Puma Sets Five-Year Plan/2Activewear: Emerging markets, e-commerce and less reliance on footwear seen as keys to its future. Coach Profits Up 34.1 Percent/3Financial: The company’s shares jump 11.9 percent after strong growth in the first quarter. Looking to the Digital Future/6WWD Forum: Executives from A|X Armani Exchange, Express, 1-800-Flowers, Macy’s and Saks Fifth Avenue point the way. A Triple Play of Accessories Designers/4Accessories: A look at the latest designs from Slane, Faraone Mennella and Judith Leiber.

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Chinese TouristsAre Luxe’s Savior

By WWD StaffNI HAO, BIG SPENDER.

China’s fast-growing economy is fueling a rise in outgoing tourism, with shopping for high-end fashion and beauty products near the top of travelers’ agendas — a windfall that is creating happy smiles among luxury brands and retailers from Paris to Los Angeles. Brands from Louis Vuitton to Ralph Lauren, Graff to Gucci have all pointed to the wave of Chinese tourists traveling abroad as a key factor in luxury’s resurgence after the global recession of 2008.

Indeed, the China Tourism Academy estimates Chinese tourists spend about 500 euros, or about $700, an hour when shopping in Paris, home to Galeries Lafayette and Louis Vuitton’s flagship on the Champs-Elysées.

“They like buying high-end products with better quality, and of course higher prices. Fashion-forward products or products still not being sold in the domestic market are very popular,” said Zhang Guangrui, head of tourism research at the Chinese Academy of Social Science. “Now, on average, Chinese tourists spend more money than /10

WWDWomen’s Wear Daily • Wednesday, October 27, 2010 • $3.00

Shopping Spree

The Offspring

Introducing Brood, designer Serkan Sarier’s stellar debut collection of washed, silk taffeta evening and cocktail dresses,

including this one, that blend classic, couture volumes with technical sport

details. Sarier, who is based in New York, spent time in the design studios of Emanuel Ungaro couture, Giambattista Valli, Haider Ackermann, Olivier Theyskens and, most

recently, Carolina Herrera, before breaking out on his own with Brood, so named

for the reference to an energetic, young breed. For more on the collection,

see WWD.com/fashion-news.

A Judith Leiber wedding-cake minaudière.

WWD, WEDNESDAY, OCTOBER 27, 20102

Stealing someone’s dog sounds bad enough in itself, but what about when said hound is Elizabeth Taylor’s pooch? According to Loulou de la Falaise, that’s the reason she got kicked out of boarding school in Gstaad. But, as the daughter of Maxime de la Falaise told WWD in a July 22, 1976 profile, she was hardly to blame. “I was kicked out rather fast,” she recalled. “I was accused of steal-ing Liz Taylor’s dog, but it wasn’t true. I found this abandoned dog — his paws were bleeding in the snow. I took him home and took care of him.” Still, our Paris corre-spondent noted she had other antics up her sleeve — for instance, “her habit of asking Gstaad residents for jobs.” “That didn’t go over well at all,” said de la Falaise. “One doesn’t do that sort of thing at nice-little-rich-girls’ private boarding schools.” Here, more from that 1976 interview.

— Venessa Lau

De la Falaise on the women in her family: “[We] have the courage of leading one’s life with a sort of flamboyancy — it’s a question of the authority of one’s own character.”On working at Yves Saint Laurent: “On the 16th of September five years ago, I started working in Saint Laurent. At first I just sort of walked around the design area a lot and said, ‘Oh — that’s pretty.’”On Saint Laurent: “Before I met Yves, I couldn’t concentrate for more than five minutes. He has taught me how to work. He has taught me so many things. Everything.” On Kenzo Takada: “Kenzo and I met two-and-a-half years ago over a dinner with some mu-tual friends. We were both very, very drunk. We immediately made huge declarations to each other.”On American style: “Most American women are quite good-looking. And they’re quite good at dressing. A [bit] boring maybe, but in gen-eral American women who buy fashion look quite good.”

WWD.COM

By Joelle Diderich

HERZOGENAURACH, Germany — Puma AG chief executive of-ficer Jochen Zeitz has a simple way of summing up the German activewear firm’s ambitious five-year growth plan: “Make more out of less.”

Zeitz on Tuesday laid out the company’s eagerly await-ed “Back on the Attack” plan, designed to drive sales to 4 billion euros, or $5.16 billion at current exchange, in 2015 from 2.5 billion euros, or $3.22 billion, at present, at an in-vestor day at the company’s headquarters here.

Puma plans to make controlled investments into key growth drivers such as e-commerce and emerging markets, and will adjust its product mix to rely less on footwear and more on accessories such as those produced by equipment maker Cobra Golf, its most recent acquisition.

But Zeitz said the company would focus mainly on grow-ing its existing assets — quashing speculation that acquisi-tions would account for a significant portion of incremen-tal sales in the next five years.

“We have to be focused and not try to do everything for everyone,” he said. “We need to focus and grow based on strength before we attack new markets.”

The company, controlled by French retail-to-luxury con-glomerate PPR, on Tuesday reported a 14.2 percent rise in third-quarter profits to 77.6 million euros, or $100.1 mil-lion, versus 67.9 million euros, or $87.6 million, a year ago.

Puma raised its full-year 2010 sales forecast to a mid- to high-single-digit increase, citing “an improvement in the overall outlook for the fourth quarter,” and said it would acquire full control of its operations in China, which it sees as a key driver of future growth.

Revenues in the third quarter rose 16.5 percent to 784.3 million euros, or $1.01 billion, from 673.4 million euros, or $868.8 million, a year ago. Dollar figures are converted at average exchange rates for the period.

Footwear sales in the quarter rose 6 percent on a currency-neutral basis, versus a 1.3 percent uptick for apparel and 25 percent for accessories. By region, the Americas logged the strongest gain, up 26.7 percent on a currency neutral basis.

Zeitz predicted 2011 would mark a turning point for the firm, which has lost some of its luster in recent years as it faced increased competition, internal challenges resulting from its expansion into new categories and markets and the global economic crisis.

“Puma has gone through challenging times over the last couple of years, but we feel that the time has come to close that chapter at the end of this year and turn over a new page,” said the executive, who was appointed last week as the head of PPR’s new sport and lifestyle division — signaling the group’s shift from luxury toward more mass-oriented brands.

After undergoing a restructuring plan, Puma plans to focus on its 12 biggest markets, which account for 60 per-

cent of business today, and core categories: team sport; running, training, fitness; motor sport, and lifestyle.

Financial targets for 2015 include growing net sales in high single digits and keeping gross profit margins roughly stable. Zeitz said it was “unrealistic” to expect an increase in gross margins, since much of the growth would come from emerging markets, where margins are lower.

The Puma brand is expected to drive 90 percent of growth, with non-Puma brands — including Cobra Golf, Tretorn and any future acquisitions — accounting for just 10 percent.

Puma had a net cash position of 360.7 million euros, or $464.9 million, as of Sept. 30, versus 339.5 million euros, or $437.9 million, at the same time last year.

Describing the company’s cash position as “very strong,” Zeitz said it would look at acquisitions “pretty much to any three-digit size” in terms of millions of euros. Target brands would have to either strengthen the existing portfolio through complementary assets, or allow the com-pany to enter adjacent market segments.

“The focus ideally should be on growth brands that at least have a CAGR [compound annual growth rate] that is comparable to the five-year plan that we have laid out so far, so high single digits as a benchmark, either as of early days or after one or two years,” he added.

In terms of channels, e-commerce is expected to be the biggest growth driver in relative terms. It is seen accounting for 8 percent of the total business by the end of 2015, com-pared with 12 percent for retail and 80 percent for wholesale.

“We are overinvesting into this channel to boost sales growth and evolve into a leader in the digital space,” said Zeitz.

Core categories will drive 80 percent of sales growth until 2015 and other categories — including golf, outdoor, kid’s wear and sport fashion — the remaining 20 percent.

In terms of the product mix, apparel and accessories are set to outperform footwear. By the end of 2015, foot-wear is expected to account for 50 percent of sales versus 54 percent today, apparel for 35 percent compared with 33 percent, and accessories for 15 percent versus 13 percent.

Puma sees 42 percent of the “Back on the Attack” growth coming from its top six emerging countries (China, Korea, India, Russia, Brazil and Mexico), while the top six mature countries (U.S., Japan, France, Germany, Italy and the U.K.) will contribute 38 percent.

Puma has refined its offer thanks to in-depth consum-er research and plans to launch additional studies in key strategic markets including the U.S., Japan, China and India in order to adapt the profiles to regional tastes.

However, it does not plan any additional designer collabo-rations beyond existing collections developed with Hussein Chalayan, Alexander McQueen and Mihara Yasuhiro.

“The reality is what we started more than 10 years ago, with Jil Sander for example, became standard for everyone to do,” said Zeitz. “We will continue selectively with design-ers and with the ones that we have, but we don’t necessarily think that it makes sense to start new [collaborations].”

Puma plans to selectively increase its media spend as a percentage of sales during the first years of the plan, with a shift from television and print toward digital marketing, and sports and event marketing.

In China, Puma is taking full control of its joint venture with Swire Resources Ltd., in which it holds a 51 percent stake, effective Jan. 1. Financial terms were not disclosed, but Zeitz said that the sum was in the “double digit millions.”

“The entry barriers have risen, competition is fierce and therefore it will take a little bit longer, but we are opti-mistic that we arrived well positioned in China as a brand. We just need to fuel the fire a little bit now. So, it should be the number-one market but it may take a little bit longer than the other markets,” he said.

Puma plans to remodel its existing stores there, develop more specific Chinese collections and invest more in selec-tive campaigns to drive sell-through, he added.

• FASHION: See They Are Wearing: Autumn Leaves and Banana

Republic’s spring collection at WWD.com/fashion-news.

• MARKETS: See additional images from the China tourism story at

WWD.com/markets-news.• Global breaking news

• Daily stock quotesPHOT

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TODAY ON

.COMWWD“They know what they want and do not mess about.” — Sarah Rutson,

fashion director, Lane Crawford,

on Mainland Chinese tourists.

Page one.

QUOTEDAILY

CORRECTION

TO E-MAIL REPORTERS AND EDITORS AT WWD, THE ADDRESS IS FIRSTNAME.LASTNAME@FAIRCHILDPUB.COM, USING THE INDIVIDUAL’S NAME. WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2010 FAIRCHILD FASHION GROUP. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A.VOLUME 200, NO. 88. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one additional issue in January, May, June and December, two additional issues in March, April, August, September, October and November, and three additional issues in February) by Fairchild Fashion Group, 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, President; John W. Bellando, Chief Operating Officer & Chief Financial Officer; Jill Bright, Executive Vice President-Human Resources. 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. 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 reprints of articles, please contact Scoop ReprintSource at 800-767-3263 or via e-mail at sales@scoopreprintsource.com. Visit us online at www.wwd.com. To subscribe to other Fairchild Fashion Group 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.

Versace’s new women’s fragrance, Vanitas, is due to be introduced in the U.S. market as early as next January. The launch date was incorrect in an article that appeared on page 6, Friday.

They Are Wearing: London

IT TAKES LOULOUJULY 22, 1976

Puma Lays Out Five-Year Plan

Loulou de la Falaise in 1976.

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WWD.COM3WWD, WEDNESDAY, OCTOBER 27, 2010

CONSIDERING THE CONNOTATIONS OF THE TERM “DIVA,” THERE ARE A LOT of preconceived notions that come with meeting one of the opera world’s most promising rising stars. Yet Maija Kovalevska seems to effortlessly dispel them. Yes, the 31-year-old soprano is more than 15 minutes late to her interview — but that’s just a product of the labyrinthine floor plan and spotty cell service that characterize the Metropolitan Opera House.

When she arrives, Kovalevska is warm, candid and undemanding, barely sipping from the plastic cup of water in front of her. And there are no signs of the cold from which she was suffering the previous evening during a performance of “La Bohème.”

“I was just considering [whether] to announce it or not,” she says when asked whether she thought about taking the night off (a woman made an announcement that she was feeling ill right before the curtain went up). “It was just a normal, simple cold, sore throat and congestion, that’s it. [By] the third act it was much better.”

Such un-divalike behavior is clearly one of the ingredients in Kovalevska’s success: she made her Met debut when she was 27 as Mimi in a 2006 production of “La Bohème,” reprised her turn in 2008 and is now tackling Giacomo Puccini’s sweet, dying protagonist in a series of performances this calendar year, followed by additional dates in January and February (the next performance is Thursday).

“Mimi is a very simple kind of character and she’s so sick and she’s going to die and she knows it from the very beginning.…I think if you compare this opera to other operas, it’s so simple and natural. The music is written so naturally that you really believe this person is dying,” says Kovalevska, her heavily lined eyes widening, hands gesturing constantly as she discusses the Franco Zeffirelli production. “For me, the most important moment is the third act when she sings farewell in the snow.…I think Puccini wrote it so perfectly and now I feel I can more deeply go into this — it’s so emotional, heartfelt and heartbreaking.”

Kovalevska’s passion for the part is certainly evident to all, according to Peter Gelb, the Met’s general manager.

“Our audiences respond enthusiastically to Maija’s sympathetic portrayal of Mimi because onstage, she is both vulnerable and passionate, with just the right voice for the role,” says Gelb. “She represents a new generation of singers who don’t need to be reminded that opera is about acting, as well as singing.”

Perhaps that’s because growing up in Riga, Latvia, she dreamed of becoming an actress, a skill she has continued to channel in her current work. The eldest of three children of an electrician father, she was surrounded by music from a young age: her father played the piano and accordion recreationally and had his daughter listening to his favorite albums from Led Zeppelin, Deep Purple and The Rolling Stones; her mother took her children to the opera beginning when Kovalevska was seven.

“Every time for me it was like going to church, something special. I was there just sitting with an open mouth,” recalls the soprano, whose first memory is of “Carmen.” “And then I couldn’t sleep at night because it was so powerful.”

Once she was 17 — unlike other art forms, opera requires an older start age because of voice development — Kovalevska entered the Latvian Academy of Music in Riga, where she embarked on an eight-year study program. She made her stage debut at 23 as Donna Elvira in “Don Giovanni” at the National Latvian Opera.

After graduating, she won the prestigious Placido Domingo 2006 Operalia World Opera Competition and has since performed Liu in “Turandot” at La Scala and Teresa in “Benvenuto Cellini” at the Salzburg Festival. In the next eight months alone, her blossoming career will take her to Dresden, Munich, Vienna, Milan and back to New York.

But Kovalevska is careful to avoid any possibility of overdoing it, following the advice of legendary soprano Mirella Freni, who had a 50-year career and with whom she has been studying since 2003.

“There are several roles which I might never do which are for a different type of voice. Of course, there have been prima donnas like Maria Callas who sang everything, but they had like 10, 12 years of career,” she explains. “Mirella Freni, she had a long, intelligent, clever career and that was what brought her success: slowly, step by step, but better like this than to burn. I would love to [have that] — [though] I’m not saying like 50 years.”

— Vanessa Lawrence

NOTA BENE

By Miles Socha

MORE THAN 200,000 PEOPLE ARE EX-pected to take in an exhibition devoted to Chanel at the Museum of Contemporary Art in Shanghai — the five-year-old institution’s first fashion-related showcase.

“Culture Chanel” is set to run Jan. 15 to March 14 and chart the French house’s histo-ry, along with its literary and artistic inspira-tions, via some 400 items, including clothing, artworks, manuscripts and films.

Organized with the support of Chanel, the exhibition is to be curated by Jean-Louis Froment, a French art director and critic. It follows a showing of Chanel’s Métiers d’Art luxury ready-to-wear in the futuristic

Chinese city in December, in tandem with the opening of a flagship at the Peninsula Hotel on The Bund.

While not chronological, the showcase spans Gabrielle Chanel’s rapport with art-ists including Jean Cocteau, Pablo Picasso and Igor Stravinsky — through to the Karl Lagerfeld era.

Chanel opened its first fashion boutique in China in 1999, and now counts three in Shanghai, two in Beijing and one in Hangzhou. Another is slated to open at the TaiKoo Hui mall in Guangzhou next year.

The brand also boasts 85 points of sale in China for its fragrance and beauty opera-tions, and three boutiques for watches and fine jewelry.

China Exhibit to Highlight Chanel Legacy

PARIS — LVMH Moët Hennessy Louis Vuitton now holds 17.1 percent of the share capital of Hermès International.

The French luxury group said Tuesday it acquired the 3 million shares it had pre-viously described as deriva-tive instruments when it re-vealed its 14.2 percent stake in Hermès last Saturday. As

of Monday, LVMH holds just over 18 million shares.

The Hermès family, vow-ing to maintain control in the long term, said its mem-bers hold almost 75 percent of shares, as reported.

LVMH is expected to dis-close further information about its surprise invest-ment in the maker of Birkin and Kelly bags to the French

market authorities as early as today.

Shares in Hermès fell 11.8 percent Tuesday to close at 179 euros, or $250.85 at cur-rent exchange rates, on the Paris Bourse after spiking 15.1 percent on Monday. Shares in LVMH were down 3.2 percent to 112.35 euros, or $157.45.

— M.S., with contributions from Sophia Rothschild

LVMH Boosts Hermès Stake to 17.1%

By Vicki M. Young

SHARES OF COACH INC. ROSE ALMOST 12 percent Tuesday after its first-quarter profits increased 34.1 percent on a sales gain of 19.7 percent, led by a spike in shipments to U.S. department stores and overseas.

The company is moving ahead with ambi-tious plans for China and is also beginning to reap some success from its men’s business, which is expected to account for a greater share of overseas volume, Lew Frankfort, chair-man and chief executive officer, told WWD.

For the three months, income was $188.9 million, or 63 cents a diluted share, comfort-ably above the 55 cents expected by analysts, on average, and the $140.8 million, or 44 cents, tallied in last year’s quarter.

Sales rose to $911.7 million from $761.4 mil-lion. The quarter was boosted by a 27 percent jump to $136 million for shipments to U.S. de-partment stores and the international wholesale channel. Direct-to-consumer sales increased 19 percent to $775 million, while North American comparable-store sales rose 8.5 percent.

Frankfort said on a morning conference call, “All of our business units posted strong performances, despite muted consumer spending, as the merchandising, marketing and pricing strategies we put into place in fiscal year 2010 continued to drive growth.”

The ceo said the company was “pleased with the current trends we’re experiencing in the business and are well positioned for the upcoming holiday season.”

Frankfort said China was Coach’s fastest growing business.

He told WWD the New York-based firm, which opened eight stores in the quarter in Mainland China, will open seven in the second quarter. The company plans to open a total of 25 on the mainland during fiscal year 2011. Coach currently operates 49 Mainland China locations.

The company plans to open a total of

seven stores in Japan for the year, and has already opened its first men’s factory store there. Included in the seven are two full-price men’s freestanding stores.

He said the company’s men’s initiative “is taking hold nicely, and we are enjoying strong successes wherever we are offering a comprehensive men’s assortment. In our Japan flagship location, men’s is now 30 per-cent of the total sales for that store.”

He said men’s now represents 3 percent to 4 percent of Coach’s global sales. He said

the men’s business has the potential to be 20 percent to 25 percent of the total Asian and European businesses, while in the U.S. it has the potential to be as much as 15 percent of total domestic sales.

Even though prices overall are higher in China and Japan than in the U.S. to reflect duty and other administrative costs, the fe-male consumer, particularly in China, is prepared to “spend a week’s salary” on a handbag, and prefers the brand’s “leather of-ferings,” Frankfort said.

The company did not provide second-quarter guidance. Shares of Coach, which reached a 52-week high of $50.75 in intraday trading, closed Tuesday at $49.78, up $5.30 or 11.9 percent.

Coach Profits Climb 34.1% in 1st Qtr.

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Coach’s men’s-only Manhattan store.

“Culture Chanel” will run Jan. 15 to March 14.

Maija Kovalevska

4 WWD, WEDNESDAY, OCTOBER 27, 2010

THE SLANE CHANCE “I HAD TO KILL ONE OF THE SISTERS.”

So spoke Alexander Vreeland, recently installed president and chief operating officer of the fine jewelry firm formerly known as Slane & Slane. The name of the company founded in 1997 by sisters Heath and Landon Slane has now been tightened to Slane. Though Vreeland was obviously joking about the reason for the change, he couldn’t be more serious about the company’s rebranding efforts.

He and Landon Slane hosted a press preview on Tuesday to introduce the changes. “[The name] was a mouthful,” explained Slane, who, with the Los Angeles-based Heath, remains co-chief executive officer and designer. “It’s a way of lightening and streamlining things.” She added that the abbreviated moniker is also a little less tricky on the tongue, and thus better suited to global expansion.

There are plenty of other streamlining measures undertaken by Vreeland, a childhood friend of Slane’s husband who also attends the same yoga studio as her. He hired an outside public relations firm, Linda Gaunt Communications (Gaunt was a former colleague at Giorgio Armani); cut down on what he calls “onesie” business orders (“We want to get away from one piece of this, one piece of that, to having larger runs”), and reevaluated the entire flow of business from orders to deliveries.

“We went through every single part of the operation — marketing, production, financial systems — and have gotten much more focused on who we are,” said Vreeland, adding that a redesign of the Web site will make its debut by yearend; they’re also adding a more efficient e-commerce component. Already, the homepage boasts a heart-shaped logo formed from two S’s, and a fresh marketing campaign, which revolves around an illustration by artist Kareem Iliya. It features a shadowy figure, drawn from arty watercolors, wearing a

necklace from the upcoming Twin Links collection. “Our jewelry has such a romance to it,” noted Slane. “We felt this image really captured the emotional connection behind it.”

The product range has gotten a similar once-over by Vreeland, although Slane is quick to emphasize that this is an evolution, not an overhaul, of offerings. Twin Links, for instance, skews more sleek and modern than before: thin chain links delicately looped into bracelets and necklaces.

Elsewhere, the sisters have introduced colored enamel work and wood. “I think that before, the company was a little too reactive to what was selling — ‘Let’s do more of that’ — and the pieces were too busy,” said Vreeland. “We’re focused on being clear about what this brand stands for: something we believe is really beautiful and has a special lightness and craftsmanship.”

Even the label’s signature Napoleonic bee motif, which comes inset into an octagon coin setting, is being reworked to appeal to a younger customer. “We’ve taken the bee off the coin and made it a little bigger,” said Slane. “It’s still our heritage, but interpreted in a different way. It looks sweet.

“Heath and I went through the wringer and got beaten up the last couple of years,” she acknowledged of the company’s travails through the recession. “Sometimes you’re working so closely on everything, you can’t see the forest for the trees. It takes [a pair of] fresh eyes like Alexander to come in and bring a new outlook.”

— Venessa Lau

All That GlittersShifts happen — especially when it comes to two New York-based jewelry firms (one rebranding; the other,

opening in London) and an accessories house entering the bridal market.

Kareem Iliya’s illustration for Slane. Below: an enamel bracelet.

WWD.COM5WWD, WEDNESDAY, OCTOBER 27, 2010

NEXT STOP: LONDONHERE’S A STATEMENT NOT OFTEN HEARD IN the luxury business: The recession was good to us. But talk to Roberto Faraone Mennella and Amedeo Scognamiglio of the jewelry firm Faraone Mennella, and that’s exactly what they’ll tell you.

“The past two years have been such a revolutionary time in the market,” says Scognamiglio. “For us, it’s been an opportunity to grow and focus on what we really want to do. It gave us a really strong direction and triggered our strategy to expand overseas.” And the facts speak for themselves. Since 2008, sales have increased 40 percent, the two have launched the secondary line L’una by R.F.M.A.S., expanded into Dubai and Abu Dhabi and, on Nov. 1, will open their very first flagship in a surprising locale for a brand born in New York and known for its very Italian roots: London.

“Europe, probably more so than the United States, is a place where you need to have your own boutique,” Scognamiglio explains. “Distribution is not channeled like in the States with department stores. And London is a great European capital for a store. It’s a hub for the Eastern markets.”

Which isn’t to say the two didn’t look for real estate in their home base of New York — they almost closed on two different locations on Madison Avenue — but once they decided to look elsewhere, London seemed the perfect fit. “We have great success in the Middle East,” reasons Mennella. “[London] is where [the people from there] vacation and study, as well as all the European jet set.”

The 1,000-square-foot shop, designed by architect Ante Vrban, will be modeled after the firm’s New York showroom — “very 1950 couture salon,” says Mennella. Walls are covered in gray silk, a vintage Italian Venini chandelier dominates the space and vitrines, mostly recessed into the walls, are “seamless,” with no visible locks. Chic couches and carpeting complete the living-room feel. And just as

the tables and lamps in their Manhattan space were designed by Mennella himself, the wrought-iron furnishings in the London outpost will be, too. But then, it’s a design ethos that stems from Mennella’s family estate in the small town of Torre del Greco, just south of Naples. “I am ready for this repetition wherever I go,” Scognamiglio sighs in jest. He adds that there’s a VIP room in the back for private viewings and, in the spring, the two will launch a collection of leather goods, made in Tuscany, solely at this London outpost.

Come April, the designers plan to open a store in Capri, too. “That will really be a coming home,” says Scognamiglio. “In many ways, Capri is the DNA of the brand, not only because we grew up

there and we still vacation there with our families, but because it embodies everything we feel in luxury. It’s one of the biggest inspirations we have.” And there are more stores in the pipeline: Paris, “somewhere in the Middle East” and in New York, not one but two. “We want a L’una store downtown,” notes Scognamiglio. “Faraone, meanwhile, is more niche. It’s destined to be uptown.”

— V.L.

JUDITH LEIBER SAYS ‘I DO’AFTER NEARLY 50 YEARS IN LOVE WITH LUXURY, JUDITH LEIBER IS ready to walk down the aisle. Leiber, the house synonymous with the crystal minaudière, is introducing a selection of bridal handbags for the spring wedding season as part of company president Mary Gleason’s expansion strategy, which also includes costume jewelry and a fragrance launch planned for January. “I’ve been the president of Judith Leiber for two-and-a-half years, and the first order was to make sure our core business was secure,” says Gleason. “Next, we represent special occasion, high evening and red carpet. How do we expand the footprint of the brand?” Key to that was reaching a younger audience, for whom bridal would be a point of entry. The bridal collection features a range of minaudières, including the playful three-tier wedding cake shape replete with crystals and pearls, shown here, and fabric bags, all lined in blue silk and often with jewelled closures. The pieces are priced between $995 and $7,000, and the line will be launched in February in Judith Leiber stores and specialty stores, as well as on e-commerce sites.

— Jessica Iredale

Amedeo Scognamiglio and Roberto Faraone Mennella

The new London store under construction, with still-empty jewelry cases.

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A bowed bag and the wedding-cake minaudière.

The floral and gift company 1-800-Flowers likes to stay ahead of the curve.

The firm was one of the first businesses to embrace the Internet in 1992 and the first merchant to transact on AOL in 1994. Last year, it became the first business to allow customers to complete a transaction with-out leaving their Facebook page and created the first Facebook store. The company started tak-ing part in “like” on Facebook, and the first day got 10,000 “likes,” said Kevin Ranford, vice president of online marketing, mobile and social media. This year, 1-800-Flowers has put an increased focus on social commerce, including new and emerging channels; social media, mobile and online video; online (search, e-mail, display and retargeting); broadcast (TV and radio, pub-lic relations, contests and charities); celebrity

partnerships, including social commerce, and the catalogue.

Ranford said the company’s main objectives are to be more transactional to drive more trans-actions; to create places where customers can collaborate on-line, get advice from trusted indi-viduals, find recommendations, reviews and wish lists, and make informed decisions. The com-pany is integrating Facebook’s “like” and birthday reminders functionality into a multichannel shopping experience.

According to Ranford, 1-800-Flowers launched Facebook and Twitter pro-grams more than two years ago. The company has a strong network of bloggers, and rating and reviews are integrated into the Web shopping experience.

“A whole new wave of mobile marketing will happen next year,” Ranford predicted. “Location-based targeting is superinteresting.”

— Lisa Lockwood

WWD, WEDNESDAY, OCTOBER 27, 20106

The bricks seem to finally be accepting of the clicks. It’s an evolu-tion made easier because e-commerce has become a source of dou-ble-digit growth in a retail world caught in the doldrums.

Saksfifthavenue.com is Saks Inc.’s second-largest store, and al-though it lags the revenue of the chain’s Fifth Avenue flagship, the luxury retailer’s e-commerce unit is generally twice as profitable as the brick-and-mortar business, Denise Incandela, president of Saks Direct, said during a panel discussion.

“When we first launched this business in 2000, we were argu-ing, ‘We’re not cannibalizing brick-and-mortar sales, it’s additive,’” Incandela said. “Now I have a very different point of view, because our business is growing 20, 30 percent a year and the brick-and-mortar is growing in the single digits. My view now is, ‘Yes, we are cannibalizing the brick-and-mortar sales.’”

The emphasis has shifted to making sure e-commerce continues to grow and takes a disproportionate piece of total market share as it does so. Just as her store counterparts look to increase sales per square foot, Incandela said she’s looking at “dollars per square inch.”

Saks, and the rest of the retail industry, is also trying to figure out how to push social media beyond brand-building.

“That’s the big question,” Incandela said. “How do you monetize it? It’s not driving a significant part of our sales yet. Time will show us how that evolves.”

Macy’s Inc., with more than 600,000 Facebook fans, is also using social media primarily for relationship building.

“We don’t necessarily use that social space to talk about our one-day sales,” said Martine Reardon, executive vice president of marketing and advertising at Macy’s, who joined Incandela in a panel discussion moderated by Kate Terry, founder of Internet consultancy Dash.

Reardon oversees a broad marketing portfolio, from TV and print ads to parades and fireworks displays. Digital garnered about 10 per-cent of Macy’s media spending this year — compared with zero three years ago — and the percentage is expected to double in another couple years. When it comes to digital media, Macy’s knows what it’s getting.

“Unfortunately for the digital space, we hold them to a much high-er standard, simply because the metrics are there,” Reardon said. “You can really follow what people are doing in the online space.”

— Evan Clark

SAKS AND MACY’S SHARE STRATEGIES

Denise Incandela

Martine Reardon

Online consumers are biting again, but it still takes a steady hand and the right gear to reel them in.

A year ago, the average online shopper “touched” some sort of marketing five times before making a purchase, according to Range Online Media, which has worked with Neiman Marcus, Juicy Couture, Nike and other retailers. That rate has fallen to three times.

“That’s great for you,” said Vic Drabicky, director of international and vertical market development at Range. “Your marketing got about 40 percent more effective just because the consumer’s willing to spend a little bit more freely.”

However, taking advantage of that change re-quires a sharp focus.

“You get all of these people that talk about buzz…they start running in all these different directions and you end up with this jumbled

mess that you now call digital,” Drabicky said. “Just slow down. Build yourself a solid foundation. If you can effectively execute those basics first, it’s going to be significantly easier for you to build a digital business, it’s going to be significantly easier for you to execute on all the new buzz words — the mobile, social, what-ever it might be.”

That means doing things like being proficient with search en-gine marketing and being highly skilled at collecting data. In

short, good data means informed decisions and a better business in good and bad economies.

“Saying you don’t know what the economy’s going to do can’t be the driver of your business,” Drabicky said. “Instead, build a real solid foun-dation for all of your marketing. That way, if the economy tanks, you’ll know how to adjust and where to adjust.”

— E.C.

An online store is not just a store, according to Lisa Gavales, execu-tive vice president and chief mar-keting officer of Express Inc.

“Don’t squeeze every penny out of your Web site,” she said. “The purpose of an e-commerce site is not only to sell.”

The Express online store is only two years old, but growing rapidly. In its first year, it did $92 million in sales. Now it’s trending up over 50 percent more this year, she said.

Not only that, it heavily influences sales chainwide. Eighty-six percent of visitors to the online site said they planned to visit a physical Express store after browsing online. All Web stores should be funded accordingly, she said.

So, hypothetically, if a Web site accounts for

10 percent of sales but 42.5 per-cent of traffic, then the online store should receive 42.5 percent of the budget.

“More people experience your brand online than in the store,” she said.

As for social media, it’s not a popularity contest, but rather a way to interact with customers. “My cus-tomers don’t come to the site or the store every day, but they do come to Facebook every day,” Gavales said.

Express is investing in mobile with a smart-phone-friendly site and 2-D barcode promotions for holiday, since by yearend there will be more than one billion devices accessing the Web. “I expect this year — the holidays — to be the un-lock,” she said.

— C.T.C.

Jon Kubo, who oversees e-com-merce at The Wet Seal Inc., where he is chief information officer, is a social sort. His efforts to engage customers are taking off as other companies are trying to figure out how to integrate their “friends” and their cash registers.

Kubo said any effort to marry social media with business starts with a simple question.

“What am I going to do to re-ally allow [consumers] to partici-pate in my brand? If you can an-swer that question, then you can structure a completely great social media pro-gram,” Kubo said. “The second phase is then, ‘I have to figure out the engagement.’”

The good news is that big-time engagement doesn’t need to cost big bucks.

Witness Wet Seal’s model search, which this year generated 300,000 YouTube views, 10 mil-

lion Facebook fan posts, 100,000 new Facebook fans and 100,000 store visits.

Kubo described the model search as “an ‘American Idol’ kind of campaign.” The company ran video teasers from last year’s win-ners on its Facebook page and asked applicants to fill out an on-line form and then bring a photo to a Wet Seal store. One-hundred ap-plicants were sent Flip video cam-eras, which they used to take videos of themselves to post on YouTube.

The 100 were then winnowed down to 50 on the basis of YouTube

views. Finally, people voted for their favorite on Facebook, with every vote generating a post.

“This was run by a very junior manager all by herself, and all the prizes, all the travel were sponsored,” Kubo said. “We spent a ridiculously small amount of money on this.”

— E.C.

FLOWER POWER

EXPRESS ON FAST TRACK

WET SEAL’S ENGAGEMENT

RANGE ONLINE’S FOCUS

Building a Better Mousetrap Online

VENDA TALKS OF CHANGE“[Technology] is moving really, really fast,” said Jeffrey Max, chief executive officer of e-commerce platform provider Venda Inc. “The rate of change is just terrific.”

Mobile today is not what it was six months ago. E-commerce is moving to multiple platforms. Video is powerful and inexpensive. Regulation is constantly changing. Search is becoming more social now that Facebook has teamed with Bing.

“What does it matter if someone ‘likes’ your stuff?” he asked. “It’s going to start to matter a lot because if you search for some-thing on Bing, what you’re going to start to see is the ‘likes’ of your friends showing up on the perimeters.”

The challenge for many online retailers and brands is site man-agement. They need the “ability to change the online experience easily, quickly, inexpensively,” he said.

As for outsourcing, it depends on whether a brand wants to be in the technology business, he said.

“For many of you, the focus needs to be on execution, content and relevance, projecting your brand and what you mean to your clients,” he said, advising that companies outsource their technical needs. “Every six months, we will see new and better emerging technologies.”

— Cate T. Corcoran

Jeffrey Max

Lisa Gavales

Kevin Ranford

Jon Kubo

Vic Drabicky

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Catalogues can now have several lives, thanks to Pictela.

“New technologies coming to bear over the last 12 months and the next 12 months are allowing our content to go everywhere,” said Greg Rogers, chief executive officer and co-founder of Pictela, a content management platform that trans-forms high-definition brand assets into online ads and social media.

Some $15 billion is spent as an industry to produce, print and mail catalogues, said Rogers. He believes there are new technologies to be leveraged by that in-vestment. He feels that beyond sending a catalogue to a customer’s mailbox, they can be posted on the Web and used in advertising, social media, mobile, digital at home, and in TV videos. Pictela partners with media brands such as About.com, Condé Nast, Glam Media, Pandora, MTV Networks, AOL, Yahoo,

Shopzilla and Time Inc. to get brand images on these sites. Clients such as Victoria’s Secret, Nike and Macy’s use Pictela to distribute their creative im-ages across hundreds of Web sites.

He feels brands should deliver cat-alogues to places where the consumer can see them. He said one of his fash-ion clients recently took a three-prong strategy whereby it served the cata-logue into ad units, placed it on their corporate Facebook page and notified fashion bloggers that their new shar-able catalogue was available.

He found evidence the user expe-rience online looks similar to offline catalogue be-havior. The average user looked through 8.4 product pages for 42 seconds. And 15 percent of the users looked through all 41 pages for five minutes, accord-ing to Rogers. The catalogue was delivered into 30 million ad impressions and shared 1,400 times.

— L.L.

If you’re having conversations with your boss about increas-ing your e-commerce budget and building online strategies, the numbers will back you up.

Michael McNamara, vice presi-dent, SpendingPulse, MasterCard, said the market share shift to-ward online is continuing to grow. “There’s a lot of shifting to the on-line channel and that’s how budgets should be allocated,” he said. He noted e-commerce has shown “im-pressive growth in the last year.”

Although coming off a small-er base, e-commerce is growing at a signifi-cantly higher percentage than overall retail. In September, total e-commerce rose 7.8 percent; ap-parel e-commerce was up 13.4 percent; children’s e-commerce gained 14.4 percent, women’s apparel e-commerce rose only 1 percent, and jewelry was off 5.9 percent, versus a year ago.

Looking at the pace of online business this year, he noted that in the first quarter, there were on-line peaks in terms of share. He attributed that

to bad weather (more people were indoors) and the fact that most peo-ple are at work and not on vacation. The peak occurred in January when e-commerce reached 18.6 percent of sales. He explained these are big movements that reflect a lot of money shifting to the online channel.

He pointed out that in women’s apparel, e-commerce has grown from a 9 percent share in 2007 to 13.8 percent of total sales year-to-date in 2010, and the year’s not over yet. But, they’re not seeing the same progress in jewelry as they’re seeing in apparel categories. Most jewelry

is done during the holiday season, with the big-gest days for jewelry sales from Dec. 21 to Dec. 24.

He noted that online holiday sales will ramp up on Nov. 9 with 14 of the top 50 online spending days in the last 22 days of the month. The top spending online day is expected to be Dec. 14., and the big-gest day for retail overall is Nov. 26, which is fore-cast to do $19 billion in sales. The top 10-day total is estimated to be a $151 billion spending opportunity.

— L.L.

Bradford Matson, chief marketing officer of Bluefly Inc., an online shopping site featuring designer apparel at 20 to 40 percent off retail prices, said integrating of-fline and online advertising is an effective way to draw consumers.

Since Matson joined Bluefly in 2005, consumer awareness of the site has gone from 11 percent to more than 50 percent, he said. The online site has been success-ful with its “Closet Confession” TV campaign, in which celebrities show off their closets. The two to three minute vid-eos run on Bravo and feature people such as figure skater Johnny Weir; Bethenny Frankel, the reality TV personality, and Nicky Hilton, the socialite and designer. Bluefly’s traffic has spiked 20 percent each week since the spots launched on Sept. 6.

“We focus on television because we can mea-sure the results of our performance,” Matson

said. “When we advertise, we see very clear changes to patterns on our site. We’ve gotten tremendous response to them from bloggers.”

The marketing strategy consists of three components: Online (search, comparison engines, affiliates, e-mail and banners), offline (television) and social (Facebook, Flypaper, Twitter and Closet Confessions). Matson said Bluefly tries to allocate its spend to maximize sales, engage the right au-dience to advance the brand identity while delivering an ad-sales ratio that works with the business model and

has a high degree of predictability and probability.At Bluefly, marketing programs comprise 65 per-

cent of the spend; social media is 5 percent, and offline is 30 percent. Matson said his philosophy for those looking to test the social media waters: “Jump into it, learn about it, grab share, get into the game, and then we’ll learn how to manage the metrics over time.”

— L.L.

“We’re in the middle of a technical revolution and it’s affecting everything we do,” said Tom Jarrold, chief marketing officer for A|X Armani Exchange.

The adoption curve has been much faster for the Web than for the personal computer or television. In five years, more people will access the Web via a mobile device than through a personal computer, he said, citing research from Morgan Stanley.

A|X has targeted its young, urban, wired customer with a barrage of con-tent, from advertising to its own entertainment to word of mouth. Its A|X music channel on Pandora generates more dollars in sales than it costs. The A|X blog, Styletraxx, indexes high on celebrity searches, has about one million readers per year and has generated more than $200,000 in sales, more than paying for itself. The A|X Stylepad for the iPad, a digital flip book that lets users create and share ads, has generated deep engagement, with users spending almost four minutes per visit on average. Media buys, conversely, reach mass numbers of people. An iPad contest resulted in 2,000 responses in the first minute. The brand has put more than 150 videos up on its Web site, and they have been viewed 2.6 million times.

“Do more,” he said. “It doesn’t have to be complicated.” — C.T.C.

A|X ARMANI EXCHANGE’S TARGETED APPROACH

BLUEFLY’S MEDIA MIX

Executives at WWD’s Digital Media Forum served up media strategies to grow brands’ online presence — from Facebook and Twitter to e-commerce, mobile technology and videos. MEMO PAD

Tom Jarrold

Bradford Matson

Michael McNamara

Greg Rogers

MASTERCARD’S WEB VIEW

PICTELA’S CATALOGUE PLANS

A DIGITAL SHAKEUP: After months of waiting, Condé Nast said on Tuesday afternoon that publishers will finally get full control of their Web sites, while Condé Nast Digital will become a shell of what it once was.

Ad sales and marketing efforts for Condé’s sites will be transferred from Condé Nast Digital to the individual publishers in the coming months. Publishers have been craving this moment for a while. “We have been clamoring to get more control of the sites,” said one.

A big winner from Tuesday’s announcement appears to be chief marketing director Lou Cona. The move puts Condé Nast Digital’s remaining sales and marketing operations under the umbrella of the Condé Nast Media Group, which Cona heads. It’ll be up to Cona’s group to sell across digital brands. Drew Schutte, who had been chief revenue officer at Condé Nast Digital, will now serve as a point man between individual brand publishers and the media group as chief integration officer, and will report to Cona. Internet sales group publisher Josh Stinchcomb will assume the title of vice president of digital sales for Condé Nast and also report to Cona.

Sarah Chubb, the president of Condé Nast Digital, loses much of her power and will now oversee content and operations for sites like brides.com, Epicurious and Reddit. Condé Nast Digital chief operating officer Debi Chirichella will oversee financial operations for all the company’s Web sites and digital offerings, and, like Chubb, will report to company president Bob Sauerberg. (In her role as chief operating officer of Fairchild Fashion Group, Chirichella also reports to chief executive officer Gina Sanders.)

The writing on the wall about Condé Nast Digital’s future became even clearer this week when Style.com was transferred out of that division and joined the Fairchild Fashion Group. Also, on Monday, Condé Nast said all of its future tablet devices will be developed by Adobe, and not by Condé Nast Digital, which had built out apps for GQ, Glamour and Vanity Fair.

Condé Nast chief executive officer Charles Townsend said in an interview the purpose behind the realignment is to find more money, particularly through potential digital revenues. He said that when digital accounted for only 1 percent of revenue at Condé Nast, digital likewise had about a 1 percent “relative” importance to the company. Now that digital revenue represents close to 10 percent of total revenue, he said it’s becoming his primary focus.

“Let me get this piece out of the way,” he said. “This is not a restructuring or a head count reduction or cost saving. That’s what we went through in 2009 and that was a pure restructuring. This is really driven by the marketplace and the practicality of the marketplace. This is bringing the breadth of our assets together in one seamless way.”

— John Koblin and Matthew Lynch

D.C. GOES WEST: The 24th Annual Women’s Conference in Long Beach, Calif., drew 14,000 attendees who lined up beginning at 6 a.m. to hear the morning’s trio of political power speakers: the event’s host, California First Lady Maria Shriver (in a dark purple shift, the same color she wore last year), second lady of the United States Jill Biden and, the cause for the early check-in and tightened security, First Lady Michelle Obama. The long list of introductory speakers, including Al Roker, Matt Lauer, Brian Phillips, Suze Orman, Nike co-founder and chairman Phil Knight, New York Times columnist Nicholas Kristof and Starbucks chief Howard Schultz, were merely filling time before the Ladies took the stage. Shriver gave another heartfelt speech — though she wouldn’t say what she plans to do when she and Gov. Arnold Schwarzenegger leave Sacramento come January — which was in many ways a farewell to her first lady post.

“I thought my work would be over by the time I had to leave this job, but it’s still evolving,” she said. “But I was right to move to California; people here are dreamers, creative and daring. I feel at home here and I want to thank the people for understanding that being a first lady representing a different political party from the governor had its complications. Thank you for accompanying me on this journey, it has been a hell of a ride.”

For Obama, who spoke at the conference when she was still a candidate’s wife, the work is just beginning; she spoke of supporting military wives and families. Luckily she wasn’t at the Robert Redford Q&A, where the outspoken actor told Linda Ellerbee, “The leadership in this country is getting dumber and dumber.” The political power train continued after lunch, when Diane Sawyer moderated a conversation with Sandra Day O’Connor and Ruth Bader Ginsburg, who kept things light. “My husband said the reason he became such a good cook was because of my cooking,” said the latter, while the former said, “My husband, who I met when I was 18, was the only man who seemed to care that I had a brain.” — Marcy Medina

GIRL ON FILM: The planned film about Isabella Blow is quietly taking shape: The Swedish filmmaker Anders Palm will be producing the film, and has recently optioned Lauren Goldstein Crowe’s upcoming book, “Isabella Blow: A Life in Fashion” (Thomas Dunne Books), and hired the author as a consultant. A screenplay has already been co-written by Max Newsom and Nicola Brighton, and the book will be used as background, according to Goldstein Crowe. Philip Treacy and John Galliano have both been linked to the project, although their exact roles have not yet been confirmed. Goldstein Crowe’s book will be released in the U.S. on Nov. 9, as will a separate book about the stylist, who committed suicide in 2007, penned by Blow’s widower, Detmar Blow, and Tom Sykes. — Samantha Conti

WWD.COMWWD, WEDNESDAY, OCTOBER 27, 2010 8

YOSSI SHACHNOVITZ, A LONGTIME EMPLOY-ee at Elie Tahari Ltd. and a close confidante of the designer, died of cancer. He was 55.

A native of Vilna, Lithuania, Shachnovitz emi-grated to Israel with his family at age nine and came to the U.S. in 1986. He started working for Tahari shortly after arriving.

“One day Yossi called me after reading an ar-ticle about me in a local newspaper,” Elie Tahari recalled. “He said he wanted to work for me. It was a Saturday, and I asked him to come up and talk. I was immediately impressed with his intel-

ligence and integrity. He started in the company as a production assistant, and rose to become the president of production for the entire business.”

In the early Nineties, Shachnovitz also had a stint as vice president of manufacturing for Ellen Tracy. He eventually returned to Tahari, where he oversaw the production for women’s, men’s and accessories, and internally also served as a mentor to his co-workers.

“We were together for almost 30 years and he was like a member of my family,” Tahari said. “He was in-credibly generous with his knowledge and had such a giving spirit. He was such a special person and saw the true character and individuality in all of us.”

Shachnovitz is survived by his wife, Sura, and children Sivan, Itzhak, Barak and Batsheva. A me-morial service was held Saturday in Fair Lawn, N.J.

NEW YORK-BASED INTER PARFUMS INC. recorded sales of $120.9 million during the third quarter ended Sept. 30, an increase of 2.9 percent versus $117.5 million the same period a year ago.

At constant exchange rates, quarterly rev-enues were up 12.9 percent.

The fragrance producer’s product sales in Europe — its Inter Parfums SA subsidiary based in Paris — accounted for the vast majority of revenues: $109.2 million, or 89.3 percent of the quarterly total. U.S. sales were down 13.3 per-cent to $11.7 million from $13.5 million.

Year-to-date sales at Inter Parfums Inc. rose 17.3 percent, reaching $348 million, compared with $296.6 million in the first nine months of last year. At constant exchange, sales were up 22.6 percent.

Meanwhile, third-quarter sales at Inter Parfums SA increased 16.5 percent to 84.8 million euros, or $108 million at average exchange, driven in part by sustained organic growth from its main fra-

grance lines, scent launches and the introduction of Burberry Beauty color cosmetics. At constant exchange rates, revenues increased 16.6 percent.

For the first nine months of this year, sales at Inter Parfums SA reached 235.5 million euros, or $310.1 million, up 21.4 percent. At constant ex-change, revenues rose 22.4 percent.

Full-year guidance for 2010 at both Inter Parfums Inc. and Inter Parfums SA was raised.

Due to recent commercial trends and the strength of the fragrance and cosmetics market, Inter Parfums SA said its annual sales should reach between 290 million euros and 295 million euros, or $405.2 million to $412.2 million at cur-rent exchange, representing year-on-year growth in the 12 percent to 14 percent range.

Inter Parfums Inc. said it expects net sales for 2010 to reach $455 million and profits attributable to the firm to reach $25.5 million, or 84 cents a diluted share.

— Matthew W. Evans and Jennifer Weil

By Arnold J. Karr

THE CONFERENCE BOARD’S CONSUMER CONFIDENCE INDEX turned up marginally in October — to 50.2 from 48.6 in September — but difficult conditions in the job market have left it “hovering at historically low levels.”

The Present Situation Index grew to 23.9 from 23.3 last month, while the Expectations Index improved a bit more rapidly to 67.8 from 65.5. The overall number for the month was the third lowest of the year, above only the 46.4 registered for February and last month’s disappointing showing.

Accordingly, 46.1 percent of the 5,000 U.S. households responding to the survey rated jobs as “hard to get,” up from 45.8 in September, while those characterizing them as “plentiful” dropped to 3.5 per-cent from 3.8 percent.

However, 16 percent expect an improvement in business condi-tions over the next six months, up from 15 percent last month, and those expecting a deterioration in conditions declined to 14.1 per-cent from 16.6 percent a month ago.

The confidence numbers had little effect on the stock mar-ket. Ending the day at 471.60, the S&P Retail Index, like the Dow Jones Industrial Average, gained less than 0.1 percent. Following its strong first-quarter results, Coach Inc. was the biggest gain-er among the issues tracked by WWD, but teen specialty chains continued to excel as speculation about possible buyouts persist-ed. Abercrombie & Fitch Co. was up 4.8 percent to $44.84 while Pacific Sunwear of California Inc. finished even more strongly with a 6.4 percent advance to $6.18.

Vera Bradley Inc., which went public last Thursday at $16, con-tinued its strong early run, closing Tuesday at $28.57, up $1.16, or 4.2 percent.

Saks Inc., the object of Diego Della Valle’s recent affections, saw its shares advance 3.8 percent to $11.34.

• Ashley’s New Owner: New Ashley Stewart, an affiliate of Gordon Brothers’ GB Merchant Partners unit, was selected Monday as the winner of a court-approved auction for the assets of bankrupt Urban Brands’ Ashley Stewart plus-size chain, according to Delaware bank-ruptcy court records. Details of the amount of the winning bid weren’t available, but a contract filed with the court last month said the “stalk-ing horse” bid included a purchase amount equal to $13 million in cash, a $2 million note and assumed liabilities. The court document said the cash and note components are subject to adjustment.

— With contributions from Vicki M. Young

BEAUTY BEAT

OBITUARY

Inter Parfums Sales Up 2.9% Slight Gain in October Confidence

Yossi Shachnovitz, 55

By Alexandra Steigrad and Rachel Brown

POLICE IN LOS ANGELES HAVE SHUTTERED A FACTORY they said had produced substantial quantities of counterfeit True Religion jeans and other high-end apparel.

At the time of the bust Thursday, the facility, described by au-thorities as one of the largest plants dedicated to the production of counterfeit wares to be discovered in Southern California in the last decade, housed about 1,000 completed apparel items, as well as tens of thousands of labels, buttons and hangtags. Estimates placed its size at about 3,500 square feet.

“What is so unique about it is that it is an actual manufactur-ing facility in L.A.,” said True Religion secretary and general counsel Deborah Greaves. “I have to tell you that 99 percent of all counterfeit jeans come from China. It is the first counter-feit jeansmaker in Los Angeles. We have found T-shirt makers before.”

Police confiscated nearly 80,000 pieces of evidence worth rough-ly $1.36 million, according to Lt. Patrick Shields of the Los Angeles Police Department’s Special Enforcement Section, Piracy Unit, who estimated that machinery at the factory, including equipment for silk-screening, heat transfer, sewing and embroidery, was val-ued at around $100,000.

“They are producing it [counterfeits] through a textile apparel company, and we hadn’t seen that before,” said Shields. “I’m sure if they are doing it, there will be others doing it because there is probably money in it.”

Just 10 minutes south of Los Angeles, the “nondescript” facility, located in the 11300 South Block of Almadea Street in Lynwood, Calif., also made counterfeit Lacoste, Affliction, Bebe, Ed Hardy and Nike apparel, according to private investigator Kris Buckner, whose team was hired two to three weeks ago after the LAPD was tipped off about the location.

The undercover investigator made “multiple purchases” before turning the goods into the LAPD’s piracy unit, which then obtained a warrant.

The factory operator, Nicolas Perez, was arrested and charged with trademark infringement by the Los Angeles County district attorney’s office.

Perez has a relative who has been arrested on counterfeit-re-lated charges previously, police said, adding Perez posted his bail, which was set at $25,000, Friday.

According to the L.A.-based denim vendor, last week’s raid is part of its ongoing fight against counterfeiting. In conjunction with California law enforcement, True Religion has seized nearly 30,000 pairs of counterfeit jeans in the past few months.

Counterfeit Apparel Plant Shut Down by L.A. Police

The CTPartners Retail Practice wishes to congratulate

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WWD.COM10 WWD, WEDNESDAY, OCTOBER 27, 2010

Continued from page oneAmerican and European tourists abroad, and also more than Japanese abroad.”

Chinese tourists made 47 million trips abroad last year, according to China’s National Tourism Research Institute. Those able to travel overseas tend to possess some common characteristics — chief among them that they are well-heeled and will-ing to spend top dollar on luxury goods and brand names. The new breed of over-seas Chinese tourists is looking to buy things they can’t get in China, or can get more cheaply elsewhere. Given high luxury goods taxes that continue to be levied in China, most high-end items do cost less in other countries.

The pool of tourists from China who like to spend big now largely consists of the country’s wealthiest elite — a small percentage of the overall population. The latest numbers available show that tourists from Mainland China spent $42 billion abroad in 2009, with more than $17 billion of that spent in Hong Kong, by far the most popular shopping destination for wealthy Chinese tourists.

Sarah Rutson, fashion director at Hong Kong-based Lane Crawford, said Mainland Chinese tourists account for between 20 to 40 percent of its overall store business, the higher percentage gen-erated at its Canton Road and Times Square locations, which tend to be magnets for those on day or weekend tour packages.

She said the latter shoppers tend to zero in on skin care, shoes, jade jewelry and single-diamond stones, whereas more “internation-al” Mainland Chinese tourists fre-quent Lane Crawford’s flagship IFC or Pacific Place locations in search of high-end jewelry and cutting-edge ready-to-wear from the likes of Alexander McQueen, Givenchy, Lanvin, Rick Owens and Céline.

“The majority of Mainland Chinese pay with cash,” Rutson said. “They also buy very quickly — they know what they want and do not mess about.”

Ditto for gifts, whether corporate or personal. Rutson said skin care is a popular gift item among those on package tours, while corporate and international travelers gravitate to jade, exotic-skin accessories, expen-sive crystal and handcrafted Italian jewelry, or watch boxes that range from $6,000 to $10,000 a pop.

Bruno Pavlovsky, president of fashion at Chanel, said Chinese tourists now rank among the brand’s top five nationalities, and their numbers have been growing steadily over the past 18 months, particu-larly in Paris, a top international destination, and other high-profile European capitals.

“They are also starting to travel in Japan, and we are starting to see them in Tokyo,” he said. “They are more and more interested in our products.”

Pavlovsky said Chinese tourists zero in on Chanel’s hottest styles, with younger customers oriented to ac-cessories, and more established ones drawn to rtw. Service requirements are demanding. “When they spend 20,000 euros, they want to be treated with the high-est levels of service,” Pavlovsky said. “We need to organize ourselves to be sure to provide it to all our customers.”

Joshua Schulman, chief executive officer at Jimmy Choo, said the company is see-ing “more and more” Chinese consumers, “both at home in China, but also in gateway cities around the world. In Europe they have a much more important presence than they did a few years ago.”

With rising numbers of Chinese tourists at Choo stores in London, Paris and Milan, “it really…impacts the way we look at our European business,” Schulman said. After analyzing sales at the company’s European stores, he found that smaller shoe sizes are often the first out of stock in department stores in continental Europe. “This is something we’re really looking at in terms of the way that we assort and allocate for [Chinese shoppers],” said Schulman.

Myf Ryan, general manager for marketing, U.K., at Westfield, said Westfield London, the shopping center group’s development in West London, has “firmly es-tablished itself on the London tourist circuit and the Chinese market is incredibly important to [the mall],” adding that the mall is seeing “a growth” in Chinese visi-tor numbers. “Luxury brands that we house within The Village [Westfield’s upscale area], such as Louis Vuitton, Dior and Prada, prove popular [with Chinese tourists], and purchases of fashion accessories such as Swiss watches is a common trend,” said Ryan. “Equally, quintessential English brands such as Burberry and Mulberry have a great appeal.”

Ryan said Westfield’s tourist customers from all regions are generally business travelers between 35 and 55 years old, and often make purchases in cash.

Chen Xiaobing, head of the German tour agency CAISSA’s China operations, said Chinese tourists are looking for beautiful scenery, clean environments and other glimpses of nature that can’t be found within China when they travel. Chen said more than half the company’s customers have been abroad at least twice, and they are constantly seeking new experiences. Unlike many Western tourists, Chinese enjoy traveling in large groups on organized tours.

“In recent years, more people have chosen to spend their holidays abroad,” said Chen. “Chinese tourists are fond of visiting interesting places and enjoy sharing their

traveling experiences with friends — this is something that won’t change easily.”Global Blue Group, which tracks tax-free shopping, has logged sharp spikes in

Chinese tourist flows in continental Europe. In the first nine months of this year, Chinese shoppers surged 103 percent in France, 90 percent in Italy and 71 percent in France.

The number of Chinese tourists shopping in department stores rose 125 percent in the U.K., 217 percent in Italy and 243 percent in France, where “they can easily find sales people speaking their language,” said Pier Francesco Nervini, Global Blue’s vice president of international key accounts. “They are less structured in this sense in the U.K.”

At Galeries Lafayette on the Boulevard Haussmann in Paris, there are cus-tomer service counters that cater to several Asian languages, including Mandarin, Cantonese, Japanese, Korean, Indonesian and Malay. Toward the back of the gigan-tic store’s main floor is a second showcase for big cosmetics brands like Chanel and Estée Lauder staffed with predominantly Chinese women who speak Mandarin, Cantonese and even Shanghainese.

Coach also added Chinese-speaking associates in several of its stores. “As our brand awareness has grown in China, we are seeing significant interest

in Coach from the Chinese tourist in North America, notably in key destination cities such as New York, Vancouver and Toronto,” said Mike Tucci, Coach Inc.’s president of the retail division, North America. “At our New York flagship location on Madison Avenue in particular we have seen a notable increase in traffic from the Chinese consumer.”

Generally, he added, tourists represent a “small but important piece” of Coach’s total business. “Within that segment the Chinese shopper is our fastest growing con-sumer group,” Tucci said.

La Rinascente saw a 65 percent increase in year-to-date sales from Chinese tour-ists compared with 2009 and a 52 percent increase in terms of transactions according to Monica Ferreri, head of communications for the Milan department store. Average spending increased by 9 percent compared with the same period in 2009.

Based on a sampling of 17 shoppers interviewed by WWD in Paris on Monday, most were in France on organized tour groups, armed with shopping budgets ranging from 300 to 2,500 euros, or about $420 to $3,500 at current exchange rates.

Branded goods, particularly from Chanel and Louis Vuitton, were highly sought, with handbags, watches and men’s clothing among key categories.

Value Retail Management Srl has found that Chinese visitors to its Fidenza Village Outlets outside of Milan spend on average 5 percent more than other for-eign clients. They currently represent 7 percent of international visitors, with an average age of 25.

According to VisitBritain, the organization that tracks tourism patterns in the U.K., the Chinese spent a total of 117 million pounds, or $183.7 million, in the U.K. last year, with an average spend per visit of 1,310 pounds, or $2,056.

In a recent report, the organization said Chinese visitors would prefer to save money on food and accommodation, but spend more on gifts and local products for themselves. It’s a gift-giving culture, and the Chinese like bringing back “local” brands, such as Burberry, Clark’s shoes and Scotch whisky, the report said, adding that another driver behind these purchases is the guarantee that, because they are bought in the local market, they are not fakes.

Chinese Tourists Boosting Luxury

“Now, on average, Chinese tourists spend more money than American and European tourists abroad, and also more than Japanese abroad. ”

— Zhang Guangrui, Chinese Academy of Social Science

For more images, see WWD.com/markets-news.

Tourists outside Galeries Lafayette.

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REEL TIME: First-time directors Rachel Weisz, Eva Mendes and Jessica Biel screened their short films at the Director’s Guild of America on Monday for the West Coast Glamour Reel Moments event, which drew guests including Anna Faris, Demi Moore (a Reel Moments alum) and Ron Livingston.

Rosemary DeWitt, star of Weisz’s short “The Thief,” about a woman who offers comfort to a man who’s broken into her home, was in awe of her director’s work. “I wish we were doing a feature, let’s put it that way,” she said.

For Biel and Mendes, the excitement of seeing their films on the big screen was palpable. “There are just so many components that have to come together that are fun and enjoyable,” Mendes explained, quickly becoming distracted as she caught her first glimpse of the film’s poster, which showed a Hockney-esque California scene. “That’s awesome!”

After the screening, guests headed to Chateau Marmont for the after party where Biel’s beau, Justin Timberlake, joined the group to celebrate.

TIMBERLAND GOES BIONIC: Timberland has partnered with Pharrell Williams’ Bionic Yarn to produce an extensive range of footwear for spring that will use the company’s innovative fabric that’s made in part from recycled plastic bottles. “Timberland has been a part of my life since I was a kid, so I’m really happy they have incorporated Bionic Yarn in their brand in such a big way,” said Williams, the N.E.R.D. front man and music producer who co-owns Bionic Yarn with Tim Coombs and Tyson Toussant. Timberland is offering more than 90 different styles of shoes and boots with Bionic Yarn’s canvas material, which is made from 50 percent organic cotton wrapped around a core of 38 percent recycled PET plastic and 12 percent high-tenacity polyester. The line will hit stores in January and features hangtags calling out the practical and environmental attributes of the canvas.

“We’re constantly looking for innovative new materials that deliver on our high performance standards for the outdoors,” said John Healy, general manager for Timberland’s Invention Factory. “This is a huge development for spring, a time when canvas is a must-have for consumers.” Other brands that have partnered with Bionic Yarn include Gap Japan, Cole Haan, Moncler and Williams’ own Billionaire Boys Club and Ice Cream labels.

STELLA, TAKE TWO: Stella McCartney is collaborating with Target in Australia for the second time on a range of clothing that made its debut Monday. The capsule collection is part of Designers for Target, and will feature 40 pieces with an entry price point of $28. McCartney’s previous collection for Australian Target bowed in 2007. “This collection is really much more about evening, much more luxurious,” said McCartney. “We addressed daywear specifically with the last collection, and with this one we focused much more on cocktail styles that can also adapt to daywear.” The Stella McCartney for Target collection will be sold to Australian Target’s 102 stores.

SWEET DEAL: Dylan Lauren continued her book tour for “Dylan’s Candy Bar: Unwrap Your Sweet Life” in Los Angeles last week at Ralph Lauren’s Robertson Boulevard boutique (a local Candy Bar is coming soon). While most celebrity host pairings can seem random, co-host Lauren Graham hardly had to play six degrees of separation for the gig. “My father

is the head of the chocolate and candy maker’s association, so he likes to take credit for this,” said Graham, who is also old pals with Greg Lauren (Dylan’s cousin) and Elizabeth Berkley. “I’ve been joking with them for years that I should marry Greg so my name could be Lauren Lauren.” Graham’s “Parenthood” co-star Joy Bryant played co-host, chatting with fellow actress Jessica Chastain, who brought her mother and grandmother. Dylan Lauren, who was overwhelmed singing books for the 430 guests, said, “No new books just yet.”

FAST LANE: Marchesa’s Georgina Chapman is one of several designers helping Land Rover launch its new Range Rover Evoque car. Chapman, Henry Holland and a slew of other design cognoscenti were tapped to partner with the brand as part of the launch, which is the smallest and greenest Range Rover ever. “Its design is inspired by city architecture and a big part of a city is the people within it, their journeys and their conversations,” Land Rover managing director Phil Popham said.

As part of the deal, Chapman is expected to participate in several initiatives, including activities around the New York International Auto Show and an event with Land Rover Manhattan at a top Marchesa retailer. Range Rover will also sponsor Marchesa’s fall 2011 presentation in February. But

the best part is reserved for Chapman herself. She will get to drive an Evoque Range Rover, and tweet her impressions on Twitter via @MarchesaFashion. Sadly for her, though, it’s just a long loan and she won’t get to keep the car.

LAUDER LIGHTS UP HARRODS: Estée Lauder ambassador Elizabeth Hurley was enough of a draw to coax scores of London shoppers into the cold last week, to see the model illuminate Harrods in pink light. The event was held to mark both Breast Cancer Awareness Month and Estée Lauder’s 50 years in the U.K.

“For 11 years we have lit a landmark pink, and this year we’re going to light up the old lady of Knightsbridge, Harrods,” said William Lauder.

And Hurley was a gracious host to guests who had braved the elements to see the lights. “Thank you so much for coming out on this cold and wet night,” said Hurley as she prepared to flip the switch. “And no one’s colder and wetter than me, as I’m in a small dress and you’re all in coats.”

But soon enough, the guests repaired to the comfort of Harrods’ Georgian restaurant. There, the crowd mingled among blooms of pink hydrangeas while sipping, appropriately, rosé Champagne.

FASHION SCOOPSA Timberland boot made with Bionic

Yarn’s canvas material.

Jessica Chastain

Lauren Graham and Joy Bryant

Dylan Lauren

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