H&M moves up with Madonna



Swedish retail giant H&M Hennes & Mauritz is facing tougher competition and slowing sales growth. So the king of affordable "fast fashion" is raising the ante with a long-awaited expansion into Asia, a new upscale chain in Europe, and a high-profile collaboration with pop star Madonna. (BUSINESSWEEK)

Guess taps new retail behavioral marketing firm MyBuys



Online retailers Guess, Ritz Camera and Hancock Fabrics tapped new behavioral marketing firm MyBuys to improve relevant targeting in e-mail.

MyBuys, Redwood City, CA, asks consumers what kind of information they want to receive when visiting a retailer’s Web site in order to send custom and permission based e-mail and RSS messages.

“Instead of offering a one-size-fits nobody e-mail newsletter, we gather preferences from consumers on a client’s Web site and then search the retailer’s Web site for stock and send relevant promotions,” said Paul Rosenblum, vice president of marketing at MyBuys.

MyBuys asks consumers what kinds of products they are specifically interested in, such as black pants or red sweaters, in order to create promotions based on these preferences. The MyBuys platform takes this information and scans the retailer’s database for stock and size and promotional emails are sent to notify customers when a particular type of product goes on sale or when a new product is listed on the site.

Retailers pay based on performance, so MyBuys profits based on click-through sales or revenue share.

“We earn revenue when our clients do and the results are high,” Mr. Rosenblum said. “We don’t send a message unless there is something to send, as a result people are interested and we have a high conversion rate.”

Colette 2.0

The Colette store in Paris is as frustratingly annoying as it is fantastic, we can never decide. But their new website is very very good. (COLETTE.FR)
CLICK TO VISIT THE COLETTE WEBSITE

A new way to drink water

Have you ever thought there would be more than one way to drink water? Well, what if you wanted to quench your thirst in style? Well, there is an answer to that as well.

Bling Beverages, LLC have just announced the release of Bling H2O, a new drinking water aimed at the super-luxury consumer who wants to do more than just quench their thirst, according to their press release. (BALLERSTATUS)
[ READ MORE... ]

CNN aims to extend brand at conferences

CNN is seeking to bring its brand to life beyond television sets, personal computers and cellphones by forming a division devoted to event marketing. The new division, CNN Events, under the auspices of the advertising sales department, will put on panels, conferences and meetings on news-related subjects.

Although the events will not be televised on CNN, the network's reporters and anchors will serve as speakers and moderators. The events will be sponsored by CNN advertisers, who will be acknowledged on invitations and at the conferences. But CNN executives say sponsors will have no control over the content of the events. (THE NEW YORK TIMES)
[ READ MORE... ]

New ad for Bently...


...Or spoof?

Puma aims to triple number of stores

Puma, the German sporting goods company, on Wednesday set an ambitious target of tripling the number of retail stores worldwide and in the US by 2010.
The "sports lifestyle" brand has in recent years diversified its wholesale business into retail, and has more than 80 stores worldwide. (FINANCIAL TIMES, UK)
[ READ MORE... ]

Virgin Atlantic plans Virgin America

Still-grounded startup airline Virgin America popped the bubbly for its new plane “Jefferson Airplane” on Wednesday in a marketing event of grand proportions as business politicians and business people eagerly awaited the jobs and contracts the new aviation firm could bring.
A San Francisco International Airport hangar was packed with Virgin’s approximately 90 employees, as well as politicians and businesspeople already contracting with or hoping to do business for the new airline. (THE EXAMINER)
[ READ MORE... ]

Starbucks takes unique approach to marketing

While McDonald's was lovin' it, Coca-Cola was the real thing and Nike wanted us to just do it, Starbucks was throwing parties instead.
The coffee retailer, based in Seattle, takes an unconventional approach to marketing, choosing parties and other in-person encounters over big national advertising campaigns. (THE SEATTLE TIMES)[ READ MORE... ]

The Happy New House


I make my living as a creative director at an entertainment advertising agency. I’m always thinking about branding, product positioning, and creative solutions that stay “on message.” So I decided to apply a similar process to our home remodel (which I call The Happy New House). Here’s why:
1. It’s fun.

2. It creates a common language for homeowner and architect to discuss creative development.

3. It helps everyone stay “on message.” (Our key strategy: Stay connected as a family. Our core tactic: Create public realms to encourage “elbow-rubbing” opportunities. Our creative filter: Love. Heart. Happiness.)

4. It’s political. Corporations spend millions of branding-dollars trying to "own" concepts like "happiness" "loyalty" and "family" in the minds of consumers. But those concepts DON'T belong to corporations. They're ours. And we aren’t simply "consumers." We're people: Moms, Dads, and kids – making our way in the modern (and sometimes scary) new world. The "family brand" attempts to level the playing field of corporate influence by taking back what we care about most: Our relationships with each other. (NOT our relationships with McDonalds.) (ARCHINECT.COM)
[ READ MORE... ]

Wal-Mart's aesthetic evolution

You don't typically head to a Wal-Mart store because of the soothing architecture. But that might change. Stung by criticism that its massive stores are eyesores that don't blend well with the communities in which they are located, Wal-Mart is unveiling a new look that foreshadows a significant shift for Canada's largest retailer. (TORONTO STAR)
[ READ MORE... ]

YOUR LOTIONS AND POTIONS are now cleared for boarding again -- as long as you can find some bottles small enough to put them in.

Last week, the Transportation Security Administration relaxed its ban on most liquids and gels, which had effectively made carrying on your toiletries in your wheelie bag impossible. Now, travelers can pass through security checkpoints (and board commercial airline flights) with whatever toiletry they wish, as long as the items meet two conditions. First, you must store them in bottles or containers that hold no more than three ounces. Second, you must place all of these vessels into one clear, quart-size, plastic zip-top bag.

For travelers with no particular brand preferences, grabbing whatever happens to be in the travel-size bins at the local drugstore will likely suffice. Others can turn to several Web sites that either sell miniature bottles of shampoo and such or small containers into which you can pour your own favorites. Minimus.biz, for example, limits its inventory to toiletries (plus food, cleaning supplies and other ephemera) in three-ounce containers or less.
Here are some sites that offer toiletries or containers in Lilliputian sizes.

Site: containerstore.com
Offerings: Select "Shop by Category" from the drop-down menu, click "Travel" then "Bottles and Medication." The opaque aluminum bottles are TSA-legal, but you might want to buy the company's "Personal Care Labels" so you know what you put in there. Some models promise a leakproof "laboratory quality seal."
Sample price: Two-ounce Wide-Mouth Leakproof Bottle, 99 cents each; set of 36 Personal Care Labels, $1.79

Site: minimus.biz
Offerings: A wide selection of travel-size toiletries, free shipping for domestic, FedEx ground-shipped orders over $20 and a free plastic bag to use at the airport if you enter "ZIPLOCK" in the special instructions box during checkout.
Sample price: One-ounce Lubriderm Lotion, 79 cents.

Site: www.sks-bottle.com
Offerings: Snazzy blue, green and amber plastic bottles, though the site often requires you to buy in bulk. It also peddles travel kits with several bottles inside.
Sample price: 48 two-ounce blue plastic bottles with silver caps, $22.56

FIERCE RIVALS J.C. Penney Co. and Kohl's Corp. have big plans for this weekend, and the name of the game is expansion.


Kohl's is staging grand openings at 65 stores, the largest growth spurt in its history. At the same time, plans call for Penney to cut ribbons to open 20 stores -- its biggest expansion in two decades, and one with a new wrinkle: Of the 20, 17 of the stores are free-standing -- a matter of course for Kohl's but a departure from Penny's longtime role as an anchor in suburban shopping malls.

Both Penney, based in Plano, Texas, and Kohl's, based in Menomonee Falls, Wis., plan to celebrate their growth with big discounts on fall fashions.

That will help set the tone for a highly competitive holiday season as the two battle for the business of the middle-market shopper, says Britt Beemer of America's Research Group, a consulting firm that tracks shopping patterns nationwide. "We're already seeing big, in- your-face discounts of 30% to 50% off," he says. "This is going to be a good fight to watch."

The middle market, sandwiched between discounters at the low end and luxury retailers at the top, is actually growing more slowly than retail spending overall. This holiday season, middle-income shoppers are less likely to increase their spending than their lower- and upper-income counterparts, according to a recent survey by NPD Group, a market-research firm. But Penney and Kohl's are growing faster than other midprice department stores, and both companies raised their profit outlooks this week.

"We're taking share from somebody," says Myron "Mike" Ullman, Penney's chairman and chief executive. "We're getting new customers whether they're trading up, down or sideways."

Fe Limboc, a 55-year-old accounting analyst in Lewisville, Texas, says she shops at both Penney and Kohl's stores because traditional mall department stores are "expensive for what you get."

Both chains now have an opportunity to attract customers who once shopped at hundreds of former Filene's, Foley's and Strawbridge's stores that Federated Department Stores Inc. last month converted to Macy's, a chain with a more upscale image than many of those it is supplanting. Federated also has been closing stores in the wake of its acquisition of May Department Stores Co.

Richard Hastings, an analyst at New York-based retail consultant Bernard Sands, reckons Penney and Kohl's lately are stealing shoppers away from discounters, too. He cites both companies' strong September sales gains versus those of Wal-Mart Stores Inc. and Target Corp.

The shift in strategy at Penney -- which operates about 1,050 stores -- comes as regional mall construction has nearly ground to a halt, and time-strapped shoppers are favoring stores that are closer to home and easier to navigate. Capitalizing on that trend, Kohl's has expanded at a torrid pace, doubling the size of its chain to about 800 stores since 2001 by pushing into new markets like Florida and California. What remains to be seen is whether there are enough good free-standing locations for both companies' big expansion plans.

The stand-alone strategy also isn't a slam dunk. Penney has been tinkering with its free-standing format for three years, opening only 25 such stores prior to this weekend's rollout. And while these types of stores have advantages over mall anchors -- Penney says weekday traffic has exceeded its expectations -- other chains, including Sears Holdings Corp., have seen mixed results with them.

In recent years, Penney has concentrated on updating its fashions, adding a lower-price line by designer Nicole Miller and home furnishings by Chris Madden, for example. It has also beefed up private-label brands such as St. John's Bay clothes and Arizona jeans, which now account for more than 40% of its sales.

This week, Penney announced a deal to sell two new, exclusive lines of apparel, accessories and jewelry from Liz Claiborne Inc. -- Liz & Co. for women and Concepts for men. Both will launch next spring.

Mr. Ullman predicts that free-standing Penney stores will give Kohl's a run for its money with better service and more exclusive brands. In addition to hair salons and spas, some new stores, including a free-standing location opening this weekend in Fort Worth, Texas, will feature Sephora cosmetics boutiques. He also says departments from jewelry to home decor will be staffed with more sales people than at Kohl's. But like Kohl's, Penney will provide shopping carts at its off-mall locations.

Kohl's, which has grown by discounting name brands like Gloria Vanderbilt and Levi's jeans and Adidas athletic wear, also is expanding its stable of private labels with lines like Daisy Fuentes women's sportswear. Last year, it began carrying the Chaps label from Polo Ralph Lauren Corp. And in August, it signed a deal for an exclusive midprice line from designer Vera Wang. This week, the company attributed a surprisingly strong 16% increase in September same-store sales partly to its efforts to make its stores more "feminine."

"We've broadened our reach," Kohl's President Kevin Mansell says. "We're moving from a family-focused-only approach to include women at home without children."

Mr. Mansell adds that the wide-aisled "race-track" design of Kohl's stores reduces the need for staffing. "We're not doing our job in merchandise presentation or replenishment if our customer has to ask for a lot of help," he says. "They should be able to navigate with visual cues and signing."

In its new stores, however, Kohl's is enlarging fitting rooms and installing them with three-way mirrors. Nearby lounge areas are getting hardwood floors and more decorations. The checkout stations have been redesigned so clerks spend more time facing customers, rather than cash registers. New display windows out front will showcase mannequins in the latest fashions.

Stores cluttered with racks of merchandise have drawn complaints in the past, Mr. Mansell acknowledges. But he says they are being addressed with better displays. "We're carrying less inventory, and it's delivered more often," he says.

Some analysts, meanwhile, are skeptical about both companies' big expansion plans, saying the two will eventually fight over key locations as space gets tighter.

"If they do go head-to-head on too many sites, their rents are going to go up," Dennis Yeskey, national director for real-estate capital markets at Deloitte, says of Penney's plan to open as many as 400 more stores and Kohl's plan to add 500 by 2010. "Then they're going to scale back."

Safeway wanted a fresher, healthier image. The first step was to become fresher and healthier

In 2002 the management team at Safeway Inc. got ice water splashed in its face. After boosting annual earnings at double-digit rates throughout the '90s, the third-largest U.S. supermarket chain reported its first annual loss since going public in 1990. "We needed some fundamental changes," says Steven A. Burd, chairman and CEO of the Pleasanton (Calif.) company. "We [needed to] differentiate our offering from other conventional supermarkets."

Those supermarkets were fast becoming an endangered species. Big-box retailers such as Wal-Mart Stores Inc. were preparing to invade the low end of the grocery market and win on price. Specialty stores such as Whole Foods Market Inc. were conquering the high end with quality and atmosphere. That left traditional grocers like Safeway getting squeezed in the middle.

To escape, Safeway had to pull off a challenging feat. While continuing to offer popular food brands at low prices, it had to add higher-quality fare and transform its sterile aisles into a more stylish environment. Most important, consumers had to believe the change was for real, not just window-dressing. That's a tall order for an 80-year-old retailer whose customers associate it with fluorescent lighting and Oreos. So the company used what management gurus call authentic marketing: the art of telling consumers a story they want to believe, then delivering the products and experience that make the story real.

The project is the largest remodeling effort ever undertaken by a U.S. supermarket chain. Beginning in 2003, Safeway committed to spend $1.6 billion a year over six years to remodel all 1,775 of its stores. The company also resolved to pare back labor costs, which led to strikes and lockouts. In the end, Safeway got most of the cuts it wanted, but the negative publicity stung. Now, in concert with the company's $100 million ad campaign, things are starting to turn around. Identical-store sales growth has swung from -4.5% in 2003 to 4.3% last year. After reporting losses in 2002 and '03, the company is expected to earn $822 million on $40 billion in revenue this year, up 42% from 2005, according to consensus analyst estimates from Reuters Group PLC. In the past 12 months, Safeway shares have risen 31%, to 31.

Authentic marketing may seem a fancy term for a simple idea: Deliver what you promise. But history has shown that living up to that precept isn't easy. In 1985, the Great Atlantic & Pacific Tea Co., better known as grocery chain A&P, launched a glitzy ad campaign that declared: "We Built a Proud New Feeling." But shoppers got the same old feeling when they visited stores and found little had changed. Sales barely budged.

TRUE STORIES

So what did Safeway do right? The short story is that it delivered before it promised. "We were very careful not to talk about quality until we had stepped up quality," Burd says. That way, when Safeway told a story about quality in a TV ad, customers could walk into a store that day and see and taste the quality, leaving no doubt about the story's truth.

Before writing a word of marketing copy, Safeway studied its customers. They liked the wholesome food and pleasant environment of specialty stores but also wanted their favorite brands and low prices. Safeway saw that it could quickly distinguish itself with higher-quality perishables. Without fanfare, the company in 2003 and 2004 introduced more tender beef, sweeter grapes, and fresher bread until it had upgraded all its perishables departments.

Safeway was careful not to oversell the transformation. Today, when customers enter its Danville (Calif.) store, they might be greeted not only by a bin of designer Dulcinea cantaloupes but also by a stack of Gatorade bottles on sale. The message? Shoppers can get the familiar brands and bargains they expect, as well as items they might associate with natural foods stores. Brian C. Cornell, Safeway's chief marketing officer, calls it "completeness."

Once Safeway had improved perishables, it hired Novi (Mich.) retail design firm Orangetwice, then known as Avizia, to dream up a new environment. The firm's clientele has ranged from clothiers Barneys New York and Polo Ralph Lauren to Total Convenience Stores. Orangetwice was brutally honest about authenticity. "We said, 'What you are marketing you'd better deliver,"' says Liz Muller, chief creative officer. "Otherwise, you actually do more damage."

Orangetwice's mandate was to create an experience that would make Safeway's story about quality and wholesomeness believable. "We wanted to make sure when you walk into the store it gives you a natural, abundant, fresh feeling," Muller says. The firm replaced glaring lights with warm accent lights. Dull white walls got painted earth tones -- no store surface was left white. Hardwood floors were laid in the perishables departments, and wooden letters were attached to walls to spell out slogans such as "Fresh from the fields." The floral department increased the number and variety of flowers it stocked and added items such as scented candles and vases. Muller says it's doing 90% more business in the same space.

Not until the food quality and store environment were battle-tested did Safeway prepare an ad campaign. Its agency, Dailey & Associates Advertising of Los Angeles, conjured an "ingredients for life" slogan to suggest not only that people might live healthier if they buy Safeway's food but also that the food is designed for the way people live today. Dailey's TV commercial showed a diverse group of people eating food on the go. Safeway then put graphics from Dailey's ads on its trucks, shopping bags, aprons -- on any real-life artifact that could make the story palpable.

The moral of Safeway's tale? A compelling story is key to authentic marketing. Safeway's consumers don't just want cheap household goods -- they want to be part of a story about a healthy modern lifestyle. "The marketer's job is not to focus on facts but to present a story to people that they want to believe," says Seth Godin, author of All Marketers Are Liars: The Power of Telling Authentic Stories in a Low-Trust World. "You can make up a story, but when people visit your store, if the story is inauthentic, then people reject you and don't trust you again." That could be the costliest makeover of all.

Supermarket Makeover

Profits have been soaring since Safeway reinvented its look. Here's what the company did:

WALLS

Earthy tones replaced plain, old white to convey freshness and wholesomeness.

LIGHTING

Switched glaring lights for warm accent lights that direct attention to products and departments.

SIGNAGE

Big pictures of healthy food went up. Display stations throughout stores suggest meal ideas for time-starved shoppers.

PRODUCE DEPARTMENT

Enlarged organic section, moving it from case against wall to wooden crates at center of floor, suggesting a farmer's market.

FLOORS

Installed hardwood floors in perishables departments to provide a natural feel.

BAKERY

Knocked down wall to show off bread baking in wood-fired oven. Added island in center of department that offers custom bread slicing.

PLAYBOOK: BEST-PRACTICE IDEAS

The Secrets of "Authentic Marketing"

TELL A TRUE STORY

-- Consumers don't just want to buy a widget or save a buck. They want products placed in a meaningful context -- a story. Marketers don't always have to focus on facts, but their stories must hold up when consumers get the goods.

DELIVER, THEN PROMISE

-- A brand is a promise. When you tell consumers your brand stands for something, you had better be ready to deliver that special something. Safeway spent three years improving food quality before it rebranded the company.

DON'T OVERSELL

-- It's fine to add new meaning to an existing brand if you can deliver. But throwing out the old meaning in a radical about-face can seem fake. When Safeway extended its brand, it was careful not to climb too far upscale.

J.C. Penny Launches Ambrielle; Updated Intimates Department.


In a bid to ramp up its sensual side, J.C. Penney next spring will replace its successful Delicates brand of intimate apparel with Ambrielle, in what the retailer calls the largest private label launch in its history. Ambrielle, which targets modern, sensual women, will be the centerpiece brand of the retailer's redesigned lingerie departments, launching in stores, catalogs and on the Web at www.jcp.com.

Delicates, along with Arizona, Stafford, Worthington, St. Johns Bay and JC Penney Home Collection, is one of Penneys’ "power" brands united under the leadership of Laurie Van Brunt, who joined the company last year as vp-director of brand management. J.C. Penney's private brands represent more than 40% of its annual sales, with three of them—J.C. Penney Home Collection, Arizona and St. John's Bay—accounting for $1 billion each in sales.

"We're hoping Ambrielle will take our intimate apparel business even further," said company rep Kate Parkhouse. "We feel it will resonate with people even more."

Ambrielle consists of three sub-brands: Smooth Revolution, for comfort and support; Mystique, for luxurious body enhancement; and Essentials, basics with natural support and a comfortable fit.

In addition to Ambrielle, which will account for one-quarter of the intimates department, J.C. Penney will stock national brands including Maidenform and Playtex as well as its Bisou Bisou private brand for younger, trendy consumers.

J.C. Penney has redesigned and upgraded the department with more of a "boutique" feel with separate registers and its own shopping bags. "You won't see racks of bras hanging on hangers," promised Parkhouse. "It will be different from what's out there now."
By Sandra O'Loughlin (brandweek.com)

Taking on Victoria's Secret

AVENEL, N.J. (FORTUNE Small Business Magazine) - At 9 on an overcast morning, controlled chaos reigns at the headquarters of lingerie merchant Bare Necessities. An unusual team of consultants has just taken over the company's unadorned conference room in Avenel, N.J. One consultant is shoving desks into the center of the room. Others are unpacking gigantic Post-it Notes from boxes and plastering them on the walls.

With furious intensity, two young women are ripping photographs from fashion and lifestyle magazines such as Cosmopolitan and People. What are they looking for? "Anything provocative," one woman replies brusquely.
The company could use a little shaking up. Bare Necessities (barenecessities.com) sold about $15 million in brand-name women's lingerie last year, up from $13.3 million in 2004. The company is profitable, and its four brick-and-mortar boutiques in the Northeast are thriving.

Noah Wrubel, who took over the family business five years ago, sees the Internet as the future of Bare Necessities (80% of its sales are generated online), and he's not happy with his company's position on the underwear superhighway.

Bare Necessities trails market leader Victoria's Secret in both name recognition and online sales. (Victoria's Secret racked up $158 million online in 2004, according to Internet Retailer magazine.) The Bare Necessities site "lacks personality," complains Wrubel. "It has no voice." True, anyone who Googles "women's underwear" will find Bare Necessities high up on the first results page.

Once at the site, she (or even he) will find a crisp, efficient, easy-to-use menu that lists a vast array of bras, panties, nighties, and so forth by size and style. But the same site could just as easily sell paper clips or gardening supplies. "When the transaction is over, I think the customer barely remembers our name," says marketing director Dan Sakrowitz, 37. "If she wound up at a different e-tailer's site the next time, I don't think she'd notice or care."

It's not for lack of effort that Bare Necessities' website lacks a certain panache. Wrubel, 38, a friendly, wiry man with thinning dark hair, says he has assembled Bare's top brass several times and attempted to develop a more memorable online personality. The company even hired branding consultants. "Nothing really worked out," he admits.

Early this year, Bare moved its operations from Newark, N.J., to Avenel, a small town jammed with trucks and warehouses about 15 miles south on the Jersey Turnpike. As soon as they settled in, Wrubel vowed, Bare would sort out its image problems.

That's where FSB came in. We recruited a team of consultants from Frog Design (frogdesign.com), one of the world's most distinguished product-design and branding consultancies. Originally known for its sleek hardware designs (early credits include the first Trinitron TV for Sony (Charts) and one of the first Macintosh personal computers for Apple (Charts)), Frog has lately developed an innovative branding service called FrogTHINK. It's a sort of collective therapy exercise designed to help companies unleash their creative mojo.

The kickoff
At about 9:15 A.M., a thirtysomething Australian named Luke Williams stands up. He is wearing dungarees, an un-tucked white shirt, and a gray sports jacket. If the 15 people in the room had any preconceived notions about FrogTHINK, they are probably wrong, says Williams. "There are no beanbags, no water pistols, no 'trust falls,'" he explains. "Removing inhibitions is not enough to cause creativity. You can't dig a hole in a different place by digging a deeper hole." The underwear merchants absorb the spiel in attentive but baffled silence.

Williams splits the participants into two groups: insiders and outsiders. The insiders are the half-dozen Bare Necessities executives, including Wrubel, Sakrowitz, COO Bill Richardson, and five women executives who requested anonymity because of the intimate subject matter.

Outsiders include a Bare Necessities employee on her first day on the job, a young woman freelancer who occasionally writes copy for the company, and two women recruited from Frog Design's office in New York City.

The purpose of all those "provocative" magazine images (everything from overflowing cans of paint to a camel race in the Sahara) now becomes clear. The insiders are instructed to stay in the room and use the photos to construct one collage that illustrates a customer's real experience of buying lingerie, and another collage of the ideal buying experience.

The outsiders leave the room with the same assignment. Wrubel and Richardson, sitting in a corner, smile as they tackle the chore. "I like looking at pictures," laughs Wrubel. Richardson, 39, a powerfully built man with shoulder-length hair tucked behind his ears, pauses. "The linear mindset in me wants to write a list of adjectives first and find pictures that match," he says.

Capturing customer experience
In 20 minutes both groups post their collages on the wall. Williams asks everyone to explain which picture he chose and why. To Bare Necessities executive David Wauters, 33, a picture of a woman in a helmet suggests beleaguered shoppers, confused by the selection process.

A picture of several round lampshades reminds a dark-haired female marketing manager that real women, unlike models, come in all shapes and sizes. For a blond Bare Necessities employee in her early 20s, a shot of a woman with a halo makes the point that women don't always seek sex appeal when they buy underwear. "Sometimes we just want to be sweet," she explains. For his part, Wrubel posts a photo of open paint cans, "because shopping for lingerie should be colorful."

It soon becomes clear that buying lingerie is enormously frustrating for most women in the room, even those who work at Bare Necessities. Wrubel is astonished to hear that women often throw out a garment they just bought because it turns out to be uncomfortable or unflattering. The young freelancer complains that shopping for underwear is "boring." And a full-figured Bare Necessities executive says the experience can be downright painful. "I try on 100 things and nothing fits," she laments. "I feel shot down."

The first hints of a role - and a brand - for Bare Necessities begin to emerge. The website doesn't do enough to ease the pain of lingerie shopping, muses the freelancer. Couldn't Bare Necessities provide some sort of instant-messenger link on the site so that customers could ask questions or get information about what they're buying?

Williams, from Frog Design, seizing on the halo photograph, wants to know more about sexy vs. sweet. Wrubel admits that Bare Necessities has so far avoided projecting any image at all. "We use photos on the site to sell the product," he says. "It's functional by design, but we don't impact the mood." That sparks a discussion of some famous competitors' websites, which the Bare Necessities crew denounces as "raunchy," "cheap," and "over the line."

Competitive differentiation
Williams asks both teams (insiders and outsiders) to come up with one-word descriptions for three lingerie websites that compete with Bare Necessities. After a few minutes, the outsiders suggest "extravagant," "sexy," "low quality," "curvaceous," "sloppy," "messy," "generic," "too much lace," "too many markdowns," "inexpensive," and "too innocent," among others. Although most of the terms are pejorative, the outsiders note approvingly that one site sets itself apart by offering underwear fashion tips.

In an effort to help Bare Necessities find a distinctive image for itself, Frog strategy director Stuart Hogue, 31, now asks the group to suggest words that mean the opposite of the terms they used to describe their competitors' websites. "It's sort of like the Mad Libs game," he says.

New words go up on the wall. If one rival pushes lingerie brands with a reputation for poor quality, the outsiders declare, Bare Necessities should emphasize its high-end brands such as Versace and La Perla.

Another rival features only drop-dead-gorgeous models? Bare Necessities should demonstrate that it caters to all body types. If a department store chain's website displays only mainstream generic products, then Bare should focus on trendy niche products such as the Scanty line of sleepwear or lingerie from Spoylt, a high-end British manufacturer.

If a third rival is "juvenile," Bare should stand for "sophisticated." "Too innocent," finally, begets "complexity of character and personality."

Frog's Hogue announces that he has spotted a recurring theme: Everyone in the room seems to think that Bare Necessities should provide more guidance to shoppers. Citing Oprah Winfrey's TV book club, Hogue suggests that Bare Necessities position itself as a "sage" for lingerie shoppers.

The freelancer wonders aloud if Bare Necessities should create a wise fictional character to greet and guide visitors to the website. Wrubel riffs on this theme. Make that several characters, he says, representing a shopper in a sexy mood, a functional mood, shopping for a special occasion, etc. " 'Approachable expertise' kinda sums it up," declares Hogue.

At about 4:30, Hogue projects a giant PowerPoint slide on the wall. Created just a few minutes earlier, it resembles an archery target split in three sections by a giant letter "Y." At the center is the word "sage," meaning wise, knowing, of good taste. Floating nearby are the words "intimate," "sensual," and "expertise."

"'Sage' is your core essence," Hogue explains. "It differentiates you from competitors that don't advise or assist their customers." The word "intimate" suggests that Bare Necessities is comfortable with the wide variety of women's bodies. "Sensual" suggests that Bare Necessities can help women be more attractive.

Hogue and Williams then unleash a blizzard of marketing ideas based on the general notion of Bare Necessities as underwear sage. One is a tool that would help shoppers find the bra that matches their current mood (sexy, practical, athletic, etc.) Another is to push fashion and lifestyle tips out to customers, on such themes as how to hide your love handles. Frog marketing director Mick Malisic, 32, proposes hiring handsome men in limousines to deliver lingerie orders in person. (The audience greets this one with friendly but vigorous derision.)

Two weeks after the session, Wrubel reports that Bare Necessities has hired a graphic-design firm to change its website so that it emphasizes the themes of intimacy and expertise. Similarly, the company's newsletter now offers fashion advice as well as special deals. "Instead of just 'free slippers,' it's more 'the ten best bras to go with T-shirts' or 'eight solutions for your prom dress,'" he concludes.

FSB will stay in touch with Bare Necessities and report on the progress of its branding campaign.

A new Spin On Design.

(FSB Magazine) -- Andy Gregg may not have reinvented the wheel, but he has reinterpreted it. Gregg, 40, owns Bike Furniture Designs, which transforms recycled bicycle parts into sleek, eco-friendly furniture. Combining skills developed in art school -- he is fascinated by early-20th-century furniture design -- with mechanical chops he began polishing at age 10, Gregg sells his pieces on bikefurniture.com and through a smattering of retailers.

Creations such as the Milano lounge chair (pictured), $400, blend steel hardware and rubber upholstery -- made from inner tubes -- with swooping, organic curves. Gregg has been making the furniture since 1991, but it wasn't until 2004 that revenue picked up enough to allow him to quit his carpentry job and focus on his business, based in Marquette, Mich. (Last year, he says, revenue hit the "low five figures.") While the growing demand has spurred him to explore new designs and materials, he maintains that his favorite piece is his first and simplest barstool. "It's so pure," he says. "Just made from a wheel."

LVMH up 46%

LVMH Moët Hennessy Louis Vuitton, the world's largest maker of luxury goods, said Wednesday that first-half profit rose 46 percent as European shoppers bought more monogrammed Vuitton handbags and Tag Heuer watches. Read more.

Why the iPod is losing its cool.

Apple has added ever more extras to its digital music-player in a bid to stem falling sales. But fears are rising that the device is now too common to be cutting edge. Read more.

The rise and rise of rented luxury.

In the last half-dozen years, consumer appetites for luxury goods have fueled a surge in the leasing of $35,000-plus automobiles, private jets and vacation homes, even furniture and art. And borrowed finery, once available primarily to celebrities, corporate bigwigs and society swans, is accessible to anyone willing to pay. Some companies charge a membership fee. Others charge only for the item, usually 10 to 15 percent of its retail value. Read more.

First ad campaign for Gap's Forth and Towne.

The much-anticipated first campaign for Gap's Forth & Towne, a retail concept it unveiled in September 2004 (and officially named the following April) targeting women 35-plus, will launch this week, and the company would like to see its high-fashion effort reverberate with higher sales across all its divisions.

"The chic revolution begins," via AR, New York, breaks regionally in newspapers and magazines in markets with current or upcoming Forth and Towne locations, then goes national in December issues of Elle and More. Marketing will have a look and message distinct from other Gap brands, including older noncelebrity models, some in their 50s. A fashion call to action will urge the target consumer to "Go Forth and be chic" or "Speak softly and carry a big purse."

"We recognize the audience, and the target demographic and psychographic we are focusing on," said Kimberley Grayson, svp-marketing at Forth & Towne. "We're not about showing younger women wearing clothing that is for a woman in a different decade. It's a high-fashion campaign."

The effort also includes mall advertising, outdoor in Atlanta and Los Angeles, and direct mail to support 14 stores scheduled to open this fall in Atlanta, Houston and Seattle, plus California locations in Los Angeles, San Diego, San Francisco, San Jose and Santa Barbara. Five locations opened in New York and Chicago in August 2005. Spend was not disclosed. Gap spent $324 million on media across all its divisions in 2005, per TNS.

It is too early to determine whether Forth & Towne can establish its presence among older female consumers. Gap has not released financial figures regarding its first five stores. Although Gap is excited about the division—Paul Pressler, Gap CEO and executive creative director, called it "an important long-term growth opportunity for Gap Inc." when the concept was announced—the company has made its share of mistakes with other retail divisions, which include Banana Republic, Old Navy and its namesake Gap brand. Second quarter profits this year tumbled 50% and same-store sales slid 5% during the period, per company reports. Gap is in a turnaround mode as it focuses on improved product, marketing and its store environment in an effort to win back customers.

Gap is far from the first retailer to try to romance the older female shopper. The demo is currently being wined and dined by such specialty chains as Chico's, Eileen Fisher and Janeville, and department store brands Ellen Tracy, Dana Buchman and Sigrid Olsen.

Historically, this has proven to be an on-again off-again relationship for retailers. Chico's, for example, one of the first and most successful to woo fashionable 40-plus women with its embellished tops and bohemian skirts, has seen sales slow of late. It is now putting its efforts into its newer brands, a 200-store chain called White House/Black Market, along with Soma, which sells intimate apparel.

And, some national department stores are desperately seeking to reconnect with older females after focusing on younger consumers.

Banana Republic, also handled by AR, targets a young consumer with ads featuring stylish urbanites in its traditional sweaters and blazers.

"There's no confusion between the two," said AR president Raul Martinez. "Forth & Towne's campaign and tagline say we're speaking to you directly and make you look the way you perceive yourself as being. It's like taking fashion back to a women's base."

Grayson said Gap sees Forth & Towne apparel, which ranges from tailored separates to flirty items, accent pieces and Gap-like sweaters and jeans, as filling a void in the market.

"Paul Pressler identified this white space, this open hole for servicing a customer who has more than needs; she has a desire for fashion that fits and flatters and gets her excited," she said.

BRANDWEEK interview with Max Brenner, founder of Max Brenner: Chocolate by the Bald Man.


Max Brenner takes a stab at a plump cinnamon roll, which he’s ladled with warm gooey chocolate. It’s 2:45 p.m., but all he’s eaten today is cookies and waffles, the sugary stuff that’s become his very livelihood.

Brenner, who’s real name is Oded and was born in a suburb of Tel Aviv, recently opened Max Brenner: Chocolate by the Bald Man, a whimsical retail and restaurant emporium in Manhattan’s Union Square neighborhood. The 4,700-square-foot outlet—his first in the U.S.—is a cross between a noisy brasserie and a theme park. The front end features hand-crafted chocolates lined in a glass case like jewelry, while the remainder is a casual eatery offering everything from chocolate pizzas and fondue S'mores to sandwiches, salads and other center-plate fare. PR and word-of-mouth is attracting the attention of everyone from local students, kid-toting families, tourists—even PepsiCo’s new CEO, Indra Nooyi.

Against a background of jazz by day and soft rock at night, fixtures made from woods in varying shades of cocoa evoke Central America or Spain, accented by comical hand-painted drawings. “Stop it Max, this is already too much,” reads one sign. Average checks are $13 and annual unit volume is expected to reach a hefty $6 million. A second Lower East Side unit about half the size is expected to open before month’s end.

Brenner, a struggling writer who still hopes to pen his great novel, has opened 20 Bald Man locations in partnership with the Israeli candy conglomerate Strauss-Elite. And it was pretty much an accident.

“As John Lennon said, ‘Life happens while you’re busy planning other things,’” he quipped. At 21, Brenner got a government stipend to travel to Austria and take courses as a pastry chef. “For me, it was better than being a waiter,” he said, figuring he needed to live a life that was “very lonely, sad, sick or something like that,” so he could be inspired to write like the great Russian novelists he’d admired as a youth.

Brenner’s parents, both scientists, thought he was crazy, but he convinced them he could learn a trade and still pay his rent. Along the way, he traveled to Paris, met a chocolate maker and was smitten. “It was the peak of romance and the decoration behind life," he said of the now life-altering experience.

Brenner, a strict vegetarian, isn’t a chef who just wants to spin out new recipes. His mission is to create a “chocolate culture,” extending a world of appreciation and indulgence that goes back hundreds of years. After all, chocolate has many more attributes than taste. “It’s sexy, romantic and decadent,” he argues. Brenner recently discussed his melts-in-your mouth passion with Brandweek editor Karen Benezra.

Brandweek: What does your brand stand for?

Max Brenner: For me, chocolate is a material. It’s like the paint for the painter, or stone for the sculptor. It’s the material for me to express what I actually wanted to write many years ago. Chocolate is unlike many food ingredients. Cheese is a gourmet product. Steak is a gourmet product. Chocolate is a gourmet product that almost equally has so many associations and ideas that are much more than taste. It’s a way to create a very holistic experience that’s very intimate to me, but has broad appeal.

When people see Charlie and the Chocolate Factory they don’t feel chocolate, they feel fantasy in a straightforward way . . . and in a symbolic way, it’s very much like my character, which has lots of contradictions. And that’s what human beings are all about.

You can buy chocolate for $100 a pound and really love this fine [product] and the next day, wake up in the middle of the night have an attack of the munchies and buy a bar for 20 cents. It has all these edges.

BW: How did you develop the concept?

MB: It took me many years to reveal what it is and I’m still discovering something new about its DNA every day . . . It’s more complicated than just being ‘the ultimate place for chocolate.’

With chocolate you want to sit down and indulge. It’s not a restaurant where you come for many hours and spend $50. And it’s not fast like coffee—it’s something in between. It’s to sit after a movie for 45 minutes have a dessert, a hot chocolate and relax and enjoy. It’s an affordable luxury.

BW: So rather than sell chocolate by the bar or by the piece, you’re selling an experience.

MB: I call it a culture. Some people say how can you do that—making chocolate is thousands of years old! But the idea is composed of many elements besides taste. There is a very long tradition of making chocolate, but it’s not a culture like wine. Chocolate was very much narrowed by a tradition of making recipes.

We believe deeply in the concept. We’ve tried it in a few other countries—Australia, Singapore, The Philippines and Israel—so it’s not totally new. And since we’re owned by a big corporation, if we really want to test the concept, it has to work in different neighborhoods beyond Union Square.

I compare it to theatre. I do a lot of shopping, and when I finish, I go to restaurants. It moves me so much, I’ll talk about it to everyone.

BW: What are your plans for the U.S.?

MB: We don’t know yet. The next store is going to be in New York, but the third one might be in Las Vegas or LA.

The idea was to create a very European classical place on the one hand, with hot chocolate, coziness, brown tones and then to break it with whimsical wallpaper and signs that say “Look, Willy Wonka is Alive” with fantasy objects like the chocolate pipes.

BW: What brands do you admire?

MB: Virgin. I love him as a personality. If I think of the brand, it’s really the experience. People love what it represents. It’s controversial. Richard Branson is young, he’s a revolutionary. And he made it perfect. But I also love Starbucks and iPod and things like that that have influenced the culture.

BW: What’s your book about?

MB: One is about dreams and memories. All these interactions between the present reality and what we have in our dreams and the big gap between them.

People have a hard time living in their reality—they’re very non-Buddhist. The Western culture is about either living dreams or thinking about the future, or recalling the past that was so good.

I’m not a philosopher, so it’s not about finding a solution. But it’s all the time in my head.

Gen Y Chooses Favorite Denim Brands.


Popular jeans brand 7 For All Mankind is the top denim brand for Gen Y consumers ages 17-26. At least that's the latest according to a study conducted for the Retail Advertising and Marketing Association by SLANT, a marketing firm headquartered in Chicago. Other popular brands among this group include Diesel, Levis, Lucky and Gap.

Citizens of Humanity, Old Navy, American Eagle, Guess and Joes Jeans round out the top 10.

According to the survey, 41% of those polled typically spend more than $100 on each denim purchase. Nearly one in three (30.9%) spend $50-99; 28.2% spend less than $50 on a pair of jeans.

Nearly half (41.8%) of Gen Y consumers say they purchase jeans at a brand-specific retail store, such as Gap or Old Navy. Other retail choices include department stores (29.1%), boutiques (7.3%) and discount stores (6.4%).

In a separate RAMA survey conducted by BIGresearch, a consumer market intelligence firm, close to all consumers ages 17-26 regularly or occasionally either seek (89.4%) or give advice (93.5%) to others before buying; 40% said word-of-mouth influences their apparel purchases.

Macy's Touts national Scope in a New Campaign.


Macy's uses a re-creation of the Martha Reeves and the Vandellas’ hit “Dancing in the Streets” in ads designed to reposition the company as a national retail brand.

The effort breaking Thursday coincides with Federated Department Stores' ongoing conversion of 400 stores that had been under different names (such as Filene's and Marshall Field's) to Macy's, giving the chain a nationwide footprint.

The spots depict young, multicultural, Macy's-clad consumers dancing through their daily lives against a backdrop of city skylines (including New York, St. Louis, Chicago and Los Angeles). Macy's signature red color scheme and the star on its bag are prominently featured.

"Now wherever you are, there's a Macy's near you," a voiceover says. The company's familiar tagline, "Where to shop," remains.

Said Anne MacDonald, the company's CMO, "Our advertising will drive home the message that Macy's has the latest fashions, an exciting shopping experience and values."

In addition to TV, the campaign includes print in local and national publications, as well as radio, outdoor and online advertising. The company will also send a 54-page catalog to 3.8 million customers in its new markets.

WPP Group's JWT in Chicago is handling the launch assignment, with Hispanic efforts crafted by Latinvox in New York. Publicis Groupe's Starcom handles the Cincinnati-based client's national media duties.

Spending for the latest campaign was not disclosed. The company spent nearly $550 million on all U.S. advertising last year, according to TNS. Roughly $85 million was spent on TV, with the lion's share of the budget backing newspaper promotions.

Hanesbrands Rings In as New Company.

Hanesbrands on Wednesday began trading as an independent company under the symbol HBI on the New York Stock Exchange, completing its spin-off from Sara Lee Corp.

CEO Richard A. Noll and executive chairman Lee A. Chaden rang the ceremonial opening bell at the exchange, and Hanesbrands ambassadors roamed New York's financial center distributing Hanes products, which include Hanes, Champion, Playtex, Bali, Just My Size, barely there and Wonderbra. Newspaper ads and promotional materials touted a new marketing platform, "We Are What You Wear."

Kevin Hall, who joined the company in June as CMO, will oversee Hanesbrands marketing. He previously served as svp-marketing for Fidelity Investments and spent 16 years at Procter & Gamble where he was responsible for hair care and beauty brands.

Hanesbrands products are sold through mass merchants, department stores, company retail stores, catalogs and the Internet. In fiscal 2005, it generated $4.7 billion in sales and $406 million in operating profit. Hanesbrands is based in Winston-Salem, N.C.

Avon Names New Group VP-Global Design.

Retail-branding architect Joe Feczko has been named group vp-global design at cosmetics giant Avon, it was announced today. In the newly created position, Feczko will handle creation and execution of Avon’s worldwide global design vision.

Feczko was most recently head of marketing of private brands at Federated department stores.

As evp and chief creative officer there, he led the effort to transform the Macy’s nameplate into a nationally recognized brand. Just this week, the company rolled out a new campaign touting some 400 Federated stores that were re-branded as Macy’s outlets.

Before joining Federated, Feczko was svp-marketing for Neiman-Marcus and vp-visual presentation at Bloomingdales.

New Kid on the rack.

SHORTLY before 8 a.m. on a recent Tuesday morning, Christopher LaPolice was on the fifth floor of Saks Fifth Avenue, two hours before the store was to open. In a ritual that unfolds at the store each morning, the displays were cluttered with rolling racks and unopened cardboard boxes, and four young men were sorting through and stocking the latest Marc by Marc Jacobs dresses and cotton-candy-colored fake fur bomber jackets from Juicy Couture.

Then the men looked up at Mr. LaPolice.

“Vince is in the house!” one shouted. The boyish-faced Mr. LaPolice, dressed in a khaki cotton blazer and slim blue jeans, is a familiar early-morning visitor to the behind-the-scenes employees of stores like Saks, Bloomingdale’s, Barneys New York and Bergdorf Goodman, all of which carry a prominent display of Vince, Mr. LaPolice’s five-year-old sportswear line.

As president of the company, which makes one of the hottest labels in a competitive department known as “contemporary” in retail parlance, he is often there to review the latest displays of Vince cashmere sweaters, velvet dresses and rolled corduroy shorts as soon as they arrive from factories and distribution centers. He knows the names of the security guards, the display stylists and the men responsible for restocking the shelves, congratulating Jesse, Marc or Max on a great week of sales. Some nodded. One sheepishly gave a thumb’s up. It was nice to be acknowledged, even if selling the clothes was not their job.

“These people can make or break you,” Mr. LaPolice said, sotto voce, as he began a similar review of his competitors’ displays. “If you are nice to the support team, they’ll process your clothes first, and if you are nice to the visual team, you might get four extra mannequins.”

Because of his exuberance, a lot of people assume Mr. LaPolice, 46, is Vince, but Vince is actually a made-up name, inspired by the California designer Cynthia Vincent, who helped start the label in December 2001 but left after a few months. “A lot of customers want to have a designer they can associate with the product, so we called it Vince,” Mr. LaPolice said. The current creative backbone is Micheline Ip, a former designer for the contemporary label Laundry by Shelli Segal, where Mr. LaPolice once sold sportswear and where he met his business partner, Rea Laccone, who started Laundry in 1988 and built it into a major business.

According to Mr. LaPolice and Ms. Laccone, Vince’s founders, the company was supposed to be the antithesis of a big fashion business. Both Mr. LaPolice and Ms. Laccone were burned out after their experience at Laundry, which involved constant travel and interaction with stores and customers to stay on top of the latest trends. Just after the 9/11 attacks, they decided to start a small company that would be more personal, designing clothes that they would want to wear themselves. In the immediate aftermath of the attacks, the apparel industry generally suffered as consumers turned to home and personal entertainment. Vince’s founders seemed to acknowledge this with their design concept, which could be described as the fashion equivalent of comfort food.

“I would have been really happy if Vince was a $12 million business,” said Ms. Laccone, the company’s chief executive, envisioning a very niche business. “It would have been no effort to do what we really loved.” Instead of promoting a designer, the standard method of building a fashion brand over the last 30 years, Vince focused on the products: cashmere hoodies, pants made of luxury fabrics but cut in relaxed silhouettes, simple T-shirts that fit well — all items harder to find in department stores than you might guess.

Last fall, Vince displays were filled with tonal striped cashmere sweaters that were so popular they were repeated this season in a deep-V-neck silhouette. Now the same tonal stripes are turning up in advertisements for Banana Republic and in collections as diverse as those of Karl Lagerfeld and one called Love from Ya-Ya. Mr. LaPolice does not take credit for starting the trend, but for reacting more quickly than others when such stripes were first shown by Marc Jacobs.

“Vince has a way of picking up the newest trends and styling them for the contemporary customer in a way that is so right that a lot of customers want to know who Vince is,” said Jill Heller, the owner of On the One, a three-year-old designer store in Mount Kisco, N.Y. “We just ordered a big program in cashmere wrap jackets for fall and sold every piece, and that was in July and August.”

The collection is now sold in 400 stores around the country with annual sales of $50 million, more than four times its original plan. It was also introduced in Japan this summer in a licensing agreement with the Itochu Corporation, the Japanese trading company, and next fall, Vince will start a men’s collection. The company’s rapid expansion has caught no one by surprise, except perhaps its partners, all veterans of big mainstream apparel manufacturing companies.

Vince now sells as many as 18,000 sweaters a season, beating the odds of a treacherous market for new brands in the years since the terrorist attacks. High-end designers like Miguel Adrover, Olivier Theyskens and Helmut Lang, all major personalities who have been praised with awards and encouragement by retailers and the fashion press, have at the same time struggled to create businesses or stay afloat.

The self-styled ascent to prominence of a label like Vince suggests a more viable formula is taking shape for building a fashion brand for the 21st century. Vince is a business that has become successful in spite of the attention that is paid to the many designers who show in Bryant Park as part of Fashion Week.

The back story of Vince is in some ways the quintessential fashion industry tale and in other ways one of the most loopy — in both the circular and convoluted senses — of recent times. It involves a competitive group of partners who had crossed paths professionally many times, sometimes begrudgingly, one who once fired another and one who would have not been in the picture had it not been for a flourishing office romance. Of course, the industry is filled with such entanglements, but the tales of the soldiers of fashion have become increasingly rare in an era of publicly traded companies and a handful of luxury conglomerates that control much of the designer business.

As good a place as any to start untangling their connections is in 1982 in Calabasas, Calif., where Ms. Laccone, a graduate of the Laboratory Institute of Merchandising, a fashion business college in Manhattan, had been recruited from a retail management job in New York. Richard Hirsh, a big manufacturer of moderate apparel, had asked Ms. Laccone, who grew up in Watertown, Conn., to move West to run Melrose, a fashion label he was starting. The line did well under Ms. Laccone’s stewardship, but after a couple of years, she was fired over a compensation dispute. So, with a degree of vengeance, she went to work for a competitor, Podell Industries in Los Angeles, where she started Laundry, a label that would become a $100 million business in the matter of a decade. (She hired Mr. LaPolice there, too, but more on that later.)

When Podell Industries was sold to Liz Claiborne Inc. in 1999 for an estimated $40 million, Ms. Laccone, petite, intense and accustomed to working ferociously in order to live very well, said: “I thought, O.K., I’m going to retire. I thought I could lose the New York power suits once and for all.”

Her success was not lost on Mr. Hirsh, who occasionally bumped into Ms. Laccone at fabric shows in Hong Kong and Paris. Just after 9/11, Mr. Hirsh, who had sold Melrose and started another mainstream apparel company, John Paul Richard, was at a synagogue service attempting to make sense of the world after the attacks and took to heart a message about the value of friendship. At the suggestion of his rabbi, Mr. Hirsh reached out to an old friend; he called Ms. Laccone. Within a month, they had signed a contract to start Vince, with Mr. Hirsh as the silent production and financing partner.

Once they began showing the collection, they received orders for $9.5 million, far greater than they had planned, but Mr. Hirsh’s operations allowed them to handle the demand without much strain on production or deliveries.

“What’s funny is that the company where I began my career, and the man who fired me, is now my financial partner,” Ms. Laccone said. “I had been sitting at home, redecorating my house, and I realized there is a whole world of women out there like myself who could afford to buy designer clothes but want to dress casually. I wanted to create a business for a designer customer who wears T-shirts.”

Mr. LaPolice had a lot in common with Ms. Laccone. He was also born into an Italian family in Connecticut and started his career in retail, first at a Lord & Taylor store in Stamford, working his way up from a sales associate to a store manager, and then for the Ann Taylor retail chain, based in New York.

In 1990, Mr. LaPolice became the manager of Ann Taylor’s flagship, then on East 57th Street, near the company’s corporate offices. As part of his orientation, Mr. LaPolice was instructed to meet with several longtime Ann Taylor executives upon his arrival, including the divisional merchandise manager for casual sportswear, Mark Mendelson. Neither made a good first impression.

After Mr. LaPolice had made some adjustments to how the clothes were shown on the sales floor, Mr. Mendelson, who was responsible for the display, stormed into the store and asked to see him. Mr. LaPolice said Mr. Mendelson asked him if he had changed the clothes on the floor.

“Yes, I did,” Mr. LaPolice said he replied. “And doesn’t it look great?”

Something, or someone, on the sales floor must have impressed, Mr. Mendelson. He and Mr. LaPolice began a relationship both professionally and personally. Meanwhile, at Podell Industries, Ms. Laccone had also been making private-label clothes for Ann Taylor, and her buyer was Mr. Mendelson. Eventually, she wanted to hire him to work for Laundry, but Mr. Mendelson said he would take a job only if she would hire Mr. LaPolice as well.

“We say jokingly that she hired me to get Mark,” Mr. LaPolice said. At the company’s New York showroom, Mr. Mendelson and Mr. LaPolice helped Laundry expand with divisions for evening wear, bridesmaids and maternity. They spent hours in stores studying the daily sales reports and responded to trends like butterfly embroideries (after Dolce & Gabbana showed butterflies in Milan in 1998 and Cate Blanchett set off an embroidery trend in John Galliano at the 1999 Oscars) and burnout velvets (when Donna Karan created a big trend in 1997).

Although Mr. Mendelson and Mr. LaPolice remain together personally, they decided to establish more independent career identities in 2001. Mr. Mendelson became the chief merchandising officer of the industry giant Jones Apparel Group, while Mr. LaPolice went to work briefly as the president of Vivienne Tam, another contemporary designer.

When the opportunity arose to start a new collection financed by Mr. Hirsh, Ms. Laccone decided this time she wanted to work with Mr. LaPolice, despite their lives being entrenched on opposite coasts. Mr. LaPolice, the president, oversees sales and merchandising; Ms. Laccone, the chief executive, oversees design; and Ms. Ip is the chief designer.

Their bicoastal offices have a laid-back atmosphere — Mr. LaPolice works in a small loft off Bryant Park in New York and Ms. Laccone in a renovated 1920’s studio near her home in Los Angeles. Likewise, the clothes are relaxed, staples Ms. Laccone described as “casual luxury” at comparatively reasonable prices. For example, Vince’s breakthrough design was a zip-front cashmere hoodie, which the company continues to sell for $240 in new colors each season. It was introduced at a time when European designer labels, responding to the declining value of the dollar, were raising prices for similar items above $1,000.

“The appeal of Vince is that it is accessible luxury, providing high-quality pieces that don’t cost a fortune,” said Khajak Keledjian, the chief executive of the specialty store chain Intermix, where Vince’s $290 turtleneck sweater dresses have been a best seller this season. “They have strong items that represent trends with longevity.”

Managing the growth of Vince has been more of a challenge. Ms. Heller of On the One in Mount Kisco said that seeing Vince designs in so many stores could be a problem, because customers are increasingly looking for clothes they will not find anywhere else. There is also the matter of better defining Vince’s identity for customers who are so aware of what contemporary designers stand for in stores that they associate the color of the walls with the label on display: pale blue for Marc Jacobs; bright yellow for Catherine Malandrino; black and white for Theory.

“The only common thing about contemporary is the fit,” Mr. LaPolice said. “We don’t want to become that character from ‘The Banger Sisters,’ the one played by Susan Sarandon who is very ‘beige.’ ”

At the Saks flagship, the company sells $3.5 million in goods each year; at any one time, there is over $1 million in Vince inventory on the sales floor and in a stock room tucked off to the side, where Vince sweaters of every imaginable stripe and color are stuffed into steel racks three deep. There were 1,200 Vince sweaters in the store on the day of Mr. LaPolice’s morning visit. He made mental notes of which styles would most likely be back next fall.

Pointing to a popular zip-front cardigan with a fur collar, Mr. LaPolice said he had considered remaking the style, but ultimately decided it was too distinctive to risk saturation. In the stores in New York City that carry Vince, styles are distributed selectively, so that there are about 240 of one item available among them at one time.

“We ask ourselves these questions all the time,” Mr. LaPolice said. “When you work from what you see in the stores, you really do see what’s happening in a much different way.”

Dutch cadeaucode.nl, which launched earlier this week, lets late or lazy gift givers send presents by text message. How it works: the giver goes to the company's website, enters the recipient's phone number and a message, pays by credit card, and a message containing a unique gift code is immediately sent to the recipient.

While gift vouchers by email have been around at least as long as Amazon.com has, there's a fun immediacy to receiving a gift by text message -- a greater element of surprise, compounded by the gift voucher being instantly redeemable online. Cadeaucode's gift selection is limited to ten items, currently ranging from a Madonna Live cd/dvd to the infamous 'shave all over' Philips Bodygroom, and the assortment is regularly updated.

According to the company's founders, the limited selection is there for a reason: Cadeaucode doubles as a buzz marketing tool. Gifts are provided to Cadeaucode at no cost by brands hoping to gain a bit of inexpensive exposure. From that point of view, it would definitely make sense for the website to offer more information about the products than it currently does. None of the gifts show a price tag, and although the gift voucher only comes in one value (EUR 25,25), some products have a higher retail value. Which adds to the appeal for consumers – it's a present and a potential bargain, sweetly wrapped in a short message. ;-)

Martin + Osa


A new clothing chain from American Eagle Outfitters, which is set to open its first store in McLean, VA on Wednesday, will offer casual apparel that is both familiar and unfamiliar for the postcollegiate crowd that cleans up the sloppy clothing of their youth, using finer fabrics, tighter tailoring and sleeker silhouettes - like a cashmere pocket T-shirt, chinos sandblasted to feel like denim and a cable knit sweater that is hand-knit with yak yarn.

the chain’s name can be traced to the late Martin and Osa Johnson, a globetrotting husband and wife team from Kansas who explored Africa and the South Pacific Islands, chronicling their travels in photographs and diaries.

Executives at Martin & Osa said the couple had served as the creative inspiration for the entire chain, becoming the yin and the yang around which clothes were designed, fabrics were chosen and stores were laid out. Read more.

How Retailers Lure You to Shop and Buy.

As you step in the door of a retail store — whether it sells Gucci handbags, jeans for teens or hardware — you're being lured to shop and spend in ways so subtle you probably don't know what's happening to you.

Or your wallet.

Retailers know how you'll approach a store, where you'll hesitate, how to affect your mood, how to pique your desires, how to play to your aspirations. Everything in a store, from lighting to floor color to music to how goods are displayed, is meant in some way to get you to not just shop, but spend.

"It's like a Broadway musical," says Deborah Mitchell, a marketing expert at the University of Wisconsin. "Nothing was put into that musical that wasn't thought through. It's the same in a highly orchestrated retail environment."

At a Sony Style store, for instance, the subtle fragrance of vanilla and mandarin orange — designed exclusively for Sony — wafts down on shoppers, relaxing them and helping them believe that this is a very nice place to be.

ADVICE: Understanding why you're shopping can help curb it

Everything in the store is designed to encourage touch, from the silk wallpaper to the smooth maple wood cabinets to the etched-glass countertops. Products are displayed like museum pieces and set up for you to touch and try.

Once you touch something, Sony (SNE) figures, you'll buy it.

At a new Home Depot (HD) in the Atlanta suburb of Buckhead, the entranceway lures shoppers in with an open floor plan so they get a better "vista" of the store.

Floor-to-ceiling racks of goods, long the signature of the warehouse store, are further back. Lower displays of expensive goods — riding lawn mowers, upscale porch furniture and a home design center for redecorating kitchen, bath and flooring — are clustered so they're visible from the front door.

At a J.C. Penney's (JCP), a "decompression area" at the front of the store lets shoppers get acclimated and calm down from the noise in the mall or on the street. Three dressed mannequins offer a taste of the season's hot trends and set up a line of sight to the shopping ahead.

At a Macy's (FD) department store, salespeople stand about 10 feet inside the entrance, ready to spritz visitors with perfume.

All are ways to engage you in the store and draw you in.

The sound

Music has been used by retailers for decades as a way to identify their stores and affect a shopper's mood, to make you feel happy, nostalgic or relaxed so you linger. Think of '50s cocktail bar music in a Pottery Barn.

But retailers are becoming more sophisticated in how they use music. J.C. Penney has just finished installing a new system for its stores that allows certain music to be played at certain times of the day. It can "zone" music by demographics, playing more Latin music in stores where there's a higher Hispanic population — all controlled by headquarters in Plano, Texas.

"Most people know they are being influenced subliminally when they shop," says Bernadette Schleis, whose company studies consumer behavior. "They just may not realize how much."

To help you understand what's happening when you go shopping, here's a guide: How Retailers Lure You to Shop and Buy.

The aroma

Anyone who's walked into a mall has been enticed by the smell of cinnamon buns or chocolate chip cookies. Now, retailers such as Sony and shirtmaker Thomas Pink are developing "signature scents" that you smell only in their stores.

"Scent is so closely aligned with your emotions, it's so primitive," says David Van Epps, president of ScentAir, a Charlotte company that develops exclusive scents for businesses, including Sony. His firm's revenue, number of employees and output have tripled in the past two years, he says.

"Imagine you're trying to create the same level of brand loyalty that Harley-Davidson (HOG) has when a guy is willing to tattoo his arm with the words 'Harley-Davidson.' That's what we're going for."

Other retailers might not have signature scents, but they use fragrance. Bloomingdale's uses different essences in different departments: baby powder in the baby store; suntan lotion in the bathing suit area; lilacs in lingerie; cinnamon and pine scent during the holiday season.

"We even fragranced their outside (display) windows in New York last year," says Van Epps. "They did a Phantom of the Opera display, and we fragranced it with rose."

Thomas Pink pipes the smell of clean, pressed shirts into its stores. The essence of lavender wafts out of L'Occitane skin-care stores.

And if brightly colored window displays aren't enough to lure you into a Williams-Sonoma kitchen store, the scents from frequent cooking demonstrations may. "It feels like you are in someone else's house," says Michelle Bogan, a retail consultant for Kurt Salmon Associates.

Sony decided to create its own scent for its Sony Style stores as one way to make the consumer electronics it sells less intimidating, particularly to women. "From research, we found that scent is closest to the brain and will evoke the most emotion, even faster than the eye," says Dennis Syracuse, senior vice president of consumer retail sales. "Our scent helps us create an environment like no other."

How retailers use scent can be tricky, though, Mitchell says.

"Not everyone agrees what smells good."

The entrance

The scent may have lured you near, but what's in the entrance is the spring on the trap. That's where you'll see some of the glitziest, most expensive stuff in the store — the stuff you wish you could buy.

"The key businesses that draw women — the high-volume, high-profit goods — are right up front: handbags, cosmetics, jewelry and sometimes, intimate apparel," says Dan Butler, a National Retail Federation vice president.

The entrance is important because it hints at what's inside that you must have. "We're trying to give her ideas right as she's walking into the store," says Karen Meskey-Wilson, vice president of store design for J.C. Penney.

Stores that cater to teens often pick one hot item and heavily promote it in their windows to increase demand, says consultant Bogan. Gap is doing that this fall with denim. The new "skinny" jeans style may push people to update their wardrobes, she says.

"The idea is that there is so much excitement about great new jeans that you'll want to go out and buy some, even if you don't need jeans," she says.

Others use a less-is-more tactic. Abercrombie & Fitch lures teens into its Ruehl stores by not having merchandise visible from the mall. You have to go into the store, which looks like a Greenwich Village apartment inside, to see if you like anything. Once inside, the retailer hopes its soft lighting, couches and books will make you want to stay and buy.

In department stores, merchants battle to get the best spots up front for their goods; those that sell the most get the prime positions. Cosmetics, which never go on sale, are among the most profitable items sold in department stores, Butler says. Free makeovers lure clients in and create a "sense of connection and obligation," says consumer psychologist Kit Yarrow.

"A nationally known makeup artist can sell $30,000 in cosmetics in one day," says Butler of the NRF.

The flow

How you as a shopper move in and around a store is not, really, up to you.

You're funneled from the store's entrance past its most expensive goods through a maze of aisles and into departments that are set up as stores-within-a-store. Then you find yourself on "the racetrack," an oval aisle that carries you around the entire building to get a look at everything.

It's the same at a department store or a home renovation store or, on a different scale, in a specialty retailer

Mini-displays called "trend stations" are parked in the middle of aisles to stop shoppers' progress and entice them to look and buy.

Lifestyle vignettes, such as carefully constructed mini-bedrooms or mini-bathrooms, make shoppers stop and look. Home Depot is using such vignettes in its Buckhead store to showcase its expanded kitchen and bathroom goods, including new vessel sinks and architectural designs for cabinets. The displays may be adopted in other new and renovated stores.

"Customers are so much more sophisticated in décor and wanting to take a risk in their home. So we're getting more sophisticated in our presentation," says Kim McKesson, senior vice president of store merchandising. "Our bathrooms aren't just knock-down white cabinets anymore."

If you like the look, whatever the look is, you can have it right away. All goods in the displays are within arm's reach.

"It's incredible to watch people as they walk up, see the mannequins and pick up the whole outfit," says Meskey-Wilson of J.C. Penney. "We're seeing great sell-through."

Sony Style has mini-living rooms set up to showcase what its 40-inch flat-panel TV would look like over a fireplace. "We've had customers bring in their architect and say, 'Re-create this in my house. I want the whole setup,' " says Syracuse of Sony.

Narrow aisles crammed with goods are going away.

"Twenty years ago, the founders wanted you to get lost in the store," spokesman David Sandor says of Home Depot's founding partners, Bernard Marcus and Arthur Blank. That's why Home Depots were laid out with long narrow aisles and no cut-across in the middle of the store.

Now, Home Depot is widening its aisles and lowering displays so customers can touch and feel products. J.C. Penney is "really weeding out the stuff in our stores," says Mike Boylson, chief marketing officer. The retailer used to have eight to 10 rows of merchandise in each area. As it opens new stores or renovates existing ones, it's cutting that to four.

"You don't have to go through a sea of racks anymore," says Meskey-Wilson.

Most consumers come into a store and head to the right, says consultant Bogan. That's why retailers, including Williams Sonoma, put high-priced impulse items to the right of the front door, such as a $150 wine opener.

"The No. 1 thing retailers are trying to do is to get people to make impulse purchases," says Yarrow, also a business professor at San Francisco's Golden Gate University.

And you thought you had a list and were going to stick to it.

Starbucks to open Pop-Up Art Salon in NYC.

A trend hybrid, Starbucks Salon is a crossing between pop-up retail, being spaces and brand spaces.

Starbucks just announced that it will open a temporary arts and performance coffee house in New York City this fall. The Salon will be open September 8-17th, with tentative plans to pop up in San Francisco, London, Beijing, and Boston in the future. The concept builds on coffee houses' history of being informal venues for arts and entertainment, and the Salon will feature both up-and-coming and established artists, including Ursula Rucker, Jose Gonzalez and Jim Carroll.

The coffee giant did a dry run in Utah earlier this year, at the Sundance Film Festival. A website and full program for the New York Salon will be online on August 25th, and the coffee house will be located at 76 Greene Street (in SoHo between Spring & Broome).

For more examples of temporary retail outlets, check out trendwatching.com's extensive coverage of pop-up retail. And while you're at it, you might be interested in reading about the brand spaces trend, too.

Website: http://www.starbuckssalon.com

Flight 001 opens store in Brooklyn.

While aviation has known easier times, the store devoted to air travel, Flight 001, is doing well. Flight 001 opened in New York in 2002, and was one of the first ever travel concept stores. We were happy to hear that the retail chain recently opened a shop in Brooklyn, adding to stores in LA, San Francisco, Chicago, Dubai and Berkeley.

Named for the Pan Am flight that flew around the world (westbound) from San Francisco to New York, Flight 001 sells everything a frequent flyer might need, from a wide array of luggage to toile passport holders, in-flight aromatherapy kits and Pan Am lunch bags.

Opportunities? We still think Flight 001 or similar stores would go down just as well in travel hubs across Europe and Asia.

Website: http://www.flight001.com

Wal-Mart Partners With national Gay and Lesbian Group.

In an unprecedented push, Wal-Mart Stores has hired a gay-marketing shop, joined the National Gay & Lesbian Chamber of Commerce and begun discussions with activist groups about extending domestic-partnership benefits to its employees.

'Very pragmatic'
"Wal-Mart is going about this in a very pragmatic way," said Justin Nelson, president of the National Gay & Lesbian Chamber of Commerce, an independent organization with 24,000 members. "They have been viewed with some degree of skepticism by the lesbian, gay, bisexual and transgendered community, and it's important for them in terms of gaining market share to change that."

A Wal-Mart spokeswoman declined to comment on the trio of moves and would only confirm the company's partnership with the NGLCC.

The initiative comes as Wal-Mart aims to broaden its appeal and woo both upscale and urban markets, but this is not the first time Wal-Mart has attempted to appease critics in the gay and lesbian community. In 2003 -- after years of lobbying by activist groups -- Wal-Mart extended its workplace nondiscrimination policy to include sexual orientation.

Firm typically a consultant
Despite an ongoing review for its $578 million ad account, Wal-Mart hired Witeck-Combs Communications, a marketing shop known for its work targeting the gay and lesbian consumer market, according to Bob Witeck, president of the Washington-based firm. Wal-Mart would not confirm the assignment and Mr. Witeck declined to comment on the "nature of the relationship," but added: "We work in more of a consulting role with most of our clients."

Founded in 1993, the eight-person agency's client list boasts automotive brands Volvo, Land Rover, and Jaguar, in addition to American Airlines, Citigroup and at least a dozen nonprofits, such as the American Association of People with Disabilities.

Witeck-Combs, a member of the NGLCC, is also a participant in the organization's supplier-diversity initiative, or SDI, a certification program launched this year and modeled after minority- and women-supplier development programs. Corporate participants already include IBM, American Airlines, Motorola and American Express.

Conference sponsor
As part of the Wal-Mart Stores partnership with the NGLCC, Dee Breazeale, VP-divisional merchandising, Sam's Club Jewelry, has joined the organization's Corporate Advisory Council and Wal-Mart will sponsor two of the organization's annual conferences.

Mr. Nelson said Wal-Mart approached the organization four months ago, expressing interest in the supplier-diversity initiative. "The expectation is that Wal-Mart will encourage their core suppliers -- the P&G's, the Johnson & Johnson's and the Gillette's -- to also diversify their revenue streams to include LGTB businesses," Mr. Nelson said.

He said the retailer is "working right now on providing domestic-partnership benefits" and that Wal-Mart may soon join the 261 members of the Fortune 500 that offer the benefits.

Strongest signal yet
The steps being taken by Wal-Mart are the strongest signal yet that the company may be taking a permanent stand on the side of gay rights, despite the inevitable lambasting from right-wing conservative groups, such as the Family Research Council and the American Family Association, said Nu Wexler of Wal-Mart Watch, the Washington-based coalition backed by the Sierra Club and the Service Employees.

"This partnership shows Wal-Mart is changing," Mr. Wexler said. "It's worth noting they declined to publicize this partnership and left it up to the chamber. Wal-Mart is very eager to publicize partnerships. It's possible they fear a backlash from their conservative consumer base."