WSJ: With Leap To Vuitton, A Change In Culture

WALL STREET JOURNAL | MAX COLCHESTER & CHRISTINA PASSARIELLO

PARIS—Louis Vuitton's CEO-in-waiting, Jordi Constans, won't be the first consumer-goods brand manager who jumps over to the luxury-goods business. But when he arrives at the French luxury fashion giant, Mr. Constans is likely to face a culture shock.

Known for yogurt and bottled water, his former employer, Groupe Danone SA, has a dressed-down style, where executives rarely wear ties, in contrast to the sleekness found at Louis Vuitton, an empire built on status-symbol handbags. At Danone, the informal "tu" form of addressing people—rather than the more formal French "vous"—permeates even the chief executive suite.

LVMH employees are decorous, and it is considered a plus for job candidates to be well-versed in classical music. As for Mr. Constans, he's a keen electric-guitar player.

On Wednesday parent company LVMH Moët Hennessy Louis Vuitton said Mr. Constans, a relatively unknown Spanish executive, will work with current Louis Vuitton chief executive Yves Carcelle for a year before taking the reins of the fashion brand.

The 47-year-old Mr. Constans declined to be interviewed for this article. LVMH declined to make Mr. Carcelle available to comment.

The business-school educated Mr. Constans is likely to bring a more modern touch to proceedings at Louis Vuitton. Mr. Constans replies to email promptly and personally. Mr. Carcelle's secretary prints out his emails for him.

In an interview on Danone's website from January 2010, Mr. Constans describes the food maker's culture as "humble" and "constantly questioning ourselves." Speaking in French with a slight Spanish accent, he says the qualities he encourages in his employees are "openness, rapidity and agility."

At Danone, Mr. Constans piloted the dairy division through the financial crisis by slashing prices on its best-selling products to boost volumes. He also polled consumers about how they liked his yogurts and worked with bloggers.

During an April speech to students at the IESE business school in Spain, his alma mater, Mr. Constans laid out his philosophy on innovation. He highlighted "avoiding the production of useless items" and said economic crises are an "optimal time to innovate," according to the IESE. "Innovation comes from a good conversation," the IESE quoted him saying on its Web site. "You never forget a good conversation."

Investors will be anxious to see how that philosophy meshes with selling $1,000 handbags in China. Indeed, many experts are fretting that Mr. Constans doesn't have an extended track record in emerging markets.

"Louis Vuitton has done an excellent job in boosting distribution and the brand's image in Asia," said Robert Burke, president of Robert Burke Associates, a New York-based luxury-goods consulting firm. For Mr. Constans, "it will be a steep learning curve."

Louis Vuitton, which is the flagship brand of the LVMH luxury goods empire, generated around €6 billion ($8.21 billion) in sales in 2010. Around 60% of Louis Vuitton's revenue came from Asia, according to research by HSBC. The entire company had 2010 revenue totaling €20.3 billion.

Filling Mr. Carcelle's shoes will be a challenge, analysts say. The 63-year-old spent the last 21 years transforming Louis Vuitton from a French trunk maker into a global handbag brand with operations stretching from Shanghai to Rio de Janeiro. Mr. Carcelle fine-tuned Louis Vuitton's image to keep it up-market yet affordable for aspirational shoppers, while ensuring an efficient distribution and production network.

The amiable Frenchman is also famed within the company for his ability to combine work and play. Mr. Carcelle has been seen partying late at night with designer Karl Lagerfeld and quaffing champagne early in the morning after news conferences about yachting races. But Mr. Carcelle is known for working long hours, starting at the crack of dawn to catch his colleagues in Japan; his three assistants work in shifts to keep up. During the weekends, he often zips down to the south of France where he owns a vineyard and a country house he has decorated with contemporary art.

Despite the cultural differences between Danone and LVMH, it was widely expected that Louis Vuitton would look outside the company when its current chief executive Mr. Carcelle retired, analysts say.

"The choice of a replacement outside the world of luxury is not such a big surprise," says HSBC analyst Antoine Belge. When talking about which brand he wanted Louis Vuitton to be compared to, Mr. Carcelle "never gave the name of another luxury brand and instead cited brands like Apple," Mr. Belge adds.

The conversion from consumer to luxury goods can come with a stigma. After French retail group PPR SA hired the unknown director of Unilever's frozen foods division to run its high-profile Gucci Group luxury division in 2004, Robert Polet's moniker as the ice cream man haunted him. Mr. Polet left Gucci earlier this year.

That said, LVMH has heavily recruited outside of the luxury business, hiring experts from the automotive industry to help fine tune their production line and luring Procter & Gamble Co. PG -0.62% veteran, Antonio Belloni, to become their managing director.

Mr. Constans zipped up the ranks at French food company Group Danone SA during a 21-year stint that saw him move from marketing the dairy brand in his native country of Spain to become the head of the dairy products division world-wide this past January. Until then, he split the role with another executive and focused on mature markets, such as France and Spain.

Mr. Constans helped market a number of Danone's marquee brands, which include Activia yogurt.

For Danone's yogurts that purport to have health benefits, such as Actimel and Activia, marketing those brands has required tip-toeing around regulations. Health authorities have shot down Danone's health claims—that Actimel boosts the immune system and Activia aids digestion—and Danone has challenged those rulings. But in the meantime, Mr. Constans has steered Activia and Actimel's advertising to campaigns that avoid specifically making health claims.

Not all of his product launches were successes. He tested a yogurt that purported to boost bone density, Densia, in France before pulling it from shelves when consumers didn't bite.

WWD: Can Small Men's Brands Build Big Businesses?

WWD | JOCELYN ANDERSON

When Rupert Sanderson decided to step outside his comfort zone of evening heels and make saddle shoes for women, he had no idea that would become his first men's style.

The British footwear designer viewed the 2009 debut of his Saddled O's as a sociological experiment: Give a free pair to 50 of the most influential women in the U.K. art world and monitor the result. He hoped to create a trend among a stylish group, but he got a lot more than that.

"Suddenly, all these women were wearing them at once," said Sanderson. "But one of the effects it had was that men wanted a pair as well. So we started making them in men's sizes."

While Sanderson turned to the men's market as more of a novelty, other high-end designers are following suit by offering small footwear collections for guys. United Nude, Yigal Azrouël, Shipley & Halmos and Bespoken have all launched men's shoes this year. Gianvito Rossi will debut two sneakers and a loafer for spring '12.

Renewed life in the men's footwear market provides fertile ground for such introductions. But what's the point of launching a new category in such small numbers? The reasons, Footwear News discovered, are as varied as the collections. But in all cases it's about more than money.

Sanderson said he is meeting a demand. Others said they are expressing themselves artistically, realizing a dream and carefully laying the groundwork for a larger offering.

"[We don't have] too many pieces since we're just testing the men's market," said Rem D. Koolhaas, creative director and co-founder of United Nude, which launched three men's styles for spring '11 but has increased each season, with six available for spring '12. "We make shoes that we would like to wear."

The category addition, however small, is also a way to expand a brand's identity, to be not just a men's apparel label or just a women's shoe company.

Shipley & Halmos, for example, primarily a men's clothing line that started in 2008, launched three men's shoe styles for fall '11 to complete its customers' wardrobes. A fuller accessories line is planned for spring '12.

"We wanted to keep [the shoes] focused so the production numbers were not 20 [styles] right off the bat," said Jeff Halmos, co-owner of the label. "I don't think we could have supported something like that from a production standpoint."

Similarly, men's apparel label Bespoken has expanded steadily since its founding in 2008. The owners had worked with Grenson for runway shows, but they felt a fall '11 line of three shoe styles would complement the brand's menswear, said co-owner Paul Goncalves. Bespoken turned to U.K.-based firm Kurt Geiger to develop the shoes and then landed footwear accounts with Harrods, Selfridges and Liberty. The brand is now seeking U.S. retailers.

But Goncalves recognizes such a small launch comes with a few issues.

"The challenge in footwear is that in a department store, it's going to sit separately from the [apparel]," said Goncalves. "And we're still in the midst of establishing ourselves and generating awareness for the brand."

Such trials are the same for any brand that chooses to start small, and indeed, experts said mini collections can be both helpful and harmful to building a brand's footwear profile. If designers have the "it" shoe of the season, ample choice won't matter. And when high-profile retailers pick up even just one style, there is a prestige factor that can be very beneficial. But if buyers want more options, that's a different story.

"If retailers want to edit at all, it can be challenging," said Robert Burke, president and CEO of luxury consulting firm Robert Burke Associates. "It becomes more difficult than if they have four or five styles and you can make an assortment with multiple colors. You can actually sink your teeth into it and start to have a business."

And, in general, persuading retailers to buy something new can be tough, especially with a small, expensive line in this economic climate. "At the end of the day, it's all about margin: high sell-throughs and low markdowns," said Monique Umeh from trend forecasting firm Stylesight. "A lot of retailers are afraid of the liability. That's really going to be the challenge with smaller groupings."

Celebrity stylist Maryam Malakpour, who makes Newbark shoes with her sister, Marjan, has learned a lot about placement in the two years since the line debuted. While a men's offering has always been part of the brand, the duo felt they could only successfully market and sell women's product from the outset.

"We had to really concentrate on one [category] first to get ourselves launched and understood," said Maryam Malakpour.

The brand's slipper-like line started with one slip-on style on Net-a-porter.com and is also sold at boutiques such as Blue & Cream. The designers have added a split-sole style for men and women, and a loafer and boot are now available for women. Malakpour said she would like to make those two styles for men next.

"Being a small company that is very artisan and handmade, we are taking the growth and movements very slowly so we can make sure we aren't overdoing it," she said. "The way we've been moving with [men's shoes] has been successful, but in a small way."

To be sure, measured success is often good enough as these brands get started with footwear. Credibility in the market and celebrity fans may be just as valuable as wide profit margins.

"We always take great pride in working with great mills — we don't go outside Europe for manufacturing — so it's not like we are dealing with significantly high profit margins," said Bespoken's Goncalves. "It's more about maintaining the integrity of the brand and building on the foundation we've created so far."

And experts said designers shouldn't expect that launching men's shoes in such small numbers will be very lucrative at first anyway. In fact, with many of the lines made in Italy, production costs are high, and sell-throughs aren't guaranteed.

"In the beginning, they know they are going to take a loss until they can start establishing the brand and eventually grow the brand," said Stylesight's Umeh. "But it is the right thing to start small."

That's especially true for men, said designers. Knowing that male and female customers shop differently, most designers said they don't believe men even need the level of choice offered in the women's category.

Gianvito Rossi took that into account when planning his men's launch for spring '12. Rossi, son of Sergio Rossi, bowed his namesake women's label for spring '07, but when it came to his men's collection, he decided less is more.

"It's only three styles because it's intended as a [classic selection]. And in men's, in the end, the styles are not so many," said Rossi. "We are much more restricted in our minds than women are with shoes."

Shipley & Halmos also focused on basics for its shoe line, which will grow to four styles for spring '12.

"We've got a few staples in our apparel collection that we've been running for several seasons in a row, and we want to try to build a couple of [staples] into the shoe category as well," said Halmos. "The oxford, [for instance], will carry over for spring."

Such a selling strategy takes some of the risk out of a tough retail environment. Burke said this is a model that could become more popular going forward — and that's a positive thing.

"It's good because it's allowing brands to experiment in new product categories, and it gives retailers something to buy. It diversifies the offering and gets the name out in a new and creative way," said Burke. "And it's good to see the men's shoe assortment not being dominated by the established designers and companies."

WWD: Robert Burke Associates Expands to London, L.A.

WWD | MARC KARIMZADEH

NEW YORK — Robert Burke Associates, founded in New York in 2006, is expanding.

In May, Robert Burke, president and chief executive officer of the consultancy, opened in London and Los Angeles to better serve emerging markets and the growing interest of entertainment personalities in fashion.

The London office will serve designers, brands, retailers, retail development groups and investment bankers in Europe and the Middle East. “We are seeing a lot of activity from private equity groups looking to invest in fashion brands there,” Burke said. “In London, a fair amount of brands also want to enter the U.S. market and we can help them with it.”

Florence Hampson Bellon, whom Burke worked with when she was in the London buying office for Neiman Marcus and Bergdorf Goodman and he was Bergdorf’s senior vice president of fashion and public relations, is running the London office.

The Los Angeles branch, led by Tracy Chow, who previously worked for Burke in New York, primarily focuses on celebrities and other personalities looking to translate their profile into brands. The office will help them develop brand concepts, product lines and brand extensions with collaborations and licensing agreements. Clients in that arena so far include Daphne Guinness, Andre 3000 and Carmindy.

“We are seeing so many personalities and celebrities who want to be a brand, and while that has been somewhat haphazard for many in the past, we are now available to put together a brand strategy for individuals,” Burke said.

He said international markets continue to gain in importance for luxury firms, citing countries from the former Soviet Union, including Kazakhstan, where the company is working with Saks Fifth Avenue on its first location in the region; Azerbaijan, and Poland as newer opportunities. The BRIC countries, he added, continued to represent many opportunities for fashion houses, but each comes with its own set of nuances that needs to be addressed.

“The business has changed over the past five-and-a-half years with the growth of emerging markets,” Burke said. “Some people think that with the BRIC countries, you enter and make $100 million instantly, but each one is different. In China, the luxury consumer is still being educated, and the importance of marketing and a brand presence is critical there. What works in the U.S. does not mean it automatically works in China. Brazil has its own specific challenges because of taxes and duties, but that consumer is becoming much more global. Brazil has an emerging middle class that didn’t exist as such before.”

WSJ: A Designer Changes His Stripes

WALL STREET JOURNAL | RAY A. SMITH

On a recent weekday afternoon, Tommy Hilfiger was in his office clad in his signature warm-weather uniform: navy blazer, white shirt, crisp chinos and penny loafers, no socks. Only now, there was a crucial difference. Gone was the big, yacht-captain style, double-breasted blazer with brass buttons and baggy pleated khakis.

The change mirrors a shift at his company. His recent runway collections are sleeker and more urbane than in the past. He credits the "specialists" he has tapped to rejuvenate his women's and men's runway collections.

In one of the more unusual relationships in the fashion industry, Mr. Hilfiger has hired two critically acclaimed younger designers, Peter Som in 2009, and last year Simon Spurr, as creative consultants.

"It's my formula. It's my vision," Mr. Hilfiger says. "But I wanted someone to come in who respects the vision but would want to maybe modernize it a bit."

The hires are part of Mr. Hilfiger's broader effort to refresh his 26-year-old label's image in the U.S., particularly among luxury consumers.

High-end shoppers are taking notice. Over-the-knee, high-heeled lace-up women's duck boots Mr. Som dreamed up in collaboration with Mr. Hilfiger last year turned out to be one of the label's most buzzed-about and sought-after items in years. The label's retail prices have increased approximately 15% over the past two years. Net sales for the company's products rose 14.5% in 2010.

Critics are noticing, too. Tommy Hilfiger witnessed some of its most enthusiastic runway-show reviews in years since the two young designers came on board. Reviews noted the women's clothes "felt luxurious and sophisticated in a new way" and the men's line may have marked its best interpretation of preppy to date. Mr. Spurr, 36 years old, is one of three nominees for menswear designer of the year from the Council of Fashion Designers of America, whose awards ceremony takes place June 6.

With its popular colorful, preppy aesthetic, Tommy Hilfiger was one of the hottest American brands in the 1990s. At its peak, the company, acquired last year by apparel giant Phillips-Van Heusen Corp.,PVH -1.32% generated nearly $2 billion in annual sales in the U.S. But overexposure and changing tastes caused its popularity to wane considerably in the U.S. Its red, white and blue, logo-heavy look was seen as outdated. The label took a two-year hiatus from the New York fashion week runways in 2005 as it repositioned itself in the U.S. Meanwhile, the brand thrived in Europe, where it had a more upscale reputation and look.

Mr. Hilfiger says he is encouraging the designers to come up with modern interpretations of his signature staples. "I had an in-depth conversation with Peter on what New England preppy was all about," Mr. Hilfiger says.

The two men took a field trip in late 2009 to Mr. Hilfiger's home in Greenwich, Conn. They looked through Mr. Hilfiger's closet and that of his wife, Dee. "We were talking about how when Dee went to college she wore duck boots all the time," Mr. Som, 40, says. "I have my own duck boots, so I thought it would be fun to take iconic items and spin them, so I came up with making the boots sexier."

The result: High-heeled duck boots. "It was one of the most successful items we've had," Mr. Hilfiger says.

Mr. Hilfiger hired Mr. Som after he sought the advice of Vogue editor Anna Wintour a few years ago on how to spruce up his women's runway collection. Ms. Wintour recommended he take a look at Mr. Som. When he was looking to do similar updating with the men's runway collection in 2010, Mr. Hilfiger again went to Ms. Wintour, who suggested Mr. Spurr as one possibility. Ms. Wintour, through a spokeswoman, confirmed Mr. Hilfiger's account.

While several designers work for themselves as well as with other labels, Messrs. Som and Spurr's role with Tommy Hilfiger is uncommon. Typically, when a designer with his or her own line moonlights with a big label, the label's founder is deceased or is no longer involved. Mr. Hilfiger, 60, is very much alive and still holds the titles of visionary and principal designer.

And Mr. Hilfiger hasn't kept his business relationship with the designers under wraps in the way that bigger fashion houses usually do when they bring in smaller designers. Messrs. Som and Spurr were backstage—and were thanked in the program notes—for the women's and men's shows held during New York fashion week in February.

Robert Burke, who runs luxury-goods consultancy Robert Burke Associates, says crediting Messrs. Som and Spurr "is a smart move. It elevates [Mr. Hilfiger's] visibility and credibility in the high-end designer world."

Mr. Hilfiger says he sees hiring the men as a way to help two talented and hard-working designers. Mr. Hilfiger pays each designer a salary, which all three declined to disclose. They also get business experience working for a big fashion brand with $4.6 billion in global retail sales last year.

Mr. Hilfiger says he sees his arrangement with Messrs. Spurr and Som as an extension of his track record of breeding talent. Reed Krakoff worked at Tommy Hilfiger before being tapped by Coach, where he is executive creative director.

Many designers who are at the helm of mega-brands don't do much actual sketching and sewing, especially if their labels span a wide range of products like Mr. Hilfiger's. But even from when he started his label in 1985, Mr. Hilfiger hasn't generally been thought of as a designer who wields a sketch pad and pin cushion. Mr. Hilfiger notes he had numerous hands-on design stints early in his career.

Messrs. Som and Spurr sketch, select fabrics, make prototypes and conduct fittings for Tommy Hilfiger's runway collections. (The designers don't work on the sportswear collection that is sold exclusively at Macy's.) Last week both designers were in a factory in Italy working on prototypes for the Spring 2012 Tommy Hilfiger collection to be shown at New York fashion week in September.

The two work on their own lines at the same time. They said, in separate interviews, that they never have moments where they are conflicted about whether to save an idea for their own lines instead of using it for Hilfiger.

The process usually starts when Mr. Hilfiger conducts meetings with each designer to lay out the next collection's concept. They brainstorm, reviewing previous collections and inspirational imagery.

"They will give the initial sketch" and then work with the company's in-house design team on the details, says Mr. Hilfiger. The sketches are presented to sample makers.

"Once I sketch enough, I'll go back and get Tommy's thoughts and then he has an angle I never thought of, he adds that twist that he's known for," Mr. Spurr said by telephone from Italy. "It's a collaborative process."

"I'm there but I give them space," Mr. Hilfiger says. "If they want to try something different, I'm all for it because I like innovation and I want to see what they'll do without Big Daddy." After completing fittings of samples in Italy, Messrs. Som and Spurr present them to Mr. Hilfiger in New York to review. They coordinate with the label's stylist, Karl Templer. Mr. Hilfiger alone makes the call on what will go down the runway.

WWD: String of European Firms See Designer Changes

WWD | MILES SOCHA

PARIS — The furious game of musical chairs currently under way in the design studios of Europe shows no signs of slowing down.

According to market sources, Chloé is to expected to reveal as early as today that Clare Waight Keller, most recently creative director at Pringle of Scotland, will succeed Hannah MacGibbon at the helm of the French firm.

Chloé would simply be the latest of a host of European brands expected to name new designers in the coming weeks and months, headlined by Christian Dior, which ousted its star couturier John Galliano last March amidst widening allegations of racial and anti-Semitic outbursts.

The High Court here is expected to announce Thursday a date when the designer is to stand trial on a charge of public insult.

Alexander McQueen’s Sarah Burton — thrust to international stardom for dressing England’s royal bride, Catherine Middleton — is said to be at the top of the list of potential candidates that luxury titan Bernard Arnault is coveting as Galliano’s eventual successor.

Meanwhile, the industry can anticipate new faces at a host of august names in the coming weeks and months.

Balmain has already said that Christophe Decarnin will be replaced by his number two, Olivier Rousteing, while Gianfranco Ferré, Cacharel, Azzaro, Kenzo and Trussardi are among brands said to be recruiting new creative leadership.

Even men’s wear, traditionally a less volatile industry sector, is suddenly teeming with upheaval, with Z Zegna’s star Alessandro Sartori said to be headed to Berluti; Jil Sander designer Paul Surridge tapped to succeed Sartori, and former Dunhill designer Kim Jones making his debut here next month at Louis Vuitton.

Meanwhile, Waight Keller’s successor at Pringle, former Balenciaga alum Alistair Carr, is already at work on the resort collection and will show his first men’s wear collection in Milan next month.

The flurry of change comes at a buoyant time for high-end fashion businesses, and after a long period of stability in design studios.

“The entire world is changing so deeply and so quickly in this moment. Perhaps some brands are feeling the absolute need to change their designer if he or she is no longer able to make consumers push the door of their boutiques,” mused Jean-Jacques Picart, an industry consultant here.

Tancrède de Lalun, merchandise manager for men’s and women’s wear at Printemps, said the revolving door scenario was a cyclical one and was amplified by the domino effect that every departure has on other houses.

“During the crisis, for two or three years, nobody moved,” he said. “Everyone was just ducking and waiting for the crisis to blow over by making as little noise as possible and hunkering down with their teams.”

The return of double-digit growth among many leading luxury brands has emboldened managers to give their labels a makeover, both in terms of strategy and creative talent, de Lalun said.

Lucian James, creative director and founder of Paris-based strategic consultancy Agenda Inc., agreed creative and business imperatives are in flux.

“The reason is that new sets of skills are being prioritized in an accelerated, fragmented fashion culture,” he explained. “In a social media-fueled landscape, a new breed of designer needs to operate more like commissioning editors, treating their brands as media channels that edit cultural themes, and manifest them as clothes. And while it seems new, interestingly it’s the same approach that drove Coco Chanel to success — an understanding that fashion wasn’t just clothes, it was about ideas and the culture that could be expressed as clothes.

“Designers are changing because consumers are changing; consumers want brands to inspire them with ideas, not just with advertising, and to tell them about the future, not just the past,” James added.

According to Robert Burke, president and chief executive officer of Robert Burke Associates in New York, the current game of musical chairs is likely to end with brands eclipsing the designers that eventually fill the empty seats.

“The last thing the brand wants is instability,” he said. “I wouldn’t be surprised to see lower-profile [hires] as opposed to major star designers.” Naming Christophe Lemaire to succeed Jean Paul Gaultier at Hermès and designer-creative director tandems like Sébastien Peigné and Nicola Formichetti at Mugler are other examples of the antifame trend, concurred Printemps’ de Lalun.

“The market is recovering; it’s bringing back the energy and people think business could be even better,” de Lalun said. “It’s positive in the sense that it injects energy and a fresh vision. Having said that, hopefully things will not change every couple of years, because when a house changes its designer every two years, it’s very destabilizing.”

Liberty’s managing director Ed Burstell agreed. “Generally speaking, the overall merry-go-round of designers is not great for the industry. For a retailer, it’s really difficult to stand behind a brand that has a potentially changing designer,” he said. “A retailer wins by building a loyal rapport with its clientele, and you do that with consistency. It’s really difficult to establish that rapport when the consistency is not there. Look at the best brands. Take Burberry, for example. It has a consistent vision over time. Or Chanel. A consistent vision over time.”

Chloé has certainly weathered turbulence in its design studio since the 2006 exit of Phoebe Philo.

Before installing MacGibbon, one of Philo’s deputies, Chloé experimented with a team approach and three unfruitful seasons under Swedish designer Paulo Melim Andersson.

Seen as a knitwear expert, Waight Keller claimed to have helped transform Pringle over her six-year tenure “from a Scottish knitwear company to an international luxury brand.”

Before Pringle, Waight Keller was a senior women’s designer at Gucci during the Tom Ford era. Before that, she was design director for Ralph Lauren’s Purple Label men’s line. Her first job was as a women’s wear designer for Calvin Klein.

Chloé officials could not be reached for comment at press time.

Floriane de Saint Pierre, who runs an eponymous executive search and consulting firm in Paris, said fashion firms must now face a “new world” of digital media and fast-growing emerging markets.

“Pure creativity is becoming equally important as the ability to manage creative talents at a global level,” she said. “In the past decade, we’ve seen designers become ‘creative directors.’ Now we are probably facing the need to have chief creative officers as creative partners of chief executive officers. This requires redesigning organizations.”

WWD: The Business Impact of the Royal Wedding

WWD | WWD STAFF

Dressing Catherine Middleton for the royal wedding has catapulted the house of Alexander McQueen from niche designer business into household name, giving management the delicate task of balancing its exclusive reputation with the wider commercial potential now within its grasp.

That’s how industry observers and retailers reacted to Friday’s fashion coup, which also marked a dramatic trajectory for a label once synonymous with ragtag rebellion — and one whose future seemed tenuous a year ago in the wake of the suicide of its incendiary founder.

“It will have a phenomenal impact in terms of brand awareness. The brand is still a niche brand, and this exposure will definitely bring a wider clientele,” said Ralph Toledano, the former Chloé executive who now operates a Paris-based consulting business, RT Management.

Still, Toledano said the feat of dressing Middleton, now known as the Duchess of Cambridge, should not be trumpeted too loudly. “This assignment is an honor for the designer, a fantastic tribute to the legacy of Lee Alexander McQueen. I think it should be considered as that, and not become a marketing tool,” he said.

Lucian James, creative director and founder of Paris-based strategic consultancy Agenda Inc., said the royal milestone transforms McQueen “into a true fashion house with guaranteed legacy, rather than a brand in transition centered around the original designer.”

It also “tames the edginess of the brand, raising it to a new endorsement by A-list consumers,” James said, highlighting that infamous McQueen story that, while working at Anderson & Sheppard in London, he incorporated an expletive into the lining of a jacket for the Prince of Wales.

“This moment tips the brand back to the focus on technique and on the Savile Row origins of Lee Alexander,” he said. “Meanwhile, you have to wonder whether Sarah Burton has received any calls from Bernard Arnault.”

John Guy, a retail and luxury goods analyst for The Royal Bank of Scotland, said, “Obviously, for the PPR Group this is very positive,” noting how “Other Brand” sales of which Alexander McQueen is a key sales contributor, increased first-quarter sales year-over-year by more than 20 percent to 165 million euros, or $244 million at current exchange. (Also in PPR’s “Other Brand” category are Balenciaga, Stella McCartney, Boucheron and Sergio Rossi.)

Given how well-received Middleton’s wedding dress has been and how the Burberry Prorsum trench she wore for her first post-engagement appearance sold out, Guy said, “This bodes extremely well for the McQueen business.”

While the Alexander McQueen business is significantly smaller than PPR’s Gucci, it has been a strong performer sales-wise. Further growth for this more niche label would most likely stem from opening boutiques and concept shops rather than rolling out wholesale, Guy said.

But whether it was a casual enquiry about the dress or a friendly probe about what it might mean for sales, staff at the Alexander McQueen boutique on Bond Street in London were studiously tight-lipped on the subject of the wedding on Friday afternoon following the ceremony. Temporary staff with no history at the company were working at the store for the day to help maintain the silence. In addition, one enormous security guard was positioned at the entrance to the store to fend off giant groups of tourists posing for photos.

Betsy Pearce, a Paris-based legal adviser who represented McQueen in 2000 when he sold a majority stake in his London-based house to Gucci Group, today PPR’s luxury division, marveled at the transformation of McQueen, which went from something “feral” and “deeply antiauthority” through a slow “domestication” under the umbrella of a corporate behemoth to the brand’s “coronation” last week before the eyes of the world.

“It’s the quintessential rags-to-riches story,” Pearce said. “My concern is that it’s easy to take advantage of and cash in on it. With any brand, there’s only so much time at the pinnacle.”

Pearce noted the dressing coup is a tribute to Sarah Burton, and, “I have to imagine there’s a mutual understanding of two young women thrown into a situation they didn’t expect, with enormous media scrutiny.”

In this instance, the media attention on the big day will pay off, many observers said.

“The amount of media impressions through TV, Twitter and blogs will catapult the Alexander McQueen name to familiarity it never had,” said Kim Vernon, president and ceo of Vernon Co. “Whether it translates to more perfume sales or made-to-order dresses, it is nothing but positive.”

This could include more opportunities for licensing, said Robert Burke, president and chief executive officer of Robert Burke Associates in New York. “This is a new chapter for his fragrance,” Burke said. “The objective will be to maintain the high fashion image and also be commercial.”

Burke was alluding to the late designer’s dismal foray into fragrance in 2003 and 2005 with the scents Kingdom and My Queen. When L’Oréal acquired YSL Beauté for 1.15 billion euros in 2008 from PPR, the fragrance brand was not part of the transaction and the McQueen license is now thought to be dormant.

Still, the fact that McQueen remains part of a large corporate group puts the company in a strong position to capitalize on the publicity windfall, according to Burke.

He also highlighted the already international reach of the McQueen franchise, unlike the “small, British designers” the royal family has favored in the past.

“One couldn’t have scripted it better,” Burke remarked, noting the hubbub around the wedding dress will surely dovetail with an exhibition dedicated to Alexander McQueen opening this week at New York’s Metropolitan Museum of Art.

The events will also surely catapult the profile of Burton, the current creative director at McQueen, who is already on the radar of luxury titan Arnault as he hunts for a successor to John Galliano at Christian Dior and wields one of the biggest checkbooks in the industry.

Sources said Burton seems open to discussions about working for another big brand, but PPR would likely shore up more resources to keep her ensconced at McQueen. Burton has spent her entire career at the elbow of the acclaimed British designer, the son of a taxicab driver whose seminal and controversial Highland Rape collection of 1995 ignited his career, ultimately landing him, at age 27, as couturier at Givenchy, a role he kept for five years.

Armando Branchini, deputy chairman of Milan consultancy InterCorporate, characterized the bridal credit as an “assist” to the brand that would have a “very positive” influence on the business: “It won’t increase its sales tenfold — and it would be a mistake to change its niche quality — but it will increase its allure and appeal.”

The McQueen business has weathered some rocky years, and in 2004, then Gucci Group ceo Robert Polet set a 2007 break-even deadline, which the company met ahead of time. The founder’s suicide also raised questions, given his renowned cutting skill, imagination and flare for showmanship.

“If there was any doubt about the future of the brand following Alexander McQueen’s death, then that has been completely banished,” said George Wallace, ceo of consultancy MHE Retail. Asked whether this was the moment to expand with brand extensions, he said: “The brand can now reach a wider audience, with fragrance and accessories lines. But they would need to be managed carefully.”

Retailers said they expect an immediate bump to the business. And Saks Fifth Avenue could be first in line. Fortuitously, the company had already lined up Burton for a trunk show appearance Tuesday at its Fifth Avenue flagship. The private meet-and-greet will be her first official in-store appearance since McQueen’s death. Per agreement with the house, Saks executives declined to comment Friday about the event and the retailer’s plans for the business.

“This is a dream come true for a brand,” said Jeffrey Kalinsky, executive vice president of Nordstrom. “I do think the business will go through the roof.”

Prior to the wedding, Nordstrom had already been exploring ways to build on the McQueen business, which has been “really strong” for ready-to-wear, as well as shoes and accessories, he said. “If you take a brand that is already successful and it gets that level of worldwide exposure, it will have a tremendous impact on the business,” Kalinsky said.

“The wedding will have a big impact on the McQueen business,” said Stephanie Solomon, vice president of fashion direction at Bloomingdale’s.

On Friday, Barbara Atkin, vice president, fashion direction at Canada’s Holt Renfrew, said the store was already receiving calls enquiring about Sarah Burton’s collection for McQueen. “I do not believe that customers outside the fashion world were even aware of Sarah Burton prior to this wedding,” Atkin said. She said McQueen has been performing “extremely well since Sarah has taken over the brand. We are repeating styles and seeing double-digit results exceeding our plans with this collection. We are opening more doors in our chain. We actually wrote the gown that [Middleton’s sister] Pippa was wearing and we expect to get lots of enquiries on that stunning ‘Pippa’ gown.”

Sarah Rutson, fashion director at Hong Kong-based Lane Crawford, said her McQueen business was on an upswing before the wedding. “However, for our market, I don’t believe [the wedding] will have significant impact just because of the dress. The significant impact and success has always been its strong design regardless.”

Averyl Oates, chief buying director at Harvey Nichols, said the wedding pumped up British pride. “This will have a spectacularly immediate impact on both the industry, and sales for the brand,” Oates said. “Alexander McQueen has long proved itself a popular brand with our customers, but hopefully this will now extend its visibility across the world, and what better platform than to be adorning the future Queen of England.”

“The brand is in much demand today and its desirability continues to grow,” said Marigay McKee, fashion and beauty director at Harrods. “There is always a demand for exquisite couture and I’m sure the house has a great future. There is a new McQueen flagship going in store for spring 2012, which we are all tremendously excited about.”

Caroline Burstein, creative director of Browns and director of Browns Bride in London, said Burton is now fully out of the shadows.

“I have always known that Sarah was the backbone of the McQueen brand. He brought what he brought to the brand, but it was Sarah who underpinned it. She has an amazing attention to detail, and always kept a balance at the brand — she wouldn’t let it go too far,” she said.

Burstein said when she launched Browns Bride in 2004, she brought in rtw pieces from McQueen. “There was always a sense of occasion about them. They were just beautiful,” she said.

Burstein added that the royal wedding dress would give a bump to an already healthy brand. “The McQueen label stayed strong. His death did not affect sales at the label because the clothes are good. They are what women with style like to wear — and not just skinny women. They work on real women.”

FINANCIAL TIMES: Dress a triumph for McQueen and country

FINANCIAL TIMES | VANESSA FRIEDMAN

“It’s the greatest ka-ching moment of all time.” So said CNN TV commentator Piers Morgan, as he and an estimated 2bn global viewers of the royal wedding – not to mention dress designers around the world – waited to discover who had made Catherine Middleton’s gown.

The answer: Sarah Burton for Alexander McQueen.

According to a statement issued by Clarence House, “Miss Middleton chose British brand Alexander McQueen for the beauty of its craftsmanship and its respect for traditional workmanship and the technical construction of clothing. Miss Middleton wished for her dress to combine tradition and modernity with the artistic vision that characterises Alexander McQueen’s work.”

A classic gown with powerful echoes of the famous dress Grace Kelly wore to marry Prince Rainier, the design consists of a lace overlay on a satin bodice and a skirt with a 2.7-metre train.

Other than French Chantilly lace combined with English Cluny lace, it was composed entirely of fabrics sourced in the United Kingdom, and embroidered by the Royal School of Needlework.

The choice was immediately applauded by the British fashion community. Designer Bora Aksu said, “The dress was absolutely right as Catherine looks straight out of fairytale. The style is timeless and will look just as stunning in many, many years to come. A great honour to British fashion.”

Designer Graeme Black said: “She is the Grace Kelly of our age. Britain loves the dress.”

Catherine Middleton’s decision will have immediate repercussions for Alexander McQueen, one of the smaller brands in the luxury group of conglomerate PPR.

Though famous within the fashion community for its dramatic runway shows, and the subject of worldwide coverage last year when its eponymous founder committed suicide, McQueen is only just reaching the size at which it can advertise. Its first, small campaign was planned for this autumn/winter.

Antoine Belge, luxury analyst at HSBC, said: “For such a brand, [the royal wedding] is a tremendous opportunity to attract intense media coverage it could never have financially afforded otherwise.”

The selection of McQueen also places a national halo around the brand, which shows in Paris and is owned by a French group, confirming it as one of the pre-eminent British fashion names on the global stage, and suggesting Ms Middleton may use her position to further the interests of the British fashion industry.

Finally, the dress also marks a very public coming out for creative director Sarah Burton, an unknown until she assumed the design helm of the company last May after Mr McQueen’s death.

Ms Burton said: “It has been the experience of a lifetime to work with Catherine Middleton to create her wedding dress . . . I am so proud of what we and the Alexander McQueen team have created.”

Though Ms Burton has remained largely in the background since her appointment, quietly evolving the label’s aesthetic from the aggressive genius of Mr McQueen in a more feminine, gentle direction, Ms Middleton’s gown should further enhance perceptions of the label’s growing accessibility.

The house’s range was further demonstrated by the dress Ms Burton designed for Philippa Middleton, maid of honour, a notably streamlined cap-sleeved long sheath in heavy crepe, with a draped cowl neck.

Robert Burke, chief executive of brand consultancy Robert Burke Associates, said: “The designer will have a world wide audience that only happens every new decades.

“A smart brand can double, triple or more their business in a short time.”

WSJ: A Hard-Working Suit

WALL STREET JOURNAL | SARAH NASSAUER

It can cost a man a lot less to feel like a million bucks in his suit these days.

There are more suits priced between $500 and $700 that include features once found typically on more expensive suits: fine Italian fabrics, modern cuts and narrow lapels. The goal is to attract younger men who increasingly want the current fitted, formal styles as opposed to the boxy suits and more casual officewear of their dads.

Big suit makers like Brooks Brothers and HMX, which sell suits between about $600 and $3,000, say their lowest-priced suits are experiencing the fastest sales growth. And next month Amsterdam-based Suitsupply, with 35 stores in Europe, plans to open its first U.S. store in New York with suits starting at $385. Suitsupply will offer its sometimes flashy suits with details like Italian wool fabric, brightly colored lining and working button holes, features that usually carry a higher price tag.

Other efforts to keep up quality at lower prices include J. Crew Group Inc.'s expanded men's suit selection. Sales of its men's suit have more than doubled since 2008, when the clothing company introduced a slimmer style, made with Italian wool and superior interior construction, a spokeswoman says. The style, called Ludlow, starts at about $600.

At HMX, which owns American suit brands like Hickey Freeman and Hart Schaffner Marx, the fastest growth is in its lower priced suits, around $795, says Joseph Abboud, president and chief creative officer for HMX. Sales of Hart Schaffner Marx suits, the company's brand in that price range, are up 27% year to date compared to last year, says Mr. Abboud.

The briskest sales growth at Brooks Brothers is happening in its recently expanded Suiting Essentials line, priced starting at $598, says Guy Voglino, divisional merchandise manager for men's clothing at the company. Sales of the line are up 28% in 2011 to date, compared to the same period last year, Mr. Voglino says.

Introduced in 2007 offering one fit, the line has expanded to four different fits, most recently the brand's narrowest cuts, the Fitzgerald and the Milano. Brooks Brothers offers some made-to-measure options including about 20 fabrics. The ability to individualize appeals to younger men who want to stand out even in a room of suits, says Mr. Voglino. Because each suit is specially ordered, the company saves money by producing only what it actually sells and doesn't risk bloated inventory.

The interest in suits at this price range comes amid an overall pick up in suit sales at some manufacturers. Brooks Brothers says sales of its 1818 Collection, priced about $1,000, are up 26% year-over-year. HMX is seeing double digit growth in volume and dollar sales across brands and price points, says Mr. Abboud.

"We are seeing the suit business really come back in the last six months very very strongly," says Robert Burke, a luxury-goods consultant and founder of Robert Burke Associates in New York.

Many men wait for seasonal sales in order to find a good price on a suit, but suit makers hope the new $500 to $700 range will encourage men to buy retail instead of waiting for price cuts.

Suitsupply is able to keep down prices, in part, by picking store locations slightly off main shopping streets with lower rents, says Fokke de Jong, chief executive and founder of the company. The company's new Soho New York location will be on a second floor with no street level window display. About 15% of Suitsupply suits are sold through the website.

J. Crew, like Suitsupply, controls more aspects of production from design to distribution, cutting out payments to third-party companies that typical move suits into department stores.

Men's Wearhouse which sells suits from about $199 to $700, keeps prices low by offering two-for-the-price-of-one deals, increasing sales volume and therefore buying power with its suppliers, says Doug Ewert, president and chief operating officer of the Houston, Texas-based company.

Maintaining the current price-to-quality relationship in men's suits is likely to become increasingly difficult. Raw material prices for desirable natural fabrics like wool and cotton are rising sharply. "If I have to guess, price is going to go up 10% to 15% on the wholesale side" heading into spring 2012, says Ronny Wurtzburger, president of Peerless Clothing which manufactures men's suits for brands like DKNY, Calvin Klein and IZOD.

We enlisted two experts for an unscientific, blind review of six suits: Salvatore Giardina, a men's suit designer and professor at the Fashion Institute of Technology, and Salvatore Cesarani, a designer and professor at Parsons The New School for Design.

The testers found striking differences in quality, sometimes out of line with the suit's price. Both testers said the $614 Suitsupply suit matched the $3,625 Armani in quality. Both saw little difference in quality between the two, or at least not enough to justify a $3,000 difference in price. Each is made with soft Italian fabric and showed the maker cared about details like pockets with extra stitching at their edges.

"It's a work of art," said Mr. Giardina when examining the sewing job in the waist band of the Armani suit pant. But after learning of the large price difference, "that means that won," Mr. Giardina said, pointing to the Suitsupply suit.

The J. Crew suit fared well with the testers noting its neat construction and that it is made of high-end Italian fabric and Bemberg lining (a type of rayon favored for its breathablity and moisture absorption).

The testers said the Hart Schaffner Marx suit didn't live up to its $895 price. Mr. Giardina noted some fraying strings on button holes and said its "AMF stitching" didn't achieve a handmade look. (AMF stitching is a wider stitch that's an aesthetic touch.) Mr. Cesarani said the jacket didn't move freely in the chest.

The test method "is an imperfect science and it's an opinion," says Mr. Abboud, noting that the suit tested is made from "super 110s wool made in Italy. "We take great pains," he adds, to make sure fabric and construction is high quality.

Mr. Giardina said the H&M suit used a lower thread count wool fabric and basic construction, but still pulled off a nice overall look. Mr. Cesarani dismissed it as "cheap looking." He docked points for the lack of extra fabric for future tailoring where the lining inside the cuff of the jacket meets the exterior fabric.

"We know that our suits are appreciated by many of our customers," said an H&M spokeswoman.

The Target suit isn't worth more than $89, both testers agreed, calling the polyester fabric a major negative.

"Target is committed to offering quality merchandise at a great value," says a Target spokeswoman. "For our business-focused guests, this means finding suits for less than $100."

WWD: Can John Galliano Ever Come Back?

WWD | MILES SOCHA

PARIS — Will the taint of bigotry cling forever to John Galliano — an albatross around his neck? Or will the incendiary British designer rehabilitate himself and his name over time, only to rise again like some fashion phoenix?

Retailers, headhunters and other experts seem to be rallying for the latter scenario, arguing that Galliano — ousted from Dior last month amidst mounting allegations of racist and anti-Semitic outbursts — has the potential to write himself a new chapter and rebound from the crisis.

“I hope so. Otherwise, it would be such a waste,” said Carla Sozzani, owner of Milan-based fashion retailer Corso Como 10. “Maybe I’m a dreamer, but I’m hoping he’s going back to his own brand. It would make sense that he works for Galliano.”

That scenario is unlikely: As reported, at a recent board meeting of the John Galliano company, his employment was officially terminated. And while Christian Dior SA, which owns 91 percent of the Galliano house, has received unsolicited expressions of interest in the business from several of its Italian licensing partners as well as a Chinese group and a firm from the Middle East, it is understood a sale of the company is not a priority and no banks have been contracted to do so.

Whether an eventual new owner would seek to reemploy the namesake designer remains an unanswered question.

Despite this hurdle, many industry observers are of the school that people in fashion have short memories — and that Galliano might find this tragic episode quickly behind him.

“Look at Naomi Campbell. She had so many problems. No one remembers,” Sozzani said, recalling how the supermodel, convicted of assault in 2007 and sentenced to community service, transformed the penalty into a quirky fashion opportunity, posing for W magazine as a chic street sweeper serving out her sentence.

“After a while memories fade and, as the British say, ‘Today’s news is tomorrow’s fish-and-chip paper.’ I really believe most people do get a second chance and rebound,” agreed Sarah Rutson, fashion director at Hong Kong-based specialty retailer Lane Crawford, characterizing Galliano’s fashion career as simply on pause. “If John truly gets the help he needs for his issues and shows that he is genuinely doing everything in his power to rehabilitate himself, he will be forgiven and accepted back.”

“I think he’s talented enough to recover from this and to come back,” added Agnès Barret, principal of Paris-based creative search firm Agent Secret. “Kate Moss did it,” she noted, alluding to the supermodel who was initially shunned following a 2005 cocaine scandal — only to come roaring back a year later and appear in a slew of high-profile ad campaigns.

“When people are really talented, they have the right to express themselves. His talent will not disappear,” Barret said. “I would advise him to do it in a different way.”

Bonnie Brooks, president and chief executive officer of Canadian department store The Bay, cautioned that it could take a long time to restore the Galliano name.

“We believe in his genius; however, we do think that in order for his brand to be successful, there would need to be assurance that all of the right conditions would be met to restore the good faith required between a designer brand, a luxury retailer and sophisticated customers,” she said.

Betsey Pearce, a Paris-based legal adviser and consultant with a specialty in fashion, noted that Martha Stewart and Tiger Woods are relevant examples of famous, high-functioning personalities who rebounded from scandal, an investment scheme and marital infidelity, respectively. “Would Tiger Woods be terrible if he weren’t married?” she asked. “Is it relevant to his golf, other than the effect of being vilified?”

Pearce hinted that plenty of designers are guilty of behavior that would be deemed reprehensible if caught on tape. “Are we buying the guy’s morality, or the guy’s incredible talent?” she asked. “He’s a genius in his work.”

With unanimity, observers stressed that Galliano should not be absolved of individual responsibility for his behavior and his horrendous statements cannot be swept under the carpet. Druggy or diva behavior is one thing; invoking Adolph Hitler quite another.

Asked if Galliano would be able to come back if he made amends, Franca Sozzani, editor in chief of Vogue Italia, said: “It’s not a matter of making amends, because what happened will never be excused. You must let time go by and recognize that, on a human level, he’s made a mistake, and that, on a creative level, he remains a huge personality.”

Robert Burke, president and ceo of Robert Burke Associates, noted that the anti-Semitic nature of Galliano’s outbursts is “pretty unprecedented” and distinct from the familiar wild-child antics of pampered stars from fashion or Hollywood.

“America loves a comeback story, but this is a very different offense that’s very sensitive to many people,” Burke said. “Time will tell.”

The designer is to stand trial on a charge of public insult at the High Court here, which is expected on May 12 to set the date for the proceedings. Three people — Géraldine Bloch, Philippe Virgiti and an anonymous woman — allege Galliano hurled racist and anti-Semitic remarks at them in a Paris bar. He could face six months imprisonment and a fine of 22,500 euros, or $31,271 at current exchange, according to the French prosecutor.

Galliano has denied the allegations against him, apologized for his behavior and stated plans to pursue a claim of defamation, insult and menace filed against Bloch and Virgiti. Sources said the designer recently completed an “intensive” one-month treatment at a rehabilitation center in Arizona and is now in extended “after care,” recognizing effective treatment is a long, ongoing process.

Barret suggested the designer must repent further, make amends with the Jewish community, and prove that his ability to dazzle and innovate is intact.

Crisis management experts agree penance is a key first step.

“He needs to spend at least three months quietly rehabilitating in a clinic,” said Gene Grabowski, senior vice president of Washington-based Levick Strategic Communications. “When he emerges, he should announce that he has changed his life and has learned new and healthier habits and that he is ready to contribute to his field and to society again. He then must demonstrate that he is serious about his new direction by contributing a sum of money or his time to a worthy project connected to the fashion industry or to helping a cause connected with Jewish interests. He behaved himself into his situation and now he must behave himself out of it.”

Grabowski cautioned, however, that the process could take a year or two “for the new reputation to build and for memories of the old behavior to fade.”

Robbie Vorhaus, founder of Vorhaus & Co., based in New York and Paris, rattled off a long list of famous people who came back from the brink: Robert Downey Jr., Eminem, Mickey Rourke, Britney Spears, Winona Ryder and Hugh Grant.

Yet he said their transgressions only seem passé and irrelevant now because they went back to work and demonstrated their talent, diverting public attention away from their bad behavior.

“Redemption and resurrection is a powerful story, and if Galliano can show that he retains his talent, instincts, skill set — and that he is sorry for his actions — he can, over time, return to a leadership role. However, it can’t be an act,” Vorhaus said. “If John Galliano is, in fact, in his heart racist or anti-Semitic, or is not willing or able to remain with his addiction recovery program, or he falls back into socially unacceptable behavior, he will have lost significant momentum for a long time to come.”

“I think he’s finished for a good while,” warned Glenn Selig, founder of Florida-based The Publicity Agency. “While he may be well known in fashion, to the vast majority of people this is their introduction to him. Because the public really doesn’t know him as a person, there’s no real reason for the public to open their hearts to him.”

Lingering anger toward Galliano surfaced last week when an onlooker called the disgraced couturier a racist as he whisked through the Los Angeles Airport and ignored questions lobbed at him.

Caught on camera, the video went viral — just like the one a month ago that depicted Galliano saying in a slurred voice, “I love Hitler,” and cost him his job.

Yet addiction experts agree rehabilitation is possible for the 50-year-old iconoclast.

“It may take more than one attempt but it is always possible,” said Lou Lebentz, an addiction therapist at The Priory Hospital in Roehampton, London.

Asked whether a return to the fashion industry could be a hindrance or a help to Galliano’s recovery, Lebentz replied: “[One has to ask] how important your work identity is to you. Do you need it in terms of boundaries and purpose or to take your mind off yourself?” she said, highlighting that the purpose and routine a patient may find in work could have a positive influence on their recovery. “Recovery is an inward journey, about shutting off the external world…you will not find the answers outside yourself.”

Deirdre Boyd, ceo of the U.K. charity Addiction Recovery Foundation, said that a lot of male addicts in recovery tend to go back to work. “Often they do very well because they are grateful to their employers, they may feel they owe their lives to their employers,” she said. As for Galliano, she said: “Maybe he will look more objectively on his life and reevaluate his priorities, and maybe the fashion industry is not the right place for him to go back to.” She added that the greatest predictor of successful recovery is support from family and then support from your place of work.

For the moment, Galliano has no job to which to return.

It is understood the in-house design team at Galliano, which shares members with Dior’s, will be charged with continuing to produce collections at a label prized for bias-cut dresses, newspaper prints and retro-tinged tailoring.

The Galliano business is based mainly on licensing. Key partners include Gibò Co. SpA for the signature men’s and women’s collections; Ittierre SpA for the second line Galliano: Perfume Holding for fragrances; Diesel for children’s wear; Marcolin SpA for eyewear; Albisetti for swimwear, and Morellato for watches.

Although sources deem an eventual sale of the company a foregone conclusion, as Dior seeks to put more distance between itself and the disgraced designer, Dior may first seek to further disentangle itself from the designer, who holds a minority stake in John Galliano SA.

It is understood there are other legal tussles ongoing related to Dior’s dismissal of Galliano, though nothing that would prevent it from naming a new couturier (see related story, page 5).

Revenues in 2009 at John Galliano SA, mostly from royalties, totaled 14.2 million euros, or $20.9 million, while losses tallied 5.3 million euros, or $7.8 million, according to legal information filed with the commercial court in Paris. Dollar figures are converted from average exchange rates for the period. According to Dior’s 2010 annual report, Christian Dior acquired John Galliano SA in 2008 for 17 million euros, or $23.8 million at average exchange rates for that year.

In an indication that it won’t be easy for the designer to return to fashion, retailers are already shunning Galliano products.

One American retailer, speaking on condition of anonymity, warned that the Galliano name now has toxic connotations. “I think his label will continue to create controversy for some time,” the executive said.

A spokeswoman for Selfridges, which has featured the Galliano second line in its men’s department, said the London retailer no longer carries the brand, but she declined to comment further. However, an industry source said the decision had to do with customer reaction to the Galliano drama.

Corso Como’s Sozzani said she has dresses from Galliano’s spring-summer designer collection hanging in her shop, but she did not place an order for fall, partly because of Galliano’s absence. “I’m waiting to see what happens,” she said, citing a policy that prohibits designer brands created by another person, if the founder is still alive.

According to market sources, retailers in America and the U.K. reacted immediately and sharply to the scandal and often pulled products off shelves, while the business in other regions, including Asia, Europe and the Middle East, remains largely unaffected.

“We hope Galliano will continue to perform. Despite what happened, we are happy with the license,” said Enrico Ceccato, president and ceo of Perfume Holding, the brand’s fragrance licensee. However, he denied interest in acquiring the Galliano business, insisting the company is dedicated to fragrances only.

According to Ceccato, the rollout of Galliano’s new Galliano women’s fragrance, Parlez-Moi d’Amour, is happening at almost the same pace as originally scheduled. The scent is set to launch in Asia and South America after hitting Europe and the Middle East at the end of last year. “The only question mark is how and when to launch in the U.S.,” said Ceccato referring to Perfume Holding’s initial plans to launch the scent there in early spring.

Antonio Bianchi, owner of Albisetti, which now controls Ittierre, acknowledged interest in the Galliano business, saying he is discussing ways to generate new and more extensive agreements “given the optimal relationship” it already has.

Whatever Galliano’s fate, his downfall highlighted the risk companies can face if their brand is too closely tied to the specific image or talent of one individual, who could leave the company, die or fall from grace, according to the legal adviser Pearce.

No matter how many people may be involved in bringing fashions to market, “we want rock stars: We want individuals that stand out,” she said.

A boilerplate statement in Dior’s annual report notes: “Inadequate products or communication policies with the brand image, inappropriate behavior of persons who represent the brands, along with circulation of prejudicial information to the media, could affect brand image and lead to an adverse effect on sales.”

Lucian James, creative director and founder of Paris-based strategic consultancy Agenda Inc., highlighted the irony that luxury brands, until recently nervous of social media, were seduced by the exposure opportunities the digital world afforded. “So it’s genuinely unfortunate that it is the John Galliano video outside La Perle which has become the most viral in fashion history,” he said.

Moreover, the Galliano incident highlights important changes that will affect the broader luxury industry. According to James, “We are witnessing the beginning of an important debate about the relationship between creativity and business imperatives.”

For one, “the acceleration of fashion has created more of a ‘hit-factory’ approach to creativity, which can squeeze and frustrate designers, and also put pressure on the overall business.

“It’s no surprise that the movie ‘Black Swan’ was so successful in this cultural mood because it exposes the ferocity and destructive power of creative talent. And more specifically it’s no surprise that the movie was such a personal favorite of so many people who work in the fashion world, and could identify so closely with its theme,” he continued.

James also predicted luxury brands will emphasize their original designers and “spiritual leadership so that issues like this are less damaging.”

For example, he said it would be a “powerful ritual symbol to concretely restore the image of Monsieur Dior at this point, via, for example, an empty chair at each runway show.”

WWD: Men's Wear CEO Summit: Retail Opportunities

WWD

The men’s wear shopper is back, but the recession has changed him. Instead of buying the same old, same old, he’s seeking newness in fit and label, but he’s still holding back a bit and not purchasing at the same levels he did before the financial crisis.

That was the message from a roundtable on Retail Opportunities, which was moderated by Robert Burke, president and chief executive officer of Robert Burke Associates.

“The men’s business is coming back, but the customer has changed,” said Russ Patrick, senior vice president and general merchandise manager of men’s for Neiman Marcus Group. “He’s more thoughtful about his buying habits. He’s asking a lot more questions and is more educated and thoughtful about buying.” He said the customer is “demanding newness. The worst thing for him to see is what was there before.”

At Saks Fifth Avenue, it’s the younger, more contemporary customer who has been the first to return, according to Tom Ott, svp and gmm of men’s. In fact, he said, while sales of traditional men’s product fell off most during the recession, “the contemporary and designer businesses were less worse.”

Bob Mitchell, co-president of the Mitchells Family of Stores, said although the customer is coming in less often, his business has “seen 15 to 16 months of nice growth.” And when he does come in, he’s returned to the high-end luxury product that he purchased before the downturn. “They would rather buy more of the best [merchandise], even if they buy less of it.”

Kevin Harter, vice president of fashion direction for men’s at Bloomingdale’s, agreed that the men’s customer has returned, but noted that there has been a marked change in his spending habits. “Now, 84 percent of men make their own decisions,” he said, meaning that retailers can “market to guys. It makes us better retailers and better at our game.”

Mitchell said one of the things drawing men into stores is the new silhouette. Acknowledging that men “don’t like change,” and often return time and again to the same brands, he said stores should tout the “new fit from their old friends to make them comfortable.” At the same time, he believes men are “open to new brands,” and will mix in a few new vendors if they’re presented properly.

Harter agreed, saying Bloomingdale’s tends to “nurture the brands we already carry,” but “balance” those with new labels.

Ott believes there is an opportunity for new brands to flourish and expects there will soon be a “changing of the guard” as some of the more-established brands lose ground to what Harter described as a “young pool of designers.”

He added that any brand trying to break into the men’s arena needs to “offer a distinct point of view and message.” He also encouraged brands to come to the stores and meet the shoppers so they’re well-versed in what today’s customer is seeking.

Mitchell urged vendors to work with the sales associates in the stores to get them behind the brand. “That’s the cheapest, most effective way to market your brand,” he said. “You can connect with the customer through the sales associates, who are your champions on the selling floor. That’s how you can get your first lift.”

The same can be said of private label offerings, a big initiative for many large stores today.

Calling it a “major underpinning of our strategy,” Ott said it is essential for retailers to offer shoppers a differentiated point of view. The Saks Fifth Avenue Men’s Collection, which launched in 2009, is the largest brand in the men’s store, and was launched to fill “white space” that the company saw for men’s wear with an international classic sense of styling. “We really went after it during the recession.”

At Neiman’s, Patrick said the store uses private label “when we fall in love with specific product,” but stressed the company’s mission remains “building big businesses with the best designers.”

Online selling was also a topic of discussion. Patrick said the Neiman’s shopper often researches products online before shopping in the stores and is a “huge driver” of the men’s volume. Harter said the Internet provides an “editorial voice” for the company’s offerings, but many still want to “feel, touch and taste” the product in the store. He said the goal is to create a “synergy” between the two channels.

The panel was in agreement that sales of men’s wear will continue to strengthen in the future.

“The future looks bright for men’s wear,” said Patrick, who said he expects steady growth as men dress up again and shop to complete a more “polished” and “finished look.”

For Bloomingdale’s, attracting a younger customer will be key to future success, Harter said. “The contemporary tailored clothing business is one of our fastest growing,” he said, adding that it is essential that retailers learn how to “engage” this younger guy. The secret? “Technology, technology, technology,” he said, noting stores should install Wi-Fi and “wire” their sales associates to attract these shoppers.

A question from the floor about the future of premium denim evoked a range of responses. Mitchell said denim continues to grow steadily. “We sold a lot during the recession and it will continue to be an important part of the mix.”

Harter said Bloomingdale’s is selling the same number of units, but the prices are lower than they were a few years ago. Patrick said he has reduced the number of units he bought, but the quality has remained the same.

One big growth area for all the stores, however, is accessories. Noting that products such as pocket squares or tie bars “finish off the look,” Mitchell said today’s man is more educated about his appearance and ready to buy just the right piece to complete his wardrobe.

WSJ: Dress Me, Kate! Modern Modesty à la Middleton

WALL STREET JOURNAL | RACHEL DODES

To draw inspiration for their fall collections unveiled this week, American fashion designers closed their eyes and thought of England.

In particular, many of them seemed to be thinking of Kate Middleton, the fiancée of Prince William. At the end of last year, just as designers were generating their ideas, Prince William proposed to his longtime girlfriend, generating a barrage of news on her sartorial decisions. Now, her brand of modern modesty—ladylike clothes that are also sexy and streamlined—is showing up as a fall theme at New York Fashion Week.

Other British-inspired styles on the runways included broad-brimmed hats at Tommy Hilfiger, the tiny headpieces known as fascinators at Marc Jacobs, and a surfeit of demure, pleated, calf-grazing skirts practically everywhere. "I think there's a little bit of royal envy going on here," said Robert Burke, president of Robert Burke Associates, a New York-based luxury-goods consulting firm.

On Tuesday, Vera Wang's show paid tribute to Victorian women with long, chiffon, knife-pleated skirts and high, gathered necklines, some accessorized with detachable fox-fur hoods and leather gloves. Models emerged from iron gates that resembled those of Buckingham Palace and walked to the soundtrack of "Atonement," a book-turned-film set in England between the wars.

The collection was meant to evoke "the grace, romance and effortless style of iconic American women who fascinated the English aristocracy of the 1930s," such as Wallis Simpson and Emerald Cunard, Ms. Wang said in the show's notes.

The focus on less revealing looks comes as designers are noticing an uptick in business, particularly at the high end. Women are showing a willingness to splurge on items with longevity. From a commercial perspective, Ms. Middleton's aesthetic is desirable, "because what she wears is...stylish, slightly conservative and classic," Mr. Burke said.

Designer Rachel Roy, known for her polished styles, unveiled a global-chic collection on Tuesday morning that took viewers to London by way of Guatemala. Ms. Roy showed her talents at mixing prints and lamé and added a chic capsule collection of eight trench coats and trench-coat-inspired looks that the designer said are "part menswear, but the wrapping is so feminine, so flattering, so pulled together."

Neiman Marcus's fashion director, Ken Downing, called the collection "ladylike chic with a bit of wanderlust."

Ms. Roy, who designed the gray frock worn by Michelle Obama to the State of the Union Address last month, said that she finds Ms. Middleton's style to be a breath of fresh air. "I think the effortless ease, the quiet, confident glamour she is bringing is so modern," she said. The blue dress that Ms. Middleton wore when she and the prince announced their engagement "was very age-appropriate but showed there was a fresh energy there," said Ms. Roy, whose fall collection contained a ladylike silk dress in a shade the designer called "blueberry."

Another designer who seemed to be channeling Ms. Middleton as a muse was Peter Som, who closed his show with a sexy-yet-modest royal blue sequin dress that would look smashing on the future royal.

Marc Jacobs's collection, shown on Monday evening at the Lexington Avenue Armory, was another homage to ladylike clothes. There was a mod series of polka-dot dresses and tops—some with prints, others with dot-shaped scales that resembled hanging chads. A series of Victorian-esque dresses featured high collars and ruffles at the neck. There wasn't a look in the collection that couldn't be worn to high tea at Claridge's in Mayfair—even if it was tea with Twiggy in 1967.

Kate and Laura Mulleavy, the sisters behind the popular Rodarte label, evoked a windswept prairie for their fall 2011 collection on Tuesday, which featured music by Pink Floyd. Long, sweeping dresses with high collars and calf-length coats created a scene in which an interwar intellectual like Virginia Woolf would have felt right at home.

And there are few who stand to benefit from Kate-mania more than Victoria Beckham, the British pop star-turned-designer who showed a collection of calf-skimming pleated dresses on Sunday in bright hues like saffron. After her show, Ms. Beckham said that Ms. Middleton has asked to see some samples.

"Kate Middleton is having a lot of influence on this whole Town and Country vibe, especially with all the pleated skirts with a kilt look," said Neiman's Mr. Downing. "I am calling it a 'Kilty Pleasure.' "

—Christina Binkley contributed to this article.

WSJ: Coats, Cowls Warm Up the Runways

WALL STREET JOURNAL | ELIZABETH HOLMES

Having weathered a particularly harsh winter along with the masses, New York Fashion Week designers have made outerwear a dominant trend on the runway.

Carolina Herrera, the luxury designer known for her red-carpet gowns, began her show Monday with a dark gray wool coat accented by a deep purple velvet belt.

Mary-Kate and Ashley Olsen, the twins behind The Row, said the recent snowstorms inspired them to include a puffy silver jacket and puffer ski pants in their collection.

Designers are hoping that customers this year will be more willing to shell out for expensive items like outerwear, which can come with higher margins, as people grow tired of what's already in their closet. Luxury customers severely cut back their spending in 2008 when economic turmoil took hold. They delayed big-ticket or seemingly flashy purchases in 2009 as well, when conspicuous consumption became taboo.

"I have to buy a new coat this year," said Ron Frasch, Saks Inc.'s SKS +0.47%president and chief merchandising officer after Ms. Herrera's show on Monday morning. "You have to, because they're so great."

To ease the potential pain of a big-ticket purchase like a coat, the designers made the pieces versatile. Many garments on the runway could be worn as a part of a suit or as a standalone jacket.

"The designers are using outerwear as a layering piece," Mr. Frasch said. "They maybe look like a jacket to a suit, but they're also sufficient to wear in the early fall and this time of year."

A red wool sleeveless coat at Derek Lam could be worn either on its own or over a long-sleeved top, as could a striking raspberry motorcycle jacket from Tracy Reese.

Ms. Reese added fur stoles to her eveningwear and sent several long statement coats down the runway, garments she called "storm coats."

"We've had such a brutal winter. We need protection, but it has to be beautiful protection," Ms. Reese said backstage before her show. "Silhouettes that are kind of enveloping, I love the idea of that."

Elise Overland had an obvious emphasis on the elements, holding her presentation on an ice rink Saturday evening. Jason Wu began his show with a flannel coat, while Rebecca Minkoff opened with a shearling jacket.

The outerwear pieces came in a range of colors, from muted neutrals to vibrant brights. Many of the pieces offered face-framing features, such as an exaggerated cowl neck or a scarf.

Capes offered a new take on transitional dressing. Ms. Herrera showed a gray caplet with a matching trouser. A hooded wool olive cape at Max Azria looked as if it was a hybrid shawl.

Donna Karan included two capes in her DKNY show Sunday afternoon, which at first glance looked like a blazer hanging over the models' shoulders.

"The average winter coat is no longer acceptable," said Robert Burke, founder of the luxury retail consultancy Robert Burke Associates. "Now you have to have the fashion winter coat."

The Olsen twins hit on another prevalent trend of the season: fur. Using the animated film "Fantastic Mr. Fox" as a jumping off point, The Row fall collection featured luxurious fox fur coats and statement-making fur hats. A blue fox coat was paired with leather and then sewn to suggest a traditional puffer jacket.

"The fabric is so stunning to touch and to wear, and to look at," Mary-Kate Olsen said.

—Elva Ramirez contributed to this article.

WWD: Mark Lee Seen as Man to Bring New Era to Barneys

WWD | LISA LOCKWOOD

One of the most-watched acts in fashion is beginning to play out: Mark Lee's reinvention of Barneys New York.

The highly regarded Lee has been Barneys New York's chief executive officer for only four months yet already has made sweeping changes in the retailer's senior fashion ranks and overhauled its creative leadership. On Friday, the retailer tapped a new vice president and fashion director, Amanda Brooks, former creative director of Tuleh and a Vogue contributor. And more changes are said to be on the horizon.

The dawn of the new Lee Era at Barneys is under way — an iconic retailer that over-expanded, lost its way and is bleeding red ink — now headed by a young, seasoned, methodical executive whose track record includes successful stints as ceo of Gucci and Yves Saint Laurent, as well as senior positions at Giorgio Armani and Jil Sander. Sources believe every aspect of the company's operations are being closely examined, with the goal of returning the company — whose losses reportedly approached $60 million last year — to profitability for an eventual sale. Its volume reportedly hovers between $675 million and $700 million.

Industry observers believe Lee's main priorities should be:

• Close unproductive units such as those in Dallas and Las Vegas.

• Place more emphasis on "commercial" merchandise and better execution overall.

• Put a greater investment in the store's e-commerce strategy and social-networking initiatives.

• Create a new image campaign touting Barneys' distinctiveness and sophistication.

• Bring more in-store excitement and create more compelling visual displays.

• Freshen the merchandise mix and add more femininity and color, as well as a much-needed paint job at the Madison Avenue flagship.

A major signal the retailer is headed in a new direction occurred when Lee tapped Dennis Freedman as the store's creative director. Most recently creative director of W magazine, Freedman is known for pushing aesthetic boundaries and for his close ties to prominent photographers. He succeeds Simon Doonan, who was named creative ambassador at large. For the past 25 years, Doonan, the quip-a-minute, flamboyant Brit, has been the public face of the store as well as the man behind Barneys' showstopping windows, serving up a blend of kitsch and pop culture that have ranged from Prince Charles and the Duchess of Cornwall to Madonna and Tammy Faye Bakker. Doonan is believed to be on board with the change.

The tectonic shift in Doonan's role occurred two months after Lee replaced the store's top women's merchant, Judy Collinson, and installed his former Gucci colleague Daniella Vitale as chief merchant and executive vice president overseeing all of women's and barneys.com. Julie Gilhart, the store's longtime fashion director who nurtured many up-and-coming designers, also exited and was succeeded by Brooks, who most recently was director of fashion at William Morris Endeavor Entertainment and is also the author of a book, "I Love Your Style: How to Define and Refine Your Personal Style."

"He [Lee] is the first person who's taken over that store who isn't afraid to lose everybody," said one industry source.

Vitale's arrival has stirred some angst in the fashion world, as designers worry Barneys will cut back on its support of young talent in favor of more established, commercial collections. But numerous vendors, analysts and industry observers believe Barneys needs to do just that in order to broaden its appeal — especially in markets outside New York and Los Angeles. As one source joked, "They're too New York- and L.A.-centric, even for New York and L.A."

Shifting its fashion focus may prove a tricky proposition, though, since the store built its reputation on its designer discoveries and quirky, edgy and artisanal merchandise. Going more mainstream would put it in head-to-head competition with Saks Fifth Avenue, Bergdorf Goodman and Neiman Marcus.

"Mark [Lee] will keep the DNA of Barneys and will change the methodology of how the store is run. It's a different era and a different time. You can't run it the same way as 2006 or 2007, or even the Nineties. He's bringing in some people with a lot of experience," said one vendor, who requested anonymity. Another vendor noted, "He's the first one who comes with a back pocket of all the right people. This is the one man who can compile an A-list team."

Barneys needs one. It's been a bumpy ride for Istithmar World, the investment arm of the state-controlled holding company Dubai World investment fund, which bought Barneys in 2007 from Jones Apparel Group Inc. for $942 million, and has since pumped millions into the stores. The retailer today is worth significantly less since the recession and the consumer slowdown in luxury spending. Last year's losses were attributed to sluggish sales and interest payments stemming largely from debt, which includes about $500 million long term. Even without a ceo, Barneys opened flagships in Chicago and Scottsdale, Ariz., and rolled out more Co-ops, which specialize in contemporary merchandise, moves that were plotted by former ceo Howard Socol.

The fact that Barneys has been able to survive despite the recession and a lack of leadership at the top clearly indicates the inherent strength of the retailer. "Barneys, on the whole, has had a pretty major impact on the industry," said Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates. "Its top-of-mind awareness is much bigger than its volume."

Bonnie Pressman — a 15-year Barneys veteran and former wife of Gene Pressman, grandson of company founder Barney Pressman — now has her own consulting firm, BLP Consulting Inc., and believes Lee has the wherewithal to restore Barneys' leadership position.

"With any new management, there's always going to be a shake-up," said Pressman, who earlier in her career was executive vice president, general merchandise manager, women's ready-to-wear and accessories at Barneys. "Mark took the position to better Barneys' future. He didn't need to do this job. It's a great opportunity to turn it around. Yes, it needs improvement. It needs some fresh blood. I've known Mark for a long time [from his days at Armani]. He really knew the DNA of the store and what the Pressman family was doing when the store was growing. Out of anyone out there, he's the right guy."

Pressman believes one of Lee's major strengths is the fact that he's worked with the top retailers around the world while at Armani, YSL and Gucci.

"Imagine what he knows. What he brings to the table could be the best of the best. He's seen it all being on that side of the business. He understands the merchants and understands designers. That's what you need," said Pressman. "In the past, there have been a lot of ‘suits' running the place."

Some may criticize Lee and Vitale for being "one-dimensional," since they only know the wholesale side of the business, but Pressman dismisses that concern. "Daniella worked with us. She knew the standards the Pressman family wanted," said Pressman.

Socol, who departed in 2008, came from an entirely different background, said Pressman, and was more operations driven. During his seven-year tenure under both Jones and Istithmar ownership, Socol oversaw an aggressive expansion of the chain to 38 U.S. stores, including seven flagships. Management was determined to open stores, grow volume and get a return on its investment. Among the stores that opened during his tenure were flagships in Dallas, Las Vegas and Boston.

Socol led the regional Burdines department store chain until 1997 and joined Barneys in 2001 at the recommendation of Allen I. Questrom, whom he succeeded as ceo and who led Barneys out of bankruptcy. During his tenure, Socol disagreed sharply with Istithmar over strategies, and particularly opposed overseas expansion. According to sources, one of the reasons Socol resigned was because he was reluctant to report to David Jackson, ceo of Istithmar.

"It wasn't about creativity. He did a good job at the back end, operationwise. [But] opening the other flagship stores around the country was not a wise thing," said Pressman, pointing out that the expansion mirrored what the chain did in the Nineties, which eventually drove it into bankruptcy. "Do we have to repeat the errors multiple times?"

It is widely believed Barneys New York is bolstered mainly by its three flagships in New York, Beverly Hills and Chicago, and dragged down by newer stores opened in Dallas, Las Vegas, San Francisco, Boston and Scottsdale.

Consultant Robert Burke of Robert Burke Associates believes Barneys needs to retain its existing customer base while attracting new ones. "It needs a broader reach," he said. He believes the store can still champion the underdogs and support emerging brands "but you can't build a business on that."

"You need to look at the brand assortments and the allocation of space," said Burke. "It needs some dusting off. As with any mature business, it got set in its ways. The business has changed dramatically. The customer today is more discerning and more willing to mix and match price points than ever before."

Burke believes Vitale, who was most recently Gucci's president of the Americas after positions with Giorgio Armani and Salvatore Ferragamo, will be a strong asset to the business. "She's a very smart merchant. She understands product and certainly understands the business." Burke, as others, stressed that one of Vitale's attributes is that she's interacted with every top retailer throughout her career. "She has seen the good, the bad and the ugly. She knows the best practices. She'll approach it in a very unique way."

Most observers believe that Barneys can still be the go-to store for emerging designers and should maintain its sense of discovery and experimentation. It also needs to work harder to distinguish itself from Bergdorf, which it has been looking more and more like.

"Yes, it can still be the champion of the underdogs," said Kim Vernon, a marketing consultant. "Between Saks and Bergdorf Goodman, all have been jockeying for underdogs more than ever. Barneys will continue to be supportive of emerging brands."

She said the retailer can change the merchandise mix and still find ways to remain special. "They've got a big merchandising team that's been there. I think they can maintain being Barneys but can move it toward what more customers want," said Vernon. "My clients tell me he [Mark Lee] is intent on keeping the uniqueness and specialness of Barneys intact."

Barneys' flagships have always had a distinctive look. Never overflowing with merchandise, the stores have always maintained a spare, art-gallery look. [See box below.] The current merchandise mix ranges from The Row, Derek Lam and 3.1 Phillip Lim to Jil Sander, Lanvin, Thakoon and Rodarte. Co-op vendors include J Brand, Rag & Bone, Diane von Furstenberg, Theory, Rogan and Trovata.

In a telephone interview, Gene Pressman, former co-ceo, creative director and head of merchandising and marketing for Barneys, — who recently was spotted having lunch with Lee at that media mecca Michael's but has no involvement in the business — didn't want to talk too much about the new management but offered, "I have confidence in Mark that he will find a bridge between knowing how to make a profit and being very demanding on his merchants to constantly find and develop emerging brands."

Observers believe there's plenty of work to be done to restore Barneys' bottom line, but feel the end result could be an eventual sale.

"Mark is going to revitalize the franchise," said Gary Wassner, ceo of Hilldun Corp., factors for Barneys. "He's a fashion person with a European perspective. Nobody knows what Istithmar's long-term commitment to Barneys is. Do they want to keep it for the next 10 years? I don't know. Other players have expressed interest. Ron Burkle would love it," said Wassner. "There's a lot of value in the Barneys name. I don't know why anyone couldn't do well with the company, even if they didn't overpay."

Burkle's Yucaipa Cos. bought about 15 percent of Barneys' senior term loan in late 2009, along with roughly 60 percent of the retailer's subordinated loan. It's unclear what the unpredictable, low-profile billionaire — who has a mixed track record with investing in the fashion world with holdings that include Sean John, Scoop, the jeweler Stephen Webster and a small stake in American Apparel — might do with Barneys if he were able to buy it. Nor is Burkle the only predator lurking: Perry Capital swooped in before him and bought up a large chunk of Barneys' senior debt.

As for the retailer's financial health, Wassner said that he's been very pleased with the way Barneys has been dealing with its financial commitments. "They're paying on time. On the button," he added. Wassner said that recently, Barneys' merchandise didn't look all that different from Bergdorf's. "They've allowed Bergdorf Goodman to take from them relationships that were so strong in the past," he said, noting several younger lines, such as Alexander Wang, Band of Outsiders, Gilded Age and Vena Cava, are now carried at both stores. He noted that it will take time to instill changes in Barneys' merchandise mix, since spring buys have already been committed. "The buys in the next market will be quite a different buy. Some lines will be dropped, others will be added," he said. "Barneys still has a much edgier list of younger designers, but the question is: What will it be next season? I've heard that the smaller collections will be limited, and younger designers may be dropped from the list. How they buy for fall will determine the direction going forward. When I see the fall orders, then I'll have a clear sense," said Wassner.

Wassner doesn't think Barneys needs to change its focus or become more accessible in price points. "They have Co-op for that. That's been successful for them. They just have to make better decisions and know who their customer really is."

The Co-op, which celebrated 25 years in business last year, is a profitable operation and accounts for 10 to 15 percent of Barneys' total sales. Its best-performing stores are in Manhattan, where there are three freestanding locations; in California, where there are four, and within certain Barneys' flagships, including Madison Avenue and Beverly Hills. While several Co-ops are slated to close next year — in the Houston Galleria in January and the Westchester Mall in White Plains, N.Y. by March — the plan is to continue to open more Co-ops.

To be sure, one of Lee's main objectives should be to bring back its sizzle, which the company used to possess in spades. Barneys hasn't kept up its creative efforts the last two years, due to both the economy and a lack of leadership at the top, said market sources. Karl Hermanns, executive vice president of merchandise planning, marketing, e-commerce and operations, exited in the fall. Charlotte Blechman, former vice president of public retailers at Gucci, has been tapped as Barneys' senior vice president of marketing and communications, reporting to Lee.

"The new ceo needs to bring back the magic that existed around Barneys," said Marc Gobe, ceo of Emotional Branding. "It was the hottest and hippest place to go. It was your first choice for fashion, innovation and style. They've become one of the pack now. I would immediately start to build a community online. They need to find their social voice. The brand needs to be talked about. In the old days, people used to talk about ‘I bought this at Barneys,' or someone would ask ‘Where did you buy it?' and it was Barneys."

WWD: Accessories Propel Luxury's Rise

WWD | MARC KARIMZADEH & KATYA FOREMAN

From handbags to shoes to watches, accessories are generating the power that is driving luxury’s surge.

It’s a global trend — from the U.S. to emerging markets such as China, Brazil, India and the Middle East. When the final tally is made, the sales growth of luxury accessories in 2010 is expected to be 16 percent, compared with 8 percent for luxury apparel, according to a new worldwide study from Bain & Co., a strategic consulting firm. By comparison, sales of luxury accessories in 2009 contracted

1 percent versus 2008, with luxury apparel sales dipping 10 percent.

Customers are increasingly sophisticated, cherry-picking across categories, brands and channels for quality, style or value, the report said, with men showing the same spending patterns as women on leather goods.

Despite persistent high unemployment in many countries, concerns about European debt and a still-wobbly global economy, stock values are up this year, holiday shopping indicators for high-end goods have been positive and, in a period when product adaptability and value are essential, accessories are particularly appealing because they are a versatile, fast way for consumers to freshen what’s in their closets.

Pete Nordstrom, president of merchandising at Nordstrom Inc., said shoes and accessories have been “the strongest category for us in the last several years, before things got difficult, when things got difficult and now” as retail recovers.

“There is a lot of value in accessories and shoes,” Nordstrom added. “If someone buys a designer handbag, they can use it several times a week. If you bought a designer apparel outfit, you may wear it a few times a year. You get more use and that is a part of it.”

Karen Katz, president and ceo of Neiman Marcus Group, also cited the strength of shoes and handbags in reporting this month that NMG’s income tripled for the quarter ending Oct. 30. And the rest of the industry has echoed those results.

Luxury group PPR recorded a 12.9 percent rise in third-quarter sales that was propelled by demand for designer handbags, especially in emerging markets. Hermès International has forecast a record year, pointing to items such as silk scarves, leather bags and watches. LVMH Moët Hennessy Louis Vuitton, Coach, Bulgari and Tod’s SpA all reported significant gains in accessories, while Mulberry group plc reported profits more than tripled in the six months to Sept. 30 and said the wholesale order book for spring was at least 91 percent higher than last year.

To be sure, a sudden crisis would undermine the trend, but that doesn’t appear to be imminent.

Executives such as Sidney Toledano, president and ceo of Christian Dior, and Philippe Pascal, president of LVMH’s watch and jewelry group, have said sales of luxury timepieces are strong and they expect the growth will carry over into next year.

Since the beginning of the year, Louis Vuitton has seen double-digit gains in accessories worldwide. Bestsellers include scarves, such as the house’s cashmere Leo stole, small leather goods and men’s and women’s sunglasses.

Boosted by tourist flows, notably Chinese customers, Gucci in the third quarter saw strong demand for classic handbag styles and novelties such as the Gucci 1973, especially in Western Europe, where overall sales for the brand rose 27.7 percent in the third quarter, with France, Italy and the U.K. all posting solid gains. As the brand’s core business, leather goods represent well over 50 percent of total Gucci revenues, generating in excess of 1 billion euros in sales, or $1.3 billion at current exchange.

“We have been very pleased,” said Cody Kondo, group senior vice president of shoes, handbags and jewelry at Saks Fifth Avenue. “Shoes and handbags have been very well received by our customers. In light of the good run we have had in the stock market over the last 60 or 90 days, customers have a strong appetite for them again.

“They still want value,” Kondo said. “That feeling of recession has not totally gone away, so it’s not all pre-2008. The customer is still looking for a strong price-value relationship. A year ago, into spring, there was a trend in timeless and classic pieces. We have seen some of the more statement fashion pieces now selling quite well. We have seen a nice increase in the jewelry category.”

At Tory Burch, top sellers in recent weeks have been the Reva and Eddie ballet flats; the hiking-inspired Halima, Lyle and Howard boots, and small leather goods like clutches and bags in all sizes.

“Accessories are an entry point into a brand,” Tory Burch president Brigitte Kleine said. “They are often the first thing women buy because they are the easiest way to update your wardrobe, from a leather handbag to a shoe you can wear year-round.

“People are more conscious about how and what they are buying,” she added. “ They are looking for products with value and longevity. As opposed to buying a whole new wardrobe every season, they’ll update with accessories.”

Lisa Montague, ceo of the Spanish leather goods brand Loewe, which is owned by LVMH, said the label this year has seen a higher quality of sales, with buying patterns shifting up more to the top end of price ranges.

“That could be because the customer is feeling more confident,” she said. “Certainly, for our brand, we’ve returned to being true to what we’re good at [luxury leather goods], and that is resonating well with the consumer.”

Although Loewe has seen high growth rates in China, Montague said Japan is still proving a challenging market. Bestsellers include the brand’s lightweight Nappa line and its iconic Amazona bag collection. The entire Amazona family takes around 30 percent of the house’s bag sales, Montague said.

“We have seen a tremendous rebound in accessories, with shoes being the strongest of any fashion category, followed by handbags,” said Robert Burke, founder, president and ceo of the Robert Burke Associates consultancy. “The consumer is realizing it’s the easiest way to update their wardrobe, and consumers who have been forced to be more creative in their purchases realize they can shop [for apparel] in the contemporary category, or in more mass stores like H&M or Zara, and then splurge on a signature shoe, handbag or a piece of statement jewelry.

“There is also the aspirational consumer who will buy contemporary or more broadly distributed [ready-to-wear], and then save up for that signature shoe,” Burke added. “Runway designers have given shoes so much attention that the category almost has a life of its own.”

David Wolfe, creative director of trend forecasting firm the Doneger Group, said it is natural for accessories to lead the charge in retail’s recovery.

“Shoes and handbags represent what consumers think of as a better investment than a garment because they are going to get more use out of it,” Wolfe said. “It also eases their guilt from buying luxury brands. They think that by shopping accessories, they are justifying returning to their evil shopping ways.”

After steady double-digit growth in accessories sales over the past six years, Selfridges in London this year has seen its largest increase for the category yet — a 30 to 40 percent climb in sales year-over-year.

Sebastian Manes, accessories director at Selfridges, said the category is the store’s largest division.

“Women’s wear is up over last year, but won’t have the same increase as accessories,” said Manes, citing Mulberry’s Alexa bag, Louis Vuitton’s Speedy and Chanel’s Mademoiselle bags, among other bestsellers. “The increase we’ve seen this year is phenomenal.”

Ditto at Harvey Nichols. Pointing to a rise in volume over the past few seasons for scarves and jewelry, Helena Sotiriou, accessories buyer at Harvey Nichols, London, said the store this season has seen a resurgence of demand for the “must-have” handbag, with long waiting lists for bags by the likes of Proenza Schouler and Alexander Wang.

Harvey Nichols has experienced a 45 percent sales uptick in the category. Among the bestsellers are Proenza Schouler’s PS1 satchel, Alexander Wang’s Coco bag, Alexander McQueen’s box clutches and Stella McCartney’s runway Court shoe.

“This season, customers are willing to spend and invest in their wardrobe as long as they perceive it to be value for money — price by wear,” Sotiriou said.

Catherine Newey, director of accessories at Printemps in Paris, said luxury has had the strongest growth, particularly luxury leather goods, jewelry and timepieces. Accessories account for more than 30 percent of the store’s sales.

“Clothing is experiencing growth, but the real dynamism is coming from accessories,” Newey said. “Every brand has focused on developing accessories” because they allow consumers to follow trends without having to change their wardrobes. “Accessories have become more and more directional,” she said.

How will brands maintain the momentum?

“So many of the luxury brands bastardized their integrity when they were overexpanding and catering to the aspirational market, and that is the one that has now dried up,” said Wolfe of the Doneger Group. “The brands now have to reassure their customers that they still have the quality, integrity and authenticity.”

WSJ: The Little Season That Could

WALL STREET JOURNAL | MEENAL MISTRY

The fashion season called resort has had a few lives. For a good part of this century, it was everything the word connotes, which is to say, leisurely maillots and caftans to fill the steamer trunks of wealthy women sailing off for winter holidays. In more recent decades, it served as a sort of retail caulk with tried-and-true basics filling in the cracks on shop floors between fall sales and spring arrivals. But it’s the latest incarnation that the fashion industry can’t stop talking about. Like Clark Kent after a visit to a phone booth, resort has gone from mild-mannered and meekly helpful to a seasonal superpower on which luxury labels depend for strong retail sales and even a dash of prestige. It’s a colorful irony that a season inspired by leisure time has become the hardest-working collection in the business.

“Most of the collections [in the late ’80s and early ’90s] were not terribly fashion-oriented,” Saks Fifth Avenue president Ron Frasch recalls. “Many times the designer didn’t even do them. It was the team. They tended to be things that had performed in the prior season but in different fabrics.”

These days, however, the most “wearable” collection bridges the two main runway seasons and can account for up to 70 and sometimes 80 percent of women’s designer-apparel sales. “Resort has become an independent fashion season that will oftentimes rival a spring or fall,” says luxury consultant Robert Burke.

Coupled with a shifting identity, resort—also known as cruise and pre-spring—has found itself with a handful of monikers along the way. “Resort?” says Stella  McCart­ney. “How unsexy is that word? It feels so dated. We call it spring.” Oscar de la Renta CEO Alex Bolen has another suggestion: “They should call it November delivery. These are not really clothes that go to a resort.” Michael Kors has raised the white flag of surrender. “I’ve given up on renaming it,” he says. “We’ll call it the little season that could.”

Conceived to be refreshing and commercial, resort tends to be more wearable than runway collections, without so many of the “Who would wear that?” moments. But this distinctly retail bent meant the clothes were largely ignored by fashion magazines. You can credit Karl Lagerfeld with leading the charge on turning the tide. Last May, the Chanel creative director set his resort 2011 show against the fabulous backdrop of Saint Tropez’s harbor. Models arrived by speedboat as the sun was setting. Famous and beautiful friends of the house like Vanessa Paradis, Leigh Lezark and Diane Kruger were flown in for the occasion.

This was actually Lagerfeld’s 11th resort spectacular. His first, in 2000, was staged at Paris nightclub Régine. “Karl was visionary. He was the first one to perceive the growing importance of the cruise collection,” says Chanel’s president of fashion, Bruno Pavlovsky. Although transporting a group of international journalists and the rest of your chic posse everywhere from Venice to Miami is not a cheap proposition, Pavlovsky adds: “Chanel is very attached to the way we show this collection.”

In the past few years, it seems that every designer became hyperaware of resort’s particular advantage of a selling period that can stretch from late October until June, encompassing high-volume holiday-shopping periods, and is marked down at the same time as spring runway clothes (resort has the longest window before being marked down, most commonly November to May at full price). It’s only logical to make the most of it. Also joining Chanel were Oscar de la Renta and Christian Dior with runway presentations that couldn’t be ignored. In 2006, Style.com added resort coverage to its database of fall and spring runway reviews.

Nowadays, not every label does an extravaganza, but there’s still great care taken with the presentation. Most European designers fly in to meet and greet, like Stefano Pilati, who staged Yves Saint Laurent’s resort show this year at the French consulate in New York. McCartney showed hers at a downtown gallery over margaritas and vegetarian hors d’oeuvres; in attendance were A-list friends like Gwyneth Paltrow and Naomi Watts. Meanwhile, Lanvin’s Alber Elbaz has chosen to work his considerable charm by personally narrating multiple minishows for small groups of editors and retailers.

The younger guard has followed suit, even though adding another collection to a small team’s production cycle is daunting. Los Angeles–based designer Juan Carlos Obando did his first resort collection this year. “I was extremely concerned because resort happens right when you’re trying to produce the fall show and it has to be delivered right when you start producing the spring collection,” he says. The gamble paid off. Barneys ordered double what they had from his fall 2010 show. Michelle Obama favorite Jason Wu has done a show for the past two seasons. “Why shouldn’t it be [as important]?” Wu says. “The numbers are just as great as the main seasons.” Actually better. Wu reports that he sells 60 percent resort to 40 percent runway. This season, Wu took the collection to Paris to show to European stores and ended up adding 30 new accounts.

It all adds up to the fact that designers are making these clothes a high creative priority—but within the confines of the original customer-friendly intention of the season. It’s a combination that results in a sort of perfect fashion storm. “It’s more of a realistic collection,” says Laura Vinroot Poole, owner of Capitol boutique in Charlotte, N.C., who has consistently channeled her budget heavily into resort. “They’re just beautiful clothes, rather than the sort of idea that’s been gone over and over with stylists.”

But in today’s flat fashion world of online shopping, perhaps the season’s biggest asset is simply that it’s yet another delivery of clothes. “[Resort] really supports our customers’ desire for newness,” says Net-a-Porter’s vice president of marketing and sales, Alison Loehnis. Loehnis reports high double-digit growth in the company’s resort sales over the past four years.

Even for bricks-and-mortar businesses, resort’s wide-ranging product that includes outerwear, knits, fur and lightweight early-spring clothes satisfies the current trend of buying clothes for immediate consumption that is especially important post global economic crisis.

And as the industry continues to recover from the doldrums of 2009, customers will increasingly be seeing ad campaigns to support these collections. While many houses—Prada, Bottega Veneta and Donna Karan included—did resort-specific advertising in 2008, the numbers logically dropped off afterward. Louis Vuitton and Michael Kors are the rare brands that have been consistent in this arena. De la Renta’s Bolen says, “I would say for us, it’s coming very soon.” Considering that the company sells more units of resort than of any of its four deliveries, it’s likely very, very soon. As Kors sums up, “This is when people are in stores. Treating [resort] as a stepchild in any way whether it’s advertising, design or even quantity is foolish.”

WWD: Julie Macklowe as Fashion Backer

WWD | EVAN CLARK

NEW YORK — Julie Macklowe has moved beyond the red carpet to the boardroom.

The hedge fund ex-pat and semireluctant socialite has returned to her family’s garmento roots, so to speak, and embarked on a new career as a fashion backer with a hands-on approach.

Online jewelry startup BaubleBar, her first investment, launches Thursday and marks the start of phase two of her fashion career. Macklowe has a board seat and is helping the company, founded by two recent Harvard Business School graduates, get off the ground. Accel Partners, a venture capital firm, is also investing in BaubleBar, although the size of the infusion has not been disclosed.

Macklowe is working on another startup she plans to run and hinted that “there are at least two apparel companies I’m looking at,” although she favors the fatter gross margins in the cosmetics, accessories and handbag sectors.

Macklowe, née Lerner, is something of a rarity in fashion. The granddaughter of a polyester king is well connected in New York’s social and fashion circles and is a familiar face on the party circuit. She counts Jason Wu as a friend and accompanied Calvin Klein’s Francisco Costa to the CFDA/Vogue Fashion Fund event last month. But she is also fluent in the language of business, having spent 12 years in finance, which culminated in a $250 million Millennium Management-backed hedge fund launched under her own name in early 2009 and shuttered in October.

Now she’s taking her own money and using her contacts and the strategic and management skills she picked up in the private equity world to invest in the changing fashion landscape.

Macklowe said the current crop of young designers are just starting to spread their wings, like Calvin Klein and Ralph Lauren in the Eighties. Many of these brands are looking for cash to expand, and seeking management expertise to take them to the next level.

“You’re going to see some really cool designers who make it big,” she predicted over tea at the Four Seasons in New York recently.

At first glance, it would be easy to underestimate Macklowe as more of a consumer of designer apparel than serious investor in brands. At 32, she is fit, blond, ready to smile and, for better or worse, sartorially adventurous. She’s just as likely to wear a Balenciaga blazer as leather pants for meetings, and strays to whatever strikes her fancy on the way to the numerous red carpets she walks down.

“She’s not afraid to take a fashion risk,” said Wu, describing her style as “very feminine.” Wu and Macklowe met through mutual friends and have no business relationship.

“Usually when we go out, she’s the one that orders the whiskey and I’m the one that orders the Champagne,” he said. “She’s the gutsy one, yet she’s wearing six-inch heels. It sort of balances out her personality. She’s just a lot of fun.”

But she’s also very direct and, in conversation, can talk as knowledgeably about the high unemployment rate as she can about Coco Chanel’s impact on how women dress.

Although she could easily spend her days on the party circuit, Macklowe is almost an antisocialite. “I’m doing things that are important to me,” she said. “I’m not running to go to every party.” She’s involved with New Yorkers for Children and The Metropolitan Museum of Art’s Costume Institute.

“I don’t know what it means honestly, I don’t know who coined ‘socialite,’” she said. “It’s really a bizarre term if you think about it. I don’t know. What is a socialite?”

In many ways, she’s an example of a new species of fashion investor.

“Where it used to be traditional bankers or hedge funds that were interested in investing, we’re now seeing people that are directly connected, whether it be angel investors or others,” said Robert Burke Jr., president and chief executive officer of Robert Burke Associates, who counts Macklowe as a former client and a friend. “It’s all more opportunity for the designer.”

Burke said Macklowe has the business acumen to follow through and help grow the companies in which she invests. “The biggest challenge today is that investors for maybe ego reasons, for self-promotion, invest in fashion and then realize that it’s a much more complex business,” he said. “It’s a sexy business to invest in. It’s not always such a sexy business to maintain and grow."

The fashion, business and consumer stars are going to have to align if Macklowe is going to back the next big name or get in on the next hot trend.

“You could be speaking with one of these companies for years,” she said. “It might just not be a time when they need money. And you need luck.”

So far, Macklowe has been pretty good at making her own luck. In just three years, she earned two bachelors degrees from the University of Virginia and a better-than-3.9 grade point average.

Jeffrey Walker, former ceo of J.P. Morgan Partners, hired her out of school in 2000 to work at what was then Chase Capital Partners. “She was unique because she was willing to take a risk,” he said, noting that Macklowe challenged hedge fund pioneer Julian Robertson when he came to speak at one of her classes.

“Here’s someone who was 20, who was going toe-to-toe, and Julian thought she was great because of that,” Walker said.

“It’s very easy to sit in one place,” Macklowe said. At Chase she shuttled between Seoul and Hong Kong weekly and squeezed in naps between meetings as she, at times, logged 22-hour workdays helping to structure leveraged buyouts.

“It’s very uncomfortable to put yourself in a place where you know no one on the other side of the world,” she said. “And I think it makes you a better investor and judge of businesses and character and people to put yourself in an environment where you are not necessarily comfortable.”

In 2002, she moved to New York and started working as an analyst at Metropolitan Capital Advisors.

“She was a moneymaker,” said Karen Finerman, president of Metropolitan, where Macklowe focused on retail. “She just seemed to have a combination of an interest and an aptitude for that space. She has a good sense of risk management, when it’s not working, when to get out. That’s very important.”

A colleague set her up on a blind date with Billy Macklowe, son of Manhattan real estate giant Harry Macklowe. The two have been together ever since.

Yet while she may have married well, she didn’t settle into an easy life. She joined investment firm SAC in 2006 and her profile in the fashion world grew as she invested in the retail and consumer market. She was eager to explore every new brand and retail concept in the sector, regularly making the rounds of conferences and openings to gain an investing edge.

“She’s a very savvy investor,” said Joe Gromek, president and ceo of The Warnaco Group Inc. “She does her homework. She has fun following the business and she appreciates the fashion side of it. She can see how a company is performing.”

But Macklowe yearned for a more hands-on approach.

“I wanted to feel passion about what I was doing and really work with companies in a more active role, which is hard to do while you’re buying and selling stocks,” she said, noting markets are being driven by investor psychology. “There’s a lot of super-irrational moves in the short term because of the sentiment and people. After everyone’s come out of such a hard time, no one knows exactly what to think of anything.”

Stepping back from the markets also afforded Macklowe more time with her three-year-old daughter.

“Nothing to me is better than taking Zoe to drop-off in the morning and watching the three-year-olds with their oversize backpacks running down the hall, excited to get to class,” she said.

Macklowe’s introduction to the fashion business began when she was near her daughter’s age.

Her great grandfather, Frank Lerner, came to New York from Russia in the early part of the last century and worked in the garment district.

On days when school was out, his son, Harold, was enlisted to help him carry his sewing machine to factories, according to Macklowe’s uncle, Michael Lerner, former chairman of Marisa Christina Inc.

But Harold nonetheless got a feel for the business and after World War II took the T-shirt firm his father developed and turned it into the women’s sportswear brand Fire Islander, which specialized in double-knit polyester in the Seventies and Eighties. At its peak the company had a very respectable volume of about $75 million and factories in what is now DUMBO in Brooklyn and in Bayonne, N.J.

“Some of my earliest memories are of walking the floors with people sewing and patternmaking,” Macklowe remembered fondly.

“I don’t know if it’s in the blood,” her uncle said. “But she’s always been fashion conscious. Hopefully some of that springs from her interaction with our designers.”

WWD: Footwear News Person of the Year: Christian Louboutin

WWD | ELISE ANNISS

He is unstoppable.

Even in a year when high-end retail struggled to recover, Christian Louboutin’s signature glamour was the force to be reckoned with. His unique grasp of luxury consumers of all ages was never more obvious than in 2010. While other designers were forced to cut staff and reduce their retail footprints, Louboutin expanded his red-soled empire across the globe.

The Footwear News Person of the Year raised the bar at a critical time in the luxury category, and the efforts have clearly paid off.

“Never has a red sole meant so much,” said Robert Burke, head of New York-based consulting firm Robert Burke Associates.

“It’s been Louboutin’s year for a couple of years now,” added Ron Frasch, Saks Fifth Avenue president and chief merchandising officer. “He’s become the king of the category.”

The designer himself admits that 2010 marked an important year of transition, when the brand went truly global with store expansion and new distribution. “The reality is that I now have a COO who is really organizing everything, and that definitely makes a difference,” Louboutin told FN. “But at the end of the day, it’s because the shoes are selling.”

In the last 11 months, the designer opened 12 stores in cities including Beirut, Dallas, Dubai, Jeddah, Madrid and Tokyo. According to COO and GM Alexis Mourot, the company saw double-digit growth this year, and retail sales exceeded $250 million for the year ending August 2010.

Despite his super-stardom, Louboutin remains humble, unconcerned about money and the trappings of fame. “I do what I do because I love it. I’m not doing it to make money,” said the designer over a breakfast of buttered crumpets and English Breakfast tea in London last month. “It has ended up being a [successful] company, and I’m not going to say it isn’t pleasant to make a living from your work, but my goal has always been to design pretty shoes and to see them on people who like them.”

No one likes Louboutin more than the luxury retailers who have cashed in on his fame. Even during the recession’s darkest days, the success of the brand left them thirsting for more of it.

“Christian’s red soles are a stroke of genius and the icing on the most delicious gateaux,” said Jonathan Joselove, SVP and GMM at Neiman Marcus. “His talent and his shoes have delighted us for years. Most important, his shoes have thrilled our customers, season after season.”

At Saks Fifth Avenue last month, 8,000 consumers voted his Maralena shoe the year’s sexiest in a contest sponsored by the department store and FN.

“He stands apart because of his innovation in design and originality with use of materials,” said Tracy Margolies, VP and DMM of women’s footwear for Saks.

While he’s been making some serious noise for the past several years, Louboutin built his business quietly for the first decade. He opened his first flagship Paris store in 1992. Early on, in New York, he showed his shoes above Diane von Furstenberg’s studio on 12th Street, and she has since become a mentor.

“My second career and his first started at the same time,” said von Furstenberg. “Christian is like my younger brother. We talk, we travel together, we have the same partners in places like Russia, we are friends and soul mates and I adore him. He is talented, incredibly smart and curious and also competitive. His success is no accident: He has clarity and is talented and intelligent.”

For his part, Louboutin credits von Furstenberg with helping him develop his brand’s direction. “She’s very specific on shoes,” he said. “She gave me very important advice: She told me I should always have classics. I was always changing the collection and never thought about classics that go back to previous collections. She was the one to say, ‘You have to do classics. You have them, why do you get rid of them?’”

It was with the addition of Louboutin’s second New York store, at 59 Horatio St. in November 2004, that his U.S business really took off. In an interview with FN in 2005, Louboutin said the shop gave him greater exposure to a younger, hipper customer.

The store locations reflect Louboutin’s long-held interest in far-flung places. As a boy in France, he would pick up brochures and books from a nearby travel agency and plan imaginary trips. Now, his genuine enthusiasm for people and places has made the designer a big hit with his international accounts.

“He always manages to take time to explore, is very familiar with parts of China and Indonesia and has made great friends in these places,” said Peter Harris, president of Pedder Group.

“The fact that he has fun shows up in his shoes,” said Erin Mullaney, buying director at Browns in London. “There’s a sense of playfulness in the collection. Also, unlike some other designers, he is happy to be the face of the brand and enjoys it.”

But you won’t find Louboutin clamoring for the spotlight.

“The type of celebrity I am — if you can call it celebrity — is perfectly easy [to live with],” he said. “When people refer to your name, it is totally different [than recognizing me]. I would really have a hard time having the kind of celebrity that actors do, where people are stopping you all the time. It’s not about me; it’s about the shoes.”

That mindset has only increased his appeal in Hollywood.

“There is no one like him,” said Gwyneth Paltrow. “His shoes are playful, sexy and full of joy.”

And though he doesn’t go out of his way to court the famous, Louboutin considers his popularity to be extremely rewarding. “I take a lot of pride in the fact that with all the choices in the world, celebrities still choose my shoes,” he said. “Shoes are objects of desire. I’m not going to throw tons of shoes at someone so that they’ll wear them. [The desire] has to come from the person.”

So what does the future hold for the designer? On that topic he is non-committal: “There may be a moment when I get fed up and want to try something else, which I can completely conceive. My impulses are very important to me. I never say no forever, but I never think that a yes is forever either.”

WSJ: In Bloom: Miu Miu Comes of Age

WALL STREET JOURNAL | CHRISTINA PASSARIELLO

Miu Miu, the little sister to Italian fashion house Prada, has grown up.

After living in Prada's shadow for years, the label is finding that its moves to carve out an independent identity have paid off, catapulting Miu Miu into the top league of Europe's fashion scene. Sales at Miu Miu, which unveils its spring/summer 2011 collection Wednesday in its largest venue yet, have more than doubled in the past four years.

Prada designer Miuccia Prada founded the label, which takes its name from her nickname, in 1993. Four years ago, Miu Miu decamped from Milan to Paris to stage its biannual fashion show, creating a new showcase for its distinct style. Its frills and glitz presented a sharp contrast with Prada's minimalism.

"It's feminine and sexy but modern too," wrote Lorraine Candy, editor-in-chief of Elle fashion magazine's U.K. edition, which together with three other fashion magazines put the same Miu Miu look—a dress with flowers on the straps and a bow across the front—on their August cover pages.

Miu Miu's revamp is important to the future of Prada SpA, which owns shoe brands Car Shoe and Church's in addition to Miu Miu and Prada. Prada's owners—Ms. Prada and her husband Patrizio Bertelli, who is chief executive—hope to list Prada on the stock market in the coming years. Analysts say the group would make a more compelling investment if it didn't rely only on the Prada label for nearly all of its sales growth. Of the company's $1.3 billion in first-half sales, $220 million was generated by Miu Miu, which grew 40% during the period.

For three decades, many fashion houses have created less-expensive versions of their main collections as a way to expand their businesses. Giorgio Armani launched Emporio Armani and Armani Collezioni for consumers who couldn't afford the high price tags of his main line. Dolce & Gabbana created D&G as a younger and edgier variation of the original brand. Just Cavalli is the younger sibling of the Roberto Cavalli brand.

Prada has tried to do something different with Miu Miu. Though the brand is designed by Ms. Prada, the company's executives have gone to great lengths to fight the perception that Miu Miu is simply a more wearable and affordable spin-off of its bigger sister brand.

Miu Miu's inaugural Paris runway show in 2006 featured clothes in expensive fabrics and elaborate techniques, such as hand-painted brocades and printed silks. Provocatively flirty skirts replaced the simple shift dresses and dowdy sweaters that Ms. Prada had previously designed for Miu Miu. For the brand's debut Paris show, Ms. Prada brought tailors with her from Italy to Paris to put the final touches on the ensembles. Trendier than Prada, the label is popular among celebrities, such as Carey Mulligan and Keira Knightley.

While Miu Miu still generally costs less than the Prada label, in recent years, the company has pushed Miu Miu's prices high. A pair of cream and black patent pumps sell for $650, compared with $550 for Prada's classic black heels.

"Miu Miu and Prada do not cannibalize each other. They are friendly competitors," said Prada Chief Operating Officer Sebastian Suhl in a recent interview. When a Miu Miu store opens near a Prada store, Prada's sales don't suffer, Mr. Suhl said.

Robert Burke, a luxury-goods industry consultant, says that Miu Miu's recent success has also been helped by a change in consumers' dressing habits. Years ago, when consumers dressed head-to-toe in one designer label, cheaper, secondary lines allowed consumers who couldn't afford a top designer line to still buy into a designer's look. "Today people don't shop that way. They are just as happy to shop across different categories and brands," Mr. Burke says.

Miu Miu has also revamped its Milan flagship store in damask and rich colors—a change from a more minimalist concrete look—and has redecorated a network of 75 boutiques around the world.

Mr. Suhl said that he wants Miu Miu to be sold only in U.S. department stores that will give the brand its own in-store boutique, rather than putting it out on the floor with other brands. It is rolling out more in-store boutiques in U.S. department stores. It has long had its own boutique at Bergdorf Goodman and plans to open one at Bloomingdale's this month. Next year, Miu Miu will have 20 such "shop-in-shops" in U.S. department stores, displaying a full array of clothing, shoes and bags.

WWD: Masstige Gains Power

WWD | MILES SOCHA

PARIS — The idea that expensive, designer fashions are the most desirable seems so last-millennium.

More and more marquee designers are applying their creativity to lower-priced apparel on a temporary or full-time basis, with Karl Lagerfeld the latest to join the masstige movement.

“Fendi and Chanel are so established, you cannot compete with them,” said Lagerfeld, who last month unveiled plans to shift the focus of his signature ready-to-wear line to access-pricing — and online selling — starting next fall. “You can’t dance at three parties the same evening.”

And in Lagerfeld’s estimation, the masstige party — which he really got going in 2004 when he teamed up with Swedish fast-fashion giant H&M on a one-time collaboration — is the one to be at today.

“I think it’s the only modern way to do it,” Lagerfeld told WWD. “We live in the age of jeans.

“It’s funny for a person who has money to buy something inexpensive and it’s great for a person with not so much money to be able to get something by a designer,” he continued. “It’s the new snobbism.”

Designers, executives and other observers agreed, saying the democratization of design, weakened spending power and shifting consumer preferences are giving lower-priced “designer” fashions a higher industry profile — and a bright future.

“It’s no secret that the designer and high-end market has become crowded in this economy, and people are looking at new ways of doing business,” said Robert Burke, head of the New York-based Robert Burke Associates consulting firm. “The old rules of defining the consumer and defining the price point — and the idea that you can play in only one category — are passé.”

Indeed, designer-led projects in lower-price categories continue to multiply, from Olivier Theyskens’ new contemporary range for Theory and Stella McCartney’s just-revealed partnership with PPR’s La Redoute on an affordable children’s wear collection to Lanvin’s forthcoming one-off line — from evening dresses to lipstick — for H&M.

What’s most intriguing are designers shifting permanently downstream, as Jil Sander did last year when she joined Japanese fashion giant Fast Retailing Co. Ltd. and launched her new +J brand for its flagship Uniqlo chain.

“Today, we are in a different phase of fashion history,” Sander said. “I took part in the transformation of fashion from a couture craft into a contemporary industry. We are much better equipped to realize quality on a much larger scale.

“To me, luxury has nothing to do with high prices, but a lot with enlightened taste and the possibility to be in step with your age, to feel at ease in your body, and to project a confident image of yourself,” she continued.

According to Jean-Jacques Picart, a Paris-based industry consultant, big-name designers cannot ignore a strong, worldwide trend toward more eclectic dressing, with lower-priced elements a key ingredient.

“A modern girl doesn’t hesitate today to mix quite expensive clothes and affordable-priced pieces: say, shoes by Christian Louboutin, a skirt by Diane von Furstenberg, a T-shirt from H&M, a vintage handbag and a belt she bought at a market in Istanbul,” he said. “What Karl did with H&M pushed up to the top level of prestige any co-branding between big names and popular names.”

Concetta Lanciaux, principal of Switzerland-based Strategy Luxury Advisors, also ties the rise in masstige — accessibly priced products with some prestige elements — to economic factors, principally a “sharp decrease in standards of living that has hit the mainstream middle class who used to buy entry-level luxury products or second lines.”

Changing tastes play a role, too. “The new generation is much more fashionable than the jeans-and-T-shirt Generation X-ers born after the Seventies that loved Gap — the antidesign, accessible brand,” Lanciaux said. “For those born after the Eighties, looking fashionable in a personal way is cool, and they mix and match styles to achieve a more adult look while adults dress generally younger.”

Lanciaux said celebrity lines, mostly accessibly priced, have “given a new impulse to this trend,” while Gap is morphing into a more design-driven brand, evident in collaborations with young American designers and, coming in November, a capsule collection by Valentino available in Europe only.'

Burke highlighted the popularity of Target’s tie-ups with designers such as Isaac Mizrahi, Zac Posen, Alexander McQueen, Anna Sui, Rodarte and Jean Paul Gaultier. Designer names “speak to the consumer” more than a “nameless, faceless masstige brand,” he said.

In a recent report, Bernstein Research analyst Luca Solca asserted that mass retailers like Inditex, parent of the Zara chain, and H&M are changing the apparel industry from the ground up. “Their short design-to-market lead times, compelling fashion content and superior scale are allowing them to gain market share across the world and push traditional apparel retailers aside.…Even high-end designer fashion is feeling the pressure,” Solca wrote.

“The customer is clever,” added Margareta van den Bosch, creative adviser at H&M and the former head of design who launched its annual designer collaborations with Lagerfeld, subsequently teaming up with Viktor & Rolf, Jimmy Choo, Sonia Rykiel and others. “He or she wants the best of all things, and mixes and matches from all different kinds of offerings and brands. It’s something that we encourage: Fashion should be about finding new ways to express yourself, at a reasonable cost.”

Van den Bosch said consumer interest remains high in the retailer’s designer collaborations, helping the fast-fashion giant widen its reach.

“Since we started doing collaborations, we have seen new types of customers that normally did not shop at H&M. For example, Comme des Garçons attracts a different type of customer than Roberto Cavalli,” she said. “And from what we can see, we have also kept them.”

Colette, the ultrahip Paris boutique, has also been a hot spot for launching and popularizing masstige products — an Azzaro range for cataloguer La Redoute being the most recent on the floor last month — amidst the crème de la crème of designer creations.

“Our philosophy is to introduce anything we like, so it can go from a luxury brand to a special mass market collection we would get in advance,” explained Sarah Lerfel, Colette’s creative director and buyer. “For sure it opens our door to many customers who are usually not coming to our boutique, so that’s positive. The downside would be the mess it can generate, but that’s a positive mess, too!”

Lerfel said the accelerating speed of trends, no doubt fuelled by the quick-turn fast-fashion players, means “you always want something new, but with quality and a good price to update your wardrobe fast.”

Christian Lacroix — now focused on stage costumes and industrial design projects since his couture and ready-to-wear house was shuttered last year — said the financial crisis and exaggerated runway styles have undermined the appeal of designer fashions in recent years.

Meanwhile, “real people found their own style tricks and pleasure through eBay, low-priced shops, vintage and secondhand, Internet, flea markets or all these chains such as Zara, H&M etc., which are so clever interpreting runway styles into more edible products,” he said. “That’s why designers are more and more attracted by lower-priced products if they don’t want to lose the connection with their audience.”

In Lacroix’s estimation, there’s an “enormous space for these lesser-priced lines — if they are right and connected with street desires. And this space is stolen from deluxe fields.”

Said the consultant Burke: “If you can offer good design at a great value, you get a customer. It’s that simple.”

Most observers agreed that high-end designers can dabble in masstige without risk, so long as the latter projects are not overexposed or too derivative of their high-end offerings. Burke mentioned Vera Wang as a good example since her Simply Vera Vera Wang line at Kohl’s has not hampered her draw as a go-to, luxury bridal designer, as Chelsea Clinton’s July nuptials attested.

Lanciaux warned that while embracing masstige “would mean slow death for a luxury brand, it becomes particularly interesting for clever designers and marketers capable of offering design, functionality and a decent quality at a low price. In a way, it could replace the income from licenses and secondary lines.”

Alber Elbaz, creative director at Lanvin, said he had initially spurned invitations from H&M to collaborate, but he was ultimately seduced by the “democratic” nature of the project.

“We thought it was a very relevant move. High-street fashion is really becoming stronger and more important,” he said. “We were always doing high fashion and I thought it would be interesting to understand this market.”

“The business requires innovation and evolution,” agreed Andrew Rosen, president and co-ceo of Link Theory Holdings (U.S.) Inc., which just launched the Theyskens’ Theory collection by the former designer of Nina Ricci and Rochas, someone famous for couture-like creations with nosebleed prices. While the new Theory line is hardly mass, and is described as “high contemporary,” it is more democratic.

“I think designers are very forward and innovative thinkers. Clearly their reach can be much more than at the luxury end,” Rosen said. “I don’t think clothes have to be expensive to have value.

“You don’t get to be Jil Sander, Karl [Lagerfeld] or Olivier [Theyskens] if you don’t have a special point of view,” he continued. “And if you have a point of view, it’s relevant at any price or in any category. At the end of the day, I don’t think someone is going to buy an Olivier Theyskens jacket because they can get it for $600. They’re buying it because it’s really special.”

McCartney, who rose to fashion fame as the designer of Chloé, launched her brand as a joint venture with Gucci Group in 2001, and her accessibly priced forays have included a one-time collaboration with H&M in 2005 and her ongoing partnership with Adidas.

“I don’t really believe in elitism for the sake of it,” said McCartney. “I think it’s really important and modern and contemporary if you can make clothes that are affordable and accessible, but with still a great quality attached to them and timelessness.

“I think our brand isn’t snobbish and that’s why we started looking into this early on,” she explained. “It comes very natural to us.…We are a brand that can appeal to many different demographics of people, and so we’re interested in playing on that and testing that and pushing that within the brand.”

While most designer forays into lower-price zones have centered on women’s apparel, observers agree other categories, such as men’s wear, could be further developed.

“There is a strong tendency toward a less frivolous lifestyle. You find people of style on all levels of income: quality and attractiveness wins over snobbism,” noted Sander. “I see many possibilities in my cooperation with Uniqlo. I am very interested in accessories, and I would also consider doing optics, fragrances, homewares and even watches. I guess I would draw the line at jewelry.”

In Lanciaux’s estimation, accessible products with a designer edge will remain “a valuable choice for consumers formerly buying secondary lines and mass” as long as this slow-growth economic cycle lasts.

“But nothing is eternal,” she said. “In a new economic cycle, the same consumers will be buying higher because the aspiration to luxury — of which quality is a key element — is definitively stamped in the DNA of the new generations.”

FINANCIAL TIMES: Fur fervour

FINANCIAL TIMES | LUCIE GREENE

It is the most contentious item of clothing on the catwalk, found on everything from shoes to coats to chain necklaces. Fur is back.

According to the Fur Information Council of America, fur appears in 20 per cent more of the autumn/winter catwalk collections this year than last. At Oscar de la Renta, coats were trimmed with fox; at Lanvin, black cropped jackets were adorned with shaggy fox collars; Carlos Miele showed cropped fox jackets and swing astrakhan (Persian lamb) coats; at Helmut Lang there were grey rabbit gilets; Jean Paul Gaultier introduced black coats with mink; while Fendi had coats, shawls and gilets in fox, mink and shearling.

Torben Nielson, chief executive of Kopenhagen Fur, a Danish fur auction house, says prices of fur have doubled on last year, with mink and Persian lamb in particular selling fast. “China and Russia are exploding: China accounts for more than half our business,” he says. “Half of [the fur] is consumed in China, and half is used by Chinese furriers to produce pieces for luxury brands.”

Celebrities are wearing fur more often, too, irrespective of milder winters or protesters from People for the Equal Treatment of Animals (Peta). Last week, Kate Moss emerged from dinner at The Ivy restaurant in London wearing a shaggy fur gilet; days later Love magazine editor Katie Grand was photographed in a bold white fur piece from Louis Vuitton.

Robert Burke, a New York-based luxury consultant, says the reason for fur’s popularity is its newfound modernity. “It’s no longer about the old fur coat department. Fashion designers are putting their stamp on pieces now.”

And it is not only the established guard who are using fur but also younger designers such as Thakoon and Zac Posen. Thakoon has worked fox, mink and raccoon patches into jackets, Posen striped fox fur into multicoloured coats.

Brix Smith Start, owner of Start London boutiques, believes the ascendance of fur is partly a result of the economy, with consumers wanting investment pieces and “tangible luxury”. It has even emerged on accessories: Manolo Blahnik’s high-heel booties are trimmed in chinchilla; Céline’s satin open-toe mules with rabbit-fur lining; and Louis Vuitton’s chain-link necklaces are interspersed with fur.

Fur’s increased prevalence, however, is still a divisive issue for retailers and consumers alike. That’s why fur associations have been striving to transform its image. Saga furs, a body representing 3,000 breeders in Finland and Norway, has worked with young fashion designers for 10 years, sponsoring shows and providing free samples in order to give fur a fashion edge and reach younger audiences.

“Young people are buying fur now, and they’re more educated about where it comes from,” says Diane Benedetti, vice-president of advertising and promotion at North American Fur Auctions. “We’ve worked with environmental conservationists; the industry is heavily regulated. We’ve also tried to communicate our ethical practices much more. People are embracing fur again because of that. They’re seeing it more for it’s environmental benefits. Buying fur is better than buying a polyester jacket you’ll throw away the next minute, and will take 30 years to biodegrade. It’s the opposite of disposable.”

But many designers, including Miu Miu, Chanel and Nina Ricci, have rejected real fur and tried to create a similar luxurious effect with high-quality faux fur. Sarah Curran, founder and chief executive of retail website My-wardrobe.com, says, “We’ve seen an increase in extremely high-quality faux fur, which has featured heavily in the collections of designers such as Jaeger London, Sportmax, See by Chloé and Love Moschino. Around 35 per cent of our coat buy this season includes faux fur.”

Ed Burstell, buying director at Liberty, in London, concurs. “The quality of faux fur has improved so much,” he says, adding that the store had tripled its buy of faux fur pieces from last autumn. “Before it had the reputation for looking cheap, but now you can hardly tell the difference.”

Burstell notes, however, that there is still resistance among consumers to paying the same price as for the real thing. “People don’t realise that it actually works in reverse with faux fur. The process of making really great faux fur is actually more expensive than buying real fur.”