WWD Week in Review: 3/19/10

The top stories for the week ending in March 19, 2010.

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Price Increases on Fashion’s Horizon

If the economic recovery stays on track, the fashion world just might have to adjust to something it hasn’t seen in almost two decades: inflation. The upward swing in prices would mark a stark turnaround from the steady slide in costs that has been the industry norm as retailers and suppliers found ever-less-expensive sources of supply. But with wage pressures rising in China, raw materials prices climbing and demand beginning to recover worldwide from both consumers and manufacturers, there is a growing sense deflationary pressures could be easing and its opposite might begin to take hold. Retail executives, at least, see that as a hopeful sign. And after more than a year of cost cuts and consumer retrenchment, apparel retailers and vendors are trying to put the Great Recession behind them — and market share gains have become the beacon they hope will lead them forward. From Saks Inc. and Neiman Marcus Inc. to Macy’s Inc., Wal-Mart Stores Inc. and, everyone wants more. Fashion brands and retailers are always jockeying for consumer dollars, but 9.7 percent unemployment, higher savings rates, a tenuous recovery and lower overall sales have only upped the stakes.



PVH Buys Hilfiger for $3 Billion

The fashion megadeal is back — and the megadebt that goes with it. Phillips-Van Heusen Corp. said Monday it will acquire Tommy Hilfiger BV from Apax Partners for $3 billion, plus the assumption of $138 million in liabilities, creating a group with combined revenues of roughly $4.6 billion but one that, in the near term, will be highly leveraged. Observers described the deal as industry-transforming, even if it will saddle PVH with significant debt. Emanuel Chirico, PVH’s chairman and chief executive officer, forecast the group can cover debt repayments from cash flow as it further expands Hilfiger and uses that brand’s international distribution network to grow labels like Izod and Arrow. Of the $3 billion price tag, Apax will receive $2.65 billion in cash and $380 million in PVH common stock, at current exchange rates. Apax, which bought Hilfiger in May 2006 for $1.6 billion, will end up owning 13 percent of PVH. Also, Diego Della Valle is voting with his wallet that there’s more upside potential in Saks Inc. By spending an additional $30.2 million since March 10, Della Valle has boosted his stake in the luxury retailer to 9.4 percent from 7.1 percent. While the investment is significant, Saks has proven to be a lucrative deal for Della Valle: He has already made a profit of more than $44.5 million on the shares he has snapped up since last year.



2010 CFDA Nominees Announced

The 2010 CFDA Fashion Awards nominees and honorees have been set. This year’s nominees for Womenswear Designer of the Year are Donna Karan, Marc Jacobs and Alexander Wang. For Menswear Designer of the Year, they are Tom Ford, Michael Bastian and David Neville and Marcus Wainwright of Rag & Bone. Jacobs, Proenza Schouler’s Jack McCollough and Lazaro Hernandez and Alexis Bittar will be competing for the Accessory Designer of the Year award. The Swarovski Award, which recognizes emerging talent, will be decided between Prabal Gurung, Joseph Altuzarra and Jason Wu for women’s wear; Simon Spurr, Patrik Ervell and Richard Chai for men’s wear, and Dana Lorenz, Alexander Wang and Eddie Borgo for accessories. There was also a fete to celebrate the nominees Wednesday night at the DVF studio. The venue was filled with many industry types, including Alexander Wang, Michael Bastian, Phillip Lim, Narciso Rodriguez, Vera Wang, Elie Tahari, Chris Benz, Gilles Mendel, Richard Lambertson and Andrew Rosen. And earlier that day, the CFDA board voted to make changes to the bylaws, and re-elected Diane von Furstenberg for a third, two-year term as president of the organization. This is a change from a bylaw put in place five years ago, which, after Stan Herman served in that role for 15 years, restricted CFDA presidents to two two-year terms. Von Furstenberg, whose presidency would have come to an end at the end of this year, will now serve as president of the CFDA until Dec. 31, 2012. The decision, which was said to have been supported overwhelmingly by CFDA board members, is seen as a clear vote of confidence in von Furstenberg’s leadership. In the past four years, the designer has worked diligently to work with the industry and grow the organization’s membership.



From Madonna to Amy Winehouse, Celebrity Tie-Ups Continue

Undeterred by flash-in-the-pan tie-ups like Lindsay Lohan at Ungaro, yet another wave of celebrities is breaking into the fashion game. In the past few days alone, Madonna unveiled a deal with Dolce & Gabbana to codesign sunglasses stamped with the MDG logo, and a joint venture with the Iconix Brand Group Inc. to launch worldwide fashion-related projects and perhaps even make acquisitions. Last week also brought news that the mercurial Amy Winehouse has jumped on board with Fred Perry to launch a line due in stores this fall. Then there is Sarah Jessica Parker’s new gig at Halston as investor and chief creative officer. So what’s the appeal given a trail well-littered with failed celebrity lines? Aside from having instant name recognition, celebrities now provide apparel companies with automatic potential shoppers thanks to followers on Twitter and Facebook, observers said.



Nike Aims for World Cup Score

Nike is kick-starting its global soccer marketing for the FIFA World Cup. The athleticwear giant has unveiled a lineup of products that it will push through social media and underground blogs in preparation for soccer’s greatest spectacle. New items include jerseys made of 100 percent recycled polyester and footwear. Nike, which has developed software that works in conjunction with social media, has taken a functional and subtle approach to social networks as a marketing tool in the run-up to the monthlong event that starts June 11 in South Africa.



The Fashion System: Giorgio Armani

Giorgio Armani is as outspoken as he is powerful. In the most recent article from WWD’s “The Fashion System” series, he argues that, to maximize their impact, the fashion shows should be timed to the retail selling period. The effort, he says, would require broad collaboration “without the pretense that it will happen in six months.”

The Fashion System: Streaming the Future
The Fashion System: Neiman Marcus’ Karen Katz and Ken Downing
The Fashion System: Donna Karan
The Fashion System: Ralph Lauren



Basel Preview: Watchmakers Set for Critical Show

Despite tentative signs of recovery, luxury watch brands still face challenging conditions going into Baselworld, with many feeling the annual Swiss watch and jewelry fair will make or break prospects for 2010. Baselworld director Sylvie Ritter said the watch sector’s worst crisis in 30 years had strengthened the position of the show, which started on March 18 and runs through March 25, as many brands had cut back attendance at other trade events in a bid to trim costs. The mantra in Basel this season seems to be creativity up, prices down, and coming off of a buoyant holiday, retailers said they plan to approach Baselworld with an open mind and healthier budgets, focused on innovative midrange jewelry. Looking to the year ahead, the mood among jewelry brands remains mixed, with strategies ranging from treading water until the market picks up to the re-assessment of markets or an increased focus on e-commerce activity, according to executives. Several brands confirmed they are responding to robust demand for lower-priced jewelry lines. And for many watch brands, the time is right to take retail matters into their own hands. After taking a beating at retail the last couple of years and seeing consumer indulgence turn to thrift, timepiece firms are focusing on opening, expanding or multiplying their proprietary flagships. The monobrand stores and in-store shops are not intended to eliminate their retail partners from the equation, but rather to improve ways to reach the consumer and entice them with their full product array under their distinct image.

Chopard at 150: Building on Its Legacy
Timeless Elements
Timepiece Trend: It’s Complicated
Scene: What To See and Do In Basel



Polo, North Face Fight Online Fakes

Polo and The North Face are on the warpath against counterfeits. In what legal observers say is the largest case of its kind, Polo Ralph Lauren Corp. and VF Corp.’s The North Face brand have used a federal lawsuit to strike at a large network of more than 130 Chinese Web sites selling counterfeit goods to U.S. customers through up to 6,500 domain names. According to court documents unsealed this week, the two apparel firms’ own investigations recently uncovered a ring of related Web sites that, since January 2008, have moved as much as $780,000 a month in fake Polo and North Face goods at domains such as and



Men’s Collections: Prada’s Alternate Universe

Commercial clout? Classic cover-ups? Chez Prada? Ma Certo. As uncharacteristic as those descriptions may sound when applied to Miuccia Prada, a designer known the world over for her provocative, at-the-vanguard fashion message, that’s the mood she’s channeling these days. That’s all well and good, but in Prada’s hands, nothing is hackneyed. So those notions didn’t result in mainstream or by-the-book chic, as the designer styled the more traditional looks in a young and disheveled manner, and also infused her lineup with a Seventies edge. And in a world obsessed with youth and speed, Ann Demeulemeester and her namesake brand — offer a lesson in aging gracefully and taking one’s time. Since setting up her fashion house in 1987 and introducing men’s wear nine years later, Demeulemeester, one of the famous Antwerp Six, has steadily built a loyal following. Last year, her business generated sales of about $40 million with an operating margin estimated at 20 percent. Meanwhile, CFDA nominee Michael Bastian has been waving the American flag for five years, on his mission to renovate classic American casualwear while celebrating iconic American men and narratives. His early collections channeled Kennedys, Jaws and Colorado ski bums. This year, the New York–based designer’s horizons became more global as he found inspiration in Latin America for spring, and in British skinheads for fall. He also launched a collection with Gant, a Swedish brand of American heritage.



Liza the Menace: Minnelli at 19

On March 11, 1965, “Flora the Red Menace” opened at 52nd Street’s Alvin theater. The show’s star, Liza Minnelli, was just shy of 19 (her birthday was the following day), but she handled her Broadway debut like a vet. “As Flora, the Innocent Red Menace, Liza Minnelli is an enthusiastic love-me,” began WWD’s write-up. But instead of going into the details of her stellar performance — one that would make her the youngest person ever to win a Tony Award at the time — the piece gave readers a little insider knowledge about the quirky young star.



Sephora Unveiling Exclusive Brands in Europe

A number of beauty brands are entering Sephora here for the spring-summer season. Among the new names exclusive to the LVMH Moët Hennessy Louis Vuitton-owned perfumery chain in Europe is Mineral Flowers, just out at the end of February in France. The skin care products’ formulation includes floral waxes, mineral mud, plus baobab and kukui oils. On the sun care front, an entrant is the Plants & Co. line created for Sephora that’s due out in mid-April. Set for an early May launch here (and to be carried exclusively in Sephora stores worldwide) are two makeup palettes conceived by Edun — the socially conscious clothing brand founded in 2005 by Ali Hewson and her husband, Bono — and Sephora. Each contains six eye shadows and one blush that come in a wooden box and an organic cotton pouch. On the global front, the new Sephora flagship in Milan contains 11,110 square feet on three floors, resembling a department store rather than a traditional perfumery. The flagship’s ground floor is dedicated to makeup and showcases the store’s signature brands such as Benefit, Bare Escentuals, Urban Decay and Cargo, alongside established names such as Chanel and Estée Lauder. New to Italy is Make Up For Ever’s makeup school. Other in-store services include Benefit’s Brow Bar offering eyebrow shaping and Urban Decay’s Lash Bar that provides false eyelash application. Also, Avon Products Inc. has added a third pillar to its corporate responsibility efforts: environmentalism. The direct seller today plans to introduce the Hello Green Tomorrow initiative — a twist on its Hello Tomorrow global brand campaign — designed to kick start a women’s environmental movement by leveraging Avon’s legion of sales representatives and customers across 65 countries. In fragrance news, John Varvatos is infusing a touch of noir into his fragrance wardrobe with the introduction this spring of a limited edition men’s scent, called Artisan Black.

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