Warhol`s Women - multi media exposure

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The real society — on
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PAGE 9
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FRIDAY, AUGUST 24, 2012 Q $3.00 Q WOMEN’S WEAR DAILY
Warhol’s
Women
When he decided to pay
homage to Andy Warhol in
cosmetics form, François
Nars started with the artist’s
muses: Candy Darling, Debbie
Harry and Edie Sedgwick,
whose images all play a part
in Nars’ Andy Warhol Holiday
Collection (shown here from
top to bottom). The result is a
multichannel color cosmetics
lineup coming this fall. One
collection, a colorful ode to
Warhol’s Pop Art, will enter
Sephora in October, while a
second, intended to capture
the spirit of the artist’s Silver
Factory, will be launched Nov.
1 only in department and
specialty store doors. For
more, see page 6.
PHOTO BY GEORGE CHINSEE; STYLED BY AMY LOMACCHIO
EXCLUSIVE
Horowitz Joins DVF,
Is an IPO in Future?
By LISA LOCKWOOD
NEW YORK — Joel Horowitz, one of the architects
of Tommy Hilfiger’s success, has joined Diane von
Furstenberg as cochairman.
Industry sources said that Horowitz’s intention
is to take a stake in the company, and that he was
brought on board “to help professionalize” DVF.
Given Horowitz’s track record, the goal could be an
eventual initial public offering or outside investment.
Both founder Diane von Furstenberg and
Horowitz, as cochairmen, will jointly oversee the
board. Paula Sutter, who remains president, will continue to manage the day-to-day business and will report to the board.
With 35 years of experience in the apparel industry, Horowitz, 61, is widely credited in the building of
Hilfiger into an international multichannel brand. He
served as Hilfiger’s business partner and chief executive officer for 19 years, stepping down as ceo in 2003.
“I made a decision a long time ago to avoid joining
any boards unless I could be actively involved in the
company,” said Horowitz. “I’ve seen so many opportunities over the past few years, but none have shown as
much potential or excited me as much as DVF. Diane
and her team have created something incredibly special that consumers all over the world appreciate,
and I look forward to working with the management
team to further grow the business.”
Von Furstenberg said, “Looking back 13 years when
I relaunched DVF, I am proud of where Paula Sutter
and I, and our entire DVF team, have brought the company. We now have a global brand, a half-billion dollars
in retail sales, eight freestanding stores, and are represented in more than 70 countries. We are at the perfect
stage for even greater worldwide growth, and I’m very
excited that we’ve been able to attract someone of Joel
Horowitz’s expertise and experience to join our company as cochairman of the board.”
Sutter added, “This is a very exciting moment in
the evolution of our business, and I’m [pleased] to
have the opportunity to work with Joel.”
Von Furstenberg first entered the fashion world
SEE PAGE 12
NORDSTROM’S STRATEGY
Lessons From HauteLook
By RACHEL BROWN
NORDSTROM INC. doesn’t acquire much and, when it
does, those acquisitions take time to marinate.
The department store chain ventured outside its
four-wall comfort zone in February 2011 by purchasing flash-sale pioneer HauteLook for $270 million, and
some financial analysts have concluded that it spent
too much to do so. But Nordstrom and HauteLook assert the mind meld between retail’s odd couple — one,
a 111-year-old risk-adverse, personal service-driven
company trying to sort out its digital role, and the
other, a nimble Web outfit that carved out a Californiacasual niche when the recession thrust online fashion
deals center stage — has just begun to bear fruit.
“It’s interesting and similar to buying a house. You
literally go visit something three or four times, and then
you make this big purchase. Then you move in it, and
you kind of start to understand how the light hits the
house, how things move in the house and where you want
things,” said Adam Bernhard, chief executive officer and
founder of HauteLook.
Moving from analogy to reality, he continued, “It took
about six to nine months before we really started to see
where the synergies existed. Nothing came out of the
gate, but now — I think [more than] 12 months later —
we’re really starting to see the two companies understand where the integration is going to be possible.”
SEE PAGE 4
2 WWD FRIDAY, AUGUST 24, 2012
By VICKI M. YOUNG
NEW YORK — Mexican billionaire investor Carlos Slim Helú
has sold 1.5 million shares of
Saks Inc., bringing his stake in
the luxury retailer down to 25
million shares.
At 25 million shares, he still
owns 16.5 percent of Saks.
Shares of Saks Inc. closed at
$11.66 Thursday in trading on the
New York Stock Exchange. At 25
million shares, Slim’s Saks holding is worth $291.5 million.
The series of share sales
took place on Monday and
Tuesday, according to filings with
the Securities and Exchange
Commission Wednesday. The
disposed shares totaled $17.8
million, or an average per-share
price of $11.75.
With a 16.5 percent stake,
based on Saks’ total diluted
shares outstanding of 151.2 million as of July 28, Slim is still
Saks’ single-largest shareholder. 876,000 shares of Saks in a series
That puts him ahead of Diego of purchases over a two-day period
Della Valle, Tod’s SpA chairman in August 2011, two days after the
and chief executive officer. Della retailer posted second-quarter reValle’s stake totals 22.7 million sults that showed reduced losses.
This time Slim’s stock sales
shares, or 15 percent.
For awhile, the two had been came a week after the chain postin a pattern where one buys up ed a second-quarter net loss of
$12.3 million,
Saks shares to
or 8 cents a dileapfrog over
luted share, althe other as
though the loss
the top direct
was smaller
holder, only to
and the sales
have the other
larger
come back and AMOUNT CARLOS SLIM HELU OWNS gain
than
expected.
take over the
OF SAKS AFTER SALE OF STOCK.
Stephen I.
lead. That buySadove, Saks’
ing
pattern
contributed to speculation that chairman and ceo, said a week ago
a takeover of Saks might be in following the earnings release that
the works, although neither one the luxury customer is healthy and
has said he wanted control of the spending has held up, although
“it’s not as robust as a year ago.”
luxury chain.
Women’s designer apparel
The shares were acquired by
Slim through his Mexican trust was the letdown for the quarter
Inmobiliaria Carso SA de CV. Slim as traditional styles and classic
family members are beneficia- brands didn’t sell as well as conries of the trust. He last acquired temporary lines.
IN TODAY’S WWD
A view of the
Ball at The
Breakers in
Newport.
16.5%
Guess Posts Drop in Q2 Earnings
··
product line lacked variety, key volume drivers and
By EVAN CLARK
did not reflect the improvement we have made,” the
ceo said. “We are committed to making the necesINVESTORS ERASED a fifth of Guess Inc.’s market sary change to reverse this trend and are working
value after the company reported lower second- with our partners [and] licensees to improve the
product offering in our stores.”
quarter earnings and cut its outlook for the year.
Women’s apparel was the strongest category in
The jeans brand’s stock fell 22.6 percent Thursday
the brand’s full-priced stores.
to $25.95 — not far from its 52-week low of $24.23.
Guess now expects diluted earnings per share
Second-quarter earnings attributed to the company declined 29.3 percent to $42.9 million, or 49 cents will range from $2.15 to $2.30, a significant cut from
a share, from $60.7 million, or 65 cents, a year earlier. the $2.50 to $2.65 projected in May. Marciano vowed
to continue to manage the
Revenues for the three
business “prudently.”
months ended July 28
Randal Konik, an anadeclined 6.2 percent to
lyst at Jefferies, said the
$635.4 million from $677.2
company enters the third
million. Comparable-store
quarter “amidst an elevatsales in North America
ed competitive environfell 8.5 percent.
ment, we don’t think the
Chief executive officer
brand is at a point where
Paul Marciano told analysts
management can try to not
on a conference call that the
be promotional.”
company’s North American
Guess’ stock drop stood
retail business was “clearly
— PAUL MARCIANO, GUESS INC.
out on a generally bad day
a disappointment.”
for the markets.
“We did not experience
The S&P Retail Index fell 0.6 percent, or 3.93
the results that we expected,” Marciano said. “The
environment continued to be very promotional and points, to 638.91, as the Dow Jones Industrial
with less profit, especially during the second half of Average dropped 0.9 percent, or 115.30 points, to
the quarter. The summer months brought a sharp 13,057.46. Also losing ground were Vera Bradley
Inc., down 6.5 percent to $24.85; New York &
decrease in visitors from Europe in the stores.”
Business was weakest in the company’s stores in Company Inc., 5.8 percent to $3.75; Sears Holdings
Corp., 2.7 percent to $54.42, and Avon Products
tourist locations.
Guess’ weakest category was accessories. “Our Inc., 2.7 percent to $15.50.
The summer months
brought a sharp
decrease in visitors from
Europe in the stores.
··
Ackman Aims for Simon Takeover of GGP
WILLIAM ACKMAN — the most
active of activist investors —
is trying to engineer a Simon
Property Group Inc. takeover of
General Growth Properties Inc.
Ackman,
who
through
his Pershing Square Capital
Management holds stakes in not
only General Growth, but J.C.
Penney Co. Inc. and Procter &
Gamble Co., has been working on
a deal with Simon since October.
Ackman owns 72.2 million
shares of General Growth, as
well as warrants and cash-settled
swaps that gives him control over
10.2 percent of the mall operator.
The investor bought into General
Growth before the firm filed for
Chapter 11 protection in April
2009 and was an active player
in the bankruptcy process, ultimately emerging as chairman of
The Howard Hughes Corp., a new
firm that holds part of General
Growth’s former holdings.
Simon and Ackman initially
THE BRIEFING BOX
PHOTO BY JOHN W. CORBETT/CORBETTPHOTOGRAPHY.NET
Slim Sells 1.5M Shares of Saks
discussed a transaction where
Simon would buy General
Growth in a stock deal, swapping
each share of General Growth
for 0.1765 of a share of Simon.
The deal would have valued
General Growth at $21 a share,
a 65 percent premium from trading at the time.
Ackman, who laid out the details of the deal-making in a letter to General Growth’s board
that was filed with the Securities
and Exchange Commission, took
the deal to Brookfield Asset
Management, which controls 42.2
percent of General Growth.
Brookfield countered with a
series of proposed transactions
that Ackman said were complex and raised fiduciary issues.
Ackman also said he was not interested in selling his stake in
General Growth without a “substantial premium.”
Brookfield said it has “no interest in selling its stake in GGP.”
Ackman asked General
Growth’s board to form a special
committee to consider a sale of
the company and to hire legal
and financial advisers. He also
asked the special committee to
engage with all interested parties
and the board to suspend a dividend reinvestment program that
effectively increases Brookfield’s
stake in the company.
“Because we believe the Simon
transaction would be highly accretive to Simon, we would expect
Simon stock to increase as a result
of transaction synergies, which
would deliver even greater value
to GGP shareholders,” Ackman
said. “This potential premium represents what the value of control is
worth to GGP’s shareholders.”
General Growth’s shareholders applauded the call to action
and pushed shares of the company up 9.7 percent to $20.32.
Simon’s stock, however, fell 1.4
percent to $156.46.
— E.C.
Joel Horowitz, one of the architects of Tommy Hilfiger’s
success, has joined Diane von Furstenberg as cochairman
of the board. PAGE 1
Nordstrom Inc. and flash-sale site HauteLook assert the
mind meld between retail’s odd couple has just begun to
bear fruit. PAGE 1
The better sportswear area, which has had its share of
challenges over the years, is working hard to get its act
together. PAGE 3
With next month’s opening of a pop-up store and gallery
and exhibition titled “The Art of Knit,” the United Colors of
Benetton will once again live up to its reputation. PAGE 3
Liberty expanded earlier this summer with an accessories
hall, showcasing a host of brands new to the store,
including Carven, Coach and Kenzo. PAGE 5
Andy Warhol will live this fall at cosmetics counters,
courtesy of François Nars and a multichannel color
cosmetics collection. PAGE 6
Hanae Mori is entering rugged terrain with a new offering,
HiM by Hanae Mori, its first eau designed for male
consumers in over a decade. PAGE 7
Boots, the British beauty and wellness brand, is restaging
its No7 skin care range and plotting growth on American
shores. PAGE 8
Asking for exclusive beauty merchandise is nothing new
for retailers, but the heat is on as store chains demand to
have their own. PAGE 8
Hal Rubenstein, fashion director at Instyle and a founding
editor of the magazine, will move into an editor at large
role in October. PAGE 9
Rent the Runway “closets” at the W Union Square, W Times
Square, W New York and W Downtown hotels in Manhattan
are being set up Sept. 5 for fashion week. PAGE 12
ON WWD.COM
Newport Ball at The Breakers: The Preservation Society
of Newport County held its annual Weekend of Coaching
where the social set took in a display 19th-century horse
and carriages. For more, see WWD.com/eye.
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Better Sportswear Off to Fast Start
ing that brand. “It has a lot of color and
prints.” She said the knit and jacket businesses have been strong performers.
The store carries the Vince Camuto
line, and the tops and pants have been
selling well. “The category we’re struggling with is dresses. They have to work
a little bit more on them,” said Garman.
In general, she said, “The fall goods
are just landing. The
customer can get
whatever she wants
on the Internet and
is a lot savvier today.
She does expect more
and she responds to newness and fashion, and when the product is right, the
business follows.”
Tony Buccina, chief merchandise officer and vice chairman at The Bon-Ton
Stores Inc., the 272-unit department
store chain based in York, Pa., is also
experiencing early success in the better
area for fall.
“We made a bet on color, prints and
the blazer category. We made a big bet on
activewear,” said Buccina.
A particular bright spot is the various
Calvin Klein businesses, such as career,
sportswear, dresses and active casualwear, which are coming out of G-III. “Our
business with them is absolutely spectacular in all areas. You look at G-III for
coats, career, sportswear and dresses;
the growth I’m getting out of them is
enormous. It’s high-double digits and
margin rich,” he said. Calvin Klein’s performance wear is also doing well. “It is
one of the biggest things we have going
on at our company,” he said.
Buccina said prints were selling well
in the blouse category. He also has done
well with better dresses from both Calvin
Klein and Anne Klein. “They’re tasteful,
they hit a wide audience and they’ve really made them affordable. They’re giving you style and really good value.”
Another good selling line has been
DKNY Jeans, which is now under Donna
Karan International.
“The new DKNY Jeans has just start-
Colored jeans
continue to be a
big seller. Here,
an assortment
from Paige Denim.
Knitted objects, art and
fashion will be the focus
of Benetton’s pop-up
store and gallery.
Benetton to Open Pop-up Shop
By ROSEMARY FEITELBERG
NEW YORK — With next month’s opening
of a pop-up store and gallery and an exhibition titled “The Art of Knit,” the United
Colors of Benetton will once again be living up to its controversial reputation.
Visitors to the 2,200-square-foot space
will see artist Erik Ravelo’s “Lana Sutra”
knitted sculptures, life-size figures of
couples entwined in various Kama Sutra
positions. Ravelo once said of the Lana
Sutra series, “I’m a human being and I
don’t believe in borders. I think the world
belongs to everyone born on Earth. This
is my planet, our planet. No man is an island. Yes, I was born on Cuba but, above
all, I was born on planet Earth. I like to
think that Lana Sutra talks about universal love which cancels diversity.”
As its name suggests, “The Art of Knit”
will be a melange of colorful, knitted art,
design and fashion that will open Sept. 6 at
135 Crosby Street here in a former garage
next door to a BP station. Set to run through
December, the SoHo space is a collaboration between You Nguyen, Benetton’s chief
merchandising officer and creative director,
who designed the women’s and men’s fall
collections, and Sam Baron, design director
of Fabrica, the Benetton Group’s center for
communication research where international artists develop innovative art and media
projects. Ravelo is among the Fabrica artists
whose work will be displayed.
Visitors will enter through open garage doors on either end of the long rectangular space to find a range of 12 colors
that designers and artists used as inspiration. The installation will be composed
of art knitted by resident Fabrica artists,
ed to hit. They’re letting their talent run.
That’s what the market needed. They’re
making the jeans affordable and the
shops are terrific,” he said. He is also excited about what The Jones Group Inc. is
doing with its Jones New York and Anne
Klein businesses. “I love what Stefani
Greenfield [chief creative officer of The
Jones Group] is doing. She has really
put Anne Klein and Jones apparel back
on the map. She’s had a big influence on
their modern, traditional lines too.”
Buccina said he’s carrying some
Vince Camuto
s p o r t s w e a r.
“His clothes
are very fresh.
He’ll eventually get everything right and
it will become
a big business,”
said Buccina.
He said Lauren
Ralph Lauren
Jeans and activewear are
selling well.
Overall, he
said, “Our selling right now on
transitional is up
double digits for
ready-to-wear.”
Bon-Ton is having a lot of success
with its own brand, Laura Ashley. He
said it appeals to the Chico’s type customer, with a relaxed business-casual
look, with the jewelry and the bags.
“That business is really good.”
He said Bon-Ton isn’t threatened
by fast-fashion retailers such as Zara,
known for constantly refreshing merchandise on the floor. “The way I see
it, department stores, whether it’s us,
Macy’s, Dillard’s or Belk, have charge
card customers. (It represents half of
our company sales.) We speak directly
to our customer. We promote with TV,
direct mail, e-mails and circulars. It’s
something that Zara doesn’t do. We’re
one-stop shopping at department
stores. We carry the best of class brands
throughout all areas of our business,”
said Buccina.
Kathy Bradley-Riley, senior vice president of merchandising at the Doneger
Group, said sales of better sportswear
have gotten off to a good start at retail.
“Merchandise is just starting to get onto
the selling floor. There’s been reaction to
ponte as a fabric in pencil skirts, dresses
and jackets in both black and color. Any
kind of leather and suede item has been
very good, The whole colored skinny
bottom, particularly the ankle pant, has
been good.”
Bradley-Riley also noted that anything
new in lace or crochet, including lace trim,
has been selling. On the modern side, the
tuxedo look, in the jacket and striping
down the leg, has been selling well. Also
good for fall have been the statement jacket and the printed blazer. Animal and lace
prints are also selling, and the color teal
has been a standout so far.
PHOTO BY THOMAS IANNACCONE; KLEIN BY JOHN AQUINO
tinued support of our long-standing design partners and our relaunch of brands
such as Anne Klein and new launches
THE BETTER sportswear area, which has like that of Two by Vince Camuto, a more
had its share of challenges over the years, casual line to the already popular Vince
Camuto collection,” said Doroff.
is working hard to get its act together.
Barbara Garman, vice president, diWith Jones New York and Anne Klein
redesigning their sportswear lines, new- visional merchandise manager of better
comers such as Vince Camuto gaining sportswear at Belk Inc., the Charlottemomentum, Donna Karan International based department store chain with 303
taking back its DKNY Jeans business stores throughout the South, said that in
and revamping the collection, Michael terms of classifications, dresses continMichael Kors plowing ahead, and cat- ue to be an important part of the overall
egories like sportswear, dresses and per- sportswear mix. She noted that skirts are
formance from Calvin Klein doing well, picking up steam, and she’s mostly sellthe better floor is becoming a destination ing pencil skirts in knit and matte jersey
again at a time when sales of women’s printed fabrics.
“What the consumer really responds
designer apparel continues to struggle at
to is newness and color,” she said. For
department stores.
Colored denim, pencil skirts, dresses, fall, the color palette has gotten deeper.
leather and jackets appear to be per- “Every year, the wear-now factor beforming strongly at a cross section of re- comes so much more important,” said
Garman. “She wants to buy it today and
tail stores.
“Color has been a key driver across wear it immediately. A lot of manufacturall families of business and the better ers have done a great job of doing that.”
She said the third quarter is always
sportswear area is no different,” said
Frank Doroff, vice chairman and general challenging, especially in the South, bemerchandise manager of ready-to-wear cause it can still be really hot. She noted
at Bloomingdale’s, which has 37 full- that the Jones Signature collection has
price stores and eight outlets. “Wovens shown improvement “and their strategy
from brands such as Calvin Klein, of going after anchoring the bottoms busiMichael Michael Kors and Vince Camuto ness is just getting started.” The Anne
Klein business has been inconsistent and
have been a best-selling classifinot where they want it
cation; while dresses from T
to be, but new August
Tahari and Jones New York
product has just starthave been and will continue
ed to hit the floor,
to be a key item.”
she said. Michael
Doroff also noted that he’s
Michael
Kors
getting strong results from
continues to be
denim, which exploded
“an important
in the past year with all
brand and big
the new color offerings.
opportunity
“Casual denim, includfor us,” said
ing color, was a driver
Garman.
this spring and will carry
Overall,
through to the fall from
she said coldesigners such as Lauren
ored
jeans
Ralph Lauren, with a
are still sellfocus on corduroy.”
ing well and
In addition to what
woven tops
worked this spring,
have been on
Doroff said he was
an upswing.
looking forward to
Another topemerging trends like
selling brand for
leather, across all categoBelk is Karen
ries, and item jackets in a
Kane,
where
variety of styles that will
knit and woven
work for both casual and
tops are doing
career needs.
well, in addi“Overall, we have
tion to the maxi
seen success in
and
s h o r t e rthe more casual
length dresses.
elements of the
“Maxiskirts in
better sportswear
general, especially
collections, with a
Stores report
in
knit, are doing
move towards modstrong results
well,” she said.
ern and updated silfrom Calvin
Calvin
Klein
houettes, fabrics and
Klein. Here,
sportswear is also a
color. There is a definite extwo looks from
big
growth
opportucitement amongst our shopthe fall line.
nity for Belk, and the
pers in the better sportswear
retailer is expandcategory evidenced by our conBy LISA LOCKWOOD
WWD FRIDAY, AUGUST 24, 2012 3
WWD.COM
mixed with design objects that will be
available for sale, and a cornucopia of
Benetton sweaters. A $30 cable-knit iPad
case, a $45 dog sweater, a $119 Fair Isle
knit dress and a $95 women’s slashed
V-neck sweater with $29 coordinating arm
warmers will be among the offerings.
The way the company
sees the whole assortment of wool-covered
curiosities, “The space
celebrates
United
Colors of Benetton’s
commitment to creativity through art, craftsmanship, the use of
color and its roots as a
knitwear brand. In true
Benetton style it is a celebration of diversity —
needless to say you are also welcome.”
Through its brands, United Colors
of Benetton, Undercolors of Benetton,
Sisley and Playlife, the Benetton Group is
sold in 120 countries, and has a network
of more than 6,500 stores, including 65
stores in the U.S. and Canada.
4 WWD FRIDAY, AUGUST 24, 2012
Nordstrom’s Lessons From HauteLook
{Continued from page one}
Like most traditional department store giants, Nordstrom
feels it has to get younger and
digitally shrewd. The acquisition of HauteLook, whose members average 30 years in age
with an annual household income of more than $75,000, and
early integration efforts are an
attempt at both.
“We may have done a good
job over the years with the Baby
Boomer generation, but we have
also got to figure out how to be
relevant to the Millennial customer, and HauteLook has built
a business on figuring that out,”
said Nordstrom Direct president Jamie Nordstrom.
Marketing initiatives have
been geared toward getting
the HauteLook shopper to go
to Nordstrom stores and getting Nordstrom shoppers to join
HauteLook. Many of those initiatives have concentrated on
HauteLook and Nordstrom Rack,
the off-price division that is expected by yearend to have more than
120 units and to exceed full-price
Nordstrom’s 118 stores. For example, HauteLook prompted customers on April 19 to enter a contest
via Facebook to win Nordstrom
Rack shopping sprees and received 20,000 entrants in four days.
Later that month, from April 27 to
29, HauteLook put 175,000 inserts
in bags at 40 Nordstrom Rack
stores in California, Washington
and Oregon offering discounts to
Rack customers who signed up for
HauteLook.
Nordstrom said, “They talk to
customers who are rabid fashion fans on a daily basis. Our
ability to get Nordstrom into
that conversation has driven
some meaningful results.”
Put more simply, Bernhard
declared, “We are doing a very
good job of moving our customers to Nordstrom.”
In addition to customer integration, HauteLook has been integrated into Nordstrom’s buying apparatus and supply chain.
Bernhard noted that Nordstrom
Rack buyers have been placed
in HauteLook’s offices in Los
Angeles and New York, where
it has 300 and 25 employees, respectively, providing “us exposure to a lot more product.”
“We have the opportunity
to participate in purchases
that they’re doing,” he said.
Whatever doesn’t sell on
HauteLook often winds up at
Nordstrom Rack stores.
HauteLook has also become
Nordstrom’s new-brand testing ground. Last September, for
example, the site teamed with
makeup brand Lorac for two exclusive eye shadow palettes and
sold thousands of the palettes
in a day. The sales convinced
Nordstrom, otherwise unlikely to take a chance on a small,
unproven vendor, that Lorac
would work in Nordstrom Rack.
This September, HauteLook
will offer another exclusive palette for $14 that will be made
available in all Nordstrom Rack
doors for a limited period.
“When you are able to introduce a new brand to customers
through the flash-sale channel,
they are much more likely to go
buy that brand at regular price
in a different channel. Certainly,
brands that we work with understand that,” said Nordstrom.
Adam Bernhard
Segueing to bigger brands,
he highlighted that Nordstrom’s
ability to provide access to flashsale, full-price and off-price
channels is an asset. “We have really been focused on our biggest
brands and having the conversation with them around all the different ways we can partner with
them,” he said. “We are able to be
that one-stop shop for vendors.”
At the Rack, Leah Vermulen,
a senior vice president at
Tiburon Research Group, saw
the retailer’s connection to
HauteLook make a difference
in the selection. “It was very
beneficial to build relationships
outside of their core relationship
structure. It has certainly elevated the Rack’s offering,” she said.
However, she cautioned that
in her view, the quality of merchandise on HauteLook has diminished as competition among
flash-sale Web sites has risen
business gets better, that percentage could stay the same, but
it still means that there’s an increase in excess,” he explained.
Bernhard estimated that 80
percent of HauteLook’s merchandise is “opportunistic”
excess, while the remaining 20
percent he dubbed “planned”
excess intended for flash sales.
Since the Nordstrom purchase, HauteLook’s membership has grown exponentially.
It had 4 million members at the
outset of 2011, was up to 7.5 million at the end of the year, and
has reached around 9 million
this year, which Bernhard said
is the largest membership in the
online flash-sale sector. “We’re
still acquiring members at the
same rate that we used to —
even greater,” he said. “We have
not seen the acquisition price of
those members go up in a significant way. Until we start seeing
’’
’’
We have got to figure out how to be
relevant to the Millennial customer,
and HauteLook has built a business
on figuring that out.
— JAMIE NORDSTROM, NORDSTROM DIRECT
for the best goods. “There is not
enough desired merchandise to
go around,” claimed Vermulen.
Bernhard countered, “We
have not had a problem getting
the right supply.”
Although the flash-sale phenomenon was fueled by massive
excess inventory during the recession, he contended the recovering economy produces its
share of excess — a share that
HauteLook believes it has a
better chance at securing today
because of its relationship with
Nordstrom and its resilience as
numerous other deal sites have
failed. “A brand has a model
built upon a percentage of their
business in excess. As their
those types of things, we have a
long runway still to go.”
Nordstrom’s support has
buoyed HauteLook’s growth.
The site began advertising on
television in February with a
budget Bernhard disclosed was
in the seven digits and, pleased
with the results, is vetting deals
to incorporate its brand deeper
into television shows this fall.
“We had the comfort level that,
with Nordstrom behind us,
we had the funds available to
do this type of promotion, and
we’re continuing to leverage
that,” said Bernhard.
HauteLook is leveraging
Nordstrom’s abilities behind the
scenes as well. The company is
building a 750,000-square-foot,
state-of-the-art fulfillment center.
“We ship hundreds of millions of
dollars worth of goods, and we
need to have the expertise [to
do so]. Having expertise from
a company with the size and
knowledge of Nordstrom will
allow us to have a better experience for our members, which
is going to be the difference between winning and losing,” said
Bernhard, who stressed: “The
moat is getting deeper between
the haves and the have-nots in
the private-sale business.”
Women’s is HauteLook’s single biggest category, constituting 30 percent of sales. Home
and footwear are vying to be the
second biggest category. Men’s is
HauteLook’s fastest-growing category, but beauty and shoes are
experiencing strong growth, too.
“Our shoe business has doubled
in the last nine months. A lot of
that is due to the relationship
that Nordstrom has with the
shoe community. They’re known
as the big shoe store in America,
so we have been able to really
leverage that,” said Bernhard.
HauteLook stopped travel
and service deals following the
Nordstrom acquisition to home
in on the core strengths it shares
with the retailer. Across various categories, HauteLook runs
20 to 25 new deal events daily,
roughly double the number of
deals it was running a year ago.
Discounts are mostly between 50
to 75 percent off retail prices.
“We’ve narrowed the focus of
what we offer, but in those categories [we do have], we want to make
sure that we’re offering a broader
spectrum,” said Bernhard.
HauteLook is making moves
to keep the momentum in
beauty and men’s going. In
the fall, the site will launch a
beauty sampling program tied
to Nordstrom’s beauty department, and has tweaked the
look of its men’s sections to enhance their masculinity. Based
on Nordstrom’s online experience, HauteLook even decided
in March to lop off the tops of
male models’ heads in pictures
displaying clothes. “Nordstrom
intelligence that they had done
over the years had told them
that men don’t necessarily want
to see the faces. Women want to
see them,” said Bernhard.
The growth in the men’s business has influenced Nordstrom
throughout its Web portfolio —the
retailer was part of a $16.4 million
round of funding for online men’s
brand Bonobos and has partnered
with GQ to showcase men’s products picked by the magazine’s
editors. HauteLook’s figures underscore why. Bernhard said that
60 percent of purchases for men
used to be made by women, and
men made 40 percent, but the
reverse is true now. About six
months ago, he said, 6 to 8 percent of HauteLook’s database
was men, and that has increased
to 10 to 12 percent. HauteLook, of
course, is the preferred flash-sale
choice for Bonobos.
In both its men’s and women’s
businesses, Nordstrom maintains the value of HauteLook is
that it provides a platform for experimentation. “With Nordstrom
and nordstrom.com, it is a big
ship, and we are appropriately
protective of our brand. We are
always maybe a little hesitant to
try out-of-the-box things, where
with HauteLook, that’s always
what it is about. That alone adds
a ton of value to what we are
Jamie Nordstrom
doing at Nordstrom and will continue to pay dividends for a long
time,” said Nordstrom.
In its experimentation,
HauteLook has been paying a lot
of attention to personalization
and mobile. Already, members
receive tailored e-mails depending on what brands and categories interest them, but personalization can go much further.
“If we can get the formula right
where we’re delivering you what
you want to see.…I can add more
events without adding more
noise,” said Bernhard.
Concerning mobile, he
said: “There is going to be a
large percentage of people
who always come through the
e-mail, but we are actively focused on getting out of the inbox.” Twenty-five percent of
HauteLook’s weekday traffic
and 25 to 40 percent of its weekend traffic is from customers
using mobile devices.
’’
Marketing initiatives have been geared toward acclimating HauteLook and
Nordstrom customers to each company’s shopping platform.
’’
Having expertise from a company
with the size and knowledge of
Nordstrom will allow us to have a
better experience for our members,
which is going to be the difference
between winning and losing.
— ADAM BERNHARD, HAUTELOOK
While Bernhard touts mobile, he is less excited by
commerce on social media
Web sites. In December 2010,
HauteLook tried a sales event
with Diane von Furstenberg in
which merchandise was exclusively sold on Facebook. In the
months since, HauteLook has
done 15 other sales events on
Facebook in conjunction with
its Web site, but hasn’t done
additional sales events exclusively on Facebook.
“People don’t go to Facebook
to shop. They go to Facebook to
see what their friends are doing
and to post what they’re doing,”
said Bernhard. He argued the
same goes for Pinterest. “I don’t
believe that people want to go to
Pinterest to buy things,” he said.
That kind of Internet
During its fourth-quarter
2011 conference call, Nordstrom
executive vice president and
chief financial officer Michael
Koppel said HauteLook dragged
down earnings by 23 cents, 3
cents more than Nordstrom
anticipated, or in the neighborhood of $50 million. Next
year, Koppel forecast the pull
on earnings would be half that
amount. Despite the drag, he
projected HauteLook’s revenues would increase 60 percent
this year, a rate similar to last
year. HauteLook generated an
estimated $150 million in 2011
revenues. “We’re going to continue to invest in that business
and, hopefully, over the next few
years, see some more profitability there,” said Koppel.
In the first quarter ended
April 28, Nordstrom reiterated it expects HauteLook to
grow by 50 to 60 percent this
year, although its e-commerce
business in general is dragging down profit margins as it
invests in technology and services such as free shipping.
Bernhard
and
Jamie
Nordstrom defended the price
the retailer paid for HauteLook.
“Our company is worth a lot more
than it was prior to the acquisition if you look at the competitive
landscape and the evaluations of
some other people in the privatesales space. I think it was a fair
deal for all,” said Bernhard.
Nordstrom said, “We feel
very good about the return we
are going to get out of the investment and the long-term
prospects of HauteLook.”
Speaking generally about flash
sales, he stressed: “This is not a
fad. This is something that clearly
has a lot of growth potential, and
customers are going to want to
shop this way for a long time.”
Craig Johnson, president
of Customer Growth Partners,
acknowledged Nordstrom may
have overpaid for HauteLook,
but described it as a “very savvy
and forward-looking move” for
the company because it sends a
cultural signal to “an otherwise
somewhat conservative and
homegrown organization that
innovation and outside ideas
will be welcome and nurtured.
“Haute is still relatively
small in the overall scheme of
things, but is ‘fighting above its
weight class.’ Its best days are
ahead of it,” said Johnson.
Certainly, the HauteLook
deal hasn’t scared Nordstrom
away from the online sector.
The retailer is planning to invest $140 million this year and
$1 billion over the next five
years in its online operations.
Revenues from Nordstrom
Direct rose 29.5 percent last
year to an estimated $913 million. (Nordstrom no longer
breaks out revenues from its
Direct division, and the $913
million figure is calculated
using the most recent growth
rates and past revenues disclosed for the division.)
The retailer made three
online investments last year,
including HauteLook, which
amounts to more deals than it
had done in any recent decade,
and is scouting future deals to
boost its digital presence.
“If I had to predict, I’d say you
probably will see us make more
investments like that, but think
about it in terms of capabilities
and how we can improve our
ability to serve customers online
because that’s where we think
the growth is,” said Nordstrom.
knowledge may be helpful to
Nordstrom, but Rob Wilson,
president of Tiburon Research
Group, suggested it doesn’t justify HauteLook’s purchase price,
which was $180 million in stock
and earn-out payments originally approximated at $90 million
over three years. Nordstrom
settled the earn-outs with a payment of $30 million last year.
The earn-out settlement is “an
admission in my view that it
was a disaster from a financial
perspective, and that is very
quick for them to have come to
that realization,” said Wilson of
HauteLook, adding: “My guess
is that it is going to be a small
part of Nordstrom for many
years to come, but my gut tells
me it won’t be a material driver
of their top line or bottom line.”
photos by tim Jenkins
WWD FRIDAY, AUGUST 24, 2012 5
WWD.COM
Here and below:
Liberty’s accessories
space boasts new
brands including
Lanvin, Loewe
and Valentino.
Liberty Expands Store,
Accessories Offerings
By SAMANTHA CONTI
LONDON — Little Marlborough
Street, a narrow, anonymous passageway off Carnaby Street, has
served over the years as a smokers’ alley, a rat run for busy locals hotfooting their way through
London’s Soho and a delivery bay
for the department store Liberty,
which backs onto the street.
All that changed earlier this
summer when Liberty broke
through its back walls, installed big
glass windows facing the street and
opened an accessories hall. The
2,000-square-foot space showcases
a host of brands new to the store,
including Carven, Coach, Kenzo,
Lanvin, Loewe, Valentino and
Sophie Hulme, in addition to old
favorites such as Stella McCartney
and Givenchy. The space also
stocks scarves, sunglasses and
small accessories by brands including Paul Smith, Marc by Marc
Jacobs and Jonathan Saunders.
The opening of the accessories
hall is just one step in the ongoing
transformation of the store, which
is located near Oxford Circus, including the doubling of the fine
and costume jewelry area to 4,000
square feet. “We wanted this room
to be one giant explosion of original thought,” said Ed Burstell,
managing director of Liberty, and
the driving force behind the expanded accessories spaces. “We
can’t compete with the bigger
stores and the brands they carry.
What we want to do with the jewelry in particular is to celebrate
design and craftsmanship and
launch new names.”
Besides some of the bigger jewelry brands like Pomellato, the expanded jewelry room also carries
New York-based Daimyo, which
specializes in silver unisex pieces; London-based Pippa Small;
Carolina Bucci, who weaves gold
together with yarn to make jewelry that feels more like fabric, and
Arman, an Armenian label with a
Byzantine feel.
Unlike some of its larger competitors such as Harrods and
Selfridges, Liberty owns 90 percent of the jewelry on offer, with
the remaining 10 percent made up
of concessions. The average price
for the jewelry is 500 pounds to
1,500 pounds, or $785 to $2,355 at
current exchange. The store plans
to add watches by the end of the
year. The accessories category, including jewelry, currently generates 15 percent of Liberty’s sales,
and Burstell said he’d like to increase that figure to 25 percent.
He declined to reveal the company’s sales. However, according
to industry sources, 2012 sales at
the flagship are projected to be 75
million pounds, or $118 million, at
current exchange.
By next spring, Liberty plans
to add an additional 1,500 square
feet of retail space by breaking
through more back-office space
that faces Little Marlborough
Street. Burstell remained mum on
what merchandise would go there.
Whatever category is ultimately selected, it likely will
not be the only new merchandise on the street. Shaftesbury
plc, the publicly listed company
that owns large swaths of central
London real estate, plans to develop its holdings on the other
side of Little Marlborough Street
next year. The stores have yet
to be confirmed, but there’s no
doubt that the street’s dark age
has finally come to an end.
6
WWD FRIDAY, AUGUST 24, 2012
beauty
Nars Does Warhol
ANDY WARHOL will live this fall at cosmetics counters, courtesy of François
Nars and a multichannel color cosmetics
effort that marks his brand’s — and the
Warhol Foundation’s — largest collaboration to date.
The Debbie Harry palette.
Why Andy Warhol? “Why not Andy
Warhol?” Nars, founder and creative director of the brand that bears his name,
countered to WWD. “I have always surrounded myself with Andy’s work and
even paid tribute to him in my past collections — Edie Eyeshadow, Chelsea
Girls Lip Lacquer, etcetera. This just
seemed like the right time to do [a bigger
effort]. Even more than 20 years after his
death, Andy continues to be one of the
most influential figures in both contemporary art and pop culture. Andy said, ‘If
everybody’s not a beauty, then nobody is.’
This is the same sentiment I wanted to
bring to life with Nars — a forward-thinking attitude toward beauty, and the encouragement to inspire self-expression,
creativity and artistry in the women who
wear it. It seemed like a natural fit to create a collection that Andy himself might
have a hand in if he were alive today.”
Warhol has been a longtime inspiration to Nars. “I first discovered Andy’s
work from Andy Warhol books my parents had when I was maybe 12 or 13
years old,” said Nars. “I remember being
so drawn to the colors — so bright and
graphic. I loved the painting of Marilyn
Monroe, his silk screens, the movies, the
photographs and the Polaroids.
“His artistic point of view has always
been so informative in my career as a
makeup artist and as a photographer.
Beyond that, I like to think there’s always
been a connection between us. His sense
of humor, and the way he approached art,
is something I think we share. He didn’t
take himself too seriously. I love that he
had so much humor and brought so much
joy to his art.”
The overall Nars Andy Warhol Holiday
Collection is split into two offerings: one a
Sephora exclusive that launches Oct. 1, and a
separate lineup for department and specialty
stores, which will launch Nov. 1.
Sephora’s collection is intended to be
Flowers eye shadow palettes.
an ode to Warhol’s Pop Art, and as such is Self Portrait 1, Self Portrait 2, Self
vibrant and colorful, noted Louis Desazars, Portrait 3, each $55 — offer new
chief executive officer of Nars Cosmetics. shades and Warhol quotes selected
Debbie Harry Cheek and Eye Palette, a $65 by Nars on the compacts.
A 16-item holiday color cosmetics
item, is inspired by Warhol’s 1980 paintings of the Blondie vocalist and includes collection will be sold with both the
new shades and a new diamond dust for- Sephora collection and the departmula. Kiss Mini Larger Than Life Lip Gloss ment and specialty store offering. The
Coffret, $55, features five new lip glosses collection includes five nail polishes,
— Silver Factory, Drella, each $18; Satellite of Love Highlighting
Chelsea Girls, Blue Movie Brush, $28; 47th Street Larger Than Life
and Myths — in a soup-can Long-Wear Eyeliner, $23; four Soft Touch
container emblazoned with Shadow Pencils, each $24, and five new
Warhol’s lip print. Walk on Larger Than Life lip glosses, each $26.
Nars said he especially loves the
the Wild Side, a $39 set, includes a silver illuminator, a Flowers and Andy Warhol Eyeshadow
mini It nail polish and a mini Palettes. “I’ve never seen anything like
Orgasm Larger Than Life lip them before, with the color going all the
gloss. Three eye shadow pal- way down to the bottom of the pan,” he
ettes — Flowers 1, Flowers said. “Andy’s quotes on the mirrors tie in
2 and Flowers 3, each $55 with beauty so perfectly — I couldn’t not
— comprise all new shades, include them. We also worked with Fabien
and each compact has a Baron, who did a great job on the design of
Warhol quote selected by the special Nars Andy Warhol logo lock-up
and packaging.” The secondary packagNars inscribed on the mirror.
The department and specialty store ing was rendered in silver and black, and
offering is intended to capture the spirit all palettes and gift sets will include mini
of Warhol’s Silver Factory — downtown, face charts that show consumers how to
black and white, with the edgy energy
of the screen tests and the
color of the silk screens,
noted Nars. The $200 Silver
Factory set includes the
Silver Factory Multiple,
a new shade; new shades
of Shadows Trios; Chelsea
Girls Pure Matte Lipstick;
Desire Blush; Via Veneto
Larger Than Life LongWear Eyeliner, and a large
domed eye shadow brush
and blush brush. The $75
Edie set, named for Edie
Sedgwick, is in a film canister emblazoned with a
shot from one of the actress’ original screen tests
with Warhol. It includes
Film Star Pure Matte
Lipstick, Edie Eyeshadow,
Carpates Eyeliner Stylo and
Deep Throat/Amour Blush
DuoShadow. Beautiful Darling,
$49, is named for the well-known
transvestite Candy Darling, one
of Warhol’s most prominent
muses and the star of his films
“Flesh” (1968) and “Women in
Revolt” (1971). It contains Candy
Darling Nail Polish, Femme
Fatale Duo Eyeshadow and
Woman in Revolt Larger Than
Life Lip Gloss in a makeup bag
with an image of Darling shot by
Nat Finkelstein, the late photogCompacts include Warhol quotes
rapher who worked with Warhol
selected by François Nars.
from 1964 to 1967.
The $35 Photo Booth set is
a mini nail polish lineup with
new shades named Back Room, Soup wear the colors and a leafCan, Chelsea Girls and Silver Factory. let insert that speaks to the
Three different eye shadow palettes — Nars and Warhol partnership.
The initiative is the largest licensing
effort done to date by the Andy Warhol
Foundation for the Visual Arts, said
Michael Hermann, its director of licensing.
The limited-edition initiative is the
first of a series of Nars strategic collaborations. “We are planning several
collaborations throughout the 2013 and
2014 calendar,” said Desazars. “These
strategic collaborations are a way for our
brand to build brand equity and establish
a deeper emotional connection with our
customers. They also help us to differentiate our position as a high-fashion, highstyle brand. The Thakoon for Nars Nail
Collection collaboration that launched
Kiss Mini Larger Than Life Lip Gloss Coffret.
this past spring 2012 was a perfect example of that.”
In total, the overall offering — both
Pop and Silver Factory — will be sold
in about 1,300 doors globally. Executives
declined comment on projected sales, although industry sources estimated that
the limited-edition collections could
do $15 million at retail in their time on
counter (until the line has sold through,
which will likely take about
three months).
“François shared his personal passion and admiration for Andy Warhol and
his collection of work — and
emulated his vision into a
gorgeous collection of vibrant
colors and wearable palettes,”
said Margarita Arriagada, senior vice president of merchandising for Sephora. “We
were honored to be able to
offer it to our Sephora clients first, as we knew they
would respond positively, not only to François’
amazing products, but to
holding a piece of wearable Warhol as well.”
The retailer plans to promote the collection via windows
with Nars’ photography, and its
makeup artists will offer complimentary consultations using
looks from those photos. “The
Sephora windows are themed Pop
Goes Sephora, which focuses
on Warhol’s well-known, bright
and colorful silk screens,” said
Desazars.
Sephora will also share
how-tos and behind-the-scenes
moments with Nars on
sephora.com.
“When we were introduced to the Nars Andy
Warhol Holiday Collection at
market, the whole team erupted in delight,” said Deborah
Walters, senior vice president
and general merchandise
manager for cosmetics, fragrance and intimates at Saks
Fifth Avenue. “We all knew that
our Saks Fifth Avenue customer would
love the innovative concept, exciting use
of color and fun packaging. The collection
brings a stylish edge to holiday gift-giving,
and who wouldn’t want an Andy Warhol
Self Portrait eye shadow palette?”
Nars has also created a landing page
on narscosmetics.com to link to a microsite, narsandywarhol.com, allowing its customers to be the first to receive details about the collection, noted
Desazars, adding that an extensive digital media campaign and in-store events
are also part of the promotional plans.
QUOTES PHOTO BY JOHN AQUINO
By JULIE NAUGHTON
WWD FRIDAY, AUGUST 24, 2012 7
WWD.COM
Azealia
Banks
lected members of the press, to be led by
Gordon Espinet, senior vice president
of global artist training, development
and makeup artistry for MAC. Topics to
be addressed will include how makeup
artists can work corroboratively with designers to create a beauty look for each
show. Concurrently, MAC will host a global live chat on its Facebook page during
the class, offering participants access to
a question-and-answer session. “There is
a symbiotic relationship between fashion design and makeup,” said Joanne
Arbuckle, dean of FIT’s School of Art and
Design. “This is true both on the runway
and on the street.”
— J.N.
Hanae Mori to Launch Men’s Eau
Moroccanoil Partners
With Made Fashion Week
By BELISA SILVA
MOROCCANOIL PHOTO BY RICHARD PIERCE; MORI BY GEORGE CHINSEE
By JAYME CYK
THE ARGAN OIL-BASED hair care
brand Moroccanoil is expanding its New
York Fashion Week presence this season
as the first hair-care sponsor of Made
Fashion Week.
Now in its seventh season, Made
Fashion Week, which was launched in
2009 at Milk Studios, is meant to showcase
design talent and bring together global
creative communities.
Backstage this season, Moroccanoil
will debut its newest product, Volumizing
Mousse, which will be available in salons
in October, and will be on hand to provide
styling and product support for more than
19 shows. Antonio Corral Calero,
Moroccanoil’s the brand’s artistic director, will
new mousse.
be at the design helm, creating the
hair looks for six of the 19 runway
shows. In addition to the partnership and introductory product, Moroccanoil launched its Facebook
page and live Twitter feed on July 3.
“We realized we need to be where our consumers are,” said Carmen Tal, cofounder of
Moroccanoil. “Social media is quickly becoming a
key cornerstone of Moroccanoil’s marketing strategy moving forward.”
Both platforms will provide a sneak-peek backstage to view hair trends from New York, Milan,
Paris and London fashion weeks and will feature
new product and brand alerts. “We expect a significant increase in our social media presence
and number of fans-followers during our official
launch,” added Tal.
Moroccanoil backstage hair content will also be
available at milkmade.com. Made Fashion Week at
Milk Studios will run from Sept. 6 to 12.
gel and pencil, new moisturizers and
palettes of what MAC artists are projecting as the season’s hottest lip and eye
shades, Demsey noted. “Our artists backstage are using products sometimes years
before they are launched to the public,”
said Demsey. “It’s a real-world test. If
there are tweaks needed — particularly
with the texture, color, application and
finish — the team lets the product development team know.”
Subscribers to MAC’s Tumblr account,
maccosmetics.tumblr.com, will be able to
view exclusive beauty visuals and backstage videos — which will be updated
daily — from New York, London, Milan
and Paris, said Demsey. On Facebook
and YouTube, subscribers will be able to
view profiles of makeup artists, which are
intended to give a first-hand look at the
realities of being a backstage artist. “We
are continuing to delve even more deeply into social media this season,” said
Demsey. “Our artists will be backstage
tweeting continuously in 10 different languages from the shows about trends, forecasts and fashion. We’ll be making our
followers — more than 100,000 on Tumblr,
3.6 million on Facebook and 80,000 on
Twitter — feel like they are right there
through an extensive media platform.
Fashion week is a major driver for us in
the success of these platforms.”
Demsey added that MAC will also
partner with the Fashion Institute of
Technology on a series of educational
events during the fall and spring semesters, including the annual BFA graduating students’ runway show, panel discussions and the Faces in Fashion lecture
series. MAC will, on Dec. 3, teach its
first makeup master class for FIT students, MAC Pro Team members and se-
PHOTO BY SPLASH NEWS/CORBIS
MAC Gears Up for Runway Blitz
TWENTY YEARS after MAC Cosmetics illustrator Antonio Lopez. Cabaret singer
firmly planted its flag backstage at ready- and drag artist Joey Arias will perform at
to-wear shows, the brand is continuing the gathering.
As well, MAC will host a private
its quest for fashion week domination by
expanding its nail sponsorship from New party on Sept. 8 for Carine Roitfeld’s
York to Europe and by co-branding events new magazine, CR, and Roitfeld’s 23piece color cosmetics collection for
for the upcoming rtw shows.
“We are reinforcing our position that MAC, which hits U.S. counters Sept. 6
we are the [beauty] brand of record for and international doors in October. On
Oct. 2, MAC and Roitfeld will hold
fashion,” said John Demsey, group presia similarly lavish party in Paris
dent of the Estée Lauder Cos. Inc. “It’s
to celebrate both entities. The
about living fashion every day. Fashion
brand is also backing André
week has always been an important
Leon Talley’s “Little Black
part of MAC’s DNA — even back when
Dress” exhibit, which will open
fashion week was basically a trade
in October at the Savannah
show — and these new initiatives help
College of Art and Design. The
show why.”
brand is creating a supplement
The brand will kick off New York
to the exhibit catalogue that
Fashion Week on Sept. 6 with a
features beauty looks.
Fashion’s Night Out performance
MAC will sponsor nails
by hip-hop artist Azealia Banks at
in New York, London, Paris
the brand’s MAC Cosmetics SoHo
and Milan, noted Demsey,
store. DJ Cosmo, Banks’ favorite DJ,
and for the seventh consecuwill be on hand to spin tracks at the
tive season will be the official
store as well. Banks is also creatcosmetics sponsor of Made,
ing a limited-edition lipstick,
the fashion shows held each
Yung Rapunxel — a deep
season at Milk Studios. MAC
blackened purple — for
will do backstage for 20 Made
the brand. Retailing for
shows and roughly 80 overall
$15, it will be sold in
over the course of New York
all New York City MAC
Fashion Week. Globally, the
stores beginning Sept.
brand averages 840 fashion
6 (it hits maccosmetshows in 23 fashion weeks
ics.com from Sept. 5)
Yung
each year.
through Sept. 20.
Rapunxel,
As has happened in many
On Sept. 5, the brand
Banks’
past seasons, MAC will testwill sponsor a book
lipstick.
drive a number of product
party for Mauricio and
prototypes backstage, said
Roger Padilha’s new
Demsey. Those slated for
book “Antonio: Fashion,
the shows in September
Art, Sex and Disco,”
and October include a new
which celebrates the
moisturizing lipstick, a brow
work of the late fashion
THIS FALL, at Hanae Mori Parfums,
all eyes are on HiM.
With the modern man in mind,
the fragrance brand — perhaps best
known for its ultrafemme Butterfly
scent — is entering more rugged
terrain with a new offering, HiM by
Hanae Mori, its first eau designed for
male consumers in over a decade.
“The brand has evolved so much,
but we don’t introduce so much newness,” said Thomas Saujet, president of fragrance licensing, marketing and distribution company
International Cosmetics & Perfumes
Inc., or ICP, which is the worldwide
licensee of Hanae Mori Parfums.
“We felt we needed some newness.”
HiM was designed as a contemporary fragrance with classic
overtones. “We wanted to do a real
men’s scent — a rugged, edgy, spicy,
woodsy, modern fragrance,” said
Saujet. “Everyone [who’s smelled it]
thinks we have a slam dunk.”
First introduced to Nordstrom
stores in 1996, the fashion-inspired
brand has — for the past two years
— introduced seasonal limitededition numbered scents under its
Eaux de Collection series, which
is created with alternative energy
sources such as sun and wind.
Regarding Butterfly, which Saujet
says is still a bestseller: “It’s a pivotal fragrance that appeals to any type
of age group,” he said. “It is classic
and feminine.”
Added Saujet’s brother Emmanuel,
who serves as ICP’s chief executive
officer: “HiM builds on the sustained
strength and growth of the entire
Hanae Mori line, which has attracted
ever greater interest from retailers
and customers.”
Although the brand has never before offered an exclusively male fragrance, Thomas Saujet says Hanae
Mori’s unisex HM, a fresh, woodsy
scent launched in 1998 — has resonated with both sexes, especially men.
“After 15 years in the
men’s fragrance department in Nordstrom, it is
still today in their top 10 fragrances,” he said of HM. “We
realized we have an
audience that is very
loyal to the brand.”
According
to
Saujet, the brand’s
namesake, fashion
designer Madame
Hanae Mori — whose
boutique still operates
in Tokyo — remains a
source of inspiration
for new scents.
“[My father] was
very intrigued because her theme
was always about
the butterfly, which
has so many meanThe HiM
ings,” said Thomas
fragrance.
Saujet. His father,
Claude — chairman
of Paris-based parent
company Cosmetiques et Parfums
International — offered advice from
Paris as his sons launched in the U.S.
the brand’s debut fragrance, Hanae
Mori Butterfly, in 1996. “It is so feminine and symbolizes transformation.”
Housed in an ombré caramelhued glass vessel, HiM has top notes
of oils of bergamot, mandarin orange, gray pepper, violet leaves and
cardamom seeds, set atop a heart of
cinnamon bark, Mediterranean fig
and tonka bean essence. The drydown is a blend of teak wood,
white cedar, fir balsam, musk
and amber.
Priced from $50 for 1.7 oz. to
$95 for 3.4 oz., industry sources
believe the scent — which will
launch in 670 doors in
November — could generate more than $6 million
in its first year at retail.
HiM will first launch
at Nordstrom in the
U.S. and Holt Renfrew
in Canada exclusively,
then roll out to Neiman
Marcus, Saks Fif th
Avenue, Bloomingdale’s,
Lord & Taylor, Macy’s
and regional chains such
as Dillard’s. Thomas
Saujet also noted that
in fall 2013, Hanae Mori
plans to introduce “a
whole new” women’s
scent as well as a men’s
grooming line. “We want to
be very strong in the men’s
department,” he said.
8
WWD FRIDAY, AUGUST 24, 2012
beauty
E.l.f.’s exclusive beauty looks.
WWD.COM
Retailers Clamor for Exclusives
NEW YORK — Retailers today
want something that only they
can have, and it is causing a battle for exclusives.
And that’s creating a race for
beauty manufacturers to launch
new items in one chain or create
a special stockkeeping unit or display for a specific retail partner.
A case in point: Next month
Walgreens will offer, in conjunction with Disney, a co-branded
cosmetics line called Villains
Palette Collection from e.l.f.
Cosmetics, available exclusively
in 5,000 of its doors and priced
at $10. That comes on the heels
of a new proprietary end-ofaisle display in Walgreens for
L’Oréal’s derm brands, Vichy
and La Roche-Posay.
The quest used to be to roll
out new items to thousands of
doors at once. Manufacturers
once feared legal issues if special
deals were offered to one and not
others. But then, rampant sku rationalization three years ago created a problem when all planograms started looking identical.
“With every chain selling
the same stuff, you need to give
a reason to come to your store
at a time when people are less
inclined to come in any door,”
explained Wendy Liebmann,
founder and chief executive officer of WSL Strategic Retail.
The situation is exacerbated
by the compression of retailers
all fighting for the same shoppers. “There are only a few big
players left,” added Liebmann,
noting the drugstore and discount store industry are dominated by two major players.
Explained one industry veteran: “In the drug channel,
Walgreens and CVS’ rivalry has
become a Coke versus Pepsi situation where, if you are a smaller
brand, you essentially are forced
to choose between one or the
other. They are so big and
dominant that they can
dictate these terms
to you. They are
looking for brands
and programs
to differentiate
themselves, and
exclusivity certainly does that.
They also know the
opportunity that they
are giving a brand and
demand huge margins,
zero-liability programs.”
Retailers know the power that
first to market has over consumers and suppliers. “We have six
million customers a day. We want
to give them more reasons to shop
our stores,” said Joe Magnacca,
Walgreens president of daily living products and solutions. “We
are very committed to beauty.
We felt it was important to bring
beauty to her, and we focus on
taking leadership positions with
the right mix in each store.”
He added that, since
Walgreens has such a large network of stores in varying markets, the chain can test-market
in select types of stores.
Exclusivity can do myriad
things. It can net a brand-new
entry point into the country,
which was the case for Lumene,
which launched exclusively in
CVS, but, after initial success, is
now expanding to other chains
in the U.S. Hard Candy became
a Wal-Mart proprietary line driving shoppers who used to find
it in specialty doors to
the mass market. And
Physicians Formula
got a boost in skin
care with its WalM a r t - e xc l u s i v e
line in the category. Target has
certainly shown
the power of exclusives through
initiatives including Shops at Target,
which helped introduce
the country to the chic Cos Bar.
CVS puts great effort behind its
Salma Hayek collection, and
the chain also was the starting
ground for hair removal guru
Cindy Barshop’s entry into mass
with Completely Bare.
Ulta has become an incubator, much like Sephora, to launch
new lines first, as it did with
the Red Carpet Manicure, an
at-home gel system now being
picked up by others after a limited-distribution rollout in Ulta.
In the cases of e.l.f. and Red
Carpet Manicure, being exclusive with one retailer helped
each brand draw the attention
needed to gain entry to other
critical
by
mass
Faye Brookman
stores. “This gives e.l.f. the opportunity to step to the next platform,” said industry expert Allan
Mottus. “And for Walgreens, it
can help attract younger customers to a chain that’s had an older
customer base.”
While it may seem that linking with one chain is best for
small beauty firms, Liebmann
sees the trend for the big guys
to step up, too, perhaps offering
a special sku for one chain that
drives shoppers to that store.
She also thinks exclusives can
help retailers create a dynamic
in-store experience, which is
lacking in mass today. Many
used Macy’s and its exclusives
as an example of what could be
duplicated at mass.
A final benefit in working out
deals is that the product can become the private label for a chain,
since most mass retailers have
found it too difficult to be acting as marketing mavens behind
their own launches. “They need
to focus on selling, not creating,”
said one private-label resource.
While it all seems win-win
for one-of-a-kind offers, there
are pitfalls, experts warned.
The ongoing case over Martha
Stewart between Macy’s and J.C.
Penney is one example of legal
wrangling. But there’s also danger in becoming too associated
with one chain, as Sinful nail
colors found when, according to
market reports, other retailers
didn’t want to take on the brand
because it was so dominant
in Walgreens. Revlon, Sinful’s
owner, purchased another edgy
color line called Pure Ice to
remedy the situation.
“The good news [about an exclusive deal] is that it instantly
puts a smaller brand into business, but with an exclusive relationship you have no fallback
in case the retailer loses interest or you have a disagreement
in direction. The retailer will
always dominate the relationship,” said one industry expert.
There’s also the question
of whether customers actually go to stores for the proprietary names. Liebmann’s How
American Shops research finds
consumers don’t always know a
brand can only be purchased at
the exclusive merchant. “Does
an exclusive always bring a
shopper back to your store?”
asked Liebmann.
Concluded a manufacturer:
“All this, of course, is predicated
on the sell-through of the products. When products sell, everyone is in love….It’s when there
are sales performance issues
[that] the trouble begins. The
vast majority of these relationships have not worked out for
the long term in the past.”
Boots to Reposition Its No7 Brand
AS BRITISH beauty and wellness firm
Boots solidifies its foothold in the U.S., it
is repackaging and repositioning its entire No7 skin care brand. Come Sept. 1,
it will also discontinue a number of No7
products, and add a host of
new ones meant for a variety
of skin types.
“As a brand, we strive to
grow with our customers and
provide them with the best
quality skin care formulations to meet their individual
needs at an affordable price,”
said Steve Lloyd, chief executive officer of Boots North
America. “The relaunch of
Boots No7 will allow us to deliver products to cater to skin
care needs for every stage of
a woman’s life.”
For Boots, which celebrates the 77th anniversary of
its No7 line this year, one of its goals is making its name as recognizable for American
women as it is for their British counterparts.
“This is very much a heritage brand
in the U.K.,” said Lloyd. “A lot of women
were first introduced to it by their mother or grandmother. [There] it’s probably
into the fourth generation.”
Available in all Target doors since
2007 and Ulta since 2011, Boots products
can today be found in more than 30 global markets, including Norway, France,
Portugal and Spain.
In June, Boots’ parent company, Alliance
Boots, entered a “strategic partnership”
with Walgreen Co., which acquired a 45 percent stake in the company, with the option
of buying the rest of it in three years.
Although its exact distribution plans for
the retail pharmacy are not yet defined, it
is clear that Boots is focused on gaining
critical mass on U.S. shores in terms of
American distribution.
According to Lloyd, the
upcoming No7 restaging is a
natural progression, one that
New
happens approximately every
offerings
five to seven years. “Every
from
year we’ve seen increasing
No7.
customer loyalty,” he said.
To that end, according to
Boots’ No7 skin care scientific adviser, Mike Bell, the company utilizes its large testing
pool of more than 50,000 people to ensure that products
work across all ethnicities
and skin tones and textures.
“We make sure that the
claims we make are real and
have been validated,” said
Bell. According to Lloyd, there are about 450
stockkeeping units currently available on
American soil, but between 3,000 and 5,000
Boots branded products — across health,
hair and sun care beauty, baby, dental and
medical categories — are in the U.K., sold
through 2,500 doors. In the U.S., the brand
can be found in approximately 2,200 doors.
“We have a huge range of products
in the U.K., which we haven’t actually
tapped into yet across all sorts of categories, categories that are very strong
[there],” said Lloyd, who named baby and
health care as categories with notable
potential for the U.S. “All those categoPHOTO BY JOHN AQUINO
By BELISA SILVA
ries are possible options for growth.”
Boots products were launched internationally in 1996, entering markets like
Thailand, the Netherlands and the U.S.,
where they were originally rolled out to
only a handful Target doors.
“They were our first partner,” said
Lloyd, of Target, adding that the brand
expanded nationally — entering all 1,750
doors — with the retailer in 2007. In 2008,
Boots introduced beauty adviser service to
select Target stores.
“[This is] unusual in the mass market,”
said Lloyd. “We now have beauty advisers
in about 360 Target stores and [shoppers]
very much value that differentiated option.”
For Lloyd, the beauty adviser model
allows the brand message to be conveyed
directly to consumers.
In addition to growing its brick-andmortar presence, Boots is also focusing in
its efforts on digital retailing — both on its
own e-commerce site, shopbootsusa.com,
and on Drugstore.com, which will offer the
full collection of No7 products by Sept. 1.
Currently in the U.S., there are four
different Boots ranges — No7, naturebased Botanics, sustainably-sourced
Extracts and dermatology-tested Expert.
At this time only the No7 line will be restaged. Products like No7 Moisture Quench
Day Fluid and Purifying Sauna Mask will
be phased out, while new offerings will include a three-piece antiaging regimen for
consumers between 45 and 50 years old,
called Lift & Luminate. Also being introduced is a comprehensive two-step cleansing and moisturizing range called Beautiful
Skin, available in iterations for normal-oily
skin, normal-dry and dry-very dry, and suitable for customers of any age. Within the
A No7
ad from
1935.
Beautiful Skin range, which is color-coded
and promises “more radiant” skin in two
weeks, toners were purposefully omitted.
“We are now saying you don’t need that step
[toning] because the cleanser is so effective,” said Lloyd. “This saves the consumer
time and money.”
Other new products within the Beautiful
Skin franchise include skin supplements
like Beautiful Skin Rapid Spot Rescue and
Vitality Eye Roll-On, among others.
In total, 25 No7 sku’s will be dropped,
while 27 will be added to the lineup,
which is priced from $6.99 for cleansing
wipes to $23.99 for a serum.
Boots executives declined to discuss
dollar figures, but industry sources estimate that Boots could generate as much as
$60 million in retail sales in the 12 months
following the September relaunch.
Gild Group
NEWPORT, R.I. — The Newport Preservation Society’s triennial Ball at
The Breakers, and the long weekend of social outings built around it, are
a veritable three-day time warp that bring out antique carriages, vintage
fashions and plenty of old money. For more, see pages 10 and 11.
RUBENSTEIN’S NEW ROLE: Hal Rubenstein,
fashion director at InStyle and a
founding editor of the magazine, will
move into an editor at large role in
October. This move follows speculation a few weeks ago that he was
looking for a new arrangement with
the Time Inc. title in order to pursue
personal projects.
As editor at large, Rubenstein will
no longer be a daily fixture inside
InStyle’s offices but he’ll continue
to be involved in “The Look,” which
covers celebrity style and the annual Style 100. He will also appear
on behalf of the magazine at in-store
events and covering the red carpet,
an InStyle spokeswoman said.
Rubenstein has long been a presence outside the magazine, appearing on shows such as the “Today”
show, “E Entertainment News,”
“The Bachelor” and “The View.”
Last year, he published his latest
book, “100 Unforgettable Dresses,”
which is going into its fifth printing.
Hal
Rubenstein
PHOTO BY STEVE EICHNER
PHOTO BY JOHN W. CORBETT/CORBETTPHOTOGRAPHY.NET
WWDSTYLE
MEMO PAD
As for what’s next for Rubenstein,
the spokeswoman said he’s got several projects in the works. His next
appearance will be on behalf of
the magazine, at New York Fashion
Week. — AMY WICKS
CUTTING OUT: After only a year at
New York magazine’s fashion blogturned-Web site The Cut, Stephanie
Trong has left her post as editorial
director. When editors gathered
Aug. 8 to introduce the new Web
site to journalists, Trong was absent. A spokeswoman said Trong
had been on a personal leave of absence and voluntarily decided not
to return to the company. Sources
speculated that Trong, who previously was deputy digital editor at
Lucky, was asked not to return.
Stella Bugbee has succeeded Trong
at The Cut. At the press event a few
weeks ago, Bugbee had been introduced as the site’s creative director.
She first came on board as a consultant last year. Prior to New York,
Bugbee worked under Raul Martinez
and Alex Gonzalez at AR New York.
She also formerly worked at Domino
magazine as design director. — A.W.
ANOTHER EXIT: News Corp. chief digital officer Jonathan Miller is leaving
the company and, according to a
spokesman, he will not be replaced.
Miller’s departure is the latest
from the executive ranks since the
company revealed in June that it
would split its publishing business
from its entertainment holdings.
“While my time spent has been productive, it feels like the right time to
exit,” said Miller. “I look forward to
pursuing new ventures that will lead
me back into an operational role.”
Miller will continue to work with
News Corp. as an outside adviser on
digital issues through fall 2013.
Miller’s role at the company has
diminished since he joined in 2009,
back when MySpace was still under
News Corp.’s umbrella. More recently, he’s managed investment stakes
in Roku and Bona Film Group.
News Corp. chief executive officer
Rupert Murdoch said that he respected
Miller’s desire to return to an operational, entrepreneurial role with a
stand-alone company. — A.W.
10 WWD FRIDAY, AUGUST 24, 2012
Newport Rules
By SUSAN WATTERS
NEWPORT, R.I. — Anyone who would
rather catch an episode of “Downton
Abbey” than commit to watching
the upcoming presidential political
conventions should consider a visit to
this bucolic town on Aquidneck Island
jutting into Narragansett Bay. Here, no
one worries about being too lavish, too
patrician or too over-the-top. They can’t.
The huge mansions, known as cottages
and built by some of the nation’s most
flamboyant industrialists, are simply too
lavish and too gilded to hide.
Newport is where capitalism
reigns supreme, a city where everyone
celebrates the idea that, in America, some
people — and no one knows for certain
just who those people will be — have a
shot at becoming far, far, far richer than
everyone else. And they enjoy that wealth.
“It’s all about family,” Ala von
Auersperg Isham, the daughter of the
late Sunny von Bulow, says of Newport
at the Ball at The Breakers.
The dazzling, 70-room Rococo
Breakers, which was built by railroad
robber baron Cornelius Vanderbilt 2nd
at the end of the 1890s, is the most lavish
of the Newport Preservation Society’s
10 historic properties. Designated as
official projects of the Save America’s
Treasures initiative between the
White House Millennium Council
and the National Trust for Historic
Preservation, these 10 “cottages”
celebrate Americans daring to think big.
“I’ve been here most of my life. It’s a
warm, wonderful, real-life place to be,”
continues Isham, whose second husband
is international banker Ralph Isham.
“Everyone is friends. They come here
with their children and have barbecues.
It’s a small community that seems to be
Marion
“Oatsie”
Charles
eye
Guests in the
Great Hall of The
Breakers.
a glamorous place for people to come
because people find society interesting.”
Nowhere is that society more on
display than at the Ball at The Breakers. A
fund-raiser for the Newport Preservation
Society, the ball is one of eight or nine
social affairs — breakfasts, lunches,
dinners, cocktails and more — during the
three-day triennial event that celebrates
authentic 19th-century coaches, the
sportsmen and collectors who drive them,
and the horses that make them spin.
The weekend only reinforces the
sense of Newport as time warp, a bubble
that enables residents and visitors to
escape — at least momentarily — from
the negative tenor of the presidential
campaigns as candidates jockey for
political advantage. While Republicans
fret about the possibility of hurricanes
in Tampa and the two parties spar over
Medicare, Newport residents luxuriate
in life amidst the town’s architectural
treasures designed to emulate European
icons like Versailles and the Florentine
palazzos of the Italian Renaissance.
“Newport is the place to go to be
naughty,” says Marion “Oatsie” Charles, 92,
who left Georgetown for Newport back in
2007. Charles, who has charmed everyone
in Washington from the Kennedys to
the Reagans, grew up in Alabama, the
granddaughter of Confederate Colonel
William C. Oates, who became Alabama’s
29th governor. Outspoken, irascible and
deliciously funny, Charles relishes naughty
friends almost more than being seriously
naughty herself.
Four days before her marriage to her
first husband, the fabulously wealthy
Thomas Leiter, heir to a Chicago retail
fortune, she recounts how she got her first
course in sex education from a family
friend, the actress and theatrical legend
Tallulah Bankhead. “Tallulah told me
the facts of life,” Charles recalls. “Mother
Sen. Sheldon
Whitehouse and
daughter Molly.
George “Frolic”
Weymouth and
passenger.
hadn’t told me anything. Tallulah sat with
me eating sugar cubes and bourbon, and I
don’t remember a thing she said.”
Another naughty friend, tobacco
heiress and Newport legend Doris Duke,
named Charles as one of two trustees
in her last will. Today Charles serves
as trustee emeritus of the Doris Duke
Charitable Foundation, which has an
estimated endowment of $1.3 billion.
Considering Duke’s over-the-top approach
to collecting art, huge houses, men and
mayhem, her jewelry, while dazzling in
anyone else’s vault, wasn’t among her
passions. “Doris never cared much about
jewelry. Her jewelry only sold for $15
million at Sotheby’s,” says Charles. “She
did have a tiara, though. No one knew
how to pronounce it, much less wear it.”
Charles’ lighthearted banter captures
the tenor of Newport. Leaning over to
talk with her driver as her car pulls
up the long driveway to the Newport
estate Marble House, built by William K.
Vanderbilt in 1892, she observes, “This
is a moneyed crowd.” The luncheon,
cohosted by Marble House’s former
owners Frederick and Diana Prince, is
another occasion for the Preservation
Society to raise money. As guests arrive,
paying visitors continue to tour the
house snapping pictures of the horses,
the coaches, the whips (the term used
to describe both the owners and coach
drivers), and the fancy guests they invite
to join them.
For all its elegance, the weekend has one
main purpose: to raise money to preserve
the traditions and splendor of a bygone
era. “We raised $650,000 at the Ball at The
Breakers, and that will help to buy two
paintings to return to Rose Hall,” driving
enthusiast Bob Hardwick tells one of the
visiting coach collectors from Holland, who
argues that some money should instead go
to preserve royal coaches.
For the Newport Preservation
Society and the 15 visiting whips, the
weekend is a win-win collaboration. The
preservationists raise money and the
whips build interest and support for their
favorite sport.
For Charles — who moved into the
gardener’s house to allow her daughter,
Victoria Mele, and husband Joe to live
in the main house, Land’s End, which
was once owned by Edith Wharton —
the pageantry of a weekend of coaching
offers cause for celebration. Otherwise,
her typical day is far less glam. “I sit in
my kitchen watching the bird feeder and
I watch the people coming up and down
my road,” says Charles, referring to the
historic 3.5-mile Cliff Walk, where each
year thousands of tourists come to see
the town’s architectural treasure trove of
grand seaside houses. “Hair not combed,
wearing clothes that are not ironed.
That’s one reason I love this coaching
weekend. For once, people in Newport
dress to the nines.”
Not that the outside world doesn’t
intrude at times during the weekend, even
in a place like Newport. The town’s attimes crotchety residents admit they have
their own concerns about the changing
political landscape.
Asked about the upcoming political
conventions, Ruth Buchanan, 94,
whose late husband served as Dwight
D. Eisenhower’s White House chief of
protocol, says, “The politicians are going
to wreck everything. They get the publicity,
but they don’t talk about how to fix things.”
George “Frolic” Weymouth, one of the
most celebrated drivers and collectors of
vintage coaches, agrees: “Our children
have different lives and different values.
The most dangerous element in society
today is the computer. They are ugly. You
can’t eat them. You can’t screw them. And
they are going to screw you.”
For Charles, the real problem lies
in young people having to learn to do
everything themselves — a true sign of a
changing era. “How can young people do
it all without help?” she wonders, adding,
“I never changed a diaper. Never.”
There are equally weighty matters
on Newport residents’ minds, though,
including the question of development
in Newport. As in other historic enclaves
— think Nantucket — the issue often gets
people, even the Old Guard, squabbling.
Last year, Hugh D. “Yusha” Auchincloss
3rd opposed Charles’ plan to build a
permanent, minimalist art installation on
Queen Anne Square to celebrate Duke’s
contribution to restoring 82 colonial
houses near the harbor. Nonetheless,
he admires Charles, who he calls “very
knowledgeable, not chichi or poo-poo, a
real person.”
It’s the social scene of Newport he
can’t quite stomach.
“I don’t much like that kind of ball,’’
Auchincloss admits of the Ball at The
Breakers. His great-grandfather built
Hammersmith Farm in Newport in
1887, and the 90-acre farm is where
Auchincloss’ half-sister Jacqueline and
John F. Kennedy held their wedding
reception. The family sold the property
when Auchincloss’ father died and it’s
now owned by Peter Kiernan, a former
managing director of Goldman Sachs.
“I don’t like putting on a tuxedo,’’
Auchincloss continues — especially the
one he inherited from his father that he
wore to the Ball at The Breakers. “My
father was heavyset and although I wore
a belt, it felt all night like my pants were
Whitehouse, Moore, reid and Breakers Photos By John W. CorBett/CorBettPhotograPhy.net; all others By susan Watters
WWD friday, august 24, 2012 11
WWD.COM
For more photos, see
WWD.com/eye.
Robert
Longstaff
Coach driven by Claire Reid
departing Chateau-sur-Mer.
’’
’’
about to fall down. John Loeb, who
invited me to sit at his table, kept telling
me I should have worn suspenders.”
Newport is the place
to go to be naughty.
— Marion “oatsie” Charles
At the ball, Auchincloss reminisces
about first meeting his stepbrother, the
late Gore Vidal, when he lived with his
father at Merrywood, the estate across
the Potomac River from Georgetown.
“Nina Gore had just married my father
and she brought her son Gore over to
meet us,” he says, shifting uncomfortably
in his vintage, double-breasted tuxedo.
“Gore was a bully. I hit him and knocked
him out cold. I was afraid I’d killed him.”
Auchincloss’ uncomfortable fashion
moment at the ball exhibits another
characteristic of Newport’s Old Guard:
One can never be sure whether their
penchant for old family things is born out
of sentiment or Yankee parsimony.
Take the crowd at Bailey’s Beach,
where members of what Vidal once
called “America’s ruling class” vie for the
best location of closet-sized cabanas that
line the private beachfront. “The place
really does need a major overhaul,”
confides one guest, who nevertheless
begged for anonymity so as not to damage
his chances of gaining membership.
“Every time anyone tries to change
anything, someone always objects, saying
that things have to be done just like they
were in their grandmother’s times.”
Guests are not permitted to talk on
cell phones and club memberships are
coveted both for prime beachfront and
social access.
Socially, hosting a party for the whips
and their friends is deemed an honor
for just about everyone in the Historical
Preservation Society — everyone
except Dorrance “Dodo” Hamilton, the
Campbell soup heiress. Preservation
supporters like Mary Ann Hamilton
Lamont hosted a luncheon for the whips
and their guests, and David Ford, a
former Goldman Sachs partner, gave a
dinner at his home, Miramar (built by
George Widener, who died on the Titanic
before he could move in). Hamilton
refused to allow the whips and their
coaches on her property in order to
protect the health of her cattle herd.
“Domestic animals are going extinct,”
she explains, adding, “My herd is in
the freezer. Everything is cryogenically
frozen and the freezer is on the farm.
That is why we can’t have the horses over
because they could damage the strain.”
As for Weymouth, the weekend is
all about the coaches rather than the
social events. Asked whether Ann
Romney’s love of dressage would inspire
equestrians the way Jackie Kennedy
did when she was First Lady, he fairly
bristles at the notion. “I don’t think
Jackie Kennedy affected the sport at
all. It is Prince Philip who has done the
most,” he insists, frowning as he notices
a missing button on his fine wool vest. A
friend teases him about needing a valet.
Weymouth replies with a smile and a shrug:
“Anyone who gets that close is too close.”
Weymouth, a member of the Dupont
family, is cofounder of the Brandywine
Conservancy. His home, Big Bend,
surrounded by the Brandywine Creek on
three sides, is just inside Pennsylvania. The
land was ceded back to the Indians in 1683
by William Penn. Like the men who built
the great houses of Newport, Weymouth still
turns to Europe for inspiration — hence
his hero, Prince Philip, whose portrait he
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Dorrance “Dodo” Hamilton
painted in 1996 and now hangs in Windsor
Castle. So when asked about the specter of
class warfare tainting the current political
scene, he opts for a royal response that
focuses on his passion rather than politics.
“All I want is to keep coaching going,
and not because the sport is American —
because it’s not,” he said. “Coaching started
in England, and Alfred Gwynne Vanderbilt
helped to bring it here. [The sport is] why
we all come back to Newport.”
Weymouth points to the Cowtown Work
to Ride team from Philadelphia, which
last year won the National Interscholastic
Championship at the Virginia Polo Center
— the first all-black team to do so. In his
view, if there was ever a sign of changing
times, it is that.
“The Queen once said horses are the
greatest levelers in the world,” he says.
“And she is right.”
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12 WWD FRIDAY, AUGUST 24, 2012
WWD.COM
{Continued from page one}
Joel
Horowitz
Diane von
Furstenberg
photo by Steve eichner
in 1972 with her jersey dresses
and created the iconic wrap
dress two years later. That dress
came to symbolize power and
independence for a whole generation of women. Since she
returned to fashion in the late
Nineties, her business has significantly grown into a global
lifestyle brand.
In a WWD story last year, the
designer described the company
in three different eras. “One is
when I was 25 and started out, and
I call it ‘American Dream.’ Then,
12 years ago, when Paula [Sutter]
and I started on 12th Street and
we weren’t sure where it was
going, it was ‘Comeback Kid.’
Now, we are starting a new period
that says, ‘We mean business.’ The
SoHo store, the Web site and the
arrival of Yvan Mispelaere are all
part of this new period.”
DVF now offers four complete
collections a year and accessories. The accessories range from
shoes, handbags, small leather
goods and scarves to eyewear,
fine jewelry, watches and luggage.
In 2011, DVF introduced a home
collection, encompassing tabletop, bedding and rugs, as well as
a signature fragrance, Diane. DVF
also designed suites for Claridge’s
hotel in London. The designer,
who has said that retail will play a
key role in the company’s expansion, has flagships in markets such
as Boston, Dallas, Dubai, Istanbul
and New York’s SoHo.
Horowitz began his career at
Polo Ralph Lauren Corp., working in various capacities. He
joined Murjani International,
Ltd., and in 1984 was named president of the designer division,
which included the initial development of the Tommy Hilfiger
business. From 1986 to 1989, he
served as president of Murjani.
In March 1989, Horowitz, together
with Hilfiger, joined forces with
their partners to form Tommy
Hilfiger Inc. From 1989 to 1994,
Horowitz served as president and
chief operating officer of Hilfiger,
and then as ceo from 1994 to 2003.
He became executive chairman
of the board in February 2003
and, in April 2005, became nonexecutive chairman of the board.
He retired on Oct. 31, 2005. In
2006, he, along with a management group and Apax Partners
Inc., took Hilfiger private, and it
was eventually sold to PVH Corp.
in 2010 for $3 billion.
In a WWD interview in 2010,
Horowitz said some of the high-
Fashion scoops
The Rent the
Runway closet.
ON THE ROAD: Rent the Runway,
the Web site for renting designer
dresses and accessories, has
its sights on the travel market.
Rent the Runway “closets” at
the W Union Square, W Times
Square, W New York and W
Downtown hotels in Manhattan
will be set up Sept. 5 for fashion
week. “Since we’ve launched two
years ago, we’ve found that 20
percent of our orders were being
shipping to hotels,” said Jennifer
Hyman, cofounder of Rent the
Runway. That led to discussions
with W Hotels, which is providing
Rent the Runway free lobby
space for the closets. They’ll be
curated by fashion director Lucy
Sykes and manned by Rent the
Runway stylists with iPads so
renters can view the Web site
for further options. Items can be
picked up on the spot or ordered
off the site for delivery.
Each closet will display two
dozen dresses, as well as jewelry
and accessories, and styles
will change daily to highlight
designers showing that day.
For W Union Square and W
Downtown, there will be edgier
brands and designers including
Opening Ceremony, Yigal Azrouël
and Erin Fetherson, to reflect the
neighborhoods. At the uptown
hotels, there will be a traditional
array including Halston
Heritage, Badgley Mischka
and Vera Wang. “People are
renting for special occasions,”
Hyman said. “Travel is a special
occasion and renting clothes
while traveling is the ultimate
convenience. You can travel
without suitcases.” — DAviD MOiN
vRRROOM SERviCE: The St. Regis
Hotel New York will add to
its growing roster of luxurybranded accommodations next
month when it opens a suite
themed around British carmaker
lights of his tenure at Hilfiger
were the partnership with
Lawrence Stroll and Silas Chou;
going public in 1992; building the
European business, which made
Hilfiger into a powerful global
brand, and creating an organization of strong managers and rewarding them both professionally
and personally. “A lot of people
made a lot of money,” he said.
After leaving Hilfiger, Horowitz
became a partner in Global
Brands Acquisition Corp., which
along with Stroll and John Idol
analyzed more than 150 potential
deals during its two-and-a-halfyears in business. The company
liquidated in December 2009 and
returned its funds to shareholders, according to a filing with
the Securities and Exchange
Commission. The New York-based
venture, a special purpose acquisition company, had raised $287.5
million in a public stock sale in
December 2007 and had used interest from a trust holding that
capital to weigh potential targets.
Today, with investors closely
following the success of Michael
Kors Holdings Ltd., which went
public in December and put
Michael Kors on track to become a billionaire (the firm has
a market capitalization of $9.96
billion), there’s a big focus on
brands such as DVF, J Brand and
Tory Burch to do an IPO. There’s
no question there’s an appetite
for fashion brands that have
proven themselves in the market
and have the multiple product
categories and international cachet to become a global player.
Industry sources believe that the
hiring of Horowitz, who has strategic, financial, production and
product expertise, will give DVF
the professional management
necessary to entertain that option. Like Kors, von Furstenberg
Bentley Motors. Dubbed the
Bentley Suite, the 1,700-squarefoot space will be outfitted with
style points inspired by the highend automaker such as black
leather tile floors and a sleigh
bed constructed of its signature
burled wood.
The St. Regis New York, a
property of Starwood Hotels &
Resorts Inc., has built similar
suites premised around Dior
and Tiffany.
In addition to the luxe autoinspired trappings, guests who
stay in the 15th-floor suite will
have complimentary access to a
2013 Bentley Mulsanne within
a 10-block radius of the Fifth
Avenue hotel. The car, the first
of its model year on U.S. shores,
starts at $292,595or, at $9,500 plus
tax per night, about a one month’s
stay in the suite. — MATTHEW LYNCH
BRiDAL BAUBLES: David Tutera has
a busy schedule. The wedding
designer-expert and star of We
TV’s “My Fair Wedding” has
appeared on “The Oprah Winfrey
Show”, the “Today” show and
“Good Morning America”; has
planned events for Barbara
Walters, Jennifer Lopez, Elton John
and Shania Twain, to name a few;
has designed bridal and footwear
lines, and has written seven
books. Now he’s adding jewelry
designer to his résumé with the
introduction Monday of a fashion
jewelry collection, Embellish by
David Tutera.
photo by GeorGe chinSee
Joel Horowitz Joins DVF as Cochairman
Looks from the
runway of Diane von
Furstenberg’s fall show.
has also cultivated a high profile.
In this week’s Forbes ranking of
the 100 most powerful women,
she came in at 33 for her work
as a designer and as the president of the Council of Fashion
Designers of America.
“He’s the best all-around
person, and her business will
become explosive,” predicted
one source of Horowitz’s impact
after joining the company.
The collection, comprised of
more than 100 styles in varying
colors and lengths, ranges from
$15 to $350 and will launch on
davidtuteraembellish.com.
— KRiSTi GARCED
HELMUT’S WEB: Helmut Lang has
JOiNiNG THE FRAY: Add another
one to the crowd. On Sept. 1,
Offline Inc., the Los Angelesbased company behind the
brand Sugarlips, will launch
Dahliawolf.com, a Web site that
mines customers’ ideas to inspire
clothing designs. Customers will
be able to post and vote on images
at Dahliawolf.com that they
want to see mirrored in apparel.
Offline’s designers will use the
top images to create four sample
items daily, which will also be
voted upon by customers. After
14 days, the most popular items
will be available for preorder and
manufactured. Customers that
initially posted the images that
become items for sale will receive
10 percent commissions on all
sales of their items.
Dahliawolf.com follows in
the crowdsourcing footsteps
of the likes of eBay, which last
year asked the Web masses
to select its five favorite
Derek Lam dresses out of 16
options; ModCloth, which last
month launched its second
crowdsourced private label
collection, and Threadless, the
T-shirt specialist that relies upon
designs submitted and chosen by
the public. — RACHEL BROWN
selected a slew of guest bloggers
for a series on helmutlang.com
and helmutlangjournal.com. Phil
Oh of Streetpeeper, Susanna Lau
of Style Bubble and Denni Elias of
Chic Muse have kicked off the
series, which will continue on a
weekly basis. Each person gets
spotlighted with a Q&A detailing
their favorite films, art shows,
restaurants, trends and vices and
models shoppable looks of his or
her choosing from the brand’s fall
collection. — K.G.
ON TARGET: Roberto Cavalli is set to
bring a glam, sexy touch to the
Australian summer. Retailer
Target Australia has tapped
the Italian designer to do an
exclusive women’s capsule
collection to be launched on
Oct. 21. The capsule, consisting
of 42 pieces spanning from
daywear and eveningwear to
footwear and swimwear, will be
available at 136 Target stores
across the country, as well as at
shop.target.com.au, with prices
ranging from $49 to $159.
Target Australia will
accompany the launch with an
advertising campaign shot by
fashion photographer Giampaolo
Sgura and featuring Karolina
Kurkova. This collaboration is part
of “Designers for Target,” the
Australian company’s initiative
launched in 2007 with a one-off
collection designed by Stella
McCartney. — ALESSANDRA TURRA
WWDMILESTONES
SECTION II
The
Accessories
Array
The Digital Future
Celebrity Casting
HSN has come a long way from an AM radio show to a home shopping
channel to a multimedia powerhouse that reached sales of $3.18 billion last
year. It encompasses and embraces a range of formats — from social media
and e-commerce to m-commerce and social gamification — under
the direction of chief executive officer Mindy Grossman.
PHOTO BY BOB KROSLIN
HSN at 35
The Beauty Bonanza
2
WWD FRIDAY, AUGUST 24, 2012
WWD.COM
SECTION II
WWDMILESTONES
Mindy Grossman: Game Changer
Mindy Grossman made an unexpected
— though symbolic — move in her first
week on the job at HSN Inc.
“I tore down every parking sign that
said ‘vendor’ and changed it to ‘partner,’” Grossman recalled. “It was indicative of the type of culture that we
wanted to have.”
That was May 2006. Six years on
and the chief executive officer has
done more than just update the parking lot at HSN’s St. Petersburg, Fla.,
headquarters. Grossman successfully
revamped HSN from the ground up,
not just giving the corporate culture a
jolt, but also transforming the network
from a cacophonous home-shopping
channel into a dynamic, multimedia
destination that melds commerce with
entertainment.
These days, HSN features designers
like Mark Badgley and James Mischka
of Badgley Mischka, Rachel Roy and
Naeem Khan, alongside celebrities
such as Serena Williams, Iman, Queen
Latifah and Mary J. Blige, who choose
the network to offer a fragrance, apparel or, as is the case for recent addition Randy Jackson, a watch line.
Performers like Lionel Richie and
Rod Stewart have used the network
to launch and sell their latest CDs, replete with a televised performance in
front of a live audience.
“It’s about contextual commerce,
something that’s going to create a connection with the customer because it
either has a provenance or a story or
anything else,” said Grossman, sitting
in HSN’s modernist New York offices
high above Midtown Manhattan.
The executive had a specific vision of what she wanted the network
to be when she joined.
“Even before I met with Barry
Diller [chairman and senior executive of IAC/InterActiveCorp] — at the
time we were owned by IAC, so I was
hired by Barry — I had in my head
what I thought the business could
evolve to,” she said. “I looked at it
much less as a retail venue and much
more as an information/entertainment/lifestyle venue, and that was
really the genesis of what I felt the
transformation could be.”
It’s hardly a surprise that Grossman
felt so strongly about the need to tell
stories beyond selling merchandise.
Prior to joining HSN, she made her
mark at Nike, where she was global
vice president of apparel, and, before
that, headed up Polo Jeans. Those experiences polished her strong sense
for fashion and merchandising, and
Grossman relied on them when, in the
summer of 2007, she presented a complete overhaul of HSN from cool new
graphics to fresh new sets and a widely
enhanced hsn.com.
“What’s fascinating is that prior to
August 2007, we didn’t have a single
video on our Web site,” she said. “It
was basically a digital experience
of what didn’t sell on television. We
weren’t even maximizing the fact that
we could have this network amplification, but we also didn’t have the content to really leverage it.”
So, simultaneously with the relaunch, Grossman embarked on a mission to reevaluate the vendor matrix,
nixing some existing brands and businesses that didn’t fit in with her new
strategy and bringing in new ones. As
she put it, the strategy was to “start
building the pipeline in every one
of the categories and redefine what
authority meant in those categories,
whether it was beauty or culinary,
fashion or electronics.”
She diversified the portfolio, amping up the fashion and beauty categories and bringing in well-known names
in the kitchen and food area. Her criteria was the same for each.
“The first thing is great product,”
she said. “Is it relevant? Is it differentiated? Is it something that can strike
a chord? If you don’t have the ability
to talk about this for at least seven
minutes and make it exciting and
compelling, it doesn’t belong in our
environment. It’s great product, great
story and great storytelling.”
As if to drive home the message,
she picked up a candle from the coffee
table and exclaimed, “You could talk
about a scented candle for eight hours
if you were passionate about it.”
Her formula has proven a hit. In
2008, HSN Inc. was spun off from IAC,
and today, it’s a stand-alone, publicly
traded, $3 billion multichannel retail-
PHOTO BY JOHN AQUINO
By MARC KARIMZADEH
··
We all expected
changes [from
Mindy]...What we
got was the ultimate,
supersparkling
makeover.
··
— RICHARD GRAZIANO,
R.J. GRAZIANO
er. Even with her success, Grossman’s
not one to rest on her laurels.
“Today, you have to have more than
just a transactional mentality,” she said.
“We want to really understand as much
as we can about our customer so we
can give her content and products and
experiences that are very aligned with
what’s going to make her life better.”
More recently, the evolution of the
Internet has given the strategy a significant boost.
“Today, we can leverage that content across every screen that we
have,” Grossman said. “We have the
capabilities because we’re a television network to create original content that’s only available digitally to
enhance what we do. If you look at our
iPad application, you can customize
your own channel. If I like cooking, I
can create Mindy’s cooking channel,
and every time a cooking video comes
out, it comes into my channel. You
were never able to do that.”
Vince Camuto, who sells shoes, accessories and fragrance on the network, called Grossman “a true innovator in the business.”
“She has already achieved tremendous success with HSN and has positioned the brand for multichannel
growth through significant investments
in the digital space and a fresh approach
to product and partnerships,” he said.
Badgley Mischka offers the
American Glamour Badgley Mischka
line on the network, which aims to
translate the brand’s glamour quo-
Mindy Grossman
tient beyond the red carpet into everyday life.
“We didn’t know what to expect,” recalled Mischka. “We went from Tampa,
where the show was shot, to Palm
Beach, and people there started recognizing us. It has such a reach, which
was really surprising to us.”
Mischka first met Grossman nearly
three decades ago, when she headed
men’s sales for Williwear Willi Smith
and he was head of men’s design.
“Her capacity is amazing,” Mischka
said. “The word ‘no’ doesn’t exist with
her. She looks at everything from a
fresh point of view. She doesn’t look at
it from just a tried-and-true merchantvendor relationship. She has a wide
reach of looking at things, which we
find very useful and very refreshing.”
Richard Graziano of jewelry firm
R.J. Graziano said, “We all expected
changes when Mindy first started.
What we got was the ultimate, supersparkling makeover.”
The evolution continues and
Grossman is brimming with ideas for
HSN Inc., the network’s parent.
“We’ve made decisions to divest of
some businesses, like a Smith & Noble
[home interiors firm], and you’ll see
some of that,” she said. “We made our
first acquisition of Chasing Fireflies in
the children’s space because it lines
up with this aspirational family lifestyle. There’s potentially technology
businesses that will enable us to do
more content or different things. There
are things in what I call the ‘gamification’ world, married to social media,
that could be very interesting and
would enable us to do new things.”
She called this “the most exciting
time in the history of our company.”
“We’ve fixed the fundamental
foundation, we have a strategy that’s
working and we’re in an environment
where technology is enabling us to be
so much more than we could ever be,”
Grossman added.
4
WWD FRIDAY, AUGUST 24, 2012
WWD.COM
SECTION II
WWDMILESTONES
From AM Radio to Multimedia Mecca
Saying that HSN has come a long way
since its founding in 1977 would be a
gross understatement.
HSN was born as a fluke when an
advertiser on a Clearwater, Fla., AM
radio station couldn’t pay his bill. The
station owner accepted 112 electric
can openers in lieu of cash, which he
promptly auctioned over the
air. The can openers sold out
and led to a regularly scheduled shopping show, “Suncoast
Bargaineers.” The concept
in 1981 moved to local access
cable in the Tampa area as
“Home Shopping Channel.” It
graduated the following year
to a regular local Tampa area
cable system. Home Shopping
Channel launched nationwide as Home Shopping Club,
broadcasting 24 hours a day on
cable and local TV. From there,
Home Shopping Network
began attracting attention.
It went public in 1986 on the
American Stock Exchange,
sold a controlling interest to Liberty
Media in 1993, and caught the fancy
of Barry Diller, former chairman of
Fox Inc., who in 1995 acquired HSN
and became its chairman. He is now
chairman and senior executive of IAC/
InterActiveCorp. HSN was completely
spun off from IAC in 2008.
HSN isn’t the only player in the
field. QVC was founded in 1986 by
Joseph Segel in West Chester, Pa. QVC
in 1989 acquired its top competitor at
the time, the Cable Value Network.
Diller in 1992 purchased a $25 million stake in QVC. In 1995, Comcast
purchased a majority stake in QVC,
taking control of the corporation. That
was the year Diller left QVC to buy
HSN. Meanwhile, Comcast in 2003 sold
its majority share in QVC to Liberty
Media.
Other home shopping networks
emerged in the early Nineties, but few
gained much traction, leaving HSN, a
$3 billion multichannel retailer, and
QVC, which generated $8.3 billion in
annual sales in 2011, to battle for customers and brands. Macy’s in 1993 said
it was launching a 24-hour home shop-
ping channel, TV Macy’s. It was backed
by network and cable veterans such as
the late Don Hewitt, then executive
producer of “60 Minutes,” and Charles
Dolan, chairman of Cablevision
Systems Corp. But it was short-lived.
By 1995, Macy’s parent, Federated
Department Stores Inc., had pulled the
plug on the channel. Another channel,
Fingerhut’s S The Shopping Network,
was canceled in 1994 shortly before its
planned launch.
Diane von Furstenberg, Diller’s
wife, was one of the first well-known
designers to try home shopping. She
recalled her first brush with the venue
in November 1992: she sold $1.2 million worth of her Silk Assets collection
during a two-hour appearance on QVC.
The experience was redemptive.
“It’s not what the clothes were
about,” she said at the time, “but it
gave me a sense of security. I went
from has-been to pioneer again.”
Von Furstenberg in 1996 left QVC
and signed with HSN. “The whole
home shopping experience was the
beginning of interaction between
consumers and the screen,” von
Furstenberg told WWD. “I was very
lucky that Barry and I had that experience.…It was an amazing experience.”
HSN, which had been through
several incarnations, would undergo
a major overhaul, with the appointment of Mindy Grossman as chief executive officer in 2006.
Andrew Sheldon, executive vice
president of television, live events
and creative, helped Grossman re-
invent HSN in 2007 with new sets,
graphics and on-air presentations, as
well as an updated hsn.com. He’s now
in the throes of retooling the network
once again.
“We are completely omnichannel,” said Sheldon, who is now working on “the integration of social media
into the HSN mobile app. Already,
you can watch a high-definition feed
of HSN on every platform. Now, you
can chat while
you’re watching.
The HSN host
is able to see
those chats and
can say, ‘So and
so has a question about…’ It’s
becoming this
entire full circle
of integration.
During
some
shows we’ll have
a Twitter feed
running on air.
Home Shopping
“We’re about
Channel came
to launch a
about in 1981.
media lounge
within the TV
studios,” Sheldon said. “It will be a
space where a guest
can use all the social
touch points before
or after they go on the
air. We’ll say, ‘Queen
[Latifah] is now in the
media lounge. She’s on
Facebook if you want to
talk to her.’”
Prior to the 2007
makeover, HSN hosts
“used to grab your hand
and take you to the
till before we told you
what the product was,”
Sheldon said. “Early in
the changes, I tried to
Andrew
create a format where
Sheldon
the host and guest would
sit on a sofa and talk
about the product. We
sit much more when we’re presenting than we’ve ever done. There’s no
reason why our food shows can’t be
like the Food Network and our home
shows like HGTV. We have seen continual growth since we made the [initial]
changes” that included new hairstyles
PHOTO BY BOB CROSLIN
By SHARON EDELSON
and wardrobe styling for on-air hosts.
“There’s been a growth in sales, even
when the world went through this horrible downturn.”
HSN has become adept at integrating new movies into its programming.
For “Snow White and the Huntsman,”
HSN created a product collection
around the film starring Kristen
Stewart that included jewelry by Loree
Rodkin and RK by Ranjana Khan, bedding by Hutton Wilkinson and peasant
dresses by Colleen Atwood. “It was an
unbelievable immersive experience. It
was very successful,” Sheldon said.
Another new programming wrinkle is HSN Live Music events, which
have featured Mary J. Blige, Lionel
Richie, Tony Bennett and Natalie
Cole. The concerts are performed in
front of small audiences, then posted
on Facebook. The musicians have fragrances or CDs to sell, but the pitch is
cloaked in entertainment.
Fashion has been growing and
gaining acceptance since Stefani
Greenfield, cofounder of Scoop and
now chief creative officer of Jones
New York, appeared in 2007 on HSN’s
“Scoop Style.”
“That was the turning point for us,”
Sheldon said. “We were
able to shoot it and light
it and execute against it.
Other designers saw it.”
Designers and brands
such
as
American
Glamour Badgley Mischka,
Label Rachel Roy, Lela
Rose for HSN and Twiggy
London “feel that we understand fashion and we
understand styling now.
We are shooting fashion
in various cities and putting huge [ad] campaigns
together. We’re putting significant dollars behind fall
and spring fashion.”
Sheldon still has a lot
on his plate, including the
relaunch of hsn.com in the
first quarter.
“It’s going to become a very immersive, story-telling experience,” he said.
“We did recent photo shoots for fashion and beauty in New York because
that’s where the models are that we
want to use.”
Timeline
1995: Barry Diller buys
the Home Shopping
Network and becomes its
chairman.
1999: Home Shopping
Network acquires
Ingenious Designs and
hsn.com launches.
2000: Home Shopping
Network becomes HSN.
2001: HSN purchases
the Improvements brand
catalogue and Web site
from Hanover Direct Inc.
2005: HSN acquires
leading catalogue
and online retailer
Cornerstone Brands and
its portfolio of brands
like Ballard Designs, Frontgate,
Garnet Hill, Grandin Road and
TravelSmith.
2006: Mindy Grossman joins HSN as
chief executive officer.
PHOTO BY KRISTEN SOMODY WHALEN
1977: HSN is
founded with 112
electric can openers
that are sold on a
Clearwater, Fla.,
radio station,
prompting “Suncoast
Bargaineers,”
a regular radio
program.
1981: The concept
expands into local
Tampa Bay cable as
the Home Shopping
Channel.
1985: The Home
Shopping Channel
launches nationwide
Barry Diller
as Home Shopping
Club with 24-hour programming.
1986: The Home Shopping Network
starts trading on the American Stock
Exchange.
1993: Liberty Media buys a controlling
stake in the Home Shopping Network.
{Continued on page 6}
The Home
Shopping Club
studio in 1983.
6
WWD FRIDAY, AUGUST 24, 2012
WWD.COM
SECTION II
WWDMILESTONES
By EVAN CLARK
HSN Inc., the retailer that’s
been as close as the TV remote control since 1994, had
the most unlucky of starts on
Wall Street.
Barry Diller was looking
to simplify IAC/InterActive
Corp. in late 2007 and
deemed HSN ready to “thrive
as a ‘pure play’ retailer.’”
But when IAC spun off the
home-shopping business,
as well as Ticketmaster and
LendingTree, that following
August, few guessed the market was just weeks away from
financial crisis.
Shares of HSN started out at $11 and within
months slumped as low as
$1.40 as investors sought to
find their footing.
It turns out that Diller
was right — HSN was ready
to thrive.
The company used the flexibility of its business model,
which is devoid of the shelf
space brick-and-mortar retailers need to constantly fill, and
pivoted to what suddenly stayat-home consumers wanted:
more gear for cooking, not as
much apparel or jewelry.
That flexibility helped
fuel the company. Last year,
net profits rose to $123.1 million on sales of $3.18 billion.
The stock topped $45 this
month — a fourfold increase
in four years.
“It’s difficult to argue with
the numbers,” said Scott Tuhy,
a debt analyst at Moody’s
Investors Service. “Since
Mindy [Grossman, chief executive officer] came and they
became a public company,
they’ve had a very solid track
record. They have a very good
understanding of who their
customer is. That sounds like
retailing 101, but not everybody does a good job of that.
They understand their customer and I think the customer trusts HSN.”
Perhaps that’s because,
just as shoppers watch HSN,
HSN watches them back.
“We gather feedback from
our customer; we measure
our business by minutes,” said
Judy Schmeling, executive
vice president and chief financial officer, who joined HSN
the year it was founded.
Segment producers are
used to thinking on their feet,
and when customers aren’t
calling in to buy, they adjust.
“If we see that a product is
not moving as quickly as we’d
like, we move on to the next
product,” Schmeling said.
There’s an art and a science to selling on TV, though.
“You need a great product,
first of all,” Schmeling said.
“It has to have a great story
and it has to have a great storyteller — someone who has
a connection to that product,
a reason for being. The customer can tell if this is just
a celebrity up there trying
to sell something they didn’t
have an affinity for.”
Schmeling pointed to
tennis star-turned-fashion
player Serena Williams as
an HSN presenter with the
right passion and chops to
connect with the consumer
on the small screen.
And there are still more
potential consumers out
there with whom to connect.
HSN broadcasts to 95.5 million of the roughly 114.6 million U.S. homes with a TV.
But Schmeling said HSN has
4.7 million customers and so
plenty of opportunities to in-
PHOTO BY BOB CROSLIN
Staying Ahead of the Financial Curve
crease penetration.
Even so, HSN does not
have that consumer to themselves. Larger rival QVC is
also gunning for those same
shoppers, and the company
doesn’t lack for competition in its other businesses.
There’s Cornerstone, which
ships more than 300 million
catalogues annually, and
hsn.com, which is going toeto-toe with a multitude of
e-commerce and brick-andmortar retailers.
“Digital is [HSN’s] biggest threat and their biggest
opportunity,” Moody’s Tuhy
said. “Most everything they
sell, it’s not also at Macy’s,
it’s also at Amazon. People
Timeline
{Continued from page 4}
2006: HSN introduces HSN Shop
by Remote.
2007: HSN is relaunched with
new sets, graphics and on-air
presentations, as well as a
revamped hsn.com.
2008: HSN adds social networking
with MySpace and Facebook pages.
2008: The network enters a
partnership with Condé Nast that
kicks off with “Shop With Lucky”
shows.
2008: HSNi spins off from its
parent IAC and begins trading on
the Nasdaq Global Select Market.
2009: HSN’s Shop App launches
and HSN and Verizon FiOS
introduce the HSN Shop by
Remote widget.
2010: HSN adds HSN2 on the
DISH Network with an encore of
HSN shows, products, brands and
personalities.
2010: Rod Stewart’s “Fly Me to the
Moon” debuts during a one-hour
concert event, selling 25,000 CDs
in one hour, while Mary J. Blige
sells 61,000 units of her My Life
fragrance in six hours.
2010: HSN partners with Sony
Rod Stewart
in 2010.
Judy Schmeling.
Pictures to support “Eat Pray
Love” with 72 hours of special
programming around the movie.
2011: HSN sells merchandise
inspired by such movies as “The
Help” and “Footloose.”
2011: HSN launches retail’s
first casual gaming and digital
entertainment portal called HSN
Arcade, combining shopping,
gaming and sharing.
2011: Joy Mangano sells her 350
millionth huggable hanger, the
most successful HSN product ever
and Diane Gilman sells 200,000
pairs of jeans in one day.
2012: HSN partners with HBO
for a licensed beauty and home
collection called Forsaken that is
inspired by the HBO show “True
Blood.”
2012: HSN teams with Universal
Pictures’ “Snow White and the
Huntsman” and sells exclusive
products inspired by the movie.
2012: Lionel Richie’s livestreamed concept sells more than
20,000 CDs in just one hour; NoNo
sells out of 40,000 units of its
innovative hair removal system in
12 hours.
are spending less time in
front of their TVs and more
time on their iPads. As their
customers, and customers in
general, migrate online, they
need to have a compelling
online attraction.”
The firm is trying to do just
that with HSN Arcade, a gaming Web site that launched
last year and lets users play
versions of poker, solitaire
and mahjong while being
tempted to shop.
While Schmeling said it’s
still too early to say exactly
how many sales dollars the
arcade has added, she noted
that the video game player was
“definitely buying from us” —
and that’s the whole point.
Lionel Richie in
the studio.
8
WWD FRIDAY, AUGUST 24, 2012
WWD.COM
SECTION II
WWDMILESTONES
Expanding the Digital Array
ing river of conversation that
brings commerce to life.”
In January, HSN partnered
with technology provider Intel
for HSN Touchwall, an interactive program designed to
expand the reach with consumers beyond TV and the Internet
through a collaboration with
chef Wolfgang Puck. Users were
able to engage by creating their
own virtual pizzas using Puck’s
signature products, and each
received an e-mail or text on
their mobile device following
the experience with a shopping
list and links to order the ingredients online.
Most recently, HSN and
HBO unleashed a highly integrated partnership surrounding the launch of the
Forsaken collection, inspired
by the cable network’s show
“True Blood.” The selection of
beauty products ranges from
Deborah Lippmann’s Sookie
Sookie nail polish to a D.L. & Co. candle with a fang
lid. The campaign included teaser promos, viral videos from the “Human Shopping Network” and “True
Blood” trivia and social chats with members of the
show’s production team. Braff revealed that the
monthlong social campaign had 89.3 million impressions, 261,658 engaged users, 58,348 fans gained and
more than 100,000 video views.
A series of All Access Birthday chats kicked off on
Facebook July 1 in honor of HSN’s 35th birthday. The
retailer tapped celebrities such as Rachel Roy, Randy
Jackson, Nate Berkus and Iman to foster engagement
on the network’s social and mobile channels through
live chats on Facebook.
From Sunday through Sept. 22, HSN will launch its
fall collections with an elaborate multiplatform commerce experience called the Ultimate Trunk Show, in
partnership with Elle magazine. Industry tastemakers will star in “how-to” videos spanning the fashion,
PHOTO BY BOB CROSLIN
using the medium don’t have
Jill Braff
too much time.
“In digital, getting [performance] metrics to be posiHSN IS KEYED UP about mobile commerce.
The channel is the fastest-growing online busi- tive equates to sales because,
ness for the 35-year-old company, with m-commerce frankly, if she comes and has
sales for the first half of 2012 eclipsing the $65 mil- a problem, not only will she
lion the network took in all of last year. HSN is on leave, but she won’t come
track to more than double this number by yearend, back,” Braff said.
The executive said that
according to Jill Braff, executive vice president of
e-commerce has been instrudigital commerce at HSN.
“Mobile really takes advantage of a few behav- mental to HSN’s digital stratiors,” Braff said. “We know we have a core consumer egy since it launched its online
who watches us on TV, and she has mobile devices shopping channel at hsn.com
such as her phone and tablet, and we can create a in 1999, turning a profit within
two-screen scenario that brings her into the show in three months. Currently, HSN
sees between six and eight
a different way.”
Shoppers who interact across several channels million unique visits a month.
spend upward of 50 percent more than a single-chan- Electronics is the most popular
nel customer. Braff said their spending averages from category for e-commerce, but
$700 to $800 a year, but can jump up to $1,300 for the Braff contends that, judging by
“Her Hub” — its beauty, fashconsumer who engages across several mediums.
“She’s also doing product research, as well, and ion, accessories and retail porfor the consumers who may not be TV watchers, [we tion — it’s the jewelry category
asked ourselves] how do we make that experience that reigns as the bestseller.
Sales from e-commerce at hsn.com in
2011 constituted 34 percent of HSN’s total
sales and the company has seen 8 percent
growth on this channel in 2012 to date.
E-commerce has grown 65 percent in the
past five years, according to Braff, who attributes its success to the merging of commerce and content, a focus for the retailer
since its inception.
“[We’ve been bringing] this to life every
day through TV for the past 35 years, and now
we’re looking at digital and how the consumer
is changing. We see a great opportunity to really leverage the assets of the network, the same
assets that have always made us,” said Braff,
citing entertainment, commerce, content and
community. “We have always had a thriving
commerce business, and this [further] comes
to life through e-commerce, whether shoppers
are helping other shoppers or even live chatThe HSN Arcade homepage.
ting with one another. There are many more
really rich when we think about mobile? We’re fo- ways for our community to help each other and concused on this multichannel shopping behavior when nect to us through these digital platforms.”
But mobile and e-commerce aren’t just about the
consumers interact with us,” she said.
As a result, HSN has built its mobile-centric prod- transaction; they are also an engagement vehicle
ucts around shoppers’ behavior. Braff explained that HSN leverages through its presence on various
that this consumer tends to be more of a hunter, and social media platforms. It entered the space in 2008
since she has less time on mobile, the retailer has with MySpace and Facebook pages (it’s been active
begun to supply her with mobile recommendations on YouTube since 2007), and a year later unveiled
related to items she may be “hunting” to give her its first iPhone app, the HSN Shop App, which gave
consumers access to shop on three screens: TV, online
more impulse buying or flash-sale opportunities.
Mobile also serves as a leading new customer through its digital flagship and via mobile device. In
acquisition channel, which means HSN must think 2010, HSN came out with iPad and Android apps, as
about how to make this experience as seamless as well as HSN Mobile. In 2011, QR codes were integratpossible across screens, whether it’s video on de- ed on TV to drive mobile sales and, in June of that
mand, streaming live broadcasts or a chat. Braff said year, digital gaming platform HSN Arcade launched.
Social gamification is shaping up to be a major
if a user is on hsn.com and places a product in her
cart, she should be able to have one cart on all chan- focus for retailers and brands online, and in the 14
months
since HSN welded shopping, gaming and
nels. She can start a purchase on one screen and
then complete the transaction on another. Focusing sharing in the free, 26-game arcade, it has seen an
on performance here is paramount, as most people astounding 69 million game plays. Of the games, the
Today’s Special jigsaw puzzle, based
on HSN’s “Today’s Special,” is the
most popular, according to Braff,
who calls the “casual gaming portal”
an “incredible engagement tool.” As
soon as the day’s special launches
at midnight, a jpeg of the item is released for participants and the person who completes the puzzle in the
fastest time wins the item.
“We want to be a poster child for
social media and commerce, and
we believe that our customer is so
primed for social because she’s
very loyal and has a lot to say,” she
said. “We folded social into the
whole HSN network, and the biggest
change with digital here is that we
recognize that the consumer is in
the middle with all of these screens
around her. It becomes the underlyHSN’s “True Blood”-inspired Forsaken collection that came out Aug. 9.
By RACHEL STRUGATZ
HSN’s Facebook page.
jewelry, accessories and beauty worlds showing consumers their latest collections and must-haves for the
upcoming season. The videos will live on hsn.com,
HSN mobile and social platforms such as Facebook,
Twitter, Instagram, YouTube and Pinterest.
“Digital is a very important driver of our overall business strategy as we work to provide content-rich experiences across all of our platforms
that engage and inspire consumers,” said Mindy
Grossman, chief executive officer of HSN Inc. “We
are committed to giving our customers the opportunity to experience HSN on her terms, whenever
and wherever she chooses.…Our digital dress shop
and House Beautiful Marketplace initiatives are
recent examples of digital-first strategies that have
allowed us to apply what we’ve learned online to
our on-air programming and elevate the HSN shopping experience overall. Our goal is for her to want
to interact with us every day — not just when she
wants to shop, but when she wants ideas, information, relaxation or entertainment.”
... you don’t look a
day over 30 ...
Happy
35
Birthday
th
Number 1 in beauty on
Helping 96 million American
households look years younger
10 WWD FRIDAY, AUGUST 24, 2012
WWD.COM
SECTION II
WWDMILESTONES
Accessories Tell a Story
By ALEXANDRA STEIGRAD
WITH THE ADDITION of more exclusive fashionforward accessories to its product mix, HSN has
slowly changed how the industry views its business
strategy and its customer, according to Bill Brand,
executive vice president of programming, marketing
and business development.
“When it comes to the product, it’s about being
on trend. It’s about our merchants creating product that hits our sweet spot,” he said, emphasizing the accessories and footwear categories as
a standard bearer for HSN’s growth. “When it
comes to accessories, over the past three years,
you’ve seen more national brands.”
Beamed into 96 million homes across the U.S.
with live-streaming segments available on its
Web and digital sites, HSN has shrugged off the
stigma of a shopping channel for dowdy couch
potatoes and emerged as one of retail’s most innovative multiplatform companies by luring in
well-known designers and brand ambassadors.
In recent years, HSN has fueled its growth by
adding popular names such as Badgley Mischka,
Naeem Khan, Iris Apfel, Sam Edelman, Vince
Camuto, Carlos Falchi, Jessica Simpson, Serena
Williams, Iman and Twiggy.
Designers-turned-celebrities, celebritiesturned-designers — and everything in between — flock to HSN’s home base in St.
Petersburg, Fla., to sell their wares, most of
which are exclusive to HSN, in their own TV
studio. Brands are selected by HSN based on
selling power and the strength of the brand’s
story. In most cases, this means designers, brand
ambassadors and founders had better be good at connecting with viewers at home.
“Great product is the price of entry, but you have
to have a great story and be a great storyteller,” said
Brand, explaining that “creating a relationship”
with the consumer is how HSN keeps customers
coming back.
“HSN is about staying current. You have to be
flexible and collaborative,” he added. “Accessories
is a high-growth category and it’s a loyalty driver.”
As a result, HSN has put a lot of thought into
bringing in jewelry, handbags and footwear that are
trendy yet affordable.
For footwear, the company’s fastest-growing category within accessories over the last three years, the
focus continues to be on attracting national brands,
according to John Bosco, HSN’s senior vice president of merchandising.
“In the footwear business, you
need recognizable brands,” he
said, pointing to the recent additions of Vince Camuto, Steve
Madden and Sam Edelman.
“The customer wants the hottest trends.”
With an offering ranging from $99 up to $299,
HSN has not only increased the number
of brands it carries, but it has also
worked on getting exclusive
product from
those brands.
Vince Camuto’s
studded leather
pump.
A necklace from Amedeo NYC.
A snakeskin
print bag from
Iris Apfel.
“When we look at designers in footwear, we try to
understand their relevance as well as who our target
audience is,” Bosco noted. “We are looking to broaden the assortment when it comes to digital. That’s
where most of the variety is being added.”
With the addition of its Web site in the last 13
years and a dynamic digital platform within the last
six, HSN has had a larger opportunity to grow its
stable of brands. This includes building out jewelry,
which is the firm’s second-biggest priority in accessories behind footwear, according to Bosco.
Jewelry, which emphasizes trends more than
national brands less and trends more, is anchored
by the strength of Rarities, a fine jewelry collection
by Carol Brodie. While Rarities isn’t fine jewelry
in the traditional sense — its core offering hovers
around $249 — the brand does offer higher-priced
styles that hit $2,500.
Like most of the other HSN brands, Rarities uses
classic designs found in fine jewelry and replicates
them in more affordable materials including stones
such as white topaz, cubic zirconia, peridot, amethyst
and turquoise, and metals such as sterling silver, vermeil, stainless steel, black rhodium and 10- and
14-karat gold.
For HSN, the challenge in jewelry is
maintaining the balance between design
and quality.
“It has to be [about] designers [customers] know and bringing those designs to consumers at an accessible price point,” Bosco
said. “That’s the kind of stuff where credibility
and aspirational quality come into play.”
The same holds true for handbags, Bosco
explained. The more aspirational designs must
be evocative of the designer’s higher-priced
collection at a more affordable price. For example, Carlos Falchi, who is relaunching his brand
with new partner Li & Fung in September, will
offer a collection of bags for HSN. Known for his
quality work with exotic skins, the HSN line will
replicate his signature looks in treated leather
to keep the price attainable.
“HSN is a true partner. They help finance the shows. They are correct in terms
of payment, and they have the most experienced buyers in the world who plan
to sell out completely and they do,” said
Amedeo Scognamiglio, founder and chief
executive officer of Amedeo, an Italian
brand that has been selling its cameo-centric jewelry on HSN for 10 years.
According to Scognamiglio, HSN helps its
vendors develop the right product for its customer
and it also acts as a sort of mentor through the selling process.
“What I like about HSN is that as a partner,
you count. As a physical person, you are vital to
the outcome and everyone is behind you,” said
Scognamiglio. “HSN has the most discerning customers there is. When you’re on TV, you are not looking at them, they are looking at you and they can tell
who’s a fraud.”
As a member of HSN’s stable of brands, Amedeo
NYC must pump out nine collections a year, and
appear on TV nine times a year to sell them. Each
collection takes about four months to produce,
which means Amedeo is constantly working on
something for HSN.
Earrings from
Rarities, a
fine jewelry
collection by
Carol Brodie.
But that’s fine with Scognamiglio, who is also cofounder and co-ceo of fashion-forward fine jewelry
brand Faraone Mennella. According to the designer, when he started with HSN, his fashion friends
told him selling on TV would “tarnish” his brand.
Now those same people are asking him how they
can get on HSN.
“When you sell 1,000 units of jewelry at once and
[HSN producers] are screaming for more, it’s an
amazing feeling,” he said. “Designers love fashion
shows, but the ultimate satisfaction is when you sell
a product and when people buy a product.”
CONGRATULATES HSN ON 35 YEARS
OF INDUSTRY EXCELLENCE
12 WWD FRIDAY, AUGUST 24, 2012
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SECTION II
WWDMILESTONES
Creating a Beauty Bonanza
Olum, who added that HSN’s Web site, on which a
“significant portion of the beauty business” is conducted, offers customer reviews and expert blogs
across all categories. For beauty, HSN also uploads
how-to videos, which exist also on HSN’s mobile,
Facebook, Twitter, Instagram, YouTube and Pintrest
pages, with tips from industry insiders like David
Evangelista and Sally Hershberger.
“We want our customers to fall in love with our
products twice — when they purchase and then again
when they receive it,” said Olum. “In terms of being
truthful, we have to ensure we are true to both the
consumer and the HSN brand at all times. That is how
we earn trust and continue to evolve our business.”
By BELISA SILVA
“HOW DO YOU SELL 60,000 bottles of fragrance in a
day when no one has smelled it?” asked HSN’s general manager of beauty and merchandising, Betsy
Olum. The answer is: “You tell a story.”
In the beauty business for over 20 years, HSN has
transformed itself from a relatively undeveloped
beauty retailer with a handful of proprietary brands
to a robust venue for more than 60 — across the
color cosmetics, skin care, hair care, nail care, beauty tools, bath and body and fragrance categories.
“It’s hard to believe that only six years ago 70 percent of our air time was dedicated to four proprietary beauty brands,” said Olum, who named some
of HSN’s current best-selling brands as Serious
Skin Care, Perlier, Signature Club A and Your Best
Friend, which are all exclusive to the network, as
well as Lancôme, Shiseido, Wei East, Boscia, Carol’s
Daughter and Benefit. “Things have changed dramatically over the past six years.”
Although prior to the millennium, the direct-sell
TV channel hadn’t historically been the first choice for
beauty brands, Olum said once chief executive officer
Mindy Grossman — who took the helm in 2006 — unveiled her strategy for the network, things began to shift.
“Mindy’s vision was that HSN would not just be
a shopping channel, but an opportunity to provide
entertainment and community,” said Olum, who
added that part of HSN’s updated trajectory included bringing onboard harder-to-find prestige and
specialty brands. “Suddenly it became acceptable to
sell beauty on television. Brands saw the vision and
thought, ‘What a great opportunity.’ It was about volume but also about building a brand’s story. Women
[also] opened themselves up to [the channel] and
said ‘Yes, I can do this.’”
According to Grossman, “knowing that the beauty
category is an entrance point for new customers, we
needed to diversify our portfolio with new brands
that would attract consumers who may not have considered HSN before. We needed to become a true
beauty ‘authority’ and bring product, demonstrations and innovation to our customers. As you can
see, we’ve come a long way in transforming HSN
into the ultimate beauty destination.”
To that end, Olum said it’s the blend of storytelling, education, accountability and authority that creates a climate of consumer trust — and patronage
— for HSN shoppers.
“Unlike traditional and specialty store venues,
we have a huge ability to bring [brands] to life,” said
Olum, who referenced the runaway success of Mary
J. Blige’s My Life fragrance, which, in July 2010, sold
upward of 60,000 units in six hours, shattering all existing fragrance records at HSN. “When Mary J. got
on and shared her stories, people’s hearts opened
up. This was a woman who had a lot of pain in her
life and said, ‘This [scent] represents my soul.’ People
could not stop calling.”
Sean “Diddy” Combs was another who, in
November 2009, blew out of the entire inventory
of his I Am King scent in just one hour, prompting
the network to cancel its scheduled second hour of
programming. Similarly, Jennifer Lopez, who was on
HSN in July of 2011, sold more than 51,000 units of
her Love and Light scent in six hours of air time,
while Eva Longoria’s offering, Evamour, sold more
than 8,000 units in two hours in March 2012.
“HSN really gives you the opportunity to become
Eva Longoria
sold more than
8,000 bottles
of her scent,
Evamour, in
two hours.
Sean “Diddy” Combs on HSN promoting
his scent I am King — which he sold out
of in an hour — in November 2009.
acquainted and intimate with the person who works
on the brand and how to use it,” said Olum. “It’s almost like your best girlfriend letting you in on the
secrets of the industry.”
With names like Mariah Carey, Kate Walsh and
Nicole “Snooki” Polizzi from “Jersey Shore” also on
HSN’s beauty roster, it’s clear the network has plenty of personalities to fill the airwaves — sometimes
with unexpected results.
“With live TV 24-7 you never know what to expect,”
said Olum, who named a few stand out on-air moments, including an impromptu dance break with J.Lo
and her mom, Guadalupe, as well as Carey’s memorable — and now viral — post-baby birthing show.
“We’re live television and we are about the truth,”
said Olum. “We have the greatest voracity and authenticity of anyone.”
In the instance a guest should perhaps “say something off color or make claims not verified by clinicals,” a five-second delay ensures that nothing is
aired that shouldn’t be.
“You can say almost anything you want in a brickand-mortar [location] but on television you have
someone sitting with a red button,” said Olum. “You
will never see anything we say or do that is not true.
Someone is watching for you.”
Looking to the future, Olum revealed that HSN
has plans to extend its storytelling concept beyond
the celebrity sphere and into the world of classic
fragrances, with a focus on “memory fragrances.”
“These are scents that you know your mom wore or
that you wore as a little girl,” said Olum, who named
Lancôme Trésor as an example. “There is a whole customer that relates to that kind of classic fragrance.”
Beyond fragrance, Olum said HSN plans to revisit
and expand its hair care business, which she says
represents the company’s “biggest white space,” as
well as take on SPF, sun care and self tanning — a
traditionally troubled category for the direct-sell
platform — in a more substantive way.
“Telling that [SPF] story is really hard,” said
Olum, who revealed HSN’s upcoming — and updated — sun care platform will include self-tanning,
body bronzing and sun safety. “This will be a huge
initiative to come.”
As far as skin care and color cosmetics, Olum said
the one-on-one experience of having an on-air beauty
consultant or skin care specialist to explain the product
and its benefits is just as important as it is with scent.
“You walk into [a store] and pull something off
the linear and unless you get someone to help you,
you don’t understand [a product’s benefits],” said
Olum, who added that beauty tools featuring innovative technology, like at-home hair remover NoNo,
which has sold over 280,000 units since its 2010
launch, have been flying off shelves. “HSN offers the
opportunity to visualize and understand and make
changes to your regimen however small.”
To do just that, makeup artists like Vincent
Longo, Trish McEvoy and Paula Dorf been on to
promote and explain their products as have Benefit
founders, Jean and Jane Ford, and beauty entrepreneur Iman. Nail guru Deborah Lippmann is also a
top seller, selling out of her Forsaken Lip and Nail
duo in a mere 34 minutes.
“Our ability to tell the story — how to do a clean
face, smoky eye or antiaging routine — and to follow that up online is pretty extraordinary,” said
Cornerstone Takes
Lifestyle Approach
HSN acquired catalogue and online retailer
Cornerstone Brands in 2005.
Cornerstone comprises leading home and apparel lifestyle brands Ballard Designs, Chasing
Fireflies, Frontgate, Garnet Hill, Grandin Road,
Improvements and TravelSmith. More than
half of Cornerstone’s revenue comes from its ecommerce sites, according to the HSN Web site.
Cornerstone operates separate e-commerce sites,
distributes more than 300 million catalogues annually and has 11 retail and outlet stores. The segment had sales of $461.2 million in the first half
ended June 30, a 12 percent gain from the same
period a year earlier, as gross profits rose 15 percent to $190.3 million.
In April, HSN bought the Chasing Fireflies children’s clothing business. Earlier this year, it sold
two companies, the window-treatment company
Smith + Noble in May and The Territory Ahead
clothing business in July.
Garnet Hill, a 30-year-old label, has extended
into multiple categories through the years. The
company started out as an importer of English
flannel sheets and has developed into a multichannel marketer, offering bedding, home furnishings,
sleepwear, shoes, women’s apparel and children’s
clothing online and through its catalogues. Today,
the company ships internationally and offers the
Garnet Hill guarantee: “If an item does not completely delight you, we’ll take it back for exchange
or refund. It’s that simple.”
TravelSmith is said to be another standout in
the Cornerstone portfolio. It was founded in 1992
“with one compelling mission: to make travel as
hassle-free and pleasurable as possible.” To that
end, the mail-order and online business specializes in wrinkle-resistant fabrics, both natural and
high-performance, that it claims “look great after
being stuffed in a suitcase for a week or worn on
the red-eye overnight. We created stylish, versatile, easy-care clothing and developed lightweight, innovative accessories that make travel
more secure and comfortable. And we hired likeminded travelers with a passion for sharing their
knowledge and experience.”
Another Cornerstone label, Ballard Designs,
has an unlikely backstory. In 1982, Atlanta socialite Helen Ballard Weeks opened her Buckhead
condo to photographers from Metropolitan Home
Magazine to participate in its home-decorating
contest. She won. Once the photos were published, 500 readers contacted the magazine asking where they could buy furnishings and other
decor items like hers. A year later, she quit her
job, sold her prize-winning home and started
Ballard Designs. The first catalogue consisted of a
two-page black-and-white brochure. Today, buyers
travel the globe in search of inspiration to create
timeless, European-inspired home furnishings for
design-oriented customers.
“The Ballard Designs brand continues to grow
through expanding catalogue circulation and its
online presence as a trusted decorating resource,”
the brand’s Web site notes.
— ROSEMARY FEITELBERG
Perlier celebrates HSN’s 35 years
of pioneering electronic retailing.
Congratulations to Mindy Grossman
on creating a truly innovative interactive
lifestyle network.
Available at HSN.com
‘Intelligent transportation with living royal jelly’
14 WWD FRIDAY, AUGUST 24, 2012
WWD.COM
SECTION II
WWDMILESTONES
Celebrity Connection Proves a Hit
By MARCY MEDINA
LOS ANGELES — HSN is ready
to go Hollywood.
With a slew of multiplatform tie-ins with movies,
music and television, the network is establishing itself as
an entertainment and marketing channel though which studios can harness the power of
its 96 million-home reach.
“A few years ago, we started to build a strategy around
entertainment as a whole
and said, ‘How do we create a one-of-a-kind shopping
experience surrounded by
great products?’ ” said Bill
Brand, HSN’s executive vice
president of programming,
marketing and business development, who joined the
company six years ago after
working at Lifetime and
VH1. “I didn’t have HSN
on my radar, but Mindy
Grossman said, ‘We can be
an entertainment network.’”
Brand said during the first
few years of his tenure, he and
Grossman, HSN Inc.’s chief executive officer, had their work
cut out for them, embarking
on a Los Angeles road show to
meet with the heads of marketing at movie studios.
“We said, ‘We can combine
shopping with your great stories and make a great experience for our customers.’ Our
women want to know what’s
going on in the movie world,”
said Brand.
With the vast viewership,
the potential for ticket sales
wasn’t lost on studios.
“What they find appealing
is we have an engaged customer base of women who respond
to many of the things we present to them,” he said.
In August 2010, HSN
launched its first movie tiein with Sony Pictures’ Julia
Roberts vehicle “Eat Pray
Love.” The 72-hour event aired
a week before opening weekend and included three full
days dedicated to merchandise
inspired by the three locations
where the movie takes place:
Italy, India and Bali, Indonesia.
Branded merchandise included collaborations with Naeem
Khan, Robin by Me&Ro,
Rebecca Moses, Hutton
Wilkinson and Lancôme.
“Our customers loved
it and they also went to
the movie,” Brand noted.
“That really impressed the
Hollywood community. Not
only did we treat their property with respect, we also delivered audiences to theaters.”
In pre- and post-event customer surveys, more than 75
percent said the HSN tie-in
increased their interest in
the movie, and more than 70
percent said they planned
to see the movie on opening
weekend. While there’s no definitive way to calculate what
percentage of the box-office
take came from HSN customers, Brand said there’s a
definite correlation between
Above: Josh Turner in the studio.
Right: Movie product tie-ins: “Eat,
Pray, Love,” “Snow White and the
Huntsman” and “Footloose.”
the marketing efforts and response from customers seeing
the film.
“When we do entertainment
events, we do see a spike in
viewership and lift in engagement and sales,” he said.
Since then, the network
has done initiatives with
the films “Footloose,” “The
Help” and “Snow White and
the Huntsman.” “The Help”
event included exclusive collections by Lela Rose and
Cynthia Rowley and cookware and food items from chef
Martha Hall Foose and Viking,
as well as a set appearance
by Academy Award winner
Octavia Spencer.
“We
were
extremely
pleased. They are smart marketers who know their core audience and the two opportunities strategically aligned,” said
Don Gross, vice president of
global promotion for The Walt
Disney Studios, which handles
all distribution and marketing
for Dreamworks films, including “The Help.”
But it’s not just movies.
HSN has also launched quarterly live musical events with
stars such as Lionel Richie,
Rod Stewart and Josh Turner.
“There aren’t many marketing platforms for records anymore, so our TV team worked
with the labels to bring it back.
In addition to the live performances, we are able to give
early access and something
exclusive that they can have
first,” said Brand of the live
concert shows and preordering the CDs.
HSN’s most recent program was a TV tie-in earlier this month, the launch of
Forsaken, a beauty and home
collection inspired by HBO’s
“True Blood.”
While Brand declined to reveal which movies are on the
roster for next year, he said
the network is in heavy production for the 2013 slate and
already has staffers going to a
film set in Europe for a movie
that opens in 2014.
“The Hollywood community
understands what it takes to be
successful, which is early access,” he said. “You need nine
to 12 months on these types of
projects to create product and
great experiences.”
The “Snow White and the
Huntsman” tie-in exemplifies
this point. The network had access to visuals from the movie
and to the set about a year before its release.
“My primary goal was to
create a marketing vehicle
for this film,” said Stephanie
Sperber, Universal Studios’
president of partnerships
and licensing. “At the box
office, the HSN customer —
women over 25 — tends to be
underrepresented. To recognize that audience is very
valuable. They tend to watch
the channel for a long time,
so having a 24-hour dedicated show with quality merchandise and content was a
great thing.”
An HSN designer got to
speak with Academy Awardwinning costume designer
Colleen Atwood in London,
who told her that she had
never created a consumer
collection before. The resulting capsule collection
launched on the channel’s 24hour May 30 event just before
the movie’s opening night.
Atwood appeared on HSN to
sell her line and share some
of the original costumes and
her stories about dressing
the stars. Other merchandise
included exclusive pieces
by Loree Rodkin and Heidi
Daus, as well as thematic
items from Ranjana Khan
and Adrianne Landeau.
“We are used to seeing licensed products and it far
exceeded anyone’s expectations,” said Sperber. “If we
ever have any movies that
align with their customers,
there’s no question we’ll be
calling them again, and I’m
sure other studios want to do
the same.”
For Paramount Pictures’
“Footloose,” HSN sponsored
the movie’s Hollywood premiere in addition to 24 hours
of programming featuring
footwear exclusives from
Vince Camuto, Steven by Steve
Madden and Twiggy London
among other fashion and
beauty merchandise.
LeeAnne Stables, president of consumer products at
Paramount, said the studio is
planning to partner again with
HSN on an end-of-year release
that Stables calls “a fantastic
program that will probably go
down in history as one of the
perfect movie promotions.”
Not only have the programs helped keep core customers engaged, they have
raised HSN’s profile among
first-time users.
“Our goal is trying to convert them into customers by
changing their perception
of the brand,” Brand added.
“For us, it’s been a key part
of how we’ve repositioned
the brand. We went out there,
took some risks and now it’s
cool to see that the industry
has taken notice.”
Congratulations HSN
on your 35th Anniversary
Congratulations Mindy Grossman,
the most brilliant and innovative
CEO on the planet
Adrien Arpel
U N I VERSA L P I C T U R E S
Warmly Congratulates
HSN
On 35 Fabulous Years
© UNIVERSAL STUDIOS