-white area or can be sent over from the Brooks Bros. flagship on department store. images of wind-blown models Sean Opry and Isabeli Fontana. Madison Avenue “within a half hour,” he said. “Harrods is a phenomenal tourist destination and Formerly a French Connection store, the unit at Sixth this is an amazing opportunity,” Poletto said. He added LEADING MAN: Giorgio Armani collaborated with Avenue and 51st Street is expected to produce annual he is “exploring” additional shops at big European “Inglourious Basterds” costume designer Anna B. sales of $10 million, Del Vecchio said. retailers such as Selfridges in London and Galeries Sheppard to create a made-to-measure dinner “If it works, that will be very good news,” he added. Lafayette in Paris. Brooks Bros. currently sells its men’s jacket for Brad Pitt’s character to wear in a key “One of the limits to our expansion has been finding the shirts and ties in El Corte Inglés in Spain and “our goal scene. The two-button white dinner jacket with

centeno talaya Photo by right size stores in other cities. We prefer downtown lo- is to sell everything,” Poletto said. peak lapels would normally retail for $4,375. Meanwhile, this week, Pitt has worn Tom Ford suits to the Los Angeles premiere of “Inglourious Basterds” and to the New York July Specialty Retailers’ Sales Inch Up, Dept. Stores Slide premiere of “The Time Traveler’s Wife.” By Liza Casabona “Discretionary consumer spending is weak, especially as FORD TO TORONTO: Speaking of Tom Ford, the it pertains to apparel and general merchandise,” said John first film he directed, “A Single Man,” starring WASHINGTON — Specialty apparel retailers reported small Lonski, chief economist with Moody’s Investor Services. Colin Firth and Julianne Moore, will have its North sales gains in July, but department stores struggled and The employment picture, including income levels, American premiere at the Toronto Film Festival yearly comparisons reflected the impact of the recession. needs to consistently improve before discretionary on Sept. 14. That will be three days after its Sales at specialty stores increased a seasonally ad- spending rises, he said. world premiere at the Venice justed 0.6 percent in July compared with June, while The small increase in apparel sales during July could Film Festival. There is no t A Giorgio Armani department stores fell 1.6 percent, the Commerce be the result of some back-to-school shoppers taking word yet on a U.S. premiere. sketch of Brad Pitt. Department said Thursday. advantage of sales, said Richard Yamarone, director of In 12-month comparisons, sales at specialty stores fell 7.6 economic research at Argus Research Corp. EAST ENDER: After spending many a summer in East Hampton, percent to $17.13 billion. Department store sales declined Consumers have been programmed by recent trends Stella McCartney is throwing her hat into the Hamptons retail 11.5 percent to $15.13 billion compared with a year earlier. to look for bargains when shopping, economists said. ring, if only for a long weekend. McCartney will do a pop-up Even the broader general merchandise category, The government’s Consumer Price Index, which tracks shop — her first ever — Aug. 22 to 24 at the Fireplace which includes discounters like Wal-Mart and Target in retail prices, is to be released today. Project, an auto garage-turned-gallery, in East Hampton. addition to department store sales, showed a drop of 0.8 All retail and food service providers reported a The temporary store will feature fall merch as well as a trunk percent in July compared with June. The category de- worse than expected 0.1 percent decrease in July versus show of the resort 2010 collection, and a portion of the sale clined 4.7 percent to $48.37 billion versus a year earlier. June. Compared with a year ago, total sales dropped 8.3 proceeds will benefit the Pollock-Krasner House & Study Center. “Consumer spending is still weak, and I don’t know percent to $342.3 billion. No word on whether McCartney will make an appearance. any reason why it should be changing,” said Kevin The July results “pour more cold water” on predic- Regan, senior managing director and retail industry ex- tions of recovery, said Charles McMillion, president and FLEECE, PLEASE: Black Fleece, Brooks Brothers’ collection pert with FTI Consulting. “The consumer really is going chief economist with MBG Information Services. designed by Thom Browne, has its first American wholesale through a change in the way they approach their shop- Economists said the broader sales figures for all retail client. Black Fleece shirts and ties will be carried in 10 Neiman ping habits because they are still deleveraging a lot. and food service providers declined despite increased Marcus doors. “If there’s a strong reaction, which we fully They are thriftier, they’re not as aspirational, and they sales in the motor vehicles sector that benefited from expect, then we’ll look at the clothing as well,” said Tommy look at things in a more disciplined way. People are just “cash for clunkers” subsidies, which encouraged consum- Fazio, men’s fashion director for Neiman Marcus and Bergdorf not shopping today unless they really have to.” ers to trade in their cars for more fuel efficient models. Goodman. (The stores recently merged their buying offices.) Consumers continue to buy basic items and neces- “The cash-for-clunkers trade-in program led to a signifi- Bergdorf, an early supporter of Browne, will continue to carry sities, but they are careful to spend only what they can cant spark in sales in the hard-pressed motor vehicle indus- the designer’s signature collection. “It’s an exciting way to afford, Regan said. try,” Commerce Secretary Gary Locke said on Thursday. continue differentiating the stores,” said Fazio.

The Prada Transformer is housing the “Turn Into Me” exhibit. Prada Transformer Evolves Into Art Forum By HooRan Kim which evoke primitive cave paintings. Within are more cavelike structures that house Djurberg’s animations — SEOUL — The Prada Transformer has been transformed which are so disturbing that organizers advise against for a third time — it’s now a contemporary art gallery. anyone under age 18 attending the show. The PVC-covered tetrahedron designed by Rem The grotesque image of bones and torn flesh domi- Koolhaas, which sits on the grounds of the 16th-century nate the animations: a dead body out of which swarms Gyeonghui Palace here, is a venue for “Turn Into Me,” a of maggots emerge, devouring the flesh, leaving behind selection of works by Swedish artist Nathalie Djurberg. a bare skeleton. However, because the scene is rendered Curated by the Fondazione Prada, the exhibition runs from in clay animation, a form usually associated with play, Saturday to Sept. 13. The transformer previously contained its grossness is diminished. a cinematic event, and before that, displayed the “Waist Speaking at a press conference held at the Seoul Down-Skirts by Miuccia Prada” exhibition, which opened Museum of History Thursday, the slightly nervous and the current series of interdisciplinary projects in April. shy Djurberg said, “What comes out of tears, sweat and Djurberg, the recipient of the Silver Lion for a nervousness is everything. If you feel secure, then you Promising Young Artist at this year’s Venice Biennale, are not challenged.” creates short animated films shot with the stop-motion One fear she felt while preparing for the exhibit technique. Most of the works on display here were shown was the structure’s large size. “The space didn’t really in 2008 at the Fondazione Prada in Milan. However, for feel like mine,” she said, noting a tension between art the unique space in which the works are being shown and architecture. Indeed, Germano Celant, director of this time, Djurberg added a new work: The artist paint- Fondazione Prada, summed up the exhibition as a “ping- ed graffiti using oil crayon and paint on the inside of the pong game between architecture, art and music.” Prada Transformer, which is covered in white felt. And what’s next for the Transformer when it’s rotated Walking into the cocoonlike structure filled with soft, for a final time? That has still to be decided. “We don’t pulsating music composed by Hans Berg feels like enter- know yet, but it is not going to be a fashion show for sure,” ing a primeval womb, a feeling reinforced by the graffiti, said Tomaso Galli, Prada Transformer project director. 10 WWD, FRIDAY, AUGUST 14, 2009 Bloomingdale’s Overhauls Flagship’s Main Floor

Continued from page one executive officer. “When you see all of the new installa- tions, it will blow your socks off. Every solitary resource has a new shop. It’s like a brand-new store.” The main floor includes beauty, fragrance, designer handbags and leather goods, fine and costume jewelry, fashion accessories, watches, sunglasses, men’s dress shirts, furnishings and ties. The floor will officially be launched Oct. 15. “This is the culmination of the biggest renovation in the history of 59th Street,” added Jack Hruska, executive vice president of creative services, store design and visual mer- chandising. The master plan for the flagship, an effort to elevate pro- ductivity and amplify the energy of Bloomingdale’s while enabling brands to project their images as well, started in 2004 with the renovation of contemporary sportswear on the second level. In the years that followed, the New View bridge floor on three, intimate apparel on two, shoes on four, dresses and coats on five, men’s contemporary on the metro level, as well the furniture, rug and mattresses de- partments, were all renovated. On the main floor this year, the fragrance department, a three-level Louis Vuitton shop and areas for jewelry and handbags were all completed and, within about a week, the lower level for men’s is ex- pected to be finished. Overall, the renovation retains the B’way for beauty, as well as the A’way for accessories, but otherwise it’s a total transformation that introduces a host of brands new to the store, as well as unique shop concepts.

This is the culmination of the biggest“ renovation in the history of 59th Street.­ —” Jack Hruska, Bloomingdale’s

At the core is a three-hall beauty complex with soaring walls for vendor installations, wider aisles and an easier traffic flow like a grid, instead of the old congested and truncated configuration. Hruska and Francine Klein, executive vice president and general merchandise manager of accessories, cosmet- ics and fine jewelry, came up with the idea to construct the high walls. “I didn’t get it. I couldn’t see it,” said Gould, who felt the effect would further enclose the floor. But the team convinced Gould that it wouldn’t, and constructed 13-foot-high-by-30-foot-wide walls, creating a dramatic effect with portals that demarcate the rooms, and with Bloomingdale’s signature black lacquer trim, known inter- nally as the “eyelid.” The beauty walls and columns provide additional op- portunities to display the latest in visual display technol- ogy and interactivity. The columns for the first time will be utilized by the vendors for branding purposes such as video panels, graphics and transparencies for theatrical ef- fect. Clinique, for example, is creating a ticker tape, remi- niscent of Times Square. “The whole place is alive,” Gould said. “Everyone is com- ing in with something technologically advanced. It doesn’t feel like just one shop after another. The vendors maintain their identity within the Bloomingdale’s identity. Our cus- tomers want brands within the Bloomingdale’s setting.” Relocating most of men’s wear to the metro and lower levels enabled the store to significantly expand the beauty and handbag businesses. In total, beauty grew to 25,400 square feet from 21,000, while designer handbags increased to 11,000 square feet from 7,740. Fashion accessories was relocated to Third Avenue from Lexington, and the front arcade is now en- tirely designer handbags. In beauty, six brands are being added: Bare Escentuals, Jo Malone, Shu Uemura, Sisley, Bumble and bumble and Greater animation Giorgio Armani. Space NK, with its own range of products on the beauty floor. and labels, was added in November. There are a total of 26 beauty brands on the floor. Of the 26, only one, La Mer, stayed in its same location, but, like all the others, it will have a new look. stepped-up efforts at clienteling and encouraging vendors to provide better service, In handbags, accessories and jewelry, new resources include Stella McCartney, and beefed-up special events to reverse the downtrend. Michael Stars, Eileen Fisher Daddy Longlegs, Ugg, D&D, Me&Ro, Helen Ficalora, “We spent three days in September with every cosmetic company to review shop [de- Links of London, Janis Savitt, Elizabeth and James, Seasonal Whispers and James signs] and merchandise,” Gould said. “I don’t care if its Abu Dhabi, Bangkok or Moscow Swette. In sunglasses and watches, new vendors are Carrera, Burberry, David — tell us what your best three locations are” and take the design to a new level from Yurman, Timex, Adidas and G-Shock. there. “We also discussed how to drive clienteling and events to a whole new level, and Newness, enhanced service and a renewed sense that something is going on at how to elevate the quality of the staffs. The environment is very important, but people Bloomingdale’s are critical considering business there has been tough, even tougher also come here because they had a sales associate that made them feel good.” than at its sister division, Macy’s. While the main floor remains very productive, ex- As far as staging more events and making them more impactful, Gould said: “That’s ceeding $2,000 in sales per square foot, the company acknowledges consumers are part of our DNA, more than anyone else.” Furthering the cause, a 1,300-square-foot shopping less frequently and spending less. It’s betting on the new environment; “cosmetic studio” on the 60th Street side of the store has been created to stage “master WWD, FRIDAY, AUGUST 14, 2009 11 WWD.COM Bloomingdale’s Overhauls Flagship’s Main Floor

to use the space more efficiently,” Hruska noted. Some key brands will be gaining space, such as David Yurman, which grows to 85 linear feet from 40 and is building a shop that will be inspired by its upcoming MITRA ROBERT BY flagship on Madison Avenue. Louis Vuitton doubled the size of its PHOTOS boutique on the main floor in February. It now features a broadened brand experi- STORE ence that includes leather goods, sunglass- es and fashion accessories, from a distinct area for men’s product to a women’s shoe salon and a bag bar. “This is really a landmark and his- toric destination, and our experience is that the Bloomingdale’s cus- tomer is very loyal,” said Geoffroy van Raemdonck, senior vice president of the Northeast and Midwest regions at Louis Vuitton. “They are really adding and expanding their of- fering and elevating the customer experience. Everyone has different stores, and everyone is putting their best foot for- ward in terms of bringing new concepts and new lay- outs,” he added. Here: Space NK and its Jack Hruska and The shop is located at indie brands are part of Michael Gould the corner of Lexington Bloomingdale’s new lineup. Avenue and 59th Street, Right: Francine Klein and Howard with entrances at street Kreitzman, vice president of level and from the main cosmetics and fragrances. floor, and its nearly 3,900 Below: A rendering of the square feet of selling upcoming beauty floor. space is spread across two floors and three levels. The store facade also has For more photos, see WWD.com. a double-story monogram panel that changes color. “It’s a real store-within- a-store, and we are proud to have that store in such a historic landmark,” van Raemdonck said. Thia Breen, president, North America, for the Estée Lauder Cos. Inc., said the company has eight of its divisions represented on the beauty floor, includ- ing Lauder, Clinique, MAC, Bumble and bumble and Jo Malone. “We are really push- ing them to make something very exciting out of the opening,” she said. For the first time, Lauder will coordinate the events of the brands through its corporate calendar to create maximum merchandising leverage. Breen praised the design of the floor. She also seconded Gould’s claim that a greater- than-usual effort will be made to upgrade the selling experience. This applies partic- ularly to the practice of clienteling, which uses a databank to tip off sales associates as to when consumers should be reminded to replenish product, for example. “The Lauder companies are going to gain share on that floor,” Breen predicted. “That’s my commitment to Mike.” “For the first time in my history with Bloomingdale’s — about 30 years — I think [Gould] will be able to change the flow of the floor,” said Phillip Shearer, ceo of Groupe Clarins worldwide. “B’way will still be the main way. But it will be more balanced.” Serge Jureidini, president of Lancôme USA, cautioned the floor is not yet done. classes” in applying makeup, personal appearances and parties. But he clearly was impressed by the concepts, the plan and the earliest completions. Gould repeatedly stressed how the store is making strides in enriching the people The architectural concept conveys “a perception of a growing space.” factor — improved service, salesmanship and merchandising while sharpening tech- Lancôme executives heeded Gould’s call to upgrade merchandising, improve cus- niques for luring consumers back into the store. The need for this was driven home tomer service, increase ease of approach and ease of choice as well reaping the ben- by the results of a study Bloomingdale’s did with Clinique that indicated 50 percent of efits of technology that has been developed around the world. As a result, the goal “is that brand’s customers return to make additional purchases only once a year. to make sure the space is even more inviting.” Although only about 4,000 square feet more was captured in beauty, the new floor Lancôme’s merchandising approach is twofold: to fulfill the expectations of tour- creates the illusion of greater spaciousness, with about 60 percent of the added foot- ists drawn to Bloomingdale’s as an iconic store, while still satisfying the loyal regu- age applied to create wider aisles. lar customers. Lancôme has a big business in Bloomingdale’s 59th Street, Jureidini Some vendors actually reduced their square footage, but with the walls and ad- noted, and the brand’s ambition is “to take the next step.” vanced merchandising they expect to still be more productive. “We worked out a way — With contributions from Marc Karimzadeh 12 WWD, friday, august 14, 2009 WWD.COM Media/Advertising

MEMO PAD some complaints from people who felt category. Vogue’s circulation fell 4.8 percent to 210,435; BUSINESSWEEK SALE SEEN HEATING offended by what she had written about Elle’s declined 4.1 percent to 195,192; Marie Claire’s UP: Media observers are speculating ‘obese mannequins’ she saw at the store, was down 9.9 percent at 285,307, and Tatler fell 5.6 a deal for McGraw-Hill Cos. to sell that she had been less sensitive than percent to 85,064. BusinessWeek could be put together she should have been to the feelings But there were some brighter spots in the monthly within the next few months. So far, of readers who felt that the reference market – In Style U.K., published by IPC, saw a 1.2 percent OpenGate Capital, owners of TV belittled them. She told her editor that rise year-on-year to 182,989, following last year’s redesign Guide, and Warburg Pincus are said to she was going to say that on her personal of the magazine and Eilidh MacAskill’s appointment as interested, as are Bruce Wasserstein, blog. As far as the review itself goes, she editor in December. Harper’s Bazaar, published by Natmags, owner of New York Magazine; Platinum stands behind it.” a subsidiary of Hearst, saw a rise of 0.5 percent to 109,646 Equity, and Mansueto Ventures, owners “It is interesting — if a big frightening and U.K. Vanity Fair also rose 0.5 percent to 101,698. of Fast Company. Coincidentally, Fast — how much rage this article generated,” In terms of the men’s titles, lad mags had the toughest Company’s former editor in chief, John Wilson added. “It did show me that weight six months. Circulation of IPC’s Loaded fell 23.8 percent to Byrne, is now at BusinessWeek, serving as issues in America are far more intensely 72,679 year-on-year, while Bauer’s FHM fell 16.2 percent executive editor. painful for people than I ever previously to 235,027. The risque men’s weeklies Nuts and Zoo Sources say the asking price could realized. This hot button is so freakin’ hot, respectively posted declines of 24.6 percent to 188,532 be around $35 million to $40 million, it is thermonuclear.” and 31.2 percent to 111,012. Condé Nast’s GQ saw a plus perhaps the assumption of debt and As for whether Penney’s will continue to 7.7 percent fall in circulation to 120,019, while Esquire, other obligations. “It is likely that prices advertise in the Times — that remains an published by Natmags, saw a 9.3 percent decline to that are being offered now will decline open question. Penney’s executives could 52,705. — Nina Jones between now and closing as buyers learn not be reached for comment. — A.W. more about the state of the business and YOUNG LOVE: After putting a naked Beth Ditto on Love what the actual costs of operating it are,” NO IMPERFECTION REVEALED: Be it the magazine’s inaugural cover in February, the title’s editor noted Reed Phillips, managing partner, critical acclaim and copious marketing in chief Katie Grand has turned to the charms of youth for DeSilva + Phillips. “At this stage in the budget of “Mad Men,” the retro mystique its sophomore edition, which hits newsstands Aug. 24. process, the name of the game is to bid of his character Don Draper, or let’s face “The whole issue’s full of these kids, really, who are at that high so that BusinessWeek engages with it, Jon Hamm’s chiseled physique and turning point of life when you’ve got no responsibilities, you as a possible bidder. Then, as you Jon Hamm of personal charm, the actor is undeniably you’re quite free and everything’s exciting,” said Grand. learn more, try to lower the price to more “Mad Men.” having a moment. True, he and his co-star She’s tapped a mix of emerging celebrities and total of what the business may actually be were bumped from the cover of Vanity Fair, unknowns to profile in the magazine, most of whom are worth.” A spokesman for BusinessWeek but the extended Annie Leibovitz shoot under 21. Coco Sumner, the musician daughter of Sting said Friday the company is exploring its strategic options made it in, and Hamm has lately been ubiquitous on the talk and Trudie Styler, features on one of the issue’s two covers, (as it had noted in a statement last month) but declined to show and Q&A circuit, dispensing pitch-perfect anecdotes shot by Mert Alas and Marcus Piggott. A second cover comment further. — Amy Wicks and somehow managing plausible self-deprecation. image, shot by David Sims, spotlights Alex Hartley, a bass All of this inspired Dave Itzkoff to wonder on The New player from Birmingham, England, whom Grand “found DON’T DISS PENNEY’S: Cintra Wilson didn’t know what she York Times’ ArtsBeat blog Wednesday, “Is Jon Hamm really on the Internet.” The issue also features Miley Cyrus, was getting herself into when she wrote a scathing column human or is he an incredibly lifelike cyborg sent to earth Pixie Geldof, Allegra Versace, Scout and Tallulah Willis and about J.C. Penney’s new Manhattan store in the Styles from the planet Perfectotron?” On TheAwl.com, Alex Balk Cooper and Marston Hefner (Hugh Hefner’s sons). Grand section of The New York Times on Thursday — and then complained, “Jon Hamm is ruining it for the rest of us.” also said she’d added “more words” to the second issue herself came under intense criticism for it. At the beginning At a Wednesday evening screening of the Season Three of the Condé Nast U.K. title, and has appointed Isaac of the piece, she wrote: “Why would this dowdy Middle premiere episode hosted by Banana Republic, which Lock as deputy editor of the magazine. “I always think American entity waddle into Midtown in its big old shorts partnered with the show for window displays in nearly 500 visually, so it was really important that the words team was and flip-flops without even bothering to update its ancient stores, Hamm politely declined to furnish evidence of an strengthened,” said Grand. Helvetica Light logo, which for anyone who grew up with imperfection, essentially asking a reporter to the company is encrusted with decades of boring, even take his word for it. traumatically parental, associations?” Wilson went on to say The show’s omnipresence has reached fever it took a long time to find a size 2 among the racks. “There pitch — Sesame Street recently said it will are, however, abundant size 10’s, 12’s and 16’s.” She parody “Mad Men” — and fashion is happily added the store had the “most obese mannequins I have participating. “I get a lot of e-mails and photos ever seen,” adding “they probably need special insulin- of people that are dressing like me,” said based epoxy injections just to make their limbs stay on.” Hamm, meaning his character. “That was pretty Wilson told WWD she hadn’t heard from anyone at strange. People will say to me, ‘Oh, I just saw Penney’s, but the outpouring of abusive comments and you in a mall.’” personal attacks from others have been “hair-raising.” Is he so easily imitated? “I guess it’s pretty “I made some comments about an oversize mannequin easy,” said Hamm, ever quick to evince modesty. that somewhat erased the fine line between humor and “Slick your hair back, put a nice suit on, and offensiveness — and I had to concede that my tone was too you’re ready to go.” — Irin Carmon harsh when some very nice people wrote to tell me why they were hurt by these comments,” said Wilson. “This is what SLOW SALES: The U.K.’s weekly style magazines compelled me to apologize. It was a teachable moment, so I seem to have the edge on monthly fashion lic tried to take responsibility for the fact that I wasn’t sensitive titles in the battle to maintain circulation, b u p enough to people’s feelings in that passage.” She added according to half-year figures from Britain’s e the “beat down” she received from the vast majority of Audit Bureau of Circulations released Thursday. R commenters, though, has been hateful and threatening. However, hardly any titles managed to grow their

A business writer at the Milwaukee Journal Sentinel circulation significantly during the period. Advertisers in the issue include Louis Vuitton, Prada r Banana saw the piece, and wrote, “We should invite her [Wilson] to U.K. weekly Grazia, which is published by Bauer, and Chanel, and there are 106 ad pages in the 296-page o es f the Wisconsin State Fair and force-feed her a cream puff!” notched up a 0.7 percent increase in total circulation magazine. While that’s a small decline from the 116 ad g ma I

Meanwhile, a blogger at the Houston Press responded with (which combines subscription, newsstand sales and free pages in February, Grand said the issue had “exceeded

an article, “Times Writer Dumps on Texas’ J.C. Penney, distribution) to 228,694 for the six months to the end of the targets set” for its advertising. “I think it’s tough for tty

Because We’re Just So Damn Fat Here.” Writer Richard June, compared with the same period last year, while Look, everyone, and everyone’s competing for the same ads,” she /Ge

Connelly said, “It’s difficult to take in just all the sneering a style and celebrity weekly published by IPC Media, saw a said. To mark the launch of the second issue, the title will thy ar aimed at us corpulent, tasteless slobs between the coasts, 2.6 percent increase to 315,410. More, a young women’s advertise on billboard screens at London’s Shepherd’s Bush C c but we’ll try.” celebrity weekly published by Bauer, posted a 17.3 percent roundabout, a major route into the city, which will flash M “The Critical Shopper column has always had an edge circulation rise to 190,708, after a relaunch last year. the magazine’s entire content page by page. In addition, and a point of view — it is supposed to review, after all,” In contrast, U.K. Glamour’s circulation fell 4.6 percent T-shirts printed with the two Love cover images will be sold said a spokeswoman for the Times. “Cintra Wilson felt, year-on-year to 526,145 — though it does remain the at Marc by Marc Jacobs’ London store. Grand and her team

after the article went to press and after she received biggest selling title in ABC’s women’s lifestyle and fashion will dress the store’s windows. — N.J. Jamie PHOTO BY

A David Meister Signature David Meister Collection to Arrive at Bergdorf’s cocktail dress. David Meister will launch a signature label of red-carpet-ready eveningwear looks at Bergdorf Goodman later this month. Familiar with some of the dresses he designed for celebrities’ special appearances, Bergdorf ’s executives approached him about the prospect of developing an exclusive capsule collection earlier this year. Sharon Stone, Tina Fey, Drew Barrymore and Beyoncé Knowles are among the stars who have worn his clothes. The Los Angeles-based Meister will be in the Fifth Avenue store in Manhattan with models Aug. 31 to show off his new designs, includ- ing a backless draped matte jersey gown and one-shoulder cocktail dress comprising tiny beaded black leather triangles. The five-piece David Meister Signature collection will be housed on the sixth floor near Lela Rose, Carmen Marc Valvo, Heidi Weisel and other resourc- es. Retail prices will range from $1,500 to $3,000. Meister, who declined to comment on projected volume, said this marks the first time he has done an exclusive collection for a retailer. “At this time, it certainly helps to have something that sets you apart. A lot of times you can go into five different stores and see all of the same merchandise in each one,” he said. The collaboration was the ideal one for Meister. “If anyone was going to approach me, they would be my first choice,” he said. — Rosemary Feitelberg WWD, friday, august 14, 2009 13 WWD.COM Fashion Week Resilience in Copenhagen By Katya Foreman Orjan Andersson, founder and chief designer of Cheap A look from the spring Monday, observed a move from dressed up styles to streetwear COPENHAGEN — Determined to strut its stuff despite a chal- Mini for Many line. and “a harder look” for spring. The brand has just launched lenging retail landscape for the Scandinavian fashion indus- an eyewear line in Sweden, Cheap Monday Clairvoyant, pro- try, Copenhagen Fashion Week presented its largest runway duced by Flo Scandinavia, marking the brand’s first licensing schedule yet with a record 42 shows, made up mainly of venture. The collection will be rolled out into Europe this Danish designer-driven labels. fall, with international launches planned for 2010. Some 55,799 visitors attended the event, which ended its Among other launches, Odd Molly presented a new eyewear five-day run here Aug. 9, down 12 percent compared with last line plus a capsule bed linen collection by Helena Christensen, August’s edition. Boss Orange joined the show lineup for the with profits to go to victims of the Chernobyl disaster. During first time, as did a trio of hip Swedish brands: Minimarket, an event at its Copenhagen flagship on Aug. 7 — attended by Fifth Avenue Shoe Repair and Carin Wester. Running con- fashion week regular Crown Princess Mary of Denmark — currently were the fashion fairs Gallery, Copenhagen Georg Jensen unveiled its new Moonlight jewelry collection, International Fashion Fair, CPH Vision and Terminal 2. based on revisited archive pieces in sterling silver with hand- “This is the time to be visible, to be out there,” said Eva mounted precious stones. “It’s the time we live in, we all want Kruse, executive director of the Danish Fashion Institute. “Going to go back to our roots,” said the brand’s president and ceo through the fashion fairs, we’re likely see smaller collections, cut Ulrik Garde Due. Georg Jensen is also working with a prices and even adjustments in the manufacturing process band of high profile stylists for a new line of reworked to accommodate buyers’ lowered budgets — vintage jewelry pieces due for release in December. anything that can bring costs down.” Meanwhile, Peter Jensen, who presented his first “The competition is very tough….The women’s resort collection at the Gallery show, has consumer is changing and we’ve seen sever- designed a capsule spring line for Swedish cloth- al small stores squeezed out of the market,” ing chain Weekday. commented Jens Birkeholm, chief executive Key spring trends for denim, a hard-hit catego- of the Danish Textile Union. Clothing sales in ry in Scandinavia, included tight fits, patchwork- Denmark hit bottom over the past few months ing and paint splashes. Denim jackets will be a key and have plateaued, following a drop in sales of focus for spring, while a burgeoning trend for men is about 5 percent in the first half of 2009, he said. ultraslim short denim shorts with turn-ups, said to have Jan Busch Carlsen, director of the CPH Vision A clutch from been sparked by retailers lopping of the legs of old stock. trade show, which covers streetwear, denim and Marimekko’s A move away from denim to twill fabrics and a snubbing young designers, cited encouraging orders from new bag line. A moonstone of premium jeans by increasingly price-conscious consumers retailers, signaling, he hopes, a turning point for and sterling were listed among factors plaguing the market, along with the the industry. “I have one exhibitor who sold the same amount silver brooch ongoing dresses and leggings trend. in one day as she did [during the whole fair] in February. It’s from Georg “It’s the boutique end of the market that’s really suffer- a good sign,” he said. “Right now everyone is rigging their Jensen’s new ing. There’s a big adjustment happening here, with the more boats to get business going again.” Moonlight experienced players repositioning themselves,” said George Helle Hogsbro Krag, owner of Copenhagen-based store jewelry Doumani, manager of Goggle, which has three stores in Crème de la Crème à la Edgar, was among the retailers strip- collection. Copenhagen. “We’re trying to put the focus back on denim ping back on brands, having lowered her budget by about 10 For more wear,” confirmed a spokesman for G-Star, which presented a percent. “We’re tidying up,” she said, naming Acne among images, see capsule spring jeans line by its new campaign face, Liv Tyler, top spring collections, especially some of the Eighties-inspired WWD.com. at the event, featuring three styles in a variety of washes. bleached denim looks. Several fashion labels at the designer-oriented Gallery fair showcased wallet- Trends across collections included oversize boxy silhouettes with friendly diffusion lines. Minimarket, for example, presented its fledgling Mini slim bottoms, one-shoulder looks, knotting, pleating and zip details. for Many collection for the first time outside of Sweden, while Fifth Avenue Shoe “The color palette for spring will be warmer, moving…to more in- Repair extended its line of more affordable jersey pieces. tense shades of salmon and peach. The big neutrals of the season will Those pushing accessories included Marimekko, which presented a new bag line, be gray — from silver to charcoal — and black, Nordic fashion’s key color,” said Luiz designed in collaboration with Virva Launo with prints by Maija Louekari, and its Lobao, owner of the Madrid-based fashion store Bunkha. first shoe collection at Gallery, designed by Finsk’s Julia Lundsten. Key accessories noted by Barbara Kramer, co-producer of Designers & Agents, Sweden’s Whyred, which showed an expanded footwear line, counts among several which will present a Scandinavian and Nordic design section at its New York show brands developing their own store networks to secure distribution, with a store due in February, included chain body jewelry, some wrapped in leather; studded shoes, to open in Gothenburg, Sweden, Aug 27. Whyred already owns three stores: two in belts and bags; heavy stacked shoes and platforms, and flowers for the hair. Among Stockholm and one in Copenhagen, as well as four shop-in-shops in Scandinavia. Fifth standout collections she listed Noir, Rützou, Fifth Avenue Shoe Repair and the hip Avenue Shoe Repair opened a second store in Stockholm in June. While in February, eco-friendly Norwegian label Fin, which introduced looks made from a milk fiber- Bllack Noir will open its first shop-in-shop in Copenhagen’s prestigious Illum depart- based fabric at the fair. ment store timed for the city’s next fashion week, scheduled for February. Buyers Stick to the Practical at L.A. Market By WWD Staff With denim resurgent and consumers different age groups to layer items for any searching for more outfits to wear from day A look occasion. LOS ANGELES — Many buyers at the market that ended to night, vendors received a positive re- from In the accessories markets, vendors here Tuesday opted for easy sells in the $50 to $150 retail sponse from retailers for silky tops to pair Fifteen and retailers continued to focus on what price range, such as cotton dresses, T-shirts and blouses with jeans, as well as dresses that could Twenty. price points would spur consumers to buy and scarves, as well as items for immediate delivery. be dressed up or down with accessories. handbags during difficult times. Amanda Both retailers and vendors recounted a familiar re- Bright colors, ranging from yellow and Bowen, West Coast handbag sales repre- cession landscape of scaled-back inventories, cautious green to coral and blue, caught the atten- sentative for New York-based accessories buying and lower price points at Designers & Agents, tion of many buyers. firm Donald J Pliner, said the brand has Brighte Companies and the showrooms housed in the Michelle Jonas did well with a $130 lowered its average retail handbag price California Market Center, Cooper Design Space and Modal and lace minidress in teal, Prodigal about $50 to $350. David Weaver, visual New Mart. Daughter attracted buyers with a $79 cobalt merchandiser for Hobo International, said Just three weeks before the start of WWDMAGIC, blue minidress in sandwash silk and Mark the Annapolis, Md.-based handbag brand Project and a spate of other trade expos in Las Vegas, and Estel dyed a $115 floor-length kimono reduced the wholesale price of its perenni- the Los Angeles-based show saw fewer retailers than in dress in turquoise. al best-selling framed clutch called Lauren previous years as the economic slowdown forced buyers Retailers also liked embellished details to $40 from $49. to restrict their travel budgets. as seen on the ruffles of Fifteen-Twenty’s Accessories vendors also offered buy- “The majority of my customers are skipping this show $82 yellow silk blouse, Roberta Freymann’s ers a variety of material and size options to and going to Project,” said Heidi Eisinger, co-owner of a $87.50 azure smock top enhanced with beads, excite consumers. Daren Carter, owner of showroom called West Bank Clothing. paillettes and embroidery, and Calypso St. the CMC showroom Darenkirk Accessories, “I came here to find what I don’t have, lines I haven’t Barth’s $112 navy silk doupioni frock accen- pointed out that Vernon, Calif.-based Vieta, seen before,” said Meggie White, whose namesake tuated with organza and bead flowers along a PVC line of handbags wholesaling from boutique opened in December on Union Street in San the neckline. $28 to $35, was gaining traction. Venice, Calif.-based Francisco. “I’m here writing some holiday items. Gift- Denim label Dégaine responded to buyers’ need for handbag designer Beth Springer used goat leather in type stuff is always an easy pickup for customers, and tops with a new collection of cover-ups made of bamboo, small bags wholesaling from about $85 to $192. you tend to not have to mark it down.” including a $78 shawl cardigan. “People have definitely embraced the smaller size,” Hiroka Takahashi, owner of Sanina boutique in There also was room in the contemporary market for Springer said. Hermosa Beach, Calif., sought bright colors and bold Australia’s Flannel to make its U.S. introduction for the In jewelry, stones took a backseat to metal at prints. “Those are popular because the Eighties are still upcoming spring season with its neutral palette in natu- Philadelphia-based Marlyn Schiff and Charlene K from a big trend,” she said. ral fibers like silk, cotton and linen. Day-to-night dressing Beverly Hills. Mixes of silver and rose and yellow gold “Tops do really well for me,” said Judith Gordon- proved universal as Flannel offered a $77.50 cotton-linen in necklaces wholesaling from $17 to $128 were top se- Lawson, who has owned her boutique, Mountain Mama, drop-waist tank dress, $195 silk jumpsuit and $282.50 silk lections at Charlene K, and hematite-hued multistrand in Auburn, Calif., for 35 years. “That’s the one thing my crepe de chine minidress with a knit bodice. bracelets wholesaling for $20 were popular in the customers will consistently pick up, because it’s easy to “To me, it conjures comfort,” said designer Kristy Marlyn Schiff collection, which has been picked up by integrate with existing pieces.” Lawrence, noting her goal is to allow women spanning Neiman Marcus, Metropark and Martin + Osa. 14 WWD, FRIDAY, AUGUST 14, 2009 WWD.COM Financial For full daily stock changes and more financial news, see WWD.com / business-news.

Li & Fung Profits Up 13 Percent 10 Best Performers By Constance Haisma-Kwok Fung also elaborated on which mar- kets were providing further potential HONG KONG — Hong Kong-based sourcing acquisitions. “We see opportunity in the DAILY COMPANIES P/E Volume Amt giant Li & Fung Ltd. posted double-digit U.S. The companies are suffering and the profit growth in the first half despite banking system is lagging. A lot of compa- High Low Last %Change weak market conditions. nies do want to sell to us. Europe is start- The company said Thursday profits ing to follow and our own home base, attributable to shareholders for the six Asia, is where we’re looking at export 1.49 1.05 Frederick’s of Hollywood (FOH) - 113618 1.20 +14.29 months ended June 30 rose 13 percent to companies to find certain product cat- 1.40 billion Hong Kong dollars, or $180.6 egories,” said Fung, who specified health 5.67 5.08 Charming Shoppes (CHRS) - 1224200 5.65 +11.44 million at average exchange rates. and beauty as the one area in which Li & Sales shed 2 percent to 46.29 billion Fung is relatively under-represented. 52.75 46.00 French Connection * (FCCN:L) - 28474 52.75 +9.90 HK dollars, or $5.97 billion, as weak Fung also said he expects the U.S. to consumer demand and some customer lead the way in economic recovery, but insolvencies bit into business. could not predict when that might hap- 8.39 7.76 Developers Diversified (DDR) - 4116837 8.36 +8.57 “I’m very happy to report a double- pen. “Back-to-school sales are very im- digit net profit growth despite a very portant. July numbers didn’t show any- 4.39 4.03 Pacific Sunwear (PSUN) - 447512 4.36 +7.65 challenging environment,” said manag- thing; it’s the August numbers that are ing director William Fung. “The first half important,” he said, noting that if sales 19.28 18.00 Gildan Activewear (GIL) 16.9 2532076 18.03 +6.50 of this year and the last half of 2008 were begin to increase, retailers will have to probably two of the most difficult periods place more orders to counter currently 3.25 3.12 Tandy Leather Factory (TLF) 12.2 7200 3.18 +4.26 the global economy has ever experienced. low stock levels. “They’ll have to bring In terms of consumer goods and global stock levels up a bit — that’s the part, 9.90 9.49 Inter Parfums (IPAR) 14.0 110238 9.80 +4.26 trade, we have not seen such difficulties the upward lift we’re looking for.” for as long as I can remember, so it’s quite Fung also pointed out that while turn- gratifying that despite all of that, we still over in terms of markets and products re- 6.66 6.45 Benetton Group * (BEN:MI) 10.7 202839 6.65 +3.18 managed to obtain double-digit growth.” mained relatively unchanged, there has The company reported a lift in core been a shift in which countries Li & Fung 467.30 443.10 Burberry * (BRBY:L) - 2671274 463.70 +3.14 operating profit, up 11 percent to 1.70 sources. China once again accounts for billion HK dollars, or $219.3 million. 50 percent of goods, but the location of Fung attributed this to cost cutting and the manufacturers has changed. “China acquisitions and said the same will hold has shifted. It was the Pearl River Delta true for the second half of the year. “If and the Shanghai Yangtze River Delta, 10 Worst Performers there’s growth, it will really rely on ac- but we see a move to the hinterland and quisitions — not organic growth,” he the interior. There is a geographic shift,” DAILY COMPANIES P/E Volume Amt said. “This lull in the market [makes it] said Fung, noting the central govern- tough going for our existing and current ment’s support of such changes. High Low Last %Change business, but it’s a really good opportu- Elsewhere, sourcing has dropped sig- nity, too. It’s the perfect time to buy com- nificantly in Thailand, down 22 percent, panies to fill up space, to build. In that and Turkey, down 37 percent, as costs in 0.35 0.29 NexCen (NEXC) - 394894 0.29 -9.38 respect, we’re very optimistic.” those countries continue to rise. On the Li & Fung has a $1 billion war chest for other hand, one country is emerging as a such acquisitions. Earlier this year, the power player. “Bangladesh is the major 0.54 0.50 Phoenix Footwear (PXG) - 10600 0.50 -7.41 company acquired U.K.-based footwear star of the first half,” said Fung, who point- maker Shubiz along with its sourcing arm ed out an increase of 34 percent in sourc- 1.88 1.57 Bluefly (BFLY) - 5271 1.65 -5.72 Clearskies, as well as JMI, a maker of ing from the Southeast Asian country. gloves and technical clothing for brands Separately, Fung declined to com- 10.50 8.84 Kenneth Cole (KCP) - 945725 9.00 -5.26 like Burton and Nike. Li & Fung also ment on whether men’s wear retailer signed sourcing deals with Liz Claiborne Trinity is planning an initial public of- 11.07 10.31 Elizabeth Arden (RDEN) - 250684 10.45 -4.91 Inc. in February and in April became the fering. The retailer is privately owned exclusive sourcing agent for the apparel by William and Victor Fung and con- 14.89 14.03 Charlotte Russe (CHIC) - 338827 14.14 -4.27 arms of Wolverine and Merrell. trols seven high-end men’s wear brands “Outsourcing deals were the main ac- as well as more than 430 monobrand tivity of the first half,” said Fung. “Our stores across China. The brands include 0.49 0.47 Birks & Mayors (BMJ) - 21600 0.47 -4.08 customers usually have their own buy- Cerruti 1881, Gieves & Hawkes, Kent & ing offices, but they’re closing [them] Curwen and D’urban. Trinity also oper- 10.83 9.54 LaCrosse Footwear (BOOT) 13.9 81461 10.15 -3.97 and we take over the business,” he said. ates 35 Salvatore Ferragamo stores in In that vein, the company said it has South Korea, Singapore, Malaysia and 4.18 3.97 Bon-Ton (BONT) - 57872 4.00 -3.85 entered into a buying agency agreement Thailand through a joint venture. One with Boston-based The Talbots Inc., Hong Kong newspaper has reported that 7.88 7.30 Syms (SYMS) - 20242 7.55 -3.82 which has 600 stores across the U.S. Li Trinity aims to raise at least $200 mil- & Fung will now act as exclusive apparel lion in a Hong Kong IPO by the end of sourcing agent for all Talbots brand ap- this year. * Editor’s note: European stocks are quoted in the currency of their principal exchanges. Shares on parel, and the nonexclusive agent for Fung did confirm that Jean-Marc the London Stock Exchange are quoted in pence, Richemont and The Swatch Group are quoted in Swiss swimwear, intimate apparel, footwear, Loubier has joined Trinity as a director. francs and Hennes & Mauritz is quoted in Swedish kronor. All other European stocks are in euros. jewelry, handbags and accessories. Fung Loubier is the ex-chief executive officer says the deal is worth between $300 mil- of Escada and formerly held manage- lion and $400 million this year. The agree- ment positions at LVMH Moët Hennessy ment goes into effect in September. Louis Vuitton. Retail Stocks Rise Despite Gloomy News Retail stocks and the major in- the management of its liquidity position. dices edged higher Thursday as inves- Within 60 days, it is required to address Moody’s Downgrades Claiborne’s Debt tors weighed unexpectedly downbeat credit risk management, such as allow- By Evan Clark said Scott Tuhy, a Moody’s debt analyst, news about retail sales and jobs against ances for loan and lease losses. The final who noted the company’s outlook for the signs, such as those issued Wednesday task, due within 75 days, will be to out- Liz Claiborne Inc.’s $82.1 million second half was also taken into account. by the Federal Reserve, that the econo- line a business plan addressing manage- in second-quarter losses weighed on its In addition to posting wider losses on my is stabilizing. ment and corporate governance. debt rating Thursday. Wednesday, the firm said it would cut an Although retail sales fell 0.1 percent Separately, CIT said its board adopted Moody’s downgraded the firm’s cor- additional $100 million in expenses. in July and new unemployment claims a rights plan to prevent shareholders or porate family and probability of de- “Liz continues to face challenges rose to 558,000, both worse than ana- groups of shareholders from becoming fault ratings two notches to “B2” from from weak consumer spending, which lysts had expected, the S&P Retail Index owners of more than 5 percent of the “Ba3.” The rating on Claiborne’s 350 is evident in the performance of its picked up 0.3 percent to 367.91 as Wal- firm’s stock. Although often devised to million euros, or $495.8 million, in se- premium priced brands such as Juicy Mart Stores Inc. and other major stores prevent takeovers, CIT said its program nior unsecured notes was lowered to Couture and Lucky Brand Jeans,” Tuhy reported better results than forecast. is designed to protect the firm’s “abil- “Caa1” from “B2.” All Moody’s ratings said. “Moody’s believes the company’s The Dow Jones Industrial Average rose ity to utilize its net operating losses and on Claiborne’s debt were placed on re- problems extend beyond the weak econ- 0.4 percent to 9,398.19 while the S&P 500 other tax assets.” view for further downgrade. omy, as it also faces the need to stabilize was up 0.7 percent to 1,012.73. Charming Shoppes Inc.’s shares Ratings in the “B” range are con- the performance of two of its largest Shares of CIT Group Inc. spiked 13.3 jumped 11.4 percent to close at $5.65 after sidered to be “subject to high credit brands, its heritage Liz Claiborne brand percent to close at $1.45 after the com- the specialty apparel retailer said it will risk,” while debt with a grade of “Caa” and Mexx.” pany and the Federal Reserve Bank said sell its private label credit card program to is judged to be in “poor standing” and Moody’s said Claiborne could be chal- they’d agreed for CIT to provide a capital Alliance Data Systems Corp. for a consid- “subject to very high credit risk,” ac- lenged to meet the fixed-charge covenant plan on how it will maintain sufficient eration totaling $110 million. The two par- cording to the debt watchdog’s scale. in its asset-based loan agreement with- funds for its Utah-based bank and bank ties signed a long-term operating agree- “The two-notch downgrade reflects out either improved performance or an holding company. ment in which Alliance Data will service the substantial decline in Liz’s fiscal amendment to the agreement. The charge CIT has agreed to submit details the private label credit card program. 2009 second-quarter operating results,” covenant goes into effect next July. within 15 days on how it will improve — Vicki M. Young WWD, FRIDAY, AUGUST 14, 2009 15 WWD.COM Harrods Net Down 19.4% New Balance to Open ‘Experience’ Unit in Beijing LONDON — Harrods is feeling the pinch just like every other retailer — partially thanks As pArt of its plAn to open As mAny As 1,000 stores to some capital spending at the famed in China before 2012, new Balance will unveil its first experience london department store. store in Beijing on saturday. in a report filed last week at london’s Designed to showcase the brand’s 103-year-old heritage, Companies House — the British equivalent the 2,000-square-foot store’s first-floor decor features a worn- of the securities and exchange Commission in leather couch, framed vintage logos, ads and other para- yeung Au by photo — Harrods reported that net profits fell phernalia dating from the early 20th century. A ribbon extend- 19.4 percent to 27.4 million pounds, or $49.5 ing from the main entrance upstairs to the decidedly more million, in the year to Jan. 31 from 34 mil- modern second-floor highlights the brand’s milestones. Audio, lion pounds, or $61.5 million, in the same visual and olfactory touches such as the oak scent of a mid- period last year, partly as a result of excep- 20th century shoe store are used in different areas through- tional items including a charge of 2.5 mil- out. the store carries both new Balance footwear and the lion pounds, or $4.5 million, to repair the entire apparel collection. store’s terra-cotta facade. the company also to mark saturday’s grand opening, new Balance will host spent 24 million pounds, or $43 million, on a sixties-style American carnival with games, prizes and bal- fixtures and fittings during the year, which loons outside the store on Beijing’s Qianmen Avenue. there included refurbishing its homewares area will also be more athletic-minded activities such as foot width and opening a Champagne bar. the store measuring, treadmill challenges, 123 limited edition t-shirt will complete its 18-month project to renew giveaways and displays of classic new Balance footwear. its men’s wear floors this year. new Balance’s global chief executive officer rob the retailer reported a 6.2 percent rise Demartini and another senior executives will be in Asia for in turnover to 464 million pounds, or $839.8 the opening. the company employs 4,000 people worldwide million, in the year to Jan. 31, from 437 mil- and last year generated sales of $1.64 billion. fit has been lion pounds, or $790.9 million, in the pre- a major selling point for the brand since its early days, as vious year. Dollar figures have been con- has the fact the company still produces some footwear in verted at average exchange rates for the the U.s. in his backyard in 1906, William riley observed period. that a chicken could maintain perfect balance on three Harrods called the results “a very strong claws. that revelation inspired him to apply the balance performance in a year of many uncertain- principle to an arch support system for footwear, which ties.” But the company added that “with the evolved into new Balance. the label now offers six widths volatile economy and trading conditions, and two heights. the group has continued to adopt a cautious As an extension of its total fit Campaign, a multimedia approach to managing costs and conserving effort will underline healthy running tips, foot care con- liquidity.” cepts and inspirational stories of runners in China. the in addition, mohamed Al fayed, Harrods’ company plans to select 88 of the most inspiring runners chairman and owner, did not draw a dividend, to participate in an international marathon in Hong Kong. in contrast to the previous year when he paid the brand also plans to host a 6-kilometer run, which will New Balance will launch the himself a dividend of 50.8 million pounds, or be open to the public in nanjing and Hangzhou. Experience Store on Saturday. $91.9 million. — Rosemary Feitelberg — Nina Jones

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