Shades of Marc Lem Is the Relaunch of the Economy
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MAINLAND STELLA’S MOSCHINO NEW PARTNER THE BRAND SHOWS ITS WOMEN’S RESORT AND STELLA MCCARTNEY MEN’S SPRING 2014 SIGNS A NEW FRAGRANCE COLLECTIONS IN SHANGHAI LICENSE WITH PROCTER TO RAISE ITS PROFILE IN CHINA. PAGE 9 & GAMBLE. PAGE 7 CLOSE SLIGHTLY DOWN Coty’s New Shares Get Tepid Reception By MOLLY PRIOR COTY INC.’S fi rst trading day got off to a lukewarm start on Thursday. Making its debut against the backdrop of a ro- bust stock market, Coty’s shares — initially priced at $17.50 — had dropped to $16.90 by late morning, FRIDAY, JUNE 14, 2013 ■ $3.00 ■ WOMEN’S WEAR DAILY but began to rebound throughout the day to close at WWD $17.36 on Thursday, or down 0.8 percent, on the New York Stock Exchange. The closing stock price values Coty at roughly $6.94 billion. Investors may be taking a wait-and-see approach to the company, which has seen a slowdown in top-line growth so far this year. Organic sales are up 2 percent year-to-date for fi scal 2013, compared with 8 percent in fi scal 2012, noted Linda Bolton Weiser, an analyst at B. Riley & Co. “There is healthy interest out there, but [potential investors] want to see a better performance. It’s a bit of a ‘show me’ situation,” said Weiser. Coty’s chief executive offi cer, Michele Scannavini, celebrated the company’s initial public offering by ringing the opening bell at the New York Stock Exchange on Thursday, standing alongside the fi rm’s executive team and designer Vera Wang, whose fra- grances are produced by Coty. “It was a defi ning moment for us,” Scannavini told WWD, following the bell ringing. “We worked so hard over the last year to get there.” Scannavini said the IPO will not materially im- pact the company or its modus operandi. “The peo- ple are the same as before. The business is the same as before, and the challenges and successes are the same as before,” said Scannavini. “Our priority is to grow in-line or better than the market and to expand the operating margin. We want to defend or increase market share.” In terms of category focus, he said Coty will continue to work to build all three of its businesses — fragrance, which accounts for the bulk of its sales, cosmetics and skin care. “We believe there are opportunities to grow each of them.” He did note that as little as six years ago, fragrance accounted for 70 percent of the business. SEE PAGE 7 Bertelli Lashes Out By LUISA ZARGANI MILAN — Patrizio Bertelli wants Italian politicians to get their act together. The Prada chief executive offi cer on Thursday called on the government to institute a number of measures, including a 10 percent tax cut. Insisting the Italian luxury goods industry is in “excellent health,” Bertelli added, “The real prob- Shades of Marc lem is the relaunch of the economy. The cost of work Marc Jacobs is about to step into one of beauty’s most competitive categories: is high, but at the same time salaries are too low. We color cosmetics. The designer’s 122-stockkeeping-unit Marc Jacobs Beauty can’t raise salaries but we are conscious employees don’t have enough spending power.” line launches at Sephora on Aug. 9 and could do as much as $15 million at Addressing the problems of youth unemployment, retail in North America by yearend. For more, see pages 6 and 7. Bertelli said, “Politicians only talk about this now but there is no global vision. You have to accompany young people into the workforce, but there are not enough companies that can afford to do this and not enough work opportunities for young people. If we cannot add young people, there are no foundations for development.” In a forceful speech, the businessman said that only companies that export 50 percent of their production can survive in Italy, given that the market “is stalled.” Bertelli touched on subjects ranging from the need to avoid an increase of value-added tax, the high cost of bureaucracy and the lack of infrastructure that hurts tourism to cutting the number of holidays in order to meet the needs of production. Bertelli quoted an Italian politician, left-wing PHOTO BY GEORGE CHINSEE Fausto Bertinotti, who has said “Let’s all work, let’s all work less.” SEE PAGE 9 2 WWD FRIDAY, JUNE 14, 2013 WWD.COM Asia: Challenge and Opportunity THE BRIEFING BOX the age of 65, and the country’s senior citizens are By AMANDA KAISER “the richest in the world,” according to Motoya IN TODAY’S WWD Okada, president and group ceo at Aeon. Aeon has TOKYO — The demographic diversity of Asia — rolled out smaller supermarkets in densely popu- from Japan’s aging society to the fast-growing lated urban areas that are easy to reach by foot. consumer bases of China and India — offers up a The retailer also opened a large store in Tokyo fea- Jen Brill at the Barneys dinner. For more, see WWD.com. wealth of business challenges and opportunities for turing a café, bookstore and hobby space, catering retailers and manufacturers, according to execu- to older consumers’ desire for social interaction. tives speaking at a conference here. Kao has made an effort to label its products more The Consumer Goods Forum’s annual Global clearly and place them in smaller, lighter containers. Summit kicked off its three-day run here Seven-Eleven has launched a delivery service Wednesday, drawing hundreds of participants from for precooked ready-to-eat meals and groceries to the retail, consumer goods and food industries. The assist less mobile elderly customers. organization brings together chief executive offi- ■ Geping Guo, chairman of the China Chain Store cers and other executives of more than 400 compa- & Franchise Association, said Chinese retailers nies across 70 countries. have witnessed a slowdown in business over the Here are some highlights of the first two days of last couple of years in line with the broader inter- the conference: national macroeconomic trend. ■ Tadashi Yanai, chairman, president and ceo of Chinese retailers’ sales growth this year “will EICHNER Uniqlo parent Fast Retailing Co. Ltd., spoke can- remain within 10 percent,” she said, citing a survey didly about how his company turned its missteps conducted by her organization. STEVE into learning experiences. The executive gave sev- She said Chinese retailers are facing challenges as BY eral examples of where Uniqlo had failed when they lack an adequate level of managerial skills and PHOTO entering new markets, from expanding too quickly knowledge of the needs of consumers in third- and in London and subsequently having to close several fourth-tier cities as they expand to those markets. stores, to selling items that were priced too low in ■ Kishore Biyani, founder and group ceo of Coty Inc.’s shares on Thursday — the company’s first trading China, not realizing that Chinese consumers would India’s Future Group, spoke about his country’s day — closed at $17.36, down 0.8 percent, on the New York want the same quality of products available to extremely young consumers looking for “branded, Stock Exchange. PAGE 1 shoppers at Uniqlo stores in Japan. value-added” products. When entering the U.S. market, Yanai said the An Indian born in 2009 will over his or her life- Prada chief executive officer Patrizio Bertelli on Thursday company miscalculated by simultaneously opening time consume 13 times the amount of goods as one called on the Italian government to institute a number of three stores in New Jersey shopping malls, only to born in 1960, he said, adding that 60 percent of measures, including a 10 percent tax cut. PAGE 1 find that suburban consumers who were unfamiliar India’s population is under the age of 35. “Western with the brand didn’t shop there. The stores closed, fashion is doing phenomenally well,” he said. Marc Jacobs has teamed up with Sephora Originals to and unsold stock was transferred to Uniqlo’s SoHo ■ Yoko Ishikura, a professor at Keio University’s launch an ambitious color cosmetics collection called Marc store in New York, which was much more successful. Graduate School of Media Design, said Japan needs Jacobs Beauty. PAGE 6 “When failing, I think it’s best to fail early, when to work harder to empower its young people and [the business] is small. I think if you fail early, give them more practical hands-on business re- Stella McCartney has signed a licensing deal with the P&G you’ll be able to succeed the next time,” Yanai said. sponsibilities — perhaps even internationally — ■ Prestige division of Procter & Gamble Co. less than a month Nobel Peace Prize Laureate Muhammad Yunus early in their careers. The country also needs to PAGE 7 spoke passionately about his mission to create busi- rectify its woefully low gender parity levels and tap after leaving L’Oréal. nesses to help solve world problems like hunger into this underutilized but educated segment of the and poverty. population, she explained. Satish Malhotra has been named executive vice president As chairman of Bangladesh’s Yunus Centre and “My immediate suggestion is to get out of the of Latin America, Sephora Canada & Sephora Inside founder of Grameen Bank, the professor spoke of country,” she said, offering her advice to Japan’s JCPenney (SiJCP). PAGE 7 how he applied business principles to improve young people. “But we [older Japanese need to] people’s lives, from granting collateral-free loans make sure that Japan will be the much better place This year’s Fragrance Foundation Awards on Wednesday at to women in his native Bangladesh to setting up ag- when they come back.” Lincoln Center’s Alice Tully Hall in New York went off without a ricultural projects in Haiti.