Coach Gets Exclusive With Saks and Rumors of a Collabo With J.C. Penney

Saks Fifth Avenue has been tapped by Coach to be the exclusive retailer for the Reed Krakoff line that will debut this fall. This exclusive arrangement will last for six months, after which Saks will continue to have some form of exclusivity when distribution of the brand widens.

But the news that has the fashion blogosphere buzzing is the rumor that Coach may collaborate with J.C. Penney on an accessories collection:

Coach chairman and chief executive officer Lew Frankfort — spotted chatting with Penney’s chairman and ceo Myron E. “Mike” Ullman 3rd at the Mandarin Hotel, scene of Thursday’s night Global Department Store Summit dinner — acknowledged a collaboration is a possibility, but he stressed it would not be under the Coach label and it would have to be a new brand for the new channel. Ullman said nothing after Frankfort made his comment.

So, what will this new brand be called? According to the U.S. Patent and Trademark Office, since December 2009, the company has registered three trademarks: "Ribbon", "Sonoma" and "510". The goods and services that could be launched under these trademarks range from accessories such as handbags, wallets and backpacks, and, in the case of the "510" trademark, beauty products and clothing. Coach aficionados will recognize the "Sonoma" name from the company's Sonoma Collection of the late '90s. Might Coach revive that line for J.C. Penney? Time will tell.


Disclosure: Haute Retail holds positions in Coach, Inc.

HR Quarterly Round-Up: Tiffany & Co., Movado, J.Crew

J.Crew Ballet Flats

(Photo: J.Crew.com)

Tiffany 1Q Profit More Than Doubles As Demand Rebounds (WSJ): Tiffany & Co.'s first-quarter earnings more than doubled on demand across most of its markets and product lines, a sign that higher-end and even mainstream consumers are feeling better about buying.

Movado's Q1 Beats Street, To Close Retail Boutique Unit (Reuters): Movado Group Inc posted a narrower-than-expected quarterly loss, helped by a recovery in consumer demand, and said it will close its retail boutique unit, which is expected to hurt the watchmaker's 2010 revenue by $30 million.

J. Crew doubles 1Q net income, raises guidance (AP): Catalog retailer J. Crew Group Inc. doubled its first-quarter net income as revenue soared nearly 20 percent and raised its guidance for the year above estimates.

HR Quarterly Round-Up: Gap, Ann Taylor, Polo, Aeropostale

Gap Inc. Earnings Rise 40% (LA Times): Apparel company Gap Inc. reported robust first-quarter profit Thursday and said sales grew across all of its brands.

Ann Taylor Stores Posts 1Q Net Income (Crain's New York): Ann Taylor Stores Corp. returned to profitability in its fiscal first quarter, helped by strong performances at both its namesake and Ann Taylor Loft stores and more full-price purchases.

Polo Ralph Lauren Profit More Than Doubles (Reuters): Polo Ralph Lauren Corp reported a quarterly profit on Wednesday that more than doubled, as strong sales at its retail stores helped offset a decline in wholesale revenue

Aeropostale 1Q Profit Up 43% (Businessweek): Teen clothing retailer Aeropostale Inc. said Thursday that its net income rose 43 percent as revenue grew and online sales surged.

HR Quarterly Round-Up: Abercrombie & Fitch, Saks, Limited Brands

Abercrombie & Fitch Narrows F1Q Loss, Expanding Abroad (WSJ): Abercrombie & Fitch Co.'s (ANF) fiscal first-quarter loss narrowed, and the high-priced teen-apparel retailer outlined further plans to expand its presence overseas.

Saks Profit Surpasses Projections on Fewer Markdowns (Businessweek): Saks Inc., the New York-based luxury retail chain, reported first-quarter earnings that beat analysts’ estimates after marking down fewer goods.

Limited Brands Beats Street, Outlook Disappoints (Reuters): Limited Brands Inc., the operator of the Victoria's Secret and Bath & Body Works chains, posted better-than-expected quarterly net income on Wednesday, but the midpoint of a profit outlook fell short of expectations, sending the company's shares down 5 percent.

Estee Lauder Buys Smashbox Cosmetics

The Estée Lauder Companies adds another prestige cosmetics brand to its portfolio with the acquisition of Smashbox Cosmetics Beauty, Inc., the makeup company founded in 1996 by Dean and Davis Factor (left), great-grandsons of the legendary makeup artist, Max Factor, in an effort to provide products for makeup artists on professional photo shoots.

EL Cos. announced their definitive agreement with the L.A. based company on Monday, saying that the deal will close in July and will add to earnings in 2011, minus transaction and integration costs. The purchase price is unknown, however sources told WWD that the price tag was between $200M and $300M. The deal also includes a minority stake in Smashbox Studios, the Los Angeles facility started by the Factors in 1991.

With EL's strategic priorities focused on skin care and Asia, Smashbox doesn't fit the bill of a desirable acquisition. However, the makeup brand has a strong presence in open-sell environments and is a well known brand in specialty channels, such as QVC and Sephora, allowing EL to have a stronger presence in alternative retail channels. Smashbox also has expertise in digital and social media, which will help Estee Lauder to expand and reach new and younger customers. In exchange, Smashbox will be able to expand globally via EL's international experience.

HR Quarterly Round-Up: Bulgari, Macy's, Nordstrom

A yellow gold, diamond, pearl and emerald necklace from the Bvlgari Heritage Collection

(Photo: Catherine Bigelow/SFGate.com)

Bulgari Loss Narrows on Sales of Necklaces, Perfume (Businessweek): Bulgari SpA, the world’s third- largest jeweler, reported a narrower first-quarter loss on rising sales of necklaces and perfume.

Macy's Swings to Profit, Aided By Move to Meet Local Demand (MarketWatch): Department-store operator Macy's Inc. on Wednesday said it swung to a better-than-expected $23 million first-quarter profit, helped by its strategy to tailor stock to local demand.
 
Nordstrom 1st-Qtr Net Rises, But Misses Street view (Reuters): Nordstrom Inc (JWN.N) said its first-quarter net profit rose 43 percent over last year, but it missed analysts' forecasts and shares fell after hours.

HR Quaterly Round-Up: Elizabeth Arden, Steve Madden

(Photo: RedDoorSpas.com)

Elizabeth Arden Overseas' Growth Narrows Loss (Reuters): Elizabeth Arden Inc posted a narrower-than-expected quarterly loss and raised its profit forecast on Thursday, helped by strong international growth and improved gross margins.

Steve Madden 1st-Qtr Profit Rises (Businessweek): Shoe maker Steve Madden Ltd. said its profit more than doubled in the first quarter as wholesale and retail sales improved. But the company offered full-year earnings guidance that fell short of expectations and shares slid $1.68, or 4 percent, to $38.32 in premarket trading.

HR Quarterly Round-Up: Kenneth Cole, Liz Caiborne, Hermès

Kenneth Cole 1Q Earnings Rise on Improved Sales (Crain's New York): Kenneth Cole Productions Inc., which makes shoes, handbags and clothes, on Wednesday reported a first-quarter profit, helped by improving demand in all segments.

Liz Claiborne 1Q Loss Narrows On Nonoperating Income Rise (WSJ): Liz Claiborne Inc.'s first-quarter loss narrowed as nonoperating income surged, while same-store sales climbed 15% at kate spade, partly offsetting declines at Mexx and Juicy Couture, the latter posting a 12% drop.
Hermes Shines With Best Q1 Sales of Luxury Sector (Reuters): Hermes posted the biggest surge in first-quarter sales of all European luxury goods companies on Thursday, pointing to a continued polarisation of the market in which well-established brands crush weaker rivals.

HR Quarterly Round-Up: Revlon, Avon

(Photo: Avon.com)

Revlon 1Q Profit Falls On Expenses, US Sales Down (Businessweek): Revlon Inc.'s first-quarter profit tumbled on Thursday, pressured by higher expenses as U.S. sales for the beauty products company declined.

Avon Products 1Q Profit Takes a Hit From Currency (Crain's NY Business): Avon Products Inc. said Friday that first-quarter profits fell 64 percent as the company was hit hard by a devaluation of Venezuela's currency.

HR Quarterly Round-Up: Iconix Brands, Jones Apparel Group, PPR

Iconix 1Q Profit Rises 58 pct, Raises Outlook (AP): Apparel maker Iconix Brand Group Inc. on Tuesday said first-quarter earnings rose 58 percent as it earned more money from licensing and other revenue. The company raised its outlook and announced it would acquire licensing rights to Snoopy, Charlie Brown and the rest of the "Peanuts" gang for $175 million in cash from E.W. Scripps Co.

Jones Apparel 1Q EPS Up, A Positive For Dept Stores (WSJ): Jones Apparel Group Inc. (JNY) posted sharply higher first-quarter profit and increased full-year revenue guidance, potential positive indicators for big retailers that will be reporting results in the next few weeks.

PPR First-Quarter Sales Gain 1.2% on Asian Demand for Handbags (Businessweek): PPR SA, owner of the Gucci luxury- goods brand and Conforama furniture stores, reported a gain in first-quarter sales that beat analysts’ estimates on demand for handbags in Asia.

Fern Mallis Leaves "The Tents"

Fern Mallis, senior V.P. of IMG Fashion and founder of Mercedes-Benz New York Fashion Week, is leaving IMG to start her own consulting firm, Fern Mallis LLC.

This is major news. Ms. Mallis was the major force behind the creation of New York's Fashion Week in 1993 which changed the landscape of American fashion forever. When Ms. Mallis conceived the idea of having fashion shows in Bryant Park, some in the industry scoffed, saying New York wasn't considered a "fashion capital" a la Milan and Paris. However, the success of the Bryant Park shows turned New York's fashion week into one of the most important in the industry.

So, the big question is: How will Ms. Mallis' departure affect IMG and Mercedes-Benz Fashion Week? The good news is that IMG has signed on to be Ms. Mallis' first client, which will help with Fashion Week's transition from Bryant Park to Lincoln Center. A potential drawback is IMG will not be naming a successor to Ms. Malin's position, choosing to spread the duties of spokesperson for IMG Fashion among several executives, thus losing an ambassador for Fashion Week. But according to Crain's New York Business, fashion insiders are not worried as long as Christina Neault, executive producer for IMG Fashion, stays on:

“For any of the designers, Christina is the person we have a day-to-day relationship with,” said Amy Smilovic, head designer of contemporary brand Tibi, adding that Ms. Mallis was more like a fairy godmother designers approached when they wanted to first show at the tents. “As long as you’ve got that face that you deal with day to day and you can count on them, then I feel everything will go smoothly.”

(Photo: Glam.com)

Estée Lauder 3Q Earnings Double Driven By 10% Sales Jump

Strong sales growth overseas and in the U.S., coupled with a stringent cost cutting plan, helped to double Estée Lauder Companies' third quarter profits, according to an article in Crain's New York Business.

Third quarter earnings rose more than 50% to $57.5 million vs. $27.2 million from the previous year. E.P.S. doubled to $.28 compared to $.14 E.P.S. last year. Excluding one-time costs, profit was $.34 per share, beating Wall St. estimates of $.32 per share.

Net revenue jumped 10% to $1.86 billion from $1.70 billion a year earlier, coming under analysts' prediction of $188 million in sales.

Skin care was the best performing product category, with 15.6% growth at $819.8 million, bolstered by strong sales of EL's Advanced Night Repair Synchronized Recovery Complex. Particularly encouraging are the sales numbers for the La Mer skin care line, one of the company's Prestige lines with prices starting at $100, which posted double-digit sales with strength in North America.

President and CEO Fabrizio Freda said in a conference call with analysts, "We believe that consumers are beginning to reconsider luxury products. It certainly bodes well for our entire Prestige portfolio".
The international launch of Pure DKNY and the rollout of Coach Signature fragrances to the U.S. bolstered EL's Fragrance category to an 18.7% sales increase of $222.8 million. Makeup sales rose 2.3%  to $710.8 million on the strength of M*A*C and Bobbi Brown cosmetic brands.

Regionally, the biggest rise was in Asia/Pacific to $371.1 million in sales, an increase of 20.3%. In Europe, the Middle East, and Africa, sales jumped 13.5 to $662 million. Sales in the Americas rose 3.1% to $829.1 million.

In an interview with WWD, Mr. Freda, says the company will continue to invest in marketing spending, and concentrate on brands, opportunites, regions and beauty concerns that are most important to the company,  Mr. Freda also said growth through acquisition isn't off the table:

“We’ve always said [mergers and acquisitions] are part of our strategy,” Freda told WWD, adding the company will pursue opportunities that widen its reach by category, distribution channel and in geographic scope. “Skin care and Asia are our priorities, but we also will look more broadly,” said Freda. (SOURCE: WWD)

For FY2010, EL forecasted sales to grow between 4% and 5% in constant currency. Earnings, excluding one-time items, are projected to be between $2.65 and $2.75 per share.

(Photo: EsteeLauder.com)

L'Oreal Acquires Essie Cosmetics

After much speculation, L'Oreal USA has purchased Essie Cosmetics, one of the biggest, chicest names in the nail care industry, reports WWD. Purchase price was not disclosed, however due to Essie being a "specialized brand", industry analysts estimate that L'Oreal paid between $50-60 million for the company.

Essie Weingarten, who founded Essie, and her husband Max Sartino, CEO of the company, signed multi-year deals with L'Oreal and will stay on with the brand.

Analysts believe this deal offers several growth opportunites for Essie such as expansion into cosmetics, increasing the brand's international presence, and it allows Essie to tap into L'Oreal's vast salon network distributions to boost domestic growth. This deal also helps L'Oreal increase its market share of the nail polish market, which currently stands at 9.2% according to an article at Crain's New York Business.

I have several concerns: I hope that the quality of the product won't suffer. I'm also concerned about the possibility of the Essie brand branching out into cosmetics. L'Oreal already has a brand portfolio that covers cosmetics (i.e. L'Oreal, Lancome, Maybelline, Shu Uemura...etc.). However, what's missing from their portfolio is a brand that exclusively addresses foot and hand care needs. Keeping Essie as solely (no pun intended) a nail and hand care brand will help them compete against Coty which controls 45% of the market.

Coach 3Q Profit Soars 37%; Looks To Europe For Expansion

A return to their affordable luxury price points has paid off for Coach Inc., as increased demand in North America helped the company to a strong third quarter.

Earnings for the leather goods maker jumped 37% to $158 billion from $115 billion from the previous year, beating Wall Street estimates, according to Reuters. Sales for the quarter topped off at $831 million compared to $740 million in fiscal 2009, with E.P.S. totaling $0.50 compared to $0.36 a year ago. As a result, the company doubled its cash dividend to $0.60 per share annually, implemented a $1 billion stock repurchase program, and upped its China sales target by a year.

"Our growth demonstrates our ability to manage our business nimbly, while investing prudently for the future". says Lew Frankfort, Chairman and CEO of Coach Inc.

Part of that investing includes the company's expansion into Western Europe. Via an agreement with French department store group, Printemps, Coach will open at least 14 locations in Printemps stores throughout France over the next three years, the first being a 1700 sq.ft. shop in Paris this June.  

Coach also entered into an agreement in principle to create a joint venture with British retailer Hackett Limited to open Coach stores in the U.K., Spain, Portugal and Ireland. The first locations in the U.K. and Spain are expected to open in the next twelve months.

On Thursday, Coach will celebrate the grand opening of its brand new Shanghai flagship store. The flagship is located on tony Huai Hai Middle Road, which is enroute to becoming the Fifth Ave. of Shanghai, with luxury brands such as Cartier and Tiffany & Co. pitching a tent there.

Shares of Coach closed at $42.03 with a 15 cents gain.

(Disclosure: Haute Retail holds positions in Coach Inc.

 

Photo: Coach Flagship Store in Shaghai/WWD

HR Quarterly Round-Up: LVMH, Givaudan, Talbots

(Photo Credit: Mitchell Feinberg/LVMH)

LVMH's Revenue Jumps on Restocking (WSJ): France's LVMH Moet Hennessy Louis Vuitton (MC.FR) Tuesday fueled hopes for a swift rebound in the luxury-goods sector after it posted an 11% surge in first-quarter revenue that beat expectations.

Givaudan Sales Up 9.2 Percent (WWD): Givaudan reported its first-quarter sales increased 9.2 percent year-over-year to 1.07 billion Swiss francs, or $1.01 billion at average exchange. The Swiss firm’s fragrances and flavors divisions both contributed to growth.

Talbots' profit shows proof of turn, shares rise (Reuters): Women's clothing retailer Talbots Inc (TLB.N) posted a much better-than-expected quarterly profit and forecast higher sales as its turnaround efforts take hold, sending its shares up nearly 5 percent.

Jil Sander Launches Lower-Priced Line

Citing the desire to widen it's customer base, Jil Sander announced the Spring 2011 launch of Jil Sander Navy, their new lower-priced line, reports WWD.

The line will be designed by Raf Simons and is described as "relaxed" and "sporty-chic". Prices will be 40% lower than their signature line, which has a price point ranging between $322 and $3,895. The collection will include trenchcoats, jackets, t-shirts, jeans, dresses, skirts, and pants, as well as accessories and shoes. Fabrics will consist of lightweight jersey and knits with an emphasis on abstract prints.

This is the first major launch under Alessandro Cremonesi, who took over as CEO of the company last July. “This is a strategic first step to grow the Jil Sander business as we aim to reach out to a vaster clientele. Not only does it address market needs, but it will complement the pre-collections and the runway offering", Mr. Cremonesi told WWD.

The line will hit all Jil Sander stores and retailers who presently carry their signature line in January. Initial focus will be on the U.S. and Japan markets to take advantage of the department store and speciality boutique dominance in those countries.

(Photo credit: Style.com)

Richemont Purchases Net-A-Porter for $341 Million

Natalie Massanet

(Photo: The Wall Street Journal/Reuters)

WWD reports Richemont has purchased the remaining 67 percent of Net-a-Porter.com, becoming the majority shareholder of the high fashion e-tailer, and thus increasing its presence in the world of e-commerce. 

The Swiss luxury goods group, which already owned 33 percent of Net-a-Porter, purchased the company from a group of private shareholders for approximately 225 million pounds, or $341 million  The Wall Street Journal reports. The deal values the internet business at 350 million pounds, or $532 million. Natalie Massanet, who founded Net-a-Porter, is stand to gain 50 million pounds, or $76 million from the sale of her company, and will stay on as executive chairman, according to WWD. 

For years, luxury companies have been apprehensive about entering e-commerce, siting concerns that easy access to luxury brands would ruin their prestigious image, and turnoff their high-end clientele. Then along came Ms. Massanet, who proved that with the right combo of retail and editorial, people are willing to purchase expensive goods online. This "luxury marriage" will allow Richemont to benefit from Net-a-Porter's e-tailing innovation as they venture into e-commerce with their Cartier brand, while Net-a-Porter will be able to tap into the emerging luxury market in Asia via Richemont's commercial presence in the region.

HR Quarterly Round-Up: Prada, Movado, Harry Winston

(Photo: Lionel Bonaventure/Getty Images)

Prada's Profits Increase, Revenue Slips (WWD): Leveraging the performance of its retail network, Prada SpA posted a 1.4 percent increase in net profits to 100.2 million euros, or $140.2 million, in the year ended Jan. 31.

Movado Q4 Loss Narrower Than Expected; Backs FY11 View (Reuters): Watchmaker Movado Group Inc reported a narrower-than-expected quarterly loss, helped by cost cuts, and reaffirmed its outlook for the current fiscal year.

Harry Winston Retail Loss Grows, Sales Rise (WWD): Harry Winston Diamond Corp.’s retail segment more than doubled its fourth-quarter operating loss despite a pickup in demand.

Swatch and Bulgari Squash Takeover Rumors

Swatch Group and Bulgari SpA have moved quickly to deny rumors of the Swiss company's interest in taking over the Italian jeweler.

In a statement to Reuters onMonday, Nick Hayek, Swatch Group CEO, said, "The Swatch Group has not expressed any desire to acquire Bulgari, and Bulgari has not expressed either the desire to be bought by Swatch Group. There are no negotiations in front of, or behind the curtains".

Bulgari issued a separate statement saying that they enjoyed good "business relationships" with Swatch, but that "the two Companies have never discussed any kind of transactions on shares. The Bulgari family is not interested in selling".

Speculation of a takeover first arose after comments Mr. Hayek made to German magazine, Focus, which suggested that Swatch was interested in purchasing Bulgari.

According to Reuters, Mr. Hayek said, "I do not deny that there are interesting big brands that have potential to develop" and gave Bulgari as an example. However, he insisted that Swatch was not the type of company to engage in hostile takeover battles.

Bulgari shares rose more than 5 percent after Mr. Hayek's comments were published.

(Photo: Courtesy of WWD)

HR Quarterly Round-Up: Tiffany & Co., PVH, Hermes

Audrey Hepburn in Breakfast At Tiffany's

Tiffany Profits Quadruple As Sales Sparkle (Times Online): Tiffany & Co, the New York-based luxury jewellery retailer, said that its fourth-quarter profits more than quadrupled, as high-end shoppers were lured back into its stores over the Christmas period.

Phillips-Van Heusen Returns to 4Q Profit (Business Week): Phillips-Van Heusen Corp. returned to a fourth-quarter profit, the clothing company said Monday, as its revenue climbed more than 6 percent thanks to stronger sales of its Calvin Klein brand.

Hermès lifts operating Profit in Spite of Downturn (Reuters): French luxury group Hermes (HRMS.PA) stopped short of giving an updated forecast for 2010 on Thursday after posting a rise in operating profit for 2009 in spite of the industry's worst downturn in two decades.

SOLD! Tommy Hilfiger Goes to PVH for $3B!

Looks like the rumors were true:

Phillips-Van Heusen to Buy Tommy Hilfiger
March 15, 2010

Phillips-Van Heusen, the clothing conglomerate that owns Calvin Klein, agreed on Monday to buy Tommy Hilfiger, once a leading purveyor of colorful preppy clothing, for about 2.2 billion euros ($3 billion), in cash and stock.

Phillips-Van Heusen, which also owns Arrow and Izod and licenses brands like Geoffrey Beene and Kenneth Cole New York, is hoping to take advantage of Tommy Hilfiger’s strong European distribution channels for its own products. Despite Tommy Hilfiger’s reputation as a quintessentially American clothier, two-thirds of the company’s business is based in Europe.

“Tommy Hilfiger fits all of our acquisition criteria: a strong brand, superior management, highly profitable, immediately accretive to earnings, and focused on international growth,” Emanuel Chirico, Phillips-Van Heusen’s chairman and chief executive, said in a statement.

Under the terms of the deal, Phillips-Van Heusen will pay 1.9 billion euros in cash and 276 million euros in stock, as well as assume 100 million euros of liabilities.

The bulk of the purchase price will be borrowed money. Phillips-Van Heusen intends to finance the cash portion of the deal and refinance $300 million worth of bonds with a combination of $385 million of cash on hand, $2.45 billion of bank loans (including an undrawn $450 million revolver) and $600 million of senior unsecured bonds.

The company will also issue $200 million of perpetual convertible preferred notes issued to LNK Partners and MSD Capital that convert at $47.74 a share with no coupon or liquidation preference. If fully exercised, the securities will convert into about 6 percent of Phillips-Van Heusen’s outstanding shares.

Phillips-Van Heusen also intends to issue $200 million of new shares before the deal closes.

The deal is subject to Phillips-Van Heusen’s obtaining the necessary financing. In case that does not happen, it will pay Apax Partners, the British private equity firm, a 69 million euro break-up fee.

While Mr. Hilfiger no longer holds a management role at the company that bears his name, he will remain a principal designer and a public face for the clothier under Phillips-Van Heusen.

Read more here.

This is a good deal for both parties: The acquisition of Tommy Hilfiger makes PVH the largest clothing company in the world, amassing $4.6B in global sales, and increases the company's international presence, particularly in Europe (where more than half of Hilfiger's business is based) and Asia (where Hilfiger enjoys strong distribution). On the flip side, this is perfect timing for Hilfiger which is in the midst of a comeback thanks to an overhaul of the brand. The company stands to experience growth, on par with Calvin Klein when it was acquired by PVH in 2003. Since then, CK has grown 12%-14% per year and boasted a 6% upswing in their fiscal 2009 performance.

Madonna Inks Deal With Iconix; Reveals

After much speculation, Madonna has official announced her joint venture with Iconx Brand Group Inc, called MG Icon LLC, and revealed details of her exclusive juniors' collection with Macy's:

MG Icon will be 50 percent owned by Iconix and 50 percent by Madonna and Guy Oseary, her longtime manager and the “G” in the joint venture’s name. MG Icon will develop a range of fashion-related business projects, including the creation of new brands, the acquisition of existing labels and the exploration of opportunities within the portfolio of 21 brands that Iconix and its other joint ventures already own, said Neil Cole, chairman and chief executive officer of Iconix.

[...]

Under terms of the joint venture, MG Icon will hold the right to use Madonna’s name and associated personality for apparel, footwear, accessories and other products. Madonna will also provide creative input and endorsement services in connection with the development and marketing of the venture’s brands and projects.

[...]

The Material Girl line at Macy’s will launch in 200 doors and on macys.com in time for back-to-school, with the aim of expanding to almost all of the department store’s 850 doors, said Jeff Gennette, chief merchandising officer at Macy’s Inc.

[...]

The collection initially includes apparel, footwear, handbags and jewelry, with retail prices ranging from $12 to $40. Offerings could expand into beauty and fragrance categories next year.

Material Girl is targeted at 13- to 25-year-olds, and Lourdes Leon, Madonna’s 13-year old daughter, is serving as the muse for the line and has been involved in design meetings for the collection. “Lourdes has an incredible sense of style and her point of view on fashion has definitely been an inspiration for the line,” said Gennette. (SOURCE: WWD.com)

Both Macy's and Madonna are about twenty-five years too late. The 13-25 yr-old demographic is not looking to Madonna for fashion inspiration.

HR Quarterly Round-Up: Gap, Dillard's

(Photo: AP)

Gap 4Q Profit Jumps 45%; Plans To Increase Dividend 18% (WSJ): Gap Inc.'s fiscal fourth-quarter profit grew by 45%, on strong sales at its long-struggling Old Navy chain, as the casual-apparel retailer announced plans to lift its annual dividend by 18% and launch a $1 billion stock-buyback effort.
Leaner Inventory Lifts Dillard's (Forbes): Department store operator Dillard's had a blowout day on Wall Street Monday. Shares of the Little Rock, Ark.-based company jumped nearly 20% on greatly improved year-over-year quarterly earnings, making Dillard's the second-biggest gainer on the New York Stock Exchange in March's first day of trading.

HR Quarterly Round-Up: Saks, Revlon, Limited Brands

Vintage Revlon Ad From The July 1949 Issue of Ladies' Home Journal

(Photo: Vintage 123)

Saks Fourth-Quarter Loss Narrows As Luxury Demand Heals (MarketWatch): Luxury retailer Saks Inc.'s fourth-quarter loss narrowed after it controlled inventory and expenses and slowed the rate of its sales decline.

Revlon 4Q Profit Up As International Sales Climb (Business Week): Beauty products company Revlon Inc. said Thursday that its profit rose 13 percent in the fourth quarter as reduced expenses, increased international sales and favorable exchange rates more than offset lower sales in the U.S.

Limited Beats Street, Bullish On February Sales (Reuters): Limited Brands Inc posted sharply higher profit on Wednesday that beat Wall Street estimates, and said its February same-store sales would likely be far better than expected.

HR Quarterly Round-Up: Nordstrom, Macy's, Liz Claiborne

(Photo: Kyle Ericksen/WWD)

Nordstrom's 4Q Profit More Than Doubles (NY Times): Carrying less inventory helped upscale retailer Nordstrom Inc. more than double its second-quarter profit compared with a year earlier, though it tempered its sales outlook for 2010 and its profit results fell slightly short of forecasts.
Lower Costs Lead Macy's To 4Q Profit (Crain's New York Business): Macy's Inc. returned to a fourth-quarter profit Tuesday as lower expenses helped the department store operator even as sales dipped.
 
Liz Claiborne quarterly sales, forecast miss view (Reuters): Liz Claiborne Inc. reported a fourth-quarter loss that matched analysts' expectations but sales and a first-quarter forecast that fell short, hurt by weak sales at wholesale and at its Mexx store chain.

Madonna For Macy's?

In today's "You're About Two Decades Late" headlines, WWD is reporting that Madonna is in talks with Iconix Brand Group to launch a contemporary women's line that will be sold exclusively at Macy's department stores:

The merchandise would include apparel, accessories, intimates and footwear. Label names under serious consideration for the product lines include Material Girl for the apparel and Truth or Dare for the lingerie and underwear.

I know I should reserve judgement until I see the clothes, but I must admit that my initial reaction is: Do people want to dress like Madonna? Her M by Madonna line for H&M had several cute pieces that would fit the Macy's aesthetic, but it wasn't as well received as people expected.  Which brings us to the subject of the success rate of celebrity lines:

Speaking to American Public Media, Marshall Cohen, NPD's senior analyst, estimated that the misses in celebrity lines outnumber hits by a two-to-one margin. Jessica Simpson had a successful footwear collection but has struggled with sportswear. Jennifer Lopez pulled the plug on her Sweetface last year amid the recession. Other fashion failures included efforts from Eve, Paris and Nicky Hilton and Whitney Port. (SOURCE: Retail Wire)

Madonna must bring something new and fresh, and naming your line Material Girl or Truth or Dare won't cut it.

Maria Pinto Closes Boutique; Files For Bankruptcy

Sad news. The Chicago Sun-Times has reported that Maria Pinto, the prominent Chicago designer who dressed First Lady Michelle Obama during the the 2008 presidential campaign, has decided to shut down her boutique and will file for bankruptcy:

Pinto said, ''After 20 years of pursuing my greatest passion and striving to build a successful high-end fashion business, the time has come for a new chapter in my life.''

Pinto cited ''increasing economic challenges and soft buying trends at the top end of the apparel market'' among the reasons for the downfall of her business, which includes the shuttering of her design and wholesale operations and the retail store on South Jefferson.

The news comes as a surprise to many in the industry. Ms. Pinto became the darling of the fashion world when Mrs. Obama wore several of her designs on the campaign trail (My favorite was the purple silk sheath Mrs. Obama wore when her hubby, President Barack Obama, clinched the democratic nomination. She looked gorgeous!). Last year, Ms. Pinto showed her Spring 2010 collection at NY Fashion in September, and was inducted into the CFDA last year. So, the question is: What happened? Why she wasn't able to capitalize on the Obama connection like J.Crew and Jason Wu, two of Mrs. Obama's fashion favorites? Kevin Wilder, retail analyst and president of Wilder, Inc., tells WWD that her wholesale business may have been the problem:

“If some of the boutiques she was selling to weren’t paying their bills, there’s only so long you can exist. I suspect that’s what happened,” said Wilder, also questioning whether Pinto was able to adjust her prices downward as some other designers have done.

Another potential factor could be Pinto's price point. While other luxury labels have either lowered their prices, or created products specifically for their budget conscience cliente, like Coach, Inc., Ms. Pinto kept her price point the same.

But Ms. Pinto says don't count her out just yet. ''I am confident that the 'Maria Pinto' name will not go away, but will merely take a break, before emerging in a new form. I plan on using the next several months to explore different avenues and opportunities for business, as economic conditions improve," Pinto said.

Alexander McQueen (1969-2010)

Lee Alexander McQueen

( March 16, 1969 - February 11, 2010)

RIP

HR Quarterly Round-Up: Bulgari, Jones Apparel, H&M

Garland necklace set with superb fancy colour pearls surrounded by sparkling clusters of soft color tones fine gemstones

(Photo: Bulgari.com)

Bulgari Revenue Falls 5.1% on Lower Luxury Spending (Bloomberg): Bulgari SpA, the world’s third- largest jeweler, said revenue declined 5.1 percent in the fourth quarter as the recession curbed consumers’ appetite for expensive watches and perfumes.

Jones Profit Could Miss Expectations; Shares Fall (Reuters): Retailer Jones Apparel Group Inc (JNY.N) reported a preliminary fourth-quarter profit that could be below analysts' current expectations, sending its shares down nearly 7 percent on Thursday.

H&M Net Profit Up 21%, Warns On Weak Margins (Marketwatch): Swedish fashion retailer Hennes & Mauritz on Thursday reported fourth-quarter net profit rose to 6.15 billion Swedish kronor ($844 million), or 7.44 kronor a share, against profit of 5.09 billion kronor, or 6.15 kronor per share, in the same period a year ago.

HR Quarterly Round-Up: Elizabeth Arden, Estee Lauder, Tod's

(Photo: Tod's S.p.A.)

Elizabeth Arden Quarterly Results Top Expectations (Reuters): Elizabeth Arden Inc's quarterly profit topped expectations as sales picked up, but the cosmetics maker remains cautious about the rest of the year as retailers manage inventories conservatively.

Estee Lauder's Profit Jumps; Sales Gain From Korea to Spain (MarketWatch): Estee Lauder Cos. said Thursday its fiscal second-quarter profit jumped 62%, helped by demand in Asia and Europe as well as by encouraging U.S. and U.K. holiday sales.

Tod's Posts Growth in 2009 Sales (Reuters): Italian designer shoe and bag maker Tod's reported an increase in 2009 sales, showing that it was one of only a few luxury goods companies to see any growth during the global financial crisis.

HR Quarterly Round-Up: Richemont, Burberry and Coach, Inc.

(Photo: Pascal Lauener/Reuters)

 

Richemont Sales Bolster Revival Hopes (FT): Richemont, the world's second-biggest luxury goods group, yesterday reinforced signs of a recovery in demand for expensive watches, jewellery and accessories with Christmas sales well ahead of expectations.

Burberry sales rise stronger-than-forecast 15% (Market Watch): U.K. luxury goods retailer Burberry reported a 15% rise in sales for its fiscal third quarter, sailing past analyst estimates, and the company said it now expects pretax profit for the year will reach the top end of market expectations.

Coach Profit Rises 11% on Holiday Sales (WSJ): Coach Inc.'s fiscal second-quarter earnings rose 11%, with a boost from holiday sales that improved over 2008's weak holiday season. Results beat Wall Street's expectations.

Macy's To Shut Down 5 Underperforming Stores

From Reuters.com:

Macy's to shut 5 underperforming stores

NEW YORK, Jan 5 (Reuters) - Macy's Inc (M.N) said on Tuesday it was closing five of its namesake department stores, affecting about 307 employees, as it pares underperforming locations.

Macy's said it would offer jobs at nearby stores to displaced employees when possible.

The five stores Macy's is closing are in Boise, Idaho; Waterford, Michigan; St. Ann, Missouri; Missoula, Montana, and Burlington, New Jersey. Those locations "no longer meet our performance requirements," Chief Executive Terry Lundgren said in a statement.

Clearance sales at the closed stores are set to begin on Sunday and last about 60 days, the company said.

The company also said it plans to open two Bloomingdale's stores in 2010, one in Santa Monica, California, and the other in Dubai, which will be the first foreign location for the upscale department store.

The Dubai store, which will be located at The Dubai Mall, is scheduled to open in February, a Macy's spokesman said.

In the three months ended in October 2009, the retailer opened or re-opened six stores. Following the closings announced on Tuesday, it will operate 809 Macy's stores and 40 Bloomingdale's locations.

Macy's has struggled with shrinking sales during the economic slowdown. In November it forecast that sales at its stores open for at least a year, or same-store sales, would fall between 5.4 percent and 5.7 percent during its current fiscal year.

Macy's is expected to announced December's same-store sales results on Thursday.

Shares fell 23 cents, or 1.4 percent, to $16.84 on the New York Stock Exchange.

(Reporting by Phil Wahba; Editing by Steve Orlofsky, Bernard Orr)