WET SEAL LOSS GROWS/2 JEWELRY AND POLITICS/11 WWDWomen’s Wear Daily • The Retailers’TUESDAY Daily Newspaper • May 23, 2006 • $2.00 Ready-to-Wear/Textiles ME, Too NEW YORK — Wal-Mart continues to ramp up its fashion, and its George brand is the latest to get the designer touch. The retailer will introduce George ME by Mark Eisen for fall, a 35-piece sportswear collection designed by Mark Eisen of Karoo Mark Eisen. The line, specifi cally for the U.S., will retail from $19 for a cableknit sweater to $70 for a suede jacket. Here, a cotton and nylon blouse, a silk and rayon cardigan, and polyester and rayon pants. For more, see pages 6 and 7. Hilfiger Slims Down: 230 Jobs Cut in U.S., New Team Appointed By Lisa Lockwood NEW YORK — Tommy’s going Dutch. In a sweeping consolidation of operations at Tommy Hilfiger Corp., the $1.7 billion apparel firm, some 230 people were let go Monday as the company outlined a new organizational structure and worldwide leadership team. As part of the restructuring, the brand’s corporate headquarters will relocate to Amsterdam, while its New York offices will, in effect, become a satellite unit. Other initiatives include the closure of the H Hilfiger vertical retailing business and the ending of the children’s wear See Hilfi ger, Page 12 PHOTO BY KYLE ERICKSEN KYLE PHOTO BY 2 WWD, TUESDAY, MAY 23, 2006 WWD.COM Wet Seal Loss Expands on Charges By Arthur Zaczkiewicz prove our effi ciency and reduce WWDTUESDAY costs.” Ready-to-Wear/Textiles NEW YORK — Weighed down The retailer said the sales by several big charges, Wet Seal gain in the quarter was driven Inc. posted a wider loss in the by a 20 percent same-store sales GENERAL first quarter, although the com- increase. “The growth in compa- Tommy Hilfi ger Corp. plans to substantially reduce its New York staff and pany said operating income rable-store sales was driven by 1 name a new management team under new ceo Fred Gehring. came in higher than expected. increased transaction counts and Weighed down by charges, Wet Seal Inc. posted a wider loss in the fi rst The Foothill Ranch, Calif.- the number of items purchased quarter, but said operating income came in higher than expected. based teen retailer said its loss per customer, partially offset by 2 in the quarter ended April 29 a decrease in the average retail Mariella Burani Fashion Group expects to raise $132.7 million to $157.9 was $13.7 million, or 22 cents a price per item sold,” the retailer 3 million from the fl otation of its accessories subsidiary Antichi Pellettieri. diluted share, which compares said in a statement. “The compa- EYE: Despite the snowfl akes, glaciers and polar bears hanging from the with a loss of $8.6 million, or ny also modifi ed the terms of its ceiling, temperatures soared at Chopard’s annual Trophy Awards dinner. 23 cents, in the previous year Arden B. customer loyalty pro- 4 on sales that grew 21 percent gram, resulting in recognition FASHION: George, Wal-Mart’s classic clothing brand, will offer a capsule to $125.1 million from $103.8 of sales previously deferred of 6 collection by Mark Eisen, to bow for fall called George ME by Mark Eisen. million. Excluding debt-related $2.3 million. The amount of the Diamond merchants are working to ensure that the sparkling gem charges of $18.1 million, as well sales increase associated with remains a girl’s best friend instead of a product caught in controversy. as several other charges and the credit was not included in 11 gains related to severance pay, determining comparable-store stock compensation and other sales for the quarter.” Classifi ed Advertisements.............................................................14-15 items, net income was $8 mil- lion, or 9 cents a share, while To e-mail reporters and editors at WWD, the address is fi rstname. operating income came in at [email protected], using the individual’s name. $8.1 million, the company said Our operation is running smoothly and WOMEN’S WEAR DAILY IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLICATIONS, INC. COPY- in a statement. Analysts’ consen- “ RIGHT ©2006 FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. we are continually fi nding ways to improve VOLUME 191, NO. 110. WWD (ISSN # 0149-5380) is published daily except Saturdays, Sundays and holidays, with one ad- sus estimate called for earnings ditional issue in January and November, two additional issues in March, May, June, August and December, and three ad- per share of 5 cents. ditional issues in February, April, September and October by Fairchild Publications, Inc., a subsidiary of Advance Publications, Joel Waller, chief executive our effi ciency and reduce costs. Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Advance Magazine Publishers Inc.: S.I. Newhouse Jr., Chairman; Charles H. Townsend, President & C.E.O.; John W. Bellando, Executive Vice President and offi cer, said in a statement that — Joel Waller,” Wet Seal Inc. C.O.O.; Jill Bright, Executive Vice President_Human Resources; John Buese, Executive Vice President_Chief Information Officer; the retailer’s operating income David Orlin, Senior Vice President_Strategic Sourcing; Robert Bennis, Senior Vice President_Real Estate; Maurie Perl, Senior rate “substantially exceeded our Wet Seal’s gross profi t mar- the company said. Vice President_Chief Communications Officer. Shared Services provided by Advance Magazine Group: Steven T. Florio, Advance Magazine Group Vice Chairman; David B. Chemidlin, Senior Vice President_General Manager, Shared Services Center. expectations and resulted from gin rose to 37.4 from 36.2 (which Regarding store openings, Periodicals postage paid at New York, NY and at additional mailing offices. Canada Post Publications Mail Agreement No. growth in merchandise margins, includes the impact of the loy- Waller said the company is “on 40644503. Canadian Goods and Services Tax Registration No. 88654-9096-RM0001. Canada post return undeliverable leverage from additional sales, alty program modifi cation). “A track” to open 20 to 25 stores Canadian addresses to: DPGM, 7496 Bath Road, Unit 2, Mississauga, ON L4T 1L2. POSTMASTER: SEND ADDRESS and improvements in almost number of factors contributed this year. During the quarter, the CHANGES TO WWD, P.O. Box 15008, North Hollywood, CA 91615-5008. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WOMEN’S WEAR every component of our selling to this improvement, including company opened two Wet Seal DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008; Call 800-289-0273; or visit www.subnow.com/wd . Four and general and administra- the positive effect of higher mer- stores and closed one. At the weeks is required for change of address. Please give both new and old address as printed on most recent label. tive expenses. Our operation is chandise margins and higher av- end of the quarter, the retailer Subscriptions Rates: U.S. possessions, Retailer, daily one year: $109; Manufacturer, daily one year $145. All other U.S., daily one year $205. Canada/Mexico, daily one year, $295. All other foreign (Air Speed), daily one year $595. running smoothly and we are erage store sales on occupancy, operated 309 Wet Seal units and First copy of new subscription will be mailed within four weeks after receipt of order. Address all editorial, business, continually fi nding ways to im- buying and distribution costs,” 92 Arden B. stores. and production correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. For permissions and reprint requests, 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 screened companies that offer products and services that we believe would interest our readers. If you do not want to receive these offers and/or information by mail and/or e-mail, 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 MANU- NORMAN COHEN SCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPAR- ENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, SEPTEMBER 20, 1927~MAY 14, 2006 OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED My Father, Friend, Mentor In Brief I Love You, Paul ● WAL-MART’S SOUTH KOREA SALE: Wal-Mart Stores Inc. is selling its South Korean retail business to Shinsegae Co. for $882 million, the retailer said Monday. Shinsegae, which op- erates 79 E-Mart hypermarkets in South Korea, will convert the 16 Wal-Mart Korea stores to the E-Mart nameplate. “As we continue to focus our efforts where we can have the greatest impact on our growth strategy, it became increasingly clear that in South Korea’s current environment it would be diffi cult for us to reach the scale we desired,” said Mike Duke, vice chair- man of Wal-Mart Stores, in a statement. Although Wal-Mart is selling its Korean store operation, it will continue to operate its global procurement sourcing offi ce in Seoul. Many of Wal- Mart’s stores in the U.S. and abroad carry goods manufactured in South Korea. Wal-Mart operates more than 2,600 stores in 15 markets outside the U.S., according to the company. Sales in its international division were $63 billion in the retailer’s most recent fi scal year, an 11 percent gain over the prior year.