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 Hervè 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 protégé, 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 Classified Advertisements ..................................................................14-15 To e-mail reporters and editors at WWD, the address is [email protected], using the individual’s name. WOMEN’S WEAR DAILY IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLICATIONS, INC. COPYRIGHT ©2004 FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. VOLUME 188, NO. 133. WWD (ISSN # 0149-5380) is published daily except Saturdays, Sundays and holidays, with one additional issue in January, May, June and November; two additional issues in February, April, September, October and December; and three additional issues in March and August, by Fairchild Publications, Inc., a subsidiary of Advance Publications, Inc. PRINCIPAL OFFICE: 7 West 34th Street, New York, NY 10001. Shared Services provided by Advance Magazine Publishers Inc.: S.I. Newhouse, Jr., Chairman; Steven T. Florio, Vice Chairman; Charles H. Townsend, C.O.O.; John W. 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WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR LOSS, DAMAGE, OR ANY OTHER INJURY TO UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED TO DO SO BY WWD IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE ACCOMPANIED BY A SELF-ADDRESSED OVERNIGHT-DELIVERY RETURN ENVELOPE, POSTAGE PREPAID. In Brief ● 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. ● 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. ● 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. ● 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 Estée 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 Financière 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 Hermès 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. WWDMediaWorldwide® 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 ▲ 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.” ▲ 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 ▲ 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 Estée 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. ™ 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: [email protected] 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. [email protected] 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: [email protected] 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: [email protected] 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: [email protected] 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: [email protected] 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: [email protected] 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 Condé Nast U.K., in the communications office. Nicholas Coleridge, managing direc® tor of Condé 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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