PROFITS PLUNGE 81.6%

Avon CEO McCoy SetsPlan for Turnaround

By MOLLY PRIOR

NEW YORK — If Sheri McCoy didn’t know she had an uphill battle at Avon Products Inc. before Tuesday, she sure knows it now.

Leading her fi rst earnings call as the beleaguered beauty company’s chief executive officer, McCoy sketched out her to-do list against a backdrop of an 81.6 percent dive in fi rst-quarter profi ts to $26.5 million.

A mere seven days into her post, McCoy said her immediate agenda includes a global tour through key markets — including the U.S., Brazil, China, Mexico and Russia — from now through mid-June, an internal assessment of the skills and capabilities of the organization, and a review of the company’s operating model.

“I am taking a fresh look at every aspect of the business, and stabilizing the business is my fi rst and most urgent objective,” said McCoy, who joined Avon on April 23 after 30 years at Johnson & Johnson.

“My approach is disciplined. I will understand and realistically frame the situation, develop a short list of fi ve or six key priorities on which we are going to focus, put in place clear metrics and accountability, be clear about expectations and deliverables and, importantly, get the organization working together to-ward achieving these priorities.” McCoy said she ex-pects to give more details about her strategic vision during the company’s second-quarter earnings call this August. “I am confi dent that Avon’s future can be as meaningful and successful as its past.”

The fi rm’s issues — ranging from executional miss-es to a shrinking representative base to a putative bid by Coty Inc.— now rest on McCoy’s shoulders, and those of executive vice president and chief fi nancial offi cer Kimberly Ross, who joined Avon last fall. Ross forewarned analysts of a tough second quarter, as well.

With McCoy’s predecessor Andrea Jung — now Avon’s executive chairman — absent from the call, the tone was subdued. Analysts’ terse questions in

WWD

Denim RxLOS ANGELES — Beyond the simple need for fresh fashion, jeanswear marketers at the WWD Denim Summit here prescribed a series of remedies in

response to falling sales, rising prices and a sea of fi ve-pocket sameness. Their solutions included:

SEE PAGE 3

Fashion’s Brand Reviver

SEE PAGE 12

By MILES SOCHA

PARIS — Get ready for more fashion rebirths.Two storied yet long-dormant brands — the cou-

ture name Mainbocher and shoemaker Herbert Levine — are being shopped to potential investors or partners, WWD has learned.

The discreet French entrepreneur behind those projects, Arnaud de Lummen, also has several other “sleeping beauties” in his possession, having quietly gathered up trademark rights and other precious intel-lectual property — from archival designs to catalogues.

He’s drawn up detailed relaunch plans for each, showcasing the richness of their visual identities and mapping out distribution scenarios for the brands, which cut across fashion and accessories.

De Lummen, who reintroduced Vionnet ready-to-wear in 2006 and sold the label to Matteo Marzotto and Gianni Castiglioni three years later, is also the executive who in 2010 sold Moynat, a prestigious 19th-century trunk-maker, to Groupe Arnault.

Signaling fervent interest in rare heritage names, de Lummen distributed an investment memorandum on Moynat to six potential buyers — and immedi-ately received fi rm offers from fi ve of them. Bernard Arnault quickly trumped other contenders and se-cured the deal within four days, de Lummen said.

In an exclusive interview, de Lummen disclosed that he recently concluded a 50/50 joint venture with Hong Kong-based Fashionista Asia Pacifi c Ltd. that will see Belber — an American trunk and bag spe-cialist founded in Philadelphia in 1891, yet dormant

WEDNESDAY, MAY 2, 2012 ■ $3.00 ■ WOMEN’S WEAR DAILY

PHOTO BY PIET MALL/STOCK4B/CORBIS

ALL FOR PINKERIN HEATHERTON, TOMMY HILFIGER, MICHAEL KORS, DONNA KARAN AND MORE TURNED OUT FOR THE BREAST CANCER RESEARCH FOUNDATION GALA. PAGE 9

DECIPHERING CHINA

TOM DOCTOROFF’S NEW BOOK LOOKS AT THE

EVER-CHANGING CHINESE

CONSUMER. PAGE 8

■ NEW RETAIL CONCEPTS■ BREAKTHROUGH MARKETING

■ DIRECT CONSUMER INTERACTION■ ACCESSIBLE CUSTOMIZATION

■ ENVIRONMENTAL TLCFOR MORE, SEE PAGES 4 TO 7.

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By VICKI M. YOUNG

COLLECTIVE BRANDS INC. has inked a deal to be acquired by a consortium of investors that includes Wolverine World Wide Inc., Blum Capital Partners and Golden Gate Capital in a transaction valued at $2 billion, including the assumption of debt.

That translates to a cash component of $1.32 billion, or $21.75 a share. The deal is expected to close in the back half of 2012. While Collective’s board has approved the transaction, the deal is still subject to approval by shareholders. Following the closing of the deal, Collective’s current businesses will be split into separate ownership.

Collective’s Performance + Lifestyle Group will be acquired by Wolverine in a deal valued at slightly over $1.2 billion. The group, which in-cludes wholesale and retail operations of the Sperry Top-Sider, Saucony, Stride Rite and Keds brands, posted revenue of more than $1 billion for the fiscal year ended Jan. 31.

Blake W. Krueger, Wolverine’s chairman and chief executive officer, said, “This transformational ac-quisition positions our business for accelerated long-term growth, both do-mestically and internationally, and adds to our strong model for delivering significant shareholder value.”

The four brands acquired from Collective will join Wolverine’s existing portfolio that includes Merrell, Hush Puppies, Wolverine, Sebago and Caterpillar Footwear.

The combined firm under the Wolverine um-brella will create a $2.5 billion global footwear and lifestyle brand powerhouse.

The Payless ShoeSource and Collective Licensing International operations will be acquired by Blum and Golden Gate for slightly less than $800 million. The two private equity firms will each hold a 50 percent stake in the soon-to-be stand-alone entity. The Collective Licensing arm supports com-ponents of the Payless retail business. Payless and Collective Licensing had combined revenues of $2.4 billion for the fiscal year ended Jan. 31.

Collective put itself up for sale during the sum-mer of 2011. It was formed in 2007 when Payless acquired Stride Ride Corp. for $800 million. The combined entity was renamed Collective Brands’ Performance and Lifestyle Group.

According to a financial source, Blum Capital, the second-largest shareholder of Collective as well

as a shareholder since 2007, connected with Golden Gate for the deal and then later brought in Wolverine to form the consortium. The two private equity firms were primarily interested in just the Payless operation.

Golden Gate, in particular, has exper-tise in investments in specialty retail where they can provide op-erational know-how and guidance. Past and current specialty retail holdings in-clude Eddie Bauer,

Express, J. Jill, Pacific Sunwear and Zale Corp. The San Francisco-based private equity firm in October closed on $3.5 billion in commitments for its Series 2 round of fund-raising for the Opportunity Fund, a perpetual fund, that was started in 2007.

Josh Olshansky, a managing director at Golden Gate, said, “Payless is exactly the type of company in which we seek to invest — a strong brand with unparalleled global scale at an important inflection point in its evolution.”

WWD WEDNESDAY, MAY 2, 2012

Payless will be acquired by Blum Capital and Golden Gate.

Collective Brands Sold for $2B

Wal-Mart to Pay Back Wages, Damages

TO E-MAIL REPORTERS AND EDITORS AT WWD, THE ADDRESS IS FIRSTNAME_LASTNAME@FAIRCHILDFASHION.COM, USING THE INDIVIDUAL’S NAME. WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2012 FAIRCHILD FASHION MEDIA. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A.VOLUME 203, NO. 91. WEDNESDAY, MAY 2, 2012. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one additional issue in May, June, October and December, and two additional issues in February, March, April, August, September and November) by Fairchild Fashion Media, which is a division of Advance Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Condé Nast: S.I. Newhouse, Jr., Chairman; Charles H. Townsend, Chief Executive Officer; Robert A. Sauerberg Jr., President; John W. Bellando, Chief Operating Officer & Chief Financial Officer; Jill Bright, Chief Administrative Officer. Periodicals postage paid at New York, NY, and at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services Tax Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian addresses to P.O. Box 503, RPO West Beaver Cre, Rich-Hill, ON L4B 4R6. POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615 5008. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or visit www.subnow.com/wd. Please give both new and old addresses as printed on most recent label. Subscribers: If the Post Office alerts us that your magazine is undeliverable, we have no further obligation unless we receive a corrected address within one year. If during your subscription term or up to one year after the magazine becomes undeliverable, you are ever dissatisfied with your subscription, let us know. You will receive a full refund on all unmailed issues. First copy of new subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. For permissions requests, please call 212-630-5656 or fax the request to 212-630-5883. For all request for reprints of articles please contact The YGS Group at condenast@theygsgroup.com, or call 800-501-9571. Visit us online at www.wwd.com. To subscribe to other Fairchild Fashion Media magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our subscriber list available to carefully screened companies that offer products and services that we believe would interest our readers. If you do not want to receive these offers and/or information, please advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273. WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR THE RETURN OR LOSS OF, OR FOR DAMAGE OR ANY OTHER INJURY TO, UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED TO DO SO BY WOMEN’S WEAR DAILY IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE ACCOMPANIED BY A SELF-ADDRESSED STAMPED ENVELOPE.

ON WWD.COM

THE BRIEFING BOXIN TODAY’S WWD

Sheri McCoy has a formidable to-do list as she takes over as the chief executive officer of the beleaguered Avon Products Inc. PAGE 1 Mainbocher and Herbert Levine, two storied yet long-dormant brands, are being shopped to potential investors or partners. PAGE 1 Jeanswear marketers at the WWD Denim Summit in Los Angeles prescribed a series of remedies in response to falling sales and rising prices. PAGES 4 TO 7 Tom Doctoroff’s new book, “What Chinese Want,” promises to lift the lid on the mysteries of the Chinese consumer. PAGE 8 English designer Nicholas Kirkwood on Friday opens his first store in the U.S., in Manhattan. PAGE 8 The Breast Cancer Research Foundation’s annual gala raised a record of nearly $6 million, which would have made founder Evelyn Lauder proud. PAGE 9 The Webby Awards were unveiled Tuesday and, for the second year in a row, vogue.com earned the People’s Voice Award for best fashion Web site. PAGE 9 Macy’s Inc.’s Terry J. Lundgren has remained a no show during the retailer’s legal battle with Martha Stewart Living Omnimedia Inc. PAGE 11 Stefan Larsson, a 15-year veteran of H&M, will become the first global brand president for Old Navy. PAGE 11

In Seoul’s Garosu-gil shopping district.

THEY ARE WEARING: On a recent day in April, key looks in Seoul’s Garosu-gil neighborhood included colorful leggings and maxiskirts, stripes and polka dots and plenty of denim. For more, see WWD.com/eye.

PHOT

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YUN

LEE

CORRECTION

The photo caption that accompanied the Woolmark story on page 2, Tuesday, was incorrect. It should have stated that Karl Lagerfeld, left, was the runner-up, and Yves Saint Laurent, center, won the International Woolmark Award in 1954. The photo showed outfits by both designers.PH

OTO

BY K

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By KRISTI ELLIS

WASHINGTON — The U.S. Department of Labor said Tuesday that Wal-Mart Stores Inc. has agreed to pay $4.8 million in back wages and damages to more than 4,500 employees nationwide, following an investigation dating back to 2004 that turned up over-time violations under the Fair Labor Standards Act.

Wal-Mart will also pay $463,815 in civil penalties as part of the settlement reached with the DOL.

The settlement comes in the wake of separate al-legations of bribery at Wal-Mart’s subsidiary in Mexico, which has also brought fed-eral scrutiny to the retail giant. Wal-Mart’s stock has already taken a hit because of the bribery allegations, which surfaced in a New York Times exposé over a week ago. Wal-Mart’s stock closed Tuesday at $59.07, up 16 cents, on the New York Stock Exchange, but still below the $62.45 mark it held before the bribery allega-tions hit before 10 days ago.

A DOL spokeswoman said the investigation by the agency’s Wage and Hour Division took place from June 2004 through March 2007. Wal-Mart corrected the classification practices in 2007 and negotiations over the back-pay issues had been ongo-ing, according to the agency.

Labor officials charge that Wal-Mart improperly classi-fied current and former vision

center managers and asset pro-tection coordinators at Wal-Mart Discount Stores, Wal-Mart Supercenters, Neighborhood Markets and Sam’s Club Warehouses as exempt from over-time pay. The agency said the 4,500 employees are nonexempt from the FLSA and are due over-time pay for any hours worked beyond 40 in a week.

The FLSA does provide an exemption from minimum wage and overtime pay requirements for individuals in executive, ad-ministrative, professional and outside sales positions, as well as

certain computer employees, but to qualify for the exemption, em-ployees must meet certain tests regarding job duties and be paid on a salary basis at a minimum of $455 a week. Job titles do not de-termine exempt status.

“Our department has been working with Wal-Mart for a long time to reach this agreement,” said Nancy J. Leppink, deputy administrator of the DOL’s Wage and Hour Division. “Thanks to this resolution, thousands of em-ployees will see money put back into their pockets that should have been there all along. The damages and penalties assessed

in this case should put other employers on notice that they cannot avoid their obligations to their employees by inappropri-ately classifying their workers as exempt.”

Greg Rossiter, director of cor-porate communications at Wal-Mart, said, “When the issues resolved today were initially raised, we took them seriously and fully cooperated with the Department of Labor to make sure they were corrected in 2007. We adjusted our pay practices at that time and determined that back wages should be paid for

the associates involved. We have agreed on a fair settle-ment amount for the associ-ates that trained for the role of asset protection coordina-tor and associates in the role of vision center manager, and we are pleased to have re-solved this matter.”

In addition to the back wages owed to the employees,

Wal-Mart agreed to pay an equal amount in liquidated damages to the employees, as part of the set-tlement. The agency said the civil penalties stem from the “repeat nature of the violations.”

“Misclassification of employ-ees as exempt from FLSA cov-erage is a costly problem with adverse consequences for em-ployees and corporations,” said Secretary of Labor Hilda Solis. “Let this be a signal to other companies that when violations are found, the Labor Department will take appropriate action to ensure that workers receive the wages they have earned.”

$4.8MTHE AMOUNT WAL-MART WILL PAY

IN DOL SETTLEMENT.

WWD.COM3WWD WEDNEsDay, may 2, 2012

Avon Income Tumbles

By Vicki M. Young

ShareS of SearS holdings corp. on Tuesday opened the first trading session in May by spiking up 15.4 percent after the compa-ny provided an optimistic update on its first-quarter outlook, which also rode the tailwind garnered on Monday as the retailer updat-ed its spin-off plans.

Shares closed at $62.05 in over-the-counter trading. Sears said Tuesday it is eyeing a first-quarter profit when the firm re-ports results on May 17.

The retailer projected net income from continuing opera-tions of $155 million, or $1.46 a diluted share, to $195 million, or $1.84. That compares with net losses of $165 million, or $1.53, a year earlier. The results include a gain of about $235 million from the sale of certain stores in the u.S. and canada.

While Sears’ u.S. stores saw a double-digit comparable-store sales rise in apparel and foot-wear, total comps for the quar-ter fell 1 percent, while kmart’s total comps declined 1.6 percent. The retailer also said that the Sears canada operation, which posted waning apparel sales, showed a 6.2 percent comp drop.

Monday’s update on the status of the separation of its Sears hometown and outlet

businesses provided a timeline, with the spin-off expected to be completed in the third quarter of 2012 via a rights offering that is expected to raise $400 million to $500 million in proceeds for Sears holdings to give it addi-tional liquidity. The new com-pany will trade on the nasdaq Stock Market under the ticker symbol ShoS. Sears announced the spin-off plans in february.

Since the rights will be dis-tributed to holders of Sears holdings’ common stock, and entitle holders to purchase shares of common stock of Sears hometown and outlet, Sears chairman edward S. Lampert potentially could acquire ad-ditional shares of the spin-off. The company said Monday that Lampert, chairman of his hedge fund eSL investments, which holds a significant stake in Sears, has said it “intends to exercise its subscription rights in full.”

That intent could have Lampert and eSL holding a big-ger stake in the new company than the 62 percent stake in the original Sears holdings. The soon to be publicly held firm is anticipated to perform better than the core Sears nameplate operation that uses the older big-box format. The newer units utilize a smaller footprint, and some are specialized Sears hardware branded stores.

Sears Anticipates Q1 Profits

previous calls were replaced by the occasional “welcome.”

Mccoy came across as “thoughtful, calm and respect-ful,” said Sanford c. Bernstein & co. analyst ali Dibadj. “She’s thinking about the right stuff.” referring to both Mccoy and ross, he added, “They have no ownership of the past. it was re-freshing to hear that they want-ed to fix things.”

however, Dibadj and several other analysts cautioned it will take time for Mccoy and ross — both newcomers to the direct-sell-ing business — to learn the par-ticularities of the selling channel.

Javier escalante, execu-tive director at consumer edge research, questioned the mer-its of current avon executives mentoring Mccoy and ross, given the pace at which avon’s business is deteriorating. he noted that avon’s current oper-ating margin of 3.8 percent — a 15-year low — has dropped from 9 percent in the fourth quarter and falls well below the 14 per-cent target avon provided as recently as September. avon’s poor performance could encour-age coty inc., which has made its interest in acquiring the di-rect seller very public, to stick around as well. escalante said avon’s first-quarter results give coty better negotiating leverage than it had a month ago.

and larger questions still remain about how avon will fix its business and provide the in-vestment needed to jump-start growth, particularly with low-single-digit operating margins.

“Visibility is still lacking,” said Stifel nicolaus & co. ana-lyst Mark astrachan. “i want to see signs of the company getting better, and with avon’s perfor-

mance in the u.S. and Brazil getting worse, problems still re-main. There’s no magic wand to wave over the problems here.”

in a research note sent Tuesday, astrachan wrote, “The amount of reinvestment in the quarter to drive minimal sales growth is notable and could indi-cate costs required to return the company to long-term growth are more than previously anticipat-ed. Direct selling is a momentum business and volumes and rep-resentatives declined 1 percent year-over-year, and 2 percent year-over-year, respectively.”

During avon’s first quar-ter, net income attributable

to avon for the three months ended March 31 was $26.5 mil-lion, or 6 cents a diluted share, from $143.6 million, or 33 cents a share, in the year-ago quarter.

Total revenue in the quarter declined 2 percent to $2.58 bil-lion, compared to $2.63 billion in the prior-year period. in con-stant dollars, revenue ticked up 1 percent. Total units declined by 1 percent and price-product mix increased 2 percent during the quarter. active representa-tives were down 2 percent.

Shares of avon dropped 8 per-cent to close at $19.87 on Tuesday on the new York Stock exchange.

{Continued from page one}By eVan cLark

J.c. PenneY co. inc.’s lucra-tive send off to former chair-man and chief executive officer Myron e. “Mike” ullman 3rd has institutional Shareholder Services advising that inves-tors say no to the company’s pay practices.

under the Dodd-frank Wall Street reform and consumer Protection act investors will get to weigh in on Penney’s execu-tive compensation with a non-binding vote at its May 18 annual meeting. The vote is commonly referred to as “say-on-pay.”

ullman received total com-pensation of $34.6 million last year as he handed the baton to the current ceo ron Johnson. That pay package included stock awards valued at $11.4 million, a $10.1 million “tran-sition services payment” and $4.8 million for the fair value of outstanding options.

“The large exit package pro-vided to the outgoing ceo ap-pears excessive given that many long-term shareholders have not benefited from their investment in the company,” said iSS, which advisors major investors. “a $100 investment prior to 2007 is worth approximately $58 today, while the former ceo, whose ten-ure coincides with this five-year period, received a large lump-sum cash and equity payment and the vesting of unvested per-formance shares at target.”

iSS also said Johnson’s pay — he received total compensa-tion of $53.3 million last year — was “not ideally aligned” with the company’s peer group. helping to mitigate this was a $50 million investment the ceo made in warrants, which would have a little value if the stock doesn’t perform better.

Penney’s said in a Securities and exchange commission fil-ing Tuesday said the agreement with ullman “enabled an in-

credibly smooth ceo transition. The transition period with Mr. ullman allowed Mr. Johnson to build a new leadership team and develop a vision and strategy within his first 90 days as ceo.”

The retailer also noted that Johnson’s decision to invest $50 million in seven-and-a-half-year warrants underlined his confidence in the company’s long-term potential. Johnson has assembled a team of top retail talent, including Michael francis as president and Michael kramer as chief oper-ating officer, who received long-term equity inducements with six-year vesting schedules.

“The board of directors strongly believes in a pay-for-performance culture at J.c. Penney, and long-term equity awards are a key component of this compensation philosophy,” the retailer said.

Shares of the company slipped 1.1 percent to $35.67 Tuesday.

ISS Advises No Vote on Penney’s Pay

Sheri McCoy

Marchon to Buy Dragon AllianceBy racheL STrugaTz

Marchon eYeWear inc. on Tuesday acquired sports perfor-mance eyewear brand Dragon alliance. The purchase price was not disclosed.

according to claudio gottardi, president and chief executive officer of Marchon international, the company has been looking to expand its presence in the sports perfor-mance category since about 30 percent of all eyewear sold is either a sports driven product or produced by a sports brand.

“The sport business is a very important part of the eyewear industry, and in the last 10 to 15 years [has] proven that the male consumer espe-cially is motivated by authentic sports eyewear and the use of credible authentic brands that have been proven in the field and in difficult conditions,” gottardi said.

Marchon is currently the li-censee of nike’s eyewear, but it’s never owned a sports eye-

wear brand. The acquisition of Dragon alliance means the company can now oversee test-ing, experimenting and work-ing with athletes in the future development of product, some-thing it’s never been able to do with nike.

The 29-year-old Dragon alliance, a former subsidiary of oakley (it was excluded from the purchase when Luxottica acquired parent company oakley in 2007), is a “power-house” on the West coast and in australia, as well as in the surf, snowboard and motocross worlds, gottardi said. however, due to a lack of substantial fi-nancial backing and the orga-nization to develop interna-tional distribution, it has yet to make a strong global push.

gottardi, who said the sports performance brand’s business is in the “few tens of millions of dollars,” projects this number easily climbing into the “triple digits [of] mil-lions of dollars” in the next five years. in the first year alone, he hopes to see double-digit

growth, adding that he would be “surprised if we can’t dou-ble the business” by 2014.

“We strongly believe that through Marchon, who has a network in every major city — we can give them everything they need to develop very rap-idly, from logistics, to support, to marketing to product devel-opment and design,” gottardi said, adding that Will howard, Dragon alliance’s ceo, and a group of managers will still own a minority stake in the company.

in addition to acquiring Dragon alliance, Marchon has in the past 16 months un-veiled licenses with Valentino, ferragamo, nine West, and chloe. gottardi said Marchon’s business increased more than 30 percent in the first four months of 2012 year-on-year — accelerated by the launch of these new collections. he doesn’t expect this rate of growth to continue for the re-mainder of the year however. “[growth] will likely be at a 20 percent rate by the end of the year,” he said.

ShareS of True religion apparel inc. rose nearly 10 percent in after-hours trading Tuesday after the premium denim brand reported better-than-ex-pected sales and profits and initi-ated a quarterly dividend.

Sales in the quarter were paced by 22.6 percent growth in the u.S. direct business, includ-ing a 13.3 percent jump in com-parable sales, a combination of same-store and e-commerce revenues. Sales of nondenim sportswear rose to 33 percent of u.S. direct revenues from 30 per-cent during the first quarter of 2011, according to Lynne koplin, president of the company, with the men’s business performing especially well. Women’s has been more challenging within the company’s wholesale opera-tions, although koplin said, “i think we’ve stabilized it.”

in the three months ended March 31, net income rose 15.9 percent to $10.4 million, or 41 cents a diluted share, from $9 million, or 36 cents, in last year’s

quarter. earnings per share re-sults were expected to be flat.

Sales were up 13.9 percent to $106.8 million, from $93.8 mil-lion a year ago, well above the $102.4 million anticipated, on average, by analysts. The compa-ny’s u.S. direct business grew to $65.5 million, while u.S. whole-sale and international sales were up 2.8 percent and 3.6 per-cent, respectively, to $21.4 mil-lion and $19.1 million. u.S. di-rect accounted for 61.3 percent of sales, up from 56.9 percent. gross margin dropped 30 basis points to 64.5 percent of sales.

The company will pay a quarterly dividend of 20 cents a share on May 29 to share-holders of record May 15. it also has earmarked $30 mil-lion for stock repurchases to be conducted on the open market.

— ARNOLD J. KARR

True Religion Up on Profit Spike

Sales were up at True Religion.

w02a003b.indd 3 5/1/12 8:17 PM05012012201846

4 WWD WEDNESDAY, MAY 2, 2012

WWD DENIM SUMMIT

Managing the Blues

According to Alberto candiani, the fourth generation of a family with an 80-year history of making denim, the gap between sustainability and innovation has finally closed.

Yet for now, he said, the fashion pendulum seems to have swung away from premium denim, the mainstay of tessitura di robecchetto candiani SpA, his family’s fabric mill in italy.

“denim to me is a beautiful fabric. Probably the most democratic fabric on earth,” said candiani, the company’s global manager, with a focus on

product development and fabric engineering. With sustainability still a hot topic, candiani

kicked off his presentation by saying, “in one year, many things have changed and improved. Finally, sustainability is matching innovation.”

He said sustainable product, which used to be considered less attractive and more expensive, now looks just as good or even better than traditionally produced denim. to prove his point, he brought sev-eral samples that were passed around the audience.

the innovations at candiani include a dyeing pro-cess called indigo Juice, laundering processes that utilize lasers and ozone to minimize water waste, recy-cling water to clean the machines, recycled cotton weft yarns that the company introduced in december, which give denim a 35 percent recycled cotton content, and recycled polyester weft used to make stretch denim.

He went on to discuss a company’s moral obliga-tion to “do the right thing” by conserving the envi-ronment and providing better working conditions for cotton farmers.

“because the eU regulations are very strict, ‘Made in italy’ becomes more a certification of ‘made in the right way’ than ‘elegant,’” he said.

but while fabrics are becoming more innova-tive, what of the designs? in candiani’s eyes, things have stagnated.

“today in the denim industry we don’t have a big concept like comfort stretch in the nineties. i don’t see something new in the market, which is why denim has become kind of boring in the last five or six years. it’s the reason we are still making colors and prints.”

He continued, “i believe in the last few years, the premium denim industry has become more conservative, which is why the fast-fashion brands have became stronger. the product looks really good and the price is extremely competitive.”

He recalled that five years ago, designers for these companies would come to him with a pair of premium denim jeans and ask for the same thing. now the tables have turned.

“Sometimes i am selling the same fabric to one of these guys and to a high-end Milanese fashion brand. So everything has changed,” he said. “My girlfriend is mixing H&M and gucci.”

He called for designers to work more closely with denim makers, and is launching a new Web site to provide more insight and transparency to customers.

“they need to tell us where to go as much as we tell them where we think denim is going,” he said. “We are ready for a new challenge but we need to know from the designers what they need; our doors are open to them to develop new things.”

— MARCY MEDINA

Forging A licenSing relation-ship with Macy’s after expanding his American rag cie retail concept gave Mark Werts, the founder and chief ex-ecutive officer of American rag and industrie denim, a fresh idea.

Macy’s carries American rag cie in more than 700 doors and, through negotiating markdowns, switch-outs and other terms of the traditional wholesaler-retailer relationship, Werts finally realized the nature of the business.

“it’s a consignment game,” he told the audience in his keynote address. “Why don’t denim manufacturers do that with specialty stores?”

Werts answered his own question after broaching the topic with robert Haas, levi Strauss & co.’s chairman emeritus and former ceo, at a cocktail party. the result was the opening last october of the first industrie denim store. While the original concept was a store that sold levi’s and the 25 best global brands, the number has now mushroomed to over 80 brands, including double rl, J brand, Prps, nudie, Ag, earnest Sewn, Joe’s Jeans, current/elliott and Paige.

Sensing skepticism about the busi-ness model among attendees, Werts acknowledged that some people in the retail and fashion industry still regard consignment as “the devil.” to prove

them wrong, he said many of his sup-pliers are pleased not only with their sales on consignment but also with the ability to control the way their product is being presented by Werts.

“i see this as an opportunity,” he said. “it’s not new to electronics. it’s not new in Japan. it’s not new in europe. it’s not new all over but it’s new to us.”

twenty-seven years after Werts opened his first American rag store in San Francisco, the first industrie denim locations opened in Scottsdale, Ariz., and San Francisco late last year. A third lease has been signed for dallas and a letter of in-tent written for a spot in new York’s chelsea Market. each outpost is de-signed to highlight architectural sal-vaging and recycling, as well as local flavor, Werts said. For instance, the Scottsdale location pays homage to the desert, whereas fixtures from the golden gate bridge are used in the San Francisco store and the dallas shop will have a cowboy motif.

“it’s the age of diversity,” Werts

said. “retail is entertainment. We all want entertainment.”

Werts provided much amuse-ment as he shared with the audi-ence pictures and details of his life. He was born 67 years ago in Hollywood, where he often played on director cecil b. deMille’s lawn, and attended colleges in california, France and Spain before being in-troduced to the denim business as a 26-year-old consultant working for Price Waterhouse and later opening Salty dog, an Amsterdam-based spe-cialty store that grew to 10 units, and maintaining a denim design busi-ness. Among the unusual challenges he faced were heroin addicts who’d steal his scissors and sewing pat-terns and then sell them back to him.

His creations ranged from patch-work denim, made with raw denim imported from new York at 10 cents a pound, to bell-bottoms. the photo-graphs he shared of patchwork max-iskirts and wide-leg jeans worn with platform shoes wouldn’t be wildly out of place in today’s fashion. Moreover, when he first started selling denim in the early Seventies, 80 percent of his merchandise consisted of nondenim fabrics, including velvet, wide-wale corduroy and prints. “i see a great parallel with what’s going on today, certainly at American rag and industrie denim,” he said.

— KHANH T.L. TRAN

SuStainabLE GOES FaShiOnabLEPuShinG a nEw MOdEL

A roAd-WeArY trade show is com-ing home.

in the 11 years since it started, bread & butter has moved from cologne to berlin to barcelona and back to berlin. but the denim, sportswear and street fashion trade show is moving no more.

bread & butter founder and man-aging director Karl-Heinz Müller said the trade show is committed to berlin and has a contract to stay at the Airport berlin-tempelhof, where it has been housed for six editions so far, for 17 more years. the airport, which Müller called the third-largest building in the world after the great Wall of china and the Pentagon, stretches for 0.8 miles and boasts 7.5 million square feet of exhibiting space for bread & butter. “We feel very good there,” he said.

While the venue isn’t changing, bread & butter is making improve-ments. new areas of the trade show — the accessory-focused treasury and the “dressed up” fashion enclave Urban Superior are among them — will be expanded for the next show, which runs July 4 to 6. For the next market, Müller said the goal is to make “a huge denim statement.”

the tweaks to b&b continue. Müller said he’d like to dedicate 32,000 to 43,000 square feet to “ex-perimental things,” singling out denim designer Scott Morrison of 3×1 as an example, along with fab-ric suppliers to give buyers and the press a glimpse at cutting-edge

brands and the fabrics behind them. “our job at the fair is really to bring people together,” said Müller.

Müller recalled that b&b at-tempted to attract fabric suppliers a few years back, but it didn’t work out that well as they tend to concen-trate on Première Vision in Paris. Undeterred, Müller stated that bring-ing in a handful of key denim fabric suppliers would add an important dimension to bread & butter. rather than focusing on sales, their focus would be “just to be there to show what is possible,” he said.

bread & butter has experienced success at Airport berlin-tempelhof, even as european economies strug-gle. At its last show in January, at-tendance climbed 3.5 percent. bread & butter reported higher visitor to-tals from Asia, germany, eastern europe and russia, although there were slight declines in buyer traffic from the southern european mar-kets of italy, Spain and greece.

About 92,500 tickets were sent to buyers and other industry profes-sionals prior to the event, and more than 600 brands presented their wares at bread & butter. that’s a world away from July 2001, when the first bread & butter show had 50 ex-hibitors and 5,000 visitors.

Müller considers 14 oz., the store he opened in cologne in 1999 and relocated to berlin in 2008 after a five-year hiatus, the parent of bread & butter. in it, he sells a curated selection of denim. Müller is open-

ing a second 14 oz. location, also in berlin, this october, but has no plans to spread beyond the city. “our aim is just to stay really in berlin,” he said.

Müller, whose passion for denim dates back to the days he was a sales representative for levi’s 30 years ago and who dreamt of own-ing a store with the best denim brands long before 14 oz. was a re-ality, recounted the various denim movements throughout the history of jeans, including their American beginnings with levi’s, lee and Wrangler, the rise of italian brands with the likes of diesel and replay, and the contemporary los Angeles-led invasion of premium denim la-bels such as J brand, Seven For All Mankind and current/elliott, and wondered what the future holds for denim. “the next wave is really missing, but i think denim has al-ways [had] waves,” he said.

— RACHEL BROWN

buttErinG thE brEad in bErLin

The jeanswear business was down last year, but it’s not within the makeup of the market or the nature of the product to stay down for long. At the recent WWD Denim Summit in Los Angeles, representatives from all corners of the global denim market provided insights into its current condition and merchandising, marketing and communications ideas to breathe new life into jeans and take the business up a notch in 2012. (Videos of the presentations are available at DenimSummit12.FORA.tv.)

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WWD.COM5WWD WEDNESDAY, MAY 2, 2012

Managing the Blues

UPWArd And inWArd.that’s the future of the chinese

jeans market, according to robin Kosari, co-founder and chief execu-tive officer of golden Win group ltd., a major denim and jeans supplier based in Hong Kong. Higher labor, commod-ity and energy costs have driven pric-es up, forcing golden Win and others who manufacture in china to set their sights on higher-end products, such as premium jeans, as well as the grow-ing desire for better fashion products among chinese consumers.

While 60 percent of the market for jeans produced in china has been through exports and 40 percent for the domestic market, “a reverse of that should happen soon,” Kosari said, as china’s middle class contin-ues to expand and become more in-clined to personal consumption.

in his remarks, Kosari outlined both the inflationary pressures hitting pro-ducers in china and the related devel-opment of a young, fashion-conscious middle class in the country that’s primed to buy more — and higher-end — apparel in the years to come.

inflation has pushed the wages of chinese workers to $500 a month or more in the last two years, while

plants in neighboring countries like india, Vietnam and indonesia are paying less than $200, and those in bangladesh and cambodia are closer to $100. that’s ended china’s run as a low-cost producer of commodity prod-ucts and, in the denim hub of Xintang, cut the number of jeans factories by more than half to less than 2,500. lack of demand and overcapacity soured the environment for many producers, and more stringent environmental standards, both in china and else-where in the world, led them to either trade up, as golden Win did with a $30 million investment in its production, or curtail their output.

“the government says the future of the chinese economy cannot depend too much on exports,” Kosari noted. “We need to boost domestic consumption.”

even with recent signs of a slow-down in purchasing, the chinese are primed for that opportunity as retail sales in the country, about $2.9 tril-lion last year, are expected to grow at a double-digit pace and hit $4.6 tril-lion by 2014 with middle-class fami-lies in urban areas accounting for much of the growth.

Whereas personal consumption accounts for 71 percent of U.S. gdP, 60 percent in europe and 55 percent in Japan, the figure in china is 36

percent. And while north American consumers buy two pairs of jeans a year, while those in Japan and South Korea buy one pair and citizens of the euro zone 0.8, chinese consum-ers buy just 0.3. the chinese spent about $5 billion on jeans last year, which represented between 18 and 20 percent of the world’s jeans units but just 9 to 10 percent when mea-sured by their dollar or yuan value, implying a low price per unit and an indicative of a market with plenty of room to trade up.

Kosari thinks those statistical gaps will close as disposable income be-comes more plentiful and chinese consumers, 85 percent of them aged 35 or younger, indulge their fashion desires. Young chinese, he noted, “like the Western influence and the Western lifestyle.”

there are already signs that chinese jeans production is mov-ing toward more upscale products. between January and August of last year, the value of chinese apparel exports was up 23 percent and price up 43 percent while units dropped 13 percent.

“there’s plenty of room for chinese people to spend to boost do-mestic consumption,” Kosari noted.

— A.J.K.

thE nEw China hand

bArrY MigUel and david lipman required no introductions when they began working together on a plan to create a new breakthrough marketing concept for Seven For All Mankind last year.

Miguel, named president of Seven last year, had used the services of lipman’s new York marketing agen-cy during his tenure at ermenegildo Zegna. lipman, chairman and chief creative officer of the new York-based firm which bears his surname, was familiar not only with Miguel but, having done research for Seven earlier in its existence, with the brand and its california heritage.

the challenge was reintroducing the consumer to the brand. “Seven was one of the original premium denim brands and [co-founder] Peter Koral certainly left us with a rich heritage,” Miguel told audience dur-ing a conversation moderated by WWd news director lisa lockwood. “At the same time, we live in a world of contemporary fashion and being 12 years old within that contempo-rary fashion world, you’re old. there are always going to be new players coming into the space and it’s re-ally about how you stay relevant and compelling to your consumer.”

lipman not only had an idea, but an additional motivation: “i was so tired of looking at another picture of another person posing.”

He thought he had the right per-son to execute his idea, too, in actor and modern-day renaissance man James Franco. the actor’s creative inspiration was a rather wild party he’d attended that stretched from the early evening until 5 in the morning and “from the beverly Hills Hotel to the canyons of Malibu” and that he thought captured “the cre-ative, free spirit of california” in a way that would resonate with con-sumers and change the way they per-ceived Seven.

“i need you to be disruptive,” lipman recalled Miguel telling him, “but i need to make a brand statement. We need the brand to come to life.”

lipman and Franco embarked on a series of shoots designed to pro-duce 10 “episodic films” to run on Seven’s own Youtube channel and also as a series of art-house films

ranging in length from 40 minutes to 3 hours and 45 minutes. Woven into the story line, despite a gener-al lack of dialogue, is the matter of who bears responsibility for the 1981 death of natalie Wood.

lipman, who was inspired as a young man by the brooke Shields ads for calvin Klein Jeans, faults the fashion industry with trying to “force” messages on consumers when it turns to social media and said he was intent on “avoiding a monologue” with the audience.

“We try too often to do it that way and we get 40,000 views,” he said. “big deal….We’re approaching 2 mil-lion views [on the Seven channel] at this point….And i guarantee we’ll be at 5 million views when this thing is over for this season.”

He expects 10 million Youtube views or more by the end of the year. the channel currently has more than 1,300 subscribers and is approaching 1.7 million views.

to Miguel, the initiative met his standard for something “game-chang-ing,” bringing to life his new vision for the brand. As to the risk, “as a leader and a brand builder, you need to make the call. Yes, it’s risky.”

but he’s gotten good feedback in the brand’s performance. “We had a great first quarter,” Miguel said, just days before parent VF corp. report-ed that the brand’s first-quarter rev-enues rose 18 percent.

— ARNOLD J. KARR

cUStoMer SerVice is the name of the game in magazines and denim. While People StyleWatch editor Susan Kaufman can remember the landlubber and Fiorucci jeans she owned earlier in her life, she said her target reader was the Millennial, and she came armed with sta-tistics to provide insight into their shop-ping habits.

“i think of what we do as customer ser-vice, because we are essentially a shop-ping magazine,” said Kaufman, who has been editor in chief of the title since it launched in January 2007.

Kaufman said one poll respondent said the magazine helped her have fun while becoming a smarter shopper. “that helped define the brand, because a lot of women are intimidated by shopping, especially when it comes to jeans, because fit is so im-portant,” she said.

out of respect for her readers, Kaufman always considers price points, style and diversity when featuring denim. She used an April trend story covering 44 brands as an example.

“it’s important for brands to think about who your customer is and what kind of quality you are giving them for the money. if you have Web sites and stores, the more information you can give to your customer and the more ways you can tell them how to wear it, the more they are going to buy,” she said.

the magazine’s first denim awards issue in november featured 185 brands, with 700 try-ons. there were 35 winning brands in 25 categories.

next year’s issue will be even more focused on body type and feature more price options, trends and styles. Fifty-five percent of the readers polled read blogs, so reaching out to bloggers is key for brands, but they said they look to fashion magazines more than blogs for validating a trend. they also said, “if an item doesn’t go with at least three things i own, i’m not buying it,” which speaks to the need for versatility.

People StyleWatch’s third-ranking fash-ion story of the year was one that showed the different ways celebrities wear the same jeans. not surprisingly, 94 percent of those polled like celebrity coverage, and 52 percent said celebrities influence their choices, although it wasn’t the level of the celebrity as much as how much they resembled the reader that appeared to be paramount, suggesting that jeans brands need to approach the consumer with more diversity in their messaging.

discounts and limited editions remain powerful ways to drive sales. brands that appear on the magazine’s 20-percent-off page can realize additional retail sales ranging from $200,000 to $1 million follow-ing publication.

Kaufman also advised brands to keep the message clear and simple. “there is so much out there,” she said, “anything that you can do to make it simple and distin-guished will help consumers.”

According to the magazine’s research, 48 percent of Millennial readers polled shop for jeans at least once a month and 76 percent said fit is the most important fac-tor in their purchase decisions and brand name the least important. the Web sites of nordstrom, gap and old navy received the best grades for customer service.

And the top word used to describe how women felt in their jeans was “sexy.”

— M.M.

SuStainabLE GOES FaShiOnabLE

rEjuvEnatinG thE jEan thE rEadEr aS CuStOMEr

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E-TAILER BONOBOS was founded in 2007 as a purveyor of better-fitting pants — and as an alternative to jeans. Yet last November, the company added denim to its growing assortment of offerings, which now includes tai-lored clothing, sport shirts, swimsuits and shorts.

“Five years in, I’m tired of wearing Bonobos pants. I want to wear some jeans,” said Andy Dunn, co-founder and chief ex-ecutive officer of the New York-based company.

Bonobos has focused on offering a pared-down, straightforward five-pock-et denim design in three washes. A key selling point is that the jeans are made from Cone’s White Oak denim and produced in Los Angeles, but in a more affordable $125 to $145 price range than compet-ing domestically manu-factured premium brands. This is possible because of Bonobos’ direct sales model that cuts out the wholesale markup.

“A lot of denim is doing too much talking, with too much back pocket de-tailing,” said Dunn of the clean Bonobos designs. “We built our product around simplicity and the great Bonobos fit.”

As of last month, Bonobos had sold 8,200 pairs of jeans — a drop in the bucket compared to most denim brands, admit-ted Dunn. However, the company is on an

impressive growth track, with Nordstrom taking notice and making a high-profile in-vestment in the company last month.

The Seattle-based department store operator participated in a $16.4 million round of financing in Bonobos along with Accel Partners and Lightspeed Venture

Partners. The deal brings Bonobos into 20 Nordstrom stores and the men’s shop on nordstrom.com this spring. The retail-er is carrying the two best-selling product lines from Bonobos: washed chinos and no-iron cotton trou-sers. Some seasonal pants and shorts will also be of-fered in select Nordstrom stores and online.

“This is our first foray into wholesale. We felt their customer service DNA aligned with ours,” explained Dunn.

Bonobos is opening its first stand-alone store of sorts on Newbury Street in Boston this month, a second-floor space that allows customers to make appointments with

“Bonobos Guides” who provide person-alized shopping services. A similar pro-gram is available at the company’s New York headquarters, where guys can try on Bonobos product and then have purchas-es delivered via the Web site. “Our sales per square foot are half an Apple store — about five times the industry average,” noted Dunn.

— DAVID LIPKE

6 WWD WEDNESDAY, MAY 2, 2012

MAKING ROOM FOR JEANS

WWD DENIM SUMMIT

A DENIM BRAND lacking in heritage can compensate for it with the element of surprise.

“We’re not Levi’s. We don’t have a 150-year heritage,” Shubhankar Ray, global brand director of Dutch denim brand G-Star Raw, said.

Instead, G-Star’s attitude is that “you have to be surprising to get no-ticed.” Ray is responsible for creating new concepts for the denim brand to communicate worldwide and for find-ing ways to be distinctive in a market that’s populated by brands that ar-rived on the scene long before G-Star. In today’s fragmented market, media is no longer “fixed,” and has become multiplatform, with much of the action happening online.

G-Star, which distributes in 70 coun-tries and had retail sales of $2.2 bil-lion last year, gets its inspiration from modernist industrial design rather than fashion. Furniture, such as Le Corbusier chairs, architecture and in-dustrial objects, are impor-tant influences. Ray said G-Star likes to combine old products in new ways.

“The more unexpected this combination, the more surprising the result,” he said. During his career, Ray has worked with brands such as Camper, Levi’s, Caterpillar and Sony. Working at Levi’s taught him how to add new elements to vintage products and modernize and reinvent an item that hadn’t changed very much since 1850.

At G-Star, he said, “Raw” has become a key ingredient of the com-pany’s DNA. “Raw means uncut, unprocessed, pure,” he said, adding “original” and “authentic” to the defi-nition.

In developing products, G-Star likes to combine street attitudes with lux-ury. For example, G-Star will fuse things like denim with silk, denim with cashmere and denim with leather. “We’re the mod-ern, metropolitan denim brand,” he said.

A point of differentia-

tion is its 3-D denim design, he said. In 1996, it launched a jean called Elwood, which fused moto-cross trousers with workwear jeans. Those pants evolved into the Arc pant, an architectural cut with a low crotch, straight hip and asymmetric tapered leg, which is its number-one style.

Another important trend is mass custom-ization, “a contradic-tion in terms,” said Ray. “Even the mass market wants special-ized products. They want it designed for him, but only for him.”

G-Star gained vis-ibility by showing up in unconventional places. For example, the company exhib-ited at Tokyo Design Week, a bastion of furniture and house-hold items, where it opened a pop-up gal-lery to display its de-signs and craftsman-ship. It then brought the pop-up gallery to

the Shanghai Expo, where it invited Liv Tyler to meet customers. It also ex-hibited at Bread & Butter in a big way, as well as New York Fashion Week.

G-Star brought in photographer Anton Corbijn to impart what Ray called a “gritty edge” to its celebrity-centered ad campaigns. “The way we work with celebrities is not for the sake of the celebrity but more for global vis-ibility,” said Ray. The company’s models have ranged from Dennis Hopper at age 72 to Magnus Carlsen, who at age 19 was the world’s number-one-ranked chess player. Its spring campaign features Clémence Poésy and Vincent Gallo.

In addition to its wholesale dis-tribution, G-Star has 300 stores, most of which are franchised. Only three units, including one on Rodeo Drive in Beverly Hills and two in its home mar-ket, are directly owned. In February, it opened its largest flagship in the world, a 7,300-square-foot unit in Hong Kong.

— LISA LOCKWOOD

PROJECT THE UNEXPECTED

Shubhankar Ray

Andy DunnVincent Gallo in G-Star’s spring ad campaign.

DENIMSUMMIT12.FORA.TV

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STYLIST + DESIGNER

Emily Current

G-STAR RAW

Shubhankar

Ray

STYLIST + DESIGNER

Meritt Ellio

tt

BONOBOS

Andy Dunn

WWD.COM7WWD WEDNESDAY, MAY 2, 2012

Emily CurrEnt and meritt Elliott style a stable of starlets — including Emma roberts, mandy moore and Sophia Bush — and have lent their names to the trendsetting Current/Elliott denim brand owned by Serge Azria. the duo was instrumental in bringing the “boyfriend” fit to recent prominence and have racked up more than a decade’s worth of experience working in the fishbowl of Hollywood style, while also working on editorial and advertising shoots.

Every brand has a set of fil-ters through which consumers see them — and which should shape all aspects of a brand’s strategies and initiatives, em-phasized the duo in a conversa-tion with WWD men’s fashion editor Alex Badia.

“What are the three words that speak for the brand? Whether it’s casual, American cool or sophisticated lady chic, everything from a brand’s font, tags, a hand on a fabric to a color needs to go through those brand filters,” said Current. thus, while J Brand has become closely identified with the dark, skinny leggings look, a brand like Double rl is associated with a different look and prob-ably shouldn’t seek to tap into that particular trend.

“not everyone should do ev-erything,” asserted Elliott. “But if there’s a trend that you want to participate in, put it through your own filter. So pink plaid

through a casual American heri-tage filter will look very different from a chic city-lady filter. Each brand should look different.”

With clean, bright colors and patterns currently popular in denim, it’s inevitable for more vintage looks to make a come-back. “As a stylist, i’m just crav-ing a good rip-and-repair and a good beat-up black jean right now,” said Elliott. “there is so much innovation in fabric and wash that feels so authentic.”

in today’s world of fame-obsessed magazines, blogs and burgeoning social media sites, working with celebrities is a vital component of brand-build-ing — but it comes with plenty of pitfalls. “When a celebrity wears a certain pair of jeans to the dog park with their kid, that is a powerful thing. no amount of advertising can pay for that. it’s very organic and can be an incredible vehicle to promote a brand,” said Elliott.

However, it’s important that celebrities be put through the same set of filters as all the other aspects of a brand. “Stylists can be the gatekeep-ers to much of that process. it’s important that it’s the right jean in the right size for the right girl at the right time for that jean,” explained Current.

in this era of personal style, which has been magnified by the looking glass of social media that allows everyone to broad-cast their fashion choices to the

world — which may or may not be paying any attention — vari-ety is the order of the day. “no silhouette is a flash in the pan,” said Elliott. Both stylists agreed, for example, that both the baggy boyfriend style and the skinny

legging look are here to stay.“Skinny jeans will live as

long as boots are around. Print and pattern and color look better on a skinny jean,” said Current. the boyfriend fit, meanwhile, is very democratic

and goes well with other styles of shoes and tops.

“As the market swings one way, the tastemakers will want what’s not available,” pointed out Current.

— D.L.

SHoPPing CAn be intimidating. me-Ality is out to make it less so.

For customers overwhelmed by the deluge of brands and those brands’ siz-ing variations, tanya Shaw, president and chief executive officer of me-Ality by unique Solutions, said me-Ality’s size-matching capabilities can help take the mystery out of finding clothes that fit right. “if the customer goes into the fit-ting room and every single item they try on fits them, there is a much greater like-lihood not only to upsell that consumer, but also to be able to have her want to purchase more,” she said.

me-Ality has placed size-matching stations in the common areas of 50 u.S. malls and is on track to have 300 inside malls by the end of the year. Customers enter the stations fully clothed and a wand rotates around them for 20 sec-onds to capture 200,000 data points from their bodies. Afterward, they receive a me-Ality identification number and a cu-rated shopping guide of recommended items that fit them from different brands and retailers. the service is free to cus-tomers, but retailers and brands pay per recommendation. However, Shaw

stressed, “unless it truly fits them, it won’t show up on the shopping guide.”

the implications of the service for retail sales are widespread. Shaw said 40 to 60 percent of customers who go online or into a store to shop for items from their shopping guides purchase something off the guides, and 60 per-cent of those using me-Ality have tried or bought an item from a brand they weren’t aware of or didn’t know would fit them. “they are also being more confi-dent with shopping online because they know that when they order that size, it is going to fit them properly,” said Shaw, who continued, “We are guiding them to better-fitting apparel, and this is really about knowing that customer better than she even knows [herself.]”

When it comes to knowing the cus-tomer, Shaw underscored that utilizing the data me-Ality can provide is critical. From the information collected, which covers users’ size, gender, ethnicity and purchases, among other elements, re-tailers and brands learn how their sizing competes in the marketplace, she ex-plained. they can get a feel for customer preferences as well. “Everyone knows that we ordered too much of a certain size, but what people don’t know is what could have sold had it been on the shelf,” said Shaw. “Companies that start to take advantage of this information are going to be the companies that really succeed in the next period of time.”

the ultimate goal is for retailers to effectively and efficiently meet custom-ers’ demands. to do that, mass custom-ization will be taken to “a whole new level,” according to Shaw. in the future, she said, customers would be able to point their mobile device at a piece of clothing to determine if it fits them and if it complements their wardrobes. She also mentioned an evolution of dynamic couponing, in which customers are told about sales based on their locations, that incorporates fit data. “it is not just that there is something in that store that is on sale, it is what’s in that store that’s for me, that’s going to suit me,” said Shaw.

— RACHEL BROWN

Viewing the Brand as a Filter

sizing Up the CUstomer

tanya shaw

emily Current and meritt elliott

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WWD.COM8

By CASEY HALL

SHANGHAI — American-born, China-based advertising supre-mo Tom Doctoroff ’s new book, “What Chinese Want,” promises to lift the lid on the mysteries of the Chinese consumer and ex-plain why companies should not assume that development auto-matically equals Westernization.

Sitting down with WWD in his spacious office on the JWT floor of a high-rise in downtown Shanghai, Doctoroff ’s enthusiasm for his subject matter is apparent. Gesticulating while he explains its subject matter, with any paus-es for breath imperceptible to the human ear, Doctoroff has ambitions for his second book that are vast and wide-ranging.

“My goal was to real-ly present, hopefully for the first time, a frame-work of what makes China China,” he said of the book, which hits stores on May 22. “If we understand it, we don’t have anything to fear from it. If we take an ob-jective approach about our worldview and their worldview, there is no reason for conflict.”

At the heart of Doctoroff ’s framework of an all-encompassing Chinese worldview is the belief that an understanding of tradi-tional Chinese philosophy is key to understanding modern China.

“I think if you look at the indigenous strands of Chinese philosophy — legalism, Taoism and Confucianism — they stress

one moral absolute and that is: stability is good and chaos is evil,” he said.

A follow-up to the best-selling “Billions: Selling to the New Chinese Consumer,” Doctoroff uses his second book to refute the pervasive idea that Chinese soci-ety is becoming more “individual-istic” as consumerism takes hold. According to the reality Doctoroff says he has experienced in his 14 years on the ground in China, Chinese society still very much discourages individuals from thinking of themselves as being distinct from their society.

“That [Western] type of indi-vidualism, self-driven individu-alism, as opposed to needing

acknowledgement of society for your status in society, which is ego driven, that does not exist here and that has not devel-oped, I would say, an iota since I’ve been here,” he said.

At the heart of the Chinese worldview mapped out by Doctoroff in “What Chinese Want” is a conflict inherent in Confucian societies. This con-

flict results in Chinese people being torn between regimenta-tion, hierarchy and society on one hand, while simultaneously harboring relentless ambition, which Doctoroff describes as a “dragon in the heart.”

Despite appearances of indi-vidualism, Chinese consumers measure success by the way in which they can master the social hierarchy and climb the ladder of Chinese society, which is even more important to them than their counterparts in the West.

“This is very controversial be-cause many of us in the West want to believe that as countries mod-ernize they become more like us, but they don’t. They become more

modern, more interna-tionalized, but you cannot sweep away thousands of years of relationships between people, society and the cosmos with 10 years of Barbie and Ken Fantasia,” Doctoroff said.

So what does all this mean for international brands hoping to win the hearts and minds (and wallets) of the seemingly bottomless Chinese mar-ket? For luxury brands in particular, Doctoroff believes the key is to un-

derstand how important both ambition and conformation are to Chinese consumers.

“No one in China is going to pay a huge price premium for a Louis Vuitton bag because of its inherent quality. Even though people might appreciate craftsmanship as human beings, people will buy it because of Louis Vuitton’s representation

of status,” Doctoroff said. “This applies to shampoo, cars, even on the mass market, people still have the same need to move forward but do it in a way that doesn’t challenge society.”

Despite the hype surround-ing conspicuous consumption and China’s nouveau riche in re-cent years, Doctoroff maintains that brands need to keep in mind China’s consumer pyramid when developing their market-ing strategies for the country. At the bottom is the mass market, making up the bulk of China’s least internationally inclined consumers, but even toward the pointy end, where discretionary incomes are vast and shoppers are no strangers to international designer labels, there is a mark-edly Chinese mind-set at work.

“The people lower on the con-sumer pyramid just need to an-nounce that they are in the game, so they need the shiny, conspicu-ous, well-known products to do that,” Doctoroff explained. “Once

you get to the leaders higher up on the pyramid, they need to demon-strate a mastery of all of the rules.”

The biggest mistake a brand can make, according to Doctoroff, is to be inflexible with their brand story, trying to make it fit into the China market without considering the particu-lar needs of Chinese consumers.

Doctoroff uses the brand sto-ries of Rolex and Hermès, both of which have a strategy rooted in the idea of connoisseurship, timelessness and heritage, as examples that are appealing to the highest-end Chinese con-sumers. This is not necessarily because of their emphasis on craftsmanship but because the ability to buy into these brand stories demonstrates a consum-er’s success within the Chinese sphere of societal achievement.

Doctoroff believes the key lies in being able to adjust the story in order to appeal to the Chinese market, without aban-doning a brand’s global appeal.

“The luxury sector in many ways is the least flexible in terms of adjusting their brand story, be-cause these brands are also often a religion and they are dominat-ed by creative people in Paris or London with their own view of what the brand is, but they are missing a lot of what fundamen-tally motivates Chinese consum-ers,” Doctoroff said.

“All Chinese people are on the same journey of success, but they are at vastly different points in that journey and that implies different psychological motiva-tors and different financial cir-cumstances, which poses serious marketing challenges for luxury brands,” he added. “This reli-gious belief of what the brand means is important for passion, but it’s not fail-safe.”

WWD wednesday, may 2, 2012

By JESSICA IREDALE

WHEN ENGLISH DESIGNER Nicholas Kirkwood opened his first store last May in London, it was with the plan to expand to New York within a year. “We made it in just under 10 days,” said Kirkwood in a phone interview last week, a few days before he traveled here for the Friday store opening, at 807 Washington Street.

Kirkwood, who launched in 2004 and remains independently owned, said he decided on the Meatpacking District after scouting sites in SoHo, where he couldn’t find a street to suit him, and uptown, where spaces were on the small side. The New York store was implemented on what Kirkwood said was the immedi-ate success of his London boutique. “It really started working and sup-porting itself right from the start, so it sped up the [retail] process.”

The 1,500-square-foot space is similar to the Mount Street boutique in its minimal palette and gallerylike setting, done in shades of white, gray and taupe, so “the shoes can be the color,” said Kirkwood, who is known for his fantastical, ar-chitectural designs. He worked with architect Mehrnoosh Khadivi on the interior, which also features a Corian-framed entrance that leads into the chevron Versailles parquet floor in white con-crete. There are polished Marmorino displays and a large circular skylight that makes use of the natu-ral light from the garden at the rear of the store.

Situated across from the site of the new Whitney Museum of Art, the boutique will house Kirkwood’s complete collection, as well as all collaborations, which have included shoes for Rodarte, Prabal Gurung and the Keith Haring Foundation.

Once New York opens, Kirkwood and his busi-ness partner, Christopher Suarez, plan to look into new markets. “We want to use the store to help our other retailers,” said Kirkwood. “I don’t do a show, so this is a way I can present the col-lection in my environment. It’s definitely a good way to project an image for a shoe brand.”

DECKERS OuTDOOR CORP. racked up a $686 million vic-tory in two lawsuits filed in the Northern District of Illinois against 3,007 China-based coun-terfeit Web sites selling fake ugg Australia products.

In addition to the monetary damages, Judge Ronald Guzman granted ugg parent company Deckers a permanent injunc-tion last month, as well as funds seized from hundreds of fi-nancial accounts linked to the counterfeit Web sites, including funds held by PayPal Inc.

Awarding damages held by third-party sites and payment processors is part of a growing trend, as it is almost impossible for brands to collect from Web operators located overseas. On Monday, Hermès International won a $100 million judgment in a similar case against 34 coun-terfeit Web sites. In that case, Federal District Court Judge Denise Cote in Manhattan ac-knowledged the difficulty in col-lecting from the counterfeiters, and ordered payment processors, social media sites, third-party hosts and search engines such as Google and Yahoo be held ac-countable. This includes no lon-ger providing their services to the infringing parties or eliminating their sites from Web searches.

In the Deckers case, the judge said that, following his verdict, the footwear company may send notices of contempt to the defendants via e-mail should they find additional infringing domain names. Attached to the

order was a list of thousands of fraudulent Web sites, such as “uggs-forsales.com” and “spar-kleuggsboots.com,” along with the defendant’s name and corre-sponding e-mail address.

Prior to the judgment, the court granted a temporary restrain-ing order in each case, granting Deckers control of the Web site’s domain. Each domain was then re-directed to a Web site alerting con-sumers that the domain was previ-ously used for counterfeit sales.

“Web sites selling counterfeit ugg products look very convinc-ing because they use Deckers images and offer products at be-lievable sale prices,” said Leah Evert-Burks, director of brand protection at Deckers.

According to Deckers, the lawsuits are part of an “aggres-sive effort” to combat online counterfeiting, particularly against “rogue Chinese-based Web sites.” Since 2011, Deckers has filed six lawsuits that have resulted in the transfer of more than 6,000 domains and the freez-ing of over $1 million in linked financial accounts. Deckers also sends take-down letters to Web site servers hosting counterfeit sites, removes links to sites from search engines and shuts down payment processing services. In total, Deckers said it has taken action against more than 23,000 sites and has had 19,000 links re-moved from search engines.

Last year alone, more than 834,000 counterfeit ugg prod-ucts were seized worldwide.

� —�ALEXANDRA�STEIGRAD

’’

’’Deckers Wins Counterfeit CasesNicholas Kirkwood Opens First U.S. Store

Doctoroff on the Chinese Consumer

Inside the store on New York’s Washington Street.

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If we take an objective approach about our worldview and their

worldview, there is no reason for conflict.

— Tom DocToroff

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WWDSTYLE

Indelible PinkNEW YORK — Erin Heatherton was just one of many

partygoers who donned an on-message rosy hue — hers by way of Michael Kors — at the annual Breast Cancer

Research Foundation gala, where founder Evelyn Lauder was remembered. For more, see page 10.

MEMO PAD

ON THE WALL: Florence de Dampierre’s new book highlights decorative treatments on walls. PAGE 10

PHOTO BY STEVE EICHNER

ONLINE FAVORITES: The Webby Awards were unveiled Tuesday and, for the second year in a row, vogue.com earned the People’s Voice Award for best fashion Web site. SHOWstudio won the Webby in the same category. The awards are divided into two categories: Webbys are determined by a panel of judges, including Biz Stone and Arianna Huffington, while the People’s Voice Award comes from Internet voters worldwide. The awards ceremony will take place May 21 at Hammerstein Ballroom in Manhattan, so it will be weeks before winners formally accept their awards. Keeping with the tradition of the five-word speech, Vogue editor in chief Anna Wintour said last year, “Sometimes geeks can be chic.”

Yves Saint Laurent won the Webby for best beauty and cosmetics Web site while the People’s Voice prize went to glamour.com’s beauty channel. For best retail Web site, Asos won the Webby and Fab.com took People’s Voice.

Newyorker.com won the Webby for best editorial writing and Wired got the nod for best magazine. The Daily Beast scored a best news Webby and Bloomberg Businessweek won for news on the tablet and all other devices. — AMY WICKS

BETTER NUMBERS: The New York Times reported a substantial increase in circulation thanks to growth from digital subscriptions. For the six-month period ended March 31, total average digital circulation was 807,026 and, for Sunday, it was 737,408, according to Audit Bureau of Circulations. Total average circulation was 1.58 million for weekdays, a 73 percent increase over a year ago, while its average circulation for Sunday, at 2 million, represents a 50 percent rise in circulation. Weekday circulation in print was down 4.5 percent to 779,731.

The Wall Street Journal’s total circulation was flat, at 2.1 million, but it still has the largest circulation of any newspaper in the country for its weekday edition. — A.W.

FROM THE FARM: Amanda Brooks is back to blogging on her site, I Love Your Style. She took a break from the blog, beginning in February 2011, after accepting the fashion director job at Barneys New York but, having given up that gig to move to England, she posted two items this week.

One post is all about encouraging more artists and designers to collaborate with each other. “Maybe that will be the next fashion collaboration trend — designers collaborating with each other. It’s been done before in small ways (see below — I have a printed Alaïa T-shirt made by Comme des Garçons), but I’d like to see it in a bigger way. Come on Rick Owens + Lanvin! Proenza + Junya Watanabe! Christopher Kane + Narciso Rodriguez! Get it on!”

In another post, she referenced the decision to spend a year on the farm in Oxfordshire, England. “I am calling it my ‘creative sabbatical,’” she said, adding she has ambitious writing plans for the next year. Brooks posted a few pictures of her “future dwelling,” promising more news when she arrives, at the end of June. — A.W.

Parisian interior designer Florence de Dampierre is having a banner year. the Johnny appleseed of French chic, who penned the book on the subject, bien sûr, unveiled her licensing partnership with John-richard at north Carolina’s High Point home show in april. as the industry buzzed about the fresh collection of furniture,

accessories and lighting, de Dampierre — who earned millions dealing 18th- and 19th-century painted antiques during her initial new York venture in the mid-eighties — is in the midst of a book tour in addition to her usual lecture circuit at universities and women’s clubs.

“Walls: the Best of Decorative treatments,” her fifth and latest design tome from rizzoli, delves into every aspect of the art, from Pompeian frescoes to rufus Porter’s nature-themed stencils around new england, to Louis XiV’s porcelain pavilion at Versailles that gave birth to the chinoiserie obsession across europe. Many interiors haven’t been previously published, such as the 18th-century frescoes of medallions and griffins in the Ferragamos’ tuscan villa.

“at first the design world mistook me for a bimbo because i was blonde. these books show my intellectual side and passion for research,” she says.

“Walls” holds a bit of added weight, since finishes are one of her signatures, appearing everywhere within her new furniture line, including cabinets hand-painted with garden trellis scenes and glass tops of scratch-resistant chinoiserie. a best-selling bed frame of white wood with a patina that gains character as use mars its carvings.

“it’s a modern interpretation of the gilded mirror on the cover of my book ‘French Chic,’ ” says de Dampierre. “i didn’t want to do chintz, which is yesterday’s news, or traditional antiques, since they’re oversaturated, whether authentic pieces or restoration Hardware reproductions. it had to be an evolution of all that, the new cozy chic.”

she isn’t afraid of color, either, which extends to her dress. at a recent talk to a full house in Palm Beach, Fla., she wore head-to-toe purple down to the Prada sunglasses, nail polish and Hermès bag, apparently the only one ordered in the hue. a purple Ultrasuede dress by Halston inspired her

collection’s sofa of the same material in african violet. she almost always shuns black.

“i don’t even own a pair of black shoes. How boring,” de Dampierre says.

since most people aren’t as fearless, she designed her home collection in a mix-and-match palette with lots of orange, aqua and her preferred purple. though her own Manhattan pied-à-terre is modern and simple (especially compared with her 19th-century home base in Litchfield County, Conn., which was thoroughly mined in “French Chic”), de Dampierre is pleased to see minimalism, or what she dubs “dentist chair decor,” on the wane.

“it’s a pendulum, and people want warmth again, with wallpapers, brass hardware and whimsy,” says the proud owner of a dining table fashioned like a tree trunk.

With the youngest of her three children about to leave home, the soon-to-be empty nester is strategizing her next phase. she’s over the moon about John-richard’s manufacturing scope, and

the launch of its showroom at new York Design Center in september. But what this Dorothy Draper part deux really needs is a hotel commission.

“i’m ready for my Greenbrier moment,” she says.

— Rebecca Kleinman

10 WWD wednesday, may 2, 2012

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“Walls: The Best of Decorative Treatments”

Tickled PinktHe Late evelyn Lauder hoped to eradicate breast cancer when she founded the Breast Cancer research Foundation in 1994. she may not have been at the organization’s annual gala in new York City Monday night, but her husband, Leonard A. Lauder, and a record crowd took one step closer to making that mission a reality.

the 1,250 guests — including Elizabeth Hurley, Michael Kors, Donna Karan, Vera Wang, Tommy Hilfiger, Lizzie Tisch, Police Commissioner Ray Kelly and Rep. Carolyn Maloney — came for dinner in the Waldorf-astoria ballroom, pushing the tables nearly to the back wall and filling both tiers of balconies. the tickets were sold out a month in advance.

“How i wish evelyn were here to see this sold-out room,” said Lauder, the chairman emeritus of the estée Lauder Cos. inc. and senior member of the board, as he began the program. “she would be tickled pink,” he asserted in allusion to the breast cancer crusade dress code. He added that almost $5.3 million had been raised before the event began, nearly 20 percent more than the prior year. a live auction later pushed the total closer to $6 million, beating 2004’s record of $5.5 million with 1,100 guests in attendance. the hot auction items that drew bids of $50,000 and $60,000 were four-day stays in Lauder’s vacation homes in Palm Beach, Fla., and aspen, Colo.

asked how he prepared

himself for the emotional drain of the evening, Lauder, who assumed the title of acting chairman of BCrF following his wife’s death in november, replied, “i’ve lived this my whole life with evelyn. this is just the next chapter in my life. But it’s a new chapter: life with evelyn looking over my shoulder but not at my side.” He then paused and added, “she’s at my side, always.”

after a video portrait and a series of speeches, the program hit its high point with a set performed by Sir Elton John. Because he was unable to attend either of Lauder’s memorial services, the singer selected his set list of nine songs — which included “tiny Dancer,” “rocket Man” and “Your song” — with her in mind. He added that he has been involved with the event for 12 years “and i always will be. i pledge to you Leonard, your dream is my dream. i passionately believe in what evelyn has created. she lives on; she is an inspiration to us all. i will never let you down.” John also gave a shout-out to Dr. Larry Norton, scientific director of the BCrF, who helped Lauder found the organization, calling him “a f---ing amazing man.” John then tore into his performance with vigor and intensity, jumping after most of songs as if he had scored a touchdown.

— Pete boRn and Julie naughton

For more photos, see

WWD.com/eye.

Expanding Interiors

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WWD.COM11WWD wednesday, may 2, 2012

Old Navy Taps Stefan Larsson

Fashion scoops

By DaviD Moin

Stefan LarSSon, a 15-year veteran of H&M, will become the first global brand president for old navy in october.

Parent company Gap inc. has created the new position because it’s orchestrat-ing an international roll out of the $5 bil-lion, 12-year-old old navy chain starting with Japan in July. old navy currently operates in north america only, and is

being led by nancy Green, executive vice president and chief creative officer, and tom Sands, executive vice presi-dent of stores and operations. tom Wyatt served as president until resigning in January to enter the education field.

Larsson was instrumental in H&M’s expansion from about $3 billion to $17 billion and from 12 to 44 countries by leading real estate, store design and store construction. Larsson most recent-ly was head of global sales for H&M.

SEEKING TERRY: Macy’s inc.’s three-month old legal battle with Martha Stewart Living omnimedia inc. has produced about 40,000 pages of documents, but so far Terry J. Lundgren, the retailer’s president, chairman and chief executive officer, has been a no show. in a letter to the new York state judge hearing the case, lawyers for Martha Stewart said Macy’s has refused to make Lundgren available even though Martha Stewart herself and Lisa Gersh, the company’s president and chief operating officer, have been deposed. the letter said Lundgren “is likely to have unique, relevant knowledge about several of the matters” in the case.

Macy’s sued Martha Stewart in January, claiming breach of contract in the wake of Martha Stewart’s deal to set up shops-in-shop with J.C. Penney Co. inc. a Macy’s spokesman declined to comment. — EVAN CLARK

BALMAIN GETS SOCIAL: Balmain is taking to facebook and twitter, launching accounts on each digital platform today at facebook.com/BalmainParis and twitter.com/Balmain. a first for the storied french fashion house, chief executive officer Emmanuel Diemoz told WWD that there’s been huge demand for information surrounding the brand — and, until now, it’s been “very closed to the consumer. ” now, fans can visit the brand’s facebook page to view content such as runway shots, editorials, ad campaigns and backstage photos and head to twitter to obtain more newsy bits, and even read tweets from the company’s 25-year-old creative director, Olivier Rousteing.

asked why it’s taken so long for the brand to get involved in the digital sphere, Diemoz explained that since the brand relaunched its ready-to-wear business six years ago, the company sought to invest in the physical distribution of its product and, in the process, was very selective in its communication with consumers. “We have product and pictures and creations to show, and we’re ready to communicate with the followers,” he said. “now we have all the key items to be able to do it properly and in the best way.”

the brand launched e-commerce in mid-2010 and Diemoz projects that by the end of the year, sales on the brand’s digital flagship will double from 2011.

rousteing said he looks forward to obtaining real-time feedback. “it’s an experience. i will reply, and be the first to check it and see if there are a lot of ‘likes,’” he said. — RACHEL STRUGATZ

IDEAL LOCATION: Having outgrown its SoHo offices in new York, the five-year-old ideeli will relocate to two Midtown locations this fall. the flash-sale site has secured 23,500 square feet — the entire third floor — at 1385 Broadway, a 23-story Cushman & Wakefield building. that location will be used for a photo studio and creative space for about 50 staffers. ideeli is said to be nearing a deal at another address not far from

times Square for a sleek home office for its other 200-plus employees. By moving day, ideeli expects to have a head count of as much as 300. the Midtown base camp will be the fourth move for ideeli’s chief executive officer Paul Hurley, who started the company in his apartment. When the company first settled into its current offices at 148 Lafayette Street in 2009, there were 40 staffers. — ROSEMARY FEITELBERG

HAVE A HEART: the national Marfan foundation got a big boost from new York City Mayor Michael Bloomberg on thursday at its annual Heartworks gala, when his Bloomberg Philanthropies pledged a $5 million, multiyear grant to the organization. the mayor insisted the announcement be made after his departure from the benefit at Cipriani 42nd Street, cochaired by choreographer Ann Reinking.

“We were all in tears,” said Karen Murray, president of vf Corp.’s sportswear coalition and a board member of the foundation. Murray’s own son, Michael, was diagnosed with Marfan syndrome, which can lead to fatal aortic ruptures, and she spearheaded the start of the fund-raiser 14 years ago. “We used to hold it in the Liz Claiborne showroom and we charged $20 a ticket,” she remembered, noting that this year’s gala raised close to $1 million, not including the Bloomberg funds.

on hand to support the cause was a team from Macy’s, including Terry J. Lundgren, Jeff Gennette and Peter Sachse, as well as tables bought by the Levy Group, Smart apparel, randa accessories, Li & fung, vf Corp. and GQ, among others. — DAVID LIPKE

ALL ABLOOM: Lancôme asked 20 top photographers to look through rose-tinted glasses, and the result — a striking series of floral images — is now on display at Galleria Carla Sozzani, inside fashion hub 10 Corso Como. the traveling “rôses by…” exhibit will be in Milan until May 1 before moving on to Berlin, Madrid, tokyo, Dubai and tel aviv.

at a celebratory cocktail gathering april 26, photographer Tom Munro said he decided to pursue a french surrealist vibe for the project. “i started taking pictures of roses as still life images,” he said. “then i started sandwiching them

with a picture i took many years ago, before solarizing à la Man ray.”

other participating photographers included Patrick Demarchelier, Brigitte Lacombe, Sølve Sundsbø and Koichiro Doi.

— CYNTHIA MARTENS

DUBAI’S FAKE PRIMARK: it seems that no fashion brand is too mass-market to warrant counterfeiting. reports have emerged of a fake version of the fast-fashion store Primark store located in Dubai, on Bank Street in the country’s Bur Dubai district. a spokeswoman for ireland-based Primark, which is known for its ultralow-priced fashion offer, said: “We are aware that there is a store in Dubai that purports to be part of our group. Primark does not operate any stores there and this is therefore not a legitimate Primark store,” she said. “the company is considering its legal options.” Primark currently operates 236 stores in ireland, the U.K., Spain, the netherlands, Belgium, Germany and Portugal. the brand is part of the associated British foods group, which is owned by the Weston family, which also controls Selfridges, Holt renfrew and Brown thomas. — NINA JONES

SHOE IN: Hermès will open a pop-up store dedicated to footwear, a stone’s throw from its flagship on the Left Bank in Paris. the store will open from May 14 to July 19 at 8 rue de Sèvres, and will feature spring-summer shoes alongside a preview of the autumn-winter collection designed by Pierre Hardy, in a setting designed by Stéphane Parmentier. — JOELLE DIDERICH

BROOKLYN-BOUND: Brooklyn industries cofounder Lexy Funk, Cnn’s Soledad O’Brien and author Bruce Feiler will be among the honorees at the Brooklyn Children’s Museum annual gala on May 8. the 113-year-old institution will also honor

Leslie Koch, president of the trust for Governors island, and Marco P. Caffuzzi, partner at Skadden, arps, Slate, Meagher & flom LLP at the 7 World trade Center gathering. — R.F.

PROMISES, PROMISES: the fifth annual “Beautiful Promise” cocktail party and shopping event, cohosted by honorary chairwomen Dana Buchman and Cindy Weber Cleary, inStyle fashion director, will take place May 8 from 6:30 to 8:30 p.m. at Studio 450 in new York. in addition to a silent auction that includes accessories from Chanel, Coach and Calvin Klein, a live auction will highlight exclusive items such as an 18-karat gold lockets designed by Monica Rich Kosann for Promise Project. the event will benefit the Promise Project at Columbia University, a program within the division of Child and adolescent Psychiatry at Columbia University Medical Center, which aims to help impoverished children with learning disabilities get the support they need to learn. — LISA LOCKWOOD

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He declined to identify the other brands in his stable but hinted they include a French fashion house, a French trunk-maker and an English leather goods brand. De Lummen has grouped his cache of historic gems under Luvanis SA, a com-pany registered in Luxembourg.

A slight, soft-spoken man with a thick crop of raven black hair, de Lummen has keen in-stincts for dormant brands, de-scribing a “love at first sight” sensation — or what the French call a “coup de foudre” — when he happens upon a sleeping beauty like Mainbocher, the house founded by Chicago-born editor-turned-designer Main Rousseau Bocher.

“You start with roots and a history,” he explained. “When you relaunch, you already have a story to tell.…After a few years, people completely forget that the brand was dormant. People think it’s always been there.

“It’s reassuring to consumers that you’re not a newcomer.”

To wit: de Lummen surmised that Groupe Arnault introduced Moynat in whisper-quiet fash-ion — with no big launch party or p.r. push for its boutique that opened last December on the Rue Saint-Honoré — to reinforce

an impression that the brand has long been implanted on the thor-oughfare, once home to scores of specialists in travel goods.

“Vionnet — I’m sure people think it’s been here since 1912,” he added.

A lawyer by training, de Lummen said that many compa-nies and individuals buy rights to brands in various countries with-out doing anything with them.

Luvanis acquired the U.S. trademarks for Mainbocher in 2009 from the retailer Stein Mart Inc., which had certain rights for a label famously worn by the Duchess of Windsor. (It is current-ly, along with Charles Frederick Worth, the subject of an on-line exhibition mounted by the Museum of the City of New York.)

But de Lummen waited to traverse the global financial crisis, and fortify his properties with additional assets, before taking his brands to the market.

In the case of Moynat, for example, it is understood de Lummen hunted down and ac-quired more than 20 important antique trunks that were sold along with the trademarks, old advertising and other docu-mentation. Many of the trunks are currently on display at the Moynat boutique.

De Lummen said he plans to circulate the Mainbocher memo-randum “in the coming weeks,” whereas proposals for the Levine project are already in the hands of potential partners or buyers. He declined to name them.

In both cases, he’s convinced “there’s a creative element suffi-ciently strong in the DNA which can translate well today.”

Founded in 1948, the husband-and-wife footwear company Herbert Levine turned out influ-ential designs by Beth Levine, who is credited with such innova-tions as clear plastic heels, stretch boots and stay-on mules. The cou-ple closed up shop in 1975.

De Lummen related that as-sembling the Levine proposal was a breeze, as a book about the founding designer’s legacy came out six months after he acquired the rights. Still, he had to build an archive, and “I am one of the three or four biggest collec-tors of Herbert Levine shoes. We have about 200 pairs.”

The executive also discovered that the Costume Institute at the Metropolitan Museum of Art in New York boasts a cache of shoes by Levine that is outnumbered only by those by Roger Vivier.

“It’s always a good indicator,” he smiled, using the art world as an analogy. “If the painting is everywhere in museums, that’s a good sign.”

Pierre Mallevays, managing partner at London-based Savigny Partners LLP, which is advis-ing Luvanis in its brand-revival model and was involved with both the Vionnet and Moynat deals, said dormant brands could be of interest to multiple players, except private equity.

“Sleeping beauties can be hugely attractive to groups with synergies, particularly on the dis-tribution side. The right brand in their channel or platform can get to scale very fast and very suc-cessfully,” he said. “Brand revival strategies are also very interest-ing for entrepreneurs who want to play the luxury sector, as the initial investment can be rela-tively low and they can then drive growth in a controlled manner.”

The premise is that a brand with history gives more leverage and provides shortcuts in development.

In Mallevays’ estimation, luxury brands put the accent on two main attributes — heritage and creativity — with high prod-uct quality being a given.

“A brand revival strategy brings you half of the equation if you want to play in the luxury sector,” he explained.

De Lummen said his goal is to find the “perfect” investor to relaunch his brands “in the right way,” or form a partnership.

In the Belber deal, for exam-ple, his partner is Fabrice Figaret, son of the French shirt retailer Alain Figaret. Luvanis is taking care of trademarks, archives and artistic direction, while Figaret will handle prototypes, produc-tion and distribution. The new holding company, Belber 1891, is headquartered in Hong Kong.

Figaret, chairman of Fashionista Asia Pacific, told

WWD he hopes to have a com-plete set of prototypes ready next year, and eventually open the first freestanding store in the U.S.

“We are looking to distrib-ute through different channels: multibrand bags and luggage stores, duty free, online sales, department stores with shop-in-shop concepts. The distribution would be quite similar to Coach at an earlier stage,” he said.

Figaret plans to capitalize on Belber’s American roots and po-sition its products “at more ac-cessible prices compared to its European counterparts.”

And beyond price, “Its his-tory should seduce immediately consumers who are looking for brands with a heritage and real legitimacy. There are things which you can’t buy: heritage, history and time,” said Figaret.

De Lummen noted that resus-citating dormant brands is a rel-atively recent concept. When his father, Guy, purchased Vionnet back in the Eighties, it was viewed as an “odd idea,” he re-lated. His father initially devel-oped the brand via licenses for

such categories as fragrance and leather goods, and then the son layered on a fashion line, tap-ping designer Sophia Kokosalaki and forging an exclusive distri-bution agreement with Barneys New York before going on to sell the brand to Marzotto.

He said there remains a lim-ited supply and scope of brands with resurrection potential. For example, he tried the timepiece sector. “It’s almost impossible to find a sleeping beauty in this category,” he said.

Sleeping beauties typically have a rich history and design legacy, along with a glorious business trajectory that was interrupted by the death of the founder, a history-changing event like the Second World War, or because of overly expen-sive production.

“It takes time to nurture a brand. I’m not trad-ing domain names,” he stressed.

Also, not all names can translate for today. For exam-ple, de Lummen de-scribed a 19th-cen-tury trunk-maker that at its peak had stores in London, Paris and New York. Its unfortunate name: Invention. “Impossible to re-

vive,” de Lummen declared.Creatively speaking, dormant

brands also offer a treasure trove of elements with which designers can play. De Lummen called Karl Lagerfeld a pio-neer for taking on Chanel in the Eighties — when the brand was wilting — and transforming it into a global powerhouse.

“For designers, it’s easier to start from something than a blank page,” he said.

On the business side, too, reviving a dormant brand is al-most like a startup and can be less onerous than taking over and revamping a going concern with large management and creative structures, existing supplier relations, and a risk of finding hidden debts and other nasty surprises, he argued.

According to Mallevays, some big luxury brands have become less exclusive because of their sheer size and visibility.

“There is great magic and at-traction to a ‘rediscovered’ gem, which gives a sense of pride and connoisseurship for those who have it,” he said.

WWD.COM12 WWD WEDNESDAY, MAY 2, 2012

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The Rose stiletto from the Luvanis collection and Marilyn Monroe’s red

stiletto shoes by Herbert Levine.

After a few years, people completely forget that the

brand was dormant. People think it’s always been there.

— ARNAUD DE LUMMEN

{Continued from page one}

A Mainbocher corset.

De Lummen’s Revival Model

The original Belber Trunk & Bag Co. building on Arch Street in Philadelphia.

A Belber Club bag prototype.

FOR MORE IMAGES, SEE

WWD.com/fashionsnews.