It`s Go Time - WordPress.com
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It`s Go Time - WordPress.com
Women’s Wear Daily • The Retailers’ Daily Newspaper • November 27, 2006 • $2.00 WWDMONDAY Accessories/Innerwear/Legwear It’s Go Time By David Moin Christmas can wait, at least for many shoppers. That seemed to be the mantra among the hordes of consumers who rushed to take advantage of doorbusters and other bargains during Black Friday weekend, as many preferred to shop for themselves ahead of gifts. As for presents under the tree, electronics and toys ruled the weekend once again, leaving fashion lower on shopping lists and stores poised for price slashing in the weeks ahead. But retail executives remained upbeat about the fourth quarter, pointing to the weekend’s buoyant demand for handbags, diamond jewelry, cashmeres, party dresses and gift cards. Department and specialty stores such as Saks Fifth Avenue, J. Crew, holiday PHOTO BY ZACK SECKLER ’06 See Early, Page 4 Shoppers clutter the sidewalks of New York’s Fifth Avenue on Black Friday. : ide II ew Ins tion vi e c Se Pr SC IC ARMANI COUTURE PUSH/2 MULBERRY BRANCHES OUT/9 2 WWD, MONDAY, NOVEMBER 27, 2006 WWD.COM Philo Said Working With Gap PARIS — Phoebe Philo, who last January resigned from the creative helm at Chloé, appears to have already dipped her toe back into fashion, WWD has learned. According to market sources, Philo has been quietly consulting for Gap in Europe. Reached late Friday, a Gap spokeswoman in London said: “We’ve been working with a number of external design consultants since we moved the design team to London this summer. The only one we’re talking about publicly is Roland Mouret.” Earlier this month, Mouret’s capsule collection of dresses arrived in 160 Gap stores in the U.K., Ireland and France, plus a handful of units in New York. WWDMONDAY The company indicated it had pumped up its European design team to 35 people. “Design is the way forward on the high street,” Stephen Sunnucks, president of Europe, Gap Inc. International, said at the launch of the Mouret line. It could not immediately be learned if any of Philo’s design ideas have yet landed on the sales floor of Gap stores. But the retailer’s women’s business, which has been lagging in Europe as well as the U.S., could certainly benefit from the design prowess of Philo, whose feminine dresses and coveted handbags helped catapult Chloé into fashion’s big leagues. Philo, who has kept a low profile since exiting Chloé, could not be reached for comment. Accessories/Innerwear/Legwear GENERAL Armani to Raise Couture Presence luxury strip, which recently welcomed Bottega Veneta, Chloé and Jimmy Choo boutiques. A lower-level suite for men’s made-to-measure clothing is among the features of the 4,300-square-foot Armani unit under construction. The designer launched his Armani Privé couture collection in 2005, targeting both traditional couture buyers and clients for high-end ready-to-wear. Initially focused on eveningwear, the collection has recently expanded to cocktail and daywear. Last July, Armani opened a couture showroom at 2 Avenue Montaigne to receive clients for sales and fittings. Details about the skin care launch could not immediately be learned, but sources said the women’s creams would hit retail as early as fall 2007 and men’s products be layered on early in 2008. Armani’s beauty business is licensed to French giant L’Oréal and has one of the strongest men’s fragrances worldwide, its Acqua di Gio for Men scent, a bestseller since its 1997 introduction. A color cosmetics collection was introduced in September 2001 in extremely tight distribution. The goal for 2006 was to grow product assortment by 80 percent, add door count and increase sales in the U.S. to $27 million at retail, according to industry sources. All together, the Armani beauty business is estimated to ring up more than $200 million in retail sales yearly in the U.S. — M.S., with contributions from Jennifer Weil Aeffe Appoints CEOs at Moschino, Pollini By Luisa Zargani MILAN — Aeffe has picked new leaders for its Moschino and Pollini brands. The Italian manufacturer has appointed Thierry Andretta and Antonella Tomasetti chief executive officers of Moschino and Pollini, respectively, effective Jan. 1. “We wanted to give more autonomy to each brand,” said Massimo Ferretti, chairman of Aeffe, which also controls the Alberta Ferretti business. “These appointments are an expression of our intention to expand 100% Financing for Purchase Orders Target all size customers Start-ups okay CALL US TODAY Ashford Finance (888) 532-9036 these businesses and accelerate their growth,” Ferretti said. He praised Andretta, who was president of Replay U.S., as a “team man, an experienced manager who will know how to further develop the Moschino brand.” The announcements came after Aeffe’s buyback this month of a 20 percent stake in the group from merchant bank Sanpaolo IMI — a move made to directly control management and strategies, effectively scrapping the idea of an initial public offering for the time being. Siblings Massimo and designer Alberta Ferretti now control 100 percent of the company, which also manufactures and distributes collections for Narciso Rodriguez and Jean Paul Gaultier. Before working at Replay, Andretta had been ceo of high-end sportswear company Belfe, chairman of Emanuel Ungaro and Celine and, before that, vice president at Gucci Group in charge of its emerging brands division. Moschino is expected to report sales of 70 million euros, or $89.7 million, in 2006. The brand also holds a licensing business of about 200 million euros, or $256.4 million. Dollar figures were converted from the euro at current exchange. Ferretti said Andretta would help expand Moschino’s retail distribution; for example, boutiques are scheduled to open next year in New Delhi and Istanbul. Tomasetti will take over at Pollini for Simone Badioli, who was the brand’s interim ceo. Tomasetti was appointed Moschino’s general manager in 2004, when Marco Gobbetti left his ceo position for Givenchy. She had been working as international sales director at Aeffe since 1993. “She has 360-degree experience, from marketing to customer service, logistics and production,” Ferretti said. “Now that we’ve restructured Pollini, she will be able to accelerate its growth.” Aeffe took control of accessories company Pollini in 2001 and developed it as a ready-to-wear collection, designed by Rifat Ozbek. Pollini stores are poised to open in St. Petersburg and Moscow next year. The company is expected to report sales of 65 million euros, or $83.3 million, in 2006, up 11 percent over the previous year. Retail Roundup: Shoppers spent Black Friday hunting for bargains as well as searching for the holiday’s “must-have” gift items. 16 For any young woman — or two, as the case may be — navigating New York’s social whirl requires the ability to change on the go. Giorgio Armani, who rocked London Fashion Week with a huge Emporio Armani event, is set to make another big splash at the Paris couture. Italy’s Aeffe has named Thierry Andretta and Antonella Tomasetti as chief executive officers, respectively, of its Moschino and Pollini units. BEAUTY: Geneva-based fragrance supplier Givaudan has agreed to acquire competitor Quest International for $2.3 billion. INNERWEAR: Eager to glean information about the international trade show circuit, executives came in force to a seminar on the Lyon fair. Sir Paul Smith’s new shop in Paris offers ceramic figurines and vintage toys alongside his own men’s and women’s designs. EYE ICSC Preview runs in this issue as a Section II. Classified Advertisements.............................................................14-15 To e-mail reporters and editors at WWD, the address is firstname. [email protected], using the individual’s name. ARMANI PHOTO BY STEPHANE FEUGERE PARIS — Giorgio Armani, who rocked London Fashion Week last September with a huge Emporio Armani event, is set to make another big splash — this time at the Paris couture in January. WWD has learned that the Italian designer is planning a series of large-scale events to intensify his couture presence and to mark the opening of a flagship on the Avenue Montaigne. According to sources, Armani will also use the occasion to unveil his first foray into skin care with prestige collections for women and men. Armani officials could not immediately be reached for comment. However, Didier Grumbach, head of the Chambre Syndicale de la Haute Couture, confirmed that Armani has requested an evening time slot on Jan. 24 and booked a new and much larger Giorgio venue: Paris’ Museum of Modern Armani Art, which recently underwent a major renovation. It is currently the site of a Karen Kilimnik exhibition. Previously, Armani opened couture week with two audiences numbering about 200 each in relatively small and modest digs, the firm’s showrooms on Rue Lauriston. Sources said the upcoming January couture show, with a gala dinner to follow, would accommodate approximately 600 guests, including the usual contingent of international celebrities. Armani is also said to be planning a cocktail party to celebrate the new store. The unit, which replaces a previous flagship in Place Vendome, will be the latest addition to the city’s premier 1 2 2 3 8 11 WOMEN’S WEAR DAILY IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLICATIONS, INC. COPYRIGHT ©2006 FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. VOLUME 192, NO. 110. WWD (ISSN # 0149-5380) is published daily except Saturdays, Sundays and holidays, with one additional issue in January, two additional issues in March, May, June, August, October, November and December, and three additional issues in February, April, and September by Fairchild Publications, Inc., a subsidiary of Advance Publications, Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Advance Magazine Publishers Inc.: S.I. Newhouse Jr., Chairman; Charles H. Townsend, President & C.E.O.; John W. Bellando, Executive Vice President and C.O.O.; Jill Bright, Executive Vice President_Human Resources; John Buese, Executive Vice President_Chief Information Officer; David Orlin, Senior Vice President_Strategic Sourcing; Robert Bennis, Senior Vice President_Real Estate; Maurie Perl, Senior Vice President_Chief Communications Officer. 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WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR LOSS, DAMAGE, OR ANY OTHER INJURY TO UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED COMING THIS WEEK By Miles Socha TUESDAY: The Conference Board releases the Consumer Confidence Index for November. Chico’s Inc. and Gottschalks Inc. report third-quarter sales and earnings. WEDNESDAY: The Federal Reserve Board releases the Beige Book economic report. Aéropostale Inc., Bon-Ton Stores and Tiffany & Co. report third-quarter sales and earnings. THURSDAY: Major U.S. retailers report November samestore sales. Kellwood Co. reports third-quarter sales and earnings. In Brief ● ACTOR APPEALS TO BURBERRY: Ioan Gruffudd, the Welsh actor and face of the Burberry London fragrance for men, has appealed to the British brand to rethink the planned closure of its Welsh factory. As reported in September, Burberry announced plans to shutter its factory in Treorchy, south Wales because it is no longer commercially viable. A Burberry spokeswoman on Sunday confirmed that Gruffudd had e-mailed Burberry chief Angela Ahrendts asking her to do whatever she could to keep the factory open. The Sunday Times of London reported that Prince Charles also made an appeal to government ministers to ask if there was anything he could do to help. However, a spokesman for the Prince told WWD he was not aware of any appeal on the part of Prince Charles. The factory, which has been in operation since 1939, makes polo shirts and currently employs 311. Burberry is holding weekly meetings with unions to discuss the future of the factory, and the fate of employees should the plant close for good. Correction An incorrect photo accompanied a story on page 12, Tuesday, about the renovated Chanel boutique on Michigan Avenue in Chicago. Here, the correct photo by Karen Hoyt. WWD, MONDAY, NOVEMBER 27, 2006 3 WWD.COM Givaudan-Quest: Creating a New Number One By Brid Costello and Matthew W. Evans Gilles Andrier W ith its $2.3 billion acquisition of competitor Quest International last week, fragrance supplier Givaudan vaulted to the top of the heap and redrew the competitive map. Givaudan, based in Vernier, Switzerland, and Quest, the flavors and fragrance business unit of U.K.-based Imperial Chemical Industries plc, expect the deal to be finalized during the first quarter of next year. The acquisition, which is valued at 1.2 billion British pounds, or about 2.8 billion Swiss francs, or $2.3 billion at current exchange, is subject to regulatory and shareholder approval. Along with flavors and fragrance suppliers Firmenich, International Flavors & Fragrances and Symrise, Givaudan and Quest are in the top tier of players within the flavor and fragrance supply industry. Their business segments include fragrance production for consumer products such as perfumes, shampoo and detergent, as well as flavors for the food and beverage industries. Givaudan expects the acquisition of Quest to “extend Givaudan’s leadership position in all strategic segments of the fragrance and flavor industry,” the company said in a statement. Combined annual revenues of the companies are expected to be about four billion Swiss francs, or $3.26 billion, of which 44 percent would be derived from its fragrance business and 56 percent from flavors. That would mean its fragrance sales would weigh in at approximately 1.76 billion Swiss francs, or $1.43 billion. Givaudan said it expects to achieve annual synergies of 150 million Swiss francs, or $122.2 million, with “full benefits” realized the third year after the acquisition. The deal is to be funded by debt and an issuance of one billion Swiss francs, or $815.6 million, in equity. The Givaudan-Quest deal marks one of the biggest acquisitions — in an industry punctuated in recent years by consolidation — since the 2002 merger of Haarmann & Reimer and Dragoco, which at the time had combined sales of $1.42 billion, a deal that spawned Symrise. Givaudan itself was merged with fragrance supplier Roure in 1991 by then parent company Roche and was known as Givaudan Roure for about a decade. “In fragrances, Givaudan will become the global market leader in fine fragrances and [fragrances for] consumer products,” the company said. “Furthermore, it will expand the customer base and strengthen its position with existing clients.” To put that in context, according to a ranking commissioned by WWD Beauty Report International earlier this year, Firmenich topped the list of the 10 largest fragrance suppliers worldwide in 2005 with sales estimated by industry sources to have hit 1.53 billion Swiss francs, or $1.23 billion at average exchange for 2005, followed by IFF with $1.14 billion. Givaudan took the third spot with 1.13 billion Swiss francs, or $910 million; Symrise was fourth with 609 million euros, or $758 million, in sales volume, according to industry sources, and Quest came in fifth with sales of 301 million pounds, or $548 million. In 2005, Quest rang up total sales, including its fragrance and flavors businesses, of 560 million pounds, or $1.02 billion at average exchange, while Givaudan generated 2.8 billion Swiss francs, or $2.3 billion. “I am genuinely very excited about the opportunity we have to combine Givaudan and Quest,” said Gilles Andrier, Givaudan’s chief executive officer, during a conference call on Wednesday. “This is a transforma- tional event for both companies, and we are we convinced that this transaction will reshape the status quo of our industry.” Andrier outlined the strategic rationale behind the acquisition, noting the deal expands Givaudan’s global reach, enhances its pool of creative talent, expands its consumer understanding, improves its product and service offering and strengthens its technological and research-and-development capabilities. “Together with Quest, we will form an unrivaled platform to provide an even more comprehensive service to our customers around the globe,” said Andrier. “Combined, the companies give rise to a balanced global footprint with significant sales in all global regions. “Acquiring Quest is a key step to realizing our strategic vision of becoming the essential source of sensory innovation for our customers,” continued Andrier. Quest, which has headquarters in Naarden, the Netherlands, was acquired by ICI from Unilever in 1997. “This is an outstanding opportunity for Quest,” said Isabelle Parize, group vice president of fragrances at Quest, in a statement from the firm. “Givaudan has an inspiring and long history in fragrance creation. We will be joining the most respected and profitable business in our industry and creating a clear market leader. The combined businesses provide a powerful innovation platform and we are delighted about the extra value we will be able to offer our clients. Through this deal we will be in a position to better leverage our joint capabilities in the areas of consumer and sensory understanding, technology and science.” Fragrance consultant Ann Gottlieb, president of Ann Gottlieb Associates, sees the deal as a beneficial marriage that will help both Givaudan and Quest, particu- BEAUTY BEAT ANDRIER PHOTO BY CHRISTOPHE BOSSET-BLOOMBERG NEWS-LANDOV Ralph Lauren’s Polo Double Black. Sean Combs’ Unforgivable. larly in light of the recent advent of manufacturers restricting the number of their suppliers with “core lists.” Some manufacturing clients had listed one company but not the other. “It’s going to be easier for the fragrance companies to have relationships with the cosmetics companies,” she noted. “This is a great move for Givaudan,” she said, but pointed out that the benefits are more mixed for Quest. The management of Quest, led by executives like Parize, was beginning to make headway in moving the company forward. “Now, no one will ever see where the company could have gone,” Gottlieb noted. Indeed, John McAdam, ceo of ICI, said in a letter to colleagues, “Quest has for many years been one of ICI’s ‘Grow Aggressively’ businesses and the management team has done a good job of progressively improving performance and developing its market position. The business has been growing its top line faster than its markets’ rate of growth and expanding margins. It is clearly heading in the right direction and on track to return to its pre-2003 margin levels.” He added in the statement, “At the same time, it was well known that the flavors and fragrance industry was likely to experience further consolidation. Quest is one of five leading global players, amongst hundreds of national and regional flavor and fragrance houses. The combined Quest/Givaudan business will be number one in all regions in almost all flavors and fragrance sectors. I am genuinely excited by the opportunity this gives Quest, not just to continue its growth but to be part of the industry leader in flavors and fragrances with all the advantages, opportunities and challenges that come with such a position.” When asked what effect core lists had when the deal was being drawn up, Cosimo Policastro, Givaudan’s executive vice president of fine fragrances for North America, said, “It’s a reality of our business. But I don’t think you can slice this down and say core lists had any major influence,” he said during an interview in New York Wednesday. “It certainly has influence, but I wouldn’t suggest any more or less than the other things one considers when one looks at growth opportunities. “To make an acquisition of this size, there were a lot of things taken into consideration,” he said, adding that the deal “makes us number one in fine fragrance and puts us in a better position with our top consumer products companies.” In terms of perfumery, the two companies complement each other, Gottlieb added. Givaudan has been strong recently in men’s fine fragrances, winning the contracts for Ralph Lauren’s Polo Double Black and Sean Combs’ Unforgivable. But it has been weak on the women’s side of the business and that’s where Quest is strong. Industry consultant Allan Mottus compared the union to Federated Department Store Inc.’s acquisition of May Co. “You might as well get the stronger players together while you can,” he remarked. Mottus noted that beauty firms are asking suppliers for better prices, which in turn has forced suppliers to knock down overhead. “You have more global companies today, so having corporate size and financial wherewithal is important,” he said. — With contributions from Pete Born and Molly Prior 4 WWD, MONDAY, NOVEMBER 27, 2006 Early Sales Lure Shoppers Continued from page one Macy’s, Bloomingdale’s and Lord & Taylor were far less promotional than discounters and outlets, and no more so than last year. According to the National Retail Federation’s 2006 Black Friday Weekend Survey, conducted by the BIGresearch consumer research firm, more than 140 million shoppers hit the stores on Black Friday weekend, spending an average of $360.15, up 18.9 percent from last year’s $302.81. “Each year, consumers have greater expectations for doorbuster specials, forcing retailers to raise the bar,” said NRF President and chief executive Tracy Mullin. “This year, stores did not disappoint as deals on high definition televisions and apparel were just too good to pass up.” As of Sunday, the average person has completed 35.6 percent of their holiday shopping, showing no change from last year, NRF said. Only one in 12 consumers has finished their holiday shopping. NRF continues to project that holiday sales will rise 5 percent this year to $457.4 billion. The survey polled 3,090 consumers from Nov. 23 to 25. Jack Kyser, chief economist with the Los Angeles Economic Development Corporation called the weekend “a good start” to a potentially robust season, citing increased consumer confidence in the economy in Southern California following the Democratic sweep in the mid-term elections. “In Southern California, the economy is very, very good. Los Angeles County unemployment is 4.3 percent — and we characterize that as beyond good employment — and the housing market didn’t tank like people thought it would.” Even as many consumers focused on buying for themselves over the Black Friday weekend stores recognize the serious gift shopping will happen, even if it comes late in the season. Stores are generally projecting mid-single-digit gains, despite relatively mild temperatures that hurt demand for coats and cold-weather accessories during the weekend. The home market also lagged, as the housing market softens. “If you didn’t have electronics, you may have suffered,” observed Ken Lakin, chairman and ceo of Boscov’s, the Reading, Pa.-based full-line department store chain. “We were pleased with our results. We were right on target, but I hope it gets cold,” said Michael Gould, chairman and ceo of Bloomingdale’s. “We have markdowns and good value in our stores, but we don’t deal with doorbusters. Our average unit ticket sale on Friday was 10 percent higher than last year, and on Saturday, it was 13 percent higher, pretty much in line with our average unit price increase all year long, which was about 9 percent higher. That says to me we sent a much better ticket out the door.” Gould acknowledged the high level of self-purchasing, and cited fashion accessories, particularly handbags, as the strongest area, with shoes from Chanel to Uggs, as well as contemporary sportswear and denim, also strong. “It was a good start, but it’s a long time between Thanksgiving and Christmas,” said Ron Klein, chairman and ceo of Macy’s East. “The crowds looked a little bit larger this year.” He cited men’s collections, cosmetics, handbags, dresses, and fine jewelry as top categories. “The weather didn’t ignite cold-weather merchandise, but cashmere was strong,” Klein said. “Cashmere is not about keeping warm. It’s about affordable luxury.” Jane Elfers, ceo of Lord & Taylor, agreed with Klein. “Nothing happened over the weekend that would make me change my outlook,” she said. “Department stores are in a good place. It will be a fairly strong season. By far the best businesses [over the weekend] were handbags, fine jewelry which is really diamonds, Ugg boots, special occasion and little black dresses, cocktail dresses, designer handbags particularly from Coach and Dooney & Bourke. “It’s a six-week season and we just finished the first two days.” But if the opening weekend is any indication, the holiday will once again be about hot electronic items, toys and gift cards rather than a fashion trend. “It was kind of a strange weekend, with very high volume and traffic,” Boscov’s Lakin added. “Electronics and jewelry really led the day. We had to reorder plasma TVs, probably the single biggest item we had, and a lot of jewelry,” particularly diamond stud earrings and tennis bracelets. “Apparel didn’t really happen. It was OK.” In years past, such categories as Nordic fleece, pashminas, boots, chunky merino wool and cashmere sweaters would pace sales right after Thanksgiving, Lakin said. But with that not happening, “prices are going to come down on apparel and cold-weather items just when it gets cold, so it should be good for the consumer.” holiday ’06 Macy’s Herald Square on Black Friday. It could be a couple of weeks before retailers see a significant pickup in winter-related goods, considering a mild first half of December, and a colder second-half forecast. “There could be a lot of inventory around, and you better believe it will be sharply priced,” Lakin said. Steve Sadove, ceo of Saks Fifth Avenue Enterprises, was out in the malls in the Washington D.C. area Friday and Saturday. “There certainly was a lot of traffic. The mood was good. Stores were busy. People were responding to the fashion and a lot of the key items, things like handbags, accessories, cosmetics, fragrances, and men’s sportswear.” However, the outlook for Saks’ regular-priced stores looks good as well, especially with the stock market strong and high bonuses expected on Wall Street. “The mood at the luxury end is positive,” Sadove said. “The day after Thanksgiving is very important. It sets a tone for the season, but it’s not the only important day,” Sadove added. “The luxury sector is somewhat less dependent on that day than other parts of the retail indus- try. Loyalty shopping days at Saks can be bigger volume days than Black Friday.” For mainstream retailers, however, Black Friday is typically the second or third largest volume day of the year, next to the Saturday or Saturdays before Christmas Day. It also has become a period of major promotions by retailers, some of whom opened at midnight this year for the first time to excite the consumer. But in many cases, it was the promotions that consumers zeroed in on, rather than regularly priced merchandise. “Everyone was cherry picking for sales,” admitted one ceo of a fashion chain. “Electronics, doorbuster specials, toys, MP3s, iPods, plasma TVs, they were all out of control. That didn’t help us a lot. Thanksgiving weekend was not a great indicator for us. It’s too early to tell,” how the season will evolve. MASS APPEAL While many discount stores were packed over the weekend, it wasn’t all holiday cheer. Wal-Mart said its WWD, MONDAY, NOVEMBER 27, 2006 5 WWD.COM The throng by Saks’ holiday windows. Window shopping at Bergdorf Goodman. Hot Stuff Based on consumer demand at Shopping.com on Black Friday, the most popular products for the 2006 holiday season include: The average ticket price at Bloomingdale’s in SoHo was higher than last year. PHOTOS BY JOHN CALABRESE; NAN COULTER; ZACK SECKLAR AND KEITH SMITH Dallas Galleria comp store sales would dip 0.1 percent in November, the first negative comp in years and a continuation of the retailer’s woes in its flagship U.S. business. Walmart. com was caught off guard by a traffic surge that began in the wee hours Friday morning and caused crashes and delays. Starting Thanksgiving Day, the site’s traffic has been up 60 percent, which “greatly exceeds the high end of our forecast,” said Walmart.com spokeswoman Amy Colella on Friday. Wal-Mart offered several Web-only deals, including a George bathrobe for $12. The best seller was a Kodak digital camera and printer for $189.74. Samsclub.com also offered Web exclusives on Black Friday, including an Anne Klein silk trenchcoat for $88.88 and half-carat diamond studs for $897. At the Atlanta Wal-Mart, open a month ago, the hottest apparel items were Levi women’s jeans, on sale for $12, and terry cloth robes, for men and women, at $17, which went through “several boxes of stock before noon,” said Rudy Sims, market manager for nine Wal- Marts in North Georgia. “Our plan of spreading out hot items on endcaps throughout the stores, to avoid crowding, worked well,” said Sims.” At a Target in Saugus, Mass., shoppers jumped on deals. A Mossimo wool portrait-collar coat, on sale for $35, was nearly gone. Behnaz Sarafpour’s white cocktail dress with black cummerbund and plum silk blouse with grosgrain tie also seemed to be a hit, based on low inventory. The Minneapolis-based retailer appeared to be doing a brisk business in cold-weather accessories, video games and holiday decor. Close to a dozen staffers were restocking the Christmas department and answering questions about light sets and artificial trees. At a Target north of New York City on Saturday, demand also seemed to be stronger for holiday decorations and electronics than for fashion. The accessories department was heavily shopped, but the women’s area — including the Sephora and Isaac Mizrahi items — was virtually deserted. ELECTRONICS Apple iPod Nano and iPod Video Microsoft Xbox 360 video game console PlayStation 3 video game console and PlayStation Portable video game console Canon PowerShot SD600 digital camera Panasonic 50 inch HDTV plasma TV Samsung 42 inch HDTV TOYS TMX Tickle Me Elmo LeapFrog Leapster multimedia learning system My Little Pony crystal rainbow castle Hasbro Fur Real Friends Butterscotch Plush Pony Fisher-Price Power Wheels Barbie Jammin’ Jeep Wrangler HOME Cuisinart 12-Cup coffee maker Dirt Devil Kone vacuum iRobot Roomba vacuum Cuisinart 7-Cup food processor George Foreman G5 indoor grill CLOTHING/ACCESSORIES Michael Kors Michael slouch harness boot Adidas a3 Gigaride men’s running shoes Ugg’s women’s boots Spy Astro sunglasses Oakley Women’s Minute sunglasses MALL MADNESS Karen MacDonald, director of communications for Taubman Centers, said: “We had two solid days of postThanksgiving business, with Friday definitely the stronger of the two. Most stores were trending low-to-midsingle digit gains for Saturday, and Friday, with Florida trending higher. No particular item stood out, but electronics, toys and beauty were the hottest categories. There were more teens and more men out for early birds on Friday, particularly teens. They were out there five or six o’clock in the morning.” The luxury mall Lenox Square in Atlanta, owned by Simon Properties, opened at 6 a.m. Black Friday, two hours earlier than recent years. Approximately 40 stores, including Macy’s, Gap, The Limited, Express, Victoria’s Secret and the Apple Store participated in Black Friday sales that ended at noon, and 65 had daylong promotions. “Such Black Friday discounts aren’t as common in mall stores as in Wal-Mart, Target and Best continued on page 6 6 WWD, MONDAY, NOVEMBER 27, 2006 WWD.COM Toys, Gadgets Trump Apparel Despite the name change, Macy’s on State Street, formerly Marshall Field’s, drew crowds. Continued from page 5 Buy,” said Dewayne Herbert, marketing manager for Lenox Square. “The parking lot was 40 percent full at 6 a.m.” “Traffic was absolutely much better than last year,” said Janet LaFevre, marketing manager for Glendale Galleria in Glendale, Calif. “And it started really, really early. I was shocked at the number of people in the center at 5 a.m. Even though the shopping center wasn’t supposed to open until 6 a.m., stores like Penney’s and Disney opened earlier.” “Crowds were larger than expected,” said Debra Gunn Downing, executive director of marketing for South Coast Plaza in Costa Mesa, Calif., where stores began opening at 5 a.m. Many luxury stores at the center, including Tory Burch and Bulgari, reported significant full-priced selling, and a large percentage of people who were shopping for themselves. SPECIALTY STORES ON PLAN At J. Crew, “We are very pleased with business both Saturday and Friday. The momentum for J. Crew continues,” said Margot Brunelle, head of marketing. Bestsellers included argyle cashmere cardigans and crewnecks, $168; cashmere hoodies, $168; double cloth wool coat, $298; as well as wedding and party dresses, including an Ava silk halter $215; and a silk taffeta tuxedo dress with embroidered eyelet trim, $1,450 to $2000, depending on the length. Novelty lounge pieces have also been selling well, including boxers and pull-on pajama pants. Dress Barn and its sister division Maurices both reported making plan Friday and Saturday. “We got a lot of action on dressy merchandise, and had strong selling in new spring receipts. We are confident for December,” said Keith Fulsher, Dress Barn’s senior vice president and general merchandise manager. “Inventories are clean,” with denim, hoodies and sweaters showing the strongest sales, said Lisa Rhodes, executive vice president and general merchandise manager for Maurice’s. Gap Inc., which has been struggling all year, had a ray of hope. “There’s a sense that there was a steady stream of traffic and everyone was pleased,” said Robin Carr, director of media relations. “Traffic in Banana Republic and Gap stores was up from last year. ” Shearling coats, crocodile handbags and jewelry sold well at Louis Boston on Friday and Saturday. “The usual suspects for women who have generous husbands,” quipped Louis Boston owner Debi Greenberg. In Wellesley, Mass., GrettaLuxe had a big denim day Friday, seeing as many out-of-towners as regular clients. J Brand denim and cord sold well, as did True Religion. Black denim in tapered but not superskinny fit sold well. Sales Friday and Saturday were up about 15 percent from last year at Jake, an upscale men’s and women’s boutique with locations along Southport Avenue and Rush Street in Chicago, owner Lance Lawson said. Shoppers gravitated to Jake’s private label cashmere dresses and tunics for $285 and party dresses, most notably short shiftdresses from Thread Social and various styles PHOTOS BY MICAH BAIRD; ZACK SECKLER; KEITH SMITH AND PHILIP SHONE The Atlanta shopping scene. from 3.1 Phillip Lim, Lawson said. Denim sales, in contrast, have slowed to almost a trickle, except for Cheap Monday black tight jeans, $65. Tom Ford sunglasses, $300, continue to be a popular gift item as well, Lawson added. The 50-degree plus temperatures over the weekend helped Scoop NYC in Chicago score high numbers. The above-normal temperatures put shoppers in a good mood, said store manager Suzanne Workman. When two women wanted the same wool Thread for Scoop jumper one bought the dress in a larger size so she could take it home Friday. Other top sellers included quilted leather Scoop ballet flats for $165 and loungewear from Free City at $148 and sweaters from Marc by Marc Jacobs starting at $175, Workman said. DEPARTMENT STORES ENCOURAGED, NOT ECSTATIC “It leaves one optimistic, but it’s a long season,” said Robert Mettler, chairman and ceo of Macy’s West, whose stores opened at 6 a.m. on Friday to hordes eager to take advantage of storewide doorbusters. The key to the season, according to Mettler, is “ensuring every week there’s new and interesting products, so the customer is enticed.” “Out of the gate, we feel the traffic is a little stronger than last year,” said Lori Randolph, vice president and general manager of the Macy’s Union Square flagship in San Francisco, adding that the line there comprised roughly 200 people. Bestsellers in women’s apparel at the flagship included cashmere sweaters and velour separates from Macy’s private label, Charter Club, as well as flared and skinny jeans from Citizens of Humanity and Seven for All Mankind. “The company is definitely feeling encouraged by the resurgence in the home division,” said Randolph. “We had a very busy Friday morning in the Cellar…and gift cards sold well. Every year more and more people are purchasing them.” Traffic at Macy’s on State Street seemed comparable if not slightly higher than last year when it carried the Marshall Field’s moniker, and crowds still gathered outside elbow-to-elbow often six people deep to see the store’s popular holiday window displays, said Jennifer McNamara, public relations manager for Macy’s North. Shoppers took advantage of Macy’s Friday 6 a.m. until noon special promotions, such as a Sebring 5-piece luggage set for $49.99, and a one-carat diamond circle pendant for $99.99. Otherwise, cashmere sweaters at a variety of price points, outerwear and handbags were best-selling categories Friday and Saturday, according to the store. In particular, women bought leather jackets, jackets with faux fur trim and puff jackets as well as handbags from Coach, Kate Spade and Dooney & Bourke, she said. At Belk Inc., “overall we were pleased with the day,” said Steve Pernotto, executive vice president. “Key classifications were sweaters and knits, denim, cosmetics and personal electronic entertainment items. Consumers in the stores were upbeat and having fun.” — With contributions from Georgia Lee, Rusty Williamson, Beth Wilson, Emili Vesilind, Kristi Ellis, and Kate Bowers Crowds, Confusion, Discounts Aplenty At Garden State Plaza PARAMUS, N.J. — Thousands of eager shoppers lined up at 5 a.m. on Friday outside Macy’s and J.C. Penney at Westfield Garden State Plaza here, only to learn the stores wouldn’t be opening for another two hours. Both department stores advertised 5 a.m. starts in national television commercials and in newspapers, but local ordinances prohibit stores from opening before 7 a.m. “It happens every year,” Lisa Herrmann, marketing director of the mall, said of the confusion. But the mall was ready. Anticipating the predawn throngs, the shopping center had magicians on hand to perform and the buff New Jersey Calendar Cops, who call themselves the fittest and the finest, were leading warmup exercises outside Macy’s. There were complimentary massage chairs and makeovers, as well as free coffee and muffins. By 7 a.m., when the shopping center officially opened, 10,000 parking spaces were filled, Herrmann said. The mall, which has 2 million square feet of retail space, was expecting over 100,000 shoppers. Cars were lined up outside Joe’s American Bar and Grill, waiting for valet parking, which cost $5. “We start at 12 and not a minute sooner,” the valet manager barked at a shopper at 11:57. She rolled her eyes and drove away. “This is the first time I’m shopping on Black Friday,” said Liliana Neto, who, along with her husband Wilson, was weighed down with bags from Gap Kids. “There are good discounts. I didn’t do any Christmas shopping, though. We always leave that for the last minute.” Teens were out in force, walking in and out of stores in groups and carrying shopping bags from Hollister, Abercrombie & Fitch and Limited Too. “It’s a little cheaper today,” said Jasmine Choi. Her friend, Christina Hwang, added, “We still have a long way to go. We’re going to Abercrombie and Victoria’s Secret. We’ll probably be spending more this year. We have more people to give gifts to.” Outside Hollister, teenage girls and boys sat on the steps, evidence of their shopping strewn at their feet. “It’s much busier than normal today,” said Kerri MacKay, a Hollister employee. “We opened at 7 a.m. and there were a ton of people waiting to get in. Fleece sweatpants and sweatshirts are selling really fast. We’ve been reaching all our goals on items. Nothing’s sold out because we have a big stock. We were ready for a lot of people.” Coach also had a crowd waiting at 7 when the doors opened. “People are buying gifts across the board,” said a salesman. “They’re buying little gifts and major purchases. We were busy from the minute we opened. Last year, the traffic trickled up.” A promotion at Charlotte Russe — 25 percent off everything that could be stuffed into the store’s shopping bag — drew a big crowd. The checkout line was about 40 people deep throughout the day, said an employee. Nashira Montesino, a high school senior, said, “I saw the huge line and figured it had to be something good. I’m shopping for myself today. Next I’m going to go to Forever 21, Guess and H&M. I’ll be spending more than last year.” Denise Dorso had much to be happy about, including a parking space and a pair of Anne Klein boots for $73 at Macy’s. “I’m supposed to be shopping for everyone else, but the deals were so good,” she said. “You get really good offers between 7 a.m. and noon.” Standing outside Sephora with her husband, Walter, Dolores Steffen looked shell-shocked. “I can’t take much more of the noise,” she said. “Most of the population is below our age. Normally I wouldn’t go out on a day like today, but we’re with our grandchildren. I like shopping and getting good values, but I can go any time I like. I’m inclined to give more gift cards and money this year.” A customer sitting on a bench at Nordstrom and catching her breath said, “I did a little bit of shopping, but I’ll never do this again. It’s way too crazy. People were screaming at each other in the parking lot. I’ll probably do most of my shopping online.” — Sharon Edelson 8 WWD, MONDAY, NOVEMBER 27, 2006 WWD.COM Innerwear Report Global Flair Tops Trade Show Talk INTIMATE NOTES NATORI FETES ORCHESTRA: More than 50 guests, including executives of the fashion and retailing industries, recently enjoyed Champagne and chamber music at a cocktail party for the Orchestra of St. Luke’s at the home of Kenneth and Josie Natori. The event was co-hosted by Georgia Frasch and Josie Natori, both of whom are on the board of St. Luke’s, and attendees included Vera Wang; Pamela Fiori; Adrienne Vittadini; Stephen Dweck; Jamee Gregory; Ron Frasch, chief merchant at Saks Fifth Avenue, and Marianne Lockwood, executive director and founder of the orchestra. Josie Natori and Vera Wang Ron and Georgia Frasch Kenneth Natori Jr., Kenneth Natori and Anika Proskurowski. rie trade session is to be launched at the end of March in Hong Kong. The decision to create a second fair in Asia was based on improving the calendar needs of manufacturers and distributors to ensure the quality of supply chain issues, timely deliveries and on-trend merchandise, she said. As for the upcoming SIL edition in Paris, Hebert said it will have a “new visual identity,” encompassing 580 international brands. New segments will include cosmetics, candles and bath and body products; maternity items, and expanded forums for men’s underwear and plus sizes. There also will be retail seminars and the Feb. 2 to 4 Interfilière section will conduct conferences on eco-friendly fibers, as well as directional trend presentations, including Antiquité a Gogo, Bubbles & Bling and Ultra Nature. Supermodel Eva Herzegovina will head a panel of jurists who will select the winners. The Lyon, Mode City edition in 2007 is slated for Sept. 1 to 3. In addition to an expanded men’s innerwear area, there will be a focus on a new category: Sport Active, which will include sporting equipment. Addressing the absence of several key French lingerie brands such as Chantelle and Aubade at this year’s Lyon fair in September, Hebert said, “Lyon, Mode City has existed for 20 years, and we pull in 19,000 visitors, 60 percent of whom are international. We were forced to scrutinize our show and survey customers. Fifty percent said the Lyon dates were not appropriate, while 50 percent said no clear solution could be found. “We decided to keep the [Lyon] dates because it attracts the international lingerie and swimwear industries, and it brings an opportunity to start a new season. There’s back-to-school for the boutiques, and what’s really wonderful is the prêt-à-porter Silvia Harven, shows in Paris following Lyon. That pleases a numcreative director of ber of people.” Abercrombie & Fitch. Addressing key trends at the Lyon show, Harven of Abercrombie & Fitch presented a slide show of looks she found to be directional, including French Impressionist-inspired corsetry with soft, romantic colors from Renoir or Van Gogh; antique porcelain doll hues; Empire lines, and reembroidered laces. There also was a new direction in creating texture in a fabric through bows, rib patterns, trims and novelty embroideries, she said. Harven noted that “structured elegance” and a “huge return” to Santoni seamless styles were gaining importance, as well as a trend she described as “eternal youth” in shades that ranged from “pop art to soda pop,” like Sprite, bubble gum, carnation and sun. A lot of these lingerie styles are taking their cue from swimwear, she said. Finally, Harven singled out exotic macro trends that lend a sense of escapism to classic lingerie, such as crochets from Brazil, lattice and scroll effects, delicate filigree embroideries and ready-to-wear-inspired color blocking. Among the music performed were Kreisler’s “Tambourin Chinois,” “The Swan” from “Carnival of the Animals” by Saint-Saens and Haydn’s “Piano Trio in G Major, also known as “Gypsy Trio.” The St. Luke’s musicians were pianist Elizabeth DiFelice, cellist Daire FitzGerald and violinist Naoko Tanaka. The buzz at the party was how difficult it was to get a ticket to Paul McCartney’s oratorio “Ecce Cor Meum” (“Behold My Heart”), which was performed at Carnegie Hall Nov. 14. McCartney’s work, written in the style of traditional English choral music, was composed in memory of his first wife, Linda. But getting into the papparazzi-filled event was a breeze for the Orchestra of St. Luke’s, since it performed at the soldout event. NO NONSENSE BRAS: Kayser-Roth has signed a licensing agreement with Ariela Alpha International to design, merchandise, produce, market and distribute the first line of bras bearing the No nonsense label for spring 2007. The move into the bra market is a building block of the No nonsense franchise, which, in addition to hosiery, has expanded over the past several years to include casual legwear, socks, underwear, sleepwear and slippers. Julia Townsend, executive vice president and general manager of Kayser-Roth, said, “We think that through our partnership with AAI, No nonsense can bring innovation, style and a modern sensibility to the bra category.” Ariela Balk, president and chief executive officer of AAI, said, “No nonsense is all about solutions for women and that is a perfect platform for a successful bra line.” Bra cup sizes will start at 32C and go to 40D. Suggested retail will be around $20 for all bra styles, said Balk. “It will be a hanging program with upscale hangtags and will be very solution-driven,” she said. “The hangtags will describe what each bra does and the problem it solves.” Balk said distribution is aimed at promotional department stores, as well as mass merchants and food and drug store chains. First-year wholesale sales are projected at $25 million, said Balk. AAI also does private label programs for major retailers, including Wal-Mart, J.C. Penney and Sears, and manufactures bras and daywear under license bearing the Fruit of the Loom and l.e.i names. PAJAMA PARTY: The Pajama Program, an organization that delivers warm sleepwear and books to children in need, will open its first Pajama Program Reading Center in Manhattan on Dec. 5. Created in 2001 with 12 pairs of pajamas by founder and executive director Genevieve Piturro, the organization will be donating almost 75,000 pairs of pajamas to children by year’s Pajama Program artists from left: Nikki Silananda, merchandising assistant at Richard Leeds International; Terri Jasen, Pajama Program’s national program director; Drew Gold, a freelance artist; Marcia Leeds, chairman of the Leeds company; Ronald Callahan, creative artist at the Leeds company; Genevieve Piturro, founder and executive director of the Pajama Program, and Karin Gold, art director at the Leeds company. end. The majority of the children, ranging from infants to teenagers, as well as teen moms, live in group homes because they are either abandoned or have no family. When it came to decorating the new reading room at 34 East 39th Street, artists from sleepwear company Richard Leeds International dropped by and painted a mural of characters ranging from Cinderella to Big Bird. “We’ll have 10 to 15 kids at our ribbon-cutting,” said Piturro, noting that Scholastic, St. Martin’s Press, and Lee and Low Books Inc. had contributed “hundreds of new books.” In addition to the Leeds firm, companies that have donated pajamas include Lollytogs, St. Eve International, Ganis Bros., Delta Galil USA, Greggy Girl, Salta International, Stargate/ Baby Buns, Skivvy Doodles/My Boy Sam and Wundies. Recalling how she started the organization, Piturro said she was appalled by the number of underprivileged children who had to sleep in their street clothes. “I went to a place where they were sheltering abused children in Spanish Harlem,” she said. “Just about every time I went to volunteer, I was so saddened by the conditions these kids went to sleep in. It was so opposite to the experience I had, a warm, loving home where I was tucked in at night and read a bedtime story.” ST. LUKE’S PHOTOS BY JIMI CELESTE; PAJAMA PROGRAM BY TALAYA CENTENO T he prospect of gleaning information about the international trade show circuit drew 130 innerwear executives to a seminar on fabric and intimate trends from the Lyon, Mode City fair. However, the event, staged Nov. 9 by The Underfashion Club Inc. at the Park Avenue Country Club restaurant in Manhattan, did not focus exclusively on the Lyon edition. A brief overview also was given of the Shanghai, Mode Lingerie sourcing, fabrics and intimates fair, as well as a snapshot of what to expect at the Salon International de la Lingerie in Paris from Feb. 2 to 5. The speakers were Anne-Manuele Hebert, international department manager for French trade show giant Eurovet, and Silvia Harven, creative director of Abercrombie & Fitch. Harven’s background is primarily in the intimate apparel field, where she most recently served as vice president of new business at Vanity Fair Intimates. “My purpose is to update everybody here with the latest news,” Hebert said. The big news was in regards to the Interfilière textiles fair, which traditionally is staged in conjunction with the Lyon fair in September and the Paris show in February. But this time, Eurovet has decided to introduce a one-day Interfilière preview in Paris on June 26 intended to give exhibitors a jump-start on trends before Lyon kicks off. It will be staged at the Palais des Congrès/Porte Maillot. Meanwhile, Hebert noted that the second edition of the Shanghai show was a success, with Gillian Kirby, U.S. agent for Eurovet, 4,123 visitors. Fifty-four percent came to source and Anne-Manuele Hebert, Eurovet’s fabrics, 34 percent were scouting for brands to disinternational department manager. tribute and 12 percent were on the hunt for new production partners. Visitors from the international marketplace included Triumph, Toyoba, Toray and Wacoal from Japan; Etam, Huit, Empreinte, Lejaby and Lise Charmel of France; Schiesser and Naturana from Germany; Delta Galil and Lee Copper of Israel; Wild Orchid of Russia, and several big names from the U.S. — Fruit of the Loom, VF Intimates, Dow, Saramax and Victoria’s Secret. The Chinese contingent included a melting pot of international companies, among them Hanesbrands, Maidenform, Mast, Esprit and Adidas. “China and its consumers represent an annual 2 billion euro [approximately $2.6 billion at current exchange] business for lingerie, and the demand and consumption is growing by 15 to 20 percent in certain areas,” Hebert said. As a result of the positive reaction, Hebert said a bigger, more prestigious Shanghai, Mode Lingerie venue is planned for next October and an additional linge- PHOTOS BY STEVE EICHNER By Karyn Monget WWD, MONDAY, NOVEMBER 27, 2006 9 WWD.COM Accessories Report Mulberry Blooms With Stateside Stores Retail Jewels for Buccellati By Sophia Chabbott NEW YORK — Mulberry has branched out, opening its first U.S. boutique in Manhattan, and more are on the way. The British luxury leather goods firm, with a track record of producing musthave bags and for accessorizing style icons like Kate Moss, Sienna Miller and Scarlett Johansson, has opened at 387 Bleecker Street. More stores are expected to follow next month, including a flagship at 605 Madison Avenue, and units in the Americana mall in Manhasset, N.Y., and on Melrose Place in Los Angeles. A fifth location, at the Pier Shops at Caesars in Atlantic City, is expected in February. “Over the 35 years that we have been The interior of the Bleecker in business, this has been a very U.K.-foStreet Mulberry store. cused brand, and now we are opening it up internationally,” said Lisa Montague, chief executive officer. “The U.S. represents a huge opportunity within that international expansion because the demand for luxury goods here is significant. If we get it right and appeal to our consumer base, it could give us a fantastic opportunity to increase our business overall.” Mulberry, which was founded in England in 1971 by accessories buyer Roger Saul, has had an extensive rebranding effort under way since 2000. That’s when Singapore fashion and hotel entrepreneurs Christina Ong and husband Ong Beng Seng invested $14.5 million in the company. In 2002, Saul sold his stake in the firm. Two years later, Mulberry hired design director Stuart Vevers, who worked closely with Mark Jacobs when Vevers was a design consultant for LVMH Moët Hennessy Louis Vuitton. Also during that time, Mulberry began its retail rollout, adding five new stores in the U.K. to its 10 boutiques in cities such as London and Paris, and in the Netherlands. Here and above: Retail expansion into Hong Kong, Japan and northern Mulberry’s spring European countries followed. In the last 12 months, handbags. Mulberry has opened five standalone stores, including locations in Terminal 4 at London’s Heathrow airport and in Edinburgh, as well as in Norway, Thailand and Taiwan, bringing Mulberry’s total number of doors to 24 worldwide. Mulberry began targeting U.S. business two years A Mulberry ago through wholesale distribution. It launched its first key ring. collection of bags here in Bergdorf Goodman, and also distributed its assortment in Barneys New York, Neiman Marcus, Saks Fifth Avenue and Nordstrom. At the time, Montague told WWD that she estimated first-year sales here at $1 million, but had hopes to boost that to $50 million in the next five years. Montague declined to give updated sales projections, but said she would like to see the U.S. market generate 30 percent of Mulberry’s business in the future, and business from Europe and Asia split the other two-thirds. Mulberry now generates 90 percent of its business in the U.K. and northern Europe. “We wanted to test the U.S. market through wholesale before opening up retail locations here because it is such an important market,” Montague said. “Fortunately, we had great success and it’s given us the confidence to move ahead. I think it will be a great balance to have our department and retail store business here. The customer wants a personal relationship with the brand, which is difficult to achieve in a department store. It will also give us the opportunity to offer the whole brand experience, which may include bringing our apparel to the States.” Montague said the new stores adhere to an interior design concept modeled on Mulberry’s Bond Street location in London, but each space is created to have its own character and merchandised with a mix suited to its environment. “The Bleecker Street store is very much targeted to a cool downtown girl — it’s very Kate Moss,” she said. “But with Madison Avenue, we need to consider different customer groups. All the stores will still have the Mulberry brand aesthetic, but we recognize that there are unique needs in different markets.” The Bleecker Street space, which Montague calls a jewel-box location at 530 square feet, is retailing women’s and men’s merchandise, including handbags, luggage, small leather goods, gloves, scarves and items like notebooks and organizers. Prices range between $59 and $2,995, and bespoke items top out at $9,000. The new Madison Avenue store is expected to be 3,000 square feet. To celebrate both New York openings, Mulberry is throwing a party on Wednesday at 5 Ninth in the Meatpacking District. Buccellati’s low profile is about to rise a bit. The 300-year-old, family-owned Buccellati fine jewelry brand is to open watches. two boutiques, in Aspen, Colo., and in London, in time for the holidays, and renovated stores in New York and Beverly Hills are to be launched next week. Despite the growth, the brand is intent on limiting distribution. “Buccellati isn’t for everybody,” company president Andrea Buccellati said during an interview at the company’s temporary Manhattan boutique in the St. Regis Hotel. “Our clients are looking for luxury and exclusivity. They want to be part of an inner circle. We’re looking to make the Buccellati experience more tailor-made.” The stores will reflect the firm’s ornate Italian Renaissance aesthetic, with modern touches such as improved lighting and contemporary materials like lacquer. The company also wants the new boutiques to be a destination for social events, arts and entertainment, particularly at the 900-squarefoot Aspen store. Buccellati, which became a brand in 1919 under the leadership of Andrea Buccellati’s grandfather, is known for its engraved brushed gold and platinum jewelry embedded with fine stones, including rubies, emeralds, diamonds and sapphires, designed by the firm’s president and his father. Only 3,000 to 4,000 pieces of jewelry are made in Milan each year Andrea and prices range from $1,000 to well Buccellati into the millions for custom pieces the firm creates for its best clients. In 2000, the firm launched its first watch collection — average price $15,000 — and began a U.S. wholesale operation that now includes distribution in 25 doors such as Bergdorf Goodman, Wynn Hotel in Las Vegas and Neiman Marcus stores in Dallas, Chicago and Miami. Sterling silver hollowware accounts for 30 percent of the business, with its candlesticks and compotes in addition to objet d’art, which are sold in 100 doors. The firm is not planning to increase its wholesale network, but it might open a store in Palm Beach, Fla. “It’s not about a big flashy store — we don’t want that,” Buccellati said. “We want to be able to have a direct connection [with the consumer]. We can sketch pieces together for a customer, or a customer can bring in a stone and we can set it in the Buccellati way.” Andy Frankl, president and chief executive officer of IBEX Construction, which worked on the Manhattan flagship on East 57th Street, said, “It’s a refreshment of their space,” adding that an elaborate wood ceiling will be restored, and the exterior will get a new enamel face and hand-rubbed bronze finOne of the ish harking back to the compabrand’s ny’s Milanese pedigree. signature In addition, the firm is reincollars. venting and sourcing vintage pieces its customers have requested. The sale of an estate gold, diamond and ruby bracelet by the firm at a recent Christie’s jewelry auction in New York caused a bidding war. PORTS 1961 PHOTO BY THOMAS IANNACCONE; ANISTON AND ROMIJN BY KEVIN MAZUR/WIREIMAGE FINDINGS Ports 1961 Jetset Kit. PACK RAT: Ports 1961 creative director Tia Cibani wants her clients to travel well. So, starting this month, for $4,500, consumers can get a carry-on bag filled with all of Cibani’s favorite travel items. Inside the canvas and leather bag is a leather journal, candle, brown alpaca scarf, eye mask and knit teddy bear. “I feel like I was born with the travel bug,” Cibani said. “I love the entire experience of traveling, from the downtime on long flights to the interesting people I see and meet at airports. The most thrilling part is embarking on a trip to a place I’ve never been before. It always gives me butterflies.” The Jetset Kit will be available on Ports’ Web site, and 5 percent of all sales from Dec. 1 to Jan. 1 will go to Free Arts NYC, a nonprofit organization dedicated to bringing the healing powers of the arts into the lives of abused, neglected and at-risk children and their families. PORTRAIT BY KYLE ERICKSEN PHOTO BY JOHN AQUINO By Jennifer Hirshlag GOING PLATINUM: Swiss luxury watchmaker Vacheron Constantin launched its platinum collection in the U.S. this month with a small cocktail party in Los Angeles hosted by Jennifer Aniston, Courtney Cox, David Arquette, Catherine Keener and entertainment mogul Bernie Brillstein. “Platinum is elite, rare and difficult to work with, so we thought Hollywood was the ideal place to launch this product,” said Vacheron president Julien Tornare. The company produced fewer than 1,000 platinum timepieces to be sold in watch stores such as Tourneau worldwide, at retail prices from $26,000 to $500,000. The Hollywood elite have become the target audience of choice for lavish American launches such as Chanel’s Les Perles collection, but not without a cause: Vacheron’s event benefited the Epidermolysis Bullosa Medical Research Foundation, seeking to cure the rare skin disorder that affects children. Jennifer Aniston and Rebecca Romijn 10 WWD, MONDAY, NOVEMBER 27, 2006 Weekly Stocks Financial Accessories, Intimates: Future of A&F? By Jeanine Poggi F or its next act, Abercrombie & Fitch will likely stick to what it knows best — the teen and contemporary market, according to analysts and financial sources. While the company has been tight-lipped about what’s in store for its next concept, analysts are betting that it will be the launch of an accessories or intimates brand. “I have heard [speculation] that Abercrombie & Fitch has hired away some talent from Victoria’s Secret,” said Kimberly Greenberger, specialty retail analyst at Citigroup. The apparel retailer has already done well with intimates and dormwear at Abercrombie & Fitch stores, especially around the holidays. With competing teen retailer American Eagle profiting from its new intimates subbrand aerie, and the possibility of the company extending the line into its own concept, Abercrombie might be looking to get a piece of the action. “While there is already a market share in this division, with Victoria’s Secret Pink and American Eagle’s aerie, it is a repeat customer who is always buying underwear,” said Christine Chen, senior research analyst at Pacific Growth Equities. Abercrombie & Fitch’s intimate brand would likely be less feminine than aerie and Pink, especially since chairman and chief executive officer Michael Jeffries is very protective of the masculine heritage of the brand, Greenberger said. Abercrombie has had extremely successful launches in the past, most prominently with the teen line Hollister. But Wall Street is becoming more speculative about the ability of retailers to penetrate the intimate apparel business. “I’ve seen many great retailers have mediocre success in breaking into the bra business. It is the most difficult new concept to launch with the lowest success rate,” Greenberger said. “But I’d be more than willing to bet on [Abercrombie to succeed].” Although it seems an intimates concept is likely, in a third-quarter conference call to Wall Street the company said there’s money to be made in accessories. “The accessory business offers us a huge potential — huge, huge, huge. And I’m just a jerk that I’ve not been able to build more volume in the past, but I’m really on O scar de la Renta filed a trademark infringement lawsuit against Richard Ginori 1735 S.P.A. and Richard Ginori 1735 Inc. According to court documents, Oscar de la Renta alleged that Richard Ginori continued to sell Oscar by Oscar de la Renta branded items after a licensing agreement with the company was terminated. Ginori previously had a licensing agreement to produce dinnerware, glassware, flatware and giftware for the luxury design company. The lawsuit also included claims for breach of contract and federal and state unfair competition. Oscar de la Renta asked for preliminary and permanent injunctions against Ginori. The complaint asked for approximately $5.1 million in damages. Ginori could not be reached for comment. LeSportsac Inc. and Brand Science filed a lawsuit for alleged trademark infringement and counterfeiting against Dali International Trading Inc. in Manhattan federal court. According to court documents, LeSportsac alleged that Dali sold bags that were confusingly similar to its Ellipse and Repeating Ellipse designs. The company also alleged that Dali used other design patterns, for which it holds trademarks. LeSportsac asked the court for preliminary and permanent injunctions against the defendant and for unspecified damages. Dali International Trading could not be reached for comment by press time. Paul Gottlieb & Co. sued Peep and Hot Topic for alleged copyright infringement in Manhattan federal court. According to court documents, Peep manufactured a fabric that infringed on Paul Gottlieb’s cupcake fabric design and made apparel, which it sold to Hot Topic. The lawsuit also WWDComposite Index Composite 1014.81 7 that track now,” Jeffries said. The company sells leather products at all of its divisions, but has extended its offerings of handbags at the retailer’s Ruehl store, which targets the 30-yearold shopper. So while it’s hazy what exactly the new concept will be, one thing is clear: The company will not tread into Baby Boomer territory. “I have to say I don’t think it’s in our DNA to really do business with mature people,” said Jeffries on the call. “We also know that given the company’s history with advocacy groups and the raciness of the current brand, a baby concept seems unlikely,” said Thomas Filandro, retail analyst at Susquehanna Financial Group, in a research note. Abercrombie & Fitch has been investing more money into its next concept this year than they have in the past, causing analysts to believe an announcement of their plans may come sometime in 2007, with store rollout not until late 2008. Investing on the new, unnamed concept was included in recent capital expenditures of $50 million, the company said on the call. alleges unfair competition. Paul Gottlieb asked for a preliminary injunction and for statutory and punitive damages of at least $750,000 plus the cost of the lawsuit. Peep did not return calls seeking comment. Chris Kearns, an attorney with Hot Topic, said that Peep indicated there was no copyright violation and had engaged in talks with Paul Gottlieb to resolve any issues. A judge in a Los Angeles federal court dismissed a lawsuit filed by Oakley Inc. against Cartier International B.V. in favor of a case filed in the Southern District of New York by Cartier against Oakley. The dispute arose over Cartier’s belief that Oakley’s Time Tank watch infringed on its own Tank trademark for watches and jewelr y. According to court documents, Oakley filed an action for declaratory judgment of non-infringement in Los Angeles in July. Cartier filed its trademark infringement action in Manhattan in August. Cartier International B.V. won a permanent injunction against Geneva Quartz Watch Manufactory Inc., Geneva Quartz Inc., Royal Watch and other named defendants for alleged infringement of its Tank Francaise trademark. According to court documents, the parties reached a settlement agreement and both parties will pay their own litigation costs for the action. Phillips-Van Heusen filed a breach of contract lawsuit against P.Y.A. Importer Ltd. for allegedly failing to honor the financial terms of a licensing agreement. PVH asked the court to award it close to $1 million, plus other damages deemed appropriate, according to court documents. P.Y.A. did not return calls for comment. — Liza Casabona Weekly % Changes Ending Nov. 24 Gainers J. Crew Brown Shoe Tag-It Payless Shoes Claire’s Stores Close Change 43.28 30.36 46.46 17.06 1.29 14.16 31.81 13.32 32.87 11.35 Decliners Close Change Blue 1.91 -10.75 House of Taylor 2.38 -10.70 Crocs 42.45 -8.69 Coldwater Creek 28.06 -7.24 Maidenform 19.26 -6.50 COMPILED BY DATA NETWORK, HUNTINGTON, N.Y., 631-549-1014. NOTE: INFORMATION AND DATA, THOUGH BELIEVED ACCURATE, IS NOT GUARANTEED. DATA NETWORK SHALL NOT BE LIABLE FOR ANY INACCURACIES. 52-WEEK HIGH LOW 79.42 49.98 27.13 19.41 33.01 21.07 22.25 17.01 3.19 1.88 49.51 19.45 45.15 29.59 10.45 6.17 33.94 26.16 23.03 9.02 26.86 13.05 40.00 21.41 16.50 6.84 7.85 5.70 33.07 25.18 46.44 23.73 6.80 1.62 1.59 0.68 38.60 17.71 47.16 26.37 45.35 31.75 24.72 15.00 35.24 21.08 15.10 5.86 26.70 19.35 44.30 35.80 12.74 7.80 26.29 8.07 29.60 15.28 15.57 9.69 49.63 27.99 45.12 33.65 49.40 17.26 71.81 41.81 31.25 15.00 45.40 34.57 57.85 26.78 36.73 23.88 42.75 25.18 31.26 18.69 67.08 53.41 61.37 42.85 44.99 17.61 57.94 46.00 9.45 6.44 50.25 20.32 6.75 4.24 13.48 9.02 5.25 1.85 32.46 21.34 56.36 20.59 11.55 6.61 20.50 14.60 10.58 5.92 65.13 44.96 36.47 20.36 19.84 12.10 28.09 14.08 37.39 23.50 42.06 20.02 23.50 6.88 24.58 13.63 43.60 32.71 20.63 6.56 30.91 21.57 45.01 31.76 19.29 9.55 26.16 24.55 23.84 15.89 17.70 11.33 42.95 31.12 19.98 9.80 21.39 15.91 56.00 41.92 43.72 25.50 17.89 6.33 55.79 37.06 29.10 23.08 11.08 6.29 65.98 32.94 49.11 19.97 152.00 69.11 24.90 11.76 24.65 17.75 9.97 5.50 25.29 15.80 16.30 9.43 7.50 0.95 35.58 23.54 19.18 9.00 1.41 0.37 21.77 15.10 40.90 24.00 82.49 51.80 9.29 7.15 36.10 27.30 48.12 22.14 34.57 22.83 29.60 21.75 67.67 56.59 46.74 30.30 75.54 42.78 37.81 22.54 13.98 9.51 18.86 11.37 32.60 21.62 21.50 8.66 43.30 33.40 4.89 2.69 31.45 24.17 86.92 66.44 22.84 8.49 41.75 28.75 26.10 15.20 57.65 9.72 27.29 17.60 1.20 0.50 23.54 18.81 28.93 22.80 22.63 9.41 97.04 75.52 9.19 1.53 50.79 31.77 19.03 14.18 8.97 1.50 6.00 3.62 11.55 6.47 57.58 34.34 27.78 13.12 19.24 4.43 22.67 17.00 32.52 20.36 40.48 18.50 51.38 30.55 6.39 3.00 15.49 9.30 77.42 45.65 17.91 7.55 3.00 1.06 15.06 11.60 37.51 25.81 77.19 57.30 18.00 11.60 3.95 0.76 26.70 9.73 31.80 22.12 21.45 14.10 182.38 113.92 29.24 19.25 11.00 5.19 103.54 76.14 31.40 14.26 6.16 3.68 20.37 11.27 4.00 2.83 44.70 17.63 16.21 11.90 13.40 9.95 21.24 14.02 1.38 0.32 31.00 17.30 12.30 9.27 8.32 4.80 39.64 27.33 60.34 44.70 2.20 1.02 49.14 33.82 13.73 7.54 43.80 29.63 37.61 24.80 29.84 21.47 24.36 12.85 44.09 25.75 49.99 21.08 3.76 2.00 40.48 28.65 20.78 9.43 33.61 13.65 78.57 53.25 41.40 18.24 52.15 42.31 28.22 15.75 13.45 10.60 47.55 36.77 25.72 18.76 4.75 2.03 30.20 20.26 31.72 21.01 38.85 18.66 RETAILERS Abercrombie & Fitch Acadia Aeropostale Alberto Culver Alpha Pro Tech American Eagle Outfitters Ann Taylor Ashworth Avon Bakers Bebe Benetton Big Dog Birks & Mayors BJs Blair Blue Bluefly Bon-Ton Brown Shoe Buckle Cache Carter Casual Male Cato CBL CCA Charles & Colvard Charlotte Russe Charming Shoppes Chattem Cherokee Chico’s Children’s Place Christopher & Banks Cintas Citi Trends Claire’s Stores Coach Coldwater Creek Colgate Palmolive Columbia Sportswear Conns Costco Cost U Less Crocs Culp Cutter & Buck Cygne Designs Deb Shops Deckers Outdoor Delia’s Delta Apparel Delta Galil Developers Diversified Dillard’s Dollar General Dress Barn DSW Duckwall-Alco Eddie Bauer Elizabeth Arden Estee Lauder Everlast Worldwide Family Dollar Federated Department Stores Finish Line Forest City Fossil Freds G&K Gaiam Gap General Growth Genesco G-III Apparel Gildan Activewear Glimcher Gottschalks Guess Gymboree Hallwood Hampshire Hanesbrands Hartmarx Helen of Troy Hot Topic House of Taylor Jewelry IAC Interactive Iconix Innovo Inter Parfums J. Crew J.C. Penney Jaclyn Jones Apparel Jos. A Bank Kellwood Kenneth Cole Kimberly Clark Kimco Realty Kohls K-Swiss LaCrosse Footwear Lakeland Inds Limited Brands Liquidity Services Liz Claiborne LJ Intl Luxottica Macerich Maidenform Mens Wearhouse Marcus Mothers Work Movado Movie Star National Retail Properties New Plan Excel Realty New York & Co. Nike Nitches Nordstrom Oakley Oralabs Orange 21 Orchids Paper Oxford Pacific Sunwear Parlux Fragrances Paxar Payless Shoes Perry Ellis Phillips-Van Heusen Phoenix Footwear Playtex Polo Ralph Lauren PriceSmart Quaker Fabric Quiksilver Ramco-Gershenson Regency Centers Retail Ventures Revlon Rocky Brands Ross Stores Saks Sears Shoe Carnival Shoe Pavilion Simon Properties Skechers Sport-Haley Stein Mart Stephan Steve Madden Stride Rite Superior Uniform Syms Tag-It Talbots Tandy Brands Tandy Leather Factory Tanger Factory Outlet Target Tarrant Apparel Taubman Tefron Tiffany & Co. Timberland TJ Maxx True Religion Tween Brands Under Armour Unifi Unifirst United Retail Urban Outfitters V. F. Corp. Volcom Wal-Mart Warnaco Wellco Weingarten Weyco Wilsons Wolverine Zale Zumiez WWD.COM P/E 16.1 45.7 19.3 20.0 20.6 16.9 33.8 31.3 26.0 25.8 47.3 89.3 9.5 19.3 13.7 15.0 347.9 19.6 16.3 32.5 21.3 28.4 15.3 37.3 13.2 25.6 17.8 17.0 22.4 20.8 21.1 25.8 20.9 21.2 29.9 18.5 30.7 47.3 26.8 18.5 13.9 22.9 11.5 32.4 17.6 15.5 22.0 71.1 12.1 39.6 15.3 17.2 17.1 28.0 23.7 17.3 27.5 14.6 22.3 23.4 15.1 31.9 22.9 17.7 20.8 92.6 18.2 263.5 14.1 77.5 27.8 101.7 42.3 27.2 24.5 4.9 11.0 17.9 15.8 37.3 36.5 19.2 26.3 17.1 12.4 21.2 14.8 32.3 18.3 21.8 31.1 24.3 15.2 12.1 13.3 16.6 17.0 19.3 28.3 134.8 18.3 16.0 32.1 29.9 21.1 23.1 30.4 17.9 18.7 308.6 21.0 27.6 21.0 288.3 18.0 18.6 23.9 19.4 22.1 18.0 18.9 10.5 83.1 21.8 56.5 28.6 69.2 43.3 9.8 19.6 28.7 20.8 16.7 30.3 58.7 19.3 17.6 37.6 17.3 19.1 38.8 35.2 26.0 19.2 96.4 19.5 41.8 18.1 21.3 17.9 15.9 15.1 21.6 71.2 17.6 6.9 31.6 15.4 28.1 17.2 23.5 14.2 26.9 14.2 19.6 29.9 46.3 VOLUME (000’S) 59703 10767 46954 92632 1668 73799 120361 840 70159 188 31575 320 130 10 66069 409 1473 2240 4996 17230 1585 4774 11847 12020 5987 14430 833 3093 20519 27333 18301 605 128201 10983 18254 23125 5175 121667 102145 153046 83299 9357 1699 88509 169 129863 347 409 229 349 5790 3217 98 88 23086 38855 184409 15055 9172 147 2321 11794 47992 316 35469 149250 10992 31 7307 19394 2070 5194 239908 83358 15413 981 5809 4231 3506 20439 36741 9 207 17609 2990 3739 27331 2949 174978 7711 3178 1026 62968 61282 53 19446 6606 8242 3228 46077 40004 87946 9631 231 408 79754 8108 12008 4678 2617 20238 9978 25980 2345 25499 2130 1389 14363 21737 14899 34396 542 133373 7010 5409 611 15 2131 52430 23965 4575 83232 7946 40872 362 10958 24859 766 1133 29590 3099 11360 7414 93478 596 30771 104193 84090 3570 329 52158 8705 102 10223 156 10253 4045 91 415 9990 20996 315 1858 7086 106703 3016 20989 1289 29188 13745 116527 7440 14272 21289 4946 1368 9300 88402 14861 5492 369895 11280 5 21468 89 1588 10072 14308 10612 AMT LAST 70.51 26.68 29.83 20.71 2.41 47.54 34.89 7.03 33.28 13.00 22.73 35.70 16.08 7.24 32.40 30.92 1.91 0.94 34.98 46.46 44.91 24.18 28.23 14.10 24.94 42.97 11.70 8.18 29.45 14.33 49.60 43.45 23.54 67.53 21.75 42.41 43.12 32.87 42.78 28.06 65.97 60.55 25.33 53.51 8.44 42.45 5.12 9.78 2.90 25.55 54.41 9.16 18.37 10.24 64.85 35.81 16.30 21.90 33.90 39.86 9.20 18.83 41.82 16.23 28.43 43.11 13.88 25.52 21.58 11.90 39.71 13.89 19.30 52.65 38.69 17.00 54.96 26.60 10.99 63.65 42.82 91.05 16.40 24.45 7.02 24.44 13.05 2.38 35.51 16.13 0.67 20.99 43.28 80.81 9.28 33.73 30.75 30.70 23.96 66.29 46.36 71.05 34.64 12.05 14.00 31.38 19.69 42.63 4.40 30.73 86.72 19.26 38.56 25.56 47.10 25.92 1.17 23.40 28.17 14.17 96.73 6.21 50.00 18.94 5.42 4.68 8.65 51.65 19.48 6.78 22.01 31.81 37.82 49.72 4.21 14.97 77.21 16.77 1.11 14.58 37.31 77.77 17.38 1.67 13.61 29.97 20.33 176.45 26.78 7.69 101.92 29.20 4.04 15.18 3.50 36.18 15.84 13.26 19.10 1.29 25.22 11.99 8.08 39.92 57.71 1.32 49.10 11.00 37.32 32.12 28.20 15.38 41.62 47.60 2.44 39.44 15.31 22.22 76.38 32.52 47.90 25.36 11.50 47.83 24.70 2.42 28.40 30.58 28.04 CHANGE -0.58 1.18 1.34 -0.72 0.07 0.21 -1.68 -0.07 -0.39 -0.14 -0.77 0.06 -0.15 -0.01 2.79 0.67 -0.23 -0.04 1.19 6.77 -0.05 0.14 -0.11 0.60 0.27 1.97 -0.03 -0.06 1.01 0.22 3.20 0.06 -0.91 1.24 -0.71 -1.06 -1.58 3.35 0.74 -2.19 -0.04 1.60 0.90 0.11 0.14 -4.04 -0.16 -0.54 0.05 -0.98 -0.13 -0.44 -0.08 -0.10 2.96 0.01 1.13 0.10 -0.35 -1.30 -0.04 0.40 0.78 -0.55 -0.02 0.54 -0.47 -0.13 -0.63 -0.53 0.02 -0.01 -0.51 4.31 2.15 0.12 0.79 1.00 0.01 1.21 -1.50 2.03 1.41 0.45 -0.23 -0.49 0.31 -0.28 1.67 0.13 -0.02 -0.01 10.08 0.71 0.17 -0.02 -0.39 0.58 0.20 -0.23 2.21 -2.22 -1.10 -0.59 -0.55 0.58 0.55 0.08 0.10 -0.64 5.92 -1.34 0.08 0.11 0.25 -0.17 0.04 0.61 0.86 -0.03 1.15 -0.18 1.92 0.54 0.24 0.11 0.00 -0.35 0.56 0.40 -0.07 3.74 0.66 2.48 0.26 0.17 0.95 -0.75 -0.04 0.32 0.94 5.32 0.36 0.08 -0.20 -0.44 0.12 3.47 -1.64 0.11 6.47 0.15 0.01 -0.40 0.13 -1.02 -0.13 -0.03 0.07 0.16 0.04 0.19 0.33 1.90 -0.51 0.02 3.00 0.15 0.78 0.19 -1.04 -0.02 -0.16 1.05 -0.01 -0.51 -0.92 -0.17 -0.99 -0.12 0.40 0.05 -0.10 2.65 -0.47 -0.07 0.48 0.59 -0.06 WWD, MONDAY, NOVEMBER 27, 2006 11 WWD.COM Fashion Scoops ALL EYES ON PARIS: Miuccia Prada’s affinity for Paris isn’t restricted to Miu Miu’s women’s collection. The designer has dropped the fall runway show for Miu Miu’s men’s line during Milan Fashion Week in January in favor of a showroom presentation. A spokesman confirmed a small portion of the clothes would then be included in the brand’s women’s show, which will be held in Paris in March. MOSS MAKE-UP: Her clothing line with Topshop may not hit stores until April, but according to press reports in Britain, Kate Moss is already thinking about branching out into beauty. London’s Daily Mirror reported Friday that Moss plans to launch a cosmetics and skin care line, adding that she is in talks with several cosmetics companies. Her spokesman told WWD the reports were “incorrect,” but he did not rule out the prospect of a beauty line after Moss’ modeling contract with Rimmel expires in about a year. Moss has been signed to Rimmel since 2001, and the brand was one of the few companies to continue its contract with the model when news of her allegedly taking cocaine broke last year. Two views of Paul Smith’s new Paris store. Paul Smith’s Touch of Whimsy in Paris By Robert Murphy PARIS — Anyone who has followed Sir Paul Smith’s recent retail openings — including a furniture and curiosity shop on London’s Albemarle Street — knows the British designer isn’t one for cookie-cutter rollouts. His newest shop here, at 3 Rue Faubourg SaintHonoré, underscores his idiosyncratic approach, offering ceramic figurines and vintage toys alongside his own men’s and women’s designs. The 3,000-square-foot, two-level shop is Smith’s first on Paris’ Right Bank (he opened on the Left Bank years ago), and is in close quarters with Gucci, Hermès, Chanel and Lanvin stores. In that luxury environment, his space looks more whimsical than the competition. “It is [my] first shop in an obviously fashion street for fashion brands,” Smith said. “The location is fantastic,” the designer continued, adding that he was attracted by the series of rooms (eight in total) that the space afforded. “It suits my idea of individuality, allowing me to design each space with its own character.” On the ground floor, for instance, shoppers find glass cases brimming with curios (all for sale) and Smith-designed accessories. A sweeping staircase to the second level is hung with scores of pictures and photographs, from kitsch views of Paris to a photo of an English aristocrat asleep on his sofa. “My passion is individuality,” Smith said. “I strive to make each of my stores special. I hate the idea of ‘the corporate rollout,’ where all of the shops look more or less the same, destroying important streets around the world, making them look all the same and losing the character of the city.” Underscoring the building’s 19th-century Haussmannian provenance, Smith said he opted to return the facade to its original state. “After that, the idea was to add my ideas to each room. For instance, one room is very feminine with a boudoir feeling, another is covered in English coins, creating a masculine mood,” he said. MACDONALD’S MOMENT: Julien Macdonald, known for his opulent furs and glittery spiderweb knits, was in his element when he collected his Order of the British Empire honor, which was presented by Queen Elizabeth II at Buckingham Palace last Thursday. “I felt like I was walking into a medieval film,” said Macdonald, who added the Queen was keen to talk fashion, and even asked him about his time at Givenchy. “She said she loved Hubert de Givenchy’s work, especially [Audrey Hepburn’s] dress in ‘Breakfast at Tiffany’s,’” said Macdonald. Later, the Welsh designer Macdonald rounded off his very British experience by taking a cruise along the Thames with his parents and sister. “I wore my medal all day,” he added. FAMILY TIES: While known primarily for his cocktail dresses, Alber Elbaz also knows his way around a jacket — even the kind for books. The Lanvin designer was tapped to illustrate the cover of the 2007 “Bottin Mondain,” a guide to aristocratic families and hip socialites in France. More than 44,000 families are listed, including the cell phone numbers and e-mail addresses of some of the youngsters. Elbaz sketched one big happy family of cheerful faces, portraying the trendy image the century-old guide wants to convey. CHEAP BUT CHIC: Now that fast-fashion chains are tapping big-name designers, why not star architects as well? French architect Jean Nouvel, whose works include the Cartier Foundation and Paris’ new primitive art museum at the Quai Branly, is among the contenders to design H&M’s new Champs-Elysées store, which is slated to open in 2008. GALLIC GALLANT: Ralph Rucci just can’t get enough of Paris. Having first entered couture in 2002 as a guest member of the Chambre Syndicale, the New York designer has revealed he’ll be back in the City of Light come January. He plans to present both his spring couture and fall-winter ready-to-wear collections, his first tandem presentation in France. Rucci noted he’ll still show his rtw collection during New York Fashion Week. “I’ll be showing in my studio with an old-world approach; very quietly with no music,” he said. “It’s about experimenting.” Although the men’s collection — the bulk of Smith’s business — is highlighted in two rooms, the women’s is housed in a single, pale pink room with a corniced ceiling. Smith’s shop is the latest addition to the street, which has seen a raft of openings. Dolce & Gabbana launched a men’s store, located next to Smith’s, this year, and Hermès is in the midst of a major expansion of its flagship. Down the street, French sportswear brand Paule Ka just opened and Cacharel christened a unit in the same retail development that welcomed Tommy Hilfiger and Brooks Brothers this fall. As for Smith, he said the Paris location pointed to more retail expansion. He just inaugurated a shop in Red Square in Moscow, and early next year he has plans to open a shop in Beirut. Smith said he may be scoping more locations in the U.S., where he just opened a second shop in Manhattan. GINGER TALE: Alison Gingeras, who curated François Pinault’s first exhibition at his Palazzo Grassi foundation in Venice earlier this year, is joining the French titan full time. Last week, Pinault named Gingeras curator of his contemporary art collection, meaning she will leave her functions as an adjunct curator at the Guggenheim. She will curate an exhibition of new works slated to open in May. STYLE TRIBE: London designer team Basso & Brooke took something of a world tour for their latest commission. The duo were tapped to design an outlandish outfit inspired by each of the Dorchester Collection’s (formerly the Dorchester Group) hotels — The Dorchester in London, The Beverly Hills Hotel, Le Meurice and Hotel Plaza Athenée in Paris and Hotel Principe di Savoia in Milan. “They took us over 2,000 hours to produce — they said we could do whatever we wanted,” said Bruno Basso at the launch of the collection at The Dorchester Monday night, showing off the trouser suit they designed for the Principe, whose print and embroidery replicates the hotel’s intricate ceiling. However, Basso admitted that his favorite was the pink ruched creation they designed for the Beverley Hills Hotel, complete with a red-carpet printed at the foot of its train. “I know it’s not how people in L.A. dress, but we wanted to do a stereotype,” said Basso. After the pieces have toured the group’s hotels, Basso said they were likely to be exhibited, although it had not been confirmed where. 12 WWD, MONDAY, NOVEMBER 27, 2006 WWD.COM Giles Deacon to Design Daks Women’s MEMO PAD By Samantha Conti and Nina Jones LONDON — Giles Deacon is adding another string to his fashion bow, designing the luxury women’s collection for British fashion and tailored clothing brand Daks. Deacon will show his first collection, for fall 2007, in Milan next February. “I’ve loved their fabulous tailored pieces since I was at college, Giles Deacon and I loved the idea of working with a true British luxury brand. And it doesn’t hurt that they have royal warrants,” Deacon told WWD. “I want to transform it into an ultramodern British tailored clothing collection. There will be a lot of coats, jackets, suits — and I hope I can pop a few frocks in there, too.” Bruno Massa, managing director of Daks, said in a statement late last week that Deacon “is one of the most exciting designers working in London today, and I am delighted he is bringing his talent to Daks.” Deacon said he wants the luxury collection, ultimately, to be globally attractive and not simply a “pastiche” of British style. “I am so excited about working for Daks. I’ve seen some of the fall prototypes — all made in Italy — and they are just amazing,” he said. Deacon will replace Tiziano Mazzilli and Louise Michielsens, the founders of London fashion label Voyage, who have designed the collection for the past two years. His contract is for two years, and he will be focusing exclusively on the high-end line, which shows on the Milan runways. He said he’d be working on bags and shoes as part of the line. Daks’ most important markets are Europe and the Far East. The line does not wholesale in the U.S., although Deacon said he’d love to see it sell there. “The U.S. would be a great place to push into,” he said. Asked whether he was stretching himself in too many directions, the designer insisted otherwise. Deacon already designs his signature collection, Giles, which shows in London, and he is working with British high street retailer New Look on a full clothing and accessories line that will bow for spring 2007. “We’re very organized in the studio — it’s a bit of a military operation and each of the lines we work on is miles apart from the other, so I don’t think there will be any confusion between them,” he said. “We thought long and hard about taking on Daks, and we knew we could dedicate a great team to it — like we do with the other lines. Also, I enjoy hopping from one project to another.” Although Daks’ roots are in Britain, the company is owned by the Japanese Sankyo Seiko Group, which launched the luxury collection two years ago. Sankyo Seiko tapped Mazzilli and Michielsens to design that collection. The luxury collection is currently sold at Daks’ flagships in London and Tokyo, but a spokeswoman for Daks said the distribution for the Deacon line was “under review.” The spokeswoman added the collection designed by Deacon was expected to achieve sales of between 4 million and 8 million euros, or $5.2 million to $10.5 million, in its first year. Prices for the line are likely to be similar to the current luxury collection, which includes cashmere knits at 600 pounds, or $1,160, and wool jackets at 800 pounds, or $1,545. She added the luxury collection makes up a small proportion of Daks’ overall turnover, which also includes a full ready-to-wear line at lower price points. The company also introduced a men’s luxury collection in June 2005, which is designed by Bruno Montgomery. Daks’ retail sales for the 2005 fiscal year were 500 million pounds, or $966 million, the majority of which were in Asia. STYLE STARTS HERE. CROWDING THE FIELD: Condé Nast’s upcoming launch of a business magazine, Portfolio, in a crowded, dog-eat-dog field, may have surprised some, but the new magazine is not the only one seeking to reinvent the genre. James K. Glassman, who has been a financial columnist for The Washington Post and other publications, and who was the publisher of The Atlantic Monthly and The New Republic in the Eighties, has relaunched the public affairs journal of the American Enterprise Institute as The American, a glossy bimonthly with a ambitious approach to business, economics and culture. Even as business magazines trumpet their impending Internet relevance, Glassman writes in his editor’s letter that his new magazine will hark back to Henry Luce’s midcentury Fortune. “I think the three major business magazines have, in an attempt to get a broader audience, gone downscale,” Glassman contended, citing what he saw as a “big opening” for an intellectual magazine about business that is “absolutely not partisan or ideological — mainly a reported magazine rather than a magazine of opinion.” As for Portfolio, “I would be surprised if they’re doing something similar to what we’re doing....Our attitude is that we think that business has been a source for progress and good, and we believe in celebrating what business does well.” The American’s debut issue includes a profile of CNN business anchor Lou Dobbs and a feature on the transformation of Naples into a men’s fashion hub. It was released with 120 pages, 20 of which are advertising. Advertisers include Intel, ExxonMobil and Cisco. The magazine will have some limited newsstand distribution, some paid subscriptions ($40 a year to subscribe) and some controlled circulation, for an initial circulation of 45,000. Alexander Isley, former art director for Spy, designed the publication. — Irin Carmon SIMPLY DONE: Real Simple has two more openings. Photo editor Naomi Nista, who has been on maternity leave, will not return to her position at the magazine, and senior photo editor Susan McClennan Phear will move on in December to Vanity Fair. Three editors have left the Time Inc. magazine since the beginning of November. Home director Michael Cannell, who joined from the New York Times House and Home section, left three weeks ago; food director Frances Boswell quit to become an acupuncturist and food editor Renee Schettler left last week to join Martha Stewart Living as deputy editor. And features editor Riza Cruz will leave the magazine Dec. 1 to become senior editor at Vogue. Real Simple will publish its first January issue in 2007, bringing the number of annual issues to 12. It also publishes Real Simple Family and Real Simple Travel specials. — Stephanie D. Smith LONG ON JOHN: Anyone who has seen John Galliano stroll out at the end of a fashion show, his bare chest glistening with oil, knows he is no shrinking violet. Further proof — just shy of the Full Monty — can be witnessed in the December issue of French Vogue the designer guest-edited, which hits French newsstands this week. The 312-page issue has multiple covers featuring Drew Barrymore with Galliano in silhouette. Inside, the designer can be spotted at least 75 more times, including two nudes, his essentials covered with a narrow swath of silk or via sly computer manipulation of a Nick Knight photo. Asked in one Q&A which part of his body is his favorite, Galliano replies: “My torso, which has been sculpted with exercise, and my warrior arms to defend myself.” In one photo spread, model Sasha Pivovarova masquerades as the designer, wielding huge scissors in the Christian Dior atelier, or jogging beside the Seine trailed by bodyguards. Besides Barrymore, Galliano tapped an array of his fabulous friends for the issue, including Penelope Cruz, who submitted photographs she took of the likes of Adrien Brody, Salma Hayek, Sean Penn and — you guessed it — Galliano. The R-rated issue also comes polybagged with a 2007 calendar featuring eye-popping David Sims photos of model Karen Elson in bondage. — Miles Socha MONOCLE’S EDITOR: Monocle, the magazine to be launched early next year by Wallpaper founder Tyler Brûlé, has an editor. Andrew Tuck, former executive features editor at Britain’s Independent on Sunday newspaper, joins Monocle’s creative director Richard Spencer Powell this month, and will report to Brûlé. The magazine will feature a mix of global affairs, culture and fashion. “There really is a gap in the market for this magazine, and Tyler’s aspirations for it are incredible,” said a nonobjective Tuck. The 10-times-a-year magazine, with a $10 cover price, is set to launch with the March issue in mid-February. Monocle is expected to unveil its remaining editorial staff later any day. — Samantha Conti • 5 days a week Monday through Friday • Morning hand-delivery* • Color photographs • WWDSCOOP (4 issues per year) • Spring and Fall issues of WWD The Magazine • Annual market supplements Get all of this and so much more. Subscribe to WWD today! Simply call 1-800-289-0273 or 1-818-487-4526. You can also subscribe online at www.subnow.com/wd/ad *Buildings in NYC with delivery access only. Leroux Exiting Eres By Katya Foreman PARIS — Irène Leroux, founder and creative director of the Chanel-owned swimwear and lingerie firm Eres, said last week she would exit the firm at the end of the year. Leroux launched the line in 1968 at age 23, baptizing it Eres after her parent’s multibrand store. Her successor as creative director is Valérie Delafosse, currently a freelance designer for Princesse TamTam. Delafosse’s first collection for Eres will be spring 2008. Leroux said she plans to pursue freelance design roles. “It’s time to try out new adventures,” said Leroux, reminiscing about the time she launched Eres’ first lingerie line in 1998. “I remember nervously pushing a rail full of lingerie across Fifth Avenue in the pouring rain to show to the Bergdorf Goodman team,” she recalled. The retailer asked for an exclusive. “The brand has reached a point where it needs to change dimension and Delafosse is the perfect person for the job,” said Leroux. Eres operates nine stores in France and the U.S., a franchise in Saint-Tropez and is sold in around 700 doors internationally. A store is also scheduled to open in Madrid next spring. SPECIAL ISSUE WWDIntimates PHOTO BY TALAYA CENTENO Fashion Uncovered WWDIntimates is the only fashion-driven intimate apparel publication reaching retail decision-makers across all channels of distribution. Reporting the news, trends and retail strategies in the bra, panty, shapewear, daywear, sleepwear, loungewear, at-homewear and legwear categories, WWDIntimates offers a unique opportunity to presell your line ahead of market week. Bonus Distribution: WWD’s exclusive intimate apparel specialty store network, Lingerie Americas. Issue: January 29, 2007 Close: December 6, 2006 WWD Style Starts Here™ For more information on advertising in this special section, contact Joel L. Fertel, associate publisher, at 212-630-4573, or Elizabeth Haynes, European fashion director, at +33 1451 1303, or your WWD sales representative. 14 WWD, MONDAY, NOVEMBER 27, 2006 NATIONAL MARKETPL ACE BUYER - Activity Kits Prime Garment Center Showroom/Office for Share Cash For Retail Stock & Closeouts. No Lot Too Big or Too Small. Call CLOTHES-OUT: (937) 898-2975 Furnished. Reasonable Rent. Call Paul 212-391-7071 / 646-610-1757 PATTERN/SAMPLES Reliable. High quality. Low cost. Fast work. Small/ Lrg production 212-629-4808 PATTERNS, SAMPLES, PRODUCTIONS All lines, Any styles. Fine Fast Service. Call Sherry 212-719-0622. PATTERNS, SAMPLES, PRODUCTIONS Full service shop to the trade. Fine fast work. 212-869-2699. ASSISTANT PROFESSOR Design & Merchandising Program DREXEL UNIVERSITY Seeking an individual with 5+ yrs. of retail merchandising management &/or product development exp. for a teaching & research position starting Fall 2007. Advanced Degree preferred. Submit letter & resume online at: www.drexeljobs.com Drexel is an EO/AA Employer Patterns/Samples/Production Snaps, Eyelets, Covered Bottoms Any Style - Full Service Call Johnny: 212-278-0608/646-441-0950 11 EAST 36th STREET WALK TO WORK! 5th & 38th st. SUBLET 5,000 ft. High ceilings - Excellent Condition Prime Manhattan RE Scott 212-268-8043 Search www.manhattanrealty.com Search For Space In Garment Center Showroom/Office/Retail - no fee www.midcomre.com Or Call Paul 212 947-5500 X 100 Showrooms & Lofts BWAY 7TH AVE SIDE STREETS Great ’New’ Office Space Avail ADAMS & CO. 212-679-5500 2 Showroom / Office Space. Beautiful, airy, sun-filled w/ windows. $850-$900. 9 x 8 & 12 x 7 sq. ft. Call: (212) 683-7845 High qlty, reasonable price. Any design & fabric. Fast work. 212-714-2186 Boutique Full Service Condo Interiors by Andres Escobar Soaring 12" Ceilings 1 BRs from $740K 2 BRs from $1.095 212.725.6333 morgan-lofts.com Exclusive Sales Agent The complete offering terms are in an offering plan available from sponsor. File No. CD #05-0128. Sample Sale December 1-3 10am-6pm 76 Greene Street between Spring and Broome Women’s and Men’s Apparel and Accessories CAD Artist $50-55K Current exp in Primavision, Illustrator, Photoshop. Strong in prints, cleaning up of prints. Mdtwn sprtswr co. Call 973-564-9236 or E-mail: [email protected] CAD ARTIST Seeking Entry Level Cad artist with knowledge of Illustr/Photoshop for a fast growing Sportswear Company. Email resumes to: [email protected] Major Apparel company seeks very organized and detail oriented individual to work as liaison between design and FULL TIME FREELANCE production departments. Basic knowlTextile service studio is seeking expeedge of Photoshop & Illustrator required. rienced freelance CAD Designer. ProfiFax resumes to: 212-730-9705 ciency in Photoshop a must. Organized, detail oriented, and able to multi-task. Tel: 212-695-0115 / Fax: 212-695-0072 Admin Since 1967 CAD Designer W-I-N-S-T-O-N APPAREL STAFFING OCCUPANCY SOON! Developer: The Bobker Group Top Lingerie Building PTTNS/SMPLS/PROD Admin/Design Room Asst NJ based supplier for major mass merchant retailers needs exp’d, dedicated individual for purchasing activity kits. Must be able to maintain detailed records, communicate & negotiate pricing, deliveries, & terms, with overseas manufacturers. A highly inter-active position with substantial interface with product development team. Must have good excel skills & be highly organized. Please send resume/salary req’s to: [email protected] DESIGN * SALES * MERCH ADMIN * TECH * PRODUCTION (212)557-5000 F: (212) 986-8437 ASSISTANT DESIGNER Leading better separates co. looking for organized, motivated, creative firecracker willing to do whatever it takes. Must have 2 yrs exp working with China, drawing skills, spec, sketch, technical packages, EMB layouts. Fax resume to: 212-302-3872 / MRS. KRAMPF BABY PHAT Designer & Graphic Designers Needed Infants through 16 Email: [email protected] COLORIST Great color sense needed. Rare oppty to combine tech and creative skills. Resp include: approve Labdip, strikeoff & bulk color submits for designer lingerie co. Work with Design team to CAD textile print colorways during development cycle. Must be independent worker w/ good time mgmt skills. 3 yrs+ color exp’d. Ned Graphics knowledge a +. Email resume & salary req: [email protected] DATA PROCESSING Seeking motivated individual for entry level data processing position using AS400. We will provide training. Please fax resumes to: 212-730-9705 Design Assistant Branded women’s sportswear co seeks detail oriented person with strong organizational skills. You must have knowledge of garment construction, draw flat & detail sketches. Work on presentation boards. Proficient in Photoshop, Illust CS2 & create CAD’s. Email resume to: [email protected] Design ASSISTANT DESIGNER Major apparel co. seeks experienced individual to create production/tech packs. Other responsibilities include helping prepare worksheets and artwork pages. Must have knowledge of Illustrator & Photoshop. FAX RESUMES TO : 212-730-9705 Design Assistant Fast paced, high energy, growing Women’s Apparel Co seeks: Min of 3 years exp, must have strong computer illustrator skills & MS Office, be a self-starter, exp working in a fast paced environment and able to multi-task. Great oppty for growth and excellent benefit package. Email / fax resume: [email protected] 212 827 3344 Attn: MH Designer $50-70K Current exp in private label updated Jr. driven missy sportswear. Midtwn co. Call 973-564-9236 or Email [email protected] WWD, MONDAY, NOVEMBER 27, 2006 15 GRAPHIC DESIGNER Intimate Apparel Company based in NJ Requires a strong sense of design & creativity, meeting multiple deadlines, & laying out preliminary concepts as directed by the design Mgr. Strong background in Photoshop & Illustrator, CAD & freehand illustration is a must. Knowledge of lingerie & intimate apparel illustration & detail work is a must. Must be a team player w/strong organizationa l and technical skills, will be required to prioritize and multi task. Position requires a minimum of 5 yrs exp. HOT JOBS COOL COMPANY Designer *Designers, Licenses, Kids $55k *Sales-Home Accessories/bedding $100k *Visual Mgr-Branded Retailor $90k *Costing Managers $70k *Inventory Planner $80k Danskin, Inc., well established active *Prod Asst $45k apparel co. is seeking an Assistant *Prod/Sourcing.Coord Designer for licensed mass market *Bi-ling, Mand/Cant $60k brand to assist design staff in all phas- *Licensed Design Room Mgr. $60k es of product development; organize & Call Laurie 212-947-3399 or maintain trim, lab dip and fabric files; e-mail: [email protected] conduct flat sketching. Proficiency in KARLYN FASHION RECRUITERS Illustrator a must. Must have 1-3 years experience, & be a responsible team player, organized, detail oriented and able to effectively multi-task. Send resume with salary history to [email protected] or ACCESSORIES DESIGNER Fax resumes to (212) 930 – 9103. Private label company seeks Accessories EOE/M/F/D/V Designer to assist in handbags, as well as communication with both the buyer as well as the Hong Kong office. Designer Fax: (212) 869-3179 or E-mail: [email protected] Exciting and highly creative Fashion School Supply Company based in Long Island, NY is seeking an energetic, talented creative artist to join Sweater/Knits. Better Runway Designer [email protected] 212-947-3400 our expanding creative department. Career opportunity with the potential to grow within successful company. Must have Photoshop and Illustrator experience on MAC. Competitive salary and benefits. Brooklyn, NY Please fax or email resume with salary Est’d. company seeks a Patternmaker with 4+ years experience in Men’s requirements to Mr. Lazo at: Wear, to create and modify men’s (631) 789-8989 or outerwear apparel patterns from flat [email protected] sketches. PAD software knowledge a plus. Must be computer savvy. Competitive salary + benefits. Friendly, modern office. FT. Must speak fluent Fast growing 7th ave. bridge evening co. English. Call 718-246-1515 or E-mail resumes to: [email protected] seeks creative designer. Knowledge of Please visit: www.cryeassociates.com fabric mkt. Ability to sketch, create presentation boards, build design/tech pacs for overseas production necessary. Min 5 yrs exp. Full benefits pkg and 7th Ave Eveningwear Mfr. is seeking an competitive salary. Email resumes to: individual w/at least 5 years experience in Patternmaking/Draping with [email protected] porary, couture dresses. Must be exp.d. dealing with China. Fax: 212-719-1064 Assistant Designer Please email resume: fashionopportunities@ gmail.com Sales Reps With Following Est’d. Upscale/Trendy Accessories Co. w/ Scarves, Shawls, Furs seeks Southeast & Southwest Reps already participating in Atlanta & Dallas Marts. Travel between shows req’d. E-mail: [email protected] SALES EXECUTIVES & SALES ASSISTANT Well-known expanding Dress Company seeking •SALES EXECUTIVES positions available for major dept. store and private label. Must be assertive, highly motivated individuals who can work as a team player. Minimum of 4 yrs experience in the fashion industry and strong computer skills required. Excellent opportunity for the right individual. •SALES ASSITANT to assist president of sales. Must have excellent communication skills, detail oriented, team-driven and have strong computer skills. Excellent opportunity for growth. FAX ALL RESUMES TO (212) 575-4775 EXECUTIVE PRODUCTION ASSISTANT SALES Premium Headwear Company seeks Major apparel company seeks detail oriented & organized assistant for a busy production job dept. Responsibilities include PO entry, work order entry and sample tracking plus follow up and handling of all packing and carton markings. Must have good computer & communication skills. AS 400 experience preferred. Fax resume to: 212-730-9705 Sales Executive for South & North East Territories. Sales & tradeshow experience a must. Headwear company with celebrity product placement and show events. Department store, specialty store, boutique experience a plus. Compensation: Salary + Commission. Need an energetic individual! Email: [email protected] Career Placement Relocatable and highly qualified graduates from Virginia Marti College of Art & Design located in Cleveland, Ohio seeking employment in Fashion, Interior, Graphic Design, and Fashion Merch. Skills in NED Graphics, Gerber, Adobe, and various computer programs. Call 1-800-473-4350 or visit our website at: www.vmcad.edu Magaschoni/Global Wise Development Ltd. Production Coordinator Creative Designer MENSWEAR DESIGNER $80K PATTERNMAKER DESIGNER Patternmaker/Draper DESIGNER Fast paced children’s accessory co seeks Accessories Designer with min 3 yrs exp from concept thru first sample & experience w/overseas development. Photoshop and Illustrator a must. Should be a self starter w/ good followthru skills. Great oppty for the right person who wants to enjoy what they do! Salary commensurate with exp. Please fax resume: 212-268-0479 DESIGNER Senior eveningwear Designer. Very creative with computer exp. Excellent salary + benefits. Please fax resume to: (201) 587-8609 Planner/Retail Analyst Lg Childrenswear co seeks detailed, analytical person responsible for analyzing & planning retail acct business from the mfg side. Retail Link knowledge a Must. Must possess knowledge of managing inventory levels, flows, forecasting sales/MD’s and negotiating MD $’s both in house & retailer’s side. Fax 212 967 8631 Attn MB Positions Available! Assistant Designer Major apparel company seeks Production Coordinator. Responsibilities include delivery tracking, preparing production status reports, sending out pricing and order details, creating seasonal design books and providing administrative support to team. Candidate must be proficient with Outlook/Excel and posses excellent communication skills. Must be detail oriented. FAX RESUMES TO: 212-730-7905 Tracking Goods, Lab Dips A Must Children’s Exp A +. NY Location Fax Patti: 973-812-1731 Bonpoint Paris, prestigious growing international Children’s Clothing Co. seeks for its Madison Ave boutiques and new NY store opening at 392 Bleecker street: *Production---Production* Assistants-Coordinators-Managers Many Jobs-Excellent Salaries Call (212) 643-8090 Fax (212) 643-8127 (AGCY) Assistant Managers Sales Associates Production Sourcing Mgr $130-160K Current extensive exp in outerwear, polyfill, wool, winter jackets req’d. Must have worked for min 100 mil vol co. technical proficiency in construction of outerwear. Will supervise min 10. Call: 973-564-9236 or Email: [email protected] Candidates must have minimum 2 years High-End Retail Management/Sales Experience , excellent interpersonal skills and superior customer service. Luxury goods experience a plus. Production Coordinator Production Sourcing Mgr to $125K. Current strong exp in better to bridge womens market required. Domestic plus overseas. Well known brand. E-mail [email protected] Great Opportunity! Great Company! Leading Intimate Apparel Mfg. seeks experienced & highly organized Quality Assurance person to assist the VP of QA on all daily activities. Duties include: maintaining all inspection logs, running in-house processes, sending products for testing and working on special projects. Will also asst prod dev personnel on finished garment audits. Previous Quality experience mandatory. Strong follow-up and analytical skills necessary. Experience in Word, Excel and Outlook mandatory. Experience with Walmart, JCP & KMart a plus. Please FAX your resume to: B. Farrell (212) 842-4032. EOE. Receptionist / Administrative Asst Floral Designer www.bonpoint.com QA Assistant Seeking creative, organized Asst. Designer w/3-5 yrs exp in kids market. Candidate must be team player, strong knowledge of garment construction, Bloom Flowers, New York’s luxury Floral fashion trends & be able to meet dead& Lifestyle Retail Store, is seeking a lines. Proficiency in Illustrator CS2, Manufacturer of Women’s Sportswear talented & passionate Floral Designer Photoshop, Excel along with excellent seeks energetic self motivated person. Person should possess good interperw/minimum 2 years design experience. communication skills a must. sonal skills, be organized & dependable. Competitive salary. Fax: 212-832-8088 Job duties include answering phones, greeting visitors and administrative Seeking professional with min. 5 yrs Design Room Mgr to $175K. Current exp. to design fresh, novelty graphics tasks. Please fax resume to 212-239exp in supervising min. 20 designers, for girls. Must be a team player with 7332 or email to [email protected]. GA’s, assistants, etc. Boyswear li- great color sense and understanding of censed co. Strong in mgmnt of design current fashion & textile trends. Profiflow, calendar scheduling, etc. Call 973- ciency in Illustrator CS2, Photoshop. Fashion designer seeks exp’d 564-9236 or email: [email protected] Please forward resumes to: Samplemaker for custom couture [email protected] eveningwear. Manhattan location. Great opportunity. Call: (347) 439-5200 EDI Coord to 38K. Exp in Excel + EDI. Bergen/ Hudson County area. Assist in Walmart followup. Call 973-564-9236 or email [email protected]. 1+yrs Fash. Exp Excel & Order Processing [email protected] 212-947-3400 Design We offer competitive salary and full benefits package. Please e-mail your resume to: [email protected] or fax it to: 212-246-3293 SHIRTS & NECKWEAR SALES ANALYST Leading Men’s apparel co. seeks an exp’d Sales Analyst w/ 3-5 years of retail analysis reporting, retail sales projections, and retail gross margin estimates. Ideal candidate must have very strong quantitative skills and understand retail & financial performance metrics. Close work with internal sales team. Send Resume: [email protected] Or Fax 212-689-1439 F/T Sales Associate Prestigious, fast-paced environment Madison Avenue Lingerie / Body Wear Boutique seeks Full Time Sales Assoc. Qualified candidates will possess supe rior customer service, sales & communication skills. Please fax resume and salary requirements to 212-327-0132 Graphic Artist-Girls suppliers SAMPLEMAKER SHOWROOM ASST $27-35K Account Manager Gen’l. Manager, N.A. Operations Heads & expands co. in US; plans, directs & formulates co. policies; hires, implements & oversees staff in sales, mktg, account., cust. Svc,, legal & distribution; develops contacts in S. America w/textile & garment industry execs. Min. BA + 5 yrs progressive prof. respons. in Bsn. Admin. & tech. knwldg. of alpaca, vicuna & cotton textile industry. 40 hrs/wk, M-F, 9:00 am - 5:00 pm. Job in NY. Fax resume to USAlpaca, Attn.: Mr. Freyre @ 212-5754698 Juniors licensee for knits & sweaters seeks aggressive/ motivated/ dynamic professional with industry contacts to fill Account Mgr position & expand business. Candidates should have a minimum of 3 years experience. Please forward resume to: [email protected] Graphic Artist to 60K. Exp in girls. Newborn, toddler, up to tween. Cutsy, Sweet, Girly applicas and prints. Full time perm only. Call 973-564-9236 or email [email protected] Product Devel $65-70K PRODUCT DEVEL $40K Better Bridge Evening Dress Mfg Must Sketch & Spec. Time’n Action [email protected] 212-947-3400 Sweater & Knits. Test/Analyze Yarns & Fabrics [email protected] 212-947-3400 Tech Designer-$50-60K. Current exp in putting tech pkgs together to be sent to far east. Strong in sewing construction. Long Island City. Call 973-564-9236 or Email: [email protected] Technical Designer Exp’d production technical designer for major importer of sweaters, knits and wovens. Resp. include: preparing production technical packs, fits & grading. Detailed follow-up with overseas manufacturers, min 3 yrs exp. Fax resume: 212-382-2549 Web PDM Administrator to $80K. Current exp in better sportswear co. Strong exp in interfacing with Seven On Line program. Call 973-564-9236 or e-mail [email protected] travel real estate recruitment business services vendors careers opportunities Leverage the power of WWD among industry professionals to reach both active and passive job seekers. Call 1-800-423-3314 or email fpclassifi[email protected] to advertise. 16 WWD, MONDAY, NOVEMBER 27, 2006 WWD.COM Russian Doll — Marcy Medina — Jacob Bernstein PHOTO BY BY STEVE EICHNER The Sample Life NEW YORK — For any young woman — or two, as the case may be — navigating New York’s social whirl requires the ability to change on the go. During New York Fashion Week in September, for example, Byrdie Bell and Olivia Palermo received invitations (and outfits on loan) for the Zac Posen and Calvin Klein after parties. And since both events were on the same night, this created a predicament of sorts: Whose frocks would they wear? So the two young ladies used a town car as a makeshift closet, unzipping their Zac Posen numbers and jumping into their Calvins between the events, thereby ensuring that homage would be paid where homage was due. “It just seemed appropriate,” says Palermo, laughing at the memory. “It helps the designer out and we love dressing up.” They sure do. In the past six months, Palermo and Bell have been painting the town red, decked out at virtually every envelope opening that has a junior committee. There they were at the Young Friends for the Met dance. And there they were at the annual New Yorkers for Children Gala. First, they started making the party pages. Then came a phone call from Vogue to appear in a photo shoot for the magazine’s October issue. Now, the two find themselves on tip sheets for benefits, which is more than a little amusing to some — and quite a little annoying to others, given that neither of them has anything resembling a career, philanthropic skills or a storied last name. They grew up near each other in Greenwich, Conn., but they weren’t what you’d call fast friends. Bell, an aspiring actress, is the daughter of New York Times best-selling author Ted Bell, who writes political fiction. (“Hopefully, they’ll make his books into movies so I can star in them,” Bell Olivia Palermo says.) Palermo, 20, is studying history at the and Byrdie New School. Her father is in real estate and Bell at a her mother is an interior designer. Missoni party. But they spent their childhoods avoiding each other. “Our mothers went to boarding school together,” explains Bell, “but Olivia’s a year younger than I am, and for a long time I didn’t really want to be friends with her.” “When your parents try to set you up with somebody, it always backfires, you know?” is how Palermo puts it. Fittingly, the two realized they were meant to be friends when they bumped into each other one night last year at Bungalow 8. “She was so charming and nice and beautiful, so I said, ‘Let’s have lunch,’ ” Bell continues. They had lots in common — for one thing, they’re both sample size. “They’re an example of product seeding,” explains one high-profile fashion publicist. “They fit in the clothes, so they get a free dress for an evening and the designer gets a chance to make the party pages.” And editors are always on the lookout for the next pretty face. “Their youthfulness is what we noticed about them,” says Vogue’s style director Alexandra Kotur. “They look great.” SVETLANA METKINA HAS BEEN acting since she made her stage debut as Pippi Longstocking at age 11. A graduate of the University of Moscow and Shuka University (a drama school), the willowy Muscovite appeared in the 1995 Russian film “Family” and caught the attention of American filmmakers at the Berlin Film Festival. She soon racked up credits in “The Second Front,” “Barbarian,” “Slingshot” and “Mini’s First Time.” In her current film, “Bobby,” she plays a Czech journalist. She sat with WWD and shared a few observations. Coming to America: “It’s completely new. You are nobody, nobody knows you and you start step by step. I like this way. It’s exciting.” All in the family: Metkina’s husband, Belgian industrialist Michel Litvak, is one of the producers of “Bobby,” but her role in it is also special because her father is a journalist. “I know how important it is for him to get those five minutes for an interview. It is also important to have that freedom. When I was born in Moscow, we still had the Iron Curtain.” Striking a pose: Metkina modeled in Paris for two years. “It’s not just beautiful girls wearing beautiful clothes. It’s hard work.” In costume: “I love to mix styles. Right now my favorite period is the Sixties and it came from ‘Bobby.’ I love Jackie Kennedy’s style.” Svetlana In the moment: “For me, the glass Metkina is always half full. My favorite place is wherever I am. I love New York for the energy, Paris because it’s beautiful, Spain for holiday and Italy for food.” Fashion: Favorites include Balenciaga, Lanvin, Marni, Alexander McQueen and Thomas Wylde. On the record: “I travel alone, normally, and I love to talk to people on the plane. Sometimes I write down the things they tell me in short stories.” — Katya Foreman PHOTO BY DOMINIQUE MAITRE Metkina in a scene from “Bobby.” PHOTOS BY JIM SMEAL/BEIMAGES AND WEINSTEIN CO./NEAL PETERS COLLECTION BAT GIRL PARIS — Resembling a cosmic Hiawatha with her raven bangs, gold headband and licks of glittering war paint smudged across her cheeks, Natasha Khan, the 27-year-old lead singer of British band Bat for Lashes, bewitched the audience at La Cigale on a recent Saturday night — she threw back her head and let out a guttural howl. “It’s such an amazing, primordial sound that creates a sense of community,” Khan mused after the gig. “I think I heard ‘Teen Wolf’ somewhere out there in the front.” Rattling wind chimes, ringing bells and pounding shakers against drums are part and parcel of Khan’s mystic stage act, led by her haunting vocals and the hand claps, foot stomps and musical meanderings of her Bat for bandmates, Ginger Lee, Abi Fry and Lizzie Carey. Lashes’ Following the U.K. release of its debut album, “Fur and Gold,” the band Natasha — whose music might be categorized as experimental pop — is heading for Khan. the States in March to play at the South by Southwest festival in Texas. Born to an English mother and Pakistani father, a famous squash coach who would take his family along with him on world tours, Khan says her memories of Pakistan are a wellspring of inspiration. Losing a pet goat to a sacrificial religious ceremony, say, is just one souvenir that transfused into a song. “It was a very mystical and magical experience with lots of storytelling and fables about genies and spirits,” recalls the singer, whose kindred musical spirits include the likes of Kate Bush, Cat Power and David Bowie in his Ziggy Stardust phase. Pakistan’s sartorial customs — embellishment and gold jewelry — also have seeped into her act. She collects chains (mainly foraged in markets and thrift stores across England) and crafts golden headbands for herself and the girls, festooned with old badges. “My sweetheart wears this very same necklace [across the pond],” says Khan, clutching a vintage King George pendant that she gave to her boyfriend, Will Lemon, a New York-based artist. In return, she’ll often wear Lemon’s tapestry-printed clothing on stage. “I love wearing his wild William Morris prints and biker boots,” says Khan. Not forgetting all that’s gold. “Wearing anything sparkly is wonderful. It puts me in the mood to perform.” WWDICSCPREVIEW SECTION II ILLUSTRATION BY MATT COLLINS The Meaning of Green Development that benefits the environment can help boost the bottom line. See pages 16 to 17. 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LOUIS, MO SUMMERLIN TOWN ENTER, SUMMERLIN, NV THE GRAND CANAL SHOPPES AT THE VENETIAN, LAS VEGAS, NV THE SHOPPES AT THE PALAZZO, LAS VEGAS, NV • THE SHOPS AT LACANTERA, SAN ANTONIO, TX TYSONS GALLERIA, MCLEAN, VA • VILLAGE OF MERRICK PARK, CORAL GABLES, FL WATER TOWER PLACE, CHICAGO, IL • WHALERS VILLAGE, KAANAPALI, HI 4 WWD, MONDAY, NOVEMBER 27, 2006 SECTION II WWD.COM ICSC PREVIEW contents 8 14 16 20 6 RETAIL DEVELOPMENT ENTERS NEW ERA ICSC chairman John Bucksbaum waxes poetic on development today. 8 SCENE Where to shop and what to see while in New York for ICSC. 10 DONE DEALS & IN DEVELOPMENT An Arizona town welcomes Louis Vuitton and an art exhibit lights up a Ginza retail building. 12 REITS ROARING ON WALL STREET Retail REIT stocks continue to outperform. 14 REDEFINING TOP MALL ATTRACTIONS Landlords broaden the definition of a traffic generator. 16 THE MEANING OF GREEN Boosting the bottom line with sustainability. 18 ON THE JOB How a retail broker leverages her Rolodex. LUXURY RETAILERS EXPAND, CAUTIOUSLY The Macerich Co. takes the temperature of luxury retailers. 20 ON THE ROAD 22 Black gold transforms Calgary. 22 PENNEY’S PROGRESS J.C. Penney looks beyond the mall. Join the crowd that stands alone The Shoppes at The Palazzo is setting a new standard for Las Vegas Luxury. Now is your chance to join trendsetting retailers such as Barneys New York, plus exciting cuisine and posh nightlife which will provide a younger, fresher and more seductive alternative to typical luxury. Even the location of this unique experience is unmatched, as it will complement and enhance The Strip's most visited locations - The Venetian and The Grand Canal Shoppes. To be a part of The Shoppes at The Palazzo, contact: Lori Pawley - Vice President, Fashion Retailing 312.960.5880 • [email protected] Lou Silvestri - Executive Director of Leasing 702.414.3549 • [email protected] THESHOPPESATTHEPALAZZO.COM 6 WWD, MONDAY, NOVEMBER 27, 2006 SECTION II WWD.COM ICSC PREVIEW | CHAIRMAN’S VIEW Retail Development Enters New Era ICSC chairman John Bucksbaum hones in on mixed use and densification. By David Moin J ohn Bucksbaum, chief executive officer of General Growth Properties Inc. and chairman of the International Council of Shopping Centers, has strong opinions about what consumers and communities want from him and other developers. “They are encouraging densification,’’ he said in an interview. “They don’t want more ‘greenfield’ in development.” By densification, he means redeveloping malls with offices, hotels, theaters, parks, outdoor dining and other elements beyond the traditional menu of department and specialty stores and fast-food courts. It often means reclaiming abandoned department stores and other spaces and rebuilding and upgrading properties to be more in touch with current lifestyles. The mixed-use phenomena will be a major theme in Bucksbaum’s state of the industry address and a special session at the ICSC New York National Conference & Deal Making meeting, Dec. 4 to 6 at the Hilton New York. Mixed use emerged as a trend in development in the Eighties, but in many cases flopped because the market demand for certain elements contained in the projects was absent, Bucksbaum said. “Now we are able to pick and choose and bring more of the art of science” to densifying malls, he said. “We can understand what other uses [beyond retail] can be successful in a marketplace. Going forward, you will see much more mixed use. People don’t want to commute 90 minutes to work. Consumers don’t want to drive 30 minutes to go shopping.” Bucksbaum returned from a mixed-use conference in Hollywood, Fla., last month convinced that it’s the way of the future. “This was a remarkable conference in the sense that it was the first [of its kind] put on by five different trade organizations.” ICSC was the lead organizer; others hosting the event were the National Association of Industrial and Office Properties, the National Multi Housing Council, the American Resort Development Association and the Building Owners and Managers Association. “They were expecting maybe 400 people,’’ Bucksbaum said. “We had 1,100. That shows you the interest in what’s happening in real estate. Mixed use is very much front and center today. We have the room on our sites to bring it in. Retail is a wonderful hub to build around. You can take back [vacated] department store space, and do other retail formats, residential, offices or hotels, depending on what’s the greatest demand for that space….In the Eighties, people were building all four components on Day One,” and that sometimes led to failure, he noted. But now there’s a greater chance of success since developers have a better understanding of the market demands at properties that have been around for awhile. General Growth’s Natick Mall in Massachusetts is being renovated and expanded with what Bucksbaum described as a second, more upscale center that will be anchored by Nordstrom and Neiman Marcus, and two, 12-story residential buildings with luxury condominiums. The 40-year-old site has about 1.6 million square feet of gross leasable space and is anchored by Macy’s, Lord & Taylor and Sears. “We expect it to become the South Coast Plaza of the New England region,” Bucksbaum said. The 40-year-old South Coast Plaza, in Costa Mesa, Calif., has 2.8 million square feet of gross leasable space and is the biggest in the country, for retailing, though Mall of America has more total square footage when you add in its entertainment features. On a smaller scale, General Growth operates mixed-use centers such as Mizner Park in Boca Raton, Fla., which is 15 years old and includes retail, residential and office space, along with an art center and a performing arts center. “It’s a highly productive center,” Bucksbaum John Bucksbaum said, with about 175,000 square feet for retail, about 800 or 900 residential units, and more than 150,000 square feet of office space. “There is a lot of complexity to mixed use,” Bucksbaum continued. “There are more opportunities to fail when you start getting involved in more than one type of use. It’s got to be well planned and that’s not easy.” There’s a lot of construction and architectural considerations, he noted, such as with residential coexisting in a retail project, entrances and parking locations for residents must be thought through, as well as what the view from the apartments would be. Developers also must update their retail space. Market demands are changing and consumers want revamped formats, whether it’s open-air settings, stores with entrances and facades facing mall exteriors for easier access from their cares, retail “streetscapes” or outdoor retail villages with cafes, fountains and parks. “The way malls are being designed and built is much different today,” Bucksbaum said. “It’s as an exciting period for our industry as we ever had.” Retailers are starting to understand if they want to continue to expand, they have to rethink their real estate for different settings, such as — John Bucksbaum, urban markets. “There is real busiGeneral Growth Properties Inc. ness to be done in urban markets,’’ he said. “More and more retailers are exploring them.” Also, developers are going upscale in terms of tenants, ambience and amenities. “This is very much a trend,” Bucksbaum said. “All customers have aspirations to move up. Retailers have done a good job of adjusting their selections. Coach is probably the best example of [a retailer] who has brought a luxury name to a level of affordability. Neiman Marcus is doing that with Cusp,” a new division with two units and a contemporary assortment. “Apple is a great example of an upscale product within reach of the masses. There is a belief that upscale retail is a little more recessionary proof. With department store consolidation, Nordstrom is being given new opportunities in markets that didn’t exist for them before. Neiman’s, too.” Mixed use is very much front and center today…. Retail is a wonderful hub to build around. “ ” ICSC to Roll Out Retail Runway in New York T Wild Oats will be part of ICSC’s Retail Runway. Inset: Charles Tomb of Starwood Hotels & Resorts Worldwide. he International Council of Shopping Centers’ New York National Conference & Deal Making convention will open its doors on Dec. 4 at the Hilton New York in Manhattan. The conference will also kick off ICSC’s 50th anniversary celebration. After the Las Vegas annual convention, this is ICSC’s most popular meeting of retailers and owners. Hundreds of retailers, ranging from Big Lots and Dress Barn to Sally Beauty and Hannaford Bros., will be exhibiting, along with developers including Simon Property Group, General Growth Properties, Forest City Enterprises and Federal Realty. It is expected to draw 7,000 real estate and retail executives for networking, deal-making and a few choice panels. The conference will also include ICSC’s first “Retail Runway,” which will allow fashion retailers such as Planet Funk, Blue Mercury, Lulu Athletica and Limited Too to exhibit their business and expansion plans in a new runway format. Grocer Wild Oats and restaurants Dunkin’ Donuts and P.F. Changs also will exhibit in the Retail Runway. Several notable executives will speak at the panels: ● “Mixed-Use Development” will examine whether this development concept has longevity or if it is a passing trend in retail. Speakers include Barry Dinerstein, the deputy director of housing, economic development and infrastructure planning for the city of New York; Christopher Pine, the vice president of real estate for Whole Foods Market, and Charles Tomb, senior vice president of development for Starwood Hotels & Resorts Worldwide. ● At “Wall Street on Retail,” experts from the major brokerage houses will evaluate year-end projections and industry trends. Speakers include retail analysts from Bear Stearns, HSBC and Morgan Stanley. — Amy S. Choi fine dining: THE GRILL ON THE ALLEY KAREN MILLEN GUCCI VERSACE ZARA TIFFANY & CO. LOUIS VUITTON Where you’re seen has a lot to do with how you’re seen. For more information, please contact our leasing specialists: Lori Pawley 312.960.5880 | Lynn Van Amburgh 972.868.6553 galleriadallas.com | Dallas, Texas 8 WWD, MONDAY, NOVEMBER 27, 2006 SECTION II Get out of Midtown, off Madison Avenue, and into the fray. And, no, the Meatpacking District and the Lower East Side are no longer considered off the beaten path. Food to Fashion on Smith Street F alling Williamsburg the new East Village is so 1999. Hipsters and artists priced out of the Lower East Side once flooded across the East River to seedier digs among the warehouses and abandoned manufacturing buildings along the water in north Brooklyn. Now Bedford Avenue — Williamsburg’s “downtown” — is saturated by boutiques, upscale restaurants and, much to some locals’ dismay, chains such as American Apparel, Subway and Tasti D-Lite. The throngs are pressing further south and east, bringing $200 skinny jeans and shaggy-chic haircuts to a section of Brooklyn better known for its Hasidic synagogues and Puerto Rican Day Parade parties than for its fashion. Grand Street, which intersects the south end of Bedford, is one new nucleus of Williamsburg shopping. “I hit the jackpot with this place,” said Liz Santiago, proprietor of CeleBritAy and chemist behind the company’s luxury handmade spa and bath products. “It was a shamble when I got here, but I’ve put a lot into it and love the location.” From her perch on Grand Street and Marcy Avenue, the furthest reach of Grand Street before it abuts the Brooklyn-Queens Expressway a few yards past her door, Santiago creates, packages and sells her concoctions in a store the size of a typical apartment — a 400-square-foot, New York-scale studio. A 6-oz. bottle of her Seabuckthorn Berry body lotion, mixed with five exotic essential oils, rings up at $75, while 8 oz. of Raspberry Icelandic Brine bath salts costs upward of $40. One of her most popular items, the Pumpkin Pie Milk Soap, runs around $30. Santiago opened up shop in November 2005, and while she only gets a dozen or so walkers-by during the week, traffic picks up significantly on weekends. Such pockets of chic, ensconced in less-than-glamorous settings, are the calling card of South Williamsburg. CeleBritAy, however, is soon to become enveloped in a retail streetscape to rival Bedford Avenue. Next door, in a dilapidated brownstone, Grand Society sells antiques and designs wedding dresses. Down the block, Armoire offers mimosas for weekend morning shoppers browsing the racks of local and big name designers such as Mike & Chris and Earnest Sewn. Across the street, Mandate of Heaven’s flagship — the retailer also has stores on the Lower East Side, in SoHo and in neighborhoods in faraway Los Angeles — offers edgy, vintage schoolgirl-esque collections. Pop, a Washingtonbased retailer that sells labels such as Penguin and Ben Sherman, opened on Grand Street last fall and receives new shipments of men’s and women’s clothing and accessories daily. “The activity on Grand Street has become incredibly heavy,” said Agapito Garcia, a broker with Leiter Realty Group, which controls much of the space in the area. “The street was neglected for the past 30 years, but it used to be the most upscale street in Williamsburg. We’re trying to bring it back to what it once was.” As the neighborhood strives to do just that, rents are rising. While Santiago pays only $1,000 a month in rent for her space — roughly $30 a square foot annually — some commercial retail space is going for as much as $60 a square foot, while upscale condominiums sprouting along Grand Street are being marketed for $900 a square foot, or a whopping $1.3 million for some of the larger units. In response to the price tags, retail development is pushing further east. Emptied, polished storefronts, poised for new retail, are replacing dollar stores and bodegas along Broadway near Hewes and Lorimer Streets, while a corner space formerly occupied by a dry-cleaning business on Broadway and Keap streets is being marketed by Newmark Knight Frank Retail, one of New York’s largest retail brokerages. Meanwhile, chic restaurants are drawing hip kids from as far east as the border of Bushwick. One such eatery is Mojito Loco on Meserole Street and Manhattan Avenue, which offers Peruvian and Pan-Latin cuisine. “We’re looking to create a complete neighborhood,” said Garcia. “And what is good for the neighborhood is more retail.” ood has long been the lure that coaxed adventurous Manhattanites to Brooklyn’s Smith Street. The opening of a string of boutiques over the past two years, however, has transformed the area into an equally impressive retail destination with a reputation stretching well beyond the city limits. The intersection of Atlantic Avenue and Smith Street marks the entrance to a bustling mile-long stretch of bars, restaurants and boutiques that has sent the young professional demographic flocking to the area. The intersection is also representative of the change. A long-vacant jailhouse occupies one corner, a Brooklyn Industries store sells hooded sweatshirts, T-shirts and bags on another and a new combination hotel and luxury apartment building with penthouses going for more than $1 million is on the rise on another. When Lara Fieldbinder and her husband began scouting locations for their store, Dear Fieldbinder, they had concerns about setting up camp on Smith Street. “We thought we might be taking a risk being on Smith,” said Fieldbinder, an art school graduate who has lived in the neighborhood for four years. A location on Court Street, which is a block away and runs parallel to Smith, seemed a safer bet. “We stood in an area and counted the number of people that walked by at 1 p.m.,” said Fieldbinder. “On Court they had three times as many people, but Smith did have something gritty and a little more interesting.” The edgy environment and a larger store space tipped the scales in Smith’s favor. Dear Fieldbinder opened in August 2005 and sells labels such as Edward An, Deener, Rachel Mara and Rachel Pally. Since opening, concerns over foot traffic have subsided and Fieldbinder has seen significant changes in the customers coming through her door. “We get a lot of tourists now, a lot of Japanese tourists,” said Fieldbinder, a trend she attributes to the store being mentioned on a Japanese blog. Along with having two subway stops on the street, Fieldbinder believes Smith has an advantage over other better-known shopping destinations with its size. “What’s nice about Smith is it’s small. It’s not overwhelming, you can do it in an hour or a little more.” Rick Lee has been in the shoe business for 14 years, including a 10year stint as a buyer and divisional merchandise manager at Barney’s New York. Lee opened Soula in May 2004, one of the few devoted shoe retailers on the street, and has witnessed the explosion of retail and a corresponding increase in the number of tourists in the area. “In terms of the residential situation, there are a few new buildings going Smith up, but it’s more or less Street’s saturated in terms of the newest population,” said Lee. addition. “Now it’s becoming more known to people who live outside of the area.” The most recent addition on Smith is Lucia, selling labels such as Max & Cleo, Collective Clothing and Cloud Nyne with retail prices ranging from $60 to $200. Owner Lucy Banduci and her husband, Ted Dalton, opened their first Lucia location in neighboring Park Slope two and a half years ago after having concerns about Smith similar to those of Fieldbinder. “Three years ago when I was looking to open my first boutique I didn’t necessarily see Smith as a shopping destination because it’s so heavy on the dining,” said Banduci. “But in the last three years the retail that has popped up is mind-blowing. I love shopping in all of them, and I live here and have my own store.” Banduci and Dalton moved quickly to claim a space on Smith when it came up two months ago and moved just as quickly to get the doors open. Lucia opened on Nov. 11 and was packed within minutes of the construction paper being taken down from the storefront windows, said Banduci. “It stayed that way until 8 [p.m.].” Something Else is another example of a Smith Street store owned by a local. Doug Grater opened the store in March 2005, selling contemporary apparel such as Adidas, Puma, Kenneth Cole, Juicy Couture and Seven For All Mankind. Grater’s father opened the first Something Else in Bensonhurst four decades ago. In an interview with WWD shortly after opening the store, Grater said he welcomed the opening of more stores on Smith. “I think it will keep customers on the block and prevent them from going into Manhattan,” he said. “One store is not going to keep them on the block.” Local entrepreneurs have been so successful in raising the street’s profile that major corporations have started moving in, often to the displeasure of those who valued the street’s traditional Italian roots. A new Eckerd’s drug store forced out local pharmacies. American Apparel opened a store this year, complete with bright neon lighting and sexually suggestive marketing. A combination Baskin-Robbins and Dunkin’ Donuts store that opened this summer gave Smith its first helping of fast food. Despite this, Banduci feels the homegrown outfits will continue to have the upper hand. “I find that people who live in Brooklyn, and I’m one of them, they love to support local businesses,” said Banduci. “I think that’s why a lot of them thrive.” — Amy S. Choi — Ross Tucker Here are four hot retail spots in New York. Liz Santiago mixes luxury soaps at CeleBritAy. Williamsburg Beyond Bedford Avenue C CELEBRITAY PHOTO BY AMY S. CHOI; LUCIA BY ROSS TUCKER; MOBAY AND N BOUTIQUE BY TALAYA CENTENO; LYD BY JEANINE POGGI scene ICSC PREVIEW | SCENE WWD, MONDAY, NOVEMBER 27, 2006 9 WWD.COM Harlem: Local Spice and More T Above: Mobay takes soul food a step up. Right: Designer wares at N Boutique. Harlem’s a friendly place…. Harlem welcomes everyone with open arms. “ ” — Gia Hamilton, Denim Library he first Harlem Renaissance had jazz and Langston Hughes. The current renaissance has fashion, restaurants and Mobay. The restaurant sits in the middle of 125th Street between Fifth and Lenox Avenues, inviting the busy pedestrian shopper to stop, relax and — most importantly — eat. Inside, neighbors and strangers munch on soul food such as jerk chicken and curried shrimp. Thanks to the growing sidewalk traffic in the neighborhood, and on 125th Street in particular, Mobay is a financial success. And it’s not alone. The stretch of 125th Street from Madison to Seventh Avenues is the center of activity, with an array of national brands: MAC, The Body Shop, Lane Bryant, Payless Shoes, Taco Bell and Pizza Hut, for starters. But, like Mobay, the real gems of Harlem are the home-grown stores and restaurants — such as the 40-year-old, family-owned soul food institution Sylvia’s Restaurant on Lenox Avenue and 126th. For the off-beat shopper there’s Xukuma (pronounced zoo-kooma) on 125th that features funky housewares, jewelry, accessories and T-shirts, at prices from $4.95 for bronze earrings to $125 for a hand-blown glass decorative bowl. Also on Lenox Avenue is the colorful children’s shoe shop Purple Reign, where shoes sell for $22 to $220. Harlemade is just across Lenox with a wide selection of T-shirts, totes and sweatshirts designed by owner Murphy Heyliger and other local designers. Right off of 125th Street, there’s The Brownstone on Fifth Avenue, “Harlem’s first lifestyle shop.” In business since 1998, the store is housed in a turn-of-the-century brownstone and showcases local ethnic designers’ wares, from “euphoria-infused shea butter” soap to a classy church hat. Prices for apparel range from $35 to $450. The Harlem Business Alliance has made an effort to market new shopping blocks away from the hubbub on 125th Street to places where rent may be more affordable, such as 116th Street and Seventh Avenue, between 135th and 137th Streets. There are several other retail enclaves in South Harlem, like the smattering of stores and restaurants on 116th, including the open-air flea market Malcolm Shabazz Market. N Boutique, also on 116th, sells locally designed jewelry, cosmetics, accessories, housewares, men’s bespoke tailoring (prices begin at $2,000) and a women’s ready-to-wear collection that includes Calvin Klein and Nicole Miller, retailing anywhere from $30 to $150. B. Oyama, on Seventh Avenue at 137th, is run by proprietor Bernard Oyama, who sells elegantly tailored men’s wear. On this block one also can find Denim Library, a denim retailer that has been in business since January. Prices for designer denim such as True Religion and William Rast range from $130 to $400. The retail reawakening of Harlem has been the mission of Harlem shop owners, residents, grassroots organizations such as Harlem Business Alliance and 125th Street Business Improvement District and government nonprofits for years. But their success might not have been possible without the Federal Empowerment Zone legislation. The Upper Manhattan Empowerment Zone, one of nine such zones nationwide set up by 1994 legislation sponsored by a local congressman, was given responsibility for the economic development of select areas in Harlem, East Harlem, Washington Heights and Inwood. In the last 10 years, UMEZ has made “Harlem a more integral part of the New York City economy,” said Kenneth J. Knuckles, its president and chief executive. Now, “125th street is seen as a vital commercial corridor,” he said. The first visible sign of revitalization was the opening of Harlem USA (a retail complex that houses a Magic Johnson Theatre, Old Navy, a Disney Store and New York Sports Club) on 125th Street in 2000. The project was funded by private developers and UMEZ. “It was the first of its kind [in Harlem] and it created 300 jobs.” The crime rate dropped drastically in Harlem and the rest of New York City in the late Nineties. According to Princess Jenkins, owner of The Brownstone, “We’ve definitely seen a reduction in crime….I’ve always felt safe in Harlem as a resident. I’ve never felt threatened.” Gia Hamilton, a shop clerk at Denim Library who was born and raised in Harlem, summed up the sentiment of the developing neighborhood: “Harlem’s a friendly place….Harlem welcomes everyone with open arms.” — Lauren Benet Stephenson Hell’s Kitchen Heats Up With Local Designers H ell’s Kitchen has become so chichi it’s gotten a new name. Once polluted by street gangs and organized crime rings, the neighborhood has since become a haven for sleek shops, trendy bars and ethnic restaurants. “Clinton” is now home to yuppies, artists and Locals love Lyd. the stroller set. The area west of Eighth Avenue between 34th and 59th Streets is hailed as the up-and-coming real estate center in Manhattan. While still peppered with locally owned boutiques, bakeries and restaurants, chain stores and posh hangouts are continuously popping up between these mom-and-pop shops. “When I was first living here I use to find used needles on my stoop,” said Camille Tibaldeo, communications manager of the local Fountain Gallery and a 30-year resident of the ’hood. “Now when I look around there are six or seven Starbucks in my immediate vicinity. Every week if you walk over to Ninth Avenue, there is a new restaurant.” Even though Hell’s Kitchen has always been in close proximity to the Theater District, few were brave enough to venture farther west. Now theatergoers visit the area on a Saturday night after a Broadway show to try one of the many eateries along Ninth Avenue, known as Restaurant Row. The stretch is filled with inexpensive international cuisine, featuring everything from Greek and Italian to West African and Caribbean dishes. Breeze, an upscale Thai and French fusion restaurant located on Ninth Avenue between 45th and 46th Streets, represents the new wave of restaurants in the area. Entrées range between $11 and $21. Mercury Bar & Grill and Social are two of the hip nightspots to grab a beer, watch a football game and chat with friends. Mercury has a relaxed vibe with a mixed crowd of the neighborhood’s newcomers. Social, with three floors offering televised sports games, club Fusion and a rooftop deck, has something for everyone. While the area is predominantly known for its abundance of dining possibilities, apparel and gift shops are scattered throughout. Lyd, run by local stylist Mia Gonzalez, sits on 44th Street and Ninth Avenue. It sells contemporary women’s clothing and accessory lines from New York, Los Angeles and London, while Jane Elissa Atelier, on 46th Street, between Ninth and Tenth Avenues, has a variety of clothing, custom jewelry and home goods. As Hell’s Kitchen gets a face-lift, the area whose main attraction used to be its affordable housing now rents apartments at rates on par with the rest of the city. “When I moved here the area used to be called the Dance Belt, because dancers from the shows use to live here, not only because of its proximity to the Theater District but more so because of its affordability,” Tibaldeo said. “We still have plenty of actors and musicians, but if they haven’t been living here for a while, they still have to find a way to make rent.” The typical apartment, which was once a walk-up tenement, is being replaced by luxury rentals and fancy condos. Though some classic brownstones remain, many of the apartments are like The Orion, a 60-story condo on 42nd Street and Ninth that rents one-bedroom apartments for $3,000 a month. — Jeanine Poggi 10 WWD, MONDAY, NOVEMBER 27, 2006 SECTION II WWD.COM ICSC PREVIEW | NEWS Celebrating Holidays With Art and Relaxation ROOM TO BREATHE Taubman Centers’ Mall at Short Hills in New Jersey has opened the first American Express Members Lounge, providing shoppers a break from mall traffic. The 3,400-square-foot space on the first level of the upscale mall is for American Express card members and offers refreshments, a coat check, rest rooms, couches, giftwrap services, iPod and cell phone charging stations and an e-mail station, all complimentary. “We are focused on creating unique and meaningful experiences for our card members, and the Members Lounge provides a relaxing environment where they can get the services they need during a very hectic holiday shopping season,” said Ralph Andretta, senior vice president and general manager of Membership Rewards for American Express. American Express offers cardholders a reprieve in a New Jersey mall. TIME FOR AN EXPLOSION OF RETAIL Sub Chrono, a manufacturer of high-tech, modern Swiss watches, opened its first New York location at 580 Fifth Avenue and 46th Street. The Tel Aviv-based retailer, which currently only has one other U.S. store, in Miami, expects to open 30 more stores in the country within the next three to five years. The expansion will more than double its portfolio. “They are a very funky, fashion-forward brand,” said Jeffrey Roseman, executive vice president at Newmark Knight Frank Retail, which represented Sub Chrono in the deal. “They are targeting stylish, younger, hipper shoppers.” The next target markets for the retailer include Los Angeles, Las Vegas, San Francisco and Chicago. Sub Chrono currently has 23 stores globally. In addition to its Stateside stores, it operates boutiques in Spain, Israel, Hong Kong, Holland, Mexico and Greece. Chanel towers over Tokyo. ICONIC CHANEL, 10 STORIES HIGH The Chanel Tower in the Ginza district of Tokyo will showcase Israeli artist Michal Rovner through the end of the year — not with a piece within the store, but in the shape of a massive video installation against the exterior of the 10-story tower, which opened in 2004. “Tweed, Tokyo” will project abstract, moving images on a backdrop of the iconic Chanel tweed pattern through 700,000 LED lights in the Chanel Tower. Rovner and New York-based architect Peter Marino, who designed the Ginza building, have installed the similar “Tweed, Osaka” in Chanel’s Osaka boutique. — Amy S. Choi and David Moin Retail Blooms Across Ariz. By Sharon Edelson BEYOND SCOTTSDALE Mall owners and retailers are chasing the population of Scottsdale, Ariz., north with several ambitious projects in various stages of development. Westcor, a division of the Macerich Co., is planning Palisene on 72 acres northwest of Loop 101 and Scottsdale Road. DMB Associates is building One Scottsdale on 120 acres northeast of Loop 101 and Scottsdale Road, and the Thomas J. Klutznick Co. is developing CityNorth with Related Urban Development, a project with 1.1 million square feet of retail space, in North Phoenix near the Scottsdale border. Scottsdale isn’t the only area in metropolitan Phoenix experiencing rapid growth. Glimcher Ventures Southwest and General Growth Properties have zeroed in on Peoria and Glendale, both northwest of Phoenix, where a new Glendale Arena and Cardinals Stadium will be built along with millions of square feet of office space. In addition, new zoning has been approved for more than 40,000 new housing units in the area. Glimcher, which recently sold a portion of its $250 million Parke West project in Peoria to General Growth, has a development and management agreement to oversee the construction and opening of the project. The Parke West site is located at Loop 101 and Northern Avenue in the West Valley, two miles north of the University of Phoenix stadium. General Growth paid $28 million for 46 acres of the future Parke West site. The mixed-use lifestyle and entertainment center will include 356,000 square feet of retail shops and restaurants, a Harkins Megaplex Theatre, office space and an apartment community. The center has lease commitments from Chico’s, White House/Black Market, Victoria’s Secret, Bath & Body Works, PacSun, American Eagle, New York and Co., Fleming’s, Anchor Blue, Brighton Collectibles, Christopher & Banks, Sunglass Hut, Francesca’s, Hot Topic, J. Stephens Shoes and Sandbar Mexican Cantina. “We are excited about the strategic partnership with General Growth Properties and we are in discussions to do a number of future projects together,” said David Glimcher, president of Glimcher Ventures Southwest. General Growth also owns Arizona Center in downtown Phoenix. In Tucson, the company owns and manages Park Place and Tucson Mall. LUXURY BRAVES SIZZLING HEAT IN TUCSON When Louis Vuitton opened its store at La Encantada in Tucson this month, the company joined a small cadre of upscale retailers that are betting luxury sales will blossom in the desert. La Encantada, a 258,000-square-foot open-air lifestyle center, opened in 2003 and is operated by the Westcor division of the Macerich Co. It has about 50 stores, most of them new to Tucson, including Anthropologie, Coach, Cole Haan, Crate & Barrel, Lucky Brand Jeans, MAC and Pottery Barn. Tiffany & Co. opened a unit in the center in October and new stores such as BCBG Max Azaria are to join in the coming months. The Louis Vuitton store carries an array of leather goods from the company’s traditional and fashion-forward collections, including luggage and city bags. The store also features sunglasses and textiles. “We are very excited about the potential of the market and we are confident the local community will be an important customer for this store,” said Philip Corne, president and chief executive officer of Louis Vuitton North America. While La Encantada has attracted a handful of upscale tenants, the majority of well-known luxury brands still elude Tucson. The city hasn’t landed Bloomingdale’s, Nordstrom or Neiman Marcus, and designers such as Gucci, Giorgio Armani, Fendi and Prada have yet to open stores there. Experts said the city may need to grow in population and per capita income for luxury retailers to arrive in serious numbers. Tucson is a small city — its population was 502,100 in 2004 — and seasonal factors come into play. Part-time residents, college students and tourists flee the heat during the summer. While Tucson’s median average income is about $41,000, the average household income for families living within two miles of La Encantada is $121,000, according to Westcor. Census Bureau figures show roughly 6,000 Pima County households report annual incomes of $200,000 or more. Still, companies like Louis Vuitton believe there are enough wealthy travelers and second-home owners to keep the cash registers humming during the height of the season. Tourism, which draws about 3.5 million visitors, is a $2 billion a year industry in Tucson. Four million Mexican visitors spend almost $300 million a year in the city, said the Metropolitan Tucson Convention and Visitors Bureau. 12 WWD, MONDAY, NOVEMBER 27, 2006 SECTION II WWD.COM ICSC PREVIEW | FINANCIAL REITs Roaring on Wall Street Year-to-date stock performance sees 21.7% gain on average. By Arthur Zaczkiewicz Retail REITs in a Bull Run R etail real estate investment trusts have been thundering along in a bull market for a few months, with average stock prices up over 25 percent year-to-date, thanks to improved operating trends and higher demand. The stock gains were achieved despite investors and industry executives squabbling over valuation metrics. Meanwhile, one big Wall Street firm said in a research note that valuations in the broader REIT market could continue to see some gains as companies leverage positive economic trends. In short, it’s a good time to be a REIT. “We believe REITs should deliver more modest returns over the next 12 to 15 months, in the 8 to 12 percent range, based on solid, high-single-digit earnings growth, plus the current 3.8 percent dividend yield and assuming stable multiples,” said Goldman Sachs equity analyst Jonathan Habermann in an industry outlook report. “In our view, REITs should remain appealing to investors given the lower return expectations on the part of institutional investors.” Habermann said he expects REITs to continue to post improved operating fundamentals as well as ongoing demand in key markets. Regarding mergers and acquisitions activity, which have been partly driving valuations, the analyst sees deals continuing through next year. Until then, REITs can celebrate robust stock gains made so far this year. Of the 27 public retail REITs tracked by WWD, the unweighted, average gain of the stocks from the first day of trading this year through Nov. 14 was 21.7 percent (see chart). The shares of 25 firms experienced gains while two, Feldman Mall Properties and Mills Corp., showed declines of 10.7 and 52.4 percent, respectively. Of the stocks that had gains, 20 showed increases of 20 percent or more. The top gainers were Forest City, Saul Centers and Vornado Realty Trust, with increases of 46.5, 46.3 and 42.4 percent, respectively. The bulk of the gainers delivered results more in line with Simon Property Group and Cedar Shopping Centers, which saw increases of around 25 percent. (Year-to-date stock performance) Company (ticker) Closing price on Jan. 3, 2006 Closing price on Nov. 14, 2006 % Change: Forest City (FCE-A) $37.24 $54.54 46.5 Saul Centers (BFS) 36.39 53.23 46.3 Vornado Realty Trust (VNO) 82.88 118.04 42.4 Ramco-Gershenson Properties (RPT) 26.02 36.00 38.4 Kimco Realty (KIM) 31.90 43.70 37.0 Tanger Factory Outlet Center (SKT) 28.32 37.80 33.5 Taubman Centers Inc. (TCO) 34.99 46.50 32.9 Developers Realty (DDR) 46.25 61.12 32.2 Federal Realty Investment Trust (FRT) 60.19 78.70 30.8 Inland Real Estate (IRC) 14.27 18.54 30.0 Acadia Realty (AKR) 19.87 25.62 29.0 Simon Property Group (SPG) 75.65 96.01 26.9 Cedar Shopping Centers (CDR) 13.27 16.60 25.0 Kite Realty Group Trust (KRG) 14.63 18.27 24.9 Regency Centers Corp. (REG) 58.26 72.09 23.7 Urstadt Biddle Properties (UBA) 15.57 19.24 23.6 New Plan Excel (NXL) 22.57 27.65 22.5 In terms of stock investments, the REITs “themselves were at the bottom of the pack as AmReit (AMY) Weingarten Realty Investors (WRI) 37.35 44.85 20.1 a choice except recently. Now it’s been flipped around. Equity One Inc. (EQY) 21.61 25.89 19.8 ” — Richard Moore, RBC Capital Markets Regarding the top performance of Forest City, Maria Maslovsky, analyst of real estate finance at Moody’s Investors Service, said Forest City “is a very good company, but the reason they aren’t talked about as much is that it’s family-controlled and they tend to do large-scale, long-term projects. Ten years isn’t long for Forest City.” The gains made in retail REITs are below that of the entire REIT sector, but ahead of other indices in the market. The National Association of Real Estate Investment Trusts’ Equity REIT index is up over 36 percent for the past 12 months, while the Dow Jones Industrial Average is up about 15 percent and the S&P 500 is up roughly 16 percent. The broader, multisector bull market is attributed to several factors, including a decline in fuel costs, improved consumer confidence and low interest rates. From the perspective of running a big business, current market conditions favor borrowing. And even though many stocks are at 52-week highs, including many retail REITs, investors see fair valuations. On top of all this, c-level executives are more confident than ever. These economic conditions are also the reason why M&A activity is so hot right now. In regard to retail REITs, the sector’s performance in the third quarter was top-notch, and helped boost stock prices higher. Simon Property Group, for example, posted a 27.2 percent gain in third-quarter net income. And since August, the stock is trading up more than 12 percent. Regency Centers Corp. delivered robust results for the quarter, with samestore net operating income, rental rate and funds from operations all up significantly. Since August, Regency’s stock is up over 10 percent. Other retail REITs did similarly well. As stock prices soar, industry analysts and company executives have continued their debate over the best way to value a REIT. Some analysts and companies prefer stock value modeling based on NAVs, or net asset value, while others say it’s better to go with the flow of other sectors and create metrics based on earnings. Richard Moore, managing director of equity research RBC Capital Markets, said REIT stocks are increasingly being treated like issues from other sectors. “In terms of stock investments, the REITs themselves were at the bottom of the pack as a choice except recently,” Moore said. “Now it’s been flipped around.” Macerich (MAC) 6.60 8.07 22.3 66.38 79.88 20.3 Penn Real Estate Investment (PEI) 36.53 39.49 8.1 Glimcher Realty Trust (GRT) 23.60 24.99 5.9 CBL & Associates Properties Inc. (CBL) 39.36 41.15 4.5 General Growth Properties (GGP) 46.61 47.54 2.0 Feldman Mall Properties (FMP) 11.49 10.26 -10.7 Mills Corp. (MLS) 40.73 19.39 -52.4 Average: +21.7* SOURCE: YAHOO FINANCE. *NOTE: AVERAGE IS UNWEIGHTED. Jon Fosheim, chief executive officer and coportfolio manager of Oak Hill REIT Management, said during a panel at NAREIT’s recent annual conference in San Francisco in November that values in the current market are by potential earnings. “But earnings can have a lot of noise in them,” he added. “Not all earnings are the same.” Whether REITs decide to get on the same accounting page and issue more standardized earnings remains to be seen. Meanwhile, REITs are poised for growth, although the retail sector may decelerate. “Within real estate, apartments are showing a lot of growth, and office has picked up. Retail doesn’t look as exciting because it’s very Steady Eddie,” Moore said. “In ’06, retail real estate is going to get its butt kicked relative to other property types, but retail earnings haven’t changed.” In Habermann’s outlook report, the analyst said the valuation gap between publicly traded stocks and the private real estate sector has narrowed. “But there still continues to be strong interest on the part of institutional and foreign investors, as well as private equity capital,” he said in the report. In a research note last week, Ross Nussbaum, senior equity research analyst at Bank of America, said most REITs he met with at the NAREIT conference “do not believe a recession is likely in 2007. Instead, the commonly held view is that demand will remain steady, or slow slightly from levels seen in 2006.” Nussbaum said “new supply is being constrained by higher construction costs, but rising rents in many markets will likely cause more developers to pull the trigger in 2007. REITs with development pipelines are, in almost all cases, firing up the construction engines.” — With contributions from Amy S. Choi Winick. Step up to the best in retail brokerage. 655 Third Avenue 8th Floor New York, NY 10017 212-792-2601 WINTER 2006 / WINICK.COM VISIT WINICK REALTY GROUP AT THE ICSC NEW YORK NATIONAL CONFERENCE & DEAL MAKING, BOOTH 155/156. 1 14 WWD, MONDAY, NOVEMBER 27, 2006 SECTION II WWD.COM ICSC PREVIEW | RETAIL Redefining Top Mall Attractions Shopping center owners broaden their definition of traffic generators to include restaurants and homegrown retailers. Mexican food. There’s the excitement of multicultural offerings. It’s not just the Cheesecake Factory anymore. So many others are offering such exciting evelopers have never had qualms about luring food and drinks.” coveted retailers to their malls with promises of Commenting on what has replaced the Gap and reduced rents and build-out money to pay for store Old Navy, McCann said, “I think there’s a different construction. way of shopping today. People put themselves toFor much of the Nineties, the Gap and Old Navy, gether differently and look at it all. Macy’s is doing which spent millions of dollars on advertising, were a a terrific job since launching nationally. Their custhe recipients of this largesse. In recent years, their tomer service is phenomenal. Sephora and MAC are appeal has waned in the face of fashion miscues and assets.” poor merchandising. Unique outdoor lifestyle stores also add These days, the defining characterisAt Victoria Gardens, an element of excitement, she said, citing tics of sought-after retailers has expanded. Bass Pro Shop acts Bass Pro Shop as “probably the best retailer Businesses that are big consumer attractions as an anchor. for people who love outdoor sports. We have aren’t limited to apparel chains or national a Bass Pro at our Northfield Stapleton mall retailers. They can be popular restaurants, rein Colorado and they’re drawing all the way gional specialty stores or discounters. from Wyoming.” “Everyone is looking for uniqueness,” said Some centers are incorporating performNancy McCann, vice president of marketing at ing arts venues and libraries as anchors. Forest City Enterprises. “A store that’s unique “We’re going to let the Gulf Stream Race has an energy about it and you have a major Track and Casino be the major anchor for us draw.” at the Village at Gulfstream opening in 2008 in John Bucksbaum, chief executive officer Hallandale, Fla.,” McCann said. “At Victoria of General Growth Properties Inc. and chairGardens in Rancho Cucamonga in Southern man of the International Council of Shopping California, we have a performing arts center Centers, said the number of retailers that are and children’s library.” key to a center’s success has “grown tremenMechelle Peters, director of corporate mardously, and that’s all for the better. It’s been keting at the Macerich Co., has different critesuch a strong period for the introduction of ria for retailers in Macerich’s Luminati diviconcepts from already established retailers.” sion, which consists of nine upscale shopping Robert Michaels, president and chief centers. Malls, like retailers, need to reinvent operating officer of General Growth, cited Upscale shops, themselves, she said. “We’re going back and Abercrombie & Fitch, abercrombie, Hollister such as Gucci, changing things at Biltmore Fashion Park in and Ruehl as being “every bit as strong as Louis Vuitton and Phoenix. We have Arizona’s first Calypso bouGap” was in the Nineties. And American Eagle St. John, add a tique. We think Calypso will set the tone for Outfitter’s Martin + Osa and the Spanish relayer of luxe to International Plaza. other edgy stores.” tailer Mango look promising, he said. Among the retail magnets at Macerich cen“We’ve watched Uniqlo for a long time in ters are Anthropologie, Sephora, Apple and Japan,” Michaels said. “They’re very good. We’re Crate & Barrel, Peters said. “Up and comtalking to them about a number of things.” ers are Lucy and White House/Black Market. Some tried-and-true names at the top of They’re big traffic draws.” Bucksbaum’s list include Coach, Apple, J. One area that’s fallen out of favor someJill, Chico’s, Ann Taylor, Talbots, Cheesecake what is home furnishings and home decor. Factory and PF Chang’s. As recently as five years ago, Restoration “Not all retailers are created equal,” he Hardware, the Bombay Co. and Pier 1 were said. “There’s a group of stores that’s imporhigh on leasing agents’ lists. With the housing tant to a center and there always will be. They market chilling, many consumers have shiftwill always change. There’s no question that a ed the focus from their homes back to themretailer such as Gap — and The Limited before selves. it — were important to the success of a project. “People aren’t moving to new homes so They were the leading retailers, so the economthey aren’t that focused on shopping for home ics of those leases weren’t as strong as others.” products,” Taubman said. He added that mall operaThat was a sacrifice malls were willing and are owners can have the upper hand in negotiations. Sometimes a hot restaurant can play the role of tors can’t get too swept up in consumers’ shifting alstill willing to make in exchange for the store’s abila top retailer in terms of attracting shoppers. “At legiances because everything is cyclical. ity to attract consumers. “It’s really about how you put the mix together,” “The Gap itself still does a substantial amount of International Plaza in Tampa [Fla.] we do over $70 he explained. business and is still an important store,” said William million in food sales,” Taubman said. The group of hot retailers has multiplied, Forest City’s McCann agreed. “Restaurants have Taubman, chief operating officer of Taubman Centers Inc. “I don’t know that there’s a singular store the become key anchors in today’s open-air or closed Bucksbaum said, and that’s all for the better. “There way the Gap was eight years ago. The business has centers,” she said. “It’s been proven in research that are many people now that make a center vibrant, so people are eating out four times a week. Food is one our options have expanded tremendously,” he said. splintered.” Taubman now sees a strong focus on contempo- of the great assets to a shopping area. Today peo- “There’s probably less volatility today. That’s one of the rary. “This is an area of the market that’s experienc- ple want wonderful Brazilian food, Asian food and beauties of the business. It keeps things balanced.” By Sharon Edelson D The Village at Gulfstream in Hallandale, Fla., will have 400,000 square feet of retail when it opens next fall. ing expansion,” he said. Retailers in demand include Barneys New York and Cusp, a concept developed by Neiman Marcus; regional players such as Scoop and Intermix, which are expanding to other U.S. cities; and denim brands True Religion, Adriano Goldschmeid and Replay. Taubman said offering financial incentives to lure popular retailers is less customary. “There’s not a lot of space available in the best malls,” he said, noting that when openings are scarce in top centers, mall Victoria Gardens’ dining options include Kabuki and Lucille’s Smokehouse. 16 WWD, MONDAY, NOVEMBER 27, 2006 SECTION II ICSC PREVIEW | ISSUES Select Developers Protect the En in October on the former Denver International Airport Site, is the first retail town center to achieve LEED status. The 1.2 million-square-foot Northfield Stapleton project was given the silver certification based on the use of a sustainable site; water, energy and atmosphere efficiency; use of materials and resources, and indoor environmental quality. Though the development team, led by Jon Ratner and Brian Levitt, kept mum on the premium they paid to develop a LEED silver property, they did hint at the expected returns on the investment, including a cash incentive through a government energy savings program. “We have a triple bottom-line approach,” said Ratner, the company’s director of sustainable initiatives. “We’re not just looking at the financial return of our properties, but also at the environmental and social impact. We look at people, planet and profit.” Northfield Stapleton was built under the LEED Core & Shell guidelines (see glossary on page 9.) But the developer also steered tenants toward more environmentally friendly stores with its sustainability tenant incentive program. The program grants cash incentives and an energy allowance for tenants who achieve certain levels of sustainability. It also offers marketing incentives. Other developers are taking their own baby steps toward LEED. But the up-front costs to build sustainably is halting many in their tracks. “If you can marry what’s good for the environment with what’s good for shareholders, it will work,” said Robert Taubman, chairman, president and chief executive officer of Taubman Centers. “It needs to have an economic incentive and a good return on capital. It can’t just be about good deeds.” Others echo Taubman’s concerns on price. “Green development is at the forefront of all commercial development discussion today,” said Dan Hurwitz, chief investment officer and senior executive vice president at Costs & Savings 20-Year Net Developers Diversified Realty. “But the challenge is finding Per Square Foot Present Value Energy $5.80 a way to do it that is cost-effective so that the returns are Emissions $1.20 commensurate with the investment. We’re not at the point of Water $0.50 doing it yet.” Operations & maintenance $8.50 Resistance to green development may be more to a perProductivity & health benefits $36.90 to $55.30 SUBTOTAL $52.90 to $71.30 ceived fiscal hit than an actual one. Extra cost to build green ($3 to $5) According to The Costs and Benefits of Green Buildings, TOTAL 20-YEAR NET BENEFIT $50 to $65 a watershed report on the costs of green development published in 2003, the average premium for green construction is SOURCE: CAPITAL E ANALYSIS less than 2 percent — not the oft-quoted 10 percent — which translates into roughly a $3 to $5 premium per square foot, depending on the number of green systems in the building. For a platinum LEED certification, which requires the most rigorous sustainability levels, the average premium is 6.5 percent. When talking about a 300,000-square-foot regional mall, this is certainly a steep cost. Ultimately, though, the up-front investment yields considerable savings. Given that green buildings generally use 30 percent less energy than a traditional building, and energy costs are constantly increasing, the reduced consumption translates to an average of $5 per square foot over the life of the property, equal to or more than the average additional cost associated with building a green product, according to the study. Thus, the economic incentive is hefty enough to motivate even the shrewdest developers to move toward sustainability. Simon Property Group, which recently won the National Association of Real Estate Investment Trusts and Environmental Protection Agency’s Leader in the Light award for its energy and natural resource management programs, plans to build at least one of its projects “100 percent green,” said David Simon during a conference call. By Amy S. Choi “We think the cost per square foot will be offset by the savings we may have on uildings are an environmental challenge. They cover green land, devour energy the utility costs. We’ve got a very competent team in this area that is very focused and eat up natural resources from wood to water. Commercial real estate ac- on looking at all sorts of alternative energies,” said Simon. A developer doesn’t have to go LEED crazy in order to better serve the environcounts for nearly 50 percent of all greenhouse gas emissions and energy consumed ment and incur savings, either. Rehabilitating older buildings can be much less in the U.S. annually. expensive than focusing on LEED certification for new development. Malls are among the worst offenders. General Growth Properties, for example, has 210 million square feet of comSlowly, retail developers are changing how they think about the environment, partially because state and local governments are raising the requirements for real mercial space across the country. It is hoping for LEED certification for its planned estate operators — in fact, greening is often more a political reality for developers community in Summerlin in Las Vegas, but has broader plans for its existing portfolio. As part of its Global Green Project, it hopes to reduce its electrical consumption than it is a choice. But most significantly, developers are more interested in building in an envi- by 10 percent, which is equal to the energy consumption of 10,000 U.S. homes for ronmentally friendly way because it protects their bottom line — in addition to the the year and equals $9 million in savings in operating costs. And while much of the technology is expensive, management sees them as necessary outlays. environment. “There are a lot of things we haven’t done because we have felt prohibited by Right now, few developers fully embrace green building, which involves using environmentally responsible construction practices to build high-performance the expense,” said John Bucksbaum, ceo of General Growth Properties. “That said, structures that minimize their use of natural resources and impact on the environ- we look at every option. I won’t allow ourselves to be curtailed only because of ment. However, nearly all developers are considering greening their existing port- economics.” The company has also installed 5.6 million square feet of Sarnafil’s EnergySmart folios and incorporating at least a few green strategies into new properties. Developers are doing everything from replacing traditional lightbulbs with more Roof, a cool roofing materials system designed to minimize smog and global warmefficient LED bulbs to improving their recycling management programs and add- ing and invested $15 million in new HVAC systems to replace inefficient older moding solar panels on rooftops to supplement their energy supply. According to the els. It expects to recycle 50 percent of its waste by next year. Westfield Corp. is debating a solar-power program for its exterior lighting. The U.S. Green Building Council, a nonprofit advocacy group devoted to educating and encouraging developers to use sustainable building practices, the market for green company has already transitioned to a solar program at two centers in California. building products and services hit $7 billion in 2005, a nearly 40 percent increase Westfield has also undergone an interior and exterior lighting retrofit program, which is taking place in 23 centers nationally, with 12 properties completed in from a year earlier. Since 2000, roughly 500 million square feet of new commercial property has been Southern California and New Jersey. Finally, it is piloting a “weather track” smart certified by the USGBC with the Leadership in Energy and Environmental Design irrigation system in San Diego, which processes weather forecasts and adjusts its designation, which denotes a high-performance building that meets certain stan- irrigation schedule accordingly. “The industry is walking the line between environmentalism and cost,” said dards of sustainability. Little of the LEED-certified property is retail. The $7.8 billion Forest City Enterprises is the first of the major retail real estate Bucksbaum. “But I don’t think we can only look at the returns of being green today, investment trusts to go beyond greening their properties and invest fully in green or tomorrow, or one year from now. What is the payback in three years, five years? I development practices. The company’s Northfield Stapleton project, which opened think the most important question is, what is the cost to us if we don’t do this?” Artist Patrick Marold’s sculpture at Northfield Stapleton recycles old airplane parts. Green by the Dollar Finding Green in Green B WWD, MONDAY, NOVEMBER 27, 2006 17 WWD.COM vironment – and Profits Mom, Pop and Wal-Mart Go Green B rooklyn Industries and Wal-Mart Stores Brooklyn couldn’t be any more different from one Industries’ another, but both retailers have made the word Chelsea store “sustainability” their mantra. in New York. Brooklyn Industries got its start designing products out of recycled materials. As it grows its retail business, the boutique design firm is attempting to stay green. Wal-Mart, which became the world’s largest retailer by offering “everyday low prices,” is pushing ahead with a global environmental initiative that involves experimental store concepts in its massive portfolio. How this boutique design company with an edgy fashion line for the hipster set stacks up against the giant of all giant retailers is a study in contrasts. What may surprise is that its sustainability efforts, while vastly different in scale, are not dissimilar in intent. “Our emphasis has always been on artistic creativity, but much of our design coincides with the environmental movement,” said Lexy Funk, president of Brooklyn Industries. “We see our Diametrically opposed to Brooklyn Industries on the fashcustomers willing to pay a premium for both.” ion, retailing, financial, philosophical and cultural spectrum Brooklyn Industries is a baby in retail terms. The brain- is Wal-Mart Stores. The world’s biggest retailer and the counchild of Funk and Vahap Avsar, the Williamsburg, Brooklyn- try’s largest corporate electricity user maintains more than based business grew out of an initial effort designing and sell- 7,000 stores worldwide, just one of which dwarfs the entire ing messenger bags made out of recycled billboards, less out portfolio of Brooklyn Industries. None of Wal-Mart’s traditionof a desire to recycle than to incorporate unique materials al stores are particularly well known for their architectural into their designs. detail or support of local artisans and small vendors. Now it is one of Inc.’s 500 Fastest Growing Private Still, the company that today defines mass consumption Companies of 2006 and boasts an annual revenue of $4.7 mil- and real estate sprawl has launched an offensive for suslion and more than 350 percent growth in the past three years. tainability across all of its business practices, most notably And the recycling concept has stuck. The retailer’s newest real estate. store, in the Chelsea neighborhood of Manhattan, reflects the At the center of Wal-Mart’s push are two experimental company’s current four-R philosophy of recycle, reuse, repair stores, in McKinney, Tex., and Aurora, Col. Both stores utiand reduce. lize solar photovoltaic panels and wind turbines to generate As a several-million-dollar company, compared with the electricity and reduce the pressure on the local power grid $300-plus billion Wal-Mart, Brooklyn Industries can’t af- and have installed compact fluorescent lightbulbs, which ford the rigors of Leadership in Energy and Environmental require less electricity, in the stores. The company has kept Design certification. But it does what it can in the construc- mum on how much it has invested in the real estate, but says tion process, while maintaining the edgy, local focus of the the energy saved by the solar, wind and water systems in the company. McKinney store alone on a normal business day could power The checkout register in its Chelsea store was made from nearly 4,000 American homes for 24 hours. scraps from the company’s own wood shop by Scrap Pile, anAcross its entire real estate portfolio, Wal-Mart plans to other Brooklyn-based design company, while the wall units invest $500 million a year in energy-saving technologies and and merchandising system were built entirely using scraps cut energy consumption in its worldwide portfolio by 30 perand leftover wood from renewable forests in Finland. The cent. The retailer is touting sustainability company-wide and floors were made from wood by a lumber company being cer- has said it will do everything from slashing gasoline use in tified as sustainable by the Forest Stewardship Council, and its trucking fleet and using more hybrid trucks to pushing its are roughly 30 percent more expensive than a traditional vendors to adopt sustainability practices. flooring system. These are all practices abiding by the central Critics point out that, with its massive portfolio, greentenets of LEED philosophy, if not comprehensive enough to ing two stores is hardly enough to address the impact Walqualify for certification. Mart’s real estate has on the environment. Still, it is a 500,000“We can’t do everything we want, mainly because we can’t square-foot step in the right direction. As Brooklyn Industries’ afford it,” Funk said. “A lot of the environmental tactics and Funk notes, “If we can make our stores more environmentally certification processes are very time and capital intensive, conscious in some way, even if it’s just one or two stores a neither of which a small retailer has. But we want to engage year, it’s better than not thinking about it at all.” where we can.” — A.S.C. A Green Glossary Green Anything safely sourced from the environment, whether materials or energy. Green power, for example, is electricity generated by solar, wind or geothermal methods, while green development uses these resources to minimize energy consumption and a building’s impact on the environment. Often used interchangeably with “sustainable.” Sustainable/Sustainability Any system, resource or material that functions or can be utilized and renewed without detracting from the natural environment. Sustainable development, therefore, might use wood from forests that can replenish themselves and aren’t at risk of depletion and install water systems that collect and utilize rainwater as part of an irrigation system that then purifies the water to return it to the environment. USGBC The U.S. Green Building Council is a nonprofit organization of nearly 7,000 member groups devoted to environmentally and socially responsible development of buildings and communities. LEED The Leadership in Energy and Environmental Design designation is offered by the USGBC to high-performance green properties that meet varying levels of sustainability. Approximately 500 million square feet of commercial property is currently LEED-certified at either the platinum, silver or bronze level. Engineers, architects and builders that incorporate sustainability practices into their development can also be LEEDcertified. Core and Shell In a commercial building, the “core” operational systems include heating, ventilation and air conditioning, while “shell” construction includes walls and roofs. Because a retail center requires so many different operators within a single space, mall developers seeking LEED designation often opt for a core-andshell certification, which marks their commitment to sustainable practices in the space that they themselves control. Photovoltaic Photovoltaic panels are able to generate electricity when exposed to either sunlight or some other form of electromagnetic radiation. Often used on building rooftops in order to supplement the energy that the property must draw from the local power grid. Photovoltaic panels capture solar power at Wal-Mart’s Aurora, Colo., experimental store. Wind Turbine The machinery used to harness wind energy. Turbines are often placed on rooftops or in parking lots and used either to alleviate the property’s drain on the power grid or to fuel irrigation and other sustainable systems on the property. — A.S.C. 18 WWD, MONDAY, NOVEMBER 27, 2006 SECTION II WWD.COM ICSC PREVIEW | LUXURY Leveraging Relationships How a real estate consultant taps sources for market intelligence. By Arthur Zaczkiewicz NEW YORK — The offices of PBS Realty Advisors LLC are buzzing with energy. Real estate deals are wrapping up, while others are just getting started. Down the hall, several executives huddle together discussing clients and recent business trends. Laura Pomerantz is the one balancing a BlackBerry, cell phone, stack of papers and a cup of peppermint tea in her arms. “The tea gives you energy,” Pomerantz said, smiling. “Not like I need more energy.” Indeed. Pomerantz, principal and founding partner of the six-year-old company, is bursting with energy. Just ask her clients, which include firms such as Bloomberg LLP, Abercrombie & Fitch, Giorgio Armani and David Yurman, among others, many of them luxury fashion retailers. She’s on the job — thumbs and fingers working furiously on her BlackBerry — from about 7 a.m. until 10 p.m. “I get about 200 e-mails a day,” Pomerantz said. “And it’s not spam. These are clients and sources with whom I’m in contact. I have to respond.” And there’s the key to the success of PBS: The company works hard to develop and nurture longterm relationships with clients. For Pomerantz, this not only means building valuable industry sources, but having the power to tap these sources for market intelligence. “There is no one who she can’t get on the phone,” said Betty Ende, senior managing director at PBS. Pomerantz has more than 4,000 contacts in her virtual Rolodex. PBS, headquartered at 230 Park Avenue here, offers full-service real estate consulting in a variety of disciplines including office, retail, distribution centers, acquisition and disposition. Before founding the company with John Brod and Morton Schrader, Pomerantz honed her real estate management skills at brokerage Newmark & Co. and landlord S.L. Green. Prior to that, Pomerantz served as executive vice president at The Leslie Fay Cos. Inc. Although Pomerantz has been in the real estate business for more than a decade, she’s not the typical broker or consultant. Before meeting with a client or potential client, Pomerantz does a lot of homework, including compiling marketspecific data such as competitive analysis, street locations, mall locations and consumer demographics. “Our job is to be very familiar with different markets and the level of consumers there,” Pomerantz said. “We also know what is in the development pipeline in those markets.” Her ability to create forward-looking market analysis also sets Pomerantz apart from the competition. “It enables clients to strategize a market,” Pomerantz added. Building strategy also takes time — and space. “The first thing I ask a client is how big their conference room table is,” she joked. “I ask, because I then make a presentation to them that fills the entire table.” Pomerantz avoids PowerPoint presentations for a more personal, interactive approach with clients. Her presentations are designed to promote a lively discussion with the client. For example, on this particular day, she was working on a presentation pitching a retail expansion plan for one of her fashion clients, who asked to remain confidential. Pomerantz spread a poster-size map of the U.S. across the conference table. The map included the client’s current retail locations as well as the competition, and possible future sites. Along with the map, Pomerantz and Ende had a printout of more detailed market data, including shopping centers, retail districts in cities and malls where the client might fit in well. Laura Pomerantz and Ende then rolled up their sleeves and went to Pomerantz work analyzing each street mall, weighing the pros and cons of expansion. “A good part of what we do is detective work,” Pomerantz said. Clients also often come to PBS to dispose of stores. Pomerantz empathizes with retailers going through an asset disposition. It can be an emotionally taxing experience for all. But Pomerantz reassures them that they are “doing the right thing, and the resources can be deployed more productively.” “Companies need to be constantly pruning their real estate,” she said. “You need to try new things and take risks. It’s how a company grows.” Pomerantz admits the business can be stressful. The phone keeps ringing, and in 45 minutes, she received more than 35 e-mails. “There are many frustrating days, but overall, it has been good, and I feel extremely fortunate,” she said. The frustration is far from enough to stall the company’s growth. In August, PBS was named a partner of Oncor International, which is the fifth-largest real estate network in the world. Last month, Oncor was acquired by Realogy Corp., the largest real estate firm in the world. The partnership with Oncor effectively extends PBS’ reach in the global market. In addition to running her business, Pomerantz is committed to the arts and the local community. Her philanthropic work includes serving on the board at Carnegie Hall as well as the Richard Tucker Foundation. At Carnegie Hall, Pomerantz chairs the special events committee, which includes a fund-raiser aimed at offering affordable tickets to lower-income families. EDITOR’S NOTE: On the Job with Laura Pomerantz is the first in a series of stories where WWD goes behind the scenes — in corporate offices, on trade show floors and in the market — to profile a notable industry executive. Luxury Retailers to Increase Global Expansion By David Moin T he luxury business keeps rolling along, although not without some potential bumps in the road. Executives see a dip in sales gains this year and aren’t quite so bullish about expansion, according to a survey commissioned by the Lumenati division of The Macerich Co. and completed in October. The luxury sector is still very healthy, and executives are upbeat because of the rising stock market, higher corporate profits and consumers who are increasingly seeking better quality products and are trading up. However, the findings suggest there is a bit of caution in the air. Macerich selected senior luxury executives to participate in a wide-ranging online questionnaire conducted by the Behavior Research Center of Phoenix. Forty-five companies responded, including Burberry, Ferragamo, Godiva, Gucci, Jimmy Choo, Kate Spade, Theory and True Religion. Among the key findings: ● Overexpansion has become an issue. Fifty percent of the respondents said some luxury brands have diluted their value with too many locations; 27 percent disagree and 23 percent said they were unsure. ● Those who are expanding in the U.S. project an average of 19 openings next year, compared with the 21 that were planned in 2006. However, international expansion will be up by 20 percent. Gucci participated in a survey on ● On the East Coast, 42 percent of the growth in the luxury sector. The respondents said they anticipate one to three findings suggest some brands have openings in the region next year; 16 percent, scaled back expectations.. four to five; 9 percent, six to 10, and 11 percent project 11 or more. Twenty-two percent of the respondents see no openings. ● On the West Coast, 52 percent of the respondents said they would open one to three stores next year; 16 percent, four to five; 7 percent, six to 10, and 9 percent predict 11 or more. Sixteen percent said they would not open any new units. ● In the Midwest, 47 percent of the respondents foresee one to three openings; 11 percent, four to five; 2 percent, six to 10, and 7 percent, 11 or more. Thirty-three percent see no openings. Factoring into expansion plans is the outlook for sales growth, which slips to 12.8 percent this year from 14.9 percent in 2005. The fourth quarter will also take a dip, with sales seen rising 11.9 percent this fiscal year, compared with 14.6 percent a year ago. Luxury retailers said the biggest potential boon for holiday sales would be a continued upturn in the financial markets. The stock market has been strong and big Wall Street bonuses are expected, which could influence holiday spending before the bonuses actually get distributed. Other major factors affecting holiday sales in the luxury sector are decreasing oil and gas prices, which were cited by 29 percent of the respondents; a reversal of the slowdown in home sales and construction, cited by 16 percent, and a reduction in Middle East turmoil, cited by 9 percent. The big story of 2006 was consolidation and changes in the department store sector, notably the Federated-May merger, which the luxury executives view as proceeding smoothly and resulting in placing a lot of real estate in play. Another big development was the sale of the Neiman Marcus Group to Texas Pacific Group and Warburg Pincus. One executive was quoted as saying, “The successful consolidation of Federated Stores with May Company has allowed developers to redeploy unproductive space in malls, spurred the development of outdoor environments to accommodate additional lifestyle tenants...and helped differentiate the top centers from the middle-of-the-road, junior-oriented properties.” Point of Contact Find a new kind of flexibility. At Newmark Knight Frank Retail, we connect with our clients, providing retail brokerage services that flex to fit your company’s needs. With strong relationships toned by trust and continual results, we can help you select retail locations that bring you closer to harmony in mind, body and profit. www.newmarkkf.com/retail 20 WWD, MONDAY, NOVEMBER 27, 2006 SECTION II WWD.COM ICSC PREVIEW | MARKETS Black Gold Transforms Calgary Wealth, employment and a hunger for style surge as the oil industry reinvents this pioneer town. By Mina Williams Uptown 17th Avenue provides an alternative to Holt Renfrew, below. Below left: Just one of the new projects in Calgary. PHOTOS BY MINA WILLIAMS CALGARY, Alberta — Snuggled into the leeward side of the Canadian Rockies, surrounded by cattle ranches and fields of soybeans, Calgary appears to be the sort of city where boots and beer are more de rigueur than Burberry and burgundy. The discovery of oil and international investment in the energy sector, however, have not only boosted employment and spurred retail sales growth, but opened the prairie’s fashion horizon. Pipeline, energy production and distribution companies are just a few of the businesses that have flocked here as the economy grows by leaps and bounds with each new energy source unearthed. The city boasts the highest number of corporate headquarters in Canada, up 37 percent between 2000 and 2004, according to Calgary Economic Development. This surge has spurred retail sales: Average annual retail sales growth is slightly more than 8 percent, outpacing Calgary’s nemesis, Edmonton, at 6.8 percent, and the center of Canada’s economic universe, Toronto, at 5.9 percent, according to Statistics Canada. Housing prices have surged 50 percent, according to the Calgary Real Estate Board. Cranes can be spied from almost every vista around Calgary. Mixed-use, retail and condominium properties are emerging in the downtown core, in close-by neighborhoods and in the suburbs. The Hotel Arts Building in southwest Calgary epitomizes the sizzling construction scene. This $100 million, 65,000-square-foot redevelopment project combines a three-story office and retail structure with a 40-story, 200-unit residential tower above and two levels of underground parking below. Real estate developer John Torode is overseeing this project and another just a few blocks away, the Arriva, a 34-story tower of residences, retail and office space, and restaurants. Torode plans a 450,000-square-foot hotel and office project just west of Arriva, and another mixed-use project, Ramsay Crossing, of 3 million square feet. “With the development downtown, in particular with office space, Calgary is firing on all cylinders,” says Adam Legge, director of research and business information of Calgary Economic Development. “The energy sector is the dominant driver fueling job growth, income growth, wealth and opportunity for personal consumption. We are seeing this trend creating growth in the retail segment. Just when you think you have enough retail space, another project kicks off.” A market report by real estate broker CB Richard Ellis states that more than 2.7 million square feet of retail space is currently under construction in Calgary. The booming economy has created a new group of Calgarians who want fashion and are so hungry for it they are traveling to New York or Palm Springs to shop. There are some stylish offerings in Calgary. Holt Renfrew is the fashion Mecca of the Canadian prairie. Located in the Core, downtown’s mall complex, this trilevel emporium is part of a nine-unit, high-end chain with stores throughout Canada. The Calgary unit offers Burberry, Prada, Gucci, Armani and Michael Kors in women’s clothing and Loro Piana, Paul Smith, D&G and Ralph Lauren in men’s. It also offers Max Mara, DKNY, Theory and Elie Tahari. The shift in the Calgary market has caused Holt Renfrew to expand the number of luxury designers it offers. “The business has changed drastically as more aspirational customers are coming through our doors in search of both fashionforward and classic luxury merchandise,” said Barbara Atkin, fashion director for the Toronto retailer. “There is no price resistance.” “This is a younger, more fashion-aware crowd,” she continued. “It’s new money and those customers want to spend on the best brands available. They want to enjoy the momentum.” This is especially true downtown, where polished twentysomethings duck into shops and nearby restaurants. In Calgary’s downtown mall, independent retailers showcase labels of Façonnable, Hugo Boss, Canali, Armani and Ermenegildo Zegna, and Stuart Weitzman heels show up throughout. Restaurants dominate many of the storefronts around the Core. Trendy Belgo and the Tribune are popular, but Calgary also strongly supports casual restaurants and pubs such as Earls, Cactus Club Café and Joey Tomato’s Mediterranean Grill. Calgary neighborhoods offer high-end furniture stores, home furnishing boutiques, accessories and custom appliance stores. The area surrounding Uptown 17th Avenue Southwest, just south of downtown, holds the most promise for contemporary fashion seekers. Sleek and sporty shoppers, clad in Msiamo, strut the street munching on Bernad Callebaut truffles. Boutiques nod to Canadian designers such as Vancouver’s Catherine Regehr, and international selections come from Versace, Luisa Cerano and Annette Görtz. Other shops, like Primitive, target a younger audience with Nicole Miller, Stella Forest and Filippa K. “Uptown 17th has always been the popular place to come to,” explains Clare Edwards, owner of the upscale boutique Park Avenue. “The main change in the past couple of years has been the shift away from the shopping village concept, with a collection of independent retailers under one roof, to more boutiques that have actual storefronts. The economic boom has also brought new people into Calgary that are just now learning about the neighborhoods.” As a result, retailers report they are just now seeing real sales growth in the fashion sector. “They have decorated their homes and now they are looking for fashion,” said Edwards. “This fall has been very good for us.” Calgary’s suburbs are filled with typical shopping malls, including North Hills Shopping Centre in the northwest section, Chinook Centre in the southwest and Avenida Shopping Centre and Southcentre Mall in the southeast. These shopping spots are anchored by Sears and the Hudson Bay Co. and house moderate retailers such as Banana Republic, the Gap and Roots. Still, certain factors prevent this oil-boom town from opening its arms to designer outposts. First, Calgary real estate owners enjoy a vacancy rate hovering around 2 percent, according to CB Richard Ellis. This is creating a tight situation for shop owners trying to break into the market. Rental rates are reaching the point of “pushing the boundaries of what is economically viable and we are experiencing…some resistance from tenants,” said the company. Rental rates at regional shopping centers range from $30 to $100 per square foot. And despite the forward-moving population, fashion items and luxury goods are not being wholly embraced by most of the residents. “The problem in Calgary is not the lack of income,” explained Philip Boname, president of Urbanics Consultants, a Vancouver company that specializes in regional shopping center studies. “Calgary still has a frontier town mentality.” In short, most residents prefer backyard barbecues and comfort to fine dining and fashion. But clearly, Calgary has been changing during the last two years of the oil boom. Boname predicted that the relaxed culture would change. “The casual inclination will change, particularly downtown,” he said. “There will be more high-end shops looking at the heritage buildings and the streets flanking pedestrian malls will have a transformation. There will be a boom in retail as well as high occupancy and high rental rates. “Calgarians are enormous travelers,” Boname added. “It is nothing for them to buy haute couture out of town. There is a huge outflow of dollars that could be captured.” Reach further... | Providing principal to principal senior level real estate services in 220 markets & 5 continents UNITED STATES, CANADA, DENMARK, FRANCE, GERMANY, INDIA, AUSTRIA, RUSSIA, CHINA, AUSTRALIA, UNITED KINGDOM, JAPAN, THE NETHERLANDS, MEXICO, AFRICA, ITALY, SPAIN, SWITZERLAND, CZECH REPUBLIC, BELGIUM, POLAND, NORWAY, SWEDEN, FINLAND, HUNGARY, BRAZIL, CHILE, ARGENTINA, IRELAND Our clients include: A b e rc ro m b i e & F i t c h Laird + Partners R u eh l A m e r i c a n A p p a re l Li z Cl ai bor n e Saks Fi f t h Av en u e D a v i d Yu r m a n Mar i t h é & Fran coi s Gi r bau d St ev e Madden Ecko Unlimited Mov ado Grou p, I n c. St u ar t Wei t z man Eileen Fisher Nat or i Ted Baker E l i e Ta h a r i Os h Kos h Ti mber l an d F l o rs h e i m Pay l es s Sh oes Tod’s Fo re v e r 2 1 Pet i t Bat eau Tor y Bu rch Giorgio Armani / Emporio Armani R af ael l a T SE Please call for more information: 212-672-2000 Laura Pomerantz • John Brod • Mort Schrader PBS Realty Advisors LLC 230 Park Avenue 18th Floor N e w Yo r k , N Y 1 0 1 6 9 www.pbsra.com 22 WWD, MONDAY, NOVEMBER 27, 2006 SECTION II ICSC PREVIEW | INSIDE LOOK Penney’s Progress: Expansion an National retailer’s aggressive growth strategy looks beyond the mall, without abandoning it, in an effort which it plans to open stores, with 20 percent of the units located in communities with populations of 80,000 to 100,000 that it says are under- or unserved by mid-tier .C. Penney Co. Inc. understands that enticing busy consumers who crave acces- retailers and that also are poised for growth as more middle-income consumers relocate seeking more reasonable costs of living. sibility begins with making decisions on location and size. So far this year, Penney’s has opened 28 stores, including 23 off-the-mall stores, Those are starting points in Penney’s multipronged drive to become the domi17 of which were freestanding units, nant midtier U.S. retailer, targeting the with locales in smaller communities powerful demographic of women ages 30 such as Dardenne Prairie, Mo.; North to 54 with household incomes of $35,000 to Conway, N.H.; Olean, N.Y.; South $80,000. Jordan, Utah; Murfreesboro, Tenn., and Penney’s, which posted sales of $18.7 Trussville, Ala. The majority of new billion in 2005, is on a streak that saw stores are in the top 20 U.S. population third-quarter earnings beat Wall Street esmarkets, including areas around Dallas, timates. Management said the chain will Chicago and Denver. meet growth targets for 2009 by next year. About 80 percent of the new stores The company’s almost 1,000 units at malls will go into markets that typically have across the country are in the midst of a re“populations in excess of one million vitalization effort that aims to put a fresh people and individual store-trade area face and new attitude on Penney’s doors, population in excess of 300,000 people,’’ including new Sephora boutiques frontDastugue said. “About 50 percent of the and-center as the chain reenters beauty in — Myron E. Ullman 3rd, J.C. Penney Co. Inc. large stores will be in the top 20 metroa big way. politan markets....Clearly, adding multiThe retailer is also looking beyond the ple stores in large markets provides the mall with a broad move into new territory opportunity to gain market share’’ and — freestanding stores in previously unleverage expenses. tapped areas of the U.S., including comPenney’s executives have said the munities of fewer than 100,000 people that company will continue to acquire mallare near major population centers. based stores in attractive locations It’s part of an accelerated growth stratwhen opportunities arise. For example, egy led by chairman and chief executive Penney’s plans to open a 150,000-squareofficer Myron E. “Mike” Ullman 3rd, who foot store in Main Place Mall in Santa has said that Penney’s plans to spend more than $3 billion and open 150 stores during the next three years — mostly offthe-mall. “We have a unique advantage in that our off-mall department stores provide a neighborhood presence that offers convenience and accessibility for midweek shopping while complementing our mall stores, which continue to be a weekend and holiday shopping destination,” Ullman said. He noted that the chain had embarked on its most aggressive store-opening program in more than 25 years. Penney’s has concluded that off-the-mall stores make sense given that new shopping center construction has stalled. In addition, consumers have expressed the desire for a faster and more focused shopping experience that’s close to home, easier to navigate than a big mall and even equipped with Internet kiosks that link Penney’s $1 billion Web site to its stores. In essence, the 1,037-unit Penney’s is bringing its stores closer to shoppers’ homes and highlighting shoppers’ lifestyles in its merchandising mix. “Off-the-mall stores are a very integral part of our new-store growth plan,” said Michael Dastugue, senior vice president of property development. “There are so few new malls being built in the U.S., and we want to be located where our customers live and want to shop. It’s part of our plan to focus on our customers’ lifestyles.” The freestanding stores represent a model that is expected to shape the future, though Penney’s is by no means turning away from mall-based business. The company now has 45 off-the-mall stores. Executives said the chain intends to grow sales and gain market share by opening in regions with rising populations and those with high growth potential. “The whole off-the-mall concept as it relates to department stores really has great value to consumers and to businesses,’’ said Alan Shor, founder and president of The Retail Connection, a consulting firm in Dallas. “There are very few malls being built and there’s so much retail consolidation going on at the malls that are out there that off-the-mall stores become even more viable options. It’s a great way for retailers to grow their businesses and [it] creates a new avenue of reaching consumers.” Penney’s plans to spend about $250 million annually through 2009 for existingstore renovations that will create better lighting, wider aisles, Internet kiosks, centralized service and checkout areas, more enticing and focused trend presentations and a focus throughout on customers’ lifestyles, from home to fashion. The retailer’s mall-based stores average 150,000 to 200,000 square feet compared with 100,000 square feet for freestanding units. The chain has designated more than $1 billion a year from 2007 to 2009 for capital improvements, including $600 million for new-store construction, $75 million for technology and $75 million for direct logistics — along with the renovation expenditures. The long-range goal is to have 75 percent of the chain’s stores new or renovated by 2009. Penney’s revved-up construction and renovation program is expected to have a net effect of about 3 percent square footage growth per year Sephora boutiques are a starting in 2007. major Penney’s initiative. Penney’s has identified 400 under- or unserved markets across the U.S. in By Rusty Williamson J Our off-mall department stores “provide a neighborhood presence that offers convenience and accessibility for midweek shopping while complementing our mall stores. ” WWD, MONDAY, NOVEMBER 27, 2006 23 WWD.COM d Renovation Performance of J.C. Penney Gets Noticed on Wall Street to best serve consumer needs. Ana, Calif., a takeover of a former Robinsons-May unit. “Our in-house research department studies U.S. markets and demographic trends and helps guide us in our choices of which markets to enter,” Dastugue said. “We also work closely with real estate developers across the U.S. — and sometimes they come to us first asking us to be the first tenant in a planned lifestyle development or shopping enclave. “We’ve also gotten the reputation of being first to the playing field and tapping into underdeveloped and/or unserved markets, so now we’re also getting calls from other specialty chains asking us which areas of the country or which particular part of a city we might be interested in,’’ he said. “They want to follow our initiative, which reinforces our leadership mind-set.” Penney’s main off-the-mall format is on a single level that places women’s apparel, including several new private brands such as Ambrielle lingerie and East 5th ready-to-wear, front and center, just behind the approximately 2,000-square-foot Sephora beauty boutiques located at the front door — just as they are at Penney’s mallbased stores. Penney’s has also recently installed almost 40,000 point-of-sale terminals that are linked to its Web site jcpenney.com, which generates more than $1 billion each year. The off-the-mall stores generate higher sales per square foot than mall-based stores and also register more frequent customer visits. Penney’s off-the-mall stores can generate as much as $250 per square foot after one fiscal year, compared with $157 per square foot average for all stores, including mall-based units, up 23 percent from five years ago. “Our excellent results over the last three years have given us the confidence that our new-store program can be dramatically expanded to generate profitable growth at J.C. Penney,’’ Dastugue said. “The acceleration of growth at J.C. Penney moves us up to a position of leadership with the department store industry.” J.C. Penney Store Openings, 2006 By Vicki M. Young R eaching its long-range targets two years ahead of plan has made shares of J.C. Penney the turnaround story and holiday pick for 2006. It expects to hit its goals by 2007 instead of 2009, and Wall Street is lauding its accomplishments both in its real estate portfolio and in sales. According to Citigroup Global Markets analyst Deborah Weinswig, who has J.C. Penney as her top choice for 2006, the retailer experienced a lift prior to the Macy’s national relaunch this September, given the disruptions that took place in the former May stores last year. She added that the company met its plan to open 28 new stores in 2006, and plans to open 50 more new stores each year in 2007, 2008 and 2009 in mostly off-the-mall formats. As for the new stores this year, she said they all showcased upgraded features intended to make the retailer an “easy and exciting place to shop with visually appealing displays to showcase merchandise...and appearance elements that highlight specific brands.” On Nov. 9, the Plano, Tex.-based retailer posted a third-quarter net income gain of 23 percent to $287 million, or $1.26 a diluted share, from $234 million, or 94 cents, in the same year-ago quarter. Analysts had the company pegged to earn $1.23 per diluted share. Operating profit rose 24.1 percent to $504 million from $406 million last year. Sales rose 6.7 percent to $4.78 billion from $4.48 billion. Same-store sales showed an increase of 5.2 percent, while Internet sales jumped 27 percent. Bear, Stearns retail analyst Christine Augustine wrote in her research note that Penney’s 5.2 percent comp gain was “well-ahead of the low-single-digit plan for the quarter.” Sales of footwear, women’s accessories and fine jewelry primarily led the way for the period. She revised her fourth-quarter earnings per share estimate to $1.96 from $1.89 and her full-year 2006 estimate to $4.85 from $4.76. Augustine noted that by 2009, about 75 percent of the company’s store base, which represents 90 percent of sales and operating profit, should be new or renovated. As for the newer stores opened or planned, the “off-mall stores cost more to build but are more productive than the mall-based stores, generating higher sales per square foot than J.C. Penney mall stores and are tracking to over $250 sales per foot by maturity [5 years].” JP Morgan analyst Charles Grom wrote that J.C. Penney is firing on all cylinders following a very strong third quarter in which earnings per share rose 34 percent yearover-year on top of an 89.4 increase last year. While Grom mostly liked what he saw from the company reports during its third-quarter conference call, he cautioned that for the “third consecutive quarter, [the retailer] beat its revised outlook just a week after its final update. This may come back to haunt [J.C. Penney] down the road when this trend doesn’t repeat itself.” To be sure, J.C. Penney isn’t the only retailer that posted strong third-quarter results. It competes with main rival Kohl’s Corp. in many of the same geographic and merchandise markets. “Kohl’s continues to fire on all cylinders across all categories. We expect top-line momentum to continue into the fourth quarter,” wrote Adrianne Shapira, analyst at Goldman Sachs. On Nov. 9, Kohl’s posted a 44.7 percent increase in third-quarter earnings, driven by new store growth and demand for improved merchandise. Income surged to $224.5 million, or 68 cents a diluted share, from $155.1 million, or 45 cents, in the year-ago period. Sales jumped 16.6 percent, to $3.64 billion from $3.12 billion, while total samestore sales rose 8.5 percent. Piper Jaffray analyst Jeffrey Klinefelter believes that consistent storewide performance increases visibility for earnings growth going forward, adding that market share gains are driven in part by a growing brand portfolio. Still, Bear, Stearns’ Augustine believes that shares of Kohl’s are fairly valued and noted that with earnings and square footage growth likely decelerating to the midteens in 2008 and beyond, the stock might not warrant its historical premium to 25.2 percent versus the market on a three-year basis.
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