NOLAN QUITS ANNE KLEIN/3 FEDERATED’S RAG TIME/3 Women’s ...

[Pages:16]WWDTHURSDAY NOLAN QUITS ANNE KLEIN/3 FEDERATED'S RAG TIME/3 Women's

Wear

Daily

? The Retailers'

Daily

Newspaper ?

April

3,

2003

Vol.

185, No. 67

Retail $2.00

TShhrinekWageWbyDCPagLIt.ne6isgsiodtrey:

Sportswear

Short Take

LOS ANGELES -- Celebrity stylist Magda Berliner had a hit on her hands with her fall show, which she called "Movin On." She did looks that blended vintage elements with street style. There were, for example, thin wool coveralls worn with a black T-shirt, a zebra-print minidress with silver mesh insets and a laser-cut ponyskin jacket. Here, her micromini look. For more L.A. fashion, see pages 4 and 5.

Retail, Luxe Sectors Battle Shock Waves From War and SARS

War and disease are coalescing to create an ever-darkening cloud over the luxury and retail industries.

Growing concern over the deadly pneumonia called Severe Acute Respiratory Syndrome, or SARS, has disrupted industry travel to the Far East, while the epidemic and the war in Iraq are hurting consumer confidence and travel flow in Asia, which fuels some 30 percent of luxury sales. The disruption caused luxury goods analysts on Wednesday to revise their already-downbeat

See Industry, Page7

PHOTO BY GIOVANNI GIANNONI

2

WWD, THURSDAY, APRIL 3, 2003

TM

A weekly update on consumer attitudes and behavior based on ongoing research from Cotton Incorporated

YOUNG AT HEART

Denim still strikes a chord for the 40+ woman

Though manufacturers obviously aren't out Gascoigne, director of marketing and client care.

to make jeans shopping seem like an episode of "Also, the trend of having children later in life

Fear Factor, more often than not the dressing room means that there are lots of mothers in their 40s

feels like a torture chamber for women over 40.

with young children. Their lifestyles are busy and

Why do so many 40+ women feel like it's so active, and comfort is a key component in getting

difficult to find a pair of jeans? Well, genes. Most dressed in the morning. French Dressing is cut for

women this age often have different

their figures."

bodies than their twenty-something

Women actually could get a perfect fit

counterparts. Gravity, childbirth and a

if they took their jeans to a tailor for

schedule that leaves little time for the

alterations, but it's unlikely that would

gym often add up to a tummy bulge,

happen. The Monitor reports that only

wider rear and thicker thighs. If jeans fit

8% of women `frequently' have clothes

the rear and legs, they gape at the waist.

altered, and 25% `sometimes' do.

If the waist fits, the legs are constricted.

Of course, there is another option:

Though it would be easier to yank on

custom jeans. We're not talking about a

a tunic, 40+ women want to continue

couturier or even a tailor. Today, Levi's

wearing the bottoms they fell in love

and Land's End offer custom jean

with as teens. According to Cotton

programs for those who can't find exactly

Incorporated's Lifestyle MonitorTM, 65%

the right fit or style they want.

of 40+ women have positive feelings

"While Levi's makes jeans that fit all

about wearing denim. In addition, some

shapes and sizes, many of our Levi's stores

44% say they enjoy wearing denim on a regular basis, and 20% report their wardrobes are full of denim and that they love wearing it. Additionally, 74% dis-

"The 40+ woman is more concerned about comfort than being in the fashion

jean of the moment."

offer Original Spin, a custommade jeans program which allows people to create jeans from scratch," says Rachele Bakken, spokesperson. "Original Spin is an

agree with the statement, "Jeans are in my past, not my future."

Julie Lambert ?Cambio Jeans

additional way a woman can get the fit she is looking for."

"I desperately want to wear a pair of blue jeans,"

Levi's Original Spin gives customers 12,000

says Heidi, 42, a New York City mother of two. She different jeans combinations. Associates arrange

works out regularly and watches her diet, but an in-store fitting at participating Levi's stores.

doesn't fit into her old brand. "I feel I have too big a The measurements and style are entered into a

rear in them. I don't want to buy a really big size. computer that suggests a prototype trial jean for

My ideal jean is fitted in blue denim."

the customer. The customer can then explore

Enter Cambio jeans, a stretch denim that fits a variety of options (looser/tighter, longer/shorter,

without the low-rise that's seemingly everywhere. fabric/texture, etc.) to individualize his or her

"The 40+ woman is more concerned about personal style preferences. Levi's Original Spin

comfort than being in the fashion jean of the costs approximately $70 per pair plus tax and

moment," says Cambio's spokesperson Julie Lam- shipping, if shipped to home or office. Pants are

bert. "We use both one-way stretch and a two-way delivered within two to three weeks.

`bi-stretch' fabric for comfort. The bi-stretch makes

The Land's End program is done via catalog or

women feel thinner and has almost a girdle effect." the Internet. Customers submit their measure-

Cambio jeans come in three different rises?high, ments, and indicate the color and style jeans they

medium and moderate low-rise. "Our stores want. The new pair, which costs $54 plus tax and

tell us that once a customer tries on a pair of shipping, is delivered in three to four weeks.

Cambio jeans, they can't believe how well they fit,"

French Dressing's Donald Johannesson, designer

Lambert says.

and director of merchan-

Diana Salen, who, with husband Jeffrey,

Feelings about wearing denim

dising, says today's 40+ woman isn't like the

owns two Manhattan- I enjoy wearing denim on a regular basis

44% womanofpastgenerations.

based Diana & Jeffries My wardrobe is full of denim and I love wearing it 20% "Some are tiny as dolls

boutiques, backs that up. Positive feelings about denim

65% and, having maintained

"Women are thrilled

a healthy lifestyle, are

with Cambio," says Salen. "I have customers who, as trim as their teenage daughters," he says.

until trying them, couldn't find jeans because most "Others have a more ample figure and look

are cut too narrow or too low. They're so excited for comfort of fit but also seek fashionable

with Cambio, they come back and buy them in separates in coordinating colors and fabrics.

more colors. I've had women come in and buy four Remember, she was the girl setting the trends

or five pairs at a time. And they sell for $148.That's back in the '70s and '80s?and now she is setting

how much women like them."

the trends for herself again."

These jeans must really cast a spell because,

according to the Monitor, the average price a woman over 40 would pay for a good-fitting pair of jeans is $27.84.

A more affordable option are the denim bottoms by French Dressing Jeanswear, which retail for about $75.

"Women do not want to dress like their daughters, but they still want to be fashionable, follow the trends and feel young at heart," says Mildred

This story is one in a series of articles based on findings

from Cotton Incorporated's Lifestyle MonitorTM

tracking research. Appearing Thursdays in these pages,

each story will focus on a specific topic as it relates to the

American women's wear consumer and her attitudes

and behavior regarding clothing,

appearance, fashion, fiber selection and

many other timely, relevant subjects.

?

WWDTHURSDAY Sportswear

GENERAL

4 FASHION: Los Angeles Fashion Week got under way with an unusually large press contingent and a good number of valid, interesting shows.

1 Goldman Sachs in London downgraded its stance on the European luxury sector due to concerns over an extended war in Iraq and the deadly SARS virus.

3 Federated Department Stores and Tarrant Apparel Group have forged a distribution agreement to distribute American Rag CIE sportswear.

3 Anne Klein designer Charles Nolan has quit his fashion career to join the presidential campaign of Governor Howard Dean, Democrat of Vermont.

6 The WWDList: Shrinkage, or retail inventory loss caused by theft, administrative error or vendor fraud, as ranked by type of store.

16 EYE: Taking the notion of "personal shopper" up a notch...Movie making with 19-year-old Nutsa Kukhianidze...Reese's loving cup.

Classified Advertisements ..................................................................14-15

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In Brief

q CHEERS FOR BRAVO: Rose Marie Bravo, chairman and chief executive officer of Burberry, has been elected to the board of Est?e Lauder Cos. Leonard A. Lauder, Lauder chairman, said in a statement: "We're very pleased. Her extensive experience and extraordinary accomplishments as a retail leader and a brand builder will be an asset to the company and its stockholders." Her addition brings the number of board members to 10. Bravo, 52, joined Burberry in 1997 and is a member of the board of Burberry Limited. Prior to joining Burberry, Bravo was president of Saks Fifth Avenue from 1992 to 1997. From 1974 to 1992, she held positions of increasing responsibility at R.H. Macy and Co., culminating in her 1987 to 1992 tenure as chairman and ceo of the San Francisco-based specialty store, I. Magnin.

q FERRAGAMO TO ATLANTA: Salvatore Ferragamo will open a boutique in Lenox Square mall in Atlanta next Tuesday. It's the Italian luxury firm's first store in the market, though the company does sell to such retailers as Neiman Marcus and Saks Fifth Avenue in the area. Designed by New York architects Janson Goldstein, the 2,000-square-foot space incorporates the new worldwide Ferragamo store concept, currently seen at Ferragamo stores in SoHo and in the Americana Manhasset shopping center. This summer, the company plans to open an American flagship on Fifth Avenue and 52nd Street. The Atlanta shop will feature natural walnut and stone contrasting with high tech Corian and metal, and suspended forms and fixtures. Ferragamo has 102 freestanding stores worldwide

q COLUMBIA DEAL DONE: Outdoor apparel and footwear provider Columbia Sportswear Co. completed its acquisition of Mountain Hardwear Inc. for $30 million in cash and assumption of $6 million in debt. Mountain Hardwear will maintain its name and brand and operate as a stand-alone subsidiary of Columbia. Mountain Hardwear will continue to develop its presence in high-end specialty stores and will expand distribution internationally as well. The firm hopes the strategy will build sales to over $100 million in the next five years, according to ceo Tim Boyle. Based in Richmond, Calif., 10-year-old Mountain Hardwear designs and develops technology-driven equipment and apparel geared to the outdoor market. Last year, it recorded unaudited revenue of $31.4 million. On Jan. 30, Portland, Ore.based Columbia reported 2002 revenue of $816 million.

WWDStock Market Index for April 2

Composite: 103.68 Broadline Stores: 105.11 Softline Stores: 97.93

3.04 Vendors: 103.24

1.59

3.32 Textiles: 92.61

-1.66

2.98

Index base of 100 is keyed to closing prices

of Dec. 31, 2002.

WWD, THURSDAY, APRIL 3, 2003

3

Federated to Roll Out Rag Anne Klein's Nolan Quits

By David Moin

NEW YORK -- Federated Department Stores Inc. is adding American Rag to its stable of private brands sold nationally.

The plan is to push the brand's casual sportswear, outerwear, jeans and vintage looks hard right out of the gate, since it's really only recognized by the most fashion savvy of consumers, not the general population. According to officials, American Rag will be in 100 Federated doors starting in August and it could bring $100 million in retail sales within two years. It will be sold inside juniors and young men's departments at Macy's, The Bon Marche, Burdines, Goldsmith's, Lazarus and Rich'sMacy's, but not at the Bloomingdale's division, which does not emphasize juniors.

On Wednesday, Federated and Tarrant Apparel Group announced a multiyear distribution agreement, whereby Federated has the rights to sell American Rag CIE casual sportswear exclusively in the

American Rag's vintage styles and denim looks for Federated.

U.S. and Canada, confirming a WWD report that day.

"This is a big one for us," said Terry Lundgren, Federated's president and chief executive officer, in an interview. "Usually when we launch a new branded resource, it's not that aggressive out of the box. But our divisions feel so good about American Rag that

they've been quick to jump on it." As reported Wednesday, Tar-

rant has just become American Rag's new co-owner, obtaining 50 percent of the voting rights and slightly less in equity. Tarrant, a manufacturer of private and branded goods, formed a wholly owned subsidiary called Private

Continued on page 13

Shrinkage Chills Stores' Bottom Line

By Sharon Edelson

NEW YORK -- Disaffected employees were the main cause of unexplained inventory loss, or shrinkage, which carved a $31.3 billion chunk out of merchandise stocks in 2001, according to the University of Florida's latest National Retail Security Survey. That's 1.7 percent of the $1.845 trillion in sales recorded that year, or the equivalent of the entire gross domestic product of Vietnam.

While the level of shrinkage has remained fairly constant over the last decade, it was actually lower in 2001 (1.7 percent) than it was in 1991 (1.79 percent), the first year the survey was published.

Shoplifting has traditionally been the biggest cause of lost inventory, but, according to Richard Hollinger, PhD and director of the Center for Studies in Criminology and Law at the

University of Florida, a more alarming trend has emerged: employee theft.

In 2001, employee theft accounted for nearly half of all shrinkage -- 48 percent -- compared with 32 percent for shoplifting. Other sources of inventory loss are administrative error, 15 percent, and vendor fraud, 5 percent.

"All the technology such as surveillance cameras and electronic article surveillance (EAS) tags seem to be having some effect on shoplifting," said Hollinger. "Most loss prevention directors are concluding that there's only one other door that this merchandise can be going out and that's the back door."

According to Hollinger, low salaries are to blame for the low morale and lack of loyalty among sales associates and managers, which makes them

more apt to steal or look the other way when others steal. "The shift to mass merchandising, or the `Wal-Martization' of retailing, means low overhead and lower wages," he said. "The churn is remarkable. A lot of chains have over 100 percent turnover annually."

However, Daniel Butler, vice president of retail operations for the National Retail Federation, took exception with the salary issue. "Some people go to work for a retailer with the intent of stealing," he said. "They're only there for the holiday season to rip off the store. If you talk to a lot of retailers, some of their highestpaid, best associates have stolen."

Rather than examine what causes employees to steal, Hollinger looked for common characteristics among stores with low rates of employee theft.

Continued on page 6

Obituary

Hilda Kirschbaum Gerstein, 92

NEW YORK -- Hilda Kirschbaum Gerstein, former vice chairman and president of popular-priced women's apparel retailer Petrie Stores Corp., died Sunday at age 92.

Gerstein died at Mt. Sinai Hospital here of pneumonia following a long illness, said her daughter, Nancy Novogrod, editor in chief of Travel + Leisure.

Considered Milton Petrie's number-one lieutenant, Gerstein spent her entire career with Petrie Stores. Starting as a stock clerk, she went on to become one of the highest-ranking women in retailing, becoming president of Petrie Stores when the chain went public in the late Sixties. She later served as vice chairman, retiring from the business in 1995 at the age of 84.

"She was a strong woman in business even before women achieved that kind of success,"

said Gilbert Harrison, chairman of Financo, the investment banking firm. "She loved merchandising, she loved retailing and she was a power in her time because Petrie's was the largest and most profitable specialty retailer, and generated nothing but cash."

Petrie's agreed to sell its $1.4 billion retail operation to an investor group led by Verna Gibson and E.M. Warburg Pincus and Co. for $190 million in August 1994, two months before Milton Petrie died. Petrie filed for Chapter 11 bankruptcy in 1995, and over the next few years sold many of its divisions.

Born in Tarnapol, Austria, Gerstein came to the U.S. at age 3 and settled with her family in New York. They later moved to Cleveland, where Gerstein graduated from high school. A bright student, she won a scholarship to Western Reserve. The summer before she was to matricu-

late, she went looking for a job at Petrie's and got in a long line. She went around another way, got in at the front of the line and was hired as a stock girl .

In a WWD interview with Milton Petrie in 1986, he said, "Hilda was 16-years old when she walked into my store looking for a job. I hired her as a bookkeeper and stock girl for $10 a week. She's been president, then vice chairman for the past 25 years and earns $350,000 a year. You can look it up in our proxy." Petrie's own salary at the time was only $150,000, although he was worth $940 million.

"She would work around the clock. She'd fly all the time, and also got involved in Milton's philanthropic endeavors," said Novogrod.

Her husband, Max Gerstein, died 20 years ago. In addition to her daughter, Gerstein is survived by two grandchildren.

To Hit the Campaign Trail

By Eric Wilson

NEW YORK -- The war against Iraq claimed its first fashion victim on Wednesday, as Anne Klein designer Charles Nolan responded to the tense state of world affairs with a political statement of his own: "I quit."

Nolan was the seventh designer to take on the helm of the Anne Klein brand since the sportswear legend's death in 1974, doing what retailers called an admirable job of pumping some life back into the brand -- one of the best known in America -- during his two years there. That recognition made his resignation all the more unusual, considering he wasn't fired, doesn't have another big job in the wings and doesn't have immediate plans to launch his own label.

Instead, Nolan wants to get into politics.

"The world is a big mess and I'd like Howard Dean to be president," said Nolan, who

"I am totally supportive of our soldiers,

but I think we should have avoided this

war and I feel that this administration

" did nothing to avoid it.

-- Charles Nolan

plans to dedicate his post-fashion career to the presidential campaign of the Vermont governor, a Democratic candidate for the 2004 election.

"I'm going to take some time off, garden and work on Howard's campaign," he said. "It's time. I'm tired. It's been fun and I've had a blast. I love making clothes, but we have somehow got to make some changes in the world. You can't watch the news and think things are not going the wrong way. I am totally supportive of our soldiers, but I think we should have avoided this war and I feel that this administration did nothing to avoid it."

Although Nolan's departure came as somewhat of a surprise, the company was quick to name a replacement, promoting Michael Smaldone to vice president and chief design officer. Smaldone joined Anne Klein, a division of Kasper ASL, six months ago as a vice president to direct the AK Anne Klein betterpriced collections. He had previously been creative director at Elie Tahari and before that had designed for Banana Republic.

"I've been around this business long enough to be comfortable with the fact that creative people have different needs and desires that they want to fulfill," said John D. Idol, chairman and chief executive officer of Kasper, which is currently being shopped to prospective buyers that include a team of the company's management. "I'm very happy for Charles, personally, because he's one of the best people I've had the opportunity to work with and you can see we're very proud of everything Charles did to contribute to our success. We're also very encouraged with Michael Smaldone because he's done a great job of repositioning

AK. We think he will very easily step into this role."

The Anne Klein brand had a wholesale net sales increase of 13.2 percent in 2002, Idol said, attributing the gains largely to Nolan's input.

Nolan's clean and functional designs had a lot to do with improving the perception of the brand, including the well-timed placement of a fireman's jacket in a post-9/11 collection that underscored Anne Klein's American heritage. He also was largely involved in selling the collection with a heavy tour of personal appearances and a lot of direct contact with customers. That was a skill he learned working with Linda Allard at Ellen Tracy for 11 years and even earlier as the designer of Blassport under Bill Blass.

The schedule took a toll on his personal life, however, as Nolan hasn't taken a vacation for much of that time, leading him to the decision to step down from the company on a high note, much like many longtime ceo's who have resigned from demanding positions on Wall Street or from media companies in recent months.

As for his political ambitions, Nolan said he'll be starting out slowly, campaigning for Dean from his homes in Manhattan and on Fire Island, which he shares with his partner, Andrew Tobias, a financial writer and the treasurer of the national Democratic National Committee.

"I've always raised lots of money for the party and I still do," Nolan said. "I worked very hard on the Gore campaign and I dressed Tipper for her appearances. I really just felt that it's time for something different. Sometimes, you've got to take a risk."

RAG PHOTOS BY JOHN AQUINO

WWD, THURSDAY, APRIL 3, 2003

4 Los Angeles Collections

Magda Berliner

L.A.: It's

David Cardona

Twelfth Street by Cynthia Vincent

Magda Berliner: Everybody's a slash in L.A. You've got your model/actress, the requisite writer/director and who could forget the stylist/designer like Berliner, who, over the years, has offered up everything from red-carpet zingers to bedazzled T-shirts.

Called "Movin On," the collection of 15 looks set out to meld vintage with new and craftsmanship with technology, then put it all together in an unexpected way that screamed cool. Berliner's never been one to follow trends, and her line's distinctive style reflects her own forward thinking. She began by carrying over several themes from seasons past, including metal mesh, jumpsuits and leggings.

With a delicate-looking silver mesh, she added insets to a zebra-print minidress and crafted a cape trimmed with strings of pearls and bronze geometrics. There was a pair of ivory whisper-thin wool coveralls worn over a black T-shirt. The leggings were nice to touch and looked just right paired with a laser-cut ponyskin jacket and

matching flat boots. Even a suit in her hands managed to look skewed, its cool gray offset with bits of black eyelet, and pants cropped short. It's just that sort of quirky sentiment that rang true as she stepped out from backstage to offer a wave, a pixie with silver taps on her shoes and a confident smile -- or, in other words, a slash.

David Cardona: Lingerie may be a woman's best-kept secret, but on Tuesday night Cardona made its most intimate details his focal point. As a racy monologue from Jane Fonda's cult classic "Klute" filled the darkened tent, his stage was set for a more adventurous ride than some of his well-heeled clientele may be used to. But, true to form, he tempered the 45 looks with a little bit of naughty and a little bit of nice, to mostly good results.

A gray wool crepe pantsuit was sharply tailored, and there were also lambskin pencil skirts and a bevy of little black dresses. All possessed those intricate twists and details Cardona is known for -- a slip of satin rib-

bon here, a little pintuck or corset-like stitching there. Even his new shoe collection that bowed on the catwalk offered a perfectly practical pointy-toed pump with a heel detail mirroring that of a G-string.

For evening, there were some great sequined pieces, including a slouchy jacket worn with nubuck cargo pants and a swingy cocktail dress. He also dabbled in a marble-print silk that worked beautifully as a ball skirt paired with a high-collared blouse, though it seemed a bit much in shorter, more casual variations.

There was nothing, however, undercover about his finale piece, a burgundy leather coat whose open back laced up, then turned into a train. It was just the kind of drama his longtime friend and client Janet Jackson, who sat front row cooing, "I love it," looks to him for. Now, that's Hollywood.

Twelfth Street by Cynthia Vincent: After a tumultuous couple of years of failed business partnerships, Cynthia

WWD, THURSDAY, APRIL 3, 2003

5

t's Showtime

Peter Cohen

Frederick's Steps Out

Perhaps taking a cue from that other lingerie company, this was the third season Frederick's has joined the fashion-week game. Freshly emerged from bankruptcy, the half-century-old lingerie giant has finally reached its sexy, sultry stride. On the heels of a Bra Art Auction to benefit a charity, featuring designs by T?a Leoni, Lucy Liu and Mena Suvari, to name a few, models sailed down the catwalk stirring up excitement not just because of their flawless bodies. It also was because the skimpy bras and thongs peeking out from under luxuriously patterned Asian kimonos, maraboulined teddies and feminine, sporty, cropped tanks and boy-leg bottoms seemed to transcend the chain's moderate price points. Other highlights included a peach satin and lace bikini, a white satin corset with a narrow rectangular-shaped plunging neckline and a black lace bra and thong combo lined with a hint of white ribbon. The kicker? A sash-wide black lace pareo that made mile-long legs look even longer. That said, the now two-season-old denim line with fuchsia Frederick's emblazoned on the back pockets of mostly faded indigo doesn't appear bound for hip derrieres anytime soon.

The IOC Action

Frederick's Asian inspiration.

Vincent is back on her feet with a new, focused contemporary collection named after the street she grew up on in East L.A. Vincent didn't set out to reinvent the wheel but to make wearable streetwear for a grown woman, and she accomplished just that. She tapped the trends just enough with slim trousers that were banded at the ankle, washed satin bomber jackets (some with a floral embroidery along the right wrist and hip), paper-thin knit tunics and kneelength pencil skirts in black, charcoal or chocolate. Standouts included a vanilla nylon cargo vest, slim black flannel trousers and a modern take on the old Members Only windbreaker. A few guys walked out in case anyone needed a reminder of all the masculine references, including the women's flat-front pants shown with a wallet chain, the tailored gas-attendant jumpsuits or the pinstriped suit jackets paired with trousers scrunched into combat boots.

Peter Cohen: Actress Maria Conchita Alonso sat front row, fresh from her television appearance on "I'm a

Celebrity, Get Me Out of Here" which brought to mind another thought: I'm a fashionista, get me out of here. Cohen's target older customer wants classic, wearable options but is she relegated to only muted colors and boxy designs? To be fair, there were plenty of luxe fabrics to suit the South African designer's loyal clientele frequenting his one-and-a-half-year-old boutique in Hancock Park. Variegated sheared rabbit fur, alpaca, leather and Ultrasuede coats reigned among them, showing the designer's talent for construction. Clearly, coats are Cohen's forte. Other standouts included a green bias crushed-velvet sheath worn under a brown Ultrasuede cape, a beige cracked-leather coat over a beige rainproof jacket and black silk pants and a black rabbit and moir? coat. But it was the assortment of jersey dresses in black, nut-colored and ivory with too much sleeve and rain-print, slip-like dresses worn with cropped silk jackets that somehow struck the wrong notes.

Imitation of Christ's new swimwear look.

With Reese Witherspoon, Anjelica Huston, Jacqui and Gia Getty, Mena Suvari, Sheryl Crow and Owen Wilson willingly gushing for their pal on camera, Tara Subkoff's homecoming Tuesday afternoon for Imitation of Christ (she actually premiered the line at a L.A. Metro station four years ago) had all the pomp and circumstance of a film premiere. It played into the former actress' scheme of all things classically Hollywood. That included the "Star Wars" theme endlessly blasting and a "security" crew engaging in pat-downs at the door and other intentional McCarthy-like behavior (Subkoff's words) before and during the rerun of the ready-to-wear, which had debuted in New York.

New were another round of resurrected vintage looks and a sexed-up Esther Williams swimwear collection presented on teenage synchronized swimmers in the Avalon Hotel pool -- a last act that brought down the house.

The celebrating first got under way the night before, when Mercedes-Benz LA and 7th on Sixth's exec director Fern Mallis held court among the Los Angeles industry, particularly its roster showing this week, including Magda Berliner, David Cardona, Cornell Collins, Kate O'Connor and many others, at the Hollywood Canteen. "I've got four days to finish," designer Rebecca Rich explained as her reason for sneaking away from fittings in exchange for a cocktail break on a Monday night.

Reese Witherspoon, an old friend of Imitation of Christ designer Tara Subkoff, showed up at the Avalon Hotel pool with only one concession to fashion: a mini version of the new multihued Louis Vuitton coveted spring printed purse. "I got it two days ago," she said beaming, like a proud parent (which she's apparently going to be for the second time). "This is my new thing -- the small purse. I'm going to wear it with everything, even though it's stuffed to the gills." Indeed, Witherspoon couldn't even close it, it was so overstuffed with cell phone, etc.

It was Witherspoon's very first Imitation of Christ show. "I generally don't go to fashion shows," she said. "And every time Tara has shown in New York, I was somewhere far away, shooting. But I did want to show up to support her. And I have to say, I'm shocked by the turnout! I'm really happy for Tara.

"She and I used to be roommates in an apartment eight years ago, when we both first got to Hollywood. We were doing this movie, `Freeway,' together, and she was one of my very first friends here. I mean -- a great friend, and she still is. Anyway, she always had this fantastic style and was very artistic. Everyone kept telling her she had to become a designer! It's great to see her doing so well."

PHOTOS BY GIOVANNI GIANNONI AND DONATO SARDELLA

WWD, THURSDAY, APRIL 3, 2003

SOURCE: 2002 NATIONAL RETAIL SECURITY SURVEY; UNIVERSITY OF FLORIDA SECURITY RESEARCH PROJECT, DEPARTMENT OF SOCIOLOGY AND THE CENTER FOR STUDIES IN CRIMINOLOGY AND LAW. PREPARED BY RICHARD C. HOLLINGER, PHD, DIRECTOR AND JASON L. DAVIS, GRADUATE RESEARCH ASSISTANT. TO READ THE ENTIRE REPORT, GO TO WWW.SOC.UFL.EDU/SRP.HTM. REPORT SPONSORED BY TYCO/ADT FIRE & SECURITY.

6

TheWWDList

Shrinkage

Retail loss as a percentage of sales by market segment

No, it's not that part of the anatomy George Costanza was referring to in a memorable "Seinfeld" episode. Shrinkage, in retail parlance, is inventory loss caused by employee theft, shoplifting, administrative errors and vendor fraud. Loss prevention experts put the total shrinkage dollar amount for 2001, the last year for which data is available, at $31.3 billion or 1.7 percent of the total $1.845 trillion in annual retail sales. Ultimately, it comes off the bottom line and charges are passed on to consumers.

1

JEWELRY STORES

2.24 percent The average jewelry theft is $1,500, compared with $85 for the average retail shoplifting incident, according to Integrated Assurance Services, which provides jewelers block coverage to retailers.

10

SPORTING GOODS STORES

1.68 percent Handheld radios, sunglasses and apparel are the most popular items for theives in sporting goods stores, where 32.1 percent of shrinkage is due to shoplifting.

2

OTHER APPAREL STORES

2.14 percent The rates of employee theft and shoplifting are above average for "other apparel stores," a catchall phrase that applies to stores that don't fit into the men's, women's or children's rubric.

11

DEPARTMENT STORES

1.67 percent Department stores are a favorite target for shoplifting, which accounts for 36.4 percent of shrinkage. High job turnover, part-time and seasonal help is associated with employee theft.

3 4

CHILDREN'S APPAREL STORES

2.01 percent Shoplifting accounts for 25 percent of shrinkage of children's apparel, well below the average rate of 32 percent. More alarming is employee theft, a source of 55 percent of lost merchandise.

WOMEN'S APPAREL STORES

2.01 percent To combat employee theft and shoplifting, retailers are asking their apparel suppliers to attach ever-more sophisticated paper hangtags and woven labels that incorporate antitheft sensors.

12 13

SHOE STORES

1.67 percent Despite sophisticated loss prevention technology that can be incorporated into shoes and activated by stores with security systems, 51.2 percent of missing footwear walks out with employees.

SUPERMARKETS/GROCERY STORES

1.5 percent Theft by workers accounts for 59 percent of losses at supermarkets and grocery stores. Shoplifters steal cigarettes, meat and cosmetics, while theft rings take baby formula and batteries.

5

DRUG STORES

1.91 percent With small, easy to hide products such as cosmetics and hair accessories, drug stores have the highest level of shoplifting, 32 percent. This retail sector also has the most vendor fraud, 9.6 percent.

14

MEN'S APPAREL STORES

1.19 percent When inventory losses occur at a men's apparel retailer, chances are it's an inside job. Employees are to blame for 57.5 percent of merchandise missing from the sales floor.

6

DISCOUNT STORES

1.9 percent Discounters have had security devices embedded into shoes and electronic article surveillance flashers placed on jeans to stop shoplifters. Still, 52.1 percent of inventory loss comes at the hands of employees.

15

CONVENIENCE STORES

1.09 percent Convenience stores are a hotbed of employee theft, which is responsible for a staggering 82.5 percent of the retail sector's inventory losses.

7

CARD/GIFT/NOVELTY STORES

1.85 percent Stores that sell cards, gifts and novelties are prone to administrative error, which accounts for 17.9 percent of loss in the retail segment. Sticky fingered consumers contribute 34.3 percent.

16

OFFICE SUPPLY/STATIONERY STORES

1.07 percent Workers pilfer pads, pens and calculators at stores, making employee theft the cause of 57.4 percent missing merchandise.

8

HOME CENTERS/HARDWARE/GARDEN STORES

1.77 percent The cost of employee theft to home centers, hardware and garden stores is $1,146 per worker.

17

BOOK/MAGAZINE STORES

0.9 percent Stores need to do a better job of bookkeeping. Administrative error, the biggest source of unexplained shrinkage, accounts for 30 percent of lost merchandise.

9

MEAN SHRINKAGE RATE (ALL STORES)

1.7 percent The average shrinkage rate of 1.7 percent in 2001 is significantly lower than the previous year's rate of 1.8 percent. In the last decade the rate has hovered between 1.69 percent to 1.95 percent.

18

CONSUMER ELECTRONICS/APPLIANCE STORES

0.74 percent Luckily, thieves haven't figured out an easy way to get refrigerators or big-screen televisions out of stores. This retail category has the industry's lowest rate of shoplifting at 20.1 percent.

The Cost of Shrinkage

Continued from page 3

Not surprisingly, he found high salaries chief among them.

"The Container Store pays people well over minimum wage, about $10 or $11 an hour," he said. "They have health benefits and child care. It's an amazing place to work.

"Their loss prevention director said she gets upset if a store has a 0.5 percent shrink rate," Hollinger continued. "This debunks the myth that retailers can't afford to pay these wages. The Container Store is the Zurich of the retail industry. It's a big city where there's virtually no crime."

While retailers are working to keep merchandise from wandering out the back door, they're also paying

attention to what's leaving through the front. Innovations such as off-site digital remote monitoring allow stores to check more locations more consistently and more frequently from a central site.

Computers using exception reporting programming can catch abnormalities in cash register reports that were previously reviewed by hand. For example, potentially suspicious transactions such as voids rung up later in the day or on a different register than the one where a purchase was initially made, are flagged.

Further out on the horizon, biometric technology will identify a person through his or her fingerprints, eye scans or voice. Stores will use fingerprints to verify the identity of check-writers and the credentials of prospective employees. For now, however, most biometric technology is still in the sci-fi realm.

Butler would like to see states adopt stiffer penalties as a deterrent against shoplifting. The crime re-

cently made national news when Winona Ryder was accused and subsequently convicted of stealing $5,500 in designer merchandise from Saks Fifth Avenue, but many stores are loath to press charges.

"A lot of the larger jewelry retailers may eat the loss rather than report the claim because if they have too many claims their insurance goes up or it becomes very difficult to get insurance," said Laurette Merusi, jeweler's block specialist at Integrated Assurance Services. "The market has shrunk. Lloyd's of London used to do a lot of insurance. Only a few carriers address block coverage now. A lot of the syndicates bottomed out after Sept. 11."

While retailers have different ways of addressing shrinkage, it's clearly a fact of life. "It's a part of doing business and it's budgeted for," Butler said. "As consumers, we need to be concerned about it because we all pay for it in the price of our goods."

WWD, THURSDAY, APRIL 3, 2003

7

Industry Reels From SARS, War

Continued from page one forecasts for the sector, with some warning that, in a worstcase scenario, it could further reduce luxury groups' profits by up to 15 percent.

Another sign of the disruption SARS is creating in the industry came on Wednesday when the Swiss government barred about 400 exhibitors from Hong Kong, China, Vietnam and Singapore from participating in the prestigious Basel World Watch and Jewelry show, which gets under way today. However, the measures do not apply to visitors who have arrived from countries reporting outbreaks of SARS, which has been spread around the globe by travelers.

The Hong Kong Trade Development Council, which represents 317 firms, said it was "disappointed and surprised" that the decree was issued after most Hong Kong exhibitors had arrived in Switzerland. It added that it had sought legal counsel on the restriction.

Several U.S. retailers already altered their travel plans to Basel because of SARS and the war. While executives from Neiman Marcus, Tourneau and London Jewelers are already there, such retailers as Saks Fifth Avenue, Mayor's Jewelers and Mayfair Jewelers are staying away this season.

Lauren Kulchinsky, vice president and fine jewelry buyer at Mayfair Jewelers, noted: "We decided against going because we felt it wasn't the wisest decision to go overseas right now. And with SARS...because there are so many different types of people that attend Basel, I didn't want to be in danger of being quarantined coming home."

SARS also is having other effects throughout the sector and at all levels. Ferragamo chief executive Ferruccio Ferragamo warned Wednesday that both the war and the epidemic will impact the industry for months ahead. "If we can get through 2003 and have sales in line with those of 2002, it will be a good thing," he told WWD as the company announced that 2002 sales fell 8.7 percent to $638.29 million from $699.5 million a year earlier.

Ferragamo said he had just returned from a trip to Asia and felt the presence of the "scary" pneumonia virus sweeping the

region. But he said that overall, he thinks the disease poses less of a threat to the industry than the ongoing conflict in Iraq.

"Certainly at the moment, the fears in Europe and the U.S. over the war are more of a concern than the virus in Asia," he said.

But retailers and manufacturers are increasingly canceling trips to the region after the World Health Organization warned travelers to avoid affected countries in the Far East unless it was absolutely necessary to go there. The World Health Organization estimates there are now 2,223 cases of SARS in 18 countries, with at least 78 deaths from the disease.

At the mass market level, WalMart acknowledged Wednesday that there has been some postponement of traveling, but no cancellations of trips, according to spokesman Tom Williams. "We

conscious of the fact of what's going on around the world, and only take trips they believe are very important," Lundgren said. "We're leaving the decisions in their hands, but Federated is following the government's lead," which, he noted, is to be mindful of world events and to be prudent on travel decisions -- although there have been no official government proclamations not to travel. Lundgren said that this time of year, there would be very little traveling for the divisions, though one exception would be Bloomingdale's buyers going to Italy or France for some home furnishings.

For higher fashion stores, such as Saks Fifth Avenue and Bergdorf Goodman, it's not really a travel period right now, and the next big round of trips to Europe will be in June for the men's wear

"Certainly at the moment, the fears in

Europe and the U.S. over the war are more

" of a concern than the virus in Asia. -- Ferruccio Ferragamo

are paying close attention to SARS and supplying all our associates with as much information as we receive it. If they have any question, they can contact our people at the home office. We have postponed some trips, but I wouldn't say we canceled anything," he said. Wal-Mart associates do much importing from the Far East, where the company also operates stores. The spokesman had no details on what trips were postponed.

Terry Lundgren, president and ceo of Federated Department Stores Inc., said, "We are not traveling to Asia. We stopped a week ago, due to the flu, and won't resume until we all get a better handle on this."

He added that personnel in Federated's Hong Kong office have also been instructed not to travel, which primarily involves going to China.

Federated Merchandising staff does travel frequently to the Far East for importing for its private brand programs, though staff from Federated store divisions also do some traveling. As far as other parts of the world, "we've asked people to be very

shows. Executives from these stores indicated traveling is currently more of an issue for suppliers. "It's more of a story for manufacturers than for us," said Ron Frasch, chairman and ceo of Bergdorf Goodman. He said Bergdorf 's, and its parent, Neiman Marcus Group, have for a while been tightening up on travel spending, anyway. "Everybody is trying to spend less money."

As for luxury brands, several banks have reevaluated their outlook for the market. Goldman Sachs in London on Wednesday downgraded to cautious from neutral its stance on the European luxury sector, due to the likelihood of an extended war in Iraq and mounting concerns about SARS.

Goldman analyst JacquesFranck Dossin also dropped LVMH Mo?t Hennessy Louis Vuitton from its "current investment list" of stocks expected to provide a return of at least 20 percent over the next year. Besides the impact of war and SARS, rising terrorism threats and the specter of a boycott of French products are worsening LVMH's operating circum-

stances, Dossin believes. The investment firm maintains its outperform rating on LVMH and a positive medium-term view, but said the weaker environment prompted the removal.

Dossin noted that SARS concerns are hitting home with Japanese consumers, who are extremely risk-averse but vital to luxury firms, accounting for some 40 percent of sales -- more than half of that amount purchased while traveling.

"Their travel patterns have historically been very dependent on safety perceptions," Dossin writes, citing the Gulf War and the 1998 "chicken flu" as recent examples. "In the two months following Sept. 11, Japanese travel flow was down around 40 percent."

Andrew Gowan, luxury analyst at Lehman Bros. in London, said he's calculated that reduced travel spending is likely to have an impact of at least 1 to 2 percent on revenues and 3 to 5 percent on profits for luxury issues in 2003. This "best-case" scenario is based on how consumers responded during the Gulf War, which was less severe than the Asian Crisis or Sept. 11.

In the worst-case scenario, sales should be adjusted down 3 to 5 percent and profits down from 5 to 15 percent, he said. But the fact that many luxury stocks are down by 10 percent or more, since the first military strikes on Iraq suggests that the market is behaving more on "sentiment" than historical examples, Gowan said.

In her most recent weekly report on the luxury sector, Morgan Stanley analyst Claire Kent noted that SARS and war represent "significant setbacks" to Hong Kong's inbound tourism that could cost $200 million in lost sales over the next two months.

"We believe that non-Japan Asia will continue to see a difficult 2003, due both to negative currency impact and lack of tourism," she wrote.

In his LVMH note, Dossin characterized the firm as the "strongest self-help story" in the sector, given the extensive restructuring, especially at Sephora and DFS. He noted, however, that he expects a slowdown is the coming months due to subdued travel flows, trimming full-year DFS sales estimates from a 2 percent gain to a 1 percent loss.

He also noted that consumer

boycotts against French products, in retaliation for the French government's vocal opposition to the American-led war in Iraq, represent a "heightened" possibility. "This would presumably hit logo products harder," Dossin wrote. "We estimate logo products represent over 60 percent of Louis Vuitton's sales and profits."

Sagra Maceira de Rosen, a J.P. Morgan analyst in London, wrote in a research note that luxury goods in general see about 13 percent of their revenues from Southeast Asia. So far, the analyst noted that sales levels in Hong Kong average 50 to 70 percent below plan. Of concern if the epidemic progresses is an expected decline of Japanese tourists to Hong Kong and other countries in the region. That timing would coincide with upcoming key national holidays: Golden Week, an annual Japanese holiday from April 29 to May 5, and the Labor Holiday week for the Chinese from May 1 to 9.

Canceled trips from Japanese visitors, who are likely to stay closer to home, will boost sales domestically, while other typical tourist draws could be affected.

According to Maceira de Rosen, other key shopping destinations for Golden Week are Hawaii and Korea. Hawaii, she noted, is also being impacted by the ongoing war in Iraq. Korea so far has not reported any cases of SARS.

As for Chinese mainland travelers, they account for about 20 percent of sales in Hong Kong. So far, sales in Hong Kong that are attributable to visitors from the mainland are down 10 percent. Maceira de Rosen concluded in her report that visitors from the mainland, where the epidemic originated, don't appear to perceive any additional risk in visiting Hong Kong.

As for overall sales trends, she wrote, March was a difficult month for the luxury sector because of the Easter holiday shift to April 2003 from March 2002 and dampening sales in the U.S. market and in European capitals as a result of the start of and ongoing Iraqi war.

-- Miles Socha and Robert Murphy, Paris; Amanda Kaiser, Milan, and David Moin, Vicki Young and Marc Karimzadeh, New York

Ann Taylor Appoints Jessup Senior EVP

By David Moin

NEW YORK -- Jerome Jessup has been named senior executive vice president for merchandise and design at Ann Taylor Stores. The announcement Wednesday confirmed a WWD report that day about Jessup joining Ann Taylor.

Jessup becomes the highestranking executive at the Ann Taylor Stores division of Ann Taylor Stores Corp. Previously, Ann Taylor said it would name a president for the division to replace Kim Roy, who left in January. Ann Taylor executives couldn't be reached for comment on whether, with Jessup on board, they still are seeking a president

for the division. But it appears that one won't be named, at least for now, and that Jessup could ultimately wind up with the title if all goes well in his new post.

But it won't be an easy turnaround. Ann Taylor is known for selling classics, with some updating, suits and coordinated looks. The division has been floundering for years because of recent management turnover and changing merchandise directions resulting in the loss of its core career customer. In addition, the chain has suffered because the career market has been weakened by America's casualization, although the Ann Taylor brand still has cachet.

Jessup will be getting plenty of backup from the corporation's central organization. Aside from reporting to chairman J. Patrick Spainhour, who is said to maintain tight control over his executives and the decision making, Jessup will be supported by Barry Erdos, chief operating officer, and Melissa La Bau, executive vice president of retail operations.

Spainhour also noted that with the company's Ann Taylor Loft division running strong, Loft president Kay Krill "will play an integral role in helping Jerome apply his product and creative talents to the Ann Taylor division." In his statement, Spainhour added: "Loft continues to deliver upon

its expectations and we are confident in Kay Krill's ability to take the Loft division to the next level." Total sales for the corporation came to $1.4 billion last year.

Jessup joins Ann Taylor from Gap Inc., where he was executive vice president of product development and design for Gap, GapKids, babyGap and Body. Prior to that, he was responsible for product development and design at the company's Banana Republic division. Before joining Gap in 1993, Jessup was design director at Liz Claiborne and Adrienne Vittadini and a designer at Perry Ellis and Carmelo Pomodoro.

"Jerome's extensive product and brand management experience will help us achieve greater consistency and excitement at Ann Taylor Stores," Spainhour said. "As a critical

member of the senior management team, he will intensify our client focus to assure we meet our clients' expectations season after season." Market sources said Jessup is likely to command a salary in the range of $600,000, while at Gap, his total compensation, including salary and bonus, is said to have topped the million-dollar mark.

At one point, Krill was being considered to head Ann Taylor Stores, in addition to running Loft. Sources said she declined to split her role. At the 185-unit Loft, however, Krill has a team that's been in place longer than that at Ann Taylor, where most of the turnover has occurred, so communications and relationships are established.

Spainhour has been running the 350-unit Ann Taylor Stores since Roy left.

8 Junior/Contemporary Report

WWD, THURSDAY, APRIL 3, 2003

Move Over Motown: Detroit's New Hip

The newest Quiksilver Boardriders Club.

Catching the Waves in

Times Square

NEW YORK -- The beach may be a distance away, but the surf gear isn't.

Quiksilver, the Huntington Beach, Calif.based surf brand, opened its second Manhattan store last week in the crossroads of the world. The Times Square store, called the Quiksilver Boardriders Club, features 3,300 square feet of selling space, with a 20-foot wave wall of video screens showing high-impact surfing, skating and snowboarding images.

Company executives said they chose Times Square because of the more than 30 million people attracted to the area on a yearly basis. With illuminated signs outside to mesh with the brightness of Times Square, the store also features a gaming kiosk where customers can play Tony Hawk Pro Skater and Kelly Slater Pro Surfer video games. It carries a comprehensive product mix of clothing and accessories from the Quiksilver young men's, Quiksilver boys', Quiksilveredition, Roxy and Raisins lines.

"Times Square is the world's melting pot, a place where tourists and New York City locals alike flock to experience the latest trends and fashions from across the United States and around the globe, making it one of the world's preeminent retail locations," said Bob McKnight, chairman and chief executive officer of Quiksilver Inc. "Our new Boardriders Club in Times Square is yet another significant step in our development, as we take our authentic message to a whole new audience."

Designed by architect Steven Sclaroff, the Times Square Boardriders Club embodies a combination of contemporary and vintage designs, while projecting a modern beach feel. Under a canopy of 60 suspended surfboards inside the store, Sclaroff built the wave wall, which dramatizes the high-end video effects created by Phillip Owens and engulfs customers in the action, passion and thrill of boardriding. Owens has also directed and produced giant video walls for rock shows, including U2.

In business for more than 30 years, the newest store is an integral element of Quiksilver's global branding and retail strategy. It is Quiksilver's 69th company-owned Boardriders Club, joining 118 licensed stores and 100 more shops in licensed territories for a total of 286 Quiksilver Boardriders Clubs worldwide. The company's first store opened in New York's SoHo district in 1998, where it still stands.

For the three months ended Jan. 31, the company reported net income shot up 112.8 percent to $6.6 million. Total revenues soared 30.7 percent to $192.1 million.

-- Julee Greenberg

The interior features a wave wall of TV screens.

In his "Lose Yourself" video, Eminem pays tribute to his hometown, the faded letters arching across his hoodie spell out "Detroit." That video gave a boost to Made in Detroit, the clothing company that made Eminem's famed sweatshirt, and the 250 boutiques that carry the line. Several actors wore Made in Detroit Tshirts and hoodies in the movie "8 Mile," and Kid Rock, another Detroit native, has been wearing the clothes as he promotes his latest album, "Cocky."

Now, fans of both musicians, males and females, are stealing the look. Local garage bands like The White Stripes are adding to the buzz. Suddenly, Detroit has become a hip new center of music and fashion.

Mita Pasquale, owner of Magic Bus in Dearborn, said teens stop by her store specifically asking for the sweatshirt Eminem wore in "8 Mile." The thick cotton hoodie with vintage-style stenciled letters wholesales for $27 and retails for about $56. It's also sold online at .

The Made in Detroit line appeals to young, hip customers who are looking for a rock 'n' roll style. Logo-driven T-shirts and hoodies are staples, but the line also includes denim and leather jackets, thongs for girls and Zippo lighters with retro Detroit-themed logos.

Retailer Patrick Sheridan said the recent hype created by Detroit rock stars has been good for business.

"It has definitely put us on the map a little bit more," said Sheridan, who is manager of Incognito, a suburban Detroit boutique that carries the Made in Detroit line, along with Miss Sixty, Diesel, Lip Service and Shrine. "We use it as a marketing tool."

Made in Detroit founder Robert Stanzler, a former New York designer who launched his company in 1991, said the line has evolved along with the Detroit music scene.

"There have been a few waves over the past 10 years," Stanzler said. "It started with the origins of techno music by a group of DJs from here."

" I don't think Detroit

would support someone

who is doing fashion for

fashion's sake for

" very long. -- Robert Stanzler, Made in Detroit

Made in Detroit cosponsors a techno music event each year. Stanzler also hosts a wild annual holiday party with his friend, Kid Rock.

"As the garage rock scene started to evolve here, we also planted seeds with a lot of young bands that made it nationally, like The White Stripes, The Dirt Bombs and The Von Bondies," Stanzler said.

Detroit is best known as the home of Motown, but it also produced such artists as Ted Nugent, Bob Seeger, the MC-5, Iggy and the Stooges, and bluesman John Lee Hooker. When he founded his clothing company, Stanzler wanted to honor Detroit's history -- its

Singer

Shirley

Manson

in a Made

in Detroit tank.

industrial, automotive and musical roots. Ten years ago, he

said, it was hard to find any clothing in

Detroit except for tourist T-shirts that mocked the town,

with slogans like "I survived the riots" or "Murder

Capital of the World."

Stanzler set out to create logos for his products that

reflected Detroit's heritage. The designs have a retro vibe that is both

hip and understated. For example, he makes black baseball caps and

T-shirts with a circular gray gear logo and an orange D in the center.

The simple stencil letters that say "Detroit," worn by Eminem, are a

top seller, Stanzler said. He also made a logo with a hot rod that says

"Detroit Muscle" and another that says "Detroit Cobra."

Made in Detroit clothing also has a strong auto influence. When

Stanzler opened the company, he had an opportunity to buy a fac-

tory that had been making leather auto-racing jackets, with the

stripe down one side, for years. With the factory, he inherited a li-

brary of Fifties-style letters.

"We were able to pull out some of these vintage patterns

for our designs," Stanzler said.

The jackets, which sell for $42 wholesale and $88 re-

tail, are some of the company's most successful items.

Made in Detroit remained a little-known compa-

ny until 1994, when Stanzler decided to go on the

road with the Lollapalooza concert and promote

his products.

"We picked up retail accounts all over the

place and we got on the radar with Hot Topic and

Urban Outfitters," he said.

Since then, the company has just kept growing.

First Kid Rock wore the shirts in a video, now Eminem is

helping out, and since their Grammy win, The White Stripes

are gaining popularity.

"We're pushing a lot more volume," Stanzler said.

Stanzler said the firm is on track to reach sales of $2 million to

$3 million this year. Despite the growth, Stanzler said he doesn't

have any desire to leave Detroit or try anything too high fashion.

"I don't think Detroit would support someone who is doing fash-

ion for fashion's sake for very long," he said. "It gives us a sense of

mission to play a minor part in changing the associations people

have with Detroit for the better."

-- Melissa Knopper

MTV, Ben Sherman Bridge the Generation Gap

NEW YORK -- Ben Sherman is making its mark at the MTV Store.

The British sportswear company, which rose to popularity in the late Sixties when its following included the members of The Beatles and The Rolling Stones, is on a revival tour.

The label can be found on such bands as No Doubt and Blink 182, as well as at the MTV Store in Times Square here. The store, which mostly carries its own branded merchandise, has picked select pieces from the Ben Sherman men's and women's lines and is showcasing them in the store's front windows.

"Ben Sherman's mod clothing line, a favorite among artists and our viewers, is the perfect addition to our MTV Store," said Heidi Eskenazi, vice president of licensing and merchandising for MTV.

Shoppers entering the store between now and April 24 also will have the chance to enter to win a Ben Sherman outfit.

"The MTV store provides the perfect venue to show our target customer the complete Ben Sherman lifestyle collection," said Michael Buckley, chief executive officer of Ben Sherman. "Branding today is about psychographics and for Ben Sherman, that means marketing the brand in places where the young, cool, hip, music-loving guys and girls shop."

-- J.G.

A window at the MTV Store displays a look from Ben Sherman.

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