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February 21, 2013
Macy's, Penney's, MSLO Square Off in Court
By ALEXANDRA STEIGRAD
NEW YORK — The battle begins.
Lawyers from Macy’s Inc., Martha Stewart Living Omnimedia Inc. and J.C. Penney Co. Inc. filed into Judge
Jeffrey Oing’s rickety, dimly lit courtroom Wednesday to begin the first day of what has become one of fashion’s
most watched legal contract cases. The bench trial in New York Supreme Court is expected to last until March 8.
In the days to come, the wood-paneled room will likely welcome a trio of retail power players — Terry J.
Lundgren, chief executive officer of Macy’s, Ron Johnson, ceo of Penney’s and MSLO founder Martha Stewart.
On Wednesday, the packed courtroom played host to legal stars only. For Macy’s, Theodore Grossman, of Jones
Day, kicked off Day One with opening statements, in which he outlined his client’s contract with Martha Stewart.
Citing e-mails gathered from discovery, the lawyer mapped out the events leading up to Stewart’s second deal
with rival Penney’s, in addition to what he deemed a kind of conspiracy by Johnson and his cohorts to have
Stewart breach her contract with Macy’s.
“Ron Johnson’s goal was to get Macy’s to step away,” Grossman said in his 70-minute opening statement.
Last year, Macy’s sued Stewart and Penney’s after the two inked a deal that would allow Stewart to sell her
branded goods in shops-in-shop within Penney’s stores this spring. The retailer claimed the deal breached its
original contract signed in 2006, in which it had the exclusive right to sell certain Martha Stewart-branded goods.
Penney’s, which bought a 16.6 percent stake in MSLO when it signed its deal, lost a preliminary injunction over
the summer that barred the retailer from selling certain home goods, including branded kitchen wares and
bedding. Penney’s is permitted to move forward with its agreement with Stewart in other products, however, and
plans to sell the goods under its “JCP Everyday” brand.
“Martha Stewart’s agenda was to market to both stores [Penney’s and Macy’s],” Grossman said, explaining that
MSLO had been searching for a “loophole” so it could enter into a deal with Penney’s.
RELATED STORY: Macy's, Martha and Penney's Ready for Trial >>
Stewart hired Peter J. Soloman to search for that loophole, Grossman said, and the advisory firm identified the
“shop-in-shop” concept. In her original deal with Macy’s, Stewart had a provision that would allow her to open
her own stores one day, as long as they didn’t compete with Macy’s. Grossman said MSLO pointed to the proviso
as a justification to ink the Penney’s contract deal. The lawyer, who periodically referred to two large display
boards depicting timelines of key MSLO dealings with Macy’s from 1987 to the present, read aloud Johnson’s e-
mails documenting the agreement.
In one e-mail, the Penney’s ceo said if they could “break the renewal right” of Macy’s MSLO contract, thus
gaining exclusivity to Martha Stewart-branded goods, it could translate to sales of “a billion a year, perhaps $2
billion.” Macy’s renewed its contract with MSLO, despite filing this lawsuit.
Once the newly anointed ceo, who is in the process of revamping Penney’s retail strategy, learned of the shop-inshop
“loophole,” he estimated that with partial exclusivity, Penney’s could earn $250 million in incremental
profits from a Martha Stewart deal, Grossman said.
As soon as MSLO and Penney’s worked out an agreement, Stewart sent an e-mail to Lundgren telling the Macy’s
ceo that MSLO would be “announcing a very important deal” the next morning that is “positive” for both

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companies — “although you might not think so at first,” she added.
Grossman then read several e-mails in which Penney’s executives imagined Lundgren’s reaction. One proclaimed
the ceo would have to “start” working again, while another said Lundgren would have a migraine. Michael
Francis, then president of Penney’s, said in an e-mail: “I think Terry is more likely to race past migraine to grand
mal seizure.”
Before ceding the floor to the defense, Grossman warned Judge Oing that in the days to come Lundgren, Johnson
and Stewart should be regarded with caution. “All of them are charming, but charm can come from sincerity or it
can come from something else,” he said. “The court will have the ability to assess their candor…respect for their
employees, respect for the law.”
Mark Epstein, lawyer for Penney’s, rerouted the focus to MSLO’s original deal with Macy’s, noting that his rival
never discussed the contract in his remarks.
“The contract is where this case lives,” Epstein said. “If Macy’s wins, the consumer loses competitive choices and
competitive pricing.”
The attorney tackled issues regarding design and Martha Stewart trademarks. First, he said Macy’s asserts that
there is a limitation on MSLO’s design capacity on product. Delving into the contract, he noted that it never says
Stewart can’t design for other entities.
Epstein moved on to Macy’s claims that the “JCP Everyday” brand and the double-house logo used by Penney’s
on Stewart wares refers to Martha Stewart trademarks. Earlier, Grossman argued that “Everyday” was
synonymous with Martha Stewart, dating back to her deal with Kmart in the Eighties. The alleged trademark
infringement claims, if valid, would violate the preliminary injunction granted by Oing over the summer, Epstein
offered.
“They bring it now not because it’s a violation of the injunction,” Epstein said. “They do this because they’ve
already hit a home run.” He explained the court could order to “turn the boat around” with all the Stewart for
Penney’s merchandise and “go back to China, leaving the shelves empty.”
Epstein also addressed the e-mails, which “paint a sinister picture.”
“Ron Johnson didn’t want Martha Stewart to breach the contract,” he said, noting that, when read in detail,
Johnson believed the deal would benefit all parties and increase competition.
“This is not unfair competition. It’s just competition and there’s nothing wrong with that,” Epstein added. “This
didn’t have to be and shouldn’t have been a blown-up claim about personalities and a vendetta against J.C.
Penney and Ron Johnson. It’s a contract dispute at it’s heart.”
Eric Seiler, MSLO’s attorney, echoed Epstein, but said his client is “the little guy” in this case, just trying to
“survive.”
Seiler reminded the court that Stewart was a well-known brand before it got involved with Macy’s.
“We own all trademarks. We own all the designs,” he said, noting that Macy’s is trying to take “credit” for Martha
Stewart’s success as a brand.
“This would be like Macy’s taking credit for Thanksgiving because they supported the parade,” he said with a
thinly veiled layer of sarcasm.
Jokes aside, the lawyer brought the focus back on the Macy’s contract, a document both defendants have pored
over, as they prepared for trial.

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“There’s this effort to transform the contract to something it’s not,” Seiler said. “Terry Lundgren didn’t read the
contract or write the contract, and now we’re being sued for what he hoped was in the contract. We’re being sued
for the ‘hoped for contract.’”
The trial continues today at 10:30 a.m.
WWD
Copyright © 2013 Fairchild Fashion Media. All rights reserved.

Video - Do Wal-Mart's Sales Still Reflect U.S. Spending? - WSJ.com
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HEARD ON THE STREET
Updated February 21, 2013, 4:50 p.m. ET
Investors Climb Wal-Mart of Worry
By JUSTIN LAHART
Wal-Mart Stores accounts for nearly a 10th of U.S. retail sales, excluding
automobiles. So what happens at the retailer often reflects what's happening with
overall consumer spending.
What happens at Wal-Mart often reflects what's
happening with overall consumer spending, but
consumer sentiment is now splitting among the
lower income groups and those in middle and
upper brackets, Heard on the Street's Justin Lahart
joins Markets Hub. Photo: Getty Images.
This time round, the issues that ate into
the purchasing power of lower-income
Americans in recent months will likely
leave the spending of people further up
the income strata unscathed.
When Wal-Mart reported results
Thursday, it cautioned investors it expects
same-store sales in its current quarter to
be flat with a year ago. It cited three
reasons: First, gasoline prices have lately
leapt higher—a gallon of regular cost an
average of $3.75 Monday, according to the
Department of Energy, up from $3.36 three weeks earlier. Next, there is the 2%
increase in payroll taxes that went into effect last month. Last, there is the delay in
tax refunds that has come about as a result of the Internal Revenue Service pushing
back the start of tax-filing season by two weeks.
Even before Wal-Mart reported results—and even before last Friday's Bloomberg
News report of internal company emails fretting about weak sales—it was clear that
lower-income Americans were feeling pinched. The Reuters/University of Michigan
survey of consumers, for example, has shown a marked deterioration in sentiment
among poorer people, with the bottom third of households by income now about as
glum as they were a year ago. Middle- and upper-income Americans in contrast, are
feeling more upbeat.
When consumers face
headwinds, Wal-Mart's

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customers almost always
feel it worse—with little
in the way of savings and
limited access to credit,
there is far less cushion
to their spending. What's
unusual now is that
what's weighing on
spending at the lower end
may not be weighing on
middle- and upperincome
spending at all.
The recent increase in
gasoline prices, while
swift, probably isn't all that shocking for consumers who have become accustomed to
the price of regular oscillating between $3 and $4 a gallon in recent years, point out
economists at UBS . But for someone on a straitened budget, it immediately means
that more spending money is getting drained into the gas tank. Similarly, most
people probably haven't changed their spending habits in response to the payroll-tax
increase, but poorer people have no option. Finally, the tax-filing delay has likely had
a much stronger effect on the spending of lower-income households, which are more
dependent on refunds to fuel spending.
The good news for Wal-Mart is that it has probably already felt much of the blow. IRS
data show the pace of tax refunds is picking up, which should translate into catch-up
sales. Gasoline prices also look poised to take a breather. The payroll-tax increase
isn't going away, of course, but then nobody said you can have everything.
Write to Justin Lahart at justin.lahart@wsj.com
A version of this article appeared Feb. 22, 2013, on page C10 in some U.S. editions
of The Wall Street Journal, with the headline: Investors Climb Wal-Mart of Worry.
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"Amazon tax" payoff starts to arrive in some
U.S. states
Wed, Feb 20 2013
By Nanette Byrnes
(Reuters) - Sales tax from Internet commerce, a prize pursued for years by U.S.
state governments, is starting to arrive in California and a few other states,
providing millions of dollars in new revenue, though not as much as a benchmark
study once forecast.
After fighting hard to get e-tailers such as Amazon.com Inc to start charging sales
tax, and eventually passing a law requiring collection, the California Board of
Equalization reported last week it took in $96.4 million in September-December
2012, its first full quarter of collections.
Coinciding with the holiday shopping season, that result put the state well on its way
to meeting its forecast budget of $107 million in new e-taxes for the fiscal year that
began July 1, 2012, as set by the California Department of Finance.
But that revenue falls far short of ambitious expectations set in 2009 by a University
of Tennessee study that greatly influenced the online sales tax debate nationwide.
The study estimated that California, if it did not act to collect more online sales tax,
would miss out on as much as $1.9 billion in 2012 revenue. Nationwide, it
estimated, states would fail to collect $11.4 billion in 2012.
The Tennessee study fueled states' demands in recent years for more tax power
over online commerce. Like California, more states will be collecting new e-revenues in months ahead. So it is too soon to
make firm judgments, but early results suggest the Tennessee study and others like it were over-ambitious.
"To the extent the estimates being used are overstating reality, and I think they are, it is not solving anyone's deficit
problem," said Jeff Eisenach, a managing director at economic research group Navigant Economics.
Eisenach co-authored a study on e-commerce and sales tax and said he advises being "conservative rather than hopeful."
Eisenach's study, sponsored by NetChoice, a trade group that opposes online taxation, pegged the national online sales
tax potential at $3.9 billion, about a third of Tennessee's number.
The dawning of sales tax as a reality in the world of online commerce marks a turning point not only for the states that are
starting to collect it, but for Internet vendors and consumers.
Amazon, for instance, for many years and in most states, did not collect sales tax, enjoying as a result a pricing advantage
over older, bricks-and-mortar retailers. That is changing fast.
At the moment, Amazon is collecting sales tax in nine states including California, and will add seven more in the next year.
In some states the online retailer has struck agreements to collect, in others like California and New York it is complying
with new state law.
Having to do that may partly explain a recent deceleration in growth for the world's largest online retailer, said RBC Capital
Markets analyst Mark Mahaney, though he added that over time that effect should ease.
For consumers in states where the tax is now being charged online, it means an end to tax-free shopping on the web, at
least when it comes to the largest and most developed e-tailers.
Despite moderating revenue expectations, more states are sure to keep pushing for e-commerce taxation because that is
where the growth is. Online sales growth has outpaced that of traditional stores for years. By 2015, $175 billion a year will
migrate online from stores, Deloitte Consulting estimated.
HIGH HOPES FROM UNIV. OF TENNESSEE
In the long struggle between states and e-tailers over online sales tax, the Tennessee study was widely cited by those who
have pushed for more taxation at the state level and for national legislation to address the issue.
Some state politicians have used figures similar to that of the Tennessee study as a basis for building future Internet sales
tax receipts into their budgets.
Virginia Governor Robert McDonnell has projected the state could get $1.6 billion in online sales tax over the next five
years. He has predicted that Congress will pass by July 1 a bill to give states the right to require online retailers to collect
sales tax. Though this measure has languished in Congress for years, it has recently gained some new political support.

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On Thursday, 53 members of the Senate and the House of Representatives reintroduced the bill in Congress.
Representative Steve Womack, a Republican from Arkansas, where the nation's largest brick-and-mortar retailer Wal-Mart
Stores is based, said the lack of collection of sales tax online is hurting state and local governments.
"It affects everybody," he said at a press conference for the bill. "It affects schools. It affects policemen, it affects firemen, it
affects anybody engaged in public service."
Amazon quickly pledged its support for the national legislation, as it has done in the past.
At the same time, in New York, Amazon and Overstock.com are fighting a state sales tax collection law.
Retailers there are collecting the tax as they fight it out in court. Online retailers have remitted $360 million in sales tax on
more than $4 billion in taxable retail sales as of February 2012, according to the New York State Department of Taxation
and Finance.
That is 90 percent of all taxable online sales, New York said, but far less than the $2.5 billion the University of Tennessee
study predicted for the state over the same period.
In Georgia, the most recent state to require sales tax collection by remote sellers, local retailers said Amazon is not
collecting sales tax though the law has required it to do so since January 1. The state's proposed fiscal 2014 budget
includes $18 million in new Internet sales tax revenue.
Amazon declined to comment.
"If this revenue doesn't come through we'll have to cut education or some other important area," said Georgia Senator
Steve Henson, Democratic leader of the state Senate.
Professor William Fox, leader of the Tennessee study, said that the difference between his study's estimates and lower
state collections may reflect the fact that smaller e-retailers often are exempt from collection.
Broader trends support the study's findings, he said, including the fact that sales tax collections have lagged overall
economic growth. To Fox, that suggests that untaxed e-commerce has grown, continuing to sap sales taxes.
(Additional reporting by Alistair Barr in San Francisco and Kim Dixon in Washington; Editing by Kevin Drawbaugh and
Chizu Nomiyama)
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Landlords Prefer Deals LIke Office Depot-OfficeMax to Liquidations - WSJ.com
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DEALS & DEAL MAKERS
February 20, 2013, 9:35 p.m. ET
Landlords Prefer Deals Like Office Depot-
OfficeMax to Liquidations
By KRIS HUDSON
The U.S. shopping-center industry doesn't love the idea of an Office Depot Inc.
merger with OfficeMax Inc., but landlords see it as preferable to the risks if the
chains don't do something to bulk up.
Research firm International Strategy & Investment Group LLC estimated the
combined company could close 300 to 400 stores. That would be painful for
landlords but nothing like the hit they took when bookseller Borders Group and
electronics chain Circuit City liquidated.
No one is pointing to a similar fate for the office chains, but the lesson is on the mind
of OfficeMax Chief Executive Ravi Saligram, who said he looked at what happened to
both chains and knew his employer had to change.
"This is not about incremental progress," the CEO said.
Landlords see the benefits of a deal that would produce a stronger combined
company.
"Both companies have had their issues, and we certainly think that a combination
makes for a stronger business," said Drew Alexander, chief executive of Houstonbased
Weingarten Realty Investors, which counts 23 Office Depots and 11
OfficeMaxes in its 292 U.S. shopping centers. "We see this, on balance, as being a
good thing for the industry and an opportunity for us."
The $1.19 billion merger would create a retailer with roughly 2,500 stores around the
world. Both companies have closed a number of stores as competition increases and
sales move online, and they expect $400 million to $600 million in annual cost
savings eventually from the deal.
Many of the two chains' stores compete in the same markets, making them an
obvious target for cost cuts. Mr. Saligram declined to comment on the opportunity
for store closures as a result of the merger.

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Some landlords expressed optimism about finding new tenants for closed officesupply
stores. Even though big-box centers across the U.S. still are struggling with
vacancies lingering from the liquidation of retailers such as Borders, Circuit City and
Linens N' Things, the industry's average vacancy rate has declined in recent years.
In the fourth quarter, the average vacancy for big-box centers in the top 60 U.S.
markets was 6.1%, down from a recent high of 7.4% in the first quarter of 2010,
according to real-estate research firm Reis Inc. But it still exceeds the 4.5% vacancy
rate notched in the headier times of 2008. A primary factor helping the industry of
late is scant new construction of retail space, which means there are fewer new
centers to compete for tenants.
In turn, expanding big-box retailers such as Ross Stores Inc., DSW Inc., Bed Bath &
Beyond Inc. and TJX Cos.' TJ Maxx and Marshalls are moving into many recently
vacated storefronts. A few landlords also have added tenants such as health clubs and
medical clinics in big-box space.
Optimistic landlords see adding tenants paying higher rents than the average of $11
to $13 a square foot per year paid by the office-supply retailers. DDR Corp., which
counts 65 Office Depot and OfficeMax stores in its 454 shopping centers, said the
office-supply stores' rent is 30% less than the average in its best centers.
"In most cases, we do not expect to see rent rolldowns," ISI analysts Samit Parikh
and Steve Sakwa wrote in a research note distributed to the firm's clients on Feb. 19.
— Dana Mattioli contributed to this article.
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Trends/Analysis - Retail - WWD.com
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WWD.com/retail-news/trends-analysis/retailers-see-myriad-opportunities-for-fall-6766513
February 19, 2013
Las Vegas Preview: Retailers See Myriad
Opportunities for Fall
By JEAN E. PALMIERI and RACHEL BROWN
MRKET
Photo By Courtesy Photo
From new silhouettes in outerwear and a bevy of English fabrics to graphic prints and leather accents, the
opportunities are bountiful for retailers seeking to grow their business this coming fall season.
Although holiday sales may have fizzled at the end, particularly for larger retailers, merchants are hopeful that
2013 will be a solid year as updated fashions lure customers to stores to update their wardrobes. Men’s wear in
particular has benefitted from dramatic changes in silhouette and an explosion of color that has made many guys’
wardrobes look obsolete, a trend that retailers expect to spark additional sales this year.
As a result, retailers heading to the Las Vegas trade shows will be scouring the aisles for tempting items and
emerging new vendors to sustain the momentum.
“Men’s had a really good fourth quarter, better than the company trend,” said David Zant, executive vice
president and general merchandise manager of men’s for Belk. “And our business is strong out of the gate in
February in sportswear, as well as on the clothing and furnishings side.”
RELATED STORY: Ones to Watch in Las Vegas >>
Zant said the suit separates business is “explosive,” and is “a real focus for us. We’ve been building it over the
past two to three years and we don’t know how big big can be.”

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At the same time, dress shirts and neckwear have also enjoyed a
significant uptick in sales. In sportswear, anything with color is
selling strongly already for spring, including colored denim.
Camouflage prints are selling in the young men’s area and shorts
are “off to a good start,” particularly traditional flat-front styles in
bright colors and cargoes in solids and camo prints.
“We’re very encouraged by what we’re selling,” he said.
The one downside for the second year in a row, however, has
been cold-weather apparel and accessories. “It’s below trend,” he
said. “We’re just not getting the cold weather in the South.”
At the Vegas shows, Zant said the team from Belk will be
shopping to “validate the trends we’re seeing now and to look for
newness and new vendors.”
Macy’s is also benefitting from the fashion surge in men’s wear.
“Today’s man is more comfortable with newness,” said Durand
Guion, vice president and men’s fashion director for the
department store. “He understands it and he’s going for it. And
the vendor community is feeling the momentum as well, and is
providing more newness in color, pattern and fit.”
Guion said the variety of choices now available in the market
appeal to both the traditional customer as well as the millennial
shopper, 13- to 30-year-olds who spend an estimated $65 billion
annually on the types of goods sold at Macy’s. And at the trade
shows in Vegas, Macy’s will be shopping for trends “that will
resonate best” with those customers.
Funktional at ENKVegas.
Photo By George Chinsee
Among the biggest opportunities, he believes, are camo prints.
“I don’t think we’ve even scratched the surface,” he said. “There
are so many different colors, scales, patterns — it’s the ideal guy’s
print and pattern. It’s strong now, but we think it’s going to go
wild.”
And it appeals to men of all ages. “You don’t have to be a kid to
wear a faded camo on a short,” Guion said. “But the millennial
can wear it in a parka, backpack, sneakers.”
In addition, non-denim fabrics continue to gain fans, Guion said.
“It just keep growing and more guys are comfortable with it.”
Slimmer silhouettes and a deeper color palette are also drivers in
the bottoms category, he added, pointing to slim cargoes with
pockets that are not oversize. And in terms of color, wine,
oxblood and cherry are the “colors of the season,” and are being
used in everything from pants and wovens to knits and neckwear.
“There’s not a lot of that in his closet,” Guion said. “It’s rich and
dressy. We’re also loving the deeper mustards and golds. They
Rainforest at Project.
Photo By Courtesy Photo

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2/25/2013
feel fresh.
“The color message continues to drive the business.”
For the more mature customer, he said, the dress-up trend remains strong. “The suit and dress furnishings
business remains robust. The slimmer silhouette is really hitting its stride and also getting him to replace his
dress shirts and ties.”
In outerwear, mixed media, real and fake leather, and trim and fabric details are energizing sales, while in
sweaters, the shawl collar “will be his piece.” And in a variety of classifications, men have become “more
comfortable with pattern. Our guy likes to dress up and we think he will get more adventurous this fall,” Guion
said.
Mike Nemoir, senior vice president and general merchandise manager of men’s for Bon-Ton Stores, said the
men’s area had a strong holiday and fourth quarter, driven by core furnishings, suit separates and traditional
sportswear labels such as Chaps, Izod, Nautica and Polo. Fleece and wovens were strong, while sweaters were
soft. Outerwear, too, has been a laggard due to warm temperatures in most markets.
Although the stores are just now bringing in spring merchandise, Nemoir said he was pleased with the
performance of golfwear, which Bon-Ton put on the floor in December to capture the vacation traveler. Polos,
shorts and pants in performance fabrics have been among the bestsellers, he said.
And he’s upbeat about this year.
“We think we’ll be able to maintain the momentum in 2013,” he said. “There’s newness in most categories and
color is dominating the business. That’s the most exciting element of the men’s business.”
At the Vegas shows, the Bon-Ton team will be checking out any trends they might have missed and will be
looking for “new resources to add to our matrix,” Nemoir said, particularly in dress furnishings, sportswear,
denim and young men’s.
Bryan Reynolds, divisional merchandise manager of men’s for Scoop NYC, said the company’s men’s business “is
doing very well.” Business was strong during most of 2012 — up double digits in the fall — until Hurricane Sandy
threw a damper on sales. “But we ended up OK for the balance of the season.”
Although the stores are now in clearance mode, Scoop has had some positive early spring sales from J Brand and
PRPS denim, along with shorts, swimwear and polos. “The customer reacts immediately to anything new that we
bring in,” he said.
For fall, he believes outerwear is “a tremendous opportunity.” Mixed media, plaids, duffle coats, leather coats and
bombers will be the key pieces, he said. In bottoms, moleskin, velvet and pinwale corduroy in a variety of colors
will be popular, he predicted, along with graphic prints in sweaters and plaid jackets.
Patty Leto, senior vice president of merchandising for The Doneger Group, said retailers reported a bit of a
slowdown in sales in January as macroeconomic issues such as the extra 2 percent payroll tax take their toll.
“We’re hearing it from all channels,” she said, “from the off-pricers on up the food chain.” However, there are
some encouraging indicators for spring. “Color is selling, there’s been some early selling on shorts as well as
textured fabrics in knits and wovens. So they’re feeling more optimistic.”
Tim Bess, men’s fashion trend analyst for Doneger, said there are five big ideas for fall.
“There’s a whole textile takeover,” he said. “Before, it was all about color, now it’s about fabric: quilting,

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tweeding, lofty knits.”
The second trend is print and pattern, particularly British-inspired fabrics such as houndstooth, Prince of Wales
and Black Watch prints, as well as plaid, he said. Third is mixed media, like ethnic prints merged into paisleys
and updated camos. Fourth is a trend toward deep, dark colors such as oxblood, burgundy, deep greens and
browns and indigo.
The final trend is what Bess called “relaxed refinement. The millennial customer is dressing up, but he’s doing it
casually.” He’s looking for a “completer piece” such as a sport coat updated with leather trim or a cardigan with
elbow patches.
“We still think the men’s business looks good,” Leto said, “and we feel good about the opportunities. Men’s has
been outperforming the store in most cases.”
Bess said the “whole slim silhouette is getting men to come to the
store. The younger guy is a lot more fashion-savvy and he doesn’t
want to look like his father, who was the casual Friday guy. He
wants to look like his grandfather.”
For women’s retailers, the weather has thrown them for a loop.
Galen Hardy, clothing czar at Zappos Merchandising Inc., said,
“It was so warm going into Q4 and now it has been so cold across
the nation, [so] outerwear is really strong. [But] it is difficult to
get a real read on spring.”
Jill Shea, chief merchandising officer at Vanity, the 170-unit
retailer based in Fargo, N.D., believes the chilly weather is
making shopping cautious. “She has been affected by the
weather. It has been much cooler early this spring than last year,
so we are seeing a slower start to purchasing than last year,” she
said.
With temperatures persistently low, jackets have been popular
items at Scoop NYC. Heidi Hoelzer, vice president and general
merchandise manager of women’s at the retailer, said, “The
number-one growing classification for me is jackets. It finalizes
the look for the girl to either throw over her dress or wear with a
T-shirt and jeans.”
Looks from Pendleton at Project.
Photo By Courtesy Photo
At Vanity, shoppers have replaced cardigans with alternative
items. As Shea explained, “This year, we are seeing her move to
jean jackets and denim vests as well as layering pieces — even the
sheer shirt.”
Lauren Yerkes, general merchandise manager at e-tailer
Revolveclothing.com, shared Shea’s enthusiasm for denim vests
and jackets, but added that downsize trenchcoats are also hitting
big. “Blazers — not so much anymore,” she contended.
“Outerwear for spring is a little bit softer.”
Across apparel categories, Hoelzer pointed to lace and Neoprene

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as important for this spring. “I’m seeing a lot of printed
Neoprene, fitted to the body as well as flared. I see that as a trend
for spring and maybe carrying over into fall in new
classifications,” she said.
In denim, colors were everywhere last spring, but most retailers
agreed that they are becoming less significant sales drivers.
“I don’t see it being as strong [as] last spring. The market got
flooded with colored denim,” said Hardy of Zappos. “I think you
are seeing interesting patterns and also a move away from denim
and a move into pants. You are seeing more of the sportswearinspired
pieces that are a little bit dressier.”
Lady Fuller, president of 18-unit Blues Jean Bar, noticed prints
from herringbones to florals taking over for colors in denim.
“Folks pretty much bought their colors last season and are
gravitating toward blue skinny jeans and prints to spice it up and
go that extra mile,” she said.
Yerkes described colored denim as “soft. We had quite a bit of
primary colors at the end of 2012 and the beginning of January.
They didn’t take off,” she said. “We brought in a lot of pastels for
spring again. Right now, it has been a little slow.” While colored
denim has been off, she noted “destroyed, washed” jeans are
doing well, singling out a Current/Elliott stiletto style.
Dear John Denim at WWDMAGIC.
Photo By Courtesy Photo
At Vanity, Shea said color jeans were never more than window
dressing, and she didn’t anticipate that to change. “What I think
is new for this year that is not in her closet would be some
studding and embellishment, maybe up the side. There will be
destruction and denim in the lighter washes, moving more
toward the bleached-out look,” she elaborated.
Although the economy is limping along, retailers were
predominantly optimistic about the state of business.
“Our business is good right now,” said Hardy. “I’m going to bank
on the fact that she [the customer] is confident in what’s out
there. She likes what is being presented, and she is going to
continue to spend money.”
Revolveclothing.com’s Yerkes said, “Our business is really strong,
better than ever. We have been able to really talk to our
customers a bit more. We are going to have, I hope, a really
strong year.”
Retailers have detected a willingness on the part of shoppers to
pay a premium for items when they are unique. Fuller said,
“People are spending again, where for many years they weren’t. I
don’t see that going away in the near future.”
Todd Snyder at the Tents@Project.
Photo By Courtesy Photo

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Yerkes concurred, saying, “Before, they were hesitant to buy higher price points and now that the economy is
shifting, people are purchasing those high-dollar pieces.”
At Vanity, Shea was concerned that delays in tax refunds and increases in payroll taxes might make customers
tentative about parting with their money. Still, she commented customers aren’t buying the cheapest of the cheap
just because they are priced low. She said, “We have the more basic commodity items, but when we add some
embellishment on the jeans, for example, she will pay for it. She does know what she wants in terms of trends,
and she does want something new in her closet.”
Shea said Vanity’s budget for fall merchandise is at least equal to last year and not being “decreased by any
means.” However, that doesn’t mean Vanity isn’t careful about what it is bringing into its stores. She emphasized
versatility is paramount.
“Our approach is investing heavily into those key uniform pieces she can get the most wear out of versus being
spread throughout in fashion,” said Shea.
And, even as price sensitivity wanes, retailers continue to pay close attention to the price options that work in
their stores. At Scoop NYC, Hoelzer would like to find more quality accessory resources in the contemporary
price range of $400 to $800 in which Rag & Bone and Marc by Marc Jacobs have been prominent players.
“That is a sweet spot that retailers including myself are looking to fill,” she said.
One positive — and surprising — development at the start of 2013 is the strength of swimwear. Hardy didn’t
know what to make of the bump in swimwear. He guessed, “People have wanted to escape where they are at.”
Hoelzer thinks it portends well for the rest of the year: “That’s always a good sign — that people are traveling and
taking vacations.”
WWD
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