WWD FRIDAY Time In A Bottle

Pa
:
ide 20
Ins ges 9-
Me
dia
All
Women’s Wear Daily • The Retailers’ Daily Newspaper • October 24, 2003 • $2.00
-St
ars
KIDMAN STARS AT CHANEL/2 DESIGN AWARDS/24
WWDFRIDAY
Beauty
Time In
A Bottle
NEW YORK — L’Instant, Guerlain’s first
new scent in three years, is set to launch
in the U.S. in March. The fragrance will
debut in just under 500 upscale specialty
store doors here, building to a maximum
of 700 over the next several years.
Industry sources estimate that the
fragrance could do $15 million at retail
in its first year on counter in the U.S.
For more, see page 4.
PHOTO BY GEORGE CHINSEE; STYLED BY BRYN KENNY
A Saks Surprise: Christina Johnson Resigns as SFA’s CEO
By Lisa Lockwood
NEW YORK — In a surprising move
Thursday, Christina Johnson
resigned as president and chief
executive officer of Saks Fifth
Avenue Enterprises.
Johnson had been in the role since
February 2000 and was responsible
for stores, catalog, Internet and
outlets. She couldn’t be reached for
comment, but the company said she
stepped down to devote more time
to family matters.
R. Brad Martin, chairman and
ceo of Saks Inc., parent company of
Saks Fifth Avenue, said in an
interview that Johnson’s successor
See Christina, Page 22
2
WWD, FRIDAY, OCTOBER 24, 2003
Nicole Kidman: Chanel’s New Face
By Miles Socha
PARIS — Nicole Kidman has
landed another starring role: as
the new face of Chanel No.5.
The Oscar-winning actress
has signed a three-year agreement with the French house and
will shoot a commercial for the
fragrance in late December in
Sydney, reuniting with fellow
Australian and “Moulin Rouge”
director Baz Luhrmann, who
also is integral to the deal.
(For more on Chanel see
page 5.)
Chanel artistic director
Jacques Helleu and Arie Kopelman, president and chief operating officer of Chanel’s U.S. subsidiary, confirmed the news exclusively to WWD in separate interviews this week. The Kidman
spots, including a print campaign,
will be unveiled in fall 2004.
In a statement, to be released
Nicole Kidman,
photographed by
Karl Lagerfeld.
to worldwide media today, Chanel
said it chose Kidman because she
“represents a unique standard of
elegance and embodies the spirit
and modernity of Chanel.”
The news brings celebrity advertising to a new zenith — and is
a first for Chanel, which historically has featured up-and-coming
talents in its campaigns. Ali
MacGraw and Candice Bergen
were famously featured long before they became household
names. Even Catherine Deneuve,
the face of No.5 from 1968 to
1976, was scarcely known outside
of France when Helleu selected
her for the role.
But a campaign featuring Kidman is bound to have a blockbuster effect on Chanel, already
on a roll with its ready-to-wear, accessories and beauty businesses.
“I can’t imagine, on the subject of advertising, anything
Continued on page 7
Tchibo Gets Beiersdorf Stake
By Melissa Drier
BERLIN — Thursday was Independence Day for Beiersdorf.
Ending more than two years
of takeover rumors and stalled
negotiations, the Munich-based
insurance group Allianz has
agreed to sell a 40 percent stake
in Beiersdorf to a consortium
led by the German coffee and retail chain Tchibo. “Beiersdorf
will remain an independent
company,” Tchibo said in a release Thursday.
The purchase price for the
Allianz package is around $5.2
billion, converted from 4.4 billion euros at current exchange,
or an average price of $153.40
(130 euros) a share. That is a
premium of $26.25 over the average Beiersdorf share price of
the last 12 months.
Tchibo, which already holds
30.3 percent of Beiersdorf, will
acquire a further 19.6 percent,
for a total stake of 49.9 percent.
The other members of the
consortium are HGV (Hamburger
Gesellschaft für Vermögens-und
Beteiligungsverwaltung), which
will acquire 10 percent of Beiersdorf, and the TROMA Pensions
and Widows’ Fund of Beiersdorf
AG, which will get 3 percent, and
there are plans to offer the remaining 7.4 percent to Beiersdorf
AG as part of a share buy-back
program. Allianz, which has been
a Beiersdorf shareholder for over
60 years, is retaining 3.6 percent.
The transaction is subject to the
approval of antitrust authorities
and will be implemented in
stages, both Tchibo and Allianz
noted.
“We have found a solution that
offers tremendous advantages to
all concerned,” Dieter Ammer,
chairman of Tchibo Holding AG,
commented. “Beiersdorf AG can
now expand its strong position on
the market over the long term with
a clear shareholder structure.”
“We are relieved and happy,”
said Peter Nebel, the spokesman
for Beiersdorf in Hamburg. “It
was our desired result.”
Tchibo’s existing 30 percent
holding in Beiersdorf exempts it
from German takeover law,
which would have required any
other party to make a bid for all
Beiersdorf shares. Procter &
Gamble, for one, was waiting in
the wings and had been widely
expected to outbid Tchibo, but
the coffee company’s blocking 30
percent was perceived as a major
obstacle to P&G’s plans to integrate Beiersdorf. Moreover, fears
that P&G would dismantle the
maker of Nivea, leading to a loss
of German jobs and tax revenues,
mobilized public opinion — and
even the city of Hamburg — to actively support the Tchibo consortium’s interests.
Nevertheless, according to
Allianz chief financial officer
Paul Achleitner, “Tchibo simply
made the more attractive offer.”
As for its remaining 3.6 percent
interest, he said “Maintaining a
fungible shareholding of less
than 4 percent in a first-class
company is attractive for us and
fits well into our investment
strategy. Ultimately, over the long
run, Beiersdorf with its majority
shareholder Tchibo can continue
to use the attractive opportunities for growth in the interest of
all shareholders.”
The agreement dashed any
shareholder hopes of cashing in
on a prolonged bidding war. It
also forced the Beiersdorf stock
down 7.7 percent, to close in
Frankfurt Thursday at $117.41,
or 99.50 euros.
WWDFRIDAY
Beauty
BEAUTY
2
4
5
8
Nicole Kidman has landed another major starring role: as the new face of
Chanel No.5.
With L’Instant de Guerlain, the house’s first new scent in three years,
Guerlain is laying out a plan to revitalize its fragrance business in the U.S.
Chanel is gearing up for the first half of 2004 with launches planned across
its color, treatment and fragrance categories.
Procter & Gamble is out to prove it’s not such a shampoo snob after all and
will relaunch several brands it acquired from Clairol as midtier and value items.
GENERAL
1
2
2
24
26
26
Christina Johnson has resigned as president and ceo of Saks Fifth Avenue
Enterprises, but will stay on until the end of the year.
3
Casa caliente…something for the man who has everything…London
aglitter…Carolina’s honors…Getting ready for the Savannah Film Festival.
Munich-based insurer Allianz has agreed to sell a 40 percent stake in
Beiersdorf to a consortium led by German coffee and retail chain Tchibo.
U.S. officials arrested about 300 workers at 61 Wal-Marts on immigrationrelated charges as part of an investigation into contractor cleaning crews.
DESIGN: The Nasher Sculpture Center opens in Dallas; The National Design
Awards; Residential architect Russell Versaci’s latest book; Drawing Board.
Lower sales and profits in its apparel operations helped reduce Sara Lee
Corp.’s first-quarter net income by more than 25 percent.
VF Corp. Thursday said third-quarter income declined by 2.3 percent —
better than expected, but softer than profits of one year ago.
SUZY
Media All-Stars, a special report, appears on pages 9-20.
Classified Advertisements........................................................................27
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 ©2003
FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A.
VOLUME 186, NO. 78. WOMEN’S WEAR DAILY (ISSN 0149-5380) is published daily (except Saturdays, Sundays and holidays
with one additional issue every month except July and two additional issues in April and September and three in 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; Charles H. Townsend,
C.O.O.; John W. Bellando, Executive Vice-President and C.F.O.; Jill Bright, Executive Vice-President_Human Resources; John
Buese, Executive Vice-President_ Chief Information Officer; David Orlin, Senior Vice-President_Strategic Sourcing; Robert
Bennis, Senior Vice-President_Real Estate; David B. Chemidlin, Senior Vice-President_General Manager, Advance Magazine
Group Shared Services Center. Periodicals postage paid at New York, NY and at additional mailing offices. Canada Post
Publications Mail Agreement No. 40032712. Canadian Goods and Services Tax Registration No. 88654-9096-RM0001.
Canada post return undeliverable Canadian addresses to: P.O. Box 1632, Station A, Windsor, ON N9A7C9.
POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008.
FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WOMEN’S WEAR
DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008; Call 800-289-0273; or visit www.subnow.com/wd . Four weeks is
required for change of address. Please give both new and old address as printed on most recent label. First copy of new
subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production
correspondence to WOMEN’S WEAR DAILY, 7 West 34th Street, New York, NY 10001. For permissions and reprint requests,
please call 212-221-9595 or fax requests to 212-221-9195. Visit us online: www.wwd.com. To subscribe to other Fairchild
magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our subscriber list available to carefully
screened companies that offer products and services that we believe would interest our readers. If you do not want to receive
these offers and/or information, please advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273.
WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR LOSS, DAMAGE, OR ANY OTHER INJURY TO UNSOLICITED
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.
Feds Raid 61 Wal-Mart Stores In Brief
By Katherine Bowers
and Kristi Ellis
BOSTON — The raid Thursday
morning that rounded up 300plus illegal immigrant workers
at Wal-Mart stores is another
blow to the retailer’s campaign
to project a softer, more peoplefocused image.
Immigration and customs enforcement agents arrested cleaning workers in the wee hours at
61 Wal-Mart stores in 21 states,
ranging geographically from
Texas to New Hampshire.
Although the workers were
not employed by Wal-Mart but by
third-party subcontractors, the
retailer might be on the hook if
federal prosecutors find evidence Wal-Mart executives were
aware the subcontractors rou-
tinely hired illegal workers.
Agents searched at least one office in the retailer’s Bentonville,
Ark., headquarters perhaps looking for such a link, a source close
to the situation confirmed.
Wal-Mart is trying to get a
handle on the scope and details
of the investigation, a spokeswoman said.
“We require each of our contractors to use only legal workers,” she said, reading from a
prepared statement. “We do not
know if the current investigation involves one or multiple
outside contractors.”
The retailer uses more than
100 third-party contractors to
perform cleaning services in
more than 700 stores around the
country.
It’s at least the second time
Wal-Mart has run into problems
with undocumented workers
cleaning its stores. Thursday’s
actions stem from an earlier investigation instigated by the
Pennsylvania Attorney General’s
office in 1998, which also focused
on subcontracted crews, said a
spokesman with the Immigration
and Customs Enforcement division of the U.S. Department of
Homeland Security.
“This is stemming from a significant amount of investigative
work,” he said. “We’re not just
taking a net and rounding people up.”
ICE regional officials confirmed there were nine arrests
in the Albany area and 20 arrests in New England. Stores in
California, which suffers most
Continued on page 21
● NEW SOURCING SOURCE: Two former Tarrant executives
have formed a private label development firm, B&Y Global
Sourcing, based in Los Angeles. Eddy Yuen, a former Tarrant
chief executive officer and most recently president of its Hong
Kong division, and Norbert Baroukh, formerly president of
Tarrant’s private label business, resigned Sept. 26. Yuen will
manage B&Y’s Hong Kong office, staffed with six employees
overseeing fabric purchasing and pre-production, while
Baroukh will oversee the six-person U.S. office of assistant designers, designers and import-export coordinators. Baroukh said
the company will source goods globally from eight factories in
Southeast Asia and the Mideast. The company will focus on casual sportswear, targeting the private label needs of national
chains and mass merchants. Sales are expected to hit $25 million in the first year.
● BCBG’S NEW PLAN: BCBG Max Azria Group has signed a licensing deal with Phillips-Van Heusen Corp. to manufacture and
distribute men’s dress shirts and ties for the BCBG Max Azria
label. The new classifications will bow for Father’s Day and
PVH will develop spring, Father’s Day, fall and holiday collections. Retail prices are expected to range from $40 to $80, with
distribution aimed at department and specialty stores.
WWD, FRIDAY, OCTOBER 24, 2003
Natalie y Gael ● Buying the Cow ● Midnight Train to Georgia
Suzy
Earnest.” Among those all thrilled over the
fireworks extravaganza and dancing to the
Gold Singers until breakfast and beyond
were Prince Pierre and Sylvia D’Aremberg;
Arriana’s stepmother, Princess Ira von
Furstenberg, in Chanel; Arriana’s brother,
Prince Hubertus zu Hohenlohe; Daphne
Guinness; the fashion maven, Isabella
Blow; the Brazilian plastic surgeon, Yvo
Pintanguy; Tamara Beckwith and on and on
and on. The groom gave the bride a
blinding diamond necklace for a wedding
present — blinding, maybe, but she could
see it all right — and whisked her off on
their honeymoon in a black Bentley. “Only
Pyrros knows where we’re going,”
Beannie laughed as she glided off with pink
and white rose petals fluttering all around
her. It’s the only way, really.
●
Just when it seems the brilliant dancers
of American Ballet Theatre cannot possibly
dazzle anymore than they already do, they
do. The company’s opening-night fall gala
at City Center was a triumph with the ever
magical stars, Paloma Herrara, Gillian
Murphy, Jose Manuel Carreño, Irina
Dvorovenko, Maxim Beloserkovsky and
Angel Corella, and the corps de ballet
performing on wings for the delectation of
400 fans. The chairmen of the evening
were Muffie Potter Aston and Dr. Sherrell
Aston, Julia and David Koch and Chris and
Grace Meigher. The evening was
underwritten by Akris, the German fashion
giant with a new store on Fifth Avenue.
After the show, the guests went on to
the Grand Ballroom of the Plaza for supper.
You would have loved the all-done-up
crowd. Nan Kempner was there, all in
white. Wendy Vanderbilt wore one of her
collection of beautiful jackets and one of her
collection of beautiful necklaces. Susan
Fales-Hill, always one of the most
beautifully turned out women in New York,
wore a vintage black skirt embroidered in
silver. And Blaine Trump wore a black vava-voom vintage number fringed at the
hem and showing off quite a lot of the
famous Trump legs. Grace Meigher
showed off her tan all over in bronzy brown
chiffon. Also celebrating were ABT’s
famous artistic Kevin McKenzie and his
wife, Martine van Hamel; Barbie Bancroft;
Jill and Walter Fischer (he is the chairman
of Rolex); Ellen and Ian Graham; the Lyden
Carolina Herrera
Susan Fales-Hill
twins, Dr. David and Peter of ABT; Peg and
Lew Rainieri, the big man at ABT; Dr. Aaron
Boardman, have just bought a house on a golf course. Arriana Hill; Peter Bacanovic; Alex Hitz; Nancy Zeckendorf;
Fernanda Kellogg and Kirk Henckels; George McNeely,
will keep her horses, Baby and Gatsby, at nearby Wellington.
The reason for Arriana’s London trip was the wedding of
and Judy and Sam Peabody — darling Judy was ABT’s
2003 woman of the year.
Elizabeth Esteve, the lovely young Brazilian heiress known
●
to her friends as “Beannie,” to Pyrros Vardinoyannis, a scion
Her clients come to her looking for good taste, style and
of the Greek shipping family, at the Greek Orthodox
discretion, and her good works are legion. No wonder
Cathedral of Aghia Sophia. Arriana, one of Beannie’s
Carolina Herrera is the guest of honor at the South Bronx
witnesses, was her roommate in Paris during their school
Educational Foundation’s annual benefit at the Roosevelt
years, so you know she just had to be there.
Hotel on Nov. 4. The Foundation is particularly excited to
Among those filling the pews in couture day dresses
celebrate the 25th anniversary of the Rosedale Achievement
and spectacular hats were Arriana’s mother, Princess
Center for Women, which has a long history of working with
Jackie zu Hohenlohe, who recently moved to Marbella;
Sally Aga Khan, who was divorced from the Aga Khan in
young women who face economic and social obstacles.
1994 after 25 years of marriage; Barbara de Portago,
Carolina will be front and center in all her glory.
●
dressed by Givenchy; Wendy Stark of the Hollywood and
Savannah’s fifth annual Film Festival starts tomorrow
Beverly Hills Starks; American designer Alexandra Lind,
and the crowds from Hollywood, New York and London
and Barbara Leary in a blue tweed suit by Chanel.
headed there include director Arthur Penn, who will get a
Arriana, wearing a cocoa-colored Valentino suit and a
lifetime achievement award; Army Archerd, celebrating his
chocolate-colored hat with a little feather shooting out of
the brim, called Beannie’s dress “quite possibly the
50th year as a columnist at Daily Variety; Alec Baldwin,
prettiest wedding dress in the history of wedding
whose Las Vegas-based film, “The Cooler,” will be
dresses.” Spoken like a true ex-roommate. This off-thescreened; Thora Birch; Paul Morrissey, who directed Andy
shoulder Snow White confection was nipped in to show off Warhol’s movies; George Segal; Debra Winger; Rosanna
Arquette, and Sony Classics co-presidents Michael Barker
the bride’s tiny waist and had a perfectly fitted little jacket
with an Elizabethan collar. Her lace veil and seemingly
and Tom Bernard, who have three new movies in the
endless train and the gown were all designed by Julien
festival. The festivities will open with Miramax’s new
movie, “The Barbarian Invasions,” and close with Fox
Macdonald for Givenchy.
That night, the Queen’s cousin, Lady Elizabeth Anson,
Searchlight’s new Jim Sheridan movie, “In America.”
London’s top party planner, organized a sumptuous seated
The pièce de résistance at the festival each year is the
dinner and ball for 500 bright young things and their
Halloween night candlelit dinner in Bonaventure
parents at Wycombe Park, the 18th-century Palladian
Cemetery, where a lot of the action in “Midnight in the
mansion seen in the movie, “The Importance of Being
Garden of Good and Evil” takes place.
By Aileen Mehle
Natalie Portman and Gael García Bernal, the
star of “Y Tu Mamá También,” have moved
in together in Natalie’s downtown digs.
® Mexican-born GGB is muy caliente, a
coverboy (Interview) who is being gobbled
up by filmmakers for one movie after another. Natalie has
been out of the country lately and Bernal goes back to
Mexico from time to time, but for the moment, that’s
what’s going on with the two cuties.
●
What to give a boyfriend who has everything including
the richest girl in the world: Athena Roussel, who turned 18
last January and who now controls the vast $7 billion
Onassis shipping empire, bought her Brazilian boyfriend,
Alvaro Alfonso de Miranda Neto, a cow at a São Paulo cattle
auction. Before you laugh too hard, you have to know that
the animal has a championship pedigree and costs $350,000.
Its value will multiply many times as it becomes a part of the
breeding stock on Alvaro’s cattle ranch. That is if it lives up
to its name, Esperança, which is Portuguese for “hope.”
●
The London social season continues to glitter, filled as it
is with the little niceties that make England so very very
English. Roger Moore checked into the Ritz and was
greeted by the staff as Mr. Moore, but when he left last
week, they called him Sir Roger because during his stay
there, he was knighted by the Queen. Sir Roger also
celebrated his 76th birthday during his visit with his family,
including his wife, Kiki, and son, Geoffrey, who owns the
trendy West End restaurant, Hush. Also passing through
the Ritz’s revolving doors recently were King Constantine
of Greece and his sister, Queen Sofia of Spain, who booked
a table for 10 for lunch with their families. At different
tables in the Ritz restaurant were such as Princess Michael
of Kent, who will be in New York next week to lecture at
the Metropolitan Museum, Lady Thatcher and a host of
others, if not just like them, close enough.
●
Beautiful Princess Arriana von Hohenlohe flew to London
from Palm Beach where she and her husband, Dixon
eye
Blaine
Trump
3
4
WWD, FRIDAY, OCTOBER 24, 2003
The Beauty Report
Guerlain’s Instant Gratification Myers Named
NEW YORK — In just an Instant,
Guerlain hopes to change its fragrance fortunes in the U.S.
With L’Instant de Guerlain, the
house’s first new scent in three
years, Guerlain is laying out a plan
to revitalize its fragrance business in
the U.S — as well as create a blockbuster globally.
“We wanted to show a new face
for Guerlain,” said Renato Semerari, worldwide chief executive officer of Guerlain. “Our key challenge
when we started working on this fragrance was to develop a new flagship for Guerlain, both in the U.S.
and internationally. We are aiming
for another classic.”
In fact, Semerari’s first challenge
to his team — upon joining Guerlain
in 2002 — was to reestablish fragrance
as the key pillar of the company’s
business. Fragrance, while always important to the brand, had been somewhat overshadowed of late by other
Renato Semerari
segments, including a strong color cosmetics business globally, he noted.
While L’Instant de Guerlain began
launching in Europe this fall,
Semerari was determined to have a
clearer field for its launch in the U.S.
“There are so many launches this fall
in the U.S. that we feared it would get lost in a flood of newness,” said Semerari. “We wanted to have the visibility to
reestablish the brand, and we wanted a time where we
would have more visibility at counter. Launching in the U.S.
in March made more sense for that strategy.”
The new fragrance will follow a goal, initiated a year
ago, for the brand: launching in narrow, specialty store distribution in the U.S. Since last year, the brand has cut its
beauty distribution in half — from more than 200 doors to
about 100 — and plans to follow a similar strategy with the
new scent, although it will be in more doors than the
brand’s color cosmetics and skin care.
“We want to get more of a high-end profile in terms of
image in the U.S.,” said Semerari. “The brand has never
been mainstream, and part of its DNA is to have upscale
distribution. In Paris, Guerlain is sold only in our boutiques. [In the U.S.] we need to get stronger in the point of
sales where this customer is shopping.”
In terms of doors for scent, Camille McDonald, president
and chief executive officer of Guerlain and Givenchy in the
U.S., noted that will translate to just under 500 specialty
store doors at the U.S. launch this spring, with an “absolute
maximum” of 600 to 700 doors within a few years. Retailers
Head of Origins
Camille McDonald
We want to get more of a high-end profile in
“terms
of image in the U.S.
”
— Renato Semerari, Guerlain
will include Saks Fif th Avenue, Neiman Marcus,
Nordstrom, Bergdorf Goodman and Marshall Fields.
Sylvaine Delacourte, director of evaluation and development for Guerlain, worked with Maurice Roucel of Symrise
to develop the juice, which is said to introduce a new olfactory category: Crystalline Amber. “We wanted a very feminine fragrance that was luminous and fresh at the same
time,” said Delacourte, noting that the fragrance uses magnolia as a signature note, a first for Guerlain. “We chose to
use bergamot and mandarin, bright and sunny notes, in the
top note. A light jasmine, mixed with a dominant magnolia
note define the heart of the fragrance, and the base notes
include the ‘Guerlainade,’ the accord used by all Guerlain
fragrances, which includes vanilla, benzoin and tonka
bean. It has been modernized for this fragrance with synthetic musk, to anchor the top notes and the heart.”
The juice, Delacourte explained, follows a “dual pyramid” presentation. “Unlike a classically structured fragrance, L’Instant de Guerlain does not develop from one
note to the next. Instead, all of the notes build on each
other — each note remains even while the heart and base
are developing.”
The “typically French” name is “an invitation to savor the
moment and appreciate time,” said Vincent Brun,
manager of marketing for fragrance for Guerlain. “The
concept is a moment when your senses and feelings
are fully awake, and you are truly alive.” The fragrance’s target audience is women 25 to 45 years old,
with 30- to 35-year-olds being the core target.
The fragrance’s bottle — both the body and the
cap — are made entirely of glass. The glass on the
bottle is tinged with amethyst, while the clear glass
top is engraved with the fragrance’s name. Outer
packaging is white, with a logo — a circular Guerlain
Paris motif in purple with the scent’s name centered
in the middle of the circle — that is an updated version of one that was created in-house in 1917.
The range includes eau de parfum sprays in two
sizes, 1.7 oz. for $62 and 2.7 oz. for $82; a 0.25-oz.
parfum, $90; a limited-edition parfum packaged in
crystal, 0.25 oz. for $500; a 6.8-oz. body crème, $80; a
6.8-oz. body lotion, $47, and a 6.8-oz. bath and shower gel, $42.
Although none of the executives would comment
on projected sales, industry sources estimated that
the scent would do at least $15 million in the U.S. in
its first year on counter and that about $3 million
would be spent on print advertising in the U.S. in
that time period.
While the media plan is still being finalized, it
will include advertising in upscale lifestyle magazines, likely beginning as single and double pages in
April, noted Beth Ann Catalano, senior vice president of sales for Guerlain in the U.S.
The ad, featuring model Ingrid Parerwijck and
shot by Mert Alas and Marcus Piggott, marks the first
time Guerlain has used a blonde in its advertising.
Also included in the campaign will be scented pieces
in store catalogs, as well as vials-on-cards, deluxe fragrance miniatures and deluxe mini body crèmes, for a
total of 20 million scented impressions, Catalano said.
— Julie Naughton
NEW YORK — The Estée Lauder Cos., parent company of Origins, has named Daria Myers senior
vice president and general manager of Origins.
Myers, who will take on her new duties Dec. 1, will
report to Philip Shearer, group president of the Estée
Lauder Cos. Her appointment follows a series of recent executive shifts that began in late September,
when Pamela Baxter, a 21-year company veteran who
most recently was president of specialty groups worldwide for Estée Lauder Cos., left Lauder to go to LVMH
Moët Hennessy Louis Vuitton as president of its U.S.
beauty group. Baxter was replaced in her Lauder role
— which involves overseeing Prescriptives, La Mer, Jo
Malone and Kate Spade Beauty — by Lynne Greene,
who had been global president of Origins.
Myers was most recently responsible for special
projects within the company, and is a 26-year veteran
of the Estée Lauder Cos. She joined the company as
an assistant for the Aramis division in 1977. From
there, she worked up to executive director of marketing for that division, where she was responsible for
the launches of such lines as Tuscany and Lab Series
for Men. In 1989, Myers became a founding member of the team that created Origins, working on the
brand for 10 years and rising to senior vice president
of global marketing. In 1999, Myers took on the role
of senior vice president of global marketing for Aveda,
a post she held for two years before moving over to
special projects for the parent company.
Daria Myers
“Coming back to Origins is like coming home —
although there are a few more kids in the family
now,” said Myers, referring to the brand’s growth internally and externally over the past several years.
“While Origins has been in my blood every day, I have
been away from it for four and a half years, so it’s a
bit premature to discuss where I want to take it.
Since I’ve been away, it has grown in its distribution
— both in door counts domestically and internationally — and in its focus. I look forward to taking a
fresh assessment of the brand. And, there won’t be a
learning curve since I’ve been on the brand before.”
On her previous stint with Origins, Myers developed the brand’s department store business, created the format for Origins’ retail stores and
helped to develop the brand’s e-commerce site.
“Daria is an Origins founder who helped create
the essence of this brand,” said William P. Lauder,
chief operating officer of the Estée Lauder Cos., in
a statement. Lauder was the brand’s founding
president and worked closely with Myers at
Origins. “I have enormous respect for her ability to
both innovate and execute on a global basis. I’m
delighted she will lead the Origins team.”
“It’s great to have Daria back at Origins,” added
Shearer. “I’m thrilled to have someone who knows the
brand so well — she has a real connection to the roots
of the brand. Her work with other brands here has also
given her a good perspective, which will allow her to
take a fresh look at Origins. It’s too early to say about
strategy, but we’ve been very successful with the A
Perfect World skin care franchise, and we have a great
opportunity to use it as an anchor for growth.”
— J.N.
WWD, FRIDAY, OCTOBER 24, 2003
Chanel Hopes Launches Keep Growth On A Roll
NEW YORK — Chanel is gearing up for the first half of
2004 with launches planned across its color, treatment
and fragrance categories.
“We’ve been able to weather the storm well,” said
Jean Hoehn Zimmerman, executive vice president of
marketing and sales for fragrance and beauté for
Chanel. “In this half, we’ve seen double-digit growth
[in beauty] globally, and we’ve risen in rank in nearly
every country. Given the softness of the market, we’re
very happy about that and have a number of new initiatives to keep the momentum going.”
“We’ll be aggressive in promoting all of our beauty
categories,” added Arie Kopelman, president and chief
operating officer of Chanel. “We will not be resting on
any laurels. We’re on a roll, and we’re determined to
accelerate the pace in 2004.”
Hoehn Zimmerman noted that the most recent NPD
BeautyTrends numbers show that year-to-date, the total
fragrance market is down 2.7
percent, with the women’s fraSeveral of Chanel’s new
grance market down 1.6 percent.
skin care introductions.
By contrast, she said, Chanel’s
total fragrance market is up 12.2
percent, with women’s up 16.9
percent. In color cosmetics, she
said, NPD’s third-quarter numbers show the category up 6.2
percent, while Chanel’s numbers are up 7.3 percent, in skin
care for the same period, the
market is up 8 percent and
Chanel’s business in the category is up 10.6 percent.
“Given that one of our strategic missions is to increase skin
care business, we’re very happy
with those numbers,” said
Hoehn Zimmerman.
That category will be bolstered with six introductions by May 2004. Three, coming in December, are in
the Rectifiance Intense line: Anti-Age Retexturizing
Fluid for oily skin, and Anti-Age Retexturizing Cream
and Night Cream, both for normal to dry skin. All include the brand’s Micro-Protein Complex, a blend of
green pea extract and firming pentapeptides intended
to boost collagen production, as well as essence of
neroli, said to help improve skin firmness and elasticity. The fluid and the day cream each retail for $57.50
for 1.7 ounces; the night cream is $67.50 for 1.7 ounces.
Eclat Original Maximum Radiance Cream, coming in
March, is a gel cream that is intended to increase the
luminosity of skin, said Annette Falso, vice president of
new product marketing and training, Chanel fragrance
and beauté. It features the proprietary Pulsator
Complex, made up of mushroom and brown seaweed
extracts, intended to help boost circulation; sugar derivatives for exfoliation, and extract of cassia angustifolia to hydrate the skin. It retails for $55 for 1.7 ounces.
Eye Tonic, a dark circle corrector with a rollerball
applicator, launches in April. The product includes
lipotripeptide, designed to diminish the appearance of
dark circles; mandarin and horse chestnut to boost circulation in the eye area, and extract of licorice to stimulate the eye area. It retails for $50 for 0.3 ounces.
The brand’s No.1 Collection, available only in specialty store doors, will gain Concentre No.1, a 14-day,
individual dose intensive treatment regimen designed
to significantly reduce the appearance of wrinkles. It
retails for $275 and launches in May.
To further boost the skin care category, Falso noted,
the brand plans an intensive sampling campaign. More
than 78 million samples are planned across all Chanel
beauty categories, with a skin care emphasis, beginning in January. Extensive sampling will also be offered in the fragrance and foundation categories, noted
Hoehn Zimmerman, as will increased advertising
across all beauty categories — including a new ad for
The limited-edition
Satin de Chanel.
the Coco Mademoiselle scent featuring a blonde Kate
Moss. Sources estimate that at least $12 million will be
spent on advertising in the first half of 2004.
In color, the brand is paying strong attention to the
lip category, said Elizabeth Mankin, vice president of
beauté marketing for Chanel. The brand will launch
Aqualumiere Sheer Colour Lipshine, an ultrasheer formulation available in 15 shades, in May. The intensely
moisturizing formula includes shea butter and Vitamin
B and E and sucrose derivatives, as well as SPF 15.
Each retails for $23.
In addition, building on the success of its Glossimer
lip gloss franchise, Chanel will launch Glossimer Tints,
four very sheer glosses, in April. Each contains vitamins C and E and jojoba for protection and moisturization, retailing for $24.50 apiece.
As well, in addition to the brand’s spring color story,
which features peaches, coppers and pinks, the brand
will release three limited-edition products in the first
half. Satin de Chanel, an allover highlighting powder
available in peach and pink with a top-stitched embossed
YSL Adds To Skin Care Lineup
NEW YORK — Having tapped the fountain of youth by using the power of mushrooms with its Temps Majeur line in 2001,
YSL Beauté is headed back to the well
this fall.
Two new treatment products — Temps
Majeur Yeux, formulated for the delicate
skin on eyelids, and Temps Majeur
Masque, an intensive moisturizing treatment — are based on ganoderma lucidum, a mushroom that has been used in
Chinese medicine since ancient times.
“By acting on the production of cytokines, which play a vital role in the
transmission of inter-cellular information, ganoderma lucidum stimulates an
ongoing exchange between the cells,” said
a spokeswoman for YSL Beauté. “A true
‘liaison,’ it triggers the skin’s rejuvenating
and repair process by activating powerful
skin remodeling. To make the most of this
benefit, we have added two products and
have adapted their formulation to specific skin needs, both in terms of delicate
application areas and as a response to
states of intense fatigue.”
Ganoderma lucidum’s efficacy is said
to come from sugar polymers called glucanes, which are said to stimulate the
The new Temps
Majeur products.
design, was inspired by Chanel’s ready-to-wear collection,
said Mankin. It will be available in January and will retail
for $50. Joues Contraste Duo, a blush compact with two
shades — copper and pink — intended for highlighting
and contouring, will retail for $42.50 and also launches in
January. In April, Chanel will release Poudre A Cils, a volumizing lash powder designed to be used with mascara
to enhance lashes. It will retail for $40.
Chanel will also release Ecriture de Chanel Automatic
Liquid Eyeliner, a new eyeliner pen, in April. It will be
available in four colors — black, brown, navy and copper
— that will be permanent additions to the line, as well as
a limited-edition silver version. Each retails for $30.
Chanel will also boost its fragrance category with
several launches, noted Laurie Palma, senior vice
president of fragrance and Internet marketing, with
upwards of 77 million scented pieces in the first half
planned to help get the word out to consumers. Allure
Homme, launched in 1998, will
add a flanker, Allure Homme
Sport. “This scent is fresher,
more sensual and more casual
than its older brother,” noted
Palma. Launching in June, the
fragrance includes four facets
— one including Calabrian and
Sicilian orange and Tunisian
neroli, one including tonka
bean, musk and amber, one of
cedar and vetiver and one of
black pepper — and was formulated by Jacques Polge of
Chanel. Two eau de toilette
sprays will be available: 1.7
ounces for $42.50 and 3.4
ounces for $57.50.
The brand will also bring
back a classic from the Twenties, Gardenia, on a limited-edition basis beginning in
January. The fragrance, created by Coco Chanel and
Ernest Beaux in 1925, will have a two-month exclusive
at Saks Fifth Avenue and will move into the brand’s
other fragrance doors in March.
Coco Mademoiselle will get three new stockkeeping
units — a spray oil, $42 for 4.2 ounces; a deodorant
spray, $26 for 3.4 ounces, and a scented hair mist, $30
for 1.2 ounces. All launch in April.
Gift sets will abound this spring as well, with two
for Chance and one apiece for Allure for Women,
Allure Homme Sport, Coco Mademoiselle, Chanel
No.5. and Gardenia.
Although none of the executives would comment on
projected sales, industry sources estimated that the new
products would add at least $20 million at retail to
Chanel’s beauty sales in the first half of next year.
Chanel’s color cosmetics and skin care products are available in about 800 department and specialty store doors,
while its fragrances are available in about 3,000 doors.
— Julie Naughton
quality and intensity of the chemical
messages in the skin’s cells. In these
products, they are teamed with YSL’s
proprietary Cyto-Regenerating Complex,
which contains oligo-peptides and almond proteins.
In the eye cream, these ingredients
are accented with escine, an extract from
horse chestnut seeds that is said to help
reduce the appearance of puffiness and
dark circles, as well as with light-reflecting microparticles to minimize the appearance of imperfections. The mask —
intended to be used once or twice a week
— combines the mushroom extract with
soya phospholipids for intense hydration.
Both new products also include ginseng
extract, intended to intensify the benefits
of the other ingredients.
Temps Majeur Yeux retails for $100
for 0.5 oz., while Temps Majeur Masque
retails for $130 for 1.6 oz. The products,
which are beginning to roll out now, will
be available in the brand’s U.S. treatment
and beauté doors, currently about 189 department and specialty store doors.
While the company wouldn’t comment
on projected sales for the two new products, industry sources estimated that together they would do about $1 million at
retail by yearend 2003.
Sephora, Nocibe,
Marionnaud in
Paris Price War
— J.N.
— Brid Costello
PARIS — A promotions war has
reerupted among major French
beauty retailers.
Sephora fired the first shot
Oct. 17, offering customers a 20
percent discount when they buy
a 50-ml., or larger, bottle of fragrance, plus an ancillary product from the same brand. The
following day, rivals Marionnaud
and Nocibe retaliated. At Marionnaud, customers are offered a
20 percent discount on fragrances, while select Nocibe
stores give a 20 percent break on
one item when customers buy
any two skin care, makeup or
fragrance products. The promotions are slated to end Nov. 3.
Paris perfumeries waged a
similar battle last year leading
up to the holiday selling period.
5
WWD, FRIDAY, OCTOBER 24, 2003
The Beauty Report
Iman Struts Into Mass Aisles
NEW YORK — As she presides over her
Seventh Avenue offices on an overcast
October morning, where at least a dozen
attractive young women are busy at their
jobs, Iman, in a crisp white blouse and
pinstripe slacks, is the picture of the
business-minded entrepreneur.
For nearly 10 years now, the longtime
model has devoted the bulk of her time to
creating beauty products for women with a
range of skin tones, hoping to fill what she
saw as a gaping hole in the marketplace.
She has also managed to fit in the occasional photo shoot or public appearance
for modeling contracts with firms such as
DeBeers and H&M, the fashion retailer.
As a vendor, Iman is no stranger to the
vagaries of retail; she learned that flexibility is crucial. Her Iman collection — the
first of two beauty brands she’s designed
— was simultaneously launched on QVC
and in J.C. Penney stores in 1994, where it
has enjoyed a steady business ever since.
But Penney’s opted out of cosmetics last
year, retaining only select Iman items —
namely, makeup kits and skin care items.
(The other line, I-Iman, is carried at
Sephora and other specialty retailers.)
Possessing a relentless desire to deliver
products to women she feels are underserved, the Somalian beauty quickly started staking out new retail territory for her
Iman brand. And she has turned to where
the traffic is — discounters and drugstores.
With products directed at a multicultural audience, Iman contends her brand
can bring some direction to the fragmented ethnic marketplace. “There is no
major leadership in the market and this
is a brand, not just products,” said Iman,
adding, “It is not a new brand and it is
successful at what it does.”
What it does is emphasize foundation
and skin care formulas that are suitable
for a range of skin tones and skin types.
At present foundations and powder
account for 50 to 60 percent of Iman
sales. Iman recalled that when she began
modeling in 1975, the makeup artist Way
Bandy would “spend a half hour mixing
foundation to get just the right match for
me,” she said. “Other makeup artists
would ask me if I would bring my foundation, so I relied on myself to learn.”
“I am in a way an authority,” noted
Iman. The trick with darker skin tones,
she pointed out, is not just about getting
the right shade, but also getting the
undertone correct.
“When thinking about going into the
mass market, we saw that everybody has
lipsticks and blushes; our focus is on foundation and we have four types,” she said.
She also said that a good foundation is useless if skin is not cared for properly.
“There was no skin care for women of
color,” said Iman, who remarked that specific conditions include pigmentation
problems, dry skin and acne. The Iman
skin care products were designed to work
with the color items. “An investment in
your skin is an investment in yourself,” she
said, advising, “The skin you take care of
in your 20s is what you inherit in your 50s.”
The concept of the line, she said, “is
about skin of color. It is not about ethnicity.” In-store materials will feature a group
of models with a range of skin tones; the
products are designed to meet the needs
of
African, Asian, Hispanic and
Caucasian skin types.
“Most companies that claim
they have foundations for
women of color were
included as afterthoughts,”
said
Iman. There were
several distinct
efforts throughout the years
including Shades of You by Maybelline and Revlon’s Polished Ambers, although both
collections
have
long been discontinued. Most general market brands have extended
shade ranges to accommodate a broader
spectrum of women.
In early trials at some Meijer stores, the
Iman brand has already charted successful results. Starting with spring resets in
February, the brand will be added to select
doors by several mass retailers including
Wal-Mart and Duane Reade. Walgreens
will offer some items on its Web site beginning this month. Most retailers are taking
on 3-foot sections containing some 107
stockkeeping units including foundation,
powders, bronzers, blush, eye shadow, lip
color, mascara, eye pencils and facial
cleansers, toners and moisturizers. There
is also an area called “Hot Picks” to present new or seasonal items. Additionally,
there is instruction on matching foundation and powder shades and other tips for
selecting skin care products.
Iman ushered in higher price points
for mass as well, with tags ranging from
$8.99 to $14.99 for foundation. Desiree
IMAN PHOTO BY DAVID TURNER; PRODUCTS BY GEORGE CHINSEE
6
Inset: Iman beside an in-store visual for the
brand. Top: The three-foot display is full of
product information; part of the Iman
cosmetics line.
Malahoo, vice president, marketing, and
general manager for Impala Inc., said
that in order to prepare the collection for
presentation in mass stores, packaging
was modified to give boxes a see-through
window. Also, shade cards were added to
help shoppers find a correct match, and
clear plastic caps were added inside lipstick cases to protect product. The display was designed to be self-explanatory,
with clear product descriptions, so no
beauty advisor is needed.
The mass rollout strategy takes a
measured approach. Markets are being
targeted chain by chain based on
regional leadership. For instance,
Duane Reade is eyed for the New York
market and Meijer in Michigan. In all,
some 200 doors are planned for this
year.
“The main concern for me,” said
Iman, “is that success can be a doubleedged sword. We want to make sure we
have enough product and we want to
make sure we are in the right doors, so
we are doing a slow rollout.”
To support the launch at Wal-Mart,
makeup artist Eric Spearman will provide in-store consultations and makeovers. A promotional video featuring Iman
and other models has been created that
will play during events. Because the line
is not national there is no advertising
planned. Sources predict Iman could hit
retail sales of $2 million to $3 million the
first year.
Several retailers have begun to more
closely target market populations. WalMart is noted for its finely tuned demographic information and for tailoring
each store’s product mix to its neighborhood. Kmart has begun efforts to speak to
the Hispanic market with a range of
house brand products including the
Thalia label.
In beauty, a Kmart spokesman said
several brands — including Maybelline,
Cover Girl, Revlon and L’Oréal — target
Hispanics through in-store signing and
specific shade selections. Some brands
are also developing bilingual signing to
reach out to Hispanic consumers. She
noted that as different ethnic populations grow in the U.S., major brands will
need to reach out to these consumers to
not only maintain, but grow, a future
share in the marketplace.
According to the 2000 U.S. Census, of
women between age 18 and 64, AfricanAmericans represent 12.7 percent of the
population at 11.1 million; Hispanics
represent 11.5 percent with 10.1 million,
and Asian-Americans represent 4.1 percent with 3.6 million.
And the spending power of these
groups is expected to increase, according
to the Selig Center for Economic Growth.
Over the next five years, AfricanAmerican spending is expected to jump
34 percent, Hispanic buying power will
skyrocket 55.4 percent and AsianAmerican spending is estimated to
increase 5 percent.
— Laura Klepacki, with
contributions from Kristin Finn
New Shiseido Line Puts Focus on Men
PARIS — As part of a move to ratchet up its European business,
Shiseido will begin launching its first global skin care line for
men there starting in November.
“Especially in the northern part of Europe over the past few
years, men’s skin care has been one of the fastest-growing sectors,” explained Shuichi Tanaka, senior vice president of Shiseido
Europe SA. “There is demand from the market for expertise.”
The Shiseido Men line, which the company bills as a simple, highly functional treatment, has a core target of 30- to 45year-old men. Its products are divided into basic care, which
includes cleansing and moisturizing, and “special care,” for targeted skin care solutions.
In the lineup is a 4.6-ounce Cleansing Foam for $23.60 at
current exchange rates, or 20 euros; a 5-ounce Hydrating Lotion
for $31.80, or 27 euros; a 3.3-ounce Moisturizing Emulsion for
$37.70, or 32 euros; a 1.8-ounce Total Revitalizer Age-Defense
Anti-Fatigue Cream for $70.70, or 60 euros; a 4.6-ounce Deep
Cleansing Scrub for $23.60, or 20 euros; a 1-ounce Anti-Shine
Refresher Matifying Gel for $37.70, or 32 euros, and a 0.53ounce Eye Soother Anti-Dark Circles Anti-Puffiness Gel for
$47.16, or 40 euros.
The new products’ formulas include Shiseido’s Damage
Defense Complex, said to alleviate dry and rough skin. The items
also purportedly give a refreshing and moist aftereffect. The
products contain a scent with a floral green base note enhanced
with Modified Valerian that the firm’s research shows reduces
men’s stress levels — key, Shiseido said, for healing skin.
Shiseido Men will be introduced in parts of Europe, including
Italy, Germany, Belgium, Luxembourg, Austria, Holland, Russia
and Switzerland, plus the Emirates, in November. In early 2004,
Shiseido Men will be launched elsewhere in Europe and by yearend it’s expected to be in 70 countries, including some in Asia.
The introduction will include a sampling campaign, print
advertising — including gatefolds, single and double pages —
leaflets inviting people to learn about the products, plus in-store
videos and quizzes.
Although Shiseido executives refused to discuss numbers,
industry sources estimate Shiseido Men will ring up $2.36 million
(2 million euros) in Italy through the end of 2004 and the same
amount in Germany, Austria and Belgium combined in the period.
Shiseido’s European business is showing resilience in a difficult climate due to phenomena including weak economies, as in
Germany, and effects of SARS. For year-end, it expects to post
sales up 2 to 3 percent compared with 2002, said Tanaka. “For
the second half, we’re seeing [some light],” he said, due in part to
some strong product introductions. “It seems to be getting better.”
Some 25 percent of Shiseido’s overall sales are rung up outside of Japan. And of that quarter, Europe generates about 33
percent. In volume terms, the firm’s strongest European markets
are Italy, Germany and France, with the U.K. and Spain vying for
The Shiseido
Men line.
fourth place, said Tanaka.
In terms of product volume in Europe, 53 percent of the
brand’s sales come from skin care, 25 percent from makeup and
the remainder from fragrance and sun care, he said. Best-selling
items in the region include Body Creator and Future Solution total
revitalizing cream.
Looking ahead, Shiseido sees strong potential in countries
such as Russia.
“Travel retail could be huge,” added Tanaka of the channel
that is still nascent for Shiseido. The company has been present in it for only two years and rings up just about 5 percent of
its overall business there.
— Jennifer Weil
WWD, FRIDAY, OCTOBER 24, 2003
Kohl’s Opens Another New Jersey Locale
FLEMINGTON, N.J. — Kohl’s is on an expansion track
with new stores, such as the one that opened here to a
waiting crowd on October 9. Thirteen stores also bowed
on that day in Arizona, a brand new market for Kohl’s.
But the Menomonee Falls, Wis.-based retailer has not
quickened its pace as far as adding more beauty within
the past year. In fact, this store has about the same
footage devoted to cosmetics as a location opened last
October in Hillsborough, N.J. — some 15 miles away.
For many beauty manufacturers, Kohl’s represents the
Holy Grail — a chain ripe for expansion into more beauty
products, especially color cosmetics. Without much growth
in cosmetics usage, manufacturers are looking for new
doors such as Kohl’s, which is adding 85 stores this year
and expects to add another 95 in 2004. And, although many
firms claim to have presented concepts to Kohl’s, the retailer maintains a small beauty department. Although larger than its
presentations of just two years ago,
Kohl’s appears to have put a lid on
further expansion into cosmetics —
at least for now.
Perhaps Kohl’s has long known
what most mass merchants are just finding out — today’s
shoppers crave value. Kohl’s beauty departments are full
of blockbuster beauty sets from manufacturers such as
Burlington and Markwins International. There are gift
sets created to appeal to teens, those marketed to younger
girls and even compilations suited to mature women. A
shopper can find color cosmetics kits, bath and fragrances at Kohl’s, although she’d be hard pressed to buy
skin care.
For the grand opening, Markwins sets were discounted from $10 to $6 and $45 to $27. Whimsical slipper gift sets featuring slippers, bath gel and body
sprays were stacked up and priced at $11.
Gaining footage at Kohl’s is a holistic beauty line
complete with antistress options called Earth
Therapeutics.
Footage to some products such as designer fragrances, Neutrogena toiletries and even The Healing
Garden have been pruned in the new store versus last
year’s model. However, the presentation has been elevated a notch,
thanks to frosted glass fixtures
being used in jewelry and beauty.
The location of beauty remains
front and center, near the entrances and close to jewelr y.
Although the area is strictly self-serve, customers frequently query the associates in jewelry for help.
The product selection is either geared toward impulse buys, such as pumpkins filled with beauty products, or planned purchases, such as a designer fragrance. Kohl’s also stresses its house label called
BodySource and has expanded it into spa items.
BodySource is presented on eight displays in the beauty area. Kohl’s offers fragrances at 15 percent off suggested retail. Among its tight selection is Calvin Klein’s
Obsession, priced at $45 for a 1.7-oz. bottle.
Many experts think the company is taking a paced
approach to beauty and will lock up a deal with a
major beauty firm to push it further into cosmetics.
Kohl’s would not comment on those reports.
Kohl’s is gaining the attention of New Jersey shoppers,
especially those who don’t want to take the time to frequent the nearby Bridgewater Mall. At the grand opening,
Kohl’s employees greeted shoppers at the entrance and
Critical Mass
By Faye Brookman
issued discounts. Donna Harabedian, a local resident,
said she was glad to have this type of store so close to her
home, especially on a site which had been vacant for
years after the Flemington Mall closed its doors.
Many of the sites Kohl’s occupies in New Jersey represent areas in need of mass-market retailing.
Eventually the power center here will house a
Michael’s, a Borders, a Hallmark, a Panera and a
Verizon wireless store.
Despite its new store growth, Kohl’s is experiencing
only modest gains in mature stores. The company said
its September sales at stores opened at least a year
rose 5.5 percent. The firm is still targeting a 3 percent
same-store sales increase for the third quarter, and it
will meet that if October same-store sales are unchanged.
Kohl’s is currently the nation’s 37th largest retailer,
according to Chain Store Age. The chain has been able
to entice well-known brands to its stores, such as
Levi’s, Dockers, Reebok, Skechers, Mudd, Calphalon,
OshKosh and Nike.
●
Kidman Signs On for Chanel No.5
Continued from page 2
being as exciting as this,” Kopelman enthused. “When Jacques Helleu saw
[Kidman] in ‘Moulin Rouge,’ he thought
she would be perfect for Chanel No.5. All
of us at Chanel love Nicole Kidman. We
recognize how special she is, how talented
she is and how lovely she is as a person.
“Chanel No.5 stands for elegance, class
and taste. How perfect is Nicole Kidman
to represent that? It was a no-brainer.”
Still, finalizing the deal took more than
18 months. The principal roadblock was
the heavy working schedules of Kidman,
who stars in three major films this year,
and Luhrmann, who is consumed with
pre-production for his forthcoming epic
about Alexander the Great, starring
Kidman and Leonardo DiCaprio.
Luhrmann, 41, first burst onto the movie
scene in 1992 with the quirky and camp
“Strictly Ballroom,” and then hit the big
leagues with his 1996 hit, “Romeo + Juliet,”
a kinetic version of the Shakespearean
classic for the MTV generation.
He joins a long list of major photographers and filmmakers who have immortalized No.5 in advertising campaigns, including Ridley Scott, Richard Avedon, Bettina
Rheims, Gérard Corbiau, Jean-Paul Goude
and Luc Besson. The director was traveling
Thursday and could not be reached for
comment, but the Chanel ads are believed
to be his first attempt at advertising.
Based in New York, Kopelman was a
key figure in negotiations with the two
film power players, liaising with their
numerous handlers and agents.
Kopelman stressed Luhrmann was considered a key collaborator from day one.
In fact, at his first meeting with Kidman
in September 2002 in Los Angeles, Helleu
said the actress announced to him that she
herself had a concept for a Chanel commercial involving Luhrmann.
Kidman could not be reached for comment, but Chanel officials related that the
actress also told them repeatedly Chanel
was the only fashion brand to which she
could imagine lending her support.
“It is very flattering for us,” Helleu
said Thursday at his minimalist office at
Chanel headquarters here. A film enthusiast who sees a minimum of a dozen
movies a week, Helleu said he has
watched “Moulin Rouge” — or at least
his favorite scenes — at least 40 times.
A longtime admirer of Kidman’s acting ability, poise and beauty, Helleu said
that 2001 film exemplified her magnetic
and powerful sensuality.
“She is extremely seductive, dangerously so,” Helleu said. “That ability to convey seduction is very rare, even among the
greatest actresses. I believed she could
bring something special to Chanel.”
The storyline for the commercial, to be
conceived, directed and produced by
Luhrmann, has yet to be defined. Helleu
is slated to meet with the filmmaker in
Paris next week to go over initial storyboards. The concept will be presented to
Chanel’s board of directors for its
approval next month.
Helleu, who will travel to Australia for
the first time for the shoot, assured the
commercial would be different from
“Moulin Rouge” and certainly set in contemporary times. “And without Ewan
McGregor,” he added with a chuckle,
referring to Kidman’s “Moulin Rouge” costar. He could not say who else might
appear in the commercial with Kidman.
However, a key member of the creative
team will be Luhrmann’s wife and partner, the Academy Award-winning set and
costume designer, Catherine Martin.
During the five-day shoot, slated to wrap
up Christmas Eve, Luhrmann and his team
will be charged with creating several 30- to
●
●
Could any existing drug chain digest Eckerd should
J.C. Penney decide a sale is the best decision? Antitrust
concerns seem to crop up among most potential suitors.
Penney’s wants to have a plan by the end of the year
about what to do regarding the 2,700-store drug chain.
Any chain looking for expertise in beauty would hit the
jackpot with Eckerd. The store is noted as having some
of the best beauty merchants in the business. Also,
Eckerd has been one of only a handful of retailers to
succeed with private label cosmetics. Most chains that
would be a good fit either don’t have the money, or operate too many stores that overlap Eckerd. The asking
price is estimated at $4 billion to $5 billion. Although
CVS is mentioned as a suitor, the drug chain getting attention for its interest is Canadian power, the Jean
Coutu Group. Jean Coutu already owns Brooks, a 330store chain making a splash in the beauty world with
upscale skin care departments. The clout of Eckerd
could easily help Brooks realize a vision of a Europeanstyle pharmacy with premium beauty and skin care.
The iconic Chanel No.5 bottle.
60-second variations for television and cinema advertising. Also, two photographers,
to be determined by Helleu, will lens an
accompanying print campaign.
One thing is certain: Kidman will wear
Chanel in the campaign, and Helleu said
the house is fortunate that the actress and
couturier Karl Lagerfeld are already
great friends. Lagerfeld has photographed Kidman for various magazines,
and Kidman has created several extraordinary fashion moments wearing Chanel,
perhaps most memorably at the Academy
Awards in 2002, when she wore a ruffled
pink couture gown.
Under the deal, Kidman is not obliged
to wear Chanel. “This is purely a No.5 contract,” Kopelman stressed. “Her personal
life is hers and she can wear what she
wants. I would certainly hope, and be
excited, of course, whenever she does
choose to wear Chanel, but that’s her call.”
Closely held Chanel, owned by the
Wertheimer family, declined to discuss
financial details of the contract, nor say
how much money would be put behind
the Kidman campaign over the next
three years.
Pressed for details, Kopelman said
Chanel’s advertising budget would likely be up “in excess of 10 percent” in
2004, and that budgets for the fragrance
and beauty division would be “massaged” to ensure maximum exposure of
the new No.5 spots.
“The idea is to put together a coordinated effort worldwide,” he said. “I
think it will have a significant effect on
the No.5 business.”
Chanel’s beauty business is estimated
to pull in more than $1.6 billion a year,
and No.5, created in 1921, is ranked the
number one-selling perfume worldwide,
with estimated retail sales of $100 million annually. It was ranked fifth in the
U.S. market at the end of 2002.
As for an estimate on No.5’s ad budget, some sources say 5 to 8 percent of
sales is typical of luxury brands, thus putting the figure at $5 million to $8 million.
Asked about the health of the No.5 business, Kopelman reiterated its top status
worldwide and characterized the Kidman
campaign as adding fuel to what is already
substantial momentum for Chanel, given
the recent success of fragrance launches
like Chance, a scent aimed at young
women, and limited-edition makeup products like its denim-inspired eye shadow,
Jeans de Chanel. “We’re firing on all cylinders here,” he said. “We’re all very bullish.”
Helleu, too, predicted the campaign
would have a positive impact on all
products bearing the Chanel name. He
noted, for example, that the current No.5
campaign, featuring the iconic bottle in
Andy Warhol colors, has already boosted
Chanel’s total business in Japan, where
fragrance is not a popular product.
Meanwhile, Helleu said the Kidman
campaign would underline that No.5 is a
modern and “mythic” perfume of seduction. “It’s not a classic,” he said, raising a
finger of objection. “I detest that word.”
7
WWD, FRIDAY, OCTOBER 24, 2003
The HBA Report
P&G’s New Path: Middle of the Road
By Andrea Nagel
NEW YORK — Procter & Gamble is out to prove it’s
not such a shampoo snob after all.
Going against the mass hair care industry trend for
premium-priced, professional hair care goods, P&G
plans to make 2004 the year of the $3 shampoo by relaunching several of the brands it acquired from
Clairol in May 2001 as midtier and value items. New
promotions, packaging and formulations are expected
for Aussie and Daily Renewal 5X in February, as well
as for Daily Defense, which now sells for 99 cents. Price
points, in other words, will now range from 99 cents for
Daily Defense to $7 for Physique styling products, with
four out of P&G’s nine hair care brands
priced in the $3 or below range.
The move toward lower-priced hair
care marks the first time P&G has ever
expanded its brand portfolio outside the
premium and super premium categories.
“We are facing very strong competition,” said P&G’s new vice president
and general manager for North America
hair care, Sonsoles Gonzalez. “And if
customers are going to be switching
brands, they might as well be switching
to brands inside our portfolio. This is a
move to really focus on the consumer as
our key way to win in the marketplace.”
As a testament to the low loyalty
rate in hair care, Gonzalez added, “You
probably have seven shampoo containers in your shower, right?”
P&G’s portfolio, no matter how the
brands are priced, dominates the hair
care market. Gonzalez said P&G’s
brands generate 30 percent of the category’s U.S. dollar share, or $1.5 billion, with its Pantene
brand generating nearly $750 million in U.S. sales. P&G’s
dollar share was closer to 22 percent prior to the acquisition of Clairol, Gonzalez said.
But while Clairol gave P&G a bigger share of the
market, the deal also handed the consumer giant a host
of brands Gonzalez saw as under supported for their
price category, as well as some that were in dire need of
attention. To help with the repositioning effort, several
changes took place at P&G’s corporate marketing level.
Three marketing directors report into Gonzalez.
There’s Maile Carnegie, marketing director for Herbal
Essences, who joined the division several months ago
from a marketing role within P&G’s North American business organization; Scott Rogers, who is marketing director
for Pantene and Infusium, and Diana Shaheen, who is
marketing director for Head & Shoulders, Physique,
Aussie, Pert Plus, Daily Renewal 5X and Daily Defense.
None are from the Clairol hair care regime, but
P&G said some Clairol employees have been integrated across its hair care business.
Perhaps one of the most anticipated changes to result from P&G’s repositioning efforts are the adjustments in the Aussie line, a brand Gonzalez describes
as “one of those hidden jewels we got from Clairol.”
Once a darling of high school girls everywhere,
Aussie’s scent alone has more brand equity than many
other hair care lines on the market. But its premiumpriced positioning was considered off the mark,
Gonzalez said, adding that she didn’t want “too many
P&G brands competing against one another.” So in
October 2002, Aussie’s price was dropped from $3.49
to $2.99 and in 2003 a plan was created to revive it.
anymore. Is it St. Ives? Salon Selectives? Most retailers
have discontinued all but a couple of midtier brands,”
said one retailer.
Subsequently, the move to embrace lower-priced
brands appears to some industry watchers as mere
necessity rather than a calculated strategy.
“Their positioning sounds more like value than
strategic marketing. What do the brands stand for?
Who are they talking to?” asked one industry watcher
who believes P&G’s price rollbacks occurred too far in
advance to their 2004 marketing plans.
Another industry watcher claimed the price rollbacks in 2002 kept P&G from fully supporting the
brands in 2003 and that’s why the brunt of their marketing support is appearing next year.
Daily Renewal
In response, P&G’s Shaheen said, “We restarted marwill include
keting support for Aussie and Daily Defense this past
styling products summer. We’ll extend this support across all three
next year.
brands in 2004, using strategies appropriate to each brand’s positioning,
consumer target and price segment.”
Then there are dollar market
share figures to consider. With most
of the industry well aware of P&G’s
short fuse for low-performing
brands, just how long will some of
their smaller brands live? For the
fiscal year ended June 30, P&G said
Aussie owns a 2.3 percent dollar
share, Renewal has a 0.4 percent
dollar share and Daily Defense has
a 0.3 percent dollar share.
Gonzalez said that brands such
as Renewal are not vulnerable to
being discontinued. “We are clear
Aussie is packaged in shockingly
on their role and what they should
bright purple containers.
do. We are playing off a certain
level of brand existence. That is more positive than
creating a new brand. They have good equity, which
has been forgotten over time.”
Gonzalez pointed out that changes in the marketplace also helped her decide where and how to position its hair care brands.
“The number of brands that are now playing in the
market, Fructis, and Unilever expanding Dove into shampoo, we did our homework. We saw that Daily Defense
would provide and win share in the value segment.”
Industry concern, however, is not limited to P&G’s
lower-priced brands. Apparently over the past two
years, P&G has cut back its list price of Pantene to retailers, causing many in turn to slash prices to remain
competitive. And, as the largest hair care brand in the
U.S., retailers are feeling the effects.
“If you sell something that was once $5 for $4, and
the retailer is getting 25 percent of that, the retailer
Daily Defense aims to communicate a value message.
has to take a markdown, and on top of that has to sell
As the first brand P&G touched after the acquisition, 1.5 times more to make the same gross profit dollars,”
Renewal went from a $4 to a $2 brand overnight. said the industry source.
P&G, however, spends hundreds of millions of dollars
“Renewal had really low [ad] support from Clairol. It didn’t really have the justification to be in the premium cate- on promotions that drive customers into stores. And
gory,” Gonzalez said. Renewal is gearing up for more though the hair care category from 1996 to 2002 grew,
shampoo variants, as well as a six-item styling line in 2004. in 2003 the category hit a wall and fell a little more
Lastly, Daily Defense will unveil new packaging than 1 percent to $1.28 billion, according to IRI, exand several new sku’s to communicate its value mes- cluding Wal-Mart.
“While P&G’s strategy is that they can set a price,
sage to consumers.
As many in the industry know, the value category is advertise and people will come in and pay, the conalready saturated, with Suave, White Rain and V05 sumer isn’t buying any more than she was last year,”
vying for retail shelf space. And some doubt whether the source said.
Perhaps women are still finishing off their seven
the midtier range is worth investing in.
“Nobody really knows what the middle business is bottles of shampoo.
Beginning in February, Aussie will offer more
styling products, and offer new packaging in “shockingly vibrant purple packages.” Aussie will also receive its first complete TV campaign in four years.
Improved formulas will also be used, but Aussie’s star
product, Scrunch Sprayer Instant Freeze, “we are not
touching,” said Shaheen. Several sku’s will be added
to fatten up the line, including 3 Minute Miracle
Deeeeep, for intense conditioning; Tizz No Frizz Gel,
and Knot Forgotten Detangler. In-store promotions include Aussie Switcharoo, to encourage shoppers to
mix and match among the line’s 35 different sku’s to
create a customized hair care regimen.
Daily Renewal 5X is also receiving attention in 2004.
▲
8
Kao, Kanebo to Form New Cosmetics Firm
NEW YORK — Tokyo neighbors Kanebo Ltd. and Kao
Corp. have agreed to join forces in a bid to eventually
become Japan’s top cosmetics company.
As part of a joint venture that’s slated to be fully
complete by March 2007, Kanebo will spin off its cosmetics divisions and related subsidiaries, forming a
new company by next March, according to a joint announcement by the companies. Concurrently, Kao
plans to take a 49 percent equity stake in that new
company. Kao then plans to spin off its cosmetics
businesses and merge them with the new company by
the 2007 target date.
“With this consolidation, [we] have set the objec-
tive of becoming the leading cosmetics company in
Japan,” the firms stated. A definitive agreement for
the venture could be reached by the end of this year.
Upon integration of the new company, Kanebo and
Kao expect to reorganize the entity into sales and
manufacturing divisions — possibly with Kao handling manufacturing and Kanebo handling sales.
The agreement doesn’t “extend to any line of business beyond cosmetics,” the companies said. Some of
Kao’s major U.S. businesses include Andrew Jergens
and John Frieda. Kao also owns KMS Haircare and
Goldwell. Some of Kanebo’s holdings include the
Kanebo brand and the license for designer Cynthia
Rowley’s cosmetics.
The new firm is expected to have annual sales
of $2.64 billion at current exchange rates, according to press reports, which added that shampoo
will not be part of the deal. As part of streamlining
initiatives, Kanebo is expected to cut 2,800 jobs by
spring 2006.
Kanebo, which entered eight European markets in
January, had 2002 beauty sales totaling $2.09 billion;
Kao Corp.’s beauty sales were $2.43 billion.
Also based in Tokyo, Shiseido, Japan’s largest
beauty company, had fiscal 2002 sales of $4.83 billion.
— Matthew W. Evans
WWD, FRIDAY, OCTOBER 24, 2003
Media
All-Stars
WWD
Celebrity Editors: On
the Brink?
Cashing In on the
Simple Luxe Life
The Best Magazines
You’ve Never Heard Of
The American
Magazine Conference
in 867 Words
And, of course,
Memo Pad.
9
PHOTOS: THOMAS SCHENK COPYRIGHT 2003 © THE CONDÉ NAST PUBLICATIONS INC.
12
WWD, FRIDAY, OCTOBER 24, 2003
Media All-Stars
Is the Celebrity Editor H
By Jacob Bernstein
NEW YORK — On Monday, word broke that Anna Wintour
was the subject of an upcoming, unauthorized biography
by a former National Enquirer reporter. Coming six
months after she was villainized in the best-selling novel,
“The Devil Wears Prada,” it might be easy (almost) to feel
a tinge of sympathy for Wintour.
But don’t. These days, a little schadenfraude is practically a sign of vitality. Faced with an abysmal advertising
climate and a corporate culture increasingly determined
by newsstand sales, it’s never been a worse time to be a
celebrity editor.
Don’t believe it? It comes straight from the horse’s
mouth.
Two months ago, Tina Brown was discussing the state
of the magazine industry with Maer Roshan, who has been
seeking funding for his magazine, Radar. “I think what’s
changed,” Roshan recalled her as saying, “is that the era
of the celebrity editor is over.”
In fact, the industry is littered with the corpses of magazine and newspaper editors who went from A-List to unemployment. In addition to Brown, who is the phoenix of the
bunch, there is Howell Raines, the hard-charging executive
editor of The New York Times who was fired less because
of the Jayson Blair scandal than his own arrogance; Tyler
Brüle, the quintessential editor of the Prada-greendot.com-generation who left Wallpaper amid growing tension with his corporate bosses at Time Inc.; Marian
McEvoy, the home style equivalent of Diana Vreeland who
rose to (semi) fame at Elle Decor before jumping to House
Beautiful and getting fired, and Stuff editor Greg Gutfeld,
who was kicked upstairs the same week The New York
Times Sunday Styles section was profiling him as the public face of the laddie generation. Last but not least, there is
the late Art Cooper, who died not one week after his retirement after 20 years as editor in chief of GQ went into effect.
“There was a theory that if you got a big enough name
you’d be able to sell the ads. But I don’t think that has ever
worked,” said Kent Brownridge, general manager of
Wenner Media, echoing industry-wide sentiments.
“The only person who you could hire today who would
make your ad pages go up on the basis of her name alone
is Anna Wintour, and Anna would be able to do this because she’s in this odd category called fashion where they
don’t look at numbers, they look at image. But an automobile company doesn’t care who the editor is.”
What they do care about, said Brownridge, is newsstand sales and profits.
“This is a bet-on-the-horse business,” he said. “There
are always going to be editors who are hot based on their
last gigs and people will skulk around the stables at night
trying to steal them. I think there’s more of that today
than ever before. So [Good Housekeeping editor] Ellen
Levine may not be a ‘celebrity editor,’ but she’s making
Anna Wintour, still on top, with all of its annoyances.
“ There was a theory that if you got a big enough name you’d be able to
the money of one.”
Stephen Colvin, the president of Dennis Publishing,
publisher of Maxim, Stuff, and Blender, saw it similarly.
Discussing Maxim’s editor Keith Blanchard, he said, “If
he were to theoretically make the move somewhere else
and suddenly have huge success, then he would deserve
to be a celebrity editor because then he would have been
the single variable in that success. But at Maxim he’s part
of a team.”
Blanchard is also the magazine’s fourth editor in five
years. In the past, that would have indicated a magazine’s
lack of direction. Now it is evidence of a well-executed
concept, a formula that is so powerful the editor is almost
an afterthought.
“We base our criteria [for hiring editors] on the basis of
financial success, on how well the magazine does,” said
Eliot Kaplan, editorial talent director for Hearst
Magazines. “I don’t know if that was always the case and it
may not be the case at other companies, but we don’t hire
you because you’ve been in the media. It’s based on a financial and editorial track record. I think the business is
more bottom-line oriented than it was 20 years ago. A lot
goes into the success of a magazine. Of course creativity is
still important, but at the end of the day, it is about pleas-
Those Brits Just Can’t Get Enough of Ce
By Samantha Conti
LONDON — When the U.K.’s top-selling celebrity magazine Now
launched in 1996, it gave the gossip-hungry public a fresh take on
their pop idols. Instead of allowing the stars to tell their own stories — in the style of Hello! and OK! — Now offered its readers,
most of whom were female, a humorous take on celebrity lives, not
to mention the details of their hair, beauty and health regimes.
“We were laughing with them — but not at them — and that’s what
we’re still doing,” said Andrew Kirkland, publisher of the IPC title.
Seven years later, Now is still in growth mode with a weekly circulation of 590,544, up 3.6 percent over last year, according to
the latest ABC figures.
Since Now’s launch, three more celebrity titles — Heat, Closer
and New! — with tones that range from snarky to simpering, have
landed at kiosks across the U.K. Two more are expected to be introduced within the year: a weekly men’s title from Emap (which
also publishes Heat) and another gossipy magazine from Northern
& Shell Publications, owned by Richard Desmond.
The celebrity weekly readership in the U.K. is currently 2.4 million — and some believe the market shows no signs of slowing down.
“The market is just growing and growing, and the trend is for the big
publishing houses to launch more than one celebrity title,” said Sarah
Meyer of MediaCom, an international planning and buying agency. “The
trend appears to be that the new launches are arriving with a bang, and
the more traditional titles like Hello! and OK! are losing out.”
Indeed, New! — which was launched in February by Northern &
Shell, owner of the Express newspaper group and of OK! — had an
impressive debut circulation of 339,035. Its cover story this week
is titled,“Stars With Spots,” and shows the likes of Cameron Diaz
and Britney “Zitney” Spears with acne. Inside is a mix of sugar and
spice: Liz Hurley looking fabulous at London’s Fashion Rocks event
last week and a shot of Colin Firth “struggling to lift the new curvy
Renée” Zellweger during the filming of the Bridget Jones sequel.
The Emap title Closer, which launched in September 2002,
had a debut circulation of 334,542 and has found its niche not so
much with celebrity gossip but with far-from-cheery, true-life stories of date rape, domestic violence and living with terminal illnesses. “That’s another impressive launch, and they were smart to
go for an older demographic — and set themselves apart from the
celebrity pack,” said MediaCom’s Meyer.
Closer is the sister publication of Heat — the magazine that pioneered the snarky coverage of celebrities. Launched in 1999 as a
men’s gossip and TV listings magazine that no one read, it was relaunched in spring 2000 as a women’s title and is now a phenomenon. Its circulation grew 18 percent last year to 565,484, and
Heat is gunning for Now’s number one slot. While Now may laugh
with celebrities, it’s Heat that started the whole trend of laughing
at them. “Revealed: Best (& Worst) Celeb Six-Packs!” reads this
week’s cover. “Kylie’s Wind Problem” reads an inside headline.
Emap isn’t stopping there. It’s working on a weekly title that’s
been code-named Operation Tyson, aimed at 16- to 34-year-olds.
The new magazine is tipped to be launched early next year with a
cover price of $2.44 — the same price as Heat. Emap, which has
remained tight-lipped with the details so far, has confirmed it’s investing $13.4 million in the project, and insiders say it will target
the male readers who are currently devouring magazines like Heat
(ironically, since they ignored it first time around).
One reason the market is so vigorous is that readers are becoming
so addicted to celebrity news that they are buying more than one title.
“There are readers out there who are more loyal to the celebrity sector
than they are to the individual brands,” said Now’s Kirkland. “It’s not
a massive amount of people, but it’s definitely an emerging trend.”
It also helps that these magazines come out on different days
so the celebrity junkies can get a regular fix. Kirkland added that
reality TV shows like “Big Brother” and “Pop Idol” have provided a
constant flow of fresh faces — and overnight celebrities. “We
don’t see the bubble bursting because the market is changing.
Ordinary people are becoming household names overnight. In ad-
WWD, FRIDAY, OCTOBER 24, 2003
13
Headed for Extinction?
PHOTO BY WIREIMAGE
Howell
Raines,
down
and out.
Tina
Brown
rose
from
her
ashes.
Martha Stewart,
headed to court and
down on newsstand.
”
sell the ads. But I don’t think that has ever worked.
— Kent Brownridge, Wenner Media
ing readers and reaching them.”
And the margin for error is decreasing. The advertising
economy won’t quite rebound, an increasing number of
consumers are heading to price clubs where magazines
aren’t sold, and editors are refining coverline editing into
a science even as newsstand sales continue to erode. As a
result, some think the creativity is going out the window.
“Everyone is timid and terrified and corporate,” said
Tina Brown in an e-mail. “A combination of excess competition, financial squeezing and corporate greed discourages the kind of atmosphere where a writer can call
a magazine or paper and one excited, confident editor or
publisher or movie executive for that matter can shout,
‘Fantastic! Go for it!’ and clear a big splashy space for a
scoop or trouble-making story. The syndrome is self perpetuating. It means that the flair people who chafe
under such conditions don’t get hired. Business is conducted very slowly today with layers of executives signing off on decisions.”
And then there are Martha Stewart and Rosie
O’Donnell — celebrities as editors — whose behavior patterns and image problems have been a kind of apotheosis
of what can go wrong when a magazine is tied too closely
to a personality. In fact, compared with Wallpaper’s
Brüle, whose expense accounts were said by some estimates to reach as high as $100,000 a month (his helicopter
was very expensive), one might even say O’Donnell wasn’t
all that bad.
Just kidding. She was that bad. But you get the point.
And so do publishing executives. Even Cathie Black in
Palm Springs this week said that if Oprah Winfrey were
hit to get hit by a truck tomorrow, it would be a big problem. And, as well-known editors storm off for equity stakes
and extra money for their personal trainers, magazine
companies are returning to a tried-and-true technique.
Call it the triumph of the number twos.
At Wenner’s Us Weekly, Janice Min took over after the
far more well-known Bonnie Fuller jumped to American
Media as its editorial director. Newsstand sales at Us, industry sources say, are up more than 30 percent since
June, while production costs are dropping.
At The New Yorker, former staff writer David Remnick
has brought the magazine firmly into the black. Company
executives say it will earn between $8 million and $12 million this year after a century of losses.
And then there was Cooper’s replacement. Condé Nast
passed over a couple of (rising) star editors in favor of
GQ’s own executive editor, Jim Nelson. Over at The New
York Times Magazine, editorial director Gerry Marzorati
was picked out of a group that included Kurt Andersen,
one of the best-known editors of the last 15 years.
Even young editors who like the press seem to eschew
the notion that they want to be famous, as though the
mere possibility they could be perceived as self-promotional could somehow precipitate their losing their jobs.
But some say there will always be a place for the
celebrity editor, even if it’s not quite like the late Nineties.
Grace Mirabella, after all, began as Diana Vreeland’s assistant. And Remnick has no problem getting a good table
these days, even if outside of Michael’s almost no one
would recognize him.
“I think magazines have never been more connected to
their editors and I believe the next crop of editors will
come,” said Interview’s Ingrid Sischy, who is still standing
fully upright as the high-profile editor in chief of
Interview and who cited Vanity Fair’s Graydon Carter and
Jane’s Jane Pratt as evidence of the phenomenon’s health.
“We’re in an era where there’s a real romance to the
newsroom,” said Sischy. “Of course none of us are quite
running a newsroom, but the idea is the same. Three
friends and a dream can start a magazine. It’s the being
there all day and night on spit and a piece of gum that
eventually forces money to become an issue.”
“I think these things are never definite,” agreed
Norman Pearlstine, editor in chief of Time Inc. “At one
publication somebody who gets a fair amount of attention
gets replaced by someone who gets less.”
Or vice versa. As Pearlstine said, “Who was the editor
of the Star before Bonnie Fuller?”
lebrity Gossip
dition, the age range of readers who are interested in “Pop Idol” or
“Big Brother” is very wide. We just say ‘Bring it on!’”
And what of the oldies? Kirkland said he believes there will always be room in the market for OK! and Hello!, which both saw
massive decreases in their circulations over the past year, in part
because they stripped out free giveaways from their final tallies.
“There will always be readers who want to see stars in a
‘Hollywood’ context, or read about royalty or A-list stars,” said
Kirkland.
Circulation at OK! dropped 15 percent to 489,882, while
Hello! dropped 33 percent to 347,461 during the past year, according to the latest ABC figures.
But while the Brits can’t seem to get enough gossip, there are
those who wonder whether a peak is just around the corner. Nick
Walker, head of Walker Media, is more cautious about the future of
the sector. “I don’t think the bubble will burst, but I do think we’ll
see a plateau. After all, how many celebrities are actually having
sex in a public bathroom? So many of these magazines are forced
to churn out the same old stuff. I think what we’re going to see are
magazines making changes — Hello! for example will have to shift
down market to get its readership back.”
One segment that most agree is not eating into the celebrity
weekly circulation are newspapers. Although most of the big
In the U.K., 2.4 million readers buy celebrity tabloids at newsstands each week and the competition is still heating up.
tabloids have increased the pages they dedicate to celebrity coverage, most observers say the tabloids attract a different readership.
“The magazines are more picture-led, and feature and Q&A-oriented. It’s simply a different market,” said Kathryn Spencer, editor
of the Day&Night and Hickey columns of the Daily Express. She
agreed, however, that there’s no sating the public’s appetite for
celebrity gossip.
“People love to feel ‘in the know,’ whether it’s about their own
friends or the lives and misdoings of famous people.”
— With contributions from Sarah Harris and Ellen Burney
14
WWD, FRIDAY, OCTOBER 24, 2003
Media All-Stars
Trading Up to the
By Greg Lindsay
NEW YORK — What do Real Simple and The New Yorker readers
have in common? The former uses a $400 Dyson vacuum cleaner
and shops at Target for Issac Mizrahi, while the latter is growing
younger and is taking a look at Volkswagen’s new luxury model,
the Phaeton.
The answer is that both readers are “trading up,” to use the
handy buzz phrase invented by the Boston Consulting Group to
explain how affluent Americans now tend to overspend on luxury
goods that are “practical” or have “emotional connections” while
shopping at Costco and Target for everything else.
The publishers at these magazines are quick to identify with the
trading up phenomenon, which BCG executive Michael Silverstein
and Bath & Body Works chief executive officer Neil Fiske
explain at length in their book, “Trading Up: The New
American Luxury,” released this month. After all,
the book — which takes David Brooks’
“Bourgeois Bohemian” concept (the
“BoBos” for short) and translates it
for the MBA set — may just be a
Rosetta Stone that explains the
resurgence of The New Yorker, the
runaway successes of Real Simple
and O: The Oprah Magazine, and the
clouds of gloom gathering over more
traditional women’s magazines.
The central premise of “Trading Up”
is that middle market brands — the ones
you’ve come to know and love from Procter
& Gamble, Unilever, General Motors and
the like — are slowly going away. The wealthiest 20 percent of Americans — who control 65
percent of discretionary spending — are
increasingly reaping the savings of big box
stores ($100 billion collectively) and immediately
spending those savings on “new luxury” items, i.e.,
“products and services that possess higher levels of
quality, taste and aspiration than other goods in the
category, but are not so expensive as to be out of
reach,” as they’re defined in the book. Together, this
category comprises $350 billion worth of goods and
services, growing between 10 and 15 percent per
year. Thanks to the mass entry of women into the
workforce during the past 30 years, new luxury
items have largely been determined by the
spending habits of women.
The perfect “Trading Up” tableau is a
Costco parking lot filled with 3-series BMWs,
which start at $27,800 but still inspire their
owners to wax rhapsodic about their performance and features. The quintessential
New Luxury good is one packed with practical features while possessing clean aesthetics and a rocketing price tag, so one
can love it objectively without worrying
about the tricky subjects of class, status
and snobbery. “Love” is the operative word here.
“New luxury goods are always based on emotions, and
consumers have a much stronger emotional engagement with
them than with other goods,” Silverstein and Fiske wrote.
Seen through the prism of “Trading Up,” the runaway successes of Real Simple and O clearly indicate a New Luxury pattern.
Oprah herself is held up as a New Luxury icon throughout
“Trading Up,” and O’s motto, “Live Your Best Life,” speaks directly to the consumption approach to self-improvement that lies at
the heart of New Luxury.
Real Simple, meanwhile, plays to the functional impulses of its
readers. “Our mission is to make life easier and better,” said publisher Robin Domeniconi. “Our readers have an $80,000 household
income, but there’s always interest in solutions to better their lives.
Anyone who can deliver on those promises will win them over.”
O posted a newsstand gain of 37.5 percent, equaling 280,000
copies per issue, in the first half of this year, while Real Simple’s
circulation rose 31.3 percent overall in that period (mostly due to
subscriptions), or 320,000 copies.
“Women are out there working hard, making money,” said O publisher Jill Seelig. “I think women feel it’s OK to reward themselves.
We think that what really matters is what’s deep down. With our magazine, we talk about giving back and feeding your soul.”
But the proof is in the pages. Beneath the raw numbers both magazines have a high/low mix that complements the “Trading Up” thesis. A number of Real Simple ads play up messages of quality and
practicality (especially those of entry-level luxury brands like
Mercedes’ C Class); Target’s ads take the reverse approach and tout
the homewear’s aesthetics. At O, more Target and packaged goods ads
run alongside pages from Lexus and Coach, quintessential New
Luxury brands thanks to their fusion of style and durability.
But the bifurcation of spending habits — trading up and down
— is threatening to wipe out the vast middle that has fueled mass
market magazines until now. Silverstein and Fiske see the squeeze
everywhere — affecting the Big Three automotive companies,
department stores and even individual product lines inside otherwise successful companies.
“Even within brands, the middle lines are disappearing,” said
Jill Corcoran, a BCG consultant who worked on “Trading Up.” “You
even see Whirlpool and Maytag bringing out luxury machines and
no-frills ones. The middle of the market is disappearing even within brands.”
Further exacerbating the situation is the rise of private label
brands inside big box retailers like Wal-Mart and Costco that have
eliminated the stigma of store brands and generally don’t need ad
campaigns to fight for shelf space and win over consumers, a
development that could further squeeze out more brands.
“It’s a logical conclusion,” conceded Corcoran, and a losing proposition for mainstream women’s magazines, which
have traditionally depended on packaged goods giants
rather than “masstiege,” or neo-luxury, goods that
Silverstein believes are the future. There have already
been ominous signs — Proctor & Gamble’s 2000 decision to regroup around its top 10 brands like Crest
and Ivory soap perhaps being the most prominent.
“There is no average consumer anymore,”
Corcoran said. “This ties into a trend toward
more targeted products. Traditional market
research isn’t working anymore. You can’t think
about the average consumer and build around
his or her needs.”
The fallout for the magazine business,
she said, is that “it requires a new burden
on advertisers and magazines to really
understand their audience more, and
understand there is a different customer buying
Coach and Burberry. You have to peel the onion back
a few more layers.”
On the plus side, the utter refusal of these
consumers to admit they are living an
extremely expensive life — emotional
connection to their cars or not — has
apparently blown traditional pricedemand curves. Burberry’s and Gucci’s
ability to market their ever-burgeoning
product lines as luxuriant while racking
up sales volumes far in excess of traditional luxury goods just might be due to their
customers being in denial.
That’s what Money magazine found in its
2003 Affluent American’s and Their Money
study, released Wednesday to coincide with a
breakfast discussion with Silverstein on the
topic. “What we found,” said Money’s executive
editor Sheryl Tucker, “is that they are definitely
living a luxury lifestyle, but when you try to put
a label on it, no matter what they’re spending on
products, they deny it’s for any status or elitist
reasons. But then they buy these goods because,
they say, it’s a good value, or makes life easier for
their family. They’re sort of denying they live this
privileged lifestyle. They’re looking at J.Lo and Ben and saying ‘We
don’t live like that,’ as if that were true luxury.”
“They appreciate quality,” insisted Seelig. “I think it’s a shift
toward value and quality rather than status. It’s not about materialism; it’s about rewarding yourself and living a quality life.”
The next step for most magazines may be to consciously position
themselves as a product worth trading up for, but The New Yorker
is already there. Publisher David Carey has openly embraced
Silverstein and his ideas since “Trading Up” first appeared in article form in the Harvard Business Review. Carey first met Silverstein
back in May, and quickly recruited him to speak to a packed house
of the magazine’s luxury advertisers during September’s New
Yorker Festival. By the end of his speech, Silverstein was fielding
questions about the fate of luxury goods on a sector-by-sector basis
— men’s apparel, air travel and Cadillacs. (Coincidentally, editor in
chief David Remnick ran a “Talk of the Town” piece that also touted the book.)
Carey sees Silverstein and “Trading Up” as a way to explain his
magazine’s ongoing conversion from old luxury advertisers to New
Luxury ones, and from older readers to younger ones. New Yorker
readers aged 18-34 increased by 40 percent this spring, according
to MRI, while readers over 65 declined by 20 percent, bringing the
magazine’s median age down to 45.
“They’re trading up to better editorial products,” Carey said. “As
we go around town and hear tales of woe about circulation, we think
this phenomenon helps explain some of our own success.”
WWD, FRIDAY, OCTOBER 24, 2003
e New Luxe
Clockwise from upper left, ads for new
luxury brands by Mercedes-Benz, Chrysler,
Easy Spirit, Victorinox and Target.
Opposite page, cover of Trading Up (top)
and an ad for the big box store Kohl’s.
15
A SNAG?: David
Remnick and Bill
Keller have been
friends for more
than 15 years,
having gotten to know one another in Moscow while
employed as the bureau chiefs for The Washington
Post and The New York Times, respectively. But while
the two remain on good terms, there are indications
that competition is increasing between them. The
result may be making for some hurt feelings and
bruised egos.
Two weeks ago, Remnick, editor in chief of The
New Yorker, threw a dinner party for Keller, executive
editor of the Times, in his Upper West Side apartment.
Keller, who was presumably closing the newspaper,
showed up almost an hour late, according to several
sources. Then there was the toast, reported on
Monday in the New York Daily News, in which Keller
— giving a lesson in Russian — delivered a message
to his old Moscow chum.
“Yob tvoyu ma,” Keller reportedly said. The
meaning? Go [bleep] your mother.
It was meant to be a joke. But Remnick wasn’t
laughing.
And while the item in the News ended there, the
story didn’t. According to sources, a thank-you note for
the dinner never materialized from Keller, though he
did call and leave a message.
But how thankful should Keller have been?
Remnick was busy poaching the Times’ Jerusalem
bureau chief, James Bennet, to be his magazine’s new
Washington bureau chief. That wouldn’t be particularly
irksome, but The New Yorker had just stolen Margaret
Talbot away from The New York Times Magazine as a
staff writer. The Times had tried unsuccessfully to keep
her, making a generous counteroffer.
Then, as if to put the icing on the cake, there was
Talbot’s quote in The New York Observer. “For writers,”
she said, “The New Yorker just has that eternal
attraction or appeal.”
But Remnick said everything’s dandy.
“The New Yorker and the Times are apples and
oranges and I have all the respect in the world for what
they do,” he said by e-mail. “Yes, we've hired some
writers from the Times, just as the Times has hired
writers from other places like The Washington Post or
The Los Angeles Times. As for the dinner, my wife and
I threw the party out of friendship of 15 years or more
and the Kellers could not have been nicer about it —
before, during and after."
Keller, through a spokesman, said “David and I are
good friends with a healthy element of rivalry in our
friendship.” The spokesman added that Keller had
brought a gift with him to the dinner. — Jacob Bernstein
MEMO PAD
V-ANISHED: Call it creative differences. Stephen Gan
has only put out one issue of V Man, the offshoot of
downtown fashion bible V, but he’s already parted
ways with the editor. Phillip Utz, the former European
fashion correspondent for Talk and a contributor to
Numero, the French fashion magazine, is gone. He’s
being replaced by Armand Limnander, the former critic
for Style.com and writer for Vogue. The magazine’s
next issue will be in the spring. — J. B.
quality. I think it’s a shift toward
“valueTheyandappreciate
quality rather than status.
”
— Jill Seelig, O: The Oprah Magazine
WHAT YOU MISSED AT THE AMC: Cathie Black, Dan
Brewster and David Pecker dutifully climbed on stage
Tuesday afternoon at the American Magazine
Conference in Palm Springs for the climactic "View
From the Top" panel. Mixed in among the perennial
complaints (“It’s crazy that we pulp seven out of every
10 copies!) were a few moments of unscripted truth.
Black, on being asked what would happen to O
magazine if something happened to Oprah: “If Oprah
were hit by a bus, it’d be a very different situation.”
Pecker: “It'd be a big story for me, though.”
The moderator: “What other celebrities would work
as the inspiration of magazines? Dan, do you have a
thought about that?”
Brewster: “No.”
Pecker: “Don't ask, because no celebrity would
want to do a magazine with me.” — Greg Lindsay
GLENDA’S NOT IN THE HOUSE: Note to party crashers: it’s
best not to use the top name on a masthead when
trying to land an invite. When a man who identified
himself as Glenda Bailey’s assistant RSVP’d for the
Harper’s Bazaar editor in chief and her good friend,
Jenny Bykova, for Wednesday night’s Avant Guardian
photography exhibition and party, organizers smelled a
phony. Sponsored by Surface magazine to showcase
new talent, the event often draws editors. But Celia
Chen, a partner at Plug, the public relations firm
throwing the bash, knew the phone number didn’t
match up with Bazaar’s and phoned Bailey’s real
assistant, who confirmed her suspicion. “He aimed a
little high,” Chen said.
— Rosemary Feitelberg
Photo: Chris Militscher
Behind that mascara is a very good mind
and Marie Claire engages it fully,
with true fashion intelligence,
beauty advice she trusts enough to use,
and in-depth stories about causes that affect
women all over her neighborhood: the world.
With style and wit, we tell it all,
which is why she listens.
Let Marie Claire speak volumes for you.
Please call Katherine Rizzuto, VP/Publisher, for more information at 212-841-8495
18
WWD, FRIDAY, OCTOBER 24, 2003
Media All-Stars
Doom and Gloom
In Palm Springs
By Greg Lindsay
RANCHO MIRAGE, Calif. — Magazine executives had no shortage of
complaints about their business at this year’s American Magazine
Conference — but they once again failed to offer any real solutions.
Addressing the conference Tuesday afternoon, Hearst Magazines
president Cathleen Black, Gruner + Jahr chief executive officer
Dan Brewster and American Media Inc. ceo David Pecker rehashed
the various structural problems facing the industry — wholesaler
consolidation, a wrecked distribution system (“The whole thing has
imploded,” Black said) and the need for magazines to justify themselves to advertisers that pit them against each other as well as
other media.
But the best suggestion for change came from Black, who recommended “the operations side of our business is where we can
take costs out of business,” i.e. smaller staffs with fewer perks.
“This is a place that is ripe for change. It’s been said that pain
helps you focus.”
Even Pecker, whose AMI has the advantage of controlling its
retail display space at checkout counters, said the industry’s structural problems were too deep for any publisher to fix on their own.
Facing a situation in which two-thirds of his company’s tabloids
are pulped each week, he’s slashed their draw — the number of
copies put up for sale — by nine million copies, but his sell-through
percentage still dropped to 32 percent from 36 percent. “It’s
dropped from 61 percent when I bought it,” he said, “Each [percentage] point was $2 million I lost. No matter how much you drop
it, no matter what they do, the efficiency will drop because of how
bad things are.”
Wal-Mart also cast a long shadow over their discussion. G+J’s
Brewster had just returned from Wal-Mart headquarters in
Bentonville, Ark., where he had been surprised by the company’s
decision-making processes. “There is one office after another specializing in each product,” said Brewster, “and decision making is
very, very centralized. At the most senior level, they take a look and
make a common sense judgment about whether it’s appropriate for
their customers.”
When asked for his thoughts on the mass-market women’s magazine Time Inc. is developing with Wal-Mart’s approval, Brewster
replied, “My cabbie in Bentonville told me [Time Warner co-chief
operating officer] Don Logan had been there the week before.”
In an earlier session, the MPA released the findings of a readership survey conducted by Northwestern University that was full of
good news for publishers struggling at the newsstand and to prove
their contention that magazines have a relationship with readers
that other mediums lack. The survey, which polled regular readers
of 100 magazines, found there is no difference in value in readers’
minds between a magazine bought on the newsstand or purchased as
part of a subscription. This would disprove conventional wisdom
that newsstand sales are one of the few reliable indicators of a magazine’s vitality.
What’s more, Northwestern professor John Levine said, the
readers did not value a magazine less if it had a low subscription
price. And perhaps most controversially of all, so-called “paid
place” subscriptions sold to doctors’ offices and nail salons attract
more avid readers than regular subscriptions and may have more
value to advertisers.
“They are real readers and you ought to enjoy that fact,” said
Levine, adding, “Pay attention to these people because you have a
foundation that’s terrific and you should use it.”
This comes after a scandal rocked the Audit Bureau of
Circulations this spring when it discovered publishers across the
industry were misclassifying paid place subscriptions as individual
ones, angering advertisers that felt they were worth less, not more,
than standard subscriptions.
The continuing impact of the Internet on publishing was also on
the bill Tuesday morning. In a 30-minute interview, Interactive Corp.
ceo Barry Diller once again laid out his vision of a transaction-driven, broadband future for the ’Net, warning the audience that “now,
in a converged world, the factors and products will exist to make
reading them easy” in an electronic form thanks to tablets and other
non-PC devices linked to the ’Net. He also used the opportunity to
again call for more oversight of the megamedia conglomerates he
calls “the oligarchs.”
“Twenty to 30 percent of what has to go through their pipes has to
be non-owned by oligarchs dealing with each other,” he said.
Preceding Diller was a panel of top Internet execs from Time
Inc., Rodale, Meredith, Forbes and Consumer Reports who rattled
off the most recent lessons of their Internet forays. Online advertising appears to be making a comeback, with mini-sites for advertisers the most popular format, especially when they’re part of integrated deals.
“There’s some very nice six-figure deals out there from major
consumer goods makers if you can deliver a complete experience,”
said Time Inc. Interactive president Ned Desmond.
Forbes.com ceo James Spanfeller said the company is toying with
extending its site’s money-back guarantee to advertisers in the flagship. Advertisers that can prove that running ads on the site did not
boost their brand can demand a refund. None have qualified so far.
“We haven’t offered it quite yet as an ongoing opportunity, but we
have thought about it day in and day out,” he said.
The Artist as Editor
NEW YORK — Raul Martinez has
never had top billing.
In the Eighties, at age 27, he was
working at Vogue — and helped
redesign it under the very watchful
eye of Anna Wintour. Later, he
started his boutique firm, A|R
Media, with partner Alex Gonzalez,
but their credentials were overshadowed by the fact that they
worked almost exclusively with
photographer Steven Meisel.
But that’s changing. Martinez
and Gonzalez have bulked up A|R
in a bid to graduate from being an
image house for Meisel and luxe
clients like Valentino into being a
full-service boutique ready to
scrap with the David Lipmans,
Fabien Barons and Trey Lairds of
the world. And Martinez himself
has top billing at last — on the
masthead of his own pet-magazine
project, Influence.
An antimagazine of sorts,
Influence is a close examination of
art, photography and the creative
process, bound together by the
printed conversations of guest contributors like Kurt Andersen, Inez
Van Lamsweerde and Vinoodh
Matadin. It’s a vanity project, to be sure, but it sends
a message — that
Martinez and A|R
know how to build
magazines
from
scratch,
without
Condé Nast’s or
Meisel’s help. And
considering Martinez
believes that content
builds brands and that
custom publishing may
be the way of the future,
present and future clients
need to hear it.
“It’s a personal statement,”
Martinez said, “but they’ll see we’re not
just about fashion and advertising. If it helps the
agency in other fields, that’s great.”
It could help prove that A|R can consistently
deliver in volume the sort of images it’s produced
for Versace, Yves Saint Laurent and Estée Lauder
since opening its doors in 1997. There are already
signs that A|R will make the leap: it’s currently a
finalist for Banana Republic’s business, versus
TBWA/Chiat Day, Leo Burnett and Laird &
Partners, and it already has added nonluxe clients
like Naturalizer seeking a dose of the firm’s highfashion sensibility. But its reputation as being
Meisel’s pet shop raises doubts among its peers.
“They’re going to have to really prove them-
A|R ads for Estée Lauder (top) and Tommy Jeans (above).
Above, the cover of Martinez’s
magazine, Influence. Left, the creative
director himself.
selves,” said one competitor.
“People aren’t taking them seriously as a full-service agency. The work
is going to have to speak for itself.”
Martinez has no shortage of ideas.
“There are other ways of reaching people
without having to spend $68,000 a page,” he
said. One way is for the clients to own their own
pages — Martinez is a practitioner of custom publishing as it’s done in Europe, where the resulting
magazines aren’t treated by the clients like oversized brochures. At one time he’d entertained
hopes of a custom publishing division for A|R, but
the only fruit of that effort was one issue of Versace
Magazine, which the parent company pulled the
plug on when its fortunes began to slide.
“I think the problem is that [in-house magazines] have been so specifically about the brands,
instead of being about anything that could conceivably fall within the world of that brand. It all
comes down to economics,” Martinez said. “The
bad economy has stopped most of it cold. You have
to do at least four issues to make it worthwhile, and
people are reluctant to pay that up front.”
But the possibilities are there. “Especially for
someone like Banana Republic, it can suggest their
philosophy, their culture and the world in which
their customer lives. They really should explore it.”
So think of Influence, then, as A|R’s own house
organ — a quarterly designed to encapsulate the
firm’s and Martinez’s philosophy — and give it a leg
up on the established boutiques it’s now up against.
“The reason Influence exists is to create the perfect content and the bridge to culture,” said editor
in chief Jan-Willem Dikkers. (Martinez is the publisher and editorial director.) “The clients’ reason
to go to a creative boutique instead of the large
agencies is because they are more connected to
higher culture — something not attributed to the
fashion industry. When you look at Marc Jacobs’ or
Helmut Lang’s success, it’s not because they make
better clothes, but because of a larger cultural component associated with their brand. To have this
extra jewel in their crown is extremely important.”
But building brand mythologies for fashion
houses is one thing; pushing product for midmarket brands is something else entirely. “We’ve been
learning through the years what it takes to get to
this point,” Martinez said. “That’s why it’s taken
this much time. We’re really going through that
transition right now. When you say, ‘We are a fullservice agency,’ you have to make them believe it.”
— Greg Lindsay
YOUR MONEY WELL SPENT.
the new men’s magazine from condé Nast. launches 4.04
call Alan Katz, publisher 212.286.7766 cargomag.com
© 2003 The Condé Nast Publications, Inc.
INTRODUCING
THE NEW HUNTING
MAGAZINE
FOR MEN.
20
WWD, FRIDAY, OCTOBER 24, 2003
Media All-Stars
The Best Mags You’ve Never Heard Of
READYMADE
Launched on the eve of 9/11 by former Surface editor
Derek Peck, Planet seeks to do for the global pop cultural what Nylon and Black Book, et al, have done for SoHo.
After launching with issue “#0” the next four were built
around the elemental themes of earth, air, fire and
water, while the fifth and current issue has Angela
Lindvall on the cover pushing the peace theme.
While certain new magazines seek millions to reconstitute the tired “downtown” formula for readers living
west of the Hudson River, Peck has published six issues
with a six-figure sum and still managed to recruit name
brands like Marc Baptiste to fill out his multicultural
roster. Maybe he had exchange rates on his side.
While mom comes to grip with the fact that Martha Stewart may be headed to jail, her overeducated and underemployed children are getting busy with the sewing
machine and glue gun every time Readymade arrives in
the mail.
Aimed at hipsters ready to make their loft a home,
Readymade is a shelter book for the post-Internet-bust
generation — consumption is played way down while
appropriately cool do-it-yourself projects and ruminative essays on our prefabricated culture are front and
center. Want to build a grass couch in the backyard or
make puddle-proof skirts out of broken umbrellas?
How about a messenger bag made from FedEx envelopes and duct tape? And have you ever thought of
designing your own afterlife with a Louis Vuitton urn?
They’re all here. Launched in San Francisco in 2001 by
a pair of dot-com refugees who saw early the zeitgeist
of the dot-com bust and post-9/11 nesting, Readymade
has outlasted almost all the neo-shelter books that
were supposed to break in 2002 — Hearst’s Chic Simple
test, Meredith’s Living Room experiment, the foundering newspaper insert, Cachet — with the exception of
Budget Living, which has completely overshadowed
Readymade with its more bourgeois-bohemian take on
the topic (and amidst public accusations in Folio of ripping Readymade off). The quarterly, though, goes
bimonthly in February.
Its biggest problem, perhaps, is that it has too much
advice for building things and not enough for buying
them. No one ever broke into the big time with Ace
Hardware and Home Depot leading the way.
RICHARDSON
In an age where porn can readily be consumed for free on
the Internet, you’d think Richardson would be a complete
failure. And yet, in three years and just three issues, it’s
become something of a coffee table fixture, a full-fledged
art house porn magazine that has even been seen floating
around the offices of The New York Times Magazine and
Vanity Fair. The brainchild of stylist Andrew Richardson,
the magazine’s latest issue includes shoots by top fashion
photographers Mario Sorrenti and Terry Richardson (no
relation). Not everyone is amused. Richard Avedon
wound up in a nasty exchange with the magazine, going so
far as to fax it a message saying, “I actually think the magazine brings nothing to the potential art of pornography,
and do not want to be quoted in any way.” The magazine’s
response? It printed the fax in the latest issue.
ISSUE
Missing in action for the last two years, Issue actually
delivers on the promise that most hipster art and culture
books can’t keep: originality. That can mean convincing
video artist Pipilotti Rist to supply new work for an
issue, or persuading the already overexposed photographer Ryan McGinley to bashfully disrobe for the camera.
“Issue magazine strives to be the National Geographic of the American Liberal Arts,” in the words of its
founders, co-editors Jan-Willem Dikkers and Martynka
Wawrzyniak. That’s a tall order, but Issue has already
transcended the clichés of downtown style books and
wonky arts publications — the two genres its hybridizes
brilliantly. The new issue, #7, is devoted to the topic of
adolescence, and contains a graphic novella, neoclassical paintings of African-American men in hip-hop
regalia and a letter to Calvin Klein on the life-changing
effects of his quasi-pornographic advertising.
CARLOS
ZEMBLA
Vowing to have “Fun With Words,” the first issue of
Zembla, just published in the U.K., resembles nothing so
much as Harper’s Magazine mated with Dazed &
Confused, or at least the former’s wonkiness crossbred
with the latter’s self-indulgence. What magazine would
authorize an artist to chisel the Ten Commandments in
stone in Klingon and then devote eight pages to photographs of each commandment?
But that’s about as out there as it gets. Backed by London
rare book dealer Simon Finch (he’s on the masthead as publisher), Zembla and its editor, Dan Crowe, are making an
earnest attempt at celebrating books and bookishness without any of the mustiness. Actress (and Viktor & Rolf muse)
Tilda Swinton interviews her husband, the writer and artist,
John Byrne, in a game stab at the celebrity interview, and
contributors include Steve Martin and Manolo Blahnik —
who illustrates a Q&A with the very dead Marcel Duchamp.
The name Zembla is an obscure reference to
Nabokov’s novel, “Pale Fire,” and if you caught it, then
you probably know exactly how large Zembla’s eventual
readership will be. Still, both Paul Smith and Gucci were
curious enough to buy a few ad pages in the debut issue
(the magazine will come out five times a year), an affirmation that one can be smart and sexy.
PLANET
No one needs another too-cool-for-school “downtown”
book chasing the same Marc Jacobs and Miss Sixty ads
and running competing spreads on The Strokes. Which
is why Planet’s photo spreads of Tibetan wrestlers,
Guatemalan prostitutes and the Senegalese supergroup,
Orchestra Baobob, are so welcome. (The ads are still the
same, however.)
Carlos is what McSweeneys would look like if David Eggers
happened to be obsessed with Kate Moss, Russian oligarchs
and the franchising of hip-hop. Pocket-size, wrapped in
brown cardboard covers and looking like it just came off a
letterpress, you’d never guess it belongs to the same magazine genus as American Way or Hemispheres. Produced by
the custom publishing polymaths at London’s John Brown
Citrus Publishing, Carlos only can be found tucked into the
seat pockets of Virgin Atlantic Upper Class passengers.
A quarterly, the magazine alternately tackles the
burning questions of Virgin’s glamour-puss clientele (the
latest trends in fragrance design; the comeback of Ms.
Moss) and amuses readers with short sketches of life at
Virgin destinations — a Russian aircraft carrier theme
park outside Hong Kong, or London’s boom in ice rinks.
An inspiring example of just how good custom publications can be when taken seriously by their underwriters, Carlos mixes name-brand contributors (like British
Vogue’s Harriet Quick) with an elegant, illustrationsonly design that’s 180 degrees from the shoddy glossiness
of most in-flight magazines. A few ads appear on glossy
paper running in the middle (Mulberry and Thomas
Pink are in the current fall issue), but the lack of pressure to pay for itself, whether on the newsstand or via
ads, means the editors can reprint Ian Fleming’s short
story, “James Bond in New York,” for the heck of it.
WWD, FRIDAY, OCTOBER 24, 2003
21
By Samantha Conti
LONDON — CVC Capital Partners and Texas Pacific Group
might have delivered a knockout punch in their battle to acquire the U.K. department store
group, Debenhams.
On Thursday, the firms,
through their newly formed
Baroness Retail, upped their bid
to $7.94 a share from the $7.69
tabled last month. Private equity
fund Permira and partners, operating under the name, Laragrove,
pulled out of the race, saying, “It
will not be increasing its offer.
The price offered by Baroness is
in excess of the price which
Laragrove was prepared to offer.”
Dollar figures are converted
from the pound at current exchange as Baroness offered 4.70
pounds a share after its previous 4.55 pound offer.
The revised offer values Debenhams at approximately $2.9 billion, or 1.72 billion pounds, a 10.6
percent premium to the initial
offer from Laragrove that sparked
the bidding war.
As reported, Laragrove, working in tandem with Debenhams
chief Belinda Earl on a management buyout, had made a $7.18,
or 4.25 pound, bid at the end of
July. That bid was topped by
Baroness in September. Laragrove had been planning a counter bid until Baroness’ sweetened
offer, and it had until the end of
the month to table it.
Debenhams’ independent directors have recommended
Baroness’ fresh bid. A spokeswoman for Debenhams said the
extraordinary general shareholders meeting requested by Baroness would go ahead on Nov. 10.
As reported, Debenhams
agreed to the request for what is
known as a “scheme of arrangement,” which provides for a
quicker and cleaner means of
presenting an offer to shareholders. A scheme of arrangement is simply an alternative
way of making an offer for a
company. For Debenhams to be
sold, approval is required, in
person or by proxy, of no less
than half the shareholders representing at least 75 percent of
the value of shares voted.
Baroness made the request
in order to give shareholders
the chance to vote before the
crucial holiday selling season.
As reported, John Lovering,
the U.K.-based entrepreneur who
tried unsuccessfully to buy the
Somerfield supermarket chain
earlier this year, will become
chairman of Debenhams if and
when a purchase by Baroness is
consummated.
The Debenhams’ spokeswoman said Laragrove will be
paid its breakup fee of $13.5 million, or 8 million pounds.
ICE Raids 61 Wal-Marts,
Over 300 Illegals Found
Continued from page 2
publicly from immigration
problems, were not visited.
Asked whether today’s actions represent the tip of the
iceberg for Wal-Mart, the
spokesman instead responded
with a warning for retailers in
general.
“If an agency or corporation
knowingly hires illegal workers, they should not be surprised to get a visit from ICE,”
he said. “We take the laws we
are tasked with enforcing very
seriously. This is an ongoing
worksite investigation and
there will be others.”
Legal experts said since
Sept. 11, 2001, ICE has focused
on national security risks, such
as illegal workers in airports.
In that context, the raid on
Wal-Mart is “very unusual,”
said Hofstra law professor
Peter Spiro. “Certainly this was
authorized at the highest levels. Perhaps the thinking was if
you catch one big company in
the crosshairs, it makes everybody else think twice.”
Stephen Yale-Loehr, who
teaches immigration law at
Cornell University, said the
probe of Wal-Mart in Pennsylvania likely indicated the
problem was systematic enough
to merit national investigation.
He noted that joint liability
is often tough to prove — ICE
would need a memo or other
“smoking gun” — but that it’s
another public relations black
eye for Wal-Mart.
The retailer, facing a possibly mammoth class action gender discrimination lawsuit, has
been attacked on multiple
fronts lately, facing charges
that it forces workers to work
off the clock, offers insufficient
benefits, harasses unions and
bullies its way into communities. To combat the negative
publicity, Wal-Mart has been
running a feel-good national
ad campaign featuring testimonials from its associates.
The company also faces
pressure from unions, a longtime foe.
Spearheaded by the AFLCIO, unions and other social
activists have launched the
People’s Campaign for Justice
at Wal-Mart, claiming WalMart’s cost-cutting measures
jeopardize the future of the
American middle class.
The alliance is demanding a
range of concessions from the
world’s largest company, including better wages, affordable health benefits and safer
workplaces.
“Wal-Mart is pushing the
trend to lower wages and no
benefits, which makes the economy more dependent on cheap
labor and undocumented immigrants,” said Thea Lee, assistant director for international
economics at the AFL-CIO. “In
the end, the people work at
Wal-Mart stores and Wal-Mart
needs to take responsibility.”
PHOTOS BY KEITH SMITH
Baroness Ups Bid Spring’s in the Air at Ann Taylor
To Buy Debenhams
Left: Looks from the Ann Taylor Loft spring collection;
two styles from the signature line.
NEW YORK — Ann Taylor can’t wait for spring.
Such was the retailer’s enthusiasm that it
showed off its spring collections for the Ann Taylor
and the Ann Taylor Loft divisions Wednesday night
at Pier 59 Studios here. Shoppers will have a
chance to see the effort in the firm’s more than 580
doors across 42 states come spring.
In a setup replete with grass, a blue-sky backdrop
and lights that created a faux sunny afternoon, mannequins sported a few dozen looks from both lines.
Present for the celebration was a host of the retailer’s upper echelon, including chairman and
chief executive officer J. Patrick Spainhour. Shari
Hershon, senior vice president of design for Ann
Taylor Loft, described the line she oversees as
“very feminine and flirty” for spring.
“A lot of the silhouettes that looked good to us
felt [like the] Fifties,” Hershon said.
Throughout the collection there were dynamic
colors including several oranges and pinks. Not
everything in the line, though, recalls sock hops
and drive-in movies. Loft is continuing with its
surfer-inspired sport story, which Hershon described as “not performance at all, very spectator.”
Hershon is also looking for impact from little details in the line.
“Loft is really known for a lot of little details,”
she said, adding that the idea is to take a clean look
and add a little splash with touches such as contrast
stitching or ruching. “We’re very much about that
one great detail that makes it proprietary for us.”
Fashion Scoops
BLASS ACT: “Aren’t you proud of our
friend?” asked Casey Ribicoff, a coexecutor of the estate of the late Bill
Blass, as bidders made their way out
of Sotheby’s on Tuesday night, after
the opening of an auction of the
designer’s vast collection of
paintings, sculptures and furniture.
That night alone, Sotheby’s received
more than $3 million in bids for the
first 106 lots of the 805-lot
collection. Over three days, the
collection more than doubled its
high estimate, bringing of $13.6
million. Blass specified in his will
that the proceeds of his estate be
donated to the Metropolitan
Museum of Art and the New York
Hospital AIDS Care Center.
Among those in the auction action
during the week were longtime Blass
devotees Helen O’Hagan, Nina
Griscom, Carolyne Roehm, Duane
Hampton, Lynn Nesbitt and Sheila
Marks, but also one surprise visitor:
Hervé Pierre, now the creative
director at Carolina Herrera. He was
there to bid on a few objects on
behalf of Lars Nilsson, despite any ill
will left at the house after both were
let go from Blass this spring.
(Nilsson is now designing at Nina
Ricci in Paris.)
The top five items for the week
were a pair of Russian wall lights in
the shape of bears that sold —
— Evan Clark
including Sotheby’s 20 percent
markup at the gavel — for
$321,600, more than 10 times the
high estimate; a marble portrait
head from the late first century B.C.
for $209,600; a bronze rendition of
the Colonne Vendome for
$176,000; a pair of Regency
daybeds for $164,800, and a
Noguchi sculpture for $153,600.
SHIRTING THE ISSUE: It looks like
French designer Jose Levy, who filed
the French equivalent of Chapter 11
proceedings last June, has landed on
its feet. A Paris source said Levy has
been tapped as the new designer for
Thomas Pink, owned by luxury giant
LVMH Moët Hennessy Louis Vuitton.
This will be Levy’s second stint at a
British house. He was the creative
director at Chanel’s Holland &
Holland from 1998 to 2001.
Alloy Brings in Bernard, Revises Guidance Downward
NEW YORK — Alloy Inc. said it
hired retail industry heavyweight Robert Bernard on
Thursday, but the move was
overshadowed by the company’s
downward revision of both thirdquarter and full-year guidance.
The New York-based teentargeted marketing and merchandising company said it
hired Robert Bernard as chief
executive officer of its retail and
direct consumer division, a new
position. Bernard will report to
Matthew Diamond, chairman
and chief executive officer, and
James Johnson, president and
chief operating officer.
In a statement, Diamond said,
“We are excited to have Rob
spearheading the integration of
the Delia’s business and guiding
our overall merchandise business toward a potential strategic
transaction in the future.”
The addition of Bernard couldn’t stop downward pressure on the
stock, however. Shares tumbled
21.7 percent to close at $4.14 in
Nasdaq trading for the day.
Bernard, a 25-year retail veteran, resigned as president and
chief executive officer of The
Limited Stores division of
Limited Brands in February
2002 after a five-year tenure at
the Columbus, Ohio-based company that included the presidency of the now-defunct
Cacique division. Prior to his
stint at Limited, he had been
president of J. Crew, president
of the international division of
Liz Claiborne and senior vice
president of women’s sportswear at Macy’s.
Since leaving Limited, his
name has popped up often when
vacancies have materialized in
top specialty store jobs.
Bernard will be put to the
test quickly. Weaker-than-anticipated catalog performance,
combined with poor newspaper
and broadcast advertising sales,
prompted the company to revise
earnings estimates downward.
For the third quarter ending
Oct. 31, the company now expects a loss of 6 cents to 11 cents
a diluted share, compared with
earlier guidance of earnings of
between 1 cent and 7 cents.
For fiscal 2003, the company
is expecting a loss of 15 cents to
25 cents a share, versus previous guidance of a loss of 1 cent
to 8 cents. Earnings before interest, taxes, depreciation and
amortization is expected to
come in between $11 million
and $15 million.
Third-quarter merchandise
revenues are projected at $49
million to $51 million and sponsorship revenues of $57 million
to $59 million.
Third-quarter financial results are expected to be announced the week of Dec. 8.
— Ross Tucker
22
WWD, FRIDAY, OCTOBER 24, 2003
Christina Johnson to Exit Saks
Continued from page one
has already been selected, but
that person “has some responsibilities he or she needs to finish up,” and the current employer has requested that person’s name not be released
until December. Martin said
the successor will assume the
role in January 2004. In the interim, Steve Sadove, vice chairman of Saks Inc., will assume
day-to-day leadership of the
SFAE organization.
According to sources, Saks
didn’t use an executive search
firm to find its new ceo, and
Martin sent a note to industry
executives Thursday saying it
found an “outstanding leader.”
Speculation was rampant,
both within and outside Saks,
on who that leader might be,
with most of the conjecture zeroing in on Howard Socol,
chairman and ceo of Barneys
New York, and Fred Wilson, ceo
of Donna Karan International, a
unit of LVMH Moët Hennessy
Louis Vuitton.
In addition to having the luxury experience from Barneys,
Socol is best known for his successful career running Burdines, the Miami-based division
of Federated Department
Stores, where he spent 28 years.
Socol, whose contract at
Barneys runs through Jan. 31,
2005, didn’t return a phone call
seeking comment.
Wilson, who is in the process
of trying to turn around Karan’s
business, was previously president and ceo of the LVMH
Fashion Group, prior to which
he was ceo of LVMH Specialty
Store Retailing and president
and chief merchandising officer
at the firm’s DFS Group Ltd. He
began his career at Federated
Department Stores in 1969.
“Our company policy is we do
not comment on rumors,” said a
spokesman for DKI, when asked
about Wilson.
Faced with disappointing financial results and difficulty in
keeping
key
executives,
Johnson’s departure was inevitable and only a matter of
time, sources believed. Russell
Reynolds Associates, the executive search firm, had been
searching for a new head merchant since June, but sources
said the problem was that bringing in a heavy-duty top merchant would require making
him or her ceo.
“Tina made terrific contributions over a 12-year career, rising from store manager through
the president’s and ceo job,”
Martin told WWD. In addition,
he said over the past four years,
SFAE improved its merchandise
planning and allocation systems; enhanced customer service levels; improved store design, and strengthened the store
base through opening, remodeling and closing key stores.
But the need for a top merchant became increasingly evident following the departures
of two key executives: Gail
Pisano, executive vice president of merchandising for
women’s designer and Gold
Range merchandise, intimate
apparel, jewelr y and accessories, who left the company in
July, and Wayne Meichner,
Saks’ other executive vice pres-
ident for merchandising, who
handled men’s wear, cosmetics
and ready-to-wear and who left
the store in May 2002.
In addition, Saks was shaken
by several key departures in the
past several months. Most recently, Barbara Cavanaugh, vice
president for private label product development, resigned to
join Kellwood Co. In July,
Eileen Warner, a 25-year veteran of SFA, who held the title of
vice president and divisional
merchandise manager over
handbags and accessories, left
to join Isabel Fiore, the handbag firm, and Sal Lenzo stepped
down as visual director.
Bobbie Lenga, partner and
managing director of the retail
practice at Russell Reynolds
Associates, has been conducting the search for the head
merchant.
“I was searching for president of merchandising, and we
didn’t find that person. It was
put on hold,” said Lenga
Thursday. She said she didn’t
know whom Saks has chosen to
succeed Johnson, but added:
“They’ll pick a phenomenal
merchant for that role. Saks
Fifth Avenue is a very desirable
marquee brand, and it takes a
certain individual for that role.
They need a phenomenal merchant, as well as a great leader.”
Lenga believes that Johnson
also will be sought after.
“She will be highly desirable
in another role. She’s a phenomenal executive. She has so
many fabulous assets and
brings tremendous strength to
an organization. She’s tough,
but she’s very fair. Her expectations for herself are no different than what she has for others,” said Lenga.
Harry Bernard, executive
vice president and chief marketing officer at Colton Bernard,
the San Francisco-based consulting firm, believes Saks
should be run by a top merchant. “She was, rightly or
wrongly, the person who couldn’t hold it together at Saks. Most
fashion companies should be
led by a merchant. She’s had
some great difficulty in her people-management skills.” Those
two things, combined with her
financial performance, made it
inevitable that Johnson would
lose her job, he believes.
Robert Kerson, a longtime
search consultant who is on sabbatical and will announce his
plans in January, said the ceo
role at SFA is untenable.
“I think Tina is a very smart
and capable executive. She’s
strong, decisive and strategic.
The role of ceo is going to be
difficult and may not be doable
unless the organizational structure is changed. The job will be
a revolving door unless the person is allowed to function without a lot of interference. Tina
will land on her feet. The organizational structure doesn’t
make a lot of sense. The question is who’s running the company, and there are many cooks
in the kitchen.”
During Johnson’s tenure,
Saks Fifth Avenue undertook a
major initiative to present a
clearer luxury identity and to
reach a broader customer base.
In addition to spearheading
Leaving…
…On Deck?
Howard
Socol
Fred
Wilson
Christina Johnson
Tina made terrific contributions over
“a 12-year
career, rising from store
manager through the president’s and
ceo job.
”
Saks’ ongoing $100 million renovation at the flagship, the company refocused its private label
offerings more to Baby
Boomers, built up its contemporary assortments and expanded
its selection in the “gold
range,” including such brands
as Peter Cohen, Max Mara and
Piazza Sempione. In addition,
Johnson updated its assortment
in fine jewelry and accessories
by dramatically increasing its
number of luxury resources,
with the aim of going head-tohead with Neiman Marcus and
Bergdorf Goodman.
Last December, Johnson unveiled a new accessories concept on the flagship’s main
floor featuring a mix of upscale
designer merchandise such as
Fendi,
Marc
Jacobs,
Lambertson Truex and Coach,
and luxury leather goods shopin-shops from the likes of Louis
Vuitton, Prada, Christian Dior,
Burberry, Salvatore Ferragamo
and Bottega Veneta. Saks’ flagship also relocated and renovated its fine jewelr y area,
adding a slew of luxury jewelers to its assortment, including
Cartier and Graff. It now features a separate entrance and
fine jewelry and watches from
the likes of Corum, Tag Heuer,
Chopard, Bulgari, David
Yurman and Roberto Coin. Saks
scored coups when it opened
Cartier’s first store-in-store offering its jewelry and watches,
and becoming Graff ’s first —
and only — wholesale account.
Joining Saks Inc. in 1991,
Johnson rose through the
ranks primarily through the
store operations and selling
side. She was named vice
chair woman in September
1998, adding the chief operating post in May 1999. In
November 1999, Johnson was
named president and ceo of
the Saks Fifth Avenue division.
As ceo, she succeeded Philip
Miller, who continued as chairman. The president’s title had
been vacant since Rose Marie
— Brad Martin, Saks Inc.
Bravo left Saks in 1997 to run
Burberry.
Analysts believe Saks has underperformed compared with
its competitive set and was ripe
for management change.
Robert Buchanan, an equity
analyst for A.G. Edwards, said in
a research note Thursday,
“Potentially, this is a positive
development depending on who
ultimately is named to the top
post. For too many months SFA
has appreciably underperformed its peer group, including
Neiman Marcus.”
He added: “Our field research has consistently pointed
up dull merchandising, including a lack of originality, as well
as a homogeneous offering from
store to store, meaning next to
no micromerchandising by store.
In a broader sense, [Saks Inc.’s]
returns on sales and investments
remain lackluster and need to
appreciably improve for the
stock to outperform.”
Over the last year, half of
Saks Fifth Avenue’s monthly
comparable-store sales reports
have been negative. While that
means the chain registered positive comps for the other half of
the year, the down side has been
more negative then the up side
was positive. The lowest lows
were drops of 11.4 and 8.6 percent in February and March, respectively, while the highs were
6.3 and 6.5 percent advances in
April and July, respectively.
The chain was only able to
best Neiman Marcus on a comp
basis during two months out of
the last 12. During September,
SFA’s comps pushed up 1.2 percent while Neiman’s shot ahead
13.6 percent. However, sources
said SFA’s numbers have recently been trending upward.
During the second quarter
ended Aug. 2, the SFA chain
posted operating losses of $22.1
million. This compared with a
deficit of $13.8 million a year
earlier. Sales ticked up 0.9 percent to $486.3 million.
By comparison, Neiman
Marcus Group in its fourth
quarter ended on the same day
saw operating earnings rise 64.5
percent to $16.6 million while
sales advanced 5.4 percent to
$702.7 million.
Ron Frasch, chairman and
ceo of Bergdorf Goodman, said,
“I feel badly for Tina. It’s a tough
industry and you have to perform. All of us are comrades, and
you hate to have anyone lose
their job for whatever reason.”
Industr y executives were
stunned to hear of Johnson’s
departure.
“I am in total shock; no one
had told me anything about it. I
liked her, we got along really
well and our business with
Saks was very strong, so I will
certainly miss her,” said Oscar
de la Renta.
“I am sorry to see her leave,”
said Henri Barguirdjian, president at Graff. “We had a few
meetings with her to discuss our
plans for growth, and she was
always very aware of what was
going on with our business.”
Designer jeweler David
Yurman said Thursday, “Tina
was incredibly supportive of
the Yurman business and we’ll
miss her.”
James Ammeen, chairman
and ceo of Halston, added, “I
think she was a positive force at
Saks Fifth Avenue. She understood retailing as a merchant
and it was good to have a merchant in that spot. She was
issue oriented and raised the
profile of the store and I wish
her the best. In terms of the
company, I have the utmost confidence that Brad Martin and
Steve Sadove will carry out a
smooth transition.”
Christian Knaust, president
of Carmen Marc Valvo, noted,
“We worked with her quite a lot
and I really liked her. I thought
she was very professional and I
think she really cared. She
made an effort of trying to build
our business up. Our business
with Saks increased when she
came on board.”
St. John Knits International
Inc.’s co-chief executive, Kelly
Gray, said, “Whatever the case, I
feel like Brad Martin will ensure the success of Saks Fifth
Avenue’s future.”
— With contributions from
Evan Clark, Melanie Kletter,
Marc Karimzadeh
and Joshua Greene
Are you one?
?
WWD Retail Visionaries
Section II: November 18
Close: October 31
WWD explores the top twenty-five visionaries in modern retailing, the concepts they
engineered and their impact on the industry.
Guaranteed to reach top CEO’s who will turn to this must-read issue to find out where
the retail industry is heading. Relied upon from Wall Street to Seventh Avenue.
For more information, contact Ralph Erardy, Senior VP, Group Publisher at 212-630-4589, or your WWD sales representative.
WWDMediaWorldwide®
24
WWD, FRIDAY, OCTOBER 24, 2003
Design Awards Gone Wild This ‘New Old House’
NEW YORK — If there’s a lesson to be learned from
the Cooper-Hewitt Museum’s decision to embrace the
fashion world this year at its National Design Awards,
it’s that design is for everyone.
It certainly is for Sarah Jessica Parker, wearing
head-to-toe Gucci straight from the spring runway,
right down to her fringed handbag.
“Look at this,” she said. “It lives! It breathes! This
should win an award of its own.”
When a Gucci-loving girl like SJP lives and breathes
for Tom Ford, it must be pure anguish to hear all that
talk that he might leave the company.
“I choose not to believe that,” she said. “I’m assuming all will be be taken care of and that all will be fine.”
Really? “I didn’t ask him. I thought that would be inappropriate.”
Not everyone was being so
careful on Wednesday night,
however, as Martha Stewart
breezed through the crowded
upper Manhattan museum in
search of Isaac Mizrahi.
“I want to see Isaac,” she
said. “I’m wearing his sweater
from Target.” But shouldn’t she
be shopping at Kmart?
Cynthia Rowley was there with
the Target contingent, along with
Mizrahi and Todd Oldham, but she
made a point of hunting out
Gordon Segal, the founder of Crate
Martha Stewart in Isaac
& Barrel, to say hello, as they
Mizrahi for Target.
share a hometown of Chicago.
“They told me I shouldn’t,”
she said. “That’s the enemy.”
But before any of the bosses of the above get
upset reading this, they should remember the
point of the evening: Design is for everyone.
The awards were created by the
Smithsonian to bring national attention to
the impact of design on all facets of life. The
honorees gathered for the evening included
— as video displays attested — a finalist in
the competition to redesign the site of the
World Trade Center; a designer of artificial
robots, including one with bunny ears; the
creator of the opening credits for
“Superman” and many other films; design
legends like Lella and Massimo Vignelli
and I.M. Pei, and, for the first time this year,
three finalists in the category of fashion
design: Ford, Narciso Rodriguez and
Christina Kim of Dosa.
Ford and Domenico De Sole took a quick
break from their tough contract negotiations at Gucci Group to come to New York
for the event, and, SJP will be relieved to
know, had no comment on that subject.
“We have a meeting in the morning with
all our U.S. managers for Gucci,” De Sole
said. “So the timing worked out well. In
Europe, they have a real sense of the fashSarah Jessica
ion business, but anything that can happen
Parker in Gucci.
in America that heightens interest in fashPHOTOS BY STEVE EICHNER
Design
On America’s most fashionable streets, for
Chanel, Louis Vuitton, and Polo Ralph Lauren,
no one builds more distinctive retail
than Shawmut.
For more information call Les Hiscoe at 617.622.7187
or write [email protected]
Carolina Herrera and
Tom Ford
I.M. Pei with Reed
Krakoff of Coach, the
evening’s sponsor.
ion is great.”
The interest looked pretty great by
the number of guests sandwiched into
the museum’s small lobby for cocktails.
“I’m just happy to be included with all
these people,” Ford said. “I really want
to meet Richard Meier and I.M. Pei.”
Someone tapped Ford on the shoulder, trying to pass by in a crush of people. “Oooh,” Ford said. “I’m standing on
I.M. Pei.”
During the awards, Crate & Barrel’s
Segal was honored with a design patron
award and the General Services
Administration was honored for corporate
achievement. Bob Ulrich, chairman and
chief executive officer of Target, accepted
an award for the company’s longstanding
commitment to incorporate well-designed
products for a mass audience.
“A core belief of Target is that great
design should be affordable and accessible to everyone,” he said, then recalled a
quotation from Michael Graves, whom
he described as Target’s dean of design.
“Good design doesn’t have to be so serious or seriously expensive. It’s there for
everybody.”
Pei and the Vignellis were awarded
for lifetime achievement, and winners
also were named in five design categories: Robert Greenberg, co-founder of
RGA, which creates visual effects for TV
and film, for communication design; Tod
Williams and Billie Tsien, architects of
the American Folk Art Museum and the
Scripps Institute for Childhood &
Neglected Diseases, for architecture
design; Michael Van Valkenburgh, the
landscape architect behind Teardrop
Park in New York’s Battery Park City
and the redesign of Pennsylvania
Avenue at the White House, for environmental design; Herman Miller, a pioneer
of furniture design, for product design,
and, in the category of fashion design,
the winner was Ford.
“I have no idea what to say,” said
Ford, considering the work of the other
nominees. “The robot with the ears, I
mean, I just design dresses.”
— Eric Wilson
WASHINGTON —
Residential architect
Russell Versaci has
modern sensibilities
packaged in a singular focus on building
old houses.
Versaci has just
published a primer
detailing his vision
for modern living that
would surely raise
eyebrows among his
former Bauhaussteeped professors at
the Harvard Graduate
School of Design. In
“Creating a New Old
House” (The Taunton
Press), Versaci has
Russell Versaci’s new book.
narrowed down some
30 years of experience into eight tenets of designing traditional
American homes to accommodate the trappings of modern living.
He traveled the country selecting regional examples of new-old
homes, from a Craftsman bungalow in Washington to a SpanishCaribbean cottage in Florida.
The burgeoning new-old home design movement has been
percolating for several decades and is the product of architects
like Versaci who attended college in the Seventies and Eighties
and were disillusioned by curricula narrowly focused on sterile
modernism. “It’s a group of people who relearned the old ways
by being self- taught,” says Versaci.
But pursuing tradition in modern times doesn’t mean these
architects are stuffy historic preservationists refusing to abandon
18th-century floor plans in order to be authentic.
“I am a designer, not a preservationist,” says Versaci, who
thinks old-looking houses don’t have to forsake gourmand
kitchens, family rooms or Internet hookups. He’s an architect
who sees more comfort and humanity in living in a house rooted
“ I am a designer, not a preservationist.”
— Russell Versaci
in the diverse building traditions immigrants brought to America.
“These are homes that are designed for people who truly want to
create a nest that is comfortable and with a familiar feeling…in a
way you never connect with a modern house,” says Versaci, whose
firm, Versaci Neumann & Partners, is based in Middleburg, Va.
To increase authenticity, Versaci says new-old houses should
“tell a story over time” — one of his eight design tenets he calls
pillars — so a house appears to have parts remodeled or wings
added, even if it means mixing designs from various periods.
Probably the most crucial among Versaci’s eight pillars is the use
of building materials like solid clapboard and stone that will endure, which he calls “building for the ages.” Another pillar, “detail
for authenticity,” taps into new-old architects’ years of studying
traditional home blueprints and journals ferreted from libraries.
An example of the new-old school’s extreme attention to detail is how, in a Pennsylvania Dutch farmhouse, a slurry of buttermilk, mold spores, beer and a dash of cow manure was applied and spoiled, promoting mildew growth that created an
ages-old weathered look on stone and mortar.
Such detail has become second-nature to Versaci, who was
first a furniture designer and home renovator in Providence, R.I.,
after leaving the Harvard design school because of its focus on
modernism developed by Bauhaus founder Walter Gropius. “I
was interested in doing something more touchable,” Versaci, 55,
says. “I’m afraid I’m not very good with orthodoxy.”
Versaci’s interests in building traditions led him to the
University of Pennsylvania Graduate School of Fine Arts for a
masters and doctorate (his undergrad degree in art history is from
Yale). At Penn he became an assistant to visiting professor James
Marston Fitch, the father of the historic preservation movement.
The budget for new-old custom homes ranges from about $200$400 per square foot. “But there’s also a low, $100-per-square-foot
range you can build with the authenticity you can afford,” says
Versaci, who bemoans the acres of “faux traditional homes,” designed
by builders, that have cropped up in suburbia and are a jumble of unrelated historic styles. Versaci pegs their life span at 50 years.
Versaci, whose timeline for traditional houses to borrow from
is the Colonial period to 1940, hasn’t completely eschewed
modernism. Twentieth-century Finnish architect Alvar Aalto, who
pursued organic links between people and buildings, is on
Versaci’s short list of modernists he admires, along with the father-son Finnish architects Eliel and Eero Saarinen. Eero, who
died in 1961, was responsible for the TWA terminal at New
York’s LaGuardia Airport, Dulles International Airport near
Washington, D.C., and the St. Louis Gateway arch.
As for contemporary architects, Versaci offered one name:
New York-based Richard Meier, whose public works include Los
Angeles’ Getty Center, the High Museum in Atlanta and the
Barcelona Museum of Contemporary Art.
“In any given time frame over two or three generations there
are probably only two or three geniuses,” says Versaci.
— Joanna Ramey
WWD, FRIDAY, OCTOBER 24, 2003
Nasher Finds a Home for His Collection
A Richard Serra installation.
DALLAS — Raymond Nasher, well known in the retail community as the creator and
owner of prosperous North Park Center mall, unveiled another Dallas landmark
this week: the Nasher Sculpture Center.
The developer’s 20th-century collection of more than 300 pieces is so respected that
half a dozen top museums in New York, London, Washington, D.C., and other cities
sought its donation, even offering to build gardens to display it. Lucky for Dallas,
Nasher opted to keep the art trove here and build a suitably artful residence for it.
“What made me feel that Dallas was the right place was because of what it could
mean to Dallas on a global basis,” Nasher said in a phone interview. “It was time to
see if we couldn’t give something back to the city, since it had been important in the
growth of my children, lifestyle and business. Hopefully it will become the center
for modern sculpture in the world.”
Designed by Renzo Piano and costing $70 million, the center
is billed as the first urban museum devoted to the display, research and conservation of modern and contemporary sculpture. Piano created a sleek, symmetrical building of glass, steel
and travertine that glows with natural light, thanks to its specially designed aluminum perforated roof developed for the
site, which allows only northern sunlight to enter. Works by such
sculptors as Alexander Calder, Henri Matisse, Pablo Picasso and
Auguste Rodin stand on its blond oak floors.
Glass walls at the front and rear of the wide building enable
approaching visitors to gaze beyond the works inside to the expansive garden at the rear.
“I’m tremendously pleased with the results,” Nasher said.
“Renzo Piano is truly one of the greatest architects in the world,
and he knows more about art and exactly what is needed for the
art than anyone else. [Landscape architect] Peter Walker produced a beautiful garden. They seem to flow together perfectly,
so it is as if one is a building and the other is an area without a
roof. I feel very strongly about the indoor-outdoor aspect of the
building.”
Designed as an oasis for reflection, the lawn and its rows of
trees is dominated by huge metal sculptures by Joel Shapiro,
Mark di Suvero and Richard Serra, while smaller pieces such as
Picasso’s “Head of a Woman” will be swapped periodically for
other pieces.
Along the garden’s back wall is a “skyspace” by James Turrell
— a 26-foot, square black granite building with a 10-foot square
hole in the roof that frames the sky.
Nasher began buying art on a budget with his late wife, Patsy,
in 1950 in Mexico.
“When we started collecting we had very little funds and
would take vacations in Mexico and go to ancient sites, such as
Chichen Itza, and dig a bit and find a few things, and get to know
archaeologists and dealers,” Nasher recalled. “In those days, we
could buy superb pieces of clay sculpture from various regions
for a very small amount.
“Then in the late Fifties, I was in real estate development and
I decided that I wanted to incorporate art into the commercial
aspects of things that I was doing. Sculpture at that time was a
secondary kind of happening. Painting was always the first priority. Sculpture is something that we had grown to love from the
pre-Columbian, and also, sculpture can be placed outdoors.
“Since I was building a number of different developments, it
was mandatory that the art could be in an outdoor area. It was
also true that in those days a great sculpture was about a 10th or
so of the price of great paintings by the same artist. With the
funds that one had, it was much easier to get a Matisse or
Picasso or Brancusi at a 10th or 20th of the price of a painting.”
The Nashers studied art and artists by visiting museums,
dealers and art shows around the world, but they applied a simple “butterflies” rule to what they purchased.
“It’s a personal collection,” he noted. “We look at works of art
and we’re only interested in those pieces that really give us
some butterflies — that sense of understanding and stimulation,
25
the kind of thing you want to live with on a daily basis. It’s totally personal.”
Nasher is often asked about his favorite pieces and his reply is always the same.
“I say, ‘Do you have a favorite child?’ The true answer is that with works of art of
that nature they change every day or week,” he said. “You may look at a gorgeous
Matisse one day and it is so stimulating and heartrending, and the next day the interest could be David Smith’s ‘House in a Landscape’ or it could be a Picasso. It really does change almost on a daily basis.”
Nasher believes he was the first developer to place art in a shopping mall when
he opened North Park Center in 1965.
“When I built North Park, I wanted to be certain that it had the light and background and skylight to be able to graciously display sculpture and artworks so we
could expose people to art,” he explained. “So many people go through there on a
daily basis, and whether they liked the art or not, it was a question of exposure with
the hope that gradually they would go to museums.”
At the time, many people tried to talk him out of it.
“I did have a lot of opposition,” Nasher recalled. “People thought things could be
damaged and destroyed, but I felt strongly that sculpture could be exciting, rewarding and educational in a public place. Sometimes you have to have risk taking as a
part of your psyche, so I felt we would try it, and the end result has been that it is really the consumers who are the security people because if they saw anyone touching
a work of art, they would personally prevent it.”
Over the years, there has been some minor damage, such as scratches, “but it is
meaningless in relationship to the totaliMark di Suvero’s “Eviva Amore.”
ty,” he said.
Jonathan Borofsky’s
kinetic “Hammering
Man,” a striking piece
that has long been
displayed outside
North Park, has been
moved to the sculpture center’s garden.
There’s another retail
link to the center, as
well: Fashion fans are
buzzing about its
shop, since the buyer
is Mar y Bloom, the
tasteful founder and
former owner of the
Translations home,
gift and accessories
store.
— Holly Haber
Code
Cracker
2987453280
The industry
intelligence you
need to plan
your next move.
Go to
The news online at 12:01am EDT
6 continents, 11 bureaus, 203
reporters for unmatched coverage
Search the previous five issues of WWD online
24/7 access on your desktop, anytime, anywhere
WWD.com
first. insider. authoritative. global.
26
WWD, FRIDAY, OCTOBER 24, 2003
Nautica Sales Help VF Net Sara Lee Profits Slip 25%
tive in their orders. The ceo expects many to continue their cautious outlook into spring, and
noted VF’s replenishment program will help them in that regard: “When they need the goods,
we will have it for them.”
Driven by double-digit gains
at The North Face, sales in the
company’s outdoor coalition rose
15 percent in the quarter.
International jeans sales were
flat with last year’s levels, while
domestic jeans sales and imagewear sales each declined 6
percent. Global intimate apparel
sales were down 3 percent.
Eric Wiseman, chairman of
the sportswear coalition, said
one of the company’s top priorities is to stabilize Nautica’s
By Vicki M. Young
NEW YORK — VF Corp.’s thirdquarter profits were better than
the company expected, but softer than those of one year ago.
The Greensboro, N.C.-based
firm said Thursday that income
for the three months ended Oct. 4
declined by 2.3 percent to $125.3
million, or $1.14 a diluted share,
from $128.2 million, or $1.15, in
the same year-ago quarter. Sales
rose 2.5 percent to $1.44 billion
from $1.4 billion. The company
disclosed that Nautica, acquired
before the quarter’s final month,
contributed $72 million in sales
and 5 cents a share in earnings.
VF said the results were
boosted by sales in its core businesses and a profit contribution
from its recently acquired firm,
Nautica Enterprises Inc., that
were both stronger than anticipated. Additionally, the expected
sale of VF’s children’s playwear
business — and projected losses
associated with it — didn’t materialize, and the firm said it’s exploring other options.
Mackey McDonald, chairman
and chief executive officer, said
in a statement, “We were pleased
to see a pickup in sales toward
the end of the quarter, in line
with generally stronger sales at
retail, particularly in September.
We also are pleased with the contribution made by Nautica in the
quarter and are looking forward
to building Nautica as the foundation for our new sportswear
coalition.”
The ceo said during a conference call with Wall Street analysts that sales of “domestic
jeans fared better in the quarter
than we had expected.” He disclosed that while the European
jeans market remained challenging, the company’s Wrangler
[retailers] need the goods,
“weWhen
will have it for them.
”
— Mackey McDonald, VF Corp.
brand achieved market leadership in the men’s category in
Germany.
Executives at VF noted sales
of denim in the junior category
were weakening slightly. In response to analysts’ queries, they
said they’d experienced little impact from the introduction of Levi
Strauss & Co.’s Signature line at
Wal-Mart. Instead, they emphasized that Wrangler and Rider
brands are great products at
“good value” and VF is “ready to
compete with anybody out there.”
The ceo said VF has been reluctant to build up inventory because it isn’t yet confident about
a rebound in sales. While cooler
weather has helped, McDonald
said the firm is still waiting for
consistent signs that consumer
confidence is on the rise. Retailers, he said, are still conserva-
men’s business, including focusing on men’s sportswear and increasing the jeans business. A
new Nautica women’s collection
is being planned as well.
The company increased its
full-year earnings per share
guidance to $3.50 to $3.55 a
share, an increase of between 8
and 10 percent from the $3.24 a
share from continuing operations reported in 2002.
For the nine months, income
was $292.3 million, or $2.65 a diluted share, against a loss, principally due to a goodwill-related
account change, of $231.1 million, or $2.05, last year. Sales
inched up 1.3 percent to $3.82
billion from $3.77 billion.
Shares of VF gained $1.06, or
2.5 percent, to close at $42.83 in
New York Stock Exchange trading Thursday.
By Arnold J. Karr
NEW YORK — With retailers keeping tight reins on inventory levels, lower sales and profits in its
apparel operations helped reduce
Sara Lee Corp.’s first-quarter net
income by more than 25 percent.
In the quarter ended Sept.
27, the Chicago-based consumer
goods powerhouse registered
net income of $230 million, or 29
cents a diluted share, 25.4 percent below the year-ago mark of
$308 million, or 38 cents. The
earnings performance exceeded
consensus estimates by 3 cents,
but those had been lowered in
July following revised guidance
from the company. Sales rose 2.9
percent to $4.67 billion from
$4.53 billion in the corresponding period last year.
At the firm’s Intimates and
Underwear unit, operating income contracted 40.6 percent to
$127 million from $213 million, an
$86 million decline that was
greater than the $73 million total
drop in the operating income of
SL’s five business segments.
Revenues for Intimates and Underwear were down 5.3 percent to
$1.6 billion from $1.69 billion.
Steve McMillan, chairman
and chief executive of the firm,
said in a statement, “In Intimates
and Underwear, sales were
lower as our retail customers
continue to reduce inventory levels compared to a very robust
first quarter of last year, but we
expect inventories to normalize
and our sales to increase in the
coming six to nine months.”
Apparel operations’ share of
corporate operating income
dropped to 45.4 percent from 56.5
percent while share of revenue
declined to 34.4 percent from 37.3
percent. Unit volumes dropped 7
percent in apparel as all three
segments of the business — intimate apparel, knit products and
legwear — experienced identical
7 percent reductions.
The company cited continuing
declines in worldwide sales of
sheer hosiery and price decreases in the U.S. printables market
for apparel’s soft performance.
The steepest declines in unit volume were registered by European knit products (18 percent),
global sheer hosiery (17 percent)
and U.S. intimate apparel (11
percent). Of six apparel categories broken out by Sara Lee,
only the global sock market experienced an increase, rising 5 percent in the quarter.
Profitability was pressured
not only by lower volume, but
also by higher costs for pensions
and raw materials such as cotton, heavier promotional spending and the toll taken by restructuring activities, the firm said.
While benefits were derived
from Sara Lee’s recent restructuring actions, the company said
higher costs and “competitive
pricing in printables” are expected to continue throughout
the year. However, the company
expects year-end earnings per
share to increase to between
$1.51 and $1.61 from $1.50.
“Intimates and Underwear operating segment income will be
down for the year,” the company
cautioned, “although improving
on a year-over-year basis in the
second half as new product activity and a better market environment drive performance.”
As reported, the company
earlier this week made a series
of appointments in its apparel
unit, including the promotion of
Michael Flatow to the presidency of the new Intimates Group.
Bebe Up, Charlotte Russe Down in Quarter Reebok Shares Soar
On Rise in Earnings
By Jennifer Weitzman
NEW YORK — Kicking off the
earnings season for specialty
stores, youth-oriented Charlotte
Russe Holdings and Bebe Inc.
Thursday saw their profits turn
in different directions, although
both were upbeat about the holiday selling season.
With Bebe’s income up and
Charlotte Russe’s down, both
firms saw their earnings follow
their recent comparable-store
sales results.
For San Diego-based CR,
strong merchandise margins and
expense control helped produce
better-than-expected profits, but
net income still fell 3.2 percent to
$5.7 million, or 24 cents a diluted
share, for the three months
ended Sept. 27 from $5.9 million,
or 25 cents, in the year-ago quarter. The quarter’s results reflect
a 1 cent a share benefit from the
reversal of store closing costs.
Earnings easily beat average analysts’ estimates of 17 cents and
recent management guidance of
15 to 19 cents.
Sales during the quarter
grew 12.4 percent to $123 million from $109.4 million, offsetting a 9.5 percent comp decline.
“It is fair to say we are disappointed with our sales performance, but we are impressed with
the continued financial strength
of these two concepts,” Mark
Hoffman, chief executive, said of
Charlotte Russe and Rampage
on a conference call.
While Hoffman said he was
confident about holiday merchandise, he said he expects the current first quarter to be challenging. The company said its comp
trend has remained negative thus
far in October and said it expects
first-quarter earnings of 24 to 28
cents, below current Street expectations of 30 cents and the 32
cents reported last year
CR said lean inventories —
down 13.5 percent at the beginning of October — helped it
manage markdowns and protect
the bottom line during the slow
selling period, but it’s now building stock levels for holiday.
They’re now down just 5 percent
and should be up 2 to 3 percent
by December.
For the year, CR earnings
were sliced 50.9 percent to $11
million, or 47 cents a share, compared with earnings of 22.4 million, or 95 cents, reported in
2002. Sales for the 12 months increased 11.5 percent to $456.6
million from $409.4 million, but
fell 10.1 percent on a comp basis.
Brisbane, Calif.-based Bebe
said its first-quarter earnings
rose 18.6 percent to $6 million,
or 23 cents a diluted share, for
the period ended Sept. 30,
matching analysts’ earnings expectations. That compares with
$5.1 million, or 20 cents. Sales
for the three months rose 13.1
percent, to $83.6 million from
$73.8 million, and climbed 6.8
percent on a comp basis.
In addition, Bebe said it expects second-quarter earnings
to be in the range of 47 to 50
cents, compared with the 47
cents analysts expect and the 42
cents reported last year. October
and second-quarter comps are
projected to rise in the low- to
mid-single-digit range.
Manny Mashouf, chairman
and chief executive, said on a
conference call, “On the product side, we made improvements; in the store, we have rejuvenated and made it more exciting and impactful, and we
have added designers to the design team which is showing in
the product.”
However, he said while productivity improvements contributed to its on-plan inventory
levels, the deliveries were still
not on time.
Mashouf based his confidence
about holiday primarily on the
impact of new design personnel.
“We see the results of their contribution to the team that would
show in the November and December merchandise mix, and I
am feeling really good about it,”
he commented, adding that the
stores will have more suits in
their mix this holiday.
NEW YORK — Shares of Reebok
International Ltd. hit a 52-week
high Thursday after the firm,
aided by robust expansion in apparel, reported double-digit earnings growth in the third quarter.
For the three months ended
Sept. 30, the Canton, Mass.-based
athletic footwear and apparel
magnate saw earnings spike 17.4
percent to $62.7 million, or 96
cents a diluted share, besting Wall
Street’s consensus estimate by 3
cents. Comparatively, the company posted earnings of $53.4 million, or 81 cents, last year.
Total sales for the quarter increased 14.2 percent to $1.04 billion from $911.6 million a year
ago. In a statement, the company
acknowledged that fluctuations
in currency exchange rates had
worked to the benefit of sales
comparisons. According to the
company, on a constant dollar
basis, sales would have increased
approximately 10 percent.
After hitting a new high for
the year of $38.20 in midday trading, shares of the firm closed up
51 cents, or 1.4 percent, at $37.75
on the New York Stock Exchange.
Sales of Reebok branded apparel in the U.S. shot up 31.1 percent to $207.9 million compared
with $158.6 million last year.
International apparel sales were
up 11.8 percent to $203.2 million.
Ken Watchmaker, chief financial officer and executive vice
president, said on a conference
call, “What is definitely driving
the energy is the sports license
business.”
Apparel sales figures received a $17 million boost from
closeout sales. However, Watchmaker pointed out that this figure was equalized by $16 million
in cancellations. “The business
was slowing down. As we were
taking cancels, we were closing
out product and getting out. It
hurt sales,” said Watchmaker.
Paul Fireman, chairman and
chief executive officer, said the
company was likely to reap the
benefits of the ongoing reorganization of its apparel operations.
“We have consolidated our
apparel business, especially the
sports side, with our licensing
business,” said Fireman. We’ve
got a lot of growth left on that.”
For the nine months to date,
the company’s earnings increased
17.4 percent to $129.1 million, or
$1.99 a share, versus $110 million,
or $1.71 a share, last year.
Total sales for the ninemonth period jumped 11.7 percent to $2.64 billion from $2.37
billion last year.
— Ross Tucker
WWD, FRIDAY, OCTOBER 24, 2003
Private Label
Manufacturing
Skin & Hair Care/Body & Bath Care
Products made for you...
Spas, Salons & Fashion Lines
Call the Natural Products Experts
Visit our Factory
Orjene / Jason
Call: 718-937-2666
E-mail: [email protected]
Holiday Gift Certificate
Fashion Art Cards
Large 9" x 6" size printed with your
store name, address & phone number.
Includes matching envelopes & gift log.
www.art-with-style.com
PATTERNS, SAMPLES,
PRODUCTIONS
All lines,Any styles. Fine Fast Service.
Call Sherry 212-719-0622.
PATTERNS/SAMPLES
PRODUCTION
Samples & patterns. Full service shop
to the trade. Fine fast work.
212-869-2699
MURAD, INC., a leader in the fast growing doctor brand
skincare industry, is a world-renowned company dedicated
to building beauty through health. Widely acknowledged as
one of the country’s foremost authorities in skincare, Howard
Murad, M.D. has devoted his life to the science of internal
and external skincare. We are recruiting for the following:
EDUCATION MANAGER
This position is based in El Segundo, CA. Responsibilities
include: motivating/educating retail & professional staff at
Spa on protocols, assisting Director with new educational &
promotional modules/programs, updating existing written
material, creating new educational & promotional materials
(i.e. programs, brochuresupdating existing written material,
creating new educational & promotional materials (i.e. programs, brochures, etc.), and facilitating training to all Regional Educators on new/existing educational &/or promotional
programs. Must be a licensed Esthetician or Cosmetologist
with 5+ yrs. exp., preferably in a similar role in a
cosmetics/skincare company.
REGIONAL EDUCATORS
RESUMES THAT WORK! SINCE 1970
PROFESSIONAL RESUMES, INC.
60 E 42nd Street, NYC 10165
(212)697-1282/(800)221-4425
www.resumesforfashion.com
Accountant/Analyst to $65K
Sales & prop tax, GL, Degree requd,
ADP preferred.
[email protected]
914-478-3333
Bryant Pk Duplex 1100, 2000, 4500 FT.
20 Ft Ceilings - Great Windows/Views
SoHo-Sublet Penthouse 2000 FT
Prime Manhattan Jon 212-268-8043
Search-www.manhattanoffices.com
ACCOUNTS PAYABLE
NYC manufacturing company. Part
Time. Minimum 5 yrs experience.
Knowledge of computers.
Fax Resume to: 772-619-7994
Accounts Payable/Payroll to $35K
1 + yr exp, ADP exp preferred.
[email protected]
914-478-3333
Admin. Assistant
3750 SqFt
GREAT LIGHT * FULL FLOORS
IDEAL FOR SHWRM/OFC/DESIGN
FASHION CORE
BERNSTEIN RE
Richard Price
212-594-1414 x265
For Space in Garment Center
Helmsley-Spear, Inc.
212-880-0414
Showrooms & Lofts
BWAY
7TH AVE
SIDE STREETS
Great ’New’ Office Space Avail
ADAMS & CO. 212-679-5500
Leading global packaging accessories &
design corp. seeks Executive Assistant
to join a fast-paced environment. Candidates should be very organized w/a
professional phone manner, strong written
& verbal communication skills. Individual will be involved in all phases of
client & administrative support, including
order processing, customer follow-up,
and administrative/clerical duties. This
F/T position requires the individual to
manage phone calls for an executive,
prepare correspondences, liaison between
client and executive. Individual must
be detail oriented & Word/Excel proficient.
Knowledge of garment/fashion industry
preferred. Please E-mail resume & salary
requirements to: [email protected]
Admin
Due to expansion of Education team positions are available
in most regions. Responsibilities include: handling educational needs for all types of accounts; medi spa, spa, salon, dept.
stores, and specialty stores, supporting sales, conducting
Educational Seminars, as well as one on ones, trade shows
and promotions. Must be a licensed Esthetcian or Cosmetologist with 3+ yrs exp prior training exp., preferably in a
similar role in a cosmetics/skincare company.
Both positions require extensive travel as well as strong
verbal/written, presentation & PC skills (Word/PowerPoint).
Interested candidates please submit resume to:
[email protected]
NO PHONE CALLS PLEASE. EOE.
DESIGNER
Tween Sportswear Co., seeks talented
creative individual with 3-5 yrs. design
experience in Junior or 7-16 Girls
market. Must be able to develop product from beginning stages through
production and have a great eye for
color and trend. Must have knowledge
of Photoshop and Illustrator. Domestic
& Overseas travel required. Great
opportunity! Family atmosphere.
Fax resume to 212-221-7064.
Attn: Cathy
Designer Wanted
Better Sportswr Co. seeks exp. highly
motivated/detail-oriented design assoc.
for Prvt Lbl. 3-5 yrs exp needed. Able to
do flats, boards, specs, multi-task & a
team player. Fax to: 212-768-7651
FABRIC
COORDINATOR
Women’s contemporary dress and
sportswear company seeks experienced fabric merchandiser to source
fabrics from Far East and Europe.
Must have at least 5 yrs experience.
Fax resume to Lynn at 212-302-2399
Since 1967
PRODUCT DEVELOP.
W-I-N-S-T-O-N
ASSOCIATE
APPAREL STAFFING
DESIGN*SALES*MERCH
ADMIN*TECH*PRODUCTION
(212)557-5000
F: (212)986-8437
Apparel Staffing, Ltd.
See Career Openings
@ www.apparelstaffing.com
Fax Resume to (212) 302-1161
Colorist/Project Manager
Fast-paced Import/Export Textile Co.
seeks Colorist/Project Manager. Must
have great color sense, understand layout
and pitching. Work w/V.P. of Design &
customers. 7-10 yrs. exp. Portfolio a must.
Fax resume to S.K. at: 212-575-2660
Wanted for mens/boys swim-wear and
wovens importer communication skill
with overseas factories essential. 3
years
experience
required.
Fax
resume to 212-695-1050
PRODUCTION ASSISTANT
Exciting Oppty for detail-oriented person to do order processing, follow-up
and sample tracking. 2+ yrs. exp.
Fax resume 212-683-4038
COLOR/PRINT ANALYST PRODUCT MANAGER
SOURCING DIVISION
Women’s Mfg. seeks 4 plus years
industry experience. Responsibilities
include approving and tracking strike
off’s and Lab dips. Must have Textile
Design degree. Need experience in
communication with overseas and
domestic
vendors.
Excellent
organizational and computer skills.
Bi-lingual a plus.
Please fax resume to: 212-921-7713
ATTN: LauraD
Designer
Established junior import co. is seeking
a designer with min 2 yrs exp. who has
knowl. of the latest trend to design Jr.
bottoms. Knowl. of photoshop/ illustrator a plus. Great family atmosphere!
Please fax resume to 212-764-7245.
Merchandiser
Intimate & Lingerie private label
mfg, looking for merchandiser
with 2-3 years experience. Work
directly with major domestic
account with Merchandiser
Manager. Daily communication
with Overseas office and factory.
Technical knowledge, computer
literate with knowledge of Excel a
must.
Please fax or email resume with
salary requirements to
212 -219-9486 /
[email protected]
Leading childrenswear company is
seeking a highly motivated, detailoriented indiv to work in our Sourcing
Division. The candidate should have
min 3 yrs exp in production and sourcing. The candidate will maintain & handle vendor costing, line plans, style,
fabric & trim tracking, and seasonal
status reports. The candidate will
standardize & approve raw material
dvlpmt. Daily communication with
vendors. Responsible for maintaining
sample lines. Office skills required include a working knowl of AS400,
Microsoft Word & Excel.
Please e-mail your resume:
[email protected]
fax: 212-643-2826. No calls. EOE.
Exciting opportunities available
in all areas:
* WOVEN DESIGNER
* ASST DESIGNERS
* TECHNICAL DESIGNERS
We offer a competitive salary
and comprehensive, companypaid medical benefits package.
Please fax resume to:
(212) 632-4322. EOE M/F
SPEC TECHNICIAN
Women’s Mfg. seeks 4 plus years
industry experience. Strong knowledge and understanding of garment
construction fit and grading from development through production. Able
to run fittings independently. Close
interaction with design, sales and mer chandising on a daily basis. Ability to
translate designer’s sketches into
detailed specs, flat sketching skills to
highlight garment details or pattern
correction, a knowledge of developing
graded specs, and the capacity to
effectively manage multiple priorities
and meet deadlines.
Please fax resume to: 212-921-7713
ATTN: LauraD
SPEC TECHS,SPEC TECHS,SPEC TECHS
I NEED SPECH TECHS
[email protected] Call 212-947-3400
Tech Designer/Spec Person
For Jr. woven bottoms and Jr. plus.
Rapidly growing Co. Must be articulate
and detailed oriented. Pls. fax resume,
Attn. Dorene @ (212) 575-5311
27
MARITHE+FRANCOIS
GIRBAUD
We are searching for a professional
sales rep to handle our menswear
specialty store business and reside on
the WEST COAST. Must have strong
specialty store contact.
Please fax resume to: 212-967-4389
Flagship Madison Ave. boutique, specializing in fine jewelry & luxury accessories,
seeks qualified Sales Associates. Must
have experience in luxury goods. GIA
certified a plus. Please Fax resume to:
212-717-5800
Fine Jewelry
***APPAREL EMPLOYERS ***
Do you need exp’d DESIGNERS, PRODUCTION, ACCOUNTING, TECHNICAL etc. staff?
**CALL 973-564-9236 Jaral Fashion Agcy.**
Evening Bags & Jewelry
NY based high-end accessories line with
retail & wholesale presence, seeks NY
based Sales Rep with est’d. high-end
clientele. Great opportunity w/young co.
High commission; All support provided.
Please Fax resume to: 212-868-9899
Highly exp’d. Head of Distribution &
Logistics, including compliance, vendor/
customer relations, and charge-back
admin. for $250 million+ major moderate
mfrs., seeks similar position with growth
oriented company. Northeast location
preferred; Travel okay. Proven track record of dollar recovery. Call/E-mail Alan:
917-690-1005 / [email protected]
Cleanser
Boscia Purifying Cleansing Gel
Moisturizer
Neutrogena Healthy Defense
SPF 30 Daily Moisturizer
Sunscreen
Vichy Laboratoires Capital
Soleil SPF 30 Lotion
Shampoo
Nature’s Gate Organics Chamomile
and Lemon Verbena Shampoo
Conditioner
Matrix Sleek Look Deep
Moisture Masque
Styling Product
Frédéric Fekkai Protein
Rx Reparative Spray
Lip Color
Prada Beauty Shielding Balm
SPF 15 Lip/Tint
Foundation
Max Factor Facefinity
Foundation
Mascara
Tony & Tina Herbal
Eye Mascara
Nail Product
Elon Fre`e Moisturizing
Polish Remover
Congratulations to the winners of Health magazine’s
fifth annual
Healthy Beauty Awards!
Beauty or brains? We say, why not both! Check out Health’s
November issue honoring the ten best beauty products
of 2003, selected by a panel of leading dermatologists.
`