PLUS: BANGKOK WRIGHT CHOICE RETAIL BOOMS. PAGE 12 Robin Wright and Peter Lindbergh teamed up again for Gerard Darel’s latest ad campaign, which will be the French firm’s first international one. PAGE 9 HOLIDAY HANGOVER Sears Shares Plummet On Store Closure Plan By VICKI M. YOUNG SEARS HOLDINGS CORP. is the latest company to join the store-closing game that is likely to be a WWD major feature of retailing in the year ahead. The company on Tuesday said it expects to close between 100 and 120 Kmart and Sears full-line WEDNESDAY, DECEMBER 28, 2011 Q $3.00 Q WOMEN’S WEAR DAILY stores, or 5 percent of its 2,200 full-line store loca- tions. It joins the ranks of specialty women’s chains Talbots, Coldwater Creek and Christopher & Banks, which are cutting their store base by 12 to 15 percent each. In addition, Gap Inc. said at its annual inves- tors meeting in October that it plans to shave 189 locations from the brand’s nonoutlet fleet in North America, reducing it to 700 stores by the end of 2013. The planned closures indicate the increasing squeeze on retailers that have struggled through the holiday period, and even before. And Sears is perhaps among the most pressured of them all, as the strategy of chairman and owner, hedge fund bil- lionaire Edward Lampert, misfires in the current consumer environment. Further evidence of Sears’ financial woes came Tuesday, when the company said it expects to record a noncash charge of $1.6 billion to $1.8 billion in the fourth quarter in connection with a valuation allowance on certain deferred tax assets. Sears’ two chains have been declining for years, and the period leading up to Christmas proved no better. In a statement that provided an update on its quarter-to-date performance, Sears said compara- ble-store sales for the eight-week and year-to-date periods ended Dec. 25 for Kmart fell 4.4 percent and 1.8 percent, respectively. The company said the declines reflected drops in the consumer electron- ics and apparel categories and lower layaway sales. SEE PAGE 6 IN WWD TODAY Consumer Confidence Climbs PAGE 2 FINANCIAL: Consumer confidence rose again in December, returning to levels not seen since April as the improving jobs picture overcame worries about the housing sector. Wild Mannered Designers are going crazy for animal prints, colorful beads and African handicrafts Kellwood Waves the Flag PAGE 8 ▼ this spring. Subtleties not included. For more, see pages 4 and 5. DENIM: Kellwood has big plans for its first in-house developed retail brand, Lamb & Flag, the first of which was unveiled earlier this month in California. The Louboutin/YSL Battle Goes On PAGE 2 FASHION: From top: Balenciaga by Nicolas Ghesquière’s Yves Saint Laurent painted snakeskin pump; Fiona Paxton’s leather and filed its documents with the metal necklace with wooden beads; Roger Vivier’s appellate court in its ongoing embroidered cotton, lacquered cork and raffia clutch; legal battle with Christian Barbara Bui’s beaded and embroidered leather boot, Louboutin over the use of a red PHOTO BY THOMAS IANNACCONE; STYLED BY ROXANNE ROBINSON-ESCRIOUT and R.J. Graziano’s beaded silk bangles. sole in footwear. Consumer Confidence Rose in December 2 WwD WEDNESDAY, DECEMBER 28, 2011 The confidence index was 9.3 points higher WWD.COM than November’s reading, reflecting an im- proved jobs picture in the U.S. Consumer Confidence Rises in December YSL Files Response rise in their incomes, with 17.1 percent anticipating an By Vicki M. Young increase, up from 14.1 percent last month. Chris G. Christopher Jr., senior principal econo- In Louboutin Appeal NEW YORK — The Consumer Confidence Index rose mist at IHS Global Insight, said, “Even though con- 9.3 points in December, getting a boost from consum- sumer confidence is gaining some ground, Americans NEW YORK — Lawyers for Yves Saint Laurent made ers’ perception of an improved labor market. face many hurdles, especially on the housing, employ- a federal court of appeals deadline to file its response According to the Conference Board, the index was ment and wage fronts. Wage gains are not keeping up in the Christian Louboutin red-sole trademark appeal 64.5 points in December, compared with 55.2 points last with price increases, and the housing market is taking before yearend. month. Both components of the index rose, with the a major beating.” The YSL attorneys filed their appellate brief on present situation portion climbing to 46.7 from 38.3 and He added that the fall in the unemployment rate to 8.6 Tuesday. the expectations part increasing to 76.4 from 66.4. percent in November and the decline in gasoline prices The dispute began in April, when Louboutin sued Lynn Franco, director of The Conference Board offered some relief to consumers. His firm is forecasting YSL in a New York federal court in Manhattan, Consumer Research Center, said, “After two months of e-commerce retail sales of about $60 billion for the fourth claiming that YSL’s red pump violated its red-sole considerable gains, the Consumer Confidence Index quarter, with holiday sales overall rising 4.8 percent trademark. In August, the presiding judge denied is now back to levels seen last spring [April 2011, 66.0]. above last year’s $453 billion in sales. “This is a relatively Louboutin’s request for a preliminary injunction and Consumers’ assessment of current business and labor good [confidence] report, especially at this time of year,” instead questioned the validity of the trademark, market conditions improved again. Looking ahead, con- the economist concluded. which Louboutin obtained in 2008. sumers are more optimistic that business conditions, The confidence front didn’t help U.S. stocks, with District court Judge Victor Marrero concluded that employment prospects, and their financial situations will the Dow Jones Industrial Average dipping slightly no one designer should have a “monopoly” on any color. continue to get better. While consumers are ending the by 0.02 percent, or 2.65 points, to close at 12,291.35. He also rejected Louboutin’s arguments that infringing year in a somewhat more upbeat mood, it is too soon to However, the S&P Retail Index managed to inch up on its trademark would cause “irreparable harm” and tell if this is a rebound from earlier declines or a sustain- 0.2 percent, or 1.29 points, to 530.06, despite news that YSL’s shoe caused “consumer confusion.” able shift in attitudes.” from Sears Holdings Corp. that it would close be- Louboutin’s attorneys appealed the decision and Boosting confidence levels were improved assess- tween 100 and 120 Kmart and Sears full-line stores. in October filed their appellate brief focused on ments of the job market. Respondents said the job mar- Many of the major overseas indices were closed on Judge Marrero’s “errors of law” in determining that ket was more positive, with those indicating jobs were Tuesday. In Asia, the Nikkei 225 remained unchanged Louboutin’s red outsole mark was invalid. “plentiful” rising to 6.7 percent from 5.6 percent, while at 8,440.56 points. The Hong Kong stock market was In the court document filed Tuesday, YSL argued those claiming jobs are “hard to get” declined to 41.8 closed due to a holiday. In Europe, Frankfurt’s DAX that Louboutin cannot overcome the “formidable percent from 43 percent. The outlook for the next six rose 0.2 percent, or 10.83 points, to 5,889.76. The CAC hurdle” necessary to obtain a reversal of the lower months was favorable too, as those anticipating more 40 in Paris gained 0.03 percent, or 1.02 points, to court’s denial of the request for a preliminary injunc- jobs ahead rising to 13.3 percent from 12.4 percent. 3,103.11. The FTSE MIB in Milan was down 1 percent, tion. YSL said appellate review of the denial is based Those expecting fewer jobs decreased to 20.2 percent or 149.98 points, to 14,924.01. The London exchange on an abuse of discretion, a deferential standard that from 23.8 percent. Consumers also said they expected a was closed due to a holiday. shouldn’t be disturbed so long as it “falls within a range of permissible decisions.” It argued that func- tionality in trademark cases has long been treated as a question of fact reviewed under the clear error standard. YSL also cited a case in which a court de- Stamford Officials Rule on Cause of Fire termined that when there are two permissible views of Officials in Stamford, Conn., said the Michael Borcina, described as a friend of Badger’s the evidence, the fact finder’s “choice between them Christmas Day fire that killed the family of fashion and a contractor who was overseeing the renovations to cannot be clearly erroneous.” advertising executive Madonna Badger was appar- the house, jumped out of the building and told firefight- YSL also argued that there were other reasons why ently caused by embers from a fireplace that had been ers that he had led the children down to the second floor. the lower court’s decision should be upheld, such as taken to a mudroom or trash enclosure. However, the heat of the blaze had apparently driven the Louboutin’s inability to show “irreparable harm” and The fire at Badger’s Victorian home in the upscale children and grandparents back up to the third floor. a failure to establish a secondary meaning for the red- suburban town killed her three children — twin seven- Lomer Johnson, 71, who had spent the day before colored trademark.