Pinault: Gucci's Worth It/2 Sourcing Horizons/9-21
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PINAULT: GUCCI’S WORTH IT/2 SOURCING HORIZONS/9-21 WWDWomen’s Wear Daily • The Retailers’TUESDAY Daily Newspaper • May 18, 2004 • $2.00 Ready-to-Wear/Textiles The Graduate NEW YORK — The pomp, circumstance and senior anxiety are over and it’s time to find a job. For the past few weeks, WWD has been attending fashion shows featuring student work from design schools around the country, and we’ve found that the future is indeed bright for the industry. Here, from Ashleigh Verrier, one of two designers of the year at Parsons School of Design, a velveteen coat, satin skirt and chiffon blouse. An intern at Proenza Schouler, she says of her post-grad plans, “I’d love to start my own company but I know that I have to respect the necessary evolution to get there.” For more from the student runways, see pages 6 and 7. Red Lights Flashing: Kmart Net Hits $93M, But Hazards Lie Ahead By Vicki M. Young NEW YORK — When it comes to Kmart, earnings are better than sales — at least to Wall Street. Well, that’s true for now before gas prices head toward $3 per gallon and potentially keep strapped shoppers out of Kmart — and perhaps Wal-Mart, Target and other stores, too. Despite a steep decline in same-store and total sales, investors keyed in on Kmart Holding Corp.’s second consecutive quarter of profits. Shares of the discount retailer jumped 9.8 percent from the prior close to end Monday at See Kmart, Page24 PHOTO BY TALAYA CENTENO TALAYA PHOTO BY 2 WWD, TUESDAY, MAY 18, 2004 WWDTUESDAY Pinault Defends Gucci Price Ready-to-Wear/Textiles GENERAL MIAMI — François-Henri Pi- times revenues, according to sev- Despite a steep decline in same-store and total sales, investors keyed in nault, chairman of the Artemis eral analysts. on Kmart’s second consecutive profitable quarter to boost its stock. Group, doesn’t think he over- In a Securities and Exchange 1 paid for Gucci Group — even at Commission filing last month, François-Henri Pinault, chairman of the Artemis Group, doesn’t think he $9 billion. Gucci told shareholders the in- 2 overpaid for Gucci Group, even at $9 billion, and is bullish on its future. During a question-and-an- dependent directors found the Limited Brands Inc. posted slightly weaker earnings for the first quarter as swer session at last week’s offer price “was fair from a fi- rising sales were nullified by lower margins and higher costs. WWD Beauty CEO Summit here, nancial point of view to the pub- 2 Pinault insisted the price was a lic shareholders as a whole.” Lanvin creative director Alber Elbaz chalked up $700,000 in fall orders reasonable one and Artemis The company said in the fil- 3 during a trunk show at Barneys in Beverly Hills, a record for the store. didn’t overpay. ing that “there have been no RTW: Art galleries, flea markets and museums are among the spots that “Well, you could say $9 billion, other firm offers by third parties but I would prefer 7.2 billion to acquire Gucci within the last 22 designers are showing their wares to distinguish themselves from the pack. euros,” Pinault said. “Of course, two years with which to compare Krizia signed a seven-year licensing pact with Italian watchmaker Alvea to it’s a very fair price. When you the offer.” 23 produce and distribute Krizia-branded watch lines for women and men. consider the real growth poten- The independent directors tial of the brands inside the told Gucci’s management they Gucci Group, it’s a really fair were of “the view that the best EYE price. It’s also very consistent measure of Gucci’s value would The actresses wore white at the Cannes Film Festival, which runs through with the industry valuation mul- be based on the continuing opera- 4 Sunday…Rachel McAdams’ “hallelujah moments”…a seaside scoop. tiple right now, so yes, I would do tion of Gucci as a going concern.” it over again.” That means the book value or Pinault is bullish about Guc- the liquidation value is not “a FASHION ci’s prospects, saying that “for the meaningful measure of the fair There’s no place like a fashion school to spawn design talent, as evidenced next three to four years, the po- market value of the shares,” the 6 by the recent spate of student runway shows. tential growth of the Gucci Group firm said in the SEC filing, will be to deliver double-digit growth for [Pinault-Printemps- Sourcing Horizons appears as a special section on pages 9-21. Redoute, Gucci’s parent], I’m There won’t be big acquisitions in the sure of that. There won’t be big “ Classified Advertisements ..................................................................26-27 acquisitions in the next three to next three to four years.…We have the four years. You know, we have the To e-mail reporters and editors at WWD, the address is potential to almost double the potential to almost double the size of size of the Gucci Group within [email protected], using the individual’s name. the next three to five years — in- the Gucci Group within the next three WOMEN’S WEAR DAILY IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLICATIONS, INC. COPYRIGHT ©2004 ternal growth.” FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. to five years — internal growth. VOLUME 187, NO. 104. WWD (ISSN # 0149-5380) is published daily except Saturdays, Sundays and holidays, with one additional Earlier this month, Gucci issue in January, May, June and November; two additional issues in February, April, September, October and December; and three Group NV forecast revenues to — François-Henri Pinault, Artemis” Group additional issues in March and August, by Fairchild Publications, Inc., a subsidiary of Advance Publications, Inc. PRINCIPAL OFFICE: 7 grow at a double-digit pace for West 34th Street, New York, NY 10001. Shared Services provided by Advance Magazine Publishers Inc.: S.I. Newhouse, Jr., Chairman; Steven T. Florio, Vice Chairman; Charles H. Townsend, C.O.O.; John W. Bellando, Executive Vice-President and C.F.O.; Jill Bright, the next two years combined. In At these projections, the valu- adding there were no appraisal Executive Vice-President_Human Resources; John Buese, Executive Vice-President_ Chief Information Officer; David Orlin, Senior fiscal 2005, revenues are forecast ation multiple of Gucci’s sale or liquidation value sought in Vice-President_Strategic Sourcing; Robert Bennis, Senior Vice-President_Real Estate; David B. Chemidlin, Senior Vice- to climb 12.1 percent to 3.22 bil- price, in euros, is about three setting the offer price of $85.52 a President_General Manager, Advance Magazine Group Shared Services Center. Periodicals postage paid at New York, NY and at additional mailing offices. Canada Post Publications Mail Agreement No. 40032712. Canadian Goods and Services Tax Registration lion euros, or $3.89 billion, while times revenues. Given current share, which “is significantly in No. 88654-9096-RM0001. Canada post return undeliverable Canadian addresses to: P.O. Box 1632, Station A, Windsor, ON N9A7C9. fiscal 2006 revenues should in- market conditions, valuation excess of Gucci’s net book value POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008. crease 9.6 percent to 3.54 billion multiples in the high-end seg- per share of $47.25 at Jan. 31, FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008; Call 800-289-0273; or visit www.subnow.com/wd . Four weeks is euros, or $4.27 billion. ment vary from two to three 2003,” the company said. required for change of address. Please give both new and old address as printed on most recent label. First copy of new subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 7 West 34th Street, New York, NY 10001. 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MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE By Ross Tucker ACCOMPANIED BY A SELF-ADDRESSED OVERNIGHT-DELIVERY RETURN ENVELOPE, POSTAGE PREPAID. NEW YORK — Limited Brands Inc. posted slightly weaker earnings for the first quarter as rising sales were nullified by lower margins and higher costs. For the period ended May 1, the Columbus, In Brief Ohio-based specialty conglomerate said earnings retreated 0.9 percent to $96.6 million, or 19 cents a diluted share, compared with earnings of $97.5 ● L.L. BEAN’S BEEF: L.L. Bean on Monday said it filed four million, or 19 cents, in the year-ago period.