Fashion. Beauty. Business.

DAILY EDITION 5 MAY 2016 1

ALBER’S VIEWAlber Elbaz, at The New School’s Parsons School of Design, talked about his new life post-Lanvin. PAGE 6

FERRAGAMO AHEAD?Eraldo Poletto exits Furla, fueling speculation he’s to become chief executive at Ferragamo. PAGE 3

KANTOR ON TRADEFormer USTR Mickey Kantor gives his views on TPP — and the presidential candidates’ anti-free-trade stances. PAGE 8

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● The teen retailer and its major shareholder, Sycamore Partners, exchange allegations about the actions of Sycamore’s subsidiary MGF Sourcing.

BY VICKI M. YOUNG

NEW YORK — Aéropostale Inc.’s bank-ruptcy filing Wednesday shows that the malaise in the teen market just won’t let up. It also could result in a bitter fight between the retailer and its major share-holder, Sycamore Partners, which happens to be one of its major vendors as well.

The struggling retailer filed a voluntary petition for Chapter 11 bankruptcy court pro-tection on Wednesday morning in Manhattan bankruptcy court. The petition listed total assets of $354.4 million and total liabilities of $390 million. It listed LF Sourcing Millwork LLC, the Li & Fung sourcing division, as its largest unsecured creditor at $14.3 million.

The teen retailer said it plans to emerge in six months with a “right-sized store footprint.” It also plans to use the process to “shed or renegotiate some burdensome contracts,” as well as resolve its “ongoing disputes with Sycamore Partners.” The com-pany has a commitment of $160 million in a debtor-in-possession financing facility from Crystal Financial.

RETAIL

AéropostaleFiles Chap. 11Petition

CONTINUED ON PG. 10

● Allen Questrom lays out his prescription for turnarounds and helping department stores.

BY DAVID MOIN

NEW YORK — “The retailing business is not dead. I don’t think the world is coming to an end.”

So said Allen Questrom, the former chair-man and chief executive officer of J.C. Penney Co. Inc., Federated Department Stores, Bar-neys New York and Neiman Marcus Group, who on Wednesday morning gave a candid view of the industry, its problems and some of its controversial players at a meeting of the Retail Marketing Society at the Harvard Club here.

Amid a heightened sense of concern in the

RETAIL

Retail’s Mr. Fix It Talks Fast Fashion, Revivals and What Stores Lack

CONTINUED ON PG. 11

FASHION

Lady LoveLady Gaga hit Macy’s on Wednesday afternoon to launch “Love Bravery,” her limited-edition collection done in collaboration with Sir Elton John, Brandon Maxwell and Gaga’s designing sister, Natali Germanotta. She told fans that rather than pushing the merch, her appearance with David Furnish was about “the intersection of love and bravery.”For more, see page 14.

FOR MORE INFORMATION, PLEASE CONTACT PAMELA FIRESTONE, ASSOCIATE PUBLISHER AT 212 256 8103 OR PFIRESTONE@WWD.COM

Men’s Fashion Weeks

ISSUE: June 15CLOSE: June 1

MATERIALS: June 6

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ISSUE: July 13CLOSE: June 29

MATERIALS: July 4

NYFW: Men’s PreviewMilan PreviewPitti Uomo Preview

An Advertising Opportunity

5 MAY 2016 3

● The executive will leave the brand at the end of June as sources speculate he will join Ferragamo in July.

BY LUISA ZARGANI

MILAN — Furla chief executive officer Eraldo Poletto has resigned from his role at the Bologna-based firm, effective at the end of June. This confirms earlier specula-tion about his exit, as reported. Sources in Milan say he will be joining Salvatore Ferragamo SpA on July 1, succeeding ceo Michele Norsa, who will exit the com-pany by the end of the year for personal reasons.

Ferragamo declined comment.If he does join the company, Poletto

will bring to Ferragamo his longstanding experience in the accessories sector, which remains that company’s core business. Although Ferragamo is publicly listed, the namesake family is still involved; Furla is also controlled by a family, the Furlan-

ettos, led by president Giovanna Furlanetto.

The timing of Poletto’s exit is surprising given that Furla revealed earlier this week that it had inked an agreement with TIP Tamburi Investment Partners for a capital increase and said it is

eyeing an initial public offering by 2018.Poletto joined Furla in June 2010. He

was previously president of strategic development and international business

worldwide at Retail Brand Alliance Inc., parent company of Brooks Brothers. He was also a member of the executive team and board, president of Brooks Brothers International Inc., and director of the board of Brooks Brothers Japan, U.K. and Europe. Poletto exited Furla in November 2012 for a brief stint as ceo of Alfred Dun-hill, but returned to the Italian accessories firm in spring 2013.

At the time, Furla stated that Poletto’s return to the Italian fashion brand was related to “the launch of major develop-ment plans set to accelerate the company’s growth and expansion.”

Poletto helped grow the company around the world, further developing its retail network, which in 2015 counted a total of 415 stores. Last year, Furla saw rev-enues rise 30 percent to 339 million euros, or $376.3 million, with a 23 percent gain in like-for-like sales. Revenues have grown 126 percent since 2010. Furla’s performance last year was also boosted by the brand’s new categories–a men’s line, women’s foot-wear and the eyewear license with De Rigo. Furla has signed licensing agreements with Ratti and Morellato for textile accessories and watches, respectively.

BUSINESS

Eraldo Poletto Exits as Furla CEO

Chanel Resort 2017 In Havana, Cuba ● Karl Lagerfeld explored the realm of traditional Korean fashion for the brand’s cruise collection.

● Met Gala 2016 Red Carpet Arrivals

● Celebrity Fashion Report Card: Bippity Boppity Boo

● Met Gala 2016 Balmain After Party

● Boom Boom Room Met Gala 2016 After Party

Global Stock TrackerAs of close May 4, 2016

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Luen Thai Holdings Ltd. +1.56%

Shinsegae Co. Ltd. +1.47%

Revlon Inc. +1.36%

Under Armour Inc. -7.54%

The Bon-Ton Stores inc. -7.08%

Elizabeth Arden Inc. -5.26%

Sears Holdings Corp. -4.97%

H&M Hennes & Mauritz AB -4.48%

TOP 5TRENDINGON WWD.COM

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● The company said North American sales rose 17.1 percent in the quarter.

BY VICKI M. YOUNG

Kate Spade & Co. is taking the micro approach — and it seems to be working.

Craig Leavitt, the company’s chief executive officer, said Kate Spade has been making a bigger effort since the back half of 2015 with its micro-assorting efforts. “That’s just now coming to fruition toward the middle of the first quarter. We are seeing strong results from making sure the right products are in the right stores [for each location’s] customer base,” the ceo said in an interview.

The initiative helped move the company back into the black column after getting a boost from a 17.1 percent gain in North American sales.

The company said net income was $11.6 million, or 9 cents a diluted share, compared with a loss of $55.2 million, or 43 cents, a year ago. The year-ago quarter also saw wind-down charges for discontinued operations. Net sales in the quarter rose 7.5 percent to $274.4 million from $255.3 million. The company said

direct-to-consumer comparable sales growth was 19 percent, or 8 percent excluding e-commerce.

By segment, Kate Spade North America posted a 17.1 percent gain to $219 million. Kate Spade International net sales were $49 million, or an increase of 3.2 percent. The Adelington Design Group posted net sales of $7 million, an increase of $1 mil-lion or 23.8 percent.

Addressing the firm’s new approach, Leavitt gave as an example the company’s wear to work cluster of stores, which saw a higher proportion of wear to work styles, including more totes and larger bags. Kate Spade is also developing something sim-ilar to better target its online marketing efforts by analyzing what catches a user’s eye either through a click on an e-mail or usage patterns while at the brand’s site, and then upping its digital marketing efforts with emails about similar products.

The company also ensures that there’s some form of newness to add to the discovery process each time the customer checks out the brand, whether online, in a physical store or on a mobile platform. Leavitt said the firm delivers newness 12 times a year. “We are delivering new-ness in all full-price channels, in e-com-merce and in our wholesale points of

distribution,” the ceo said.He also noted that the Broome Street

label, which focuses on casual wear, has “shown strong full-price sell-throughs.” Also trending well for the firm is its collab-oration with Beyond Yoga for ath-leisure products. Contrary to what some think about ath-leisure being over saturated, Leavitt said, “We expect to see continued growth in the product category, whether we continue with a collaboration or in another way.” The ceo added that its foray into the ath-leisure sector has “been a really important acquisition tool,” noting that many customers are returning to the brand to buy in other core product categories.

The company has been working on its mobile site optimization over the past year. Leavitt said there’s been “meaningful increases in traffic, with the number of orders on the mobile site having doubled over the prior year.”

In discussing the results, the ceo said, “Our first-quarter results reflect the stronger, refocused Kate Spade & Co., and underscore the effectiveness of our dif-ferentiated strategy. We continue to focus on our powerful multichannel approach, especially fueled by the robust perfor-mance of our global e-commerce business, which helped drive our industry-leading comparable sales growth of 19 percent.”

George Carrara, president and chief operating officer, said adjusted earnings before interest, taxes, depreciation and amortization margin expanded 120 basis points. “We remain well-positioned to generate significant margin expansion in 2016 and are confident in achieving our full year top and bottom line guidance.”

The company reaffirmed full year 2016 guidance for sales of $1.39 billion to $1.41 billion, with low to mid-teens comparable sales growth. Earnings per share guidance is between 70 cents to 80 cents.

During the quarter, the company operated 169 North American stores comprised of 105 specialty stores and 64 outlet stores. It also has 91 international sites comprised of 24 specialty stores, 14 outlet stores and 53 concessions. In addi-tion, there were also 121 partner-operated stores overseas.

ACCESSORIES

Micro Strategy Boosts Kate Spade’s Results

Eraldo-Poletto

Karley Sciortino, Tracy Antonopoulos , Paloma

Elesser and Jourdan Dunn for Kate Spade

Summer 2016.

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● The fashion proved as eclectic as the art at the invitation-only preview of Frieze New York (running today through May 8), with guests turning up in looks that were hip, offbeat and even bold — as embodied by clashing graphic prints, sharply cut coats and bright-hued shoes.

BY KRISTI GARCED

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● Former Lanvin creative director is committed to designing beautiful clothes that don’t scream to be heard.

BY SHARON EDELSON

NEW YORK — Alber Elbaz on Tuesday visited The New School’s Parsons School of Design to discuss his life after Lanvin with Paper magazine founder/editor/publisher Kim Hastreiter and fashion consultant Julie Gilhart.

The former Lanvin creative director, who was abruptly dismissed from the French fashion house in October, never mentioned being fired directly, referring to the development as “the tragedy” throughout the evening.

“Since my tragedy, I’ve been traveling the world and meeting students,” he told the audience of 600. Reaching into a large brown shopping bag, he said, “I brought some tissues with me. Did you bring tissues?” Elbaz began throwing boxes into the audience. “Sugar is a very important thing for the brain, especially when you create, so I brought candy,” he said, tossing bags of hard candy from the stage.

“Now everybody’s loose and happy with tissues and candy.”

Elbaz said his daily life has changed in big and small ways. “People think fashion is one long party that never ends,” he said. “It’s a party, but it ends. The life cycle goes through highs and lows. I came here without a private car, without a secretary and without a [public relations representative] to tell me what to say. There’s something quite fabulous about being free.”

Elbaz left no doubt as to how he felt about some of the fashion at Monday night’s Met ball, which he attended. “Loud is the new cool,” he said. “I prefer whispering. I saw the exhibit at the [Cos-tume Institute], and it was my favorite ever. It was so much about whispering again. It was about workmanship. It was almost silent.

“I always feel that ugly is the new beautiful,” Elbaz continued. “I’m not into that. Ugly is ugly. Maybe it’s a reflec-tion of the times, so I’m not surprised that there’s so much ugliness.”

He admitted to being unsettled by some of the changes roiling the industry. “Show now, wear now,” he said. “I’m thinking what is happening? We can build a wall to protect us from the world or we can build a windmill that will help us go faster. Fashion built a wall and bunker to protect itself.”

The changes, Elbaz said, are the indus-try throwing ideas against the wall to see what will stick.

The designer made clear that he has no use for the pretension of fashion insiders. “We need to celebrate design so we can celebrate fashion again,” he said, adding facetiously, “It really helps if you’re famous. These days, if you hold a camera, you already call yourself a photographer and wait for [the Museum of Modern Art] to call you. If you’re good-looking, you can be a chef.”

Warning students about taking short cuts, Elbaz said, “You can use Google, but dream and think also. I hear ceos speak to wholesalers who say they need everything less expensive and retailers who say that only expensive sells. If we have a better dialogue with management, and inject more love and less fear into our work, we’ll have a beautiful reason to wake up every morning. Nothing kills me more as a designer and creative per-son that politics.”

Despite the long hours and sacrifices of “finishing a collection and being half dead and knowing that you’re late with the next collection,” Elbaz said his beef isn’t with the industry’s crazy hours and limitless expectations. “It’s not about the hours and being tired. Designers are not machines.”

The only thing that really matters to a designer is having creative freedom. “We can no longer create for needs invented by marketing people,” he said.

For his next act, Elbaz said that as a man who is full of contradictions, he’s

attracted by the high street and high market.

“I want to touch both,” he said. “I’d love to touch the world of the high street and next to it, I’d love to make clothes for women I love.

“Since I left [Lanvin], I have a huge scar,” he said. “For the first couple of months, I walked around Paris and it was raining. I never knew if it was the rain or my tears.

“If I ever find an interesting job that will make me want to wake up again, I’ll teach every Friday and work one day in a hospital,” he said of his plan for giving back. “There’s no formula. But I don’t

want to think about Lanvin.”The self-deprecating designer said,

“It’s not always easy being me. The day after a show, I’d get so depressed.”

Elbaz described growing up in a small neighborhood in Casablanca, surrounded by blue-collar families. “I always sketched women. You’d think these blue-collar workers would have made fun of the fatso sketching women,” he said. “They didn’t. People who are divas and difficult to deal with usually are not the best.”

With that, Elbaz was finished ruminat-ing about his life and career. “I have to run,” he said. “I have an event at 7.”

RETAIL

Alber Elbaz Navigates Fashion World Post-Lanvin

Here and left: Alber Elbaz at The New School’s

Parsons School of Design.

5 MAY 2016 7

● The brand’s partnership with the All England Lawn Tennis Club has been going on for 11 years.

BY SAMANTHA CONTI

Splendor on the Grass: Like strawberries and cream, regular rain showers and the Duchess of Cambridge rooting from the royal box, Polo Ralph Lauren’s uniforms for the annual Wimbledon tennis champi-onships have become a British tradition.

After 11 years, the label is updating its designs for Wimbledon’s on-court officials, including chair umpires, line umpires and ball boys and girls. The new uniforms will make their debut next month when the tournaments begin at The All England Lawn Tennis Club in Wimbledon, London.

The ball boy and girl uniforms have a more technical look and feel with updated fabrics, including a perfor-mance pique knit shirt with stretch and

moisture-wicking properties. Girls will wear a navy skort and boys’ navy tennis shorts. The uniforms also feature flashes of the traditional Wimbledon colors of green and purple, another new addition.

The women’s umpire outfit features a fitted, pinstriped navy blazer, a wide-leg trouser and a bias-cut skirt with mother-of-pearl buttons. The men’s sport coat has a navy pinstripe with three buttons, a notch collar and patch pockets. The dress shirt worn by all umpires is made from a fine yarn with a soft hand, according to the company. The umpires’ trousers are white, and both men and women will wear white tennis sweaters with purple and green stripes around the V-neck.

The Polo Ralph Lauren Wimbledon col-lection will be sold at select Ralph Lauren stores, online,and through wholesale part-ners. Merchandise will also be available during the tournament, which runs from June 27 to July 10, at The Wimbledon Shop on site and online.

Polo Ralph Lauren marked its 10-year

anniversary as official outfitter of The Championships, Wimbledon, last summer. “Ralph Lauren Corporation is honored to continue its part in the rich sporting tradition and history of tennis at Wimble-don on its 130th anniversary,” said Ralph Lauren.

The event is attended by an average of 490,000 visitors with a global news access audience of over 1 billion viewers across 200 territories. The digital audience boasts nearly 50 million unique visitors across Wimbledon Web sites, social chan-nels and apps.

The partnership with The All England Lawn Tennis Club is one of the Polo brand’s many sporting collaborations and sponsorships. It works with organi-zations including the United States Golf Association; The PGA of America; the U.S. Ryder Cup Team, and the U.S. Open Tennis Championships. As reported, it has created the opening and closing cere-mony uniforms for the U.S. Olympic and Paralympic Teams.

FASHION

Polo Ralph Lauren Unveils Wimbledon Uniforms

● Chalhoub Group opens a dedicated children’s department store.

BY RITU UPADHYAY

DUBAI — When it comes to kids, spend-ing in the Gulf is limitless. According to Euromonitor International the value of the children’s wear market in the United Arab Emirates alone is worth $2.2 billion.

Dubai-based Chalhoub Group, the region’s leading luxury retailer, has decided to invest heavily in this lucrative segment, launching this month what is the world’s largest dedicated children’s depart-ment store. Spanning 107,000 square feet of retail space spread across three floors with 200 brands and 50 shops-in-shops, Level Kids offers a comprehensive selec-tion of children’s wear, shoes, accessories, toys and specialized services under one roof for children aged from 0 to 12.

“We are in countries where people have more kids than other countries in the world,” said Patrick Chalhoub, co-chief executive officer of the Chalhoub Group. “And it’s not just quantity, but also the quality of time they give them. Mothers here will stop working to spend time with their kids, connect with them and really pamper them.”

According to U.N. data, in the UAE 14 percent of the population is under the age of 14. In other Gulf countries the numbers are even higher: Kuwait has 23 percent under 14 and Saudi Arabia has 28 percent.

While Chalhoub is hesitant to use the word luxe to describe the experience, Level Kids is meant to be a place where both children and parents will be pam-pered. “We want them to enter this world of wonderment, where kids can discover fashion and shopping.”

Within that environment kids are drawn in by features like an LED aquarium, a

mock submarine, dedicated play areas and even a custom-made scent for the store.

“We have to make it very lively and not static,” said Chalhoub. “The whole idea was to create a very playful environment.” But it is far from being an amusement parklike environment. Surrounded by brands ranging from Stella McCartney Kids to Burberry Kids and Billionaire Couture Kids, parents and kids are encouraged to linger and discover. “It’s not meant to be gimmicky. We want people to enter a world where you say wow, but it’s easy to navigate and not overstated.”

In order to keep Level Kids dynamic, activities have been incorporated into the space. “We need to create constant traffic

to bring people into the store,” admitted Chalhoub. The store will offer everything from seasonal classes and activities such as dance in a dedicated area as well as a team of stylists who work with young clients and parents to pick out their perfect wardrobes and go over the latest trends. There are dedicated VIC, or “very important chil-dren” private rooms for kids to relax and enjoy the full retail experience.

“In the GCC, clients like to connect with the sales teams, so this is very important,” he said.

The store also has a kid’s beauty salon and spa, two cafés and a photo studio. Chalhoub said in the region in particular there is a mini-me phenomenon with

parents and children. “Often parents here have the tendency to dress their kids in a way they would like to dress them-selves, so we are really giving them this opportunity.”

The concept of Level Kids came from the company’s deep experience in the retail market. As a franchise partner for many luxury brands in the region, the group saw the need to build out something dedicated for children. “We had luxury kids brands in the market, but you didn’t have the full experience,” said Chalhoub. “It was in a very scattered way. You’d have children’s stores mixed in at malls with different categories.”

But the company found that their stores performed better when grouped with other children’s brands. “When you put different brands of kids next to each other in a mall, our productivity is as good as adult brands, just because they are together,” said Chal-houb. “Our goal was to build an experience around that.”

The opening of Level Kids capitalizes on the success of another Chalhoub concept which launched in 2012, Level Shoes. The shoe store has seen phenomenal success, winning several international retail awards. Level Kids will be part of the “Level” mas-ter brand, which is the group’s own retail concepts across several monocategories and formats. “We saw that we can take one category that is in department stores and really magnify it much, much more.”

And although retail growth in the region has slowed, Chalhoub is confident of the success of the concept. “I have no doubt we are catering to a high demand.”

One key strategic shift for the Level Kids concept is a move away from the typical Dubai model focus on retail tourism. “We are focusing on the local community here in the UAE and long-term expats and other Gulf nationals,” he said.

Even the location, outside of Dubai Mall and Mall of the Emirates, was a strategic decision. Level Kids is located at CityWalk, a new outdoor style mall development in Jumeirah that is more community than megamall. “We selected this location to really connect with local community. This neighborhood is a wealthy community,” said Chaloub.

RETAIL

Level Kids Opens in Dubai

A sketch of a Polo Ralph Lauren

uniform for Wimbledon.

Level Kids opens in Dubai.

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● Kantor says he believes TPP can pass this year in a lame-duck session of Congress.

BY KRISTI ELLIS

WASHINGTON — Mickey Kantor knows all about bruising battles with Congress to get a major trade deal passed — he was U.S. Trade Representative under President Bill Clinton from 1993 to 1996 when the North American Free Trade Agreement was passed.

NAFTA is once again coming into the spotlight — and not in a good way — as presidential candidates, including Hil-lary Clinton, point to the trade agree-ment as a cautionary tale and the reason they are opposed to the Obama admin-istration’s own legacy-defining deal, the Trans-Pacific Partnership trade agree-ment, which aims to remove barriers to trade to encompass nearly 40 percent of the world’s gross domestic product.

Kantor, now a partner at the Washing-ton law firm Mayer Brown, talked about the prospects of Congress ratifying the 12-nation TPP, his thoughts on Hillary Clinton’s opposition to it and the impact of the presidential election on TPP and the debate over global trade.

WWD: What are the prospects for TPP? It has run into some opposition on the Hill. Do you think it can pass this year?

Mickey Kantor: I think it can. I think the time to do it is during the lame duck session. It makes it easier politically for a number of folks to vote for it. Also, it will be beyond the heated and somewhat uninformed rhetoric of the campaign regarding trade. That makes a big difference.

It is enormously important that we do it for a number of reasons, not the least of which is we have never, the United States, turned down or defeated a trade treaty. Our international relations, our connections to other countries, how we influence the rules, not just trade but other areas, would be severely harmed if we turn down this treaty.

WWD: There are national security arguments made for this agreement. If, for whatever reason, the agree-ment fails and is never ratified by enough countries, where does that leave the U.S. in the global trade realm?

M.K.: It leaves us as a laggard, as a follower, as someone who will not write the rules. If we don’t write the rules, if we don’t create a rules-based trading system, someone else will and you can guess who that is going to be.

We need to provide leadership. We need to work with China. There is duopoly in the world in China and the United States, the two greatest powers on earth. The way we connect most positively is trade — the movement of people, the movement of goods and ser-vices, the movement of money. It would be a serious setback for the U.S. and Asia if we were to turn this treaty down.

WWD: There has been a lot of anti-trade rhetoric and it is at fever pitch at this point. Has that damaged at all

the prospects for TPP? Has it slowed it down this year?

M.K.: It has certainly slowed it down and made it more difficult. There is no doubt about it. Most of what you hear is uninformed and wrong. It is astonishing to contemplate that one of these [candidates] could sit behind that big desk in the Oval Office and be faced with the reality that we live in a globalized world driven by technology and we need to create the rules of the road if we’re going to have a rules-based trading system.

WWD: Is it a surprise to you that someone like Hillary Clinton has come out in opposition or is it part of presidential primaries as we’ve seen historically?

M.K.: Some of it is driven by the primaries. Hillary Clinton, who happens to have been my friend for a long time — almost 40 years — has always been somewhat of a trade skeptic. She was not exactly a supporter of NAFTA. She was obviously not going to say anything negative because it was one of her husband’s major priorities as president. Therefore, she was not going to say anything, but she and I had probably a number of arguments about it.

Now, she has voted for trade treaties

and against trade treaties. When I was USTR, we did 200 treaties in four years. Were all of them perfect? Of course not. They need to be updated. The world changes. People are looking at it now in retrospect. Therefore, of course NAFTA is not perfect. We did the best we could with Canada and Mexico. They were not sitting at the table as supplicants. We had to negotiate with them what was in the best interests of everyone and get it done. So in the end, has it been as big a success as we articulated? Probably not. But was it critical to do? Yes it was. It’s not even a question.

WWD: What would the world be like with Donald Trump as pres-ident, who has been leading the antitrade rhetoric and calling for imposing tariffs on China? What hap-pens if we become a more isolation-ist country?

M.K.: You can’t be isolationist in a global economy. Here’s the challenge: Donald Trump [doesn’t] understand when [he walks] into that office the first thing that happens is [he] will change [his] rhetoric, [his] approach and [his] support for trade treaties. I guarantee you. No president since the Second World War has opposed trade treaties. Not one — no Republican, no Democrat.

People tell us we’ve not been tough enough or not focused enough or not made treaties work. It’s just not true or actually accurate.

Let me say it again, all of these — NAFTA, the Uruguay Round and others — need to be continually updated. I think that’s one of the weaknesses we’ve had is that we’ve not gone back and continued to update these treaties. We learn from them. There are things we don’t cover or they are not written well enough. Maybe the investment provisions need to be looked at more carefully. Maybe we need to look at what we do not just on the environment and labor but on corruption — make an anticorruption standard that is part of a trade treaty, enforce them.

WWD: Do you think this admin-istration has lost the argument with the American public about the economic benefits of trade since we have heard so much concern coming from everyday Americans? Have they lost that argument?

M.K.: When we started the NAFTA debate, way back in the dark ages of 1993 — the debate over ratification — only one-third of the American public supported NAFTA. President Clinton, Vice President Gore, others weighed in and fought for it. They went to the public, especially the president. By the time we got to the vote, 66 percent sup-ported NAFTA.

How did it jump so much? People don’t know much about international trade treaties. American people are very smart. They may not pay attention all the time. When they heard Clinton and Gore articulate what this was about, why it was important, they came around very quickly.

WWD: Will the same hold true for this one, TPP?

M.K.: I believe if the president con-tinues to emphasize TPP and talk about it in broader national security terms, economic terms and in political terms about how important it is, it is clear to me we can bring the public around and the Congress.

WWD: If the deal is not passed this year, do you feel it’s lost or is there still an opportunity next year?

M.K.: Oh boy. There will be an oppor-tunity and, depending what happens in the election and who is president, I would be very concerned if it didn’t pass this year.

WWD: Do you feel it has enough votes or that they can work to get enough votes for it?

M.K.: I think it’s close right now. I think it is better off after the election and before the next president is inaugu-rated — in a so-called lame duck session — than it would be right now.

WWD: If it slides to next year, are the prospect a little dimmer?

M.K.: Not dimmer, but I think dif-ferent. We don’t know what is going to happen in this election. We don’t know what the Congress is going to look like. I think that it becomes more problematic only because there are so many unknowns. That’s why I think not dimmer, but just different.

BUSINESS

Former USTR Mickey Kantor Speaks Out on Trade

Mickey Kantor and Bill Clinton

5 MAY 2016 9

● The sporting goods firm has put its TaylorMade, Adams and Ashworth brands on the block.

BY JOELLE DIDERICH

Adidas Group is selling its TaylorMade, Adams and Ashworth golf brands to focus on its core footwear and clothing categories, as it muscles up to take back its number-two posi-tion in the U.S. market from Under Armour.

The German activewear firm, fresh off a record first quarter, said it would hold on to its Adidas Golf footwear and apparel brand, which chief executive officer Herbert Hainer estimated accounts for 40 percent of reve-nues at the division.

In parallel, Adidas will launch negotia-tions with interested parties for the sale of the remainder of the loss-making division, consisting mainly of the TaylorMade brand, a market leader in golf equipment, as well as the Adams and Ashworth brands. Adidas has hired Guggenheim Partners LLC to explore options, as reported.

“TaylorMade is a very viable business. However, we decided that now is the time to focus even more on our core strength in the athletic footwear and apparel market,” Hainer said.

Making his pitch for the brand, the execu-tive touted TaylorMade as “the clear number one driver brand in the industry and the most played brand on tour.”

Revenues at the golf division, which is in the throes of a turnaround plan, were down 1.4 percent on a currency-neutral basis in the first quarter, solely due to the Adams and Ashworth brand, which continued to record double-digit declines. TaylorMade posted a 6 percent increase versus the prior year.

Hainer said the brand expects to book

additional one-time costs this year and was due to reap the full benefits of the restructur-ing in 2017.

“With its leadership position in the indus-try and the turnaround plan gaining traction, which is clearly reflected in the top- and bot-tom-line improvements recorded in Q1 as well as recent market share gains, I am convinced that TaylorMade offers attractive growth opportunities in the future,” Hainer said. “At the same time, the planned divestiture will allow us to reduce complexity and focus our efforts on those areas of our business that offer the highest return and where we can have the biggest impact in reaching our consumers and winning their loyalty for the Adidas and Reebok brands.”

As part of its five-year strategic plan unveiled last year, Adidas has also decided to close its 16 directly owned Adidas Neo stores in Germany, the Czech Republic and Poland in order to focus on key wholesale partners, Hainer said. The casual sportswear brand targets teenagers with a fast-fashion approach and past ambassadors such as Justin Bieber and Selena Gomez, logging sales of one billion euros, or $1.1 billion, in 2015. Hainer

emphasized that the bulk of the Neo global store fleet, including 2,000 stores in China operated through franchise partners, will not be affected.

In response to a question, the executive said Adidas has no plans to sell its Ree-bok CCM Hockey business, as previously rumored.

The announcements came as Adidas pub-lished full results for the first quarter, in which revenues soared 22 percent to 4.8 billion euros, or $5.29 billion, the highest quarterly revenue in the group’s history, thanks to best-selling sneaker models including the Stan Smith, the Superstar and the Adidas Originals NMD. Preliminary results were published on April 27.

“This quarter’s accomplishments show that we flew off the starting blocks in 2016,” Hainer said.

“Our product and marketing initiatives are resonating extremely well with consumers across all regions and in performance and lifestyle categories alike. This gives us every confidence that 2016 will be a record year and will lay the foundation for the long-term suc-cess of the group,” added the outgoing ceo.

In January, the German activewear brand named Kasper Rorsted it new ceo. He is to join the company in August and succeed Hainer on Oct. 1 after a two-month transition period. Hainer had come under pressure from investors last year after a string of profit warnings.

In a development that caught analysts by surprise, Adidas is now gathering enough momentum that it can envisage recovering the number-two spot in the U.S. market behind Nike. “It’s only a matter of time,” Hainer predicted in a conference call with analysts and journalists.

Underscoring the cutthroat battle for mar-ket share, he said Adidas would continue its legal battle to prevent rival Puma from selling

its popular NRGY shoe, despite a German court rejecting its bid last month. NRGY features a damping sole made of an innova-tive synthetic called expanded thermoplastic polyurethane, similar to the Adidas Boost. The two activewear companies each claims it developed the synthetic first, although neither had it patented.

“There is no doubt that our Boost technol-ogy is quite superior – quite superior – to any other technology, obviously, of the competi-tor,” Hainer said. “You can expect that we will defend all our rights until the last minute.”

As it gears up for major sporting events including the Euro 2016 soccer champi-onships and the Olympic Games in Rio de Janeiro, Adidas reported that its first-quarter performance was driven by accelerating momentum at both its Adidas and Reebok brands.

Revenues at Adidas grew 25.5 percent on a currency-neutral basis, helped by double-digit rises in the training, football and running categories, as well as Adidas Originals and Adidas Neo. Sales at Reebok were up 6.5 percent.

By region, revenues in western Europe jumped 24.7 percent in currency-neutral terms. North America rose 21.6 percent, Greater China grew 30.2 percent, and Russia/CIS eked out a 1.8 percent gain. Revenues in Latin America grew 18.7 percent, Japan jumped 44.4 percent and MEAA posted a 17.2 percent gain.

Hainer noted growth in North America was driven by both its lifestyle offerings — which include collaborations with Kanye West and Pharrell Williams — and its performance business, with the running category benefit-ing from the growing popularity of the Ultra Boost franchise.

The group last month raised its guidance for 2016. It said net income from continu-ing operations should increase between 15 percent and 18 percent, up from previous guidance of 10 percent to 12 percent. Sales in currency-neutral terms are expected to grow 15 percent versus a prior forecast of 10 percent to 12 percent.

All dollar rates are calculated at average exchange rates for the period in question.

BUSINESS

Adidas to Sell Golf Brands

● Michael Kors, Carolina Herrera and more turned out to The Carlyle hotel to celebrate the editor in chief.

BY KRISTI GARCED

A who’s who of celebs and fashion design-ers packed The Carlyle hotel on Tuesday night. Near a velvet banquette at the foyer, Ralph, Ricky and David Lauren embraced for a photo opp. Elsewhere in the room, Vera Wang, Alber Elbaz, Carolina Herrera, Michael Kors, Maria Grazia Chiuri, Pierpaolo Piccioli, Tory Burch, Francisco Costa, Jason Wu, Peter Dundas, Prabal Gurung, Peter Copping, Georgina Chapman, Michael Bloomberg, Alan Cumming, Jeff and Justine Koons, Terry Richardson and Brooke Shields exchanged air kisses and sampled hors d’oeuvres. All of them had formed a queue to congratulate the evening’s guest of honor, Glenda Bailey, who was celebrating 15 years at the helm of Harper’s Bazaar.

The evening began with Champagne toasts from Hearst Magazines president David Carey and Hearst Corp. executive vice chairman Frank Bennack Jr. “I always refer to Harper’s Bazaar to my friends, family and others as being predictably unpredictable,” Carey told the crowd. “We know it’s going to be great,

but we’re never quite sure exactly what will be in the next issue.”

Bailey — known for her no-nonsense atti-tude, her humor and her daring cover shoots, for instance, she once phoned Demi Moore, who was on hand for the evening, to ask if the actress would be willing to pose next to a giraffe on a floating staircase — reflected on her tenure at the glossy. She told WWD she welcomes the changes brought on by today’s fast-paced media climate. “What I love about technology is that we can cover the news on a moment-by moment basis, but then we can cover the bigger picture, this beautiful imagery where people can dream...I love that balance,” said Bailey, clad in a ruffled Gucci frock.

She added that the best part of her job is collaborating with photographers, artists and writers — and making the most of other peo-ple’s talent. “The best thing about working at a monthly glossy magazine is that you get a chance to indulge your creativity, and to come up with stories that make the news — that don’t just report on the news but create it,” she said. “That’s the most fun. I love to inject fashion with a sense of humor and have fun along the way.”

Though most designers were quick to note Bailey’s optimism and warmth, Donna Karan praised one of the editor’s lesser known strengths — her psychic abilities. “When I met

Glenda in London for the first time, she read my palm, and I was like, that’s it — we’re in love,” Karan said. “She was totally accurate. I saw her the other day and said, ‘Glenda, I need a new reading to find out what’s hap-pening in my life.’ She’s painted me gold, God only knows what else….She once had me on a roof with two guys in a headstand [in a photo by Douglas Friedman]. If there’s fun, you shoot with Glenda.”

Herrera echoed the sentiment. “Glenda knows exactly what she wants, but she does it in a fun way,” she said. “Fashion shouldn’t be that serious.”

Gucci creative director Alessandro Michele — still in town following Monday night’s Met Gala — personified the label’s eccentric maximalism in a silk teal bomber jacket layered underneath a white, studded leather motorcycle jacket and pearl-accented loafers. “Glenda’s that kind of English person that I totally love,” Michele said. “She’s funny, she’s intelligent, she’s curious….We have kind of a love affair. We went out and had some dinner together and we laughed. You can’t imagine how much we laugh.”

Tommy Hilfiger revealed his kinship with Bailey’s long-term partner, Stephen Sumner. “Stephen and I have so much in common — we are both obsessed with art and fashion.

Whenever we’re together with him, Steve and I get into these lengthy conversations about art and music, and [Glenda] probably thinks I’m really rude,” he said with a laugh.

At the Met Gala, Hilfiger outfitted Gigi Hadid in a chiffon gown with a silver sequined bustier. “Gigi was at our table, Hailey Baldwin was next to her and Kendall [Jenner] was at the next table with the Kardashian-Jenner clan,” Hilfiger said. “Gigi kept texting, and I said, ‘So…what did Kendall say?’ Because Kendall was texting, too. And they were both laughing, because they knew that I knew they were texting each other.”

Olivier Rousteing was still reeling in the previous night’s adventures as well, having hosted his own Met Gala after party at the Gilded Lily. “We had fun, just my friends, Beyoncé, Kim and Kanye,” he said. “It was just relaxed. No gowns. Just chilling.”

Ditto to Piccioli, who spent the previous night partying at the Top of the Standard. “The [Met Gala] after party is always super cool. I love to go to the Boom Boom to see New York, and to see people with taste,” he said, listing Zoë Kravitz, Lily Collins and Rachel McAdams among the starlets who wore Valentino at the gala. “We wanted to dress different women with different attitudes,” he said. “All of them are cool in a different way.”

Elbaz made his arrival as the cocktail party wound down, surprising Bailey with a framed illustration that read “Glenda the Magnificent.” He praised the editor in chief as a mensch above all. “She is a great editor and a loyal friend — someone that supports designers,” Elbaz said. “She is there with us when we are high and when we are low, and this is beautiful.”

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Glenda Bailey Celebrates 15 Years at Harper’s Bazaar

Glenda Bailey and Demi Moore

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Even as it reorganizes under court protec-tion, Aéropostale said it will continue to seek a buyer. Any sale is likely to take place during the six month time frame of its bankruptcy proceedings, the retailer said.

As part of the bankruptcy, Aéropostale said it will close an initial 113 U.S. locations and all 41 stores in Canada. The firm will continue to review its store leases to determine whether those terms are competitive with current market dynamics. The sites that are slated to shutter will have store closing sales beginning this weekend. Those in Canada will begin store closing sales on Monday.

The bankruptcy filing also included a Rule 2004 motion to compel Sycamore’s managing director to be deposed in connection with the disputes between the two firms.

Aéropostale’s chief financial officer David J. Dicks said in the court filing that one of the company’s major problems was private equity firm Sycamore Partners. Sycamore is a pre-petition lender, and also owns a sourcing firm called MGF Sourcing, which became one of Aéropostale’s largest suppliers. Dick said MGF and Sycamore forced the company into cash in advance terms, that the actions were unauthorized and that the actions jeopardized the company’s turnaround efforts.

“It has become increasingly clear to me over the course of the last several weeks since Syca-more and MGF first demanded cash in advance terms — before manufacturing or supplying any merchandise — that Sycamore was using its leverage over MGF to precipitate the filing of these Chapter 11 cases,” the cfo said.

Dicks also alleged in the court document that Sycamore’s managing director Stefan Kaluzny reached out to the retailer’s other supplier, L&F, and suggest that it should change its cash terms to “COD” because “Aéropostale was likely to file for bankruptcy in March or April of 2016.”

The cfo added that the company made some preferential payments to MGF and L&F to obtain some of the merchandise it needed, and added that MGF’s actions placed the retailer at risk of violating a $70 million minimum liquidity covenant that was part of a pre-petition loan from a different Sycamore affiliate.

A spokesman for Sycamore, Aéropostale’s

largest stockholder and largest secured creditor, denied the allegations by the teen retailer. He said Sycamore intends to defend itself vigor-ously. “Unfortunately, Aéropostale manage-ment has been unable to reverse the company’s disappointing financial performance, which led to today’s bankruptcy filing.” He also confirmed that MGF Sourcing exercised its “contractual rights to reduce or eliminate payment terms once Aéropostale’s liquidity fell below $150 million,” noting that the action was permitted under the terms of its sourcing agreement with the retailer.

Aéropostale has also filed a motion to compel MGF to honor the terms of its agreement, which prompted MGF late Wednesday to file an objec-tion to that motion.

Sycamore as Aéropostale’s largest stock-holder has much at stake in the bankruptcy. While creditors are lucky to get some return on what is owed to them, equity holders typically get wiped out in a bankruptcy when shares get extinguished.

Meanwhile, Sycamore on behalf of its affili-ates has also filed an objection to the motion for approval of the debtor-in-possession financing facility. That document noted that “since their 2014 initial investment, the debtors have proven to be a financial disappointment of epic propor-tion.” The document noted that between fiscal 2012 to fiscal 2015, sales have fallen from $2.39 billion to $1.51 billion, and comparable store sales have declined by over 30 percent. It also said the retailer has been “hemorrhaging cash,” losing $289 million between 2013 to 2015. The document also said that the term loan lenders and MGF have acted within their legal rights and that it became clear in January 2016 that “their investment in the debtors was imperiled and they were compelled to protect themselves as creditors.”

And Sycamore threw out an allegation of its own: “In the face of the term loan lenders’

concerns, the debtors accepted no responsibil-ity for their own financial and operating per-formance failures…. [T]he debtors consistently have eschewed requests for commercial trans-parency, and have rebuffed good faith attempts to work together to understand the problems underlying the business or to achieve a realistic and mutually beneficial outcome in light of the circumstances.”

Jude M. Gorman, general counsel at Reorg Research, which tracks bankruptcies and dis-tressed debt, said the bankruptcy is “unusual” since those allegations usually are not filed on the first day of a case. He noted that the allega-tions are just that at this point, and still need to be proven in bankruptcy court. He also said that Rule 2004 motions are “used to find out what someone allegedly did,” and that requests are not automatic. Gorman also explained that the reason for the deposition is to “get more information to see if there are other causes of action, such as breach of duties or tortious interference.”

Julian Geiger, Aéropostale’s chief executive officer, said, “While initiatives such as the imple-mentation of our two-chain Factory and Mall strategy and our merchandise repositioning have started to gain traction, the ripple effects of an ongoing dispute with our second-largest supplier put substantial strain on our liquidity while also preventing us from realizing the full benefits of our turnaround plans.

“As a result, we have chosen to take more decisive and aggressive action to create a leaner, more efficient business that is well-positioned to compete and succeed in today’s retail environ-ment,” Geiger said.

The bankruptcy petition was expected as there have been rumblings for weeks that the retailer was considering the option. Earlier this year it began cutting jobs in a cost reduction move.

While Aéropostale indicated that the dispute

with Sycamore hindered its chances of a turnaround, the retailer is merely the latest in a string of teen brands to hit the wall. Earlier this year Pacific Sunwear of California filed a voluntary Chapter 11 petition and has a deal with its secured term loan holder Golden Gate Capital to take it private, although that could change if another bidder comes to the table and the company goes up for an auction. PacSun on Tuesday won the approval of a bankruptcy judge to begin soliciting bids for the company. The approval could open the Anaheim, Calif.-based retailer up for auction if it receives at least one qualified bid in addition to the stalking horse offer.

In the last two years, teen retailers such as The Wet Seal, American Apparel, Quiksilver and Deb Shops have all filed — of the four, Deb Shops is the only one that is no longer in business. Wet Seal was acquired by Versa Capital during the bankruptcy court auction, while both American Apparel and Quiksilver successfully reorganized.

Craig Johnson, president of Customer Growth Partners, said one of the issues faced by retailers today is the “crowding out” phenome-non in which the share of discretionary income for apparel gets “squeezed out” by growth in spending in other areas.

He said that while all retailers face the same issue, the “problem shows up first in the teen sector. All Millennials have enough stuff. They want experiences. They want Netflix and dining out with friends. The purchase of actual physi-cal merchandise is going down.”

Johnson explained that the teen sector did well from 2004 to 2007 and most retailers over-expanded their store base. PacSun, for example, had almost 1,000 stores at its peak. Some, such as Forever 21, have huge boxes. Now with competition from fast-fashion players and less square footage productivity in each store, some are finding there is insufficient demand from consumers to justify the existing store base.

In the case of Aéropostale, Johnson said another problem is that the retailer moved away from its core teens aged between 14 and 17, and at some point skewed toward pre-teens and even to as young as fifth graders. “Most of these teen stores have about two-thirds of their shoppers as female, and the only thing that kills [high school] young women in a store is seeing their kid sister or brother shopping in the same place,” Johnson said.

He said that lately the teen retailer has been showing signs of increased conversion and bet-ter traffic at its stores, now that it’s gone back to focusing on shoppers ages 14 to 17. “They were unable to add enough older female custom-ers to compensate for the loss of the younger crowd,” Johnson said.

10 5 MAY 2016

AéropostaleFiles Chap. 11Petition CONTINUED FROM PAGE 1

● The move was part of a wider capital increase.

BY JOELLE DIDERICH

PARIS — Eurazeo said it has taken a minority stake in the online fashion and beauty retail platform Farfetch.

The Paris-based private equity fund, which has also invested in Vestiaire Collec-tive, Moncler and Desigual, said its Eurazeo Croissance unit contributed 20 million euros, or $23 million at current exchange, as part of a capital increase.

This is part of a larger investment of 110 million euros, or $127 million, raised by a pool of international investors including IDG and Temasek, alongside the company’s existing shareholders.

According to the investment fund, the capital injection will be used to finance Farfetch’s development projects, particularly international growth and omnichannel retail. The company aims to consolidate its position in the Asia-Pacific region, which accounts for

26 percent of its revenues.Founded in 2008 by José Neves, Farfetch

is present in nearly 190 countries and brings together more than 400 independent bou-tiques. The Web site is available in nine lan-guages and features more than 100,000 items and 1,000 brands. It generated a business volume of more than $500 million in 2015.

“We were enticed by the Farfetch model, which covers the sectors in which we have already gained a solid foothold: digital technology, luxury goods and brand names,” said Virginie Morgon, deputy chief executive officer of Eurazeo.

“In addition to its international profile, multichannel model and its perfect under-standing of the rules governing the luxury goods industry, we were very impressed by the company’s ground-breaking business model and the quality of its implementation, particularly from a technological perspec-tive,” she added.

Neves said: “I am delighted to have Eurazeo join as an investor. I was immediately impressed by the strengths of their team, both on the digital side and their knowledge of the luxury industry and generally by their amaz-ing track record and world-class reputation and access. We believe Eurazeo is going to be a transformational partner for Farfetch.”

BUSINESS

Eurazeo Takes Stake in Farfetch

A page from the Farfetch Web site.

air, with Aéropostale filing for bank-ruptcy and many in the room of 140 industry executives behind the scenes questioning the fates of Sears Holdings and American Apparel, Questrom’s appearance seemed propitious. Though it’s been a decade since he held active retail duty, Questrom is still out in the stores, busy on boards and not shy about offering opinions. He rarely makes public appearances, but he seized the moment, raving about fast fashion, denouncing corporate boards as “inef-fective” and observing, “There are too god damn many stores.”

Questrom also spoke on how Wal-Mart could combat the ascension of Amazon, critiqued Ron Johnson and his infamous tenure at J.C. Penney’s, discussed his approach to turnarounds, and what it could take to revive Jos. A. Bank, a divi-sion of Tailored Brands, where he serves as a director. He’s also a senior adviser at Thomas H. Lee Partners.

He gave a thumbs up on Neiman Marcus and Nordstrom succeeding with their first New York stores, both slated to open in 2018. “The mall Neiman’s is locating in [Hudson Yards under devel-opment] is a little removed from where the upscale customer is in Manhattan, but over time it will probably be OK. Both of them are good stores and I think both will do well. But I think the whole upscale business has got to be more realistic in terms of some of the pricing.”

For a man who prefers not to use e-mail, he had much to say about the Internet and pure plays: “I don’t know too many people who make money at all, but you got to be in it.”

He’s been known as retail’s “Mr. Fix It,” having led Federated out of bank-ruptcy, pulling Macy’s out of Chapter 11 by merging it with Federated, and steer-ing J.C. Penney’s back from the brink of collapse. On stepping into a turnaround situation, which he did on six different occasions in his 50-year career, he said, “The number-one thing is you can’t be the smartest guy or gal in the room….You need to understand the culture. Your job is to spend time walking through the store, spend time talking to the associates, talking to the store man-agers, talking to the corporate people. They have to know that you really want to know what they have to say. They are the most valuable part.

“With the information you gather from them, your own reading and looking at the business, you develop a strategy. It has to have no more than five key things to focus on. I want everyone to know what those are and I want to know what they think they can do to effect change in those five parts. I also want to pick things where we can make a difference quickly. People are feeling down. So you want to choose something that you can do quickly, so they feel they can make it.”

Questrom said it’s critical to get the right people in jobs that have to get done. “If you don’t have them inter-nally, going outside to find people is difficult….It’s critical making sure everyone on the team believes they are very important to the success of that company. Not the ceo…every player

has to believe they are essential to the success of that company. Being a ceo is a wonderful job, but it’s the job of a ceo to make people successful.”

He was candid commenting on Jeff Bezos, founder of Amazon, and the Web giant’s thrust into apparel, which is pre-dicted to be $50 billion by 2020. “I think they will open stores as they have done in the book business,” Questrom said. “[But] Jeff Bezos is not a merchant. He’s an operational, engineering guy. He tries everything….It will be very difficult to run a fashion business over the Internet. Zappos has yet to make money.”

Wal-Mart can beat Amazon “by being a better store” and improving the apparel presentation. “The merchandise is not presented great.”

On Johnson, who tried to reinvent J.C. Penney and almost destroyed the com-pany in the process: “I only knew him in the very end. He was a very smart man, in the sense he had very good ideas. He was thoughtful, creative. The problem is boards basically are ineffective. Mark Cohen [professor at Columbia University and former retailer] did an interesting article saying retail boards are useless. I wouldn’t have limited it to retail boards. You can’t really know a business if you go there four times a year. A board’s job is to make sure they understand the strategy and to question the strategy.”

Questrom said Johnson’s strategy of adding more expensive lines, eliminat-ing sales in a downturning economy, and spending heavy renovating stores, should have been done gradually, not dramatically. “What happens is you just get abandoned by your customers and

they go elsewhere.”Questrom reluctantly went to see

the model store Johnson created in Dallas, at the behest of J.C. Penney’s then-chairman Thomas Engibous. “I was impressed. It really looked terrific. Very upscale, very unique products. The problem was it wasn’t [for] the Penney’s customer. I said, ‘Ron, it looks terrific. But who are you designing it for? If he was properly managed — and [the strat-egy] was controlled [by the board] — they could have been successful because I think he is a very creative guy.”

Questrom, while critical of Johnson suspending all promoting at J.C. Pen-ney’s, defended his effort at Tailored Brands to eliminate the buy one, get three suits free at Jos. A. Bank, which he called “a very cancerous process.” The deal was eliminated in the fourth quarter of last year. “I was aggressive on my point of view. Buy one, get three free was going on its second year and declining in sales, dropping like 9 or 10 percent. You have eliminated any regu-lar-price customer or any customer who thinks about quality and Jos. A. Bank used to have some good quality, middle market suits. Most men come in to buy one or two suits. They don’t come in to buy four suits. Any one who does that wants to buy a cheap suit. We are not eliminating promotions. The Penney’s people eliminated promotions alto-gether. This was about getting the worst of all cancers out. We have 50 percent sales. You can buy one, get two free, but we eliminated that one which is the worst and I would like to eliminate buy one, get two free.”

He said Jos. A Bank needs to better define its customer, and the stores “must be presented in a more attractive way, but still must be a promotional business.”

On department stores, he said, “If your customer is in their 40s, you’ve got to figure out how to attract Millennials. I don’t think they are as different as everyone says they are. They don’t right now have a lot of money. You read in the papers about the debt these kids have. They are very, very value conscious. They are spending a lot of money on smartphones, what have you, but they are also shopping at fast fashion. And every retailer who is a traditional busi-ness, department stores, it’s not enough to have a sale.”

Questrom said he and his wife, Kelli, recently visited Zara in SoHo. “People were lined up at the registers. The floor looked terrific. The fashion trends were on target, more casual. This store was so on target. I don’t think the one by Bloomingdale’s looks really good. If I were part of Macy’s, I would have a fast-fashion department. I would give young Millennials something they want to buy right away. Business is not good, talking to most people here, but fast fashion is good.”

He was also keen on Primark, the Dublin-based chain that entered the U.S. with two stores last year. “You’ve got to see it. Not only are the prices terrific — they know how to merchandise the store. When you walk in everything is impactful.”

As much as he’s taken the big picture point of view, with some mega-mergers and remaking companies with broad strokes, Questrom is known to be deep into the merchandise and disposed to challenging his buyers on the nitty-gritty of the individual stockkeeping unit, whether it’s the color, the silhouette or where it’s placed on the selling floor. On Wednesday, he put the challenge to the audience. “ When I go into the stores some of you run, they are boring. There’s no excitement. No entertain-ment. It’s all sales signs.” And he said some of his more upscale shopper friends, sometimes refer to fast fashion as garbage. “But that’s what the cus-tomer wants, and by the way it’s not just young people buying it. Fifty and 60-year-old people are buying. I used to see them in upscale department stores.”

He got pointed discussing pay parity for women and the minimum wage, stating, “To my knowledge, women got paid the same as men. The only differ-ence was there were less women at the top. But I had women buyers who were terrific and were very highly paid. I never saw a differentiation there. Other businesses I can’t speak for.”

The minimum wage issue, he said, “is a lot of bulls--t. You don’t need to worry about what you get paid on your first job. What you’ve got to worry about is what you do in the job. Because if you do a good job you get paid more money. I started in a retail training program. I think I got $100 a week. My wife, who I met in retailing, got $110. To this day, she always tells me ‘I got paid more than you.’”

Among those in the audience were several people who at one point or another worked for or with Questrom, including Ken Hicks, Michael Gould, Tony Spring, Frank Doroff, Jeffrey Sherman, Arnold Aronson, as well as Larry Leeds, John Pomerantz, Dan Schwarzwalder, Jill Granoff, Gil Harrison and Abbey Doneger. Robin Lewis of the Robin Report, who moderated, noted the standing room attendance. “Allen, do you know what this means? Lewis asked. “It means you are still relevant.”

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Allen Questrom

After pouring his love of Latin music into Chanel’s cruise collection, Karl Lagerfeld demonstrated it again at the after party at the Plaza de la Catedral.

Dressed in a sequined jacket by his designer buddy Hedi Slimane, the designer tore up the dance floor with Cécile Cassel, demonstrating why he was once a champion of tango and cha-cha. Cassel was one of the rare VIP guests who had been to Cuba be-fore, having made it a side

trip during a recent vaca-tion in Trinidad. “I will come more often,” she vowed.

The French actress and singer, who performs under the stage name HollySiz, said she is working on her second album, which should be out next year. Dressed in white shirts, which are de rigueur in Havana, Gaspard Ulliel and Tilda Swinton swayed through the packed party, the latter on sculptural cork-heeled platforms from Chanel’s fall couture

runway. Cuban singers and drummers yielded to a DJ and more furious beats.

Frozen mojitos flowed freely at the party, for which Chanel had privatized one of the five main squares in Old Havana and construct-ed a sprawling multilevel bamboo hut appointed with vintage furniture. A fleet of Fifties cars waited outside to whisk guests back to their hotels. — MILES SOCHA

Inside Chanel’s Havana NightChanel threw an after party following the cruise 2017 show in Havana.

It may have been barely 50 degrees on Wednesday afternoon, but you never would’ve known it from the looks filling the Central Park Conservancy garden. The sidewalk along Fifth Avenue and 105th Street was a telling sign that the Women’s Committee of the Conservancy was hosting its annual luncheon, officially the Frederick Law Olmst-ed Awards Luncheon but better known as “the hat lunch.”

Women in every shade of pink under the sun and wearing hats to match (or de-liberately unmatched, as was often the case) strode in for an afternoon of mingling, fundraising and fasci-nator talk.

Michael Bloomberg, a rare male in the sea of uptown ladies, joined Martha Stewart, Marigay McKee, Fe Fendi and more inside

the tent, where pink tablecloths, cherry blossom centerpieces and glasses of rosé all but masked the otherwise grey day.

“I was all set to wear flowers, and then I said ‘No, I love this hat,’” said Jean Shafiroff, in a black-and-white checkered hat. “And then I went to my closet and I found this jacket; it’s from a few years ago, Michael Kors. And I thought it really worked. Really, I was going to wear my green Dolce, very simple. I see a trend in fashion moving forward for more solids. I think we’re going to move away from prints, don’t you think?”

Over on the stair-case, guests recapped their winter getaways. “How was Palm Beach this year?” a feath-er-topped woman asked a friend de-scending the stairs on

the arm of a hand-some young fellow. “Oh, you know, it was pretty good,” was the reply.

Heading to the trumpets encourag-ing guests to move inside the tent, the hat discussion only continued.

“I wanna get a pho-to with him, I’m stalking him,” said a tur-quoise-topped woman in hot pursuit of an ex-otically dressed man, who today donned a Wes Anderson-esque printed suit and equal-ly enthralling hat.

Over a lunch of burrata and baked chicken, speeches were made (surely of importance), but were impossible to hear over the discus-sion of the colorful ensembles everyone was wearing. As one guest said, “Who says New Yorkers only wear black?” — LEIGH NORDSTROM

12 5 MAY 2016

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Women’s Committee of Central Park Conservancy Hosts Hat Luncheon Michael Bloomberg, Martha Stewart and more came Out for fund-raising, mingling and fascinator talk.

Jean Shafiroff and Michael Bloomberg

A guest and Martha Stewart.

Lela RoseMarigay McKee

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Vox’s Bigger VoiceVox Media is expanding its reach across social media, digital, mobile and television with a host of new partnerships.

The company revealed during its NewFronts presentation Wednesday at Milk Studios in New York that its Snapchat partnership will expand to feature “major cultural moments” from all eight Vox Media properties on the Discover platform. Currently,

Vox.com was the only publication with a presence there. In order to accom-plish this, Vox is creating a Snapchat Studio.

Vox said it has also inked a deal with Telemundo for its sports prop-erty, SB Nation. The deal will create a mobile-first, bilingual property to reach Millennial Hispanic sports fans. Coverage will include soccer, mixed martial arts and boxing. SB Nation will partner with NBC Sports to develop

and distribute Sunday Night Football coverage, including a slate of original digital video series created by SB Nation and NBC Sports, “dedicated to up-to-the moment social coverage and content, and custom branded content produced by Vox Creative, Vox Media’s brand solutions division,” Vox said. Marketers, as a result, will have access to audiences on NBCSports.com and SB Nation. The deal comes on the heels of NBC’s $200 million investment in Vox Media in August.

The company also unveiled a Curbed partnership with NBC’s Bravo in which the real estate-centric site will oversee a home-themed section on BravoTV.com focused on its “Love Where You Live” section. The collab-oration, which will launch in fall, will include on-air promotions by Bravo and branded content opportunities produced by Vox Creative.

In regards to advertising, NBC Universal and Vox Media partnered on an ad marketplace called “Concert” last month. “Concert,” whose launch partner is AT&T, makes use of Goo-gle’s new programmatic technology to sell custom creative units.

On the entertainment front, Vox Entertainment, the company’s Los Angeles-based programming and development division, has partnered

with A+E Networks’ FYI channel. FYI has green-lit a new home genre series, the working title of which is “Prefab-ulous.” The show is Vox Media’s first brand extension to television, and will focus on “America’s next big trend in real estate: prefabricated homes,” the company said.

“Prefabulous” is produced by Vox Entertainment and Curbed, Vox Me-dia’s real estate and home brand, will partner with FYI to provide editorial, creative and promotional elements for the series. Production begins immedi-ately on eight half-hour episodes.

“The idea behind Vox Entertainment is our belief that TV programming has never been in higher demand — this next wave of TV consumer just expects more out of it and is watching it on their own terms,” Chad Mumm, vice president of Vox Entertainment told WWD. “FYI gets this new viewer and that’s why we’re thrilled to be working with them on this new series. We think there is a better model for creating great TV programming that takes advantage of everything we’ve learned building each of the Vox Me-dia brands. We’re taking what we know about what our audiences want and what they are passionate about and creating the next generation of great television.” — ALEXANDRA STEIGRAD

Playing the FieldKering has opted for not one, but three media partners for the second edition of its “Women in Motion” program at the Cannes Film Festival.

Variety, Le Figaro, Madame Figaro and Elle China are teaming with the French luxury and sports and lifestyle group for the series of talks on women in the film industry, set to take place at the Majestic hotel in Cannes from May 11 to 22. The Hollywood Reporter was the sole media partner for the inaugural event in 2015.

Variety’s editorial team will host the talks in English, Le Figaro and Madame Figaro the ones in French, while the Elle China teams will oversee two talks held in Mandarin. The official program of the fortnight has yet to be unveiled.

“These talks will provide the op-portunity to address various possible solutions that might result in a better representation of women throughout the industry,” Kering said.

Media partners will publish a video feed and editorial copy on each talk on their respective Web sites and social networks, using the official hashtag #WomenInMotion. Kering also plans to launch an official Web site, womeninmo-tion.com.

Variety is owned by Penske Media Corp., the parent company of WWD. — JOELLE DIDERICH

Memo Pad

Gaga Does Macy’sAs “Poker Face” blared on the loudspeak-ers, Lady Gaga appeared briefly at Macy’s Herald Square Wednesday afternoon to launch her “Love Bravery” limited-edition collection, done in collaboration with Sir Elton John as well as Lady Gaga’s sister Natali Germanotta and designer Brandon Maxwell. A huge crowd awaited the pop star — hundreds in the middle of the main floor and hundreds more lining the mezza-nines — and Gaga didn’t disappoint, making a grand entrance through two makeshift doors sandwiched between Laura Mercier and Elizabeth Arden, with a huge graphic of her and John that swung open to unveil the Love Bravery shop. Gaga, accompanied by David Furnish, made it clear the store visit wasn’t commercial. “The reason we are here today is not to sell clothing, not our Elton John, David Furnish and Lady Gaga clothing line. It’s about physical and emotional well-being” and “the intersection of love and bravery...You must be willing to understand the pain of others. I hope you are willing to get hurt.”

She did slip in a word about the fashion, however. “I made this jacket this morning. I think it will look good on you. I will see you later.”

Twenty-five percent of each purchase

from the collection will support the Born This Way Foundation, championed by Gaga, and the Elton John AIDS Foundation, chaired by Furnish. “What runs through our veins is love,” said Furnish. “We hope to spread the virus of compassion, under-standing, love and bravery all over the world.” — DAVID MOIN

On the MoveRodrigo Bazan has stepped down as president of Alexander Wang, a role he held since December 2010. The Argentin-ian-born executive joined the company in its first major growth phase, overseeing the expansion of new product categories and retail markets, including the rollout of 27 stores worldwide. He was the brand’s first appointed president since its launch in 2005. Prior to Alexander Wang, Bazan was based in Paris as the vice president and general manager, Europe, Middle East and India of Marc Jacobs International LLC.

A spokesman for Alexander Wang told WWD that the company was thankful for Bazan’s accomplishments and plans to pursue the next steps for its continued business development. An announcement of a successor is expected in the coming months. — KRISTI GARCED

Calvin Skips CannesCalvin Klein, which has thrown some of the splashiest events at the Cannes Film Festival in collaboration with the Independent Filmmaker Project for the past five years, is taking a pass this year. The company has decided to cancel its annual party, which over the years has honored such stars as Lupita Nyong’o, Naomi Watts, Julianne Moore, Rooney Mara, Emily Blunt, Isabelle Huppert, Mélanie Laurent, Sienna Miller and Rachel Weisz. The parties have taken place at a private villa on the French Riviera.

Last year’s event attracted such celebrities as Jake Gyllenhaal, Harvey Weinstein, Rossy de Palma, Joan Smalls and Doutzen Kroes. The party included a huge seafood buffet, a DJ set by Harley Viera-Newton and a live performance by California band Haim.

With the changing of the guard of the design team at Calvin Klein — Francisco Costa and Italo Zucchelli are both exiting as creative directors of women’s and men’s Collection — sources said the company decided to skip the celebration this year.

Klein confirmed that it won’t be doing an event in Cannes but still supports the IFP, which includes its sponsorship of the Gotham Awards with the presentation of the Calvin Klein Euphoria Grant to an emerging female film director.

As for the IFP, a spokeswoman said the organization will be teaming up this year with the Hamptons International Film Festival, and will be throwing a party in Cannes to celebrate Women in Film. They will be honoring the late writer Melissa Mathison, whose final film, “The BFG” di-rected by Steven Spielberg, is premiering at the festival. — LISA LOCKWOOD

Fashion Scoops

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David Furnish, Lady Gaga and Macy’s ceo Terry J. Lundgren.

Rodrigo Bazan

Emily Blunt, Mélanie Laurent, Francisco Costa, Isabelle Huppert, Rachel Weisz and Joana Vicente at last year’s bash.