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Is luxury back? Coach beats estimates with 2Q earnings

Posted on Tuesday, January 25th, 2011 by
Tuesday, January 25th, 2011


(A luxury obsessed consumer. Picture courtesy of Racked.com)

Coach reported better than expected profits today. Net income rose to $303.4 million, or $1 a share up from $241 million or 75 cents in 2Q of last year. Sales rose 19% to $1.26 billion and the company expects sales and profit to increase at least 10% through 2011. In addition, Coach plans to repurchase close to $1.5 billion of shares by June 30th, 2013.

With those kind of numbers it’s hard not to seriously wonder if the luxury retailers are finally back. Or is it?

Mike Tucci president of Coach’s North American retail division credits three main reasons for strong sales during the holiday season: product performance, digital strategy and progress on the new mens intiative. Tucci specifically notes Coach.com is the fastest growing full price channel in North America and experienced double digit growth during the holiday season. “We will continue to use digital capability as a touch point for the customers,” he said on the earnings call. So what are some of the pitfalls for Coach? For one, gross margin estimates missed the street’s expectations coming in at 72.4% compared to 73.2% due mostly in part by an increase in sales at their lower priced outlet stores. Second, Coach’s market share in Japan continues to contract. But, with expanding market share in China (Frankfort referred to China as “our fastest growing business.”) and a potential move of production to lower labor cost countries such as India, Coach may still see some bright days ahead in 2011.

Coach wasn’t the only luxury retailer to report stellar earnings supported by significant growth in China. Burberry reported a 36 percent increase in sales reflecting the deal to take over 50 stores from the retailer’s Chinese franchise partner. Likewise, the new “digitally enhanced” flagship store in Beijing drove significant traffic. “There is an underlying growth in the Chinese luxury sector anyway, but the main driver has been making sure our stores are properly stocked,” said Stacey Cartwright, chief financial officer. “Previously, lean levels of inventory meant a lot of sales were walking out the door.”

Luxury conglomerate Richemont reported a 7 percent increase in sales (omitting currency fluctuations) to $2.29 billion beating analysts estimates. The Asia-Pacific region accounted for 31 percent of Richemont’s sales during the quarter.

It’s difficult to ignore numbers like that especially when Consumer Confidence Index rose 7.3 points to 60.6. Feeling better about the economy mixed with a little “frugal fatigue” may be the exact combination luxury retailers need in order to have a full recovery. With that said, there is a Chloe handbag AND a pair Christian Louboutin heels that I’ve been eyeing for months now. 18 months to be exact.

J.Crew vs. Jack Spade: Which is more “new dad” gift worthy?

Posted on Monday, January 17th, 2011 by
Monday, January 17th, 2011

My best friend just had a baby. And while I’ve been busy purchasing cute clothes for him and fun mommy items for her, I sort of forgot about her amazing (and also a dear friend of mine) husband who is putting in double duty as diaper changer, baby feeder and nerve calmer. I know! I’m the WORST.

So you can imagine how psyched I was when the Jack Spade Spring 2011 look book crossed my path/in box today. For me, Jack Spade has always been the go to stop for all things hip-male/ perfect gift source for a new dad who fits the former description. With that said, I was compelled to check out www.jcrew.com since I’ve had $JCG on the mind for the past four weeks. Hate to say it, but I think $JCG is encroaching on Jack Spade’s market share of snazzy man bags and tailored over coats. Check it:

This Waxwear-Pocket Brief looks like can double as a work and baby bag. It’s on the high budget side ($365) but what a great design, no?

My friend’s husband does want a coat. This Herringbone Field Coat at $525 seems appropriate for a southern California winter.

I think new dads are in need of new shirts as much as moms. While I don’t think my friend’s husband will be wearing the Chambray Triple Stitch while burping the little one, at $225 it may be work shirt worthy.

Meanwhile, I am convinced part of the reason why $JCG is killing it on the earnings side is because of the mens business and thier “In Good Company” designer collaborations. For example, the Barbour Sylkoil Bedale Jacket ($379 shown at the top of this post) is almost as awesome, if not more than the Jack Spade Field coat.

And check out the Belstaff Colonial shoulder bag 554. To me t
his seems a little more functional as a baby bag for dads than the Waxwear Pocket Brief.

Instead of the present being a surprise I might cave and have him pick something out of the options listed. Can’t believe how far Jcrew has come from the roll sweaters of 1990.

The Style File Daily Cheat Sheet

Posted on Friday, August 20th, 2010 by
Friday, August 20th, 2010

(wsj)Fashion Week Outgrows the Tent

Mercedes-Benz Fashion Week isn’t simply moving from one park (Bryant) to another (Damrosch). It’s also set to expand throughout the entire Lincoln Center complex when it begins its stay there on Sept. 9. In an interview with The Wall Street Journal, officials from the performing-arts center described the range of programming, from runway shows scheduled for the complex’s illustrious theaters to a fashion-oriented exhibition at the on-campus branch of the public library. ”I want to see fashion on par with all of the other cultural activities here—the ballet, the opera,” said the director of fashion at Lincoln Center, Stephanie Winston Wolkoff, who is responsible for coordinating Fashion Week and the various parties—including Lincoln Center, its constituent organizations, Fashion Week producer IMG Fashion, designers, sponsors and community members—involved in the event. To that end, several designers have signed on to present in Lincoln Center venues beyond the Damrosch Park tents. Designers like Chris Benz, Christian Cota and Catherine Malandrino (none of whom previously showed at Bryant Park) will display their wares at locations normally occupied by New York City Ballet, New York City Opera or the New York Philharmonic. Ms. Malandrino will use the grand promenade and portico of Avery Fisher Hall, for example, and Jill Stuart will present her runway show on the promenade of the David H. Koch Theater. Mr. Cota will hold his show in the David Rubenstein Atrium on Sept. 11., and Mr. Benz will utilize the same space two days later. Nautica and Rachel Roy will stage their presentations at the New York Public Library for the Performing Arts. Ms. Wolkoff encouraged designers to make use of those venues out of an interest in combating what she saw as Fashion Week’s increasing decentralization during its years based in Bryant Park, when many designers opted to host shows off-site. ”It’s about engaging them and showing them that the industry is localized and centralized and modernized here,” Ms. Wolkoff said. “I want them to think of this as a destination and a campus, instead of a place to stop in and then leave.” The Rubenstein atrium will also host a public exhibition of work by young designers, intended to commemorate Fashion Week’s inaugural run at Lincoln Center. That exhibition will remain open from Sept. 14 to 16. Lincoln Center is also planning fashion-focused events, like lectures and film series, scheduled to take place after the tents come down. On Oct. 14, the New York Public Library for the Performing Arts will open “On Stage in Fashion,” an exhibition exploring collaborations between fashion designers and performing artists, including Calvin Klein and Halston for Martha Graham, Isaac Mizrahi for Mark Morris and Marc Jacobs for Lar Lubovitch. Garments included in the show will come from the Museum of the City of New York, which is co-curating the exhibition, as well as from opera and dance companies. read more

(wwd)Profiling the Value Retailers

Stores, like people, have personalities.Whether that personality determines the customer, or the customer the personality, is one of those chicken versus egg questions that’s a matter of perennial debate (well, at least among retail nerds). And it’s not only the high-end stores that have distinctive styles — the mass crowd does, too. Contrast the white linoleum and bright lighting at Target to the often-dingy feeling at some Wal-Marts, or the pile-it-high feeling at Forever 21 to the more restrained sense of Zara. Then there is Carrefour, which no matter how big still has a French élan, versus British hypermarket operator Asda, which seems to take all its leads from Wal-Mart, its parent.
H&M
Officials at H&M, which has more than 2,000 stores around the world, are fond of repeating its mantra: “Fashion and quality at the best price.” The Swedish fast-fashion giant’s stated aim is to dress women, men, teens and children for every occasion. Hence, its women’s collections range from basics like T-shirts to tailored classics like black pants, via sportswear, maternity clothes and avant-garde items inspired by style icons du jour like Lady Gaga. The Divided collection is aimed at younger consumers, with a heavy emphasis on denim, street fashions and funky accessories. Children’s clothes aim to combine practicality with fashion flair and cater to three age groups: zero to 18 months; 18 months to 8 years, and 9 to 14 years. H&M, which had sales last year of 118.69 billion Swedish krona, or $16.07 billion, is credited with popularizing high street-designer collaborations, as well as low prices, constantly changing inventory and a lightning quick supply chain. Since 2004, it has recruited the likes of Karl Lagerfeld, Viktor & Rolf, Stella McCartney, Roberto Cavalli, Comme des Garçons and Jimmy Choo to design limited edition collections that routinely draw hysterical throngs. In addition to selling clothes designed by Madonna and Kylie Minogue, H&M has enlisted celebrities including Rihanna, Jade Jagger, Timbaland and Katy Perry to design tops for its Fashion Against AIDS collections. The retailer is also committed to increasing its use of sustainable fabrics like organic cotton, recycled polyester and tencel through initiatives like its recent Garden Collection.

Metersbonwe

To call China’s mass-market casual apparel field crowded is a massive understatement. By keeping its head down, Shanghai-based Metersbonwe has managed to come out ahead. The company has around 1,800 stores across the country, is the market leader in lower-priced casualwear with estimated sales of 4 billion renminbi, or $590 million, yet still holds less than a 2 percent share of the market. How have they done it? According to Cai Minxu, the company’s media affairs manager, the success of Metersbonwe — which sells nothing but apparel, shoes and accessories — has come from a tightly managed supply chain, deep sales network and a clear message to customers. Though its long-standing slogan is “Be Different,” the company mainly sells clothes designed to help teens and college students fit in with their peers — a very important attribute for the majority of China’s youth. Cai said the company aims to double market share in coming years, with new campaigns and new reach. But the core message won’t really change. These are real clothes, at good prices, for the youth.“People ask what is the distinguishing feature of Metersbonwe,” said Cai. “I say the distinguishing feature is that it doesn’t have a distinguishing feature. We will move forward in the goal of having ‘no distinguishing feature.’”

Dollar store format

One of the few retail sectors that expanded during the recession, dollar stores opened units at a fast clip. The dollar chains compete against discount supermarkets such as Aldi and mass retailers such as Wal-Mart. While the dollar store category is heavily invested in food and consumables, it’s been making strides with apparel and beauty. Dollar General’s proprietary brand, Bobbie Brooks, is manufactured by Gildan, which also makes Open Trails for men. The chain added Hanes in March. Dollar General Corp., which has sales approaching $12 billion, opened 207 stores last year and now operates over 8,800 units nationwide, most averaging about 7,000 square feet. Family Dollar Stores Inc., which has 6,700 stores in 44 states, has been launching national apparel brands in an effort to boost the category, which accounts for 10 to 12 percent of sales, which totaled $7.4 billion last year. Family Dollar in 2007 bought the Bugle Boy brand. Dollar Tree Inc., with sales of $5.2 billion, is expanding Deals, a 160-store chain it bought in 2006, with 25 new Deals units this year. At Deals, prices are more than a buck, giving Dollar Tree an opportunity to sell merchandise it can’t sell at the restricted prices of its self-named stores. read more


(wwd)Bloomingdale’s Opens First Outlet

Bloomingdale’s has a new spin on shopping outlets, which it begins putting to the test today. The upscale chain is opening its first fashion outlet at Potomac Mills in Woodbridge, Va., seeking to maintain the allure of the treasure hunt, but with less digging through the racks. A second outlet will launch Aug. 27 in the Bergen Town Center in Paramus, N.J. “Both are very shoppable and, at the same time, the customer feels there is a density of merchandise,” said Arnold Orlick, Bloomingdale’s senior vice president in charge of outlets. “They’re clean, simple, bright environments that feel like Bloomingdale’s but they’re not.” Sixty to 70 percent of the merchandise comprises excess goods from vendors; 20 percent is clearance from Bloomingdale’s regular stores, and 10 to 20 percent is manufactured specifically for the outlets. “The lion’s share of the goods are 40 to 60 percent off,” Orlick said, though discounts can be as much as 80 percent. The retailer plans four or five openings a year if the concept succeeds. “Bergen and Potomac are very important tests,” Orlick said. “The question is whether there is cannibalization or no cannibalization” of Bloomingdale’s stores. The outlets are marked by black-and-white checkerboard aisles, evoking the B-way in Bloomingdale’s full-line stores. But the aisles are vinyl, not the usual marble. The black-white motif is repeated on signs and fixtures, offset by pops of color from the clothing and wall art resembling designer sketches. The outlets also have polished concrete floors and exposed ceilings, giving them the utilitarian vibe of a sleek warehouse or loft. “An outlet store can be stylish,” said Jack Hruska, executive vice president of creative services at Bloomingdale’s. And flexible, as well, he added, with rolling fixtures and shelves that can be shifted from wall to floor displays so departments may be reconfigured depending on the size of vendor shipments. With 22,000 square feet of selling space each, the outlets are smaller than those of most major competitors. They’re not piled as high with merchandise in order to reduce rummaging. They’re still heavily stocked with men’s and women’s apparel, accessories, shoes, kids’, outerwear and intimate apparel, but no home, cosmetics or fragrance. At the Potomac Mills unit, a row of signs in the center aisle includes the cheeky message “Are you dreaming? No, silly. This is real,” and touts everyday discounts of 25 to 70 percent. Labels range from contemporary to bridge to designer, including Tory Burch, Burberry, BCBG Max Azria, Michael Michael Kors, DKNY, Elie Tahari, Lauren by Ralph Lauren and Calvin Klein. Men’s brands include Theory, Joseph Abboud, Canali and Hugo by Hugo Boss. There’s an extensive shoe and accessories section with its own bank of registers and handbags from Botkier, Salvatore Ferragamo, Cole Haan and Tadashi Shoji. Shoe brands include Stuart Weitzman, Converse and Ugg, and there are sunglasses from Jimmy Choo, Gucci and Michael Kors, among others. Denim includes Paige Denim, J Brand, Not Your Daughter’s Jeans, Joe’s Jeans, Rock & Republic and Seven For All Mankind.  Bloomingdale’s will open an outlet in Dolphin Outlet Center in Miami in October and another in Sawgrass Mills in Sunrise, Fla., in November. read more

Madonna Slapped with Material Girl Lawsuit

Talk about a fashion don’t! Madonna is being sued over the rights to use the “Material Girl” name for the trendy juniors clothing line that she designed with daughter Lourdes. Apparel manufacturer LA Triumph slapped the superstar with a lawsuit Thursday, claiming that it had been marketing clothes under the “Material Girl” brand since 1997. “Our client and its predecessor have been continually selling similar clothes in similar retail outlets at similar price points under their Material Girl brand since at least 1997 and Madonna and her newfound company do not have the right to trade in the same space under this brand,” said an attorney for the company in a statement, alleging that their client faces “a risk of being subsumed by Madonna’s profile, obvious worldwide notoriety” and massive marketing campaign. Madonna’s much-buzzed-about Material Girl collection, fronted by Gossip Girl star Taylor Momsen, launched at Macy’s earlier this month. Madonna has not yet commented. read more


The Style File Daily Cheat Sheet

Posted on Monday, August 16th, 2010 by
Monday, August 16th, 2010

(wwd)Frugal Shoppers Appear Here to Stay

“Mindless excess is over.” So says Faith Popcorn, chief executive officer of marketing firm BrainReserve, when asked whether women will go back to their ferocious shopping habits once the economy fully recovers. “The entire consumer mentality has changed across the socioeconomic spectrum,” said Popcorn. “We understand and buy what we truly need, and we actually want less — stuff is clutter and we want simpler. We call it cashing out.” So is this the dawn of a New Consumer Age, as many experts contend, one that will force brands and retailers to make tectonic changes in the way they do business and transform the nature of shopping in America? Or is the consumer simply the same — just slightly different due to economic pressures? It’s a debate obsessing companies at all price levels and industries — from fashion to food to cars. Regardless of which side of the argument one falls on, it’s clear the shopping rules have changed and key trends include:

• The boom in e-commerce, making it easier for consumers to buy from home — and to comparison shop.

• Technology is now more fashionable than fashion — in other words, teens and twentysomethings would rather buy an iPad than a handbag.

• Social networks are driving real consumption, with friends telling friends about hot products or brands — meaning brands have to enter the conversation.

• The Great Recession has forced everyone, even the rich, to alter their shopping behavior and buy less.

• High levels of personal and household debt continue to constrict the Baby Boomers, who are looking for simplicity and value. “Women are somewhat more hesitant to loosen their purse strings — especially for nonessential items and major expenses that can wait,” according to “A New World Order of Consumption,” a Boston Consulting Group study. “Across all regions, they are more likely to seek out sales promotions, spend time shopping around for the best prices, and shop in discount stores.” The study noted consumers’ values and priorities are shifting. “Home and stability have taken on greater importance, while overt luxury and status have faded. The great hunt to find the best value at the lowest price remains firmly top of mind almost everywhere, particularly in Europe and the United States, where consumers enjoy the feeling of what they view as smarter shopping.” read more

(wsj)Fashion Gets a Deserved Night Out

Fashion and art have a habit of mingling, but the crossover tends to be most vibrant when there’s some money to play with. Remember when Karl Lagerfeld commissioned architect Zaha Hadid to create the Chanel Mobile Art Pavilion and sent it on a world tour? It was a bull market concept, if there ever was one. In the wake of the Great Recession, these grand creative collaborations seem part of a bygone era.  But a flicker of that energy is on its way, in the form of Fashion’s Night Out, a one-night-only shopping event slated for Sept. 10., in New York and elsewhere. In the city, about 1,000 stores will stay open late to offer in-house parties, freebies and a festival atmosphere. Now in its second year, Fashion’s Night Out was launched by Vogue magazine, the Council of Fashion Designers of America and the City of New York as a way to give the fashion industry a boost during the downturn. Though the evening is devoted to commerce, it is balanced with an artistic side. A glance at the event’s website, Fashionsnightout.com, which launches Monday, reveals that brands across the spectrum—from the popular (Anthropologie) to the Parisian (Balenciaga)—are exploring the interplay between fashion and the arts. One of the most direct connections will be at the City Opera Thrift Shop, on East 23 Street, where proceeds go to support the creation of new costumes for operas. In the past, City Opera has commissioned Isaac Mizrahi to create costumes for “Platee” and “King Arthur,” as well as Zandra Rhodes for “The Pearl Fishers.” This season, in conjunction with FNO, the upscale resale shop will present its annual fall preview on Sept. 10. To offer a glimpse at the creative process, the shop will display a series of costume sketches by top designers including Carolina Herrera, Isabel Toledo and Jason Wu. At the Balenciaga store, on West 22nd Street, a series of six self-portraits by artist Cindy Sherman will be on display from 8 p.m. to 10:30. Ms. Sherman, who is known for transforming herself into wildly divergent characters, dressed herself exclusively in Balenciaga for the portraits, which are on loan from the private collection of Francois Pinault of PPR, the parent company of Balenciaga. The portraits will be making their U.S. debut at the event, which will also include model Karen Elson singing songs from her first album, “The Ghost Who Walks,” produced by her husband, rock musician Jack White. (Jazz singer Karrin Allyson is also slated to give a free performance at 6:30 p.m. on the second floor of the Time Warner Center, where shops will be open until 11 p.m. The appearance is a preview to her September shows at Dizzy’s Club Coca-Cola.) Elsewhere, a site-specific installation is planned at the Yigal Azrouël store, in the Meatpacking district, where Mr. Azrouël is collaborating with the East Village-based artist and jewelry designer Megan Marrin. Together, they’ve been developing a project that has evolved from transparent, vellum panels to broken glass and black plastic wrapping. “I really wanted to work with him, rather than bring previous work in,” said Ms. Marrin, adding that the sculptural work will be not be hung on the walls, necessarily, but rather incorporated into the store’s cavernous space. read more

(forbes)Will Chinese Shoppers Embrace Luxury Goods–Sans Logo?

This week, Britain’s Telegraph reported on the recent luxury industry trend towards subtler, “anti-bling” collections that minimize conspicuous logos in favor of more low-key designs. According to the article, recent moves by Gucci to downplay its trademark “G emblem” have paid off, as the company recorded a surge in profits after moving in this direction. As Francois-Henri Pinault, chairman and chief executive of its French parent PPR, said: “Our groups are moving toward fewer logos, more discreet luxury. It’s a question of adapting our ranges very rapidly to this new perception of luxury, a luxury which is more subtle, more sophisticated.” Noting the visible “de-logo-ification” seen among brands known for over-the-top embellishments in the pre-financial-crisis days, the Telegraph cites a new study by Joseph Nunes, professor of marketing at the University of Southern California, which found that big spenders are “willing to pay a premium to have ‘quiet’ goods without a brand mark.” So there we have it: top luxury houses are largely moving away from ostentation and flash and towards more subtlety, sophistication and “quiet” indulgence. But herein lies a serious point of contention in the luxury world. Although luxury shoppers in established, recession-stung markets may gradually be lured back into stores by understated items bereft of obvious logos, will this trend appeal to potential buyers in emerging — and lucrative — markets like China, where garish still equals good? This is precisely the question asked by a number of Chinese luxury sites and blogs this week. The author of the New Express article, “Will You Still Buy Logo-Free LV?” predicts that it will be years for the logo-mad mindset prevalent in the Chinese luxury industry to change, and the ChinaNews article “Low-Key Luxury: A Hard Sell For Chinese Consumers” notes the cool reaction that many Chinese shoppers have had to understated items. The article also quotes a professor at Shanghai’s Fudan University who explains the “peripheral effect” that often dictates a Chinese shopper’s choices. From ChinaNews (translation by Jing Daily team):

At the Louis Vuitton flagship store at Shanghai’s Lippo Plaza, workers showed me that nearly all of the new products in the epi leather collection lack any obvious LV logos,and  instead have only a small embossed LV logo in the lower right-hand corner. Nonetheless, considering these pieces all cost more than 10,000 yuan (US$1,476), they still belong to a high-end product line. [As one clerk told me,] “The new classic canvas monogram collection isn’t that popular with buyers. The most popular items are still those ones that have a prominent LV logo.”

A clerk at the Gucci store at Shanghai Times Square explained that the “Techno Horsebit” series, which doesn’t have any obvious logos, hasn’t had many buyers either.

The industry insider Frederick (no further name given — JD) recently said that when Chinese consumers purchase a luxury item, they’re not just buying the product but are paying for all of the added value denoted by this object — identification of status, display of economic power and so forth.

Cheng Shi’an, the head of Fudan University’s Advertising Department in Shanghai, believes that luxury brands rely on the “periphery effect” (外围效应) [in China]. If a luxury buyer’s coworkers and friends can’t tell the price of the brand, even if this person spent a lot of money on a given item, their satisfaction level will still be low.

read more

(wwd)Retail Sales Fall as Consumer Prices Rise in July

Two government reports released Friday highlighted how far the economy still has to travel to full recovery, but offered signs the outlook is improving compared with last year. The U.S. Commerce Department said retail apparel sales fell in July compared with a month earlier, but specialty store and general merchandise store sales improved over last year. The Labor Department reported apparel prices were higher in July compared with a month earlier, but declined year-to-year, tamping down inflation fears. Clothing and accessories store sales dipped 0.7 percent in July to $18 billion compared with June, and department store sales fell 1 percent to $15.4 billion, the Commerce Department said. Sales at general merchandise stores, a category that includes discount and department stores, dropped 0.2 percent to $50.3 billion for the month. In yearly comparisons, specialty store sales advanced 3.8 percent, while department store receipts fell 0.8 percent. General merchandise stores saw sales increase 2.4 percent. “Household spending remains tepid amid concerns about economic stability,” said Jack Kleinhenz, chief economist for the National Retail Federation. “Current data on the economy is mixed, which signals that retailers will continue planning with caution until a long-term trend can be established.” July results were not alarming, said Kevin Regan, senior managing director and retail industry expert with FTI Consulting, but showed the depth of consumer reluctance to start spending again in the face of daily reminders that unemployment remains high and foreclosures still loom over many homeowners. Sales comparisons to July 2009 were easy, he pointed out, tempering the year-over-year boost reported in some categories, but there were still pockets of strength. Strong sale results this spring gave rise to muted optimism, “but that momentum is clearly lost,” said Regan, adding the last few months have brought the retail environment “back to earth.” In the overall economy, the sales gain was slightly less than expected at 0.4 percent in July compared with June to $362.7 billion, and advanced 5.5 percent year-over-year. Meanwhile, retail apparel prices rose a seasonally adjusted 0.6 in July compared with a month earlier, but declined 0.3 percent in 12-month comparisons, the Labor Department said Friday in its Consumer Price Index. Charles McMillion, president and chief economist with MBG Information Services, said it’s unusual for apparel prices to rise while retail receipts are down. “This makes perfect sense for consumers, but I just don’t understand retailers,” McMillion said, pointing out that, with shoppers focused on deals, any price increases could scare them away and drive sales down. Prices for women’s apparel rose 1.6 percent in month-to-month comparisons, but fell 0.3 percent compared with July 2009. Men’s apparel prices dipped 0.3 percent in July, but were up 1.1 percent from a year earlier. The overall CPI rose 0.3 percent in July compared with June, in line with expectations, and advanced 1.2 percent from a year earlier. The so-called “core index,” which excludes the volatile food and energy sectors, inched up 0.1 percent in July and advanced 0.9 percent year-over-year. “The July report on core consumer prices yet again points in the same direction — in competitive markets for goods and services there are absolutely no signs of any inflation pressure,” said Brian Bethune, chief U.S. financial economist with IHS Global Insight. read more

The Style File Daily Cheat Sheet

Posted on Thursday, August 12th, 2010 by
Thursday, August 12th, 2010

Celebrity, Proprietary Brands Squeeze Independent Labels

How can the little guy compete against Madonna? As retailers seek to add more celebrity and proprietary brands, there’s no end in sight to exclusive pairings.  And it’s getting a lot tougher for other labels to compete. Brand exclusives and private label are increasing their share of big-store real estate, commandeering dedicated advertising and promotional support, not to mention buying dollars. Mary Gleason, president and chief executive officer of Schottenstein Luxury Group, whose brands include Judith Leiber, called the movement to proprietary brands “a game changer.” She noted that if a store has two brands that are similar, and one is an exclusive, “that’s even more reason to leave one out.” Stores such as Macy’s, Penney’s and Kohl’s “are big enough to make the commitments to those brands worthwhile. To get a Sean John or Tommy Hilfiger at Macy’s, or a Liz Claiborne at Penney’s, they’re not going to Dillard’s to make those deals. Those are huge commitments,” she said. “It raises the bar on what you can bring to a retailer. Five, 10 years ago, you could go to Penney’s and Kohl’s with a B-level brand. You can’t go with a B-level brand anymore.” She contended that “A” brands don’t have to worry about being squeezed out. “Where the challenge lies is with the ‘B’ and ‘C’ brands. Brands which have made-up names and are not marketed, or don’t connect with the consumer,” will have problems. “Why should a retailer build a no-name brand for a manufacturer when the store can build up its own brand?” “It’s made the open-to-buy [for non-exclusive brands] that much smaller from the retailers’ point of view,” said Andrew Jassin, managing director of Jassin Consulting. “With department stores narrowing the number of vendors they carry, those without an exclusive will have a much harder time competing. The stores have been reasonably selective. Certain exclusive brands will get all the promotional and advertising dollars behind it and, without that, it doesn’t create any buzz.” read more

Industry Touts Fashion’s Night Out

If there was any real news from the press conference to unveil this year’s Fashion’s Night Out at City Hall on Wednesday, it was that, unlike its European peers, the American fashion industry does not go on break in August. Standing behind the podium where Mayor Michael Bloomberg kicked off a series of speeches, the group of designers and industry executives included Tory Burch, Tommy Hilfiger, Francisco Costa, Donna Karan, Tracy Reese, Kenneth Cole, Zac Posen, Terry Lundgren, Carolina Herrera, Jack McCollough and Lazaro Hernandez, Vera Wang, Mary-Kate Olsen and Prabal Gurung (whom the mayor repeatedly referred to as “Prooble”). Sitting in the audience were Thakoon Panichgul, Alexander Wang, Phillip Lim and a few others, and they listened to the mayor offer some anecdotes about the launch event last year and outline details of the Sept. 10 event. “Our administration is committed to doing whatever it takes to make sure this industry continues to thrive,” the mayor said. “This September, [New York Fashion Week] will for the first time be at its new home at Lincoln Center,” he added. “We think this new location will give fashion week the space to grow and flourish, and cement its reputation as a premier global event. We want to make sure the entire city reaps the benefits, and that’s why last year we started Fashion’s Night Out.” And the City of New York, Vogue, the Council of Fashion Designers of America and NYC & Company are hoping to make it even bigger this year. So far, almost 1,000 stores have signed up to participate in Fashion’s Night Out and, once again, they have committed to keeping their doors open until 11 p.m.
For the first time, the event will feature Fashion’s Night Out: The Show, the city’s largest-ever public fashion show scheduled on Sept. 7 at Lincoln Center, with tickets starting at $25 going on sale on Aug. 19 at the Lincoln Center box office and proceeds benefitting the NYC AIDS Fund. According to the mayor, cbs.com will live-stream the runway show. The network will also present an hour-long prime-time special on Sept. 14 about the making of the event. read more

Gleek chic: U.S. store launches fashion line inspired by Glee

You’ve seen the show and memorised the one-liners. Now Glee fans can take their obsession a step further with a fashion line inspired by the hit television show. Among the garments on offer will be ‘Cheerio’ uniforms for aspiring Quinn Fabrays, and preppy miniskirts in the style of goody-two-shoes Rachel Berry. There will even be tracksuits inspired by the show’s antihero Sue Sylvester. The line, which launches on Sunday, is keenly priced, with T-shirts from around £15. But though it will be stocked in over 600 stores, it’s exclusive to U.S. department store Macy’s – so unfortunately won’t be on sale on our side of the Atlantic. Macy’s and the Fox television network are anticipating a huge response from the show’s fans, who call themselves ‘Gleeks’, and have invested in an extensive marketing campaign. ’Glee fans just don’t watch the show, they live it,’ said Robert Marick, of Fox Consumer Products. ’This retail launch will provide fans a very personal way to extend the experience and express their own Glee personality. ’Macy’s has treated this launch as the kind of event that is a true homage to the show,’ he added. Glee was an international hit when it launched earlier this year, and recently received 19 Emmy nominations. It has made huge stars of its cast, which includes Jane Lynch as Sue Sylvester, Lea Michele as Rachel Berry and Matthew Morrison as Will Schuster. The second season is due to air in the UK later this year. read more

Chinese spending power underestimated, study says

Chinese households have far more money than previously thought, according to recent research, which says casino operators, property companies and even European luxury goods makers could be about to benefit from the rise of these deep-pocketed consumers. The research — conducted by China Reform Commission professor Wang Xiaolu and commissioned by Credit Suisse — found official estimates of household income were well wide of the mark. On average, mainland China’s urban household income was 32,150 yuan ($4,746), or 90% above the 16,880 yuan indicated by official data, according to the study which assessed spending and income patterns in China in 2008. The study found that the “hidden” household disposable income could be as high as 9.3 trillion yuan in 2008, equivalent to about 30% of China’s gross domestic product. Most of this wealth — 63%, according to the survey — is concentrated in the top 10% of Chinese households. That means the top bracket is about 3.2 times richer than official estimates suggest. The report also said the government’s flow of funds data don’t accurately track the income of top households because much of it are the results of “illegal or quasi-legal” activities. Wang reports “grey” disposable income — the shortfall in the figures revealed in the economic census and what households really received — at 5.4 trillion yuan in 2008. Credit Suisse said the finding helps explain China’s growing wealth gap and could help explain “the rationale of the Chinese government’s recent strong push for faster wage growth and a more equitable income-distribution pattern. Credit Suisse said investors may be setting their sights too low when it comes to gauging the impact of this vast pool of wealth. read more

The Style File Daily Cheat Sheet

Posted on Wednesday, August 11th, 2010 by
Wednesday, August 11th, 2010

(wsj)Penney Weaves New Fast-Fashion Line

In an attempt to win over fashionable young women, J.C. Penney Co. is going to try running with a faster crowd. This week, the Plano, Texas-based retailer unveiled an unconventional collaboration with Mango MNG Holding SL, the closely-held Barcelona chain known for whipping up cutting edge looks that go from design studio to store shelves in as little as four weeks. The move is a big bet for the 108-year-old Penney, which has been trying to grab market share from more stylish competitors to spur sales as overall demand for women’s apparel is sluggish. The two retailers are a fashion mismatch. Penney’s average customer is a 35- to 53-year-old bargain hunter who shops four times a year. Mango, founded in 1984, caters to style-obsessed twenty-somethings who shop every month and pay full price. By delivering new merchandise to stores at least once a week, the chain has trained customers to buy early and often. But for Penney, that’s the draw. “If you only deliver four times a year, there’s only a reason to come to the store four times a year,” Chief Executive Myron E. Ullman III said at a recent conference. Mango is one of the hottest retailers in Europe, where it operates hundreds of stores and its ads feature celebrities including Penelope Cruz and Scarlett Johansson. Unlike other fast-fashion chains such as Inditex SA’s Zara and Hennes & Mauritz AB’s H&M, the chain is little-known in the U.S., where it only has 12 retail outposts. Revenue last year was €1.15 billion ($1.82 billion). The exclusive-to-Penney brand, called MNG by Mango, will launch at 77 stores on Aug. 18 and roll out to 600 of Penney’s 1,100 stores by next fall. Penney is investing in fixtures such as hardwood floors, black chandeliers and modern tables that showcase looks like skinny jeans and lace-embellished blouses. In-store boutiques, averaging 1,000 square feet, will be refreshed every other week—twice as fast as Penney’s other brands. Prices will be in the mid-to-upper tier of Penney’s offerings, with skirts ranging from $50 to $100, and jackets from $60 to $160. The Mango-Penney collaboration comes as U.S. apparel retailers have been fighting for market share. The women’s apparel market has been essentially flat for the past three years, according to market researcher NPD Group, but “there has been huge growth in dollar volume in fast fashion,” says Liz Sweney, senior general merchandise manager for Penney’s women’s businesses. read more

(wwd)American Apparel to Miss Filing Deadline

As other retailers prepare to start reporting their second-quarter results this week, American Apparel Inc. has informed the Securities and Exchange Commission that its numbers will neither be punctual nor profitable. The increasingly embattled purveyor of chic basics said in an SEC filing late Tuesday that its new independent auditor, Marcum, needs more time to work through the figures for the second quarter, ended June 30, as well as those for the first quarter, which have yet to be filed. The company offered a summary of what it expects its second-quarter figures to look like, and it contained little in the way of encouraging news. The firm anticipates a second-quarter loss against a net profit from the year-ago quarter. Net sales are expected to drop as declines in its retail business were only partially offset by increases in its sales with wholesale customers. Furthermore, the shift in its business towards wholesale, coupled with higher production costs, is expected to produce lower gross margins for the second quarter against its 2009 counterpart. In effect, American Apparel now has two sets of auditors trying to make sense of its books. Deloitte & Touche LLP resigned the account last month after identifying “material weaknesses in internal control” with respect to the closing and reporting of its figures. Additionally, American Apparel told the SEC, Deloitte became aware of certain information “that if further investigated may materially impact the reliability of either its previously issued audit report” or the financial statements made regarding fiscal 2009. With Deloitte’s resignation, American Apparel brought back its previous auditor, Marcum, with which it had worked during fiscal 2008 and which had issued an adverse opinion about the company’s financial reporting in early 2009. While Deloitte looks into the veracity of previous reports, Marcum will have to hustle to compile information for both the first and second quarters of the current fiscal year. American Apparel told the SEC on May 11 that its first-quarter report would be delayed — it still hasn’t been filed — and then on Tuesday made the same statement about its second-quarter data. The audit problem is but the latest in a series of crises for the once high-flying chain. London-based Lion Capital helped it pay off a $51 million loan from SOF Investment in March, but just two months later American Apparel fell out of compliance with a covenant of the Lion loan covering its debt-to-EBITDA ratio. Last September, it laid off 1,500 immigrant workers who couldn’t show that they were in the U.S. legally, touching off a labor shortage that further hurt results. It received a vote of confidence in June when Ronald Burkle of The Yucaipa Cos. LLC reported that he held over 4.3 million shares of AA, giving him a 6 percent stake in the firm. read more

(business insider)Goldman Sachs Says Jeggings Are Going To Be This Year’s Big Fashion Trend

The latest fashion trends, according to Goldman Sachs: military, jeggings, and the same prints and plaids you wore last year. Apparently analysts at Goldman recently published a report on Back To School fashion trends, which invites a fun thought: ideally Blankfein in jeggings (a new abbreviation for jean leggings), but also the concept of Goldman businessmen analyzing the latest fashion trends and coming up with jeggings and military. The bank’s first three predictions don’t exactly seem inspired, they’re on point with Fox BusinessNew York fashion week, and Teen Vogue, but until we get a hold of the full report from Goldman to print (we asked for a copy), we’ll let your imagination run wild. For now, here’s a brief round-up of what Goldman thinks will be trendy this fall, from Benzinga: Back-to-School fashion trends: military styles, jeggings, and carries over prints and plaids from last year. And here’s what it means for the market: Driven by persistent hot temperatures, sales of classic B2S long denim have been weak. If the weather doesn’t start to cool down, analysts expect that inventory could begin to build and pressure margins. We were very encouraged by traffic trends at ANF and continue to believe stabilizing the domestic business will unlock greater value from international growth. We also remain positive on LULU which has substantial comp-store and footage growth potential and should be much less vulnerable to weather and competitive pressures this fall. read more

(wwd)Macy’s Ups Outlook, Second Quarter Profits Surge

Localized merchandising, exclusive brands and private label development helped Macy’s Inc. post a better-than-expected second-quarter profit Wednesday. The department store also raised its full-year outlook. For the period ended July 31, the Cincinnati-based retailer said its net income grew to $147 million, or 35 cents a diluted share, versus income of $7 million, or 2 cents a share, in the year-ago quarter. Revenue for the period rose 7.2 percent to $5.5 million, from $5.2 million. Wall Street was looking for EPS of 29 cents on sales of $5.50 billion. ”We believe our business is beginning to hit its stride after implementing significant structural and organizational changes over the past two years,” said chairman, president and chief executive officer Terry Lundgren. “While the economic environment remains uncertain, Macy’s and Bloomingdale’s have a terrific opportunity to continue to take market share and grow our business profitably.” Macy’s increased its annual earnings guidance to between $1.85 and $1.90 a diluted share, up from prior guidance of $1.75 to $1.80 a share. Analysts expect earnings of $1.87 a share. read more

The Style File Daily Cheat Sheet

Posted on Tuesday, August 10th, 2010 by
Tuesday, August 10th, 2010

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.

The Style File Daily Cheat Sheet

Posted on Thursday, July 15th, 2010 by
Thursday, July 15th, 2010

(wwd)Men’s Spring 2011 Trend:
By the Sea

“Casual dressing infused with a seaside flair and a bohemian attitude is the unifying message for the spring collections being shown at New York market week. The must-haves are pleated shorter shorts, oversize summer knits and airy trenches. Vendors are favoring creams and beiges in linen and cotton blends for an overall fun and relaxed season.”

(the washington post)French burqa ban, Iranian mullets: Faith and the fashion police

“The Washington Post’s Edward Cody reported Tuesday that the French parliament’s lower house voted 335-1 to ban its female citizens from wearing the burqa or similar Islamic facial veils. The legislation imposes a $185 fine or compulsory ‘citizen lessons’ to any woman found violating the measure, which awaits final vote in the Senate. Do the citizen lessons include tips on how to wear the beret, instead? The legislation’s advocates say that the full facial coverings undermine French values and oppress women. But in previous protests over the legislation, veiled French women have chanted the mantra “Where is France? Where is tolerance? The veil is my choice.”

In another faith and fashion moment, last week the Iranian government announced a ban on ‘decadent’ Western haircuts in order to “confront the cultural assault by the West.” On the Iranian chopping block?: The very anti-authoritarian American mullet as well as the manlytail -otherwise known as the male ponytail. Who knew David Beckham, Andre Aggasi and Chuck Norris were so subversive? Gawker called the mullet ban “a move of government oppression we can sort of get behind” and bloggers had a field day. But France and Iran’s clash with ‘the other’ in their midsts is profoundly serious. France struggles to understand and assimilate its Muslim population (5 million strong), while Iran’s religious regime lurches for control over its progressive populace. Both states want to legislate what not to wear, despite the desires of their citizens. In the French example, the government seeks to keep the sacred out of the secular; in Iran, the religious government wants to keep the secular West out of its Islamic state. Should France and Iran tell their citizens how to dress? What does such legislation say about French and Iranian values? Are the policies oppressive or true to the ideals of the states? What do the fashion police say? read more

(wsj)H&M Same-Store Sales Rise 9%

Swedish fashion retailer Hennes & Mauritz AB Thursday reported a 9% rise in same-store sales in June after its sales a year earlier were weighed by slow consumer spending in the economic downturn. H&M, the world’s third-largest fashion chain after U.S.-based Gap Inc. and Spain’s Inditex S.A., slightly underperformed expectations for an 11% rise in stores open longer than one year. The company’s total sales, including sales in new stores, were up 20% in June, just below forecasts of a 21% rise. A strong sales increase had been expected after H&M in its second-quarter report last month said its total sales from June 1 to June 22 were up 22% compared with the same period a year earlier. Thursday’s sales report comes after H&M’s rival Gap last week said its same-store sales in June were largely flat compared with a year earlier. H&M said its total number of stores world-wide increased 13% to 2,062 in June from 1,827 a year earlier. The company, which is expanding rapidly in markets world-wide, last month said it expects to open 180 new stores in the second half of 2010 in countries including Germany, the U.S. and China. read more

(wwd)Men’s Retailers Adjust to Economic Challenge

Men’s retailers are looking over their shoulders — and hope that ill winds aren’t gaining on them. On the eve of New York market week, men’s merchants said business is stable, but far from spectacular. Sales have picked up from the depths of the recession last year, although customers — including luxury shoppers — are still holding back and looking for value, forcing retailers to adjust their buying strategies and tightly edit assortments.  The slow and difficult climb out of the economic downturn is shadowed — and sometimes overshadowed — by concerns about growth, deflation, falling consumer confidence, persistent high unemployment, government budget shortfalls, an uneven stock market and other factors. “Maybe we should have done this when business was good,” said Dan Farrington, general merchandise manager of the Mitchells Family of Stores. Men’s specialty stores will be in New York this week to attend trade shows — Agenda, Capsule, ENK New York and MRket — and shop showrooms. Lightweight sport coats, slim-fit suits and sport shirts to coordinate with denim are at the top of shopping lists.  “Things are certainly better,” said Ken Giddon, president of Rothmans, a New York City-based specialty store. “The fear factor is gone, but we’re not racing to the bank with all the money we’re making.” David Rubenstein, owner of Rubensteins in New Orleans, was apprehensive. “I’m kind of concerned, I really don’t know how to project business,” he said. Although his inventories are in good shape — even light in some areas — Rubenstein foresees fall getting off to a late start. Business for spring and summer has been good, however, and he expects to post a high-single-digit increase. Top sellers include seersucker, cotton-linen pants, unconstructed lightweight jackets and hybrid sport dress shirts. Sport coats are still solid and clothing sales are steady, he said.  read more

(wwd)Hilfiger Launching Collection and Retail Concept

Tommy Hilfiger is out to woo the twentysomething customer with a new men’s and women’s lifestyle collection that has its own retail footprint. Meet Tommy, the brand’s effort to lure customers from American Apparel, Gap, Abercrombie & Fitch and American Eagle Outfitters. The line will target an audience with a median age of 25 and veer away from the preppy looks that are the mainstay of Hilfiger’s collection sold exclusively at Macy’s. Tommy aims to focus on handmade details, distinctive materials and unexpected pairings for unique looks. For example, a washed, tailored jacket could be mixed with vintage-inspired long johns and hand-painted brogues, or a men’s wear shirt coupled with a slouchy boy-fit sweatshirt and destroyed denim and cropped motorcycle boots shown with a feminine clutch. “Tommy gives us more flexibility and freedom to do something truly conceptual,” said company founder and principal designer Tommy Hilfiger. Tommy is “absolutely a reaction” to the ubiquity of specialty store environments, said Gary Sheinbaum, chief executive officer of Tommy Hilfiger USA. “The way we’re going to merchandise Tommy will be distinctive and different, not so formulaic. It will be more of a fun, dynamic experience. The product itself, we feel, is going to be a fresh take on the preppy traffic, done in a fresh, young, cool way. When we look around, we don’t see anyone doing anything like this.” Knits will sell for $24 to $59, and denim, $79 to $129. Outerwear will start at $129 for men and $139 for women. read more

The Style File Daily Cheat Sheet

Posted on Tuesday, July 13th, 2010 by
Tuesday, July 13th, 2010

(wwd)Wal-Mart Charts New Course

“It’s hard to nudge an 800-pound gorilla in a different direction, but Wal-Mart U.S. appears to be doing just that. With same-store sales declining for the last four consecutive quarters and traffic decreasing, Wal-Mart needs to develop — and execute — new retail concepts if it is to grow beyond the rural and exurban markets that it has almost saturated in the U.S. To be sure, chasing trendy fashion isn’t in the cards for a chain whose apparel business is a chronic underachiever. When vice chairman Eduardo Castro-Wright relinquished his job as chief executive officer of Wal-Mart U.S. on June 29, he set in motion a management shake-up that will bring fundamental and cultural changes to the $400 billion retailer. Bill Simon, who succeeds Castro-Wright, seems to share the belief of Wal-Mart Stores Inc. ceo Mike Duke that the world’s largest retailer should return its focus to core competencies — moving enormous quantities of goods around the world as cheaply and efficiently as possible, rather than the more creative and style-driven marketing and merchandising. “The new ceo [Duke] is directing the company more toward logistics and operations and not marketing,” said Bill Dreher, a retail analyst at Deutsche Bank. Castro-Wright, who retains the vice chairman title, became president and ceo of global.com and global sourcing, allowing him to relocate to California, where his wife is recuperating from a heart transplant. He has been described as an innovative thinker and was the architect of the store remodeling initiative Project Impact and its transformational merchandising and marketing programs.” read more

(wwd)Prada Gets $455M Loan

“Prada SpA has negotiated a three-year loan agreement of 360 million euros, or $454.8 million at current exchange, which will be used to refinance a long-standing debt and to propel the company’s retail growth, its top priority. Prada is eyeing an initial public offering for the fourth time, possibly as soon as the first quarter of 2012. The timing coincides with the expiration of a 450 million euro, or $568.5 million, debt, which will partly be written off by this fresh loan, secured at lower interest rates. The brand’s goal is to generate more than 70 percent of consolidated turnover from directly operated stores next year. The brand has 280 units in 76 countries. The new loan is a move that will help both the banks and Prada, said Armando Branchini, vice president of Milan-based consulting firm Intercorporate. “Prada is currently undergoing a very positive sales growth, and I believe that by 2013 the return of the company’s retail investment will outdo this loan, especially with today’s cost of money,” he said. “Having more sales points will also make Prada more palatable for the IPO.” Prada spokesman Stefano Cantino said it was premature to say how the loan would be divided. Regarding store openings in the pipeline for this year, there are 30 new ones planned, with a focus on Asia-Pacific. “We are also strengthening our presence in Europe with openings in Frankfurt, Prague, Berlin and Lisbon,” Cantino said. Prada SpA reported operating profit in the first quarter ended April 30 rose almost sixfold, given a boost by strong retail sales in the U.S. and the Far East. Earnings before interest, taxes, depreciation and amortization increased to 64 million euros, or $86.4 million.” read more

(wwd)Burberry Sales Rise 31 Percent in First Quarter

“Fueled by sales of non-apparel and outerwear, Burberry revenue rose 30.6 percent to 282 million pounds, or $420.2 million, from 216 million pounds, or $321.8 million, in the first quarter ended June 30, the company said Tuesday. Figures have been calculated at average exchange rates for the three-month period. The first quarter revenue figure does not include Burberry’s Spanish operations, which are to be discontinued as of the fall 2010 season. Beginning with the spring 2011 collection, Burberry will sell its global collection, rather than the locally-produced one, in Spain. Including Spanish operations, sales in the three-month period would have increased 27.1 percent to 291 million pounds, or $433.6 million, from 229 million pounds, or $341.2 million. “The clear momentum in the business and our robust financial position together reinforce our confidence to increase investment for the future, while continuing to enhance the brand,” chief executive Angela Ahrendts stated. She added that the company would open 20-30 stores in the current year, mostly in the Americas and Asia Pacific regions.” read more

(bloomberg)Harrods Sees Profit From Islamic Fashion as Qatar Takes Control

Fashion designer Hind Beljafla makes abayas to match the Gucci shoes and Hermes handbags of high- spending women in the Gulf. Now these women can buy her elegant versions of the black Islamic robes, which obscure the contours of a woman’s body, when they head to London this summer to escape the Arabian Peninsula’s sweltering heat. Harrods started selling abayas by Beljafla’s DAS Collection in June, a month after Qatar’s sovereign-wealth fund bought the landmark store. “Muslim women are like any women around the world: they love fashion and love shopping,” Beljafla, 24, said in a July 1 interview in her Dubai store. Together with her 26-year-old sister Reem, she uses splashes of color, embroidery and even leather and metal studs on the plain black abaya. Fashion houses in Milan and Paris are waking up to the commercial potential for Muslim women’s clothing that respects religious values and sets new standards for style. The global Muslim fashion industry would be worth $96 billion if half of the world’s 1.6 billion Muslims spend just $120 a year on clothing, according to French Fashion University Esmod in Dubai. Gas exporter Qatar ranks among the world’s wealthiest nations, with a gross domestic product per capita of $121,000, while Saudi Arabia sits on a fifth of the planet’s oil reserves.

John Galliano was among 21 designers who participated in a Paris show in June 2009 at Hotel George V, owned by Saudi Prince Alwaleed Bin Talal. The made-to-measure abayas displayed there, worth up to $10,000, were donated to buyers, including members of the Saudi royal family. Saks Fifth Avenue, which hosted the event, then put designer ready-to-wear abayas on sale for as much as $12,000 at its stores in the Saudi cities of Riyadh and Jeddah. The abayas are displayed alongside designer evening gowns on the women-only floor of a shopping mall in Riyadh’s glass skyscraper, the Kingdom Center, owned by Alwaleed. At the top end of the market, Saudi princesses sometimes buy 15 to 20 evening gowns for as much as $20,000 each after ordering Saks to bring a selection of the latest Paris and Milan collections to their palaces, store manager Mohammed Nafisa said. They want abayas by the same designers to match. “They normally buy an outfit to be used only once at an evening reception,” which is an all-female gathering, he said. Saudi Arabia, which follows a strict interpretation of Islam, forbids mixing in public between men and women unrelated by family.” read more

The Style File Daily Cheat Sheet

Posted on Friday, July 9th, 2010 by
Friday, July 9th, 2010

Couture Roundup:

Not everyone had a good time. While Couture fashion is usually seen as beautiful works of art sweeping down a runway, some had their eye on other things.  Author Tanya Gold talks about the world of couture as being full of “bloated egos and skinny models.” However, she fails to notice that the components of a fashion show ultimately come together to showcase a designer’s work as a marketing brand extension. And guess what? Sometimes skinny models are a part of it! Here is her take on “oat-katuur.”

(telegraph) “This week, I went to the haute couture – pronounced “oat koturr” – shows in Paris, where people watch £100,000 dresses proceed down a catwalk and then out, via photographs, to you. I have always been fascinated by the world of haute couture, even though I only get the cheap dress leakage in Grazia. Could it be magic? At Giorgio Armani, I watch the models walk towards the photographers, with that strange here-are-my-genitals mince. I know the dresses are there – they are beige, according to the special dress menu on my seat – but I cannot see them. I am too amazed by the models in the flesh or rather, in the where-is-the-flesh, baby? Their forearms are bigger than their upper arms. “Nice,” says a woman next to me. “Very nice.” I am in the third row, next to a fashion journalist in a satin boiler suit. “What do you think of all this?” she asks. Still amazed by the ratio of forearm to upper arm at Armani, I take a breath and tell the truth. I think it’s silly, I say, and dangerous. I know about the processes of haute couture – how the dresses are handmade by artisans and are as beautiful inside as out. But I do not care because they are stuck on women who should be in the anorexia ward of the Priory. Her smile falls off, to lie somewhere in the recesses of her boiler suit. “All journalists say that!” she shouts. “It is so dumb! Susie Orbach [the author of Fat is a Feminist Issue] says that, too. Why blame fashion for your own problems?” read more

Valentino Couture Fall 2010

Jean Paul Gaultier Couture Fall 2010

Elie Saab Couture Fall 2010

(wwd)Li & Fung Goes on Buying Binge

“Li & Fung Ltd. and its LF USA subsidiary are just getting started. After disclosing three acquisitions Thursday involving an initial cash outlay of $140 million and a string of licensing agreements, executives told WWD there are more deals in the pipeline. Among the licensing deals, LF USA is pushing ahead with a new brand-building model inspired by entertainment that calls for the launch of two to five brands a year. It’s also forged a new licensing relationship with Sean John for men’s sportswear, securing a foothold for the sourcing giant in Macy’s stores. According to Rick Darling, president of LF USA, a new venture with Star Branding focuses on creating lifestyle brands inspired by trends in music, entertainment and sports. Star Branding’s partners include Tommy and Andy Hilfiger, Bernt Ullman and Joe Lamastra. The operations of Star Branding will absorbed by Music Entertainment Sports Holdings, with LF USA holding the majority interest. MESH will operate out of LF USA’s headquarters at 1359 Broadway in New York.” read more

(bloomberg)New retail data: Luxury shoppers pull back in June

“New data show affluent Americans tightened their belts in June in a possible indication of trouble for the overall economy. MasterCard Advisor’s SpendingPulse reported late Wednesday that luxury spending dropped 3.9 percent in June from a year earlier, the first decline since November. Other figures from SpendingPulse, which tracks all transactions including cash, were mixed, though online spending remained a bright spot. The well-heeled — households with annual incomes in the top 20 percent, about $158,000 on average — account for almost 40 percent of overall consumer spending. So indications that they are pulling back are particularly worrisome.”

(wwd)Fast Retailing Reduces Guidance

“Fast Retailing Co. Ltd. saw double-digit growth in the first nine months of the year, but uneven sales of spring items forced the company to cut full-year forecasts. The Uniqlo parent said Thursday that net profit for the nine-month period ending May 28 rose 35 percent to 67.18 billion yen, or $738.98 million at average exchange for the period. Sales increased 22.7 percent to 659.06 billion yen, or $7.25 billion. Uniqlo’s monthly sales performance so far this year has been mixed, an outcome the company has blamed on unseasonably cool spring weather and problems keeping some popular spring styles in stock. Just last week, the company said Uniqlo’s same-store sales in Japan fell 5.8 percent in the month of June.
On Thursday, Fast Retailing trimmed full-year profit and sales targets, the same ones the company raised in April when it released first-half figures. The company now expects net profit for the full-year ending Aug. 31 to rise 35.6 percent to 67.5 billion yen, or $772.93 million at current exchange. That compares with a previous forecast of 71 billion yen, or $813 million. The company said full-year sales should rise 19 percent to 815 billion yen, or $9.33 billion, compared with an earlier estimate of 834 billion yen, or $9.56 billion. “While we have revised downward our second-half estimates for Uniqlo Japan, we are still predicting the operation will generate increased sales and profit for the full business year through August 2010,” the company said. While Uniqlo’s sales growth in Japan appears to be slowing, the brand is still growing and expanding around the world. The company opened its first store in Russia this year. On May 15, Uniqlo opened its fourth global flagship in Shanghai and “met with phenomenal success,” according to the company. “Uniqlo International is enjoying a favorable expansion, particularly in the Asian region. Uniqlo brand awareness is also increasing in the U.S. and Europe, generating improvements in sales and profit per store,” the company said Thursday.” read more