Girl with the Pearls
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AFRICAN PRINTS PLUMBING ITS HERITAGE, DUTCH FIRM GREY STROKE VLISCO LAUNCHES ELIE TAHARI UNVEILS A NEW DENIM BRAND, GREYWIRE, A LINE OF LUXURY ACCESSORIES. PAGE 8 WITH JEANSWEAR VETERAN MICHAEL PRESS. PAGE 9 PROFITS RISE 7.6% Prada Stays Cautious Despite Strong Half By LUISA ZARGANI MILAN — Prada SpA had a strong first half — but is more cautious about the second. Lifted by sales at its directly operated stores and led by double-digit growth in Asia-Pacifi c and the WEDNESDAY, SEPTEMBER 18, 2013 ■ $3.00 ■ WOMEN’S WEAR DAILY Americas, Prada reported a 7.6 percent rise in net profi t to 308.2 million euros, or $400.6 million, in the WWD six months ended July 31, compared with 286.4 mil- lion euros, or $369.4 million, in the same period last year. Revenues climbed 11.7 percent to 1.73 billion euros, or $2.25 billion, compared with 1.54 billion euros, or $1.97 billion, last year. The growth came despite the strength of the euro against the U.S. dollar and Japanese yen, continued weak economies in some regions and tough compari- sons from a year earlier. All fi gures have been convert- ed at average exchange rates for the period in question. On Tuesday, Prada shares closed down 0.7 percent to 79.40 Hong Kong dollars, or $10.23 at current ex- Girl With change, on the Hong Kong Stock Exchange. “We are satisfi ed with the results achieved in the fi rst half of 2013,” said Patrizio Bertelli, chief execu- tive offi cer of Prada SpA. “Revenues have increased in all geographical areas where the group operates and we have further improved our operating margins.” The Pearls The executive said Prada’s business model has en- abled the company “effectively to face the challenges Simone Rocha’s stellar thrown down by an international economic environ- spring collection was ment which remains uncertain and extremely vola- tile. The objectives achieved to date, the fl exibility of an elegant subversion SPRING 2014 our organizational structure and constant monitoring of Irish propriety. of the markets mean we can look ahead with confi - Her white dress LONDON dence to the near future.” The international volatility Bertelli referred to im- with pearls and COLLECTIONS pacted Prada’s sales late last month and may further deconstructed ruffl es complicate results in the second half. “It was a fairly would make an edgy good August organically and like for like, but interna- tional tension affected the last couple of weeks and alternative to classic retained tourists from shopping,” said chief fi nancial communion attire. For more on SEE PAGE 8 London, see pages 4 to 6. Luxury’s Digital Divide By RACHEL STRUGATZ THE LUXURY SEGMENT is playing to the e-com- merce extremes. On one hand there are the brands — such as Gucci, Hermès, Burberry, Missoni and others — that are actively courting customers through their own and third-party e-commerce sites, selling everything from $5,000 furs to $100 iPhone cases. On the other side, there are those who want to keep luxe in the rarefi ed world of the high-end boutique or department stores, such as Chanel and Prada. When this past spring WWD asked Miuccia Prada, chairperson and creative director of Prada Group, about the company’s conservative e-commerce stance, the designer didn’t hold back. “Yes, we don’t like it,” she said. “I don’t care. My husband [chief executive offi cer Patrizio Bertelli] hates it and we think for lux- ury it’s not right.” Prada’s accessories do have a robust e-commerce presence worldwide — even on prada.com — but ready-to-wear is another story. “It’s good in countries that don’t have the shop near- by,” she said. “[Otherwise] the choosing and sending home is too complicated. Personally, I’m not interested.” The pressure for brands to sell online might only increase as e-commerce booms and the “O” word — omnichannel — comes to defi ne retail more and more. The long-term question is: Can brands afford to remain aloof from online? Federico Marchetti, founder and ceo of Yoox Group, which operates 36 monobrand designer shops PHOTO BY GIOVANNI GIANNONI SEE PAGE 12 2 WWD WEDNESDAY, SEPTEMBER 18, 2013 Sycamore Stake Lifts Aéropostale THE BRIEFING BOX LLC, which is controlled by then the hypothetical per-share IN TODAY’S WWD By VICKI M. YOUNG Sycamore, the stake held by the acquisition price would be $10 to private equity firm is nearly 6.3 take Aéropostale private. SHARES OF Aéropostale Inc. million shares. The filing said the Sycamore has a history of spe- jumped 18.1 percent to $10.17 on shares were acquired because of cializing in the retail and apparel hopes that Sycamore Partners, the belief that the stock is “an at- sectors. It previously had a stake Alexa Chung on the after disclosing it took nearly an tractive investment.” in Talbots back in 2011 and then, street in London. For 8 percent stake in the teen retail- The company also said in the after months of negotiation, took more, see WWD.com. er, would take the chain private. filing — using boilerplate lan- the retailer private in 2012 in a deal Sources told WWD that guage — that there may be dis- valued at $369 million. Earlier this Sycamore is considering cussions with the retailer’s board year, Sycamore acquired teen retail- Aéropostale as its next possible concerning the chain’s assets, er Hot Topic Inc. for $600 million. takeover target. capitalization, financial condition Sycamore has been active The stake was disclosed in a and future plans. prowling for deals. It had lengthy regulatory filing, a Form 13-D, In addition, Stifel soft-lines discussions with Australian surf with the Securities and Exchange retail analyst Richard Jaffe brand Billabong, although that Commission on Tuesday. speculated in a research note didn’t result in any transaction, and Securities rules require firms Tuesday that Sycamore, through now has joined with KKR & Co. DABROWSKI to disclose whenever they take a Hummingbird, “will attempt to for a combined bid for The Jones KUBA stake that is more than 5 percent take the company private.” Jaffe Group Inc., having made a first- BY and become what is then called a added that if one assumes the round offer in the summer. Second- “beneficial owner.” same multiple as The Talbots round bids in the Jones asset sale PHOTO In the filing by Hummingbird Inc.’s going-private transaction, are due at the end of the month. Prada, lifted by sales at its directly operated stores and led by double-digit growth in Asia-Pacific and the Americas, reported a 7.6 percent rise in net profit in the first half. Page 1 Gores Seeking J.Mendel Partner The luxury segment is playing to the e-commerce extremes, Jeffrey Schwartz said, “There are many, probably with some brands courting customers online, while others By EVAN CLARK hundreds, of fashion companies that are run by very talented creative people, but they are not as want to keep luxe in high-end boutiques. Page 1 THE GORES GROUP is looking to team up at J.Mendel. focused on running their businesses for profitability Gores hired Barclays this summer to test the as they are for designing clothes.” Buyers voice their opinion as far as their favorite trends and market for new investors in the designer brand, ac- The private equity firm, which has about $3.6 bil- collections at London Fashion Week. Page 6 cording to two financial sources. Barclays declined lion in assets under management, went on to invest to comment and it is not clear how the search has in junior lifestyle brand Big Strike Inc., Mexx and Vlisco is launching a range of handbags and scarves that it progressed, but the bank started sending out feelers contemporary brand Cynthia Vincent. hopes will accelerate its recent transformation into a nascent to would-be investors a few months ago. On its Web site, Gores lists a number of “initiatives” luxury brand. Page 8 “The Gores Group is committed to the long- at J.Mendel, including “turned declining sales trajecto- term development of the house of J.Mendel,” said ry to positive cash flow” and “refocused ready-to-wear Elie Tahari has brought on Michael Press to head a new a spokesman for the private equity firm. “Following business and expanded accessories line.” denim venture, dubbed Greywire, as president. Page 9 the momentum that the house is currently ex- Mendel continued on as chief executive officer, periencing — with the opening of a flagship on chief designer and “a substantial shareholder” in Coty Inc. chief executive officer Michele Scannavini kicked off [Manhattan’s] Madison Avenue, the launch of hand- the company when Gores bought in. Last month, the beauty firm’s first earnings call as a public company with a bags and the arrival of a new ceo working along former Louis Vuitton executive Marc Durie joined plan for the future. Page 9 side Gilles Mendel — we are exploring the possi- the company as president and ceo. He also assumed bility of a strategic minority investor, which would the responsibilities of Susan Sokol, who exited the Nancy Gibbs was named managing editor of Time magazine help us to accelerate the development of the brand firm in February as president and chief operating Tuesday, succeeding Richard Stengel, who was nominated on and increase its retail footprint.” officer after a five-year run. the same day for an Obama administration post. Page 10 Los Angeles-based Gores bought into J.Mendel J.Mendel’s wholesale and retail sales total an es- in Aug.