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I.H.T. Special Report: Well Appointed: In Troubled Times, Clothes Still Make the (Business) Man — and Woman

December 8, 2012 by Leave a Comment

On any given day, as the chief executive of Neiman Marcus Group, Ms. Katz is as likely to meet with a banker or a board member as with the chief executive of Balenciaga. And so, despite being known in industry circles for her finely honed sense of style, she understands that her position requires an impeccable professional polish and no fashion funny business.

She is not alone. In the toughest global economic environment in decades, internationally adept businesspeople know that the impression they create with their personal on-the-go, global style is an important aspect of professional success. The clothes they wear, the shoes they choose, the bags and briefcases they tote — all are part of the aura of cosmopolitan competence that well-appointed executives cultivate.

And so the best put-together professionals confidently tread a middle ground between business boring and fashion outré.

For instance, even though Mark Shelton, a financial executive for Credit Suisse International in London, no longer necessarily wears a tie on the trading floor, he does take care to wear a well-fitting suit — whether from a classic tailor like Anderson Sheppard or higher-fashion fare from Lanvin.

And even though Betsy Pearce, a lawyer based in Paris, favors avant garde silhouettes — a puffed sleeve, a voluminous peplum — she keeps things in check with a somber palette. Business meetings, Ms. Pearce counseled, are “not the place to wear orange.”

None of this happens by accident. Ms. Katz, for example, has mastered the art of mining seasonal trends for work-a-day wardrobe gems.

Some of her go-to brands — Dries Van Noten, Jil Sander and Alexander McQueen — are not necessarily office-friendly when they first stride down the runway. “I work through those collections to find the right dress, the right jacket,” she explained. “It absolutely needs to be edited to be work-appropriate.”

Ms. Katz almost always shops for versatile pieces, like a feather-lined vest from Brunello Cucinelli, Prada geometric-print pants or a black motorcycle jacket from The Row that can be paired with more formal pieces for the office or evenings but also worn with jeans for the weekend.

“I look fashionable every day,” Ms. Katz said. “And the pendulum swings between more, or less, edgy when I’m with bankers. But I certainly don’t dumb down the way I dress.”

And when it comes to a high-stakes business meeting attire, she has her own idea of the power suit. “It’s always a dress!” she said, favoring feminine designs by Bottega Veneta and Jason Wu.

But for some other executive women, pants after many years on the outs, are finally coming back into high fashion, led by houses like Prada and Saint Laurent Paris. For Ms. Pearce, the lawyer, they never really went out of style.

Her ensemble for a recent boardroom meeting with Goldman Sachs included Elise Overland’s black leather leggings and a sharply tailored black Balenciaga jacket.

“I could see the women in the room were overwhelmed by the boldness of what I was wearing,” Ms. Pearce recalled. “But I could also tell they thought it was cool.”

Ms. Pearce, who favors an all-black work uniform composed largely of Belgian designers she buys at the central Parisian boutique L’Éclaireur, has no use for the sea of boring beige many female lawyers swim to work in.

Bucking legal conventions is something of a sport for Ms. Pearce, who has been known to pair crisply pressed, untucked J.Crew men’s shirts with designer jackets by Comme des Garçons, Dries Van Noten or Balenciaga.

“To see a roomful of women in bad panty hose, pumps and matching suits makes me want to cry,” she said, only half laughing.

When it comes to shoes, professional women can find stylish options in sturdy packages.

Article source: http://www.nytimes.com/2012/12/08/business/global/in-troubled-times-clothes-still-make-the-business-man-and-woman.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Black Friday Sales Show Divide Between Shoppers

November 24, 2011 by Leave a Comment

Budget-minded shoppers will be racing for bargains at ever-earlier hours while the rich mostly will not be bothering to leave home.

Toys “R” Us, Wal-Mart, Macy’s, Kohl’s, Best Buy and Target will start their Black Friday sales earlier than ever — at 9 and 10 p.m. in some instances — with dirt-cheap offers intended to secure their customers’ limited dollars. A half a day later, on Friday morning, higher-end stores like Neiman Marcus, Saks Fifth Avenue and Nordstrom will open with only a sprinkling of special sales.

The low-end and midrange retailers are risking low margins as they cut prices to attract shoppers, while executives at luxury stores say that they are actually able to sell more at full price than in recent boom years.

“We’re now into a less promotional environment than we were before the recession,“ said Stephen I. Sadove, chairman and chief executive of Saks. In the third quarter, for instance, Saks reduced the length of an annual sale to three days from four, and excluded the high-margin category of cosmetics from another regular sale.

Retail analysts are expecting a decent holiday season, with many estimating that sales will increase about 3 percent over last year, with contributions from shoppers across income levels. Yet the Friday after Thanksgiving, the kickoff to the highest-revenue weeks for stores, is expected to lay bare the increasingly parallel universes of retailing in America, the analysts said.

“Those in a more modest income situation are the people who are going to the Wal-Marts and the Best Buys and the Targets at 8, 9, 10, 11 p.m. with little kids in tow because they can’t afford a baby sitter,” said Craig Johnson, president of Customer Growth Partners, a retail consultant firm. “It’s a very unpleasant shopping experience, frankly, for a lot of people.”

Meanwhile, many affluent shoppers will avoid the scene altogether, he said. “The women who are shopping the fourth floor at Saks are not Black Friday shoppers,” he said.

Still, a deal is a deal. High-end consumers and the people racing for the Black Friday special on $9.44 blenders at Wal-Mart continue to have at least one thing in common: they know hot holiday products go quickly.

For that reason, lines outside some Best Buy stores began forming Wednesday morning (the chain will sell a limited number of $500 high-definition televisions for $200 starting at midnight Thursday). And Neiman Marcus sold out of pewter-color Ferraris (luggage set matching the interior included) at $395,000 each within 50 minutes of making 10 of them available through its “fantasy” holiday catalog late last month.

Analysts said that luxury stores had outpaced discount and midtier stores in sales growth at stores open at least a year for most of 2011. Yet, all American consumers were still showing surprisingly strong spending patterns, and they expected that to hold going into the holiday season.

“From an overall level of spending, we’re going to be well ahead of where we were last year,” said Mark Vitner, a senior economist at Wells Fargo Securities who tracks consumer spending. “That’s surprising to a lot of folks, because we’re stuck with 9 percent unemployment.”

Mr. Vitner expects holiday sales to grow 5.2 percent this year, a higher estimate than many analysts predict. He said holiday spending had increased nearly every year recently, except for 2008, and that the population growth and even modest income growth helped buoy that pattern.

Low- and middle-income shoppers “are the folks that are really getting squeezed — in the third quarter of this year, real incomes actually declined and the savings rate declined,” he said. Yet he expects their spending to remain steady, even if they have to pull money from savings or charge items to credit cards. The economy, he said, “will affect lower-income shoppers in how they shop, not how much they buy — I think they will hone in on the discounts.”

And there are plenty of discounts, promotions and financing programs as lower-end stores try to get people to spend.

Wal-Mart’s profits declined in the third quarter as it kept many prices low so its shoppers could afford them. “There is a real sense that the economic strain is taking its toll,” Michael T. Duke, Wal-Mart’s chief executive, told analysts. It also brought back its layaway program in October for the first time in several years, and executives said the program, which lets people pay for gifts over $15 over several weeks, has brought extra traffic into the stores.

Kohl’s, like Wal-Mart, has increased its marketing to highlight its discounts, said Kevin Mansell, the chief executive and chairman.

“If you talk to people who are in my business, people who analyze our business, they would consistently tell you that stores at the mall, especially anchor stores, are more promotional than they were last year,” he said. “Now that may not be true at the high end — the strength of the business or the higher-end consumer has allowed them to do a little less promotion — but that’s high end.”

At Saks Fifth Avenue and other luxury stores, full-price selling has generally been increasing. So the few deals at luxury stores on Friday are not so much bargains as token nods to the Black Friday tradition. Saks is offering half off cashmere sweaters, Neiman Marcus is giving discounts on a future shopping trip when people spend more than $100, while Nordstrom says it does not have big promotions planned.

High-end retailers “don’t have to do anything desperate — it’s kind of hard to see a 5 a.m. queue outside of a Fifth Avenue luxury retailer,” said Chris Donnelly, a senior executive in Accenture’s retail practice. “If you don’t have to put it on sale and people are still going to buy it, why put it on sale?”

Article source: http://feeds.nytimes.com/click.phdo?i=b0bb550cdf1419e5635583a8044aed9c

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Case Study: J. Hilburn Wants to Sell Online

November 2, 2011 by Leave a Comment

THE CHALLENGE To expand its business beyond direct sales without alienating the direct-sales representatives who helped build the company.

THE BACKGROUND Hil Davis and Veeral Rathod started J. Hilburn in 2007 after Mr. Davis had a midair epiphany. While flying to Los Angeles from Chicago, where he worked for a hedge fund, he was shocked to read in Robert G. Hagstrom’s “The Warren Buffett Way” that Mr. Buffett considered his investment in the direct-sales cooking products company Pampered Chef one of his best — despite the dodgy reputation of direct sales and multilevel marketing.

“Here’s one of the smartest investors of all time and he’s long direct sales while other investors are like, ‘Why would you touch that?’ ” Mr. Davis said.

Mr. Davis, 39, who lived in Dallas, joined Mr. Rathod, 32, a fellow banker based in Dallas who had been looking for a change, and the two settled on men’s custom clothing.

Men do not like to shop for clothes in stores, they reasoned. A network of representatives who make house calls would solve that problem and also allow the pair to cut costs: without brick-and-mortar stores or tailor shops, they could offer custom-fit clothing for something like rack prices.

“We sell a value proposition, personalized fit and luxury products,” Mr. Davis said. “We can sell everything for half the price of Nordstrom and Neiman Marcus or for 85 percent of the price at Brooks Brothers.”

Still, Mr. Davis and Mr. Rathod knew nothing about the clothing industry. Armed with $650,000 from friends and family, the two opened with the help of four direct-sales representatives whom Mr. Davis’s wife had known. While the first representatives found customers, the inexperience of the founders showed.

They chose their first factory, in China, because it had produced two high-quality samples and assured them it could produce more. But after J. Hilburn started ordering in quantity, things did not go so well, a problem worsened by time and language differences.

“We let two shirts be the proof of concept when one of us should have been over there,” Mr. Davis said. “Our first 400 shirts came back wrong because we were the idiots who didn’t get on a plane to watch over the factory.”

They did visit their second factory before selecting it, only to have it fall behind on complicated orders. Each day, they later learned, the needle workers put the most difficult shirts back on the bottom of their pile, delaying delivery. After the partners announced that customers would get a free shirt for every four days an order was late, they received a standing ovation one day in a Dallas restaurant from customers who called them the “free-shirt guys.”

They had fabric-buying problems as well; Italian mills were not accustomed to selling quantities as small as of 100 meters.

Mr. Rathod and Mr. Davis had to retrain their entire supply chain in an industry they did not know. Had they known then what they know now, Mr. Davis said, “we could have started this business for 40 cents on the dollar.”

But they learned. Sales rose from $1 million in 2008 to $3.25 million in 2009 and $8 million in 2010, a year in which they sold 60,000 shirts (which start at $89). And they built their squad of style advisers to about 1,000 today from the original four.

J. Hilburn representatives make a 15 to 30 percent commission on sales, plus 2 to 4 percent on what is sold by the style advisers they have recruited (and those recruited by their recruits). J. Hilburn limits each rep to five recruits, something that, according to Mr. Davis, has kept annual turnover around 14 percent, compared with the industry norm of 56 percent.

“Most direct-sales companies fail their reps by telling them to ask everyone they can to join teams and we’ll see what sticks,” Mr. Davis said. “But most people are not prepared to be business owners. That’s why direct sales has such a bad reputation.”

Most of J. Hilburn’s representatives are college-educated, stay-at-home mothers, from their mid-30s to mid-50s, Mr. Rathod said. While the top three earn more than $200,000 a year, the average style adviser works three or four hours a week and makes $7,500 a year.

As they built J. Hilburn, Mr. Rathod and Mr. Davis started considering how to expand the business online.

Article source: http://feeds.nytimes.com/click.phdo?i=dfad0266727badca8fd0a7639d520c13

Filed Under: Small Business Tagged With: , ,

Even Marked Up, Luxury Goods Fly Off Shelves

August 4, 2011 by Leave a Comment

Even with the economy in a funk and many Americans pulling back on spending, the rich are again buying designer clothing, luxury cars and about anything that catches their fancy. Luxury goods stores, which fared much worse than other retailers in the recession, are more than recovering — they are zooming. Many high-end businesses are even able to mark up, rather than discount, items to attract customers who equate quality with price.

“If a designer shoe goes up from $800 to $860, who notices?” said Arnold Aronson, managing director of retail strategies at the consulting firm Kurt Salmon, and the former chairman and chief executive of Saks.

The rich do not spend quite as they did in the free-wheeling period before the recession, but they are closer to that level.

The luxury category has posted 10 consecutive months of sales increases compared with the year earlier, even as overall consumer spending on categories like furniture and electronics has been tepid, according to the research service MasterCard Advisors SpendingPulse. In July, the luxury segment had an 11.6 percent increase, the biggest monthly gain in more than a year.

What changed? Mostly, the stock market, retailers and analysts said, as well as a good bit of shopping psychology. Even with the sharp drop in stocks over the last week, the Dow Jones is up about 80 percent from its low in March 2009. And with the overall economy nowhere near its recession lows, buying nice, expensive things is back in vogue for people who can afford it.

“Our business is fairly closely tied to how the market performs,” said Karen W. Katz, the president and chief executive of Neiman Marcus Group. “Though there are bumps based on different economic data, it’s generally been trending in a positive direction.”

Caroline Limpert, 31, an entrepreneur in New York, says she is happy to spend on classic pieces, like the Yves Saint Laurent tote she has in both chocolate and black, but since the recession, she avoids conspicuous items.

“Over all, you want to wear less branded items,” she said. “If you have the wherewithal to spend, you never want to be showy about it.” Still, she said, she is quick to buy at the beginning of each season. “I buy things that could sell out.”  

The recent earnings reports of some luxury goods retailers and automobile companies show just how much the high-end shopper has been willing to spend again.

Tiffany’s first-quarter sales were up 20 percent to $761 million. Last week LVMH, which owns expensive brands like Louis Vuitton and Givenchy, reported sales growth in the first half of 2011 of 13 percent to 10.3 billion euros, or $14.9 billion. Also last week, PPR, home to Gucci, Yves Saint Laurent and other brands, said its luxury segment’s sales gained 23 percent in the first half. Profits are also up by double digits for many of these companies.

BMW this week said it more than doubled its quarterly profit from a year ago as sales rose 16.5 percent; Porsche said its first-half profit rose 59 percent; and Mercedes-Benz said July sales of its high-end S-Class sedans — some of which cost more than $200,000 — jumped nearly 14 percent in the United States.

The success luxury retailers are having in selling $250 Ermenegildo Zegna ties and $2,800 David Yurman pavé rings — the kind encircled with small precious stones — stands in stark contrast to the retailers who cater to more average Americans.

Apparel stores are holding near fire sales to get people to spend. Wal-Mart is selling smaller packages because some shoppers do not have enough cash on hand to afford multipacks of toilet paper. Retailers from Victoria’s Secret to the Children’s Place are nudging prices up by just pennies, worried they will lose customers if they do anything more.

While the free spending of the affluent may not be of much comfort to people who are out of jobs or out of cash, the rich may contribute disproportionately to the overall economic recovery.

“This group is key because the top 5 percent of income earners accounts for about one-third of spending, and the top 20 percent accounts for close to 60 percent of spending,” said Mark Zandi, chief economist of Moody’s Analytics. “That was key to why we suffered such a bad recession — their spending fell very sharply.”

Just a few years ago, luxury retailers were suffering. Too many items were chasing too few buyers, and high-end stores began cutting prices. As a result, consumers awaited 70 percent discounts rather than buying right away. Sales of luxury goods fell 17.9 percent in October 2008 from a year earlier, SpendingPulse said, and double-digit declines continued through May 2009.

Now, many stores are stocking up on luxury items, as shoppers flock to racks of expensive goods.

“They’re buying the special pieces, whether it’s the exotic leathers, the more fashion-forward pieces,” said Stephen I. Sadove, the chairman and chief executive of Saks Fifth Avenue. “There’s a dramatic decline in the amount of promotions in the luxury sector — we’re seeing higher levels of full-priced selling than we saw prerecession.”

In 2008, for example, the most expensive Louboutin item that Saks sold was a $1,575 pair of suede boots. Now, it is a $2,495 pair of suede boots that are thigh-high. Crème de la Mer, the facial cream, cost $1,350 for 16 ounces at Bergdorf Goodman in 2008; it now costs $1,650.

“I think that she’s willing to pay whatever price the manufacturer and the retailer deem appropriate, if she sees that there’s intrinsic value in it,” Mr. Katz said.

Part of the demand is also driven by the snob factor: at luxury stores, higher prices are often considered a mark of quality.

“You just can’t buy a pair of shoes for less than $1,000 in some of the luxury brands, and some of the price points have gone to $2,000,” said Jyothi Rao, general manager for the women’s business at Gilt Groupe, a Web site that sells designer brands at a discount. “There’s absolutely a customer for it.”

Jennifer Margolin, a personal shopper in San Francisco, said she had noticed changes in clients’ attitudes. They “pay full price if they absolutely love it,” she said. “Before it was almost completely shying away, where now it’s like, ‘O.K., I’m comfortable getting a Goyard bag,’ but they get it for the quality.”

Goyard bags, in addition to having a distinctive pattern, will usually run a few thousand dollars. And, yes, they are selling out quickly.

Article source: http://feeds.nytimes.com/click.phdo?i=ff84b2581b16ba556a0bb45054cf506d

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The Boss: Seeking Cures, Then and Now

June 18, 2011 by Leave a Comment

My sister was 8 and I was 5. We decided to give a show in our backyard to benefit polio research. Suzy told me that I had to sing and dance and that she’d sell tickets. I sang the only songs I knew — Rosemary Clooney tunes. I thought I was wonderful, but when I was done, Suzy said that the next time she’d sing and that I could sell the tickets. We raised $64.

I attended the University of Illinois at Urbana-Champaign. I didn’t learn well in a classroom, probably because of an undiagnosed learning disability. I asked a lot of questions and learned experientially — and I was president of my sorority and active in several clubs. After graduating from college in 1968, I entered the executive training program at Neiman Marcus in Dallas. I loved the psychology of marketing. I was also an adviser for Bozell Jacobs, a public relations company in Dallas.

My sister died of breast cancer in 1980. Two years later, I founded the precursor of our current foundation and served as a volunteer. In the late 1970s, when my sister’s cancer was diagnosed, breast cancer wasn’t discussed freely in the media. There were no “800” numbers for information, or breast cancer Web sites or patient advocacy groups the way there are today.

In 2001, President George W. Bush appointed me as ambassador to Hungary. I knew the Bush family because I lived in Texas and also through my breast cancer work. In 2002, to raise awareness of the disease, I walked across the Szechenyi Bridge in Budapest with the Hungarian minister of health and several hundred breast cancer survivors.

In 2003, I refocused fully again on the foundation’s activities, and in 2007 was appointed White House chief of protocol. My father was sick and I wanted to care for him, but he told me that there would never be a perfect time to serve and that he wanted me to do it.

As chief of protocol, I was first to greet Pope Benedict XVI when he visited the United States in 2008. I also visited a Pepfar (President’s Emergency Plan for AIDS Relief) clinic in Tanzania that year with President Bush.

In 2009, I was appointed goodwill ambassador for cancer control for the United Nations World Health Organization. Tobacco use is growing in other countries and cancer rates are rising. Awareness campaigns make a difference. I called for a regional meeting in Egypt with health ministers to increase awareness of the harmful effects of tobacco.

I also became C.E.O. of Susan G. Komen for the Cure, named for my sister, that year. Our group has benefited from the knowledge I’ve gained in every position I’ve held. Seeing how other countries deal with health care was especially enlightening. We began in Dallas and now have offices there and in Washington, with affiliates in 120 American communities and in 50 countries.

When I started this group, I hoped it would take 10 years to find a cure. We’re not there yet. But we’ve made great incremental gains in understanding biology and increasing awareness. The survivor rate has increased immensely. I’m a breast cancer survivor myself.

We’ve invested more than $1.9 billion in breast cancer research and programs. We’ve given voice to survivors — our pink ribbon is a symbol worldwide. It was my sister’s favorite color.

As told to Patricia R. Olsen.

Article source: http://feeds.nytimes.com/click.phdo?i=7d8e7781bd89b42e55921b5c1414d445

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