SEE PAGE 8

By ELLEN SHENG

HONG KONG — Rising labor prices in the country known as “the world’s factory” has sourcing experts talking about finding “the next China.”

As apparel and manufacturing executives gathered here for the Prime Source Forum, they also discussed the merits of wringing more efficiency and productiv-ity out of Chinese operations.

“I think everybody would agree that China has the best infrastructure and supply chain,” said Henry Tan, chief executive and president of Luen Thai Holdings Ltd. “But I think the cost of labor has gone up to such an extent that it has started to erode into the efficiency of the supply chain, so we may have to look at products that may be suitable to be made in China and what products that may be good to make outside.”

Tan noted that last year, for the first time, Chinese manufacturers lost market share in the U.S., Europe and Japan.

“This situation may continue and we’re all here figuring out what we should do,” he said, adding that Chinese Premier Wen Jiabao has talked about Chinese wages doubling in the next five years, as the country seeks to build its middle class.

The Chinese government’s efforts to shift toward higher end manufacturing and to ease growing wage disparity in the country through minimum wage hikes has come at a difficult time for apparel makers, as they struggle with uncertain economic outlooks in the U.S. and Europe. Chinese manufacturers at the accompanying Fashion Access trade fair reported

COTY CALLING

$10B Bid for Avon Shakes Up Industry

By EVAN CLARK and PETE BORN

NEW YORK — Let the battle begin.Avon Products Inc. may have torpedoed Coty Inc.’s

$10 billion takeover offer Monday, but rather than a final shot, the moves are seen as the opening salvos in a broader struggle that could eventually overturn the beauty world and redefine direct selling.

For Coty — which reached out to Avon three times last month, but couldn’t get takeover negotia-tions started — the deal represents a chance to tap into Avon’s 6.4 million active sales representatives globally and a new outlet for its celebrity-laden fragrance portfolio, especially in the lucrative and growing Brazilian market.

Even so, Avon could be just one option for Coty, which has also been talking to investment bankers about a possible initial public offering, according to a financial source.

Wall Street said Coty could afford to raise its offer and that a private equity player could also make a move now that Avon is so publicly in play. So far, the large consumer products companies have mostly stayed away from the direct-sales business, but experts said they might feel they have to take the plunge if a competitor successfully taps into Avon’s network.

Coty’s bid of $23.25 a share values Avon at 1.1 times annual revenues and comes when the com-pany is in a weakened state. The firm is struggling to find someone to take the reins of chief execu-tive officer from Andrea Jung. It is also confronting troubles in its overseas operations and is the subject of Securities and Exchange Commission investiga-tions relating to its dealings with analysts and to the Foreign Corrupt Practice Act.

Avon would be the latest in a series of acquisi-tions for Coty, which has been one of the most ag-gressive players in the beauty M&A game in recent years. In late 2010 alone, the privately held company

WWD

SEE PAGE 6

Where’s the Next China?

TUESDAY, APRIL 3, 2012 $3.00 WOMEN’S WEAR DAILY

PHOTO BY JOHN AQUINO; STYLED BY ANTONIA SARDONE

BEING DIRECT

MELANIE LAURENT’S DIRECTORIAL DREAMS.

PAGE 9

Due EastVivienne Tam pays homage

to her native China every

season, but for fall, she was

far from alone as numerous

designers took to Asian

motifs and patterns. Here,

Tam’s silk brocade coat,

Mongolian wool scarf and

leather belt. For more, see

pages 4 and 5.

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PLUS:FRANCISCO COSTA’S CALVIN KLEIN LINE FOR MACY’S. PAGE 12

WWD.COM2

By DaviD Lipke

NeW YORk — executives at Simon Spurr are determined to move forward without the label’s namesake designer at the creative helm, in the wake of his surprise exit from the company last month.

“We regret Simon’s unfortunate decision to leave the company. The company plans to continue with-out Simon and is looking towards a bright future as its business con-tinues to mature,” wrote co-found-er Judd Nydes in an e-mail to WWD, attributing the statement to the company’s board. “We are very proud of everything that has been achieved since the startup of the company and owe our gratitude to our investors, staff and clients for the phenomenal teamwork in the buildup of the Simon Spurr and Spurr brands.”

Both Spurr and Nydes de-clined to elaborate on the specific issues that drove the designer to resign on March 16 from the men’s brand he co-founded and helped build into a promising new player in the designer market. However, both made veiled references to disagreements or disputes among the brand’s founders and possibly with Hugo Stenbeck, a key finan-cial backer of the company.

in an interview, Spurr said the circumstances that led to his de-parture “had been going on for a while” and that he “had tried to work things out” before leaving the company. The designer empha-sized that he wanted the stores, fac-tories and editors that supported the brand to know his decision was “terribly difficult” and not one that he made lightly. “i don’t want them to think i’ve abandoned them. They are like family to me,” he added.

However, Spurr said he was resolute in his departure: “My intention at this time is not to

change my path. i am working with the Nydes-Spurr sharehold-ers in an effort to find a resolu-tion to the company situation.”

Nydes responded that Spurr has not been in touch with com-pany officials since his exit. “although there were certain issues surrounding his depar-ture from the company, he hasn’t reached out to anybody to discuss a solution,” said Nydes, who runs an investment firm and launched the brand with Spurr in 2006.

Spurr remains in his outside role as men’s creative consultant for the Tommy Hilfiger runway collection. “That is unchanged. i continue to provide consulting services to Tommy Hilfiger exactly as before,” he said. “it was never my intention to join another com-pany, despite all the speculation.”

if Spurr remains separated from his eponymous brand, his name will stay with the compa-ny, said Nydes. “The brands are owned by the company and there is a lot of work to do,” he noted.

Spurr remains an equity part-ner in Simon Spurr. Nydes re-tains an investment stake and, according to sources, so does Stenbeck, the wealthy scion of a

prominent Swedish family that founded and retains large hold-ings in investment aB kinnevik, a multibillion-dollar media, tele-com and paper products con-glomerate. Spurr confirmed that Stenbeck holds a stake in Simon Spurr, but Nydes denied that Stenbeck is an equity partner.

“Hugo Stenbeck is part of our company, but not person-ally a shareholder,” said Nydes, declining to elaborate further on Stenbeck’s role. However, ac-cording to sources with knowl-edge of Simon Spurr’s opera-tions, Stenbeck has been central to funding the company’s devel-opment over the past years.

an avid sailor, Stenback last summer captained a Simon Spurr-sponsored racing yacht in a series of sailing regattas. The sleek 90-foot vessel, emblazoned with bold Simon Spurr logos on its hull and sails, won races in antigua and St. Barth’s.

“it is an extraordinary situ-ation to secure backing for and confidence in an emerging brand in the fashion industry in the magnitude the company experi-enced,” noted Nydes.

according to sources, Stenbeck had appointed a Switzerland-based consulting firm called platform Consulting, headed by Margrethe van der Stroom, to help devise strategies to meet revenue, margin and profit goals.

Spurr is currently nominated for a CFDa Menswear Designer of the Year award and said he is looking forward to attending the ceremony on June 4. “Hell yeah. if they don’t vote for me this year, they’re not going to next year,” said the designer. “it’s now or never.”

He added that he is “looking forward with great hope and excitement toward my future within the industry as a men’s fashion designer.”

WWD TUESDAY, APRIL 3, 2012

Simon Spurr Moving Forward Without Designer

Granoff Said Top Candidate for Kellwood

To e-mail reporTers and ediTors aT WWd, The address is firsTname_lasTname@fairchildfashion.com, using The individual’s name. WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2012 FAIRCHILD FASHION MEDIA. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A.VOLUME 203, NO. 68. TUESDAY, APRIL 3, 2012. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one additional issue in May, June, October and December, and two additional issues in February, March, April, August, September and November) by Fairchild Fashion Media, which is a division of Advance Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Condé Nast: S.I. Newhouse, Jr., Chairman; Charles H. Townsend, Chief Executive Officer; Robert A. Sauerberg Jr., President; John W. Bellando, Chief Operating Officer & Chief Financial Officer; Jill Bright, Chief Administrative Officer. Periodicals postage paid at New York, NY, and at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services Tax Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian addresses to P.O. Box 503, RPO West Beaver Cre, Rich-Hill, ON L4B 4R6. POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615 5008. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or visit www.subnow.com/wd. Please give both new and old addresses as printed on most recent label. Subscribers: If the Post Office alerts us that your magazine is undeliverable, we have no further obligation unless we receive a corrected address within one year. If during your subscription term or up to one year after the magazine becomes undeliverable, you are ever dissatisfied with your subscription, let us know. You will receive a full refund on all unmailed issues. First copy of new subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. For permissions requests, please call 212-630-5656 or fax the request to 212-630-5883. For all request for reprints of articles please contact The YGS Group at condenast@theygsgroup.com, or call 800-501-9571. Visit us online at www.wwd.com. To subscribe to other Fairchild Fashion Media magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our subscriber list available to carefully screened companies that offer products and services that we believe would interest our readers. If you do not want to receive these offers and/or information, please advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273. WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR THE RETURN OR LOSS OF, OR FOR DAMAGE OR ANY OTHER INJURY TO, UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED TO DO SO BY WOMEN’S WEAR DAILY IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE ACCOMPANIED BY A SELF-ADDRESSED STAMPED ENVELOPE.

on WWD.CoM

the Briefing Boxin Today’s WWd

Avon Products Inc. torpedoed Coty Inc.’s $10 billion takeover offer Monday, which could be an opening salvo in a broader struggle that could redefine direct selling. PAGE 1 Rising labor prices in the country known as “the world’s factory” has sourcing experts talking about finding “the next China.” PAGE 1 Jill Granoff, former chief executive officer of Kenneth Cole Productions, may be the leading contender to become the next ceo of Kellwood Co. PAGE 2 Executives at Simon Spurr are determined to move forward without the label’s namesake designer at the creative helm. PAGE 2 Target Corp. named Jeffrey Jones 2nd executive vice president and chief merchandising officer. PAGE 2 Mélanie Laurent is an in-demand actress, attempted bedroom rock star and hypnotic fragrance pitchwoman, but what she really wants to do is direct. PAGE 9 Bloomsbury Publishing plc has acquired Fairchild Books, the publisher of textbooks and educational resources on fashion, merchandising, retail and interior design. PAGE 9 Marc Jacobs, who continues to add to his fragrance empire, has a new beauty project: color cosmetics. PAGE 11 When Macy’s kicks off “A Magical Journey to Brasil” next month, it will bring with it one of the country’s most acclaimed designers: Francisco Costa. PAGE 12 Hermès has signed a lease for a 5,250-square-foot retail store in Greenwich, Conn. PAGE 12 Mexico, Argentina and Brazil have erected or expanded trade barriers against U.S. apparel, footwear and textiles. PAGE 12

Kristine Drinke

Model Call: Unlike most newcomers, Kristine Drinke got a bit of a head start, a “cheesy” one at that. “I went to modeling school,” says the 22-year-old from Latvia. For more, see WWD.com/eye.

By LiSa LOCkWOOD

NeW YORk — Could kellwood Co. be getting close to naming its new chief executive officer?

according to sources, Jill Granoff, former chief execu-tive officer of kenneth Cole productions inc., may be the leading contender to become the next ceo of kellwood, succeeding Michael kramer, who joined J.C. penney Co. inc. in December as chief operating officer.

a spokeswoman for kellwood said there was no news at this time, and Granoff declined comment.

Granoff has just ended a one-year non-compete from her role at kCp. Before joining kCp in 2008, Granoff was executive vice president at Liz Claiborne, inc., where she had global responsi-

bility for Juicy Couture, Lucky Brand Jeans, kate Spade and the company’s e-commerce and outlet businesses. Before that she spent 17 years in the beauty industry. She served as president and chief operating officer of victoria’s Secret Beauty, as well as senior vice president, strategic planning, finance and information systems at estée Lauder inc. Since august, Granoff has served on the board of directors of Demandware, an e-commerce company.

kramer aggressively changed kellwood’s culture and com-plexion, scooping up brands and turning it into more of a contemporary firm. its current roster of brands include vince, Rebecca Taylor, Lamb & Flag, BLk DNM, David Meister, XOXO, Zobha, Jolt, My Michelle, Baby phat, phat Farm, Sag Harbor and

Briggs NY. kellwood also oper-ates retail stores for several of its brands, namely vince, Rebecca Taylor, Lamb & Flag, and BLk DNM. in December, kellwood de-cided it would no longer fund the adam business, the first disposal since kramer left kellwood.

Sun Capital Securities Group, a subsidiary of Sun Capital partners inc., purchased kellwood for $762 million in February 2008.

kramer, at the time of his de-parture, emphasized that he had accomplished what he set out to do at kellwood, and called the chance to reinvent the way one shops at penney’s “an opportu-nity of a lifetime.” kramer had worked with Ron Johnson, ceo of penney’s, while at apple.

at kCp, Granoff was succeed-ed by paul Blum as ceo.

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TaRGeT CORp. on Monday named Jeffrey Jones 2nd ex-ecutive vice president and chief merchandising officer.

Jones joins the discounter from Mckinney, a Durham. N.C.-based advertising agency where he spent six years culminating in president. prior to that, he was chief marketing officer of Gap inc., responsible for marketing strategy and store design.

Jones impressed Target ex-

ecutives with the variety of his experience, which included work-ing with both big brands such as Coca-Cola and Gap as well as small start-ups. “He has extensive experience,” said a Target spokes-woman. “He’s led global market-ing for various companies and successfully navigated large cor-porations. also, he’s worked with small clients where he had to be really innovative and scrappy.”

Jones, who starts his job today,

succeeds Michael Francis, who left Target in October to join J.C. penney as president.

Target views marketing as a key brand differentiator. “We try to find unique and creative ways to connect with guests on an emotional level,” the spokeswoman said. “What we were looking for in a leader is some-one who’s passionate. Jones has a reputation for being a proven, pas-sionate leader who is really well liked by his peers.” — Sharon EdElSon

Target Taps New Chief Merchandising Officer

Judd Nydes and Simon Spurr

w03a002a;10.indd 2 4/2/12 7:30 PM04022012193144

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4 WWD TUESDAY, APRIL 3, 2012

Sandro’s top.

Brian Atwood sandal.

Zac Posen’s silk cocktail dress. Ona Chan cuff.

Peter Som’s wool and nylon

dress and jacket.

MZ Wallace bag charm.

Echo Design scarf.

WWD.COM5WWD TUESDAY, APRIL 3, 2012

EAST SIDE

STORYAll eyes are on Asia. Designers are taking that message quite seriously for fall, loading up their looks with rich chinoiserie

patterns, traditional embroideries and plenty of kimono shapes. BY ANTONIA SARDONE; PHOTOS BY JOHN AQUINO

Incase for Shepard Fairey iPhone case.

Tadashi Shoji’s silk dress. Dax Gabler bag.

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WWD.com/fashion-news.

Jen Kao’s silk charmeuse and chiffon robe and silk and Lycra pants.

Miriam Haskell necklace; Jill Stuart shoes.

snapped up OPI Products Inc., Philosophy Inc., TJoy and Dr. Scheller Cosmetics, spending more than $2 billion, according to estimates. But the company, which has revenues of $4.5 bil-lion, is clearly going after big-ger game with Avon. The talks between the two firms report-edly began with Avon looking to buy Coty rather than the other way around.

Coty said Monday it has “no intention of pursuing an acquisi-tion on a hostile basis,” but none-theless took the aggressive step of bringing its offer directly to shareholders after it failed to get any traction with Avon’s board.

“Our objective is to engage in discussions with Avon and conduct due diligence so that we and Avon can together de-termine if there is a basis for a transaction,” said Coty’s chair-man Bart Becht. “We believe Avon’s shareholders would want their board to explore with us the benefits to shareholders of a transaction.”

At least one law firm is trying to drum up business by reaching out to Avon shareholders and investigating whether or not the firm’s board breached its fidu-ciary duty by rejecting the offer.

Becht laid out his pitch in a letter to Jung on Monday and said the combined company

would be called “Avon-Coty” and that “Distribution of appeal-ing Coty mass beauty brands via Avon’s ‘door-to-door’ distribution channel will…create new and at-tractive growth and earnings op-portunities for ‘Avon– Coty.’”

Avon countered that Coty was being “opportunistic” and trying to get a “free look” at its books. The direct merchant also said it “remains committed to its publicly stated path of complet-ing the ceo search and execut-ing against what it believes are Avon’s strong long-term pros-pects.”

Avon’s search for a ceo has been troubled, though, and a number of people who were seen

as contenders took them-selves out of the running, including HSN Inc.’s ceo Mindy Grossman and for-mer Procter & Gamble Co. executives Ed Shirley and Susan Arnold.

Paul Pressler, former Gap Inc. ceo and someone ob-servers said could fill Jung’s shoes, stepped down from Avon’s board Monday. He is a partner at private equity firm Clayton, Dubilier & Rice Inc. and will be replaced on the board by Douglas Conant, for-mer ceo of Campbell Soup Co.

The ceo search committee of Avon’s board is said to have zeroed in on candidates who either come from the direct-selling industry or have turn-around experience. Avon had no comment on the progress of its search Monday.

Further indication that the battle between Avon and Coty will drag on came from Wall Street. Investors took Coty’s offer seriously and drove shares of Avon up 17.3 percent to $22.70 — within striking distance of Coty’s proposed bid.

“While Avon faces a perfect storm of problems at the mo-ment, it’s clear that Coty smells blood,” said Morningstar analyst Lauren DeSanto, who said a deal between the companies could be “quite messy” given Coty’s de-partment store customers.

“We doubt these retailers would enjoy seeing the same brands that sit at department store counters distributed by direct-sales representatives,” DeSanto said. “Additionally, out-side the U.S., in markets such as Brazil and Russia, we are not sure how much traction many of Coty’s celebrity brands would have.”

Morningstar places the fair value of Avon at $25 a share, or $10.77 billion.

Analysts generally said the current offer probably wasn’t high enough to get a deal done, but that a higher purchase price would make a takeover more likely.

Javier Escalante, execu-tive director at Consumer Edge

Research, said Coty could up its price by another 4.9 percent to $24.40 by agreeing to share half of the $1.1 billion in projected cost savings from the merger with Avon shareholders.

“The board argues that Coty undervalues [Avon] but their re-sponse strikes us as weak as it ignores the real investment con-troversy: [Avon] likely is a value trap, meaning that Avon’s earn-ings base and, more importantly, future earnings power are un-clear,” Escalante said.

Now the question is whether Coty’s bid will spur other firms to come out of the bushes and make a run at Avon. At least at the moment, there appear to be few other strategic acquirers willing to take on the troubled direct seller.

“L’Oréal has been mentioned in the past as being interested in Avon, however management has expressed that it sees direct selling as an early stage of de-velopment for retail and not as a sustainable business model,” Escalante said. “Therefore, the chances of L’Oréal being inter-ested in buying Avon are low. The only consumer products com-pany with direct-selling experi-ence, oddly, is Unilever,” with Aviance and Hindustan Unilever Network. “But, it is unclear whether Unilever management views direct selling as strategical-ly viable and, if so, whether Avon would be the right asset, given its challenges in key markets like China, Brazil and Russia.”

If Avon moves to defend it-self, its credit rating could take a hit.

Debt watchdog Standard & Poor’s placed Avon’s “BBB” credit raging on CreditWatch with negative implications.

“Based on our experience with similar offers, it is our view that Avon could pursue a more aggressive financial policy, such as debt-funded share repur-chases, as a defensive action to further bids,” said S&P debt analyst Jacqueline Hui.

Even as there are questions over what impact a deal might have on Coty, observers believe

6 WWD TUESDAY, APRIL 3, 2012

Avon Rebuffs Coty Offer

THE PREPONDERANCE OF COTy’S business is decidedly scent-based. According to the compa-ny’s most recent net sales figures for fiscal 2011 (year-ended June 30), fragrances accounted for 57 percent of Coty’s business. The portfolio in-cludes two divisions: n Coty Beauty, which operates the brands Adidas, Astor, Baby Phat, Beyoncé Knowles, Celine Dion, David and Victoria Beckham, Esprit, Faith Hill, Guess, Halle Berry, Kate Moss, Kylie Minogue, La Cross, Manhattan, Miss Sixty, Miss Sporty, Nautica, N.y.C. New york Color, OPI, Pierre Cardin (for Europe), Playboy, Rimmel, Sally Hansen, Stetson, Tim McGraw and TJoy.n Coty Prestige, comprised of brands Balenciaga, Bottega Veneta, Calvin Klein, Cavalli, Cerruti, Chloé, Chopard, Davidoff, Dr. Scheller Cosmetics, Heidi Klum, Jennifer Lopez, Jil Sander, Joop, Karl Lagerfeld, Kenneth Cole, L.A.M.B. fragrance by Gwen Stefani, Lady Gaga, Lancaster, Marc Jacobs, Philosophy, Sarah Jessica Parker, Vera Wang, Vivienne Westwood and Wolfgang Joop.

Coty — it seems — is looking to entrench itself deeper into the cat-egories of color cosmetics, which in 2011 generated 28 percent of sales (up 4 percent from the year before), and skin and body care, which accounted for 15 percent of Coty’s business in 2011 (up 2 percent from 2010).

Coty’s sales in the Americas in 2011 represented 37 percent of its total business (up 1 percent from the year before), while its performance in Europe, the Middle East and Africa generated 52 percent (down 2 percent from 2010), and the Asia-Pacific region accounted for 11 percent (versus 10 percent the previous year).

Andrea Jung

Coty: A Closer look

Avon’s directional Anew brand.

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that, for Avon, it might be the kind of revolutionary step the company needs to take. Observers universally agree that Avon needs much more than a little tweaking.

“For Avon to contemporize them-selves, they may need dramatic change and dramatic change comes with either an innovative leader or the purchase by another com-pany,” said Les Berglass, founder of Berglass + Associates executive search firm.

Avon’s list of challenges includes the lack of a ceo, the SEC investiga-tions and competitive troubles in emerging markets such as Brazil.

“The business model is going to take a lot of thinking in terms of how do you address their direct-to-consumer [business] in the U.S. and how do you regain your trac-tion internationally,” said invest-ment banker Elsa Berry, head of Houlihan Lokey’s cross-border con-sumer coverage.

And as Avon evolves — willingly or not — the industry landscape be-gins to undergo major shifts.

“One day, a true personal care company will make the move to di-rect selling,” Berry said. “Maybe this forces all those companies that have been thinking over the years, ‘Yes, no, maybe.’”

One former Avon executive said that, as long as seven years ago, Coty was looking into the possibility of Avon distributing its fragrances in Brazil. The executive said the direct-marketing model would be a differ-

ent beast in the cyber age. Pointing to Amazon, the executive speculated that model in the future could be a fusion of human reps and technology.

The search for a ceo has sum-moned a critical voice from the past. James E. Preston, who refocused Avon in the Nineties and recruited Jung before retiring as chairman in 1999, has said it is “disconcerting” to see Avon struggling when its compe-tition is doing so well.

“If you look around the world today, direct selling has never been stronger,” Preston said. “The issue is not direct selling. The issue is Avon and its lack of growth and its lack of profitability.”

Preston maintains that Avon has “strayed away from some of the basic tenets of direct selling.” He as-serted that Jung was hired initially as head of global marketing and “we said get the positioning of our line in shape so that it could be more competitive than it is today. She did that very well.” Preston explained that, at that time, the major cities of the developing world were emerging with a new sense of sophistication and, if Avon was to grow and prosper in the developed markets and the emerging markets, it needed much more marketing savvy and programs and that was Jung’s strength.

But as a result, he argued, the shift to the marketing-and advertis-ing-driven “pull” side of the equa-tion went too far and diminished the “push” side that gave incentives to the army of sales reps, Avon’s

muscle. “They went so far in trying to emulate packaged goods com-panies — a P&G or a Colgate or whatever — we have lost touch with the push side. It’s out of balance. There is so much money in advertising and other brand positioning that we have pulled funds away from the representative side of the business.”

Similarly, Preston argued that “Andrea has not been well served by the people she has brought in.” He contended that the new re-cruits generally came from the packaged goods industry and tried to use their pack-aged goods skills at Avon and “it failed big time.”

He and other Avon vet-erans have banded together and suggested Joe Ferreira as their own ceo candidate to succeed Jung. Ferreira was an Avon veteran who left the company in 2001 after a 20-year tenure, 11 of those years under Preston. Ferreira had no comment and neither did Avon on Monday.

As of Saturday, Preston said he not been contacted by the board either on his suggestion of Ferreira or his earlier call for Jung to make a clean break and leave the firm.

— WITH CONTRIBUTIONS FROM MOLLY PRIOR

7WWD TUESDAY, APRIL 3, 2012

LATIN AMERICA

$5.1B 45.5%

NORTH AMERICA

$2.1B 18.5%

CENTRAL AND EASTERN EUROPE

$1.6B 14%

WESTERN EUROPE,

THE MIDDLE EAST AND AFRICA

$1.5B 13.5%

ASIA-PACIFIC

$900M 8.5%

THE WORLD OF AVON Products Inc. is spread fairly proportionately with one exception.

Of the $11.3 billion in revenues last year, 45.5 percent of the global total, or $5.1 billion, was generated in

Latin America, according to the company. North America represented 18.5 percent in total sales, or $2.1 billion. Central and Eastern Europe followed close behind at 14 percent, or $1.6 billion. Western Europe, the Middle

East and Africa combined generated $1.5 billion for 13.5 percent of total sales. Asia-Pacific represented 8.5 percent of the world total, or $900 million in sales.

In terms of product category, beauty products

generated 71 percent in sales, or $8.18 billion. Fashion was the second largest category with 18 percent, followed home products with 9 percent and other types of merchandise at 2 percent.

Avon’s Revenues by Region

Some Avon brand extensions.

WWD.COMWWD TUESDAY, APRIL 3, 20128

textiles

By KATHLEEN E. MCLAUGHLIN

BEIJING — The numbers are grim, but China’s apparel and textile manufactur-ers are adamant that continuing tough times for their industry do not spell the end of production.

Those still in business following sev-eral years of massive factory closures say they’ve weathered the toughest of times and expect to stay alive through creativi-ty and new clients. They said lower labor costs inland, away from China’s tradi-tional manufacturing bases in the Pearl River Delta and Eastern Seaboard, could revive the flagging industry. Yet many seem to be hanging on by a thread.

New data from HSBC indicate that manufacturing had fallen for the fifth straight month, heightening concerns that China’s overall economic health might be in more trouble than many had thought. But in the textile and apparel sectors, no other country has the infra-structure or labor force to take the place of China. Manufacturers are banking on that, and to stay competitive, they’re looking at new production bases and po-tential new customers.

“Overall, I would say it has improved in the past few months,” said Li Linjing, a manager at a clothing manufacturer in Hangzhou, Zhejiang province. “I have a

positive outlook for the coming season and the rest of the year.”

Part of the reason for that optimism from Li and others is that thousands of factories have already closed since the economic crisis and slow recovery that began in 2008. Those that have managed to stay in business predict things can only get better.

“A huge portion of the industry shut down, while the new companies that opened are not big or strong enough,” said Li. “For those companies who survived, it’s good news of having fewer competitors in the coming summer season.”

Li and others also said factories are mov-ing to stay competitive. Many have opened smaller workshops closer in the provinces that traditionally sent workers out as mi-grants to Guangdong and elsewhere.

“Some of them have already moved to other parts of China, where they have a lower cost for labor,” said Li. “Some com-panies that have the strength can still maintain stability without moving.”

Several shoe manufacturers that pro-duced in Dongguan have packed up and moved to Chengdu, in Sichuan province, which for two decades has been China’s largest exporter of domestic migrant labor. Chinese media also reports a re-surgence in manufacturing in economi-cally troubled Wenzhou, which suffered recently from a spate of bad loans that

buried many small production compa-nies. One Wenzhou shoe factory owner said he plans to upgrade the types of shoes he makes at home, while outsourc-ing the lower-end production to new workshops in Sichuan province.

Another major factor in survival has been the enormous surge in China’s do-

mestic demand. When Chinese manufac-turers began to look inward for buyers during the 2008 global financial crisis, the country’s consumers weren’t yet spending at today’s levels. Now, with China becom-ing a major force in global consumption, the tide appears to be turning.

“In every stage of everything, there will be good periods and bad periods,” said a children’s clothing manufacturing manager who gave only his surname, Xie. “The changing trends are normal, and businessmen all know it. For the coming year, I would say it depends on the ability of each company. If they can sharpen and exercise skills in tough times, and get over it by using the right transformation and creativity, they will find their correct path to survive and develop.”

A spokesman for the China National Garment Association said the industry is changing fast and not necessarily in a negative way. China is moving up the value chain, he said, and producers are learning to adapt or leave the business.

“It is normal to have such changes, and there is no need to be overly wor-ried,” he said. “Since production has moved from Europe and the U.S. to Japan, then to Hong Kong and Taiwan, and finally to the Pearl River Delta, it is normal that business conditions changed along with the market. After the transformation and upgrading of systems are done properly, the whole situation will be improved and enter a better path.”

average annual labor increases of 10 to 12 percent. Between in-creasingly tight-fisted Western consumers and increasing man-ufacturing and material costs, companies have seen eroding profit margins.

Tan said most of the wage in-creases in China have been in the western part of the country, as well as in Shanghai, Beijing

and Shenzhen. But wage hikes in Dongguan, the biggest manu-facturing hub, appear to be de-layed for now.

Tan said Luen Thai, which currently has about 70 percent of its manufacturing in China, will likely have only 50 per-cent of its manufacturing in the country in the near future.

The company has been mov-ing some manufacturing to the Philippines, where average wages are nearly half of what they are in China.

Another plus, he added, are lower trade tariffs when reimporting back into China. Tan said he’s been working with a lobbyist in Washington to push for a free trade agree-ment between the U.S. and

the Philippines. If that goes through, he said, he could see moving a lot more operations to the Philippines. The Save Act, which has been introduced in Congress, would allow for ap-parel products manufactured in the Philippines using U.S.-made fabrics to enter the coun-try duty free.

Executives noted that compa-nies have already been shifting operations, particularly lower-end manufacturing, to countries such as Bangladesh, Vietnam, Cambodia, Indonesia and the Philippines. Cambodia and the Association of Southeast Asian Nations, or ASEAN, countries are important even to Chinese companies, which are increas-ingly moving manufacturing to

Southeast Asia as well, lured by lower labor costs as well as lower tariffs. The ASEAN coun-tries include Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Western executives also high-lighted the growing importance

of Chinese buyers, who are changing dynamics in the in-dustry. David Hampson, country manager for The Jones Group Inc. and Nine West Footwear, said he’s had his business turned down by a Chinese man-ufacturer, who had a domestic Chinese client that was willing to buy almost the same item at a better cost.

“The line is getting closer,” he said.

But though Hampson said he worries about price inflation coming out of China, he’s more in favor of improving productiv-ity and efficiency over shifting operations to other countries in search of lower labor costs.

“There’s a huge opportunity to educate, invest in machin-ery, invest in management,” he said, noting that productivity in China is a fraction of what it is in Eastern Europe.

Hampson also suggested finding ways to reduce lead times from the typical 90 days, calling it “Stone Age thinking.”

“It took [Americans and Brits] 90 days to build warships during World War II,” he said. “People have got to stop thinking that Myanmar and Ethiopia are the answer to their problems.”

Managers also emphasized the importance of productiv-ity, and the consensus at the forum was that manufacturers in China could add value by be-coming more efficient, offsetting

the increasing cost of labor.Some also shared efficiency

and cost-cutting ideas. Peter Hevicon, general manager at Debenhams Hong Kong Ltd., said his company started paying Chinese vendors in yuan, result-ing in 3.5 to 4 percent net cost savings. Hevicon said he also started drilling down on mate-rial prices, going so far as to check on mills and found some cost savings there, as well.

Despite the many concerns about the changing landscape of manufacturing in China, ex-ecutives believed the country would continue to be an impor-tant center for apparel and ac-cessories manufacturing.

“The idea of the traveling circus [that’s been the model] since World War II stops with China because of the volume,” said Edwin Keh, lecturer at The Wharton School at the University of Pennsylvania.

There isn’t another country that exists with the same capac-ity, he added.

“There’s no other place for us,” said Alessandra Cocchi of EastMax Fashion Ltd. “We’re keeping an eye on others, but for complicated garments, China is the place to be. For re-ally complicated garments, 90 days is good for us. We cannot achieve that in Eastern Europe. China remains the place and there are still improvements to be made. It’s not desperate yet.”

Experts Eye Sourcing Evolution

Chinese Factories Aim to Survive

Chinese PremierWen Jiabao

Henry Tan

Manufacturing for domestic consumption is up in China.

Thousands of Chinese factories have closed in recent years.

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The cost of labor [in China] has gone up to such an extent that it has started to erode

into the efficiency of the supply chain.— HENRY TAN, LUEN THAI HOLDINGS LTD.

{Continued from page one}

WWDSTYLEMeMo pad

five questions: A quick chat about fashion with Ashley Greene. PAGe 10

Creative ControlNot yet 30, Mélanie Laurent is an in-demand actress, aspiring

rock star and hypnotic fragrance pitchwoman, but what she really wants to do is direct. And she has. For more with the French star on her

feature-length directorial debut, “Les Adoptés,” see page 10.

Photo by steve eichner

fAirchiLD booKs soLD: Bloomsbury Publishing plc has acquired Fairchild Books, the publisher of textbooks and educational resources for students in fashion, merchandising, retail and interior design. The division was owned by Fairchild Fashion Media. “We are delighted that Fairchild Books has found such a fitting strategic partner in Bloomsbury Publishing Inc., a leading international academic publisher,” said Gina sanders, Fairchild’s president and chief executive officer. “At the same time, this sale will enable Fairchild Fashion Media to further expand upon our core businesses including WWD/WWD.com, Style.com, Style.com/Print, FN, Beauty Inc., Menswear, Fairchild Summits, WWD Magic and FN Platform.”

The Fairchild acquisition will increase Bloomsbury’s U.S. presence, including expanding its digital presence. nigel newton, chief executive officer of Bloomsbury, said the purchase is part of the company’s long-term strategy to increase its academic publishing business in the U.S., the largest market for English language textbooks. Fairchild Books will be managed by Kathryn earle, who will report to Jonathan Glasspool, managing director of Bloomsbury’s academic and professional division.

Bloomsbury Publishing plc has five divisions, including Fairchild Books. Its adult publishing group works with authors such as Khaled hosseini, William boyd, richard ford, Margaret Atwood and elizabeth Gilbert, while its children’s division lists J.K. rowling and neil Gaiman as authors. — AMy WicKs

for the GirLs: Kim france is back to editing, but this time it’s not at a magazine. Today, she launches a blog, Girls of a Certain Age, that is sort of an extension of what she was doing at Lucky, albeit much more personal. It’s also aimed at a more specific set of women who are in their late 30s and 40s. “I’m 48, but I’m an immature 48,” said France. “There are people in this city who work in creative businesses whose interests are still very youth-ish. They like rock music, looking cool, but they are not kids anymore. They don’t, you know, respond to crotch high skirts on a style blog, no matter how cute they look.”

The blog, with the Web address of girlofacertainage.com (no “s”), leads with a Q&A with former Sassy editor christina Kelly. Another post offers a “Dating-in-your-40s uniform,” that includes a Grecian-style Helmut Lang top, AG Jeans and a shrunken blazer. The style suggestions are all her own, which is a welcome shift, she said, from formerly having to measure her words because they were part of a magazine brand. “I’m not out to scorch the earth with my opinions, but I do want to think critically about the fashion world,” France said.

She plans to partner with affiliate programs such as Shopzilla and later on, she’ll accept advertising. She also will open the blog up to contributors. But that’s a few months down the road. At this point, she’s focused on finding an audience. “This will have a similar spirit to what I was doing before,” she said. “But more distinct.” — A.W.

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You might call mélanie laurent the accidental actress.

While the 29-year-old began acting in her native France after being discovered by gérard Depardieu on the set of 1999’s “asterix and obelix vs. caesar,” her dream, she said, has always been to be a director.

“i think i wrote my first story when i was six,” said the actress. “i was obsessed by making a play — i was so annoying. Every cousin, every brother — i made them be in my plays. i was not destined to be an actress at all. i really wanted to be a director.”

laurent’s first effort, the 2008 short “De moins en moins,” made the cannes Film Festival — the only French short to be honored that year. “i cried,” she said, thinking back on her reaction when she heard of her nomination. “it was crazy. i was like, ‘it’s the first one!’ craziness.”

her next project, a full-length film called “les adoptés” (“the adopted”), made its u.S. premiere last week at a cinema Society screening. the evening was co-hosted by Dior Beauty, for which laurent is the new face of its hypnotic Poison scent. John cameron mitchell directed the Europe-only ad campaign.

laurent herself directed, wrote and stars in “les adoptés,” which she said took five years to put together. “i did a lot of films during that time, which i think was good,” said the actress, who was clad in a black Dior dress and tangerine heels for the screening. “and i met Quentin tarantino [who cast her in 2009’s “inglourious Basterds”], mike mills [who directed her in 2010’s “Beginners”] and i did amazing French movies. i love observing people working. it was the best cinema school ever, for five years.”

Despite how eager she was to step behind the camera,

laurent admits to a few butterflies as she did. “i was obsessed with my script for five years, and after five years, you get comfortable in that writing process — because you can always change everything every day. all my shots were in my mind, and i wasn’t taking any risks because i hadn’t started shooting. then, suddenly, you’re on set with 100 people and it’s like, ‘here we go!’ ”

the first day on the “les adoptés” set was nerve-wracking — “We didn’t keep anything from the first day,” said laurent — that nervousness quickly went away. “the second day,” she said with a laugh, “i was like, ‘this is your f---ing job. You wanted to do it.’ and it was magic, the best thing i ever did. i learned to be happy for the first time in my life, because for the first time i really arrived in the place where i was meant to be. as an actress — even when i was shooting ‘inglourious Basterds’ — i was thinking, i want to be him, the man behind the camera.”

laurent shot “les adoptés” in lyon. “i didn’t want to make another Parisian movie,” she

said. “they are always kind of the same, and the light is awful in Paris because it’s so gray.”

She’s currently writing her next film, which she said is going to be “a huge love story” in the tradition of “the Bridges of madison county.” But she’s writing her own ending. “i was so upset that at the end, [meryl Streep] didn’t open that f---ing door and get in the car,” she said. “So i’m going to write the inverse of that.” She plans

to direct — but not star — in the film. “my dream life is to make one amazing movie as an actress each year and spend the rest of the time writing and making my own movies and working as a director.”

She released her first album, “En t’attendant,” last year in France. “my big dream was to work with Damien Rice, and i did. he taught me how to be free. i did all my record on my bed, with a mic — i did everything i wanted. i produced it; i composed it. it took me

three years of work. Every time i make something, it’s honest. i’m not thinking ‘oK, i should do this, because of that.’ i don’t read reviews either.”

laurent has little patience with those who would happily slot her into just one creative endeavor, insisting that writing, directing, acting and singing can all live side by side in her life.

“my country didn’t really like to see me as a singer,” she said. “they accepted i was a

director but not a singer. i can understand that they were thinking i was doing too much — France doesn’t like it so much when everything’s big and successful at the same time, and i had that frustration with my record. it’s absurd. Why can’t you be free? Just because you’re an actress — or being an actress first — doesn’t mean you never want to try other things. if you do it with your heart, why should it matter? i’m not doing it for the money. and i realize how lucky i am. i always say to myself, ‘there are so many girls on the planet that are more beautiful than i am, more talented, more funny and clever, and they’re not working.’ it’s about luck, too. But i’m not going to feel guilty all the time because of that. it’s my dream to do everything.”

acting will never completely vanish for laurent — she already has one césar, the French equivalent of an academy award, for her role in 2006’s “Je Vais Bien, Ne t’en Fais Pas” (“Don’t Worry, i’m Fine”) — but she plans to intersperse her roles with directing projects.

laurent is filming “Now You See me,” a tale of FBi agents tracking a team of illusionists who rob banks during their performances and reward their audiences with the money. “it’s a big, action movie, with a huge, amazing cast and things blowing up — like cars on a bridge. We’re having so much fun, and we’re so close.” her co-stars in the film include isla Fisher, mark Ruffalo (“he bought my cD three times!”) and Woody harrelson.

She initially worried, she said, about her directing from “les adoptés” bleeding into her acting.

“i was afraid i’d be saying ‘Why are you putting that camera here?!’ when i’d get on set,” she said with a laugh. “i was like, ‘i’m going to be so annoying! he’s going to hate me!’ So i didn’t say anything, and i was really a good girl. i think i’m easier to work with now, because i’ve had my own experiences as a director.”

of the acting, she notes that it also allows her to meet a wide range of potential actors for her own projects. “i’m going to write for people,” she said. “i would love to [write and direct] a movie with mark Ruffalo — i’m acting with him now, and he is the best partner ever. i had the best time with michael Kelly. and i love Woody. Dave Franco is the sweetest guy ever. isla —you just want to do shots with her all the time. Bradley cooper. Scarlett Johansson. Scarlett and Bradley were the first ones to ever watch ‘les adoptés.’ ”

She also likes being acknowledged as a director, because “suddenly people see you as an artist, instead of an actress. my only fear was finding my own style — and i was terrified. i didn’t want to steal things from other directors.” She purposely gave up watching other movies for the year she was filming. “Every time you’re watching a masterpiece, you think it’s easy to do, which is not true,” she said. “Boogie Nights” and “all about Eve” are on her list of favorite films and she is enamored of a wide range of directors, including Pedro almodóvar. “i’d love to work with James gray, terrence malick — let’s talk about dreams — i’d love to make another movie with tarantino and another with mike mills.”

— Julie NaughtoN

10 WWD TUESDAY, APRIL 3, 2012

’’’’

aShlEY gREENE, “twilight” star and face of DKNY and DKNY Jeans, spoke to WWD at a macy’s herald Square public appearance. — Kim Friday

WWD: You are playing a fashion designer in your first tV series, the pilot “americana,” filming now. Did you learn any great tips or tricks on set?Ashley Greene: Pat Field is the costume designer and she took a vintage coat and turned it inside out and then belted it, which gave it a really vintage distressed look, which was great.

WWD: What items of clothing are in heavy rotation in your

personal wardrobe?A.G.: DKNY skinny jeans are always a staple for me, and they have amazing (and actually reversible) shearling coats that i’ve been wearing a lot.

WWD: What music are you listening to these days?A.G.: i like Pandora.com a lot because i just plug in a song and it goes. i’ve gone back to Ray lamontagne a lot lately, taylor Swift’s new song on the “hunger games” soundtrack is so good, and i’m a huge fan of Bruno mars.

WWD: any fun summer plans?A.G.: hopefully i’ll be working,

assuming the pilot gets picked up. i think Fourth of July is one holiday i always try and go back home for, so if i have time i’ll hopefully get to Jacksonville, Fla.

WWD: With the “twilight” series coming to end, did you nick anything special from the set?A.G.: Not this last time, but in the very beginning i took alice’s cullen crest necklace, which is pretty awesome, so i have that still, and i took the Jackie ohh Ray-Ban sunglasses from the second movie. But then i stopped; i thought they are going to start yelling at me.ph

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Mélanie Laurent Gets Direct

Ashley Greene

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net worth of $11.5 billion; Giorgio Armani with $7.2 billion; the four Benetton sib-lings (Luciano, Gilberto, Carlo and Giuliana) with $2.1 billion each, and Geox founder Mario Moretti Polegato with $1.8 billion.

Miuccia Prada is the sole woman to appear in the top 10. The designer is number five on Forbes’ list with an estimated worth of $6.8 billion, $3 billion more than her hus-band, Prada chief executive officer Patrizio Bertelli, who is in seventh position. — A.T.

AMFAR TO HONOR DUFFY: Robert Duffy, Marc Jacobs International and the singer Fergie will be honored at the amfAR Inspiration Gala on June 7 at the New York Public Library. The event entails an Olympic-themed men’s runway show, and sponsors include MAC Viva Glam, Piaget, Hugo Boss and B&B Italia. “The charity work we do is the most rewarding part of my work, and HIV/AIDS organizations are something I have been involved in for years,” said Duffy, president of Marc Jacobs International. “I feel lucky that Marc has always been so supportive of all the projects I get involved in.” AmfAR’s Inspiration series of benefits in New York, Paris, Los Angeles and São Paulo, Brazil, has raised more than $3 mil-lion for the organization since launching in 2010 with producer Josh Wood. The New York gala will be preceded by another São Paulo edition on April 26. — DAVID LIPKE

COLBIE AND LILY.B: Skin care lines and sing-ers apparently make great music together. Nivea is singing a happy tune with Rihanna,

and Proactiv is rocking out with Katy Perry. The latest pairing of a singer with a skin care line is Colbie Caillat with Lily.B Skincare. The Grammy Award winner, whose chart-topping pop hits include “Bubbly” and “Brighter Than the Sun,” has signed a mul-tiyear agreement to become Lily.B’s first official celebrity spokeswoman. “The Lily.B line is simple, made of natural ingredients, without the use of parabens, dyes or colors,” stated Caillat, “and I really love that they don’t test on animals.” Caillat will promote Lily.B in print, online, in-store and through social media materials, and hold a series of appearances for the brand. She is going on a 22-city concert tour with Gavin DeGraw start-ing May 25. Lily.B is a natural skin care line aimed at women 22 to 38 years old, which launched in 2010. — RACHEL BROWN

PRIZED DESIGNS: The Hyères fashion festi-val has just gained another prize. French fashion house Chloé said it will launch the Chloé Prize at the 27th International Festival of Fashion and Photography in the French Riviera town. The festival, which this year runs from April 27 to 30, is a platform for emerging talent that has helped launch the careers of stars such as Viktor & Rolf and Felipe Oliveira Baptista.

Ten participants will create a silhou-ette in the spirit of Chloé to compete for the award, worth 15,000 euros, or around $20,000 at current exchange. Chloé, an official partner of the festival, said it had committed to awarding the prize for the next three years. — ANGELA WATERS

WWD.COM11WWD tuesday, april 3, 2012

HSN Acquires Chasing Fireflies

URBAN OUTLAY: Glen Senk didn’t collect a performance bonus as chief executive officer of Urban Outfitters Inc. after leaving to take the same post at — and an equity stake in — David Yurman Inc. in January. Nonetheless Senk collected $942,000 in salary, a $5,000 bonus, $3,000 in other compensation and 1.6 million in option awards, with a value of $16.9 million, that vested during Urban’s 2012 fiscal year, accord-ing to the company’s proxy, filed with the Securities and Exchange Commission late Monday. In its an-nual report, also filed with the SEC, the com-pany said that its same-store sales so far in the fiscal first quarter were tracking upward in the low-single digits. — ARNOLD J. KARR

IN LIVING COLOR: While Marc Jacobs continues to add to his fragrance empire, he has a new beauty project going as well: color cosmetics. Jacobs, who is working with Sephora to do the line, noted that, while it’s in its early days, he’s pleased to delve into the makeup world. “Anything to me that is part of the joy, the ritual, of getting dressed — things that women enjoy like bags, shoes, fragrance, clothes, makeup — that’s what fashion’s about for me,” said Jacobs, during an exclusive inter-view for his newest scent, Dot, which will be launched by Coty Prestige in July. “I love the opportunity, wherever there is one, to adorn, to decorate, to scent, to dress. That’s what fashion’s all about. It’s not necessary, it’s something you want — it’s a fancy and a whim.”

Jacobs said he had his first meeting for the color line last week. “I see makeup, fragrance — everything, really — as an opportunity. The idea of choosing a color for your lip, or an eyeliner — it’s just such a delight. The ritual of waking up and making those choices is something people really enjoy. We currently are working on defining what Marc Jacobs cosmetics will be, what they’ll say, what makes them dis-tinctive. I think that will take some time, but the first meeting was good.” A target launch date has not yet been identified, Jacobs added. — JULIE NAUGHTON

ARMANI’S ARENA: Giorgio Armani has always been a basketball fan, so much so that he first said in 2010 that he would sup-port the renovation of Milan’s historical Palalido, a 53,282-square-foot sports cen-ter originally built in 1961, with a dona-tion of 2.4 million euros, or $3.3 million

at current exchange. The opening of the new structure was originally scheduled for the following spring, but work took longer than expected. That seems to be coming to an end, however, as an Armani spokeswoman said the newly restored facility will open in 2013, and it will be renamed Pala Armani. In addition to sports, the structure will also hold con-certs and social events. — FABIANA REPACI

IN THE PICTURE: Bottega Veneta has teamed with digital-camera manu-facturer Red Digital Cinema Camera Co. to launch an annual photo contest called New Exposure. Organized in collaboration with the AIDS Community Research Initiative of America and media company Milk, the com-petition aims to discover and support new tal-ent in photography. “At Bottega Veneta, we have collaborated with many extraordinary photog-raphers over the years,

and have worked to support both young artisans and emerging artists around the world,” stated Bottega Veneta creative director Tomas Maier. “Our hope is that the competition will impact the careers of many deserving talents.”

The candidates will be judged by a jury that will include Maier; Jarred Land, president of Red Digital; International Center of Photography curator Carol Squiers; Vogue photography director Ivan Shaw; artists Ross Bleckner and Jack Pierson; photographer Stewart Shining, and creative director Doug Lloyd.

The award will be given at an event in New York City on July 11 and includes a $10,000 cash prize; a Red Epic-X cam-era package; a one-year mentorship program by Management Artistic photo agency, and the possibility of shooting for Bottega Veneta. — ALESSANDRA TURRA

ITALIAN WEALTH: According to research published by Banca d’Italia, Italy’s cen-tral bank, the wealth of the 10 richest Italians corresponds to the combined wealth of the country’s poorest 3 million citizens. Banca d’Italia’s Giovanni D’Alessio, who compiled the research, also high-lighted that 10 percent of the richest Italian families own more than 40 per-cent of the country’s total net wealth.

Rome-based daily newspaper Il Messaggero turned to Forbes’ list of billionaires and published the names and photos of the 10 richest Italians. These include Luxottica’s founder Leonardo Del Vecchio with an estimated

Fashion scoops

MULTICHANNEL RETAILER HSN INC. has acquired Chasing Fireflies LLC, a di-rect-to-consumer marketer of premium children’s and baby products, through its Cornerstone Brands operating unit.

Financial terms of the transaction weren’t disclosed. HSN said that the firm had 2011 sales of about $39 mil-lion and its addition to the company is expected to add to earnings during the current fiscal year.

Dina Alhadeff, Amy Grealish and Lori Liddle, who founded CF in 2006, will re-main with the business and continue to supervise operations from their offices in Seattle. They will report to Mark Ethier, chief executive officer of Cornerstone.

“This acquisition will leverage Cornerstone’s strong infrastructure, customer file and digital platform to drive additional growth for the brand,” said Mindy Grossman, ceo of HSN,

based in Saint Petersburg, Fla.Chasing Fireflies markets better ap-

parel, accessories, toys, home furnish-ings and gifts for girls, boys and babies, and provides an array of special occa-sion merchandise available online, at chasing-fireflies.com, and through cata-logues. Although Cornerstone’s Garnet Hill brand offers merchandise for young girls, the acquired company is the first in the Cornerstone stable to focus exclu-sively on children’s merchandise.

The Cornerstone unit distributes more than 300 million catalogues annu-ally and operates eight digital Web sites as well as 19 retail stores. In addition to Garnet Hill, its brands include Ballard Designs, Frontgate and The Territory Ahead. Each brand has a Web site that allows users to link to the sites of the other brands in the portfolio.

� —�ARNOLD�J.�KARR

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the cause of death was chronic heart failure, according to her husband, Frank Crivello.

after growing up in Washington Heights, seroy start-ed her seventh avenue career as a fit model before venturing into sales. that decision proved

to be fruitful, with max mara, brioni, gianfranco Ferré, luca luca and genny among the com-panies that counted on her guid-ance at one time or another.

in the seventies, she and her first husband, michael seroy, started a knitwear col-lection under his name, which was sold to such stores as saks Fifth avenue. adrienne Vittadini and her husband, gigi, were their business partners. once the company closed in the late eighties, sandra seroy, who had

spent part of the decade study-ing business and marketing at the new school, went to work for max mara. Her husband joined Country Road as head designer and launched the label in the U.s.

in search of the new at Charivari, seroy befriended marc Jacobs there when he worked on the sales floor in the eighties, her son gerald seroy said. she was also a major fan of Prada before the label was wide-spread. “even though she worked for all these other labels, she al-ways wore Prada,” he said.

after exiting brioni in 2008, seroy teamed up with Crivello,

whom she married a few years before, to work in real estate development in the Hamptons. “on one level, sandra was in-terested in creating couture de-sign for homes. she knew from her experience in the fashion world that the clientele out in the Hamptons would appreciate that, and they did,” said Crivello.

she is survived by Crivello and gerald seroy. a memorial service will be held some time in June in southampton, accord-ing to Crivello.

WWD.COMWWD TUEsday, april 3, 201212

obituary

Industry Veteran Sandra Seroy

Calvin Capsule Line Set for Macy’s Hermès Headed to GreenwichBy lisa loCkWood

HeRmes is headed to greenwich, Conn. the company has signed a lease for a retail store at 289 greenwich avenue, previous home of best & Co., the children’s wear store.

the new corner location, which measures 5,250 square feet, will carry the full breadth of Hermès products, including leather goods, silk scarves and ties, men’s and women’s ready-to-wear, fine jewelry, fashion accessories, equestrian prod-ucts, watches, home furnish-ings, porcelain, crystal, furni-ture and fragrance. the store is slated to open in late spring of 2013. its greenwich avenue neighbors include Ralph lauren, scoop, saks Fifth avenue, tumi, alice + olivia and intermix. Hermès has 26 freestanding stores in the U.s., in addition to its Web site.

as a result of the move to its own location, Hermès will exit its 1,000-square-foot shop-in-shop at Richards of greenwich, said Robert Chavez, president and chief executive officer of Hermès of Paris. the shop had

been operating at Richards, the 27,000-square-foot men’s and women’s specialty store, since 2000. “the space in Richards was fine for years, but there’s a lot more potential if we go with our own boutique,” said Chavez.

according to bob mitchell, co-president of the mitchells Family of stores, which owns Richards, “We’re timing it so that beginning next spring, we’ll exit the business at the same time they open. they wanted a bigger space [at Richards] and we couldn’t do it,” said mitchell. He said a 1,000-square-foot Hermès shop will continue to operate at mitchells in Westport, Conn. mitchell noted that 80 percent of the Hermès volume is done in women’s, with leath-er handbags, silks, scarves and enamel jewelry top sellers. it also does well with men’s ties. mitchell said it hasn’t been de-termined what will go into the Hermès space at Richards, which will be reconfigured.

“the business has done well. We couldn’t find a way to make it so much bigger and we decid-ed to wish them well and have them be a neighbor and be very neighborly,” said mitchell.

By kRisti ellis

WasHington — mexico, argentina and brazil have erect-ed or expanded trade barriers against U.s. apparel, footwear and textiles and the roadblocks are threatening to have a major impact on the american industry, according to an annual report on trade barriers released by the U.s. trade Representative’s office on monday.

a trade barrier erected by mexico in which the govern-ment’s tax authority has begun subjecting U.s. companies to audits, requiring them to verify the origin of their inputs dating back as far as 2007, could cost companies millions of dollars, the report said.

“in some cases, [mexico’s tax authority] has reportedly denied the exporters claim of naFta preference even after the submission of documenta-tion demonstrating that the products meet the agreement’s rules of origin,” the report said. “the fines and penalties in such cases can be very high (in ex-cess of $10 million), and there

are substantial costs associated with complying with the audit and even greater legal costs for appealing the rulings.”

Cass Johnson, president of the national Council of textile organizations, said textile pro-ducers that exported $4 billion in fabric and yarns to mexico, have been spending “an enor-mous amount of money” to comply with the audits, hiring lawyers in mexico and gather-ing years’ worth of data.

“they say they want all of a company’s records for the past two years — production, sales invoices, employment numbers, shipping documents,” Johnson said. “it’s a huge list. so com-panies that have never had any record of fraud can suddenly be asked within a 30-day time period to produce thousands of documents and send them down to mexico City under threat of very heavy fines and penalties.”

Johnson said the mexican government pledged to an-nounce revisions to the audit requirements by march, but has not yet done so.

“argentina, brazil and other key markets continue target-

ing our industry with damag-ing and costly policies that erode the competitiveness of U.s. companies and undermine their ability to employ U.s. workers,” said kevin burke, president and chief executive officer of the american apparel & Footwear association.

the two south american countries have implemented and recently expanded nonau-tomatic importing licenses that are impacting the fashion indus-try and making it difficult to sell products in those countries.

import restrictions imposed by argentina, in particular, have had a major impact on U.s. apparel and footwear brands and textile producers that face wait periods of six months or longer to get approv-al of licenses. some companies are denied import licenses al-together without explanation.

the U.s., european Union and 12 other World trade organization members on Friday turned up the pressure on argentina to end its import restrictions affecting an esti-mated $1.7 billion worth of ap-parel, footwear and textiles.

USTR Report Cites Trade Barriers

By maRC kaRimzadeH and daVid moin

neW yoRk — When macy’s kicks off its spring promo-tion — “a magical Journey to brasil” — next month, it will bring a distinct brazilian flavor to its stores and, with it, one of the country’s most acclaimed designers: Francisco Costa.

as part of the promotion, Costa, who serves as women’s creative director of the design-er-level Calvin klein Collection, is creating a limited edition capsule line of dresses under the Francisco Costa for Calvin klein nameplate, replete with its own label and hangtag. With retail price points from $135 to $180, it marks the first time Costa is bringing his designs to the more affordable arena at a national retailer.

“this fresh, youthful line of dresses reflects both my roots and the modern, yet time-less spirit of Calvin klein,” said Costa, who is a native of guarani, brazil.

When macy’s executives ap-proached tom murry, president and chief executive officer of Calvin klein inc., about the brazil promotion and the idea of Costa designing a capsule line for it, he jumped at the chance.

“From a branding stand-point, a limited edition cap-sule — a one-time event cel-ebrating brazil and the fact that Francisco is brazilian and designs for Calvin klein Collection — felt like a won-derful brand-building oppor-tunity, as well as a commercial opportunity,” he said.

macy’s executives also con-sider it a win-win. “this is a huge coup for us,” said martine Reardon, macy’s inc.’s execu-tive vice president of marketing. “We obviously have a huge dis-tribution of Calvin klein prod-ucts but we do not carry the [de-

signer] collection that Francisco creates. Unfortunately, those price points are not within macy’s price points.”

Costa’s capsule Calvin klein collection for macy’s falls in line with the department store’s better and best price zones, Reardon noted.

she said Costa’s inspiration for his capsule collection “really came from some of the architec-ture in brazil and the sunset on the horizon there” rather than

the bright, happy colors and bold graphic prints that will be very evident in the promotion and that brazilian designers are known for.

Costa translated the purist Calvin klein aesthetic with pure lines and clean shapes for dress-es in crepe and jersey materials.

Reardon also said Costa’s collection will be housed in a shop and promoted with out-door and online marketing, direct mail, a video shot in brazil, and other multimedia.

the line is exclusive to the two-month promotion and will be available at more than 80 macy’s stores, as well as macys.com. the dresses will be un-veiled on may 15, just in time for the program’s kickoff.

Costa is not the only Cki de-signer to create special prod-uct for the promotion. kevin Carrigan, the global creative di-rector for ck Calvin klein, Calvin klein and Calvin klein Jeans, created a collection of men’s and women’s Calvin klein apparel for the occasion, which features brazilian touches through vi-brant colors and prints, and ex-tends to accessories and a spe-cial “brasil”-inspired offering of Calvin klein Underwear.

during the promotion, which will benefit the amazon Rainforest, the designs and cul-ture of one of south america’s fastest-growing economies will be spotlighted, and ready-to-wear and accessories will be the largest component. almost all of macy’s 800 stores will have something brazil-related, al-though the bulk of the program will be at 300 macy’s locations. shops for authentic brazilian products in fashion, home, beauty, men’s wear, accessories and art will be created, and macy’s is collaborating with other designers from the U.s. and brazil on exclusives, though Reardon declined to disclose other participants.

A sketch from the Francisco Costa for Calvin Klein dress collection, which is exclusive to Macy’s Brazil-themed promotion.

Sandra Seroy in March 1997.

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