NEW YORK — A federal court judge has rejected the plea agreement between Martin L. Grass, former chief executive officer of Rite Aid Corp., and the U.S. government.
As reported, on June 17 Grass pled guilty to conspiracy in connection to his role in the accounting fraud scandal at the pharmaceutical chain, admitting to backdating letters approving severance packages. He changed his plea to guilty after the jury was selected, but just before trial was to have begun. The plea agreement included a sentence of 96 months in prison, a $500,000 fine, a $3 million forfeiture to the U.S. and three years supervised release.
While Federal District Court Judge Sylvia Rambo in Harrisburg, Pa., accepted the change in plea, she reserved acceptance of the plea agreement. In an opinion Wednesday, Judge Rambo said that the term of the prison sentence was insufficient and “not within the applicable guideline range.” She also disagreed with the government’s argument that the prison term should be reduced because the plea allowed the government to avoid a 10- to 12-week trial.
Judge Rambo pointed out that the large numbers required for the jury pool impacted the court’s budget to the tune of $13,000. She also noted that the government failed to consider the court’s trial schedules, as well as those of another court in the district that had to take over a pending matter so Judge Rambo could oversee the Grass proceedings.
Grass, his lawyers and the attorneys for the U.S. government are set to appear before Judge Rambo on April 29. According to the opinion, Grass has the opportunity to withdraw his plea. If he does so, a new trial would be required if the government elects to pursue the matter further. If Grass elects to keep the plea in place, then there’s a chance that Judge Rambo could impose a stricter sentence than the one originally agreed upon by the parties.
A spokeswoman for the U.S. attorney’s office in Harrisburg declined comment, stating that the office was still reviewing Judge Rambo’s opinion.
William Jeffress, attorney for Grass at the Washington office of Baker Botts, declined comment.
— Vicki M. Young
Bloomingdale’s Takes Specialty Route
NEW YORK — In moving to SoHo, Bloomingdale’s has taken a page out of the specialty store playbook in its approach to cosmetics.
“We didn’t want to come in as a department store,” noted Michael Gould, chairman and chief executive of Bloomingdale’s. “We wanted to come in as a 90,000-square-foot specialty store.”
This is apparent in the brands that will be sold in the 8,000-square-foot cosmetics department, which takes most of the first floor. Gould noted there is “some newness here,” referring to the fact that there are new cosmetics and fragrance brands represented. “We looked at some of the brands and attitudinally felt the store had to be different.”
According to sources, it is estimated the cosmetics department could generate more than $7 million in annual sales.
“The approach to presentation is unique in that it is very much a boutique feeling in combination with open-sell and beauty counters,” said Howard Kreitzman, vice president, divisional merchandise manager of cosmetics and fragrances. “SoHo is a unique presentation of a limited group of the brands that we carry at 59th Street with the addition of several brands that we carry nowhere else in New York, and in some cases nowhere else at Bloomingdale’s.”
Among the brands are Prada Beauty, Molton Brown, Diane von Furstenberg Beauty, Bumble and bumble, Pout, Jo Malone, Nars, Creme de la Mer and N.V. Perricone. The SoHo store will also carry unique fragrances such as Nanette Lepore, Calypso, Perfect Perfumes and Comme des Garçons.
The store will also carry brands such as Bobbi Brown, Trish McEvoy, MAC Cosmetics, Stila, Nars, Chanel, Paula Dorf Clarins, Christian Dior and BeneFit Cosmetics, and there will be a Quick Bliss Spa. However, the Estée Lauder brand is not in this store.
Kreitzman noted the store “will have a very significant presentation of men’s skin care products. We really think that’s a very meaningful business opportunity in that store. We’re learning the men’s skin care customer is younger than we expected and much more sophisticated than we would have imagined — it is a very hip guy and there’s certainly plenty of hip guys in SoHo.”
“This gives us the opportunity to offer an exciting experience to our consumer,” noted Francine Klein, senior vice president, general merchandise manager for fashion accessories and cosmetics. “The store offers one-on-one consultation with beauty advisers as well as self-selection and we put together an assortment that catered to the consumer here,” which she described as “the total complement of resources to talk to the customer downtown.”
There is also an 800-square-foot perfumery area, designed to look like a “modernized French boutique,” according to Jack Hruska, senior vice president of visual merchandising and store design for Bloomingdale’s. Upon entering the perfumery, Hruska noted there is a showcase in front to “set the tone” before the customer enters the room. The space has lots of natural light provided by a skylight that covers the entire ceiling.
Hruska explained the floor has “three distinct moods” and added the light, provided by the floor-to-ceiling windows, “pulls [the customer] through the whole floor.” Located near the Broadway entrance of the store are several cosmetics bars where “the essence of the soft pink color” was used to “pick up a bit of the brick.” The middle of the store hosts the perfumery area, which boasts a skylight and an unusual light fixture, dark wood counters and silver silk wallpaper. The back area of the floor, which is “primarily white,” hosts brands such as Lancôme, Clinique and Shiseido, and is filled with light. In this area brands such as Bumble and bumble, Pout and Smashbox have their own sections of the side wall. Bloomingdale’s black-and-white marble flooring runs throughout except in the perfumery area, which is covered by a burgundy carpet.
“This is a business in a place that we’ve [Bloomingdale’s] never really been,” said Kreitzman. “We don’t know what SoHo means because there’s nobody big down there other than Sephora. So we happen to think that what we’re going to offer is really going to be quite special and unique to that trading area. We have very high expectations.”
— Kristin Finn