WSJ: The Fixer in the House of Narciso

WALL STREET JOURNAL | RAY A. SMITH

It takes more than a visionary eye for style to turn a fashion designer into a blockbuster brand. It takes a combination of right-brain creativity and left-brain execution.

For women's fashion designer Narciso Rodriguez, it has meant hiring left-brain fashion-industry veteran Robert J. Wichser in May. The label tapped him to be chief executive and resident "suit" at the 15-year-old label. Mr. Wichser's mission is to help the Narciso Rodriguez label regain the business mojo that has eluded it in recent years.

The 51-year-old Mr. Rodriguez became famous overnight as designer of the sleek silk-crepe sheath Carolyn Bessette wore to marry John F. Kennedy Jr. in September 1996. Soon after, he launched his own women's fashion line and went on to be named the Council of Fashion Designers of America's Womenswear Designer of the Year twice, in 2002 and 2003.

Mr. Wichser (pronounced "wisher"), 62, is known as a Garment District fixer, an executive who can help a creative genius get his business act together. His recent projects include stints at Sean Combs's Sean John line and at the John Varvatos label, where Mr. Wichser helped evaluate prospective partners and position the label for a sale to private investors in April.

The suit, or businessman, is recognized as indispensable to a fashion designer's survival ever since the 1960s and '70s, when Yves Saint Laurent was a pioneer of the concept of an international fashion superbrand, in large part because of guidance from his left-brain partner, Pierre Bergé. More recently, Marc Jacobs, Mr. Rodriguez's generational peer, has achieved international sales and acclaim with his own left-brain business partner, Robert Duffy.

An exacting designer, Mr. Rodriguez is known for body-conscious dresses and blouses that skim the figure with the seductive ease of a negligee. But his label has floundered in recent years, stuck in narrow distribution because it has lacked the resources and breadth of offerings that help a designer achieve fast growth at retail.

"You see the success of other designers who have the good fortune to have a solid partner on the business side. It's what I've always desired," Mr. Rodriguez said in a recent interview at his New York studio. "I needed a person to build the brand, someone to grow the company."

Accessories are the name of the game in fashion today, whether it's shoes, bags, housewares or all of the above. And high-low collaborations with retailers, like the one between Target stores and Missoni last year are also increasingly a must. Narciso Rodriguez has had very few of either.

The designer has attempted to expand, and his 2003 fragrance launch was considered a success. But partnerships with two major financial backers, AeffeSpA AEF.MI 0.00% and the former Liz Claiborne Inc., collapsed in 2006 and in 2008, respectively, over disagreements on the brand's direction.

Kathy Kalesti, currently a consultant to small designer labels, was Mr. Rodriguez's 13-year business associate, vice president of merchandising, distribution and sales and then president when she left amicably, according to both sides, about a year after the Liz Claiborne connection ended.

Mr. Rodriguez "really needed someone to objectively come in and figure out how to move the company forward," Ms. Kalesti says. "I couldn't be that and be involved in the product and the wholesale and all of that. It's too big a nut without the right infrastructure."

"It all fell on Narciso's shoulders and there wasn't an infrastructure in place to support the growth of the business," Mr. Wichser says. "There wasn't that expertise within the company."

Mr. Rodriguez tried running the business on his own and concluded he was in over his head. He reached out to Mr. Wichser, hiring him for a three-month consulting stint. The two hit it off, and Mr. Wichser's three-month engagement turned into a year. He left Narciso Rodriguez for the John Varvatos gig, but returned in May as chief executive.

Since then, Mr. Rodriguez has launched shoe and handbag lines, an e-commerce store and, in November, a lower-priced collection with Kohl's stores. Mr. Rodriguez also has signed an agreement with Gap's GPS +0.08% Banana Republic to be a fashion adviser to the chain. His third women's fragrance is expected next year.

Robert Burke, a luxury-goods consultant, said Mr. Rodriguez was wise to get into fragrances back when he did, but his label still "has to make up for lost time" by expanding.

This is a difficult time to enter the competitive accessories market, which is crowded with established brands constantly looking to broaden their price ranges and audiences, as well as younger designers who have started pumping out accessories earlier in their careers. "I hope Bob is the person to do it," Mr. Burke says.

Mr. Rodriguez says he sees Mr. Wichser as more than a suit. "I had a wealth of sketches and ideas we were showing, and they were never being brought to market," Mr. Rodriguez says. "Bob helped pull together teams to help me make those accessories a business and identify the appropriate partners to make the product."

Some of Mr. Wichser's changes met with culture shock. He instituted weekly meetings with all departments, with Mr. Rodriguez's blessing. "Design needs to be in touch with production and sales," the designer says.

At the meetings, Mr. Wichser and Mr. Rodriguez articulated their vision for the company. Previously, Mr. Rodriguez said employees had a sense of the vision, but "Bob made it crystal clear to everyone."

The designer and the CEO met with retailers to get feedback, visited factories and sat in on sales meetings. They introduced fixed deadlines and schedules for everything, including the design process, so products would arrive on retail sales floors at the start of a shipping cycle rather than weeks after it had begun. This way, more merchandise can be sold at full price, with less discounting. "That had a major impact initially on improving the business," Mr. Wichser says.

Deliveries now arrive earlier, says Daniella Vitale, chief operating officer of Barneys New York. "You can see the changes in supply-chain management."

Mr. Wichser said he made the decision to launch the shoes and handbags with Barneys, which has long carried the ready-to-wear collection, rather than a group of retailers buying small amounts here and there. He says he wanted one high-end retailer to make a significant commitment to the label in all product categories, with marketing and "real estate" on the sales floor. Barneys was willing.

Ms. Vitale says price points for the shoes "were a little higher than we would have liked," but overall Barneys has been pleased with sales of the accessories.

Narciso Rodriguez's Spring 2013 collection, shown at New York fashion week this fall, received the kind of raves the label was getting in its earliest days. But this time, the designer can't afford not to capitalize on the buzz.

Mr. Wichser said he aims to make Narciso Rodriguez "a major player in shoes and handbags," with accessories expected to become a bigger business for the label than ready-to-wear clothing. The company is looking at expanding into new areas, like eyewear, intimates, home merchandise and its own retail stores, Mr. Wichser says.

Mr. Rodriguez says he is happy so much has been accomplished in so little time. "It's great when you have someone who listens to what your vision is and makes it happen," the designer says. "There's a new energy at this company."

NEW YORK TIMES: An American in Paris, Again

NEW YORK TIMES | ERIC WILSON

ALEXANDER WANG may be the savviest designer of his generation.

At 28, he is the rising star who built a global multimillion-dollar business in less than a decade, opened his own stores in New York and Beijing and, last week, landed a plum job at a prestigious label in Paris, when he was named the creative director of Balenciaga. Some see Mr. Wang’s appointment as symbolic of the triumph of youth; others see the demise of fashion.

“It was a coup for Alex, and a coup for American fashion,” said Diane von Furstenberg. But, she added, “he’s going to need some mentoring in Paris.”

In a way, it is fitting that Mr. Wang should become the first American designer to take on a big, historic European design house since Marc Jacobs, Michael Kors and Narciso Rodriguez went to Paris in the late 1990s. (Only Mr. Jacobs, with his role at Louis Vuitton, remains there.) While other young designers have occasionally been proposed for such lofty jobs, it is Mr. Wang who most perfectly represents his generation’s more accessible and business-minded approach to fashion. He also reflects the growing prominence of designers of Asian descent who are making their mark on the global stage.

He is young, energetic, engaged, streetwise and generally adorable. And like all great (meaning successful) designers, he recognized a crucial shift in the market well before its impact had been fully realized, in this case how the democratization of fashion would also lead to a gradual devaluation of the concept of luxury. He created a business with estimated sales of more than $60 million by making contemporary T-shirts, sweatshirts and shorts that look remarkably like high fashion. (His company does not release numbers.) Early in his career, when critics said he was too commercial, Mr. Wang said: “I don’t see that as a negative thing. It is something I actually enjoy.”

But it is for the same reasons that his appointment at Balenciaga — nearly a century-old fashion house that was thoroughly modernized over the last 15 years under the considered eye of Nicolas Ghesquière — bothers so many people, or at least the fashion purists. Some established designers, grumbling privately because they did not want to be seen as meanies, see the change as symbolic of a broader watering-down of creativity in fashion.

“They’re not fashion designers,” one New York designer said. “They’re fashion curators. They’re sitting at a computer copying other peoples’ ideas.” Even on Balenciaga’s Facebook page, alongside the many positive comments about Mr. Wang, one fan sniped, with Ghesquière gone, “who will Wang rip-off now?”

Their fear is that PPR, the luxury group that owns Balenciaga, as well as Gucci, Saint Laurent and Bottega Veneta, plans to take the label in a more commercial direction, or that the choice of Mr. Wang, as an Asian-American, was somehow an opportunistic play for the emerging luxury market in China.

Mr. Wang’s command of the Chinese market and his fluency in Mandarin were not overlooked by executives at Balenciaga, but François-Henri Pinault, the chief executive of PPR, said that they were not considered criteria for his recruitment. He nevertheless described Mr. Wang’s heritage as “an extra value,” noting that he will bring more exposure to the brand worldwide.

Responding to the question of handing the keys to one of the most famous names in fashion to a designer so young, Mr. Pinault argued that, when Mr. Ghesquière began designing Balenciaga in the mid-1990s, “he was designing uniforms for Air France, and who would have said that Nicolas would become such a great talent?”

Anna Wintour, the editor of Vogue, who championed Mr. Wang for the job, also scoffed at concerns about his age.

“Oh, please, come on,” she said. “How great is it to be young? That is when designers are at their most fearless. That is when you do your most creative work.”

When Mr. Ghesquière was named chief designer there, in 1997, he was just 25.

ON Nov. 5, in a major surprise, Balenciaga announced that Mr. Ghesquière was leaving. His vision for the house, combining a reverence for the archives of Cristóbal Balenciaga with high-tech fabric treatments and elements inspired by science fiction, was so transformative that Style.com/Print recently described it as “the standard by which other big house revivals are judged.” The business grew to include 62 stores and, Mr. Pinault said, sales have expanded substantially since it was acquired by Gucci Group (as PPR was formerly known) in 2001. But Balenciaga is an expensive business to operate.

There were demands for more commercial styles and reissues of his earlier designs, leading to what retailers described as a confusing assortment in the stores, and, according to several colleagues of Mr. Ghesquière, the designer’s frustration.

Isabelle Guichot, the chief executive of Balenciaga since 2007, said in a telephone interview on Thursday that the role of a designer in today’s industry demands a quality that she called “creative realism.”

Last month, when the company began a search for its next designer, there was a short list of candidates. Christopher Kane, the young English designer who recently consulted on Versace’s Versus collection, was reportedly one of them. Mr. Wang, Ms. Guichot said, was the “top choice.” Mr. Pinault, who makes the final decision on the hiring of designers, approved.

“We’re not asking him to be an entrepreneur,” Ms. Guichot said. “But luxury fashion is a business with some rules, and he understood that very early in his career, without ever compromising the creativity.”

Among the observations made on the hiring of Mr. Wang, who has a strong accessories business, having astutely positioned his handbags at the lowest end of the luxury category, is that PPR was looking for its own version of what Mr. Jacobs brought to Louis Vuitton.

“There were some feelings after what happened with John Galliano at Dior that the brands were promoting the individual designers too much,” the veteran consultant Robert Burke said. “Now they’re thinking, what is it going to take to keep a brand relevant and alive?”

Linda Fargo, the fashion director for Bergdorf Goodman, said there are real “design chops” in Mr. Wang’s collections. Asked about the complaints that he copies, she said: “I hands-down do not agree with that. I think he’s incredibly original.”

MR. WANG grew up in California. His parents, who had emigrated from China, had a successful plastics manufacturing business that they later moved to Shanghai. Among his classmates at Drew in San Francisco was Victoria Traina, who now works in fashion in New York and was a big influence on Mr. Wang’s look, often described as “off-duty model” for its slouchy ease and street-wear feeling. Beginning in 2002, he attended Parsons the New School for Design for two years, while working as an intern at Vogue and for the designer Derek Lam.

Then, like many now-famous designers have done, he dropped out to start his own fashion label. With his sister-in-law, Aimie Wang, he started a line of sweaters: six pieces that were sold on consignment. The reaction was so strong that Mr. Wang had a full ready-to-wear collection by 2007, when he became one of the hottest names on the New York fashion calendar. His family remains involved in the privately controlled business, which now has about 140 employees. He will continue to design his own label.

And there was never really any question that it would be that way. Ms. Wintour recalled Mr. Wang’s appeal for the CFDA/Vogue Fashion Fund award (a prize he won in 2008). “He was so articulate,” she said. “He said he wants to dress the girls of his age and his generation. That’s what you see in everything he does. He lives and breathes the Alex brand.”

Ms. von Furstenberg, who was assigned to mentor Mr. Wang after the competition, recalled walking into his showroom for the first time. “There wasn’t very much there, but it was all very clear,” she said. “His clarity is part of his talent. He knows who he is.”

Part of Mr. Wang’s appeal is his connection to the street. He associates with the cool photographers and provocative musicians, and despite showing at the beginning of each season, has his radar attuned to the models of the moment. These qualities were also attractive to Balenciaga. Mr. Ghesquière is one of the best designers at adapting the reality of the everyday life with a strong vision for modernity, and Mr. Pinault said he expects Mr. Wang to build upon that legacy.

Making it profitable will also be important. Tapping into emerging markets like China, India and Brazil will be crucial. In New York last week, while not going so far as to say Mr. Wang was hired because of his heritage, Mr. Pinault gave the impression that it was an advantage.

Increasing profits in countries where luxury is a mature business is very tough, Mr. Pinault said. But in China, where the potential is so strong that economic growth of 5 to 7 percent is seen as a bad year, the possibilities are endless. Making a profit there, he said, “is an easy job.”

FASHION MAGAZINE: It's Personal

FASHION MAGAZINE | AMY VERNER

When the Louis Vuitton Maison opens its impres- sive doors in Toronto this fall, those with an itch for something exceptional can head straight to the store’s second floor—after making the requisite appoint- ment. There, a plush private salon has been allocated to the Haute Maroquinerie, a special-order handbag service offered in only six locations around the world. Five handbags— three of the brand’s beloved styles plus two new silhouettes—can be fully customized in eight leathers and skins and 27 colours. Vuit- ton has done the math so we don’t have to: this equals 40,000 unique possibilities. It’s an altogether different proposition than buying a classic monogram style straight off the shelf—not that there’s anything wrong with that. But as luxury brands become increasingly accessible with more stores, more product and more demand, mass customization has gradually become a means of enhancing exclusivity.

Christian Dior officially began a made-to-order service for its Lady Dior, Miss Dior and Diorissimo handbags in 2010. Given the choices of style, size, finish, fabric and colour, more than 1,000 permutations are possible. This fall, Gucci is expanding its made-to-order program, now available in Canada with an expanded range of models. Three of Gucci’s greatest hits (the New Bamboo, New Jackie and Stirrup) can be tricked out to ultra-luxe levels. Crocodile can be ordered with a shiny, matte or metallic finish. Don’t like shiny gold hardware? Swap it for silver, or better yet, antiqued gold or silver. Initials embossed in gold, silver or dry-stone can be added to the bag’s interior. The final product is delivered in special packaging with made-to-order script.

Last month marked the debut of Ferragamo Travel, a made-to-order luggage collection from Salvatore Ferragamo available in various colours and materials, ranging from dura- ble canvas to exotic skins. If committing to customization is too overwhelming (or expen- sive), you can at least play around on Burberry’s website, where a user-friendly interface allows you to create a customized trench coat. With Burberry Bespoke, one person’s classic is another’s street-style savvy, especially given such options as fuchsia Haymarket check lining, brass finish buttons, studded collars and leather epaulets.

Bear in mind that for every set of hands that touches a Vuitton Noé draw- string bag in the Asnières workshop in France or a Gucci New Jackie tote in Italy, there’s still a basic template that allows for efficient, modernized production. This evolution in accessories melds savoir-faire with specialty manufacturing and enrobes the result in a supple layer of cachet. In turn, this generates desire. “Fashion is the ultimate snobbism—if people see too much of [something], they lose interest,” says Robert Burke, a fashion retail vet- eran who now helms luxury consultancy Robert Burke Associates. “Customization or, ultimately, bespoke is a way to main- tain attention.”

You don’t need to be a fashion consultant, a venture capitalist, a global trend spotter or Douglas Coupland to observe that we are living in an age of mass cus- tomization. Consider how much we already customize: our coffee, our salads, our playlists, our Twitter streams. A handbag designed to our specifications simply represents a rarefied level of have-it- our-way consumerism. But personalization and customization (or made-to-order) mean differ- ent things. Although they are used interchange- ably, the former refers to a less labour-intensive way of adding a unique flourish. Vuitton’s Mon Monogram service, first introduced in 2008, allows people to add their initials or colourful stripes to the Speedy, Neverfull and Keepall bags—similar to the personalized lettering that’s long been offered by Goyard. Prada fol- lowed suit last January with a blocky Saffiano leather alphabet that could be applied to totes, backpacks and luggage.

By comparison, customization veers closer to bespoke. Think of Hermès, where spe- cial-order bags are part of the brand’s dna. Sophie Doran, a Paris-based editor at the Luxury Society, which bills itself as the most influential online community of top luxury executives, says customization appeals to high-net-worth individuals seeking to “truly differentiate themselves from the crowd,” as well as aspirational consumers who crave the next hot thing. “I imagine that it would give the aspirational consumer a feeling of satisfaction, and potentially pride, in knowing they took that extra step in their luxury purchase.”

Not surprisingly, customization comes at a premium. Ferragamo’s sleek trolleys begin at $1,500 and top out around $20,000 for alligator cladding. Entry prices for Haute Maroquinerie orders are in the high four-figures. As much a consideration as price is time. Customization generally requires an average wait of six months.

For many luxury brands, personalization isn’t new; in fact, it’s part of their heri- tage. In the mid-1800s, Louis Vuitton built his business on custom-order trunks, anticipating an explosion of leisure travel. The luggage specifications were modi- fied according to each customer’s trousseau. Jennifer Carter, president and ceo of Hermès Canada, half-jokingly notes that the first Hermès client in 1837 was a horse, and that every order at the time was singular in its specifications. She goes on to explain that the first silk scarf was born from a custom order. Ditto the ties. The Birkin bag did not exist before it was designed for actress ⁄singer Jane Birkin. Each time, however, the one-off turned into a mainstay. “Customization is firstly for us about taking care of clients and about service, and it has been since day one,” she says. “But it has also contributed to the Maison’s creativity because it gives us ideas.” Doran agrees that customization is “a nod to the golden days”—with a caveat. “I’m not sure the current services take the idea far enough to be returning the status quo to true luxury,” she says. “If anything, they are opening up another facet of some- thing once reserved for the affluent to the masses, and potentially threatening its meaning.” Burke isn’t concerned about customization being taken too far, mainly because many brands lack the infrastructure to execute specialized orders. “It’s not natural in quick-turning fashion to offer customization, and I’m not sure it would even make sense,” he says. Even so, retailers like J. Crew and C. Wonder—the latest fashion venture from Chris Burch (Tory Burch’s ex-husband)—offer monogram ser- vices for everything from pyjamas to pillows. When brands invite customers to be involved in the design process, the experience forges a connection that is not possible in conventional transactions. But Doran wonders if this trend toward personaliza- tion will threaten the exclusivity factor within the luxury goods world: “Yes, it gives consumers a story to tell, but what happens when everyone has the same story?”

BLOOMBERG: Neiman Marcus to Macy's Trend into China as far as Web: Retail

BLOOMBERG | COTTEN TIMBERLAKE

As Neiman Marcus Group Inc. prepares to start selling its wares in China, the U.S. luxury retailer isn’t opening stores. It’s setting up shop on the Web.

Neiman Marcus, Macy’s Inc. and Milly, the women’s clothier, are all tiptoeing into China -- striking partnerships with local Web entrepreneurs because opening stores there is expensive and complicated.

The moves coincide with slowing economic growth in China that has prompted shoppers there to pull back. Still, Neiman Marcus is making a long-term bet on the world’s most populous consumer market, Chief Executive Officer Karen Katz said in an interview.

“We believe the Chinese economy, like every economy, is going to have ups and downs,” Katz said. “We know that long-term the potential of the luxury consumer is tremendous. There is still quite a big opportunity there.”

Even with the slowdown, online sales will triple to more than $360 billion by 2015, predicts Boston Consulting Group. The number of Internet users will grow to 700 million from 500 million, it said. China’s luxury market will grow by as much as 22 percent this year, by far the fastest rate of any region, according to Bain & Co., also a consulting company.

The deals with local companies mean Macy’s and Neiman Marcus can learn more about Chinese shoppers’ buying habits before deciding whether and how to scale up. The strategy is also cost effective. Macy’s is spending about $15 million on its China Web venture; by contrast it is lavishing $400 million on a renovation of its New York flagship store.

Spending Appetite

“It’s a very clever way of dipping their toe in the water,” said ROBERT BURKE, whose namesake consulting firm is based in New York. “What’s driving it is the sheer numbers. The number of consumers and their appetite to spend is going to be highly attractive to retailers and brands.”

In its first international foray, Neiman Marcus, owned by Warburg Pincus LLC and TPG Capital, is developing a new namesake e-commerce website with a Hong Kong-based partner. Neiman Marcus plans to start the site in China with Glamour Sales Holding before the Chinese New Year in January, CEO Katz said. The Dallas-based retailer has invested $28 million in the closely held Chinese company. Macy’s, the second-largest U.S. department-store chain, will begin selling an assortment of its moderately priced I.N.C. apparel on www.omei.com next spring. It made a $15 million equity investment in the parent VIPStore Co.

Learn First

“International expansion is of long-term interest to us,” Jim Sluzewski, a spokesman for Cincinnati-based Macy’s, said in an e-mail. “But we want to learn as much as we can before making substantive decisions about the future.”

Shangpin.com, a website that says it sells authorized, current-season international designer and contemporary goods at full price, debuted this month. Milly and Tracy Reese, whose fashions are worn by Michelle Obama, are among 80 brands selling their goods through the site, whose Mandarin name means “fashion” and “quality.”

Sensing opportunity, private-equity firms are investing in Chinese e-commerce. Shangpin has attracted $60 million in capital from international investors including Walt Disney Co.- backed Steamboat Ventures. Warburg Pincus and KPCB China invested $120 million in fashion e-tailer www.xiu.com last year.

These Web-only ventures face several barriers. Brand recognition remains low in China, while shoppers prefer to see the actual products and are leery of receiving counterfeit goods, Burke said. They also are reluctant to spend large sums online, said Claire Chung, a vice president for global business development for Shangpin. The country’s average online transaction size is the equivalent of $31, she said.

Educate Consumer

“We are going to have a lot of work to do to educate the consumer about Neiman Marcus,” said Katz, 55. “What is important is this message of history, heritage and authenticity because they don’t know our brand.”

To that end, the Neiman Marcus site will work to be a kind of personal shopping guide.

Milly NY CEO Andy Oshrin said he had been reluctant to enter the Chinese market before he found the right partner in Shangpin. The e-commerce approach is a better alternative to building the Milly brand in China himself with expensive stores and marketing, he said. Online sales of Milly’s colorful, print dresses already tend to outperform those in stores, he said.

“It was a way to enter China strategically,” Oshrin said.

China has its own tastes and quirks. Shoppers prefer washable clothing because dry cleaning is less available, said Winnie Foon, a Shangpin vice president for global merchandising.

Mix Match

There is greater demand for medium sizes in the northern part of the country, and for small and extra-small in the south. Chinese women love dresses because they don’t require the mixing and matching skills that separate skirts, blouses and slacks do. They traditionally have worn fine jewelry, and are just discovering how to wear fashion jewelry, Foon said.

Www.neimanmarcus.cn will offer full-price, current-season fashions specifically pitched to the Chinese luxury customer by a Shanghai-based chief merchant, Katz said. Because Chinese men are avid luxury consumers, Neiman Marcus’s Chinese Web store will carry a larger assortment of men’s merchandise than the U.S. site. Ditto for shoes and handbags.

While Chinese consumers have been interested in merchandise from well-known brands with logos, they’re learning to be more sophisticated, more “in-the-know,” Katz said.

“That shift really plays into where our strengths are,” she said. “We are great editors of product.”

Free Shipping

Shangpin, which is hiring stylists who can provide fashion advice on the phone, is offering free shipping within two days. In major locations, a courier will wait for the customer to try on the items and will take them back if they don’t suit.

“We now have a new generation of Chinese women, of professional women,” Foon said. They are “looking for clothes for the office, for the weekend.”

Designer labels Jimmy Choo, Alexander McQueen and Brunello Cucinelli have signed on to the Neiman Marcus site. They’ll ship their merchandise directly to a warehouse in Shanghai, which will then distribute it to the online customer, Katz said.

It will be difficult for Chinese e-commerce ventures to replicate the customer service that American online shoppers enjoy, including quick delivery to remote locations, and easy returns, said Michael Appel, a director at AlixPartners LLP, a consulting company in New York.

“There is the whole logistical issue,” Appel said.

“China is a very big place.”

Still, the Web ventures may benefit from the cooling economy, Appel said. Shoppers who’ve developed a taste for luxury goods may be less likely to go on shopping sprees to foreign or Chinese cities and will shop online instead, he said.

WSJ: Quick, Design More and More

WALL STREET JOURNAL | RAY A. SMITH

Fashion designer Jason Wu lovingly refers to a handbag, the Daphne, as one of his label's "classic bags." The bag isn't from decades or even years ago: It made its debut in stores last year. This "classic" represents the new, faster cycle of designer goods.

Mr. Wu, along with other young designer labels, are quickly adding collections of bags and shoes, launching secondary lines or small collections for other brands. Some are opening their own stores and expanding abroad much earlier than their predecessors did. In the process, they are upending fashion's playbook.

The voracious appetite for newness from retailers, fashion magazines and the fashion blogosphere is also pushing younger designer labels to grow up much faster than labels that launched in the 1980s and '90s. Unlike other industries, it isn't production breakthroughs spurring the pace of product launches. Instead, the change is more about the style sector's lightning-speed buzz factor: Today's wannabe is tomorrow's in-demand designer who is increasingly striking with new lines while the iron is hot.

By moving quickly, young labels also risk overexposure, diluting their reputations and, by having their hands in too many things too soon, sacrificing quality. Expanding into accessories and other categories also generally requires investment in staff and production, putting additional financial strain on these young often fledgling labels. The alternative is to sign up with a licensing partner and hope the product will be consistent with the designer's aesthetic and standards.

This faster pace will be on display at New York Fashion Week, which starts Thursday. Accessories have proven lucrative growth engines for the luxury-goods industry. While it has become customary for established designer labels with long careers to present accessories during this week, more recent fashion labels like those of Mr. Wu and Alexander Wang—who launched bags in 2008, just one year after debuting his women's collection—are cranking out accessories and splashily sending them down the runway.

Mr. Wu, 29-years-old, plans to debut a new line of bags on the runway Friday. He is known for a polished, ladylike style and presented his first ready-to wear-collection in 2006. Just two years later he launched a Resort collection in addition to Spring and Fall lines. His breakthrough moment arrived in January 2009, when first lady Michelle Obama wore a custom-made, ivory silk-chiffon Jason Wu gown to the inaugural balls. A flurry of activity followed, including an eyewear collection with Modo in fall 2009, two capsule collections—a sort of mini collaboration—for clothing line TSE, a nail-polish collaboration with CND and a cosmetics collaboration with Supreme Aupres in 2010. Mr. Wu's handbags and shoes debuted in stores in 2011. This year, he made a candle with Nest fragrances, as well as a collection of clothes, handbags and scarves for Target. His secondary line, Miss Wu, is set to arrive exclusively at Nordstrom stores in January. All the while, he produces four Jason Wu ready-to-wear collections a year.

"You can't just follow the path of designers before," Mr. Wu says of his generation of designers. "It was a different world then."

Marchesa, a label known for lush and intricate evening gowns, launched a diffusion, or secondary, line called Notte by Marchesa in 2006, two years after launching its main line. It has since launched a handbag line, wedding dresses, a tabletop collection with Lenox, and a limited-edition cosmetics collection with Le Métier de Beauté. The brand plans to launch a fragrance this week. A "contemporary line" featuring more daywear is set to debut in 2013.

Phillip Lim opened a New York store a little more than a year after debuting his women's line, 3.1 Phillip Lim, in 2005. Two stores, in Tokyo and Los Angeles, followed in 2008. The label then opened stores in Seoul, Singapore and Hong Kong. The stores were partly a way for Phillip Lim to control the way he wanted his line to be presented.

"I'm not sure if we were supposed to do that or not," says Wen Zhou, chief executive of Phillip Lim, referring to the opening of a store so soon after launching. "We just said, 'we can do that.' We didn't look at other brands, at how they opened stores," she says. "It might seem fast or quick but it felt right at the time. We don't follow any playbook." The label launched bags and shoes early last year.

By contrast Narciso Rodriguez, in business with his own line since 1997, just launched shoes and bags earlier this year.Marc Jacobs, who launched his women's collection in 1986, opened his first store in 1997 and started selling a diffusion line, Marc by Marc Jacobs, in 2001. Donna Karan launched her separate DKNY line in 1989, four years after the debut of her main collection. She opened her first DKNY store in 1994 and her Donna Karan Collection store in 1996. (Donna Karan offered accessories from the beginning.)

To be sure, each fashion house has different reasons for the timing of, say, an accessories line or a store. Still, these days, it is the rare designer label that can afford to ignore accessories or other brand extensions.

"If you look at 15 years ago, you did your main line, after five years you do an accessories line, you could end up doing a secondary line and save the fragrances and sunglasses for the end of expansion," says Robert Burke, a luxury-goods consultant and a former fashion director at Bergdorf Goodman. "Today those rules don't apply," adds Mr. Burke, who has advised young labels including Mr. Wu's.

"People like Ralph Lauren and Giorgio Armani took a generation to develop their reputation in apparel before starting accessories. Now if somebody is hot very quickly, they want to exploit it pretty quick," says Arnold Aronson, managing director, retail strategies at consulting firm Kurt Salmon. "You can do it but you have to say to yourself is my career as a designer going to be a marathon or a 50-yard dash?"

Both Target and Nordstrom approached Mr. Wu about doing less-expensive lines a couple of years ago, but he declined, thinking the timing wasn't right, he says.

He eventually launched a line with Target, in February, which "showed me that there was really an appetite for my design," at lower prices, and making him reconsider the Nordstrom offer, he says.

"There are some things that I cannot or will not make for my collection because it would not be the right price point, like a T-shirt. [But] there was a price point I was not reaching," says Mr. Wu of the Nordstrom deal. Jason Wu's dresses average $1,595 while Miss Wu will reportedly range from about $200 to $800.

U.S. sales of women's bags and luggage rose 6% to $9.92 billion in the 12 months ended July 31, according to market researcher NPD. That compared with a 4% rise to about $108.28 billion for women's apparel. Sales of women's fashion shoes rose nearly 3% to $17.45 billion.

Mr. Wu says launching bags and shoes last year "allowed us to reach out to a broader audience that knows Jason Wu" but may not be able to comfortably afford his ready-to-wear clothes, where prices range from $595 for knitwear to $6,360 for an evening gown. By contrast, Jason Wu bags range in price from about $1,500 to about $3,000. Shoes cost $630 to $1,470.

Gustavo Rangel, Jason Wu's chief financial officer, says the label's shoes and bags already represented 17% of the closely held company's sales last year. He expects them to represent 25% of sales this year and 40% in the next few years.

Mr. Wu conceded that as a clothing designer, he lacked the skills to produce accessories. "I had to learn from the ground up," he says. He has since hired a two-person design team for accessories. The eyewear collection is licensed out.

Mr. Wu says he can appreciate some observers may feel he's juggling too many balls. "It's only too much when there's no market for what I do," he says. "If there's a legitimate market for Jason Wu, why not?"

FINANCIAL TIMES: Only in America

FINANCIAL TIMES | VANESSA FRIEDMAN

Is there such a thing as “American fashion”? I don’t mean “American designers”, they clearly exist; or fashion made in America – that issue can be left to the politicians in Congress. No, I am talking about the more complicated question of contemporary aesthetic identity. Once upon a time, according to veteran US designer Michael Kors, “Paris stood for fantasy, Milan for luxury tailoring, London for quirkiness and New York for pragmatism”.

But, as the 2013 spring/summer womenswear shows kick off in New York, it seems an appropriate time to ask if there is such a thing as a national aesthetic any more? Can such a thing exist in a high fashion world where brands sell to clients who might live in Moscow or Beijing, shop in Paris and work in New York; where a company such as Paco Rabanne can have its headquarters in France, be owned by a Spanish company, and have, as it did at one point, an Indian designer; where ultra-Parisian label Yves Saint Laurent has chosen as its new creative director Hedi Slimane, who is planning to do his job many time zones away in Los Angeles; and where Brits Victoria Beckham and Stella McCartney can hold their ready-to-wear shows in New York and Paris respectively.

The obvious answer would seem to be no. But the real answer, surprisingly, is yes – at least as far as America is concerned. What’s more, American fashion is getting clearer, not fuzzier. Robert Burke, founder of an eponymous brand consultancy and former fashion director of Bergdorf Goodman, says: “There hasn’t been a moment like this in New York fashion since the Ralph/Calvin/Donna years [of the mid- to late-1980s].”

This is not necessarily symptomatic of wider fashion world trends: British fashion is not becoming more identifiably British than before, for instance. But a combination of factors – such as the blurring of old dress code rules, the rise of high street fashion, and the recession – has helped to create a new group of New York-based designers with a shared aesthetic. At its heart are clothes combining the simplicity of separates with luxurious and texturally rich materials and construction.

Think, for example, of Reed Krakoff’s green silk sleeveless dress piped in racing stripes of black leather with a subtle drape at the waist created without the aide of a belt ($1,590, worn by Charlize Theron among others); or Michael Kors’ lace and stretch wool-crêpe dress ($2,395), the lace offering a peekaboo effect in an otherwise simple silhouette. Think of Mary-Kate and Ashley Olsen’s label, The Row, and their military-style ribbed wool jacket with three rows of steel buttons instead of the usual two ($1,790). Think of Narciso Rodriguez’s white silk crêpe dress with black inserts for silhouette shaping ($1,695). All these clothes share an externally pared-down but internally pumped-up sensibility.

What to call this new movement? “I think luxury sportswear is the right term,” says Simon Collins, dean of the school of fashion at Parsons the New School for Design in New York (and, as it happens, a Brit). This term was once considered an oxymoron – luxury being by definition exceptional, rare and fragile, and sportswear being by definition easy, functional, utilitarian and basic – but in the modern world it makes high/low fashion sense. (Sportswear, of course, does not mean clothing for sport, but rather a form of dressing invented in America in the 1930s that, according to an essay by Richard Martin, former curator of the Metropolitan Museum’s Costume Institute, involved rethinking “fashion from its very roots, not simply paring away some of the accretions of traditional prettiness but establishing a new standard for a practical, modern style in accord with the lives of the women”.)

“Sportswear was always about separates,” says Collins. “And that is how everyone dresses now. The power suit has gone out of the window.”

In the early 1990s, when I briefly worked at American Vogue, even Anna Wintour wore skirt suits to the office; for the past 10 years, I can’t remember seeing her sitting in the front row of a fashion show in anything other than a full skirt and cardigan, or sheath dress. Michelle Obama, too, has eschewed suits in favour of printed dresses and cardigans. “We call them ‘editor-in-chief’ dresses,” laughs Kors. “When the word ‘sportswear’ came up in the fashion context, you used to get all this snide, ‘Isn’t that jeans and T-shirts?’ But not any more. People understand it means ease, and even an evening gown can have that.”

The shift has been acknowledged at industry level. At this summer’s Oscars of the US fashion industry, the Council of Fashion Designers of America (CFDA) awards, The Row beat Marc Jacobs and Proenza Schouler to take home the award for womenswear designer of the year; Reed Krakoff won accessory designer of the year, ahead of It bag darlings Alexander Wang and Proenza Schouler. The awards are voted for by the fashion community at large, so it’s effectively a jury of peers.

Coming on the heels of Michael Kors’ $944m initial public offering last December, the biggest IPO in American fashion, these awards seemed to announce the beginning of a new stage in American fashion. As Steven Kolb, president of the CFDA, said: “I think it’s an acknowledgement that what has always been the defining element of American fashion has evolved.” Put another way: there is a reason shares in a company run by Kors, effectively the father of luxury sportswear and someone who can make a camel pencil skirt look ineffably expensive, have more than doubled in price since the IPO; and a reason why Bloomberg recently ranked it the number one public offering of 2011.

There is, of course, more going on in New York fashion than luxury sportswear. Designers such as Proenza Schouler, Marc Jacobs, Oscar de la Renta and Kate and Laura Mulleavy of Rodarte all have highly relevant, lauded individual visions that resonate globally; the CFDA also acknowledged the rise of mid-range American contemporary market brands such as Rag & Bone, Theory, Helmut Lang, J Crew and Tory Burch and gave Andrew Rosen, godfather of the contemporary market, its Founders’ award. But what sets apart the sportswear movement is its visible embrace of an American fashion continuum, and its cohesion.

The period Robert Burke calls the “Ralph/Calvin/Donna years” was, indeed, the last time US fashion presented a coherent face to the world. This wasn’t because Lauren, Klein and Karan shared the same aesthetic – they didn’t and still don’t – but because their work was joined by a certain shared value system, built on words such as “easy”, “simple” and “functional”. It made for a hattrick of American fashion power that hasn’t been equalled since. All are, of course, still in business and bigger than ever – but they have become the establishment; the expected.

This aesthetic – call it power sportswear – was also rooted in the times: Karan and Klein, in particular, made power clothes for women who wanted to work their way to the top. It was stage two of the revolution launched in the 1940s by Claire McCardell and Bonnie Cashin, when they helped shirtwaists and other intrawar pieces transcend their origins with an injection of easy elegance, offering a local alternative for the first time to the European vision of fashion – one that was not rooted, as Simon Collins points out, in “dressing for court” but in functionality and relative informality. This was later adopted and adapted in the 1970s and early 1980s by Liz Claiborne and Anne Klein, who brought “American fashion” to the girl on the street.

Yet the roots of what Reed Krakoff describes as sportswear’s “third generation” took hold only recently. “I date it back about five years,” says Burke. “When American designers stopped trying to be Italian or French.”

The recession-hit 1990s, with its adoption of grunge, deconstructionism and Pradian minimalism, seemed to confuse American fashion, with its focus on functionality. It was, says Collins, a time when New York was very Europe-facing.

Though many terrific designers – including Marc Jacobs and Tommy Hilfiger – became famous in that period, their work was marked by an individuality that often made New York fashion week as a whole seem oddly diffuse; there were so many conflicting points of view on display, it was hard to figure out what the message was or what the city stood for, sartorially speaking. Indeed, for a while it seemed that was the message: it’s a global world, there isn’t any metropolitan story. Fair enough. But then something changed.

“I think the rise of high street [fashion] had a lot to do with it,” says Valerie Steele, director and chief curator of the museum at New York’s Fashion Institute of Technology. “Because the whole idea of sportswear got appropriated by fast fashion, so designers had to figure out what their value-added would be. Their first reaction was to make their clothes fancier – more Parisian, if you want – but then they realised: first, during a recession, being experimental is not necessarily the right answer; and, second, if you make your clothes better – better fabrics, construction, raise them to the level of luxury – that is the point of difference. You can’t knock off incredible fabrics.”

Collins agrees. “It is about elevation, as opposed to taking something from high to low” – the flipside of high fashion brands collaborating with the high street.

It is also a response to the straitened economic times, which have created a groundswell of demand among the still-moneyed classes for more discrete, less public luxury: the sort of indulgent garment that speaks to the wearer but not the watcher by dint of its fabrications and fit – which is to say, luxury sportswear. A double-faced cashmere sweatshirt does not look all that different, at first glance, from a regular sweatshirt but its feel and cut adds an extra dimension.

Krakoff, who started his eponymous brand in 2010, says, “I looked at sportswear and thought, ‘As it is, it can’t be done any better, so what can we do next?’”

The answer, it seems, was to combine the building blocks of historical European luxury and the American tradition. Kors, who worked in Paris from 1997 to 2003 as creative director of Céline, says he was very struck during this period by the fact that “for all the French tradition and talk about couture, French women, on a daily basis, dress in separates.” It was knowledge that would inform his own collection.

“If I stand in any of our stores around the world,” says Kors (and he has 321), “I don’t really see a difference between what someone in Brazil wants, and someone in Chicago, and someone in Shanghai.” He believes the emergence of luxury sportswear as an aesthetic was an inevitable effect of sartorial barriers coming down. For decades, he says, if you went to a department store, “designer sportswear” and “couture” would be separated, and clothes sold as “ensembles”. That’s not true any more.

And just as those old boundaries blurred, so did all the rules about price points (it is now almost a point of pride for women to shop the high street and haute couture at the same time) and about what constituted daywear and evening wear. Jenna Lyons, J Crew’s creative director, went to May’s Met Ball, New York’s social event of the season, in a cropped denim jacket and long pink satin skirt. “Today, serious evening gowns often seem very old,” says Steele.

“Clothes are no longer so delineated,” says Krakoff; weekend and office wear have become almost interchangeable. “It’s more a point of view, as opposed to a classification.”

“We think about mobility a lot in terms of our collection,” says Kors. “Here’s a piece: how many different ways can you wear it?”

“People used to be very disparaging about this kind of fashion,” says Collins. “But it takes an enormous amount of confidence to be able to make something that is so apparently simple but, nevertheless, is made from the most extraordinary materials and costs a huge amount of money. And that confidence, in the end, I think of as a very, well, American quality.”

BLOOMBERG: Macy’s Leads Industrywide Shoe Expansion on 50% Margins

BLOOMBERG | COTTEN TIMBERLAKE

Macy’s Inc. (M) is opening what it calls the world’s largest women’s shoe department at its New York flagship store beginning this month. Barneys New York Inc. just opened a unisex shoe floor, and Saks Inc. (SKS) is expanding its 10022-SHOE concept at its main store and rolling it out to more branches.

Retailers are expanding and enhancing their shoe departments because the footwear business has become so lucrative, with sales per square foot and profit margins that top other categories.

A new generation of designers such as Tabitha Simmons is driving demand, following predecessors including Christian Louboutin, who made designing shoes cool, said Saks President Ronald Frasch. High fashion is coming into ladies’ shoes at prices as low as $100, and the most extreme designs are being adapted for mass consumption by reducing heels to 2 1/2-inches from 5 inches, said Deborah Rudinsky, a footwear-market analyst for Doneger Group, a New York-based trend forecasting firm.

“The shoe can take the center stage and lead the outfit,” said Robert Burke, founder of a namesake luxury-goods consulting firm in New York. “The interest level has continued to grow. I would say it is here to stay.”

The trend was born in the late 1990s and early 2000s, whenHBO’s “Sex and the City” made designers Louboutin, Manolo Blahnik and Jimmy Choo household names. Blahnik’s open-toed Sedaraby d’Orsay pumps and the red soles on Louboutin’s covered platform shoes became icons beyond the New York fashion world.

Recognizable Details

“It became visually apparent from 50 feet that someone was wearing Louboutin,” Burke said in a telephone interview. “It was a detail recognizable not just to the fashionistas, but the husband of the fashionista and the general public.”

Designers Roger Vivier, Walter Steiger and Giuseppe Zanotti helped stretch notions of how to marry form and function, paving the way for new designer names, including Simmons, Alexandre Birman and Nicholas Kirkwood. Jeffrey Campbell and Sam Edelman, who sell fashion shoes at $100 to $200, have helped make the trend more affordable.

Sales of women’s fashion footwear grew 1.1 percent to $21.9 billion in the 12 months ended in June, according to Port Washington, New York-based market research firm NPD Group Inc. While that lags behind the recent growth rates of 4.2 percent for apparel and 7 percent for handbags and luggage, shoes perform well in terms of store productivity and profitability.

“There is no question that shoes are the most productive in terms of sales per square foot,” Muriel Gonzalez, a Macy’s executive vice president, said in an interview, while declining to provide figures. The Saks flagship’s shoe floor in New York is surpassed in productivity only by the main floor, Frasch said in a telephone interview.

Shoe Margins

Shoes and handbags have gross margins as wide as 50 percent at luxury department stores, while women’s apparel has a maximum of 45 percent, according to Kurt Salmon, a New York-based retail consulting firm.

Improving the chains’ profitability through shoe sales may boost their shares’ relative values. Macy’s shares trade at a 40 percent discount to the 32-company Standard & Poor’s 500 Retailing Index on a price-to-earnings basis, according to data compiled by Bloomberg. Saks’s premium to the index has shrunk to 32 percent from this year’s high of 72 percent in January.

The retailers are pulling out the stops to make the shoe shopping experience what Frasch calls more “emotional.”

Macy’s is adding a Champagne and chocolate bar in the shoe department at its Herald Square flagship and is hiring runners to bring shoes to sales associates wielding handheld devices. Saks is adding a camera that will be pointed at shoppers’ shoes and display the images on a screen. Barneys New York has added more obscure designers who appeal to shoe fetishists.

300,000 Pairs

Macy’s 63,000 square-foot selling and stock space on the store’s second floor will carry 300,000 pairs of shoes, feature a designer shoe salon, bigger shop-in-shops for brands such as Coach and Michael Kors and include shoe closets inspired by New York neighborhoods such as the Upper East Side and SoHo. Women’s shoes had commanded 54,000 square feet on the fourth and fifth floors.

“We see a high degree of passion among our customers for shoes,” said the Cincinnati-based chain’s Gonzalez. “We wanted an opportunity to pull it all together in one cohesive statement.”

Saks, based in New York, is adding 7,000 square feet of selling space to its Fifth Avenue flagship’s 8th floor women’s shoe area and has created such 10022-SHOE departments at 11 of its stores with a plan to expand that to 15.

Women’s shoes accounted for 12 percent of Saks’s sales last year, compared with a combined 8.5 percent for men’s and women’s footwear in 2006, the year before the retailer opened its first 10022-SHOE department, named after the special New York zip code Saks obtained for it.

Barneys Department

Barneys New York in mid-July opened its new combined 22,000 square-foot, fifth-floor designer shoe department, adding 350 styles and increasing women’s space by almost 60 percent and men’s by almost 40 percent.

Shoes are less prone to markdowns because footwear is increasingly season-less -- women now even wear boots in the summer -- and ageless, with styles appealing to teenagers and older customers alike, Rudinsky said. Shoes also are easier to fit than clothes and can be worn more often.

Shoes are so prominent now that women increasingly are buying outfits to go with their shoes, rather than vice versa, Frasch said. Fashionistas, for example, have been pairing neutral clothes with currently popular neon shoes.

Designers are expressing themselves with bows and other embellishments, animal faces, signature heels, exotic skins and unusual combinations of materials, Burke said.

“It’s not just the stores that are a lot more open- minded,” said Simmons, the 39-year-old New York-based, U.K.- born designer whose shoes are known for corset-inspired lace-up backs. “The consumer wants to try new things.”

WWD: Kazakhstan: Luxury's Next Golden Market

WWD | CATHERINE BLANCHARD Everyone seems to be headed to Kazakhstan.

The oil-rich country bordering the Caspian Sea and Russia is attracting a slew of designers and retailers eager to tap into its newly wealthy consumers. Saks Fifth Avenue will open a store there this fall, while brands such as Hermès, Louis Vuitton, Eskandar, Ralph Rucci, De Beers, Tiffany and Harry Winston are sold there or have their own stores. Even Children’s Place and Steve Madden have opened stores in the country, the world’s ninth largest in terms of area.

They all see Kazakhstan as a fertile market, up there with China and Brazil. A.T. Kearney’s 11th Global Retail Development Index earlier this year ranked the country as the 19th most attractive market for retail development which, while down from 14th the previous year, was still ahead of Russia at 26th.

“It’s probably what Russia represented to brands eight to 10 years ago,” said Robert Burke of Robert Burke Associates. “It will be a very good market for luxury brands.”

Burke said that only about 5 percent of the market for luxury in Kazakhstan is from tourists, meaning most of the sales are to residents. Consumers there travel a lot, so they are aware of luxury brands and are becoming increasingly sophisticated fashion consumers. “When I first went there four or five years ago, every major brand was represented — Alexander McQueen, Giambattista Valli and others weren’t so far off what you would see in a U.S. department store. Kiton probably had 250 to 300 sleeves hanging.”

n 2011, salaries grew 7.5 percent in real terms compared with 2010, reaching 77,464 tenge ($532), according to Kazakhstan State Statistics. Workers in the financial, insurance, scientific, technical and mining industries often earn more than twice the national average (from 158,600 tenge for financiers to 142,900 tenge for miners).

According to Dana Akhtayeva, a stylist based in Karaganda, the economic upswing is not the only reason Kazakhs are spending on fashion. “Along with economic growth, and despite the [economic] crisis, people in Kazakhstan have begun to understand the psychological aspects of self-image,” Akhtayeva said.

“Buyers, especially women, are active in learning about brands and trends. Still, often the brand name plays a crucial role.…Some want the brand names front and center, in the most visible spot on their bags, T-shirts, jeans, etc.”

Customers in cities around the country can find the names they crave at multibrand boutiques, but Almaty is still the fashion capital of Kazakhstan.

Almaty is the country’s largest city with a population of almost 2 million. It was Kazakhstan’s capital from 1929 to 1991, and is still considered the commercial and cultural heart. Current capital Astana is the second-largest city with a population of about 700,000. Almaty is to Astana what Istanbul is to Ankara in Turkey, according to local experts.

The country has numerous smaller cities where shoppers can find international brand names. Jack Geula, the owner of Muschel GmbH & Co. KG, which has more than two decades of experience representing European designers in the former Soviet Union, said, “If you compare Kazakhstan to any of the other countries in the region — Armenia, Georgia, Uzbekistan, Mongolia — business there only happens in the capital cities. Kazakhstan has been developing for the past 10 years easy and there is a wider structure available.

“Almaty is still the top,” added Geula. “Astana is catching up, and then there is a wider gap after that.”

Mining capital Shymkent, oil-rich Aktobe, and industrial center Pavlodar are just a few of the Kazakh cities where multibrand stores sell premium brands.

J Brand, which distributes through its showroom in Milan, now sells in cities including Almaty, Astana and Aktobe. Kazakhstan is the third-most important country in the Commonwealth of Independent States in terms of turnover for the American denim maker. Muschel distributes brands like Just Cavalli, Lagerfeld and Cerruti in many Kazakh cities.

Cerruti is one of the most popular brands at the Cosmo boutique in Pavlodar, according to owner Natalia Russkih. “Our customers buy those brands that advertise in magazines,” she said. “If there aren’t ads, then there isn’t much interest.”

Shoppers in Kazakhstan have different tastes than their Western counterparts. “While having the brand name visible might be poor form in Europe, when Kazakh customers buy something Cerruti they want the brand front and center,” she said. The majority of Cosmo’s customers are women aged between 25 and 40, who are fashionable and on trend. “Our men are still conservative, but women are stylish and look for fashion. If one color is trendy, they want that color.”

For men, tailored clothing is more important than it is in Russia and Europe, as the casualization of men’s wear has yet to take on. “In terms of men’s wear, suits and blazers are still a very important part of business,” said Guela.

For women, religion and culture play a role in dress length. At Cosmo, customers are not likely to buy floor-length dresses, but they stay away from short hemlines. “Dresses are very popular here, but rarely do women buy dresses above the knee. They prefer dresses to the knee, or maybe a bit under the knee,” said Russkih.

Designer brands including Rick Owens still find more success in Almaty than in smaller cities. Luca Ruggeri, the designer’s commercial director, said the company “tried to propose our products in Astana, but in that city the collection was less capturing” than in Almaty. Still, Owens views the market in Kazakhstan as “quite relevant, despite the fact that we basically have business relationships only with Rush and the soon-to-open Saks Fifth Avenue in Almaty.” 

Other brands that multibrand boutique Rush distributes include Comme des Garçons, Jean Paul Gaultier, Vivienne Westwood and Miu Miu.

The Saks Fifth Avenue that will open in the new Esentai Mall in Almaty in mid-October will be the retailer’s first in the former Soviet Union. The three-story, 87,615-square-foot store is a licensing partnership with Kazakh luxury distributor and retailer Viled Group. Viled, which is the largest retailer of jewelry and watches in Kazakhstan, also distributes brands including Cartier and Christian Dior in Almaty and Astana.

Developed by Capital Partners and designed by Skidmore, Owings and Merrill architects, Esentai provides a new shopping experience for the region. Capital Partners marketing director Sandrine Moreau said, “The mall is the first of its kind in Central Asia.” Esentai is unique in its fit out — black marble floors, the latest lighting technology — and the brands that it offers. The first floor is dedicated to luxury, with Fendi, Gucci, Lanvin, Dolce & Gabbana, Burberry, Hugo Boss and Louis Vuitton stores.

The Vuitton store, designed by Peter Marino, is the brand’s sixth in the CIS region — with four in Russia and one in Ukraine — and its first in Kazakhstan.

“We are bringing something very modern into the market, and some of the best customers are in Kazakhstan. While they are hungry for something new, they are also very, very attached to their country, to their land. It is an interesting challenge to try find the right balance,” Moreau said.

Esentai’s advertising campaign integrates Kazakh culture with luxury clothing and accessories. The billboards feature Kazakh models posing in front of some of Almaty’s most famous sights, as well as the country’s rolling steppes and scenic mountains.

For those brands looking to enter the market, Almaty is home to the region’s most important fashion trade show, Central Asia Fashion. The ninth CAF brought 105 exhibitors and 1,500 buyers together. Italian nonprofit Entre Moda Italia, or EMI, which promotes the country’s fashion around the world, participated in the show for the first time in March.

“The Central Asian economy is growing strongly and we thought that it was important to find a fashion fair that would help us to make the right contacts,” EMI president Antonio Gavazzeni said. The company had about 30 firms exhibiting at CAF compared to 330 brands at the equivalent show in Russia, Collection Premier Moscow.

Still, Gavazzeni views the markets as complementary, “Moscow is historically the hub of the distribution system for all the CIS countries. Most Italian companies are already well established there and the level of competition is growing....The level of competition in Kazakhstan is lower,” he said. “Companies who decide to go there are real pioneers.”

WWD: Brazil Emerging as Luxury Force

WWD | MARC KARIMZADEH During the Olympics’ Opening Ceremony, Charlotte Olympia shoe designer Charlotte Dellal tweeted a TV screen shot of Team Brazil just as it was entering the stadium. That she is such a fan of the country is no surprise: Her mother, the well-known model Andrea Dellal, is a Rio de Janeiro native, and, as a child, the younger Dellal lived in Brazil’s second-largest city for a few years. These days, Dellal, now based in London, frequently turns to her “home from home,” as she puts it, for design cues. Case in point, her resort collection. Called “Glamazon,” it includes ankle-strap shoes decorated with metallic swirls that mimic the Copacabana sidewalk, as well as platform sandals flaunting flamboyant heels—mini birdcages encasing painted metal parrots. “It’s such a vast country that you can get inspired from so many different things,” Dellal says. “The people are very inspiring. The music is fantastic, and Carnival is one of my favorite times of the year.”

Dellal is not alone in her love for all things Brazil. If the country is best known for Corcovado, “Girl From Ipanema” (cue the “tall and tan and young and lovely”) and Gisele Bündchen, a different kind of Brazil is now emerging. Fueled by a boom of both the financial and creative kinds, the country is making a real impact on the fashion and accessories worlds at multiple levels—from serving as a leading design and retail inspiration (even Macy’s held a spring promotion called “Brasil: A Magical Journey”) to becoming an emerging market for luxury brands. “Brazil is enjoying an incredible GDP growth rate,” says Patrizio di Marco, global president and chief executive officer of Gucci, which has plans to open five stores there by the end of the year. “You have a number of high-net-worth individuals—similar to Russia and more than India—which says a lot about how important the market is. I think we’ll have more opportunities there.” Gucci is among the luxury brands with outposts in the new JK Iguatemi mall in São Paulo, which opened in July; it unveiled a dedicated men’s store there, while the brand has two more stores offering men’s and women’s product in São Paulo, as well as one in Brasilia, with a Rio opening slated for later this year. Other brands at the JK Iguatemi include Van Cleef & Arpels, Lanvin, Miu Miu, Bulgari, Prada and Chanel.

ROBERT BURKE, of consultancy Robert Burke & Associates, cites the explosion of creativity as a significant reason why the industry is taking notice. “Brazil represents a lot of sophistication, which people had underestimated in the U.S. before,” he says. “What fundamentally changed there is that it was a country dominated by local brands because of trade tariffs, but with Brazil’s economy, the number of ultrarich has grown. They travel internationally, and their appetite for international brands also grew—and so has their ability to buy these brands locally.”

Just as international labels are hitting cities like Rio and São Paulo, Brazilian fashion brands, including Melissa, Schutz and Jack Vartanian, are making inroads in the U.S. São Paulo-based shoe designer Alexandre Birman, whose family owns Arezzo & Co., one of Brazil’s leading women’s shoe companies (as well as the Schutz division), isn’t surprised by the new momentum. “Brazil was the first country to really get out of the financial crisis of 2008,” Birman says. “Our recovery was the fastest in the world, and that drove the attention of many investors to Brazil, who, consequently, brought money here, allowing [local] companies to gain in scale and to have the possibility to invest more overseas.” Birman notes that Southern Brazil’s Vale dos Sinos region is the third-largest shoe-manufacturing area in the world, with a cluster of 20 cities that boast such centers, from tanneries to sole producers. “It was an area colonized by Italians and Germans and their families after the war, and they brought a lot of people that knew about shoe manufacturing to the area,” he says. Shoemaking aside, Birman cites three other main reasons why Brazil is having such a moment: the contemporary art scene, which is thriving with artists like Adriana Varejão, Beatriz Milhazes and Vik Muniz; the 2014 FIFA World Cup to be held across multiple Brazilian cities, and the 2016 Summer Olympics in Rio. “Brazil is a buzzword and buzz place,” says designer Monica Botkier, whose resort lineup was inspired by the idea of chic, exotic travel, and, naturally, Brazil. “There was always the notion of Brazil. Now the country is catching up to its own reputation,” she says. Judith Leiber’s creative director, Jana Matheson, also looked to the country for resort, most notably with her minaudières, some in the shapes of parrots and frogs, and others crystal-embellished to resemble palm trees. “We design holiday and resort in the middle of winter, and as I was working on the collection, I thought, If I were to go out of town, where would I go?” says Matheson. “If I were to hit a beach, I thought I’d be very happy to be in Brazil, and so I thought about hardware development and beach glass in these watery liquid tones.” Rafé designer Rafé Totengco, meanwhile, was dreaming of a trip to the Copacabana. His structured mother-of-pearl, resin and stainless-steel minaudières loosely reference the designs of Brazilian architect Oscar Niemeyer, while totes are worked in vibrant graphic motifs. “It’s this celebration of color, more than anything else,” Totengco says. And, he adds, who can’t use a little Brazil in their lives? “The girls from Ipanema, the boys on the beach, the Fasano [design hotel chain]…how could you not want to be there?” Totengco says. “It’s got rhythm.”

WWD: EBay Links With Designers for Holiday

WWD | DAVID MOIN

If Target and Neiman Marcus can do it, why can’t eBay?

Corralling designers for exclusive Christmas products has become a trend and now eBay has hooked up with Billy Reid, Chris Benz, Fallon, Jonathan Adler, Ruffian, Steven Alan and Tibi to create the eBay Holiday Collective, WWD has learned.

It will be a limited-edition gift collection of men’s and women’s apparel, jewelry, travel and electronics accessories and home decor, available on eBay for the 2012 holiday season. The Collective marks the first time eBay is collaborating with a group of leading designers to create an exclusive collection, though the giant online marketplace is not new to designer exclusives, having in the recent past worked with Derek Lam, Narciso Rodriguez, Alexander Wang and Rebecca Minkoff.

Last week, WWD had an exclusive report on an unprecedented collaboration between Neiman’s and Target, whereby they are teaming with 24 Council of Fashion Designers of America designers, including Carolina Herrera, Lam, Diane von Furstenberg, Jason Wu, Marc Jacobs, Oscar de la Renta and Tory Burch, to create The Target + Neiman Marcus Holiday Collection. It will be sold beginning Dec. 1 at Target and Neiman Marcus stores, as well as at target.com and neimanmarcus.com, and feature products priced from $7.99 to $499.99, with most items less than $60.

In a different designer spin on holiday, and on a smaller scale, Macy’s for Christmas 2011 partnered with designers Karl Lagerfeld, Kinder Aggugini, Matthew Williamson and Giambattista Valli on creating exclusive gift-oriented products. Earlier in the year, the very same designers did separate one-off collections for Macy’s Impulse contemporary departments.

Other Web sites and retailers, particularly those that pride themselves on selling differentiated product, could come out with announcements soon on designer collaborations for Christmas, particularly if they want to publicize the programs in fashion magazines with long lead times. Many retailers and brands, from J.C. Penney Co. Inc. to Josie Natori and Bergdorf Goodman, have already unveiled holiday 2012 collections. EBay will release specifics on products from its Collective later in the year.

“Designers realize that the retailers need unique product so they are much more open to doing that. Multitasking is something designers have gotten used to,” said Robert Burke, president and chief executive of the consulting firm bearing his name. “I suspect you will be hearing things in the next few weeks.”

“We are certainly thinking about exclusive products with designers on a lot of levels,” and not necessarily just for Christmas, said one top executive from a major fashion Web site.

Another source said Penney’s is keen on holiday tie-ins with designers, in addition to those the chain has going for fall such as with Betseyville by Betsey Johnson, Lulu Guinness and Vivienne Tam.

Price points are not a problem for most designers, since they will trade down to mass chains and department stores, or even luxury chains seeking holiday gifts that are more affordable than the usual offerings at other times of the year. However, sales people at upscale stores aren’t always so enthused about cheaper products because it means less commission.

The eBay Holiday Collective will include more than 40 gift items, priced from $50 to $100, in a wide range of categories. Each of the seven designers created at least five items.

The Collective will go online starting Nov. 12, a few weeks before The Target + Neiman Marcus Holiday Collection gets served up. The eBay collection will be available globally, via Fashion Vault, which is eBay’s destination for special events, limited-time sales and exclusives. Free shipping anywhere is part of the program. As with all of the merchandise that appears on the eBay marketplace, merchandise from the Collective will not be owned by eBay.

“The eBay Holiday Collective marks another milestone for eBay in the fashion category,” said Jeff Somers, the general manager of eBay Fashion. “Similar to the recently announced Neiman’s and Target and Nordstrom and Topshop collaborations, our partnerships are another sign of the retail revolution under way. As consumers seek seamless, multichannel, anytime-anywhere shopping, creative collaborations point to the future of commerce. Our focus is on enabling commerce, and we’re achieving that by serving as a partner to retailers of all sizes.”

Somers added that the seven designers were chosen based on “their genuine enthusiasm for eBay and because each brings originality and a distinct point of view, and embodies the entrepreneurial spirit of our marketplace.” The designers are also compiling wish lists and gift lists featuring their favorite finds from eBay. These gift guides will be accessible online and through eBay’s mobile app.

“I am an avid eBay shopper and often find great items for our home and our shops on eBay, so the collaboration was a natural fit,” said Reid.

“To have the opportunity to collaborate with eBay, in the company of such inspired designers, for the holidays, is such a treat for me,” said Benz.

“It has always been my goal that Fallon be an attainable collection for the fashion conscious,” said Dana Lorenz of Fallon.

“I am obsessed with eBay,” said Adler. “EBay has changed the way I shop, and, I’m afraid, distracted me from doing my work — but that’s another story.”

WWD: Women's Fashion Sales Face Challenges

WWD | DAVID MOIN

NEW YORK — As designers gather at tonight’s CFDA Awards at Lincoln Center, the women’s fashion business is at a crossroads and creativity has never been needed more.

The flagging women’s apparel business is primed for a jolt.

It’s accepted fact that shoes and bags have lit up the industry for several years now, and that’s not expected to change anytime soon. Too much stuff with too little imagination has women’s apparel pretty much adrift in a sea of sameness. Women’s wear sales have been dragging since well before the recession. Of equal concern is that there appears to be no easy answer to fixing the problem.

Even as retailers appear to be crawling back with improved profits and sales and growing cash reserves, women’s apparel has not been leading the way. Instead, accessories such as shoes and handbags are now the star performers — and are likely to remain so for the foreseeable future. And if the malaise in women’s apparel remains prolonged, it will have a huge impact on what and how much stores buy, the space they devote to apparel and the ability of new designers to break through into the spotlight.

“Fine apparel is particularly challenging right now,” Neiman Marcus president and chief executive officer Karen Katz told WWD last week, just after the luxury chain reported a 35 percent profit gain in the last quarter. “For us, this was really the first quarter where we experienced a change. It’s not a price issue.  There are lifestyle changes. Customers have been very discerning. They want something very unique, very fashionable, something lasting for her wardrobe.”

Designer labels that read a bit more casual are doing well, Katz  added. However, “We have to rethink how we edit the designer collections.”

“Certain areas of women’s apparel, contemporary, sexy and flirty are doing extremely well. Certain areas with classic brands aren’t doing as well,” Saks Fifth Avenue chairman and ceo Stephen I. Sadove said in an interview. “Overall, the women’s business is healthy, but it’s being driven more by fashion — where it’s more contemporary. Some brands are more suited. More formal may not be the way people are dressing. That is a change in taste.”

Even designers admit women are increasingly finding it tough to find clothing they want to wear, since they now are looking for clothes that can as easily go from work through dinner.

“It’s really important to realize that today, women have one wardrobe. Years ago, they would have a wardrobe for work and a wardrobe for weekend clothes,” said Gary Muto, president of Loft.

The bulk of the business — designer apparel, classic and traditional sportswear, suits and tailored looks, outerwear, basics, misses’ and juniors — has been in the doldrums for some time, although contemporary sportswear, dresses, knitwear, skinny jeans and colored denim experienced good gains. Statistically, there’s little question that women’s apparel overall lost ground, or had minimal growth in the past year. According to The NPD Group market research firm, women’s apparel in the U.S. rose just 2.9 percent to $80.16 billion last year, a figure that includes inflation, which distorts real growth, and is low compared with mid-to-high-single-digit gains retailers posted for their entire businesses.

In 2011, dresses rose 17 percent to $10.9 billion, though suits were down 17.9 percent to $1.02 billion; jackets slipped 0.1 percent to about $1.7 billion; pants dropped 0.6 percent to $2.97 billion; jeans declined almost 3.3 percent to $7.79 billion, and coats fell 3.4 percent to $2.07 billion. Women’s accessories did better, rising 3 percent to $34.92 billion and sweaters rose 5.6 percent to $11.05 billion. Women’s footwear was up just 0.5 percent to $25.04 billion.

“The volume areas for business in women’s apparel are failing in relationship to other areas,” said Marshal Cohen, chief industry analyst for NPD Group. “Women have dramatically changed how they perceive the importance of sportswear. They’re buying across a much wider range of products. The fashion industry has been out-fashioned by every single other industry where consumers spend money. There’s more fashion in food than apparel.”

For several seasons, Nordstrom Inc. has been unhappy with its women’s apparel business. Pete Nordstrom, president of merchandising, said this spring some “pockets” in women’s performed better than others and cited the modern and casual sides and “good growth” in activewear and lingerie, which in many cases are getting increased space on Nordstrom’s selling floors. He also said by the next conference call the company will have hired a new general merchandise manager in women’s to succeed Loretta Soffe, who quietly left in January, reflecting the difficulties.

Moderate chains are also challenged, like J.C. Penney Co. Inc., which is reinventing and has been plagued by basics that don’t sell. Gap Inc., which has been enduring multiyear turnaround efforts, showed some life this spring by capitalizing on the bright color trend but needs to find a new identity. Sears Holdings Corp. remains prosaic and requires a fashion overhaul. The Bon-Ton Stores Inc. is trying to find the right balance between updated and traditional. Wal-Mart Stores Inc. perennially has problems selling anything but basics in apparel. The Talbots Inc., which was just sold to private equity firm Sycamore Partners, thereby escaping a potential bankruptcy, needs to find a contemporary look to reclaim its mature clients that defected to Chico’s FAS and elsewhere. Amongst the younger set, Urban Outfitters Inc. and the nation’s slew of youth chains seem to be cannibalizing each other.

Retailers, consultants and designers queried over the past year said the apparel industry is beset by too much inventory, insufficient innovation, sameness and a failure to keep up with the changing lifestyles of women. Most apparel, they said, lacks the right stuff, which boils down to value, quality that lasts, and versatility, meaning looks that are equally suitable for work or dinner afterward, or as wearable for weekday or weekend occasions. It helps when products are tied to social, environmental or health awareness causes.

“There’s an enormous amount of distribution. Everyone is carrying apparel, including sporting goods chains and drugstores,” observed Janet Grove, who was chairman and ceo of Macy’s Merchandising Group from 1999 to 2009. “With the resurgence in dresses, sportswear gets diminished.  The biggest thing that affects the success of sportswear is to react quickly to selling. It’s the Zara model. The more structured careerwear has kind of gone away. All these things go through cycles.”

Fashion experts also said money once spent by consumers on ready-to-wear and sportswear is shifting to accessories and shoes, two categories increasingly associated with fashion, status and innovation. Dresses, too, for the last four years have been on a run because they’re simpler and easier to put on than suits or sportswear outfits, and it’s a look that can be easily enhanced with cardigans, status handbags and shoes. But last fall, over lunch at the start of New York Fashion Week, a veteran fashion director lamented the women’s fashion business, summing up what seems to be an industry malaise. Shopping the women’s market, said the fashion director, “is just not so much fun anymore. There’s not that much creativity.”

Allen Questrom, the stylish former chairman and ceo of Penney’s, Federated Department Stores Inc. and Barneys New York, echoed the sentiment. “I don’t see much out there that’s new and different. There’s a lot of stuff. If something is new and different, people will buy it. When the iPod came out, nobody asked about the price. They lined up to buy it.”

“I shopped all the major stores in New York last week. There was a ton of merchandise and it was singularly unimpressive,” said Gregor   Simmons, a New York-based buying consultant for retailers. “Contemporary apparel really drives the women’s business. It takes inspiration from designer, gives you fashion, and it’s not a luxury price point.” Otherwise, “a big chunk” of women’s apparel is in the doldrums. “There’s an overassortment of labels that tend to copy each other.”

“I think the preoccupation by many manufacturers and designers to cost-engineer to make up for big price increases in raw materials and labor has resulted in a reduction in innovation and creative product development,” observed Arnold Aronson, managing director of retail strategy at Kurt Salmon Associates. Sucking costs out of apparel production, more often the case in moderate merchandise rather than high-end apparel, leads to less detail, like fewer buttons, and less interest from consumers, Aronson said.

Some see women trading down by shopping stores like Forever 21, Uniqlo and Zara that provide alternatives and could be taking sales away from traditional department stores and older specialty chains. However, Express ceo Michael Weiss said, “I don’t believe women trade down in quality but do want to spend less. They might buy fewer Christian Louboutin shoes but will still buy them.”

In terms of square footage, women’s remains the most important category occupying more square footage than any other, though stores have been adding square footage in accessories and shoes. “There’s been a real shift to accessories for many women shoppers. They realize they can update a wardrobe through shoes and handbags. Shoes are becoming more and more distinctive in design and style,” said consultant Robert Burke.

“I still believe the only way to be successful in apparel is to be successful in women’s wear,” said Lisa Schultz, executive vice president of apparel design at Sears, taking a somewhat different take.

In an era of cross-shopping, with consumers not particularly loyal to one retail tier, the price spectrum of brands that continue to do well shows the challenge faced by department and specialty stores. At one end are labels like Balenciaga, Prada, Oscar de la Renta, Versace Collection, Armani Collezione and Akris Punto, while Milly, Lafayette 148, J. Crew, Diane von Furstenberg, Tory Burch, Valentino Red, Helmut Lang, Moschino Cheap & Chic, BluGirl Bluemarine and Eileen Fisher are among those doing well in contemporary. Then there are the standouts among the mass or casualwear end, including Lululemon, Land’s End, and Joe Fresh. The private-label business is growing, with stores like Macy’s, Belk and Saks increasing the presence of in-house brands.

“The customer is voting on newness,” said Kathy Bradley-Riley, senior vice president and general merchandise manager at Doneger Group. “Merchandise that is close to something she owns or is reminiscent of last year, she chooses to pass on.” But there are definitely bright spots, Bradley-Riley noted, citing printed sheer tops, dresses that are increasingly visible amid sportswear collections, shapes that seem new such as uneven hemlines and lace and crochet trims. “She is reacting to anything that is feminine, and buying a lot of modern fashion-right product. Traditional, classic has been more challenging.” Regardless of the shopper’s age, “she is definitely thinking younger.”

“The business in women’s rtw is more uneven than accessories, jewelry, men’s and home,” acknowledged William Taubman, chief operating officer of Taubman Centers Inc. “There are entire theories revolving around why this is happening, but I would say customers are reaching an age where they’re buying less clothing and lifestyles are changing.” For many retail tenants in the malls, core sku’s have been declining because of lifestyle changes, Taubman noted. “The suit used to be a basic, and when women were wearing suits, the handbag took a backseat. If you take the suit away and don’t have to wear it, the handbag can be more of a statement.

“It’s been really difficult for some operations to restructure their core offerings.”

FINANCIAL TIMES: Flagship stores: Groups look east as clients head west

FINANCIAL TIMES | ELIZABETH PATON

Flagship stores have long been lossleaders for the luxury industry. Brands’ retail investment has soared in recent years, with projects becoming increasingly elaborate and expensive in the quest for patrons and profits – but entailing costs that are rarely recouped by sales.

Yet, from a state of unanimity, debate has ignited as to how necessary flagships will be to brands in the future. Now that more than 50 per cent of luxury purchases are made by tourists visiting the west, brands could scale down their rollout of supersized stores once consumer visits level off in emerging markets.

“Who needs aggressive store expansion when customers are happy to jump on a flight to London, Paris or New York?” says Aaron Fischer, head of consumer research at Asian brokerage CLSA, noting that the luxury sector’s capital expenditure to sales ratio has slipped from 7 to 5 per cent since 2009.

Others are not so sure. Burberry, Prada and Louis Vuitton, respectively UK, Italian and French fashion labels, have led an explosion in international flagship openings over the past year, still clearly convinced of their long-term financial dividends.

IWC opened a 3,000 sq ft store on Madison Avenue in New York last month, its first US flagship. The Swiss watch brand spent years searching for the perfect location, staff and aesthetic. Each timepiece collection has its own themed sector, where books, boats, an aquarium and even an in-flight simulator surround products.

“Opening a US flagship was the obvious next step in our expansion strategy,” says Georges Kern, chief executive of IWC. “Inevitably, costs are high, but it’s only a decision we would take [having considered] the maturity of the company and whether we could afford it. It’s an important way of gaining brand equity and consolidating positioning in a core market. I would never open a flagship unless I was convinced of its profitability.”

The store’s experiential, interactive quality has buoyed sales. The longer a customer stays on-site engaging with a brand, the more likely they are to spend, which explains the art exhibitions, film screenings and cafés often found in luxury flagships.

“We use flagships to showcase our evolution into a multifaceted lifestyle brand, bringing our universe to life while placing products in an explanatory context,” says Fabio Mancone, director of licensing and communications at Giorgio Armani, the Italian fashion group.

“In an age where online shopping is becoming dominant, a flagship store is a perfect example of how the theatre of the physical, rather than virtual shopping, can still excite a crowd.”

Armani says that profitable impact goes beyond business-to-consumer marketing and education. Wholesalers in new regions see the investment as a sign of confidence in the brand’s appeal, resulting in notable order boosts following flagship openings.

Peter Marino, a New York-based architect, has designed dozens of flagships for LVMH and Chanel, the French luxury groups. He is convinced the boom in tourist traffic from countries such as China and Russia has reinforced the need for luxury brands to up the stakes in their retail strategies.

“The more mobile the customer base, the shorter the lifespan of a flagship,” he says. “Once, a store could have remained unchanged for a decade; now they look dated faster. The Asian customer in particular is extremely savvy, with incredibly high expectations. Everything must be bigger, newer, lighter and brighter.”

Mr Marino says the lasting impact of a flagship visit can be far stronger than advertising campaign exposure, making it worth the millions spent.

Furthermore, given that flagships are often operated directly by the luxury company itself, they are an easier means of brand control, while still making a statement and gaining traction in a new environment. Still, due diligence remains vital.

Robert Burke, founder of Robert Burke Associates, a luxury brands consultancy, says: “Many brands have been burnt financially by initially underestimating the complexities of foreign markets, be it through picking the wrong local partners, heavy taxation or investing too much too soon in ambitious retail strategies.”

Large-scale operations in India have stung several luxury labels in recent years. Overhasty investment after flagship successes in China has produced heavy losses, followed by a quiet downsizing of operations. Meanwhile, the dismal results reported by Abercrombie & Fitch, the US retailer, this month were attributed primarily to spending too much too soon on weak European flagships.

Inevitably, the size of the luxury group dictates the impact of the successes and failures of a flagship on its books. For smaller brands, flagships run the risk of becoming white elephants, unable to cover rent, staff and construction costs should customers’ minds – and wallets – wander.

Antoine Belge, luxury analyst at HSBC, the bank, says: “Big brands are more secure. Most have had flagship chains for some time, so gradual openings won’t significantly affect financials.

“However, they tend to be less profitable than regular stores, taking two to three years to break even, versus the average of one year. Still, this can be compensated for in other ways, such as building long-term engagement with a customer base.”

Armani’s Mr Mancone agrees companies must be open-minded when quantifying return on investment, arguing it is one of the luxury world’s defining idiosyncrasies.

“Building a successful fashion brand requires acceptance that one will not always get immediate returns from investment – just look at the example of fashion shows. Measurement must go beyond sales and encapsulate value gained from the lasting impact of a meaningful connection with luxury’s 21st century customer.”

WWD: Fendi's Baguette Takes Center Stage

WWD | MILES SOCHA

PARIS — It’s baaack — the original “It” bag, that is.

Fendi’s Baguette — the shoulder jewel that helped ignite the luxury handbag craze and propelled a bidding war for the Roman house — is back in the spotlight. Next month will see the launch of a 345-page Rizzoli tome chronicling the Baguette’s history, and limited editions of six of the bag’s most famous iterations are slated to arrive in Fendi boutiques worldwide, followed by a series of in-store events.

The initiatives, marking the bag’s 15th birthday, also signal a strategic thrust for the company, where new chairman and chief executive officer Pietro Beccari is putting Fendi’s iconic products at the forefront of development. The move echoes some of the work he did in his previous role as executive vice president at Louis Vuitton, where a Core Values ad campaign lit a flame under Vuitton’s historic monogram leather goods.

“In this time of a quick-changing, fast-paced world, it is important to remain close to one’s roots and values. The Baguette represents the perfect expression of this and of Fendi’s DNA,” Beccari told WWD in an exclusive interview, his first since joining Fendi in February. “It’s probably true that the Baguette was the bag that invented a fashion for bags and probably initiated the so-called ‘It’ bag phenomenon. But thanks to its unique shape that embodies the whole history of a maison, the Baguette has evolved into a timeless piece.”

Although Beccari declined to talk numbers, market sources estimate Fendi has already sold close to a million units of the slim-lined purse, small enough to tuck under the arm like a loaf of French bread. Fendi Baguette bags retail from about $1,000 up to $3,000 and more.

“It was very spontaneous. There was no marketing plan around this bag,” Silvia Venturini Fendi recalled about her 1997 invention, characterizing it as a reaction to minimalism. At the time, she recalled that handbags were mainly functional objects, frequently black and often “boring.”

“They were treated like accessories and very separate from fashion. You didn’t see many bags on the runway, only in the showrooms,” she said.

In 1999, LVMH Moët Hennessy Louis Vuitton and Prada teamed at the height of the luxury acquisitions boom to take a 51 percent stake in Fendi, valuing the company at $950 million. In 2001, LVMH bought Prada’s 25.5 percent holding for about $260 million and has subsequently bought out all minority shareholders.

Beccari noted that Fendi never stopped selling the Baguette, and has since turned out more than 1,000 versions of the style, in materials ranging from fur and sequins to crocodile skin. The reeditions include a denim style embroidered with flowers, and another pavéd in colorful embroideries and small mirrors. He credits the handbag’s diversity for its longevity.

“The fashion world is right now saturated and bombarded by real or presumed ‘It’ bags,” he said. “But for a long time, the Baguette has abolished the ‘fashionable’ handbag convention, the one that provided the same handbag for everyone, a coveted object to be flaunted in its uniformity.”

To be sure, the “It” bag phenomenon — exemplified by the Baguette — has waned in recent years, industry observers agreed.

Pamela Golbin, chief fashion curator of fashion and textiles at Les Arts Décoratifs in Paris, said the trend was a reaction to the minimalist fashions pioneered by Belgian designers and Austrian Helmut Lang as the millennium approached. “There was no decorative embellishment. It was the perfect time for accessories to become the central part of the wardrobe,” she explained.

Today, “there’s more of a balance between accessories and clothes,” she stressed, characterizing the handbag as a “very desirable object,” but without the hysteria that once engulfed it.

According to Robert Burke, president and ceo of consultancy Robert Burke Associates in New York, shoes supplanted handbags as an obsessional focus in recent years, possibly because they are less expensive amidst ongoing economic turmoil. In handbags, consumers have been gravitating toward quieter styles “with a little more longevity,” Burke said, noting that, “Hermès hasn’t suffered during the economic crisis.”

Burke stressed that there are pitfalls to “It” bags, principally the risk of demand withering once the market becomes saturated.

“When an ‘It’ runs out, it can come to a screeching halt.…Growing strategic businesses in prudent ways is probably where brands are leaning more today,” he said. “I would rather have a brand with a strong category of business rather than an ‘It.’”

Burke cited Celine, Givenchy and Valentino among European brands that have done a good job building a solid accessories business, and placing limits on distribution.

According to sources, top luxury players like Chanel tightly control quantities of their most in-demand handbags so as to not  endanger their coveted status.

For his part, Beccari stressed that, “Fendi wants to go for a less compulsive and feverish consumption.”

Venturini Fendi recalled that she approached the Baguette bag like the Roman house does its furs: with an eye to high craftsmanship, surprising techniques and being “a bit subversive.”

She attributes the success of the Baguette to multiple factors. Its short strap and diminutive size were counterintuitive to the functional, even ergonomic approach of what was on the market in the Nineties. The fact that it came with a multitude of embellishments was a welcome reprieve from the monotony and uniform nature of fashion then. “We were all dressed like black spiders,” Venturini Fendi recalled.

Scarcity helped, too.

“Fendi was small at the time. You couldn’t find the bag so easily and that made it precious. It started to become like a fever,” Venturini Fendi explained. “I always say: It was the right bag at the right moment.’”

The Baguette also foreshadowed the use of celebrities as marketing vehicles for leather goods, although Venturini Fendi insisted all of its famous devotees came calling, not the other way around. Among the first was Madonna, snapping up several Baguettes at the Rome shop. Then came a call from Patricia Field, who asked if she could borrow some for Sarah Jessica Parker’s new series, “Sex and the City.”

“It’s like a marketing case study, but really it wasn’t,” Venturini Fendi marveled.

Parker, among contributors to the Rizzoli tome, notes that Fendi was the first big design house to loan the show items for her character. “It really opened the floodgates and influenced the story line — especially Carrie’s habit of spending more on fashion than her home,” she writes. “Once Fendi loaned us items, everyone was more willing to do so, which helped us dramatically in conveying Carrie’s decadence.”

Asked if the “It” bag phenomenon still persists, Venturini Fendi said she detects an almost opposite trend.

“We have seen so many bags, so many companies that weren’t leather goods specialists making bags,” she said in an interview. “I think everyone was trying —sometimes too hard — to do ‘It’ bags.”

The consequence? “We want real bags again. We’re going back to leather,” said Venturini Fendi, noting this impulse yielded the Peekaboo bag, a discreet framed handbag she likes best in hand-stitched Selleria leather. “I think we are in a moment where we want simple or very, very high design…the most exquisite leather…or something surprising, colorful, crazy and different.”

To that end, Fendi in 2008 mounted a design competition in Asia called “Design Your Dream Baguette” and commissioned one-off versions from famous artists, including Jeff Koons, Damien Hirst and Richard Prince, that were auctioned off for charity.

“I’m not so obsessed by the next ‘It’ bag,” said Venturini Fendi. “I just want to follow the same path: doing things with freedom, and experimenting a lot. It’s the only good recipe.”

WWD: Bridget Foley's Diary: A New Day for Robert Lee Morris

WWD | BRIDGET FOLEY

Question: How did you find the Artwear artists, did they come to you?

Six-hundred-fifty uninterrupted words later, Robert Lee Morris has discussed judging talent; artistic patronage; rule-breaking; fearlessness; CFDA awards; the “artist mentality, breaking the rules, changing the way things are”; agents of change; Virginia Wolfe; “the Occupy Wall Street people, the Marc Jacobses, the Pamela Loves”; wayseers.org founder Garret John LoPorto; Bob Dylan; Albert Einstein, and “things [that] can happen in your relationship with the universe that says, ‘You can rest now, if you want to rest [or] take another stab at it from a different angle. Hey, how about we try making a real brand out of you, like a brand that would be a world brand?’”

The gift certain creative types have for articulating large truths as they perceive them and bringing them back to the merch is just one more thing to love about fashion, particularly when you buy into the genuineness of message, if not necessarily the message itself, in full.

Morris is genuine, and, some might say, out-there. The founder at the age of 23 of an artistic commune in Wisconsin, where he began developing the sculptural, sensual metalwork that would become his signature and make him a fashion-world sensation, speaks softly as he delivers heady thoughts. Spirituality, ancient influences, the natural world and futuristic musings shape both the person and his work, while dominating his conversation — even as he embarks on a new and critical phase of his brilliant, if up-and-down career, now in its fifth decade.

Before Alexis Bittar, before Eddie Borgo, Lisa Jenks, Pamela Love and even Tom Binns, Morris forged a major fashion path for jewelry while insisting on its core artistry; those who followed are indebted. Before the CFDA Incubator — for that matter, before the CFDA cared enough about young designers to incubate — Morris conceived, assembled and nurtured the artisinal jewelry gallery Artwear.

He is a true trailblazer whose renown and influence far exceed the scale of his business. Though never technically out of business, turnover has been tiny for years, including through the transition between owners; last July, Haskell Jewels bought the company from Clover II.

Today, market officially opens on a major relaunch, and Morris couldn’t be happier. He discussed his new situation recently at his new base, a compact three rooms situated in the Haskell headquarters at the end of a long corridor, past the showrooms for the company’s other jewelry brands — Miriam Haskell, M. Haskell, Betsey Johnson, Kenneth Cole and Simply Vera for Kohl’s. Though he moved in only last month, it looks and feels like a space long-occupied, filled with the treasures, results, books, tools and some of what some of us might call junk, of a lifetime of acquiring, scavaging and creating. When Morris packed up his longtime studio downtown, he originally wanted to take only the essentials and send the rest home, but the process proved overwhelming. Except for a serious edit of the books, it all came uptown, where it makes for daily rediscoveries.

Artifacts range from the childhood treasures of an Air Force brat to a small statue that was his father’s — Hercules wrestling an unidentified king, the latter, Morris points out, “yanking his…” Ancient-looking metalwork — a primary inspiration — is everywhere. Morris found the piece of a cow’s skeleton on his property in Sante Fe, N.M., and a sculpture of a boat was crafted years ago by a beloved professor-mentor. One room seems too visually overloaded to lend itself to the stated purpose of meditation room; a seating area was, he says, “made into this Zen garden place for me.” The most visually calm part of Morris’ fiefdom, the showroom, couldn’t belong to anyone else. On view: multiple CFDA and other awards sharing counter space with demonstrative display pieces including vertical metal tubing and signature female torso sculptures (“How can you get tired of the human body?” Morris muses), all foils for the kind of bold metal collars, cuffs and rings on which he built his reputation. These include versions of archival pieces as well as new designs. It all looks impressive and of the moment.

Morris’ assessment: “Perfect. My experience with contractors is that it takes a lot of back and forth before they get it, and the work [first] comes in lighter or crappy. This came in better than I could ever imagine. Look at this cuff! To me, it was like the universe [took me to] the right spot. Finally.”

That right spot is total ownership by Haskell, which bought all the company’s assets, including trademarks; SoHo store; department store and QVC businesses; archives, and any future new categories into which Morris might forge. That’s fine by Morris, who has not been the master of his own business destiny since 1998, when he sold his company to M. Fabrikant & Sons, which partnered with Clover Corp. but subsequently sold that firm in 2006. The purchaser of Clover Corp. then formed Clover II. The situation never panned out at the high end, though the QVC business has fared well. “We were not growing, we were shrinking, and my potential and my vision was bigger than that, and I stood really strong,” Morris says. “When I got here, I had a fire under my butt.”

Haskell principal Frank Fialkoff views Morris as a shining presence within his stable. “We feel we acquired a real, true American icon designer,” he says. The two go way back. In the mid-Seventies, Morris consulted on the Pierre Cardin collection at Swank and, later, on Karl Lagerfeld at Victoria Creations. In both situations, Fialkoff was president. He became interested in buying Robert Lee Morris after learning of its availability from his accountant. “It came to me, it was the opportunity I’d really been waiting for,” Fialkoff says. “To have a vehicle with a true designer, something I owned top to bottom so I could control it — distribution, licensing, everything, and really build a business.”

Under Haskell, the brand features an “iconic core” and three fashion collections per year. Much of the former is comprised of Morris’ highly recognizable classics; the latter, of themed groups. Prices have been adjusted downward, now $150 to $1,000 for most pieces, though there will be some more expensive one-offs. Morris attributes this adjustment to the fact that he will no longer work in through-the-roof silver but in plated brass finished with various patinas. “I’m giving away a secret,” he says, anticipating others to pick up on the color idea. “You can plate in green and in copper and in all these colors — warm bronze, tobacco, shades of black and steel — so you have a symphony of colors. They have weight and they’re flexible.” Of the launch fashion groups, French Cuff, based on overlapping points, was designed for Donna Karan when Morris rejoined her for a runway season a few years back and the collection was never produced. Galactic is an exploration of spheres and “the whole idea of futuristic mechanisms — futuristic armor,” he says.

Morris’ story is well-known, though one chapter gets the lion’s share of the attention. Most people think first of his now-legendary collaboration with Karan; his arresting, powerful metal jewelry and other hardware were as integral to her early aesthetic as the jersey “easy pieces.” Their relationship started at Anne Klein. When Karan went out on her own, she asked Morris to work with her. “So many people have said to me, ‘I was the first one to ever discover you when you and Donna did that collection [in 1985],” he recalls. “I always want to say, ‘I guess you missed the first 10 years or so.’” By the time he started with Karan, he’d won the Coty Award and worked with Calvin Klein, Geoffrey Beene and Kansai Yamamoto.

Morris calls his time with Donna Karan and other collaborations “euphoria.” (Calvin, he muses, was “a party.”) “Whenever you’re working with a group in a harmonious way, creating something all together is euphoric. So being with Donna for all those years was euphoric. Being with Lagerfeld for a brief period of time was euphoric. When it all works together in the end and you have to skin yourself alive to get there, it’s worth it.”

In the nine years with Karan, he recalls, “we made a very strong impact and statement in fashion and jewelry.” The mood changed in the early Nineties, as the company grew and the pressures of doing two collections increased. Morris was about to move to New Mexico and become a shaman — by that point, he’d studied shamanism for 13 years — but then met his wife, who had no interest in the Southwest, and they stayed put in New York. But more had changed than the pressure to produce; fashion jewelry became virtually nonexistent on the runways as heroin chic ruled. It was, Morris says, a dismal time. He credits Tom Ford with forcing its comeback during his Gucci heyday: “He showed Halston-esque, Perreti-esque, Donna Karan-esque, Robert Lee Morris-esque stuff, and suddenly there was this huge explosion. FIT came calling for a retrospective.”

A decade-plus later, in 2007, came the CFDA’s first Geoffrey Beene Lifetime Achievement Award and, the following year, Ashley and Mary-Kate Olsen asked him to do a collaboration for their Elizabeth and James line. The Olsen connection, he says, “exploded my name to a whole new group of people who didn’t have a clue who I was. I found myself getting reinvented over and over again.”

Morris clearly appreciates being appreciated. He points out that the Olsens credited him as a mentor in their 2007 book; similarly, Kris Ruhs, a former Artwear artist, cited Morris in his tome.

Through Artwear, Morris was in on the transformation of SoHo from its pre-gentrification condition of edgy-industrial grit to, first, a thriving artistic community and, then, a tourist-centric retail mecca. He opened the store on Madison in 1977 but moved it to lower Broadway, “a magical space,” the following year. There he spent Sunday mornings from 9 to 12 looking at the work of jewelry makers — even today, he insists he’s not a jewelry designer but an artist who makes jewelry — giving thumbs up or down as he saw fit, and supporting the best of the former, even when the jewelry didn’t sell. He notes that point of departure between traditional retail and genuine patronage, and the thought triggers his long commentary on what it means to be an agent of change. “It’s dawned on me in a very simple sense, what I’m doing all this time is that I’ve been an agent of change, and I’m attracted to other people who are agents of change, and they are the ones who are leading the country right now.”

That said, his most immediate anticipated change concerns serious growth of the business. Industry sources say volume could grow from next to nothing to $10 million within two years, after which, assuming strong design and proper nurturing, growth could skyrocket. “We’re reintroducing Robert,” Fialkoff says. “We’re giving him all the resources he needs: the manufacturing, the sourcing, the advertising, any help he might need in design, and to relaunch the jewelry in the finer stores globally. And then we’ll follow up with other products that make sense.” He mentions watches, possibly next year. Morris says there could eventually be handbags, eyewear, a fragrance.

The firm enlisted Robert Burke as a consultant for the launch and beyond, and is close to signing with a major advertising agency.

Morris feels confident the universe had taken him to the right place. “I’m a very big part of the fashion world,” he says. “But on the other side of me, I’m wild, free, antiestablishment. I have the passion of a kid still. I don’t want to spend time in another board meeting, because I’ve got work to do and I’ve got things in my head that want to come out in material form. I don’t want to waste my time going to too many trunk shows, because I’d rather be back here making.

“I know,” Morris continues, “this launch is going to be huge.”

FINANCIAL TIMES: New look for a rediscovered gem

FINANCIAL TIMES | VANESSA FRIEDMAN

On Monday night, the great and good of New York, Hollywood and fashion mounted the stairs of the Metropolitan Museum of Art, evening gowns sparkling, tuxedos tailored, paparazzi snapping, to attend the city’s social event of the year: the Costume Institute Ball, which celebrates the opening of a new exhibit devoted to the art of dress. This season it is “Schiaparelli and Prada: Impossible Conversations”, an imaginary give-and-take between the two Italian designers, the first of whom died before the second ever hit the catwalks.

Yet, far from being a relic of the past, Schiaparelli-the-brand is currently being shaped for the future. Five years ago, Diego Della Valle, chairman of luxury goods group Tod’s bought the trademark to the house. Though he has allowed it to stay relatively dormant until now, the Met Ball has served as a wake-up call to the business. “It is a big opportunity to have the name become known by a new generation,” says the 58-year-old, noting that, while he had no part in planning the show, it would be a mistake not to exploit such a platform.

He has recently signed up the brand’s first ambassador – someone who will embody Schiaparelli publicly for the future – in the form of Farida Khelfa, the French-Algerian model/actress and former muse to both Azzedine Alaïa and Jean-Paul Gaultier. He has also committed to a timeline to launch: this July he will unveil the renovation of the original Schiaparelli Maison in Paris at 21 Place Vendôme, three floors of atelier, apartment, archive and offices; in September, the company will name the new designer; and next March, during the ready-to-wear shows, hold the first runway presentation.

More important, however, with Schiaparelli Mr Della Valle is articulating a new approach to luxury. Instead of creating and showing between four and eight collections a year, Schiaparelli will have only two. Rather than launching as a “lifestyle” brand offering fashion, beauty, homewares and gifts, Schiaparelli will be limited to clothing, accessories and fragrance/body lotion.

Instead of creating entry-level products that allow for price elasticity, Schiaparelli will also be very expensive – higher, Mr Della Valle says, than top-priced ready-to-wear brands such as Chanel and Tom Ford. He identifies the clothing as “prêt-a-couture”: a new level somewhere between very high-end ready-to-wear and the made-for-you couture extravaganzas that cost from €20,000.

In addition, instead of being available worldwide, Schiaparelli will be sold only at Place Vendôme; there will be no wholesale, and no advertising.

Production will be largely done in Italy. Yet, Mr Della Valle says, just because the brand “is not commercial, does not mean it won’t be profitable”.

“It’s not the normal way to do things,” says Robert Burke, founder of an eponymous luxury brand consultancy. “Traditionally, relaunching an old brand involved a star designer, a big show and flooding the normal distribution channels. But then, Schiaparelli was never terribly normal in the first place.”

Elsa Schiaparelli was one of the most influential female designers in fashion history, but her business suffered during the second world war and closed in 1954. “We could do collections for 20 years just from the archives,” says Mr Della Valle. “There are a lot of rich people in the world who want something very special.”

Arnaud de Lummen, a French entrepreneur who specialises in identifying and relaunching old luxury trademarks, echoes this view. “There is a great magic and attraction to a ‘rediscovered’ gem, which gives a sense of pride and connoisseurship for those who have it,” he recently told Women’s Wear Daily, the fashion industry publication.

This new model is not without its critics, however. “I don’t think restricting distribution to this extent makes something desirable for the younger generation,” says one luxury observer. “It’s a mistake most of the luxury brand managers make: they don’t understand that the younger consumer who has grown up with Twitter and accessibility, defines exclusivity differently.”

Indeed, the Schiaparelli model described by Mr Della Valle is more reminiscent of the historic structure of a couture house, which demanded clients come to the designer, than the new way of thinking, which has brands such as Chanel taking its couture shows (complete with extravagant sets and famous models) to clients as far afield as Asia. “Discovery is not dependent on inaccessibility,” says the observer.

Mr Diella Valle says he was attracted to Schiaparelli both because of the values the brand represents – “modernity, style, independence” – and because of its success in the lucrative areas of perfume (the house’s fragrance “Shocking” was the main rival to Chanel No 5 when it was launched in 1937) and accessories (Schiaparelli was as famous for her “shoe hat” as her “lobster dress”), which he calls “the most important part of luxury today”.

The brand also fits in to what has become something of a personal crusade to preserve the cultural heritage of Italy, be it La Scala (Mr Della Valle has pledged €5.2m for its restoration), the Colosseum (a pledge of €25m) or one of its most famous fashion names.

Still, he has taken his time with the relaunch. One reason could be that it has become increasingly clear how difficult re-energising an old house can be. For every super successful Chanel or Burberry there is an equally high-profile failure.

Aquascutum, the storied British house founded in 1884 and owned since 2003 by fashion entrepreneur Harold Tillman, went into administration in April.

Meanwhile, despite its vaunted pedigree, Paris-based Vionnet, which was acquired by Matteo Marzotto former president of Valentino, in 2009, has not been able to find the alchemical combination of modern designer, heritage inspiration and corporate investment and governance that creates aesthetic and balance sheet gold.

“No one wants an Ungaro on their hands” says Mr Burke, referring to another once-storied French couture house that went through a revolving door of CEOs and designers after the founder retired, and this year dropped off the Paris fashion show schedule.

This is an especially acute challenge for a house such as Schiaparelli, whose fame can be both an advantage (its history creates a structure for a new designer) and a potential problem (it also creates expectations on the part of the buying public that a designer may, or may not, meet).

Indeed, Mr Della Valle says he has been called “every week at least” for the past few years about various rumours regarding his appointment of a new designer.

So far the names that have been mentioned are Brit Giles Deacon (who briefly designed a capsule collection for Fay and also worked at Ungaro), Frenchman Roland Mouret, Belgian Olivier Theyskens and, most recently, John Galliano, the British designer who had to leave Dior after making anti-Semitic remarks.

Anna Wintour, editor of US Vogue and one of the most influential voices in fashion, suggested in the New Yorker magazine that Kate and Laura Mulleavy, the American designers behind Rodarte, would be good candidates for the post.

Mr Della Valle has denied all such rumours, and will simply say that he does not consider “being a star designer” a pre-requisite for the appointment. He is currently deep in the hiring process and estimates that by next September, just after the Schiaparelli & Prada exhibit at the Metropolitan Museum closes, he will have 40 people in Place Vendôme, with a further 60 joining the atelier by February 2013.

“I think this will be a wait and see situation,” says Mr Burke. “But if it succeeds it has the potential to make people in the industry rethink the way they present and distribute product. Fashion will copy anything if it works.”

WWD: Fashion's Big Issue: Succession Planning

WWD | MILES SOCHA

PARIS — Crafting succession plans for its creative departments is no doubt a smart strategy for any large fashion firm.

But the scale of today’s most powerful brands is increasingly insulating them from turbulence when designers depart — whether from death, retirement, flameout, poaching or otherwise.

Christian Dior — one of the hottest topics of this European fashion season — is a case in point.

The search for a successor to disgraced designer John Galliano has now clicked into its second year — a delay which so far has not proven an impediment to the French firm’s business momentum. Operating profits more than doubled last year as sales in Dior’s own stores advanced 28 percent.

Dior has remained mum on its intentions, insisting it will take all the time it needs to find the right designer.

RELATED STORY: Christian Dior RTW Fall 2012 >>

The house is believed to be mulling continuing with a team approach, possibly adding some young, up-and-coming talents. The studio is currently headed by longtime Galliano collaborator Bill Gaytten, who has earned encouraging reviews — and traction at retail — for subdued collections faithful to Dior’s iconic, Fifties-flavored glamour.

As reported in these columns, Dior has also conducted talks with hot young Parisian design Maxime Simoens, who made his debut Monday as the creative director at Leonard. Sources indicated Leonard and Simoens are likely to reveal a separation by mutual agreement.

While far less known and accomplished than other contenders for the Dior job — who have ranged from Marc Jacobs to Alber Elbaz — Simoens’ story is a compelling one with echoes of Yves Saint Laurent, who famously succeeded Christian Dior following the founder’s death in 1957.

Aside from a physical resemblance — a reed-thin physique and prominent eyeglasses — Simoens, 27, is a French wunderkind. The bio on his Web site notes that he became the first designer ever to be accepted as a member of the French Fashion Federation before having shown any of his collections.

Simoens has repeatedly denied to WWD that he has had any contact with Dior. 

Dior officials had no comment on Monday.

Observers agreed that decisions today about creative leadership are tied to the brand-related considerations, rather than a designer’s vision or personality.

“The overused term of brand building has become paramount,” said Robert Burke, president and chief executive officer of the consultancy Robert Burke Associates in New York. “The brands today more than ever are attuned to how to run a business.…No longer is it a one-man show — not with so much business at stake.”

“When a designer has managed to turn his/her company into a brand — with product pillars, codes and strong identity, combined with very efficient management — then succession remains a big issue, but at least there is less pressure on timing,” agreed Floriane de Saint Pierre, who runs an executive search and consulting firm in Paris. Besides the Galliano drama, the industry has been shaken by other unexpected designer shifts.

In 2010, there was the suicide at age 40 of Lee Alexander McQueen, and the sudden exit of Christophe Decarnin from Balmain following stress-induced health issues. Designer underlings succeeded both men: Sarah Burton and Olivier Rousteing, respectively.

More recently, the Jil Sander company persuaded the house founder to return once again, dislodging Raf Simons as creative director, despite almost universal acclaim during his seven-year stint.

Also, amid robust growth in sales and profitability last year at Yves Saint Laurent, Hedi Slimane is expected to succeed Stefano Pilati, who staged his swan-song show on Monday.

Succession is also a timely and highly sensitive subject given that a good number of major designers — including Giorgio Armani, Oscar de la Renta, Karl Lagerfeld, Krizia’s Mariuccia Mandelli, Vivienne Westwood and Ralph Lauren — continue working into their 70s.

It’s widely known in the industry that the “S” word is verboten at companies including Armani and Chanel. “And look what happened to Alber Elbaz and Jean-Paul Knott when they dared enter the Krizia lair,” said one European source, referring to short-lived stints by the Israeli-born and French designer, respectively, at the Milan-based house.

Executive search and other experts agreed that a visionary creative leader adds vital verve to a fashion brand, making succession planning crucial, while cautioning that transitioning to new design talent is a murky enterprise fraught with complications.

“We’ve all seen what’s happened when it’s the wrong designer,” Burke pointed out. “But that tends to happen when there’s less clarity about the direction of the brand or the label.”

He cited Valentino as an example. The Rome-based house endured a few turbulent years following the retirement of its founder in 2008, and before the current designers, Maria Grazia Chiuri and Pierpaolo Piccoli, found their footing. The duo, who had been in charge of accessories under the house founder, have been faithful to the founder’s vision and the brand’s values, treated with a lighter, fresher hand.

“It took not just designers. It took the ceo and all the people in the organization to take it in the right direction,” Burke said.

“I think it’s terribly dangerous to not have a succession plan,” stressed Vanessa Denza, the founder and owner of Denza, a London-based fashion recruitment agency.

She lamented that few designers deliberately cultivate and retain their eventual successors. In her view, Graeme Black was a “natural” to eventually take over from Armani. However, the Scottish-born designer exited Armani in 2001 after seven years, and has since done stints at Ferragamo, his own brand, and Boss Black women’s.

Denza applauded Diane von Furstenberg for last year recruiting Yvan Mispelaere, a seasoned talent with experience at Prada, Gucci, Louis Féraud and Chloé, to be her creative director. “She’s the president of the CFDA. She is a pragmatic woman,” Denza commented.

Observers agreed that securing design talent today is increasingly challenging for a multitude of reasons, including such contractual obligations as non-compete clauses that limit mobility.

Concetta Lanciaux, who runs a luxury advisory company based in Switzerland, noted that finding successors is more difficult today because senior “high-talent” designers prefer to continue working with the brands they have relaunched. Examples of this profile would include Elbaz at Lanvin and Nicolas Ghesquière at Balenciaga.

What’s more, the promising “next-generation” talents — including Christopher Kane, Alexander Wang and Damir Doma — have succeeded in building successful, sizable companies, making moonlighting for another brand a less urgent priority, and a less sought-after career path, Lanciaux said.

A pioneer who introduced management succession planning as the longtime head of human resources and synergies at LVMH Moët Hennessy Louis Vuitton until 2007, Lanciaux noted that the vagaries of creativity make it more challenging to anticipate what to do when a brand requires new design leadership.

“Designers, you have to leave them free to develop their creativity,” Lanciaux explained. “There is this affinity to the brand — this is paramount in creative functions, while management is transversal.”

Design studios can yield high-talent successors.

“Nobody could anticipate that Tom Ford would emerge at Gucci, or that Sarah Burton would emerge to the extent she has today,” Lanciaux said.

Yet she cautioned that not all second-in-command designers can rise to the challenge. “Next to these successful examples there are many unsuccessful ones,” she said. “Being a No. 2 for too long may freeze a designer in that profile.”

De Saint Pierre noted that France is the first country with a strong fashion industry to have dealt with major successions: Dior in the late Fifties, Chanel back in the Seventies, in addition to Givenchy and Yves Saint Laurent more recently.

Multiple observers noted also that once-strong houses can recede from prominence, with Emanuel Ungaro and Claude Montana frequently cited as examples of ill-handled successions.

According to de Saint Pierre, there is no rule for finding a suitable successor. “It just depends on talent and personality. One needs to be creative, to deal with an extremely high level of work and pressure, to have a modern inclusive management style and to fit with the brand,” she said. “Creative directors with true creative vision and true capacity to understand the newness of the 21st century are key to driving luxury global brands. “

Echoing other observers, Mary Gallagher, Paris-based associate for New York search firm Martens & Heads, noted that Dior is still performing very well even without a star designer.

Still, “I do think a figurehead helps sell the dream, especially a rare talent like Galliano,” she said. “I think the customer, unless it’s a die-hard fashionista like Daphne Guinness, does not need to have Lee [Alexander McQueen] or John [Galliano] actually sketch and drape her dress. The customer buys into the quality, design, cachet and reflected glory of a fashion house. And in most cases, it’s the studio that is proposing to the creative director, who then approves the sketch or collection.”

Observers noted that brands also require an up-front designer because the press, especially, often demands a name — and in some cases, a hero — to engender their ongoing interest.

Joelle de Montgolfier, director of Bain’s luxury group for EMEA (Europe, the Middle East and Africa), noted that human resources departments are typically engulfed in the immediate needs of business, and “not systematically forward looking.” Where succession planning exists, it rarely goes beyond management and the ceo position.

“It’s the common bottleneck: People are absorbed in daily execution,” de Montgolfier said, noting that’s especially the case during times of economic downturn and at a time when the “speed of change” in business life is accelerating.

What’s driving growth in luxury goods is the expansion of directly operated store networks and emerging markets, and creative concerns are rarely top of mind, she said. Still, “we are absolutely advocates of advance planning for future growth, and talent would be part of that,” she added.

De Montgolfier noted that many luxury brands have been around for generations, meaning they have survived the passing of their founders.

“Look at Hermès. They don’t have that famous designer in place and no one’s worrying about how they’re faring,” de Montgolfier said. “The weight of power is a bit more balanced with the rest of the organization. People have come to realize that the thrust of the company and its ability to grow goes beyond the creative talent,” she continued, mentioning the example of Ford, whose 2003 exit as creative director at Gucci Group did not impede its global advance.

Brands can become so significant in the marketplace that they live a “life of their own,” de Montgolfier said.

“It’s become a global industry and a very professional one,” she said. “It’s not about a person making an impression. It’s about a brand meant to survive across decades.”

WWD: L Capital to Shop for Mid-Market European Brands

WWD | ALEX WYNNE

PARIS — L Capital Management is going shopping. The LVMH Moët Hennessy Louis Vuitton-backed investment vehicle said Friday it had closed its third round of funding, with commitments in excess of 400 million euros, or $533 million at current exchange.

The firm, whose previous investments include the contemporary brand stable of Sandro, Maje and Claudie Pierlot, plans to buy into between 10 and 15 European midmarket lifestyle and retail brands, it said.

“They are already looking at two or three companies in Europe,” a spokesman for L Capital said, without revealing details.

There is speculation that L Capital has kicked the tires of U.K.-based retail jeweler Aurum, owner of the Mappin & Webb, Watches of Switzerland and Goldsmiths chains. Aurum was put up for sale by Landsbanki Islands hf, an Icelandic bank, last year.

The economic climate in Europe is likely to see certain family or designer-owned brands thinking twice before rejecting financing, where in the past they may have held on tight to their independence.

“European brands are particularly interesting right now, because of the financial situation. It’s not as easy for them to get funding from banks as it has been in the past,” said John Mitchell, president of retail and luxury goods consultancy Robert Burke Associates.

There are several high-end European brands that may be in the market for investment. Market sources cited Charvet, Christian Louboutin and Kiton as potential targets for investors.

But L Capital has made a habit of investing in midrange firms that have a strong retail footprint already, including Gant, Pepe Jeans and Hackett Group.

“L Capital invests in brands that are too small or do not have enough of a luxury positioning for LVMH,” HSBC analyst Antoine Belge commented.

“They are the champions of retail, and there are not many specialist retail [investment firms] out there,” noted Karine Ohana, owner of boutique M&A firm Ohana & Co.

In the midmarket segment, companies that may be seeking investors include French dancewear and shoemaker Repetto, lingerie maker La Perla and high-end linen brand Frette, according to sources. The latter two are owned by San Francisco-based JH Partners, which may be looking to make an exit.

L Capital is also likely to target brands that have strong international expansion potential, especially in emerging markets.

“Changing demographics, consumer behavior and emerging new market segments in mature economies in Europe and the U.S., an increasing wealthy middle class and emergence of important, powerful economies in China, India, South East Asia and South America create significant demand for lifestyle brands,” L Capital Management chairman Daniel Piette stated.

The investment firm’s sister fund, L Capital Asia, made two acquisitions in February. The first was a minority stake in Chinese contemporary clothing firm Trendy International Group, which owns the Ochirly brand, one of China’s leading domestic labels in the fast-fashion segment, as reported. The second is an 8 percent stake in Indian ethnicwear retailer Fabindia, which has a total of 148 stores in five markets.

WSJ: Dreams and Dread: Countdown to a Designer's First Runway Show

WALL STREET JOURNAL | CHRISTINA BINKLEY

Theia designer Don O'Neill has been having night sweats since December. His first-ever runway show is Wednesday, and things keep going wrong.

A week before the show, an important gown arrived with its elaborate embroidery completed perfectly—all on the wrong fabric. An Italian wool-jersey fabric shrunk dramatically each time it was ironed. Models have been chosen—and dropped out. "There are so many variables that are out of your control," says Mr. O'Neill. "All of those jigsaw pieces have to come together."

More than 300 designers are showing their collections on the runways this week in New York before the shows move on to Europe. That's more than will show in London, Milan and Paris put together. Chalk it up to American entrepreneurial spirit and the lack of a controlling body overseeing the shows. In Europe, major fashion weeks are governed by national councils that control who can show and when.

Fashion consultant Robert Burke estimates that out of the 308 labels showing in New York, only 40 have annual revenue of more than $10 million. That means the other 85% of labels are effectively mom-and-pops with big dreams.

Among the handful of first-timers hitting the runway this week are Theia, Billy Reid, Suno and Levi's.

Last year, Billy Reid, Suno and Theia held informal presentations for fashion editors and buyers instead. Jenne Lombardo, fashion director at Milk Made, a production house that backs emerging designers each season, says editors and buyers prefer presentations for their ease and speed. It takes an hour to see a 15-minute runway show, allowing time for the mechanics of seating and other preparations. But a 15-minute presentation takes just about that.

Even so, the allure of the runway is hard for designers to resist. Len Peltier, Levi's creative director concedes that he worries about seeming "presumptuous." "We're excited to launch something on the world stage," he says, but "we know we're not a high-fashion brand."

Runway shows create more opportunities for video, and photographers can snap pictures from risers at the end of the runway—making it easier for labels to use the show later in marketing.

But for all their promise, runway shows are full of heartache and fear. Mr. O'Neill, the designer of three-year-old Theia, has seen his designs on celebrities such as Angela Bassett and Taylor Swift. For his own show, he dreamed of a Plexiglas runway glimmering beneath the evening gowns for which the label is known. Then he had to nix the Plexiglas when the cost estimate arrived: $7,000. His runway will be covered in white carpet.

The designer, whose label is privately held, says he doesn't have a firm budget for the show, but he knows he shouldn't spend too much. He tries to cut corners where he can. The show is set to take place Wednesday afternoon at a venue 40 blocks from the Lincoln Center tents.

One job of a runway-collection designer is to wow the jaded fashion magazine editors in the audience. This crowd is looking for signals that a designer has buzz and artistic talent—and for ideas for their own pages. Often, pleasing them requires designs that are very different from what a designer might present to shoppers.

Yet Mr. O'Neill worries that in his haste to create dramatic fashions in fine fabrics, he may have created several too-costly looks, including a lambskin poncho with a Mongolian lamb collar. "Either I get fired after the show because I spent too much," he says, "or it'll be a huge success and I can keep my job."

Another faction to please with his collection: his sales team. "Why is it so dark?" asked one saleswoman, referring to a number of looks in black. "Because that's what I'm feeling," he said.

A week before his show, Mr. O'Neill said he had completed about half of the 30 looks he was aiming for.

Getting models has been a particular problem. Mr. O'Neill settles on a model, and then her agent warns her to hold out for a bigger label. "If you aren't Marc Jacobs, it's hard to get models. And I'm not Marc Jacobs," Mr. O'Neill says.

Despite the stress, Mr. O'Neill says he is counting on results. "There are some publications that won't even come look [at his presentations]. So I'm hoping that this will get their attention."

Being the lead designer has helped him look back with sympathy at his previous bosses at other brands, such as Carmen Marc Valvo. "At Carmen, I'm now understanding why he was how he was before a show," says Mr. O'Neill. " Very, very stressed out."

WSJ: Fashion's Other Season Takes the Spotlight

WALL STREET JOURNAL | RAY A. SMITH

What comes between spring and fall? In the fashion world, it's not summer, it's "pre-fall." If all goes according to designers' and retailers' plans, it could be one of the most lucrative times of the year.

The term pre-fall refers to what used to be unglamorous, mostly commercial collections meant to tide shoppers over in between the big spring and fall seasons. They were typically filled with staples like sensible blazers, skirts and sweaters in unchallenging colors.

Pre-fall fashions were once low-key affairs, shown by private appointment—if the collections were shown at all.

But in the past few years, pre-fall has started stealing the spotlight with dramatic, red-carpet-ready looks and shows from high-profile designers including Oscar de la Renta and Karl Lagerfeld for Chanel that are on par with the designers' spring and fall collections.

For the past month, designer labels have been showing their new collections for pre-fall 2012. After a pause for the holidays, there will be more presentations from big names like Givenchy, including shows in which models just stand rather than walk a runway.

That's partly because despite its silly-seeming name, pre-fall is serious business. Pre-fall designs begin arriving in stores in May and June—two to three months before fall clothes start arriving—and generally stay on the floor until January.

This means the clothes are generally sold at full price for longer than those from the fall collections, before being marked down.

"Resort" collections, which come in between fall and spring and generally start entering stores in November, have also been rising in prominence and revenue, but pre-fall's timing has given it more celebrity buzz.

The pre-fall shows coincide with the early-year entertainment awards ceremonies including the Golden Globes and the Grammys.

"These shows have become the perfect marketing vehicle for pre-fall," says luxury goods consultant Robert Burke. "You show it in December and it's on the red carpet in January and February and in stores in May."

Pre-fall, in terms of a fashion season, is supposed to start being worn somewhere around mid- to late-August and early- to mid-September. The timing presents a weather-temperature challenge for shoppers and retailers.

"When these pieces hit the store in June or July, depending on the part of the country, it can be 80 or 90 degrees, so we're not only looking for really wow emotional pieces for the fall season with fur and leather, but also for lighter weights" and lighter colors, says Colleen Sherin, senior women's fashion director at Saks Fifth Avenue. It's something the retailer is especially concerned with as many of its stores are in the South, she says.

The in-between season also presents a challenge for designers. Michael Kors this month showed a coat worn with shorts, while Vera Wang showed dark-colored sleeveless fur coats and wool shrugs with light chiffon dresses in colorful spring-like prints. Mr. de la Renta showed short-sleeve outerwear and a silk merino "cardigan coat" with a mink collar.

The rise of mid-season collections began in earnest following the global recession of 2008, when even luxury shoppers stepped back from conspicuous spending. Retailers requested more deliveries from designer labels, hoping that rotating in more new merchandise would tempt shoppers to again open their pocketbooks.

Karl Lagerfeld's elaborate resort show in May 2010, held against the backdrop of Saint Tropez's harbor with models arriving by speedboat and celebrities like Diana Kruger flown in to sit front row, marked a watershed moment for these pre-season collections. Shortly after that, more designer labels put on shows or presentations and fashion magazines and websites eagerly covered them.

Since pre-fall has a longer selling season, those collections are "probably representing now almost 60% to 70%" of a designer's overall fall collection sales, says Mr. Burke. "So it's putting more pressure on designers to create bigger pre-fall collections."

A spokeswoman for Oscar de la Renta, who showed 58 looks in his pre-fall runway show, said pre-fall is, in general, a big collection for the house "and very important sales-wise."

For Jason Wu, "the spring and fall collections are the main image drivers of the company," he says. But in terms of business, the pre-seasons are doing the heavy lifting.

For fall and winter, about 60% of orders from a group of key retailers is from the pre-fall collection, the designer says, while 40% is from the fall runway collection. Mr. Wu even took the opportunity during pre-fall to launch another bag line rather than wait until his fall collection.

With increasing up-to-the-second coverage, a trend shown on the runways for spring gets exhaustive exposure—and is worn by celebrities and tastemakers soon after the show is over. By the time that look reaches stores six or seven months later, it already looks and feels dated, says Catherine Moellering, executive vice president of Tobe, a New York-based trend-forecasting firm.

By January, "spring runway looks would have been worn already" by celebrities and personalities, says Mr. Wu.

That, of course, is a no-no for celebrities on the red carpet. For her appearance at the People's Choice Awards last January,Natalie Portman wore a button-front silk chiffon pleated dress from Mr. Wu's 2011 pre-fall collection.

WSJ: Beyond Bridal: Vera Wang's New Look

WALL STREET JOURNAL | CHRISTINA BINKLEY

Quick: Who is Vera Wang?

Hoping to alter the obvious answer—"bridal gown designer"—Ms. Wang is about to rebrand herself, moving deeper into ready-to-wear clothing. In an effort to earn greater regard—and profits—from the mainstream fashion audience, she will place her famous name on her midpriced line of ready-to-wear, which is now called "Lavender" and will be called "Vera Wang."

She is also broadening her reach in mass fashion with new lines of teen clothing and menswear. The moves, announced today and Thursday, include a line of rental tuxedos for Men's Wearhouse and a clothing brand called Princess, which will be sold at Kohl's.

The initiatives, part of a strategy to unleash growth in new ventures, will move Ms. Wang further beyond wedding-related goods than ever before. They also will leave her with a tiered pyramid of brands—and, if all goes well, a much larger stream of revenue from ready-to-wear.

At the top will be her small but expensive luxury bridal and ready-to-wear lines. The fashion line she shows on New York Fashion Week's runways will now be called Vera Wang Collection—or just "Collection," as Ms. Wang's team is already referring to it. (The move evokes Calvin Klein, which shows the Calvin Klein "Collection" line on New York's runways, in addition to the company's underwear, fragrances and other products.)

The new Vera Wang line of ready-to-wear will fall in the middle, along with her long-established licensed products, from fragrance to eyewear. Plans for the ready-to-wear line include clothing, accessories, handbags and jewelry, says Mario Grauso, president of the closely held Vera Wang Group. At the bottom tier are lower-priced clothes and jewelry for Kohl's, David's Bridal and Zale Corp.

It's from the middle section that the company's growth is expected to come, with new Vera Wang dresses costing just a few hundred dollars. That will make them accessible to far more people than the current runway line, where dresses cost $1,300 and up. "In the years to come, that middle brand will be what we will develop," says Mr. Grauso. "The middle is huge."

The new emphasis on ready-to-wear also offers a peek into the mind of the woman who dressed both Chelsea Clinton and Kim Kardashian for their weddings. Despite the princessy gowns for which she is known, Ms. Wang's real passions in design are edgier—the urban daywear she wears herself.

"When I design ready-to-wear, that's about me. That's about how I live," she says. "I'm really a luxury T-shirt, sweater kind of girl," she says, but, she acknowledges, "People don't think of me that way."

But the strategy is rife with risks. Ms. Wang has worked for years to build a luxury brand and must avoid diluting it or confusing customers. And though Ms. Wang may be the world's best-known bridal designer, with successes in high-profile gowns (such as the strapless cobalt-blue confection Michelle Obama wore to the Kennedy Center last week), her track record with ready-to-wear is spottier. Her nonbridal clothes have often struggled to find mass appeal. Lavender was temporarily shuttered during the financial downturn, and has been producing only shoes for several seasons.

"She started with a bridal collection and then extended into other areas, but most of it relates back to bridal," says Robert Burke, a fashion-industry consultant who has in the past advised Ms. Wang. She has had a string of successes with ancillary bridal products—from a line of budget-priced bridal jewelry to mattresses—an endeavor that came out of research showing one thing many newlywed couples buy is a mattress.

"We don't do horribly," said Mr. Grauso, when asked about Lavender's performance—hardly the voice of confidence. But he and Ms. Wang think Vera Wang will do better than Lavender did with a stronger fashion market, now that the financial crash is over, and with a collection of products more clearly branded as Vera Wang.

Mr. Grauso is dispassionate about the small, luxury-priced "Collection" line, which appeals to an artistically minded clientele and has never made profits. "There's much less of a customer for Collection," concedes Ms. Wang. "The cost is enormous. I don't make money doing it. I lose a lot."

"How many women are really interested in clothes off the runway that are a little challenging and weird-looking?" posits Mr. Grauso, a longtime fashion executive who isn't fearful of challenging clothes himself. As he spoke, he was wearing a pair of Rick Owens blue jeans with a crotch at midthigh and a hem above his ankle.

Ms. Wang's bottom-tier efforts have had greater success. In August, when Kohl's Corp. reported its profits rose 17% in the quarter, the store chain attributed the rise in part to the success of Simply Vera, Ms. Wang's line of lower-priced fashions.

The new Princess line for Kohl's is set to capitalize on that, with girlish clothes designed to appeal to teens and young women in the twenties. A person familiar with the plans says the new line is expected to bring the Vera Wang Group revenue from the various Kohl's deals to $500 million annually within two to three years, with Vera Wang Group's total revenue expected to be more than $1 billion.

The new Kohl's line is expected to be on store floors in July 2012, initially with clothes, which will be followed quickly by handbags, and shoes. "This is going to be girly," says Mr. Grauso.

Men's Wearhouse will start taking reservations for the tuxedos in January, for weddings beginning in April, says spokesman Doug Ewert. A high-quality super 130s wool fabric and trendy trim fit—two button jackets, side vents and flat-front pants—give the black or gray tuxedoes a "Mad Men" look. They'll be among the retailer's most modern looks, Mr. Ewert says. The deal also allies the three biggest bridal fashion purveyors in North America: Vera Wang, Men's Wearhouse (which says it rents one out of every three tuxedoes in North America) and David's Bridal, which cross-markets with Men's Wearhouse and sells Vera Wang White brand gowns.

Ms. Wang says she doesn't feel any pangs of regret at putting her luxury name on a midpriced product. "I brought Mario on to do this," she says.

Before joining her, Mr. Grauso worked as president of Puig Fashion Group, where he had the unlovely job of firing designer Olivier Theyskens from Nina Ricci. That move was considered wise for the brand's financial success but was received with fury by fans of Mr. Theyskens' ethereal, haunting designs. Yet Mr. Theyskens has gone on to success designing the midpriced Theyskens Theory line, and Nina Ricci has found its footing under designer Peter Copping.

Ms. Wang's luxury-priced lines are like icing, says Mr. Grauso—in need of something to support them. "Icing," he says, "is only good if there's a cake."