Hitha Prabhakar

Is luxury back? Coach beats estimates with 2Q earnings

(A luxury obsessed consumer. Picture courtesy of Racked.com)

Coach reported better than expected profits today. Net income rose to $303.4 million, or $1 a share up from $241 million or 75 cents in 2Q of last year. Sales rose 19% to $1.26 billion and the company expects sales and profit to increase at least 10% through 2011. In addition, Coach plans to repurchase close to $1.5 billion of shares by June 30th, 2013.

With those kind of numbers it's hard not to seriously wonder if the luxury retailers are finally back. Or is it?

Mike Tucci president of Coach's North American retail division credits three main reasons for strong sales during the holiday season: product performance, digital strategy and progress on the new mens intiative. Tucci specifically notes Coach.com is the fastest growing full price channel in North America and experienced double digit growth during the holiday season. "We will continue to use digital capability as a touch point for the customers," he said on the earnings call. So what are some of the pitfalls for Coach? For one, gross margin estimates missed the street's expectations coming in at 72.4% compared to 73.2% due mostly in part by an increase in sales at their lower priced outlet stores. Second, Coach's market share in Japan continues to contract. But, with expanding market share in China (Frankfort referred to China as "our fastest growing business.") and a potential move of production to lower labor cost countries such as India, Coach may still see some bright days ahead in 2011.

Coach wasn't the only luxury retailer to report stellar earnings supported by significant growth in China. Burberry reported a 36 percent increase in sales reflecting the deal to take over 50 stores from the retailer's Chinese franchise partner. Likewise, the new "digitally enhanced" flagship store in Beijing drove significant traffic. "There is an underlying growth in the Chinese luxury sector anyway, but the main driver has been making sure our stores are properly stocked," said Stacey Cartwright, chief financial officer. "Previously, lean levels of inventory meant a lot of sales were walking out the door."

Luxury conglomerate Richemont reported a 7 percent increase in sales (omitting currency fluctuations) to $2.29 billion beating analysts estimates. The Asia-Pacific region accounted for 31 percent of Richemont's sales during the quarter.

It's difficult to ignore numbers like that especially when Consumer Confidence Index rose 7.3 points to 60.6. Feeling better about the economy mixed with a little "frugal fatigue" may be the exact combination luxury retailers need in order to have a full recovery. With that said, there is a Chloe handbag AND a pair Christian Louboutin heels that I've been eyeing for months now. 18 months to be exact.

The REIT stuff: Dillard's to get into the real estate biz

On the heels of reporting promising numbers for 3Q 2010 (net income was $14.4 million at 22 cents a share up from last year's $8 million at 11 cents a share) Dillard's ($DDS) announced today they will be moving into the real estate business.

Now, before you start thinking that makes no sense whatsoever, real estate investment trusts (REITs) come with tax benefits that do not exisist in other corporate structures. In a Security and Exchange Comission filing the company explained that forming a REIT might enhance its ability to access debt or preferred stock, which will enhance liquidity, indicating that Dillard's may be a) going to start expanding into new stores or b) re-vamping the already existing stores.

The retailer has hit numerous stumbling blocks in the past and was pretty much written off by Wall Street until 2007 where they launched a massive clean up effort. Management (mostly comprised of members of the Dillard family) started cutting underperforming stores, took a disciplined approach to inventory management, and started stocking the stores with better merchandise. Instead of trying to compete with retailers such as Kohl's ($KSS) Dillard's started to position itself as somewhere between a Macys ($M) and a Nordstrom ($JWN).

"Going into the REIT business is a genius move," says Jeffrey Roseman executive vice president of Newmark Knight Frank a New York commercial real estate broker. "It's like the age old notion that McDonalds isn't in the burger business, it's in the real estate business. This is just another way the retailer is able to increase income on their balance sheets apart from the sale of apparel."

According to thier annual report, Dillard's owns 241 of the 309 stores, roughly 78% of their doors.

Why the "Man-cession" is over.

No, I'm not talking about (from what I hear) the lack of dating options for the single ladies here in NYC, sillies. I'm talking about how men are getting back out there and shopping! According to an October survey conducted by BIGresearch, men plan to spend about 3 percent more than they did in 2009; women plan to spend about 1 percent less. On Black Friday of 2010, men spent on average $100 more than women- about $417 during the weekend (source: NRF). Why the surge in spend? Well, men are overall more optimistic about the economy. They feel overall that their finances will improve, while women are a bit more pessimistic. Two years ago (right when the recession began) both men and women were equally pessimistic. What's exciting is seeing retailers respond to the surge in male shoppers. $JCP and $SKS reorganized their menswear sections trying to appeal to the male 25-45 demographic. $SKS generates 14% of its sales from the mens department and $COH is also getting on the band wagon-- they opened two stand alone mens stores stocked with $198 messenger bags and $798 jackets. And PS, those items are pretty much sold out. Above is my segment on CNBC's "Power Lunch" talking about the return of the male...

Speaking of $JCG...

In the wake of their Saturday deadline, J.Crew recieved no additional takeover bids during their "go shop" period a provision that is frequently included in leverage buyout deals (the deadline for other potential companies to throw in their hats was on the 15th). Well today, the retailer announced they would be extending the deadline to February 15th for other/rival bids and to settle a shareholder lawsuit. As it stands, TPG Capital and Leonard Green have been the only ones to come to the table so far with a $3 billion offer. There was some talk about $SHLD and $URBN possibly throwing their hats in (it was reported by DealBook both retailers had signed confidential agreements to study J.Crew's books during the solicitation period) but it was unclear whether they were seriously considering counteroffers.

J.Crew vs. Jack Spade: Which is more "new dad" gift worthy?

My best friend just had a baby. And while I've been busy purchasing cute clothes for him and fun mommy items for her, I sort of forgot about her amazing (and also a dear friend of mine) husband who is putting in double duty as diaper changer, baby feeder and nerve calmer. I know! I'm the WORST.

So you can imagine how psyched I was when the Jack Spade Spring 2011 look book crossed my path/in box today. For me, Jack Spade has always been the go to stop for all things hip-male/ perfect gift source for a new dad who fits the former description. With that said, I was compelled to check out www.jcrew.com since I've had $JCG on the mind for the past four weeks. Hate to say it, but I think $JCG is encroaching on Jack Spade's market share of snazzy man bags and tailored over coats. Check it:

This Waxwear-Pocket Brief looks like can double as a work and baby bag. It's on the high budget side ($365) but what a great design, no?

My friend's husband does want a coat. This Herringbone Field Coat at $525 seems appropriate for a southern California winter.

I think new dads are in need of new shirts as much as moms. While I don't think my friend's husband will be wearing the Chambray Triple Stitch while burping the little one, at $225 it may be work shirt worthy.

Meanwhile, I am convinced part of the reason why $JCG is killing it on the earnings side is because of the mens business and thier "In Good Company" designer collaborations. For example, the Barbour Sylkoil Bedale Jacket ($379 shown at the top of this post) is almost as awesome, if not more than the Jack Spade Field coat.

And check out the Belstaff Colonial shoulder bag 554. To me t his seems a little more functional as a baby bag for dads than the Waxwear Pocket Brief.

Instead of the present being a surprise I might cave and have him pick something out of the options listed. Can't believe how far Jcrew has come from the roll sweaters of 1990.

CNBC's "Power Lunch": $TGT's move to Canada

YAY. Nothing makes me more happy than reporting on good news and $TGT's announcement that the retailer is officially moving into Canada is exciting.  $TGT agreed to pay Zellers Inc. C$1.825B in two equal payments of C$912.5M to acquire the leasehold interests in up to 220 sites currently operated by Zellers Inc. Target expects to open 100 to 150 stores throughout Canada in 2013 and 2014. What's more $TGT also announced it intends to sell their credit card recievables portfolio which totaled $6.7 billion as of October 30th, 2010. The move is likely to finance CAPEX for the new stores in Canada which is said to exceed $1 billion.

My take:

While expansion is always a good sign of a retailer doing well, we can’t ignore their online business which wavered/lost market share to $AMZN during the holidays. With shopping becoming more mobile/online, how the retailer handles this will be key.  Grocery business is also taking a hit with rising commodity and food prices, but having a variety category mix like $TGT is doing with the one-stop-shop is a good model for them.

Gold for sale: $$$ good, "hoodwinking" bad.

One of my favorite jewelers and good friend Tina Tang (former equities trader at Goldman Sachs) came up with an easy, step-by-step guide to selling your gold if you are not a commodities trader (hint* it does not include sending it away in a package to some sketchy place called "We Buy Gold"). With gold sales hitting record highs (trading at 1358. 28 the last time I checked) and unemployment rates still topping out at 9.4%, selling gold may seem like a viable option, BUT before you clear out your or a loved one's  jewelry case (kidding about the loved one- hello, that's stealing!) PLEASE do your reseach and read all of the fine print. This is gold we are talking about, people.

How to sell your gold jewelry and not get hoodwinked. by Tina Tang  

First, before going to sell your gold for cash, you must remember that it is a business.  The gold buyers are not doing a charity. They are trying to make a living. Thus, you cannot expect to get the price in which gold spot is trading on the international market. At the same time, you also do not want to be taken advantage of. Here are a few of my suggestions:

1. Know where the gold spot market is.  Also know that 14kt gold is 58% pure gold, 18kt is 75% pure gold.  Gold spot is the pure gold trading amount. KITCO.com is a good source for pricing.

2. Know how much your jewelry weighs in pennyweight (DWT).  The gold buyers will be quoting you on  gold weight.  You just need a cheap scale or can ask a local jeweler to weigh your gold for you.

3. If you know weight and gold carat, you can plug numbers into this calculator:  http://www.dendritics.com/scales/metal-calc.asp

4.  You are now armed with facts, with this pick 3 gold buyers to get quotes.  3 quotes allows you to see what is fair and who has the best price. The last time I sold some gold I took home $2000!

You can always contact us for advice at any time.  Our customer service:  orders@tinatang.com

Retail hangover?

(Drawing by Seth Herzog) The retail industry was bracing itself for the inevitable and it looks like it happened. No, sillys, Terry Lundgren is not stepping down as chairman and chief executive of Macys (M)-- it seems as though the consumer is experiencing a little bit of a "retail hangover."

While same store sales seemed to beat everyone's expectations for November, December's numbers came with a thud. In the teen retailer space American Eagle Outfitters (AEO) and Aeropostale (ARO)  reported significant declines of 11 percent and 5 percent. With rumors both retailers may be getting snapped up by private equity in a buy out situation, these numbers only fuel the speculation fire. Meanwhile, Abercrombie and Fitch (ANF) killed it by reporting a 15 percent comp increase due mostly in part to a disciplined inventory management. Joining the promo band wagon by getting rid of last year's full- price sales strategy didn't hurt the company either. This move allowed Abercrombie to slowly take away market share from its direct competitors. Gap (GPS) also reported an 8 percent decline in comp sales. By the looks of the overly promoted merchandise in both Gap and Old Navy stores the day after Christmas (stay tuned I am going to a post about my mall vists post festivus/holiday) and the days following, no wonder no one was in there purchasing! It looked like a clothing bomb went off in the stores and not in a good way; too many cheap sweaters, jeans and active wear spelled disaster for this retailer. Ew.

On the other hand, luxury retailers saw an incredible rebound compared to this time two years ago. Saks Inc. (SKS) and Nordstrom (JWN) reported a gain in same store sales of 11.8 percent and 8.4 percent. Although Tiffany & Co. (TIF) just got downgraded by Jeffries from a "buy" to a "hold" on Thursday, store traffic as well as sales seemed to flourish during the holidays.

"I think the luxury customer came out and actually shopped for pleasure, not replenishment," said Deb Weinswing in an interview with Womens Wear Daily. "There is a 'V-shaped' recovery in luxury, and at the moderate retailers, it's more like a bathtub shaped curve. We're heading in the right direction."

I could not agree with Deb more.

Hitha's picks: Luxury

Ralph Lauren (RL): While a lot of luxury retailers (and retailers in general) are talking about their strategy in Asia, Ralph Lauren is actually executing it. The company has strong wholesale sales across all categories as well as strong online and store comps, net income rose 15.6% total revenues up by 11.5%

Tiffany & Co. (TIF): Yes, many analysts are getting behind Jeffries in their downgrade move on this stock but I'm not so sure I want to go there yet. The company is dillgent about providing inventory mixes across all price points, the stock up more than 51% year-to-date and same store sales jumped 7% for 3Q and management raised guidance. What's more Europe and Asia look like strong growth areas for the retailer. 

Bluenile.com (NILE): Join the club if you were one of the many who asked for a watch or a piece of jewelry for the holidays and got it. The watch and jewelry category posted 15% increase for November/December. Coupled with 12% increase in e-commerce spending in the US for first 40 days of holiday (Comscore) Bluenile.com is in a good position going into 2011. According to the chief executive of the company,  Traffic to the website increased 1000% first two weeks of November. But don't think Bluenile.com is placing all of its bets on world wide web--this online retailer is  leveraging social media and smart phone Apps to reach customers.

Do you think the luxury consumer will experience the same "hangover" in 2011?

I'm back... (back in the NY groove).

Hi everyone.

Suffice it to say I've taken a long break from this blog.  But for good reason-- my first book is coming out in August of 2011(published by FT Press) and I finally turned in the first draft. It was a long and arduous process that took me to far away lands and experiences I only thought existed in the movies, but I did it.  And when I mean "I"  what I really mean is "we" since I had a killer research assistant, a great office assistant and an incredible editor. My team = beyond awesome.

Even with all of the help, writing a book and trying to blog at the same time wasn't going to happen.  But now that the first draft is behind me, I am ready to focus on all things retail and the business of fashion. Excited? I am! As always, I welcome your questions and comments on basically everything. Just no questions on the weather. My guess is as good as yours...

The Style File Daily Cheat Sheet

(wsj)Fashion Week Outgrows the Tent

Mercedes-Benz Fashion Week isn't simply moving from one park (Bryant) to another (Damrosch). It's also set to expand throughout the entire Lincoln Center complex when it begins its stay there on Sept. 9. In an interview with The Wall Street Journal, officials from the performing-arts center described the range of programming, from runway shows scheduled for the complex's illustrious theaters to a fashion-oriented exhibition at the on-campus branch of the public library. "I want to see fashion on par with all of the other cultural activities here—the ballet, the opera," said the director of fashion at Lincoln Center, Stephanie Winston Wolkoff, who is responsible for coordinating Fashion Week and the various parties—including Lincoln Center, its constituent organizations, Fashion Week producer IMG Fashion, designers, sponsors and community members—involved in the event. To that end, several designers have signed on to present in Lincoln Center venues beyond the Damrosch Park tents. Designers like Chris Benz, Christian Cota and Catherine Malandrino (none of whom previously showed at Bryant Park) will display their wares at locations normally occupied by New York City Ballet, New York City Opera or the New York Philharmonic. Ms. Malandrino will use the grand promenade and portico of Avery Fisher Hall, for example, and Jill Stuart will present her runway show on the promenade of the David H. Koch Theater. Mr. Cota will hold his show in the David Rubenstein Atrium on Sept. 11., and Mr. Benz will utilize the same space two days later. Nautica and Rachel Roy will stage their presentations at the New York Public Library for the Performing Arts. Ms. Wolkoff encouraged designers to make use of those venues out of an interest in combating what she saw as Fashion Week's increasing decentralization during its years based in Bryant Park, when many designers opted to host shows off-site. "It's about engaging them and showing them that the industry is localized and centralized and modernized here," Ms. Wolkoff said. "I want them to think of this as a destination and a campus, instead of a place to stop in and then leave." The Rubenstein atrium will also host a public exhibition of work by young designers, intended to commemorate Fashion Week's inaugural run at Lincoln Center. That exhibition will remain open from Sept. 14 to 16. Lincoln Center is also planning fashion-focused events, like lectures and film series, scheduled to take place after the tents come down. On Oct. 14, the New York Public Library for the Performing Arts will open "On Stage in Fashion," an exhibition exploring collaborations between fashion designers and performing artists, including Calvin Klein and Halston for Martha Graham, Isaac Mizrahi for Mark Morris and Marc Jacobs for Lar Lubovitch. Garments included in the show will come from the Museum of the City of New York, which is co-curating the exhibition, as well as from opera and dance companies. read more

(wwd)Profiling the Value Retailers

Stores, like people, have personalities.Whether that personality determines the customer, or the customer the personality, is one of those chicken versus egg questions that’s a matter of perennial debate (well, at least among retail nerds). And it’s not only the high-end stores that have distinctive styles — the mass crowd does, too. Contrast the white linoleum and bright lighting at Target to the often-dingy feeling at some Wal-Marts, or the pile-it-high feeling at Forever 21 to the more restrained sense of Zara. Then there is Carrefour, which no matter how big still has a French élan, versus British hypermarket operator Asda, which seems to take all its leads from Wal-Mart, its parent. H&M Officials at H&M, which has more than 2,000 stores around the world, are fond of repeating its mantra: “Fashion and quality at the best price.” The Swedish fast-fashion giant’s stated aim is to dress women, men, teens and children for every occasion. Hence, its women’s collections range from basics like T-shirts to tailored classics like black pants, via sportswear, maternity clothes and avant-garde items inspired by style icons du jour like Lady Gaga. The Divided collection is aimed at younger consumers, with a heavy emphasis on denim, street fashions and funky accessories. Children’s clothes aim to combine practicality with fashion flair and cater to three age groups: zero to 18 months; 18 months to 8 years, and 9 to 14 years. H&M, which had sales last year of 118.69 billion Swedish krona, or $16.07 billion, is credited with popularizing high street-designer collaborations, as well as low prices, constantly changing inventory and a lightning quick supply chain. Since 2004, it has recruited the likes of Karl Lagerfeld, Viktor & Rolf, Stella McCartney, Roberto Cavalli, Comme des Garçons and Jimmy Choo to design limited edition collections that routinely draw hysterical throngs. In addition to selling clothes designed by Madonna and Kylie Minogue, H&M has enlisted celebrities including Rihanna, Jade Jagger, Timbaland and Katy Perry to design tops for its Fashion Against AIDS collections. The retailer is also committed to increasing its use of sustainable fabrics like organic cotton, recycled polyester and tencel through initiatives like its recent Garden Collection.

Metersbonwe

To call China’s mass-market casual apparel field crowded is a massive understatement. By keeping its head down, Shanghai-based Metersbonwe has managed to come out ahead. The company has around 1,800 stores across the country, is the market leader in lower-priced casualwear with estimated sales of 4 billion renminbi, or $590 million, yet still holds less than a 2 percent share of the market. How have they done it? According to Cai Minxu, the company’s media affairs manager, the success of Metersbonwe — which sells nothing but apparel, shoes and accessories — has come from a tightly managed supply chain, deep sales network and a clear message to customers. Though its long-standing slogan is “Be Different,” the company mainly sells clothes designed to help teens and college students fit in with their peers — a very important attribute for the majority of China’s youth. Cai said the company aims to double market share in coming years, with new campaigns and new reach. But the core message won’t really change. These are real clothes, at good prices, for the youth.“People ask what is the distinguishing feature of Metersbonwe,” said Cai. “I say the distinguishing feature is that it doesn’t have a distinguishing feature. We will move forward in the goal of having ‘no distinguishing feature.’”

Dollar store format

One of the few retail sectors that expanded during the recession, dollar stores opened units at a fast clip. The dollar chains compete against discount supermarkets such as Aldi and mass retailers such as Wal-Mart. While the dollar store category is heavily invested in food and consumables, it’s been making strides with apparel and beauty. Dollar General’s proprietary brand, Bobbie Brooks, is manufactured by Gildan, which also makes Open Trails for men. The chain added Hanes in March. Dollar General Corp., which has sales approaching $12 billion, opened 207 stores last year and now operates over 8,800 units nationwide, most averaging about 7,000 square feet. Family Dollar Stores Inc., which has 6,700 stores in 44 states, has been launching national apparel brands in an effort to boost the category, which accounts for 10 to 12 percent of sales, which totaled $7.4 billion last year. Family Dollar in 2007 bought the Bugle Boy brand. Dollar Tree Inc., with sales of $5.2 billion, is expanding Deals, a 160-store chain it bought in 2006, with 25 new Deals units this year. At Deals, prices are more than a buck, giving Dollar Tree an opportunity to sell merchandise it can’t sell at the restricted prices of its self-named stores. read more

(wwd)Bloomingdale's Opens First Outlet

Bloomingdale’s has a new spin on shopping outlets, which it begins putting to the test today. The upscale chain is opening its first fashion outlet at Potomac Mills in Woodbridge, Va., seeking to maintain the allure of the treasure hunt, but with less digging through the racks. A second outlet will launch Aug. 27 in the Bergen Town Center in Paramus, N.J. “Both are very shoppable and, at the same time, the customer feels there is a density of merchandise,” said Arnold Orlick, Bloomingdale’s senior vice president in charge of outlets. “They’re clean, simple, bright environments that feel like Bloomingdale’s but they’re not.” Sixty to 70 percent of the merchandise comprises excess goods from vendors; 20 percent is clearance from Bloomingdale’s regular stores, and 10 to 20 percent is manufactured specifically for the outlets. “The lion’s share of the goods are 40 to 60 percent off,” Orlick said, though discounts can be as much as 80 percent. The retailer plans four or five openings a year if the concept succeeds. “Bergen and Potomac are very important tests,” Orlick said. “The question is whether there is cannibalization or no cannibalization” of Bloomingdale’s stores. The outlets are marked by black-and-white checkerboard aisles, evoking the B-way in Bloomingdale’s full-line stores. But the aisles are vinyl, not the usual marble. The black-white motif is repeated on signs and fixtures, offset by pops of color from the clothing and wall art resembling designer sketches. The outlets also have polished concrete floors and exposed ceilings, giving them the utilitarian vibe of a sleek warehouse or loft. “An outlet store can be stylish,” said Jack Hruska, executive vice president of creative services at Bloomingdale’s. And flexible, as well, he added, with rolling fixtures and shelves that can be shifted from wall to floor displays so departments may be reconfigured depending on the size of vendor shipments. With 22,000 square feet of selling space each, the outlets are smaller than those of most major competitors. They’re not piled as high with merchandise in order to reduce rummaging. They’re still heavily stocked with men’s and women’s apparel, accessories, shoes, kids’, outerwear and intimate apparel, but no home, cosmetics or fragrance. At the Potomac Mills unit, a row of signs in the center aisle includes the cheeky message “Are you dreaming? No, silly. This is real,” and touts everyday discounts of 25 to 70 percent. Labels range from contemporary to bridge to designer, including Tory Burch, Burberry, BCBG Max Azria, Michael Michael Kors, DKNY, Elie Tahari, Lauren by Ralph Lauren and Calvin Klein. Men’s brands include Theory, Joseph Abboud, Canali and Hugo by Hugo Boss. There’s an extensive shoe and accessories section with its own bank of registers and handbags from Botkier, Salvatore Ferragamo, Cole Haan and Tadashi Shoji. Shoe brands include Stuart Weitzman, Converse and Ugg, and there are sunglasses from Jimmy Choo, Gucci and Michael Kors, among others. Denim includes Paige Denim, J Brand, Not Your Daughter’s Jeans, Joe’s Jeans, Rock & Republic and Seven For All Mankind.  Bloomingdale’s will open an outlet in Dolphin Outlet Center in Miami in October and another in Sawgrass Mills in Sunrise, Fla., in November. read more

Madonna Slapped with Material Girl Lawsuit

Talk about a fashion don’t! Madonna is being sued over the rights to use the “Material Girl” name for the trendy juniors clothing line that she designed with daughter Lourdes. Apparel manufacturer LA Triumph slapped the superstar with a lawsuit Thursday, claiming that it had been marketing clothes under the “Material Girl” brand since 1997. “Our client and its predecessor have been continually selling similar clothes in similar retail outlets at similar price points under their Material Girl brand since at least 1997 and Madonna and her newfound company do not have the right to trade in the same space under this brand,” said an attorney for the company in a statement, alleging that their client faces “a risk of being subsumed by Madonna’s profile, obvious worldwide notoriety” and massive marketing campaign. Madonna’s much-buzzed-about Material Girl collection, fronted by Gossip Girl star Taylor Momsen, launched at Macy’s earlier this month. Madonna has not yet commented. read more

The Style File Daily Cheat Sheet

(wwd)Frugal Shoppers Appear Here to Stay

“Mindless excess is over.” So says Faith Popcorn, chief executive officer of marketing firm BrainReserve, when asked whether women will go back to their ferocious shopping habits once the economy fully recovers. “The entire consumer mentality has changed across the socioeconomic spectrum,” said Popcorn. “We understand and buy what we truly need, and we actually want less — stuff is clutter and we want simpler. We call it cashing out.” So is this the dawn of a New Consumer Age, as many experts contend, one that will force brands and retailers to make tectonic changes in the way they do business and transform the nature of shopping in America? Or is the consumer simply the same — just slightly different due to economic pressures? It’s a debate obsessing companies at all price levels and industries — from fashion to food to cars. Regardless of which side of the argument one falls on, it’s clear the shopping rules have changed and key trends include:

• The boom in e-commerce, making it easier for consumers to buy from home — and to comparison shop.

• Technology is now more fashionable than fashion — in other words, teens and twentysomethings would rather buy an iPad than a handbag.

• Social networks are driving real consumption, with friends telling friends about hot products or brands — meaning brands have to enter the conversation.

• The Great Recession has forced everyone, even the rich, to alter their shopping behavior and buy less.

• High levels of personal and household debt continue to constrict the Baby Boomers, who are looking for simplicity and value. “Women are somewhat more hesitant to loosen their purse strings — especially for nonessential items and major expenses that can wait,” according to “A New World Order of Consumption,” a Boston Consulting Group study. “Across all regions, they are more likely to seek out sales promotions, spend time shopping around for the best prices, and shop in discount stores.” The study noted consumers’ values and priorities are shifting. “Home and stability have taken on greater importance, while overt luxury and status have faded. The great hunt to find the best value at the lowest price remains firmly top of mind almost everywhere, particularly in Europe and the United States, where consumers enjoy the feeling of what they view as smarter shopping." read more

(wsj)Fashion Gets a Deserved Night Out

Fashion and art have a habit of mingling, but the crossover tends to be most vibrant when there's some money to play with. Remember when Karl Lagerfeld commissioned architect Zaha Hadid to create the Chanel Mobile Art Pavilion and sent it on a world tour? It was a bull market concept, if there ever was one. In the wake of the Great Recession, these grand creative collaborations seem part of a bygone era.  But a flicker of that energy is on its way, in the form of Fashion's Night Out, a one-night-only shopping event slated for Sept. 10., in New York and elsewhere. In the city, about 1,000 stores will stay open late to offer in-house parties, freebies and a festival atmosphere. Now in its second year, Fashion's Night Out was launched by Vogue magazine, the Council of Fashion Designers of America and the City of New York as a way to give the fashion industry a boost during the downturn. Though the evening is devoted to commerce, it is balanced with an artistic side. A glance at the event's website, Fashionsnightout.com, which launches Monday, reveals that brands across the spectrum—from the popular (Anthropologie) to the Parisian (Balenciaga)—are exploring the interplay between fashion and the arts. One of the most direct connections will be at the City Opera Thrift Shop, on East 23 Street, where proceeds go to support the creation of new costumes for operas. In the past, City Opera has commissioned Isaac Mizrahi to create costumes for "Platee" and "King Arthur," as well as Zandra Rhodes for "The Pearl Fishers." This season, in conjunction with FNO, the upscale resale shop will present its annual fall preview on Sept. 10. To offer a glimpse at the creative process, the shop will display a series of costume sketches by top designers including Carolina Herrera, Isabel Toledo and Jason Wu. At the Balenciaga store, on West 22nd Street, a series of six self-portraits by artist Cindy Sherman will be on display from 8 p.m. to 10:30. Ms. Sherman, who is known for transforming herself into wildly divergent characters, dressed herself exclusively in Balenciaga for the portraits, which are on loan from the private collection of Francois Pinault of PPR, the parent company of Balenciaga. The portraits will be making their U.S. debut at the event, which will also include model Karen Elson singing songs from her first album, "The Ghost Who Walks," produced by her husband, rock musician Jack White. (Jazz singer Karrin Allyson is also slated to give a free performance at 6:30 p.m. on the second floor of the Time Warner Center, where shops will be open until 11 p.m. The appearance is a preview to her September shows at Dizzy's Club Coca-Cola.) Elsewhere, a site-specific installation is planned at the Yigal Azrouël store, in the Meatpacking district, where Mr. Azrouël is collaborating with the East Village-based artist and jewelry designer Megan Marrin. Together, they've been developing a project that has evolved from transparent, vellum panels to broken glass and black plastic wrapping. "I really wanted to work with him, rather than bring previous work in," said Ms. Marrin, adding that the sculptural work will be not be hung on the walls, necessarily, but rather incorporated into the store's cavernous space. read more

(forbes)Will Chinese Shoppers Embrace Luxury Goods–Sans Logo?

This week, Britain’s Telegraph reported on the recent luxury industry trend towards subtler, “anti-bling” collections that minimize conspicuous logos in favor of more low-key designs. According to the article, recent moves by Gucci to downplay its trademark “G emblem” have paid off, as the company recorded a surge in profits after moving in this direction. As Francois-Henri Pinault, chairman and chief executive of its French parent PPR, said: “Our groups are moving toward fewer logos, more discreet luxury. It’s a question of adapting our ranges very rapidly to this new perception of luxury, a luxury which is more subtle, more sophisticated.” Noting the visible “de-logo-ification” seen among brands known for over-the-top embellishments in the pre-financial-crisis days, the Telegraph cites a new study by Joseph Nunes, professor of marketing at the University of Southern California, which found that big spenders are “willing to pay a premium to have ‘quiet’ goods without a brand mark.” So there we have it: top luxury houses are largely moving away from ostentation and flash and towards more subtlety, sophistication and “quiet” indulgence. But herein lies a serious point of contention in the luxury world. Although luxury shoppers in established, recession-stung markets may gradually be lured back into stores by understated items bereft of obvious logos, will this trend appeal to potential buyers in emerging — and lucrative — markets like China, where garish still equals good? This is precisely the question asked by a number of Chinese luxury sites and blogs this week. The author of the New Express article, “Will You Still Buy Logo-Free LV?” predicts that it will be years for the logo-mad mindset prevalent in the Chinese luxury industry to change, and the ChinaNews article “Low-Key Luxury: A Hard Sell For Chinese Consumers” notes the cool reaction that many Chinese shoppers have had to understated items. The article also quotes a professor at Shanghai’s Fudan University who explains the “peripheral effect” that often dictates a Chinese shopper’s choices. From ChinaNews (translation by Jing Daily team):

At the Louis Vuitton flagship store at Shanghai’s Lippo Plaza, workers showed me that nearly all of the new products in the epi leather collection lack any obvious LV logos,and  instead have only a small embossed LV logo in the lower right-hand corner. Nonetheless, considering these pieces all cost more than 10,000 yuan (US$1,476), they still belong to a high-end product line. [As one clerk told me,] “The new classic canvas monogram collection isn’t that popular with buyers. The most popular items are still those ones that have a prominent LV logo.”

A clerk at the Gucci store at Shanghai Times Square explained that the “Techno Horsebit” series, which doesn’t have any obvious logos, hasn’t had many buyers either.

The industry insider Frederick (no further name given — JD) recently said that when Chinese consumers purchase a luxury item, they’re not just buying the product but are paying for all of the added value denoted by this object — identification of status, display of economic power and so forth.

Cheng Shi’an, the head of Fudan University’s Advertising Department in Shanghai, believes that luxury brands rely on the “periphery effect” (外围效应) [in China]. If a luxury buyer’s coworkers and friends can’t tell the price of the brand, even if this person spent a lot of money on a given item, their satisfaction level will still be low.

read more

(wwd)Retail Sales Fall as Consumer Prices Rise in July

Two government reports released Friday highlighted how far the economy still has to travel to full recovery, but offered signs the outlook is improving compared with last year. The U.S. Commerce Department said retail apparel sales fell in July compared with a month earlier, but specialty store and general merchandise store sales improved over last year. The Labor Department reported apparel prices were higher in July compared with a month earlier, but declined year-to-year, tamping down inflation fears. Clothing and accessories store sales dipped 0.7 percent in July to $18 billion compared with June, and department store sales fell 1 percent to $15.4 billion, the Commerce Department said. Sales at general merchandise stores, a category that includes discount and department stores, dropped 0.2 percent to $50.3 billion for the month. In yearly comparisons, specialty store sales advanced 3.8 percent, while department store receipts fell 0.8 percent. General merchandise stores saw sales increase 2.4 percent. “Household spending remains tepid amid concerns about economic stability,” said Jack Kleinhenz, chief economist for the National Retail Federation. “Current data on the economy is mixed, which signals that retailers will continue planning with caution until a long-term trend can be established.” July results were not alarming, said Kevin Regan, senior managing director and retail industry expert with FTI Consulting, but showed the depth of consumer reluctance to start spending again in the face of daily reminders that unemployment remains high and foreclosures still loom over many homeowners. Sales comparisons to July 2009 were easy, he pointed out, tempering the year-over-year boost reported in some categories, but there were still pockets of strength. Strong sale results this spring gave rise to muted optimism, “but that momentum is clearly lost,” said Regan, adding the last few months have brought the retail environment “back to earth.” In the overall economy, the sales gain was slightly less than expected at 0.4 percent in July compared with June to $362.7 billion, and advanced 5.5 percent year-over-year. Meanwhile, retail apparel prices rose a seasonally adjusted 0.6 in July compared with a month earlier, but declined 0.3 percent in 12-month comparisons, the Labor Department said Friday in its Consumer Price Index. Charles McMillion, president and chief economist with MBG Information Services, said it’s unusual for apparel prices to rise while retail receipts are down. “This makes perfect sense for consumers, but I just don’t understand retailers,” McMillion said, pointing out that, with shoppers focused on deals, any price increases could scare them away and drive sales down. Prices for women’s apparel rose 1.6 percent in month-to-month comparisons, but fell 0.3 percent compared with July 2009. Men’s apparel prices dipped 0.3 percent in July, but were up 1.1 percent from a year earlier. The overall CPI rose 0.3 percent in July compared with June, in line with expectations, and advanced 1.2 percent from a year earlier. The so-called “core index,” which excludes the volatile food and energy sectors, inched up 0.1 percent in July and advanced 0.9 percent year-over-year. “The July report on core consumer prices yet again points in the same direction — in competitive markets for goods and services there are absolutely no signs of any inflation pressure,” said Brian Bethune, chief U.S. financial economist with IHS Global Insight. read more

The Style File Daily Cheat Sheet

Celebrity, Proprietary Brands Squeeze Independent Labels

How can the little guy compete against Madonna? As retailers seek to add more celebrity and proprietary brands, there’s no end in sight to exclusive pairings.  And it’s getting a lot tougher for other labels to compete. Brand exclusives and private label are increasing their share of big-store real estate, commandeering dedicated advertising and promotional support, not to mention buying dollars. Mary Gleason, president and chief executive officer of Schottenstein Luxury Group, whose brands include Judith Leiber, called the movement to proprietary brands “a game changer.” She noted that if a store has two brands that are similar, and one is an exclusive, “that’s even more reason to leave one out.” Stores such as Macy’s, Penney’s and Kohl’s “are big enough to make the commitments to those brands worthwhile. To get a Sean John or Tommy Hilfiger at Macy’s, or a Liz Claiborne at Penney’s, they’re not going to Dillard’s to make those deals. Those are huge commitments,” she said. “It raises the bar on what you can bring to a retailer. Five, 10 years ago, you could go to Penney’s and Kohl’s with a B-level brand. You can’t go with a B-level brand anymore.” She contended that “A” brands don’t have to worry about being squeezed out. “Where the challenge lies is with the ‘B’ and ‘C’ brands. Brands which have made-up names and are not marketed, or don’t connect with the consumer,” will have problems. “Why should a retailer build a no-name brand for a manufacturer when the store can build up its own brand?” “It’s made the open-to-buy [for non-exclusive brands] that much smaller from the retailers’ point of view,” said Andrew Jassin, managing director of Jassin Consulting. “With department stores narrowing the number of vendors they carry, those without an exclusive will have a much harder time competing. The stores have been reasonably selective. Certain exclusive brands will get all the promotional and advertising dollars behind it and, without that, it doesn’t create any buzz.” read more

Industry Touts Fashion's Night Out

If there was any real news from the press conference to unveil this year’s Fashion’s Night Out at City Hall on Wednesday, it was that, unlike its European peers, the American fashion industry does not go on break in August. Standing behind the podium where Mayor Michael Bloomberg kicked off a series of speeches, the group of designers and industry executives included Tory Burch, Tommy Hilfiger, Francisco Costa, Donna Karan, Tracy Reese, Kenneth Cole, Zac Posen, Terry Lundgren, Carolina Herrera, Jack McCollough and Lazaro Hernandez, Vera Wang, Mary-Kate Olsen and Prabal Gurung (whom the mayor repeatedly referred to as “Prooble”). Sitting in the audience were Thakoon Panichgul, Alexander Wang, Phillip Lim and a few others, and they listened to the mayor offer some anecdotes about the launch event last year and outline details of the Sept. 10 event. “Our administration is committed to doing whatever it takes to make sure this industry continues to thrive,” the mayor said. “This September, [New York Fashion Week] will for the first time be at its new home at Lincoln Center,” he added. “We think this new location will give fashion week the space to grow and flourish, and cement its reputation as a premier global event. We want to make sure the entire city reaps the benefits, and that’s why last year we started Fashion’s Night Out.” And the City of New York, Vogue, the Council of Fashion Designers of America and NYC & Company are hoping to make it even bigger this year. So far, almost 1,000 stores have signed up to participate in Fashion’s Night Out and, once again, they have committed to keeping their doors open until 11 p.m. For the first time, the event will feature Fashion’s Night Out: The Show, the city’s largest-ever public fashion show scheduled on Sept. 7 at Lincoln Center, with tickets starting at $25 going on sale on Aug. 19 at the Lincoln Center box office and proceeds benefitting the NYC AIDS Fund. According to the mayor, cbs.com will live-stream the runway show. The network will also present an hour-long prime-time special on Sept. 14 about the making of the event. read more

Gleek chic: U.S. store launches fashion line inspired by Glee

You've seen the show and memorised the one-liners. Now Glee fans can take their obsession a step further with a fashion line inspired by the hit television show. Among the garments on offer will be 'Cheerio' uniforms for aspiring Quinn Fabrays, and preppy miniskirts in the style of goody-two-shoes Rachel Berry. There will even be tracksuits inspired by the show's antihero Sue Sylvester. The line, which launches on Sunday, is keenly priced, with T-shirts from around £15. But though it will be stocked in over 600 stores, it's exclusive to U.S. department store Macy's - so unfortunately won't be on sale on our side of the Atlantic. Macy's and the Fox television network are anticipating a huge response from the show's fans, who call themselves 'Gleeks', and have invested in an extensive marketing campaign. 'Glee fans just don't watch the show, they live it,' said Robert Marick, of Fox Consumer Products. 'This retail launch will provide fans a very personal way to extend the experience and express their own Glee personality. 'Macy's has treated this launch as the kind of event that is a true homage to the show,' he added. Glee was an international hit when it launched earlier this year, and recently received 19 Emmy nominations. It has made huge stars of its cast, which includes Jane Lynch as Sue Sylvester, Lea Michele as Rachel Berry and Matthew Morrison as Will Schuster. The second season is due to air in the UK later this year. read more

Chinese spending power underestimated, study says

Chinese households have far more money than previously thought, according to recent research, which says casino operators, property companies and even European luxury goods makers could be about to benefit from the rise of these deep-pocketed consumers. The research -- conducted by China Reform Commission professor Wang Xiaolu and commissioned by Credit Suisse -- found official estimates of household income were well wide of the mark. On average, mainland China's urban household income was 32,150 yuan ($4,746), or 90% above the 16,880 yuan indicated by official data, according to the study which assessed spending and income patterns in China in 2008. The study found that the "hidden" household disposable income could be as high as 9.3 trillion yuan in 2008, equivalent to about 30% of China's gross domestic product. Most of this wealth -- 63%, according to the survey -- is concentrated in the top 10% of Chinese households. That means the top bracket is about 3.2 times richer than official estimates suggest. The report also said the government's flow of funds data don't accurately track the income of top households because much of it are the results of "illegal or quasi-legal" activities. Wang reports "grey" disposable income -- the shortfall in the figures revealed in the economic census and what households really received -- at 5.4 trillion yuan in 2008. Credit Suisse said the finding helps explain China's growing wealth gap and could help explain "the rationale of the Chinese government's recent strong push for faster wage growth and a more equitable income-distribution pattern. Credit Suisse said investors may be setting their sights too low when it comes to gauging the impact of this vast pool of wealth. read more

The Style File Daily Cheat Sheet

(wsj)Penney Weaves New Fast-Fashion Line

In an attempt to win over fashionable young women, J.C. Penney Co. is going to try running with a faster crowd. This week, the Plano, Texas-based retailer unveiled an unconventional collaboration with Mango MNG Holding SL, the closely-held Barcelona chain known for whipping up cutting edge looks that go from design studio to store shelves in as little as four weeks. The move is a big bet for the 108-year-old Penney, which has been trying to grab market share from more stylish competitors to spur sales as overall demand for women's apparel is sluggish. The two retailers are a fashion mismatch. Penney's average customer is a 35- to 53-year-old bargain hunter who shops four times a year. Mango, founded in 1984, caters to style-obsessed twenty-somethings who shop every month and pay full price. By delivering new merchandise to stores at least once a week, the chain has trained customers to buy early and often. But for Penney, that's the draw. "If you only deliver four times a year, there's only a reason to come to the store four times a year," Chief Executive Myron E. Ullman III said at a recent conference. Mango is one of the hottest retailers in Europe, where it operates hundreds of stores and its ads feature celebrities including Penelope Cruz and Scarlett Johansson. Unlike other fast-fashion chains such as Inditex SA's Zara and Hennes & Mauritz AB's H&M, the chain is little-known in the U.S., where it only has 12 retail outposts. Revenue last year was €1.15 billion ($1.82 billion). The exclusive-to-Penney brand, called MNG by Mango, will launch at 77 stores on Aug. 18 and roll out to 600 of Penney's 1,100 stores by next fall. Penney is investing in fixtures such as hardwood floors, black chandeliers and modern tables that showcase looks like skinny jeans and lace-embellished blouses. In-store boutiques, averaging 1,000 square feet, will be refreshed every other week—twice as fast as Penney's other brands. Prices will be in the mid-to-upper tier of Penney's offerings, with skirts ranging from $50 to $100, and jackets from $60 to $160. The Mango-Penney collaboration comes as U.S. apparel retailers have been fighting for market share. The women's apparel market has been essentially flat for the past three years, according to market researcher NPD Group, but "there has been huge growth in dollar volume in fast fashion," says Liz Sweney, senior general merchandise manager for Penney's women's businesses. read more

(wwd)American Apparel to Miss Filing Deadline

As other retailers prepare to start reporting their second-quarter results this week, American Apparel Inc. has informed the Securities and Exchange Commission that its numbers will neither be punctual nor profitable. The increasingly embattled purveyor of chic basics said in an SEC filing late Tuesday that its new independent auditor, Marcum, needs more time to work through the figures for the second quarter, ended June 30, as well as those for the first quarter, which have yet to be filed. The company offered a summary of what it expects its second-quarter figures to look like, and it contained little in the way of encouraging news. The firm anticipates a second-quarter loss against a net profit from the year-ago quarter. Net sales are expected to drop as declines in its retail business were only partially offset by increases in its sales with wholesale customers. Furthermore, the shift in its business towards wholesale, coupled with higher production costs, is expected to produce lower gross margins for the second quarter against its 2009 counterpart. In effect, American Apparel now has two sets of auditors trying to make sense of its books. Deloitte & Touche LLP resigned the account last month after identifying “material weaknesses in internal control” with respect to the closing and reporting of its figures. Additionally, American Apparel told the SEC, Deloitte became aware of certain information “that if further investigated may materially impact the reliability of either its previously issued audit report” or the financial statements made regarding fiscal 2009. With Deloitte’s resignation, American Apparel brought back its previous auditor, Marcum, with which it had worked during fiscal 2008 and which had issued an adverse opinion about the company’s financial reporting in early 2009. While Deloitte looks into the veracity of previous reports, Marcum will have to hustle to compile information for both the first and second quarters of the current fiscal year. American Apparel told the SEC on May 11 that its first-quarter report would be delayed — it still hasn’t been filed — and then on Tuesday made the same statement about its second-quarter data. The audit problem is but the latest in a series of crises for the once high-flying chain. London-based Lion Capital helped it pay off a $51 million loan from SOF Investment in March, but just two months later American Apparel fell out of compliance with a covenant of the Lion loan covering its debt-to-EBITDA ratio. Last September, it laid off 1,500 immigrant workers who couldn’t show that they were in the U.S. legally, touching off a labor shortage that further hurt results. It received a vote of confidence in June when Ronald Burkle of The Yucaipa Cos. LLC reported that he held over 4.3 million shares of AA, giving him a 6 percent stake in the firm. read more

(business insider)Goldman Sachs Says Jeggings Are Going To Be This Year's Big Fashion Trend

The latest fashion trends, according to Goldman Sachs: military, jeggings, and the same prints and plaids you wore last year. Apparently analysts at Goldman recently published a report on Back To School fashion trends, which invites a fun thought: ideally Blankfein in jeggings (a new abbreviation for jean leggings), but also the concept of Goldman businessmen analyzing the latest fashion trends and coming up with jeggings and military. The bank's first three predictions don't exactly seem inspired, they're on point with Fox BusinessNew York fashion week, and Teen Vogue, but until we get a hold of the full report from Goldman to print (we asked for a copy), we'll let your imagination run wild. For now, here's a brief round-up of what Goldman thinks will be trendy this fall, from Benzinga: Back-to-School fashion trends: military styles, jeggings, and carries over prints and plaids from last year. And here's what it means for the market: Driven by persistent hot temperatures, sales of classic B2S long denim have been weak. If the weather doesn’t start to cool down, analysts expect that inventory could begin to build and pressure margins. We were very encouraged by traffic trends at ANF and continue to believe stabilizing the domestic business will unlock greater value from international growth. We also remain positive on LULU which has substantial comp-store and footage growth potential and should be much less vulnerable to weather and competitive pressures this fall. read more

(wwd)Macy’s Ups Outlook, Second Quarter Profits Surge

Localized merchandising, exclusive brands and private label development helped Macy’s Inc. post a better-than-expected second-quarter profit Wednesday. The department store also raised its full-year outlook. For the period ended July 31, the Cincinnati-based retailer said its net income grew to $147 million, or 35 cents a diluted share, versus income of $7 million, or 2 cents a share, in the year-ago quarter. Revenue for the period rose 7.2 percent to $5.5 million, from $5.2 million. Wall Street was looking for EPS of 29 cents on sales of $5.50 billion. "We believe our business is beginning to hit its stride after implementing significant structural and organizational changes over the past two years,” said chairman, president and chief executive officer Terry Lundgren. “While the economic environment remains uncertain, Macy's and Bloomingdale's have a terrific opportunity to continue to take market share and grow our business profitably.” Macy’s increased its annual earnings guidance to between $1.85 and $1.90 a diluted share, up from prior guidance of $1.75 to $1.80 a share. Analysts expect earnings of $1.87 a share. read more

The Style File Daily Cheat Sheet

Is Fashion Ready to Break New M&A Ground?

There’s a new theme in fashion M&A that has “synergy” taking a back seat to “innovation.” “This is like the geek trying to get the hot cheerleader to become cool at the high school dance,” said Sherif Mityas, a partner in A.T. Kearney’s retail consulting practice, describing the rush of companies searching for businesses that have the pulse of new consumers. Fashion players and retailers are trying to get smart, and quick, on everything from social media and mobile commerce to celebrity — and they’re willing to think differently to do it. New players are also entering the mix, making for some pretty interesting bedfellows. Take Wal-Mart Stores Inc., which bought video download site Vudu. Denim brand J Brand sold a majority interest, said to be worth more than $50 million, to Star Avenue Capital, a partnership between talent agency Creative Artists Agency and Irving Place Capital. And the Estée Lauder Cos Inc. acquired Smashbox, picking up expertise in digital, social media and television distribution, as well as a photo studio to boot. Looking beyond the traditional boundaries of fashion can lead to a big payoff.  “These are beyond synergistic type of opportunities,” said Mityas. “The opportunity will allow an organization to completely shift and create a new customer demographic, a new customer pool.” Mityas described innovation as the “holy grail” of growth and said the industry is beginning to see innovation through M&A. “This type of acquisition, in certain cases, allows you to leapfrog your competitor,” he said. This emerging M&A model is a distinct departure from the traditional one, where retailer A buys retailer B, reaching new customers while “realizing synergies” — firing people in the back office and dumping duplicate operations. The same can be done with brands and the model, at least on paper, leads to a larger company that is more profitable than the sum of its two parts.  Most of fashion’s dealmaking is expected to proceed along these lines, but the great recession has changed things. Being big doesn’t seem as important as being in the right spot as consumers evolve and technology advances. But there are plenty of risks. Venturing into new areas can lead to cultural clashes and taking on a disparate business can distract management and pull them away from their core competencies. Hot companies with new ideas and lots of growth ahead of them can also be pricy. Take Under Armour Inc. and Lululemon Athletica Inc. in the fashion world. Both public companies, while not necessarily for sale, have successfully tapped into very specific customer niches, giving them leverage to drive up the price for any possible suitors. read more

Schumer Bill Seeks to Protect Fashion Design

The American fashion industry has been pushing hard over the last four years for copyright protection for its designs. An earlier bill in the House was deemed too broad; clothing makers argued that protection against knock-offs would only encourage frivolous lawsuits from people claiming they had the idea first. Today, after a year of negotiations, Senator Charles E. Schumer introduced a bill that seemed to satisfy the different sides of the fashion industry — and may provide some protection, too. The bill, the Innovative Design Protection and Piracy Prevention Act, has the support of the Council of Fashion Designers of America (CFDA), whose individual members represent the creative core of the industry, and the American Apparel & Footwear Association (AAFA), which represents more than 700 manufacturers and suppliers and by its estimate accounts for about 75 percent of the industry’s business. The AAFA had argued that the House bill was too broad and would expose its members to lawsuits. Senator Schumer brought the two groups together. “In the first go-around there was nothing that gave our members protection,” Kevin Burke, president and chief executive officer of the AAFA said, adding that there was “a vast difference” in the Schumer bill. “It provides the protection for unique design.” The proposed legislation provides very limited intellectual property protection to the most original design. A designer who claims that his work has been copied must show that his design provides “a unique, distinguishable, non-trivial and non-utilitarian variation over prior designs.” And it must be proven by the designer that the copy is “substantially identical” to the original so as to be mistaken for it. The bill would cover all fashion designs, including products like handbags, belts and sunglasses, for a three-year period from the time the item is seen in public—on a runway, say. Factors than can’t be used in determining the uniqueness of a design are color, patterns and a graphic element. In other words, the bar is extremely high to determine what qualifies as a unique and distinguishable fashion design. And the burden is on the innovative designer. A beautiful dress worn by a celebrity at an important red-carpet occasion most likely wouldn’t meet the test. But a jacket that has an original cut — one example might be Martin Margiela’s peaked shoulder jackets from two or three years ago — could easily meet the standards of something unique and non-trivial. The Margiela jacket was widely copied and certainly the knobby shape of the shoulder was original. Steven Kolb, the executive director of the CFDA, seemed satisfied with the Schumer bill, which has bipartisan support. “The fact that there will be a law in this country, as there are in other developed countries, will make people think twice” before they copy someone, he said. “The law in itself is a powerful deterrent.” Senator Schumer acknowledged that not every creative designer will feel that he or she is sufficiently protected but he said “the bill is a good first step.” He expected the bill to be passed this fall. Narciso Rodriguez, who was among the designers urging protection, said in an email: “It’s an important moment for American designers that this bill is one step closer to becoming law. This protection has been necessary for so long and I am happy to see how the fashion industry’s efforts have made a difference.” Extending copyright protection to fashion has been a hard sell, in part because consumers ultimately benefit from such copying. In a post this spring on the Freakonomics blog, Kal Raustiala of the UCLA Law School and Chris Sprigman of the University of Virginia Law School pointed to the paradox in piracy protection: “The interesting effect of copying is to generate more demand for new designs since the old designs—the ones that have been copied—are no longer special. The overall result is greater sales of apparel.” Perhaps the upside for American fashion is that it will encourage designers to be more innovative. read more

Tween Helps Lift Dress Barn Sales 78.3%

The November acquisition of Tween Brands and healthy same-store sales growth helped Dress Barn Inc. raise its fourth-quarter revenues 78.2 percent. Sales for the 13 weeks ended July 31 totaled $710.9 million, the company said Thursday, versus $398.9 million in the prior-year quarter. Comparable-store sales rose 7 percent overall. By nameplate, Dress Barn sales rose 11.3 percent to $282.3 million on a 5 percent comp increase and Maurices sales were up 26 percent to $183 million on an 8 percent comp increase. Comps at Justice, previously operated by Tween Brands, were up 10 percent as sales hit $245.6 million. For the year, company sales rose 58.9 percent to $2.37 billion from $1.49 billion on a consolidated comp increase of 9 percent. The company reaffirmed its guidance for earnings per share of between $1.80 and $1.85 a diluted share. Dress Barn is scheduled to report fourth-quarter and full-year results on Sept. 15.

The Style File Daily Cheat Sheet

Liz Claiborne Losses Grow

Liz Claiborne Inc. said Thursday that its second-quarter net loss widened, despite margin improvement at its Juicy Couture, Kate Spade and partnered brands divisions. The New York-based retailer amassed a net loss of $87.2 million, or 92 cents a diluted share for the period ended July 3, compared with a loss of $82.1 million, or 82 cents a share, in the year-ago quarter. Excluding items, Liz said its net loss totaled 19 cents a share, which was better than analysts’ estimate of a 46-cent loss. Revenue for the quarter slid 15.5 percent to $569.8 million, from $674.6 a year earlier, due in part to lagging sales at Liz Claiborne brands, which are licensed to J.C. Penney Co. Inc. and television shopping network QVC. read more

Chinese luxury wannabes try to shake off "Made in China" image

"I threw away the rest of my suits," beams Buffett in the 2007 video, adding that he and Microsoft founder and Bill Gates are fans of Chinese suit maker Trands and would be great salesmen for the company based in the northeast Chinese city of Dalian. Trands is one of a handful of emerging Chinese brands that someday hope to take on the likes of Gucci, Armani and Prada in the lucrative luxury goods market. Sales of luxury goods in China grew 12 percent in 2009 to $9.6 billion, accounting for 27.5 percent of the global market, according to Bain & Co. In the next five years, China's luxury spending will increase to $14.6 billion, making it the world's No. 1 market. Buffett's endorsements may make for fun Internet fodder, but analysts point out that the emerging crop of Chinese luxury wannabes face a long uphill battle in taking on the global heavyweights which have more than a century of history and huge marketing muscle. Compounding the problem is a longstanding association that equates the "Made in China" label with poor quality and mass-market goods, versus the more exclusive cachet of the "Made in Europe" moniker. "In the short term I don't think any Chinese luxury brands can compete with the international ones in terms of marketing, brand culture, design and quality," said Marie Jiang, JLM Pacific Epoch analyst. China is expected to become the world's biggest luxury goods market in five to seven years, fueled by increasingly wealthy and brand-conscious consumers who want the best of everything, said a survey by The Boston Consulting Group in January. That market has been largely dominated to date by the big Western names, most of which have shops in Shanghai and Beijing and are starting to look at smaller cities as well. But home-grown brands such as Trands are trying to raise their profile both at home and abroad to get a piece of the lucrative luxury pie. Ports, another luxury fashion maker founded in 1961, made its own splash by wooing celebrities and sponsoring clothing for the 2006 movie "The Devil Wears Prada."

FINICKY CONSUMERS

Aspiring Chinese luxury brands may face their toughest battle on the homefront, where shoppers often prefer big international names such as France's LVMH or Hermes that carry more prestige and more than a century of history. One of the few brands to gain anything approaching an international following is Shanghai Tang, a designer of brightly colored chic clothing featuring Chinese themes founded in Hong Kong and now with stores worldwide. "They are brand conscious, it is a little bit of a show-off attitude and what we have seen is that when they have money, they tend to spend on well-known brands," said Renee Tai, an analyst with CIMB-GK Research, referring to Chinese consumers. Chinese brands could face an even rougher road ahead as global brands, well aware of China's rapidly growing wealth, launch major expansion campaigns in the country that include opening stores in second and third-tier cities. Louis Vuitton will open one of its largest stores in the world in Shanghai this year. In the past year, LV has opened stores in second-tier cities of Xian, Xiamen and Tianjin. London's upscale department store Harrods is also rumored to be in talks with Shanghai's municipal government to open its first store outside the United Kingdom. International brands are also adapting to China, with Hermes rolling out a new brand, "Shang Xia" offering luxury accessories at cheaper prices just for China. "They face competition and I think in terms of them being able to take a dominant share of the market, that's sometime off," said Stephen Mercer a partner at KPMG Shanghai. He said Chinese luxury brands could succeed in niche areas such as spirits and jewelry, with Moutai, a Chinese spirit that was served to Richard Nixon during his famous China trip during his presidency, as one such example. read more

(wwd)Barneys Said Near Naming Mark Lee CEO

Barneys New York might have a chief executive officer at last. Mark Lee, who stepped down as Gucci’s president and ceo in December 2008, is in advanced talks to become ceo of Barneys, according to market sources. Lee’s name has been bandied about as a favorite to lead Barneys practically since his exit from Gucci, which came only a few months after Howard Socol stepped down as the store’s chief in July 2008, leaving it without a ceo ever since. It is understood a contract has yet to be signed, but executive search circles are abuzz that Lee — one of the most admired and sought-after executives in the industry — is the clear front-runner. The dapper and slim fashion veteran, who earlier this year joined the boards of Tory Burch and Italian online retailer Yoox SpA, recently has been spotted walking Barneys’ 10-level, 235,000-square-foot Madison Avenue flagship. Lee was traveling Wednesday and could not be reached for comment. A Barneys spokesman did not respond to a request for comment by press time. His appointment would certainly electrify the American retail scene — and heighten the competition in New York at a time when Saks Fifth Avenue continues its turnaround and Bergdorf Goodman is undergoing management changes, with president Jim Gold, come October, splitting his time between Dallas and Manhattan when he becomes president of Neiman’s specialty retail division, which includes Neiman Marcus stores as well as Bergdorf’s. read more

The Style File Daily Cheat Sheet

(wwd)San Francisco Merchants Indicted in Major Counterfeit Ring

Calling it the largest enforcement action against counterfeit goods on the West Coast, U.S. Immigration and Customs Enforcement said Tuesday that a long-term investigation involving $100 million of counterfeit luxury goods has led to the indictments of 11 merchants and clerks from San Francisco’s Fisherman’s Wharf district.  A 25-count indictment charges the defendants with trafficking in counterfeit goods, smuggling and conspiracy. ICE revealed details of the case late Tuesday, after it was unsealed Monday in federal court. ICE said agents seized apparel and accessories bearing fake trademarks of more than 70 brands, including Coach, Kate Spade, Nike, Oakley, Armani, Burberry, Louis Vuitton and Prada. Goods seized included clothing, jewelry and watches, scarves, handbags and wallets, sunglasses and shoes.  The investigation by ICE and Homeland Security Investigations agents into the Fisherman’s Wharf retailers started in December 2007 when U.S. Customs and Border Protection officers intercepted a container at the Port of Oakland containing more than 50,000 counterfeit accessories valued at more than $22 million. The seizure gave the agents the information necessary to target a total of eight shops, as well as nine residences and three storage units in the San Francisco and San Leandro areas over the next several months.  The 11 defendants face penalties of up to 20 years in jail and a $250,000 fine for smuggling goods, 10 years in prison and a $2 million fine for each count of trafficking in counterfeit goods, and five years in jail and a $250,000 fine for conspiring to traffic in counterfeit goods, according to ICE. The case is being prosecuted by U.S. Attorney Deborah Douglas and is part of the Justice Department’s Intellectual Property Task Force.  “To consumers who think designer knockoffs are a harmless way to beat the system and get a great deal, ‘buyer beware,’” said John Morton, director of ICE. “Trademark infringement and intellectual property crime not only cost this country much needed jobs and business revenues, but the illegal importation of substandard products can also pose a serious threat to consumers’ health and safety.”  Federal officials have increased their focus on stopping the flow of counterfeit goods into the U.S. In April alone, ICE seized an estimated $260 million of fake apparel, accessories and other merchandise, a record month for seizures. In the first half of 2010, the agency has already initiated 560 intellectual property cases. In fiscal 2009, ICE initiated 806 intellectual property theft cases, up from 643 in 2008.  The domestic value of goods seized for intellectual property violations in 2009 was $260.7 million, according to statistics from Customs & Border Protection. Sales of counterfeit goods cost legitimate businesses an estimated $250 billion a year in lost sales and revenues worldwide, and are responsible for the loss of 750,000 jobs, according to estimates from the International AntiCounterfeiting Coalition. read more

(AP)Coach 4th-quarter net income rises

Luxury handbag maker Coach says better sales in North America and Asia helped its fourth-quarter net income rise 34 percent. The increase is a sign that Coach's lowered handbag prices and focus on growth in China is paying off. The company says net income rose to $195.5 million, or 64 cents per share. That compares with $145.8 million, or 45 cents per share, last year. Analysts expected 56 cents per share. Revenue rose 22 percent to $950.5 million. Analysts expected $888.9 million. Coach Inc., based in New York, says an extra week in the quarter boosted revenue by $70 million. CEO Lew Frankfort says market share grew in all regions. Revenue in stores open at least a year rose 6.3 percent in North America.

(wwd)Back-To-School Sales Seen Soft in July

There’s unlikely to be a breakout in back-to-school business when stores report July comparable-store sales on Thursday. Preliminary reports indicate that consumers, content in June to leave their b-t-s shopping for later in the summer, kept procrastinating last month. Evidence is growing that they might need more promotional coaxing to open up their wallets, which could hurt third-quarter margins.  “July, with scorching weather and decent traffic trends, should have ensured a solid start to the back-to-school season,” said Brean Murray, Carret & Co. analyst Eric Beder. “Instead, high inventory levels from key players, continued weak economic trends and the consumer shopping later in the season have combined to create what will probably be one of the most aggressive discounting seasons in recent memory, as there are already material price cuts on key categories such as denim and Ts.” Beder said results, particularly in the teen market, were not expected to improve through the b-t-s season, leaving retailers such as American Eagle Outfitters Inc., Abercrombie & Fitch Co. and The Wet Seal Inc. with a glut of inventory or an “unappealing” pricing model. Mike Berry, director of industry research for MasterCard Advisors SpendingPulse, was slightly more upbeat. Although apparel sales slipped 1.1 percent on a year-over-year basis in July, according to MasterCard data, sales at family retailers, a category that includes teen retailers, edged up 3.4 percent. SpendingPulse estimates total U.S. retail sales made by cash, check or credit card. Wary because of the rough-and-tumble action on Wall Street, luxury consumers cut spending last month, driving down jewelry sales 1.2 percent, including a 13 percent dive in high-end jewelry. Excluding jewelry, overall luxury spending was down 0.2 percent, according to Berry. Berry said, “Until consumers see encouraging news over a substantial period of time, they will continue to be skittish.” read more

(wwd)Madonna's Fashion Line Draws Crowds in New York

If you are looking to dress like Madonna from her early days, here you go, oh and you must be a tween. Madonna's new junior's line is exclusively at Macy's, and somehow managed to draw a crowd of mini-Madonna teeny boppers. We can't help but wonder if they even know the songs that made Madonna a legend, and why would anyone feel the need to bring back that style?

Macy’s rolled out the pink carpet for Madonna fans on Tuesday. The performer’s enthusiasts were out in force at the Herald Square flagship for the launch of the Material Girl collection by Madonna and her daughter Lourdes, sold exclusively at the store. But while the collection generated lots of buzz at Herald Square, where all the festivities were centered, in other Macy’s outside New York, it was less of an event and drew fewer shoppers.  Nonetheless, the retailer’s executives remain optimistic about the collection, which is being produced by MG Icon, a joint venture of Madonna, her manager, Guy Oseary, and Iconix Brand Group Inc. — which has already paid Madonna and Oseary $20 million for its 50 percent stake, plus earn-outs. So while Madonna and Lourdes won’t make an appearance for the line until Sept. 22, when they meet sweepstakes winners at the flagship, they no doubt were closely monitoring initial reaction. Teens with blonde streaks in their black hair and dark eye makeup, dressed in black tulle skirts and leggings, waited for the Herald Square flagship to open. A line wound its way from Broadway to West 33rd Street. The first 200 customers on line at six Macy’s locations received a bandeau top from the collection and a $10 Macy’s gift card. Taylor Momsen, the face of the Material Girl collection in advertising and marketing, performed an acoustic set later in the afternoon on the junior floor at the Herald Square location. Like her muse, Momsen has sparked controversy lately for her provocative style choices and for smoking. “In my day, we had Madonna,” said a mother attending Momsen’s appearance with her daughter. “We talk about smoking at home and how bad it is for her. No one in our family smokes. I don’t think Taylor influences how my daughter dresses. Everyone makes their own decisions on how to dress.” “This is beyond anything I’ve seen in my career,” said Terry Lundgren, chairman, president and chief executive officer of Macy’s Inc. “We’ve had 700 million Internet impressions since the collaboration was announced. Word of mouth took off and a grassroots” campaign started. “This has such broad appeal.” read more

(wwd)Defining the New Luxury

Luxury for all? Not like it used to be. So-called aspirational customers — who helped lift the luxury category to unprecedented heights during the boom years — seem to be sitting on the sidelines in the postrecession period: still aspiring, but spending less. “The concept of luxury has restricted again,” said Concetta Lanciaux, principal of Switzerland-based Strategy Luxury Advisors, describing a shift in consumer priorities favoring heritage luxury brands or — at the other extreme — masstige retailers. It makes business more challenging for players in the middle and products that “look like luxury but it’s not luxury.” For example, designers’ second brands are “not doing as well as before [People] prefer to buy less, but a little bit higher,” she explained. “There are consumers that overreached, and during the recession they had to go back to a more appropriate spending habit,” agreed Michael Burke, chief executive officer at Fendi in Rome, noting that was particularly the case in the American market, hard hit by the financial crisis. “The market has become more polarized: either it’s entry price or true luxury….The middle has hollowed out. “You either have to be resolutely upscale, or you’re battling it out on prices,” he continued. “[Luxury goods] is not a democratic product category.” Pam Danziger, president of the Stevens, Pa.-based research firm Unity Marketing, said scores of American consumers who reached beyond their means into the luxury sphere during the boom years pre-2008 have since simply “dropped out” because of the recession. Danziger estimates consumers with household incomes in excess of $250,000 — the top 2 percent in the U.S. — spend three to four times more on luxury goods than the next affluent tier, those in the $100,000-to-$250,000 range. What’s more, given a choice between buying the “best of the best” or “better and occasional best,” the richest consumers preferred the latter option in her most recent research. Based on a survey of some 1,200 affluent consumers in the U.S., conducted last month, Danziger is predicting “cautious behavior” even among elite consumers whose “pent-up demand” for luxury goods led to a spree early in the year that is unlikely to continue. Lanciaux also foresees a tougher second half, noting European luxury brands were buoyed in the first two quarters by a “huge restocking,” plus a rise in the value of the U.S. dollar against the euro that has since eased. read more

The Style File Daily Cheat Sheet

(wwd)Indian Cotton Harvest May Benefit Manufacturers

India, the world’s second-biggest exporter of raw cotton after China, is positioned to produce a healthy harvest this year that could help lower world prices and lift global garment manufacturers. During July, the wettest month in India’s June-to-September monsoon season, farmers planted 9.5 million hectares of cotton, up from 8 million last year. Cotton farmers have been encouraged to plant bigger crops to cash in on higher prices amid concerns over global cotton shortages. The U.S. Department of Agriculture has warned that demand this year may outstrip supply. World cotton production is forecast to increase to 113.9 million bales in 2010-11, an 11 percent increase from 102.9 million bales in 2009-10, the USDA said. However, world consumption may rise to 119.1 million bales next season from an estimated 115.9 million. A strong monsoon season, which followed last year’s drought-like weather conditions across much of India, bodes well for the cotton crop, experts said. India’s repeal of curbs on raw cotton exports also has given a boost to cotton farmers. In April, India imposed a ban on cotton exports in an effort to cool down domestic prices that had risen more than 25 percent since October. It partly lifted the ban a month later and, starting Oct. 1, will remove all limits on cotton exports. While that’s good news for Indian cotton farmers and global textile manufacturers, especially in textile-dependent countries such as Pakistan and Bangladesh, Indian garment manufacturers are unhappy the ban has been lifted. As prices rise and cotton stocks fall, their margins could suffer.  “The government should put a total, permanent ban on cotton exports,” said Rajesh Goyal, owner of Ankit International, a garment factory in the north Indian city of Jaipur that exports to the U.S. and Europe.  Goyal said it was important for the government to support India’s textiles industry, which employs 35 million people directly and 88 million indirectly. Rita Menon, secretary at the textiles ministry, said the Indian government was developing a policy to govern cotton exports. It would determine how much cotton was needed by the domestic textiles industry and how much Indian cotton farmers would produce before deciding whether export limits were necessary, she said. read more

(reuters)Chelsea Clinton Marries in 'Royal Wedding'

Chelsea Clinton -- the only child of the former U.S. president and the U.S. secretary of state -- wed Marc Mezvinsky on Saturday at Astor Courts, an historic 50-acre (20-hectare) estate about 100 miles north of New York City. "Today, we watched with great pride and overwhelming emotion as Chelsea and Marc wed in a beautiful ceremony at Astor Courts, surrounded by family and their close friends," Bill and Hillary Clinton said in a statement. "We could not have asked for a more perfect day to celebrate the beginning of their life together, and we are so happy to welcome Marc into our family," the statement said. Photos showed the bride and groom walking down a broad outdoor aisle between rows of guests. Chelsea wore a strapless white gown with a fitted bodice and full skirt with platinum-colored beading at the waist and a long white veil. The groom wore a simple black tuxedo going down the aisle and in a photo with the Clinton family, and a white prayer shawl and yarmulke in separate photos with Chelsea under a flowering tree and amid wedding guests. In the one photo in which she appeared, Hillary Clinton wore a magenta gown. Bill Clinton, who is pictured walking Chelsea down the aisle, wore a simple black tux with a white boutonniere in his lapel.

GUEST LIST LARGELY SECRET

Apart from the parents of the bride, the only other high profile guests seen in Rhinebeck were Bill Clinton's former secretary of state, Madeleine Albright, actors Ted Danson and Mary Steenburgen and fashion designer Vera Wang. Also spotted was real estate scion and movie producer billionaire Steve Bing. Chelsea Clinton, 30, and Mezvinsky, 32, have known each other since they were teenagers. He is an investment banker, whose parents Marjorie Margolies-Mezvinsky and Edward Mezvinsky were once Democratic U.S. House of Representatives members. Chelsea Clinton, who worked at a New York hedge fund and has more recently studied health policy at Columbia University, has kept a low profile since her father left the White House in January 2001, although she campaigned for her mother during her failed run for the 2008 Democratic presidential nomination. Signs and pictures congratulating the newlyweds hang in many shop windows in Rhinebeck, which has been swarmed by media around the world for an event that experts estimate to have cost between $3 million and $5 million. Airspace above Rhinebeck was closed for 12 hours on Saturday for the wedding and media were kept well away from the entrance to Astor Courts. Security in the area was comparable to that surrounding state visits.The guest list was reported to be between 400 and 500, but did not include President Barack Obama. "Hillary and Bill properly want to keep this as a thing for Chelsea and her soon-to-be husband," Obama said on "The View" talk show Thursday. "It would be tough enough to have one president at a wedding. You don't want two presidents." read more

(wired)Why Do We Care About Luxury Brands?

The pricing of fakes reveals something important about how the human mind calculates value. In many instances, we crave authenticity as an end unto itself. We want the real iPhone not because it works better but because it’s the real one. The same logic explains why we splurge on Hermes bags, Rolex watches, Prada T-shirts, fancy Bordeaux, and expensive art. (How much would you pay for a fake Picasso print?) While a Rolex is a lovely piece of time keeping machinery, the value of the watch has nothing to do with its function. Instead, it depends on the intact authenticity of the brand. It’s easy to ridicule this behavior as mere snobbery. We might look down on the pretentious fools carrying Louis Vuitton luggage, or bragging about their Vertu phone, or wearing underwear with a big logo. We probably assume that they’ve just wasted a lot of money on some costly social signaling, or that they’re using the brands to assuage their deep insecurity. Unfortunately, we’re all vulnerable to the same tendency. There’s now suggestive evidence that our faith in the authentic — especially when the authenticity is supported by effective marketing campaigns — is a deep-seated human instinct, which emerges at an extremely early age. Consider a clever experiment led by the psychologists Bruce Hood and Paul Bloom. The scientists tested 43 children between the ages of three and six. The children were shown a “copying machine” — it was actually tachistoscopes that were modified to have flashing lights and buzzers — and told that it could make an exact copy of any object. After the machine was demonstrated for the kids — the scientists “copied” a block and a rubber animal — Hood and Bloom then told the kids that the machine could also duplicate toys. A ‘‘stretchy man’’ was then placed in the box and the illusion repeated. Interestingly, the young children actually preferred the “duplicate” toy and chose it 62 percent of the time. The kids didn’t worry about the “authenticity” of the stretchy man. But Hood and Bloom didn’t stop there. They also had many of the young kids bring in their “attachment objects,” such as their favorite blanket or stuffed animal. (I still remember losing Johnny, my stuffed penguin, at the tender age of five. Grief.) The scientists then offered to “copy” the object for the kids. Four of the children simply refused — they wouldn’t let their blankie anywhere near that nefarious device. But even those kids who allowed their attachment object to be “copied” almost always refused to see the objects as equivalent. The new duplicate was a bootleg blankie, an ersatz stuffed animal. Even though the children were assured that the objects were identical, they intuitively believed that the copy wasn’t the same. It lacked a history, a bond, a sentimental attachment. It was inauthentic. The same principle applies to brands. Although we outgrow stuffed animals, we never get beyond the irrational logic of authenticity and essentialism. There are certain things whose value depends largely on their legitimacy. While I might listen to bootleg music on my iPhone, I want the phone to be genuine. I want that Apple logo to be real. Why? Because the brand has effectively woven itself into my emotional brain. Because when I see that logo, I don’t see a functional object. Instead, I’ve learned to respond to everything that isn’t functional, all those subtle connotations conveyed in the glossy ads. There are many blankets in the world. But there is only one blankie. The best brands are blankies. read more

(wwd)Retail Stocks Climb Monday

Retail stocks began August by padding their 5 percent bounce in July, rising 2.1 percent on Monday amid signs the economic recovery, while not strong or swift, is being sustained. The S&P Retail Index advanced 8.15 points to 413.21 as the Dow Jones Industrial Average picked up 208.44 points, or 2 percent, to end the trading day at 10,674.38. The Dow’s advance came on top of a 7.1 percent rebound last month. Investors were reassured, if not necessarily elated, over several pieces of economic news Monday. Federal Reserve chairman Ben Bernanke told a conference he expects a pickup in consumer spending in the “coming quarters from its recent modest pace.” The Institute for Supply Management said its manufacturing index stood at 55.5 for July, down from 56.2 in June but still above the 50 mark indicative of production growth. Additionally, The Conference Board reported online job openings increased by 139,200 in July, above the recent monthly average of 43,000. Mid-Atlantic states have been “posting steady and strong upward trends throughout the year,” noted June Shelp, vice president of The Conference Board. Liz Claiborne Inc. logged the biggest advance of the 172 equities tracked by WWD, rising 7.2 percent to $5.08. Retailers leaping at least twice as fast as retail stocks in general included Abercrombie & Fitch Co., up 5.1 percent to $38.84; Nordstrom Inc., 4.4 percent to $35.51, and Macy’s Inc., 4.3 percent to $19.46. The Bon-Ton Stores continued its recent upward trajectory with a 4.7 percent pickup to $10.01, and Zale Corp. continued to gain following Golden Gate Capital’s recent expansion of its stake in the troubled jeweler to 34.5 percent, growing 5.1 percent to $1.85. The advance in U.S. equities followed strong days for stocks in Europe and Asia. The CAC 40 was up 3 percent to 3,752.03 in Paris and London’s FTSE 100 rose 2.7 percent to 5,397.11. Frankfurt’s DAX ended the trading day at 6,292.13, up 2.3 percent. While Tokyo’s Nikkei 225 managed just a 0.4 percent gain, to 9,570.31, Hong Kong’s Hang Sang Index logged a 1.8 percent advance, to 21,412.79, and Shanghai’s SSE Composite Index enjoyed a 1.3 percent increase, to 2,672.52. read more

The Style File Daily Cheat Sheet

(wwd)Profiling China's Luxury Consumer

Luxury brands better get to know the Chinese words er nai and xiao san. Those phrases mean mistress and third girlfriend, respectively, and are whispered on an almost daily basis by well-to-do Chinese. “With some fashion brands, we think that almost half of the sales are for mistresses,” said Rupert Hoogewerf, publisher and head researcher of the Huran Report, China’s rich list. “But this is difficult to ascertain.” Equally difficult is defining exactly who is the consumer driving China’s supercharged luxury consumption since specifics are so hard to come by. “That is the billion-dollar question,” said Charles de Brabant, an adjunct professor of luxury branding at China Europe International Business School in Shanghai, who said many luxury brands don’t fully understand Chinese consumers’ status-motivated shopping. “The brands often say: ‘These customers are not like me. They are bling-bling. They are overnight millionaires,’” de Brabant continued. “It’s a far more sophisticated game that goes beyond the Rolex, the dark sunglasses and the souped-up Porsche.” David Stewart, a partner in Jigsaw International, a lifestyle research agency in Shanghai, said the typical consumer profiles of other markets have no correlation in China. “The luxury consumers in China tend to be younger than in other parts of the world. Some of them are independently wealthy. It’s very unclear where their money comes from,” he said. Industry observers said there are several key consumer groups driving the country’s luxury goods market, which is estimated to come in at $9 billion this year, up more than 20 percent from 2009, according to China Market Research. The shoppers range from office worker women looking to snap up a branded handbag to entrepreneurs in polo shirts eager to please their mistresses. The white-collar “aspirational” shopper is the fastest-growing group in China, according to China Market Research. In their 20s, and often not making more than $400 a month, these individuals will nonetheless save to buy a luxury bag. Ben Cavender, a researcher at China Market Research in Shanghai, predicted that going forward, this group will make up 60 to 70 percent of the overall market. The superrich are another significant category of shoppers. Mainland China has 55,000 individuals with net assets of more than 100 million yuan, or $14.7 million, according to the Hurun Report. “This higher-wealth group tends to be slightly older men, age 44, and over 15 percent of these men live in Beijing. They have their own company, but have made their money from property and investments,” said Hoogewerf. Widening the net, there are 875,000 Chinese millionaires with personal assets of more than 10 million yuan, or $1.47 million. This figure includes the 55,000 superrich individuals mentioned earlier. read more

(wsj)A Fashion Identity Crisis at Wal-Mart

Wal-Mart Stores Inc. cannot seem to find the right fit when it comes to selling clothing. By quietly ousting its U.S. division apparel chief last week, the world's largest retailer acknowledged that its clothing strategy has been a dud. Again. Over the past decade, Wal-Mart has veered from one approach to clothing to another. The discount giant has even tried to emulate rival Target Corp. by stocking its own lines of trendy outfits. At other times the Bentonville, Ark., retailer has placed its bets on bulk packs of everyday wear, like tube socks and T-shirts. "Wal-Mart has suffered from not knowing who they want to be," said Allen Questrom, the former chief executive of J.C. Penney Co. who recently left Wal-Mart's board. "They're either trying to be too fashionable or too basic." Some critics have said Wal-Mart didn't listen to customers or suppliers. Company spokesman David Tovar said Wal-Mart thinks it finally has "the right team in place to lead the apparel business forward. He added that the retailer is "listening to what our customers want and speaking with all key suppliers and letting them know we're working in a collaborative way. The retailer said last month that it was going to focus more on basics like underwear, socks, T-shirts and jeans. Part of the issue for Wal-Mart is that it devotes a relatively smaller space to apparel than Target, where apparel represents about 20% of its revenue. At Wal-Mart clothing is only 10% of sales, so fashion items can crowd out basics but the company has been reluctant to give it more space. Clothing sales, which accounted for about 10% of the U.S. division's $258.2 billion in sales in the company's fiscal year ended Jan. 31, were down from about 11% in the previous year, according to Wal-Mart financial documents. Kelly Tackett, a retail analyst at Kantar Retail, a retail marketing and research consultancy in Columbus, Ohio, said that with so many shoppers trading down during the recession, Wal-Mart missed an important opportunity to grow its clothing business by giving its shoppers more fashionable everyday apparel. read more

(wwd)Buranis of MBFG Arrested in Milan

The opulent lifestyles of Walter Burani and his son Giovanni appear to have caught up with them. The former executives of Mariella Burani Fashion Group were arrested Thursday by the Guardia di Finanza of Reggio Emilia, Italy, a police force under the authority of the country’s Minister of Economy and Finance. The arrests, confirmed by a spokesman for the Guardia di Finanza, were requested by Milan prosecutors Luigi Orsi and Mauro Clerici, who have been investigating Burani Designer Holding for fraudulent bankruptcy. BDH is the parent company of Mariella Burani Fashion Group, which produces and distributes collections for La Perla and Vivienne Westwood, among others, and is under state-supported administration. Walter Burani, former chairman of MBFG, is under house arrest, while Giovanni, former chief executive officer, has been transferred to Milan’s San Vittore prison. The spokesman said the Buranis will now be interrogated by the judge for the preliminary investigations, Fabrizio D’Arcangelo. He added that Walter Burani was granted house arrest because of his age, 77, and “attenuated responsibilities.” Only two years ago, the Burani family seemed to have it all: a growing fashion conglomerate and a life in the fast lane. Tales of second-generation Giovanni Burani living in a Renaissance castle were outdone only by his father Walter’s weekends racing vintage Formula 1 cars.  But the pendulum swung — and swung hard. The once high-flying Mariella Burani Fashion Group said earlier this year it was going to be liquidated, weighed down by debts of more than $600 million, and had to pledge 66.4 percent of the company to Italy’s Centrobanca (UBI Banca Group). read more

(wwd)Congress Passes Duty Relief Measure

Congress has sent a tariff suspension bill to President Obama, ending seven months of increased duties on imported textiles, footwear and apparel components and relieving some of the cost pressures the industry has been facing. The Senate passed the measure by voice vote Tuesday night, sending the measure to the president, who is expected to sign it. The House passed the bill last week on a vote of 378 to 43. Apparel, textile and footwear companies have been paying thousands of dollars in duties on imported components and some finished products since Jan. 1 because Congress let legislation expire that suspended tariffs on hundreds of imported products. The bill, known as the Miscellaneous Tariff Bill, must be renewed by Congress periodically and is meant to help domestic manufacturers compete by giving them tariff breaks on components such as yarns and fibers, or footwear, that are no longer made in the U.S. and must be imported. The 2006 duty suspension bill expired at the end of 2009 and the new bill would extend the tariff breaks through 2012. “This legislation will bring direct and measurable benefits to our economy through job creation and the continuation of well-priced quality products,” said Kevin Burke, president and chief executive officer of the American Apparel & Footwear Association, who called on the president to sign it quickly. “Along with our thousands of employees and our millions of consumers, the U.S. apparel and footwear industry stands to benefit from today’s Senate action and President Obama’s eventual signature.” A key component of the bill is a retroactive provision that will provide full or partial refunds to companies on duties paid on all covered products since January. Textile executives applauded the legislation because it would reinstate the majority of duty suspensions for rayon fiber imports and add several new duty breaks for acrylic fibers. “We’re terribly relieved that this has been done,” said David Trumbull, vice president of trade at the National Textile Association. “Companies took money from other things they might have invested in, like new equipment or worker training, and paid higher duties, while waiting for the government to make them whole, so they really lost the time value of that money.” Footwear executives had concerns about the new bill because some of the imports received higher duties than in the past. According to the law, duty breaks in each category cannot amount to a total loss in tariff revenue to the U.S. government of more than $500,000 a year. If trade grows in a given category, lawmakers increase the duties to bring the overall tariff revenue loss back under the cap. Several hiking boot and shoe imports will see an increase in the duties in the new bill because the volume of imports reached the cap. On the positive side, the measure would still provide many duty reductions on certain imported footwear categories. read more

(wsj)Fashion Nation: What Retailers Know About Us

Luxury-spending data can tell us a lot about the state of the nation—and our own neighborhoods. Take Detroit—not the city where one might expect to see the strongest recovery. Yet when American Express Co. looked at luxury spending in top and midsize cities around the country, Detroit led the list, with growth of 18% in the first quarter of 2010 from the year-earlier quarter. Lo and behold, Ford stock is up, too, suggesting that Detroit's local investors are feeling more optimistic than they were when auto executives were driving hybrids down to Washington to beg for bailouts. New York City, on the other hand, is still cutting back. Luxury spending was down 7.7% in the quarter. Atlanta was down the most at 18.2%. By tracking customers' spending habits, retailers get a bird's-eye view of tastes as they ebb and flow. Online retailers, in particular, see every click we make. They know which brands we've peeked at, how long we pondered, and what we actually purchased. They know the time of day and the days of the week that we shop. They know—and record—our color choices, sizes and tastes so that they can recommend clothes that are in tune with our yearnings. Our banks have nearly as much information about our purchasing habits. "We know where the customers live and we can track their behavior back to where they live," says Ed Jay, senior vice president of American Express's Business Insights unit, which mines its credit-card data for consumer trends and sells reports to clients. American Express says it doesn't provide data on individual consumers. This might seem slightly creepy to pre-Facebook generations who imagine their tastes and habits are private. But all this clicking amounts to a heap of insight into what people are spending on and even what they're thinking about. Some of the data confirm regional stereotypes. Southerners bought more white, green, and pink than other regions' residents, for instance, according to data from private-sale site Hautelook.com, which caters to young, urban professional women. Now I know, too, why I feel like such a loner wearing brown in Los Angeles, where black, white and gray are preferred. Retailers' data also bust a few commonly held beliefs. Though Dallas has a flashy, big-spending image, the average woman there spends less on fashion than one in notoriously frumpy Washington, D.C., according to fashion website ShopItToMe.com. The data also offer a window on populations moving among trendy neighborhoods. ShopItToMe, which notifies members of sales on their favorite brands, observed on its blog recently that New York's "most conservative" dressers reside on the Upper West Side, which has a reputation for being culturally liberal. Of the site's more than 600 brands, Upper West Side residents' favorite is Gap Inc.'s Banana Republic. Meanwhile, residents across town on the Upper East Side favor flashier, more expensive apparel, such as Jimmy Choo shoes. The Web site also looks at city-by-city data. The most popular brand in every ShopItToMe city, including Cleveland, St. Louis, Boston, New York and Los Angeles? Victoria's Secret. Everyone needs underwear. And despite the fashion press's obsession with J. Crew, the company is among the top five brands only in New York City and Boston. Other expectations for the nation only seemto be born out by fashion data—until one looks deeper. When ShopItToMe looked at clothing sizes, the results seemed to confirm what folks say—that women are thinner on the coasts. In New York and Los Angeles, 14% of women selected size 0 tops, compared with only 5% nationwide. ShopItToMe looked at a random sample of 86,225 women who registered between June 2009 and June 2010. But that's not necessarily because of a predominance of tall model types. Petite clothing and small shoe sizes were also popular on the coasts, raising the possibility that the women there are just smaller. Even boredom with fashion appears in demographic data. When the Affluence Collaborative, a research group, asked luxury shoppers to look at a list and choose brands they think are boring, they found that tastes differed by gender. Male luxury consumers with incomes between $75,000 and $199,000—the biggest group surveyed—said they were bored by Saks Fifth Avenue. Women in the category were bored by Best Buy. read more

The Style File Daily Cheat Sheet

Russia's Newest Spy

Move over, Anna Chapman, there's another "Victoria's Secret" agent sending love to Mother Russia -- and her name's Anna, too. Around the same time Chapman and her Russian spy-ring comrades were sent home, federal agents at JFK Airport nabbed a stunning Texas beautician attempting to smuggle state-of-the-art night-vi sion gear to Moscow. Anna Fermanova, 24, who, judging from her Facebook page, shares more about her body piercing than state se crets, "knowingly and intentionally" tried to bring the highly regu lated gear to Russia, according to court papers. Born in Latvia and raised in Plano, Texas, Fermanova was stopped by agents in March at Kennedy Airport with a $7,000 Raptor 4X night-vision weapons sight and two other $4,000 devices, according to the documents filed in Brooklyn federal court. The agents allowed her to travel to Moscow, but arrested her upon her return July 15. She will be charged with attempting to export the devices, which are considered US munitions, at an arraignment in New York later this month. Fermanova, who was released on $50,000 bail and is being kept on house arrest, called the allegations "hilarious and over-dramatized." "I am a US citizen. I grew up in America. I am not a spy -- that is just funny," she told The Post. "I am freaking out right now." Her lawyer Scott Palmer said there was no espionage involved and that Fermanova's husband planned to resell the scopes to big-game hunters, according to The Smoking Gun. The vision goggles cannot be exported without advance approval from the State Department, since the items are considered weapons, officials said. Fermanova works in Moscow giving English lessons to Russian students. Palmer declined to discuss where Fermanova came up with the $15,000 to purchase the three device. Two devices were purchased for $4,000 each, and a third was $7,000. He also said Fermanova emigrated with her parents to the United States from Latvia when she was a young girl and is an American citizen. According to her Facebook page, she is a 2005 graduate of the Ogle School of Hair, Skin and Nails. Records show that she also holds a cosmetologist license in Texas. The arrest of Fermanova comes after red-headed Russian spy Anna Chapman, 28, and nine others pleaded guilty to federal charges and were deported. The ring was arrested on June 27 and released into the custody of Russian authorities after feds arranged for a spy swap earlier this month. Asked about Chapman, Fermanova said, "I don't even know who that is." Immigration and Customs Enforcement began to probe Fermanova in February when a confidential informant reported she was seeking to acquire the equipment. read more

(wwd)LVMH Reports 52.8% Surge in Profits

The economic recovery may be hiccuping, but the prospects for the luxury sector keep brightening. On Tuesday, LVMH Moët Hennessy Louis Vuitton reported a 52.8 percent leap in first-half profits and said July kept the same pace as the first six months of the year, when revenues rose 16.5 percent. “The numbers speak for themselves,” said a sanguine Bernard Arnault, president and chief executive officer of the French luxury giant, addressing analysts at LVMH’s art-stuffed headquarters here. “We are fairly confident for the second half.” The buoyant LVMH results follow strong showings by other European luxury players. Sales at Hermès International jumped 27 percent in the second quarter, while Burberry posted an overall 30.6 percent sales increase in its first quarter. Further good news from the luxury sector could come Friday, when French retail-to-luxury conglomerate PPR is due to report first-half profits and sales. Despite the strong first-half performance, Arnault, like other industry executives, cautioned the global economic picture remains “uncertain.” But he noted, “We have reason to believe business will be buoyant.” Indeed, he noted that “demand is greater than supply for certain products. It’s an enviable challenge, I would say.” On cue, giant screens flashed images of new workshops and tanneries in France and Belgium for Louis Vuitton, which kept up its double-digit pace of sales growth and powered the fashion and leather goods division to a 17.7 percent gain. read more

Dolce & Gabbana to Dress Chelsea Soccer Players

The players at London’s Chelsea Football Club will have a whole new – Italian - wardrobe in time for the opening of Britain’s premier league soccer season next month. Dolce & Gabbana has signed a three-year partnership to design the players’ formal wear and to re-design the directors’ lounge at the Stamford Bridge stadium in West London, the club’s home. The announcement was made during a cocktail party at Stamford Bridge on Tuesday. “We are really happy about this partnership and to be able to link our name to such a prestigious club like Chelsea,” said Domenico Dolce and Stefano Gabbana in a statement. “Football players are style icons both on and off the pitch, and, on top of this, there is our love of England and of London, which has always been a source of inspiration for our work.” The players’ outfits include a three-piece, two-button suit in dark blue wool twill, a blue poplin shirt, and a blue jacquard tie. The team’s colors are blue and white. Chelsea’s lion crest will be embroidered on the suit’s pocket. There is also a blue wool and cashmere coat embroidered with the club’s logo. For the players’ free time, the duo has designed a blue poplin shirt worn with dark blue denim jeans and black calfskin sneakers. read more

(daily mail)Goodbye Size Zero: Plus-size designer fashion finally makes its debut

The fashion world may continue to argue the plus-size debate for years to come, but one company has taken matters in to its own hands. Saks Fifth Avenue, the ultra chic American department store, will soon be adding plus-sized clothing to the high-end floor of its world famous New York branch - a major coup for designers, shoppers and the fashion industry alike. Due to hit rails in conjunction with the Autumn/Winter 2010 collections, garments that were last season only available up to a US size 10 (UK size 14) will soon be up for grabs up to a US size 14 (UK size 18) and some styles may even be produced up to a US size 20 (UK size 24). Saks Fifth Avenue's legendary third-floor houses collections from the world's most exclusive and celebrated designers. Fashion powerhouses such as Chanel, Dolce & Gabbana, Akris, Armani, Carolina Herrera, Escada, Donna Karan, St. John, Oscar de la Renta, Max Mara, Valentino, Michael Kors, Yves Saint Laurent, Alexander McQueen, Fendi and Roberto Cavalli can be found covering the floor space of the internationally revered store. With such a wealth of designers soon to be available in larger sizes, designer hungry women can look forward to buying everything from trouser suits to evening gowns and everything in between. This gleam of light in the very murky waters of the plus size argument does have one catch, however. Styles are likely to be produced as one-offs or in small numbers while the trial takes place. There may be many women clamouring to get their hands on this season's hottest items, but only a few lucky ladies will be able to bask in the glory of Saks' plus-size designer heaven. If the trial goes well, Saks will roll out the new venture to its other US stores. Hopefully Saks' UK counterparts will take heed and plus-size designer wear will soon be widely available on this side of the pond too. Hot on the heels of plus-size model Crystal Renn's backlash against the Fashion for Passion campaign shots taken by photographer Nicholas Routzen, in which she was dramatically retouched, the news of Saks' stance on the whole sizing issue is certain to reignite the ongoing plus-size debate. With designers only recently welcoming plus-size models on to the catwalks and the size zero phenomenon still going strong, Saks brings the whole debate to a brand new juncture. One most definitely providing a cause to celebrate. read more

The Style File Daily Cheat Sheet

Resort 2011 Trend:The Long Way

Whether slender or swirling, resort’s ankle-grazing dresses have a decidedly breezy air. See WWD's collection of long silhouettes for Resort

(wwd)Consumer Confidence Falls in July

Consumer sentiment fell for the second straight month in July, a potentially bad omen for the back-to-school selling season. The Conference Board’s Consumer Confidence Index dropped to 50.4 for July, down from 54.3 in June and 62.7 in May. Economists were expecting a milder decline to 51. Shoppers were more negative in their take on current economic conditions and in their outlook. “Consumer confidence faded further in July as consumers continue to grow increasingly more pessimistic about the short-term outlook,” said Lynn Franco, director of the group’s Consumer Research Center. “Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves. Given consumers’ heightened level of anxiety, along with their pessimistic income outlook and lackluster job growth, retailers are very likely to face a challenging back-to-school season." The Present Situation Index fell to 26.1, from 26.8 in June, and the Expectations Index pulled back to 66.6 from 72.7 a month ago. read more

(bloomberg)LVMH First-Half Net Income Rises

LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, reported first-half profit that beat analysts’ estimates as sales of fashion and leather goods accelerated in the second quarter. Net income rose 53 percent to 1.05 billion euros ($1.36 billion), the Paris-based company said today in a statement after the market closed. The average estimate of 10 analysts compiled by Bloomberg was 956.2 million euros. Second-quarter sales advanced 22 percent to 4.63 billion euros. Demand for luxury goods is returning as Chinese shoppers buy more high-end clothing and accessories, and U.S. and European retailers replenish inventories after the recession. Hermes International SCA, the French maker of luxury handbags and silk scarves, said last week that revenue may grow as much as 12 percent this year, excluding currency swings. “Visibility on results for the sector and particularly for LVMH should be quite good over the next 12-18 months,” HSBC analysts Erwan Rambourg, Antoine Belge and Sophie Dargnies wrote in a July 7 note. Demand for Louis Vuitton luggage and Hennessy cognac will remain “resilient” and currency fluctuations will offer a “substantial boost” to margins, the analysts wrote. They have an “overweight” rating on the stock. LVMH fell 2.77 euros, or 2.9 percent, to 92.26 euros today in Paris. The shares have gained 18 percent this year, giving the maker of Moet & Chandon champagne and TAG Heuer watches a market value of 45.2 billion euros.

Product Launches

“In the current recovery from the economic crisis, LVMH will continue to gain market share thanks to the numerous product launches planned before the end of the year, to its geographic expansion in promising markets and to its cost management,” the company said in the statement. First-half revenue increased 16 percent, or 14 percent excluding currency swings and acquisitions, LVMH said. On a local currency basis, sales gained 18 percent in the U.S., 21 percent in Asia and 11 percent in Europe, the company said at a press conference. Sales rose 27 percent in China. At the fashion and leather-goods unit, the company’s largest, sales climbed 18 percent, LVMH said. Watch and jewelry revenue advanced 28 percent, slowing from the first-quarter’s 33 percent surge, as restocking effects faded. Sales of wines and spirits gained 21 percent, while perfume and cosmetics advanced 12 percent, LVMH said. Revenue at the selective retailing unit, which includes Sephora and DFS, rose 14 percent. read more

Forever 21 CEO: We Don't Have Designs on Pregnant Teens

Fashion retailer Forever 21's debut collection of maternity wear, Love 21, has some concerned that the brand is targeting (and thus condoning) pregnant teenagers. Love 21 is now available in a select locations in Arizona, Alaska, California, Utah and Texas, which also happen to be the U.S. states with the highest rates of teen pregnancy, according to a January 2010 report from the National Campaign to Prevent Teen Pregnancy. Forever 21 EVP Larry Meyer responded: "Forever 21 did not create, design or distribute Love 21 Maternity to target, or appeal specifically to pregnant teens. Any relationship between teen pregnancy rates and the locations of our stores is unintentional." While the "21" in the maternity collection's name echoes the parent brand, the flap also begs the question: so what if Love 21 appeals to moms-to-be of all ages? Don't teens deserve fashionable maternity wear, too? Take it from us: Staying fashionable while pregnant tends to increase the budget in tandem with the belly size, so Love 21's $8.80 cropped leggings and $19.80 cardigans would be welcomed by any mom-to-be. Controversy is nothing new for the brand, which was founded in 1984 by Don Chang, a South Korean immigrant. It has a track record of fashion designers balking at its copycat designs, prompting lawsuits from the likes of Anna Sui and Balenciaga. Chang's original retail moniker of Fashion 21 changed to Forever 21 when its range of trendy, moderately-priced clothes won favor with customers under 21, although it has expanded beyond teen apparel in recent years. Today, the retail chain bills itself as affordable, one-stop shopping for all, with men, kids and women's apparel sections, where high school and college-age shoppers can be found browsing the racks next to career women and moms. read more

(wwd)Retail Stocks Break Into Black for Year

Both retail stocks and the broader market slinked back into the black for the year Monday as investors retraced their steps following a sharp drop in the wake of Europe’s debt crisis and a drop-off in the U.S. consumer’s enthusiasm about spending. The S&P Retail Index rose 1.8 percent, or 7.51 points, to 415.68 Monday, giving the measure of overall retail stocks a 1.1 percent gain for the year. That means investors who bought into retail Monday morning fared better than those trading into the sector almost seven months ago. Retail stocks are still down 16.8 percent from their April high of 499.41. Of the 172 stocks tracked by WWD, The Bon-Ton Stores Inc. had the strongest showing for the second straight trading session with a gain of 11.5 percent to $9.83. Over the two days, shares of the regional department store firm shot up 23 percent despite no apparent developments at the company. Over the past week or so, investors have looked past signs the economic recovery will remain frustratingly tepid and pushed stocks higher on the strength of second-quarter results from big corporations.  And they started off the week with some encouragement from the down — but not totally out — housing sector. Sales of new homes shot up to an annual rate of 330,000 in June, up 23.6 percent from May, according to the Commerce Department. The sales rate is still 16.7 percent below a year earlier but was somewhat better than economists were expecting. The Dow Jones Industrial Average advanced 1 percent, or 100.81 points, to 10,525.43 Monday.  That puts the U.S. market up 0.9 percent for the year. For investors to do better than Wall Street in a major market, they would have had to travel to Frankfurt, where the DAX has posted a 4 percent rise since Dec. 31. Major indexes in London, Paris, Tokyo and Hong Kong are all down for the year. read more