The Business

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Yesterday, we schooled you (or told you stuff you already knew depending on how well-versed you are on the subject) on why there are so many fashion tech startups lately and how they’re all getting millions of dollars thrown at them. Many of those startups that launched in 2009 and 2010 and even 2011 are [...]

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Last year saw a major influx of new fashion-focused tech startups. With the early success of pioneers like Gilt Groupe and Ideeli, an industry that has typically been slow to embrace new technology has spawned a burgeoning community of game-changing ecommerce sites, mobile apps and social networking and discovery platforms. And with no shortage of new ideas or interest from financial backers, this influx shows no signs of slowing down in 2012–and we think that’s very exciting.

With new start-ups popping up almost daily, we set out to discover which ones are doing it right, how they’re all being funded, and what 2012 holds for the fashion tech biz.

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Despite the overwhelming buzz of the Versace for H&M collection, the fast fashion retailer is reporting a 15.3 percent dip in profits over a full-year period, according to WWD.

Karl-Johan Persson, H&M‘s chief executive, cited rising costs, the negative impact of currency fluctuations, and “a tough retail environment,” as reasons for the company’s decrease in profits this year. “The situation in the sourcing markets has also been challenging,” he said. “Cost inflation has been high resulting in increased purchasing costs for the fashion retail industry.”

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BARNEYS NEW YORK fetes the launch of THE ROW handbag collection hosted by designers ASHLEY OLSEN and MARY-KATE OLSEN

Mary Kate and Ashley Olsen have added a new and important person to their team at The Row. François Kress, currently President and CEO at Prada USA Corp, has been named President and Chief Operating Officer at the growing fashion brand, WWD reports.

It’s a pivotal development for The Row–the position is newly created–and places them among other designer labels who are poised to grow into bigger luxury brands. And Kress is likely a perfect choice to bring The Row to the next level.

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Last week, fashion PR power house KCD listed a digital coordinator job on our careers page and we thought, ‘Hmm…is KCD beefing up their digital side?’ Indeed they are–and the ground-breaking fashion show platform they’re launching might revolutionize the way fashion is seen (or at least make our lives easier).

The company, who were quick to embrace digital (a rarity in the digi-phobic fashion industry), are introducing Digital Fashion Shows, a platform to deliver online-only fashion shows to buyers and members of the press, which will launch during New York Fashion Week with Prabal Gurung’s inaugural lCB collection for Onward Kashiyama on Febuary 15. It’s an ambitious project and offers way more than just a show livestream.

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The fashion week scheduling nightmare appears to finally be over, at least for now. September 2012 dates for New York and London have just been confirmed, officially, and both cities have agreed to move their dates earlier. New York Fashion Week will take place September 6-13 and London will follow from 14-18, according to a press release the CFDA and the BFC sent out this morning. WWD reports that Milan’s Fashion Shows will take place September 18 through 25 and Paris September 25 through October 2.

The news comes following more than three months of back and forth between the four fashion capitals after Milan set their September show dates to conflict directly with New York and London and then couldn’t be reasoned with, digging its heels further into the ground as the months wore on. The agreement they seem to have reached is the same one New York and London proposed back in November (which DVF referred to as “biting the bullet”). So then why has it taken this long to confirm?

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Photo via MTV.com

The founders of Crocs shoes may not have a designed something that even comes close to being aesthetically pleasing (In fact, the Croc was developed as a “spa shoe.”), but have become wildly successful in spite of that. The company announced yesterday that full-year revenue will surpass the $1 billion mark for the first time. Yes, Crocs are increasing in popularity.

The shoes that make many of us cringe on-sight have withstood a lot–constant ridicule, a hate website and a few dips in stock, including a pretty big one in 2007. But the company seems to have have put all of that behind them and are somehow inspiring people to run to the mall and buy their odd-looking hole-filled slip-ons. In addition to, and largely because of, this revenue milestone; the firm’s shares went up 6.3 percent, Footwear News reports.

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Felicity Huffman with Glen Senk. Photo: Getty

If 2011 was hard on Urban Outfitters, what with the Navajo-undies-lawsuit and falling stock price, then 2012 is shaping up to be an even bigger challenge: Yesterday, it was announced that the retailer’s CEO Glen Senk had resigned, reports WWD.

It’s a huge blow for the retailer, who was already losing investors’ confidence fast in 2011. Senk is very well-respected in the industry, and is credited with much of Urban’s success from 2008 on, and his sudden departure from the company does not bode well for Urban’s future–nor it’s stock price: When news broke about his resignation yesterday, Urban’s stock fell $4.15, or 14.1 percent, to $25.26.

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Photo: Getty

Watch out, America. Dov Charney is taking a road trip. He’s traveling through the South as we speak, and is obviously trying to convince everyone that American Apparel is staging a comeback/recovery. He’s been in the media a bit lately–like that extended interview he did with Flaunt, telling the indie mag that American Apparel was going to make $20 million in earnings before interest, and was on track to double that in 2012.

WWD caught up with Charney in Texas, where he told the trade, “We’re getting our groove back a bit.” But are they? Let’s review the company’s recent financial history.

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Albert Kodagolian for Flaunt

One of the biggest fashion topics of discussion this year (and the past few years) was American Apparel and its controversy-laden founder and CEO Dov Charney. Since January, Dov and his company have been through a lot. On the controversy end, they’ve showed pubes and boobs in their steadfastly NSFW ad campaigns, faced several very public sexual harassment accusations, held a plus-size modeling competition with a messy outcome and lost an employee to an industrial knitting machine, to name a few of the stories we can recall. In terms of business, they’ve come within inches of bankruptcy, received a $15 million cash injection from a group of Canadian investors, and announced a few efforts to get back on track like launching denim, selling through eBay and Bloomingdale’s and offering third-party merchandise.

While we’ve all heard about AA’s downtown L.A. factory, great wages, and vertically integrated business model, we’re still left with questions about why they’ve struggled so much and what really goes on inside that company–many of which are finally answered in an in-depth piece in the latest issue of fashion glossy Flaunt. Matthew Bedard visited Charney both in Toronto for a company event and AA’s L.A. digs and sheds a light on the company’s most prevalent issues, including the sexual harassment allegations, financial problems and new plans, manufacturing in the U.S. and more. Click through for the most interesting things we learned (and the most incendiary things Charney said).

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A recent government crackdown is shaking London’s fashion industry. The UK’s HMRC (Her Majesty’s Revenue and Customs, a dept. of the UK government responsible for collecting taxes) has reportedly sent letters to 102 fashion houses warning them that they are under scrutiny and urging them to pay their interns the minimum wage or face penalties.

Of course, unpaid fashion internships happen, and their legality is debated here in the states as well. In fact, the phrase “unpaid fashion internship” sounds a bit redundant in my mind because you’d be hard-pressed to find a fashion internship that wasn’t unpaid. It’s a tricky situation that lacks an obvious solution.

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Things aren’t looking good at the house of Emmanuel Ungaro. In fact, they haven’t for a while. Just three months after Giles Deacon left his roughly year-long tenure as creative director, WWD is reporting that the company’s new CEO, Jeffry Aronsson, is leaving, as well as much of the house’s advisory committee.

Aronsson has only been with the company since June and was brought in with the hopes of turning the failing company around, as he is considered to be a “turnaround expert,” based on successful CEO positions at Donna Karan International, Marc Jacobs International and Oscar de la Renta previously.

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