WWD Feb 5 - Wwrsd.org
Transcription
WWD Feb 5 - Wwrsd.org
DAILY EDITION 5 FEBRUARY 2016 1 Tough Times Brioni is mulling job cuts as it struggles with declining sales. PAGE 3 Fashion. Beauty. Business. Growing Pains Nasty Gal became the latest Internet darling to restructure, laying off 10 percent of The Show Goes On its workforce on Tim Coppens, John Elliott and Billy Reid were among Thursday. PAGE 11 those showing at New York Fashion Week: Men’s. PAGES 4 TO 7 Burberry’s Bold Move ● In what could be a game-changer, men’s and women’s collections will show together twice a year — and be available instantaneously afterward. BY SAMANTHA CONTI LONDON — As the industry debates the future of seasonal fashion, buy-now-wear-now collections and direct-to-consumer shows, Burberry is short-circuiting the conversation and radically changing the way it does business. Come September, the $7.54 billion company plans to show seasonless men’s and women’s wear collections together, on the runway, twice a year. In addition, it will make all the collections immediately available online and in-store. Window displays in its stores and media campaigns will change the moment the curtain comes down on the catwalk. Burberry’s shift could be the snowflake that begins an avalanche of change as designers, retailers and fashion organizations debate the overheated fashion system; the future of shows; social media; the growing move to mobile and e-commerce shopping from brick-and-mortar, and how to energize a consumer who seems gripped with ennui when it comes to fashion. “We have designers, retailers and everybody complaining about the shows. Something’s not right anymore because of social media, people are confused,” Diane von Furstenberg, chairman of the Council of Fashion Designers of America, told WWD in December. “We have some ideas. Everyone seems to feel that the shows being consumer-driven is a very good idea.” The CFDA is awaiting an analysis from Boston Consulting Group on the viability and logistics of consumer-oriented fashion weeks. Over the past few months, a host of designers – including Tom Ford, Giles Deacon, Matthew Williamson, Misha Nonoo, Thakoon Panichgul and Rebecca Minkoff — have CONTINUED ON PG.12 3 5 FEBRUARY 2016 BUSINESS Brioni Faces Struggles, Job Cuts Ahead TOP 5 TRENDING ● The company is rationalizing its workforce at the manufacturing plant in Penne, Italy. BY LUISA ZARGANI MILAN — Brendan Mullane’s sudden departure from Brioni as creative director earlier this week may have signaled larger turmoil at the Italian men’s wear brand. The company is rationalizing its workforce at its manufacturing plant in Italy’s central town of Penne and industry sources indicate Brioni is seeing a drop in revenues, mainly at wholesale, due to an increase in prices that customers are reluctant to accept. A Brioni spokesman confirmed the impending layoffs, saying that “in agreement with the unions a voluntary mobility procedure was put in place in the end of 2015. Further discussions are scheduled to take place in the next months with the specific aim to reach an accurate size of the production capacity at the factory.” According to market sources, the company asked for at least 50 employees in December to agree to voluntary mobility, and 60 complied. One source said consultancy AlixPartners has identified that 200 jobs could eventually be at stake as part of a restructuring of the plant’s operations. “Fixed costs have spiked too much, the head count is too high also at the managerial level. A downsize could come through either a restructuring operation or a decrease in head count, and the latter seems more likely,” alleged a source, noting that the discussion could also lead to a job security agreement whereby employees work less hours to help maintain the same number of workers. AlixPartners was also called in to analyze issues at Sergio Rossi before the Italian footwear brand was sold to European investment house Investindustrial last year. Kering controls Brioni and was Sergio Rossi’s former owner. One source underscored that there is “some confusion and the intentions are not quite clear” regarding Brioni. Kering said it does not comment on market rumors. A look from Brioni’s fall men’s line. Asked to explain the reasons behind the struggles, one industry observer pointed to three possible missteps. In 2012, Brioni tapped Mullane — who had worked at Givenchy, Hermès, Louis Vuitton, Burberry and Alexander McQueen — as creative director with the aim of adding more fashion to the brand, but this created confusion in the market. Known for its high-end tailored suits, Brioni has increasingly been developing categories such as outerwear and sportswear, footwear and accessories, also targeting a younger customer. “Brendan did not have the time to turn the brand into a really cutting-edge one, but the product was no longer about being tailor-made,” said one analyst. “Customers and buyers alike don’t recognize the positioning and prices are not competitive,” said another observer, pegging suits at an entry wholesale price of 2,000 euros, or $2,192 at current exchange. Also, in an increasingly tough business environment, hiking wholesale prices made it “no longer interesting” for multibrand retailers to carry the label, especially in Europe, the first source said. A Milan-based analyst said revenues last year dropped by 20 million euros, or $22.2 million at average exchange rates, to 190 million euros, or RETAIL Hackers Nabbed After Targeting Alibaba’s Taobao ● The attack, which reportedly took place in June 2015, hit a database of almost 100 million usernames. Brioni photograph by Giovanni Giannoni; They Are Wearing by Don Stahl BY CASEY HALL SHANGHAI — Hackers have attempted to access the accounts of millions of users on Taobao, China’s largest consumer-to-consumer e-commerce marketplace, which is owned by Alibaba Group Holding Ltd. The hackers obtained a database of almost 100 million and usernames from multiple Web sources; more than 20 million of these usernames were being used for multiple platforms, including Taobao accounts. “They rented AliCloud to do what’s known as ‘mapping,’ the process of pulling a bunch of account names and honing down to a part group that is relevant, in this case, the Taobao platform. While they were doing this, they were detected and subsequently reported to the police,” an Alibaba spokesman told WWD. In responding to initial reports, Alibaba was quick to emphasize that the attempt was a common occurrence in the industry, and the issue was not specific to the company’s cloud computing arm, AliCloud, as the culprits could have used any cloud computing service to do the same thing. “The crooks were pretty dumb to use AliCloud to do the mapping,” said a Shanghai-based programmer and expert on cyber security, who requested anonymity. “It is very easy to detect the mapping — the repeated attempts to go to each user’s name when it all comes from a single place.” When the hackers tried to access Taobao user accounts, even if they matched usernames and passwords, they had already been blocked by Alibaba’s security. Local authorities have since detained those responsible for the attempted hack. Taobao, a site often compared with eBay, has more than 500 million registered consumer accounts and commands an 80 percent share of China’s consumer-to-consumer market, according to Alibaba’s own estimates. Alibaba has recently signaled its seriousness about expanding its cloud computing business, known as AliCloud, more aggressively in 2016. Last month China’s tech giant revealed plans to enlist 1,000 developers to work on its big-data platform over the next $211 million, attributable to the struggles at wholesale, and claimed the firm was operating at a loss with negative earnings before interest and taxes. One source remarked on the diminished spending power of Russian consumers as being relevant in light of the brand’s successful history in that region. Lastly, wrong investments in human resources were also to blame, alleged the source. Kering, which was then called PPR, finalized the acquisition of Brioni in January 2012 at a moment of explosive growth in the men’s wear business. Brioni appealed to PPR because of its know-how in tailored men’s wear, exclusive positioning and international visibility. PPR chairman and chief executive officer François-Henri Pinault stated a few months earlier that a push into accessories and expansion in the burgeoning Asian market were key avenues for growth at Brioni. The Italian brand had initiated a search for a buyer in 2008 and a need for an injection of cash became a priority at the time of the sale, as it was weighed down by a debt resulting from the company’s buyout in 2006 of former ceo Umberto Angeloni for an estimated 80 million euros, or $104.8 million at average exchange rates for that year. In his 16 years at the company, Angeloni was instrumental in building Brioni. The executive is now chairman, ceo and majority shareholder of luxury Italian tailoring brand Raffaele Caruso SpA. At the time of the PPR acquisition, Brioni was controlled by the descendants of the company’s founders — Nazareno Fonticoli, the master tailor, and Gaetano Savini, the original fashion coordinator. Based in Penne, Brioni has for years dressed fictional character James Bond in the film franchise, at times replaced by Tom Ford’s label. Its handmade men’s suits have been worn by the likes of John Wayne, Clark Gable, Barack Obama and Matt Damon. Brioni had tapped Alessandro Dell’Acqua as creative director of the women’s line in 2010 to raise the women’s division’s profile, but that operation was shut down in 2011. In fall 2014, Kering tapped Bottega Veneta executive Gianluca Flore as Brioni’s new ceo, succeeding Francesco Pesci who had been with Brioni for almost 15 years, and who is now ceo of Peuterey. Taobao has more than 500 million registered consumer accounts. ON WWD.COM They Are Wearing: New York Men’s Fashion Week, Fall 2016 ● WWD went off the runways and onto the streets and sidewalks for the best looks from New York Fashion Week: Men’s. ●John Elliott Men¹s RTW, Fall 2016 ● Pre-Fall 2016 Accessories: Part 3 ●Greg Lauren Men’s RTW, Fall 2016 ● Tim Coppens Men’s RTW, Fall 2016 Global Stock Tracker As of close February 4, 2016 ADVANCERS Coty Inc. +15.24% Avon Products Inc. +9.54% Trinity Ltd. +8.60% Safilo Group SpA +3.51% Iconix Brand Group +2.94% DECLINERS three years. AliCloud is planning to invest $1 billion to compete with Amazon.com Inc. in computing services, as well as to keep up with their own information processing needs, which continue to grow as China’s e-commerce market grows. Cloud computing services have proven to be one of Amazon’s fastest growing businesses and have become a huge contributor to the U.S. Web giant’s profits. Bain & Co. estimates China’s online retail market will grow to 10 trillion yuan, or $1.5 billion, by 2020. Ralph Lauren Corp. -22.16% Kohl’s Corp. -18.80% L Brands Inc. -6.93% Nordstrom Inc. -6.13% Kose Corp. -5.12% 4 5 FEBRUARY 2016 The Reviews Tim Coppens Each season, Tim Coppens has been slowly moving beyond his athletic roots and toward more traditional references. However, his obsession with the young continues. “I feel more comfortable about what I do,” he said, “less contrived and constricted.” For his fall collection, Coppens showed this spirit by taking references from Eighties, Nineties and Aughts youth culture and interpreting them in tartan plaid bomber jackets, printed hooded sweatshirts and pajama shirts with pixilated graphics of spaceship video games. An elegant array of military topcoats - the showstoppers - along with utilitarian jackets and peacoats offered a more sophisticated and retail-friendly side. The women’s effort was equally strong, with A-line, bonded leather skirts styled with bombers worn over hoodies. Although the Tim Coppens girl is youthful, the pieces appealed to a sophisticated customer who’s looking for special items. Coppens also showed his business-savvy by revealing that several of the pieces in the show would immediately be available for sale on his Web site. With this collection, Coppens vaulted near the top of the leader board of New York Fashion Week: Men’s. — Jean E. Palmieri John Elliott John Elliott is experimenting with his dark side. Although the collection started with a few monochromatic white looks, it quickly turned more somber. “We’ve told the story about movement and athletics, but this is about friction and the uncertainty that exists at night,” he said backstage before the show. Fall Collections 2016 Tim Coppens John Elliott The largest chapter in Elliott’s new story came through the use of a novelty wool bonded with aluminum that worked best in heavyweight bombers, pants and shorts. Other protective elements felt more familiar, including his traditional layering techniques, military references and relaxed silhouettes. A good example was a parachute jacket worn over a shearling hoodie and an elongated distressed T-shirt. Another standout was a leather patchwork poncho paired with aluminum shorts and textured tights with a chunky scarf. Elliott said he had three goals for the collection. “If I can come up with a challenging concept, create different silhouettes and put them in unique fabrics, then I’ll be able to sleep at night.” Sleep tight, John Elliott. — J.E.P. 5 5 FEBRUARY 2016 Billy Reid Orley After several seasons of intricate textile development, Billy Reid simplified things for fall, turning out a relaxed elegant collection. “I wanted things to be uncomplicated luxury,” he said backstage before his show. “We develop so many textiles, sometimes we let the art overshadow the message.” Reid’s sense for volume and proportion remained, as evidenced by lightly constructed topcoats with a flowy sense of movement. A boxy suit with wide-leg pants reinforced the slouchy message and felt trend-right. Some new things this season were a few technical pieces such as a fully waterproof trench, worn inside out, and a “butter soft” nylon rain jacket. The neutral color palette felt rich and helped reinforce the luxe message. Less is more when it comes to Billy Reid, and concentrating on the soft silhouette and sophisticated volumes was a winning combination. — Jean E. Palmieri Orley is no longer just a sweater brand. The team, which is made up of brothers Alex and Matthew Orley and Matthew’s wife Samantha, still consider knitwear the foundation of their line, but for their fall collection, they layered on new elements that gave the line some breadth, just in time for their first seated runway show. There are the tailored, pleated and printed knits, which added a dose of adult to the brand’s youthful aesthetic. Alex said their guy (and girl) is stronger this season, but they haven’t veered too far from their androgynous roots, which were on full display at their previous spring presentation. Backstage before the show, Alex said one of Orley’s tenets is to combat machismo. The men wore shrunken sweaters with subtle peplums and knit polos covered in a floral print. These looks were offset with punky Chelsea boots. Other grunge undertones came through in a deconstructed, hand-knit sweater. One of the most impressive pieces was a navy mohair jacket that appeared as if it were shearling. Orley’s nascent women’s lineup was also shown. Alex said the category is growing rapidly — it’s sold at Barneys New York and Ikram in Chicago and its sales are comparable to men’s wear. Women’s-wise, the show started relatively cautiously with what could be best described as boyish looks for girls as a counterpart to the girlish stuff for guys. But there was zesty development that will delight novelty knitwear enthusiasts and anyone who just likes pretty sweater dressing in shades of berry, pink and blue. Fuzzy mohair jackets looked remarkably like luxe shearlings. A pair of wallpaper-ish printed dresses layered over contrast pleated skirts — all knits — made for strong but not overwhelming optical interest. A pink ribbed cashmere vest over a matching, slinky skirt was a cozy crowd-pleaser. The Orley family has already proved adept at manipulating knits and bringing some excitement to the category, but this season they showed their ability to produce a grown-up, retail-friendly wardrobe that speaks to their original sensibilities. — Aria Hughes and Jessica Iredale Fall Collections 2016 Billy Reid Orley Calvin Klein Collection Eveningwear Calvin Klein Collection Eveningwear Capsule With awards season in full swing, designers know the red carpet is the ultimate runway show, and Calvin Klein’s Italo Zucchelli is ready to seize the opportunity. He showed a capsule collection of modern eveningwear that was designed to “coexist” with his mainline collection, shown last month in Milan. The mainly black offering was embellished with gold and silver panels on lapels, pockets and plackets that appeared on tuxedo blazers and sharply tailored topcoats. Although the collection was elegant, it was toned down by pairing the evening blazers with skintight long johns and the introduction of gold- and silver-coated denim. “Hopefully you’ll see it in the stores and on the red carpet,” Zucchelli said. — J.E.P. 6 Timo Weiland One can trust the team at Timo Weiland (Donna Kang, Timo Weiland and Alan Eckstein) to make cool clothes for a creative class of consumers, but this season they raised the bar. Backstage before the show, Eckstein cited the brand’s usual points of reference — New York City and music from the Sixties — but emphasized a turn to more tailored pieces. Wide leg and narrow trousers were styled with matching blazers, which were worn over zip-up sweaters with chevron. Bomber jackets came in a gingham velvet and wool tweed. A European influence was felt with the playful berets and woven T-shirts. These pieces came in an energizing color 5 FEBRUARY 2016 palette — mashed-up cherry red with maroon and cobalt with kelly green. What really elevated the line was the outerwear, which ranged from a plaid peacoat, which closed the show, to a wool car coat. Similar to the men’s offering, the women’s looks were more refined than usual, with fluid wide-leg pants, tailored coats and a wrap skirt worn as a top. It was a concise, grown-up collection for the brand and a welcome move forward. — Aria Hughes Eidos Eidos pushed the sportswear envelope for fall. “The vibe is more casual and slouchy,” said designer Antonio Ciongoli during the brand’s presentation in SoHo. In his ongoing search for effortless elegance, Ciongoli drew from mid-Thirties men’s wear silhouettes for many of his pieces. Clear examples included high-waisted pleated pants with a built-in military belt and a belted trench with no buttons. Other military elements made an appearance in the lineup of the brand, a division of Isaia, in World War II Japanese paratrooper pants and a vintage French military pullover paired with drawstring pants. The collection was mostly consistent but a flannel pin-stripe suit seemed a bit out of place. It also would have benefited from a wider exploration of the Fall Collections 2016 Timo Weiland Eidos theme and a deeper variety within the classifications. — Alex Badia Hickey Freeman In a marked departure from the layered, streetwear-inspired aesthetic that was so prevalent at New York Fashion Week: Men’s, Hickey Freeman showcased a collection of updated — and superluxurious — tailored clothing. Chief creative officer Arnold Brant Silverstone took over a townhouse in SoHo to create the world of Hickey Freeman. The collection was broken down into three sections, all with distinct, yet complementary sensibilities. Highlands was Silverstone’s take on the Scottish countryside, but interpreted in a New York way. There were suits in exploded plaids and houndstooth, tuxedos in forest green, and dinner jackets in paisley jacquard. “It’s an English look but for today’s customer,” Silverstone said, pointing to the fuller pleated pants in the suits. The Strand was the brand’s Wall Street-skewed grouping, with reinvented business suits in a range of new blues, accessorized with the same forest green. “We’re opening a new store at Brookfield Place in lower Manhattan in a few weeks,” Silverstone revealed. The final section, Greenwich was “where the sky’s the limit,” he said. The grouping included a cashmere overcoat with a vicuna collar; a Yangir cashmere topcoat with cashmere joggers; a cotton-cashmere corduroy suit, and “a jogging suit in cashmere, if you want to jog in cashmere,” he said with a chuckle. All in all, Silverstone delivered an elegant and elevated take on a venerable American brand. — Jean E. Palmieri Hickey Freeman 7 5 FEBRUARY 2016 Craft Atlantic Craft Atlantic can always be counted on to showcase a clean and minimal brand DNA, and this season was no exception. For fall, Luis Fernandez presented a collection that centered around classic men’s wear staples but with his usual tech spin play on fabrication and construction. Clear examples were a storm system jacquard wool bomber jacket, a waterproof plaid M-65 jacket with a Prince of Wales inset and pinstripe knit joggers with Japanese ribbing on the waist. While the nature of the offering was simplistic, Fernandez knows how please the man who is always on the go. — Luis Campuzano Devon Halfnight Leflufy In Antwerp, it’s about maximalism, and now I feel the urge to refine it,” said designer Devon Halfnight LeFlufy, who showcased a “gender-fluid” collection that included a twisted deconstructed take on everyday wardrobe essentials. Leflufy incorporated into his designs recycled patchwork leather, an abstract circuit board jacquard print ensemble, meshlike elongated shirts created from wires and crocheted iPhone cables. In what feels like a less hard approach from his presentation last season, Leflufy’s view seemed more like a happy medium between retro and futuristic. — L.C. Rochambeau The Rochambeau fall collection took inspiration from the Nineties. Filled with oversize outerwear in epic proportions, designers Laurence Chandler and Joshua Cooper offered military ponchos, varsity fleeces and puffer vests with wide-leg shorts paired with socks and Nike Air Force One sneakers. Fortunately the brand shied away from its previous gloomy goth pieces and rejoiced in rich and vibrant colors of cream, navy, orange and brown. Blends of corduroy, nylon with velour tied into the retro theme. “We felt the layering and bigger fits from the film ‘Juice’ featuring Tupac Shakur was the story we wanted to tell,” Chandler said. Highlights included a hooded orange anorak with an embellished elbow patch, and an elongated turtleneck paired with a front patch pullover that exemplified the oversize layered effect. While its roots in streetwear remain evident, Rochambeau continues to elevate its offering by adding a new dimension and modernizing the trends of the past with modern fabrics. — Frederick Marfil Kenneth Ning Departing from his colorful and outrageous prints of last season, designer Kenneth Ning focused on a dark palette this time around. Titled “Revenge,” Ning’s line offered graphic capes, long mac coats with black and metal grommets, and burgundy bomber jackets, perhaps as a revolt against the traditional men’s wear tailoring. Jacquard wool and rayon fabrics were found throughout and some jackets had raw edges which, according to Ning, were purposely left that way. “My biggest clients are from Japan and they love to take risks,” said Ning, who has previously designed for Calvin Klein and Michael Kors. While the collection is wearable for the eccentric, several pieces — such as the jackets with metal grommets and oversize zippers — looked too conceptual and unfinished. — F.M. Ricardo Seco Ricardo Seco New York City-based designer Ricardo Seco continued to channel his Mexican heritage for his fall collection. Entering its ninth season, the collection, entitled “Time,” showcased black turtlenecks disrupted by an array of vibrant patterns and fluorescent pops of color that broke up the monotonous aesthetic. “The serape is a 500-year-old traditional garb that I chose to focus on this season,” Seco said. The focus garment may be of ancient origin, but the collection still managed to speak to the downtown consumer while maintaining a fiery beat. — F.M. Kenneth Ning Fall Collections 2016 Craft Atlantic Devon Halfnight Leflufy Rochambeau 9 5 FEBRUARY 2016 THE MARKETS Ralph Lauren Eyes Change as Shares Fall ● Stefan Larsson will disclose his multiyear growth strategy for the company in the spring. BY VICKI M. YOUNG If 2015 was a year of transition, 2016 is a year of change at Ralph Lauren Corp. President and chief executive officer Stefan Larsson, in a conference call to Wall Street analysts after the company posted mixed third-quarter results, said he’s working with the team in conducting an inclusive review of the company’s operations. He said the assessment and the company’s multiyear growth strategy will be completed in the coming weeks and months, and he would share those findings with Wall Street in late spring. While the development of the growth strategy is good news, it did nothing to mitigate investors’ reaction either to third-quarter results or to the company’s cut in fiscal 2016 guidance. The company beat on profit forecasts, but missed on the revenue front. Investors sent shares of Ralph Lauren down 22.2 percent to close at $89.95 in trading on the Big Board. The company adjusted guidance for fiscal 2016. It expects consolidated net revenues to be up 1 percent in constant currency and down 3 percent on a reported basis. The prior forecast estimated flat net revenues on a reported basis and up 3 to 5 percent in constant currency. For the fourth quarter, the company guided consolidated net revenues to be flat to down 2 percent on a reported basis. For the three months ended Dec. 26, net income fell 39.1 percent to $131 million, or $1.54 a diluted share, from $215 million, The Ralph Lauren store at South Coast Plaza. or $2.41, a year ago. On an adjusted basis, excluding certain charges such as restructuring costs, net income was $193 million, or $2.27 a diluted share. Wall Street was expecting earnings per share of $2.13. Net revenues slipped 4.3 percent to $1.95 billion from $2.03 billion. Wall Street was expecting revenues of $2.03 billion. By category, wholesale net sales fell 6.1 percent to $786 million, while retail net sales dropped 3.1 percent to $1.11 billion. Consolidated comparable store sales fell 7 percent, and were down 5 percent on a constant currency basis. Like other fashion companies, warmer temperatures in the U.S. hurt sales of cold weather apparel and accessories, such as outerwear and boots. Macro trends going into the fourth quarter include strong sales of denim and the ath-leisure categories, according to Christopher H. Peterson, president of global brands, in a telephone interview. He also said the company plans to reduce the inventory buy at the wholesale and retail channels. Peterson said that is part of a “broad strategy” the company is embarking on for fiscal-year 2017 to reduce the amount of product being sold on promotion “as a way to strengthen the brand.” He also said “[o]ur retail partners are very much in sync” with the company’s strategy. Ralph Lauren, executive chairman and chief creative officer, referred to 2015 as the “year of transition.” He also said: “While our recent results have been disappointing, I am greatly encouraged by the changes that are already taking place since the appointment of Stefan Larsson as our new ceo. He has my full support as he conducts his comprehensive review of our business and takes the lead to move us forward.” Larsson, who began in November, spoke to analysts about his first 90 days on the job. “I have done a lot of travels. I have been to London, Paris, Geneva, Frankfurt, Tokyo, Hong Kong, Shanghai, Beijing and all over the U.S., including our distribution center in North Carolina.…In many of these meetings, I received direct feedback from team members and customers,” Larsson said. The ceo said the goal of the traveling and meetings was to learn as much as possible about the brand and the environment it competes in. He explained that the review goes beyond the cost savings plans initiated before he joined the company, and covered “value creators in the business from brand, product, marketing, to supply chain distribution, geographies, as well as customers and competitors.” Larsson, who described the performance of the business as “very disappointing” and said the “challenges we are facing did not materialize overnight,” provided analysts with insight on the kind of deep dive his team is eyeing in the overall review. He said for each brand, it starts with an analysis on how to build authenticity, evolve the brand in a way that its DNA stands out and how to balance the assortment. The team is also looking at how to shorten the lead times as they relate to supply chain and inventory management. One key question that needs to be answered, he said, is “relating to the increasingly disruptive environment we are in. How do we strengthen the brand and develop the business model fast enough to succeed in an increasingly disruptive world?” Larsson also told analysts there are two main components to the “plan framework.” The first involves strengthening the customer component, which includes product offerings, marketing and the shopping experience. The other is “to radically strengthen the underlying business engines. These engines will include developing a systematic, repeatable way to creating a stronger assortment and [a] more demand-driven supply chain and a holistic global expansion strategy.” The ceo concluded: “It is complex work that will take time. We will show you the pacing through the plan we will present in late spring and we will show progress every year.” RETAIL J&M Davidson Opens New London Flagship ● Marking its 30th year, British brand J&M Davidson has opened a new flagship on Mount Street in London’s Mayfair. BY JULIA NEEL LONDON — Marking its 30-year anniversary, British brand J&M Davidson has opened a flagship on Mount Street here. “We are overwhelmed to be returning to the place where it all began for us decades ago,” said John Davidson, who founded the brand in 1985 with his wife Monique. “Many don’t realize we actually used to create pieces in Mayfair above the Medici Gallery in the Eighties. We fell in love with this building as soon as we saw it — its charm seemed to mirror what we try to create in our pieces, so it’s a natural home for us to be.” The couple were inspired by Edwardian themes and the works of John Singer Sargent for the store, which sits over two floors and across 850 square feet. Bouquets of light pink roses are dotted throughout the pale-carpeted space, the focus of which is an impressive, cantilevered staircase with treads cast in solid terrazzo marble and a leather-wrapped handrail that leads to the basement floor. The Davidsons worked with Universal Design Studio, a London-based architecture and interior design practice, on the fit-out, and tapped Nicholas Chandor to source bespoke pieces of furniture. Handbags, accessories, ready-to-wear collections, shoes and small leather goods are all stocked, and there are some exclusive Mount Street product offerings. At the store’s party to mark its opening, Daisy Lowe and Harriet Verney took turns on the DJ decks, while guests including Zara Martin, Zafar Rushdie, Jasmine Hemsley and Bip Ling had wallets monogrammed in gilded letters. This is the brand’s third stand-alone store, with a headquarters-cum-shop on Golborne Road in Notting Hill and a flagship in Aoyama, Japan, where J&M Davidson has its strongest following. The new store coincides with a new direction for the label — but don’t call it a relaunch. “I wouldn’t say we are relaunching the brand, more refreshing it,” explained John Davidson. “While we are a timeless brand, we know it’s key to innovate, especially at a time when markets are so dominated by technology and influencer marketing. [The year] 2015 saw us celebrate our 30th year in business, so it seemed a really natural time to reassess and to start to spend more time and focus back in the U.K., following lots of The interior of the J&M Davidson store. international work, particularly in Japan.” This reinvigoration is owed to an investment from Yagi Tsusho, a Japanese marketing and merchandising company that imports and exports fashion and accessories, as well as food, fabrics and yarns. For a decade, the Davidsons have worked with the company, which was originally the sole importer and distributor of J&M Davidson in Japan and made a considerable contribution to the brand’s growth in the Japanese market at the Aoyama flagship and the department store concession business. When John and Monique Davidson met on a Spanish beach in 1969, John was working as a photographer in Brighton and Monique had been a designer in Paris. Their brand was born when Monique picked up a studded dog collar in a market and remarked that it would look good as a belt. They tracked down the factory and started making belts in bridle leather. Handbags and wallets followed, and rtw was launched in 1994. After 40 years of marriage, they still work together every day and show no signs of slowing down. Quite the opposite — they have their sights set on further flagship openings across the globe. “Our ambition, like any passionate designer, is to launch more stand-alone stores,” said John Davidson. “Given Monique’s background, launching in Paris would feel a natural lead-on. We’ve also had really positive feedback from the States and Hong Kong, so watch this space.” 10 5 FEBRUARY 2016 BEAUTY Beauty Firms in Transition See Stocks Jump ● While some of the top companies are in flux, they’re also making moves and keeping bottom lines afloat. BY WWD STAFF Quarterly results from some of the top beauty companies revealed a sector that is in transition. At Coty Inc., the company’s second-quarter results were hamstrung by hefty expenses due to acquisitions-related restructuring costs, but top- and bottom-line results were better than Wall Street estimates. For Elizabeth Arden Inc., currency headwinds continued to impact business, but the company’s work on transforming itself is paying off as it narrowed its loss in the second quarter. Meanwhile, at Sally Beauty Holdings, initiatives aimed at bolstering gross margins and strengthening same-store sales buoyed its bottom line. Traders celebrated the results with shares of Coty finishing the day with a 15.2 percent gain to $28.36 while Sally Beauty closed up 13.1 percent to $30.13. Elizabeth Arden’s results were after market, but shares finished up 1.5 percent at the bell to $8.02. For the second quarter ended Dec. 31, Coty reported a 29 percent dive in net income as the firm swallowed higher expenses. Revenues dropped 4 percent to $1.2 billion, a 4 percent decrease. Gross profits came in at $742.8 million for the quarter, down from $750.7 million in 2014. On an adjusted basis, net income attributable to Coty fell 17 percent to $135.8 million, and adjusted earnings per share were 38 cents for the quarter, and 98 cents for the six-month period. Results reflect the cost of the deal spree Coty has undertaken and the organizational restructuring those acquisitions have spurred. For the six-month period, Coty incurred $72.7 million in restructuring costs, mostly from its acquisition integration program and $64.9 million in acquisition-related costs. Of those charges, $1.1 million was related specifically to the acquisition of cosmetics brand Bourjois, which the company added in April. Coty is working to rationalize non-strategic product lines and businesses, something Chloé Eau de Parfum it will continue to do after it closes the deal for 41 beauty brands from Procter & Gamble, said Bart Becht, the company’s chairman and interim chief executive officer. That process includes removing lines from certain channels. Selling nail polish line OPI in hardware stores, for example, “is probably not the smartest thing we could do,” Becht said. The business has been involved in a handful of deals — inking a licensing agreement with Tiffany & Co. and making other acquisitions. Aside from the Bourjois and P&G deals, Coty added digital marketing firm Beamly and closed a $1 billion deal for beauty brands from Brazil-based Hypermarcas on Feb. 1. The Hypermarcas transaction gives Coty infrastructure, including manufacturing, logistics and management capabilities that it didn’t have in the region, Becht said. The P&G transaction is slated to close in the latter half of 2016, and has received U.S. regulatory approval. The deal still requires approval from European regulators. Coty was originally slated to buy 43 brands, but Dolce & Gabbana fragrances and Christina Aguilera Perfumes did not consent to the transaction. Becht declined to provide further insight into the P&G brands, but said the company would file paperwork with the Securities and Exchange Commission that would give a clear picture of the businesses in mid-April. Color cosmetics had net revenues of $374.8 million, a 10 percent increase from $340.5 million in the year-ago period. Coty’s fragrance net revenues were $627 million, down 9 percent from $691.7 million year-over-year. Skin and body care was also down, bringing in $208.7 million in net revenues from $227.4 million in the year-ago period, an 8 percent decline. Growth in color cosmetics revenue was offset by revenue declines in fragrance. Color cosmetics net revenues were up, driven by Sally Hansen and Rimmel. In skin and body care, the company reported growth for Adidas and Philosophy, but the category was pulled down by lower net revenues from Playboy. At Elizabeth Arden Inc., net sales for the second quarter fell 5.2 percent to $316.2 million from $333.6 million in the same period last year as the loss narrowed to $5.6 million, or 19 cents per share, from $56.8 million, or $1.90. At constant currency, sales dropped 1 percent. And the adjusted earnings per share came in at 10 cents. Management said in the quarterly report that results are “in line with the company’s internal plans, and its business transformation initiatives continue to drive down costs and improve efficiencies.” The company also said it was ahead of plan in “achieving its cash flow budget.” Regarding efforts to cut costs, management said it was on track to “achieve or exceed the high-end of its previously communicated estimate of approximately $47 million to $50 million of annualized savings.” By region, Elizabeth Arden’s net sales rose 9 percent in Europe and 18 percent in China. The company said it was restructuring the leadership team in China “to improve the capability in this priority market. The company’s joint ventures in Southeast Asia and the Middle East are also now fully operational and focused on accelerating sales.” The company noted that sales of Elizabeth Arden-branded products rose 3 percent, “with growth driven by higher fragrance and skin-care sales,” increasing by 8 percent and 2 percent, respectively. Non-Elizabeth Arden branded fragrances fell by 4 percent while net sales of the designer fragrances increased by 7 percent “during the period behind strong momentum in the John Varvatos fragrance brand and growth in Juicy Couture fragrances, but were offset by lower sales of celebrity fragrances.” For Sally Beauty Holdings, first-quarter net sales rose 3.5 percent to $998 million from $964.5 million — which beat the FactSet estimate of $990 million. Net income dropped 23.1 percent to $42.2 million, or 28 cents a share, from $54.9 million, or 35 cents, in the same period last year. On an adjusted basis, earnings rose 16.4 percent to $65.9 million from $56.6 million in the prior year. Earnings per share were better than the FactSet estimate of 36 cents. “We are off to a solid start for fiscal year 2016,” stated Chris Brickman, president and chief executive officer. “We drove same-store sales improvement in our Sally business, and our BSG business continued to grow sales and gain channel share. In addition, implementation of our pricing and margin improvement initiatives resulted in gross profit margin expansion consistent with our previously stated guidance.” Consolidated gross profit for the fiscal 2016 first quarter was $494 million, an increase of 4.3 percent over last year’s gross profit of $473 million for the same period. Sales growth was driven by same-store sales growth and net new store openings. First quarter same-store sales growth of 3.9 percent easily topped last year’s growth of 2.3 percent. Sally Beauty took selective price increases in certain parts of the country and fewer discounts in this quarter versus the last quarter. The store count increased by 106 over the fiscal 2015 first quarter for a total store count of 3,711. RETAIL Study: Online Ratings and Reviews Matter ● Two analysis centers offered ratings and consumer reviews to gauge their influence on purchase decisions. BY SHARON EDELSON Are online and mobile consumers swayed by a multiple stars and glowing product reviews? PowerReviews and Northwestern University’s Medill IMC Spiegel Digital and Database Research Center studied ratings and reviews to better understand their influence on purchase probability. First and foremost, the study concluded that ratings and reviews are one of the top factors impacting purchase decisions, second only to price. When it comes to ratings, star power only goes so far. A rating between 1 and about 3 stars has little effect on the sale. When the star rating surpasses 3, the likelihood of purchase rises. Consumers are more likely to purchase a product with a 4-star rating than one with 3 stars. But, propensity to purchase peaks with an average rating of between 4.2 and 4.5 stars. After 4.5 stars, the likelihood of purchase dips. It seems that consumers don’t trust a perfect 5 rating, believing that it’s simply too good to be true. Northwestern’s researchers analyzed data from multiple e-commerce websites, including 22 product categories with a total of 111,460 stockkeeping units. While is seems counterintuitive, negative reviews can have a positive impact because they help establish trust and authenticity, the study said. “Consumers understand that a product can’t be all things to all people, and they appreciate negative reviews as an important element in their decision-making process,” the study said. “Previous PowerReviews research found that 82 percent of shoppers specifically seek out negative reviews.” The ideal number of reviews varies. The Northwestern research team found that the ideal number of reviews depends on the length of the reviews themselves. When reviews are shorter, more reviews carry more weight. However, when reviews are longer, the number of reviews is less impactful. A review of Columbia women’s Glacier fleece jacket on Amazon.com is short and to the point. “Perfect lightweight fleece top, I have four of them now and wear them ALL the time in the winter. You can layer them when it’s colder, but for everyday they can’t be beat.” The study offered four recommendations for retailers looking to generate results with ratings and recommendations. Allowing negative reviews to live on a Web site isn’t a purchase-killer. Rather, negative reviews lend authenticity to the content and help build trust with consumers. Besides, the vast majority of consumers actively seek out negative reviews, the study said. While reviews are considered to be most important for big-ticket items such as appliances and automobiles, Northwestern and PowerReviews looked at high- and low-priced products in the same category and concluded that star ratings had more influence on expensive products. Since there’s inherently a higher risk associated with buying a high-priced item, reviews can help consumers overcome that risk. The study found that reviews are relevant for new or relatively unknown brands, which could sample their product and solicit reviews. Finally, retailers should actively solicit reviews. With 80 percent of reviews coming from post-purchase emails, retailers should send consumers an e-mail asking them to review their purchase. 11 5 FEBRUARY 2016 RETAIL Nasty Gal Hit By Layoffs ● The L.A.-based company expected to undergo a company-wide restructuring. BY RACHEL STRUGATZ Life’s getting real for Nasty Gal and the other digital darlings that have built devoted customer bases online, but are starting to feel some serious growing pains — and increasing pressure to turn a profit. The Los Angeles-based Nasty Gal laid off 10 percent of its staff Thursday as part of a company-wide restructuring. The firm has raised $65 million to date, including $16 million in Series C funding in March, led by former Apple Inc. and J.C. Penney Co. Inc. executive Ron Johnson. “Today we had to lay off 19 employees as part of a strategic restructuring,” said Sheree Waterson, Nasty Gal chief executive officer. “While this was a difficult decision to make, it is necessary and will allow us to continue to evolve as a company.” In an internal e-mail, Waterson said the focus going forward would be on improving operations, brand building and strengthening the core business. “The market in which we operate is changing, both in retail broadly and apparel specifically,” Waterson said in the e-mail. “We have seen other tech and apparel brands make similar types of business decisions recently. It is imperative for us to be nimble and think strategically about the future of our brand.” Last month, beauty box subscription service Birchbox cut 15 percent of its staff. And late last year, Rent the Runway came under the spotlight for changes in its executive team. An employee at Nasty Gal told WWD under the condition of anonymity that the company’s layoffs were more course correction than big corporate shift. “It’s really not a massive [change], but it’s obviously significant,” this person said, noting that there have been “components of the business that have been turned on less strategically” such as Nasty Gal’s transition from wholesale operation to one that also has an in-house collection. The source said the goal is to build the brand and “create an operationally sound, profitable business.” The 10-year-old company had at least three rounds of layoffs in 2014, the largest round taking place in August, when it was reported that about 20 people of the approximately 280-person staff were let go. At the time, the company was preparing to open its first retail flagship, which bowed on Melrose Avenue. Amoruso stepped down as ceo in January 2015 and passed the reins on to Waterson, a former Lululemon Athletica Inc. executive. Nasty Gal — like Birchbox, Rent the Runway and Bonobos and other digital-first fashion players — is maturing as a business and now searching for just the right configuration as layers physical stores onto its e-commerce base. Rent the Runway has also been branching out and feeling some strains, seeing management turnover as it sought to grow beyond the special occasion business and poured energy and funds into building a service people use everyday. The competition is also bearing down. Valerie Davis, senior vice president of paid media at digital marketing and branding agency PM Digital, said these companies have led with innovation, and now other “market disruptors” have entered each of these categories. “They spent without necessarily having an eye for profitability, in order to increase penetration and build up their customer base, which was the ultimate goal at that time,” Davis said. “Except now, the market has softened, and paired with other market disruptors, it’s ‘slowed the faucet’, and now these companies need to turn a profit.” For Davis, the issue is less of a business model change and more that companies are facing increasingly competitive climates with a lot of innovation. And a bigger focus on bricks and mortar. Katia Beauchamp, Birchbox’s cofounder and ceo, brought on a group of seasoned retail executives to help expand the company’s physical presence. The beauty firm laid off 50 employees last week and stopped its service in Canada. The service has more than one million members. A New-York based venture capitalist blamed Birchbox spending much of the money it raised on customer acquisition and paid channels — when ultimately, the brand doesn’t have a customer with a great lifetime value. “Price points are low and it’s someone sampling [items] — it’s a lot of churn. My guess is that they were overpaying for their customer,” this person said. Bonobos hasn’t cut its staff, but saw some C-suite turnover last year when founder Andy Dunn retook his role as ceo less than three months after naming Francine Della Badia to the top spot. Bonobos also spun off its women’s brand Ayr in December to become a standalone company. Dunn on Thursday said Bonobos is “almost profitable” and that the brand’s full price business was up 75 percent last year. “Our stores are profitable as a channel and doing great. We beat our [bottom line] goal for 2105 by $2 million,” Dunn said. As for the decoupling of Ayr, Dunn said the women’s line needs a laser focus on building a stand-alone business and its own set of investors. “We don’t want to take from our balance sheet to give to Ayr,” he said. Profit pressures appear to have finally come to bear on the digital first crowd. BUSINESS Kohl’s Cuts EPS Outlook ● Results were impacted by a heavily promotional environment. BY ARTHUR ZACZKIEWICZ After Kohl’s Corp. said fourth-quarter comparable sales rose 0.4 percent with fiscal 2015 comparable sales rising 0.7 percent, the retailer reduced fiscal 2015 earnings-per-share guidance as sales and margins came in lower than expected. The company said it now expects 2015 EPS to range between $3.40 and $3.45. Carving out “debt extinguishment losses recorded in prior quarters,” the fiscal EPS is pegged to range between $3.95 and $4, which is “down from its previously stated guidance of toward the lowend of $4.40 to $4.60 per diluted share,” the retailer said. The retailer noted that footwear and home goods were top performers. Accessories performed the weakest. Regionally, sales were best in the West while the mid-Atlantic and South Central regions “were the most difficult,” the retailer said. “The change in guidance is a result of lower than planned sales for the quarter and significantly lower than planned gross margin,” the company said, adding that gross margins were “affected by the origin and timing of the sales in addition to the competitive promotional environment which resulted in higher than expected markdowns on both yearround and seasonal merchandise.” For the fourth quarter, total sales gained 0.8 percent while total 2015 sales rose 1 percent. Kevin Mansell, chairman, chief executive officer and president, said while “we experienced our fifth consecutive quarter of positive comparable-sales increases, sales were very volatile and less than planned in the fourth quarter. We experienced a very strong holiday selling season from the week of Thanksgiving through Christmas. These results were offset by a very slow start to the quarter in early November and a weaker-than-expected January as soft demand for cold-weather goods led to lower store traffic in these more discretionary shopping periods.” Kohl’s fell short of Wall Street’s expectations with a 19.8 percent decline in third-quarter profits. That said, Mansell noted a strong performance online, with the retailer’s digital business as online channel generating orders and sales that “grew approximately 30 percent during the quarter. Our ability to provide both ship-from-store and buy online, pickup in-store capabilities in all stores really resonated with our customer.” BUSINESS Feds Seize $39.3M in Bogus Sports Products ● Officials nabbed millions of dollars in counterfeit athletic goods in the past year and led a weeklong effort in San Francisco in the run-up to the Super Bowl on Sunday. BY KRISTI ELLIS WASHINGTON — Federal authorities said Thursday they have snagged $39.3 million worth of counterfeit sports merchandise in the past year, including $400,000 in the past week alone leading up to Super Bowl 50 in San Francisco on Sunday. Sarah R. Saldaña, director of U.S. Immigration and Customs Enforcement, revealed the details at a press conference in San Francisco, noting that the yearlong effort, dubbed “Operation Team Player,” led to the seizure of nearly 450,000 counterfeit sports-related items. “Intellectual property theft is a serious crime,” Saldaña said. “The increased enforcement actions conducted over the past year not only protected consumers, but led to information investigators can use to shut down major counterfeit distribution networks overseas and within our borders.” Operation Team Player, which also resulted in 41 criminal arrests and 35 convictions during the year, began at the conclusion of last year’s Super Bowl. The effort was developed by ICE’s Homeland Security Investigations’ National Intellectual Property Rights Coordination Center, which led coordinated efforts with major sports leagues to target contraband. “The NFL’s ongoing partnership with ICE and the IPR Center has resulted in a significant crackdown on the illegal sale of counterfeit merchandise and tickets,” said National Football League counsel Dolores DiBella. “This collaboration protects all fans, including those participating in Super Bowl 50 festivities, who seek an authentic NFL experience.” In the past week, HSI special agents joined forces with industry, Customs and Border Protection and local law enforcement in the San Francisco Bay Area to crack down on flea markets, retail outlets and street vendors selling bogus Super Bowl-related goods. They seized fake jerseys, hats, cell phone accessories and thousands of other bogus items valued at about $400,000, according to an IPR Center spokesman. The spokesman said about 63 percent of all counterfeit goods seized are imported to the U.S. from China. “Counterfeit products flood the supply chain with fake and potentially dangerous items while stealing from the rightful owners of trademarks,” said CBP commissioner R. Gil Kerlikowske. “Working closely with our federal government partners and U.S. business, CBP identifies counterfeit products at the border before they enter the stream of commerce to protect U.S. businesses.” David Hirschmann, president and chief executive officer of the U.S. Chamber of Commerce’s Global Intellectual Property Center, said, “Criminals selling counterfeit goods often use big events like the Super Bowl to trick consumers into buying high-priced, low-quality fakes. Not only do these criminal networks rip-off consumers, they have real consequences on the American economy.” 12 5 FEBRUARY 2016 Burberry’s Bold Move decided to put the focus on the social media savvy end-consumer who refuses to wait six months for her clothes to land in store. The British Fashion Council, meanwhile, is ramping up its program of consumer-facing shows known as London Fashion Weekend. Burberry is by far the biggest name to take the leap, and its decision could accelerate proposed changes to runway show and delivery patterns. Christopher Bailey, the company’s chief creative and chief executive officer, said the move is all about the end consumer. “The changes we are making will allow us to build a closer connection between the experience that we create with our runway shows and the moment when people can physically explore the collections for themselves,” he said. “Our shows have been evolving to close this gap for some time. From live-streams, to ordering straight from the runway, to live social media campaigns, this is the latest step in a creative process that will continue to evolve,” he added, referring to the myriad digital initiatives that Burberry has been spearheading over the years. In an interview with WWD, Bailey said the decision had been evolving naturally. “We began live-streaming in 2008-09 and ever since then we’ve been talking directly to a customer about the collections, about the mood, about the music, about the fashion and about the event. But then we’ve also been saying to the customer, ‘You have to fit into the traditional sector thing,’ and it just didn’t feel right and it hasn’t felt right since the beginning. “I told the teams that we can’t expect a customer to understand our timings because, I mean, it’s silly, which is why we did runway made-to-order collections. You can’t talk to a customer and say, ‘We’re really excited, we’re going to stimulate you and inspire you, but you can’t touch it or feel it for another six months.’ In fashion we talk about ‘a moment,’ and what feels right for the moment. And I’ve always battled with that because the moment is when you’re showing it, but then you’ve got to kind of say is it the right moment five or six months down the line? I just struggled with it. So it’s just trying to say to the customers: ‘You’re really important to us. We’re serving you and we need to change our ways rather than expect you to do these things.’” Bailey also addressed the global nature of Burberry and how his teams have to design for every season: “We’re a global company. When we stream that show, we’re not just streaming it to people who live in spring/ summer climates; we’re doing it for all different climates. So I guess we’re trying to look both creatively and pragmatically at this.” Burberry, like other big fashion and luxury brands, is also searching for ways to counteract slowing sales growth. Add to that consistently deteriorating sales in the high-margin markets of Hong Kong and Macau and the repeated devaluation of the once mighty yuan as China seeks to boost exports and prod economic growth. In January, Burberry admitted in a third-quarter trading statement that its results fell short of internal expectations, with revenues flat at reported rates and up one percent underlying. Sales in the October-to-December period were 603 million pounds, or $917 million, in what Bailey called “a tougher environment than expected” for the sector as a whole. Burberry said its latest move will “significantly shorten the traditional gap between the runway show and retail availability.” Asked about the logistics of switching to a buy-now-wear-now business and about the impact the move will have on wholesale and retail partners, Bailey said the process will take time. CONTINUED FROM PAGE 1 “We do not have the answers to everything today. It is certainly new behavior for us, and it will mean that we want to build stronger collaborative partnerships with our wholesale partners because it absolutely is a different way of working. We will be doing things where we invite those partners to see the collection, and that will have to be embargoed. It will just mean a different way of working. But what I love about it is our partners can work with it, they can see it, we can create special packages for them, we can then start saying ‘OK, do we do a special event for your customers where they watch the show live, and then they can shop immediately.’ So then it starts to open up actually a whole new, really exciting world.” He added that Burberry’s twice-yearly pre-collections will be integrated into the runway event. “Pre will become part of the show, and it will also become part of an earlier delivery. We’re just thinking more about what will we have in the store in September, what will we have in the store in October. It will be more of a capsule, creative capsule approach than just two collections per season,” he said. Burberry’s decision comes on the heels of another strategic shift: In November, the company revealed plans to fold its various collections under the single Burberry label. The change was aimed at presenting a cohesive brand experience to the end customer and offering them a simpler way to shop. Although the company will no longer stage men’s wear runway shows, Burberry said it plans to work with London Collections: Men to create “new ways of playing a significant part in these key moments in the men’s fashion calendar.” While Burberry may be the biggest and most influential label to herald a new era in showing and selling, it’s certainly not the first to do so — and it won’t be the last. The question now is how thick and fast the changes will come. Indeed, the British Fashion Council welcomed Burberry’s decision, and also hinted that more change is afoot: ‘The BFC executive board has been talking for some time about fashion shows better connecting to consumers and being a direct driver for retail sales. Burberry is a truly innovative brand and this strategic move shows brilliant leadership from Christopher Bailey and his team in driving this agenda forward. A number of British brands will move to a similar model over the next few seasons,” said British Fashion Council ceo Caroline Rush. Retailers are embracing the move to more in-season, consumer-focused fashion — and agitating for more change. “Customers don’t see fashion through the lens of fall or spring, and the whole idea of a season is becoming antiquated,” said Ken Downing, senior vice president and fashion director at Neiman Marcus, told WWD, adding there is a major problem nowadays with customer fatigue. “You cannot hold a customer’s attention for six months. They are following every move in fashion, which means that by the time a collection arrives in store they are over it. Technology has changed everything. Customers are living in the here and the now, but we as an industry are working with a business model that is 40-50 years old,” he said. To wit, some of London’s retailers are increasingly tailoring their offer to the different seasons. “Increasingly, our customers are looking for ‘buy-now-wear-now’ items and we have to respond to that,” said Jason Broderick, Harrods’ director of men’s wear, sports and fine watches. Scott Tepper, fashion buying and merchandising director at Liberty, said the store has been seeing “a very distinct change in our customers’ shopping patterns” and “You can’t talk to a customer and say, ‘We’re really excited, we’re going to stimulate you and inspire you, but you can’t touch it or feel it for another six months.’” — Christopher Bailey, Burberry therefore decided to take some calculated risks for the early spring buys to reflect them. “It’s no longer viable to offer the customer nothing but lightweight fabrications in December, January and February. We’ve learned there is a substantial customer block that wants newness in everything from overcoats to chunky knits to coldweather accessories when the weather warrants them — and not before — but he’s bored by carryover fall styles,” Tepper said. Liberty expects the strategy to lift early fall sales by as much as 30 percent, he said, and has raised its open-to-buy accordingly for brands that have adjusted to the “new reality” of the seasonal shift. Last month, during London Collections: Men, Selfridges unveiled a special Canada Goose pop-up collection on its men’s wear floor at a time when shoppers can actually use a winter coat rather than, say, a spring wool suit. The pop-up ran until the end of January. As reported last month, one of the big reasons Giles Deacon decided to leave the London ready-to-wear catwalk behind and show his couture collection in Paris was to accommodate his end-consumer. He told WWD last month: “With couture, it means I get to show fall in July, with delivery in September. My clients will be getting their pieces in season.” He also plans to interface with customers more on screen between the seasonal catwalk collections. “Today, it’s all about going to the customer, rather than waiting for footfall in a shop.” Other London names including Marios Schwab and Matthew Williamson have quit the schedule altogether, opting to work in a different way, with one-on-one showroom appointments and in-season deliveries. Tom Ford revealed late last year that he plans to show both his fall 2016 women’s wear and men’s wear collections in “small, intimate presentations” in New York, during New York Fashion Week, on Feb. 18. “Right now, I think that a certain fluidity is necessary in regards to how we communicate with the consumer, and I have experimented with different formats recently. The most important thing to me with a presentation is that it communicates the message of the season and the point of view of the collection,” he said. Meanwhile, London men’s wear brand Ada + Nik went “trans-seasonal” during its sales campaign at Paris Fashion Week in January. “On our Web site, we noticed people were buying puffer jackets in the middle of summer and tank tops in the middle of winter,” said Nik Thakkar, a creative consultant and brand strategist who designs the line with couturier Ada Zanditon. “Seasons just don’t work any more and we experienced that first hand.” Later this month the BFC plans to expand its longstanding consumer-facing showcase, which will take place on Feb. 25, two days after the end of London Fashion Week. London Fashion Weekend will be held at the Saatchi Gallery near Sloane Square, and will feature Emilia Wickstead, Holly Fulton, Mary Katrantzou and Temperley London. The BFC plans to showcase one designer a day, with the runway show repeated about two to four times throughout the day. The audience reach is likely to exceed 16,000. The designers also sell directly to consumers during the event. “There is no doubt in future seasons these lines will blur even more as designers opt to do in-season shows. However, we need to ensure those businesses that rely on platforms such as fashion weeks to reach new wholesale partners and media continue to have the opportunity to do so,” Rush said. The biannual, four-day consumer event, held at the Saatchi Gallery, will host runway shows, designer talks, shopping galleries and trends presentations. The shopping area will see 150 brands on sale, including Fyodor Golan, J. JS Lee, Linda Farrow, Mawi, Paper London, Pringle of Scotland and Osman. Photograph by JAB Productions/WWD Christopher Bailey 13 5 FEBRUARY 2016 RETAIL Bigger Is Still Better at Wal-Mart ● Wal-Mart said it will close its 102-unit Express chain, one of the company’s smallest retail formats, signaling a possible hiatus from urban retail. BY SHARON EDELSON Size always matters at Wal-Mart. The demise of Wal-Mart Express, a 102-unit chain of smaller stores with an average footprint of 15,000 square feet, doesn’t point to an abject failure, but rather a realization that Wal-Mart doesn’t “do small,” observers said. Express’ shuttering was part of last week’s announcement that Wal-Mart will close 269 stores worldwide. One of the smallest store formats, Express was seen as a vehicle for entering dense urban markets when the pilot was revealed in 2011. Express’ closure doesn’t necessarily mean that the Bentonville, Ark.-based retail giant is giving up on urban retail. Many Express stores are in rural markets, with the exception of units in Chicago. A spokesman said the economics of operating in cities has been difficult for Wal-Mart to rationalize. “We have two SuperCenters in Washington, D.C.,” he said. “Having said that, I noticed that we made the decision to not move forward with two additional locations in Washington, D.C., that were planned. The decision not to open those stores was part of an overall portfolio review. We look at costs and where it makes sense for us to be. Unlike some retailers, we don’t raise our prices based on costs in a particular market. Obviously, it’s a factor in how we approach locations.” “Wal-Mart has made no secret that Express stores were set apart and so different than Neighborhood Markets that they didn’t have any synergies,” said Carol Spieckerman, president of Spieckerman Retail. “They had to decide how far they were going to go with a concept that was terminally unique. Wal-Mart is realizing that it can accomplish many of the same goals it had with Express without necessarily doing it through physical locations or a small, medium, large strategy.” Wal-Mart’s relationship with cities has been fraught at times. At one time, the retailer planned to open six SuperCenters in Washington, D.C. It spent millions of dollars on a public relations campaign in New York in 2006 when it was actively seeking locations in the five boroughs. But Wal-Mart has been met with resistance in several cities, including New York. While the retailer has said New Yorkers spend $200 million at Wal-Mart stores outside the city, it has yet to open a store there. Wal-Mart has been aggressive about creating synergies between its online business and Neighborhood Market locations. The spokesman said buy-online, pick-up-instore has been rolled out to the entire fleet of Neighborhood Markets. The retailer is locating Neighborhood Markets in close proximity to existing SuperCenters — often across the street — in an effort to capture shoppers’ fill-in trips. Customers visit SuperCenters for more extensive shopping trips. Wal-Mart in the past had a strategy of cannibalizing its own stores by building SuperCenters very close to one another, believing it was better to lose sales to one of its own stores than a competitor’s. A spokeswoman for Wal-Mart’s global e-commerce group said the company’s delivery options now include buy-online, pick-up-the-same-day, with more than 70,000 items on offer. A locker system is being tested at select stores. Spieckerman said Wal-Mart was smart to exit the Express business. “Small-format retail is becoming a much more crowded place,” she said, noting the thousands of dollar stores and drug stores and small-format units that Target is rolling out. In addition, Kohl’s is introducing 35,000-square-foot units and 25,000- to 30,000-square-foot Off-Aisle clearance stores, while European retailer Aldi is expanding in the U.S. and its fellow European discount chain Lidl is set to open stores in the U.S. by 2018. FASHION Ciara, Tori Kelly and Allison Williams Team With Keds ● In its 100th year, Keds is celebrating with American manufacturing, new advertising and a collective of multitalented women. BY ROSEMARY FEITELBERG Ciara, Tori Kelly and Allison Williams will play up their multidimensional lifestyles beyond Keds’ spring advertising. Part of the newly formed Keds Collective, a cadre of women that includes Jamie Chung, Billie Whitehouse and others, their involvement is experiential. Williams, for example, has also directed two short videos for Keds’ site and will host the Feb. 10 “100 Years of Keds” event being held with Refinery 29. Ciara will perform at the West Chelsea event and she is also said to be crafting customized Keds for the brand’s collaboration with Topshop, due in stores late next month. Hong Kong-based stylist and blogger Tina Leung and i-D magazine’s Julia Sarr-jamois are also expected to do the same for Keds. To get a better handle on today’s customers, Keds quizzed 5,000 women in eight countries for qualitative research. Keds chief executive officer Chris Lindner said this spring’s ad campaign, created by Kirshenbaum Bond Senecal + Partners, is “in the millions.” The company is spotlighting women who work in a variety of fields, and ramping up its e-commerce with D.I.Y. Keds and other initiatives. Tapping Wearable Experiments founder Billie Whitehouse for the Keds Collective seems to encapsulate both of those objectives. After being named chief marketing officer in August, Emily Culp lined up Whitehouse, who will help Keds reimagine some products, though wearables are not planned at this point, according to Lindner. Owned by Wolverine World Wide, Keds plans to start making American-made goods for the first time since 1983 by using its parent company’s manufacturing facility in Big Rapids, Mich. In May, Keds will introduce Made in the USA goods — “product that is 100 percent down to the aglet, eyelet, box tissue, stuffers, etc.,” Lindner said. Today there are 100 staffers in Keds’ corporate office in Lexington, Mass., outside of Boston and about 35 more around the globe in Wolverine’s offices. At its peak, the company sold 25 million pairs internationally each year. Founded in 1916 as an offshoot of the U.S. Rubber Co., Keds sneakers were worn by American icons like Marilyn Monroe, Audrey Hepburn, Katharine Hepburn, Jacqueline Onassis and Yoko Ono, who wore a pair on her wedding day. “It wasn’t as though the brand was providing endorsement agreements with these women back in the day. It was just inherent in what they did and what they wore,” Lindner said. In the last few years, Keds has seen a compound growth rate in the midteens in North America, Lindner said. Its Asia-Pacific business has more than quadrupled due to key countries like Korea, Japan and now China is “coming on board as a major part of the company’s growth story.” Taylor Swift, who partnered with the company in 2012 and remains a brand ambassador through this year, has helped rejuvenate interest. Keds’ alliance with Kate Spade is also going forward. And the brand has teamed with Malhia Kent, a European mill with historic ties to Coco Chanel, for textiles that will be introduced in April. With retail distribution lined up in Topshop, Colette and Galleries Lafayette, Keds is counting on the European market for additional growth, and Latin America. Brazil is particularly strong, where the company has 35 style selections in multiple stores, maintains production there and has not seen any immediate impact from the Zika virus, according to Lindner. Allison Williams teams up with Keds for Centennial 14 5 FEBRUARY 2016 Sarah Gadon Lives the JFK Era in ‘11.22.63’ The Canadian actress and face of Armani Cosmetics plays a Fifties college student and a Sixties career woman. Sarah Gadon Sarah Gadon knows a little something about being a time traveler. The Canadian actress, 28, stars opposite James Franco in Hulu’s “11.22.63,” a miniseries adaptation of the Stephen King bestseller about a modern-day man who journeys back decades to try to prevent the assassination of John F. Kennedy. At Sundance this year, her buzzy in-competition film “Indignation,” an adaptation of Philip Roth’s Fifties-set novel, premiered to strong reviews. WWD sat down with the actress recently to discuss past, present and future. WWD: What drew you to playing a character in the Sixties? Sarah Gadon: There’s always something very seductive about doing a period piece, because we have all of the nostalgia from the present for that period. Kevin Macdonald, who directed the pilot episode, really created this level of restraint so that we weren’t “French kissing” the period. Everything about how I dress and how I wore my hair was real. I wore a girdle. That is not a joy, to be wearing that kind of clothing. A lot of the references from Tippi Hedren to Kim Novak are very much in that Hitchcock world of tailored suits. WWD: Did you come in with much knowledge about the JFK era? SG: I grew up in Toronto, so this was not a part of my country’s history in the same way as it would have been taught in school to an American girl. Kennedy’s assassination was a real, true loss of innocence. In a lot of ways, for me, Sadie was a real representation of that time of innocence, and her awakening, her discovery, really represents that kind of evolution in American history. WWD: You’ve also got “Indignation,” which got a lot of buzz at Sundance. SG: People are really excited about it because it’s James Schamus’ directorial debut. James has worn many hats in the industry and has touched many people’s careers in a positive way, so I think people are curious to see what he has coming. For me, being a big Philip Roth fan, seeing his writing adapted for the screen is really powerful. I think that Logan Lerman, who plays the main character in the film, delivers the performance of a career. WWD: Were the period clothes there more glamorous? SG: The Fifties is so much more innocent, I think, than the Sixties. I was playing a college student so there was just so much plaid. WWD: As far as your personal fashion, what sort of style do you go for? SG: I feel like I have these very different personas. I have my “Toronto film student” [look]: I wear a lot of Acne; I’m wearing my Common Projects running shoes. Then you step into the world of being an actress and you have to kind of amp up your style. I’m wearing Roland Mouret today; I think he cuts beautifully for the feminine figure. I also started working with Armani Cosmetics as the face of their brand. I think that Mr. Armani is an incredible designer and I love his tailoring. I also love Erdem, Sonia Rykiel, Isabel Marant. WWD: And you have other career ambitions in the industry as well? SG: I studied film in school and I love film so much. I watch movies all time, so when I have a night off, I got a projector for my house. I love the French New Wave. I love Italian Neorealism. I really like British Kitchen Sink Realism as well…Crazy about Catherine Deneuve [then], and crazy about her now. — SCOTT HUVER Sarah Gadon and James Franco in a still from “11.22.63.” Logan Lerman and Sarah Gadon in a scene from “Indignation.” VPL RTW Fall 2015 Victoria Bartlett is leaving VPL, the collection she founded in 2003, based on the concept of fusing undergarments and fashion pieces. The cheekily named VPL stands for “Visible Panty Line.” When Bartlett, a former stylist, launched the collection she was working with Jeffrey Costello. In 2006, Kikka Hanazawa came on as a business partner. She will continue to run VPL. Bartlett declined to comment beyond a company-approved statement stating that she will “pursue new fashion endeavors and design projects. As VPL’s designer and creative director, she was responsible for design and development of VPL.” — JESSICA IREDALE SEEING STARS Christian Louboutin will make his Moda Operandi debut in celebration of the e-tailer’s fifth anniversary. The French shoe designer is the first in a series of createurs to celebrate the site’s birthday with a limited-edition range of styles. Louboutin has designed two celestial-inspired shoes that will launch Friday. A heavily embellished mule will sell for $2,200 and a pointed flat will retail for $2,000. Both styles come in a limited production run of 45 units. Shoppers can choose to have their zodiac sign represented on the shoes, and will also have the option to monogram the shoes with their initials or date of birth, which will be handstitched at Louboutin’s atelier. The limited-edition collection is the first time Louboutin has sold his goods on Moda Operandi. — MISTY WHITE SIDELL CHINA CAPSULE Uma Wang, one of China’s designers of the moment, has completed an eight-piece exclusive capsule collection for Lane Crawford. The Hong Kong-based retailer said Wang tapped “deep into her Chinese heritage to find inspiration in the bold indigo color that characterizes the clothes worn by Chinese tribes” to turn out eight styles. Pieces include a poplin dress with a gathered waist, a patchwork linen-silk dress and a floral print silk blend coat. Prices range from 4,500 Hong Kong dollars, or $577, to 10, 200 Hong Kong dollars, or $1,308. The collection will be available around Feb. 24 at Lane Crawford’s Hong Kong IFC and Shanghai Times Square locations as well as on the retailer’s Web site. “Fabric is everything to me,” said Wang. “When I discover a fabric, I can immediately envisage the shape of the dress in it. It’s the easiest way to transform my passion and creativity into something unique and novel.” — AMANDA KAISER The Uma Wang capsule collection. Gadon photographs by Dan Doperalski and Ben Mark Holzberg EXITING VPL Christian Louboutin for Moda Operandi 16 5 FEBRUARY 2016 NOT SO THRILLED Anna Wintour may have put Kim Kardashian on the cover of Vogue, but that doesn’t mean she’s a fan of the whole family. The Condé Nast artistic director wasn’t too pleased with Architectural Digest’s March newsstand cover featuring Kourtney and Khloé Karsashian, insiders told WWD. The sources said the styling of the sisters wasn’t up to snuff for Wintour, who has been spending a lot of time on AD’s floor at Condé headquarters at One World Trade Center. The artistic director, who doubles as Vogue editor in chief, has been working “very closely” with AD editor in chief Margaret Russell to improve the look of the magazine. The latest cover, which didn’t go out to subscribers — they got a Kardashian-less one featuring Kourtney’s office — elicited some “tense” moments between the two editors, sources said. But it wasn’t just Wintour who found the newsstand cover disagreeable — Instagram fans of AD were vocal about their dislike of the choice as well. “Sell outs…here I thought AD had some standards…down the gutter,” a user commented. “I feel like I can see more of their body parts than interior on this pic,” another wrote. “Unfollow @ archdigest you’ve been going down hill for a while… btw horrible style…really dated and cheap looking,” offered another. Not all the comments were negative. In fact, many noted the large social media followings of the Kardashian sisters, while several touted how great the issue turned out. “Why so much negativity people?! These ladies have beautiful homes that they worked hard on and are proud of,” said a fan in defense. The cover image, which resides on AD’s Instagram page, has garnered about 7,000 likes — thousands more than any other cover image the magazine has posted. A spokeswoman said that on Tuesday, the day the issue landed, the title saw its biggest traffic day ever on its Web site as well as a large jump in the number of Facebook fans and Instagram followers. WWD reached out to AD to get clarification on whether the Kardashian cover was Russell’s decision, and why she decided to put the sisters on the newsstand cover only. Russell did not comment, but an AD spokeswoman said, “Designed by AD100 talent Martyn Lawrence Bullard, both Kardashian projects are unique and worthy of the spotlight in our annual ‘Celebrities at Home’ issue. Margaret Russell chose to do two covers, a celebrity-driven one for newsstand to introduce the magazine to new readers, and another featuring a beautiful interior for our subscribers to enjoy. Longtime readers tell us they display their issues like coffee table books—and Kourtney’s office, with mid-Century French furnishings and exquisite art, is a perfect AD cover.” Although the Kardashians aren’t known for raking in massive sales on the newsstand, the family knows how to bring digital buzz. For its part, AD is focusing more on the Web, as it is in the process of building a robust digital team led by digital director Erica Duecy, who joined Condé last summer. While it is too early to see how the March issue is performing on the newsstand, AD, like its rivals in the magazine space, could benefit from a sales bump there. According to The Alliance for Audited Media, total single-copy sales totaled 61,973 in the first half of last year, down 3.3 percent from the year-ago period. The small decline is an anomaly in an industry that is suffering double-digit sales Architectural Digest’s Instagrammed March Cover. drops on an annual basis. Still, from 2009 to 2013, AD’s newsstand sales had steadily hovered above 70,000. — ALEXANDRA STEIGRAD MORE SPACE HL Group is expanding. The marketing and communications firm has taken office space at 530 Seventh Avenue, an office tower in the Garment District, which will be home to its recently formed fashion operations group. The New York headquarters for the company are in Union Square; HL also operates offices in Los Angeles. Victoria’s Secret Angels in “Score More” online campaign for the Super Bowl. RETAIL Fashion, Beauty Gear Up for Super Bowl ● A few new brands along with retailers are advertising during the game for the first time ever. BY ARIA HUGHES Fashion and beauty brands along with retailers are tapping into the Super Bowl’s massive marketing machine. Amazon, Marmot and the Camuto Group have secured their first 30-second TV spots during the event, which begins this Sunday on CBS at 6:30 p.m. EST, while Axe will make a return during the broadcast. While it is pushing hard into fashion, Amazon instead will promote its Echo wireless speaker and voice command device, which is named Alexa, during the Super Bowl with a commercial featuring Alec Baldwin and Missy Elliot. So far it has released a few 30-second teasers showing Baldwin getting prepared for a Super Bowl party with help from Alexa. They are tagging the campaign the #BaldwinBowl. “Echo has had an amazing reception from customers over the past year — they love it. We thought the Super Bowl was a great chance to tell even more people about what Echo and Alexa can do, and have some fun while doing it,” said Neil Lindsay, vice president of Amazon Devices. Marmot, an outdoor apparel brand based in California, is also making its Super Bowl debut this season. The brand has partnered with Goodby Silverstein & Partners on a 30-second spot that shows a man enjoying the outdoors with the brand’s mascot, a Marmot. “Marmot’s parent company Jarden Corp. has supported key Marmot brand and company growth initiatives for numerous years, and the Super Bowl is one more great opportunity for Marmot to reach new consumers,” said Tom Fritz, vice president of marketing at Marmot. “Marmot has grown substantially over the The fashion operations group will be overseen by vice president Laura O’Hare. HL represents various lifestyle, fashion, travel and hospitality, beauty, home and interior design clients. The second New York office will allow the company to offer clients sampling and trafficking services for apparel, accessories, runway and front-of-house operations. In December, HL Group beefed up its fashion focus by adding Kimberly Flaster as senior vice president of fashion. She handles all fashion-related businesses with oversight for client services and development of growth strategies. — LEIGH NORDSTROM last decade, and the company has reached a critical mass and is at a point where this type of marketing program makes sense to take the company to a new level of growth.” According to Fritz, Marmot has been able to do well despite the odd weather and the Super Bowl commercial will mark the beginning of a robust marketing plan for the remainder of the year. Axe, which advertised during the Super Bowl in 2014, has purchased a 30-second spot that will show its “Find Your Magic,” campaign, a new direction for the brand that shows various depictions of masculinity. Matthew McCarthy, senior director of Axe and men’s grooming for Unilever, said, “The Super Bowl is a great place to feature the brand’s new point of view because the scale allows us to bring more men and women into the conversation around individuality and inclusivity.” Camuto Group will air its first Super Bowl commercial — and first TV commercial ever — on Sunday during pre-game coverage on CBS. The ad, which will run between 5:55 p.m. and 6:05 p.m., will precede the Super Bowl kickoff. The 30-second spot, which was created by agency and production company Swell, along with Camuto Group’s in-house global marketing team, features a Brindle Boxer dog who wants to help his owner select a pair of shoes to complete her outfit. The dog rifles through a walk-in-closet filled with Vince Camuto shoes and offers his suggestion for the perfect shoe. The brand is running teasers on social media platforms leading up to the event. Victoria’s Secret will not air a TV spot during the game, but it did release an online video titled “Score More,” which debuted on Tuesday night during the CBS Super Bowl commercial special. The ad features Victoria’s Secret Angels Adriana Lima, Alessandra Ambrosio, Elsa Hosk, Jasmine Tookes and Taylor Hill. The Angels, who are dressed up in football helmets and jerseys, are at a near loss against their rival team, The Devils, but defeat their opponents after a pep talk from their coach, who is played by TV personality Erin Andrews. The video ends by reminding viewers that “This Valentine’s Day…score more at Victoria’s Secret!” Dove Men + Care and Skechers advertised last year during the event but won’t be participating this Sunday.