PHOTO BY STEVE EICHNER and 7. pages 6 approach, mass Mizrahi’s Isaac FASHION: ▲ “not an economy.” For more ontheawards, see page4. a Gaga collection anytime soon. The House of Gaga, she says, is heartfelt admissions of not fi tting in as a child. But don’t expect Award ranged from thanking top designers for their support to The singer’s long-winded speech as she accepted the Stylemaker night — and it wasn’t just because of her outfi t and towering wig. Excellence Awards at New York’s Cipriani 42nd Street on Monday Lady Gaga certainly made a splash at the Accessories Council of Marvel Masked WWD September — all in former Mervyns Mervyns September —allinformer their wallets. some shoppersarebeginningtocrackopen spending. And there are indications that as well as reorders, in a offlurry pent-up expectations and strategies. slashing costsandstaffrevisingtheir are emerging as businesses stabilize after budget shortfalls. Signs of improvement persistent high unemployment and state economy seems to have bottomed out despite most populous state said the battered California’s THE WORSTMIGHTBEOVER FOR By KhanhT.L. Tran Looks Toward Renewal Industry in California Storm Clouds Lessen: Kohl’s storesin opened 30California Retail buyers are placing new orders, Retailers andmanufacturersinthenation’s

beleaguered apparelindustry. Women’s Newspaper Daily •November4,2009$3.00 Wear •TheRetailers’ Daily See

Industry ,

Page WEDNESDAY

12

yet practical,page8. holiday ads:upbeat, ▲ MARKETING: Nygård goesbigon Broadway, page5. RETAIL: Keys to

Peter ▲ in Shanghai,page3. ▲ NEWS: Fendi opensmegastore Sportswear 2 WWD, WEDNESDAY, NOVEMBER 4, 2009 WWD.COM Polo 2nd-Qtr. Profits Rise 10.2 Percent By Vicki M. Young lift Polo’s shares $1.76, or 2.3 percent, to $78.47. Revenues fell to $1.37 billion from $1.43 bil- WwDwednesdSportswearay Consumers are beginning to shop lion. Sales fell 3.6 percent to $1.33 billion, in- based on “want” again, rather than simply cluding a 3.7 percent decline in wholesale sales FASHION “need,” but it’s still too soon to tell what effect to $814.6 million and a 3.4 percent decrease in Isaac Mizrahi’s latest destination is QVC, where he retail sales to $512.5 million. Same-store sales 6 the change will have on fall 2010 business, ac- will host “Isaac Mizrahi Live,” which will feature a cording to Polo Ralph Lauren Corp. president fell 6 percent, reflecting declines of 18 percent at wealth of his own favorite goodies. and chief operating officer Roger Farah. Ralph Lauren stores, 4 percent at factory stores Speaking of the buying public, Farah said, and 3 percent at Club Monaco stores, with cur- GENERAL “They’re not as interested in sales as they were a rency fluctuation adding to the declines at Ralph year ago. They’re making selections based on what Lauren and factory stores. Sales at ralphlauren. 1 Signs of improvement are emerging as California they want. If they like the product, they buy it.” com posted a 12 percent gain in the quarter. retailers and manufacturers stabilize after slashing He made the remarks following Polo’s disclo- Gross margin rose to 57.1 percent of sales costs and staffs and revising their strategies. sure Tuesday of second-quarter profits that grew from 55.2 percent in the 2008 period. Cost of First Eastern Investment Group has taken a 15 10.2 percent, as a favorable tax rate and lower goods sold declined $51.3 million, to $589.4 mil- 2 percent stake in Lulu Guinness, and have forged a expenses helped the company compensate for a lion, while selling, general and administrative venture to expand throughout Asia, excluding Japan. 3.8 percent decline in revenues. expenses dropped $6.6 million to $525.7 million. Farah said he believes that, as the industry “We are operating today as a leaner, stronger or- A favorable tax rate helped Polo Ralph Lauren post a “anniversaries” the depressed sales results of a ganization than ever before, even as our long-term 2 10.2 percent gain in income to $177.5 million from year ago, customers are showing a new interest growth prospects remain compelling,” said Ralph $161 million. in shopping and buying. Part of this, he noted, is Lauren, chairman and chief executive officer. EYE: Lady Gaga made a big splash at the ACE that consumers know inventories are lower than In the six months, net income dipped 0.7 s 4 they were a year ago, and desirable items might percent to $254.3 million from $256.2 million, Awards…WWD finds out what some of the be out of stock if not purchased immediately. with EPS flat at $2.51 a diluted share. Total rev- attendees at the Library Lions benefit are reading. “This holiday season will teach us a lot,” he enues declined 5.7 percent to $2.4 billion from Tod’s SpA chief executive officer Diego Della Valle said said. “Orders for spring 2010 — placed in July — $2.54 billion. 5 Tuesday the firm should beat full-year forecasts if it were still cautious. Most retailers felt that if they The company updated fiscal 2010 guidance continues to perform well in the run-up to Christmas. are [going to run] short, they can chase sales a and said it now expects revenues to decline by little bit. They planned carefully to get through a midsingle-digit rate, compared with an earlier 5 Canadian Peter Nygard will open a 2,500-square- holiday, and in January and February they’ll expectation of a high-single-digit decline. foot flagship on Broadway and 40th Street in New evaluate how they feel about fall 2010.” “We continue to believe that Polo Ralph York on Friday, next door to his world headquarters. The trials and tribulations of the past year Lauren is well positioned to emerge from the MARKETING: Nostalgia and emotion will be plentiful also have produced a side benefit: “Customers, current economic climate as a stronger compa- Erin Wasson 8 in holiday ad campaigns, but may not be enough to retailers and wholesalers are more aligned ny. In our opinion, this is a very well-managed shake most Americans out of their sleepy spending ways. than ever over when product needs to be in the company with a stable of resilient brands,” stores,” said Farah. said Jennifer Black, analyst at Jennifer Black Polo, which so far this year has generated & Associates. Classified Advertisements...... 15 nearly 56 percent of its revenues through whole- Farah said during the conference call to Wall To e-mail reporters and editors at WWD, the address is sale operations, was among the first apparel Street that an increasing portion of the firm’s [email protected], using the individual’s name. firms to emphasize working with retailers to get capital expenditure is being allocated to its WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2009 product onto the sales floor closer to need. international markets, or 50 percent this year FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. VOLUME 198, NO. 94. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one In the three months ended Sept. 26, net in- versus 35 percent last year. On Jan. 1, the firm additional issue in January, May, October and December, two additional issues in March, April, June, August, September come grew to $177.5 million, or $1.75 a diluted will take over control of its distribution in eight and November and three additional issues in February) by Fairchild Fashion Group, which is a division of Advance share, from $161 million, or $1.58, in the year- Asian countries — China, Hong Kong, Indonesia, Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Condé Nast Publications: S. I. Newhouse, Jr., Chairman; Charles H. Townsend, President/CEO; John W. Bellando, Executive Vice ago quarter. 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According to court documents, only 14 class wages by forcing them to work through breaks members raised objections to the settlement. DAILY and other means. The agreement also calls for Wal-Mart to take In December, the Bentonville, Ark.-based measures to ensure it complies with wage and retailer said it intended to end 63 class-action hour laws. When it revealed the settlements QUote labor suits filed in state and local courts be- last year, the retailer said the allegations in the tween 2000 and 2007. Wal-Mart said it would pay suits were not representative of the company as between $352 million and $640 million to settle it is today. Fashion without reinvention “doesn’t exist. ” First Eastern Takes Stake in Lulu Guinness — Isaac Mizrahi. Page 6. By Samantha Conti alone stores, in Tokyo and Osaka, said Mason. Lulu Guinness is First Eastern’s first and only TODAY ON LONDON — British accessories brand Lulu fashion investment. Founded in 1988 by Victor Guinness has a new Hong Kong investor — and L.L. Chu, the private company’s stakes are chief- ambitious growth plans in Asia. ly in China, and include infrastructure projects, The Hong Kong-based First Eastern light industries, real estate development and fi- Investment Group, which specializes in China- nancial services. based deals, has taken a 15 percent stake in “With our rich local and regional expertise, WWD Lulu Guinness. The two groups also plan to form as well as extensive investment experience, I am .com a 50-50 venture to expand the brand throughout confident we will add substantial value to Lulu Asia, excluding Japan. Guinness in their expansion across the Asia re- “In five years’ time, we’re expecting 70 percent of gion,” stated Chu, chairman of First Eastern. • Back in Time: the brand’s overall revenue to come from the Asia Chu is a powerful figure in the region, having Designers, celebrities and region,” said Lulu Guinness chief executive officer served as director and council member of the socialites at home Martin Mason. “We currently have a minimal pres- Hong Kong Stock Exchange. He is a foundation ence in the region, and we’re keen to find a partner.” board member of the World Economic Forum in • More images from the ACE

He declined to give details on how many Geneva, and co-chairs the Forum’s International reland Awards, the Library Lions gala store openings are planned, but said the num- Business Council. He was also the man behind Mo and the Shiseido/RxArt event ie x ber would be significant and the first units would Sir Richard Branson’s failed bid to rescue the e

L • Additional looks from Isaac open in China and South Korea. ailing British bank Northern Rock in 2007. by Hanna Liden and o Mizrahi’s collection for QVC Lulu Guinness already has a strong wholesale First Eastern has offices in Hong Kong, t Rachel Chandler and licensing business in Japan, as well as two stand- Beijing, Shanghai, Dubai and London. Pho • Global breaking news WWD, WEDNESDAY, NOVEMBER 4, 2009 3 WWD.COM Fendi Celebrates Shanghai Opening By Lisa Movius malls,” he said. “It set the tone and has led to hundreds of projects now in the plan- ning and fi nalizing stages, but it is still the top.” SHANGHAI — Fendi chief executive officer Michael Burke wasn’t reluctant to show He cited as rising contenders Beijing’s Shinkong Place, Charter malls in his enthusiasm for China during a visit here last week to open a new flagship in Guangzhou and Shenyang, and others in Hangzhou, Chengdu and Shenzhen. “In the Shanghai. next two years, there will be a dozen equivalents of Plaza 66 coming out of the ground. “Apart from staff problems it is easier to do business in China than in Italy because There have been various ones that have lacked several elements, such as suffi cient it is a country that values work, values speed, looks to the future and wants to prog- parking. It’s an almost magical mix. I think [China’s retail] real estate shortage is ress,” he said. “It is an exciting moment in China, when everything is possible.” disappearing,” said Burke. Those possibilities include the brand’s landmark fashion show on the Great Wall Fendi’s new Plaza 66 store is the by-product of the Great Wall show two years ago of China in October 2007 — and now the opening of its largest store in the Asia-Pacifi c and “is the fi rst of the next generation. All of our stores will grow to this size, refl ect- region, spacious enough to include a room dedicated solely to furs and with its two ing the full range of Fendi, and showing that we’re not an accessories brand. That fl oors dominated by a fountainlike chandelier. perception is what happens when you grow at this fast a rate” and stores in some cit- The 53,819-square-foot space opened in Shanghai’s Plaza 66 on Oct. 30 with a run- ies are accessory dedicated. “That is why we did the show on the Great Wall, to show way show and cocktail party attended by Burke and Silvia Fendi, joined by regional that Fendi is a fashion house. Because of the Great Wall, we can now have a room just of fur. It is the only store in China with a fur room. Also, China is becoming more sophisticated, and we sell more fur here than in the U.S.” Furs on average constitute about 10 percent of Fendi’s China sales, and as much as 20 percent during the winter. Leather goods dominate at 30 percent of sales, small leather goods contribute 20 percent, shoes 10 percent, and ready-to-wear and acces- sories are both 15 percent. According to Fendi’s Asia-Pacifi c president Pierre Balsan, store performances differ little across different parts of China and different tiers of its cities; what mat- ters is the product range available in the stores. “It’s similar if it’s a similar mix,” Balsan said.

JACKSON LOWEN Fendi has 16 stores in Mainland China. “The top ones are Shanghai, the two in Beijing, and Chengdu and Guangzhou,” Balsan said. “It took us a while to reach where we are now in business [at the fi rst tier stores], but Hangzhou and Chengdu

PHOTOS BY caught up very fast.” Burke added: “China is our single-largest market in Asia. Our China strategy is our Asia strategy, plus traveling Chinese. While the 2009 numbers are not out yet, there were more Chinese than Japanese tourists in Rome this year, so more than any other nationality. Chinese travel differently than Japanese. Japanese travel to buy; Chinese do shop, but they bypass Milan and go to Rome. They don’t care for Milan Models on the runway at the fl agship opening. because it has no history.” One driver of international shopping by Mainland tourists celebrities like Hong Kong actress Carina Lau, Chinese models Du Juan, Le is the duties slapped on luxury goods bought domestically. For Ji’er and Xiong Dailing, and Olympic gold medalists Guo Jingjing and Liu Fendi, prices are 25 percent higher in China, said Burke. Xuan. Fendi also brought in fur and leather craftspeople to demonstrate to On piracy, Burke said it “is a worldwide problem, not a Chinese consumers the workmanship behind the company’s products. Chinese problem — and more one of policing than manu- The new store, Burke said, represents the maturation of Fendi’s China facturing. I feel my country, Italy, should do better, and can’t presence. “It’s gratifying to see, fi nally, a store that tells the whole story of blame China. It will take international cooperation, but it’s the brand….Ours has been the standard China development track: start in happening. Also, luxury is going back to smaller runs, more a hotel lobby, from the mid 1990s through about 2002. Then it was a free- creativity, so it is harder for counterfeiters. The days of mak- standing storefront, with the consumer sophistication growing, but not to Olympic diver ing 100,000 of the same bag are over, and that was good for the point of selling $100,000 sables.” The fl agship, three years in the making, Guo Jingjing. counterfeiters. We have to stay one step ahead, and keep our marks the beginning of a third phase. “Now, Shanghai is no different from supply chains strong.” Fifth Avenue in New York.” The economy presents less of an obstacle, at least within Burke recalls observing fi rsthand all those stages, starting in 1995, the same year China, he said. “Six months ago there was a slight scare as exports dropped, but the Fendi fi rst arrived in Shanghai with a store in the old Hilton on Huaihai Lu. Back Chinese government has been one of the most astute in managing the crisis, so de- then, he reminisced, “there were none of the same airports as today. You had to know spite the crisis we’re showing strong growth here.” how to push and shove to get onto the plane. Now it is more civilized than many cities Internationally, he continued, “the recession in fashion is a problem of sameness. in Europe. It was all bikes and bikes and bikes then. And much noisier.” There is not enough risk taking, too much outsourcing; brands are not creative.” Burke was also in Shanghai during the 1999 opening of the Nanjing Lu luxury des- Three factors — “true creativity, true quality, and great service and fantastic store tination Plaza 66, but at that time for the launch of the Dior store that still occupies environment” — are necessary, and “if any of these are missing [in brands], they won’t a prominent corner on the fi rst fl oor. “Plaza 66 is the granddaddy of Chinese luxury make it through the recession.” American Eagle Goes Bold in Times Square By Sharon Edelson O’Donnell said. The offerings will include aerie boy briefs and thong undies with graphics of such New York NEW YORK — American Eagle’s four-floor, 25,000-square- neighborhoods as SoHo, Downtown, Uptown, the West foot flagship opening Nov. 19 in Times Square here is an Village and Brooklyn, as well as iconic New York imag- entirely different animal for the retailer –— double the ery such as taxi cabs, apples and subway maps. “We’ll size of the next largest unit in the chain. do signifi cant New York products, without being corny,” In addition, the fl agship, at 1551 Broadway at 46th O’Donnell said. The aerie f.i.t. collection will include Street, will have a 25-story interactive LED sign — that’s exclusive graphic T-shirts that say “Run Central Park” 15,000 square feet of outdoor electronic signage. All the and “Run NYC” and Ts designed by graffi ti artists. wattage will be used to capture consumers’ attention. Denim and bras are being highlighted in the store. “They kind of know we’re here,” said Jim O’Donnell, A Denim Library will feature more than 20,000 pairs chief executive offi cer of American Eagle Outfi tters Inc. of jeans at any given time and a Bra Conservatory will “Now they’ll really know we’re here.” boast 7,500 bras in a boutiquelike environment. Sexier, American Eagle operates three units in Manhattan dressier matched sets of camis, bras and undies in sheer — on West 34th Street, Union Square and Broadway fabrics, exotic prints, lace and sequins will be offered. in SoHo. “They are going to be fl aunted,” O’Donnell said of the O’Donnell recalled seeing the site, a former Howard bras. For the fl agship, a premium denim line was de- Johnson’s hotel, for the fi rst time. “I looked at that signed and developed. property and said, ‘This thing has greater value to the Other items available only in the fl agship include company than just a store,’” he said. “With its physical outerwear in fake fur, leather, sequin-embellished tops location and with the dynamic of the domestic and in- and an expanded footwear selection. A rendering of ternational consumer, the national and international “The way the store’s laid out, it won’t be just for teens; American Eagle’s exposure could add a whole other dimension to the it will reach a broader demographic,” O’Donnell said. LED sign. American Eagle brand.” The store will experiment with new features and market- As for the signage, the company plans to go big and ing forms in the realm of technology. “We’ll have mobile POS bold and be “part of the Times Square landscape,” devices where we can check out a customer in a variety of With a purchase, customers will be invited to par- O’Donnell said. “We priced the signage and if we sold different places in the store,” O’Donnell said. “We’re experi- ticipate in “15 Seconds of Fame.” They’ll pose in a mini every inch of that screen out to third parties, we would menting with a few other things we call line busting.” photo studio, and minutes later their photo will be pro- offset the entire rent of the building. At some point we O’Donnell declined to give sales projections for the jected onto the outside screen for Times Square to see. might do some cobranding with some companies.” fl agship, but said, “In terms of where it’s located and In keeping with the neighborhood, store hours will be The fl agship will carry anywhere from 10 percent the size of the store, I pro forma it at a very reasonable 10 a.m. to 1 a.m. to 20 percent exclusive product. “During the summer expectation. I’m hoping it will exceed it. It’s designed to O’Donnell is anxiously waiting to fi nd out “What is months and holidays, we’ll have more unique products,” break even.” the incremental residue we get as a result of the buzz?” 4 WWD, WEDNESDAY, NOVEMBER 4, 2009 WWD.COM Molly Sims and Diane von Furstenberg READ CARPET The New York Public Library honored novelist Annie Proulx and “Eloise” illustrator Hilary Knight during its annual Library Lions benefit on Monday. While literati, celebrities and fashion folk climbed the marble staircase, WWD took the opportunity to find out what they’re reading now. “When You are Engulfed in Flames,”

by David Sedaris.s ­— Rachel Roy

“The Seven Mountain-Travel Books,” by H.W. Tilman. “Tilman was an active mountain climber in the mid- to late-Twenties.” Lorenzo Martone and Marc Jacobs — Honoree Annie Proulx For more, “The Paris Years of Thomas Jefferson,” see WWD.com. by William Howard Adams. — Charlotte Moss “The Gathering Storm,” by Winston Churchill. — Ray Kelly “The Hemingses of Monticello: An American Family,” by Annette Gordon-Reed. “It’s about the slave children fathered by Thomas Jefferson.” — Susan Fales-Hill ichner E “Imperial,” by William T. Vollmann. teve

S — Fran Lebowitz

Agyness Betsey Johnson Deyn “God Is a Bullet,” by Boston Teran.

photos by ­— Bryant Gumbel “The Lost Symbol,” by Dan Brown. — Henry Louis Gates Jr. “Free for All: Joe Papp, the Public and the Greatest Theater Blonde Ambition Story Ever Told,” by Kenneth Turan. By Sophia Chabbott present InStyle Magazine’s Hal Rubenstein with the — Nora Ephron Marylou Luther Award for Fashion Journalism. It was a battle of the blondes at Monday “He was instrumental in turning us away from “Labels.” night’s Accessories Council Excellence Awards. supermodels into the world of Hollywood, he — Frank Langella While revelers at Cipriani 42nd Street waited pa- changed magazines forever. Hal is a man born to tiently for the chance to gawk at Stylemaker Award be in front of a camera,” said Klein.

winner Lady Gaga — who was tardy to the black- Other honorees included Bottega Veneta cre- s “The Trump Card,” by tie fete, arriving at the end of the first course — an- ative director Tomas Maier for Designer of the other blonde bombshell captivated the attention Year; Nine West’s Fred Allard with the Influencer Ivanka Trump; “It’s Your of guests such as Agyness Deyn, Alexander Wang, Award; Gilt Groupe for Retail Innovation, and V Time,” by Joel Osteen and Molly Sims and Diane von Furstenberg: Barbie. Magazine for Magazine of the Year. “Our Choice,” by Al Gore. With tables outfitted with Barbie dolls and con- The highlight of the night, however, was the tainers of doll-sized metallic hobos, crocodile-em- surprising 10-minute lethargic monologue by Lady “They’re all on ‘The View’ bossed totes and stiletto ankle boots, guests acces- Gaga, who was introduced by Jacobs, who marveled, this week.” sorized the 11-inch doll, to much amusement. “She is phenomenal in every sense of the word. Her ­— Barbara Walters Betsey Johnson — who presented Zappos. unique vision is spiritual. It’s inspiring to me and com with the Retailer of the Year award, and to many.” had the brand name emblazoned on the back of Gaga, who came on stage flinging talcum powder her pants — wedged a doll into her chignon, and from her hands, causing a cloud of white smoke, said, Marc Jacobs and Lorenzo Martone got funky with “I felt like a freak for so long in my childhood….When Barbie at their table, stripping Barbie down I began to perform, I found out that I had some to her birthday suit. When Lady Gaga finally freaky friends to play with.” arrived — in a black lace mask and wig that She cited Jacobs, Alexander McQueen, matched the consistency of cotton candy Stephen Gan, David LaChapelle and Hedi s “Wolf Hall,” by Hilary and towered over her ensemble of a blouse Slimane as some of her enduring supporters under a bra, underwear and several pairs throughout what the 23-year-old songstress Mantel. of pantyhose — she joined in the fun with termed her “long” career. ­— Nancy Kissinger Jacobs and Martone. “Hedi Slimane is a muse for the “Somehow they [the Barbies] ended up House of Gaga,” she said. “He’s like a looking like my album cover,” the singer palm tree [in that] he shades a girl from deadpanned. New York [from] the Hollywood sun.” s “I’m, like, totally not “Barbie always looks good,” said von She thanked LaChappelle, and then reading anything right now, Furstenberg, who presented the doll with Mario Testino, for “taking the first photos of which I know sounds really the Fashion Icon Award and was herself me that made me feel like a real woman.” the winner of the Accessory Visionary On her intimate Warholian “factory” stupid. I got ‘The Road Less Award. “She doesn’t age, she doesn’t look of unknown creative collaborators, which Traveled’ for my birthday tired and she doesn’t need a manicure…and she named for the first time during her and loved it.” when she has a good day, she contributes to acceptance speech, she proclaimed the — Leighton Meester the CFDA.” House of Gaga “is not an economy” and Subversive designer Justin Giunta said would never do a collection. having only brothers precluded him from a As for the elusive group of creators, she childhood rife with the company of Barbie, named designer Matthew Williams, stylist Ken, Midge and Skipper. Deyn, who accepted Nicola Formichetti and milliner Nasir Mazhar, Burberry’s Brand of the Year Award on behalf who created the Orbit headpiece Gaga famous- of creative director Christopher Bailey, who ly wore on Ellen DeGeneres’ show. was traveling on business, said, “Barbie lent Gaga, who considers “a condom” the most me her laptop and she’s got it on Skype, so important fashion accessory of all, was flat- [Bailey] says thank you.” tered to be receiving the award. Erin Wasson presented Toms Shoes “[Tonight,] I had no gloves, and the outfit aquino s

founder Blake Mycoskie with the needed gloves. So Nicky [Formichetti] decided john Humanitarian Award. “I’m proud to pres- to paint me white. That’s what happens when “The Search for Modern

ent this to a fellow Texan,” said Wasson. you don’t have the right accessory,” she said. China,” by Jonathan Spence. t

Calvin Klein made an appearance to Erin Wasson — With contributions from Caroline Tell — Henry Kissinger photos by WWD, WEDNESDAY, NOVEMBER 4, 2009 5 WWD.COM Nygård Makes Move Up Broadway By Sharon Edelson from moderate to higher-priced. “People cross over,” said Nygård’s Nygård, noting that a unit opened in Kenaston, Winnipeg.

NEW YORK — Peter Nygård’s name is writ large on Broadway AQUINO future world “We’re trading our customers up to the next label.” between 40th and 41st Streets — the Canadian chief execu- headquarters. The stores also offer DFX, or Designer Fashion Exchange, JOHN tive officer of Nygård International wants the city to know he merchandise, discounted 50 to 75 percent. “We don’t sell to has arrived. TJ Maxx,” Nygård said. “We control our product. We have off-

“I’ve been in New York for a while,” the designer said. “I PHOTOS BY price stores in locations that don’t hurt us.” The New York was at 1411 Broadway. It’s taken a long time for us to make fl agship will have a DFX section where merchandise will be a statement.” discounted after a certain number of weeks. That statement features the letters of his name in blue Nygård said headquarters employees will work closely lights rising seven stories high on the facade of 1435 with store staff. “This will become a lab to fi ne-tune and test. Broadway, Nygård’s new world headquarters opening in We’ll do information gathering and fi ne-tuning on products.” March. The building will house offi ces, design studios, show- He calls the fl agship concept the “Nygård Future Store” rooms and entertainment venues. for its Space Age design achieved with new plastics and other His name is also spelled out in blue on the front of his new building materials. The store has a lounge with seating and fl agship at 1431 Broadway, a few steps from the headquarters. A computers to occupy signifi cant others as women shop and blue ticker surrounding the perimeter of the 2,500-square-foot also has a waterfall in the center of the room. Above the wa- store alerts customers to the grand opening on Friday. Inside, terfall are blue ceramic halide lamps and blue plastic circular 26 screens play fashion show loops and explain the Nygård col- forms Nygård describes as “the rings of Saturn.” The circular lections. Small screens face consumers, entertaining them as cash wrap has white counters and blue bases with built-in they complete transactions at the cash wrap. A large video wall lights. Small blue lights are also embedded in the fl oor. The shows photos of Nygård with VIP customers such as Pamela walls and ceiling are bathed with LED light that produces a Anderson. All those screens are dwarfed by a 42-by-86-inch shade of what Nygård called “white blue.” He said he worked monitor that will broadcast fashion shows to with lighting experts in the Orient to develop the color. shoppers. Even larger is the 7-by-14-foot Nygård is introducing chrome mannequins, futuristic- screen outside the headquarters. looking models that rotate 360 degrees and that will inhabit Nygård’s company has an in- a huge pedestal. house video production unit that On Tuesday, “live” mannequins were practicing for a fi lms fashion shows, interviews fashion show that will be presented at the opening party on and other entertainment for Thursday night. Marching down Broadway from 1435 to 1431, the stores. one group, dressed in embroidered jackets, leggings and He expects the store to do high-heeled boots, wore headpieces decorated with sequins $1,000 a square foot in sales. and feathers that looked as if they could have belonged to a Undeterred by the recession, group of Las Vegas showgirls. Nygård said the headpieces Nygård said he wouldn’t let a Peter with their vertical feather crowns were meant to invoke the drop in consumer confi dence stop Nygård Empire State Building. Other models with silver-painted him. Business is up 25 percent over faces were meant to emulate the chrome mannequins. last year. “We’re approaching the $1 But Nygård is not just about pretty clothes and custom light- billion mark,” he said. ing. “We have tremendous inventory control systems,” he said. Prices range from $58 for a blouse in While the fl agship is just south of Times Square proper, the Bianca Nygård petite line to $458 for a Nygård said, “We treat Broadway as an outdoor mall. It will suede and leather jacket from Nygård. The designer has no be the biggest outdoor mall. We’re expecting this street to illusions of being a luxury brand. “We are really a mass mer- become a big shopping street. chant,” he said. “We sell volume.” “I may open more stores in New York,” he said. “If we Nygård sells to Dillard’s, Macy’s, Sears and Hudson’s Bay, see this store getting to $1,000 per square foot, if it works, among other retailers. New York is the perfect location.” He avoids malls, how- He’s also opening Nygård Fashion Parks in Canada, Models rehearse ever, because “the malls already have my customers in de- 14,000-square-foot stores that sell the entire range of labels the fashion show. partment stores.” Tod’s, Valentino Bullish on Outlook Coviello Opens Orchard Street Unit in N.Y. By Andrew Roberts NEW YORK — James Coviello’s new 400-square-foot store at 70 Orchard Street reeks of authenticity. MILAN — Tod’s SpA chief executive officer Diego Della Valle said Tuesday Brass gas lamp fi xtures with milk-glass shades the Italian luxury shoe and leather group should beat full-year forecasts if from the 1890s hang in the windows, and antique it continues to perform well in the run-up to Christmas. glass cases display Coviello’s hat designs and bell “The income fi gures in recent days indicate that we will close 2009 [in a jars. Walls are covered in vintage wallpaper from better position than 2008] and if Christmas follows suit, we will close above the Twenties and Forties hung by Coviello him- market expectations,” Della Valle said by video link at a fashion and luxury self, and the sign on the door was hand-painted goods conference here. in 23-karat gold leaf. Revenues were growing, Della Valle said, and the group, which owns Coviello said he expects the store, his fi rst re- the Tod’s, Hogan, Fay and Roger Vivier labels, had boosted its cash pile tail venture, to do $500,000 in its fi rst year. and improved its cash fl ow. He added the objective for 2010 was to increase “The store has created new challenges,” he said. the EBITDA margin, while continuing to grow the top line. “There’s a big learning curve. But having wholesale “[This] is the real end goal,” he said. exclusively, you can really lose touch with the cus- Della Valle said in August he anticipated “good results” in the second tomer. I’m going to work in the store on Saturdays. half of 2009, after net profi ts increased 3.1 percent to 41.9 million euros, I know the clothes better than anybody. A designer or $55.9 million, in the fi rst six months, beating analysts’ estimates. Sales is a natural salesperson.” for the period increased 3.4 percent to 359 million euros, or $479.3 million, Coviello is looking forward to merchandising driven by Hogan and demand for shoes in Italy and Asia. his collection as he intended it to be presented. Six-month earnings before interest, taxes, depreciation and amortiza- “I’m fi nding that retailers don’t really know what tion rose marginally to 77.8 million euros, or $103.8 million. As of June, the I’m about,” he said. “They don’t know how to rep- group’s net fi nancial position was positive and equal to 100 million euros, resent my line. Everything I’m going to show in or $143 million, almost double what it was at the same time last year. the showroom, I’m going to shorten 4 inches for Dollar fi gures were converted at average exchange rates for the periods the store. The neighborhood is trendy and there’s to which they refer. also European tourists.” Tod’s is slated to report third-quarter results on Nov. 11. Prices for Coviello’s fall designs range from Meanwhile, Valentino Fashion Group ceo Stefano Sassi said Valentino $175 for a printed top to $695 for a tweed jacket Inside James Coviello’s sales were improving at wholesale, as the positive critical response to de- with a pink shearling collar. Coviello, who de- store at 70 Orchard Street. signers Maria Grazia Chiuri and Pier Paolo Piccioli’s spring collection signed jewelry for Erickson Beamon when he JOHN AQUINO PHOTO BY translated into increased orders. was 19, is creating a jewelry collection. The de- “We have had [positive] feedback both in terms of style and image, signer, who also was a milliner earlier in his career, will offer a selection of his hats, and he’s and on a commercial level, which is an essential step,” Sassi said on the designed tote bags from leftover fabric. Art books and gifts round out the assortment. “I’m sidelines of the conference, which was sponsored by Intesa Sanpaolo and talking to retailers about bridal,” he said. “It would suit me. I’d have about fi ve or six styles Pambianco. in the store.” “The commercial feedback [for spring] has exceeded our original expec- A large room behind the store houses Coviello’s design studio, where seamstresses will be tations….The returns at wholesale are greater than [for fall ’09]. There is available to do free alterations for customers. growth, and this is an important and encouraging signal.” Flower arrangements made from bark, dried berries and leaves and tall grasses give the He added the fall collection had also done well in terms of sell- store a woodsy feeling. Coviello said he wanted the two display windows to look like a forest, so through. he fi lled them with huge branches and fallen leaves. “In short, the Valentino product has increased its performance in this “This is going to be the most important thing I’ve ever done,” Coviello said. “I wanted to be [period],” Sassi said. “We are seeing a discernable improvement in the per- more creative. I wanted to go back to why I wanted to be a designer.” formance of prêt-a-porter and a major growth in shoes.” — S.E. 6 WWD, WEDNESDAY, NOVEMBER 4, 2009 Talking Shop With Isaac

By Bridget Foley Isaac Mizrahi with a model in Once upon a time, the his gold paillette tank, price not stage-and-screen Maria von Trapp available, and silk pants, $140. sang about bright copper kettles, warm woolen mittens and a few other of her favorite things. Were she around today, Maria might do more than hum a few bars and trek the Alps, heading instead for that things-friendly enclave of West Chester, Pa., where the right combination of personality and product can translate into success worth singing about. That locale, QVC headquarters, is the latest destination of Isaac Mizrahi, the shopping network’s newest and most high-profile fashion s Tartan plaid recruit. The designer’s “Isaac Mizrahi cheesecake, $40, and Live,” slated to make its debut Dec. 4, plaid platter, $40. will feature a wealth of his own favorite goodies, the first installment with a holiday slant. Tonight at his company headquarters, Mizrahi will host a press preview of the far-flung lineup, everything from handbags and berets to toggle coats and sequin Ts to cheesecake, in a launch price range of about $32 to $300. “If you feel passionate about something,” Mizrahi says, “they say, ‘Do it.’ Sometimes they cut 300 pieces and sometimes, three trillion.” Or bake. Regarding that cheesecake, dressed in tartan no less, it hails from Junior’s and will feature a Mizrahi-mandated chocolate cookie crust, while keeping company with Mizrahi- selected chocolate chip cookies and banana nut loaf. And pardon the designer if, when asked about the credibility of his gastronomic selections, he turns a bit defensive. “To me, they’re very important, wonderful things,” he says, adding that he did “1,000 tastings.” More to the point, he maintains they make perfect sense within his repertoire. “I Wool blend beret with have been building and building and rhinestones, $32. s building over the past 10 years. I have been doing a TV show with a lot of cooking segments, working with Lidia Bastianich and Mario Batali. It has made me quite good at tasting food. I’ve been a judge on ‘Iron Chef.’” The point, lest one miss it, is that Mizrahi is expanding in what he calls a “pan-discipline” direction, his second multicategory gig, following the Target deal under which he designed a range of fashion and lifestyle products from 2003 to last year, until he left to join Liz Claiborne. “I feel like I have built a certain look, a language, a certain sense of color and whatever,” Mizrahi explains, noting his use for Target of huge, photo-print flowers on hot-selling plates and bedding. “People looked at them and said, ‘Oh, just more popular culture that someone is representing.’ But if you look back, there were no bubble-jetted giant printed flowers until I did them in — that was the Seventies. Now it’s brand who cares deeply about it, on whatever the collection, on the inside of the name. As I build my brand, I think about level. What makes us trust Martha raincoat that was on the cover of W Martha Stewart and her very upward to talk about chickens and trees and on Yasmeen Ghauri. I don’t remember s Tartan plaid boxes trajectory. She has always been a great window treatments? What makes us anyone doing that before me, and it (two sizes), $55 and $70. inspiration to me. think that Oprah Winfrey would have becomes part of the vernacular.” “I love my product,” Mizrahi [so successful] a book club? Like, ‘Hey, Mizrahi is adamant that his role at under the partnership will radiate his continues. “I believe in my product. Oprah, what do you know about reading, QVC is far more than that of pithy camera- upbeat aesthetic. “I create, that’s what If I do plates, if I do bedding, which I just because you sit there and talk to ready pitchman. He is involved in the I do. I’m an artist. I’m a designer,” he did, if I render cookies, I do it in the people?’ Well, she knows a lot about design process from start to finish, and stresses, while making no apologies for same way that I think about a couture books. She’s been talking to authors her feels confident that every item produced his sizable aspirations. “Household name dress. [My approach] bespeaks someone whole life. So, it’s one thing [marketed] WWD, WEDNESDAY, NOVEMBER 4, 2009 7 WWD.COM Talking Shop With Isaac

Teapot, creamer and sugar bowl, $60; set Patent leather of four teacups and clutch, $79. s saucers, $37.

Tartan cotton qualified among the major names pajama set, in fashion to hook up with QVC as $67; plaid a springboard for his lifestyle throw, $49. aspirations. He was a trailblazer in both the fashion-entertainment fusion (“Unzipped,” among his various television pursuits) and, via Target, in the formerly taboo counterpoint of high and low. “I think I had the first [such] fashion show in the world,” he says. “I said that once — high- Leather saddle low — in an interview, and handbag with ring there was a snarky backlash. detail, $250. But maybe we weren’t the first; maybe it was in the background of things.” Now, Mizrahi can’t wait to hit the studio — or studios, as some segments will air from his own headquarters, Jacket, $129, and some from QVC’s — and and skirt, $50. take his mass message directly to consumers. Which raises the issue of his much-hyped deal to design the Liz Claiborne New York collection, the distribution of which is being pulled from stores, other than Claiborne outlet stores, and will follow Mizrahi’s own label to QVC. He maintains there’s no conflict, while acknowledging that making a clear distinction between the two lines might take some time. “I don’t want to say that the s Plaid scarves Liz line is older, or more for working ranging from women, because that’s not the case,” he Wool blend $35 to $48. says. As for that collection’s exit from duffle toggle traditional retail, the designer declines coat, $198; to discuss it except to note that where cashmere Red bow

plates, $40 for his work was presented as a concept, it sweater, $88, s a set of four. did well. “I’m a gentleman,” he says. “I and taffeta don’t want to point fingers.” skirt, $60. Mizrahi does stress that, as excited as he is about QVC, which also has an Internet sales component, he believes firmly in the great names of traditional retail. “The words ‘Neiman Marcus,’ the word ‘Macy’s,’ the word ‘Saks,’ the word ‘Bergdorf,’ those are meaningful words,” he says. “They are meaningful ideas, meaningful brands. Those have tons of amazing, monstrous history. They will find a way into the future, they will. Because of those words, aquino their monstrous brand power.”

john Which is not to say that he

by thinks the major retailers, or any other aspect of fashion,

photos can continue unchanged. “There are always going to be people who have new ideas, to the public leads to another. I’m just and also his energy,” says Doug Howe, who are controversial, and saying, maybe at the end of my trajectory, executive vice president and chief they’re always going to spur we’ll look back and go, ‘Oh, remember, merchandising officer of QVC. “You have Marc Bouwer, Vivienne Tam, Erin some kind of fashion reality,” before him, there was no X, Y, Z. Just as to have an obviously compelling product Fetherston, Rachel Zoe and Lori Mizrahi says. “You will always notice before Martha, there weren’t people who offering. Then, it is absolutely critical to Goldstein, have preceded Mizrahi into people looking a certain way, because cooked and had TV shows and farms and have somebody who’s very engaging and the QVC fold, his lineup is by far the that is the zeitgeist, and everyone wants that and that and that.” very entertaining to educate and talk to most ambitious, the first time in the to look that way one day. That’s what From the QVC angle, product may the customer with regard to the product. company’s 23 years that a designer has fashion is. This is exactly what fashion be king, but it will face a shaky reign He will be amazing.” been positioned across so many of the does all the time. All it does is reinvent without the force of personality. “We’re Though numerous fashion network’s categories. itself. Fashion without reinvention enamored by Isaac’s body of work personalities, including Bob Mackie, To that end, Mizrahi may be uniquely doesn’t exist.” 8 WWD, WEDNESDAY, NOVEMBER 4, 2009

Macy’s holiday TV spot A Banana Republic Marketing “The Trek,” featuring “Embrace the Queen Latifah, begins Moment” print ad, airing Friday. from the store’s holiday campaign.

Emotional Holiday Notes for Hard Times By Valerie Seckler ple tend to focus on the near term, playing it safe, in- the public’s desire to consume, marketing experts said. dulging less often, spending less money. “People are being a lot more thoughtful and care- Nostalgia and OTHER emotions — visions of “The challenge for marketers is to turn fear into ful about evaluating marketing claims,” observed Lee sugar plums, softly falling snow, reindeer and Santa — hope,” said Marc Gobé, president of Emotional Branding. Eisenberg, author of the just-published “Shoptimism: will be plentiful in holiday marketing campaigns but Conveying messages and images of reassurance is one Why the American Consumer Will Keep on Buying No may not be enough to shake most American consumers way to do this, Gobé noted, adding: “Heritage brands and Matter What,” (Free Press, $26, see opposite page) and out of their sleepy spending ways. nostalgia are gaining support for this reason.” former chief creative/administrative officer at Lands’ Shoppers with tighter budgets and lower sights set on J.C. Penney Co. Inc. is playing the nostalgia card this End. “Credit may be harder to come by, with credit card gift giving are struggling with worries about job security season, with a campaign focused on the “Joy of Giving,” providers raising interest rates and canceling thousands and high unemployment, depressed home values, flat including “Through the Eyes of a Child,” a national TV of cards. There are seven million more people out of personal income and tougher consumer credit terms. spot breaking Nov. 15; an extended, 60-second take of the work versus a year ago.” “Our outlook is dismal because of the startling shop- spot to be screened at movie theaters nationwide start- With its new Holiday Preview 2009 magalogue, Chico’s per apathy that’s set in,” said Candace Corlett, principal ing Nov. 20; mobile messaging wake-up calls made on is trying to fire up both emotions and rationale. The ma- partner in WSL Strategic Retail. “Only 17 percent say they Black Friday to shoppers who sign up at jcp.com, and, for galogue’s shoppers are invited to “Dazzle” in various ever want to go back to spending the way they used to.” the first time, a Penney Facebook gifting application. ways: “In Winter White,” “With a Silver Shimmer” and To move the consumer’s spending needle this sea- The TV commercials, developed by Saatchi & Saatchi “In a Jewel of a Jacket,” among other signals flashing son, Corlett said, “marketing will have to be pulling a New York, and in-house at J.C. Penney, highlight “at- holiday sensibilities. Or, they can “Deck the halls in 8,000 lot of emotional cords” because people are overspent, home celebrations and gift giving,” said Kate Coultas, sequins,” simply by choosing a $149 sequin snake jacket, overleveraged and remain disdainful of their own pre- a J.C. Penney spokeswoman. In one scene, a young boy embellished with 8,000 python-printed sequins on mesh. recession buying sprees. is seen walking through a house giving gifts to family Rational appeals aside the headline “Why Chico’s?” “Midnight store openings, crazy sales frenzies are members. In a practical twist, prices and brands of the invite shoppers to sign up for a free, Passport loyalty antithetical to people’s mind-set of wanting these holi- products available at Penney will be highlighted. program; to save 10 percent “when you sign up for e- days to mean something, to say ‘thank you’ to each other A slice of Americana will be served up by Macy’s in its mail at chicos.com,” and to write letters telling the and relax,” said Kate Newlin, principal partner in Kate holiday TV commercial, “The Trek,” to debut nationally brand “what you love…and what you don’t,” while stat- Newlin Consulting. on Friday, inspired by the New York Sun’s timeless 1897 ing, “We read every letter.” Despite some near-term signs the economy is stabi- editorial, “Yes, Virginia, there is a Santa Claus.” The spot “Consumers are more like creatures who stalk their lizing, such as GDP growth of 3.5 percent in the third follows a modern-day Virginia going from home to Macy’s, prey, rather than creatures who are preyed upon,” quarter, shoppers can be expected to seek happiness in simple traditions like remembering those they appre- “Through the ciate, exchanging meaningful gifts and spending time Eyes of a Child,” with friends and family, as well as treating themselves J.C. Penney’s to things they’ve delayed buying for the past year or two, TV commercial such as apparel. breaking The holiday campaign for Banana Republic, for one, Nov. 15. will tap this mood, conveying “a warmer tone, a more emotional tone” than in recent seasons, said Raul Martinez, chief creative officer at AR, which developed the campaign for magazines, newspapers, and outdoor media. The tag line “Embrace the moment. Holiday 2009” will mark the print ads. “Holiday is a festive and joyous occasion, something that makes an everyday moment special,” Martinez said. “So, from an ad perspective, we shot more Banana Republic daytime looks versus cocktail or evening piec- es. Warmer, cozier, more textural pieces, like sweaters, to set an emotional tone of the everyday, versus singular, evening events.” Contrary to the value-driven, coupon-clipping, bar- gain hunting consumer mind-set that has prevailed this year, the top six things in consumers’ spending sights this season, Corlett said, are all pleasurable, “things that make people happy”: clothing, vacations, home decor, concert tickets, salon and spa services, and eat- ing at restaurants. Fashion — mainly easily affordable brands like where Queen Latifah helps her mail her letter to Santa. Eisenberg said, referring to an increasingly powerful Target, H&M and Gap — also rated as three of people’s A Spanish language version features Carlos Ponce. shopper who is harnessing social media and other des- 10 favorite gifts to give this holiday in an October poll by Starting Friday, people can drop off letters to Santa tinations online to speak directly with a brand’s employ- Zandl Group. Electronics occupied four spots on the list, Claus, in the Santa Mail box at any Macy’s store. For ees, to rate products and to blog about their experienc- including Apple products such as iPhones, iPods and each letter received, Macy’s will give $1, up to $1 mil- es. “The consumer is in charge now to a greater degree iMacs; Sony items; Nintendo Wii and DVDs. Fashion lion, to the Make-A-Wish Foundation, which aids chil- than in the past. It’s hard to advertise through that.” goods from Banana Republic and Sephora gift cards dren with life-threatening illnesses. Holiday marketers are also courting shoppers who say rounded out the 10 favorite gifts to bestow, which came Reprising its 2008 holiday theme “Believe” — en- they are going to buy 18 gifts, on average, compared with via the first 100 adults, ages 18 to 35, to answer trend couraging belief in the spirit of love and giving — the 22 gifts in 2008, and spend an average of $452 for them, researcher Zandl’s online survey. Macy’s campaign will also feature a 25-city, coast-to- 15 percent less than last year, according to Deloitte’s 24th While the public’s anxiety level remains high, with 72 coast Macy’s Santa Tour, starting Nov. 28, following annual holiday survey. About one-third of the represen- percent feeling anxious this September, it’s easing off its Santa’s turn in the Macy’s Thanksgiving Day Parade, tative sample of 10,878 people Deloitte polled this fall 12-month peak of 82 percent around Election Day 2008 and and a “Yes Virginia” original animated TV special. The said they see no signs of improvement in their personal is down from 78 percent in September 2008, said Ann Mack, half-hour program, produced by Macy’s and JWT, with finances, which were weaker than they were last fall. director of trendspotting at JWT, in citing the ad agency’s The Ebeling Group and MEC Entertainment, will air on “In past years, consumers have tended to underesti- new, U.S. Census-weighted survey of 1,273 adults. CBS at 8 p.m., Dec. 11, the first National Believe Day, mate what they were going to spend; I don’t anticipate “People are feeling there’s an end [to economic travails] created to recognize acts of kindness. that this year,” said Stacy Janiak, vice chairman and in sight, but their own personal recovery will lag,” Mack Marketers’ romantic dance with shoppers in the sea- leader of the U.S. retail practice at Deloitte. “Post- said. “They will be constrained in their holiday spending.” son’s campaigns will need to step beyond their heart- holiday, I expect consumers to retreat again, and see When caught up in feelings of fear and anxiety, peo- strings, though, as value for the dollar is still trumping where things stand.” WWD, WEDNESDAY, NOVEMBER 4, 2009 9 WWD.COM

than shopping at Wal-Mart. They tapped into this emotional side of us. If it’s not holding up as well MEMO PAD it’s because paying a little more for design is not as compelling as it was three years ago. In many ways POINT PERSON: Lincoln Center, which will host Mercedes-Benz Fashion Week the [economic] meltdown has hurt them. starting in September, has named Stephanie Winston Wolkoff as director, fashion week. Winston Wolkoff, who previously was Vogue’s director of special events, WWD: We always hear “You are what you buy.” Is will start Jan. 1. there any truth to that? Beginning with the spring 2011 collections, L.E.: I’m not fully convinced that you are what you Mercedes-Benz Fashion Week will relocate from buy. In the last year and a half, there’s been another Bryant Park to Damrosch Park at Lincoln Center. major change as the recession has dented the idea Winston Wolkoff will coordinate between Lincoln that it’s even worth our time to advertise ourselves Center and the fashion industry, including designers, through the brands we buy. Part of it is the ubiquity of retailers, the Council of Fashion Designers of America designer labels, both legitimate and some counterfeit, and IMG Fashion, which organizes Mercedes-Benz has made the distinction of the designer label far less Fashion Week. She also will help maximize existing

imposing than just a few years ago. It’s just not cool ichner

opportunities for the performing arts institution, as well E in times of economic challenge to walk around with as identify and establish new ones, including fashion- obvious shows of ostentation. Remember when people related projects with the 12 resident organizations. were walking into Hermès and Tiffany and asking for Winston Wolkoff left Vogue in June. Prior to Vogue, plain white shopping bags? People are questioning if she held several positions at Sotheby’s. a lot of those products are worth it. She said the convergence of art, culture and fashion Steve photo by “in the epicenter of the city” appealed to her when Stephanie Winston WWD: Are fashion blogs hurting luxury brands or taking the new job. “My background, my sensibility, Wolkoff helping them? work ethic and everything that I learned, really, at L.E.: It cuts both ways. One way it could hurt is Vogue will lend itself to making this a successful joint venture for everyone,” Lee Eisenberg when people post images of themselves wearing she said. Lee Eisenberg is totally a designer label. Burberry comes to mind. People Asked about other fashion events planned for Lincoln Center, Winston consumed — with consumer who post images of themselves in Burberry plaid Wolkoff said, “There are going to be a lot of different things going on. There will Q culture. The author of may not look like the kind of customer Burberry be many surprises.” “Shoptimism: Why the would want its other customers to associate with Winston Wolkoff will report to Reynold Levy, president of Lincoln Center. “We American Consumer Will the brand. All of a sudden, the brand is going to be see Mercedes-Benz Fashion Week coming to Lincoln Center as an opportunity Keep on Buying No Matter shown in ways it can’t control due to social media. to welcome the design community. For Lincoln Center, this partnership is a What” (Free Press) aims Burberry [and other luxury brands] could have a natural one that we want to fully embrace, and because our campus of 16 to find out why enough serious business issue on their hands. acres has so many different places in addition to the tents for fashion shows, is never enoughA in the land of the shopper. He we want to make sure those spaces…are as welcoming and as inviting as we left no cash wrap uncovered, interviewing market WWD: What’s in store for department stores? possibly can for the design community,” Levy said. — Marc Karimzadeh researchers, demographers, behavioral economists L.E.: Traditional retailing was always concerned and neuroeconomists, who use brain scans to about training its customers to wait for sales. What ROSIE DROPS EILEEN: Rosie O’Donnell has never been shy about declaring her determine what sets consumers’ hearts aflutter. In happens when we come out of these recessionary love for the styles of Eileen Fisher. She’s talked about the designer during public the course of his research, Eisenberg got a job at times? They will have essentially retrained everybody appearances and on TV, noting how the clothing has changed her life. What’s Target and donned the red shirt so that he could to never accept a stated price. The Internet will more, O’Donnell even asked Nora Ephron to write an extra line in her new play, explore the dynamics of buying and selling from the still be here and give us much broader access to an “Love, Loss and What I Wore,” to defend the designer after one actor says, point of view of the sales associate. array of stores and comparative prices. The days of “When you start wearing Eileen Fisher, you might as well just say I give up.” But if anyone is expecting the book to be a retailers setting prices are over. Retailers will have to But as many relationships go, it appears the love was flowing in only one slap on the wrist of greedy consumers, they’ll be deliver profits with a much more informed consumer. direction. While performing in the play recently, O’Donnell got word Fisher disappointed. “I hope you agree that the book is not was actually in the audience. O’Donnell rehashed their conversation during an anticonsumption book,” the Chicago native said. WWD: Today advertising is disguised as news and her radio show on Sirius XM on Monday. “I see [her] and say, ‘I love you, and “We carried things way too far with money we didn’t entertainment. Everything has melded. Should we you have helped me. You can’t imagine how much stress I had in my life have. But I also think the people who have criticized be concerned? because of clothing but once I found you three years ago everything changed. society for being overly consumptive have painted L.E.: I grew up when there was a separation between On behalf of every plus-sized woman in the world, I just want to thank you,’” with too broad a brush.” church and state, and while that was violated O’Donnell recalled. “‘And I want to ask you why do you only have the [plus] Like any observant husband here and there, it was generally sizes down in SoHo?’” and father, Eisenberg was aware of honored for the most part. We’re According to O’Donnell’s account, the praise seemed lost on Fisher, who spending personalities before he sat seeing the erosion of the line responded to O’Donnell’s query by saying, “That’s not really our demographic… down to write the book; his wife’s between editorial and advertising. you know, we sell a lot of size two.” O’Donnell said she then remarked, “Oh ambivalence over a little black Consumers understand that now. yeah, the plus-size two.” And Fisher countered, “No, the regular size two.” dress, his daughter’s desire to have I’m not paranoid that somehow “So, you’re trying to design for everyone and you don’t really want the beautiful things but reluctance to the culture is being manipulated association with the plus-size people?” O’Donnell recalled saying. To which, she shop and his son’s impulsiveness, in an evil way. I give people credit said, Fisher responded, “Well, it’s just not the image that we’re going for.” which at times mirrors his own for understanding. We’ve been And that was it for O’Donnell. “It was like someone stabbed me in the acquisitive modus operandi. breathing advertising through our heart,” said the actor and comedian on her radio show. “I was like, ‘OK, Eileen, The former editor in chief of systems for close to a half-century. we’re broken up. I am wearing Donna Karan from now on.’” Esquire, Eisenberg in 1999 was We’re sensitized to it. As for Fisher’s recollection of the conversation, that remains unclear. The hired as executive vice president designer did not return several phone calls seeking comment. — Amy Wicks of Lands’ End, overseeing WWD: I definitely remember the advertising. He demonstrates decline of advertising when the PRESIDENTIAL APPOINTMENT: Vogue editor in chief Anna Wintour joins a enthusiasm about concepts big agencies swallowed the small. list of entertainment names on the President’s Committee on the Arts and that could be drier than sand in Do consumers care that much Humanities, which was unveiled by the White House Monday Night. Wintour, other hands, teasing fascinating of the creativity has gone out of who has gotten close to the Obama camp through cohosting a fund-raiser nuggets of information. Who knew advertising? to honor Michelle Obama during her husband’s presidential campaign and researchers were using neuroimaging to identify the L.E.: I don’t know that consumers care much about featuring the First Lady on the cover of Vogue, will join 24 others on the board. differences between spendthrifts and tightwads? creativity in advertising. There’s universal agreement Others named to the committee include Teresa Heinz Kerry, wife of Sen. John Here, he talks about the consumer today, that Madison Avenue as we used to know it in the Kerry; Bryan Lourd, managing director and co-chairman of Creative Artists advertising, the future of department stores and the “Mad Men” days and decade after doesn’t seem to Agency; actors Sarah Jessica Parker, Forrest Whitaker and Edward Norton, and nature of consumption. have its hold on the marketplace as it did. I don’t musician Yo-Yo Ma. The committee will advise President Obama on how to — Sharon Edelson think advertising is as provocative as it was during expand the role of the arts in society. — Stephanie D. Smith the so-called “creative revolution.” It’s been done WWD: What did you learn from your experience of in by its own clutter. The huge change that’s too NEW LOOK: Natalie Portman, with her hair up working at Target? obvious to talk about is the rise of the Internet and in a pompadour hairstyle, has adopted a sexy Lee Eisenberg: It showed me firsthand how complex social media. The ability of the consumer to go off androgynous look for the latest cover of V it is to run a store and that what the customer might and research on her own and the transparency of magazine. Mario Testino shot Portman in London want or expect is very challenging to deliver. To pricing has rendered traditional Madison Avenue and the actress talked to the magazine about Target’s credit, the [job] orientation went on for hours advertising more challenging than it was. her first-ever sex scene in the upcoming war and hours. I was impressed by how much Target drama, “Brothers,” where she’s the loyal wife cared about a number of socially responsible issues, WWD: So is buying healthy for the individual of a marine, played by Tobey Maguire. Also in such as how to talk to a disabled customer. There and society? the issue, which hits newsstands today, Gisele was quite a lot of emphasis on sexual harassment L.E.: I do think buying opens up a creative channel Bündchen spoke to Testino about Rio, the subject and what to do in the event of a robbery. I also for us so that we can express ourselves creatively of his latest book, and Hedi Slimane shot a learned the correct way to climb a ladder. through the things we buy. We need to recognize that 10-page “rock couture” feature with Natalia a lot of things are emotional and are stand-ins for who Vodianova. — A.W. WWD: What do you think of Target’s brand position? we are. Things superficially help transform us. The L.E.: Target has had to go to market in a different way beauty business, for example, can change our mood. BIGGER JOB: Abigail Pesta has been promoted to because it can’t go toe to toe with Wal-Mart on price. People long for a connection with the things they buy. editor at large from deputy editor at Marie Claire. Natalie Portman on the cover The Target marketing accomplishments over the last If this book makes people a little more mindful that Her new role will take Pesta out of her offices at of V magazine. 10 years rank at the top of successful case studies. purchases carry consequences that aren’t necessarily the Hearst Tower more frequently as she will be What Target did was take a lot of everyday goods and bankruptcy, we’ll be better off as a society. There’s traveling more for international coverage in the romance the experience. Even if you were buying been a bias inherent in people who write about magazine. Pesta joined Marie Claire from Glamour, where she spearheaded toilet paper and toothpaste, there was a different consumption. It’s profound, but it’s not evil. bringing Mariane Pearl, activist and wife of slain Wall Street Journal reporter feeling because of other romantic embellishments Daniel Pearl, to the magazine. Prior to Glamour, Pesta worked at the Journal such as Michael Graves teapots and Isaac Mizrahi WWD: What’s next for you, a stint at Wal-Mart? in Hong Kong, and for Dow Jones Newswires in London and WSJ.com in New clothing. Target has much more sensual appeal L.E.: I’d like to take a breather. York. — S.D.S. 10 WWD, WEDNESDAY, NOVEMBER 4, 2009 WWD.COM Stage Stores Finds Success With Small-Town Model

By Jean E. Palmieri stores under the Goody’s name in states where it had Stage had considered bidding for the brand when it been operating,” said Hall. too went on the auction block earlier this year, “the STAGE STORES INC. FLIES QUIETLY UNDER THE There are 13 Goody’s stores in the Southeast, and price was too high.” It was sold to Virginia-based DHIP radar of the country’s largest retailers, and that’s just Hall expects that number to grow to 25 to 30 over the Holdings Inc. for nearly $2.7 million this summer. the way Andrew Hall likes it. next several years. “But we’re talking to those folks about bringing it The chief executive offi cer of the Houston-based de- In 2009, Stage added 26 stores overall to its stable, 15 back,” Hall said. He said when Goody’s got into fi nancial partment store chain has managed to carve out a profi t- of them Goody’s. straits, it undermined the brand, which was popular in able niche by providing customers in small-town USA That number, while still signifi cant for a retailer in the Southeast and in college towns for its men’s khakis. — towns not large enough to attract a Wal-Mart, J.C. 2009, represents a pullback from the prior year when 56 “The AUR [average unit retail] was $10 out the door,” Penney or Macy’s — with well-known national brands at stores were opened. “Nine months ago when it looked Hall said. “So the new owners need to do some surgery moderate prices. like the world was coming to an end, we slowed our and repair the name before we’d buy it again. We don’t The $1.5 billion company has 757 stores in 38 states growth,” Hall said. And 2010 “will look a lot like 2009. need any down-and-dirty brands.” under the Bealls, Palais Royal, Peebles, Stage and Our principal growth will be in Tennessee, Indiana and Stage overall is 39 percent women’s and juniors, 20 Goody’s names and the plan, according to Hall, is to con- Kentucky, former Goody’s markets.” percent footwear and accessories, 18 percent men’s and servatively add stores until the chain reaches around This calculated expansion is expected to further young men’s and 12 percent children’s. Giftables such as 1,000 units nationwide. increase Stage’s reach in the next several years. Hall candles, crystal, picture frames represent 2 percent of With its small-town model, different retail name- said: “We’re at 757 stores now and we can grow with our sales, while cosmetics and fragrances are 7 percent. The plates and separate merchandising staffs in Houston small-town model to 1,000 stores over the next fi ve to remainder of sales is in outerwear, swimwear and other and Virginia, Stage bucks the centralizing trend that has seven years. It’ll be mostly in the lower 48 states, but products. Hall is proud that Clinique and Estée Lauder become de rigueur in retailing. we’ll evaluate our California expansion separately. That products are available at more than 150 stores through- And although the company is not immune to the reces- would come at the end of our growth cycle.” out the company. Lauder is carried in 168 Bealls, Palais sion — it recorded a 5.9 per- Royal, Peebles and Stage units, cent dip in net income to $9.1 while Clinique is at 152. million in the second quar- The company “Cosmetics has been our ter on an 8.3 percent drop in operates strongest business in 2009,” sales to $341.7 million, with a stores under Hall said. “It’s been close to 10.7 percent decline in com- fi ve different fl at. And it’s one of our higher- parable-store sales — Hall is nameplates. price-point businesses. sticking to the strategies that “We’re also encouraged have led to Stage’s success by the strength of our ladies over the years. ready-to-wear,” he contin- Hall, who will be among ued. “It’s stronger than men’s, the honorees at the K.I.D.S./ which has been OK.” Fashion Delivers fund- The juniors and young men’s raising dinner tonight at categories continue to be “the the Grand Hyatt in New most challenging,” he noted, York, was already a retail “which is consistent with other veteran when he joined national retailers. That’s the Stage three-and-a-half years customer demographic that is ago. Formerly chairman of hurt the most by having less Foley’s, the 12-year veteran disposable income.” of May Department Stores In all categories, Stage’s Co. left the company when buying is done from two loca- its new owner, Macy’s Inc., tions. “We recently split the dissolved the division. “I had company into a northern half a dialogue with Stage after and southern half,” Hall said. Macy’s decided to get rid of The Northern division, based the Houston division, got to in South Hill, Va., merchandis- know the model and fell in es 288 stores under the Stage, love with it,” Hall said. Goody’s and Peebles names Stage targets towns with in 24 states north of Georgia, 8,000 to 10,000 people that while the Houston-based draw from a 10-mile radius Southern division handles 471 where there are 50,000 peo- Bealls, Stage, Palais Royal, ple or less. “Our four-wall Goody’s and Peebles stores in profi t in that demographic is 17 states in the South and West. 17 percent,” Hall said. “And Each division has a separate that’s where we’re targeting merchandising staff and the our future growth.” Northern division is headed by The one division that Rich Maloney, president and doesn’t fi t neatly into that chief operating officer. Hall box is Palais Royal, whose heads the Southern division. stores are centered around the metro- Hall said he’s able to coexist in Hall reiterated although this organizational strategy politan Houston market in strip cen- Andrew a Wal-Mart/Macy’sWal-Mart/Macy’s worldworld becausebecause has fallen out of favor among most big retail companies, ters or other off-mall locations. “It’s Hall thethe storesstores underunder thethe StageStage um-um- there are no plans to centralize at Stage. “That would be the one nameplate that is furthest away brellabrella havehave twotwo advantages:advantages: “We“We negative for the small-town consumer,” he said. “When from our growth strategy,” Hall said. “It bringbring nationalnational brandsbrands toto smallsmall retailers would merge and change the names of the doesn’t meet our small-town model.” The townstowns andand provideprovide customercustomer ser-ser- stores, there would be a 6 to 8 percent comp drop in ffour-wallour-wall pprofirofi ttabilityability iiss llowerower — 1122 pper-er- vicevice sheshe can’tcan’t fi ndnd inin thethe bigbig depart-depart- the fi rst year even though the merchandising and staff- ccent,ent, a accordingccording t too H Hallall — d dueue t too h higherigher mmentent sstorestores ttoday.”oday.” MMostost ooff tthehe sstorestores ing were identical. The consumer perceived that their rrealeal eestatestate aandnd ooccupancyccupancy ccosts,osts, bbutut PPalaisalais aaverageverage 115,0005,000 toto 17,00017,000 squaresquare feet,feet, hometown department store had changed.” And because RRoyal’soyal’s ssalesales pperer ssquarequare ffootoot aarere hhigherigher ssinceince hhee ssaid,aid, mmeaningeaning ““ourour aassociatesssociates kknownow Stage doesn’t run national advertising, there would be the stores are in an urban area. ttheirheir ccustomersustomers bbyy ttheirheir fi rrstst nnames.”ames.” no savings on the marketing side either, Hall said. “Rents“Rents areare onlyonly $4$4 toto $5$5 a squaresquare footfoot inin smallsmall mar-mar- IInn aaddition,ddition, hhee ssaid,aid, ““OurOur mmixix iiss llowerower ttoo The merchandise itself — color palette, weight, fab- kets versus $8 to $10 in metropolitan areas,” he said, not- moderate. We have some fashion aspects to our busi- ric and seasonal demands — is different at the two di- ing large markets also require higher marketing costs. ness, but our customer is generally conservative.” visions as is the “clearance cadence. So we would lose “And we supplement our ROP [run of press] and direct Top labels include Izod, Wrangler, Van Heusen, that effect as well if we merged.” mail advertising with radio and TV [in large markets].” Haggar, Levi’s, Lee, Rafaella and Sag Harbor. Still, he stressed, the back-offi ce responsibilities for But customers like the small size of Palais Royal’s Some 85 percent of the mix is branded, with 15 per- the company are combined at the Houston headquar- stores — 20,000 to 24,000 square feet, rather than cent private label. “We need to be relevant in small ters, allowing for cost savings in that area. 200,000-plus at a Macy’s, for example — easy strip-mall towns and bring the labels she wants,” Hall said. The Despite its success and unique niche, Hall said Stage access and better customer service, Hall said. company’s private labels target “the lane between Wal- hasn’t been approached by any strategic buyers to ac- Most important, Palais Royal is still “a very profi table Mart and the national brands,” Hall said. “It offers quire the business. “We’re really so different logisti- name,” Hall stressed, “so there’s no reason to exit it.” customers quality product at a price point lower than cally,” he said. “Where [the department stores] roll 54- But while Palais Royal will be retained, it’s the other national brands — and it helps get the customer who foot trailers into their stores, we’re pulling UPS trucks nameplates that will be expanded. The one with the aspires for national brands but can’t afford them.” in four to fi ve times a week. It’s a fabulous model and it most growth potential is the recently acquired Goody’s. Stage does have a few “exclusives or quasi-exclu- fl ies under the radar [of the other retailers].” Stage Stores acquired Goody’s for $300,000 in July, sives,” Hall said, including D.R. by D. Rodriguez, a Would Hall then consider adding some more names “principally as a defensive move,” Hall said. “After women’s brand designed by David Rodriguez that was to the Stage family? Goody’s fi led bankruptcy, we were in negotiations for recently rolled out to 100 doors. “It’s on plan to do “I’m not sure there are any more small-market play- some locations and then we heard a rumor that it was $500,000 for fall,” Hall said. “It’s collections fashion at a ers,” he responded. “Goody’s and Dawahare’s were the going to be reconstituted. So we bought the intellectual moderate price.” last and they both went away. Fifty or 100 years ago, property at the auction.” Another semiexclusive is Emma James, the former there were lots of stores like ours in small towns, but Once it acquired the name, Stage quickly found Claiborne brand now owned by Li & Fung. Duckhead, a most didn’t make it. So when we go into a small market, “there was a lot of customer goodwill” surrounding the popular men’s brand that had been owned by Goody’s, we’ll just take one of our existing nameplates and do it business, and “we determined the benefi t of opening is no longer part of the mix, however. Hall said although that way.” WWD, WEDNESDAY, NOVEMBER 4, 2009 11 WWD.COM Philippou Named CEO at Ben Sherman BEAUTY BEAT By Nina Jones lier this year, taking a $1.4 million charge in the second quarter. “Business is tough, and we need to concentrate Johnson & Johnson Reorganizing London-based Ben Sherman Group Ltd. has on our area of expertise,” said Gray. Johnson & Johnson, the maker of Aveeno named Pan Philippou chief executive officer, effective However, those categories will relaunch next year skin care, Johnson’s baby products and Neutrogena in January. Philippou, who was group chief executive of via licensees. London-based Hudson shoes is now cosmetics, is looking to save about $800 million to U.K.-based clothing group WDT, will succeed Miles Gray, Ben Sherman’s licensing partner for shoes, while $900 million in 2010 with a reorganization. The plan who will retire that month as ceo. Gray will then take Flyers Group is the label’s new licensing partner for will cut the pharmaceutical giant’s global workforce on the role of nonexecutive chairman at Ben Sherman, kids’ wear. by 6 percent to 7 percent (about 7,000 employees) by along with an advisory role at Oxford Industries, the For the second quarter ended Aug. 1, Ben Sherman net reducing layers of management, and and simplifying Atlanta-based company that owns the sales declined 27.3 percent to $23.6 mil- business structures, the firm announced Tuesday. British brand. lion. In the first half of the fiscal year, net “The company’s plans are expected to increase Pan “Ben Sherman is a brand inbuilt with sales fell 30.7 percent to $47.8 million. its operational efficiency and generate annualized, Philippou heritage and authenticity, and it has The Ben Sherman division posted an pretax cost savings of $1.4 billion to $1.7 billion the potential to grow much further,” operating loss of $6.3 million in the sec- when fully implemented in 2011,” the company stat- Philippou, who earlier in his career ond quarter, compared with an operating ed. William C. Weldon, Johnson & Johnson chairman served as managing director of Diesel loss of $2 million in the year ago quarter. and chief executive officer, said, “Today, we are an- U.K. and then ceo of Diesel USA, said For the first half, operating losses were nouncing a series of actions and plans designed to during an interview at Ben Sherman’s $8.3 million, compared with a loss of $1.7 ensure that our company remains well-positioned new Savile Row store Tuesday. “I want million in the first half of 2008. and appropriately structured for sustainable, long- to pick up on the journey. The brand is Philippou plans to continue to term growth in the health care industry.” going in the right direction.” open more stores, with an opening in J&J will record an associated pretax, restructur- Gray, who was also at the store Tuesday, London’s Covent Garden planned for ing charge in the range of $1.1 billion to $1.3 billion said that after 12 years at the company, later this month, while the label is look- in the fourth quarter of 2009, treated as a special he’d made the decision to retire from the ing for “street locations rather than item. The company also confirmed its earnings guid- ceo role. “There’s no way you can do this mall locations” in the U.S. The label’s ance for full-year 2009 of $4.54 to $4.59 per share, job at half pace,” said Gray, who in 2000 fifth retail location in the U.S., a store which excludes the impact of special items such as led a management buyout of the Ben on Newbury Street in Boston, opened restructuring charges. Sherman business, before the company last month. Men’s wear is the bulk of the — Andrea Nagel was sold to Oxford Industries in 2004. “Pan is my choice business, with women’s wear making up between 10 and [for ceo] exactly. He’s the right guy for the job.” 15 percent of Ben Sherman sales. Philippou acknowl- Ben Sherman, known for its Mod-influenced designs, edged the opportunity to expand the women’s catego- Sephora Opens Singapore Flagship recently underwent a restructuring due to declining ry but said he would veer away from sales in the recession. The company reduced headcount “chasing the trends.” Sephora has opened a flagship in Singapore. and discontinued its footwear and children’s lines ear- — With contributions from David Lipke The 13,330-square-foot location on the ground floor of the Ion Orchard shopping center is the LVMH Moët Hennessy Louis Vuitton-owned perfum- ery chain’s largest store in Southeast Asia. WwD “This opening is another step in Sephora’s suc- Zegna Division in Deal for Tessitura di Novara cessful international expansion and illustrates our By Emilie Marsh “It’s an acquisition that is niche, Men’s desire to be a leader in emerging markets with but strategic,” stated Gildo Zegna, the strong growth potential,” stated Jacques Levy, presi- PARIS — The Ermenegildo Zegna empire just got a little group’s chief executive officer. “It brings dent of Sephora worldwide. “It is one of the largest bigger. an exclusive know-how in the silk industry, a portfolio of our network of 1,000 stores across the world and The men’s wear behemoth’s textile division, Lanificio of prestigious clients, and it further completes and adds will become Sephora’s reference outlet in Asia.” Ermenegildo Zegna, said Tuesday it has acquired Tessitura additional credibility to our offering of fabrics in natural Sephora’s first door in Singapore was opened in di Novara, a high-end textile mill based in Novara, Italy. fibers dedicated to luxury garments.” December 2008. The chain has more than 60 loca- Financial terms and details were not disclosed. Ermenegildo Zegna produces the men’s wear for Tom tions in China. Known for its premium silk, silk-cashmere and silk- Ford, among other brands. — Jennifer Weil wool blends for both men and women, the family-run Ford said in October he was gearing up for an immi- Tessitura di Novara, founded in 1935, is said to supply a nent launch of his debut women’s line under his name- range of European designer firms. sake brand. Beiersdorf Profit Slips 9 Percent BERLIN — After months of decline, a better third quarter lifted Beiersdorf ’s outlook for the year. Gucci Group Backs Rainforest Alliance The German consumer goods maker’s profits after taxes fell 9 percent in the third quarter to 100 By Miles Socha a luxury, they’re a necessity if the to sever ties with suppliers like million euros, or $143 million. Earnings before in- world wants to stop climate change,” Asia Pulp and Paper, charging them terests and taxes declined 6.5 percent to 144 million PARIS — Luxury shopping — recently stated Mimma Viglezio, Gucci with actively destroying Indonesia’s euros, or $205.9 million. tainted with guilt issues related to Group’s executive vice president of rainforests. According to the net- Sales at Beiersdorf dipped 3.1 percent to 1.4 the economic crisis — should not be global communications. work, Tiffany & Co. and Hennes & billion euros, or $2.02 billion. The company’s con- marred by worries that paper shop- The paper policy compels all the Mauritz are among fashion compa- sumer unit, responsible for 86.2 percent of total rev- ping bags are destroying valuable group’s brands — from Balenciaga nies taking efforts to “clean” their enues, made 1.22 billion euros, or $1.74 billion, a 2.7 rainforests. to Yves Saint Laurent — to reduce paper supply chains, from what percent decrease. To that end, Gucci Group said paper use, eliminate those contain- goes into photocopiers to cash-wrap For the first nine months of 2009, Beiersdorf ’s EBIT Tuesday it was joining forces with ing fibers from forests of high con- materials. was 423 million euros, or $579.5 million, down 13.4 Rainforest Action Network, a San servation value and to purchase Loss of forests is blamed for about percent. Revenues declined 1.7 percent to 4.35 billion Francisco-based environmental recycled paper certified by the 20 percent of greenhouse emissions, euros, or $5.96 billion. The consumer segment’s sales group, to eliminate paper made from Forest Stewardship Council, all by with deforestation in Indonesia dropped 2.1 percent to 3.81 euros, or $5.22 billion. Indonesian rainforests and other December 2010. blamed for a carbon footprint great- Within that, Nivea’s revenues rose 1.3 percent on a like- controversial suppliers. The Rainforest Action Network er than all the trains, planes and au- for-like basis, and Eucerin’s sales rose 8.6 percent. “Standing rainforests are not has been campaigning companies tomobiles in the United States. Dollar figures are converted at average exchange rates for the periods. The third-quarter showing caused Beiersdorf to The new site. raise guidance for the year. Thomas-B. Quaas, chair- PPR Foundation Launches Women’s Rights Site man of the company’s executive board, estimates its PARIS — PPR’s Corporate Foundation for Women’s Dignity and consumer segment business will grow faster than the Rights now has a voice and showcase in the online world. market and gain market share. The foundation will today unveil the launch of the Web “We are expecting an EBIT margin for the consum- sitefondationppr.org to promote awareness of women’s rights er business segment of roughly 11 percent,” he stated. and detail its activities through video reports, blogs and Beiersdorf stock closed Tuesday up 3.3 percent to news articles. 42.77 euros, or $62.67 at current exchange. Established earlier this year as part of a wide-ranging — Susan Stone corporate and social responsibility effort at PPR, the foun- dation aims to empower women and fight violence against them by partnering with a variety of nongovernment organi- Aymerich Joins Christian Dior zations worldwide, and activating the retail-to-luxury con- glomerate’s 88,000 employees. Its various missions include PARIS — Marie-Anne Aymerich has taken the job of microfinance, sponsoring social entrepreneurs and support- brand general manager of Parfums Christian Dior. In ing antiviolence projects. the newly created position, she oversees the LVMH Billed as an information and resource center, the interactive Moët Hennessy Louis Vuitton-owned brand’s three mar- Web site is loaded with statistical data, testimonials and links keting categories — fragrance, makeup and skin care to specialized sites. The PPR site allows users to post their own — plus packaging creation, customer relationship man- projects, “tour” the foundation’s work and share information via Facebook, Twitter or Digg. agement, media and the Internet. Aymerich reports to The foundation’s board includes PPR chief executive officer François-Henri Pinault, designers Stella Claude Martinez, Parfums Christian Dior’s president. McCartney and Frida Giannini, plus brand chiefs Valerie Hermann of Yves Saint Laurent and Isabelle Guichot Since 2006, Aymerich was managing director for of Balenciaga. Unilever France’s home and personal care division. — M.S., with contributions from Hayden Budds — J.W. 12 WWD, WEDNESDAY, NOVEMBER 4, 2009 WWD.COM Industry Sees Positive Signs in California Retailer Jeannie Lee moved her boutique Satine into a bigger location. SARDELLA

American RagRag CieCie plansplans toto launchlaunch DONATO seven locationslocations ofof WorldWorld DenimDenim BarBar inin Kohl’s opened 30 stores in California overover thethe nextnext twotwo years.years. California in September. PHOTOS BY

Continued from page one “It’s definitely a turnaround,” said Jeannie Lee, up 1.4 percent from August but a decline of 8.8 percent locations — and hired 4,200 employees in the Golden owner of Satine, the Los Angeles boutique that in from a year ago. State. American Rag Cie, the specialty retail chain that September moved into a new location that is more than At the ports of Los Angeles and Long Beach, the total has three locations in Los Angeles, San Francisco and double the size of its original site. “We’re already on number of containers fell 17.9 percent to 1.02 million in Newport Beach, Calif., plans to expand its jeans section, track to be more profitable. We’re anticipating a 30 per- September from a year ago. However, it was the third World Denim Bar, as a stand-alone store with seven new cent increase [in sales] from last year.…I’m thinking that consecutive month that the number of containers to- units in California over the next two years. by fall 2010 it’s going to be totally back.” taled more than one million, after seven consecutive “We’re optimistic, but we’re vigilant,” said Mark To be sure, the road to recovery will be long. The months of less than one million. Werts, American Rag’s founder and owner. National Retail Federation predicted that overall retail “It’s going to be a very slow and uneven recovery [in Executives and economists emphasize that any recov- sales this year will decline 1 percent to $437.6 billion, California],” said Jack Kyser, chief economist at the Los ery from the recession will be slow and sporadic. But they compared with a drop of 3.4 percent last year. The econ- Angeles County Economic Development Corp. pointed to more steadiness as a reason for optimism. omy continues to claim casualties, such as the boutique The decline has leveled off in the state’s apparel “What was outstanding about this crisis to me was Fred Segal Flair, which closed in October after 17 years retail and manufacturing industry, Kyser said. “We see the level of fear it generated and the total collapse of of selling designer labels such as Koi Suwannagate and pressure on keeping costs down,” he added. “Retailers confidence it produced,” said James Paulsen, chief in- Martin Grant and collaborating on fashion with the are keeping their inventory lean.” vestment strategist at Wells Capital Management, an Barbie brand. Much of that stems from unemployment, which is investment advisory firm based in San Francisco. “The “The climate of retail is changing so drastically,” usually the last economic indicator to bounce back after recovery we’ve had to date has little to do with [gov- said Fred Segal Flair owner Jeannine Braden, who will a long recession. ernment] policy.…What it has to do so far is that we continue to be a partner in the Los Angeles boutique “People are out of work and they can’t shop,” said calmed down.” Post26. Mitchell Quaranta, ceo and president of Swatfame Inc., The California retail and manufacturing industry — Joblessness remains a major issue. The U.S. unem- a City of Industry, Calif.-based manufacturer that pro- the largest in the country — is finding its bearings. ployment rate grew to 9.8 percent in September from 9.7 duces six fashion brands, including See Thru Soul and “The panic is gone now,” said Josh Homann, vice pres- percent in August. During the same period, California’s Kut from the Kloth. “That’s still going to be affecting re- ident of operations at Sue Wong. “People have adjusted jobless rate fell to 12.2 percent from 12.3 percent but is tail sales.…But the mood is better. We’ve gotten over the to the reality. There won’t be any further downturn.” still at the highest level since before World War II. doom and we have a little bit of the gloom.” Topher Gaylord, president of Seven For All Mankind, Like other businesses navigating the economic up- the Los Angeles-based premium denim brand owned by heaval, Swatfame cut expenses and turned its attention VF Corp., doesn’t anticipate as much discounting this to profitability. Last year, the company reduced its staff by holiday season as last year. The panic is gone now. People 10 percent to 340 workers and grew profits by 50 percent. “A lot of retailers have been aggressive with their “ “As a manufacturer, [profit’s] the only thing that mat- inventory,” he said. “Because of that, there’s a certain have adjusted to the reality. ters,” Quaranta said. “Volume is great. But at the end of amount of scarcity in the retail market and not much — Josh Homann,” Sue Wong the day, if you’re doing a lot of volume and you’re not promotional activity.” profitable, what good is the volume? If you’re shipping Jarrod Dogan, owner and president of Hybrid a ton of goods and giving it away in markdown because Apparel, which makes clothes under license for Levi’s, In September, the percentage of unemployed people the retailers can’t sell it, it’s pointless.” Jimi Hendrix and other brands, forecast that his reached 12.7 percent in Los Angeles County, 9.4 percent Marshal Cohen, chief industry analyst at The NPD Cypress, Calif.-based company will increase sales next in Orange County, 9.7 percent in San Francisco County Group, a Port Washington, N.Y.-based market research year by at least 30 percent from more than $200 million and 10.2 percent in San Diego County. firm, also advocates using profitability as the gauge of a this year. “There’s a lot of business to chase,” he said. However, the UCLA Anderson Forecast, an econom- company’s financial health. Luxury labels are also bullish about California, the ics research center in Los Angeles, said California’s “Profitability is the true measure of success,” he said. world’s eighth biggest economy and the home of the employment will grow at a rate of 0.2 percent next year “Being able to say you’re profitable is what the industry entertainment industry, which this year has endured after contracting 3.7 percent this year. wants to hear.” devastating wildfires as well as the deepening state “Maybe in the next two, three or four years the econ- Janine Blain, vice president and general merchan- budget crisis. omy will recover,” Gov. Arnold Schwarzenegger said last dise manager at Directives West, Doneger Group’s Los “It’s among the top [markets] for us in performance,” month at The Women’s Conference in Long Beach, Calif. Angeles-based merchandising consulting division, which said Pamela Baxter, U.S. president of Christian Dior. “The bounce back will be slower than in the past.” works with department stores, national chains, specialty “The challenged economy has been difficult every- The governor and legislature, as in other states, have shops and manufacturers, said price has come to the where, and it’s affected us, but California as a market been faced with billions of dollars in budget shortfalls forefront for both well-known and emerging brands. For seems to be faring well.” because of declining sales, personal and corporate taxes example, many stores prefer contemporary fashion tops Henry Segerstrom, whose family owns South Coast and that won’t change anytime soon. generally priced between $59 and $100, compared with Plaza in Costa Mesa, one of the largest shopping centers However, in the housing market, the number of mort- those that were selling for $100 and higher a year ago. in the U.S. with tenants such as Chloé, Cartier, Oscar de gage default notices filed against California homeown- “More than ever, buyers are looking at all avenues la Renta and Bottega Veneta, said the high-end center ers fell 10.3 percent in the third quarter to 111,689 from to doing business,” Blain said. “We’re looking at brands has been through tough times before. the second quarter, although it represented an 18.5 that are a value or clothes that are items and at a “And our center is actually doing quite well,” he said. percent increase from a year ago, according to MDA value.” “I believe reinvesting in the property and continuing to DataQuick, a San Diego-based real estate monitor. In addition to emphasizing value, designers are re- sign the best tenants will allow us to continue to thrive MDA said September home sales in Southern sponding to the needs of retailers and consumers by cut- when the things turn around.” California grew 0.2 percent to 21,539 from August and ting to order, lowering prices and creating clothes that Retailers and manufacturers said the precipitous rose 5.1 percent from a year ago. In the same month, last as investments. drop began after the collapse of Lehman Brothers in home sales in the San Francisco Bay Area totaled 7,879, “We are living in reality, where before we weren’t liv- September 2008 sent shock waves through the global representing an increase of 4.8 percent from August and ing in reality,” said Geren Lockhart, designer of contem- economy. As consumers slashed spending, stores cut 8.4 percent from a year ago. porary label Geren Ford in Los Angeles. “We are draw- prices drastically — as much as 75 percent at Saks The median price for a home in Southern California ing confidence from the mood around us.…You still have Fifth Avenue — during the holiday season. Retailers was $275,000 in September, or the same as in August, but to roll the dice a little, but it feels more stable.” and vendors said shoppers began trickling back to down 10.9 percent from a year ago. The median price — With contributions from Marcy Medina stores in April. in the Bay Area was $365,000 in September, which was and Anne Riley-Katz WWD, WEDNESDAY, NOVEMBER 4, 2009 13 WWD.COM Deborah Turbeville Spreads Her Wings FASHION SCOOPS By David Moin MILLA TIME: Tommy Hilfi ger has Milla Jovovich in into leaving a cell phone message for Richard the bag. According to a Hilfi ger spokeswoman, Christiansen, an owner of the label and ardent AVANT-GARDE PHOTOGRAPHER the model-cum-actress has been tapped to fan of the Aussie singer. Deborah Turbeville typically exhibits design the next limited edition Breast Health in galleries where space is tight, and International bag for the brand. Helena MANGIA, MANGIA: If Brunello Cucinelli is that’s just fine with her. Christensen acted as ambassador for the last bag hosting a party, you can count on having “I like to cram things,” like an art- released in aid of the nonprofi t organization. The heartfelt speeches and hearty Italian food. ist obsessively fi lls every inch of a note- new design is expected in April. Meanwhile, the That holds true, evidently, even if the party book with sketches, she says. “I don’t label has also tapped windsurfi ng legend Robby is not in Tuscany during Pitti Uomo, but on work in such big spaces.” Naish to front a campaign for a line of Tommy the second fl oor of Saks Fifth Avenue in New So exhibiting in the 15,000-square-foot Hilfi ger men’s tailored pieces. “It will have a real York. Last week the designer and retailer feted penthouse of Ralph Pucci International vintage feel,” said the spokeswoman. their partnership. Michael Bastian and Rachel at 44 West 18 Street in New York triggered Roy were among the guests, who all seemed a different approach, causing her to make PIECE BY PIECE: Launches and to ditch their usual fi nicky larger prints than normal and clustering openings may be a standard eating habits for an impressive them into collages or visual sto- occurrence on the party spread of Umbrian dishes. ries, to be sold that way. circuit, but a fete to celebrate For the exhibit at Pucci, the release of a jigsaw puzzle L&T’S NIGHT: Lord & Taylor’s she’s reinvented much of is still something slightly Fifth Avenue fl agship will her groundbreaking work arts Deborah Turbeville on the out of the ordinary. That’s crank it up Thursday evening from the late Seventies island of Hvar, Croatia, 1986. exactly what took place at with its “Love at First Sight” and Eighties. “They’re Industria Superstudios on event, combining the party really remade from and Monday night when Shiseido spirit of Fashion’s Night Out prints of years ago, when hosted a cocktail reception with a commercial spin. you had all this marvel- for the unveiling of the RxArt The spotlight will be on 50 ous paper that doesn’t exist people 2009 puzzle, a 200-piece trendy vendors, “rocker chic” anymore,” Turbeville said. mash-up of Japanese artist looks, and deals, from a 20 Though the prints are digitally Yayoi Kusama’s 2008 self percent off savings pass to a reproduced and available in a lim- portrait. (The party also toasted Michael Bastian and free Flip camera for anyone ited run, she feels they capture all the Shiseido’s new skin care line, Brunello Cucinelli spending at least $600 in the MCMULLAN PATRICK PHOTO BY imperfections, haziness and tonality of Future Solution LX.) Jason contemporary department. the originals, even the masking tape Wu, Daphne Guinness, Becka Eighties pop star Lisa Lisa and she used to cover tears. “I scratch and Diamond and Harley Viera- DJs Harley Viera Newton, Omi do a lot of things with my photographs,” Newton were on hand to take and Lindsay Love will perform. culminating in a distressed look of an- a look at the new toy, sales A runway show will feature tiquity and ambiguity. of which will benefi t RxArt, a fi nalists from the alumni of Turbeville’s show at Pucci, entitled charity that exposes hospital Parsons The New School for “Silent Film,” launches Thursday night patients to contemporary Design who entered an L&T with a party. “Whether it’s mannequins, art, art. Indeed, there were some party dress design competition. sculpture or photography, there’s clearly a interested customers. “This “America’s Next Top Model” thread that runs through all of it. Deborah’s puzzle is where art meets judge Nigel Barker will be vision is consistent with ours,” Pucci says. An image from Turbeville’s “Silent Film” whimsy,” enthused Wu, who among the celebrity judges About half the photos are set in and show at Ralph Pucci International. said he also had plans to picking three winners. Phoebe around Versailles, France, but she ex- commission the artist for Daphne Guinness Couture will manufacture the poses the behind-the-scenes Versailles, paintings for his new offi ce. LEXIE MORELAND PHOTO BY winning designs and L&T will those musty back rooms and storage classic things. I focus on the face,” but sell them next spring, with a spaces off-limits to the public. There there’s as much to the composition in KNOWING WHAT HE’S GOOD portion of proceeds benefi ting are even photographs shot in Marie the scene she sets and the story behind AT: On his way to Singapore to the Elizabeth Glaser Pediatric Antoinette’s little-known theater, not far it that can only be imagined. offi cially open Custo Barcelona’s AIDS Foundation. “Love at from the palace, where private perfor- “I fi nd personalities, look for inter- fi rst store there, designer Custo First Sight’s fi rst installment mances for the king and his inner circle esting faces and do pictures in loca- Dalmau stopped in Hong Kong was at L&T last spring. were held. Her treatment of sculptures tions suggestive of the rest of the work,” to check on his year-old unit kept in storage by the Louvre museum explains Turbeville. “I combine clothes, and to host a luncheon at Aqua, GET THEM EARLY: How to evokes “kind of a seance,” she says. people and place to make a story....I like famed for its panoramic views rebuild a brand in the “They are not all [shot] straight on. It’s strange places.” of Victoria Harbour. During Internet era? Go online. a tracking shot, like a mini fi lm.” Turbeville has been labeled the “anti- the lunch, Dalmau told stories JONES Stealing a page from “Project They’re all taken from her “Unseen Helmut Newton,” shuns photographing of his two-and-a-half-year Runway,” Keds is seeking Versailles” series abetted by Jacqueline supermodels, remains famous for her motorcycle adventure across up-and-coming designers Kennedy Onassis, who helped erotic “Bath House” series for Vogue in the U.S. and through South from all walks of life to Custo Dalmau

Turbeville gain access to the royal pal- 1975, and mostly for transforming fash- America, which he and brother GARETH PHOTO BY create custom shoes. So far, ace. Other photos on display were shot ion photography into avant-garde art. David completed 30 years aspiring designers including a in Saint Petersburg, Russia, where she She was never schooled in photography ago. “There were no cell phones, no e-mail, just chef, a tattoo artist, a musician and a graphic spends three to four months out of each aside from attending one seminar on telex. Does anyone remember telex?” he said, designer have been tapped to be a part of year lecturing and photographing, and theory with Richard Avedon (who fi rst recalling that the trip led directly to the founding “Keds Collective,” a Web site where people in Venice for carnival. spotted her work) and Marvin Israel to of Custo Barcelona. “We saw these printed can transform a plain pair of white Keds into a More photo artist than fashion pho- encourage young photographers. T-shirts in California and we had never seen one-of-a-kind design. “This is a key part of our tographer, Turbeville is inspired by the She has a new book, “Past anything like them,” he said, noting psychedelic strategy in rebuilding our brand,” said Kristin great silent fi lm directors from France, Imperfect,” published by Steidl. It’s surfer shirts inspired the Dalmaus to print Kohler Burrows, president of Keds, adding online Germany, Russia and Japan, includ- available in Europe and soon to be in graphic designs on T-shirts in their native Spain. marketing is already part of its overall mix, but ing Jean Cocteau and Rainer Werner the U.S. In about a month, she’s off on The trip also prompted Dalmau to give up it will be a larger percentage moving forward. Fassbinder. Her subjects are treated in assignment in Poland and Russia for studying architecture. Asked if he uses his Any visitor to the site can purchase the custom unexpected ways amid offbeat locales Italian Vogue, L’Uomo Vogue and Casa background to help create store concepts for shoes, which means the new “designers” can she discovers, like an old wine distillery Vogue. As far as the subject she’ll tack- Custo Barcelona, Dalmau laughed. “No, it’s actually make money off their own creations. in Bercy, outside Paris, or the underbel- le, she says simply, “I have no idea.” better I don’t. I was terrible at it,” he said. “Customization is the way everything is going,” ly of a royal palace. “I tend to like very It’s another voyage of discovery. said Evan Vogel, co-founder of Night Agency, BIRDS OF A FEATHER: Thom Browne got to play the fi rm behind the design of the site. “It’s also gallerist last week at his TriBeCa store, where creating a new revenue stream for Keds.” he installed an exhibition of paintings by GQ Kara Ross Names Chase President deputy editor Michael Hainey. The paintings, MINT CONDITION: Jodi Arnold, designer of Mint including some portraits and a series called by Jodi Arnold, rang in the opening of her fi rst By Sophia Chabbott business segments including fi ne and “How I Learned to Pray,” in which each work boutique at 56 University Place in New York’s costume jewelry as well as handbags. features a crow and a line from a poem that Greenwich Village on Thursday night with a MARIAH CHASE HAS BEEN NAMED Chase reports to Kara Ross, who Hainey wrote, are on display through Nov. 11. reception to showcase both her collection and president of Kara Ross, the New York- founded the company in 2006. “Kara Ross Guests at the opening included Nora Ephron the artwork of Vicky Barranguet, whose prints based jewelry and accessories firm. is prolifi c as a creative talent in each cat- and interior designer Nate Berkus. inspired much of Arnold’s upcoming spring Most recently, Chase was with egory: fi ne and boutique jewelry as well collection. Starting with her resort collection, Designers Management Agency, where as handbags,” said Chase. “[The brand] HALLOWEEN HIJINX: Wilhelmina Models Arnold will be rebranding her Mint line as Jodi she was responsible for licensing, strate- has an opportunity for growth in North president Sean Patterson drew a high-wattage Arnold NYC. Her Mint collection is sold in gic marketing and business development America and internationally. In light of crowd of costumed revelers to his New about 150 stores around the world, but this for clients including Christian Siriano, the global consumer’s new perspective York apartment on Halloween, including marks her fi rst venture into retail. Arnold is still Tucker, Pamela Love, Frette and QVC. on luxury and consumption, we will high- Kylie Minogue (dressed as a mime), Fergie negotiating a longer term lease for the space, Earlier, she worked in marketing and light the creativity, distinctiveness and (Cleopatra), Marc Jacobs and Lorenzo Martone but has confi rmed a life span of at least 56 communications for brands such as Jimmy long-term value of Kara’s work.” (spandex-clad superheroes) and Bally’s Brian days, during which she has organized events Choo, Roger Vivier and David Yurman. Ross said she will now spend more Atwood. Later in the night, Jacobs, Minogue, almost every night to bring together networks of As Kara Ross’ fi rst president, Chase time on the creative aspects of the busi- Fergie and their entourages piled into a fl eet advertising, fashion and art worlds. When she’s will be responsible for strategic growth, ness, as well as the vision for the brand of SUVs and hit up gay nightclub Club 57 and not popping in to check on things, Arnold will sales and marketing and business de- including new product categories and then Avenue. There, a fl ack for men’s wear be busy working on her upcoming collaboration velopment across the fi rm’s multiple creative alliances. brand Commonwealth Utilities coaxed Minogue with The Limited stores, due out this spring. 14 WWD, WEDNESDAY, NOVEMBER 4, 2009 WWD.COM Financial For full daily stock changes and more financial news, see WWD.com / business-news.

Net Down, Sales Up at True Religion 10 Best Performers By Ross Tucker The average selling price for women’s jeans was $253 for the quarter, while NEW YORK — True Religion Apparel’s men’s came in at $273. DAILY COMPANIES P/E Volume Amt string of branded store openings, Sales in the international segment coupled with a surge in international rose 47.6 percent to $16.6 million from High Low Last %Change markets, helped take the sting out of a $11.2 million. double-digit decline in its wholesale Struggles continued in the wholesale business during the third quarter. segment, where sales fell 31.1 percent to 11.36 9.72 Revlon (REV) 10.8 1755379 10.79 +7.15 For the three months ended Sept. $31.9 million from $46.3 million. Michael 30, the Vernon, Calif.-based premium Buckley, president, said sales to major 9.00 8.52 R.G. Barry (DFZ) 12.9 104846 9.00 +7.14 denim label saw earnings fall 8.8 per- department stores fell 17 percent during cent to $14.1 million, or 58 cents a di- the quarter as store buyers were more 0.62 0.58 Charles & Colvard (CTHR) - 17860 0.61 +7.02 luted share, compared with earnings of conservative with their purchasing. $15.4 million, or 64 cents a share, during Sales to specialty stores were also down, the same period a year ago. but the rate of decline had tempered. 0.32 0.32 Phoenix Footwear (PXG) - 1000 0.32 +6.28 Sales improved 3.8 percent to $82.4 “While [the boutique] business has million from $79.4 million. decreased sharply over the past four 43.02 40.12 Warnaco (WRC) 28.9 1169257 42.85 +6.01 “We believe our performance highlights quarters, we have seen some signs of the ongoing preference for our brand,” stabilization,” said Buckley. 9.14 8.44 Talbots (TLB) - 620124 9.12 +5.31 said Jeff Lubell, chief executive officer, For the nine-month period, the com- during a conference call with analysts. pany reported an earnings increase of 3.3 0.10 0.10 Nitches (NICH) - 9500 0.10 +5.26 The company’s direct-to-consumer percent to $32.7 million, or $1.35 a share, segment has been fueling growth, with from $31.7 million, or $1.31 a share. 5.08 4.79 Caché (CACH) - 83443 5.04 +5.22 sales spiking 51.9 percent to $32.6 mil- Sales rose 10.7 percent to $218.2 mil- lion compared with $21.5 million a lion from $197 million. year ago. An additional seven branded The strong performance pushed man- 4.83 4.26 Charming Shoppes (CHRS) - 1726402 4.81 +5.02 stores were opened during the quarter agement to up its guidance for the year. for a total of 66, compared with 36 last The company now expects to generate 3.25 3.00 LJ Intl. (JADE) - 223101 3.24 +4.85 year. Management anticipates having 70 sales of between $295 million and $300 stores by the end of the year. The brand- million for the year, with earnings per ed store environment allows the com- share between $1.82 and $1.86, up from pany to fetch higher prices on its goods. previous guidance of $1.76 to $1.84. 10 Worst Performers Kenneth Cole Swings to 3rd-Qtr. Profit DAILY COMPANIES P/E Volume Amt By Alexandra Steigrad “Our focus on quarter-over-quarter High Low Last %Change improvement is beginning to yield posi- Kenneth Cole Productions Inc. tive results,” chairman and chief execu- surprised Wall Street with a third-quar- tive officer Jill Granoff said on a confer- 3.15 2.74 Glimcher (GRT) - 1098330 2.89 -5.86 ter profit on Tuesday, but sales in the ence call. “While we are continuing to period and fourth-quarter top-line pro- experience top-line pressure, particular- jections were below analysts’ estimates. ly in the wholesale segment, our height- 41.23 37.11 Steve Madden (SHOO) 19.9 640174 38.92 -4.40 For the quarter ended Sept. 30, the ened focus on inventory and expense New York-based vendor said net income management has led to improved gross 12.43 11.61 Inter Parfums (IPAR) 17.7 112330 11.75 -4.08 grew to $186 million, or 1 cent a diluted margins and increased profitability.” share, compared with a net loss of $1.6 Quarterly selling, general and admin- 9.29 8.80 Kenneth Cole (KCP) - 74931 8.91 -3.78 million, or 9 cents a share, in the year- istrative costs fell $7.3 million, or 14.1 ago quarter. Revenue fell 21.5 percent to percent, to $44.6 million, and inventories 2.85 2.63 American Apparel (APP) - 222599 2.71 -3.21 $103.8 million from $132.1 million in the were down 35.5 percent to $36.4 million. 2008 period. Analysts surveyed by Yahoo Gross margin as a percentage of sales 3.20 3.10 Tandy Leather Factory (TLF) 12.6 1100 3.20 -2.74 Finance anticipated a net loss of 1 cent improved to 43.3 percent, from 41.1 per- on sales of $104.2 million. cent, driven by improved margins in the Exits from the Bongo and Tribeca company’s retail business. Nonetheless, 8.12 7.68 K-Swiss (KSWS) - 200291 7.86 -2.72 businesses hurt sales, as did reductions comparable-store sales slid 12.9 percent. in private label programs and off-price Granoff, who said both comps and 39.00 37.25 French Connection * (FCCN:L) - 19797 39.00 -2.50 distribution, the company said. margins were improving in the fourth Despite touting inventory and cost con- quarter, pointed to the vendor’s need to 16.67 16.17 Luxottica * (LUX:MI) 23.6 1129836 16.34 -2.21 trols as instrumental in third-quarter re- make “progress towards citing a viable sults, the company issued fourth-quarter economic model” for its full-price stores. 7.39 6.85 Syms (SYMS) - 7701 7.06 -2.08 guidance that fell below analysts’ expecta- “Full-price retail is an important part tions. Kenneth Cole said it expects fourth- of the future of our company and repre- * Editor’s note: European stocks are quoted in the currency of their principal exchanges. Shares on quarter operating earnings per share of sents the face of the brand,” she said, the London Stock Exchange are quoted in pence, Richemont and The Swatch Group are quoted in Swiss between 4 cents and 8 cents, on sales in explaining that the firm is “pursuing a francs and Hennes & Mauritz is quoted in Swedish kronor. All other European stocks are in euros. the range of $107 million to $112 million. number of initiatives to optimize the Analysts projected earnings of 9 cents a fleet, including store closures, rightsiz- share on revenue of $118.5 million. ing and rent concessions.” Retail Shares, Broader Market See Declines By Evan Clark a deal valuing the firm at $44 billion, in- Metro Group Earnings Slide in Period cluding debt. By Melissa Drier ment store division, EBIT dropped 71.4 Investment guru Warren Buffett Buffett is known for his shrewd invest- percent to 2 million euros, or $2.9 million, might have surveyed the economic land- ments based on simple principles and de- BERLIN — Discontinued operations, neg- while sales declined 4.2 percent to 800 mil- scape and decided to double down, but scribed the deal as “an all-in wager on the ative currency effects and lower interest lion euros, or $1.14 billion. For the first the average investor had a ho-hum day economic future of the United States.” income due to the weak capital market nine months of the year, however, the divi- Tuesday. “America must grow and prosper for more than halved the Metro Group’s net sion posted an operating loss before special The S&P Retail Index slipped 0.1 per- railroads to do well,” he said. profits in the third quarter. items (investments) of 47 million euros, or cent, or 0.38 points, to 383.29, as the Dow But there was also a prominent re- The German retail giant, comprised $64.2 million, a slight improvement when Jones Industrial Average dipped 0.2 per- minder Tuesday of the toll on workers of the core Cash & Carry division, adjusted for currency effects over the pre- cent, or 17.53 points, to 9,771.91. Shares of as corporations downsize. Johnson & Galeria Kaufhof department stores as vious year’s loss of 43 million euros, or Polo Ralph Lauren Corp. rose 2.3 percent Johnson said it would lay off as many well as electronics chains, supermar- $65.5 million at 2008 exchange rates. to $78.47 after the firm bested second- as 8,200 employees as it restructures its kets and hypermarkets, reported a net The group is holding to the 2009 fore- quarter expectations. Leading all stocks global operations. Shares of the firm fell profit of 97 million euros, or $138.6 mil- cast it released in March, which calls covered by WWD, Revlon Inc. continued 0.9 percent to $58.93. lion, for the period. All dollar figures for “a less dynamic sales and earnings its recent surge, gaining 7.2 percent to The drumbeat of layoffs and business are converted from the euro at average development” due to weak macroeco- $10.79, 87 percent higher than on Oct. 23. failures since December 2007 has stripped exchange for the period. nomic conditions. Metro said it does Among specialty stores, Caché Inc. was more than 7.2 million jobs from the U.S. Earnings before interest and taxes not anticipate significant improvement ahead 5.2 percent to $5.04 and Charming economy, which even in the best of times (EBIT) slipped 10.5 percent to 323 mil- in the fourth quarter, and noted eco- Shoppes Inc. was up 5 percent to $4.81. needs to add about 150,000 jobs each lion euros, or $461.6 million, while net nomic conditions, especially in Europe, But it was a busy day for Berkshire month to keep up with population growth. sales were down 4.6 percent to 15.59 bil- will remain challenging. However, the Hathaway Inc. and Buffett, the com- Consumers have been laid low not only lion euros, or $22.29 billion. In local cur- group added it is well prepared for the pany’s chairman and chief executive of- by job insecurity, but also by shrinking rency, both EBIT (before special items) Christmas business, and that cost-cut- ficer. In Buffett’s largest acquisition to home values and reduced access to cred- and net sales were almost at last year’s ting measures and investment cutbacks date, Berkshire agreed to buy Burlington it. Many stores will update Wall Street on level, Metro pointed out. should help minimize the impact of Northern Santa Fe Corp., one of the the consumer’s mood on Thursday when At the 141-door Galeria Kaufhof depart- weakened sales on operative earnings. country’s biggest railway companies, in they report their October sales. WWD, WEDNESDAY, NOVEMBER 4, 2009 15 WWD.COM Material World Trade Fair Textile Industry Sees Largest U.S. Wage Decline By John Zarocostas raises questions “about the ability of workers and their No Longer Being Produced families to sustain consumption,” especially if government GENEVA — Wages in the U.S. textile products mills industry stimulus packages are terminated too early. NEW YORK — The Material World & Technology have experienced the biggest declines in the U.S. economy, With regard to the U.S. alone, Belser said, the ILO esti- Solutions trade fair has closed up shop. according to a global wage report published Tuesday by mates that “every 1 percent growth in nominal wages cor- Atlanta-based Urban Expositions, which or- the International Labor Organization. responds to about $60 billion that workers and their fami- ganized Material World shows in Miami and Los ILO analysts noted between August 2008 and August lies can spend on consumer goods and services.” Angeles, has decided to stop producing the show 2009 average weekly wages in textile product mills The ILO study found that, in the first quarter of 2009, after years of declining interest. dropped 6.2 percent from $460.60 down to $431.97. The most recent edition of the show took Between August 2008 and August 2009, average weekly place last month in Los Angeles and was the wages in U.S. textile mills contracted by 3.19 percent to $525.40 The continued deterioration in company’s first attempt at staging a show on the in August 2009 from an average of $542.70 in August 2008. West Coast. The show had partnered with the However, the fall in average weekly wages in the U.S. real“ wages worldwide raises serious Los Angeles International Textile Show to locate apparel industry dipped by only 0.76 percent to $407.40 the exhibitions at the California Market Center from $410.50, ILO experts said. questions about the true extent of in a bid to spur interest. Prior to the move to Los Average wages in the U.S. and other major economies Angeles, Material World hosted a New York edi- have posted significant declines since the beginning of 2009, an economic recovery. tion at the Jacob K. Javits Convention Center be- and the situation is “likely to get worse” despite the possi- ginning in 2005. bility of economic recovery, the global report predicts. — Manuela Tomei, International” Labor Organization The move to the West Coast coincided with “The continued deterioration in real wages worldwide rising competition for business in the region. raises serious questions about the true extent of an eco- real monthly wages fell in more than half of the 35 coun- Material World faced an immediate challenge nomic recovery, especially if government rescue packages tries for which recent data are available. Similarly, data from GlobalTex, run by Dallas-based Market are phased out too early,” warned Manuela Tomei, work from 22 countries indicate the crisis has adversely impact- Center Management Co. GlobalTex hosted its first and employment chief at the ILO. ed women’s wages. show at the Los Angeles Convention Center in The dramatic hike in unemployment figures in some “On average the gender pay gap has frozen with May and a second edition late last month. Both countries is also expected to put more downward pressure women’s earnings about 80 percent of men’s wages, in- shows generated positive responses from buyers on wages, ILO analysts said. terrupting the long-term trend to more gender equity,” and exhibitors. “This greatly suggests there will be greater pressure on the study said. Material World launched in 2000 as a partner- wages in the future as more people will be unemployed, In the U.S., women’s wages declined in 2008 to 79.9 per- ship between Fairchild Publications Inc., which and more looking for jobs, and the pressure on employ- cent of men’s wages from 80.2 percent in 2007, it said. publishes WWD, and Urban Expositions. In ers to increase wages to attract workers will decline,” said Moreover, in 2008, the study concludes that data from 2002, Urban Expositions had entered a new part- Patrick Belser, economist at the ILO. 53 nations show global growth in average wages slowed nership for Material World with the American In the U.S. since the beginning of 2009 “monthly wages down to 1.4 percent from 4.3 percent in 2007, but adds that Apparel & Footwear Association. have declined by almost 2 percent,” Belser said. already more than a quarter of the countries experienced — Ross Tucker The downward slide in wages worldwide, said Belser, flat or falling monthly wages.

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For more career opportunities log on to WWDCareers.com. Call 1.800.423.3314 or e-mail [email protected] to advertise. Spaces COMMERCIAL REAL ESTATE Sportswear Line Wanted Cash For Retail Stock & Closeouts. CAD Designer Wanted Mackage - NOW HIRING! No Lot Too Big or Too Small. GERBER TECHNICIAN Now Hiring Exp’d Store Manager and 20 year sales pro with strong following Call CLOTHES-OUT: Import company seeks 2 graphic Sales Associates for Mackage Boutique in Southeast seeks low to moderate designers for boys and Girls T-shirts. Seeking an experienced digitizer, sportswear line to sell to established (937) 898-2975 grader and marker technician. in Manhattan’s Soho! Must have apparel related experience Email resume to: [email protected] accounts. We show in Atlanta, GA, We in similar area. Excellent Photoshop Accumark & some pattern making cover VA, NC, SC, GA, Al. We travel. and Illustrator skills a must. Potential knowledge a must. Tel: 336-668-2398 Fax: 336-668-1467 for Full Time. 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Candidates must be aggressive AVAILABLE TO SHARE or fax to 913-845-2460 . No calls please. Supervise 10 plus Alteration Dept and motivated. Email resumes to: Please Call Joan @ 917-907-1667 [email protected] 212-947-3400 [email protected] The ttes tcefrtecperfectpetoef rensurefetctte assettinggentiting il krapssparklingpalrkli Y w NewNY ewr YearYaear PHOTO BY GEORGE CHINSEE

WHAT TO WATCH: SPRING 2010 JEWELRY & WATCH REPORT IN PRINT & ONLINE: November 30 SPACE CLOSE: November 12

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