▲ MARKETING: Keys to ▲ holiday ads: upbeat, FASHION: yet practical, page 8. Isaac Mizrahi’s mass approach, RETAIL: Peter Nygård goes big on ▲ NEWS: Fendi opens megastore pages 6 ▲ and 7. Broadway, page 5. in Shanghai, page 3. Women’s Wear Daily • The Retailers’ Daily Newspaper • November 4, 2009 • $3.00 WWDWEDNESDAYSportswear Masked Marvel Lady Gaga certainly made a splash at the Accessories Council of Excellence Awards at New York’s Cipriani 42nd Street on Monday night — and it wasn’t just because of her outfi t and towering wig. The singer’s long-winded speech as she accepted the Stylemaker Award ranged from thanking top designers for their support to heartfelt admissions of not fi tting in as a child. But don’t expect a Gaga collection anytime soon. The House of Gaga, she says, is “not an economy.” For more on the awards, see page 4. Storm Clouds Lessen: Industry in California Looks Toward Renewal By Khanh T.L. Tran THE WORST MIGHT BE OVER FOR California’s beleaguered apparel industry. Retailers and manufacturers in the nation’s most populous state said the battered economy seems to have bottomed out despite persistent high unemployment and state budget shortfalls. Signs of improvement are emerging as businesses stabilize after slashing costs and staff and revising their expectations and strategies. Retail buyers are placing new orders, as well as reorders, in a flurry of pent-up spending. And there are indications that some shoppers are beginning to crack open their wallets. Kohl’s opened 30 California stores in September — all in former Mervyns See Industry, Page12 PHOTO BY STEVE EICHNER EICHNER STEVE BY PHOTO 2 WWD, WEDNESDAY, NOVEMBER 4, 2009 WWD.COM Polo 2nd-Qtr. Profits Rise 10.2 Percent By Vicki M. Young lift Polo’s shares $1.76, or 2.3 percent, to $78.47. Revenues fell to $1.37 billion from $1.43 bil- WWDWEDNESDSportswearAY CONSUMERS ARE BEGINNING TO SHOP lion. Sales fell 3.6 percent to $1.33 billion, in- based on “want” again, rather than simply cluding a 3.7 percent decline in wholesale sales FASHION “need,” but it’s still too soon to tell what effect to $814.6 million and a 3.4 percent decrease in Isaac Mizrahi’s latest destination is QVC, where he retail sales to $512.5 million. Same-store sales 6 the change will have on fall 2010 business, ac- will host “Isaac Mizrahi Live,” which will feature a cording to Polo Ralph Lauren Corp. president fell 6 percent, reflecting declines of 18 percent at wealth of his own favorite goodies. and chief operating officer Roger Farah. Ralph Lauren stores, 4 percent at factory stores Speaking of the buying public, Farah said, and 3 percent at Club Monaco stores, with cur- GENERAL “They’re not as interested in sales as they were a rency fluctuation adding to the declines at Ralph year ago. They’re making selections based on what Lauren and factory stores. Sales at ralphlauren. 1 Signs of improvement are emerging as California they want. If they like the product, they buy it.” com posted a 12 percent gain in the quarter. retailers and manufacturers stabilize after slashing He made the remarks following Polo’s disclo- Gross margin rose to 57.1 percent of sales costs and staffs and revising their strategies. sure Tuesday of second-quarter profits that grew from 55.2 percent in the 2008 period. Cost of First Eastern Investment Group has taken a 15 10.2 percent, as a favorable tax rate and lower goods sold declined $51.3 million, to $589.4 mil- 2 percent stake in Lulu Guinness, and have forged a expenses helped the company compensate for a lion, while selling, general and administrative venture to expand throughout Asia, excluding Japan. 3.8 percent decline in revenues. expenses dropped $6.6 million to $525.7 million. Farah said he believes that, as the industry “We are operating today as a leaner, stronger or- A favorable tax rate helped Polo Ralph Lauren post a “anniversaries” the depressed sales results of a ganization than ever before, even as our long-term 2 10.2 percent gain in income to $177.5 million from year ago, customers are showing a new interest growth prospects remain compelling,” said Ralph $161 million. in shopping and buying. Part of this, he noted, is Lauren, chairman and chief executive officer. EYE: Lady Gaga made a big splash at the ACE that consumers know inventories are lower than In the six months, net income dipped 0.7 s 4 they were a year ago, and desirable items might percent to $254.3 million from $256.2 million, Awards…WWD finds out what some of the be out of stock if not purchased immediately. with EPS flat at $2.51 a diluted share. Total rev- attendees at the Library Lions benefit are reading. “This holiday season will teach us a lot,” he enues declined 5.7 percent to $2.4 billion from Tod’s SpA chief executive officer Diego Della Valle said said. “Orders for spring 2010 — placed in July — $2.54 billion. 5 Tuesday the firm should beat full-year forecasts if it were still cautious. Most retailers felt that if they The company updated fiscal 2010 guidance continues to perform well in the run-up to Christmas. are [going to run] short, they can chase sales a and said it now expects revenues to decline by little bit. They planned carefully to get through a midsingle-digit rate, compared with an earlier 5 Canadian Peter Nygard will open a 2,500-square- holiday, and in January and February they’ll expectation of a high-single-digit decline. foot flagship on Broadway and 40th Street in New evaluate how they feel about fall 2010.” “We continue to believe that Polo Ralph York on Friday, next door to his world headquarters. The trials and tribulations of the past year Lauren is well positioned to emerge from the MARKETING: Nostalgia and emotion will be plentiful also have produced a side benefit: “Customers, current economic climate as a stronger compa- Erin Wasson 8 in holiday ad campaigns, but may not be enough to retailers and wholesalers are more aligned ny. In our opinion, this is a very well-managed shake most Americans out of their sleepy spending ways. than ever over when product needs to be in the company with a stable of resilient brands,” stores,” said Farah. said Jennifer Black, analyst at Jennifer Black Polo, which so far this year has generated & Associates. Classified Advertisements.................................................................................................15 nearly 56 percent of its revenues through whole- Farah said during the conference call to Wall TO E-MAIL REPORTERS AND EDITORS AT WWD, THE ADDRESS IS sale operations, was among the first apparel Street that an increasing portion of the firm’s [email protected], USING THE INDIVIDUAL’s NAME. firms to emphasize working with retailers to get capital expenditure is being allocated to its WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2009 product onto the sales floor closer to need. international markets, or 50 percent this year FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. VOLUME 198, NO. 94. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one In the three months ended Sept. 26, net in- versus 35 percent last year. On Jan. 1, the firm additional issue in January, May, October and December, two additional issues in March, April, June, August, September come grew to $177.5 million, or $1.75 a diluted will take over control of its distribution in eight and November and three additional issues in February) by Fairchild Fashion Group, which is a division of Advance share, from $161 million, or $1.58, in the year- Asian countries — China, Hong Kong, Indonesia, Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Condé Nast Publications: S. I. Newhouse, Jr., Chairman; Charles H. Townsend, President/CEO; John W. Bellando, Executive Vice ago quarter. Earnings per share exceeded ana- Malaysia, the Philippines, Singapore, Taiwan President/COO; Jill Bright, Executive Vice President/Human Resources. Periodicals postage paid at New York, NY, and lysts’ consensus estimates by 44 cents, helping to and Thailand. at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services Tax Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian addresses to: P.O. Box 503, RPO West Beaver Cre, Rich-Hill, ON L4B 4R6 POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615–5008. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or visit www.subnow.com/wd. Please give both new and old addresses as printed on most recent label. Subscribers: If the Post Office alerts us that your magazine is undeliverable, we have no further obligation unless we receive a corrected Judge OKs Wal-Mart Employee Settlement address within one year. If during your subscription term or up to one year after the magazine becomes undeliverable, you are ever dissatisfied with your subscription, let us know. You will receive a full refund on all unmailed issues. First copy of new subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production By Matthew Lynch the cases, but that the agreements would need correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. For permissions and reprint requests, individual court approval.