TODAY IN BONEHEADS: In Which Dolce & Gabbana Act Like Idiots & What Will Longtime Supporter Madonna Say About It?

Some people do not know when to shut the hell up.
If you are familiar with hashtags, you may have noticed that the latest one making the rounds in #BoycottDolceGabbana. Yes, the renowned Italian design duo Dolce & Gabbana have put their collective foot in their collective mouth in an interview released last week with an weekly Italian magazine called Panorama where they declared that, as a couple, they are against gay adoptions. Quotes abounded over the weekend, among them:

"No chemical offsprings and rented uterus: life has a natural flow, there are things that should not be changed."

Procreation “must be an act of love,”

and that children born though any method other than good old sex are “children of chemistry, synthetic children. Wombs for rent, semen chosen from a catalog.”

So far, a translation of the entire article has been tough to track down, but at this point, the damage has been done. Leading the swift response is, not surprisingly, Elton John who, with his husband, has two children conceived through IVF and launched the hashtag while declaring that he would not wear another stitch of Dolce & Gabbana clothing. Naturally, a barrage of celebrities followed, and before the weekend was over, the designers were on the backtrack trail with little success. On Sunday, the designers released a statement claiming that "it was never our intention to judge other people's choices. We do believe in freedom and love," without actually apologizing for the insults.
Of course, it's hard not to glean a judgmental tone from the initial statements which echo a similar sentiment expressed by the designers in the pre-Twitter days of 2006 where they again expressed antipathy toward non-traditional families. It looks like the designers will be on Gay Twitter's shit-list for quite some time to come, but the question among many retailers who have devoted a great deal of floor space to the label is just how big this controversy will go and whether or not it will evolve into a John Galliano-level damaging scandal? Considering that the designers have a huge celebrity following including endorsement deals with Scarlett Johansson, Matthew McConaughey and Colin Farrell for fragrances and cosmetics, it is hard to imagine that an actress wouldn't think twice about wearing Dolce & Gabbana to a high profile event in the coming weeks.
While modern boycotts of massive businesses like Chik-fil-A and Target for proclaimed and perceived anti-gay bias have not really had much material effect on the companies, Dolce & Gabbana have a much smaller and more specialized business where it can be presumed that the designers have not just insulted many of their customers, but probably a good portion of their employees at many levels of their organization, not to mention buyers and members of the fashion press whose favor it is important that the designers maintain. Joining Elton John in admonishing the designers is a cavalcade of celebrities including Victoria Beckham, Ricky Martin, Courtney Love, Ryan Murphy and Martina Navratilova just to name a few, but notably still silent at this point is Madonna, whose early support in the 1990s gave a crucial boost to the designers when they were still a little known label globally. She has continued to wear their clothes over the years and starred in their advertising campaign in 2010 (pictured below). The designers' comments fly in the face of Madonna's longtime support of gay rights, and though the singer is currently appearing in ads for Elton John's pal Donatella Versace, it is hard to imagine her remaining silent about this, especially as she is in the middle of a heavy promotional schedule for her latest album and upcoming tour. It's hard to imagine the controversy ending before Madonna weighs in in some way, so, we're waiting , Madge.

POINT OF VIEW: Chris Burch Speaks About C.Wonder's Spectacular Crash And Burn

There's no Critical Shopper column again today's Thursday Styles, but instead, the Times treats us to a profile of Burch Creative Capital CEO Chris Burch, the man who is, for better or worse, responsible for the nearly extinct retail debacle known as C.Wonder.
As far as we can tell, this is the first time that Burch has spoken in detail about the chain's failure, and as expected, he is somewhat guarded and just a little bit defensive. The article, by Laura M. Holson, recounts in detail the many mistakes of the ambitious rollout of the chain (along with some of Burch's other recent, unrelated blunders) including the ill-advised, expensive leases, the excessively rapid expansion, the costly overseas offices and, most prominently, the nearly universally recognized aesthetic similarities to his ex-wife Tory Burch's company's retail environments, products and general style. Unfortunately, Burch is legally restricted from discussing the lawsuit that brought C.Wonder and Tory Burch into civil court, but he does manage to speak about the chain in a way that is surprisingly remorseful, but ultimately not quite self-aware enough to fully comprehend why the venture was probably doomed from the start.

“I take full responsibility for the failure of C. Wonder,” Mr. Burch said in a telephone interview from his home in Miami. “Please understand that.” He said he wasn’t upset about losing his own money, estimated to be at least $70 million in investment and loans. “It’s not about my ego, O.K.?” he said. “It’s not about failing. It’s about the fact that this is a really good idea that should have been successful.”

While he still sees himself as something of a misunderstood visionary, he won't own up to the widely perceived notion that one of his main goals at C.Wonder was to show up his ex-wife's wildly successful brand which, in fairness, he did have a hand in creating —although exactly how big of one remains in question. The article is well worth reading at the very least as an anatomy of a retail venture gone wrong when there were so many opportunities for success despite its challenges, but for Burch it may just serve as a big caveat to anyone considering going into business with him in the future.

Revenge Retail Gone Awry? Tory Burch’s Ex-Husband Describes C. Wonder’s Fall By Laura M. Holson (NYTimes)

UNSURPRISING SHUTTERING: C.Wonder Is Dunzo

In a move that was not entirely unexpected by retail watchers, C.Wonder is shutting down its remaining retail stores this month. Last November, the chain shuttered nearly two thirds of its 32 stores, which is a lot of underperforming locations for a young chain to have to manage. At the time, it announced that it would add wholesale initiatives to revitalize the brand, but it now is clear that the company is simply being closed. All of the staffers in the headquarters were informed yesterday that it would be their last day, and the office was cleared. Remaining retail staffers can expect employment for the next two to three weeks as merchandise is liquidated, though many learned of the chain's demise through a Buzzfeed report before they were officially informed. WWD reports that remaining merchandise will be consolidated and liquidated at the Shops at Columbus Circle location, so bargain hunters should focus on that spot for what should be some deeply discounted merchandise.
Most reports are pointing to the company's choice of expensive, high profile retail locations and lavishly appointed stores matched with relatively low-priced merchandise as C.Wonder's recipe for doom. It remains difficult to discuss the venture without the accusations that arose immediately after its first store in SoHo debuted that founder Christopher Burch of Burch Creative Capital was ripping off the aesthetic style of his ex-wife, designer Tory Burch, as some sort of "revenge retail" project. Mrs. Burch promptly sued even as her ex-husband had not yet completely extricated his interests from her company, which they initially ran together. The accusations dogged the chain even when its Flatiron location on lower Fifth Avenue opened last year in a space some said was specifically chosen because it was in the same building as Tory Burch's preferred hairdresser.
Well, that pettiness is now over with a win for the ex-wife and another high profile blunder for Chris Burch. Even now, the company is cagey about the brand's fate. The Cut published a response from the company to its inquiry which confirmed the store closures, but said, "The Company continues to evaluate its best alternative to maintain the C. Wonder experience for its customers," suggesting a future for the brand that seems unrealistic, especially since all C.Wonder social media accounts have been wiped, and its website will go dark by week's end. It echoes the company's response to Burch's last failed venture, the Monika Chiang brand, in which it refused to confirm that the label had been shut down even as the stores were closing and remaining goods were being liquidated at sample sales. Burch is not completely out of the game, however. He still has his daughters' brand Trade Mark which debuted last year on Grand Street in SoHo to develop, and even more prominently, he has a major new product launch with Ellen DeGeneres called E.D. ahead of him, but with two major failures, Chris Burch now has a lot more riding on the success of his remaining ventures.

Exclusive: C. Wonder Is Completely Shutting Down (Buzzfeed)
C. Wonder Shutters Stores (WWD)
Previously:
Broken Chain?: C.Wonder Responds To Bad Buzz(feed)

CUE THE LAWYERS: American Apparel Has Really Fired Dov Charney For Good This Time

Remember last June when the board of American Apparel fired its founder and CEO Dov Charney?
And then he got some backers and bought up even more stock than he already owned, and somehow got to stay on as a consultant? And then, after all the scandalous disclosures of information about Charney, things seemed to settle down.
Well, Happy Chanukah, Dov! You're fired for good now.

According to WWD, and various reports popping up in the media yesterday evening, Charney has been officially fired for cause, and, to emphasize that fact, a new CEO has been hired to replace him permanently. Paula Schneider, who has held executive positions at major companies like Warnaco, BCBG Max Azria and Laundry by Shelli Segal will be taking over the CEO position on January 5th. WWD's report hints that a deal to allow Charney to have some sort of official, ongoing role within American Apparel may have been under discussion as recently as a few weeks ago, but it apparently went sour leading the company's board to revert back to their original plan which was to get rid of him entirely.

Is it all over for Dov? Probably, but even fired, he is still American Apparel's largest shareholder, and his generally combative nature regarding this issue suggests that he can be expected to be something of a thorn in the board's side at the very least for some time to come. Stay tuned to see how this continues to play out.

Dov Charney's Firing Could Spur Lawsuits (WWD)
Previously,
SCANDAL ROUND-UP: American Apparel Gains Stability Via Hedge Fund -Charney's Future In Question
See all American Apparel coverage HERE

TAKE A BOW: Abercrombie's Infamous CEO Retires

It has been a long time coming, but Mark Jeffries, the embattled CEO of Abercrombie & Fitch has finally bowed out after several years of scandals, embarrassing press coverage and, most importantly, poor business performance. He was announced to be retired this morning according to WWD. The company will be run by a newly created "Office of the Chairman" to be led by newly promoted executive chairman Arthur Martinez and a group of other managers. An executive search firm has been engaged to find a permanent CEO.
While Jeffries can be credited with transforming Abercrombie & Fitch from a dusty classic sportswear retailer to one of the country's hottest retailers for teens and young adults with racy advertising and youthful product design, the backlash set in hard after numerous insensitive comments to the press and reports of unprofessional behavior behind the scenes including giving his partner responsibilities and influence over business decisions without his actually being an employee. Strong business had often allowed Jeffries to deflect criticism, but the company's recent poor performance coupled with renewed criticism of Jeffries' business practices proved to be too much for him to bear.

While Abercrombie's sexy image was what catapulted it to success in the 1990s, its resolute refusal to update and evolve its signature imagery has allowed it to long since fall into self-parody with its shirtless greeters, dark, over-scented stores and male pinup shopping bags. what was once exciting to shoppers has become stale as its third quarter sales fell 12% and comparable sales online and in-store fell 10%, continuing a downward trajectory. Jeffries' public statement regarding his retirement goes as follows:

"It has been an honor to lead this extraordinarily talented group of people.  I am extremely proud of your accomplishments.  I believe now is the right time for new leadership to take the Company forward in the next phase of its development."

Without him at the helm, maintaining his own creative direction and choices, look for some radical change at the chain as it works to shore up its business and re-invent itself for a new generation of shoppers.

Michael Jeffries Out at A&F (WWD)

BROKEN CHAIN?: C.Wonder Responds To Bad Buzz(feed)

C.Wonder is once again in the news, and not in the best way.
Today's WWD has unidentified Burch Creative Capital (the owner of C.Wonder) staffers refuting an Friday afternoon item in Buzzfeed that claims the three year old chain is planning to close nearly two thirds of its stores and switch to a wholesale brand with a limited number of freestanding stores as opposed to a retail chain.

It's hard to know exactly what the plans are for the chain which has proved popular with customers for its stylish and well-priced offerings, but has weathered unfavorable comparisons to Burch CEO Chris Burch's former wife's label, Tory Burch, culminating in highly public lawsuit between the companies. Though the legal squabble is now in the past, Buzzfeed claims that the acceleration of C.Wonder's expansion was a result of Mr. Burch's desire to prove that his new chain was more than a less expensive version of his ex-wife's thriving brand, calling it a "revenge retail" project. The article suggests that newer locations of the 32-store chain were chosen in haste and not carefully considered for premium placement in malls. The allegedly overexpanded company is said to be planning to close 20 stores after the Holiday Shopping season and convert to a wholesale model, though the article notes that many potential retailers who already have a strong business relationship with Tory Burch might not be eager to risk offending her and her brand by bringing in C.Wonder under the same roof.

While the specific claims of the article have not been addressed by Burch Creative Capital, WWD offers an official response from a company spokesperson over the weekend which suggests that it may not be off the mark:

"As a start-up business, we continue to look at ways to enhance our business model and in that regard we are committed to being an omni channel company pursuing retail, wholesale, e-commerce and international opportunities. At this time. We are rationalizing our store fleet and will be focusing on our most profitable stores."

What does this translate to? It sounds like some stores will definitely be closing, probably early next year. How many remains in question. But it's worth noting that when the Monika Chiang brand was shut down by Burch last year, the company was cagey about confirming its demise even as its stores were shuttered and its remaining stock was cleared out at deeply discounted sample sales, so it's hard to know what to make of official word from the company. It looks like we will have to watch and see exactly what happens with C.Wonder which just opened its third Manhattan store on Lower Fifth Avenue near the Flatiron Building. The next few months will tell us a lot about C.Wonder's future and what will become of the chain. Stay tuned.

Burch Creative Capital Refutes Reports of C. Wonder Store Closures (WWD)
Exclusive: C. Wonder Is Closing Most Of Its Stores (Buzzfeed)

 

FAILURE TO LAUNCH: Apple's iPhone Lines Get Hijacked By Black Market Straw Purchasers

As most people with any working senses know, Apple's newest iPhone models launched last Friday to another round of blocks long lines and truly insane camping out for days in front of Apple Stores in New York and in many other cities to be the first customers for the coveted new device. While the story has become familiar over the past few years, The Shophound noticed something odd while walking past the Apple Store on 14th Street on Friday (pictured above). Even in the mid-afternoon, the line still extended well down the block, containing several hundred people, and, for some strange reason, it appeared that the vast majority of them —at least 90%— were Asian. Now, before you get your hackles up, there is nothing wrong with this. We aren't making any judgements, but it did seem odd that in Manhattan, the group of customers who were willing to spend hours in line would be so demographically lopsided. We aren't experts in Asian languages, but it appeared that they were Chinese speakers and, as a group, didn't seem like the young, tech-crazed type of people who would subject themselves to waiting in line for hours just to be among the first people to get their hands on a coveted device that will be easily accessible to anyone within a few days.

We didn't think much more of it until the next day when we came across a post on Gothamist which suggested that the lines in front of Apple's stores were packed with straw buyers purchasing iPhones for the Chinese Mafia. The article pointed to "Filmmaker and professional fun-haver" Casey Neistadt, a tech fan who has chronicled the annual frenzy over iPhone releases for the past few years. Neistadt was struck with the observation that, when the doors finally opened, what he saw among those who had doggedly waited for days to buy the new iPhone was not the excitement fans finally getting their new toy, but a new grim determination of people who had a task to accomplish and just wanted to get it over with. While The Shophound would not presume that the Chinese Mafia (whoever that would actually refer to) is explicitly behind all of this straw purchasing, Neistadt's video (embedded after the jump below) identifies a pattern of buying among the many Chinese speaking line-waiters, many of whom apparently needed a Mandarin translator to communicate with the filmmaker. Purchase two unlocked phones in cash. Hand the phones off or re-sell them to a second post-purchaser a few blocks away who stockpiles bag of new phones to be sent off to —well, who knows where?

The presumption is that the phones are being sent to China, where governmental red tape has kept Apple from announcing a release date for the iPhone 6 and it is unavailable for legal purchase. According to the Washington Post, the new devices are already selling there on the Black Market for up to 10 times their U.S. purchase price. Neistadt suggests that a network of smugglers has descended upon New York's Apple Stores, and, though he backtracked somewhat from the Chinese Mafia accusations in a later interview, it seems clear to any observer that there is some real organization behind the effort to get iPhones into some kind of unauthorized reselling channel which is artificially packing the huge lines outside Apple Stores with straw purchasers. Without them, it seems unlikely that these lines would stretch for block after block. Many shoppers have reported that it is already fairly fast and convenient to pick one up at one of the city's many AT&T, Verizon or other mobile phone retailers —but, of course, those phones are for people who are actually buying for themselves as they come with service contracts.

Apparently, this activity falls into something of a legal gray area. The buying and immediate reselling is not illegal, and Apple has run into problems in the past trying to discourage sales of desirable devices that they thought were being funneled into unauthorized channels. What is questionable is the presumed smuggling that happens after the observed handoffs. Neistadt's video also documents some unfortunate behavior by NYPD officers assigned to patrol the overnight lines, and some altercations among those in line which makes one question the safety (and sanitation) of having these annual, several-days-long queues at all. At this point, it seems like the only reason why people would endure hours and days waiting on the sidewalk to buy a phone would be for a handsome profit or possibly a legitimate lack of sanity. Have a look at the video after the jump and make of it what you will. In the meantime, when The Shophound gets our new phone, we plan to order it on line to pick up in-store. No lines.

Video: Were iPhone 6 Mega Lines Taken Over By Chinese Mafia?, Filmmaker Discusses iPhone 6 Lines & "Chinese Mafia" (Gothamist)
iPhone 6s being sold for insane amounts of money in China (Washington Post)

NEW YORK FASHION WEEK SNAPSHOT: Finishing Fashion Week With Nipples

One thing about New York Fashion Week compared to other cities is that it is still conservative in some ways. While bared breasts might not be so notable in Milan or Paris, in New York, they are still something of an anomaly, at least when they are on purpose, Every now and then, an errant nipple will make a run for it out of a plunging neckline, but when Transylvanian designer Dorin Negrau's model came down the runway earlier today in an open jacket over a leather underbust corset there was no question about where your eyes were meant to be directed. It is a fairly unusual sight on New York's catwalks, especially at the Mercedes-Benz Fashion Week tents, but, there they were as a fairly nonplussed looking model. snaked her way through the multi-runway configuration of Lincoln Center's new Pavilion tent. Whether the designer's Dracula-inspired New York debut collection will make an impact remains to be seen. It's tough when the top editors and buyers are most likely on their way down to Tribeca to see Calvin Klein Collection, but perhaps the talk of bare breasts will get them to take a look at the show. It's tough to create awareness when there are a couple hundred shows during Fashion Week and you are coming all the way from Romania, but when in doubt, a few boobs will always get at least a little bit of extra attention. Have a look at the collection (including the NSFW version of the shot above) in the gallery after the jump

CONTINUING SAGA: Barneys Settles Its Profiling Case For Over $½ Million

After a nine-month investigation by the office of New York Attorney General Eric Schneiderman, Barneys New York has agreed to pay $525,000 to settle allegations of racial profiling from two customers who were detained after making purchases at the Madison Avenue store last year. “This agreement will continue our work to ensure there’s one set of rules for everyone in public accommodations, including customers in New York’s retail establishments. This agreement will correct a number of wrongs, both by fixing past policies and by monitoring the actions of Barneys and its employees to make sure that past mistakes are not repeated,” announced Schneiderman. The Attorney General's Office found that Barneys' Loss Prevention department detained a disproportionate number of minority shoppers for shoplifting and credit card fraud, and deemed its record keeping and basic methods to be generally sloppy and sub-standard. The chain will now take up several measures to correct its lapses including retaining an independent anti-profiling consultant who will help the store institute racially neutral loss prevention practices along with instituting new policies to help prevent future incidents such as the ones that caused the investigations last year. New training for both security and sales associates will be implemented, and the store's contact with local law enforcement will be adjusted and properly documented.

There's no word yet on how the State's Attorney General's office will handle similar charges against Macy's that surfaced shortly after the allegations against Barneys broke, but there's no doubt that retailers all over the city will be closely following the results of both settlements so they can avoid similar reputations tarnishing scandals.

Barneys Settles Racial Profiling Cases (WWD)

WEST SIDE SWITCH: Antiques Give Way To Book Culture On Columbus Avenue

It's rare to report the expansion of a new bookstore these days, but here is the rare case of an independent retailer failing to reach a lease renewal agreement and being replaced not by a banal bank or chain store, but by a different independent business who has survived its industry being clobbered by corporate chain store competition over the past couple of decades. Antique store Olde Good Things has left its Upper West Side store at 450 Columbus Avenue after choosing not to renew its longtime lease. DNAinfo reports that it will be replaced by Book Culture, the Morningside Heights-based bookstore familiar to the Columbia University community as well as book consumers from all over the city who have eschewed Amazon and Barnes & Noble in search of the increasingly rare charms and services of the independent book seller. It is not yet clear whether or not this is an additional store for the micro-chain or a relocation of one of its current locations, but it does represent a new neighborhood for the store —one that appears to have resigned itself to having just the one Barnes & Noble on Broadway as its main bookstore. The affluent enclave should, however be fertile ground for the store as an area most likely to offer a sufficient customer base which has yet to embrace the Kindle.

Book Culture will arrive under a bit of a cloud, however, having caused something of a stir uptown earlier this year when it dismissed five workers amidst the organization of a new union for the store. Picketing ensued which was unseemly for a store devoted to representing broad points of view in its offerings. Since then, the store's owners have promised to support the new union if it is recognized by the National Labor Relations board, and have dismissed the supervisors who "not willing to continue to perform the role of supervisors within the new environment of having the unionized work force." We shall see if the scandal follows Book Culture to its new location. No opening date has been announced for the new bookstore.

Book Culture Taking Over Olde Good Things Space on Columbus Avenue (DNAinfo)