Haute Retail

Will PVH Make A Play For Warnaco?

2011-07-12T13:47:00.000-04:00

Looks like PVH is doing a little window shopping.

She was hardly the first to raise the possibility, but Wells Fargo Securities analyst Evren Kopelman played matchmaker Monday in a research note on what a PVH Corp./The Warnaco Group Inc. marriage might look like.

Think $9.3 billion in sales for the combined company and $1.4 billion in EBITDA in 2013 for an acquisition in mid-2012, making it the second largest apparel firm after VF Corp., which just grew larger with its planned $2.2 billion acquisition of Timberland.

The speculation follows PVH’s chief executive officer Emanuel Chirico’s recent comments that PVH would begin eyeing acquisitions again later in the year.

Warnaco has long been speculated as a possible target of PVH, Calvin Klein’s owner, since it holds the license for Calvin Klein jeans and owns the Klein underwear business.

Presuming that Polo Ralph Lauren Corp. would take back the Chaps license under a change in control provision, the Wells Fargo analyst pegged an EBITDA multiple of 8.8 times, or a $3 billion deal at $70 a share, for Warnaco.

When PVH acquired Tommy Hilfiger last year, one attraction was its European platform. The analyst reasoned that Warnaco would be attractive because of its business in Asia and Latin America, where PVH has less exposure.

Chanel Issues Recall of Silk Scarves and Garments

2011-07-07T14:04:00.001-04:00

Chanel, Inc., in cooperation with the U.S. Consumer Product Safety Commission (CPSC) has issued a recall for 120 silk scarves and 34 garments, due to a violation of Federal Flammability Standard.

The recall includes scarves, dresses, skirts and blouses made of 100 percent silk that were manufactured in France or Italy and sold in Chanel Boutiques, Neiman Marcus and Maxfield stores for $430 to $3,650 in March and April 2010.

Consumers should immediately stop using the garments and contact the firm to receive a full refund.

For more information, contact Chanel customer service at (800) 550-0005 or ConsumerRelations@chanelusa.com

Prada's IPO Debut? Eh.

2011-06-27T19:15:00.000-04:00

A souvenir Prada bag is offered to the Hong Kong Exchange during

the debut of Prada SpA at the Hong Kong Stock Exchange June 24, 2011.

(Photo: Bobby Yip/Reuters)

Good thing Prada lowered expectations.

From WSJ.com:

Prada, the first Italian company to list in Hong Kong, ended its first day of trade at 39.60 Hong Kong dollars (US$5.08), 0.3% higher than its IPO price of HK$39.50, after hitting an intraday high of HK$40. The shares stayed afloat as the Hang Seng Index staged a rebound, climbing 1.9%, although the benchmark index is still down 6.4% this month on growing worries about the European debt crisis and concerns about slowing Chinese growth.

"The rebounding market today helped the debut performance of Prada," said Ben Kwong, associate director of KGI Asia Ltd.

Hmm...

2011-06-21T14:57:00.000-04:00

Very interesting that H&M announces it's collabo with Versace one day before releasing its Q2 earnings, which are expected to drop for a record-breaking third consecutive period:

Earnings at H&M (HMb.ST), the world's second-largest fashion retailer, are expected to have dropped in the second quarter as the firm chose not to pass on higher costs such as cotton and Asian wages to price tags.

The Swedish budget apparel firm, with some 2,300 stores in 40 countries, will publish its March-May report on June 22 after unveiling last week a mere 2 percent year-on-year rise in sales to 27.6 billion crowns amid slack spending in Europe.

The mean forecast in a Reuters poll of analysts is for a 16 percent drop from last year in pretax profit to 5.89 billion crowns ($921 million). The gross margin is estimated at 62.0 percent, down from 65.9 percent a year ago.

Yarn House Rules

2011-06-21T10:35:00.001-04:00

All fashion industry eyes are on Vietnam where the seventh round of the Trans-Pacific Partnership (TPP) trade negotiations are taking place this week.

Reps from nine countries, including the U.S., have gathered in Ho Chi Minh City in hopes of coming to an agreement on a trade deal before the Asia-Pacific Economic Cooperative (APEC) meeting in November.

Fashion industry execs are paying close attention to the U.S. stance on textile and apparel import issues, particularly the rule of origin:

Importers plan to push negotiators in Vietnam for a “flexible” rule of origin that does not restrict where the fabric and yarns are made in order to qualify for duty free benefits. The rule-of-origin debate has pitted apparel importers against the U.S. domestic textile industry, which is advocating a “yarn forward” rule of origin that would require apparel to be made of fabric and yarn supplied by the U.S. or the other TPP partner countries.

“When you have a rule that is more restrictive and burdensome, it discourages trade and investment from occurring,” said Steve Lamar, executive vice president of the American Apparel & Footwear Association, who will also be in Vietnam this week, adding that AAFA member companies often use U.S. yarn and fabric and forgo duty free benefits in other trade deals because the rules are so burdensome.

But a yarn forward rule is a linchpin for U.S. textile industry support.
A bipartisan group of 52 House lawmakers, many from traditional textile states, recently sent a letter to U.S. Trade Representative Ron Kirk making their support of any deal contingent upon a yarn-forward rule of origin, exclusion of certain products from tariff reduction or elimination, tariff reductions for specific sensitive imported products versus phaseouts for groups of products, and strong customs enforcement language to prevent transshipments from China.

“It makes no sense in our opinion to disenfranchise textile producers in the U.S. so Vietnam [a nonmarket economy that subsidizes its exports] can source product components from China and ship products to the U.S. duty free,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. “What we know is that the yarn forward rule of origin will create an environment that gives support to expanding our export markets.”

Macy's Workers Threaten To Strike [UPDATE 3 6/17]

2011-06-14T09:35:00.037-04:00

UPDATE III 6/17:

Women's Wear Daily reports details of the contract agreement:

Under the terms of the contract, all union workers will receive a general raise of $3.05 an hour over the next five years, full-time employees who work between 35 and 40 hours a week are guaranteed to hold onto those hours, workers will get one guaranteed day off a month expect during the holiday season and they can select the day. Extra hours can be picked up by part-timers, who will be eligible to participate in the medical plan if they reach full-time hours, no vacation benefits will be reduced and Macy’s will contibute more to cover the cost of health care while the workers will pay less.

According to a union officials, the new contract “delivers real gains and protections for the Macy’s workforce in the New York City area.”

UPDATE II 6/16 @10:20am:

NYC Macy's workers reach tentative agreement

The retailer and the union representing workers at several of its New York City area locations reached a tentative contract agreement Thursday morning.

(AP) - Macy's and the union representing workers at its flagship Manhattan store and three other New York locations reached a tentative contract agreement Thursday following all-night negotiations.

The union and Macy's made the announcement on the five-year proposed pact in separate statements.

Local 1-S of the Retail, Wholesale and Department Store Union said workers at the Herald Square flagship store would begin voting on the proposed contract on Thursday. Workers at the other stores, in the Bronx, Queens and Westchester County, would vote next Monday through Wednesday, it said.

"This is a solid contract and it reflects the fact that our workers are the true magic of Macy's," said RWDSU President Stuart Appelbaum. (MORE...)

UPDATE 6/16 @7:30am: Reuters reports negotiations continue past the midnight deadline into the morning.

If you live in Manhattan, the Bronx, Queens or White Plains, NY, and you need to get a few items at Macy's, you better hurry!
After five weeks of intense negotiations between Macy's management and the Local 1-S of the Retail, Wholesale and Department Store Union, 4000 workers have voted to strike if they can't come up with a new contract by 11:59pm Wednesday. Among the issues are benefits, wages and work hours:

Under the contract proposed by Macy’s, new employees would receive a 401(k) package rather than a defined-benefit pension plan; hours would be set by a new computerized system, which would dole out work assignments on a first-come-first-served basis, rather than recognize seniority or student or family schedules; and workers would pay more for health care.

Management has proposed a 35-cent hourly wage increase for current workers, and no change to the starting hourly wage of $7.50, which union negotiators have said does not constitute a living wage in New York.

However, with Macy's posting comp. sales up 7.4% in May, first quarter sales for FY 2011 up 5.7% to $5.89M and net income for the quarter increased to $131M from $23M, union officials feel management can afford to share the wealth.

“This is a company that’s in great shape financially, so it’s unacceptable for Macy’s to try to extract such massive concessions when many members of its workforce are struggling,” said Stuart Appelbaum, president of the RWDSU. “This is a textbook case of corporate greed and excess. Macy’s is in a position to give its workers a much better contract. It must stop trying to take away everything its dedicated workers have fought so hard and so long to get.”

Tom Ford Expands His Beauty Collection

2011-06-12T08:00:00.002-04:00

Products from the Tom Ford Beauty collection

(Photo Credit: Thomas Iannaccone/WWD)

Tom Ford sets out to redefine the world of prestige beauty with the launch of his expanded color collection in September.
With five FIFI awards under his belt, total Tom Ford Beauty global retail sales estimated at $150 million, a strong debut of his lip color collection (retail sales of $6 million in just 100 stores!), plus a resurgence in consumers' appetite for luxury products, the time is right for Mr. Ford and Estée Lauder Cos. Inc. to expand.

Here are the deets for the beauty mavens:

The color cosmetics collection will have 132 products, including six skin care products, ranging in price from $30 to $250
The collection includes contouring products Shade and Illuminate cream duet, heavily pigmented lip glosses like Lost Cherry and caligraphy tip brow pens
Skin care products include Traceless Foundation Stick, Illuminating Protective Primer, Purifying Crème Cleanser and Intensive Infusion Concentrate Extreme, which is an oil-based serum.
The Private Blend Lip Color Collection includes 18 shades (up from 12) and will retail at $48
Two new Private Blend Collection fragrances: Santal Blush and Jasmine Rouge priced from $195 to $475
A new Signature Collection fragrance: Violet Blonde.

Keeping in line with Mr. Ford's exclusivity mantra, the new color line will only be in 35 doors worldwide, and sold in Tom Ford stores, Berdorf Goodman, and select Neiman Marcus and Saks Fifth Avenue stores in the U.S.. Overseas, Italy’s La Rinascente and the U.K.’s Harvey Nichols and Selfridges will carry the line. A rollout in Asia is planned within 18 months of its launch.

The lip color and new fragrances will have a slightly wider global distribution -- 100 and 225 doors respectively -- and will be sold in the aforementioned stores, as well as Nordstrom and Bloomingdales. In the U.S., Saks will get a four-week exclusive on Violet Blonde in August before the fragrance is rolled out to other stores.

Industry sources estimate the line to do $40 million in global retail sales the first year, and $400-$500 million globally in five years.

(SOURCE: Estée Lauder Puts Together a Prestige Brand - WWD)

Radha Chadha: Men Are Driving China's Luxury Goods Sales

2011-06-09T09:13:00.001-04:00

(Source: Bloomberg.com)

In an interview with Bloomberg Television's Rishaad Salamat, author and brand consultant Radha Chadha discusses the emerging luxury market in China, and how men are the driving force behind it.

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

2010-06-14T08:33:00.003-04:00

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

2010-05-28T10:08:00.002-04:00

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

2010-05-21T18:46:00.033-04:00

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

2010-05-19T19:00:00.013-04:00

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

2010-05-17T18:54:00.044-04:00

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

2010-05-13T18:00:00.026-04:00

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

2010-05-07T13:50:00.003-04:00

(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

2010-05-06T14:08:00.000-04:00

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

2010-04-30T17:58:00.007-04:00

(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

2010-04-29T20:00:00.034-04:00

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"

2010-04-29T19:04:00.001-04:00

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

2010-04-28T12:05:00.001-04:00

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

2010-04-22T16:04:00.003-04:00

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

2010-04-20T19:32:00.003-04:00

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

2010-04-14T18:27:00.007-04:00

(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

2010-04-12T12:58:00.011-04:00

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

2010-04-05T19:44:00.015-04:00

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

2010-04-02T18:42:00.002-04:00

(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

2010-03-30T06:00:00.001-04:00

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

2010-03-25T19:00:00.036-04:00

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!

2010-03-15T19:29:00.055-04:00

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

2010-03-11T19:50:00.002-05:00

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

2010-02-26T19:24:00.008-05:00

(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

2010-02-25T19:48:00.036-05:00

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

2010-02-23T19:30:00.000-05:00

(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?

2010-02-16T19:01:00.000-05:00

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

2010-02-15T19:55:00.007-05:00

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)

2010-02-11T19:16:00.001-05:00

Lee Alexander McQueen

( March 16, 1969 - February 11, 2010)

RIP

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

2010-01-29T17:55:00.001-05:00

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

2010-01-28T18:00:00.037-05:00

(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.

2010-01-20T18:11:00.005-05:00

(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

2010-01-05T17:49:00.001-05:00

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)

Saks Drops "Poison-Pill" Plan

2009-12-15T19:00:00.001-05:00

From NYTimes.com:

Saks Dismantles Shareholder Rights Plan
December 14, 2009, 6:48 pm

Saks said on Monday it was ending changes it made to its shareholders rights plan last year when it sought to prevent a potential hostile takeover by Mexican billionaire investor Carlos Slim Helu, Reuters reported.

In a statement, Saks’s chief executive, Steve Sadove, said those steps were “no longer necessary” because of a change made last month to its revolving credit agreement, which raised a “change-of-control” threshold to 40 percent from 20 percent.

In November 2008, the upscale retailer, known for its flagship Saks Fifth Avenue store in Manhattan, introduced the changes to protect itself after Mr. Slim reported a stake in the company of 17.8 percent, making him the biggest investor.

At the time, the company said it would distribute one preferred share purchase right for each outstanding share of Saks common stock.

Saks had also said last year that if any individual or investor reached or surpassed a 20 percent stake, those rights would let shareholders buy shares at a 50 percent discount and give them ammunition to block an unwanted overture.

Saks said at the time that the action was intended to “impose a significant penalty upon any person or group” acquiring 20 percent.

Mr. Slim owned 25.6 million shares, or 16.1 percent, of Saks’s shares as of April 6, the most recent date for which data is available, according to Thomson Reuters.

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

2009-11-24T19:03:00.002-05:00

(Photo: Reuters/Mike Segar)

J.Crew full-price sales spur profit beat, shares up (Reuters): J Crew Group Inc reported a quarterly net profit far above Wall Street estimates due to strong autumn sales of clothing and expanded profit margins from depressed year-ago levels. The shares of the upscale apparel retailer rose 7 percent in after-hours trading.

Tiffany Profit Tops Analyst Estimates on Sales Gains (Bloomberg): Tiffany & Co., the world’s second- largest luxury-jewelry retailer, reported third-quarter profit that topped analysts’ estimates and boosted its full-year forecast as revenue grew in Asia and Europe. The shares gained.

HR Quarterly Round-Up: Limited, Gap, Ann Taylor

2009-11-20T19:31:00.017-05:00

(Photo: Slate.com)

Limited Brands Beats Street, Shares Up (Reuters): Limited Brands, owner of the Victoria's Secret and Bath & Body Works chains, posted a higher than expected quarterly profit on Wednesday, sending shares up 3.5 percent after hours.

Gap Says Profit Rose 25%, Plans to Buy Back Shares (Bloomberg): Gap Inc., the operator of the Old Navy and Banana Republic clothing chains, reported third-quarter profit rose 25 percent as inventory declined, and said it plans to buy back more stock.

Ann Taylor Reports Profit, but Sees Soft Holiday Sales (NYT): The clothing retailer Ann Taylor Stores posted a better-than-expected fiscal third-quarter profit on Friday, but shares fell as the company forecast soft sales for the holiday shopping season.

HR Quarterly Round-Up: Dillard's, Saks, Burberry

2009-11-17T19:55:00.035-05:00

(Photo: Reuters/Shannon Stapleton)

Dillard's Swings To 3Q Profit On One-Time Gain, Beats Street (WSJ): Dillard's Inc. swung to a fiscal third-quarter profit on a tax gain, but results excluding that were much better than analysts feared as the retailer continued its turnaround effort.

Saks Beats Street, Shares Up (Reuters): Upscale U.S. department store operator Saks Inc. reported a quarterly profit that beat Wall Street expectations for a loss, stoking investor hopes for a luxury market recovery and sending shares up 4.4 percent.

Burberry First-Half Profit Fell 24% But Dividend Lifted (MarketWatch): Burberry reported a 24% fall in first-half profit, with the results buffered by cost cuts and strong demand for its leather goods, but the U.K. luxury-goods group lifted its dividend 4% and expressed optimism for the future.

HR Quarterly Round-Up: Abercrombie & Fitch, Richemont

2009-11-14T15:52:00.028-05:00

(Photo: Reuters/Chip East)

Abercrombie & Fitch Profit Tops View, Shares Up (Reuters): U.S. teen apparel retailer Abercrombie & Fitch posted a much better-than-expected quarterly profit helped by cost cuts and said it plans to speed up its expansion in more profitable markets overseas, sending shares up 6 percent.

Richemont Gains as Rupert Plans to Step in as Chief Executive (Bloomberg): Cie. Financiere Richemont SA, the world’s largest jewelry maker, rose the most in three months in Zurich trading after profit beat estimates and Chairman Johann Rupert said he’ll become chief executive officer to guide the company through the worst recession since the Great Depression.

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

2009-11-13T18:25:00.016-05:00

(Photo: Reuters/Rick Wilking)

Macy's Holiday Outlook a Turkey, Stock Drops (Reuters): "U.S. department store operator Macy's Inc (M.N) forecast earnings for the fourth quarter, which includes the crucial holiday shopping season, far below Wall Street expectations on Wednesday, sending shares down 8.1 percent."

Nordstrom 3Q Profit Rises But So Do Costs (NYT): "Department store operator Nordstrom Inc. said Thursday that its profit rose 17 percent in the third quarter even though its costs were higher than expected as shoppers began spending more."

Bulgari Climbs to 14-Month High After Earnings Beat Estimates (Bloomberg): Bulgari SpA, the world’s third- largest jeweler, rose to a 14-month high in Milan trading as some brokerages raised their targets on the stock following third-quarter earnings that beat analysts’ estimates.

October Same-Store Sales Roundup

2009-11-05T10:00:00.001-05:00

U.S. retailers posted October same-store sales that offered a mixed bag of results, indicating that retail is in for a disappointing holiday season.

Despite total U.S. comp. sales rising 2.1% in October, the largest increase since July 2008 according to the International Council of Shopping Centers (ICSC), 52% of retailers reported October sales that came in below Wall Street estimates, according to Reuters.

"October results are not going to give investors the overall warm and fuzzy that we're on track for a strong Christmas," said Brean Murray, Carret & Co analyst Eric Beder, "It looks like we're on track for kind of a mediocre season right now based upon October." (SOURCE: Reuters.com)

However, some industry analysts are optimistic. ICSC projects Nov. same-store sales to rise 5-8%, and holiday same-store sales to rise 1%.

The teen retail sector delivered an October surprise to analysts, claiming the "worst performer" title for the month. Aeropostale Inc. underperformed, posting same-store sales gains of 3% vs. the 14% rise analysts' estimated. Comps at American Eagle Outfitters Inc. sunk 5%, missing the 2% gain analysts projected for the company. As a result, shares in both companies dropped 13.6% and 12%, respectively, with Aeropostale experiencing its biggest one-day decline since Dec. 2008.

High end appears to be on the rise with a 1.8% increase in comp. sales in Oct. for the luxury sector, according to ICSC.

“The improvement in the stock market has had a significant impact on the affluent shopper’s willingness to spend as the luxury market has shown its first positive reading since May 2008,” said Michael Niemira, chief economist and director of research for the International Council of Shopping Centers. (SOURCE: WWD.com)

Saks Inc. reported a comp. sales gain of 0.7% for the month, beating analysts expectations. The luxury chain reported "experienced continued weakness" in their Saks Fifth Avenue stores, however OFF 5TH and Saks Direct flourished. Management projects mid to high single digit declines in comps. for the second half of 2009.

Nordstrom, Inc. delivered a 6.5% increase in same-stores sales for the month, which topped estimates.

October comp. sales for Neiman Marcus slid 6.0%. Same-store sales in their Specialty Retail Stores segment, which includes Neiman Marcus and Bergdorf Goodman stores, fell 6.2%. Neiman Marcus Direct, which includes their online and catalog operations for Neiman, Bergdorf and Horchow, decreased 4.8%.

Abercrombie & Fitch Co. continues to struggle, posting a loss of 15% for the month, slightly worse than estimates.

Macy's Inc. reported a 0.8% dip in same-store sales, slightly higher than the 0.1% decline analysts predicted according to Thomson Reuters. Online sales (macys.com and bloomingdales.com), which were up 34.6% for the month, helped the company's comp. sales by 0.6 percentage points.

Limited Brands, Inc. posted a 4% decrease in comp. sales for October, falling short of analysts' estimates of a 3.1% decline. Same-store sales losses in Victoria's Secret Stores and La Senza, 6% and 7% respectively, helped drive down Limited's comps.

PPR Falls in Paris on Missed Sales Estimates, Gucci’s Decline

2009-10-21T18:22:00.005-04:00

PPR Falls in Paris on Missed Sales Estimates, Gucci’s Decline

By Ladka Bauerova

Oct. 21 (Bloomberg) -- PPR SA, the owner of the Gucci brand, fell the most since July in Paris trading after reporting revenue that missed analysts’ estimates, hurt by declining luxury-goods orders in the U.S. and western Europe.

Sales dropped 7.6 percent to 4.56 billion euros ($6.8 billion) from 4.94 billion euros a year earlier, Paris-based PPR said yesterday after stock markets closed, below the 4.63 billion-euro median estimate of three analysts surveyed by Bloomberg. At Gucci Group, which accounts for almost a fifth of revenue, the sales drop accelerated to 6.4 percent.

Chief Financial Officer Jean-Francois Palus blamed the shortfall on a “low point” in demand from third-party luxury retailers such as U.S. and western European department stores. Gucci’s figures were worse than those posted earlier this week by PPR’s largest rival, LVMH Moet Hennessy Louis Vuitton SA, whose Louis Vuitton brand posted growth on “exceptional” demand for its handbags in China.

“The market may have expected a positive surprise” for PPR after Vuitton’s figures, Citi analyst Thomas Chauvet said in a note this morning, calling the figures “a bit light.”

PPR shares fell as much as 6 percent, the most since July 2, and were down 3.49 euros, or 4.1 percent, to 81.68 euros at 10:38 a.m. in Paris. The stock has gained 75 percent this year, outperforming LVMH, which has risen 52 percent.

Gucci Group’s decline was paced by a 3.2 percent drop at the core Gucci brand. Excluding currency moves, Gucci brand stores open at least a year saw their sales decline 8 percent. Palus said a lull in tourism by rich shoppers, especially from Russia and the Middle East, hurt Gucci Group outlets in Monte Carlo, Cannes and Paris.

Analysts including Luca Solca of Sanford C. Bernstein said PPR sales may rebound in the fourth quarter, as wholesale customers are likely to replenish their inventories.

(SOURCE: Bloomberg.com)

Coach 1Q Profit Dips As Sales Rise; Beat Wall St. Analysts Estimates

2009-10-20T19:18:00.043-04:00

Coach Inc.'s new pricing strategy is starting to look promising, as the luxury accessories company posted FY 1Q profits and sales that beat Wall St. estimates.

The company reported a fiscal first-quarter earnings drop of 3.4% to $141M, or $0.44 per share, vs. $146M, or $0.44 per share in the previous year.

Sales for the quarter rose 1.2% to $761.4M from $753M in fiscal 1Q '08.

Analysts surveyed by Thomas Reuters expected $0.39 per share, and sales of $753.8M.

Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc., attributed the recent decision to revamp Coach's pricing strategy, and the introduction of the Poppy line, to this quarter's better-than-expected results:

“We experienced sequential improvement in our North American retail business this quarter, as the initiatives put into place earlier this year proved successful. Specifically, Coach benefited from the well received launch of the Poppy collection and other products at particularly compelling prices.”

Analysts also noted that Coach increased usage of 20% off coupons for their outlets stores, which helped to drive demand.

Direct-to-consumer sales, which include their China business, rose 10% to $654M for the quarter vs. $592M for the previous year. Total sales in Japan, Coach's second largest market, declined 3%, minus exchange rate fluctuations. Comp. sales in North American fell 1.1%, an improvement from the 6.1% decline in the previous quarter. China continued to show strength with double-digit same-store sales growth.

Indirect consumer sales, which represents 15% of Coach's business, dropped 33% to $108M as a result of reduced shipments to U.S. department stores.

As a result of the rapid growth the company is experiencing in China, Mr. Frankfort said Coach plans to open their first Mainland China flagship store in Spring 2010 in Shanghai. To help manage their growth in China, they also plan to open an Asian distribution center in Shanghai.

The company announced plans to open their first stand-alone men's store in NYC this Spring.

Despite beating analysts expectations, investors were apprehensive about the company's expansion, causing the stock to slip 2.8% during midday trading.

"Expectations for Coach have risen pretty noticeably, so anything that detracts from that basis is going to be viewed as a negative," said Wall Street Strategies analyst Brian Sozzi. (SOURCE: Reuters.com)

However, analysts remain upbeat:

"They're very well positioned to have a strong holiday," Needham & Co analyst Christine Chen said. "They should be able to return back to positive same-store sales ... because the product seems to be gaining traction with consumers." (SOURCE: Reuters.com)

For the holiday season, Coach plans to implement the same marketing strategy used to introduce Poppy, concentrating more on email campaigns, online ads, fashion blogs and social networking sites, like Facebook.
The company also plans to launch several new items including new accessory groups, Waverly and Gramercy, a new tote group, Alex and new Poppy items under $100.

Coach shares were down 3.2% to close at $33.41.

Disclosure: Haute Retail holds positions in Coach, Inc.

LVMH Beats Estimates on Vuitton, Says Cognac Sales Picking Up

2009-10-20T15:39:00.002-04:00

LVMH Beats Estimates on Vuitton, Says Cognac Sales Picking Up

By Ladka Bauerova

Oct. 19 (Bloomberg) -- LVMH Moet Hennessy Louis Vuitton SA, the largest luxury-goods maker, reported third-quarter revenue that beat analysts’ estimates after “exceptional” demand for Vuitton bags in China, and said cognac demand is improving.

Sales slipped to 4.14 billion euros ($6.2 billion) from 4.16 billion euros a year earlier, the Paris-based company said today after markets closed. That surpassed the 4.07 billion-euro median estimate of five analysts surveyed by Bloomberg News.

Sales of Louis Vuitton apparel and accessories posted “double-digit” growth, LVMH said. Demand for cognac “significantly” improved as wholesalers in the U.S. began to replenish their inventories during the quarter, the company said, echoing the outlook from smaller liquor rival Remy Cointreau SA released last week.

“I can’t say the crisis is over yet, but we are beginning to see some light at the end of the tunnel,” Chief Financial Officer Jean-Jacques Guiony said during a conference call. “Louis Vuitton’s performance in China was exceptional.”

LVMH shares rose 2.45 euros, or 3.4 percent, to 74.90 euros in Paris trading today, the highest in more than a year. They have rallied 57 percent in 2009 after tumbling 42 percent last year, when Lehman Brothers Holdings Inc.’s bankruptcy spooked luxury-goods buyers.

Revenue at the company’s fashion and leather goods division gained 5.3 percent, fueled by Vuitton sales. Wholesale sales of other LVMH fashion brands including DKNY and Fendi had a “double-digit” decline in the third quarter, though they improved in September, Guiony said.

Revenue at LVMH’s wines and spirits division, which makes Veuve Clicquot champagne and Hennessy cognac, fell 8.6 percent in the quarter as drinkers in the U.S. and Russia cut back. Unlike cognac, the champagne market “remains difficult” as some consumers switch from LVMH’s expensive vintages to cheaper brands, Guiony said.

Watch and jewelry sales, which make up about 5 percent of total revenue, dropped 22 percent, while perfumes and cosmetics slid 4.6 percent. The retail unit, which includes the Sephora cosmetics chain and Duty Free Shops, climbed 2.5 percent.

(SOURCE: Bloomberg.com)

US Retail Sales Rise In September, Raise Holiday Hopes

2009-10-09T11:58:00.016-04:00

US retail sales rise in Sept, raise holiday hopes

By Jessica Wohl

CHICAGO, Oct 8 (Reuters) - U.S. retailers gave investors an early Christmas present, posting their first monthly sales increase in more than a year and suggesting wounded consumers might begin to heal in time for the crucial holiday season.

Chains such as Macy's Inc (M.N), Abercrombie & Fitch (ANF.N) and Kohl's Corp (KSS.N) surprised Wall Street on Thursday with better-than-expected September sales as shoppers headed back to stores for back-to-school purchases.

"It signals a bottom," said Wharton School marketing professor Stephen Hoch. "This month was not just not as bad as we thought it could be, but it was actually not so bad."

But retail experts cautioned that the sales results did not yet presage a consumer-driven recovery to the U.S. economy. The International Council of Shopping Centers said October same-store sales should be about flat with a year earlier.

"It might be too early to say consumers are actually coming back to the stores and spending more," said Booz & Co Principal Marcelo Tau. "I still feel that there is a lot of pressure on consumers."

Based on 30 retailers, sales at stores open at least a year climbed 0.6 percent, compared with expectations for a 1.1 percent decline, according to Thomson Reuters data. Nearly 80 percent of the companies beat expectations.

READ FULL ARTICLE HERE.

Irving Penn, Iconic Fashion Photographer, 92

2009-10-08T11:39:00.001-04:00

(Photo: Irving Penn/ tfs: Gold Star)

From The New York Times:

Irving Penn, Fashion Photographer, Is Dead at 92
By ANDY GRUNDBERG

Irving Penn, one of the 20th century’s most prolific and influential photographers of fashion and the famous, whose signature blend of classical elegance and cool minimalism was recognizable to magazine readers and museumgoers worldwide, died Wednesday morning at his home in Manhattan. He was 92.

His death was announced by Peter MacGill, his friend and representative.

Mr. Penn’s talent for picturing his subjects with compositional clarity and economy earned him the widespread admiration of readers of Vogue during his long association with the magazine, beginning in 1943. It also brought him recognition in the art world; his photographs have been exhibited in museums and galleries and are prized by collectors.

His long career at Vogue spanned a number of radical transformations in fashion and its depiction, but his style remained remarkably constant. Imbued with calm and decorum, his photographs often seemed intent on defying fashion. His models and portrait subjects were never seen leaping or running or turning themselves into blurs. Even the rough-and-ready members of the Hell’s Angels motorcycle gang, photographed in San Francisco in 1967, were transformed within the quieting frame of his studio camera into the graphic equivalent of a Greek frieze.

Instead of spontaneity, Mr. Penn provided the illusion of a seance, his gaze precisely describing the profile of a Balenciaga coat or of a Moroccan jalaba in a way that could almost mesmerize the viewer. Nothing escaped the edges of his photographs unless he commanded it. Except for a series of close-up portraits that cut his subjects’ heads off at the forehead, and another, stranger suite of overripe nudes, his subjects were usually shown whole, apparently enjoying a splendid isolation from the real world.

READ THE FULL STORY HERE.

Jimmy Choo Expands Into The World of Fragrance

2009-10-06T16:30:00.064-04:00

Jimmy Choo, the UK luxury accessories company best known for its sexy shoes, has entered into a worldwide license agreement with Inter Parfums SA.

The 12-yr agreement will begin on Jan. 1, 2010 and will include the creation, development and distribution of fragrances under the Jimmy Choo brand.

Tamara Mellon, founder and president of Jimmy Choo states, "It has always been my vision to fully accessorize the woman, and fragrance is an integral part of the modern wardrobe. Through our association with Inter Parfums, I look forward to bringing this important aspect of my vision to life."

"This relationship with Jimmy Choo offers a perfect fit with our strategy of expanding our brand portfolio to include new universes and represents an important milestone in the company's development", said Jean Madar, Chairman & Chief Executive Officer of Inter Parfums, Inc. "This brand possesses the quintessential qualities to ensure the ambitious development of fragrance lines that will be supported by significant advertising commitments over the coming years".

This isn't the first fragrance licensing deal for Jimmy Choo. According to WWD, Selective Beauty, a subsidiary of Investindustrial, held the fragrance license for the company. However, a scent was never developed.

Macy's Inks Exclusive Deal With Ellen Tracy

2009-10-06T10:06:00.001-04:00

After much industry speculation, Macy's, Inc. has announced they have entered into a strategic alliance with Ellen Tracy owner, Brand Matter LLC, and and its sportswear licensee, RVC Enterprises that will make Macy's the exclusive department store retailer of Ellen Tracy women's sportswear, beginning in spring 2010.

The exclusive Ellen Tracy better sportswear line will have a modern twist, focusing on separates that consist of jackets, shirts, pants, sweaters, woven tops, knit tops and bottoms. Price points will range from $99 to $149 for jackets and $50 to $99 for pants.

"Ellen Tracy is a legendary brand that is well-known to our customers and backed by an outstanding design team. In particular, Ellen Tracy delivers exceptional value to women who expect quality and want a relevant look for today's world at work and on the town," said Jeff Gennette, Macy's chief merchandising officer.

Mark Mendelson, president and CEO of the Ellen Tracy division of RVC, said, "My team and I are thrilled to bring the Ellen Tracy heritage and style to a more accessible pricepoint. We look forward to entering, building and eventually becoming one of the leading brands in the better department".

"We are excited to form this long term tri-partnership with RVC and Macy's. Macy's is the preeminent national department store in the United States and we believe that the Ellen Tracy brand will add significant accretive sales to the better sportswear floor", says Bill Sweedler, co-chairman and CEO of Brand Matter.

Initial launch of the exclusive sportswear line will begin in 100 Macy's stores and online at macys.com in March 2010, with plans for additional stores in the future. Macy's flagship stores in Herald Square in NYC, Union Square in San Francisco, State Street in Chicago and Dadeland in Miami are among those who will carry the Ellen Tracy shops in the initial launch.

This is a major coup for Macy's that could put them ahead of their competitors. When Ellen Tracy decided to move from bridge to better sportswear, a huge gap was left for retailers, since, for years, the brand served as an anchor for the bridge floors of department stores like Nordstrom, Lord & Taylor, Saks, Bloomingdale's and Dillard's. These department stores have been scrambling for a replacement ever since. Now, that Macy's will be carrying the brand exclusively, retailers are doubly concerned.

Ellen Tracy will be among a group of exclusive brands in partnership with Macy's, including Tommy Hilfiger, Martha Stewart Collection, Rachel Rachel Roy and Donald Trump.

(SOURCE: Macy's Press Release)

Coach Slaps Target With Another Lawsuit

2009-10-05T09:15:00.000-04:00

It's back to the courtroom for Coach, Inc. and Target.

WWD reports that the luxury accessories maker has filed a complaint with the U.S. District Court in Manhattan alleging that Tarjay "has sold knockoffs of its Patchwork and Ergo designs" in its stores. Coach claims that they saw the items for sale at the retailer over the summer.

Brand attorneys for Coach wrote, “Target is not authorized by Coach to manufacture, distribute, advertise, offer for sale, and/or sell merchandise bearing Ergo Designs or the Signature Patchwork Designs or designs confusingly similar there to". Target has made no comment.

This latest lawsuit comes almost three years after an earlier courtroom drama between the two companies. In 2006, Coach filed a $1M trademark infringement suit against Target, accusing them of selling a Coach handbag at a Target store in Largo, FL. The case was dismissed.

H&M Teams Up With Sonia Rykiel For Winter '09 and Spring '10 Collections

2009-09-28T14:40:00.001-04:00

Nathalie Rykiel, President and Artistic Director at Sonia Rykiel

(Photo: Matthieu Salving/H&M)

H&M has tapped Sonia Rykiel as guest designer for their Winter 2009 and Spring 2010 collections. This will be H&M's eighth partnership with a high-end designer.

The winter collection will consist of lingerie and accessories, making this the first time H&M has ventured into the world of lingerie. The line will launch on December 5th, and will be available in 1500 H&M stores worldwide. The lingerie collection will simultaneously be available in Sonia Rykiel boutiques worldwide.

The Spring 2010 collection will consist of Rykiel's infamous knitwear for women and girls, as well as accessories. This collection will launch in 250 H&M on February 20, 2010.

“Sonia Rykiel is a true fashion icon who invented a signature style around femininity, Parisian chic and modernity - as well as functional, comfortable, wearable clothes", says Margareta van den Bosch, H&M's creative advisor.

Nathalie Rykiel, president and artistic director of Sonia Rykiel says, "The Sonia Rykiel pour H&M lingerie collection is the ideal way to offer the essence of Rykiel to a great number of women around the world, and a beautiful way to close the year. The knitwear collection is perfect for welcoming a colourful new season".

Obit: Donald Fisher, 81. Gap Co-Founder

2009-09-28T08:55:00.003-04:00

SAN FRANCISCO (Reuters) - Donald Fisher, who co-founded Gap Inc (GPS.N) with his wife Doris forty years ago, died on Sunday after a battle with cancer, the clothing retailer said.
He was 81.

The company that the Fishers began as a little denim store in San Francisco now operates more than 3,100 stores in the United States, the United Kingdom, Canada, France, Japan and Ireland, and it has been credited with inventing the specialty retail category.

The Fishers opened their first store in San Francisco in 1969, and named it The Gap in reference to the generational differences between baby boomers and their parents.

When it first opened, the Gap mainly sold Levi's jeans, tapes and records, and it flourished in 1970s as consumers snapped up its denim.

Read the full story at Reuters

H&M Sales Drop Worsens in August Because of Inventory Shortage

2009-09-24T17:24:00.017-04:00

By Sarah Shannon

Sept. 24 (Bloomberg) -- Hennes & Mauritz AB, Europe’s second-biggest clothing retailer, said a sales decline worsened in August because of a shortage of discounted inventory.

Revenue at stores open at least a year fell 11 percent last month, the fourth consecutive drop and worse than July’s 3 percent decrease, Stockholm-based H&M said today. The retailer also reported a 4 percent gain in third-quarter net income to 3.46 billion kronor ($504 million), below the 3.5 billion kronor average estimate of 11 analysts compiled by Bloomberg.

H&M said sales in Spain, the U.S. and France were “weak” in the third quarter because it had too little inventory to keep pace with discounting by competitors. Same-store sales declined 6 percent, though gross margins widened by 0.8 percentage points, led by internal currency hedging policies.

“The stock is down as people are looking at the markdowns and the sales deterioration,” Chris Walker, an analyst at Nomura, said by phone. “The gross margin is a positive surprise from their hedging policy, so we’re not too concerned.”

H&M fell 12 kronor, or 2.9 percent, to 396.50 kronor at 11:10 a.m. in Stockholm trading. The shares have risen 30 percent this year, compared with the 27 percent gain of rival Inditex SA.

H&M said it plans to increase store numbers by 240 this year, raising the target from 225. Planned openings include 18 Monki and Weekday stores and nine higher-priced COS outlets. The retailer will start selling fashions online in the U.K. from fall of 2010, it also said today.

‘Demonstrating Confidence’

“This is clearly demonstrating business confidence and we expect will be positively received by the market,” Alessandra Coppola, an analyst at Standard & Poor’s Equity Research in London, said by e-mail. She has a “sell” recommendation.

Third-quarter revenue was 23.5 billion kronor excluding value-added taxes, the company said, an increase of 13 percent from a year earlier, or 3 percent excluding currency swings.

“H&M results were weaker versus our expectations,” Simon Irwin, an analyst at Liberum Capital said in a report. “We believe H&M needs sustainable upgrades from same-store sales or further progress on costs to justify higher prices,” of the stock, he wrote. Irwin has a “neutral” recommendation.

(SOURCE: Bloomberg.com)

Is Macy's Headed Towards Bankruptcy?

2009-09-23T09:44:00.093-04:00

Is Macy's headed towards bankruptcy? The folks at Audit Integrity think so.

In a recent report, the independent financial research and risk modeling firm listed 20 large-cap companies ($1B or more in market capitalization) "that have the highest probability of declaring bankruptcy among publicly traded firms" in the next 12 months, with Macy's making the list. The Business Insider went a step further, whittling the list to the 10 worst of the worst using the following formula:

"Which companies appear the worst off? We took the list and removed any company with a market cap under $3 billion. We then ranked the remaining names by a simple measure of the market's perceived bankruptcy risk - Market Cap (MC) divided by Enterprise Value (EV). The less MC vs. EV, the less residual shareholders' value (above what debt holders can claim) the market is pricing-in for the company. Thus a lower MC/EV means the market thinks the company is more likely to go bankrupt."

Macy's comes in at #4:

4. Macy's

Does anyone even shop at department stores anymore?

Same store sales will likely keep falling at Macy’s right through 2009. With $2.4 billion of maturing debt over the next five years, the company is trying to cut costs, and has already reduced its dividend.

Hopefully the US consumer will bounce back soon, and actually want to shop at Macy's.

MC/EV=47%

I'm not ready to write off Macy's just yet. Their My Macy's initiative has made significant gains , with same-store sales of the program's 20 test market regions outperforming the rest of the company. These gains prompted Citigroup analyst, Deborah Weinswig to upgrade the stock to "Buy" from "Hold" on Tuesday, and double the price target to $30 from $15.

"We are encouraged by the consistent, positive early results that Macy's has reported from its 20 pilot My Macy's markets since spring 2008," the analyst wrote in her note to clients. "My Macy's initiative will be a key driver of same-store sales upside for the company ahead."

The program allows the company to reduce discounts. It also shows signs of improving relationships with vendors, leading to the development of more exclusive lines and unique sizes, Weinswig says. (SOURCE: Martketwatch.com)

Bye, Bye Prescriptives

2009-09-21T09:25:00.087-04:00

It's only been six months since Fabrizio Freda took over as CEO of Estée Lauder, and already he has sent shockwaves throughout the cosmetics industry.

Last week, Estée Lauder announced that it will shut down its 30 year-old Prescriptives cosmetic line by Jan. 31, 2010.

"A core component of The Estée Lauder Companies' corporate strategy is to evaluate, and where possible, turn around underperforming brands with the goal of improving return on investment. After a thorough analysis of the Prescriptives brand, management concluded that the brand's long term business model is no longer viable given the current market environment. The Company is committed to placing as many impacted employees as possible in open positions within the Company"

Prescriptives products will continue to be sold online at www.prescriptives.com to U.S. customers only while supplies last.

Eliminating brands from their portfolio is nothing new for EL, but Prescriptives is a homegrown brand launched by Ronald Lauder in 1979, and one of the largest in retail volume in EL's arsenal. Its closure shows that Mr. Freda is serious about dramatically restructuring the company.

"We believe that the difficult decision relating to Prescriptives will allow us to redirect our resources to key strategic imperatives where we see the highest growth potential," said Fabrizio Freda, President and Chief Executive Officer, The Estée Lauder Companies. "Ultimately this action allows us to focus on those areas which we expect to benefit the Company, our shareholders and business partners. We intend to work closely with our retail partners and continue to communicate with our consumers to ensure a seamless transition."

In the May issue of WWD Beauty Biz, Mr. Freda gave a hint to the possible elimination of Prescriptives:

“We are really focused on fixing the underperforming brands,” Freda said in May. “We have finished a review of the brands and have identified which are the brands where we want to invest and which are the brands that today are underperforming by our standards. For the underperforming brands, we have put a specific plan [in place] for the next 18 to 24 months. In the case we are not successful in turning around the brands, we will make different decisions.”

When asked, he declined to identify which brands comprised that list, but emphasized that “small” and “underperforming” were not synonymous in the Lauder portfolio. “Smaller brands, if they have the right productivity per door, are very interesting businesses,” he said in May. (SOURCE: WWD.com)

Prescriptives was one of the top prestige brands in the mid-80s, enjoying prime cosmetic counter real estate in upscale department stores such as Neiman Marcus. But with the emergence of makeup artist cosmetics lines such as M.A.C. and Bobbi Brown in the mid-90s cut into Prescriptives' niche and thus began the brand's decline.

EL maintains ownership of the Prescriptives name as well as all its trademarks and assets. A company spokeswoman says that the Calyx fragrance will be merchandised by the Aramis and Designer Fragrances division.

For Prescriptives consumer support, toll free numbers have been set up in North America (1-877-819-2968, English, Spanish and French speaking), the United Kingdom (0800 088 4168) and the Republic of Ireland (1800 936 080).

(SOURCES: WWD.com, Estée LauderCompanies Inc.)

(Photo Credit: WWD.com)

Beyonce Announces Fragrance Launch....And Gets Sued!

2009-09-17T18:44:00.005-04:00

(Photo: Kevin Mazur/WireImage)

One day after Beyoncé Knowles announced the launch of her new fragrance, WWD.com announces that Abercrombie & Fitch Co. have filed a lawsuit against Ms. Knowles claiming trademark infringment:

"The teen retailer alleged in a federal complaint filed Tuesday that a scent with that label would infringe on its own Fierce cologne trademark.

But Coty said Wednesday Knowles’ dual personality would not factor into plans for her perfume, which will be sold in department stores globally and launch in the Americas in the spring.

“We can confirm at this time…that the terms Fierce and Sasha Fierce are not being used as names of a Beyoncé fragrance,” a Coty spokeswoman said." (SOURCE: WWD.com)

A&F claims that a "Sasha Fierce" fragrance would cause a "likelihood of confusion" for consumers. I doubt that. Up until now, most consumers didn't know Abercrombie sold a "Fierce" cologne.

But here's something that made me go WTF?

“A&F’s intent is that all garments that leave the store have the Fierce scent attached to them,” the company’s attorneys wrote.

Now, when I buy new clothes, I like for them to be fragrance-free, and I gather I'm not alone which would explain the company's high negagtive double digit comp. sales.

Instead of worrying about its "Fierce" cologne, Abercrombie needs to worry about the fierce charges of racism and discrimination that have piled up against them over the years, the latest being the allegation that they wouldn't let a Muslim teen girl wear her hijab because it didn't fit their "look policy". And now they're suing one of the most beloved African American stars in the world over a word?

This won't end well.

Neiman Marcus’ Q4 Loss Deepens

2009-09-09T17:23:00.000-04:00

Neiman Marcus’ Q4 loss deepens

Atlanta Business Chronicle
Wednesday, September 9, 2009, 10:59am EDT

Upscale retailer Neiman Marcus on Tuesday reported a fourth-quarter net loss that has deepened over the 2008 fiscal year.

Dallas-based Neiman’s posted a fourth-quarter loss of $168.5 million, which is deeper than the $35.6 million loss reported during the same period last year. During the same period, overall sales at Neiman’s hit $768 million, down from $1.03 billion. The quarter included the recording of a $143.1 million pretax impairment charge.

Meanwhile, Neiman’s same-store sales fell 23.4 percent in the fourth quarter.

For the fiscal year, the company reported a net operating loss of $668 million, down from a profit of $142. 8 million. Sales for the year fell from $4.6 billion in 2008 to $3.64 billion this year.

Chairman and CEO Burton Tansky added that the company “tightly managed its expenses,” eliminated $100 million in costs and ended the year with 23 percent less merchandise due to better inventory management.

"Fiscal year 2009 was a very challenging year fo rour company. We quickly began addressing the many challenges we faced due to a sharp decline in our business, precipitated by the downturn in the economy," Tansky said.

(SOURCE: Atlanta Business Chronicle)

Saks Posts Lost, Beats Wall St. Exprectations

2009-08-18T18:46:00.004-04:00

Saks quarterly loss not as deep as expected
Tue Aug 18, 2009 9:23am EDT

CHICAGO, Aug 18 (Reuters) - Upscale department store operator Saks Inc (SKS.N) posted a narrower-than-expected quarterly loss on Tuesday as it trimmed costs while well-heeled shoppers held back from pricey purchases.

Saks' net loss widened to $54.5 million, or 39 cents per share, in the fiscal second quarter ended on Aug. 1, from $32.7 million, or 24 cents per share, a year earlier.

Excluding impairments and dispositions and a gain on the extinguishment of debt, Saks lost 40 cents per share, less than analysts' average forecast of a loss of 52 cents per share, according to Reuters Estimates.

Shares of Saks, which have more than tripled in value from their March lows, rose 7.7 percent to $5.76 in premarket trading.

The recession, an unsteady stock market since September and job losses have curbed consumers' ability to spend freely in Saks' stores. To offset languishing sales, Saks has been cutting costs and trimming inventory.

Sales fell 14.5 percent to $561.7 million, with same-store sales down 15.5 percent.

Saks, which sells designer brands such as Marc Jacobs, Versace and Oscar de la Renta, said the sales decline at its New York City flagship store continued to be steeper than at other existing locations.

The current climate makes it very difficult to predict sales and gross margin performance with any certainty, Chief Executive Stephen Sadove said in a statement.

Saks expects same-store sales to fall in a mid-to-high single digit range in the second half of the year, with the third quarter being weaker than the fourth.

It still expects same-store sales to fall in a low double digit range for the full year. Same-store sales fell 22.4 percent in the first half of the year.

Saks expects gross margins to rise in the second half of the year, partly because it is carrying less inventory.

The company is also cutting other costs. It aims to spend about $55 million on capital projects this year, after spending about $75 million last year.

(Reporting by Jessica Wohl, with additional reporting by Aarthi Sivaraman in Seattle, editing by Gerald E. McCormick)

(SOURCE: Reuters.com)

Abercrombie & Fitch Post 2Q Loss on Sales Tumble

2009-08-14T19:11:00.000-04:00

Abercrombie Has Loss on Sales Slump, Ruehl Stores

By Allison Abell Schwartz

Aug. 14 (Bloomberg) -- Abercrombie & Fitch Co., the U.S. teen clothing retailer, reported a second-quarter loss on slumping sales and costs to close Ruehl stores. The shares rose on investor optimism results will improve in the second half.

The net loss was $26.7 million, or 30 cents a share, compared with a profit of $77.8 million, or 87 cents, a year earlier, the New Albany, Ohio-based company said today in a statement. Revenue dropped 23 percent to $648.5 million, in line with preliminary figures released last week.

Chief Executive Officer Michael Jeffries started to lower prices in the second quarter to compete with other retailers such as Aeropostale Inc. and American Eagle Outfitters Inc., which have used discounts to lure consumers on tight budgets. Pricing changes, inventory management and improved fashion should help results later this year and in 2010, said Richard Jaffe, an analyst at Stifel, Nicolaus & Co. in New York.

The second quarter showed “modest improvement,” Jaffe said in a research note today. Excluding some items, earnings were 4 cents a share, beating his estimate for a loss of 3 cents.

Marketing, general and administrative expenses declined 19 percent in the quarter to $88.7 million.

Sales at stores open at least a year dropped 30 percent in the three months ended Aug. 1, the company said last week.

The retailer said on June 17 it would close its 29 unprofitable Ruehl stores that carry clothing for 22- to 25-year olds after sales stagnated in the U.S. recession.

Abercrombie rose $1.29, or 3.9 percent, to $34.25 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 48 percent this year.

(SOURCE: Bloomberg.com)

Escada Files For Bankruptcy

2009-08-14T19:05:00.001-04:00

Escada Files for Court Protection in Germany
By THE ASSOCIATED PRESS
August 14, 2009

FRANKFURT (AP) — The German fashion company Escada has filed for bankruptcy after being unable to obtain financing, a Munich district court said Thursday.

The filing was expected after the company, famous for women’s fashion and accessories, failed to get the necessary support for an earlier bond swap.

Escada was once one of the biggest fashion brands in the world, but its popularity, sales and earnings have declined.

The company said a number of restructuring measures had been contingent on the bond swap working, but it did not get enough support from the bondholders.

For example, a plan to raise 30 million euros, or $42 million, through the company’s bigger investors had been contingent on the bond exchange going through, as was a credit extension of more than 13 million euros. A successful swap would have also given the company some immediate liquidity to help it eliminate some of its debt.

The company said earlier this week that the situation was “regrettable,” but that it still hoped for a turnaround in its finances and business.

The company had sales of 528 million euros in fiscal year 2008, but reported a net loss of 70 million euros. In the first half of the fiscal year ending in April, it lost 92 million euros.

Escada operates 182 of its own shops and 225 franchise shops in more than 60 countries, employing about 2,300, 600 of those in Germany.

(SOURCE: NYTimes.com)

Estee Lauder Shares Decline Following 4th-Quarter Loss

2009-08-14T18:02:00.007-04:00

Estee Lauder declines following 4th-quarter loss

(AP) – Aug 14, 2009

NEW YORK — Shares of Estee Lauder Cos. followed the broader markets lower Friday after the cosmetics company posted a fiscal fourth-quarter loss because of hefty restructuring charges and unfavorable exchange rates.

On Thursday, Estee Lauder, which is currently restructuring its business, said it swung to a loss of $17.9 million because of big restructuring charges.

Estee Lauder's restructuring plan includes cutting 2,000 jobs, or 6 percent of the work force, and maintaining a hiring freeze. The company has been hurt by softening consumer spending and deterioration in airline travel because the company sells its products in airports.

Revenue declined 16 percent to $1.68 billion because of unfavorable foreign currency translation and waning consumer discretionary spending.

Deutsche Bank analyst Bill Schmitz Jr., who rates the stock "Hold," said the company is doing what it can to manage expectations.

"The problem with the stock is that much of this is already priced in and newly named Chief Executive Fabrizio Freda has, in short-time, attained rock star status with investors," Schmitz said.

Shares of the company are up 22.1 percent so far this year. In afternoon trading, shares declined $1.73, or 4.6 percent, to $36.08.

Elsewhere on Friday, stocks fell sharply Friday, following news that the Reuters/University of Michigan index of consumer sentiment fell short of expectations for the first part of August. That may indicate consumer spending — which accounts for two-thirds of all U.S. economic activity — will remain tough amid layoffs.

(SOURCE: AP)

Nordstrom 2Q Profit Drops 27%; Raises Guidance

2009-08-13T19:56:00.000-04:00

Nordstrom meets Street, raises guidance

Thu Aug 13, 2009 4:49pm EDT

SAN FRANCISCO (Reuters) - Nordstrom Inc (JWN.N) posted a steep decline in quarterly profit on Thursday that nevertheless met Wall Street's expectations, as the upscale department store chain controlled inventory and expenses to offset languishing sales.

The company raised its profit forecast for the fiscal year based on what it called better-than-expected performance in its second quarter. The quarter included three major sales campaigns, making it Nordstrom's second-largest in terms of net sales.

Nordstrom's net profit fell 26.6 percent to $105 million, or 48 cents per share, in the fiscal second quarter ended August 1, compared with $143 million, or 65 cents per share, a year earlier.

That matched the 48 cents per share expected, on average, by analysts, according to Reuters Estimates.

Sales fell 6.2 percent to percent to $2.14 billion, a touch above the $2.12 billion expected by analysts. But same-store sales, a key measure of sales at stores open at least one year, fell 9.8 percent.

For fiscal 2009, Nordstrom estimated earnings of $1.50 to $1.65 a share, with same-store sales falling by 9 percent to 12 percent.

An earlier forecast called for earnings per share of $1.25 to $1.50. Wall Street had been expecting fiscal 2009 earnings per share of $1.48.

Nordstrom shares fell less than 1 percent to $29.52 after closing up 1 percent at $29.76 on the New York Stock Exchange.

(Reporting by Alexandria Sage; Editing by Richard Chang)

(SOURCE: Reuters.com)

Elizabeth Arden Posts Narrow Loss, Stock Down on View

2009-08-13T18:18:00.018-04:00

Elizabeth Arden posts loss, stock down on view

LOS ANGELES, Aug 13 (Reuters) - Elizabeth Arden (RDEN.O) reported a narrower quarterly loss on Thursday as shoppers continued to spend conservatively on perfume and face creams, but shares fell 4.1 percent after its 2010 profit forecast missed expectations.

Net loss at Arden was $3.6 million, or 13 cents per share, for the fiscal fourth quarter ended June, 30, narrowing from its year-earlier net loss of $10.4 million, or 38 cents per share.

Excluding restructuring and other expenses, its net loss was 7 cents per share. That just beat the 8-cent loss expected by analysts, according to Reuters Estimates.

Net sales at Arden, which sells Prevage anti-aging cream and perfumes by celebrities such as Britney Spears and Mariah Carey, fell 10 percent to $212.6 million. Excluding the unfavorable impact of foreign currency translation, net sales declined 5.8 percent.

For its fiscal year ended June 2010, the company forecast a 2 percent to 3.5 percent increase in sales and earnings per share in the range of 50 cents to 65 cents per share.

Analysts, on average were looking for a 2010 profit of 72 cents per share, according to Reuters Estimates.

Shares in Arden, which closed at $10.45, fell to $10.02 in extended trade on the Nasdaq.

(Reporting by Lisa Baertlein and Aarthi Sivaraman in Seattle; Editing Bernard Orr)

(SOURCE: Reuters.com)

Macy's Profits Down, Outlook Up

2009-08-12T18:46:00.005-04:00

Despite being bogged down with reorganization costs, Macy's, Inc. reported profits that were better-than-expected, and raised their outlook for fiscal year 2009.

The company's second quarter earnings were down to $7M, or $.02 per share, vs. $73M, or $.17 per share, from 2008. However, excluding restructing costs, earnings per share were $.20, still down from the previous year's E.P.S of $.29, but exceeding analysts' estimates of $.17 per share.

"We were able to exceed our expectations with strong earnings and cash flow in the second quarter, despite lower sales in an economic environment that continues to be very difficult," said Terry J. Lundgren, Macy's, Inc. chairman, president and chief executive officer. "In particular, we successfully lowered inventories and managed expenses to align more closely with current levels of business. Our second quarter same-store sales performed as well as or better than most department store retailers even while we were completing the largest organizational transition in Macy's recent history. Most of that transition work is behind us now.

The results from the company's "My Macy's" initiative continue to show promise:

"We continue to be very pleased with results from the My Macy's initiative, which began to roll out to 49 new districts nationwide in the second quarter. Same-store sales performance in the 20 pilot districts launched in 2008 continued to outpace the remainder of the company, and the gap continued to widen in the second quarter. Going forward, we expect the gap to become less meaningful as the 49 new districts launched in 2009 come up to speed and begin producing results that parallel the pilot districts. As previously stated, we expect to see some improvement in these new districts in the fourth quarter of 2009 and especially in spring 2010," Lundgren said.

The first half saw a loss of $.19 per share vs. earnings of $.03 per share in 2008. Minus restructuring costs, EPS was $.04 per share vs. $.28 in the first half of '08.

Sales for the 2nd quarter were down 9.7% to $5.164B from $5.718 in '08. Macy's same-store sales for the quarter dropped 9.5%. Online sales helped the company's 2nd quarter and first half '09 comp sales by 0.5%. Online sales, which count towards same-store sales, rose 9.4% in the 2nd quarter and 12.7% in the first half of fiscal 2009.

The company raise it's guidance on fiscal year 2009 earnings, projecting EPS will be $.70 to $.80 per share, excluding restructuring costs.

Macy's shares closed at $16.40, up 6%.

Limited Brands Declare Cash Dividend

2009-08-07T18:39:00.002-04:00

COLUMBUS, Ohio, Aug 07, 2009 /PRNewswire-FirstCall via COMTEX/ --

Limited Brands (NYSE: LTD) announced today the declaration of its regular quarterly dividend of $.15 per share payable on September 11, 2009, to shareholders of record at the close of business on August 28, 2009. This is the Company's 139th consecutive quarterly dividend.

ABOUT LIMITED BRANDS:

Limited Brands, through Victoria's Secret, Pink, Bath & Body Works, C.O. Bigelow, La Senza, White Barn Candle Co. and Henri Bendel, presently operates 3,006 specialty stores. The company's products are also available online at www.VictoriasSecret.com, www.BathandBodyWorks.com, www.HenriBendel.com and www.LaSenza.com.

SOURCE Limited Brands

http://www.limitedbrands.com

July Same-Store Sales Roundup

2009-08-06T08:41:00.014-04:00

As The Four Tops sang, "It's the same ol' song..." for the U.S. retail industry.

For the 11th consecutive month, U.S retailers reported flat same-store sales, with many missing analysts' estimates. An unseasonably cool July and tax-free holidays pushed back to August, due to the Labor Day holiday falling late, were contributing factors to the decline in sales.

Although sales were down 5%, the results were on track with industry expectations and "consistent with the recent trends seen in May and June", according to Michael P. Niemira, chief economist of International Council of Shopping Centers (ICSC). In a telephone interview with Bloomberg, Mr. Niemera said, “Although July doesn’t look much different than June or even May, I think it will probably mark the turn in the industry towards better performance from here on out".

Apparel and Department Stores continue to be the worst performing sectors, however there were a few bright spots. Gap, Inc. and Macy's, Inc., posted better-than-expected 2nd quarter earnings, sending their shares to rise. Gap's shares saw it's biggest gain since Nov. 21. Limited Brands beat analysts' estimates, which caused shares to rise 15%, it's largest gain since Oct. 28.

Improvements in gross margin and expense reductions contributed to retailers’ ability to report second-quarter profit above estimates, according to Liz Dunn, an analyst at Thomas Weisel Partners LLC in New York. (Source: Bloomberg.com)

The S&P Retail Index rose 1.4%.

Here's the July Apparel/Dept. Store same-store sales roundup:

Limited Brands beat company and analysts' expectations, posting a 7% same-store sales decline for July. The company expects August comp. sales to decline in the high single-digits.

July same-store sales for Macy's, Inc. dropped 10.7%, above Thomson Reuter's analysts' estimates of a 9.1% decline. Total sales for July totaled $1.377B, a decline of 10.7% in comparison to sales of $1.543B for the same four week period ended in Aug. 2, 2008. Minus restructuring costs, Macy's, Inc. said it expects 2nd quarter earnings of $0.15 to $0.17 per share.

Gap Inc. posted an 8% same-store sales decline for July compared to an 11% drop in July 2008. Total sales were $924M, down 7%. Sabrina Simmons, CFO of Gap Inc., said the company expects earnings per share for the 2nd quarter to be between $0.30 and $0.32.

Dillard's comp. sales slid 12% coming above analysts' estimates of 10% declines. Total sales were down 15% for the month to $439,086,000.

Abercrombie & Fitch continues their downward spiral, with same-store sales falling 28% for July. Total sales for the month were down 22% to $236M. The company believes sales were negatively affected by a shift in the timing of tax-free holidays, and later back-to-school dates.

Nordstrom's same-store sales results dropped 6.9%, beating Wall St. estimates of a double-digit decline. Total sales slid 4.1% to $809M.

Saks slightly beat estimates, reporting a 16.3% decline in comp. sales. Analysts surveyed by Thomson Reuters estimated a 16.6% decline. Sales for the month totaled $159.7M, a 14.9% decrease.

Same-store sales for Neiman Marcus were down 27.3% to $195M for the month. Total sales decreased 25.8% to $199M. The company reported weakness across all merchandise categories and regions.

Coach Profit Drops 32% For The Quarter

2009-07-28T15:02:00.035-04:00

Like the majority of the luxury sector, Coach Inc. felt the effects of consumers' continued preference for necessities over discretionary purchases.

The company reported fourth quarter earnings fell 32% to $146M, or $0.45 per share, vs. $214M, or $0.61 per share in the fiscal fourth quarter of 2008. Income for the fiscal year 2009 was $623M, a 20% drop from earnings of $783M for fiscal year 2008. Earnings per share were $1.91 vs. $2.17.

Excluding one-time items, earnings per share were $0.43, meeting analysts expectations according to Thomas Reuters.

Fourth quarter sales dropped less than 1% to $778M from $782M in the previous year. Total Sales for the year were up 2% to $3.23B. Coach retail store sales, which account for 85% of its business, were up 3%. The biggest sales decline was in Coach's North American stores, where retail comp. sales slid 6.1% for the quarter and 6.8% for the year. Department store sales dropped 21% for the quarter and 19% for the year.

In response to sales declines, the company has increased their offering of handbags in the $200-$300 range to 50%. In an interview with The Wall Street Journal, Coach, Inc. Chairman and CEO, Lew Frankfort said the following:

"We want to be in that sweet spot where we believe the market will settle," Mr. Frankfort said. "It's our intention for the indefinite future to maintain pricing at [these] levels."

The new pricing strategy seems to be working. In a conference call, Mr. Frankfort said that the percentage of handbag sales in its North American stores has increased to 55% compared to 50% a year ago. The introduction of the new Poppy line, which has an average handbag price of $260, has improved retail sales for the month of July. The line, which is marketed towards Coach's younger consumer, is selling at a rate two to three times that of other collections.

Coach, Inc.'s Chief Financial Officer, Mike Devine said that fiscal 2010 will be an "investment year" for the company, with plans to open 20 retail stores and 6 outlets in North America, 10 stores in Japan and 15 new locations in China, where sales have been strong.

Included in the expansion is the creation of the Reed Krakoff label. Last month, Haute Retail mentioned that this new brand, revolving around Coach's creative director, was in the pipeline. The label will be a "global brand" separate from Coach that will include women's ready-to-wear, accessories, handbags, footwear and jewelry. "We believe that this concept will serve to define the new American luxury and engage a different customer who is looking for exclusivity and limited distribution", Mr. Frankfort said of the new label.

The Reed Krakoff label will debut in Fall 2010, with a limited number of stores in the U.S., Japan and Hong Kong.

Reuters reports that shares fell 7.2% due to investor worry about Coach's increased expansion of the brand.

"With increased investment spending in China, sales volatility here at home, lower-price points within the overall assortment and increased factory channel sales mix, it appears returns will take a hit," says Wall Street Strategies analyst Brian Sozzi. "The gross margin really missed consensus by a wide margin." (Source: Reuters)

But some analysts think the market overreacted.

Needham & CO analyst Christine Chen said she thought the market was reacting to the worse same-store sales number, but they were looking at the wrong thing. "They said July trends have improved due to Poppy," she said. "Investors should be a little more forward-looking." (Source: Reuters)

Coach shares dropped $0.38 to $28.05 at the close of the market.

Disclosure: Haute Retail has positions in Coach, Inc.

June Same-Store Sales Roundup

2009-07-09T19:12:00.016-04:00

An unusually rainy June combined with weak consumer confidence and a rise in U.S. unemployment, lead to the tenth consecutive month of weak same-store sales for U.S. retailers.

With the unemployment rate at a 26-year high of 9.5%, consumers choose to focus on necessities and discount items, forgoing discretionary purchases. This has retailers concerned about the upcoming back-to-school sales, which gives retailers a preview of what holiday sales will look like:

“You’re going to have a lot of the clearance stuff still on the floors, and that’s going to counteract any traction in the full-price merchandise for back-to-school,” Brian Sozzi (analyst at research firm Wall Street Strategies in New York) said today in a telephone interview. (Source: Bloomberg.com)

"It could be a very difficult back-to-school shopping season," Ken Perkins, Retail Metrics president said. "If that's the case, it's going to be a negative harbinger for what we see for the holidays." (Source: Reuters.com)

Here's the apparel retail June same-store sales roundup:

Macy's June same-store sales were down 8.9%, slightly under Wall Street estimates. Results were consistent with management expectations and the company's year-to-date sales trend.

Dillard's reported soft comp. sales for June, posting a decline of 14%. Analysts predicted a 10.4% drop in same-store sales.

June same-store sales for Limited Brands dropped 12%, coming below the company's expectations of a high single digits decline. Wall St. estimated a 7.9% loss. Semi-Annual sales at both Victoria's Secret and Bath & Body Works negatively impacted sales, along with higher promo activity prior to this year's sales events. V.P. of Investor Relations, Amie Preston, said the company expects July comp. sales to fall in the low double digits.

The biggest loser in the high-end/luxury sector was Abercrombie & Fitch, whose June same-store sales plummeted a whopping 32%. Analysts projected comps. would decline 26.6%. Pressure from lower-priced competitors Aeropostle and Buckle has forced A&F to reconsider its stance against lowering prices according to The Wall Street Journal.

Nordstrom beat analysts' estimates, reporting a 10% drop in June same-store sales.

One of the biggest surprises was Saks Fifth Avenue which, after six consecutive months of same-store sales losses in the high double digits, beat analysts' estimates by posting a 4.4% percent dip in June comp. sales compared to their predictions of a 11.8% decline. But don't break out the bubbly just yet. The low sales drop was due to the company's shift of their designer sales event from May to June. So, once again, it's all about the big discount, much to Saks' chagrin.

Neiman Marcus June same-store sales fell 20.8% with the company experiencing weakness across all geographies and merchandise categories.

Coach's Creative Director To Launch His Own Brand?

2009-06-19T15:11:00.010-04:00

Since joining Coach, Inc. in 1996, Reed Krakoff, president and executive creative director of the company, has worked behind the scenes to make the Coach brand a household name and one of the top companies in luxury retail. Now, Mr. Krakoff is going to get a chance to take center stage.

Fashion Week Daily reports that Coach is in the process of developing a brand around Mr. Krakoff.

Details are sparse, however we do know that the company registered "Reed", "Reed Krakoff" and "RK", and two design logos with the U.S. Patent and Trademark office in March and February of this year. According to the filing, the products and services that may be used under the trademarks vary, ranging from ready-to-wear to jewelry to personal care products, even pet care products and hotels.

Coach has declined to comment on this new venture, only stating that they're always developing new products.

Jimmy Choo Comes to H&M!

2009-06-18T10:06:00.014-04:00

Shoes from the upcoming Jimmy Choo for H&M collection

(Photo: Magnus Magnusson/H&M)

ATTENTION ALL SHOENISTAS & BAGNISTAS!

H&M has announced that they will team up with Jimmy Choo to offer a fabulous collection of shoes and handbags for the fall. This will be H&M's first collaboration with an accessories brand.

The collection will hit 200 H&M stores worldwide on Nov. 14th. Known primarily for its shoes and handbags, Jimmy Choo will also offer women's clothing and men's shoes, bags and accessories.

Here We Go Again

2009-06-17T08:47:00.017-04:00

Photo: Steven Miesel/Calvin Klein

Looks like the good folks at Calvin Klein are at it again! Their new billboard ad, located in NYC's SoHo area has caused quite a commotion amongst SoHo's residents. "It's borderline pornographic," said neighborhood resident Lisa Marchese, 36, a marketing specialist. "They all look so young, particularly the girl. And to portray them in a threesome - it's just taking it too far." Alicia Shay, 24, who ironically sells jeans, also objected to the ad. "Just the positioning of them all - she's kissing him, the other guy has his hands down her pants, they're all misty even. It's really inappropriate."

However, the designers at Calvin Klein think the bru haha is much ado about nothing. "I think it is a fantastic campaign", said Italo Zucchelli, menswear designer for Calvin Klein. "That is what Calvin Klein Jeans is supposed to be. Everyone needs to be scandalized and screaming. That is what we want." Calvin Klein's Creative Director, Francisco Costa said, “I think it’s great for tourists...I think they’ll see that and walk right into our store".

From a business standpoint, I understand the need to grab the consumer's attention with provocative ads. Sex sells. However, in this case, is this ad really shocking? My initial response to it was YAAAWN. Nowadays, society is so saturated with sexually charged images, and we've come to expect this type of ad from CK, that this ad doesn't create the same controversy as previous Calvin Klein ads. In fact, it comes off as desperation for Calvin Klein to make themselves relevant again.

I hate to burst Messrs. Zucchelli and Costa's bubbles, but in today's economy consumers are looking for long-lasting quality. If Calvin Klein's products don't offer that, no sexually charged ad is going to persuade folks to spend huge amounts of money on their products.

(SOURCES: NYDailyNews.com and NYMag's The Cut)

And The Winner Is......

2009-06-16T15:35:00.023-04:00

Last night, Alice Tully Hall in Lincoln Center served as the location for the Oscars of the fashion industry, the 2009 CFDA Fashion Awards. Each year, the Council of Fashion Designers of America (CFDA) gather to honor the best and brightest in the fashion industry. Comedian Tracey Ullman served as host of this year's ceremony.

This year's award was about embracing fresh, new talent, with newcomers Kate and Laura Mulleavy of Rodarte, Scott Sternberg of Band of Outsiders, Italo Zucchelli for Calvin Klein and Jack McCollough and Lazaro Hernandez of Proenza Schouler taking the top awards.

First Lady Michelle Obama made an appearance via taped message to accept the Board of Directors' Special Tribute Award for her support of fashion designers. Ralph Lauren won the Popular Vote Award, a new award sponsored by L'Oreal Paris which allowed the public to vote for their favorite fashion designer at WWD.com.

Below is a complete list of the winners and honorees:

Womenswear Designer of the Year: Kate & Laura Mulleavy for Rodarte

Menswear Designer of the Year (tie) : Scott Sternberg for Band of Outsiders and Italo Zucchelli for Calvin Klein Collection

Accessory Designer of the Year Award: Jack McCollough & Lazaro Hernandez for Proenza Schouler

Swarovski Award for Emerging Talent Womenswear: Alexander Wang

Swarovski Award for Emerging Talent Menswear: Tim Hamilton

Swarovski Award for Emerging Talent Accessory Design: Justin Giunta for Subversive Jewelry

Geoffrey Beene Lifetime Achievement Award: Anna Sui

International Award: Marc Jacobs for Louis Vuitton

Eugenia Sheppard Award for Fashion Journalism: Edward Nardoza, Editor-in-Chief, Women’s Wear Daily

Eleanor Lambert Award: Jim Moore, Creative Director, GQ

Popular Vote Award: Ralph Lauren

Board of Directors’ Special Tribute Award: First Lady Michelle Obama

(SOURCE: CFDA.com)

May Same-Store Sales Roundup

2009-06-04T13:51:00.017-04:00

Major Memorial Day sales and a jump in U.S. consumer confidence in May were not enough to fend off another month of soft retail same-store sales. U.S. same-store sales for the month fell 4.8% according to Thomson Reuter vs. their estimate of a 4.1% decrease.

A 14-yr high in consumer savings and a curb on spending, both due to unemployment concerns and a troubled housing market, have negatively impacted retail sales, particularly luxury retail. Discretionary spending, which drives the luxury sector, just isn't there. Instead, consumers are focusing more on necessities such as food, gas and affordable clothing:

Upscale chains posted some of the worst May sales at stores open at least a year, or same-store sales."The high end continues to struggle, those in the discretionary spend segment are really continuing to get clocked," said Ken Perkins, president of Retail Metrics. (Source: Reuters)

Here's the apparel retail May same-store sales roundup:

Macy's same-store sales for May were down 9.1%, coming just under analysts' estimates of a 9.3% decline. The company says that sales were consistent with management's expectations.

Comp. sales dropped 12% for Dillard's in May, above projected declines of 8% by wall street.

Limited Brands met analysts' estimates and company expectations, posting a 7% decline in same-store sales in May. Amie Preston, V.P. Investor Relations, says the company projects comp. sales decline in the high single digits for June.

It was another weak month for high-end/luxury apparel sector. Abercrombie & Fitch reported comp. sales fell 28% for May, which was higher than analysts' estimates of a 24.2% drop.

Nordstrom's May comp. sales slipped 13.1%, slightly above the 12.7% decrease analysts predicted. The company experienced strength in Women's Coats and Dresses, Individualist, Savvy and Narrative merchandise categories.

Saks continues to suffer, posting same-store sales that plummeted 26.6%, way above analysts' predictions of 14.2%. The positive impact of a clearance event shift from April to May was offset by the designer sale event shift from May to June. Both event shifts caused a negative impact on May comp. sales.

Neiman Marcus May same-store sales declines 23.3%. Weakness was experienced across all geographies and merchandise categories.

Christian LaCroix Files For Bankruptcy

2009-05-29T10:14:00.027-04:00

Christian Lacroix, one of the biggest names in Parisian haute couture, is the latest victim of the slumping global ecomony. The company has announced that it has filed for protection from creditors, the equivalent of Chapter 11 bankruptcy protection.

The filing comes after the failed attempt of Falic Group, the U.S. based duty-free company that owns Lacroix, to sell the company. Lacroix's Chief Executive, Nicolas Topiol is blaming the lack of interested parties on the financial crisis.

This particular quote stood out to me:

In an attempt to boost revenue, Falic Group has tried to play up Lacroix's reputation for haute couture -- the highest-end of the fashion scale. This long-term strategy was "dramatically hindered by the current and ongoing world financial and economic crisis," the company said in a statement.

In this particular case, Lacroix can't solely blame it on the e-e-e-e-economy this time. Fashion houses cannot live on haute couture alone. It's very expensive to make and very few people in the world can afford to purchase it, therefore couturiers don't sell enough to offset costs and make a profit. Instead, they rely on licensing aspirational, affordable luxury merchandise such as ready-to-wear clothing, fragrances and accessories. This is why luxury conglomerates like Lacroix's former owner, Moet Hennessy Louis Vuitton (LVMH) and The Gucci Group have been able to thrive, posting sales increases of 11% and 5% respectively.

Unfortunately for Lacroix, the interest has never been there for the brand as they have yet to turn a profit in its 22 year existence. Sure, the fashion house received critical acclaim, but the public never embraced Lacroix aesthetic.

Paris Couture Week is five weeks away, so will Christian Lacroix make a showing? Mr. Topiol tells WWD that there may be a more scaled-back presentation.

(Photo: Dominique Maitre/WWD.com)

April Same-Store Sales Round-Up

2009-05-07T08:54:00.021-04:00

As expected, retailers benefited from the late Easter holiday, posting April same-store sales that were better than expected, as well as positive outlooks for earnings. However, overall comp. sales for the apparel sector were soft, indicating that consumer confidence is still low.

Analysts expected overall same-store sales to fall 0.2%, however Thomas Reuters reports overall same-stores sales increased 1.2%. Sans Walmart's numbers, sales fell 2.7% however that still tops the 3.4% drop analysts expected.

Still some are not impressed.

"It's hard to really ... be terribly excited," said Michael Niemira, chief economist with the International Council of Shopping Centers (ICSC), since the results only demonstrate a move from "extreme weakness" to "moderate weakness. That progress toward improvement will continue."

The market's response was a dip in trading with the S&P Retail Index down 2%.

Here's the apparel retail round-up:

Walmart continues to prosper during these challenging economic times, posting a April comp. sales increase of 5% beating the 2.9% increase analysts' predicted. The company credits the Easter holiday shift as well as increased strength in seasonal and discretionary purchases. Walmart announced that they will no longer provide monthly comp. sales results, insteading opting to provide comp. sales results on a 13-week basis to be released during their scheduled quarterly earnings calls.

Macy's Inc.'s comp sales were down 9.1%, which were consistent with the company's expectations. The company forecasts a first-quarter loss of 19 cents to 21 cents per share, excluding restructuring costs. This beats Macy's earlier projections and Wall Street estimates of a 27 cents per share loss.

April same-store sales for Limited Brands fell 6%, slightly more than the 5.9% decline that was estimated.

High-end apparel retailers continues to struggle the most. April same-store sales for Abercrombie & Fitch were off 22% for April, which was under the 27.3% drop analysts predicted.

Nordstrom's April same-store sales dropped 10.8%, beating analysts' estimates of a 12.3% decline. The shift of the Easter holiday from March to April favorably affected sales, however the shift of the Nordstrom Rewards event for Nordstrom cardholders from late April to March offset any gains. The strongest performing merchandise categories were women's coats & dresses and junior women's apparel.

Saks Fifth Avenue continues to struggle, posting April comp. sales declines of 32%. The company blames the shift of a spring season clearance event from April to May as having a negative affect on sales results. However, management projects this event shift will positively impact sales in its second fiscal quarter.

Neiman Marcus April same-store sales fell 24.6% in its Specialty Retail Stores segment, which included Neiman Marcus stores and Bergdorf Goodman. Weakness was experiences across all geographies and merchandise categories.

A Sparkle of Light in March Same-Store Sales Reports

2009-04-09T17:15:00.016-04:00

The apparel retail sector has reason to be a little hopeful today. Although retail same-store sales dropped in March, the declines were less than expected signaling an upturn in consumer confidence.

Reuters reports that more than half of the retailers that posted March sales, topped Wall Street estimates. Thomas Reuters' same-store sales index reports overall sales were down 1.8%, thanks to lower-than-expected sales growth from Wal-Mart. However, sans Wal-Mart's figures, sales fell 5%, slightly beating the 5.2% decline analysts predicted.

"The numbers are still soft, but given the deluge of negative news we have seen in the retail space over the last several months, it's got to be somewhat encouraging," said Ken Perkins, president of Retail Metrics Inc. "It looks like there is a little bit of an uptick, some pent-up demand ... for some discretionary spending." (Source: Reuters)

Investors responded to the encouraging news, pushing the Standard & Poor Retail Index up 4.6%.

The Easter shift from March to April negatively affected March sales results:

"The overall tone for March was actually stronger than the reported sales performance," said Michael P. Niemira, ICSC chief economist and director of research. "Sales performance was dampened due to several factors, two of which were calendar related; the first being a calendar-month shift that caused there to be one less Saturday in March compared with last year and the second being that Easter falls three weeks later this year, on April 12, as opposed to March 23 last year," said Niemira. "These shifts created an unfavorable month-over-month comparison with March of 2008. If we adjust for the calendar shifts sales for March were stronger than reported, in fact, up about 1 percent," Niemira added. (Source: ICSC)

Abercrombie & Fitch was the biggest loser with March same-store sales falling 34%, due to the company's continued resistance to discounting their merchandise in order to protect their brand's image. Comp. sales were weakest in week 3 and and stronger in weeks 4 and 5 reflecting the Easter shift. Weeks 4 and 5 were positively impacted by Spring clearance event. Across all brands, jeans, fragrance and fleece were the strongest categories. Comparable sales were down across all U.S. regions and Canada.

Macy's Inc. reported a 9.2% declined in same-store sales for the month of March, slightly beating Wall St. predictions of a 9.3% decline. Online sales (which include macys.com and bloomingdales.com and are included in same-store sales results) had another good month with a sales increase of 17.9% in March and 17.1% year-to-date. All figures were in line with management's expectations. Due to the Easter holiday falling in April instead of March, the company advises that the March-April period should be viewed together.

Limited Brands, Inc. reported March same-store sales decreased 9%, beating the company's expectations of a "low double digit decline" as well as analysts' estimates of a 12% decrease. The company projects mid-single digit same-store sales declines for April.

However, the struggle continues for the luxury sector.

Neiman Marcus was the worst performer in the sector, reporting same-store sales drop of 29.9% for March. The company said it experienced weakness across all regions and merchandise categories.

March Same-store sales fell 23.6% for Saks Fifth Avenue, missing Wall St. estimates of a 20.3% decline. The luxury chain experienced weakness across all merchandise categories, while Saks Direct and OFF 5TH showed strength.

Nordstrom beat analysts' estimates of a 16% decline, posting a same-store sales drop of 13.5% in March. The company reports that while the Nordstrom Rewards triple point event for Nordstrom cardholders had a favorable affect on sales, the positive results were offset by the shift in the Easter holiday from March to April. Rob Campbell, treasurer and vice-president of investor relations, said that cosmetics and junior women apparel were their strongest categories.

The Return of Bill Blass Starring Richard Chai?

2009-03-30T15:03:00.017-04:00

On the heels of reports last week that Peacock International Holdings was looking for a new creative director to head the Bill Blass label, it looks like they may have found their man in Richard Chai.

Fashion Week Daily reports that industry sources have said that Mr. Chai has conducted several interviews with Peacock concerning the position of creative director of the label. Of course, both Chai's camp and Peacock have remained mum on the rumor. Says a Chai spokesperson, "I'm afraid we can't comment at the moment". "We can't comment on who we're interviewing for the position," said Scott Patti, executive v.p. of licensing and sales for Peacock. Bill Blass will return on the runway regardless of who is chosen as head designer.

On the surface, Mr. Chai appears to be a good fit for the label. His trademark American sportswear is aesthetically similar to the Bill Blass brand. His resume includes launching the Marc by Marc Jacobs, a stint at TSE, winner of the Ecco Domani award in 2005, a finalist in the the CFDA/Vogue Fashion Fund and a collection for Target's Go! International last fall. Mr. Chai also brings with him a loyal fan base which includes Vogue editor, Anna Wintour and Julie Gilhart, fashion director for Barneys New York.

But will this be enough for Mr. Chai to be able to function at Bill Blass? As we all know, when companies purchase fashion labels, conflict arises between management and the designer with struggles over creative control. So, will Peacock let Richard Chai be Richard Chai, or will they
force him to be beholden to the bottom line?

Executive Shuffle Complete at Estée Lauder

2009-03-26T18:34:00.014-04:00

Estée Lauder Companies Inc. has announced the completion of its senior management succession plan, which will put into motion the company's four-year makeover strategy.

Chief Operating Officer, Fabrizio Freda, 51, will take over as Chief Executive Officer, while current CEO, William P. Lauder, 48, will become Executive Chairman and serve as Chairman of The Estée Lauder Companies’ Board of Directors. Leonard Lauder, the current Chairman of the Board will remain on the board and serve as Chairman Emeritus. Mr. Freda will also join the board.

The appointments will take effect on July 1, 2009 at the start of the company's fiscal year 2010.

It'll be interesting to see how Mr. Freda will maneuver throughout the EL corporate culture. He's a non-Lauder, only the second to take the helm of the ship, and surrounded by Lauder family members either on the board or employed in the company. Will they allow Mr. Freda the freedom to implement new strategies, such as implementing market research strategies he learned during his tenure at Proctor & Gamble? Stay Tuned....

Tiffany Stock Surges Despite 4Q Loss

2009-03-23T18:33:00.002-04:00

Photo: Reuters/Fred Prouser

Tiffany & Co. shares rose 15.52%, or $3.14, to close at $23.37 after the company reported fourth-quarter profit that beat Wall St. estimates. This was the company's biggest gain in five months.

Excluding one-time charges, such as staffing reductions, earnings per share (EPS) was $0.85, beating average analysts' estimates of 78 cents per share according to Reuters Estimates.

Taking aggressive steps to lower costs was a contributing factor to the company beating expectations. Tiffany announced that it will close all 16 Iridesse pearl jewelry stores, which have operated at a loss since opening in 2004. They have offered early-retirement packages to 800 U.S. of its employees, with 600 accepting the package. The company says both actions will reduce it's workforce by 10%, creating a savings of $60 million for the year. In other cost saving measures, the retailer has suspended its share repurchase program, and lowered management incentive compensation.

However, the company is quick to say that the outlook is dim.

"We have not yet seen signs of an upturn in our business with worldwide sales in the quarter-to-date declining more than 20%, which is in-line with our expectation", says Michael J. Kowalski, chairman and chief executive officer.

Tiffany forecasts a decline in worldwide sales of 11%, and earnings of $1.50 - $1.60 per share for the fiscal year ending in January 2010.

For the fiscal fourth-quarter, which ended January 31, net income dropped a little over 75% to $31.1 million, or $0.25 per share compared to the previous year's $127.4 million, or $0.96 per share. Earnings for the full year were down 32%, $220.0 million, or $1.74 per share, vs. $323.5 million, or $2.34 per share from the previous year. Sales were in line with company expectations.

Fourth-quarter worldwide net sales plummeted 20% to $841.2 million, with sales declines in the Americas region having the biggest impact.

Sales in the Americas took the biggest hit out of the company's three regions. Fourth-quarter sales of $458.9 million were down 29%, and fiscal year sales were down 10% at $1.59 billion. U.S. same-store sales dropped 33% in the fourth quarter and 16% for the year. Despite being a major tourist attraction, sales at the New York flagship store were down 34% and 9%.

In the U.S., there were declines in every price range, however the declines were "somewhat smaller" in sales below $500 and larger in sales about $50,000, said Mark Aron, Tiffany's vice-president of investor relations.

In the Asia-Pacific region, sales declined 3% to $279.7 million in the fourth quarter, while sales increased 8% to $922 million for the year. In Europe, fourth quarter sales where down 2% at $95.3 million and up 17% to $284.6 million for the year.

Net inventories increased 17% to $1.6 billion due to lower than expect sales towards the end of the year, particularly the holiday season, the opening of new stores and an increase in raw material inventories.

Despite low sales, the company has no plans to follow the current trend of discounting prices that their competitors have embraced. "We did and will continue with our full price philosophy in order to maintain appropriate margins and very importantly to maintain the integrity of the Tiffany and Company brand", said Tiffany CFO, Jim Fernandez.

I agree with this strategy. Tiffany & Co. isn't just a company, it's a strong, iconic brand that people will always be willing to pay full price for. Everyone wants the "blue box".

Even though the luxury sector is going through turbulent times, people still want high quality clothing and jewelry that is timeless. In this morning's conference call, the company noted that they experienced "strong sales" of Tiffany Charms and their Atlas 1837 and Somerset Collections. The new Tiffany Metro and Tiffany Keys collections have also shown promise, according to Mr. Aron. What do all of these collections have in common? Understated, classic and timeless luxury. If they stick with promoting these lines, they just might beat expectations in the first quarter.

Apparel Sales Continue To Suffer Despite Overall Industry Increase

2009-03-05T16:14:00.021-05:00

U.S. retailers reported their same-store sales for February and the results were better than expected.

Reports show overall retail industry same-store sales increased 0.3%, beating analysts' predictions of a decline of 1.3%, according to Thomson Reuters. The increase was due to Wal-Mart clobbering expectations by posting a 5.1% same-store sales increase, as well as retailers controlling inventory.

A few retailers beat Wall Street estimates by either posting gains, or posting declines that were less than expected. Aeropostale reported an 11% increase in same-store sales which was higher than the 6.9% increase analysts predicted. Gap Inc. said sales fell 12%, beating estimates of a15.4% decline. Limited Brands Inc., the parent company of Victoria's Secret, dropped 7% which was better than analysts' estimate of a 7.6% drop.

So, is this a sign that the apparel sector is beginning a turnaround? Not necessarily. Despite these bright spots, reports show that apparel was down 5.6% and department stores declined 9% compared to the previous year.

Macy's Inc. reported same-store sales down 8.5% for February, more than the 7.3% analysts predicted but within management's expectations. However, online sales -- which include macys.com and bloomingdales.com -- increased 16.2%.

Luxury retail continues to struggle the most as a result of consumers opting for food and necessities instead of discretionary items like high end clothing. The International Council of Shopping Centers reports February same-store sales for luxury stores dropped 19.2% compared to a 0.1% drop of all the chains it monitors.

Saks Inc. was the worst performer in the sector with a 26.8% drop in same-stores sales in February, experiencing weakness across all merchandise categories, particularly women's apparel. Eveningwear, fragrance, women's and men's accessories and their OFF 5TH stores showed relative strength for the month.

February same-store sales for Neiman Marcus tumbled 20.9% with weakness in across all regions and merchandise categories.

Nordstrom, Inc. reported February sales decline 15.4%, more than the 13.6% drop analysts predicted.

Teri Agins Stays At The Wall Street Journal

2009-03-04T13:00:00.008-05:00

WWD reports that veteran fashion reporter, Teri Agins, will remain at The Wall Street Journal although in a limited capacity. Ms. Agins will continue to write her weekly "Ask Teri" column, as well as additional freelance articles for the paper.

With the elimination of the paper's fashion and retail bureau last month, Ms. Agins' future at the Journal , as well as several other reporters in the bureau, was up in the air. A spokesperson for WSJ tells WWD that she will continue as a contract employee, while former Fashion and Retail staffers were reassigned to other divisions of the paper. Unfortunately, Francine Schwadel, Cheryl Lu-Lien Tan and Jennifer Saranow are no longer with the company.

Amen, Anna!

2009-02-16T18:11:00.003-05:00

Anna Wintour gets it.

In a recent interview with The Wall Street Journal, the editor of Vogue magazine breaks down what is wrong with the fashion industry:

WSJ: If fashion is a barometer of the prevailing mood, what can we expect to see for fall 2009?

Ms. Wintour: It is so important for designers not to run scared, and not to be too worried about what's safe and what's commercial.

Right now, what's going to work is something their customer doesn't have in her closet and that has a real intrinsic sense of value. …Because to be honest there's been too much product, too much copy-catting, and, probably too much consumerism. I think a sense of clarity, a sense leveling off and a sense of reality is needed.

BINGO! Designers have turned into expensive versions of H&M, focusing solely on short-term trends instead of long-term value. I'm not saying that trends should be ignored, as there are still some who can afford to acquire expensive "It" items. However, that isn't true for the majority who want value, so there needs to be a mix of trends and timeless classics.

People are willing to pay full price for high-end labels, provided the pieces are high quality, exclusive and are fashionably durable, meaning that 10, 20 years later the pieces aren't dated. Hermes and LVMH are indicative of that. While other companies in the fashion retail sector posted losses, LVMH reported a fourth-quarter sales increase of 4%, and Hermes reported 2008 sales rose 8.6%, exceeding analyst forecasts.

Sorry, but you can't design any ol' garment, slap a famous name on it and expect it to sell in today's economy. The sooner designers realize this, the better off they will be.

Wall Street Journal Shuts Down Retail & Luxury Bureau

2009-02-06T08:07:00.001-05:00

As the economy continues to hit the fashion industry, the latest victims are well-regarded fashion journalists.

Yesterday, The Wall Street Journal announced that it will close its Retail & Luxury bureau, and reduce its full-time staff from nine people to five. Columnist Christina Binkley and the group's editor, Lisa Bannon will stay on. Sources have told Forbes.com that the renown fashion journalist, Teri Agins, who has been with the Journal for 23 years, is out while other staffers have been asked to apply for the remaining three positions per union rules. No definitive word on whether or not the Journal's fashion blog, Heard On The Runway, will remain.

Forbes.com reports:

"For the last three years, the Journal has been building up its retail and luxury coverage group and trying to court that advertising," said one senior Journal writer who is close to the group. "But maybe now they feel that for the next year or 18 months, luxury advertising won't come through--and besides there's the new WSJ. magazine, which is courting the same advertising territory."

This could not have come at a more inopportune time. New York Fashion Week starts next week, with the London, Paris and Milan Fall '09 shows following on its heels. Who's going to cover the shows? With a staff of FIVE that's going to be impossible.

I'm not buying the excuse of the lack of luxury advertising. Yes, the luxury sector is going through a slump right now, but it's also the first sector in the retail industry to bounce back. Besides, luxury is on the verge of reinventing itself (which, ironically, was covered in an article by Ms. Agins in last week's Journal), and that metamorphosis needs to be covered thoroughly, and quite frankly, the WSJ. magazine is not the vehicle for that. If anything should have been eliminated, it's the WSJ. magazine which has not lived up to its supposed purpose, in my opinion. The Robb Report it is not.

Macy's Cuts 7000 Jobs, Slashes Dividend In Reorganization Effort

2009-02-03T18:15:00.001-05:00

Amidst bleak guidance reports, Macy's Inc. announced on Monday that it will cut 7,000 jobs or 4% of its workforce, as one of several steps to reorganize and cut costs.

"Reducing our workforce is an unfortunate outcome of the current economic environment, and I am frustrated that so many of our people will be unable to move forward with us as we proceed into a very exciting future for Macy's and Bloomingdale's," Terry Lundgren, Macy's Chief Executive said.

The company also announced that it will slash it's quarterly dividend 62% from 13.25 cents per share to 5 cents per share. This cut in dividend is expected to save the company $138M in cash for fiscal 2009.

Other actions to reduce expenses include eliminating merit salary increases across the company, a reduction of its match to employee 401(k) plan contributions in 2009, and cutting its capital expenditure budget to $450M from an original budget of $1 billion, saving $100M to $150M.

In a separate announcement, Macy's said it will repurchase outstanding $950M in debt that will mature later in 2009.

Broad reorganization efforts include a nationwide expansion of their "My Macy's" initiative, an experimental "customer-centric" program. Launched in 20 selected geographic markets in spring of 2008, "My Macy's" is used to identify and serve consumer needs location by location. The program will expand to 49 more districts in the second quarter.

"We have been very encouraged by early results from our My Macy's district structure in capturing new sales opportunities in pilot markets over the past year," Lundgren said. "In fact, of the company's top 15 best-performing geographic markets in December, 13 were My Macy's pilot districts. We are moving quickly and decisively to expand this model to all of our markets so we can pursue sales-driving opportunities as we position ourselves to capture share in every local market.

Further reorganization will entail the elimination of Macy's geographic division structure in favor of a more "unified organization", centralizing the company's buying, merchandise planning, stores senior management and marketing functions in New York, while corporate business functions will be located in Cincinnati.

Macy's expects these moves to save them $250M in 2009 and $400M per year beginning in 2010.

Meanwhile, the outlook for Macy's continues to be bleak. The company predicts that same-store sales in 2009 will be down 6-8%. Earnings per share forecasts is in the range of $0.40 - 0.55 per share. On Monday, Moody's Investors Service said that it may cut its rating on Macy's into junk terrority, which would increase borrowing costs for the company.

Will LVMH Acquire Coach?

2009-02-02T16:43:00.005-05:00

Coach Inc. and LVMH
Sittin' in a tree
M-E-R-G-I-N-G?

According to a report from WWD, that's the speculation going around the retail industry:
LVMH will have their 2008 Annual Results Presentation on Feb. 5th, so stay tuned......

More than 13,800 Coach Inc. calls changed hands on Friday, fueled by rumors that French luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton might acquire the luxury accessories marketer, according to OptionsMonster. Typical volume for Coach calls is 2,500 contracts. A Coach spokeswoman said, “The company doesn’t comment on market rumors.” LVMH executives declined comment as well. Although Coach has been the target of mergers talks in the past, market sources noted the firm, founded in 1941, has a long history of preferring to remain independent. Shares of Coach ended Friday’s session at $14.06 in heavier than average trading of 10.8 million shares, compared with average daily volume of 7.3 million shares.

UPDATE 2/4/09:

WWD.com reports that LVMH have denied any interest in acquiring Coach, Inc.:

LVMH Moët Hennessy Louis Vuitton has squelched speculation the French luxury giant could acquire Coach, as a spokesman officially denied any interest in the American accessories marketer.

As reported, more than 13,800 Coach Inc. calls changed hands last Friday, fueled by takeover rumors. Typical volume for Coach calls is 2,500 contracts.

The denial comes a few days before LVMH is set to report its 2008 results at a press conference in Paris on Thursday.

U.S. Prestige Beauty Sales Decline 3.3%

2009-01-28T13:54:00.011-05:00

A report released by marketing research firm, NPD Group, Inc. shows that U.S. sales of prestige beauty products dropped 3.3% in 2008.

Among the global markets that were tracked by NPD, the U.S. prestige market -- which are products sold mainly in U.S. department stores -- showed the largest decline. France and Italy showed decreases of 0.3% and 0.5% respectively, while China boasted an increase of 17.2%.

U.S. makeup sales also showed a decline, but there was a bright spot in the skincare category. Overall growth in the category remained flat, however NPD says that there is opportunity for growth due to increase interest in anti-aging skincare products.

Karen Grant, NPD's senior global industry analyst and vice president of beauty, said that U.S. fragrance category showed the biggest decline in sales of all the categories that were tracked. “The most pressing concerns for the fragrance category are not only the loss of users, but decreasing frequency of usage," said Ms. Grant. "It is important that the industry find new ways to engage consumers, especially as they become more independent about their product selection".

J.Crew Stumbles On The Obama Effect

2009-01-23T18:00:00.006-05:00

Fist bumps must have been going around the J.Crew offices when word surfaced that the First Family wore outfits and accessories from the retailer on Inauguration Day, and at various Inauguration weekend celebrations. First Daughters, Malia and Sasha Obama wore specially made outfits from the Crewcuts for Kids collection to the Inauguration ceremony, while First Lady Michelle Obama wore leather olive green gloves. President Barack Obama sported a white satin bow tie with his tux for the Inaugural Balls.

The NY Daily News reports that J.Crew's website, www.jcrew.com, shut down for an half hour as people flocked to the site to buy up the outfits. This isn't the first time the Obamas had a positive effect on J.Crew. When First Lady Michelle Obama appeared on "The Tonight Show with Jay Leno" wearing a three-piece yellow J. Crew ensemble, searches for the outfit caused their online traffic to increase 64% according to New York magazine.

So, it's puzzling that J.Crew didn't anticipate this type of response, and configure their site to a) be able to handle the traffic and b) offer a user friendly way to access merchandise that is similar to the pieces the Obamas wore, being that outfits and pieces the First Family wore were specially made and currently unavailable for purchase.

On the front page of the J.Crew website, the visitor is greeted with sketches of the outfits, as well as swatch samples. The visitor can "roll over" the images to get more info on the designs, as well as quotes from the designers:

(Photo: J.Crew/jcrew.com)

What was missing, however, were links to similar pieces that are being offered on the website. Performing a search for "Obama", "Michelle", "Barack", "Malia" or "Sasha" on the website only takes you back to the front page. It would have been prudent to have those searches lead to actual merchandise. It's great that J.Crew has received so much needed attention, but what's the point if they're not using in a way to generate profit?

However, this has been a good week for J.Crew. Since the Inauguration, the stock price has gone up from a Jan. 20th opening of $9.61 per share to a Jan. 22nd closing of $10.26 per share. Today, shares rose 55 cents to $10.81 during midday trading on analyst upgrade to "Equal Weight". It closed at $10.56 per share, down from an opening price of $10.96.

Move Over, Maybelline....Here Comes Latisse!

2009-01-14T09:17:00.011-05:00

Allergan, Inc. has done it again.

At the end of this month, Allergan, the pharma company that created Botox, plans to introduce Latisse, the first FDA approved prescription drug for growing long lashes.

The New York Times reports:

The product has the same formula as Allergan’s eye drops for glaucoma, called Lumigan. It is one of several drugs in a category known as prostaglandin analogs, which are meant to reduce dangerous pressure in the eyeball. But as a side effect, the treatment tends to make the eyelashes of many patients longer and fuller.

Ah, but don't get too excited. There are side effects such as red, itchy eyes, darkening of the eyelid as well as the iris, and hair growth on areas of skin that the product comes into contact with. That's not good news considering women spend hundreds of dollars on eye creams and hair removal products/services to combat the darkened skin around the eyes and unwanted hair.

Another drawback: Latisse would be considered "discretionary healthcare", which is not covered by health insurance. At $120 per monthly dose, in today's economy, will consumers be willing to shell out that much cash for long lashes when they can go to Tarjay and purchase mascara for a fraction of the price without the inconvenience of having to get a prescription?

The American Society for Dermatologic Surgery thinks so. According to a survey conducted by them last fall, despite the economic downturn, people were willing to pay the cost to look good:

Twenty-eight percent of the survey physicians said that their current use of fillers increased up to 30 percent, compared to six months ago and more than 40 percent of survey respondents stated that the number of Botox procedures also increased compared to six months ago.

However, if we're going to use Botox sales as a barometer for how Latisse will do, Allergan's financials tell a slightly different story. Newsweek reports:

Last January, Allergan projected that Botox revenues would rise about 14 percent to about $1.4 billion in 2008. Allergan's third-quarter report wrinkled a few brows when it revealed that Botox sales would rise only 4 percent or 5 percent.

Still, David E.I. Pyott, CEO of Allergan is optimistic, projecting sales of Latisse in excess of $500 million. Mr. Pyott compares the cost of the drug to that of a daily cup of coffee:

“If you think about it in terms of luxury, it’s four dollars a day,” he said. “We think this is fairly acceptable to a large segment of people even in these times.”

ELuxury.com Shuts Down To Reinvent Itself

2009-01-13T18:45:00.004-05:00

The retail industry was blind-sided last Friday when LVMH announced that it would be closing it's high-end retail commerce website, eLuxury.com in the next six months.

Unlike other retail closings, this one has nothing to do with financial performance. In fact, eLuxury.com has had double-digit sales growth from 2007 to 2008. A spokeswoman for LVMH told WWD.com that the decision to shut down eLuxury was because "many of the brands it sells have developed their own online presences".

However, eLuxury.com will still exisit, just in a different form. WWD.com reports:

“Starting in mid 2009, eLuxury’s new mission will be to create an ‘e-window’ into the world of luxury, by serving as an information reference for luxury in fashion, art de vivre, leather goods, wines and spirits, watches and jewelry, gastronomy, cars, yachts and services,” the spokeswoman said. “To that end, eLuxury intends to develop collaborations with the most prestigious names in the world of luxury media, as well as the main contributors of the luxury world.”

Can an e-magazine that's backed by one of the world's largest luxury congolmerates truly serve as a "reference for luxury in fashion"? In its current state, as a retail site, while eLuxury.com offers non-LVMH brands in its lineup, it's the LVMH brands that get the best product placement on their site, and in their email promotions. Will that carry over into the new venture, or will the new eLuxury give its readers bipartisan coverage of the luxury industry allowing PPR and Richemont, LVMH's biggest competitors, to receive positive exposure?

Peter Som Parts with Creative Design Studios, Cancels Fashion Show

2009-01-09T16:58:00.001-05:00

Another retail marriage has dissolved.

Women's Wear Daily reports that Peter Som and Creative Design Studios, a subsidiary of Lord & Taylor LLC, have decided to part ways, undoubtedly due to the economic crisis that has delivered a major blow to the fashion retail industry. As a result, Mr. Som has cancelled his Fall '09 show for NY Fashion Week.

“We have realized that our strategic interests are no longer aligned and feel that this is the best direction for our company at this time,” said Som. “While these are challenging times for luxury brands both small and large, it’s an opportunity for us to reshuffle our deck of cards. I remain creatively inspired and am looking forward to exploring opportunities where we can grow with the right partner, or on our own.” (Source WWD.com)

NRDC Equity Partners, the parent company of Lord & Taylor, created CDS in 2007 with the purpose of working with American designers. They made an initial investment of $10 million in Mr. Som for a two-thirds stake in his company.

“Peter’s talent is enormous but the realities of today’s marketplace have forced us to reevaluate all of our strategic partnerships,” said Susan Davidson, ceo of CDS. “We need to focus all of our resources on our core businesses — Lord & Taylor and The Bay department stores.” (Source: WWD.com)

The last few months have been trying for Som. In Oct. '08, he left Bill Blass, due to lack of finances on the part of NexCen Brands, Inc., the parent of the Blass label. However, Elana Posner, co-owner of Peter Som Inc. remains optimistic, exploring options for the fall.

Here's a thought: Now that Peacock International Group is the new owner of the Bill Blass label, could Som give the Blass brand another shot?

Macy's To Close 11 Stores

2009-01-08T11:00:00.001-05:00

Amid dismal same-store sales results for December 2008, Macy's Inc. announced it will close 11 underperforming stores in nine states. These closings will affect approximately 960 employees.

"These closings are part of our normal-course process to prune underperforming locations each year in order to maintain a healthy portfolio of stores," said Terry J. Lundgren, chairman, president and chief executive officer of Macy's, Inc. "While new store growth has slowed in the current economy, our long-term strategy is to continue to selectively add new stores while closing those that are underperforming."

Stores to be closed are located in:

Ernst & Young Plaza (Citicorp Plaza), Los Angeles, CA
The Citadel, Colorado Springs, CO
Westminster Mall, Westminster, CO
Palm Beach Mall, West Palm Beach, FL
Mauna Lani Bay Hotel, Island of Hawaii, HI
Lafayette Square, Indianapolis, IN
Brookdale Center, Brooklyn Center, MN
Crestwood Mall, St. Louis, MO
Natrona Heights Plaza, Natrona Heights, PA
Century III Furniture and Clearance, West Mifflin, PA
Bellevue Center, Nashville, TN

December Same-Stores Sales Results Bring The Pain To The Retail Industry

2009-01-08T10:36:00.020-05:00

Well, the December same-store sales results of the nation's retailers are in and it ain't pretty.

Deep holiday discounts were not enough to save the apparel sector. Macy's, Inc. reported same-store sales down 4% for December, less than the 5.3% decline analysts projected.

"The holiday shopping season ended with strong sales in the fourth and fifth weeks of December after a slow start to the month and unfavorable weather conditions in the Northeast, Midwest and Pacific Northwest," said Terry J. Lundgren, Macy's, Inc. chairman, president and chief executive officer. "We went into the fourth quarter with an objective of reducing inventory levels to position us for 2009. We are pleased to have accomplished that objective with approximately 7.5 percent lower inventory on a comparable store basis at the end of December compared with last year."

Ironically, meeting that objective, via markdowns and sales, has caused the company to cut its earnings per share expectations for the fourth quarter ($0.90 to $1.00 per share vs. $1.10 to $1.30 per share) and fiscal '08 ($1.10 to $1.20 vs. $1.30 to $1.50). There are also plans to close 11 underperforming stores.

Luxury stores were hit the hardest, undoubtedly a reflection of the Wall St. layoffs and affluent consumers experiencing major losses in their investment portfolios.

Neiman Marcus, Inc. led the pack with a 27.5% drop in December same-store sales, experiencing losses across all merchandise categories.

December same-store sales for Saks, Inc. decreased 19.8%, almost twice as much as analysts predicted, with weakness in the women's apparel, outerwear, men's clothing and advanced sportswear, women's shoes, and handbags categories.

Coach, Inc., one of the few retailers that did not discount their merchandise, in an attempt to protect their "brand proposition", reported same-store sales for the quarter declined 13%. As a result, earnings expectations for the second fiscal quarter were lowered 3% to $0.67 per share.

Nordstrom, Inc. cited industry wide competitive markdowns as the reason for it not meeting earnings expectations of $0.35 to $0.45 per share.

The biggest surprise was Wal-Mart. The world's biggest retailer reported same-store sales increased 1.7%, but it didn't meet the 2.7% estimate, thus it was forced to cut earnings estimates to $0.94 per share, down from projected $1.07 per share.

Things will probably get worse for retail. Thanks to some retailers not offering discounts, they have an abundance of inventory that needs to be cleared out before the spring shipments arrive. In order to get rid of inventory, they'll be forced to discount which cuts into their bottom line. Combine that with January and February historically being slow because consumers are waiting for Spring collections.

Bill Blass Couture Files For Bankruptcy

2009-01-05T09:37:00.019-05:00

The economy is beginning to take it's toll on the high-end fashion industry. The first victim -- Bill Blass Ltd:

The company filed a Chapter 7 bankruptcy petition Wednesday with the U.S. Bankruptcy Court in Manhattan, listing assets of $192,000 and debts of $829,000, court papers show.

The company halted operations last week because it "did not have the financial wherewithal to continue," according to its bankruptcy attorney, Harold S. Berzow of Ruskin Moscou Faltischek P.C. ......
The bankruptcy petition shows the company has $11,250 in miscellaneous assets, including office equipment, $25,000 in inventory, about $90,000 in its bank account and $155,361 in accounts receivable..... (Source: WSJ.com)

This shouldn't come as a surprise. Just before Christmas, NexCen Brands Inc., the parent company, sold its Bill Blass licensing business to Peacock International Holdings LLC for $10 million to pay off debt, and laid off 60+ workers without severance pay.

The question is, Can Bill Blass recover? Here's some advice from former Blass head designer, Michael Vollbracht:

“You need the Blass DNA – it’s crucial,” says Mr. Vollbracht, who also was a personal friend of Mr. Blass’s. “You need to make good, classic clothes for women who don’t like fads. Bill Blass was not faddish.” (Source: WSJ)

I believe they had that with Peter Som, but NexCen couldn't afford him thanks to a $30 million debt they acquired to purchase Great American Cookie. Who knew a lil' ol' chocolate chip cookie would help bring down a fashion empire?

But there's hope. Peacock, with annual sales of $70 million, has plans on reviving the brand "within 9-12 months".

The new owners of the Blass trademark and its nearly 20 licenses plans to focus first on getting its licenses “on the same page – the brand identity is a little uneven,” Scott Patti says. “We’re very intrigued by the international business opportunities of the Bill Blass brand – we believe NexCen hasn’t even scratched the surface of that worldwide.” When asked about the potential for the brand, he notes that the Blass brand once did sales of $500 million annually. (Source: WSJ.com)

Stay tuned........

Welcome!

2009-01-03T11:20:00.000-05:00

Hello and Welcome!

Like any fashionista, I LOVE talking about fashion and beauty: the latest "It" bag, the hottest up and coming designers, the new must-have lip gloss.....etc.

However, I'm also interested in the business side of the industry, so I decided to create Haute Retail, a blog that waxes financial on the fashion and beauty world.

At Haute Retail, we'll discuss the business trends and financial aspects of the industry, as well as learn about the movers and shakers that help shape the beauty and fashion biz.

Enjoy!