DENIM DISH

Byline: Scott Malone / Julee Greenberg / With contributions from Courtney Colavita / Alison Beckner, Paris

A Really Hot Campaign
Maybe it’s just relief at the absence of “butt cleavage” from this spring’s Parasuco campaign, but residents of Montreal and Toronto are reacting with unexpected enthusiasm to the new ads.
That is, they’re stealing them.
Michel Lavigueur, national account supervisor at Viacom Outdoor, said about 50 of the 300 some odd ads Parasuco bought on bus shelters in those Canadian cities have been stolen since going up early last month.
While outdoor advertisements are occasionally stolen, most campaigns come and go without losing a single ad, he said. Still, the rate of theft for the Parasuco campaign, 18 percent, doesn’t compare with the highest Lavigueur has encountered. When the “Batman” movie was released in 1989, about half of the plain black posters with the bat symbol were stolen from his firm’s kiosks.
The posters show jeans-clad models in provocative poses covered in drops of water.
Ads were stolen from shelters scattered around both cities, rather than in a particular locale, which is a more common theft pattern, he added. Lavigueur was reluctant to explain how one goes about removing a poster from an enclosed bus shelter, but said most thieves have broken the locking mechanisms that secure the ads.
“In some cases, they do appear to use a sledgehammer,” he added, explaining that 10 to 15 ads were taken after the thick glass on the kiosk was smashed.
Lavigueur estimated the cost of replacing the lost posters and broken glass at about $10,000. Ads are replaced on a case-by-case basis, depending on how much longer a campaign is intended to run.
Police commonly have little response to minor thefts of this nature, he added.
“They don’t have the workforce to deal with this,” he said. Lavigueur offered this message to advertising enthusiasts who want to enjoy their favorite outdoor images at home: “Please call Parasuco or us. It’s less costly for us to give them away at the end of the campaign. They just get thrown away.”

Diesel on Track
Diesel Group registered double-digit increases in sales and earnings before taxes in 2001 but the privately held denim and sportswear firm declined to release net income figures for the year.
Sales rose to $501.5 million, up 38.8 percent from 2000 and, before conversion from the euro, consistent with the Molvena, Italy-based company’s forecast last October. At the time, as reported, Renzo Rosso, president and principal of the firm, said that he expected a net margin of 4.8 percent, which would translate into net income of $25.1 million. EBITDA — earnings before interest, taxes, depreciation and amortization — grew 83 percent to $103.1 million and profits before taxes more than doubled, rising 135 percent to $70.1 million.
The Diesel brand, including Diesel Kids, 55DSL and its respective licenses, generated 93 percent of revenues, with the group’s other subsidiaries and licenses representing the balance.
Diesel pointed to the U.S and France as among its best performing markets and said sales in the U.S rose 44 percent to $92.6 million. Sales in France skyrocketed almost 85 percent to $8.4 million.
Rosso said in a statement, “The first quarter [of this year] is proving to be quite positive for Diesel. If this trend continues we should likely hit double-digit [sales growth] once again in 2002.”
Last year the company opened 21 new Diesel stores, including two units in New York and one in Paris, increasing its unit count by 45 percent. Diesel said its direct retail channel generated 21 percent of the group’s global revenues.
In addition to its own label, Diesel Group owns Staff International, which produces New York Industrie and has licensing deals with Dan and Dean Caten of D Squared, Martin Margiela and Vivienne Westwood.

Not Your Average Race
The fourth annual Gumball 3000 is under way and this time, it’s in the U.S.
Launched in 1999, the Gumball 3000 is a race inspired by the film “The Cannonball Run.” Taking place in Europe since its inception, this is the first time it will be in America. It begins today and runs through Tuesday, with a start at New York’s Plaza Hotel on Fifth Avenue and a finish in Los Angeles at the Renaissance Hollywood Hotel.
Participants will stop at a variety of parties along the way and celebrities like Matthew McConaughey, Johnny Knoxville, Billy Zane, Jodie Kidd and Amy Wesson are all confirmed to participate at some point in the race. DKNY Jeans has produced 450 T-shirts and racing jackets to outfit participants, and Royal Elastics, makers of K-Swiss, is providing the driving shoes. At the end of the race, the finish party will be hosted by Hugh Hefner at the Playboy Mansion.
The entire race will be filmed along the way and later made into a movie, which will hit theaters in late summer followed by a music soundtrack, DVD and Sony Playstation 2 computer game launching in July.

Avondale Remains in Red
Citing the continuing weakness in the apparel market, Avondale Inc. disclosed in a filing to the Securities and Exchange Commission this month that its sales slid 24.6 percent in its second quarter, leaving the Monroe, Ga.-based company in the red.
The net loss for the 13 weeks ended March 1 was $1.7 million, compared with income of $1.9 million a year earlier. Sales were $143.6 million, down from $190.5 million.
Closely held Avondale reports its financial results because of public bonds.
Fabric sales for the quarter were off 17.5 percent to $122.6 million, reflecting a 16.4 percent decline in yards sold and a 1.3 percent slip in selling prices. Operating income for fabrics fell 45 percent, to $7.1 million.
Yarn sales were off 31.6 percent to $41.8 million and that business recorded an operating loss of $2.4 million compared with earnings of $1.4 million.
“Market pricing for sales yarn remained very competitive, reflecting continued excess production capacity within the domestic industry and continued imports of yarns and knitted apparel from Asia,” Avondale said in the filing.
The company added: “The strength of the U.S. dollar in comparison to the currencies of many Asian countries continues to promote the importation of goods from those countries by U.S. retailers, exacerbating the already highly competitive market conditions resulting from the imbalance of global supply and demand for textile and apparel products.”
For the first half of its fiscal year, Avondale reported a $10.1 million net loss, compared with net income of $6.7 million. Sales fell 25.2 percent, to $292.6 million.

Beta Testing Women’s
A year after leaving his job as a designer at Levi Strauss & Co., Lauren Cronk is expanding his men’s line, Beta, to include women’s jeans.
Cronk, who works out of San Francisco, launched Beta last fall as a men’s line and is introducing women’s product for this fall.
“I always wanted to do a women’s line and after a year in the men’s business, I feel that this is a good time,” Cronk said. “Now the goal is to make the line larger to create a full women’s collection.”
Cronk, who designs both lines, started out on his own after working as a designer at Levi’s for the Red Tab label and seasonal lines. He would not comment on current sales volume or projections, but said he sees substantial growth potential in the women’s area.
“In five years, the women’s line will be larger than the men’s. Women are more likely to spend more money on a pair of jeans than a man is,” he said. His women’s jeans wholesale for $52.50 to $56, with targeted retail prices of $110 to $140. He’s pitching the line to high-end specialty stores. Also in the collection are cotton velour pants and jackets, denim jackets, cotton T-shirts, sweatshirts and chinos. Cronk said he wants to stick with a look that is casual and natural.
“We don’t really follow the trends as much as we like to make sure the clothes look real and natural. We want to move away from the major sandblasting and whiskering,” he said. “Our jeans have natural-looking wear marks with light sanding and subtle washes.”

Liberto’s New Look
French jeans maker Liberto celebrated its heyday in the late Eighties and early Nineties, sharing retail space with such European junior giants as Chevignon, Chipie and Aeropostale. Several years of lackluster sales and a low market profile followed.
Now Liberto, under new parent company Vivatel — one of Europe’s leading distributors of footwear and apparel with such brands as Kookai and Andre — has revamped and relaunched its collections, expanding the women’s line to represent about 40 percent of the collection. Divided into the classic “Liberto Collection” and trendy, technologically oriented “Liberto Ex-Treme,” the line offers close to 50 different denim washes and treatments and more than 100 models of jeans and casualwear for women. The fall-winter collection includes culottes, jeans with patchwork and velvet details, pieces in black and blue dirty stretch denim and ergonomic jackets. Retail prices range from approximately $44 to $53. Liberto is currently available in European department stores and specialty shops.

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