Fashion Notebook

Lessons in Branding: How Diesel Fuel For Life Rocketed the Brand to the Top of the Fragrance Market, With Just One Launch

So no doubt you've all seen the ads for Diesel's first foray into
the fragrance category, Fuel For Life, right? (If not, check out these trés sexy photos, at right and below, left). Well, what you probably didn't know is that this one fragrance has shot the Diesel name up to the top of the men's cologne business.

According to figures from NPD Group, the fragrance was the No. 3 overall launch (across men's and women's fragrances) for 2007, despite the fact that Diesel had no history in the category. What's more, through February 2008, the fragrance is solidly within the Top 10 Men's Colognes, ranked by sales.

So how'd they do it? With an ad campaign that didn't only win over consumers, but also won awards, picking up the Fragrance Advertising of the Year via the Fragrance Foundation, in both the men's and women's category. So when we're drooling over the eye candy in both of these shots, it's for a reason. This stuff really IS solid gold.

Wanna hear more? Well, you can ready all about it in our article "Filling It Up With Premium." If you're link-a-phobic, here's a taste:

It's no secret that most every fashion brand wants to break into the fragrance business. And with good reason. While the market is fickle, materials can be found on the cheap, the bottles have a long shelf life and their contents are less prone to the more dramatic trend overhauls that characterize luxury apparel. Because customers will actually pay up to $80 for a little bottle of the stuff, the profit margins smell loveliest of all. But Diesel knew it was facing an uphill battle as an unknown in the space, which was presumably behind its decision to partner with L'Oréal, Paris, for its first foray into the category.

It's also why the introductory support broke many of the traditional rules L'Oréal applies to marketing and launching its ever-expanding portfolio of fragrances. First there was the aforementioned antimarketing viral campaign in the weeks leading up to the August 2007 launch. (Some subsequent print ads announced that the fragrance was "finally legalised.")

Next, when it came to traditional brand advertising (chiefly print and TV), the campaign took a more-is-more approach. Rather than one TV spot, the company created six, via agency FFL Paris. Instead of two, static print ads, one for men and one for women, that feature either a celebrity or single model, FFL created four executions, each of them utilizing a new model to express the individuality of the fragrance. The tag read simply: "Are You Alive?"

"For us, this was an ambitious project," said Ulli Lindauer, vp-marketing of L'Oréal European designer fragrances. "There is a moment captured in the photography that is a universal moment of feeling alive. It was about the brand giving each of us the opportunity to be an individual."

Financial Desk: Have a Cigar, Mr. Frankfort, Coach Sales Rise 19% in Q3

It's good to be Lew Frankfort. 

The Coach CEO today announced that third quarter sales had risen 19%, to $744.5 million, and profits rose 8% to $162.4 million, despite an economic slowdown in the North American market that has shaken the retail industry, and been the scape goat for much recent poor financial performance.

"We were pleased with our performance, especially in light of the worsening retail climate in the U.S.," Frankfort said, in a conference call with analysts this morning. "Overall, Coach's quarterly performance reflected the strength of the Coach franchise and the continued out-performance of the U.S. handbag and accessory category as compared to overall retail sales."

And while the macroeconomic landscape is still too murky for Mr. Frankfort to crystal ball fiscal 2008 performance, he did reveal that he expects to post $3.18 billion in sales for fiscal 2007 (which closes in June—you know, screwy fashion financial calendar), a more than 20% increase that will lift earnings per share to an estimated $2.06.

But it wasn't all sunshine and rainbows. Frankfort also said that the strong quarter reflects also "the critical balance provided by our multi-channel and international business model," which, of course, means that overseas sales were a significant factor, particularly in the Asian market. More telling on the domestic front was the department store weakness, where sales grew only 5% for Coach, versus a total revenue increase of 15% across all channels.

Frankfort attributed the growth, first and foremost, to the company's product, bound together with the "brand proposition" of Coach (read: something of perceived quality, for a range of price points), as well as the company's "broad and loyal  consumer franchise." OK, whatevs Lew, basically you owe the success to having products people want at prices they can still afford, or think they can, for now.

Of course, we'll have to wait and see how this whole recession thing shakes out, but if we had to call it earlier, we'd say that Coach looks to be one of the brands that will weather the storm, and perhaps even make a little bit of money in the process.

There's also some speculation, per WWD, that Frankfort might be getting ready to launch into the women's ready-to-wear business, big time, after poaching a series of designers from the house o' Marc Jacobs. Stay tuned.

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.

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

Another sign that the luxury market might be buckling, Nordstrom reported declines across the balance sheet for the fourth quarter.

Net sales dropped 4.4% to $2.51 billion for the quarter ended Feb. 2, and net earnings declined 8.6% to $212 million, or 92 cents a share. For the full year, sales increased 3% to $8.83 billion, and earnings rose 5.5% to $715 million, or $2.88 per share.

The declines were caused, in part, by a "trailing effect" from the previous quarter, according to President Blake Nordstrom's statements in a conference call.

"[That trailing effect] coupled with the softer environment impacted our bottom line," he added, noting that the first half of the year had been, "in terms of sales," successful. "As we look ahead to 2008 and beyond, we are focused on executing our long-term strategy of increasing market share with our core customers by offering great service and the best merchandise the market has to offer. We are in a position of strength financially, which allows us to take advantage of opportunities that may come our way, as well as weather any current challenges that we may face."

Increasing market share with  core customers, boosting service and merchandise, eh? Seems that's exactly what Milton Pedraza, of The Luxury Institute told us was precisely the strategy the luxury market needed to combat the pending/current recession.

While the year-end increases do support Nordstrom's contention of his company's strong financial position, we have to think that moving ahead with the retailer's growth plan is unwise at this time. Nordstrom plans to open seven more stores this year—in Honolulu, Hawaii; Burlington, Mass.; Clinton Township, Mich.; Thousand Oaks, Calif.; Indianapolis, Ind.; Pittsburgh, Pa.; and Naples, Fla.—in addition to the 165,000 square foot store it opened Feb. 15 in Aventura, Fla.

No notes about changes to their marketing plan that we've seen yet, but those cartoonish inserts they've been running for a while now certainly haven't made us want to shop there.

The Big Bang: J.C. Penney's Biggest Launch Ever for "American Living," (And Why It's Smarter Than You Skeptics Might Think!)

J.C. Penney is really going whole hog with the
marketing push behind its new "American Living" collection!

While we hear a lot of "biggest push ever" b.s. from marketers, this one's the real deal:

-First TV spot hits Univision, in Spanish, for the "Premio Lo Nuestro a la Musica Latina" Awards, on Feb. 21
-Mass-market TV spot to make full debut during the Oscars, on Feb. 24
-Month-long run on prime-time TV slots
-A 60-second in-cinema spot at an estimated 14,000 theaters for all PG and PG-13 features
-Print campaign in the usual barrage of consumer pubs (see example, right).
-Direct mail with 12 different specialty catalogs
-In-store promotions, including fixtures and themed uniforms for employees
-AmericanLiving.com dedicated Web site.
-Creative shot by Bruce Weber (sufficeth to say, ain't cheap people!)

The brand and the campaign, both by Polo Ralph Lauren's Global Brand Concepts group, will be the biggest in the company's history, according to CMO Mike Boylson. The imaging is meant as an emotional play that connects consumers with images of Americana and family.

While some may doubt the strategy of going big during a time when consumers feel like they're going bust—and Boylson said he's heard more than a few naysayers—the strategy actually works in their favor, according to Patricia Pao, of The Pao Principle, New York, who told me that J.C. Penney could potentially triple their media spend value given that they will be one of the few people making a real push.

And even though she felt the price points for the collection—a broad swath covering $24-$500 goods—might be a bit too aspirational for the times, WSL Strategic Retail's Candace Cortlett told me that the big campaign is still a good investment in the brand.

"[This effort] will live beyond the hard times," she said. "The worst thing to do is to put all of the energy into developing a brand like this and then just letting it sit on the shelf. That was Sears’ mistake when they got the Land’s End franchise."

Check out the full story here.

Research Desk: Prestige Beauty Sales Grew 2% in 2007, Sez NPD

The prestige beauty industry—that's the expensive,
marquee stuff y'all—gussied itself up in 2007, according to a report from NPD Group, Port Washington, N.Y.

The category grew 2% overall to $8.9 billion in sales for 2007. Leading that charge were the makeup and skincare categories, where sales rose 4% to $3.4 billion and $2.5 billion, respectively. Makeup still leads in market share, now at 38% of the total beauty biz, just ahead of fragrance, which controls 33% of sales, and skincare, which gets 28% of the cut at $1.2 billion in sales.

And growth in a prestige market despite The Recession! Though, we can't say we're surprised, because, after all, even in the worst of times we'll plunk down the cash to prevent the world from seeing our wrinkly, blemished, pale faces, or smelling our "natural" scent. And hey, if it's got a designer name on the box, all the better! If we're not paying more than $100 for the goods, we usually chalk it up to a normal indulgence, especially when it lasts for a year (Happy Valentine's Day to our very dresser-top fave Prada Amber Pour Homme!).

Seems NPD's senior beauty analyst, Karen Grant, agrees.

"During challenging economic times in 2007, the prestige beauty industry managed to rise above the negatives," said Grant in the report. "Women and men are still willing to spend money on products that make them look and feel better."

However what did surprise us were the rankings of the top fragrances, for both male and female shoppers (keep in mind that females actually buy a greater percentage of men's fragrance than men do):

1. Acqua Di Gio (Giorgio Armani)
2. Beautiful (Estée Lauder)
3. Coco Mademoiselle (Chanel)
4. Chanel No. 5 (Chanel)
5. Cashmere Mist (Donna Karan)

OK, ok, Beautiful isn't a surprise, nor is Chanel No. 5, those fragrances are so classic they're a lock for the top spots. Coco Mademoiselle is an interesting one, since we were sure that everyone was like sooo over their current ad girl, Keira Knightley, but it's obvs just us who thinks she just a poor-man's version of Penelope Cruz with a perma-pout. And Cashmere Mist? We have to think some of those sales were a case of mistaken identity. We've never touched the stuff but the bottle looks like an exotic sex toy.

But the real shocker was No. 1: Acqua di Gio. Seriously!? Acqua di Gio!? We thought that fragrance was hot like, four years ago when we were having our Año Español and all the boys (including us) were awash in that sweet, citrus-y smell. But that was four years ago!

"It's just an easy fragrance, a good juice that easy and likable and that no one is going to hate you for gifting," Grant told us, admitting even she had been surprised that the fragrance had stayed on top for the past several years. "Men can wear it to work and to the club, and women like it, which you know is the number one factor for the guys. It isn't overpowering and its versatile. They've hit on a formula that is working on both the mass and prestige levels."

Grant also told us that a new ad campaign, by parent L'Oréal's agency Publicis, that offered new imagery for the popular fragrance, was well timed to continue the momentum of the brand last year, swapping out male model Larry Scott with Lars Burmeister (pictured above, with product), and bowing a new TV campaign, which you can view, to your water-dripping-on-abs delight, below.

Financial Desk: Pre-Announcement of Dismal Q4 and Fiscal 2007 for Liz Claiborne

Ruht-roh...

That's the feeling we get from the latest announcement from the financial office over at Liz Claiborne.

A pre-announcement of Q4 and full-year 2007 earnings forecasts greater-than-expected profit losses prior to the official report due out Feb. 27.

Bear with us as we go through the details. It gets foggier than Pynchon prose at times as you roll down the balance sheet expectations.

For the fourth quarter, the company said it now expects losses of $0.90 to $1.00 per share, with earnings per share of $0.15 to $0.25, compared to earnings  of $0.71 per share in the year-earlier period. Net sales for the fourth quarter are projected at $1.21 billion, down 3% from the prior year.

For the full year, expects losses of $0.25 to $0.35 per share, on the assumption of posting earnings of $1.25 to $1.35 for 2007, a serious dip from earnings of $2.46 a share in 2006. Net sales for 2007 are estimated at about $4.6 billion, down 1.4% from 2006.

It's important to call out that the projects don't include any impact from the sale of the Ellen Tracy brand today, which went to Radius Partners LLC, Westport, Conn., for $27.3 million (plus up to $15 million more, depending on how the brand performs over the next four years). That adds some dollars to the coffers that could help offset some of the expected weakness.

But it's equally important to remember that the  projections don't include the impact of costs associated with the company's efforts to "streamline operations," the shuttering of some of its cosmetics brands, as well as what appear to be the weakened status of those 16 brands the company had under review.

But well, let's let CEO William McComb sort it out. Here's what he had to say.

"While 2007 marked a very difficult period, we see the fundamental in this company heading in the right direction," McComb said in a statement. "This conservative view we are taking in our 2008 guidance-specifically around our Partnered Brands performance—is only prudent given the challenging retail environment."

He also added that "markdown pressure" hit those Partnered Brands—which include Liz Claiborne and Dana Buchman—hard during the quarter, but that they're going on the offensive with recent design deals for Claiborne that include Isaac Mizrahi tackling the women's end and John Bartlett handling men's, as well as licensing Dana Buchman out to Kohl's. For more on that, see here.

On a positive note, it looks like Juicy Couture is doing well, with Q4 comp store sales expected to be up 25%, while the brand jump 23% in sales for the full year. The Lucky brand remains flat against year (hey, it's better than being in the red, people!), though Mexx was down 3% for the quarter and 2% for the year.

The Luxury Market, The Recession and What Marketers Can Do About It

If you haven't checked it out already—and it seems many of you have since it's o ne of the most popular stories on our site this week—give a quick gloss to my story about mass affluent consumers retreating from the luxury market as we head into what analysts and the papers seems to be projecting as a certain American recession. Read the full story here. 

Raúl Martinez, CEO and  executive creative director over at AR New York (they've done worked for brands including Salvatore Ferragamo, Dolce & Gabbana, Yves Saint Laurent, Versace and the most recent ads for Valentino, post the namesake's well-publicized adieu, pictured at right) seemed to sum it up nicely.

“I think the downturn in the luxury-goods market is now trickling down to Europe and it’s been a shock to many over there," he told me. "For a while there’s been a sort of comfort-level that luxury brands have enjoyed. Consumer are cautious and luxury brands are in alert mode.”

It's an interesting time for sure, and many of the analysts and consultants I spoke to for this story told me that they see several key points emerging from the luxury market's stumble over the past few weeks:

1. That affected luxury brands were taken by surprise given that they underestimated how much of their growth over the past five years had been fueled by these mass affluent consumers;

2. That the first area where tightened budgets might force some changes will be in the marketing and advertising departments. (This is, of course, a general market theory as well, and can be extrapolated to areas far beyond the luxury market in specific.;

3. And that some of those tightened ad dollars could increasingly go towards online campaigns, which offer greater ROI than the traditional media (no big secret to anyone) and also have the additional benefit of global reach that could prompt sales in foreign markets, which are still a thriving area for luxury goods.

However, the problem is that luxury marketers will most likely not be making quick, dramatic changes to their traditional media buys.

As Pam Danziger, the head of Unity Marketing, a luxury consultancy based in Stevens, Pa., told me: "The idea that magazine and TV advertising will go away is ridiculous, but what will become more important is having a better understanding of the consumer they're looking at. It's becoming much more vertical...with some of these niche magazines providing more connection to [the luxury sector's] real target market."

This trend seemed to be confirmed by Jason Binn, CEO of Niche Media, New York. Unless you're part of the uber-wealthy for whom these magazines are as ubiquitous as McDonald's golden arches are for the rest of us, you've probably seen his titles—among them Gotham, Hamptons, Ocean Drive and Los Angeles Confidential—in the high dollar rooms you booked through the company for a recent conference in Vegas. I know that I never stay at The Hotel on my own dime.

Per Danizger's assertion, Binn's group offers luxury marketers access to the consumers who will buy their products regardless of recessionary woes, the kind of folks, who, to paraphrase a WWD headline a few days ago, are more concerned with getting their high heels wet waiting in a drizzle outside of Chanel's couture show, than they are about this "thing" called a recession.

The titles are distributed to a consumer base in which roughly 50% have annual household incomes of over $250,000, as well as liquid assets and homes each valued at over $1 million. The books are also distributed through Net Jets, the private jet company owned by Warren Buffet’s Berkshire Hathaway, where Binn says he reaches customers with an average net worth of $25 million. 

"[Luxury brands] are relying on us more than ever to vertically integrate their products and their services to these wealth markets that we’re targeting with these very unique readers and consumers that we have,” Binn told me. “The [vast majority of] mainstream consumer magazines can’t really deliver those kind of  economic demographics to these brands.”

Though he did acknowledge that luxury marketers were shifting some dollars to more non-traditional media, for his part, Martinez said that it's a time when these brands need to maintain a consistency in their messaging.

"At a time like this its more important than ever to communicate with a singular voice and a singular vision...I think the worst thing a brand can do is to deviate from who they truly are, because over the long-term consumer confidence will be lost," Martinez told me. "One thing I think we have seen over the last number of years is a movement away from the more emotional creative and towards a more product-centric messaging. More dollars are being applied to Resort and Pre-Fall which are becoming true collections in their own right, where wearability becomes much bigger.”

Looks like for now, we'll have to play a game of wait and see concerning how the ad market will change for luxury players. Saks Fifth Avenue, for example, has already said that they're looking into doing ads in foreign magazines to grab some more tourism dollars, something the luxe retailer has never done before, and soon they'll start offering international shipping on their e-commerce Web site.

Meanwhile, I'll be comparison shopping the Vogue ad pages to see if any of this media shift stuff pans out. Oh, and Vanity Fair, you're on my list too.

Liz Claiborne Steals Isaac Mizrahi from Target!

Talk about a shake-up.

It appears that after a successful, five year marriage to Target, designer Isaac Mizrahi is setting sail for Liz Claiborne.

As the newly-tapped creative director for the Claiborne brand, Mizrahi, one of fashion's more ebullient and popular personalities, will oversee design and marketing for the brand's women's apparel, accessories and licensing businesses. His first collection under the Liz Claiborne label is slated to debut in spring 2009.

"[We] believe that [Mizrahi's] innovative design sense and widespread appeal will breathe new life into the Liz Claiborne brand," said Liz CEO William McComb, in a statement. "It is certainly no secret that the brand has been lacking a clear and cohesive vision and has languished as a result. With this appointment, we are taking a major step towards our goal of creating irresistible product that will provide today's discerning woman with a compelling reason to buy."

While no financials of the deal were disclosed, Mizrahi's own statement seems to betray, if not a fairly lucrative deal, then at least boosted branding opportunities for the designer who pioneered the high/low design ethos when he signed on to produce a women's collection for Target in 2003, paving the way for many others who followed in succession, including Karl Lagerfeld (in 2004, with a capsule collection for H&M), and most recently, Vera Wang (in 2007, with her Very Vera collection for Kohl's). For more on those partnerships, and their impact in the industry, please see my previous article, "Split Personality," here.

"I'm honored to have the opportunity to build on this fantastic legacy and excited to reestablish the label as a must have," Mizrahi said, in a statement. "And as excited as I am about developing Liz Claiborne, the collaboration also affords fantastic opportunities for growth in my own brand."

Aside from the forthcoming collection for Liz Claiborne, Mizrahi will also bow his new web-based series, "Watch Isaac," in February at WatchIsaac.com. His collections for Target will continue to be sold through the mass-retailer throughout 2008.

However, we have to say that the move seems a risky one, given several factors. First, Isaac had a pretty successful collection at Target, reportedly garnering annual sales of $300 million. Why shirk that to head over to Liz Claiborne, which posted 65% dip in third quarter net income on a 4% sales drop? And yet, it's not like things are all milk and honey over at Target, which posted a sales gain of only 0.1% (at $9.26 billion) for the month of December. Then again, it's important to remember that Mizrahi is no stranger to ups and downs himself, and that the deal he inked with Target back in 2003 can be credited, at least in large part, to revamping what was then an ailing name brand.

What the move means for Liz, and its impact on Target's business, remain to be seen.

"It can't hurt Liz Claiborne...but the issues there are more than one individual can conquer. Bringing the brand back to its heyday will require a lot more than just a new design concept or featuring a household name on the brand's marquee; it will have to be a major shift in management, merchandising, marketing and advertising and ," said Marshal Cohen, chief industry analyst at NPD Group, Port Washington, N.Y. "As for Target, they've shown that they understand the consumers' desire and the need to constantly revolve  their brands. Will they miss Isaac? Probably. But they'll find something to replace [him]."

Cohen also suggested that Mizrahi might have some growing pains to contend with in his new post.

"He was an island unto himself at Target; all of those other brands paled in comparison to his work, and he was treated as the prized jewel in that environment, " Cohen said. "In the mall environment [where Claiborne is], he'll be up against hundreds of other brands, where he's no longer the shining star by default."

 

The news of Mizrahi's switch comes following the appointment, earlier this week, of John Bartlett as Claiborne's new men's sportswear designer.

On a lighter note, if you're unfamiliar with Mizrahi or if you feel you need a refresher course on why this guy seems to be such a hot commodity for these mass merchants, check out "Unzipped," the 1995 documentary that took Isaac as its subject, with all his quirky humor and non sequitur dialog to go along the way.

One of our favorite lines: "All I want to do is fur pants, but I know, like if I do them, I will be stoned off of Seventh Avenue, like some wanton heretic or something. So there won't be any fur pants coming down my runway. It's about women not wanting to look like cows or something."

Move Over Vera, Kohl's Latest is Fila

Kohl's announced today that it will have exclusive U.S. retail distribution for Fila Sport, part of a multi-year licensing deal it has inked with the Seoul, Korea-based athletic brand. The collection—a full-arsenal mix of apparel and accessories for women, men and children—hits Kohls brick n' mortar and online in fall 2008.

According to the company, the move is geared toward cashing in on consumers’ increasing adoption of sports and activewear across a wider variety of wear occasions. Hmmm... Where have I heard that before?

“Industrywide, the active and sport business continues to grow [and] the addition of Fila Sport capitalizes on the market opportunity and expands our exclusive offerings with one of the most recognizable names in sportswear,” said Kohl's Prez Kevin Mansell, in a statement.

Per the agreement, Kohl’s will work with Fila on product design for the collection, in addition to heading up the manufacturing, production, distribution, sales and marketing of Fila Sport. Sounds like it's a Kohl's line that just has Fila's named slapped on the label. 

The Fila deal is the latest licensing agreement for the company, following a much-hyped launch of its collaboration with womens-wear designer Vera Wang, dubbed Very Simply Vera by Vera Wang, in September. For more on that collaboration, and others like it, check out my piece, Split Personality.