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In it he said curtains to high tech, replacing it with some ultrachic Balenciaga collection he showed on Thursday. s fine French drapes, along with exquisite tailoring and “tweed” top worn with an intricately swagged skirt. “It’s very Parisian,” said Nicolas Ghesquière of the profitability deadline for the storied fashion profitability deadlineforthestoriedfashion acquired YSL in 1999, has resisted setting a many in the market. Gucci Group, which reached breakeven in 2008, surprising celebrate: As reported last month, YSL prepared togointothiscrisis.” “I think we have a team which is quite well or $95millionataverageexchangerates. losses had ballooned to 76.4 million euros, officer of YSL in early 2005, a year after Hermann, who arrived as chief executive is oldhatforthefolksatYvesSaintLaurent. tailspin, operating under trying circumstances thrown many high-flying luxury brands into a PARIS — By MilesSocha Plots Ambitious Growth YSL, Finally Profitable, Lovely Shade of Black: d And there is a motivating victory to to And thereisamotivatingvictory “We’ve always been in crisis,” said Valerie sophisticated color play. Here, a caviar-beaded For more onthecollections, see pages 4 to6. While the global economic crisis has Whiletheglobaleconomiccrisishas ay See

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7 2 WWD, FRIDAY, MARCH 6, 2009 WWD.COM Lambertson Truex Files Chapter 11 By Vicki M. Young request because it hopes to lease it to another tenant. Until then, Samsonite is paying the rent High-end accessories firm Lambertson and real estate taxes for the New York store. WwDfridayBeauty Truex on Thursday filed a Chapter 11 petition in The company’s Web site continues to operate. a Delaware bankruptcy court, and its exit strat- It said the wholesale business and online opera- FASHION egy is a sale of the company. tion are profitable. Nicolas Ghesquière went for color play and draping s 4 Giuseppe Bonfiglio, president, said the com- Dembsky said that due to the extreme down- at Balenciaga, while Olivier Theyskens’ romantic Nina pany has been actively courting potential part- turn in the global economy, even those who used Ricci collection was glitter-dusted. ners. to seek out the “highest quality product” are “We have been approached by several pri- now in the “shy spending” mode. He also said GENERAL vate equity firms who share our confidence and the company was unable to obtain credit for its While the economic crisis has thrown many luxury ability to reorganize and restabilize in the short- wholesale operations. 1 brands for a loop, operating under trying times is old term,” he said. The company said it has “determined that it Lambertson Truex was formed 10 years ago will not pursue [debtor-in-possession] financ- hat for the folks at Yves Saint Laurent. and Samsonite Corp. took a majority stake in the ing to sustain its post-petition operations.” With 3 Retailers generally reported lower same-store sales for firm in 2006. A call to Samsonite seeking com- the closure of the two retail stores, the company February, but decreases moderated slightly from the ment wasn’t returned. Founders John Truex and said it had “determined that it has adequate levels of recent months. Richard Lambertson are still with the firm as cash flow to fund itself during the Chapter 11 creative directors. proceeding pending a sale.” 8 Attendance was as low as the spirits at the Personal Rumblings about a possible filing started in Samsonite is the top unsecured creditor at Care Products Council’s annual meeting at the Boca early February. Bankers at the time said one $17.9 million. Next are the landlords for the Raton Resort and Club. problem that contributed to “liquidity issues” two shuttered stores: $4.7 million for the Los 12 Rancor rose over the Employee Free Choice Act, as a was the quick rollout of stores after Samsonite Angeles store at 8457 Melrose Place and $2.5 retail group said it would cause job losses and Presi- took control of the firm. million for the Las Vegas store at The Shoppes dent Obama reiterated his support. In an affidavit by Maurice Dembsky, at The Palazzo, which owner General Growth Lambertson Truex’s director of finance, the com- Properties is attempting to sell. 13 Investors steered away from Urban Outfitters Inc. stock pany said it shuttered its Los Angeles and Las According to the petition, estimated liabili- Thursday after it said higher markdowns led to lower Vegas stores around Feb. 25. The New York store ties are $10 million to $50 million and estimated fourth-quarter earnings. on Madison Avenue remains open at Samsonite’s assets are between $1 million and $10 million. 13 Fifteen local chapters of UNITE HERE, representing 150,000 members, have set a vote for Saturday on whether to disaffiliate from the union. 14 The Buckle Inc., which delivered a 21 percent February Five Held in Alleged Counterfeit Scheme Nina Ricci same-store sales gain, is moving its 391-store fleet to its most easterly point yet. By Matthew Lynch 2008 after a cooperating witness informed it of Classified Advertisements...... 15 the group’s desire to smuggle shoes, bags and Immigration and Customs Enforcement other items into the country. Between last June To e-mail reporters and editors at WWD, the address is agents in New York arrested five people and the time of the arrests, undercover agents [email protected], using the individual’s name. Thursday for their alleged roles in a conspiracy helped broker the import of 62 containers from WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2009 to import more than $40 million of counterfeit China, only 15 of which were actually delivered, FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. merchandise into the city’s ports. the complaint revealed. VOLUME 197, NO. 48. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with Authorities charge that a yearlong under- Containers seized by the agency held counter- one additional issue in January, May, October, November and December, two additional issues in March, April, June and August, and three additional issues in February and September) by Fairchild Fashion Group, which is a division cover investigation showed Chang Miao Ye, Guo feits with an estimated street value of more than of Advance Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services Long Xu, Xue Hu Huang, Xiao Fang Zhu and Ke $40 million, authorities said. provided by Condé Nast Publications: S. I. Newhouse, Jr., Chairman; Charles H. Townsend, President/CEO; John W. Ren Wang all aided in some way in the shipment Meanwhile, in Rome, 150,000 pieces of coun- Bellando, Executive Vice President/COO; Jill Bright, Executive Vice President/Human Resources. Periodicals postage of containers that held fake Louis Vuitton, Gucci terfeit Burberry clothing and accessories were paid at New York, NY, and at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services Tax Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian and Nike footwear. seized at the Italian capital’s Fiumicino Airport addresses to: P.O. Box 503, RPO West Beaver Cre, Rich-Hill, ON L4B 4R6 POSTMASTER: SEND ADDRESS CHANGES All five were arraigned in federal court in on Thursday, according to AFP reports. Police TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615–5008. FOR SUBSCRIPTIONS, ADDRESS Brooklyn late Thursday afternoon. Each faces and customs officers found the fake clothing — CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or visit www.subnow.com/wd. Please give both new and old addresses as printed a statutory maximum 20-year prison sentence. all labeled with the Burberry logo — among a on most recent label. First copy of new subscription will be mailed within four weeks after receipt of order. Address all A judge released Zhu on bond but held her co- consignment of goods from China. The street editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. defendants. value of the clothes was estimated at around For permissions and reprint requests, please call 212-630-4274 or fax requests to 212-630-4280. Visit us online at www.wwd.com. To subscribe to other Fairchild magazines on the World Wide Web, visit www.fairchildpub.com. Immigration and Customs Enforcement 10 million euros, or $12.5 million at current Occasionally, we make our subscriber list available to carefully screened companies that offer products and services agents arrested the alleged co-conspirators exchange. Following the find, Italian police that we believe would interest our readers. If you do not want to receive these offers and/or information, please earlier in the day after participating in the con- have launched an investigation into import- advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273. WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR THE RETURN OR LOSS OF, OR FOR DAMAGE OR ANY OTHER INJURY TO, UNSOLICITED MANUSCRIPTS, trolled delivery of two containers that carried ing counterfeit goods against five individuals, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPARENCIES), OR counterfeit goods with a street value of about three of whom are from China and two from ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER $2.1 million, authorities said. Italy. A Burberry spokesman declined comment MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED TO DO SO BY WOMEN’S WEAR DAILY IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE According to a complaint filed this month, Thursday. ACCOMPANIED BY A SELF-ADDRESSED STAMPED ENVELOPE. the agency began its investigation in March — With contributions from Nina Jones DAILY Brioni Set to Court Potential Investors It was a reality, so we had to QUote cope“ with it. What makes you By Emilie Marsh company at 400 million euros, or $588.5 million. In 2007, Brioni’s EBIT gained 26 percent to 31.4 successful is when the customer buys your clothes. MILAN — Italy’s Brioni is finally in the shop million euros, or $48.6 million, on sales of 206.5 window. million euros, or $319.74 million. I didn’t want to reach breakeven by endangering After the luxury apparel label tapped Brioni is expected to attract wide interest the development. BNP Paribas in November to help sell a 20 from cash-rich operators as the company has a to 25 percent stake, a dossier is expected to strong brand, a profitable and growing business, — Valerie” Hermann, chief executive of Yves Saint Laurent, go out to a short list of potential investors and men’s wear, which accounts for around 90 on getting the fashion house out of the red. Page one. next week, sources said Thursday. According percent of turnover, is viewed as an attractive to market speculation, these may include category for emerging markets. Mediobanca, PPR and LVMH Moët Hennessy “Everyone is going to look at it,” sources said. Nina Ricci TODAY ON Louis Vuitton. “Although [Brioni’s owners] may have to give up RTW Fall Brioni, PPR and LVMH declined to comment, a bigger stake than planned.” 2009. while Mediobanca did not return calls. With current earnings multiples deflated due Brioni’s controlling shareholders, who are to worsening market conditions, a valuation descendants of the company’s founders, are closer to 300 million euros, or $376.3 million, looking for a 100 million euro investment, or is more likely, sources said. Moreover, a strate- $125.4 million at current exchange, to ease debts gic or industrial investor would want a majority WWD and develop the business — including buying stake, particularly given Brioni’s complicated .com an accessories plant — with a view to listing on family ownership, they said. the Bourse in four or five years, sources said. “The value is declining and equity keeps • Ongoing coverage of Paris Fashion Brioni bought out former chief executive officer going up,” sources said. Week including reviews, Umberto Angeloni for an estimated 80 million Brioni has three co-ceo’s: Andrea Perrone, parties and Fashion Scoops euros in 2006. who is the grandson of co-founder Gaetano “In effect, the family wants to recoup that Savini; Antonella De Simone, who is the grand- • Videos of key collections from New chard

sum,” sources said. daughter of co-founder Nazareno Fonticoli, A York, Milan and Paris Brioni has yet to release figures for 2008, al- and Antonio Bianchini. Perrone runs the com- • Backstage beauty reports

though sources estimated earnings before in- pany, while De Simone oversees marketing and elphine

D and images from Paris

terest and taxes hit 40 million euros, or $58.9 communications. by million at average exchange, on revenues of — With contributions from Andrew Roberts • Full runs of show from all the shows hoto

200 million euros, or $294.3 million, valuing the and Miles Socha, Paris P • Beauty Roundup: March 6, 2009. WWD, friday, march 6, 2009 3 WWD.COM Comps Scorecard: A High-Low Affair By Alexandra Steigrad The trend in same-store february same-store sales sales thawed slightly last february january december month, but upper-end retail- 2009 2008 ers didn’t feel the warmth. % Change % Change % Change % Change Retailers on Thursday gen- erally reported lower compa- DEPARTMENT STORES rable-store sales for February, Bon-Ton -8.5 -7.2 -8.2 -5.8 but decreases moderated slightly from the levels of re- Dillard’s -13.0 -2.0 -12.0 -5.0 cent months and were often J.C. Penney -8.8 -6.7 -16.4 -8.1 better than the stores and an- Kohl’s -1.6 -3.8 -13.4 -1.4 alysts had expected. However, Macy’s -8.5 -3.5 -4.5 -4.0 the results, anchored by a Neiman Marcus -24.2 -7.3 -25.8 -27.5 strong performance by Wal- Mart Stores Inc., were kinder Nordstrom -15.4 -5.8 -11.4 -10.6 to discounters and off-price Saks -26.0 3.4 -23.7 -19.8 stores than they were to de- Stage Stores -8.6 -2.5 -13.1 -4.9 partment and specialty ones. Average: -12.7 -3.9 -14.3 -9.7 And luxury retailers Saks Inc., Neiman Marcus Inc. and Nordstrom Inc., as well as teen SPECIALTY CHAINS retailer Abercrombie & Fitch, Abercrombie & Fitch -30.0 -2.0 -20.0 -24.0 remained mired in double- Aeropostale 11.0 7.0 11.0 12.0 digit declines. American Eagle -7.0 -4.0 -22.0 -17.0 The comp results did little American Apparel -9.0 n/A 2.0 3.0 for the stock market as Wall Street continued to plumb his- Banana Republic -16.0 -5.0 -22.0 -15.0 toric lows, although concerns Bath & Body Works -3.0 -10.0 0.0 -11.0 about the solvency of General Buckle 21.0 24.3 14.7 13.5 Motors and the vulnerabil- Cato 8.0 3.0 -10.0 -2.0 ity of Citigroup and other U.S. banks moved the markets far The Children’s Place 0.0 5.0 -11.0 0.0 more than the retail sales re- Gap (U.S. stores) -12.0 -3.0 -18.0 -12.0 sults. The S&P Retail Index Hot Topic 10.8 -2.3 6.0 4.3 gave back Wednesday’s gains, Destination Maternity -3.5 4.8 5.1 -6.9 dropping 3.6 percent Thursday Old Navy -13.0 -8.0 -34.0 -16.0 to 232.89, but fared better than Neiman Marcus comps the Dow Jones Industrial dropped 24.2 percent. Rite Aid -0.9 2.2 1.0 -0.2 Average, below 6,600 after a Victoria’s Secret -9.0 -10.0 -15.0 -9.0 4.1 percent drop, and the S&P 500, back below 700 after The Bon-Ton Stores Inc., which both reported comp de- Walgreen -1.9 8.3 0.4 4.9 declining 4.3 percent. creases of 8.5 percent. Wet Seal -6.6 -8.2 -14.7 -12.5 Noting lower gas prices freed up money for shopping, Not far behind were J.C. Penney Co. Inc. and Stage Zumiez -13.4 -2.6 -14.8 -12.3 Wal-Mart again set the pace for monthly advances with Stores Inc., with respective declines of 8.6 and 8.8 a 5.1 percent leap in comps, excluding fuel, and a 5 per- percent. Dillard’s Inc. had a 13 percent drop, and Average: -4.1 0.0 -7.9 -5.6 cent comp gain in Wal-Mart’s U.S. stores. Gottschalks Inc., which filed for bankruptcy protection “Although Wal-Mart may have been the poster child in January, did not report monthly comps. (For more on MASS MERCHANTS of February’s relatively better-than-expected indus- Dillard’s results, see page 13.) BJ’s Wholesale Club * 8.2 5.9 7.6 5.9 try sales performance, there was a slightly broader Specialty stores weighed in with mixed results, led Costco -3.0 7.0 -2.0 -4.0 industry improvement for the month,” said Michael by The Buckle Inc.’s gravity-defying 21 percent increase, Niemira, chief economist and director of research at the which was more than twice what analysts had estimat- Ross Stores 1.0 4.0 -2.0 0.0 International Council of Shopping Centers. “Moreover, ed. (For more on Buckle’s winning formula, see page Stein Mart -12.2 -10.4 -16.7 -8.5 the last four months show an increasingly less negative 14.) Limited Brands Inc.’s 7 percent slide was better Target -4.1 0.5 -3.3 -4.1 performance for the industry, which is an encouraging than the company’s projection of a double-digit retreat TJX Cos. 0.0 3.0 -4.0 0.0 sign and one that ultimately will form a foundation for for the month. Better-than-anticipated results included stronger sales performance later in the year.” Aéropostale Inc.’s 11 percent increase, Hot Topic Inc.’s Wal-Mart * 5.0 2.5 2.1 1.7 Citigroup broadlines analyst Deborah Weinswig 10.8 percent advance and declines of 7 percent and 6.6 Average: -0.7 1.8 -2.6 -1.3 agreed. “The big takeaway from today is that it almost percent at American Eagle Outfitters Inc. and The Wet seems like we’re seeing a stabilization or an accelera- Seal Inc., respectively. Tally: tion,” she said, pointing out that November might have Brean, Murray, Carret & Co. retail analyst Eric Beder Up 7 14 9 7 been when retailers hit bottom. “I feel very encouraged highlighted Wet Seal’s rollout of the new lower-priced coming off of this month.” Arden B. model, which helped improve the concept Flat 2 0 1 3 Either way, Weinswig said she saw an uptick in home store’s comps to down 11.5 percent, versus a drop of 23.9 Down 25 19 24 24 merchandise sales and in private label, which “contin- percent a year ago. While Arden’s comps were its best Total 34 33 34 34 ued to outpace the growth of national brands,” mainly performance since June, Beder said that overall, Wet SOURCE: COMPANY REPORTS because consumers get “better value for their money.” Seal’s results were “somewhat mediocre,” and should *Excludes fuel sales; Wal-Mart’s results are for U.S. discount stores only. “I think everyone’s shouting price,” she said, and as improve as more in-season buying occurs. a result, “big-box retailers are gaining market share.” Hot Topic’s Torrid division, which had a 4.8 comp BJ’s Wholesale Club Inc. led discounters this month, gain, was another concept store posting better-than- with an 8.2 percent increase in comps, but said it expe- expected results. According to retail analyst Jennifer For the day’s best and worst rienced weakness in jewelry and apparel. Black of Jennifer Black & Associates, Torrid, which tar- stock performers, see WWD.com. Comps fell 4.1 percent at Minneapolis-based Target gets plus-size teen girls, has “truly captured this mar- Corp., which had its ratings outlook changed to “nega- ket niche” thanks to a product assortment that she de- tive” from “stable” by Moody’s Investors Service based scribed as “spot on.” fic this month, versus a flat February, Old Navy and the on weaker performance and “stress” in its credit card Citigroup retail analyst Kimberly Greenberger also Gap have shown some improvement. portfolio. Ross Stores Inc. managed a 1 percent increase praised Hot Topic, adding that while the retailer is not Banana Republic may need to update its fash- in February, and its larger off-price rival, The TJX Cos. a “value destination,” its price points are “very attain- ion assortment, the analyst said, as the “city life- Inc., reported comps were flat. able” and it has a good fashion assortment. style” approach adopted since the fall might not be The ongoing exodus to value was especially apparent “At the end of the day, fashion matters,” Greenberger timely. “Consumers just don’t want to look like they in the slumping comps of luxury department stores. said. “It’s not just about price.” are spending money right now,” she said. Cato Corp. In the department store sector, where all firms re- Greenberger said the problem with Abercrombie & credited unseasonably warm weather for its 8 percent ported decreases, high-end rivals Saks and Neiman Fitch Co., with its 30 percent decline in February comps, comp increase. Marcus fared the worst, recording blistering drops of 26 is that its price points are too high and its fashion isn’t Pacific Sunwear of California Inc. and misses’ retail- and 24.2 percent, respectively. new. Both the Hollister and Ruehl divisions posted 33 ers Chico’s FAS Inc. and Caché Inc. all refrained from Nordstrom Inc. posted a decline of 15.4 percent, in- percent decreases. reporting monthly same-store sales. cluding a 0.6 percent dip in comps at the retailer’s off- A&F shares slipped 12.9 percent on the day, to $18.24, Looking ahead, analysts seemed to agree that March price chain, Nordstrom Rack stores. and American Apparel Inc., after a higher-than-expect- comps will remain under pressure, as Easter falls in the “We think Nordstrom could potentially benefit in that ed 9 percent comp drop, saw its stock decline 18.2 per- second week of April, as opposed to last year, when it trade-down bucket of stores,” said Piper Jaffray retail cent to $1.62. fell during the last week of March. According to Lazard analyst Neely Tamminga, who noted the Seattle-based Gap Inc.’s comps were off 12 percent, with Banana Capital retail analyst Todd Slater, this shift will hurt firm’s “fortuitous” move to open more Rack stores is not Republic and Old Navy slipping 16 and 13 percent, re- March comps, and make “April numbers appear better.” based on the poor economy, but has been in the pipeline spectively. With this in mind, he warned investors: “With no di- for several months. Greenberger said because Gap’s inventory was so rection, it’s still a stock picker’s market with a negative Midtier retailer Kohl’s Corp. outshined its rivals, clean in January, the retailer was unable to be as pro- bias, so tread carefully.” posting a 1.6 percent drop, followed by Macy’s Inc. and motional as its peers. But with an increase in mall traf- — With contributions from Arnold J. Karr 4 WWD, FRIDAY, MARCH 6, 2009

Nicolas Ghesquiere went for ingenious color play and draping at Balenciaga, while Olivier Theyskens’ romantic Nina Ricci collection was Swags and Sparkle glitter-dusted. Balenciaga: “High tech is over,” Nicolas Ghesquière declared before showing his Balenciaga collection. “And the clubbing.” True and true. But not the way Ghesquière puts forth a bold manifesto to spectacular effect. He said he wanted to keep the collection very French; hence his change of venue from an in-house showroom all slick and tricked out with edgy lighting to a series of salons at one of Paris’ most storied hotels, the Crillon, with its glorious views of the Place de la Concorde. The setting, it turned out, was only part of the ultrachic Frenchness of a show with shades of both Yves Saint Laurent and Emanuel Ungaro. Ghesquière took what became the bourgeois standards of both — Saint Laurent’s impeccable tailoring and color play; Ungaro’s draping — pushing, manipulating and, in the case of the latter, exaggerating it big-time. And despite his protestations to the contrary, he infused the results with an element of the futuristic audacity that has become his hallmark. It made for a collection both powerful and plenty savvy, as the newly relaxed constructions should have broader commercial appeal. (Which is not to say they’re for chubbettes.) As always, Ghesquière honed his message for crystal clarity. He showed only a few silhouettes, almost all centered on the voluptuous, hip-focused draping. Skirts came in black-based or luminous, icy color mixes, the fabric gathered lavishly from the center or one side. One beauty, in tones of silver and black, was paired with a faux tweed top crafted entirely from caviar embroidery. Others got loose, sensual blouses worn over lace bandeaux. Ghesquière also showed gorgeous jackets, strong and clean through the shoulders with abundant hip festoons, over sari pants — an innovative evening proposal inspired by a piece in the house archives — or classic trousers. One stunner: a smoking in a discreet mix of black with deepest navy. When Ghesquière opted for less draping, he went for printed punch in a group of dresses, a number of which, it turned out, weren’t prints at all, but intricate embroideries. And if some of these were dizzying to excess, a fab tuxedo jacket over mannish striped trousers offered spare relief.

Nina Ricci: Don’t let the slight build and gentle manner fool you. Beneath his delicate exterior, Olivier Theyskens is one intrepid voyager. It’s almost certain that the Nina Ricci collection he showed Thursday was his last for the house. And whether he conceived it as a creative kiss-off to the powers that be at Puig or as an audition for his next job, the clothes were a fantastical journey through fashion of the most spectacular sort. Which is to say that Theyskens didn’t succumb to the constant pressure to conform and commercialize, though there were plenty of real clothes in this highly imaginative mix. There’s no telling how this collection will figure into what lies ahead, but Theyskens was clearly considering the future, a theme that played on from the first look, a strong-shouldered black top paired with filmy, pajamalike silk pants. Rather than take the obvious angular and aggressive approach, he imagined a softer, darkly romantic tomorrow, done in brooding black, purple and olive green shot with the occasional bright and lots of shine. Among the beautiful, wearable options for day were skinny pants and blazers, their edge sometimes tempered by a topping of cozy knits. Shoulders, while dominant, were rendered in round, padded curves, as in those on the stellar stream of jackets, such as leathers with tails and a thick, double-breasted tweed slashed with strokes of glitter. Such sparkle was one of the collection’s most effective touches, adding a glam finish to a classic daytime jumper and dazzling on the sleeves of sheer tulle under layers, all the while alluding to a psychedelic-Goth undercurrent that flourished for evening. That elaborate, high-drama affair began and ended with black, first a sheer, stripped-down corset dress, and, finally, a lavishly sculpted gown. In between came a parade of stunners: a mesmerizing beaded top and iridescent skirt combo; an artfully painted style; a cascade of ruffles done in brazen red, which seemed to say, See what I can do? And if those weren’t enough of a bold statement, the footwear sure was: giant, many in the audience thought ridiculous, platform shoes and booties, in black, gold and glittering fuchsia, most with a blank space where the heel should be. They weren’t merely gravity-defying, but utterly defiant, the Balenciaga way Theyskens likes things. WWD, FRIDAY, MARCH 6, 2009 5 WWD.COM

Balenciaga Nina Ricci Nina Ricci

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Nina Nina Ricci Ricci GIANNONI iannoni G GIOVANNI iovanni G AND and

FEUGERE eugere F STEPHANE tephane BY For Fashion Scoops, see page 15. S PHOTOS hotos P 6 WWD, FRIDAY, MARCH 6, 2009 WWD.COM

Rick Owens Balmain

PARIScollections/fall ’09

For full runs of show, see WWD.com. Rick Owens: As the old saying goes, if it ain’t broke, don’t fix it. That mantra has boded well for Rick Owens, who is nothing but consistent in his girls’ Goth vision: colossal funnel collars, sculpted monastic-like shapes, slouchy drop- Azzaro crotch pants, and so on. And the first half of the show — in black and charcoal gray — served as a stylish reminder of why his clothes are so cultish. (The Rochas Returns clique of edgily dressed young types at his Rochas: “Extravagance is not part of show was another.) It was classic Owens, the vocabulary,” said Marco Zanini of complete with boots featuring excess his debut collection for Rochas, which leather drooping around the ankles and suspended its rtw operations in 2006. In those terrific jackets, cropped high in the the collection he showed Thursday, Zanini front with low-slung folds in the back. He got off to a good start with a lineup that layered the latter, some done up in leather exuded gentle, unassuming elegance. For patchwork, over thigh-high skirts and dresses starters, he chose the basic slip — “the and cozy ribbed tights. most quintessential feminine dress” — as But what a difference a change of palette the foundation of the collection. To this, he makes. The second half kept similar added a French sophisticate mood inspired silhouettes going, but he traded in by Nouvelle Vague films like “Vivre sa Vie” the dark hues for silvers, champagnes and “Le Petit Soldat.” and frosty blues, turning his girls into The results were confident clothes that gorgeous alternative ice queens. The looked both refined and easy. Consider a look was chicly urbane, romanced up double-face wool coat with topstitched details a notch with what counts as an Owens or a cashmere cardigan lined in delicate eveningwear contender: elegant toga- chiffon. There were esque gowns, cut asymmetrically. It was great tailored numbers, a beauty of a collection, including some too, like the leisurely moments that were downright pretty. smoking ensemble and loosely cut, body- forgiving blouses and Balmain: It’s been several seasons since Balmain’s Christophe Decarnin LBDs. In a nod to house sounded the rallying cry for the Eighties revival that has taken over a good founder Marcel Rochas, part of fashion. And for fall, the sexy excess continued in an abundance of Zanini included crystals, sequins, studs and, obviously, shoulders. He co-opted the last days ample tulle touches, of disco in flashy T-shirts and silk parachute pants mixed with his signature rendered as underarm blazers and supershort dresses, some trailing black silk trains. Yes, these gussets, overlays clothes will still rock on the right girl. But even Decarnin’s riff on the Rue or veiling on open DOMINIQUE MAITRE Cambon — quilted black leather dresses trimmed with chains — couldn’t hide backs. Throughout, the fact that, ultimately, this collection was more of the same, and he needs to the craftsmanship move on. As king of the nightlife-loving crowd, Decarnin should know that, no and execution were matter how fun the party, you never want to be the last to leave. impressive. Cases in point: the gossamer Azzaro: Vanessa Seward served up her brand of retro-inspired cocktail fare for double-layered long- Azzaro’s glamour-loving, good-time girls whose closets always have room for a sleeved dress or the few more lamé and bejeweled dresses with plunging backs. There were pretty intricately hand-beaded updates on that front, but what looked newest were the fringed shift dresses; slip. So far, so good. Now only time will a bow motif, which appeared on belts and the busts of cocktail dresses, as well GOIZE AND GIANNONI, FRANCOIS GIOVANNI

as the final look: a black dress that looked plain head-on, but turned to reveal a tell if Zanini can BY sheer lace back set with two crystal swirls, à la Man Ray’s “Le Violon d’Ingres.” make this quieter

It was full of kitschy charm. Rochas roar. PHOTOS WWD, FRIDAY, MARCH 6, 2009 7 WWD.COM Broader Offer has YSL on the Upswing Continued from page one house after a radical attempt to engineer a Gucci-esque renovation drove YSL deeply A look from the into the red. Edition Unisex line. Gucci Group ceo Robert Polet has not wavered from his 2004 statement that YSL would likely turn profitable when revenues reached about 300 million to 350 mil- lion euros, or $375 million to $437.5 million at current exchange. The milestone was reached as revenues rose 18.8 percent to 263 million euros, or $328.7 million, suggest- ing the good news came earlier than expected. Hermann credited product expansion, particularly in the high-margin leather goods business, for propelling the brand into the black — with tight cost controls playing a supporting role. “We went from a situation where it was mainly ready-to-wear and one bag, to ready-to-wear, bags, shoes and small leather goods,” Hermann said in an interview, seated in the meeting room situated between her office and that of creative director Stefano Pilati, her design counterpart in the turnaround effort. “Are we a monoprod- uct brand? Not any more.” The executive was referring to the Mombasa, a hit bag from the Tom Ford-era YSL that was the couture brand’s first real volley into accessories. (Previously, costume jewelry by the late couturier’s muse Loulou de la Falaise was the main statement.) While Ford’s horn-handled shoulder jewel is still available in stores, it’s the Muse, Muse 2, Downtown and Tribute bags that have given YSL further legitimacy, along with influential shoe styles such as the Tribute, a platform sandal. When Hermann arrived at YSL from Dior, succeeding Mark Lee, leather goods accounted for 31.9 percent of the company’s revenues, with rtw at 44.5 percent, shoes at 13.1 percent and other products, including royalties, at 10.5 percent. Last year, leather goods generated 35.9 percent of revenues, with rtw at 30.8 per- cent, shoes at 16.7 percent and other products at 16.6 percent. While product expansion, including the Edition 24 line of wardrobe staples, plus evening and unisex capsules, bumped up the top line, Hermann nurtured the bottom line with close attention to open-to-buys, inventory levels, pricing and margins. Healthy sell-through took prior- ity over loading up stores with merchandise. “The best way to improve the results was to increase the turnover, with a good margin,” she stressed. A driven but fun-loving executive, Hermann has kept a low press profile since she joined the company, but can now trumpet some of YSL’s achievements. Powered by Pilati’s designs, YSL is ranked number-one within Gucci Group in terms of editorial credits, prorated versus advertising investments. The Italian designer, who worked under Ford before taking the solo reins in 2004, took some lumps for his first collec- tion of wide belts and tulip-shaped skirts. But it would prove influential, and his recent collections have received more critical acclaim, especially a breakthrough futuristic collection last year. What’s more, the brand has achieved double-digit growth every year since 2005 without opening any retail stores — the only label in the Gucci Group to have that distinction. To be sure, YSL’s retail network has been a bugbear for Hermann in more ways than one. The 61 company- owned stores quickly opened during the Ford era gave YSL an immediate platform to compete with other top brands, but also burdened the firm with the high fixed costs. (There are also seven franchise loca- tions.) percent for North America, 13 percent for Asia-Pacific Hermann and Lee were also saddled and 7.5 percent for Japan, where the brand logged a 10 with a too-dark store concept that did percent sales gain last year. not resonate with consumers. “When the YSL is absent from South America, has only two lo- first concept is a failure, you can’t have cations in China and is only this year making footprints another,” she said. in Southeast Asia — meaning plenty of scope for future Last year, Pilati unveiled the first geographic expansion, Hermann said, rattling off Las Vegas, new-look boutique at its historic Saint- Germany, Brazil and China as future possibilities. Sulpice location in Paris, with ceilings and wall panels Dressed in a black cardigan, cream blouse and black pants, Hermann said she in the glossy lacquer that’s the color of YSL’s legend- viewed overcoming the deficit as a personal challenge, with no easy solutions but to ary Opium perfume as the central design element. make YSL a go-to fashion brand. Hermann dubbed the new decor a success, cit- “It was a reality, so we had to cope with it,” she said. “What makes you successful is ing double-digit growth at Saint-Sulpice. About a when the customer buys your clothes. I didn’t want to reach breakeven by endanger- dozen locations now reflect the new interior de- ing the development.” sign. The brand is present in about 250 whole- sale doors. Having fought its way out of the red, YSL can resume expanding its retail network. Are we a monoproduct brand? Not any more. A unit in Seoul recently opened, and “ — Valerie Hermann, Yves Saint” Laurent three more locations in Asia are com- ing in 2009: Hong Kong, Taiwan and Singapore, Hermann said. At present, YSL’s business is con- Cost controls were vigilant, and there was some retrenchment. YSL shuttered bou- centrated in Europe, which in 2008 tiques in Brussels, Capri, the Americana in Manhasset, N.Y., and “right-sized” the accounted for 57.8 percent of Manhattan flagship on Madison Avenue. sales, versus 21.6 But there were investments, too. Budgets were increased for sample collections, product development and communications. In total, 100 employees were added over a four-year period, Hermann said. Here: a Tribute As gratifying as reaching breakeven is, Hermann characterized it only as a “first 2 shoe. Above: A step. It’s not enough,” with the goal being to reach a double-digit level of profitability Besace bag. consistent with other European luxury brands. “We have so many things to do.” Pilati agreed. “It is a milestone, but it is at the same time just a signal of the beginning,” he said. “We have an ambitious path ahead, and we are determined to continue and improve our profitability. “YSL should continue to be a brand of distinction,” he continued. “It’s about focus: focus on technique and mastery in design and delivering unique proposals to the marketplace. Then of course there are objectives to grow responsibly the sales and network of the company, to more fully realize its potential.” Looking ahead, Hermann said YSL would likely expand e-commerce to Europe after a promising launch in the U.S. She also spies “huge potential” for the brand in men’s wear. “I think Stefano has a real vision for men,” she said. 8 WWD, FRIDAY, MARCH 6, 2009

The Beauty Report WWD.COM

Scott Jerry Beattie Vittoria

Michael Iain McNamara Holding Neil Katz Joe and Mary Campinell PCPC Mantra: Innovate or Die By Julie Naughton and Pete Born lack of shipments won’t reflect positive retail ideals are: service and innovative products. sales right now. However, the retail rate in We have never been a promotional brand.” BOCA RATON, Fla. — Attendance was as low January was lower than it was a year ago.” “We grew 11 percent at retail in 2008,” as the spirits at the Personal Care Products Scott Beattie, chairman, president and said Marc Rey, ceo and managing director Council’s annual meeting, held Feb. 24-27 chief executive officer of Elizabeth Arden Inc., of YSL Beauté in the U.S. “This brand can at the Boca Raton Resort and Club here. added, “Inventory is very lean and retailers triple or quadruple at least, but we don’t Dwindling sales orders — in large part are being very selective right now about what want to sacrifice the brand equity. We are in due to retailers determined to destock in- they’re replenishing. As retailers are starting about 300 doors. We also opened in Sephora ventory before placing reorders — was a to see what has traction, manufacturers will in September to bring in a younger consumer, prime topic. When the seemingly bottomless see an inventory build because inventory was and are working with QVC and the Internet.” spiral will rebound — specified to the month so drastically reduced. We’ve already seen “We need to get back to products which and even day — was the most popular guess- some of that in January and February. I think offer a real point of difference with realis- Heidi ing game in the cabanas and the lounges. business will flatten, possibly by the end of tic pricing,” said Michael McNamara, ceo of Manheimer About 400 executives attended the confer- this year.” Beattie noted that over the holiday Philosophy. “The excess in the market has ence, a sharp decline from 2008’s 650 tally, season, Arden didn’t replenish regular sets, been growing far beyond peoples’ ability to according to a spokeswoman for PCPC. but that its holiday gift sets sold through well. afford it. We will go deeper where we are, The buzz over cocktails often touched “Business is tough, but in the last and redefine that part of the business.” on the need to continue to innovate as a four weeks, movement has been better,” Beiersdorf executives noted that 2008 was a chief strategy for reviving the business. said Ingrid Jackel, chairman and ceo of strong year for parent Beiersdorf AG, with its This was underscored time and again Physicians Formula Holdings Inc. “Reorders consumer beauty segment — which includes during the conference. have been small; we’ve definitely felt the de- Nivea and Eucerin — posting a 10 percent “Consumer confidence is at Depression- stocking phenomenon. We’re not seeing a lot boost in worldwide sales to 5.13 billion euros, like lows,” said Ed Shirley, vice chairman of new orders. But I do think the destocking or $7.54 billion at average exchange. Earnings of global beauty and grooming for Procter will level off, hopefully by the beginning of before interest and taxes, excluding special fac- & Gamble. “We are sharpening our focus. the next quarter. Right now, there is a dis- tors, of 615 million euros, or $904 million, had Innovation is the way to move through this.” connect between orders and sell-through. a 3 percent gain. Three of Beiersdorf’s major Referring to the recent launch of We need to weather the storm, and we think beauty brands boasted double-digit revenue in- Olay’s Pro-X, priced at $42 to $62, as a we’re well positioned to do that.” creases, including a 10 percent rise for Nivea bold choice in this economy, Shirley said, and a 12.6 percent jump for Eucerin. Among re- “We are deepening our understanding of gions posting strong sales growth for Beiersdorf consumers’ needs and reframing, rather beauty products were Eastern Europe, which Thia Breen than offering $10 off.” Minus 10 is the new flat. registered an 18.5 percent gain; Africa, Asia “In a challenging economy, we are fo- “ — Heidi Manheimer,” and Australia, with 28.6 percent, and China, cusing on building trusted brands, pro- Shiseido Cosmetics America with 40.7 percent, all at rates adjusted for cur- viding innovation at great value and ex- rency-exchange effects. The company’s sales amining meaningful sustainability,” said rose 7.5 percent to 5.97 billion euros, or $8.78 Gina Drosos, Procter & Gamble Beauty’s Noted Art Spiro, executive vice president billion, and the company has stated its goal is president of Global Personal Care. of Liz Claiborne brands at Elizabeth Arden, to achieve a global market share of 5.5 percent “These are tough times for the consumer “Before I get [stock] to a consumer, I need to next year. “In all our major accounts, we are and our business, but we believe that we get it to a retailer. If retailers are living off in- performing significantly better than the mar- are well positioned to emerge even stron- ventory, we will have to find a different way to ket,” said Iain Holding, president of Beiersdorf ger from this challenge.” launch or postpone launches. Five years ago, North America. “The destocking phenomenon Beauty represents one-third of the con- retailers didn’t pass on fragrance launches. will come out in the wash over the next several glomerate’s sales, Drosos noted. “We’ve Now, they are picking and choosing. We haven’t weeks, but we are optimistic.” seen some market and inventory contrac- seen a dramatic interruption in orders, but ev- Neil Katz, ceo and chairman of Parlux tions, but we are continuing to invest in eryone is looking closely at inventory levels.” Fragrances Inc., seemed unfazed by the reces- Jonathan ads and marketing,” she said. “We believe “It’s a tough moment for everyone — we’re sion. He rattled off six fragrance launches set Zrihen in the long-term equity of this category.” all aligned for all the wrong reasons,” said Jerry for later this year, including a foray into spe- The whiff of advertising spending was Vittoria, Firmenich’s president of fragrances, cialty stores. “If you try to ride out this thing Gina Drosos clearly good news for the most well-repre- North America. Firmenich was one of only a only with fragrances now available, it gives the sented contingent at the meeting: publish- handful of oil houses that attended the confer- consumer reason to say we don’t need that,” ers, ad sales people and editors were there ence this year. “We’re all optimistic — we want Katz said, adding that newness is the stimulus. from the major publishing houses, includ- to believe that we will hit bottom in the next “The only reason for people to go out and pur- ing Condé Nast, Hearst and Time Inc. four months. More likely, it will be mid-2010 be- chase something is that they haven’t seen it be- “Every organization is managing in- fore we see an upturn. I also think we’ll see lots fore.” He added that his biggest problem was ventory better in this economy,” said more consolidations of oil houses.” the international fluctuation of the dollar. Dan Brestle, vice chairman and presi- “Minus 10 is the new flat,” joked Heidi Coty Inc. sent a smaller delegation this dent of the Estée Lauder Cos. Inc. North Manheimer, ceo of Shiseido Cosmetics year, helmed by George Cleary, president of America, and PCPC’s new chairman. America, who said her business was down in Coty Beauty U.S. Cleary and his team focused “Everyone’s looking to get inventories to the low-single digits year to date. “However, on the company’s mass brands, which include the right level, and they are concentrating we ended 2008 up 2 percent. Despite the econ- Rimmel, Sally Hansen and a host of mass mar- on not carrying huge loads. Therefore, the omy, we are not compromising on what our ket fragrances, including the celebrity licenses

Marc Pritchard leek hen p

ste Michel Mane, Karen Elliott and Linda Aureliana De Sandrine Frederic Jacques. Art Spiro Marshall Sanctis Beauduin Photos by WWD, FRIDAY, MARCH 6, 2009 9

The Beauty Report WWD.COM Wasson Sharpens Focus on Beauty Keynote speaker Gregory D. Wasson, as if we’d chosen three or four,” he said. “But Walgreens’ new chief executive officer and a select stores did very well and made me realize director of the company, is putting the chain’s there was opportunity in beauty that we weren’t spotlight on beauty. tapping.” Wasson also hopes to expand the roles Walgreens, which generated sales of $59 billion of the 25,000 beauty advisers the chain employs overall in its last fiscal year, is slowing store growth nationwide. “We have already made an investment from 8 percent yearly to 2.5 percent through 2011, in the advisers — we can shift the focus,” he said. to free up capital to put back into its existing stores. “We have an opportunity to become a health-and- One plan Wasson has for the cash: a “reinvention” wellness destination with some of our plans, and of the stores’ beauty department in a number of its that is a tremendous opportunity for our beauty George Eric doors, with a format inspired by a test-market effort staff to play even more of an advisory role.” Cleary Horowitz it has been running in its Times Square location. The Wasson will find the extra space by paring back three-level, 16,000-square-foot nonessential categories, such as of Tim McGraw, David and Victoria Dan and store includes a 320-square- Gregory alarm clocks. “That’s a noncore Beckham, and Halle Berry. Cathy Brestle foot L’Oréal Paris boutique D. Wasson item; we don’t need to offer 15 Jonathan Zrihen, president and ceo that includes slide-out shelves, sku’s of alarm clocks,” he said, Ingrid Jackel and of Clarins Group USA, said a major product testers, floor-to-ceiling adding that most customers Francois Sabate initiative this year for his company is visuals, streaming video and looking for clocks are either a new program, called Skin Time, to L’Oréal-trained beauty advisers. tourists or people who broke train the company’s 2,200 beauty advis- The upscale presentation their old one. ers to do 20-minute facials at counter. includes tastefully designed To create a more modern Zrihen said the objective of the move displays offering Affordable look, display unit profiles will be is not only to improve productivity at Essentials, which began in lowered. counter, but also to enhance beauty ad- December, and a baby item “In times like this, I’m visers’ knowledge of skin care. display area launched shortly glad I’m selling toothpaste,” Like other manufacturers, Zrihen thereafter. “We’ve already Wasson said of the demand indicated that he expects a rough year seen sales for Essentials rise 3 for necessities in the midst of at retail. He said he was nervous not percent,” he added. “And when the economy’s woes. “We’re only about retailers decreasing inven- we started doing the baby display, 41 percent of somewhat recession resistant, but we’re definitely tory levels, but also “making staffing shoppers added a baby item to their baskets. seeing shifts in sales of necessary things versus decisions” based on weak sales. “We’re looking at how we can redesign wants. We had a great December, but we saw a Klaus Stanzl, president, scent and signature categories,” said Wasson. “Our beauty huge surge right at the end. People were waiting care division, North America Global departments are one-size-fits-all now, and we until the last minute to spend, holding onto their Cosmetics at Symrise, said that fine think there is an opportunity to have an expanded money as long as possible. We will see a definite fragrance development has eased Ed Shirley focus on beauty in certain locations.” Somewhere change in consumer behavior, and we’re looking to with a slowdown in briefs, which between 500 and 2,000 of Walgreens’ 6,600 take advantage of that as much as we can.” began last year. However, the company stores could fit that bill, he said. “We don’t need “It will likely be mid-2010 before we see any acquired rival oil houses Manheimer more brick-and-mortar stores — we need to real type of uptick,” said Wasson. “Every retailer and Fragrances Intercontinental late refocus what we already have,” he said. out there is wise to look for ways to manage costs. I last year. “Both have interesting syn- The idea was sparked by a higher-end selection don’t think it makes sense to cut inventory willy-nilly, ergies for us, particularly Fragrances of seven beauty brands, called the European but people are being incredibly cautious about their Intercontinental, which gave us a Beauty Collection, that the retailer rolled out spending.” He added that the company has already strong position in the candle market in 2006 in about 1,000 of its doors. “We had identified more than $1 billion in cost savings. — a $300 million category.” too many lines, and it wasn’t as easy to shop — J.N. and P.B. As one bright note, Michel Mane, of Mane USA, talked about his company’s progress in utilizing a new formula for developing water- Analysts: Knowledge Is Power based fragrances. Its first outing: in Nautica’s Oceans scent. In a tough economy, knowledge will the prestige market had been up 2 percent; by Brestle, who took the helm of PCPC become more powerful than ever, said Karen Grant, yearend 2008, it was down 3 percent. But, she from Marc Pritchard, P&G’s global vice president of The NPD Group, and James Russo, noted, it certainly isn’t the only luxury category to marketing officer, cracked: “I was hop- vice president of marketing for the Nielsen Co. suffer losses: “the handbags category was down ing for a nay vote. Neither of us thought “The opportunities are in the granularities,” said 9 percent, digital cameras down 7 percent and we’d have the challenges we have Russo of the U.S.’s $43.2 billion beauty market. small appliances down 8 percent,” she said. “We now.” Ticking them off, Brestle spoke “It’s not enough to say, let’s look at a macro view.” have a loyal base of consumers 35 and up buying of more than 100 bills in 22 states with What consumers will always spring for? Innovation, antiaging products, but we are also seeing those in cosmetics components; the Food and emphasized both Grant and Russo, who were their 20s buying video games and electronics for Drug Administration’s Globalization speaking during a panel discussion fun, rather than cosmetics.” Act and Europe’s REACH legislation, led by WWD BeautyBiz editor Grant said that while beauty “capped by the biggest business melt- Jenny B. Fine. “If customers are items priced at $40 and below down in 70 years. Flat sales felt like a finding something new, something had declined, those retailing from major accomplishment.” different, something that catches $60 to $99 had actually posted Under his helm, Brestle said that their attention, they will buy,” said double-digit gains. “Going into the the organization would be focused on Grant, pointing to vibrating mascaras December holidays, 40 percent of strengthening the safety initiatives, launched by Estée Lauder and those polled said they planned to working with federal and state govern- Lancôme. “Prestige is becoming defer beauty spending; in January, ment on bills relating to the member somewhat masstige — such as 33 percent said they actually had companies, enhancing and expanding Sonia Kashuk’s new upscale line deferred and 54 percent plan to,” global harmonization, and enhancing in the Space NK boutiques at Karen continued Grant. programs and services for PCPC mem- Bloomingdale’s, and Burt’s Bees in Grant In fact, noted Grant, 55 ber companies. As well, the Board Robert McEwan Macy’s. “People are cross-shopping percent of women have said of Directors is currently undergoing and Bob Phillips to a huge degree, and department that they are shopping less, but a search for a new president after stores are starting to offer these buying the same brands in the Pamela Bailey, the former president, Klaus brands. One of the reasons that MAC same stores in which they have decamped last fall to become president Stanzl does so well is that it is priced so always shopped. “Consumption and ceo of the Grocery Manufacturers attractively and yet is such a trend will not stop. It will become more Association. Until a decision is made leader,” she added. selective, more meaningful and on that front, Mark Pollak is serving as “Value is not just related to more careful,” noted Russo. interim president and ceo. price — each channel has its own “We’re seeing smaller transactions definition of value,” said Russo, and less shopping trips.” Joy Atkinson adding that consumers are looking for And when it will be over is “the lowest price per serving” — not anyone’s guess. necessarily the lowest ticket price. “Let’s say that in the fourth That’s particularly important James Russo quarter of 2009 we are skimming to realize in the face of shrinking the surface of the bottom — then sales across the board, both said. The loss in beauty we may see moderate growth in 2010,” said Russo. sales was not necessarily a shift to another channel, But the market is in for some rough sledding in such as from class to mass — all of the beauty the meantime. “This won’t be a U-shaped recovery,” distribution channels shrank, including mass market, said Russo. “Growth will be slower, and there will be department stores and direct selling, said Grant. opportunities — but we will have to dig for them.” It is a particularly harsh realization for marketers Grant counseled a pragmatic view. “What’s most who 24 months ago were posting gains. “In important is not living by a number — it’s focusing 2009, people were stunned to see declines in on what you need to be doing to survive,” she said. prestige beauty,” said Grant, noting that in 2007 — J.N. and P.B. 10 WWD, FRIDAY, MARCH 6, 2009 The Beauty Report DKNY Men Has Its Day SNIPPETS PUREOLOGY ROLLOUT: By Matthew W. Evans The international launch of PureOlogy MIX A BEVY OF CELEBRITIES, VIP’S begins on March 16. and a new DKNY fragrance in a trendy France will be the first PureOlogy downtown Manhattan penthouse and one market after the U.S. items. can imagine the party that took place at for the brand designed the Hotel on Rivington Wednesday night. for color-treated hair The soiree was held to fete the launch that L’Oréal purchased of DKNY Men, Donna Karan’s first stand- in 2007. By yearend, alone men’s fragrance. PureOlogy should And standing in the crowd amid myriad be available in at flashbulbs and video cameras were such least 20 countries boldface names as Blake Lively, Kelly throughout Europe, Killoren Bensimon, Mark Vanderloo — the Asia and the South face of the new scent — Becki Newton and Pacific. Mirroring its Kim Raver. distribution strategy “This fragrance is very woody and it in the U.S., PureOlogy makes a man smell like he’s a man — and will be sold in the same doors as Redken internationally. Of PureOlogy’s seven hair I love that,” said Bensimon, who noted care lines available in the U.S., three — Hydrate, Pure Volume and Essential Repair that she’ll be launching a jewelry line — will be sold internationally at the outset. “very soon.” Also among the crowd were executives COOPER DEAL: Lee Cooper has signed a fragrance license with Groupe Jacques from the Estée Lauder Cos. Inc., which is Bogart. The first scent for the British jeans brand is due out in early 2010. Jacques the licensee for Karan’s beauty business. Bogart’s other fragrance licenses include Chevignon, Bugatti and Ted Lapidus. Veronique Gabai-Pinsky, president of the Veronique Gabai-Pinsky and Blake Lively Jacques Bogart also has skin care holdings, such as Méthode Jeanne Piaubert and firm’s Aramis and Designer Fragrances Stendhal. division, noted that while the fragrance in- fan of Donna Karan,” said that “anything dustry has been impacted by the economic she touches, in my book, is a good thing.” YES TO EXEC: Israeli-born and naturally inclined beauty brand Yes To Inc., has downturn, there are programs in place to She had similar sentiments about Sarah named Paul Pritchard vice president of sales effective March 3. Pritchard joins the build Karan’s fragrance business next year. Jessica Parker, and said that if she had the parent company to Yes To Carrots, Yes To Tomatoes and Yes To Cucumbers from “Besides bringing newness to the opportunity to do a fragrance, she would. L’Oréal USA, where he also served as vice president of sales. Pritchard will be based brand,” she said, “We’ll continue to sup- On the other hand, Lively, who gave out of the brand’s San Francisco headquarters. port Be Delicious and Cashmere Mist.” bottles of DKNY Men to her father and She added that Lauder will also maintain brother, would rather support an exist- BLOOMIE’S SHAVE: Bloomingdale’s has partnered with the Art of Shaving to open the men’s business. ing scent than do her own fragrance from a shop-in-shop concept by the men’s grooming brand at the retailer’s 59th Street While she refused to discuss sales fig- scratch. “I still feel like I’m learning so flagship. The 200-square-foot, first-floor space is slated to open March 19. Plans ures, industry sources estimated that much,” she said. “Gossip Girl” has a hia- call for the “barber spa” concept to offer shaving services and have two barber Karan’s fragrance business was $500 mil- tus in shooting upcoming and she said she chairs, two shampoo sinks and two master barbers manning the space. lion at retail six months ago. Those sourc- would do a movie if there was a script that es added that the economic doldrums she liked. If not: “We’ll see. I might just go GOING GREEN: Tigi is launching its first eco-friendly hair care line, Love Peace & have taken a toll on the business but by to Africa with UNICEF and go to cooking the Planet, due out in salons this May. The range, which industry sources estimate next year, the business could again reach school in Florence.” will generate $20 million in sales for the year, targets all hair types and contains the $500 million mark. Earlier in the day, Vanderloo made a natural and partially organic ingredients to address hair nourishment, moisture Aside from appearing in “Lipstick personal appearance at Bloomingdale’s and protection. Love Peace & the Planet includes a moisturizing shampoo and Jungle,” Raver said she will also star in 59th Street flagship to promote the DKNY conditioner, which will retail for $19.95, and a leave-in conditioner, retailing for a Washington-based drama called “Inside Men fragrance, which was launched late $18.95. The six-item line also includes a texturizer and hair spray, which will retail the Box,” which is modeled after a televi- last month at Macy’s. Industry sources esti- for $22.95, and a volumizer retailing for $18.95. sion news station. mate the appearance drove sales of Karan’s “Ugly Betty’s” Newton, who is “a huge scents past the $4,000 mark on the day. OLAY AD: The U.K.’s Advertising Standards Authority has found a wrinkle in an ad shown here for Olay Regenerist. After receiving 46 complaints regarding T.V. spots for the antiaging cream, the watchdog ruled the ad, which featured beauty journalist Eve Cameron, must not be broadcast again in its current form. Upheld complaints included implied comparisons between the cream’s antiaging results and those of cosmetic injections, as well as insufficient evidence to support claims made about the antiaging effects of A Regenerist cream. pentapeptides.

MARY KAY MOVE: Mary Kay Inc. has named Sheryl Adkins-Green vice president of brand development, a position that calls for her to lead the company’s global product strategy. Adkins-Green, who will work out of the company’s Dallas headquarters, will oversee the development of 10 different Mary Kay product lines. Prior to joining Mary Kay, Adkins-Green was general manager and vice president of Pro Line International, Alberto-Culver Co.’s multicultural beauty business unit.

PACKAGE PARTY: The Pratt Institute and Luxe Pack will celebrate the 20th anniversary of the Marc Rosen Scholarship for Graduate Package Design at its annual Art of Packaging Award dinner at the University Club on April 21. The black-tie affair will pay tribute to past honorees — including industry brass from Avon, Estée Lauder, Clinique and Lancôme. Proceeds from the party are expected to generate more than $300,000 for the Marc Rosen Scholarship, which funds four annual merit-based scholarships to Pratt for fragrance packaging design. “It’s very emotional for me to have this evening,” said packaging designer Rosen, who noted A rendering of the store. that the yearly dinners have raised $1.5 million since their inception 14 years ago.

NEW SCRUB: The name of a new facial skin care item from Men’s grooming brand Billy Jealousy, called Liquid Sand, may conjure up thoughts of the beach or even Chanel to Open Beauty Shop in Tokyo quicksand — but the item is simply an alpha-hydroxy-acid-infused facial scrub. And rather than using sand as an exfoliating agent, the quirky brand uses soft TOKYO — Next month Chanel will unveil its first street-front store dedicated entirely to grains of polyethylene in the product. Liquid Sand, which comes in an 8-oz. tube fragrance and beauty products on the ground level of a new glass tower in the trendy for $24, also employs sunflower as a moisturizer and morus nigra leaf extract as Aoyama district here. an antioxidant. Aside from its own web site, the Billy Jealousy brand is available at Peter Marino designed the interiors in signature Chanel hues of white, black and Sephora, Bloomingdale’s, Nordstrom and Barneys New York. beige. The 1,506-square-foot store, which will open April 24, will carry the brand’s full range of fragrance, cosmetics and skin care items, as well as a limited edition range of AVON CALLING: Avon chairman and CEO Andrea Jung joined global ambassador products exclusive to the store. Reese Witherspoon in Washington Tuesday to reveal the Women’s Empowerment Peter Philips, the global creative director of Chanel makeup, developed a special cap- Necklace, a new global fund-raising product from the direct sales giant, designed sule collection for the Tokyo boutique consisting of a face powder, lip gloss and nail polish to raise awareness about global violence against women. Launched as a companion in pastel shades of pink, white, blue and gold. Philips designed the palette with sparkling, piece to Avon’s 2008 Women’s Empowerment Bracelet, which has so far raised fresh pastels, which reminded him of twinkling stars and is aimed at satisfying the tastes $4 million, the necklace will be available in 45 Avon markets for $5, starting this of young Tokyo women for bold, glittering, luxurious hues. month. “I am confident that this new Empowerment Necklace will raise many — Amanda Kaiser millions more to help save lives worldwide,” said Witherspoon. WWD, FRIDAY, MARCH 6, 2009 11

The Beauty Report WWD.COM Niche Beauty Brands Navigate Economic Realities

By Molly Prior the device. “Her decisions are taking longer. They are more considered.” Select items The rules of the game for beauty firms Stimson said the economy has not put a crimp on from Kevyn have changed. research and development, but acknowledged it has Aucoin The beleaguered economy has intensified the David changed the way Tria goes to market and reaches the Beauty. and Goliath predicament many emerging beauty com- consumer. “In the old economy, we would have looked panies face as they work to grow their presence at re- at doing print ads in beauty books. Now we are taking tail and their bottom line. To make matters worse, a closer look at our product benefits and the role they Goliath — in this case, department stores — is play in consumers’ lives. We are doing programs ailing and often in no shape to add brands that are more insightful and relevant,” he said. to the mix, as it works to prune invento- To that end, in late February, Tria inked a ries. A number of retailers are ordering adding deal with swimsuit designer Ashley Paige, a more limited assortment of products, and is looking to collaborate with more making it difficult for an emerging emerging designers. “Tria offers a body brand to adequately introduce itself beauty benefit…our product allows you to to consumers. For beauty companies, enjoy their product more,” he said. the new set of economic realities — Reflecting on the economic hurdles, contracting consumer spending and a Stimson said, “We as an industry have al- climbing savings rate — has heightened ways talked about the importance of differ- the need for stop-the-shopper-in-her- beauty entiation and product benefits. These things tracks innovation and a firm balance sheet,up were always important, but the reality is today said industry watchers. they are the difference between thriving and not “From a retailer’s prospective, we’re hungrier making it through tough times.” than ever for new and innovative ideas,” said Claudia Tria, which is owned by a number of venture capital No one is exempt,” she said. “Right now there is a lot Lucas, senior vice president and general merchandise firms, is available in about 60 doors, including Bergdorf of supply and very little demand.” She said the brand manager of beauty for Henri Bendel. “If you have a Goodman, Studio at Fred Segal, Bliss and on QVC. is working to further strengthen its relationships with compelling story and product, there are opportuni- retailers and suppliers. “If one shuts off, everyone ties in the specialty space.” She also declared that SUKI ADVANCED ORGANIC SCIENCE will feel it…everyone is working through these times. many retailers have sharpened their response time, a Suki Kramer, president, founder and formulator, has It forces you to analyze your business,” she said. The trait that Bendel’s has long prided itself on. “If we see broadened the reach of her eco-conscious beauty brand ­— which also is sold in Bergdorf Goodman, something good we can jump on it,” said Lucas. For in- line from the natural market to the more luxury tier, Henri Bendel and on Beauty.com — has ramped up its stance, recently after meeting with makeup artist Mike hosting trunk shows at Henri Bendel and courting inventory as it has expanded distribution and is gear- Potter, founder of Knock Out Cosmetics, and surveying boutiques like Space NK. Last year, the brand grew ing up for spring and fall launches. his company’s ultramatte nail lacquers called Flatte, by 50 percent to reach about $4 million in wholesale Lucas had the Black and Powder (white) shades in the sales. It also upped its door count to 600 from 500. “We POP BEAUTY store the following week, taking full advantage of the If retailers want innovation, Pop Beauty founder Sara percolating press buzz. “We’re increasingly agile and Strand says she has got plenty. She’s quick to point we move quickly. If I see something [Thursday], we can out the line’s tag line is “Shakeup Your Makeup.” The have it in the store on Monday or Tuesday.” Swedish-born makeup artist launched her line in London Bendel’s has been the launching pad for a host of in 2002 with the aim of “bridging the gap between ultra now-established lines, namely MAC Cosmetics in the high-end and very new and low-end, low-quality make- U.S., Trish McAvoy, Kevyn Aucoin Beauty and Benefit up.” She said, “I wanted to bring back the fun, but still Cosmetics. In Lucas’ view, the surest path to success is keep the quality.” Pop, owned by Strand’s older sister and an involved creator. “Trish McAvoy used to come to our makeup entrepreneur Petra Strand, entered the U.S. in store and peddle her products. Nobody is more pas- 2004 and established a headquarters in Los Angeles this sionate about the brand than the creator,” said Lucas. year. The brand now generates $7 million in wholesale In good times, “There were no barriers to entry” said revenue across about 400 doors in the U.K. and U.S. Jani Friedman, a managing director of the Demeter Here, the line is sold on QVC, in Ulta and in CVS Group, a boutique investment banking firm, adding beau- Pharmacy’s upscale beauty concept called Beauty 360. ty start-ups could simply link arms with a contract manu- Suki’s professional range. “It’s a great concept,” said Strand, referring to Beauty facturer. “But all those brands aren’t going to make it.” 360. “CVS is somewhere you wouldn’t normally go for Citing Euromonitor International data, Friedman are in the growth phase of our development,” said niche, exclusive brands. But Beauty 360 feels complete- said the U.S. beauty industry totaled $51.3 billion in Kramer, who earlier this week launched her line in se- ly different than the CVS store.” In her view, the laggard 2007. Euromonitor forecasts that figure will drop by $1 lect Harvey Nichols stores, and this month will begin economy gives Pop a “great leap ahead” because of the billion to $50.3 billion by 2012. Friedman is advising rolling out to Boots in the U.K. Kramer, who owns the brand’s price points. Upcoming products include the her clients to tap into key trend areas, namely natu- company, acknowledged, “I am cautious when thinking $26 Face Magnet Primer and the $32 Clutch Collection, ral, cosmeceuticals or ethnic-focused product; part- about new products and investments.” She is redesign- or kits of coordinated colors for eyes, cheeks and lips. ner with the well-positioned retail partners, including ing the Suki color cosmetics range, shifting to more direct-to-consumer and specialty on the prestige side purse-friendly sized compacts and improved formulas. and in mass, drugstores, and to look at expansion strat- Asked how she gauges an investments’ return, she said, egies through a financial lens. “Initially, I go with my gut and with what consumers Below, a handful of smaller-size beauty firms, each of want most. That’s how I originally launched the brand which cater to different segments of the market, share and that’s what I think is true entrepreneurship: cre- with WWD how they are navigating choppier seas. ating something that doesn’t exist. Clean makeup is something that people are clamoring for.” TRIA BEAUTY Kramer said she has seen retailers decrease their Tria Laser Hair Removal orders. But as the wholesale business has dipped System was rolling out to re- somewhat, Suki’s e-commerce business has grown, off- tailers just as the floor fell setting the decline in retail orders. As for what con- out from under Wall Street sumers are buying, Kramer said, “They are buying in mid-September. Tria, treatment products for conditions, like rosacea and the first handheld, at-home aging. People are buying what they really need and laser hair-removal device what is vital, especially for the face.” cleared by the U.S. Food and Drug Administration, KEVYN AUCOIN BEAUTY came with a high price tag As a privately held company, Kevyn Aucoin has not re- of $995. Last month, it was acted aggressively to the downturn, said president and lowered to $795. Referring chief executive officer Cheri Murray. Isidore Aucoin, to the price point, Drake the father of the late founder, is the majority share- Stimson, executive vice holder of the brand, which expects to reach $3.5 mil- president of sales and mar- lion in wholesale sales this year, up from $3 million keting for Tria Beauty, said, in 2008. Murray, who helped launch Bobbi Brown in “Certainly, everyone was the Nineties, stressed Kevyn Aucoin Beauty is focused initially concerned about on maintaining limited distribution, and is currently the price. The consumer is The Tria laser hair-removal sold in about 131 domestic doors and 29 international still buying, but she has to device. doors. In September, it rolled out to 30 Sephora doors, be more confident than ever and is in talks with a department store retailer. Murray before about product benefits.” acknowledged tightened credit markets have affected Pop Beauty’s Sara He said on the beauty floor of Bergdorf Goodman, everyone. The brand also felt the brunt of the woes Strand in CVS’ brand executives have noticed that many women in- of one of its retail partners, namely Neiman Marcus. Beauty 360 store.

troduced to Tria return a few weeks later to purchase “Neiman Marcus’ turmoil last fall has had an impact. Samperton Kyle photo by Junior (left)

12 WWD, FRIDAY, MARCH 6, 2009 WWD.COM Coalition Warns of Job Losses From Free Choice Union Bill By Kristi Ellis obama was a co-sponsor of the bill when he was in to automatically certify it and would stiffen penalties the senate. against employers that illegally fire or discriminate a coalitioN oF retailers, shoppiNg ceNter the alliance to save main street Jobs, which in- against workers for union organizing. it would permit owners and developers warned thursday of major job cludes the retail industry leaders association and the employers and employees to refer bargaining to me- losses if congress passes a bill that would make it easier international council of shopping centers, commis- diation and, if necessary, binding arbitration should for workers to join a union. sioned a study that projects job losses of as much as they be unable to agree on a first contract within 90 But president obama and Vice president Joe Biden 600,000 in 2010 if 1.5 million union jobs are created. days. a federal arbitrator would then establish a two- reiterated their support for the legislation that has the author of the study, economist anne layne- year contract. become a political flash point pitting organized labor Farrar, said companies react to higher labor costs as- Business opponents said the proposal would against the business community during the worst U.s. sociated with unionization by relocating, sourcing more eliminate management’s ability to argue against recession in decades. overseas, laying off workers and passing on price in- unionization by abolishing secret-ballot elections. “as we confront this crisis and work to provide creases to consumers. the report contends that every 3 executives also oppose the provision that gives con- health care to every american, rebuild our nation’s percentage points gained in union membership would trol of a contract to a third-party arbitrator in the infrastructure, move toward a clean energy economy result in a 1 percentage point rise in the unemployment event of an impasse. and pass the employee Free choice act, i want you rate in the following year. the unemployment rate rose in a speech at the aFl-cio meeting on thursday, to know that you will always have a seat at the table,” to 7.6 percent in January and is expected to spike again Biden said: “the legal industry spends hundreds of obama said in a videotape message played tuesday in February. millions of dollars exclusively in an effort to block at the opening session of aFl-cio annual meeting in the employee Free choice act would allow a ma- workers from pursuing their legal rights, from unions miami Beach. jority of workers who sign a card in support of a union being able to get collective bargaining agreements.”

advertisement Dillard’s Posts Wellness Takes Center Stage $149.3M Loss BEAUTY INSIDE & OUT at Cosmoprof Spa By Vicki M. Young NoNcash asset impair- ment and store closure charges “Beauty is truth, truth beauty” the poet threw Dillard’s inc. to a nearly John Keats famously said, and the World-class Opportunity to Listen & Learn: $150 million loss in the fourth truth is that the world needs beauty to- quarter. day more than ever. Fortunately, there’s the company reported late Cosmoprof Spa Symposium thursday that for the three Cosmoprof to help beauty profession- months ended Jan. 31 the loss To make sure Cosmoprof Spa attendees gain the knowledge they need to maximize als learn how to give the public what it was $149.3 million, or $2.03 a wants and make money doing it. their own businesses, event organizers are also offering Cosmoprof Spa Symposium – share, against income of $47.3 The world’s most important international a strategic forum with seminars, workshops and meetings to keep beauty professionals million, or 63 cents, in the same beauty event, Cosmoprof will take place April up-to-date about new trends in the sector. The two-day Spa Symposium will include: year-ago quarter. most of the loss came from 2–6 in the Fairground District of Bologna, Italy. Redefining the European Spa Market: Building a Solid Spa Enterprise from As it has since 1967, Cosmoprof will offer ser- pretax charges of $177.9 mil- Past, Present & Future Concept to Design lion for asset impairments and vices to help exhibitors and buyers maximize European Spa Industry Highlights: Creating the Iconic Spa Design & Green Concepts store closures and $2.9 million Success and Failure Case Analyses opportunities. This year, Cosmoprof will also april 4, 10:30 am – 12:30 pm for losses and remediation ex- april 3, 10:30 am – 12:30 pm put the world of professional beauty on cen- speakers: simone micheli (simone micheli architectural penses related to hurricane ike. ter stage at Cosmoprof Spa, which will bring speakers: Jacqueline Le sueur (Pret a spa, singapore), Hero, italy), Jean-Paul Blisset (syntax, UK), Brett in comparison, the prior year’s together the most prestigious international Jean-Paul Blisset (syntax, UK), rolf e. Bronnimann Blumenthal (Gensler, Usa), Jennifer Lynn (the Harmon quarter had pretax asset impair- firms doing business in the Spa & Salon market. (sH swiss Hospitality Group, switzerland) Hotel, spa & residences, Lv Usa) ment and store closure charges of $16.1 million and an income Over 400 exhibiting companies specializing in Spa As a Business Model Road Map to Profits tax benefit of $10.3 million. professional beauty will showcase innovative The European Hotel Industry’s Challenges Planning Ahead: A Guide for Today’s Entrepreneurial excluding special items, products from across all corners of the world. Faced to See On-Site Spa as a Profit Center Aesthetician, Tomorrow’s Successful Business Owner Dillard’s had a loss of 31 cents Truth be told, Cosmoprof promises to april 3, 2:30 am – 4:30 pm april 4, 2:30 am – 4:30 pm a share in the most recent quarter and net income of 62 deliver the business solutions, product ideas and speakers: ray F. iunius & stefan Fraenkel (ecole speakers: amy Goller Keller (Wellness & Beauty cents a share in its year-ago knowledge professional beauty decision-makers Hotelière de Lausanne, switzerland), mindy terry Consulting, italy), salvatore Picucci (PicoWellness, counterpart. need to ensure that 2009 – and beyond – is as (Creative spa Concept, Usa), andrew Gibson italy), ronald Jean (isCG, Canada), Jean-eric Knecht (mandarin Oriental Hotel Group, Hong Kong) (elégance spa Concept & academie, France) total revenues fell 5.7 per- beautiful as possible. cent to $2.08 billion from $2.21 billion. that includes a sales drop of 5.7 percent to $2.04 bil- lion from $2.16 billion and a comparable-store sales decline Hair Masters: Art, Entertainment & Supreme Talent on Stage. Tribu-te Show of 8 percent. “our extensive cost reduc- tion measures resulted in a $67.3 million savings but were not enough to offset the sig- nificant declines in sales and gross margin that we experi- enced during the quarter,” said William Dillard 2nd, chief exec- utive officer. “We remain com- Angelo Seminara Trevor Sorbie Mark Hayes Jean-Luc Minetti Tim Hartley Robert Cromeans mitted to conserving our cash, managing our inventory, reduc- ing our expenses and improving For a change of pace that’s still packed a blend of technical workshop and traditional Sassoon, Jean-Luc Minetti for Alexandre de our merchandise assortments to with tips and helpful hints, hair professional show that’s powered by Cosmoprof Worldwide Paris, Tim Hartley and Robert Cromeans. emerge a stronger competitor in attendees won’t want to miss the Tribu-te Bologna and Seven Publications, publisher of For complete details about Cosmoprof, the long term.” Show on Sunday, April 5 at 7:30 pm. Tribu-te magazine. Don’t miss the chance to the Cosmoprof Spa Symposium and Tribu- For the year, the loss was The artistic event of Cosmoprof, Tribu-te witness the styling techniques of Angelo Sem- te Show, visit www.cosmoprof.com to down- $241.1 million, or $3.25 a di- features six of the world’s leading hairstylists in inara & Trevor Sorbie, Mark Hayes for Vidal load a brochure. luted share, against income of $53.8 million, or 68 cents, in 2007. excluding special items, the loss last year was $1.56 a di- luted share versus net income of 55 cents in the prior period. revenues fell 5.2 percent to $6.99 billion from $7.37 billion. the company said it owns 86 percent of its total store square footage, and that total maturi- ties of long-term debt in 2009 and 2010 combined are less than $26 million. WWD, FRIDAY, MARCH 6, 2009 13 WWD.COM Media/Advertising MEMO PAD EVERYBODY’S DOING IT: After a much tougher-than-feared first quarter, almost every PDAs. Instead, Hearst will ask staffers to purchase their own phones and give them a stipend magazine publisher is going back in and cutting its 2009 budget again. (According to toward the hardware, as well as a monthly allowance toward their bill. — Stephanie D. Smith Media Industry Newsletter, advertising in beauty and fashion titles alone fell more than 20 percent during the first three months of the year.) RDA’S NEW ADVISERS: Earlier this week, it was reported Reader’s Digest Association had hired This week, Hachette Filipacchi Media and Rodale realigned their sales staffs and law firm Kirkland & Ellis to explore restructuring options, including a possible bankruptcy consolidated some positions in order to find efficiencies within their rosters, while Condé filing. On Thursday, Mary Berner, RDA’s president and chief executive officer, confirmed the Nast (owner of WWD) and Hearst are also making further adjustments. move, but denied the publisher is mulling bankruptcy. In addition to Kirkland & Ellis, she At Condé Nast, insiders say all publishers have been asked to show how they might cut said the company has hired Miller Buckfire to advise on a wide range of restructuring and up to 10 percent from their overall budgets, although no specific targets have been set. This financing issues. “They will assist the company in staying ahead of the problems in the market follows a company-wide mandate in November that required each title to trim 5 percent of its by exploring strategic initiatives, including (but not limited to) raising additional capital and overhead and 5 percent from head count. Additionally, Condé Nast has instated a company- easing our debt burden,” said Berner. She added second-quarter fiscal 2009 earnings were wide wage freeze and has suspended the tuition reimbursement benefit for employees. down versus last year, but RDA continues to meet its debt covenants and “in no way are To meet the 10 percent goal, most publishers are expected to spend less on events, we in default under our financing arrangements.” In a conference call to lenders last week, travel and other areas. But observers speculate further layoffs could come in certain chief financial officer Tom Williams explained the company expects to achieve $50 million in departments, including Condé Nast Media Group, which is not producing two of its biggest additional second-half fiscal 2009 EBITDA from cost saving initiatives. “…We believe we are programs, Fashion Rocks and Movies Rocks, this year. better positioned than most to appeal to customers during a steep recession,” Berner added. A Condé Nast spokeswoman declined comment, but chief executive officer Chuck And while the company is launching three magazines this year, it is closing two others: Townsend sent a memo to employees Thursday. “Unavoidably, as the downturn extends, we Backyard Living and Cooking for 2. Both titles were produced by teams and no positions have to make additional difficult decisions to manage costs and ensure our financial well- will be eliminated as a result. — Amy Wicks being,” he wrote. “These decisions involve all of us. We’ll all have to do more with less and accept that some of the benefits and resources that were available to us in robust economic MUSIC TO ITS EARS: LVMH Moët Hennessy Louis Vuitton said Thursday it has settled a lawsuit it times will have to be scaled back — and revisited when the economy and our business brought against Bad Boy Records in which the luxury goods firm accused girl group Danity Kane recover lost ground. The best course of action is for us to prudently and responsibly manage of unauthorized use of its intellectual property. According to LVMH, it filed suit against the Sean our business costs and expenses through these troubled waters, assuring us the opportunity Combs-founded record label, a division of Warner Music Group, in the District Court of Paris last to fully participate in the recovery that lies ahead.” August. LVMH said that as part of the settlement, Bad Boy agreed to remove visual references Meanwhile, over at Hearst, there has been talk of small staff reductions at a few titles, to Louis Vuitton trademarks in Danity Kane’s self-titled album and two videos. The company but insiders say the extent of any future cuts will be far from the “floor-by-floor” ones made said Bad Boy agreed to revise the videos and album in future releases. LVMH did not release the last fall. “How we do business is always evolving, and that includes beefing up in some financial terms of the deal. Warner Music Group did not comment on the settlement. areas and streamlining in others. It’s all about being smart and managing your business This is the second resolution LVMH has reached with a record label on intellectual property efficiently,” a Hearst spokeswoman said. “Unlike many of our competitors, Hearst continues rights issues in recent months. Last August, Sony BMG Music Entertainment agreed to a similar to hire and introduce new products, like Food Network Magazine.” One way the company deal and to pay the luxury company more than $150,000 for its use of LVMH designs in albums has cut costs, according to several insiders, is not to provide employees with cell phones or and videos by artists including Britney Spears, Ruben Studdard and Da Brat. — Matthew Lynch Urban Outfitters’ Net Drops 24.4% Milly to Open Tokyo Flagship By Matthew Lynch rate of markdowns it needed to By Julee Kaplan Coronet, for marketing. clear seasonal inventory contrib- The store was designed by the Tokyo-based Investors steered away uted to the net income decline. Milly is Tokyo bound. D. Brian Architects, which has also designed from Urban Outfitters Inc. stock Fourth-quarter gross margins fell The nine-year-old contemporary sportswear stores for brands such as APC, Costume Thursday after it said higher mark- about 550 basis points to 34 percent brand is set to open its first freestanding store, National and Marc Jacobs. The Milly space downs led to lower fourth-quarter from 39.6 percent a year ago. On a a flagship, in Tokyo today. The 850-square-foot was created to look like a Parisian apartment earnings. mid-morning call with investors, boutique is in the city’s Aoyama area, at the accented with etched and faceted mirrors, In the three months ended Jan. chief executive officer Glen Senk Omotesando Hills shopping mall, where the vintage fixtures and plush signature Milly 31, profits at the Philadelphia-based said the company was not pleased New York-based label’s neighbors are high- pink carpeting. specialty store group fell 24.4 per- with the slide in margins. end stores such as Yves Oshrin said he has cent to $40.5 million, or 24 cents a “But we responded quickly to Saint Laurent, Harry A rendering of the first Milly store, put a freestanding store diluted share, from $53.6 million, or the change in environment and are Winston, Jimmy Choo opening today in Tokyo. in Manhattan on hold. 32 cents a share, a year ago. pleased with the company’s com- and Dolce & Gabbana. “We thought we Shares of the operator of Urban parable inventory position, down “We have a strategic would have our New Outfitters, Anthropologie and Free 13 percent at quarter’s end,” Senk plan in place to grow York store open by People dropped $1.16, or 7.3 per- continued. “Frankly, I’m not sure the the business through- now, but because of the cent, to $14.81 Thursday as EPS merchant teams or our supplier base out Japan, so a store economy, we decided fell 4 cents short of analysts’ ex- could have reacted any better to the in Tokyo was a natural to hold off a bit,” he pectations. abrupt change in business. They next step,” said Andrew said. “Of course if we Sales in the quarter rose 9.2 per- turned on a dime and repositioned the Oshrin, president and came across our ideal cent to $508.1 million from $465.4 inventory in less than three months.” chief executive officer, location with a lease we million in the comparable period The company said it plans to noting that the compa- can’t pass up, we will of the prior year. Comparable-store open 42 to 45 stores in fiscal 2010, ny’s wholesale business jump on it. But it will sales declined 1 percent, with a 3 down from the 52 it was planning in Tokyo is robust and sells to about 50 stores. have to be perfect for our needs.” percent rise at Urban Outfitters and when it released fourth-quarter “We are well-positioned at wholesale in Tokyo Designed by Oshrin’s wife, Michelle Smith, offset by declines of 6 percent and sales figures in early February. and growing into more cities in Japan, but we Milly has secured a strong presence in the 13 percent at Anthropologie and For all of fiscal 2009, profits at are looking for the store to be a destination contemporary market, selling its signature Free People, respectively. Direct- Urban Outfitters rose 24.4 percent where customers can get the full Milly experi- colorful printed collection in department to-consumer sales in the quarter to $199.4 million, or $1.17 a share, ence and even get some exclusive product.” and specialty stores worldwide, including shot up 20.4 percent to $87.8 mil- from $160.2 million, or 94 cents a The exclusives include a small collection Bloomingdale’s, Saks Fifth Avenue, Bergdorf lion, while wholesale volume crept share, in the previous 12 months. of cocktail dresses as well as some other Goodman, Neiman Marcus, Harrods and up 1.1 percent to $24 million. Sales in the year rose 21.7 percent smaller items such as a candle sold in one- Selfridges. Only about 4 percent of Milly’s The company said the higher to $1.83 billion from $1.51 billion. of-a-kind packaging, he said. Other than the overall business is in Japan, but Oshrin said select exclusives, the Milly collection sold in he expects business to jump about 10 percent Japan is the same product found in the U.S. for the 2009 fiscal year. He estimated the new Oshrin said he has been working with Japan- store would reach about $1 million in retail Textile Shows to Combine Into One based firms Itochu, for distribution, and sales for the fiscal year. By Ross Tucker to take place April 14 to 16. Representatives from Material Material World and the World and the California Market Los Angeles International Textile Center declined comment. UNITE HERE Union Vote Planned for Saturday Show are set to merge, according to Last May, Material World said sources. it would close its New York show, By Liza Casabona and Newark, according to supporters of the Material World, owned by which it had been putting on since dissolution of the merger led by general presi- Atlanta-based Urban Expositions 2005, and heading west. WASHINGTON — Fifteen local chapters of UNITE dent Bruce Raynor. and sponsored by the American The merger comes at a time of HERE have set a vote for Saturday on whether John Wilhelm, president of the hospitality Apparel & Footwear Association, increased competition among trade to disaffiliate from the parent union. division of UNITE HERE who led HERE prior was set to host its first West Coast shows looking to capture a larger The move is the latest development in a to the merger, is opposed to the dissolution. show Sept. 30 through Oct. 2 at the piece of an increasingly impor- struggle for control of the organization be- Wilhelm’s faction represents the majority in Los Angeles Convention Center. tant West Coast market. GlobalTex, tween executives of the two predecessor unions the dispute. At a general executive board meet- Sources said Material World no produced by Dallas-based Market — the Union of Needletrades, Industrial & ing last month, 39 members voted with Wilhelm longer plans to host a show at the Center Management Co., will host Textile Employees and the Hotel Employees against undoing the merger, with 25 board convention center and will in- its first show April 28 to 30 at the & Restaurant Employees International — that members voting in favor. stead merge with the Los Angeles Los Angeles Convention Center. merged to form UNITE HERE in 2004. On Thursday, Raynor called the disaffilia- International Textile Show, which According to MCM, Los Angeles More than 1,000 joint board members, tion action “historic and unprecedented” and is produced and hosted by the produces about $36 billion in tex- representing about 150,000 union workers, said it indicated “just how serious and deep California Market Center. The tile and apparel manufacturing, are expected to be voting throughout the day the rift in our union is.” next edition of the Los Angeles representing 15 percent of the city’s in Atlanta, Baltimore, Dallas, Denver, Los A spokeswoman for Wilhelm declined International Textile show is slated workforce. Angeles, New York, Philadelphia, St. Louis comment. 14 WWD, FRIDAY, MARCH 6, 2009 WWD.COM Buckle Rides High With Eastward Push By Alexandra Steigrad impressive numbers, which controller Buckle has positioned itself as Tom Heacock attributes to an empha- RETAILERS HAVE PLENTY OF GOOD a denim destination. Denim sis on “people and product. The culture explanations for recent declines in same- accounts for a third of here is unique. We really feel that it is a store sales. But The Buckle Inc., which its men’s business. team working toward a common goal.” made jaws drop Thursday with its 21 Employees call each other “team- percent February increase, has diffi culty mates” and their customers “guests,” explaining why it does so well. who are counted on as the forward fl ank The highly successful — but famously of the company’s marketing. low-profi le — fi rm, based in Kearney, “The customer experience is the best Neb., has been a source of wonder dur- marketing,” said Heacock, who admitted ing its recent strong run, but it may be- Buckle relies more on “word of mouth” come a headache for competitors now advertising than anything else. “We don’t as it moves its 391-store fl eet to its most really do radio, print or television.” easterly point yet. Buckle also uses its Web site and Buckle brought its winning formula to extensive e-mails for marketing and New York state for the fi rst time with a unit promotional efforts, which include in Buffalo on Feb. 26 and will arrive in Mays partnering with rock bands like Simple Landing, N.J., just in time for the back-to- Plan and Nickelback, in order to offer school season. With a presence in 40 states, in-store and online promotions that Buckle’s greatest concentration of stores is coincide with the release of their new in the Midwest and Texas and its eastern- albums. A good part of the marketing most presence before this year had been spend also goes to in-store signage and in King of Prussia, Pa. Of the 48 contigu- print materials. ous U.S. states, only New York, New Jersey, Susquehanna’s Filandro attributes Connecticut, Massachusetts, Rhode Island, much of Buckle’s success to the com- New Hampshire, Vermont and Delaware pany’s proactive focus on fashion at a had been missing from its portfolio. time when most retailers are playing At a time when most retailers have ei- defense. ther closed stores or at least halted open- “The uniqueness of their balanced ings, expansion may seem like a bold move, For more on approach on branded and private label but for Buckle, it’s just a “practical ap- the company, apparel, with an emphasis on denim, proach.” At least that’s what its notoriously has been a differentiating factor to their understated chief executive offi cer Dennis see WWD.com. success,” he said. According to Filandro, Nelson said in an interview with WWD. Buckle has become a “denim destina- That seems overly modest for a com- tion” because it is continually testing a pany that on Thursday marked its 30th variety of brands such as Big Star, MEK, consecutive month of comparable-store Lucky Brand and Silver Jeans in-store. sales increases and its 19th consecutive Furthermore, all denim is customized month of double-digit comp advances. for Buckle by vendors, he said, and av- Besides February’s rise, January results erage retail price points range from be- saw a 20.6 percent increase for the fi s- tween $75 to $150, which is “affordable.” cal year ending Jan. 31, along with a 27.8 “They certainly have a knack for percent jump in net sales, to $792 mil- picking the right brands,” said Sterne, lion. The company is scheduled to report Agee & Leach retail analyst Margaret fourth-quarter results Wednesday and, in Whitfi eld, who noted that while Buckle’s the worst retail environment of its exis- target customer is between the ages of tence, is expected to generate earnings 12 and 24, the retailer appeals to shop- of 72 cents a share, according to analysts’ pers up through their late 30s as well. consensus estimates, versus year-ago She also said that because Buckle car- EPS of 63 cents. ries larger sizes such as a men’s size 44, Through the third quarter ending Oct. and it has a variety of styles and fi ts, the 31, net income jumped 51.7 percent to store attracts a broader range of custom- $70.1 million. Driven by higher merchan- ers than other retailers. dise margins and improved leveraging of The fashion mix, which ranges from buying, distribution and occupancy costs, West Coast-inspired brands like Quiksilver, gross margin improved 270 basis points Roxy and Affl iction to branded apparel to 42.1 percent of sales. from Guess, Fossil and Diesel, makes it Despite his company’s success, Nelson diffi cult to pin down who Buckle’s chief said he rarely speaks to the media be- rivals are, according to Nelson. cause he “doesn’t have much to say.” Buckle also has a private label, BKE, “We realize it’s not easy times out whose denim retails between $59 and there. We’re trying to take a conservative $78. Private label accounted for ap- approach,” said Nelson, who added that proximately 25 to 30 percent of sales for when the company sees an opportunity, fi scal 2008, chief fi nancial offi cer Karen it “takes advantage.” Some believe that, Rhoads said in an interview with WWD. with mall vacancies growing by the day, The uniqueness of their balanced approach According to Rhoads, BKE has seen Buckle might take advantage more than “ “some slowing” as a percentage of sales it has in the past. on branded and private label apparel, with an — last year, the company reported pri- It’s certainly in a position to do so. vate label sales were about 30 percent With no debt on the books, and $182.2 emphasis on denim, has been a differentiating — but, overall, it is still growing. The million in cash and investments at the company said that more customers are end of the third quarter, it currently factor to their success. buying branded apparel than private plans to open 22 stores in fi scal 2009, one ” label, and that is what accounts for the more than it launched last year. — Tom Filandro, Susquehanna International Group weaker BKE sales. The company recently added interna- Overall, Buckle’s men’s business, 31 tional shipping to its Web site, but when asked if that market down last fall, the shares — when adjusted for percent of which was derived from denim last year, was indicates Buckle is moving overseas, Nelson said it was dividends and a 3-for-2 stock split last October — have up approximately 26.5 percent through December, while “too early to make comments” on that. declined less than 20 percent in the past year while the women’s, 49 percent from denim, was up 29.5 percent. But the ceo asserted that expansion plans are all part S&P Retail Index has fallen 40 percent. A dollar invested Women’s represents about 55 percent of sales and men’s of a controlled, focused strategy. in Buckle when it went public would be worth over $12 the remainder. During the third quarter, Buckle said He pointed to Buckle’s emphasis on experience and today. On Thursday, followed its robust February results, average price points for the men’s and women’s busi- company culture, noting it doesn’t enter markets unless shares advanced $1.78, or 8.1 percent, to close at $23.78 ness increased 11.5 percent to $50.10, and 2 percent to one of its trained managers will move to the new loca- while the S&P Retail Index contracted 3.6 percent. $43.75, respectively, an accomplishment during a period tion. All top management has been with the company Buckle’s bread and butter are prime locations in of price slashing. But the company said the increase in for at least 25 years, and all of the company’s district regional malls and lifestyle shopping centers in areas price is a function of brand introductions, or the addi- managers have about 20 years of Buckle experience. with a population of approximately 300,000, Nelson tion of more details to existing apparel, not necessarily Additionally, half of the retailer’s store managers have said, adding the move east is “consistent with what we higher initial markups. been managing with Buckle for more than three years. always do.” How far can the company go? The company was founded as Mills Clothing, a men’s It’s that mentality that has the retail world wonder- “I don’t think that long term,” Nelson said. “We offer store in Kearney, just over 60 years ago and entered the ing what exactly is working for Buckle. What is the se- a good shopping environment for the guest. We don’t realm of casual sportswear with the acquisition of Brass cret to its success? worry about the rest. We take it as it comes.” Buckle in 1967. It became The Buckle in 1991 and went “I don’t know if there’s any one answer,” Nelson said. Perhaps this Zen-like approach is Buckle’s key to public in 1992, moving to the New York Stock Exchange “Dennis will probably say, ‘Well, we go to work every- success, but when pressed, Nelson’s answer changed in 1997. day,’” Thomas Filandro, a retail analyst at Susquehanna slightly. It has served investors well, with the stock more than International Group, said. “I don’t know what makes us so successful,” he said, doubling in the past fi ve years and, despite following the Whatever it is, it has helped the company churn out “and I’m not sure if I knew, I’d say.” WWD, FRIDAY, MARCH 6, 2009 15 WWD.COM FASHION SCOOPS OLIVIER TWIST: With Louis Vuitton’s Peter GREEN SLEEVES: Amid a sea of French actress Josephine de la Baume Copping signed on to take the top design slot black-clad editors, it was easy to is recording her first album with a at Nina Ricci, what will incumbent Olivier spot Salma Hayek at Balenciaga. band called Sing Tank. “It’s kind Theyskens do next? According to sources, “He loves me in green,” she said, of soft rock,” she said. Lou Doillon, the Belgian wunderkind is in negotiations referring to her plunging jersey top meanwhile, said she needs to move on with Ricci to exit the company before his and motioning toward her new hubby, from independent movies and make contract expires in October — and mulling PPR honcho François-Henri Pinault. a blockbuster if she’s to realize her the relaunch of his signature brand, which Hayek, who just wrapped shooting dream of opening a concept store in he put on hiatus in 2003. It is understood he “Cirque du Freak,” based on the Paris. “If I keep on making the same bought back the rights to his trademark from best-selling series of teen novels, movies, I’ll have a shop in 40 years,” a former business partner. Theyskens and said she’s in negotiations for her next Doillon joked. Ricci have so far declined all comment on movie project. “It’s a very big family Also sitting front row was Cartier their estranged relationship. comedy,” she said. More wrenching chief Bernard Fornas, who said he likes roles have been the order of the to keep an eye on creative talent. day for Charlotte Gainsbourg. “I just finished a film with Lars von Trier,” AWARDS SCHEDULE: Mark your she said. The title? “ ‘Antichrist,’” calendars — the Council of Fashion she deadpanned. Gainsbourg is also Leigh Lezark with Sanna Saastamoinen-Barrois and Lou Doillon. Designers of America has confirmed in “Persécution,” currently filming in the 2009 CFDA Fashion Awards Paris. Petite actress Mélanie Laurent, having woman, recalling a New York DJ gig where are scheduled for June 15, and will move just wrapped Quentin Tarantino’s “Inglourious Ditto stripped down to her undies to sing. to Lincoln Center’s Alice Tully Hall, after Basterds,” said she’s headed to New York and Ditto said she plans to keep her clothes seven years at the New York Public Library. will test her pipes with her first album, with on this week, however, especially at her This confirms a WWD report on March 2. Lou Reed’s manager Tom Sarig. “It’s rock, but performance for Fendi next week, for which Comparable to the 2008 awards, when the not rock rock,” she said. Meanwhile, singer- she’ll don a custom-made dress. For the Ricci ceremony was conducted at the library and songwriter Camille Dalmais, better known as show, the singer wore one of her favorite followed by a dinner at Bryant Park Grill, just Camille, said she’s writing music for her frocks by Charles Anastase. “It’s a sketch of this year’s awards will be handed out in a first soundtrack. “It’s a film about Man Ray,” a snake being eaten by a weasel,” said Ditto ceremony at Alice Tully Hall’s theater space, she said. — who turned vegetarian two weeks ago — of followed by a dinner in the theater lobby. its illustration. “Have some mercy,” Milla According to CFDA executive director Steven GOSSIP GIRL: Beth Ditto’s arrival at Nina Jovovich scolded snap-happy photographers Kolb, the move will allow for a larger audience. François- Ricci Thursday night sent several guests after the show. The actress is next playing Swarovski will once again be underwriting Henri into a tizzy, including Leigh Lezark of The a stripper in William H. Macy’s movie “Keep the awards. Nomination ballots are due next Pinault and Misshapes, who went on to DJ at Jade Jagger’s Coming Back.” Between shooting “A Night Wednesday, and the nominees will be unveiled Salma Hayek party after the show. “I love the way she at the Opera” in New York, where she plays at a March 16 party hosted by Swarovski at

PHOTOS BY STEPHANE FEUGERE STEPHANE BY PHOTOS bares all,” cooed Lezark of The Gossip front one of the main character’s many dates, Rockefeller Center’s Rooftop Gardens.

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