Daily Edition january 3, 2017

Fashion. Beauty. Business. Forecast 2017 ● The Trump Effect on Trade ● Asia and Europe at Turning Points ● Beauty M&A A-go-go ● Will the Social Swans Fly Under Trump? ● Retail, Tech Talk and More sia Pietrzyk Illustration by A by Illustration Printed Daily DISTRIBUTED IN EACH CITY Men’s Fashion Weeks Men’s Milan FW Men’s Paris FW Men’s NYFW Daily Daily Daily

ISSUE: January 13 ISSUE: January 20 ISSUE: February 1 CLOSE: 01/09 · MATERIALS: 01/10 CLOSE: 01/16 · MATERIALS: 01/17 CLOSE: 01/26 · MATERIALS: 01/27

FOR MORE INFORMATION, PLEASE CONTACT PAMELA FIRESTONE, ASSOCIATE PUBLISHER AT 212 256 8103 OR [email protected] january 3, 2017 3

business Top 5 PMC, Rockbridge in Trending Robb Report Joint Venture on WWD.com

● Penske Media Corporation 1976, provides advice and recommenda- activation to deliver optimal consumer has invested in the guide to tions in superluxe categories such as avi- and advertiser experiences.” ation, boating, automobiles and watches. Robb Report will continue to exist the luxury lifestyle. The brand has steadily expanded its as an independent brand, but its New By Kara Bloomgarden-Smoke global footprint in the last couple of York and Los Angeles locations will join years. It was acquired in 2014 by the the PMC offices on either coast. Finan- Detroit-based Rockbridge Growth. cial details of the partnership were not Penske Media Corporation is part- The deal between PMC and Rock- disclosed. nering with Rockbridge Growth Equity bridge is scheduled to close in early PMC is a leading digital media and on the Robb Report, the companies January and will provide an opportunity information services company. Its owned revealed today. With this deal, PMC will for both companies to expand on the and operated brands reach more than add a stake in the authority on luxury current strengths of the Robb Report’s 179 million visitors monthly, according lifestyle for the ultra-affluent consumer consumer reach while growing its reach to comScore, and Penske Media was to a stable of titles that includes WWD, and building up its digital platform. recently named one of the Top 100 Pri- Variety, Hollywood Life and Deadline. “The partnership with PMC is a strong vate Companies in the United States and “Over the past four decades Robb strategic fit and joining forces will accel- North America. PMC is one of the largest Report has cemented its position as the erate and drive Robb Report’s future digital media companies in the world, world’s leading brand for luxury lifestyle,” growth,” said Brian Hermelin, managing publishing more than 20 digital media PMC chairman and chief executive officer partner for Rockbridge Growth Equity. brands, including its India.com joint Jay Penske said. “To bring the Robb “The joint venture and PMC’s investment venture with ZEE TV in India. PMC addi- Report onto the PMC digital platform is a allows us to focus our combined energies tionally owns and produces more than Gwen Stefani on remarkable opportunity to further propel on expanding Robb Report’s digital capa- 80 annual events, summits, award shows this pioneering media brand.” bilities as well as continuing to improve and conferences while housing a dynamic Fashion, Beauty, Robb Report, which was founded in its print distribution channels and event research and emerging data business. Love and Her Latest Deal with business Revlon ● Stefani has signed on as a WeChat Sees User Numbers Revlon global ambassador. ● Model Anna Cleveland Grow 35% in 2016 Faces $350,000 Lawsuit ● ● Of that total, 50 percent spent and video calls — a newer function on White Gloves Only at an average of 90 minutes per WeChat — grew 180 percent to 100 million The 62nd International this year, WeChat said. Debutante Ball day on the platform. As well as its own embedded payment By Casey Hall platform, WeChat Pay, WeChat also ● Anna Wintour, features the “Lucky Money” feature, Anya Hindmarch, which allows users to send virtual “red Victoria Beckham SHANGHAI — WeChat, China’s largest envelopes” traditionally given in China on and most pervasive social media plat- special occasions and festivals. Recognized in Queen’s form, saw its number of active users this Users in 2016 sent an average of 514 New Year Honor’s List year grow 35 percent to 768 million. Of yuan, or $74 at current exchange, per that total, 50 percent spent an average of month in Lucky Money envelopes to ● Nike Signs on Golfing 90 minutes per day on the platform. friends and connections, which extrapo- Champion Jason Day Unsurprisingly for a smart- The WeChat logo. lates out to more than 4.6 trillion yuan, or phone-based social media platform, the $644 billion, in Lucky Money being sent user base skews young, with 14 percent on Thursday. over the platform this year. of monthly active users between the ages Also on the increase in 2016 was the As reported, WeChat has become a of 17 and 21, with only one percent of amount of communication between significant part of retailers’ strategy for monthly active users over the age of 55. WeChat users. The number of messages China. Most recently, Coach decided to NEWSMAKERS WeChat, owned by Tencent, released the exchanged on WeChat rose 67 percent shutter its store on Alibaba’s Tmall in data at a press conference in Guangzhou year-on-year, while the number of voice favor of selling through WeChat. This Week’s Most Talked About Names In Our Industry How to Use WWD’s E-viewer

Tumi’s Jerome Tumi’s Jerome Tumi’s Jerome Griffith Gains Griffith Gains Griffith Gains Support As Lands’ Support As Lands’ Support As Lands’ End CEO End CEO End CEO Gwen Stefani Donald Trump Sleep Sleep Sleep Sleep Sleep Sleep No More No More No More No More No More No More

1. Tap the headline 2. Double-tap 3. To print this issue, 4. Like the e-viewer format for to launch the text-reader to zoom in on a page. hover over the bottom right WWD’s Digital Daily? version of an article. of your browser window and Let us know. E-mail Anna Wintour Anya Hindmarch click on the ellipsis symbol “…”. [email protected] with Choose the Print option questions or comments. from the menu. EX/Shutterstock; Wintour by Katie J ones Katie by Wintour R EX/Shutterstock; by Trump and Matt Baron; Wood Derek by photographs Stefani 4 january 3, 2017

beauty Gwen Stefani on Her Latest Deal With Revlon ● The musician and “Voice” judge has signed on as a global ambassador for the beauty brand.

By Allison Collins

It’s pretty obvious from her signature red lipstick that Gwen Stefani is big on beauty — but now, she’s making it official. The singer-actress-designer is the latest global ambassador for Revlon. It’s a long way from the Borghese counter at The Broadway in Anaheim, Calif., where she spent some of her younger years testing out her makeup artistry skills on shoppers. “I was a makeup artist when I was in my early twenties at the mall, they never trained me,” Stefani said. “I worked behind the counter there for Borghese, which nobody bought because it was expensive, and Ultima II, which I think is Attending the MTV Music actually owned by Revlon.” (It is.) Awards at the Metropolitan Opera House in 2001. Her target was the shopper who was intimated by the other salespeople (“they Stefani at the 33rd purposely make you feel horrible,” Stefani Annual Kennedy Center Honors in 2010. contends). “I’d be like, ‘Let me put some makeup on you, let me show you what you could look like,’” she said. “I just remember making people feel so much joy and so inspired and so full of confidence, and that’s what makeup can do.” But Stefani wasn’t chosen for the Revlon gig for her makeup application skills, advanced as they may be. “Gwen will clearly appeal to makeup enthusiasts,” said Benjamin Karsch, Revlon’s chief marketing officer. “She’s known far and wide for her red lips, so that’s definitely part of the attractiveness as a brand ambassador for Revlon, but that’s really combined with who she is as a person and also her love story.” Karsch is referring to Stefani’s blossom- ing romance with Blake Shelton, one of her fellow mentors on NBC’s “The Voice,” following a public split from ex-husband Gavin Rossdale. She joins the ranks of Ciara, Halle Berry, Olivia Wilde and Alejandra Espinoza, who are also Revlon Gwen Stefani at wrote, like, how did I do that?” ambassadors. 102.7 KIIS FM’S So she went back in the studio, writing “They have this Choose Love campaign, Wango Tango in 2016. most of her latest album in eight weeks which is full of choice and positivity and and then embarking on a tour. “Being dreams and truth and I feel like that’s “[The] Choose Love campaign...is full of choice on tour is like, a real exchange of love,” aligning exactly with where I’m at in my Stefani said. “You literally are giving all personal life in the last couple of years and positivity and dreams and truth and I feel of yourself every night…everybody there and how I’ve had to kind of choose love, was clearly connected to my story…it choose truth, choose to be positive and like that’s aligning exactly with where I’m at in was just an incredible healing, amazing, work my way back to a place of using my mind-blowing experience.” gift and sharing my love with people,” my personal life.” But despite the positivity generated from Stefani said. her most recent tour, Stefani hesitated “From the very beginning of her career when asked about potential new music. “I she inspired fans by sharing openly about brow pencil. “If you’re using just powders paternal grandmother gifted her a lipstick don’t know if I’m going to do new music, her own love story and the importance of and things like that you get home and half set. “I just remember being in my car…and I’m definitely at the end of a chapter,” she love in her life,” Karsch continued. “She’s your eyebrow’s gone and you’re like, ‘Oh trying on this burgundy lipstick and think- said. “I did the tour, I know I’m doing ‘The been a model of female empowerment for well, that’s embarrassing.’” ing to myself, ‘Wow, that’s it. This is never Voice,’ we already started filming…I’m many fans across the spectrum, and the Stefani’s makeup fascination took hold going to not be on my lips again.’” doing the stuff in my fashion, but I have way she shares her personal story fits very at a young age, when she watched her And that deep lip has stuck with her some dreams inside me and I know that I well with our brand positioning around mom and grandma get ready. “They had a from the days of braces and No Doubt have some stuff brewing so we’ll see.” Choose Love.” look,” she said. “My mom didn’t play — she through to solo albums, ready-to-wear, On the fashion scene, Stefani seems to Stefani agreed wholeheartedly that she’s put it together — she looked incredible. It accessories, cartoons (she has one called have her finger on the pause button of her the right fit for the movement. was always a bright pink cheek and bright “Kuu Kuu Harajuku” on Nickelodeon) rtw collection and is focusing instead on “They’re so smart to pick me,” she said. pink lip, that was like, my first inspiration and the breakup that prompted her latest products in more accessible price points, “This campaign…is really where my heart of color on lip.” album, “This Is What the Truth Feels collaborating with Burton a handful of is at. Not to mention my obsession with She also watched the girls in her class, Like,” released in March. times for winter gear and debuting an makeup for my whole life.” she said. “I grew up in Anaheim, Calif., “When I went through all my personal optical collection in 2016. “Rtw doesn’t The job also had her playing with an super heavy Hispanic [population] you tragedies in the past…music was the thing reach everyone, whereas when I do things entirely new set of products. “For me, I know — a lot of girls, like Chola girls, that was like my savior,” Stefani said. through my brand that are accessories or get stuck in a routine,” she said. “Like, that had unbelievable makeup…I would “Being on ‘The Voice’ also was a thing that now with the eyewear, it’s so fun to be able OK, this is what’s safe and this is how fast I daydream and watch them in class putting helped turn back on my light, I had lost a to reach everyone,” Stefani said. “It feels can put this on before I’ve got to go on the their makeup on, as people do when lot of confidence…Playing a different role so good to not exclude people.” school run.” they’re in class, and just be like, mes- in being a coach, and sitting there and That being said, a future RTW collection These days, brows are a primary focus. merized,” Stefani said. “That had a huge watching everybody work so hard and isn’t out of the question, she hinted. “I “It’s so youthful to have a heavier brow, it influence on me.” make so much progress in such a short definitely am working on a potential rtw makes it look so clean and so retro,” Ste- After perfecting her cat eye — which amount of time and having to think back to collaboration, but it’s a little early to be

fani said, adding she’s been using a Revlon she donned with a frosted pink lip — her my own career and think of all the music I talking about it.” A llen and Greg Pendzich C. Weiss, J aye Sara by Photographs january 3, 2017 5

Special Report: Forecast 2017 While 2016 was a year full of surprises, the uncertainty ahead puts a spotlight on challenges facing all corners of the industry.

● Political Agenda limited amount of protection available.” The fashion industry already lost one Holds Opportunities, important design battle at the High Court in December. The court ruled in favor of Concerns Samsung Electronics Co. over Apple Inc. in WASHINGTON — It’s the beginning of a a ruling that could weaken patent protec- new political era in the nation’s capital tion for fashion designs. and trade enforcement and tax reform “In light of the recent decision in Sam- are expected to be atop the agenda as sung v. Apple, in which the Supreme Court President-elect Donald Trump takes office used a 19th-century dictionary to dramat- and Congressional Republicans open a ically reduce the value of design patents, new session in control of the House and fashion — like other creative design-based the Senate. industries — has reason to be concerned,” There appears to be common ground Scafidi warned. between Trump and Congress in many While apparel and textile companies areas that could yield opportunities for have made strong commitments to fashion executives, ranging from lower sustainability through more environmen- corporate tax rates to a rollback of more tally friendly strategies, Trump’s picks burdensome Obama administration for Energy Secretary and Environmental regulations. Protection Agency administrator portend a But a slowdown in market-opening trade potential rollback of gains made. agreements and the potential repeal of Rhea Suh, president of the Natural climate and environmental rules and com- Resources Defense Council, opposed mitments has many concerned. The judicial Trump’s choices for Energy Secretary — Vice President-elect Mike Pence, Senate Majority branch will also come into play early this Leader Mitch McConnell, President-elect former Texas Gov. Rick Perry — and EPA year as the Supreme Court deliberates and Donald Trump and Melania Trump in the Capitol. administrator, naming Oklahoma Attorney issues a decision in an apparel copyright General Scott Pruitt – both of whom she protection case that has implications for said are unqualified and diametrically the fashion industry. The High Court will be it is something that Congress has talked right, would be a big win for retailer as opposed to the agencies they will run if further in the spotlight since one of Trump's about in the past,” said Jennifer Safavian, well,” said David French, senior vice confirmed by the Senate. early moves is expected to be the nomina- executive vice president of government president for government relations at the “The American people didn’t vote to tion of a justice to fill the seat left empty affairs at the Retail Industry Leaders National Retail Federation. return to the dirty old days when smog following the death of Antonin Scalia. Association. Copyright protection for designs is pend- choked our cities, and we didn’t vote to Expectations are high for more trade Safavian said there is the potential for ing at the Supreme Court early next year. turn a blind eye to the dangers of climate enforcement actions against countries smaller, bilateral trade deals down the The justices are expected to issue a ruling change,” she said. identified as using unfair trade practices road, but stressed that the Trump admin- in Star Athletica LLC vs. Varsity Brands The NRDC said Trump’s potential envi- that put U.S. companies at a competitive istration will be focused on enforcing Inc.,which could have far-reaching implica- ronmental policy threatens gains made disadvantage, especially China. But there is existing trade laws out of the gate. tions for the fashion world seeking clarity in America’s transition to a clean energy less certainty over trade liberalization. Congressional Republicans, particu- on design copyright rules.Cheerleader economy. A December report said the Trump has tapped billionaire Wilbur larly in the House, are eager to advance uniforms are at the center of the case but U.S. has made deep pollution reductions, Ross as his Commerce Secretary, a trade tax reform legislation, which could align fashion legal experts said the issue is about with coal use at record lows but renewable skeptic who is also seen as a pragmatic with Trump’s own tax plan. At the center so much more than the uniforms. energy higher than ever. One sign of how businessman with past ties to the textile of both proposals is an attempt to create “This case challenges copyrights issued far things have advanced: more than one- industry who could serve as a counter- more incentives for U.S. corporations to for five color-blocked patterns on cheer- fifth of the U.S. population lives in a state weight to Trump’s more protectionist stay at home by lowering the corporate tax leader uniforms, and by extension, poten- with a goal of at least 50 percent renew- trade proposals. Trump has indicated that rate from the current 35 percent. Trump’s tially calls into question the copyrightabil- able energy. Ross will take the leading role in shaping plan calls for lowering it to 15 percent ity of any other surface pattern that a However, the same day that PVH Corp, his trade agenda. Ross will face Senate while House Republicans call for cutting it judge might deem ‘functional,’” said Susan signed two environmental initiatives – the confirmations hearings early this year. to 20 percent. Scafidi, director of Fordham University’s U.N. Global Compact and CEO Water Man- But Trump has not yet announced his "There is an issue [a proposed bor- Fashion Law Institute, who led a group of date – chairman and ceo Emanuel Chirico choice for U.S. Trade Representative, who der adjustability tax on the full value of fashion designers in filing an amicus curiae said, “There’s enough going forward in traditionally takes the lead in trade negoti- imports ] that needs to be resolved but brief in support of Varsity brands, fighting initiatives that are built into business strat- ations and helps shape the administration’s overall tax reform is an overdue step and for design protection. “The fashion indus- egies that I don’t see a rollback.” enforcement actions at the World Trade something that would be constructive to try has been cheering from the sidelines, — Kristi Ellis with contributions Organization. Among the top contenders grow the U.S. economy and, if it is done aware that this case could roll back the from Arthur Friedman for USTR are Jovita Carranza, founder and chief executive officer of the business con- sulting firm JCR Group and a former Small Business Administration executive, and Good Signs Ahead for Made in USA Dan DiMicco, former ceo of Nucor Steel, who is leading Trump’s “landing team” The Made in the USA movement has to build its first manufacturing plant outside “I’m of a mind that free trade is a positive at the USTR office and has been a critic of slowly built momentum in the last few Asia in Forest City, N.C. thing for the U.S. economy and the average free-trade policies in the U.S. years and seems poised to pick up steam Meridian Specialty Yarns is investing $8 U.S. consumer,” Winthrop added. “Protec- Trump is also establishing a new White even as inherent problems persist. million to build a 265,000-square-foot facility tionist strategies can often be satisfying House National Trade Council to help The textile industry in particular has re-es- in Valdese, N.C., that will feature a new gener- in the short-term, but in the long-term are advise him on global trade and U.S. manu- tablished itself, notably in the more automat- ation of technology, machines, controls and dampening on growth and innovation.” facturing and has tapped Peter Navarro, a ed yarn and knitwear sectors, as an efficient, robotics for package, top and tow dyeing. President-elect Donald Trump appears Harvard-trained economist and professor quality source of fast-turn production. The project should be completed in the committed to Made in the USA and execu- at the University of California, Irvine to Lenzing Inc. said last month it was first quarter and is expected to add 26 jobs tives welcome that, but they don’t neces- head it. Navarro is a vocal critic of China investing $293 million to build a Tencel fiber to Meridian’s 146 employees in Valdese. sarily hold to the theory that U.S. production and the author of "Death by China" and plant in Mobile, Ala., where it already has a The knit factories American Giant has ei- and global trade are at odds. ther acquired or with which it has exclusive “President-elect Trump has some im- "The Coming China Wars." factory. The facility will have a production capacity of 90,000 tons a year and will be contractor relationships in North Carolina portant points to make concerning a level Trump has already vowed to pull the the largest Tencel fiber plant in the world. have been modernized with new equipment playing field,” Emanuel Chirico, chairman U.S. out of the 12-nation Trans-Pacific The plant is scheduled to start production in and a switch from batch to modular manu- and chief executive officer of PVH Corp., Partnership deal on the first day of his the first quarter of 2019. facturing and are operating at full capacity. recently told WWD. “Is there a level playing administration and he has also pledged “This expansion strengthens Lenzing’s So the company is looking at other facilities field when you’re talking about China? No, to renegotiate the North American Free commitment to our customers and con- for pants and jackets, for instance. there’s not. So we should see what we can Trade Agreement, label China a currency sumers in the U.S.,” said Stefan Doboczky, “One question looming for us is, as we do to address those issues, but we can’t manipulator and impose a 35 percent tariff chief executive officer of Lenzing. look get into wovens, the infrastructure take them to the nth degree and have a on imports of U.S. companies that manu- Also last month, Everest Textile USA, a isn’t as established as knits,” said ceo trade war because that would be nonpro- facture offshore. maker of performance fabrics, said it plans Bayard Winthrop. ductive.” — Arthur Friedman “I do think trade enforcement is some-

A P/ R EX/Shutterstock Molly R iley/ by Photograph thing the administration will look at and 6 january 3, 2017

Forecast 2017

● Retailers Brace for a environments with activity, energy. People friends and family, and the desire to touch, want that," said Michael Gould, the former feel and try on clothes before buying them. Game-changing Year Bloomingdale's chairman and ceo, who was Among the retailers to watch is Wal- also interviewed about retail consolidation Mart Stores Inc., the world's largest and The pace of change in a turbu- and what retailers must do to survive. America's biggest importer in terms of lent-yet-slow-to-innovate retail industry is "To quote Lyndon Johnson, you have seaborne shipping containers. The mass poised to accelerate. to walk and chew gum at the same time merchant could see rising costs if new Bankruptcies? Possibly a few. But — create exciting energetic stores and Trump policies impose tariffs on imports there's plenty that retailers have to develop the online," Gould said. "The from China and elsewhere. Anti-import grapple with amid shifting consumer The Wal-Mart web site. customer who shops [both] online and in policies, while encouraging domestic man- dynamics and shopping patterns, and the stores spends three-and-a-half to four ufacturing, could rile China and impede all the uncertainties that the new Trump personalized and localized marketing and times as much.” Wal-Mart's aggressive expansion there. administration brings. merchandising, and retailers will work Among other priorities in 2017: On the digital front, Wal-Mart will seek Look for intensified consolidation of harder to remake selling floors, pumping • Getting a handle on Millennials. to grow Jet.com, which was purchased in America's overstored retail landscape, as up activewear, beauty, food and experi- Retailers must figure out their wants and August for $3 billion, and its overall [and well as ongoing convergence of brick-and- ences like yoga and cooking classes and needs. Millennials have limited brand underdeveloped] dot-com businesses, mortar and digital operations, monetizing makeovers, to offset softer categories. loyalty, spend more on experiences and which represent just 3 percent of the of flagship properties through sell-offs “It’s not about just selling goods less on material things, and patronize chain's $482 billion in annual sales. and redevelopments, increased mobile anymore,” Glen Senk, ceo of investment products and brands tied to social and Other retailers to watch: shopping, advanced analytics, and Inter- firm Front Row Partners and former ceo environmental causes. • Amazon, and its thrust into apparel net pure plays adding retail stores to their of David Yurman and Urban Outfitters • Monitoring President Trump's policies and brick and mortar beyond existing business models. Inc., said in a recent interview regarding on trade, government regulations, health book stores. And expect a wave of successions with industry consolidation. “Brands have to care, job creation and tax reform, which • Sears Holdings Corp., which continues new leaders possibly emerging at J. Crew be more than just products; they have to will impact imports, consumer prices, to close stores and lose money. Group, Kohl's Corp. and Abercrombie & have meaning. Stores need to keep evolv- business growth and corporate profits. • J. Crew, which needs to revive its col- Fitch Co. At Lands' End, Jerome Griffith ing. I don’t think retailers are changing as • Stressing convenience and ease of shop- lection and reconnect with consumers. became chief executive officer in Decem- much as they need to,” Senk said. “I don’t ping. Consumers are likely to see better • Bon-Ton Stores Inc., which continues to ber, and in February, Jeff Gennette steps think there’s enough customer centric- trained, more knowledgeable, empowered suffer poor results and shoulder the burden up to the ceo post of Macy's Inc., succeed- ity. What technology does is give you and technology-equipped sales associates; of having many stores in poor locations. ing Terry J. Lundgren. tremendous insight into people’s behav- additional payment options, additional • Neiman Marcus, which has been losing Retailers will be operating with lower iors. Some people use technology to their shipping options and faster deliveries of all traffic and sales, is saddled with $4.7 bil- inventories, bringing products to mar- advantage to gain access to that [insight] types of goods and services, with the touch lion in long-term debt, and must widen its ket quicker and turning them quicker, and some people don’t.” of a button or the sound of your voice. appeal and renew the aura of exclusivity. and pop-ups will proliferate, hoping “People have been going to the market- • Stepping up the quest for unique and • Hudson Bay Co., a high-flying news- to heighten that sense of newness and place since the time of the Greeks. We will exclusive products. maker, is always on the prowl for an change. Offerings will be further shaped continue to do that, as long as we see new • As online sales grow at a slower rate, acquisition. by deeper mining of consumer data and environments, like Nike in SoHo and Adidas brick-and-mortar retailers will play up the — David Moin with contributions from the use of artificial intelligence to devise on Fifth Avenue, where they have created social aspects of shopping, as an outing for Sharon Edelson

● Smaller, Faster, opened in July and is part of an ongoing, multimillion-dollar revamp of the store. Better? Collins is also a big believer in another trend that's taking fashion and luxury by LONDON — It's time for luxury to make do the throat: Instant fashion. "People are and mend — as World War II Britons would not investing at the beginning of a season. say — and rely on its wits and existing We're an instant culture — we're Uber, resources to survive increasing uncertainty Deliveroo — buy-now-wear-now. The busi- in the months to come. ness is getting faster and faster." Even as high-end demand begins to show The luxury watch industry, meanwhile, signs of recovery, there are still battles still is facing its own set of woes as it read- to be fought and one fundamental prob- justs to lower levels of demand, higher lem: Too much stuff, not enough demand. input costs, a Chinese crackdown on Consolidation will be the great aspira- gifting and import duties for big-spending tion of brands, retailers, designers and Selfridges’ designer studio. tourists returning home to China. After a showrooms. Larger, more mature busi- tough year of buying back watches from nesses in particular will have to examine deterioration" in the underlying economic Boston Consulting Group, "tier 2" cities — its wholesale clients, and two rounds their budgets and strategies as the sands of fundamentals that support luxury sector such as Washington, D.C. — and "marginal" of layoffs at Cartier, Gary Saage, chief consumer demand continue to shift amid growth, especially against the backdrop of areas will see the most closures or store financial officer of Compagnie Financière geopolitical and economic uncertainty. political uncertainty. resizing from fashion and luxury groups. Richemont, said the company is adjusting No one knows what Brexit negotiations In the personal luxury market, Ortelli is Burberry is focusing on local consum- to the new normal for the watch business. will mean for Britain or the sort of leaders forecasting 0 percent growth for 2016; 2 ers rather than fickle tourists, while other “Before the gifting explosion in France and Germany will elect in the percent for 2017, and 4 percent thereafter brands are putting a greater emphasis on China, we were seeing modest growth coming year. Hong Kong — once a boom- to 2020, with the “potential for year-over- omnichannel and alternative retail formats in watches. We don’t know where sales town for luxury brands — is fast becoming year volatility,” due to macroeconomic as they expand into new markets. are going to be in the future, but we can a ghost town, while the high-end watch uncertainty. Selene Collins, who specializes in sales no longer expect a return to growth of industry continues to struggle. And the What to do? and strategy for fashion brands at her 20-odd percent,” he said. threat of terrorism is ever-present. For starters, brands are doubling down, London showroom, said pop-up culture Although the year-on-year decline in "The big, big question will be about showing men's and women's together on will remain strong, because it’s a low-risk watch exports appears to be slowing, the spending," said Avery Booker, cofounder the catwalk. It's cheaper, easier and allows approach for retailers and allows for more light at the end of that particular tunnel and chief executive officer of Enflux, a buyers to write their orders earlier in the direct interaction for the consumer. remains a pinprick. London-based company that monitors con- season. Burberry, Tom Ford, Dsquared On a similar note, she said Selfridges According to analysts, watch prices in sumer data and behavior. and Thom Browne kicked off the trend, Designer Studio is a window onto the future the new year will remain flat and inven- In particular, he said, brands and retail- with Gucci, Paul Smith, Kenzo and others of retail. "It's a free-moving, organic envi- tory buybacks are in the cards, although ers will be looking at how to consolidate set to follow in 2017. ronment — a mix of contemporary, street volumes are set to edge up. their retail networks and online social The Kering brands, meanwhile, are and designer, with anchor brands like Chris- Ortelli calls the outlook "subdued," while presence. "A lot of them have wasted so making their stores work harder. “We are topher Kane, Vetements and J.W. Anderson. Thomas Chauvet of Citi said the mood much money, throwing it at the wrong present today in the most important cities It's the Dover Street Market model," she said. remains cautious among watch retailers things," such as splashy events, celebrities and locations in the world," said Kering Inspired by a contemporary art space, globally given all the political uncertainty, and influencers who fail to deliver a return chief executive officer François-Henri the new Designer Studio showcases men’s travel fears, depressed oil prices and stock on investment. Pinault. "Our priority is to extract more and women’s wear side-by-side; highlights market and foreign exchange volatility. Mario Ortelli of Bernstein Research value from them." items rather than brands, and changes A year, then, for a quiet reboot.

has pointed to the “potential for According to a report by Ortelli and its special configuration every season. It — Samantha Conti Salgado A ntonio by photograph Selfridges january 3, 2017 7

Forecast 2017

● Fashion’s Fresh homecoming for Kim and Garcia. Come September, they were named co-creative Faces and directors of de la Renta. Herrera didn’t like that. Not one bit. Legal Cases Last month, Herrera filed a lawsuit in What's on tap for fashion? Direc- the Supreme Court of the State of New tion-wise, the bets for early 2017 were York seeking to block Kim from joining placed months ago. Following the spring de la Renta until April in accordance with collections in September-October, Kim’s non-compete agreement. The suit retailers continued to cite the European supplied juicy grist for the gossip mill, powerhouses that have ruled the trend including plans to replace Herrera in roost for the past few seasons: Gucci’s the role of designer with Kim, and the maximalist neo-nerd; the indulgent irony fact that the non-compete only applied of luxury streetwear from Demna Gvasalia to Kim’s potential employment at de la at Vetements and Balenciaga, and Gosha Renta. Businesswise, Carolina Herrera Rubchinskiy. Net-a-porter’s vice president and Oscar de la Renta are fierce com- of global buying, Sarah Rutson, for exam- petitors. According to Kim’s affidavit, ple, drove home the ongoing importance following her resignation from Herrera of street style during the company’s in July, she and Garcia were told not to spring presentation — Vetements, Vete- come back to the office. “In fact, Carolina ments, Vetements and Off-White. These Herrera said to me at that time: ‘Nobody are names, labels and looks that have knows you and nobody knows that you reverberated up and down the fashion are here. I am more famous than you and food chain for a while. The question now: have more powerful friends.’” Is there still room for one more designer A preliminary injunction barring Kim sweatshirt and embroidered bomber from working at de la Renta was issued jacket in even the most devout, fash- and lifted the week of Dec. 19. As of ion-hungry Gucci acolyte’s closet? press time, a hearing date is set for Jan. It’s true that the big, exciting fashion 10 in a Manhattan state court. Following news and influence have come mainly the court’s dismissal of the temporary out of Europe for several seasons, while restraining order, the Herrera company the U.S. has fueled a far less sexy, if no said, “The company, Carolina Herrera less relevant, “fashion system” frenzy. Ltd., understands and appreciates the We have not nearly heard the last of the judge’s reasoning for today’s decision, see-now-buy-now blah-bitty blah, but which is to ensure the January 10 hearing for fall, American fashion is positioned is the final word on the question of the for high-profile newsiness and, perhaps, preliminary injunction. It’s important to reclamation of style authority by way note the judge put the opposing parties of a Belgian designer now in command on notice that if he grants the preliminary of an iconic U.S. brand. In February, injunction, they will be prohibited from all eyes will be on Raf Simons’ debut at using any and all work product they have Calvin Klein, where the vision he presents jointly created if they choose to work will have been at least six months in the together before January 10. We are satis- works. No pressure. fied with this decision and look forward Speculation is part of the fun in any to continuing to pursue this matter.” Stay new marriage between a major creative tuned… — Jessica Iredale Raf Simons force and a megabrand, but truthfully Simons’ Klein is a bit of a wild card. Simons’ vision for women’s wear at Jil Sander and Christian Dior was modernist L.A. Garnering More Fashion Names and lady-fied, while he’s dealt in edgier, artier, cooler fare for his own men’s wear Rachel Zoe collection. The Klein tenets of sensual minimalism could bring Simons closer to his men’s aesthetic, particularly in light of the fact that Simons is taking over the entire CK purview including Calvin Klein Collection; Calvin Klein Platinum; Calvin Klein; Calvin Klein Jeans; Calvin Klein Underwear and Calvin Klein Home brands. According to the company, Simons will oversee all aspects of design, global marketing and communications and visual creative services. That gives him a lot of creative latitude. Will Simons be the second coming of Calvin, in terms R EX/Shutterstock Branch/WWD/ by Zoe Gianonni/WWD/ R EX/Shutterstock; Giovanni Hilfiger by A / R EX/Shutterstock; of fashion zeitgeist? Is that even possible nowadays? It will be fun to watch. There’s another debut at a major American house on deck for fall, with Rebecca Minkoff Tommy Hilfiger co-creative directors Fernando Garcia and Laura Kim at Oscar de la Renta. This It seems that every few fashion cycles, from Los Angeles. The Grove on Feb. 4, also a buy-now show. one comes with a side of legal scandal. To the industry tries to make Los Angeles For the upcoming February show sea- Hilfiger is staging his second immediately recap, Kim worked under de la Renta for a thing, asking if the city will finally be a son, there’s a real Westward fashion wagon shoppable show in Venice Beach Feb. 8, 12 years before leaving in 2015 to launch viable fashion capital. Remember in 2015 train, led by Ford and a bunch of see-now- the night before New York Fashion Week her own label Monse with Garcia, who when everyone was going there? First buy-nowers, including Tommy Hilfiger kicks off. More than 3,000 press, buyers, also worked for de la Renta for several Tom Ford took his runway show west for and Rebecca Minkoff, who are staging industry influencers and consumers are years. Though Monse was a creative hit a pre-Oscars publicity bonanza; Burberry elaborate happenings in L.A. Details on expected to attend an ocean-side runway staged an encore of its fall collection at Ford’s plans haven’t been disclosed, but it’s show along the beach. Then there’s Rachel EX/Shutterstock; Minkoff by Kalaidjian/BF by Minkoff R EX/Shutterstock; A nyc.com/ from the beginning, the designers took side jobs consulting at Carolina Herrera, the Griffith Observatory; Louis Vuitton thought that he’ll reprise his Oscar-timed Comey, who has scheduled her fall 2017 show. Rachel Zoe, who is based in L.A. but show for Feb. 7 at L.A.’s Hauser Wirth & where Kim was eventually hired as senior took over Bob Hope’s house for its cruise collection in Palm Springs (not L.A. but typically shows in New York, is presenting Schimmel gallery. In the past, Comey has vice president for design last January. Yet close enough.) All the while Hedi Slimane her fall collection, plus some buy-now stuff held her show in Red Hook, Brooklyn. And Peter Copping’s abrupt departure from de was running his hot, hot, hot Saint Laurent in her hometown Feb. 1. Minkoff is going to people thought that was a trek. — J.I. la Renta in July had left a major hole, and

Simons photograph by BF by Simons photograph speculation spun early about a possible 8 january 3, 2017

Forecast 2017

● Asia Anxiously The Shanghai skyline. 150 days. However, Trump can unilaterally impose tariffs on targeted goods, the finan- Awaits the Trump Era cial services group noted. Beyond China, there are several other The election of Donald Trump to the dynamics in Asia set to dominate 2017 and United States presidency is ushering in an shape the future of the region. Japan’s econ- era of uncertainty for Asia and its econ- omy is showing signs of a pickup, although omies. The region is waiting to see how its longer-term prospects for growth are much of the president-elect’s protectionist rather limited compared with other Asian rhetoric will materialize into actual policy nations. South Korea’s economy is expected — like his threat to impose a 45 percent to suffer in the wake of a political scandal tariff on all Chinese imports to the U.S. and the impeachment of President Park Such a move would dent China’s gross Geun-hye. Hong Kong’s economic prospects domestic product growth and likely ignite are far from stellar and political friction a full-fledged trade war, with wide-ranging with China — its number-one trading part- implications for the entire region. ner — is seen continuing. Even before taking office, Trump is mak- Meanwhile, other countries are emerg- ing his mark in Asia as a disruptor hell-bent ing as economic powerhouses. India’s on shaking up decades-old geopolitical GDP growth is expected to clock in at protocol and openly challenging China. Just 7.1 percent in 2017 and accelerate to 7.7 a little more than a week after accepting a percent in 2018, while certain Southeast congratulatory phone call from Taiwanese Asian countries are becoming significant President Tsai Ing-wen on his election, protagonists in the region. Trump told Fox News that he might not “In the longer run, once the storm respect the “one-China policy” that tacitly passes we see a growing divide as Asia’s acknowledges Taiwan is part of China. striving cubs (India, Indonesia, the Phil- China’s state-run Global Times newspaper ippines and Vietnam) unlock their full fired back that he was “ignorant as a child.” its perilously high credit levels and their stance on its outlook, CLSA said a Trump growth potential and replace the aging Such provocations come at a time when potential to spark a financial crisis. presidency might actually pave the way for tigers (China, Hong Kong, Korea, Singa- China is already grappling with an eco- “After the U.S. election result, we believe badly needed changes in China. pore and Taiwan) as the core of economic nomic slowdown, a shrinking labor force, 2017 will be even more challenging for Asia “Trump’s measures will have a nega- dynamism in Asia,” Nomura said. overcapacity and languishing exports to stay on an even keel,” Nomura research tive impact on trade, but the silver lining — Amanda Kaiser — not to mention mounting fears about analysts said in a recent report. “Simply is that it could push the government to put, we see too many large risks stacked to accelerate reform and move away from the downside. Asia’s economies are struc- the low-end manufacturing that has turally slowing — its largest, China, is in a created the most trade tension. He could Apps to Watch late-stage credit cycle — and after Mexico, provide the sense of urgency to make the Tech Trends The Chinese sharing economy was we judge that Asia is most vulnerable to hard choices of slowing credit growth, In 2016, virtual reality was the most worth 1.96 trillion yuan (or $281.71 U.S. President-elect Trump’s inward-look- cleaning up bad debts and restructur- searched-for tech term on Baidu, billion) in 2015 and is expected to ing policies.” ing state-owned enterprises. We expect China’s most popular search engine. grow by 40 percent annually over China’s real GDP growth has been con- reforms to accelerate in 2017,” CLSA Alibaba began trialing VR retailing in the next five years, according to a stant at 6.7 percent for three quarters and analysts said in a recent report. November, in the run-up to Singles’ report released earlier this year by the Nomura said it expects Beijing will strive It will be easier and faster for Trump Day, and launched a VR online chan- country’s State Information Center, to keep it at that level next year ahead of to deliver on trade and immigration nel called Buy+. This channel allowed a government think tank. The same key political changes. But the bank char- issues rather than tax cuts and infrastruc- smartphone users the opportunity to browse and pay for products in the vir- report also predicted that the sharing acterized this stability as a “facade” and ture-spending plans, which puts China at tual reality stores of eight international economy would be worth 10 percent of stressed the need for China to tackle large- particular risk in the first half of the year, chains, including Macy’s. According the country’s GDP by 2020. scale state-owned enterprise restructuring, CLSA said. As for the 45 percent tariff on Clothes-sharing apps are riding to Alibaba’s data, 76 percent of the 8 including the re-pricing of credit risk and Chinese imports, it is still unclear how million people who tried VR shopping in the consumer adoption wave of the market-opening policies. realistically Trump can follow through on sharing economy. One More Closet is the runup to 11/11 were born after 1980. “But all these reforms entail short-term his threat. Unless a national emergency Next year, virtual reality and aug- one such platform that was founded pain for long-term gain, a trade-off that Bei- is declared, the president can’t impose earlier this year and allows users to mented reality will be increasingly used jing seems unwilling to accept,” they said. blanket tariffs of more than 15 percent — rent dresses, accessories, jewelry and for training, customer care and shop- Taking a somewhat more optimistic even then he can only do so for as long as shoes, at 10 percent of the retail price, ping in China, predicts Mark Tanner, as well as connect users to share their founder and managing director of Chi- wardrobes. “We partner with famous na Skinny, a marketing, research and designers who want to test new prod- online agency. “Low-cost cardboard VR uct lines and promote their current Companies to Watch headsets, which smartphones can be collection. We also partner with rental slid into and cost a couple of dollars, Chinese fashion companies are set 10 Corso Como to China. shops that have a large selection of make it a viable marketing option. The to continue their international shopping Meanwhile, Singapore’s Charles & top international brands. And of course, explosion of VR ‘cafés,’ similar to the sprees next year. Keith is aiming to be the “Zara of shoes.” individual users are our biggest asset, old Internet cafes in China, offers a Aquascutum’s Hong Kong-listed owner The budget-conscious accessories with closets full of top brands such as very rich experience, he predicts. YGM Trading Ltd. is reportedly putting the brand is planning to enter Russia, the Dior, Chanel, Prada and so on,” said Chinese brand Babyghost, launched brand up for sale to the tune of $120 million. latest step in its international expansion chief executive officer Crystal Yu. in 2010 by Qiaoran Huang and Joshua Word has it the potential buyer is Shan- strategy. The brand is currently scouting Ms. Paris, an online service with iOS, Hupper, is incorporating technolo- dong Ruyi Group, which acquired French for franchisee partners with the ambition Android and WeChat apps, rents out gy in both their presentations and fashion group SMCP earlier this year. to open dozens of stores there next year. its own inventory of designer dress- clothing. At their spring presentation, Shandong declined to comment. Chinese It’s already set up across 38 countries as es, such as Vera Wang and Michael Babyghost not only had a VR display Gangtai Group Ltd. just snapped up a disparate as Azerbaijan, South Africa and Kors, to consumers across China at a of its popular Instagram feed, but also majority stake in luxury jeweler and watch- Panama, growing from the original shoe 90 percent reduction in retail prices. included blockchain chips — the unique maker Buccellati. Shenzhen Ellassay, which shop set up by brothers Charles and Keith Launched in 2015, the success of the code used to make the virtual curren- bought Ed Hardy and Laurel, has been Wong in 1996. online concept has allowed the com- cy Bitcoin — sewn into the clothes. explicit in its aspiration to become a global Though it will require adapting its pany to open two brick-and-mortar The idea is for blockchain to guaran- fashion group so it could do more deals. product line for Russia’s much more varied locations in Shanghai and Beijing. tee the authenticity of garments and Elsewhere, Chinese apparel company and cold climate, Charles and Keith prides Social commerce has played a role communicate with a wearer’s smart- Trendy International Group is reportedly itself on being completely vertically inte- in the development of this platform. phone to alert them to promotional planning a $5 billion IPO in 2017, which grated and has some powerful backers in “Challenges are for customers to activities, styling tips and connecting would be a major development for China’s the form of L Catterton Asia. get over the mental hurdle of wear- them with the Babyghost community. homegrown fashion industry. Set up in Charles & Keith is still noticeably absent ing clothes that have been worn by “[This] technology offers a vast and, 1999, it owns and operates nine brands from the U.S. other than e-commerce but it others. It’s a word-of-mouth business, until now, relatively unexplored po- including their own labels Ochirly and did get a dose of Stateside exposure when so after seeing friends use it, they will tential for a whole new level of label Five Plus, Miss Sixty’s Asian business, Game of Thrones actress Maisie Williams likely reconsider,” said Chris Roxbury, interaction,” Hupper said. and through various partnerships was toted two of the brand’s bags to this year’s business development director. — Niyma Pratten with contributions responsible for introducing Superdry and Emmy Awards. — Tiffany Ap from Casey Hall — Nyima Pratten R EX/Shutterstock Cultura/ by Photograph january 3, 2017 9

Forecast 2017

● Calls for Optimism Amid Uncertainty for French Fashion

PARIS — Political uncertainty and a François Fillon still-ailing tourist industry will challenge the French fashion industry in the year After Brexit and to come, but signs of a rebound in global luxury demand are fueling optimism for Trump, Could It the famously resilient sector. As France prepares to choose a new pres- Be Le Pen? ident in two rounds of voting in late April and early May, businesses and individuals Stagnating incomes, unemploy- would normally hold off on spending while ment above 10 percent, widespread they wait for the election’s outcome. Gildas concern on terrorism and national Minvielle, director of the Economic Obser- security, frustration with the political vatory at the Institut Français de la Mode, class — France appears to have all of said that “2017 is an election year, and this the elements in place to be the next is not typically good for consumption." country to be shaken by a wave of But amid widespread dissatisfaction populism. with the Socialist government headed It may come as no surprise, then, that the far-right National Front’s by President François Hollande — whose Marine Le Pen — who is promising a approval ratings had plumbed record lows national referendum on France’s EU of four percent before he said in Decem- membership and a near-complete ber that he would not seek reelection — shutdown on immigration — is coming the conventional wisdom may not apply. in at close second in polls for France’s “People are optimistic about what presidential race. could happen when Hollande leaves,” At 24 to 25 percent of votes de- said Renaud Dutreil, a former politician pending on the scenario, Le Pen trails who has served as chairman of LVMH the front-runner François Fillon by Moet Hennessy Louis Vuitton’s North just 2 to 5 percent, according to a American arm. “A new president bringing December 14 survey by Sciences some hope and some fresh air could really Po’s political research center Cevipof. push up consumption and investment.” (Emmanuel Macron would win 13 to 18 Status-quo candidates have quickly of votes, according to the survey, up fallen out of favor in the current presiden- from 10 percent a month earlier.) tial campaign, with the leading candi- But even if Le Pen comes in sec- dates running on platforms that include ond or were to win the first round of substantial economic reforms. voting, moderate voters are widely The center-right candidate François expected to rally around a main- Fillon — who is broadly favored to win stream candidate to block the Nation- al Front’s rise — as they did in 2002, — has been branded a “French Margaret when Jacques Chirac took 82 per- Thatcher” for his promises to raise the cent of the vote in a run-off against Le age of retirement, reform social security, Pen’s father, Jean-Marie. scrap the 35-hour work week and simplify “Marine Le Pen has no allies,” said the rules for firms to fire long-term staff. Renaud Dutreil. “She is not able to Dutreil served as a minister alongside gather more than 50 percent of Fillon in the center-right government voters. Alone she is doomed to be of Jacques Chirac, but has been a vocal beaten in the second round.” supporter for an independent candidate “’I think that France is more resil- for president, Hollande’s former economy ient when it comes to the far right,” minister Emmanuel Macron. The 39-year- said BCG’s Olivier Abtan. “We have old Macron, who stepped down from the had Le Pen and the National Front Socialist government in August, has also for 30 years now and we have known proposed sweeping reforms to social secu- While the French fashion sector could doesn’t expect strikes to impact French how to resist it, even in periods of rity, retirement, and labor — but has placed benefit from the looser restrictions on luxury firms directly. economic difficulty.” an emphasis on liberalizing the economy labor as well as tax cuts proposed by But strikes and protests could threaten France is a founding member and while still maintaining social protections. either candidate, firms could face sig- the recovery of France’s tourism industry architect of the European Union and “A large majority of French people are nificant disruptions in the short-term as — a key contributor to luxury sales which euro zone. As such, a Le Pen win against a Thatcherian revolution,” said reforms are expected to produce vehe- have struggled to bounce back following could signal the demise of the Euro- Dutreil. "Macron thinks there can be mix ment opposition from labor interests. terror attacks in Paris and Nice. For the pean project and send shockwaves through the world economy. “Busi- of security and flexibility. He embodies Strikes and protests — at times turning year from November 2015 through Octo- nesses are not preparing for this,” two contradictory aspirations of the violent — already roiled French cities in ber 2016, tour operators saw a 10 percent however, “because it’s not going to French people, the desire to move forward spring 2016 as unions mobilized against a drop in the number of clients, according happen,” according to BCG’s Olivier but to keep the best aspects of our system. comparatively modest labor reform spear- to the tour operators’ trade union Seto. Abtan. People are not open to reforms that would headed by Macron under the Hollande “We’ve had a big drop in affluent tour- Add another ingredient for a popu- make them regress to the Seventies.” government. A second round of reforms by ism, and these people aren’t coming back list upset to the list: experts who say Macron has been polling mostly in third Macron or Fillon’s more radical program yet,” said Olivier Abtan, head of global lux- it’s impossible. — R.W. place — behind Fillon and the National could both lead to prolonged periods of ury at Boston Consulting Group. “If there Front’s Marine Le Pen — meaning he would social unrest. are strikes and the country is blocked for not be expected to make it past the first “Our sector has a good social climate weeks or months this is a problem.” round of voting. “Macron has the strongest which has been able to manage reforms For Abtan, political uncertainty is sec- A bright spot for French fashion in 2017 trend,” however, according to Dutreil. “He peacefully and respectfully,” said Frédéric ondary to the structural challenges facing could be the “accessible luxury” sector, is starting from scratch and is creating Galinier, director of social and legal affairs France’s export-focused fashion indus- including brands like Sandro, Maje and surprise. He has everything to gain.” at the French Federation of Couture, who try. Despite signs of a rebound in global Isabel Marant. “These brands have been demand — particularly in China and North developing in the white space left by lux- America — “growth in the global luxury ury, which has pushed up prices a lot over market will continue to slow down — and time,” said Abtan. “They have taken the “A new president bringing some hope and some this is structural,” Abtan said. luxury approach to brand building and a The French luxury industry was built fast-fashion approach to supply chain.” fresh air could really push up consumption and on the rising wealth of Baby Boomers in While Abtan and his colleagues at Bos- the Eighties and Nineties, and then on ton Consulting Group project top luxury investment.” sales to emerging China — “and there isn’t growing at 2 to 4 percent in 2017, and another China — at least not yet. Much mass market fashion at 2 percent, afford- slower growth of 2 to 4 percent per year is able luxuries could grow by 6 percent in

Photograph by Thomas Samson/Pool Photo via A P Photo Thomas Samson/Pool by Photograph — Renaud Dutreil here to stay," he said. the year to come. — Robert Williams 10 january 3, 2017

Forecast 2017

● Italy in a Quagmire a research note that “households are in 2015 was under investigation. increasingly fearful of accumulating risks, Following Renzi’s resignation, Luca MILAN — Italy’s fashion industry saw its namely growing political tensions, the Solca, managing director and sector head share of moving pieces at major fashion country’s banking sector tensions and of global luxury goods at Exane BNP houses in 2016, both in design and man- disappointing labor market developments Paribas, predicted “more austerity” for agement. Alessandro Sartori will debut in recent months. The political mess and Italy. “Italy has used debt and devaluation his first collection for Ermenegildo Zegna the prospect of a particularly hostile future in the past to absorb social tensions. The in January, as will Guillaume Meilland for general election could spark a further problem is both are no longer available Salvatore Ferragamo’s men’s wear under retreat in consumer confidence during now,” he wrote. new chief executive officer Eraldo Poletto. 2017, which would be a major risk to our A weaker euro, on the other hand, is Men’s wear brands Corneliani, Boglioli assessment that consumer spending will providing a breather, as is solid business and Pal Zileri will all kick off the year with underpin near-term growth prospects.” with the U.K. following the Brexit vote and new ceos — Paolo Roviera, Andrea Perrone In December, Italy’s President Sergio the reappearance of Russian shoppers. and Giovanni Mannucci, respectively. In Mattarella appointed former Foreign Minis- According to Focus-Economics.com, February, Bottega Veneta, under new ceo ter Paolo Gentiloni as new prime minister in 2017 “Italy’s economic growth should Claus-Dietrich Lahrs, and Gucci will each following Renzi’s resignation. Renzi had broadly mirror this year’s subdued per- show their first co-ed shows. The Roberto been promoting a referendum to vote on formance, as stronger growth in exports Cavalli company is in the midst of a reorga- a change in the country’s constitution, is expected to offset weaker domestic nization helmed by ceo Gian Giacomo Fer- which he claimed would streamline Italy’s demand. Nevertheless, Italy remains raris, which has led Peter Dundas to exit the government decisions. Renzi, who had exposed to both internal and external brand as creative director. Francesco Risso vowed to step down if he lost the referen- risks: a worsening in the conditions of will show his first presentation for Marni in dum, took full responsibility for the defeat. the banking sector and a weaker global January after Consuelo Castiglioni’s exit. Opposition parties have been lamenting environment represent the main downside In Italy, political uncertainty has been the fact that Gentiloni is entirely aligned risks to growth.” Analysts, the site said, avoided for now following the defeat of with Renzi and that his government mir- expect the Italian economy to expand 0.8 Prime Minister Matteo Renzi’s referendum rors that of his predecessor and are clam- percent in 2017. and subsequent resignation, but the coun- Paolo Gentiloni oring for new elections. These, however, Financial instability continues to hit the try is grappling with a banking crisis and will depend on a new electoral law that is Italian banking sector. The Italian state is government debt of $2.48 trillion, accord- from 11.7 percent in the previous month. being drawn up and needs to be approved rescuing storied bank Monte dei Paschi ing to Italian government data, as well as However, the economy shed 30,000 jobs by parliament. In the meantime, Rome’s di Siena through a bailout package of 20 an ongoing high tax burden and a slow and 82,000 more people left the labor administration under beleaguered mayor billion euros, or $20.9 billion at current judicial system, just as interventions on the force, according to Tradingeconomics.com. Virginia Raggi continues to be plagued by exchange. issue of migrants arriving in and passing Consumer confidence has been under scandals and the mayor of Milan, Giuseppe According to revised data released by through Italy continue to be a priority. pressure throughout the year, and, in Sala, has returned to work after temporar- the National Statistical Institute, Italian con- The unemployment rate in Italy December, Raj Badiani, senior Italian ily suspending himself from office as his sumer prices fell 0.1 percent from the pre- decreased to 11.6 percent in October 2016 economist at IHS Global Insight, said in role as the commissioner of the Milan Expo vious month in November. — Luisa Zargani

● Brexit: which produces its higher-end bags and accessories at two factories in Somerset, Reality Starts to Bite England, still has to source raw materials and components from outside the U.K. LONDON — Britain is buckling up for one and operate overseas subsidiaries. In wild ride this year, with the Brexit pro- December, the company said it's expecting cess expected to begin by the end of the some 1 million pounds, or $1.3 million, in March and economic growth set to slow additional costs linked to currency in the to 1 percent, compared with 2 percent in 2016-17 fiscal year. 2016. Inflation will accelerate due to the The weaker pound has also been having pound's collapse in 2016 against the dollar a big impact on Burberry in its year of and euro, although household incomes are cost-cutting and restrategizing. Burberry, unlikely to rise. too, has wrestled with higher input costs The weak pound — a boon for foreign (most of what it sells is not made or sourced shoppers, a headache for British manufac- Burberry in the U.K.) and hiked some of its prices to turers and retailers — is likely to claw back compensate for the weaker pound. some ground against the dollar by late next with openings set to mushroom across the Selfridges, meanwhile, is in the midst The currency has been driving tourist year. The big banks, meanwhile, expect capital in the coming months and property of a 300 million pound, or $368 million, purchases at its U.K. stores and will boost consumption — and investment — to slow developers thinking like the former Bank of facelift: The store is looking to build the the company's bottom line in the 2016-17 as Prime Minister Theresa May's govern- England governor: Crisis spells opportunity. world's largest accessories hall by 2018, a fiscal year. Retail-wholesale profit is set to ment begins negotiations to extract Britain Developers such as The Crown Estate, 60,000-square-foot affair that will take up get a 125 million pound, or $155 million, from the European Union — on the best Tribeca Holdings and Capco are continuing a third of its ground floor space on Oxford boost based on Oct. 31 exchange rates in trading terms possible. to bankroll the retail revival of neighbor- Street. Those millions have also gone the full year. The year will be defined by Brexit and hoods including Regent Street; St. James's; into an unprecedented number of new The pound aside, there are more Burb- will undoubtedly be filled with angst — Spitalfields, and Covent Garden, which are openings on the upstairs floors, including erry changes in the pipeline. Chief creative political bickering and backstabbing are now brimming with designer, contempo- the Body and Designer studios and a new officer and ceo Christopher Bailey has already rife — but there are those who rary, beauty and accessories stores. contemporary space. said layoffs are “embedded in the plan,” believe the country can pave a yellow brick In the first quarter of 2017, Tory Burch "It's hard to say that any city can com- although he has not elaborated on the road out of Europe. and Lululemon will both open flagships on pete with London right now," said Avery number — or timing — of job losses linked "I think the challenges we face mean it's Regent Street, the latest in a legion of big Brooker, cofounder and chief executive to the company's new strategy. not a bed of roses, no one should pretend North American brands, such as Coach, officer of Enflux, a London-based company By July, Burberry will also welcome a that, but equally it is not the end of the Stuart Weitzman, and Polo Ralph Lauren, that monitors consumer data and behavior. new ceo in Marco Gobbetti, a luxury busi- world and there are some real opportu- to plant their flags on the central London "There's a New York pace to the openings — ness veteran who's currently serving as ceo nities that arise from the fact of Brexit we thoroughfare. Ralph Lauren will also cut they're relentless." of Céline. He is set to tackle the mechanics might take," former Bank of England gov- the ribbon on a new cafe and bar concept Brooker said the first quarter will likely of the business and fuel retail sales in an ernor Mervyn King told the BBC in a recent next door to the Polo flagship. remain strong with regard to footfall and ever-competitive luxury environment. radio interview. Tory Burch will take up 3,200 square sales, thanks to the weakness of the pound, Bailey will continue as head of creative and "Being out of what is a pretty unsuccess- feet of retail space over two floors, and which has fallen 20 percent against the take on the new title of president. ful European Union — particularly in the the store will carry the full collection, dollar since the Brexit referendum in June. Bailey outlined an austerity plan in May economic sense — gives us opportunities including beauty, home and watches. The From a British brand perspective, the aimed at saving 100 million pounds, or as well as obviously great political difficul- letting is part of a 1 billion pound, or $1.23 weaker pound will continue to bring mixed $124 million, by 2019. Burberry has said its ties," he added. billion, investment by The Crown Estate blessings in the New Year. overarching plan is to outstrip luxury mar- Brexit anxiety, however, has done little to into retail, offices, and leisure businesses Tourist spending at Mulberry's U.K. ket growth, which is projected to be 2 to 3

dampen the retail momentum in London, on and around Regent Street. stores has been robust but the brand, percent in coming years. ­— Samantha Conti AN L/ R EX/Shutterstock Gillard/ Burberry by A rmando Dadi/ R EX/Shutterstock; by Gentiloni photograph january 3, 2017 11

Forecast 2017

● Challenges Remain chains. Much of that change has to do Tax cuts, if they happen, with the growing Millennial consumer could boost consumer For Retailers base, Frieze said. spending. A potential Black Swan event could Expect the same old, same old — at least be what policies get implemented under for the early part of this year. President-elect Trump’s administration. That’s the general consensus on Wall “Barring some international crisis, we’ll Street — while the new administration tran- have to see about the changes in policy sitions into power — as it awaits signs on that he talks about. There may be some what direction the Trump administration benefits, but also some costs. Who knows will take on economic policy. There is an what he wants to do and what he can get expectation that fiscal growth stimulus will done domestically,” Frieze said, noting kick in later in the year, but to what extent that “President-elect Trump will likely remains unclear. have more influence outside than inside Ethan Harris, head of global economics the country, given our checks and balances at Bank of America Merrill Lynch, said in system [of government].” the short run, he expects more deregula- While the retail and apparel sectors tion and tax cuts. The firm’s head of U.S. are struggling more than they have in the economics, Michelle Meyer, has projected past, Frieze did see some potential benefit first quarter GDP at 1.5 percent growth, for consumers, and in turn possibly more while its head of U.S. equity and quantita- spending on apparel, should there be a tive strategy, Savita Subramanian, said one corporate tax cut. “That could create addi- sector that would benefit from corporate tional disposable income, but how much of tax cuts is consumer discretionary, which that will flow into the general population’s includes retail. pocketbook is the question. We’ll have Brien Rowe, an investment banker at to see what he actually can get through,” D.A. Davidson Cos., expects a “very busy Frieze said. first quarter” on the mergers and acquisi- Jeffrey Edelman, former retail analyst tions front for consumer brands, although and now director of retail and consumer not all deals necessarily would be fash- products advisory services for RSM, ion-related nor would they be completed expects to see more online firms building during the first quarter. “When you look their own stores to have a brand presence at the credit markets, rates have risen a in the physical world. And while he sees quarter of a point and debt is very plentiful traditional retailers continuing to invest — still very cheap compared with historical in technology, he said most “still don’t levels,” the investment banker said. know what the return on the investment Heading into 2017, high on that list could is going to be except that they know if be the future of Kate Spade & Co., which they don’t invest [in technology] they will has seen pressure from an activist inves- lose out…. Selling online is not the golden tor to sell itself. Last week shares of Kate goose everyone thought it would be. They spiked up on news that it was already in may be gaining market share, but they are discussions with an investment banker to losing on profitability. The only way to identify possible buyers. counter this is to have unique merchan- For now, M & A activity is expected to dise that’s not available down the street. surpass initial public offerings activity. IPO The way of the future for retailers will be research and tracking firm Renaissance having brands that are exclusives.” Retailers on Ratings Agencies' Watch List Capital said 2017 could mark the end to Bill Lewis, senior vice president of the U.S. IPO recession that began in August consumer products, retail and distri- 2015 through 2016. While tech-related bution for Capgemini Consulting, said Retailer Reason firms are expected to comprise the mega mall operators will continue to focus on IPO filings, three industry names to keep how to reinvent the mall concept. Some an eye on for 2017 are Canada Goose, developments, such as Brookfield Place, Bon-Ton Stores Declining same-store sales and operating brand management firm Authentic Brands Runyon Group’s Platform in Culver City margins hurt ability to invest in technology Group and J. Jill. and the redevelopment of Hudson Yards, and real estate. Joseph Nemia, head of asset-based are examples. Those developments will lending at TD Bank, said whether the Fed continue as companies see that the “cura- moves to raise rates two or three times tion of stores is what drives interest” to High-yield bonds; difficult mall traffic trends, Claire’s Stores next year will “depend on the velocity of the malls. and economic headwinds in Europe. the economy, and whether it is growing One area that probably won’t change faster than they wanted it to.” The lending much going into 2017 is the distressed side environment has been fairly steady for the of retail, and which retailers could con- Leveraged debt structure; J. Crew last 12 months, and according to Nemia, tinue to face financial pressures. increased competition from fast fashion that is expected to continue in 2017. Ratings agencies Fitch and Moody’s With a new Republican president in have often noted the publicly traded firms office, Joseph Nastri, Capital One’s market Sears Holdings Corp. and Bon-Ton Stores High-yield bonds; institutional term loans; executive for the Metro New York region, Inc. Among the privately held firms, most is hoping that federal regulations will mod- owned by financial sponsors, Claire’s Sears Holdings cash-burn rate; lack of clear catalyst for erate, noting that current regulations have Stores, Nine West and Rue 21 are on the profit improvement “definitely make it more difficult for small- watch list. J. Crew, on Moody’s list, is in and midsize businesses to get capital.… discussions to restructure its debt. And Banks want to lend [and] will loosen up the struggling apparel chain Limited Stores, High-yield bonds; institutional term reigns a bit” if there are fewer restrictions. owned by Sun Capital Partners, has been Nine West loans; fashion miscues, Ken Frieze, chief executive officer at said to be moving closer to a bankruptcy and poor trends in women’s denim. Gordon Brothers, a financial services firm filing, or even a liquidation if a buyer can’t that’s better know for its legacy business be found. in asset dispositions, expects to see more And finally, one certainty heading into 99 Cents High-yield bonds; institutional term loans announcements of store closings, given 2017 is that all eyes will be on the Dow the typical seasonality early in the year Jones Industrial Average hitting 20,000. when retailers assess their locations plus There was hope during the rally following Rue 21 High-yield bonds; institutional term loans the added pressure from the consumer the U.S. presidential election that Dow shift to online from offline. He expects 20,000 would occur before the end of value retailers such as off-pricers and 2016, but that faded last week when on True Religion Institutional term loans; adverse denim trends discounters to continue to do well, com- Wednesday the Dow shed 111 points, and pared with traditional retailers such as then slipped more on Friday to close out

Photograph by Shutterstock/View A part Shutterstock/View by Photograph department stores and specialty apparel the year at 19,762. — Vicki M. Young ** Data from Fitch Ratings and Moody’s Investors Service 12 january 3, 2017

Forecast 2017

● Beauty M&A Victoria Beckham’s participants that means acquisitions of limited-edition color cosmetics brands that don't overlap too heavily with To Stay Hot collection with Estée Lauder. In the Market anything they already own, while digest- Companies that may sell or seek ing the myriad of businesses they added For the global beauty industry, the year investment in 2017: over the past couple of years. For the PE ahead promises the continued rise of indie Cover FX shops, it means beating the strategic play- brands and perpetuation of competitive Devacurl ers and investing with hopes that in three and reactive acquisition sprees from major Dr. Brandt years, conditions will have remained the players. Barring financial market distur- Drunk Elephant same or improved and they can sell off bance, trends for 2017 are expected to Josie Maran at a five-times-plus multiple. Prices for simply be an evolution of those from 2016 Mineral Fusion companies will remain high in 2017. — where the big players enveloped smaller, MyChelle Social media will continue to propel growing companies in hopes of benefitting Nest indie brands into hot takeover targets. from their expansion and innovation. Perricone MD Hundreds of thousands, or even millions, L’Oréal paying a 6.1 times multiple to of followers are liking, commenting buy It Cosmetics for $1.2 billion and Estée and sharing their favorite products and Lauder paying a 5.5 times multiple to Garnier utilizes hyaluronic acid. making previously unknown brands into purchase Too Faced for $1.45 billion are In prestige, this could be the year that household names. prime examples of corporations’ thirst for Victoria Beckham's limited-edition color “For 2017, we’re going to see more indie burgeoning brands. And while acquisi- collection for Estée Lauder becomes brands hit the market and get funded,” said tions are expected to roll in throughout permanent. On the ingredient front, Martin Okner, managing director at SHM the new year, the focus is expected to Korea remains to beauty what Silicon Corporate Navigators. Venture capitalists diversify away from makeup, highlighted Valley is to the tech world, producing already displayed their interest in the by deals like Unilever’s planned purchase goods with higher concentrations of star beauty category in 2016 with investments of hair-care brand Living Proof. ingredients. The beauty retail specialty in Glossier, Memebox and Goddess Garden. Makeup (and selfies) will still be in consumer is not just looking for one stores — including Sephora, Ulta Beauty, “More brands that have a multicultural vogue— but as the youngsters driving option.” Bluemercury, Cos Bar and Space NK — angle to them will hit the market and growth realize their makeup-heavy routines In 2016, the mass skin-care category will continue to grab market share from achieve success through social influenc- have taken a toll on their pores, the skin- quietly gained traction as the pressure of mass-market chains and department ers,” Okner added. care category could show signs of life. And competition galvanized legacy brands to stores. Specialized beauty "bars" oper- Those beauty influencers are indeed the mass market might just one-up prestige churn out prestige-inspired innovation, ating on the DryBar model will prolifer- kingmakers, proving that social media — NPD Global beauty industry analyst such as the Pure Clay Masks from L’Oréal ate, becoming more and more part of sells product. Upending the traditional Karen Grant divulged to WWD that mass Paris, Garnier SkinActive Micellar Water customers' daily routines and expanding notions of advertising, this group is skin-care was on track to surpass prestige and Neutrogena’s Light Therapy Acne to major U.S. cities beyond New York and responsible for a shift in marketing dollars skin-care in sales gains for the year. Mask. The newness will continue in 2017 as Los Angeles. from some of the leading global brands. “The momentum around mass right legacy brands unleash more upscale-lean- Behind much of the beauty boom is a That, and they are becoming brands in now, especially in facial — which is its ing product innovations. Inspired by the younger consumer who is simply using and of themselves, with some names biggest category — is huge,” said Grant. success of SK-II in the U.S., Olay is releasing more products. That anticipated contin- launching their beauty lines and products The key is shifting focus away from its Regenerist and Luminous Miracle Boost ued growth means that the sector giants, at retail. Influencers proved they can antiaging and towards overall skin health. Concentrates, and Garnier is launching a and even the private equity firms that sell — and surely momentum in this space “It’s a question of evolving the offering line of sheet masks. Ingredients at mass can swoop in ahead of the major players, will only yield bigger deals for this group and the messaging,” said Grant. “It’s not will become more sophisticated, as L’Oréal are going to keep pouring their dollars going forward. — Allison Collins, so mono-focused [on antiaging]. The Paris launches a clay range for hair and into beauty companies. For the bigger Rachel Strugatz and Ellen Thomas

● Media Consolidation Media cannot live But it was also survival of the fittest in all, media cannot live by ads alone. by ads alone. the digital world. Mode Media, which was Meanwhile, the role of the third-party Expected to Continue once valued at $1 billion, shuttered in Sep- platform came under fire as these new tember, sounding alarm bells that perhaps media companies facilitated the dissemina- Last year could be called the year of con- those sky-high valuations were overblown. tion of fake news, which emerged as a key solidation as technology’s disruption of the In order to cultivate his brands, Group Nine topic in the presidential election and the media industry continued across print and chief executive officer Ben Lerer inked a dawn of the “post-truth” era. The danger digital publishers alike. Companies contin- $100 million deal with Discovery Commu- of permitting the Facebooks, Googles and ued shifting their gaze to video, live events, nications this year. Twitters of this world to be a touch point branded content and e-commerce in order storyline that will be one to watch in 2017. “I think there’s going to be a meaningful for news — both fake and real — without to grow new streams of revenue. Condé Nast, which will unveil a new cor- consolidation in the media space,” Lerer regulation was, arguably, the biggest media Meanwhile, publishers tried to gain porate structure in the new year, reduced told WWD, citing similar “roll-ups” in story in 2016 — and will continue to be an footing as advertising in print continu- the frequency of Teen Vogue to a quarterly, media such as Univision’s buying spree of issue in 2017. ously shrank. and said it would consolidate creative direc- Gawker Media, The Onion, The Root and Once the purview of supermarket tab- “The print drop has been astounding in tors, copy teams and researchers across the remaining stake of Fusion, or Hearst loids, fraudulent, sensationalized stories the third quarter,” said media analyst Ken its stable of titles. Hearst followed suit, in and Verizon’s acquisition of Complex are more believable in an environment Doctor. “The fourth quarter, I hear isn’t a a way, lowering the frequency of its teen Media, among others. where readers are less likely to differentiate whole lot better…much of the print world glossy Seventeen to six times a year and qui- Weighed down by hefty costs, Univision news sources and were given greater reach is anticipating a 10 percent drop in print etly consolidating editors of Cosmopolitan, cut about 250 jobs, with the majority thanks to social media algorithms that prize eznikov advertising in 2017. So if you connect the Redbook, Good Housekeeping and Woman’s coming from Fusion, which had been a engagement over content. But, during the ulia R dots of print continuing to nosedive, there Day under the lifestyle group. More job money-losing venture since it launched election, Facebook was a petri dish for fake will be more buyouts and more layoffs" in consolidations are said to be on the way at in 2013. With its eye on going public, stories by sites that positioned themselves the coming year. all the magazine publishers, as many in the Univision will need to integrate Gizmodo as real news organizations. After a con- That process already started in 2016, industry wonder if the publishers are cutting Group, the former Gawker properties, tinuing outcry, the firm announced some as Time Inc., Hearst, Condé Nast and too much, and forfeiting the quality of their according to Doctor, who cited affiliate stopgaps that would at least alert users Meredith Corp. endured layoffs, structural print products to evolve their digital busi- commerce opportunities. when they share stories that are demon- reorganization, circulation reduction and, nesses. Other magazine closures last year Aside from native advertising, which is strably untrue. in some cases, shuttered magazines. Mere- included Complex, Bloomberg Pursuits, expected to become a $59 billion global But as with so many terms, “fake news” dith closed More magazine at the beginning Mental Floss, Fitness Magazine and a group industry by 2018, according to data firm has become a catchall employed by the of the year, and Condé Nast ended its year of travel magazines at Bonnier. Adyoulike, media companies have begun left and the right on the political spectrum by folding Self. Meanwhile, Time Inc. rejig- Buyouts were doled out at The New York looking at commerce again. Towards to slam stories that they felt were biased gered its c-suite under new chief executive Times and The Wall Street Journal, as both the end of 2016, The New York Times or contained errors. In 2017, the term will officer Rich Battista by reconfiguring its publishers reallocated their resources, made a big push into commerce when continue to be a way to call out unfavorable business side with publishers selling across placing less of an emphasis on lifestyle cov- the company snapped up Wirecutter and coverage and is likely to gain even more categories, such as beauty and autos, erage and more on audience development, The Sweethome, and New York Magazine currency as a rhetorical staple of the politi- instead of for a particular magazine. The emerging technologies, such as virtual launched The Strategist for product rec- cally divided country. company's renovation comes at a time reality and, in the case of The Journal, ommendations. In 2017, the trend is widely — Alexandra Steigrad with contributions

when there's buzz it may be up for sale — a financial coverage. expected to continue and expand — after from Kara Bloomgarden-Smoke Y Shutterstock/ by Thomas Iannaccone; magazines by photograph Cosmetics january 3, 2017 13

Forecast 2017

● The Tech Frontier: Consumers opened up to the diversified. “Consumers crave omnichannel idea of virtual reality shopping experiences with little resistance More ‘Human’ and headsets in 2016. Tech Trends across the digital and physical,” said Doug Baldasare, founder and chief executive Right Now At a Glance officer of in-store charging station provider In 2017, expect technology to cater to • Chatbots and conversational ChargeItSpot. He predicts that the option to — and imitate — humans, as robots get commerce on messaging platforms buy online and pick up in-store will flour- smarter and customers expect personal- • Commercialization of augmented ish, and that retailers will follow the lead ized, on-demand service. and virtual reality of Amazon Go with self-service kiosks and The past year was one for retailers to • On-demand deliveries by autono- other streamlined checkout options. In the kick the tires of emerging tech such as mous drone and driverless cars short-term, however, he said that fragmen- chatbots, virtual and augmented reality, • New methods of payment — mobile tation in the mobile payment landscape mobile payments and drone deliveries; and otherwise will hinder the speed of adoption. “Banks, 2017 promises more implementation and, • Contextual commerce on social retailers and credit card companies are hopefully, monetization. sites and in e-mail all trying to control the mobile payment “This year will be about how to generate • Live video streaming on social experience,” Baldasare said. a return on tech investments — not creating media Finally, 2017 might be the year in which them, but understanding them,” said • Self-service kiosks and the death of contextual commerce, which means selling Kimiko Thornton, who as senior director target advertising accordingly. She also sees the cash register at the point of inspiration on platforms of innovation at Westfield’s Bespoke, works it allowing brands to facilitate a community • Initial public offerings such as Pinterest and Twitter, might finally with retail-tech start-ups in San Francisco. network among customers. from Snap and Pinterest take off. Thornton foresees fashion companies This is especially important when the Brian Marvin, chief operating officer increasingly behaving like tech firms with customer’s inspiration moment takes place and cofounder of contextual commerce rapid prototyping and live testing (often at home, said Lisa Bougie, who is chief said that tech such as chatbots that use platform Bringhub, highlighted media in the form of a pop-up store). Pop-ups at merchandising officer at Stitch Fix, which, artificial intelligence will enable brands to outlets such as NBC Today and Buzzfeed Bespoke, for example, saw a 400 percent like RocksBox, shares its data with retail deliver customer service, rather than just that have connected editorial content to sales jump online after opening a physical vendors and has developed in-house brands transactions, to build loyalty. “AI and chat- commerce, and Facebook’s partnership location in Westfield San Francisco Centre, based off of in-depth customer feedback. bots so far have just scratched the surface,” with Shopify, which gives users access to the home base of Bespoke. Rati Sahi Levesque, who is chief mer- he said. “They should know what you buy product catalogues and purchases within Similarly, RocksBox founder and chief chant at The Real Real, said that Facebook and add on to that. I think we’ll see deeper Facebook Messenger. “In 2017, traditional executive officer Meaghan Rose said that data increasingly allows personalization things that build brand affinity.” digital marketing will begin to merge more retailers will increasingly act like tech com- and targeting of advertising, and that the He is also predicting autonomous deliv- drastically with commerce, creating the panies like Google in that they will acquire company, like many e-commerce pure- eries from companies such as Uber and opportunity for marketers to merchandise other firms to stay relevant while focusing plays, will increasingly experiment with Amazon, which has begun testing drone their products at the moment of discovery. on the core business. She has found that physical retail offerings. deliveries in the U.K. “The biggest cost of As publishers, retailers and brands continue tech, and data, are evolving in a way that On the personalization front, Robin on-demand delivery is human capital,” to invest more in contextual commerce, allows businesses to truly listen to what the Chan, cofounder and chief operating offi- Chan said. marketers will see an uptick in return on customer wants, and to personalize and cer of “Uber for fashion” service Operator, The purchase path has become more investment,” he said. — Maghan McDowell

● Men’s Wear Still Hot Sneaker Release: Getting Its Kicks Raf Simons x Adidas Blame it on the sneaker. Ozweego 2 The ubiquitous, comfortable, and oh-so- trendy choice of footwear has created a sea change in men’s wear. Many guys today think nothing of wearing their Nike Air Jordans, Under Armour Curry 3s or Adidas Climacools for all occasions. And it’s not just sneakerheads — men from all walks of life have embraced the footwear model. It’s not unusual for retailers to hold raffles or pass out wristbands to customers seeking the latest hot models. There are Adidas and Raf Simons have teamed even Sneaker Cons in cities around the up again on a collection of sneakers country as well as a National Sneaker Day — for spring and the new off-white color- it was Nov. 5 in 2016. way for the popular Ozweego 2 style, This sneaker mania has carried over to Tim Coppens x Under Armour’s which typically retails for around the designer market as well, where luxury fall ready-to-wear show. $430, is one of the most anticipated labels such as Saint Laurent, Prada, Gucci, releases for the year. Bally, Alexander McQueen and Fendi have the movement “active lifestyle” and said and Pharrell Williams. Its association with introduced their unique iterations — Gucci the store is “building a zone of business” Kanye West the Yeezy collection will be emblazoned a Tian print onto glittery fab- around the trend. At Saks, this encom- expanded — presumably this year — with example, Barneys New York initially opted ric and stuck a price tag of $650 on its low- passes everything from the urban version the launch of the Adidas + Kanye West line, to not sell tailored clothing at its New York top model, while Prada’s platform wingtip of activewear from Y-3, EFM and J.Linde- which it has called “the most significant downtown store, but in October it picked leather sneakers retail for $980. berg to the tailored casualwear offerings partnership ever created between a non- up P. Johnson Tailors’ ready-to-wear and But the impact of the sneaker is also from more conservative brands such as athlete and an athletic brand.” Of course, made-to-measure collections. The Austra- being felt above the feet as streetwear-in- Brunello Cucinelli and Ralph Lauren. West’s recent hospitalization and his lian tailored clothing brand, which was spired brands such as Off-White, Hood With athletic references as a backdrop, much-maligned spring show could delay founded by Patrick Johnson, is known for by Air and Vetements take the fashion the big sports brands want a piece of the the launch. its comfortable, lightweight suits that are industry by storm. Their distinct aesthetic action as well. Nike, through its fash- Surprisingly, the focus on the sneaker, made for travel. And in September Berluti — Demna Gvasalia of Vetements showed ion-skewed NikeLab initiative, offered ath-leisure, active and streetwear cate- tapped the romantic designer Haider Ack- billowing suit jackets alongside high-end merchandise last year from everyone from gories hasn’t impacted sales of tailored ermann as its new creative director — his white joggers and Reebok track jackets on Givenchy designer Riccardo Tisci and clothes in the U.S. According to The NPD first collection for the brand will make its the runway for spring — has spilled over to Balmain’s Olivier Rousteing to Undercov- Group, men’s tailored clothing dollar debut this month. Antoine Arnault, chief the more traditional market. Established er’s Jun Takahashi and Kim Jones. Under sales increased in the 12 months ending executive officer of Berluti, told WWD, “All brands, many of which built their fortunes Armour brought Tim Coppens into the fold November and accounted for 8 percent categories — whether it’s T-shirts, or sweat- on tailored clothing, are scurrying to to design its UAS contemporary sportswear of total U.S. men’s apparel sales for the ers — everything casual is overperforming respond to this ath-leisure trend. collection, and Adidas has long-standing period. This could indicate that tailored the sartorial right now. Casual is king.” Eric Jennings, vice president and men’s relationships with Yohji Yamamoto for men’s wear brands are making strides by — Jean E. Palmieri with contributions

rmour by George Chinsee George U nder A rmour by Moilanen/ R EX/Shutterstock; Vesa by photograph Virtual reality fashion director at Saks Fifth Avenue, calls Y-3 Sport, Jeremy Scott, Alexander Wang adapting to the current marketplace. For from Aria Hughes 14 january 3, 2017

Forecast 2017

● How Will Shoes, Bags and Jewelry Take Shape? What's in store for accessories in the new year? It would appear that the category, starting with the spring season — which is now shipping into stores — is primed for reinvigorated interest. A slip in sales has motivated brands, which had long relied on their basic shapes — reissuing them each season in new colors and fabrications — to reevaluate their offerings, and introduce new styles. Labels including Proenza Schouler, Thom Browne and Valentino have invested resources in redefining their core accessory lines. Designers are beginning to rethink the mold, and promote a sense of individualism through their accessories offerings. Bags from Balenciaga to Loewe are offered in a gamut of sizes, shapes and embellishments. Bags constructed of luxe fabrics — like heavy-gauge nylon and durable satins — appear to be growing in popularity, for both their newness and friendlier price points. Candy-colored sacks by Loewe, elegant clutches from The Row and fun handheld options by Trademark exemplify the new fabric trend. Footwear in particular is understood to be a particularly diversified category — with no true shape or silhouette currently deemed an “it” style. Rather, it would appear designers have issued a phalanx of stilettos, flats, and mid-heel styles in an effort to capture shoppers at each stage of their day. “There is something for everyone out there right now,” said of the shoe market. The Casa Loewe For jewelry, the “demi-fine” category of store in Madrid, Spain. delicate rings, necklaces and threadbare bracelets does not show any signs of slow- “Things that feel very basic and core are This said, Millennials’ disaffection for big ing. The introductory price point has been businesses and their perceived markups massively successful at department stores things I think people already have in their closet. could continue to disrupt business as usual. like Neiman Marcus. Its success prompted New, targeted brands including Everlane, Net-a-porter to give it its own landing page That’s where the business can be in trouble.” Pop & Suki and Outdoor Voices — which aim last year. — Linda Fargo to promote transparency, friendlier pricing Costume jewelry, too — shown on the and design integrity — have found suc- runways of Givenchy, J.W. Anderson and cess. Instagram-native labels like Maryam Saint Laurent — will continue to grind Nassir Zadeh, Simon Miller and Mansur back into favor. Artful statement earrings long relied on Wayfarer shapes. As seen on the ‘experience’ of brick-and-mortar retail, Gavriel have found fame and cachet on and large necklaces crafted of resins and New York and Paris’ streets in the last quar- buyers have waged their bets on extraor- social media, further diverting Millennials’ non-precious metals were purchased by ter of 2016, aviator optical frames — made dinary, emotional designs for the coming affections from traditional heritage labels. department stores and specialty shops. both of plastic and metal — appear to be the seasons. “I think that it’s these strike-an- With income rates for the Millennial age In the eyewear sector, novelty is also silhouette du jour, also thanks to Michele. emotion, I love it and have to have it items group somewhat stagnated, the cohort reigning supreme. Glasses are a key runway The one accessories category that is that are moving the needle will continue to has developed a growing appreciation for statement of Alessandro Michele’s success- perhaps vulnerable is basics — particularly move the needle,” said Bergdorf Goodman vintage and resale sites including The Real ful Gucci vision, and his oversize, bejeweled given the shop-your-closet mood in the U.S. ‎senior vice president fashion and store Real — where discounted prices have shed sentiment has caught on across the category. and the Chinese market’s maturation (where presentation Linda Fargo. “Things that feel a light on the true value of luxury. This Brightly colored lenses and frames, metal shoppers, too, are understood to have very basic and core are things I think people considered, brands may need to reevaluate fabrications and outlandish shapes will their own fill of basic items). In an effort to already have in their closet. That’s where the their models of business — not only in 2017, continue to revive the category — which had capture shoppers in the moment, and aid in business can be in trouble.” but in years to come. — Misty White Sidell The Ballet Flat Rises as Sneaker Fatigue Grows While still booming in men’s wane,” offered Net-A-Porter’s through all price points – starting at Isabella Boylston to appear wear, the athletic trainer — which retail fashion director Lisa Aiken. Chanel’s iconic flat and permeat- in promotional videos for the the fashion elite, as of late, have So how will style-hawkers ing footwear’s ranks all the way to collection. The $550 ‘Tobaly’ style paired with everything from now choose to carelessly roam Payless pleather. comes in a candied array of col- Adidas track pants to Chanel around town? It would appear The flat’s latest incarnation is a ors, and are “animated, fun and Couture — may be on the down- that in light of sneaker fatigue, bit edgier and less straightforward whimsical,” said Saks senior vice turn in women’s. the ballet flat is returning as the – embellished with grommets, president and fashion director Athleticism appears to be flat du jour. ankle ribbons and spikes at Miu Roopal Patel. declining in favor industrywide. The feminine style last rose to Miu, Celine and Valentino. Ballet Miu Miu’s velvet The ballet flat mood is avail- “I would say there is definitely a acclaim in the mid-Aughts, as a flats are also offered by The Row, embellished ballerina flat. able in lower price points as well, general shift, particularly in the girlish counter to the Paris Hil- Aquazurra, and United Arrows’ in- with Randy Ochart, the owner of shoe world, away from the more ton-era’s flashy inclinations for skin house line, among others. Barneys with Manolo Blahnik on an ex- French Sole — famous for its $140 casual mood that has dominated brandishing and spray tans. In the New York’s web site has a specific clusive run of ballet flats by the flats — reporting a 41 percent in recent seasons. The ubiquity nascent days of high-street fash- section dedicated to the style. designer, and enlisted American increase in sales year-over-year. of the sneaker is starting to ion, the style quickly proliferated Saks Fifth Avenue has teamed Ballet Theatre principal dancer — M.w.s. Casa Loewe photograph by Matti Hillig; Miu Miu by Thomas Iannaccone Matti Hillig; Miu by by photograph Casa Loewe january 3, 2017 15

Forecast 2017 Will the Swans Soar Under Trump? The president-elect is lauded as a swamp-draining change-agent hurtling toward Washington — but how will his presidency affect society?

Get ready for President Reality staying behind in New York to care first Mrs. Trump was at his debut Star — and all the glitz and glam for young Barron, I.T. is poised to show. He feels that the women that moniker suggests. Where become the social bee of D.C. She in the family will bring a unique President Reagan was very much and her husband, Jared Kushner, brand of glamour to the White the era of the presidency and the are reportedly house-hunting House. “I think that all of the Hollywood actor, Trump is poised in the capital's glitziest neigh- Trump women are very pretty, to be the champion of the reality borhoods, and looking for an they have beautiful figures, and star — none more so than himself. Orthodox synagogue to attend. they wear clothes very well,” Bas- Meetings with Kanye West, As their political appointments so says. “I think there will clearly Anna Wintour, Ray Lewis and remain unsolved, their transition be a fashion addition — there Jim Brown have detracted from to Washington’s social scene — is Mrs. Melania Trump, there’s scandals and policy developing, what there is left of it, after eight Ivanka Trump, and then there and his penchant for social years of being ignored by the are the two daughters-in-law, all media rivals the most prolific of Obamas — seems certain. Will very attractive, and Tiffany, the teens. Until it was canceled fol- they bring a new kind of glitz to the other daughter.…I think it’s going lowing backlash, the auctioning White House? to be the first time that we’re ever off of a coffee date with Ivanka, The president-elect, a onetime going to see so many young, very and a hunting expedition with Eric front-row fixture at New York attractive, glamorous women and Donald Jr. were the latest in Fashion Week, will likely have to sit coming out of that White House.” a string of headline-drawing ap- out collections, but Melania and It’s Basso’s opinion, the Gucci peals to the high-minded’s desire Ivanka are sure to be the most and Balmain-loving Melania will to get a word in with the Trump eagerly sought-after social "get" opt to incorporate some American family — and none are viewed as in town. Similarly, while Trump is brands into her wardrobe — after powerfully as I.T. expected to continue frequent- all, she did wear Ralph Lauren “Republican administrations ing stodgy favorites like 21 Club on the campaign trail, which she Get ready for President Reality tend to place a little more em- and Jean-Georges in the Trump bought at the designer’s Madison Star — and all the glitz and glam phasis on society and their role International Hotel & Tower New avenue store. “I think she’ll be very that moniker suggests. in helping philanthropy and our York, I.T. and Jared might follow in aware of the different designs, but country, and that’s a good thing,” the Obamas’ footsteps in trying she’ll also be very happy to wear to wearing her namesake goods they became politically involved, Beach charity circuit ways to New York socialite and philan- out New York’s hottest restaurant American designers as well. I think though, following controversy over I believe they still will be friendly D.C.’s prim entertaining scene. The thropist Jean Shafiroff says. openings: the pair were seen she’ll wear American,” Basso pre- the attempt to promote sales of a with those same people” — and former society writer will no doubt “Now with the new president dining at new Williamsburg eatery dicts. I.T. will “wear her own brand, bracelet she wore in a family “60 his cabinet picks seem to be swan with I.T. and Jared, as will coming in, Donald Trump, maybe Lilia before the holidays. but I think she also will venture out Minutes” interview. narrowing that list down. Cindy Adams, longtime New York his children will be the rebirth of a Dennis Basso, designer to possibly and wear things from So just who are the Trumps For one, there’s Hilary Geary Post gossip columnist and a close new society.” the uptown fur-loving social elite, other designers that she likes and expected to be friendly with? Ross, wife of Trump’s pick for friend to Trump. And just what shape will this has been dressing the Trump that she’s friendly with.” She’ll need Basso believes “who they were commerce secretary Wilbur Ross, Let the invitations fly. new society take? With Melania family since the Ivana days — the to tread carefully when it comes involved with socially before who is expected to bring her Palm — Leigh Nordstrom

The Inauguration, Parties, Restaurants and Actors

Parties Rei Kawakubo’s oeuvre at this can visit almost every day for inated screenwriter behind Don’t get too used to your year’s Met Ball, dedicated to delicious, wholesome food “What’s Eating Gilbert Grape” cashmere socks and “West Comme des Garçons? and warm hospitality,” Guida- and “About a Boy” has been Wing” reruns — the hibernation ra and Humm said. “Some- gaining momentum since from the party scene will start Inauguration/March thing accessible, convenient his film “Manchester by the to thaw as early as Jan. 8 Where do you plan to and hospitable.” Sea” premiered at Sundance when the Golden Globes kick be inauguration weekend? last January. Now, with the off an awards season that will On Jan. 20, President-elect Party planner: Casey Affleck-helmed film dominate January and Febru- Donald Trump will attend two Ron Wendt drumming up awards-season ary. The indie snow bunnies of official inaugural balls and the Emerging as the fashion nods, Hedges is poised to be a the film world will swap their Salute to Our Armed Services industry’s go-to for planning face of 2017. He’ll be seen this carpet gowns for Sundance, Ball, his transition team has the chicest parties, Ron year alongside Saoirse Ronan at the end of January, just be- announced. Several other Wendt’s work will be seen all in “Lady Bird,” and “Three fore New York Fashion Week: unofficial (and nonpartisan over New York in the coming Billboards Outside Ebbing, Men’s returns — here’s hoping at that) balls are being held year. In 2016, Wendt was re- Missouri” from Academy the men’s brands hit their through the capital over the The 73rd Annual sponsible for Chanel’s dinner Award-winner Martin Mc- stride with their after-party weekend, including the Vettys Golden Globe Awards. at the New York Public Library, Donagh, starring Peter Din- effort. The Grammys will inter- Inaugural Ball and Awards and the opening of the Cartier klage and Woody Harrelson. rupt New York Fashion Week, the Washingtonian Inaugural a permit for the march to launching shortly after. Will mansion — and for filling Louis and just as you’re recovering Ball. Actors including Connie take place, beginning not at Trump come knocking when a Vuitton’s Miami Design District Naomie Harris from the Marc Jacobs finale, Britton, Christina Hendricks, Lincoln Memorial as originally veggie craving strikes? store with 24,000 pounds The British actress may the Academy Awards will kick Alia Shawkat and Cheryl planned, but at Independence of sand. “There is always an have catapulted into fame off in L.A. After that, it’s off to Hines are on the host commit- Avenue and Third Street SW. Made Nice — February object to meet — most of them with “Skyfall” and “Spectre,” the races — SXSW will draw tee for the Creative Coalition’s 8 West 28th Street are Paris-based, and they but she’s moved beyond her hipster entertainment geeks Inaugural Ball for the Arts, held Restaurants: Will Guidara and chef Dan- have very specific directives Bond days with “Moonlight,” to Austin, museums like the Friday evening. Talent has yet AbcV — Early 2017 iel Humm of Eleven Madison they’re looking for,” he says of one of this year’s most poi- Frick and the Whitney are sure to be confirmed for this year, 38 East 19 Street Park and the NoMad Hotel his clients. “But then there’s an gnant contenders for Oscar to usher the young socials of but past performers include Continuing his dominance restaurants are set to make interpretation, because this gold. And the fashion world New York into a cocktail dress the Black Eyed Peas and Sting. of New York’s dining scene, their fast-casual debut in is New York.” His schedule for has caught on quick; she’s for their spring parties and the Left-leaning designers like Jean-Georges Vongerichten February, with the opening the new year already includes graced front rows at Michael Chanel-touted Tribeca Film Michael Kors and editors such has partnered with ABC Car- of Made Nice. Located next the Net-a-porter and MSK win- Kors, Dior and Burberry, and Festival will give a leg-up on as Condé Nast Traveler’s Pilar pet & Home chief executive door to the NoMad bar, the ter luncheon, the MSK spring the award-season race has what movies to add to your Guzman are just some of the officer and creative director restaurant will serve a small ball, with Carolina Herrera, and her out in Rodarte, Monse viewing queue. Will the Coach- media and fashion people Paulette Cole to open AbcV, a menu of composed dishes, an Oscar party in L.A. “that I and Gucci. Much like we were ella steam continue to wane? who have voiced plans to vegetarian spin-off of his pop- priced around $12 to $15, can’t talk about.” glued to our TVs awaiting Brie What glamorous newcomer join in the Women’s March on ular ABC Kitchen. The restau- that are reminiscent of their Larson’s Oscar-night dress will debut at Cannes? And, Washington on Jan 21. After rant, situated next to the ABC famed dishes from the two Breakout actors: last year, we’ll be eagerly the big one: just what will the some contention, the D.C. empire, will serve breakfast, other establishments. “We’ve Lucas Hedges awaiting Harris’ gown come

EX/Shutterstock; Golden Globes by J im Smeal/BEI/Shutterstock by Golden Globes A P/ R EX/Shutterstock; Vucci/ Evan by photograph Trump fashion cognoscenti pick from police have officially issued lunch and to-go, with dinner been craving a place that we The son of the Oscar-nom- February. — L.N. men’s wear MARCH 21 summit BROOKLYN PRESENTING SPONSOR • FIRST INSIGHT

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Memo Pad

he worked on with Chiuri, he said. Piccioli’s “I didn’t want this campaign to celebrate the collection, I wanted Push it to celebrate the values…it’s “This was a very interesting about the spirit, the feelings, the year,” said Pierpaolo Piccioli moment. More than usual? I don’t from Rome the day before New know. I didn’t think how it could Year’s Eve. Many people the be different, I just did what I felt.” world over would agree with him The spring show was certainly for grand-scale reasons, but, as a special moment for him, which the fashion industry knows, on a was partly why he asked Sims to personal level, 2016 was the year shoot backstage, to document that Piccioli and his longtime the milestone, but also because: creative partner Maria Grazia “I feel there’s authenticity and Chiuri ended their 20-plus year emotion in the real moment of professional marriage to go their the backstage,” said Piccioli. “I separate ways. Chiuri headed to didn’t want to miss that because Dior while he remained at Valen- it’s very spontaneous and fresh.” tino, where they had been co-cre- In addition to individuality and ative directors for eight success- emotion, authenticity and real- ful years. Anyone wondering if ness is a key value. To that end, Piccioli could keep up the brilliant the models are not heavily made work and hold his own at Valen- up in the portraits. In fact, Turling- tino got a firm answer with his ton is strikingly barefaced. “You breathtaking spring show. don’t have to decorate beauty,” Piccioli is wasting no time said Piccioli. “You have to catch it getting into 2017, opening the as it is.” — Jessica Iredale year with three runway shows in January: pre-fall in New York, followed by men’s and then Island Life couture. “I’m really happy to face Paris’ Île Saint-Louis, a favored new challenges,” he said. To hangout of writers, artists and in- that end, one of his first major tellectuals across the centuries, projects launching in the new is the setting for Louis Vuitton’s year is the spring ad campaign, latest advertising campaign, Christy Turlington shot by David Sims the first representing Valentino shot by Bruce Weber and styled for Valentino’s spring 2017 campaign. under Piccioli’s personal creative by Marie-Amélie Sauvé. vision. It was photographed by Titled “Series 6,” the cam- David Sims in two parts — first, paign moves between minimalist backstage at the spring runway studio shots of Vuitton ambas- show; and second, a series of sadors — actresses Michelle powerful black-and-white por- Williams, Jennifer Connelly, traits of seven models, including Adèle Exarchopoulos and Sasha Christy Turlington, Liya Kebede, Lane — and images of models Ratner, Fei Fei Sun, Lorena taken on and around the island Maraschi, Blesnya Minher and in modern silhouettes from the Mali Koopman. The images will house’s spring collection. break Jan. 4 on Valentino’s digital Star leather-goods styles channels and in February print from the collection also get issues, appearing as spreads major play in a series of witty juxtaposing the portraits and the still lifes — like a Petite Malle backstage shots and as single “Column” bag hanging from a pages. wrought-iron railing and a Petite For Piccioli, the campaign is Malle in printed epi leather sus- less about clothes than a state- pended in a rusty dock ring. ment of his values for the brand. Charles Baudelaire, Marie “I wanted to celebrate beauty as Curie and members of the so- individuality and the one-of-a- called “Lost Generation” includ- kind,” he said. That translated to ing Ernest Hemingway, John Dos casting women across diverse Passos and Nancy Cunard count ethnicities and age brackets. “I among former residents of the didn’t want to have an ideal wom- storied Île Saint-Louis, one of two an,” said Piccioli. “I didn’t want to natural islands on the river Seine talk about the age and race, I just in the heart of Paris, with views like them for what they are. There on Notre-Dame Cathedral. are no rules — no young or less Summoning up the energy young.…I didn’t want to create of Paris’ avant-garde artistic, a tribe of women; ultimately I literary and intellectual move- Jennifer Connelly in the new wanted to get individuality.” ments, Weber channeled a Louis Vuitton ad campaign. Could his emphasis on the flâneur strolling through the individual bear relevance to Pic- streets for the campaign, with the island’s western tip dedi- visual culture in the 20th century, all artistic influences. It is to this of Vuitton’s women’s collections. cioli’s new independence at Val- shots combining a romanticized cated to the French poet of the including Surrealism. cultivated, intellectual, original The campaign will break in a entino’s creative helm? Perhaps. view of Paris with strong cultural same name, a major figure in the “Paris is the soul of this col- and free-spirited Parisienne that I range of international luxury titles Asked if he thought about this references. Case in point: The avant-garde movements that lection, with its Right Bank/Left wanted to pay tribute,” said Nico- on Wednesday, including Vogue. campaign differently than those Place Louis-Aragon, an area on shaped France’s literary and Bank duality, Paris nourished by las Ghesquière, artistic director — Katya Foreman Fashion Scoops

to pay down about $115 million of debt, John Haugh, Iconix’s chief executive management will continue to be a key Umbro, Lee Cooper, Danskin, Candie’s, Narrowing a portion of which will be used to pay officer, said the brand did not fit the com- focus for the company.” Nick Graham, Joe Boxer, Missimo, down the firm’s Senior Secured Notes pany’s go-forward strategy as outlined at Sharper Image is the second brand London Fog, Ocean Pacific, Strawberry Focus issued under Iconix’s securitization the firm’s investor day last month. that Iconix has sold this year. The com- Shortcake, Rockawear and Mossimo, to Iconix Brand Group has sold the rights facility and a portion of which will be “After careful consideration, we pany earlier this year sold its Badgley name a few. He also spoke about how the to the Sharper Image for $100 million to used to pay down the company’s Senior determined that we could better lever- Mischka brand. brands are divided into three categories, ThreeSixty Group. Secured Term Loan. age our resources and generate greater At the company’s investor day with high-growth brands such as “Umbro” The cash transaction included related While the company expects to record returns by focusing on other areas of the presentation, Haugh made a point of called “drivers,” older and established intellectual property assets of the Sharp- a gain on the transaction, Iconix said business. This transaction generates a noting that the company — now an active brands like “Candie’s” referred to as er Image brand. ThreeSixty Group is the that for 2017, the net impact of the sale significant return on investment, and al- brand manager — is still in the mergers the “maintain” group, and smaller and brand’s largest licensee. of the Sharper Image brand and the lows us to make progress on de-levering and acquisitions game, both as buyer younger brands with runway potential The company said it plans to use repayment of debt is expected to be the balance sheet, which is a top priority,” and seller. The company has just over 30 like a Nick Graham that the company can the net proceeds, plus additional cash, neutral to earnings. Haugh said. The ceo added, “Portfolio brands under its umbrella, which include: “incubate.” — Vicki M. Young