friday, october 25, 2013 $3.00 women’s wear daily …sales fall 5.4 percent in the three months to...

Giorgio Armani took over the city on Thursday night with the New York edition of his “One Night Only,” which drew the likes of Glenn Close, Olivia Munn, Leonardo DiCaprio and Martin Scorsese to the

SuperPier in the Meatpacking District. For him, it was a way to say thank you for the support. America, he told WWD, “is one of the most important markets, even symbolically.”

For more, see pages 4 and 5.

FRIDAY, OCTOBER 25, 2013 ■ $3.00 ■ WOMEN’S WEAR DAILY

WWD

LEAVING A THIRD TIME

Jil Sander Exit SpursQuestions Over Brand

By LUISA ZARGANI

MILAN — Jil Sander is making another exit.The revelation Thursday that the de-

signer is stepping down from her brand for the third time left behind a trail of question marks. The Milan-based fi rm attributed Sander’s sudden exit to per-sonal reasons — which is often a eu-phemism for being fi red. Well-placed sources insisted that in this case the personal reasons are truly that and involve Sander’s longtime partner. No further details could be learned.

Sander’s last collection was for spring 2014 and the fall 2014 line will be de-signed by the brand’s in-house team that had been assembled by the designer.

Her decision to leave is momentous for the future of the brand, which is at a crossroads, according to industry sources.

One Milan-based retailer said the label “was picking up, with positive

feedback for winter, a well-balanced and comprehensive collection that cov-ered every category, from outerwear to pants. The only down side are the pric-es, but they refl ect the high quality of the materials. Jil has always wanted the best.” The retailer also lamented a cer-tain “rigidity in the requirements and management of orders.”

Tancrède de Lalun, general mer-chandise manager of women’s and men’s apparel at Printemps in Paris, said, “Jil Sander is a great house with a beautiful history, a distinctive style, a client base, an aesthetic and so forth. This remarriage could have been a beautiful story. It’s a shame it did not gel, but the house must not suffer as a result. I would make a distinction be-tween the house and the individual.

“Successive changes in ownership and designer make for tough times in the life of a brand. In addition, it takes

Armani’sApple

Avon Thinks Local for GrowthBy MOLLY PRIOR

AFTER A YEAR AND A HALF of criss-crossing the globe, Sheri McCoy is thinking locally.

McCoy, who took over the chief ex-ecutive offi cer post at Avon Products Inc. in April 2012, aims to shift the company’s product and marketing ef-forts from one universal approach to more localized initiatives that share a common theme but vary in execution.

It’s a tactic that McCoy believes will keep a legion of more than six million representatives engaged and ensure that the direct seller’s products are just

as relevant to consumers in Brazil as they are to consumers in Russia.

“At a micro level, market by market it’s making sure we have the right local insights,” McCoy told WWD. “A couple of years ago, we had a global celebrity who we would use for all our market-ing. But today it is less expensive and it works much better to have local ce-lebrities in the markets. We may have the same product and use the same ad-vertising, but we position it differently.”

Avon is due to report earnings on Thursday and Wall Street analysts are waiting to see what impact McCoy’s changes may have on the top line.

SEE PAGE 8

PHOTO BY STEVE EICHNER

SEE PAGE 12

PARTY ALL AROUND

CUTTING BACK

FETES HONORING YOUNG WRITERS, ARTIST ED RUSCHA, HAMILTON

SOUTH AND CFDA WINNERS WERE HELD ON BOTH COASTS. PAGE 11

KERING SALES SLOW AS GUCCI FOCUSES ON BAGS WITHOUT LOGOS. PAGE 2

WWD.COM2 WWD FRIDAY, OCTOBER 25, 2013

TO E-MAIL REPORTERS AND EDITORS AT WWD, THE ADDRESS IS [email protected], USING THE INDIVIDUAL’S NAME. WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2013 FAIRCHILD FASHION MEDIA. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A.VOLUME 206, NO. 86. FRIDAY, OCTOBER 25, 2013. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one additional issue in March, May, June, August, October and December, and two additional issues in February, April, September and November) by Fairchild Fashion Media, which is a division of Advance Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Condé Nast: S.I. Newhouse, Jr., Chairman; Charles H. Townsend, Chief Executive Officer; Robert A. Sauerberg Jr., President; John W. Bellando, Chief Operating Officer & Chief Financial Officer; Jill Bright, Chief Administrative Officer. Periodicals postage paid at New York, NY, and at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services Tax Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian addresses to P.O. Box 503, RPO West Beaver Cre, Rich-Hill, ON L4B 4R6. POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615 5008. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or visit www.subnow.com/wd. Please give both new and old addresses as printed on most recent label. For New York Hand Delivery Service address changes or inquiries, please contact Mitchell’s NY at 1-800-662-2275, option 7. Subscribers: If the Post Office alerts us that your magazine is undeliverable, we have no further obligation unless we receive a corrected address within one year. If during your subscription term or up to one year after the magazine becomes undeliverable, you are ever dissatisfied with your subscription, let us know. You will receive a full refund on all unmailed issues. First copy of new subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. For permissions requests, please call 212-630-5656 or fax the request to 212-630-5883. For all request for reprints of articles please contact The YGS Group at [email protected], or call 800-501-9571. Visit us online at www.wwd.com. To subscribe to other Fairchild Fashion Media magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our subscriber list available to carefully screened companies that offer products and services that we believe would interest our readers. If you do not want to receive these offers and/or information, please advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273. WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR THE RETURN OR LOSS OF, OR FOR DAMAGE OR ANY OTHER INJURY TO, UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED TO DO SO BY WOMEN’S WEAR DAILY IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE ACCOMPANIED BY A SELF-ADDRESSED STAMPED ENVELOPE.

ON WWD.COM

THE BRIEFING BOXIN TODAY’S WWD

Designer Jil Sander is leaving her namesake brand for the third time, citing personal reasons. Page 1 Avon Products Inc. chief executive officer Sheri McCoy details the plan to tailor products and marketing to local markets in a bid to reignite growth. Page 1 Giorgio Armani on Thursday brought his “One Night Only” multifaceted megaevent to New York. Page 4 Calvin McDonald has been named president and chief executive officer of Sephora Americas. Page 9 Revlon Inc. moved back to the black in the third quarter with net income of $9.5 million. Page 9 Beautystat.com founder Ron Robinson is thinking big, with the goal of becoming the “Google of beauty.” Page 9 John Galliano is only marginally closer to resolving the labor case pitting him against his former employers. Page 10 Loblaw Cos. announced a new plan to provide compensation to injured survivors and victim’s families linked to one the factories producing its apparel at Rana Plaza. Page 10 Barneys’ Mark Lee has agreed to meet with the National Action Network to discuss racial profiling claims by two shoppers at the retailer’s Madison Avenue flagship. Page 10 Hamilton South was the honoree at the National Council on Alcoholism and Drug Dependence’s inaugural gala at New York’s Waldorf-Astoria Wednesday night. Page 11 Choupette, Karl Lagerfeld’s beloved and now famous pet, has inspired a capsule collection that is sure to be the cat’s meow for holiday shoppers.. Page 11 George Rush and Joanna Molloy’s new book includes stories about working for their former boss Mort Zuckerman. Page 12

Mickey Sumner and Lake Bell, both in Louis Vuitton, with Scott

Campbell at the Whitney Museum. For more, see WWD.com.

EYE: Art world luminaries gathered last night for the Whitney Museum’s annual gala and studio party, sponsored this year by Louis Vuitton. For more, see WWD.com.

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By MILES SOCHA

PARIS — Less logo seems to be the way to go as Europe’s luxury giants face cooling demand.

Kering, which on Thursday reported third-quarter revenues dipped 1.5 percent to 2.52 bil-lion euros, or $3.34 billion, said it would continue to push leath-er lines instead of canvas for its core Gucci brand, which saw sales fall 5.4 percent in the three months to Sept. 30.

Gucci sales dipped 2 percent in Asia-Pacific, a linchpin market for luxury, reflecting efforts to drive the brand upscale and make it more exclusive, partly by reduc-ing volumes of entry-price logo luggage and small leather goods.

Jean-Marc Duplaix, Kering’s chief financial officer, told a conference call that close to 70 percent of all Gucci handbags sold in the third quarter were leather, a big jump from a year ago, when the leather ratio was less than 50 percent.

He detailed contrasting de-mand for logos in various re-gions. No-logo handbags repre-sent only 40 percent of Gucci’s business in Asia-Pacific, versus 70 percent in Japan, a market that has often been at the cutting edge of luxury consumption.

“It’s a good indication of what could be the global balance in the long term,” Duplaix said. “We are confident it is the right way to steer the brand.”

Overall, no-logo products ac-counted for 55 percent of Gucci handbag sales in the third quar-ter, 20 points above the same pe-riod last year, he added.

Releasing its figures after trading had ceased on the Paris bourse, Kering added to evidence that luxury is losing steam. Its third-quarter decline represents a slowdown from the second quarter, when revenues grew 1.6 percent, and dovetail with lackluster results at LVMH Moët

Hennessy Louis Vuitton, which last week said third-quarter rev-enues rose 1.7 percent.

LVMH also said it would con-tinue to emphasize high-end leather goods at its cash-cow Louis Vuitton brand as a way to pep up business and secure its luxury positioning.

Sales at Kering’s luxury di-vision gained 1.5 percent in the third quarter to 1.62 billion euros, or $2.14 billion. Stripping out the impact of currency and acquisitions, the gain in luxury stood at 5.6 percent.

Dollar figures are converted from euros at average exchange rates for the periods in question.

The company blamed the soft-er trends in luxury and a decel-eration from the first half mainly on Gucci’s upscaling drive, which includes trimming out wholesale accounts, and “a more volatile” environment for hard luxury, particularly watches.

Wholesale volumes at Gucci were down 9 percent, compared to a 4 percent gain in company-owned retail stores. The brand singled out its no-logo leather lines Bamboo Shopper and Lady Lock for a 6 percent gain in retail sales of handbags.

Revenues at Bottega Veneta gained 7.3 percent in the quarter, with Greater China leaping al-most 30 percent.

Hedi Slimane’s rock ’n’ roll-fu-eled makeover at Saint Laurent logged a 7.2 percent increase in the quarter, with the ready-to-wear category and Japan both up 41 percent. Duplaix noted “high volumes” of editorial helped

boost the brand’s momentum.Other luxury brands posted a

15.3 percent gain, reflecting the acquisition of Italian jeweler Pomellato, which Kering com-pleted last July. On a comparable basis, other brands gained 9.4 percent, with Stella McCartney and Alexander McQueen post-ing double-digit growth, and Balenciaga, now under the de-signer leadership of Alexander Wang, showing an acceleration in the quarter, particularly with rtw and shoes.

Asked if Kering was on track to dispose of its remaining retail holding, the La Redoute cata-logue business, Jean-François Palus, group managing direc-tor, said, “We continue to dis-cuss with potential buyers. We are on our way to consummate a transaction before the end of the year.”

Duplaix also acknowledged Kering “could contemplate a disposal” of a luxury or sport-lifestyle brand if it was “not ca-pable of reaching its long-term potential.” He did not name spe-cific brands.

Revenues in sport and luxury, with Puma the division’s larg-est franchise, fell 7.6 percent to 896.2 million euros, or $1.19 billion. The group blamed the decline on adverse currency ef-fects, weak demand for Puma footwear, and sluggish trends in Europe, Puma’s largest market. On the plus side, Duplaix trum-peted positive like-for-like sales at Puma’s mainline stores and a 7 percent bump in apparel sales in the quarter.

François-Henri Pinault, Kering’s chairman and chief exec-utive officer, said that Puma’s new management team would “radi-cally transform Puma and restore the brand’s powerful position.”

The company gave no spe-cific guidance for the rest of the year, although Pinault said, “We remain confident in our perfor-mances for the year as a whole.”

By SHARON EDELSON

WAL-MART STORES INC. on Thursday said it will open 110 new stores in China, even as growth in the country slows.

The plan calls for further developing stores in second-, third- and fourth-tier cities in China. According to retail ex-perts, Western companies are now starting to realize that they expanded too quickly into far-flung areas where residents are unfamiliar with or uninterested in overseas brands.

The expansion will center on opening Supercenters and Sam’s Clubs, as well as remodeling existing stores and investing in the logistics network. Wal-Mart opened Sam’s Clubs in Hangzhou and Suzhou this past year, bring-ing the total number of Sam’s Clubs in China to 10. The retail-er said it expects to open several more in the next three years. Greg Foran, Wal-Mart China president and chief executive officer, said the retailer plans to remodel about 45 stores this year, 55 next year and 65 the fol-lowing year. The company will

also invest further in its logis-tics and distribution network. It opened a distribution center in Wuhan in August. Next month, Wal-Mart will unveil a new dis-tribution center in Shenyang, and the company plans to open more distribution centers over the next year.

At Wal-Mart’s annual meeting for the financial community on Oct. 14, Doug McMillon, presi-dent of Wal-Mart International, said, “Our new store perfor-mance is improving. I’m en-couraged in particular by what we’re seeing in China with our recent openings.”

In markets such as China and Brazil, Wal-Mart is facing headwinds from wage inflation in the high single digits and in some cases, double digits. “We’ve made great progress at driving our units-per-labor-hour up,” McMillon said. “In the years I’ve been involved in international, I haven’t seen a circumstance like we have in some of our markets, where wage inflation is in the high single digits and in some cases, double digits.”

China is third among interna-

tional markets in terms of return on investment, “but we can see a path to dramatically improv-ing our return on investment in China over time,” McMillon said. “So there’s upside in China.”

“China is a key strategic mar-ket for Wal-Mart and we are very well positioned to serve the country’s emerging middle class with great products they can trust,” said Wal-Mart Stores ceo Mike Duke. “Our management team is committed to continued growth in large and smaller cit-ies across China, and doing it in the right way. Our investments in new stores, innovation and retail supply chain will create jobs and support China’s plans for growth.”

The openings will create near-ly 19,000 new retail jobs, accord-ing to Wal-Mart.

McMillon said the company is also closing stores in China “that for location reasons or lay-out reasons are never going to generate the return that we need them to generate.” The closures represent up to 9 percent of the total store portfolio, but only 2 to 3 percent of total sales volume through next year.

Kering Revenues Drop in Q3

Wal-Mart Details China Expansion Plans

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By MARC KARIMZADEH

NEW YORK — Short of the Empire State Building being lit in greige, Manhattan on Thursday night was all about Giorgio Armani.

Not only did Mayor Michael Bloomberg dedicate the day to the de-signer, but Armani staged the latest of his “One Night Only” multifaced events at the SuperPier at Hudson River Park — all with the intent to entertain some 700 friends, family, loyal Armani clients, edi-tors and some high-caliber celebrities.

“I’m the perfect Armani woman,” Glenn Close stated matter-of-factly, short-ly after stepping off the red carpet. “It’s classic and beautiful and you can still be yourself. You don’t have to worry about all the frou frou and stuff, you know? I’m a yankee, after all.”

Surrounded by the designer’s retro-spective exhibition, Close got nostalgic, recalling her first Armani purchase: a blazer bought at the designer’s store on Madison Avenue in the early Eighties. “We’ve developed this huge kind of re-spect and affection for one another ever since,” she said before Jeremy Irons ap-proached to whisk her off to her seat at the runway show.

Close was joined by a coterie of bold-faced names, which included Dianna Agron, Lauren Hutton, Coco Rocha, Olivia Munn, Ellen Barkin, Jamie Tisch, Harley Viera Newton, Atlanta de Cadenet, Zani Gugelmann and a sneaky Leonardo DiCaprio, who averted photographers. All gathered to toast Mr. Armani. “I think it’s fair to say he changed the paradigm for classic elegance,” Renée Zellweger said.

Her sentiments were echoed by Ricky Martin, whose 2011 “Livin’ La Vida

Loca” tour was costumed by Armani. “Mr. Armani is a good friend. He’s been very generous throughout my career. His clothes look amazing anywhere, on the street or on stage.”

Oscar de la Renta, a “friendly” com-petitor to Armani, gladly accepted the in-vitation to the event. “I think it’s great,” he said. “New York is a capital of the world of fashion, and everybody wants to come here. When you come to New York, the one thing we’re not is a local city.”

Armani had a simple explanation for an event of such grand dimension. “Because I am a strong, powerful man,” he told WWD on Wednesday morning, fol-lowed by a back-and-forth in Italian with the interpreter to stress that his words

come across as “ironic.” There was no risk of being lost in translation here.

The designer was at the company’s Fifth Avenue headquarters amid prep-arations for the megaevent, which in-cluded a showcase of his “Eccentrico” exhibition, a runway show featuring his best Giorgio Armani Privé looks since he started showing haute couture in 2005 (less retrospective and more “a trip down memory lane through the most im-portant moments which will show both continuity and evolution together,” he said), as well as his entire “Nude” fall 2013 Privé show. It was followed by a party (or, as it was billed on the invite, a “Cocktail Dinatoire”).

The superlative outing has a deeper meaning for him.

“I haven’t been present in New York since 2009, the year the Fifth Avenue bou-tique concept store opened,” Armani said. “However, for me, America is one of the most important markets, even symbolical-ly. The public has been faithful to my idea of style from the start. Since my first store opened in New York in 1989, I’ve always had an enthusiastic following. A big show presenting my haute couture collections to the American public and an exhibition revealing the perhaps unknown side of my work is my way of saying thanks.”

America, he elaborated, is also key be-cause, “my idea of sophisticated, natural style has always received an enthusiastic response from the public, and because American women know how to wear my style in a way that is all their own and al-ways different.”

Asked what he specifically loved about America, he pointed to “the pragmatism. You get the feeling that if you have a good idea and the tenacity to put it into prac-tice, you can actually realize it here.”

4 WWD FRIDAY, OCTOBER 25, 2013

New York State of Mind

Illustrations from the capsule collection inspired by Armani’s fall Privé show.

Here and above: views of the “Eccentrico” installation.

Perhaps that also explained the mam-moth undertaking the event was. After 12 days of construction, the SuperPier was transformed into Armani-world, replete with an exhibition space, a nightclub and a runway show venue, using nearly 97,000 square feet of purpose-built space at the raw venue. To mark the occasion, Armani also created a “Nude” ready-to-wear col-lection influenced by the fall couture, ex-clusive to his Madison Avenue boutique as well as at Bergdorf Goodman.

On Wednesday, there was a flurry of activity in the headquarters here. Models, among them Frankie Rayder, were arriving for fittings; a makeshift atelier had seamstresses making final adjustments on looks for the show. One Italian editor — of about 30 members of the foreign press in town just for the occasion — stopped by to check out the scene. Armani and his entourage were in the middle of it all.

The designer expressed a vote of con-fidence in New York and the importance and ongoing potential for the brand in the U.S.

“It always has been such an impor-tant market,” he said, “with highs and lows, from the beginning. It’s been very positive as well because it was the first country to react positively to my fashion, so it’s very important to me. I have some-thing to give back to America.”

Pressed to elaborate on any peaks and valleys, he elaborated with several thought impulses. “The market. The highs and lows of the recession. Sometimes, the press has not always been very support-ive and has maybe put a shadow on my work, as well as the work of others. This is very important for me because I re-member this every now and then.”

“One Night Only” and “Eccentrico” are not new ideas. The latter exhibition of unique clothes and accessories was previously shown in Milan, Tokyo, Hong Kong and Rome, though the New York layout has been altered with additions and large photographs of some of the pieces on the walls.

“The idea of ‘One Night Only’ is an idea that’s been around since 2001,” he said. “Things in the world have changed a lot. If you look in the recent years, many brands and many other people do a lot. There are a lot of big events happening around the world. I feel that sometimes someone has to also give, and give back to the city.” And, he added, he was keen not to go overboard but make a statement that was powerful but also made sense for the company — “One has to find a fine line…an equilib-rium,” he noted.

He didn’t disclose the cost of the event, and would only say, “I still haven’t put all the money together, I haven’t added up all of the costs.”

While in New York, he was fully fo-cused on preparing for the event with little time for anything else. He was stay-ing at his Upper West Side apartment, and shuttling back and forth between the company’s headquarters on Fifth Avenue and the SuperPier. He didn’t get to one of his favorite New York pastimes — taking in a Knicks game at Madison Square Garden. Armani is a big basket-ball fan and actually owns his own team, the Olimpia Milano. “Unfortunately, I won’t have time,” he said. “In New York, it’s this desk, this office, the Pier and my house, and then I’m leaving.”

— WITH CONTRIBUTIONS FROM ERIK MAZA

WWD.COM5WWD FRIDAY, OCTOBER 25, 2013

PHOTOS BY STEVE EICHNER

Giorgio Armani with a model wearing a look from the fall Giorgio Armani Privé collection.

Dianna Agron

Renée Zellweger

FOR MORE IMAGES, SEE

WWD.com/fashion-news.

Glenn Close

Stephen Dorff

2014 WILL BE HEARST’S BIGGEST FASHION & BEAUTY YEAR EVER!And it was previewed at the fi rst-ever Magazine Upfront at Hearst Tower on October 15th. 30 blockbuster initiatives

were revealed, providing an unprecedented view of Hearst magazine media content in 2014, including:

The ELLE Video Issue and ELLE Weekly tablet editions Harper’s BAZAAR’s biggest beauty year ever Cosmopolitan LIVE! millennial events and the new Cosmo.com Marie Claire’s 20th Anniversary content programs Launch of Seventeen network with AwesomenessTV on YouTube Town & Country’s biggest fashion issue ever… plus much more!

We call it BIG CONTENT… The print, digital, tablet, social and experiential ideas that are fueling the Unbound year ahead.

2014 WILL BE HEARST’S BIGGEST FASHION & BEAUTY YEAR EVER!And it was previewed at the fi rst-ever Magazine Upfront at Hearst Tower on October 15th. 30 blockbuster initiatives

were revealed, providing an unprecedented view of Hearst magazine media content in 2014, including:

The ELLE Video Issue and ELLE Weekly tablet editions Harper’s BAZAAR’s biggest beauty year ever Cosmopolitan LIVE! millennial events and the new Cosmo.com Marie Claire’s 20th Anniversary content programs Launch of Seventeen network with AwesomenessTV on YouTube Town & Country’s biggest fashion issue ever… plus much more!

We call it BIG CONTENT… The print, digital, tablet, social and experiential ideas that are fueling the Unbound year ahead.

Nearly one year ago, McCoy set ambi-tious financial goals of achieving mid-sin-gle-digit revenue growth and low double-digit operating margin by 2016.

“The drivers of growth go back to mak-ing sure we have the right consumer prop-osition — that the products are great — to ensure we have the earnings opportunity for the representatives and that we make it easy for her to do business with us,” said McCoy. “It also means making deci-sions around how we prioritize our geog-raphies, whether it’s where to invest more heavily or where do we exit. The combi-nation of consumer focus, representative experience and geographic optimization are critical to drive our growth.”

Avon’s shift to looking at growth through a more local lens is already visible in the company’s You Make It Beautiful Campaign for the overhauled Avon Makeup Collection, which launched in Brazil in July featuring actress Camila Pitanga. It has since rolled out to 23 countries, including in the U.S., with several markets tapping local celebrities as spokespeople.

“As we’ve rolled out You Make It Beautiful, we are using differ-ent faces and different tones,” said McCoy. “So what you see in Turkey is different than what you see in Russia. They have a different ambi-ence that is relevant to the culture.” But the message, she emphasized, is the same: “We give you the products, you make it beautiful.”

Avon is taking the same approach to product development, working to put a local spin on its latest innovations.

“You can’t assume that there is just one customer worldwide,” said McCoy. “There’s no such thing as an average customer.

“We have great products and re-search and development capabilities and technology,” said McCoy, adding that opportunity lies in tailoring the nuances of the products — the smell, texture and feel — to suit local con-sumer preferences across Avon’s key markets, which include the U.S. and Brazil, among others. “That’s a change that we’ve made,” she said.

Change is exactly what Wall Street analysts want to see.

McCoy took the helm after a roll-er-coaster year for Avon marked by a string of poor earnings results; a chorus of bad press directed at her predecessor, Andrea Jung; an un-wanted takeover bid from its much smaller rival Coty Inc., and ongoing investigations by the Securities and Exchange Commission.

Since her arrival at Avon — following 30 years at Johnson & Johnson — McCoy promised to take a slow and steady approach to get the company growing. In November, she outlined a plan to cut at least $400 million in costs by the end of 2015.

McCoy’s efforts to cut costs and simplify the business have included unloading the Silpada jewelry business for $85 million — which the company acquired in 2010 for $650 million — and exiting a handful of markets, including South Korea, Vietnam and Ireland. Last week, news reports sug-gested that Avon also plans to shutter its business in France. McCoy declined to comment on France, but she did explicate the criteria the company uses when it de-cides to exit certain markets.

“We look at markets from a prioritiza-tion standpoint. Some markets we [exited] we’d have to spend a lot of money to be competitive, or we had challenges within the direct-selling areas in those markets. We look at market attractiveness as well

as our internal capability, and we made some decisions to exit a couple markets based on the fact that there was lower growth or we didn’t think we could be suc-cessful for the long term.”

The theory is that Avon’s resources and focus can now be funneled to its key markets, particularly where the direct seller continues to struggle.

In Avon’s second quarter, total rev-enues in North America declined 12 per-cent to $380.3 million, due to a drop in active representatives and a 14 percent fall in beauty sales in the region; in Asia-Pacific, revenues declined 9 percent to $198.1 million, dragged down by its busi-ness in China. Avon saw gains in Latin America, where total revenues ticked up 1 percent to $1.25 billion, boosted by Brazil and Mexico, and in Europe, Middle East and Africa, with revenues up 2 percent to $678.4 million, driven by a strong performance in Russia.

As Avon works to catch up, its peers are charging ahead in its key markets, pointed out ConsumerEdge Research analyst Javier Escalante. “The markets where Avon has the most critical mass are the key focus markets for every mul-tinational company,” he said, adding that the scenario forces Avon to defend its share there against both beauty firms and retailers, which ultimately puts more pressure on margins.

Escalante noted that Avon is losing share in Russia, Brazil and China because that’s where its stronger competitors are working to sharpen their edge with in-creased marketing spending. “The best [McCoy] can do in Brazil and Russia, for example, is stand her ground,” he said. “Avon needs to look for [other] markets where it can have a first-mover advan-

tage, and then develop criti-cal mass quickly,” he added, naming South Africa and Turkey as examples.

But Russia is proving to be a bellwether market for Avon on the digital front and on the product side. For instance, the company has had success in Russia, as well as other central and eastern European coun-tries, moving consumers to a higher price tier with the launch of its premi-um-positioned cosmetics line called Luxe. The line, which Avon introduced late last year, is slated to roll out to the rest of Europe, including the U.K., by the end of this year.

McCoy pointed to Luxe as an indica-tor of Avon’s ability to move consumers up the price continuum. “We want to con-

tinue to support the base business, but also see where there are oppor-tunities to strengthen the portfolio,” said McCoy.

“It’s about understanding who your representative is and making sure we have the appropriate prod-uct offerings and price points so that she has a range of products,” she con-tinued. “It’s about getting the product portfolio right so that you have price points low enough that people will come in and try, but then you ideally want to move them up. That’s one of the benefits of having fashion and home in [the assortment]. She gets more money if she sells a handbag than she would selling a lipstick.”

As for how McCoy plans to sur-mount Avon’s challenges in key mar-kets like the U.S. and China, she said the plan is to stabilize and then build.

“As it relates to the U.S., it’s clearly turnaround. We’ve struggled in the U.S. for a number of years. We are putting the focus back on the representatives. She’s the core of the company. We’re successful if she’s successful. The focus in the U.S. has been on how we fix the field, the store, which is our brochure, the representatives’ opportunity to earn money, and to look at how we can continue to improve the cost structure of the business.” To that end, Avon re-cruited former Tupperware executive Pablo Munoz as senior vice president and president of the North America division. He assumed the post in June.

“He has a lot of experience in direct selling and he has been very focused on how to diagnose the situation in the U.S. and figure out what the key steps are to turn it around,” said McCoy.

Turning to China, McCoy said Avon is working to stabilize the beauty bou-tique model, which has been a work in progress since Avon shifted away from direct selling in the country.

In a bid to accelerate growth across all markets, including Brazil, the firm last quarter said it planned to increase advertising spending in the second half of the year to support its launch pro-gram, which McCoy said was more heav-ily weighted in the back half of this year than in the prior year.

News of accelerated spending rattled some investors, many of whom are look-ing to see when the investment will be reflected in the top line.

“Last quarter, investors were definitely spooked that the company [forecasted] operating margin that would be flat in the back half of the year,” said Stifel analyst Mark Astrachan. “For shares to outper-form, operating margin needs to improve from current levels, while sales growth also accelerates.”

Within the last year, McCoy has made a string of key appointments to the executive committee, including Patricia Perez-Ayala as senior vice president, chief marketing officer, and global brand and category president; David Powell, senior vice president of business transformation and global supply chain; Munoz as se-nior vice president and president, North America, and Brian Salsberg, senior vice president, global strategy. One industry ob-server pointed out that aside from Munoz, none of the executives bring vast beauty industry or direct-selling experience.

“The board underestimated the im-portance of industry knowledge when ap-pointing key executives,” said the source, who asked not to be attributed. “They

need to first figure out the game before they can play it.”

McCoy sees it differently. “The area of opportunity as it relates to culture is how to become a more accountable culture so that we’re delivering on what we say we are going to do, how to become decisive and making sure that people understand we have a huge responsibility to our rep-resentatives because they have invested in this business,” she said. “I have a mix of new leaders who bring a fresh perspective, but we also have people who have been with Avon for a number of years who make sure we are keeping the company values.”

McCoy said the team she is building is the legacy she wants to leave at Avon. Asked what success to her looks like, McCoy said five years from now, she sees “a sustainable company with a sustain-able pipeline of leaders. That it’s robust and that we are continuing to grow.…I believe people drive results, and if you don’t have the right people and you don’t develop people within [the company], you’re not going to have sustainability. That’s really a personal agenda of mine.”


’’

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beautyAvon Takes Local Viewpoint

The combination of consumer focus,

representative experience and geographic

optimization are critical to drive our growth.

— SHERI MCCOY, AVON PRODUCTS INC.

{Continued from page one}

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WWD.COM

By BELISA SILVA

BEAUTYSTAT.COM founder Ron Robinson is certainly thinking big.

With the goal of be-coming the “Google of beauty,” Robinson’s site, which had been pri-marily based on social networking and blog-ging, will be relaunched today with a host of new features, including e-commerce capabilities.

“What our consum-ers have been telling us is that they want an easy way to comparison shop and that nothing is more frustrating to them then when a fa-vorite product is out of stock,” said Robinson, a 20-year beauty-indus-try veteran who has worked at firms like the Estée Lauder Cos. Inc. and Avon Products Inc. “We are making it much more easy to find availability, price com-parisons and are adding a per-sonalized content piece.”

According to Robinson, the site’s new e-commerce compo-nent connects consumers with personalized product recom-mendations through a propri-etary algorithm. In addition, the more a consumer uses the site the more products and re-views will be tailored towards the user.

Beautystat will also now allow users to become members by creating personal profile pages

to bookmark favorite products and articles. As far as the look goes, Robinson said it will have Pinterest-like “visual impact and less text for an easy user experience.

“We have created a search and discovery retail site,” he said, adding that brand part-nerships cover mass, spe-cialty and prestige brands, in-cluding Olay, Murad and Too Faced Cosmetics.

With a lineup of retail part-ners like Macy’s, Wal-Mart, Walgreens, Birchbox, Amazon.com, Nordstrom and Sephora, Robinson said talks are under

way with additional chains including Ulta, Bloomingdale’s and Target. “We heard from our [retail] partners that ultimately they are look-ing to grow incremental sales — they want new customers and they want to grow their online business, and what we are doing with the new platform is to bring them new users and drive traf-fic to their online sites,”

he said, adding that his site has about 200,000 monthly unique visitors, and expects “well over a million” by the end of 2014. “There are sites like this for technology, con-sumer goods and fashion, but no one has done it for beauty yet.”

As compared to the estimated $500,000 in first-year revenues when he launched the site in 2009,

Robinson said by the end of 2014 he anticipates generating $5 million from retail commis-sion, advertising and sponsored content, and providing market research and consumer insight.

Looking to the future, Robinson said he is seeking out more niche brands and international brands from dynamic beauty markets like South Korea.

9WWD FRIDAY, OCTOBER 25, 2013

The restaged site.

By JULIE NAUGHTON

A SPOKESMAN for the Personal Care Products Council on Thursday de-nied reports that the PCPC has backed out of talks with the U.S. Food and Drug Administration regarding cos-metics regulations.

“Our industry is com-mitted to continue working in good faith with FDA to build consensus to achieve our shared objectives and support the agency’s mis-sion to protect public health through effective oversight,” said Mark Pollak, senior ex-ecutive vice president of the PCPC, of a story that ap-peared in The Wall Street Journal on Thursday.

A meeting with PCPC’s executive board, scheduled for Oct. 2, was canceled in advance of the government shutdown but will be re-scheduled soon, Pollak noted. According to sources, the FDA has provided PCPC with an updated draft proposal, which PCPC is reviewing.

A spokeswoman for the FDA had not responded by press time.

The reports stemmed from a letter exchange between Margaret A. Hamburg, com-missioner of the FDA, and PCPC chairman E. Scott Beattie. In a strongly worded three-page letter to Beattie dated Sept. 26, Hamburg expressed her “disappoint-ment that PCPC appears unable to proceed toward

legislation on the basis of the framework agreement that the FDA reached with PCPC and the Independent Cosmetics Manufacturers and Distributors Association over the summer.” Included in the agreement were provisions allowing the FDA to institute a mandatory registration and listing system, recall “danger-ous cosmetics products” if the companies producing them declined to do so and insti-tute “regulatory fees” of $20.2 million yearly.

In a letter dated Sept. 30, Beattie reiterated PCPC’s commitment to work with the FDA. “We appreciate the op-portunity to work with the FDA, as we have done over the last nine months, and we remain committed to the agency’s mission to protect public health through effec-tive oversight. I have the full commitment of our board to continue our work with the agency and with Congress on an agreement.”

At PCPC’s annual meeting in February, Lezlee Westine, president and chief executive officer, named modernized government policies as a high priority for the organization. She also highlighted the indus-try’s continued support for leg-islation that would strengthen and enhance regulatory over-sight of cosmetics by the FDA, rather than individual states.

Federal regulations for cosmetics have not been changed since the Food, Drug and Cosmetics Act was passed in 1938.

By PETE BORN

CALVIN MCDONALD, presi-dent and chief executive offi-cer of Sears Canada, will take the helm of Sephora Americas, effective Jan. 1, as president and ceo. He will succeed David Suliteanu, who will return to his entrepreneurial roots as ceo of Kendo Brands, an LVMH Moët Hennessy Louis Vuitton-owned brand-creation incubator that Suliteanu ear-lier had established.

During the last 13 years, Suliteanu, 60, transformed the scope, direction and for-tunes of Sephora in North and South America. When he joined Sephora in July 2000, the San Francisco-based division of the French perfumery chain was a collection of 52 stores suffering acute growing pains. In the past decade, Suliteanu engineered a number of moves — including a partnership with J.C. Penney Co. Inc. in 2006 and stepping into Brazil in 2011 and into Mexico in 2012 — while winning a reputation for cutting-edge, cross-label merchandising and brand-building innovation that made the chain highly influ-ential in the beauty world. He tailored the product mix to better suit American tastes, fine-tuned the store’s open-sell format, and launched Sephora’s powerful Sephora Insider dig-ital customer loyalty program. Sephora Americas now has 388 freestanding stores and 480 other units inside Penney’s. That store count includes two units in Mexico and one in Brazil.

McDonald, Suliteanu’s 41-year-old successor, was named president and ceo of Sears Canada in 2011 and he set out to turn the business around after it had suffered an erosion of $1 billion in

lost revenue, bringing the total down to $4.5 billion while also losing significant amounts of gross margin. He designed a growth plan for both the retail and direct-selling businesses that focused on upgrading prod-uct mix, the level of innovation and improvements in the corpo-rate culture. As a result, Sears Canada has reported positive comp-store sales in apparel for three quarters in a row, for the first time in over seven years.

McDonald began his career at Loblaw Cos. Ltd., Canada’s largest food retailer, and worked there for 18 years, ris-ing through a succession of increasingly senior positions. His titles included execu-tive vice president of market-ing, CRM, Loblaw Brands & Corporate Strategy in 2009 and subsequently executive vice president of the Conventional Supermarket Division.

Both Sephora Americas and Kendo will report to Christopher de Lapuente, ceo of Sephora Global and a member of the ex-ecutive committee of LVMH.

Before joining Sephora, Suliteanu was group president for Diversified Businesses from 1998 to 2000 at Home Depot. In that position, he was responsi-

ble for a number of innovative businesses, includ-ing the Expo Design Center, Home Depot’s upscale remodeling and decor showrooms, and Villager’s Hardware, smaller-format hardware stores.

Prior to Home Depot, he worked for seven years at Macy’s East, beginning as senior vice president and general merchandise manager and rising to vice chairman and director of stores.

Previously, Suliteanu held posts at Foley’s, Sanger Harris and Macy’s West. He began his ca-reer at Bullock’s.

REVLON INC. moved back to the black in the third quarter with net income of $9.5 million, or 18 cents a diluted share, com-pared with a net loss of $15 mil-lion, or 29 cents a share, in the year-ago period.

The company’s net sales for the three months ended Sept. 30 decreased 2.2 percent to $339.4 million, from $347 mil-lion in the year-ago period. Excluding unfavorable for-eign currency exchange, sales gained 1.1 percent.

The results come less than a month after the beauty firm’s chairman and owner Ronald Perelman, who is also chairman and chief executive officer of MacAndrews & Forbes Holdings Inc., installed David Kennedy as vice chairman and interim ceo, replacing his previous succes-sor Alan Ennis. One week later, on Oct. 9, Revlon completed its $665 million acquisition of The Colomer Group, a move that broadens the beauty firm’s reach into the professional channel with brands such as CND nail pol-ish and America Crew hair care. Kennedy said the company is kicking off a “detailed integration plan over the coming months.”

He noted that the profes-sional brands will broaden the company’s scope and comple-ment Revlon’s mass-market beauty business.

During the quarter, global sales of the Revlon brand in-creased, but the Almay brand continued to struggle and saw sales decline, despite recent in-

troductions such as Smart Shade CC Cream Complexion Corrector, an expanded range of eye make-up removers and the lip line called Color + Care Liquid Lip Balm. Chris Elshaw, Revlon’s ex-ecutive vice president and chief operating officer, said those new products showcase changes that Almay is making across its pack-aging design, and that more im-provements will be seen in the brand’s graphics and merchan-dising in the coming months.

By region, net sales in the U.S. during the quarter declined 3.2 percent to $185.8 million, hampered by lower net sales of both Almay and Revlon. In Asia-Pacific, net sales were down 3.3 percent to $58.9 million, but gained 4.8 percent in local cur-rency. In Europe, Middle East and Africa, net sales gained 5 percent to $46 million, or 13.9 percent in local currency, boosted by higher sales of Revlon cosmetics in the U.K. and higher fragrance sales in Italy and South Africa. In Latin America and Canada, net sales decreased 3.2 percent to $48.7 million, but gained 2 percent in local currency, dragged down by business conditions in Venezuela.

For the nine-month period, net income was $27.3 million, or 52 cents a diluted share, com-pared with $4.6 million, or 9 cents a share, in the year-ago period.

Net sales declined 1.3 percent to $1.02 billion, compared with $1.03 billion in the prior-year pe-riod. Excluding foreign exchange, net sales gained 1 percent.

— MOLLY PRIOR

Beautystat Relaunches With E-commerce

Sephora Americas Names McDonald CEO

Revlon Reports Profit in Q3

PCPC: FDA Talks Proceeding

Calvin McDonald

David Suliteanu

INVESTOR CONCERNS follow-ing a report about widening of credit default swap spreads sent shares of J.C. Penney Co. Inc. down 4.1 percent to $6.75 in Big Board trading Thursday.

Credit ratings agency Fitch Solutions said the retailer’s five-year credit default swap spreads had widened, and noted that this underscores “continued in-vestor concern as the retailer

struggles to find its footing.”The sharp rise in cost to protect

Penney’s five-year senior bonds indicate that investors suspect a higher risk of default, Fitch added.

Volatility across the board in CDS trading is common. In the case of Penney’s, its shares have been slipping in the past week due to bankruptcy ru-mors, Canadian credit pullback rumblings and the scaling back

of its partnership with Martha Stewart Living Omnimedia Inc.

On Thursday Fitch said it is now projecting a cash burn of $2.8 billion to $3 billion in 2013, about $1 billion higher than its mid-May estimate. The ratings firm said that beyond 2013, Penney’s will have to generate a minimum of $750 million to $875 million in earnings before interest, taxes, depreciation and amortization

to fund ongoing capital expendi-tures in the $400 million to $500 million range and cash interest expense of $360 million to $375 million. Sales would have to be in the $13.4 billion to $13.6 billion

range, or 14 percent to 16 percent above 2013 projected levels.

Fitch concluded that the min-imum EBITDA and sales range requirement “appears highly am-bitious” given the execution risk.

Fitch also said Penney’s real es-tate portfolio, appraised at more than $4 billion, includes proper-ties owned and leased. The retail-er owns 306 stores, operates 123 ground leased stores and leases 675 stores. The retailer also owns nine distribution centers and leas-es another six. — VICKI M. YOUNG


Barneys’ Lee to Address Profiling Accusations

Galliano-Dior Case Inches AheadBy JOELLE DIDERICH

PARIS — John Galliano is only marginally clos-er to resolving the labor case pitting him against his former employers, Christian Dior Couture and John Galliano SA.

The Paris Court of Appeals said it would rule on Nov. 28 on a technical issue that will determine which court will hear the merits of the case at a later date.

At a hearing on Thursday, lawyers for both parties re-iterated the arguments they set out in front of the Conseil de prud’hommes, or Labor Relations Court, in February, which prompted that court to rule that it was qualified to con-sider Galliano’s claims against his former employers.

Dior opposed that decision, sending the case to the Court of Appeals and further delaying what is bound to be a protract-ed procedure in a cluttered legal jurisdiction.

As reported, Galliano’s lawyer, Chantal Giraud-van Gaver of Coblence & Associés, ar-gued that Galliano was a salaried employee, while Dior maintained that the British fashion maverick was more an independent contractor.

The designer was dismissed in March 2011 after 15 years as the couturier at Dior, following a series of public outbursts during which he ut-tered racist and anti-Semitic insults in a Paris

café. He was also ousted from the fashion house that bears his name.

At his trial on charges of public insult in June 2011, Galliano blamed work-related stress and multiple addictions for his behavior.

On Thursday, the court heard that Galliano earned at least 3.7 million euros, or $5.1 million at cur-rent exchange rates, a year plus benefits as the creative di-rector of the Dior and Galliano brands. It is understood he is seeking compensation in the range of 6 million euros, or $8.3 million, for his dismissal.

Giraud-van Gaver said she would argue that Christian Dior Couture failed to meet its obliga-tions under French labor law by not submitting Galliano to a med-ical test when it established its employment contract with him in 2008, after 12 years of contracting his services through his company, Cheyenne Freedom.

“Galliano was an addict. Everybody knew it and no one did anything about it,” she told the Court of Appeals. “There was

no medical visit either at the time he was hired, and no annual or biannual check-ups after that.”

Jean Néret of Jeantet Associés, the lawyer for Christian Dior Couture and John Galliano SA, told the court that Christian Dior Couture agreed in a letter dated Sept. 26, 2008, to grant Galliano an open-ended contract as artistic di-rector of Dior, but that Galliano never signed the proposed contract.

By LISA LOCKWOOD

NEW YORK — Mark Lee, chief executive officer of Barneys New York, has agreed to meet with representatives from the Brooklyn chapter of Rev. Al Sharpton’s National Action Network to discuss claims of racial profiling by two shoppers at the retailer’s Madison Avenue flagship here.

The meeting comes after two black New Yorkers filed notices of claim against Barneys over incidences in which they both claimed they were wrongfully detained after making expen-sive purchases at the store, setting off a fire-storm of publicity.

After NAN requested a meeting with Lee on Thursday, the Barneys ceo reached out to Sharpton and Kirsten John Foy, president of NAN’s Brooklyn chapter, to schedule a meeting next week, a Barneys spokeswoman said.

Foy said NAN plans to picket Barneys if the alleged pattern of racial profiling is not imme-diately rectified. Further action is also planned against the New York Police Department, which NAN claimed has a history of racial profiling against young African-American and Hispanics.

Trayon Christian, 19, of Queens, filed a dis-crimination lawsuit in state Supreme Court in Manhattan Monday against Barneys, the city and the NYPD. According to the lawsuit, Christian shopped at Barneys on April 29 and bought a $350 Ferragamo belt. After leaving the store, he was accosted by undercover NYPD of-ficers, who said someone at the store had raised concerns over the sale, he said.

On Wednesday, another shopper, Kayla Phillips, 21, a nursing student from Canarsie, in Brooklyn, told reporters that she had a simi-lar experience after purchasing a $2,500 Céline handbag at the store in February.

Lee posted a letter on Barneys’ Facebook page Thursday evening, which read, “Barneys New York believes that no customer should have the unacceptable experience described in recent media reports, and we offer our sin-cere regret and deepest apologies. Further to our statement of yesterday, we want to reinforce that Barneys New York has zero tolerance for any form of discrimination. We are a strong pro-ponent of equal rights and equal treatment for all human beings. Our mission is to ensure that all customers receive the highest-quality ser-vice — without exception. To this end, we are conducting a thorough review of our practices and procedures as they relate to these mat-ters to ensure that they reflect our continued commitment to fairness and equality. To lead this review, we have retained a civil rights ex-pert, Michael Yaki, who also serves on the U.S. Commission on Civil Rights. The commission has been the nation’s watchdog for civil rights for more than 50 years. Mr. Yaki will be provid-ed with unrestricted access to all aspects of our store operations. In addition, Barneys New York has reached out to community leaders to begin a dialogue on this important issue.”

An NYPD spokesman said, “The incident which occurred last April is under internal review.”

Meantime, a petition was started on Change.org by Derick Bowers, a Brooklyn-based father and entrepreneur, calling on Jay Z — who recently forged a partnership with Barneys on a clothing line called “A New York Holiday” — to sever all ties with Barneys in the wake of accusations of ra-cial profiling. “We can no longer tolerate blatant prejudice and discrimination. It is clear that the minority buying power is devalued by some. We must withdraw support to those who will not sup-port us,” said Bowers.

Jay Z couldn’t be reached for comment.

By KRISTI ELLIS

CANADIAN RETAILER Loblaw Cos. Ltd. outlined plans to pro-vide long- and short-term com-pensation to injured survivors and victims’ families linked to one of the factories producing its apparel at the Rana Plaza building complex, as several rallies and protests in the U.S. and in Bangladesh marked the six-month anniversary Thursday of the collapse of the structure, which killed 1,132 people.

British retailer Primark also announced Thursday that it has set a timetable to begin providing long-term compensa-tion payments to workers and their dependents of New Wave Bottoms, the factory producing its apparel in the Rana Plaza complex, and is considering extending another short-term round of payments to the esti-mated 3,600 victims of the disas-ter for another three months.

As part of its longer-term plan, Loblaw said it will begin providing direct financial com-pensation in 2014 to workers and victims’ families who were employed at the New Wave Style factory in Rana Plaza that pro-duced apparel for Loblaw.

Primark had been the only retailer so far to provide com-pensation to all of the 3,600 Rana Plaza victims and it said Thursday it will consider paying another three months of wages to all of the victims if the other 27 brands who sourced apparel in the complex fail to step forward and make a contribution. Loblaw echoed Primark, saying it will also immediately provide three months of wages to about 3,600 individuals and their depen-dents, “regardless of the brand apparel that was being produced in their workplace,” if other companies fail to come forward.

Worker’s rights and labor groups estimate that 1,132 worker died in the Rana Plaza collapse and another 2,500 were injured.

“Within a week of the col-lapse of Rana Plaza, Primark committed to paying long-term compensation to the victims of the disaster as quickly as pos-sible,” a spokesman said. “Since then, the company has been working consistently to create a framework that can be adopted by other retail brands.”

Primark and now Loblaw have made the payments to Rana Plaza victims unilater-ally and have also joined forces with two other companies — Benetton and El Corte Inglés — in calling on other brands and retailers to contribute. The companies are part of the Rana

Plaza compensation coordina-tion committee that is work-ing to develop a large com-mon compensation fund and pressing other companies to join. The Bangladesh Garment Manufacturers and Exporters Association, IndustriALL Global Union and the Clean Clothes Campaign are also on the committee.

Marking the six-month an-niversary of the Rana Plaza collapse, several organizations held rallies and protests in the U.S. and in Bangladesh.

Kalpona Akter, executive di-rector of the Bangladesh Center for Worker Solidarity, joined the NYU Students Labor Action Movement, an affiliate of United Students Against Sweatshops, at a rally outside of the site of the Triangle Shirtwaist Factory fire in New York City to press companies to sign the Accord on Fire and Building Safety in Bangladesh and pay into the vic-tim compensation fund. USAS also held demonstrations at more than 30 colleges and universities across the country as part of an “International Week of Action to End Deathtraps” in commemora-tion of the anniversary. Students and workers are pressing uni-versity administrators to require that brands making apparel for U.S. universities to sign onto the legally binding accord, which 100 companies have signed.

Meanwhile, the National Garment Workers Federation held a sit-in in Dhaka on Thursday in front of the Rana Plaza site. It served as a memori-am and call for compensation, as family members of the dead and dozens of orphaned children, along with the injured congre-gated at the site, which was once home to five garment factories.

The need for this focus on action was underlined by a study released on Wednesday by ActionAid, which surveyed 2,297 people, nearly two thirds of the survivors and families of those who died in the Rana Plaza collapse. The report noted that 94 percent of the re-spondents surveyed had not re-ceived compensation and were still suffering from physical and psychological injuries.

“It is indefensible that for six months, multimillion-dollar companies have left the victims to fend for themselves,” said Farah Kabir, ActionAid country director for Bangladesh. “The victims of the Rana Plaza disas-ter are in urgent need of medi-cal and psychological support, as well as the financial means to fe ed and care for their families.”

— WITH CONTRIBUTIONS FROM MAYU SAINI

Widening Credit Spreads Weigh on Penney’s

$6.75CLOSING PRICE OF J.C. PENNEY

SHARES ON THURSDAY.

John Galliano

Loblaw, Primark CommitTo Pay Bangladesh Victims

WWD.COM

TALK ABOUT friends in high places. HL Group founding partner Hamilton South was the honoree at the National Council on Alcoholism and Drug Dependence’s inaugural gala at New York’s Waldorf-Astoria Wednesday night, where the powerful turnout included Ralph and Ricky Lauren, Annette and Oscar de la Renta, David and Sybil Yurman, Police Commissioner Ray Kelly, Ellen Barkin, Kelly Ripa and Mark Consuelos, Barbara Walters, Diane Sawyer, David Lauren and Lauren Bush Lauren, Bryan Lourd, Jessica Hart, Richard Dickson and Agnes Gund. “We are honoring Hamilton, that’s why we’re all here,” said Diane von Furstenberg, who, with husband Barry Diller, Aby and Samantha Rosen, Starwood Capital Group’s

Barry Sternlicht and Abernathy MacGregor’s James Abernathy cochaired the event. “Hamilton always helps, does everything for everyone else. Tonight is about showing that we support everything he is involved in,” von Furstenberg added.

Across town, art party regulars descended on Moynihan Station for the Whitney Museum’s annual gala and studio party, sponsored this year by Louis Vuitton, to toast Ed Ruscha on his more than 50-year oeuvre. “I’m commending the Whitney for its undying support for art of any kind — crazy art, not so crazy art, anxious art, art in free fall, emergency art, gay art, shoot-for-the-moon art, art that is not even trying to be art

art and just plain old art,” the artist told the room, filled with the likes of Bob Colacello, Yvonne Force Villareal, Vito Schnabel, Lisa Perry, Jeff Koons, Chuck Close, Dustin Yellin and honorary chair Michelle Williams. “I am so [pleased] about the new downtown space,” the actress said before dinner, safely cloistered in the VIP area. Adam Weinberg later relayed happily that construction is on time and on budget. The Renzo Piano-designed building is slated to open in spring 2015. “It won’t take me as long to get to and from Brooklyn,” Williams smiled.

Further downtown, literary luminaries — Jonathan Ames, Jay McInerney and Gary Shteygart among them — joined Zoe

Kazan at Prada’s SoHo flagship, transformed into a provisional theater for the occasion. “I’m not a natural public speaker,” Kazan said, who was one of the chosen speakers tasked with reading excerpts of the winning entries from Prada Journal’s literary contest. The writing competition, launched last April in conjunction with Italian publishing giant Giangiacomo Feltrinelli Editore, received more than 1,300 entries in over 29 languages, with 13 runners-up and five winners — Mattia Conti, Leisl Egan, Angel Mario Fernández, Sarah Harris Wallman and Peng Yang — four of whom were flown in especially for the event (and all of whom will receive cash prizes and their work published in upcoming digital and print booklets). “I almost wrecked my

car [when I found out I was a winner],” Conti said.

On the other side of the country, the Council of Fashion Designers of American made its annual West Coast sojourn for a fashion show and afternoon tea feting the 10 CFDA/Vogue Fashion Fund finalists. “I’m going to take far better notes this year,” Mary Elizabeth Winstead said of the clothes and accessories coming down the runway shortly before taking her front-row seat, sitting with the likes of David and Victoria Beckham, Lena Dunham, Diane Kruger, Olivia Wilde, Rachel Bilson, Lizzy Caplan, Ireland Baldwin, Gabriel Mann, Dakota Johnson, Milla Jovovich, Marisa Tomei, Maria Sharapova and Jessica Paré.

— MARC KARIMZADEH, TAYLOR HARRIS, KRISTI

GARCED AND MARCY MEDINA

11WWD FRIDAY, OCTOBER 25, 2013

FOR MORE PHOTOS, SEE

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Lena Dunham in Reed Krakoff.

Michelle Williams in Louis Vuitton.

Oliver Platt and Zoe Kazan, both in Prada.

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MEOW MIX: Choupette, Karl Lagerfeld’s beloved and now famous pet, has inspired a capsule collection that is sure to be the cat’s meow for holiday shoppers.

All in the German designer’s signature black and white, items range from a knit cap with perky cat ears and leather whiskers for 45 euros, or $61.50 at current exchange, to 340 euros, or $465, for a large leather shopper, also with cat ears. A key chain, iPad and iPhone covers, fingerless leather gloves, a wool scarf and a cross-body bag round out the range.

The collection will be available from Nov. 12 exclusively at Karl Lagerfeld stores in Paris, Berlin, Munich, Amsterdam, Beijing, Shanghai and the newest location, Antwerp, Belgium. The 1,600-square-foot unit, which opened Thursday at 53 Schuttershofstraat, is being operated in partnership with Group Alain Broekaert, the official distributor in Belgium and Luxembourg of brands including Tommy Hilfiger, Pepe Jeans, Strellson, Agent Provocateur and Porsche Design. The Antwerp unit is to showcase Lagerfeld’s women’s ready-to-wear and accessories.

Meanwhile, Lagerfeld is soon headed to São Paulo for the opening party on Tuesday of “The Little Black Jacket,” Chanel’s traveling exhibition about the photo book with the same title by the designer and Carine Roitfeld. The showcase, at the Oscar Niemeyer-designed Oca exhibition hall in Ibirapuera Park, is to open to the public from Oct. 31 through Dec. 1.

Lagerfeld noted it’s one of the most successful photo books to date, having sold some 140,000 copies. A new expanded edition comprises 280 pages. — MILES SOCHA

MINKOFF FINED: Rebecca Minkoff has been fined $77,000 by the U.S. Department of Labor’s Occupational Safety and Health Administration. The handbag maker is being charged for not meeting workplace safety standards at its 33 West 17th Street

corporate office and showroom in New York. Representatives from

OSHA’s Manhattan office issued the complaint after an inspection prompted by workers’ complaints.

OSHA found that many of the sixth-floor offices and the showroom space were

overcrowded and congested with boxes, rolling racks, workstations,

chairs, equipment, storage and other materials, according to an OSHA statement released Thursday. “It’s critical to maintain swift, clear access to emergency

exits, and it is a requirement under the law,” said Kay Gee, OSHA’s area director in Manhattan. “Management knew of the hazard of compromised emergency exit access, yet allowed the hazard to continue. Because of that, we are proposing the maximum fines allowable for the willful and serious violations.”

OSHA issued Rebecca Minkoff LLC one willful citation with a proposed fine of $70,000 for the exit access hazards, and one serious citation with a $7,000 fine for the slip, trip and fall hazards.

Alexandra Boet, chief financial officer of Rebecca Minkoff, said, “The most important thing to Rebecca Minkoff LLC is the welfare and safety of our employees. During an inspection, some deficiencies were brought to our attention on a matter that had been tasked with one of our upper management members, who is now no longer with the company. Since then, this problem has been rectified and we have taken action and contested the severity of the fine. We are a rapidly growing company and are moving into a new and custom-built space in the first week of December that is three times the size of our current location.”

— ROSEMARY FEITELBERG

FASHION SCOOPS

Items from Karl Lagerfeld’s Choupette

capsule line.

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MORT, FONDLY REMEMBERED: Columnists George Rush and Joanna Molloy have written a memoir of sorts about their many years as the Nick and Nora of the gossip trade, “Scandal: A Manual.” It’s a zippy overview of nearly three decades on the front lines of the tabloid wars that has the real-life couple trading anecdotes about their battle scars and greatest hits. In between stories about Mia Farrow, the Donald, Madonna and other Nineties tabloid fixtures, an impressionistic portrait emerges of what it was like working for Mort Zuckerman, the owner of the New York Daily News, where they finished a 15-year run of their namesake column in 2010.

The two write that having the socially ambitious billionaire as a boss meant every now and

then helping out some of his buddies, like Rupert Murdoch who, as owner of the New York Post, had taken care of Zuckerman whenever personal items about him got close to surfacing in the Post’s Page Six. In the late Nineties, when Rush and Molloy found out Murdoch, then married to second wife Anna, had started seeing a younger woman — his now estranged third wife Wendi Deng — the two moguls came to a gentleman’s agreement in private about the story — Rush and Molloy could write about Murdoch’s divorce, but mentions of the younger woman were to be omitted. “I don’t want to get into a pissing match with Rupert,” Zuckerman said at the time, according to the book, which is out this week.

Later, when it was speculated Deng was cheating on Murdoch, he again appealed

to Zuckerman, who helped quiet the rumors by running a picture in the News of the

smiling couple out and about in New York.

The boss’ involvement wasn’t always so heavy-handed. In 2009, Rush got hold of a lawsuit against financier Jeffrey E. Epstein, who had once bid for New York magazine with Zuckerman. The Daily News owner arranged for an interview between the columnist and his former business partner. When Epstein’s accusers sued to make public the interview, which had been off the record, Zuckerman was stuck with an expensive court case. A judge ordered Rush to turn over his tape, but Zuckerman pursued an appeal to overturn the order. “Despite his anger, Mort stepped up to the plate,” Rush writes.

In the book, Rush and Molloy also relate a few anecdotes about their former peers on the beat, Cindy Adams and Richard Johnson, who are now the lone survivors

from the heyday of the tabloid gossip columns. Johnson unveiled a regular gossip column in the Post last week. Once, Molloy confronted Johnson when she suspected his then wife, publicist Nadine Johnson, had tipped him about a story she was already working on. Johnson claimed he was already looking into the story. But then his wife made the mistake of accidentally leaving a voicemail for Rush and Molloy. “God, Richard is such a good liar,” she said before hanging up. On another occasion, Rush had the temerity to look into a story about Dewi Sukarno, wife of the Indonesian president, and found himself on the receiving end of a phone call from Adams, whose forte used to be dictators and their wives. “Dewi is a dear friend of mine,” Adams declared. “If anyone writes about her, it will be me.” — ERIK MAZA

Jil Sander Exit Raises Questions for Brand

MeMo pad

almost two years for any change in strategy to filter through to the consumer. This industry works on a long-term basis, so having this kind of turbulence in the short term does not help to foster the long-term viability of a house and the loyalty of its customers.

“What we can wish for the house now is to find a long-term strategy and stick to it.”

Christopher Everard, founder of strategic London-based head-hunting office InterLife, said the company’s “aesthetic is still rele-vant, but the brand has been dam-aged by a low level of credibility in terms of expertise and vision. The level of commercial leader-ship during the Raf Simons ten-ure clearly did not match that of the creative vision, for example.”

One source said that brands such as Céline, or COS at a high-street level, have “appropriated the Jil Sander aesthetics and they are doing it better and at prices that are not as steep,” even going as far as saying that “the business is done. They may be able to pro-long it for a few years, but it’s also going to be hard to recruit new talent. What if she wants to come back suddenly?”

Many in the industry believe Simons was disrespectfully treat-ed at the time despite his con-tribution to the brand, said the source. “I never understood why that was allowed to happen and it showed poor management.”

Sander returned to her name-sake brand in February 2012, and Simons was elbowed out after seven years as creative director.

Armando Branchini, deputy chairman of Milan consultancy InterCorporate, disagreed on the issue of the brand’s longevity. “It’s worth continuing to invest in the brand, which has a posi-tive history,” he said. “It’s always been a niche label, but clean and of the highest quality, it deserves an investment in innovation.”

Branchini said the label is now detached from the designer. “It has a reputation that comes from the past, because Sander did not achieve a comparable success with her latest collec-tions,” he said. “She had a dis-tinctive voice, she was one of the inventors of rigorous under-statement, but now it no longer has a unique value proposition.”

Last year, group sales

reached 110 million euros, or $140.8 million at average ex-change, up 6.7 percent com-pared with 2011, and the com-pany reached breakeven.

The company has been in-vesting in expanding its foot-hold around the world, entering China with stores in Beijing and Shanghai this spring. Jil Sander’s main markets remain Germany, Austria and Switzerland. Earlier this year, chief executive officer Alessandro Cremonesi said that with Sander back on board, cus-tomer feedback was positive.

Armando Mammina, Milan-based marketing and strategic consultant, said Sander “may have found herself uneasy with the fast-er speed and more global dynam-ics of the business today, perhaps

somewhat out of context.” Mammina believes that the

brand still reflects Simons’ iden-tity and that management should aim to tap “a young, fresh de-signer, an emerging creative tal-ent that has some newness to bring to the brand.” He pointed to Gabriele Colangelo as a potential candidate. “Simons developed a new mold, and Sander did not up-turn it, nor did she further devel-op it. The company needs some-one that could help expand the brand in new markets and tap into new moods, in Southeast Asia, for example,” said Mammina.

Justin O’Shea, buying direc-tor of German luxury e-tailer Mytheresa.com, said he was not surprised by the news. “There has been an ‘uneasy’ feeling

within the brand since Simons left. This created a lot of spec-ulation about the longevity of Ms. Sander.” However, O’Shea noted, “We actually had very positive summer 2013 sales re-sults and fall is going OK. It is a much more classic Jil Sander identity, which focuses around luxury basics. It reached a dif-ferent customer compared with the Raf collections.”

As to the brand’s future devel-opment, he commented, “Well, that is the big question. It’s hard to have such a quick succession of creative directors without any col-lateral damage. I love Jil Sander and I can only hope that they look very intensely and cleverly to find a successor who can [create] a new ‘life’ for this amazing brand.”

Mario Eimuth, ceo of Munich-based Stylebop.com said: “I do regret she’s moving on, especial-ly as I saw how enthusiastic she was working with her team and how excited she was being back. She had so much energy, so she must have very serious personal reasons for doing this.”

The collection “has been sell-ing very well for us, and I think the collection she delivered for spring-summer was amazing. I’m 100 percent sure there were no economic reasons for this, or dis-harmony between management and creative,” he noted. “She’s got a good team there, but the fact that they’re saying the team is tak-ing over is an interim thing. It in-dicates they were very surprised.”

Last year, Sander returned

to the house she founded in Hamburg, Germany, in 1968. She had been absent from it for eight years and this marked her third comeback with the label. The designer rose to fame in the Eighties and Nineties with her tailored basics crafted from luxurious fabrics. Sander sold 75 percent of her company to Prada Group in 1999, and made a high-ly publicized exit a year later. She was succeeded by Milan Vukmirovic, who did sporty disco flash until Sander returned in May 2003, only to split again 18 months later. After her second departure, the brand’s creative reins were handed over to its long-standing design team.

Prada tapped Simons as Sander’s new creative director in July 2005. He demonstrated an immediate affinity for wom-en’s wear, making dresses a top-selling category at the brand and turning the show into one of the most anticipated and in-fluential of each Milan season, both women’s and men’s wear.

The brand changed hands two more times during Simons’ tenure. Change Capital Partners acquired Sander from Prada in February 2006 and sold it to Japan’s Onward Holdings two years later. The Tokyo-listed ap-parel group and Gibò Co. SpA paid 167 million euros, or $230 million at current exchange.

It is no secret that Sander is a hands-on designer with a me-ticulous attention to detail, and one known to leave her studio in Hamburg late at night. She also has a reputation for being willful and headstrong. Sander famous-ly clashed over creative control with Prada ceo Patrizio Bertelli

when the Italian company owned her fashion house. The designer in 2011 also abruptly ended her collaboration with Uniqlo, a unit of Fast Retailing Co. Ltd., for the +J collection, which was launched in October 2009.

Sources in Milan say that, despite her frequent arm-wrestling with Sander ceo Cremonesi, the designer was not fired and she did not leave because of any bad blood.

While declining additional comments, Cremonesi said Tuesday: “On behalf of the group I want to thank Jil Sander for her remarkable contribution to the brand over this period. Her outstanding design and creative leadership have been crucial in reinforcing the brand and positioning it to foster fur-ther prosperous growth.”

In February 2012, many re-tailers and editors applauded Sander’s return, while others praised the departing Simons for moving the label forward.

At the time, company prin-cipals, while praising Simons’ contributions, said they expected Sander’s return to deliver a bump in sales — as was the case the last time she came back to the brand.

WWD described Sander’s spring 2013 women’s collection as “a laudable comeback,” and saw her in “stellar form” for fall 2013, presenting a “breathtaking” and “serene” collection. But for spring 2014, WWD said, “Numerous beautiful parts didn’t coalesce into the kind of clear, powerful statement that has always charac-terized her best collections.”

— With contributions from melissa Drier

anD Joelle DiDerich

{Continued from page one}

Spring runway looks from Jil Sander.

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Jil Sander

The cover for “Scandal: A Manual.”

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friday, october 25, 2013 $3.00 women’s wear daily …sales fall 5.4 percent in the three months to...

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