KELLWOOD SLIPS/2 A&F AIMS HIGHER/21 WWWDomen’s Wear Daily • The Retailers’FRIDAY Daily Newspaper • March 11, 2005 • $2.00 ▲ Makeup artist Pat McGrath’s maiden Beauty effort for Cover Girl, Custom Compacts, was unveiled at CTFA. Page 15 Black Beauty PARIS — It’s no secret that Olivier Theyskens is fond of somber Victoriana. And for fall, he used that fascination to give his collection for Rochas an elegant new dimension. He simplified the period’s waist-hugging jackets and long skirts into a dramatically long, lean silhouette that was right in keeping with this season’s sober mood. Here, one of his 19th-century- inspired numbers. For more dark looks, see pages 6 and 7. Urban Outfitters Aims For New Growth Avenues As Profits Zoom 72.2% By Meredith Derby NEW YORK — The ultracool is now ultrahot. Urban Outfitters’ growing popularity with hipster shoppers led to earnings and sales growth for the fourth quarter of 72.2 and 42.9 percent, respectively. Higher merchandise margins, increases in customer transactions and strength in catalogue and Internet-based sales bolstered results as the company had double-digit profitability increases in each of its three brands in the quarter. Year- end results also were impressive with profits that doubled, year-over-year. “Fiscal 2005 was far and away the finest See Urban, Page20 PHOTO BY GIOVANNI GIANNONI GIOVANNI PHOTO BY 2 WWD, FRIDAY, MARCH 11, 2005 WWD.COM Kellwood Net Plunges 51% WWDFRIDAY By Evan Clark Hal Going forward, the company Beauty Upbin will need to contend with the NEW YORK — The pain keeps planned $17 billion merger of coming for Kellwood Co. Federated Department Stores FASHION A promotional holiday sea- and May Department Stores, Black is back for fall and so are sober styles that made a particular impact son and fashion missteps cut which is slated to be completed 6 for evening in Empire waists, puffed sleeves, lace panels and fishtail hems. earnings for the fourth quarter this year. The deal will create a ended Jan. 29 by 51.3 percent to giant retailer with an estimated $6.5 million, or 23 cents a dilut- $30 billion in sales and 950 de- GENERAL ed share, compared with $13.3 partment stores. Urban Outfitters posted a 72.2 percent spike in fourth-quarter earnings to million, or 48 cents, a year ago. In addition to the tremendous 1 $31.7 million, while sales gained 42.9 percent to $251.6 million. The first quarter is expected clout Federated will hold over Kellwood’s net earnings dropped 50 percent in the fourth quarter to $6.5 to bring more of the same, as re- its vendors, Kellwood will be af- 2 million compared with a year ago, as sales gained 14 percent to $592 million. tailers reacted to the stumble by fected when, by 2007, the moder- Her House of Deréon sportswear isn’t in stores yet, but Beyoncé Knowles reducing their spring orders. ately orientated nameplates of has already lined up an outerwear licensee with G-III Apparel Group. “We are obviously very disap- May, such as Kaufmann’s and 2 pointed,” chairman and chief Filene’s, shift slightly upward BEAUTY: The CTFA’s annual meeting began with a changing of the guard executive officer Hal Upbin said and are melded into Federated’s 14 and ended with a plan to deal with the challenges of the future. in a statement. Macy’s chain. Retailers and credit card companies scored a major victory with legislation “It typically takes two sea- Kellwood has made moves to 22 to reform the nation’s bankruptcy laws that passed in the Senate. sons to get back on track in the diversify its product assortment, fashion business,” he said. “The snatching up the Calvin Klein bet- company has taken the neces- ter sportswear license from SUZY sary corrective actions, includ- Phillips-Van Heusen Corp. and J.Lo in the nude…The Royal Stamp…Carolina Herrera’s grandbaby ing upgrading design and mer- acquiring Phat Fashions last year, 4 Olimpia. chandising talent to get back on downs and off-price sales during and more recently revamping the track by fall 2005, which will the fourth quarter. bridge-priced Bill Burns collec- Classified Advertisements........................................................................23 begin shipping in July.” Kellwood on Jan. 24 warned tion, giving it an item orientation. To e-mail reporters and editors at WWD, the address is Kellwood, a specialist in that earnings would come in at The company is not as diversi- [email protected], using the individual’s name. moderately priced apparel, is less than half the $13.7 million fied as others in the field, such as WOMEN’S WEAR DAILY IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLICATIONS, INC. COPYRIGHT ©2005 also catering to a consumer that projected on Dec. 2. Jones and Liz Claiborne Inc., FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. has room for little discretionary The reduction in spring or- both of which have made strong VOLUME 189, NO. 52. WWD (ISSN # 0149-5380) is published daily except Saturdays, Sundays and holidays, with one additional issue in June; two additional issues in April, May, August, October, November and December, and three additional spending and is pressured by ders is clamping down on the moves into retail. Jones’ portfolio issues in February, March and September, by Fairchild Publications, Inc., a subsidiary of Advance Publications, Inc. PRINCIPAL debt, higher energy and food first quarter, which Kellwood includes Barneys New York and OFFICE: 7 West 34th Street, New York, NY 10001. Shared Services provided by Advance Magazine Publishers Inc.: S.I. Newhouse, Jr., Chairman; Steven T. Florio, Vice Chairman; Charles H. Townsend, C.O.O.; John W. Bellando, Executive Vice-President and C.F.O.; Jill costs and employment concerns. sees producing a 48 percent drop Nine West stores while Claiborne Bright, Executive Vice-President_Human Resources; John Buese, Executive Vice-President_ Chief Information Officer; David Orlin, Kellwood produces a slate of its in earnings to about $13 million, has Lucky Brand and Mexx Senior Vice-President_Strategic Sourcing; Robert Bennis, Senior Vice-President_Real Estate; David B. Chemidlin, Senior Vice- President_General Manager, Advance Magazine Group Shared Services Center. Periodicals postage paid at New York, NY and at own brands, including Sag or 45 cents a share, from $25 mil- stores, as well as a slate of other additional mailing offices. Canada Post Publications Mail Agreement No. 40032712. Canadian Goods and Services Tax Registration Harbor, Koret, Beliza and Jax, lion, or 90 cents, a year ago. Sales retail initiatives under way. No. 88654-9096-RM0001. Canada post return undeliverable Canadian addresses to: 4960-2 Walker Road, Windsor, ON N9A 6J3. POSTMASTER: SEND ADDRESS CHANGES TO WWD, P.O. Box 15008, North Hollywood, CA 91615-5008. FOR as well as Calvin Klein better are projected to drop 6.7 percent Upbin has recently acknowl- SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WOMEN’S WEAR sportswear and Liz Claiborne to $640 million from $686 million. edged that Kellwood also might DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008; Call 800-289-0273; or visit www.subnow.com/wd . Four weeks is required for change of address. Please give both new and old address as printed on most recent label. First copy of new suits and dresses under license. “We expect sales for the re- make a move into retail to bet- subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production As the fourth quarter failed to maining three quarters to be ei- ter diversify, shielding the busi- correspondence to WOMEN’S WEAR DAILY, 7 West 34th Street, New York, NY 10001. For permissions and reprint requests, jell and retailers cut back orders, ther essentially flat or up modest- ness further from the sometimes please call 212-221-9595 or fax requests to 212-221-9195. Visit us online: www.wwd.com. To subscribe to other Fairchild magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our subscriber list available to carefully the firm was forced to go to the ly versus last year,” Upbin said. roller-coaster marketplace. screened companies that offer products and services that we believe would interest our readers. If you do not want to receive off-price channel, which drove Investors traded shares of The first quarter is expected these offers and/or information, please advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273. WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR LOSS, DAMAGE, OR ANY OTHER INJURY TO UNSOLICITED sales up 13.7 percent to $592.3 Kellwood up 18 cents, or 0.6 per- to drag down the year. For 2005, MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND million from $521.1 million. cent, to $29.28 on the Big Board Kellwood is planning on earnings TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED Other vendors were caught in Thursday before the after-mar- of roughly $68.5 million, or $2.38 TO DO SO BY WWD IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE a similar bind and also turned to ket report. a share, a drop of 2.3 percent. ACCOMPANIED BY A SELF-ADDRESSED OVERNIGHT-DELIVERY RETURN ENVELOPE, POSTAGE PREPAID. the off-pricers to clear goods and For the year, Kellwood’s Sales are slated to drop approxi- keep inventory lean, saturating earnings fell 1.4 percent to $70.1 mately 2.2 percent to $2.5 billion.