SARA LEE’S VILLAGE/6 SEASON LACKS SPRING/2 Women’s Wear Daily • The Retailers’ Daily Newspaper • May 19, 2003 Vol. 185, No. 102 $2.00

INSIDE: The WWD Business Review. WWDMONDAY Pages 9-24. Accessories/Innerwear/Legwear

Rise and Shine NEW YORK — Sleek, sexy and full of shine, patent leather is the material of choice for accessories designers this fall. Shoes, bags and belts look racy in eye-popping shades with a reflective sheen. Here, a leather and patent shoe from Kenneth Cole New York and Melanie Dizon Pochette's patent bag with an 18-karat gold-plated bangle. For more, see pages 4 and 5.

Heading to Marc III: Jacobs Eyes Better Sportswear Collection By Kristin Larson — even more accessible than his of Marc Jacobs. “With Marc Jacobs, NEW YORK — More Marc is on the way. Marc by Marc Jacobs collection. you can see the entire collection on Marc Jacobs wants to bring his “I want to dress the people that the West Coast and on the East hipness to the masses and is in talks shop at the Gap and people that go to Coast, and even Marc by Marc is not with various companies around the those kinds of stores in their local everywhere. I would like to have a world to produce a better-priced line towns,” said Robert Duffy, president See The Latest, Page 31 PHOTO BY DAVID TURNER; STYLED BY JULIA TOPOLSKI; FASHION ASSISTANT: MARGARET PHOTO HARLEY DAVID BY TURNER; STYLED JULIA BY TOPOLSKI; ASSISTANT: FASHION 2 Lack of Hot Items Dampens Spring WWDMONDAY Accessories/Innerwear/Legwear By Lisa Lockwood also are selling briskly, especial- faster pace than the fashion busi- ly at the junior chains. In gener- ness,” added Cohen. NEW YORK — The movie title, al, novelty items have outsold ba- David Wolfe, creative direc- GENERAL “She’s Gotta Have It,” doesn’t sics across-the-board. While tor of The Doneger Group, the FASHION: Patent leather is back, and it’s sleeker than ever. Bags, shoes and apply to consumers this spring. spring has been slow in getting buying office here, described the 4 boots are shining on in styles like roomy totes and sport boots. A lack of key “must-have” started, stores believe the action difficulties with the current Marc Jacobs wants to bring his hipness to the masses and is in talks to items or trends, temperatures has picked up this month. trends: “One of the problems is produce a better-priced line, lower priced than even Marc by Marc Jacobs. below normal, job insecurity, high “If there were more must- the two big newsy and exciting 1 WWD, MONDAY, MAY 19, 2003 WWD, MONDAY, unemployment and worries over haves, it would be a better sea- things this season are the IT Holding is restructuring its stable of Italian brands under a newly the war in Iraq have all taken son, but color and prints are miniskirt, which is impossible 2 relocated head of its U.S. operations, who has ambitious retail plans. their toll on the spring season. selling,” said Kal Ruttenstein, for some women to wear — some A lack of key “must-have” items or trends, chilly temperatures, job As reported, April’s same-store senior vice president and fash- women are passing on it who insecurity, high unemployment and war worries all took a toll on spring retail. sales were disappointing at retail- ion director at Bloomingdale’s. might have bought it in 1966 — 2 ers such as Saks Inc., Federated, “It’s totally true. There wasn’t a and the other big story is prints, EYE: It was a zoo, literally, Wednesday night at the New York City Ballet’s J.C. Penney Co., The May Depart- must-have item. I saw it at holiday although they’re so subjective. 3 spring gala, presenting “Carnival of the Animals,” plus a tuneful scoop. ment Stores Co. and Wet Seal, and again in the spring. When I And some people think they Special Report: The WWD Business Review runs on pages 9-24. while stores such as Target, Hot walked into the stores this spring, make them look fat.” Topic, Pacific Sunwear, Express I saw the peasant blouse all over Still, he noted that when Classified Advertisements ...... 30-31 and Chico’s had sales increases. again,” said Marshal Cohen, co- something new happens in print To e-mail reporters and editors at WWD, the address is Despite what seems to be a president of NPDFashionworld, or color, retailers generally [email protected], using the individual's name. dearth of hot spring trends, sev- the Port Washington, N.Y.-based focus on the top. “Prints are an eral high-end retailers said their market research firm. impulse buy and it’s very good SUBSCRIPTION RATES U.S. and possessions, Retailer, daily one year, $99; Manufacturer, daily one year, $135. fashion customers are gravitat- “It’s scary when jeans are still for the business,” he said. All others U.S., daily one year $195. Canada/Mexico, daily one year, $295. All other foreign (Air Speed), daily one year $595. ing toward color and prints that the hot story for the past two Years ago, big trends defined Please allow 6-8 weeks for service to start. Individual subscription information/Single Copy Sales : (800) 289-0273; outside U.S. (818) 487-4526; new group subscription information 212-630-4196 they haven’t had in their years. The car industry, which a season, but now it’s not so sim- Postmaster: Send address changes to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008. wardrobes for several seasons, changes its models every two- ple, said Wolfe. WWD (ISSN #0149-5380) is published daily except Saturdays, Sundays and holidays, with one additional issue every month except July, and two additional issues in April and August, by Fairchild Publications, Inc. as well as miniskirts. Cargo pants and-a-half years, is turning at a Continued on page 26 a subsidiary of Advance Publications Inc., 7 West 34th Street, New York, NY 10001-8191. WWD is a registered trademark of Fairchild Publications Inc.© 2003 by Fairchild Publications Inc., a subsidiary of Advance Publications Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying or recording, or by any information storage or retrieval system, except as may be expressly permitted in writing by the copyright owner. Editorial Reprints: (212) 221-9595 Periodicals postage paid at New York, NY and other offices. Mailed under Publications Mail Sales Agreement No. 517054. Canada Post Returns to: P.O.Box 1632, Windsor, ON N9A 7C9 GST # 88654-9096-RM 0001 Canada Publications Agreement # 40032712 Calvin Klein Feted as Design Giant Printed in the U.S.A. All signed articles published in the paper represent solely the individual opinion of the writer and not those of WOMEN’S WEAR DAILY. NEW YORK — Everybody loves Calvin at Looking tanned and slim, For Web site access, log on and subscribe to www.WWD.com. a comeback story. Cipriani. Klein smoothly quipped, “I’m al- That was the case last Thurs- ways happy to pick up an award. day at the Chrysler Giants of I’m pleased it’s for House Beau- MONDAY: The AAFA American Image Awards benefit Design 2003 fete presented by tiful, in particular, and thankful dinner, New York. House Beautiful at Cipriani — to be here and to accept.” Nordstrom and Limited Brands report first-quarter where Calvin Klein made his Fellow partygoers lauded earnings. first foray into the social scene his attendance at the event and Polo Ralph Lauren Corp. reports on earnings for the since acknowledging in early his brief acceptance speech fourth quarter and year. April that he was seeking treat- met with resounding applause. ment for substance abuse. The Klein spoke of the longevity of TUESDAY: Perry Ellis International executives cele- designer was being honored as a home design versus fashion’s brate the firm’s 10th anniversary by ringing the open- tastemaker along with other dec- shorter life span and how that ing bell at the New York Stock Exchange. orative luminaries such as gar- appeals to him. First-quarter earnings from Saks Inc. and Ross Stores. den designer Frank Cabot, archi- Revelers at the event includ- Zero Tolerance Spring Benefit, New York. tect Sir Norman Foster, interior ed Carolyne Roehm, Mario designer Dan Carithers and fab- Buatta and Cathleen Black, WEDNESDAY: First-quarter earnings from Phillips-Van ric entrepreneur Adriana Scala- president of Hearst Magazines Heusen and Talbots. mandre Bitter — not to mention Division.

Target for its “creative retailing.” SMITH KEITH BY PHOTO — Anamaria Wilson THURSDAY: First-quarter earnings from Gap Inc. and Charming Shoppes. Liz Claiborne Inc. annual meeting, Secaucus, N.J.

COMING THISFRIDAY: WEEK May Department Stores annual meeting, IT Holding Unveils Retail Plan Greensboro, N.C.

By Eric Wilson that brand operations are now although the collection will now under the control of Enrico Di be sold directly by D&G through NEW YORK — IT Holding is re- Muccio, chief executive officer of its showrooms, while IT will pro- In Brief structuring its stable of Italian IT Holding USA, a 13-year veter- duce the line. The license was re- brands under a newly relocated an of the Italian conglomerate newed last year with the altered MOVING UP: Hearst Magazines has promoted John Hartig, the commander of its U.S. opera- who recently relocated to New relationship following reports executive hired last winter to develop new magazines, to senior tions, who has ambitious retail York. Di Muccio is expected to that it might not have been con- vice president of consumer marketing and development. plans for labels including Gian- strategize growth opportunities tinued after the appointment of Besides continuing to oversee prospective launches like the franco Ferré, Just Cavalli and for several IT labels in the wake Gabriella Forte as the U.S. presi- women’s style and shopping magazine currently in development, Romeo Gigli. of a restructuring of the compa- dent of D&G. Hartig will be in charge of Hearst’s marketing and circulation The company said last week ny’s long-standing relationship As a result of the restruc- operations. His promotion comes fewer than six months after with Dolce & Gabbana, which tured deal, Patrick Guadagno, having joined the company from Time Inc., where he had been brought the marketing and sales who was president of IT Holding chief executive of The Parenting Group division. side of its licensed D&G collec- USA, also left the company with- tion back in house. in the past month. Guadagno is ESCADA’S NEW HIRE: Maureen Baltazar has been named During an interview at IT’s believed to be joining D&G in- general manager of the Escada flagship in New York. She suc- Fifth Avenue showrooms last house in a senior management ceeds Linda Ruocco, who left the company. Most recently, week, Di Muccio outlined plans position for the U.S., although Baltazar was acting managing director of the Hermès flagship in the works for several of the the company would not confirm on Madison Avenue, and before that she was managing director other brands that are either li- his appointment. of its Boston unit. She reports to Carl Barbato, vice president of censed or owned outright by IT Despite the sudden lack of retail at Escada (USA) Inc. Holding, which include a new what was an overwhelming pres- retail concept for Ferré; the re- ence by D&G in the IT show- WESTIN’S HOT SPELL: Cynthia Rowley and Ilene launch of its secondary collec- rooms, Di Muccio expects the Rosenzweig want guests at Westin Hotels & Resorts to have a tion as GF Ferré; bringing back U.S. market to become increas- swell summer. Reef sandals, a Nike putter, Hamilton Beach’s the Romeo Gigli label to the ingly important in the growth of half-gallon blender and Wham-O’s Slip n’ Slide Big Splash are U.S., and various launches of the overall company through its among the items on their list of “modern luxury” must-haves. full accessories collections, eye- other brands. IT’s overall sales Westin guests and visitors to westin.com can register for the wear and fragrances over the in the U.S. have increased by chance to win all the loot. The hotelier is plugging the list with a next two years. about 17 percent for each of the $5 million marketing plan, as part of its Modern Luxury Di Muccio, who reports to IT last two years from $40 million in Weekends, special summer rates that debut this week. The au- Holding chairman and ceo 2001 to $47 million in 2002 and a thors of the Swell-titled books and the Swell collection at Target Tonino Perna, also clarified IT’s projection of $55 million to $58 will be featured on Westin’s Web site and will embark on a cross- ongoing relationship with Dolce million for this year. Those fig- country media tour this week. & Gabbana will continue as the ures indicate that the U.S. ac- licensee for D&G through 2006, Continued on page 29 3 Cirque de Ballet MONDAY,WWD, 2003 19, MAY It was a zoo, literally, Wednesday night at New York City Ballet’s spring gala, where resident choreographer Christopher Wheeldon unveiled his eye® new work “Carnival of the Animals,” a fantastical piece about a young boy trapped in the Museum of Natural History overnight. His neighbors are turned into bobbing chickens and strutting roosters. His librarian becomes a sylphlike mermaid. The boys on the wrestling team morph into jackasses, while his elegant aunt becomes a swan. “It’s all about unlocking the inner child,” observed the youthful Wheeldon as a sea of women in brightly colored gowns swooned over him at the dinner following the performance. “Somehow mine always seems to be on the outside.” Wheeldon’s whimsical touch cast its magical spell over the 875-strong crowd including ballet master in chief Peter Martins, who previewed his new ballet “Guide to Strange Places,” Joy Henderiks, Tara Rockefeller, Alba Clemente, Marcia Mishaan and Maria Bartiromo, who packed into the auditorium’s mezzanine and raised $1.4 million for the company. And which creatures did the Sally Albemarle in distinguished guests most identify Balenciaga. with? “The turrrrrrrtles,” purred Fé Fendi, who landed the most bold-faced names at her table: “Chicago” director Rob Marshall, HRH Infanta Elena of Spain and her husband, the Duke of Lugo. “I loved the swan,” said the Infanta, looking, well, regal in a Christian Lacroix Dancing Queens: gown. “I used to dance, you know.” Christine Anne Bass liked “those hens and Schwarzman, roosters,” as did Helen Schifter, while Kalliope Karella in Anh Duong went for the mermaid. “I Chanel, and thought she was sexy,” she shrugged. Claudia Macaya in And Jeff Klein? “The swan,” he Emanuel Ungaro. said. “Oh, and the wrestlers.” After dinner, the crowd let loose on the dance floor, where the evening’s most adorable couple, NYCB principal Charles Askegard and his wife, Candace Bushnell, reigned. As for Askegard, his animal of choice was a foregone conclusion. “I the lion,” he said — Charles Askegard twirls was and growled to prove it. Candace Bushnell in Tuleh. Anne Bass in Christian Dior.

Helen Schifter in Chanel.

Anh Duong in Jean Paul Gaultier Allison Sarofim in Joy Henderiks couture. Oscar de la Renta. inin RobertRobert Danes.Danes.

MISSING NOTES: Cocktails at the Cole Haan store almost took a catastrophic turn for jazz musician EYE SCOOP Wynton Marsalis, who hosted a bash with the company’s chief executive officer, Matt Rubel, Thursday night. After entrusting Jazz at Lincoln Center’s Ashley Schiff with his composition notebook during the party, Marsalis absentmindedly left it in the car he shared with her afterward. “Wynton told me, ‘This has my entire new CD in here. I will commit suicide if I lose it,’” said Schiff, who received a panicked phone call from Marsalis during a dinner she and Rubel hosted later at Michael’s for jazz supporters, including her brother Drew Schiff and his wife, Karenna Gore Schiff, Celerie Kemble and Boykin Curry, and Hilary Dick. Coming to his rescue, Ashley tracked down the driver who located the notebook and dropped it off at Michael’s, where Ashley promptly put it under her seat until delivering it to Marsalis in the rehearsal studio later that night. Fé Fendi with She pulled off another feat when organizing Jazz at Lincoln Center’s second-ever HRH Infanta Elena benefit,“Blowin’ in the Wind,” scheduled for June 2 at the Apollo Theater. She booked of Spain in performers Eric Clapton, Ray Charles, B.B. King, Willie Nelson and Audra McDonald, who Marcia Mishaan Carol Mack in Emanuel Ungaro. Christian Lacroix. will perform with the Wynton Marsalis Septet. NYCB BY STEVE EICHNER STEVE BY NYCB 4 Rise and Shine NEW YORK — Space WWD, MONDAY, MAY 19, 2003 WWD, MONDAY, babes, rejoice. Your material of choice, patent leather, is back, and it’s sleeker than ever. Bags and shoes are shining on in styles such as roomy totes Kazuyo Nakano’s and sport boots. patent leather bag.

Patent leather tote from Reed Krakoff for Coach. 5 WWD, MONDAY, MAY 19, 2003 TOPOLSKI JULIA BY STYLED TURNER; DAVID BY PHOTOS

Viva Spiga’s patent leather boots.

Liz Claiborne’s patent leather tote.

Patent leather bag from by Frou Paige Novick. Hogan’s patent leather boots.

Rafe Ny’s patent leather bag. Monsac’s patent leather bag and Sigerson Morrison’s patent leather shoe. 6 Innerwear Report Sara Lee’s New Central Command By Karyn Monget CAD design rooms, a cavernous area for Carter noted that the consolidation of now a vertically integrated company,” said fabrics and trims, an immense work “everybody in one place” was among the Nesbit. “We have purchase agreements NEW YORK — Sara Lee Corp. has built a space for more than 50 sewers, a mechan- directional ideas initiated by Cary D. with major suppliers, but we can build our

WWD, MONDAY, MAY 19, 2003 WWD, MONDAY, village in Manhattan to house its growing ic’s room with a team to repair everything McMillan, executive vice president and own fabrics and fibers and do the yarns intimate apparel empire and a new cam- from bra molding machines to test-wear ceo of Sara Lee Branded Apparel. ourselves or, if we want to, use suppliers. pus is being planned for its North Caro- washing machines, a high tech kitchen But Nesbit pointed out that the tangi- With seamless Santoni, we are designing lina headquarters. and resting area with magazines, a mail ble aspects of Sara Lee’s new direction the fiber and the fabrics at the same time.” The $6.46 billion intimates division room, a locker room, wheelchair-accessi- are just the icing on the cake. A virtual Nesbit would not reply directly when accounts for about a third of Sara Lee’s ble bathrooms and an infirmary. world of integration through technology asked if this new strategy will impact the $17.6 billion in annual sales, making it There even are private elevators that is placing Sara Lee in a nontraditional way apparel business will be conducted one of the largest and most profitable lin- connect directly with Sara Lee’s 14th floor, role of manufacturer, designer and fiber in the future. However, he said it “could gerie businesses worldwide. Under the a 21,000-square-foot space that continues as and textile specialist. bring jobs back home.” aegis of Charles L. Nesbit Jr., president the showroom setting for market appoint- Sara Lee has shuttered numerous He would not elaborate, but industry and chief executive officer of Sara Lee ments for the Playtex, Bali, Hanes Her Way, domestic manufacturing and textile facil- observers said the idea of creating more Intimate Apparel, industry observers Just My Size and Wonderbra and W by ities since the corporation announced in jobs for Americans, especially through a said Sara Lee plans to grow its intimates Wonderbra brands. The 14th level, which 1997 that it was initiating a “devertical- model of the Sara Lee campus in North business between 2 and 3 percent over formerly housed the Bali sewing rooms, ization” program to focus on marketing. Carolina, could set the stage for a grass- the next several years. will soon be given a similar facelift, he said. However, at the time, chairman and ceo roots movement led by one of America’s Integral to this expansion is the open- Sara Lee officials would not divulge John H. Bryan told shareholders that not most powerful Fortune 500 companies. ing here in March of a 30,000-square-foot the cost of the new project, but the work all manufacturing operations would be Nesbit noted that the move to consoli- “Sara Lee Village” at 260 Madison of architect George Larsen and designer sold. The priority was selling components date all tiers of internal and external Avenue, where a massive integration of all Herman Miller, as well as the technical to manufacturers, he said. lines of business reduces the risk of deal- departments has been cohesively melded support and systems, are estimated to be Hence, the nucleus of Sara Lee’s new ing with suppliers and contractors in into one powerful workforce, said Nesbit. All of the intimates units have merged into one central facility, which some insiders call “Central Command.” The new location houses a stable of well- known brands: Bali, Playtex, Hanes, Hanes Her Way, Just My Size, Barely There, Wonderbra and Champion, as well as Hanes hosiery. Inside the massive state-of-the-art floor on the sixth level — a modernistic-looking space that resembles the deck of the star- ship Enterprise — is a working laboratory designed to stimulate creativity and inno- vation among a diverse workforce of 150. The corporate-wide roster, which includes the Personal Products and Food and Beverage businesses, exceeds 100,000. The modern industrial environment, Work stations Gloria Falla, replete with ergonomic furniture of the are buffered Charles Nesbit, Forties by Charles and Ray Eames that by printed Jeannie Martini average around $2,900 a chair, was mesh screens. and Robert Mazzoli. designed by Chicago architect George Larsen. Special effects include thread- pattern, wall-to-wall carpeting; fabric- The new Papillon W textured, free-form murals; pliable, mesh by Wonderbra ad by sculptures that look like undulating Richard Avedon. waves, and silver-tone, floor-to-window perforated-metal coverings for a cus- tomized central air and heat system. Work stations designed by Herman Miller feature trademark Aeron posture office chairs that sell for as much as $1,200 each, nonglare task lighting for computer areas, semisheer sliding mesh doors that act as an aesthetic cushion for privacy and soft lighting, and luminescent, adjustable lily-pad-shaped mesh buffers that hang above work stations to block out noise. In an interview and tour of the new facilities, Nesbit was joined by Robert G. Mazzoli, senior vice president and cre- ative director; Gloria Falla, vice presi- dent of design for Playtex; Jeannie Sara Lee Intimate Apparel’s new reception area. Martini, vice president of design for Bali, AQUINO JOHN BY PHOTOS INTERIOR LEE SARA and Peggy Carter, vice president of corpo- more than $50 million. vertically integrated project is a new virtual volatile countries, minimizes valuable rate affairs for Sara Lee Corp. Nesbit said Sara Lee’s other “big order of collaboration, communication, cre- lead time to get product to market, Nesbit, who also is a vice president of news” is “an immense groundbreaking ativity and innovation that melds research enhances customer service and has the corporation, said one amenity for project” being staged at the Sara Lee inti- and development concepts through Sara proven to be an effective cost-saving clients are two private rooms with com- mates headquarters in Winston-Salem, Lee’s proprietary global InSite intranet. measure. It also ensures quality and puters and phones that line the entrance N.C. Over the next 18 months, Sara Lee The pooled and digested data is fed to all brand integrity, as well as securing patent of the reception area. will consolidate all segments of its prodi- areas, including R&D sites, factories, fibers protection of proprietary products and “It’s for our clients who might need to gious intimate apparel operation, includ- and textiles facilities, design studios, sales, brands produced in-house. work or simply make private phone ing the administrative organization, into marketing and distribution. “Color matching is now computer con- calls,” he said. one monolithic “Sara Lee campus similar For example, Nesbit said the idea is to trolled,” he said. “We’re on the same Nesbit walked through the sprawling to the Nike campus,” said Nesbit. instantaneously connect a worker at a color system Wal-Mart is on. If we agree maze occasionally pointing out what he Sara Lee acquired the land 10 years manufacturing plant anywhere in the on a color standard, it’s controlled with called “the backyard,” where numerous ago to house the activewear and under- world who is having a production problem all of our factories and suppliers. The tables and chairs in different shapes, wear operations. The intimates campus, a with a designer, a textile expert or a prod- other thing that’s been good for us is the heights and sizes were strewn about or former farm with a lake, will be another uct development specialist, or all four integration of Liberty Fabrics. We now adjacent to work stations. Some faced business model. It will house a credit parties, to resolve a problem immediately. are designing in fashion-forward mode.” multiple offices, reinforcing the philoso- union, employee stores, health and fitness “When the system is fully implement- Additionally, Nesbit said Sara Lee is phy of “shared common space,” where facilities, food services, dry cleaning and ed, our objective is working in real time planning to open a R&D center in a refur- employees can have spontaneous meet- shoe repair shops. Plans are being consid- and in collaboration with any Sara Lee bished hosiery plant in the Southeast in ings or take a coffee break. ered for a day-care center, which could tie employee around the world,” Nesbit said. the next 18 months to develop break- “We want our employees to have a in with a nearby YMCA to offer recre- “A plant can get on a phone with a design throughs for all branded apparel. The great, productive work environment,” ational and after-school programs for center in New York or Paris, and with a four key growth areas for intimates will Nesbit said. “That’s why we have the best employees’ children. Several years ago, minicam film the operation. The visual be Santoni knitting, molding and glue creative people.” Sara Lee made a financial donation, as will then appear on our OnSite screen. melt technology, and ultrasonic technolo- Outlined like a city within a city, the well as the real estate, to the YMCA, “People either have lived in a textile gy that bonds molecules together. model environment is occupied by huge where a former hosiery plant was located. world or a manufacturing world. We are Continued on page 29 7 Accessories Report MONDAY,WWD, 2003 19, MAY Watch This Movement: Audemars Piguet Hits 57th Street

By Marc Karimzadeh Georges-Henri Meylan, chief executive officer and president of the Manufacture NEW YORK — Audemars Piguet is sailing Audemars Piguet & Cie worldwide, said that into Manhattan and in true Swiss style, it’s the New York unit is the culmination of the right on schedule. company strategy to take back control of its Today, the Le Brassus, Switzerland-based distribution network by establishing watch and jewelry firm is opening its first Audemars Piguet subsidiaries. He noted U.S. boutique at 40 East 57th Street. that opening freestanding stores allows the Like the complicated watches for which company “to control the brand image and, Audemars Piguet is synonymous, the bou- most importantly, to establish a direct dia- tique is filled with technical gadgets, from logue with our clients.” projectors casting images, films or live feeds The company has boutiques in Geneva, from its Swiss manufacturing facility to Paris, Singapore, Hong Kong and Osaka, Roberto Coin has introduced plasma screens, multicolored fiber-optic Japan. In the U.S., the brand is distributed in a new diamond cut and lights and an audio system worthy of New about 50 doors, including Cellini, London a new diamond cut and York’s hottest nightclub. Jewelers and Wempe. According to Meylan, collection called Cento. “We wanted the store to convey the feel- the U.S. accounts for 17 percent of the firm’s ing of the house of Audemars Piguet and the total turnover, which is about $152 million. lifestyle that goes with it,” said François- That would bring the U.S. business to about Henry Bennahmias, president of Audemars $26 million. “We think we can go to 20 to 25 Coin’s New Cut Piguet North America, who declined to give percent,” he said. “That’s one of the purposes NEW YORK — Diamond sales projections for the store. of the store: to help our brand be known here.” branding has seen a big push The boutique will devote 2,000 square feet The Manhattan flagship will offer the com- in the jewelry industry re- to retail space on the street and mezzanine plete line of women’s and men’s watches, in- cently, as suppliers and retail- levels. The top two floors now house the pri- Audemars Piguet’s glass storefront features a cluding a limited edition black Royal Oak ers of all sorts introduce their vately owned company’s U.S. subsidiary largelarge engravedengraved tourbillontourbillon movementmovement motif.motif. Chrono that has the 57th Street storefront en- own specific cuts and styles. headquarters, while the third floor will be graved on the case back, at $13,500. The store Now, Italian jeweler used for special events. A framed wall display will be the launching pad of the Royal Oak La Robert Coin is joining the The boutique’s glass storefront features a will showcase watches Mer jewelry collection and one-of-a-kind party with its new diamond large, engraved tourbillon movement motif. and themes associated Haute Joaillerie pieces, which were previous- venture. Once inside, customers will find a wall fea- with Audemars Piguet. ly not available here. This, said Meylan, is part The upscale company last turing a receded square motif that draws of a strategy to shift the ratio of female to male week unveiled Roberto Coin from the waffle dial found on the Royal Oak clients. Men currently account for two-thirds Cento, a diamond jewelry col- watch collection. There is also a framed wall of Audemars’ business. lection featuring a signature display that will regularly showcase a theme “We are a little bit too macho,” said cut with 100 facets designed close to the brand. For the opening, this fea- Meylan. “We need to get more women as cus- to have a higher degree of tures Royal Oak watches and a miniature tomers to increase our market share. If she brilliance than most round- yacht — Audemars Piguet supports Team can buy a ring that’s a little less expensive cut diamonds, which usually Alinghi, the Swiss winners of the America’s [than a watch], it brings her to our brand, and have about 58 facets. Cup 2003 in New Zealand. afterwards she may buy a watch.” “This is something we have talked about for years and we think there is a real need for,” said Peter Webster, president of Roberto Coin USA, which is Rodkin Rocks On in Tokyo based in New York. The diamond cut was cre- By Rose Apodaca Jones world led to managing the careers of Brad Pitt, ated by Rosy Blue, a De Robert Downey Jr. and Sarah Jessica Parker, Beers site holder and one of LOS ANGELES — Jeweler and friend to the among others. “But eventually, I was getting the industry’s largest dia- likes of Cher and Sir Elton John, Loree bored with management,” recalled Rodkin. mond companies, which is Rodkin, with skulls and peace signs sparkling “I felt like it was glorified baby-sitting.” supplying all of the diamonds from her fingers and neck and emblazoned on Her jeweled roots stretch back to her to Coin for the collection and the back of a leather jacket, is worshiped like native Chicago, where, as a young teen, she is also now separately work- a pop star when she’s in Japan. would redesign jewelry gifts. ing with Vera Wang to devel- Fans await her at the airport or stop her Her first “real” piece as an adult in the op her jewelry line. The on the street for autographs and pictures, and mid-Eighties was based on a 1913 Cartier Cento diamonds are all cut last week a local band handed her a demo skull-and-crossbones ring. She secretly con- by hand and have a symmet- tape and translation for the ode they com- tinued making one item after another for her- rical floral pattern, and each posed to her. A stack of magazines and TV self, telling friends and clients who would beg jewelry item has the signa- reels showcase her gothic-appointed home in to buy them off of her that they were made by ture Roberto Coin ruby. Beverly Hills — even down to the bathroom. a secret local artist. Shopping at Maxfield one The collection, which car- “She is now extremely famous in Japan,” day in 1987, her jewelry caught the eye of the ries price points from about said Susumu Tsuchiya of Timeless Inc., buyer and a designer was officially born. $800 for a pendant necklace Rodkin’s licensing and distribution partner The core of the platinum and 18-karat col- up to $50,000 for earrings there. “She is like a rock star.” lection, heavily based on Medieval and Loree Rodkin in her new store in Tokyo. with larger-sized diamonds, And, in her quiet way, the tiny feline, Renaissance flourishes, has the effect of anti- is launching at retail this fall long-haired brunette tells of the time in a quated heirlooms — even when bearing con- pointed at a cost of $1 million — are rich with a small selection of stud Tokyo hotel suite when a press crew temporary effects like the Elton John ring. wood panels, gothic detailing and the earrings and necklaces. pushed aside Aerosmith’s Steven Tyler to It was at Maxfield that Masa Watanabe of Medieval and gothic furniture from Future collections will likely get to her: “I’m like, don’t you want to One World Access spotted the line and took Rodkin’s Hollywood Hills home. include bridal jewelry, said speak to him?” it to Tokyo to show Timeless’ Tsuchiya, who While the two upper floors are show- Webster, who projected that So it should be no surprise that Rodkin, teamed up with Rodkin for the new retail room and office space for the Asian-based Cento could reach retail known for her irreverently gothic-flavored enterprise. Timeless encouraged Rodkin to wholesale business, a floor below street sales of about $100 million platinum and diamond pieces (recently Sir introduce Love & Hate, available exclusively level is an elaborately ornamented salon within three years. Elton forked out $12,000 for the diamond in Japanese retailers and at Maxfield, to for her so-called “Couture” group within The company has hired ring spelling out F**K YOU she was wearing meet a younger fan demand. the Loree Rodkin collection. The name- Naval Bhandari, a diamond to give to partner David Furnish, and then Through the Japanese network, the Rodkin sake line retails from $2,000 to $20,000, specialist, as senior vice ordered a second for himself), has chosen line is expecting retail sales of $30 million this while the Couture pieces run from $20,000 president of Cento, which is the Japanese capital for her first freestand- year, up one-third from 2002; Love & Hate is to $300,000 or more. This is the first time it being operated as a separate ing door, a 3,000-square-foot gothic temple also expected to increase from last year’s $19 is available in Japan. division with different pack- when opened last week — even if it is a 12- million to close to $30 million in 2003. “Her work is always relevant to what’s aging and visuals than the hour flight from her Beverly Hills studio. Domestically, and without a partner or li- going on in fashion, in music and the world core Roberto Coin collection. To date, there are six Rodkin in-store censee, Rodkin’s retail sales are $25 million. in general,” observed Maxfield buyer Coin, which is best known shops in various department stores in Japan, And Timeless expects to open two more Sarah Stewart. “She arrives at being femi- for its upscale gold jewelry, is and another 21 Love & Hate shops there, freestanding Rodkin stores, in Osaka and nine and edgy at the same time.” targeting upscale independ- some at retailers and others freestanding in Fukuoka, by early 2004; along with another For fall, Rodkin dallies in onyx, coral and ent jewelers and better de- such shopping centers as Sapporo Parco, six Love & Hate shops by the end of that year. bone for the collection shipping to U.S. retail- partment stores with Cento, showcasing the sterling silver and precious As for the flagship, the partners expect ers such as Neiman Marcus and some 25 spe- with plans initially for distri- gems bridge line by the same name. first-year retail sales of $5 million. cialty stores, as well as her own doors in Japan. bution in about 100 doors. Situated in the Ginza district, neighbor- The four-story building is the manifesta- Conversations continue with other li- The launch will be accompa- ing Cartier and Harry Winston, the ornate- tion of Rodkin’s aesthetic. Her stone carvers censees to open stores in Paris and Hong Kong. nied by a significant advertis- ly festooned Loree Rodkin flagship actual- in Los Angeles ornately cut cream-colored As for opening Loree Rodkin stores in ing and marketing campaign, ly bowed last Tuesday night with a bash of marble like castle stone for the exterior fa- the U.S., the designer said it would have to set to break in July issues of 500 VIP guests in honor of the founder, cade. Stained-glass windows bearing the be with a partner. “I don’t want to be a re- magazines including In Style, who’s had more incarnations than a cat. Rodkin logo are featured inside and out. tailer. Let someone else worry about all W and Vogue. Storied adventures in L.A.’s Seventies rock Throughout the two selling floors — ap- that. I want to just design.” — Melanie Kletter AUDEMARS AND COIN PHOTOS BYPHOTOS COIN AND AUDEMARS THOMASHORIGUCHI HIROAKI BY PHOTO RODKIN IANNACCONE; WWD, MONDAY, MAY 19, 2003 8 and notoriousfashion plate — brokered byEnglandcaptain — three-year deal,saidto be against thecountry’s nationalteam. Africa foranhistoric,friendlymatch Armani dressed forthefirsttimein airport tonight—literally hit therunwayatLondon’s Luton England’s hunkysoccerteamwill ARMANI-ENGLAND KICKOFF: the U.S. help buildtheirdistributionin Borbonese andRedwalllines Marvin Traub fashion insiders also saidthathehasasked Gianfranco Ferrélines.Arpels used toproducetheFendiand manufacturing company, which name ofthebankruptNadini Emilia, nearBologna,isthenew Cherrygrove, basedinVignola, Dell’Acqua lastJanuary. acquired Borbonesein2000and phone interview. Hisfamily ready-to-wear,” Arpelssaidina in producingbothknitwearand the rarecompaniesthatisskilled 2004 collections.“Thisisoneof starting withthespring-summer Alessandro Dell’Acqualines, manufacture hisBorboneseand agreement withCherrygroveto expected tosignaproduction ClaudeArpels CHERRY FACTORY: second half. like profitperformanceinthe top brands.Thegroupexpectsa been madeatmanyofthegroup’s Management changeshavealso Rothschild bringing infinancier shuffling topmanagementand since thebeginningofyear, has undergonemajorchanges among otherbrands.Thegroup as shoeretailersAndreandMinelli, and LaHalleVetements, aswell runs fast-fashionchainsKookai formerly knownasGroupeAndre, billion ayearearlier. Vivarte, billion, comparedwith$1.09 declined 1.2percentto$1.07 from SeptembertoFebruary, Meanwhile, salesinthehalf, euros atcurrentexchange. Dollar figuresareconvertedfrom million intheyear-earlier period. to $42.4million,versus$36.9 the firsthalfjumped15percent fashion group,saidnetincomein UP ANDAWAY: — CourtneyColavita ease, comfortableandrelaxed.” “The customerhastofeelat and warm,”Branquinhosaid. atmosphere willbeveryintimate would bepreserved.“The late Sixtiesaestheticofthespace collections. Branquinhosaidthe recently launchedmen’s will carrybothherwomen’s and B-Architecten Studio,thestore Antwerp thisAugust.Designedby bow onNationalestraatin store. Theflagshipisslatedto set toopenherfirstfreestanding business. TheBelgiandesigneris of herownforgrowing Branquinho Véronique VERONIQUE’S CLOSET: UOEWATCH EUROPE As reported,Armanisigned a . ThesquadisflyingtoSouth — LuisaZargani as president. will soonhaveaspace — RobertMurphy to consultonthe Vivarte, theFrench Dawn Mello Nathaniel Giorgio and is David Beckham occasions. Fabio Cannavaro Inter Milan’s Madrid’s model. HehasalsodressedReal as acatwalkandadvertising James England’s Chelseasquad. hometown team.Healsodresses Italian squadPiacenza,his Newcastle Unitedandforthe created thewardrobefor the Italiannationalteam.Helater began in1994,whenhedressed relationship withthesoccerworld said Armani. become iconsonandoffthefield,” modern daygladiators—theyhave gray iridescentsilkties. down cottonshirtswithdarkblue- front trousersandgraybutton- button jackets,low-waisted,flat- navy bluecottonsuitswithtwo- athletes willbewearingclassic national team. would decidetoutilize it. learn howmanycompanies magazines. Itwastoo earlyto trademark, targetingin-flight a yearadvertisingthenew plans tospendabout$2million know thedifference.”Theunion choice, butatleasttheyshould Chinese fabrics,fine,that’s their union. “Iftheystillpreferthe Ermanno Rondi label thatusesBiellafabrics,”said made inChina,versesafashion fashion label,whichusesfabrics know thedifferencebetweena person shouldhavethetoolsto diminishing marketshare.“A increasing Asiancompetitionanda awareness andhelp the labelwill a month.The pass specialguidelines,inabout Biella fabricsoryarns,which garments madeentirelyfrom should startaccompanying Biella: TheArtOfExcellence launching aBiellatrademark. of Milan,thetradeunionis around thetownanhournorthwest fabrics andyarnsproducedin further differentiateandhighlight Industrial Union.Inanattemptto change, accordingtotheBiella and cashmere.That’s aboutto some oftheworld’s finestwools alone kn have neverheardofBiella,let consumers intheU.S.probably AN EXCELLENTADVENTURE: Armani’s professional “Footballers todayarethe On Mondaynight,England’s In 1996,Armanihired , thenoftheLiverpoolteam, ow thatit’s thepurveyorof Ronaldo — Christian Vieri Ellen Burney , todressEngland’s raise consumer , presidentofthe trade unionhopes for formal and Luis Figo combat style. Armani- Soccer, David and — C.C. Most and completed enough of these re- these of enough completed trends, businesswise,”hesaid. positive some see to starting now we’re but consumers, from only not positive, feedback’s “The machines. price-check and ments enhance- room fitting carts, ping shop- include which changes, the to well reacted have customers Cosmetically,year. this more 100 for slated is and stores 40 about in completed been has — perience ex- shopping the improve to stores remodeling — program vent” “rein- company’s The itself. help to doing is Federated what sized to bedown1.5percentflat. comps for forecast full-year its to sticking is company the percent, 5 fell sales same-store quarter first- Wednesdaythat porting re- Despite year. this later until improve to economy the pect we willbenefitfromthat.” improving, are issues external those when is view “My said. he another,” or way one themselves resolve to going are issues Those issues. external all are “those — my,markets financial anemic the pricingtoremakingstores. fying simpli- from — fate own its shape to doing is Stores Department Federated what emphasized Lundgren Terryofficer, ecutive ex- chief becoming since meeting shareholders annual first his ing tinct, Federated isn’t ducking. dinosaur,ex- retailing’s store, department the render will that comet great the is turmoil nomic eco- current the believe lysts — CINCINNATI By John Byczkowski Federated Reinvention Marches On Price Slide for Women’s Apparel Continues with April 2002, all apparel all 2002, April with Compared cutting. price tail re- in factor a remains apparel for demand sluggish continued to produceapparel.” places ever-lower-priced find to scramble global mad a have “Yousaid. Steidtmann this,” of year phaseout. 10- their of end the proaching ap- are members Organization WorldTrade by imports tile 1, 2005elimination. Jan. final their approach ments gar- foreign on quotas as erous gen- more become have which largely bargains, import be to pegged can — overall prices apparel in slide 0.6 the in and — prices apparel decline women’s April the said Research, Deloitte at omist slide. long-term deflationary a of part percent, 3.4 off were el women’sappar- for prices retail Index. its ConsumerPrice in Friday reported Department Labor the sales, with pers shop- lure to sought and gains bar- imported of advantage took stores as March, against percent 0.4 adjusted seasonally a fell April in apparel women’s for — WASHINGTON By Joanna Ramey Only recently has Federated has recently Only empha- Lundgren said, That ex- didn’t he said Lundgren econo- sluggish the war, The Fridayfollow- interview an In However, Steidtmann said, Steidtmann However, all driving primarily “That’s tex- and apparel on Limits econ- chief Steidtmann, Carl 2002, April with Compared While many ana- many While Retail prices Retail about marketingthem. think to begin to modelings pae Gop i which in Group, Apparel expand itsprivatelabelbusiness. to continuing by and — nishings fur- home and apparel women’s in particularly — lines cial spe- develop to vendors with ing work- competitors, its by carried lines marginal out weeding tions, collec- its differentiate better momentum going.” that get we once level, that even beyond growth fuel and planned have otherwise would we than faster going machine keting mar- the get idea, reinvent the expand stores, our in reinvest to options many have and flow cash tremendous with growth sales that leverage Wecan us. for happen things good really successfulcompany,”very hesaid. a be we’ll 2003, beyond jecting pro- we’re way the business our grow can we If sales. comp-store through grows] “[Business pers. shop- new attracting and more, spend to shoppers current ting table,” Lundgrensaid. the on opportunities quisition] [ac- attractive fewer are there he said. grow, to intends Federated how tives,” hesaid. alterna- other than fully,better hope- and, past the in was it than better is store our in shopping why different, is store our why quarter fourth the in advertise to able be we’ll and initiatives, reinvent these of all of coverage full-market a have to able be we’ll n h nx tre months. three next the in cycle deflationary a into slide to economy the for there” is State Georgia possibility University,“the said at Center Forecasting Economic the strength witha2.2percentgain. relative showed before, year the with compared when prices, retail April, In percent. 0.3 increased prices retail March, In prices. in decline lizing destabi- a of potential the about Reserve Federal the by ment state- week’s last follows prices the was largest factor. prices energy in plunge percent 4.6 a but cline, de- the to contributing as autos and food apparel, in clines de- price cited government The months. 18 in drop largest the percent, 0.3 fell April in goods retail all for prices expected,” shesaid. retailers as items summer and spring much as buying “aren’t Consumers discounts. retail for weather damp blamed also 6.8 percentovertheyear. plunged and month the for cent per- 0.6 declined prices parel ap- Boys’ levels. year-ago from percent 4.2 dropped and March against April in percent 0.8 fell apparel girls’ for prices Retail percent. 3.8 declined prices The April deal with Tarrant with deal April The to continue Federatedwill of lot “a level, sales that At get- from come will growth So, environment, current the “In is changes those Leveraging time, first the for Atlanta, “In aev hwn drco of director Dhawan, Rajeev retail overall in drop The economy, overall the In analyst apparel Labor A percent overtheyear. April 6.8 dropped and March in against percent 0.5 rose prices accessories and wear sports- nightwear,Underwear, months. 12 the for percent 2.8 dropped but month, the for percent 0.5 increased rates percent fromApril2002. 6.5 plunged and March against April in percent 2 declined prices dress as year, the over percent 3.4 fell and month the for percent 3.2 dropped wear outer- women’s for prices tail re- government, the by tracked apparel women’s of gories their cool.” don’tlose consumers as long as road, the down months nine to six happening that see “I said. Dhawan hiring,” and capital with start to expenditures rate gish U.S.economyandprices. slug- the on drag further a in ate downturns cre- could Japan, and Germany with pled cou- SARs, of impact economic growth. economic U.S. of two-thirds for and strongerprices. sales retail in increase an into translate should that dence confi- consumer in creases in- citing Dhawan, said it,” avoid However,will we think “I story inourcompany.”story success important very a is That which isexactlywhatwehopefor. brand, private a it’s that stand bar store, under- don’t none….Customers the in business fastest-growing “the line, apparel women’s Fed-label private erated’s INC, called Lundgren And effort. differentiation the of typical is men, young and iors jun- for clothing Rag American of line a carry Federatedwill ings intoimprovingquality. sav- the put and same the prices keep or prices, lower either — things two do can company the label, private In overseas. buys it goods the on money save pany com- the help will dollar falling the said Lundgren portunities. op- some creates even ronment value is,”hesaid. the what understand to tomer cus- the for simple it make to than 10percentintwoyears. more to today sales of percent pricing umbrellafromlessthan3 everyday-low- Value” “Best the under products of amount the expand will and ago, year a did it than Federatedless couponing is initiatives. important most its of one is pricing simplify to fort uct isanaturalopportunity.” prod- that and brand the extend to and customer, this with tion recogni- name the have already Wesportswear.men’s clothing, men’sof lot a buy women is ality re- “The said. Lundgren ance,” accept- wide of because wear men’s to brand that extending Friday.“Weare revealed pany com- the 2004, for stores 125 in wear men’s to extended be will Prices for suits and sepa- and suits for Prices cate- the among Meanwhile, corpo- the is need we “What global the said Dhawan But accounts buying Consumer The current economic envi- economic current The is objective longer-term “The ef- company’s the added He INC that success a such It’s TTHEHE WWD WWD BUSINESS REVIEW

THE RETAILERS’ DAILY NEWSPAPER MAY 19, 2003 ARE LAWYERS GOOD FOR FASHION? The Legally Minded As Seventh Avenue Captains

Torturous Talk: Spinning the Numbers Giving Credit: Department Stores Aren’t Vanishing { Shopping the Future: Consumers Head High Tech } THE WWD BUSINESS

hakespeare wrote, “The first thing we do, let’s kill all the lawyers.” If society had heeded that call, the fashion world would have missed the likes of Peter Boneparth at the helm of Jones Apparel Group, Peter Arnold as executive director of the Council of Fashion Designers of America, Todd Kahn as president and chief operating officer at Accessory Network Group Inc. and Jeffry Aronsson as chief executive officer at Marc Jacobs International Inc. To be sure, former lawyers holding the reins at key corporate posts in the fashion industry are few and far be- tween. That’s because most attorneys either litigate or practice in specialties often considered playgrounds far too remote from the business of business, and for the smaller pool whose focus is corporate law or transactions involving mergers and acquisitions, even fewer choose to step out of the legal arena. Among the negatives for lawyers in fashion, perhaps, is a vague hostility to attorneys in the industry, just as there is to MBAs. Designers feel the legally focused don’t understand the creative process, while former lawyers often complain that creative types are too off in the clouds to deal with hard-nosed issues involving the law. As always, both contain their kernels of truth and exaggeration. To be sure, the negative perception of lawyers pervades workplaces in all industries, even when the intent is comic. “What’s wrong with lawyer jokes?” they’ll say. “Lawyers don’t think they’re funny and other people don’t think they’re jokes.” Even those fleeing the ranks of legal work, as many have done in light of the difficult economy, rarely find themselves focusing on fashion. Those that do will often be automatically thought to be argumentative with poor communication skills and a tendency to speak legalese. Hardly the traits that mark one for Seventh CONTINUED ON PAGE 12

S{ BY VICKI M. YOUNG

COVER STORY THENEW LAWSIN{ FASHION SOME OF SEVENTH AVENUE’S LEADING EXECUTIVES HAVE COME FROM THE LAW. BUT DO A LEGAL TRAINING AND THE VAGARIES OF FASHION TRULY MIX?

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CONTINUED FROM PAGE 10 ing attorney, there was definitely a learning curve in which he had to acclimate himself to a job out- Avenue stardom. side the courtroom. “I found that you don’t have as much time to deliberate in business as you do Peter Arnold, whose focus before CFDA was on corporate transactions at Sidley, Austin, when you’re in a law office. Also, when I first came into the family business, I would go to meetings Brown & Wood, notes: “I think the search firm thought I might be a good candidate because of and in conversations use legal phrases that only [litigation] attorneys would use. I could see peo- my legal background. However, one of the perceptions when I initially applied for the job had to ple’s eyes glaze over and I had to relearn how to communicate as a businessman.” do with people wondering whether an attorney was up to the task and whether I had the sensibili- These days, Postal’s job is more suited to his skills, one that also better utilizes the blend be- ty for what the job required. Now it is not so much an issue, either because not many know I was an tween his legal know-how and lessons learned on the front lines at his family’s fashion firm. As the attorney or they have slowly forgotten that fact.” MMG partner in charge of mergers and acquisitions in the fashion industry, he notes: “Clients While Arnold says that his legal background has been a positive in terms of understanding how can’t [lie to] us. Having run [apparel] firms, we have too deep an understanding of the fundamen- deals are done or negotiating sponsorship agreements, there were growing pains when he first tal issues that can cause problems for firms. When we get into a problem and start analyzing it, my

“THIS INDUSTRY, WHICH IS ENTREPRENEURIAL IN NATURE, NEEDS ACCESS TO PEOPLE WHO CAN THINK THINGS THROUGH IN SYSTEMATIC WAYS SO THOSE ON THE CREATIVE SIDE DON’T GET HURT.” — JEFF KAPELMAN

made the jump. legal skills help me get up to speed quickly and then to communicate what I’ve assimilated.” “For me, it was a bit of a cultural shift. People in the fashion industry move in a different time Todd Kahn of Accessory Network had an easier time moving from law to business, mostly be- frame. Deals are sometimes concluded by a handshake in an elevator, and then things flounder be- cause he already had experience in corporate restructuring while at the law firm Fried, Frank, cause certain issues weren’t ironed out. It’s also why in a number of instances I’ve insisted on an Harris, Shriver & Jacobson before jumping to Salant in 1993, about one month before the apparel agreement in writing,” Arnold says. firm’s emergence from bankruptcy proceedings. While at Salant, he held positions ranging from Andrew Postal, managing director at the apparel consulting firm Marketing Management general counsel to chief operating officer. Group, observes: “The legal background has been a tremendous help to me in business. The train- “People do tend to pigeonhole you if they know you had a legal role. In my different business ing teaches you how to both think and analyze, skills that are useful in the business world.” roles, I’ve found that the legal background has been extremely helpful. The discipline helps you in For Postal, who joined his family’s business, Judy Bond Blouses, after seven years as a practic- many ways, from negotiating licensing and acquisition opportunities to just looking at businesses CONTINUED ON PAGE 20 12 MONDAY, MAY 19, 2003 NATIONAL RETAIL TRANSPORTATION INC. - LESS THAN TRUCKLOAD SERVICES - POOL DISTRIBUTION - PIER AND AIRPORT KEYSTONE FREIGHT CORP. PICK-UP SERVICES - TRUCKLOAD - 48 STATE SERVICE - PRIVATE AND DEDICATED FLEETS - YARD SWITCHING AND YARD MANAGEMENT

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MONDAY, MAY 19, 2003 MONDAY, EXAGGERATING THE DEMISE BY EVAN CLARK THEY MAY HAVE SEEN BETTER DAYS, BUT DEPARTMENT STORES STILL HAVE A NICHE AND ARE FAR FROM EXTINCTION.

he department store sector certainly has seen better days. with the proximity of their relationship.” These days, everyone from Target and Wal-Mart to many of their Buchanan, prescribing a drastic change for the sector, said the stores should own suppliers are going for a piece of the branded retail action once look into leasing out areas of their stores to vendors, basically acting as landlords dominated by these storied shopping emporia. Specialty stores over the taking a portion of sales. past decade have multiplied, with each one more agile than their larger “If you get right down to it, an average buyer at a department store spends retail cousins and targeting specific customers in a way that’s not possi- about 10 to 20 percent of her time picking out merchandise and getting to know ble for department stores. Kohl’s, often described as a hybrid dis- the target customer,” he said. “The vendors are in a much better position to run counter-department store, has moved into branded apparel turf deci- their own show.” sively, giving traditional department stores a run for their money with its This would produce a more tightly edited assortment, which is more common easier-to-shop format. in Europe, where department stores operate under this model, he said. One But it’s not all bad news. European store that has done this with immense success is Selfridges in London, Department stores still account for a hefty portion of the country’s apparel which has gone from the traditional model to, as its former ceo Vittorio Radice de- Tbusiness and are an important revenue stream for major vendors. Last year, 11 of scribes it, “a house of brands.” In his view, the brands can be in anything from fash- the top publicly traded department store names collectively posted sales of $130.75 ion to food to consumer electronics — as long as they appeal to the latest con- billion. And while it was nothing to write home about — and is dwarfed by Wal- sumer tastes. Mart’s annual sales of nearly $250 billion — that mark was 1 percent higher than the previous year’s. { According to the more than 10,000 people who make up STS Market “THERE’S ACTUALLY A VERY Research’s AccuPanel, department stores and such national chains as Kohl’s and Penney’s captured 29 percent of the dollars spent on sportswear in STRONG SEGMENT THAT REALLY 2002. Specialty stores together captured 28 percent, while the dis- counters took 16 percent of the sportswear pie. The problem LIKES THE DEPARTMENT STORE. was that department store dollars declined 4 percent, twice as fast as the 2 percent overall decline in consumption. YES, SHE IS BUYING LESS Despite repeated complaints from all quarters that the stores offer an unfriendly shopping environment with all- THERE THAN SHE DID FIVE too-similar assortments from one chain to the next, no other format offers shoppers so many options when it YEARS AGO DUE TO ALL OF THE comes to putting together complete outfits from varied sources. It faces a crisis of positioning as much as it does a NEW SHOPPING OPTIONS, BUT crisis of market share. While size and a broad assortment probably aren’t SHE STILL VERY MUCH LIKES enough to keep department stores afloat over the long haul, there is no shortage of hope and even a sprinkling of new ideas. SHOPPING IN THE DEPARTMENT As Elaine Francolino, a fixed-income analyst with Moody’s Investors Service, put it: “They’ve learned lessons from successful re- STORE.” — KAREN HOGUET tailers. They’ve seen what Kohl’s has done.” And they’ve clearly seen the need for new thinking. George Jones, president and chief executive officer of Saks Inc.’s department store group, admitted: “The While some question whether the department stores should hand over control { model is so illogical. The model is messed up. There’s a real win out there for a of their merchandising in such a way, the notion turns on one of the sector’s great- company that can break out of that mold.” est strengths — its real estate. Jones, who joined the firm two years ago from Warner Bros., is trying to grab Rather than inching away from the malls, Angela Selden, North American that win with the 241-door chain. “I didn’t come here to try to survive, I came here managing partner for Accenture’s retail industry group said: “The big call to action because I really thought there was a big opportunity for building a better mouse- for department store retailers is, how are we going to define the mall?” trap. Some are dabbling in off-the-mall formats, such as Sears, Roebuck & Co., “The whole thing in terms of dependency on vendor allowances is a real flaw in which will cut the ribbon on a new format in Salt Lake City this fall dubbed Sears the way things work,” said Jones. “We’re trying to reduce our dependency on some Grand. For the most part, though, department stores are tied to the malls by their of these huge vendors.” anchor-driven store base. The stores need to make their stand at the malls and “cre- A.G. Edwards & Sons analyst Robert Buchanan said: “This intimate relation- ate a dynamic shopping experience that dominates specific categories that matter ship between the department store and the vendors has to end. That’s the root to the customer,” she said.

problem for the department stores. Original thinking has gone out the window Elder-Beerman’s president and ceo Bud Bergren agreed that, as a sector, “we’re IMAGES HEART/GETTY VIKKI & G.K. BY PHOTO 15 MONDAY,2003 19, MAY not giving the customer something stores should invest in their existing they’re looking for because we store base, where the pricing mes- NO SPRING IN THEIR STEP haven’t grown as a sector.” sage can be clarified and the cus- Bergren’s solution? “Our growth tomer service improved. “There’s a FIRST-QUARTER NET AND COMPARABLE-STORE SALES HAVE BEEN DISAPPOINTING. is going to come by being a niche lot they could do to stimulate traf- EVEN THE NORMALLY EXPANSIVE KOHL'S CORP. SAW COMPS WITHER, AND MORE TRADITIONAL player.” Elder-Beerman is focusing fic,” she said, adding the stores DEPARTMENT STORES HAVE SEEN BOTH MEASURES OF GROWTH RECEDE. its new smaller store formats on could be brighter, with better sig- smaller communities, such as nage and include even small ameni- Warsaw, Ind., or Frankfort, Ky., ties, such as Federated has done FIRST-QUARTER SALES RESULTS where they are the better player in with soda and snack machines. STORE NET SALES COMPS town. Special events at the stores could SEARS -1.8% -6.7% Ninety percent of the firm’s also help drive traffic. markets overlap with J.C. Penney Almost every department store PENNEY'S * -7.1% -4.9% and half the firm’s markets compete is in the midst of some sort of re- FEDERATED -4.7% -5.0% with Kohl’s. Bergren said Elder- vamping. MAY -7.2% -8.8% Beerman has much of the same “It doesn’t have to be rocket sci- KOHL'S +13.2% -2.4% merchandise as those stores as well ence,” said Weinswig. “It doesn’t as a better layer. “We want to be in a have to be expensive. I’m not asking TARGET # -5.6% -4.9% town where we can be the number CONTINUED ON PAGE 20 * Department stores only. # Marshall Field's results only. one player,” he said. The 68-store chain said it had re- cently received a number of unso- licited acquisition offers, and it’s agreed to discuss, on an exclusive basis for a limited time period, the possible sale of the company with one of the interested parties. While larger firms are looking to grow their businesses through such acquisitions, they don’t have the luxury of concentrating just on Kohl’s and Penney’s. They battle it out in the same markets, trying to grab the same customer with often times the same product. For Saks’ Jones, the better de- partment store mousetrap includes differentiation across the board, in merchandise mix and assortments, with unique products and unique vendors. Under Jones’ direction, Saks has penned agreements with the Laura © 2003 CIT Group Inc. “c it” and see “We what you see” are trademarks of CIT Group Inc. Ashley, Jane Seymour and Ruff Hewn brands. Saks also acquired the mall-based pre-teen retailer Club Libby Lu with an eye toward adapting the concept to its stores and entered into an agreement with FAO Inc., to take a minority stake in the toy retailer, which in turn will open up licensed shops inside the firm’s department stores. “We have a lot of irons in the fire now,” said Jones. “What we’re look- ing to do is create something that will be a different kind of experi- ence.” Another big plus for department stores is the cash sitting on their bal- ance sheets, said Smith Barney Citigroup analyst Deborah Weinswig. That liquidity, for the most part, will help them keep on keeping on. How that cash is deployed, though, will chart the future of the sector. Most players across the sec- tor are dipping their toes into new waters with concept stores, off-the- mall formats, more private label, di- visional consolidation, wholesale centralization or just the addition of In 1993, Ecko started with six tee shirt designs and a unique sense shopping carts. May Department of street style. Its first fashion statement? Choosing CIT as a financial Stores Co. has actively acquired its way into the bridal business, while partner. Today, the Ecko Group of Companies is one of the hottest Federated went multichannel with fashion design houses. This global brand is making all the right moves. Fingerhut before deciding it had See how CIT can help you with factoring, financing and more taken on more bad consumer debt than it could tolerate. It is, though, at CIT.com or call (800) 248-3240. We see what you see. experimenting with new formats, some of which look remarkably like Kohl’s. Weinswig said the department 16 THE WWD BUSINESS

MONDAY, MAY 19, 2003 MONDAY, BEAMING UP TO FUTURE SHOP BY JENNIFER WEITZMAN SOON SHOPPERS WILL LITERALLY SAY “UPLINK NOW” AND CLOTHES WILL BE DISPATCHED DIRECTLY TO THEIR CLOSETS.

ou are sitting having coffee and a woman passes by in a particularly even be adapted as a form of clothing cop, warning you, for instance, that those fantastic skirt. khakis and that T-shirt aren’t going to cut it for today’s meeting with the boss. You can either admire her from afar, wondering where she bought Shoppers preferring tactile and visual contact with the clothing they buy can such a smart piece, or you can pull out your personal digital assistant, head to the mall, swipe a smart card containing your own personal wardrobe data- press a button and instantly have access to information about the skirt, base through the store’s equipment and be afforded access to a kind of cyberper- including brand, similar products, availability and price. sonal shopper or, at the very least, a sales associate who can use the available data Better yet, press another button and the skirt is yours. to assist you. Or you can stay at home and have the data travel the Internet so that The woman in question isn’t Jane Jetson but a participant in a very you don’t have to leave the bedroom. real scenario that will soon appear in a store or perhaps sidewalk café The system automatically updates its records when you take out a piece of near you in which the physical and virtual worlds blend seamlessly into clothing or add a new one. a shopping experience that isn’t only fun, but efficient, too. While the closet knows what is hanging in it, a store’s shelves aren’t left hang- Retailers are slowly but surely shifting their technological focus away from the ing. Thanks to the RFID technology, shelves also have become smart. They can de- Yplastic tags and bar codes designed to help give them control over their businesses tect such things as when a sweater is removed from a shelf and can locate that hard- — and any less-than-well intentioned customers — and instead are exploring to-find T-shirt in size 4 in another part of the store. state-of-the-art gizmos and gadgets, such as sensors, antennas and glitter-size cloth- Another technology using RFID is the Real-World Showroom, a person-to-ob- ing identifiers, in an effort to make the shopping experience easier and perhaps ject technology that allows a person to use her PDA, now equipped with an RFID even more entertaining. reader. The handheld device can be pointed at any tagged product and the relevant In an effort to bridge the gap between traditional and virtual shopping, retail- information is immediately retrieved from a number of sources. With a few more focused technologies are being developed that will allow consumers to keep an presses of buttons, customers can buy the products in front of them without ever

{ exact record of what’s hanging in their closets as well as what they purchased, interrupting what they happen to be doing at the time. when and for how much. Jill Fleming, senior vice president with Retail Forward, said fashion retailers are Glover T. Ferguson, chief scientist at Accenture, said a major innovation appli- starting to catch up to grocery stores to make the shopping experience easier by cable to apparel is the radio frequency identifier, or RFID, a tiny sensor embedded using technology to suggest an item to go with another or inform a shopper when in a garment that can provide details such as size, label, fabrication or an item goes on sale based on historical shopping data. “It is easier for a computer even styling to uniquely identify the piece of clothing or accessory rather to suggest something than a person,” she said. “So when a customer looks at a top than simply looking at its price. These embedded devices stand to enrich or bottom, a computer can upsell a host of items that go with it.” She cited the shopping experience and plant the seeds for a longer relationship Nordstrom, famous for using its customer books to upsell, for taking a leading role with the store as information is then stored in an individual smart card. in combining computers and shopping. “The smart card identifies me as me and provides access to my In the past several years, retailers have taken advantage of customer informa- clothes at home,” Ferguson said. He noted it does not merely say you tion through loyalty programs and private label credit cards. But now, technology have a sweater, but provides the particulars like texture or fabrics so you will help retailers take it to the next level. won’t fear pulling off the unthinkable fashion faux pas by matching that Paul Bellask, a partner at Karabus Management Inc., a Toronto-based retail brown woolen sweater with a blue linen cropped pair of pants. and consumer product industry consulting firm, said wireless technology already When applied to the shopping experience, the possibilities are endless. is helping retailers. Handheld devices expedite a salesperson’s efforts to find the The Online Wardrobe, a working prototype developed by technology re- item for which a customer is looking, as well as its price. searchers at Accenture, allows consumers and retail sales associates to work to- In-store kiosks, while hardly the omnipresent factor that ATMs might be, can gether and takes the task of hanging your clothes to the next level. It uses sen- pair a registered customer with merchandise in stock and even customize sugges- sors, tagging and tracking technologies to monitor the clothing one already tions according to fashion preferences. owns and to help coordinate items, either online or in the physical stores. But finding the right fit is often the greatest obstacle in purchasing, and Shoppers can reveal the content of their wardrobes to the stores and in re- Fitme.com is addressing it with Size Genie, which allows customers to determine turn, they could receive personalized offerings and timely reminders whether a given garment will fit them or even someone for whom they’re purchas- about products of interest. ing a gift. In this brave new wardrobing world, an antenna in your closet could re- Ram Srinivasan, the chief executive, said he is in discussions with major retail- ceive all the relevant information about items there from special tags on your ers and hopes to have an impact on the estimated $28 billion lost in merchandise clothing. Feeding that information into a personal computer, a customized, de- returns. Srinivasan said he is hoping to have signed deals and have both online and { tailed wardrobe can be created either online or from a local store. Today, an alert brick and mortar retailers operational on the service in the next 2 to 3 months. and persistent salesperson with extensive knowledge of a customer, her likes and While these technologies are developing, the digital age has already arrived for past purchases might call if the right item in the right size arrives; in the not-too-dis- some. Prada opened its vision of techno chic in its SoHo store in 2001. Antennas tant future, the matching of customer and items could be arranged digitally. hidden in dressing rooms pick up an RFID tag on each piece of merchandise and Need to match a new shirt to a pair of jeans? Simply pull out the jeans and let the automatically display its silhouette on a touch-screen monitor that also reports computer develop a list of ideal matches for you. This technology also can search for what other sizes and colors might be available. Prada staffers have Staff Device PHOTO BY HANNA BARBERA /NEAL PETERS COLLECTION PETERS /NEAL BARBERA HANNA BY PHOTO similar products, alert the customer when her favorite store is having a sale and CONTINUED ON PAGE 19 THE WWD BUSINESS 17 MONDAY,2003 19, MAY

TORTUROUS TALK OBSCURES TRUTH BY DAN BURROWS IN THESE DAYS OF DISAPPOINTING FINANCIAL RESULTS AT RETAIL, COMPANIES ARE BUTCHERING THE LANGUAGE AND SPINNING THEIR BEST IN ORDER TO DOWNPLAY THE BAD NEWS.

eorge Orwell once wrote: “Most people who bother with the matter at that you don’t have to pay taxes every year, that the credit card company doesn’t de- all would admit that the English language is in a bad way.” Had the mand its interest payment each and every month and that the value of your brand author of “1984” and coiner of the term “Newspeak” (“Freedom is new car didn’t immediately drop 50 percent the very second you drove it off the Slavery”) lived to see a modern apparel company’s earnings release lot. You would have a lot more money, too. when its profits were in “a bad way,” he would probably require the True, EBITDA is a decent measure of cash flow — admittedly an important Heimlich maneuver to keep from choking on its turgid, obfuscating thing — and is one indicator of the efficiency of core corporate operations. But it is prose. not the bottom line, and producing ever-increasing profits is the name of the game. The problem with publicly owned companies is that they are re- If a company doesn’t make more money quarter after quarter and year after year, quired by law and investor pressure to keep in constant communica- its stock price is not going to go up. tion with their shareholders. When times are tough, when sales and Some other sneaky words intended to keep investors from looking at all-impor- earnings are down, they have to disclose it with weekly and monthly tant net income are “operating earnings,” “gross profit” and especially the expres- sales updates, same-store sales releases and quarterly reports, especial- sion of earnings on a “pro forma” basis. Operating income is really just a synonym G ly since the dawn of Reg FD a couple of years ago. When this flurry of for EBITDA, and “gross profit” is even more misleading because it eliminates news is not good, investors dump their stock, which depresses the price and brings nearly all costs but those of goods sold, as if everything in fantasy land is now not another round of recriminations. Now it is certainly an understandable fact of just tax free, but free free. How much easier it would be if a company didn’t have to human nature that no one likes to be the bearer of bad news. Unfortunately, that is pay for things like rent or electricity or employees. especially so when it means your stock options are now worth less than the toilet Then there’s “pro forma.” Pro forma is a fancy Latin phrase. Loosely translated paper you’ve just flushed them with. from that dead and ancient language, “pro” is Latin for “bull” and “forma” is Latin So what do public, and even those private companies that have to disclose, do? for “stool.” When you see the words pro forma, like EBITDA, skip to the bottom They engage in the time-honored American tradition practiced so expertly by line that says net income. everyone from P.T. Barnum to Bill Clinton. They spin. “One-time gain” is another phrase that should raise your suspicions. This They bend the truth. They abuse the language. They conceal bad news, usually means that a company’s net income is inflated because it sold something overemphasize good news and lead with minutiae in order to avoid drawing atten- like a factory, or a brand, or received cash in an insurance settlement or from a tion to “substantia.” They emphasize the immaterial “highlights” of their quarterly legal dispute. It’s great to have that income fatten the bottom line, but you can { performance and then cough and cover their mouths while muttering, “And our only sell something once. Keep reading and usually buried deep within a compa- net loss for the quarter was $14 gazillion.” Worst of all, they hide ny’s press release will be a sentence that starts “excluding one-time gains, net in- bad news in an impenetrable swamp of bland, monotonous come was….” This is the figure that indicates how well the apparel company per- and seemingly endless prose that makes the Soviet-era formed while doing what it actually does: selling coats, slacks, knits, denim, newspaper Pravda read like “Tropic of Cancer.” whatever. Not real estate. In other words, they do what any good salesman does: And, of course, while firms love to slip in those one-time gains, they really They try to get you to keep buying what they’re selling — love to keep in isolation “one-time charges” or “special items” that deplete the their stock. bottom line. Probably the most common and blatant way compa- Then there’s the old bait-and-switch. This occurs when a company holds on like nies spin their earnings announcements is by leading off, grim death to any piece of good news when all else around it is falling apart. often in screaming banner headlines, with how great Bankrupt Spiegel Group Inc.’s Eddie Bauer division’s sales and earnings are in their EBITDA was. For the uninitiated, EBITDA is an free fall, but they are always very proud of their ongoing commitment to tight in- acronym for earnings before interest, taxes, depreciation and amortization. ventory management. They like to trot that out over and over again, insisting on { Onomatopoeically pronounced “ebit-DUH,” earnings before interest, taxes, de- how “pleased” they are with the way they are managing their inventories. What preciation and amortization is just a long and complex term for a very simple con- Eddie Bauer doesn’t say, but should, is that the company has been very good at cept: It’s how much money the company made in fantasy land. managing inventories of clothes that they can’t sell. As Charlie Munger, who, with über-investor partner Warren Buffett runs Which brings us to “pleased.” Read a company’s press release or listen to an Berkshire Hathaway, the company that sets the standard for honesty and openness earnings conference call and it’s amazing how often management is either as well as price per share, was reported by Fool.com to have said at its annual meet- “pleased” or “excited.” That’s because these words are actually euphemisms. ing earlier this month: “I think that every time you see the word EBITDA [earn- “Pleased,” in fact, means relieved, or even grateful, that something worked accord- ings], you should substitute the word ‘bullshit’ earnings.” ing to plan. “Excited” means “we are crossing our fingers so hard….” This is from the vice chairman of a company whose stock price 10 years ago was When managers aren’t pleased or excited, they’re “disappointed,” as in “we’re about $15,000. Today it trades in the neighborhood of $74,000. That’s a nice disappointed that our sales and earnings came in well below plan and that our neighborhood. stock is now being traded in pesos.” Disappointed? No. Disappointed is when you What Munger neglected to say is why EBITDA is such a meaningless number. get socks for Christmas. In this case, disappointed is a cover word for “please- It’s because, in the real world, companies, just like people, have to pay those pesky don’t-fire-us-we-swear-it-wasn’t-our-fault.” Which, of course, it never is. It’s “un- little things like taxes and interest. Their hard assets, such as fleets of trucks, depre- seasonably” warm weather. Or cold weather. (Doesn’t matter.) It’s the economy.

ciate and their intangible ones, trademarks, for example, amortize. Imagine now, Or gas prices. Or a dock lockout. Or the war. Or SARS. But it is absolutely never CORBIS BY PHOTO CONTINUED ON PAGE 19 18 RETAIL RESULTS FOR THE FOURTH QUARTER AND YEAR SIXTEEN OF 31 MAJOR RETAILERS HAD DECLINES IN COMPARABLE-STORE SALES IN 2002, AND EVEN MORE — 20 — SAW THEIR COMPS DECLINE IN THE FINAL QUARTER. MONDAY, MAY 19, 2003 MONDAY,

FOURTH QUARTER YEAR COMPANY EARNINGS CHANGE SALES CHANGE COMPS EARNINGS CHANGE SALES CHANGE COMPS UNITS

Abercrombie & Fitch $92 16.5% $534 14.6% -4.0% $194 15.5% $1,596 16.9% -5.0% 597

Ann Taylor 1 16 vs. loss 352 -5.2% -12.3% 80 175.4% 1,381 6.3% -3.9% 588

Bon-Ton 15 2.7% 241 -1.8% -1.7% 10 54.8% 713 -1.2% -1.2% 72

Cato 10 -11.9% 191 3.1% -4.0% 46 6.4% 733 6.9% 0.0% 1,025

Charming Shoppes 2 4 vs.loss 601 -7.1% -5.0% (3) vs. loss 2,412 21.0% -2.0% 2,248 Claire's 3 40 161.0% 322 15.0% 9.0% 78 296.4% 1,000 8.8% 5.0% 2,800 Dillard's 4 72 -28.8% 2,520 -3.1% 3.0% (398) vs. profit 8,230 -2.0% -3.0% 333 Federated 5 341 vs. loss 5,017 -2.2% -3.9% 818 vs. loss 15,435 -1.4% -3.0% 450 Finlay 27 9.8% 388 -0.1% -0.1% 23 24.3% 931 -2.3% 0.1% 1,011 Galyans 17 30.5% 212 21.4% -1.4% 18 295.7% 598 23.9% 0.5% 34 Gap 248 vs. loss 4,650 13.7% 8.0% 477 vs. loss 14,454 4.4% -3.0% 3,117 Goody's Family Clothing 6 4 vs. loss 358 -1.5% -0.4% 8 vs. loss 1,193 0.1% -1.2% 328 J.C. Penney 7 202 112.6% 9,549 0.1% 1.9% 405 313.3% 32,347 1.1% 2.6% 1,049 Kmart 8 (1,100) vs. loss 8,870 -18.5% -9.8% (3,219) vs. loss 30,762 -14.9% -10.1% 1,829 Kohl's 279 19.3% 3,184 16.9% 1.2% 643 29.8% 9,120 21.8% 5.3% 457 Limited 9 353 8.1% 2,966 0.0% 0.0% 502 -3.3% 8,445 0.3% 3.0% 4,036 May 10 387 -10.2% 4,373 -4.4% -6.0% 542 -22.9% 13,491 -2.8% -5.3% 443 Neiman Marcus 11 5 vs. loss 666 4.8% -2.5% 100 -7.4% 2,948 -2.2% -4.6% 33 Nordstrom 12 60 18.3% 1,751 7.3% 1.9% 90 -27.6% 5,975 6.1% 1.4% 142 Pacific Sunwear 23 64.3% 266 27.9% 15.6% 50 78.6% 846 23.5% 9.7% 794 Ross Stores 59 17.6% 965 13.7% 3.0% 201 29.8% 3,531 18.2% 7.0% 507 Saks 13 68 26.2% 1,842 -3.7% -3.7% 24 7429.2% 5,911 -2.6% -1.4% 356 Sears 14 848 71.7% 11,059 2.2% -7.3% 1,376 87.2% 35,698 -0.2% N/A870 Shopko 15 33 -6.3% 961 -3.9% -4.1% (145) vs. profit 3,250 -4.1% -2.3% 364 Stage Stores 16 16 1.9% 257 -4.4% -6.8% 54 -78.6% 876 2.3% 1.6% 354 Stein Mart 10 15.6% 408 0.3% -3.3% 21 34.8% 1,409 6.7% -0.8% 267 Talbots 28 -12.9% 432 -0.3% -6.0% 121 -4.9% 1,595 -1.1% -6.6% 895 Target 688 4.6% 14,061 6.4% -2.2% 1,654 20.9% 43,917 10.3% 1.1% 1,475 TJX 17 154 -0.7% 3,505 9.2% 0.0% 578 15.6% 11,981 11.9% 3.0% 1,843 Wal-Mart Stores 2,529 15.5% 71,587 10.6% 2.7% 8,039 20.5% 246,525 12.2% 5.1% 4,688 Wet Seal (6) vs. profit 161 -11.2% -18.0% 4 -86.6% 609 1.1% -5.6% 610

SOURCE: COMPANY REPORTS. PROFIT AND SALES FIGURES IN MILLIONS OF DOLLARS. UNITS AS OF END OF FISCAL YEAR. PARENTHESES INDICATE NET LOSSES.

FOOTNOTES: 1-Fiscal 2001 Q4 earnings include $17 million in pre-tax, nonrecurring charges and $2.8 million in goodwill amortization. 2-Q4 results include a $2.1 million aftertax restructuring credit. 3-Results include a $2.3 million aftertax loss for the disposal of Lux Corp. 4-Q4 includes aftertax charges of $34 million for asset impairment and store-closing costs; pre-tax goodwill amortization charges of approximately $3.9 million; and a one-time aftertax gain of $41.3 million, or 48 cents. Full-year special items include aftertax asset impairment and store-closing costs of $33.4 million; an aftertax loss on early extinguishment of debt of $4.4 million; an $8 million credit for the forgiveness of a lease obligation, and $6 million aftertax also related to the early extinguishment of debt. 5-Earnings from continuing operations rose 10 percent to $341 million in the quarter and 23.2 percent to $638 million for the year. 6-Q4 Results for the fourth quarters of fiscal 2002 and fiscal 2001 include pre-tax impairment charges of $3.5 million last year and $1.9 million in 2001. Q4 of 2001 includes $1.3 million restructuring charge. 7-Q4 includes $83 million in pre-tax charges. Excludes comps from Eckerd drugstores. Store count is for J.C. Penney doors only. 8-Quarter and year include numerous restructuring, impairment and other charges. 9-Q4 results include the sale of Lerner New York and year-ago results include the elimination of the Lerner and Lane Bryant divestitures and the recombination with Intimate Brands. 10-Q4 includes aftertax division combination costs of about $4 million, while the year had similar costs of $76 million and $6 million in aftertax costs for the early retirement of debt. 11-For fiscal year ended Aug. 3, 2002. Comps for Neiman Marcus stores only. 12-2002 profits were reduced by $71 million because of an accounting charge and other items. 13-Special items reduced Q4 and year-ago Q4 profits by $16.3 million and $18.3 million, respectively. In 2002 and 2001, special items pulled earn- ings down $66.2 million and $23.5 million, respectively. 14-Sales from retail and related services. Total corporate revenues rose 2.4 percent in the quarter to $12.52 billion and 0.9 percent to $41.37 billion for the year. Number of stores reflects full-line stores. Q4 earnings were inflated by $179 million aftertax from an asset sale and year-ago period was deflated by $163 million in aftertax special items. 15-Q4 results include a pre-tax $6 million re- structuring charge. Excluding a change in accounting principle in both full fiscal years, income would have increased 68.5 percent to $39.6 million, or $1.35, versus $23.5 million, or 82 cents. Excluding closed stores, sales de- clined 2.3 percent from $3.33 billion. 16-Stage’s net loss for the 2001 fiscal year, before the extraordinary item, was $11.6 million, or $0.58 per diluted share. 17-2002 profits were reduced slightly by a charge for the tentative settlement of California lawsuits. Profits for 2001 include a $40 million aftertax loss related to discontinued operations. 19 MONDAY,2003 19, MAY

BEAMING UP TO TORTUROUS TALK OBSCURES TRUTH FUTURE SHOP CONTINUED FROM PAGE 17 due to mismanagement. Read an apparel company’s press release during a Bluefly led with sales growth — a truly good thing — and then touted its CONTINUED FROM PAGE 16 bad quarter and you’d be convinced the chief executive officer was Job. gross profit increase and lower operating loss. That’s all very well and good, Interaction machines that scan data One very general rule of thumb is that the shorter a company’s press re- but ultimately, the company wound up in a deep, dark $1.7 million hole. from merchandise and allows the lease, the less spinning is going on. That’s because when things go wrong, a To be fair, corporate communications is a thankless task. The problem, sales associate to show related runway company will do back flips trying to make operations seem better than they as Notre Dame business professor James O’Rourke 4th explained, is that a footage or product information on are. This is not always true, of course, and a good example of that is Saks Inc. public company has a variety of “stakeholders” all of whom have conflicting any of the store’s plasma screens. Their releases are usually on the long side, but that’s because the company interests. Customers at American Eagle’s does an admirable job of breaking out important operating details at both “Employees want stability and job security,” O’Rourke said. “Investors New York and Santa Monica flag- its department store group and Saks Fifth Avenue. Kudos to them. want you to cut costs. Customers want you to cut prices. And then there are ships can try on an outfit, strut be- But look at Wal-Mart Stores Inc. Here is the world’s largest company communities and special interest groups that have their own expectations.” fore a digital camera and then e-mail with $246.5 billion in sales and more than 3,400 units in 10 countries span- Speaking with one clear, authoritative voice that keeps these sundry groups a friend for suggestions. ning the globe and it manages to squeeze its annual earnings release into just appeased is no small task, said O’Rourke. Consumers also can have their five pages. So don’t expect corporate communications to get clearer anytime soon. chinos and jeans custom-made at Now compare that with dot-com survivor Bluefly Inc., which had full- If anything, the language will only get more obtuse as fresh financial-speak Lands’ End’s Web site by entering year revenues of less than $10 million and posted a net loss of $1.7 million. It neologisms are invented all the time. specific measurements. Called took them six pages to explain what the heck happened. Sure enough, After all, whatever happened to “synergy?” Lands’ End Custom, it is an online personal tailor that is available 24 hours a day to help the site’s users craft their own pants by answering questions about their style and fit preferences. The customized items ADVERTISEMENT are slated to be delivered in three to four weeks and are accompanied by the Lands’ End unconditional guar- antee. Customer-made clothing does come at a steeper price, $54 a pair, compared with the $29.50 it charges for jeans and $35 for chinos. Peter Weil, senior vice president at Retail Forward, noted that a growing Better Solutions, number of retailers are now using computer technology to create opti- mal assortments and even arrange fix- From Concept to Checkout tures on the selling floor. Technology can help stores compensate for cen- tralized buying, too, by enabling large t has been said that a book cannot be judged by its cover. “When it comes to product development and innovation,” he chains to custom-assort stores to re- However, if you ask anyone in the fashion industry, he or she added, “we clearly have an edge. Paxar has always been in flect anything from the local climate will inevitably confirm that a label speaks loudly for both the the forefront with our merchandising and branding solutions, to the demographic and psychograph- Ibrand and the retailer. creative services and data management systems. Innovation ic composition of the neighborhood. According to Ted Fountas, vice president of apparel marketing will continue to be a key driving force in our strategy.” Amanda Thomas is marketing for Paxar, research shows that the majority of people do in With over 250,000 customers worldwide, manufacturing facili- manager at Marketmax, which works fact look at the label prior to purchase—and not solely to see ties in over 33 countries and a notable presence in over 65, with retailers such as Kohl’s, the brand name. “Whether it costs one cent or five, labels are and sales for 2003 currently projected between $665 and Charlotte Russe Holding, Eddie still one of the most cost effective forms of advertising. The $680 million, it seems the need for Paxar’s innovative mer- chandising solutions is indeed plentiful. Bauer, The Finish Line, Marks & brand and retailer are really making a mark with that label.” Spencer, ShopKo Stores, The Spiegel For the past 75 years Paxar Corporation has operated through this In fact, noted Fountas, Paxar considers its customer base, Group and The Sports Authority. She belief, providing innovative merchandising and product identifica- global footprint, and technology its greatest assets. Most all views technology’s promise in rela- tion solutions to apparel manufacturers and retailers worldwide. the major retail houses and brands work with Paxar, and one out of every four apparel labels are produced in Paxar facto- In 1972, the Federal Trade Commission’s Care Label Rule was tively simple terms: “As a retailer, you ries. Paxar’s services have and continue to make an indelible put into effect, mandating that all garment labels list care want the right amount of product in mark on business worldwide. the right store at the right time. You instructions. To keep up with demand, Paxar launched Fasco™, a chemical process designed especially to achieve One of Paxar’s most dynamic, far-reaching business solutions want to make sure your customer is is its proven SpecStar technology, a web-based service that getting a basketball during basketball colorfast printing, which enabled label production to increase from 250,000 labels per day to 5,000,000 a day from an offset manages a brand apparel manufacturer’s tag and care label season and shoes for back-to-school.” press. As other countries enacted similar laws, Fasco technol- data. It has been installed in 231 customer locations in 37 Over the next 10 years, the retail ogy was licensed to companies around the world including countries, allows for quick online ordering and the ability to industry will be at the point where a Europe, Africa, and Asia, making Paxar the dominant printed distribute and control variable data globally. store can identify each customer label supplier to the industry. Furthermore, this month, Paxar set a new standard for comfort when she walks into a store. The re- “Manufacturers had to manage all of the variable information labeling when it announced its Soft.mark™ line of soft apparel tailer will welcome her with a hand- contained on the labels, not to mention label inventory,” com- labels. Specially engineered for superb comfort, Soft.mark held device or loyalty smart card with mented Fountas. As an alternative, Paxar responded quickly by offers a complete line of the softest labeling alternatives, a wireless chip in it that is particular offering a new invention, a printing system that allowed manu- including woven and printed labels engineered with SoSoft™, to the customer, can track where she facturers to produce their own labels quickly and efficiently. and their advanced heat transfer labels. goes and can send out customized This event marked the beginning of a new era for Paxar, which Paxar acquired the heat transfer technology when it pur- marketing based on past shopping began positioning itself within the apparel industry as a verita- chased the Norwegian company NTP Gandrudbakken last patterns. Imagine: That cell phone ble one-stop global resource for its customers. July, and has since added heat transfer capacity in its North may not be just a friendly call making Carolina plant. This new development presents an ideal alter- Over the past two decades, Paxar’s strategy has led it to suc- plans for dinner, but rather an alert native to the underwear manufacturers who have recently cessfully advance the industry and extend its business by leaps stopped using sewn-in labels in some of their products. telling you your favorite sweater is on and bounds. Product innovation, strategic acquisitions in both sale or the latest spring colors have the U.S and abroad, and close attention to the globalization “Our position is that it’s not the label itself, but the technology just arrived in aisle two. trend has insured that Paxar kept pace with the changing mar- used in the label that makes it comfortable,“ commented Fountas. “When merchandisers engineer their products, they “Our world is coming to life. Not ket place. Paxar has grown into a highly vertical manufacturing take that into consideration. Soft.mark is a perfect example. just the grass and flowers of spring, company, catering primarily to the apparel and retail industries. It’s a line of label alternatives that, through technology, results but our clothes, our closets and draw- Paxar has developed and implemented new technologies to in the softest, most comfortable labels available.” ers and our appliances, as well. The create customized bar code solutions; woven, printed, and heat As it moves into the future, Paxar aims to consolidate the future is more than the ugly robot transfer labels; and security and counterfeit products. Additionally, from the television series ‘Lost in needs and demands of the retailing industry across all Paxar manufactures industry–leading solutions for inventory sectors worldwide. And as it continues to build its portfolio Space’ yelling, ‘Danger, danger! Will tracking and retail pricing systems, all the while aiming to satisfy of customers, Paxar will continue to hold fast to the motto: Robinson.’ It’s about everything we any and all merchandising needs “from concept to checkout.” “We make the works that make your sales work.” own or would consider owning offer- “We look at every one of our customers’ needs, whether that ing a hand to help us through the means supplying them with the actual labels or with in-plant For further information on Paxar’s products or services, please contact: day,” Accenture’s Ferguson said. printing solutions that allow them to most efficiently handle the Paxar Corporation • 105 Corporate Park Drive • White Plains, NY 10604 increasing amounts of variable information,” explained Fountas. • T: 888.44.PAXAR (1.888.447.2927) • F: 937.865.2554 • [email protected] 20 COUNSELS TO THE CLOTHIERS CONTINUED FROM PAGE 12 one licensing expert observed that in the cutting room. Merchandising is with a critical eye,” he says. “he caught on pretty quickly” and for someone who has sat behind the Kahn explains that whether it is “grasped the nuances right away. counter at one point.” DEPARTMENT STORES reviewing new lines or creating com- Generally speaking, the lawyers I Elaine Hughes of the executive pensation programs on how to give run into who become heads of com- search firm E.A. Hughes observes LEARNING NEW TRICKS employees incentive, his back- panies are not very competent and that while attorneys can function ex- CONTINUED FROM PAGE 15 ground helps him spot potential can be very difficult.” tremely well in core business posi- for the world here. They have to make the experience fun and easy.” problems that often can be nipped In the business of fashion, how- tions such as finance or operations, And, given the revenues department stores continue to rack up, it’s in the bud. “I love the fact that I have ever, there’s still the belief that they’re not likely to do well in mer- clear there are plenty of people who don’t consider them extinct.

MONDAY, MAY 19, 2003 MONDAY, the skill and experience without hav- maybe lawyers aren’t the ideal chandising and marketing posts re- Federated chief financial officer Karen Hoguet, on a conference call ing to be the lawyer,” he notes. cheerleaders to lead apparel firms. quiring creative design talent. with Wall Street last week, said the department store customer is alive Another example of a former at- Gene Silverberg, executive vice She explains: “The competency and well, according to research by the firm last fall. torney who gets kudos for a job well president at Hilco Merchant of attorneys is in their ability to read “There’s actually a very strong segment that really likes the depart- done is Aronsson, whom many agree Resources, observes: “I believe that and disseminate material, while ment store,” said Hoguet. “Yes, she is buying less there than she did five has a “good grasp of the industry.” merchants should run companies in much of the training for apparel de- years ago due to all of the new shopping options, but she still very much Aronsson, formerly the president the fashion industry because it is more sign comes out of product develop- likes shopping in the department store.” and ceo at Oscar de la Renta Ltd., of an art than a science. We should ment. There are exceptions, one was unavailable for an interview, but keep litigation in the courtroom, not being Peter Boneparth, whose back- ground is more investment bank- compensate for the potential $1 bil- from a business point of view.” ing than legal. Through his bank- lion in lost volume and the profit Attorneys who have jumped ing experience, he became very as- that could come with it. Fairly or un- ship, but are in other areas of the in- tute at understanding the apparel fairly, his legal background comes dustry, agree that their backgrounds business and then had this great up often in market discussions of have helped them and their clients Looking for opportunity to run one at Norton what’s gone awry in the once peace- in their new careers. McNaughton.” ful relationship between licensor Jeff Kapelman, who was a corpo- McNaughton Apparel Group and licensee. rate and real estate specialist before financing that fits? has since been acquired by Jones Talk to lawyers — those still prac- joining Hilldun Corp., a factoring Apparel Group. Boneparth, who ticing and others who have transi- firm, says: “The background really For over 50 years Century Business Credit Corporation has been now has his arms around a $4.3 tioned out of the legal profession — helps me in contract negotiations, helping middle market businesses around the globe capitalize on billion diversified business as ceo and the view is markedly different. whether I’m bringing in new clients of Jones, declined to be inter- Don Kreindler, litigation partner or working on new agreements with their opportunities. Our entrepreneurial approach, combined viewed for this article. And the at Phillips Nizer, says: “The legal existing clients. with one of the most experienced, flexible and committed teams jury is still out on his tenure, so to analysis is very helpful to anyone in “This industry, which is entrepre- in the industry, has created a track record of which we’re proud. speak, as he attempts to retain a se- business. A good lawyer is really half neurial in nature, needs access to peo- ries of licenses issued by Polo a businessman. While he gives legal ple who can think things through in Ralph Lauren or nimbly acquire advice to business people, he also systematic ways so those on the cre- We supply your business businesses or obtain licenses to has to give advice that is practical ative side don’t get hurt.” with tailor made solutions.

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FACTORING • LETTERS OF CREDIT • WORKING CAPITAL FINANCING TRADE FINANCE • ACCOUNTS RECEIVABLE OUTSOURCING 21 MONDAY,2003 19, MAY EUROPEAN LUXURY BEAUTY REVIEW AND OUTLOOK REVIEW AND OUTLOOK At THE ESTEE LAUDER COS., third-quarter profits attributable to common stock jumped 73.9 percent to $77.9 million, or 33 cents a diluted share. Sales advanced 10.5 percent to $1.24 billion, or 5 percent, exclusive of the impact of foreign currency translation. President LVMH MOËT HENNESSEY LOUIS VUITTON managed to dodge the effects and chief executive Fred Langhammer said efforts to revitalize the flagship brand have shown positive results. “We’re getting very good of the Iraqi war and SARS in the first quarter, but not the dramatic shifts in in- traction, so even with the difficult retail environment, the Lauder brand is performing very well,” he said. “We’re just at the beginning of ternational currency markets. A negative currency impact of about 11 percent the evolution of the Lauder brand.” The fall launch of its new women’s fragrance, Beyond Paradise, is intended to add to the brand’s hurt the performance of the luxury giant, which saw sales fall 5.2 percent to $3 momentum. For the full fiscal year, Lauder rubber stamped its previous earnings estimates of $1.28 to $1.33 a share, though the firm backed billion in the three months ended March 31. A drop in global travel because of off somewhat on the sales front. Net sales are slated for a rise of about 7 percent, which means a 4 percent increase on a constant currency SARS and the war in Iraq have only impacted DFS, which saw sales drop 6 per- basis.... Turnaround efforts at REVLON INC., especially increased brand support, drove net sales up 6 percent to $292 million, the first cent in March. But other regions fared well, with group sales up 10 percent in increase in several years, though losses of $48.7 million, or 93 cents a share, marked the firm’s 18th consecutive deficit. So far, the firm has the U.S. and up 15 percent in Japan. In the U.S., LVMH’s sales of fashion and recognized charges of $115 million for its revitalization program, which could tally an eventual price tag of $160 million. “We’re continuing leather goods advanced 11 percent; Louis Vuitton, 28 percent, and Sephora, 17 to execute the plan, which is very much focused on consumers, our retail partners and the organization, and we’re beginning to pull the percent. While all divisions experienced sales declines in net terms, only the levers on all three of these elements,” said president and chief executive Jack Stahl....Slammed by currency translation, L’OREAL’s first- watches and jewelry unit posted an organic sales drop. LVMH isn’t slated to quarter sales dipped 1.1 percent to $3.97 billion. On a like-for-like basis, though, the topline increased 10.4 percent. Dollar figures have been disclose first-half profits until September.... GUCCI GROUP’s fourth-quarter converted from euros at current exchange rates. The French beauty giant is on track to post double-digit profit gains for 2003 .... Of profits climbed 1.7 percent to $102 million, or 99 cents a share, from $100.2 PROCTER & GAMBLE CO.’s five business divisions, health care and beauty care were the leaders in third-quarter sales gains. Health care million, or 98 cents a share, boosted substantially by cost cuts and a lower tax led all segments with an 18 percent rise in sales to $1.43 billion and produced a 19 percent jump in net earnings to $147 million from a year burden. Revenue for the quarter rose 1.6 percent to $763.9 million from $751.7 ago. Unit volume increased 18 percent. Beauty care, P&G’s second-largest business after fabric and home care, saw sales rise 10 percent to million as double-digit growth at Yves Saint Laurent, YSL Beauté and brands $3.03 billion and net earnings grow 19 percent to $463 million. Unit volume was up 9 percent on the strength of Pantene, Head and like Bottega Veneta compensated for a 7 percent decrease in sales for the core Shoulders and feminine care. Collectively, health care and beauty care account for 41.5 percent of P&G’s net sales and 44.9 percent of the Gucci brand. The Gucci division saw its sales drop 7 percent to $472.9 million company’s net income. P&G also is seeing more than organic growth. Recently, the consumer products giant agreed to acquire the majority from $508.7 million in 2001. The strong fourth quarter only partially counter- of Darmstadt, Germany-based beauty and hair care firm Wella.... AVON PRODUCTS INC.’s fourth-quarter profits rose 74.8 percent to balanced a weaker first nine months for Gucci. In 2002, net profits dropped $193 million, or 80 cents a diluted share, while a year-ago charge eased comparisons. Without the charge, earnings increased 8 percent. 27.4 percent to $242.4 million from $334 million. Revenues slid less than 1 per- Revenues strengthened 5.7 percent to $1.85 billion for the three months, or grew by 14 percent without the negative effect of currency cent to $2.71 billion from $2.75 billion.... A 22.4 percent spike in second-half translation. Units advanced by 16 percent, while the number of active representatives climbed 13 percent. Chairman and chief executive revenue allowed BURBERRY GROUP PLC to breeze past its revenue target officer Andrea Jung called last year “the strongest year in Avon’s recent history,” and described it as the beginning of “an er a of break-out for the year ended March 31. Second-half revenues jumped ahead to $502.4 growth for the company.” Earlier this year, the firm pulled its fledgling retail brand BeComing from about 90 J.C. Penney Co. doors.... In a million from $411 million in the last six months of the prior year. This would more than $400 million bottom-line swing against a year ago, SHISEIDO GROUP returned to profitability in fiscal 2003 with income of place full-year sales at $932.1 million, 18.9 percent ahead of last year’s $783.4 $211.2 million for the full year. The firm endured one-time losses of $80.5 million last year, and $493.1 million the year before. Sales picked million and nearly $40 million past the goal of $894.9 million established inter- up 5.3 percent, to $5.4 billion. Dollar figures have been converted from the yen at current exchange rates. nally, although never released by the company, at the time of its initial public of- A SIGH OF RELIEF ABOUT THE WAR IN THE PERSIAN GULF IS FOLLOWED BY TIME IS MONEY. TREPIDATION ABOUT THE WE GIVE YOU MORE OF BOTH. POTENTIAL IMPACT THAT

SARS COULD HAVE ON THE Much more nimble, independent and streamlined than MARKET CLIMATE IN ASIA. banks, we’re the financial backbone of sophisticated, successful businesses all over the globe. Our clients benefit from customized financial solutions and the fering last summer. Burberry plans to report full-year results, including profit figures, on May 22.... Double-digit sales growth in accessories and markets like breadth of services that we provide. We are known for Asia and Italy lifted BULGARI’s first-quarter profit and revenue as the firm re- our expertise in: iterated its concerns over the damaging impact of SARS. Net profit for the three months ended March 31 rose 26.7 percent to $13.2 million from $10.4 Factoring: million in the year-ago period. Revenue rose 3 percent to $185.2 million, but • Full-Service Factoring and Accounts Receivable Bulgari said growth would have been 9 percent at constant exchange rates.... Management Services Cerruti parent FIN.PART, which is seeking to recapitalize after auditors reject- • Web-Based “Factronics” System for fast credit approvals ed its balance sheet, managed to swing into the black for the first quarter of the year. Net profit for the three months ended March 31 came to $736,765 com- • Advance, Collection & Maturity Factoring pared with a loss a year earlier of $4.11 million. Sales rose 1.7 percent to $150.7 • Trade Finance Services (Letter of Credit) million from $148.2 million, but the company said it gained 7.1 percent, strip- ping out results from the Boggi store chain, which Fin.part sold in February. Asset-Based Lending: The firm said sales in April rose 29.7 percent to $33.1 million from $25.5 mil- • Loan/Revolving Credit Lines secured by receivables, lion.... HERMÈS INTERNATIONAL posted better-than-expected first-quarter inventory, or other acceptable collateral results, but they were tempered by the detrimental effects of the strong euro • Debtor-In-Possession Financing and their prospects by concern over the disruptive effects of SARS on business in east Asia. Slammed by negative currency effects, sales at Hermès fell 3.2 per- • Bridge Real Estate Loans cent to $336.4 million in the first quarter versus $347.6 million a year ago. Find out how the Rosenthal & Rosenthal equation will However, analysts characterized it as a healthy performance since organic sales growth, eliminating the effect of currency fluctuation, amounted to 5.5 percent enable your company not just to thrive, but to conquer. in the period — above their expectations. They praised strong sales of leather goods, up 10 percent in real terms; impressive figures in Japan, up 14.2 percent STRATEGIES. SOLUTIONS. SERVICE. in local currency, and the rest of Asia, up 18.6 percent in local currencies.... MARZOTTO, owner of the Valentino and Hugo Boss fashion houses, said its sales for the quarter ended March 31 rose 3.4 percent to $593.9 million, aided Contact: Michael Stanley 212-356-1497 Executive Vice President, Factoring by the consolidation of Valentino, which it bought in spring 2002. Clothing ac- Sheldon Kaye 212-356-1481 Executive Vice President, Asset-Based Lending counted for 86 percent of the total with textiles comprising the balance. Marzotto reiterated that Valentino is still on track to break even in 2004. In 2002, Valentino widened its operating loss to $13.8 million from a loss of $3 million the year before. Sales rose to $149.4 million from $144.7 million. Rosenthal & Rosenthal, Inc. 1370 Broadway, New York, NY 10018 • www.rosenthalinc.com 22 THE WWD BUSINESS

MONDAY, MAY 19, 2003 MONDAY, IT’S DECISION TIME BY ALLAN ELLINGER SMART VENDORS REALIZE THEY’RE EITHER BUYERS, SELLERS OR LIKELY TO BE LEFT BEHIND.

o one has ever doubted that between manufacturers and retail- bring value added in the form of ufacture; with a limited number of available the fashion industry is risky. ers have changed forever. All ven- brand equity and design expertise; understand that profits will be retailers to sell in a given channel of Now, with the economics of dors need to understand that if they are technologically advanced; made on the “buy” side, not just the distribution, they can’t increase fashion superceding the fail to initiate change within their have compressed production cycles “sell” side; their businesses organically. The vagaries of fashion, the companies, they will fall victim to and mastered speed to market; are technologically advanced and only way to grow or, in some cases, rules of engagement this irreversible revolution. are able to manage product cycles possess systems that are state-of-the- stabilize volume is to sell new prod- N The problem is that too many for retailers by using retail data links; art, not state-of-the-Eighties, and ucts into the channel or open other are willing to supply merchandise have permanently driven down { operators don’t understand the channels of distribution. extent to which the changes are on an as-needed basis, and their operating costs to ensure prof- Smart operators realize that it is required, the speed in which they are willing to subsidize retail itability over the long term. often less expensive and more pro- must be implemented and the operating margins. These companies will be profes- ductive to acquire a company than options available to them. The real survivors of this revolu- sionally managed against a careful- to start a new division. Conversely, As retail consolidation contin- tion will be large, well-capitalized ly conceived annual financial plan. other operators have concluded ues and fewer retailers dominate companies that are multichannel They will be innovative, nimble, they are much better off being part the market, the survivors will look distributors who: quick to react and bottom line-, not of a larger organization that can to consolidate relationships with are product diversified; top line-driven. propel their business into new vendors that: are market-driven, not produc- This means that smart vendors channels of distribution, source GUEST SPOT are big, and have significant tion-driven; realize they must diversify their venues and tap into new state-of- source globally rather than man- businesses. They also realize that { financial resources; the-art technology.

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IDBBank is a service mark of Israel Discount Bank of New York. Total assets exceed $6 billion. MEMBER FDIC 23 MONDAY,2003 19, MAY It also means that virtually every Once you’ve concluded this Most transactions in our indus- to be interest from the “target,” the the business for a reasonable period vendor in our industry falls into one exercise you should have a fairly try are strategic. That is, one apparel company’s principals should have of time once the sale is concluded. of three categories. They are either good sense as to which course of or fashion company buys another. an initial meeting to determine the It’s important to be sensitive to the seeking to buy a company or compa- action to take. Why? From the seller’s perspective, compatibility of the parties, the emotional trauma of the seller, who nies, seeking to sell their business or If you decide to sell your business strategic buyers bring more to the strategic advantages of combining, may not only be selling his creation, are temporarily undecided as to there are two types of buyers that table than just money. In addition to the effect on the two entities’ cus- or that of his family, but coping with which way to proceed. may be available to you: financial hopefully providing a strong capital tomers, the ability of a former prin- a major life change as well. If you are undecided, start by and strategic. Financial buyers, such base, strategic acquirers can provide cipal to work for someone else and The key to any successful strate- taking the pulse of your business as venture capital firms, generally market clout, sourcing advantages, whether there’ll be synergy or canni- gic transaction lies in integrating the and asking yourself and your objec- buy companies with two things in access to more sophisticated tech- balization in the fusion. newly purchased company into the tive, independent advisors the fol- mind: the rate of return they can get nology, warehousing, distribution If the chemistry works and the buyer’s business. More transactions lowing questions: on the capital deployed to buy the and other corporate services that parties conclude that there is a reason fail because of poor integration than Do my operating economics make business, and the windfall they can provide economies of scale. As to continue the conversations, both for any other reason. sense given my current business expect when they exit the invest- importantly, strategic buyers also parties’ advisors should have a prelim- Successfully executing and structure? ment. While financial buyers may can bring management expertise inary discussion on the proposed deal implementing such a transaction Can my existing capital base sus- provide an eventual exit for the prin- and a more sophisticated business structure and how the purchase price requires a top-notch advisory team tain my business? cipals and hopefully adequate capi- structure. Strategic buyers can bet- would be calculated. If it appears that — including your outside account- Is my management team strong tal to manage the business, it is ter appreciate the values inherent in both parties’ needs can be met, the ant, attorney and investment enough to adapt to the dramatic unlikely that they can have much the business they are looking at. process should continue, but then it’s banker. In addition, you should con- changes affecting this industry? operating impact, as they rarely have The risk to the seller, however, is time to do the homework and not sult a tax accountant so that the Does my business have a reason to specific industry expertise or bring that very often the best strategic buy- skimp on due diligence. If you are transaction can be designed to be as exist and am I a value-added vendor? economies of scale. Financial trans- ers are competitors. Managing confi- going to spend your money to buy a tax efficient as possible, a key to Is my distribution sufficiently actions are generally based on the dential information, such as distribu- business, you should know the busi- maximizing the seller’s proceeds. As diversified to protect my margins? projections compiled by the seller, tion, sourcing and costing, and avoid- ness you’re buying, as well as the sell- a buyer, you want to be able to How effective is my sourcing resulting in a stand-alone company ing “tire kickers” is paramount. On er, by the time the deal closes. Have expense as much of the purchase structure given the quota changes left to its own devices to repay the the other hand, strategic buyers often your chief financial officer prepare a price as possible. Ultimately, a com- expected to occur in 2005? purchaser and show a bankable cash offer a better purchase price since realistic, projected cash flow and pres- promise will be needed to satisfy Are my systems state-of-the-art? flow and pretax operating profit. they can reduce their payback period ent it to your lender or financing both parties’ requirements. Can I permanently reduce my While financial buyers will do more quickly by leveraging the sources. Be sure you have their sup- If you are still undecided as to expense base? their due diligence, it is generally acquired company’s back-end opera- port and keep your lender informed whether you are a buyer or seller, Am I risking my capital and can I limited to an understanding and tions on their own organization. about the deal’s progress. Since the don’t be schizophrenic and try to go get an adequate return on my capital optimistic validation of the financial A carefully conceived strategic lender will inevitably finance a por- down both roads simultaneously. It given the current complexities of the projections prepared with assump- purchase can solve many of the tion of the purchase, it will want to won’t work. Rather, evaluate your industry? tions provided by the seller. With acquirer’s needs, but it’s critical to review and approve the deal. company, carefully consider your How do I protect the company’s few exceptions they generally do not carefully identify those needs and Since the owner-operator is gen- options and make a decision. net worth? have the wherewithal to drill down not rationalize one’s way into the erally the “spirit” of the business and Does the company have an ade- and fully understand the dynamics deal. Some of the best deals are the often controls the company’s major Allan Ellinger is the senior managing partner quate succession plan in place? driving the company. This often ones you don’t do. Once you or your customer and sourcing relation- and co-founder of MMG, a New York-based investment banking, restructuring and What is in the best interest of my leads to disappointing results and professionals have identified a can- ships, it is to everyone’s advantage to consulting practice focused exclusively on the shareholders? post-closing disagreements. didate company and there appears ensure the principal’s continuity in apparel and fashion industry. The time to think Having a reliable partner like Checkpoint® about another tag and label will put your mind at ease. Wondering if you’re getting all you should from your resource is current resource? It’s time to consider Checkpoint.

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checkpointsystems.com 25 Stars Come Out for Stella in London MONDAY,WWD, 2003 19, MAY By Samantha Conti McCartney said the last thing she wanted and Sarah Harris was an intimidating and uncomfortable atmosphere. “There is nothing in this LONDON — Stella McCartney’s celebrity- store that I wouldn’t have in my own pulling machine kicked into overdrive at home,” she said. “A lot of love has gone the opening of her first London store into this place, I think it’s very homey.” Thursday night. Guests stepping over the She said the marquetry — a 17th-cen- threshold at 30 Bruton Street included tury decorative technique using carved Madonna, Tom Ford, Valentino, Giancarlo and inlaid wood — reflects her love of Giammetti, Mario Testino and Tracey the bespoke. “I like things that take time Emin — whose neon installation, Just to create.” Love Me, hangs on a wall in the store. Not surprisingly, partygoers loved “I have so many butterflies, it’s all a what they saw. bit scary, but I’m so excited,” said “I love Stella, and I think the store is in- McCartney, who was dressed in a silvery- credible,” said Ford, the creative director gray satin coat. of Stella McCartney’s parent company The store is the designer’s second unit Gucci Group. “It’s very mature, very grown after New York, which opened last up. I’m so proud of her. It’s just incredible.” September in the heart of the Meatpacking Valentino described the interiors as a District. As reported, McCartney has “fresh display,” while Testino called the signed a lease for her third store at 8823 store overwhelming. “Every room is just Beverly Boulevard in West Hollywood, so different,” said London man-about- which will open this fall. Future units will town Dan Macmillan. likely be in Paris, Milan and Tokyo. The first floor, which houses the The 10,000-square-foot London store is ready-to-wear collection, is less ornate housed in a four-story Georgian town than the ground floor and showcases the house and has a fairy-tale, girlie feel to it. period restorations that McCartney and Above: Tom The ground floor walls and floor are dec- her team carried out. There are herring- Ford signs orated with marquetry images of an en- bone-paneled wooden floors and classi- Stella autographs; chanted winter forest, complete with cal cornicing from the Georgian period. McCartney shadows, sun and a floating fairy. The dressing rooms are covered with Madonna The walls, inspired by illustrations from handblocked wallpaper — butterfly pat- came out to the early 1900s, also boast doors that pop terns in particular — that McCartney and McCartney’s company is 50 percent fete the new out — “Alice in Wonderland” style — to re- her team designed. owned by Gucci, with the designer own- store. veal bags, shoes and other accessories. The third floor is for VIP clients, and ing the other half. As with other Gucci At the back of the store, there is a for McCartney’s tailoring service. subsidiaries, the company declined to glass-enclosed winter garden with its McCartney has hired the Savile Row tai- forecast the store’s first-year sales. How- own maple tree. The walls of the shoe lor Henry Rose to execute her designs for ever, real estate sources estimate that the room next door are papered with a hand- men and women. The service also marks store, housed in the former Lefevre printed monkey design fabric and fes- McCartney’s first foray into men’s wear. Gallery, should expect to generate be- tooned with tiny vintage trinkets includ- The third floor will also house a spe- tween $4 million and $5 million in annual ing brooches, earrings and necklaces. cial room for McCartney’s first fragrance, sales, based on the average sales of stores

In an interview before the party, which will launch in the fall. in the area. JENKINS TIM BY PHOTOS

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For more information on advertising in these special WWD coated stock supplements, contact Alix Michel, at 212-630-4596 or Paul Bernard on the West Coast, at 323-951-1800. WWDMediaWorldwide® 26 Color and Prints WWD, MONDAY, MAY 19, 2003 WWD, MONDAY, Continued from page 2 cially those by Manolo Blahnik, Jimmy Choo and Dior. “What it’s telling me is people have gotten over mini- “When it’s uncertain times, people are more selective malism. We’re in a time of embellishment and detail. We in what they purchase. They’ll buy key looks or statement want more visual bang for our buck. People have a full pieces,” said Burke. closet of plain stuff, and will go on wearing it and won’t Another strategy to bring consumers into the store is store buy more of it. People are wearing things for longer peri- events, such as those for hat designer Phillip Treacy and ods of time. There’s not that pressure. No one feels they Vogue editor-at-large André Leon Talley, as well as trunk have to wear a certain thing,” he observed. shows. “We pushed our Versace and Narciso Rodriguez trunk The difficult season has consequently turned highly shows. For us, you bring customers in for a trunk show, and promotional — just as the last three seasons have been. they inevitably buy stock as well,” said Burke. Several retailers, publicly and privately, bemoaned the Bloomingdale’s is enticing consumers by tieing into fact that Saks Fifth Avenue jumped the gun and held its movies like “Down With Love,” starring Renée Zellweger annual one-night sale (4 to 8 p.m.) on May 1 for special and Ewan McGregor, featuring it in both its windows and a customers where a lot of the merchandise was promoted department on the third floor. “We’re tieing in with movies at 40 percent off. Stores believe it was a slap in the face to and having clothes made inspired by films,” said those trying to do a full-price business. Jaqui Lividini, sen- Ruttenstein. ior vice president of fashion merchandising and communi- “Now that the weather is nice, business is starting to cation at Saks Fifth Avenue, said all the Saks stores run pick up. Designer handbags are doing very well, and ac- this sale every spring for its Saks First customers from 4 to cessories, in general, are doing very well,” he said, adding 8 p.m. on selected items. miniskirts also are strong for the store. “That’s how they have trained their customer to do Saks’ Lividini said that every season the retailer cre- business,” said Jeffrey Kalinsky, owner of Jeffreys. “I don’t ates a Short List of “must-haves” for the season that it put compete with them. The regular-priced fashion-oriented in its catalog. This year’s list includes the miniskirt, novel- consumers don’t shop those sales and have already ty pants and the trenchcoat. bought. It degrades the stores that sell high-end merchan- “It’s all about differentiated product. In the customer’s dise. They’re stepping on their own foot. vocabulary, it’s about something new that’s not in her closet “I just ignore it. If I was an executive at another major already. It excites them. Anything novelty is doing well, store, and the direct competition with that store was doing whether it be color, silhouette, embellishment or detail,” she it, I’d go crazy. Because I’m not, I feel sorry for the store said, also pointing to footwear and handbags as key buys for that has to operate like that,” consumers at a time when the added Kalinsky. People are wearing things economy is challenging. “There should be a law that While the Saks Department sales don’t happen until June,” “for longer periods of time. Store Group’s sales in April were said Julie Gilhart, vice president off 9.1 percent, sales at the luxury and fashion director at Barneys There’s not that pressure. Saks Fifth Avenue unit increased New York. “Some customers are 6.3 percent for the month. The Mary Quant’s ‘wear-now’ customers and they’re No one feels they have to gain was attributed to shifting a trained to wait for the sales.” She scheduled promotional event from miniskirt has said a store like Saks is sending May last year into April this year, been a brisk wear a certain thing. been a brisk out a message that “the sale is just according to the company. The seller at seller at around the corner, but on the other — David Wolfe, The Doneger” Group company cited the continued weak Henri Bendel. hand, they have to make their fig- economic environment and the ures.” She feel stores should work together to avoid this. persistence of below-normal temperatures that adversely Diane Von Despite her criticism of Saks, Gilhart described the affected sales across many of Saks’ markets. The intensity Furstenberg’s season as challenging. of promotional activity was increased at both Saks depart- printed “Spring is such a sensitive time of year. Designers are ment stores and Saks Fifth Avenue units in an attempt to dresses are under a lot of pressure to produce quickly, and we were in stimulate sales, the company said. a hot a war. The consumer confidence was a little eerie,” said Categories with the best sales performances for Saks spring sellerseller. Gilhart. “In the April we were having snow, and in May, it’s Fifth Avenue in April were women’s designer apparel, at Henri freezing outside. I’m amazed how well we did this season men’s apparel and furnishings, women’s contemporary Bendel and despite all the hurdles we had to go over.” sportswear, cosmetics, shoes, handbags and fine jewelry. Scoop. Gilhart said the Barneys customer always seeks out The softest were private brand women’s apparel, intimate whatever’s “new.” apparel, “soft accessories,” fashion jewelry and Off 5th. “People want new things. A new designer, a new thing “You have to have a focus, and for us, it’s dresses, color you haven’t had before, a new detail, any designer you’ve and print,” said Joan Kaner, senior vice president, fashion never seen before. New also feels special, and a little director at Neiman Marcus. She cited such looks as Prada’s more selective in a way. It’s like buying custom. If it’s new, navy and white print Chinese dress, Gucci’s pink satin you’re one of the first people to get it and for a discrimi- dress, Missoni’s knit halter top and skirt, and Bluemarine’s nating fashion customer, that’s very important.” floral halter top and skirt as all selling very well. Gilhart said Barneys has done well with several of its “It’s color and reaction to color. Everyone’s had a horrible new lines, such as Proenza Schouler, Behnaz Sarafpour, winter and all sorts of snow. We’re responding to having warm Lanvin and Zac Posen. In addition, the store has been weather. It’s definitely novelty that’s selling,” said Kaner. doing well with its denim lines for several years. “Denim “Dresses are key,” she added, citing a bicolor dress by is still really strong, and it is for fall too,” she said, even Narciso Rodriguez. “Miniskirts have been selling all along though there are signs the fabric is losing steam at the in more casual styles, including cargo skirts, and pants, middle and mass ends of the market. “The spring lines such as cropped pants by Piazza Sempione continue to be were a little bit different, in the details; they were more hot sellers.” subtle, chicer and sophisticated.” As far as best-selling accessories, Kaner said: “It’s still Gilhart said Barneys has sold a lot of cargo pants, which handbags. The designer handbags are selling and shoes weren’t a big item last spring, as well as fashion shoes and have suddenly picked up. Open sandals, from flat to quite handbags, novelty knits and miniskirts “wherever they are high heels, and ankle wraps, are all doing well.” — denim, printed fabric, Barneys private label. It’s such a Ed Burstell, vice president and general merchandise good summer item. It’s something new and it’s sexy.” manager of Henri Bendel, agreed that color is the big “If I were to define the season, I think color is getting draw this season. people into the stores, especially in ready-to-wear, shoes “Number one was color, and it was across-the-board in and handbags,” said Robert Burke, vice president and sen- ready-to-wear, designer and accessories. The biggest dis- ior fashion director, citing Marc Jacobs’ colorful handbags. appointment was black-and-white, which may do well in He said the spring season has been “very solid” so far. the fall. It didn’t sell quite as well as we hoped,” said “We’ve also had very strong selling of color from every- Burstell. He noted that Pucci head scarves and novelty thing from Etro to pastels from McQueen, Valentino and totes have been strong sellers. “We’ve done a huge earring Chanel. Things that are not unique or special are particu- business, with chandelier styles,” said Burstell. larly difficult. With everything going on economically and “Diane Von Furstenberg has been phenomenal this politically, a shot of color has appealed to them [con- spring, and has been consistent every single delivery. The sumers]. Calvin’s and Donna’s collections have been ex- Anna Sui business has really turned on, and all the key tremely good collections for us. It’s a feminine moment for items, such as cargo pants in cropped looks and satin have us,” he said. He said that Donna Karan’s polka dot dresses sold well, as well as terry cloth hoodies.” and Calvin Klein’s jersey prints are selling well. Burstell also said he is doing very well in the New Among the bestsellers at the store are skirts and dress- Creators Department, with lines such as Luella, Daryl K, es in florals and prints, and dresses that “emphasize the Rick Owens and Matthew Williamson. “When you put it all

QUANT PHOTO BY PATRICK MCMULLAN PATRICK BY PHOTO QUANT waist.” Colorful footwear is another strong category, espe- together, we’re running a low-single-digit increase,” he said. 27 ts Drive Bumpy Spring MONDAY,WWD, 2003 19, MAY

“When we saw it could be an ‘iffy’ season, we layered on DDonnaonna KKaran’saran’s Narciso more promotional [event] activity. Floor by floor, we saw polkadot dress Rodriguez’s we could do more this spring and had more in-store activi- has been a big dressesbicolor dress have ties,” said Burstell. The store hosts “Girls’ Nites at hit this springspring. at seenhas strong seen Bendels,” offering lifestyle workshops and shopping, which Bergdorf Goodman. sales strongat Bergdorf sales are always sold out. Goodmanat Saks and As for key looks, Burstell also pinpointed the miniskirt. NeimanFifth Marcus.Avenue. “It was bought by all ages and vendors, from Mary Quant in the ready-to-wear department to Anna Molinari. The pro- portions have changed. Everyone has had enough of the midriff. They want to show their legs.” Paul Raffin, executive vice president of merchandising at Express, said the chain anticipated there would be pent-up consumer demand because of the economy and political en- vironment, so it switched its assortment into a more casual mix. “It was beach and surf inspired with terry separates and other knit fabrics with interlocks. We had a tremendous color palette and lots of graphic prints and athleisure de- tails. It picks up a ‘Juicy Couture’ kind of influence,” he said. “They want clothes that make them happy and they feel good. Clothes that are soft, colorful and easy to wear, not so hard-edged,” said Raffin. He said bra tanks and mini-Ts are selling very well for Express. “We’re not in a huge print trend right now, but selectively. It evokes a sense of fantasy and surf inspiration. It’s a lifestyle we can all aspire to.” The Express division was up 5 percent in same-store sales in April, against a record-breaking season last year, said Raffin, adding, “We feel that there’s momentum build- ing, and we’re looking forward to the second quarter that will be even better.” Stefani Greenfield, co-owner of Scoop, said her busi- ness is performing strongly and that, despite economic fac- tors, “women don’t lose their desire to shop. Their ability to spend is different, and we’re keying into the great items. This spring, the miniskirts are new, as well as Joie sating cargo pants and some“great new trouser denim styles.” She said the key is to make the customer excited, “as if they’re a kid in a candy store. They don’t want to walk into these stores where everything’s marked down. It’s not about the price. You have to have an element of fantasy.” When a customer walks into Scoop, she gets hit by color. Prints are doing well, especially those by Diane Von Furstenberg and Just Cavalli, said Greenfield. Kalinsky of Jeffreys, said: “All in all, it’s been a good sea- son, certainly good enough. At this point, spring is about done, and in a month, we’re getting in high gear to sell fall. If the consumer hasn’t bought a new shoe, or a new hand- bag or a new outfit, she’s not going to look current. We sold color very well, and prints very well, especially from Pucci and Marni. We sold shoes unbelievably well, the best-selling styles are mules and sandals. Silver was one trend in shoes and accessories, and colors and prints were important. “I had a good spring. I feel very fortunate,” said Kalinsky. In April, Pacific Sunwear of California posted a 16.9 percent increase in same-store sales, driven by the junior business. And teens are picking up armloads of this sea- son’s uniform, Dickies capris paired with short-sleeved fit- ted T-shirts, according to Debbie Shinn, the Anaheim, Calif.-based retailer’s vice president and general merchan- dise manager. Screen-printed boy tanks with denim shorts, halter tops and side-tie bottoms in two-color scenic prints in swimwear and longer length board shorts are also hot. Seemingly ubiquitous styles have also kept pace, including anything black and denim. “PacSun is not focusing on fads,” said Shinn, noting the chain has answered to consumers’ demand and will bank on the looks to carry them through summer. “We specialize in branded and private label casual and that just happens to be where the girls are right now. They know they can come to us for these casual options.” Oren Hayun, principal of young contemporary chain Planet Funk, said the big enticement at his nine Southern California stores is military and workwear-influenced bot- toms and outerwear softened with silk and satin flowing sexy tops. Denim is going more traditional with five pock- ets and subdued washes and “absolutely no whiskering,” he added. “That’s a big thing,” he emphasized. “It’s really got to be basic.” Florescent mesh tops and a considerable amount of silver accessories and belts are also selling briskly, jump-started by a rock and punk resurgence. Hayun pointed out that the consumer is behaving some- what differently these days by looking for something with a highly perceived value first and newness and fresh design second. As for spring business, it’s looking up. “Since the war ended, we’ve seen quite a spike in demand and it’s probably left over from the whole CNN effect,” he said. “There’s higher mall traffic now. Consumer confidence is up. Mother’s Day was packed. It was like Christmas.” — With contributions from Juniors fueled Pacific Sunwear’s 16.9 percent sales increase in April. Here, PacSun’s spring ad. Kristin Young, Los Angeles 28 Financial Wal-Mart to Open in Nassau County Mall Weekly Stock Index 52-Week Sales Amt High Low P/E (00’s) Last Change By Evan Clark stores around the country, at more than 30 discount stores in Broadline Retailers least some of which are adjacent malls, said the analyst. NEW YORK — “Let’s stop by the to metropolitan areas. “We’ve “Both [Wal-Mart and Target] ex- 5.28 3.37 Bon-Ton Stores 6.7 462 4.10 0.13 food court and then go to Wal- been going to malls for about 10 press a real estate preference for 31.20 12.32 Dillard Dept. 8.8 26183 14.16 -0.02 Mart.” years, and it has been a success- single-level freestanding stores 44.10 23.51 Federated 10.4 108981 30.99 -1.01 Shoppers at the Sunrise Mall in ful venture,” she said. “It will with large parking lots, but as tradi- 3.58 0.94 Gottschalk's - 829 1.43 0.01 WWD, MONDAY, MAY 19, 2003 WWD, MONDAY, Nassau County, N.Y., might be say- continue according to demo- tional growth opportunities dimin- 25.55 14.07 J.C. Penney 14.8 278984 17.33 0.18 ing just that when Wal-Mart Stores graphics and available property.” ish, mall positions may emerge as Inc. cuts the ribbon on a two-level Citing the Directory of Major an increasingly attractive option,” 37.08 17.81 May Dept. Stores 12.6 94420 20.63 -1.10 discount store on May 28. Malls, Goldman Sachs analyst noted Strachan in a research note. 15.65 6.66 Saks 18.2 31853 8.80 -0.15 The 131,000-square-foot store George Strachan said Sunrise was Expansion in this direction, 59.90 18.25 Sears 5.9 188575 27.30 0.09 will house a McDonald’s and a a solid ‘B’ mall with total retail though, would be restrained by 44.13 24.90 Target 18.9 392029 34.05 -1.22 pharmacy in addition to the 32 sales of $271 million out of 1.26 mil- slow mall anchor turnover, he 4.35 1.48 Value City 265.0 4550 2.65 0.25 other general merchandise cate- lion square feet. The Wal-Mart, he said, adding that a major ration- 59.30 43.72 Wal-Mart 28.9 506859 52.92 -2.88 gories carried in Wal-Mart dis- said, would replace a J.C. Penney alization of the department count stores, including apparel. store and join the more than 130 store industry could double or “We’re always looking to ex- other stores at the mall, including treble the possible expansion of Softline Retailers pand in our markets and New Macy’s, Sears, H&M, Wet Seal, Old discounters into malls. 32.77 17.05 Ann Taylor 13.5 62321 23.00 -0.27 York is an area that we are look- Navy and American Eagle. “Wal-Mart management views 1.82 0.55 Bluefly - 1682 0.91 0.07 ing to expand to meet the cus- Strachan estimated that 600 to metro-market expansion as a 23.50 15.40 Burlington Coat 10.8 3929 16.20 -1.32 tomer need,” said a spokeswoman 800 mall anchor slots could open huge opportunity and recognizes 8.67 2.70 Charming Shoppes 11.0 34387 4.24 -0.54 for the world’s largest company. over the next 10 years, 300 to 400 that in such areas, ‘retail has to In urban areas, she noted, of them in densely populated be where retail used to be,’” 24.49 13.02 Chico's FAS 26.1 95027 20.15 -0.85 Wal-Mart’s expansion opportuni- urban/suburban areas, where wrote Strachan. “Operating a 17.50 11.06 Dress Barn 14.3 4020 13.38 -1.37 ty boils down to available space, real estate is hard to come by. As mall store, a multilevel store or 16.00 8.20 Foot Locker 10.3 51670 11.71 0.18 since the demographics of that many as 200 to 300 of these slots even an undersized store in such 18.03 8.35 Gap 30.9 346430 16.38 -0.77 customer base are favorable. could be filled by discounters. locations is better than operat- 78.83 44.00 Kohl's 27.8 282529 53.40 0.78 Wal-Mart has about 15 similar Target Corp. already has ing no store at all.” 22.34 10.88 Limited Brands 13.9 116744 13.55 -0.47 39.66 23.75 Neiman Marcus Group 12.2 4327 32.75 0.22 26.87 15.00 Nordstrom 24.7 84479 16.16 0.14 24.45 10.81 Pacific Sunwear 20.1 115583 21.43 -1.95 Penney’s Pushes Turnaround Plan 47.77 31.85 Ross Stores 15.6 72981 39.49 -0.60 8.40 5.66 Syms - 401 7.63 0.36 39.64 20.59 Talbots 13.3 14154 26.51 -1.47 By Rusty Williamson shoes and cosmetics. remedied by fall, in time for In 2002, Penney’s popular back-to-school. 21.48 15.30 TJX 17.7 237442 18.10 -1.02 PLANO, Tex. — J.C. Penney Co. Internet business saw gains of Conversely, home inventories is keeping the faith. 17.8 percent while catalog sales are leaner than a year ago, and Vendors Despite the mood of disappoint- declined 22 percent, a slide that the category remains a star at 57.10 41.55 Alberto Culver 19.7 16399 50.84 0.34 ment that prevailed at the $32.3 bil- was below expectations despite Penney’s. “Furniture has made a lion retailer’s annual sharehold- the category’s ongoing revamp. lot of progress,” said Castagna. 59.30 43.49 Avon 25.2 69268 57.92 0.83 ers’ meeting Friday at company “In summary, 2002 marked a “We’re focusing on really truly 23.40 13.65 Cherokee 10.1 1040 15.71 -0.29 headquarters here, its executives year of good, solid progress for moderate price points and a bet- 47.30 17.19 Coach 30.5 42922 45.25 -0.25 remained confident that the 1,049- our department stores. Last ter balance of assortments that 48.76 27.46 Columbia Sportswear 16.7 27870 45.76 -0.57 unit moderate giant will complete year, our department stores will appeal to younger shoppers.” 38.30 25.20 Estee Lauder 36.0 42523 33.74 0.64 its five-year turnaround plan that moved toward full implementa- Penney’s plans to launch 24.61 14.99 Fossil 16.5 12687 20.73 0.75 kicked off two years ago. tion of centralization. It has af- three freestanding department Penney’s is struggling to re- fected every part of the organi- stores in November that will av- 8.49 4.49 G-III 103.3 403 6.07 0.07 bound from a punishing first zation: merchandising, market- erage 78,000 square feet and fea- 99.45 82.53 Gucci35.1 6634 97.60 0.40 quarter that saw comp-store ing and all of the operating ture tightly edited merchandise 7.31 3.30 Guess - 2520 4.34 -0.56 sales plunge 4.9 percent, a process,” Questrom added. mixes. The stores will be in 41.68 25.61 Jones Apparel 11.0 54439 28.29 -0.06 slump magnified by economic “But now, as the massive Dallas, Indianapolis and 32.50 19.70 Kellwood 73.1 14639 27.75 -2.13 uncertainty and a difficult retail structural change of going from Minneapolis. 29.95 16.00 Kenneth Cole 15.2 14038 20.19 -0.52 environment marked by tight- decentralized to centralized is “Only six to seven new malls fisted, value-seeking shoppers. getting near the end, the depart- are being built this year in the 34.43 23.55 Liz Claiborne 14.9 40238 33.65 -0.03 Vanessa Castagna, executive ment store team can fully focus U.S.,” said Questrom, who said 13.00 3.67 Mossimo 5.3 2429 4.04 -0.12 vice president, chairman and on their five key strategic priori- though Penney’s remains a 25.15 14.60 Movado 13.9 952 23.04 1.51 chief executive officer of Penney’s ties: merchandise, marketing, mall-based business, it will con- 14.50 8.06 Nautica 16.4 6826 9.73 -0.37 stores, catalog and Internet, store environment, expense con- tinue to explore new avenues 39.32 19.50 Oxford 13.5 5479 36.90 0.24 blamed the first-quarter downturn trol and the right people in the for growth. on inconsistencies in offering right jobs.” As reported, Penney’s also 16.46 10.80 Phillips-Van Heusen 12.4 3153 13.12 -0.21 newness and fashion in every cat- Questrom emphasized that plans to roll out fashion jewel- 29.65 16.49 Polo Ralph Lauren 14.8 17593 23.51 0.65 egory and disappointing con- Penney’s turnaround goals are ry departments to all stores by 18.25 8.63 Quicksilver 19.5 43512 16.66 -0.49 sumer response to its marketing “to sell fashionable, trend- July 1 and to focus more on 6.17 1.85 Revlon - 1608 3.05 -0.64 events, among other problems. right, high-quality apparel and fine jewelry. 20.10 13.14 Russell Corp. 13.3 5130 19.25 -0.70 “The past three months have soft home merchandise at Penney’s 2,686-unit Eckerd 6.50 3.33 Tarrant Apparel - 232 3.68 -0.14 represented one of the most dif- great value prices to the mod- Drugstores division, with $14.6 ficult retailing environments in erate and value-conscious cus- billion in sales, had comp-store 16.50 5.61 Tommy Hilfiger 10.1 35479 7.92 0.34 recent memory,” said Allen tomer in the malls. And there’s sales gains of 5.2 percent last 29.55 4.14 Tropical Sportswear - 7211 6.85 0.85 Questrom, chairman and chief been good progress toward year, lead by a 7.6 percent in- 44.97 31.50 VF Corp. 10.8 25296 37.10 -0.28 executive officer. that goal in every part of our crease in pharmacy business. 14.10 8.80 Warnaco - 4686 10.55 -0.29 “Although I am disappointed department store organization. Eckerd is in the midst of revital- with the company’s execution, Our goal is also to capitalize izing stores with a fresher and Textiles results for the first quarter on our unique and competitive more vibrant look and more should not detract from the sig- advantage of being a three- competitive value-driven prices. 4.25 1.21 Cone Mills 5.4 1676 1.50 -0.13 nificant progress we have made channel retailer. For our cus- Besides its Penney’s and 6.15 1.75 Delta Woodside 13.0 140 3.05 -0.33 in improving the fundamentals tomers, that means more sizes, Eckerd divisions, the company 0.12 0.03 Galey & Lord - 211 0.03 -0.01 of our business over the past more colors and more conven- operates 54 Lojas Renner better 8.00 2.25 Guilford Mills - 702 5.50 2.90 two years. We know that we have ience available in any way they department stores in Brazil. 11.47 4.25 Unifi 200.0 7961 5.80 -0.18 many opportunities for further want to shop.” improvement, and our strong fi- Questrom said Penney’s $381 nancial condition supports our million Internet business re- Biggest Percentage Changes WWDStock Market Index for Week Ending May 16 business initiatives.” mains the fastest-growing part For Week Ending May 16 Penney’s expects comp-store of the company, serving more Gainers Close Change Composite: 103.68 Broadline Stores: 104.11 Softline Stores: 98.04 sales this year to inch up just 1 than five million unique cus- Guilford Mills 5.50 111.54 percent, though it didn’t rule out tomers a month. Tropical Sportswear 6.85 14.17 the chance of slightly higher Castagna said Penney’s con- Value City 2.65 10.42 gains, should the U.S. economy tinues to win new fashion cus- Bluefly 0.91 8.33 improve. tomers with its mix of private Movado 23.04 7.01 -3.52 -5.18 -2.47 Penney’s stores, catalog and and national brands, and that Losers Close Change Vendors: 105.51 Textiles: 103.59 Internet generated $17.7 billion current women’s bestsellers in- Galey & Lord 0.03 -25.00 last year. Its department stores clude woven tops, activewear, Revlon 3.05 -17.34 Index base of 100 is had comp-store sales gains of accessories and fine jewelry. Guess 4.34 -11.43 keyed to closing prices 2.5 percent, lead by home, jew- She said current apparel inven- Charming Shoppes 4.24 -11.30 of Dec. 31, 2002. 0.75 -4.17 elry, accessories and apparel. tories are higher than plan but Delta Woodside 3.05 -9.76 Weak areas included dresses, that the problem should be WWD, MONDAY, MAY 19, 2003 29 ” In the third quarter ended Last year, $291 million of Sara branded all for spending Media For its For high-end cashmere- The company will launch its right “Accessories now is one IT is planning a significant re- Overall, Di Muccio’s outline “Even in this crisis, there is market share, while underwear accounts for 25 percent. March 29, the Underwear division Intimates of Sara Lee and Corp. saw its operating income mil- $185 to percent 10.8 advance lion from last year’s quarter. Lee’s annual advertising budget of $425 million was spent on adver- tising and promoting its stable of intimates brands for women, men and children. A majority print ads of for the Sara Lee are intimates photographed by several top photographers: Richard Avedon, who photographed the Bali print campaign and Barely There print and TV campaign; prints ads for the Lovable brand Demarchelier; Just My Size by Liz by Patrick Von Hoene, and the Creations by new Hanes Body Her Way Perry Hagopian. by apparel was up 29 the percent past nine months. over end of 2003 through 2004. The first target location is Las Vegas, followed by Manhattan. based Malo division, which was acquired in 1999, IT plans to con- tinue to develop its ready-to- leather wear, accessories and small leather goods to create a to lifestyle image that will appeal a broader and more younger cus- tomer base. first eyewear collection for Malo this year through Allison SpA, an eyewear company IT also bought in 1999 that produces lines for Extè, Romeo Gigli and Anna Sui, among others. of the best product categories that consumers really appreci- ate,” Di Muccio said. “We think if we have the right product at the correct price, the customer is going to buy it.” launch next year of Romeo Gigli, another brand acquired in 1999, which would include opening a flagship in Manhattan. The Gigli collection is currently sold in the U.S. only at Bergdorf Goodman. would call for about a dozen new stores or renovated locations for IT brands over the next two years, an ambitious plan by any standard, yet ostensibly more so during such a difficult economic period for the U.S. and other global markets. Still, Di Muccio said there are better real estate opportunities as a result. an opportunity to increase the business,” Di Muccio said. “We have to move ahead carefully, but we are investing money in this plan because we really be- lieve this is the right moment.” — Enrico Di Muccio, IT Holding USA Holding IT Muccio, Di Enrico — We are going to invest a lot of money, of lot a invest to going are We With With a hefty portfolio of Last week, Di Muccio signed a Meanwhile, the Ferré Jeans “There has to be a more im- Building on the surge in IT’s plans for the brand in- Hanes Her Way, a wholesale franchise which spans $2 billion the underwear, casual legwear and Playtex sportswear bras and shapers, a $600 million-dollar markets; powerhouse that’s sold in all channels of distribu- tion, and Dim hosiery, a intimates primarily and brand Euro that star generates estimated volume in excess of $500 million, according to industry estimates. famous name brands, the inti- mates, casual sportswear legwear and fields apparel are segments of the Sara Lee Intimate key Apparel. intimates However, and underwear the are star categories accounting for 37 percent of total sales and 35 percent of operating income. With leading share positions in North America and intimate apparel — Europe, comprising primarily bras, shapewear and claims — items daywear related a 29 percent stake of overall “ seriously, in the U.S. We want to do more do to want We U.S. the in seriously, the potential, of terms in because, here increasing is brands these for demand year. after year tremendously fumes and cosmetics division. fumes and cosmetics lease for a new to Ferréflagship open Gianfranco in October at 870 Madison Avenue on the west side of the street, which will replace its existing store on block south at 845 Madison. Both loca- tions are about 4,500 square feet. The new location will feature a new retail design focused on rich woods, the color red and promi- nent video screens, a look that was created by Michael Gabbelini and unveiled in Paris in January. the Next company year, will reno- vate its shops at 2 Rodeo Drive in Los Angeles and in Bal Harbor to also reflect this concept. store in Bal Harbor will be re- placed by a GF Ferré store and Di Muccio is also negotiating for a GF Ferré location in Las Vegas to open by the end of the afteryear, which he plans to open a New flagship. York That store concept is being created by Studio Monti in Milan. portant and complete collection that incorporates a lot of the el- ements we did not have in the jeans line,” he said. Gianfranco we Ferré, would “With like to have a total look that is more defined.” Roberto Cavalli’s signature business in recent seasons, IT also plans to build up its li- censed Just Cavalli collection, which has been sold in the U.S. for the past three years in more than 100 stores. The relation- ship with Cavalli was renewed last year and is a 15-year li- cense, Di Muccio said. clude opening five or six stores around the country between the “The R&D will be linked to Sara Lee Intimate Apparel Meanwhile, Sara Lee Original “We “We have a huge potential to Following the acquisition of are “We going to invest a lot To that end, Di Muccio listed Since completing its acquisi- As reported, IT is also folding Additionally, for spring 2004, A Growing Empire: Sara Lee Intimates Lee Sara Empire: Growing A Continued from page 6 major universities,” he said. maintains a myriad R&D, number product of development and world. the around facilities design In addition to Winston-Salem, locations New include York and London and the Courtauld’s cen- ter in Nottingham, U.K.; Ireland; Milan; Barcelona; northern as well as France, Autan, Paris and Africa and South Africa; Eastern Europe, and Central America, the Caribbean and Thirty percent of its sourcing and Puerto the in conducted is manufacturing Rico. East. Far Cheesecake may be one company’s most recognized prod- of the ucts with the widely known line tag “Nobody Doesn’t Like Sara Lee,” but the corporation kets more than 100 brands world- mar- wide. The top 10 brands include lingerie megabrands Hanes and IT Holding Sets U.S. Focus U.S. Sets Holding IT Continued from page 2 than 10 percent of counts for less IT’s global sales, so the company become an ex- expects this could for its brands. plosive market grow our business over the next year,” said Di Muccio, who start- ed at IT in 1990 as a marketing manager and took on additional credit and customer care re- sponsibilities through 1998, when he was promoted to sales director and then ceo of IT’s subsidiary Ittierre Hong Kong. Ferré, he took responsibility of and in that brand, as well as Malo, 2001, he became ceo of IT USA. of money, seriously, in the U.S.,” Di want Muccio said. “We to do more here because, in terms of potential, the demand for these brands is increasing tremendously year after year. I see equal potential for each single brand.” several notable developments for IT’s labels: tion of Gianfranco Ferré SpA last the year, company has initi- ated a repositioning of the sig- nature collection to focus on three labels: the black label runway collection, priced to re- tail from $1,500 to $2,500; the in- troduction of a white label with broader international distribu- tion for spring 2004, priced from $900 to $1,200, and its existing, similarly priced red label that is focused on large sizes. its many Ferré diffusion lines and turning its jeans line into a broader youth-oriented collec- tion that goes beyond denim into sportswear and eveningwear, called GF Ferré. The new men’s and women’s collections will be shown on June 23 in Milan dur- fashion week. ing the men’s the company will launch full ac- cessories Gianfranco collections Ferré and GF Ferré, with for a dedicated showroom space for the entire concept, while a new fragrance concept is expected to launch in September through the ITF, company’s per- Headquartered in Dayton, Elder-Beerman’s struggles Elder-Beerman’s Ohio, the chain operates a total of Northeastern 68 and Midwestern states. It stores plans to enter its ninth marketplace in in November 2003 through eight the opening of Muscatine, Iowa its store. Saddled with a change in accounting principle and other one-time charges, Elder-Beerman lost $14.2 million, or $1.33 a diluted share, in fiscal 2002 as sales dipped slightly to $670.6 million. back then were also the topic of shareholders’ Dissident shareholders wanted discontent. the company to be sold or its management overhauled in 1999 and 2000. Scott Davido, who joined the retailer in 1997 as general counsel and was named chief financial officer in 1999, was the sole survivor of a man- agement troika that had includ- ed Frederick Mershad as chair- man and chief executive officer and John Muskovich as presi- dent and chief operating officer. Muskovich left Elder-Beerman in July 2000 and Mershad left in January 2002. Davido has since left the company as well, and was succeeded by in the cfo spot in Tomechko June Edward 2002. Elder-Beerman is current- ly led by Byron “Bud” Bergren, who joined the firm as president 2002. and ceo in February jobs in the corporate office. The restructuring plans included fo- cusing on opening and moderate price points and cosmetics, as well as operating in smaller stores in less-competitive markets. Eileen Fisher felt empathy for the organization Shares of The

The event raised $255,000 to benefit Trickle Up. The event raised $255,000 to benefit Trickle On Thursday evening, Fisher’s company received the Trickle Trickle Up, an international nonprofit organization dedicated “This is a very sweet organization because they really make a Fisher’s bridge-priced line does about $140 million in annual

The retailer did not name the That caution didn’t stop Back in 2000, the Midwestern The firm, instead, elected to re- Fisher Honored by Trickle Up Trickle by Honored Fisher Eileen Fisher accepts award from Trickle Up co-founder and board chair Eileen Fisher accepts award from Trickle Leet. Mildred Robbins Corporate Leadership Award from Gilda's Club in Westchester. Paula Bennett, chief operating officer of accepted Eileen Fisher, the award on the company's behalf. It was held at the Glen Island N.Y. Harbour Club in New Rochelle, that honored her Monday night. that honored to alleviating poverty, paid homage to Fisher’s entrepreneurial 2003 dinner at the Puck Building of in the spirit World at its Taste Manhattan. difference,” said who Fisher, started her business 20 years ago. “They know my story because I began too — that a small my amount of and money that’s and their philosophy, business with only $350 a long way and change people’s lives.” a lot of support can really go volume today — a far cry from added. her leap,” Fisher early beginnings. “It is a big NEW YORK — NEW YORK — Aids Elder-Beerman Aids Young M. Vicki By Elder-Beerman Stores Corp. shot up 16.87 percent in trading Friday following the company’s announcement that it had signed an exclusive letter of intent agreement for a possible sale of the department store company. but suitor, said that it had re- cently received expressions of interest from several parties. It said that the arrange- exclusivity ment is for a limited time to fur- ther explore a possible pur- chase. Elder-Beerman also said it retained RBC Capital Markets as its adviser. The retailer fur- ther cautioned there “can be no assurance that these discussions will result in any transaction.” shareholders from voting yes with their dollars, with 316,400 shares changing hands com- pared with a daily average of just 15,227. The stock, which trades on the Nasdaq, reached a new 52-week high in intraday trading at $5.48, before settling down to close at $4.85, a 70 cent gain. chain was a frequent subject of takeover speculation and there also were expectations that it might be taken private pervasive in the marketplace. According to financial sources, those express- ing interest in acquiring the re- tailer back then were retail chains, not investment firms. structure operations, which re- sulted in the elimination of 130 Sale Letter of Intent of Letter Sale 30 WWD, MONDAY, MAY 19, 2003 utpat ,Sucn Product NY based.E-mail:[email protected] Sourcing also. D, Underwear/Loungewear proficient. & R Multiplant, market V company popular- promote watch to price massandspecialtymarkets. rep label sales exp’d seeks private Leading cata- & markets mass logs. Salar importe retailers, & with major mfr contacts having acc. salespeople, & seeks jewelry Ave 5th innovative w & to trendy able be to Needs A exp. yrs develop 3 Req. of min. person. a develop highly product seeks creative Co. Jewelry Growing Fast J Must shoes. Casual etc., Jr. Sketchers, Madden, relo toPacificNW.Call973-564-9236Agc in 2-3 Candies, w/ exp. open. hang min $ yrs. Shoes/Shoebuilder Designer ealoine efsatr Great organized, starter. be self to a Need & detail-oriented Mkts. Unisex Please faxresumeto:718-472-3048or ewelry Pattern/Sample MakerAvail WATCH SALESREP P ae k.FT rvnrcr;mass record; Proven F/T. sks. Sales .P. csoyJwlyfrteJ il & Girls Jr the for ccessory/Jewelry orking environ.Competitivepkge! Search-www.manhattanoffices.com Prime ManhattanJon212-268-8043 8 yrsexp/excellentworkmanship. Jewelry/Accessories TOP DOLLAR FOR INVENTORY LIQUIDATION e ntlain Great$$ New Installations RETURNS,IR’S OR Email: [email protected] Rib-Lycra-Jersey-Fleece For freelanceorin-housework. T:800-996-4469 F:800-540-2784 e-mail [email protected] Three by201-861-0033 Trendy Designer DEPARTMENT STORE Hosiery Sales WALT ADAMSINC FASHION JEWELRY Showroom &LoftExpert

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Illustrator/Photoshopamust. outerwear. to girls able & Designer ladies seasoned for talented, Seeking with management in exp & high levelcontacts. years sales 7 Min outerwear qualified. innovative highly dynamic, several & be oversee Must to Pro divisions. Exec Top Seeking ieae rfceti xe,adal to able and communicate withfactoriesoverseas. Excel, computer in be proficient Must junior/missy literate, fast-paced Company. Sweater for packages pnil o eeoigteln w line re- the totally developing be Back- for will Co’s You sponsible Accessory division. major pack this For Designer to$80K WOMEN’S DESIGNE dept’s. AdvancedskillsinExcel,Word, Dsgnr/Diaper Bags/Backpacks/to80k+ resume andsalaryrequirementsto: Designers /Men’sApparel JESSICA HOWARD,LTD. 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Some & creating management. plans and projections, retail data turn collecting & door sales for annual developing resp accounts, from be Will maximize can to sales. businesses information who an retailers’ interpret indiv and analyze has an and for plan mfr oppty excellent childrenswear Leading various de- gree preferred.PleaseFaxresumeto: Bachelor’s with needed. as assist projects other and phones, answer visitors, to greet communication skills organizational strong & seeking with is for growth, someone allows personal yet & creativity demanding, envi- is the ronment where house, Design Fashion Receptionist Garment programmer. industry experiencenecessary. AS400 strong a seeks EDI company apparel Major competitive a and envi- working NYC salar great in a computer ronment offer communication good We oriented, skills. good detail skills, over- factories, with with seas experience experience retailers, major requirements: levels. Skill replenishment Planner on Purchaser the and with replen- work orders, floor weekly ishment with factory up the the keep feed manager, to ship You schedule house. the shipping o customer in details order the every knows and person This dates. factory dates with cus- of shipping up flow orders-keeping the costume control tomer and leading monitor to a j Haskell, Miriam Excel, (Word, must Basic East. a Outlook). Faxresumeto: Far skills & computer NY between liaison track- & ing ordering packs, Wal-Mart product include seeks Co. Retail Outerwear Major Excellent lab accessories. samples, and fabrics, communication andcomputerskills. of dips experience. and ordering tracking years include 2 Responsibilities seeks with company individual Childrenswear Major approval & be testing be & all exp., English procedures. yrs & with 5 Chinese familiar least in at Candi- bilingual Prod. have factories. must a w/overseas date Target, Wal-mart, orders seeks on etc. up follow Co. to Coord. Childrenswear Lg Operations Manager ot atpcdeternuilenvi- ronment. Salaryplusbenefits. entrepreneurial development Fast-paced product post. top for manager * *Prod’n Mgr-Privatelabelexp * de olwu rmicpint com- knowl- to inception Tech pletion. Call973-564-9236JaralAgc from up sweaters. Follow fashion edge. exp. full Current in $50-70K Asst. Production * Production Coordinato Production Coordinato Production/Merchandising APPAREL STAFFING,LTD. Development Director Email: Lsharfman@seno Les RichardsAgc wlymnfcue,sesamanage a seeks manufacturer, ewelry wlycmaysesexperienced seeks company ewelry PRODUCTION Mgr-5+yrsw/aback- Email resume:[email protected] or CORPORATE RECEPTIONIST Tech Dsgn-C/SKnit&Sweaterexp Spec Tech-Activewear-L.I.loc Prod’n Coord-C.Wr.Bi-Ling-Impts Dsgnr Asst-Newborn&Infantmfr Print Dsgnr-ColoringRpts,Strikeoffs.. $Open Dsgnr-C/S KnitsJr.Sptswrmfr..... 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ape,lbdp,atn sassistant. as acting dips, lab samples, or faxresumeto(212)302-1161 y y COORDINATOR PROGRAMMER Fax resumeto212-239-2766 Fax resumeto212-239-2766 . Faxresume:212-398-9079 . COSTUME JEWELRYCO. ik/J enyseils.Duties specialist. Penney JC / Link PRODUCTION Fax resumeto(212)764-6026 Production/ ASSISTANT 212-302-0135 Fax 212-967-8631Att:JD Product y Call(212)221-0870 212-997-7996 j ewelr ....To $40K ....To ... $35K+ ...... $BOE ...... $65K $Open y $BOE .com $50K y . Y r r n t e + f r WWD, MONDAY, MAY 19, 2003 - 31 .** y Joseph De The ratio was man, Barneys ’s Mansion ’s , who both appear Hef red Segal, Scoop, . The leathered Lingerie Sales Pro ***APPAREL EMPLOYERS *** Do you need exp’d DESIGNERS, PRODUC **CALL 973-564-9236 Jaral Fashion Agc Omar Hassan Seeksloungewear showroom and daywear.tacts sales, Strong with con- Dept.,Chain stores. Call John: 516-536-8576. sleepwear, Specialty and Major TION, ACCOUNTING, TECHNICAL etc. staff? , the shoot is only the beginning. New York and Bloomingdale’s. New York Marc by Marc Jacobs collection at retail in February 2001, his second attempt at a lower-priced line, four years after Marc Ja- cobs Look closed in the U.S. the From onset, the Marc by Marc line was a smash-hit at re- tail and now is carried at stores such as F Bergdorf Good throngs of customers, taking pictures with fans and signing autographs until 2:30 p.m. Thursday at H&M’s flagship. Dressed in Fifth Avenue jeans and a bright yellow halter top, Klum is the latest to show off summer ad swimwear for H&M’s campaign. BOARD WITH BUNNIES: and one Playmate to every 15 surfers skateboarders at 48, was there, Hawaiian wave warrior, competitive along with 29-year-old skater Thursday night, and the man of the his house was nowhere in sight (“It’s night out,” said one of the Playmates). But that didn’t seem to faze the 80 guests or so who turned out to first fashion celebrate the magazine’s spread on the action sports genre, along with a debut screening of the biopic, “Nihi Loa,” on big wave legend Kinimaka Titus in the spread, alongside other pros and a couple of bikini-clad Playmates. For Playboy fashion director Acetis “These our are readers,” insisted De board Acetis, a film crew from ESPN’s “You’re show 123 hovering nearby. going to see a lot more of this in the future. I promise.” Karl Lagerfeld LC at (212) 213-8483 LINGERIE Heidi Klum at H&M. Who said Americans no www.casablancabags.com Est’d European Bra Co.sion seeks based Sales commis- Repsintimate w/ apparel. experience Must in w/ be well Boutiques connected Mid-west as as wellavailable. Please fax your resume to: well as as chain other store. territories Road repsNortheast/WestCoast/Northwest/Central wanted.US. Open Please faxor Email to [email protected] territories. interest to 954-747-4819 / A y . y y . y “It’s just evolving. Marc had Jacobs launched his diffusion .com y MODERN LOVE: longer want to buy French products? That was the reaction of his to a triumphant sale last week of collection of mostly French modernist furniture and objects, since roughly 80 percent of the buyers were which American. He told Sotheby’s, it conducted the sale in Paris, that “reaffirmed the fraternity of French and American taste.” Not to mention sale netted about $8 The Lagerfeld’s. million, converted from euros at current exchange — more than double expectations. A pair of Jean-Michel Frank tables fetched $458,000, while oak and lacquer console Eileen Gray’s went for $375,000. KLUM TIME: Heidi Klum just couldn’t break away. Although her appearance was billed from noon to 1 p.m., the model stayed around greeting Fashion Scoops Fashion it would be more upscale. it would be more met someone in Europe that he I quite liked. Iquite liked and love the idea of someone with us de- signing furniture,” Duffy said. “Like what you’re sitting on you can also order or buy. That’s how don’t everything evolves for us. We have a specific business plan.” y [email protected] SALES PRO Call 973-564-9236 Jaral Agc y 212-683-8571 attn: Lisa L. or e-mail: Lisa@frenchjenn Fax resume and salary req. to: SALES SUPPORT Allen*Just Mgmt. * 800-544-5878 Target. New York based not nec. JR ACCOUNT EXEC ill be a jump start in Specialty Store ate label, young mens sportswear , Call 973-564-9236 Jaral Fashion Agc sportswear or dresses to JCPenney or SALES to 120K PA loc. Branded men’s/boys mass merchants. Sales $ Open. Current exp. selling girls ramie,Large linen, chinese973-564-9236 Agc based cotten-based vertical co. Call goods. Experienced salespersondesign with &presentation textile Print and background. organizationalrequired. skills Knowledgeprinting Good of a heat plus.ment transfer with Greatresume: 212-967-5099 attn: Office Mgr. good work benefits. environ- Please fax Major Department Storefacturer Sleepwear Manu- seeks Jr.w Account Executive who Sales $100-150K++. Current expv in pri- Sales $90-100K baseMissy +++. Current Blouses exp.dresses $14 in wholesale. $25-30Mayco, or wholesale. Or FederatedCompan or Missy Following AMC. Strong HOT w Movers, etc. Call 973-564-9236 Agc Sales Acctexp. Mgr in jeansGap To or or shirtings. $150K thesale importers. Call 973-564-9236 Agc Private like label ++. retail to Current stores, or to whole- Sales. The Jr.tory A/E will and have sales their goalable own responsibility. terri- to Must workMust be local be Tradeenjoy enthusiastic, Show a detail fast weekends. paced, orientedSupport FUN and atmosphere. to Sales helps manage Senior dayMust be computer/Excel literate. to Account day office Executives: operation. f Sales 90-100K++16. Current Must exp. hangpers, in w/Engerie, Greatescape, Fang girls Kids, Nextera, 7- Rap- Periscope, L o

rs ex- ea .com. y [email protected] g As reported, PVH said it plans Based on the volume of some In terms of price alone, it also Meanwhile, Jacobs is explor- (212) 947-7865 league with other big-name de- signers who have also reached out to the masses — namely Ralph Lauren with his licensed sports- wear line Lauren by Lauren, produced under Ralph license by Jones Apparel Group; Donna a Karan licensed with City DKNY, division of Liz Claiborne Inc.; and potentially Calvin Klein, whose business was sold in December to Heusen Corp. Phillips-Van to launch women’s a better-priced collection under the CK Calvin Klein label in 2004. A new men’s better sportswear business is cur- rently being developed in-house by PVH, while the women’s busi- ness will most likely be licensed. of these businesses — the Lauren line did $548 million in net sales last year and $1 billion was what Bruce chairman Klatsky, and chief officer executive of Phillips- Heusen, Van projected as the combined potential for the new men’s and women’s Calvin Klein businesses — it seems likely that this latest Marc Jacobs venture would compete on a similar play- ing field. would place Jacobs in competi- tion with his former employer, Perry Ellis International, which also produces a women’s sports- wear line in team with Public Clothing Co. ing other partnerships to com- plement his business, such as developing a home collection through his signature stores. Duffy said he has identified someone with whom he’d like to collaborate with creatively and aretolear g 415-864-5335 SALES PRO ACCOUNT EXEC HR@mar ACCOUNT EXECUTIVE ith specialty department stores & Bridge Jewelry Sales isits, market week prep, etc. Strong Email resume to coadesi INTIMATE APPAREL perience with a contemporary account computer skills a must.salary Please history include resume and fax to and requirements with based Knitwear &turer Sportswear is currently manufac- Executive looking for its for NY an Office. Account 3 y base is essential.w Existing relationships boutiques required. ProficiencyPlease Fax or E-mail resume to: in Excel. NY based Bridgea Jewelry versatile vendor individual seeking experience with and 3 a yrs. fullretail understanding retail sales, advertisingdising. Duties and include assisting merchan- accounts, VP managing with chandisers, dept. sales analysis store reports,v store mer- Leading Robe/Sleepweartop co. salesperson seekstions with to a outlets, strong major & dept connec- chains.confidence to: [email protected]. Please stores, email catalogue CV in Large headwear companyexpand lookingCandidate private must to have existingships relation- label withpreferably in the accessories area. junior junior specialty biz. chains, Margaret O’Leary, Inc. a San Francisco - w . . y y . . y y 212-725-5524 A better-priced Marc Jacobs “I know this is something that Marc Jacobs is partially What this better-priced Marc “Still, I have always wanted to line would place the designer, whose collection is coveted by celebrities and artists like Sofia Coppola, Winona Ryder and Kim Gordon of Sonic Youth, in a Mr. Arnault supports, too.Mr. I talked to him yesterday and he knows this is something I want to do and he likes the idea,” Duffy said “He’s Friday. a smart man, and he knows the future of this busi- ness and every single product or company he controls all have a different heritage. But he loves the idea. If you’re successful and he sees that you have a track record, he’ll be supportive.” backed by LVMH Moët Hennessy backed by LVMH Louis Vuitton and Duffy pointed out that chairman Bernard Arnault is aware of this business prospect — and is supportive. Jacobs line might be called re- mains to be answered and Duffy said their team is playing with a lot of names. “I have a bunch of different names, but nothing has been finalized,” he said. become this big player in the world of fashion for young people and I’ve always wanted to have a broader distribution. I want to be everywhere and I’m not going to be doing that with the [two] col- lections we have. I want this to be more accessible to more people and to sell all over the country — all over the world, and not just in urban centers.” handbags to shoes, and I want it to remain that way. But they’re both very specific, focused and specific audience. targeted at a TECH DESIGNER Tech Designer Asst. $28-34K. Min 6 Flat Sketching. Fittings.1410 Bdway. Call 973-564-9236 Jaral Fashion Agc trator. Exp. putting together tech pkgs. ear. Must be able to interpret design draping skills. Knowledge of garment Technical Designer Tech Designer Toin denim $85K. jeans, computerized, Currentflat specing, exp. sketching. SendingEast. Call 973-564-9236 Jaral Agc e-mails to Far sketches into complete Tech Package construction andputer graded skills specs.Must a Com- be able must. to followsign Excel, through sketch from de- Word fromproduction etc. sampleroom to withFax resume: 212-685-4341 Attn: Keith final overseas factories. Tech Designer Toin denim $85K. jeans, computerized, Currentflat specing, exp. sketching.TDM. Call 973-564-9236 Jaral Agc e-mails to Far East. Minimum 7 years experienceDesigner women’swoven in & Better knit sports- w for overseas production.following Responsible garment for through from production. development Also:struction outline details, conduct con- fittings,municate com- withProduction factories Specs. and Othermanagement duties approve of include SampleRuns. & Strong Production sketching patternmaking skills and necessary.Excel, Must flat Illustrator kno orSalary comparable commensurate software. with experience. Fax resume to: Technical Designer to $60K. Current exp. in full fashion sweaters + cut & Sewn knits. Specing. 1411 Broadway. Call 973-564-9236 Jaral Fashion Agc Sleepwear manufacturerTechnical Designer seeksexp. with Must have min. F/T / strong 3 patternmaking yrs. months exp. Jr. Sportswear Co.. MAC Illus , g 212-625-1704

$$$$$$ SYSTEMS TECHNICIAN

Please call (917) 841-8756 SENIOR SPEC Fax resume to 212-239-2766 or email [email protected] Build corsets / eveningwear. line to compete with the best. Duffy said the idea of doing a Sales at Marc Jacobs have While the concept is still in “I would love to do jeans have “We a jewel of a collec- Fax information to: 212-664-1581 1-2 years experience in jean sales. Please fax resume to 212-239-2766 Accnts. Overseas Travel Req’d Immed Samplemaker / Couture Min 10 years experience w/ chiffon. ith ability to sell, manage staff and Min 5yrs Handbag Bkgrnd w/Mass Mkt KARLYN FASHION RECRUITERS Must be a size 5 or 7. New European SALES ASST. - Jeans SUPPORT/TRAINER isual skills. Established customer base STORE MANAGER Sr. Mechandiser/Handba Hire. Fax Resume Attn Carla 201-894-1186. w Manufacturing company seeks individ- ual with apparelto industry help background on train andexcellent current support communication employees abilitiesgood and analytical systems. skills.and benefits package. Excellent salary Must have Major apparelTechnician with company 3-5Must seeks years experience. sketching, Spec haveconstruction. grading Mustand knowledge be have and detailGood salary and benefits. good oriented communication of garment skills. flat Cecile & Jeanne,in the fashion European jewelry,Manager. leader Minimum is 3 seeking years a experience Store merchandise. Must possess creativev and a big plus. SalesPlease Fax resume to: position also available. Retail

Continued from page one collection that would be distrib- uted much broader and it’s not something I am ashamed of. I am in talks with a number of people and it’s something that’s new for me because Marc and I have never done that. When we find we’ll do it.” the right partner, better-priced line and one that would retail less than Marc by Marc Jacobs — a pioneering label that established a fashion bulkhead somewhere between better and bridge — is some- thing he has always wanted to do right. and the timing now seems been estimated at more than $50 million through its collection, Marc by Marc Jacobs line and re- tail operations. U.S. sales of its women’s collection business have been estimated to comprise about 30 percent of the business, while the Marc by Marc line has been estimated to take up about 40 percent of sales. the developmental stages, Duffy said a deal might be finalized within the next year and the line would be licensed to anoth- er party to produce. under $100 and T-shirts for $40 or $50,” Duffy said. “I love the idea of buying jeans and T-shirts and purses that are just good and have integrity at that price. It’s always something I wanted to do for a company like ours. tion line and a jewel of a sec- ondary line. And Marc by Marc is really a complete and total collection, that encompasses The Latest Marc: Jacobs Eyes Better Category Better Eyes Jacobs LatestMarc: The On your new competition: “A pair of Nike shoes sells every two minutes [on eBay]. A Coach handbag sells every four minutes. A pair of Levi jeans sells every minute-and- a-half. Thirty-four thousand 2002 Keynote Speaker, keyword searches a day for Meg Whitman, Prada are typed into our President and CEO search engine.” eBay Inc.

Meg Whitmandıdıt.

She joined more than 150 of the industry’s most influential executives at the 2002 CEO Summit. Don’t miss the next one this November in New York City. You can’t afford not to be there—everyone else will.

For more information, call (212) 630-4779 or e-mail [email protected]

CE November 5 –7 OSUMMIT WWD|DNR CEO Retail|Apparel Summit The Ritz-Carlton, Battery Park, New York City

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