VERSACE SELLS BEAUTY DIVISION/3 CARTIER’S CHINA MOVE/4
Women’s Wear Daily • The Retailers’ Daily Newspaper • December 27, 2004 • $2.00
WWDMONDAY
Accessories/Innerwear/Legwear
Gold Stars
PHOTO BY GEORGE CHINSEE; STYLED BY SHOSHANNA FISCHHOFF
NEW YORK — Just when you thought you’d had enough holiday cheer, it’s time to think
about New Year’s festivities. And, when it comes to appropriate bags, designers have
taken sparkling crystals and given them a rough edge by pairing them with distressed
leathers, metal cases and snakeskin. Here, clockwise from left, Fendi’s leather bag with
a Swarovski crystal cage, Dior by John Galliano’s rhinestone and metal evening saddle
bag, and Dolce & Gabbana’s python and Swarovski crystal bag.
Disappointing Holiday Gives Retailers the Spring Jitters
By David Moin
NEW YORK — Though it’s not yet New
Year’s, many retailers are feeling
hungover.
After a rough and tumble
Christmas, stores are hoping the
disappointing season can be
salvaged over the next few weeks
through gift-card redemptions and
via steep markdowns, often up to 50
percent, and even higher on
outerwear. January, when retailers
run big clearances to shed winter
clothes and transition into spring
fashions, is becoming a bigger and
bigger contributor to fourth-quarter
sales and profits.
See Holiday, Page 6
2
WWD, MONDAY, DECEMBER 27, 2004
WWW.WWD.COM
Countdown to
5
GENEVA — The end of the quota
system will bring major changes
to the world economy, with the
apparel manufacturing industry
that is spread throughout the
developing world likely to concentrate into a handful of countries with the right combination
of low costs and steady infrastructure, two studies conclude.
The combined apparel and
textile manufacturing sector,
which employs more than 30 million workers in more than 50
countries, could compress into
as few as five or six nations by
2007, according to a report by the
International Confederation of
Free Trade Unions, a labor um-
da
ys
By John Zarocostas
2005
Sourcing Strategies to Tighten
Cambodia to diversify the economy in anticipation of the end of
the quota system, although it
was announced 10 years ago,”
the ICFTU said in its report,
adding that governments need
to address this issue “as quickly
as possible.”
The ICFTU’s prediction that
the industry will consolidate into
Sourcing is expected to
consolidate next year.
brella group representing 150
million workers in 152 countries.
The study warned that such a
shift may cause major economic
dislocation in developing nations
that are dependent on apparel
exports, many of which are not
prepared for the changes that
will come after the 148 nations of
the World Trade Organization
drop the quotas that regulate the
$330 billion apparel and textile
trade on Jan. 1.
“Little has been done in
countries such as Bangladesh or
such a small number of nations
within two years of the end of
quotas is a far more dire scenario
than industry executives predict.
Sourcing executives planning for
2005 typically assert they will
continue to operate in 15 to 25
countries, and that they intend to
cut back their operations in other
nations more gradually.
However, the labor organization was in step with most industry experts in asserting that
China stands to benefit the most
from the end of quotas.
The report noted that Chinese
factories have aggressive management and are equipped with
modern machines because of
large investments, they have
economies of scale and they
have ready access to cheap labor.
But the study also noted that
China enjoys some unfair advantages, including state aid to
industrialists such as “loans
through state banks granted on
the understanding that they will
probably never be repaid.”
The report noted that in the
face of this competition, Bangladesh stands to lose one million
jobs and Cambodia as many as
200,000. Tens of thousands of
jobs may also be lost in the
Dominican Republic, Guatemala
and Mauritius.
The study acknowledged that
even in those countries that are
likely to be adversely affected,
such as Bangladesh, “Well-organized companies that have invested in new machines and treat
their employees correctly have a
good chance of keeping their orders, and so their jobs, since they
have good relations with major
sourcing companies who require
basic respect for workers.”
Another report, by the U.K.based consulting company Textiles Intelligence, said across all
nations, apparel manufacturers
are likely to face tighter margins
after the quotas are lifted. The
most cost-competitive manufacturers are most likely to gain
share, the study said.
It noted that cost factors vary
between the developing and developed world. For example,
labor costs account for about 30
percent of the expense of manufacturing woven fabrics in the developed world, but constitute less
than 15 percent in poor nations.
The most expensive nation
for textile labor in 2002 was
Denmark, where mill workers
earned $25.80 per hour, the
study said. The hourly cost averaged $21.18 in Germany, $15.60
in Italy and $15.13 in the U.S.,
which ranked 12th.
Among Asia’s developing
countries, Bangladesh had the
lowest labor cost at 25 cents an
hour, followed by Pakistan, 34
cents; China, 41 cents, and India,
57 cents.
Gervais Says Arrivederci to Ferragamo
By Alessandra Ilari
MILAN — Nathalie Gervais, Ferragamo’s creative director since February, quit the company
last week, saying there were “too many cooks in
the kitchen.’’
Gervais, 40, had a three-season contract with
the Florentine luxury goods group. Although
Gervais reported to HervГЁ Martin, the product
general manager who was hired with her, she
said Ferragamo family members also gave directions that often didn’t share a common vision.
“There was a structural problem and no room
for a creative director,” the French-born Gervais
said in an interview. “There were more politics than
competences and there was no room to breathe.”
Ferruccio Ferragamo is the company’s chief
executive officer; Giovanna Gentile Ferragamo,
vice president of Salvatore Ferragamo Italia, and
Fulvia Ferragamo, vice president and head of accessories. Leonardo Ferragamo is at the helm of
the Ferragamo-owned Ungaro.
A Ferragamo spokeswoman confirmed
Gervais’ departure but declined to elaborate.
In their respective roles, Martin, who had
worked at Kenzo, and Gervais, who was at Nina
Ricci before Ferragamo, were part of a company
strategy aimed at boosting the brand’s image in
terms of trends, modernity and consumer age
range. Gervais said that while she’s already had
some offers, she has no plans for the future.
Gervais’ situation was complicated when
Ferragamo hired back Graeme Black after a sixmonth leave. Black, a Giorgio Armani protГ©gГ©,
worked on both the accessories and ready-towear collections and essentially bid arrivederci in
April after Martin and Gervais were tapped.
Ferragamo announced in mid-September that
it would bypass its traditional runway show to
present its spring-summer 2005 collection without even a showroom presentation for the accessories, considered an unusual decision by fashion experts.
Gervais confirmed that she designed the
spring-summer 2005 and fall-winter 2005-2006
collections, plus their respective precollections.
WWDMONDAY
Accessories/Innerwear/Legwear
GENERAL
1
2
4
8
9
10
After a tough Christmas, retailers are feeling the blues, but they say the
season still has some legs.
16
Recapping Spectator publisher Kimberly Fortier’s now notorious
extramarital affair with former British cabinet minister David Blunkett.
The end of the quota system will bring major changes to the world
economy and a concentration of sourcing, two studies concluded.
Cartier’s grand opening of its Shanghai flagship on the Bund brought out
the city’s swankiest socialites and illustrated its commitment to China.
INNERWEAR: Whether it’s by a Fortune 500 company or one of the few
remaining indies, the quest for the next big idea or item is constant.
ACCESSORIES: From launching categories to opening more stores,
executives are focused on business and personal growth in the new year.
Milwaukee is changing its blue-collar image to a hip metropolis epitomized
by Santiago Calatrava’s $100 million addition to the Art Museum.
EYE
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In Brief
в—Џ
TROPICAL SPORTSWEAR DELISTED: Tropical Sportswear
International has been notified by the Nasdaq that the company’s stock will be delisted as of Dec. 31. The announcement
comes a week after the Tampa, Fla.-based company filed for voluntary Chapter 11 bankruptcy protection and agreed to sell the
bulk of its assets to Perry Ellis International Inc. for $85 million.
TSI will not appeal the Nasdaq’s decision.
в—Џ
TRUE TO NEW YORK: Jana Rangel of L’Atelier, exclusive
U.S. sales representative for True Religion, the Los Angelesbased denim firm, will open a New York sales showroom on
Jan. 1. The showroom, Reign NYC, will be at 270 Lafayette
Street, Suite 1107. L’Atelier also has sales offices in Los Angeles
and Dallas. True Religion launched for spring 2003. The firm
posted net income of $954,102 on sales of $7.4 million for the
three months ended Sept. 30. For the first nine months of the
year, True Religion posted net income of $1.7 million on sales of
$14.1 million.
в—Џ
OAKLEY, LUXOTTICA DEAL: Oakley Inc. and Luxottica Group
SpA have agreed to a new commercial contract effective immediately for the year ending Dec. 31, 2005. Exact terms of the
agreement were not disclosed, but Milan-based Luxottica Group
said in a statement that the terms include more favorable worldwide pricing on sales of eyewear products and accessories between the two companies. In the statement, Luxottica Group
said the agreement with Foothill Ranch, Calif.-based Oakley is
the first step toward an expected longer-term agreement. Since
1995, Luxottica Group has acquired five companies:
LensCrafters, Cole National Corp., OPSM Group, Sunglass Hut
and the Bausch & Lomb sunglasses business. In April, Luxottica
Group established a new credit facility worth about 1 billion
euros, or $1.35 billion at current exchange rates.
в—Џ MACERICH ADDS MALLS: The Macerich Co., a real estate investment trust, has agreed to buy Wilmorite Properties Inc.,
owner of 13 properties, including Tysons Corner Center in
McLean, Va., and Danbury Fair Mall in Danbury, Conn. Macerich
will acquire the company for $2.33 billion, including the assumption of $882 million of existing debt and the issuance of $320 million of convertible preferred units and common units. Macerich
expects the deal to be completed in March.
WWD, MONDAY, DECEMBER 27, 2004 3
WWW.WWD.COM
Versace Deals Beauty Unit to Euroitalia
By Stephanie Epiro
MILAN — It’s a deal.
After months of speculation among executives here, Versace has finally landed a suitor and
sold its beauty arm, Giver Profumi, to Euroitalia.
The deal was inked after a late-night meeting on Wednesday between Versace and Euroitalia
executives accompanied by their financial backers. Although the purchase price was not disclosed, Euroitalia’s big Christmas present came with a price tag estimated by market sources to be
48 million euros, or $63.8 million at current exchange rates. The acquisition included Versace’s
broad range of fragrances, including the Versus brand scents, plus the skin care and makeup lines.
Versace issued a statement Wednesday evening in Milan saying that Euroitalia had purchased
75 percent of the licensing deal from Versace and the remaining 25 percent from ICR, which is
held by Roberto Martone.
The sales reinforced the dominance of Euroitalia among the Italian-based beauty companies.
According to industry estimates, Giver’s total revenues reached 67 million euros, or $90.4 million, in
sales last year. That, combined with Euroitalia’s estimated volume, yields a total of $594 million.
Most of the Versace and Euroitalia executives were not available for comment at press time,
having left for the Christmas weekend. However, Claudio Tenan, Euroitalia export manager, said,
“We are extremely happy and look forward to the future.”
Industry sources speculate that Euroitalia obtained 8 million euros, or $10.6 million, of the purchase price from equity funds and 40 million euros, or $53 million, from the Italian bank Banca Intesa.
According to reports that had been swirling for months, one of the critical issues in previous talks
centered on the fate of Giver Profumi’s workforce. Industry executives have indicated that the question was smoothed over, with Euroitalia taking on Giver’s employees, some of whom had been at Giver
for 20 years.
Versace stated that the sale of its beauty arm was in line with a plan to focus on the label’s
core business of clothing and accessories. The fashion house added that the money received
from the Giver transaction will go toward paying off some of its outstanding debt.
The Versace beauty business joins a Euroitalia fragrance and cosmetics portfolio that already
includes names such as Dolce & Gabbana, Moschino and Alessandro Dell’Acqua. The $504 million firm also controls the Naj-Oleari fragrance, color cosmetics and treatment business, as well
as fragrances under the Reporter and El Charro monikers.
Reached at his office on Sunday, Martone said that ICR will continue to manufacture
Versace’s fragrances throughout 2005 and that he believes in the future of the brand.
“I am happy and content that the Versace license will stay in Italy,” Martone said. “Euroitalia
has done fantastic work with Dolce & Gabbana and it will also do a great job with Versace.”
His comment appeared gracious considering that Martone previously had been mentioned by
sources as one of the rival bidders in partnership with Selective Beauty. But Euroitalia won out.
Giovanni Sgariboldi and
Claudio Tenan of Euroitalia.
Versace’s
Jeans
Couture
Glam.
— With contributions from Allessandra Ilari
Santo and
Donatella
Versace
Biotherm’s First U.S. Store Opens on West Coast
LOS ANGELES — Biotherm has opened its first store in
the U.S., opting for a dense business location in
Southern California over more traditional retail thoroughfares.
The 1,000-square-foot store at the Glendale Galleria,
which opened for business on Dec. 10, is one of only a
handful of Biotherm freestanding stores in the world,
with the others being in the United Kingdom and Hong
Kong. But the circular flow of the store, and the
soft white light that illuminates its interior, are in keeping with the brand’s signature architectural themes.
“The store represents a great opportunity to portray the image of the
brand, and to generate a lot of importance for it,” said Roberta
Weiss, senior vice president of marketing for Biotherm USA, which is
owned by the L’Oréal Group.
BEAUTY BEAT
Based on initial sales — inventory
was already running low for some products
a few days into the opening — Biotherm executives said they are on track to open more stand-alone
stores in the U.S., most likely focusing on the brand’s
key markets, such as Florida, Texas, New York and
California. Based on first-week sales, the Galleria store
is expected to do about $1 million in its first year.
“Glendale was our first choice, because it fits in with
our primary target groups,” said Chris Harrison, general manager for Biotherm USA, adding that Asians and
Latinos have long been patrons. The Glendale Galleria
draws many shoppers from both populations, together
with a wider cross-section from neighboring communities, including Silverlake, Los Feliz and Pasadena.
Although Biotherm was founded by a French biologist in 1950 and is based on the workings of the thermal
springs of the French Pyrenees, the company is largely
perceived as an American brand, executives noted. Its
wholesale distribution base throughout the U.S. includes roughly 150 points of sale, including major
chains like Macy’s, Nordstrom, Foley’s and Burdine’s.
The company launched an e-commerce site in October,
allowing the brand to reach “a vast number of new customers,” said Harrison.
Harrison said although California and New York
are more recent additions to Biotherm’s traditional re-
Above, Biotherm’s first U.S. store; left,
Facial services are performed in the
Biotherm space.
tail bases in the U.S., the company has
exhibited “tremendous growth. It’s in
the high, high double digits,” she said.
“We’re looking at a brand that has turned
the corner.”
Among the offerings at the beauty boutique,
which carries Biotherm’s full line of skin, body,
sun, color and Biotherm Homme products, are free express facials, which take anywhere between five and 15
minutes and are offered to everyone. Mirrors with tiny
cameras embedded in them allow for high-tech digital
signage, such as the so-called “wall of fame,” which displays photos on plasma screens of those undergoing
makeovers. Also on the screens is information on the
latest products, as well as other promotional visuals.
“Everything is done by remote, so the visuals can be
changed every day if you want,” said Marc Weshler, vice
president of sales for New York-based Brand Marketing
Network, which implemented the in-store signage.
The store’s top-selling products so far include the antiblemish Acnopur and the hydrating lotion Aquasource.
Prices range from $11 for a lip gloss to $40 for the new
Line Peel, which was unveiled to coincide with the store’s
opening. In January, a small selection of hair care products will make their U.S. debut through the boutique.
— Kavita Daswani
A Fuller Pout
LONDON — Independent British beauty retailer Pout
has appointed Liz Folce as director of sales and marketing for North America — a new role, and the first man-
agement position outside of Pout’s headquarters here.
Folce, a 15-year EstГ©e Lauder veteran, stepped down
from her role as East Coast sales director at Bobbi
Brown Cosmetics to join Pout earlier this month. She
will be based out of New York and will report to Pout
founder Emily Cohen until spring, when a new Londonbased chief executive officer will be appointed.
“Around 65 percent of our business is U.S.-based, so
now we have an opportunity to grow this much further,”
Cohen said during a recent interview. “Liz choosing to
leave a world-leading beauty company to join a small,
cult, independent brand like ours is such a big thing for
us. It was obviously a big decision, and I take my hat off
to her.” Although Pout has yet to open a freestanding
store in the U.S., it is now carried in 60 doors across the
country, including miniboutiques in Henri Bendel and
Fred Segal Essentials — as well as in four Holt Renfrew
stores across Canada. The brand is also carried at 30
Victoria’s Secret stores and 20 Sephora stores.
— Ellen Burney
Terax America Buys Terax Italia
NEW YORK — Terax America, the U.S.-based distributor of Terax hair care and beauty products, has completed the acquisition of Terax Italia, the owner and manufacturer of the line. The company’s international headquarters have been moved from Bologna, Italy to a new,
40,000-square-foot Terax America facility in Syracuse,
N.Y. Terms of the transaction were not disclosed. All
management functions for the company have been
moved to the new headquarters, including research and
product development. Manufacturing is expected to be
moved to the Syracuse facility in the fall of 2005. Marco
Musumeci will serve as president of Terax, and Franco
Musumeci will serve as international styling director.
The Terax brand is distributed through spas, salons and
retailers in the U.S., Canada, Australia, Belgium,
Denmark, Greece, Italy, Spain and the U.K.
— Bryn Kenny
Collier Promoted at Gurwitch Products
NEW YORK — Sharon Collier has been named president of Gurwitch Products, the company that produces,
manages and markets Laura Mercier Cosmetics.
Previously, Collier held the position of executive vice
president. She has been with Gurwitch since it was
formed in 1996. Neiman Marcus Group Inc. owns 51 percent of the Laura Mercier Cosmetics color cosmetics
and skin care business.
— B.K.
4
WWD, MONDAY, DECEMBER 27, 2004
WWW.WWD.COM
Cartier Takes Big Steps in China
month, Cartier plans to open
three more stores, two in
Shenzhen and one in Chengdu.
It’s an opportune time for
Cartier, which is owned by
Compagnie FinanciГЁre Richemont SA, to make its move on the
world, according to the association. Annual jewelry sales here
soared to more than $12 billion
in 2003 — a number that’s only
expected to increase as Chinese
consumers become wealthier.
Cartier has had a presence in
ago made such massive expansion possible.
“We’ve taken a big leap forward in the last few years because China has joined the
WTO,” Elgue said. “In a sense,
the red tape is a lot simpler.
China for more than 15 years,
mainly through partnerships
with local sellers. It opened its
first freestanding store, in
Shanghai’s upscale Plaza 66
mall, five years ago. Elgue said
China’s admission to the World
Trade Organization three years
Some duties have been
dropped. Contracts have been
fulfilled or are being followed.
It’s not 100 percent easier, but
it’s improving. It’s a lot better [to
do business here] than 10 or
even five years ago.”
The loosening of China’s
Cartier’s new
Shanghai flagship
at night.
Chinese market. Jewelry has become the third-biggest consumption item in China after housing
and automobiles, according to
the China Gem Association. The
country is the biggest consumer
of platinum and the fourthbiggest consumer of gold in the
Fashion Scoops
AUSTRALIAN BUSH: George W’s model niece,
Lauren Bush, got a little taste of home for the
holidays Down Under. Her mother, Sharon, and
sister Ashley jetted into Sydney last week to
join her, and it didn’t take the Texan trio long
to get into the local party swing.
Last Tuesday, they legged it to HermГЁs for
pre-Christmas drinks on the company’s chic city
rooftop terrace, toasting the publication of a
book of poems penned by Australian model
Emma Balfour. Lauren, in Australia for six months
to study photography and anthropology at Sydney
University, followed boyfriend David de Rothschild
to Sydney from London after he moved a year
ago to study naturopathy (and is, sources say,
working on a naturopathy-based skin care line).
“It doesn’t feel like Christmas at all,” she said of
celebrating in the Southern Hemisphere, where’s
it’s summer. “Now that my mom and sister,
whom I haven’t seen in a while, are here, it’s
starting to feel a little more festive.”
The president’s niece made headlines here in
October when she turned up to the Melbourne
Spring Racing Carnival’s Derby Day in a cocktail
dress, a red headpiece — and her favorite cowboy
boots. Ditching that look for something a little
more summery at Hermès — a DKNY top and flip
markets has been coupled with
a rise in the country’s wealthy
elite, which analysts predict will
be the biggest luxury consumers
in as soon as 10 years. Nowhere
is the market’s potential more
obvious than in Shanghai, often
heralded as the richest and
most cosmopolitan city in China.
The Cartier party certainly
provided evidence for that designation. The guests that
crammed into Bund 18’s fourthfloor exhibition center were
decked out in designer clothes
and accessories — a style that
isn’t always the norm in most of
China’s other, more conservative cities.
The guests barely seemed to
notice the smell of fresh paint
that still hung in the air as they
milled about the ground-floor
boutique, a 2,626-square-foot
spot designed by French designer Bruno Moinard, who redesigned all the Cartier stores
last year and the plush party
lounge upstairs.
Since the opening also served
as a worldwide launch for the
company’s Panther jewelry collection, the party space was peppered with safari-inspired accents such as enormous gold
palm trees and fur-covered
chairs. A foursome of slinky panther-painted dancers clawed
and crept their way around the
champagne-drinking guests.
The party’s opulence is indicative of the extent to which
foreign companies are willing to
go to wow China’s current luxury consumers, as well as those
who will soon follow.
“Our presence here is an investment of our image,” Elgue
said. “The location is the best
advertising money can buy.
Thousands of people will be
crossing the street here every
day. They will become aware of
the brand and we hope they will
buy it when they’re able to in 10
or 20 years time. We know there
are a lot of people here who
can’t afford Cartier right now,
but we hope it’s a brand they
can aspire to in the future.”
skirt from local label Scanlan & Theodore —
Lauren said she is an Australian fashion devotee.
“I like it. I mean, it definitely fits with the weather
and atmosphere — it’s summery and flirty and
fun,” said Lauren, who leaves Australia in midJanuary. “It’s been a nice break.”
Sharon,
Lauren,
and
Ashley
Bush.
MIKIMOTO’S RESOLUTION: Mikimoto has had its
share of creating crowns and tiaras for royals.
In the U.S., though, it’s queens of the beauty
and talent kind that the American arm of the
pearl house has pursued in recent years. On
New Year’s morning, the Rose Queen and her
six Rose Princesses at the 116th Tournament
of Roses in Pasadena, Calif., will be gleaming
under almost $400,000 worth of Akoya and
South Sea cultured pearls and diamonds. The
queen’s crown alone is valued at $100,000,
took more than 10 weeks to complete and
weighs just over a pound. She and her court
attended the unveiling earlier this month at
the Mikimoto salon in Beverly Hills, where the
special collection will be kept on display.
WALK THIS WAY: Darryl “DMC” McDaniels of the
legendary rap trio Run DMC is launching his own
T-shirt and hat collection, titled simply, “Darryl M
Clothing.” The collection will mix today’s urban
stylings with a touch of the Eighties. The launch
of the tee and hat collection will coincide with the
release of McDaniels’ solo record in early 2005.
Darryl “DMC”
McDaniels
PHOTO BY WIREIMAGE
SHANGHAI — Make no mistake
about it: Cartier is concentrating on China.
The luxury jeweler threw a
huge party for the grand opening of its Shanghai flagship on
the Bund on Dec. 18, inviting
hundreds of the city’s socialites
to celebrate the second
Shanghai unit. But even those
who weren’t on the guest list for
the posh event couldn’t miss it:
An enormous Cartier-bannered
blimp circled over the Bund’s
waterfront location for most of
the evening, crisscrossing the famous skyline in the foggy night.
The Cartier store is the first
shop to open at the renovated
Bund 18 building, a stately former bank on the city’s waterfront thoroughfare. The historic
street is quickly becoming the
location of choice for luxury
goods firms in China.
A few blocks down from
Cartier is Three on the Bund, a
high-end complex that opened
in the spring with a Giorgio
Armani flagship and a JeanGeorges Vongerichten restaurant. Cartier’s neighbor at Bund
18 will be luxe men’s wear label
Ermenegildo Zegna, expected to
open soon.
For Cartier’s China flagship,
there was no better location.
“We already have a presence
in the most prestigious avenues
in the world, from the ChampsElysees in Paris to Fifth Avenue
in New York,” said Maxime
Elgue, managing director of
Cartier’s Far East operations.
“The Bund is the logical choice
to open our flagship in China.
Shanghai is the flagship city of
China and the Bund is definitely
the address to be.”
Before the opening festivities, Cartier’s China operations
had already had a busy month.
In the past five weeks, the company has opened three other
stores — in Hangzhou, Harbin
and Guangzhou — to add to existing boutiques in Beijing and
Shanghai. Within the next
PHOTOS BY RICHARD DOBSON
By Betsy Lowther
PHOTO BY THOMAS IANNACCONE
Where MAGIC happens.
WWDMAGIC 1st day
Section II: February 14
Close: January 27
WWD’s first-day coverage takes retail executives and buyers on a guided
tour of the contemporary, junior apparel and accessories event of the season.
Special coverage includes a calendar of events at the show and around
Las Vegas, plus trend forecasts, market news, vendor spotlights and more.
Advertise in this issue to make your own MAGIC:
• Drive buyer traffic to your booth.
• Make yourself heard even if you can’t be there.
Bonus Distribution: all on-site attendees at the show.
For more information, contact Ralph Erardy, senior v.p. group publisher, at 212-630-4589, or your WWD sales representative.
WWDMediaWorldwideВ®
6
WWD, MONDAY, DECEMBER 27, 2004
Holiday ’04: Nothin
Continued from page one
If retailers have learned anything from this holiday, it’s that consumers,
saddled with historic credit-card debt and higher fuel costs, are getting
choosier, and demanding greater values and products of color and distinction
when it comes to apparel and accessories. Otherwise, consumers switch their
dollars to iPods, digital cameras, Nintendo and PlayStation game systems.
“It was all about items, not assortments,” said Bob Goodfriend, chairman
and chief executive office of Goody’s Family Clothing, the Alcoa,Tenn.-based
apparel specialty chain. He acknowledged Goody’s may have missed some
sales on the hottest items, including velour sets and sweaters and that next
year, Goody’s will identify key items before the holidays and stock up for the
season. The chain may also seek to bring in more spring goods earlier, since
they’re selling well according to Goodfriend.
The concerns among store executives are compounded by the knowledge
that as 2005 progresses, they run up against strong results from 2004.
While the improving job market and increased Wall Street bonuses might
help the situation, Christmas hardly delivered a hopeful message for the future. There was a pickup in business towards the end of last week, particularly Thursday, though no big rush materialized in the final days. Consumer confidence indicators slipped a bit and the snowstorm in the Midwest last week
took a toll on certain locations, such as Chicago, Cincinnati and Columbus.
Still, after strong spring and fall sales trends, there’s no sense of panic that
retail profits for the year will be bad, and there have been certain bright spots
in the post-Thanksgiving weeks amid the general softening. Luxury retailers
made or exceeded goals and, in places like New York, were buoyed by tourism
and the resilient stock market. Also, Internet, electronics and gift-card sales accelerated beyond expectations; brooches, premium denims, contemporary
sportswear, and ponchos sold well, as did early spring merchandise. Also, stores
planned inventories conservatively, so there’s not insurmountable excess.
This year, there were 29 days between Thanksgiving and Christmas, compared with 27 a year ago, but one department store chief executive said
Sunday, “I don’t think the two extra days meant two extra days of business.”
As far as the season overall, “It didn’t have the same zip and zap at the end
that it had during the whole beginning,” he said. “Even some luxury businesses didn’t have a good month. The cold-weather business was not good, fur
picked up a tad, small cold-weather accessories, including gloves and scarves
in men’s and women’s were very difficult. Handbags were having a hot season
until December and men’s collections were soft. Spring will be more challenging than people have been thinking.”
Despite
pockets of
strengths,
department
stores had a
challenging
season.
MASS MALAISE, MASSIVE MARKDOWNS
LUXURY APPEAL
Compared to the mainstream, the luxury sector fared far better. Holt
Renfrew president Caryn Lerner said the Canadian chain will produce a 10 to
12 percent gain for the season, that inventories are “very much in line” with
about 30 to 35 percent of the selling floors currently displaying spring merchandise, and that the company was staging a big sales day on Sunday with 30
to 50 percent off on special items the company bought into, including private
Markdowns were often stratospheric.
PHOTOS BY THOMAS IANNACCONE AND BENNETT H. BRIAN
For the holiday period, Target is anticipating a 3 to 5 percent comp-store
gains, though Wal-Mart — the first to stir pessimism about the holiday season
after its weak Thanksgiving weekend — dropped its projections to a 1 to 3 percent comp gain, after initially predicting a 2 to 4 percent boost. Last Thursday,
Wal-Mart spokeswoman Sharon Weber characterized the retailer as “cautiously optimistic,” adding, “It’s tough to close our doors on a Saturday,” which this
year was Christmas Day. “It is generally such a big shopping day for us.”
Business was further dampened on Friday, Christmas Eve, when stores closed
early, at 6 p.m. They reopened 6 a.m. Sunday, which many retailers expected
to be a major shopping day.
Wal-Mart had its shelves ready. By late evening Dec. 23, the retailer stocked
fresh spring handbags, including colorful mock-croc styles and charm-strewn
barrel bags reminiscent of Juicy Couture. White Stag had a new grouping of
Americana-themed red, white and blue sweaters. Signs touting a “New Year of
Savings” appeared on everything from basic khaki pants to tax-organizer folders.
Summarizing the season, Weber listed cell phones, outdoor Christmas
lights, digital cameras, portable DVD players, satellite radio and high definition TVs as standouts. “What’s interesting is everything seems to be selling a
week later than in years past,” she said referring to purchasing patterns on
holiday decor and gifts.
A stronger performing and more promotional J.C. Penney Co. said traffic
was robust through Christmas Eve, with shoppers motivated by markdowns
and colder weather. Bestsellers included women’s, men’s and juniors’ apparel,
especially outerwear, gloves, shoes and fine and fashion jewelry, according to
spokesman Tim Lyons. “We’re standing by our forecast for low-single-digit
gains for the November-December selling period. Right now we’re about
where we expected to be. We’ve still got this coming week, including a doorbuster event that kicked off on Sunday morning at 7 p.m. with markdowns up
to 70 percent off on some merchandise.”
Macy’s Herald Square Sunday afternoon was crowded with bargain
hunters, though the aisles weren’t as clogged as they were in the week leading
up to Christmas. Markdowns on jewelry, hosiery, handbags and women’s coats
ranged from 25 percent off to as much as 65 percent, and in some cases shoppers received an extra 15 percent discount if they used their Macy’s card. The
coat department was especially busy, with a line at one register 13 people
deep around noon.
Hecht’s, the Washington, D.C.-based department store owned by May Co.,
opened its doors at 6 a.m. Sunday with deep post-Christmas sales, touting $29
women’s cashmere sweaters and 20 percent additional discounts with
coupons. On Friday at May’s Lord & Taylor unit in Chevy Chase, Md., there
were racks of up-to-65-percent-off fall and winter women’s sportswear and
separates, located amid full-priced spring fashions.
WWD, MONDAY, DECEMBER 27, 2004 7
WWW.WWD.COM
ng to Cheer About
The season's
biggest trend:
last-minute
shopping.
label cashmere sweaters, men’s socks and outerwear.
For spring, “We’re pretty optimistic and quietly confident,” she said. The
company will emphasize four themes in women’s: a cross cultural “global exchange” of eclectic customized and handmade clothes; “whiteout” for shades
of white on white; prairie girl looks with feminine, western slants, and “empire
building” featuring bolero jackets, short cropped knits and empire dresses.’’
“Our customer looks to us to have a point of view,” Lerner said.
Barneys New York also expects a double-digit gain for the holiday season,
said chairman, ceo and president Howard Socol. He said last week was strong,
with results exceeding plan, and that selling spring goods early, which
Barneys has been doing since the end of November, has been “one of the real
successes.” The plan for the next few weeks: “Just fight as hard as we can to
get new spring goods as quickly as we can.” The strongest categories at
Barneys have been handbags, jewelry, shoes [though not necessarily as gift
items] denim and contemporary sportswear.
Nordstrom cited Marc Jacobs’ jewel-tone cardigans with jewel buttons,
Juicy Couture track suits, handbags and wallets, and North Face Denali jackets in exclusive colors — lavender or pink — among the bestsellers.
“It’s definitely a luxury Christmas,” said Debra Gunn Downing, spokeswoman for South Coast Plaza megamall in Coast Mesa, Calif. “This Christmas
is not only our best Christmas ever, but our best year ever.” Ugg boots and Uggstyle boots were the bestsellers at stores throughout the center. Louis Vuitton
was packed Thursday, and Williams-Sonoma, had huge check-out lines. “I
think the week after Christmas will be just as strong as Christmas week, particularly with sales at many of the stores” said Gunn Downing.
“There’s really been no price resistance,” said Rose Clark, vice president
of merchandising at Stanley Korshak, Dallas
It’s a different story among the mass merchants, according to Marshal
Cohen, president of NPD Fashionworld. He said they fared just OK overall.
They would have done better, he argued, if shoppers had done more than just
cherry-pick the best deals from the shelves.
“The consumer did not come in looking to shop for themselves at the same
time they were busy hunting for bargains,” he said. “It was a very strategic
holiday shopping. People came in with the circular in hand, they bought what
they came for and then they moved on to the next deal. If it wasn’t an advertised special, it wasn’t found.”
After Christmas, Cohen expects a looser spending ethos. Armed with gift
cards, “They will be willing to pay full price for something new, something
spring in feel,” he predicted.
“We’re going to see in the final analysis the industry will have performed
where we expected” with a 4.5 percent year-over-year holiday sales increase,
said Tracy Mullin, president and chief executive officer of the National Retail
Federation. “It will be decent, but not spectacular.”
A more dramatic summation came from Arnold Aronson, managing director of retail strategies, Kurt Salmon Associates. “It’s been a nail-biter all the
way up to the end,” he stated. “With the exception of luxury accessories, there
hasn’t been a breakthrough silhouette or breakthrough fabrication, to stimulate apparel sales.”
The look of malaise.
GIFT CARDS, THE SILVER LINING
Still, January brings some hope. “The combination of gift cards
and a savvier customer who waits out the retailer for the lowest
price of the season is turning January into a much bigger percentage of fourth-quarter business than ever before,” Aronson
said. “Coming off a challenging Christmas season, retailers
now have to face up against one of the strongest six month periods in the past several years.”
“I continue to believe gift cards are the main culprit for
weak November and December sales and clearly we will
begin to see these redeemed Dec. 26,” said Mark Montagna,
senior analyst, Wells Fargo Securities. “Retailers are going to
catch up to some degree, but some of those catchup sales are
going to be at lower prices. What consumers purchase at 60 to 70
percent off now, before it was maybe 40 percent. However, retailers
will get the benefit of full-price spring merchandise. There is a propensity to
treat yourself when you have a gift card. And with these gift cards, you end up
spending a little more rather than risk leaving any dollars left on the card. It
seems like it’s a much more acceptable gift that people really enjoy. I don’t
think it has the stigma that paper gift certificates had. The gift cards have
kind of a cool look, and it’s easy to hold onto. You stick it into your wallet.”
The Mall at Short Hills in New Jersey, a property of Taubman Centers, reported that gift certificates were up 5 percent last week and 10 percent for the
season thus far, and that designer accessories and jewelry were selling the
best. Taubman’s Westfarms center in Connecticut reported that no less than 40
people were in line to buy mall gift certificates on Sunday.
A spokesman at Chicago-based General Growth Properties, considered the
nation’s second-largest shopping center developer, said gift cards sales rose at
least 20 percent over last year, while sales overall should be up between 2 and
3 percent.
At the Mall of America, the nation’s largest enclosed shopping center with
520 stores, sales were reported brisk in the last days before Christmas and retailers were bracing for an onslaught of shoppers starting Sunday, with the
mall opening at 8 a.m, three hours early for the day. “Our retailers are saying
they are having the best year in a long time,” said Maureen Bausch, mall vice
president for business development. Helping business have been European
shopping travel packages featuring lower U.S. prices, thanks to the falling
value of the dollar and strengthening Euro, Bausch said. She said one English
tour is offering airfare and two nights in a Minneapolis hotel for $400.
holiday
pulse
While many retailers stumbled, luxury stores continued on a roll this year.
— With contributions from Georgia Lee, Atlanta; Katherine Bowers,
Boston; Joanna Ramey, Washington; Michelle Dalton Tyree, Los
Angeles; Rusty Williamson, Dallas, and Cate T. Corcoran, New York
8
WWD, MONDAY, DECEMBER 27, 2004
WWW.WWD.COM
Innerwear Report
Looking for the Next Hot Idea
By Karyn Monget
NEW YORK — Despite the insatiable demand for
fashion lingerie and for product that delivers
comfort and innovation in the $12.4 billion
intimate apparel market, 2004 has been a tough
year for innerwear manufacturers and retailers.
Whether it’s a Fortune 500 company or one of the
few remaining midsize independent firms, the
quest for the next big idea or hot item is constant.
As the year draws to an end, a number of
executives are looking back at what strategies
and product launches succeeded. They are also
evaluating mistakes, such as pushing too many
simultaneous product launches, or myriad
introductions of new brands, collections and
classifications that overwhelmed retailers who
have limited space and financing. Another key
challenge was cracking the volatile issue of
safeguards as well as quotas from China, which
will be eliminated Jan. 1. In an effort to bolster
fall and holiday business, a majority of bra and
sleepwear vendors accelerated shipments from
China to the U.S. only to discover that the major
share of goods, air-shipped at staggering prices,
have been embargoed until after the New Year.
The reason: U.S. customs officials do not want a
glut of merchandise exceeding existing quotas
before 2005 begins.
Here is what top innerwear executives said
were their achievements and mistakes in 2004,
and their goals for the New Year.
Tom Ward, chairman and chief executive officer,
Maidenform Inc.
“I guess a couple of things were pretty good
for us in 2004. The sale of the $300 million
Maidenform to Ares Management [an
investment firm that manages assets in excess of
$4.5 billion] was very positive for us, and they’ve
been very supportive in building consumer
brands. They’re giving us a lot of resources
going forward. At the same time, Oaktree
Capital Management [an investment advisory
firm that manages assets of more than $29
billion] has kept a share of the business, and
that too has been very positive.”
Ward added that key product introductions,
including Maidenform Full Support bras for fullfigured women, have been a “big success,” as
well as Maidenform’s One Fabulous Fit panty
program. “We’ll be expanding product next year
and will also continue to build on Maidenform’s
multimillion dollar �I Dream…’ advertising
campaign.”
Addressing mistakes, Ward said, “It has been a
learning experience. If you can grow your
business and create innovation, you inevitably
make some mistakes. We learned from our
mistakes. I think the China safeguard issue was
probably the toughest learning curve. The
embargo situation made it even more difficult. It
used to be you could roll out your quota to the
next year, but there will be no next year to do
that.”
“We want to continue to grow our business
with product innovation in three core brands:
Maidenform, Flexees and Lilyette. We are
working very diligently with our designers and
merchandisers to make that happen. And we plan
to grow consumer awareness of our brands,
whether it’s point-of-sale materials, hangtags and
our �I Dream…’ ad campaign for fall 2005.”
Carol
Hochman’s
silky Oscar
de la
Renta Pink
Label
chemise.
Richard Leeds
takes the young
contemporary
route.
Natori’s best-selling
Marshmallow Robe.
want to be able to define and articulate what
modern lingerie is and how it should be. At the
same time, I want to maximize the momentum of
my bra business and continue developing my Cruz
line of modern sleepwear and loungewear that’s
affordable.”
James Mogan, president of the Intimate Apparel
Division, Kellwood Co.
Kellwood’s intimates business is not broken
down in the overall corporate $2.34 billion
reported in the fiscal year ended Jan. 31, 2004.
But it was announced in Kellwood’s third quarter,
ended Dec. 3, that intimate apparel sales slipped
$3 million from last year. Mogan, however, said
the intimates division is narrowing its losses with
several “extremely successful” launches in the
branded business: Oscar Pink Label bras, Sag
Harbor Sleepwear, Izod Swimwear and Izod bras,
which ship Jan. 30.
“We realized there was a tremendous
opportunity on the branded side that would make
a perfect balance with our private label business.
It’s kept us on our toes,” said Mogan.
Analyzing mistakes this year, Mogan did not
cite specifics. “It has not been a banner year for
the bra business,” he said. “There have been a lot
of product launches this year that have tied up
retailers who don’t have the time or space for
these launches. Some have done well, and
some poorly. Some have actually prevented
retailers from going after new initiatives.”
“The first goal next year will be to
make money for the retailer and for us.
We plan to capitalize on trends and give
the ultimate consumer the right product
at the right time at the right price.”
’05
goals
Maidenform
will invest
more in
advertising
in 2005.
Josie Natori, chief executive officer, Natori Co.
Natori, sizing up the 27-year-old company’s
biggest accomplishment for 2004, said: “As a
A look at Sag Harbor
company, we are totally focused on our brand,
Sleepwear’s spring
and I put 100 percent into it. This year was
campaign at Kellwood.
historic for us because of the number of our besta panty program which will be expanded into bras.”
selling items that sold for fall — 60,000 units of the
Regarding an unexpected challenge, Natori said,
Marshmallow Robe at stores, including Saks Fifth
“Being embargoed was very annoying. It was the first
Avenue, Neiman Marcus, Bloomingdale’s and Dillard’s.
time for us — 15,000 embargoed items — and that was
This is a new high for us, something we’ve never done
extremely annoying from both a cost point of view and
with our brands before. And we will be going forward
not being able to ship. Stores have been wonderful, but
with what we are calling an entire Marshmallow family
of lifestyle items.” The Marshmallow Robe, a lightweight,
we could have shipped more for fall. We had to ship by
ultrasoft polyester sweater knit, wholesales for $31.25
air. However, by the time everything arrived, it was
for short styles and $40.50 for long silhouettes.
embargoed.”
Natori, whose company generates wholesale volume
As for initiatives in 2005, Natori said, “We are
in excess of $40 million, added, “We’re going full steam
introducing a new label, the Josie Natori Collection. It
with our licensed Natori Black Label and Natori White
will represent a modern lifestyle concept, from bras to
foundations at Dana-Co., as well as Natori Underneath,
loungewear. Before it was innerwear as outerwear. I
Richard Leeds, chairman, Richard Leeds
International
Leeds, whose sleepwear and daywear
company specializes in licensed characters,
said his “biggest hits” this year have revolved
around the continuing infatuation with products
that convey a vintage, nostalgic look. “Intimate
apparel and sleepwear should be all about fun
and taking yourself less seriously in the safety of
your home,” he said. “Our greatest successes this
year have been vintage Betty Boop, adorable
Tweety, Winnie the Pooh’s doleful Eyore,
irrepressible Mickey, and young, contemporary
Barbie and David & Goliath.” The company
generates wholesale volume of more than $100
million, according to industry estimates.
Regarding any missteps, Leeds said, “It was a
mistake we didn’t open our Los Angeles office
sooner, like six months ago. It opened in
November, and we hired a creative director at
Disney, Soo Koo, along with an art staff. They’ve
brought a lot of fresh new vitality to the business
that addresses an active, younger market. And it
brings us in touch with the [movie] studios.”
Leeds said he has “aggressive plans” for 2005.
“We want to focus on the branded products that
are performing the best at retail and move away
from private label,” he said. “We want to build a
layer of branded products, through licensing
other brands that will complement our better
brand, French Jenny, and continue with a strategy
that is multitiered and multigenerational for
young, contemporary men and women as well as
girls. We also plan to continue to do exclusives for
every retailer we service, which will be backed
up by a full-service effort and analytical support.”
Carole Hochman, chairman and design director,
Carole Hochman Designs Inc.
Hochman made some brief observations,
saying, “Our greatest accomplishments this year
were launching and shipping three new brands —
Betsey Johnson Intimates and Lauren Ralph Lauren
sleepwear and daywear — and taking on a new brand
into our family, Stan Herman robes and loungewear.
This was an amazing challenge. Our licensors are
happy, our customers are happy, and we are happy we
lived to talk about it.”
“What was the biggest challenge?” Hochman reflected.
“Introducing three brands in one year — just kidding.”
A self-described workaholic, Hochman said her goals
for the company, which generates estimated wholesale
volume of more than $100 million, will be to “maintain
the energy, enthusiasm and commitment to our brands
that’s been generated by these new endeavors.”
WWD, MONDAY, DECEMBER 27, 2004 9
WWW.WWD.COM
Accessories Report
Aiming for Bigger and Better
By Marc Karimzadeh and Emily Holt
NEW YORK — From launching categories to opening
more stores around the U.S., accessories executives,
whatever their successes or disappointments were in
2004, are approaching the new year focused on business
and personal growth.
WWD polled top executives on their goals for 2005,
and what their best accomplishments and biggest
mistakes were in 2004. Here’s what they had to say.
Stanislas de Quercize, president and chief executive
officer, Cartier
“We are very pleased with the new partnerships
we’ve created. We have a new boutique with London
Jewelers in Manhasset [N.Y.] and a new boutique with
Neiman Marcus in Houston. This year, we renovated
our stores in Bal Harbour [Fla.],
Costa Mesa [Calif.] and the Royal
Coach’s
Hawaiian [a mall in Honolulu].
Reed
And we are very pleased to see
Krakoff.
the Santos line [of watches] be a
bestseller.
“The biggest disappointment
is the fact that women are still
shying away from wearing
watches when they get married,
and in the evening they don’t
wear jewelry watches as much.
“Next year, we will go ahead
with major renovations in our
boutiques in Chicago, Los
Angeles and Houston, and new
partnerships. We are opening a
new boutique with Steve Wynn in
Las Vegas.”
for Las Vegas for 2005. The launch of our pearl business
was successful beyond our wildest dreams, and we
carved out a significant amount of market share for us.
Right now, our biggest mistake was that we didn’t
project enough for our limited-edition pieces. They just
sold out and are gone.
“We lost Murray [Kleinrock, Sybil Yurman’s father].
He was the heart and soul of our business. Losing him
was a great sadness. Next year is our 25th-year
anniversary, so we are planning lots of things around it,
including opening more
freestanding stores.
“One of my
personal goals is
to compete in the
amateur reining
competition in
’05
goals
Kari Sigerson and Miranda Morrison, owners, Sigerson
Morrison
“Last year we had a dynamite launch for our new
Belle line and we expanded our exposure within
Europe. In the next year we’d like
to continue to develop and
represent the line with the
addition of Belle shops in
some unexpected hip
neighborhoods on both
coasts.
“Our biggest challenge will
continue to be coping with the
effects of the plunging dollar and
в–І David Yurman to add value to our product
launched a pearl without adding to price. We’re also
collection in 2004. reaching out to customers in new
ways by holding trunk shows and
expanding our e-commerce site.”
Jennifer Tash, founder, Isabella
Fiore
“Our biggest accomplishment
last year was setting up a shoe
division. We have always seen
the company as a full-line
accessories company.
“The biggest mistake is that I
should have spent more time
with my husband this year. My
personal life came second to
everything because so much was
going on. I hope in 2005, my first
marriage is to my husband and
my second is to my business.
“Next year, we are working on
a large branding and advertising
campaign because we have
always been the little engine that
could.”
Larry Leight, chief
designer and co-founder,
Oliver Peoples
“Our sales last year
were the best ever in
the company’s 18year history. We
focused more on
the sunglass
division of the
brand and
created
designs that
were
extremely
stimulating and
desirable. There
were no mistakes
this year. It was the
best, our most
favorite, the most fun
Cartier’s
year. But the sunglass
Santos-100
market is also harder
watch.
than it’s ever been.
“We’re opening a
store in South Coast Plaza in February and also
launching a new brand, Mosley Tribe. It’s an entire
brand, but is starting out with sunglasses. We might do Tshirts, home stuff, whatever I’m into.
“I would like to spend more time traveling to tropical
areas; a little more fantasy vacation is in order. I’d like
to go to Australia and then somewhere in the South
Pacific, like Tahiti or Fiji.”
в–І
Reed Krakoff, president and
executive creative
director, Coach
“I think one of the
biggest
accomplishments
is the continued
balance of a brand
with large sales,
but one that is run
like a small
company. The biggest
accomplishment for us
Andy and Kate Spade
is maintaining and
accelerating the rate of
Isabella Fiore is
Oliver
growth after a number of years of
expanding
Peoples’
growth. This year, we introduced
with
Larry
a lot of new ideas for Coach such
shoes.
Leight.
as Madison, which was an evening
collection with a new attitude the
consumer reacted well to.
“A personal mistake was that
burgundy velvet suit I had
Graff opened a flagship
custom-made, and before I ever
in Chicago last month.
wore it, I gave it away.
“For 2005, we’d like to
February in Tampa. I am going to work toward that.”
maintain the momentum at Coach while balancing life
and work. One personal goal is to finish the renovation
John Truex, co-owner, Lambertson Truex
of our house in the Hamptons. I am also working on
“Richard [Lambertson] and my biggest
publishing a book on [industrial designer] Ron Arad —
accomplishment was hiring a president, Michelle
a goal is to finish that.”
Ateyeh, to help us manage the growth of the company.
“Being a luxury company that makes its products in
Andy Spade, chief executive officer and creative
Europe, our biggest challenge is the relationship
director, Kate Spade
between the dollar and the euro. I’m hopeful it’ll
“Professionally, we launched Kate Spade home and
improve.
tabletop, which exceeded all expectations. Shoes were
also very successful, and Jack Spade had a phenomenal
“My personal goal is to have a better balance
year — it’s finally getting off the ground. And then
between my professional and personal lives. Richard
personally, my wife and I are going to have a baby [Kate
and I are very happy. We think we’ve accomplished
Spade is due in early February].
what we’ve set out to accomplish. But I would also like
“Home was a challenge, going from handbags to
to see myself in a few more sunny states, and should it
be a Mercedes G-Class SUV that takes me from here to
tabletop, but actually it was easier than we thought. The
there I wouldn’t mind that.”
handbag market today is a constant challenge because
of the competitiveness and the need to be more
Henri Barguirdjian, president, Graff
innovative than ever.
“The biggest accomplishment was opening our Chicago
“I think the big thing [for next year] is retail
building in five months. I am proud to report that it’s been
expansion. We have a very aggressive plan over the next
doing extremely well since it opened [last month].
five years. We don’t have any more categories on our list,
“If there is anything that I would have done
but we have planned to open about 10 new stores next
year. We’re looking on the Upper East Side, Midtown and differently, given the great results that we have had, I
would have been even more aggressive in my
also in Los Angeles. London is also a priority.”
advertising budget. I’d be very happy if 2005 is as good
as 2004. Next year, we are going to open our fourth store
David Yurman, owner, Yurman Design Inc.
at the Wynn Resort in Las Vegas in April, move the
“We opened up stores in Atlanta, Houston, Bal
offices in New York to new headquarters, and complete
Harbor and Manhasset and we are finalizing the plans
the third phase of our expansion program with Saks,
which will bring our product to a total of 22 Saks stores.
There is still a lot to do.”
Al Berg, chief executive officer, Marchon Eyewear Inc.
“Rolling out Coach [eyewear] was a major
accomplishment. We also launched CK Optical globally,
and finalized the business plan for Fendi worldwide.
We did the same with Michael and Michael Kors. We
launched Oscar de la Renta suns this year, and of
course Nike continues to grow. I wish I had produced
more product. We underestimated demand and
therefore slowed our roll-outs and did not
meet demands.
“Clearly our goal is accurately forecasting so we match
demand with production. And I am certainly interested in
another big, strong European brand for 2005.”
10
WWD, MONDAY, DECEMBER 27, 2004
Brewing to Boutiques: M
The entrance to the Historic Third Ward area of Milwaukee.
The Renaissance building that houses Hers fashion boutique.
Sarah Brucker, owner of Blush.
A display of streetwear shoes in the Moda 3 boutique.
PHOTOS BY PETER ZUZGA
Jennifer Hemberger, owner of J. Bird.
By Rebecca Kleinman
MILWAUKEE — Elissa Elser remembers driving two to
six hours from here to the suburbs of Chicago or Detroit
for trendy, brand-name shopping. A decade later, Elser,
now the owner of Hers boutique in Milwaukee’s
Historic Third Ward warehouse district, can’t keep designer Louis Verdad’s clothing in stock.
“I only ordered a few things when we opened last
April, because I wasn’t sure if Milwaukee would understand the line,” she said of the designer’s linen jacket
with princess sleeves and black cotton skirt with ivory
petticoat, which sell for $250 and $300, respectively.
“But they were the first to go.”
Hers boutique represents part of the city’s transition
from its blue-collar roots, epitomized in that television ode
to the 1950s, “Laverne and Shirley,” to a hip metropolis that
has been receiving more attention for architect Santiago
Calatrava’s $100 million addition to the Milwaukee Art
Museum than the city’s breweries and cheesehead hats.
“It’s not so much about having a negative image as
having no image now,” said Bret Mayborne, economic research director for the Metropolitan Milwaukee
Association of Commerce (MMAC). “We’re in the process
of producing what that will be, like — today’s promotional materials start with the museum instead of a brewery.”
Milwaukee has been synonymous with an industrious
spirit since its origins as an Indian settlement. The city’s
name is derived from an Indian term for “gathering
place,” and in the 19th century European immigrants developed it into a bustling trade region. The city claimed
four major breweries in its heyday, and its economy
helped build strong ethnic neighborhoods, ornate architecture, and a thriving cultural and entertainment scene.
Milwaukee’s manufacturing jobs sector, about 17 percent
of the city’s employment picture in 2003, according to the
MMAC, rates higher than the national average of 11.2 percent for U.S. metropolitan areas. Harley-Davidson motorcy-
cles and Briggs & Stratton, a producer of small gasoline engines, still serve as pillars of Milwaukee manufacturing. But
much like the rest of the nation, there’s a shift toward service-based companies, such as Kohl’s Department Stores,
headquartered in the suburb of Menomonee Falls, Wis., and
Northwestern Mutual, a Milwaukee-based insurance and financial services provider.
Of the city’s four major breweries, only Miller
Brewing Co. remains. While manufacturing jobs declined to about 136,000 last year from 167,000 in 1999,
the most recent figures for service positions total more
than 650,000. From statistics compiled by the U.S.
Department of Commerce’s Bureau of Economic
Analysis and by the U.S. Department of Housing and
Urban Development, the MMAC concludes per capita
personal income in Milwaukee rose 22.5 percent from
1997 through 2002, and median family income increased
almost 12 percent from 1999 through 2004 to $57,000.
Retailers and restaurateurs have courted this new work
force with its desire for high-end goods and services.
The city’s two upscale malls have already addressed
the transition. Bayshore Mall, in the North Shore area,
plans a $267 million renovation and expansion that will
return the 50-year-old enclosed structure to its original
open-air concept and will include almost one million
additional square feet for retail and dining. Completion
is slated for 2006, though no anchors or specialty stores
have been announced. To the west, where farmland is
being replaced by housing developments, Mayfair Mall
in the suburb of Wauwautosa, Wis., underwent a 2001 redesign with an extra 90,000 square feet of retail space.
At the request of retailers, 125,000 additional square
feet will be developed over the next few years.
Yet no project shows off how the city has evolved better than the Third Ward, the gentrified warehouse neighborhood south of downtown that is notable for its late
19th-century and early 20th-century architecture, its residential component, proximity to hotels, and prime loca-
tion between Lake Michigan and the Milwaukee River.
Realizing the potential, property owners in 1976 established the Historic Third Ward Association, followed by
the city’s second Business Improvement District in 1987.
Entrepreneurs who relocated to other markets have
been impressed by the results.
“I never thought I’d move back home, but I couldn’t
believe how up-and-coming this place is,” said Sarah
Brucker, a neighborhood resident and the owner of Blush
beauty store. Departing as soon as she turned 18, Brucker
worked as a makeup stylist in Los Angeles for eight years
before opening her Third Ward business in October.
“Big loft windows create the perfect light for applying makeup,” said Brucker, who instructs customers on
how to use high-end brands like Laura Mercier. She
rings up sales of the line’s Secret Brightener for $30 and
Foundation Primer at $29. Customers are also snapping
up 15 Diptyque candles per week, Miller Harris fragrances and Tweezerman Fast Lash eyelash extensions.
Women from as far as Appleton, Wis., a two-hour drive
north of Milwaukee, have become regulars, while
Brucker drums up more buzz through events like Pretty
Tuesdays at a nearby piano bar, where girlfriends sip
Champagne and have their makeup done. ”Each weekend’s sales get crazier,” she said, projecting total sales
of more than $300,000 in 2005.
Elser became familiar with the Third Ward through
her husband, who owned a home there. Finding other
shopping districts saturated, the former Barneys New
York saleswoman and Marshall Field’s personal shopper chose a 2,000-square-foot loft. “We were lucky to secure something that small,” she said.
Shoppers, who want instant access to contemporary
lines featured on red carpets and in magazines, heard
about the store through word of mouth before it even
opened. Top-selling items are Farinaz blouses in a variety of styles; fabrics and details from ruching to sleeve
buttons, and Rebecca Taylor bubble skirts in silk taffeta
WWD, MONDAY, DECEMBER 27, 2004 11
WWW.WWD.COM
Milwaukee’s Style Evolves
Eric Kuester, manager of Moda 3.
paired with lace wraps in matching pastels. “I must
have reordered the skirt three times,” said Elser, predicting total store sales of more than $500,000 in 2005.
Accessories move just as quickly, with brooches,
pearl jewelry by Elyssa B. Design and Beth Frank’s
western-inspired belts in the lead. Isabella Fiore is the
store’s most popular handbag line, though young women
favor Laura Merkin’s convertible, metallic clutches. “I
can sell a $600 bag, but it has to be special. Kate Spade’s
black basics didn’t do well,” she said.
Discovering that novelty T-shirts also outsell basics,
Elser carries more exclusive, emerging lines, along with
Fal and Grassroots, to wear with Oliver Twist mediumrise denim. Tom K. Nguyen’s suits, such as multicolored,
metallic pinstripes with a pleated peplum, appeal to professionals seeking some zing. “They don’t want traditional looks from Banana Republic or Ann Taylor,” she said.
Elser’s thrilled with Robert Rodriguez’s velvet blazer, rhinestone-embellished blouse and cashmere
sweater. Trunk shows like this fall’s event for Sampson
Martin maternity tanks — maternity wear makes up 15
percent of apparel — also introduce new merchandise.
Neither Carrie Arrouet nor Stephanie Sherman had retail backgrounds, but they didn’t like watching local dollars
flow to Chicago. In October 2003, they debuted Lela, a 1,200square-foot store combining consignment, contemporary
labels — including Mica and Trina Turk — and selected
new designers. “We contacted both clothing companies featured on �The Apprentice,’ but only Mel en Stel decided to
show with us,” said Arrouet, who also carries Chicagobased Doris Ruth’s feminine, ruffled styles for $140 to $420.
“She won Gen Art’s Fresh Faces in Fashion and presented her spring 2005 collection, themed �Candyland,’
at Dylan’s Candy Bar in New York,” Arrouet said.
The partners also are big fans of Scarlet’s retro coats.
Retailing from $250 to $450, they’re known for vintage
cuts, silk linings and quality workmanship. Jewelry favors
locals, too, including Renee Fensin’s abstract designs in
Elissa Elser,
owner of
Hers
fashion
boutique.
beaded, twisted wire and Stella Style’s blend of old materials and modern styles. Brooches, ponchos and chokers
top fall accessories. “Vintage Gucci or Prada bags also disappear in a day,” said Arrouet, who devotes 50 percent of
merchandise to used clothing and accessories.
Hoping to discover the next Zac Posen, she reports
that sales already exceed the business plan and will
jump 20 percent in 2005 to $250,000. “This area is so ripe
for our vision,” Arrouet said. Her partner, Sherman,
added, “Our goal was to pioneer a fashion district when
we started, and that's exactly what happened.”
J. Bird Boutique is the Third Ward’s newest women’s
apparel store. From the start, owners Jennifer
Hemberger and Robert Leschke benefited from a streetlevel location in a residential building with 125 units.
Hemberger said many have already stopped by for
Blujeanious low-rise denim, Hanky Panky lingerie and
Design History T-shirts.
The former jewelry sales manager decided to bring
to her hometown the boutique culture she experienced
on business trips to New York, California and Atlanta.
“Milwaukee had many stores catering to bridge collections, but nothing really for the edgy, price-conscious
market,” said Hemberger, describing Chicago-based
Lara Miller’s cotton sweaters, averaging $200, as a good
middle-of-the-road example. “It can be worn as a cowl
neck or flipped over to make a bateau.”
Total sales for 2005 are expected to reach $350,000,
Hemberger said. Industrial, chic decor juxtaposes polished concrete floors and exposed ducts with crystal
chandeliers, shag carpets and a midcentury curved love
seat. The inviting atmosphere suits events like shopping
nights, bridal showers and stylist seminars on tips from
storage to updating wardrobes. Hemberger reports
neighborhood organizations also excel at promotions.
Nancy O’Keefe, executive director of the Historic
Third Ward Association, predicts the number of events
and attendees will skyrocket when the Milwaukee
в–І
Rings
designed by
Lisa Jungers
are on
display
in Hers
boutique.
A display
of women’s
clothing
including
designs by
Mel en Stel
in the Lela
boutique.
Public Market, a collection of independent organic food
vendors, opens in 2005. “They expect 20,000 visitors per
week,” she said, listing two theaters, a design school
and an advertising museum as other attractions.
The 10 tons of snow shipped in for a snowboard festival hosted by Moda 3, a snow, skate and streetwear store
launched in June 2004, also caught the attention of 1,500
revelers. “Passion is what drives this store,” said Moda
3 owner and West Coast transplant Christian Deaton,
projecting sales of $500,000 in 2005. “I want to bring
New York ambiance to this town.”
His roomy, minimalist setup showcasing perfectly assorted gear would be the envy of many an urban skateboard or snowboard retailer. Deaton and manager Eric
Kuester are most surprised by the response from
women. “This category tends to have a larger male audience, but half our business comes from women,” said
Kuester, who orders women’s apparel from Triple Five
Soul, Puma and Roxy. “Even thirtysomething women
buy Gravis iPod holders and messenger bags, Nixon
watches with wide bands and Hurley sunglasses, too.”
Items retail from $60 for sunglasses to $100 for tracksuits to $150 for handbags manufactured from discarded
skateboards. Deaton plans to shop WWDMAGIC next year
for women’s streetwear and more feminine collections.
Though the Third Ward is also the go-to place for
progressive cuisine — diners can’t get enough of
Nanakusa Japanese Restaurant’s golden scallop maki
roll or Sauce’s small plates and pineapple-kiwi martinis
— a new batch of pioneers is edging south into less developed neighborhoods.
“It’s the ripple effect,” said O’Keefe, speaking of business owners such as Areka Ikeler, who designs Fashion
Ninja, a collection of deconstructed, reinterpreted vintage clothing, and teaches sewing. “I opened here because it’s where I grew up and it was affordable,” Ikeler
said. “But now trendy restaurants, bars and shops are
moving in. It’s starting to become a district.”
12
WWD, MONDAY, DECEMBER 27, 2004
Financial
Weekly Stock Index
52-WEEK
HIGH
LOW
47.35
34.38
46.93
31.43
42.16
4.95
17.95
24.29
23.63
29.45
22.24
9.59
47.60
36.61
47.34
27.01
27.50
23.19
19.45
118.18
39.66
58.16
27.59
25.72
14.80
9.15
19.58
3.40
32.30
41.50
119.69
54.10
27.89
36.48
28.07
73.40
47.35
25.78
46.81
9.70
32.86
17.92
55.90
20.49
42.01
19.18
14.01
39.82
54.14
26.82
4.20
48.47
61.31
10.12
6.75
31.30
23.07
17.20
15.80
19.98
16.45
1.40
9.62
17.42
11.31
18.85
8.84
5.17
33.82
16.77
33.73
19.55
15.21
16.91
14.50
62.59
25.09
42.80
19.97
18.12
7.35
3.30
11.14
1.15
13.85
25.29
22.41
39.59
17.35
23.04
12.11
47.48
33.04
17.25
38.33
4.10
20.95
11.61
31.21
12.14
27.35
7.60
6.86
24.11
36.63
20.64
1.77
18.17
51.08
0.69
1.95
24.59
52.30
46.65
26.06
35.94
56.26
62.18
34.80
25.16
49.34
32.37
10.89
42.85
33.36
40.00
45.10
37.39
42.35
5.00
19.40
92.43
2.65
47.50
29.95
29.95
40.98
31.15
42.95
3.93
19.73
3.85
18.25
4.88
6.88
55.29
22.76
39.51
30.81
20.60
19.50
33.75
49.22
24.30
17.59
37.55
17.68
5.69
32.77
11.32
33.00
31.32
24.66
32.09
2.67
12.79
65.81
0.46
33.25
18.20
16.45
27.28
16.38
31.25
1.96
15.60
0.71
8.47
0.23
0.65
42.06
15.43
RETAILERS
Abercrombie
Abercrombie&&Fitch
Fitch
Aeropostale
Aeropostale
American
AmericanEagle
Eagle
Ann
AnnTaylor
Taylor
Bebe
Bebe
Bluefly
Bluefly
Bon-Ton
Bon-Ton
Burlington
BurlingtonCoat
Coat
Cache
Cache
Cato
Cato
Charlotte
CharlotteRusse
Russe
Charming
CharmingShoppes
Shoppes
Chico’s
Chico'sFAS
FAS
Children’s
Children'sPlace
Place
CVS
CVS
Deb
DebShops
Shops
Dillard’s
Dillard's
Dollar
DollarGeneral
General
Dress
DressBarn
Barn
eBay
eBay
Family
FamilyDollar
Dollar
Federated
Federated
Foot
FootLocker
Locker
Gap
Gap
Goody’s
Goody's
Gottschalks
Gottschalks
Guess
Guess
Harold’s
Harold'sStores
Stores
Hot
HotTopic
Topic
J.C.
J.C.Penney
Penney
Kmart
Kmart
Kohl’s
Kohl's
Limited
LimitedBrands
Brands
May
MayDept.
Dept.Stores
Stores
Mothers
MothersWork
Work
Neiman
NeimanMarcus
Marcus
Nordstrom
Nordstrom
Pacific
PacificSunwear
Sunwear
Regis
Regis
Retail
RetailVentures
Ventures
Ross
RossStores
Stores
Saks
Saks
Sears
Sears
ShopKo
ShopKo
Stage
StageStores
Stores
Stein
SteinMart
Mart
Syms
Syms
Talbots
Talbots
Target
Target
TJX
TJXCos.
Urban
Outfitters
United
Retail Group
Walgreens
Urban Outfitters
Wal-Mart
Wal-Mart
Wet
WetSeal
Seal
Wilsons
WilsonsLeather
Leather
Zale
Zale
VENDORS
Alberto
AlbertoCulver
Culver
Avon
Avon
Benetton
Benetton
Cherokee
Cherokee
Coach
Coach
Columbia
ColumbiaSprtswr
Sprtswr
Del
DelLabs
Labs
Elizabeth
ElizabethArden
Arden
EstГ©e
Est?eLauder
Lauder
Fossil
Fossil
G-III
G-III
IFF
IFF
Inter
InterParfums
Parfums
Jones
JonesApparel
Apparel
Kellwood
Kellwood
Kenneth
KennethCole
Cole
Liz
LizClaiborne
Claiborne
Mossimo
Mossimo
Movado
Movado
Nike
Nike
Novel
NovelDenim
Denim
Oxford
Oxford
Perry
PerryEllis
Ellis
Phillips-Van
Phillips-VanHeusen
Heusen
Polo
PoloRalph
RalphLauren
Lauren
Quiksilver
Quiksilver
Reebok
Reebok
Revlon
Revlon
Russell
Russell
Tarrant
Tarrant
Tommy
TommyHilfiger
Hilfiger
Tropical
TropicalSprtswr
Sprtswr
True
TrueReligion
ReligionApparel
Apparel
VF
VFCorp.
Corp.
Warnaco
Warnaco
WWDStock Market Index
Composite:
1151.42
Retailers:
1116.98
8.54
8.73
Vendors:
1343.09
6.89
Index base of 100 is keyed to
closing prices of Dec. 31, 2002.
P/E
VOLUME
(00’S)
LAST
CHANGE
20.7
21.3
22.5
13.8
40.1
13.1
14.5
21.7
18.3
15.3
15.2
30.3
27.9
19.6
21.7
37.4
21.3
17.0
104.1
19.8
14.5
16.7
16.6
19.0
19.1
21.0
18.1
20.1
24.3
15.9
14.2
10.8
16.5
18.1
16.9
19.3
23.2
21.9
41.2
5.4
13.6
13.8
23.6
15.4
22.8
17.1
42.4
23.0
15.6
71741
34550
45546
51958
24123
4713
1717
4920
7596
5939
14802
27738
53403
33475
87481
385
38497
55719
12586
326433
55877
106046
36864
343691
5179
974
13153
371
69124
131953
79838
150701
153243
107928
792
12070
60374
66396
9308
2337
44946
79583
120655
13566
8348
9668
2357
17661
216414
109868
3607
49997
574277
97171
3813
13254
46.46
29.80
46.23
21.34
41.41
1.93
15.21
22.28
17.81
29.15
10.57
9.39
45.61
36.14
45.01
25.00
26.09
20.09
17.24
113.35
29.78
55.24
26.64
21.23
8.58
8.09
12.40
1.38
17.11
40.00
100.29
46.74
22.91
28.70
12.19
72.55
46.40
22.18
45.80
6.95
27.95
14.26
51.50
18.06
40.31
16.83
11.85
28.10
50.50
24.89
4.00
43.46
52.55
2.11
4.07
30.34
2.01
-0.17
0.81
0.21
2.45
-0.24
-0.17
-0.62
-0.06
1.15
0.60
0.14
0.67
3.30
0.12
0.73
-0.23
0.03
0.30
-2.35
0.03
0.27
0.09
0.87
-0.04
-0.41
0.66
-0.02
1.08
0.03
-0.98
0.49
-1.08
0.63
-0.36
3.20
0.15
-0.02
0.71
-0.04
0.17
0.10
-0.44
-0.05
0.88
-0.13
-0.72
0.41
-0.69
0.23
0.04
0.13
-0.20
0.26
-0.26
-0.39
30.8
12.3
33.7
19.4
35.8
18.0
19.5
26.8
14.6
345.5
19.6
18.7
14.5
12.1
16.5
14.6
19.1
16.9
21.9
16.7
8.2
115.5
19.3
21.3
14.1
11.9
9.0
73.3
13.0
-
12933
149944
192
1858
68484
11037
648
4770
32512
39472
169
15595
3025
51035
11197
7810
24930
2321
2922
89102
279
3283
5663
11471
16005
20147
36738
30489
4255
3150
25733
168570
20922
20116
12547
48.10
38.43
26.06
35.32
55.31
59.61
34.65
23.56
45.95
25.14
6.90
42.64
15.50
35.40
33.97
30.24
40.94
3.32
17.44
91.63
1.17
40.15
20.50
26.96
40.55
29.82
42.00
2.32
18.96
1.98
10.73
0.25
6.60
54.01
21.40
0.54
-0.05
1.07
1.88
0.07
1.85
0.24
0.53
-0.83
0.07
0.25
0.08
-0.10
-0.87
-0.46
1.08
0.56
0.33
-0.75
5.73
-0.01
0.75
0.08
1.25
0.55
0.32
1.12
0.01
-0.10
-0.01
-0.17
-0.19
0.75
0.22
0.44
WWDCOMPOSITE STOCK INDEX VS. S&P 500
AMT
Weekly % Changes
(ending Dec. 23)
Largest Gainers Close
Wet Seal
2.11
True Religion
6.60
Mossimo
3.32
Children's Place 36.14
Hot Topic
17.11
Change
14.05
12.82
11.07
10.05
6.74
Largest Losers
Close
Tropical Sprtswr 0.25
Bluefly
1.93
Wilsons Leather 4.07
Syms
11.85
Gottschalks
8.09
Change
-43.18
-11.06
-6.00
-5.73
-4.82
S&P 500
WWD COMPOSITE STOCK INDEX
9/17
10/1
10/15
10/29
11/12
11/26
12/10
12/23
WWDSTOCK INDEX POSTS GAIN
NEW YORK — Amid a year-end rally
for the major stock indices, spurred
partly by a decline in oil prices, the
WWD Composite Stock Index ended
the shortened holiday week up 0.7
percent at 1,151.42 from 1,142.87
the previous week.
On Thursday, the S&P 500 closed
at its highest level since Aug. 3,
2001, helping it to end the week up
1.3 percent at 1,210.13 from its
close of 1,194.22 the prior week.
The S&P and Dow Jones Industrial
Average returned to pre-9/11 levels.
The New York Stock Exchange was
closed on Friday, Christmas Eve.
The S&P Retail Index finished the
week up 1 percent at 454.46 from
An analyst estimates Wal-Mart domestic sales will account for about 6.3
450.10 last week.
A slew of economic reports con- percent of total retail sales in the U.S. this year.
tributed to the week’s stock gains.
Tuesday’s final reading of gross domestic product showed the economy expanded at a 4 percent annualized rate in
the third quarter, up from 3.9 percent in the second quarter. A report on Thursday showed a 1.6 percent increase in
November durable goods orders, which compared with a 0.9 percent drop in October.
A Thursday reading of consumer sentiment, as measured by the University of Michigan, rose to 97.1 in
December from 92.8 in November. But November consumer spending came in with a weaker-than-expected 0.2
percent rise on Thursday, versus the 0.3 percent increase economists were anticipating, and softer than October’s
0.8 percent rise.
Meanwhile, in a slight snag to the merger of Kmart Holding Corp. and Sears, Roebuck Corp., the two companies
said late Wednesday that they voluntarily agreed to withdraw the Hart-Scott-Rodino Notification and Report forms
—notifications mandated by the government for acquisitions of public companies — previously filed with the
Federal Trade Commission.
The companies said in a statement that the FTC requested more time because of the holiday season to complete
its review of their merger. Kmart and Sears plan to refile the forms by Dec. 28, pushing the FTC review period expiration into January, but the merger transaction is still expected to close in March.
Kmart shares closed the week essentially flat, closing the day at $100.29 compared with $100.28 last week,
while shares in Sears ended gaining 0.6 percent, closing at $51.50 from a prior-week close of $51.20.
An upgrade of Ross Stores Inc. on Wednesday by Merrill Lynch helped the company close the week up 1.7 percent at $27.95 from $27.47 last week. Analyst Marni Shapiro raised her rating to “buy” from “neutral,” saying in a
report that the off-price retailer “is coming off its worst year in a decade due to systems issues and to a lesser degree a distribution center roof collapse.”
Shapiro expects earnings to accelerate in 2005 and lifted her earnings estimate on the year to $1.60 a share
from $1.40. Ross Stores “remains a key player and second only to TJX Cos. in [the] off price [sector],” Shapiro said.
In a research note released on Monday, Bernard Sands retail analyst Richard Hastings dismissed the notion of
reading Wal-Mart’s less-than-stellar holiday sales results as an indication of the weakening spending power of U.S.
consumers.
“Weakness in U.S. sales growth at Wal-Mart, after a year of negative press and lawsuits, might be explained by
many things besides economics,” noted Hastings.
Wal-Mart domestic sales will account for about 6.3 percent of total retail sales in the U.S. this year, said
Hastings. He estimates that one-third of total U.S. sales stem from households where economic pressures are forcing reduced spending. “In this scenario, a bunch of loyal Wal-Mart shoppers are looking for deeper discounts than
Wal-Mart has been providing,” wrote Hastings. “There is only so much that you can do with the EDLP system
(everyday low prices) until shoppers step back and wait for LEDLP...lower everyday low prices. Wal-Mart, until late
November, was hesitant to do this.”
Hastings also noted that since Halloween, consumers have spent money on technology items such as computers, video game systems, digital cameras and flat-screen televisions. “There is a degree of spent up, spent out attitudes this holiday season after a year of purchasing new autos and upgrading home electronics — all of them bigticket expenditures.”
Wal-Mart shares closed the just-completed week up 1 percent at $52.55 from $52.02 last week.
The National Retail Federation remained upbeat in its outlook after a holiday survey found that the average consumer had completed 81.9 percent of their holiday shopping as of Dec. 19, leaving hope that the remaining 20
percent of holiday sales would occur during the week before Christmas.
— Meredith Derby and Ross Tucker
Morning
Ritual.
Over 80% of our retail readers agree that WWD is their first stop for
industry news. Make your message part of their daily routine.
в„ў
Source: WWD Subscriber Study 2003, Beta Research Inc.
14
WWD, MONDAY, DECEMBER 27, 2004
WWW.WWD.COM
Contemporary Art Rises in Japan
By Miles Socha and Koji Hirano
TOKYO — When French fashion designer Lucien PellatFinet visits Tokyo, his first impulse is not to hit the ubiquitous shops, but an out-of-the-way knot of contemporary art galleries.
“It’s very fresh,” he said of the photography, painting
and sculpture on display. “You cannot compare it to
anything else in the world. It’s becoming something
very important.”
And how. From art to film to architecture, Japan is
looming larger on the global cultural scene, with a
unique and cutting-edge voice.
“In film, there are wildly visionary directors and actors here,” said Interview editor in chief Ingrid Sischy,
who is preparing a Tokyo issue for spring, photographed
entirely by Karl Lagerfeld on location in December. “It’s
extremely in the vanguard. Look at how dead
Hollywood is. Everyone is looking here.”
Among the Japanese filmmakers making an impact
on the world stage are Takeshi Miike, Shunji Iwai and
Ryuhei Kitamura, whose genres span drama and fantasy.
Japan is also leading in architecture, thanks to the
likes of Kazuyo Sejima and Ryue Nishizawa, who designed the New Museum of Contemporary Art in New
York, Sischy said. It resembles an off-kilter stack of ice
bricks.
Asked to account for the ascendant cultural scene in
Japan, Sischy cited a greater freedom from the standard
— and sometimes hackneyed — pop references that can
curb creative expression.
“They might take Patti Smith and David Bowie, but
they’ll misquote them and mush it all together,” she
said. “We in the West are more burdened. We don’t mix
it up in the same way.”
Still, Sischy could not resist an analogy when describing one of the personalities she’s profiling in the Tokyo
issue of Interview: 21-year-old actor Ryuhei Matsuda,
whom she describes as “the James Dean of Japan.”
Lagerfeld, who before December had last visited Tokyo
about four years ago, said he detected a less slavish devotion to Western tastes and ideas. “They’re much more
proud of their own identity,” he observed, praising an aesthetic often centered on dolls, toys and fairy-tale imagery.
Pellat-Finet said he first took notice of Japan’s bubbling contemporary art scene when he stumbled across
a book in a Los Angeles store featuring the cartoonlike
work of Takashi Murakami. He bought a piece and commissioned a mushroom design he put on 1,000 of
his cashmere sweaters, long before Murakami
applied his colorful aesthetic to Louis
Vuitton’s monogram.
On a recent Saturday, dozens of trendy
young women took time out from shopping
to visit the Tomio Koyama and Taka Ishii
galleries here, which are tucked in a desolate industrial area not far from Ginza’s
pulsating sidewalks. On display in a basement annex were stunningly detailed,
dreamlike paintings by Masako Ando, depicting boys and girls with insects, birds and flowers.
Tsuyoshi Kawata, a trends commentator in
Japan, said the presence of young women in remote
galleries is a sign of how popular contemporary art has
become in Japan. He drew a parallel to “Ukiyoe” in
the Edo period in Japan, which is sometimes called
the first pop culture.
“It was drawings of actors and actresses at that time,
and popular among ordinary people on the street,” he
explained. “It gained a high reputation among art people in Japan after they were exported overseas.”
Kawata said contemporary art is experiencing a
surge at home, partly because of the international
recognition of artists like Murakami. “By the way,
Murakami is famous for the super-flat technique that
was also used for Ukiyoe many years ago. What a coincidence,” he added.
It has been a watershed year for Japanese culture,
with exports projected to exceed imports for the first
time. In 2003, export of culture-related items amounted
to 1.578 trillion yen, or $15.17 billion at current exchange, up 6.8 percent from 2002 and more than triple
what it was in 1991, according to statistics from the
Marubeni Research Institute.
Institute director Tsutomu Sugiura said animation —
known as anime in Japan — remains a key focus of activity, and a national passion.
“In designing a robot, for instance, Japanese people
don’t think it’s a simple machine, but something
that has a spirit within it,” Sugiura said. “Astro
Boy by Osamu Tezuka is one example.”
Tatsuya Noda, an editor and commentator covering Japan’s music scene, said it,
too, is on the rise, with Japanese songs
dominating the top 10.
“Partly this is because of the difference in language,” he said. “Most of the
Japanese don’t understand English lyrics.
But these days, there are more Japanese
musicians who successfully put the Japanese
lyrics on the Western rhythm, including rap
music, and those songs grab the Japanese young
people both by lyrics and rhythms.”
On the club scene, among the most popular figures
are Tomoyuki Tanaka of Fantastic Plastic Machine; and
Tokyo-born DJ Krush, famous for his dance-mix albums.
As for movies, the animated “Howl’s Moving Castle,”
by Hayao Miyazaki, is as popular as any Hollywood film,
edging out “The Incredibles” and the latest Harry
Potter adventure. Meanwhile, Miyazaki’s “Spirited
Away” remains the highest-grossing movie in Japan’s
history, hauling in a record 30 billion yen, or about $288
million at current exchange.
And even if Japanese fashion lags behind the renaissance in art and film — Sischy notes this is often the
case — young designer brands are flourishing and
churning out cool clothes as an alternative to the dominant foreign brands. Among the most exciting is Dress
Camp, one of about 60 names showcased during the recent Tokyo fashion week.
Arts
&
People
WWD, MONDAY, DECEMBER 27, 2004
15
COMPUTER ARTIST
Major Childrenswear Company seeks
talented and experienced Girls Artist
to work in Illustrator and Photoshop.
Must be able to draw flats, create prints,
embroideries. plaids, and appliques.
Min. 2 yrs experience in Girls Apparel.
Must see a strong portfolio that includes
boards. Good working conditions plus
benefits. Please fax resume attn: Julie
212-967-8108
Data Entry/Customer Service
Multi-Brand Apparel Co. seeks highly
motivated indiv. to handle data entry
and customer service. Must be experienced and computer literate.
Fax resume: 212-221-9287 Attn: Josh
244 Mulberry Street-Nolita
2,000 sq. ft with 22’ ceiling
Dumann Realty (212) 505-6300
www.dumann.com
Showrooms & Lofts
BWAY
7TH AVE
SIDE STREETS
Great ’New’ Office Space Avail
ADAMS & CO. 212-679-5500
Designer $100-$110K. Current exp. in junior
activewear collection. Tops & bottoms. Well
known branded Co. 1411 Bdway. Call 973-5649236 JARAL Fashion Agency.
Designer $110-$125K. Current exp. in
Missy sweaters & knits. Must hang
w/Searle, BEBE, Anthropology, etc.
Illustrator. Fashion forward vision.
From incept. to product approval. Call
973-564-9236 Jaral Fashion Agcy.
Designer $70-80K. Current exp. in girls 4-16 jr.
driven knits & woven sportswear requ’d 40%
denim. Mac, Illustrator, Photoshop. Import production packages from design inception.
Screen printing, embroidery graphic artwork.
Call 973-564-9236 Jaral Fashion Agcy.
Designer - handbags/backpacks
NORTH BERGEN, NJ
Industrial; Close to Lincoln Tunnel.
20,000 sq. ft. Drive in loading.
Currently mfg. User opportunity.
$950,000. M. Schnee @ 201-569-4274
OTB - "One Tuff Babe"
Seeks experienced Jr. hand bag/back
pack designer for jrs/yms accessories.
Mac/Photo shop/Illustrator. Strong
organizational skills/detailed orientated.
Excellent written/verbal skills. Minimum
5 yrs experience.
Please fax resume to:
212-629-7918
Attn: Jeff
DESIGNER / JR.
Great American Sweater Co
Seeks very trendy jr sweater designer
for domestic and import line. High energy, enthusiastic with 3 years Junior
sweater design experience. Salary +
benefits. Pls fax DK: 212-382-2549
Graphic Artist to $55K. Current exp. in
kidswear pref. Screen prints. Embroideries.
Appliques. Mac, Photoshop, Illus. Full
time perm only. Call 973-564-9236 Agcy.
PATTERN/SAMPLES
Reliable. High quality. Low cost. Fast
work. Small/ Lrg production 212-629-4808
PATTERNS, SAMPLES,
PRODUCTIONS
All lines, Any styles. Fine Fast Service.
Call Sherry 212-719-0622.
HUMAN RESOURCE MGR
Newly created position for established
growing company. Must have exp with
payroll, benefit admin, salary evaluation,
& employee relations. Salary BOE.
Fax resume to Laurie: 201-894-1186,
email: laurie@karlyn.com
KARLYN FASHION RECRUITERS
KARLYN FASHION RECRUITERS
WISHES YOU
A JOYFUL HOLIDAY SEASON
201-871-9800
PATTERNS, SAMPLES,
PRODUCTIONS
Full servcie shop to the trade.
fast work. 212-869-2699.
Fine
PTTNS/SMPLS/PROD
High qlty, reasonable price. Any design & fabric. Fast work. 212-714-2186
Licensing Director
Owners of Chris-Craft Boats & Indian
Motorcycle seek indiv. to lead brand
extension initiatives. Design, assortment, merchandising, license-based
sourcing exp. dwright@stellican.com.
RETAIL - 2 Positions
Madison Avenue Luxury Boutique is
looking to fill the following 2 positions:
• STORE MANAGER (Japanese a must)
• SALES ASSOCIATE (Part-Time)
Please fax resume to: (212) 308-5454
NO Phone Calls Please.
Samplemaker - F/T
Accts Receiv/Accts Payable to 32K.
Min 1 yr. exp req’d. Midtown co. Excel.
Word. Asst. at front desk. Good growth
oppty. Call 973-564-9236 Agcy.
Administrative Asst.
M & J Savitt
NYC based designer, jewelry company,
seeks enthusiastic Assistant to support
busy principals. Strong communication
and computer skills, Adobe a plus.
Please fax resume to: (201) 563-0134
ADMIN
SINCE 1967
W-I-N-S-T-O-N
APPAREL STAFFING
DESIGN * SALES * MERCH
ADMIN * TECH * PRODUCTION
(212) 557-5000
F:(212) 986-8437
Apparel Staffing, Ltd.
*PRODUCTION*DESIGN
*TECH DESIGN*GRAPHI DESIGN
*MERCHANDISING
see career listings @www.apparelstaffing.com
Or Fax Resume To: (212) 302-1161
(We offer a cash sign on bonus
for job acceptance)
Ladies’ Sportswear Co. seeks Sample
maker. Experience necessary. Call or Fax:
Tel: 212-239-6348 / Fax: 212-239-6380
Textile Technologist Manager $125-150k.
Exp in creative fabric devel. of innovative fabrics. Oversee sourcing of new
fabric. Costing, sourcing new product.
Suggest new textile formulations.
Synergize fabrication, coloration, construction etc. Call 973-564-9236 Agcy.
Vice President of Global Strategy, (NY)
Direct and oversee domestic and international business planning and strategy
for company’s clothing and accessories
divisions. Develop long term business
plans, profitability forecasts, divisional
budgets and seasonal sales plans. Master’s
degree in marketing, international
business or a related field of study and
three years of experience in business
planning and retail analysis in the fashion
apparel industry. Fax resume and salary
requirements to: The Donna Karan
Company, LLC attn. Sarah Cohen:
212-768-5937 or forward by email to:
dkcareeropportunities@dkintl.com.
All responses must include job code
SCRV2.
Account Manager - South Central
10-12 state high growth wholesale luxury designer jewelry.
Qualifications:
- Minimum 3 years wholesale experience.
- Active management, development, and travel.
- Superior communication and "people" skills
- Proven record of expanding customer base with high end
jewelry stores.
- EXTREMELY professional appearance and demeanor.
- STRONG computer skills, generating reports, & analyzing data.
Please email resume & salary history to: contact@gurhan.com
Account Executive/
Division Manager
A premier mfr. of high fashion hosiery
seeks dynamic, results driven indiv. for
women’s & children’s sales. Will oversee
& develop acct. relationships & direct
sales activities to meet co. targets & goals.
Req’s 4 yr. college degree with a min.
3-5 years sales exp. preferably in mfg./
retail. Must be computer literate with
excellent verbal & communication skills.
Please submit resume to:
Email: jobs@mtnhighinc.com
ANGELS
Sales Assistant
Fast-growing Jr jeanswear co needs
administrative help. Organized, hardworking, college grad should fax resumes
attn: Carl : 212-719-4074
SALESPERSON WANTED
Well established importer based in
NYC seeks individual w/ contacts to
mass merchants & discounters for newly formed slipper & flip-flop division.
Please fax resume to: 212-239-1448
M & J Savitt
Strong, passionate Sales Associates with
upscale jewelry accessory background.
Excellent communication skills, minimum
3 yrs. experience in category retail training.
Midtown NYC Office. Send resume to:
Fax: (201) 563-0134
ACCOUNT EXECUTIVE Global Lifestyle Brands
The Natori Company has an outstanding
National Sales Manager
oppty for an Account Exec. to join our
team based in NYC. The position will
be responsible for managing existing
& new dept stores business, Developing &
managing sales strategy, & planning &
monitoring sales The ideal candidate
should have 2+ years experience, have
strong communication & presentation
skills with the ability to travel & be
exp. in retail math. All inquires will be
kept confidential. For consideration please
mail resume & salary requirements to:
Sarah.rothwell@natori.com
Global leader in branded headwear seeks
highly motivated National Sales Manager
to oversee U.S. sales force for premium
outdoor brand. Qualified candidate
must have 8 yrs. experience in accessory
and/or apparel industries, preferably
headwear. The ideal candidate must
be organized & possess excellent follow
through ability. Domestic travel is required. We offer a competitive salary
with excellent benefits package.
Please email resume to:
adowdell@bollmanhats.com
SALESPERSON WANTED
Well established hosiery & intimate
apparel importer based in NYC,
seeks individual w/contacts to mass
merchants & discounters. Please fax
resume to: 212-239-1448
SALESPERSON
Junior cosmetic/bath mfr. seeks sales
person w/ 3 yrs. minimum experience
in Chain stores with strong following.
EXCELLENT OPPORTUNITY!!
Please fax resume to: (212) 564-3428
16
WWD, MONDAY, DECEMBER 27, 2004
WWW.WWD.COM
The
End
of
the
Affair?
eye
By Samantha Conti
LONDON — This time it’s an American who brought down a British government minister.
While the details may not be as seedy or full of political intrigue as
those of the Profumo scandal in the early Sixties, Kimberly Fortier’s now notorious
extramarital affair with former British cabinet minister David Blunkett has all the
makings of a prime-time soap.
The story, which broke during the August holiday and has fed the British tabloids
for months, initially centered on the socially and professionally ambitious Fortier,
publisher of the conservative political magazine, The Spectator, and wife of British
Vogue publishing director Stephen Quinn, and her lover Blunkett, the former home
secretary with whom she had been having an affair for three years. Blunkett resigned
in tears last week.
Over the past four months, it
has widened to include the
Quinns’ son William, whose paternity is now in question; that of
Fortier’s unborn child, which is
due in February; and a Filipino
nanny, whose visa request was
unfairly
fast-tracked
by
Blunkett’s office — the reason he
stepped down. The case is now
commonly referred to as
Nannygate.
To add to all the drama, another of Fortier’s former lovers
came forward last week and admitted to having an affair with
her while she was carrying on
with Blunkett.
Simon Hoggart, a Guardian
journalist and quiz-show host on
BBC Radio 4, said he had “a sexual relationship” with Fortier
that started before her marriage
to Quinn, but which became
“very infrequent indeed” afterwards. However, Hoggart, who is
married with two children, said Fortier walking with
there is no possibility that he husband Stephen Quinn.
could be the father of her son
William. Even more dramatic Kimberly Fortier
are rumblings in the press of a
third lover who has yet to come
forward with his story.
Earlier this month, Fortier
spent three weeks in a private
London hospital for stress-related
complications to her pregnancy.
Throughout the scandal, her husband has stood staunchly by her.
“I love her deeply, and it is returned,” Quinn told The Sunday
Times of London earlier this
month. He is also known to be a
model father to William. “I am
not obsessed with the biological
details. I think that fatherhood is
all about being there.”
Despite its made-for-tabloid
details and almost-daily dramas,
Fortier’s story is far more sad
than it is spectacular. It’s more
in the spirit of Emma Bovary
than Becky Sharp, whom the
British press compares Fortier
with constantly.
“She’s behaved very badly,
and she’s now trying everything
she can to save her marriage.
She wants to stay with Stephen,”
Andrew Roberts, a historian and
contributor to The Spectator,
said in a telephone interview.
Roberts, who used to vacation with Fortier and her ex-husband, Michael Fortier,
added: “In those days she seemed very sweet, charming and balanced. There was
never any hint of the cataclysms to come.”
That view is in marked contrast to many of those who have described her. Sunday
Times columnist India Knight called Fortier “shamelessness on legs,” adding, “It’s
not every day you come across somebody so dementedly and gracelessly determined
to be seen with the right person.”
Born in Los Angeles to an affluent family, the 44-year-old Fortier is a daughter of
Lugene Sanders, who played Babs Riley in the Fifties sitcom “The Life of Riley” and
Marvin Solomon, owner of a radiation detection equipment company. As reported
widely in the U.K. press —with more than a few snickers — she earned her pocket
money as a teenager working as none other than Snow White at Disneyland.
After graduating from Vassar, Fortier worked as an assistant for Helen Gurley
Brown at Cosmopolitan and wrote for magazines including Woman’s Day before marrying the American banker Michael Fortier in the late Eighties. The couple moved to
London, where Fortier has lived since.
Before joining The Spectator as publisher in the late Nineties, Fortier worked for
CondГ© Nast U.K., in the communications office. Nicholas Coleridge, managing direcВ®
tor of CondГ© Nast U.K. (which, like WWD, is a unit of Advance Publications Inc.), introduced Fortier and Quinn, who were seen around London together for several
years afterward. The couple finally married in 2001, after both had divorced their
previous spouses. Quinn was overjoyed at the union, spending months planning the
wedding and their honeymoon.
But only a few months after the wedding, Fortier began her three-year affair with
Blunkett. This behavior clearly did not come as a surprise to Fortier’s ex-husband.
“Even when she is lying in her grave she’ll be thinking if there is anybody more interesting she could have lying next to her,” Michael Fortier has been quoted as saying
in the British press.
As the oft-repeated tale of her first meeting with Blunkett goes, Fortier told the
cabinet minister, who has been blind since birth, that she was tall and blonde. (She’s
a brunette of average height). She also reportedly wondered aloud what it was like to
sleep with a blind man.
Two years ago, Fortier’s and
Quinn’s first son William was
born — Quinn had had a vasectomy reversed — and Fortier is
now pregnant with her second
child. It’s still unclear who the fathers of the children are.
Blunkett believes William is his
son, and has private DNA tests to
prove it, although these are not
binding in the courts. He is pressing ahead with a paternity suit —
which the Quinns are fighting —
and which is currently working
its way through the courts.
While Fortier’s ambitions
may have worked against her in
her personal life, they’ve clearly served her well professionally. She’s said by many to mix a
giggly, little-girl charm with a
pushy, in-your-face attitude and
thundering self-confidence to
get what she wants. In that regard, she is credited with helping to boost The Spectator’s cirFormer British
culation, making the title profcabinet minister
itable and transforming it into a
David Blunkett.
sexy brand name.
Ironically, she joined The
Spectator when it was owned by
another older, powerful man:
Conrad Black, later granted a
peerage and since caught up in a
scandal of his own, albeit a financial one. Fortier regularly volunteered that “Conrad” agreed
with the direction in which she
was taking the magazine.
“It went from being a totally
political magazine to a lifestyle
one during her tenure,” said
Roberts. “And she was the one
responsible for getting in the
new advertisers.”
Susan Farmer, consumer p.r.
director of the Diamond
Trading Co., the marketing arm
of De Beers, said Fortier was
the one who sold her on The
Spectator.
“She’s very amusing and has
enormous charm and enthusiasm,” said Farmer. “Everything
we’ve ever done with the magazine has been successful.” Last
year, the DTC sponsored the
175th anniversary issue of The
Spectator, and it regularly takes
out full-page ads in the title.
What of the future?
Last week, an official investigation into the visa case concluded that Blunkett’s office had indeed helped in speeding through Fortier’s nanny’s application. However,
investigators could not reach a decision on whether Blunkett had actually ordered it.
Blunkett, who has a reputation for being stubborn and strong-willed and who
wanted Fortier to leave Quinn and settle down with him, is still reeling from the end
of the affair.
“I misunderstood what we had. I misunderstood that someone could do this, not
just to me but to a little one as well,” he told the British press. The former government minister, who has three adult sons by his ex-wife, said he was always prepared
for the consequences of a paternity battle.
“If I was ever going to see my youngest son again, if I was ever going to hold him as I did
as a baby in my arms, there were going to be consequences. In time people will understand what I have been through, what I am prepared to go through, what I was prepared to
sacrifice along with my three older sons for that little boy,” he said when he resigned.
Stay tuned. Fortier is said to have kept meticulous, detailed notes of her affair
with Blunkett, and the U.K. press is already speculating about the possibility of a
major book deal.
The papers also suspect that, when the dust settles, Fortier may return to
California with her children, provided the paternity case turns out in her favor.

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