By Andrew Nodell

Givenchy and Louis Vuitton, as well as Hot Topic and Kohl’s, have created products inspired by the 75-year-old character.

With an opening weekend of $223 million in worldwide box office sales, “Wonder Woman” has proven its profitability for Warner Bros. and DC Comics. But the film stands to bring in even more revenue given the dizzying number of product collaborations tied to the summer blockbuster.

Luxury brands such as Givenchy and Louis Vuitton along with mass-market retailers like Hot Topic and Kohl’s have all created products inspired by the 75-year-old character.

“Wonder Woman is a pioneer in many ways including being a fashion icon,” explains Soo Koo, Warner Bros. Consumer Products’ chief creative officer. “These collections celebrate her as an iconic superhero and empower fans of all kinds to be confident and strong.”

For Koo, it was the film’s overt message of female empowerment and resilience that made it an attractive fit for a broad range of retailers, whose designs were all ultimately approved by the production company. “The legacy of ‘Wonder Woman’ is a powerful and positive one and brands definitely see a positive in attaching themselves to that kind of messaging.”

On June 7, brands including Stella McCartney, Kenzo, Lanvin, Versace and Karl Lagerfeld among others will unveil prêt-à-porter pieces inspired by the character at an auction in Paris with proceeds going to support African women through the Lemlem Foundation.

Other officially licensed products on the market include Alex and Ani charm bracelets set with the classic “W” logo, a tri-colored Betsey Johnson backpack and a Hot Topic x Her Universe collection, which was designed by fans of the character.

“There was a contest held at Comic Con,” Koo explains. “Three girls won with original designs and were chosen to create a collection, which has more of a lifestyle approach than character art, but it’s the essence of ‘Wonder Woman.’”

Kim Vernon, President of brand growth consultancy firm Vernon Company and former Calvin Klein executive, finds that “essence” — paired with the worldwide political climate — has been helpful in Wonder Woman’s current success. “You have a moment where women are joining up and being vocal because our rights are being challenged,” Vernon observes. “People buying Wonder Woman merchandise are buying into the ideology of the strength of women.”

Vernon notes that a broad range of price points in such product collaborations is atypical yet unsurprising given the franchise’s broad appeal. “The risk is the same as any collaboration or any licensed product,” she continues. “They’ve really made it accessible to all women and that’s the point. I’m hard-pressed to find much bad about all of it outside of ugly product.”

Koo notes how the character — who will also appear in the November release of “Justice League” — is a year-round business for Warner Bros. who have no plans to slow down licensing collaborations. “We’re going to have her product out there quarter after quarter in both high-end and mass-market settings,” Koo reveals.  READ FULL STORY

By Lisa Lockwood with contributions from Arthur Zaczkiewicz

Just how involved should a fashion or retail chief executive officer get in politics these days?

With the social media backlash over everything from Under Armour ceo Kevin Plank’s support of President Trump’s pro-American stance to Nordstrom dropping Ivanka Trump’s line because of poor performance, ceos are finding themselves — and their companies — under fire for their political positions, even if those stances aren’t firmly in favor of all of the president’s policies.

And where most major companies have long had crisis-management plans in place for natural disasters or other things that could impact their operations or brand, experts say retailers and fashion firms now need full-time political strategy teams to figure out how to handle the disruptions of the unpredictable Trump Administration. The consensus is ceos should be prepared with a very clear point of view because it’s possible they’ll be dragged into the fray even if they may not want to be.

“I think the pressure is just going to ratchet up on ceos to be speaking out as leaders. Some of them will find the right tone and the right voice. It’s got to be a balancing act,” said Sydney Finkelstein, professor of management and leadership at the Tuck School of Business at Dartmouth College and author of “Superbosses.” Finkelstein believes that ceos can’t live in fear of being the subject of one of Trump’s tweets or the victim of a boycott. “You have to do the right thing for your employees, your customers and your shareholders,” he said.

Rick Helfenbein, president and ceo of the American Apparel & Footwear Association, addressed the need for ceos to be proactive. “The Founding Fathers put the First Amendment as number one for a good reason. In a democracy, everyone first owns the ability to maintain their right to express opinions. However, in the current political environment, as a fashion ceo that act of expression is easier said than done. What a President or First Lady wore used to set a trend for our fashion industry. Now we are afraid to align with one person or one party for fear of any criticism that could ultimately affect our brand, or impact our bottom line,” said Helfenbein. He said that the AAFA has been inundated with calls the last few months, encouraging AAFA to be vocal on a number of issues. “Whether it’s NAFTA, China, Mexico, or trade in general, our phone continues to ring. Probably the most prominent issue right now is the concept of a border adjustability tax, which is a measure proposed by House Republicans, as part of a larger blueprint called ‘A Better Way,’” said Helfenbein, who added that a BAT would have significant adverse impacts on the fashion industry. As a result, AAFA has joined with a larger group of associations to highlight the damage a BAT would cause. The National Retail Federation also is speaking out against it, including with TV ads aimed at consumers to highlight how much extra it would cost the average shopper. He noted that no matter what one’s beliefs are, no one wants to become a tweet target. “It’s just not good for business,” he said. “Our $380 billion apparel and footwear juggernaut does carry significant weight in Washington as we all work to express our issues in the public domain. We must continue to make every effort to better protect and grow the four million industry jobs that we all represent,” he said. When it comes to tweets, some people believe that Trump went overboard in calling out Nordstrom.

“If the product was selling, these guys [Nordstrom] wouldn’t give a damn,” said one industry source, who requested anonymity. “Retailers, by and large, don’t make decisions like this for political purposes. Their job is not to think what their consumers’ political philosophies [are]. Their job is to provide an assortment of products that they believe their consumers will like.” The source noted that the Nordstroms aren’t controversial. “They are merchants, and they’d take the heat. Who in the world would get rid of this product when 50 percent [of the country] voted for Donald Trump and 50 percent voted for Hillary [Clinton]?” he said.

A more active and politically engaged shopper who votes with her dollar is also impacting spending online as well as in stores. Every weekend since the women’s march has featured some form of protest, which includes demonstrations against the so-called ban on Muslims to defunding Planned Parenthood.

Mike Catania, chief technology officer of PromotionCode.org, said against a normalized baseline such as holidays and economic factors, the women’s march on Jan. 21 “caused a 14 percent drop from female shoppers online that day and 8 percent of male shoppers.”

“That drop might not seem huge, but it’s on par with Easter, a notoriously low-shopping day,” Catania explained. “For reference, although not a protest, the day after the election (in the heart of holiday shopping), we saw a year-over-year drop of 12 percent that was unable to be attributed to anything other than the election results — and took eight days to fully rebound.” Chris Allieri, principal of Mulberry & Astor, a marketing and communications consultancy, said the age of consumer activism is just beginning. “While we see the president weighing in on Nordstrom, we will likely see more of that in the weeks and months to come,” he noted. “I think that consumer awareness of brands that stand for something, invest in the community and are good employers will be rewarded,” Allieri said. “This isn’t about ceos tweeting with the president, but rather what do these brands stand for? A brand’s actions and behavior — including what their ceos say and do — is more and more public. Brands are being thrust into the political debate, sometimes reluctantly.”

Allieri said companies that take bold actions such as Starbucks’ call to hire 10,000 refugees globally, “will be rewarded by their brand loyalists, and potentially bring out new believers. Regardless if Nordstrom, TJX, Burlington or Neiman Marcus made their decisions for purely financial reasons, I think that they will see an uptick of support from those opposed to the president.” Some consultants feel not taking sides is the best policy. “It’s expedient in today’s climate to be neutral. I think there’s a convergence of different things that are going on that I’ve never experienced, nor probably most other people. Whether you like Trump or you don’t like Trump, this is a country that needs to work together. It’s not about the goals of the political parties,” said Andrew Jassin, managing director of Jassin Consulting. “People need to be smart enough in today’s world with what’s going on, to not express it outwardly, unless they can deal with the consequences or the opposite side of their view.”

Jassin suggested that perhaps Ivanka Trump should have said that she would donate all her royalties from her clothing and accessories line to charity. “Right now there’s no tolerance for an opposing point of view from either side,” agreed Bud Konheim, ceo of Nicole Miller. “What it does is create an adversarial feeling out there or a hate-filled feeling, and that is not conducive to shopping. It’s not conducive to having fun with clothes,” he said.

Industry expert Matthew Rubel suggested companies have a mission, a vision and a value system that’s clearly articulated. “Having that and not stepping out of that will enable you to be an advocate in today’s world without becoming political,” he said. His advice is to realize that this is real. “This is not a passing thing, but would be a growing thing…public company ceos take on an obligation to not express their own personal opinion when they’re at a pubic company.”

Kim Vernon, ceo of Vernon Co., a consulting firm, believes that ceos of public companies and private equity or venture capital backed brands “should not be using the company as a platform to express their personal political platform, as they are representing the brand whose constituents (and customers) have a rightful range in view points.” Having said that, she added that any American citizen has the right to privately support any cause, among peers or with personal finance. For example, she said it is possible that Plank “went a bit too far” in his statements in favor of Trump and his administration, “but has since clarified them, somewhat appeasing his customer base, showing the fine line between social issues and political.” She added that when human rights are being violated, as in sweatshops, or environmental hazards, “ceos should speak out and use their leadership positions to educate customers and peers. These are social issues, not political. They are different,” she said. Vernon added that privately held company executives are more free to act upon their political beliefs, with no recourse from shareholders and investors. However, the leadership must be prepared to have boycotts that might affect sales. “Boycotting and conversely supporting brands that share one’s political values is a right, that in a divisive political climate, will happen,” said Vernon.

The impact of all this political turmoil is bound to be evident in branding. Trey Laird, ceo and chief creative officer of Laird + Partners, said that some brands will choose to do more socially aware campaigns. “I think it depends on the brand, as long as it’s authentic. If someone does it to get attention and exploit the mood of the day, it doesn’t seem authentic,” he said. “More brands are asking for more socially aware campaigns. That’s the age we’re living in, and that’s the dominant conversation. Not every brand has to, but it’s in the air and brands are considering it. Some brands just want to be about joy,” said Laird. Ad guru David Lipman feels that companies should speak out about issues they care about, and their brand should reflect that. “I don’t believe in speaking negatively when it comes to promoting your brand. I think you can socially say anything you want to say, but once you become political, it can really backfire on you,” said Lipman. He believes that speaking out about the environment, education, for not building walls or boundaries aren’t political statements. “Those are social statements,” he said.

Allen Adamson, founder of Brand Simple, a New York-based brand consultancy, believes that brands need to think it through before aligning with a controversial topic. “To some extent, the rule of thumb today is to look twice before jumping into the fray. What seems like an easy decision is often fraught with complexity, it’s volatile. For every customer you make happy, you might make one equally unhappy. “My advice to clients is try to resist being sucked into it until you’re sure you’re ready, and you’ve thought through how you’re going to do it and the pros and cons and you understand your user and your customer really well. It’s easy to get into and hard to get out of,” he added. Robert Burke, ceo of consulting firm Burke Associates, said that brands and designers have never been in a position like this before. “They are taking a stance when it comes to the border adjustment taxes, because they need to, and certain companies have spoken up against the immigration ban because they have people affected by it, or have strong positions on it. As far as having a certain vocal stance, they need to pick and choose which issues are most important to them.” He said some designers, such as Prabal Gurung, have chosen women’s rights as their topic of activism. The designer’s models sported feminist T-shirts that read slogans such as “The Future Is Female” on the runway. “Certain designers have had very definite opinions, but they kept them as personal opinions, as opposed to company opinions.”

Wendy Liebmann, ceo of WSL Strategic Retail, said, “What’s different today, is companies need to have a very clear point of view because they may be dragged into the fray even if they might not want to be. There are so many social issues today that companies are pulled into it. There’s a different dynamic now, and it’s combustible. It’s not only because of the evolving political landscape, but also there’s the beginning of an activism on the part of the consumers who have access to social media and can be very outspoken about the issues. You’ve got a changing political scene, lots of initiatives to change the culture of the country, as well as the economic, and a broad consumer base who have at their fingertips a way to be active and vocal and that’s changing the dynamic as well.”  READ FULL STORY

By WWD STAFF Kim Vernon, President and chief executive officer, Vernon Co. “I cannot project what Raf’s expression of the Calvin Klein brand will be, but I believe he has an extraordinary curiosity and grasp of culture and how it can be interpreted into clothing and objects. When I worked with Calvin, he was always inspired by what’s current, modern and sexy, always powerful. His dialogue went well past the clothes. Raf has the chance to advance the brand, with a new point of view, which after 14 years has been a bit repetitive and mixed in messaging. It will be interesting and exciting to see how he communicates the brand language on the runway, in packaging, in media, something he has not really had the resources or opportunity to do. It’s quite a big challenge to do that across all the channels and product categories that Calvin Klein is in, most of which is not in the designer price point. But it appears that Raf has a great capacity for creation and the discipline to handle it.”   READ FULL STORY

By Steven Kurutz

When Blake Mycoskie, the founder of the shoe company Toms, began talking with its executives a few years ago about opening retail outlets, he faced an impasse right from the start. It was over the word “store.”

“I didn’t want to start with a store,” Mr. Mycoskie said. “I didn’t feel like that added any value.”

Instead, he recalled arguing with his colleagues. “I said, ‘We have to call them community outposts.’ An outpost seemed like more of a meeting center, an area for information, almost a political rallying point. This is the place where things are happening.”

Mr. Mycoskie prevailed, and the company opened its first Toms Outpost three years ago in the Venice section of Los Angeles. A visitor will find a back patio with seating, free Wi-Fi and events like morning yoga classes and movie nights. There’s also a cafe serving cups of Toms coffee, a recent brand expansion.

And, oh yes, grouped in distinct spaces around the room, traditional Toms products like shoes and eyeglasses.

As Mr. Mycoskie put it, the idea was to create “a lifestyle for the brand.”

The Toms Outposts (there are now seven, with plans for more) are part of a reimagining of the fashion retail experience that has been taking place. The standard store, with its static racks, tables of merchandise and salespeople who can sometimes be unwelcoming, suddenly seems very undynamic. And the luxury boutiques, with their hushed, gallery-like atmosphere, feel sterile to many younger shoppers.

What is developing instead is a model of the retail store as a community center, a welcoming environment that offers experiences in addition to products.

In recent years, brands like Club Monaco have gone partway, carving out space in their stores for things like coffee and books. But the new model almost upends that thinking, putting community-building attractions in the foreground and making the apparel itself an afterthought.

That’s the concept at the Store, for instance, a retail space that opened last January inside Soho House Berlin. There are comfy, oversize couches designed by Axel Vervoordt and plants everywhere and a kitchen serving organic dishes. A D.J. plays music, and regular art installations are held. On a daily basis, people may spend hours on their laptops, just hanging out.

“It’s a place to be, a creative hub,” said Alex Eagle, the Store’s creative director. “It’s about a fresh-pressed juice as much as it is about an Issey Miyake sweater.”

Indeed, only about one-fifth of the 30,000-square-foot space is dedicated to traditional retail. That may seem like a risky business strategy, but Ms. Eagle said that filling the floors with merchandise wouldn’t have been a competitive advantage anyway.

“With everything being so easily available a click away online,” she said, “you have to offer an experience. People want something for their time.”

E-commerce, it turns out, is the big driver for brands to create community-focused retail spaces. If people can get fashion delivered to their doorsteps, why go to stores?

“Getting people into stores has become a huge challenge because the e-commerce experience gets better and better,” said Kim Vernon, a fashion brand consultant and industry veteran. “The smartest thing you can do is to get people in your store.”

The ways brands are doing that vary. Some, like Toms, are turning to coffee and events. Kit & Ace, a new streetwear brand with retail outlets in Canada, England, Australia and the United States, holds quarterly “Sunday Suppers,” catered by a local chef and promoted by word of mouth.

Nina Garduno, who founded the retail outlet and artist commune Free City Supershop in Los Angeles, is teaming with Light in the Attic, a record label, to open a pop-up record store in January. The concept is the latest in an annual reimagining of her retail space in which Ms. Garduno and her team develop a theme, asking artists to help create products, décor, art installations and events around it.

In many ways, Ms. Garduno was ahead of the curve. When she opened the Free City Supershop in 2010, she said, she envisioned the space like a laundromat in that “it brings your neighborhood together.”

She added: “It’s not enough to find more ways to make money, sell more clothes. It’s not giving enough. People don’t want to just buy to buy.”

That giveback thinking appeals to millennial shoppers, many of whom show an interest in social issues like the environment and a desire for philanthropy. They like to know the money they spend has a positive impact. Fashion brands, too, want to convey to consumers that their company stands for something beyond profits.

“We’re not just showing up as another retail brand,” said J. J. Wilson, a founder of Kit & Ace. “We’re looking at how we can impact the world for good.”

Mr. Wilson pointed out that at least 30 percent of every Kit & Ace store was built by creative people in the neighborhood, including, in many cases, the dining tables used for the suppers. Hiring local craftspeople makes each store feel unique, he said, but is also “our way of enrolling and getting the community excited.”

Philanthropy, and community-minded stores, are also a good strategy to battle the retail headwinds facing the industry. In opening the Toms Outposts, Mr. Mycoskie said, his company had to learn new businesses like food and beverage, and in some cities open its stores at the unheard-of hour of 6 a.m. for the commuter crowd.

But the decision was worth it, he said. Just as it was worth it when he decided nine years ago to start a company that would give away a pair of shoes to a needy person for every pair sold.

“There’s still room for companies that make beautiful products and that’s their sole purpose,” Mr. Mycoskie said. “But I do think it’s a competitive advantage if you make a great product and have a larger purpose that people can be a part of.”
  READ FULL STORY

By Evan Clark

Todd Snyder might have gotten a lifeline from American Eagle Outfitters — but it’s a rescue that probably isn’t available to many other designers looking for a backer.

That’s because Snyder brings with him not only his designer business, but the 24-year-old campus concept Tailgate, which has one store near Iowa State, as well as two decades of experience at other men’s wear brands, including stops at Polo Ralph Lauren, The Gap and J. Crew.

Snyder felt the ills of many emerging designers — he had exposure and brand image, but not enough scale to really flourish. “We’ve been self-funded for five years and it’s been stressful,” the designer told WWD last week, after cutting an $11 million cash and stock deal with American Eagle.

There are any number of designers looking for funds. Prabal Gurung, for instance, is said to be seeking a backer who can bring not just money, but also operational help. But it can be a long road.

For Snyder, the road ended with American Eagle. And dealmakers and analysts said the specialty chain crafted a transaction that leaves it with some extra design oomph and a fair bit of upside potential from Tailgate, but not tons of risk.

“The Todd Snyder thing is very clever of American Eagle,” said John Howard, chief executive officer of Irving Place Capital and a director at specialty chain New York & Company. “For them, it’s a way of extending out their reach and leveraging their expertise.”

But building out a small concept into a powerhouse could be easier said than done. American Eagle is planning on two or three new Tailgate stores next year, but over 200 down the line.

“The question is whether they can take it and create something exciting, like [J. Crew’s] Madewell out of it,” added Howard. “Can that be their Madewell? It takes a long time for that to be material. I mean, a really long time. This is a seed that they’re planting and they’re going to see what sprouts.”

American Eagle’s coming from something of a position of strength — comparable-store sales grew 9 percent in the third quarter — and clearly the retailer’s thinking of the future.

“It gives American Eagle a smaller, cool venue to reach people with a great margin product,” said Kim Vernon, president and ceo of consultancy Vernon Co. “Is this a big idea? I don’t think it’s big, I think it’s easy. I don’t think there’s a lot of risk in it for American Eagle. For American Eagle, I think it’s a very small deal. Todd is also an asset — he’s worked for J. Crew, he’s worked for his own brand. So bringing him into the fold of American Eagle is a good idea. It’s like hiring a great employee.”

More brainpower might be what retailers need to stand out in a changing marketplace populated by younger, tech-savvy shoppers.

“This is a really tiny business, but I think there’s an increased value placed on the ideation power of creative minds and to a certain extent tying them up or at least having a good relationship,” said Mortimer Singer, president and ceo of Marvin Traub Associates. “It doesn’t move the needle for them, but potentially medium to long-term, it can and that’s smart planning. You can’t just throw printed Ts at people and expect them to stick.”

Others see the need for new ideas more acutely.

“What else are they going to do?” said Elsa Berry, managing director of investment bank Vendôme Global Partners. “American Eagle and other specialty retailers really, really need to think differently. The physical retail space is going to be rethought completely.”

Berry said the overall M&A — including much bigger deals — could also make it a good time for brands to get a good price.

“We’re at a point where there’s just so much money and it’s not smart money anymore,” she said. “It’s money that just needs to be parked and that creates unrealistic valuations. It’s a market ripe for errors. It’s a good time I guess, if you’re selling, but if you’re a buyer you need to be really careful.”

For entrepreneurial fashion businesses with sales of $20 million to $40 million or so, Berry said, “It’s a good time to take some change off the table now.”
  READ FULL STORY

Tory Burch’s stock is on the rise.

A recent round of share swaps let some of the private fashion company’s early investors cash out with very healthy returns and valued the firm at $3.5 billion — an increase of about $1.25 billion over two years ago, according to sources.

That’s a lot of ballerina flats. And another sign that the firm is ready for primetime and perhaps closer to an initial public offering, even though co-chief executive officers Tory Burch and Roger Farah have both declared their affection for operating away from the klieg lights of Wall Street.

Sources said a total of $200 million worth of the company’s shares traded hands in the recent stock swap, with its largest investors buying out people who held smaller stakes. A spokeswoman for the company declined to comment.

Longtime shareholders Access Industries and Tresalia Capital as well as BDT Capital Partners and General Atlantic, which bought in late in 2012, are all believed to have kept or raised their stakes.

The last time the company raised money was in late 2012 in a deal that ended in a messy legal battle between Burch and her ex-husband Christopher Burch over the now-defunct C. Wonder. Prior to the sale, each of the Burches owned 28 percent of the company.

Although Christopher Burch held onto some shares after that deal, it’s not clear whether or not he still has stake in the firm and he declined to comment for this article through a spokeswoman.

The 2012 stock sale brought BDT and General Atlantic on board and, according to numerous sources, valued the company at about $2.25 billion. One financial source said that at the time, that amounted to roughly 15-times the company’s earnings before interest, taxes, depreciation and amortization of $150 million.”

So the company’s value appreciated a total of 56 percent over 2013 and 2014 — that’s better than rival Michael Kors Holdings Ltd., which fared on the public market with a 47 percent stock gain, but short of Kate Spade & Co.’s 157 percent jump. Coach Inc., which also plays in the accessibly priced handbag space, saw its stock fall 28 percent over the two years.

Those companies all garner higher valuations than Tory Burch, but their stocks are also constantly trading on the open market and reacting to the latest and variable winds of the financial markets. (Kors has a market capitalization of $14.9 billion, while Coach weighs in at $10.7 billion and Kate Spade at $4 billion). In the case of the Burch share sales, market forces are also at work and the price reflects the belief on the part of larger shareholders that the company will keep growing and the willingness of smaller ones to cash out.

The share sales at Burch do not have any impact on control of the firm or operations. But the company is said to have had a good holiday season and it’s useful to check the market and reset the company’s value from time to time since private stock sales set a baseline should the company take the plunge for an IPO.

The company seems to be picking up momentum, particularly with the arrival of Farah.

Hiring the former president and chief operating officer at Ralph Lauren Corp. was seen as a coup for Burch. Farah is widely regarded as one of the best ceo’s in the fashion world and his arrival cast Burch’s already well-regarded business in a new light for investors.

“There are not a lot of brands today that have the momentum that Tory Burch does and now they have with Roger Farah, I think, exceptional leadership,” said Kim Vernon, president and ceo of the Vernon Co. consultancy.

“If any apparel brand would have a higher valuation it would be Tory Burch,” Vernon said. “They’re still in growth mode, and there’s still tremendous value to create. It would not surprise me if there were some friends and family, early investors who would like to transact out considering the value that’s been created from the first couple years to today.”

Farah isn’t the only sign that Tory Burch continues to think big. Former Wal-Mart Stores Inc. ceo Lee Scott is also on the company’s board.

Those and other indications that the business is starting to expand made it a good time for some early friends and family to sell — particularly given how much Burch has soft-pedaled the prospect of an IPO in the near future.

“We enjoy being a private company,” Burch told WWD when Farah was hired in September. “I think having someone like Roger come on board really helps us to do things that we see we want to do and really have control.”

For his part, Farah said: “Being private is very attractive to me. I did not want to be in a public company. I think this company has the ability to look long-term in how they build the brand globally and how they make decisions. They’re extraordinarily well-financed and have tremendous cash flows that allow reinvestments and good ideas. As a private company, really rallying around Tory’s vision, there’s a lot we can accomplish.”

While adopting a slow-and-steady strategy, the Burch business has become more aggressive about expansion in the last 18 months. Beauty products were added in 2013 and watches came last year.

But as measured as Burch has been, her investors are not necessarily as patient, even though they are sitting on significant gains.

Some of the company’s backers are believed to be angling for an IPO this year or next, while others are willing to wait until 2017 or 2018.

The company, which was founded in 2004, is said to have surpassed $1 billion in retail sales last summer and has 2,500 employees and more than 3,000 points of distribution in more than 50 countries. Handbags and footwear account for about 80 percent of the business. And 75 percent of revenues come from the U.S. That translates to relatively fat profit margins for fashion and room to grow abroad.

It’s a story that big-money investors are going to want to sell on Wall Street sooner or later.
  READ FULL STORY

Gap Inc. is taking a page out of the LVMH Moët Hennessy Louis Vuitton playbook.

The U.S. retailer on Tuesday revealed it has taken a minority stake in contemporary designer Marissa Webb — who, in turn, is becoming creative director and executive vice president of design at the Gap Inc.-owned Banana Republic. The investment is a sign the Gap business model is adapting and that the company is ready to take new steps as it seeks to reinvigorate its brands in a competitive landscape.

Webb worked at J. Crew for more than a decade before leaving to start her own label in 2011.

Jack Calhoun, global president of Banana Republic, said Webb “has a keen understanding of our heritage and all that makes us who we are, but at the same time a strong vision for how we can move forward to make BR even more relevant for today’s market — both our current customers and those we want to attract.”

That suggests a certain desire to move things along at the brand, where comparable-store sales slipped 1 percent last year and total sales stalled at about $2.9 billion (making up nearly 18 percent of Gap Inc.’s total revenues).

Webb takes over from Simon Kneen, whose departure was revealed in October, when Calhoun said, “As we compete to win on the global stage, now is the right time to make a change.” Kneen favored collaborations, working with “Mad Men” costume designer Janie Bryant, Trina Turk, Milly and Issa and the late L’Wren Scott. Narciso Rodriguez was recruited to help the brand in August 2012, but left when his contract expired.

Kim Vernon, president and chief executive officer at the Vernon Company consultancy, said Webb could bring a younger point of view to Banana Republic.

“She did work at J. Crew and she did work at Club Monaco, and those are two brands that deliver a value with a lot of style, they pack a lot of punch,” she said. “The question is, ‘Who is Banana Republic?’”

Vernon noted that the brand carries traditional work looks and also collections from fashion powerhouses with some lower-priced items as well. “Banana hasn’t really determined who it is from a product standpoint for years,” she said. “In hiring [Webb] they are making a modern America move. I don’t think it’s super risky because she’s got that training from J. Crew and Club Monaco, which is a lot of [stockkeeping units] and balancing your margins and your price points.”

Allan Ellinger, senior managing partner at investment bank MMG, noted that Gap Inc. has worked with designers in the past, bringing in Patrick Robinson to oversee design at its flagship division.

“It works best when the designer kind of follows or understands the point of view of the store that she’s been hired to design for and can kind of make sure that she’s loyal to that point of view,” Ellinger said.

He added that Webb’s years at J. Crew will be “invaluable” as she transitions to another take on “modern traditional” at Banana Republic.

Michael Anderson, Banana Republic’s vice president of men’s design, and Melloney Birkett, vice president of women’s design, will both report to Webb, who will herself report to Calhoun when she starts on April 28.

Gap Inc. said Calhoun would also be “a strategic partner in the growth and development of her business.”

Webb launched her namesake contemporary label at Barneys New York in early 2013. It is now sold online and in more than 30 stores, inclusive of Gap Inc.’s Intermix division. Bedrock Manufacturing Corp., the investment and brand management vehicle of Fossil founder Tom Kartsotis, also has a stake in Webb’s business.

Webb was not available for an interview Tuesday, but she has been attending to her business, chatting up customers during a sample sale at her sixth-floor studio on 11th Street in Manhattan over the weekend, her dog in tow.

The investment in Webb’s business follows Gap Inc.’s purchase of Intermix last year, which showed a new willingness to have a hand in the contemporary market. There is also precedent, particularly in the designer sector, of big brands supporting their designer’s own businesses. LVMH, for instance, invested in Marc Jacobs and is now preparing a public offering of that brand. It also recently has taken minority stakes in Italian designer Marco de Vincenzo and, in London, designer J.W. Anderson. Its rival Kering, meanwhile, has invested in brands such as Christopher Kane and Altuzarra.
  READ FULL STORY

Los Angeles-based contemporary brand Bailey44 brought in a new partner to supercharge its growing business.

Norwest Venture Partners took a roughly 50 percent stake in the business and is a minority owner.

Ruthy Grode, cofounder and chief executive officer of the brand, said Bailey44 was using the new funds to build an e-commerce site, work on international expansion and expand its brand awareness.

Bailey44 is carried at Nordstrom, Saks Fifth Avenue, Neiman Marcus and Bloomingdale’s and has several hundred active wholesale customers throughout North America, Europe and Asia. The brand’s styles, which include lots of form-fitting dresses and tops with stripes, are all made in the U.S. of European-sourced knits.

“Our company has been profitable since its inception in 2006, and we’ve been fortunate enough to achieve substantial growth of at least 20 percent year after year,” Grode said.

The brand makes 12 lines a year and is always pushing to update its looks.

“We try to take it to the next level, we don’t do the same old fabrications,” Grode said. “We have a real sense of urgency.”

The e-commerce site, once it’s up and running, will give the brand a new and real-time view on what shoppers want.

And Bailey44 will be getting input from its new partners at Norwest.

“Not only will their capital be an asset to expedite [Bailey44’s] growth, but they have a lot of experience in the consumer brand sector that will help us,” Grode said.

Norwest general partner Sonya Brown and vice president Rob Arditi have joined Bailey44’s board.

Brown said Bailey44 is “well positioned for continued growth” and that the investor would be “working closely with the team to continue building a major force in the women’s contemporary apparel category.”

Norwest has funded more than 500 companies across numerous sectors since 1961.

Vernon Company advised Norwest on the transaction and has been working with Bailey44 on its growth and branding initiatives.

  READ FULL STORY

Here’s something you might not know about turtles: some of them can still have sex when they’re 200 years old.

“And they don’t even need Viagra,” Eric Goode said on Tuesday night.

It was the Turtle Ball to benefit the Turtle Conservancy, an organization he started in 2005. Mr. Goode is a man about town who is famous in the eyes of prehistoric party people for being one of the masterminds of Area, the 1980s nightclub. He went on to the Maritime and Bowery hotels, the Waverly Inn and more, but he has always had a ninja’s focus when it comes to his favorite creatures.

“There was a time when women interested me more, but no longer,” he said.

As if to underscore that point, he gazed lovingly at the snake-necked and pig-nosed turtles from Australia and New Guinea, which were swimming in a giant freshwater tank installed in the Bowery Hotel Ballroom, where 350 guests snapped up shrimp and cocktails.

Among the social animals in their natural habitat were the co-hosts Graydon Carter, Gretchen Mol and Fisher Stevens, who won an Academy Award in 2010 for “The Cove,” a documentary about dolphin slaughter in Japan. Kate Spade, Gina Gershon, Parker Posey and others inhabited the pond of posing and canapé chomping as well. So did Kelly Rutherford, alive and well despite the extinction of “Gossip Girl.”

Some wore fur, others leopard-spotted or zebra-striped shoes.

Andy Spade and Mickey Boardman wore tortoiseshell glasses. And Milly de Cabrol, the society decorator, was in a brocade dress that almost seemed like armor.

“It’s good to go into your shell sometimes,” she said.

“It’s good to be soft on the inside, too,” added Kim Vernon, a brand consultant.

Nearby, Sandra Bernhard, the evening’s M.C., cooed at the turtles. “You’re so sweet,” she said. “Coo, coo, coo, coo, coo.”

When it was dinner time, guests, some with hardened shells and jaded survival instincts — Nan Goldin, Glenn O’Brien and Bob Colacello among them — moved to an adjoining room. Ms. Bernhard, with a snapping-turtle wit, took the podium while guests munched kale salad at banquet tables with kente cloth and beach balls.

“They are adorable and they won’t trap you in some boring conversation,” she said about the evening’s guests of honor. “They also won’t stab you in the back, steal your husbands, ask you for money or make you buy something in an auction.”

Well, that part was not exactly true. A live auction of works by Jean-Michel Basquiat, Richard Prince and others was such a harangue that a silent performance that followed by Philippe Petit, the mime who crossed the World Trade Center towers in 1974, seemed a blessed relief.

“Talk about prehistoric,” one guest said while watching him.

“Aren’t mimes an endangered species?” another asked.

Later, while the squawking and drinking continued, and Mr. Goode looked relieved that his evening had gone well, “Remember the Time” played on the sound system. It seemed appropriate for all in the room, surviving, endangered and otherwise.  READ FULL STORY

Retail consolidation is back in style. Mass-market clothier Gap Inc.'s recent $130 million purchase of contemporary fashion chain Intermix is just the latest in a string of arranged industry marriages.

"Different types of companies are getting into the acquisition mix and creating some interesting pairings," said Alison Jatlow Levy, a retail strategist at consulting firm Kurt Salmon.

Following a lackluster holiday season and years of stunted growth, stores are grasping for new strategies to expand their global presence and attract new consumers. Sales during the crucial holiday shopping period increased only 0.7% this past year compared with 2011—the smallest gain in four years—according to a SpendingPulse report released by MasterCard Advisors. In 2011, sales rose 2% for the same period over 2010.

Though private-equity firms had been big retail buyers in the early part of the last decade, retailers are now looking to spur their own growth through acquisitions. In addition to Gap's buying Intermix, Tokyo-based Fast Retailing Co. Ltd., the parent of Uniqlo, recently acquired a majority stake in upscale denim label J Brand. Teen retailer Aéropostale Inc. acquired Canadian e-commerce company GoJane.com this past fall to bolster its online operation.

Climate is right

Such purchases are an easy growth strategy for larger retailers that have exhausted their own global store fleet and need to beef up revenue through other corridors.

Brand acquisitions, however, don't always work out. Liz Claiborne Inc. has spent the past few years unloading all but three of its 40 brands, acquired during a 1990s shopping spree that bloated the company and loaded it down with debt. In fact, it sold off its namesake and is now known as Fifth & Pacific Cos. Likewise, Kellwood Co., which owns Sag Harbor and Rebecca Taylor, among other labels, faced near-bankruptcy in 2009 after piling up huge debt during the recession.

Still, the current environment is once again right for retail consolidation as larger companies like Gap look to grow without oversaturating the market and smaller firms look for financial white knights.

Retail experts say that an acquisition by a larger retail rival is preferable for most brands, since private-equity investors usually have a strict growth strategy that includes an exit deadline. Additionally, private-equity firms often burden firms with debt that can be difficult to overcome. Linens 'n Things liquidated in 2008, three years after a $1.3 billion acquisition by Apollo Management, for example. Conversely, large retailers, which are attuned to the demands of the industry, have more realistic expectations and are more interested in long-term gains.

"Private-equity companies generally want to exit their investment in five years or less, and that puts tremendous pressure on the [retail] founders to grow on a schedule that may not line up with the economy and consumer palate," said Kim Vernon, chief executive of consultancy Vernon Co. "If I were a brand today, I would go to a strategic acquisition."

Gaining a foothold

For Gap, the advantages of buying Intermix this month are clear. The San Francisco-based retail giant gains a foothold in the designer-driven, higher-end world—a new category for the $14.5 billion firm. Five years ago, Gap made a similar move into uncharted territory with its $150 million acquisition of activewear brand Athleta.

Twenty-year-old Intermix, on the other hand, can use the global reach of Gap, which has stores in 90 countries, to expand internationally and to venture into its own private-label business. The transaction also gives the smaller company, which reportedly generated sales of about $125 million in 2011, an edge over longtime rival Scoop, another New York-based chain, with 13 locations.

"This is an opportunity for Intermix to get to the next level," said Michael Londrigan, chairman of the fashion merchandising department at LIM College. He noted that Intermix should remain a separate entity, though. "If they start trying to utilize Gap for merchandising and design for Intermix, that would be a mistake," he said.

Similarly, the $290 million purchase of 80% of Los Angeles-based J Brand last month was just a drop in the bucket for $11.8 billion Fast Retailing, but it gives the larger company an increased exposure in denim. Though Fast Retailing also owns Theory and Comptoir des Cotonniers, it still has not made great inroads with American sportswear and could use the increased U.S. exposure.

"Fast Retailing is gaining a product expertise in a category they haven't nailed the way they've nailed cashmere," said Ms. Vernon. Meanwhile, J Brand, like Intermix, gains more marketing and distribution muscle.

  READ FULL STORY

Good brands continue to find buyers willing to open their wallets wide in the M&A world.

J Brand is the latest to set a high yardstick for brands to measure themselves against, with Japanese fashion giant Fast Retailing Co. Ltd. paying $290 million, plus $10 million in advisory fees, for 80.1 percent of the growing denim-cum-sportswear brand.

That values the company at $362 million or about eight to 10 times projected earnings before interest, taxes, depreciation and amortization. The price tag was broadly seen as healthy and proved to be high enough to turn off some interested private equity suitors.

Jeff Rudes will continue to lead J Brand as chief executive officer and retains an ownership position. The deal is expected to close by the end of the year.

This is step two for Rudes, who founded the company in 2005 and sold a controlling stake five years later to Star Avenue Capital, a collaboration of Irving Place Capital and talent agency CAA. Under Star Avenue, the company began to reach beyond its denim roots and position itself as a fashion brand with a sportswear collection.

The brand has also been garnering attention for its hip collaborations with designers such as Christopher Kane and Proenza Schouler.

Now J Brand will view the world through the lens of Fast Retailing, which also owns Uniqlo, Theory and Helmut Lang.

The global outreach, retail models, products. I am very impressed by what they do, Rudes told WWD of his future partners at Fast Retailing. We really respect the business as well as some of the opportunities that we thought we could build, together, for J Brand.

In the short term, Rudes pointed to building the brand ready-to-wear business domestically and abroad, as well as the mens wear rtw component, for which J Brand is putting together a design team. Freestanding stores are another area of opportunity. The company will likely cut the ribbon on a Los Angeles flagship next year and add doors in other fashion capitals while expanding the product line with handbags and shoes. Things that will work within the sensibility of building our fashion brand, Rudes said.

Fast Retailing's expertise will prove useful as J Brand bulks up its business in the Asia-Pacific Rim. We have a good business [there] but really feel we can excel there with a partner like Fast Retailing, Rudes said.

Fast Retailing will also get the benefit of Rudes expertise in denim.

As a good partner, our resources are available,Rudes said. And being that we have different price points, it would not conflict or hurt either to be able to share certain resources.

Andrew Rosen, group senior vice president at Fast Retailing as well as co-founder and ceo of Theory, called J Brand's potential limitless.

We have obviously a big initiative and investment in the contemporary space, and believe that J Brand gives us another important player in that space, and also a unique perspective,Rosen said. We see the opportunity on a global, multichannel basis as enormous. The beauty of J Brand is how they really have built this incredible business, for the most part, in a domestic market in the single channel.

The other thing is that they have a base in L.A., he added. It gives the group an opportunity to have an important presence on the West Coast.

J Brand sells in more than 2,000 stores in more than 20 countries. Its profits totaled $17.8 million in 2011, compared with a loss of $200,000 a year earlier, according to Fast Retailings reckoning of the brands recent financial results. Sales jumped 38.4 percent to $124.4 million from $89.9 million.

Although Fast Retailing has made other acquisitions, the deal was welcomed as a sign that a broader pool of buyers was forming.

A decade ago, hot brands would be acquired and built up in the U.S. by the likes of Liz Claiborne Inc., Jones Apparel Group or Kellwood Co. all of which have either changed their names or ownership. Fast Retailing along with perhaps Compagnie Financial, Richemont, PPR and LVMH Moet Hennessy Louis Vuitton are part of a different breed with a more global eye.

For [Fast Retailing], an international retailer, to step up and play in this format I think is really exciting from a private equity and an industry perspective because theres another avenue of funding that available, said Jeff Streader, operating partner at Marlin Equity Partners. It's a competitive [deal] landscape, but there are very few big strategics in the industry that have the ability to pull levers like this.

Kim Vernon, president and ceo of consultancy Vernon Co., said J Brand was a good catch with every clean distribution” and compared the transaction with Richemonts September deal to acquire golf-inspired brand Peter Millar.

These types of large strategic companies really do have the pockets and the interest to pay good money for great brands, Vernon said.

There are a host of deep-pocketed investors, including Star Avenue and Irving Place Capital, that look to buy promising brands, strengthen or professionalize the businesses and then either take them public or send them on to another investor for the next leg of their growth.

It was bittersweet for us because it's such a good company, said John Howard, ceo of Irving Place Capital.

And although the deal marks a payday for Howard, through Star Avenue, it will also be a blow to his wardrobe. My other regret is that I lose my [J Brand] discount, Howard said.  READ FULL STORY

It’s increasingly a seller’s market. As money sloshes through the private-equity world and strategic players seek to exercise their cash-rich balance sheets, strong brands are commanding higher and higher multiples — holding out for the magic figure that will cause them to sell. The latest proof of the phenomenon is Compagnie Financière Richemont SA’s deal to acquire the golf-inspired brand Peter Millar, which went for at least 11 to 12 times that company’s annual earnings before interest, taxes, depreciation and amortization, according to sources. That’s a combined payday of $110 million to $120 million for Winona Capital and Chris Knott and Scott Mahoney, the pair that founded the company in 2001, sources said. The company’s annual revenues have grown to about $70 million as the brand expanded its reach beyond golf and into men’s and women’s lifestyle offerings. “There was some very stiff competition,” said Joseph Pellegrini, who, along with Andy Martin, ran the sale process. Both are managing directors at Robert W. Baird & Co. “There were other bidders for this asset that submitted bids that were very reasonably close,” said Pellegrini, who declined to give the specifics of the deal. “It wasn’t like it was a one-off. There’s a lot of money in the market, whether it be private equity or strategics who are building up a war chest of cash.” The selling price of one company does not directly correlate to that of another given the variables of branding, leadership, distribution and so on. But the deal and its high valuation offers a point of reference for the luxe world that other sellers can use as they try to negotiate a more lucrative deal. “We’re back in a really healthy investment phase again,” said Kim Vernon, president and chief executive officer of consultancy Vernon Co., who advised one of the other bidders for Peter Millar. “More than ever, really great brands have an opportunity to take money off the table,” Vernon said. “The market is absolutely interested still in great opportunities. There are big companies that are looking for acquisitions and can’t find the right opportunity.” Investors have grown more confident this year and are buying bigger companies. So far in 2012 there have been 147 deals signed in the global apparel and footwear retail sector, carrying a total value of $7.66 billion, according to Dealogic. Even though the number of deals has fallen slightly, the total value of the deals has risen 74.1 percent. Peter Millar is very big with the golf crowd, which was well represented in the bidding process. Richemont’s executive chairman, Johann Rupert, is non-executive president of the South African Golf Development Board and monitored the deal’s progress closely. The brand was described as almost a Tory Burch for the men’s market as it is situated at the lower end of the luxe price scale with styling that isn’t too fashion-forward. The comparison with Tory Burch might also be apt when it comes to valuation, although Burch is much larger and a very different business. The price tag on Tory Burch seems to keep rising, and some place the value of the company at as much as $2.5 billion. Barclays Capital was hired last year to find buyers for the portion of the company owned by Burch’s former husband, Christopher Burch. On another scale, Michael Kors Holding Ltd. — the golden child of monetizing luxury — is trading on the open markets at almost 28 times EBITDA. Kors’ shares bucked the downward trend in the market Friday and jumped 9.3 percent to $57.35 after the company boosted its second-quarter profit guidance. There are lots of struggling brands out there that are desperate for investment or to find buyers. What is driving the current valuations is that investors are looking for business that have proved they can develop a following and still have room to expand into their own retail stores, new markets or product categories. “Companies that are just wholesale companies can be sold for high multiples because of what people believe they can do with them, because they can dimensionalize them through physical retail and e-commerce,” said John Howard, ceo of Irving Place Capital, which has an investment in J Brand through Star Avenue Capital. Howard declined to comment on J Brand, which is a wholesale business. That brand has expanded beyond its jeans roots and is building a sportswear business. It is on the block at what observers see as a rich valuation and is still attracting interest. For the ever-cautious Rupert and Richemont, the Peter Millar deal is its first acquisition of a U.S. brand and one of its few pure fashion companies. Richemont also owns Cartier, Montblanc, Dunhill, Chloé, Net-a-porter and a slew of high-end watch brands. The Peter Millar deal is expected to close next month and Richemont said the acquisition would not materially impact its operating results this fiscal year. Mahoney, who serves as the brand’s ceo, told WWD Friday: “Our management team has agreed to long-term contracts and we plan to continue to operate the brand as we have been.” With Richemont’s deep pockets, he said the company would accelerate growth in both the U.S. and internationally. Luke Reese, managing partner of Winona Capital, said what attracted his company to Peter Millar was the “passionate consumer fan base. They were incredibly strong in the top 1,000 golf shops, but they also had a very strong business in men’s specialty retail stores. And we felt we could help them grow their share of closet.” Since Winona’s 2009 investment, Peter Millar’s distribution has not expanded significantly beyond the green-grass shops and 400 men’s independent stores, but the label was added to Neiman Marcus and Nordstrom. The brand’s sales reportedly rose 33 percent last year with stores in Palm Beach, Fla., Southampton, N.Y., Winter Park, Fla,. and a showroom-store in Zurich. Its current distribution includes North America, the U.K., Australia, Switzerland and Southern Europe.  READ FULL STORY

Chaiken, the San Francisco-based sportswear brand, is putting the pieces together to become a factor again in the fast-growing contemporary market. The brand, which was relaunched in 2010 as Chaiken and Capone and has since gone back to the simpler Chaiken, is building on several fronts. The company relaunched its Web site, designed by Sweden Unltd.; is beginning to show major specialty stores the collection, and has hired Jeffrey Chow as design director. Other moves in the past year and a half were the naming of a president, David Lazar, who is based in San Francisco, and the hiring of Kim Vernon, president and chief executive officer of Vernon Co., as a business consultant. “Since David [Lazar] has come aboard, we’ve done a lot of refining,” said creative director Julie Chaiken, who cofounded the brand in 1994. Lazar joined the company in January 2011, having previously been founder and ceo of Twenty, president of Three Dots and vice president of merchandising, men’s, at Express. Since the relaunch, Chaiken said they’ve taken stock of what was working and what wasn’t and moved into a new space at 785 Market Street in San Francisco, and opened a showroom in New York at 230 West 39th Street. Chaiken, which has previously shown at Fashion Coterie, decided this time to show at Designers & Agents, which runs through Thursday. Hiring Chow was a key move for the brand. The designer moved to San Francisco in April. A winner of the Ecco Domani Fashion Foundation Award, Chow has worked for Poleci, Perry Ellis International, Esprit, Tommy Hilfiger, Emilio Pucci and Lilly Pulitzer, in addition to having his own line. “He’s helping us to move [the brand] forward,” said Chaiken. His influence will be felt in the spring collection. The line is produced in San Francisco, New York, Peru and China. For spring, Paul Maffi photographed Chaiken’s look book for its retail customers and clients. Styled by Vanessa Traina, the book will be published in print and digital forms. Chaiken, which has always been known for its great-fitting pants, is rounding out the line with knits, skirts, sweaters and dresses. “It’s not for a girly girl,” said Chaiken. “It’s sport inspired.” Spring’s wholesale prices range from $75 to $400. For fall, Chaiken’s line is available at Knit Wit in Philadelphia; Wendy Foster in Santa Barbara, Calif.; The Store in Mill Valley, Calif., and Jamie Lyn in Beverly Hills. “The goal for spring 2013 is to take it to the next level,” said Vernon. Chaiken noted that the redesigned Web site, chaikenclothing.com, will add e-commerce in the fourth quarter. They’ve also redone their Facebook page and their Tumblr account is active. The brand also has a YouTube channel. “I’m really proud of what Julie has done in the past 10 months. A fantastic foundation is being laid to create a great contemporary brand,” said Vernon.  READ FULL STORY

How old are you? I’m never going to tell you that. Okay. Let’s talk about how you’re kind of a big deal. Oh, no no. I’m not. Did you see that I was quoted in the Style section today? It was that piece about Tulum becoming a fashion mecca. See? You’re a big deal. I could tell by the coat. Everyone stops me about this coat. I’m really proud that it’s fake fur. People in the elevator stand there trying to figure out what kind of animal has spots like that, but no animal has spots like that. It’s 100 percent acrylic. What do you do? I run a consulting firm called Vernon Company. I was at Calvin Klein for half of my career, doing marketing, branding, licensing; when I left I was executive vice president. I worked there in the early ’90s, then Prada recruited me. Then Calvin tried to get me back, and I went back. Did you have anything to do with giving us Marky Mark in his underwear? Of course. That was my first year there. He’d walk through the office speaking his hip-hop slang. Now he won’t talk about it. Because he’s too busy preaching against masturbation? Why wouldn’t he? He’s married to Rhea Durham. [Laughs] Talking about Mark Wahlberg is boring. It was an amazing campaign that wasn’t my idea. My role was putting those ads on the sides of buses. We were the first in fashion to do that. A lot of teenage girls were really grateful to you for that. Yeah, we changed the face of outdoor ads. Then everyone started doing it. What do you do when you’re not masterminding ad campaigns? I’m very interested in culture—I go to the theater a lot, and I love the food scene in New York. Jean Georges is one of my absolute favorites, and you’ll also find me at Indochine, Waverly, Minetta…I love my West Village spots. Oh, and I’m at the Standard all the time, too. Are you a shoes-in-the-oven type? What do you mean, shoes in the oven? You know, you store your shoes there because you never cook at home? Not at all. I do cook. And I have two huge closets. [Laughs] More from Kim “I just saw an amazing play called Stick Fly. It’s the playwright’s first major play and it is so well written.”  READ FULL STORY

Kim Vernon was invited to speak at the Luxury Lab conference hosted by LoveBrand and sponsored by BMW,Conde Nast, L'Oreal, Absolut Elyx, and AeroMexico. During this 2 day conference held in Mexico City, Ms Vernon Presented on "What is Luxury?". Using Vernon Company surveys, brand research and case studies she created a very successful presentation for the executives of L'Oreal and Future Lab along with the Latin American luxury executives in fashion, accessories, hospitality, beauty and design.   READ FULL STORY

Welcome to “peer-to-peer social commerce.” “It’s a new paradigm,” said Dearrick Knupp, chief executive officer of Shop My Label, a Web site launching today enabling individuals to become merchants online by building their own fashion boutiques and making a commission off the sales without requiring them to have a Web site, to possess any technical expertise, to purchase inventory or even to pay a start-up fee. Under the Shop My Label business model, anybody over age 14 can create an online fashion boutique that’s curated from an assemblage of brands and retailers organized by Shop My Label. The boutique would be named by the person running it and viral marketed via social media sites such as Facebook, Twitter, Tumblr, YouTube and their own blogs. Though Shop My Label’s business model is new, it’s not unique. Another Web site called StyleOwner, which sources say has some big backers and retail experts behind it, is launching imminently as well, with a similar format. For both, it’s all about converting those who spend a lot of time social networking or blogging into “social-preneurs” curating shops online with the brands they like, selling to people they know and trust, as if they’re personal shoppers, and making money from it. For brands and retailers, which have been grappling with how to monetize social networking and capitalize more off viral marketing, there’s potential to generate revenues and new customers. “Everybody is talking about customer-centricity. This is what Shop My Label is really about,” explained Mortimer Singer, an investor in Shop My Label who is president of Marvin Traub Associates, which is also advising the start-up. “It’s a grassroots system to proactively evangelize your favorite brands.” Atlas Consumer Growth is another investor, while two technology firms, Optaros and Dotbox, are helping develop Shop My Label. Optaros [which worked with Rue La La] did the site architecture and wire-framing, and Dotbox has essentially taken the wire-frames to build the site. Under the Shop My Label model, shopkeepers build their stores by selecting merchandise from 1,000 brands primarily coming from Saks Fifth Avenue, as well as 17 other brands and retailers, among them the Camuto Group, including its Jessica Simpson Collection; Jones New York brands including Nine West and Rachel Rachel Roy, and Delia’s, Alloy, DL1961, and brands from Accessory Network. Shop My Label sees adding a few more brands and retailers each week. “We’re starting with selling fashion, but we could grow into other merchandise areas,” said Deborah Boria, Shop My Label’s president and chief creative officer. Along with Knupp and Boria, Frank Ball of Ball Group retail consultants, and Jay McElynn, formerly with Ball Group, are also co-founders. Ilan Levine, formerly with Venda Inc., Omnicon Media Group and Smart Online is chief technology officer. Shopkeepers will pick their favorite pieces or those they think are right for those shopping their boutiques, or they could create a private boutique for an individual and customize the offering to a single customer. A shop could feature just one brand, such as Jessica Simpson, or multibrands and show outfits that are pulled from different labels. But the pricing is controlled by the retailers and brands providing the merchandise, not those creating the online shops. Shopkeepers can also upload their pictures from Facebook and put them on their shop, and followers can send in comments. “This has been two-and-a-half years in the making,” said Boria. Shopkeepers will get a 5 percent commission on each sale, and incentives when they convince others to also become Shop My Label shopkeepers. Shop My Label itself will get up to 15 percent commission on revenues. “The financial model is revenue sharing — it does eat into retailers’ margins, but retailers are excited by the prospect of new customer acquisition,” said Singer. Shop My Label will offer free shipping, single checkouts integrating different brands selected, inventory data feeds from Shop My Label’s home base in Manhattan’s Union Square at 817 Broadway, including e-mails on item availability and “a dashboard of business information that’s visualized in engaging ways,” Knupp said. The shipping and fulfillment is done by the retail and brand partners, who own the inventory. There’s currently an SML staff of 10 at the offices: a chief technology officer and others in programming, marketing, social media outreach, wrangling brands and retailers to participate, and graphic web design. Product shots to build the shops are from the brands’ and retailers’ Web sites. “The technology enables consumers to be their own shopkeepers, and allows them the freedom to curate their own fashion in a way they have never been able to before,” said Vince Camuto, founder and chief creative officer of the company bearing his name. For the launch, “We are rolling it out to a very private and select list of influencers, top customers and some of our personal connections — over 500 people as potential shopkeepers. If they view Shop My Label as a hobby, they could make a $100 a month. If they really push it, there is an opportunity for much more,” said Knupp, who previously collaborated with Boria on an eco-friendly line called Panda Snack that lasted from 2005 to 2008. The two have backgrounds in branding, sourcing, design and product development. “It’s like an eBay 2.0 if you will — creating a space — but those people needed inventory to sell that maybe came out of the garage,” Knupp said. “Here you don’t even need to obtain the product. It’s there for you to select from.”  READ FULL STORY

"provided they find and accept someone with experience in the industry who can be a leader and stay focused on delivering the right product at the right price. I think they still have time to turn it around and get it on track."  READ FULL STORY

“The amount of media impressions through TV, Twitter and blogs will catapult the Alexander McQueen name to familiarity it never had, whether it translates to more perfume sales or made-to-order dresses, it is nothing but positive.”   READ FULL STORY

"Cathie Black is a talented executive. Her contributions to Hearst are measurable. If she doesn't want to retire and/or consult/speak, Time Inc might benefit from her career experience considering their recent round of miss hires and executive shuffles."  READ FULL STORY

There are 1200 members in New York City alone, yet a total of only 150 votes were cast. Brand consultant expert (and Vernon Company CEO) Kim Vernon, who praised Jamie Pallot’s hosting duties and told us that “it is always wonderful to honor emerging creative talent,” added that it is a “shame that FGI didn’t create online voting, thus only 150 votes were cast…Therefore, it was not a national contest, and the brands are national. Certainly two weeks of snow didn’t help us get there!”  READ FULL STORY

"Yes, it can still be the champion of the underdogs," said Kim Vernon, a marketing consultant. "Between Saks and Bergdorf Goodman, all have been jockeying for underdogs more than ever. Barneys will continue to be supportive of emerging brands."
She said the retailer can change the merchandise mix and still find ways to remain special. "They've got a big merchandising team that's been there. I think they can maintain being Barneys but can move it toward what more customers want," said Vernon. "My clients tell me he [Mark Lee] is intent on keeping the uniqueness and specialness of Barneys intact."   READ FULL STORY

"Jeans, to many, are the new ‘pant.’ Denim fits, styles and washes have become sophisticated enough that women will wear their favorite jean with a Balenciaga jacket or a Stella McCartney blouse. At the same time, jeans can be dressed down and casual,” explains Kim Vernon, the president and CEO of Vernon Company, a lifestyle brand consultancy and business development firm based in New York. As a solid foundation for a variety of looks, jeans offer bang for every hard earned buck... “When a woman [or man] finds a great fitting jean that makes them feel sexy, confident, and comfortable, they won’t trade down. They will buy multiple pairs in different washes,” notes Vernon... “Brands like J Brand have proven that fit is tantamount in customer loyalty. Customers know the styles by name and by number,” says Vernon.  READ FULL STORY

Kim Vernon, president and chief executive officer of the Vernon Co. consultancy, agreed the next six to 12 months will be critical. “It will be a trickle of companies that either disappear, have a complete pause or reinvent themselves as an entirely different entity.”  READ FULL STORY

Kim Vernon, founder of the Vernon Co., worked with Posner and Som on the termination of the partnership. “It’s a perfect example of how every business — large or small — is reevaluating strategic plans they made less than 18 months ago,” Vernon said.   READ FULL STORY

As for the buyer, “it can be very attractive because there’s less risk,” said Kim Vernon, president and ceo of Vernon Co., a New York-based brand consultancy that interfaces with investors. “They’re not necessarily responsible for having an operational position.”  READ FULL STORY

“I’ve always loved her iconic role in fashion,” said Kim Vernon, president and chief executive officer of Vernon Co., a brand growth consulting firm that matched de la Falaise with HSN. “I was very excited about HSN’s strategic changes with Mindy Grossman [ceo of IAC Retailing, which owns HSN]. Loulou loved the idea of reaching a lot of people. I went first to HSN and HSN understood it immediately. The idea is to develop a whole lifestyle collection around Loulou.”  READ FULL STORY

Kim Vernon has spent much time honing her skills in marketing and advertising, which she is now channeling into Vernon Co. The consultancy is less traditional public relations and more media strategy and brand building. The former Calvin Klein Inc. executive, who launched her firm last October, is taking a multipronged approach: marketing, branding and communication; licensing and alternative distribution channels, and working directly with private equity firms on investment opportunities in the fashion and luxury sectors. "I love brands and products, as long as they have integrity," she said. "And I am not only interested in fashion. I want to help people grow their brands, or help tarnished brands." Until October 2005, Vernon was senior vice president of global advertising and communications at Calvin Klein Inc., where she managed a $250 million marketing budget for the company, which at the time had 35 licensees and a staff of more than 60 in advertising and public relations. Vernon has spent time casually meeting with young designers over the past few months to try to help them raise capital with equity firms. "There's a lot of money out there," she said. "You find agencies that will do licensing deals, and they take the royalty, but don't connect the brand to the product." Her aim, she stressed, was to locate the right opportunities, then guide the partnerships beyond the initial transaction. "We are not just a 'transaction' company, but one that has the integrity and future of the brand in mind," she said. On finding funding for young designers, Vernon, who has a staff of four, said: "I would very much like to be able to raise and create an incubator of promising designers, even in different price points or products, such as shoes, apparel or accessories, where they would be able to receive cash as well as share operational…and management support." Prior to her 10-year stint at CKI, she ran her own marketing and branding company, The Vernon Co., where she consulted on lifestyle Internet brands, and with fashion clients Vera Wang, Club Monaco and Katayone Adeli. Before that, she was vice president of advertising and communications at Prada for two years. Over the past few months, the executive has assembled a roster of clients, including Loulou de la Falaise, Elise Overland, Anne Semonin Skincare, Sokolin Wines and Arctic Water. She is also working on raising equity with Goode Partners, Guggenheim Partners, Hilco, Summit Capital, Towerbrook and Catterton Partners, and on special projects with MAC Cosmetics, Milk Studios, Puig Fashion Group and Yoo Hotel Group. Vernon is on the advisory board of Financo.  READ FULL STORY

''It's like having a personal shopper,'' says Kim Vernon, a senior vice president at Calvin Klein. Vernon, who buys off a daily list e-mailed from Sokolin Wines, says she recently asked David Sokolin (who is a friend) how much she had spent, year-to-date. ''When he told me the number, I was, like, 'Wow.''' Asked just how high that figure is, Vernon answers, ''Well, it's not over $50,000.'' Of course, plenty of California Closets around town hold just as much in the form of Birkins and Balenciagas. ''In my world, it's not an either-or,'' Vernon says. ''There are some cases of wine that are easily the cost of a Fendi bag.'' For example, she recently bought a 1990 Montrose; it's over $5,000 a case, about $450 a bottle. Most of her 2,000-bottle collection is warehoused, with another couple of hundred in a Sub-Zero unit in her loft for everyday drinking, though what she keeps stocked for everyday use is pretty special by any standard. ''Romanee-Conti, that'd be my favorite thing to have,'' she muses, naming what many people consider the top vineyard in Burgundy. ''I'm very proud of my wine knowledge, and I like to think it's a sexy attribute. I went on a date with a very sophisticated guy not long ago -- we were at Wallse -- and he just handed me the list. 'You pick.'''  READ FULL STORY

Kim Vernon, senior vice president of global advertising and communications for Calvin Klein Inc., which licenses the name to UCI, noted that many of Klein's iconic scents have been born out of phases of the designer's life. "Eternity was launched when Calvin was marrying Kelly [Klein, his now ex-wife]; CK One was created when Marcie [the designer's daughter] was looking for something young and fun," said Vernon. "Euphoria connects to the new sense of freedom Calvin now has — working with creative aspects, but also traveling and enjoying life."  READ FULL STORY

“We created Obsession Night to infuse some newness into a legendary brand,” said Kim Vernon, senior vice president of global advertising and communications for Calvin Klein Inc., which licenses the name to Unilever Cosmetics International. “Obsession always represented provocation, sensuality and a sense of mystery. It was very important to maintain those elements while refreshing the images to reach a younger target.”   READ FULL STORY

“These are sexy young men and women having fun, flirting,” said Kim Vernon, senior vice president of global advertising and communications at Calvin Klein. “It’s a new way to communicate with consumers.”  READ FULL STORY

Kim Vernon, senior vice president for global advertising and communications for Calvin Klein Inc., said the company was not reevaluating any change of image or tone in Calvin Klein Underwear ads. “I don’t think in the creative community that we are overly concerned or need to make a shift,” said Vernon. “People who do good ads are not trying to use sex to overtly sell products. Now is not the time. The only time [to tone down advertising] was after Sept. 11, but certainly not now.” Vernon further noted that a new campaign for Calvin Klein Sensual Support shapewear featuring Academy Award-winning actress Hilary Swank, epitomizes the company’s current message in lingerie advertising. “Hilary Swank looks extraordinarily sexy, beautiful and provocative. She looks like a gorgeous woman. The product does not look modest. It’s designed to make a woman look sexy,” said Vernon.   READ FULL STORY

“When you see Hilary now, she has long, beautiful hair, and she looks like the woman that she is,” said Kim Vernon, senior vice president of global advertising and communications for CKI. “When you see these gorgeous, sexy, feminine pictures, I believe they will surprise people.” Swank has had a long relationship with the company, attending some of its fashion shows and wearing Calvin Klein to several awards events, having become friends with Klein — after the designer saw “Boys Don’t Cry” and invited her to lunch — and more recently with designer Francisco Costa. According to Vernon, Swank said on the set that she chose to appear in the campaign partly because it was an unexpected move.  READ FULL STORY

Kim Vernon, a spokeswoman for Calvin Klein and its new designer, Francisco Costa, said the company has no such deals but would not rule them out. ''It's a competitive world,'' Ms. Vernon said. ''We do have to have our eyes wide open and be very intellectually honest that we may have to consider ways of working that we never would have in the past.'' Might that mean an offer of cash or an advertising contract? ''Why not,'' Ms. Vernon said. ''If you build that into your budget or your marketing strategy, there is nothing negative about it. It's business.''  READ FULL STORY

“What we really wanted to do is push the look of Natalia a bit further. We wanted to go with really stronger fashion, make her more of a woman, and keep the sexiness as strong as ever,” said Kim Vernon, senior vice president, global advertising and communications at CKI, a division of Phillips-Van Heusen. “We wanted to do something that took the pictures to another level. It’s still moody, but we wanted to push it a bit, and felt Steven [Meisel] could do it.” For the prior two seasons, Klein used Mario Sorrenti as the Collection advertising photographer.  READ FULL STORY

Last season’s top model — Natalia Vodianova — will be conspicuously absent from the New York season with the exception of one big show. That’s because Calvin Klein has landed an exclusive deal with the Russian beauty from DNA to appear only in his show in America, on top of her existing exclusive for his ad campaign. “Natalia is a natural beauty,” said Kim Vernon, senior vice president of global advertising and communications at Klein. “Our latest campaign inspired us to make a bigger commitment to working with Natalia on a more exclusive basis going forward.”  READ FULL STORY

“I think the most effective way to market jeans depends on the personality of the brand,” said Kim Vernon, senior vice president, global advertising and communications, at Calvin Klein Inc. “Some brands, like Diesel, have never used sexy advertising, they use humor. For Calvin Klein, going back to Brooke Shields, sexy is good. Sometimes it’s more subtle than others, but Calvin has always been a sexy, modern company and what we do well. It will always be different than what Diesel, Polo or Tommy Hilfiger does. “Large brands like ours have enough volume, so we’re able to advertise. We overlay that with grassroots marketing, and jeans contests at Urban Outfitters, for example.” She said the contests expose the jeans to an entirely different audience that may not shop in Federated Department Stores. She said she also works with celebrities in product placement, and stars such as Adrien Brody and Justin Timberlake wear CK Jeans.  READ FULL STORY

Kim Vernon, senior vice president of global advertising and communications at Klein, said the fall ad budget is flat to a year ago. According to TNS Media Intelligence/CMR, Calvin Klein Inc.’s media budget for the second half of 2002 was approximately $10 million for all apparel and home products, excluding fragrances. Fall portfolios, which range from between four and 10 pages, will appear in 271 fashion and lifestyle publications worldwide: 63 in the U.S., Canada and Latin America, 127 in Europe and 81 in Asia.  READ FULL STORY

"Last year’s spring break promotion was very well-attended and the response to our branding events and activities surpassed expectations," said Kim Vernon, senior vice president of global advertising and communications. "This year’s challenge was to expand on the interaction with the target by adding branding and promotion, which we have achieved with stronger retail tie-ins, the unprecedented in-room branding, overall hotel connection and the e-mail communication post-spring break. CK brand products will be unavoidable, but integrated into a fun and value-added format."   READ FULL STORY

"Clothes are really important in these pictures. We’re trying to present great pictures that are really strong and feel very Calvin Klein, sexy and romantic," said Kim Vernon, senior vice president, global advertising and communications. The ads are both in color and black and white, and don’t use the graphics that were used the past two seasons. Swiwmear ads will break in February, and jeans, underwear, eyewear and Collection ads debut in March. In addition, ads will appear in many European and Asian magazines. With a flat spring budget, Vernon said the company will continue its lifestyle portfolios of four to six pages in magazines such as W, Vogue, Vanity Fair and Harper’s Bazaar.   READ FULL STORY

"When you look at Jessica, she can be very glamorous and sophisticated and can look young, modern and playful," said Kim Vernon, who recently was named senior vice president of global advertising and communications at Calvin Klein Inc. "She has great potential because of her versatility, how flexible she is [physically and mentally] and how she participates in the creative. She really takes pleasure in the shoot."  READ FULL STORY

Calvin Klein Inc. said Monday that it will integrate all its worldwide advertising, marketing and public relations functions under the direction of Kim Vernon, senior vice president of global advertising and communications. Vernon continues to report to Tom Murry, president and chief operating officer of CKI. As reported, Calvin Klein's U.S. public relations had been headed by Virginia Smith, vice president of public relations, who resigned and whose last day is Friday. She had reported directly to Murry. Noona Smith-Peterson continues to direct Calvin Klein's European PR efforts, based in Milan. The new integrated service group, reporting to Vernon, will be responsible for media strategy and creative campaign development; marketing; strategic planning for the promotion of brands and brand positioning, and all communications and public relations functions. The group is responsible for all Calvin Klein-trademarked products -- whether company owned or operated by strategic partners, both in the U.S. and abroad. "What we're announcing today has to do with our overall strategy to bring advertising, marketing, the communications and public relations areas under one person's leadership worldwide," said Calvin Klein, in a statement. Vernon rejoined CKI in 2001 as senior vice president, global advertising from her own marketing and branding consultancy, The Vernon Co. Prior to that, she was vice president of advertising and communications at Prada for two years and from 1992 to 1996, was vice president at Klein's in-house ad agency, CRK Advertising. Earlier, she was retail marketing director at Escada and ad manager at Bergdorf Goodman."  READ FULL STORY

Kim Vernon, senior vice president of global advertising and marketing at Calvin Klein Inc., believes that the dynamics between editors and publishers are important. "I think when the publisher and editor have a strong relationship, it absolutely matters in the success of the magazine." She believes several of the new publishing couples will be successful, such as Tom Florio and Anna Wintour at Vogue, and Ron Galotti and Cooper at GQ. She also thinks Cindy Lewis and Glenda Bailey, publisher and editor in chief, respectively, at Harper's Bazaar, will be strong.  READ FULL STORY

"Market share as a concept for magazines has become a really big deal," said Kim Vernon, senior vice president of global advertising and marketing at Calvin Klein Inc. "Overall ad page growth is down, and budgets are flat. The only thing they can do in this market is to fight for market share." One of the promotions CKI participated in this winter was the GQ Lounge in Hollywood. "They've gotten a few top advertisers to add a branded element to it. It's brand promotion in a subtle way. GQ decorated the cabana areas and re-dressed it. Models were serving you in our clothes," she said.  READ FULL STORY

''The marketplace has become very competitive due to the economy and consumer brands being more efficient and more conservative, in that situation, the strongest magazine brands and the strongest publishing teams have a huge advantage,'' said Kim Vernon, senior vice president for global advertising and communications for Calvin Klein in New York. ''Quite possibly some of the books that are having their best years ever, quite possibly have some of the strongest teams. And they have the leverage to take pages away from other brands.''  READ FULL STORY

''The environment is very competitive right now for magazine publishers,'' said Kim Vernon, senior vice president at CRK Advertising in New York, the internal agency for Calvin Klein, which is participating in the GQ lounge. ''Every client is looking for additional ways to justify spending large sums of money in a particular title.'' Calvin Klein is redecorating the cabana area of the lounge with furnishings like wall decorations featuring a new Klein logo and photographs of models wearing Klein clothes.  READ FULL STORY

For his spring Collection and CK Jeans campaigns, which break in March magazines, Klein unveils a new red and blue logo that looks like it's hand-drawn. "It's not intentionally patriotic," said Kim Vernon, senior vice president, CRK Advertising, Klein's in-house agency. "It's red and blue, but it works with the black-and-white photographs."   READ FULL STORY

Kim Vernon, senior vice president, CRK Advertising, Calvin Klein's in-house agency: "I think Glenda understands delivering the information the consumer wants and also having a lot of inspirational pages. No magazine editor re-creates a magazine in one month. It could take two months to ruin one."  READ FULL STORY