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ndDAILY EDITION 5 AUGUST 2016 1

Fashion. Beauty. Business.

Carrigan to ExitKevin Carrigan has resigned as global creative director of Calvin Klein Inc. PAGE 3

All That GlittersPat McGrath enters the lip category with her own brand, which includes ultrafine glitter. PAGE 7

Men’s swimwear for spring has a strong Nineties vibe, emphasizing eye-popping fluorescents in shorter styles, including trunks and briefs. Here, EA7’s neon nylon briefs and Orlebar Brown’s red polyamide trunks. Nektar De Stagni necklaces; Oakley sunglasses. For more on the trend, see pages 5 and 6.

CONTINUED ON PG. 10

● The e-tailer posted solid growth in all its business channels and geographic markets.

BY LUISA ZARGANI

MILAN — At least a few companies are buck-ing the tough retail environment — and Yoox Net-a-porter Group is one of them.

YNAP saw adjusted net profits leap 15.2 percent in the first half to 37 million euros, or $41.4 million, compared with pro-forma adjusted net profits of 32.1 million euros, or $37.5 million, in the same period last year.

First-half revenues also rose double-digits, climbing 13.3 percent to 897 million euros, or $1 billion, compared with pro-forma revenues of 791.8 million euros, or $926.4 million, in the first half of 2015.

And the momentum built throughout the period — and is expected to continue in the second half.

“Yoox Net-a-porter’s growth has acceler-ated, reaching the high-teens in the second

BUSINESS

YNAP Profits Climb 15.2%, Strength SeenFor 2nd Half

● A leaner structure could be preparatory to an initial public offering.

BY WWD STAFF

Layoffs appear to be in the pipeline at Dolce & Gabbana, according to industry sources.

The Italian fashion house is allegedly planning to lay off employees, mostly in its two factories in the towns of Legnano, about 13 miles outside of Milan, and Incisa in Val d’Arno, in the Tuscany region.

The company founded by Domenico Dolce and Stefano Gabbana is rationalizing its workforce because “the company needs a leaner structure. Fixed costs have spiked drastically and the new management wants to prepare the company for a public listing,” said a market source.

As reported in July, former Gucci chairman and chief executive officer Patrizio di Marco is a member of Dolce & Gabbana’s board and an independent adviser. Market sources contend di Marco’s role is much bigger and he is actively visiting the manufacturing plants and speaking to employees. Di Marco left Gucci on Jan. 1, 2015, followed shortly afterward

BUSINESS

Dolce & Gabbana Plans Job Cuts, Sources Say

CONTINUED ON PG. 11

All Its OwnFred Segal is launching its first clothing line, Fred by Fred Segal. PAGE 9

FOR MORE INFORMATION, PLEASE CONTACT PAMELA FIRESTONE, ASSOCIATE PUBLISHER AT 212 256 8103 OR PFIRESTONE@WWD.COM

Canadian

Real EstateWait ‘til You See What’s There

ISSUE: August 24 · AD CLOSE: August 10 · MATERIALS: August 15

An Advertising Opportunity

5 AUGUST 2016 3

● Carrigan headed the company’s design teams for CK Calvin Klein, Calvin Klein Jeans and Calvin Klein White Label.

BY LISA LOCKWOOD

Kevin Carrigan, global creative director of Calvin Klein Inc., has resigned his post. He has been with the company 18 years.

Carrigan was responsible for CK Calvin Klein, Calvin Klein Jeans and Calvin Klein White Label, which represents the lion’s share of Klein’s apparel business.

An internal memo stating Carrigan’s res-ignation was reportedly sent out to the com-pany Thursday. Calvin Klein officials could not be reached for immediate comment.

According to sources, Carrigan will stay on at the company temporarily to help with the transition. He was traveling and unavail-able for comment Thursday.

Carrigan’s resignation comes two days after Raf Simons was appointed chief cre-ative officer of Calvin Klein, Inc., a move that had been rumored since last fall.

In appointing Simons, CKI also said that Pieter Mulier has joined the firm as creative director, reporting to Simons. Mulier is

responsible for executing Simons’ creative and design vision for women’s and men’s ready-to-wear, as well as the bridge and bet-ter apparel lines and accessories. He is also expected to manage all men’s and women’s design teams within the Calvin Klein brand,

under Simons’ leadership.Mulier has long been Simons’ right-hand

man, serving as head designer of women’s and men’s accessories at Jil Sander when Simons was creative director there and as a designer at Simons’ men’s wear business.

Carrigan joined Calvin Klein in 1998 after having worked at Nicole Farhi and Max Mara in London. He holds a bachelor of arts degree from Ravensbourne College of Design and Communication, and a masters of arts degree in fashion design from The Royal College of Art and Design in London.

He was one of five creative directors at Calvin Klein, who each oversaw different parts of the brand. In April, Francisco Costa, creative director of women’s Collection, and Italo Zucchelli, creative director of men’s, were let go. Ulrich Grimm, who oversees men’s and women’s shoes and accessories, and Amy Mellen, who oversees home, remain at the company.

In his role, Carrigan set the unified seasonal design aesthetic, direction, and product designs including fabrics and color palettes, for the multiple categories that he oversaw. Carrigan worked closely with the licensees, especially G-III, on the Calvin Klein collections, which are estimated to account for close to $1 billion in wholesale volume at G-III. The company has the license for Calvin Klein women’s sportswear, dresses and performance.

Earlier this week, Morris Goldfarb, chief executive officer of G-III, said that legions of designers work on Calvin Klein and they design it with Calvin Klein Inc.’s review. “We understand the DNA of the brand,” said Goldfarb, noting that the Calvin Klein better business “was virtually nonexistent” until G-III took it over.

FASHION

Kevin Carrigan Resigns at Calvin Klein

They Are Wearing: Lollapalooza 2016 ● The 25th anniversary of Lollapalooza wrapped up on Sunday in Chicago’s Grant Park.

● “Suicide Squad” London Premiere: The Red Carpet

● 2016 Accessories Council ACE Awards

● Anna Wintour, Marc Jacobs and the Fashion Set Toast Amy Astley, New Editor of Architectural Digest

● First Lady Michelle Obama Wears Brandon Maxwell Dress for State Dinner for Singapore Prime Minister

Global Stock TrackerAs of close August 4, 2016

ADVANCERS

DECLINERS

Safilo Group SpA +15.73%

Anta Sports Products Ltd. +7.46%

Isetan Mitsukoshi Holdings Ltd. +2.89%

Global Brands Group +2.86%

Fast Retailing Co. Ltd. +2.78%

The Buckle Inc. -5.56%

Iconix Brand Group Inc. 3.94%

Prada SpA -3.39%

Chow Tai Fook Jewellery Group -2.86%

Next plc -2.25%

TOP 5TRENDINGON WWD.COM

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● The company recorded a sales increase of 2 percent for July, but projects a different story for August.

BY DEBRA BORCHARDT

L Brands Inc. and Zumiez inc. fared the best when it came to July sales with L Brands delivering upbeat results and Zumiez trim-ming its negative numbers. The Cato Corp. and The Buckle Inc. weren’t as positive as neither retailer seemed to be able to turn around declining sales.

L Brands recorded July net sales of $777 million for the four weeks ending July 30 for an increase of 2 percent over last year’s $759 million.

Comparable sales also increased 2 percent for the same period, although this is lower than last year’s comp-store sales increase of 3 percent. The positive takeaway was that it beat Thomson Reuters’ estimate of a same-store sales increase of 0.4 percent.

L Brands also said net sales for the past 13 weeks increased 5 percent to $2.89 billion over last year’s $2.77 billion. Comp sales for the past 13 weeks increased 3 percent.

Victoria’s Secret had flat comps versus last year. The growth in Pink and core lingerie was offset by declines in the categories that the company is closing. L Brands plans to exit the swim and apparel businesses. The beauty business also experienced declines and this is a department that the company is restructuring. Victoria’s Secret’s sec-ond-quarter sales jumped by 3 percent to

$1.87 billion and comps rose by 2 percent.Bath & Body Works delivered comps up

6 percent versus last year’s increase of 5 percent. The brand continues to be a hit with unfavorable currency headwinds from Canada. L Brands said second-quarter sales for Bath & Body Works increased 7 percent to $801.4 million and comps rose by 5 percent.

Looking ahead, L Brands said investors could expect to see flat comps in August. The retailer will focus on back-to-school for Pink and the new lounge bra at Victoria’s Secret.

L Brands will release its second-quarter earnings after the market closes on Aug. 17 and host a conference call the following morning. The company said it expects to deliver earnings per share at the high end of its range of 50 cents to 60 cents. The FactSet estimate for the second quarter is for earn-ings of 57 cents a share.

L Brands’ stock has dropped 10 percent for the past year, but in the last month has

staged a comeback and risen more than 7 percent. It closed the day up by 29 cents to $72.81.

Cato’s same-store sales dropped 10 percent – a big miss from the Thomson’s estimate for a decline of 1 percent. Cato stock dropped more than 2 percent to close at $33.59. The Buckle also reported that its July sales fell 10.9 percent, short of the expected decline of 3.6 percent. Buckle stock closed down more than 5 percent to $24.99.

Zumiez July sales fell 2.9 percent, but this was better than the expected decline of 3.6 percent. Comp sales fell by 4.9 percent, ahead of the guidance for a drop of 6 to 8 percent. Zumiez also said earnings per share will be at the high end of the range or even slightly better than their projected range of negative 9 to negative 13 cents per share. Zumiez stock spent most of the morning in positive territory, but lost steam and closed down more than 2 percent to $17.10.

BUSINESS

L Brands Sees July Sales Lift, Warns August Will Be Flat

Kevin Carrigan

Victoria’s Secret Angels Elsa Hosk and Alessandra Ambrosio celebrating Victoria’s Secret Swim 2015 collection last year in Herald Square.

4 5 AUGUST 2016

● For the first time in years, the designer will not close Milan Fashion Week, leaving the last day of shows with no international brand.

BY LUISA ZARGANI

SAY NO MORE: Giorgio Armani has moved his sig-nature brand’s show to Sept. 23, opting out of closing Milan Fashion Week this fall and leaving the last day without a strong, international name to anchor the week.

While the Camera Nazionale della Moda’s calendar is still temporary, the spring shows, running Sept. 21 to 26, are seen to open with Gucci, preceded by Blugirl, and end with a number of emerging brands, including Lucio Vannotti and Piccione.Piccione, flanking Mila Schön and San Andrès Milano.

Armani’s decision may have also been triggered by exceptionally scheduling his Emporio Armani spring fashion show in Paris to mark the restyling of the brand’s boutique and its Caffé, as reported. However, most likely, the designer has reiterated his fatigue with his unofficial role in being the only international designer to close the Milan week for years now.

After his men’s show in June, Armani had urged the Italian fashion body to work on the calendar. “Why should I be the only one to always close fashion week? There should be a turnover and I hope some of my colleagues will collaborate on this issue,” he said. It appears that, for the time being, the designer’s call has not been answered.

● The company reported second-quarter results after the equity markets ended their trading sessions.

BY VICKI M. YOUNG

Not just yet. That was the answer from Iconix Brand Group Inc. chief executive officer John Haugh, who said the company has identified oppor-tunities for growth but that Wall Street will have to wait until the fall to find out what they are.

Haugh gave a hint of what’s to come as the brand management firm posted second-quarter results that bested Wall Street’s consensus EPS estimates.

For the three months ended June 30, net income fell 15.7 percent to $11.6 million, or 23 cents a diluted share, from $13.7 million, or 28 cents, a year ago. On an adjusted basis, EPS was 27 cents, three cents better than Wall Street’s estimate. Licensing revenues slipped 1.7 percent to $95.7 million from $97.4 million. The year-ago quarter included $1.5 million of licensing revenue from Badgley Mischka, which the firm sold in the first quarter of 2016. Wall Street was expecting EPS of 23 cents on revenues of $95.2 million.

By segment, licensing revenue in its women’s brands slipped 3.3 percent to $36.5 million, while men’s decreased by 15.6 percent to $22.1 million.

For the six months, net income fell 61.8 percent to $30.2 million, or 60 cents a diluted share, on a 1.5 percent decline in licensing revenues to $190.4 million.

Haugh said in a conference call to Wall Street, “Our primary goal is to position ourselves to achieve growth while at the same time improving the balance sheet, and we are making progress on both of those fronts.”

Haugh, who joined the company in February as president and ascended to the ceo post in April, said that since the company’s last call when it posted first-quarter results, “we have conducted a broad strategic review of our company, our brands and

the overall market. We have identified a number of opportunities that we believe will drive long-term growth, both in the U.S. and around the world. This will include creating new revenue opportunities as well as building on our existing partnerships.”

He added that “strong relationships are critical to our success,” and that the company is “committed to being active brand managers and supporting our brands with the necessary tools to drive growth. You can expect to hear much more detail about these plans at our Investor Day in the fall.”

The ceo noted that the balance sheet is in a “better position than it was a few months ago,” due to the refinancing of the 2016 convertible notes and the repurchasing of a portion of its 2018 convertible notes.

On the call, Haugh also noted that Danskin “has been a standout for us with a strong activewear business at Wal-Mart across all categories including women’s, girls’, footwear and intimates.” He also said Material Girl has a strong and growing active-wear business at Macy’s that will be expanding to include plus sizes this fall. In men’s, the ceo told analysts the company continues with its work turning around the business and that “we still have much work to do.” The new men’s core Ecko license is expected to achieve a 30 percent year-over-year increase in U.S. net sales for 2016, he said.

The company updated its 2016 guidance to reflect certain recent transactions, such as its sale of the company’s stake in the Ed Hardy brand in China. The company now expects diluted EPS of between 93 cents and $1.08, on a licensing revenue range of $370 million to $390 million. That compares with prior guidance of EPS at between 71 cents to 86 cents, on licensing revenue expectations of $370 million to $390 million.

Shares of Iconix fell 3.9 percent to close at $6.58 in Nasdaq trading. The company reported sec-ond-quarter results after the equity markets ended their trading sessions.

THE MARKETS

Iconix to Unveil Growth Strategy During Fall Investor Day

● Bank of England halves rate to 0.25 percent.

BY SAMANTHA CONTI

LONDON — Britain’s vote to leave the European Union has forced Bank of England governor Mark Carney to slash the country’s historically low inter-est rate in half in a bid to stimulate the economy, which has begun to show signs of a slowdown since the historic June 23 vote.

The Bank of England’s Monetary Policy Commit-tee is sticking to its inflation target of 2 percent, and the interest-rate cut — the first since 2009 — is the cornerstone of its efforts. The bank is also planning asset purchases of 435 billion pounds, or $580 bil-lion, to be financed by issuing central bank reserves, in an effort to get the economy moving.

The bank cited the Brexit vote as a major factor in its decision to reduce the rate at which banks lend to one another and the borrowing costs for households and businesses. “The exchange rate has fallen and the outlook for growth in the short to medium term has weakened markedly,” the bank said Thursday.

“The fall in sterling is likely to push up (inflation) in the near term, hastening its return to the 2 per-cent target, and probably causing it to rise above the target in the latter part of the forecast period, before the exchange rate effect dissipates thereafter.”

The bank noted that the period of above-target inflation would only be temporary, and it expects the eventual return of inflation to the target.

The bank added that it foresees an eventual rise in unemployment and that the U.K. is likely to see little growth in gross domestic product in the second half of this year. It also downsized its growth

forecast for 2017 to 0.8 percent from the 2.3 percent it had announced in May.

Earlier in the day, European stock markets had edged up in anticipation of the rate cut. After the reduction was revealed, the FTSE 100 jumped 1.3 percent to 6,723.12 and other markets built on gains from earlier in the day.

Following the announcement, the pound dropped 1.5 percent against the dollar, and 0.7 percent against the euro. The pound was trading at $1.32, and 1.18 euros.

The London consultancy Verdict Retail said in a report following the announcement that the rate cut will do little to stimulate retail sales.

“With the immediate impact of the interest-rate cut being a drop in the value of the pound, this move is hardly likely to boost flagging consumer confidence, which is a major factor in driving spend,” wrote Nivindya Sharma, senior analyst at Verdict Retail, in a research note.

“In addition, consumers will see returns on savings fall yet further. In theory, this is supposed to stimulate spend by making it less desirable to save, but there seems little evidence this has worked up to now.”

Not only is the interest rate cut not a magic potion, “it could actually create even less confi-dence in the economic outlook,” Sharma added.

BUSINESS

Brexit Woes Force Bank of England to Slash Interest Rates

FASHION

Giorgio Armani Moves Show To Mid-Fashion Week in Sept.

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A look from Giorgio Armani’s

fall line.

The Bank of England cut interests rates in a

bid to offset the impact of Britons’ vote to exit

the European Union.

Pia Mia in a Material Girl ad for Macy’s.

5 AUGUST 2016 5

Parke & Ronen’s polyester and spandex striped bikini and polyester trunks.

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● Traditional swim brands take a leap toward neons and fluorescents for spring, offering a plethora of bright colorations in shorter styles such as trunks and briefs, making this the go-to piece to make a splash.

BY LUIS CAMPUZANO

MEN’S

Neon Nature

6 5 AUGUST 2016

Adidas Originals’ polyester and cotton jacket and Nike’s polyester and spandex briefs. All sunglasses by Oakley; all necklaces by Nektar De Stagni. Reebok sneakers.

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American Apparel’s cotton

and polyester tank top and

EA7’s nylon orange speedo and pink trunks.

Tommy Hilfiger’s polyester jacket and

Diesel’s cotton trunks.

American Apparel’s cotton and polyester tank top and

Speedo’s polyester and spandex jammer swimsuit.

Neon Nature CONTINUED FROM PAGE 5

5 AUGUST 2016 7

● The leather outerwear brand is also putting together web exclusives to draw traffic to its site.

BY JEAN E. PALMIERI

Andrew Marc is pushing further ahead in its quest to create a lifestyle brand. The leather goods specialist that has been owned by G-III Apparel Group Ltd. since 2008 will offer women’s footwear for the first time for fall.

The range, which will encompass a tight offering of eight styles of boots and booties in multiple colorways, will complement the brand’s core outerwear and be sold exclu-sively on the Andrew Marc web site beginning in October. The label has produced men’s footwear under license for at least four years, but the women’s line will be manufactured in-house.

“The Bass team helped us,” said Marlene McDade, vice president of brand marketing and licensing for G-III. The company also owns the venerable G.H. Bass footwear brand, which is famous for its Weejuns loaf-ers. “It took three weeks to get it together. We reinvented the uppers to make them Andrew Marc-esque.”

The footwear initiative was directed by Chris Gbur, the brand creative director of G-III, who has been with Andrew Marc for over three decades. He also spearheaded the sexy ad campaign for the collection, which was shot last week and features scantily clad women wearing the shoes. “Chris went back

to what has worked for us in the past,” said McDade.

The shoes will open at $195 and top out at $325 for a boot fully lined in rabbit fur. The shoes are durable yet still look feminine and are “in line with the men’s footwear and the fall apparel,” McDade said.

For fall, the company is augmenting its core black and brown leather outerwear with some colorful alternatives. There are anoraks with pink and blue removable rabbit fur hoods, washed leather jackets with embroidery details and colorful suede jackets. Pins and patches of everything from lipstick cases to taxi cabs are also being offered so

customers can personalize their jackets.This updated product, coupled with a

new push into direct selling, is designed to increase sales at Andrew Marc, which will celebrate its 35th anniversary next year.

“Retail is theater today and to excite the customer, you have to change,” said Stephen Budd, Andrew Marc’s president.

Last fall, Andrew Marc tested a new strategy where it supplemented its traditional magazine advertising with three direct mail pieces, he said. These included a 40-page catalogue, as well as two smaller pieces — an eight-page mailer and a postcard — intended to draw customers to the web site to buy some web exclusives. The result was the acquisition of 3,500 new customers, Budd said.

The offering was a mix of the higher-priced Andrew Marc collection as well as Marc New York, the more affordable line. “The big cat-alog was about telling the brand story,” said McDade, “which is hard to do in traditional print ads.”

Budd added: “It’s a laboratory for us and a way for us to communicate with our cus-tomers. When you go direct, you learn a lot.” The company will offer similar web exclusives again this fall beginning at the end of Septem-ber and will produce four direct mail pieces this time.

Finally, the executives revealed that the brand will launch a men’s activewear collection next year. Called MNY Active, the line will offer business-casual work attire with performance attributes. The Marc New York Performance active assortment for women has been produced for three years and answers the call for ath-leisure apparel at a reasonable price. G-III also produces the Calvin Klein Performance line so the expertise already exists and it makes sense to expand into men’s as well, Budd said.

“You can’t keep doing the same old, same old and cross your fingers,” he said. “Business is challenging in the retail world, so you have to find a way to differentiate yourself.”

ACCESSORIES

Andrew Marc to Offer Women’s Footwear for Fall

● The makeup artist’s latest creation is Lust 004: a series of pigmented, matte lipsticks topped with ultrafine glitter.

BY RACHEL STRUGATZ

Glitter is the hero of Pat McGrath’s latest creation.

The makeup artist and global creative design director at Procter & Gamble, who admits she “comes from a land of extremes,” has just dreamed up what she thinks will be beauty’s next must-have lip trend: an uberpig-mented, matte lipstick topped with ultrafine glitter.

“When people wore glitter before it was tons of eye makeup. The modern way to wear glitter is with bareness. That’s what makes it so fresh,” McGrath said during an interview, during which she unveiled Pat McGrath Labs’ Lust 004, her foray into lips. “It’s [about] a bare face, a modern, bare face with mascara and brow control and a touch of Skin Fetish [McGrath’s highlighter that came out in April] and a divine jeweled lip.”

She showed how her lip sets, composed of five products that could be mixed, matched and layered to achieve varying finishes, colors and intensities, bring editorial and runway beauty trends to the consumer. Each kit — available in Version Flesh (nude), Version Vermillion Venom (red) or Version Bloodwine

(purple and deep red) — comes with two matte lipsticks; a clear, high-shine lip gloss; saturated gold pigment, and a glitter pot.

McGrath said she only creates things she is obsessed with and right now it’s glitter. Lust 004 was born from the glitter lips she conceptualized for Atelier Versace’s couture show in July.

She explained the inspiration and how to apply the new range, and for most, it might seem unlikely that her vision will be able to

make it from runway to the lips of regular people. But it’s more versatile than one would think. As demonstrated by a group of three models, who each wore a different colored lip and the corresponding finely ground glitter, the look, while definitely a statement, is not reminiscent of a child’s arts and crafts project.

“Glitter is for every day, in my mind,” she mused. “You want it in the daylight, you want it in the sun.”

Customers can wear the matte lipstick solo,

paint on the corresponding glitter or layer the clear gloss on top of both for optimal shine. A saturated gold pigment could be mixed with the gloss to impart a metallic sheen (to be worn solo on a bare lip, with the matte lipstick to create a high-gloss finish or as a finale step over the glitter) or painted delicately on one’s cupid bow as a lip liner/highlighter hybrid.

Each kit retails for $60. For those not ready to toy with glitter and gold pigment, each of the six matte lipsticks are sold separately for $25. Additionally, a package of all three kits retails for $150.

Each makeup artist’s releases is a singular launch — Lust 004 will be McGrath’s fourth — and it’s very deliberate. Only 25,000 units of Skin Fetish 003 were produced, with the same quantity made for Lust 004, which hits patmcgrath.com at noon Eastern Standard Time on Aug. 30.

McGrath, who is releasing her second product in less than four months, is carefully building a business predicated on a new “cult beauty product model” that is fueled by social media. Similar to Kylie Jenner, McGrath manufactures a product in limited quantities and introduces it to the public via Instagram, where her account @patmcgrathreal has 881,000 followers. She invites her fans to shop it at her e-commerce site. Unlike Jenner, though, McGrath has partnered with Sephora, which will introduce Lust 004 on Sept. 8 in 10 select doors and on sephora.com — while supplies last, of course.

BEAUTY

Pat McGrath Unveils Lust 004 Glitter Lip Kits

Pat McGrath’s Lust 004 launches at

patmcgrath.com on Aug. 30.

Andrew Marc’s fall footwear campaign.

8 5 AUGUST 2016

● The German sporting goods maker reaffirmed its increased guidance for 2016.

BY JOELLE DIDERICH Yeezy Boost, NMD — meet Tubular and Gazelle.

Adidas AG is banking on the latest sneaker models

in its Adidas Originals lifestyle division to keep the cash

registers ringing in the second half, after posting its

highest organic second quarter growth rate in more

than a decade.

Speaking from Rio de Janeiro on the eve of the Olym-

pic Games opening ceremony, Adidas chief executive

officer Herbert Hainer gave a rundown of the products

in the pipeline, saying he was confident the company

could maintain its strong momentum.

“The stellar financial performance in the second

quarter is proof positive that our strategy is paying off.

I am proud to confirm that we are in great shape,” he

said, adding that, “2016 will be a year of records for the

Adidas Group.”

The executive was commenting on the company’s

results for the last time before handing the baton to his

successor, Kaspar Rorsted, on Oct. 1. Hainer has turned

around the business after a dire performance in 2014,

when repeated profit warnings prompted shareholders

to call for his resignation.

“I saved the best for last,” he remarked.

Despite the better-than-expected results, Adidas

shares closed down 2 percent to 145 euros, or $162.30,

on the Frankfurt Stock Exchange as analysts zeroed in

on the group’s profitability forecast and concerns that

Nike’s decision to exit golf hardware could impact the

sale of its rival’s golf brands.

“This doesn’t change our strategy at all,” insisted

Hainer, referring to the ongoing talks on the disposal

of its TaylorMade, Adams and Ashworth brands. He

noted that the TaylorMade-Adidas Golf division turned

profitable again at the end of the second quarter, which

should help mitigate the impact of rising sourcing costs

in Asia on the group’s gross margin in the second half.

But analysts were disappointed with the revision to

the group’s earlier forecast for a gross margin reduction

of up to 50 basis points from 48.3 percent last year. It

now expects a decline of up to 30 basis points.

Adidas last week lifted guidance for 2016 on the

back of strong preliminary results, which widely beat

analysts’ consensus estimates.

On Thursday, it confirmed group revenues in the

quarter totaled 4.4 billion euros, or $4.95 billion,

up 13 percent in reported terms and 21 percent on a

constant-exchange basis. Dollar figures are calculated at

average exchange for the period to which they refer.

Adidas continues to gain steam in the U.S. market

as it claws back market share from Nike and Under

Armour, with sales in currency-neutral terms growing

25.6 percent in North America in the three months

ended June 30, compared with growth of 21.6 percent

in the first quarter.

Revenues were up 29.2 percent in Western Europe,

30.1 percent in Greater China, 7.9 percent in Latin

America and 7.2 percent in Russia/CIS.

Revenues for the Adidas brand rose 25 percent in

the quarter, with lifestyle and performance categories

recording strong double-digit growth across the brand’s

focus markets.

It was a strong season for football, thanks to the

UEFA Euro 2016 soccer championship. Sales in the

second quarter rose 17 percent and the category is on

track to reach record revenues of 2.5 billion euros, or

$2.8 billion, in 2016.

Adidas plans to leverage the popularity of some

performance football cleats to create new lifestyle

shoes. The first of these, the Ace 16+ Purecontrol, is

derived from the laceless Ace 16+ boot, worn by French

midfielder Paul Pogba on the pitch.

“The shoe, which was launched at the beginning of

July, marks the beginning of a new focus which will see

future football products followed by similar off-pitch

alternatives,” Hainer noted.

Revenues in the running category were up 30 per-

cent in the second quarter because of products includ-

ing the UltraBoost Uncaged shoe. “In the U.S. alone, we

sold over 16,000 pairs of UltraBoost Uncaged within

24 hours and through e-commerce we sold 7,000 pairs

within 15 minutes,” the executive said.

Adidas hopes to keep the segment red-hot with the

addition of colored iterations of its signature white

Boost midsole.

Revenues at Adidas Originals grew 50 percent in the

second quarter, fueled by the hugely popular NMD and

Yeezy Boost shoes. Its Stan Smith, ZX Flux and Super-

star franchises also maintained strong momentum,

with the Superstar flying off shelves in all major key

retailers in Western Europe and North America.

Adidas recently relaunched the Gazelle sneaker,

originally introduced in the 1960s, and has revealed

plans to extend its partnership with Kanye West beyond

its current lifestyle focus to encompass performance

designs.

The company has tapped Pharrell Williams, another

one of its collaborators, to create new versions of the

NMD, which dropped on July 22. “While the shoe will

drive further brand heat for our NMD franchise, Q3 will

also see a stronger focus on our Tubular and Gazelle

silhouettes,” Hainer said.

The Reebok brand saw sales progress 7 percent in

the quarter, with double-digit improvements in most

key markets, excluding North America, where it contin-

ues to streamline its U.S. business.

Reebok is the leading provider of CrossFit apparel

and footwear and plans to enhance the combat training

side of the business because of its new campaign with

former UFC champion Ronda Rousey.

Women were a strong driver for the training seg-

ment, which grew 11 percent in the quarter. “While we

continue to see robust growth in both the men’s and

women’s apparel business, it is especially our strength-

ened focus on women’s training, which is clearly

starting to pay off and gain traction,” said Hainer.

The group plans to build on the strong performance

of its TechFit and ClimaChill franchises in the second

half and recently unveiled Karlie Kloss as the face of its

Stella McCartney for Adidas fall campaign.

BUSINESS

Adidas Aims To Maintain Momentum

● The democratic nominee’s camp took a jab at Donald Trump’s Made in America push, offering up the names of companies he could have used to manufacture his signature suit and tie collection.

BY KRISTI ELLIS

WASHINGTON — Men’s wear companies found

themselves in the spotlight and at the center of the pres-

idential race after Hillary Clinton’s campaign released a

buyer’s guide of U.S. manufacturers for Donald Trump,

calling him out for aiming to make America great again

while his own signature suit line is reportedly produced

abroad.

The owners of some of the companies listed said

they were unaware the Clinton campaign planned to

use their names in the guide, but said they were glad

the presidential candidate was putting a spotlight on

firms that make products in the U.S.

In a “Made in America: A Buyer’s Guide For Donald

Trump,” the Clinton campaign said: “Trump couldn’t

be bothered to find manufacturers in America, so we

did it for him.”

“Despite his repeated claim and desire to put ‘Amer-

ica First’ time and time again Donald Trump has told

us he has to manufacture his products abroad. He says

‘it’s very hard to have apparel made in this country.’ Or

that, ‘They don’t even make the stuff here.’ No, Donald.

Just no,” the campaign claimed.

The campaign went on to say it didn’t take long

to find over 100 examples of U.S. manufacturers and

businesses “ready and able to produce the same goods

he makes overseas.”

Trump had his ties made in China but could have

made them in the U.S., Clinton charged, listing the

names of 25 manufacturers it said produce Ameri-

can-made ties.

The campaign also said Trump makes his suits and

shirts in China, Bangladesh and Honduras but could

have made them at 33 U.S.-based companies. Some

larger well-known labels included in the guide were a

Brooks Brothers factory in Haverhill, Mass., a Hickey

Freeman factory in Rochester, N.Y., and a Joseph

Abboud factory in New Bedford, Mass. The “guide” also

listed 61 furniture and frame companies in the U.S.

One of the companies named in the guide, Blade

+ Blue, is a small men’s wear collection based in San

Francisco. Peter Papas, founder and owner of the

label, has a full-time job with a major apparel firm and

designs his small sportswear collection on the side in

his basement.

He said he was contacted by the Clinton campaign

“out of the blue” a week ago and told they were

interested in shining the spotlight on small American

brands that make their clothing in the U.S. to contrast it

with Trump.

Papas, who said his designs are made in the Bay

Area by contractors, said there is “definitely a possibil-

ity for him [Trump] to consider making his suits in the

U.S.”

“He just has to decide how much margin he is willing

to sacrifice,” Papas said. “I still make a great margin on

those neckties. You just have to work hard to find the

right people and make the sacrifice on margins here or

there.”

The contact from Clinton’s campaign enabled him to

establish a relationship, something he said is important

for a small entrepreneur who values knowing the

people who make his clothes and neckties.

“I’m one little guy in my basement making shirts and

bow ties,” Papas said. “How am I supposed to compete

with big companies? What they wanted to do was shine

a spotlight and give brands like mine a little bit of a

bigger voice.”

And if it was also used to make a political point?

“For me it’s not even political. This is the American

dream to me. My parents came here from Greece

and sacrificed everything so I could go to school…I

think that is the message they want to let people know

about.”

Papas said it is Trump’s claims to “Make Amer-

ica Great Again” and attacks on immigrants on the

campaign trail – not the fact that he outsources his suit

collection – that don’t sit well with him.

“If you are going to get on stage and say you are

going to make America great again and also say dispar-

aging things about people from other countries, yet you

don’t make anything here and you are making a lot of

money on it, there is something a little disingenuous

about that,” Papas said “Perhaps that is their [Clinton

campaign’s] angle. To be honest, I totally agree with

them.”

Read Wall, who has a ready-to-wear men’s wear

collection and store by the same name in Washington,

D.C., said he was completely unaware that the Clinton

campaign was going to list his company in the guide but

said “any publicity is good publicity.”

Wall said he preferred not getting into the politics of

the issue or discussing the candidates.

He said his suits are made at a factory outside of

Boston, his custom shirts are made at two factories in

New Jersey, and his ties and trousers are made at two

separate factories in Brooklyn.

“The argument of American-made, especially for

clothing, is much more complicated than people make

it out to be. The easy knee-jerk response is bring it

all back here and we can do it all here but there are

a lot more factors involved,” Wall said. “I think it is a

complicated discussion and one that doesn’t lend itself

when you get into the nitty-gritty of it to these kinds of

gung-ho reactions.”

He said he doesn’t believe the U.S. can “realistically”

compete at the lower end price points, but said he has

built his business on higher price points based on a

quality and value standpoint.

Raising awareness about American manufacturing

is important to Clay Rayborn, owner of Blackland

Clothing Co. in Denver, Colo., whose men’s casualwear

company and store was also on the Clinton campaign

guide.

“Some of those companies on the list are bigger

obviously but there are a lot of small companies like me

on there that are trying to bring Made in America back

and getting some publicity like that is great,” Rayborn

said.

He said being a small business owner and apparel

manufacturer has been challenging.

“For a little guy like me it is quite challenging, but we

keep continuing to raise awareness to keep jobs here. A

seamstress can make between $13 and $17 an hour. Not

a fortune, but in a small town that can still buy you a

home and put kids through school,” he said. “I’m glad

to see it becoming part of current events and part of the

discussion to raise awareness. There are many people

who had no idea that companies like me are producing

here. I tell them why it is important to support manu-

facturing here.”

As for the reports of the outsourcing of Trump’s suit

collection, Rayborn said outsourcing makes sense when

it is something like an iPhone. But for apparel, he said

the U.S. has a long history of garment production and a

“skill base of people who would love those jobs.”

“I haven’t followed the two campaigns with regard to

where they stand on this particular issue but let’s make

it part of the discussion,” he said. “I’m glad to see that.

If Donald Trump wasn’t aware that these companies

like me are doing this and trying to build this base in

this country, maybe this type of conversation will raise

that awareness and be good for all of us little guys.”

Bradley Rhyne, owner and cofounder of the mens-

wear collection and store Ole Mason Jar in Charlotte,

N.C., said while he did not get involved in the political

campaigns from either side, he welcomed the attention

both candidates are giving to U.S. manufacturing.

“I would hope both of them actually hold up their

end of the bargain on that. There are so many small

towns — take North Carolina, for instance. They were

built on textile manufacturing in the Thirties, Forties,

Fifties and Sixties and you drive through them today

and it’s a little depressing to see that because things are

being made overseas these towns that were better once

upon a time are no longer what they were,” he said.

Rhyne, whose men’s wear collection of suits, shirts

and pants are made in different factories in the U.S,

including in Massachusetts and North Carolina, gives a

portion of the proceeds to local philanthropic groups

dedicated to feeding children in need.

He, like the other makers, said he imports some

fabrics, particularly wool, from Italy, but takes pride

in the “extra steps” he takes to construct the suits and

other items in the U.S., often with U.S.-made fabric. And

he has found a company that is producing wool fabric

in the U.S, which he plans to work with in the future.

“We’ll go to factories and literally our orders might

be keeping the lights on,” he said. “I would hope that

we can return America to how it was. I think manufac-

turing in general is sort of the lifeblood of those smaller

towns throughout America where towns can revolve

around one manufacturer, can employ a large piece of

that town and really drive that local economy.”

BUSINESS

U.S. Men’s Wear-Makers Spotlighted by Clinton Campaign

A Yeezy Boost 350 shoe.

5 AUGUST 2016 9

● The Los Angeles retailer, known for popularizing designer and contemporary brands, has created Fred by Fred Segal.

BY MARCY MEDINA

Fred Segal, the Los Angeles retail empo-rium known for popularizing designer and contemporary brands over its 55-year history, is launching its first-ever apparel line, Fred by Fred Segal.

Set to debut at market on August 15, the men’s and women’s line is meant to capture the spirit of life in L.A. via contemporary classics such as cotton T-shirts, worn-in jeans and cashmere sweaters priced from $50 to $425 at retail.

“I’m not reinventing the wheel by any means. This line encompasses the feeling of L.A. and what it is to dress in L.A.,” said the brand’s vice president and creative director Shaun Hurley, an apparel veteran who last cofounded Genetic Los Angeles Denim.

Hurley started with the city’s iconic locales such as Laurel Canyon, Venice Beach and Sunset Boulevard and took inspiration from their fashions of the Seventies and Eighties. “I started with a pair of vintage women’s designer

jeans and a bodysuit, like Farrah Fawcett back in the day. Then I threw a cashmere sweater coat over her, and it all went from there. It’s your favorite T-shirt, sweater and designer denim. It’s a look any woman can dress any way,” he said.

Classic t-shirts will retail for $50 to $60, fashion pieces for $90 and denim from $198 to $220, with some Japanese selvage and specialty washes prices about $235 to $265. “I want volume, to be honest,” he said. “I want the customer to be drawn by the feel and style, then to say, ‘Oh my gosh this is a great price point,’ so it turns into something you always have in your closet.”

Hurley has a soft spot for denim, having started out as a Levi’s fit model at age 16, then working the retail floor at Abercrombie & Fitch and moving to the buying department at Gap Inc. before becoming a denim sales rep and launching 575 jeans. For Fred by Fred Segal, he created the women’s Perfect Skinny, Sexy Straight, Irresistible Flair and Iconic High-Rise styles. For men, there’s the Bourbon Slim and the Whiskey Straight.

Hurley said he was led not only by eye-catching details — each top has signature neck tape in the back and the jeans logo is a simple black rubber stamp — but by the worn-in hand of his favorite vintage pieces. “At Genetic we were all about the hand-feel of the

denim. This and the styling and fit are what help you buy it.”

Hurley is counting on retailers wanting to order now and sell now; the line is launching at market with fall immediates. “Now, people want to see and wear things right away. You can’t launch a new line and make people wait months to get the product,” he said. He is aim-ing for “60 to 100 of the best specialty stores in the U.S. and 20 key international doors.”

The line is currently 70 percent women’s and 30 percent men’s but Hurley wants to bal-ance the ratio going forward. For spring 2017, he plans to add a sweats line, more bodysuits for women and swim trunks for men.

“It’s exciting to get to be the new voice of an iconic brand, one that’s never had its own collection,” said Hurley.

After its founding in Santa Monica in 1961, Fred Segal’s locations on Broadway there and on Melrose Avenue in Los Angeles became known for ferreting out new and noteworthy fashion and beauty brands. In 2012, the retailer was acquired by Sandow and is now owned by an investment group that includes Sandow and Evolution Media Partners, a venture of Holly-wood talent agency CAA, private equity firm TPG Growth and Participant Media. The Santa Monica location has since closed and new stores have opened in Tokyo and Yokohama in Japan.

FASHION

Fred Segal Launches First Apparel Line

● The shopping app, fresh off a major redesign and rebrand, now looks to boost its editorial content to differentiate itself in the marketplace.

BY KARI HAMANAKA

Shopping app Spring has the goods to sell, but now it needs a point of view.

The New York-based firm, after roughly two years building up the supply side of its mobile-first e-commerce platform, is turning its attention in the second half toward bolstering its editorial offering when it comes to curating looks and partnering with more influencers and publishers. It’s made some strides — earlier this year, for example, Spring profiled 33 female found-ers of various companies. But there’s more to do.

“The idea is to be the shopping button on your phone,” said president Marshall Porter. “We made a very conscious decision focused on supply and technology [since the founding]….We’ve spent, realistically, the last two years building that supply base. We launched with 1,000 stockkeeping units. We now have 151,000 skus active today, so really huge evolution there. Now it’s time to continue to do that. We want to continue to bring brands on board but also augment that with a really strong consumer focus.”

Spring isn’t specific about what individ-uals or companies it will partner with to bring more content to its followers. But that is just one part of a move to compete

beyond, at the most basic level, continuing to bring on more brands.

Bonobos launches on Spring next week. That will be followed by Giorgio Armani by the end of August. Moschino is slated for a rollout by year’s end. Yet, even with those big names, Spring wants to be seen as a place for emerging designers. It has room to grow — about 30 percent of the more than 1,200 fashion, beauty and other lifestyle brands for men and women could be con-sidered emerging designers.

The push to create greater distinction with the shopping app come off the back of a major rebranding exercise that capped about a month ago. The work not only revamped the web site but added new func-tionalities — some of them still in early days, including a Facebook bot shopping assistant

launched with Facebook Messenger.Spring, which has raised $32.5 million

thus far across two rounds, has year-to-date seen 20 percent growth in sales each month, according to Marshall.

The app, which is known for a shop-ping experience akin to scrolling through Instagram, in March switched from the well-known feed style to something a bit more editorially driven. The company didn’t do away with the feed; it’s just a secondary tab offering that lets shoppers follow brands of their choice. About a month later, Spring added a shopping cart for checkout, along with the ability to search by size rather than just brand. In June, it relaunched with its new design.

“It’s a fresher take on what our brand is,” Porter said. “If you look at the old brand,

we were trying not to outshine our other brands. It wasn’t a fashion brand….You could argue it was a technology brand. We want to emote more of a designlike, fash-ion-oriented brand.”

The company’s use of the Facebook bot, which cues up a chat dialogue with a shopper to help them find what they’re looking for, is proving a useful source of information, although Porter said the com-pany is not yet sharing specifics on just how effective the bot has been.

It’s all an evolution in step with custom-ers and how they’re using the app.

“Spring, at its inception, it was more around discovery without as much built around the experience of a high-intent shopper,” Porter said.

That is, someone opening the app or visiting the site who was in need of a pair of black pants for example, didn’t necessarily need to scroll through a feed of dozens and dozens of different items.

“We also did learn from the consumers that, as we put up more and more brands and more and more product, that we needed to give them some sense of direc-tion and help them navigate,” said chief brand officer April Uchitel, who came to the company after having worked at Diane von Furstenberg, BCBG Max Azria and Karen Kane.

Uchitel is in Los Angeles this week for meetings to introduce the new look of Spring but also for Thursday’s evening’s Gen Art “Fresh Faces in Fashion” event, featuring the work of five local, emerging designers. Spring will sell the designers’ col-lections on its app and site in conjunction with the event.

Support of Gen Art is very much in line with Spring’s DNA of pushing emerg-ing designers and harkens back to that discovery experience, Uchitel said — even as the shopping app’s offerings continue to balloon.

“For us, that’s something that differenti-ates us from the typical matrix of traditional retailers,” Uchitel said. “It really allows us to have a unique lens.”

RETIAL

Spring Seeks Voice With Focus On Editorial, Emerging Designers

New look of Spring shopping app.

A look from Fred by Fred Segal.

10 5 AUGUST 2016

● Rizzo was instrumental in the careers of Isaac Mizrahi, Donna Karan, Louis Dell’Olio, Willi Smith, Marc Jacobs, Constance Saunders, Jeffrey Banks and Michael Vollbracht.

BY ROSEMARY FEITELBERG

Former dean of Parsons School of Fash-ion Frank Rizzo died Wednesday at the age of 85.

Under his tutelage, Rizzo influenced such students as Isaac Mizrahi, Donna Karan, Louis Dell’Olio, Willi Smith, Marc Jacobs, Constance Saunders, Jeffrey Banks and Michael Vollbracht before they shaped their own careers. Never content with the status quo, Rizzo once recruited Donald Brooks to help him hold the interest of jaded attendees at a Parsons student fashion show in the mid-Eighties. Brooks helped students envision fictional costumes for a Thirties movie musical in varying degrees of red for the 1983 “And Let There Be Red Show” at the New York Hilton.

Rizzo told The New York Times in an interview at that time, “Everyone who comes here sees every show in Europe and on Seventh Avenue and they see this as just another fall show. They say it’s very nice and the clothes are well made, and that’s that. So I said, let’s give them

something to shake them up, something that says, ‘Look at us. We’ve got lots of talent.’ And I wanted to give the kids some fun in the classroom.’’

Rizzo died at his home in Crossville, Tenn., while under hospice care, Banks said.

Rizzo spent the better part of his life at Parsons, graduating from the school in 1957 and winning its Silver Thimble award. While maintaining his full-time job as a bridal designer on Seventh Ave-nue, he returned to Parsons to teach in 1966. Rizzo learned the ropes at the head of the class with another newbie faculty member, Theresa Chiappetta.

Sixteen years later, Rizzo succeeded Ann Keagy as the school’s dean of fash-ion. Rizzo had such a loyal following of former students-made-good that Mizrahi hosted a dinner party in his honor last summer during his annual pilgrimage to Manhattan. Every June, Rizzo returned to New York to see the Costume Institute’s latest exhibition at the Metropolitan Museum of Art, go to the theater and catch up with friends, Banks said. Rizzo once described the spirited Mizrahi as “the kind of argumentative person whom you enjoy” and like many of his former students, Mizrahi became a lifelong friend.

Mizrahi said Thursday he got to know to know Rizzo during his undergraduate days in the early Eighties. “The great thing was how Frank was able to treat

every student differently. He was a great administrator, no doubt, but his gift was in teaching. He spoke to each person individually without inflicting any kind of boring lesson plan on a student. He used to look at my book and say, ‘Well, you have a lot of different ideas here and don’t stop.’ While other teachers would say, ‘Oh, you have to hone it in and hone it in. Bring it in for a landing,’ Frank would encourage the crazy way that I thought. I was so thankful for that.”

Rizzo’s mentoring extended beyond fashion design. “Frank was a great exam-ple of not just a wonderful citizen and a great teacher, but he was a great role model as a gay man. He was perfectly integrated into society, he was incredibly liked, nice and wonderful. Without him, I don’t know exactly what I would have done because at the time there weren’t that many great role models,” Mizrahi said. “For instance, at that time one did not turn to their families for these things. And there was a great need for it. He felt it very deeply and he rose to that occa-sion. He didn’t need to and that’s why I will always love him.”

Having gotten to know Rizzo as an 18-year-old student, Vollbracht said Wednesday, “‘Nice’ is one of my least favorite words, but Frank was absolutely nice. I think you would not find anyone who wouldn’t say that about him. He was really dedicated to the students. He listened and cared about them and not

just about Parsons and fashion. Frank cared about the good students and the bad students. And that’s a real trait.”

Describing Rizzo as Parsons’ most influential teacher of the Sixties, Sev-enties and Eighties, Stan Herman, who worked under him as a critic at Parsons, said Wednesday, “Parsons at that time was the school. Frank worked on the avenue as a designer and that made him extremely special in teaching students. It was also a smaller industry then. It was like a great little campus where everyone knew each other.”

Herman added, “As a critic, I depended on him to help me lead stu-dents to bring them out in the best way.”

Services have not yet been finalized, according to Banks. Rizzo is survived by his partner Richard Hatler, an estab-lished florist in Crossville, and a sister Marietta.

OBITUARY

Parsons Former Dean of Fashion, Frank Rizzo, 85

Frank Rizzo as a Parsons student in his

West 85th Street

apartment.

by creative director Frida Giannini, who is married to di Marco. The executive joined the Florence-based firm in 2009, succeeding Mark Lee. Prior to that, di Marco played an instrumental role in turning around Bottega Veneta as presi-dent and ceo for eight years.

Di Marco did not return a request for comment on Thursday, while a Dolce & Gabbana spokeswoman said the company was closed for the summer holidays and no one was available to comment.

Sources in Milan speculate that his arrival at Dolce & Gabbana could be pre-paratory to a public listing.

In July, online news outlet Leg-nanonews.com related that the unions have “asked explanations” of Dolce & Gabbana representatives “in light of the concern of employees over the com-pany’s situation” and that they were demanding a meeting. “The head of personnel denied the existence at the moment of a restructuring plan and in response to our request specified that no personnel reduction is planned, while the move to Lonate Pozzolo [Italian town] and other sites is normal,” stated

the unions on Legnanonews.com. The unions concluded that “over the next few months, we’ll see if the facts will prove this true.”

The strategy of the firm is to rethink the entire organization, transforming the company from a family-owned enterprise to a public company.

A market source told WWD that “Guc-ci’s former chairman and ceo is the mas-termind behind the layoff of 1,000 work-ers at Dolce & Gabbana.” It is believed

that the job cuts are part of a more extensive restructuring plan di Marco will present to modernize the company, making it leaner and more flexible.

In the fiscal year ended March 31, 2015, the Italian fashion group reported revenues of 1.05 billion euros, or $1.39 billion at average exchange rates. At the end of March, the group counted 4,547 employes and a distribution network of 323 stores.

The cuts will marginally concern the structure of the company’s Milanese headquarters, but focus instead on the brand’s clothing factory in Legnano and accessories plant in Incisa in Val d’Arno, a small town near Florence. Negotia-tions with trade unions should start in September, after the summer holidays in Italy, even if the industrial plan has been approved by Domenico Dolce and Stefano Gabbana as well as by the board formed by Dolce’s siblings, Alfonso Dolce and Dorotea, general director Cristi-ana Ruella and Giuseppina Cannizzaro, Domenico Dolce’s niece who joined the board in May at the same time as di Marco.

One source said Dolce & Gabbana’s decision in 2011 to end the D&G line and fold it into the signature line has impacted the group’s structure.

Prior to the closure of D&G, the com-pany had increasingly invested in the line, following the termination in 2005 of its 12-year relationship with Ittierre, part of the now-defunct IT Holding, and tak-ing operations in-house with the spring 2007 season. Case in point: the firm had

built a $48 million D&G headquarters in Milan, a 54,000-square-foot struc-ture containing the brand’s showroom, commercial offices and press offices, with specifically designed Ron Arad furniture.

Milan-based marketing and strategic consultant Armando Mammina said clos-ing the D&G line showed “great courage and a strategic vision on the signature line on which nobody would have wagered. The facts proved the designing duo and the management right.”

Mammina said it was “probable” the structure dedicated to D&G remained in-house, creating an “overlap of roles.” In light of a public listing or a restruc-turing of the company, it would be only natural to reorganize the firm with new profiles and “more industrial dynamics” to which di Marco is accustomed.

Marketing and communication tools “more in line with a luxury holding” will be necessary to support this growth and reorganization, he added, “strengthening its corporate communication and a very precise brand aesthetic separated from the collections’ style and cultural context they draw from.” He believed Dolce & Gabbana is very capable of achieving this.

Separately, this fall, Dolce & Gabbana is expected to open a new three-story flagship on the corner of Via Montenapo-leone and Via Bagutti in Milan. It is the same building that formerly housed the Ralph Lauren boutique, located in the city’s Golden Triangle luxury shopping district.

Dolce & Gabbana Plans Job Cuts, Sources Say CONTINUED FROM PAGE 1

A Dolce & Gabbana store in London.

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5 AUGUST 2016 11

quarter, despite the mixed economic environment,” said chief executive officer Federico Marchetti. “The positive momen-tum maintained across all our business lines demonstrates the strength of our model and its significant potential for further profitable development.”

In the six months ended June 30, adjusted earnings before interest, taxes, depreciation and amortization grew 15.2 percent to 76.5 million euros, or $85.6 million.

The growth was fueled by the core in-season designer business, which includes Net-a-porter, Mr Porter, Porter, Thecorner and Shoescribe. Revenues on those sites accelerated in the second quarter despite increasingly tough com-paratives and a slowdown in growth at Thecorner and Shoescribe following the reduction of marketing investments ahead of the discontinuation of the two e-stores in the third quarter. The strong quarter led to a 10.5 percent gain in revenues to 490.1 million euros, or $549 million, in the first half.

Prada, Tiffany, Moncler (in August) and Ermenegildo Zegna joined the in-season business line, and capsule collections from Gucci, Dolce & Gabbana, Chloé and Oscar de la Renta all launched in the second quarter, as well as Aspesi and Moncler Gamme Bleu. As of June 30, the multi-brand in-season business line accounted for 54.6 percent of group sales.

During a conference call with analysts, responding to a question about these high-profile brands, Silvia Scagnelli, cor-porate development and investor relations

director, said “the focus is on brands that have longer online sales potential — dig-itally ambitious brands, not necessarily the biggest brands.” She admitted it was important to include prestige brands such as Prada and Tiffany, which are “very appealing to high-spending consumers.”

The multibrand, off-season business line, which includes Yoox and The Outnet, registered sales of 318.3 million euros, or $356.5 million, up 18.6 percent compared with last year, and accounting for 35.5 percent of the total. The Outnet intro-duced Golden Goose and Proenza Schouler handbags.

The online flagship’s business line achieved sales of 88.7 million euros, or $99.3 million, a 10.8 percent gain and accounting for 9.9 percent of the total. The new online Chloé store was launched in June in Europe, the U.S. and in the Asia-Pa-cific region, including China.

Sales in Italy rose 19 percent to 57.5 mil-lion euros, or $64.4 million, with a positive growth in the U.K. in the second quarter. In that country, sales grew 14.3 percent at constant exchange rates and 5.1 percent at current exchange rates to 70.2 million euros, or 78.6 million, despite the slow-down seen over the last two weeks of June, around the dates of the Brexit referendum. In the first half of this year, sales in the U.K. totaled 135.2 million euros, or $151.4 mil-lion, up 15.4 percent at constant exchange and 8.6 percent at current exchange.

“In the U.K., the second half of June was flat, while the region was performing well before. July was off to a slow start but is progressing back to normal, it’s not flat and growing. Europe is back to normal, the U.K. is not there yet, but improving,” said chief financial and corporate officer Enrico Cavatorta.

Europe, excluding Italy and the U.K., accelerated in the second quarter, thanks to the strong performance of France, Germany, Spain and Russia, leading to first-half revenues of 238.4 million euros, or $267 million, rising 14.3 percent.

North America grew by 12.5 percent

at constant and current exchange rates to 268.1 million euros, or $300.2 million, reflecting a very tough comparison base in the first half (up 24.9 percent at constant and 53 percent at current exchange rates). The region was affected by “heavy com-petition from department stores, which increased their markdown with higher percentages and anticipating timing. Net-a-porter and Mr Porter did not follow this strategy. Softer sales reflect a gross margin that increased in the semester,” said Cava-torta. This is also part of preserving the relations with the brand, said Scagnelli.

The rest of the world, driven by the “excellent performance” of the Middle East, grew 13 percent to 60.4 million euros, or $67.6 million.

Cavatorta said headwinds from foreign exchanges deteriorated in the second quarter compared with the first quarter. There were severe headwinds, the British pound was 8 percent weaker and the Rus-sian ruble 22 percent weaker in the second

quarter compared with a year ago, he said.In the first half, the group continued

to invest in its technology and operations and capital expenditure amounted to 48.1 million euros, or $ 53.8 million, compared to pro-forma capex of 46.9 million euros, or $54.8 million, in the same period of the previous year.

In particular, over the period, the group prepared for the rollout of the new Order Management System on the former Yoox Group, with the successful migration of the first online store. The transition of all the former Yoox Group’s online stores to the new OMS is fully on track for completion in the fourth quarter of this year. The new OMS will allow for seamless inventory integration between YNAP and its brand partners’ retail stores.

The first half of 2016 also saw the kick-off of the construction works for the new in-season warehouse which will be located in Italy and is expected to become fully operational in 2018.

As of June 30, the group’s net financial position was positive at 138.8 million euros, or $155.4 million, compared with a positive net financial position of 62.1 million euros, or $72.6 million, at the end of December. The increase in cash in the first half of was mainly attributable to the 100 million euros, or $112 million, in equity capital raise subscribed for by Alabbar Enterprises in April, which funded the higher ordinary net working capital and the capital expenditure invested in inno-vation and the convergence to a shared global platform.

In July, the A|X Armani Exchange brand was launched in North America as an extension of the existing partnership with Armani.

Cavatorta said he was not changing the group’s revenue guidance — a high-teen growth at constant foreign exchange rates. “We are not exactly there, but we expect an acceleration in the second half.”

Dollar figures were converted from the euros at average exchange rates for the periods to which they refer.

YNAP Profits Climb 15.2%, Strength SeenFor 2nd Half CONTINUED FROM PAGE 1

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● The department store could ultimately decide to roll out leased Halloween shops at its locations.

BY DAVID MOIN

Macy’s will open a Halloween pop-up shop at its Herald Square flagship on Sept. 1, collab-orating with Grandin Road.

It’s the first-ever Halloween shop for Macy’s, and the first pop-up shop for Grandin Road, an HSNi-owned direct marketer of home furnishings and decor. In the past, Macy’s hasn’t capitalized much on creepy crawlers and illuminated pumpkins, but the tie-in with Grandin Road suggests an opportunity to sell more products related to

celebrating Halloween.The 1,400-square-foot pop-up could also be

construed as a test to see if a bigger partner-ship with Grandin Road, such as opening multiple Halloween shops at different Macy’s locations next year, could work. Macy’s has become very receptive to planting new ideas and experiences in its stores, including leased shops with Sunglass Hut, Motherhood Mater-nity, Starbucks, Lids and Best Buy.

For Grandin Road, creating a pop-up at Macy’s “is really about bringing the full brand experience to life,” said Jennifer Reeves, senior vice president of brand marketing at Grandin Road. “We’ve actually never done a pop-up shop before,” though she noted Gran-din Road does operate a few outlets.

Asked if there could be pop-ups at several Macy’s locations down the road, she replied, “We’ll see how this works. Hopefully, we will

have the ability to do more as we go forward.”While Sept. 1 seems early to open a Hallow-

een pop-up, Reeves said September is “prime time for Halloween shopping” at Grandin Road, which actually launches Halloween product in July.

At Macy’s, Grandin Road will be a leased shop, with products also displayed in two windows on the Seventh Avenue and 34th Street side of the flagship. The shop will have four merchandise vignettes themed Fright-fully Fun, Bewitching, Halloween Glam and Macabre and Mystical.

“Macy’s is known and loved for its place in bringing the holidays to life for customers across the country. The new Halloween at Macy’s Herald Square was designed with that tradition in mind,” said Shawn Outler, senior vice president of leased businesses for Macy’s.

While Halloween wasn’t a big priority in the past even though it is one of the high-est-spending holidays in the U.S., “We’ve been interested in the Halloween business for a while,” Outler said. “This is the first time we have done something on this scale. The shop really allows us to leverage Grandin Road’s expertise in the space. They are great retailers for Halloween products.”

Asked if this could be considered a test for a bigger partnership with Grandin Road, Out-ler replied, “Absolutely. If this really works, we definitely see an opportunity.” While Macy’s is also interested in further developing its home business, Outler said the focus with Grandin Road at present is with its Halloween business.

Grandin Road was launched in 2003 and has been selling its Halloween line for over a decade. In 2015, Americans spent $6.9 billion celebrating Halloween, and $1.9 billion of that was on decorations, according to the National Retail Federation.

RETAIL

Macy’s Says ‘Boo’ On Sept. 1 With Halloween Pop-up

From Grandin Road’s assortment for the

Macy’s Halloween shop.

12 5 AUGUST 2016

The fashion world is quick to jump on the latest and greatest freshly opened restaurant on the city’s scene — and just as quickly move on to the next thing. But in the months following the Febru-ary opening of La Sirena, Mario Batali’s first New York restaurant in almost a decade, something surprising has happened: The fashion crowd is sticking around.

Fashion houses from Hermès to Louis Vuitton sought out the Chel-sea space for their private dinners, and magazines followed suit. When InStyle threw a celebratory dinner toasting its July cover star Jessica Alba, it was in the north cabana at La Sirena. For Gwyneth Paltrow’s latest Goop dinner, or when The Cut toasted Linda Wells, La Sirena was again host. Aside from a prime location inside the Maritime hotel and a world-famous celebrity chef owner, what is it about the restau-rant that has it at the top of every event planner’s list?

“What we’re doing here is very unique,” says the restaurant’s events director Kathryn Gillan. “You don’t have this kind of square footage in the city, [a place] that’s an events space, but also a restaurant group. [Because we’re a restaurant group] our focus is always the food and the service. So what you have here is the square footage you would have at Milk Studios, or Spring Studios, or Park Avenue Armory, but you’re

getting the food and the service, so I think that’s an important, huge draw for people. Also the duality of the spaces, the indoor/outdoor options — you’re totally safe if it rains.”

La Sirena’s options for entertain-ing are vast. In addition to the 250 people dining inside the restaurant downstairs, there is seating for 150 people outside and three event spaces: a private room downstairs and two cabanas upstairs, north and south. The north cabana has a separate kitchen and the space will eventually have a full-time separate banquet staff.

“In theory, we could have three parties going on at once — an event downstairs, and then one in each cabana,” Gillan says.

Another draw is the ability for customization. Bronson van Wyck

recently planned an event for Fossil, which saw pitched teepees, an embossing station and a picnic lunch spread. “You can come in and have it as it is, or you can completely transform it, and it’s just as fabulous,” Gillan says. “If you say you want to clear out this entire space and cre-ate an ivy ceiling, which Bronson did, or put down a different floor, that’s fine by us. And I think that appeals to that crowd, because production and event spaces aren’t always so flexible.”

The majority of their events have been in the “beauty, fashion, p.r. world and then mostly social,” Gillan says, with an expected bump in corporate parties come fall. September is scheduled to be a big month for events, starting with a string of fashion week parties, including one

thrown by a “huge fashion house that I could not be more excited about” — but which, for now, she can’t name.

So far, La Sirena has hosted close to 50 events between the north cabana and the space downstairs; the south cabana has only recently opened, adding a new option. “The goal is to have events every night,” Gillan says.

Most diners of the downstairs

restaurant come for Batali’s food, naturally, and upstairs is no differ-ent. The menus are derived from all those offered downstairs, and while customization is offered, it’s hard for hosts to pass on Batali’s dishes like sweet corn agnolotti with basil butter and rotating daily crudo offerings.

And while La Sirena has been busy even in the doldrums of a New York summer, Gillan believes the

space is going to be in ever-increas-ing demand. “To really have these kinds of events, where we’re having fashion houses come in and com-pletely transform these spaces, and to marry that with a restaurant style of service and food, is a challenge,” she says. “But I think once we mas-ter it — which I feel like we’re starting to — there is no other restaurant group that’s doing this right now.” — LEIGH NORDSTROM

“The story was so insane that I couldn’t believe it actually hap-pened,” began Jonah Hill, speak-ing from the emptying lobby of Metrograph on Wednesday night. The actor had suited up in a navy suit and a Dries Van Noten (“He’s cool,” Hill said) lip-print tie for the premiere of his latest movie “War Dogs,” a comedy-action film based on real events from the 2000s. A crowd was filing into the downtown theater for a screening of the film, which stars Hill and Miles Teller as two young men from Miami who enter the weapons trade, bidding on contracts to supply U.S. allies with guns and ammunition in Afghanistan.

“The character of Efraim is so explosive, manipulative and kind of ugly that I found a real challenge in like, the idea of, how am I going to make this person enjoyable to watch?” Hill reflected on the allure of his arms-dealing character. “And exploring people that go outside con-ventional moral boundaries to get what they want, to find their version of success. He’s definitely someone

who embodies that.”To prepare for the role, Hill dove

into researching Miami culture. “I found that Miami culture kind of breeds wheeling and dealing, and people that are always kind of on their hustle,” he said. “There’s a real sort of American Dream culture in Miami for sure.”

“I think people a lot of times are defined by where they grew up,” said a platinum-tressed Teller, providing an analysis for their characters’ mo-tivation. “And for these guys growing up in Miami — their favorite movie is ‘Scarface’ — there’s a certain kind of hunger that comes from just wanting to get to the top. For them it wasn’t going to be promoting, it wasn’t going to be with music or sports, but it was going to be with guns. And they just sort of bullshit their way to the top.”

The actor has his dad partially to thank for his role in the movie. “My dad actually came to me about

the story. My dad saw that Todd’s company had bought the rights to it, and he said, ‘Dude, you should tell Todd [Phillips, the movie’s producer and director] that you need to be in this.’ And I saw Todd at a restaurant, maybe like two-and-a-half years ago and about a year before making this, I said, ‘Hey man, my dad just told me you gotta put me in this, it looks great,’” Teller continued. “I gotta tell my dad to talk to P.T. Anderson next.”

In fact, next up for Teller is “Granite Mountain,” another film based on true events about the Yarnell firefighters tragedy that required the typically brunette actor to go blonde. “I’m having a lot more fun,” Teller deadpanned of his new look. “For me, for my personality, I’d never do anything that was going to require more maintenance, anything. So I’d never do this in my personal life.”

But anything for the hustle, right? — KRISTEN TAUER

Inside Mario Batali’s La SirenaThe event space is the go-to pick for fashion parties, after hosting dinners with Gwyneth Paltrow and Jessica Alba.

Jonah Hill, Miles Teller Premiere ‘War Dogs’The two star in the film as arms dealers from Miami.

A look inside Mario Batali’s

La Sirena.Sweet Corn Agnolotti

with Basil Butter

Hilary Rhoda and Sean Avery

Todd Phillips, Jonah Hill, Miles Teller

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Time Inc. Shares HitShares of Time Inc. slid 8.4 percent to $14.33 Thursday, as the company reported lower-than-expected quarterly revenues due in part to the troubled print market.

Despite growth in digital advertising revenues, the publisher, which has been in the process of reorganizing its business side, was unable to make up losses in print advertising and dips in circulation.

The publisher of magazines such as Time, Fortune, Sports Illustrated, InStyle and People, slashed its annual guidance for the year, as a result of the still turbulent print environment, and

said it expects to incur $35 million in restructuring costs related to the recent reorganization.

For the second quarter ended June 30, Time Inc. said net income fell 25 percent to $18 million, or 18 cents a diluted share. This compared with year-

ago income of $24 million, or 22 cents a share. Excluding items, the company earned 22 cents a share.

Quarterly revenues slipped 0.5 per-cent to $769 million versus $773 million, a year earlier.

Analysts were looking for EPS of 15

cents on revenues of $782.5 million.Drilling down deeper into Time

Inc.’s revenue picture, sales from print advertising declined 12.8 percent to $299 million, while digital ad revenues grew 64.9 percent to $127 million. Subscription sales slid 7.2 percent to $154 million, as newsstand sales dipped 9.8 percent to $74 million and revenues from circulation decreased 7.1 percent to $236 million.

Time Inc. chairman and chief execu-tive officer Joe Ripp said on a call Thurs-day morning to investors: “In a world that is increasingly becoming mobile first and is dominated by Facebook and Goo-gle the pace of change is accelerating. There is a tremendous sense of urgency to our transformation work. We complet-ed our spinoff just over two years ago and began our transformation journey.”

That journey is still under way. The company reorganized its business side to clusters versus magazine titles. Ripp said the teams will “service brand am-bassadors and promote brand-specific advertising solutions.”

Ripp said on the call that 500 sales-people at Time Inc., who were focused

primarily on print, have been impacted by the changes. In some cases, their jobs have been eliminated and they were given a new focus, but he didn’t put a number on how many people were (or will be) let go in the reshuffle. Sources said Time Inc. has let go of about 110 employees from across the company — not just the sales group.

A spokesman from Time Inc. declined to comment on the layoff number, but added: “We have not identified any further restructuring actions outside of the expected [$35 million] charge we announced today.”

The ceo did note that the new structure, which includes a rehaul of its editorial, publishing and corporate teams, “enables” the firm to “integrate” across “edit, digital, brand management and native [advertising] solutions.”

Nonetheless, Time Inc., which brought in $3.1 billion in revenues in 2015, said it expects 2016 revenues to be between flat to up 1.5 percent higher than a year ago, compared with growth of between 1 and 5 percent it previously forecasted. Analysts are looking for revenues of $3.16 billion. — ALEXANDRA STEIGRAD

Memo Pad

● In Hero Shop, Bay Area native Emily Holt hopes to build a community destination that embraces San Francisco’s style and culture.

BY MAGHAN MCDOWELL

Having left behind the life of a fashion editor in New York and WWD’s Eye editor, Emily Holt is establishing herself in one of San Francisco’s grittiest neighborhoods, offering her take on the retail experience with Hero Shop.

The boutique, at 982 Post Street in the Tenderloin neighborhood, quietly opened in July, but has been two years in the mak-ing. Holt sees it as a highly curated destina-tion comparable to Colette in Paris or Ikram in Chicago.

She acknowledged that some have wondered if she’s crazy, getting into brick-and-mortar retail in the center of the tech universe. But she said wouldn’t have left Manhattan if she didn’t see enormous opportunity.

She’s aware of the risks, but is stubborn.The store carries aspirational brands such

as Adam Lippes, Creatures of the Wind and

Of Rare Origin, but also displays a certain awareness of its geographic proximity to Google, Apple and Facebook — and their less-than-formal reputation. Holt, who is from nearby Los Gatos, embraces the laid-back ethos.

The tech world, and its Bay Area deni-zens, need not be antithetical to style or taste, and Hero Shop need not be austere.

The store carries local brands such as Tatcha, MMClay ceramics and Levi’s, in addition to Vans sneakers and “California” T-shirts from Oakland’s Never Elsewhere. Among the $5,000 Myriam Schaefer hand-bags, there are accessible, giftable Fishs Eddy glasses for $7.50 and a range of books. “Everyone can participate,” Holt said. “Not just if you’re size two and rich and fashion-able.” The store also carries gadgets, such as Master & Dynamic headphones (Holt wears an Apple Watch).

The neighborhood, which has slowly wel-comed businesses such as Jane Bakery and Jay Jeffers, was chosen in part for its San Francisco heritage. This is not Maiden Lane, which houses Maison Margiela and Chanel.

Holt sought investors in part through an Indiegogo campaign, through which she raised more than $45,000. She’s also been gaining traction as something of a style

ambassador to San Francisco, participating in panels and hosting intimate gatherings to connect like-minded people who have also decamped from New York.

It’s an approach she intends to maintain by hosting book signings, dinners and salons. Holt calls Hero Shop a “community center that sells things.” To that end, she added a restroom, sink and fridge during the renovations, in addition to dressing rooms and other updates.

So while the tech world might not need a hero, the analog world could use a cham-pion. Plus, she said, “This city deserves to be perceived positively.”

FASHION

A Hero for San Francisco

San Francisco’s Hero Shop.

Time Inc.’s New York

headquarters.

Small WorldChanel is going small with the new iterations of its cult J12 ceramic watch. The French luxury brand will launch the J12 XS, with a diameter of just 19 millimeters, in stores at the end of August. The name of the watch is a play on the initials for “extra-small” and the word “excess.”

The timepiece will be available in four boutique versions. It comes in black or white, on a slim patent leather calfskin strap that can be worn on its own or over a matching matte calfskin cuff with silver piping, with a price tag of $4,975.

Another alternative is to wear the watch over black lambskin fingerless gloves from Causse. Available in a

limited edition of 150 pieces and priced $7,550 per pair, this option is a nod to Chanel creative director Karl Lagerfeld, who is rarely seen without a fancy pair of gloves.

A large cuff version consists of six slim black patent leather straps mounted with the watch dial and mobile steel loops set with diamonds. There are also a dozen one-of-a-kind high-jew-elry options, with prices ranging from $10,000 to $105,000. Highlights include a novelty ring version, priced $35,000, that is worthy of a James Bond movie.

Chanel tapped Lesage, which already embroiders some of its watch dials, to hand-decorate cuffs with se-quins and glass beads to simulate the appearance of shagreen, python and alligator leather. Available in black or white, they retail for $38,000 each.

The pieces were unveiled in New York on July 19. Chanel is staging a pre-sentation in South Korea on Thursday, followed by Shanghai on Aug. 16, Tokyo on Aug. 25 and Hong Kong on Aug. 31.

The official press launch will take place in Paris between Sept. 8 and 13, once the collection is already on sale.

Chanel regularly issues updated versions of the J12, the brainchild of its late artistic director, Jacques Helleu. Launched in 1999, it has been credited with popularizing the use of ceramic in watch manufacturing. — JOELLE DIDERICH

AAFA’s ChoiceThe American Apparel & Footwear Association has selected the Fashion Manufacturing Initiative, part of the Council of Fashion Designers of Ameri-ca, as its beneficiary for the 2017 AAFA American Image Awards, revealed Rick Helfenbein, president and chief executive officer of the AAFA.

The American Image Awards will take place on April 24 at 583 Park Avenue in New York, honoring Person of the Year, Retailer of the Year, Company

of the Year, Designer of the Year and Fashion Maverick.

FMI, in partnership with the New York City Economic Development Corp., or NYCEDC, funds grants for advance-ments in manufacturing and training, design innovation and production intelligence. Established in 2012, the FMI has awarded more than $2 million in grants to emerging businesses that are incubating new products and processes to strengthen the industry’s workforce in the future.

In supporting FMI, Helfenbein said, “We are committed to advancing the people, policies and processes that are imperative for our industry to grow and profit in a rapidly evolving economy.”

“The CFDA Fashion Manufacturing Initiative is an important program to preserve garment manufacturing in New York,” added Stephen Kolb, president and ceo of the CFDA. “With the support of the AAFA, we are able to continue and expand those efforts.” — LISA LOCKWOOD

Fashion Scoops

The black small cuff version of Chanel’s J12 XS watch.

14 5 AUGUST 2016