Byline: Scott Malone / Julee Greenberg / With contributions from Melissa Drier, Berlin
Jeans Execs Get Pay Cuts
Falling earnings at the nation’s jeanswear powerhouses last year led to slimmer paychecks for their chief executive officers, according to recent disclosures to the Securities and Exchange Commission by VF Corp. and Levi Strauss & Co.
At Greensboro, N.C.-based VF Corp., chairman, president and ceo Mackey McDonald saw his cash compensation slip 23 percent, to about $1.5 million, in a year when the corporation’s net income fell 47.1 percent to $137.8 million. A reduction in bonus and the award of no payments under the company’s long-term incentive plan more than offset a 15.1 percent increase in his base salary, to $960,000 in the year ended Dec. 29.
In the company’s proxy statement, VF’s compensation committee said the bonus reflected “McDonald’s leadership of major strategic initiatives, including reducing inventories by more than $200 million, more than double VF’s targeted reduction of $100 million.”
Overall, the company reduced the average bonus to its top five officers, including McDonald, by 40 percent.
At San Francisco-based Levi Strauss, president and ceo Philip Marineau saw his cash compensation cut by 61.9 percent in his second full year on the job, while the company’s earnings slipped 32.4 percent to $151 million in the fiscal year ended Nov. 25.
According to an SEC filing, most of the pay cut came as a result of the company lowering his bonus to $450,000 from almost $2.3 million the prior year. Previous-year compensation also included almost $1.1 million in relocation expenses, covering Marineau’s move to California when he joined the firm. Levi’s reports its financial details to the SEC because of publicly traded debt.
Levi’s other top five officers also saw their bonuses reduced last year.
The filing also said Levi’s current employment agreement with Marineau runs through September, but will be automatically extended unless he or the company terminate it. His employment agreement calls for a minimum base salary of $1 million, a target bonus of 90 percent of that and a maximum bonus of 180 percent of that.
Wrangler Germany is riding the Seventies retro fashion wave on its very own signature scooter: the Peugeot Speedfight “Wrangler.” The limited-edition scooter carries a $2,160 price tag (dollar figures are converted from the euro at current exchange rates) and a “Whatever you ride” Wrangler slogan on the aluminum running board.
The scooter has a blue-and-silver color scheme and two-toned blue-and-black seat, which evoke Wrangler’s Seventies-inspired European spring jeans range, including the revived Wrangler “110010” boot-leg jeans model in extreme used washes. The scooter is an integral part of the current Wrangler ad campaign in Germany.
At present, the Wrangler scooter is available exclusively in Germany. It’s not the only motor vehicle to bear the “Wrangler” name, though the Jeep Wrangler, one of the first sport-utility vehicles, has no connection to the jeans brand, according to a spokeswoman for parent company VF Corp.
Buffalo Roams at Retail
The Quebec-based brand Buffalo Jeans is developing plans to open retail stores in a half-dozen U.S. cities.
The company has 44 freestanding locations across Canada and in December made its first stand-alone retail foray into the U.S. with a unit at Boston’s Cambridge Galleria Mall. That 2,700-square-foot space features both the men’s and women’s collections.
“We are in the process of establishing the brand in the U.S. and I believe that retail and wholesale go hand-in-hand,” said Gaby Bitton, president of retail and licensing. “So, we are looking to expand and open more stores in the coming year.”
Farah Dib, marketing and advertising director, said the company is currently looking for locations in Manhattan, either in SoHo or around Union Square, for its second U.S. outpost. After that, Buffalo aims to open units in Miami, Los Angeles, San Francisco and Chicago. Buffalo Jeans is now available at select better department stores across the U.S. but some pieces of the collection will be sold only at the Buffalo boutiques.
The 30-year-old company’s expansion goes beyond North America. Bitton said he hopes to expand worldwide.
“We are planning to open more stores in Asia to add to the 15 that we have in the Phillippines,” Bitton said. “We just opened our first in Australia in July.”
If You Can’t Beat ‘Em, Join ‘Em
Cologne, Germany’s Inter-Jeans trade show is getting ready for a major makeover this fall, and is joining forces with one of its recent rivals.
The once dominant European jeanswear show lost some of its luster over the past two seasons, as a new competitor called Bread & Butter popped up running parallel to Inter-Jeans in a nearby unrenovated factory building. But Inter-Jeans and Bread & Butter have agreed to cooperate.
“Vibes 4u — The New Inter-Jeans” is scheduled to premiere Aug. 2-4 in four smaller and more individual hall spaces on the Cologne fairgrounds. The numeral 4 in the show’s name refers to the jeans fair’s four new fashion segments: Core Denim, for authentic jeans; Fashion Delight, for feminine and fashion-oriented product; Urban Utility, for hip-hop and sport influences, and Casual Crossover, for relaxed unisex looks.
After several seasons of declining numbers of exhibitors and visitors, Inter-Jeans has been under considerable pressure to make some key changes. Show organizers turned for advice on the look and feel of the revised fair to the Bread & Butter team, headed by Karl-Heinz Muller, a German jeans industry veteran and cutting-edge jeans retailer in Cologne. The next edition of the event will feature an open-stand set-up, centralized and theme-related music and catering in each of the halls.
The Cologne Messe, which organizes Inter-Jeans, and Bread & Butter have signed a letter of intent to form a joint venture, the exact details of which were not disclosed. The shows plan to provide mutual support in the areas of creative direction, advertising, publicity and logistics. In addition, the Cologne Messe said that in “the mid-term,” Bread & Butter is expected to move into an adjacent hall on the Cologne fairgrounds. For the next two editions in August 2002 and February 2003, however, Bread & Butter will be housed in its original factory site.