Gaucho Cool for Their Proenza Schouler Collection, Sliced with Fascinating Fabric Play and a Vaguely Seventies Sophistication
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ROUND SQUEEZE HOME TWO PLAY AGAIN OSCAR DE LA RENTA ART BASEL MIAMI GIAMBATTISTA DOES ANOTHER HITS ITS HIGH VALLI REVEALS COLLECTION FOR NOTE WITH PACKED PLANS TO OPEN A THE OUTNET. PARTIES GALORE. MILAN FLAGSHIP. PAGE 11 PAGE 10 PAGE 8 SPINNING OFF LANDS’ END Lampert’s Sears: An Unwinding Tale By VICKI M. YOUNG TIME APPEARS to be running out for Edward S. Lampert. Lampert is chairman and chief executive of- ficer of Sears Holding Corp. and chairman of ESL Investments, which holds a 48.4 percent stake in MONDAY, DECEMBER 9, 2013 Q $3.00 Q WOMEN’S WEAR DAILY Sears. Last week he faced a blow when Goldman WWD Sachs pulled $3.5 billion out of ESL, cutting the funds ESL has under management by more than 60 percent and, as a result, reducing his stake in Sears to below 50 percent since part of the payout was in Sears stock. On Friday, Lampert had to once again shuffle Sears’ assets in order to bolster the ailing retailer’s balance sheet. The hedge fund manager is spinning off Lands’ End, making that division a public company once again. [For more on the spin-off, see sidebar, page 7]. No word yet on the future of Sears Auto Center busi- ness, which the company has been considering divest- ing to raise further funds to keep Sears operating. Even after the latest spin-off, Lampert will still have 48.4 percent of Lands’ End and there is little doubt he and his investors have profited handsomely Gaucho from the Sears investment. While the shares Friday closed down 3.78 percent to $48.09, that comes off a high during Lampert’s ownership that was once $195.18, when the stock rocketed as Wall Street ap- plauded the financier’s asset sales and other moves. As part of his financial wizardry, Lampert in 2006 Cool transferred ownership of Sears’ Kenmore, Craftsman and DieHard brands to KCD, a bankruptcy-remote en- Jack McCollough and Lazaro Hernandez tity. The entity now charges Sears a royalty fee to li- gave their Proenza Schouler collection cense the brands. The $1.8 billion securitization bond a South American bent. Working in an deal, backed by the brands’ intellectual property, was then sold to a Bermuda-based insurance company that interesting mix of fabrics, is also a Sears subsidiary, according to a source famil- they pulled off a look iar with the transaction. that was easy and Lampert’s previous sales of Sears assets and store polished. Here, a 2014 closures include: Sears Canada’s sale of eight properties cotton jacquard SEE PAGE 6 and velvet coat PRE-FALL — worn over a COLLECTIONS plongé leather top Upbeat Holiday Seen and culottes — that loosely resembled a Despite Europe’s Woes Mexican blanket. For more By WWD STAFF pre-fall, see pages 4 and 5. PARIS — ’Tis the season to be jolly for most European consumers. Shoppers in 18 countries, mostly in Eastern and Western Europe, are ready to increase their budgets for the end-of-period for the first time since 2008, according to an annual Christmas study by Deloitte. They plan to spend on average 450 euros, or $613, a rise of 0.7 percent from the same period last year. There is a stark divide between Northern and Southern Europe, though, with the latter still reel- ing from the impact of prolonged austerity measures. And while things are expected to improve, no one is popping the vintage French Champagne just yet: As in the U.S., the holiday shopping patterns in Europe are decidedly mixed. While Germans plan to up their budgets by 6.7 percent and the Swiss by 3 percent, French consum- ers will be paring back their spending by 0.9 percent, Italians by 2.4 percent and the Greeks by 12.8 percent, the report found. Books remain the most popular item, accounting for 31 percent of planned gifts, followed by chocolate (28 percent), cosmetics and perfume (20 percent), CDs (17 percent), cash (16 percent) and clothing and shoes (16 percent), Deloitte said. The European Central Bank, or ECB, forecasts growth in the 17-member euro zone will increase by a modest 1.1 percent in 2014 after a projected decline of PHOTO BY RODIN BANICA 0.4 percent this year. But ECB president Mario Draghi SEE PAGE 12 2 WWD MONDAY, DECEMBER 9, 2013 WWD.COM Traffic, Promotions Weigh on AEO THE BRIEFING BOX in the firm’s North American mainline stores. “We By VICKI M. YOUNG need to deliver stronger assortments and ensure we IN TODAY’S WWD have compelling innovative key items at outstanding SHARES OF American Eagle Outfitters Inc. fell 9.5 value. In order to win, we need to be differentiated percent Friday after the company reported declines and deliver excellence in trending quality combined Julie Macklowe, Danielle in third-quarter results and updated fourth-quarter with a great customer experience,” he said. Schriffen and Yvonne guidance below analysts’ consensus estimates. While Hanson said the company has been work- Force Villareal at Aby For the three months ended Nov. 2, net income ing on initiatives to improve performance in 2014, Rosen’s party. For was down 68.3 percent to $24.9 million, or 13 cents a he expects “conditions to remain challenging and more, see page 10 diluted share, from $78.6 million, or 39 cents, a year we’re planning accordingly.” and WWD.com. ago. EPS on a GAAP basis includes a non-cash charge The company said fourth-quarter diluted earn- of 6 cents a diluted share in connection with the plans ings per share are expected in the range of 26 cents to close its Warrendale, Pa., distribution center after to 30 cents, based on a “midsingle-digit decline” the chain opens its new facility in Hazelton, Pa. Total in comps. Analysts were expecting 39 cents as the net revenues also fell by 5.8 percent to $857.3 million consensus estimate. That’s compared with fourth- from $910.4 million. Consolidated comparable-store quarter EPS of 55 cents a year ago. sales, including its direct channel, fell 5 percent ver- American Eagle is the latest retailer in the sus a 10 percent gain last year. teen space that has reported declines in third- MORELAND Robert Hanson, chief executive officer, said dur- quarter results. LEXIE ing a conference call to Wall Street analysts, “We According to Jeff Edelman, a former retail analyst continue to operate in the most challenging sector and now director of retail and consumer products ad- BY of retail where there has been intense promotional visory services at McGladrey, the problem faced by all PHOTO competition and tepid consumer spending. This the teen retailers is one regarding merchandising. has led to weak store traffic and the high level of Separately, the retailer said that Chad Kessler promotional activity.…In the third quarter, good ex- will be joining the company as chief merchandising Edward S. Lampert had to once again shuffle Sears Holdings pense management was offset by top-line pressure and designer officer for the core American Eagle Corp.’s assets in order to bolster the ailing retailer’s balance and weak merchandise margins.” brand in early February. He succeeds Fred Grover, sheet by spinning off Lands’ End. PAGE 1 He added that business conditions remain tough who is retiring after 35 years. Shoppers in 18 European countries are ready to increase their budgets for the holiday season for the first time since 2008, according to a study by Deloitte. PAGE 1 L’Oréal Stock Gains on Nestlé-Givaudan News Ralph Lauren Corp., in conjunction with Dubai Cares and “Nestlé has announced that it will make a decision By JENNIFER WEIL in 2014 for its L’Oréal stake. However, we would read Desert Palm in the United Arab Emirates, is hosting the nothing from this sale [of Givaudan shares] into a pos- first UAE Ladies Polo Tournament. PAGE 5 PARIS — L’Oréal stock rose strongly Friday follow- sible decision concerning what Nestlé will do,” said J. ing news that Nestlé will sell its 10 percent stake in Safra Sarasin in the note. “Sale to L’Oréal or mainte- Tiffany & Co.’s Michael Kowalski discusses the importance Givaudan, the Swiss fragrance and flavors supplier. nance of status quo are the likeliest scenarios.” of China’s burgeoning diamond and luxury market to his The French beauty giant closed the day up 3.6 per- The bank also reiterated its neutral rating on company’s growth plans going forward. PAGE 8 cent to 126.80 euros, or $173.64 at current exchange, Givaudan and Nestlé. as market speculation percolated yet again that For L’Oréal’s part, company chairman and chief Giambattista Valli in February will officially unveil his first Nestlé could divest its 29.3 percent stake in L’Oréal executive officer Jean-Paul Agon neither confirmed store in his home country of Italy. PAGE 8 in April, once a shareholder pact expires. nor denied during a financial analyst meeting in As reported, Goldman Sachs is managing the sale August that the French beauty giant might buy back Christian Louboutin on Wednesday will open a Tokyo of 926,562 shares of Givaudan through an acceler- Nestlé’s stake in the firm. He said L’Oréal has con- flagship in the city’s Aoyama neighborhood. PAGE 9 ated book-building transaction. The stake is valued siderable financial wherewithal due to a 9 percent at about 1.1 billion Swiss francs, or $1.23 billion. stake in Sanofi, the French pharmaceutical concern Ministers from 159 countries on Saturday agreed on Nestlé acquired the company’s whose 2012 sales were 34.95 billion a package deal of market-opening measures worth an shares in 2002, when it sold the food euros, or $44.94 billion at average estimated $1 trillion to the global economy.