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WWD ADVERTISEMENT Women’s Wear Daily • Monday, August 22, 2011 • $3.00 SOUTHPOLE BRIDGET AT 20 A two-decade FOLEY’S journey through DIARY the urban Francesca Gregorini and landscape. Tatiana von Furstenberg dish on Section II their new fi lm, “Tanner Hall.” STYLE PAGE 17 DESIGNER WATCH Marc to Dior? Talks Get Serious WWD By MILES SOCHA MONDAY, AUGUST 22, 2011 Q WOMEN’S WEAR DAILY Q $3.00 PARIS — Bernard Arnault might poach a star de- signer for Christian Dior after all — and one from his own constellation of luxury brands. According to sources, the business titan is in talks with Marc Jacobs about becoming the new couturier of the fabled French house. Dior has been without a creative leader since the March ouster of John Galliano in the wake of allegations of racist and anti- Semitic outbursts. Such a move would unseat Jacobs from Louis Vuitton, the cash-cow brand at LVMH Moët Hennessy Louis Vuitton — and possibly set in motion a reshuffl ing at the French luxury giant. It is understood that Phoebe Philo, who has Pretty revved up Celine with her ultra-chic, minimalist clothes and must-have handbags, could be fi rst in line to succeed Jacobs at Vuitton. One source cautioned that a deal with Jacobs is not assured, but that the American designer and Dior management are so far “excited” about the prospect. Pleats Meetings are scheduled to take place in Paris this week between Dior offi cials and legal representa- A bit of charm goes a long way at tives for Jacobs, who is currently in New York pre- WWDMagic, Project and ENK, all paring for his signature fashion show there. of which begin today in Las Vegas Dior declined to comment. Jacobs could not im- mediately be reached for comment. and run through Wednesday. Besides Arnault, chairman at LVMH and Dior, Feminine dresses, such as this key decision makers in the designer search are Sidney Toledano, Dior’s chief executive offi cer, and polyester one by Max & Cleo, are Delphine Arnault, deputy managing director at Dior. one item on buyers’ wish lists. Should the American designer get the job, it would For more, see pages 8 to 13. surely give a jolt of excitement to Dior and Paris Fashion Week, given that Jacobs is a darling of editors and has proven his ability to mount electrifying shows SEE PAGE 14 IN WWD TODAY Penney’s Gives Ackman OK PAGE 2 FINANCIAL: William Ackman cuts a deal to boost his holdings in the retailer to up to 26.1 percent, and gives up some voting rights. Tommy Lifts U.K. Presence PAGE 2 RETAIL: Hilfi ger is set to plant its fl ag in Knightsbridge with a new fl agship, its largest on the Continent. Worthy to Be Seen PAGE 4 INNERWEAR: ▲ Designers latest lingerie creations are too special to be referred to as simply “underwear.” PHOTO BY THOMAS IANNACCONE; STYLED BY KIM FRIDAY MODEL: ERIN FEE/ONE; HAIR BY KAYLA MICHELE AT ATELIER MANAGEMENT FOR REDKEN; MAKEUP BY JEN MYLES AT WORKGROUP LTD. USING NARS WORKGROUP LTD. JEN MYLES AT MANAGEMENT FOR REDKEN; MAKEUP BY ATELIER MICHELE AT KAYLA MODEL: ERIN FEE/ONE; HAIR BY 2 WWD MONDAY, AUGUST 22, 2011 WWD.COM Penney’s Allows Ackman to Grow Stake Ann Profi ts Surge, Ackman has been relatively mum on his By EVAN CLARK William plans for Penney, though he played a role in Ackman bringing on Apple retail wiz Ron Johnson as Firm Eyeing Canada J.C. PENNEY CO. INC. is allowing activist the company’s next chief executive offi cer. ANN INC. ON FRIDAY reported second-quarter prof- investor William Ackman to get a bit closer, Ackman could not be reached for comment. its rose 52 percent to $24.8 million or 47 cents per di- giving him the OK to take on a “synthetic Shares of Penney’s gained 2.4 percent luted share, from $18.6 million or 31 cents per diluted long position” that could boost his stake in to $24.38 Friday. share last year, beating Wall Street analyst estimates. the retailer to up to 26.1 percent. Although shares of Penney’s rallied 9.1 Sales in the second quarter grew 15 percent and Last year, Penney’s adopted a poison percent just before Ackman revealed his comps increased 8.6 percent, the company said. pill shareholder plan designed to fend off stake in the fi rm Oct. 8, the investor’s in- Total net sales for the second quarter were up Ackman, who through his Pershing Square volvement has not kept the stock from sink- $558.2 million, compared with net sales of $483.5 Capital Management acquired beneficial ing. As of Friday’s close, shares of Penny’s million in the 2010 period. ownership of more than 39 million shares of had fallen 14.5 percent from the rise on Kay Krill, president and chief executive offi cer of the retailer, giving him a 16.5 percent stake. word of Ackman’s stake. The S&P Retail Ann Inc., told WWD that consumers responded to the The poison pill plan was amended Friday so it would not be Index gained 1.5 percent over the same time frame. fashion at Ann Taylor and Loft. The retailer is poised triggered if Ackman increased his stake as specifi ed. Penney’s fi rst-half net profi ts rose 5.4 percent to $78 for fall and beyond because “we haven’t raised our Vornado Realty Trust, in conjunction with Ackman, million as sales slipped 0.2 percent to $7.85 billion. prices — only on high-demand items,” Krill said. took a 9.9 percent stake in the chain last year, and both “The second half of the year’s going to be an ugly “Our sourcing team has done an amazing job of main- Ackman and Vornado chairman Steven Roth took seats on period for them,” said Rob Wilson, analyst at Tiburon taining product costs for all of 2011 and part of 2012.” the company’s board. Research Group. “They’re stuck with about 400 stores Ann Taylor is working on converting stores to a But even as Ackman’s exposure to the fi rm is set to in- in less-than-optimal real estate and actually own these smaller, more productive prototype of 3,700 square crease, his infl uence, in a way, is diminishing. stores. If they only had the 600 stores that they primar- feet to 4,200 square feet. About 20 units will be in “[The agreement] limited their voting rights, so re- ily lease in the more normal mall environments I think place by the end of the second quarter, and the re- gardless of how much they acquire, they agreed to reduce they’d be in a much better spot.” tailer is on track to roll out 45 in 2011. their voting stake to 15 percent, so the voting rights go Wilson described this as a “structural issue” that’s “In new concept stores, we’re seeing more high- down with the increase,” said a Penney’s spokeswoman challenged chairman and ceo Myron E. “Mike” Ullman er-priced selling because the stores look and feel of Pershing Square. 3rd and would hamper Johnson. elevated aesthetically,” Krill said. Gross margin as a percentage of net sales was 55 percent, on par with last year’s record gross margin rate in the second quarter. Selling, general and ad- ministrative expenses for the quarter rose to $265.1 Hilfi ger to Plant Flag in Knightsbridge million, versus $235.4 million in 2010. SG&A as a rently a less penetrated country for percentage of net sales declined 120 basis points By NINA JONES Tommy Hilfi ger than many of its other from the prior year to 47.5 percent. Operating in- European markets. “In the last couple come rose 39 percent to $41.7 million in the 2011 TOMMY HILFIGER is set to land in of years [the U.K. has] been doing re- second quarter, from $29.9 million in 2010. London’s Knightsbridge this fall, when ally well but the base on which we Comp sales at Ann Taylor rose 5 percent in the sec- the brand opens its largest U.K. store are growing is still not that big,” said ond quarter, with gains of 32 percent in e-commerce, on Brompton Road in November. Gehring. “It’s a market that has a lot 7 percent in factory outlets and 1 percent in the stores The 8,288-square-foot space will of potential.” Gehring declined to give channel, which was softer than expected due to bold be near Harrods, as well as branded sales projections for the new store, prints that didn’t resonate with clients. Loft’s comps stores such as Mulberry and Burberry. which is set to open Nov. 24. gained 11 percent over last year, 9 percent in stores, “We tend to do our best business In light of the current turmoil in 34 percent in e-commerce and 24 percent in outlets. where we have those locations that Europe’s markets, Gehring noted Ann’s accelerated factory-outlet strategy saw the really marry upscale retail presence that the company is “quite pleased opening of 11 new Loft units in the second quarter, for with very good traffi c,” Fred Gehring, with the business,” and regards a total of 72 outlet units. The company expects to add chief executive officer of Tommy what he calls “the extreme develop- 20 new Loft factory outlets per year.