PLUSBrioni outlines a growth plan that includes more

retail locations in the U.S., sales diversification and further expansion in

China. Page MW2

Good Break“Breaking Bad” star Bryan Cranston has more hits than misses when it comes to personal style. Page MW2

MAN OF THE WEEK

October 3, 2013

The men’s denim arena is in flux, with consumers

demanding a reason to pay for higher-priced

offerings. Manufacturers are responding by

injecting their brands with value-added

treatments such as distressed finishes and

heavy washes. For more on the denim

market, see pages MW4 to MW6.

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Lord & TaylorHighlights Men’s

RETAIL REVAMP

Fifth Avenue flagship doubles space, adds second floor

{Continued on page MW7}

Faded Glory

by JEAN E. PALMIERI

NEW YORK — Lord & Taylor has turned its attention to men’s wear.

The department store has doubled the square footage devoted to men’s at its New York flagship this fall, adding a second floor of selling space. The expansion, which brings men’s to 100,000 square feet, is de-signed to capitalize on the growing impor-tance of the sector and has thrust the store firmly into the contemporary market.

The expansion and renovation puts a stake in the ground for Lord & Taylor, which has historically been seen as a women’s store with a men’s department tucked away on the top floor.

“Men’s has been a growing business for us for a while,” said Liz Rodbell, president and chief merchant of L&T’s parent com-pany, Hudson’s Bay Co. “Our mission was to expand the men’s position on Fifth Avenue and in the market for Lord & Taylor. We’re on a great road and the men’s business is a great opportunity.”

HBC has definitely raised its profile in recent years, becoming a major player with its pending purchase of Saks Inc. to add to its Lord & Taylor and The Bay nameplates. The $2.9 billion Saks acquisition is expected to be completed by the end of the year.

Until that time, the company is moving ahead with a $40 million renovation of the 625,000-square-foot L&T flagship, a project that kicked off last year. One of the biggest changes has been the addition of the ninth floor to the men’s department. In the past, all of men’s was compressed onto the 10th floor with furnishings on the main floor. All told, 22 brands have been added to the men’s mix.

Wayne Drummond, senior vice presi-dent and general merchandise manager of men’s wear for Lord & Taylor and The Bay, stressed that when assembling the mix, the men’s team was “very careful to think through” the resources it would add to pro-vide “updated choices” without alienating its existing customer base. “We’re evolving to support the whole young movement, but we also want to create an exciting environ-ment for our core customers,” he said.

The ninth floor, which formerly merchan-dised home products and contained offices, is now home to sportswear and contempo-rary vendors as well as an expanded denim assortment. “Denim is one of the larg-est areas we exploited,” Drummond said. G-Star, DL1961, Joe’s Jeans and Seven For All Mankind are showcased in the new area. “We’re taking the opportunity to expand the premium end of the business while still con-tinuing to give more options and ideas to

Burberry Prorsum’s wool coat, BLK DNM’s wool sweater and cotton tank top and The Innercity Raiders’ cotton denim jeans. Saint Laurent boots.

Men’s WeekMW2 WWD THURSDAY, OCTOBER 3, 2013

Brioni Eyes Further Expansion of Retail

G-III Acquires G.H. Bass

by RACHEL BROWN

COSTA MESA, Calif. — Brioni is getting big-ger in its biggest market.

During a quick trip to Orange County, where the Kering-owned Italian suit maker opened a store at the South Coast Plaza shopping center in June, chief executive of-ficer Francesco Pesci reemphasized that the brand’s growth plan includes more retail locations in the U.S., sales diversification — with non-tailored men’s wear, leather goods and footwear gaining ground — and further expansion in China.

“We think there is unexploited potential in the United States market and, tradition-ally, the retail presence has always been concentrated on the East Coast and the West Coast, but there are other cities where we

can go,” he said. “I am very confident in the potential of this market because I think that the United States is bound to remain Brioni’s most important market.”

After restraining retail development, Pesci described Brioni’s present approach to retail as “aggressive” and “ambitious.” This year, the brand opened stores in Costa Mesa, Chicago and Palm Beach, Fla., a number that Brioni feels comfortable repeating in the U.S. going forward. “We’ll keep on following this pace for the next three years from 2014 to 2016,” said Pesci, who estimated Brioni flagships are pri-marily 6,000 to 7,000 square feet, and its small-er stores are 3,000 to 4,000 square feet.

Store renovations are a possibility too, and Brioni is considering updating its New York unit. The revamp of the Beverly Hills flag-ship on Rodeo Drive, which was unveiled in May 2012, proved that change could be a good thing. “The store is going extremely well. I

have to say that the renovation really changed the performance,” said Pesci, elaborating that the renovated store concept is “luxurious, but not imposing. People want to come into the shop. They don’t feel intimidated.”

As it adds stores, Brioni’s revenue mix is skewing more toward retail over whole-sale. Currently, retail accounts for 42 per-cent of the brand’s business. Pesci’s goal is to increase that figure to 60 percent by 2016. There are 51 franchise units and 32 compa-ny-owned units worldwide. In China, where Brioni recently bought back five stores that were franchises, the company expects to open three to four stores next year.

“The U.S. cannot provide the same kind of growth pace that China is providing at the moment, but the U.S. is still growing in the double digits, which is quite high for a ma-ture market,” said Pesci. Overall, he said the brand is “doing well in terms of sales. The company is growing and is growing profitably. Basically, it’s becoming a bigger company, but also a better-managed company.”

If Pesci is making Brioni a well-managed company, then Brendan Mullane, the former senior head men’s wear designer at Givenchy who became the firm’s creative director in June of last year, is meant to make Brioni a more creative one. Pesci said his objective is for Mullane to demonstrate Brioni is “a brand that is able to stir passion and emotion.”

“We have seen definitely an improvement in our sell-through since the first new collec-tion by Brendan, but I think the most impor-tant thing is that his first collection is really helping us to show the changes that we want-ed to implement and, notably, the fact that we are now focusing more on closer-fitting sil-houettes that can be appreciated by younger customers,” said Pesci.

While the ceo admitted Brioni is often thought of as a brand for older men, that image is shifting. “Our age target is a man be-tween the ages of 35 and 55. Now, in Europe, Russia and China, the split between 35 to 45 and 45 to 55 is equal,” he said. In the U.S., the older segment remains a larger consumer base for Brioni, but Pesci said, “The younger age bracket is catching up.”

Although tailored merchandise is par-ticularly strong in the U.S., where Brioni has a very established name, the non-tailored category has experienced momentum glob-ally. Non-tailored merchandise constitutes slightly more than 40 percent of Brioni’s sales today, and Pesci’s goal is for that figure to swell to 50 percent in three to five years. Meanwhile, leather goods and shoes have been surprise performers. “They have grown to 7 percent this year. It’s a fast rise and our vexpectation is to have those two categories representing 15 percent of our consolidated sales by the end of 2016,” said Pesci.

J. Hilburn Opening Pop-upJ. HILBURN, a Dallas-based direct seller of men’s wear, is set to unveil its first brick-and-mortar location: a 1,400-square-foot pop-up shop at 91 Grand Street in New York’s SoHo neighborhood. Billed “A Fortnight in SoHo,” it will open Wednesday.

“The driver behind why we wanted to do a pop-up is brand building,” said Veeral Rathod, president and cofounder. “What separates brands is the deep emotional experience they have with their customers. Men’s wear is less about the piece you buy than creating trust in the brand and stylists.” J. Hilburn has a na-tional network of over 3,000 stylists who visit customers in their homes and offices to sell custom shirts, trousers, sport coats, suits and accessories. “We believe that if we can create a physical manifestation of the brand, we can build that trust a lot quicker.”

J. Hilburn has a small showroom at its com-pany headquarters and Rathod said the firm’s

average sale from an office or home visit is $350, while it’s nearly $800 at the showroom.

Rathod said that if the New York City pop-up is successful, the company will move to other markets next year — cities such as Tulsa, Okla., where demand for its product is high and competition is limited. “This takes trunk shows to the next level,” he said, noting that the shops can be packed up and moved easily around the country.

“Our five-year plan is to have three to five brand statement stores,” he said. These would be located in New York, Dallas, San Francisco, Los Angeles and Chicago.

J. Hilburn, which was launched in 2007, expects to have sales of $55 million by the end of the year. It has sold 300,000 custom shirts to date and bills itself as the largest maker of custom shirts and made-to-mea-sure trousers in the world.

— JEAN E. PALMIERI

Man ofTHE WEEK

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The Emmy Award-winning “Breaking Bad” star sheds his suburban-chemistry-teacher-turned-meth-dealer look, channeling a more sophisticated European flair.

The casual brown suede

shoe reveals a higher taste level

and a personal confidence of his

own style.

BRYAN CRANSTON: B+Although the shaved head from seasons past gave him a sharper appeal, the textured cut with good volume enhances his strong jawline.

A subtle Botox treatment would help with the deep wrinkles without decreasing his older-man sex appeal.

The oversize gingham check shows an adventurous and playful side and creates the perfect backdrop for the solid navy knit tie.

The wide spread collar frames his

face and allows for the thicker tie knot.

The sloped shoulder indicates

that he could use a slight alteration

but plays well with his softer side.

A French cuff with a simple cuff link would finish the Euro-influenced style. But barring that option, the shirtsleeve needs to show.

He would benefit from a jacket that

is one inch shorter.

The South Coast Plaza store.

by DAVID LIPKE

PVH CORP. has inked a definitive agree-ment to sell its G.H. Bass & Co. footwear business to G-III Apparel Group Ltd. for about $50 million in cash. The transaction, revealed late Wednesday, is expected to close early in PVH’s fiscal fourth quarter, which begins in November.

PVH has sought to unload the strug-gling Bass division, which it acquired in 1987, so it can focus on its higher-growth Calvin Klein and Tommy Hilfiger brands. It began seeking a buyer for Bass following its acquisition of The Warnaco Group Inc. in February, said Emanuel Chirico, chair-man and chief executive officer of PVH.

“Our retail heritage businesses have really been struggling for the past few years. This significantly reduced that ex-posure,” said Chirico. “[Bass] is a heritage brand that is well known, but we have not been investing in the brand from a market-ing point of view. That has the ramification of putting sales and gross margin pressure on the business.”

Bass currently does $250 million in vol-ume in about 160 outlet stores, or about 40 percent of PVH’s heritage brands retail business, which also includes Izod and Van Heusen stores. Sales are split evenly between men’s and women’s.

Another $30 million-plus in Bass wholesale sales comes from Harbor Footwear Group Ltd., which holds the li-cense for men’s, women’s and children’s footwear in the wholesale channel.

For the six months ended Aug. 4, same-store sales dropped 9 percent in PVH’s heritage retail business, due mostly to con-tinued weak performance in the Bass retail unit. PVH has no plans at this point to di-vest other heritage brands such as Arrow, Speedo, Olga or Warner’s, said Chirico.

G-III plans to improve product de-sign, marketing and the in-store experi-ence at Bass stores, said company chair-man, president and ceo Morris Goldfarb. “It’s not often you are able to acquire a company that has two iconic compo-nents to it — Weejuns and Bucs are the heart and soul of American footwear,” he noted of two signature Bass designs. “It

was a brand that wasn’t given the appro-priate attention at PVH.”

G-III has deep relationships with PVH, holding licenses for women’s Calvin Klein apparel in North America and Tommy Hilfiger men’s and women’s out-erwear and luggage.

The Bass business will be organized under G-III’s Wilsons Leather division, which operates about 150 stores, mostly in outlet malls. Kristin Burrows, president of Bass, will report to Bill Hutchison, presi-dent of Wilsons Leather.

The creative and sourcing teams at Bass will remain headquartered in New York, but other functions like retail opera-tions and warehousing will be consolidat-ed at Wilsons Leather’s headquarters in Minneapolis, said Goldfarb.

In Bass outlet stores, about 65 percent of sales are in footwear and 35 percent are in apparel and accessories. PVH will retain the Bass men’s apparel business, under license from G-III, which is also distributed in wholesale accounts such as J.C. Penney and Bon-Ton Stores. Goldfarb said he expects to sign new Bass licenses in additional categories.

“For the next year, we’re going to shore up the underpinning of the busi-ness and make sure it’s fueled for growth,” said Goldfarb. “We know we can improve on dollars per square foot gen-erated, and we think we can grow the wholesale business quickly.”

PVH will use proceeds from the deal to make additional debt payments in 2013. Despite the sale, PVH reaffirmed its earn-ings per share guidance of $7 for the full fiscal year, on a non-GAAP basis. For the current third quarter, EPS is forecast at $2.25, up from prior guidance of $2.20.

PVH expects the deal to be 5 cents per diluted share to its fourth-quarter earn-ings, on a non-GAAP basis, and about 15 cents per diluted share on an annual basis going forward. PVH said it will incur an approximately $20 million pretax loss in connection to the sale of the Bass assets.

G-III expects the acquisition to be about 10 cents per diluted share to fully diluted net income for the fiscal year ended Jan. 31, but accretive thereafter on an annual basis.

Men’s WeekMW4 WWD THURSDAY, OCTOBER 3, 2013

Let It Rip

Balmain’s wool blazer, Hugo’s wool shirt and

BLK DNM’s cotton and spandex denim jeans.

Saint Laurent’s wool jacket, T by Alexander Wang’s wool sweater and Baldwin Denim’s cotton denim jeans. Stetson hat.

Grunge rocker is one of the main inspirations for denim companies as ripped, distressed silhouettes and skinny black jeans are the key looks of the season. — ALEX BADIA

PHOTOS BY RENIE SALIBA

Men’s Week MW5WWD THURSDAY, OCTOBER 3, 2013

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BLK DNM’s leather vest, Marc Jacobs’ wool sweater, Seven For All Mankind’s wool shirt and DL1961’s cotton denim jeans.

Costume National’s wool blazer, AG Adriano Goldschmied’s wool shirt, Junk Food’s cotton T-shirt and Hudson’s cotton denim jeans. Frye boots; Stetson hat.

Prada’s wool coat, The Innercity Raiders’

cotton hoodie, Public School’s wool shirt and Denim & Supply Ralph Lauren’s cotton denim

jeans. Raif scarf; Saint Laurent boots.

Lanvin’s leather jacket, Dries Van Noten’s wool

sweater and J Brand’s cotton denim jeans. Saint

Laurent boots.

Surface to Air’s velvet blazer, Craft Atlantic’s wool sweater and Nudie Jeans’ cotton denim jeans. Marc Jacobs belt; Raif scarf.

Men’s WeekMW6 WWD THURSDAY, OCTOBER 3, 2013

by ARNOLD J. KARR

THE AIR at the top of the men’s denim market is getting thinner, pushing fashion vendors to both keep a close eye on their prices and offer more bang for the pre-mium buck.

Retailers and brands looking down the road to 2014 are working harder to make sure that anything billing itself as “premium” can justify that designation. They’re pricing their products more com-petitively in light of heavy promo-tions leading up to and since last year’s discount-driven holiday season, moderation in the price of cotton and a trend towards trou-sers among fashion customers.

That doesn’t translate into an exodus from higher-end products. But in both men’s and women’s apparel, companies are taking note of a new level of discretion among consumers about their fashion purchases as spending has shifted in favor of higher-tick-et items and durable goods.

“In general, men are wanting fewer, better things,” said Matt Baldwin, chief executive officer of Baldwin Denim in Kansas City, Mo., who operates both whole-sale and retail businesses for the brand as well as two retail stores under the Standard Style moni-ker. “If you’re going to pay top dollar for a jean, or any fashion product, it’s got to have some-thing very special to justify it.”

Although obviously invested

in his own brand at Standard Style, he’s stocked plenty of oth-er lines. “But in recent seasons, I’ve brought the number of jeans brands down from something like 30 to about three. Just like the customer, it’s been a story of few-er, better lines. Specialty stores are trying to slim down their as-sortments because they don’t want to cannibalize their sales.”

Men’s jeans sales in the U.S. grew slowly in the 12 months ended in August, adding just 0.8 percent in dollar terms to reach $5.8 billion from $5.75 billion in the compa-rable prior-year period, according to figures provided by The NPD Group in Port Washington, N.Y. And the growth came exclusively from higher average prices, which expanded 2 percent to $26.64, as units declined 1.1 percent to 217.8 million from 220.2 million.

All the growth came from jeans priced between $25 and $75, NPD’s data show. Jeans in the $25 to $49.99 category were not only the largest segment covered by NPD, but also showed the highest level of growth by far, advancing 6.4 per-cent to $2.51 billion, while jeans in the $50 to $74.99 bracket picked up 1 percent to hit $840.4 million.

Jeans under $25 declined 1.1 percent to $2.06 billion, while those at the highest level moni-tored by NPD, $75 and above, con-tracted dramatically, shedding 19 percent to $381.9 million.

The shifts in pricing are sup-ported by those in distribution

channels: Specialty stores contin-ued to lead in men’s denim market share, with 27.6 percent, but, like department stores, national chains and especially manufacturer-owned stores saw declines in their shares during the 12 months that ended in August. Only two channels saw increases — off-price stores and mass merchants, which grew 1.4 and 0.6 points, respectively, to 10.6 and 16.7 percent of the market.

Much of the higher-end men’s fashion market is moving towards jeans that are ripped, torn, de-stroyed and otherwise distressed, essentially reviving grunge-rock influences of a generation ago. But that’s at odds with another, longer-term trend in the men’s market, that of the multipurpose, day-into-night “neat jean” that can be either dressed down with a knit or chambray top or dressed up with a sport coat and well-pressed broadcloth shirt.

Baldwin Denim’s Baldwin, among last year’s class of GQ’s Best New Menswear Designers and now involved in a limited-edition col-lection with Gap, believes that the market has moved past its former focus on “fashion-y, heavily brand-ed pocket” jeans into a phase when, at a variety of price points, “custom-ers are looking at the quality of the textile and the fit, the quintessen-tial platforms right now.”

Baldwin’s men’s jeans assort-ment is available in four fits — slim, straight, a hybrid of the two and a straight leg with a drop yoke. “We

haven’t seen much of a shift in fit,” he said, “but we do see that guys want softer jeans. They’re tired of breaking down their jeans forever.”

In addition to a men’s assort-ment within its Mavi collection, Mavi U.S. offers 34 Heritage, which is specifically geared to a more mature customer with distri-bution focused on specialty stores. The brand is carried in 530 spe-cialty store doors and is available in the U.S. and Canada only.

“You won’t see ripped and dis-tressed jeans in 34 Heritage like you would in Mavi, and there’s less whiskering,” said Ardie Ulukaya, senior vice president of Mavi U.S. “We’ve positioned ourselves to be the ‘denim solution for the discern-ing man’ and say that our jeans go on when the suit comes off.”

For spring, the line is moving toward lighter fabrics to empha-size comfort, with virtually all fab-rics in the line weighing in at 10 ounces or less and virtually every jean in the line made with stretch.

Still, Ulukaya has seen the old-er customer gravitating towards a slimmer fit, even as younger men have more enthusiastically em-braced looser ones. The trend can be seen in the mix between 34 Heritage’s Charisma model, with an 18-inch leg and an 18.5-inch knee, and its more tapered Cour-age silhouette, which sports a 16-inch leg and 18-inch knee.

“Courage was 10 to 15 percent of the business and is now up to be-tween 30 and 35,” he said. “Within two years, I’m pretty sure Courage will be bigger than Charisma.”

Men’s Jeans Battles Intensify

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Men’s Week MW7WWD THURSDAY, OCTOBER 3, 2013

area features a number of new vendors in-cluding John Varvatos USA, Ted Baker, Dr. Martens, New Balance, Onitsuka Tiger, Fred Perry and Swims. “Shoes have been a huge growth category for us,” Drummond said. “And the space here is almost doubled. We’ve added 10 new brands and expanded the fash-ion [stockkeeping units].”

Rodbell said that, all told, this expansion and revamping of men’s is “just the beginning for us. We’re looking at expanding men’s in

more stores and are evaluating the opportu-nities now where we can make it work.” She said that where applicable, the vendors that have been added in New York will be includ-ed in the branches as well. “It’s an objective for us and [this renovation] is consistent with the blend of where we’re going,” she said.

Drummond added: “The message we want is that we are actively in the brand-acquisition mode. We have the ability to be a specialty store in a department store setting.”

our core customer and introduce new cus-tomers to the floor,” he said.

Outside of denim, the floor highlights updated classic merchandise on one side and modern collections on the other. In the rear of the floor is an expanded Black Brown 1826 department, the private brand designed by Joseph Abboud. “We’ve dou-bled the real estate for Black Brown,” Rodbell said. “And we grew our classic grid as well,” Drummond added. “So this is ad-ditive. It’s very important for our brand and our DNA.”

The floor has a loftlike feeling and the windows to the outside have been exposed, allowing natural light to spill in. The open feeling and the metal and wood displays are designed to provide a “comfortable, modern experience,” Drummond said. “We have the opportunity to create lifestyle messages now.” The number of mannequins on the floor has been tripled in order to offer inspiration to the men’s customer. “The loft environment creates a modern feel to the floor and is the mood we wanted to get across,” Rodbell said.

The newly added vendors with shops on the floor are John Varvatos Star USA, G-Star, Rogue State, Vince Camuto, Seven Diamonds, Victorinox, Bruun & Stengade, DKNY Jeans, Levi’s, Dockers Alpha Khaki and Guess. True Religion, Grayers, Boss Green and Boss Orange have also been added. Vendors who received new shops in the update are Polo Ralph Lauren, Nautica, Lacoste, Calvin Klein, Perry Ellis, Kenneth Cole, Buffalo David Bitton, Lucky Brand, Superdry, Bench Penguin and Puma.

“We took our core brands to a whole new level,” Drummond said. He pointed to the “stealth shop” from Calvin Klein, a design that made its debut here, as an example, as well as the 30 percent more space that has been added to the Polo shop.

There’s an “active zone” on the floor as well, which is housed next to denim and of-fers brands including Under Armour, Puma and Superdry.

Rodbell said since the floor was converted to men’s, the com-pany has experienced “tremen-dous growth” and the revamp is still being tweaked. Specifically, Drummond said John Varvatos Star USA and Rogue State have been “phe-nomenally successful right out of the gate.”

Ironically, Rodbell said her office had been located near where the Calvin Klein shop is now when she was a merchant at Lord & Taylor. In the back right hand cor-ner of the floor, the former office of the store’s president is being used for a luxe of-fering of Black Brown. The fireplace, wood paneling and flooring from the office have been retained and serve to showcase the higher-priced merchandise. Rodbell said the luxe end of the line continues to grow in importance and the store has plans to build on it in the future.

Nestled near the escalators is an area where L&T will showcase up-and-coming or trending brands. The area includes an espresso machine, video screens and is designed as a “pausing point for custom-ers,” Rodbell said. “This is an assortment of unique, specially curated items that we will continue to keep fresh.” Some brands are carried only in this area, such as Mads Nørgaard and New Balance shoes, and others have been pulled from elsewhere in the men’s store.

The 10th floor has been similarly up-dated with an airy design and a lot more mannequins. Furnishings is at the front of the floor in nearly triple the space it had on the main floor. “And we’ve added to the fashion assortment,” Drummond said, with additions such as Vince Camuto, Ted Baker and John Varvatos.

“We also saw a large opportunity to expand Hugo Boss,” he said, noting that the space has been doubled and a new shop installed. Other additions include Pure; Strellson, a luxe Swiss brand that

has been a star at The Bay stores and has been added exclusively to L&T in the States, and Bugatti. All of these brands are housed in new shops.

Within the expansive tailored-clothing department, Drummond said the “modern part of the business” has been expanded. There’s a sizable assortment of Tallia Orange, for example, that he said has been “flying” out of the store since it was added.

L&T is also jumping onto the lucrative shoe bandwagon with a new, larger depart-ment off the elevators on the 10th floor. The

LORD & TAYLOR PUTS FOCUS ON MEN’S WEAR{Continued from page MW1}

The luxe offering of Black Brown 1826 is housed in the former president’s office.

Wayne Drummond and Liz Rodbell

The trend area.

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