The nation’s biggest department store chain and an industry bellwether cut its losses in the third quarter and now has a brighter outlook on the holiday season. Executives, in a surprisingly upbeat mood despite the nation’s rising unemployment and economic uncertainties, said the new view stems from a recent uptick in mall traffic; strong sales of private labels, exclusive merchandise and online; better business at Bloomingdale’s; lower inventories overall, and the My Macy’s localization program. However, the retailer’s shares fell Wednesday after its fourth-quarter profit projection was below Wall Street’s expectations. Meanwhile, according to store executives, compatriot Lord & Taylor’s latest numbers show the store is riding better-than-expected fall business — the kind that validates their controversial strategy to “mainstream” the matrix and reverse years of reaching for a higher niche.
Luxury brands may only just be learning to effectively communicate on the Internet, but they are chattering up a storm — and one voice is calling for more clarity. “Luxury Online,” by Uché Okonkwo, founder of the Paris-based consultancy Luxe Corp, examines luxury’s love-hate relationship with the Internet, how to make the most of the social Web and the art of selling the dream online. This week also brought some Internet marketing moves from major luxury brands, including Burberry launching a social networking site. Madonna’s new campaign for Dolce & Gabbana spread via the brand’s online magazine Swide and co-designer Stefano Gabbana’s Twitter feed. The approach worked for more mass brands as well, a prime example being J.C. Penney’s Facebook campaign promoting holiday gifts.
Real estate firm Cushman & Wakefield gathered data on 274 locations in 60 countries to find the most expensive retail rents, which included New York’s Fifth Avenue, Causeway Bay in Hong Kong and Rome’s Via Condotti. A recession-driven drop in demand for goods and reduced availability of credit resulted in lower rents in the majority of countries for the first time in more than 20 years. Even emerging markets such as India, where rents fell 41.5 percent, were hurt.
As weaker fashion companies scramble to keep goods flowing and the bankers at bay, the powerhouses that managed to sock away money during the credit crunch might just start putting their extra millions to work. Options include new lines of business, IT makeovers, store refurbishments and even acquisitions. The firms that have huge cash holdings largely have gotten them by being good at what they do, planning a degree of conservatism into their businesses and cutting back on store openings and other expenditures when the economy went south. So far, Polo Ralph Lauren Corp. has a $925.7 million kitty. Kohl’s Corp. put aside $1.35 billion. And Wal-Mart Stores Inc. — oversize, as usual — has a war chest of $8 billion. And they are just some of the largest companies suffering an embarrassment of riches, with others including Nike, J.C. Penney and Gap.
Luella Bartley is on the hunt for a new backer after Club 21, her brand’s global licensee and distributor for ready-to-wear and accessories, walked away from a six-year relationship and the label ceased trading. On Tuesday, the London-based Club 21 said its subsidiary, VSQ Ltd., reluctantly had “taken the decision not to invest further in its relationship with Luella Bartley Ltd.” The statement also said due to the unexpected closure last month of Luella’s key rtw producer, Carla Carini, spring orders could not be fulfilled. That company, based outside Mantova, Italy, went into liquidation late last month and also shuttered its own-label brands, Carla Carini and Debora Sinibaldi. See the spring 2010 collection from Luella.
The Mitchell family is now wearing a new hat — that of a white knight. Late Monday night, the Mitchells, operators of the largest family-owned specialty store in the U.S. with sales of $100 million, inked an 11th-hour deal to acquire the assets of Wilkes Bashford, which simultaneously filed a voluntary Chapter 11 petition. The deal by Ed Mitchell West LLC is for $4.6 million in cash and is subject to higher offers and bankruptcy court approval. A contingency of the sale is that the purchase be completed by Nov. 30 in order to maximize business during the holiday selling period, according to Bob Mitchell, co-president of Mitchells. If its offer is successful, the family, which owns Mitchells in Westport, Conn.; Richards in Greenwich, Conn., and Marshs in Huntington, N.Y., would gain a beachhead on the West Coast and immediately make it a formidable force within the luxury men’s wear community in San Francisco and the surrounding area.
Sporting skinny jeans and a whisper-thin vintage blouse, Kate Moss doesn’t look like a traditional boardroom-bound tycoon. Then again, the supermodel, who oversees an expanding empire of products bearing her name, has made a career out of breaking with convention. Her arrival on the fashion scene two decades ago brought a new notion of beauty to the fore. Now, with her latest fragrance, Vintage, as well as a clothing line and a hair care brand, she aims to bring her business acumen to the table, too. According to Stephen Mormoris, senior vice president, global marketing, at Coty Beauty, a division of Coty Inc., which holds Moss’ fragrance license, she is eager to track her fragrance portfolio’s performance and discuss how to drive its sales, which now amount to $100 million at retail annually.
The annual event opened Monday at the St. Regis Hotel in New York, with speakers touching on the importance of designers following their instincts, the outlook for the economy and the future for Chinese consumers. Speakers included Marc Jacobs; Stella McCartney; Eric Wiseman of VF Corp.; Wesley R. Card of Jones Apparel Group Inc.; Emanuel Chirico of Phillips-Van Heusen Corp.; Jim Glassman of J.P. Morgan Chase & Co., and Bruce Rockowitz of Li & Fung (Trading) Ltd. Critiquing fashion’s off-kilter delivery seasons, Donna Karan suggested the industry take a cue from Hollywood: “They hype a movie when it’s hitting the theaters. People get excited; they go see it.” Sir Martin Sorrell, chief executive officer of WPP Group plc, advising against predicting an economic recovery too quickly: “Things aren’t getting better; they’re less worse. I will only declare a recovery when I can say our like-to-like revenues are up.” Stella McCartney ruminated on her many business ventures, from her signature line to her collaborations with Gap, Adidas and H&M. Watch the video of McCartney’s interview with WWD executive editor Bridget Foley. Check back next week for full coverage of the entire event.
Armistice Day and V-J Day were cover subjects for WWD in 1918 and 1945, respectively. On Nov. 7, 1918, WWD’s cover featured an illustration of soldiers arriving in New York Harbor with the words “The Future” emblazoned above the city’s skyline. The focus of the issue was reconstruction and the victory colors. “It cannot be white — that is no color,” said Mme. Simone of Marshall Field & Co. “It cannot be red. Too much red blood has been shed.” It wasn’t until Nov. 12 that the victory colors, navy and cherry, were officially announced by the Textile Color Card Association of the U.S. WWD’s page one that day, in true trade style, nailed the specific hues: navy S-6925 and cherry S-2063 on the Standard Color Card. Click here to see all images.
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