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| All photos Laurel Marcus |
Last Friday I attended Fordham University’s Fashion Law Institute 5th Annual Symposium entitled “The Power of Fashion.” The event was held in Fordham’s stunning new space at 150 W. 62nd Street. As you may have guessed from the title, this year’s theme revolved around electricity, wearable tech, connectivity, power dressing, and even the bankruptcy session was entitled “Pulling the Plug.” Fittingly, the day ended with a reception and brief CuteCircuit Fashion Show. Professor Susan Scafidi, founder of FLI, accented her all black attire by matching the cover of the program with her red “electric” pumps. She also carried a beaded bag designed to look like a computer circuit board. At 9 a.m. she welcomed the audience of about 120 lawyers, including more men than last year, to “Boot up!” and then the first panel “Purchasing Power: Mergers & Acquisitions and Fashion Investment” began. Note to those who are not really interested in the business end of fashion: you may want to skip ahead to the third panel.
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| Gary Wassner, Yolanda Wardowski, Susan Scafidi |
Hopefully, without boring you to tears here’s a recap of what I learned about M & A: Fashion designers need capital to run their business. According to Gary Wassner of Hilldun Corporation and Interluxe Holdings, investors can come in during various growth periods; when a clothing line has reached certain financial levels. At the $5 million mark you are probably relying on friends and family, at $10M you are looking for individuals, $15-20M means “you have proven yourself. You’ve hit every major luxury store and should be expanding your product line to include accessories, shoes, home goods.” That is also the level at which Mr. Wassner might take an interest in your company however he prefers companies that don’t have multiple investors as it’s very difficult to buy everyone out. “Fashion schools don’t teach the business of fashion” chides Mr. Wassner but mentions that there is an effort by the CFDA to remedy that. Perhaps he’s alluding to the CFDA Fashion Fund helping out designers with cash and mentoring? IP (Intellectual Property which is made up of patent, copyright, trademark, or mark as lawyers call it, and trade secrets) is of the utmost importance. “Where is it and can it be moved globally? Who has liens on what?” he continued. Lastly he mentioned an interesting phenomenon: “In the history of American fashion there has not been a company that remained successful once the name designer has passed away.” He used Geoffrey Beene and Halston as examples and mentioned that only Oscar de la Renta planned for his successor. Wassner’s son Brien, the moderator for the panel of four, a lawyer for Jones Day adds that “Many private equity firms won’t even look at the fashion industry where a business relies so heavily on one individual.”
The second panel dealt with Fashion Companies, Dissolution and Bankruptcy. James Michael Peck of Morrison & Foerster told the story of Betsey Johnson who “came out fine after bankruptcy” as she had sold her IP two years before to Steve Madden who wiped out 48 million of her company’s debt. In case you’re interested in how a seemingly successful company like Betsey Johnson got into trouble, they had expanded a lot and in 2007 she had transferred the essence of her business to a public equity fund. In 2008 when the “world came to an end” in the stock market crash she was $50-60M in debt and needed to restructure or file bankruptcy which is where Steve Madden came in and bought the IP for significant value. In the case of the Syms/Filene’s Basement bankruptcy, Laura McCabe Brandt, a bankruptcy attorney at Brandt Law PLLC, determined that “all the value was in the real estate not the inventory” to which I said duh!” to myself. Jay Silverberg of the Silverberg Law Firm, LLC made a comment that bankruptcy is really “the new M & A” which the lawyers thought was hysterical. He also spoke of that all important IP again. “Twenty years ago we never looked at IP. Now we file on it. Selling IP to a distributor database has financial value and is part of the asset valuation” he said. While many fashion brands including Kenneth Cole (who is closing his stores and concentrating on shoes and e-commerce) are cutting back or going under, Coach’s decision to go big and buy Stuart Weitzman was termed “a Hail Mary pass” and “strange in this world” by Ms. Brandt.
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| A color coordinated panel (L to R) Susan Scafidi, Rachel Larris, Lyn Paolo, Jeffrey Banks, Vanessa Friedman, Carol Hochman |
The third panel “Power Dressing: Politics, Dress Codes, and the Public Eye” was where things got interesting. This panel consisted of no lawyers (!) including Jeffrey Banks, designer and author, Vanessa Friedman, fashion editor of The New York Times, Carol Hochman, RHH Capital and Consulting, Rachel Larris, Women’s Media Center and Lynn Paolo, Costume designer for “Scandal,” “Shameless” and “The West Wing.” This lively discussion had to do with women who run for political office being shamed or called out for any aspect of their appearance while the focus on men’s appearance is minimized. Professor Scafidi served as moderator and opened it up by asking everyone what they thought about the #AskHerMore campaign in which female celebrities on the red carpet are pushing back about being asked who they are wearing and primarily about their attire. “I think it’s hypocritical,” said Ms. Friedman. “If you’re being paid XX millions of dollars to wear a brand you should promote it and not say I don’t want to talk about it.”
Ms. Friedman also pointed out that she is an “equal opportunity clothing commenter” having written about David Cameron’s sartorial style (albeit when she was with the Financial Times). A more recent article on Alexis Tsipras, the Greek Prime Minister discussed his eschewing of the necktie. “I got hate mail for that article. People said ‘Why are you writing about his tie, not his politics. Well, for one thing, it’s my job. I’m the fashion writer. I’m not Tom Friedman. I’m Vanessa” she quipped. Ms. Friedman also mentioned that John Edwards’ hair once made the front page of the Times whereas Hillary Clinton’s has not. As far as Hillary’s pantsuits being grist for the fashion mill, Ms. Friedman said: “The best approach is to acknowledge it, own it, and move on. If you’re sensitive about it you give it power.” She mentioned that Ms. Clinton had done just that by making fun of her pantsuits and scrunchies in front of the CFDA. Both Ms. Friedman and Mr. Banks addressed President Obama’s khaki suit and Mr. Banks said the problem with it was the fit and that it looked too big.
Rachel Larris brought up heretofore little known Texas Senator Wendy Davis who, in June 2013 gave a pro-choice 13-hour filibuster. Larris believes that the AP’s call out of her “pink tennis shoes” in the headline undercut Davis’s message and hurt her in the public eye. “Is a guy in Texas going to vote for her when they call her Barbie in pink tennis shoes?” Larris asked. Finally Ms. Hochman gave the obvious answer, one that I was squirming in my seat to say which was that it had nothing to do with the pink tennies. “She could have been wearing a gunny sack and he wouldn’t have voted for her anyway” Hochman said. In contrast, Ms. Hochman believes that Ms. Davis “needed those pink sneakers. After all we wouldn’t have even heard about her filibuster if not for them.” Ms. Larris is representing a group called NameItChangeIt.org which seeks to educate the media to use “gender neutral coverage” to prevent “unconscious bias.”
As for what one should be wearing on a personal level, Ms. Paolo mentioned that she dresses herself for a role every morning factoring in where she is, what she’ll be doing, who she’ll be seeing and what is appropriate as well as comfortable. Everyone on the panel agreed that fit was of the utmost importance, showing some gravitas in power dressing while striving for “appropriateness.” They mentioned those who have bucked the trend such as Yahoo President Marissa Mayer who wears long floral dresses and cardigans which is about as far from the image of suited up power dressing as you can get, yet is still taken seriously.
After a “Power Lunch” of assorted salads and cold pasta it was back for “Power Centers: Battling Across Jurisdictions in World War IP.” If you’re still with me I’ve got good news! I went out like a light (how appropriate) upon hearing “IP is really the backbone of the fashion industry.” It was time for my after lunch power nap so my apologies to Vince Castiglione, VF Corporation, Pamela Echevarria, Fashion Law of Argentina Foundation, G. Roxanne Elings, Davis Wright Tremaine LLP, Michelle Marsh, Kenyon & Kenyone LLP, Donna Ruggiero, The Estee Lauder Companies and moderator Ewa Abrams, Tiffany & Co. BTW, I noticed the guy to my left also dozed off.
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| Coco Rocha, James Conran, Doreen Small, Wayne Sterling |
I was well rested for the next session entitled Connectivity: Modeling and the Power of Social Media which featured panel members Richard Cleland, Federal Trade Commission, James Conran, Artist and Business Manager, Melissa Wilhelmina Cooper, Wilhelmina Models, Chris Gay, Elite World Group, Coco Rocha, Supermodel and Social Media Pioneer, Wayne Sterling, The Image Management and Moderator Doreen Small, Marquart & Small. This session explained how models now need to have a “personality” via social media whereas before they had no voice. When Ms. Rocha started blogging “the industry hated it” she said. “Now even Karl Lagerfeld’s cat has one!” You go Choupette! She mentions that her 3 week old daughter Ioni is also on social media mainly because other people tried to register in her name. This strikes me as awful but somehow humorous as Mr. Conran, who is Coco’s husband, mentions the import of keeping an “authentic voice” meaning that they don’t employ anyone to handle Coco’s social media. “If someone is handling it at a PR firm it can become obvious if cross promoting starts to seep in.” Back in the day when Naomi Campbell began modeling, the client would want to see her book, her walk and check her face for spots. Now it’s all about how many Instagram followers you have. According to Mr. Sterling “the pace is set by Kris Jenner. If Kendall has 20 million Instagram followers and she gets a Vogue cover and if 10% of her followers buy her Vogue cover, that’s 2 million in sales. The ability to generate fame is a skill unto itself. You don’t need a talent” he adds.
Ms. Cooper adds that “the world is really changing and the public is selecting the models now. It’s not enough to be beautiful.” Mr. Gay mentions that clients are demanding a social media calendar. Models are “micro celebrities” and must “engage with the brand. It’s all about their ability to connect with their audience.” Their careers are based by how they move from brand to brand.” He mentioned his clients (models) often eclipse whatever magazine they’re in, in terms of desired demographics and curated content. “Everyone now wants to be a curator of content. It’s a very competitive distribution of influence. Mr. Cleland mentioned the idea of transparency and that models and companies must disclose that they are endorsing a brand for payment as well as bloggers incorporating the message that they received a particular product for free or are being paid to hype it. Mr. Cleland mentioned a Nordstrom Rack contest where $1,000 could be won for posting 5 pairs of shoes on Pinterest which should have contained a disclosure that those doing so were entered in a contest. Mr. Gay thinks that “We should all be IP lawyers. You have to be very careful…there’s a fine line between what’s acceptable and what’s not.”
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| CuteCircuit fashion show |
The last session before the fashion show was called “The Power of 2: Licensing and Wearable Technology” and focused on a Skype session from London with the “power couple” of CuteCircuit Francesca Rosella and Ryan Genz. Unfortunately, the Skype technology was less than perfect, intermittent and involved a lot of constant maintenance. In a nutshell, CuteCircuit introduced the ideas behind their collections to combine microelectronics and fashion. They spoke about several of their products including the Hugshirt which was awarded “Best Invention of the Year” by Time Magazine and enables you to give a friend across the miles the ability to feel hugged by you due to pressure points where you have squeezed the garment. Of course, Katy Perry put them on the map when she wore one of their color changing light-up dresses to the Met Gala however she mistakenly said the creators were from France when she was interviewed on the red carpet. Oops!
Monica Richman of Dentons gave a visual aid of the evolution of tech products starting with the “Get Smart” shoe phone which was humorous. She said that the Apple watch is fashionable because Anna Wintour gave it fashion status by placing it on a Chinese Vogue cover. Natasha Sardesai-Grant, senior director of Intellectual Property at Ralph Lauren as well as a technological genius with an engineering degree, talks a bit about the RL smart shirt and creating in-house wearables versus subcontracting them. I am convinced she is also a rocket scientist in her spare time. Speaking of technological advancements, Adam Clark Estes of Gizmodo who is working on a “shirt that doesn’t stink for Lululemon” was a bit skeptical of the Apple Watch. “I suppose dinner would be more enjoyable without phones on the table” he quipped. As for Google Glass and it’s collaboration with Diane von Furstenberg, will she be successful in making it less “geeky?” There are licensing issues as well as the problem of combining aesthetics and technology organically into something that people want to use or wear. Once again the question is raised of “Who owns the IP?” Someone brings up the fact that companies are buying companies just to get their patents. For some reason I think of Daimler Chrysler, knowing that Mercedes bought Jeep in order to steal their trade secrets.
It is now 5:30 p.m. (whew! I made it through) and finally time for the reception with blue “electric lemonade” that tastes like 7-Up, crudités and an excellent cheese platter. We adjourn to the room where lunch was previously, now laid out in a double aisle fashion show format. If you blinked, you missed it…after much fanfare the CuteCircuit fashion show is over in seconds. I say goodbye to some lawyers I’ve met and run out blinking into what’s left of daylight. All my circuits are fried and I think IP now stands for “I’m Perplexed”.
