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BLUESTAR BUYS LIZ LANGE/2 MAGS 2007 AD PAGE NUMBERS/13Women’s
Wear Daily • The Retailers’ Daily Newspaper • November 16, 2007 •
$2.00
PHOT
O BY
JOH
N AQ
UINO
; STY
LED
BY M
EGAN
MCI
NTYR
E
Young at HeartWith its new patent-pending “youth
molecule,” Estée Lauder has come up with the latest weapon in
the battle against
aging. The new ingredient, Resveratrate, powers Ultimate Youth
Creme, the most
recent addition to Lauder’s venerable Re-Nutriv franchise.
Sources estimate that
it could do $7 million at retail in its fi rst year on counter.
For more, see page 6.
WWDFRIDAYBeauty
By Arthur Zaczkiewicz
Macroeconomic forces are taking a big toll on consumers, with
J.C. Penney and Kohl’s being the latest victims of a weaker
spending environment.
Hampered by softer sales and
gross margin rates, J.C. Penney Co. Inc. posted a 9.1 percent
decline in third-quarter earnings on softer sales, while Kohl’s
Corp. delivered third-quarter profits that fell 13.6 percent, but
on higher sales.
Due to the lackluster sales
trends, J.C. Penney lowered its fourth-quarter earnings outlook
and Kohl’s dropped its full-year earnings per share estimate. This
followed prior warnings from Macy’s Inc., Polo Ralph Lauren
More Warning Bells: Penney’s, Kohl’s Add to Holiday Anxiety
See Penney’s, Page 12
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WWD.COM2 WWD, FRIDAY, NOVEMBER 16, 2007
WWDFRIDAYBeauty
GENERALMacroeconomic forces are taking their toll on consumer
spending, with J.C. Penney and Kohl’s the latest victims of a
weaker spending environment.
Nike has signed a defi nitive agreement to sell Starter, its
licensed league apparel division, to Iconix Brand Group for $60
million in cash.
Jennifer Lopez and Yamamay have forged a licensing pact to
launch a high-end intimates line.
BEAUTY: Kate Winslet talks openly about her role as the face of
Lancôme’s venerable Trésor franchise.
My Voyage for Her, Nautica’s new fragrance, sets sail at
Dillard’s, with other stores to follow in January.
1457
10
● PANEL WARNS ON CHINA TRADE: The U.S.-China Economic and
Security Review Commission, a congressional advisory panel, said in
a report Thursday that China’s trade relationship with the U.S. is
“severely out of balance.” Among the 42 recommendations: Congress
should enact legislation imposing punitive duties on Chinese
imports through U.S. trade remedy law; the Bush administration
should bring a World Trade Organization case against China for
manipulat-ing its currency, and requiring U.S. companies to report
to the Commerce Department their receipt of any economic subsidy
from China.
● KELLWOOD PROMOTES POWERS: Kellwood Co. has named Stephen F.
Powers, president and chief executive offi cer of the Koret
division, as chief customer offi cer of its Lifestyle Alliance.
This is a new position for the new division of the $1.6 billion
vendor’s mainstream brands that includes Sag Harbor, Koret and
Briggs New York. In addition to working with re-tailers, Powers
will be responsible for Koret and Sag Harbor stores. Before joining
Kellwood in 2005, Powers served as exec-utive vice president of
women’s apparel for May Merchandising Corp., and served in various
senior management positions in the women’s business within May Co.
from 1980 to 2003. Based in Oakland, Calif., Powers will report to
Patrick J. Burns, group president of the Lifestyle Alliance.
● CHEAP CHIC GAINS: Hennes & Mauritz reported sales in
October accelerated 15 percent as the company opened more stores.
The Swedish fast-fashion giant said same-store sales in the month
gained 3 percent. H&M is banking on a one-off col-laboration
with Roberto Cavalli, which it launched Nov. 8, to boost sales this
month.
In Brief
Classifi ed
Advertisements.............................................................15
WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS
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“For 45 years, everyone thinks I love parties and to go out.
It’s all wrong. I love to stay home.’’
— Valentino
Quote of the Week
CFDA Fund Awards Rogan Gregory Top Prize
By Vicki M. Young
and Lisa Lockwood
NEW YORK — Liz Lange, the 10-year-old designer maternity
company, has a new parent.
The company was sold Thursday night to Bluestar Alliance for an
estimated $50 to $60 million, industry sources said.
Bluestar, led by Ralph Gindi and Joey Gabbay, recently
pur-chased Ron Chereskin, the men’s apparel brand. Bluestar also
owns Wellington Capital Group, where Gabbay is president.
Wellington last year acquired the Harvé Benard brand.
Neither Liz Lange nor Bluestar executives could be reached for
comment.
Lange, who started her fi rm in 1997 offering stylish, well-made
maternity clothes, struck a chord with celebrities such as Gwyneth
Paltrow and Sarah Jessica Parker, as well as regu-lar moms. The
company oper-ates three freestanding stores on Madison Avenue here,
North Beverly Drive in Beverly Hills and in Greenvale, N.Y. It also
has an e-commerce Web site.
In 2001, Lange joined with Nike to produce an exclusive line of
maternity athletic wear.
The next year, she signed an ex-clusive agreement with Target
Corp. for a less-expensive ma-ternity line while continuing upscale
distribution of her de-
signer maternity line.Industry sources estimate
Lange’s business generates $200 million in revenues, includ-ing
licensees. The designer has been eager to strike a deal with a
private equity fi rm for several years to aggressively expand both
her product line and free-standing stores. Sources said Lange plans
to close her existing stores in the fi rst half of 2008, and
re-open in new locations later in the year and in 2009 with
expanded product assort-ments for mothers and babies. She also
expects to branch into women’s ready-to-wear.
The author of “Liz Lange’s Maternity Style: How to Look Fabulous
During the Most Fashion-Challenged Time,” Lange also has
collaborated with Nikon on a limited edition Liz Lange camera.
In a speech last year to the fashion industry, Lange recalled
that she faced opposition from retailers in launching her
busi-ness. One told her women didn’t care about their appearance
during pregnancy because it only lasted nine months.
“No matter what anyone says, if you think you have a good idea,
you probably do…don’t let anyone tell you it can’t be done,” she
told the group.
Liz Lange Sold to Bluestar
By Marc Karimzadeh
NEW YORK — Three up-and-coming designers just got a sub-stantial
boost.
Rogan Gregory of Rogan has received the CFDA/Vogue Fashion Fund
Award, pocketing $200,000 and a year of mentoring from an industry
executive. The runners-up were Phillip Lim of 3.1 Phillip Lim and
jewelry de-signer Philip Crangi, who each will receive $50,000, as
well as
business mentors.The winners were announced
Thursday at the 7th on Sale gala in the 69th Regiment Armory
here, which benefi ted the CFDA/Vogue Initiative for HIV/AIDS. This
is the fourth edition of the fund, which has grown to be-come a key
facilitator of careers in fashion design.
The previous winners are Doo-Ri Chung, Trovata and Proenza
Schouler’s Lazaro Hernandez and Jack McCollough.
Runners-up include Derek Lam and Thom Browne, Rodarte’s Laura
and Kate Mulleavy and Thakoon Panichgul for Thakoon.
The finalists, whittled down from 101 applica-tions, were: Scott
Sternberg of Band of Outsiders, Erin Fetherston, Gabriel Asfour,
Angela Donhauser and Adi Gil of Threeasfour, Nunthirat Koi
Suwannagate of Koi, Lisa Mayock and Sophie Buhai of Vena Cava,
Michael Bastian and Victoria Bartlett of VPL.
The selection committee con-sisted of CFDA president Diane von
Furstenberg, executive di-rector Steven Kolb and associ-ate
director Lisa Smilor; Vogue editor in chief Anna Wintour and
fashion news director Sally Singer; Barneys New York vice president
and fashion direc-tor Julie Gilhart; Jeffrey presi-dent Jeffrey
Kalinsky; Theory president and founder Andrew Rosen; Coach
president and ex-ecutive creative director Reed Krakoff, and Gap
executive vice president of design Patrick Robinson.
Starting this year, the CFDA/Vogue Fashion Fund’s Business
Advisory Committee will pro-vide mentorship and support to all fi
nalists. The committee includes Calvin Klein Inc. presi-dent and
chief operating offi cer Tom Murry, NRDC president Richard Baker,
Cole Haan chief executive offi cer James Seuss, Diane von
Furstenberg chief fi -nancial offi cer Paul Aberasturi and Liz
Claiborne Inc. execu-tive vice president of partnered brands David
McTague.
The fund is underwritten by Barneys New York, Coach, Juicy
Couture, Kellwood Co., Nordstrom, Theory and Vogue.
An inside glimpse of the 10 finalists can be viewed on
ShopVogue.com, beginning today.
Liz Lange
-
Shop
now
at e
stee
laud
er.c
om
© 2
007
Esté
e La
uder
Inc.
This little brown bottle holds the future of your skin.
Advanced Night RepairProtective Recovery Complex
Women around the world can attest to the remarkable powers of
this patented* formula. Now, with just a few drops applied every
night, you really can help repair the appearance of skin damaged by
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skin’s natural protectants.
Think of it as “insurance” for skin that stands the test of
time.
*U.S. patented. International patents pending.
NOTICE
-
WWD.COM4 WWD, FRIDAY, NOVEMBER 16, 2007
By Nina Jones
LONDON — Agent Provocateur is planning an international retail
rollout concen-trated in the U.S. and Asia with a fresh cash
injection from new investors 3i.
On Thursday, 3i said it had acquired a majority stake in the
high-end lin-gerie company for an estimated 60 million pounds, or
$123 million at current exchange.
“The company has a fantastic reputation and is already well
established in Europe…[and] we believe there is enormous potential
for the business to grow,” said Jennifer Dunstan, of 3i partner
buyouts.
Joseph Corre and Serena Rees, who founded the racy lingerie
brand 13 years ago, will continue to hold minority stakes in the
company. Corre, who is Vivienne Westwood’s son, will stay on as
creative director of Agent Provocateur. A spokes-woman for the
company said Rees will leave “to pursue new opportunities.” The two
founded the company when they were married, but have since
split.
The investment fund has appointed Stuart Rose, chairman of The
Hamleys Group and a former deputy chairman of The Body Shop, as
chairman of the brand. (He is not related to Stuart Rose, chief
executive of Marks & Spencer plc). Garry Hogarth, a former
consultant at the fi rm, has been named ceo.
“For the past 14 years, we’ve grown very organically,” Corre
told WWD. “We then got to the size and scale where we needed to
springboard. Because of 3i’s size,
they’re able to have more fl exibility with their in-vestments,
and they have a strong [international] network, that can help us in
a practical way.”
Corre added that ter-ritories such as Japan were high on the
compa-ny’s expansion agenda. “The whole psyche has changed there in
the past 14 years — lingerie used to be sold there by peo-ple doing
private home sales,” he said.
Since Agent Provocateur opened its first boudoir-inspired store
in London’s
Soho in 1994, fi lled with silk and lace lingerie, garter belts
and silk stockings, it’s become a byword for risqué glamour. Kate
Moss, Kylie Minogue, Maggie Gyllenhaal and Catherine Bailey have
all appeared in its advertising campaigns. The company currently
has 35 stand-alone stores and shop-in-shop units in the U.K., the
U.S., Asia, Europe and the Middle East. According to industry
sources, the brand’s sales in its latest fi scal year to 2007 were
about 25 million pounds, or $51 million.
“It’s quite a small brand that’s been punch-ing above its
weight,” said George Wallace, ceo of retail analysts MHE Retail.
“In terms of the scale of the company, it’s not that big, but the
image and awareness of the brand are massive. It’s a very valuable
brand that’s a long way from realizing its potential.”
Wallace added that 3i’s “fi nancial re-sources and potential
strategic input” made the two companies a good match.
Meanwhile, Maureen Hinton, lead ana-lyst at Verdict Research,
said that Rees’ departure wouldn’t adversely affect the brand. “I
don’t think it’s an issue,” said Hinton. “Apart from those in the
know, the brand isn’t really associated with a designer.”
By Constance Haisma-Kwok
HONG KONG — Trading in shares of Joyce Boutique Holdings Ltd.
was sus-pended Thursday pending announcement of a proposed
privatization plan, according to documents filed with the Hong Kong
Stock Exchange.
The move came one day after the Ma family revealed their
resignations from the company, effective Monday. The action, by
Wheelock & Co. chairman Peter Woo, who controls 52 percent of
the company (compared with the Ma family’s holding of 23 percent),
has been directly linked to lackluster sales at the luxury
retailer.
Joyce’s net profi t for the year to March dropped 31.1 percent
to 51 million Hong Kong dollars, or $6.5 million, from 74 million
Hong Kong dollars, or $9.5 million, last year. Sales grew 4.6
percent to 790.4 million Hong Kong dollars, or $101.5 million. The
company has attributed its fi nancial diffi culties to ris-ing
rents and the strong euro.
Shares of Joyce Boutique Holdings had risen 13.8 percent earlier
in the year but dropped to 37 Hong Kong cents, or 5 cents, before
trading was suspended.
In 1999 Woo took then loss-making Lane Crawford private in a
similar move. At the time, Lane Crawford reported an operating loss
of 54.5 million Hong Kong dollars, or $7 million, for the fi rst
half of the year.
NEW YORK — After years of champion-ing fashion designers and
artists, Nadja Swarovski and Frank Doroff were hon-ored Wednesday
by the Museum of Arts & Design here with its Visionaries!
Awards.
Dutch designer Marcel Wanders and entrepreneur Ella
Fontanals-Cisneros also received awards at the museum’s 14th annual
gala at Pier Sixty, which was attended by 750 people and raised
$1.7 million.
The museum, formerly known as the American Craft Museum, is
sprucing up its image and plans to move into a new home at 2
Columbus Circle here in September.
Swarovski, vice president of interna-tional communications for
the crystal business that bears her family’s name, said that when
she heard news of the award, “I thought, ‘My gosh, is it even
deserved?’ I live vicariously through designers who are doing so
much amazing work.”
The honoree, whose mother, Danna, and grandfather, Robert
Strieter, at-tended the festivities, had some fun at one guest’s
expense. With a baby due in March, Swarovski pulled a poker face
and responded, “No,” when asked if she was pregnant.
In terms of business additions, Swarovski plans to continue with
its de-signer collaborations.
Doroff, senior executive vice presi-dent and general merchandise
manager of Bloomingdale’s, described himself as “more the guy who
likes to stay in the back-ground.” He said the retailer will
continue to fasten its ties to the art world — some-thing
Bloomingdale’s did through its fall advertising — but declined to
elaborate.
In general, the worlds of fashion and art will only get closer,
he said. “I think
discovering talent inextricably links the fashion industry and
the art industry.”
Wanders’ appearance in Gap’s fall ad-vertising campaign
supported that idea. But the designer said he has not been swept
away by the exposure. “We get requests regularly, but I’m trying to
be a designer. This was really cool photog-raphy and of course I
thought it would be great fun, so why not? But it is not my
intention to become a model.”
He will, however, be the host of a new design-lifestyle program
on the BBC set to make its debut next fall. Collaborations with “a
very important jewelry company in the U.S. and a makeup company”
are also in the works, he said.
“I’m in a serious business….To get a prize in New York from the
American people is kind of important to me,” Wanders said.
— Rosemary Feitelberg
By Lisa Lockwood
NEW YORK — Iconix Brand Group is deepening its ties to
Wal-Mart.On Thursday, the company said it had entered a defi nitive
agreement to purchase
the Starter brand from Nike Inc. for $60 million in cash. The
deal is expected to close next month.
Starter, which began in 1971, is known for its branded and
licensed league ap-parel, and currently has licensed several
manufacturers and wholesalers that sell primarily to Wal-Mart in
the U.S., Canada and Mexico.
Nike bought the Starter properties in August 2004 for $43
million as part of a plan to tap into the mass channel. Starter
became part of Nike’s Exeter Brands Group, which also includes
Shaq/Dunkman and Tailwind, and generates about $40 million in
wholesale and licensed revenues. Starter accounts for the bulk of
the sales. In the past year, Nike pulled back its Starter footwear,
and focused more on apparel.
Nike will continue to manage the Shaq business until the master
license ex-pires in September, and Nike has mutually agreed with
Payless not to continue the Tailwind business beyond spring,
according to a Nike spokesman.
Nike said it decided to sell Starter since it had less growth
prospects than its other subsidiaries, such as Converse, Cole Haan,
Hurley and Nike Golf.
Iconix, which is headed by Neil Cole, chairman and chief
executive offi cer, fore-casts that Starter’s 2008 royalty revenue
will be about $18 million worldwide. Cole pointed out that the
acquisition of Starter diversifi es Iconix’s portfolio into
athletic apparel, team sports and athletic footwear. He said the
company is working on a mul-tifaceted strategy, including signing
several major professional sports fi gures.
Dottie Mattison, senior vice president and general merchandise
manager for Wal-Mart, said in a statement, “Our customers have
responded very positively to our athletic apparel and footwear
brands at value price points. Starter is one of our most powerful
brands, both in terms of its heritage and the range of different
categories it covers.”
Among Iconix’s holdings are Danskin Now and OP, both of which
are licensed to Wal-Mart.
Swarovski, Doroff Honored as Visionaries
3i Buys Agent Provocateur,Brand Gears Up for Growth
Joyce Shares on Hold After Filing
Iconix, Nike Cut $60M Deal for Starter
PHOT
OS B
Y ST
EVE
EICH
NER
Marcel Wanders and Nanine Linning with his work.
Nadja Swarovski fl anked by her grandfather, Robert Strieter,
and mother, Danna.
Frank Doroff
Art Reiner and Michael Gould
Looks from Agent Provocateur.
-
WWD.COM5WWD, FRIDAY, NOVEMBER 16, 2007
By Emilie Marsh
PARIS — Carlos Miele hopes to attract many bees to his fashion
hive here.
Miele, whose name translates from French or Italian as “honey,”
inaugurated his debut European boutique at 380 Rue Saint-Honoré on
Wednesday.
“Paris is the most important fashion capital in the world,” said
the Brazilian designer, whose retail neighbors include John
Galliano, Chanel and Audemars-Piguet. “It’s an anthropological
adventure for a Brazilian designer to deepen his knowledge of such
different cities as Paris and New York.”
For the Paris store, Miele called on architect Hani Rashid,
whose de-sign of Miele’s store in Manhattan’s Meatpacking District
won “store of the year” award from the International Biennial of
Architecture and Design.
“The design of the new Paris fl agship was inspired by a
combination of infl u-ences, including Brazilian Expressionist
modern architecture, the French Baroque and Parisian Art Nouveau,
all tempered by the precision inherent in new technological means
of manufacture and design,” said Rashid.
“Hani Rashid and I worked together to devel-op more of an art
space than a traditional retail
store,” added Miele.Spread over two fl oors and 750 square
feet,
the boutique’s glossy white walls, ovular mir-rored pillars and
organic sculptures create a liquid-like feel, which serves as
backdrop for Miele’s creations. The brand’s signature collec-tion
is housed on the ground fl oor, while a diffu-sion line is on
display upstairs.
Miele, who said he had his eyes on London
and Milan for his next European openings, said he expects the
store to register sales of about $2 million in its fi rst year.
With the fl agship launch and 20 freestanding Miele store openings
sched-uled for next year, the designer expects sales to more than
triple to $25 million.
DIOR CRUISIN’: Dior made its annual Cruise stop in Los Angeles
this week with back-to-back in-store events in its Rodeo Drive
boutique. On Tuesday, along with C magazine, the company hosted a
lunch for Step Up Women’s Network for which the unoffi cial dress
code was white. “I didn’t get the memo,” one of the many black-clad
guests remarked. But singletons Jamie Tisch and Shiva Rose
McDermott did, most likely tipped off by white-clad Katherine Ross.
The next night was a fete for Dior’s 60th Anniversary tome, hosted
by the Los Angeles County Museum of Art Costume Council. Instead of
the usual fashion plates, photo-shy philanthropists like Rosalind
and Hal Millstone mingled with models.
SCENT OF EVE: R&B star Eve was on hand at Thursday’s
celebration for the MAC AIDS Foundation, which has raised $100
million to help fi ght HIV and AIDS around the world. Eve made a
guest appearance at MAC’s Upper West Side store with fellow Viva
Glam spokeswoman Dita Von Teese and said her own scent is in the
works. “I can’t wait to do a fragrance. I’m sure it will happen
soon,” said Eve. “I not only want to meet the nose, but I want to
be the nose. I want to be that person who’s in there putting stuff
in the little bottles. I’m obsessed with smells.” Although she
doesn’t know quite yet the overall theme of her fi rst fragrance,
she already has an idea what it will smell like: “I’m a fl oral
person. I like something not too heavy, but something that lasts.”
Von Teese isn’t working on a fragrance but has a new beauty book
planned for release late next year. “I wanted a rule-breaking
beauty book that’s about retro glamour and eccentric makeup — a
book that teaches you how to put it on,” said Von Teese.
HEY BIG SPENDERS: Five individuals with bucks to burn peeled off
a total of $2.7 million in three minutes fl at to buy fi ve of the
fi rst-ever Mercedes-Benz SLR McLaren Roadster convertibles. Their
route? A holiday promotion staged at 2 p.m. on Wednesday by Saks
Fifth Avenue, which offered the luxury cars for $542,000 apiece and
donated $10,000 of the proceeds from each of the fi ve vehicles
purchased to St. Jude Children’s Research Hospital in Memphis. In
addition to the limited edition Mercedes, the half-million or so
dished out by the gift buyers will bring them a trip to
Monaco for the 2008 Formula One race, a helicopter ride from
Monaco to Provence, France, for private lessons from the
professionals at the Circuit Paul Ricard racetrack, plus
accommodations and travel.
The fi ve cars, produced exclusively for Saks, feature a crystal
palladium gray exterior, a copper, silver arrow leather interior
and drew design inspiration for a race-car theme from an
illustration by a child at St. Jude’s — one of several children’s
pictures that prompted the offer of fi ve over-the-top gifts in the
Saks catalogue “Snow or Never.”
“I was absolutely fl oored,” Terron Schaefer, group senior vice
president of creative and marketing at Saks Fifth Avenue, said of
the speed at which the Mercedes-Benz convertibles were snapped up.
And they’re due to be delivered by Christmas Day.
McHUSBAND: Liz Claiborne Inc. executives met in Kate Spade’s
SoHo store Thursday morning, welcoming Deborah Lloyd in as the
power brand’s new creative director. But Claiborne chief executive
offi cer William L. McComb couldn’t help mixing business with
pleasure. “I can’t go to one of our stores without picking up gifts
for my wife,” McComb said, nodding at the three giant Kate Spade
shopping bags he toted out of the store.
WHAT’S IN A NAME: Tinsley Mortimer’s friends were represented in
both body and bag at the Samantha Thavasa luncheon last week that
celebrated the socialite-cum-designer’s fi rst year with the
Japanese company. “I named all of my handbags after my friends,”
said Mortimer, clad in a look from her upcoming ready-to-wear line
with the fi rm. “I have the Eleanor, the Lauren, the Fabiola — and
I am so nervous because all the girls are going to see their
bags
for the fi rst time today and I hope they like them.” And for
those afraid about looking like Ylvisaker or Beracasa, Mortimer
added, “But I didn’t design the bags based on their individual
style, I just used their names.”
Flanked by her fellow gals about town along with Samantha
Thavasa director of business operations Tobias Buschmann, Mortimer
hosted the affair and shopping event in the John Jacob Astor
Library at the St. Regis Hotel in New York. And while some might
think all she does is go out and party, she insisted she just fi
nished a year of hard work. “I learned a lot this year,” she said.
“I learned to be true to myself and try not to design based on the
opinions of others. I learned to trust myself. You never know how
something is going to turn out, but you have to stick to your
instinct.”
PARIS — L’Oréal has inked a deal to acquire Turkish hair care
com-pany Canan, the French beauty giant announced Thursday.
Istanbul-based Canan ranks fourth among mass market hair care
brands in Turkey, generating sales of 26 million euros, or $32.6
mil-lion at average exchange, last year, mostly through its Ipek
hair care brand, according to L’Oréal.
“The Turkish cosmetics market is expanding strongly and has a
very large growth potential,” said Patrick Rabain, president of
L’Oréal’s consumer products division, in a statement.
“The acquisition will bolster our positions in hair care
products, the largest segment in the market,” Rabain continued.
“With its commercial dynamism and its extensive presence in
retailing chan-nels, Canan will also accelerate the development of
the division’s other brands.”
The acquisition comprises Canan Kosmetik, which manufactures
Ipek hair, body, skin and baby care products as well as Parmex nail
polish remover; Canan Pazarlama, and Seda Plastik, an affi liate
company that produces Canan’s plastic packaging.
Canan will be consolidated when the transaction becomes fi nal
following customary governmental review, including anti-trust
clearance.
— Ellen Groves
MILAN — Jennifer Lopez and inner-wear brand Yamamay have become
intimate partners.
Through the celeb’s Sweetface Fashion Co., Lopez has signed a
three-year licensing pact with Inticom Spa, an Italian lingerie and
swimwear man-ufacturer, to launch a high-end inner-wear line called
JLO for Yamamay.
Inticom is the parent company of Yamamay, an edgy and
inexpensive brand that has grown exponentially since it was
launched six years ago.
The collection was launched Thursday at Yamamay’s 500 stores
worldwide and at 30 European out-posts of the JLO Lifestyle Store.
It also will be available on the Web site yamamay.com.
Infused with Latino sensuality, the collection targets
con-sumers with a lineup of matching sets, corsets and at-home
wear. Some 350,000 pieces were produced for the fi rst col-lection.
First-year sales are estimated at $10 million, said Gianluigi
Cimmino, chief executive offi cer at Inticom.
“This is a dream come true for us. Many women identify
themselves with Lopez because she is a more reachable role model
compared to skinny models. This line was conceived for special
occasions,” said Cimmino.
Most pieces feature intricate pleating, sensual cuts and
rhine-stone and stone detailing on silk satin, silk georgette,
tulle and che-nille. The color palette includes black, red, silver
and electric blue. Retail prices range from $14 for a thong to $46
for bra-and-panty sets, and $86 for a chenille tracksuit with stone
decorations.
Since Cimmino and Rita Garda di Samarate founded Inticom in
2001, the company has grown rapidly, with 2007 sales of $146
million, a 30 percent hike over last year.
— Alessandra Ilari
Fashion Scoops
MILAN — With a bash for 300 guests, Prince Albert II feted the
launch of Montblanc’s limited edi-tion fountain pen in honor of his
late father, Prince Rainier III.
At Monte Carlo’s Sporting Club on Thursday night, the prince
welcomed guests including Sophie Dahl, Helena Christensen, actress
Eva Green and actor Christopher Lee. Lyrical singer Katherine
Jenkins performed to the notes of renowned Chinese pianist Lang
Lang.
“Without any doubt, my fa-ther would have appreciated this
object of rare quality. By acquiring this unique creation, you
share the values of the prin-cipality, where prosperity is combined
with humanity,” said the prince.
Only 81 of the pens will be produced, in representation of the
age reached by the sover-eign. The 18-karat white gold pen is
stud-ded with eight carats worth of dia-
monds and rubies, assembled to replicate the red and white
lozenges on the shield of the Grimaldi coat of arms.
The grid pattern was ob-tained with 996 diamonds and 92 rubies,
while a mother-of-pearl Montblanc star crowns the cap.
The precious writing instru-ment costs $293,000. Five pens were
snapped up at the party by deep-pocketed guests, none of whom were
revealed. The re-maining 76 can be ordered at Montblanc boutiques
worldwide.
Fifty-one percent of the sales will be channeled into the
Princess Grace Foundation, which was established by the late
princess in 1964 to sup-port cultural and hu-manitarian
projects.
— A.I.
Miele Opens First Shop in Europe
J.Lo Enters Innerwear Market
L’Oréal Purchases Canan
Gala Fetes Montblanc Pen
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A view of the new Carlos Miele store in Paris.
Tinsley Mortimer
Jennifer Lopez
The Montblanc pen honoring Prince Rainier III.
Jennifer Lopez
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By Matthew W. Evans
NEW YORK — As fragrance marketers gear up for the holiday season
— when the in-dustry generates about 60 per-cent of its sales for
the year — months of declining consumer confidence are creating a
chal-lenging environment, panel-ists at a Fragrance Foundation
state of the industry luncheon said Wednesday.
Still, there is a bright spot: While consumers’ “willingness to
spend is somewhat off due to consumer confi dence numbers,” said
panelist Lynn Franco, di-rector of The Conference Board Consumer
Research Center, their “ability to spend is still
intact” thanks to low unemploy-ment and the addition of jobs
since the summer.
The Consumer Confi dence Index slipped to 95.6 — the lowest
reading since hur-ricanes Katrina and Rita two years ago — from
99.5 in September. However, employ-ers added 166,000 jobs to
pay-rolls in October, about double economists’ expectations, and
the unemployment rate last month was unchanged from September at
4.7 percent.
“Personal income growth is the silver lining,” said Franco, who
was joined on the panel by equity analyst Christopher Ferrara, who
is senior direc-tor at Merrill Lynch; Gilbert
Harrison, chairman and chief executive offi cer of Financo Inc.,
and moderator Darby Dunn, who is a reporter with CNBC.
Harrison noted that unsea-sonably warm weather, which has been
seen this fall, “affects results” and “retailers are cut-ting
fourth-quarter forecasts due to the weather.”
Macy’s Inc., the nation’s largest department store chain, said
Wednesday its same-store sales for the fourth quarter could range
between a 2 per-cent decline and a 1 percent increase, totaling
$8.7 billion to $8.9 billion. For the year, sales are projected to
fall by between 0.3 percent and 1.3 percent, or $26.4 billion and
$26.6 billion.
Despite the sobering data, Harrison is optimistic. “The National
Retail Federation is talking about a 4 percent in-crease in sales,
but I think it will be more,” he said. “The consumer is optimistic.
They like to spend.”
Dunn pointed to a recent poll that said 72 percent of 1,000
consumers surveyed said they would spend the same this year as they
did last year, or about $1,100. Furthermore, 42 percent of them
said they would spend for a fragrance.
Harrison contended that “impulse purchases and hot products are
critical to suc-cess,” adding that although people are looking for
a unique product offering, the fragrance industry all too often
comes up with the “same old stuff.”
In order to spur results, Harrison argued, the fragrance
industry should decrease its dependence on department stores, its
“lifeblood for many, many years,” by expanding across retail
channels or by making acquisitions related to other channels.
According to Harrison, 60 percent of consumers plan to shop in
the discount store channel, while 26 percent plan to shop in
specialty stores and more than 30 percent plan to
shop in department stores.“The department store is not
where consumers are spend-ing their money today,” said Harrison,
who added that “de-partment stores have lost tre-mendous traction”
as specialty stores like Sephora and Ulta have expanded. Also,
there has been a “shift toward mass fra-grances,” as prestige
scents have ended up in the mass market.
Beauty sales in the mass market, which were flat in 2004, have
seen growth of 4 percent more recently, accord-ing to Ferrara. In
the prestige market, growth of 4 percent in the 2004 to 2005 period
has tempered and is showing a fl at to 1 percent growth.
While department stores have held market share in color
cosmetics, Ferrara said, market share in fragrance and skin care
has declined by 6 percent-age points, dollars that have shifted to
the mass market.
“Due to the launch of pres-tige fragrances in mass, women are
changing the places they shop,” said Ferrara. On the skin care
side, he said, mass brands like Procter & Gamble’s Olay have
taken market share from the prestige market.
Ferrara said prestige play-ers have experienced a “higher cost
of doing business” in the past fi ve years, as sales have been fl
at or slightly up, while spending on advertising has risen 26
percent. He indicated the short-lived nature of celeb-rity scents
hasn’t helped.
However, because there are higher gross margins in the beau-ty
industry, Ferrara said, point-
ing to margins of up to 75 percent at Lauder, beauty fi rms
“tend to weather the storm better.”
Harrison added that while celebrity scents account for 23
percent of the prestige fragrance business, their longevity is an
issue. Designer scents, he said, such as those from Tom Ford and
Vera Wang, “seem to have a bigger impact than celebrity.”
“The conundrum the [beau-ty] industry is facing,” said Harrison,
is that it spends so much money on launching new fragrances. But
“if you stop the launches, what happens to the existing
[inventory]? The con-sumer wants something new.”
Ferrara contended that in-vestors are comparing house-hold
manufacturers with beau-ty fi rms as companies like P&G,
(which, he said, does about $2.5 billion in sales with its prestige
fragrance brands) get deeper into the beauty business.
In the long term, according to Ferrara, investors will de-mand
that such fi rms balance “process-driven, fi nancial dis-cipline”
with the “art” of mak-ing aspirational products like prestige
fragrances in order to maximize profi tability. He indi-cated that
the Estée Lauder Cos. potentially took a step in this direction
last week when it an-nounced Fabrizio Freda, a P&G executive,
is in line to become Lauder’s ceo in two years.
“The greatest risk to the prestige [market], more than product
effi cacy,” said Ferrara, is “a greater emphasis” on cost than on
the excitement a prod-uct can create. “It’s up to the players to fi
nd a balance.”
Estée Lauder has injected new blood into its most venerable
antiaging franchise with what the com-pany bills as a new “youth
molecule.”
The molecule, Resveratrate, is the key ingredient in Re-Nutriv
Ultimate Youth Creme, the latest addition to the brand’s iconic
Re-Nutriv franchise.
“Spring 2008 marks the 50th year of Re-Nutriv, which was created
by Mrs. Estée Lauder in 1958,” said Elana Drell-Szyfer, senior vice
president of global marketing for Estée Lauder. “With every new
skin care innovation, the brand has evolved, and with Resveratrate,
we be-lieve that we’re offering a scientifi c breakthrough.”
The molecule was inspired at least in part by re-search done by
David Sinclair, Ph.D., of Harvard Medical School, and Leonard
Guarente, Ph.D., of the Massachusetts Institute of Technology, on
sirtuin en-zymes in the skin and how they infl uence cell
longevity, said Daniel Maes, vice president of global research and
development for Estée Lauder.
“Resveratrate takes resveratrol to the next level,” said Maes.
While resveratrol, a widely used antioxidant, is effective, it also
has a number of limitations, said Maes, including limited
solubility and instability in high concentra-tions. Where Lauder’s
version — eight years in the making — differs is in its biomimetic
(skin-friendly) quality, which allows the molecule to penetrate
more deeply into the skin, creating a “reservoir” for the skin to
draw upon throughout the day, explained Maes.
“If cells divide too fast, they die. If you slow down the cycle,
you are making it pos-sible for the DNA to repair itself and
increasing cell survival sixfold,” he said.
Another key ingredient is Re-Nutriv Protective Ferment, based on
a deep-sea organism found in the Gulf of California. The organism
is said to protect the skin’s detoxifying enzymes, allowing the
skin to main-tain a youthful appearance.
The formula also includes a South Sea pearl-mica-silica
combination for an immediate brightening ef-fect after application,
as well as camelia sativa oil, said to improve skin’s
elasticity.
Ultimate Youth Creme will retail for $250 for 1.7 oz. Its target
market is a woman in her mid-30s.
Ultimate Youth Creme will be available in January in about 170
U.S. specialty store doors, including Neiman Marcus, Saks Fifth
Avenue, Bloomingdale’s and Bergdorf Goodman, and it will roll out
globally beginning in February. National advertising, will break in
February fashion, beauty and lifestyle magazines. The fi rst
month’s advertising will be an advertorial featuring a product shot
and an explanation of the molecule, and subsequent advertising will
feature Carolyn Murphy, said Charisse
Ford, vice president of global skin care marketing for the
Lauder brand. Online marketing also is planned, she noted, and more
than 300,000 samples will be distributed at launch.
While none of the executives would discuss sales projections or
advertising bud-gets, industry sources estimated that Ultimate
Youth Creme would do at least $7 million at retail in its fi rst
year on counter, and that about $2 million would be spent on
advertising and promotion.
— Julie Naughton
6 WWD, FRIDAY, NOVEMBER 16, 2007
The Beauty Report
Estée Lauder’s New Prescription for Youth
Experts Say Scent Industry Faces Challenges
One of the Re-Nutriv Ultimate Youth Creme ads.
Gilbert Harrison, Darby Dunn, Lynn Franco, Rochelle Bloom,
president of the Fragrance Foundation, and Christopher Ferrara.
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7WWD, FRIDAY, NOVEMBER 16, 2007
WWD.COM
By Julie Naughton and Pete Born
Some actors draw the line at mixing art and com-merce, but Kate
Winslet isn’t one of them. “In the last few years, there don’t seem
to be any rules
around it anymore,” said Winslet during an interview about her
role as the new face of Lancôme’s venerable Trésor franchise, her
fi rst beauty deal. “I remember fi ve or six years ago, it was
really a big deal to be the face of a campaign or a spokesperson
for a particular brand name. Now, it just doesn’t seem to matter so
much.”
Not that Winslet would particularly care if it did. Like many of
the characters she has por-trayed, Winslet is fi ercely independent
and marches to the beat of her own drummer — she has even recorded
a duet with Weird Al Yankovic entitled “I Need a Nap.”
Still, she doesn’t take her status for grant-ed. “I do feel
unbelievably privileged that I’m in a place where I get to choose,”
she said. “It’s a position that people dream of being in, and I
don’t take it lightly.”
What she cares most about: “As an indi-vidual, to hang on to
some sense of mystery — which in this world that we live in now
that is so obsessed with celebrity, I think it’s harder to hang on
to who you really are,” she said.
And Winslet has a sensible way for avoid-ing that type of
neurosis: She refuses to read anything written about her. “First of
all, I don’t really know what’s written about me because I don’t
look at any of it,” she said. “I don’t read reviews or other
things. How would you sur-vive in this crazy world if you read
everything that’s written about you? I’m blissfully un-aware. Maybe
I’d be a different person if I did listen to what they were
saying.”
That conviction has made it easy to say that a Kate
Winslet-branded fragrance is highly unlikely. “I wouldn’t like to
have a Kate Winslet fragrance, no. It’s just not my style. It’s not
my thing,” she said.
“As an actor, it’s an enormous privilege to be asked to be a
part of things like [the Trésor campaign], and I guess it just felt
like the right time for me,” said Winslet. Print advertising began
running in September books; a TV campaign will follow for the
holiday season. Sources say Trésor’s busi-ness has risen 20 percent
since Winslet’s ads began appearing. Trésor’s sales in the U.S.
have been estimated at $40 million retail for this year. None of
the executives would discuss what Winslet is being paid for the
campaign or what Lancôme is spending to place it, but industry
sources estimated that Winslet is being paid at least $5 million
over three years for her work on the campaign, and that Lancôme is
spending upward of $10 million to place it in the U.S. alone.
“Kate is an exquisite ambassador for Lancôme be-cause she truly
embodies what Trésor is all about,” said Odile Roujol, global
president of Lancôme. “She is romantic, feminine and modern. At the
same time, we love that Kate is an accomplished woman with
heart-felt convictions about beauty and appearance, about her
family and about her work. There is a truthfulness
and a sincerity to Kate Winslet that women around the world fi
nd immensely appealing.”
Adds Eric Lauzat, president of Lancôme in the U.S.: “Femininity,
luxury, good taste — that’s what Kate brings to the brand. Kate
plays a lot of romantic leads — and romance is what Trésor is all
about.”
Like other celebrities — including Clive Owen, who is the face
of Lancôme’s Hypnose Homme — Winslet approaches the Trésor campaign
as she would any fi lm project.
“In a strange way, it felt like committing to a fi lm, as
opposed to committing to a fragrance line. It’s such a
stylish project, in many ways. With Peter Lindbergh [who shot
the Trésor campaign and with whom she’s worked on editorial shoots]
and also fi lling the shoes of Isabella Rossellini, it’s a pretty
big deal.”
Born into a family of actors — her father, Roger Winslet, is an
actor, as are both of her sisters, Anna and Beth — Winslet said
acting is “the only thing I felt like I ever wanted to do.” Her fi
rst big job was in an Eighties-era Sugar Puffs cereal commercial;
later, she landed a
role as an obsessive teenager in “Heavenly Creatures.” After
winning the role of Marianne Dashwood in “Sense and Sensibility”
(and racking up her fi rst Academy Award nomination) Winslet went
on to star in 1997’s “Titanic,” the box-offi ce blockbuster (for
which she earned another Academy Award nomination). Since then,
Winslet’s fi lms have included “Eternal Sunshine of the Spotless
Mind” (her favorite role to date), “Hideous Kinky,” “Romance and
Cigarettes” and “Finding Neverland.”
During a recent visit to Manhattan’s Chelsea High School to
speak to student members of the Epic Theatre Ensemble (which is
partially fi nanced by Lancôme),
Winslet admitted to the classic actorly affl ic-tion of
insecurity. “Every single thing I do, I always think ‘I could have
done that better,’” she told the students. “I always try every idea
I have and I always experiment with those things to see what works
the best until I’ve exhausted all the alternatives. Then there’s
that feeling of ‘Oh, that’s so obvious. Why did I forget that?’ And
you’re kicking yourself for not having pushed yourself that little
bit fur-ther. I feel that all the time.
“You learn on the job, as you go,” Winslet told the students.
“You need more than any-thing to have the confi dence to take
yourself to the very vulnerable places where you have to go to as
an actor. Those emotions and life experiences are part of the
tool-box. Take those experiences and keep them for later. There is
no right or wrong, and you have to try everything. You have to be
brave enough to stand up in front of other people, just rehearsing
or running scenes. You can’t be afraid of what you sound like, what
you’re looking like, what you’re walk-ing like. You have to get
that self-conscious thing and get it gone because it’s only going
to get in the way.”
Of all her roles, Winslet says the one spe-cifi c scene she’d
choose to do over would be one at the end of 2006’s “Little
Children.”
“There’s a scene at the end of that movie where my character
thinks for a brief moment that she has lost her child,” Winslet
remembered. “Her daughter was in a swing one moment and she turns
around and [her daughter is] gone. And in this moment, my character
has an enor-mous realization of what a useless mother she has been.
She fi nds the child, but I realized later that there are so many
dif-ferent ways I could have played this scene where she breaks
down — she loves this child, and this moment of possibly losing her
has changed her forever. Often, emo-tional scenes are the ones I
would like to go back to.”
And there’s one other thing she’d like to make clear. Published
reports have Winslet turn-ing down Gwyneth Paltrow’s Oscar-winning
role in “Shakespeare in Love,” an allegation she denies.
“That isn’t my quote — I never said that,” she said fi rmly.
But she is quotable on her choice of a dream co-star.“My
favorite actress in the world is Meryl Streep, and
I haven’t had a chance to work with her,” said Winslet, who
added that she has met her. “She’s a goddess.”
Scents and Sensibility With Kate Winslet
MAC Cosmetics is expected to announce today that Guillaume Jesel
has been named vice president of global marketing for the
brand.Jesel will replace Caroline Geerlings in the role. As
reported,
Geerlings was named senior vice president and general manager
for Prescriptives Worldwide earlier this month.
Jesel’s appointment is effective Nov. 26; he will report to John
Demsey, group president of the Estée Lauder Cos.
Most recently, Jesel served as vice president of global makeup
marketing for the Estée Lauder brand, although he had previous-ly
worked on the MAC Cosmetics brand. Before joining the Estée Lauder
Cos. in 2000, Jesel served in several marketing capacities in the
U.S. division of Lancôme.
In this role, Jesel will concentrate on global marketing for all
of MAC’s product categories, and will also oversee makeup artistry,
online marketing and new launches.
“Guillaume is an outstanding, talented global marketing
execu-tive,” said Demsey in a statement. “His vast experience in
fashion, L’Oréal, MAC and most recently at the Estée Lauder brand
make him the perfect business partner for the dynamic MAC team to
take the business forward.”
— J.N.
Jesel Named for MAC Role
Kate Winslet watches students performing
at Chelsea High School in Manhattan.
Paris Hilton’s one-month stint in jail ear-lier this year
apparently has not dimmed her salability. An estimated 500 people
showed up at Macy’s at Roosevelt Field Mall in Garden City, N.Y.,
on Tuesday, when Hilton made an appearance promoting the launch of
her new Moulin Rouge-inspired fragrance Can Can Paris Hilton. Over
the course of three hours, about 200 bottles were sold, add-ing up
to roughly $25,000 in retail sales, ac-cording to sources.
The fragrance has even inspired some men to propose to Hilton.
“They bring in rings and ask me if I’ll marry them,” joked
Hilton.
Hilton will be making a total of fi ve in-store appearances at
Macy’s. According to Neil Katz, chairman and chief executive of-fi
cer of Parlux Fragrance Inc., Hilton’s over-all fragrance business
is up about 30 percent
over the course of the last month and a half. “This is the fi
rst time I got to do this kind
of themed campaign, and it was a lot of fun to play with the
Parisian theme since it’s fl irty and sexy,” said Hilton during a
tele-phone interview.
For her next themed fragrance, Hilton wants to do something that
incorporates wings. “I like that fairy and Tinkerbell idea since
that’s what perfume is all about.”
Hilton recently unveiled a jeans and ap-parel line and plans to
launch shoes soon. She also has two movies coming out in the new
year — “The Hottie and the Nottie,” slated for February release,
and “Repo! The Genetic Opera” in March. She’s also hoping to get
back in the studio next year to work on a new album.
— Michelle Edgar
Jail Time Aside, Paris Still Sells
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The Beauty Report
By Andrea Nagel
Cover Girl hinted at an image overhaul when it an-nounced in
August that Drew Barrymore would serve as co-creative director on
print advertisements for a new mascara, LashBlast, due out in
January. The starlet also appears in the ads: She was photographed
in black-and-white, poised in a sultry pose next to the mascara’s
bright orange cigar-shaped tube. For the es-timated $720 million
brand, the ads are a departure from its usual “fresh and natural”
aura.
And it seems the Barrymore LashBlast ads are just the tip of the
iceberg for Cover Girl’s 2008 plans, too.
“I think Cover Girl has always been about clean, fresh and
natural and we are now dimensionalizing how it’s about you. We are
not correcting anything wrong but highlighting more of what women
want, adding more liveliness, seeing a better ver-sion of yourself,
not just clean, fresh and natural,” said Esi Eggleston-Bracey,
gen-eral manager, Cosmetics North America, Procter &
Gamble.
Executives said Cover Girl is overhaul-ing packaging and
formulas on several key brands in its portfolio to broaden its
appeal to women seeking an “individualized” beau-ty look.
Long-lasting lipwear brand Outlast and face makeup brand TruBlend
are two properties that will be reworked.
Outlast, the largest lip property in the Cover Girl portfolio,
is slated to receive new packaging, new formulas and a bright-er
color range for its 41 shades. Outlast’s lip color, said
Eggleston-Bracey, can now be viewed better in its package due to
changes to the glass containers housing the color portion of
formulas.
“Not all glass is compatible with long-wear lip color,” said
Eggleston-Bracey.
Shades were updated by in-house global design director for
P&G Beauty Pat McGrath.
And, finally, changes were made to Outlast’s two-part lip
system. Outlast’s base coat, which uses Permatone technology to
allow the product’s color to stay on for up to 16 hours, now has
green tea, jojoba and vita-min E to make the formula softer.
Outlast’s clear top coat will now have aloe vera, shea butter,
cocoa butter and vitamin E, as well as a vanilla fl avor and
fragrance.
New ads for Outlast will feature Queen Latifah, who serves as
one of the many faces for the brand.
TruBlend cosmetics are also being completely re-staged, with new
additions, packaging and formulas. The face makeup, which launched
in February 2004 with a liquid foundation, and expanded in 2005
with a pressed
powder and powder foundation, will now also have a blush and a
concealer. The mainstay of the line, TruBlend Liquid, will utilize
“multi-tonal pigments,” a coloring system that Sarah Vickery, M.D.,
senior scientist for Cover Girl Cosmetics, said “merges with the
skin rather than matching it. It is more advanced technol-ogy to
get us toward skin affi nity. We did that from a color standpoint
and from a physical property standpoint.” Also, the liquid
founda-tion has been taken out of its carton and will be
merchandised only in its glass bottle.
TruBlend Pressed Mineral Foundation will become an addition to
the TruBlend Minerals line, which is formulated with “ultrafi ne
satinized particles.” The formula is talc-free, but it is of “a
high purity and cos-metics grade,” said Vickery. The powder is
packaged with a brush.
The TruBlend Pressed Powder, TruBlend Powder Foundation,
TruConceal concealer, TruCheeks blush and TruBlend Pressed Mineral
Foundation will fol-low a new color-coding system, which begins
with the liquid foundation. Users are to choose from one of six
numbered foundation shades and then select other TruBlend items
corresponding to the foun-dation’s number.
The number-coded system is an aim at multiple transactions, said
industry ob-server Allan Mottus.
“Women feel more confi dent buying more than one thing when
products [are packaged in such as way.] Department stores are very
good at doing that. If you are going in for one thing, you are wide
open to buying more,” he said.
Advertising for TruBlend will also fea-ture Barrymore, in an
effort to be more “real, refreshed and have more attitude,” said
Eggleston-Bracey. Barrymore was co-creative director for these ads,
too.
Mottus commented that the Barrymore effort is a way for the
brand to cling to its number-two mass market cosmetics po-sition,
which is behind Maybelline and in front of L’Oréal Paris. But he
does not know if consumers will relate to the new confi dent
message.
“It is not a beauty ad,” said Mottus. “It seems more of a MAC
department store kind of thing. It is an ad that is going outside
their normal culture and from a consumer standpoint, the orange
brush, Barrymore’s face, her shoulders and the lack of copy, I
don’t know if that is going to sell. There’s nothing more diffi
cult [than getting] women to switch mascara.”
NEW YORK — Penhaligon’s, the U.K.-born perfumery, has drafted
plans to revamp its Madison Avenue shop, according to the company’s
real estate agency Prudential Douglas Elliman.
Plans call for the fi rm to refurbish its 200-square-foot
Midtown store, located at 870 Madison Avenue. The up-dates to the
eight-year-old store will mirror Penhaligon’s newly opened shops in
Paris and London, said Brian Kurtz, Penhaligon’s director of sales
and marketing. Construction is slated to begin after the holiday
season, and is expected to be completed in the spring, said Faith
Hope Consolo, chairman of Prudential Douglas Elliman’s retail
leasing and sales division.
The Madison Avenue store is Penhaligon’s sole stand-alone store
in the U.S., although its products are sold in boutiques in Wynn
Las Vegas, Fred Segal and Saks Fifth Avenue in New York. The
retailer, which is owned by the investment group Fox Paine, is
looking to open two addi-tional U.S. stores in the next year. It
previously operated a store in Beverly Hills.
Penhaligon’s, established in the U.K. in 1870, pro-duces
fragrances, skin care products, home fragranc-es and gift items,
including baby items, silver and leather goods.
— Molly Prior
Penhaligon’s Plans UpdateOf Madison Avenue Store
Cover Girl to Revamp Key Franchises in ’08
NEW YORK — Coty Inc.’s celeb-rity fragrance machine contin-ues
to crank away.
The New York-based fra-grance company, which mar-kets upward of
a dozen celeb-rity brands, has added to that assemblage with the
signing of country music singer Tim McGraw, who is to develop and
market a signature fragrance.
The yet-to-be-named men’s scent is due out in the summer. While
Coty anticipates the fra-grance “will be widely distrib-uted in
major retailers across North America,” according to a statement
from the fi rm, retail-ers and distribution channels have not yet
been established.
McGraw, 40, joins fellow country singer Shania Twain in
marketing a scent with Coty, whose portfolio of recording artist
scents also includes Celine Dion, Kylie Minogue, Gwen Stefani and
Jennifer Lopez.
Coty’s chief executive offi cer, Bernd Beetz, noted in the
statement, “Tim has delivered 30 number-one hits and sold over 36
million albums
to date,” success that Beetz anticipates will translate into a
“blockbuster fragrance for both his fans and the beauty
industry.”
“Creating my own fragrance is an exciting new endeavor for me,”
McGraw said in the state-ment. “Coty has a great cre-ative and
marketing team, one of the best in the industry, and I’m looking
forward to working with them.”
In addition to his musical exploits — which include a pop single
with rapper Nelly called “Over and Over” — the Louisiana native has
acted in fi lms such as “The Kingdom,” “Flicka,” “Friday Night
Lights”
and “Black Cloud.”While this may be his fi rst foray into
fragrance,
McGraw, along with wife Faith Hill, was appoint-ed an ambassador
earlier this year to represent a charity for Cartier’s Love Charity
bracelet. With the sale of every $475 bracelet — a silk cord strap
with a rose gold charm — $100 went to charity.
— Matthew W. Evans
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TIm McGraw
Coty Signs Tim McGraw to Scent Deal
“We are…highlighting more of what women want, adding more
liveliness, seeing a better version of yourself. ” — Esi
Eggleston-Bracey, Procter & Gamble
New Cover Girl products.
An ad for LashBlast, a new Cover Girl mascara.
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9WWD, FRIDAY, NOVEMBER 16, 2007
WWD.COM
MAYBELLINE MOVES: Steven Waldberg has been named director of
global public relations for L’Oréal-owned Maybelline New York.
Prior to this role, Waldberg, a Franco-American, had served as
director of global special events for Lancôme in Paris. He has been
with L’Oréal since 2001. In his new role, Waldberg replaces Denise
Quattrochi, who was named assistant vice president of consumer
promotions for Maybelline New York and Garnier USA. Waldberg
reports to Cyril Chapuy, general manager of Maybelline New York
Worldwide.
COIFFURE HONOR: Ann Mincey received the Intercoiffure
America/Canada “Inspiration” Award last month for her service to
the professional beauty industry. Mincey, vice president, global
communications, Redken, has helped raise more than $575,000 for the
American Heart Association.
BELLI BABY: The team behind Belli Cosmetics has expanded its
focus from moms-to-be to babies. Belli Cosmetics founders Annette
Rubin, a former Clinique executive, and physician Jason Rubin, a
family practitioner, have designed four items for children,
including a hair and body wash (Calm Me), a lotion (Nourish Me), a
talc-free powder (Pamper Me) and a diaper rash cream (Protect Me).
Belli Baby, as the line is called, is now sold in Mimi Maternity, A
Pea in the Pod and Destination Maternity. Products sell for between
$18 for Calm Me and $19 for the Nourish Me. A $32 gift box is also
available.
CURL JOY: Professional beauty brand Rusk has developed an
in-salon service to take the curl out of hair. Rusk Radical
Anticurl uses conditioners and a patented formula to deliver the
temporary straightening service with prices ranging from $100
to $300, depending on the market. The straightening takes
between 30 and 90 minutes to apply, depending on hair length, type,
condition and desired results.
BEAUTY BUTLER: Luxury hairstyling brand GHD has partnered with
the InterContinental London Park Lane hotel to offer the use of
hair appliances to travelers in need of a bit of hair therapy. For
a fee, guests can call up the concierge and order everything from
the use of a GHD styling iron with a free mini thermal protector
($21), to GHD-prescribed shampoo, conditioner and treatment product
with use of a styling iron ($157). All items are delivered on a
silver tray.
ARTIST FOREVER: Kevin-James Bennett has been appointed director
of artistry and development for Make Up For Ever LLC. Bennett will
also serve as a product development adviser to Dany Sanz, creator
and artistic director of the Make Up For Ever brand. Bennett
reports to Gilles Kortzagadarian, general manager of Make Up For
Ever, U.S.
IFF’S FAB FIVE: Fragrance supplier International Flavors &
Fragrances Inc. last month promoted fi ve perfumers — Domitille
Bertier, Sophie Chapuis, Tony Mills, Béatrice Piquet and Olivier
Polge — elevating each to the post of senior perfumer. The fi ve
are based at IFF’s creative center in Neuilly, France.
SEASON’S TREATMENTS: To celebrate the 10th anniversary of Salon
AKS, Phyto has developed a multistep, 45-minute antiaging
treatment. The procedure begins with Phytopolleine, a botanical
pre-shampoo treatment to purify the scalp, which is followed by
Huile D’Alès, to condition dry hair. Then, Phytoprogenium shampoo
is applied, which is fortifi ed with oat milk and almond and
marshmallow root extracts, and hair is conditioned with Phytobaume
conditioner. Lastly, a Phytodensium serum is applied to the scalp
for an antiaging boost. The service costs $85 and includes a
blowout.
RARITAN, N.J. — The opening of a Five Below store here shows the
challenges beau-ty faces as teens and tweens flock to other
categories.
The store, the newest look for the 66-unit chain, has a tighter
assortment of beauty than older designs. Co-founder Tom Vellios
said that change was by design to make room for the hot items teens
want, including iPod accessories, T-shirts and home decor.
Five Below isn’t alone in its move to trim beauty. Many other
chains have also had to clear more space for more profi table
categories, such as mini health clinics and skin care.
Vellios, however, said beauty sales are still strong at a
double-digit gain and that he hopes to get aggressive in the
category next year with a stepped-up effort. “We’re going to go
after it next year,” he added.
Five Below opened 15 new stores this year with plans for another
15 next year.Even in its tinier space, Five Below
makes a statement with beauty. The stores are aimed at tweens
and teens who fi nd items such as bath gel and lip gloss a
must-have. Beauty items at this new location in central New Jersey
are near the front of the store, but confi ned mostly to one major
fi xture. In the original stores, beauty com-manded about twice as
much space.
Among the beauty highlights are LA Colors eye and nail items,
Funky Fingers neon nail polish, a gift bag of 25 lip glosses, a
one-foot peg section of candy-themed lip products from Lotta Luv,
Disney Princess sets from Townley and Hello Kitty bath sets. There
was also a make-your-own lip gloss kit being snapped up by shoppers
get-ting a head start on the holiday season. The opening fl yer
promoted Gingerbread and Snowy Day gift sets at $5 each. Vellios
said hot colors such as Funky Fingers have been fl ying out of the
store. “We helped put Funky Fingers on the map,” he added. He said
Five Below looks for opportunistic deals and also goes right to
manufactur-ers for products that can be planogrammed.
Beauty products are also included in an easy-to-shop travel
department with trial sizes perfect for air travel. Products
getting more real estate at Five Below refl ect cur-rent youth
shopping desires, including ballet fl at shoes, iPod accessories,
games, home decor, candy, DVDs and gag items. The store was
bustling on a recent afternoon visit with shoppers fi lling up on
toys, games, candy, beauty and licensed products such as Hannah
Montana hair accessories.
One of the advantages Five Below has is that it can react
quickly to trends in
the market and up the footage as needed. The management team is
quick to point out Five Below is not a typical dollar-type store,
rather a value spot for trend mer-chandise. Five Below has a cadre
of buyers prowling trade shows, such as Effi cient Collaborative
Retail Marketing, in search of new items.
Two other New Jersey locations opened the same day as this site
in Raritan. In less than fi ve years, Five Below has grown from its
fi rst shop in the suburban Philadelphia market to locations in
Pennsylvania, New Jersey, Delaware, Maryland and Virginia.
Management targets strip shopping centers in heavily traveled areas
and most stores average about 4,000 square feet. Rather than invest
heavily in adver-tising, Five Below attempts to attract shoppers
via word of mouth. By yearend Vellios said there will be 67 units
up and running.
SNIPPETS
Five Below Aims for More Profi table Beauty AssortmentThe new
Five Below store in Raritan, N.J.
Known for its facial skin care products for multicultural
consumers, Ambi is extend-ing its product assortment with the
launch of its first body care collection. Designed to keep skin
soft, smooth and moisturized, the new line is aimed at
women with melanin-rich skin tones. The company found that
consumers with melanin-rich skin tones were challenged by dry skin
with an often ashy appear-ance, said Jon Miller, research and
development manager at Ambi parent Johnson & Johnson Consumer
Products.
According to Michael Marquis, group product director for Ambi,
body care products was an area of skin care that was underserved
for women of color since their needs are different. “General market
areas are more focused on therapeutic itchy skin and general
dryness, but women of color are looking more for items that help
even out skin tone and solve problems such as hyperpigmentation
and
reduce stretch marks. They are also looking for products that
contain much more of an oil base since their skin suffers from
intense drying,” said Marquis.
According to Information Resources Inc., the 52 weeks ended Oct.
7 showed Ambi dollar sales up about 195 percent to some $7.2
million, not in-cluding Wal-Mart. According to company execu-tives,
the growth can be attributed to the launch of Ambi Even & Clear
Facial Care line, in addi-tion to improved advertising and
distribution.
With more than 12 items in the existing line-up, Ambi will
launch its three new body care items in January, including an oil
lotion, stretch mark diminishing oil and a moisturizing cream.
Retailing for $7.99 each, the items will launch in major food, drug
and mass retailers, followed by a national rollout two months
later.
Designed to be a nongreasy two-in-one body oil and lotion,
Ambi’s Soft & Even Creamy Oil Lotion is meant to make the skin
softer and smoother. Shea butter helps restore the skin’s
elasticity by absorbing and retaining moisture.“The oil lotion
forms a layer on the skin that helps traps in the moisture,”
said
Miller. “It has the benefi t properties of an oil, but it uses
it in a more consumer-friendly way that’s not so greasy.”
Ambi’s Soft & Even Stretch Mark Diminishing Oil locks in
moisture and reduces the appearance of stretch marks in as little
as four weeks. It is composed of soybean oil and almond oil, which
helps retain moisture, while vitamin E helps soothe and condi-tion
skin, improving the skin’s fi rmness and elasticity. According to
Miller, the formula puts back the lipids that were lost, which
helps increase the skin’s resiliency.
Ambi’s Soft & Even Skin Tone Enhancing Moisture Cream is
designed to mois-turize the skin in addition to helping even out
skin tone and texture. Miller said that the cream has been
clinically tested to visibly reduce dark marks and
hy-perpigmentation patches in discolored areas like knees and
elbows in up to two weeks. Designed to be used twice a day, the
formula is composed of soy, shea but-ter, olive oil, lipids and
salicylic acid.
— Michelle Edgar
Ambi Expands Into Body Care
Ambi’s new body care items.
PHOT
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10 WWD, FRIDAY, NOVEMBER 16, 2007
The HBA Report WWD.COM
Nautica is venturing into new waters with the launch of My
Voyage for Her, the first women’s fra-grance to be launched since
Coty acquired the Nautica license from Unilever Cosmetics
International three years ago.
My Voyage for Her is launching now in Dillard’s, and will roll
out to the re-mainder of its U.S. distri-bution in January. When
the scent is in full dis-tribution in the U.S., it will be
available in some 2,000 doors. It will roll out globally over the
next 12 months, and will be avail-able in Spain, France, Italy and
Asia, among other markets.
“Coty is committed to creating global brands in fragrances, and
we see Nautica as one with the greatest potential on that scale,”
said Steve Mormoris, senior vice president of global marketing for
Coty Beauty. “It has a universal appeal based on a fashion brand
which has a great vi-sion globally. With this fragrance, we saw an
opportunity to translate the values of the brand — fresh, clean,
easy elegance — using the fashion house’s references.”
That synergy is no accident. “We’ve been work-ing with Denise
[Seegal, president and chief execu-tive offi cer of VF Sportswear
Inc., which owns the Nautica brand] and her team to make Nautica
fash-ion and Nautica fragrances a seamless presentation,” said
Mormoris. “There’s a modern, great confl uence between the two
companies.” There’s also a synergy between the men’s and women’s
Nautica fragrance brands, he points out: Island Voyage, Nautica’s
last launch, is intended to be the men’s counterpart to My Voyage.
Island Voyage’s advertising features Carter Oosterhouse of TLC’s
“Trading Spaces.”
My Voyage for Her, concocted by Givaudan’s Ellen Molner, has top
notes of sparkling grapefruit, bergamot, key lime, bitter orange
and aquatic notes; a heart of dewy
peony, Nantucket lotus and muguet, and a drydown of musk, orris,
golden amber and pink peppercorn. The bottle features pale blue
juice and silver accents in-tended to reference yacht
detailing.
Eaux de parfum in two sizes, 1.7 oz. for $47.50 and 3.4 oz. for
$59.50, will be of-fered, as will a body lotion, $29, and a body
wash, $26. Both ancillaries are 6.7 oz.
Actress Katherine Heigl is the face of My Voyage for Her.
“Katherine is de-termined and hardwork-ing, and the visuals show
that,” said Mary John Baumann, Coty’s group director of global
mar-keting. Adds Mormoris: “Katherine grew up on the coast in
Connecticut, and has a personal iden-tification with Nautica as a
brand. She loves the brand in terms of its fashion, and has the
look and style that is what I’d describe as Northeastern
marine-like, yet feminine and sexy. That’s the bal-
ance we were going for with both the fragrance and the
visuals.”
The campaign, shot by Enrique Badulescu, features two photos —
one to be used for national advertising and a second to be used at
counter in-store. National advertising will break in March fashion,
beauty and lifestyle magazines, although Dillard’s is now running
the bottle visual in its holiday scent advertising. The scent will
also have a dedicated Web site, nauticafra-grance.com, said
Baumann. Upward of 30 million scent-ed impressions are planned.
While none of the executives would comment on sales projections
or advertising spending, industry sources estimated that My Voyage
for Her would gener-ate sales of at least $20 million at retail in
the U.S. in its fi rst year on counter, and that about $10 million
would be spent on advertising and promotion.
— Julie Naughton
By Rachel Brown
The British retail invasion of the West Coast began last week
when Tesco, the U.K.’s larg-est and the world’s third largest
retailer, opened six Fresh & Easy stores in Southern
California.
This week, the expansion of Fresh & Easy moved to Nevada,
when fi ve stores bowed in the Las Vegas area. In total, 30 stores
are expected to open this year, but the company is on pace to seed
California, Nevada and Arizona with around 200 stores by 2009 at a
cost of more than $500 million a year.
When the doors swung upon at the Southern California units Nov.
8, crowds rushed in, match-ing those seen at the region’s H&M
stores, where the Roberto Cavalli collection hit the racks the same
day. Locals checked out Fresh & Easy’s prices — many compared
them and the selection with Trader Joe’s with a mainstream
supermarket spin — and competitors came in to size up their newest
rival.
Stores measure around 10,000 square feet and contain
approximately 3,500 products ranging from paper goods to prepared
meals to personal care items. A nearly 1.5 million-square-foot
dis-tribution center in Riverside, Calif., serves Fresh & Easy
units.
Fresh & Easy’s layout, distinguished by bold signage, wide
aisles and carefully spaced mer-chandise, was informed by Tesco’s
extensive re-search of Americans’ shopping habits. Under the
direction of Tim Mason, chief executive offi cer of Fresh &
Easy, based in El Segundo, Calif., the re-search reportedly reached
into consumers’ homes and stretched over a year.
“We’ve found customers piece together their weekly shopping trip
by shopping many differ-ent stores, so we put together a format to
simplify customer’s lives,” said Mason in a statement.
The personal care assortment at one Los Angeles location was
housed in a long aisle rim-ming the side of the store close to cash
registers. It contained staples from soaps to shampoos to
toothpaste. Brands featured include VO5, Suave, Pantene,
Neutrogena, Garnier Fructis, Jergens, Ultra Vital Care and Got2B. A
private label natu-ral line called bnatural featured a hand cream
for $3.89 and a scrub for $9.99.
Fresh & Easy hasn’t stepped onto Wal-Mart’s turf without
facing controversies similar to this country’s largest retailer.
Community organiza-tions have criticized Fresh & Easy for
avoiding poor neighborhoods in search of wealthy consum-ers, and
labor groups have dinged the retailer for not hiring union members.
Outside its Los Angeles unit on opening day, a small gathering of
protestors fl ashed a sign at cars passing by.
Fresh & Easy has tried to head off the opposi-tion in its
marketing blitz by touting its environ-mental efforts — the roof at
its distribution cen-ter has solar installation — and its fair
treatment of workers. Entry-level employees start at $10 an hour
and are eligible for medical coverage after 90 days, with Fresh
& Easy paying 75 percent of the cost.
British Food Store Opens on West Coast
NEW YORK — A new skin care brand called Adorage, which was
inspired by a skin cream made for Sixties-era French actress
Delphine Vouler, has landed at doctor’s of-fices and spas in the
U.S.
The nine-item Adorage line is based on a reformulated version of
a recipe custom-ized for Vouler and her family by a pharma-cy in
France’s Provence region, according to Yeleana Premyssleer, vice
president of Adorage.
Development of Adorage began two years ago, when an acquaintance
of Premyssleer came across the original formula, she said dur-ing a
recent interview. Premyssleer, who also works as a nurse in the
offi ce of Manhattan dermatologist Joel Kassimir, “wanted to create
something for our clients,” she said, “to make their skin healthy,
rejuvenate and improve their skin quality.”
Aside from Kassimir’s of-fice, Adorage is currently carried in a
handful of other dermatologists’ of-fi ces as well as spas,
in-cluding Renaissance Health Spa locations in New York, New Jersey
and Pennsylvania; Skin Perfection Spa & Wellness Studio here,
and Luxury Spa in Miami.
Plans call for Adorage
to reach a total of 15 spas and doctors’ offi ces by the end of
the year. Industry sources estimate the brand could generate fi
rst-year sales volume of nearly $350,000.
Adorage includes three 1-oz. creams, called Moisturizing Cream,
Retinol Cream and Antistress Cream, which are priced at $140, $150
and $155, respectively. There are four 0.5-oz. products, Hyaluronic
Acid Serum, $155; Antistress Serum, $155; Eye Cream, $150, and Gel
C, $150. There are also two 3.4-oz., $47 cleansing products, one
for oily skin and one for normal to dry skin.
The antistress products, as well as the Gel C vitamin C serum,
are designed to stimulate collagen production, while the eye cream
is designed to smooth and elimi-nate dark circles, the retinol
cream targets wrinkles and the Hyaluronic Acid Serum is designed to
moisturize. The line uses ex-tracts of soybean, yam, mulberry,
sunfl ower, rosemary, thyme, jojoba and shea tree.
Premyssleer noted that a two-week clinical study involving 250
women be-tween the ages of 30 and 65 found that after using Adorage
products, a 50 per-cent reduction of fi ne lines was observed.
There was also a 75 percent increase in skin hydration, a 72
percent improvement in skin smoothness and facial pigmenta-tion and
a 75 percent decrease in dryness,
according to the brand.— Matthew W. Evans
Adorage Skin Care Reaches Dermatologists, Spas
Nautica Sets Sail With Heigl
The My Voyage for Her ad.
A Fresh & Easy storefront.
Adorage items.
-
CEW Foundation’s Cancer and Careers program helps employees and
companies deal with cancer in the workplace by providing
information, resources, advice and community.
December 7th, 11am cocktails, 12pm lunch, presentation &
live auctionWaldorf=Astoria | Register online at cew.org
Support cancer and careers. Support a better workplace.
Attend CEW’s
beauty of giving luncheon
Honoring Pantenebenefi ting Cancer and Careers
-
WWD.COM12 WWD, FRIDAY, NOVEMBER 16, 2007
By Evan Clark
WASHINGTON — Last month’s re-tail prices for women’s apparel
fell a seasonally adjusted 0.3 percent from September with a 1.3
percent drop in dresses and a 0.1 percent dip for suits and
separates.
Price promotions to move fall mer-chandise during unseasonably
warm weather do not seem to have played a signifi cant role during
the month.
“This October, the discounts were comparable to Octobers in the
past,” said Malinda Harrell, an economist at the Bureau of Labor
Statistics, which released its Consumer Price Index on
Thursday.
Against a year earlier, prices on
women’ apparel fell 2 percent in October, with dresses up 0.8
percent and suits and separates off 2.2 percent.
Thanks to relaxed trade policies on apparel spurring more
imports from low-cost countries, particularly China, and stiff
retail competition from the likes of H&M, Target and others,
the pricing trend in apparel has been defl ationary. Over the past
fi ve years, women’s appar-el prices are off 4.2 percent with
prices on all apparel down 3.9 percent.
October was generally seen as a tough month for stores, with
apparel and accessories retailers managing just a 0.1 percent rise
in sales, com-pared with the preceding month, and department stores
down 0.5 percent, according to a Commerce Department
report Wednesday.Economists and retailers are keeping
a close eye on consumers, who are beset with a sluggish housing
market, high gas prices and troubles on Wall Street.
Since consumer spending accounts for about two-thirds of the
economy, the Federal Reserve is also keeping shoppers in mind as it
sets interest policy, trying to keep rates high enough to avoid
price infl ation, but low enough to stimulate growth. Right now,
the benchmark federal funds rate stands at 4.5 percent, down from
5.25 percent in early September.
Last week, Ben Bernanke, chairman of the Federal Reserve Board,
said the weaker dollar and higher energy prices could push prices
up.
Prices on all goods and services rose a seasonally adjusted 0.3
percent in October for the second straight month. The so-called
core prices, which ex-clude food and energy goods, rose 0.2 percent
for the fi fth straight month.
“The ‘low’ 0.2 percent core read-ing implies further
deceleration in the three-month annualized change,” wrote Global
Insight U.S. economist Kenneth Beauchemin in an analysis, adding
that the retail price report would be encour-aging for the Fed.
“With little to fear in the way of ac-celerating labor costs,
the Fed will keep a watchful eye for signs of pass-through to
consumer prices from surging oil prices and a depreciating dollar,”
he said. “So far, so good.”
Promotions Lead to Dip in Retail Apparel Prices in October
Penney’s, Kohl’s Latest to Trim ForecastsContinued from page
oneCorp., Coach Inc. and Talbots Inc. of the negative impact of a
consumer pullback and a more promotional holiday selling season.
The consumer spending woes chilled Wall Street Thursday, with the
Dow Jones Industrial Average declin-ing 0.9 percent to 13,110.05
and the S&P Retail Index falling 1.1 percent to 420.21.
On Thursday, citing current sales trends, Fitch Ratings issued a
report forecasting softer retail sales in 2008 compared with this
year. The ratings fi rm also sees trouble at the high end, with
that segment’s aspirational buyer pulling back next year. Regarding
the current holiday season, Fitch sees a heavy pro-motional
environment aimed at clearing inventories. Most analysts are
expect-ing shoppers to shop later in the season and to hunt for
bargains, which will be plenty if current promotional activity is
any clue. J.C. Penney, Kohl’s, Macy’s and a host of specialty
stores are in the midst of planned promotions with markdowns of 30
to 50 percent off.
Still, one analyst, Craig Johnson, president of Customer Growth
Partners, expects holiday sales to show a gain of at least 5
percent over last year. His analysis, released Thursday, is based
on shopping patterns over the past decade. Shoppers are resilient,
and they will
spend, he said. That’s good news for J.C. Penney’s
Myron E. “Mike” Ullman 3rd, chairman and chief executive offi
cer, who vowed Thursday to have trend-right merchandise this
holiday season to draw in consumers.
For the quarter ended Nov. 3, J.C. Penney said net income
dropped to $261 million, or $1.17 a diluted share, from $287
million, or $1.26, in the prior year on sales that slipped 1.1
percent to $4.73 bil-lion from $4.78 billion. Operating income fell
18.5 percent to $411 million. “After the completion of a strong
back-to-school season and a favorable response to our early fall
merchandise, we were disap-pointed to see sales weaken dramatically
in September and October,” Ullman said in a statement.
On a conference call with analysts, Ullman said, “For the fi rst
time, we really saw a change in consumer sentiment re-fl ecting the
soft housing market, the sub-prime market and the psychological
effect of fuel prices. Knowing that we took sig-nifi cant steps to
best position ourselves, including laser focus on ensuring our
operating expenses are in line with sales levels as well as
managing our inventory through targeted promotions, [we will]
consistently clear merchandise at appro-priate prices within the
selling