WWD, TUESDAY, OCTOBER 26, 20102

By Miles Socha

PARIS — News LVMH Moët Hennessy Louis Vuitton took a 14.2 percent stake in Hermès International goosed the share prices of both French companies on Monday — along with those of a wide swath of European fashion players.

It also seemed to ratchet up the rhetoric between the family-owned maker of Birkin bags and silk scarves, and the world’s largest luxury conglomerate.

Shares in Hermès rocketed 15.1 percent to close at 202.85 euros, or $283.04 at current exchange, on the Paris Bourse, while shares in LVMH gained 2.4 percent to close at 116 euros, or $161.86. French retail-to-luxury conglomerate PPR saw its stock rise 1 percent to 117.25 euros or $163.60.

On the London Stock Exchange, shares in Burberry went up 3.2 percent. On the Swiss exchange, luxury conglomerate Compagnie Financière Richemont increased 1.2 percent. In Italy, shares in Bulgari rose 2.9 percent, Tod’s Group 2 percent and Luxottica 2.2 percent.

Analysts had predicted shares would jump, with the LVMH maneuver suggesting renewed mergers and acquisitions activity in the luxury sector.

Over the weekend, LVMH revealed its stake in family-controlled Hermès, which will rise to 17.1 percent when it converts 3 million deriva-tive instruments into shares. LVMH said it has “no intention of launching a tender offer, tak-ing control of Hermès nor seeking board rep-resentation.…The objective of LVMH is to be a long-term shareholder of Hermès.”

Also on Monday, LVMH and Hermès issued new press releases: the former to assure it ac-quired the stake within the proper regulatory framework; the latter to trumpet family unity in the face of a surprising and “unsolicited” new investor.

Hermès said family members control close to 75 percent of shares in Hermès International, suggesting LVMH acquired most of its bundle from the free float — and over a

long period, given that it bought them at well under half the current trading price.The Hermès statement noted that its supervisory board and management committee met Monday

to discuss the LVMH stake, which compelled it to confirm the family’s “unanimous will to maintain long-term control of the company.…The family and the management reaffirms its pride in upholding the culture of Hermès, which is unique in the world.”

Meanwhile, LVMH said “it is fully compliant with French stock exchange regulations, notably those concerning the disclosure requirements on crossing shareholding thresholds.” The company added it would file the “appropriate notifications” within the time frames of the French markets regulator, which requires those who accumulate north of 5 percent of the share capital to declare so within several days.

Separately, Patrick Albaladejo, deputy chief executive officer at Hermès, told WWD the company had yet to receive any statement of intent from LVMH, nor any request to meet.

The surprise deal continued to get a thumbs-up from the investment world.In a research note Monday, analyst Thomas Chauvet at Citigroup said it maintains its buy rating on

LVMH, describing the impact of the Hermès investment to LVMH financially as “negligible,” although the prospect of a share buyback or special dividend “now looks unlikely.”

By contrast, the transaction is likely to renew market speculation that LVMH might dispose of its 66 percent stake in Moët Hennessy to drinks firm Diageo, which has expressed interest in a deal, in order to fund future share purchases in Hermès.

“[LVMH chairman and ceo Bernard] Arnault wants to own this company, and he’s playing a long-term game,” said one industry source. “This could take 10 years, but he’s now in place to take over. There are two scenarios that could play themselves out: One is that the family members eventually buckle and sell their shares to him because they want the cash. The other is that they get scared and unite against him or sell their shares to a third party white knight in order to block him.”

— With contributions from Samantha Conti, London, and Luisa Zargani, Milan

SPRIng: See the SPRIng

CoLLeCtIonS fRoM M MISSonI And tALbotS, AS WeLL AS AddItIonAL bRIdAL CoveRAge, At WWd.CoM/fAShIon-neWS.

MoRe fAShIon on the Web:

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. 87. 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.

• Model Call: Melodie Monrose • Additional images

from the renovated Lord & Taylor flagship

• Photos from the Carousel of Hope BallPh

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“I can’t wait.” — olivier theyskens, the new

artistic director for the entire theory brand. Page 3.

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Melodie Monrose

Hermès, LVMH Shares Rise

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Maxime de la Falaise led a life that was, as WWD wrote on July 22, 1976, “an extroverted zigzag from an English, Irish and French childhood” to modeling and design stints at Schiaparelli, Givenchy, Jacques Fath, Michael Sekers and Blousecraft to writing about food for Vogue. There were her friendships with Marcel Duchamp, Max Ernst and Bob Rauschenberg, her love affair with painter Bernard Pfriem and her starring turn in the 1974 film “Andy Warhol’s Dracula” as la Marchesa di Fiore. “That’s not the half of it,” remind-ed the paper. “Maxime has partied herself around the world, from hysterical post-war carrying-ons in Europe to equally lively after-hours trips to New York’s under-underground dance palaces.”

When WWD caught up with the multihyphenate personality, she was tucked quietly into a cinnamon velvet couch at her daughter Loulou de la Falaise’s Paris apartment. The subject at hand? New York. “I think I enjoy myself more in New York,” she said. “The atmosphere is a little more ‘up.’ In Paris, I feel a slight depres-sion when I arrive.” Which isn’t to say her Manhattan home on the Upper West Side was in the most luxurious of locales. “I’m happier in neighborhoods that aren’t really the place to live,” she contin-ued. “In New York, I’m three blocks away from 94th Street — it’s the sort of street where black pimps pimp for second-class drag queens. There are drunks and the OTB. I don’t think we have a methadone clinic though.”

Family ranked high for de la Falaise, especially daughter Loulou. “If she weren’t my daughter she would probably still be my closest friend,” she remarked, adding that “since she has worked with Yves Saint Laurent, she has learned things about taste. Her father and I are very proud of her.”

As for her own style, “[de la Falaise] has clothed her public self in everything from all-out extravaganza Givenchy gowns, ‘held together with safety pins,’ to the zenith of Bohemian chic,” noted WWD. “She is usually braceleted, earringed, necklaced, ringed and scarved to the hilt. It usually works.” The

daughter of Sir Oswald Birley and Lady Rhoda Birley even admit-ted to sometimes borrowing the same couture looks as Françoise de la Renta. “I never worried because Françoise was so neat and careful. I knew that the dress would be in perfect condition for me to borrow it the next time,” de la Falaise recalled. “Sometimes it happened the other way around — I would borrow a dress that Françoise planned to borrow the next evening. I’m sure she wor-ried quite a bit because after I wore it, the dress was apt to be in a less-than-perfect state — cigarets, wine, you know.”

— venessa Lau

MAXIME IMPACTJuLy 22, 1976

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Gary Wassner

WWD.COMWWD, TUESDAY, OCTOBER 26, 2010 3

By Marc Karimzadeh

NEW YORK — It’s Theory times two for Olivier Theyskens.In addition to designing the Theyskens’ Theory label, which is

launching for spring, he will now take over design responsibility for the entire Theory brand as its new artistic director.

The move will bring Theyskens’ design sensibility to a new glob-al audience. Since bursting onto the fashion scene in 1997, the de-signer has made a name for himself with an ethereal, romantic and sometimes dark fashion aesthetic for Rochas and Nina Ricci, which made him an industry darling but always kept his clothes reserved for the select few.

By partnering with Theory for Theyskens’ Theory, Theyskens became the latest in a string of high fashion designers to embrace more accessible price points. In his new role, Theyskens is expect-ed to give Theory, which was instrumental in creating the contem-porary field when it launched 13 years ago, a fashion jolt while con-tinue to appeal to its existing customer.

The first Theory collection designed by Theyskens will be un-veiled for the fall 2011 season.

“Working on Theyskens’ Theory has been very inspiring for me and for the company,” Andrew Rosen, founder and co-chief executive officer of Theory, said. “The launch has been very successful. This is an opportunity to work with Olivier on a much grander scale.”

The idea of expanding Theyskens’ responsibility at the firm crossed Rosen’s mind pretty much from the begin-ning of their collaboration.

“Working with Olivier on the initial concept for Theyskens’ Theory, I can’t say that I wasn’t thinking about this all along,” he said. “This was a natural progression. In some ways, it may seem radical, but for Olivier and me, it was not radi-cal at all. He has been involved in the culture of the company for the past six months.”

Theyskens’ name frequently comes up in conjunction with top jobs at major European and American fashion houses, but the Belgian designer said he felt drawn to the idea of making clothes that people can wear every day. Many of Theory’s

purist design elements have already informed his initial styles for Theyskens’ Theory, which he will continue to design, and he sees much opportunity ahead for the Theory label itself. “There are a lot of things that we can do,” Theyskens said. “It’s very stimulating for me.”

Theyskens is being charged with everything from building the accessories assortment to overseeing men’s wear, an area he so far hasn’t tackled. “I can’t wait,” Theyskens said. “I haven’t designed men’s wear yet, but it’s been on my mind. I feel very comfortable doing men’s wear.”

He also cited a strong rapport with Rosen and the Theory team as a reason he accepted this new role.

Theory has sales of over $500 million, with a global network of retailers that sell the collection. Rosen said Theyskens, whose name is recognized in fashion circles worldwide, will also help build the brand’s global profile. “I feel that Olivier’s creativity and energy is what we need for our global expansion,” he said.

Bringing a name like Theyskens’ to a brand like Theory is also indicative of just how much the contemporary category has evolved since the brand was launched. Rosen played an instrumental role in the shift, having transformed Helmut Lang from a designer label into one of the hottest contemporary lines, and investing into young-er names like Alice + Olivia and Rag & Bone, which now compete for the more traditional designer customer.

“The world evolves, people’s tastes evolve and the way of life evolves,” Rosen said. “Fashion has to evolve too. This is a natural evolution. Companies cannot get stuck in one place. The culture of the company won’t change, but the energy and creativity will change because there is a new force involved. Even though the Theory busi-ness is very strong, I felt it was important to step up the game. I saw a great opportunity to infuse Theory not only creatively but also en-ergetically with someone like Olivier.”

Istvan Francer, Theory’s design director, is likely to move to an-other brand within Theory’s Japanese affiliate Fast Retailing Co. Ltd., which owns Uniqlo.

“Istvan has made a tremendous contribution to Theory over the last six years, and I have appreciated his creativity and partner-ship,” Rosen said. “He and I are currently discussing other oppor-tunities within Fast Retailing.”

Theyskens isn’t saying au revoir to designer clothes for good. He said that he is open to creating one-of-a-kind pieces for special occasions, but, for the time being, quite enjoys exploring the new, more democratic fashion tier, particularly in New York. He just got an apartment in the West Village and, while he will continue to spend much time in Paris, Gotham is a welcome change. “Everybody says there is such a good energy here and I agree,” Theyskens said.

PARIS — During a rare radio interview, broad-cast Monday morning here, Liliane Bettencourt said, “If I cannot do otherwise, yes, I am ready to brawl [with my daughter]” and maintained that she is in good health.

The 11-minute question-and-answer session was recorded by Europe 1 radio in her home in Neuilly-sur-Seine, France, on Friday.

As reported, on Wednesday Bettencourt filed a complaint against her daughter, Françoise Bettencourt Meyers, for alledgedly commit-ting “moral violence.” The lawsuit followed a third attempt by Bettencourt Meyers to have Bettencourt medically examined to ascertain her mental acuity.

The legal family feud dates back to December 2007, when Bettencourt Meyers launched a case against photographer François-Marie Banier, alleging he abused the weakness of her now 88-year-old mother, who gave him assets valued at about 1 billion euros, or $1.4 billion at current exchange. Banier has denied any wrongdoing, while Bettencourt has maintained she is sound and acting on her own free will.

“If one abuses me, it’s that I allow myself to be abused. So much the better for me. Let me live [my life],” said Bettencourt. “If I think that I’ve given too much, you know what I do? I laugh.”

Bettencourt explained she finds Banier “is very strong” and also that “he knows how to ma-neuver.”

She denied the allegation that she had given cash to politicians, such as French President Nicolas Sarkozy.

“No, of course not, I do not distribute money like that,” she asserted.

Bettencourt said she isn’t worried for L’Oréal, the enterprise her father founded and in which she holds a 31 percent stake (making her its larg-est individual shareholder). She added, “It’s a magnificent business.”

Bettencourt celebrated her 88th birthday last Thursday, but didn’t invite her daughter. Bettencourt said that her wish for the next year is to be able to cope, and that she’s confident for the future.

— Jennifer Weil

LVMH U.S. Unit Taps MunafoLVMH Moët Hennessy Louis Vuitton’s LVMH Perfumes & Cosmetics subsidiary has named Nicholas Munafo president of its LVMH

Fragrance Brands division, a new position based in New York.

Munafo, who currently holds the same post at Shiseido’s Beauté Prestige International USA unit, is scheduled to join LVMH Perfumes & Cosmetics on Dec. 1.

He’ll take over the duties of Jean-Christophe Gandon, who is now general manager of Parfums Givenchy, Kenzo, Pucci and Fendi U.S. Gandon plans to leave the firm for family reasons, accord-ing to a letter from executives to LVMH Perfumes & Cosmetics employees, and will be returning to Paris by yearend.

The luxury goods giant said during the spring it would create the LVMH Fragrance Brands division to regroup the sales forces of the four brands while maintaining each one’s individual creative, marketing and communica-tions activities.

Pamela Baxter, president and chief executive officer of LVMH Perfumes & Cosmetics North America, said Monday she was pleased “to have someone from the industry who has a proven track record. He has a great reputation [and] re-lationship with all of our retail partners. He’s a fragrance expert.”

She added that Munafo will head the launch of Fan di Fendi, the house’s new scent, which is slated to reach the U.S. next fall. He’ll also lead the rollout of Play for Her from Givenchy — the biggest name in the LVMH Fragrance Brands U.S. portfolio — Baxter noted, which began a worldwide launch this month. Munafo will report to Baxter.

Munafo took the BPI post in spring 2008. Before that, he was executive vice president of sales and marketing at P&G Prestige Products Inc. since 2005.

Munafo began his career in 1991 at McKesson Drug Co. in Detroit as a promotional account manager. He then moved to New York for one-year stints in cosmetics buying jobs at Saks Fifth Avenue and Barneys New York be-fore joining Parfums Boucheron in 1994 as mar-keting manager. At that time, Boucheron was the U.S. distributor for BPI and its Issey Miyake and Jean Paul Gaultier fragrance brands.

In 1996, Munafo moved to Federated Department Stores Inc., first as merchandis-ing manager of fragrances and then as market-ing manager of private label brands. He joined P&G in 1998 as marketing director and subse-quently moved up through the organization.

— Matthew W. Evans

Theyskens Takes Control Over Entire Theory Brand

BEAUTY BEAT

MEMO PAD

Bettencourt Vows to Fight in Radio Interview

Olivier Theyskens and Andrew Rosen

SEEKING THE TRUTH: On a spring night in April 1970, a 35-year-old newspaperman who worked the night shift walked out of his office in Chicago and dropped dead on a dark street. Some hours later, two cops found his body and his family was told that the cause of death was a heart attack. This is a true account of what happened to the father of GQ deputy editor Michael Hainey, who lost his dad at the age of six. Years later, Hainey felt there were several holes in the story and, now, he’s writing a book about what he’s uncovered, in the form of an investigative memoir. “It took me decades to work up the courage to search out the truth,” Hainey told WWD. “I’ve spent the past five years reporting the truth of his last night. I never would have guessed where it was going to take me.” He also said the memoir will cover what it was like to grow up without a father in Seventies America. Hainey said he’s in the final stages of finishing the manuscript. — Amy Wicks

HUGO PLAYS HOOPS: Hugo Boss has inked a multiyear sponsorship deal with the New York Knicks basketball team that will bring the brand significant exposure at Madison Square Garden. Tipping off at the Knicks’ home opener on Saturday, the agreement includes Hugo Boss advertising on the LED courtside signage and on the ribbon of signage that rings the second level of the arena. During fashion weeks in New York, Hugo Boss will have exclusive ownership of two large exterior signs on the facade of MSG that are seen by an estimated 1.6 million people a day. (Penn Station is located beneath MSG.)

Additionally, the center-hung GardenVision screens will engage fans with three interactive features during games, all including Hugo Boss graphics and accompanied by public-address announcements: best-dressed player of the game (judged on players’ outfits worn while arriving to the game), sharp-dressed fan, and who’s the Boss of the paint? The latter accolade will go to the top point scorer and rebounder inside the shaded free-throw lane.

This is the first basketball sponsorship for Hugo Boss, whose other sports marketing initiatives include the Davis Cup, the Vodafone McLaren Mercedes Formula One racing team, the Alex Thomson Racing team in sailing, three tournaments of the European PGA tour and the Bayern Munich soccer team.

“Madison Square Garden is such an important landmark in New York City. We felt it was the only place in this city that did not split the fan community, while the Knicks hit the Hugo Boss targeted demographic of males 24 to 65,” said Ward Simmons, senior director of marketing and p.r. at Hugo Boss USA. — David Lipke

Mark Brashear, chairman and ceo of Hugo Boss, the Americas, with the Knicks’ Amare Stoudemire.

4 WWD, TUESDAY, OCTOBER 26, 2010

Continued from page oneThe flagship is seen tracking 15 percent ahead this

year, generating $150 million in volume in 2011, and potentially $200 million not long after, sources said. Chainwide, “our business continues to be up double digits. We see no reason to come off that forecast,” Hoffman said.

In addition, L&T is aiming to expand for the first time in a decade by seeking a second location in Westchester County, N.Y., based on the success of its Scarsdale store, the chain’s best-performing branch. The unit is said to generate between $90 million and $100 million in annual sales, ranking second in volume behind the Fifth Avenue flagship.

The most dramatic change is the updated 30,000-square-foot main floor that revives the original grandeur, shifts to open-sell beauty environments and enables women to see the true color and character of the cosmetics they apply (for more on the beauty area, see sidebar).

“We’ve added a ton of lighting. It’s hard to believe that we were able to sell merchandise before, let alone cosmetics,” Hoffman said. “Ninety-two percent of the lighting is as pure as you can get to matching natural sunlight.” The columns have been stripped of the dated mirrors from the Eighties and lacquered for an aged, historic look, while the distinctive classic vaulted ceil-ings have been retained.

Among other changes:• The 20,000-square-foot ninth floor has been con-

verted to a home department with 8,000 square feet for Ralph Lauren Home and 6,000 square feet for Calvin Klein white label. The floor will also house a Christmas shop, a swing shop, and possibly other designers for home in the future. Home goods will be tested in four or five branches in 2011 as the company gets serious about the category after dabbling in it, on and off, for years.

• The men’s floor has been revamped with a clearer demarcation between classic and contemporary brands, new vendor shops, fixtures to better display suits and item intensification — quarter-zip $150 Black Brown 1826 cashmere sweatshirts and $98 reversible ribbed Tommy Bahama sweaters are highlighted.

• Fifth Avenue windows previously hidden behind storage areas have been uncovered, bringing sunshine and impressive views to floors two, four, five, eight, nine and 10.

There’s also what officials describe as the largest Calvin Klein shop in the world, on four; a revamped intimate apparel department on eight; the addition of kids’ shoes, and a bridal area, as well as Bobbi Brown, Marc by Marc Jacobs handbags and accessories and Juicy Couture, among other new vendors. There is some thought about converting the 11th floor, which is nonsel-ling, to a restaurant.

“The flagship really hadn’t been touched in 35 years,” Hoffman said. “This is more of a restoration than a ren-ovation. We have restored this magnificent building and brought it into the 21st century.”

“This building is almost 100 years old. It’s as histori-

cal as it gets,” added Dominick Ponti, vice president of store design, construction and facilities. “We just did whatever we could to save the original character and hang on to anything we could. We left the ceilings and the capitals alone, the same as they were 100 years ago. We kept the original travertine floors, and only replaced what needed to be. In cosmetics, we changed to Italian marble, just to delineate it, and give it the aisle struc-ture that we never really had.”

While the flagship lacks the merchandising scope of Macy’s Herald Square, the cool, chic style of Barneys New York on Madison Avenue or the high-energy, con-temporary vibe of Bloomingdale’s 59th Street, many consider Lord & Taylor a no-nonsense shopping ex-perience without the stress, traffic or priciness of the competition. Compared with other flagships in the city, the 97-year-old Italian Renaissance Revival building on Fifth Avenue between 38th and 39th streets has few flourishes and architectural details and, in terms of pro-ductivity, brings in around 11 percent of the company’s annual sales. In comparison, Saks Fifth Avenue’s flag-ship accounts for 19 percent of its volume of $2.6 billion. The L&T flagship was designed by Starrett & Van Vleck, which subsequently designed the Saks Fifth Avenue flagship, also a landmark, the former Abraham & Straus in Brooklyn, which became a Macy’s, and two suburban Lord & Taylor units.

Lord & Taylor has also been regarded as a store for mature women, a category killer for dresses, and a must-stop for Christmas windows. Under Hoffman’s di-

Lord & Taylor: Restoration on Fifth

The restored main floor.For more images, see WWD.com/fashion-news.For more images, see WWD.com/fashion-news.

WWD.COM5WWD, TUESDAY, OCTOBER 26, 2010

L&T Adds Glam To Beauty Biz

By Pete Born

Lord & TayLor has recasT iTs main-fLoor beauty department with a sleek, new look and a more inviting and visually engaging layout.

about 3,000 square feet were added to the beauty floor, which now totals 12,500 square feet. five brands have been added to the store — Bobbi Brown, Laura mercier, mario Badescu, fusion Beauty and molton Brown — and 11 vendors have been upgraded to shop-in-shop installations. another feature is an allure pop-up shop, which will offer prize-winning products from the magazine’s annual awards event.

“The biggest thing that we wanted to do was to elevate the shopping experience and obviously elevate the productivity,” said Liz rodbell, executive vice president of merchandising for Lord & Taylor. “We really wanted the shopping experience to change in that it allows more of a welcoming environment with the beauty advisers and the customer interaction.” citing the updated vendor displays, she added, “We have up-to-date presentations that take us much further forward. We also added some energy and animation.”

as part of the look, 75 video installations and light boxes have been built into the fixtures around the floor, giving vendors a chance to tout extra features and services. estée Lauder has a more intimate area, dubbed the “foundation fitting room.” Lancôme produced its first “mascara Bar.” chanel has a makeup mirror equipped with light settings to approximate different light conditions throughout the day, so customers can judge how the product will perform once they’ve left the store. clinique has a touch-screen computer that provides a self-service consultation. it prints out recommendations for a consumer to take home. nars has a “mirror monitor” that plays instructional videos while the customer is looking at her reflection. Laura mercier has installed its first brow bar in the city and fusion Beauty has a computerized service to provide customers with a virtual makeover.

The entire floor has been given a fresher feeling, thanks to an overhaul of the lighting system. color-corrected bulbs were installed to radiate what store executives call “92 percent complexion-right lighting.” in addition, the vintage light fixtures were refurbished and given a new sheen.

although the aisles were not widened, a feeling of roominess was created by moving the old counter chairs to inside the installations. rodbell noted, “They all are in the shops so you’ll have better traffic flow throughout the department.” The number of chairs within the shops have been more than doubled to 90, rodbell added. Barbara Zinn-moore, senior vice president and general merchandise manager of beauty and home for Lord & Taylor, pointed out: “We know that if we get a customer in the chair, we’ll sell them and we’ll sell them a little more.”

also, the men’s and women’s fragrance bars have been pulled together in the rear of the floor to make a more coherent impression.

although executives declined to discuss figures, market sources estimate that Lord & Taylor did about $14 million in volume on that floor last year. This is the first remodeling of the department since 1975, meaning that the dowager has been given a makeover fit for the modern age. according to industry sources, the store hopes to do $20 million in annual volume on the floor in the future.

even before opening day, brands experienced a jump in business as soon as their new counters were done. The increases ranged from 9 percent to a doubling of volume.

rection, the store has veered to more moderate and better mer-chandise and has been attempt-ing to attract younger shoppers. “We have changed our position-ing and it works very well in the current economy,” Hoffman said. “The customer is looking for merchandise with nice value, but if you come to Lord & Taylor you still have an upscale experi-ence and get treated like it’s a luxury store.

“I still want this to be the dress store for my mother, but now I think of it as a store for my 40-year-old wife, my 30-year-old sister and my 20-year-old cousin as top of mind,” Hoffman said. “We’ve been a category killer in dresses. It’s even more evident in comparison to the competition at our branches. We just devote more space.” However, shoes, Hoffman added, “is something we have re-ally targeted. By far, it’s our fast-est-growing category.”

Men’s wear on 10 is also grow-ing and is seen as underdevel-oped. “Every inch on the floor has been touched, whether it’s new shops for vendors that we didn’t carry before or renovated shops,” said Jonathan Greller, senior vice president and gen-eral merchandise manager of men’s, children’s and intimate apparel. He cited new denim shops for Diesel, Seven For All Mankind and Joe’s Jeans; the return of Gold Toe, Perry Ellis and Jockey, and “expanded assortments for just about every vendor that has been successful — the Calvin and Ralph businesses are phenomenal.”

He also cited Black Brown, the Joseph Abboud exclusive label for L&T, and pointed to the new express elevator from men’s shirts, furnishings and accessories on the main floor direct to 10, and a lounge area by the Fifth Avenue windows with two flat-screen TVs. There is a nod to some luxury items such as $798 shawl sweaters from Black Brown made with Loro Piana cashmere, merchandised not far from Black

Brown’s $50 merino sweaters.“Men’s has the same chal-

lenges as the rest of the store; we have to make sure the world knows Lord & Taylor is not just your mother’s dress store,” Hoffman said. “We are getting the word out. I think we lost a lot of core customers in the mid-2000s. Men’s strug-gled even more than the rest of the store.”

But for the men’s wear suppliers and others as well, “the restoration has proved to be a big validator to invest in Lord & Taylor,” Hoffman said. “We’ve got great brand names at accessible price points, and great service. For a certain customer, there is a perception of luxury. We are doing everything we can to make this a destination again. I don’t think the project will ever be 100 percent complete because vendors keep coming to us with ideas.”

At one time, plans to con-vert much of the L&T flagship’s retail space to offices and con-dominiums were considered by the current owner, Hudson’s

Bay Trading Co. But with the real estate market declining and L&T’s business improving, the attitude has changed.

“The productivity we are getting on the site makes it most valuable as a retail facility, as long as Lord & Taylor per-forms,” said Richard Baker, chairman of Hudson’s Bay. “The highest and best use of the building is as a Lord & Taylor. The store is performing much better than in the past. We used to think there was an opportunity to shrink the upper floors and add a glass tower.” However, “We are expanding the retail portion of the store and renovating as quickly and as much of it as we can.”

Baker dismissed rumors he was inclined to sell the prop-erty, which would have probably spelled the end of L&T. “We never had any discussion about selling the building,” he said.

Laura Mercier joins the mix.

Brendan Hoffman in Lord & Taylor’s 5,400-square-foot Calvin Klein shop.

The reputation in dresses remains.

Lord & Taylor has reentered the home business.

Men’s shoes represents an opportunity for

greater productivity.

Item intensification on L&T’s men’s floor.

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A WednesdAy Afternoon in eArly october — the first time the sun has come out in weeks in london, but it might as well be midnight in the ViP area of solange Azagury-Partridge’s london store. down the rainbow staircase is a subterranean cavern full of shiny things: the swarovski elements-studded walls and ceiling, a disco ball and, most important, the star-shaped glass display cases filled with precious gems.

With its red velvet walls and techno-pop sound track, it has a permanent nightclub ambience. But this quirky outpost, relocated last May to new Bond street after 15 years on Westbourne Grove, is but one example of the business going on within the com-pany. for starters, Azagury-Partridge’s los Angeles store officially opens today, with an-other to follow next month in singapore. A few blocks away, also on Bond, are her brand new offices in a three-floor town house com-plete with her first-ever on-site workshop. “Come Christmas, when we write down ev-erything we’ve done this year, i don’t think we’ll quite believe it, to be honest,” says Azagury-Partridge.

it’s a major real-estate moment hinged partially on the success of the Madison Avenue store the designer opened in Manhattan in April of 2009 — not exactly prime time for the luxury market. “seeing that kind of clientele and the footfall made us realize that maybe it’s time not to be a destination in london, and to be somewhere that people go shopping,” says Azagury-Partridge, explaining the decision to move the london flagship to its current site in the city’s luxury epicenter. “it’s made a substan-tial difference.”

the idea of opening in the most presti-gious shopping districts in each city has be-come a core business strategy that’s extend-ed to rodeo drive in los Angeles and the takashimaya shopping Centre in singapore. this would not have been possible without labelux Group, the Vienna-based subsidiary of Joh. A. Benckiser GmbH, parent company to Coty inc., among others, which bought a controlling stake in Azagury-Partridge’s firm in 2008 in what labelux chief executive of-ficer reinhard Mieck called a “buy-and-build strategy.” solange was the seed for labelux’s fashion portfolio, which has since grown to include Bally, Zagliani and derek lam.

labelux’s interest in Azagury-Partridge’s business stemmed from Peter Harf, chair-man and ceo of Benckiser and chairman of Coty inc. He and his wife tina were clients when he expressed professional interest in Azagury-Partridge’s brand. Harf wasn’t avail-able for comment.

“i’d been approached before, and i was always terrified of getting involved with strangers,” says Azagury-Partridge. “[Harf and his wife] have been clients of mine for 10 years. i didn’t really know who they were or what they did. they were just very nice people who would come a couple of times a year, buy some really good pieces — they have really good taste.” it still took a year of conversation before she signed the deal on April 4, 2008 with a pen that’s been glued to a mat and framed in her office. “it wouldn’t have happened,” she says, “if it had been just some random money people.”

the jeweler has been involved with big-money people before. they weren’t random, either. in 2001, tom ford installed her as creative director of Gucci Group’s Boucheron, the 152-year-old Parisian house of haute joaillerie, where she was charged with updating its image. At the time, Azagury-Partridge was basically a one-woman show with no formal training, just an eye cul-tivated by jobs with 20th century art dealer Gordon Watson and the costume jewelry house Butler and Wilson during the eighties.

Her own business snowballed after she designed her engagement ring, an uncut diamond set in gold, for her 1987 wedding to Murray Partridge. it took another five years for her to focus exclusively on jewelry, designing and selling the odd collection by appointment out of her home in Paddington. “it reached the point where i was busy before 10 a.m. or after 6 p.m., and my home was not my own anymore.” Which is when she rented a space on Westbourne Grove for 9,000 pounds a year.

Hers was a nontraditional point of view from the beginning, but that first store crystallized her vision of something out of the ordinary. it was done up like jewel-box boudoir in dark velvet that offset the colorful jewelry for a mood that read as seduc-tive, psychedelic voodoo. early collections included enamels, featuring her signature Hot Kiss rings shaped like lips; the Kinetic collection of moveable pieces such as swirled diamond rings that spun — all radically different from the classic emerald and princess cuts available at venerable Place Vendôme jewelry houses.

Her collections have grown to include diamonds, such as the Platonic line, and even engagement rings, though not of the traditional sort. “People have been brainwashed into thinking that the only stone is a diamond, the only diamond is a d-flawless and everything else is rubbish,” Azagury-Partridge says. “if you walk down Bond street, all you will see are diamonds and maybe the odd ruby and emerald, and they all look like glass. they don’t speak to anybody on an emotional level.”

she prefers her jewels colorful and with a sense of humor. Ball Crusher rings are

big pearls in a claw setting; when creating the more recent stoned collection, she riffed on “real stones, fake stones, fruit stones, get-ting stoned,” she says. “i quite like to explore linguistically and see where it takes me.”

that playful sophistication attracted de-sign-savvy celebrities like Madonna, Kate Moss and eventually a different kind of ce-lebrity, ford.

in the three years that Azagury-Partridge worked at Boucheron, she reimagined the jewelry with the house’s moody imag-ery of snakes, faces and bodies in her first collections, Beauté dangereuse and not Bourgeois. she also had her first experience with fragrance, trouble, which launched in 2004 and set Azagury-Partridge up to develop her own fragrances, stoned and Cosmic.

she doesn’t say much about the par-ticulars of her experience of working at Boucheron, which sits just two doors away from her on new Bond, other than to note that it provided “a very good education” that has impacted her own business consider-ably. “Before i went to Boucheron, i couldn’t imagine how my business could be bigger than it was,” says Azagury-Partridge, but wit-nessing a larger production inspired her to build her own line.

Within a year of leaving Boucheron (she was part of the post-ford exodus), the de-signer brought in Guillaume troncy, a for-mer brand manager at Gucci Group, to be marketing and communications director, and implemented parts of the corporate manage-ment structure — an operations manager, a production manager, a ceo — though she says she’s “a bit anticorporate. But having said that, you have to maintain your integ-rity and identity in whatever you do, so that’s the challenge, isn’t it? i enjoyed the chal-lenge of being independent. every piece of jewelry i sold enabled me to do something else. [through labelux] the process has been sped up a little bit. And the reason i did it was because i had so many ideas that i wouldn’t have been able to fulfill because the jewelry business is a money pit.”

in the past two years Azagury-Partridge’s staff has grown from five to 25, excluding re-tail. “now i can have advertising,” she says. “i can get more gorgeous stones, and now i can make my shops look fabulous. even more fabulous.”

there, she assumes complete control: All of the stores are designed by Azagury-Partridge herself, with the help of an archi-tect who executes the display cases, wall treatments, custom carpets and molded ceilings. interiors have been a side proj-ect of sorts for Azagury-Partridge. in 2008, she designed a range of furniture — tables, rugs and an 18-karat white gold and dia-mond chandelier — for an exhibition at the sebastian + Barquet Gallery in new york. it’s a fantasy-driven aesthetic. sitting on a mid-century chaise in ViP chamber of her london store, she mentions her affinity for the sixties tV show “i dream of Jeannie.” “she lived in a bottle and her house was a bit like this, wasn’t it?,” she asks.

As for the new stores, they’ll be “the same but different,” says the jeweler. for exam-ple, in los Angeles, the rainbow carpet has stars “because l.A. is the land of the stars.” speaking of, she has a few famous friends of

her own, including rachel Weisz and thandie newton. newton, a friend since she commissioned a ring for the birth of her second baby five years ago, stars in a short film Azagury-Partridge produced as an alternative form of advertising, which is cur-rently on her Web site. Weisz and newton are both londoners, a world apart from the Hollywood endorsement culture, which Azagury-Partridge is inching closer to with her l.A. store. “Celebrity has a very big part to play these days,” she acknowledges without saying if there’s an upside or a downside. “some celebrities have taste and some don’t, what can i say?”

the same logic applies to Asia, where every luxury company is desperate to put up a flag. Japan or China are usually the primary targets, so singapore makes an in-teresting point of entry, chosen, on one hand because labelux had a local partner to run the store, but also because “the clients tend to be more mature,” explains troncy. “it’s not like in China, buying labels. it’s not the first access to luxury they have. they appreciate craftsmanship and art, and they are collectors.”

“We had a fabulous opportunity to enter the prestigious takashimaya shopping Centre in singapore, an institution for luxury shopping,” says Mieck, adding that sAP has come in above target for the year, and more stores are in the works but as yet un-confirmed. “And we already have clients and supporters there making it an obvious destination for the brand in Asia.”

A new collection has been designed specifically for singapore — it’s a surprise. Azagury-Partridge says she has three more collections in the works, but it will be a while before they’re ready, since “a new shop is enough for a year.”

in the meantime, she has another design project to tackle: “A proper english coun-try house” with a turret and climbing Wisteria in hamlet in summerset. “it’s like doing up a doll’s house,” says Azagury-Partridge. “i wanted it all pink.”

— Jessica Iredale

WWD.COM6 WWD, TUESDAY, OCTOBER 26, 2010

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WWD Special Report

By Kristi Ellis

CARY, N.C. — Its foes have been formidable — droughts, in-sects, fickle consumer demand, attacks from other fibers, environmental groups and countries, not to mention global recessions — but Cotton Incorporated has weathered the storms over the past 40 years and positioned itself as the leading voice and advocate for the cotton industry worldwide.

Best known to the general public as the company behind the ubiquitous “The Fabric of Our Lives” ad-vertising campaign, Cotton Inc. works on behalf of cotton producers and importers of cotton products with the sole objective of increasing the demand and profitability of U.S. cotton through promotion and re-search activities.

Today, the 40-year-old company, created by an act of Congress to help farmers recapture cotton’s plummet-ing market share, has a budget of $67 million, employs 145 full-time employees, and has offices in New York, Hong Kong, Shanghai, Mexico City and Osaka, Japan.

Based here, the multifunctional organization conducts agricultural, fiber and tex-tile research and testing, and utilizes state-of-the art equipment at its headquarters. It disseminates market information and provides technical services, creates ad cam-paigns for print, TV, radio and the Internet, and provides market intelligence, fashion forecasts and retail promotions.

The company is funded by an estimated 15,000 cotton producers in the U.S., through per bale assessments, and by about 10,000 importers through assessments on imported cotton products, which is administered by the Cotton Board, a quasi-governmental, nonprofit agency. Cotton Inc. is the sole contractor for promotion and research for the Cotton Board.

Cotton Inc.’s budget is closely tied to economic cycles impacting cotton produc-tion and imports. The recession of 2009 hit the company’s budget hard this year, reducing it by $14 million to $67 million from a peak of $81 million last year, accord-

ing to J. Berrye Worsham, president and chief executive officer of Cotton Inc., during a presentation to about 75 cotton growers earlier this month.

Among its plethora of activities, Cotton Inc. conducts general education pro-grams and tours of its facilities for cotton growers four times annually, bringing in about 200 to 300 cotton farmers in any given year, Worsham said.

“Some of the prices for other crops were going through the roof, so we lost a lot of other acreage for cotton and the recession hurt the demand for cotton,”

Worsham said in a separate interview. “It was a perfect storm and it really hurt us.”The company’s staff has fallen to 145 full-time em-

ployees from a peak of 175 in 2006. But Worsham said the company’s overall budget for 2011 is projected to increase to about $71 million, and even more improve-ment is expected in 2012, based on rising cotton pric-es, higher demand, increased imports and expanded cotton acreage in the U.S. He said the advertising bud-get, which took the biggest hit this year, will receive the largest increase in 2011, while textile-related re-search for product development will receive about a $1 million boost in funding.

Cotton Inc. faces several other challenges affecting the industry, ranging from an intensifying public and business focus on cotton’s environmental impact and sustain-ability issues to increased government scrutiny of the use of formaldehyde in the process of creating wrinkle-resistant fabrics.

Reducing the environmental impact of industries through the supply chain in the U.S. and abroad has been a focus for Cotton Inc. for years, but it is increasingly de-manding more resources and research, affecting all of its divisions, from fiber compe-tition to product development and consumer marketing.

“I think the sustainability movement, or green movement, is something that is going to be growing for some time. I don’t see it diminishing at all,” said Worsham. “I think that all companies and fibers, whether you are processing a product or growing the fiber itself, will have to continue to do so sustainably. Eighty-five percent of cot-ton’s footprint comes in the textile processing of cotton. We are looking at research to

“We work with more than 1,000 companies in more than 30 countries. That is our global reach. ”

— Mark Messura, Cotton Incorporated

Keeping Cotton Growing

Continued on page 8

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try to use less water in processing, fewer dyes and less toxic chemicals. That is where we are putting a lot of our effort.”

The first step in the company’s process was dispelling what Worsham called myths about cotton’s environmental impact at the farm level.

“We knew there was a tremendous change in farm practices, particularly in the U.S. in the last decade, and cotton was being painted with the brush of the Sixties,” Worsham said. “So our first step of this process that we ramped up was to set the re-cord straight. We met with brands and retailers and talked about the facts, and we have a Web site now dedicated to that. Then we started to make sure we talked about some changes that were taking place, whether it was more efficient utilization of water in cotton production with more efficient irrigation systems, or trying to use fertilizers and nitrogen more efficiently. Anything to improve the yields is an environmental benefit because what you are able to do is get more production per unit of land.”

CONSUMER MARKETINGOne of the key pieces of Cotton Inc.’s sustainability marketing is a program called “Cotton. From Blue to Green,” launched in 2006, which through incentives encourages consumers to donate used denim items that are then converted into natural cotton fiber insulation and given to Habitat for Humanity for installation in houses rebuilt for hurricane-affected families in Louisiana.

Gap Inc. participated in the program this year, offering a 30 percent discount on a new pair of jeans in exchange for used denim and collected 249,000 pieces of denim in two and a half weeks, said Ric Hendee, senior vice president, consumer market-ing services. Cotton Inc. also works with universities to collect used denim pieces for recycling.

Hendee has faced some challenges this year with a smaller budget, which forced Cotton Inc. to forgo most print advertising.

“Our budget is way down,” Hendee told the cotton growers at the educational pre-sentation. “That is one of the reasons we have two celebrities [in the redux of its well-known “The Fabric of Our Lives” campaign] this year. We are using our money as effectively as we can and print has gone to the wayside.”

Its main marketing thrust this year centers around the next evolution of Cotton Inc.’s “The Fabric of My Life” campaign, featuring recording artists Leona Lewis and Colbie Caillat, offering their latest interpretations of the jingle. Two com-mercials were created by DDB New York and styled by Anthony Franco and showed the two singers wearing designs from Dries Van Noten, Marc Jacobs and Alexander McQueen.

“The reason we brought it back was it was a huge property for this company and a huge property with this industry,” Hendee said of the campaign. “We felt with the pas-sage of time, we could make it youthful and meaningful with young women.”

Hendee said in an interview that he is using the Internet more effectively to mar-ket cotton’s message and cutting the length of the commercials from 30 seconds to 15 seconds for more exposure, due to the budget cutbacks.

“You have to pay celebrities, but we think that we can create a greater draw through our components online,” said Hendee. “Tying in our music to the celebrity style of recording and making that available online is another way to encourage peo-ple to share the information.”

CORPORATE STRATEGY & PROGRAM METRICSKimberley Kitchings, senior director of the division, which provides market intelli-gence, disseminates the research and conducts program metrics and corporate stra-tegic research, said the unit is expanding its global reach with a sister organization, Cotton Council International.

Cotton Inc. does retail audits in the U.S. at 26 retailers, looking at more than 160,000 products to see whether cotton is maintaining its share, growing it or los-ing it. In conjunction with CCI, Cotton Inc. expanded the audits globally this year, conducting its first international audit in China earlier this year and its second in India this month.

Kitchings said they will look at 10,000 to 12,000 products in India to determine fiber content, labels, price, sales and other information, which will then be used in Cotton Inc.’s research and shared with U.S. retailers and brands. There are also plans to do audits in Japan and Europe in 2011.

Kitchings, whose division also tracks global cotton consump-tion, production and prices, said this is the sixth year of a con-sumption-production gap. This year, the world will consume four more million bales of cotton than is produced, which has deplet-ed inventories and driven up demand and prices, she said.

“We know from years of analysis that when the stock-use ratio goes below 50, we will see an upward pressure on price and we can expect that to continue in the long term,” Kitchings said.

For cotton farmers, that is welcome news, but retailers and ap-parel brands said they will have to find a way to absorb the higher raw material costs, which could be passed on to consumers.

GLOBAL SUPPLY CHAIN MARKETINGSenior vice president Mark Messura’s team focuses on reaching decision makers — retailers, brands and product developers — around the globe to influence their choice on the use of cotton in products. The company has international offices in Hong Kong, Shanghai, Osaka and Mexico City.

“We work with more than 1,000 companies in more than 30 countries,” he said. “That is our global reach.”

Big emerging markets such as Vietnam and Bangladesh, which are gaining more apparel and textile production and are strong customers of U.S. cotton, are becoming significant focus countries for Cotton Inc., Messura said.

“These are markets where we are spending more time and more of our allocation of effort,” he said. “These are markets where we work with a lot of U.S. brands and retailers and their supply chains.”

Other emerging markets include Peru, Bolivia and Colombia, which are gaining market share in apparel production and attention from U.S. brands, retailers and Cotton Inc.

“We identify leading companies in different countries and we work with them to move our innovations and carry our fabrics and trend ideas, and they go to their cus-tomers all over the world and ultimately bring cotton products all over the globe,” Messura said. “The first objective is to win the battle over synthetics. Where we can push U.S. cotton and go into markets like Vietnam and Bangladesh — very good cus-tomers of cotton, emerging buyers of U.S. cotton — we can support those buyers. We can educate them, train them and create a market to move cotton.”

CARY, N.C. — Cotton Incorporated is on the cusp of broadening the applications for one of its ground-breaking technologies, in conjunc-tion with a select group of retailers and apparel brands, and it could give synthetics a run for their money in the activewear category.

A few years ago, the company developed and launched a “moisture management” technology, known in-ternally as TransDRY, which involves yarn treatment in cotton that can be combined in various percentages to achieve a wickable finish and move the moisture away from the body outside of the fabric, according to R. Michael Tyndall, vice president of the product development and imple-mentation division, which created the technology.

“We have developed a technol-ogy that will allow cotton to help move moisture from the inside to the outside [of a garment] and thus increase its evaporative prop-erties,” Tyndall said.

The TransDRY technology has already been introduced in the marketplace in a narrow range of products. Longworth Industries, based in Candor, N.C., has in-corporated the technology in its “Polarmax” brand of cotton base-layer clothing.

Cotton Inc. has been hard at work developing new technologies to make cotton more competitive in the athleticwear and perfor-mance apparel market, which has been dominated by synthetics. The company has another tech-nology, dubbed Wicking Windows, which is applied at the fabric level to make cotton more wickable and had been used by Champion’s Double Dry line in sports bras, tank tops, T-shirts and shorts for women, as well as by Izod in its cotton knit golf shirts for women.

Now Cotton Inc. is about to take TransDRY yarn treatment to a much broader market in athleticwear.

J. Berrye Worsham, president and chief executive officer of Cotton Inc., said the company is poised to make a broader rollout of the tech-

nology in the next six months, after having worked with a

number of brands and retail-ers on a confidential basis to get the product right.

“It is designed to take cotton, which normally absorbs water, and ac-tually wick it away from

clothing so clothes stay dryer through activewear ac-

tivities,” Worsham said. “We know a big chunk of that market

is in synthetic fibers and a minority of the market is in cotton or cot-ton blends, so we think the time is right and that the market would be very receptive to 100 percent cotton products or mostly cotton products that performed.”

The “number-one impedi-ment” to the use of cotton in ath-letic and performance clothing is moisture, said Mark Messura, se-nior vice president of global sup-ply chain marketing.

“We have some major brands and retailers who are adopting our technologies and you may not hear Cotton Inc.’s name, but I guaran-tee it is our technology and what it means is that major brands will take synthetics off the market and offer cotton products,” Messura said. “More bales, more markets. That’s what it’s all about.”

— Kristi Ellis

Taking Aim At Activewear

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Caught in a Price Predicament The coTTon indusTry is baTTling sTicker shock.

global cotton prices have hit historic highs in recent months as demand for cotton has outstripped supply in most parts of the world.

raw cotton prices have been trending higher for most of this year, rising to $1.02 a pound this month compared with 59.2 cents a year earlier, accord-ing to the WWd Fiber Price sheet. on Monday, cotton futures hit a new high of $1.247 a pound on the international cotton exchange.

a number of factors have impacted the price of cotton, industry experts said, most notably shortfalls in production levels driven by a combination of weather and a loss of acreage. The increasing popularity of biofuels and high prices for other commodity crops enticed many farmers to shift from growing cotton to planting crops such as corn, soybean and wheat.

Further complicating the supply-and-demand ratio, the huge decline in demand in 2009 when the recession was at its peak also helped fuel a world-wide drop in cotton production, said Mark lange, president and chief ex-ecutive officer of the national cotton council. The rebound that followed happened more quickly than expected and caught the industry by surprise.

according to data from cotton incorporated, the cotton harvest last year was 16 million bales short of worldwide demand. This year’s harvest is ex-pected to be four million bales short. The shortfalls mean that in order to meet demand, the stocks or inventory of cotton have also been depleted, which creates additional price pressures.

The u.s. department of agriculture estimates for the 2010-11 cotton crop year, world stocks will fall to their lowest point in 14 years, around 45.4 million bales. stocks in most cotton-sup-plying countries will decline, the usda predicts, including china, the largest producer, and the u.s., the third-largest producer. The second-largest cotton producer, india, is ex-pected to see its cotton stock rise because of government-imposed restrictions on cotton exports.

“From a production standpoint, the primary issue that we’re concerned about is the sufficiency of world supply,” said Wally darneille, president and ceo of the lubbock, Tex.-based Plains cotton cooperative association. “We had prices for several years that were below the cost of produc-tion and it leads to a severe drawdown in world stocks.”

The stock drawdown fueled some of the skyrocketing prices of the last few months, he said.

While it may seem like the biggest challenge for cotton producers is “how to get a wheelbarrow big enough to haul the money to the bank, it’s a bit of a double-edged sword,” said gary raines, vice president of economics and analysis with Fcstone Fibers & Textiles.

With the endemic deflation of apparel prices at retail and higher prices at the beginning of the pipeline, someone in the middle is having their margins squeezed, he said, which can’t continue forever. if cotton prices are too far out of kilter with synthetic fiber prices, it could push textile manufacturers to shift the balance of fibers used in blended fabrics more heavily toward synthetics.

kim glas, deputy assistant secretary for textiles and apparel at the commerce department and chairman of the interagency committee for the implementation of Textile agreements, said brands and retailers say they will look to more blended fab-rics or man-made fiber fabrics for apparel, or are deciding whether to buy ahead to lock in the current price in case prices rise even further.

“Textile mills are very concerned,” glas said. “They don’t know what to do.”but rising cotton prices are a unifying issue and apparel importers are expressing

concern with high cotton prices, as well, she said.cotton is 40 cents a pound more expensive than polyester right now, which isn’t

sustainable because price differences are closely watched, said Terry Townsend, ex-ecutive director of the international cotton advisory committee.

“a few cents a pound are important, 10 cents a pound keeps people awake at night, 40 cents a pound can’t last,” Townsend said. “Prices are bound to drop.”

There is concern that extremely high cotton prices could eventually drive manu-facturers to other fibers. already some sources said they’ve heard anecdotal reports of manufacturers shifting to blends or tweaking the ratio of cotton to man-made fibers in existing blends away from cotton.

“last year we heard from member companies that they were looking at more blends or shifting the blends they were already doing for more synthetics, getting the same feel but with less cotton,” said Julia hughes, president of the u.s. association of importers of Textiles & apparel. “This year the biggest issue is price, so i have to think that more com-panies are going to be taking a look at [whether] they can shift to some other kind of blend.”

import figures continue to show a preference for cotton in the u.s. according to the most recent data available from the commerce department’s office of Textiles & apparel, imports of cotton apparel, defined as any garment with more than 50 percent of cotton in it, to the u.s. rose 8.3 percent for the year ended in august to 13.9 billion square meter equivalents, with an estimated value of $41.6 billion. Man-made fiber apparel shipments increased 12.7 percent to 9.2 billion sMe for the 12 months ended in august, worth an estimated $21.6 billion.

The cotton crop this year is an estimated 117 million bales. of that, china is ex-pected to produce 33 million bales, india 26 million bales, the u.s. 18.5 million bales and Pakistan 9.3 million bales, said kim kitchings, senior director, corporate strategy and program metrics for cotton inc.

cotton king china is also in large part responsible for the recent heavy surge in demand, with rapidly increasing cotton imports throughout 2010. The world’s larg-est clothing manufacturer doubled cotton imports in the first eight months of this year, compared with the same period a year earlier, according to the national customs agency. The spike in imports came on the heels of recovery of china’s manufacturing sector, which took a heavy hit with slowed production through the global financial cri-sis that started in late 2008. More import increases are expected in response to floods and cold weather threatening domestic crops.

Just this month, floods in china’s yellow river region, one of the country’s key cotton-growing areas, added to concerns of flooding in Pakistan of potential global shortages and price hikes in months ahead. For china, that means more pressure on its own industries, with higher raw material prices equaling higher consumer prices down the road.

The china cotton association, the country’s main industry group, said on its Web site late last month that the government may step in by easing some import restrictions

and allowing more foreign cotton in. Thus far, the chinese gov-ernment has made no formal announcements about changing regulations to increase imports for manufacturers.

Following devastating flooding over the summer that damaged the cotton crop, Pakistan’s domestic cotton prices rose 15 percent in september, in addition to higher input costs of power, finance

and taxation, leading to a corresponding 15 percent rise by yarn and garment mills in their product price this season.

There has been a quantum change in the benchmark of raw ma-terial costs, said shafqat ellahi shaikh, managing director of nagina

Mills in lahore. There was a 16 percent increase in the domestic cot-ton rate in september from $74 to $86 per maund, a unit of weight equal

to about 82 pounds.“The orders we booked in september for november delivery are 15 percent

higher in price than those booked in august for october delivery, though the seasonal cotton shortage falls in the July to september quarter,” ellahi shaikh said.

as global cotton prices surge, india is torn between supporting the interests of its farmers and its textile manufacturers. in the first two months of 2010, india surpassed the u.s. to become the second-largest cotton exporter.

india also has a vast and fast-growing domestic apparel industry, which is estimated to employ 85 million people directly and indirectly. cheap labor and the availability of abundant raw materials give india a leg up in the industry, and the indian government sees the sector as an important future employer for millions of people working in agri-culture. The majority of apparel manufactured in india, whether for the international or domestic market — both of which are growing fast — are made of cotton.

in april, under pressure from manufacturers that were seeing profits fall as do-mestic prices of cotton rose, the government imposed an export ban on raw cotton. it was lifted several weeks later, but manufacturers continue to press for a total ban. cotton farmers and exporters, meanwhile, say they should be able to sell to world markets, especially during times of global shortages when prices are high.

“i don’t expect to see the pressure from garment manufacturers ease, but farm-ers also need access to world markets,” said dhiren sheth, president of the indian cotton association.

— Liza Casabona, Mahlia S. Lone, Kathleen McLaughlin and Mian Ridge

The Fiber Price SheeTThe last Tuesday of every month, WWD publishes the current, month-ago andyear-ago fiber prices. Prices listed reflect the cost of one pound of fiberor, in the case of crude oil, one barrel.

Price on Price on Price onFiber 10/25/10 9/27/10 10/26/09

cotton $1.02 cents 88.2 cents 59.2 centsWool $3.88 $3.56 $3.45Polyester staple 78.5 cents 75.5 cents 82 centsPolyester filament 67 cents 64 cents 71 centsSeptember Synthetic PPi 108.8 109.8 114.3crude oil $81.69 $76.49 $80.50

*The Wool Price is baseD on The average Price for The Week enDeD ocT. 22 of 11 DifferenT Thicknesses of fiber, ranging from 18 microns To 30 microns, accorDing To The Woolmark co. informaTion on coTTon anD PolyesTer Pricing is ProviDeD by The consulTing firm DeWiTT & co. The synTheTic-fiber ProDucer inDex, or PPi, is comPileD by The bureau of labor sTaTisTics anD reflecTs The overall change in all synTheTic-fiber Prices. iT is noT a Price in Dollars buT a measuremenT of hoW Prices have changeD since 1982, Which haD a PPi of 100. oil Prices reflecT lasT Week’s closing Price on The neW york mercanTile exchange of fuTure conTracTs for lighT, sWeeT cruDe oil To be DelivereD nexT monTh.

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WWD, TUESDAY, OCTOBER 26, 201010

By Liza Casabona

The coTTon indusTry faced a crisis as The sixTies gave way To The seventies.

By 1975, cotton’s share of the textile marketplace had fallen to an all-time low of 34 percent, from 78 percent in 1960, as synthetic and man-made fibers made huge inroads in the fashion industry. The new synthetic fibers even threatened the historically all-cotton jeans category. fibers such as nylon, rayon and polyester had become household names, often backed by significant advertising campaigns touting their performance. Terms like “wear and wash” and “wrinkle free” associated with synthetic fibers helped erode cotton’s market share.

fast forward to 2010: cotton apparel and home fabrics now account for more than 60 percent of textile products sold at retail. a large part of that resurgence owes its success to cotton incorporated, which has seen its logo and advertising reach iconic status. in the four decades since it was found-ed, cotton inc. has used savvy marketing and innovative technology advancements to position cotton as a brand, not just an agricultural commodity.

cotton producers saw the writing on the wall in the late sixties and, enabled by the cotton research and Promotion act of 1966, commissioned the consulting firm of Booz allen hamilton to conduct a study to see if better marketing could help cotton regain its market share. in 1970, cotton inc. was born out of that study.

“The challenge was getting the industry to think of cotton as something other than yesterday’s fiber,” said J. Berrye worsham, the current president and chief executive officer of cotton inc. “it seemed like everything was going the way of synthetics.”

Today, cotton consumption in the u.s., where the lion’s share of cotton inc.’s work has been over its lifespan, on a per capita basis far exceeds any other country, said Mark Lange, president and ceo of the national cotton council, an organization that represents a broad cross section of the cotton industry.

“That speaks volumes for the success of cotton inc. in having an impact on u.s. cotton consumption,” Lange said.

in its early days, cotton inc. faced challenges throughout the supply chain. The orga-nization needed to not only sell consumers on the superior qualities of cotton, but also convince fabric mills to switch away from the easier-to-process synthetics, convince more apparel companies to manufacture cotton apparel and convince retailers to sell it.

one of the earliest tasks tackled by the organization’s staff, under its first president J. duke wooters, was creating a trademark that would speak to all those stakeholders. The company hired a san francisco-based graphic designer, walter Landor, to come up with an image that could represent cotton inc. and the commodity it was repositioning.

The resulting “seal of cotton,” introduced in 1973, still serves as the focal point for advertisements and communicates the brand identity of cotton. according to statistics from cotton inc., by the end of 1973, 18 percent of americans could iden-tify the seal of cotton with the words removed. By 2003, that number had risen to more than 80 percent.

with its new seal in hand, cotton inc. moved to establish a high-profile consumer media presence, sponsoring the 1976 winter olympics in innsbruck, austria, and launching major media tie-ins with the “Today” show in 1977. in 1980, the company launched its first Textile designer awards to recognize the creativity and functionality that designers brought to cotton apparel and textiles.

The Textile designer awards, presented 22 times be-tween 1980 and 2003, recognized designers whose work

added creative or functional attributes to cotton fab-rics. The awards were given to apparel and home

textile designers, including calvin Klein home, guess home, swift denim and haggar clothing co. award categories ranged from apparel knits, wovens, prints and novelties to bath fash-ions and home technical achievements.

industry experts agree that cotton inc.’s contributions extend beyond its marketing and promotional activities. going back to its

earliest days, cotton inc. also maintained a focus on helping the industry innovate at all

points in the supply chain, creating some impor-tant advancements.

cotton inc. established a research dyeing and finish-ing lab in 1975 to work on developing new cotton products. in 1982, the organization unveiled the engineered fiber selection system, a group of software programs that allowed

for greater precision in processing cotton and selecting for the highest quality. The software system used data generated by u.s. department of agriculture technology introduced in the mid-seventies that rapidly determined the properties of cotton bales and offered detailed information about factors affecting the quality of the cotton.

as a natural fiber, cotton has had to compete against the aura and special prop-erties of synthetics over the years. in the forties and fifties, nylon was the “magic miracle fiber.” in the sixties, polyester was seen as modern and superior, said norma

40cotton

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Forty Years Cultivating the Industry

1966: cotton research and Promotion act passes congress, establishing funding from producer assessments aimed at conducting a campaign to recapture cotton’s market share.

1970: cotton incorporated is created.

1973: The iconic “seal of cotton” is introduced.

1976: cotton inc. sponsors the winter olympic games.

1980: cotton inc. hosts the first Textile designer awards in new york. The awards recognize designers’ abilities to add creativity and functionality to cotton apparel and home textiles.

1982: engineered fiber system launches. it is a group of software programs, still in wide use today, that allow for greater precision in processing cotton and selecting for the highest quality fibers.

1982: cotton inc. opens offices in London and osaka, Japan.

1987: cotton inc. introduces wrinkle-resistant technology. farah is the first company to market it.

1987: cotton inc. opens an office in singapore.

1989: “The fabric of our Lives” advertising campaign launches, with the jingle sung by popular musician richie havens.

1993: cotton inc. forges a marketing partnership with Procter & gamble co. to display the seal of cotton trademark on laundry detergents.TIM

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WWD Special Report

WWD.COMWWD, TUESDAY, OCTOBER 26, 2010 11

After more thAn two decAdes with cotton incorporAted, former president and chief executive officer J. nicholas hahn is still a cotton guy.

everything he is wearing in a recent photo, where he casually leans against a truck in jeans and a red shirt, is 100 percent cotton, he is quick to point out. it’s a scenario that 40 years ago was not a certainty.

“in the late sixties and early seventies, the cotton industry was getting their lunch eaten by the synthetic fiber industry,” hahn said.

over the next four decades, cotton inc. would stop and then reverse cotton’s loss of market share and establish itself as the front-runner in agricultural com-modity marketing, funding and researching in the U.s., he said.

many of cotton inc.’s successes can be attributed to its innovative marketing and advertising push to rebrand cotton as more than just a commodity, a vision laid out by the organization’s first president, J. dukes wooters, and carried on by hahn and other successors.

during hahn’s tenure from 1982 until 1997, when he left the organization to start a consulting firm, cotton inc. rolled out some of its most memorable programs. hahn said he is particularly proud of the iconic “the fabric of our Lives” advertisements that launched in 1989 and a marketing partnership with procter & Gamble co.’s tide, cheer and ivory snow brand laundry detergents that started in 1993.

But it is “the fabric of our Lives” campaign, conceived with the help of the organization’s creative agency ogilvy & mather, that most people remember, hahn said.

“even today i’ll bump into people and they’ll sing that song. it’s imbedded it-self in their memories,” hahn said of the campaign, which produced cotton inc.’s iconic “the touch, the feel of cotton, the fabric of our lives” slogan.

wooters brought hahn into the organization in its earliest days, hiring him in 1971 to establish the group’s offices in Los Angeles and houston. Later hahn would return to new York to serve as vice president of marketing and briefly as chief operating officer before eventually becoming president and ceo.

natural fiber and textiles were in hahn’s dnA: his family had been in the woolen industry, and when he was hired by cotton inc. he was working with dan river mills in new York.

the early days with cotton inc. were exciting because the organization was run like a start-up, hahn said. there was a board made up of cotton producers, but the organization enjoyed a fair amount of independence, he said.

“none of this could’ve happened without the support of the farmers,” he said. “if they’d tried to micromanage this thing, if they’d tried to shackle us, none of this would have happened. the farmers fundamentally get the credit for giving us the freedom to put the program on the map.”

communicating successfully with the farmers about what cotton inc. was doing was important, he said.

one of cotton inc.’s strengths, hahn said, lay in its willingness to take risks and the ability to use its marketing budget as creatively as possible. the organiza-tion had a long association with the “today” show as an advertiser and sponsor of willard scott’s weather segments. cotton inc. executives got to know the talent on the show, like hosts Barbara walters and Katie couric, as well as scott.

hahn said cotton inc. did some custom tailoring to outfit scott in cotton and he would often talk about the garments on-air.

“editorial mentions are always more powerful than paid advertising,” hahn said. “You can’t buy that.”

those days with cotton inc. were high energy and fun, hahn said.“it was wild and wonderful, and we got some good stuff done,” he said, call-

ing his tenure with cotton inc. the most exciting period of his professional career.“cotton inc. set the standard for agricultural commodity marketing,” hahn

said. “its legacy is the fact that people see that trademark [the seal of cotton] on a towel, a shirt or a pair of jeans and it resonates with them. they know what it means. they remember ‘the fabric of our lives.’ that’s my legacy, that’s what i’m most proud of and it will live way past me. i’m proud of the whole organization.”

— L.C.

Hahn Looks BackKeyes, director of product standards.Keyes, who has been with Cotton Inc. for

39 years since starting as a lab technician out of college, said Cotton Inc. worked to promote the technical advances and performance abili-ties of cotton fabrics in many ways, including bringing flame-retardant cotton to the National Aeronautics and Space Administration’s program.

In January 1979, following three years of re-search and work, Cotton Inc. announced that “America’s astronauts are now wearing all-cotton, flame-retardant flight suits,” according to a press release at that time. The organiza-tion touted the fact that NASA’s use of cotton proved that cotton was functional, protective and comfortable. Later press materials herald-ed “flame-resistant cotton safety apparel worn around and out of this world.”

“There’s a real balancing act to bringing the attributes that consumers or businesses or spe-cific jobs need in their clothing and apparel,” Keyes said.

The organization also worked to bring to market some of the early blended fabrics con-taining cotton and synthetics, Keyes said. The trademarked “Natural Blend,” a 60-40 cotton blend, was introduced in the mid-Seventies.

In its earliest days, Cotton Inc. worked with Texas A&M University to develop a ma-chine called a module builder, said Charles B. Robb, vice president of communications for the Memphis-based Cotton Board, a quasi-gov-ernmental, nonprofit group that administers the Cotton Research and Promotion Program that includes Cotton Inc. The Cotton Board is

funded by cotton producers and importers.A module builder takes cotton as it’s picked

and compresses it into enormous blocks that hold 14,000- to 16,500-pound bales of cotton each. The loaf-shaped modules are covered with a tarp until they are taken to the cotton gin. Prior to the development, cotton often sat exposed to the elements and temperature fluc-tuations while waiting at the cotton gin, which degraded the quality of the cotton, Robb said.

“If one thing revolutionized cotton pro-duction in the last 40 years it was the module builder,” Robb said.

In 1987, Cotton Inc. introduced a techno-logical development that would have a great impact on apparel — the first wrinkle-resistant cotton. It was adopted first by Farah. The new “permanent press” development countered one of the popular claims of synthetic fibers that had lured consumers away.

In 1989, Cotton Inc. further entrenched it-self in consumers’ minds when it rolled out the first “The Fabric of Our Lives” ads on Thanksgiving Day, with Richie Havens singing the soon to be iconic line, “The touch, the feel of cotton, the fabric of our lives.”

Over the years Cotton Inc. has spent around

$300 million on “The Fabric of Our Lives” cam-paign, Worsham estimated. After a hiatus, the organization recently relaunched it. In 2009, a series of commercials aired featuring up-and-coming musical artists like Zooey Deschanel, Jazmine Sullivan and Miranda Lambert, who each reinterpreted the music and lyrics. The most recent iteration of the campaign current-ly airing on television, called “The Fabric of My Life,” launched earlier this year and fea-tured Leona Lewis and Colbie Caillat.

The company’s approach changed how ag-ricultural commodities were marketed, said J. Nicholas Hahn, a former president and ceo of the organization, who spent more than two de-cades there. The California Raisin campaign, the Got Milk ads and others advertising every-thing from eggs to beef followed after Cotton Inc.’s advertising campaigns, he noted.

Cotton Inc.’s focus on the end consumer of cotton eventually lead to the first publica-tion in 1994 of The Lifestyle Monitor Survey, a research program that tracks consumer atti-tudes about everything from fiber preferences to fashion and shopping.

“One thing that makes Cotton Inc. so suc-cessful is they combine more than one aspect of what companies care about: information about cotton itself, the prices and availability of raw cotton, as well as information through the supply chain and promotion direct to consum-ers,” said Julia Hughes, president of the U.S. Association of Importers of Textiles & Apparel.

As textile and apparel industries grew in-creasingly global over the last two decades, so

did the scope of Cotton Inc. The organization opened its first overseas offices in London and Osaka, Japan, in 1982. That was quickly fol-lowed by offices in Mexico City and Shanghai. In 2002, the company developed a marketing campaign for India called the Cotton Gold Alliance, further expanding its marketing reach abroad and using the Seal of Cotton for the first time outside of the Americas in a consumer promotion. Today, the company has offices in Cary, N.C., New York, Mexico City, Shanghai, Hong Kong and Osaka.

A global footprint is even more critical today, Worsham said. As the domestic textile industry has shrunk, it “has gone from being important to being an absolute necessity for the survival of the U.S. industry,” he said.

The ability to think ahead and continued advocacy for the industry have been the hall-mark of the organization for 40 years, industry insiders said. Its innovative approach helped bring the industry back from the brink.

“If it hadn’t been for what Cotton Inc. did for cotton farmers all over the world, we’d all be wearing polyester leisure suits,” said Wally Darneille, president and ceo of the Plains Cotton Cooperative Association in Lubbock, Tex.

1994: Cotton Inc. launches The Lifestyle Monitor Survey and moves into field of consumer research.

1996: Cotton Inc. opens its Mexico City office.

1997: Cotton Inc. opens its Shanghai office to service mills, manufacturers and retailers in China that use U.S. cotton, illustrating how global the cotton market has become.

2000: Cotton Inc. moves into a new state-of-the-art facility in Cary, N.C.

2002: Cotton Inc. develops a marketing campaign for India called the Cotton Gold Alliance, further expanding its global reach.

2010: Cotton Inc. celebrates its 40th anniversary and introduces “The Fabric of Our Lives” ad campaign with singers Leona Lewis and Colbie Caillat giving new twists to the famous jingle.

The cotton module modernized production methods.The cotton module modernized production methods.

J. Nicholas Hahn

WWD.COMWWD, TUESDAY, OCTOBER 26, 201012

WWD Special Report

Creating Cotton’s Image“The Fabric of Our Lives” campaign has reached iconic status since it was created in 1989. Here, some of the ads.

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WWD.COM

By Alexandra Steigrad

NEW YORK — From Wal-Mart Stores Inc. to The Walt Disney Co.’s Disney stores, more companies are adding environmentally friendly merchandise to their shelves in an effort to connect with shop-pers, experts said.

They spoke at a roundtable, “A Focus on Greening the Supply Chain,” put on by the International Oeko-Tex Association and Textile Insight at the DuPont Corian Design Studio here on Sept. 24.

Caterina Conti, executive vice president, chief admin-istrative officer and general counsel for Anvil Knitwear Inc., said her company em-braces Oeko-Tex’s environ-mental certification and also makes an eco collection of or-ganic and transitional cotton.

“People are asking for [green products], they are not asking about price,” she said, acknowledging that costs tend to be slightly higher. “Companies are looking to align their brand with a product that adds value to their brand.”

Recently, The Walt Disney Co. converted its graphic T-shirt program in all 200 Disney stores to organic cot-ton, Conti said, pointing to the Anvil licensee as a company that establishes a relationship with its customers by communicating the signifi-cance of choosing an eco-friendly product.

Like Disney, Anvil engages customers by al-lowing them to track newly purchased T-shirts at trackmyt.com, a Web site that follows the order from the farm to the distribution center.

The term “green” is usually met with “opposi-tion or confusion,” said Blink Dina Dunn, interna-tional communications manager at International Oeko-Tex. One way to “cut through” the uncer-tainty is with eco-certification that ensures that textiles are free from harmful levels of more than 100 potentially dangerous substances.

With its “criteria catalogue,” called the Oeko-Tex Standard 100, the company tests textiles for a variety of “harmful substances,” as textiles travel through various stages of the supply chain, Dunn said, explaining that this provides consumers with “uniform” certification and helps “clean up the supply chain.”

Traceability of products engages the con-sumer and adds accountability to the manufac-turer and retailer, according to Australian-based

NewMerino, which traces and manages the production of Australian wool from the farm to the store.

Denine Woodrow, the owner and manager of DP Woodrow & Co. and U.S. representative for NewMerino, said, “Part of the process is about engag-ing farmers and connecting them with retailers.”

Knowing where the prod-uct has been and where it is going enhances its value, she said, noting that this is espe-cially true with wool because retailers are “increasingly sensitive” that they are pur-chasing “un-mulesed wool.” Mulesing, which is often practiced by Australian farm-ers, is the surgical removal of pieces of skin around the tail of a sheep to prevent “flys-trike,” or flies laying eggs in

the area leading to infestation.NewMerino allows retailers to track their wool

shipments all the way back to the sheep, Woodrow said, adding, “Some brands are naming the sheep so they can tell their stories online to consumers.”

Although many of these technologies require additional investment, panelists agreed that they involve the consumer in a unique way, which is beneficial in an environment where most shoppers are limiting their purchases, Anvil’s Conti said.

“Marketing teams can build a platform around sustainability, she said. “You develop more value if you start at the design level. It’s an opportunity.”

Roundtable Discusses Emergence of Sustainable Items

Anvil’s plastic bottle T-shirt.

WWD, TUESDAY, OCTOBER 26, 2010 13

By David Moin

“CURvY BOMBSheLL GIRLS ARe GOING TO Be The ‘IT’ girls of the future.”

That forecast came from Cookie Johnson, founder of the C.J. by Cookie Johnson premium denim brand for shapelier women, who put a light spin on her otherwise serious message about the Black Retail Action Group. She received the J.J. Thomas Business Innovators Award from BRAG at Friday’s gala in Manhattan celebrating the organization’s 40th anniversary.

Johnson told how BRAG shaped her life by providing an in-ternship at Dayton hudson, and supporting her retail studies at Michigan State University. “It was something great to put on my résumé. If I hadn’t had that help in the beginning, I wouldn’t be standing here tonight,” she said. While commending BRAG, she discussed starting her business in response to an industry prone to making jeans “for that one body type.…Why can’t we look styl-ish just because we have curves?”

Tyson Beckford, who received a special recognition award, said he wished he had an organization such as BRAG in his life as a troubled youth. “When I first started in fashion, I was just some kid trying to make some money and get off the streets. It’s very important for young black youths to realize there are ways of getting out of the ’hood,” said Beckford, who was reluctant to be photographed by the paparazzi at the party but did say he would take care of “all the ladies” who wanted to be photographed with him. “We’ll get Cipriani to set up some sort of photo booth.”

Michelle ebanks, president of essence Communications, accepting BRAG’s corporate award, called the organization a true inspirer, while BRAG achievement awards were given to Tommy hilfiger; Larry Barkley, Tourneau’s senior vice presi-dent of retail, and Delena Sunday, Nordstrom Inc.’s executive vice president of human resources. Sunday characterized Blake Nordstrom, president of Nordstrom, as a mentor and “probably the hardest working person I know. he continually coaches you.”

BRAG president Gary Lampley set the tone for the evening, en-couraging involvement in BRAG’s mission. “For 40 years, BRAG has addressed the notion of how important it is to embrace everyone in totality brilliantly,” Lampley said. “The organization has recon-ceptualized what has been called the mainstream by looking at how diversity contributes to the organization of society and this industry. how supplier diversity can contribute to increased business. how to market to ethnically diverse consumers and how to successfully recruit, retain, develop and promote diverse individuals.”

And Lampley conveyed some personal feelings to the crowd, saying that, as the organization’s sixth president, he experiences “a breadth of emotions” including “sheer delight knowing that I do stand for something.” For a nation with a black President yet with an identity “marred because of chattel slavery, surely you all know by now that anything is possible.”

The event, at Cipriani Wall Street, distributed 32 scholarships to students and BRAG commemorative books with four decades of photos, and drew 550 people including Guy vickers, president of the Tommy hilfiger Foundation; Michael MacMillian, presi-dent of Marmaxx; Mike vitelli, president of the Americas, Best Buy Co. Inc.; Ron Onorato, president of Stop & Shop New York metro division, and Richard Dent 3rd, senior vice president chief operating officer and co-leader victoria’s Secret Pink.

Green Report

By Jennifer Cardenas

HONG KONG — Mounting raw material costs loomed large at Interstoff Asia essential.

The three-day fair, which ran from Oct. 6 to 8, attracted 250 exhibitors from 12 countries and re-gions. Textile exports from hong Kong slid 19 per-cent in 2009, but they experienced a growth of 14 percent during the first five months of this year to 34.9 billion hong Kong dollars, or $4.5 billion, ac-cording to the hong Kong Development Council. Just over 70 percent of those exports are destined for Mainland China.

But not all textile suppliers are lamenting the high prices of raw materials. For some, “rising costs can mean higher margins,” said Kowen Tam, yarn sales executive at Yagi & Co.

The firm, which produces recycled and organic cotton, has doubled its prices since last year, but Tam said business is booming.

“There has been an increase in demand for eco-friendly textiles over the past two years, es-pecially in the U.S, market, where we do the bulk of our business,” Tam said. “We are confident in our product and there will always be buyers. We buy our materials in large quantities and by the time we have inventory in our hands, cotton pric-es have already increased again, so we can charge our customers more. We can only expect, though, at some point, the prices will have to drop.”

Arum Shraff, director of Indian-based silk ex-porting company JJ exporters Ltd., said this was the first time he had shown at Interstoff in hong Kong for several years due to the recession.

“We have seen a slight increase in growth from our Taiwan customers in the first half of the year, so we thought we would have better luck focusing on Asia instead of the U.S. and european markets, which are still very slow for us. But so far the out-look does not seem good,” he said.

The continual rise in silk prices has affected his export business as customers are shying away

from silk fabrics. To counter this, Shraff said he has begun mixing other yarns with silk to bring costs down.

This strategy was adopted by several firms in-cluding Shanghai-based silk and velvet manufac-turer hansun Textile Co. Ltd. executive director Janet Zhang said that although business has im-proved in comparison to last year, the rise in raw material costs has put pressure on the company. Zhang said hansun was reluctant to increase prices too much. So the firm began to offer poly-ester and silk blends as an alternative to price-conscious buyers.

It was a similar story at Cone Denim, a sup-plier to brands such as Levi’s and Gap. According to product development manager Kelvin Sin, the company has been forced to increase prices by 30 percent compared to the same time last year.

“We have no choice but to off-load costs to buy-ers,” Sin said. “Clients don’t necessarily accept the spike in price but they know this is the situa-tion worldwide. Luckily, we have built a good cus-tomer base that need high quality product so they have no choice, either.”

Trendwise, Interstoff offered an abundance of antique style lace and fluid fabrics such as silk blends, viscose and cupro. Three-dimensional textures like velvet and shimmery knits were also present. The color palette included nude skin tones, smoky grays, black, fuchsia and burgundy.

But cost remains at the forefront of all purchases.Fabric merchandiser Pinky Pan from Brixon

Overseas Ltd., a hong Kong-based garment sup-plier, was looking for cotton and knit fabrics for women’s wear. She said she would concentrate on sourcing from small Mainland Chinese mills.

“In my experience, young developing mills in China normally equate to more basic production methods, which mean cheaper prices,” Pan said. “exhibitors from Japan and South Korea are too expensive, as they use advanced technology in creating the fabrics.”

Material Costs the Talk at Interstoff

BRAG Fetes 40thph

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Delena Sunday, C.J. Johnson and Gary LampleyDelena Sunday, C.J. Johnson and Gary Lampley

Tommy and Dee Hilfiger

Blake Nordstrom

For more images, see WWD.com.

WWD.COMWWD, TUESDAY, OCTOBER 26, 201014

By Amanda Kaiser

TOKYO — Japan Fashion Week closed its five-day run on Friday with its usual mix of styles, but the shows attracted fewer international buyers than past editions.

In terms of attendance, 15,951 people attended the week’s official on-calendar shows and pre-sentations. That figure represents a 4.2 percent increase from last year but a decrease of 10.5 per-cent from the fall shows in March. JFW organiz-ers blamed the drop from March on the fact that there were nine fewer runway shows this time around. Perhaps more significantly, the number of registered international buyers also took a hit. Only 50 foreign buyers came this season com-pared with 62 in March and 125 in October.

Nobuyuki Ota, chief of JFW’s collection project com-mittee, said the ongoing po-litical tensions between China and Japan might have had a “little influence” on the event.

“It must be harder than be-fore for the buyers of Chinese select shops to keep carrying Japanese labels because of the students’ political demonstra-tion around the nation,” he said, adding that, on his trips to China so far this year, he’s seen more Japanese brands in Chinese stores than ever. “This political situation will come down. I believe that JFW is able to get more Asian buyers without doubt.”

Ota also gave a second rea-son for the drop. As foreign buyers become more familiar with the market and the indi-vidual brands, they opt out of official registration with JFW and proceed directly to the showroom to place their or-ders, he said.

Many JFW designers still do the bulk of their busi-ness in Japan, a market that has been struggling in recent years as consumers spend less on apparel and accessories in the face of economic stagna-tion. Textile and apparel ex-ports are still relatively small change compared to Japan’s other industries like cars and electronics, but they have posted growth so far this year. Japan’s apparel exports from January through August rose 5.5 percent to $247.27 million, according to data from Japan’s Ministry of Economy, Trade and Industry. Over the same period, textile exports grew 1.4 percent to $1.69 billion.

Some of JFW’s highlights included:

• Theatre Products’ deli-cate prints reminiscent of Georges Seurat paintings and long, tiered dresses in tulle.

• Fur Fur’s bizarre show featuring Peanuts characters, padded derrieres, throw pil-lows and sculptured hair that would make Princess Leia look restrained.

• Bortsprungt’s girly dress-es with handkerchief hems and a skirt featuring a print of wrapped candies.

• Phenomenon’s long wrap skirts for men. There was also a jacket with inflatable lapels and some unique takes on military khakis covered in puffy pockets.

• Yoshio Kubo’s edgy takes on men’s suits, nylon jackets, strappy pants and zippered em-bellishments.

The feedback from buyers was largely positive. “The scale seems smaller than last time be-

cause many big brands didn’t [participate] this season,” said Joe Lee, merchandising director for Hong Kong-based I.T. Group, who added Phenomenon was her favorite this season.

It’s true that some of Tokyo’s more estab-lished brands opted to show either before or after the official JFW dates, as was the case

with Mint Designs and Dresscamp. Meanwhile, men’s labels John Lawrence Sullivan and N.Hoolywood have since decamped to Paris and New York to present their collections.

Shinji Nakakita, a women’s buyer at Isetan, said he did not attend many shows this season and preferred to do his buying at showroom ap-pointments. He said his budget has increased slightly overall but it is pretty much the same as last season.

“I think [the season] was pretty good. The economy has bounced back a little, and there was a cheerful feeling overall,” he said. “Each designer seemed to take on new challenges, making their own creations. The clothes were less ‘real’ and had more of a story to them.”

Haru Suzuki, women’s fashion merchandiser at Barneys New York Japan, said she only attended two runway shows this season, G.V.G.V. and Matohu, but did some buying through appointments at show-rooms. She applauded the over-all organization of Rooms Link, a trade show and exhibition space that also served as venue for some of the runway shows.

“Rooms Link is one of the strongest trade shows in Japan right now, so it’s good that they cooperated [with Japan Fashion Week],” she said.

Suzuki said Barneys has increased its budget for Japanese designers signifi-cantly over the past few sea-sons but it’s about the same for spring as it was for fall. She said she liked Yoshio Kubo’s emphasis on patterns and sil-houettes in men’s wear.

Miyako Sekimoto, fashion director at Matsuya, said that she felt the overall quality of the collections improved from the previous season but la-mented the fact that she can’t allocate more of her budget to Tokyo designers. “We’d like to in the future,” she said, add-ing that Mint Designs has per-formed well at the Ginza store.

She also said she was impressed with Beautiful People’s unique presentation, in which models posed at vari-ous points around the Tokyo Midtown shopping center, al-lowing passersby to view the clothes. Sekimoto cited other brands’ attempts to reach final consumers during the week. Liz Lisa and Vanquish, two streetwear labels with accessi-ble price points, packed their venues with customers.

This season was a transi-tional one for Japan Fashion Week, which is gradually weaning itself off government funding and turning to private sponsors. This summer, IMG Fashion inked a five-year part-nership with JFW to handle all sponsorship rights for the event. Peter Levy, senior vice president and managing direc-tor of IMG Fashion worldwide, made his first trip to JFW this season and said he was im-

pressed with the talent of the designers as well as with the overall energy level and organiza-tion of the shows.

Levy, who declined to give fund-raising tar-gets, said IMG wants to bridge art and com-merce in a nonintrusive way and give designers the means to put on high-quality shows by hir-ing the right models, stylists and other essential players. But he stressed that obtaining sponsors will be a gradual process and it’s too soon to say what the fall shows in March will be like.

“I think you also need to…really figure out how a fashion week anchors a fashionable mind-set in a city at any one time. Everybody — especially in a city like this — should have an awareness that something very magical and something special is happening,” he said.

— With contributions from Kelly Wetherille

By Lisa Lockwood

The Jones Group has tapped two new chief merchandising officers.Rodney Hutton has been named chief merchandising officer of

Anne Klein Brands, and Daniela Bocresion has joined as chief mer-chandising officer of Rachel Roy Brands. Both executives report to Susan Metzger, chief executive officer of women’s wholesale sports-wear for Jones.

In his new post, Hutton will oversee all merchandising activities for production, sales, marketing and design for Anne Klein Brands, which consist of the Anne Klein New York bridge collection and AK Anne Klein better line. Earlier, he was principal at Fashion Iconic LLC, a brand strategic development consultancy. Before that, he held mer-chant posts at Karl Lagerfeld and Giorgio Armani Corp. U.S.A.

Bocresion, in her new role, will supervise merchandising activities for production, sales, marketing and design for both Rachel Roy and Rachel Rachel Roy. Most recently, she was senior vice president of merchandising and marketing at Lacoste USA, overseeing merchan-dising and visual activities in wholesale, retail and e-commerce for women’s, men’s, children’s and licensed products. Earlier, she held various posts in production management and product development. She began her career at Ann Taylor, where she was part of the team that launched Ann Taylor Loft.

By Joelle Diderich

PARIS — Puma AG said Monday it was taking legal action against its Greek joint venture partner and the former managers of the unit after discovering irregularities in its accounts that will cost it up to 130 mil-lion euros, or $181.39 million at current exchange rates, in one-off charges and write-offs.

The German activewear firm, a division of French retail-to-luxury group PPR, said it has launched an independent audit, appointed new local management and put a stop to the fraud at Puma Hellas SA.

“According to the preliminary findings of the audit, it is suspected that the Greek joint venture partner, along with members of the Greek local management, has committed a series of criminal acts,” it said.

“Puma AG’s management and supervisory board have resolved to assert all claims according to civil and criminal law against the Greek joint venture minority partner and members of the local Greek man-agement,” the company added.

Puma, which will release its third-quarter results today, said that as a result, it would book an extraordinary write-off of 115 million euros, or $160.46 million, before taxes. This would force it to restate figures for prior fiscal years, but would not affect the cash position, it explained.

The impact on 2010 data was estimated at up to 15 million euros, or $20.9 million, to be booked in the fourth quarter. In addition, the company is planning a restructuring in Greece due to the irregulari-ties and the general market situation, which could lead to additional one-time charges of around 15 million euros.

Puma said last week that its chief executive officer, Jochen Zeitz, would step down to head a new sport and lifestyle division at parent company PPR. The company is today expected to provide details of its five-year strategic plan to grow total revenues from about 2.5 bil-lion euros, or $3.49 billion at current exchange rates, to about 4 billion euros, or $5.59 billion, by 2015.

Separately, PPR said the fraud should have a retroactive impact of 70 million euros, or $97.7 million, on shareholders’ equity as of Jan. 1, 2010. Meanwhile, net income for 2010 should take a 20 million euro, or $27.9 million, hit.

Jones Taps Merchants

RETAIL STOCKS LOGGED THEIR FOURTH STRAIGHT DAY OF increases Monday as investors bet on positive earnings results and more moves by the Federal Reserve to support the stalled economic recovery.

The S&P Retail Index rose 1.86 points, or 0.4 percent, to 471.23, its highest close since May 12, outpacing the 31.49 point, or 0.3 per-cent, pickup by the Dow Jones Industrial Average to 11,164.05. The S&P 500 rose 2.54 points, or 0.2 percent, to 1,185.62, while the Nasdaq Composite boasted the strongest results among the major indices, ris-ing 11.46, or 0.5 percent, to 2,490.85.

Among issues recently showing up on big investors’ radar screens, shares of Saks Inc. rose 1.9 percent to close at $10.93 after hitting $11.32 earlier in the session, its highest level in more than two years, and J.C. Penney Co. Inc.’s shares were up 0.5 percent to $32.70. Last week, Diego Della Valle, chairman and chief executive offi-cer of Tod’s SpA, boosted his stake in Saks to 19.1 percent. William Ackman’s Pershing Square Capital Management joined with Vornado Realty Trust a week earlier to secure a combined 26.4 percent stake in Penney’s.

Shares of Kenneth Cole Productions Inc. receded 3.6 percent to $14.26 on word in The New York Times’ DealBook blog that negotia-tions for the firm to be acquired by Iconix Brand Group Inc. appear to have stalled. The stock peaked at $22 on Sept. 17 when reports of a possible deal between the two firms, led respectively by brothers Kenneth Cole and Neil Cole, first surfaced.

— Arnold J. Karr

For full runs of show from Japan Fashion Week, see WWD.com/fashion-shows-reviews.

Puma to Sue Greek Partner

Retail Shares Tick Ahead

Quieter Japan Fashion Week Comes to Close

Yoshio Kubo

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WWD.COMWWD, TUESDAY, OCTOBER 26, 2010 15

FASHION SCOOPS

TRAVELING TAHARI: Elie Tahari has cut so many ribbons of late it must only be a matter of time before he designs his own pair of scissors. Late last month, the designer opened a store at Fashion Island in Newport Beach, Calif., with a party hosted by Jonathan Adler and

Lara Spencer. While there, he engaged

in some personal retail therapy by shopping for midcentury furniture and also staged a fashion show at Saks Fifth Avenue in Beverly Hills, followed by a Virginia Madsen-hosted dinner at Sunset Tower. “California is like our second home,” Tahari said at Saks. “This is the state where we have the most customers after New York.”

With little time to nurse his jet lag, Tahari hopped to London to check out his new Harrods shop, then headed to Istanbul to fete his first store there earlier this month. He made a stop in his native Israel before coming back to New York for the official opening of his new Saks boutique with co-host Katie Cassidy last Tuesday. Tahari showed no signs of travel fatigue. “I am telling people that my passport is my new fashion accessory,” he said.

CERRUTI SUITOR: Chinese men’s wear giant Trinity Group is working on a deal to acquire Paris-based fashion house Cerruti, WWD has learned. According to market sources, Trinity — which holds the license to distribute Cerruti 1881 men’s wear in Greater China — is in talks to purchase the group from U.S. private equity firm MatlinPatterson.

Asked to comment on the speculation, Sunny Wong, Trinity’s group managing director, replied, “Trinity is always looking for new opportunities and alliances to improve shareholders value.”

Officials at MatlinPatterson did not respond to requests for comment, while a spokeswoman for Cerruti said she could neither confirm nor deny any imminent transaction.

Trinity Group was listed on the Hong Kong Stock Exchange in November 2009. It is a member of the Li & Fung Group, which acquired the company in 2006.

KITSON SUES: Kitson is fighting back against Majestic Mills. The retailer has countersued the manufacturer of Nicole Richie’s Winter Kate clothing line, which launched a lawsuit in August claiming Kitson owed $225,000 worth of vests, dresses, cardigans and more.

In documents filed with the Los Angeles County Superior Court, Kitson argues that Majestic Mills’ failure to secure Richie for an appearance at a launch party for Winter Kate clothes and House of Harlow 1960 shoes deprived the retailer of profits in excess of $500,000. Kitson also asserts it was forced to take markdowns on Winter Kate goods when the brand was provided to competitors at cheaper prices.

Perhaps Kitson would have had better luck if Richie did children’s clothes. The retailer, which already has a 7,500-square-foot store in Santa Monica Place, is opening a roughly

2,500-square-foot kids’ store at the recently revamped shopping center on Nov. 15. “The kids’ business is doing better than women’s,” said Kitson owner Fraser Ross. “All these 12-year-olds want to look like Justin Bieber.”

LIVING LARGE: Hollywood is set to hit Rome later this week for the city’s fifth international film festival that kicks off Thursday. As part of the festival, Gucci together with Martin Scorsese and The Film Foundation — a nonprofit organization founded in 1990 by the director dedicated to preserving and restoring classic films — are set to present the world restoration premiere of Federico Fellini’s 1960 classic “La Dolce Vita” on Saturday evening.

After the screening, Gucci creative director Frida Giannini will fete the film’s 50th anniversary with guests expected to include Scorsese, Dante Ferretti, James Franco, Guillaume Canet, Charlotte Casiraghi and Eva Mendes. To date, Gucci has supported the restoration of six classic films and donated a total of $1.5 million to The Film Foundation.

HARVEY NICHOLS SETS HONG KONG FLAGSHIP: Harvey Nichols is building its presence in Hong Kong. In October 2011, the department store group will open an 83,000-square-foot flagship for Asia-Pacific in the Pacific Place development in Hong Kong, Harvey Nichols owner Dickson Concepts said. The Harvey Nichols store will occupy the site where the Hong Kong Seibu store stands, and whose lease expires in June 2011. The store will add to Harvey Nichols’ existing Hong Kong store at the Landmark Center.

The Pacific Place store will be designed by London interior design company Four IV, who have worked on a number of Harvey Nichols stores in the U.K. and Turkey. Outside the U.K., Harvey Nichols has stores in Turkey, Dubai, Saudi Arabia and Indonesia.

WEDDING PARTY: Typically, New York is ahead of the trend, if not setting it. But when it comes to legalizing gay marriage, the state is a little behind — behind five states and the District of Columbia to be exact. So on Wednesday night, Cornelia Guest and André Balazs are putting The

Boom Boom Room to good use and hosting a fund-raiser along with New Yorkers for Marriage Equality to benefit HRC Campaign for New York Marriage. And because a little celeb endorsement never hurts, the organization has filmed 20-second spots, available on its Web site, with stars from Kevin Bacon and Mark Ruffalo to David Chang and Tom Colicchio stating, “I am a New Yorker and I support marriage equality.” Let the wedding bells ring. OUT AND ABOUT: The Hollywood elite crowded the ballroom of the Beverly Hilton Saturday night for the 32nd biannual Carousel of Hope Ball, and despite the gravity of the charity — $2.5 million was raised for the Barbara Davis Center for Childhood Diabetes — the evening was still completely entertaining. Guests including honorees Maria Shriver and Quincy Jones, as well as Tom Hanks, Rita Wilson, Halle Berry and Adrien Brody watched as Jennifer Lopez sang “Let’s Get Loud” at the request of Randy Jackson. Later, rapper Akon wowed the crowd when he dedicated his hit “Sexy B----” to hostess and septuagenarian Barbara Davis. Rod Stewart and Clive Davis got a kick out of it and danced along to the song.

But if Barbara is a “sexy b---” where does that leave someone like Jane Fonda? “I came to support Barbara,” said Fonda, a longtime friend of Davis’. “But I also came because it’s a great party!”

Tahari’s new boutique in Istanbul.

Elie Tahari with Lara Spencer in California.

Jennifer Lopez

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