BALLY SAID IN PLAY/2 BLOOMINGDALE’S NEW BOSTON STYLE/11Women’s Wear Daily • The Retailers’ Daily Newspaper • November 17, 2006 • $2.00

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Three’s CompanyClarins is revamping its color cosmetics

line; Shiseido is updating its six-year-old

treatment line, The Skincare, and Givenchy

is launching a new lipstick, Rouge Interdit.

All three moves are aimed at the same

target: gaining a fatter slice of a lucrative

market. For more, see page 5.

WWDFRIDAYBeauty

See Gap’s, Page 14

Gap Inc. Still Struggling: Slow Turnaround Seen As Net Declines 10.8%By Jeanine Poggi

The comeback at Gap Inc. remains a work in progress.

As the $16 billion retailer reported a 10.8 percent decline in third-quarter earnings Thursday, due in part to sagging sales at Old Navy, chief executive officer Paul Pressler admitted it still will take some time to rebuild foot traffic in the group’s stores.

The company lowered its full-year earnings guidance by 5 to 6 percent, but said on a conference call that it was focused on the turnaround and the retailer’s long-term prospects.

“We’re creating great buzz in

WWD.COM2 WWD, FRIDAY, NOVEMBER 17, 2006

GENERALSagging sales at Old Navy contributed to Gap’s 10.8 percent decline in third-quarter earnings.

The holiday fragrance business is building momentum, thanks to upscale skin care and trendy color cosmetics.

Clarins is retooling its color cosmetics line this spring in an effort to capture a greater share of the lucrative makeup market.

Donald Robertson is expected to be named senior vice president, creative development, for the Estée Lauder brand.

Bloomingdale’s newest location in Chestnut Hill, Mass., has a strong emphasis on designer apparel.

Thakoon is launching an accessories line on his own, starting with an eyewear collection.

Pucci will celebrate its 60th anniversary with a limited-edition collection of four iconic designs from the company’s archives.

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WWDFRIDAYBeauty

● FASHION PARLEY: The eighth annual New York Fashion Conference, titled “Cutting Edge: Fashion and the Avant-Garde,” will take place Nov. 30 through Dec. 3 at Parsons The New School for Design. The conference is organized by Lisa Koenigsberg, president and founder of Initiatives in Art and Culture, and will feature participants such as Isabel and Ruben Toledo, Zac Posen, Koos van den Akker, Holly Brubach, Tim Gunn, David Wolfe and Bert Stern. The con-ference fee is $355, with a special rate of $160 for full-time students. Tickets may be obtained through Initiatives in Art and Culture.

● OUTKAST JERSEYS: Russell Athletics and Outkast’s Big Boi are partnering to create football jerseys for the annual Bayou Classic football game in New Orleans on Nov. 25. Replica jer-seys will sell for around $120 in selected Academy stores in New Orleans and Atlanta and through buyhbcu.com, and a por-tion of the proceeds will be donated to sports teams in those areas’ inner-city schools. Having also given creative input for Outkast’s former clothing line, Big Boi designed the jerseys and wants to do more such projects, likely with Russell.

In Brief

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WOMEN’S WEAR DAILY IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLICATIONS, INC. COPY-RIGHT ©2006 FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A.

VOLUME 192, NO. 105. WWD (ISSN # 0149-5380) is published daily except Saturdays, Sundays and holidays, with one additional issue in January, two additional issues in March, May, June, August, October, November and December, and three additional issues in February, April, and September by Fairchild Publications, Inc., a subsidiary of Advance Publications, Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Advance Magazine Publishers Inc.: S.I. Newhouse Jr., Chairman; Charles H. Townsend, President & C.E.O.; John W. Bellando, Executive Vice President and C.O.O.; Jill Bright, Executive Vice President_Human Resources; John Buese, Executive Vice President_Chief Information Officer; David

Orlin, Senior Vice President_Strategic Sourcing; Robert Bennis, Senior Vice President_Real Estate; Maurie Perl, Senior Vice Presi-dent_Chief Communications Officer. Shared Services provided by Advance Magazine Group: Steven T. Florio, Advance Magazine

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WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR LOSS, DAMAGE, OR ANY OTHER INJURY TO UNSOLICITED MANU-SCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPAR-ENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK,

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“I was inspired by satellites. By lasers. By the moon. I looked into the future. I was never inspired by a woman’s body. My dresses are like sculptures.’’— Pierre Cardin

Quote of the Week

Chung Wins Fashion Fund AwardNEW YORK — Perseverance paid off for Doo-Ri Chung, who received the third annual CFDA/Vogue Fashion Fund award Thursday night.

This year’s runners-up — and they share equal standing — were Rodarte’s Laura and Kate Mulleavy and Thakoon Panichgul for Thakoon (for more on Thakoon, see page 12).

In 2004, Chung made a run at the prize but lost to Proenza Schouler’s Lazaro Hernandez and Jack McCollough. Her apparent disappointment following that “envelope please” moment was captured in Douglas Keeve’s documentary “Seamless.”

As the 2006 winner, Chung pocketed a $200,000 monetary

award to further execute her design plans. The Mulleavys and Panichgul each picked up $50,000. Along with the fi nancial

reward, all three parties will meet regularly with a team of business mentors chosen based on the de-signers’ individual needs for business expertise and resources.

Chung and the run-ners-up topped a field of fi nalists that included Georgina Chapman and Keren Craig for Marchesa; Phillip Lim for 3.1 Phillip Lim; Jeffrey Costello and

Robert Tagliapietra for Costello Tagliapietra; Milla Jovovich and Carmen Hawk for Jovovich-Hawk; David Neville and Marcus Wainwright for Rag & Bone;

Justin Giunta for Subversive Jewelry, and accessories design-er Devi Kroell. More than 120 design businesses requested ap-plications this year. Of the 88 that were submitted, half advanced to the second stage before the se-lection committee whittled down the contestants to 10.

This year’s winners were se-lected by a nine-person committee that included Vogue editor in chief Anna Wintour, CFDA executive di-rector Steven Kolb and Barneys New York vice president and fash-ion director Julie Gilhart.

This is shaping up to be a memorable year for Chung, who took home the Swarovski Perry Ellis award for emerging wom-en’s wear designer at the CFDA awards in the spring.

— Rosemary Feitelberg

Investment Gains Boost Sears’ NetBy Vicki M. Young

Sears Holdings Corp. on Thursday posted third-quarter earnings that fell below Wall

Street’s consensus estimates, reporting an earn-ings gain mostly from investments as sales de-clined at its U.S. nameplates.

Net income for the quarter ended Oct. 28 more than tripled to $196 million, or $1.27 a diluted share, from $58 million, or 35 cents, in the same year-ago period. Revenues fell 2.1 percent to $11.94 billion from $12.2 billion, which included a 1.5 per-cent decline in merchandise sales and services to $11.91 billion from $12.1 billion. Same-store sales decreased 3 percent at domestic stores, which op-erate under the Sears and Kmart nameplates.

“After cutting expenses and promotions at Kmart for some time, we believe further improve-ment will increasingly hinge on sales improve-ment. Sears domestic may have more room to run on cost savings, but the negative 4.8 comp does lit-tle to ease our fears that merchandising initiatives are not enough to slow share losses. However, on the positive side, the $101 million in investment gains in the quarter is another sign that this man-agement team knows how to make money and is building a war chest for potential acquisitions,” said Goldman Sachs analyst Adrianne Shapira.

Edward Lampert, chairman of Sears and of ESL Investments, is said to be interested in Home Depot, Anheuser Busch and the Gap, among oth-ers. Financial sources said they expect Lampert to move on an acquisition within the next six months.

By retail brand, sales and services at Kmart decreased 3.1 percent to $4.04 billion from $4.17 billion, while same-store sales dipped by 0.7 per-cent. Kmart’s gross margin rate fell to 23.4 percent compared with 24.3 percent a year ago. The com-pany said in a statement that the lower sales and gross margin rate was partially offset by reduced expenses. While sales were lower in some home and hardlines categories, those declines were par-tially offset by comp gains in apparel and pharma-cy. Lisa Schultz was named the new merchant for

apparel at both Kmart and Sears last year.Sales and services at domestic Sears stores fell

2.2 percent to $6.66 billion from $6.8 billion, while comps decreased by 4.8 percent during the quar-ter. The gross margin rate improved at Sears, ris-ing to 30.7 percent from last year’s 29.4 percent. Similar to consumer shopping patterns at Kmart, the home fashion and lawn-and-garden categories saw declines, but were partially offset by “pro-nounced sales increases” in women’s apparel, which the company said refl ected “improved as-sortments in this business relative to last year.”

The company invested in some deriva-tives trades that helped boost its bottom line. Excluding total return “swap income,” income tax settlements and restructuring charges, earn-ings per diluted share was 83 cents versus 48 cents a year ago; Wall Street expected EPS of 98 cents. Income from the derivatives contributed 42 cents a diluted share. The company said the derivatives are “highly concentrated and involve substantial risks,” but did not say exactly what the investments were.

Derivatives investments involve contracts be-tween companies that typically are hedged or spec-ulative in nature. These fi nancial instruments often involve equity, bonds or commodities.

By Miles Socha

PARIS — Swiss accessories and fashion firm Bally is in play, and Kenneth Cole is said to be among the bidders, WWD has learned.

According to market sources, Texas Pacific Group, which snapped up Bally in 1999, is said to be readying an exit plan, having restructured the fi rm and reached breakeven for the fi rst time last year.

Asked if the company was for sale, a Bally spokeswoman said Thursday, “We are not aware of anything.”

However, industry sources said it would be log-ical for TPG to take advantage of Bally’s current momentum and cash out. Over the past two years, the privately held company has cited increased sales, healthier margins and better cost effi ciency.

Global sales increased between 15 percent and 20 percent in 2005, from 345 million euros to 360

million euros, or $419 million to $437 million, re-spectively, at current exchange, and a similar tar-get is set for 2006.

Bally’s core product categories — with about 50 percent of sales from shoes, 40 percent from ac-cessories and the balance from ready-to-wear — resemble Cole’s defi ning elements. Recently, Cole beefed up management ranks and announced a plan to upgrade its Kenneth Cole New York brand from better to the “affordable luxury” category.

A spokeswoman for Kenneth Cole said it is com-pany policy not to respond to industry rumors.

The identity of other potential bidders could not immediately be learned.

Based in Fort Worth, TPG has been among the most active private equity funds in fashion and retail. Last year it added Neiman Marcus Group to an investment portfolio that includes J. Crew Group and Ducati Motor Holding SpA.

Bally Said for Sale, Cole a Suitor?

Doo-Ri Chung

Edward Lampert

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The Beauty Report

Fragrance Builds Holiday MomentumBy Julie Naughton and Pete Born

NEW YORK — ’Tis the season of fragrance once again, and the beauty business is building momentum — thanks partly to a strong assist from upscale skin care and trendy color cosmetics, two categories seldom cited for gift-giving appeal.

At Henri Bendel, Claudia Lucas, senior vice presi-dent and general merchandise manager of beauty, noted that “skin care has been one of our strongest categories this fall, driven by the continuing success of Freeze 24/7, Chanel, Nars and Laura Mercier.” Lucas plans to keep her strong skin care business going through the holidays. “We are going to focus more on gifting,” she said, adding that she’s planning to sell gift baskets as well as single items.

At least one infl uential department store retailer has echoed the sentiments of others by noting that skin care, particularly high-end brands, has been a second-half growth engine for upscale retailers, and it is expected to steam on right through Christmas. “Consumers are par-ticularly attracted to high-end skin care sets, which they perceive to be a great value,” the retailer said. Among the hot sellers: Shiseido and Clarins. A num-ber of department stores also expect some strong performances in the fragrance department, namely from Armani Code, Calvin Klein’s Euphoria Man, Ralph Lauren’s Polo Double Black and Giorgio Armani’s Acqua di Gio on the men’s side, and Juicy Couture, Vera Wang Princess, Chanel No.5, Donna Karan’s Cashmere Mist and Romance by Ralph Lauren in the women’s aisle.

The holidays have always meant fragrance and at Bloomingdale’s, it’s a good season for scents. “We are off to a very positive start,” said Howard Kreitzman, vice president and divisional merchandise manager of cosmetics and fra-grances. He was referring in part to the new crop of fall launches. “The newness piece is run-ning at a very healthy penetration,” he said, adding that the normal cannibalization of the existing fra-grance business is “the lowest we have seen in a long time, less than half our past experience.”

A major infl uence was this fall’s launch of the Juicy Couture fragrance, which Bloomingdale’s introduced under an unusually generous three-month exclusive. “It exceeded very high expectations,” Kreitzman said. “Juicy enabled us to recruit a new customer and brought with it a great deal of excitement. It has had a spillover effect on other brands.”

The women’s entries have been strong and so

have the new men’s scents. L’Homme Yves Saint Laurent from YSL Beauté is exclusive at

Bloomingdale’s and “it has exceeded our expectations.” Others doing well are Jean Paul Gaultier to the Power of 2 and Prada Men. On the wom-en’s side, the store has scored with Donna Karan Gold, Victor & Rolf ’s Flowerbomb, Hanae Mori Magical Moon, Betsey Johnson and Badgley

Mischka.In addition, Bloomingdale’s ap-

pears on its way to anniversarying the strong gift-with-purchase business it

chalked up last year. “We’ve got the momen-tum,” Kreitzman said. “It’s so much easier to

keep a trend going than to reverse a tough trend.”Kreitzman declined to discuss numbers or make a

forecast but indicated that he expects an increase for December, particularly with the extra selling day this year. Industry sources estimate that Bloomingdale’s could achieve a gain in the higher end of mid-single digits.

Micheline Jordaan, vice president and dmm of fra-grances at Macy’s East, said, “We are feeling very opti-mistic about the fourth quarter.” She noted that “solid comp-store growth” has been generated this year by strong performances from key existing brands, such as Donna Karan’s Cashmere Mist, Dolce & Gabbana Light Blue, Giorgio Armani’s Acqua di Giò and Jean

Paul Gaultier’s Le Male, combined with strong new introductions, such as Calvin Klein’s Euphoria, Sean John’s Unforgivable and Versace’s Crystal Bright. Jordaan added she expects that the gains compiled in the third quarter and “a very good performance early in November will translate into strong December sales.”

She said the two factors driving the fra-grance business is the one-two punch of “newness and the invigoration of legacy brands.” Jordaan noted that celebrity scents continue to perform well, but there now is more equilibrium with newly animated ex-isting brands. “This holiday season we have invigorated the in-store presentation of fra-grances, both visually and in terms of giftable content,” she said. “In addition, we have en-hanced the marketing package signifi cantly.”

Meanwhile, Barneys New York has chalked up “some strong double-digit in-creases” in fragrance, according to Bettina O’Neill, vice president and dmm. The store is having a strong season with scents from Frederic Malle, L’Artisan Parfumeur, Serge Lutens, the new men’s scent from Hermès and the indie brand L’Labo. O’Neill said the store has been selling fewer gift sets and doing more core business in fragrance this year, with stalwarts like Comme des Garçons. “We just have been editing and focusing,” she said.

Fragrance has always been a mainstay at Studio at Fred Segal in Santa Monica, Calif., and president Robin Coe-Hutshing played to that strength this week by launching a store-within-store concept called Memoire Liquide. It is an ambitious and elaborate in-terpretation of the perfumer’s organ with a

300-square-foot L-shaped counter that features samples of 160 scents that can be mixed like building blocks into more elaborate fi nished fragrances. Prices range from $30 to $75 for a three-pack, and there has been no resis-tance in terms of price or anything else. “It’s the easi-est sale I’ve ever made,” she said. “People are crowded around the counter. They are in thrall.” Plans call for introducing the concept with a shop at Henri Bendel in New York in the spring and then perhaps at Mecca in Australia. “The biggest challenge is the training,” said Coe-Hutshing, who plans on adding a line of fi nished fragrances sometime in the next year.

High-end skin care is also driving beauty growth for Ed Burstell, senior vice president and general mer-chandise manager of beauty, jewelry and accessories at Bergdorf Goodman. “We’ve had a great fall and expect that momentum to continue through Christmas,” said Burstell. Top sellers at Bergdorf ’s this fall have includ-ed Jemma Kidd and Shu Uemura in color; Clinica Ivo Pitanguy, Cle de Peau, Kanebo, Sisley and Natura Bissé for skin care, and high-end fragrances from L’Artisan Parfumeur, Clive Christian and Creed, said Burstell.

He added that there’s little resistance to price. “If it’s right, the customer isn’t concerned about the price.” For instance, “Bobbi Brown did an incredible makeup case stuffed with products that is exclusive for us,” said Burstell. “It’s $1,300, but it’s doing very well. We’re also seeing great things from an exclusive makeup organizer from Trish McEvoy and exclusive scents from Guerlain. It’s about offering interesting, high-end products that customers can’t fi nd everywhere.”

At Sephora, “We are posting double-digit year-to-date comps again this year,” said Betsy Olum, senior vice president of marketing. She expects that trend to continue through Christmas. “Overall, we expect this holiday to be very strong compared with last year,” said Olum. “Within Sephora, the makeup category continues to perform strongly, driven by growth in brands includ-ing Bare Escentuals, Urban Decay, Nars, Benefi t and Dior.” As in the past, Sephora teamed up with brands to create exclusive makeup sets. Olum added that the bath and body category is projected to perform strongly with holiday gift sets, and the fragrance gift voucher program is expected to fuel that category.

In addition to the Sephora branded makeup brushes and bags, Olum said, “The brands we expect to perform the strongest include Fusion, Philosophy, Stila, Bare Escentuals and Bliss, to name a few.” In skin care, Olum’s standouts are Philosophy, Murad and Bliss, while in fragrance Vera Wang, Bulgari and Calvin Klein are top performers, she said.

For Henri Bendel’s Lucas, fragrances are very niche-oriented. “We’re doing well with L’Artisan Parfumeur, Carthusia, Child, Caron and Aftelier,” she noted. Fragrance products for the home, such as the retailer’s private label candles, are also selling well, and Lucas thinks that fra-grance diffusers will join that list for the holidays.

On the color cosmetics side, Lucas “can’t keep Chanel’s black nail polish or mascara in the store — there’s a waiting list for both” and is also seeing strong growth from YSL’s new foundation, Perfect Touch, which features a built-in brush. Mally Cosmetics and ModelCo, which entered Bendel’s in the spring, and Therapy Systems color, a fall addition, are also strong sellers at Bendel’s, she added. “Our customer is very on-trend and is looking for the latest thing,” said Lucas. “Holiday pal-ettes do well, and we will have lots of them.” Lucas said that Bendel’s is also reinstating its holiday catalogue.

Juicy Couture

Donna Karan Gold

Ralph Lauren’s PoloDouble Black.

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Clarins Recasts Its Color BusinessClarins is retooling its color cosmetics line this spring in a plan aimed at captur-

ing a greater share of the lucrative makeup market.“This is an important moment in time for us,” said Caroline Pieper-Vogt, senior

vice president of marketing for the Clarins brand in the U.S. “The new makeup col-lection is the most strategic of all time for us — to be a beauty authority, we need to be successful in makeup. We are changing the formulas, the colors and the packag-ing. We want to bring the strength we currently enjoy in skin care to the makeup market, and with this [new collection], we have found our voice.” That voice is in-tended to be fresh and fun, she emphasized.

On the formula front, particles have been micronized to lengthen their wear. The new color compacts are elliptical, a switch from the square compacts Clarins cur-rently uses. At the base of the compacts, Clarins’ signature red has been made more translucent, while the formerly yellow-gold lids have been changed to white gold. For an extra touch of luxury, noted Pieper-Vogt, each of the compacts is also placed into a red suede sleeve.

In addition, Clarins will launch 20 stockkeeping units in color cosmetics, called Instant Light, and repackage and reformulate the present line, for a total of about 220 sku’s ranging in price from $19 to $37.50. The new products offi cially launch in March, although they will begin rolling into stores in January, said Pieper-Vogt.

Clarins does not break out sales projections and executives declined to specu-late, but industry sources calculate that the 20 new sku’s could generate $4 million at retail in the fi rst year on counter.

To promote the new line, Clarins has hired celebrity makeup artist Nick Barose, who will be the brand’s spokesperson beginning in January.

Barose’s fi rst gig will be hosting a pre-Golden Globes event in Los Angeles for his celebrity clients. He also will promote the brand through TV appearances, editorial photo shoots and the Internet and will be a part of makeup artist education.

“I’ve been a huge fan of Clarins for years,” said Barose. “We have the same men-

tality — that makeup should be accessible to every woman and it should be fun. Also, Clarins is very strong in skin care, and that philosophy and technology is carried over into the makeup, which is rare. And the new makeup line is made up of beautiful, very blendable colors. You don’t need to be a makeup artist to know how to use them. They are very user-friendly.”

That’s also true of the shade range. “It’s targeted,” he said. “There aren’t a lot of weird colors that won’t be practical. I don’t need to see 30 blush colors when half of them aren’t fl at-tering.”

As well, Clarins also plans a major promo-tional push behind the cosmetics collec-tion. “This will be a major investment,” said Pieper-Vogt, adding that the campaign will include a new tester unit, new makeup information piec-es and intensive education for sales consultants. In addition, more than 300,000 informational booklets will be distributed, as will sample cards with color seals. The new tester units will bow in January.

In the U.S., Clarins is available in about 1,250 department and specialty store doors. The brand, which has been selling on-line at Gloss.com for several years, plans to launch its own Web site, clarins.com, in February.

— J.N.

GIVENCHY PLANS TO PAY ITS COLOR COSMETICS BUSINESS MORE THAN lip service by launching its new lipstick line, Rouge Interdit, in March.

The line heralds “a return to serious lipstick,” said Nicolas Degennes, artistic director of makeup and colors for Givenchy.

“Rouge Interdit is a full-coverage, deeply colored formula,” said Linda Maiocco, vice president of marketing in the U.S. for Guerlain and Parfums Givenchy. “Liquid crystals are the breakthrough feature that allow for maximum light refl ection. While classic lipstick pigments rely on mother-of-pearl, which

only refl ect one color and can look opaque, liquid crystals refl ect every shade of the light spectrum, from yellow to red to blue.

The result is luminous color and satiny gloss in a light-weight, comfortable fi nish.”

The formula also includes poppy extract oil for hydration, ricin oil to aid in shine

and beeswax and candellia wax for a spreadable texture, she added.

The lipstick has another dis-tinction: Degennes created

Rouge Interdit’s colors without looking at the current Givenchy

palette of lip colors. “ I wanted to do something

completely new and different and not be infl uenced by anything we are

currently doing,” said Degennes, who winnowed the line’s 24 shades down from a spectrum of 100. The colors, which range from pale pinks to dark reds, will each retail for $26.

While the formula is intended to be the star of this product, the packaging is an apt understudy. Created by two designers trained at London’s Central St. Martin’s School, the lipstick case is a sleek square black with the Givenchy name in silver. Inside, the lipstick bullet is housed in a silver-toned tube em-bossed with the brand’s signature Gs. The lipstick tube has a black ribbon pull at its base, which the user employs to remove the bullet from the outer casing.

In the U.S., distribution for Rouge Interdit is very targeted, said Maiocco: It will be available in fi ve Saks Fifth Avenue doors and nine Sephora doors. It will be sampled in-store via cards with several color samples and a mini lip brush. Direct mail is also planned.

While neither of the executives would comment on projected sales, industry sources estimated that the lipstick would do about $1 million at retail in the U.S. in its fi rst year on counter.

Elsewhere, the brand will launch a host of limited-edition fragrance fl ankers next spring, including Very Irrésistible Givenchy Summer Sun, due in March; Very Irrésistible Givenchy for Men Fresh Attitude, in May, and Ange Ou Démon Silky Drop in April. Three other fl ankers that make up the Harvest Collection — Amarige Ylang Ylang 2006 Eau de Toilette, Organza Fleur D’Oranger 2006 Eau de Parfum and Very Irrésistible Givenchy Rose Centifolia 2006 Eau de Parfum — will launch in mid-April.

— J.N.

Shiseido plans to kick off the first half of 2007 with a number of additions to its skin care and color cosmetics franchises — most notably, a revamped version

of the brand’s six-year-old Shiseido The Skincare range.Coming in March, the updated skin care range incorporates the newest tech-

nologies available, said Heidi Manheimer, chief executive offi cer of Shiseido Cosmetics (America) Ltd.

“Skin care has historically been a very strong category for us,” said Manheimer, adding that the brand ranks at number fi ve in skin care in the U.S. according to NPD. “We’re up 15 percent in skin care year-to-date and are seeing growth in several categories, including the brightening category. We want to keep that momentum going.”

Shiseido The Skincare currently includes 28 stockkeeping units ranging in price from $28 to $40. Seven of the current stockkeeping units will be discontinued, but eight new products will be added. Yuzu seed extract, extracted from the Asian citrus fruit, is the key addition to the line. It is said to help the skin produce its own hy-aluronic acid, a key humectant, said Tomoko Yamagishi-Dressler, vice president of marketing for Shiseido Prestige Brands. Other key ingredients include trehalose, a sugar found in items such as cactus that is said to help lock moisture into the skin, and a tea rose element, which is said to help improve the skin’s barrier func-tion, added Jean Bellard, director of education for Shiseido Prestige Brands.

Also in skin care, Shiseido is adding Benefi ance Full Correction Lip Treatment in February. Powered by the proprietary Super Fix Formula — said to keep the treatment on constantly moving lips — the waterproof product also includes a reti-nol derivative to minimize wrinkles, marine collagen to plump lips and hespiridin to minimize the appearance of dullness, said Bellard. It has another distinction as

well: “This is the fi rst time that we’ve added a lip treatment to Benefi ance, which is one of our best-selling franchises,” said Manheimer. It will retail for $35 for 15 ml. Shiseido also plans to ramp up its color sales this spring by introducing a new blush called Accentuating Powder Blush, as well as adding a host of new eye

and lip products. “Blush represents the largest oppor-tunity for growth [for us in color],” said Manheimer. “Our blush business currently represents 8 percent of our total color business, and we are confi dent that will sharply increase with the addition of Accentuating Powder Blush.”

The blush will be available in six shades, each priced $28. “They’re formulated with three-dimen-sional powders which are both natural-looking and long-lasting,” said Yamagishi-Dressler.

As well, new colors will join the existing Hydro-Powder Eye Shadow and Shimmering Lipstick ranges.

In the U.S., Shiseido products are available in 897 department and specialty store doors, with 15 expect-ed to be added by yearend, said Manheimer.

While none of the executives would comment on pro-jected sales or advertising spending, industry sources

estimated that the new Shiseido The Skincare range would do at least $8 million at retail in its fi rst year on counter and that the additional products the company is launching in the fi rst half will add $7 million in retail sales.

Sources estimated that Shiseido’s full-year sales for the U.S. will top $210 mil-lion at retail by yearend and $225 million in 2007.

— J.N.

Shiseido Reformulates and Revamps ‘The Skincare’ Line

Givenchy Zeros In on Lipstick With Rouge Interdit

Rouge Interdit

Clarins retools.

The newly reconstituted products.

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Michael Gordon, the godfather of editorial hairstylists, has left the building.

Gordon, founder and president of Bumble and bumble sa-lons, product development and school, has stepped down as head of the company that he sold six years ago to the Estée Lauder Cos. Gordon will serve in an advisory role for the estimated $90 million fi rm and other areas within Lauder over the next three years, collaborating directly with Philip Shearer, a group president of the Estée Lauder Cos. Gordon said he will also continue to supply his photographs, used for promotional materials and even offi ce decor, for differ-ent Bumble projects to “keep consistency” for the brand. Dan Brestle, chief operating offi cer of the Estée Lauder Cos., said keeping Gordon on as an adviser is something very important to Lauder.

“He has tremendous knowledge of the salon business and is probably one of the best product innovators. If you look at his life’s story, whether you are a hairdresser or an entrepre-neur, it is a fabulous success story and people should be in-spired by it.”

According to Gordon, the agreement was hammered out several weeks ago when Lauder completed its buyout of Bumble.

“That’s the way it seems to work” when people are bought out, said Gordon of his new role. “It’s a normal business prac-tice.” However, he added that he would help “in any way that I can.”

Karl-Heinz Pitsch, general manager of Bumble, will over-see the business going forward as no replacement for Gordon is expected.

Gordon, born in London, became a hairstylist at 15. At 21 he was the youngest artistic director at The Elizabeth Arden salon in London. It is also where he started his edi-torial styling career. In the mid-Seventies, Gordon moved to Johannesburg and opened his fi rst salon there with his broth-er. In 1977 he moved to New York and opened a small salon on 57th street, which later burned down. Soon after, he opened a new and bigger space on 56th Street and quickly became one of the most sought after hairstylists in Manhattan.

Bumble’s product line was developed in the late Eighties with Brilliantine, a fi nishing lotion formulated to add shine and separation to hair. In 2000, Estée Lauder took note of the brand’s potential and purchased a majority stake in the com-pany. Since then, Bumble has opened a six-fl oor hub in the Meatpacking District, home to Bumbles’ headquarters, salon and retail space. Bumble now also manufacturers more than

50 products including shampoos, conditioners, fi xatives and hair accessories, which are sold at select salons in the U.S. and at retailers in 10 countries.

Gordon has vacated the fi rm’s headquarters and is working from home on a new concept called Enlightened Business, a Buddhist-based coaching role that teaches companies how to use profi ts to help others. A three-year non-compete contract clause will keep him clear of the beauty world.

NEW YORK — Horst M. Rechelbacher, a self-de-scribed “ecological activist,” shook up the salon in-dustry in the late Seventies with Aveda, his natural, eco-friendly brand. Now he’s preparing to break ground with another line, one that reflects his sharply evolved homegrown philosophy.

By teaming up with salon company Regis Corp., Rechelbacher has created “a head-to-toe” or-ganic personal care and cosmetics line under the “Intelligent Nutrients by Horst” banner. The joint venture, Intelligent Nutrients LLC, plans to distribute the products to salons exclusively. Glenn Elliott, for-mer global vice president of sales for the Dermalogica skin care company, has been tapped as the new presi-dent of the joint venture. A management team has al-ready been put in place.

Paul Finkelstein, chairman and chief executive of-fi cer of Regis Corp., said, “This not a Regis venture. We have an equity interest. This is a 50-50 joint venture, and Horst is the person who sets the table. This is his vision, training and product line.” Finkelstein, howev-er, is chief executive offi cer of the new joint venture.

In separate interviews, the partners gave their per-sonal opinions of the joint effort.

Finkelstein explained that he had handpicked 800 Regis Corp. doors that will merchandise the line, in-cluding Vidal Sassoon and Carlton Hair International salons, a California chain. The brand will be whole-saled to other non-Regis Corp.-owned salons; it is now being shipped to Aveda concept salons. Both partners stressed that profi ts from wholesaling to non-Regis salons would be turned over to charities. Finkelstein said Rechelbacher’s share of the profi ts would go to environmental charities — such as farmers and com-munities practicing sustainable agricultural tech-niques — and Regis has earmarked its profi ts for beauty school scholarships.

Finkelstein echoed Rechelbacher in declaring that

the line would be merchandised in “high-profi le locations with unique displays so that the line stands out” and even-tually would develop into store-within-store concepts.

“I am interested in putting stores within stores,” said Rechelbacher, who is the deal’s founder, designer and educational director. “The most important thing is location,” he noted, adding that he was looking at Regis salons around the world. He is focusing on Europe, but also mentioned Hong Kong and Bangkok, among other locales. In New York, he has already set-tled on a Jean Louis David salon on 42nd Street and Sixth Avenue that could serve as a fl agship.

For Rechelbacher, a critical factor is the ability to educate salon personnel to be in tune with his natu-ral, organic vision. “It’s all about reinvention and training hairdressers.” Before selling Aveda to the Estée Lauder Cos. in November 1997 for approxi-mately $300 million, Rechelbacher had perfected the art of selling products in salons. While many sa-lons in the industry at that time could only generate 3 percent to 5 percent of their total revenues in retail business, he was claiming percentages as high as 65 percent and 70 percent. One method was to establish and work through schools. “When I started schools, I used to promote the products,” he said, noting that Regis runs 100 schools.

But the heart of his current proposition is prod-uct assortment, which includes foods, such as teas and chocolates, and a whole range of personal care and cosmetics — hair care, color cosmetics, skin care, body care, maternity and baby care, and even edible “sensuous love products.”

His vision is to market a brand of “rare edible or-ganics made of highly nutritious food substances.” Rechelbacher has been working with “some edible aromatic food-grade essential oils.”

Both Finkelstein and Rechelbacher underscored what they perceive as the need for the organic products.

“We are sick and tired of manufacturers abus-ing the trust of the hairstylist and no one else is big enough to stand up to them,” Finkelstein said. “We have a 15 percent share of what is sold in North America. If we don’t make a stand, no one else can.”

Finkelstein said Regis Corp. would make “plenty of money” on the sale of Intelligent Nutrients in his company’s salons. He added that the joint venture has a contractual life of fi ve years, at which point it will be evaluated. He estimated fi rst-year sales of products could be anywhere between $3 million and $20 million, depending on supply, since organic ingredients can’t be artifi cially manufactured. However, he estimated that in three years the joint venture could generate as much as $100 million in sales.

Rechelbacher seems determined to help create a sustainable ecosystem.

“The Earth doesn’t belong to us, we belong to it,” he declared. “I want to die with a good conscious.”

— A.N. and Pete Born

6 WWD, FRIDAY, NOVEMBER 17, 2006

The Beauty Report

Gordon Steps Down as Bumble Chief

Aveda Founder Teams With Regis on Organic Venture

NEW YORK — The Estée Lauder Cos. has recruited Donald Robertson as a creative force for its flagship brand.

Aerin Lauder, senior vice presi-dent and creative director of the Estée Lauder brand, is expected to announce today Robertson’s appoint-ment as senior vice president, cre-ative development for Estée Lauder.

Robertson, who will assume the newly created position on Monday, will oversee all visual aspects of the Estée Lauder brand and report to Aerin Lauder.

His experience spans beauty and publishing. Robertson was part of the team that launched MAC Cosmetics in the early Nineties, and is credited with working on all visual elements of the brand, including the design of the makeup artist brand’s fi rst freestand-ing store in Greenwich Village here, which has since become a prototype for the MAC aesthetic.

Most recently, he held several posts at Condé Nast Publications, overseeing the launch of Cargo and the redesign of Glamour. Prior to Condé Nast, he oversaw the cre-ative direction of two Hearst titles, Cosmopolitan and Marie Claire.

“Creative excellence has always been a hallmark of Estée Lauder,” Aerin Lauder said in a state-ment slated to be released today. “Donald’s extensive experience con-ceptualizing visual environments at retail and in the publishing world make him a wonderful addition to the team.”

— Molly Prior

Estée Lauder TapsDonald RobertsonFor Creative Post

Horst M. Rechelbacher

Michael Gordon

Paul Finkelstein

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WWD.COM

EasyStraight Products Address FrizzEasyStraight, the brand that brought a straight-

ening kit to the masses, plans to intensify its battle against frizz this spring with four new prod-ucts, ramped-up distribution and a fresh look.

“I kept seeing the struggle people had with frizz,” said Haime Munoz, a salon owner and cre-ator of EasyStraight. “I wanted to offer products that delivered results that were longer-lasting. Many frizz-control products out in the market cre-ate buildup. I wanted to give consumers immedi-ate gratifi cation and, on top of that, make their hair healthier.”

Munoz noted that EasyStraight’s products are designed to address the main causes of frizz, from the daily stresses of overusing heat appliances and chemical treatments to the hair’s natural tex-ture and moisture absorption.

His efforts are hardly falling fl at. EasyStraight’s sales have increased 36 percent to about $3 mil-lion, in food, drug and mass stores — excluding Wal-Mart — in the 52-week period ended Oct. 8, according to Information Resources Inc.

Like its predecessors, EasyStraight’s upcoming products are designed to reduce and repair frizz for all hair types, including frizzy, curly and wavy hair.

The offering includes Instant Silk, a daily treat-ment that relies on styling polymers to ward off frizz; Climate Shield, a waterproof hairspray said to repel moisture and humidity; Frizz Block, a de-frizz and repair serum designed to stop breakage and enhance shine, and Anti-Frizz Conditioning Treatment. The quartet, which will retail be-tween $8 to $15 each, is slated to launch in March in about 17,000 doors, including Rite Aid, CVS, Walgreens and Duane Reade.

The company plans to increase its U.S. distribution by 18 percent to about 20,000 doors by year’s end.

EasyStraight’s Anti-Frizz Conditioning Treatment is billed as the star product in the lineup. The three-part system, which will retail for $15, lasts for 30 days and is designed to target the hair cuticle and repair frizz, damage and split ends.

“Most other frizz-control treatments don’t last more than one shampoo to the next,” said Munoz. “This anti-frizz remover provides long-term frizz repair. The more times you use it, the healthier your hair becomes.”

The Anti-Frizz Conditioning Treatment system contains an Internal Repair Solution, Cuticle Repair Conditioner and Anti-Frizz Sealant. Applied to dry-washed hair, the Internal Repair Solution and Cuticle Repair Conditioner are designed to be mixed together and left on the hair for 20 minutes.

“The Internal Repair Solution infuses the hair cuticle with elements that are

vital to maintaining strong-looking hair with pro-teins and natural oils that are depleted from hair. The conditioner externally seals in nutrients like shea butter, fl axseed oil and coconut oil, soften-ing and smoothing the hair’s surface,” said Maria Dempsey, president of HM Mane Solutions LLC, the maker of EasyStraight. The fi nal step is the Anti-Frizz Sealant, an intensifying conditioner that is to be applied after every shampoo.

Industry sources estimate that the four new frizz products could generate $3 million to $4 million in fi rst-year retail sales, building EasyStraight into a $10 million to $12 million busi-ness. Dempsey noted that by the end of this year, EasyStraight’s business will have doubled in size from 2005.

Early next year, the brand expects to expand its shelf presence in existing retail partners and in new ones, including Albertsons and Target, said Dempsey. On the international front, the company plans to gain space in about 3,000 doors in Puerto Rico and Australia by year’s end.

In the past, the company targeted Caucasian women between the ages of 18 and 49. The line is now focusing more on the Hispanic market, which accounts for 60 percent of EasyStraight’s business.

In an attempt to update the brand’s image, the company has revamped the packaging for all 10 of its products. The new packaging, slated to appear on shelves in January, contains bi-lingual labels written in English and Spanish. EasyStraight want-ed to make its products easier to understand, while creating a more cohesive brand among its lines.

“We found that our customers weren’t able to recognize our product attributes, so we wanted to

create stronger and more cohesive units on shelves,” said Munoz.Dempsey added, “We wanted to give our brand a stronger personality and focus

more on bolder product names and clearer product communication. As we extend into more products, we wanted shopping to be a simpler experience for our customers.”

The company also plans to triple its marketing and advertising spending next year, said Dempsey. Television ads, featuring 30-second spots in both English and Spanish, will focus primarily on existing products, such as the brand’s three-month and one-week straighteners. A print campaign, featuring the four new frizz items, will break in May in about 10 fashion, beauty and lifestyle books. Munoz will also make about 100 in-store appearances as the company’s retail partners help to edu-cate consumers on how to use products. The company even has plans to train and educate beauty advisers at retailers like Walgreens.

— Michelle Edgar

Aussie will be ringing in the New Year with a new look, as the Australian hair care brand introduces

four new collections this January, along with repack-aging and reformulations.

“The restaging of the brand recaptures what the Aussie spirit of beauty is about and drives awareness about it in the marketplace,” said Kenyatte Nelson, Aussie’s brand manager. “Aussie is seen as a local jewel [in Australia], but we see North America as a big opportunity for us.”

Acquired by Procter & Gamble in the Clairol deal fi ve years ago, Aussie brought with it a loyal consumer base. However, company research showed that con-sumers were loyal to individual products rather than multiple items, not recognizing the benefi ts of com-plete collections.

“We saw that Aussie was diffi cult to shop. We want to make sure that we stress the importance of the en-tire lineup and benefi ts of the collection versus spe-cifi c [stockkeeping units] when talking to customers,” said Nelson.

According to Information Resources Inc., Aussie sales increased 12.5 percent to about $70 million in sales in food, drug and mass stores — excluding Wal-Mart — for the 52-week period ended Oct. 8.

Nelson said the growth of Aussie over the last year can be attributed to a distribution increase of 35 per-cent, an increase in customer merchandising in stores in addition to introducing a more “consumer-centric” approach to media spending, leveraging alternative media vehicles such as interactive along with tradi-tional media like television and print.

Aussie will relaunch 32 products and introduce 16 sku’s in four new collections. Sun Touched Shine, Catch the Wave, Hair Insurance and Sydney Smooth will be sold in food, drug and mass stores, including Wal-Mart,

Target, Kmart, CVS, Walgreens and Eckerd. With prod-ucts ranging in price from $2.99 to $4, each collection will contain its own fl oral or fruity fragrance, designed to offer different benefi ts. For instance, Sun Touched Shine is designed to deliver a radiant shine with ingre-dients such as guava, sea kelp and ginger, while Catch the Wave aims to enhance and maintain waves and curls with jojoba oil, sea kelp and jasmine. Along with offering a shampoo and conditioner, each collection will feature a different set of products, such as leave-in conditioners, hair spray, gel and antifrizz cream.

The company also hopes to increase its product of-fering on retailers’ shelves, said Nelson.

“We want to make sure all of our retailers carry the breadth of our sku’s,” said Nelson. “Our customers are women who have a number of hair care issues and are looking for quick and simple solutions. We’re offering simple ‘shoppable’ solutions that deliver benefi ts.”

According to Nelson, Aussie has a 3 percent dollar market share across all hair care categories, including shampoo, conditioner and styling products. He added that over the next three to four years, the company plans to increase dollar share to 5 percent, growing Aussie’s overall business by 30 percent to 40 percent.

Although executives declined to comment, industry sources estimate that the brand, including the four new collections, will generate about $150 million in 2007.

A total of over $50 million has been slated for an advertising and promotional budget. Print and TV ads featuring the new products will break in January. Print advertising will appear in single- and double-page ads in 12 to 15 beauty, fashion and lifestyle books. For the fi rst time, the company will be doing advertorials “to drive further awareness of products, so customers can get more product information,” said Nelson. The company will also have online advertis-

ing in addition to revamping its Web site.Aussie also signed Australian celebrity hairstyl-

ist Frank Galasso as the brand’s spokesman in July and is currently in discussions to extend his contract. Galasso works on the West Coast where he manages two salons in Brentwood, Calif. — Frank Studio and Frank 18, a salon geared toward teens.

— M.E.

Aussie Tries Fresh Look to Boost Business

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EasyStraight’s new products.

Select Aussie

items from the new

collection.

8 WWD, FRIDAY, NOVEMBER 17, 2006

The HBA Report WWD.COM

A BEAUTIFYING INSTITUTE: Last month’s opening of Institute Beauté was yet another sign of the move toward more noninvasive procedures in the beauty world. The trend is gaining in popularity, at least according to those in attendance at the Upper East Side medi-spa’s opening party, hosted by André Leon Talley, Tuesday night. Levine wanted to create a “one-stop shopping from head to toe” retreat for busy executives. Ann Caruso, Leila Rose and Celerie Kemble all agree with Levine that preventative measures are often a better alternative. “No one wants to go under the knife until they absolutely have to. It’s about staying off the scary stuff and enjoying yourself in the meantime,” said Kemble. Talley is already a regular at the medi-spa and gets the foot refl exology service. “When I’m stressed, it’s the best release and makes you so calm, you could almost go to sleep,” said Talley.

GOODBYE, HELLO: Kevin Mancuso’s namesake salon is closing Nov. 22. The hairstylist cited “creative differences” with investors and said he was not willing to compromise his vision to meet the demands of others. “It’s a big disappointment,” he said. But Mancuso’s already on to Plan B: He’s joined forces with Rita Hazan and will be the head style guru at the colorist’s new salon, which celebrated its grand opening Tuesday night.

FREQUENT SPA GOERS GET REWARDED: Mary Blackmon, founder of spa-addicts.com, has come up with a way for spa goers to get rewarded for their spa treatments: Frequent SpaMiles. Every time a registered spa-addicts.com customer goes to a spa that partners with the Web site, that person will earn spa miles for a spa visit, which can be redeemed on the Web site for full-size, upscale products and other goodies. About 40 manufacturers are participating in the SpaMiles program, including GoSmile, Jane Iredale, Lather and Yonka. Based in Bevery Hills, spa-addicts.com has also launched a blog, which will report on the spa industry.

MERCIER’S SECRETS: Makeup artist Laura Mercier celebrated the release of her new book, “The New Beauty Secrets: Your Ultimate Guide to a Flawless Face,” a portfolio of her work, at a launch party at Bergdorf Goodman last week. “I’ve always been very shy about putting my work together and taking Polaroid photos on shoots because I didn’t want people feeling uncomfortable,” said Mercier, whose book, published by Atria Books, a division of Simon & Schuster, was released this month.

DON’T PASS GLOW: Last week Sephora introduced Monopoly: Sephora Edition, a symbolic nod to playing with makeup instead of real estate. The game resembles the classic in that bankrupting opponents remains the ultimate goal. The trip around the board, however, is much different. Players navigate with game pieces shaped like mirrors, blow-dryers and compacts, while landing on beauty-themed properties such as Plump Promenade and Lotion Lane. Pictures of a Smashbox eye shadow trio and Dior mascara, among other beauty brands, lend the game a feeling of cosmetics reality. What holds the coveted spot of most expensive property? An antifrizz hair balm from Phyto. Monopoly: Sephora Edition retails for $45 and is available at Sephora stores and on sephora.com.

SNIPPETS

By Rachel Brown

Can ghost brand Pert Plus be brought back to life? Phoenix-based Innovative Brands believes so and, backed by Najafi

Cos., a private equity firm with more than $1.1 billion in as-sets, has the wherewithal to do something about it. The com-pany bought Pert Plus in July for an undisclosed sum from Procter & Gamble and now is hatching plans to jump-start the two-in-one shampoo and conditioner brand, which is often lumped into the ghost category given its dearth of promotion-al support in the past few years.

Joe Jacober, chief executive offi cer of Innovative Brands, declared the ghost label is coming off early next year. Innovative Brands plans to roll out a full-scale marketing campaign, perhaps one of the most aggressive Pert Plus has ever experienced, with radio, TV and print ads.

“We are going to go back to consumers and talk about why Pert is an important part of their hair care regimen,” said Jacober. “We are turning over every rock to make sure we are going to get the message out to consumers.”

Although the details are still being hashed out, the mar-keting message is expected to stick to what originally made Pert Plus attractive: that it’s an easy-to-use, two-in-one prod-uct. Jacober argues that straightforward brands like Pert Plus, even though they retain a substantial audience, have become overshadowed with the spotlight moving toward professional salon items.

“We are going to make sure that the industry understands this is a niche,” said Jacober. “There is a small percentage of the population — maybe 10 to 15 percent in the category — who want simple, basic cleaning that gives great hair.”

Innovative Brands is currently scouting advertising fi rms, and is uncertain if it will rely on a celebrity spokesperson. Past advertising efforts by P&G featured well-known spokespeople, including athletes Mike Piazza, Mia Hamm and Dorothy Hamill. Andrew Pierce, a senior partner in the New York offi ce of brand consulting

fi rm Prophet, warned that turning around a brand is not pos-sible with promotion alone. “It can’t just be a new marketing campaign and suddenly it is new again,” he said. “Oldsmobile tried to continually reposition and change the advertising and marketing around, but they never changed the product, and it always failed.”

Jacober did not rule out addressing other aspects of Pert Plus. He said altering the packaging “is on the table,” but im-plied it is a delicate proposition because the green bottles with white lettering are “very recognizable.”

In surveys of some 10,000 people and focus groups, Innovative Brands found that two-thirds of Pert Plus users, who are 60 percent male, report it is their primary choice. The line of products, which has an average retail price of $3 each, currently consists of 40 stockkeeping units and six vari-eties of Pert Plus, including dandruff, kids and light, medium and deep conditioning. A Kmart spokesman said, “Pert Plus is a trustworthy brand still popular with many Kmart custom-ers.” Jacober is looking for increased promotional activity — including bonus packs, displays and circular ads — to drive sales. He noted that one retailer was able to increase Pert Plus sales 16 percent in 24 weeks with targeted promotions.

Introduced in 1986, Jacober described Pert Plus as the fi rst two-in-one hair product available on a “national basis.” Its

sales have tailed off since the brand hit its peak in the Nineties — becoming the top selling shampoo in the U.S. In 2001, P&G shifted its attention to global brands follow-ing its acquisition of Clairol and effectively ended Pert Plus marketing about three years ago. Jacober would not disclose the exact sales fi gures, citing an agreement with P&G not to discuss revenues.

Innovative Brands, which also picked up the deodorant brand Sure from P&G in September, is not in a hurry to ramp up Pert Plus sales. Jacober stressed there is no talk about an “exit strategy,” and Innovative Brands would be satisfi ed with steady 10 to 15 percent year-over-year growth.

Celebrity makeup artist Jillian Dempsey is giving Avon’s core color franchise a makeover next year in an attempt to turn the cosmetics giant into a beauty authority, strengthening

its position globally.As part of a multiyear contract that started in August, Dempsey, Avon’s global creative color

director, is upgrading color palettes for eye, lip and face shades in the company’s existing color collection. The Spring Style 2007 Sheer Collection marks the fi rst limited-edition color collabo-ration between Avon and Dempsey. The seasonal collection, available for two months, will offer a face powder, brush, lipsticks, lip glosses, nail polish and eye shadows. Dempsey looked to a sheer palette for inspiration. “I like makeup that’s not complicated and you can apply effort-lessly. Since I don’t like to spend lots of time looking in the mirror, I like makeup to be a simple process,” said Dempsey.

According to company execu-tives, Avon’s color business ex-ceeds $1 billion.

“We’re stepping up our brand competitiveness by reenergiz-ing Avon color, our largest global brand in the Avon portfolio,” said Jill Scalamandre, senior vice president of global beauty brands for Avon. “This aggressive reposi-tioning requires innovation. We’ve taken a look at all our color pal-ettes and textures and revamped it with an eye to being more mod-ern and fashionable.”

In addition, the entire color collection will be repackaged in a global initiative that will begin in the U.S. By March, Avon’s color collection will be upgraded in the U.S., followed by Europe in April and Latin America and Asia in September. Avon will soon sport a new look with black packaging as opposed to its traditional blue.

“We’re keeping the silhouette but giving it sleek, high-shine action with metallic accents,” said Claudia Poccia, president of Avon U.S. Beauty and global president of Mark, who added that the company also sees this as an opportunity to attract new customers to the brand. “This steps up the level of style and ‘fashionability.’”

According to Scalamandre, Avon is considering other partnerships with style experts “to help drive Avon’s style brand.” The brand recently signed designer Cynthia Rowley, who will work with Dempsey to develop an exclusive limited-edition collection color line, scheduled to launch next fall.

Poccia said there will be a 360-degree marketing plan, which will include print and televi-sion advertising campaign featuring new creative around Avon color. Television will break in March, while print ads will break in April. In addition, the Avon brochure will be redesigned and feature style authorities like Dempsey, who will offer editorial tips and techniques de-signed to educate consumers. More than 15 million lip and eye color samples will also be dis-tributed in March to sales representatives and consumers. Sales representatives will also be given training tools such as DVDs, look books and “Webinars,” to help them communicate with consumers. Although company executives would not comment on advertising expenses, Poccia said the company signifi cantly increased its ad investments for this initiative.

— Michelle Edgar

Pert Plus Readies for Second Coming

Dempsey Gives Avon Color Touch-up

Select items from Avon’s spring collection.

Pert Plus shampoos.

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Beautiful results start here.

Speak to women 50+ in the only magazine that speaks to them directly: AARP The Magazine. With 16 million potential cosmetic customers, the beautiful results you’re looking for are here. Get to know AARP The Magazine and see what our numbers can do for yours. To learn more, contact your sales representative or visit www.aarpmedia.org. Your customer. Our reader. Beautiful.

Source: MRI, Spring 2006. Base: women

10 WWD, FRIDAY, NOVEMBER 17, 2006WWD.COM

Media/Advertising

DIOR’S NEW FACE: Change is in store at Christian Dior — in the advertising department, at least. According to sources, after many years of collaborating with photographer Nick Knight, the French fashion house has tapped Craig McDean to shoot its spring

campaign. The ads will feature model Gemma Ward. Dior offi cials could not be reached for comment. — Miles Socha

A PRIVATE READER: Private equity fi rms are continuing their tear in the media world, as Reader’s Digest Association on Thursday agreed to be acquired by a group of investors, led by Ripplewood Holdings, for $2.4 billion. The Pleasantville, N.Y.-based publisher, which includes Every Day With Rachael Ray, said it doesn’t know if management changes will follow. If the deal goes through, it will close by the end of the fi rst half of 2007. A private equity source said the publisher has been undervalued by Wall Street and private equity sees an opportunity to grab a company at a good market value and raise it over the next fi ve years. “They want to buy it now while it’s cheap and prove that it is here to stay,” said the source. A spokesman for Ripplewood declined to comment.

Last month, Reader’s Digest reported its fi rst-quarter fi scal 2007 revenue was up slightly from last year, to $517 million. The company also is projecting to grow midsingle digits for the full fi scal year.

While the core Reader’s Digest has seen fl at circulation for some time — for the fi rst half, total circulation was 10,094,286, compared with 10,228,531 for the same period two years ago — it has seen better success with Every Day With Rachael Ray. That magazine plans to increase its rate base to 1.3 million from 750,000 with the February issue.

Meanwhile, on the same day, radio giant Clear Channel agreed to a buyout bid from private equity investors, led by Bain Capital. The deal values the company at approximately $27 billion. — Amy Wicks

GUILTY VERDICT: Christopher McCowen was sentenced to life in prison without parole Thursday for the murder and rape of former fashion writer Christa Worthington. His legal team immediately fi led an appeal and, for the fi rst time, he publicly proclaimed innocence in Barnstable County Superior Court in Massachusetts.

The verdict came just a few days after the jury announced a deadlock and subsequently lost its third juror for speaking about the deliberations with her jailed boyfriend. The jury agreed Thursday that McCowen, a garbage collector, killed the 46-year-old Worthington in her Cape Cod home in 2002. Superior Court Judge Gary Nickerson sentenced McCowen to three concurrent life sentences without the possibility of parole for being convicted of fi rst-degree murder, aggravated rape and aggravated burglary.

Prior to the sentencing, McCowen, who chose not to testify during the trial, addressed the court saying he was innocent just moments before he was led away in handcuffs. After saying he “feels sorry for the victim’s family, her daughter and for her,” he went on to say, “Through this whole trial, I have sat here thinking to myself, ‘Why me?’ I know nothing I can say can change your mind….All I can say is I’m an innocent man in this case.” — Rosemary Feitelberg

MEMO PAD

NEW YORK — Quick, think pink. For most, the color conjures up images of feminine frills and romance — ste-reotypical girlish things in the vein of Elle Woods in “Legally Blonde.” But porno flicks and smut rags?

Halfway across the world, in Japan, that’s exactly what it suggests: “the Japanese cute-girl culture as well as pornography,” explained Valerie Steele, director of the Museum at FIT. So in other words, their pink is our blue.

At FIT’s new show, “She’s Like a Rainbow: Colors in Fashion,” that’s just one of the many lessons to be learned. The exhibit, the third in the museum’s year-old Fashion and Textile History Gallery, explores the use and symbolism of color in fashion. Other fun facts to be gleaned: Red was the color of choice for many European brides until white became de rigueur in the 19th century; purple was the world’s fi rst artifi cial pigment, and blue, now the most popular hue to be worn, was once “a second-rate color in antiquity.”

Set against brightly colored wall hangings made from home decor fabrics and printed table covers, the kaleidoscopic items on display range from an 18th-century red riding hood to the green sequined gown — com-plete with the accompanying fox-and-chiffon stole — Tom Ford used for his fall 2004 Gucci fi nale. In all, there are more than 150 garments, textiles and accessories featured. Additions to the museum’s collection, bought spe-cifi cally for “She’s Like a Rainbow,” include a pink Yohji Yamamoto coat-dress from fall 2005 as well as a 19th-century violet-and-black-striped taf-feta dress.

“People are often intimidated by color,” said Elle’s fashion director, Nina Garcia, whose publication spon-sored the show. “It’s the easiest way to make a statement.”

“She’s Like a Rainbow: Colors in Fashion” is on view until May 5. — Venessa Lau

By Kristi Ellis

WASHINGTON — The world of music, poli-tics and fashion collided on Capitol Hill Wednesday as high-level Haitian govern-ment officials joined forces with hip-hop musician Wyclef Jean to lobby members of Congress to pass a bill enhancing apparel trade benefits for the island nation before they adjourn for the year.

Jean, who was born in Haiti, said he donned his “Joe college” duds — an oxford shirt under a pullover with striped tie, plaid pants and hip leather sneakers — to make the case for expanding ap-parel trade with Haiti. He was part of a delega-tion, comprising Haitian government offi cials and several apparel manu-facturers, who met with Reps. Charles Rangel (D., N.Y.), the incoming chair-man of the House Ways & Means Committee next year, Clay Shaw (R., Fla.), Jerry Weller (R., Ill.) and Sen. Mike DeWine (R., Ohio).

“For me, it’s very important because what I’m trying to do in the next 10 to 15 years is to get investors excited about Haiti again,” said Jean, whose uncle, Raymond Joseph, is the ambassador to Haiti. “Apparel is important because it provides jobs. I’m here lobbying for this bill because if we can give 10,000 people jobs instantly, it sends a signal to investors that says the doors are really open for Haiti.”

Haiti, the poorest country in the Western Hemisphere, has been losing apparel pro-duction to China and Central American and Caribbean countries since the major trading partners around the world removed quotas on apparel and textile products in 2005. As a result, apparel employment in Haiti has fallen from a peak of 100,000 jobs to less than 20,000, a change that could threaten

fl edgling democratic reforms and destabi-lize the region, Haitian offi cials warned.

The delegation pressed Congressional members to pass legislation introduced by Rep. Bill Thomas (R., Calif.) that would enhance the duty free benefi ts for Haiti through a 50 percent value-added rule that increases to a 60 percent requirement in the fi fth year in a lame-duck session in December. But the Thomas bill, which also contains an extension of trade benefi ts for sub-Saharan African countries, has met strong opposition from textile-state law-

makers, who succeeded in blocking it from an expedited vote in the House in September. The House members argued in a letter to Republican leaders that the expanded ben-efits for Haiti would allow companies to use Chinese fabric and yarns, which would dis-place U.S. business in Haiti and “devastate” the U.S. textile industry.

Richard Coles, presi-dent of Multitex, an ap-

parel division of Sirius Group, based in Port-au-Prince, Haiti, also would like to see more T-shirts with Made in Haiti labels.

“The provisions within the bill will have a direct and immediate impact on the woven part of the business and I think that we will get 7,000 to 10,000 immediate jobs,” Coles said. He added that Hanesbrands Inc. and Gildan are two of the largest foreign companies sourcing apparel, primarily T-shirts, in Haiti.

According to Coles, 12 apparel compa-nies have shut down in Haiti in the past few years, leaving approximately 30 oper-ating in the country. Coles also has laid off workers. At its peak, Multitex employed 6,000 people and it currently employs 3,700, he said. But he acknowledged it would be an uphill battle in Congress.

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Fashion of a Different Color at FIT Wyclef Hits Capitol to Push Haiti Bill

Dresses by Pierre Cardin in front of a print by Zandra Rhodes.

A few exhibit looks, including a green Oscar de la Renta dress and a purple Yves Saint Laurent gown.

Ambassador Raymond Joseph and his nephew, Wyclef Jean.

By Alessandra Ilari

MILAN — Thanks to a new business unit called Loro Piana Interiors, cash-mere fans can now sit on the luxurious fabric.

After years of dressing their own homes with cashmere, brothers Sergio and Pier Luigi Loro Piana, who share the chief executive offi cer position at Loro Piana, decided to launch a top-quality upholstery collection. The line will bow in January at the Maison & Objet home furnishings trade fair in Paris.

The collection is made up of 30 different textiles available in 300 colors and includes fl uffy cashmere moquette priced at $1,500 per square meter retail. It takes two kilograms of pure cashmere to make one square meter.

“People are constantly looking for quality in their lives, which is why we saw the opportunity to offer something unique for the home,” said Pier Luigi Loro Piana. “We’re obviously also tapping into our know-how in the textile business.”

Loro Piana is a cashmere specialist that makes and sells the fi ber for both knitwear and wovens. Aside from a namesake clothing line, it makes bags, scarves, hats and small leather goods.

Sales forecasts for the new project were not disclosed, though Loro Piana said they should be “hefty.”

Pierluigi Volonté has been tapped to be general manager of the home fabrics division, a new post.

Loro Piana Interiors’ array of products include antistain, water-resistant and washable cashmere, silk, vicuna, linen and cotton, sometimes blended, in textures such as herringbones, fl at ribs, sharkskin, waffl e and tartan. A small selection of coordinated leathers also is available. Retail prices for a meter of fabric range from $50 for cottons and linens to $511 for cashmere.

The color chart, divided into fi ve groups, includes gray, coffee brown, earth tones, pansy blue, mint greens and many red-based shades. Customers also can custom-order a specifi c color, which will require an eight-week wait.

A box containing swatches and bundles will be available in Loro Piana’s major fl agships worldwide, along with home furnishings stores and the stu-dios of interior designers.

Future plans include a showroom in Milan and New York. “This project is also a way to further strengthen our relationship with con-

sumers — they can call us the tailors of sofas,” said Pier Luigi Loro Piana. — Alessandra Ilari

Loro Piana to Launch Upholstery

WWD.COM11WWD, FRIDAY, NOVEMBER 17, 2006

Bloomingdale’s Boosts Designer Game PlanBy David Moin

CHESTNUT HILL, Mass. — Bloomingdale’s sells more designer merchandise in this village near Boston than anywhere else except its Manhattan flagship.

To secure that niche, Bloomingdale’s last week opened a 189,000-square-foot, three-level unit in the Mall at Chestnut Hill, replacing the 120,000-square-foot store across the street that has been converted to Macy’s. However, that’s just part of a strategy to pump up the designer business at several locations and narrow the gap with the retail leaders in the category, Neiman Marcus and Saks Fifth Avenue.

Designer is a $200 million-plus business at Bloomingdale’s, market sources said. With each new door, Bloomingdale’s goes more upscale. There’s an intensifi cation of designer offerings, with labels like Chanel, Giorgio Armani, Louis Vuitton, Akris, Burberry and Ralph Lauren. In addition, there are some fi rsts for Bloomingdale’s, with high-profi le labels not previously carried such as Jimmy Choo shoes or Giorgio Armani cosmetics, as well as an elevated ambience and refi ned fl oor plan.

The 330,000-square-foot San Francisco store, opened in September, has a broad designer offering, and the unit in South Coast Plaza in Costa Mesa, Calif., opening next spring, will launch with “a major designer presentation,” said Michael Gould, chairman and chief executive offi cer.

Elsewhere, Bloomingdale’s has been beefi ng up designer assortments in the Aventura and Palm Beach Gardens, Fla., stores, and in Newport Beach, Calif., Gould said. Previously, Bloomingdale’s sold designer merchandise principally at the Manhattan fl agship on 59th Street and in Chestnut Hill, with a smattering of design-er goods or none at other locations. Years ago, there was even a sense that Gould’s regime wouldn’t be as aggressive on the designer front as that of his predecessor, Marvin Traub. Now that seems like ancient history.

“Designer is our fourth-strongest business and running very strong,” said Frank Doroff, senior executive vice president and general merchandise manager of wom-en’s. “It’s growing faster than we thought.”

The three faster-growing categories are contemporary sportswear (said to be a $300 million business at Bloomingdale’s), followed by dresses and bridge, Doroff noted.

The Chestnut Hill opening was like a homecoming for Gould, a native Bostonian and a devout Red Sox fan who likes the intimacy of Chestnut Hill, the home of Boston College.

“This is a neighborhood store versus San Francisco, which is a colossal downtown urban store,” Gould said. “The Chestnut Hill location has been very successful for us.”

The new store is entirely stocked with women’s merchandise. It sells designer, bridge and contemporary ready-to-wear, accessories, coats, furs, special sizes, inti-mate apparel, swimwear, shoes, cosmetics, fi ne jewelry and fragrances. There is a 7,500-square-foot children’s department that feels like a separate shop yet sustains the aura of chic with an array of European imports and designer labels such as Ralph Lauren and True Religion.

Bloomingdale’s took over a former Filene’s site, gutted it except for the elevator shafts, relocated the escalators to the center of the space and modernized the en-trances and exterior. Now only Bloomingdale’s is anchoring the Chestnut Hill mall, with the women’s store on one end and a separate 124,000-square-foot home and men’s store on the other. The shopping center is small, and it’s only about a two-minute walk separating the two sites, so Bloomingdale’s anticipates a synergy.

The two stores combined are projected to generate more than $110 million in annual sales, with about two-thirds of that volume produced by the women’s store, market sourc-es said. Bloomingdale’s operates 37 units and has an annual volume of $2.3 billion.

By rearranging the real estate, “We are able to really give tremendous exposure to each family of businesses,” Gould said. “We can pick up 20 to 30 percent in some of these businesses, considering the kind of presentations they have now.”

The women’s store is running “ahead of plan nicely,’’ Gould said. He would not specify volume, but he did say the business has been led by cosmetics, shoes and contemporary sportswear, which Bloomingdale’s calls Y.E.S. The contemporary space has grown to 31,000 square feet, from 11,000 in the old space. Designer and New View, consisting of bridge merchandise and a few designer collections, occupy a total of 28,000 square feet, up from 18,000.

There has been a designer buildup in Boston and its suburbs, an area synonymous with preppy and traditional dressing. Retailers sense there may be a larger audience for designer brands and higher prices than previously believed. Last spring, Barneys New York opened a fl agship in Copley Place in the city’s Back Bay section, about 20 minutes from Chestnut Hill. Copley Place is remerchandising and bound to add designer shops. Saks Fifth Avenue is renovating its Copley Place store. Nordstrom is entering the market with

four stores in the next few years, including one in the Natick Mall, a regional pow-erhouse armed with a big budget for renovations and remerchandising to bring in higher-priced specialty shops and affl uent customers. Neiman’s is also entering the Natick Mall.

However, Bloomingdale’s has pumped up its offerings. Designer shops ring the perimeter walls of the Chestnut Hill store, such as David Yurman, which has a 30-foot-wide presence in the center of fi ne jewelry. There’s also a four-sided wall of designer sunglasses. Other standouts are the backlit, chandeliered Tahari shop and the windowed Chanel boutique. Several of the con-temporary shops, such as Diane von Furstenberg and Vince, stand out because they have large signs suspended from the ceiling, as if fl oating. Fresh fl owers are in cosmetics, and the small silver cone-shaped Christmas trees provide a restrained holi-day motif.

Armani Collezioni, Akris Punto, Michael Kors Collection, Ralph Lauren Collection, Burberry London, Tory Burch, Missoni Collection, Lela Rose and Matthew Williamson are among the other rtw designers sold. Accessories include Chanel, Fendi, Bottega Veneta, Marc Jacobs, Lambertson Truex, Marc Jacobs and Chloé. Among the contemporary lines are Diane von Furstenberg and Vince, and the

cosmetic lines include La Prairie, SK II, Lanvin and Estée Lauder.Executives believe they’ve got the jump on the competition, having developed

strong loyalty in the region after operating successfully in Chestnut Hill for decades. “We’ve been in the marketplace for 33 years,” said Pat Chadwick, Bloomingdale’s

senior vice president and Northeast regional manager. The home store opened in 1973, and fi ve years later, the fashion unit opened. She said Chestnut Hill is most like the 59th Street fl agship in terms of its breadth of designer assortments, and it has other advantages. “I think it’s easy to understand and compartmentalize and not as confusing as some stores have been accused of being.”

Aside from designer goods, new stores get fi lled with artwork and are built with wider aisles, around 25 feet, wide entrances and longer sight lines for easier navigation.

Bloomingdale’s signature black-trim frames are in many of the in-store shops, and they are particularly prevalent in the Chestnut Hill store, considered Bloomingdale’s most feminine and residential in character and perhaps its most visually appealing. There are large photo scrims depicting Boston landmarks, mannequins positioned on illuminated platforms, shiny marble fl oors, a luminous, laser-cut ceiling, a projection wall showing fashion shows, a mirrored escalator that from the side looks like a giant black X and artwork by local artists. A huge mobile hovers over the escalators.

“The whole store reads black and cream and has a lot of framed vendor installa-tions,” said Jack Hruska, executive vice president of creative services. “Chestnut Hill does have similarities to San Francisco, but it’s much more intimate, smaller and sophisticated.”

Bloomingdale’s in Chestnut Hill showcases Burberry and other designer brands.

There’s an intensifi ed designer accessory presentation at Bloomingdale’s Chestnut Hill.

Here and left: Contemporary sportswear at Bloomingdale’s

Chestnut Hill store has almost tripled in space.

WWD.COM12 WWD, FRIDAY, NOVEMBER 17, 2006

By Luisa Zargani

MILAN — Pucci will celebrate its 60th anniversary next year with the launch in February of a lim-ited-edition collection of four iconic designs from the company’s archives that were personal favor-ites of Emilio Pucci.

“There is such a strong interest for vintage, so we thought, Why shouldn’t we remake some of our original pieces ourselves?” said Laudomia Pucci, image director for the brand and daughter of the de-signer. “There is a great momentum with the new collections designed by Matthew Williamson, but we also wanted to underscore the roots of the brand and to wholly re-create the spirit of those times.”

The four pieces, originally designed in the mid-Sixties, will be launched for spring and will be labeled Collectibles: a silk jer-

sey long-sleeved dress, a cotton shantung shirtdress, a silk jersey romper and a silk twill handbag in the shape of a jewelry box. Prices range from $1,700 for the handbag to $2,200 for the Bubbles dress.

Pucci, which is now owned by LVMH Moët Hennessy Louis Vuitton, will produce from 200 to 300 units of each piece, marked with a special “Emilio Pucci — Florence, Italy” tag. In a nod to the Pucci atelier tradition, the labels will be color-coordinated depending on the fabric: green

lettering for silk items, blue for cotton items. “We’ve called back old seamstresses to use the same original techniques

my father employed,” explained Pucci, noting how each piece is identical to its archive original. Case in point: The prints are placed

on each piece so the pattern seamlessly covers the whole garment. Pucci said she chose designs that had the most meaning for her father while recapturing the spirit of those years. “The silk jersey dress marked

a sense of freedom for women, which was very important at the time, while the cotton of the chemise dress, which my father always had in his collections with different necklines, goes back to my father’s war uniforms,” said Pucci.

The jersey dress features the Bubbles print in its original beig-es, taupes and pinks and comes with an optional belt covered in a Swarovski crystal fi nish. The shirtdress is made with a blend of cot-ton and shantung, which adds a smooth sheen, with a print called Fiocchetti (little bows) and smaller fl owers in brown, black, periwin-kle and gold. The romper, said Pucci, is “a triumph of femininity,” a symbol of one of the iconic women of the time, model Verushka.

“Here is the body as a starting point, with the beach glam-our, the Mediterranean colors, the long-haired, barefoot [Pucci

woman],” she said. The two-in-one item, a shirt and mini shorts combo, features a deep V neck, slightly puffed sleeves and a double-V seaming on

the chest — a favorite of the late designer. The Chiave, or key print, is in a lavender, black and gray palette.

The collection will be available at Pucci boutiques and selected specialty stores worldwide. Each garment will have its own different package in a fl at box with a matching print lining and a label on the box indicating the reproduction date.

“What better way to mark the anniversary than with a product that can be worn?” asked Pucci, while remarking that it could also become a long-term project. “This is a beautiful homage to the history of the brand and to the vision of its founder, whose designs continue to be modern.”

Pucci Honors Namesake for 60th

By Jennifer Hirshlag

Thakoon has set its sights on the eyewear business. The ready-to-wear label designed by Thakoon Panichgul in New York has unveiled a collection of sunglasses. The collection rep-

resents the first step into the accessories category for the two-and-a-half-year-old brand and CFDA/Vogue Fashion Fund runner-up, following its collaboration with Nine West this fall on footwear, handbags and gloves.

“The collaboration with Nine West opened up this whole other world for me,” said Panichgul. “It made me crave working on other products.”

The sunglass collection, which is being pro-duced in collaboration with Italian eyewear fi rm Cult and distributed in-house, will launch exclusively with Barneys New York in February. There are plans to broaden distribution to Jeffrey in New York and Selfridges and Harrods in London, among other stores, in May. Retail prices will range from $280 to $385.

Panichgul said, for now, he is keeping the collection small and exclusive to focus on de-veloping a signature look. The debut assort-ment of fi ve silhouettes, which is expected to grow to around 10 styles going forward, re-volves around classic shapes like oversized frames and aviators that are updated through unique material treatments, like friction-bound acetates and matte metallics combined with friction-bound acetates.

“Obviously, there are a lot of retro styles that have become current again,” said Panichgul. “But I don’t want to do retro just for retro sake. We want to fi nd ways to make retro modern.”

Panichgul said he hopes to add ophthalmics to the line in the future. He is also exploring leather goods.

“We are at a point in the life of the company where we are ready to expand,” said Maria Tomei Borromeo, Thakoon’s president. “We are looking at creative ways to not necessarily dif-fuse the brand, but expand and fuel the ready-to-wear.”

Thakoon Goes Classic With Sunglasses

By Rosemary Feitelberg

Neiman Marcus is selling a piece of history by offering volumes of Jacques Fath’s sketches and three couture dresses for $3.5

million in its holiday catalogue, but how those items got there is a story in itself.

Fath died in 1954, and his widow, Genevieve, closed the house two years later, but held onto 3,488 sketches spanning from 1948 to 1956. When she was in her 90s, she turned them over to a fam-ily friend. About 10 years ago, Rita Watnik, owner of Lily et Cie, a vintage store in Beverly Hills, acquired the 26 Italian leather-bound books containing the sketches. After he had been diagnosed with leukemia, Fath, anticipating a horrible death, drew enough sketches to carry the line for two years after his death, Watnik said. The designer was in the habit of drawing the same dress from fi ve different angles, she added.

Valerie Steele, director of the Museum at the Fashion Institute of Technology, said, “At the end of the Forties and into the Fifties, Fath was the heir to Dior.

“Fath was a very interesting and intriguing person. His clothes were very beautiful and glamorous and he himself was very beauti-ful and glamorous,” she said. “To me, he was in a way like Thierry Mugler — very theatrical, very femme fatale and one of the de-signers with a cut-short story.”

Watnik, who is widely known for her vintage finds and ce-lebrity clientele such as Karl Lagerfeld, Demi Moore, Renée Zellweger and Mary-Kate and Ashley Olsen, said she received a $4.1 million offer for the Fath memorabilia not too long ago. But she declined because the inter-ested party, whom she declined to name, wanted to take apart the collection. “I thought it would be a great travesty. I would rather take way less money and make sure the buyer keeps the collec-tion together,” Watnik said.

The volumes were believed to have been lost for many years and subsequently were not featured in the “Jacques Fath Les Annes 50” ex-hibition that was held at the Palais Galliera in 1993, she said.

Unlike some of his peers, Fath kept me-ticulous archives of his sketches and illustra-tions, instead of giving them to clients who purchased the dress as was the norm at that time, Watnik said.

The Paris-based designer built a following among Greta Garbo and American sirens such as Rita Hayworth and Ava Gardner.

He also befriended Stanley Marcus after receiving the Neiman Marcus award from him in 1949 — a footnote that appealed to Watnik when mulling over whether to offer the Fath sketches to the retailer. Fath later invited Marcus to visit him and his wife at Chateau de Corbeville outside of Paris. Despite being in the midst of designing his fall collection, he welcomed the legendary retailer with a square dance, where Fath and guests such as Pierre Balmain and Jean Desses turned out in head-to-toe cowboy attire. The hoedown also gave Marcus the chance to meet Fath’s international clients.

When Neiman Marcus asked Watnik for a proposal for its holi-day catalogue, the Beverly Hills retailer said she liked the idea of putting up the Fath archives, due in part to the designer’s link to the company. Both parties have teamed up before and the retailer once approached Watnik about opening a Lily et Cie in-store shop, but she declined. Asked if it was diffi cult to decide to part with it, Watnik said: “Nothing is diffi cult to let go of if you know the condi-tions under which you are selling them are correct and good.”

A buyer might be drawn by the tax deduction incentive. “If you agree to loan it to a museum for 10 percent of any given year for 10 years, you get a tax deduction at the end of the 10 years for the full value. When you do that, the institution is responsible for conser-vation. The likelihood is they really won’t use them [due to limited gallery space]. There are also a load of economic opportunities in terms of publishing and things like that,” said Watnik.

But the $3.5 million price tag is hefty enough to make some pause. Steele, for one, will be keeping her eyes peeled to see who buys what Watnik described as “nice for a starter kit.”

But Watnik isn’t bidding adieu to all things Fath. She still owns 100 pieces of the designer’s fashion-related art, including textiles he created for scarves to give to customers.

Neiman’s CatalogueOffers Fath’s Legacy

A Jacques Fath sketch to be auctioned by

Neiman Marcus.

Genevieve and Jacques Fath square-dancing with Jean Desses, Pierre Balmain and others.

Thakoon sunglasses.

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WWD.COM13WWD, FRIDAY, NOVEMBER 17, 2006

MILAN — Fendi will inaugurate its first store in Mumbai, India, on Friday.

Silvia Venturini Fendi, accessories director and men’s wear designer, and chief executive offi cer Michael Burke will cut the ribbon on the new store, which is housed inside the Taj Mahal Hotel.

The 1,300-square-foot store replicates the look of the company’s other units, with an airy mood inlaid with dark wood fi xtures, that was designed by ar-chitect Peter Marino.

The shop will carry furs, ready-to-wear, bags, luggage, footwear, small leather goods, sunglasses and costume jewelry.

The same evening, Fendi will host a gala din-ner at the Taj Mahal Palace for some 200 guests. According to a spokesman, the party decor will refl ect the similarities between Italy and India in terms of architecture, nobility and art.

A charity auction for the National Institute of Fashion Technology of Mumbai will take place dur-ing the dinner. For the occasion, Fendi designed fi ve exclusive handbags, which are entirely hand-embroidered.

— Alessandra Ilari

By Evan Clark

WASHINGTON — Retail prices on women’s apparel fell a seasonally adjusted 1.9 percent in October, though prices are still up 0.6 percent for the year so far, the Labor Department reported Thursday in the Consumer Price Index.

Price increases in women’s apparel this year — there have been four months with at least a 1 percent uptick — indicate stores had pricing power they don’t seem to have retained in October.

“It appears from our sample that items are being clear-anced earlier than usual,” said Malinda Harrell, an ana-lyst at the Labor Department. “Normally, we show some increases, but we’re decreasing this year and we have some big sales, which is kind of early for fall and winter.”

Suits and separates, which make up about 53 percent of the women’s index, led the decline for the month with a 3.5 percent drop, while dresses were down 1.1 percent and outerwear rallied with a 2.7 percent gain.

Comparing October with a year earlier, women’s ap-parel prices advanced 1.2 percent as suits and separates posted a 2.3 percent increase, dresses were up 6.5 per-cent and outerwear fell 3.5 percent.

On the broader front, economists hoping for a sign that

infl ation had abated got what they were looking for in the October numbers.

Prices on all goods and services slid 0.5 percent and so-called “core” prices, which exclude food and energy, rose just 0.1 percent, the smallest increase since February.

“It’s good news,” said J.P. Morgan Chase & Co. econo-mist James Glassman. “It means that these infl ation pres-sures aren’t really there and an awful lot of what you’ve been seeing is related to energy.”

Headed by chairman Ben Bernanke, the Federal Reserve Board keeps a close watch on infl ation and will raise interest rates, slowing economic growth, if prices climb too swiftly.

“The fact that energy prices in particular are down and that we’re not seeing increases in infl ation else-where is defi nitely good news for holiday spending,” said Scott Hoyt, director of consumer economics at Moody’s Economy.com. “That said, we have major weights on con-sumers right now in the weakness in housing markets, slower job growth than we had six, 12 months ago, record-high fi nancial obligations and debt burdens.”

Accordingly, Hoyt predicted consumer spending over the holidays would be good, but not quite as good as the last couple of years.

Women’s Retail Apparel Prices Drop in October

HIGH TIMES: Couture may be waning, but the Chambre Syndicale continues to encourage certain ready-to-wear designers to join the high-fashion party. Boudicca, Cathy Pill and Gustavo Lins are among a half-dozen new guest members invited to show during Paris couture week in January, along with Lefranc Ferrant, Nicolas Le Cauchois and Gérald Watelet. The designers join the likes of ongoing invitees Adam Jones, Anne Valérie Hash, Martin Margiela and Richard René, according to the Chambre.

VALENTINO’S CLOSE-UP: Recent consolidation of Marzotto family shares in Valentino Fashion Group has led to increased speculation in Europe that the Marzotto clan is preparing to sell off some of Valentino FG’s assets — mainly Valentino. European press reports have cited PPR as a possible buyer. Earlier this month, PPR chairman François-Henri Pinault said for the fi rst time that the French luxury group was interested in acquisitions in Italy. Valentino’s president, however, is denying any plans to sell the Rome-based fashion house. Traveling in New York, Matteo Marzotto said a sale of Valentino was “useless fantasy.” PPR declined comment. A source close to the company said PPR was not eyeing Valentino.

THREE OF A KIND: Carolina Herrera and her daughter-muse, Carolina Herrera Jr., fl ew into Southern California last week to host two opening parties for the company’s new boutiques in the region, Carolina Herrera New York on Melrose Place in Los Angeles and CH at South Coast Plaza in Costa Mesa. Vogue and socials Crystal Lourd and Stephanie Murray joined the Herreras in hosting the soiree for the Carolina Herrera boutique on Nov. 13. The in-store event, which benefi ted breast cancer charity Couture Cares, drew actresses Ginnifer Goodwin, Gabrielle Union, Angie Harmon and Tracee Ellis Ross, as well as designer Tara Subkoff. “I always feel like Audrey Hepburn when I wear Herrera,” said Ross, who went to college with the designer’s other daughter, Patricia Lansing. “They bring back the mystery that is femininity.”

Four days later, the O.C. social set joined mother and daughter for a soiree at the CH store, honoring the Pacifi c Symphony. The boutique features framed portraits of Herrera Jr. throughout. More intriguingly, one of the store’s sales staff is also named Carolina Herrera. “There are three Carolina Herrera’s here,” the designer’s daughter exclaimed.

ALL IN THE FAMILY: Eric Bergère has gone all ages. At least, he has for Cyrillus, the family clothing chain and catalogue owned by French retail giant PPR, which tapped Bergère to design a capsule collection for women, men and children, updating its classic style. Bergère’s spring 2007 offering includes fl aring double-layer skirts for grown-ups and children alike. While designing for little ones is new for Bergère, he said the front rows of the recent Paris shows offered plenty of inspiration. “There were all these baby-doll dresses, very short,” he recalled. “Women are coming back to their childhoods.” Meanwhile, Bergère also continues to design several collections for the Japanese market, including a new line of shirts in Provençal fabrics in collaboration with Souleiado.

NIGHT VISION: Rock ’n’ roll is still alive, according to legendary music photographer Mick Rock, but he’s not so sure about its ability to revolutionize fashion in the way that it used to. “With all the information that is out there these days, everything gets absorbed too quickly,” he explained. “There’s no time for gestation.”

Rock, who cited the Yeah Yeah Yeah’s Karen O as the most fashionable woman in music today, joined Mischa Barton, Molly Sims, Piper Perabo, Jimmy Fallon, Norman Reedus and about

600 other guests on Wednesday night for a Ray-Ban party at Manhattan’s Irving Plaza. The party was held to celebrate the relaunch of its original Wayfarer sunglass.

Rock held court on the main fl oor, where he helped curate a gallery of images of musicians wearing the frames, many of which he recently took. But it was the vintage shots that fascinated Sims. “I love the picture of Bob Dylan,” she said from the second-fl oor VIP lounge.

Barton, who mixed her Wayfarers with Chanel, said that, while she loved the sunglasses, her real reason for fl ying from North Carolina, where she is shooting “Don’t Fade Away,” was to see Eagles of Death Metal perform at the event.

THE PRICE OF INSPIRATION: Since Belstaff is working on a collection inspired by Steve McQueen for the fall 2007 season, it must have seemed like a blessing to the design team when the actor’s original Belstaff Trialmaster jacket was part of an auction at Bonhams & Butterfi elds in Los Angeles. The sale, which took place on Saturday, was arranged by the late McQueen’s wife, Barbara McQueen Brunsvold. The Malenotti family, which owns Belstaff, put in a $32,000 bid, which was accepted. One can only hope that next fall’s McQueen-inspired jackets will be less pricy.

ALL BLUE: Usually, nothing would happen if three women were to wear various shades of blue-striped clothing to the same meeting. But for public relations and social gurus Vanessa Weiner von Bismarck, Carrie Phillips and Laura Woodard, the outfi t coincidence led to a brand consulting, p.r. and marketing company, specializing in the contemporary and moderate markets. Its name? Blue Stripe. The new fi rm’s offi cial start day is Dec. 1, when the trio begins working with clients such as Mike & Chris, Anlo Jeans, Dessous, Bulga Bags and AKA New York. Weiner von Bismarck and Phillips, both of whom will continue to head up Bismarck Phillips, will concentrate on development and strategic planning, while Woodard, the former p.r. director at Citizens of Humanity, will be handling day-to-day operations and client relations. Says Woodard, “We’re taking a streamlined, clean approach to developing these brands that have been largely overlooked in the past.”

GOOD GRACES: Tommy Hilfi ger is having a Grace Kelly moment in Paris. Not only did the American designer pen the introduction for a new photo book about the late Princess of Monaco, published by Editions PHYB, but he’s behind a forthcoming exhibit of 25 never-before-seen images of Kelly that belong to the Magnum photo agency. After being displayed at the Galerie 75 Faubourg from Nov. 25 to 29, six of the signed photos will be auctioned to benefi t the Princess Grace of Monaco Foundation.

SPACE RACE: Tapping into fashion’s fl irtation with futurism, French catalogue giant La Redoute is to unveil a collection by Sixties pioneer André Courrèges for spring. Dubbed “Couture Future,” the red-and-white capsule line includes swimwear, accessories and cotton basics such as a trapeze skirt and a sleeveless dress that evoke a contemporary take on Courrèges codes. Prices for the collection, to be released in early December, will range from about $40 to $200.

HIRST’S HOARD: The far-from-retiring Damien Hirst will take a backstage role for his next exhibition. The controversial artist has turned curator and will be exhibiting works from his private art collection, “Murderme,” at London’s Serpentine Gallery from Nov. 25. Called “In the darkest hour there may be light,” the show (unsurprisingly) refl ects Hirst’s predilection for the darker side of life. It includes works such as Sean Landers’ painting of a grim group of clowns at sea in a dinghy, called “Red Flag Situation,” and Andy Warhol’s “Little Electric Chair.”

A number of the exhibits, which span painting, sculpture, photography and installation, are the spoils of swapping pieces with his fellow Young British Artists Tracey Emin and Sarah Lucas as their careers were on the rise. Hirst later acquired works by the likes of Warhol and Jeff Koons when his own creations started to pay off.

Fashion Scoops

Fendi Hits India

Carolina Herrera, Carolina Herrera Jr. and Tara Subkoff.

Molly Sims and

Mischa Barton

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A Sean Landers work from Hirst’s collection.

PHOT

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WWD.COM

Wet Seal Inc. on Thursday reported a third-quarter profi t compared with a loss last year

as consumers responded positively to merchan-dise offerings through the fall season.

For the three months ended Oct. 28, net income increased to $2.4 million, or 2 cents a diluted share, which is against a loss of $6.5 million, or 14 cents, in the year-ago period.

The results included $5.6 million in noncash stock compensation expenses and $100,000 in inter-est costs. Excluding these items, income was $8.1 million, or 8 cents a diluted share. Last year’s loss of $6.5 million was due to $2.5 million in stock charges and $5.7 million in interest charges. Sales for the quarter rose 10.8 percent to $143.3 million from $129.3 million, while total same-store sales jumped 7.3 percent on top of a 46.6 percent gain last year.

For the nine-month period, the loss narrowed to $6.9 million, or 10 cents a diluted share, from a loss of $26.7 million, or $1.20, last year. Sales rose 10.7 per-cent to $397.9 million from $359.4 million.

“I am pleased with the results we achieved for both brands. At Wet Seal, our summer offering was powerful and was followed by a fall selling season that is exceeding our expectations,” Joel Waller, chief executive offi cer, said in a statement. “At Arden B., new collections provided strength in sales that we have not seen in this business for some time.”

The young women’s apparel retailer said it ex-pects a solid holiday selling season, and predicts fourth-quarter earnings in the range of 9 to 12 cents a share, including stock option expenses.

— J.P.

By Tsukasa Furukawa

TOKYO — DKNY has opened its first flagship in Japan here offering its full range of women’s and men’s wear, as well as home goods and the Pure DKNY line.

The store is located on “Cat Street,” a ris-ing fashion street that runs through upscale Omotesando and adjacent Harajuku, which are popular with young people and across the Omotesando Boulevard. It is the 22nd DKNY fl ag-ship in Asia and 55th worldwide, according to Donna Karan Japan here.

The Tokyo fl agship, designed by architect Bonetti Kozerski, features a unique facade with a huge neon DKNY logo that shines at night. The store has three-and-a-half fl oors — two fl oors and a loft-style semi-fl oor for women’s and one basement fl oor for men’s, with a total space of about 6,500 square feet.

The store is expected to bolster DKNY’s brand image as well as sales. DKNY sales in Japan are currently in the range of 7 billion yen at retail an-nually, or $60.3 million at current exchange, ac-cording to Japanese press reports, while those of Donna Karan Collection or Donna Karan New York are reportedly 3 billion yen, or $25.9 million. Both collections are sold in more than 100 outlets, most of them shop-in-shops in department stores but in-cluding two directly operated stores in Japan.

The Tokyo fl agship, modeled after DKNY’s main New York store, is designed, as one DKJ ex-ecutive put it, “to bring New York to Tokyo.”

The concept of the Tokyo fl agship as well as the products offered, it was explained, refl ect the de-signer’s philosophy of life. There is an abundance of natural things — stairs and fl oors in oak and sunlight streaming even into the basement fl oor.

Pure DKNY, which manifests the designer’s lifestyle of easy comfort, is found on the half-fl oor, and ranges from home wear and bed linens to pillows and bags, in cotton, silk, cashmere and other natural materials. The line, which has been brought to Japan for the fi rst time, is expected to fi nd a growing market here.

The fi rst fl oor is positioned as “main presenta-tion,” where the latest collection and key colors for

the season are presented. The second fl oor is for women’s collections, with half devoted to DKNY Jeans. As in the New York fl agship, there are three video screens on one wall that run images of new designs and styles. There is an artistic bench chair made of glued-together newspapers designed and produced by Belgian artist Charles Kasin. The com-plete collection of accessories — from bags and hats to eyewear and watches — also is offered. There also is a limited-edition collection of exclusive “Cat Street” merchandise that includes mouton bags.

Donna Karan Japan, which was acquired by Onward Kashiyama Co. in 1992, imports the Donna Karan New York line from the American company. Also, DKJ is the master licensee in Japan for the DKNY label and sells both locally manufactured and imported DKNY products here.

For the women’s line, skirts run about 30,000 yen, or $260 at current exchange; jackets, from 40,000 yen, or $345, to 50,000 yen, or $430, and coats, from 70,000 yen, or $603, to 80,000 yen, or $690.

The basement fl oor is exclusively for men’s wear and accessories. Oak wood stairs lead into streams of natural sunlight and past a large photo artwork of Times Square that symbolizes New York’s dynamism and energy. The fl oor presents a DKNY Men line of men’s wear and accessories, a DKNY Jeans line of men’s wear and accessories and a Pure DKNY segment of men’s wear.

14 WWD, FRIDAY, NOVEMBER 17, 2006

By Jeanine Poggi

New York & Co. Inc. said on Thursday that third-quarter earnings more than doubled,

aided by better sell-through rates and disciplined inventory and expense management.

For the three months ended Oct. 28, net income rose 130.9 percent to $9.6 million, or 16 cents a diluted share, from $4.2 million, or 7 cents, in the same year-ago quarter; the consensus among Wall Street analysts was for earnings of 15 cents a share. Sales for the quarter grew 6.5 percent to $270.9 million from $254.4 million, while total company same-store sales were up 0.5 percent, compared with a decline of 3.1 percent last year.

For the nine months, earnings fell 41.5 percent to $22.1 million, or 37 cents a diluted share, from $37.9 million, or 66 cents, last year. Sales increased 3.1 percent to $802.9 million from $778.9 million.

“Throughout the quarter our assortments were

better aligned with the desires of our customers, and this allowed us to achieve improved sell-through rates,” Richard Crystal, chairman and chief executive offi cer, said in a conference call. “Also, our new leadership design and merchan-dising has begun to impact the business positively as full-fl oor sets delivered mid-August were much improved over those of the spring-summer deliv-eries.”

During the quarter, the women’s specialty ap-parel chain launched a national marketing cam-paign featuring celebrities Ellen Pompeo and Patrick Dempsey of the television show “Grey’s Anatomy.” The retailer also opened 20 New York & Co. doors, remodeled 12 locations and opened six new JasmineSola stores.

The company expects fourth-quarter earnings in the range of 37 cents to 46 cents a diluted share. For fi scal 2006, the company predicts earnings be-tween 74 cents and 83 cents per diluted share.

New York & Co. Net Doubles

Continued from page onethe market with our Gap (Product) Red campaigns, but we know it will take several seasons of compelling mes-saging and product to rebuild our traffic,” Pressler said on the call.

In a statement, Pressler said third-quarter results “refl ect that each brand is at a different stage in its turn-around. We are pleased with the solid performance at Banana Republic and continued progress each month of the quarter at Gap brand; however, Old Navy’s results were disappointing.”

For the three months ended Oct. 28, net income fell to $189 million, or 23 cents a diluted share, from $212 million, or 24 cents, in the year-ago period. Sales were fl at at $3.86

billion. Total same-store sales de-creased 5 percent, compared with a 7 percent decrease in the same period last year.

By brand, comps were down 7 percent domestically at Gap and Old Navy and up 3 percent at Banana Republic North America. Internationally, comps declined 6 percent.

For the nine-month period, earnings were down 27.9 percent to $559 million, or 66 cents a di-luted share, from $775 million, or 86 cents a share, in last year’s pe-riod. Sales were down slightly to

$11.01 billion from $11.2 billion. “Although we believe we’ve made improvements in Old

Navy’s product and store experience over the past sev-eral months, traffi c trends unexpectedly deteriorated in October, making it diffi cult to clear fall product,” Pressler said on the call.

During a subsequent question-and-answer session with analysts, Cynthia Harris, Gap president, said the retailer is engaged in a long-term strategy. And although the Gap nameplates have “disappointed customers over many sea-sons, the third quarter showed positive indicators,” espe-cially in women’s wear.

Regarding the retailer’s earnings guidance, manage-ment originally expected full-year earnings in the range of $1.08 to $1.12 a share, based on the deceleration of sales at Old Navy in October. Since sales have continued to lag at Old Navy into this month, coupled with a slower turn-around pace at Gap brand, the company is revising its guidance to $1.01 to $1.06 a share for the year.

Shares of Gap closed down 1.1 percent on Thursday to $19.80 and continued to fall in after-market activity, shed-ding 2.2 percent in the hour after the bell rang.

One bright spot on the quarterly report was cash fl ow. Byron Pollitt, executive vice president and chief fi nancial offi cer, said on the conference call that, “despite several quarters of challenging top-line results, we have delivered healthy, free cash fl ow. Because of this, we are now com-fortable reducing our minimum cash target to $1.5 billion, and we will continue to revisit this target periodically.”

Pollitt said the company expects to “deploy excess cash according to the same three priorities we have previously outlined. First, investment in the business; second, in in-creasing our dividend, and third, for share repurchases.”

DKNY Offers Full Range in Japan

Wet Seal Turns Profi t in Third Quarter

The DKNY fl agship in

Tokyo.

Gap’s Net Drops 10.8%, Cites Sagging Old Navy

Paul Pressler

15WWD, FRIDAY, NOVEMBER 17, 2006

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