Fashion Notebook

Financial Desk: Sales Down, But Earnings Up 40% for Gap, as Retailer Cuts Marketing Budget

We hate to see this, because it means less creative, but cutting its marketing expenses was one tactic that helped Gap bolster its bottom line, even as sales continued their slide into the red.

In addition to other cost cutting measures that included reduced remodeling efforts for Old Navy stores, and a $15 million pre-tax earnings benefit, Sabrina Simmons, Gap Inc.’s EVP/CFO, said in an earnings call late Thursday that “lower marketing expenses” also helped lift earnings 40% to $249 million, for the quarter ended May 3.

So where was the blood spilled in the marketing department?

Well, ad spend dropped almost 18% from the year-earlier period, closing at $93 million for the quarter. The $21 million reduction was due in large part to the absence of TV spots for the Gap brand, Simmons said. However, she added that shareholders and analysts shouldn’t expect such cuts to continue.

“Unlike this first quarter, we expect our marketing expenses in the second quarter to be fairly similar to last year’s level of $88 million,” she said.

Yay! Maybe we'll have some more fun creative to look forward to this summer, when we're all staying indoors and running the air conditioners to escape from global warming. That is, though of us who have TV. (We're luddites, y'all, except when we visit our wife to watch rounds and rounds of Lifetime Movies.)

While earnings might have been a bright spot, and showed the beleaguered firm capable of trimming costs for the benefit of its investors, sales trends showed signs of trouble amid an economic slowdown that has the whole retail industry reeling. Comp store sales at Gap North America dropped 7% for the quarter to $976 million, and Old Navy posted an 18% decrease, dropping to $1.2 billion in sales.

If you don't have your financial party hat on, folks, that means, pretty much, "things sucked  over the past three months." Which is too bad for Old Navy, because we, (and the wife), LOVE those new ads. It's like Gossip Girl meets Fred Flare's Crafternoon Delights. Seriously, some fierce-ass dresses that might have the retailer beating Forever 21 at its own game. Seriously, if you haven't seen these ads (also screen-grabbed, above, right), they just might change the way you view Old Navy. They did for us.

Meanwhile, on the richer side of things, Banana Republic's comp store sales dropped 4% to $538 million and Glenn Murphy, chairman and CEO,  said that the brand had been affected by challenging traffic trends, and an “uncharacteristically promotional” environment at the apparel chain’s direct competitors. Thus far, Banana Republic has avoided playing the promotional card to drive sales.

“We’re watching the competitive landscape very closely,” added Murphy. “And [we] are prepared to make the necessary adjustments to drive traffic if this promotional level that we are seeing currently was to continue.”

Yay SALES that are sure to come. Because, honey, that's a brand for the aspirational rich, not the real rich, and we ain't getting any more money any time soon. That is, until Obama is in the White House, but we don't want to get political. We just want good health care, education, and leadership that will get us out of this war, y'know, in less than 100 years. But we digress.

Net sales for the company dropped about 5% to $3.38 billion for the first quarter. The company has maintained its guidance for fiscal 2008 earnings per share to fall in the range of $1.20 to $1.27.

Lessons in Branding: Levi's 2.0

If you haven't already, check out this story about Levi's "Jumpin' In" online viral campaign.

Now, I'm sure a lot of your out there at the apparel companies are salivating over the whole online thing, but you're probably pretty uncertain how to go about doing it. After all, you're already beset with fickle consumers whose whims seem to change with the season and who are constantly pounding on the  castle door with cries of "More! More! More!" so why move into the web where EVERYONE is fickle and decisions are made in less than a nanosecond?

Well, consider this example.

That "Jumpin' In" campaign—which features online videos of teens, well, jumping into their jeans through a mélange of backflips, roof dives, etc., and launched May 5 to build buzz for the "Live Unbuttoned" global campaign for the brand's flagship 501 collection—snatched some 3.5 million hits in 10 days. And if that doesn't factor into your media membranes, here's some more traditional fodder: The spots got play on "Good Morning America" and coverage from the Grey Lady's new style challenger Wall Street Journal.

Here's our comic-strip style flip book of a scene from one of the viral videos, which by the way, we think are totally stunning in an "I can't believe he freakin' did that" kind of way.

"[Jumpin' In] was supposed to be a small seeding activity," Robert Cameron, vp-marketing at Levi Strauss, San Francisco, told journo Gregory Solman at our sister-pub Adweek. "We didn't know it was going to blow up. So we're meeting with BBH on how to chase this. What do we do to adjust the strategy and ride the wave?"

Listen, you've heard this from us and our friends a million times already. The online space, and viral videos in particular, don't necessarily guarantee the kind of success that you can see here with Levi's version. But they do allow you to experiment, without the expense of a real test market, with some creative that just might pique consumer interest in a similar way. And you know who can explain this better than we can? Kevin Kells, the CPG sales head over at Google. Kells might be more in the niche of beauty and, well, packaged goods marketing, but what he has to say about the online thought process for ad creatives is, in our humble estimation, universally applicable.

Here's an exerpt from our convo with him a while back:

          Brandweek: What do you tell CPG marketers who still rely on traditional print and TV buys?                  Kevin Kells: I tell them that online advertising is more efficient, but that they have to look at               sponsored links as doorways that take your consumer where they want to go, where you can add
          value to their life. The problem is that traditional media is ingrained for many of those CMOs and
          marketers. They have 30 years of data on TV and magazines. So even though it's easier to get ROI
          figures from online ads, you’re up against 30 years of market data.

 
BW: Would you revolutionize those departments to have them doing it all online?
KK: No. It’s not to say that they should stop doing that stuff, but there’s a way to go a little deeper online around consumer insights. Instead of focusing on a small amount of creative, they should be making more. They should be making 1,000 digital assets a year as opposed to three television assets.
 
BW: Does what you’re suggesting require multiple times the amount of creative?
KK: Yes. That’s an obstacle and that’s paralyzing to them. Conceptually now we’re beginning to get them to know that they need to be online with different stories and they have the infrastructure. But in order to put all of those assets in the right place, someone does have to make them. That can be solved by more efficiency. There’s a clunky system right now between the client and their multiple agencies. That’s why you see the emergence of agency networks like WPP.

OK, class dismissed for now. Next time, we'll take a look at those other web items that are probably giving you both a surge of excitement and perhaps some sweaty palms: widgets, the online applications that you've no doubt seen on your kids (or hey, maybe even your own) Facebook and MySpace profiles, or, if you're chic tech nerds like us, those wonderful things that pop up when you hit F12 on your Apple computer.

Lessons in Branding: How Steve & Barry's Does a Lot With a Little

OK, so if you haven't read our news story (you know, that OTHER
job we have), about Steve & Barry's launching a new collection of
branded "Sex and the City" t-shirts and tank tops ahead of the year's least-anticipated and most-loathed premier (to us), check it out here. If you're link-a-phobic, here's the brief:

"Further cashing in on the stars of HBO's hit show Sex and the City, Steve and Barry's has launched a collection of branded T-shirts and tank tops designed by leading actress Sarah Jessica Parker.

The collection, with all items priced under $9, hit cheap n' chic retail stores last week, ahead of the May 30 premiere of Sex and the City: The Movie at theaters nationwide. The T-shirts and tank tops come with printed phrases including "I'm with Mr. Big" and "I (Heart) Sex and the City," as well as images of the characters from the TV series."

"Millions of women have flocked to our stores since the launch of Sarah Jessica Parker's Bitten brand last year, and Sex and the City: The Movie merchandise is a perfect complement to that collection," said Howard Schacter, chief partnership officer at Steve & Barry's, New York.

OK, so why does this matter, and why, as we contend in the headline to this post, do we see it as a brilliant example of doing "a lot with a little." Well, pretty much, it's because Steve & Barry's is likely to get a groundswell from this, selling not only these t-shirts, but also more items from the "Bitten" collection that the retailer trotted out from Sarah Jessica Parker (she of the Skeletor visage, pictured left, in that show that proffers female empowerment but really ends up, sing it with us Obama, "more of the same," in our humble opinion, and that of others) last year. And better yet, they'll do it—again—with barely a cent spent on advertising.

This isn't a groundbreaking marketing idea—big film coming up, you've already got a product tie-in to one of the characters, so plug her again and ride the film's publicity and boon in related Internet searches to see the sales needle get a lift—so why aren't more people doing it?

Well, the answer to that might be that they're just too damn rich. And that's not a slight.

Think about it. When we're flush, it's all dinners at BLT Prime and brunch at Essex, but when we're broke, it's poulet roti chez nous with rosemary and other fresh herbs, that serves two and, we dare say, tastes just as good as the same dish at either of those tony joints. Leftovers are broken down into chicken salad, the bones boiled into a chicken soup. And presto! We've got lunch for days. And for about half the cost of a porterhouse at BLT. Sure, we definitely got way more out of cooking the chicken at home and getting creative with stretching the meals, but that's because we had to. And once our coffers are full again, you'd better believe we'll redefine dinner—like retailers and apparel companies define a "launch"—as a strictly Tourondel affair. N'est ce-pas?

So what if the big agencies and brands just starved their budgets on a few projects and saw where it went? Listen, we're not saying that Nike should book Sharapova for a tennis commercial and then forego a TV spot, but maybe test out an anemic cash flow on a smaller project and see what the creatives come up with. You never know where the results might lead. Maybe even straight to sales.

Stay tuned to see how well the "Sex and the City" tops do. You know we are.

Oh No She Didn't! Jill Granoff Leaves Liz Claiborne for Kenneth Cole

The Gossip Girl in us finds this one kind of delicious, but the journo in us finds it kind of a headscratcher.

Jill Granoff has left her spot as the EVP of direct brands at Liz Claiborne (overseeing the company's golden children: Juicy Couture, Mexx,  Kate Spade and  Lucky Brand) to become the CEO of Kenneth Cole Productions. At her new gig, which starts May 5, Granoff will be in charge of retail, wholesale and licensing for all domestic and international operations, effectively taking over the responsibilities of brand namesake Kenneth Cole who will continue on as chairman and chief creative officer to manage the brand's positioning, product, design and advertising (maybe he can make it seem less tired and derivative!). Both are pictured, at right, in our fun-with-Photo Shop estimation of what the new deal must look/feel like.

Ok, we get it from an ego perspective, CEO trumps EVP, no question. But it kinda seems like she traded one sick child for another. While Claiborne has its own issues, including that recent $451 million loss, they at least appear to be on the road to recovery. (For more on Claiborne's situation, check out our feature, "Rough Measurements"). Kenneth Cole, on the other hand, seems to be in some seriously bad shape and we don't hear any buzz about them getting better. In fact, we've been hearing that they're on the verge of a turnaround for at least the past two years. And nothing.

In its most recent earnings report (from March 4), Kenneth Cole Productions posted net sales of $119.5 million for the fourth quarter, practically flat against last year. For the full year 2007, sales were $466.4 million, down 5.5% from 2006. Not so bad. Er, until you look at the profits. The company posted a net loss of $3.1 million, or 16 cents per diluted share, for the fourth quarter, versus a gain of $8 million, or 39 cents a share, in the year-earlier period. When the last cash register chimed in for 2007, the brand posted only $7.1 million in profits, or 35 cents a share, down almost 75% from 2006, when they posted net income of $26.8 million.

If you can't read between the lines, or you don't have your abacus out: that's not good. And why do people leave jobs that seem like they could be promising for ones that will likely be a total mess? Beaucoup d'argent, cherie! Then again, maybe Granoff's been shown a plan we're, and the earnings analysts, aren't privy to. Or maybe she just likes a challenge.

But hey, a little financial thunderstorm won't prevent us from giving you guys the PR love fest, fresh from the release:

"We are extremely excited to have Jill on our team. She has a great track record of building brands, and I look forward to working with her and leveraging her strategic and operational capabilities to improve all aspects of our company," said Kenneth Cole, in a statement. "It is a new era for me, and the company. I am confident that having an executive of Jill's stature and abilities, to partner with me and our strong management team, will allow the company to achieve even greater successes in its next chapter."

And Granoff's air kisses:

"I feel privileged to have the opportunity to work with Kenneth and the management team to realize the extraordinary potential of this global lifestyle brand," said Granoff, in a statement. "I am particularly excited to help build upon the strong brand heritage while helping to drive new growth initiatives in the retail and international arenas."

Honey, we think you'd have a better chance of doing that with Juicy Couture than Kenneth Cole, but, hey what do we know? Oh, and there was also this fun little nugget from Liz Claiborne CEO William McComb, that we're reading as a kind of "bitch please" statement:

"We have made a lot of progress towards the execution of our strategy over the last eight months, in particular by placing strong leaders in the multi-functional roles each of these companies requires to successfully expand its business," said McComb, in a statement. "We thank Jill for her valuable contributions to the company during the past two years and we wish her the very best on future endeavors. While we're disappointed to see her leave, we have a deep bench of talent at the management level, and I am confident that this will be a seamless transition."

For some reason, we picture McComb penning this while Tina Turner's "When the Heartache Is Over" booms in the background.

Promo Time!: Feeling Confused And In Need Of a Primer on Liz Claiborne Inc.? We've Got Just the Thing!

So, we're pretty proud of this feature we just churned out about the wild times at Liz Claiborne high.

But don't worry, this ain't a laundry list of what brands got sold, which ones were kept, etc. If you want that, check the chart in the print edition. Rather, the text you'll get the link to down below tells the story of a CPG man who came to clean up a fashion house. It's also the story of how the buying sprees of the Go-Go 1980s and the merger mania of the 1990s have come back to haunt the apparel industry, as seen through the microcosm of Liz Claiborne's storied house that started as an affordable apparel firm geared towards the new working women, but flopped into the new millenium bursting at the seams with some 40 brands she couldn't seem to hold together.

During the past rocket-fueled year that William McCombs has been the CEO of Liz Claiborne Inc, he's made some pretty sweeping, dramatic changes. And what's more, he's been really, really open about it. (And trust us, this isn't typical in fashion, where much of the business, like the clothes themselves, can be a bit smoke and mirrors.)

So kick back and enjoy a trip through Liz's wild year, and of course, let us know what you think.

The journey begins... here.

Breaking News: Commes Des Garcons' Rei Kawakubo To Design Next Guest Collection for H&M

Now this is one that actually has us a little hot under the collar.   

Lagerfeld, sure. Viktor & Rolf, cute. Cavalli, sexy. Stella McCartney, feh. Rei Kawakubo, what?!

That's right, empress of whimsical Japanese luxe label Comme des Garcons, Rei Kawakubo, has announced that she will be the featured artiste on H&M's next designer collaboration. The collection launches first in early November, to coincide with the opening of H&M's second Tokyo store. In the following days, it will roll out to doors in the rest of H&M's global markets.

The collection will include apparel for men, women and children, as well as accessories and a unisex fragrance. This certainly is a much more expanded program than the fast fashion retailer has done in the past, and it would seem that the growth of product offering owes everything to the freshness that Kawakubo can bring to the brand.

Much like the Japanese designers Issey Miyake and Yohji Yamamoto, with whom she formed the Japanese triumvirate that defined much of the new wave fashion of 1980s American culture, Kawakubo's designs are structurally intense, and often include popular cultural references in a rather Pop Art motif (such as a series of men's suits she rolled out a in spring 2006 back that featured the iconic Rolling Stone's lips n' tongue logo splayed across the fabric). She was also the mentor for another fashion avant-gartist whose star appears to be ascending these days, Junya Wantanabe. For a look at some of her work, check the photo above.

That said, we're so interested to see what she turns out when she's not using high-tech fabrics or restrained by price points that might tie in some of her more flights of fantasy designs. As we see it, this could be a love it or hate it collection, and we just hope that the quality matches up to the buzz that will no doubt follow this collection's launch. We remember hearing that there were some issues with the clothes that Cavalli put out on the racks, not to mention those of the McCartney collection (said one of our friends, at the time: "I walked out with a cute dress that turned into a pile of buttons and thread after two weeks.").

Anyways, as always, here's the mutual lovefest that always follows these kinds of announcements.

"I have always been interested in the balance between creation and business," said Kawakubo, in a statement. "It is a dilemma, although creation for me has always been the first priority. It is a fascinating challenge to work with H&M since it is a chance to take the dilemma to its extreme and try to solve it."

See what we mean? Seems like old Kawakubo might be prepping us for the design vs. quality vs. price issue we outlined above. Less avant garde, but better quality, or more envelope pushing and delicate? Again, will be so interesting to see her "solution" as she calls it.

And now from H&M's creative advisor Margareta van den Bosch (great name, non?!):

"Rei Kawakubo has been at the top of our wish list for a long time and we are thrilled that she has chosen to collaborate with us," said van den Bosch, in a statement. "We have tremendous respect for Kawakubo's fashion philosophy of questioning fashion's ingrained patterns, and admire her artistic approach to design. We are particularly excited that the collection will be launched in Japan, Kawakubo's native country, at the same time as the launch of our new store there."

Ok, so we'll have to stay tuned, but we think this could be good news. It will drive some buzz—as these collections have done in past incarnations—for both the designer and the retailer, exposing the younger, less monied set to Kawakubo's work and perhaps building brand affinity there, while probably giving H&M a much fresher and more high-concept street reputation for the risk they're taking in bringing her in.

We'll be checking back in November to see what the product looks like!

Lessons in Branding: Why the Woody Allen Vs. American Apparel Case Is Actually Kind of Funny

If you hadn't heard already, director Woody Allen is suing
American Apparel for $10 million, for using his image,
without permission, in one of its outdoor campaigns in May 2007.

The campaign features a photo of Allen, dressed as a Jewish rabbi in his 1977 Academy Award winning film Annie Hall, beside Hebrew script that translates to "The Holy Rebbe." (See photo, right.)

While the lawsuit is certainly interesting—or maybe not really, we find legalese to be somewhat tiresome and who isn't suing anyone else these days?—the whole situation has us kind of perplexed, then chortling, then perplexed again.

So first, you take an ego-maniac like Allen (Full disclosure: we love Allen's work; Annie Hall makes our top 10 movies of all time, though our boyfriend pulled a gifting gaff for our last anniversary by getting Manhattan, still a good movie, but it no Annie, and, for the record, we don't care if it's the deluxe edition and we once mentioned it was "our real favorite Allen movie."), and you use him in branding that doesn't, well, directly promote him and his work.

We need to note here that Allen has found a way to finagle himself into nearly all of his movie scripts, and, in the aforementioned was, indeed the main character, so this guy is no stranger to an über-level of self-promo. So we have to imagine that Allen's real beef here not that there's a promotional image of himself out there, but rather than the said image isn't promoting him in a way that he totally controls. That's totally fair, and who would want their mug on an American Apparel ad, especially without their permission? (Though some of our friends have appeared in the ads, with their all-too-eager permission.)

According to press reports concerning the lawsuit, the case argues that the use of Allen's image in the billboards in Hollywood and New York were "especially egregious and damaging," and that Allen does not endorse products or services in the United States. Hmmm... We can think of a couple things Allen has done to himself that were more "egregious and damaging" than a few billboards with a still from one of his movies, but we'll get to that later. 

Second, you take a company that has made its name with 1970s porn-style ads that feature either moist looking hipsters or their rather sleazy looking bearded brethren. We're all for it, and love the gay-themed advertisements that they've done in publications like BUTT (anyone remember those "Bottoms...And Tops" spots?!, WARNING: NSFW. A tamer spot is pictured, below, left.), but, in the end, it's just kind of an edgy sex-sells play for the apparel company, you know, with a little vintage sleaze thrown in for good measure.

This oddly brings us back to Allen, someone who's rather a 1970s vintage cartoon character, who scandalized himself with what some would call a sleazy, sexual relationship with Soon Yi, the adopted daughter of Allen's former flame, Mia Farrow. So we kind of see the relevance from a marketing standpoint. In fact, in response to a query from The Jewish Daily Forward, American Apparel rep defined Allen as the brand's "spiritual leader." And if you think about it, it's kind of dead on. Better in the 1970s, sexually provocative, somewhat over-thought and overwrought (thinking lamé swimsuits and Celebrity), well these concepts all seem to define both the American Apparel and Woody Allen "brands."

Anyhow, we're not so impressed by the outdoor ads, but they sure got a lot of attention, so perhaps this whole weird mélange is worth its weight in branding gold. Still, wouldn't something it have been cooler if AA had superimposed Allen's face on one of their own hipster-hot models? Like this. So what's the lesson here folks? Well, it remains to be seen if these ads and the lawsuit move the needle any for American Apparel (as if they need it, the stores around here are always hopping with pretty, and some not-so-pretty, young things) and if that movement outweighs any legal costs, but if so, the lesson seems to be find someone both scandalous and (considered) brilliant in their field, someone who kind of relates to your own brand values, and then slap their image up on your billboards. Without all the hassle of asking.

We're not in favor of breaking the laws, per se, or abusing someone else's likeness, but do marketers really care about such meddling things as this, you know, provided it's still selling products?

Also, it's not like American Apparel hasn't ever been on the receiving end of image misappropriation issues, but for them, it actually turned out to be kind of a good thing. They were one of the faux sponsors in a Youtube spoof dubbed "The Hipster Olympics," in which contestants from Williamsburg, Brooklyn (our nabe, coincidentally, so the satire here does sting a bit) snort cocaine to get in the game, take MySpace photos, pick out ironic album covers, and dis normals.

When we asked what they thought about it, American Apparel director of corporate finance and development Adrian Kowalewski told us that since the spot wasn't "grossly defamatory" it wasn't such a big deal.

"It's quite flattering to us that our marketing would inspire someone to do a mock ad," Kowalewski added. "We think this is a reflection of how impactful our advertising has been to our audience."

So c'mon Woody, what's the big deal, man? Can't we all just, like, brand along? Anyways, I'll let you readers sort it out.

Check out the "Hipster Olympics" video, below.

UPDATE: No Calvin TV Campaign For Eva Mendes

So we had some questions regarding that Eva Mendes story we posted yesterday.

Turns out that there won't be a TV push for the launch of "Seductive Comfort." Rather, it will be a global print and outdoor campaign, just like the stuff she'll be doing for the Fall 2008 skivvies ads, and we imagine that will likely also be the plan for the forthcoming fall fragrance launch.

Also, no color, so to speak, on Eva's ability to appeal to the Hispanic shopper demographic. A rep told us that Eva was picked for her "universal appeal" and general hotness. Sometimes, we guess, there is no angle when a company picks a mass-culture celebrity.

Breaking News: Eva Mendes Will Be the Face of Calvin Klein Underwear for Fall 2008 Campaign

Calvin Klein announced today that it has tapped Eva Mendes (pictured, right) for its forthcoming Fall 2008 underwear campaign.

The actress, best known for her performances in Ghost Rider, Hitch, and Training Day, will appear in the global print and outdoor campaign, and will be used to help launch the brand's "Seductive Comfort" line. She will also be the face of a new Calvin Klein fragrance that also launches this fall. Details concerning the
fragrance were not available, but if the campaign's anything like the one for ckIN2u, then don't hold your breath. We thought the creative looked like a sex-sells job that was phoned in from the brand's edgier heritage, though we will say the mobile marketing for that launch, in Canada at least, was noteworthy and inventive.

The deal, the terms of which were not revealed, builds on a longstanding relationship between the actress and the brand. Mendes has appeared in Calvin Klein Collection gowns at various events including the CFDA Fashion Awards, Condé Nast's celeb-heavy "Fashion Rocks" parties, and most recently, last month's Independent Spirit Awards.

Here's the lovefest quote from CK prez and COO Tom Murry:

"We're very pleased that Calvin Klein will be able to capitalize on the benefits of having a beautiful and talented actress like Eva Mendes featured in two campaigns running this fall," he said, in a statement."She really embodies the essence of the Calvin Klein brand and we look forward to seeing that carried through in the creative."

We're trying to figure out if the brand will use Mendes to leverage market share with Hispanic consumers, as well as whether or not "Seductive Comfort" will feature TV spots as part of its launch push. Check back later for more details.

What the 2008 CFDA Nominations Tell Us About American Fashion

Another spring, another awards season for the Council of Fashion Designers of America. We always look forward to this announcement, and yet we always walk away from the press release disappointed. Why? Well, because year after year, it all just feels the same and it's gotten to the point where we feel we could pick out the nominees, blindfolded and drunk, and probably get them right about 90% of the time. But first, the nominees.

In case you haven't heard, the group, whose prez is none other than that lullaby-talking Diane Von Furstenberg, has announced the following nominations for 2008: [Note: The Swarovski awards recognize emerging design talent.]

Womenswear Designer of the Year                                   Swarovski Award for Womenswear
Francisco Costa (Calvin Klein)                                            Kate & Laura Mulleavy (Rodarte)
Lazaro Hernandez & Jack McCollough (Proenza Schouler)     Thakoon Panichgul (Thakoon)
Marc Jacobs                                                                      Alexander Wang

Menswear Designer of the Year                                        Swarovski Award for Menswear
Thom Browne                                                                   Patrik Ervell
Michael Bastian                                                                Tim Hamilton
Tom Ford                                                                         Scott Sternberg (Band of Outsiders)

Accessory Designer of the Year                                        Swarovski Award for Accessory Design   Tory Burch                                                                       Philip Crangi
Marc Jacobs                                                                      Justin Giunta (Subversive Jewelry)
Michael Kors                                                                     Joy Gryson

Well, congratulations to all the winners. Then again, we're sure they've heard it all before. Actually, they have. Let's take a quick, two-year trip down memory lane, just with the marquee awards.

CFDA Nominees 2007                                                     CFDA Nominees 2006     

Womenswear:                                                                  Womenswear:
Oscar de  la Renta                                                            Francisco Costa (Calvin Klein)
L. Hernandez and J. McCollough (Proenza Schouler)            L. Hernandez and J. McCollough (PS)
Marc Jacobs                                                                     Marc Jacobs

Menswear:                                                                       Menswear:
Steven Cox and Daniel Silver (Duckie Brown)                      Thom Browne
Ralph Lauren                                                                    Ralph Lauren
Italo Zucchelli (Calvin Klein)                                              Alexandre Plokhov (Cloak)

Accessory Designer of the Year:                                          Accessory Designer of the Year:
Marc Jacobs                                                                      Marc Jacobs    
Michael Kors                                                                     Michael Kors
Derek Lam                                                                        Tom Binns

Notice anything? Like maybe the fact that the nominees in the
womenswear category have remained virtually unchanged (with the
exception of Oscar de la Renta) for the past three years? Or that Michael Kors (pictured, right, doing his Project Runway duties) and Marc Jacobs have been the accessory designer of the year nominees for three years running, as well? The only thing that seems to have changed much at all is the men's category.

In his statement regarding this year's nominees, CFDA executive director Steven Kolb lauds the way in which "this year's nominees and honorees reflect the strength and vitality of the American fashion industry."

Really? It seems to us that it suggests the industry is rather stagnant, with only the same three names worthy of distinction in each of the categories. And let's not forget that chief among those names, Mr. Marc Jacobs, seemed poised, only a season ago, to take his whole operation to Paris. But we digress.

In essence, it would seem that the CFDA nominations this year, and as we've demonstrated above, the past several years, prove that American fashion is a pretty rarified echelon in which only a standard round of top names compete for industry prizes. For an industry where the bread and butter is creativity, the stagnancy (why does that word keep coming to us?) of the nominations list seems to imply a less thoughtful approach. That said, if asked which designers we thought were tops in American design, we'd be hard pressed to come up with a different list. Perhaps the fault then, dear readers, is not within the CFDA nominating committee but within our American fashion selves.

It's hard for American designers—hell, for ANY designers—to become established like these award winners anymore, given the difficulties of getting funding and the fact that we live in a world that no longer seems to care about the development of talent as much as they do about constantly having something new, something chic, and something with a name that others will recognize. To that end, CFDA (and Vogue) are to be commended for their work to bring notoriety to new design labels, as they have with Proenza Schouler, who now top the ranks of their regular awards, having graduated from the Swarovski Award for Womenswear. But it's hard to see any kind of sea change in American fashion coming—and perhaps no one wants it—given that these guys are always at the top of the list for women's design.

Here's hoping that maybe Christian Siriano, recent Project Runway winner (whom we can't help ourselves but to shill for), will liven up those ranks in the coming years.

And full disclaimer: This post is not a statement, by Fashion Notebook, that we think any of the nominated designers aren't talented, or are not worthy of awards. Rather, it is a statement that we've seen these same people getting awards and nominations for years, and we're wondering why there's no one else in the American fashion ring worthy of such distinction by the CFDA.

Week in Review Pt. 2: In Which Gap Rethinks Marketing Spend, Reebok's CMO Moves Into the Driver's Seat, and Airwalk Taps MySpace Celebrities

Once again, we're sorry that we've been silent for so long! But we've been writing a lot for that dying industry: the print book. Hey, you gotta eat!

Anyhow, here's a brief recap of our stories from last week, and this week, along with that snarky commentary that you guys seem to love. So here's a few things that you might have missed.

And now... back to the recap. (We promise some new stories very, very soon!)

Gap Brand Forgoes Spring TV Spot, Amid Tightening Following Rough Quarter
After Gap reported fourth quarter sales of $4.67 billion, a 5% drop from last year, the company had some interesting news on the marketing front.

The company is actively looking to trim costs as it weathers a “volatile economic environment,” said CEO Glenn Murphy, in a conference call to analysts on Feb. 28.

The struggling retailer will reexamine its marketing plans for the second half of 2008, once it has a better understanding of its holiday efforts, said Murphy. “We’re very aware of the environment in which we’re operating in 2008, but not all of our marketing money is being revisited," he said. "Some portion is being re-looked at to make sure it’s being used appropriately, given that consumer sentiment is where it is, and that particularly applies at Old Navy.”

The immediate marketing plans for Old Navy and Banana Republic would remain similar in scope to last year’s, while the company has decided to forgo a spring TV campaign for the Gap brand, said evp/CFO Sabrina Simmons.

The primary focus of spring marketing for the namesake division will be print and in-store efforts for the retailer’s footwear collaboration with designer Pierre Hardy, due out in March. Additionally, Gap will launch a capsule T-shirt collection, a design collaboration with the Council of Fashion Designers of America, which will hit retail stores in April.

Hmm... Doesn't sound good. And add that to the fact that, according to Nielsen Monitor-Plus, Gap already cut its ad spend in half for last year, spending an estimated $55 million (down from $117 million in 2006), per Nielsen Monitor-Plus. Old Navy spent an estimated $173 million on U.S. ads in 2007, down slightly from $200 million in 2006.

For the full story, click here.

Reebok CMO Uli Becker Moves Into the Driver's Seat as Prez/CEO Harrington Exits
Uli Becker got a jump last week, when the Reebok CMO was named president and CEO of the ailing brand, following the resignation (forced?) of top dog Paul Harrington, who had been with the company for 12 years.

This is actually something of a growing trend across industries, one that we've been keeping track of. In fact, wouldn't you know, we wrote something about it today. Check out that story, about CMOs migrating to the CEO and presidential roles, here.

Back to the relevance, Becker (photo, left) joined Reebok back in May 2006, following his duties as the head of global brand marketing for Adidas (Reebok's parent company) and managing director of Adidas International in Amsterdam. When he joined Reebok, Becker announced his intent to streamline marketing operations and to unify brand messaging, as the athletic footwear and apparel maker sought to turn its business around and reposition itself in the marketplace.

We like him. He's a straight shooting guy who's looking to get all of those mixed messages cleaned up and get the brand on the track to profitability, all with the kind of efficiency you'd expect from a German executive. So we expect good things, hopefully, and, it would appear, so does Adidas jefe principal Herbert Hainer.

"[Paul Harrington] played an instrumental role in managing the integration of Reebok into our group and laid the foundations for the repositioning of the Reebok brand worldwide," said Hainer, chairman and CEO of Adidas, in a statement. "Uli Becker's proven leadership and global marketing expertise make him uniquely qualified to take the revitalization of the Reebok brand to the next level, both internationally and in the US."

Reebok's marketing for 2008 would be focused on women's running and "American major league sports," underscored in the brand's forthcoming "Your Move" campaign, said Hainer. The campaign, previewed last year, aims to cast Reebok as the brand for individuals rather than hardcore athletes and is part of a larger effort for Reebok to capture the sport lifestyle market.

Details regarding a CMO replacement were not available.

McGarryBowen, New York, is the lead ad agency for Reebok. The company's latest ad campaign launched two weeks ago in conjunction with the release of its first "Freestyle World Tour" collection (but, of course, our readers already knew about that). The product line will include five new sneaker and apparel editions, which will roll out during the course of this year. "Freestyle Tokyo," which launched Feb. 21, will be followed by other editions that derive their name and design inspiration from cities like Paris, London, and New York.

For the full story, click here. For all of our Reebok-related posts, check here. 

Airwalk Looks at MySpace for Brand Models
In its spring 2008 campaign, which hits a variety of alterna- lifestyle titles in June (and it's not the 1990s anymore honey, so we're not talking about gay pubs, but rather the skate/surf/
snowboard glossies), Airwalk went to MySpace for part of its casting call.

In addition to leveraging images of its athletes, including Rodney Jones, the brand cast Lorene Drive, a band that creative director Jeff Buice found on MySpace, to be featured in their ads (check outtake spot, right). Even more interesting is that the ads feature mini-anecdotes from the talent, and directs readers to log onto Airwalk.com to see the full story, and then write in some stories of their own.

Buice told me that the idea is basically to make a social network around ad campaign creative. Yeah, it made us do a double take too. But Airwalk has been on the online game for sometime now, and this is just the latest way that they're engaging with the online market.

"We always do print ads because it still reaches tons of the demo that we’re going after. But the online component is growing massively, out of control, for our [consumers]," Buice told me. "The hook was finding a way to get people to correlate between the two, while still maintaining a focused, singular strategy."

Intrigued? Check out the full story, here. 

Week in Review Pt. 1: Louis Vuitton Rocks Out, Kohl's Gets Punked, and More Rumbles for the Luxury Market

OK, so we've kinda been bad lovers the past two weeks. Yeah, we admit it;
we haven't been updating as often as we, or you, would like. But our offline
job got a bit crazed last week and that prevented us from posting. So, in effect, it's not you, it's us.

Also, we were, like, on pins and needles waiting for the finale of Project Runway. And, hopefully you'll agree, we're so, so, so, fiercely happy that Christian Siriano won we can barely contain ourselves. Kid has some serious talent, and we're sure that we'll be hearing from him sometime soon. Is he adoptable  by the way? We might just forego that Boston Terrier we'd been planning on bringing home and swap it for that adorable pocket-gay (though he'll have to sleep in a closet, as we're still living in a New York state of reality folks!).

But let's leave all this relationship drama to the Spitzers! It's time to take a look at what's happened, what it means, and where we see things going... So without further ado...

Louis Vuitton's New Bag
Unless you've been hiding out under a mountain of paperwork (like us), you've probably already heard that Rolling Stones guitarist Keith Richards is the new, wrinkly face of Louis Vuitton (SEE PHOTO, BELOW, LEFT). (Insert "Vuitton's new, iconic wrinkled bag" joke here, hell, everyone else has. For SHAME Saturday Night Live! You, like fashion, were more inventive in the 1980s.) If you haven't seen the spot already, check the photo at right.

We have to say to say that this is an interesting choice, and it's already done its job many times over in terms of exposure (more than we'd imagine placing, say, Katherine Heigl, or some other, safer choice, in front of the camera). But hasn't Vuitton really missed the rebel-rock-me boat by like, say, 40 years? We would prefer to see the ads featuring this Keith.

Also, how does John Varvatos feel about all of this. Certainly, the Stones trump Cheap Trick, not to mention the fact that the campaign pretty much cribs from Varvatos' own advertising mantra: Bring back old rockers and consumers will come. Of  course, Varvatos seems to have more credibility here and we're still not sure what a great cover boy Richards is for the brand. After all, while he's definitely rich beyond words—and amazingly still alive—we're just not sold on him as a real luxury guy. Then again, maybe that's what rehab and old age will do to you. I'm sure that he has a wonderful assortment of organic teas backstage, but is he really throwing those outfits in a Vuitton steamer?

Love to hear your thoughts on this. Drop us a line, here.

Kohls Pumps Up Its Juniors Jam with Avril Lavigne
Yeah, the girl ain't punk kids. Then again, Richards sold his ass to Louis Vuitton, so what does define the legitimate rocker persona? Anyways, Avril Lavigne maybe didn't steal your boyfriend, but she did ink a deal with Kohl's to produce "Abbey Dawn," a collection of apparel (priced $24 to $48) and accessories (read: jewelry, for now) that will hit the mass merchant's doors nationwide in July.

The move obviously means that Lavigne will get some dollars in her coffers—seriously, is she even that hot anymore?—but it also seems to really define her audience in a way that could be limiting for the popstar. Launching just in time for back-to-school shopping, the line is allegedly for the "broad group of shoppers" that Lavigne attracts, according to SVP Don Brennan, but we're calling bullshit. If it's B-T-S, the tricks are for kids, and that's fine, after all, those are the types that will pay retail for her album "The Best Damn Thing," which came out last year and for which the star began touring to support last week.

According to spokeswoman Vicki Shamian, the line shouldn't cannibalize any of the retailer's other exclusive brands, like Candies given Avril (and by proxy, her collection's) "feminine yet rock n' roll attitude." [Side note: Meanwhile, no notes on how the Simply Vera collection is doing. If you've got deets, or reactions, or if you've tried on the products, send a note here]. Advertising, on which details aren't yet available, will be handled by the Kohl's in-house team, in conjunction with lead agency McCann Erickson, New York. Stayed tuned.

 

Financial Desk: Luxury Retail's Mixed Bag
Ok, so we've probably hammered this to death, but there might be trouble with the luxury market.

Saks Fifth Avenue announced last week that it had approached roughly $1 billion in sales for the quarter ended Feb. 2, up almost 5% from the year-earlier period, but with comp store sales increasing by 9%. Meanwhile, net income rose dramatically, some 83% drama, to $39.5 million, or 26 cents a diluted share. However, gross margin slipped about 50 basis points to 37.4% of sales.

But there's trouble ahead. According to a statement by chairman and CEO Steven Sadove, January and February comp store sales grew by only 4.1% and 3.4%, respectively, and "previously high-growth rate businesses such as handbags, footwear and men's have slowed."

"As expected, the more challenging promotional and overall macroeconomic environment that we began to experience in the third quarter continued throughout the fourth quarter and put pressure on our merchandise margins," Sadove continued. "Our outsized comparable store sales growth indicates that we significantly improved our competitive positioning by market, driven by our merchandise, service marketing and capital investments."

And then  came the wahn-wahn moment.

"Nothwithstanding our improved performance and the longer-term outlook for the luxury channel, we expect to continue to face an increasingly challenging macroeconomic and promotional environment in 2008, and are taking a more conservative approach to planning the business this year," Sadove said, adding that the company expects to see comp store sales growth in the mid-single digits for 2008, with low-to-mid single digit growth in the first half of the year.

Meanwhile, at Neiman Marcus, positive earnings were also overcast by ominous notes. Revenues at the luxury department store grew almost 6% to $1.37 billion in the second quarter ended Jan. 26, while net earnings grew 8% to $44.3 million. However, February comp stores sales posted a 7.3% decrease.

In a conference call, Neiman Marcus chairman and CEO Burt Tansky seemed to feel, well, pretty much like every other luxury retailer these days. He's playing a cautious game as the news of a buckling economy and decreased consumer spending prophecies an even rougher year.

"As we all know, the entire U.S. retail sector has seen sales growth diminish somewhat, and this slowdown has affected some parts of the luxury market," he said in the call. "Our sense is that the aspirational customer has pulled back somewhat in response to concerns about the U.S. economy in stock and housing markets. However, this aspirational customer appreciates quality and can be expected to buy more as the economy improves. Nevertheless, we feel confident that the pure luxury customer, the affluent to the very affluent, will continue to demand only the finest."

Seems plausible, of course, except that we're not getting at raw numbers here. What's the proportion of aspirational consumers to pure luxury consumers? Wethinks it be disproportionate and that Neiman's might have a few, hopefully not too many, pricey dresses that are staying on the racks as Sex and the City fangirls start closing up their upper-middle class purses.

UPDATE: Target Prez Says Analysts "Over Representing" Significance of Isaac Mizrahi

We had a feeling the top dogs over at Target would have to  respond to designer Isaac Mizrahi's jumping ship to head design over at Liz Claiborne's women's division.

As we said in our previous post, Mizrahi reportedly brought in about $300 million in annual sales to the retailer, which reported annual sales of $61.5 billion yesterday.

Here was the statement regarding Le Mizrahi's defection, from Target President Gregg Steinhafel.

"As it relates to Isaac Mizrahi, we've enjoyed a terrific five-year relationship with Isaac, and I think you all are over representing what it means at Target," Steinhafel said, in an earnings conference call. "It's approximately 3% of our apparel and accessories business, and we really view his strength as a niche contemporary collection, and any efforts that we have had to move beyond that were unsuccessful at best. And so, when the contract became renewable, we had the opportunity to, he had the opportunity to broaden his involvement with an apparel company, and we took it as an opportunity to move beyond this partnership, because we did not want to pass on higher royalty rates to a small collection business within the stores."

OMG, this is like sooo totally high school, and Target's all, like, pissed, because they got dumped first. So then they fire back, like, well, whatever we didn't really like Isaac that much anyways. But wait, it gets better.

"We're focused on our Go International and our Emerging Designer strategy," added Steinhafel. "WE can very easily replace these four or five racks on our apparel floor in the small section that we had in accessories and footwear with these new emerging designers, which frankly have been very successful, and we've got a terrific portfolio of new emerging designers coming on-stream this year, which we'll share with you as the year progresses."

Oh snap! Burn!

Ok, so maybe we did overestimate Isaac's influence, and while $300 million sounds like a lot to our poor Brooklyn writer budgets, it pales in comparison to $61.5 billion.  But still, the guy added a great personality to the floor at Target, and that's not so easy to replace. Plus, we still firmly believe that consumers connected to Isaac in a way that they will have trouble connecting with designers who are in for one quarter and out the next. But hey, what do we know? We're not making $61.5 billion a year.

While you ponder your own thoughts, here's a video clip for you to enjoy, and remember the personality that once lived at Target. Clip is from The Isaac Mizrahi Show, in a segment featuring Rufus Wainwright, the über-gay singer/songwriting, and full-time Judy! Judy! Judy! fan, who is now starring in H&M's "Fashion Against AIDS" campaign. (Seriously, how can you not love this guy? Enjoy!)

Lessons in Branding: Members Only Reexamines the Lookbook

Normally, lookbooks are the run-of-the-mill press materials that you  throw into a trusty bin (or, in our case, an unused aluminum beer cooler) and forget about until you need to do a trend report or look up the name of a garment that appeared in an ad.

Spiral bound, velo-bound, perfect bound, matte, natural or glossy, they're all pretty much the same. Which is why this one from Members Only—that brand you wore in the early the 80s, when we were still drooling and incoherent (it wasn't the cocaine honey, we were babies!!)—caught our eye.

It's done up as a scandalous spread from US Weekly or Life & Style or Star (whichever you like best), with the product previewed throughout the shoot and called out in caption boxes.

This approach works for two reasons:

1. It gets the attention of editors and industry types who normally have to sift through a bunch of crap from countless companies. We're not used to seeing this kind of stuff, so at the very least, it gets us to spend an extra few seconds (crucial!) looking through the materials before chucking it into the aforementioned trusty bin.

2. It lays out the looks in a lifestyle manner, practically doing the work (though none will admit so) of the stylist his/herself. Essentially, it gives us an idea of how the clothes would look in real life and suggests some styling options that seem viable.

But that's not to say that there aren't a few drawbacks to this more inventive format, chiefly that it's not necessarily very user friendly. For instance, it's not easy to flip through this for reference. The format requires the editor's eye to  jump to all manner of text boxes, which is detrimental for those editors trying to pull together a trend report or merely browse product to see what would be appropriate for an upcoming shoot. With the lookbook, utility cannot be underestimated.

Also, this male model is hideous. I mean, they're not all to our taste, and that's cool, but we're just not feeling this guy (and we LOVE skinny hipster guys). Also, "Poppi" was the best name they could come up with for the girl? Finally, the models appear to have like zero chemistry, which actually makes looking through the spreads all the more interesting, even if it's because we're laughing at the "Make Me a Supermodel" antics.

Still, it's a refreshing take on an industry standard that actually got us to take a look, and, well, write about it. Check out one of the spreads from the book, below. (Click to enlarge) 

Financial Desk: Target Treads Water With Q4 Sales, Earnings Fall 8%

Another retailer, another disappointing earnings release. Seriously
folks,  we might just have to turn off our stock ticker for the rest of the day.

Target reports flat sales for the quarter ended Feb. 2, at $19.34 billion, though year-end sales grew 6.2% to $61.5 billion. What?! No sales losses!? This is great news!!

Well, it would be if Target hadn't also posted earnings of $1.03 billion, pr $1.23 per share, down 8.2% from last year. For the full year, the brand only moved the needle 2.2%, growing income to $2.85 billion, or $3.33 a share.

Below, the most obvious conclusions from Target's top dog.

"Our  financial performance in 2007 fell short of our expectations as the pace of sales and earnings slowed considerably in the second half of the year," said Bob Ulrich, chairman and CEO, in a statement. "As we enter 2008, we remain keenly focused on the disciplined execution of our core strategy, positioning Target to deliver improved financial results, even in the face of continue challenges in the current economic environment."

Unfortunately, Bob doesn't elaborate (and we're still waiting for the conference call where, you know, he actually might give us more color on this bland statement) so we don't know what kinds of tricks he's got up his corporate sleeves.

The report also makes no mention of the loss of designer Isaac Mizrahi to Liz Claiborne. Of course, Les Mizrahi's goods will still be sold through the retailer until the end of 2008, but nonetheless, his defection to Liz Claiborne was a major hit.

The designer's namesake collection for the brand brought in a reported $300 million in annual sales, in addition to have a sales-halo effect on the other brands in the store. Given his name and popularity, we get the feeling that it's going to be rather hard to replace him, and certainly the one-offs for the Go International collections which have featured up-and-coming designers probably won't make up the sales loss. Moreover, the collection might not pull in as much this year, given that Target isn't likely to promote it since they won't have the goods after the holidays.

For more on the Mizrahi switcheroo, check out our previous post, here.

Financial Desk: On Q4 and FY07 Losses, Macy's To Investors: "Hey, We're Not Doing As Badly As The Others!"

It's not a good day for retailers, with many reporting sales
and earnings slumps.

In its report this morning, Macy's appears to be hoping that they might at least look better than the competition.

"While a weakened economic environment led our industry to softer financial results than initially expected, Macy's, Inc. did outperform most of our primary competitors in the fourth quarter," said Terry Lundgren, chairman, president and CEO, in a statement. "We also generated significant cash flow despite weaker-than-expected sales trends. Going  forward, we are aggressively pursuing our recently announced market localization initiative to drive future sales and earnings."

What's he talking about? Well, earlier this month, the brand announced that they would be consolidating their various Macy's regional divisions into three primary groups: Macy's East, Macy's West, and Macy's South. Within each of those divisions will be 20 "districts," each consisting of about 10 stores, governed by a new workforce of about 250 managers. The thought is that by having more management in more localized markets, the company will be able to make much more specific marketing appeals to its consumers, tailoring everything to their particularly tastes, whims, or geographic proclivities. Of course, that consolidation also includes the downsizing of some 2,550 jobs across the previous geo-divisions. More on that, here.

 

Oh, and also, Macy's announced that it will no longer be reporting same-store monthly sales figures, which, you know, are the clearest indicator of a retailer's performance inbetween earnings reports. Oh, and another thing, they're not going to be giving anymore estimates about sales and earnings for the future. That certainly sounds like an underwhelming vote of confidence in the company's ability to perform.

"In total, 2007 was a year of significant strategic progress," added Lundgren, in a statement. "We successfully launched exclusive new brands such as Martha Stewart Collection, invested for continued growth in the direct-to-consumer business, expanded Bloomingdale's, changed our corporate name, and launched a breakthrough new marketing approach under the umbrella of 'The Magic of Macy's'."

You probably remember that particular campaign from the holiday season, when you were besieged by a commercial with a melee of images of Donald Trump, Sean Combs, Martha Stewart (who almost seemed warm and whom we were also relieved to see unshackled from KMart), and mental eyesore Jessica Simpson hawking their products sold through the mega-retailer.

Lay your chips down, folks, we're betting on Martha as the sales driving leader in the full collection category this year. Hopefully, for Macy's she'll be "a good thing."

Financial Desk: Despite Q4 Weakness, Nordstrom Rolls on With Seven New Stores for 2008