Is Fashion Ready to Break New M&A Ground?

There’s a new theme in fashion M&A that has “synergy” taking a back seat to “innovation.” “This is like the geek trying to get the hot cheerleader to become cool at the high school dance,” said Sherif Mityas, a partner in A.T. Kearney’s retail consulting practice, describing the rush of companies searching for businesses that have the pulse of new consumers. Fashion players and retailers are trying to get smart, and quick, on everything from social media and mobile commerce to celebrity — and they’re willing to think differently to do it. New players are also entering the mix, making for some pretty interesting bedfellows. Take Wal-Mart Stores Inc., which bought video download site Vudu. Denim brand J Brand sold a majority interest, said to be worth more than $50 million, to Star Avenue Capital, a partnership between talent agency Creative Artists Agency and Irving Place Capital. And the Estée Lauder Cos Inc. acquired Smashbox, picking up expertise in digital, social media and television distribution, as well as a photo studio to boot. Looking beyond the traditional boundaries of fashion can lead to a big payoff.  “These are beyond synergistic type of opportunities,” said Mityas. “The opportunity will allow an organization to completely shift and create a new customer demographic, a new customer pool.” Mityas described innovation as the “holy grail” of growth and said the industry is beginning to see innovation through M&A. “This type of acquisition, in certain cases, allows you to leapfrog your competitor,” he said. This emerging M&A model is a distinct departure from the traditional one, where retailer A buys retailer B, reaching new customers while “realizing synergies” — firing people in the back office and dumping duplicate operations. The same can be done with brands and the model, at least on paper, leads to a larger company that is more profitable than the sum of its two parts.  Most of fashion’s dealmaking is expected to proceed along these lines, but the great recession has changed things. Being big doesn’t seem as important as being in the right spot as consumers evolve and technology advances. But there are plenty of risks. Venturing into new areas can lead to cultural clashes and taking on a disparate business can distract management and pull them away from their core competencies. Hot companies with new ideas and lots of growth ahead of them can also be pricy. Take Under Armour Inc. and Lululemon Athletica Inc. in the fashion world. Both public companies, while not necessarily for sale, have successfully tapped into very specific customer niches, giving them leverage to drive up the price for any possible suitors. read more

Schumer Bill Seeks to Protect Fashion Design

The American fashion industry has been pushing hard over the last four years for copyright protection for its designs. An earlier bill in the House was deemed too broad; clothing makers argued that protection against knock-offs would only encourage frivolous lawsuits from people claiming they had the idea first. Today, after a year of negotiations, Senator Charles E. Schumer introduced a bill that seemed to satisfy the different sides of the fashion industry — and may provide some protection, too. The bill, the Innovative Design Protection and Piracy Prevention Act, has the support of the Council of Fashion Designers of America (CFDA), whose individual members represent the creative core of the industry, and the American Apparel & Footwear Association (AAFA), which represents more than 700 manufacturers and suppliers and by its estimate accounts for about 75 percent of the industry’s business. The AAFA had argued that the House bill was too broad and would expose its members to lawsuits. Senator Schumer brought the two groups together. “In the first go-around there was nothing that gave our members protection,” Kevin Burke, president and chief executive officer of the AAFA said, adding that there was “a vast difference” in the Schumer bill. “It provides the protection for unique design.” The proposed legislation provides very limited intellectual property protection to the most original design. A designer who claims that his work has been copied must show that his design provides “a unique, distinguishable, non-trivial and non-utilitarian variation over prior designs.” And it must be proven by the designer that the copy is “substantially identical” to the original so as to be mistaken for it. The bill would cover all fashion designs, including products like handbags, belts and sunglasses, for a three-year period from the time the item is seen in public—on a runway, say. Factors than can’t be used in determining the uniqueness of a design are color, patterns and a graphic element. In other words, the bar is extremely high to determine what qualifies as a unique and distinguishable fashion design. And the burden is on the innovative designer. A beautiful dress worn by a celebrity at an important red-carpet occasion most likely wouldn’t meet the test. But a jacket that has an original cut — one example might be Martin Margiela’s peaked shoulder jackets from two or three years ago — could easily meet the standards of something unique and non-trivial. The Margiela jacket was widely copied and certainly the knobby shape of the shoulder was original. Steven Kolb, the executive director of the CFDA, seemed satisfied with the Schumer bill, which has bipartisan support. “The fact that there will be a law in this country, as there are in other developed countries, will make people think twice” before they copy someone, he said. “The law in itself is a powerful deterrent.” Senator Schumer acknowledged that not every creative designer will feel that he or she is sufficiently protected but he said “the bill is a good first step.” He expected the bill to be passed this fall. Narciso Rodriguez, who was among the designers urging protection, said in an email: “It’s an important moment for American designers that this bill is one step closer to becoming law. This protection has been necessary for so long and I am happy to see how the fashion industry’s efforts have made a difference.” Extending copyright protection to fashion has been a hard sell, in part because consumers ultimately benefit from such copying. In a post this spring on the Freakonomics blog, Kal Raustiala of the UCLA Law School and Chris Sprigman of the University of Virginia Law School pointed to the paradox in piracy protection: “The interesting effect of copying is to generate more demand for new designs since the old designs—the ones that have been copied—are no longer special. The overall result is greater sales of apparel.” Perhaps the upside for American fashion is that it will encourage designers to be more innovative. read more

Tween Helps Lift Dress Barn Sales 78.3%

The November acquisition of Tween Brands and healthy same-store sales growth helped Dress Barn Inc. raise its fourth-quarter revenues 78.2 percent. Sales for the 13 weeks ended July 31 totaled $710.9 million, the company said Thursday, versus $398.9 million in the prior-year quarter. Comparable-store sales rose 7 percent overall. By nameplate, Dress Barn sales rose 11.3 percent to $282.3 million on a 5 percent comp increase and Maurices sales were up 26 percent to $183 million on an 8 percent comp increase. Comps at Justice, previously operated by Tween Brands, were up 10 percent as sales hit $245.6 million. For the year, company sales rose 58.9 percent to $2.37 billion from $1.49 billion on a consolidated comp increase of 9 percent. The company reaffirmed its guidance for earnings per share of between $1.80 and $1.85 a diluted share. Dress Barn is scheduled to report fourth-quarter and full-year results on Sept. 15.

Liz Claiborne Losses Grow

Liz Claiborne Inc. said Thursday that its second-quarter net loss widened, despite margin improvement at its Juicy Couture, Kate Spade and partnered brands divisions. The New York-based retailer amassed a net loss of $87.2 million, or 92 cents a diluted share for the period ended July 3, compared with a loss of $82.1 million, or 82 cents a share, in the year-ago quarter. Excluding items, Liz said its net loss totaled 19 cents a share, which was better than analysts’ estimate of a 46-cent loss. Revenue for the quarter slid 15.5 percent to $569.8 million, from $674.6 a year earlier, due in part to lagging sales at Liz Claiborne brands, which are licensed to J.C. Penney Co. Inc. and television shopping network QVC. read more

Chinese luxury wannabes try to shake off “Made in China” image

“I threw away the rest of my suits,” beams Buffett in the 2007 video, adding that he and Microsoft founder and Bill Gates are fans of Chinese suit maker Trands and would be great salesmen for the company based in the northeast Chinese city of Dalian. Trands is one of a handful of emerging Chinese brands that someday hope to take on the likes of Gucci, Armani and Prada in the lucrative luxury goods market. Sales of luxury goods in China grew 12 percent in 2009 to $9.6 billion, accounting for 27.5 percent of the global market, according to Bain & Co. In the next five years, China’s luxury spending will increase to $14.6 billion, making it the world’s No. 1 market. Buffett’s endorsements may make for fun Internet fodder, but analysts point out that the emerging crop of Chinese luxury wannabes face a long uphill battle in taking on the global heavyweights which have more than a century of history and huge marketing muscle. Compounding the problem is a longstanding association that equates the “Made in China” label with poor quality and mass-market goods, versus the more exclusive cachet of the “Made in Europe” moniker. ”In the short term I don’t think any Chinese luxury brands can compete with the international ones in terms of marketing, brand culture, design and quality,” said Marie Jiang, JLM Pacific Epoch analyst. China is expected to become the world’s biggest luxury goods market in five to seven years, fueled by increasingly wealthy and brand-conscious consumers who want the best of everything, said a survey by The Boston Consulting Group in January. That market has been largely dominated to date by the big Western names, most of which have shops in Shanghai and Beijing and are starting to look at smaller cities as well. But home-grown brands such as Trands are trying to raise their profile both at home and abroad to get a piece of the lucrative luxury pie. Ports, another luxury fashion maker founded in 1961, made its own splash by wooing celebrities and sponsoring clothing for the 2006 movie “The Devil Wears Prada.”

FINICKY CONSUMERS

Aspiring Chinese luxury brands may face their toughest battle on the homefront, where shoppers often prefer big international names such as France’s LVMH or Hermes that carry more prestige and more than a century of history. One of the few brands to gain anything approaching an international following is Shanghai Tang, a designer of brightly colored chic clothing featuring Chinese themes founded in Hong Kong and now with stores worldwide. ”They are brand conscious, it is a little bit of a show-off attitude and what we have seen is that when they have money, they tend to spend on well-known brands,” said Renee Tai, an analyst with CIMB-GK Research, referring to Chinese consumers. Chinese brands could face an even rougher road ahead as global brands, well aware of China’s rapidly growing wealth, launch major expansion campaigns in the country that include opening stores in second and third-tier cities. Louis Vuitton will open one of its largest stores in the world in Shanghai this year. In the past year, LV has opened stores in second-tier cities of Xian, Xiamen and Tianjin. London’s upscale department store Harrods is also rumored to be in talks with Shanghai’s municipal government to open its first store outside the United Kingdom. International brands are also adapting to China, with Hermes rolling out a new brand, “Shang Xia” offering luxury accessories at cheaper prices just for China. ”They face competition and I think in terms of them being able to take a dominant share of the market, that’s sometime off,” said Stephen Mercer a partner at KPMG Shanghai. He said Chinese luxury brands could succeed in niche areas such as spirits and jewelry, with Moutai, a Chinese spirit that was served to Richard Nixon during his famous China trip during his presidency, as one such example. read more

(wwd)Barneys Said Near Naming Mark Lee CEO

Barneys New York might have a chief executive officer at last. Mark Lee, who stepped down as Gucci’s president and ceo in December 2008, is in advanced talks to become ceo of Barneys, according to market sources. Lee’s name has been bandied about as a favorite to lead Barneys practically since his exit from Gucci, which came only a few months after Howard Socol stepped down as the store’s chief in July 2008, leaving it without a ceo ever since. It is understood a contract has yet to be signed, but executive search circles are abuzz that Lee — one of the most admired and sought-after executives in the industry — is the clear front-runner. The dapper and slim fashion veteran, who earlier this year joined the boards of Tory Burch and Italian online retailer Yoox SpA, recently has been spotted walking Barneys’ 10-level, 235,000-square-foot Madison Avenue flagship. Lee was traveling Wednesday and could not be reached for comment. A Barneys spokesman did not respond to a request for comment by press time. His appointment would certainly electrify the American retail scene — and heighten the competition in New York at a time when Saks Fifth Avenue continues its turnaround and Bergdorf Goodman is undergoing management changes, with president Jim Gold, come October, splitting his time between Dallas and Manhattan when he becomes president of Neiman’s specialty retail division, which includes Neiman Marcus stores as well as Bergdorf’s. read more

(wwd)San Francisco Merchants Indicted in Major Counterfeit Ring

Calling it the largest enforcement action against counterfeit goods on the West Coast, U.S. Immigration and Customs Enforcement said Tuesday that a long-term investigation involving $100 million of counterfeit luxury goods has led to the indictments of 11 merchants and clerks from San Francisco’s Fisherman’s Wharf district.  A 25-count indictment charges the defendants with trafficking in counterfeit goods, smuggling and conspiracy. ICE revealed details of the case late Tuesday, after it was unsealed Monday in federal court. ICE said agents seized apparel and accessories bearing fake trademarks of more than 70 brands, including Coach, Kate Spade, Nike, Oakley, Armani, Burberry, Louis Vuitton and Prada. Goods seized included clothing, jewelry and watches, scarves, handbags and wallets, sunglasses and shoes.  The investigation by ICE and Homeland Security Investigations agents into the Fisherman’s Wharf retailers started in December 2007 when U.S. Customs and Border Protection officers intercepted a container at the Port of Oakland containing more than 50,000 counterfeit accessories valued at more than $22 million. The seizure gave the agents the information necessary to target a total of eight shops, as well as nine residences and three storage units in the San Francisco and San Leandro areas over the next several months.  The 11 defendants face penalties of up to 20 years in jail and a $250,000 fine for smuggling goods, 10 years in prison and a $2 million fine for each count of trafficking in counterfeit goods, and five years in jail and a $250,000 fine for conspiring to traffic in counterfeit goods, according to ICE. The case is being prosecuted by U.S. Attorney Deborah Douglas and is part of the Justice Department’s Intellectual Property Task Force.  “To consumers who think designer knockoffs are a harmless way to beat the system and get a great deal, ‘buyer beware,’” said John Morton, director of ICE. “Trademark infringement and intellectual property crime not only cost this country much needed jobs and business revenues, but the illegal importation of substandard products can also pose a serious threat to consumers’ health and safety.”  Federal officials have increased their focus on stopping the flow of counterfeit goods into the U.S. In April alone, ICE seized an estimated $260 million of fake apparel, accessories and other merchandise, a record month for seizures. In the first half of 2010, the agency has already initiated 560 intellectual property cases. In fiscal 2009, ICE initiated 806 intellectual property theft cases, up from 643 in 2008.  The domestic value of goods seized for intellectual property violations in 2009 was $260.7 million, according to statistics from Customs & Border Protection. Sales of counterfeit goods cost legitimate businesses an estimated $250 billion a year in lost sales and revenues worldwide, and are responsible for the loss of 750,000 jobs, according to estimates from the International AntiCounterfeiting Coalition. read more

(AP)Coach 4th-quarter net income rises

Luxury handbag maker Coach says better sales in North America and Asia helped its fourth-quarter net income rise 34 percent. The increase is a sign that Coach’s lowered handbag prices and focus on growth in China is paying off. The company says net income rose to $195.5 million, or 64 cents per share. That compares with $145.8 million, or 45 cents per share, last year. Analysts expected 56 cents per share. Revenue rose 22 percent to $950.5 million. Analysts expected $888.9 million. Coach Inc., based in New York, says an extra week in the quarter boosted revenue by $70 million. CEO Lew Frankfort says market share grew in all regions. Revenue in stores open at least a year rose 6.3 percent in North America.

(wwd)Back-To-School Sales Seen Soft in July

There’s unlikely to be a breakout in back-to-school business when stores report July comparable-store sales on Thursday. Preliminary reports indicate that consumers, content in June to leave their b-t-s shopping for later in the summer, kept procrastinating last month. Evidence is growing that they might need more promotional coaxing to open up their wallets, which could hurt third-quarter margins.  “July, with scorching weather and decent traffic trends, should have ensured a solid start to the back-to-school season,” said Brean Murray, Carret & Co. analyst Eric Beder. “Instead, high inventory levels from key players, continued weak economic trends and the consumer shopping later in the season have combined to create what will probably be one of the most aggressive discounting seasons in recent memory, as there are already material price cuts on key categories such as denim and Ts.” Beder said results, particularly in the teen market, were not expected to improve through the b-t-s season, leaving retailers such as American Eagle Outfitters Inc., Abercrombie & Fitch Co. and The Wet Seal Inc. with a glut of inventory or an “unappealing” pricing model. Mike Berry, director of industry research for MasterCard Advisors SpendingPulse, was slightly more upbeat. Although apparel sales slipped 1.1 percent on a year-over-year basis in July, according to MasterCard data, sales at family retailers, a category that includes teen retailers, edged up 3.4 percent. SpendingPulse estimates total U.S. retail sales made by cash, check or credit card. Wary because of the rough-and-tumble action on Wall Street, luxury consumers cut spending last month, driving down jewelry sales 1.2 percent, including a 13 percent dive in high-end jewelry. Excluding jewelry, overall luxury spending was down 0.2 percent, according to Berry. Berry said, “Until consumers see encouraging news over a substantial period of time, they will continue to be skittish.” read more

(wwd)Madonna’s Fashion Line Draws Crowds in New York

If you are looking to dress like Madonna from her early days, here you go, oh and you must be a tween. Madonna’s new junior’s line is exclusively at Macy’s, and somehow managed to draw a crowd of mini-Madonna teeny boppers. We can’t help but wonder if they even know the songs that made Madonna a legend, and why would anyone feel the need to bring back that style?

Macy’s rolled out the pink carpet for Madonna fans on Tuesday. The performer’s enthusiasts were out in force at the Herald Square flagship for the launch of the Material Girl collection by Madonna and her daughter Lourdes, sold exclusively at the store. But while the collection generated lots of buzz at Herald Square, where all the festivities were centered, in other Macy’s outside New York, it was less of an event and drew fewer shoppers.  Nonetheless, the retailer’s executives remain optimistic about the collection, which is being produced by MG Icon, a joint venture of Madonna, her manager, Guy Oseary, and Iconix Brand Group Inc. — which has already paid Madonna and Oseary $20 million for its 50 percent stake, plus earn-outs. So while Madonna and Lourdes won’t make an appearance for the line until Sept. 22, when they meet sweepstakes winners at the flagship, they no doubt were closely monitoring initial reaction. Teens with blonde streaks in their black hair and dark eye makeup, dressed in black tulle skirts and leggings, waited for the Herald Square flagship to open. A line wound its way from Broadway to West 33rd Street. The first 200 customers on line at six Macy’s locations received a bandeau top from the collection and a $10 Macy’s gift card. Taylor Momsen, the face of the Material Girl collection in advertising and marketing, performed an acoustic set later in the afternoon on the junior floor at the Herald Square location. Like her muse, Momsen has sparked controversy lately for her provocative style choices and for smoking. “In my day, we had Madonna,” said a mother attending Momsen’s appearance with her daughter. “We talk about smoking at home and how bad it is for her. No one in our family smokes. I don’t think Taylor influences how my daughter dresses. Everyone makes their own decisions on how to dress.” “This is beyond anything I’ve seen in my career,” said Terry Lundgren, chairman, president and chief executive officer of Macy’s Inc. “We’ve had 700 million Internet impressions since the collaboration was announced. Word of mouth took off and a grassroots” campaign started. “This has such broad appeal.” read more

(wwd)Defining the New Luxury

Luxury for all? Not like it used to be. So-called aspirational customers — who helped lift the luxury category to unprecedented heights during the boom years — seem to be sitting on the sidelines in the postrecession period: still aspiring, but spending less. “The concept of luxury has restricted again,” said Concetta Lanciaux, principal of Switzerland-based Strategy Luxury Advisors, describing a shift in consumer priorities favoring heritage luxury brands or — at the other extreme — masstige retailers. It makes business more challenging for players in the middle and products that “look like luxury but it’s not luxury.” For example, designers’ second brands are “not doing as well as before [People] prefer to buy less, but a little bit higher,” she explained. “There are consumers that overreached, and during the recession they had to go back to a more appropriate spending habit,” agreed Michael Burke, chief executive officer at Fendi in Rome, noting that was particularly the case in the American market, hard hit by the financial crisis. “The market has become more polarized: either it’s entry price or true luxury….The middle has hollowed out. “You either have to be resolutely upscale, or you’re battling it out on prices,” he continued. “[Luxury goods] is not a democratic product category.” Pam Danziger, president of the Stevens, Pa.-based research firm Unity Marketing, said scores of American consumers who reached beyond their means into the luxury sphere during the boom years pre-2008 have since simply “dropped out” because of the recession. Danziger estimates consumers with household incomes in excess of $250,000 — the top 2 percent in the U.S. — spend three to four times more on luxury goods than the next affluent tier, those in the $100,000-to-$250,000 range. What’s more, given a choice between buying the “best of the best” or “better and occasional best,” the richest consumers preferred the latter option in her most recent research.
Based on a survey of some 1,200 affluent consumers in the U.S., conducted last month, Danziger is predicting “cautious behavior” even among elite consumers whose “pent-up demand” for luxury goods led to a spree early in the year that is unlikely to continue. Lanciaux also foresees a tougher second half, noting European luxury brands were buoyed in the first two quarters by a “huge restocking,” plus a rise in the value of the U.S. dollar against the euro that has since eased. read more

(wwd)Indian Cotton Harvest May Benefit Manufacturers

India, the world’s second-biggest exporter of raw cotton after China, is positioned to produce a healthy harvest this year that could help lower world prices and lift global garment manufacturers. During July, the wettest month in India’s June-to-September monsoon season, farmers planted 9.5 million hectares of cotton, up from 8 million last year. Cotton farmers have been encouraged to plant bigger crops to cash in on higher prices amid concerns over global cotton shortages. The U.S. Department of Agriculture has warned that demand this year may outstrip supply. World cotton production is forecast to increase to 113.9 million bales in 2010-11, an 11 percent increase from 102.9 million bales in 2009-10, the USDA said. However, world consumption may rise to 119.1 million bales next season from an estimated 115.9 million. A strong monsoon season, which followed last year’s drought-like weather conditions across much of India, bodes well for the cotton crop, experts said. India’s repeal of curbs on raw cotton exports also has given a boost to cotton farmers. In April, India imposed a ban on cotton exports in an effort to cool down domestic prices that had risen more than 25 percent since October. It partly lifted the ban a month later and, starting Oct. 1, will remove all limits on cotton exports. While that’s good news for Indian cotton farmers and global textile manufacturers, especially in textile-dependent countries such as Pakistan and Bangladesh, Indian garment manufacturers are unhappy the ban has been lifted. As prices rise and cotton stocks fall, their margins could suffer.  “The government should put a total, permanent ban on cotton exports,” said Rajesh Goyal, owner of Ankit International, a garment factory in the north Indian city of Jaipur that exports to the U.S. and Europe.  Goyal said it was important for the government to support India’s textiles industry, which employs 35 million people directly and 88 million indirectly. Rita Menon, secretary at the textiles ministry, said the Indian government was developing a policy to govern cotton exports. It would determine how much cotton was needed by the domestic textiles industry and how much Indian cotton farmers would produce before deciding whether export limits were necessary, she said. read more

(reuters)Chelsea Clinton Marries in ‘Royal Wedding’

Chelsea Clinton — the only child of the former U.S. president and the U.S. secretary of state — wed Marc Mezvinsky on Saturday at Astor Courts, an historic 50-acre (20-hectare) estate about 100 miles north of New York City. ”Today, we watched with great pride and overwhelming emotion as Chelsea and Marc wed in a beautiful ceremony at Astor Courts, surrounded by family and their close friends,” Bill and Hillary Clinton said in a statement. ”We could not have asked for a more perfect day to celebrate the beginning of their life together, and we are so happy to welcome Marc into our family,” the statement said. Photos showed the bride and groom walking down a broad outdoor aisle between rows of guests. Chelsea wore a strapless white gown with a fitted bodice and full skirt with platinum-colored beading at the waist and a long white veil. The groom wore a simple black tuxedo going down the aisle and in a photo with the Clinton family, and a white prayer shawl and yarmulke in separate photos with Chelsea under a flowering tree and amid wedding guests. In the one photo in which she appeared, Hillary Clinton wore a magenta gown. Bill Clinton, who is pictured walking Chelsea down the aisle, wore a simple black tux with a white boutonniere in his lapel.

GUEST LIST LARGELY SECRET

Apart from the parents of the bride, the only other high profile guests seen in Rhinebeck were Bill Clinton’s former secretary of state, Madeleine Albright, actors Ted Danson and Mary Steenburgen and fashion designer Vera Wang. Also spotted was real estate scion and movie producer billionaire Steve Bing. Chelsea Clinton, 30, and Mezvinsky, 32, have known each other since they were teenagers. He is an investment banker, whose parents Marjorie Margolies-Mezvinsky and Edward Mezvinsky were once Democratic U.S. House of Representatives members. Chelsea Clinton, who worked at a New York hedge fund and has more recently studied health policy at Columbia University, has kept a low profile since her father left the White House in January 2001, although she campaigned for her mother during her failed run for the 2008 Democratic presidential nomination. Signs and pictures congratulating the newlyweds hang in many shop windows in Rhinebeck, which has been swarmed by media around the world for an event that experts estimate to have cost between $3 million and $5 million. Airspace above Rhinebeck was closed for 12 hours on Saturday for the wedding and media were kept well away from the entrance to Astor Courts. Security in the area was comparable to that surrounding state visits.The guest list was reported to be between 400 and 500, but did not include President Barack Obama. ”Hillary and Bill properly want to keep this as a thing for Chelsea and her soon-to-be husband,” Obama said on “The View” talk show Thursday. “It would be tough enough to have one president at a wedding. You don’t want two presidents.” read more

(wired)Why Do We Care About Luxury Brands?

The pricing of fakes reveals something important about how the human mind calculates value. In many instances, we crave authenticity as an end unto itself. We want the real iPhone not because it works better but because it’s the real one. The same logic explains why we splurge on Hermes bags, Rolex watches, Prada T-shirts, fancy Bordeaux, and expensive art. (How much would you pay for a fake Picasso print?) While a Rolex is a lovely piece of time keeping machinery, the value of the watch has nothing to do with its function. Instead, it depends on the intact authenticity of the brand. It’s easy to ridicule this behavior as mere snobbery. We might look down on the pretentious fools carrying Louis Vuitton luggage, or bragging about their Vertu phone, or wearing underwear with a big logo. We probably assume that they’ve just wasted a lot of money on some costly social signaling, or that they’re using the brands to assuage their deep insecurity. Unfortunately, we’re all vulnerable to the same tendency. There’s now suggestive evidence that our faith in the authentic — especially when the authenticity is supported by effective marketing campaigns — is a deep-seated human instinct, which emerges at an extremely early age. Consider a clever experiment led by the psychologists Bruce Hood and Paul Bloom. The scientists tested 43 children between the ages of three and six. The children were shown a “copying machine” — it was actually tachistoscopes that were modified to have flashing lights and buzzers — and told that it could make an exact copy of any object. After the machine was demonstrated for the kids — the scientists “copied” a block and a rubber animal — Hood and Bloom then told the kids that the machine could also duplicate toys. A ‘‘stretchy man’’ was then placed in the box and the illusion repeated. Interestingly, the young children actually preferred the “duplicate” toy and chose it 62 percent of the time. The kids didn’t worry about the “authenticity” of the stretchy man. But Hood and Bloom didn’t stop there. They also had many of the young kids bring in their “attachment objects,” such as their favorite blanket or stuffed animal. (I still remember losing Johnny, my stuffed penguin, at the tender age of five. Grief.) The scientists then offered to “copy” the object for the kids. Four of the children simply refused — they wouldn’t let their blankie anywhere near that nefarious device. But even those kids who allowed their attachment object to be “copied” almost always refused to see the objects as equivalent. The new duplicate was a bootleg blankie, an ersatz stuffed animal. Even though the children were assured that the objects were identical, they intuitively believed that the copy wasn’t the same. It lacked a history, a bond, a sentimental attachment. It was inauthentic. The same principle applies to brands. Although we outgrow stuffed animals, we never get beyond the irrational logic of authenticity and essentialism. There are certain things whose value depends largely on their legitimacy. While I might listen to bootleg music on my iPhone, I want the phone to be genuine. I want that Apple logo to be real. Why? Because the brand has effectively woven itself into my emotional brain. Because when I see that logo, I don’t see a functional object. Instead, I’ve learned to respond to everything that isn’t functional, all those subtle connotations conveyed in the glossy ads. There are many blankets in the world. But there is only one blankie. The best brands are blankies. read more

(wwd)Retail Stocks Climb Monday

Retail stocks began August by padding their 5 percent bounce in July, rising 2.1 percent on Monday amid signs the economic recovery, while not strong or swift, is being sustained. The S&P Retail Index advanced 8.15 points to 413.21 as the Dow Jones Industrial Average picked up 208.44 points, or 2 percent, to end the trading day at 10,674.38. The Dow’s advance came on top of a 7.1 percent rebound last month. Investors were reassured, if not necessarily elated, over several pieces of economic news Monday. Federal Reserve chairman Ben Bernanke told a conference he expects a pickup in consumer spending in the “coming quarters from its recent modest pace.” The Institute for Supply Management said its manufacturing index stood at 55.5 for July, down from 56.2 in June but still above the 50 mark indicative of production growth. Additionally, The Conference Board reported online job openings increased by 139,200 in July, above the recent monthly average of 43,000. Mid-Atlantic states have been “posting steady and strong upward trends throughout the year,” noted June Shelp, vice president of The Conference Board. Liz Claiborne Inc. logged the biggest advance of the 172 equities tracked by WWD, rising 7.2 percent to $5.08. Retailers leaping at least twice as fast as retail stocks in general included Abercrombie & Fitch Co., up 5.1 percent to $38.84; Nordstrom Inc., 4.4 percent to $35.51, and Macy’s Inc., 4.3 percent to $19.46. The Bon-Ton Stores continued its recent upward trajectory with a 4.7 percent pickup to $10.01, and Zale Corp. continued to gain following Golden Gate Capital’s recent expansion of its stake in the troubled jeweler to 34.5 percent, growing 5.1 percent to $1.85. The advance in U.S. equities followed strong days for stocks in Europe and Asia. The CAC 40 was up 3 percent to 3,752.03 in Paris and London’s FTSE 100 rose 2.7 percent to 5,397.11. Frankfurt’s DAX ended the trading day at 6,292.13, up 2.3 percent. While Tokyo’s Nikkei 225 managed just a 0.4 percent gain, to 9,570.31, Hong Kong’s Hang Sang Index logged a 1.8 percent advance, to 21,412.79, and Shanghai’s SSE Composite Index enjoyed a 1.3 percent increase, to 2,672.52. read more

(wwd)Profiling China’s Luxury Consumer

Luxury brands better get to know the Chinese words er nai and xiao san. Those phrases mean mistress and third girlfriend, respectively, and are whispered on an almost daily basis by well-to-do Chinese. “With some fashion brands, we think that almost half of the sales are for mistresses,” said Rupert Hoogewerf, publisher and head researcher of the Huran Report, China’s rich list. “But this is difficult to ascertain.”
Equally difficult is defining exactly who is the consumer driving China’s supercharged luxury consumption since specifics are so hard to come by. “That is the billion-dollar question,” said Charles de Brabant, an adjunct professor of luxury branding at China Europe International Business School in Shanghai, who said many luxury brands don’t fully understand Chinese consumers’ status-motivated shopping. “The brands often say: ‘These customers are not like me. They are bling-bling. They are overnight millionaires,’” de Brabant continued. “It’s a far more sophisticated game that goes beyond the Rolex, the dark sunglasses and the souped-up Porsche.” David Stewart, a partner in Jigsaw International, a lifestyle research agency in Shanghai, said the typical consumer profiles of other markets have no correlation in China. “The luxury consumers in China tend to be younger than in other parts of the world. Some of them are independently wealthy. It’s very unclear where their money comes from,” he said. Industry observers said there are several key consumer groups driving the country’s luxury goods market, which is estimated to come in at $9 billion this year, up more than 20 percent from 2009, according to China Market Research. The shoppers range from office worker women looking to snap up a branded handbag to entrepreneurs in polo shirts eager to please their mistresses. The white-collar “aspirational” shopper is the fastest-growing group in China, according to China Market Research. In their 20s, and often not making more than $400 a month, these individuals will nonetheless save to buy a luxury bag. Ben Cavender, a researcher at China Market Research in Shanghai, predicted that going forward, this group will make up 60 to 70 percent of the overall market. The superrich are another significant category of shoppers. Mainland China has 55,000 individuals with net assets of more than 100 million yuan, or $14.7 million, according to the Hurun Report. “This higher-wealth group tends to be slightly older men, age 44, and over 15 percent of these men live in Beijing. They have their own company, but have made their money from property and investments,” said Hoogewerf. Widening the net, there are 875,000 Chinese millionaires with personal assets of more than 10 million yuan, or $1.47 million. This figure includes the 55,000 superrich individuals mentioned earlier. read more

(wsj)A Fashion Identity Crisis at Wal-Mart

Wal-Mart Stores Inc. cannot seem to find the right fit when it comes to selling clothing. By quietly ousting its U.S. division apparel chief last week, the world’s largest retailer acknowledged that its clothing strategy has been a dud. Again. Over the past decade, Wal-Mart has veered from one approach to clothing to another. The discount giant has even tried to emulate rival Target Corp. by stocking its own lines of trendy outfits. At other times the Bentonville, Ark., retailer has placed its bets on bulk packs of everyday wear, like tube socks and T-shirts. ”Wal-Mart has suffered from not knowing who they want to be,” said Allen Questrom, the former chief executive of J.C. Penney Co. who recently left Wal-Mart’s board. “They’re either trying to be too fashionable or too basic.” Some critics have said Wal-Mart didn’t listen to customers or suppliers. Company spokesman David Tovar said Wal-Mart thinks it finally has “the right team in place to lead the apparel business forward. He added that the retailer is “listening to what our customers want and speaking with all key suppliers and letting them know we’re working in a collaborative way. The retailer said last month that it was going to focus more on basics like underwear, socks, T-shirts and jeans. Part of the issue for Wal-Mart is that it devotes a relatively smaller space to apparel than Target, where apparel represents about 20% of its revenue. At Wal-Mart clothing is only 10% of sales, so fashion items can crowd out basics but the company has been reluctant to give it more space. Clothing sales, which accounted for about 10% of the U.S. division’s $258.2 billion in sales in the company’s fiscal year ended Jan. 31, were down from about 11% in the previous year, according to Wal-Mart financial documents. Kelly Tackett, a retail analyst at Kantar Retail, a retail marketing and research consultancy in Columbus, Ohio, said that with so many shoppers trading down during the recession, Wal-Mart missed an important opportunity to grow its clothing business by giving its shoppers more fashionable everyday apparel. read more

(wwd)Buranis of MBFG Arrested in Milan

The opulent lifestyles of Walter Burani and his son Giovanni appear to have caught up with them. The former executives of Mariella Burani Fashion Group were arrested Thursday by the Guardia di Finanza of Reggio Emilia, Italy, a police force under the authority of the country’s Minister of Economy and Finance.
The arrests, confirmed by a spokesman for the Guardia di Finanza, were requested by Milan prosecutors Luigi Orsi and Mauro Clerici, who have been investigating Burani Designer Holding for fraudulent bankruptcy. BDH is the parent company of Mariella Burani Fashion Group, which produces and distributes collections for La Perla and Vivienne Westwood, among others, and is under state-supported administration. Walter Burani, former chairman of MBFG, is under house arrest, while Giovanni, former chief executive officer, has been transferred to Milan’s San Vittore prison. The spokesman said the Buranis will now be interrogated by the judge for the preliminary investigations, Fabrizio D’Arcangelo. He added that Walter Burani was granted house arrest because of his age, 77, and “attenuated responsibilities.” Only two years ago, the Burani family seemed to have it all: a growing fashion conglomerate and a life in the fast lane. Tales of second-generation Giovanni Burani living in a Renaissance castle were outdone only by his father Walter’s weekends racing vintage Formula 1 cars.  But the pendulum swung — and swung hard. The once high-flying Mariella Burani Fashion Group said earlier this year it was going to be liquidated, weighed down by debts of more than $600 million, and had to pledge 66.4 percent of the company to Italy’s Centrobanca (UBI Banca Group). read more

(wwd)Congress Passes Duty Relief Measure

Congress has sent a tariff suspension bill to President Obama, ending seven months of increased duties on imported textiles, footwear and apparel components and relieving some of the cost pressures the industry has been facing. The Senate passed the measure by voice vote Tuesday night, sending the measure to the president, who is expected to sign it. The House passed the bill last week on a vote of 378 to 43. Apparel, textile and footwear companies have been paying thousands of dollars in duties on imported components and some finished products since Jan. 1 because Congress let legislation expire that suspended tariffs on hundreds of imported products. The bill, known as the Miscellaneous Tariff Bill, must be renewed by Congress periodically and is meant to help domestic manufacturers compete by giving them tariff breaks on components such as yarns and fibers, or footwear, that are no longer made in the U.S. and must be imported. The 2006 duty suspension bill expired at the end of 2009 and the new bill would extend the tariff breaks through 2012. “This legislation will bring direct and measurable benefits to our economy through job creation and the continuation of well-priced quality products,” said Kevin Burke, president and chief executive officer of the American Apparel & Footwear Association, who called on the president to sign it quickly. “Along with our thousands of employees and our millions of consumers, the U.S. apparel and footwear industry stands to benefit from today’s Senate action and President Obama’s eventual signature.” A key component of the bill is a retroactive provision that will provide full or partial refunds to companies on duties paid on all covered products since January. Textile executives applauded the legislation because it would reinstate the majority of duty suspensions for rayon fiber imports and add several new duty breaks for acrylic fibers. “We’re terribly relieved that this has been done,” said David Trumbull, vice president of trade at the National Textile Association. “Companies took money from other things they might have invested in, like new equipment or worker training, and paid higher duties, while waiting for the government to make them whole, so they really lost the time value of that money.” Footwear executives had concerns about the new bill because some of the imports received higher duties than in the past. According to the law, duty breaks in each category cannot amount to a total loss in tariff revenue to the U.S. government of more than $500,000 a year. If trade grows in a given category, lawmakers increase the duties to bring the overall tariff revenue loss back under the cap. Several hiking boot and shoe imports will see an increase in the duties in the new bill because the volume of imports reached the cap. On the positive side, the measure would still provide many duty reductions on certain imported footwear categories. read more

(wsj)Fashion Nation: What Retailers Know About Us

Luxury-spending data can tell us a lot about the state of the nation—and our own neighborhoods. Take Detroit—not the city where one might expect to see the strongest recovery. Yet when American Express Co. looked at luxury spending in top and midsize cities around the country, Detroit led the list, with growth of 18% in the first quarter of 2010 from the year-earlier quarter. Lo and behold, Ford stock is up, too, suggesting that Detroit’s local investors are feeling more optimistic than they were when auto executives were driving hybrids down to Washington to beg for bailouts. New York City, on the other hand, is still cutting back. Luxury spending was down 7.7% in the quarter. Atlanta was down the most at 18.2%. By tracking customers’ spending habits, retailers get a bird’s-eye view of tastes as they ebb and flow. Online retailers, in particular, see every click we make. They know which brands we’ve peeked at, how long we pondered, and what we actually purchased. They know the time of day and the days of the week that we shop. They know—and record—our color choices, sizes and tastes so that they can recommend clothes that are in tune with our yearnings. Our banks have nearly as much information about our purchasing habits. “We know where the customers live and we can track their behavior back to where they live,” says Ed Jay, senior vice president of American Express’s Business Insights unit, which mines its credit-card data for consumer trends and sells reports to clients. American Express says it doesn’t provide data on individual consumers. This might seem slightly creepy to pre-Facebook generations who imagine their tastes and habits are private. But all this clicking amounts to a heap of insight into what people are spending on and even what they’re thinking about. Some of the data confirm regional stereotypes. Southerners bought more white, green, and pink than other regions’ residents, for instance, according to data from private-sale site Hautelook.com, which caters to young, urban professional women. Now I know, too, why I feel like such a loner wearing brown in Los Angeles, where black, white and gray are preferred. Retailers’ data also bust a few commonly held beliefs. Though Dallas has a flashy, big-spending image, the average woman there spends less on fashion than one in notoriously frumpy Washington, D.C., according to fashion website ShopItToMe.com. The data also offer a window on populations moving among trendy neighborhoods. ShopItToMe, which notifies members of sales on their favorite brands, observed on its blog recently that New York’s “most conservative” dressers reside on the Upper West Side, which has a reputation for being culturally liberal. Of the site’s more than 600 brands, Upper West Side residents’ favorite is Gap Inc.’s Banana Republic. Meanwhile, residents across town on the Upper East Side favor flashier, more expensive apparel, such as Jimmy Choo shoes. The Web site also looks at city-by-city data. The most popular brand in every ShopItToMe city, including Cleveland, St. Louis, Boston, New York and Los Angeles? Victoria’s Secret. Everyone needs underwear. And despite the fashion press’s obsession with J. Crew, the company is among the top five brands only in New York City and Boston. Other expectations for the nation only seemto be born out by fashion data—until one looks deeper. When ShopItToMe looked at clothing sizes, the results seemed to confirm what folks say—that women are thinner on the coasts. In New York and Los Angeles, 14% of women selected size 0 tops, compared with only 5% nationwide. ShopItToMe looked at a random sample of 86,225 women who registered between June 2009 and June 2010. But that’s not necessarily because of a predominance of tall model types. Petite clothing and small shoe sizes were also popular on the coasts, raising the possibility that the women there are just smaller. Even boredom with fashion appears in demographic data. When the Affluence Collaborative, a research group, asked luxury shoppers to look at a list and choose brands they think are boring, they found that tastes differed by gender. Male luxury consumers with incomes between $75,000 and $199,000—the biggest group surveyed—said they were bored by Saks Fifth Avenue. Women in the category were bored by Best Buy. read more

Russia’s Newest Spy

Move over, Anna Chapman, there’s another “Victoria’s Secret” agent sending love to Mother Russia — and her name’s Anna, too. Around the same time Chapman and her Russian spy-ring comrades were sent home, federal agents at JFK Airport nabbed a stunning Texas beautician attempting to smuggle state-of-the-art night-vi sion gear to Moscow. Anna Fermanova, 24, who, judging from her Facebook page, shares more about her body piercing than state se crets, “knowingly and intentionally” tried to bring the highly regu lated gear to Russia, according to court papers. Born in Latvia and raised in Plano, Texas, Fermanova was stopped by agents in March at Kennedy Airport with a $7,000 Raptor 4X night-vision weapons sight and two other $4,000 devices, according to the documents filed in Brooklyn federal court. The agents allowed her to travel to Moscow, but arrested her upon her return July 15. She will be charged with attempting to export the devices, which are considered US munitions, at an arraignment in New York later this month. Fermanova, who was released on $50,000 bail and is being kept on house arrest, called the allegations “hilarious and over-dramatized.” ”I am a US citizen. I grew up in America. I am not a spy — that is just funny,” she told The Post. “I am freaking out right now.” Her lawyer Scott Palmer said there was no espionage involved and that Fermanova’s husband planned to resell the scopes to big-game hunters, according to The Smoking Gun. The vision goggles cannot be exported without advance approval from the State Department, since the items are considered weapons, officials said. Fermanova works in Moscow giving English lessons to Russian students. Palmer declined to discuss where Fermanova came up with the $15,000 to purchase the three device. Two devices were purchased for $4,000 each, and a third was $7,000. He also said Fermanova emigrated with her parents to the United States from Latvia when she was a young girl and is an American citizen. According to her Facebook page, she is a 2005 graduate of the Ogle School of Hair, Skin and Nails. Records show that she also holds a cosmetologist license in Texas. The arrest of Fermanova comes after red-headed Russian spy Anna Chapman, 28, and nine others pleaded guilty to federal charges and were deported. The ring was arrested on June 27 and released into the custody of Russian authorities after feds arranged for a spy swap earlier this month. Asked about Chapman, Fermanova said, “I don’t even know who that is.” Immigration and Customs Enforcement began to probe Fermanova in February when a confidential informant reported she was seeking to acquire the equipment. read more

(wwd)LVMH Reports 52.8% Surge in Profits

The economic recovery may be hiccuping, but the prospects for the luxury sector keep brightening. On Tuesday, LVMH Moët Hennessy Louis Vuitton reported a 52.8 percent leap in first-half profits and said July kept the same pace as the first six months of the year, when revenues rose 16.5 percent. “The numbers speak for themselves,” said a sanguine Bernard Arnault, president and chief executive officer of the French luxury giant, addressing analysts at LVMH’s art-stuffed headquarters here. “We are fairly confident for the second half.” The buoyant LVMH results follow strong showings by other European luxury players. Sales at Hermès International jumped 27 percent in the second quarter, while Burberry posted an overall 30.6 percent sales increase in its first quarter. Further good news from the luxury sector could come Friday, when French retail-to-luxury conglomerate PPR is due to report first-half profits and sales. Despite the strong first-half performance, Arnault, like other industry executives, cautioned the global economic picture remains “uncertain.” But he noted, “We have reason to believe business will be buoyant.” Indeed, he noted that “demand is greater than supply for certain products. It’s an enviable challenge, I would say.”
On cue, giant screens flashed images of new workshops and tanneries in France and Belgium for Louis Vuitton, which kept up its double-digit pace of sales growth and powered the fashion and leather goods division to a 17.7 percent gain. read more

Dolce & Gabbana to Dress Chelsea Soccer Players

The players at London’s Chelsea Football Club will have a whole new – Italian – wardrobe in time for the opening of Britain’s premier league soccer season next month. Dolce & Gabbana has signed a three-year partnership to design the players’ formal wear and to re-design the directors’ lounge at the Stamford Bridge stadium in West London, the club’s home. The announcement was made during a cocktail party at Stamford Bridge on Tuesday. “We are really happy about this partnership and to be able to link our name to such a prestigious club like Chelsea,” said Domenico Dolce and Stefano Gabbana in a statement. “Football players are style icons both on and off the pitch, and, on top of this, there is our love of England and of London, which has always been a source of inspiration for our work.” The players’ outfits include a three-piece, two-button suit in dark blue wool twill, a blue poplin shirt, and a blue jacquard tie. The team’s colors are blue and white. Chelsea’s lion crest will be embroidered on the suit’s pocket. There is also a blue wool and cashmere coat embroidered with the club’s logo. For the players’ free time, the duo has designed a blue poplin shirt worn with dark blue denim jeans and black calfskin sneakers. read more

(daily mail)Goodbye Size Zero: Plus-size designer fashion finally makes its debut

The fashion world may continue to argue the plus-size debate for years to come, but one company has taken matters in to its own hands. Saks Fifth Avenue, the ultra chic American department store, will soon be adding plus-sized clothing to the high-end floor of its world famous New York branch – a major coup for designers, shoppers and the fashion industry alike. Due to hit rails in conjunction with the Autumn/Winter 2010 collections, garments that were last season only available up to a US size 10 (UK size 14) will soon be up for grabs up to a US size 14 (UK size 18) and some styles may even be produced up to a US size 20 (UK size 24). Saks Fifth Avenue’s legendary third-floor houses collections from the world’s most exclusive and celebrated designers. Fashion powerhouses such as Chanel, Dolce & Gabbana, Akris, Armani, Carolina Herrera, Escada, Donna Karan, St. John, Oscar de la Renta, Max Mara, Valentino, Michael Kors, Yves Saint Laurent, Alexander McQueen, Fendi and Roberto Cavalli can be found covering the floor space of the internationally revered store. With such a wealth of designers soon to be available in larger sizes, designer hungry women can look forward to buying everything from trouser suits to evening gowns and everything in between. This gleam of light in the very murky waters of the plus size argument does have one catch, however. Styles are likely to be produced as one-offs or in small numbers while the trial takes place. There may be many women clamouring to get their hands on this season’s hottest items, but only a few lucky ladies will be able to bask in the glory of Saks’ plus-size designer heaven. If the trial goes well, Saks will roll out the new venture to its other US stores. Hopefully Saks’ UK counterparts will take heed and plus-size designer wear will soon be widely available on this side of the pond too. Hot on the heels of plus-size model Crystal Renn’s backlash against the Fashion for Passion campaign shots taken by photographer Nicholas Routzen, in which she was dramatically retouched, the news of Saks’ stance on the whole sizing issue is certain to reignite the ongoing plus-size debate. With designers only recently welcoming plus-size models on to the catwalks and the size zero phenomenon still going strong, Saks brings the whole debate to a brand new juncture. One most definitely providing a cause to celebrate. read more

Resort 2011 Trend:
The Long Way

Whether slender or swirling, resort’s ankle-grazing dresses have a decidedly breezy air. See WWD’s collection of long silhouettes for Resort

(wwd)Consumer Confidence Falls in July

Consumer sentiment fell for the second straight month in July, a potentially bad omen for the back-to-school selling season. The Conference Board’s Consumer Confidence Index dropped to 50.4 for July, down from 54.3 in June and 62.7 in May. Economists were expecting a milder decline to 51. Shoppers were more negative in their take on current economic conditions and in their outlook. “Consumer confidence faded further in July as consumers continue to grow increasingly more pessimistic about the short-term outlook,” said Lynn Franco, director of the group’s Consumer Research Center. “Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves. Given consumers’ heightened level of anxiety, along with their pessimistic income outlook and lackluster job growth, retailers are very likely to face a challenging back-to-school season.” The Present Situation Index fell to 26.1, from 26.8 in June, and the Expectations Index pulled back to 66.6 from 72.7 a month ago. read more

(bloomberg)LVMH First-Half Net Income Rises

LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, reported first-half profit that beat analysts’ estimates as sales of fashion and leather goods accelerated in the second quarter. Net income rose 53 percent to 1.05 billion euros ($1.36 billion), the Paris-based company said today in a statement after the market closed. The average estimate of 10 analysts compiled by Bloomberg was 956.2 million euros. Second-quarter sales advanced 22 percent to 4.63 billion euros. Demand for luxury goods is returning as Chinese shoppers buy more high-end clothing and accessories, and U.S. and European retailers replenish inventories after the recession. Hermes International SCA, the French maker of luxury handbags and silk scarves, said last week that revenue may grow as much as 12 percent this year, excluding currency swings. “Visibility on results for the sector and particularly for LVMH should be quite good over the next 12-18 months,” HSBC analysts Erwan Rambourg, Antoine Belge and Sophie Dargnies wrote in a July 7 note. Demand for Louis Vuitton luggage and Hennessy cognac will remain “resilient” and currency fluctuations will offer a “substantial boost” to margins, the analysts wrote. They have an “overweight” rating on the stock. LVMH fell 2.77 euros, or 2.9 percent, to 92.26 euros today in Paris. The shares have gained 18 percent this year, giving the maker of Moet & Chandon champagne and TAG Heuer watches a market value of 45.2 billion euros.

Product Launches

“In the current recovery from the economic crisis, LVMH will continue to gain market share thanks to the numerous product launches planned before the end of the year, to its geographic expansion in promising markets and to its cost management,” the company said in the statement. First-half revenue increased 16 percent, or 14 percent excluding currency swings and acquisitions, LVMH said. On a local currency basis, sales gained 18 percent in the U.S., 21 percent in Asia and 11 percent in Europe, the company said at a press conference. Sales rose 27 percent in China. At the fashion and leather-goods unit, the company’s largest, sales climbed 18 percent, LVMH said. Watch and jewelry revenue advanced 28 percent, slowing from the first-quarter’s 33 percent surge, as restocking effects faded. Sales of wines and spirits gained 21 percent, while perfume and cosmetics advanced 12 percent, LVMH said. Revenue at the selective retailing unit, which includes Sephora and DFS, rose 14 percent. read more

Forever 21 CEO: We Don’t Have Designs on Pregnant Teens

Fashion retailer Forever 21’s debut collection of maternity wear, Love 21, has some concerned that the brand is targeting (and thus condoning) pregnant teenagers. Love 21 is now available in a select locations in Arizona, Alaska, California, Utah and Texas, which also happen to be the U.S. states with the highest rates of teen pregnancy, according to a January 2010 report from the National Campaign to Prevent Teen Pregnancy. Forever 21 EVP Larry Meyer responded: “Forever 21 did not create, design or distribute Love 21 Maternity to target, or appeal specifically to pregnant teens. Any relationship between teen pregnancy rates and the locations of our stores is unintentional.” While the “21″ in the maternity collection’s name echoes the parent brand, the flap also begs the question: so what if Love 21 appeals to moms-to-be of all ages? Don’t teens deserve fashionable maternity wear, too? Take it from us: Staying fashionable while pregnant tends to increase the budget in tandem with the belly size, so Love 21’s $8.80 cropped leggings and $19.80 cardigans would be welcomed by any mom-to-be. Controversy is nothing new for the brand, which was founded in 1984 by Don Chang, a South Korean immigrant. It has a track record of fashion designers balking at its copycat designs, prompting lawsuits from the likes of Anna Sui and Balenciaga. Chang’s original retail moniker of Fashion 21 changed to Forever 21 when its range of trendy, moderately-priced clothes won favor with customers under 21, although it has expanded beyond teen apparel in recent years. Today, the retail chain bills itself as affordable, one-stop shopping for all, with men, kids and women’s apparel sections, where high school and college-age shoppers can be found browsing the racks next to career women and moms. read more

(wwd)Retail Stocks Break Into Black for Year

Both retail stocks and the broader market slinked back into the black for the year Monday as investors retraced their steps following a sharp drop in the wake of Europe’s debt crisis and a drop-off in the U.S. consumer’s enthusiasm about spending. The S&P Retail Index rose 1.8 percent, or 7.51 points, to 415.68 Monday, giving the measure of overall retail stocks a 1.1 percent gain for the year. That means investors who bought into retail Monday morning fared better than those trading into the sector almost seven months ago. Retail stocks are still down 16.8 percent from their April high of 499.41. Of the 172 stocks tracked by WWD, The Bon-Ton Stores Inc. had the strongest showing for the second straight trading session with a gain of 11.5 percent to $9.83. Over the two days, shares of the regional department store firm shot up 23 percent despite no apparent developments at the company. Over the past week or so, investors have looked past signs the economic recovery will remain frustratingly tepid and pushed stocks higher on the strength of second-quarter results from big corporations.  And they started off the week with some encouragement from the down — but not totally out — housing sector. Sales of new homes shot up to an annual rate of 330,000 in June, up 23.6 percent from May, according to the Commerce Department. The sales rate is still 16.7 percent below a year earlier but was somewhat better than economists were expecting. The Dow Jones Industrial Average advanced 1 percent, or 100.81 points, to 10,525.43 Monday.  That puts the U.S. market up 0.9 percent for the year. For investors to do better than Wall Street in a major market, they would have had to travel to Frankfurt, where the DAX has posted a 4 percent rise since Dec. 31. Major indexes in London, Paris, Tokyo and Hong Kong are all down for the year. read more

(wwd)J.P. Morgan: A Personal, but Global, Approach

Investment bankers like Philip Bleser call it a “liquidity event” when the owner of a company cashes out and sells their business. But the sudden ability to keep seven, eight or nine figures in their checking account might elicit something more like “ka-ching!” from everyone else. It’s a moment with which Bleser, managing director and chief executive officer of J.P. Morgan’s midcorporate banking group, has some experience. There have been 38 apparel and retail M&A deals topping $1 billion over the last five years, and J.P. Morgan’s played an advisory role in more than half of them. Still, it’s not all about the money. “We’re in the relationship business,” Bleser said. “There’s crying sometime; it’s a big step” when a company is sold, said Erik Oken, managing director and co-head of retail investment banking. So that’s when Oken goes in for the hug, right? Not exactly. He’s more the type to hunt and fish with clients.
But Meredith Vanden Handel, managing director, is ready. “Some of us have hugged,” she said during a group interview in Bleser’s office. “With many clients, this is a family event.” These three, together with executive director Nik Johnston, are a family of sorts, too, and one that seems to genuinely like working together, completing each other’s thoughts. Directing a group that spreads across 22 offices in the U.S. and Canada, the mild-mannered Bleser specializes in commercial and investment banking services for companies with revenues of at least $250 million, or quickly growing firms on their way to that realm. J.P. Morgan has helped nurture brands such as Michael Kors and Tommy Hilfiger as they expanded into the limelight. Bleser spent 70 percent of his time on the road last year, meeting with clients, and he, like the bank overall, is starting to feel better about the economy, while keeping a close eye on job growth.

“There’s uncertainty in the small-business recovery,” he said. “The larger businesses are beginning to hire already.” Many are looking for the quickly growing economies in Asia to provide M&A fireworks, but Bleser said there would be deals made around the world. “Everybody thinks Asia, but it’s not necessarily going to be the case,” he said. “You’ll see Asia and Europe and Latin America and the U.S. all be active. There will be more cross-border opportunity, especially where currencies create opportunity. But what management teams are really after are those brands, those teams and a new distribution channel” that offer growth. Fashion businesses went into cash-conservation mode during the recession and now they face a new, tougher consumer and are looking for expansion opportunities. Oken said executives at companies that in the Nineties could afford to be exclusively in North America are now taking a look at the landscape and asking, “Do I need a new concept? Do I need to expand geographically?” For many, the answer appears to be yes, especially given the decline in U.S. real estate development and the slow economic growth. Investment bankers work hard to understand the industry and then pitch their ideas to executives. “If you’re looking to create personal relationships, that has to be done in person,” Oken said. “I’d love to say I could do that over the phone, but I’m not that charming. What I like is whispering in the ceo’s and cfo’s ears.” That whispering might include a bit more about private equity firms. Although Oken said private equity at its peak only accounted for about a third of the deal flow, the big-money investors are looking to get into deals in new ways. “Private equity firms are trying to figure out a way to successfully integrate themselves into strategic transactions,” Oken said. “The walls between the strategic world and the financial world have broken down.” Dealmakers are a leading indicator of sorts, since it can take 18 months or more to go through the entire acquisition process. “It’s only been a short period of time for companies to review where they are,” said Johnston, adding it hasn’t even been 18 months since the market bottomed out last year. That means fashion M&A could perk up even more down the line. As Vanden Handel noted of retail, “Every season can be a reinvention. There’s always that optimism.” read more

(wwd)Reinventing Fashion Via Crowdsourcing

The crowd is taking charge. Thanks to the Internet, the line between designer, consumer and brand is blurring more and more. Large brands and retailers such as Keds, Bloomingdale’s and Nike, as well as small start-ups like ModCloth and Spoonflower, are increasingly setting up businesses in which the consumer gets a say about what is designed and produced. Creators can share and rate each other’s designs. In some cases, anyone can create a design and get paid when someone else orders it.  Major brands and retailers see crowdsourcing as a way to increase customer loyalty, while smaller firms build entire businesses from it. And in a fashion democracy that already is accelerating at an alarming rate, ultimately anyone could be a designer, creator or manufacturer, with profound implications for the structure of the fashion and retail worlds, as well as the overall economy. Analysts estimate that crowd-sourced and customized products could eventually make up as much as 10 percent of the total market for apparel, accessories and footwear. “If you make the technology and tools accessible to large enough numbers of people, you have the possibilities of new industries evolving and the balance of power shifting,” said Stephen Fraser, co-founder of Spoonflower, which custom prints fabric by the yard. “The textile industry — and the same is true of the apparel industry and the craft fabric industry — their whole bread and butter for decades has been trying to predict what people will want. There’s a huge apparatus for selecting what’s going to be popular. [Our business] is really different from the traditional product marketing and manufacturing mentality, where you’re trying to figure out what people are going to want and creating a demand for whatever product you’ve developed.” The new businesses borrow elements from crowdsourcing, mass customization and group buying or simply exploit the Internet’s capacity for assembling ad hoc groups of people around a common interest or purpose, no matter how fleeting. read more

(fashionscollective)Does Digital Mean the End of Control?

Possibly one of the most significant obstacles for luxury brands when faced with digital marketing is the fear of losing control…and rightfully so. Historically, luxury has translated to exclusive. The idea that access was not widely attainable made luxury brands, and goods, covetable. As the internet launched and gained momentum and warp speed, it brought with it full and totalinclusion. Anyone with an internet connection, anywhere around the globe, can access a brand, twenty-four hours a day, seven days a week. Social media has staged a coup d’etat on the brand marketers by distributing images, commentary and content throughout vast social networks without the permission, and often even acknowledgement, of the brand itself. With now 500 million people on Facebook, and the number of internet users growing exponentially across the world, brands need to figure out how to participate in online communication, but does this mean losing control? read more

Cathy Horyn talks about Snooki’s past and her new celebrity in the New York Times. Here it is if don’t already know enough about the Snooks, Snooki’s Time.

(wwd)Inflation Could Return To the World of Fashion

Life is getting more expensive in the fashion world, and consumers could get stuck with some of the bill.
“The era of apparel deflation is now over,” said Richard Noll, chairman and chief executive officer of Hanesbrands Inc. Cotton prices are up more than 50 percent from a year ago, labor and transportation expenses are rising and factories that closed during the recession remain dark, keeping a cap on supply as demand perks up. To top it off, Chinese officials have become more willing to allow the yuan to appreciate against the dollar, which could make goods made in the country even more expensive. “You’re starting to see price increases come through the entire supply chain, not just from commodity costs, but also from a supply and demand imbalance,” Noll said. “There is no question that costs are working their way through the supply chain and you will see a broad-based increase, I think, in retail prices for apparel in 2011.”
The industry is also working on tighter inventories and pushing suppliers for quicker turns. Noll said his company had spent $15 million more on air freight so far this year to bring in goods from Central America and Asia. “When you’re running with such short lead times, you need to speed it up and air freight is just a lot more expensive than ocean freight,” he said. In that vein, Columbia Sportswear Co. also said Thursday it had incurred increased costs to “expedite production and delivery of fall orders to customers.” Retailers and vendors would like nothing more than to pass the additional expense on to consumers. That will be a tall order given an unemployment rate of 9.5 percent, a sharp downturn in consumer confidence over the past month and what Eric Wiseman, chairman and ceo of VF Corp., described as an apparent “pause” in the recovery.  Still there’s a growing sense that the pressures building in the supply chain will sooner or later make their way to the consumer. It could be a rude awakening after more than a decade of shrinking price tags. According to Commerce Department figures, apparel prices hit their high in 1992 and have fallen each year since with just two exceptions, including last year when prices inched up 0.6 percent. Even with the increase, apparel in 2009 cost a staggering 20.4 percent less than it did 17 years earlier. read more

(LA Times)Gift shops go glam: High-end hotels are collaborating with designers

Luxury hotel chains are upping the ante on their retail offerings by bringing in exclusive items and, in some cases, designing their own. In an era of global sameness, they have opted to offer unique, localized experiences. The Standard hotels (including the property in downtown Los Angeles) are collaborating for the second year with surf lifestyle brand Quiksilver, selling board shorts ($75), bikinis and sunglasses (both $88) in poolside vending machines. The Morgans Hotel Group has hosted a series of curated retail stores, the newest in West Hollywood at the Mondrian, where Los Angeles-based retailer Ron Robinson has opened a pop-up shop with handpicked merchandise such as exclusive Pamela Love T-shirts ($25), as well as Stephen Webster jewelry and Apothia beauty products. ”As we get more design-oriented hotels, the idea will continue to percolate,” said Bruce Baltin, a hotel industry analyst and senior vice president of Colliers PKF Consulting USA, a management consulting firm in Los Angeles that covers the hospitality industry. “It’s a point of differentiation. And now that you have designers like Ralph Lauren and Giorgio Armani getting into the hotel business, they will pair that with retail opportunities as well.” Historically, W Hotels have been innovators in hotel gift shops, with the first W store opening at the W Times Square in 2001. “From the beginning, the concept was designed to go beyond the basic idea of providing the same 400-thread-count sheets that are in the rooms,” said Eva Ziegler, W’s global brand leader (yes, that’s her title; she’s in charge of the chain’s growth strategy). In the past, the resort chain has targeted Diane von Furstenberg to create a Fashion Emergency Kit (a black wrap dress and thong underwear) for its stores, and Michael Kors to design staff uniforms. But in February, Ziegler hired an expert, naming Amanda Ross, a stylist and designer consultant, to the newly created post of fashion director. So far, Ross has attended fashion weeks on the hotel’s behalf, consulted on uniforms for new properties and helped select designers for the Global Glam collection of apparel created especially for the chain and sold in all 17 W Hotel stores. The store at the W Times Square feels like a trendy Robertson Boulevard boutique, with $80 Melissa brand jelly shoes, $275 jeweled caftans and gift books with such cheeky titles as “Is Your Dog Gay?” If there were exclusive products, they weren’t obvious, but the merchandise is a far cry from garish costume jewelry and packages of dried fruit and nuts that one might associate with a hotel gift shop. read more

(wwd)Fast Retailing to Close Small Japanese Apparel Operation

“Fast Retailing Co. Ltd. said Thursday it plans to shutter five of its small women’s apparel brands in a move to boost the efficiency of its other businesses. The corporate parent of Uniqlo said it has decided to discontinue the product lines as of early next year. The brands concerned, which include Zazie and Enraciné, are small lines targeting young Japanese women. Cabin, the division that manages the brands, will be merged into another Fast Retailing subsidiary: Link Theory Japan. Fast Retailing said the restructuring will generate 3 billion yen, or about $34 million, of extraordinary losses for the fiscal year ending August 31. A spokesman said those losses will “impact” the company’s current profit target, which it already cut earlier this month on uneven sales of spring items. The company said just two weeks ago it was expecting its full-year net profit to rise 35.6 percent to 67.5 billion yen, or $774.82 million at current exchange. Fast Retailing said it had spent the last few years trying to make Cabin a significant part of its women’s business but ultimately decided to liquidate the brands. ”The current business climate in the women’s wear retail industry continues to be unfavorable, due to the changing lifestyles and tastes of the young female consumers,” the company said. Cabin’s retail network consists of about 198 stores in Japan. Fast Retailing said it will examine Cabin’s current store locations and may switch some of them over to other Fast Retailing brands. The spokesman specified that these spaces are unlikely to become Uniqlo stores due to their smaller size. read more

(NYT)Shoppers on a ‘Diet’ Tame the Urge to Buy

Imagine that horrible though all-too-familiar feeling: You are standing before a fully stuffed closet and yet have nothing to wear. Now, imagine something worse: Your closet contains only six items, and you are restricted to wearing only those six items for an entire month. Now, if you can bear it, imagine something unspeakable: No one notices. Nearly a month into what amounted to just such a self-inflicted fast of fashion, Stella Brennan, 31, an insurance sales executive from Kenosha, Wis., realized last week that not even her husband, Kelly, a machinist, had yet figured out that she had been wearing the same six items, over and over, since June 21. The sad punch line is that Mr. Brennan is the one who actually does the laundry in the family. During her experiment — something called a “shopping diet,” actually — which ended on Wednesday, Ms. Brennan made do with the following: a black blazer and pants from H & M; two button-down shirts, one black and one pink; a pair of Old Navy jeans; and one well-worn pink T-shirt. How she settled on those items was complicated by the fact that she has two young children, a golden retriever and three cats, and that she was starting a new job last month with an hourlong commute. She said she needed “six items that are animal-hair-, kid-, food- and wrinkle-resistant. I need these items to be professional, but also work for playing football with my son and tea parties.” She agonized the longest over the T-shirt — the button-down shirts and suit separates were for work, but the right T-shirt could be worn casually with jeans or dressed up with the blazer. Her revelation at the end of 31 days, after her husband still had not noticed, even when she wore her floral-printed pajamas to do yard work: “Obviously, I didn’t need all of these clothes.”  This self-imposed exercise in frugality was prompted by a Web challenge called Six Items or Less (sixitemsorless.com). The premise was to go an entire month wearing only six items already found in your closet (not counting shoes, underwear or accessories). Nearly 100 people around the country, and in faraway places like Dubai and Bangalore, India, were also taking part in the regimen, with motives including a way to trim back on spending, an outright rejection of fashion, and a concern that the mass production and global transportation of increasingly cheap clothing was damaging the environment. read more

(wwd)Target Takes Manhattan

Target expects its first Manhattan store at East River Plaza, which opens Sunday to conservatively do $60 million to $70 million in annual sales, but is hoping for a volume of $100 million to $115 million, according to sources. The 110,000-square-foot store marks a big step for the $63.5 billion Target after years of searching for a site in New York City. “East River Plaza provides for single-level layouts for the retailers,” said Peter Ripka, a partner in Ripco Real Estate and the project’s leasing agent. “It’s more akin to [Target’s] suburban operations and very familiar to their customers.” It may be difficult for Target to find single floor space in Manhattan for its next store. “[Target] has turned the spigot on again and is now actively looking in Manhattan,” said a source close to the company. “They’re considering some things along the West Side. It may depend on how the [Harlem] store comes out of the box. Target’s Atlantic Terminal store in Brooklyn was a huge success and is consistently one of the top-performing stores in the chain. A lot of customers are going there from lower Manhattan. You can bet Target is going to study where the Harlem store’s shoppers are coming from.” Target already knows that many of its future customers live in the neighborhood. The store appeals to those multiethnic residents with signage in English and Spanish and graphics featuring African-American, Hispanic and white models. “The East Harlem Target is unique to the area due to its urban setting,” said Trish Adams, senior vice president of Target. “The merchandise has been tailored based on shopping patterns and the demographics of the neighborhood. We’ll offer an edited assortment overall, with more space devoted to commodities, basics for the home and items for apartment dwellers such as storage solutions and air beds.” Target’s latest salvo in the price wars, announced Wednesday, is Back in Black Friday. The online event Friday is a play on promotions that usually occur on the day after Thanksgiving. For women, offers will include Zebra rain boots, $15, a 40 percent savings; Mossimo maxidresses, $21.99, buy one, get one free, and a Soap and Glory set for $7.99, a 47 percent savings. read more

(wwd)Luxe Spending Rises, but Apparel Lags

Luxury spending is on the rise, but apparel isn’t feeling the love.  The country’s richest consumers will drive luxury spending up between 6 and 8 percent this year, according to a survey of affluent Americans conducted by American Express Publishing Corp. and Harrison Group, but apparel is unlikely to benefit. Apparel spending by these consumers has recovered somewhat, but continues to slide, falling 5 percent in the first quarter and 4 percent in the second quarter. By comparison, apparel spending by this group slid 8 percent during the fourth quarter of 2008 and 9 percent in the first quarter of last year.  Overall spending by the most affluent 10 percent of the U.S. population is expected to surge $56 billion this year versus 2009, and half that amount is expected to go toward the purchase of luxury products. Harrison Group vice chairman Jim Taylor told WWD at a Luxury Marketing Council presentation in New York Wednesday that apparel spending is generally discretionary and not a necessity. “It has become an event-driven business,” he said. “Still, I think it will be a pretty good Christmas.” The survey polled 1,910 respondents from households with incomes representing the top 10 percent of the American population. These consumers collectively account for 50 percent of all retail sales and 70 percent of all retail margins. This group also holds about 80 percent of all non-retirement account assets. read more

(wsj)Fashion Sites Try to Lure Guys

Online fashion shopping sites like Gilt Groupe and Rue La La have been a hit with women since launching over the last three years. A new push to get men to shop in these web boutiques is proving more difficult. As they struggle to figure out ways to reel in male shoppers, the sites are throwing all sorts of things at the wall to see what sticks, including offering sporting gear and gadgets (a high-end ax, anyone?) and making virtual men-only shopping areas so guys won’t have to scroll through women’s fashions. Gilt Groupe, a two-year-old site that holds limited-time only “flash” discount sales of designer merchandise, added sports gear such as golf clubs and surfboards last fall when it introduced a separate site for guys. Ideeli, a three-year-old flash-sales site, plans to add a men’s section with clothing plus sporting goods, gadgets and packaged travel outings aimed at men. Meanwhile, high-end fashion retailer Net-A-Porter announced in June that it would launch Mr. Porter, a dedicated men’s-only site, next January. Rue La La, which launched in 2008, plans to “quadruple” the amount of men’s brands it carries this year, says CEO Ben Fischman. Though these sites are familiar to many women, they are hardly household names among men. Women make up 75% of Gilt’s 2.5 million members, and the numbers are similar for its rivals: women represent 90% of HauteLook’s 2.7 million members and 70% of the 1.8 million members at Rue La La. When BIGresearch asked a little more than 8,000 men to write down which sites they shopped for clothes most often, among the top 10 were Amazon, Wal-Mart, eBay, Macy’s and Lands’ End. Gilt, HauteLook, and Rue La La weren’t mentioned. And in general, men’s online spending trails women’s—$4.3 billion compared with $9.6 billion during the 12-month period that ended in April, according to market researcher NPD Group.

So why bother with guy shoppers? Because when it comes to the upper income consumers that these sites target, men may buy less than women, but they spend more. Affluent men, those with income levels in the top 20% of U.S. households, spent an average of $3,970 on Internet purchases during the fourth quarter of 2009 compared with $1,958 for women, according to Unity Marketing. read more

(guardian)Are the Guccis fashion’s most quarrelsome family?

This week’s amusing fashion news story brings bad tidings for Elisabetta Gucci, who is being sued by the Gucci Group for, essentially, being called Gucci. She is the great-grandaughter of Gucci founder Guccio Gucci, so it’s not like she isn’t one of those Guccis, plus she worked for the Gucci Group until 1995, but now she has had the temerity to plan a group of hotels which will be called Elisabetta Gucci Hotels. Shall we rearrange the words “freaks” and “control”? Has anyone ever used the word Gucci so many times in one paragraph before? Questions, questions. The Gucci Group told WWD “Gucci wants to make clear that it has no relationship to Elisabetta Gucci Hotels and that it is not involved in any project whatsoever with Elisabetta Gucci Hotels.” FS is beginning to feel rather sorry for her now. Her managing director (of the hotels, we assume, not her personally) retorted that “Elisabetta Gucci is doing her job. She cannot cancel her name or her background. If she has a famous name or a famous background, that’s not her fault and we are not trying to use it as much.” FS finds itself rather intrigued by that last word. Simple misquote? Or Freudian slip? As much as what – or should we ask, whom? Elisabetta should probably consider herself lucky to be facing a mere lawsuit, for the Gucci family have a notorious history of feuds, fights and somewhat darker affairs. Paolo Gucci was once the chief designer at the company, and the man who created the famous double ‘G’ logo. But he kept up a long-running trademark battle with the company after they fired him over his management practices. His father Aldo tried to stop him, so Paolo shopped him for tax evasion, which led to a prison sentence. Oh, and Paolo was imprisoned himself for failling to pay child support. Later, one of Paolo’s daughters and his ex-wife were also taken to court and banned from using the family name on the grounds that doing so “infringed and diluted” the Gucci trademark. All this, however, is positively friendly by Gucci standards. Back in 1998 Patrizia Reggiani was jailed for 26 years for arranging the murder of her estranged husband, Maurizio Gucci. When investigating the crime, Italian police found her diary, in which she had written ”There is no crime that money cannot buy” – and, on the day he was shot, the single word entry read “paradise”. That, FS friends, is what’s known as a bit of a clue. Ridley Scott is now rumoured to be making a film of this delightful episode. Who can he have in mind for the role of Patrizia, a woman who once claimed “I would rather weep in a Rolls-Royce than be happy on a bicycle?” And surely Tom Ford – once Gucci creative director and now feted film maker – would be the perfect director? read more