WWDTUESDAY, JULY 30, 2013 ■ WomEn’S WEAr DAiLY ■ $3.00

photoS by KyLE ERICKSEN

By DAviD moin

richArD BAkEr has finally roped in his prized retail horse — Saks Fifth Avenue.

on monday morning, Baker, the chairman and chief executive officer of the Toronto-based hudson’s Bay co., disclosed a definitive deal for hBc to buy Saks for $2.9 billion, including debt. if the deal goes through, it would create a $7.3 bil-lion north American, coast-to-coast department store operation linking three of the continent’s oldest, most venerable retail nameplates: Saks, Lord & Taylor and hudson’s Bay.

more specifically, the deal would shake up new York’s retail scene by putting two of the city’s biggest flagships just 10 blocks from each other, under a single owner.

Baker’s bid for Saks ends years of specula-tion over a possible takeover of the retailer, but generates its own fair share of questions. it re-mains unclear what will happen in the future to Saks’ management team, led by chairman and

ceo Stephen i. Sadove; what cuts Baker might make to generate synergies and savings, and most importantly, how he can close the productivity gap between Saks and its major competitors — neiman marcus and nordstrom — which has long challenged different store regimes. While Saks under Sadove has improved profitability, it’s still well below the competition, and productivity is more of an issue now since neiman’s owners are eyeing an initial public offering for the Dallas-based retailer and because nordstrom is due to enter hBc’s home turf, canada.

Baker already has a plan, however. once the deal for hudson’s Bay co. to buy Saks is final-ized, the combined team will move fast on “four major opportunities” to elevate Saks, Baker told WWD. “We plan on spending a lot of money reno-vating Saks stores, making the Saks business more luxurious, more exciting, and as compel-ling as we can. You know we have history with Lord & Taylor and hudson’s Bay of doing exactly that,” Baker said. “We will hit the ground run-ning once we close the deal, which will be in three to six months.”

monday’s announcement confirmed exclusive WWD reports that hBc had been the front-run-ner to buy Saks and was closing in on a deal. Saks has over $3 billion in annual revenues, while hBc’s is $4.1 billion.

SEE PAGE 4

hbC’S $2.9b bEt oN SAKS

By MARC KARIMZADEH

NEW YORK — The Calvin Klein Collection show is on the move this September.

After holding runway shows at its 205 West 39th Street head-quarters for five years, Calvin Klein Inc. is staging the spring Collection show at the new, as-yet-unopened Spring Studios in TriBeCa. It will take place in its regular time slot

on Sept. 12 at 2 p.m., although there will only be one show this season.

Calvin Klein will be the first and only fashion house to show at Spring Studios during fashion week. According to CKI, the space’s

modern, minimalist environs, which will open at 50 Varick Street in TriBeCa this fall, lend them-selves nicely to the house’s ethos.

CKI is celebrating several milestones this fashion week. For one, Francisco Costa is marking

his 10-year anniversary as Calvin Klein Collection’s women’s cre-ative director, and there will be an after party at Spring Studios that night to fete the designer’s decade as well as the spring col-lection; the event, which will take place on a different floor from the show, will also celebrate the global launch of Downtown Calvin Klein, the new fragrance featur-ing Rooney Mara in the campaign.

“Sharing our brand’s modern and innovative approach, Spring Studios was a natural choice to hold this special event commem-orating Francisco’s decade as Calvin Klein Collection’s fearless women’s creative director,” said Malcolm Carfrae, CKI’s executive vice president and chief commu-nications officer.

Spring Studios operates a facil-ity in London. When it opens, the New York division will feature a 120,000-square-foot full-service photo studio, event space and cre-ative agency, among other features.

CALVIN KLEIN INC. has signed a licensing agree-ment with G-III Apparel Group Ltd. to produce, distribute and market men’s and women’s swim-wear bearing the Calvin Klein Swimwear label in North America.

Launching for spring 2014, the licensing deal covers the U.S., Canada and Mexico. Distribution will be aimed at select department stores, as well as specialty swimwear, beach and surf shops.

Swimsuits for both men and women will be ren-

dered in signature styles that are sleek, sexy and modern in solid colors and graphic prints. There will also be a versatile assortment of beach cover-ups.

Initial designs of the collection are cur-rently being unveiled to retailers in the market. Wholesale prices have not been finalized.

The Warnaco Group had previously manufac-tured Calvin Klein Swimwear under license before Warnaco was acquired in February by PVH Corp. in a deal valued at $2.9 billion. — KARYN MONGET

2 WWD TUESDAY, JULY 30, 2013

Calvin Klein, G-III Sign Swimwear Deal

Calvin Klein Show Moving to TriBeCa

Bangladesh Talks Begin on Safety Accord

ON WWD.COM

THE BRIEFING BOXIN TODAY’S WWD

Richard Baker, chairman and chief executive officer of Hudson’s Bay Co., disclosed a definitive deal on Monday morning for HBC to buy Saks for $2.9 billion. PAGE 1 The Woolmark prize for the India and Middle East region has been won by Indian designer Rahul Mishra. PAGE 3 Advanstar Global’s MAGIC Market Week has inked a deal to merge its online marketplace at shopthefloor.com with the business-to-business platform from Balluun Inc. PAGE 3 Shareholders of both Hudson’s Bay Co. and Saks Inc. boosted the companies’ stocks on Monday. PAGE 4 Since its inception, Saks Fifth Avenue has undergone many changes in ownership, yet it’s managed to retain an image that is synonymous with both luxury and fashion. PAGE 5 Vendors and factors were upbeat about Hudson Bay’s proposed acquisition of Saks Inc. PAGE 6 The global landscape for textile and apparel manufacturing is being dramatically reshaped by a myriad of issues, including labor and environmental factors. PAGE 7 Todd R. Haskell is leaving The New York Times for Hearst Magazines, the latest departure on the business side of the paper as it continues to struggle with declining print and digital advertising revenue. PAGE 9 The summer party set traversed the HAMPTONS throughout the weekend, covering the circuit from Montauk to Amagansett. PAGE 10 French accessories firm Roger Vivier plans to unveil a retrospective shoe exhibition at the Palais de Tokyo during Paris Fashion Week in October. PAGE 11

A look from Judith & Charles.

MARKETS: The upscale career women’s label Judith & Charles is making its bid to become Canada’s next great import into the global market. For more, see WWD.com.

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 ©2013 FAIRCHILD FASHION MEDIA. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A.VOLUME 206, NO. 20. TUESDAY, JULY 30, 2013. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one additional issue in March, May, June, August, October and December, and two additional issues in February, April, 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. For New York Hand Delivery Service address changes or inquiries, please contact Mitchell’s NY at 1-800-662-2275, option 7. 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.

Francisco Costa marks his 10th year as women’s creative director of Calvin Klein Collection.

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A rendering of the space at Spring Studios.

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By MAYU SAINI

WHILE THE MAIN ITEMS are already agreed upon — with 80 retailers and brands signing onto a fire and building safety accord for the Bangladesh garment in-dustry — discussions about how it will be implemented at ground level begin today when a five-member international delegation arrives in Dhaka.

The group includes Philip Chamberlain of C&A, Aleix Gonzalez of Inditex, Christy Hoffman of UNI Global Union and Jenny Holdcroft and Monika Kemperle of IndustriALL, the union-led group that spearhead-ed the safety accord.

Three members of the delega-tion had some initial meetings on Monday, starting the process of really understanding and ex-changing views that can enable the accord to become a reality.

The accord, which was signed in May, is a binding contract be-tween 80 apparel brands and re-tailers, international and local trade unions and nongovernmen-tal organizations and aims to en-sure sustainable improvements to working conditions in the Bangladesh apparel sector.

“It was a shorter day today,” Hoffman told WWD, “and we will really begin the meetings in ear-nest after the complete delega-tion is here by tomorrow.”

She said that meetings would be held with government of-ficials as well as with officials of the Bangladesh Garment Manufacturers and Exporters Association and the Bangladesh Knitwear Manufacturers and Exporters Association.

“The purpose of the trip is to ex-

plain what the accord means, how it will translate into reality. These are just the first steps,” she said.

Employers and government of-ficials in Dhaka have an agenda they want addressed, especially the fact that they feel Bangladesh does not have enough of a say in the way forward.

“One of the top issues that will be discussed will be the inclu-sion of Bangladeshi representa-tion in the steering committee,” said Atiqul Islam, president of the BGMEA.

Members of the steering committee include Kemperle of IndustriALL and Gonzalez of Inditex, as well as Melanie Steiner of PVH Corp. and Andy York of the N Brown Group. Dan Rees from the International Labour Organization is chairman of the committee.

Employers also told WWD that they would like to ensure better prices without being squeezed by vendors as much as they have been in the past and inspections and checks that do not have different checklists for each company.

“Sometimes it is just something as simple as the height or location of fire safety equipment, which has different stipulations by each retailer, and it makes it really hard for the manufacturer,” said Abaz Ahmed, who has a manufacturing unit for T-shirts in Dhaka.

According to the implementa-tion program determined so far, there will also be an advisory board with broad representation in Bangladesh.

The delegation expects to fol-low up quickly on the plan to establish the foundation that will oversee the accord in the Netherlands with an office in

Dhaka.“We need approvals from the

Bangladesh government, and we’re very hopeful that we can get it done within the next few months,” Hoffman observed. “We’re hoping that this could be facilitated to open as soon as possible, and that is part of the agenda for our discussions with government officials to help get this done very quickly, hopefully before the end of this year.”

Although employers in Ban-gladesh say they welcome the plan to “move swiftly to reduce severe hazards facing workers in factories” and complete inspec-tions within nine months while undertaking factory renovations and repairs, they also fear the delays in shipments and in carry-ing out their orders that the en-tire process could result in.

The $20 billion Bangladesh garment industry has been fac-ing a series of changes since the eight-story Rana Plaza collapsed in Savar in April, causing more than 1,127 deaths and injuring hundreds.

On Monday, workers protest-ed outside the BGMEA office in Dhaka, claiming that they had been illegally fired from their jobs, demanding compensation and accusing their employers of torture. Such protests have in-creased over the last two months. The Bangladesh parliament this month passed the Bangladesh Labour (Amendment) Bill 2013, which is aimed at protecting work-ers’ rights and ensuring safety.

“Were ready for change and to remove this distrust,” said a gov-ernment official from the labor ministry, who requested anonym-ity. “But we want to be included in the terms.”

WWD.COM3WWD TUESDAY, JULY 30, 2013

By MAYU SAINI

NEW DELHI — The Woolmark prize for the India and Middle East region has been won by Indian designer Rahul Mishra.

The award was made last week at the Leela hotel here. While last year’s award was solely for India, this year The Woolmark Co. expanded the re-gion to include the Middle East. As a result, Mishra beat out de-signers not only from India but also from Pakistan, Lebanon and the United Arab Emirates.

Mishra won for his design in elegant cream with embroidery and hexagons, and, accepting the prize, said, “It’s an amaz-ing feeling. I’ve worked towards this and it’s like a dream. It just came out good.”

Mishra, who was also in the shortlist in last year’s regional selection, is known for his re-search and attention to detail. His winning outfit, for example, was thought through to tell a story of metamorphosis using a Buddhist concept of lotus and hexagons with hand embroidery in merino wool yarn on a me-

rino wool jacket dress. “I went through an extensive process to source the yarn,” he said.

The international jury includ-ed designer Manish Arora; Sunil Sethi, president of the Fashion Design Council of India; Simon Lock, chief executive officer of The Lock Group; Peter Ackroyd, president of the International Wool Textile Organization, and Imran Amed, founder of The Business of Fashion.

“The deliberation was diffi-

cult,” Lock told WWD, “and we were going the whole day before being able to come to a decision.”

Mishra nearly won in the se-lection last year, Lock said, and had come back with an even greater focus this time. “He’s come up with a collection that’s very deserving. He’s used an incredible Indian heritage and technique with intricate hand embroidery and combined it with a modern silhouette,” said Lock.

Arora said the winner and

the finalists were not about a re-gion, but about the end product. “It’s also about a growing fash-ion sense in the entire region,” he said.

Sethi agreed. “It’s also a lot about learning from differ-ent cultures and gives a very healthy sense about the world of fashion,” he said.

But the event was also about those who didn’t win, and yet made it out of more challeng-ing environments to this short-list. Lara Khoury, a young de-signer from Lebanon, said that she wanted to infuse both the Lebanese culture and identity into her collection. “I didn’t win, but at least I got to be in compe-tition with people like me, who are designers, and see that they are struggling too,” she said.

Feeha Jamshed, a designer from Pakistan, observed that the event gave her a sense of the similarity of the design aesthet-ic from across the region. “For the first time I felt alive as a de-signer,” she said.

Over the next six months, Mishra, like the other four de-signers chosen from different parts of the world, will be re-

quired to develop a capsule collection in merino wool, to be showcased in Milan, where the five finalists from across the globe will compete for the final international prize — an addi-tional 100,000 Australian dollars, or $92,000, and the opportunity to be stocked in retailers includ-ing Harvey Nichols, Saks Fifth Avenue, 10 Corso Como, Joyce, David Jones and My Theresa.

The event in New Delhi completed the last leg of the International Woolmark Award selections of the finalists. The other winners from the differ-ent regions are Joseph Altuzarra from the U.S.; Sibling, a collabo-ration between Joe Bates, Sid Bryan and Cozette McCreery from Europe; ffiXXed from Asia, and Christopher Esber from Australia.

By DAVID LIPKE

ADVANSTAR GLOBAL LLC’s MAGIC Market Week has inked a deal to merge its online marketplace at shopthefloor.com with the digital business-to-business software platform from Balluun Inc. The agreement combines MAGIC’s reach among brands and buyers with Balluun’s technolo-gy, which will add new features to the trade show giant’s online commerce platform.

“This partnership combines comple-mentary strengths and focus to benefit the markets and customers we serve,” said Joe Loggia, chief executive officer of Advanstar, whose MAGIC Market Week properties in-clude Project, The Tents at Project, Project Mvmnt, MAGIC Men’s, WWDMAGIC, Pool and FN Platform. “Advanstar has leading brands and hundreds of thousands of cus-tomer relationships across multiple indus-tries, while Balluun brings deep software development skills and the latest technol-ogy for B2B commerce.”

Crucially for Advanstar, Balluun will bring e-commerce functionality to Shop the Floor, which launched in beta mode in February. Prior to the Balluun deal, brands could build profiles and upload

photos and line sheets to their private showrooms on the site. Going forward, brands and buyers will be able to con-duct their entire order placement and order management online.

While the deal will meld the existing Shop the Floor and Balluun platforms, the latter company remains indepen-dent and can market its technology to other trade shows outside the fashion space. “People who used Shop the Floor in February will have a similar look and feel aesthetically as the original but will reap the benefits of the powerful func-tions the Balluun platform provides,” said Peter Koch, ceo and cofounder of Balluun, which is based in Foster City, Calif., and Switzerland. “We anticipate that there will be a migration path for our [own] platform and the look and feel will evolve as the system grows and in-cludes new user features and benefits.”

Since February, more than 400 brands have built online showrooms on Shop the Floor and more than 20,000 buyers have ac-cessed the site, according to Loggia. That is a small percentage of the 10,000 brands that MAGIC Market Week hosts at its spectrum of shows annually, but Loggia expects that number to increase steadily, creating the

largest online B2B fashion marketplace.The new Balluun-powered Shop the

Floor site is now live for brands to build vir-tual showrooms and will go live for retail-ers on Thursday. On that date, Advanstar’s ENK portfolio of shows, acquired last November, will be added to Shop the Floor, including Coterie, ENK Vegas, WSA, Sole Commerce, Accessorie Circuit, Children’s Club and Intermezzo Collections.

Prior to the deal with Advanstar, Balluun had about 700 brands on its plat-form, mostly small labels with limited name recognition. The agreement brings into its digital sphere the constellation of brands in Advanstar’s trade show portfo-lios — although there is no guarantee that those brands will choose to conduct busi-ness on Shop the Floor, versus competing digital platforms.

The agreement between Advanstar and Balluun comes as other trade shows add digital components to their physical show-cases. Both the Liberty and Agenda shows have recently partnered with NuOrder, of-fering vendors a 45-day free trial to that online platform.

“At the end of the day, this is the fu-ture,” said Sam Ben-Avraham, founder of Liberty and an investor in NuOrder.

“I don’t see people in three or four years using paper orders anymore. It’s just a matter of time as more people start using this and getting used to it.”

NuOrder says it has more than 400 brands and 80,000 retailers on its software platform, with a roster of clients such as J Brand, Helmut Lang, Paul Smith, BCBG Max Azria, Ted Baker, True Religion, Hudson, Elizabeth & James and Superdry.

Another key player in the online B2B marketplace is Joor, which last week re-vealed a new $15 million Series B round of funding, with investors including Advance Publications, the parent compa-ny of Condé Nast and Fairchild Fashion Media, parent of WWD. Joor claims a user base of 600 brands — including Rag & Bone, Vince, Haute Hippie and Thakoon — and 40,000 buyers. Other competitors include Pop-Market and Brandboom.

While NuOrder has marketing part-nerships with Liberty and Agenda, its platform is actually trade show agnos-tic, said ceo and cofounder Heath Carr. Companies on NuOrder can input any trade shows they are participating in, so that the appropriate buyers can find them. NuOrder has also created an app, overlaid on its core platform, that allows large retail clients, such as Shopbop, to manage orders for brands that are not on the NuOrder platform.

By RACHEL STRUGATZ

FUNG CAPITAL USA is betting that it is pictures and videos — not text — that will help brands see a return on their social media investments.

“We’ve seen hard numbers,” John Seung, partner at Fung Capital, said of Olapic, a two-year-old technology compa-ny that just secured $5 million in Series A funding led by Fung Capital USA, the private equity arm of the families of Victor and William Fung. Longworth Venture Partners co-led the round, and existing investors Great Oaks and Brad Harrison ventures also took part.

Olapic marries social content with the e-commerce experience. The technology allows a brand to take pictures or videos shared by fans on Instagram, Facebook, Twitter or direct upload, cull those imag-

es and then present them on its Web site with links to e-commerce product pages. This allows brands to almost crowdsource a portion of their marketing efforts.

Olapic clients include Coach, Lancôme, Nasty Gal, Lululemon, New Balance, Steve Madden, BaubleBar, Dannijo and JetBlue. Since May, Olapic has signed Alex and Ani, Bebe, Desigual, Equipment, Vineyard Vines, West Elm and Westward Leaning.

The New York City-based firm’s cofound-ers — Jose de Cabo, Pau Sabria and Luis Sanz — said Olapic is on track to generate at least $45 million in e-commerce revenues for its clients collectively this year. Since December, Olapic’s own revenue has in-creased 600 percent. The partners declined to reveal Olapic’s actual revenues.

De Cabo, Sabria and Sanz said clients that use their software have increased on-line conversion by 7 percent on average once the software is fully integrated, and

some have seen growth in the double digits. New Balance, which has almost 461,000

posts on Instagram with the hashtag #new-balance, said because of Olapic it’s seen a 39 percent bump in conversion surround-ing its Heidi Klum for New Balance ini-tiative, which launched the third week of June on newbalance.com. User-generated images tagged with #HKBG are aggregated on the collection’s landing page.

For skeptics who think brands need to take a step back with their social media spending, Olapic’s statistics suggest fashion companies can see a return on social spend-ing that goes beyond brand awareness.

Seung said Olapic is the first firm that’s really “demonstrated financial benefits” for participating organizations that use social media.

“It’s not just money,” he said. “It goes far beyond financial benefit as well. I look at [brands like] Lululemon. It almost

creates a cultlike following, and Olapic allows other brands to do this. The entire social media space is going [toward] vid-eos and photos, and text is already last century. It’s figuring out how to monetize on image — [whether it’s] Instagram, Pinterest [or] Snapchat. Olapic is right in the middle of that — converting those im-ages and video into true value.”

Woolmark Awards Prize for India, Middle East

Advanstar Partners With Balluun for Online Marketplace

Models wear looks by the finalists.

Rahul Mishra with a model in one of his designs.

Fung Capital Backs Olapic’s Bet on Image-Driven Returns

The Heidi Klum for New Balance landing page, featuring user-generated content.

Baker emphasized the possibility of creating a real estate investment trust to de-leverage HBC from the debt arising from the Saks deal and unlock the value of HBC’s retail real estate across its divisions. “We have all this fantastic real estate that we can put into a REIT structure and create tremendous value for share-holders,” he said.

Key owned properties in the port-folio are the Saks and Lord & Taylor flagships on Fifth Avenue in New York City; the Saks Wilshire Boulevard store in Beverly Hills, and Hudson’s Bay flagships in downtown Toronto, Vancouver and Montreal. Saks also owns its stores in Chevy Chase, Md.,

and Bala Cynwyd, Pa. The combined company will operate 320 stores, including 179 full-line department stores, 72 outlet stores and 69 home units, representing 32 million square feet, including 17 million square feet that is owned or ground leased.

The real estate assets of Hudson’s Bay, Lord & Taylor and Saks would all be part of the REIT, with the retail operating company running L&T, HB and Saks owning most REIT shares and basically paying rent to itself. Baker cited Loblaw Cos. Ltd.’s REIT as the model for HBC. The Canadian Loblaw’s owns 80 percent of its REIT, which distributes back to its operat-ing company.

With the HBC REIT, “The custom-er is not going to see anything differ-ent,” Baker said.

He also stressed that there are no plans to convert any of HBC’s re-tail real estate into condos or hotels. “That’s not the plan,” he said. At one time, Baker was considering downsiz-ing the L&T flagship on Fifth Avenue and building offices or residences atop the store. He plans to re-brand certain Hudson’s Bay stores as Saks, or Saks stores as Lord & Taylor, and may even insert Saks into certain larger Hudson’s Bay boxes to beef up productivity. In Canada, “there might be opportunity to build from ground up a new Saks store,” Baker added.

Canada represents a major growth opportunity for Saks, said Baker, who foresees up to seven full-line Saks stores and 25 Off 5th outlets there,

and furthering Saks’ Internet busi-ness by establishing a Canadian saks.com. Canada is already saks.com’s largest international ship-to market. “We have a fantastic opportunity to grow Saks in Canada with full-line, Off 5th and Internet,” Baker said. “The Internet business will have returns at Hudson’s Bay stores all across the country. In Canada, there is no luxury retailer that has an Internet site.”

Isaac Lagnado, president of Tactical Retail Solutions, had an-other perspective. “I could see two or three major Saks stores in Canada, quarter-million-square-foot stores in Montreal, Toronto and to some degree in Vancouver, and a couple of satellite stores,” Lagnado said. “There is not much demand for luxury in Canada.

4 WWD TUESDAY, JULY 30, 2013

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We will hit the ground running once we close the deal, which will be in three to six months.

— RichaRd BakeR, hudson’s Bay company

Baker’s Play: HBC Makes $2.9 Billion Bid for Saks {Continued from page one}

By EVAN CLARK and VICKI M. YOUNG

SHAREHOLdERS ON both sides of Hudson’s Bay Co.’s proposed buyout of Saks Inc. were happy Monday.

Investors pushed Hudson’s Bay’s stock up 5.8 percent to 17.45 Canadian dollars, or $16.97, on the Toronto Stock Exchange — a big vote of confidence given the risks of integrating another department store business into the company’s portfolio and taking on additional debt. Saks’ stock in-creased 4.2 percent to $15.95. A total of 66.7 million Saks shares traded hands, well above the 2.7 million daily average for the last three months.

Under the terms of the deal, Saks has 40 days to try to find a better offer.

Paul Trussell, an analyst who follows Saks at deutsche Bank, said the purchase price of $16 a share, or $2.9 billion includ-ing debt, was a “fair price” and that inves-tors have been frustrated by Saks’ stock price for years.

“Their valuation was grouped a bit more with the national department store chains — Macy’s, Kohl’s and Penney’s — and [Saks’ shareholders] were probably seeking something closer to a luxury brand multiple, which it was not getting in the marketplace,” Trussell said.

The analyst said Saks, under the Hudson’s Bay umbrella, would be able to more easily expand into Canada, cut back

Hudson’s Bay, Saks Shares Climb on Word of Buyout

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The deal would link three of the oldest, most venerable retail nameplates: Lord & Taylor, Saks and Hudson’s Bay.

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It’s largely a middle kind of customer that’s loyal to Hudson’s Bay. Toronto is a sophisticated city but it’s not Tokyo.”

A fourth opportunity cited by Baker is to save HBC $300 million an-nually three years from now through synergies, which means consolida-tions. IT, logistics, finance and ac-counting are among the areas that could be hit with cuts. Reducing some distribution and office space is also likely. Baker also expects the deal will strengthen vendor partner-ships through the increased buying power. Saks, said Baker, will operate separately under the HBC umbrella, including maintaining its own mer-chandising, marketing and store op-erations teams, and will remain head-quartered in New York City.

Saks Fifth Avenue has long been on Baker’s radar. “It’s been about five years that we figured with Lord & Taylor and Saks we could create a lot of synergies,” he said during an inter-view. Baker is already quite familiar with Saks’ business because he has several former Saks executives work-ing for him. They include HBC’s chief operating officer Don Watros; chief marketing officer Marc Metrick; Chris Sim, planning head; Parker Vaughey, corporate business development, as well as brand consultant Jaqui Lividini, who runs her own firm.

While he has met with Saks’ Sadove on occasion, it’s only recently that HBC was “properly prepared” to make the Saks acquisition by having established its shared services infra-structure in Canada, for operations at both the Hudson’s Bay and Lord & Taylor divisions of HBC, and by large-ly paying off acquisition-related debt by selling the real estate of the former Zellers division in Canada to Target.

For Baker and his team, elevating all three retail nameplates would be a bona fide retail hat trick. Hudson’s Bay appears to currently be the best performer of the trio, and according to Baker, is outperforming its peer group.

On the other hand, Lord & Taylor’s performance has lately been sluggish,

marked by negative comp-store sales. “I am not unhappy with how Lord & Taylor has been performing,” Baker said, adding that the store is perform-ing no worse than its peer group and was impacted by Hurricane Sandy.

Saks has closed about 20 stores in the past decade, will close more and maintains slim profits but has shown profit improvements in the last cou-

ple of years. Its management is highly regarded, though the retailer has been beset by years of changing man-agements and ownerships, and tough competition from Neiman Marcus, Bloomingdale’s, Nordstrom and de-signer specialty stores.

With Saks soon to be sold, ques-tions on the future for Sadove, Saks

SINCE ITS INCEPTION, Saks Fifth Avenue has undergone many changes in ownership, yet it’s managed to retain an image that is synonymous with both luxury and fashion.

Andrew Saks founded the apparel retailer in 1867 and incorporated it as Saks & Co. in 1902, the same year he opened a Saks & Co. store on 34th Street. After he died, Saks merged with Gimbel Brothers Inc. in 1923 and was operat-ed as a subsidiary of Gimbel. Horace Saks and Bernard Gimbel purchased the current flagship location on Fifth Avenue, which was then oc-cupied jointly by the Democratic Club and the Buckingham Hotel, in what was largely a resi-dential district. On Sept. 15, 1924, they opened Saks Fifth Avenue at the site.

The Saks Fifth Avenue flagship at 611 Fifth Ave., which remains owned by Saks, was desig-nated a New York City landmark in 1984.

Bernard’s cousin Adam Gimbel became president of SFA, and it was under his leader-ship that Saks branch stores were opened from coast to coast. The first branch store was opened in 1926 in Palm Beach, Fla., followed by one in Southampton, N.Y., in 1928. Adam was also re-sponsible for creating specialty shops within SFA. Saks opened its first West Coast store in Beverly Hills in 1938.

Gimbel Bros. Inc. was acquired in 1973 by BATUS Inc., a subsidiary of British tobacco com-pany B.A.T. Industries PLC, which in 1990 sold the Saks business to Investcorp SA and a group of international investors.

Philip B. Miller joined Saks in 1990 as vice chairman, and was appointed chairman and chief executive officer of SFA in 1993 and of Saks Holdings Inc. in 1995.

On May 21, 1996, Investcorp took Saks Holdings Inc. public and shares of the company began trading on the New York Stock Exchange. On Sept. 17, 1998, Saks Holdings merged with Proffitt’s Inc., and the merged entity became Saks Inc. R. Brad Martin, the chairman and ceo of Proffitt’s, became chairman and ceo of Saks Inc. Stephen I. Sadove is the current chairman and ceo of Saks Inc.

In 2005, Saks sold off its Northern Department Store Group, largely consisting of Carson Pirie Scott, which was acquired by Proffitt’s in 1998. In 2006, it sold its Southern Department Store Group, consisting of Proffitt’s acquisitions of Parisian’s and McRae’s, to Belk. The sales al-lowed Saks to concentrate on its SFA and Saks Off 5th outlet businesses.

Saks is still in the early stages of its interna-tional expansion, opening its first overseas store under license in Riyadh, Saudi Arabia, in 2001. That license has since expired, and the store has closed. Other stores under license include Dubai and Kazakhstan.

Although synonymous with luxury, the chain through the years has had its fiscal struggles. While under the tenure of SFA chairman and ceo Fred Wilson, Saks in March 2005 revealed an internal investigation involving “improper collections of vendor markdown allowances,” noting that it would repay $21.5 million to ven-dors. Saks also became the subject of separate investigations by the Securities and Exchange Commission and the U.S. Attorney’s Office in Manhattan. The retailer settled with the SEC in 2007, a settlement that did not include any finan-cial penalty, nor was there any admission or de-nial of any SEC charges. — V.M.Y.

5WWD TUESDAY, JULY 30, 2013

9 Billion Bid for Saks

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The History of Saks:A Picture of Luxury

on costs and realize the value of its real estate.

The ultimate selling price of Saks was a subject of much debate in re-cent weeks, with some estimates going as high as $19 a share. The companies noted that the purchase price repre-sented a roughly 30 percent premium over the company’s closing price on May 20, before word began to spread that Saks was looking for a buyer.

“The $16 offer price is at the high end of the $15-to-$16 range that we suspected an acquirer would be will-ing to pay,” said Deborah Weinswig, an analyst at Citi.

Weinswig noted it was unlikely that a higher bid would come in and that Saks was a good strategic fit for Hudson’s Bay.

“You’re going to have a stronger Saks,” she said. While the brand had been looking to shrink its store base, it now appears to be reversing course.

“[Saks] could end up giving Neiman’s a run for their money,” Weinswig said, noting that Hudson’s Lord & Taylor division could also pick up its game and learn something from Saks. “There’s a bigger master plan here, where you could see a big-ger competitive impact than we’re thinking about right now.”

Matthew Boss, an analyst at J.P. Morgan, said the buyout carries an im-

plied multiple of 11.4 times earnings before interest, taxes, depreciation and amortization for the past 12 months.

Boss said that’s better than the av-erage retail multiple for the past 10 years of 9.5 times EBITDA, and added that the premium was “reasonable given substantial underlying real es-tate value…and an underearning fi-nancial model.”

The analyst said the acquisition would increase the Canadian compa-ny’s scale in buying and distribution and improve Hudson’s Bay’s “com-petitive positioning in the midtier and luxury channels.”

The biggest winners in the deal could be Saks’ top shareholders — Mexican billionaire Carlos Slim Helú, who holds 23.1 million shares, and Tod’s chief Diego Della Valle, who owns 22.7 million shares. The takeover values Slim’s stake at $369.6 million and Della Valle’s at $363.2 million.

With the go-shop provision, they have at least a chance at a bigger payday.

Rick Snyder, senior analyst at Maxim Group, said Hudson’s Bay’s bid undervalues Saks and that there was a “reasonable chance” of another bidder emerging.

Snyder said the brand’s position-ing and its omnichannel opportunities should garner $18.50 a share. He noted there are 35 geographic areas within

the U.S. that could support Saks stores and that omnichannel selling “allows Saks to reach the smaller clusters of these customers without the expense of having a store.”

Walter Loeb, retail consultant and former Wall Street analyst, said, “I be-lieve it will be operated as a separate company, as it is not easy to merge it either with Lord & Taylor or The Bay. I also think a Saks boutique can be opened in several of The Bay stores, giv-ing exposure to the Saks nameplate.”

Loeb wasn’t sure if full-fledged Saks stores would work in Canada. “I was a trustee at Hudson’s Bay Co., and the Canadian customer is differ-ent from the American consumer in terms of shopping habits,” he said. “They are more frugal. That’s why Saks boutiques would make more sense, as it could help attract more upscale customers to The Bay.”

Loeb said the Saks name could be exported throughout the world. The retailer already has stores in the Middle East.

As for whether a higher price could be had from others during the 40-day go-shop period, Loeb said, “No, not higher; $16 a share is about as much as I would expect.”

Bank of America Merrill Lynch and RBC Capital Markets ad-vised Hudson’s Bay on the trans-action, while Saks worked with Goldman Sachs, Morgan Stanley and Guggenheim Securities.

Shares Climb on Word of Buyout

Bonnie Brooks

Richard Baker

Stephen I. Sadove

Ron Frasch

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president Ron Frasch and other execu-tives have emerged.

Asked about Sadove’s fate, Baker replied, “We haven’t had those conver-sations yet. It’s too soon for a plan…We have a tremendous amount respect for Steve and Ron.” Baker did say that Saks will continue to have a full set of plan-ners and buyers, and will be managed and run separately.

Sadove was not available for com-ment Monday but issued a statement that read, “We believe this transaction delivers compelling value to our share-holders and that Saks Fifth Avenue is an excellent fit within the HBC orga-nization. We also believe that HBC recognizes the tremendous value of our people, our real estate, and our customer and vendor relationships, and most importantly the power and potential of our iconic brand. The $16 per share price represents an approxi-mate 30 percent premium to the May

20, 2013 closing price, the day before media speculation began. We have made significant progress over the past few years to position Saks for future growth and to evolve into an omni-channel retailer.”

Sources said it’s unlikely that Sadove would report to Baker, after years of only reporting to the Saks board, and that Baker would bring in someone new. One possibility is Brendan Hoffman, currently ceo of The Bon-Ton Stores Inc., who previously served as ceo of Lord & Taylor, work-ing for Baker, and earlier ran Neiman Marcus direct. He would be a strong candidate for Saks given his luxury and department store experience.

Speculation has also swirled around Bonnie Brooks, who is shifting from president to vice chairman of HBC, and would be a logical candidate for Saks ceo. That does not appear to be the case now. Asked about Brooks’ role at HBC, Baker replied, “Nothing has changed. She’ll be vice chairman at the end of the year, involved in all the things we discussed. She will be helping me with strategy, creating excitement and in-volved in all of our different business-es. Bonnie is not going anywhere.”

Before significant changes occur at Saks, it must go through a 40-day “go shop” period, allowing Saks to solicit alternative proposals. Saks said it does not anticipate any developments from the “go shop.” Baker described the go shop as “relatively customary” for a pub-lic company, insisted upon by the seller. He declined to explain the sale process that occurred with Saks, but he did say, “We have a perpetual right” to match an 11th-hour offer, and that HBC has a considerable breakup fee if its offer is supplanted by another. “Someone would have to do a lot of work and spend a lot of money,” to beat his offer.

The deal creates $3.2 billion in total debt outstanding. HBC will finance the transaction and refinance some of its debt with about $1 billion of new equi-ty, $1.9 billion of senior secured loans, $400 million of senior unsecured notes and cash on hand. An entity affiliated with Ontario Teachers’ Pension Plan and funds advised by West Face Capital

Inc. have committed to provide HBC with $500 million and $250 million of equity funding, respectively, to support the transaction.

Bank of America Merrill Lynch and Royal Bank of Canada have provided HBC with credit facilities.

The company has received condi-tional approval from the Toronto Stock Exchange for the common shares to be issued to Teachers’ and West Face. Teachers’ and West Face will be issued purchase share warrants. The subscrip-tion price of the common shares and the exercise price of the warrants will be 17 Canadian dollars per share.

NRdC Equity Partners — Robert Baker and his son Richard, Bill Mack and Lee Neibart — bought Hudson’s Bay Co. in 2008 following their acqui-sition of Lord & Taylor in 2006, and later changed the corporate name to Hudson’s Bay Co. Hudson’s Bay is Canada’s largest department store with 90 locations. It also operates Home Outfitters, Canada’s largest home spe-cialty store with 69 locations. In the U.S. HBC operates the 48-unit Lord & Taylor. HBC employs in the U.S. and Canada a total of 29,000 workers and trades on the Toronto Stock Exchange.

{Continued from page 5}

By LISA LOCKWOOd and VICKI M. YOUNG

VENdORS ANd FACTORS were up-beat about Hudson’s Bay Co.’s pro-posed acquisition of Saks Inc.

Jeff Rudes, founder and chief execu-tive officer of J Brand, thinks the deal will be good for his business. “It can only help — being that our business with Saks as well as with The Bay is ex-cellent. What Bonnie Brooks brought to The Bay is brilliant, and it will be a great collaboration for Saks.”

Allen Schwartz, designer of ABS by Allen Schwartz, which sells both Lord & Taylor and Saks Fifth Avenue, sees ad-vantages for vendors. “There are great advantages for anyone who’s a good company. They’ll open 25 new Saks Off 5th outlets in Montreal. That customer loves value up there,” said Schwartz. “Lord & Taylor is a very well-run busi-ness. I do a tremendous amount with them, and I do a lot of business with Saks. If some of the Saks stores became Lord & Taylor stores, it would make sense, depending on the area,” he said.

“Will they consolidate forces? That’s the big question. Will they use one buyer for both? In any company, where these things happen, especially with two top retailers, there’s always the merger mentality. The first thing peo-ple think about is expenses, and how do we get a great result.

“The real designer game has fil-tered down to contemporary. If they can cross-pollinate the cultures there, they may have a tremendous success,” said Schwartz.

Bud Konheim, ceo of Nicole Miller, said, “It’s really an exciting deal.” He said his business at Lord & Taylor and Saks has been great. “Liz Rodbell [of Lord & Taylor] is doing an incred-ible job.” He said Saks, too, has been changing a lot. “They’re doing good stuff and closing stores, which is good.” He said in an effort to make Saks even more modern, this gives them a shot of energy.

“The big story today is ‘young.’ The revolution is the Internet, but one of the key words is ‘young.’ Saks is in the process of doing it, and so is Lord & Taylor. Liz Rodbell is further along in that. To me, when you look at the big picture, what does it mean to the cus-tomer? The customer wants new and young. Will they be able to produce that? I think they will,” said Konheim.

Factors also applauded the deal.While a handful of really good retail

operators, such as Hudson’s Bay, do not have to worry about surcharges, Saks has had to pay factors a 1.5 percent charge on vendor financing over the years due to credit risk.

Gary Wassner, co-ceo of factoring firm Hilldun Corp., said, “A lot of people are excited about the combination. The management at Hudson’s Bay is very good, and they are cooperative with the credit community. There’s no worry about credit lines. There is a question down the road over risk and what the balance sheet of the combined entity will look like given the amount of debt Hudson’s will undertake to do the deal.”

The factor said Lord & Taylor has had to deal with a surcharge from time to time, depending on the factor and client account.

Wassner said Hudson’s may “have to worry about a surcharge down the road. Right now, nobody’s nervous or concerned.”

As for the customer base, the fac-tor said Lord & Taylor and Saks cater to different consumer bases, and there could be improvements for both opera-tions as they work off the economies of scale in other back-office functions. He doesn’t foresee any issues with ven-

dors, since “they plan to keep the buy-ing teams at each operation separate from the other.”

Bob Carbonell, executive vice presi-dent and chief credit officer for credit checking firm Bernard Sands, said, “This is a good deal, and between The Bay and Saks, it gives Hudson’s a high-end pres-ence in both the U.S. and Canada.”

Carbonell, who isn’t so sure that Saks Inc. chairman and ceo Stephen Sadove will stay on because HBC’s Richard Baker “will want to be ceo of everything,” said it could be too soon to predict about surcharges down the road. “The factors will want to see the first set of consolidated numbers before deciding on the surcharges. When you consider that factors oper-ate on such a small margin, a 1 percent surcharge is now the norm except for a handful of really strong accounts,” Carbonell said.

Sands’ chief credit officer also noted that the determining factor also could depend on the risk for each factoring firm. That’s because The Bay and Saks do share some of the same vendors. “That means that for some factors, their exposure could double, depend-ing on who is their client and how much they are willing to approve for each account,” Carbonell said.

He explained that a factor that had been comfortable with two separate credit risk profiles due to different retail accounts might now choose to limit that risk once both retailers are owned by the same parent. They do that either by lowering the amount they are willing to approve or they tack on a surcharge to ac-count for the higher degree of credit risk.

As for plans to possibly convert some Saks branch stores to Lord & Taylor sites, Andrew Graiser, copresident at A&G Realty Partners, said, “Saks has some very good real estate in great malls from a location standpoint. A lot of those malls are A malls, with a few B+ type malls. For those kinds of centers, there’s a demand to be in those malls as anchor tenants. Certainly the landlords would like to control that space, but it may not be so easy to replace a great tenant. While some sites can be redeveloped, the bigger issue concerns co-tenancy provisions in the leases.”

Graiser explained that many land-lords lease space to certain tenants because they want to be in a particular part of the mall since Saks is there. “Co-tenancy requirements can create some restrictions on the ability to change the name of the retail anchor. depending on the landlord, and even the clout that Saks might have had at the time it en-tered into their leases, there are some locations where a landlord might not be able to grant permission to change the nameplate over,” Graiser said.

Still, Graiser thinks the deal is a great one for both sides, particularly from the standpoint of the real estate holdings of the combined entity.

“Hudson’s, with the flagship on Fifth for Saks and the one Lord & Taylor occu-pies, will have two prime locations that are as good as one can get. The value of the Saks flagship alone is stratospheric, about $1 billion would be a good pos-sibility. As for the Lord & Taylor stores that are in operation, [I recall that] the values of many of those leases at the time they were signed were very cheap. Even the locations for the Saks [branch] store sites are in demand.

“Maybe Hudson’s can’t immediately make a change, there’s still the op-portunity for redevelopment of some sites down the road, such as smaller retail square footage, but increasing the amount of office space at the lo-cation. The real estate opportunities are just tremendous. And real estate is not going to get cheaper over time,” Graiser said.

Vendors, Factors Applaud Deal

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We believe this transaction delivers compelling value to our shareholders

and that Saks Fifth Avenue is an excellent fit within the HBC organization.

— stephen i. sadove, saks inc.

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By ARTHUR FRIEDMAN

NEW YORK — The global land-scape for textile and apparel manufacturing is being dramati-cally reshaped by a myriad of issues, from labor and environ-mental factors to fiber innova-tions and shifting trade winds.

Sustainability and corporate social responsibility are the new must-haves, with virtually every exhibitor and executive taking part in the latest round of fabric and sourcing trade shows here this month stressing the im-portance of proper compliance and adherence to production standards.

The Made in America move-ment that’s been brewing for a couple of years has fermented into a tasty niche of better-priced merchandise, notably yarns and knits for U.S. makers and for a growing export market focused on the Western Hemisphere. But in a surprising develop-ment, demand has emerged from Chinese apparel manufacturers seeking to upgrade their assort-ments by using high-quality U.S. yarns, according to executives from American spinners at the Texworld USA and Apparel Sourcing shows at the Jacob K. Javits Convention Center and SpinExpo at the Metropolitan Pavilion. Experts and organiz-ers, including at last week’s Première Vision Preview at the Metropolitan Pavilion, said a more global strategy has evolved in manufacturing and marketing amid rising costs and problemat-ic Asian production, and the lin-gering economic woes in Europe.

Philippe Pasquet, chief ex-ecutive officer of Première Vision, said, “It’s very important to spread your business over as many markets as possible, instead of just one market, es-pecially with what’s going on in Europe and the difficult econom-ic situation.” Pasquet said the U.S. economy has shown strong recovery and is the top market for many European fabric hous-es. He said export opportunities also exist in developing mar-kets such as Brazil, Russia and China, where PV has launched trade fairs in recent years.

Karine Van Tassel, founder and organizer of SpinExpo, said, “What happened in Ban-gladesh was an alarm went off that behind all the cheap prod-ucts there was a lot of blood spilled. It would seem that people on the streets are con-cerned about this, and if told they can keep people alive for one more dollar, they say, ‘Yes, I will spend one more dollar.’ But there is a gap between what the consumers on the street are ready to accept and what prices the buyers, pressured by their companies, will accept.”

Van Tassel said she has heard much about Chinese mills wanting to import U.S. and European yarns and fab-rics to make apparel for their domestic market because “the Chinese yarns and fabrics are good quality, but they lack that certain panache and innova-tion that the European and American mills can offer.”

The importance of diver-sity in manufacturing, along with buying patterns that have

brought a deeper need for quick response and better quality, has spurred a revival of U.S.-made textiles and apparel.

“I can’t believe I’m even hav-ing conversations about the re-vival of U.S. manufacturing,” said Jim Andriola, sales man-ager for Texollini, a knitting mill in Long Beach, Calif. “I re-ally never thought it was coming back.” Andriola said Texollini is

“even working with other com-panies and investors on ways to combine resources to increase volume capacity capability.”

Kim-Bang Nguyen, direc-tor of export promotion at the U.S. Department of Commerce’s Office of Textiles and Apparel, said, “I’ve seen the industry change…and I think we’re in a very exciting phase right now of adaptation and growth. We see a lot of changes in the industry for companies wanting to in-novate and improve and from consumers wanting to buy Made in USA products, and from the free-trade agreements we have signed on to. All the indicators are showing a positive trend.”

Nguyen, speaking at a Texworld seminar, said the National Export Initiative launched by President Obama

in 2010 to create jobs by increas-ing exports is well on its way to doubling exports by 2015. She said since the launch, U.S. ap-parel and textile exports have increased by double digits.

Commenting on the impact of labor and safety problems in Asia on U.S. manufacturing, Nguyen said, “In every situation we have to look at the silver lin-ing. With all the issues around

the world, the silver lining is the U.S. textile and apparel indus-try has an opportunity to com-pete and reinvent itself.”

Jeremy Wootten, secre-tary-treasurer of the SEAMS Association, which helps pro-mote economic growth for U.S. sewn products companies, said,

“Our annual networking confer-ence we just had in April was the most well-attended we have had since 1995. It had over 200 factories and supplier represen-tatives that were all U.S.-based, with significant levels of produc-tion. There was a consensus that orders were up and the level of interest is significantly higher.”

Wootten said rising labor and energy costs in Asia have made people look closer at the “full-value equation, not just the FOB [free on board] cost,” including the risks of getting goods shipped on time and fac-tory labor problems, adding to the value of buying domestically. He added that SEAMS has been approached by retailers “looking for help finding the right vendors to balance their production.”

Pat Tabassi, marketing man-ager for Los Angeles-based Design Knit Inc., said at her booth at Texworld, “There is a

definite shift to come back to the U.S. for manufacturing. We sell to a lot of local L.A. brands, but we also service the New York market. The last few months have been particularly good.”

Tabassi said the nature of Design Knit’s business as a knit-to-order mill is well-suited to better brands and stores looking to produce at least part of their merchandise in the U.S., with fast delivery, hands-on quality control, design innovation and relatively low minimums.

Ronald Sheridan, president of STC Textile Inc., who was representing Lugan Fabrics at Texworld, said the Los Angeles maker of knit tops has expanded its private-label business be-cause more retailers want U.S. production and the quick turn and higher quality it brings. Sheridan said, “Companies are realizing that the idea of long lead times from China without the best quality just doesn’t work for them anymore, especially in the better contemporary market. They want a more modern way of manufacturing that’s better, faster and closer to home.”

Executives said the Central America Free Trade Agreement has boosted their business. Buhler Quality Yarns Corp., based in Jefferson, Ga., has seen strong export business from CAFTA, and is now seeing more activity from places such as China.

7WWD TUESDAY, JULY 30, 2013

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TEXTILES

Global Sourcing Evolving

We see a lot of changes in the industry for

companies wanting to innovate and improve.

— KIM-BANG NGUYEN, DEPARTMENT OF COMMERCE

At the Buhler Quality Yarns booth at Texworld, with chief executive officer Marty Moran, seated at far left, and David Sasso, seated at center.

Looks from Liberty Art Fabrics at Première Vision Preview.

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David Sasso, vice president of international sales at Buhler, said, “It’s a year like there’s never been in our history because we’re shipping more yarns to Asia.” Sasso said this is brought on by the Chinese government buying up cotton reserves, which has raised cotton yarn prices, and the desire of knitters there to buy quality yarns such as Supima cotton that is only spun in the U.S. and Peru.

A company combining the Made in America and sustainability movements is Pure American Naturals, a “farm-to-fiber” firm in Millerstown, Pa. Judith M. Shoemaker, a veterinarian and ex-ecutive with the company, explained that PAN is a mohair and wool manufacturer that is a part of an alliance of farmers, spinners, designers and manufacturers dedicated to “delivering quality natural textiles, produced humanely and ecologi-cally, with integrity and traceability throughout the supply chain.”

Glen Cauffman, who owns the farm, said PAN “bridges the gap between farmers and consum-ers.” Cauffman said the reaction at SpinExpo was “excellent,” and that he even had interest from some of the Chinese yarn makers there wanting buy PAN yarn to export to China for knitting.

Designer Laurie Perrone said, “We want to work with companies that have a strong consumer connection, that understand what it means to be a sustainable company and that believe in the Made in America movement.”

Andriola at Texollini said the firm’s “most im-portant brand pillar is responsible environmental stewardship.” He said as a California-based mill, the company is guided by strict environmental laws, so “you can try to fight those provisions or embrace them. Texollini has chosen to embrace them and reduce our environmental footprint.”

He said this includes the types of chemicals and dyes that are used, investing in equipment that reduces energy and water usage, and using “eco-sustainable fibers” such as Lenzing’s Modal and Tencel, and organic cotton and fibers made from re-cycled materials, such as DuPont’s Sorona and Unifi Manufacturing Inc.’s Repreve polyester and nylon.

The Woolmark Co. was focusing on new ways to present wool at SpinExpo. Roy Kettlewell, global innovations manager for Australian Wool Innovation Ltd., which owns Woolmark Co., said through the Wool Lab, the idea is to help design-ers develop new ways to create wool products, present them in a fresh light and attract new cus-tomers. Among the innovations Kettlewell showed were merino wool blended with precious fibers such as cashmere in retro looks such as twills and herringbones, textured tweeds, wool and silk blends for a “more luxurious feel,” and printed styles and fabrics mixed with embroidery and Lurex for a contemporary flair.

PT Jaba Garmindo, an Indonesian sweater manufacturer, collaborated with Japanese ma-chine maker Shima Seiki and Japanese yarn mill Nikko Textile for a special presentation of computerized design and digital printing capa-bilities at SpinExpo. Felice Gunawan Beckman, research and development director for Jaba Garmindo, said, “We do a lot of business with many European and Asian brands, and now we want to introduce ourselves to the U.S. market. We want to provide more design services and help brands be more innovative.”

A first-time exhibitor at PV Preview was Italian maker Alcantara, which was using the venue to kick-start its marketing in the U.S. Alcantara showed a selection of its novelty materials and garments designed by Aquilano.Rimondi. The col-lection includes techniques like electro-welding, pleating, embroidery, laser engraving, digital print-ing, quilting, embossing and resinating used in sec-tors such as fashion and accessories, automotive, interior design and home decor. The firm boasts Carbon Neutral certification from TÜV SÜD.

Sandrine Bernard, executive vice president of Solstiss USA, said, “We have seen more peo-ple and taken orders from buyers from Canada, Brazil, Mexico and the West Coast, so that’s a new trend.” She said U.S. business has been strong, and business from France and Italy is getting better.

Liberty Art Fabrics’ booth was bustling, and Michelle Lora, key account executive, said in-terest was being expressed for Liberty’s printed cottons and silks, as well as new looks in printed nylon and gabardine, and digital prints in fresh-looking florals, geometrics and conversationals.

NEW YORK — Sabine le Chatelier, deputy fash-ion director of Première Vision, presented key fabric themes for fall-winter 2014-15 at Première Vision Preview here last week, including:■ Color and shape mixtures: Blending naturals with synthetics, smooth and textured and matte and shiny materials, double-sided prints, sculp-tural silhouettes in bold patterns, and multicol-or or color-blocked styling in women’s; shadow prints, minimal decoration on trousers and shirts, and wool and cotton mixes in men’s.■ Textures and crafts: Slubbed yarns, jacquards, irregular patterns, uneven dyes, waxed or coated fabrics, tweeds and flannels and mineral materi-als such as copper and bronze yarns and effects.■ Volume matters: Fake furs and mohairs, puffy embroideries, light quilting and foamy knits.■ Easy architecture: Soft broadcloths, mallea-ble felts, light moleskins, dense velvets, refined Neoprenes, stretch woolens and supple fleeces.

■ Casual chic: Touches of color and playful trims in casual looks, washed-out effects and colored patinas.■ Sporty elegance: Light chemical-color active-wear, multicolor outdoor styles, well-being and energizing touches for fitness.

{Continued from page 7}

THE FIBER PRICE SHEETThe last Tuesday of every month, WWD publishes the current, month-ago and year-ago fiber prices.

Prices listed reflect the cost of one pound of fiber or, in the case of crude oil, one barrel.

Price on Price on Price onFIBER 7/29/13 6/24/13 7/30/12

COTTON 80.92 cents 81.04 cents 66 cents

WOOL $4.32 $4.46 $5.06

POLYESTER STAPLE $1.12 $1.12 79 cents

POLYESTER FILAMENT $1.01 $1.01 68 cents

JUNE SYNTHETIC PPI 124.9 124.9 124.7

CRUDE OIL $104.70 $93.65 $90.13

*THE WOOL PRICE IS BASED ON THE AVERAGE PRICE FOR THE WEEK ENDED JULY 26 OF 11 DIFFERENT THICKNESSES OF FIBER, RANGING FROM 18 MICRONS TO 30 MICRONS, ACCORDING TO THE WOOLMARK CO. INFORMATION ON COTTON AND POLYESTER PRICING IS PROVIDED BY THE CONSULTING FIRM DEWITT & CO. THE SYNTHETIC-FIBER PRODUCER INDEX, OR PPI, IS COMPILED BY THE BUREAU OF LABOR STATISTICS AND REFLECTS THE OVERALL CHANGE IN ALL SYNTHETIC-FIBER PRICES. IT IS NOT A PRICE IN DOLLARS BUT A MEASUREMENT OF HOW PRICES HAVE CHANGED SINCE 1982, WHICH HAD A PPI OF 100. OIL PRICES REFLECT LAST WEEK’S CLOSING PRICE ON THE NEW YORK MERCANTILE EXCHANGE OF FUTURE CONTRACTS FOR LIGHT, SWEET CRUDE OIL TO BE DELIVERED NEXT MONTH.

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TIMES CHANGES: Advertising executives at The New York Times had a bittersweet Monday. On the one hand, it was the first day for their new boss, Meredith Kopit Levien, a former Forbes executive who was tapped as the Times’ new ad chief in mid-July. But the rank and file also got confirmation Todd R. Haskell, a Times lifer who was seen as a candidate for Levien’s job, is leaving in September to become a digital bigwig at Hearst Magazines.

Haskell’s departure was just the latest of several recent changes on the Times business side and comes as the paper continues to struggle with declining print and digital advertising revenue, an industry-wide problem, though the paper has reported improvements in circulation. In the first quarter, print and digital revenue declined 13.3 and 4 percent, respectively. Digital revenue totaled $46.5

million. Haskell was preceded out the door by another ad executive, Seth Rogin, who left in June to be the first chief revenue officer of the tech Web site Mashable.

When Mark Thompson became chief executive officer in November, he called for a number of changes as he sought to position the Times to rely less on advertising revenue. In March, he broke up the management structure into three groups focused on digital products, print operations and advertising.

As part of the reorganization, Denise Warren, the chief advertising officer, was assigned to lead the digital group, and two veteran advertising executives, Haskell and Andy Wright, were temporarily handed some of her responsibilities. Thompson and publisher Arthur Sulzberger Jr. said at the time they would look for internal and external candidates to permanently succeed Warren, though two Times sources said Haskell was lobbying for the position.

Haskell, 44, started his career at the Times as an intern in 1989 and joined the

paper’s business team in 2004, eventually put in charge of overseeing ad sales for the Times’ Web site and T: The New York Times Style Magazine. Last year, when he was promoted to group vice president, advertising, the Times described him in a statement as a “critical piece” of its advertising brain trust.

While Warren and former advertising senior vice president Alexis Buryk were responsible for relations with the top blue-chip luxury advertisers, Haskell “made sure the trains ran on time,” a source said.

When former T magazine editor Sally Singer faced a revolt from advertisers unhappy with the new direction of the magazine, Haskell was one of several internal detractors, alongside the more influential team of Warren and Buryk. Once Singer was out, it was Haskell’s job, with his deputy, advertising director for international fashion Scott Kunz, to woo back some of the luxury brands that stopped advertising during that period.

As recently as last week, Haskell was

out promoting T, telling Media Industry Newsletter the fall fashion issue, with 151 pages, is the magazine’s largest since 2008 thanks to fashion and beauty advertisers.

“A couple of those brands were not in T for a while and now they’re back,” Haskell told WWD.

Despite Haskell’s experience, on July 15, Thompson appointed an outsider, Levien, Forbes’ former chief revenue officer, to the top advertising job, citing her track record of innovation in “print, digital and live events.”

Haskell wouldn’t say when conversations with Michael Clinton, president, marketing and publishing director of Hearst Magazines, began, only that they had been ongoing for a while. He attributed his departure to the scope of his new title at Hearst, senior vice president and chief revenue officer of Hearst Magazines Digital Media, which oversees the Web sites of the publisher’s magazines, as well as some digital-only sites, like realbeauty.com.

MEMO PAD

WWDSTYLEModelCountry

PHOTO BY STEVE EICHNER

WATER MILL, N.Y. — Lindsey Wixson reveled in the pastoral scene on her way into the Watermill Center’s otherwise avant-garde summer benefit. For more on a busy weekend in the Hamptons, see page 10.

{Continued on page 11}

FOR THE LOVE OF FASHION:

Callula Lillibelle’s Melanie Fraser Hart hosted a

runway show in China at the July 12 Lan Kwai Fong

Chengdu Summer Love event. PAGE 11

“I FEEL LIKE we’re in Woodstock,” Andrew Lauren joked, surveying the crowd gathered on the back lawn of The Crow’s Nest in Montauk, N.Y. on Friday night at the start of a particularly packed weekend for the Hamptons social set. Clusters of moviegoers were flopped down on tufted quilts, woolly blankets and floor pillows splayed across the hotel’s grassy yard while others cozied up in wooden lawn chairs. The chic set had gathered for a screening of “The Spectacular Now,” which Lauren produced; the event was hosted by the Cinema Society, The Hollywood Reporter and Samsung.

A gaggle of notables — including Lauren Bush Lauren, Melissa George, Shoshanna Gruss, Lisa Perry and Olivia Chantecaille — turned up to the of-the-moment locale, enjoying a rustic beach soiree before nestling into their viewing spots. Partiers descended a sodded hill to the hotel’s back, waterfront quarters. Shailene Woodley, the movie’s leading lady, quite smartly jettisoned her heels before hoofing it down.

•••

On Saturday, the 16th annual daylong designer tag sale known as Super Saturday was held at Nova’s Ark Project in Water Mill, N.Y. The bargain-hunting skirmish was in full swing underneath the three towering white tents set up with shoppers clumping up around the rows of designer stalls. The Kelly Ripa, Donna Karan and InStyle magazine cohosted event, designed by Mark Addison and sponsored by QVC, drew do-gooders Kelly Rutherford, Ali Wentworth, Nicky and Kathy Hilton, and Edie Falco.

Karan had in tow her expanding brood of grandchildren, whom she obliged with a trip down the Super Slide, a hot pink undulating hill planted between a Ferris wheel and an arcade hub (there were plenty of kiddie activities — a bubble machine, a face-painting station, etc. — to ensure a safe berth from the bargain-hunting bedlam).

“There was nothing fun about that,” Karan said of her ride. “My grandkids were going down like it was nothing. I was screaming, scared to death. But at least I got Cool Grandma points.”

Karan also scored points with the Ovarian Cancer Research Fund, which raised $3.5 million through the event.

•••

It was a calm, cool and clear evening in Amagansett, N.Y., on Saturday for the annual Baby Buggy Summer Dinner at Jerry and Jessica Seinfeld’s estate, and Cameron Diaz really wanted to take a “prom photo.”

“Come on, David. Prom photo!” Diaz cajoled, pulling Rag & Bone’s David Neville behind her in profile against a floral wall and into a pose familiar to teenagers nationwide.

“California is just…uck,” Diaz groaned, “It is a desert, after all…it’s a desert. The East Coast is where it’s at.”

Neville’s wife, Gucci Westman, briefly feigned horror at her husband’s efforts at mugging for the cameras before greeting the freshly arrived Kelly Ripa and Mark Consuelos. Ripa, in a green Stella McCartney jumpsuit, was less subtle in taking in the view.

“Pretty girl,” Ripa cooed at Diaz, “I want to be in a photo with the pretty girl.”

The pair posed. “This is my first time Baby

Buggying,” Diaz shared brightly. The charity was founded by

Jessica Seinfeld in 2001 and provides new and gently used clothing, gear and services to families in need.

“Well, we have about a million kids between us,” Marcus Wainwright said of himself and Neville, whose company was cohosting the evening’s affair. “Jessica approached us about working together, and it just…made sense.”

As for her cohosts, Seinfeld was effusive.

“[Wainwright and Neville are] just the coolest guys,” she said. “You just root for them. I love the company…and Jerry loves it. His favorite pair of trousers is Rag & Bone. The fourth-happiest day of his life, after the birth of our three children — I stand by this — is the day that I gave him this blue pair of Rag & Bone trousers. He hasn’t been the same since. He’s Jerry 2.0! All because of this great pair of trousers.”

•••

At the Watermill Center’s 20th annual summer benefit on Saturday, guests included Winona Ryder, Hugh Jackman, Cindy Sherman, Lindsey Wixson, Rick Owens, Hannah Bronfman and Lisa Perry.

Around 7:30 p.m., a cacophony of audible gasps and camera shutters caused virtually all guests to ignore the various performance art pieces on display and swing around toward the moving cyclone of paps taking shape in the courtyard. Lady Gaga had arrived, squired by the performance

art diva Marina Abramovíc. An iPhone-readied rabble soon insulated the megastar. Bodyguards swatted away gawking onlookers

while Gaga — a willowy apparition with

bleached brows, a jet black choppy

do and hardly any makeup — said hello to

Robert Wilson. “She looks like

she’s channeling Marina,” Misha Nonoo observed of Gaga’s sartorial look: a vampy black gown; a veritable palimpsest of leather, sheer netting and fleshy exposures, and a delicate hoop embellishing her septum. “I quite like it.”

The trio toured the grounds. Gaga clutched

onto the artist’s arm as a wood-chipped path was making the star’s heels a bit wobbly (they looked

no less than seven inches high). They approached the first exhibition, “Funérailles de Miel” by Lisa Lozano, of a naked woman submerged in a coffin-size vat of honey. Gaga scooped a spoonful out and ate it. “Mmmm,” she purred, basking in the unfurling shock of the surrounding crowd.

As the trio took in the performance pieces throughout the back woods of the sprawling property, the courtyard teemed with rumors of a possible dinnertime performance that, alas, never came through. Gaga did make her presence known at dinner in other ways. She dropped $80,000 on two pieces from the Simon de Pury-presided auction: $20,000 on a Dieter Meier giclée print and $60,000 on a wall installation by Abramovíc, new bestie status seemingly secured.

— TAYLOR HARRIS AND ALESSANDRA CODINHA

10 WWD TUESDAY, JULY 30, 2013

Party Monsterseye

FOR MORE PHOTOS, SEE

WWD.com/eye.

Lady Gaga and Marina Abramovíc

David Neville and Cameron Diaz

Gabby Karan de Felice and Donna Karan with Sebastian and Stefania de Felice.

Shailene Woodley

Edie Falco

Kathy and Nicky Hilton

Jessica and Jerry Seinfeld with Kelly Ripa

in Stella McCartney.

Winona Ryder

Rick Owens and Michèle Lamy

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WWD.COM

FEET FIRST: Fashion’s ongoing shoe fetish will reach a new zenith during Paris Fashion Week in October. That’s when French accessories firm Roger Vivier plans to unveil a retrospective exhibition at the Palais de Tokyo, a complex dedicated to modern and contemporary art. Titled “Virgule, etc…” after the French designer’s comma-shaped heel, the showcase is to run from Oct. 2 to Nov. 18.

Olivier Saillard, director of the Musée Galliera, which is reopening in late September with an Azzedine Alaïa retrospective, moonlighted as curator on the Vivier project,with scenography by Jean-Julien Simonot. About 140 models are to go on display, many of them on loan from the Musée de la Chaussures in Romans, France, and other institutions, including Toronto’s Bata Shoe Museum and the Metropolitan Museum of Art in New York City.

The exhibition is to recount the colorful history of the founder, who died in 1998, and its revival since 2000, when Diego Della Valle, chairman and chief executive officer of Tod’s SpA, purchased the rights to use the late designer’s name and in 2002 tapped Bruno Frisoni to be its new creative director.

The brand lore includes Vivier’s invention of the stiletto heel for Dior in 1955 and the buckle pump made famous by Catherine Deneuve in Luis Buñuel’s 1967 movie “Belle de Jour.” The Paris-based designer shod such high-profile types as Josephine Baker and the Duchess of Windsor. — MILES SOCHA

VINTAGE MODERN: Watchmaker Benrus has two new projects up its sleeve. The American brand founded in 1921 is relaunching its watch line and introducing a bag collection for fall, under the new direction of Stephen Schachtel,

who was appointed vice president of bags and accessories at M.Z. Berger & Co., which owns the brand. “We felt [Benrus] needed a

strong team who valued its history but could have a vision for the future,” said Marci Gordon, MZB & Co.’s chief merchandising and marketing officer. All items from the fall collections will bear a “U.S. Military” moniker to recall Benrus’ heritage as a key supplier to the armed forces — the brand’s Sky Chief model was the official watch for American pilots, worn by aviation personnel throughout World War II and the Korean and Vietnam wars. The

watches, which range in price between $75 and $225, and bag styles, which range from $30 to $60, will launch for fall at specialty retailers like Tilly’s, Zumiez and Newbury Comics. — KRISTI GARCED

MELANIE HART’S CHINA: Callula Lillibelle’s Melanie Fraser Hart touched down in China earlier this month to host a fashion show for 2,000 at the July 12 Lan Kwai Fong Chengdu Summer Love event. In addition to the fashion

show, the government-sponsored gathering featured DJs, singers, dancers and an assortment of activities to try to rev up interest in the area, which has seen a decline in apparel manufacturing. Hart’s designs included Fifties-inspired swimwear, Fifties-inspired cocktail dresses and other new styles. Chengdu is the

capital of Sichuan Province and is known as the “gateway to the west” of China.

Hart said she refined the collection to better suit the body frames of potential Chinese customers, and she drew from some of her more conservative styles. The designer, who is also ceo, said that American-made Callula Lillibelle is sold through Saks Fifth Avenue and Net-a-porter, as well as its own site. Although she is proud of the fact that all of her manufacturing

is done in the U.S., Hart said that setup would have to be reconsidered if she received an order for more than 5,000 units of one dress.

During her stay, she spoke with students and shoppers. “They wanted to know what they should wear and what they should be looking at, so I turned

it to them and said, ‘What makes you feel good? What makes you happy?’ which is what I think everyone should do.”

This month’s invitation stemmed partially from her well-received participation in last year’s Chengdu Fashion Week when she and Maggie Norris were the only two American designers included. Hart will return to Chengdu Fashion Week for this year’s installment next month. She is also developing a collection that will carry the Melanie label and will be sold in China. — ROSEMARY FEITELBERG

REVOLUTIONARY ROAD: Hiroshi Sugimoto is traveling across France with his “Revolution” series.

From Oct. 15 to 25, jeweler Boucheron will exhibit the Japanese artist’s large-format black-and-white photographs at its flagship store on Place Vendôme in Paris, in tandem with its new Hôtel de la Lumière fine jewelry collection.

The “Revolution” prints are currently on show in the southern city of Arles as part of the annual Les Rencontres d’Arles photo festival.

Boucheron is also supporting Sugimoto’s production of “The Love Suicides at Sonezaki,” a traditional bunraku, or Japanese puppet theater, play at the Théâtre de la Ville from Oct. 10 to 19.

Sugimoto will be the subject of a separate exhibition, “Accelerated Buddha,” at the Fondation Pierre Bergé - Yves Saint Laurent from Oct. 10, 2013, to Jan. 26, 2014. — Joelle Diderich

11WWD TUESDAY, JULY 30, 2013

2.5x7 (right)

Fashion scoops

For more scoops, see

WWD.com

Callula Lillibelle’s Melanie Fraser Hart on

the runway in China.

“Everybody is always looking for the next opportunity for personal growth, to build something that’s going to leave a legacy. I spent nine years in my most recent tour of duty at the Times, and I’m proud of the work I did,” he said. “When [Clinton] started to talk to me, I just thought it was a cool opportunity. It’s got nothing to do in any negative way with the Times.”

Asked if he’d be likely to bring over some of his deputies from the Times, Haskell said he was satisfied with the team at Hearst and that it was too early to talk future hires. A spokeswoman for the Times said Kunz would remain in his role. Several sources at international luxury brands that advertise in the Times said their relationship will be unaffected by Haskell’s departure as Kunz was their day-to-day sales rep.

Haskell will be taking over for Kristine Welker, who on Monday was named the publisher of the as-yet-untitled magazine from Hearst and Dr. Mehmet Oz, the surgeon and television personality.

A Times spokeswoman said it was too early to say how Levien will fill Haskell’s position. “[Haskell] has been a key contributor to the success of the Times over his time here, and while we are delighted for him, we are very sorry to see him go,” the spokeswoman said.

The next few days are expected to be tense at the Times. Second-quarter earnings will be reported Thursday morning, and next week New York magazine will publish a piece by contributor Joe Hagan that is said to paint a damaging portrait of Times management. Last year, Hagan reported a lengthy feature on the circumstances surrounding the dismissal of former ceo Janet Robinson. — ERIK MAzA

ALL IN THE FAMILY: Penélope Cruz will make her directorial debut in London on Wednesday night with a short campaign film that showcases L’Agent, a lingerie

collection she designed with her sister Mónica Cruz for Agent Provocateur. The film, which will be screened at the Soho Hotel, features Cruz’s husband Javier Bardem, a heavily pregnant Monica — in a baby-doll ensemble and heels — and the model Irina Shayk. The short was filmed in the family’s native Madrid, and features a host of L’Agent-clad women, with Shayk as the main attraction. The sisters’ younger brother Eduardo Cruz composed the music, and their mother Encarna Sánchez assisted on the set.

The fall collection will make its worldwide debut on Thursday at outlets including Net-a-porter.com, Bloomingdale’s, Harrods, Harvey Nichols, Printemps, El Corte Inglés and La Rinascente. The collection is aimed at a slightly younger demographic, according to the company, and the average price is 40 pounds, or $61.50 at current exchange, less than half that of Agent Provocateur’s main collection. The brand’s first wholesale collection, L’Agent will have its own Web site, but will not be sold at Agent Provocateur stores. The company has said that within five years, L’Agent should generate 50 percent of revenue, which is currently 40 million pounds, or $61.5 million. Garry Hogarth, ceo of Agent Provocateur, said there are 15 ranges within L’Agent, and while the manufacturing is similar to that of the main line, the techniques are slightly simpler, and not as many fabrics have been used.

Cruz, who gave birth to her second child, a daughter, last week, called the film “very personal and important for me…a very interesting experience. They gave me all the freedom, and I was able to tell the story I wanted to tell. I used women of all shapes and ages, as it was important for me to let women know that this brand is for everyone. I chose Irina, as she is such a vivacious woman, and with all the beautiful women in the campaign, I really needed someone who would keep the audience’s attention.”

Later this week, the film will appear on L’Agent’s Web site, and there is no print campaign planned.

— SAMANTHA CONTI

MeMo pad{Continued from page 9}

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