Style & the Street

And the Fashion Bailout...

It was inevitable... the Fashion Bailout.

Italy's fashion industry is asking its government for assistance, as the global crisis cuts into demand for designer clothes and accessories and the sector's first credit crunch casualty goes into special administration.

Luxury brands have not been spared by the global economic turmoil and the sector has been hit by growing evidence of restrained spending even among the mega-rich.

Last week, IT Holding, owner of fashion brand Gianfranco Ferre, requested special administration for its Ittierre unit that markets & distributes goods for brands like Versace and Cavalli. The government has since appointed administrators.

Turnover for Italy's fashion industry is expected to fall 5 percent this year to $79.58 billion, according to the fashion chamber.

Londoners getting thrifty

Though the unified European currency has gained momentum over the pound during the past six months, EU members have changed their spending habits, as well. The buyers at London Fashion Week said that they won't be as likely to go out on a limb with new designers now that the global economic downturn and credit crunch has hit the world of fashion.

 "I think we're just being more cautious about the way we spend our money," Coco Chom, a buyer for luxury British retailer Harvey Nichols, told Reuters dressed in a black fur coat, according to a Reuters article.

Business consultancy Bain & Co have said sales of luxury goods could drop as much as 7 percent worldwide in 2009.

Bloomberg Encourages Entrepreneurs -- Where are the Fashionistas?

Bloomberg Announces Economic Stimulus Initiatives for NYC, with Entrepreneurs at the Center of the Campaign

 By Joan R. Magee

 Mayor Bloomberg announced various initiatives today to help kickstart the slumping New York City economy. One such program is FastTrac, an entrepreneurial training program from the Ewing Marion Kauffman Foundation.

 Carl Schramm, Kaufmann Foundation president and CEO revealed a $1 million push to offer a program called FastTrac to those in New York who’ve been displaced by the financial crisis. The company’s new program will distill a typically six-week training program into two weeks.  For 15 years, nearly 300,000 budding entrepreneurs have worked with them.

 One such entrepreneur is Amanda Jones, who owns Brooklyn Fudge, a confectionary company that employed her grandmother’s fudge recipe to distinguish her from the pack. Jones said that she makes a couple thousand dollars in profits each month as the owner, and has leads to take her brand global. Jones said that the instructors at FastTrac have withstood recessions before, and will be able to impart knowledge and build esteem of beginner entrepreneurs.

 “My anticipation is that there’ll be a lot of ex-Wall Streeters,” says Schramm.  “Many have a substantial amount of knowledge, but need to learn how to start a business in the most basic sense.  A lot are clueless about how firms get started. If you had to price a product at Lehman, you had someone who handled that.”

 Consequently, FastTrac is offering those basic skills, and offers tutelage on the opportunities and pitfalls of running one’s own business, including those in the aching fashion industry. 

 This isn’t the first time they’ve worked with Wall Street in the wake of crisis or disaster.

 After September 11, the Kaufmann Foundation offered FastTrac for free to those affected by the World Trade Center attacks. Schramm said that six months after 9/11, the economy bounced back basically to normal, but anticipates this slump to last longer and force more people into business for themselves. It could also lead to a paradigm shift in the industry.

 “Fifteen years ago people said that it was the end of community banks, but now look at what’s happening,” says Schramm. “I think that we could easily go back to independent stock brokers linked by common markets rather than the giant brokerage firms.” 

Fallen Fashionista Dina Wein-Reis

The Trials and Tribulations of Former Fashionista & Fallen Society Woman Dina Wein-Reis

By Joan R. Magee

February 11, 2009

NEW YORK –  A woman charged with siphoning $80 million from charities now says the Feds are thieves after authorities seized artwork and luxury goods from her $35 million mansion in Manhattan. Dina Wein-Reis, a 44-year-old mother of three, is accused of courting Fortune 500 executives to convince them to sell her bargain basement priced products so she could then use of proceeds to help charities. Prosecutors maintain instead that Mrs. Wein-Reis sold the goods at on “the gray market” at inflated prices to garner an alleged $80 million for her shell companies.

In total, Mrs. Wein-Reis has $100 million in private assets, with $6.5 million in cash, according to a November 5 court document. She also owns seven homes, including a mansion at W. 75 Street and Riverside Drive, an apartment on W. 83 Street, a vacation home in Westhampton and a Florida condo, according to real estate records.

In late October 2008, Mrs. Wein-Reis and five others were indicted in Indiana on fraud charges. Though New York is where most of the alleged crimes happened, Indiana is the incorporation state for most of the companies with which she dealt. Mrs. Wein-Reis has pushed to have her trial in her home state of New York, and it is still being debated. 

She is currently being held on a $10 million bond and the value of three of her homes. 

In late January 2009, Mrs. Wein-Reis filed a motion through her lawyer, John Meringolo, contending that her voluminous art collection was “improperly seized,” from her Riverside Drive mansion as part of the federal investigation. Her collection includes Robert Motherwells, Frank Stellas, Egon Schieles, and an original portrait of Truman Capote done by Andy Warhol. She also asked that 27 of her bank accounts be unfrozen. In addition, she requested the return of her Montblancs, a Rolex collection, necklaces, bracelets, earrings and cufflinks from Tiffany, Cartier and Chopard, as well as her wedding and engagement rings.

In court documents, Wein-Reis asserted that the warrant to confiscate those items only held for things purchased through her alleged chicanery. She contended however that not all the items were directly linked to her business dealings.

“Those pieces of art alone would be worth close to $30 million,” Janet Myers, a private art dealer in New York said. “It’s typical to have art collections seized if criminal activity is suspected. I’ve had clients, whom I’m not at liberty to name, who have either had threats of that happening or had it happen.”

Meanwhile, over 20 character witnesses have been summoned to her trial, according to court documents. Whitney Museum Curator Barbara Haskell, for example, went on the record to defend her.

 "I have always regarded Dina as a person who cared about others," Ms. Haskell wrote in a letter to New York federal judge Shira Scheindlin. "She certainly has cared about me. I am prepared to stand as a character witness should it be helpful to her.”

Mrs. Wein-Reis has made public statements that she’s endured panic attacks due to this federal investigation.

According to court documents, David Reis, her husband wrote to Judge Scheindlin: “Our three boys, Joshua, 18, Jacob 14, and Joseph, 8, are falling apart by the day. Dina is a great woman… She has helped the sick, needy and less fortunate."

Needless to say, Fortune 500 executives and prosecutors beg to differ.

At present, 50 companies have filed suit against Ms. Wein-Reis and her five other alleged accessories. One of strongest cases against Mrs. Wein-Reis comes from Roche Diagnostics Corp. of Indianapolis. In a lawsuit filed by Roche, the company alleged that “…firms owned by Wein-Reis fraudulently arranged to buy nearly $12 million worth of diabetes care products at a steep discount.”

Mrs. Wein-Reis instead apparently attempted to sell the essentially donated products to stores like Walgreens, which then informed Roche of the botched sale. Roche asked for $10 million in compensatory and $30 million in punitive damages. According to court documents, the parties settled privately and for an undisclosed amount of money, but that investigation was the tip of the iceberg. Some of the other companies include Balance Bar, Bausch & Lomb, Campbell's, Bic, Eastman Kodak, Gillette, Kraft, Nestle, Sara Lee, Unilever, among others.

 If convicted, Mrs. Wein-Reis could serve up to 17 years in jail. 

Lifestyle Tech Trend

Obamicon ME!

You may not know it by name, but Obamicon.ME is hard to miss if you're on Facebook, Twitter, or part of any other social networking group. The site, run by Paste magazine, allows users to emulate Shepard Fairey's multi-hued Barack Obama HOPE portrait from the presidential campaign, and individualized portraits are now everywhere.

According to Paste's publisher, the site has garnered seven million page views since it launched on January 7 with more than one million unique visitors and 200,000 registered users. Its Facebook application alone has 32,000 users and it's becoming more viral every day.

"Clearly, the president has achieved a level of celebrity that is rare in politics and that has resulted in coattails that extend to commerce," says Tim Regan-Porter, president of Paste. "Part of that is his blend of intelligence, oratorical skills and likability. Part of it is a national need to move beyond the economic and political malaise we find ourselves in."

Paste publisher Nick Purdy, who launched the Obamicon.ME site to capture the inaugural hype and connect those who couldn't make it to D.C., says people have been very comfortable expressing their views with it. "Obamicon.ME offered a way to be a part of all the hullabaloo," he says.

In fact, Jake Tapper of ABC News used it recently to make a comment on the president's violation of his much-touted "no lobbyists" policy by creating an image of Obama's nominee to be deputy Defense Secretary, former Raytheon lobbyist William Lynn:

"I'm sure we'll be seeing lots of Kurt Warner and Ben Roethlisberger Obamicons this week as we approach the Super Bowl," says Purdy.

The inauguration was its highest traffic day, with elevated traffic days following the inauguration. It has slowed somewhat as the afterglow faded.

The artwork itself and the copy-cat hype is reminiscent of Andy Warhol's famous Marilyn Monroe and Jackie O. portraits, in that it's an up-close facial rendering shaded in by non-traditional, almost slapdash colors and shadowing. 

by Joan R. Magee

http://www.portfolio.com/views/blogs/daily-brief/2009/01/28/obamicon-me

UNFPA Funded by the U.S. Again -- Fashion to Take Note

The Endless Repercussions of a New Administration: U.N. Agency Refunded After 8 Years of Shunning by the U.S., Fashion World To Take Notice

After eight years of non-funding by the Bush Administration, President Obama will refund the U.N. Population (UNFPA). The UNFPA is an international development agency that promotes reproductive and sexual health in some of the world’s poorest countries.

Over the past seven years, the U.S. Administration suspended Congressionally sanctioned funding for UNFPA. That translated to a loss of $244 million in U.S. funding. 

 "By resuming funding to UNFPA, the U.S. will be joining 180 other donor nations working collaboratively to reduce poverty, improve the health of women and children, prevent HIV/AIDS and provide family planning assistance to women in 154 countries,” says President Obama.

 Between 1990 and 2005, pregnancy and childbirth related deaths dropped a mere one percent. Every minute a women loses her life giving life, adding up to 10 million women over a generation, according to UNFPA. Statistically, 99 percent of these deaths occur in developing countries, with the bulk in Africa and Asia. Access to voluntary family planning is one of the ways UNFPA works to prevent unintended pregnancies and reduce abortions.

 "If women are to stop dying in childbirth and if reproductive health for all is to become a reality, we need increased political and financial commitment at all levels to implement strategies that we know will work,” says UNFPA Director Thoraya Obaid.

This move by Obama coincides with his resistance against the isolationist diplomatic policies of prior years and relentless rhetorical message of “change.” Many fashion houses are lining up to help with various reproductive health initiatives in lesser developed parts of the world. 

 By Joan R. Magee