WWD

Ghesquière’s OutBALENCIAGA BREAKUP

By MILES SOCHA

PARIS — Nicolas Ghesquière, one of the stars of the brand reinvention era, is exiting the house he helped rebuild.

In a development Monday that took many in the fashion industry by surprise, Balenciaga and the French designer said they had reached a “joint decision to end their working relationship,” effective Nov. 30.

The news came only a month after Ghesquière staged one of the most widely praised shows of the spring fashion season — and amid rumblings that the relationship between the designer and management had, after 15 years, soured and reached an impasse. For several years, Ghesquière was said to resent what he felt was a lack of support and funding for the brand — only exacerbated by

increasing friction with new chief executive offi cer Isabelle Guichot. In addition, resources committed to Hedi Slimane and the reinvention of Saint Laurent, while not a primary cause of Ghesquière’s departure, added to the tension.

PPR is believed to have been pressing for a more commercial direction at the house, which it had long seen as having the potential one day to rival Gucci and Bottega Veneta in sales volume.

“With an incomparable creative talent, Nicolas has brought to Balenciaga an artistic contribution essential to the unique infl uence of the house,” François-Henri Pinault, chairman and ceo of PPR, parent of Balenciaga, said in a brief press statement. “Cristóbal Balenciaga was a master, a genius whose avant-garde vision dictated fashion’s greatest

TUESDAY, NOVEMBER 6, 2012 ■ WOMEN’S WEAR DAILY ■ $3.00

PHOTO BY GIOVANNI GIANNONI

SEE PAGE 4

Nicolas Ghesquière takes a bow after his spring show

in Paris in October, his fi nal collection for the house.

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By SHARON EDELSON

NEW YORK — Some signs of normalcy began to return to the New York metropolitan region on Monday, a week after Hurricane Sandy tore through the area, although Staten Island, Long Island and areas of New Jersey remained devas-tated with power still out and relief efforts ongoing.

Lower Manhattan was heavily impacted by the storm surge on Oct. 29. “Things are a lot better than they seem,” said Daniel Ackerman, chief of staff of the Downtown Alliance.

“A lot of our district is back to normal,” said Nicole Kolinsky, a spokeswoman for the Downtown Alliance. “The first day [of the storm] there was no power so a vast majority of retailers were closed. More and more businesses open every single hour. The A [subway line] was just restored today. The only line that’s still not running is the G line.”

Businesses at the South Street Seaport have not yet opened, and the South Ferry Terminal, which was severely flooded, remains closed.

“In terms of the level of devastation, we made out very well,” Kolinsky said.

Century 21, the off-price department store on Cortlandt Street in the Financial District, will re-turn to normal operating hours today. Century 21 lost power on Oct. 29 and while power was restored Nov. 1, it didn’t have enough staff to open the store, said an employee. Since Nov. 2, Century 21 has been operating on a curtailed hurricane schedule, from 10 a.m. to 6 p.m., rather than 7:45 a.m. to 9 p.m.

The major discount stores were up and running as of Sunday or Monday. Target said all stores in the affected area had reopened as of Monday, while Wal-Mart stores were all open as of Sunday.

“The World Financial Center actually fared very well,” said Matthew Cherry, a spokesman for Brookfield Properties. “There was only a very brief period when power was out; it was cut preemptive-ly on Monday, Oct. 29, as a precautionary measure.” Traffic at the WFC was “certainly lighter,” Cherry said, “considering a lot of people couldn’t get down here because the subways weren’t running.”

Some retailers are moving past Sandy and look-ing ahead to the holidays. While Sears still has five stores shuttered, Tom Aiello, divisional vice president, said the retailer will open at 8 p.m. local time on Thanksgiving Day and stay open overnight until 10 p.m. on Black Friday. Kmart stores on Thanksgiving Day will open at 6 a.m. local time until 4 p.m. and from 8 p.m. to 3 a.m. on Black Friday. Kmart will reopen on Black Friday from 5 a.m. to 11 p.m. Both retailers will be closed Christmas Day. “At Sears we didn’t do this last year,” Aiello said, adding that the change was in response to shoppers, who wanted more flexibility and options to shop doorbusters.

Sears’ move follows that of Lord & Taylor, which will open its New York flagship on Fifth Avenue on Thanksgiving Day.

The supply chain’s impact on holiday sales is a concern. “The impact seems to increase exponen-tially the longer the ports remain shut down,” said John Martin, principal of Martin Associates, a mar-itime consultant. “New York facilities are signifi-cantly damaged or closed down,” he said. “There may be damage in warehouses or distribution cen-ters housing holiday merchandise. All the fast fash-ion will be clearly impacted. You’re filling orders for hot items. If you don’t have sufficient inventory,” you’ll lose sales.

The gas shortage is also complicating the situa-tion. “You’re going to have gas, but the time it takes to fill up could reduce trucking time by 25 percent,” Martin said. “That will affect distribution to stores, especially as we approach Black Friday. We have two-and-a-half weeks to work out the kinks.”

More than supply chain issues, Dave Marcotte, senior vice president of retail insight at Kantar Retail, sees other factors impacting the holiday sea-son. “People aren’t working,” he said. “People are cautious and people don’t have a house to live in.”

On Monday, a message from the Moran Office of Maritime and Port Security was a reminder of more bad weather on the way, with a major nor’easter ex-pected to hit the East Coast. “The storm is expected to make landfall Wednesday afternoon throughout the night until Thursday morning,” the office said.

WWD TUESDAY, NOVEMBER 6, 2012

Fashion, Retail, Media Firms Aid Relief Efforts

TO E-MAIL REPORTERS AND EDITORS AT WWD, THE ADDRESS IS FIRSTNAME_LASTNAME@FAIRCHILDFASHION.COM, USING THE INDIVIDUAL’S NAME. WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2012 FAIRCHILD FASHION MEDIA. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A.VOLUME 204, NO. 95. TUESDAY, NOVEMBER 6, 2012. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one additional issue in May, June, October and December, and two additional issues in February, March, April, August, September and November) by Fairchild Fashion Media, which is a division of Advance Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Condé Nast: S.I. Newhouse, Jr., Chairman; Charles H. Townsend, Chief Executive Officer; Robert A. Sauerberg Jr., President; John W. Bellando, Chief Operating Officer & Chief Financial Officer; Jill Bright, Chief Administrative Officer. Periodicals postage paid at New York, NY, and at additional mailing offices. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services Tax Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian addresses to P.O. Box 503, RPO West Beaver Cre, Rich-Hill, ON L4B 4R6. POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615 5008. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or visit www.subnow.com/wd. Please give both new and old addresses as printed on most recent label. For New York Hand Delivery Service address changes or inquiries, please contact Mitchell’s NY at 1-800-662-2275, option 7. Subscribers: If the Post Office alerts us that your magazine is undeliverable, we have no further obligation unless we receive a corrected address within one year. If during your subscription term or up to one year after the magazine becomes undeliverable, you are ever dissatisfied with your subscription, let us know. You will receive a full refund on all unmailed issues. First copy of new subscription will be mailed within four weeks after receipt of order. Address all editorial, business, and production correspondence to WOMEN’S WEAR DAILY, 750 Third Avenue, New York, NY 10017. For permissions requests, please call 212-630-5656 or fax the request to 212-630-5883. For all request for reprints of articles please contact The YGS Group at condenast@theygsgroup.com, or call 800-501-9571. Visit us online at www.wwd.com. To subscribe to other Fairchild Fashion Media magazines on the World Wide Web, visit www.fairchildpub.com. Occasionally, we make our subscriber list available to carefully screened companies that offer products and services that we believe would interest our readers. If you do not want to receive these offers and/or information, please advise us at P.O. Box 15008, North Hollywood, CA 91615-5008 or call 800-289-0273. WOMEN’S WEAR DAILY IS NOT RESPONSIBLE FOR THE RETURN OR LOSS OF, OR FOR DAMAGE OR ANY OTHER INJURY TO, UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED TO DO SO BY WOMEN’S WEAR DAILY IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE ACCOMPANIED BY A SELF-ADDRESSED STAMPED ENVELOPE.

ON WWD.COM

THE BRIEFING BOXIN TODAY’S WWD

Nicolas Ghesquière, one of the stars of the brand reinvention era, is exiting Balenciaga, the house he helped rebuild. PAGE 1 Italian tax authorities have taken aim at the Marzottos, with allegations involving the family’s association with the Valentino Fashion Group, Permira deal in 2007. PAGE 3 Georg Jensen has a new owner, Investcorp, that’s out to turn the company into one of the world’s largest luxury brands. PAGE 3 True Religion Apparel Inc.’s small improvement in third-quarter earnings was adequate to beat Wall Street’s estimates. PAGE 6 Despite more than one hundred years in business, the family-owned knitwear manufacturer Fessler USA will wind down operations this month. PAGE 6 The slow economies in Europe and the U.S., and a gradual shift of sourcing away from China, were apparent at the Intertextile Apparel Fabrics Fall 2013 show. PAGE 7 Elizabeth Arden Inc.’s first-quarter profits fell sharply as the company focused on reshaping its namesake brand. PAGE 8 Veteran dealmaker Elsa Berry has founded Vendôme Global Partners, a high-touch investment bank focusing on luxe brands. PAGE 8 An exclusive look at the Victoria’s Secret fashion show revealed the glam, glitz and show biz drama that will be unveiled Wednesday at the 69th Regiment Armory. PAGE 9 Julie Berman, senior vice president of corporate communications at Ralph Lauren Corp., has resigned her post after four-and-a-half years. PAGE 9 In the wake of Hurricane Sandy, the 92Y has postponed today’s talk between Marc Jacobs and Fern Mallis, which will now be held Jan. 9 at 8 p.m. PAGE 11

FASHION: For more photos from Nicolas Ghesquière’s time at Balenciaga, see WWD.com/fashion-news.

A resort 2004 look from Balenciaga.

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By LISA LOCKWOOD

NEW YORK — A host of companies in the fashion, retail and media worlds have pledged $1 million or more to support victims of Hurricane Sandy.

Coach Inc., and Ralph Lauren, chairman and chief executive officer of Ralph Lauren Corp., will each do-nate $2 million to the Hurricane Sandy relief efforts.

As part of Lauren’s $2 million gift, the Ralph and Ricky Lauren Family Foundation will donate $1 million to the Mayor’s Fund to Advance New York City to help address immediate needs of New Yorkers as well as long-term re-lief efforts. Ralph Lauren Corp., through the Polo Ralph Lauren Foundation, will donate the other $1 million to relief efforts, dividing the money among the Robin Hood Relief Fund, the American Red Cross Disaster Relief Fund and local organizations for relief and rebuilding efforts in New Jersey, Connecticut, Long Island and Westchester County. Additionally, Lauren has established an em-ployee matching program with the American Red Cross for up to $1 million and will work with selected organizations for in-kind donations of clothing and other necessities.

“I’m a born-and-bred New Yorker. I raised my family here and started my business here. The Tristate area is home to thousands of our employ-ees and our customers and we have a special and personal relationship with the affected areas,” said Lauren. “We want to support the selfless work of so many agencies, professionals and volunteers and hope that these donations will make it easier for our cities to rebuild and recover.”

Coach has earmarked its $2 million gift to the American Red Cross. “Our hearts go out to the countless number of people affected by the storm,” said Lew Frankfort, chairman and ceo of Coach Inc. “Coach was founded in New York in 1941 and this city has inspired, motivated and shaped our brand. So many of us at Coach call the city and the sur-rounding area home. We can’t replace what has

been lost, but we want to help our community re-pair and rebuild in the wake of this terrible storm.”

In the media world, the Samuel I. Newhouse Foundation plans to donate $1 million to the American Red Cross to assist with disaster relief in New York, New Jersey and Delaware in the wake of Hurricane Sandy. Many of the hardest-hit areas are home to the magazine, newspaper and digital companies of Advance Publications Inc., parent company of Condé Nast, which owns WWD.

Hearst Corp. will also donate $1 million to the

Red Cross, Salvation Army and other appropriate organizations. Hearst will also match employees’ donations to these two organizations, dollar for dol-lar, up to a maximum of $1 million.

Time Warner Inc. and its divisions, including HBO, Time Inc., Turner Broadcasting System and Warner Bros., have committed $1 million to aid to Hurricane Sandy relief efforts.

Other big donations include: Limited Brands Inc., parent company of

Victoria’s Secret and Bath & Body Works, plans to donate $1 million to Hurricane Sandy relief. Some $500,000 will be donated to the American Red Cross for immediate assistance and an additional $500,000 will be designated for organizations work-ing on rebuilding efforts.

Tristate Area Struggling Back After Sandy

Wal-Mart Stores Inc. was one company that donated to help with hurricane recovery.

{Continued on page 8}

WWD.COM3WWD TUESDAY, NOVEMBER 6, 2012

An ad visual from Georg Jensen’s Great Danes 2013 campaign.

By SAMANTHA CONTI

LONDON — Georg Jensen has a new owner with deep pockets that’s out to turn the Danish company into one of the world’s largest luxury brands: Investcorp.

The private equity fund bought Jensen from Denmark’s Axcel Capital Partners for $140 mil-lion. Investcorp has operations in Bahrain, London and New York, and currently has $11.5 billion in assets under management and a proven track record in turning brands into major play-ers — just ask Saks Fifth Avenue, Tiffany & Co. and Gucci. Investcorp has been off the fashion scene for some time, however, pretty much since it floated Gucci on the Amsterdam Stock Exchange in 1995. It had earlier floated Tiffany on the New York Stock Exchange in 1987.

The fund has the same strategy for Georg Jensen and may seek a public listing for the com-pany in Asia in five to seven years.

“We’d like to make this the next Tiffany, the European Tiffany,” Hazem Ben-Gacem, head of Investcorp’s European corporate investment ac-tivities, told WWD.

“We plan to take on board the brand’s history and heritage and execute all of our experience with Breguet, Chaumet and Tiffany to give Georg Jensen a global luxury brand positioning,” he added.

Georg Jensen, whose products range from diamond jewelry to watches and silverware to objects for the home — all with a Scandinavian midcentury modern aesthetic — was an attrac-tive prospect, said Ben-Gacem. “There are only a handful of legitimate, 100-year-old brands out there that are for sale and that have the potential to become billion-plus businesses.”

The brand was founded by the silversmith Georg Jensen in 1904, and originally specialized in table-ware and objects for the home. It currently has 94 directly operated stores worldwide, and has been owned by Axcel since 2001 when the latter pur-chased it as part of the Royal Scandinavia Group.

Ulrik Garde Due, the chief executive officer who helped the loss-making Georg Jensen turn its first profit under Axcel in 2010, will remain in place. Investcorp plans to bring in Nautica founder David Chu as chief creative director and cochairman of the board, along with Ben-Gacem.

“David is also a fully fledged partner in the business, having invested his own money, and his role will be full time. He’ll be the Tom Ford of Georg Jensen, working on product design and brand extensions,” said Ben-Gacem.

Investcorp has also brought in Guy Leymarie, whom Ben-Gacem said helped on the Jensen due diligence from Day One. Leymarie, the former ceo of brands including De Beers Diamond Jewelers, Cartier and Dunhill, will join the new board.

Ben-Gacem said that initially the plan is to pursue Sweden and Germany, markets that have a natural affinity with the Jensen brand. In the U.S., where the brand has a small presence, Jensen will be looking for “partnerships or relationships” with department stores, he added.

While the majority of Georg Jensen’s retail sales are in Asia, Ben-Gacem said building a business there would take time. “Georg Jensen does less than $1 million in business in China. By comparison, it does $50 million worth of business in Denmark.”

In terms of product, he said that going forward men’s accessories would be among the categories to be expanded and developed.

In the year to Dec. 31, the brand’s revenue grew 8 percent to 914 million Danish kroner, or $164.5 million, while profits fell 29 percent to 6 million Danish kroner, or $1.1 million, due to expenses from retail expansion and executive hiring.

Last year, the brand opened 25 stores and dou-bled its shop-in-shop on Harrods’ ground floor to 356 square feet. Last November, it opened a new space at Bloomingdale’s luxury jewelry room in New York. Retail accounts for 57 percent of the business while wholesale, e-commerce and travel retail make up the rest.

Scandinavia and Asia-Pacific each generate 42 percent of sales, with Continental Europe kicking in 10 percent, and North America 6 percent. Jewelry is the largest product cate-gory, accounting for 50 percent of sales, while homeware generates 26 percent and watches 10 percent. Silverware and seasonal items ac-count for the balance.

Georg Jensen continues to evolve: The brand is set to launch a “Great Danes” ad campaign shot by Tim Walker, and a similarly themed blog that celebrates the culture and heritage of Denmark.

The Danish singer Oh Land features in the new campaign alongside the up-and-coming actor Pilou Asbaek. Land is pictured as a modern-day mermaid, while Asbaek is dressed as Hamlet. Other figures include dancers from the Danish Royal Ballet, a swan and a brood of ducklings in a nod to the tales of Hans Christian Andersen and the Y-chair by Wegner for Carl Hansen.

Walker shot the images two weeks ago on loca-tion at a manor house outside Oxford. The campaign was produced with the New York agency Lipman.

The campaign will launch officially during New York Fashion Week in February, with a din-ner hosted by Land, Walker and Garde Due. The ads will break in the March issues of titles includ-ing Vogue, Elle and Harper’s Bazaar.

The blog, which will feature everything Danish from food to acting talent, to Denmark’s great out-doors, launches Nov. 19. “It’s a good moment for us — we’re a small country but great things are hap-pening, and as a brand we want to take ownership of what is cool in Denmark,” Garde Due told WWD.

The blog will launch initially in English, and eventually in Danish and other languages, and will also serve as a platform for emerging talent in the country, said Garde Due.

Georg Jensen also plans to reproduce limited-edition capsule collections of archive items that featured in the August runway show of the Danish fashion designer Ole Yde, including two bracelets and a necklace. Going forward, the brand plans to issue annual archive capsule collections all based around a theme.

By LUISA ZARGANI

MILAN — The Italian tax authorities have taken aim at another high-profile fashion family: the Marzottos.

The allegations involve the family’s association with the sale of Valentino Fashion Group to private equity fund Permira in 2007 and include former Valentino chairman Matteo Marzotto, among others. The Marzottos are the latest in a long line of Italian fashion industry figures to be targeted by the country’s tax police, ranging from Giorgio Armani to Valentino Garavani and Giancarlo Giammetti to, most recently, Domenico Dolce and Stefano Gabbana. Almost all the cases have subsequently been dismissed, although the Dolce and Gabbana one is ongoing.

A Milan branch of the Guardia di Finanza, an Italian police force under the authority of the national Minister of Economy, has confiscated assets, including land and real estate properties, worth more than 65 million euros, or $83.4 million at current ex-change, owned by a number of Marzotto family members. The properties include villas in the luxury mountain resort Cortina d’Ampezzo; apartments in Milan and Rome, and a castle in Trissino, near Vicenza and not far from the Marzotto headquar-ters in Italy’s Valdagno.

As part of a probe initiated by prosecutor Laura Pedio, who has also been heading up the Dolce and Gabbana case, and Gaetano Ruta, 13 individuals are being investigated for al-leged omission of earnings and assets declaration. In addition to Matteo, other Marzottos being accused are Vittorio, Maria Rosaria, Cristiana, Diamante and Margherita. Also charged are Andrea, Isabella and Rosanna Donà dalle Rose, Barth Zech, Pierre Cladmi, Ferdinando Businaro and real estate en-trepreneur Massimo Caputi. The Donà delle Rose is another Marzotto family branch.

Matteo Marzotto responded Monday evening, issuing a state-ment saying that he acknowledged the confiscation, but felt it was “opportune” to underscore that he did not hold operative roles in the company, in which he was a minority shareholder. “I believe, together with the other individuals involved, that I have always operated in the full respect of the law, so much so that this operation had been at the time communicated in all its details to the authorities of the Bourse and to the press,” said Marzotto. He concluded adding that he had “faith that a solution will shortly be found, and, to this end,” he had appointed “a pool of professionals” headed by one of Italy’s most notable fiscal law-yers, Victor Uckmar.

A well-placed legal source said “the hypothesis is that a for-eign company allegedly based in Luxembourg was solely created for the sale of the Valentino brand to Permira,” and that taxes on the profit derived from the transaction were never paid in Italy. “The company was called ICG [International Capital Growth Sarl] and was closed after the sale,” said the source. “This al-lowed the accused to net a capital gain of 200 million euros [$256.7 million at current exchange], and elude the payment of over 65 million euros in taxes.”

The accusation is that ICG was an Italian company that should have paid taxes in Italy as it did not list headquarters in Luxembourg and was managed from Italy and managers resident in this country, said the source. The Guardia di Finanza said in a note that the financial holding was “formally and consciously set up in Luxembourg.”

In issuing the decree to sequester the assets, the judge in charge of the preliminary investigations, Gianfranco Criscione, motivated the confiscation with the fact that in May 2007, “the profit made by ICG through the sale of VFG was transferred to the Cayman Islands, including the part earned through the fiscal evasion.” The judge believes that there are elements leading to the “danger that the accused could transfer abroad at least a part of their assets,” or engage in other operations with the goal to evade paying their dues.

What the accused will decide to do next remains to be seen. “If they pay up, they will get their assets back and this will be behind them, or this could go to court,” said a legal source.

Permira acquired 29.6 percent of VFG from the Marzotto family’s ICG for 782.6 million euros, or $1 billion, in May 2007. Permira then took control of VFG with some members of the Marzotto family through Red & Black Lux Sarl, shell-ing out about $3.55 billion for the group, which included a majority stake in Hugo Boss — at the time Permira’s prime motivation for the deal.

In 1998, Garavani and his business partner, Giammetti, sold the company to the now-defunct Holding di Partecipazioni Industriali for $233 million, three times the house’s direct rev-enues. Valentino languished in the red under HdP, and Marzotto bought the designer company in 2002 for $210 million (includ-ing Valentino’s net debt of $179.2 million), putting the designer under contract. Marzotto, which started out as a woolen mill in 1836, made its first fashion foray when it bought Hugo Boss in 1991. In 2005, Marzotto spun off Valentino, a controlling stake in Hugo Boss and other clothing assets into the new VFG, listing it on the Milan Stock Exchange. Valentino was delisted in 2008.

In July, Mayhoola for Investments, an investment vehicle backed by a private investor group from Qatar, agreed to ac-quire VFG for around 700 million euros, or $858 million, from Red & Black Lux.

Italian Tax Authorities Target Marzotto Family

Georg Jensen Bought by Investcorp

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4 WWD TUESDAY, NOVEMBER 6, 2012

Nicolas Ghesquièrtrends and inspired generations of designers.”

Pinault, due to speak at to-day’s Pambianco conference in Milan, was not available for further comment Monday. He and other PPR officials had brushed off speculation that the designer and Balenciaga might be heading for a divorce when questioned about it during Paris Fashion Week.

Ghesquière is in Japan for a friend’s wedding and could not be reached for comment.

Guichot told WWD a succes-sor would be named “as soon as we’re ready.”

“We have a short list,” she added, declining to identify poten-tial candidates or give a deadline for making an announcement.

“My biggest interest is to focus the organization, accom-pany the team and develop the brand potential, so it’s in my interest to do it as soon as pos-sible,” she said.

Guichot characterized the forthcoming change of creative leadership as “part of the life of a fashion house” and that Balenciaga and Ghesquière agreed, after discussions of long duration, to open “new chapters” in their respective development.

“We have huge ambitions and we have huge reserves of growth,” the executive said. “Year-to-date, we’re still at dou-ble-digit growth.”

Guichot noted that Balenciaga is a brand with strong codes recognized by con-sumers, and she stressed it still has room to grow via geograph-ic, retail and product expansion.

Asked if Ghesquière’s exit could hurt Balenciaga’s mo-mentum, she said the “brand is strong enough, developed enough and structured enough to express itself without fear,” she said. “Now the company is so mature in its organization, in its processes, the business is really moving forward.”

She also trumpeted the health of its ready-to-wear business, girded by six cap-sule collections — leather, knits, pants, T-shirts, silk and black dresses — along with its vintage reeditions line, known as Edition.

She declined to speculate on Ghesquière’s next move. “It was an incredible tenure for Balenciaga, in its creativity, its content, its length,” she said. “Nicolas has many talents, he needs to express his talent and I’m sure he will do so.”

Gucci Group, the precursor to PPR’s luxury division, ac-quired the Balenciaga business in 2001 from Groupe Jacques Bogart, a fragrance and fashion firm, with Gucci owning a 91 percent stake and Ghesquière holding the balance.

Guichot declined to say if Ghesquière still held shares in the company, and if so, if Balenciaga or PPR might acquire them. “All I can say is Balenciaga is already 100 percent fully inte-grated in PPR’s accounts.”

She also declined to com-

ment on his current employ-ment contract, which sources said expires sometime in 2013.

Among Guichot’s other press-ing concerns is finding a tem-porary store for Balenciaga in Manhattan as its flagship in the Chelsea art district was “de-stroyed” by the storm surge en-gendered by Hurricane Sandy, and its forthcoming unit in SoHo isn’t slated to open until spring.

The exit of one of the indus-try’s most lauded and daring talents is sure to fuel discussion over the tug-of-war between business imperatives and cre-ative expression.

The change also caps off a turbulent year at the highest levels of international fashion, with Christian Dior and Yves Saint Laurent among French brands bringing in new cre-ative directors.

Ghesquière has been creative director of Balenciaga since 1997, transforming it into one of the most influential French brands and most coveted tickets during Paris Fashion Week.

His rapid-fire shows deliv-ered a fashion message as di-rect as a bullet, spectacular in

their workmanship and imagi-nation. He had a penchant for futurism and the Eighties, while also exploring key silhouettes and themes from Balenciaga, a Spaniard who founded his cou-ture house in 1919 and estab-lished himself in Paris in 1936.

Despite international fame, Balenciaga closed his couture

business in 1968, leaving li-censed fragrances as the main business. He died in 1972.

Ghesquière’s next career move could not be learned, but the sudden availability of such a high-profile talent is sure to

attract the attention of rival luxury groups.

Dior heavily courted Ghesquière last year as it sought to replace its disgraced couturi-er John Galliano, ousted in the wake of racist and anti-Semitic outbursts. Dior ultimately opted for Raf Simons, another media darling who had been shown the door at Jil Sander a few months earlier despite an acclaimed seven-year stint at that Milan-based brand.

Meanwhile, YSL, also owned by PPR, ultimately took on de-signer Hedi Slimane, without a label since he exited Dior Homme in 2007, to succeed Stefano Pilati.

Sources speculated that Ghesquière might wish to mount a signature brand, an ambition he had stated many times while ensconced at Balenciaga.

The sudden vacancy at Balenciaga is bound to ignite a guessing game about who might take his place in one of the plum seats in Paris. According to sources, Alexander Wang and Joseph Altuzarra could be among the candidates, given their press following and modernist fashion

leanings. Kostas Murkudis and Bouchra Jarrar, an alumna of Balenciaga, are among lesser-known possibilities.

According to sources, talent scouts at PPR have also been keeping an eye on hot talents in London, who include Mary Katrantzou, Christopher Kane, J.W. Anderson and Thomas Tait.

Lazaro Hernandez and Jack McCollough of Proenza Schouler were others men-tioned as possible candidates, although other sources dis-missed that possibility given their new ownership and the de-signers’ focus on building their own brand.

Whomever PPR chooses will walk into a sizable business that now counts 62 directly oper-ated stores and a new fragrance fronted by “Twilight” actress Kristen Stewart. This year, the brand strengthened its pres-ence in Asia, opening stores in Mainland China to bring its complement there to 11.

At a recent press day here, PPR group managing director Jean-François Palus noted that Balenciaga has multiplied in size by 11 times since it was acquired.

We have huge ambitions

and we have huge reserves

of growth. — ISABELLE GUICHOT,

BALENCIAGA

The Lariat bag was introduced in 2000.

Spring2006

Fall2009

Spring2003

Spring2013

Spring1999

Spring2002

Spring2012

{Continued from page one}

FOR A PHOTO TIME LINE OF GHESQUIERE’S COLLECTIONS

FOR BALENCIAGA, SEE

WWD.com/fashion-news.

Parent of Gucci and Bottega Veneta, PPR does not break out figures for its other lux-ury brands, which include Stella McCartney, Boucheron, Alexander McQueen and Sergio Rossi. In the third quarter, the division posted sales growth of 45.6 percent, with all brands and regions contributing to the per-formance. In comparable terms, sales were up 15.5 percent.

“Momentum remained es-pecially strong for fashion and leather goods, which achieved growth of more than 13 percent in the quarter, driven by out-standing success of the designer brands and the very solid per-formances of Brioni and Sergio Rossi,” PPR stated at the time.

In the first nine months of the year, other brands recorded a sales rise of 60.8 percent in re-ported terms and of 18.8 percent in comparable terms.

Earlier this year, PPR chief financial officer Jean-Marc Duplaix had cited a “strong” performance at Balenciaga in the first quarter.

Hailing from the small French town of Loudun and without any formal fashion

training, Ghesquière got his start in fashion by filing, photo-copying and cataloguing fabrics at Jean Paul Gaultier, ultimate-ly landing at Balenciaga and designing lowly licensed lines, including office uniforms, brid-al gowns and widows’ dresses for Japan.

Once promoted to the helm of the ready-to-wear line in 1997, succeeding Josephus Thimister, he quickly won acclaim for sculpted designs straddling fu-turistic and Parisian chic.

For three seasons straddling the Millennium, he also de-signed collections for the Milan-based house of Callaghan.

Tom Ford and Domenico De Sole, then creative director and ceo of Gucci Group, respective-ly, brought Ghesquière into the fold, eager to turn his rising pro-file into profits.

“We do feel that it is a won-derful brand, but you do need to secure good design talent, and Nicolas Ghesquière is a star,” De Sole told WWD at the time.

While primarily known for his creative prowess — and at times criticized for his elitist, exclusive approach to fashion

— Ghesquière frequently took pains to show that he was not opposed to big business, even occasionally taking the powers to be at Gucci Group and PPR to task for holding him back.

“Even if we’re not a priority in the group — and that’s clear we’re considered a small brand — I still want to prove that we

can be bigger than that,” he said in a 2005 interview, stress-ing that capsule collections for pants and knits, introduced that year, were 100 percent his idea.

“It’s not a marketing strategy, and it’s not coming from some-one else. You don’t sign on with

these kinds of groups if you don’t want to do business and make money,” he said at the time. “I like to experiment, but I also like to make beautiful, wearable clothes. I always mix them.”

Back in 2000, Ghesquière introduced a much-demanded, logo-free handbag with braided handles and dangling zipper pulls, and the style is still seen in the streets all over the world, though overshadowed by more recent “It” bags.

He is seen as a pioneer in linking fashion and art long before they became cozy bed-fellows, tapping French con-temporary artist Dominique Gonzalez-Foerster to codesign his otherworldly Balenciaga bou-tiques and planting them where you least expect them: next to the former Dia Center in New York or on a forgotten street in central Milan, for instance.

He also helped fan the trend to extreme footwear, and often influenced fashion from the designer level down to the high street.

Several market sources char-acterized Ghesquière as uncom-promising in his futuristic vision

for the brand. “Nicolas is one of a small coterie of designers, who in spite of the general progress of the world, seems unwilling to address the demands of com-munication and marketing. It seemed to me that his attitude to protecting exclusivity was at odds with the general focus of the rest of the group,” said one industry source, who spoke on condition of anonymity.

Another source claimed that Balenciaga has been overly de-pendent on its handbag busi-ness, and unable to convert Ghesquière’s designs into com-mercial categories. “There was so much editorial noise around the collections, and a few key reporters decided to champion him. And maybe the more noise there was, the more he felt he needed to push himself and take risks. His ideas were regu-larly copied — it was direction-al but never commercial,” the source said.

French designer Pierre Hardy, a friend of Ghesquière’s who collaborated with him on shoes at Balenciaga, said he had no sense of any internal discord at Balenciaga or PPR.

“This might be exactly the right moment for him [to leave the house],” Hardy said. “The collection was a commercial success and a critical success. He is at the zenith. He probably felt in a cage. It was too small for him.”

Retailers expressed regret at fashion’s latest divorce.

“I think it’s a shame for Balenciaga. I really liked what Nicolas Ghesquière did. I don’t know who else can bring that modernity to the brand, and I was a big, big fan of his pas-sion for colors and fabrics,” said Martine Hadida, women’s wear buyer for L’Eclaireur in Paris. “He did a great job. I loved the modernity of the collections. We had good results with the Balenciaga collection. The piec-es we chose for L’Eclaireur sold very well.”

Marie-Amélie Sauvé, the Paris-based stylist, fashion editor and consultant who collaborated with Ghesquière since the start of his career at Balenciaga, said it was impossible for her to imag-ine the brand continuing without the man who defined and ener-gized its image for 15 years.

“He made Balenciaga. Balenciaga and Nicolas are the same thing,” she said, calling the brand too small for his tal-ent. “He deserves more than that because he is the biggest designer of our times. His signa-ture is so strong, so unique.”

“It is a little hard to be-lieve as he is so linked to the house,” said Daniella Vitale, chief operating officer and se-nior executive vice president of Barneys New York. “What a transformation and an inde-fatigable talent. He seemed to get better every year but the company has a very strong, tal-ented management team and they are incredible partners.”

— WITH CONTRIBUTIONS FROM JOELLE DIDERICH, PARIS

AND SAMANTHA CONTI, LONDON

WWD.COM5WWD TUESDAY, NOVEMBER 6, 2012

e Exits Balenciaga

He is at the zenith. He

probably felt in a cage. It was too small for him.

— PIERRE HARDY

Spring2008

Leather and foam loafer, fall 2010.

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6 WWD Tuesday, november 6, 2012

NEW YORK — Cynthia DiPietrantonio has been named to the new post of chief operating officer of The Jones Group Inc.

Most recently, DiPietrantonio was chief operations offi-cer. In her expanded role, she will oversee production in Jones’ overseas facilities, including the produc-tion offices in China and Hong Kong, in addition to her cur-rent duties oversee-ing day-to-day opera-tions of the company.

DiPietrantonio, the senior-most opera-tions executive at the company, has been with Jones for the past 30 years, in increas-ingly responsible po-sitions. She continues to report to Wesley R. Card, chief executive officer of Jones.

“This promotion comes at an impor-tant time, as we continue to implement a seamless supply chain. Since her

appointment as chief operations of-ficer five years ago, Cindy has proven herself to be an excellent manager and has been essential in driving company-

wide improvements, including enhancing efficiencies in our distribution centers and implementing better buying and planning processes,” said Card.

In addition to day-to-day operations, DiPietrantonio’s re-sponsibilities as chief operations officer have included sys-tems and technology, logistics and opera-tions, customer ser-vice, imports, customs and compliance and distribution. She also oversees strategic re-

lationships, including third-party logistics and retail vendors, and the development of strategic supply chain initiatives.

� —�Lisa�Lockwood

Jones Promotes DiPietrantonio

Cynthia DiPietrantonio

By ARTHUR FRIEDMAN

IN THE END, Fessler USA apparently could no longer swim upstream.

For many years, the family-owned state-of-the-art knitwear manufacturer seemed at once a vestige of a bygone era, as imports drove U.S. produc-tion jobs offshore, and a symbol of a revival of U.S. apparel manufactur-ing. Its 155,000-square-foot facility in Orwigsburg, Pa., on rural Route 61, owned by the Meck family, served as a company headquarters, a manufacturing plant, a warehouse distribution site and a hub for shipping goods to satellite sew-ing factories in the area.

The factory featured a computerized design and patternmaking department, cutting rooms for its array of knit tops and medical and health-care goods made and packaged on site, and a bar-coded inventory control system that integrated functions from shipping and receiving to sales and manufacturing. Last year, the company invested in an array of 160 solar panels that provided the full ener-gy capacity for the plant.

Interviewed last summer at the site, Walter Meck, chief executive officer of the firm, proudly said, “At times, the meter runs backward,” and that leftover power went back into the East Coast grid. Noting that the solar panels were paid for in part by a federal grant in the form of tax credits, Meck said, “We did the solar project to keep jobs in the area, and as a commitment to sustainability.”

His son, Brian Meck, said at the time, “We also did it to remain competitive with foreign manufacturing by keeping costs down in the long term.”

The company is set to wind down op-

erations this month, and Brian Meck, who was vice president of sales and marketing, has already left the com-pany, after seven years. Sources said Fessler couldn’t get a loan needed for continued operations.

David Sasso, vice president of inter-national sales at Buhler Quality Yarns Corp., which counted Fessler as an im-portant customer, said while business is difficult for U.S. manufacturers, he feels it is a case of one company’s prob-lems and is not indicative of the push for Made in USA falling flat.

“Walter had indicated that a big prob-lem was that demand has dropped, and that is true for everyone,” said Sasso. “There’s also a problem that when peo-ple hear bad news about a company hav-ing problems, and that was the word in the market, then they get nervous and business dries up.”

Sasso also thought that Fessler has tried to “be all things to everybody,” such as spinning yarn and making knit tops at the same time, which he noted can be expensive and require an investment in manpower and equipment.

“I think in the U.S. today, it’s better to be smaller and agile and careful in your growth,” Sasso added.

Fessler employed 130 people direct-ly, and another 150 to 300 indirectly at any given time, including sewing shops in nearby Allentown and Reading, and contracted dyeing and other service jobs in the area. Fessler USA began life in 1900 as Meck & Co., producing cot-ton underwear at a factory in Schuylkill Haven, about 90 miles northwest of Philadelphia. Meck’s father sold it to the Fessler family in 1960. Meck joined other family members to buy the com-pany back in 1994.

By ARNOLD J. KARR

TRUE RELIGION Apparel Inc.’s small improvement in third-quarter earnings was adequate to beat Wall Street’s es-timates for the firm while the high end of its guidance for the fourth quarter matched analysts’ expectations.

While its largest business segment, U.S. consumer direct, saw sales move up 5.7 percent to $65.3 million, com-parable sales in the category, the com-bination of same-store sales and e-commerce, declined 4.7 percent in the quarter. “While our same-store sales fell short of our expectations, we were able to exit the quarter with less slow-moving merchandise,” said Jeffrey Lubell, chairman, chief executive officer and chief merchant. “This puts us in a strong position head-ing into the holiday season.”

For the three months ended Sept. 30, net income attributable to the Vernon, Calif.-based premium jeans and sportswear firm grew 2.1 percent to $12.3 million, or 49 cents a diluted share, from $12.1 million, or 48 cents, in the comparable 2011 period. The consensus among Wall Street analysts was for earnings per share of 45 cents.

Led by 35.4 percent growth in the U.S. wholesale business, to $29.8 million, net sales rose 9.4 percent to $118.5 million from $108.4 million in last year’s quar-ter. The 2012 performance was ahead of the revenue consensus among analysts of $113.2 million. The direct unit saw its share of com-pany sales drop to 55.1 per-cent from 57 percent a year ago while U.S. wholesale, boosted by greater sales to the specialty and off-price channels, grew to 25.1 per-cent from 20.3 percent. International sales dropped 3 percent to $22.7 million.

On a Monday morning conference call, executives noted the company’s re-view of strategic alternatives, including a possible sale, was continuing with no set timetable or guarantee of a transaction.

In a discussion of merchandising di-rection, Lynne Koplin, president, pointed out that nondenim’s share of sales had grown to 35.1 percent of U.S. consumer

direct volume, up from 28.8 percent a year ago, and that sportswear was expect-ed to grow “at a faster pace than denim.”

Lubell added his voice to those in the premium denim market who expect to see upscale brands back away at least slightly from the focus on colored denim. “It’s in the lower-tier brands at this point.…We’ll continue with colored bottoms, but it won’t be 12 different colors of a partic-ular bottom, maybe one or two,” he said in response to an analyst’s question.

For the nine months, net income was up 6.7 percent to $32.5 million, or $1.29 a diluted share, as sales grew 9.9 per-cent to $330.2 million.

The company now expects fourth-quarter EPS of between 52 and 58 cents

a diluted share on revenues of $128 mil-lion to $133 million. Prior to the disclo-sure of quarterly results, analysts on average expected EPS of 58 cents on revenues of $128 million.

Thirty-five of the company’s 121 U.S. stores closed for at least part of last week because of Hurricane Sandy. The firm said that most had reopened but declined to estimate the impact on fourth-quarter results.

Knitwear Firm Fessler Closing

True Religion Net Rises 2.1%

Jeffrey Lubell

w06a006a;8.indd 6 11/5/12 7:12 PM11052012191341

WWD.COM

By LARA FARRAR

SHANGHAI — The continued slow economies in Europe and the U.S., and a gradual shift of sourcing away from China, were apparent at the Intertextile Apparel Fabrics Fall 2013 show.

Chinese exhibitors and those who traveled here from Europe and elsewhere in Asia for the annual event, held Oct. 22 to 25, said that, while the fair was busy, there seemed to be a loss of momentum as apparently fewer Westerners attended.

Intertextile organizers did not respond to requests for atten-dance figures, but observers said some exhibitors reduced their booth size this year because of weak economies in the West.

The lack of international visi-tors was most apparent in sec-tions designated for Chinese apparel makers, where scores of textile manufacturers reported slow business.

“This year, in terms of the people who are attending, it seems like less than last year,” said Shi Changjiang, a sales associate with HTT Material Technology Co., a manufacturer based in Fujian Province spe-cializing in fabrics for sports-wear. “Most of the foreigners coming are already our custom-ers. Last year, there were lots of new faces from abroad.”

Business in the U.S. for HTT Material Technology, which makes apparel for companies including Columbia Sportswear and Nautica, is stable, while sales to Europe have been slight-ly more volatile. Shi said orders have sharply declined in the do-mestic market, where a number of Chinese sportswear brands, such as Li Ning and Anta, have

experienced dramatic declines in profitability due to fierce com-petition from foreign players and changing consumer tastes in the sportswear category.

“We were shocked by the de-crease” in the Chinese market, Shi said. “The domestic market has been the most up and down.”

He added that the manu-facturer is finding it harder to maintain margins due to rising raw material and labor costs combined with clientele who are unwilling to pay higher pric-es for fabrics. He said sales are down 20 percent this year.

The situation was even bleak-er for Bosun Textile & Garments Co. Ltd., a maker of men’s suit-ing fabrics in Zhejiang Province near Shanghai.

“Some of our [foreign] custom-ers have gone out of business,” said Allen Zhang, a Bosun manag-er. “It is very bad. Customers are very careful with placing orders because actually they are not so sure how the market will be. It is very hard to guess.”

The manager said profits are down 20 percent this year, and there is continued concern in the industry that if the Chinese yuan appreciates further against the dollar, margins will become even thinner.

Zhang said the company is focusing on expansion in the Chinese market to try to offset any further declines in its ex-port business.

“The Chinese market is still very good,” he said. “It is a very big market and there is a lot of potential. Chinese still have money to spend.”

If anything, the Shanghai Intertextile show served as a weather vane for where domes-tic brands are betting Chinese will spend money on apparel. In

an exhibition hall with Chinese denim manufacturers there was more of a bustle, but mostly with local buyers sourcing for Chinese retailers. According to Vincent Qin, general manager for mar-keting and sales with Prosperity Textile Ltd., a denim maker for a number of foreign brands, in-cluding Levi’s and Zara, Chinese stores are increasingly looking to launch their own denim lines to compete with international play-ers in the market.

“All the domestic brands want to follow the latest European trends,” Qin said. “So they want to work together with us because we can share some information with them, some in-ternational resources and help them develop more European looks. We have to show the do-mestic brands we have a good international market.”

Qin said 50 percent of the Guangzhou-based Prosperity’s business now comes from China. Europe makes up around 30 percent and America around 20 percent.

“The U.S. market is dropping because of pricing issues,” he said. “Their target price is far away from our costs. India and Pakistan, their price is more competitive.”

Pier Luigi Loro Piana, chief executive officer of the Italian luxury brand and high-end fab-ric maker Loro Piana, said de-mand in China for expensive materials is continuing to grow and that, even with a slowing do-mestic economy, Chinese brands are willing to pay a premium for European luxury fabrics.

“It is quite an important mar-ket for us,” said the executive, adding that he expects China to become around 30 percent of the company’s export business. “The high-end segment of the market is growing faster than the lower level. I see a good po-tential in the future to supply more and more sophisticated, high-quality fabric [in China].”

Loro Piana said while he is concerned that a decline in ex-ports to the West might hurt the Chinese economy in the short term, he feels like the country can weather any external eco-nomic storms by boosting do-mestic consumption.

“People are saying they don’t see any deep risk of a recession or decline in demand, particular-ly in the high-quality segment,” he said. “I am positive about next year. I think it will not be booming, but there will be steady growth that will continue.”

China’s gross domestic product expanded 7.4 percent in the third quarter of 2012.

Loro Piana had a small exhibi-tion in a special Milano Unica ex-hibition within Intertextile. The Italian trade fair created its own platform inside the show in an at-tempt to form a more unified front of Italian textile makers to market themselves to the Chinese.

Other international sellers, including the German-based Amann Group, which makes high-end threads, also said demand from China remained strong.

“In China, there are lots of high-quality brands,” said Jeff Luo, a general manager with Amann. “They want the high-quality stuff.”

7WWD TUESDAY, NOVEMBER 6, 2012

Intertextile Hit by Sourcing Shifts

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WWD.COM8 WWD TUESDAY, NOVEMBER 6, 2012

PARIS — Cacharel said Monday it has parted ways with chief executive officer Pascal d’Halluin after less than a year.

D’Halluin, who took up his post March 19, is leaving by mutual agree-ment with Cacharel founder and presi-dent Jean Bousquet following his trial period, said a spokeswoman for the French label, conforming a report in French daily Le Figaro.

Bousquet is to make a statement in mid-November regarding the organi-zation of the firm, which has been re-duced to a licensing operation since implementing a restructuring plan in 2010 that involved selling its out-let stores and men’s wear division in order to preserve jobs and fund future development, the spokeswoman added.

The Cacharel brand, which shot to fame in the Sixties and Seventies with its youthful, romantic style, has under-gone multiple changes in management and creative direction in recent years.

D’Halluin succeeded manag-ing director Marc Ramanantsoa, who held the top job at the company until his departure in October 2009. He previously held senior manage-ment positions at L’Oréal, Lee Cooper France and Montaigne Diffusion, the Devanlay subsidiary in charge of dis-tributing the Lacoste brand in France.

Cacharel’s collections, under the creative direction of design duo Ling Liu and Dawei Sun since June 2011, are manufactured by Italy’s Aeffe SpA.

— JOELLE DIDERICH

8

ELIZABETH ARDEN INC.’S first-quarter profits fell sharply as the company focused on reshaping its namesake brand.

Net income declined 76.3 percent to $2.2 million, or 7 cents a diluted share, from $9.2 million, or 31 cents, a year earlier. Adjusting for costs to reposition the Elizabeth Arden brand as well as acquisition costs, income rose to 44 cents a diluted share, 2 cents better than the 42 cents analysts projected.

The company has said the changes it’s making could double the size of the Elizabeth Arden brand. Arden also took an interest in licensee Red Door Spa Holdings in September.

The company’s sales for the three months ended Sept. 30 rose 13.5 percent to $344.5 million from $303.5 million.

“Although early in the rollout, we are experiencing strong retail sales perfor-mance at the flagship doors with our revitalized Elizabeth Arden products,” said E. Scott Beattie, chairman, president and chief executive officer. “As we look forward to the holiday season, we believe that our significant innovation along with the continued rollout of Elizabeth Arden branded products has us well po-sitioned to continue our positive performance.”

Arden confirmed its 2013 guidance for adjusted earnings per share of $2.55 to $2.70. Shares of the firm slipped 2 cents to $47.49. — E.C.

By EVAN CLARK

THE FINANCIAL successes of Michael Kors, Brunello Cucinelli and others have helped create a wave of not only design-ers striving to make it big but investors wanting to buy in early.

Connecting the two groups is the aim of Elsa Berry, who has gone out on her own and founded Vendôme Global Partners, an investment bank. Berry, a New York native who was raised and educated in Paris and is managing director, comes at the task with a decidedly global point of view.

“For many years, small, growing companies had sometimes decades in front of them to grow in the United States before they had to think about in-ternational,” Berry said. “Everything is faster: their own growth, the travel-ing of Chinese, Brazilians, Russians around the world. Brands really are visible sooner, and smaller com-panies can earlier in their growth pat-tern start thinking about other pockets of growth in other parts of the world.”

The idea is to develop relationships with promising brands early and connect them with the right consultants, financing and in-vestors to help them grow, and then, when the time comes, help them find a buyer.

Berry said she wants to take the chal-lenges facing growing businesses and put them on a “human scale.”

“That means it’s really sensitive to peo-ple and not just an organizational thing,” she said. “Owner to owner — understand-ing the psychology of the issues and un-derstanding what goes through the head of a founder when they have to think about whether or not now’s the right time.”

These are issues Barry understands as both a banker and an entrepreneur. The company’s name is a play on Place

Vendôme, the luxury hub in Paris, as well as Vendôme & Co., the mergers and acqui-sitions firm Berry founded in 1983 and ulti-mately sold to BNP Paribas. There was also an unrelated Vendôme Luxury Group that a decade ago grouped the luxury holdings of Compagnie Financière Richemont before being subsumed into the overall group.

The new Vendôme will focus on busi-nesses in the apparel, beauty and acces-sories spaces that have annual sales of roughly $50 million to $300 million.

Berry is a refugee of sorts from big banking, having spent years connecting buyers and sell-ers for the likes of BNP and Houlihan Lokey. But now she can color outside the lines at her own discretion as she seeks to link up with promising businesses, even if their sales fall outside of Vendôme’s sweet spot.

“As entrepreneurs, we will look [at smaller businesses],” she said. “We don’t have a certain minimum success fee that we have to have. We’re more interested in the story.

We’re building along with our clients.”Berry said there are plenty of buyers

for good brands, from the luxury giants with portfolios of designer brands, to pri-vate equity firms and wealthy families and investors in the Middle East, Russia, Asia and Brazil.

Despite all the focus on the global mar-ket, Berry said New York is the right base for her new venture.

“New York is coming back as a center for creativity in design and fashion and jewelry and accessories,” she said. “This is a return. It had not been that way for many years. I feel a lot more creativity — and in [Los Angeles] to be fair. It’s almost like there’s a mini American Renaissance where there’s confidence and there’s creativity. You have these brands that are starting and they’re dreaming right away about how they can make a sale, à la Michael Kors.”

Elsa Berry

By DAVID MOIN

TWICE A YEAR, the Macy’s Inc. board takes store tours, but along the route, chairman, president and chief execu-tive officer Terry J. Lundgren tends to slip away.

“You can’t find him. He’s always standing on the side talking with a group of sales associates,” said Meyer Feldberg, dean emeritus of Columbia

Business School and a member of the Macy’s board. “People like to be with Terry. He connects.”

Under the grand rotunda of Columbia’s Low Memorial Library, Lundgren was presented with the 2012 Deming Cup, named after the late W. Edwards Deming, a professor, statisti-cian, author, consultant and business innovator best known for his work in Japan in the Fifties teaching top man-agers about product testing and quality and elevating design. Lundgren was honored for making “the bold calls and navigating Macy’s through profound changes,” including doubling the size of the company through the acquisition of May Department Stores Co. in 2005, nationalizing the Macy’s nameplate, and localizing assortments by creating

the My Macy’s field organization.Ratan N. Tata, chairman of Tata

Sons Ltd., was also honored with the 2012 Deming Cup for turning his com-pany around and transforming what was a family-owned Indian conglomer-ate into an international organization.

“The key to all this is crystal clear — constant communication all the way down to the selling floor,” Lundgren said. “We can get in the way if we are not listening closely to what associates

need from us.” C o m m u n i c a t i o n

skills were most neces-sary when Lundgren decided to rename as Macy’s all the stores purchased, even the venerable Marshall Field’s and Filene’s. “Changing the name of 400 stores was not nec-essarily popular in any city. But we did it with a great deal of caring and listening,” he said.

Lundgren also said that My Macy’s has been “the biggest win” for the company, and that the My Macy’s field organization does what

no technology can do — it figures out what’s lacking in the stores that custom-ers want. “Our story is a human-driven strategy.…Dr. Deming lives and breathes in our company,” Lundgren said.

The Deming Cup award dinner, which drew 250 guests including Henry Kissinger, who introduced Tata, supports the activities of W. Edwards Deming Center for Quality, Productivity and Competitiveness, including study tours to emerging countries for faculty members teach-ing operations and strategy; applied research fellowships for doctoral stu-dents, and the development of study cases on the Deming Cup recipients to propagate Deming Principles, and a health care conference next spring focusing on process improvement.

The five winners of the Deming Cup: Terry J. Lundgren, Ratan Tata, former IBM ceo Sam Palmisano; Chrysler ceo Sergio Marchionne, and Brent James of the Institute for Health Care Delivery Research.

Arden Q1 Net Income Plummets 76.3%

Cacharel CEO Pascal d’Halluin Exits

Industry Steps Up to Aid Hurricane Victims

Lundgren Wins Deming Honor

Vendôme Aims to Link Brands, Buyers

Wal-Mart Stores Inc. pledged up to $1.5 million to help with relief efforts — the American Red Cross, Salvation Army and Feeding America — in the hardest-hit areas. Responding to requests from government officials, Wal-Mart trans-ported generators to schools and hospi-tals in New York and delivered about a million bottles of water throughout the Northeast. On Sunday, it also hosted the World’s Largest Grill in its parking lot at 400 Park Place in Secaucus, N.J., prepar-ing hot meals for those affected by the power outages. Its supplier, Johnsonville, brought the brats and the grill, and Wal-Mart and the clubs provided the buns and the drinks, and its as-sociates volunteered to help feed the com-munity. Sam’s Clubs in the Northeast are also offering cell-phone re-charging stations and temporarily waiving membership fees to those areas affected by Hurricane Sandy.

Gap Inc. will give $1 million to help victims of Hurricane Sandy. It has distrib-uted more than $250,000 worth of clothing in New Jersey, one of the areas hit hard-est by the storm, and $750,000 in cash to provide help and necessities for those in affected areas.

Nordstrom Inc. has contributed $200,000 to its Employee Relief Fund and $200,000 to the American Red Cross.

Kohl’s Corp. has also pledged a $1 mil-lion cash donation toward Hurricane Sandy relief efforts along the East Coast. Kohl’s is donating this money to the American Red Cross.

Target Corp. has donated $500,000 in

monetary support and products to assist with Hurricane Sandy relief efforts. The donation includes $425,000 in cash and in-kind donations to the American Red Cross, $50,000 in a cash donation to the Salvation Army and $25,000 in gift cards to local Target stores to help with commu-nity needs.

Macy’s Inc. began a drive Sunday to raise $1 million for relief efforts. Customers in all Macy’s stores nationwide can contribute $1 or more to hurricane recovery efforts, and Macy’s will match customer donations on a dollar-for-dol-lar basis, up to $500,000 in order to give more than $1 million. All funds are going to the American Red Cross. In addition,

the Macy’s Foundation plans to match employ-ees’ contributions of $25 or more to organi-zations providing relief assistance and services.

California-based Ross Stores Inc., which has locations on the East Coast, has pledged $250,000 in cash to the

American Red Cross. Fashion Delivers was set to hold its annu-

al fund-raising dinner event on Wednesday and is changing the event to a cocktail party. The planned 700 dinners instead will be do-nated to two Citymeals-on-Wheels agencies to feed elderly victims in Manhattan who were affected by Hurricane Sandy.

Fashion Delivers, which so far has col-lected $5 million in product donations from retailers and manufacturers, is setting up distribution centers to work with local agencies for pick up. It is still seeking ad-ditional product donations from companies.

— WITH CONTRIBUTIONS FROM VICKI M. YOUNG

700THE NUMBER OF DINNERS

DONATED BY FASHION DELIVERS.

{Continued from page 2}

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WWDSTYLE

Preflight Check

NEW YORK — Final preparations for the

annual Victoria’s Secret runway show

on Thursday included a last-minute fitting

for “Angel” Cameron Russell’s Swarovski-

enhanced under things on Monday. For more,

see page 10.

FamilY niGHT: Jessica alba turned out for Baby2Baby.PaGe 10

MeMo padFamily NightCHanGinG OF THe GUarD: Julie Berman,

senior vice president of corporate communications at Ralph Lauren Corp., has resigned her post after four-and-a-half years. She will stay with the company until the end of the year and will then pursue other opportunities.

She will be succeeded by Winnie lerner, president of The Abernathy MacGregor Group, which provides financial public relations, M&A and investor relations counsel to companies across a range of industries. Lerner, who focuses on the retail-consumer and technology sectors, currently directs programs for such companies as Hewlett-Packard Co., PepsiCo. Inc., Wal-Mart Stores Inc.’s international division, the Estée Lauder Cos. Inc. and Ralph Lauren Corp. Prior to joining Abernathy 16 years ago, Lerner worked for the House of Representatives subcommittee on telecommunications and finance as a legislative assistant on telecommunications and broadcast issues. Lerner starts at Ralph Lauren Dec. 10 and will report to David lauren, executive vice president of advertising, marketing and corporate communications. — lisa lOCkWOOD

FOUr DeCaDes: stefano Tonchi, W’s editor in chief for the past two years, is ringing in the magazine’s 40th anniversary with a promotional blitzkrieg. The 30th birthday was celebrated too, but 10 years later, W has a new ad-thick November issue and a newly redesigned iPad app. The centerpiece of the rollout is a new glossy coffee-table anthology that looks back at W’s history from the days it was a biweekly broadsheet. It was one of the first projects to land in Tonchi’s lap when he joined — there was already a pending contract with publisher Abrams — and he took it on as a celebration of the magazine.

“One of the important points I wanted to make was about the heritage of W as a kind of lifestyle publication,” he said recently from his office at Condé Nast’s Sixth Avenue building.

The book, which is in stores this week, is separated into three sections that look at W’s obsessions: the rich and famous — Jackie Kennedy, Pat Buckley; their homes, and excellent photography. In between, there are gatefolds dedicated to the magazine’s covers, its party coverage and its two gossip columnists, Suzy and Countess Louise J. Esterhazy.

But tribute though it may be, it comes as Tonchi tries to put his own stamp on the magazine.

For most of its time, W has been associated with high society — the John Fairchild years — and later, under Patrick mcCarthy, with strong fashion photography. Tonchi has loftier ambitions, and he wants his anthology and the magazine to be taken seriously.

“It’s not just a coffee book. I really didn’t want a photography coffee book,” Tonchi said. “I wanted something people could actually learn from and learn about what the magazine is about. It’s about editorial choices. It’s not just about reproducing images.”

Tonchi is proud of the project for another reason — it’s his conception alone. Since his arrival, W’s ad pages have surged — they are up 12 percent through November, according to Media Industry Newsletter, but some of the credit inevitably goes to former publisher nina lawrence, who left in October; lucy kriz was named as her successor this month.

“[Lawrence] was important in conceiving the November issue. She saw it as an important way to get advertising. She didn’t have any input on the book. It’s completely an editorial project,” he said. — erik maza

FamilY niGHT: Jessica alba turned out for Baby2Baby.

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10 WWD TUESDAY, NOVEMBER 6, 2012

ThaT The baby boom has overtaken hollywood was evident in the starlet power at Saturday’s first Baby2Baby gala, held at The BookBindery in Culver City, Calif.

Jessica Alba, Julie Bowen, Jessica Capshaw, Busy Philipps, Molly Sims, Rachel Zoe, Soleil Moon Frye, Rebecca Gayheart and Nicole Richie were among those involved with the local charity led by copresidents Kelly Sawyer Patricof and Norah Weinstein.

“It started as a little grassroots group to gather donations for moms and babies, and now we’ve got diamonds,” said Patricof, referring to presenting sponsor harry Winston, whose wares were displayed in vitrines throughout the industrial space and on guests such as Zoe and Jenni Kayne.

“Of course, there had to be something for the husbands, too, so we made sure to have amazing chefs cooking tonight,” she added, noting that hipster chefs Jon Shook and Vinny Dotolo enlisted their friends Roy Choi, Josiah Citrin,

Neal Fraser, Suzanne Goin, Ilan Halls, Rory Herrmann, Ludovic Lefebvre, Zoe Nathan, Dahlia Narvaez, Candace Nelson, Zach Pollack and Steve Samson, Michael Voltaggio and Micah Wexler to help with the luxe food stations. The enticement made it hard to stay away for guests Amanda Anka and Jason Bateman, Oliver Hudson and Erinn Bartlett, Mindy Kaling, Ali Larter, Natasha Wagner, Devon Aoki, and Molly Sims’ husband Scott Stuber, who said, “I don’t have to worry, because she’s the one who gets her photo taken.” — Marcy Medina

LIZ GOLDWyN added a vintage flourish to her latest art project on Saturday night, the debut of “The Painted Lady,” a short film she wrote and directed featuring Jena Malone. “Location was everything,” Goldwyn said of searching for the perfect venue for the screening, which was presented by MaC Cosmetics. She settled on the historic hearst Suite of Los altos apartments

in Los angeles, which was transformed into a 19th-century brothel complete with different rooms housing live tableaux of women costumed as “ladies of the house.” The Like drummer Tennessee Thomas also lent her dancing skills to the installation, though she was one of the few performers who wore her skivvies.

“The film and installation are part of a larger project

I’m working on about the history of prostitution,” Goldwyn explained, noting that it’s a follow-up to her book and documentary about the burlesque world. Fittingly, the friends who came out to support her know a bit about drama and art: Dita Von Teese, Chloë Sevigny, Jenny Lewis, Shiva Rose, Cameron Silver, Jeffrey Deitch, Nora Zehetner and Gina Gershon. — M.M.

Hollywood Madam

Big Babies For more photos, see

WWD.com/eye.

Jessica Alba in Valentino.

Rachel Zoe in her own design.

Jason Bateman and Amanda Anka

Jena Malone in Proenza Schouler. Liz Goldwyn Dita Von Teese

The scene at the party.

Jeffrey Deitch and Chloë Sevigny

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an exCLuSIve behind-the-scenes look at the victoria’s Secret fashion show revealed the glam, glitz and show-biz drama that will be unveiled Wednesday at new York City’s 69th Regiment armory.

In the wake of hurricane Sandy, the victoria’s Secret of-fices in Manhattan were packed Monday with a slew of design-ers, costumers, beaders, stylists, and hair and makeup artists, as well as several angels, such as Miranda Kerr and Adriana Lima, who came in for fittings — even as the costumes were being constructed and sewn together for Wednesday’s shows.

There will be two fashion shows — one at 4 p.m. and a sec-ond at 8 p.m. — at the armory, where generators and forklifts rented by victoria’s Secret were loaned to the national Guard during the disaster. Throughout the hurricane emergency, the lingerie retailer provided hotel rooms in new York City for cre-ative talent to continue working on costumes as well as show and stage props.

Costume-shop artisans Jamie Filippelli and Mary Shaffer were working feverishly Wednesday on a costume commemorat-ing the 10th anniversary of

Swarovski elements’ partner-ship with the victoria’s Secret Fashion Show, a fantasy concoc-tion of Swarovski crystals and beads sewn onto nude-tone net-ting. The idea is to “make it look like the crystals and beads are floating in the air,” explained Filippelli of the star piece, which will be shown in the Silver Screen angels segment.

The entire show features Swarovski crystals, but several other key pieces stood out, such as the exotic Snake Charmer piece in the show’s opener, Circus.

Jewelry designer David Mandel was creating a four-foot Diamond Back python in a myriad of brightly colored Swarovski crys-tals and vintage crystals from his personal collection. Key ac-cessories were snake eyes from a taxidermist. “Metal doesn’t drape....I’m literally sculpting with stones, and sometimes I have to solder pieces in mid-air to get the right angle,” said Mandel. he turned around to show another costume for the angels in Bloom segment, which will feature scores of hothouse flowers such as an oversized hibiscus embedded on a lavish multicolor costume.

In another area, Armando Farfan, a costume specialist from

Las vegas, was piercing narrow monofilament tubing to be sewn into costume hems.

“The models have to be able to walk, and you have to have a piece that stands up to the motion and look great as the lights are flashing…monofilament along the hems adds body,” said Farfan.

Miranda Kerr had just finished her fitting in an emerald-green velvet bodysuit encrusted with Swarovski crystals and dyed-to-match feathers for the Circus segment. Cameron Russell stepped out in the Swarovski anniversary piece in fantasy platforms by nicholas Kirkwood. She wore what appeared to be well more than $5 million in jewels by London Jewelers, including a 16-carat diamond ring.

“This year’s show will open with a spectacular theme that sets the tone for the entire show....There will be nostalgic romance, historical fashion and epic references to pop culture,” said collection designer Todd Thomas, who works with Sophia Neophitou-Apostolou, collection cre-ative director.

The show, which will pres-ent 65 costumes and 28 pairs of angel Wings, will also head-line three major entertainers: Rihanna, who will perform dur-ing the Dangerous Liaisons segment; Justin Bieber, who will sing in the collegiate Pink is Me session, and Bruno Mars, who will croon in the Calender Girls venue. — Karyn Monget

Angels Away

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Todd Thomas fits a costume on Cameron Russell.

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WWD.COM11WWD TUESDAY, NOVEMBER 6, 2012

Pinault Wins Round in Insurance Case

Fashion scoops PLEASE HOLD: With New Yorkers still trying to return to some semblance of a normal work week, the 92Y has postponed today’s talk between Marc Jacobs and Fern Mallis. The discussion will now be held Jan. 9 at 8 p.m. and tickets purchased for today’s event will be honored at that time. There are about 920 people expected at the sold-out event.

Stylist and fashion editor Polly Mellen on Dec. 12 will be the next personality to get the grilling in Mallis’ Fashion Icons series. She will be followed by Jacobs on Jan. 9, Betsey Johnson on Jan. 16 and a new addition to the roster, Vera Wang on Feb. 19. — ROSEMARY FEITELBERG

NATIVE SON: Jason Wu touched down in Taiwan on Thursday following a stop in Beijing for a Vogue China event. The 30-year-old designer received the kind of reception normally given to a pop star that’s been out on tour for two years. That’s how long it’s been since he was last in Taipei.

On Friday, he gave a speech at Taipei’s Shih Chien University, where he emphasized the importance of hard work and thanked his mother, who sat proudly in the audience. This was followed by a panel discussion with two other Taiwanese artists. Although he delivered his opening speech in English, Wu spoke Chinese during the rest of the event, charming guests will his humility and humor, even correcting his translator at one point.

“There’s been a lot of growth in fashion design in Taiwan in terms of education,” Wu said of his first visit to the campus. “Shih Chien University in particular has been credited for bringing a lot of knowledge to fashion for a lot of students who wish to pursue that.”

This will be the third year that three students from the school’s fashion program will be selected for year-long internships with the designer in his New York studio.

“I’ve been fortunate enough to have students look up to me and I try to fulfill my duty as a citizen of Taiwan by helping educate the kids and giving them opportunities because I was given so much not that long ago when I was a student,” Wu said. “[Fashion design] has become really prominent and popular in the last 10 years. That’s definitely a huge difference from when I grew up and the emphasis was more on academics.” — MENGLY TAING

BYRNE’S NIGHT: Sir Paul Smith is saluting Talking Heads with a capsule collection of four T-shirts based on the band’s album covers. “Music is a big part of my life, and I have always enjoyed collaborating with musicians,” said Smith. “I’m a big fan of Talking Heads, so to be given access to their archive was a real privilege.”

Smith created the shirts after gaining access to lead singer David Byrne’s Talking Heads archive in New York. The archive, comprising backstage passes, photographs, storyboards, set lists and Byrne’s original artwork, has never been published. The album cover from “Remain in Light”; the single cover from “Road to Nowhere”; a sketch of Byrne’s famous big suit, and gig passes that Smith discovered in the archive have all been made into T-shirts.

On Nov. 14, Byrne will be the guest of honor at Smith’s Fifth Avenue store in New York, where the collection will be unveiled. Each T-shirt will have a swing ticket with a note from Smith about the individual design, and the inspiration behind it. The T-shirts will initially be sold exclusively in Paul Smith shops, and on the brand’s Web site. — SAMANTHA CONTI

WARNACO POSTS Q3 RESULTS: Warnaco Group Inc., which last week said it will be acquired by PVH Corp. in a deal valued at $2.9 billion, said net income for the third quarter ended Sept. 29 fell 7.8 percent to $41.1 million, or 98 cents a diluted share, from $44.6 million, or $1.03, last year. Net revenues declined 5.2 percent to $611.5 million from $645.1 million.

Helen McCluskey, president and chief executive officer, said, “Gross margin expansion and expense discipline more than offset a decline in net revenues, driven primarily by the impact of

currency and macro challenges.”By segment, the sportswear

group’s net revenues fell 5.7 percent to $337.4 million, while the intimate apparel group declined 6.3 percent to

$232.2 million. The smallest segment, the swimwear group, was also its best performing business, gaining 6.7 percent to $42 million.

— VICkI M. YOUNG

PROJECT MOVES NORTH: New Project president Tommy Fazio is moving the New York edition of the trade show uptown to Pier 90 in January, from the SoHo space it has shown in the past few seasons. The change brings Project closer to the MRket show at the Jacob K. Javits Convention Center and the ENK NYC show at The Tunnel/La.Venue — but further away from the Capsule show at Basketball City on the Lower East Side waterfront. Pier 90, on the Hudson River and 50th Street, is a passenger ship terminal and exhibition space. Fazio said the move should create a more dynamic space for Project’s exhibitors and attendees. — DAVID LIPkE

SINGULAR STYLE: Initiatives in Art & Culture will present “One of a Kind: Individuality, Integrity and Innovation in Fashion” from Nov. 30 to Dec. 1. The 14th annual fashion conference will feature such speakers as Robert Lee Morris, Zang Toi, kara Ross, Maria Cornejo, Cameron Silver and Tracy Reese. In addition, Stephen I. Sadove, chairman and chief executive officer of Saks Inc.; Deborah Turbeville, and Valerie Steele, director and chief curator of The Museum at FIT, will give presentations. The event takes place at The Graduate Center, The City University of New York. — LISA LOCkWOOD

OUT OF THE BLUE: French actor and model Gaspard Ulliel, the face of Chanel’s male fragrance Blue, will play the role of Yves Saint Laurent in a new biopic to be directed by Bertrand Bonello, according to Eric Altmayer, the producer of the film. Shooting on “Saint Laurent” is due to start next spring, he added. The film is cowritten by Bonello — whose last feature, “House of Tolerance,” premiered at the Cannes Film Festival last year — and Thomas Bidegain, known for his work with director Jacques Audiard on “Rust and Bone” and “A Prophet.”

Ulliel is best remembered for his role as a young Hannibal Lecter in “Hannibal Rising,” and was recently seen in the historical drama “The Princess of Montpensier.” He has also appeared in a campaign for Longchamp alongside kate Moss. — JOELLE DIDERICH

JOINING THE APP RACE: Prada’s first iPad app has made its debut. Following the launch in October of a limited-edition art book by illustrator Richard Haines, who created a series of drawings based on Prada’s men’s wear fall 2012 collection, the Italian company has launched Il Palazzo, an app available on iTunes only for iPad.

Developed by Hollywood-based visual-effects specialist James Lima, the app enables visitors to take a tour into a virtual palazzo, which will serve as a digital platform to present a series of the brand’s capsule collections and special products. Il Palazzo currently shows the Prada men’s and women’s Portrait sunglasses collection, while, later this month, it will unveil the Bloom jewelry range, consisting of necklaces, bracelets and earrings featuring flowers set in plexi frames. — ALESSANDRA TURRA

BEST FOOT FORWARD: Sergio Rossi’s creative director Francesco Russo and chief executive officer Christophe Mélard mingled with Tokyo’s fashion editors on Friday night at a cocktail party to fete the footwear brand’s newly refurbished store at Takashimaya Times Square. The 924-square-foot boutique, in line with the brand’s current retail concept, features a black-and-white herringbone-pattern Italian marble floor and brass accents. Although he declined to give sales figures, Mélard said the brand is performing well and even seeing growing sales in Japan. He said the brand would like to open a new Tokyo flagship — possibly in Ginza — in the near future.

Russo, who said he comes to Japan about once a year, was gearing up for a four-hour Kabuki performance the following day. “I saw it already once and I loved it,” he said. — AMANDA kAISER

By MARCY MEDINA

LOS ANGELES — François Pinault has prevailed in the long-running legal battle between Artemis SA and California’s in-surance commissioner, at least for now.

After an eight-day federal jury trial in the U.S. District Court, Central District of California here, jurors on Oct. 29 rejected the claim in which the California insurance commissioner was seeking $4.33 billion in profits and interest stemming from the sale of a California life insurance company and junk-bond portfolio to French investors in 1991.

Artemis, the holding company through which Pinault controls luxury conglomerate PPR, acquired part of the junk-bond portfolio in 1992 and a controlling stake in the insurance

company. The case first went to trial in 2005 and Artemis was the only one of the French defendants that didn’t set-tle with the insurance commissioner.

“After 13 years of litigation, the jury’s verdict on the last remaining damage theory confirms what we have been say-ing all along: Artemis did not cause any damage to anyone,” said Robert Weigel, the New York-based attorney represent-ing Artemis.

Gilles Pagniez, Paris-based legal counsel for Artemis, said, “We are very satisfied because the popular jury found in our favor.” He added that the judge would publish a formal ruling by year-end and the California insurance com-missioner may yet appeal the decision. However, any appeal would likely not come until next year.

— with contributions from Joelle DiDerich

Francesco Russo and Christophe Mélard

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Jason Wu in Taiwan.

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