BERLIN — Management changes are under way at Escada.
Richard Simonin, the Escada board member responsible for licenses and accessories, is leaving the firm, effective Monday. An Escada statement Wednesday said the Munich-based fashion house and Simonin had parted ways by mutual agreement and that there would be no further claims on either side.
According to reports, the Escada supervisory board had not initially accepted Simonin’s resignation. His contract was due to expire in fall 2004. Simonin would not comment on the grounds for his departure nor his plans, other than to say he will “definitely be staying in the fashion business.”
Industry sources noted that his responsibilities at Escada have been shrinking. He also had been head of Escada Beauté until it was sold to Wella in April 2002, a deal that he was instrumental in arranging. This May, Escada announced the termination of its underwear license with Hanro.
The remaining Escada licenses are for eyewear; fragrance, and scarves, shawls and ties. The company also has a partnership in the fine jewelry business, but accessories for both the Escada and Escada Sport collections are now in-house.
As part of Escada’s “continuing efforts to consolidate its business fields,” Wolfgang Ley, Escada’s chief executive officer, said: “The board of management will be reduced to three members.” They are Ley; Beate Rapp, chief operating officer, and Georg Kellinghusen, chief financial officer. Ley will assume responsibility for Escada accessories, and Rapp for license business at the board level.
Sales for the total Escada Group hit $892.7 million in fiscal 2002, compared with $977.4 million the previous year. Dollar figures have been converted from the euro at current exchange rates.
The firm will hold a press conference today regarding its most recent financial results.
MORE PLEA DEALS: Two more former Rite Aid executives, Franklin Brown and Eric Sorkin, are expected to change their pleas to guilty today when they go in front of U.S. District Court Judge Sylvia Rambo’s courtroom in Harrisburg, Pa., in the government’s case against them. Brown, former vice chairman and general counsel, and Sorkin, on administrative leave as vice president of pharmacy purchasing, were to face jury trial about their respective roles in the Rite Aid accounting scandal, which resulted earlier this month in the entrance of guilty pleas, just prior to the scheduled start of their trials, by former chief executive Martin Grass and former chief financial officer Frank Bergonzi. Brown and Sorkin were the two remaining defendants in the government’s case against Rite Aid following Grass’ and Bergonzi’s pleas.
— Vicki M. Young
NOT SO BEAUTIFUL: Goldman, Sachs & Co. cut its rating on L’Oréal to “underperform” from “in-line” on Wednesday. Although the investment bank said in its research note that it expects L’Oréal to have an 8.5 percent sales uptick on a like-for-like basis in the second quarter — “the strongest in our universe” — it doesn’t anticipate that the French beauty giant’s profits release will shine in September. “We expect 1.6 percent growth in the first half in adjusted EBIT [after currency hedges], the weakest of the stocks we cover,” Goldman Sachs reported. “This light performance stems from increasing competition, the uncertain economic environment and the difficult comparable period.”
L’Oréal stock closed down 3.01 percent Wednesday at $71, or 61.20 euros. Dollar figures have been converted from the euro at current exchange rates.
Also on the beauty front, Goldman Sachs downgraded its rating on the cosmetics sector to “cautious” from “neutral” in a separate note, saying: “We believe the market will be disappointed when second-quarter/first-half reporting gets under way for the cosmetics sector.”
— Jennifer Weil
TRADING PLACES: Philippe Villemus, formerly Helena Rubinstein’s international general manager, has left L’Oréal, WWD has learned. His replacement has not yet been named.
In other L’Oréal news, Catherine Fulconis will succeed Dimitri Katsachnias as director of strategic development at the end of June. Fulconis, an 18-year L’Oréal veteran, has most recently been the director of European development at Shu Uemura and Kiehl’s.
Katsachnias, Tho-Van Tran and Patrice Haddad have jointly formed Garden and Partners, a company that creates, redefines and manages brands’ added value. Tran is also a partner and the creative director at Air advertising agency. Haddad is the owner of Premiere Heure production company.