WSJ: A Coming-Out Party for a Pedigreed Designer

WALL STREET JOURNAL | CHRISTIAN BINKLEY

There's one dress that designer Sophie Theallet makes each season that will never see the runway: the one she plans to wear at her show. Each season, superstition overcomes her, and instead she puts on the same pair of black jeans and tunic that she has worn at previous shows. Her show in New York this week was no exception.

Ms. Theallet, who is 46, is an unusual recent entrant to Big Fashion—a designer who is getting her big chance 20 years later than most. Her clothes are worn by Michelle Obama and sold in some top boutiques around the world. Her apparel is so well-crafted, requiring extensive hours of labor and miles of fabric, that a cotton dress might cost upward of $2,000.

"Ruching of chiffon or appliquéing of shearling are not things that are done easily or cheaply," says Robert Burke, founder of Robert Burke Associates fashion consultant. Mr. Burke calls her designs "investment" clothing. "The thing is educating the consumer to understand that," he says.

Ms. Theallet toiled for years for Jean Paul Gaultier and Azzedine Alaia—two famous designers known for the quality of their work—before striking out on her own. Last year, she won the prestigious Council of Fashion Designers of America/Vogue Fashion Fund award, which offers a $200,000 cash prize as well as a lot of publicity. About 160 designers apply for the prize each year, most of them young and looking for overnight success. Other winners and finalists include some hot designers: Proenza Schouler, Derek Lam, Thom Browne and Isabel Toledo.

"I like that she put in the time working with other designers," says Vogue Editor in Chief Anna Wintour, who attended Ms. Theallet's show this week with a phalanx of Vogue editors. Ms. Wintour notes many young designers lack their own clear vision, or the bottom-line design skills to make well-cut clothes. "She can really make a dress," Ms. Wintour says, "unlike a lot of [designers] who can't."

And then there's Ms. Theallet's strict adherence to her vision, regardless of what the rest of the world is looking for. "I don't do trend," she says.

Another hot, new fashion label, Rodarte—whose designers Laura and Kate Mulleavy never studied fashion—commands premium prices for tiny collections. But this is largely because their clothes are often more art than craft—worthy of being exhibited in a gallery. Ms. Theallet's creations are exacting, exquisite from the inside out, and expensive because of the labor involved.

Moments after Ms. Theallet's last look walked down the runway on Tuesday evening, Mr. Burke leaned over in his front-row seat and said to me, "You probably just saw the most sophisticated collection of the week."

The collection drew a room full of fashion heavy-hitters, but didn't touch on a single trend of the week. It was breathtaking for its secretive details, as well as its fine line between the formal and the casual. A green velvet dress shimmered, with a silk-lined hoodie that spread like a shawl collar over the shoulders. The clothes included pencil skirts that looked straight from the front, then revealed tiny pleats at the back, turning a power skirt into something more feminine and slightly flirty.

Short on money, Ms. Theallet doesn't always use the most sumptuous fabrics in her collections. She often works in fine cotton, though she has been able to add knitwear and some Loro Piana wool-cashmere blend fabric this season, using some of her prize money. "I don't have to line the garment because the wool is soft on the skin. It's a beautiful feeling to have that wool-cashmere on the skin," she says.

The seams are flawlessly taped, creating an inside that's as lovely as the outside. The mind boggles at the quantities of fabric she used for a Fall 2010 chiffon dress that was so finely pleated that it looked ruched or gathered.

Some retailers are now fighting for access to the small collections Ms. Theallet makes in a small factory in New York, where the seamstresses create flawless seams, tucks and pleats. Her line is carried in exclusive boutiques, including Ikram in Chicago (where Mrs. Obama shops) and DNA in Riyadh, Saudi Arabia. "I carried her from the beginning," says DNA's owner, Princess Deena Abdulaziz, establishing bragging rights for recognizing a talent before the herd.

The daughter of a doctor and raised in the south of France, Ms. Theallet works from the living room of the Brooklyn apartment she shares with her husband and business partner, Steve Francoeur. With one assistant, Ms. Theallet creates only two collections a year, compared with six or eight for many designers. She will start on her next collection in a few weeks, and it will take until September to complete it. Her husband helps with deliveries as well as serving as the company's business head. The couple reinvest their earnings in the company, which is also backed by friends, including the actor Rupert Everett.

She finished this week's fall collection just three days before her show, then went to work cutting fabric samples and pasting together the sales books for retailers herself.

She's says she knows her recent rise has been a long shot. "Normally it's young designers that get that benefit," she says. "I'm not a young designer. I am a woman and I know what I'm doing."

WSJ: Art Couture: Theyskens' Next Act

WALL STREET JOURNAL | CHRISTINA BINKLEY

Often heralded as one of the greatest designers of his generation, Olivier Theyskens has seen his wispily layered clothes enshrined at the Metropolitan Museum of Art and worn to the Oscars by Madonna. It's hard to fly higher than that in fashion. And he's only 33.

Yet Mr. Theyskens (pronounced TAY-skenz) has had a hard time keeping jobs. At French brands Rochas and Nina Ricci, Mr. Theyskens' collections won rave reviews but failed to sell well enough to satisfy retailers or investors. He became fashion's version of "My So-Called Life"—the TV show that was simultaneously applauded and canceled.

Unemployed for the past year, Mr. Theyskens has collaborated on a book with an old friend, portrait photographer Julien Claessens. Due to be published Feb. 11—the kickoff of New York fashion week—by Assouline, the $120 book has an enticing title: "The Other Side of the Picture."

But this is no tell-all rant, airing the Belgian designer's side of the art vs. commerce controversy. It's a photography book covering his short but highflying career. All art, with just a touch of commerce.

Mr. Claessens, the photographer, studied art, not journalism, but there is reportage in the way he captures moments backstage at a fashion show. If anything, I wish he and Mr. Theyskens had included more shots of the Mr. Theyskens and his assistants at work, and fewer of models' eerily made-up faces and hairdos. The book's magic is in moments such as the tangle of arms as a dress is being donned, or perhaps doffed. Without comment, there are the emaciated bodies of models and muses, such as the corseted boniness of Hana Soukupova backstage at Rochas. There's also the mundane act of sewing, the designer needle in hand.

The book isn't an attempt to bask in the past, he says. "I'm not at all nostalgic," Mr. Theyskens said recently from Paris. He sounded remarkably grounded for someone who once posed for a portrait in "lingerie borrowed from the photographer's girlfriend," according to the introduction by Vogue news editor Sally Singer.

Since departing Nina Ricci last March, Mr. Theyskens says, he hasn't kept up with fashion magazines or parties—even during Paris fashion week last October. "Actually, I was thinking, oh, you should see on the Net what was going on," he says. "But I didn't. It makes me think that normal people—99% of the people—don't run to the Net to see what's happening [on the runways]."

Mr. Theyskens is a boyish wisp of a man who wears his dark hair very long. He famously dropped out of art school at the age of 20. He was hired a few years later as designer of Rochas, where he dressed Nicole Kidman and Kirsten Dunst and won the International Award from the Council of Fashion Designers of America for his haunting, feminine designs. Mr. Theyskens insisted on designing his own fabrics: Some silk prints were reminiscent of watercolor paintings. He often used materials in new ways, for instance, attaching floaty strands of ostrich feathers to silk dresses.

Dresses 'Like Sculptures'

Mr. Claessens says he sees the designer as a pure artist. "Olivier Theyskens' work goes beyond creating clothes and a collection. Prints are like paintings, dresses are like sculptures," Mr. Claessens says. "I see it at the same level as the work of some conceptual artists or grand movie makers."

Yet some retailers criticized the Rochas collection for being high-priced. Critics gushed, then gasped, as owner Procter & Gamble PG -0.58% shuttered Rochas's fashion line in 2006, saying fashion wasn't "a core competency" of the company. The line was revived in 2008 with new investment partners and a new designer, Marco Zanini.

A year later, Mr. Theyskens landed at Nina Ricci. Again, reviewers gushed and retailers griped. Some ethereal silk blouses cost more than $2,000. His muses were rail-thin.

'I Can't Give It Away'

"He cut for somebody that was tall and very thin. It didn't fit women who could afford clothes of that caliber," says Karen Daskas, owner of the Tender Birmingham boutique near Detroit. There, the designer's final collection for Nina Ricci has been marked down to 60% off. "I can't give it away," she says. "And we try it on everybody."

Mr. Theyskens was shown the door after showing his fall 2009 collection in Paris—and Nina Ricci hired a new designer.

Mr. Theyskens says the criticism that his clothes sold poorly because they cost too much is "legend" but untrue. He also says the production department controlled fit issues using "strict measurement scales supposedly corresponding to the sector."

Is it fair to blame an artist for a brand's lack of commercial success when there are so many factors at play? Perhaps Mr. Theyskens should have paid more attention to the fit of his clothes. But fashion investment consultant Robert Burke believes that what Mr. Theyskens needs is a business partner who can help add wearable, more affordable clothes to his runway demi-couture. That model is working for Alexander McQueen, whose wild runway shows do for his brand image what his wearable precollections do for his sales.

"In the stable of fashion designers who are available [to be hired] now, Olivier Theyskens would be at the top of the list," says Mr. Burke.

Mr. Theyskens' experience with the two design houses says much about the fashion business today. It's reminiscent of the music industry, where record labels once gave artists like Bob Dylan or Pink Floyd years to build an audience. These days, pop artists are either overnight sensations or they're in search of a new label. In fashion, investors also often rotate through designers in search of a magic spark. Alessandra Facchinetti was given only one season at Valentino before a third set of designers in two years was brought in. There was a similar revolving door at Gianfranco Ferre.

As Mr. Theyskens searches for a new label, he says he has been creating imaginary collections in his notebooks. Three or four are completely ready to go—down to the chosen fabrics, plans, "everything."

When asked about the idea of creating his own label, he says, "Oh God. … That's for sure, I have always thought [about] it." Still, he notes, 2009 wasn't a bad year to be on the sidelines, with its economic tumult and dire straits.

When the subject is his artistic oeuvre, Mr. Theyskens seems unflappable. He says, "I know I can be proud of what I have been doing. So voilà. I don't know what I can say more."

WWD: Experts Weigh in on Juicy Designers' Departure

WWD | LISA LOCKWOOD

The fashion industry has had a mixed track record when its comes to companies surviving the departure of founders-designers.

WWD polled industry experts to see whether they believed Juicy Couture could survive without the creative leadership of its co-founders, Pamela Skaist-Levy and Gena Nash-Taylor, after their wildly successful run.

“It’s certainly possible to have designers go on to the next thing, as long as there are designers there to keep the DNA alive and keep it current,” said Andrew Jassin, managing director of Jassin Consulting. He pointed to brands such as Gucci, Lacoste and Hugo Boss, which have had successful futures without their original designers. “Some have suffered, such as Ungaro, but Dior has been fantastic and Chloé has had its ups and downs. Under Stella McCartney, it was great,” he said.

He also cited Claiborne’s Kate Spade brand. “The Kate Spade brand got stale with Kate, and it’s been reinvented with someone else. You need to have reinvention. Calvin Klein’s business without Calvin has been terrific and has grown geometrically year to year in categories that would have been difficult to do with Calvin,” Jassin said.

Hal Reiter, president and chief executive officer of Herbert Mines Associates, agreed companies do survive changes in creative leadership. “Founders-designers can be replaced and transitioned from the original. Look at Anne Klein, Calvin Klein; J.Crew is a perfect example of a whole new J. Crew. Many of these faces of the brand are no longer designing, but they edit and veto. These eponymous companies can go on with a new designer provided they stay loyal to the brand,” he said.

Marshal Cohen, chief industry analyst at The NPD Group, explained that if a company is able to keep the personality of the brand, but find the balance with someone who’s got professional experience, it will allow the company to grow to the next level. He said when a designer partners with a company like Claiborne, the expectation is to grow, not stay stable. He believes Juicy will survive if certain things are done right. “Sometimes it’s even better,” he said, pointing to firms like Perry Ellis, which survived a long time after the death of its designer, whereas Williwear went downhill after Willi Smith died.

Cohen believes Claiborne is doing the right things to succeed. He said it’s not about how many stores a brand opens or how many skirts it sells. “It’s, ‘How profitable can you become?’” he said, adding he believes leaner, more focused, more differentiated brands are the future.

Robert Burke, president and ceo of Robert Burke Consultants, said, “I think that Juicy Couture has certainly been an enormous success since its creation. They have created a very distinctive image, and diversified with men’s, women’s and children’s and freestanding shops. It’s well on its way as an established brand. I can foresee it moving forward.

“It’s not in that crucial phase of still defining the brand. Any time there’s a loss of a designer, there’s concern, especially at the collection level because they’re doing such a good job. It will probably live on. They’ve been very much the face of Juicy. It worked for the brand’s benefit, but the brand is so well established,” said Burke.

“I would never say it’s a recipe for disaster. The creative director-founders’ leaving can very often have an impact on the brand, especially when they’re strong product people,” added Kim Vernon, ceo of Vernon Co. She pointed to Calypso founder Christiane Celle, who sold Calypso and later had irreconcilable differences with the new owners, which had a dramatic impact on the brand and the business “because she was an extremely strong product person.”

As far as the Juicy designers, she said, “They were involved many years post-acquisition, and [their departure] might be very dramatic for the brand. They don’t have teams there anymore. There’s been so much turnover. Juicy Couture is hitting a bit of maturation in the market. Their involvement was petering out. Frankly I’m surprised they stayed in this so long.”

Marc Gobé, president of Emotional Branding, believes Juicy Couture has developed an enviable cult following.

“Juicy Couture is interesting. The brand is really cool, fresh and imaginative,” he said. “People who start the business and are the inspiration of the business, when they walk away, it signals trouble even if it’s for a good cause. Do they want to leave? Then it’s their prerogative, or are they leaving because they realize that being part of a bigger corporation does not give them the freedom they were accustomed to?”

But, he warned, “The hardest thing in fashion, or in any creative field, is to find a good creative director. Some companies do well. Look at Gucci, they were able to continue with a new designer, but generally it’s very challenging because it’s the business of fashion and inspiration and feelings, and understanding what the market wants by emotionally connecting. That won’t show up in any report.”

“It [Juicy Couture] still has a tremendous amount of potential, and what it has is the ability to grow globally,” said Gilbert Harrison, chairman of Financo Inc. “Bill [McComb] understands the business. He inherited, to a great extent, a perfect storm. He’ll survive it. I have confidence in him, and the board has confidence in him.”

NEW YORK TIMES: 'Affordable Luxury' Bucks the Crisis

NEW YORK TIMES | KATIE WEISMAN NEW YORK — Tommy Hilfiger just opened a 22,000-square-foot store on Fifth Avenue in Manhattan, a move that, in this economy, some might call insane.

But the Hilfiger line, like many midrange designer brands, is growing, while other labels, notably at the high end, are struggling to hang on to market share.

“We are positioned very well with accessible, affordable luxury and this is something we have been doing for 25 years,” the designer said last month during New York Fashion Week.

Very well indeed. Sales of the Tommy Hilfiger Group, a unit of Apax Partners, a private equity investment group, rose 21 percent, to $1.6 billion, for the financial year that ended March 31, according to Fred Ghering, Hilfiger’s chief executive officer. Hilfiger sales for this financial year are expected to rise in the single digits, much less than in previous years, but they will still grow in a stagnant market. For the record, a Hilfiger cocktail dress sells for $450 and a camel hair coat goes for about $750.

Brands like Tommy Hilfiger, D&G from Dolce & Gabbana, or Tory Burch, all selling below the luxury designer category, are growing now because they expanded or reorganized, repositioned collections or introduced new lucrative lines before the first signs of the recession.

“There is this white space between major designer collections and contemporary lines,” said Robert Burke of Robert Burke Associates, the New York luxury consulting company. “Designers like Tory Burch, Phillip Lim and Alexander Wang are filling that gap. These collections provide their own great creativity at a great value.”

This “white space” has, until now, been filled with what the American apparel industry calls “bridge collections,” where retail prices for a skirt range from about $250 to $400, and pants cost $175 to $250, Mr. Burke said. Brands have been moving in and out of this category as well as the “contemporary designer” range priced slightly higher, by either changing their price points or going out of business. This dynamic has created opportunities for creative international labels to move in and grab market share.

D&G, the younger Dolce & Gabbana collection, is a great example of this market’s momentum, according to Karen Katz, president and chief executive of Neiman Marcus department stores, adding that it “has the creative DNA of Dolce & Gabbana” and good pricing.

In 2006, the Dolce & Gabbana group brought the collection’s production inhouse, ending a license arrangement with Ittierre group of Italy. Since then, the collection has had average sales growth of more than 8 percent a year, reflecting its more sophisticated styling and fabrications. For the financial year that ended March 31, D&G sales were €706 million, or $1.04 billion, roughly 44 percent of the group’s revenue.

As Mr. Burke noted, the Tory Burch line, founded by the New York socialite in 2004, also is succeeding because it has found its niche.

“When I was researching my business plan, I came up with the idea of what was missing from the market. I wanted beautifully made but accessibly priced clothing,” Ms. Burch said. “Since I had worked in the business, I knew what kind of margins and markups were being made. I new that price was going to be a challenge.”

One of her first steps was to hire Fiona Kotur Marin, who had helped start Old Navy and is an expert on producing in China. The Tory Burch collection is now produced through a group of factories, most of which are in China, a top factor in the collection’s prices. The average retail price of dresses from her fall 2009 collection is about $365, excluding two more elaborate evening gowns that were $1,250 and $1,695, respectively.

The privately owned company will not disclose its revenue, but sales are expected to rise modestly this year to $200 million, thanks in part to increased wholesaling outside the United States.

There also are companies that do not appear to be doing anything special, like Isabel Marant of France, and yet are growing at a healthy rate — more than 20 percent a year, according to Isabel Marant’s chief executive officer, Sophie Duruflé. Wholesale revenue for Isabel Marant and its secondary collection, Etoile, rose 29 percent last year, to €25 million, and they are expected to increase 35 percent this year, said Ms. Duruflé. Isabel Marant plans to open a store in New York’s SoHo area next year. The company owns three stores in Paris and two in Hong Kong with a local partner.

Isabel Marant’s two collections are successful because they espouse Isabel Marant’s signature Parisian chic, are priced well and exude value, said Christine Chapellu, the women’s buying director for Le Bon Marché in Paris. The average retail price for an Isabel Marant dress is €390, and €200 at Etoile.

Buyers are particularly vocal in their praise for such midrange lines.

At Harvey Nichols in London, U.S. labels like Milly, Rebecca Taylor and Tory Burch have “performed really well” this fall, said Suzanne Pendlebury, the womenswear buyer. She noted that separates from brands like Vanessa Bruno from France, Diane Von Furstenberg, 3.1 Phillip Lim, Anglomania and the Danish labels Bruuns Bazaar and Malene Birger are seeing strong growth because “with these labels, rather than buying one expensive designer piece, you can afford to buy a few items that work together and produce different looks.”

At Bon Marché, Ms. Chapellu said that contemporary labels like the Marant collections, Vanessa Bruno, Marni, Marni’s Summer and Winter Edition and Marc by Marc Jacobs have all sold well this fall.

However, Ms. Chapellu stressed, price is not the sole driver for success. “You need the whole equation,” she said.

Printemps, another iconic department store in Paris, is planning to shift more of its spending from luxury designer lines to these contemporary and bridge collections for the spring season, said Tancrède de Lalun, the general merchandise manager for womenswear and menswear. He did not disclose which brands would be favored.

WWD: Jewelers Craft a New Path to Luxury

WWD | SOPHIA CHABBOTT

Excess is out and prudence is in.

A year after the financial markets melted down and the days of freewheeling spending on luxury goods came to a grinding halt, top-tier jewelers have adapted to marketing their best pieces in this economy. In an era when conspicuous consumption appears on the wane, pitching diamond and gemstone jewelry that can sell for upward of $100,000 and go into the millions is definitely a challenge. Consumers’ new mind-set makes it even tougher, executives and retailers say, even as they stress consumers are getting more comfortable with spending again.

So fine jewelers are adopting two tactics. One is to market the pieces as an investment that can help diversify the customer’s financial portfolio. The other strategy plays on the limited nature of truly rare pieces: buy now or it may never be available again.

David Klein, executive director at Leviev, said clients come into the firm’s Madison Avenue boutique looking for value. “We have people that come in and say, ‘I want something special, something that’s going to keep the value,’” he said, noting that Leviev, which is known for its white and yellow diamonds, had several important sales in the past several months and that clients come in asking which pieces would be solid investments. “People are interested in seeing [what we have]. They want large, whites and yellows.”

One client is said to have come in with his wife a few months ago wanting to invest in diamonds and she got to choose the piece. Initially they spent $2 million, but after a few months of evaluating the purchase, he upped the ante with the purchase of a pair of $4 million diamond earrings.

Leviev is aggressively procuring new pieces made with ultrarare and pricy stones. Standout pieces include a collar of oval- and round-cut white diamonds interspersed with intense pink diamonds, and a 76-carat pink diamond that has been reset as a pendant surrounded by smaller colored diamonds in orange, green, yellow, pink and blue that retails for $18 million.

“We haven’t changed because times have changed and it’s serving us well,” added Klein.

Graff America president and chief executive officer Henri Barguirdjian said the London-based firm would never dream of selling its rarefied jewels from an investment aspect, saying, “It’s never a consideration.” But with diamonds and gems escalating in price year upon year, the investment aspect is not to be discounted.

Barguirdjian claims Graff’s business in America is good, although the nature of sales is different.

“My business has changed completely,” he said. “Most of the bread-and-butter [opening price point] business has disappeared, and we are selling only important pieces.”

The average price point at Graff is $200,000.

“It’s logical to a certain extent,” said Barguirdjian. “Clients realize that fine diamonds and fine colored stones keep their value.…When you think about it, each piece of jewelry [costs] more than a house.”

Barguirdjian noted a client to whom Graff sold a 5-carat fancy pink diamond four years ago doubled his investment when selling the stone through Christie’s in Hong Kong in December.

“They are buying, and in the back of their mind is an investment,” he added.

While diamonds are universally graded by carat, clarity, cut and color, their prices aren’t monitored like gold is on the commodities index. The international industry standard for a wholesale price gauge for diamonds is through a company called Rapaport. The “Rap Sheet” periodically lists diamond prices, offering a barometer for industry members. The October 2009 Rap Sheet printed wholesale prices of $23,100 for a 1- to 1.49-carat D-color, flawless stone and $121,500 for an E-color 10- to 10.99-carat round diamond, VVS1, meaning it has an inclusion invisible to the naked eye.

Even as fine jewelers target consumers with products that are either an investment or a not-to-be-missed one-off, there is no doubt the sector, like all luxury goods, continues to see tough times. In March, Bulgari SpA cut jobs, reducing the number of products and closing unprofitable stores after the company’s earnings fell 45.1 percent in 2008. In July, the Roman jewelry firm reported a net loss of $53.8 million in the first half ending June 30, citing a slowdown in demand for fine watches and jewelry in the U.S. Chopard, a privately held firm, cut staff and expenses in the spring and summer.

In August, Tiffany & Co. beat earnings estimates by cutting costs and expenses, but profits fell by 29.7 percent. In September, Harry Winston Diamond Corp., which supplies rough diamonds to the global market from its 40 percent ownership interest in Diavik Diamond Mine, reported an operating loss of $5.6 million for the three months ended July 31, versus an operating profit of $5.9 million a year earlier amid significant layoffs. In the U.S. alone, revenue decreased 48 percent to $15 million.

However, Winston, which controls the Harry Winston retail network, said it would resume production for winter at Diavik Diamond mine in Canada’s Northwest Territories, after planning to shut down for the season. Summer production was halted, affecting some 600 employees, in response to market conditions.

Diamond mining giant De Beers SA also cut production by 73 percent compared with the same period last year, to 6.6 million carats, and reduced the global workforce by 23 percent. In July, the company reported a 99 percent decline in first-half net profit citing “historically difficult trading conditions,” and, in the six months to June 30, net profit fell to $3 million from $316 million in the same period last year, while total sales fell 54.2 percent to $1.71 billion from $3.74 billion during the same period last year.

But Gareth Penny, managing director of De Beers Group, said American buyers are for the first time viewing diamonds as assets across the board.

“People want to invest in diamonds,” said Penny. “A year ago, no one asked if they were a good store of value.…People are conscious of lasting value.”

Industry consultant Robert Burke of Robert Burke & Associates, agreed. “Pitching [high-end jewelry] as an investment is going to make more sense in this economy and state of mind,” he said. “Passion purchasing or anything that is emotionally motivated or whimsical doesn’t feel correct right now.”

De Beers has launched a major marketing campaign called Everlon. The diamond-mining giant has partnered with several Sightholders and designers across many price levels to play on the motif of a round diamond being hugged by a rope of pavé diamonds inspired by the Hercules knot, an ancient symbol of strength. According to Penny, the styles symbolize hope, support and faith of a loved one in these uncertain times. Prices start as low as $249.59 for a pendant with diamonds totaling 0.2 carats at J.C. Penney to the high thousands for a one-of-a-kind pair of large diamond pendant earrings designed by venerable jewelry designer Martin Katz.

For Stephen Russell, the Madison Avenue jeweler specializing in top-quality, signed vintage pieces as well as new designs, the main selling is buy now, because pieces are one of a kind and won’t necessarily come back on the market in the near future.

Zelenetz told the story of a client who hemmed and hawed over buying a piece a year ago and ultimately didn’t. That same client came into the boutique recently and said he regretted he didn’t buy the piece, as the money he was bound to spend on it foundered in the stock market.

“[Jewelry] is not necessarily an investment instrument — it’s a passive investment,” said Zelenetz, who added he has seen clients pop up and move capital from the stock market into jewelry. “People are comfortable with spending money again, but it has to be the best. When you deal in unique things, it’s a double-edged sword: Pieces are hard to find, and when they become available, you have to buy them. If it’s something that’s manufactured by the hundreds, there’s no sense of urgency. They’ll always be available.”

Marc Hruschka, Chopard’s U.S. president and ceo, said discerning clients make all the difference. “We went from a nation of spenders to a nation of savers in a short period of time,” said Hruschka. “People will feel more comfortable acquiring things again, whether it’s cars, jewelry, watches or homes. You have to be a sophisticated and savvy diamond buyer, however beautiful, unique or special [an important] diamond is. They are still one in a million or one in 10 million.”

Then there are those firms, like Chanel, whose fine jewelry category is focused on distinctive design more than large stones.

“A stone is more a commodity. We are selling the creativity of the product,” said Benjamin Comar, international jewelry director at Chanel.

Comar shared an anecdote that there were two clients in July who wanted to buy the same one-of-a-kind high jewelry piece, adding: “It was difficult to arbitrate which customer would get the pieces.”

Ultimately, Chanel sold the piece to its longer-standing client and offered the newer one another exclusive piece to purchase. Comar said the high-end business is doing better in the U.S. than other segments.

“Clients are looking very carefully in the design component on the high end. It’s first and foremost jewelry,” said Thomas J. O’Neill, ceo of Harry Winston. “If customers are interested in buying jewelry for other reasons…we aren’t marketing our designs in that way.”

For Winston, pieces above the $1 million mark are what are selling well.

“The U.S. customer tends to be more sensitive than other parts of the world,” said O’Neill, noting business is stronger in Asia and Europe. “It’s the U.S. where the customer continues to think carefully about what they purchase and when they purchase. Are they going to get the piece they have their heart set on, or are they going to moderate the price?”

While business may show some bright spots for jewelers, it’s an uphill battle to begin to match sales figures from two years ago. Brands focusing on value overall and pedigree are seeing results. The fact that jewelry of such ilk is collectable, not trendy, bodes well for sellers. Verdura, for one, has sold out of the recently reissued limited edition run of the famous Maltese cross cuffs made originally for Coco Chanel, according to a company executive. The cuffs sell for $65,000 each.

Emmanuel Perrin, president and ceo of Van Cleef & Arpels North America, focuses on the value and design factors when selling any piece.

“In the heyday, you’d buy things without thinking,” he said. “The pattern of purchases is for fewer things, but better things. You’re going to look for maximum value for your purchase.…Life goes on; real estate is an investment. Jewelry always links back to an emotion or a celebration — birthdays, anniversaries, engagements. You can’t postpone the celebration, but you can always postpone an investment.”

WWD: Big and Little Retailers Join Forces

WWD | MILES SOCHA & ELENA BERTON

PARIS — After designer collaborations and celebrity tie-ups, it’s now time for stores to pair up — even Davids with Goliaths.

As fashion retailers continue to feel the pinch from the worst recession since World War II, they’re becoming increasingly creative to offer more exclusive products and experiences that can persuade regular shoppers to open their wallets and hopefully attract new customers as well.

Over the weekend, Gap and edgy Parisian boutique Merci wrapped up a monthlong project in which each hosted a selection of the other’s products in their New York and Paris stores. Also over the weekend, Parisian department store Printemps christened the opening of a Maria Luisa location within its recently revamped Boulevard Haussmann flagship here.

Uniqlo recently set up shop in hip Paris concept store Colette as a teaser for the arrival of its Paris flagship, which opened last week.

And Target is mulling a one-off collaboration with Britain’s Liberty to launch clothing and accessories bearing the store’s trademark flower prints.

“In an effort to lure back the consumer, retailers are increasingly having to be more creative by devising events and promotions that promote the concept of uniqueness, exclusivity and scarcity. The partnership with an exclusive brand is just one example,” said Patricia Pao, founder of New York-based fashion consultancy The Pao Principle. “I think we are going to increasingly see more of the big brand-little brand pairings.”

Through these kinds of partnerships, large retailers acquire a degree of exclusivity and scarcity, as well as the prestige of carrying the smaller but highly desirable brand. The smaller retailers gain brand awareness and a degree of exposure they couldn’t afford to buy on their own, as well as trialing their products on new consumer segments.

“I do think it’s the next thing,” said Robert Burke, president of Robert Burke Associates, a New York-based consulting firm. “The designer collaborations have been played out quite a bit. This is a new angle. It’s one of those win-wins.”

He noted that for giant stores, “there’s a great deal of cachet with these small retailers, particularly French retailers.” Whether big or small, all retailers jockey to carry exclusive designer brands and products. Now big retailers are competing to gain access to buzzy specialty store banners, Burke said.

Indeed, according to market sources, Galeries Lafayette recently made overtures to Dover Street Market, the quirky multibrand emporium in London masterminded by Rei Kawakubo of Comme des Garçons, which has everything from vintage Cutler & Gross sunglasses and Christopher Kane dresses to Rose Bakery pound cakes under one roof.

“It allows us to bring in new talents, which can’t really stand commercially on their own feet in a big space, but which we think have potential for our customers,” said Maurizio Borletti, chairman of Printemps Holdings, which controls France’s Printemps and La Rinascente in Italy.

Industry experts pointed out there has to be synergy between each brand’s customers, because both brands still need to produce and sell merchandise to their core customer.

“These arrangements need to be more than merely puff and noise. It requires consistency in terms of brand identities so the hype around the event and cobranding does not dilute any of the brands,” said Florian Gonzalez, a London-based brand consultant. “Hopefully, by sharing their customers, products or retail spaces, brands experience cross-fertilization, rather than cannibalization or confusion.”

Borletti noted there are considerable challenges in meshing the “industrial mentality of a big retailer” with the more instinct-driven one of an independent fashion boutique. “That business in retail is what haute couture is in fashion,” he noted. “The chemistry to make it work is not easy.”

The business model is also vastly different, with the independent boutique dealing more with the vagaries of fashion and therefore operating at a higher risk to margins.

“We think as a department store we should have that competency. And I think we can do it more profitably because we have a lot of traffic,” Borletti said, noting Printemps’ personal shopping service will bring even more attention to the brands Maria Luisa plans to showcase.

Borletti said European department stores are no strangers to collaborations with other retailers. Printemps, for example, long had departments for Zara and Mango. “But back then, Zara was a totally new thing,” he said, whereas today, they wouldn’t “contribute to the exclusiveness of our offer.”

Inspired by the chic Merci boutique in Paris, Gap opened a “Merci Gap” pop-up store in New York. Meant to stay open only a month, the store occupied a 500-square-foot space next to Gap’s flagship on Fifth Avenue, re-creating the look and feel of the original Parisian shop, with proceeds going to various children’s charities. Across the Atlantic, Merci hosted a selection of one-off Gap designs. The original Merci is the brainchild of Marie-France and Bernard Cohen, the founders of Bonpoint, a children’s wear brand they sold in 2003.

Merci is a concept store stocked with unusual house wares, fashions, perfumes, fresh flowers and an ice cream stall. All the proceeds from the shop benefit Accueil des Sans-abri, a nonprofit organization that helps Madagascar’s homeless.

Jean-Luc Colonna, co-founder of Merci, said he was surprised by the reception the Merci shop-in-shop received from Gap customers.

“Many New Yorkers now have placed Merci on their radar screen,” he said.

Specialty fashion store Opening Ceremony is considered a pioneer in hookups with giant retailers, being the first American store to carry Topshop at its first outpost on Howard Street in Manhattan. Five years later, Topshop operates a flagship on nearby Broadway, and Opening Ceremony counts branches in Los Angeles and Tokyo, too.

“We’ve never felt that these giant retailers would detract from our merchandise,” said Opening Ceremony’s co-owner Humberto Leon. “We have a great customer that can see the inherent value of fun, well-curated fast-fashion and then turn around and buy a Rodarte knit or Proenza Schouler bag.

Opening Ceremony also bills itself as the first retailer to partner with Target on its 2004 collaboration with Proenza as part of its Go International initiative featuring limited edition, low-cost collections from established designers. Opening Ceremony also did a collaboration with Uniqlo earlier this year, introducing the brand to the Los Angeles market.

“I think it set a tone that having these goods in your store is cool and modern,” Leon said. “We think this is something fun for the customer. It also helps to highlight the designer collaboration and take it out of context. This reiterates the importance of design within these collaborations.

“It’s exciting to introduce a curated segment of the giant retailers to cities or countries that they do not have a presence in,” he added.

According to Leon, “the possibilities are endless. If other retailers offered us great products, we would look at it.”

In that vein, Opening Ceremony plans to carry special Rodarte products the Mulleavy sisters created in tandem with their one-month residency at Paris boutique Colette. “For us, it’s a way of sharing the marketplace and sharing ideas,” Leon said.

NEW YORK TIMES: When a Bottom Line Isn't Just About Profit

NEW YORK TIMES | ELISE ANNISS

As the fashion industry struggles with a global economic downturn and a rapidly changing consumer landscape, qualities that are at the heart of family and owner/founder businesses, like a consistent vision and a long-term approach, seem to be helping those companies ride out the storm.

Among the mid-range businesses that match this description is FJ Benjamin, a franchise specialist in Singapore. And there are the founders who hope they are nurturing family businesses in the making, like David Reiss, head of the British chain Reiss.

“The advantage of these family-owned businesses is that they are nimble, close to their business and the end consumer, and are able to move quickly compared with some larger companies,” said Robert Burke, president and chief executive of the consultancy Robert Burke Associates in New York, whose clients range from international fashion and retail brands to luxury resorts. “Also, they are not as tempted to over leverage themselves, which has been one of the downsides for some larger businesses in this present crisis.”

His opinion is echoed in the report “In Safe Hands,” which was published in March by Barclays Wealth and the Economist Intelligence Unit. It concludes that family businesses have certain characteristics — they are risk averse, less burdened by debt, and agile because ownership and management are closely aligned — that can stand them in good stead during difficult times.

“I think having the owners being involved is comforting because we own a stake in the business so we will do whatever we can to make it perform as well as possible in the long term,” said Douglas Benjamin, chief executive of FJ Benjamin Singapore.

His father, Frank Benjamin, founded the company in 1959 and still acts as its chairman. His uncle is chief executive of the parent company, FJ Holdings, which is listed on the Singapore stock exchange. With his brothers and other family members, he retains a 28 percent stake in the company, which notched up sales of $200 million for the year ended June 30. “We also take a long-term approach to risk, which is a different way of looking at something compared with someone who is incentivized to act in a short-term way,” Mr. Benjamin said.

The company initially ran the local operations of such major fashion brands as Gucci, Lanvin and Fendi, until those companies got excited about emerging markets and took back control. But retail franchising is still an important component of the business — it operates Celine’s business in Indonesia, Malaysia, Singapore and Thailand, and for three years it has been responsible for GAP and Banana Republic’s 30 stores in Singapore, Malaysia and Indonesian.

Focusing on the long term, Douglas Benjamin said he was going international with the company’s brand, Raoul. The label, which began as a men’s shirt line in 2002, now sells men’s and women’s clothing through a network of Raoul stores in South East Asia and Dubai.

And he is being cautious — the brand will go wholesale first, rather than retail, a route that Mr. Benjamin is more familiar with but is the riskier path.

Raoul opened a New York showroom in July and made its European debut as part of the Vendôme Luxury Trade Show that was showing at Le Meurice through Tuesday as part of Paris Fashion Week.

David Reiss still heads the privately owned chain that bears his name, which is valued at £90 million, or about $143 million. Reiss. Started in 1971, it has grown to 90 stores on both sides of the Atlantic as well as in China and the Middle East.

“When the whole world was crashing in 2008, I decided that 2009 would become a year of consolidation,” Mr. Reiss said. “I took stock of exactly where we sit in the market and re-sowed the seeds for brand evolution.”

Mr. Reiss has hired from the luxury sector — the new brand director is Andy Rogers, who joined Reiss from Stella McCartney, where he was store planning and visual director — and introduced the edgier men’s and women’s 1971 collection for autumn (celebrated at the start of London Fashion Week last month). But Mr. Reiss said that, at its core, company values have not changed.

“1971 is an extension of the Reiss brand and we’ve been careful not to alienate the core customer with it,” he said, explaining that he wanted to complement the existing, dressy collections with a casual sub-brand that also might appeal to a new, younger customer. The collection includes items like a short leather jacket at £195 and jeans with different fits and finishes, ranging from £79 to £89.

“I think that from the perspective of third parties, like employees and suppliers, companies such as these provide secure relationships that are longstanding,” said George Wallace, chief executive of MHE Retail, a strategy firm.

“With these people there’s a sense of ownership that you just can’t recreate with someone on a salary and a bonus,” he said. “They have a drive and commitment that goes beyond doing the job. After all, they won’t jump ship when the going gets tough.”

WWD: Luxury Retailers Turn Back to Basics

WWD | EVAN CLARK

Luxury retailers are scrambling — in as dignified a manner as possible — to hold the attention of well-heeled shoppers who aren’t as immune to recessions as once thought.

But the changes they’re making are, in some ways, course corrections marking a return to the roots of luxe with an emphasis on both quality and scarcity. Price, however, has entered the discussion after years of being a secondary concern.

“If the dress is $5,000, it should look like $5,000,” said Joseph M. Boitano, group senior vice president and general merchandise manager at Saks Fifth Avenue.

The price-value relationship, a staple topic for mass-oriented stores, was one of the points tackled in a panel discussion with Boitano, Intermix co-founder and chief executive officer Khajak Keledjian and Chicago boutique owner Ikram Goldman at the WWD Luxury Forum in New York on Sept. 17. The discussion was led by Robert Burke, president and chief executive officer of Robert Burke Associates.

Boitano said the customer is looking for options, such as shoes or handbags at lower prices, but that quality remains paramount.

“If the garment doesn’t look great and it doesn’t look like value, I don’t care what the price is,” he said. “It can be as cheap as cheap and it’s still not going to work.”

Retailers are spending more time trying to better understand — and then meet — the needs of their consumers.

Intermix’s Keledjian said, “You really have to understand the lifestyle, and the psychographic is becoming even more important than the demographic.”

The chain has 26 stores in the U.S., and the ceo said they all require a different approach. Keledjian looks at everything from the hotels his customers stay at to where they wine and dine and what they do for fun to understand their needs.

“If you have great product, consumers are buying,” he said. “But in today’s market, it’s not OK to be good. You have to be great.”

To entice its shoppers, Intermix has offerings from 250 to 300 vendors in its stores, which cover an average of 2,500 square feet.

For Goldman, who rose to national prominence as a style gatekeeper of sorts for First Lady Michelle Obama, the formula for selling high-end fashions hasn’t changed at her store Ikram, where new looks are combined with personal service and an obvious passion for style.

“We’ve always bought collections that are new and exciting and that aren’t very well-known, in hopes that we can introduce them to the market and introduce them to the clients — and by doing so, it’s made our store stand out a little bit more,” she said.

And although being small can have its disadvantages, Goldman said the size of the operation makes it easy to motivate and communicate with the sales staff.

“Because we’re a mom-and-pop store, we’re always talking,” she said, pointing to outings with her staff to dinner or the movies. This close connection helps create an environment that, along with the styles, keeps customers coming back.

“They actually come to us because they know that we’re going to give them a sense of excitement that they’re not going to get at another stores,” she said.

Goldman also keeps a tight rein on what makes it into her store, returning looks from designers if the fabrics are not as luxurious or the quality isn’t what she expects them to be.

Burke asked the retailers fresh from the tents in Bryant Park at Mercedes-Benz Fashion Week if runway shows were still necessary. The answer was generally yes — if they’re exciting.

“In order for me to process the season and in order for me to process what the designer has created, I have to see it the way that they present it,” Goldman said, who was an enthusiastic fan of Rodarte’s spring offering. “I loathe a collection that just goes down the runway…but I’m inspired by a collection like Rodarte. If we didn’t have fashion shows like that, it wouldn’t be as exciting — and then we’re just selling clothes.”

WSJ: Marchesa Whips Up Delicate Ultra-Luxury Evening Gowns

WALL STREET JOURNAL | ELVA RAMIREZ

One nice side effect of attending presentations is overhearing reactions among the crowd. At Marchesa’sWednesday afternoon presentation in Chelsea, the guests were openly rapturous. “If I were getting married again, I’m going to wear that,” a woman told her friend as she pointed to a white tulle gown so airy it appeared spun out of meringue. “Wait until you see this one!” a man excitedly exclaimed to his friend as they turned a corner into a new vignette.

Each season, Marchesa designersGeorgina Chapman and Keren Craigwhip up delicate, luxurious gowns that later grace editorial spreads and red carpets. Expect this season’s Madame Butterfly-inflected collection to be no different.

The collection’s themes were sensuality and the “fragility of love,” Chapman says, flanked by gowns with laser-cut floral details, chiffon and crepe. In a subtle but chic touch, models wore nude pantyhose silk-screened with faded black roses, that made the women look as if they intricately tattooed their legs years ago.  Some of the patterns ran all the way up the legs, others hovered around the ankles. Peeking out of a hem, the effect was head-to-toe accessorizing that complemented the sumptuous detailing without looking over-styled.

Luxury consultant Robert Burke noted that Marchesa’s unwavering position at the highest end of the market is smart, even despite the current retail climate. “Marchesa’s been very focused on what they do best, which are incredibly beautifully-executed evening dresses, and the quality has gotten more exquisite over time,” he says. “They’ve positioned themselves as the ultimate evening dress designer. From there, they can go into multiple categories of business.”

“I think it’s really important to stay true to who you are and true to your customer,” Chapman says. “To water down what I do doesn’t feel right.”

WSJ: A Minimalist Gets a Makeover

WALL STREET JOURNAL | RAY A. SMITH

Under the Bryant Park tents of New York fashion week Tuesday evening, Narciso Rodriguez will show off his typically minimalist evening gowns and day dresses. What the crowd won't see is Mr. Rodriguez's own ambitious makeover, as he reinvents himself once again, a year after his relationship with financial backers collapsed for the second time.

Mr. Rodriguez is making more dresses that sell for less than $1,000, below his more-typical price tags of $1,800 and up, a move some retailers who carry his lines requested. The designer, who doesn't have stores of his own, has also signed a deal with eBay Inc. to create a line that will be sold exclusively through the online marketplace. Ebay, more known for bargains than luxury, will start selling the line in the spring. The line, "Narciso Rodriguez for eBay," is a first for eBay, which plans to announce the deal Tuesday. The clothes will sell for less than $350.

Mr. Rodriguez, who burst into fashion's major leagues with his sleek minimalist style when he designed a wedding dress for Carolyn Bessette Kennedy in 1996, sees the moves as a chance to "bring in a new customer." He also designed the dress Michelle Obama wore on election night.

The critically loved designer has been known for experimenting with fabrics as varied as polyester, silk crepe and charmeuse and incorporating materials like plastic and fiberglass. And his eBay clothing is expected to hew to his sleek aesthetic and body-conscious sculpted design. Ebay, which says it has 88 million active users, plans to host the after-show party. Press releases of the announcement will be in the gift bags handed out as guests exit the bash.

While the moves could help broaden Mr. Rodriguez's audience, they also risk alienating his most-loyal higher-end customers.

Behind the scenes at Fashion Week, many designers are grappling with how to balance the realities of the economic climate with their creative, and often expensive, impulses. As consumers have balked at high fashion's prices, retailers are demanding that designers produce more-affordable clothing.

Mr. Rodriguez is on board: "I think she's [the customer is] grateful to have the opportunity to buy something that's under $1,000. The person who wants the dress at $2,500 or $1,500, it's a unique piece, they're designer pieces. The pieces that are less expensive just open the opportunity for them to shop more."

Mr. Rodriguez, who keeps collections he is planning to show very close to the vest, has said that the spring 2010 collection he designed to show Tuesday was greatly influenced by the modernist sculpture of the late British artist Barbara Hepworth. In a recent interview in his Manhattan studio, the designer said the show would reflect optimism. He is also known for being slightly futuristic and modernist, and isn't likely to bring back 1980s looks as a number of designers have done in New York so far during Fashion Week. A board covered with pictures and clippings on a wall of his studio, his "inspiration board" for the collection, included a picture of an alien from the movie "District 9."

"The atmosphere here [at my company] has been so upbeat. It's a new beginning. It's been an upbeat season and that's what's reflected in this collection. It's a great way to combat what's going on in the world," he said.

He has gotten a lot of buzz in recent months when Michelle Obama wore his dresses, particularly a red-and-black dress on election night. His runway shows are highly anticipated and have drawn stars such as Sarah Jessica Parker, Claire Danes and Rachel Weisz. Jessica Alba is expected to attend this year.

The eBay deal is a tentative but important step for a designer who has long shunned measures that other designers use to expand their lines, such as designing for inexpensive chains like H&M or Target, or signing licensing deals to make accessories or cosmetics.

Mr. Rodriguez cited an unconventional designer as someone he looks up to: Isabel Toledo, who is also of Cuban heritage and a good friend of the designer.

"It's not a mass brand but she is someone I personally admire because she's a creator," he says. "She has always created in a very specific way and has never changed her way of designing. There's such a glut of mass [merchandise] and there is so much fast fashion. Someone like her, smaller companies, true designers, thrive more, that's who the true designer customer wants to buy."

Mr. Rodriguez says that he is not opposed to adding more products, such as accessories and expanding further into fragrance or other beauty items. But, he says, he is looking for the right partner and wants to personally supervise design and production rather than having those functions outsourced.

And though he's looking for a partner, he isn't interested in collaborating with a low-priced fast-fashion chain, as so many other designers have, because he believes the clothes that result from the partnerships end up being the retailer's vision rather than the designer's.

"You may grow very quickly the first two years and then watch the business decline, unless you really start selling product at any price range with various degrees of quality," he says, regarding "a diffusion line," or a lower priced line. "That's certainly not a strategy I've ever had for this company."

Mr. Rodriguez needs to bolster his business. While the designer is a contemporary of Michael Kors and Marc Jacobs, his privately held business is far smaller with less than $10 million a year in sales. Liz Claiborne Inc. pulled its financial backing from Mr. Rodriguez in 2008, with both parties citing differences on how best to achieve sales growth. His prior investor, Italian manufacturer Aeffe SpA, which owns fashion labels Alberta Ferretti and Moschino, and he had a strained relationship because of their opposing views of how to expand the label, both parties say. They split in 2006. Massimo Ferretti, Aeffe's executive chairman, said in an email: "The termination of our business relationship with Narciso Rodriguez was mutually agreed upon and is attributable solely to our different vision of how the Narciso Rodriguez brand should be developed."

Liz Claiborne declined to comment beyond its statement last year: "Initially we both saw significant opportunities to develop the collection in multiple product categories, channels and geographies, but differences emerged as to how best to achieve this organic growth, and we have decided to terminate our business relationship by mutual agreement."

Mr. Rodriguez launched his line in 1997 after years of working at Anne Klein, Calvin Klein and Cerruti. In 2003, he became the first designer to win the Council of Fashion Designers of America's Womenswear Designer of the Year award two years in a row.

Among the changes he was forced to implement following the breakup with Liz Claiborne, he and his small staff now handle everything from manufacturing to ordering fabric to retailer shipments after relying on much larger partners Liz Claiborne and Aeffe to handle such functions.

Mr. Rodriguez, 47 years old, is trying to stay in the game amid the worst economic climate in decades, with luxury brands and retailers being especially hit hard. Consultant Bain & Co. forecast in a June report that the global luxury-goods market would shrink 10% this year.

"A designer that small needs a partner especially in the luxury area which has been in freefall," says Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail-consulting and investment-banking firm, based in New York. "It's very very difficult in this economic environment to do what you need to do alone."

So far, some retailers say, Mr. Rodriguez has managed. "It hasn't been an easy time for a lot of brands and we are paying close attention to the financial condition of the people with whom we're doing business," says Bergdorf Goodman Chief Executive Jim Gold. "Narciso has been shipping on time and we're selling his clothes very well." He says there's been no disruption since Liz Claiborne and the designer parted ways. "It's been business as usual."

Mr. Rodriguez says he is hopeful but wary about finding another suitable investment partner. Potential investors may also be wary. He lacks features that would make the label attractive to an investor: a line of handbags, shoes, sunglasses and boutiques, which are de rigueur cash cows for other designers. The only ancillary product line is three fragrances. What's more, he has two failed partnerships, which may give investors pause.

Robert Burke, a consultant to luxury-goods companies and high-end designers, and a former fashion director at Bergdorf Goodman, adds that there are far fewer investors looking for luxury brands to acquire. But he thinks Mr. Rodriguez has a lot of brand-extension potential and needs an investor "who is looking at the long-term picture."

The designer says he hopes this period in his label's life will demonstrate to potential investors that he is disciplined and capable. He also argues that not having accessories and complicated licensing agreements means less "baggage" for potential investors to sort through. "This is a new beginning." he says.

WSJ: Life After the First Lady

WALL STREET JOURNAL | CHRISTINA BINKLEY

One enduring image of the Obama inauguration last January was the new first lady enveloped in a shimmering white one-shouldered ball gown that bared her back and arms. The dress ended weeks of speculation over what Michelle Obama would wear that evening and launched the career of a nearly unheard-of designer, Jason Wu.

The designer hasn't wasted a bit of his Obama-induced momentum. Last January, Mr. Wu was selling his clothes in 10 stores and employed six people, and his 2008 revenues were $800,000, says Gustavo Rangel, Mr. Wu's chief financial officer and life partner. Now Jason Wu is sold in 40 stores including Saks, Neiman Marcus, Harrods in London, Lane Crawford in China and Harvey Nichols in Canada, and is on track to make $4 million in revenue this year, Mr. Rangel says. Mr. Wu has hired a personal assistant and has upped his staff to 10, with more hiring to come.

On Friday at New York's St. Regis Hotel, just two hours before showing the first collection he designed since his breakthrough, Mr. Wu worked backstage pinning and stitching a finely draped cocktail dress of black silk tulle with embroidered red hash marks—a modern sort of pointelle—onto a model. Rather than his standard uniform of Levis and Converse sneakers, Mr. Wu donned a dark Christian Dior suit. "This is Mr. Wu at the St. Regis. I'm grown up," said the featherweight 26-year-old, with the faintest grin.

With this latest collection, Mr. Wu is attempting to strike a new chord with creations more modern and sexy than the demure gowns and dresses he was known for. Aspiring to create a broad ready-to-wear brand, he has added knitwear, outerwear and more daywear, the better to fill a woman's whole closet with Jason Wu creations. "Where does my girl want to go? Ideally, I'd like to provide for her whole wardrobe," he says.

"He's really smart. He's got both the left-brain and right-brain thing going, says Robert Burke, a fashion and luxury consultant who has discussed growth plans with Mr. Wu.

Paced through a series of grand rooms in the style of Paris couture shows, Mr. Wu's collection walked a fine line between ladylike and daring. Vibrant colors and rich textures—Chanel-like tweeds and startlingly vibrant silk patterns, tweed trimmed in silk and a knitted sweater in mustard—gave punch to demure silhouettes.

There was a range of looks designed to address almost any closet conundrum, from sporty slouch-shouldered jackets over trim pants to the closing look in which model Karlie Kloss flounced down the runway in an ostrich-feathered cocktail dress. It was all wearable—wearability and breadth of offerings are the sort of things retailers are looking for these days, and Mr. Wu says he's paying attention. The show was crowded with retailers including senior executives from Saks Fifth Avenue and Bergdorf Goodman, whose presence indicates that a show is hot and expected to sell commercially.

Mr. Wu says he doesn't leave a lot of work up to design assistants. "Until the piece goes on the runway, it's got my hands on it," he says.

Born in Taiwan, Mr. Wu began designing as a child. At 16 he began designing clothing for fictional royalty: a line of Barbie-like fashion dolls for Integrity Toys Inc. that cost upwards of $100. Percy Newsum, Integrity Toy's president, credits Mr. Wu on the company's Web site with turning his firm "from a producer of mass market toys to a producer of high-end collectible dolls."

After attending Parsons School of Design and interning for designer Narciso Rodriguez, Mr. Wu launched his company three years ago. Although his first collection was purchased by Saks Fifth Avenue in 2006, it "was a rough couple of years, like all designers," says Mr. Rangel.

Then Ikram Goldman, owner of a high-fashion Chicago boutique, showed Mr. Wu's designs to Ms. Obama. Not only did she wear Jason Wu at the debut inaugural ball, she also donned his designs for the cover of Vogue (fuschia sheath dress), to the London opera (black satin overcoat) and when disembarking from a plane in London for the G-20 summit in April (chartreuse shift).

In November, Mr. Wu plans to quadruple the size of his studio, and his plans include Jason Wu stores and someday accessories such as shoes and handbags. "It's creating a lifestyle," says Mr. Rangel, using the 21st-century buzzword for big time money-making.

FINANCIAL TIMES: The new fashion retailers

FINANCIAL TIMES | VANESSA FRIEDMAN

When the women’s ready-to-wear shows begin today in New York, they will be punctuated with the many champagne-fuelled branded store openings that accompany the beginning of the fashion season, from Tommy Hilfiger in New York to Anthropologie in London and Uniqlo in Paris. There will be one retail event, however, that is unlike the others.

On Tuesday, Barneys will launch a “pop-up” shop within its Manhattan department store called Sartorialust that will, says a Barneys spokesperson, be “a temporary showcase ... which we expect to be very natty and eclectic showing how old school Italian can be mixed with designer in a very cool way.” To anyone not involved in fashion, this may not mean much, but what marks out this occasion is that the temporary space will be “curated” (ie, stocked) by a photographer called Scott Schuman.

Who?

Mr Schuman, otherwise known as The Sartorialist, is the man behind a blog of the same name that features photographs of men and women whose style he likes on the street; the pictures are posted online immediately, accompanied by a short commentary. Mr Schuman started the blog “simply to share photos of people that I saw on the streets of New York that I thought looked great” and has since travelled the world shooting regular, stylish people.

Ed Burstell, buying director at Liberty who is responsible for bringing the pop-up shop to the London store for London Fashion Week later this month, calls the blog a “cult-like hit”. The success of the site can be attributed both to Mr Schuman’s aesthetic skill – the shots are all notably well framed and lit – and his judgment: the people featured tend to look original and great, but not weird, so there is an informational aspect to the site. It isn’t sensational, but user-friendly.

However, though Mr Schuman is a talented photographer and a good judge of chic with a book based on the blog out this month, there’s nothing in his pictures to suggest he should be a retailer, or has any real retail credentials. He does have some experience in the area – he ran his own showroom in New York prior to 9/11 and worked in sales and marketing with Valentino and the distribution company Onward Kashiyama – but his blog fans don’t follow him because of that; as far as they’re concerned, he’s a name behind a lens.

Yet he and a group of fashion insiders like him – including Tyler Brûlé, founder and editor-in-chief of the magazine Monocle and a columnist for this newspaper who has opened three Monocle-branded shops on the back of an internet retail shop linked to the magazine’s website, and Nick Candy of the luxury real estate group Candy & Candy, who is planning to open retail outlets to sell the fittings and furniture from his flats even though he has no background in design – are moving out of the shadows and into the world of shopkeeping.

The result, says Robert Burke, president of the luxury consultancy Robert Burke Associates, is a “new wave” of vendors. Indeed, Mr Burke sees this as the next evolution of niche retail: after the socialite retailer (Gloria Vanderbilt, Tory Burch) and the celebrity designer (Jennifer Lopez, Sarah Jessica Parker) comes the socially networked retailer.

Thes difference is that the earlier non-trained retailers were women who clearly wore – and were photographed in – clothes that defined their style and represented a public track record of their taste. For their followers, the decision to shop at their stores was, in effect, a decision about whether or not they wanted to look like a celebrity.

By contrast, Mr Schuman and his ilk have a largely virtual track record, and with it, an even larger virtual community. Mr Schuman’s blog, for example, gets approximately 140,000 hits a day.

Monocle’s website gets 890,000 page views a month, and its shopping page has about 850 visitors per day. Compare this with the magazine’s hard copy subscription number of 12,500; if even a quarter of the online fans become bricks-and-mortar customers, the shops will be in the black.

Indeed, Mr Brûlé notes that his London store had paid for itself within a month of opening, a fact he attributes to its tiny size (“we have a 100 sq ft model,” he says), opportunity in the real estate market, purposefully low overheads and the “people who find us online or in a news agent and come to hang out”.

Likewise, he says, the store in Palma de Mallorca has worked partly because readers who knew the magazine via its online version but could not get it locally went to the boutique in search of the brand.

Similarly, Liberty’s Mr Burstall notes that one reason the store is attracted by Mr Schuman is his “fanatic” online following.

Mr Candy says the idea for his store was sparked by the number of requests from consumers who had viewed the company’s work on the web or in person, and asked if they could buy select bits of the fittings, rather than employing the firm for an entire project. “Having a store will allow people to buy into our world in a way they couldn’t before,” he says. “The great advantage is we already know them; we just have to let them know where to go.”

Just as celebrities and socialites before them could branch out into retail by taking advantage of the values and groups their media coverage generated, now the internet allows a similar move as otherwise low-profile people who would have had no opportunity to air their views can present themselves as experts in their fields simply by claiming the title for themselves. And though Mr Brûlé is arguably better known than either Mr Schuman or Mr Candy, he is still more publicly linked to Wallpaper*, his first publishing effort, than Monocle, which he has presented as a standalone (if slightly obscure) brand name.

“The media is now such that if you have a strong point of view you can put it in a blog and it will show through, even if you don’t have a lot of money,” says Mr Schuman. “Then people will find you. The blog started because I think I had read a book called Just Make Yourself an Authority and it made a lot of sense to me. I thought, ‘I know what I like, and everyone else can decide if they agree’.”

“Fashion is based on dictatorships,” says Mr Burke. “You know: the 10 must-haves of the season. What the internet has done is democratise that, so there are many more voices who can be dictators.”

Combined with the current retail climate, which has seen many stores forced into fire sales, he adds that this has created an opportunity for entrepreneurs like Mr Schuman. According to Mr Burke, a former senior vice-president of fashion at Bergdorf Goodman, department stores under financial pressure traditionally protect their bottom lines by sticking with names and brands they know and styles that they know sell, a strategy that may be safe but is rarely enough to inspire consumers to buy during difficult economic periods.

New retailers fresh from the wild, wild west of the internet and free from any obligations or history are more likely to make innovative decisions about stock that can result in sales. It’s an inversion of the current equation that sees brands with stores moving into online retail; instead, these online names are moving into bricks and mortar.

“Traditionally, luxury retailing and the internet have not gone hand-in-hand, but I think that’s because we were coming at it from the wrong direction,” says Mr Candy. “Instead of trying to move people from stores to the virtual world, we are now trying to migrate them the other way.”

WWD: Carlos Campos Launching Women's

WWD | ROSEMARY FEITELBERG

After five seasons of designing men’s wear, Carlos Campos is adding women’s contemporary sportswear to his repertoire this spring.

The extension has always been part of his business strategy — the men’s side of things just happened to evolve more organically. During an interview Wednesday in his West 35th Street showroom in New York, the designer said while growing up in Honduras, he learned the ropes working for his father after school in one of the two tailor shops his family owned there. After graduating from the Fashion Institute of Technology, Campos started making suits for select male clients and his signature collection sprang from that.

While he has offered a few women’s pieces each season, he will unveil the 60-style women’s collection for spring with a presentation and party on Sept. 11 during New York Fashion Week at Twelve21, a West 21st Street event space that was once home to the Sound Factory. The sleek interior is similar to the one in his showroom and the one in his two-month-old freestanding store in Honduras, as well as the work of architect Tadao Ando, who, along with photographer Richard Pare, was a source of inspiration for the premiere women’s collection. To emphasize his point, Campos presented a book of Ando’s creations, noting how traces of a rounded stairway can be seen in a futuristic two-layer blouse or how an image of a reflection pool is reminiscent of a print for a short dress.

Campos, who is working with Robert Burke & Associates, said the recession offers an opportunity for emerging designers, since many department stores and specialty stores are trying to differentiate themselves. Geared to be at the opening price range for contemporary sportswear, wholesale prices range from $30 for a T-shirt to $300 for a dress.

“We wanted to have consistent price points and keep the design element,” said Campos, Fashion Group International’s Rising Star for men’s wear for 2008-09. “In times like these, we also want to support the people who produce our clothes. We have to support each other for a while and deliver a higher quality without breaking price.”

Eighty percent of the collection is made in New York, with the remaining 20 percent produced in Honduras. The designer’s freestanding store in his homeland has exceeded sales expectations despite the political unrest stemming from Manuel Zelaya’s ousting as president.

“It hasn’t affected us in any way there,” he said of the political situation. “We’re doing really well there.”

The designer has been scouting locations in the Meatpacking District for his first store in the U.S., which he expects to open next year. On another front, he has collaborated with Danielle and Jodie Snyder, the designer sisters behind the Dannijo jewelry collection, to develop pieces for his presentation.

WWD: Burke, Coplan Hurowitz Form Joint Venture

WWD | MARC KARIMZADEH

NEW YORK — From Michael Graves for Target to Takashi Murakami for Louis Vuitton, the past decade has seen many artists or design gurus link with fashion brands and retailers.

Now Robert Burke, president of the Robert Burke Associates consulting firm, and Sharon Coplan Hurowitz, the art consultant and author who runs an art advisory business, are joining forces to further the concept. The two have formed CounterpART, a joint venture that will serve as a platform to form partnerships between artists and lifestyle brands.

“We want to help edit and curate to find the right connection between artists and retailers or brands,” said Coplan Hurowitz, who previously worked as a specialist in contemporary prints for both Sotheby’s and Christies.

Coplan Hurowitz added artists are “on the cusp of culture,” which is something from which brands can benefit.

“We felt we could provide something personal, unique and highly creative,” Burke said.

He added that collaborations have often had a limited run, but can become more of a long-term partnership if strategized correctly.

“Retailers are looking, particularly in this economy, to drive consumers into stores,” Burke noted.

And it’s not just fashion brands or retailers the duo is targeting — the two agree an artist’s touch could reinvent a host of things, down to a toothbrush.

“I think that brands and companies want something contemporary and alive, and that is what I believe artists do for us,” Coplan Hurowitz noted. “We see them as forerunners of ideas and concepts.”

WWD: Fashion Firms Brace for a Crucial Season

WWD | MARC KARIMZADEH

Fall could be the make-or-break season for small fashion companies.

The heat is on firms with retail sales of $7 million to $10 million as stores reduce inventory, dump nonperforming labels and order collections closer to the season. Along with those pressures, the number of specialty stores that are typically more willing to take a chance on little guys is shrinking.

Given the horrendous retail scene since last fall, rumors of a possible demise swirl around almost every small company or young designer. And the list of casualties and labels struggling to make it seems to be growing. From Jane Mayle, who shuttered her Mayle line earlier this year, to Peter Som, whose future was uncertain until he inked a deal with Milan-based clothing manufacturer Margon and New York multiline showroom ADC in May, the economy has taken its toll across a wide range of designers.

Many of the newer designers don’t have the infrastructure or financial strength to weather continuing economic turbulence. They face few to no prospects of significant financing and aren’t ready or capable of opening their own freestanding stores to minimize the impact of woes at the department and specialty store level.

Industry consultants believe a number of smaller firms were able to survive the past two seasons on a shoestring, limping along without significant sales. But the third season of the financial meltdown looms as a crossroads — and could mean that, come January, there will be a raft of closures and liquidations.

“Now, if they don’t get the kind of sales they need, they will have to decide to go forward or not,” said Robert Burke, founder of the Robert Burke Associates consultancy. “Many of them were having a challenging time when the economy was good, and now, with retailers reassessing assortments and with the importance of timely deliveries, it will be challenging. The minimums have also gone down, sometimes affecting their ability to produce with factories at lower prices.”

Allan Ellinger, senior managing partner at Marketing Management Group, noted, “For a lot of companies whose businesses have been marginal and growth has been marginal if at all, their financial partners — if they have them — and their banks will be looking at the season very critically. You can only carry a business for so long. The economics have to work. Unless a company has unlimited financial capabilities, this is a very crucial season.”

Competitive pricing could become a key to a business’ health this fall and experts believe smaller firms that don’t have the clout of megabrands will be hard-pressed to negotiate better deals with their manufacturing partners.

“The established people and big retailers have more freedom to tighten their margins,” said David Wolfe, creative director at The Doneger Group. “When we hear people like Dolce & Gabbana saying prices will be [10 to 20] percent lower, we know they can do it. It will be difficult for a young start-up designer to [do] that kind of price manipulation.”

 New launches also will have a hard time showing retailers’ consistent sales for the simple reason they don’t have much of a track record. In contrast, some of the established brands are expected to perform better on paper this fall compared with last fall’s dismal figures.

“This fall will be crunch time for a lot of young and new designers,” Wolfe said. “Even specialty stores seem to be looking at lines that have a performance record already. Retailers want a guarantee that it’s going to sell.”

Jeffry Aronsson, founder of the Aronsson Group, noted that undercapitalized houses that incurred expenses in anticipation of business that didn’t materialize are at a particularly high risk.

“I would imagine that there will be a number of companies that won’t be able to survive,” he said.

Adding international distribution will be essential for these smaller firms, among other strategic moves, Burke said, to avoid depending solely on one economy. To do so, however, often requires the help of local distribution partners.

“Many are looking strategically at how to position their opening prices, their core product and their international business,” he said. “Those are the three things they have to do to survive.”

Several designer firms have used the last year to make adjustments to their businesses to stay viable, and they take issue with the “make-or-break” mentality.

Doo.Ri designer Doo-Ri Chung added a lower-priced line called Under.Ligne, and she said there has been some positive news amid the industry’s overall gloom.

“We have landed two new accounts, and even though [retailers’] budgets have been slashed, we managed to grow in a small way,” Chung said. “We are pretty much trying to do a lot more with what we already have. I think it would have been a different story had we planned on a major expansion and already invested in it. We already braced ourselves and I don’t feel it is a make-or-break season.”

Behnaz Sarafpour said, “I don’t think there is such a thing as a make-or-break season. We have gone through a year now of learning how to adjust, whether it is offering a different assortment of product or price point.”

Sarafpour said she has adjusted her distribution strategy because of the recession.

“When things were better, we were more focused on individual large orders,” she said. “Now, we are not about selling a lot to one place with one order. We are more diversified now with more stores and do business with more smaller orders rather than working with a few with giant orders. If somebody hasn’t been able to make adjustments and run out of cash, it could be [the break season]. But I wouldn’t say that as a general for the industry.”

WSJ: Why a Posh Store Is Selling on eBay

WALL STREET JOURNAL | RAY A. SMITH

Dallas's Stanley Korshak clothing store has long been known for its high-end merchandise, wealthy clientele and personalized customer service. But as owner Crawford Brock watched the recession take hold, a new idea clicked.

Mr. Brock decided to sell some of his excess merchandise, which included $5,700 Kiton sport coats and $900 Christian Louboutin heels, in a decidedly more downscale venue: eBay.

Since late last year, the retailer has been quietly unloading unsold clothing and accessories on the online auction site under the screen name takeitawayluxury.

Stanley Korshak's eBay experiment is an example of how one of the worst retail environments in decades is spurring stores to innovative -- and somewhat controversial -- ways of coping. Members of Threadwize, a trade group of 10 U.S. specialty stores, are considering selling on eBay, too, says President George Bass; last fall, his New Orleans men's store became the first of the group to sell on eBay.

I found out about Stanley Korshak's eBay gambit when a friend who's a bit of a clotheshorse was on eBay searching for Ralph Lauren Purple Label clothing. He clicked on a Purple Label tuxedo that caught his eye and was directed to takeitawayluxury. A link at the bottom told him it was Stanley Korshak. The auction site's bargain-basement image seemed at odds with the carefully guarded brand of a luxury retailer.

Old-line, high-end independent clothing stores have long been holdouts when it comes to new technology. It's only in the past 18 months or so that specialty stores have sent customers mass emails, which in the past would have seemed less than genteel. Many specialty stores still are resistant to online sales, feeling high-end clothing needs to be touched and tried on. For years, Stanley Korshak's sales associates have been known to travel to customers' homes for wardrobe consultations and closet evaluations.

But the downturn has put pressure on all stores to go online or go extinct. In recent months, Stanley Korshak has generated a database of 70,000 customer emails, which it uses to advertise as well as send alerts for special events, sales or new merchandise. It set up a Facebook page for a women's satellite store branch called The Shak. It launched its official e-commerce site in October. For the time being, the site sells only accessories that aren't sized, such as handbags and jewelry. Mr. Brock says visits to the site now total about 700,000 a month.

Stanley Korshak's eBay effort has a relatively low sell-through rate -- the percentage of goods posted that are sold -- of 16.5%, according to Advanced Economic Research Systems Inc.'s Terapeak, a company that tracks sales on eBay. It has captured $37,239 in sales, the firm says, and sold just 151 items out of 915 listed for the 90-day period between Jan. 20 and April 19.

In recent days, a Loro Piana sweater vest that the retailer says was originally priced at $975 sold for $195 on eBay, and a pair of Bottega Veneta sandals originally priced at $920 sold for $242.50.

People who buy Stanley Korshak goods on eBay find some of its personalized touches. When merchandise arrives, it's tissued and neatly packaged in one of the retailer's signature gift boxes.

Mr. Brock says he is pleased with sales on eBay so far. Still, the store remains ambivalent about how openly to reveal itself on eBay. At first, Stanley Korshak identified itself with a line that read: "Please check out our regular priced merchandise at:www.stanleykorshak.com."

But recently, Mr. Brock removed that link and ID tag. "We've been thinking it through, and we're not so sure we want people to know necessarily that this is Stanley Korshak," he says. "We may turn it back on, but right now it's off."

One risk of his strategy: upsetting fashion designers who don't want their goods sold on eBay. Labels have come, however reluctantly, to expect some discounting in stores, as well as resales to T.J. Maxx and the like. But eBay makes them uneasy, in part because their stuff is being auctioned off, allowing customers to determine the final price. "In the retail world, that is just a no-no," says Robert Burke, a former fashion director at Bergdorf Goodman who owns a luxury-goods consultancy.

Pier Luigi Guerci, chief executive of Loro Piana USA, says, "Loro Piana disapproves and does not authorize resale by any of its wholesale accounts." Bottega Veneta and Polo Ralph Lauren declined to comment, while Christian Louboutin and Kiton didn't respond to comment requests. Also, eBay declined to comment.

Mr. Brock says he didn't consult with the brands he has sold on eBay and hasn't gotten any feedback. He's aware the brands might disapprove, but he argues that eBay isn't really that different from the outlet stores that high-end department stores use to get rid of unsold goods. He notes that many individuals try to turn a profit by buying luxury goods at stores on sale and reselling them on eBay.

The other risk that Stanley Korshak and the brands face is becoming associated with bargain shopping. Mr. Burke notes: "Because [eBay is] such a big and vast selling site, the product would not be presented in a high-end and luxury manner acceptable to the brands that have worked so hard to create their image."

Indeed, one man who bought a Bamford & Sons dress shirt from takeitawayluxury for $80 declined to give his name for this article. He says he didn't want acquaintances and colleagues to know he was shopping on eBay. "There's a little bit of a stigma," he told me. "I'm not ready to start taking the ribbing."

—Geoffrey A. Fowler contributed to this article.

WSJ: Can Jeweler's Celebrity Chic Entice Investors?

WALL STREET JOURNAL | CHRISTINA BINKLEY

BlackBerry Bold in one hand and chicken satay in the other, Loree Rodkin is juggling her schedule and her business over lunch at Mr. Chow in Los Angeles: Elton expects her in Vegas the next week, and Cher wants her to come to an upcoming Caesars Palace show. "I'm like, I've seen your show four times -- I could sing it," she says.

Well-connected in Hollywood and rocker circles, Ms. Rodkin has jetted to widespread fame as a jewelry designer since becoming Michelle Obama's go-to jeweler. Her medieval-looking pendants and signet rings are pitch-perfect for baby boomers who have fond memories of their peace-love-and-rock'n'roll days but have grown into diamonds and gold.

Now, Ms. Rodkin is ready to cash in. She has been telling friends that she would be willing to sell her company.

Recession or no, the dream of selling one's brand lives on in the luxury business. Investors can offer designers the joys of creativity without the headaches of operations and can bankroll global expansions. Louis Vuitton made luggage and ran his company until his death in 1892, when he passed it on to his son George. But these days, who wants to labor as an artisan into old age?

After last fall, it looked like the unstable economy might have killed those dreams. Yet there are signs that some investors are already regaining their stomachs for risk, says Robert Burke, founder of Robert Burke Associates, a luxury and fashion investment consulting firm. Indeed, he says he is forming a joint venture to invest in fashion brands. Mr. Burke declined to identify his partner and says he doesn't know enough about Ms. Rodkin's business to say whether it's of interest.

Ms. Rodkin owns her company wholly, has a lucrative licensing deal in Japan, and says she has little or no debt. With revenue of roughly $12 million a year, her business is small -- but big enough to grow into the $100 million range that investors often want.

If she finds a buyer, Ms. Rodkin says she'd like to stick around after selling her company, and be hired to do the pure designing. She talked about wanting more stores, including some in Europe and Asia, but not wanting to have to own and operate them herself.

What can't be known is how much of Ms. Rodkin's edgy style DNA would remain in a corporate version of her company. Such marriages are notoriously risky; often, designers' visions for the products that bear their name differ from the plans of people writing the checks. Designer Narciso Rodriguez recently split with investor Liz Claiborne Inc. after only 18 months, with both sides citing irreconcilable differences.

"Smaller companies growing and becoming corporate can culturally be challenging," says Mr. Burke. Indeed, his new venture is banking on his expectation that brands have become more needy, or at least more humble -- and thus more willing to accept strategic direction from outsiders.

For designers, making a successful deal can depend on finding a buyer who is like-minded about the company's future. Mr. Burke cites as successful the case of Ippolita, another jewelry designer whose company sold a stake in 2007 to private equity fund Castanea Partners. Ippolita has since expanded into new materials, such as a rose-gold line.

Ms. Rodkin, like J. Crew, is an atypical choice for a first lady. The designer is known for her expensive Goth bondage rings and macabre skull motifs, intricately carved and generally studded with diamonds, that put a subversive twist on high jewelry. Prices run between $5,000 and $400,000.

"It's beautiful, but it's not too pretty," says Shelley Aarons, a longtime customer and art collector from New York. She can be seen wearing a necklace and earrings by Ms. Rodkin in a portrait by Italian artist Francesco Clemente.

Ms. Rodkin, whose droll conversation is peppered with expletives, likes to say she's just a "crazy artist." "I have no idea how much money I make," she announces, an oversized Chanel logo bag thrown over her shoulder as she hikes up Brighton Way to her Beverly Hills office.

But she is, in fact, a canny businesswoman -- a former Hollywood talent manager who got her former boyfriend, the late ballet dancer Alexander Godunov, his role in the movie "Witness." Jewelry started as a hobby. Soon she was selling medieval diamond crosses and daggers to stores on both sides of the Atlantic.

"She makes things that cross barriers," says April Kramer, former wife of Aerosmith drummer Joey Kramer. She has been wearing Loree Rodkin for years. "The pieces are feminine yet strong."

Mrs. Obama, who tends to pick Ms. Rodkin's least edgy pieces, chose a pair of 61-carat earrings, a 13-carat signet ring, and 13 white-gold-and-diamond bangles to wear for the inauguration balls.

While Ms. Rodkin was asked to donate the inaugural-ball items to the Smithsonian, other items are loaners -- the same system that designers use to persuade starlets to wear their creations.

That system has its risks. Ms. Rodkin loaned one pricey ring to singer Rihanna, who happened to be wearing it on the night she was allegedly beaten by her boyfriend. The ring was taken by the Los Angeles Police Department and held as evidence.

WSJ: Bucked by Designer, Versace CEO Eyes Exit

WALL STREET JOURNAL | STACY MEICHTRY

ROME -- Gianni Versace SpA Chief Executive Giancarlo Di Risio is expected to resign, a person familiar with the matter said, after months of clashes with lead designer Donatella Versace over how to cut costs at the Italian fashion house.

Mr. Di Risio plans to tender his resignation in coming days, this person said. It was unclear how the Versace family, which owns 100% of the fashion house, would react.

A spokeswoman for the company declined to comment and said Ms. Versace wasn't available for an interview.

The Versace family issued a statement Thursday saying that "the professional relationship between Versace and its CEO" hasn't been terminated. Versace is focusing on "measures it should adopt to confront the effects of the economic downturn on the luxury sector," the statement said.

Ms. Versace owns a 20% stake in the company, which was founded by her brother, the late Gianni Versace. Her brother Santo Versace owns 30%. Ms. Versace's 22-year-old daughter, Allegra Versace Beck, owns 50%. Ms. Beck has backed her mother in the designer's clashes with Mr. Di Risio, the person familiar with the matter said.

A resignation by Mr. Di Risio, which would come as Versace's profit is suffering, would highlight the pressure faced by Europe's many family-owned fashion houses. Such companies are suffering more than their larger, financially sturdier peers amid the global economic slump.

Many of these family businesses in recent years have brought in professional executives to restructure their operations and help them grow.

Yet the belt-tightening has proven too painful for some. Brian Blake in April stepped down as chief operating officer and commercial director of Prada SpA, which is owned by the designer Miuccia Prada and her husband, Patrizio Bertelli. Mr. Blake had been tapped in 2007 to prepare Prada for a stock-exchange listing that never came to pass.

Mr. Di Risio and Ms. Versace, both 53 years old, have been at odds for months over how to reduce costs for such items as promotional events and parties, according to the person familiar with the matter.

Even in good times, the question of how much to spend on public events and advertising campaigns is a source of tension between executives who want to control costs and designers eager to generate buzz. With the global downturn crimping profits, CEOs are under even more pressure.

"It's going to be a fine balance for CEOs to balance budgets while maintaining the public face of the company and the exposure that it costs," said Robert Burke, a luxury-industry consultant.

Ms. Versace and her brother Santo took over the fashion house in 1997 after Gianni Versace was gunned down outside his Miami villa. Mr. Versace's death sent the fashion house into a financial spiral as customers loyal to the late designer's styles began to look elsewhere.

When Mr. Di Risio was brought in to run Versace in 2004, the company was saddled with more than $146 million in debt and posted a net loss of $124 million. Ms. Versace, backed by her daughter, gave the executive a free hand to restructure the company.

Mr. Di Risio began by untangling the company's assets from the family's personal holdings, which included a Manhattan town house that the family sold in 2005 for $35 million.

Mr. Di Risio closed unprofitable lines, such as lingerie and children's wear, and focused on overhauling Versace flagship stores in fashion capitals including New York, London and Milan. He also opened new stores in fast-growing luxury markets, such as China.

Under Mr. Di Risio, Versace also formed joint ventures that extended the Versace brand to Lamborghini sports cars and AugustaWestland helicopters.

Ms. Versace, known for her bleach-blond hair and sexy dresses, embraced Mr. Di Risio's commercial focus, reining in the brand's flashy designs for more restrained styles that have longer shelf life. She also began to concentrate on designing accessories, such as handbags and shoes, which generate greater profit margins.

At times, however, relations between Mr. Di Risio and Ms. Versace, who is vice president of the board, became strained. Initially, for example, Ms. Versace tried to persuade Mr. Di Risio to revive the house's tradition of mounting high-profile, but costly, fashion shows for the designer's haute couture collection. Mr. Di Risio talked her out of the idea, persuading Ms. Versace to present her collections to clients in private appointments.

By 2006, Mr. Di Risio's strategy had returned the fashion house to profitability, posting earnings of €19.1 million ($26.3 million). Versace's profit has slipped since, however. The fashion house last year reported sales of €336 million and scratched out a net profit of €9 million, down from €13 million a year earlier.

As profit fell, tensions rose. In January, Mr. Di Risio began to push Ms. Versace to simplify her designs so that the label could lower its prices, the person familiar with the matter said.

WSJ: Do You Want Clothes to Go With That Perfume?

WALL STREET JOURNAL | CHRISTINA BINKLEY

During the Paris fashion shows last week, a number of store buyers and style editors veered from the hubbub of the runways to the Yvon Lambert Gallery in the bohemian Marais district.

The draw: a new line of exquisitely detailed womenswear by the house of Rochas, a historic brand that for nearly three years had existed only as a lineof fragrances.

When owner Procter & GamblePG -0.58% shuttered the brand's fashion line in 2006, it seemed to be the end of Rochas. But as it turns out, those P&G fragrances kept the brand alive until a new manufacturer emerged.

Fashion and fragrance: It's one of the ready-to-wear industry's most stable marriages. Many, if not most, successful colognes are offshoots of luxury clothing brands. Gucci, Dior, Dolce & Gabbana, Thierry Mugler, Stella McCartney, Juicy Couture -- you can pick your favorite designer and smell like them. A number of once-celebrated fashion houses have been reduced to fragrances for years until a designer came along to air them out. Chanel was famously revived after years in a bottle. More recently, Vanessa Seward has been designing collections for Azzaro, known more for cologne than for clothes.

The benefits of fragrance for fashion are clear-cut. It costs more to manufacture clothes, which come in all those pesky styles and sizes, than scents. With their high margins, fragrances often contribute the lion's share of profits to a brand and can support it through boom and recession. At Puig Beauty & Fashion Group SL, the Spanish fashion company that owns Nina Ricci and Carolina Herrera, 80% of its net revenue came from fragrances in 2007, the most recent year reported.

Fashion these days is more about branding than clothes, and every brand needs a family of profitable products such as shoes, belts, bags and jewelry. "A brand is like a friend," said Robert Polet, chief executive of Gucci Group, whose Yves St. Laurent brand just turned profitable after years of losses. The path to profitability, he noted, involved marketing fragrances and dropping products that didn't draw fashion-minded consumers. "That's why there are no more YSL watches," he said.

But even as fragrances enrich fashion brands, it's a truth less acknowledged that fashion helps fragrances as well. Every good eau needs clothes.

When a brand is left with only a fragrance, as in the case of Rochas, it runs the risk of losing its relevance. "Fragrances have only a certain shelf life," says Robert Burke, an investment consultant and former Bergdorf Goodman executive. "Fragrances are generally successful when they're connected to a living person." The buzz created by celebrated designers and runway shows can update and revivify an old perfume.

So it was the fragrance of Rochas that lured Italian fashion manufacturer Gibò Co. SpA to re-open the house. After a licensing deal with P&G last fall, Gibò President Franco Penè hired Italian designer Marco Zanini. Mr. Penè asked for a collection with the elegant understatement of brands like Hermes and Gucci Group's Bottega Veneta, hoping to draw a contrast with flashy, heavily logoed lines. "The logo business was killing the luxury business," explains Mr. Penè.

This is hardly an ideal moment to introduce a new luxury-clothing line. After a six-year boom, luxury sales are expected to fall by at least 15% this year. Retailers like Saks and Neiman Marcus, facing tremendous losses, are cutting the size of their designer orders by between 20% and 30%. "It will be a difficult season," says Mr. Penè. I spent an hour at Gibò's Paris showroom last week and saw only one buyer looking over Rochas.

What's more, even the scent business couldn't prevent Rochas from losing money on clothes a few years ago. The house was founded in 1925 by Marcel Rochas, who has been credited with designing the first 2/3-length coats and skirts with pockets. By the time designer Olivier Theyskens was hired in 2002, Rochas was known more for cologne than clothes. But Mr. Theyskens's collections were critically acclaimed and turned that image around. He won the Council of Fashion Designers of America's International Award in 2006 -- akin to winning an Oscar.

Some of those gowns, though, were priced well over $30,000 -- reaching a thinly populated stratum that didn't make the line profitable. Procter & Gamble discontinued the clothes line within weeks of its designer's award.

It's worth noting that Mr. Theyskens two weeks ago left his job at Nina Ricci under similar circumstances -- critically acclaimed, highly expensive, detailed clothes that failed to meet profit goals.

Still, Mr. Zanini's Rochas is another world entirely. It's reasonably priced, as luxury clothing goes, with dresses costing between $950 and $1,400 at retail, and jackets priced between $850 and $1,300. Since that still isn't cheap, Mr. Zanini, a veteran of Halston and Versace whose deep sideburns give him a slightly wacky Victorian look, has endeavored to include for the brand's luxury clients the sort of interior details that have largely disappeared from modern clothing. Women's cardigans and jackets have generous interior pockets. Feather-light cashmere sweaters are lined in silk.

Everything is manufactured in Italy, and much of the work is done by hand. The result is understated and highly feminine. One knitted lace dress could be a workhorse, packable and, like the blazers, presentable at corporate meetings. Other elements of the collection, such as light silk blouses, are more fragile.

Rather than a logo, a signature Rochas ribbon runs through inside seams -- visible only to the woman who wears the clothes. In a knitted dress, the ribbon motif is subtly repeated in the knit pattern

"A garment is as important on the inside as on the outside," says Mr. Zanini. "For me, luxury is also the experience of wearing -- to discover the secrets of the pockets and the silk ribbon."

WWD: Poleci Appoints New President

WWD | JULEE KAPLAN

Poleci is stepping it up a notch.

On Friday, the company said it has named Jean Claude Huon as president of the 15-year-old contemporary firm. Huon joins the brand from Bill Blass Holding Co. Inc., where he was vice president of couture and licensees. Prior to Blass, he was general manager for fashion titles Jalouse and L’Officiel, where he worked to launch the U.S. editions. He has also worked at Pierre Cardin, where he oversaw the brand’s licensing business for 10 years.

In other company news, Poleci plans to show for the first time during New York Fashion Week. The presentation will be held at the brand’s flagship store at 32 Gansevoort St. on Feb. 14 from 6 p.m. to 8 p.m.

In addition, the firm has tapped Robert Burke Associates to serve as a strategic adviser in the development and expansion of the business. Burke will consult on all retail aspects, including merchandising, brand positioning and distribution strategies.

In his new role at Poleci, Huon will work alongside Diane Levin, chief executive officer, and Janice Levin-Krok, creative director, to lead the expansion of the brand both in the U.S. and internationally.

Huon reports to Poleci owner Haresh Tharani, who took ownership of the firm in 2006. Tharani runs Tharanco Group, which also owns Joseph A. and, along with Michael Groveman, sold the Bill Blass ready-to-wear business to NexCen Brands Inc. for $54.6 million in cash and stock. Tharanco was said to be interested at one point in repurchasing the Blass business from NexCen, but the business subsequently was liquidated.