changing delta borgo goes blue apple revamps
TRANSCRIPT
DAILY EDITION OCTOBER 19, 2016 1
Fashion. Beauty. Business.
Changing DeltaDelta Galil taps Paula Schneider as chief of DG Premium Brands.
Page 3
Apple RevampsAngela Ahrendts reveals details of a new look for Apple’s stores.
Page 10
Borgo Goes BlueEddie Borgo and Tiffany have collaborated on a fine-jewelry collection.
Page 4
● Patrizio Bertelli, Diego Della Valle and Brunello Cucinelli were among the speakers at the Milan Fashion Global Summit on Wednesday.
BY ALESSANDRA TURRA
MILAN — See-now-buy-now doesn’t have that many fans in Italy.
At the Milan Global Fashion Summit orga-nized by Class Editori on Tuesday, leading Italian executives expressed their skepti-cism of the phenomenon. The main focus of the conference, though, was the digital revolution and the challenges it presents.
“The fashion system is wrong. When we talk about digitization and see-now-buy-now we have to consider time,” said Prada chief executive officer Patrizio Bertelli. “After 20 years we are still discussing about show calendars but the problem is always the same: while in the Eighties rea-sonable dates were chosen for the men’s shows, the women’s schedule is still a problem. Companies need to spend more money because deadlines are too tight and there is not enough time for an industrial
● The luxury brand’s second-quarter sales bounced due partly to a U.K. shopping frenzy.
BY SAMANTHA CONTI
LONDON — Smaller British companies may be suffering its ill effects, but the weaker pound is poised to give Burberry’s year-end profits a much-needed boost of up to 125 million pounds, or $152 million, and has already pumped up second-quar-ter sales.
Burberry’s sales, which were down 3 percent in the first quarter, turned positive in the three months to Sept. 30, the period that followed Britain’s vote to exit the European Union.
The vote, and the uncertainty it created, sent the pound tumbling against the dollar and euro, spurring tourists and locals alike
BUSINESS
Italy’s FashionEntrepreneursSkeptical ofInstant Fashion
BUSINESS
Weak PoundOn Track To PowerBurberry
CONTINUED ON PAGE 8
CONTINUED ON PAGE 12
Though almost a full month into fall — 28 days, to be exact — the East Coast has been experiencing a hot spell. With temperatures topping 80 degrees, this week’s unseasonably warm weather saw New Yorkers digging out their summer wardrobes. For more warm-weather style — and a closer look at climate change’s effect on retail — see pages 6 to 8.
Hot Wired
Phot
ogra
ph b
y Le
xie
Mor
elan
d
OCTOBER 19, 2016 3
NEWSMAKERSThis Week’s Most Talked About Names In Our Industry
Pat McGrath
Katrina vanden Heuvel
Patrizio Bertelli
Eddie Borgo
● The former American Apparel exec will be responsible for Seven For All Mankind, Splendid and Ella Moss.
BY LISA LOCKWOOD WITH CONTRIBUTIONS FROM KARI HAMANAKA
Delta Galil Industries Ltd. has tapped Paula Schneider, former chief executive officer of American Apparel, as ceo of DG Premium Brands, responsible for Seven For All Mankind, Splendid and Ella Moss.
Susan Kellogg, who has served as president of DG Premium Brands, will remain with the company as a consultant until the end of the year. Barry Miguel, president of Seven For All Mankind, will be leaving the company as a result of the restructuring to pursue other interests.
Isaac Dabah, ceo of Delta Galil, said, “Paula brings an entrepreneurial mind-set, demonstrated leadership skills and strong vision, which will be instrumental in executing our ambitious goals for these brands.”
“Seven For All Mankind, Splendid and Ella Moss are all leading premium brands with strong consumer appeal,” Schneider said. “With Delta Galil’s extensive manu-facturing expertise, high-quality products and commitment to innovation backing me, I am excited for the tremendous opportunities ahead in growing each of these brands.”
Schneider, who was speaking Tuesday at Fortune’s Most Powerful Women Sum-mit in Dana Point, Calif., told WWD that she wanted to take the job because her background was “first and foremost” con-temporary. “I like the idea of going back into contemporary. I think the brands are very strong, and I think there’s a lot of potential,” she said. Schneider will be based in Los Angeles.
She said she will look at opportunities both domestically and global to grow these three brands. “My initial priorities are always product, it’s making sure the prod-uct is the absolute best it can be, and it’s the execution of making sure you get it out at the right time with the value proposition, and then a strong marketing campaign.”
Discussing whether the three brands would eventually consolidate in one facility (Splendid and Ella Moss are in downtown Los Angeles, and Seven For All
Mankind is in Vernon, Calif ), she said, “I think the plan is to have the three brands consolidate into one building. There’s already been consolidation of some tasks because you’ve got three businesses that were run as two businesses. You had Splendid and Ella, and Seven in a differ-ent facility, and a lot of the back end was duplicative so the new ownership made the decision to streamline it.”
Prior to serving as ceo of American Apparel, Schneider was president of Warnaco Swimwear Group, president of Laundry by Shelli Segal and president of sales at BCBG.
In June, Delta Galil acquired Seven For All Mankind, Splendid and Ella Moss from VF Corp. for $120 million. At the time, Delta Galil said it sought to bolster the brands’ wholesale market share, optimize the supply chain, become more efficient and expand the product categories. The acquisition was expected to add more than $300 million to the company’s top line annual sales and was expected to contrib-ute to earnings in 2017. The deal closed in the third quarter of 2016. Last month, 55 layoffs took place at Splendid and Ella Moss, and 50 layoffs occurred at Seven For All Mankind across multiple departments.
Asked if there would be more layoffs, Schneider said, “I have no idea. I haven’t stepped foot in the building yet.” She begins today.
At the time of the acquisition, a Delta
Galil investor presentation, based on data from VF Corp., revealed a steady decline for the group in both revenue and earnings before interest, taxes, depreciation and amortization since 2012. The company that year reported EBITDA of $74 million on revenue of $446 million. The three brands last year had revenue of $344 million and EBITDA of $23 million. The group’s EBITDA this year was projected at the time of the deal to be about $10 million on revenue of about $300 million.
Delta Galil described opportunities in the market for all three labels in its acqui-sition presentation. The two-year growth program for Seven For All Mankind included store improvements, product innovation, supply chain efficiency and growth at wholesale for the 16-year-old premium denim brand. The plans for Splendid and Ella Moss called for the expansion of Splendid men’s, closure of underperforming stores and build out of e-commerce among other tactics.
The three businesses had been overseen by Kellogg, who had served as president of contemporary brands for VF Corp., (prior to the sale) for seven years. Earlier she was ceo of Elie Tahari and group president of Liz Claiborne. Miguel was global president of Seven For All Mankind for over five years, before which he was global ceo of Tracy Reese and global president of Zac Posen.
Schneider assumed the ceo role of American Apparel in January, 2015 and was originally charged to lead a turn-around of the struggling company, but resigned last month amid plans to sell all or part of the retailer. During her tenure, the company filed for Chapter 11 bankruptcy 10 months into her arrival, in a move to enable it to start rebuilding the brand. The company emerged from bankruptcy in February.
Her resignation letter, which was obtained by WWD, said the “sale process currently under way for all or part of the company may not enable us to pursue the course of action necessary for the plan to succeed nor allow the brand to stay true to its ideals. Therefore, after much deliberation, and with heavy heart, I’ve come to the conclusion it is time for me to resign as ceo.” She said in her letter that little could be done in her first year in business, blaming the company’s debt and “macroeconomic headwinds in retail that have proven challenging for American Apparel along with most other specialty retailers in the U.S.” Chelsea Grayson, American Apparel’s general counsel and chief administrative officer, succeeded Schneider as ceo last month.
● The departure comes as the brand’s parent company looks to be choosier, focusing on markets with more growth.
BY EVAN CLARK
No more fish and chips for Banana Republic.
Gap Inc. said its higher-end brand would close its eight stores in the U.K. as part of an effort laid out in May to place its retail bets in markets that offer signifi-cant growth.
“After a thorough evaluation process, the company has decided to close eight Banana Republic stores in the United Kingdom,” a Gap spokeswoman said. “The company anticipates that the majority of the stores will close by the end of fiscal year 2016. Banana Republic
will continue to serve customers in the United Kingdom through www.bananare-public.co.uk.”
She said Banana Republic continues to have more than 650 company-oper-ated stores in North America, Japan and Europe, over 100 franchise-operated stores in more than 20 countries globally and a web presence in 90 countries.
Rents are generally higher in interna-tional markets for U.S. retailers and it requires significant investment to build brand awareness abroad.
In May, Sabrina Simmons, Gap Inc.’s chief financial officer and executive vice president, told Wall Street analysts that, “We’re committed to focusing the busi-ness to gain market share in key strategic markets, where we believe we are struc-turally advantaged and/or where there’s significant runway for growth.”
With that thinking in mind, she said the company would wind down its 53-door Old Navy business in Japan this year in addition to closing “a number of dilutive Banana Republic stores, primar-ily internationally.”
Ike Boruchow, a retail analyst at Wells Fargo, said Banana Republic has been struggling for the last two years.
“It’s been a lot of change on the design side and being an apparel retailer in gen-eral has just been tougher and tougher,” he said, noting the company appeared to be “reining in the riskier part of their profile” and “allocating resources where they actually see growth and see poten-tial to take market share.”
Banana Republic’s comparable-store sales last month fell 9 percent, or 6 per-cent excluding the impact of a fire at its Fishkill, N.Y., distribution facility.
THE MARKETS
Paula Schneider Named CEO of DG Premium Brands
Paula Schneider The Photo Issue ● A look at the industry’s most
in-demand photographers and some
favorite pictures from the archives.
Blurring the Lines ● Denim is morphing into an
all-encompassing lifestyle category.
Beauty Winners ● Previewing the Cosmetic Executive
Women’s award honorees.
Making Their Mark ● Female executives in real estate
have been coming into their own.
PLUS: ● Social Studies ● The Essentialist
OUT THIS WEEK IN
“I think a great image, first of all — however it looks — it has to have a purpose.”
— PETER LINDBERGH
Sch
neid
er p
hoto
grap
h by
Dov
arga
nes/
AP/
REX
/Shu
tter
stoc
k; M
cGra
th b
y Le
xie
Mor
elan
d; v
ande
n H
euve
l by
Thom
as Ia
nnac
cone
; Bor
go b
y N
eil R
asm
us/B
FA/R
EX/S
hutt
erst
ock
RETAIL
Banana Republic to Exit U.K. Retail
OCTOBER 19, 2016 4
● The retailer tapped the designer for a seven-piece fine jewelry collection.
BY JESSICA IREDALE
NEW YORK — Tiffany & Co. has literally been a household name for Eddie Borgo for as long as he can remember.
“Growing up as an American with a mother who wore [Elsa] Peretti and a grandmother who wore [ Jean] Schlum-berger, I have had Tiffany in my life in some ways since I was a very small child,” said Borgo. “We had Tiffany crystal and Tiffany silver in our home.” His mother bought baby rattles and silver spoons as gifts wrapped in blue boxes tied with white bows.
Borgo’s relationship has progressed beyond consumer and fan of the brand. His first seven-piece fine jewelry capsule collection for the company launches in November at Tiffany’s Fifth Avenue flagship in Manhattan as well as on tiffany.com for a limited time. This is a big deal for Borgo, who introduced his costume and fashion jewelry label in 2008 and expanded into handbags a year ago.
“Tiffany has a legacy in terms of jewelry and that, in my humble opinion, is untouch-able by any other American company,” said Borgo. “To have our name associated with their brand is such a huge gift.”
It’s a gift that gives on several levels. Aside from one-off custom pieces for pri-vate clients, this is Borgo’s first fine jewelry collection, each piece done in 18-karat gold and one or two freshwater pearls, which are expensive raw materials.
“We would never have been able to execute and develop this within our house, which is part of the reason why, financially, I was so interested in work-ing with Tiffany,” said Borgo, noting that his designs for the capsule are relatively large scale and utilize large amounts of gold, which required a partner with the resources to realize them.
For Tiffany’s part, working with a designer such as Borgo, known for his refined edge — cones and studs are a sig-nature motif — seems to be in line with the traditional jeweler’s recent quest to raise its fashion credibility. Last year it part-nered with Dover Street Market on its first collaboration with an outside company and in April it began selling the Tiffany T collection through Net-a-porter, the brand’s only global wholesale channel. In July, the retailer tied up with Reed Krakoff, who will collaborate on its home, gifts and leather goods collections.
“Tiffany has always had a legacy of seeking out beauty and innovation,” said the firm’s design director Francesca Amfitheatrof. “This [Borgo’s collection] kind of collaboration, where we work together with designers with a really distinct point of view, results in unique, fresh design.”
A year in the making, the collaboration stems from the CFDA/Vogue Fashion Fund Tiffany & Co. Development Grant that Borgo received in 2011, which was when he developed a business relationship with the jewelry behemoth. Through the CFDA/Vogue Fashion Fund, the company asked designers to create a capsule collection inspired by its affiliation with the Whitney Museum (Tiffany has pledged to sponsor
three consecutive Whitney Museum Biennials beginning in 2017). More spe-cifically, the project’s designated muse was Gertrude Vanderbilt Whitney, the museum’s founder, an heiress born into the Vanderbilt family in 1875, who went on to be a successful sculptor and pioneer and patron of the downtown New York art scene. Her studio and gallery on West 8th Street in Manhattan became the first Whitney Museum of Art.
“We had to create connectivity between what we do as a metalsmith and jeweler here in New York, which is embedded in structure, minimal form and geometry, and what Tiffany does, which is much more organic and fluid,” said Borgo. “And then considering the body of work that Gertrude left behind, which were these beautifully draped forms.” She was also known for her love of pearls.
Borgo worked with Amfitheatrof on
the collection, which features a necklace, bracelet, pendant, earrings, a ring, brooch and ear cuff. The lines are cleanly sculp-tural but not severe.
“I find the tension between Eddie’s love of classicism and form really refreshing and interesting,” she said. “He manages to combine a very high-end sensibility with street edge, and I love that contrast and freedom.”
Borgo brought the grandfather mold of the safety chain choker that is part of his collection of classics to the Tiffany gold-smiths to hand-drape a fold of gold over the choker, from which a pearl dangles. “That was quite the learning curve for me,” he said. “In particular to work with goldsmiths who are hand hammering these sheets of gold into what essentially became liquid gold fabric.” Each piece is engraved with Eddie Borgo for Tiffany, using Borgo’s actual signature rather than his company logo.
Prices are significantly higher than Borgo’s own collection, which ranges from $75 to $600. The Eddie Borgo for Tiffany pieces start at $600 for the ear cuff and go up to $12,500 for the collar necklace. The earrings are $1,900 and the pendant, $3,800. “In a transparent way, this gives us the opportunity to gauge the appetite of our consumer for fine jewelry,” said Borgo. “This collaboration with Tiffany gives us insight into who that client is.”
On the topic of growing his company, of which he is sole owner, chairman and chief creative officer, though he has worked with angel investors, Borgo says branching into fine jewelry is on the radar but isn’t nec-essarily the number-one priority. Fashion jewelry is the core business, but the hand-bags he launched last year are growing. He’s also done a small number of desktop objects such as paperweights, pencil hold-ers and letter openers, and is very inter-ested in the home and furniture market. As Borgo said, “I’ve always seen the company becoming much more of a design firm than a fashion or jewelry house.”
FASHION
Eddie Borgo Joins Tiffany & Co. As Collaborator
Phot
ogra
phs
by G
eorg
e C
hins
ee a
nd N
eil R
asm
us/B
FA/R
EX/S
hutt
erst
ock;
sty
ling
by R
oxan
ne R
obin
son
Eddie Borgo
A brooch, pendant and ring, all in 18-karat gold with freshwater pearls,
from the Eddie Borgo for Tiffany & Co. fine-jewelry collection.
OCTOBER 19, 2016 5
OCTOBER 19, 2016 6
New Yorkers were in for a surprise this week as
record temperatures hit the Eastern seaboard. The
warmer air saw city dwellers ditching their outerwear
for easy jumpsuits, cotton Ts, cropped sweaters and
denim shorts.
THEY ARE WEARING:NEW YORK’S WARM FRONT
Phot
ogra
phs
by L
exie
Mor
elan
d
OCTOBER 19, 2016 7
● To date, 2016 is the warmest year on record, which is impacting apparel retailing.
BY ARTHUR ZACZKIEWICZ
The heat is on.The weather has been a popular topic,
particularly in the Northeast this week, as temps have returned to the balmy 80s. But this latest warm wave is just a part of an ongoing trend. This past July, as vaca-tioners cooled off at beaches along the Cal-ifornian coast, Florida, the Hamptons and San Sebastian, Spain, a report from NASA was published noting that the average surface temperature of the Earth reached the highest level for the first six months of the year since the data was first recorded by scientists in 1880.
The report punctuated a series of warn-ings, reports and evidenced-based data from climate scientists that the human impact on the planet had reached a point of no return; that excessive flooding, drought and extreme temperatures will now be commonplace. Economists expect the global gross domestic product to be 23 percent lower in the next 80 years than it is today due to the effect of climate change, according to researchers at Stan-ford University. These reports helped fuel President Obama’s meeting with Chinese officials, which resulted in both countries signing onto the Paris climate agreement.
For the world of fashion apparel retailing, the issue of climate change and its impact on business has woven its way through a variety of discussions and initiatives across the market and involved brands such as L’Oréal, Levi Strauss & Co. and VF Corp., among many others. And government agencies and nonprofits have spoken in detail about best practices for textile firms to mitigate the impact of climate change.
For consumers, there’s been a not-so-subtle shift — led by Millennials — toward supporting brands and products that are made by good stewards of the planet. Meanwhile, the economic impact of climate change continues to be a burden for many as innovators respond to these planetary changes with new technologies.
One easily noticeable effect of the impact of climate change on fashion apparel and retail are sales of outerwear. Last year’s lack of “sweater weather” caused by record warmth during October, November and December, resulted in excess inventory of sweaters, jackets and coats.
Benjamin Auzimour, U.S. managing director for Saint James, said the winter of 2015 “was a sad example of how people just don’t know what to wear anymore, which had a direct impact on one of Saint James’ core businesses: wool knitting.”
“We’re famous for our tight-knitted wool seaman sweaters that originally protected sailors against the elements, and although we don’t want to renounce that heritage and know-how, we’re presenting some col-lections that are now more disconnected from seasons — lighter, softer, airier, with finer gauges, so as to give people more flexibility,” Auzimour said.
Dr. Steven J. Hausman, a futurist, technology consultant and president of Hausman Technology Presentations, said climate change is “indeed having a direct effect on fashion and apparel retailing.”
“For example, a number of large retail-ers indicated last year that there were
major shortfalls in selling winter-related apparel such as coats, hats and scarves,” Hausman said. “Last January, Macy’s stated that they would be cutting approximately 4,500 positions. This was at least partially attributable to the reduced sales level.”
Hausman also noted that over the years “winter apparel shows up in stores at the end of summer. But if weather patterns continue to result in hotter and longer summer seasons that extend into the fall, then the public will be more likely to delay their purchases until a time when they feel that winter is imminent and the cold weather actually arrives.”
As a result, Hausman said early sales of outerwear and sweaters “would be delayed and producers may decide to ship in-season rather than with so much lead time. Consumers have also become accus-tomed to buying when an item is on sale. If inventory levels of cold weather goods are bloated by a lack of early sales, then price cuts are more likely to occur.”
For consumers, Hausman described this price-slashing scenario as a benefit. But it harms retailers and suppliers. And played out, ongoing climate change can redefine the entire retail apparel market.
“The retail clothing industry in most of [the U.S.] has historically been accustomed to four distinct seasons,” he said. “If the winter season is curtailed or even elimi-nated and summer is extended, then we could potentially be seeing a retail envi-ronment with only two major seasons. The first would be a long, hot and protracted summer. This would be followed by a sea-son consisting of a temperate fall, moderate winter and warmer-than-usual spring.”
On the supply and textile side of the business, Hausman said fabric produc-tion and cost is sensitive to changes in climate. He noted, for example, that the “cotton plant is best grown within a certain specific temperature range. With temperatures up to 90 degrees Fahrenheit, the yield of the plant increases. Above that temperature yields begin to dip sharply. Similarly, cotton requires sufficient
amount of water to grow optimally. As the amount of water that can be drawn from rapidly deleting aquifers is reduced crop yields will decline.”
Combatant Gentlemen chief execu-tive officer Vishaal Melwani said climate change has not impacted his company’s wool sourcing or manufacturing, “but it has affected us on the cotton side. Climate change has been slowing crop growth, and we’ve seen prices inch upward between 5 and 6 percent within the past two years.”
Cotton prices per pound have jumped from $60 in early 2015 to more than $70 today.
Melwani said that more importantly, the biggest impact is on the end product. “We haven’t been experiencing particular cold weather, especially here on the West Coast, and that dictates demand for particular goods, which informs our design and sourc-ing processes,” the ceo explained. “We’re using lighter fabrics, materials and canvas-ing. Our shorts were selling out in January. That’s something I’ve never seen before. We are, though, a non-seasonal brand. Climate change doesn’t affect us as much as it might a bigger label that operates on a more tradi-tional, seasonal lifecycle.”
To mitigate the impact of weather on his business, Melwani turns to technology and data as well as on-demand manufacturing, which is offsetting climate change-related costs. “We’ve built a technology system that accrues and analyzes the data we need to inform our business strategies,” the ceo noted. “Climate is so fickle and we know not to rely on the idea of seasonality or weather alone to make sourcing and purchasing decisions, which is why we invest so much time and energy refining our technology. The more information we know, the better we can communicate with our material providers and make decisions for Combatant Gentlemen.”
Meanwhile, the shift of collections to a “buy-now” model is also being influenced in part by climate change. Earlier this year, Scott Tepper, fashion buying and merchan-dising director at Liberty, told WWD that
the store has been seeing “a very distinct change in our customers’ shopping pat-terns” and therefore decided to take some calculated risks for the early spring buys to reflect them.”
Tepper noted that it is no longer viable “to offer the customer nothing but light-weight fabrications in December, January and February. We’ve learned there is a substantial customer block that wants newness in everything from overcoats to chunky knits to cold-weather accessories when the weather warrants them — and not before — but he’s bored by carryover fall styles.”
Kat Rosati, brand manager at Apparel Booster, a branding, marketing and production coordination firm, said the preference for more “in-season fashion” is due to changes in weather patterns. Rosati said there are “smaller collections and more frequent releases where the products on the shelves at the retailers are more reflective of what is going on now.
“There seems to be this shift and focus into more transitional collections featuring some colors from the previous collection and some that will be featured in the next collection as a way to bridge and be there for the consumers,” Rosati said. “I am also seeing with several of my clients that when it is very hot out consumers are not out shopping as much. Or rather, they are browsing less.”
Rosati said this consumer behavior is typical of bad weather in general, “but for example, a boutique I work with in California notices that when temperatures get around 100 degrees people tend to try and stay inside and sales are really low. They just simply do not want to go out in the heat.”
Rachel Tabbouche, ceo and founder of the UnderCoverWaterWear.com, which offers fitness and “on-the-go apparel” for women, said “when warm weather starts as early as March and extends into October and sometimes even November, in regions where this is nontraditional, it throws off
RETAIL
Is Climate Change Killing The Seasonality of Fashion?
CONTINUED ON PAGE 8Phot
ogra
ph b
y Ly
nne
Sla
dky/
AP/
REX
/Shu
tter
stoc
k
Scientists believe weather events are getting more severe because of climate change.
OCTOBER 19, 2016 8
the seasonal retail calendar. Consumers are wearing the same clothes for longer periods of time and just forgoing the sea-sonality. The calendar might say it is fall, but you’re not thinking of down coats and bulky sweaters when it’s 80 degrees out.”
The notion of losing the seasonality of fashion apparel is not new. In January 2000, WWD reported on how “global warming” was affecting fashion. In a reported dated Jan. 31, 2000, Kal Rutten-stein, senior vice president and fashion director at Bloomingdale’s at the time, told WWD that shoppers “in any of the departments are now wanting to see how the weather goes each season before they buy anything. Big, thick bulky coats — to buy them in July and save them for fall? People don’t do that anymore. People layer and buy closer to the time of need.”
In that same report, warm weather was blamed for poor sales of the Donna Karan New York Collection, which was anchored by double-faced cashmere blanket dress-ing. Weak outerwear sales were also cited by many department stores that winter.
Today, despite more advanced weather forecasting, the issue remains problematic
for retailers. But on the product devel-opment front, manufacturers have responded to climate change by offering better wicking fabrics as well as UV-block-ing materials. Comfort has also played a role, which includes the launch of Fruit of the Loom men’s “cooling boxer briefs,” for example. Other innovations include Cocona Inc.’s 37.5 Technology, which is designed to cool the body via a unique fabric design. And late last year, WWD reported that unpredictably warm winters and a rising number of consumers who are residing in perpetually warm climates just north of the equator as well as the Middle East has spurred the creation of “trans-seasonal collections.”
In the September issue of Science maga-zine, a team of researchers led by Po-Chun Hsu and Alex Y. Song published a research report on “Radiative human body cooling by nanoporous polyethylene textile.”
“Energy consumption and climate change are two major issues for humans in the 21st century,” the authors said in the research report. “The high consump-tion of energy directly leads to excessive greenhouse gas emissions, which severely disturbs the climate balance and causes global warming and extreme weather.” As a result, the authors said efforts are well underway to focus on renewable energy sources as well improving energy effi-ciency. If households cut their cooling and heating requirements, the impact would be huge, they speculated, which led them to
an alternative way to save energy: through personal thermal management that uses nanotechnology in textile fabrics.
“The objective of personal thermal man-agement is to provide heating or cooling only to a human body and its local envi-ronment, without wasting excess power on heating and cooling an entire building,” the scientists said.
While such technology may be years off, in the meantime, consumers concerned about climate change may look to brands and designers who have greener business objectives. But it is not always easy to be green, especially when consumers are ill-informed. Rachel Faller, designer and owner of an ethical fashion company Tonlé, said although her zero-waste, eco-friendly fashion brand “gets us press that a typical fashion brand might come by less easily, the majority of customers still base their buying decisions on what they like.”
Faller said although “recently there has been more attention paid to fashion’s impact on the people making our clothes and some of the pollution that has been caused by the fashion industry (Green-peace’s Detox Campaign for example), most consumers are largely unaware of the innumerable ways fashion contrib-utes to climate change. [Everything] from chemical off-gassing in landfills to the fact that 50 percent of the world’s textiles come from petrochemicals, to the leather industry’s contributions to methane emissions, to massive waste across the
industry, to the fact that 80 percent of a garment’s carbon footprint actually comes from the care of the garment — dry-clean-ing, use of machine dryers.”
Faller said when consumers are asked to think about how they directly contrib-ute to climate change, most look at their transportation habits or consumption of electricity. But that’s only a small portion of the overall impact.
A shift in how consumers respond to climate change is slow to come. John Oppermann, executive director of Earth Day Initiative, which organizes “large-scale sustainability events and programs” done in partnership with brands such as H&M, Zady, Patagonia and Levi’s, said “unlike the earlier environmental movement that rose up around the first Earth Day in 1970, the recent climate change movement has had relatively few well-publicized exam-ples of environmental disasters connected to climate change.”
However, with recent floods and other natural disasters, this could be slowly changing. “Unfortunately, we are starting to see many of the very real effects of climate change arrive in our local com-munities,” Oppermann said. “The silver lining to these encroaching threats is that it could help to spur us into action. As the effects of climate change become more salient and receive more widespread coverage in the media, we see more and more people turning toward climate change solutions.”
Is Climate Change Killing the Seasonality Of Fashion? CONTINUED FROM PAGE 7
Patrizio Bertelli
plan. To be fast you have to spend twice as much. We have to consider financial results. Digitization is fundamental for the whole process, but we have to consider how it is applied to avoid any waste of money. People have to be patient, they have to do things in an organic way…actu-ally I see a certain ‘gold rush.’”
Diego Della Valle, chairman and ceo of the Tod’s Group, echoed those sentiments, saying time is a key element of the entire Made in Italy industrial process.
“I think that see-now-buy-now can becomes see-now-buy-never in many cases. Although there will be a change in the organization of the shows, for us see-now-buy-now implies a series of risks and prob-lems,” he said. “At the same time, we have to consider that a customer finds a product in store that he saw for the first time on his mobile device five or six months earlier…he gets bored very quickly. We have to settle for a compromise — it’s key to restock the boutiques every two months with new products scheduling a marketing and com-munication strategy in advance.”
Della Valle explained that companies are becoming like magazines with a layout and an editorial calendar to respect because new technologies force them to be careful that products don’t get old too quickly.
“For me, see-now-buy-now is the farthest thing from my company. It takes time to craft beautiful things and limited quantities need to be available at the store to preserve exclusivity,” he added. “But I think fashion week will probably become a moment to meet [other members of the fashion industry] and then during the year each company does what it has to do to engage customers.”
Carlo Capasa, president of the Camera della Moda, pointed at how see-now-buy-now finds its roots in the fast-fashion
system, launched in Italy in the Seventies. “The see-now-buy-now is perfect if you do low-quality products and you have a huge amount of direct stores,” he explained. “It’s impossible for luxury companies who produce in Italy.”
Despite the alleged non-applicability of the see-now-buy-now method to Italian luxury brands — only Moschino embraced the instant fashion revolution during the latest Milan Fashion Week with a capsule collection — digitization remains a rele-vant theme.
“With the Industria 4.0 program the government aims to encourage compa-nies’ investments in digital [technology],” said Ivan Scalfarotto, vice minister of Italian economic development, which will support Italian companies by allocating 13 billion euros, or $14.3 billion at current exchange rates, from 2017 to 2020 for digi-tal and educational investments. “Industria 4.0 will have an impact on companies’ internal organization and will create new professional profiles.”
Bertelli agreed with Scalfarotto. “I don’t think digitization will change factories so much because luxury is definitely linked to the skills of each specific technician capa-ble of making a well-done and beautiful
product which is appealing on the market,” he said. “The digital won’t change the real craftsmanship but the organization.”
Claudio Marenzi, president of Italian fashion and textile consortium SMI Sistema ModaItalia and ceo of Herno SpA, high-lighted the potential of the 4.0 revolution on the industrial process.
“The new phase is about the intercon-nection between physical services and computerization both in the design phase and in the chain from production and distri-bution to the final costumer,” he said. “It’s about using 3-D software to cut a pattern. It represents a great opportunity for small and medium-sized companies and it can stimu-late re-shoring since new technologies can help cutting time and consequently costs.”
Craftsmanship and human feelings are the elements that need to be transferred from the bricks-and-mortar to the digital environment, according to Brunello Cuc-cinelli, chairman and ceo of his namesake company.
“E-commerce still represents a small portion of our business. My goal has always been to face the online with an artisanal and humanistic approach. If we are too pushy and intrusive with our cus-tomers, they don’t buy,” he said, adding that in January the company will bring the management of e-commerce, currently operated by Yoox, in-house. “It’s because we want to enhance that artisanal and humanistic approach.”
In order to protect the activities of Ital-ian companies online, Capasa said that the Camera della Moda is working on a project on the regulation of digital commerce, which we will be presented to the Euro-pean Commission.
“We missed the first train, but we are quickly regaining the lost ground,” said Della Valle, explaining how the Tod’s Group reorganized its digital strategy in the past six months. “We are finalizing the mapping and the tools we need to create a dialog with our customers. But we don’t have to forget that our customers of yesterday are still there and we cannot concentrate only on the new things. We have to mediate between what we had and what we can get.”
A pioneer in the online arena, the OTB
group is adopting a new digital approach this year, as revealed by OTB ceo Stefano Rosso. “For the first time, the whole group will embrace a unique strategy, spanning from technological innovation to the revi-sion and optimization of the e-commerce platform,” he said. Through this approach the different brands of the group, includ-ing Diesel, Maison Margiela, Marni and Viktor & Rolf, as well as manufacturing arms Staff International and Brave Kid, will be able to benefit from synergies and key learning sharing.
Companies will be able to capitalize from the new digital revolution only if they will reorganize internally, according to Michele Norsa. “Companies need to change internally to engage the young generation of customers in order to attract them into the stores,” said the former Sal-vatore Ferragamo ceo, who is a member of the boards of Oettinger Davidoff and Rocco Forte Hotels. “This can happen if compa-nies make room for young people in their structures because only people in their 30s and 40s can activate this change.”
Asked their opinions on the current market situation, the Italian entrepreneurs attending the summit expressed confi-dence in both the current conditions and the next year.
“This is actually not a growing moment because we reached such big volumes that now the sector is going through a phase of stabilization. I don’t think the fashion sys-tem is going through a crisis, I think that the system is looking inside itself to find new solutions,” Bertelli said. “This was not a serene year…Due to the terrorist attacks in Paris and Nice, many people don’t feel like traveling in Europe. But at the same time, the number of tourists visiting Italy this year rose 12 percent compared to last year. The whole geopolitical situation is critical, the election in the United States is also putting things on standby. I don’t see a big crisis, I think we have to be patient and keep working. I think 2017 will be better.”
“I think 2017 will be better than 2016 since right now the elections in the United States and Europe are causing a certain anxiety which generates a certain stagna-tion,” Della Valle agreed.
Italy’s FashionEntrepreneursSkeptical of Instant Fashion CONTINUED FROM PAGE 1
Congratulations to WWDon its inaugural photo issue.
Exclusive access, unrivaled expertise.
OCTOBER 19, 2016 10
● Guests at events come from a variety of disciplines but have a common interest in fashion, culture and art.
BY SHARON EDELSON
The Outnet.com is venturing into physical retail territory in an effort to connect with existing customers, meet new ones and raise awareness and interest in the fashion outlet in general through programs bowing in New York Tuesday and Melbourne, Sydney, Hong Kong and Singapore next month. Following that, the Outnet will hit Los Angeles and Miami.
“The activations are really important,” said Andres Sosa, executive vice president of the Outnet. “We’re a pure-play digital retailer. For us to be able to bring the off-line world to the online world and offer an additional touch point is exciting.”
The Outnet’s nerve center through Friday is NeueHouse Madison Square in Manhattan. Tom Ford’s ready-to-wear — offered for the first time on the Outnet — is being highlighted along with holiday party wear and rtw from Chloé, Roberto Cavalli,
Edie Parker, Saint Laurent and Dolce & Gabbana, among others.
Besides showcasing new styles from existing brands, “this is also an opportu-nity for us to introduce Iris & Ink, which doesn’t have an off-line point of reference
because it’s exclusive to us,” Sosa said of the in-house brand whose holiday capsule and spring 2017 collection are being pre-viewed. Iris & Ink continues to grow; shoes were launched last season. “It’s in the top five brands,” Sosa said, “which is a massive achievement compared with the huge global brands on the site.”
A press event Tuesday kicked off the e-tailer in residence program at Neue-House, which was chosen as a venue for its like-minded membership base that shares an interest in art and culture with the Outnet’s consumer.
Garance Doré is hosting before an audience a live recording of her podcast, “Pardon My French,” featuring Phillip Lim with the discussion ranging from fashion trends to Lim’s personal life. As the sponsor of “Pardon My French,” the Outnet has been hosting clips on the web site and offering promotions to Garance’s listeners. A dinner tonight in the Neue-House library will benefit Glam4Good.
The program tomorrow continues with a preview of the Outnet’s seasonal offer-ings for local influencers and social media personalities. The Outnet is partnering
with Grand Classics, which celebrates the power of film by inviting actors and oth-ers to introduce films that touched them. Ethan Hawke will introduce his pick, “Minnie and Moskovitz,” at the screening for guests from the worlds of fashion, media and film, and top customers.
Friday is reserved for those consumers to shop the party wear edit before it goes live on the site. The Outnet chose custom-ers from its Front Row loyalty program membership base using an algorithm that takes into account metrics other than spending on the site such as frequency, Sosa said.
In Dubai last week, Sosa met with con-sumers; the Outnet was a sponsor of the Emirates Woman of the Year Awards. The next leg of the road trip starts on Nov. 7 with visits to Sydney and Melbourne.
“We’re taking a 360-degree approach in Australia,” Sosa said, noting that besides events for customers, he’ll participate in two panel discussions. “We’re also doing a public relations push,” he said. “We’re doing more events with influencers.”
Sosa plans to travel to Hong Kong on Nov. 16 and Singapore, Nov. 17, where the Outnet’s form of outreach and stroking existing will continue. “Even though the blueprint may sound similar, we adapt it to the specific market. There’s an element of VIP, press and new customer acquisi-tion in new markets,” he said. “We ship to 170 countries and focus on the top 10 mar-kets. We know it’s a competitive space. It’s important to resonate locally with everything we do. Our main objective is to increase brand awareness.”
MEDIA
The Outnet’s Globe-trotting Goal: Raising Awareness
● The executive talked about features behind the town square concept, her time at Burberry and how she initially didn’t want the job at Apple.
BY KARI HAMANAKA
LOS ANGELES — Apple is going the way of the iPhone, iPad and its other gadgets in talking about the future of physical retail. That is, its town squares — or, in more traditional parlance, stores — are its largest product.
“We talk about the store being the big-gest product that we produce now and we launched five new features in that prod-uct,” said Apple senior vice president of retail Angela Ahrendts during a dinner at Fortune’s Most Powerful Women Summit Monday evening.
Accessories are called ‘avenues’ for the little shops that typically encircle a town square. A high-resolution digital screen, called the forum, seats 75. A new position at the stores, called the creative pro, will now rival the Apple genius tech support position. The creative pros will teach cus-tomers, for example, how to be a better photographer by doing product demos or signing a customer up for a photo walk-through.
“The vision was, I love the street sign that Steve [ Jobs] used to put out at key-notes that Apple was the intersection of liberal arts and technology. It just always resonated being a 50/50 right-wing, left-wing kind of person,” Ahrendts said.
She spoke for the first time publicly about the new retail concept at the three-day conference taking place at the Ritz-Carlton in Dana Point through Wednesday. This year’s agenda includes a roster of high-profile speakers drawing
from the c-suite and Hollywood, includ-ing Barbra Streisand; Chan Zuckerberg Initiative cofounder Priscilla Chan; Alpha-bet and Google chief financial officer Ruth Porat; IBM chief executive officer and chairman Ginni Rometty; Facebook chief operating officer Sheryl Sandberg; YouTube ceo Susan Wojcicki; Chelsea Handler, and Ivanka Trump.
Ahrendts said that by year-end, 95 Apple doors will have the new design, which bears in mind her goal of retail fulfilling an obligation to the communities they’re in.
“I’m at the stage in life where I think big companies have an obligation,” she said. “The bigger the company, the bigger the obligation and so our whole vision for the new store design concept is, ‘What does the community need?’ How do we make it so the best of Apple can come together
in one place....We mapped out everything people do on their devices and said, ‘How do we make sure that we create an experience where the best of Apple comes together,’ [for] one. But, two, how do we make sure that the bigger that Apple gets, we put something there that’s so wow but also that is so incredibly local.”
The company plans to activate a curric-ulum next year at retail that three times a day will teach kids to code for free. There will also be programming geared towards parents and teachers. The tech firm is piloting a program called Teachers Tues-days at its Union Square location where Apple employees devote all of their time to helping educators on that day of the week. Last week’s event attracted 78 teachers.
Reimagining Apple’s store network is vital for the tech giant as its growth slows on declining sales of the iPhone, iPad and similar products, while the performance of the Apple Watch is generally viewed by analysts as disappointing. In July, Apple registered the second consecutive decline in quarterly profits and sales, reporting a 27 percent net profits drop as iPhone sales stalled. The company also predicted that revenues would fall again in the third quarter.
The 2013 TED Talk she gave, titled “The Power of Human Energy,” garnered the interest of Tim Cook as he sought to court the-then Burberry ceo to come to the tech firm.
“When Tim called the first time I said, ‘Thank you very much. I’m incredibly honored, but I have the greatest job in the world so, no, thank you,” she said, recounting that point in time.
She and Christopher Bailey, current chief creative officer and ceo, built upon the foundation laid by Ahrendts’ prede-cessor Rose Marie Bravo — who recruited both Ahrendts and Bailey to Burberry.
The duo’s strategy included building up retail, targeting a younger customer and playing up the brand’s British heritage as a differentiator amid its Italian and French counterparts.
Ahrendts made it a point of trying to dissuade Cook from attempting to recruit her.
“In one of the e-mails [to Cook] I proposed something that I thought might delay him a couple of months,” she said. “I sent a very nice, gracious humble e-mail and just said, ‘Thank you so much and if you ever would consider the retail stores and integrating those with the online business, because that’s the lens that I see the world through — at Burberry we did everything digital first. I said...if you ever considered doing that, then of course I would have to consider.”
Five minutes later, she said, Cook responded saying he hadn’t thought of it that way but loved the idea.
She admitted she didn’t expect him to accept her vision of the job, but in 2013 she was tapped for the newly created position of Apple senior vice president of retail and online stores, taking on a divi-sion that has some 65,000 people with a corporate culture that helps boast an 87 percent retention rate and a vision that aims to bring humanity back in a digital world.
“You go to Washington Square Park in New York or you go to Covent Garden or Union Square and on weekends, you’ll see an artist over here sketching something or a guy playing a guitar over here and kids love that,” she said. “It’s a human experi-ence because they’re so used to living in their digital world. So our whole concept was how does the store become more like a town square where the best of Apple comes together, everyone’s invited and it becomes almost a community hub.”
RETAIL
Ahrendts Ushers in a New Era at Apple Retail Apple head of retail Angela Ahrendts.
A look from Iris & Ink.
Ahr
endt
s ph
otog
raph
by
Stu
art I
sett
OCTOBER 19, 2016 11
● Local manufacturers are jeopardized by those in the U.S., China, Turkey and Bangladesh.
BY SANDRA SALIBIAN
Elio Fiorucci and Diesel are just two examples of globally recognized Italian brands hinging on denim, reflecting the country’s advanced production of the fabric.
Today, the intricate network of local manufacturers and medium-sized com-panies are increasingly jeopardized not only by competition from the U.S. and China, but also by growing markets such as Turkey and Bangladesh that are becoming more influential in Italy.
Starting in the Nineties, Turkey assumed a leading role in denim’s weaving pro-duction. Historically rooted in the textile industry, the country began to flourish in the denim segment thanks to its innovative approach toward the fabric and the indus-trial methodology of large-scale production.
A case in point is the Turkish denim production giant Isko, part of Sanko Group’s textiles division, which keeps registering double-digit growth year-on-year. The company has been investing in research and development, reaching a portfolio of 25,000 denim products and trademarked concepts.
Starting in 2011, Isko strengthened its presence in Italy by investing directly in two strategic settlements. In San Benedetto del Tronto, in the Central Italy region of Marche, the firm founded the corporate library of products Iskoteca, while the fol-lowing year, the research and design center Creative Room was inaugurated in Castel-franco Veneto, an hour’s drive from Venice.
“This choice honors a key country for the denim sector, historically very import-ant for all the industry in general,” said Isko’s global marketing director, Marco Lucietti, attributing to Italy an important role on the international scene.
“Italy is recognized worldwide as the reign of fashion, but in a globalized world the competition is always around the cor-ner,” Lucietti said. “I think that the global approach of Isko has played a key role and has guided the company in a path that has involved all the aspects of a modern and
winning company,” attributing the success to the firm’s “strong brand strategy and commitment in research.”
According to Lucietti, “in this particular moment the situation is reassuringly posi-tive, especially for the premium sector and ath-leisure, a trend that doesn’t show signs of stopping.”
Bangladesh-based denim specialist M&J Group, which counts Replay, H&M and Gap in its client list, registered sales of more than $100 million in 2015 and expects to deliver a 15 percent increase this year, noted Fabio Adami Dalla Val, M&J Group’s head of research and development and trade marketing manager.
“Indeed, last year the company com-pleted an expansion process that included the opening of two new concerns in Dhaka that allowed us to increase the pro-duction from eight million to 12 million garments per year,” said Adami Dalla Val, underscoring how 10 percent of the pro-duction is exported, mainly to Europe, the U.S. and China.
“We live and operate in Bangladesh, but we are also able to attract international brands because, besides the obvious issue of attractive production prices, M&J is a
group of world-class manufacturers that stand out of the whole local garment-mak-ing sector,” he added.
Adami Dalla Val also explained how the industrial field is shifting from an old per-spective that gave the brands pivotal roles compared to the other secondary players to today’s approach where every subject is involved into a creative process.
“This means that all the companies that work within the supply chain can be consid-ered ingredients of a pair of jeans, provided that they must be able to communicate their added values,” he said, highlighting how consumers are more oriented to values “while, on the contrary, the industry is leveraging low prices as a false myth.”
Communication is the focal point Italy seems to be lacking at the moment, according to the manager, who believes that despite the Italian leadership in innovation, quality and widespread awareness, the country needs to catch up on collaboration among the local players of the supply chain.
“Italy must make up for delay in the communication on a global level, must get structured and build a cooperation pat-tern to bridge the gaps of the small and
medium-sized enterprises network, which has been crucial in the last 50 years, but is showing signs of stagnation,“ Adami Dalla Val said.
Otello Lucietto, country manager of Italy at Cobrax, attributes to politics and the government the main responsibilities of the Italian delay on the international scene, which was also confirmed by the latest World Economic Forum’s data that rated the country 44th in competitiveness on a global scale.
Founded in 1977 and part of the Swiss Riri Group from 2007, the Padua-based company is a leader in the production of jeans buttons, snaps-fasteners and rivets, a field equally prone to competition, according to Lucietto.
“Cobrax can’t compete with realities allocated in countries with low-waged manpower, of course,” he said, “Cobrax is completely vertically organized and, starting from certified raw materials only, produces all the goods in its factory in Padua, Italy.”
The company is keeping up the pace globally thanks to the high industrializa-tion of some of its products, which favors costs reduction.
● J. Harold Chandler succeeds Joseph M. Salley after serving on the company’s board for 14 years.
BY ARTHUR FRIEDMAN
J. Harold Chandler has been elected chairman, president and chief executive officer of Milliken & Co. following the res-ignation of Joseph M. Salley as president and ceo and as a member of the compa-ny’s board.
Chandler has served on the Milliken board for 14 years and as its chairman for the past five years.
“We sincerely thank Joe Salley for his service to Milliken, which covers a span of 20 years, the past eight as its president and ceo, Chandler said. “I am honored to take on the additional roles of president
and ceo. I look forward to working with a uniquely qualified group of executives, associates and board members. Our initial
step will be to ensure an effective transi-tion and to maintain the positive momen-tum from which the company is currently benefiting. Together, we will continue to innovate, contribute to Spartanburg and our other communities, and be a leader in our industry.”
There as no reason given for Sally’s resignation.
Based in Spartanburg, S.C., Milliken was founded in 1865 and has 35 manu-facturing facilities located in the U.S., the U.K., Belgium, France, China, India and Australia, and other sales and service operations throughout the Americas, Europe and Asia.
The company’s product sectors include apparel and industrial textiles, chemical, floor covering and performance materials.
Harold Chandler is a native of South Carolina and product of a textile family. He graduated from Wofford College in
Spartanburg, where he has served on its board of trustees for 24 years, the last five as its chairman. He received his Masters of Business Administration degree from the University of South Carolina and later completed post-graduate studies at the Harvard Business School.
Chandler is a veteran of the diversified financial services industry, where he has served as chairman, president and ceo while also contributing to the boards of directors of eight public and family-owned companies over the past 30 years.
Roger Milliken, one of the most leg-endary figures in the U.S. textile indus-try, died in 2010 while still chairman of Milliken. The enigmatic billionaire and grandson of founder Seth Milliken wielded political influence and power in the nation’s capital for more than 50 years, endorsing and funding conserva-tive political candidates and shaping the debate over the domestic consequences of globalization and free trade.
At the time, Milliken was considered to be the largest privately held textile and chemical manufacturer in the U.S.
THE MARKETS
Italian Denim Industry Battles Competition
THE MARKETS
Milliken & Co. Names President, CEO
isko’s manufacturing faciilty in Bursa, Turkey.
J. Harold Chandler
OCTOBER 19, 2016 12
into a shopping frenzy.The anticipated currency boost in fiscal
2016-17 failed to lift investors’ spirits, though. Burberry shares tumbled 9 per-cent on Tuesday to 13.75 pounds, or $16.75 at current exchange.
Second-quarter comparable retail sales were up 2 percent in the three-month period, with the U.K. driving the lion’s share of growth.
Carol Fairweather, Burberry’s chief financial officer, said during a conference call following the company’s first-half trading update that U.K. sales climbed 30 percent in the second quarter, generating 40 percent of growth in the three months.
She attributed the sales uptick to the post-referendum devaluation of the pound, which drove the retail prices of merchandise down for those paying in dollars, euros and yuan.
According to Visit Britain, the national tourism agency, July saw the most overseas visitors to the U.K., with numbers up 2 per-cent to 3.8 million compared to the same month last year. Their spend climbed 4 per-cent to 2.5 billion pounds, or $3.3 billion.
Fairweather said Burberry also saw sales growth among its local customer base, which she said was due to the company’s work around the “newness” of product and work with private clients. As part of its new strategy, laid out earlier this year, Burberry said it would focus on cultivating the local clientele and cater more to local tastes and climates.
Asked how much Burberry’s first see-now-buy-now, in-season show contrib-uted to the sales uptick in the second quarter, Fairweather said it didn’t have a great impact.
“We were delighted by the response [to the show] and by the amount of product sold,” she said, adding that the Bridle bag, which made its runway debut in September, was the top-selling item from the collection and is now the brand’s third biggest-selling bag globally.
The company also touted the success of its Buckle bag and the emerging growth of categories such as dresses and ponchos. Fairweather said that fashion items have generally been outperforming replenish-ment ones on the shop floor.
The impact of the show on sales was small overall, she said, as the event took place less than two weeks before the quar-ter ended on Sept. 30.
Fairweather said the second-quarter bounce was due more to growth in the U.K. and in Mainland China, which deliv-ered a midsingle-digit percentage com-parable sales increase despite the impact of the changing store portfolio in Beijing, Burberry’s largest market in the country.
The strong pound had a halo effect on the first half generally: Revenue in the six months to Sept. 30 was up 5 percent to 1.16 billion pounds, or $1.52 billion, although underlying sales in the period were down 4 percent, due partly to declines in whole-sale and licensing.
In the half, retail revenue, which rep-resents 74 percent of the company’s over-all sales, was up 11 percent to 859 million pounds, or $1.13 billion, and 2 percent on an underlying basis.
Sales in Asia-Pacific and Europe, the Mid-dle East and Africa, were up on a reported basis and broadly flat on an underlying one, while the Americas region was down on both an underlying and a reported basis.
In the first half, most product categories saw a decline in underlying growth, with the exception of men’s, which was flat, and children’s wear, which was up 9 percent. At reported rates, all categories, except
for beauty, grew in the single digits, while children’s wear was up 21 percent.
On an underlying basis, beauty revenue in the half was down 17 percent and at reported rates it fell 7 percent to 76 million pounds, or $99.6 million.
Burberry said the MyBurberry and Mr. Burberry fragrances performed well, with market share gains in key regions. Fairweather added that the decline in the division was due to Burberry’s efforts to refine the business.
She noted that Burberry has downsized its points of sale in the U.K. — its largest market — to 35 from 3,000. “We were mas-sively overdistributed in our home market and part of our strategy for the beauty pillar is to clean up distribution,” she said.
Fairweather insisted the decline in beauty sales was not about the performance of MyBurberry, which has been doing “super well.” She added that Burberry is also working on honing the distribution of its fragrances on the Continent as well.
Wholesale revenue in the half decreased by 14 percent underlying (and 6 percent at reported rates), broadly consistent with guidance. Excluding the
beauty division, underlying wholesale revenue in EMEIA and Asia-Pacific was largely unchanged year-on-year.
The Americas saw a “significant decline,” at wholesale Burberry said, principally reflecting tighter inventory control by customers and further strategic brand elevation.
Fairweather said Burberry continues to “elevate” the brand in the U.S. market, and its aim in the half was to avoid building up excess inventory at U.S. department stores — and subsequently being caught up in promotional activity.
She revealed that the decline in U.S. wholesale sales was 25 percent, which Burberry was happy to swallow due to its strategy in the region. She said the com-pany saw a “slight” overall sales improve-ment in the U.S. in the second quarter.
Looking ahead, Burberry expects total wholesale revenue at constant exchange rates in the six months to March 31 to be down by a midteens percentage on the same period last year, with the trends similar to those in the first half of the cur-rent year, due to the company’s planned distribution strategies.
An anticipated decline in licensing income also ate into the first-half revenue figure. Due to the planned expiry of the Jap-anese Burberry licenses, revenue declined by 54 percent underlying and was down 51 percent at reported rates in the half, consis-tent with full year guidance. Burberry took its Japanese business in-house last year.
The pound, which has fallen nearly 20 percent against the dollar and recently hit a six and a-half year low against the euro since Britain’s vote to quit the European Union, will prove a further boon to Burber-ry’s bottom line in fiscal 2016-17.
It will give a needed boost to the com-pany, which is currently restructuring and looking to deliver annualized cost savings of at least 100 million pounds, or $122 million, by fiscal 2019.
Using Sept. 30 exchange rates, Burberry said that reported, adjusted retail/whole-sale profit would benefit by about 105 million pounds, or $128 million.
The company added that, given the significant movement in exchange rates since Sept. 30, the benefit of using Oct. 12 rates would be at least 20 million pounds, or $24 million, higher than its September currency estimate.
Analysts at Verdict Retail were bullish about Burberry’s future prospects despite a challenging climate for luxury goods they believe will last into 2017.
“Burberry has many aces up its sleeve, especially in terms of product innovation and customer experience,” wrote Nivindya Sharma, senior analyst at Verdict Retail.
Sharma pointed to Verdict’s own data, which indicates that 85.6 percent of clothing shoppers prefer to buy items they can wear straightaway and added that Burberry’s decision to move to a see-now, buy-now model was a wise one.
Sharma also pointed to the company’s revamp of the burberry.com custom-er-friendly web site last month, and the arrival next year of Marco Gobbetti as chief executive officer.
“He will bring a fresh structure and direction to the brand, while freeing up Christopher Bailey to do what he does best — innovate and create — keeping Burberry in prime position to weather the storms ahead,” Verdict said.
Weak Pound On Track To Power Burberry CONTINUED FROM PAGE 1
Looks from Burberry’s September show.
Burberry has seen a major boost from the weaker pound
among both tourists and local shoppers.
A bag shown during the fall collection.
Phot
ogra
phs
by G
iova
nni G
iann
oni a
nd L
NP/
REX
/Shu
tter
stoc
k
OCTOBER 19, 2016 14
● More than 80 percent of merchants reporting a rise in the past year, according to an NRF study.
BY ARTHUR FRIEDMAN
Organized retail crime is continuing to grow, with 83 percent of U.S. merchants surveyed reporting an increase in the past year, according to an annual study released Tuesday by the National Retail Federation.
One-hundred percent of the 59 senior retail loss prevention executives surveyed said their companies had experienced organized retail crime in the past year, up from 97 percent in 2015 and marking the first time in the survey’s history that all responding companies reported being a victim. In addition, 83 percent said orga-nized retail crime had grown, with the average loss exceeding $700,000 per $1 billion in sales, a significant increase from $453,940 last year.
With the problem growing, 71 percent of loss prevention executives said they now
believe their top management under-stands the severity and complexity of the crimes, up from 63 percent last year.
“Retailers continue to deal with the challenges that come with fighting orga-nized retail crime,” said Bob Moraca, vice president of loss prevention at the NRF. “Every day, criminals are getting more creative in the ways they manipulate the retail supply chain. Combating ORC is a full-time job, and it is a constant battle industrywide for retailers large and small to stay one step ahead of these savvy criminals.”
Organized retail crime gangs often use store fronts, pawn shops, flea markets and kiosks to fence stolen goods and 63 percent of those surveyed said they had recovered merchandise from a physical location. But many criminals turn to the Internet for the anonymity it offers — 58 percent of retailers said they had identi-fied stolen merchandise from an e-fencing operation.
Criminals are also finding ways to manipulate store return policies. Accord-ing to the survey, 68 percent of respon-dents said they had experienced thieves
returning stolen merchandise for store credit, which is often resold to second-ary-market buyers.
Four new states — New Mexico, Oregon, New York and Vermont — have enacted ORC laws in the past year, bringing the total nationwide to 34. But the survey found that 56 percent of retailers in states with ORC laws said they had seen no increase in support from law enforce-ment, the highest in the survey’s history. Retailers continue to support creation of a federal ORC law, which is backed by 79.7 percent of those surveyed.
“Organized retail crime continues to impact retailers at a larger scale now more than ever before,” said Jonathan Gold, the NRF’s vice president for supply chain and custom policy, who also heads the association’s lobbying efforts on the issue. “ORC also poses a threat to unwitting consumers who may purchase stolen merchandise that is not stored properly or may have expired. It is critical for our industry to continue pushing for strong federal legislation that would properly define ORC and make it a federal crime. Until there is a federal ORC
law to counter this increasing criminal activity and the ability to transport stolen products across state lines, it will be nearly impossible to put a dent in this $30 billion-a-year problem that threatens retailers, the economy and consumers across the country.”
Cargo theft continued to impact retailers, cited by 44 percent of those surveyed, up from 38 percent last year. The most common place for cargo theft to occur is when merchandise is being transported from the manufacturer to a retailer’s warehouse or from the ware-house to a store, followed by on-site at the warehouse.
Los Angeles continued to be the hardest hit area for ORC in the nation, a position it has held since 2012. Following in order were New York; Chicago; Miami; Hous-ton; the San Francisco-Oakland area; the Arlington, Dallas and Fort Worth area in Texas; Atlanta; Philadelphia, and Orange County, Calif.
The survey of 59 executives representing department, big-box, discount, drug, gro-cery and specialty retailers was conducted July 20 to Aug. 19.
BUSINESS
Retailers See Increase in Organized Retail Crime
● The makeup artist previewed her fifth Labs launch — an eye color kit containing four products.
BY RACHEL STRUGATZ
NEW YORK — Pat McGrath coined a new term for any metallic eye pigment she deems subpar.
“What is the goldest of all gold that I can ever have in my kit? When I put a metallic [eye shadow] on I’m not look-ing for a local metallic...a local shadow claiming to be a metallic,” the makeup artist said Monday evening during a pre-view of Pat McGrath Labs’ fifth product, Metalmorphosis 005, at the Dream Hotel in Chelsea here. “That’s a new word for basic. Basic is ‘local.’”
McGrath is very serious about eye shadow pigment, so much so that Metal-morphosis is an extension of her first prod-uct, the Gold 001 pigment that launched a year ago. It also marks the first time she has brought back one of her products after it has sold out.
This time around, though, Gold 001 is being joined by her “sisters” silver, bronze and copper, McGrath said. Every kit comes with a cream shadow, a pigment in the same shade, a Mehron mixing liquid and a black, dual-ended liquid eyeliner (to achieve a bold or fine stroke). Each of the four Metalmorphosis 005 sets retails for $60, an Everything Kit containing all four colorways for $165, and a single Dual-Ended Marker for $24. The range will hit the makeup artist’s web site, Patmcgrath.com, on Nov. 15 and select Sephora doors and sephora.com on Nov. 22.
Using her hand to test out each shade, she demonstrated that the liquid can be used to help the pigment go from dry to wet for a more saturated finish on the eye. She also suggested layering a light wash of cream shadow on the lid and then placing pigment on top, as well as applying pigment in a dramatic, winged
cat-eye for a more “couture” look. For less of a statement, the product works well when brushed along the lash line as a liner or even just placed on the inner corners for a pop of metallic. It can also be used as lip, hair or body color, and mixing and matching colors is recommended.
“It’s every eye I’ve ever done since I’ve started my career,” McGrath mused of the long-lasting liner and metal pigments, adding that, “[You put it on] and then you can’t get it off, I’m sorry. You can wear it for a few nights.”
Metalmorphosis 005, billed as “met-allurgic masterpieces,” follows the same code as her four previous launches: the makeup appeared on the runways during the most recent fashion week (in this case, the spring runways of Maison Margiela and Versace). And like each product that’s come before it, the four-piece eye set is available in limited release.
McGrath, who is also the global cre-ative design director at Procter & Gamble, is mum on numbers, but did say that production is considerably higher than
when her first Gold 001 pigment came out last September. She confirmed that she started with a “very small amount” and upped production once Pat McGrath Labs partnered with Sephora on the distribution for the Skin Fetish 003 high-lighting kits and Lust 004 glitter lip sets that were released on April 26 and Aug. 30, respectively.
“There are no rules with labs,” she said when asked if she continued to keep up the cadence of doing five product launches a year.
BEAUTY
Pat McGrath Reveals Metalmorphosis 005
Pat McGrath Labs will launch Metalmorphosis 005 Nov. 15.
OCTOBER 19, 2016 15
Dishing It OutMonday night’s parties raised money over dinner for God’s Love We Deliver, The Frick Museum and The Lunchbox Fund.
On Monday night, a stilet-to-wearing squad of models fol-lowed the trail of Kookie crumbs all the way to the fifth floor of Spring Place.
“I love Karlie’s Kookies. Are they here? She has the best cookies,” said Martha Hunt, referring to fellow model Karlie Kloss’ Milk Bar cookie, created to benefit Feed New York. “They’re really good,” added Sara Sampaio. “[Karlie] ac-tually brought them a few years ago to the VS show.”
Kloss was receiving an honor for her charitable efforts that night at the God’s Love We Deliver Golden Heart Awards, along with Union Square Hospitality Group’s Danny Meyer and a longtime God’s Love volunteer. While Kloss appeared at the event via video — she’s currently in Japan — a con-tingency of her friends showed up in her place to lend support to the charity, a social service organiza-tion that delivers nutritious meals to the homes of sick New Yorkers.
In addition to corralling hordes of fashion faces to come out in support, Michael Kors has been involved with the organization for more than 20 years. (He recently gave $5 million, which resulted in an expanded facility, the Michael Kors Building.) “What keeps me involved, quite honestly, is the fact that when you meet their clients, and you see firsthand when you walk into someone’s home what this means for them, you’re like, ‘oh my god,’” Kors said. “It’s very life-affirming to see that you can help someone in a concrete way. No matter how big the organiza-tion has become, it’s still hands-on and personal.”
Uptown, acclaimed cera-mist Edmund de Waal was the honoree at The Frick Collection’s annual Autumn Dinner. Margot Bogert, who has been chairman of The Frick’s Board of Trustees for 13 years, said she and her colleagues decided on him because of his work as a porce-lain ceramist. “[Porcelain] is what we’re featuring this year in The Frick Collection,” she said.
De Waal, who hails from England, has been a Frick frequenter for 35 years. “I first came here when I was 17,” he said. “[My] second day in New York, [I] was taken here by a friend and
that was that.” He said director Ian Wardropper was the one who called him to invite him to be the Autumn Dinner honoree. “I had to sit down,” de Waal said, referring to how he felt when he got the call. “To be here in this context is extraordinary and wonderful.”
The more hip art crew — aka those more inclined to head to Brooklyn — christened the newly opened Leuca at The William Vale hotel for the Prada Parfums-spon-sored Lunchbox Fund fall dinner.
Rupert Friend, Helena Chris-tensen, Trudie Styler, Debbie Har-ry, Paul Haggis, Spike Jonze and more came out for the 11th annual benefit, which raises money for feeding children in South Africa. “She flew out from L.A. — it’s her last flight before the baby comes,” said Topaz Page-Green cradling the swollen belly of Mickey Sumner, a truly dedicated cohost for Monday night.
As Page-Green spoke, close friend Haggis hovered nearby and noted his uncanny resem-blance to the curious situation at last week’s presidential debate. “I’ll just stand here and hover and make you feel very uncomfort-able,” Haggis said. “I’m like Donald Trump during the debate — lurk-ing. Men do that very well.”
“The Lunchbox Fund feeds 25,000 children everyday in South Africa, which is astounding,” said Sumner, the eldest daughter of Sting and Styler. “It costs 25 cents to feed one child one meal.”
“Since last year, we’ve almost doubled the amount of children that we feed,” Page-Green told the room between courses. “We see results: attendance improves in all of the schools that we’re in; grades improve; we have multiple reports every year of kids who graduate and get scholarships to go to university, or kids who weren’t coming to school who now come to school, or kids who couldn’t concentrate and now do concentrate. We want the Lunchbox Fund not only to relieve the immediate need of feedings these kids, but also to provide a behavioral nudge to make sure these kids keep com-ing to school and keep improving in school.” — KRISTEN TAUER, ALEXA TIETJEN AND LEIGH NORDSTROM
Rupert FriendJoan Smalls, Sara Sampaio, Martha Hunt and Taylor Marie Hill.
Michael Kors and Kate Hudson
Jennifer Wright, Lucy Lang, Caitlin Davis and Amory McAndrew.
Spike Jonze and Topaz Page-Green
Iman
Lunc
hbox
din
ner p
hoto
grap
hs b
y S
paul
ding
/WW
D/R
EX/S
hutt
erst
ock;
Gol
den
Hea
rt A
war
ds b
y S
teph
en L
ovek
in/R
EX/S
hutt
erst
ock;
Fric
k di
nner
by
Zach
Hilt
y/B
FA.c
om
Helena Christensen
A celebration of the leading innovators and outstanding product launches that made for an unforgettable year in beauty
Ad Close: 11.18 / Materials Due: 11.25
1 5 T H A N N I V E R S A R Y
AWA R D S I S S U E
FOR MORE INFORMATION, PLEASE CONTACT LOUISE COOLICK, BEAUTY DIRECTOR AT 646 356 4705 OR [email protected]
OCTOBER 19, 2016 17
Fashion Scoops
Memo Pad
Combo TimeIt’s a moment of consolidation for Italian fashion companies.
A few days after the revelation that Roberto Cavalli is planning to close its offices in Milan and focus operations at its Florence headquarters, Emilio Pucci said Tuesday it plans to transfer its em-ployees from Florence to Milan.
The decision was taken in order to cre-ate “greater efficiency and operational synergy.” A source close to the company said Pucci wanted to focus on two cities, rather than three. The manufacturing role in Bologna will go untouched, while the creative and commercial roles will be joined together in Milan. This will also facilitate creative director Massimo Giorgetti, who is based in Milan. He was tapped by Pucci last year, succeeding Peter Dundas.
The source said each of the 45 em-ployees based in Florence is receiving an offer to move to Milan. “There is no plan to cut jobs,” said the source. “Individual talks will be initiated to study the best way to deal with this change.”
The source said Laudomia Pucci, daughter of the namesake founder, and the Pucci family will continue to own the storied 14th-century Palazzo Pucci. Laudomia Pucci is image director and a member of the company’s board. “The company, as well as the group it belongs to [LVMH Moët Hennessy Louis Vuitton] is thinking of ways to enhance it to empha-size the Florentine origins of the brand,” said the source.
The proposal to transfer its employees is part of the company’s goal to “keep on investing in the talents of all human resources, which are the main assets of Emilio Pucci.” — LUISA ZARGANI
Donatella Picks Up Her PenDonatella Versace can add the title of writer and editor to her résumé. The designer is gearing up to unveil a book retracing her career. Published by Rizzoli, the richly illustrated “Versace” chronicles Donatella Versace’s interpretation of the namesake brand starting from 1997, when she took over the artistic direction after the tragic loss of her brother Gianni.
Written in collaboration with Maria Lu-isa Frisa, fashion curator and professor at the IUAV University of Venice, and W Magazine’s director Stefano Tonchi, the 336-page tome offers a contemporary and archival insight on the brand and re-traces its evolution under the designer’s watch through secret anecdotes, runway pictures and exclusive backstage shots.
The visual history is filled with mem-orable contributions by international photographers, such as Richard Avedon, Irving Penn and Steven Meisel, among others. The book also includes pictures of supermodels Christy Turlington, Naomi Campbell and Linda Evangelista as well as images of Hollywood’s celebrities in Versace attires. Tim Blanks and Ingrid Sischy also contributed to the book.
“Versace,” which will hit bookstores in November, will retail at 95 euros, or $104 at current exchange. — SANDRA SALIBIAN
Michael’s LoungeThe Roundabout Theatre has revealed that, following their significant financial support of the 50th anniversary of the
theater, Michael Kors and Lance Le Pere will be recognized for their gift with the naming of the new VIP Lounge at the Stephen Sondheim Theatre.
“I chose the Roundabout Theatre Company because my husband and I have been lifelong theater fans and are [pleased] to support such a wonderful or-ganization like the Roundabout — who do amazing adaptations of classic Broad-way musicals and bring them to new audiences,” Kors said of his involvement with the company, which he and Le Pere have supported for more than a decade. “Fashion and theater are great bedfel-lows. They have the ability to transport you to new places and open your mind to new ideas. To sponsor this lounge, which honors the genius of Stephen Sondheim, is a great honor and privilege as his work has been a part of so many people’s lives and will continue to be so.”
The lounge will be called the Michael Kors and Lance Le Pere Lounge, and will
be completed next year. Frank Webb at White Webb is designing the space, which will be LEED-gold certified, as is the rest of the Stephen Sondheim The-atre. The VIP space will be available to supporters at the highest level, including chairman’s circle, artistic director’s circle and corporate club members.
Kors’ love of theatre is longstanding. His favorite productions include “Swee-ney Todd,” “West Side Story,” “Gypsy,” “Annie Get Your Gun,” “Cabaret” and “South Pacific.” — LEIGH NORDSTROM
Big MouthSolange Azagury-Partridge is bringing her lower-priced ring line Stateside. The English jewelry designer’s “Hotlips” line will launch with a dedicated U.S. e-com-merce site today.
The designs launched via Amazon’s U.K. fashion division in October 2015. They are a less expensive rendition of her famed enamel lip rings, which typically retail for about $2,000.
By contrast, the Hotlips will sell for $95. They come in a rainbow of color ways from beige to navy to hot pink.
“I have my shop in America. I just think it makes sense to bring them over as well,” said Azagury-Partridge.
The designer does not find risk in of-fering a costume version of her most fa-mous fine-jewelry design. “Some people always want to have the more expensive version of something. If you love some-thing, it’s harder-wearing, longer-lasting. These less expensive versions are more like fashion items — you can change colors according to the season or your mood,” she said.
The two iterations are different in their subtle details.
Said Azagury-Partridge: “They are not quite the same dimensionally, the [high-er-end version] is slightly more refined, they are more handmade, hand-finished.” — MISTY WHITE SIDELL
Singles PreviewThe Tmall Global Fashion Show will see 80 brands from around the world participate in an eight-hour, live-streamed fashion show, in which every product will be available for preorder immediately through the Tmall web site and app.
The event on Sunday in Shanghai will also serve as the kick-off for the weeks-long promotional activities leading up to Singles’ Day on Nov. 11 — traditionally China’s biggest consumption event of the year.
Brands including Burberry, Trussardi, Paul Smith and La Perla will be shown on the runway, while Maserati, Guerlain, Rimowa, Vidal Sassoon and New Bal-ance will use the event to introduce new
product lines to the Tmall platform.Celebrities in attendance will include
Nick Wooster and photographer Tommy Ton and the event will be live-streamed on Mobile Taobao, Tmall.com and Youku — a video streaming platform acquired by Alibaba in 2015.
Preorders placed during the show will be executed on Nov. 11 during the 11.11 Singles’ Day shopping festival. — CASEY HALL
Back In The MixChris Knott is joining Johnnie-O as chief merchandising officer.
Knott, the founder of luxury brand Peter Millar, retired in 2015 to spend more time with his family, but he’s back and is being tasked with improving the men’s wear lifestyle brand’s quality and fit, brand positioning and retail experience. Knott will also help the brand extend its assortment into performance apparel and relaxed tailoring.
“I already live the Johnnie-O lifestyle. The brand is great and I’m here to help make it better,” said Knott, who added that while traveling with his family he fre-quently noticed men wearing Johnnie-O. “I always saw it in the right places being worn by the right people. My wife got tired of me saying, ‘Look what that guy is wear-ing.’ And I’m too young not to work.”
Knott, who founded Peter Millar in 2001, has spent more than 30 years in the retail, sportswear and golf apparel industries. He sold his brand to Compag-nie Financière Richemont SA in 2012. — ARIA HUGHES
Creativity Is... ConsolidationCondé Nast is combining its creative, copy and research teams across titles, according to an internal memo sent by president and chief executive officer Bob Sauerberg.
The restructuring allows the New York-based publisher to cut costs and streamline its business as it looks to evolve its digital business. Now workers from photo, art, copy and research departments will all sit on the same floor and work on multiple titles. The news was confirmed by Condé Nast, but the company would not indicate how many
job cuts the reorganization would entail.In the memo, Sauerberg told staff:
“In January, I spoke to you about the importance of acting as ONE company and breaking down the silos that prevent collaboration across our brands. In employee round tables, group meetings and most recently, our employee survey, there is one constant theme. You want us to remove the barriers so you can work with and learn from your peers across the company. To that end, last week we took the first step in modernizing our revenue operations by organizing our multiple sales teams, brand development and consumer marketing divisions under one leader, Jim Norton.”
The next leg of that “modernization”
entails “restructuring” creative and editorial copy-research teams in one location, a task Sauerberg and artistic director Anna Wintour are overseeing.
Raul Martinez has been named head of the creative group for Condé Nast and will oversee the creative unit and all of the cre-ative directors and teams from each brand. The team will include “all editorial brand creative, art, design and photo, in addition to the creative teams from the businesses and 23 Stories,” Condé Nast said.
The division will work across the entire portfolio, meaning that creatives — of which there will inevitably be fewer — will have the chance to work on varied projects.
Copy and research functions for all
the company’s titles will come together under Vogue executive director of edito-rial and special projects Christiane Mack, who has been named head of content, strategy and operations for Condé Nast.
Sauerberg offered: “Anna and team will be working through the specifics with each brand over the next several weeks and expect to have the groups relocated before the holidays.”
The ceo also told staff that he now has a new executive committee, which includes Anna Wintour, artistic director for Condé Nast; David Geithner, chief financial officer; Jim Norton, chief busi-ness officer and president of revenue; Dawn Ostroff, president of Condé Nast Entertainment; Fred Santarpia, chief
digital officer; JoAnn Murray, chief human resources officer, and Cameron Blanchard, chief communications officer. This group reports directly to Sauerberg.
“These new, contemporary structures will make it easier to collaborate across edit, business and brand-to-brand and truly unleash the collective power of our incredible company,” the ceo said.
Such a reorganization is somewhat commonplace. Time Inc. went through a massive reorganization across the company this summer. Hearst has been quietly sharing resources across titles for some time. Rumor has it that there will be more consolidation coming at Hearst, which will be similar to that at Condé Nast. — ALEXANDRA STEIGRAD
Mauro Grimaldi, Laudomia Pucci
and Massimo Giorgetti.
The cover of “Versace.”
Michael Kors
Kors
pho
togr
aph
by R
icha
rd Y
oung
/REX
/Shu
tter
stoc
k