Best Buy CEO Report: He Was Innappropiate

Best Buy CEO Brian Dunn Gets $6.6 Million Severance Package After 'Friendship' With 29-Year-Old Employee: Best Buy today released the results of a probe into former CEO Brian Dunn’s relationship with a 29-year-old female subordinate, and they are not too flattering.

The audit committee’s report says that Dunn, 51, “violated Company policy by engaging in an extremely close personal relationship with a female employee that negatively impacted the work environment.”

How close is “extremely close”? The former CEO and the younger employee went to lunch and drinks on multiple occasions during both the work week and on weekends. Dunn gave the female employee tickets to at least seven concerts and sporting events. And employees often saw them alone in Dunn’s office or company conference rooms.

“During one four-day and one five-day trip abroad during 2011, the CEO contacted the female employee by cell phone at least 224 times, including 33 phone calls, 149 text messages, and 42 picture or video messages. In one instance, several photographs were discovered on the CEO’s personal cell phone that contained messages expressing affection, one of which included the female employee’s initials,” the report states.
Let this be a warning to all CEOs - stay away from the help!

  SEE FULL REPORT HERE

 

Market Update: Retail Sector

Markets muddled by today, closing with minor losses after investors mostly shrugged off J.P. Morgan Chase & Co.'s surprise $2 billion trading loss and concerns about growth in the Chinese economy.

Stocks in general had a tough week as investors worried again about the stability of the euro zone following political upheaval in France and Greece.

But in Little Rock, things were looking brighter. Dillard's Inc., which posted a 23.9 percent gain in first-quarter profits late Thursday, saw its stock gain 6.4 percent to $70.43, the department store's best close ever.

The S&P Retail Index slipped 0.2 percent, or 1.52 points, to 625.64, as the Dow Jones Industrial Average dipped 0.3 percent, or 34.44 percent, to 12,820.60.

Also declining for the day were The Bon-Ton Stores Inc., down 6.2 percent to $4.87; Nordstrom Inc., down 4.8 percent to $50.96 after the retailer fell short of Wall Street's first-quarter earnings expectations; Avon Products Inc., 3.4 percent to $20.19 — which is still mulling over a bid from Coty, Inc., that is partially backed by Warren Buffett — and Elizabeth Arden Inc., 2.5 percent to $35.88.

The only European market that fell was the CAC 40 in Paris, following a projection this week by the Bank of France of zero growth for the first six months of the year.

The DAX in Frankfurt rose 1 percent to close at 6,579.93, followed by the FTSE 100, which was up 0.6 percent to 5,575.52. The FTSE MIB in Milan advanced 0.3 percent to 14,045.35.

Retail and luxury stocks were mostly up. Brunello Cucinelli rose 2.3 percent to close at 10.74 euros, following a 36 percent rise in net profits this week; Inditex was up 1.4 percent to 68.68 euros; Marks & Spencer Group advanced 3.5 percent to 3.60 pounds, and Yoox gained 3.4 percent to 10.50 euros.

Among the stocks that lost ground were Geox, which fell 3.6 percent to 1.93 euros following a 4.3 percent drop in first-quarter net profit, and Arcandor, which was down 3.6 percent to 0.03 euros.

The euro traded at $1.29 while the pound went for $1.61.

Source: WWD

The Shopper: Harlem, N.Y.

Whats are They Buying

Shopper #1: Elizabeth Espinal

Store: MAC

Location: 202 West 125th Street

 

Elizabeth Espinal, a freelance makeup artist, needed to refill her makeup kit for when she’s on the job. Citing MAC as her go-to brand, along with Nars and L’Oréal, the 26-year-old says she spends around $5,000 annually on beauty products. “I always need to replenish my kit, but I purchase for myself too,” says Espinal. Espinal relies on YouTube as her source for new products, tips and tricks. “I can’t stand a pushy salesperson,” she says. “When I need to learn about new products, I usually turn to YouTube. I understand the sales associates’ job is to sell, but if I tell someone I’m just looking and they come back to ask me again, it ruins the shopping experience.” Luckily, that wasn’t the experience today for Espinal, who has been a makeup artist for four years. Her favorite part of the job? “I love to see people’s reactions after I’ve given them a makeover.”

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Shopper #2: Adrienne Crudup

Store: Carol’s Daughter

Location: 24 West 125th Street

Adrienne Crudup, 47, used to trek from Queens to get her coveted products from Carol’s Daughter. Now that she lives in Harlem, the store is happily right at her doorstep. “I know of the new merchandise and the old and I’ve really grown to like the natural ingredients,” says Crudup. A preschool program director, Crudup says she spends about $1,000 annually on beauty purchases. “You have to switch up your products every six months,” says Crudup. “You also need to know how to shop for what works best for you.” The serene Carol’s Daughter in the epicenter of 125th Street is an ideal shopping experience for Crudup. “I don’t like overstock. I prefer organization. Also, I want to be acknowledged when I come into a store,” says Crudup, “and I felt that today.”

P&G to Move From Cincinnati to Asia

Although it's profits rose by 3% P&G, in a bold move loaded with symbolism, has decided to move the headquarters of its skin care, cosmetics and personal care business from Cincinnati to where its sees the future — Asia.

As one unintended consequence, the executive who originally recommended the relocation strategy, 49-year-old Gina Drosos, has decided to retire as group president of skin care, cosmetics and personal care, rather than uproot her teenage children by making the move east. Drosos, who will step down Sept. 1, will be succeeded by Deb Henretta, who is now based in Singapore as group president of P&G Asia and the specialty channel.

Stephen Colbert, Anna Wintour Talk Fashion

Is Anna Wintour running for Public Office?
“Is there ever a time when you cannot care about fashion?” Stephen Colbert asked Anna Wintour last night, during his show on Comedy Central. “Do you ever just say to yourself ‘to hell with this,’ put on your zebra-striped sweat pants and go to Long John Silver’s and just lose yourself in a pile of battered fried shrimp?”
“Well, I haven’t done it recently but maybe now you’ve suggest it I should try,” joked Wintour.

Colbert playfully suggested they could go bobbing for French fries. She didn’t blink, as the crowd was ooing and awing. “Why not? Why not. It’s a date,” she said.
 
Wintour appeared on “The Colbert Report,” to promote the Metropolitan Museum of Art’s new Costume Institute exhibition, “Schiaparelli and Prada: Impossible Conversations.”

After a few minutes of banter on whether fashion can be art, Colbert said, “Well, I don’t trust Prada. My understanding is the devil wears Prada. And this is a Christian nation madam!

“That movie was so last year,” Wintour said.

Colbert countered, “It was kind of five years ago.”

In Time For Mother's Day

The new digital platform for-stylish moms, Elizabethstreet.com, will make its official debut today, just in time for Mother’s Day. Appropriately, it will feature motherhood coach and star of Bravo’s “Pregnant in Heels” Rosie Pope in its latest installment of “Mom Essentials,” where she will share her expertise on juggling a successful career and motherhood, as well as new mom Ivanka Trump, who will be similarly featured on the site on May 11.
 

Amazon.com Is A Habit

Maria Renz - VP MyHabit.com (Center)

As Amazon.com Inc. continues its astronomical growth, some pundits predict that it could surpass Wal-Mart Stores Inc.’s revenues one day — but wonder how much of its future revolves around fashion. Can it be as disruptive to the fashion world as it has been to the world of books, music, DVDs and other products?

It is all another major sign the dot-com giant wants to embrace designers, become a bigger player in fashion and shed its reputation as the “Wal-Mart of the Web.”

According to sources, Amazon’s fledgling members-only flash-sale Web site, called MyHabit, may be on the verge of revealing some major brand and designer partnerships. MyHabit, celebrating a year in business this month, is still staffing up, and “sitelets” are believed to be on Amazon’s agenda. “With Amazon, who knows? Jeff Bezos strikes exclusive deals in other categories all the time,” said Lori Schafer, author and executive adviser of retail at the SAS Institute. “I wouldn’t put it past Amazon to do it with a few designers and see what happens.”

In February, MyHabit launched a designer tab alongside the others for the women’s, men’s, children’s and home categories. Thakoon, Valentino, Costume National, Balmain and Alejandro Ingelmo participated at up to 60 percent off, consistent with the other MyHabit sales. The Web site remains weighted to contemporary brands, rather than designer. Back in September, Julie Gilhart, former fashion director at Barneys New York, joined Amazon’s fashion group as a consultant to the Amazon Clothing Store, Endless and MyHabit sites. Amazon also owns Zappos and Shopbop, and sells clothing and accessories on the main Amazon site.

Another sign could come later this year, when the first Amazon brick-and-mortar store opens in Seattle, where the company is based. It will showcase technology, like Amazon’s own Kindle readers and Fire tablets, though there’s the possibility of testing other categories, like fashion.

Officials from MyHabit were unavailable for comment.

It’s not like Amazon is just waking up to the potential of apparel. Several years ago, Bezos met with Burt Tansky, former ceo of the Neiman Marcus Group, in the spirit of partnering. Bezos wanted to create a “black label” Web site for luxury fashion and wanted Bergdorf Goodman as the anchor. “There was some real dialogue on that,” said a source who was close to the situation. Nothing ever came out of the conversations, which some read as an indication of Amazon’s challenge —transcending its image as a site for everything under the sun and becoming a strong fashion destination.

Source: WWD