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CNN Business Unusual

Industry Veteran Breathes New Life Into Old Business; Tinseltown Gets a Facelift; Why World War II Remains a Hot Topic

Aired September 09, 2001 - 02:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SUSAN LISOVICZ, HOST: Ahead on BUSINESS UNUSUAL what's old is new again, an industry veteran breathes new life into a faded brand, Tinsletown gets a face lift and why after more than half a century World War II is still a hot topic. That's all ahead on BUSINESS UNUSUAL.

Hello and welcome to BUSINESS UNUSUAL, I'm Susan Lisovicz. The name Burberry Burberry has long been associated with high end men's wear but today the British-born brand has found new popularity with a new demographic. But these customers haven't always been so mad about the plaid, in fact, the Burberry Burberry brand languished in recent years and its future was uncertain until one fashion veteran and turnaround specialist stepped in.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP, "DICK TRACY")

WARREN BEATTY, ACTOR: Hey, tough guy, do you want to try that on somebody your own size?

(END VIDEO CLIP)

LISOVICZ (voice-over): Dick Tracy, World War I soldiers and Inspector Cluso. They all wear them -- Burberry Burberry trench coats. Initially designed to protect British soldiers in the trenches of Europe Burberry Burberry has been a prestigious men's brand for over 150 years. But by 1997 sales were in a slump and the company desperately needed a piece of the women's wear market.

Enter former Sachs President Rose Marie Bravo.

You came to Burberry Burberry's in 1997 and would it be fair to say that the brand and the company was something of a mess?

ROSE MARIE BRAVO, CEO, BURBERRY BURBERRY: I would say that the brand was tired and had some issues from a marketing niche point of view and from a distribution point of view.

LISOVICZ: Not exactly what you wanted for what you consider and what many other people consider a luxury brand?

BRAVO: Yes. Well, the challenge and the excitement was -- well, when I got involved with the Drake Universal Stores who own Burberry and I got into the concept I realized that they had a wealth of heritage and history that we thought we could really milk.

UNIDENTIFIED FEMALE: And, of course, we've changed the Hollywood sign to the Burberry Burberry sign.

LISOVICZ: Known in the fashion industry as a turnaround specialist Bravo was brought to Burberry to lure new customers while maintaining the brand's luxury status. Since she's taken over 60 new stores have popped up across the globe and last year's sales increased by 85 percent. But Bravo admits that starting out she had her doubts. Even her parents were skeptical when she decided to leave her prestigious post at Sachs Fifth Avenue.

Is it true that your parents actually came to London and asked?

BRAVO: My parents were very wary about it. And, of course, they loved the Sachs Fifth Avenue association. And so when they came to visit me I was then in Hackney, which is really not a very attractive suburb of London proper. And when they came to my office they just looked at me and said, "You left Fifth Avenue for this?"

So they really thought maybe I had -- I had lost it.

LISOVICZ: As CEO, Bravo's first point of attack was recreating the brand's name. Literally by dropping the "S" she christened the company Burberry Burberry. Next came a daring ad campaign and the item, which put Burberry Burberry back on the fashion map -- the plaid bikini.

BRAVO: We had this idea of how to make Burberry Burberry current, how to make it so that people would want it, how to make it desirable again. We worked with we think the best because we worked with a marketing group headed by Fabien Baron and David Littman, Mario Justino.

FABIEN BARON, BARON & BARON: The big challenges were the clothes. I mean, like what Burberry Burberry's stands for a couple of years ago was basically a trench coat and plaid. And that was it. So how to turn that around in terms of item we had to create key icons. I mean, like I remember the double page of Kate Moss laying down basically naked under a raincoat.

LISOVICZ: With sexy imagery and a good sense of British wit Bravo has branched out to lingerie, denim, even a dog collection. Her most recent pride and joy -- the Burberry Burberry baby line.

You said that Cella Tennant was one of the inspirations for Baby Burberry but I think your grandchild also was one.

BRAVO: Yes, yes. Grace Caroline for sure was an inspiration and she's been a delight. And I make sure every trip that we do come back. My husband and I spend time with the family. It's an important part of who I am and something that I'm very proud of and I cherish.

We did some that our new designer did -- Rory. This is beautiful. I think it's beautiful.

UNIDENTIFIED FEMALE: This is really chic.

BRAVO: Don't you think?

LISOVICZ: Under Bravo's command Burberry Burberry has developed eight new product lines. To date their most reliable earner like most luxury brands is women's accessories.

ED NARDOZZA, EDITOR IN CHIEF, WWD: Women's and accessories have proved to be the hottest and fastest growing part of the business. We're expanding into new product categories. It's your basic fashion brand extension if they're going to stick to their schedule -- their IPO schedule, which is to go public by March -- I believe it's March 2002 they need the growth and they need the momentum.

LISOVICZ: There's been a lot of talk about that Burberry Burberry IPO but we're not hearing much. It was postponed, nobody knows when it's going to happen. What can you tell us about that?

BRAVO: Well, I can tell you what our parent company statement has been, which is as of June 2001 in our results meeting where they stated the IPO was still on track, planned to be happening within the next 12 months if market conditions prevail.

LISOVICZ: Timing is everything. Is there any sense that you guys could have jumped on it during, as you call it, logo mania when you were riding that crest?

BRAVO: You know, you have to have a certain infrastructure, you have to have a certain team in place. If you had been out there and then you hit a slow down that could have been more negative effect. And, you know, I'm more focused on how to keep this whole momentum going.

LISOVICZ: The fashion IPO environment has cooled off since the mid 90s when Donna Karan, Gucci and Ralph Lauren went public but the outlook for Burberry Burberry is not necessarily negative.

NARDOZZA: Fashion can be very fickle and it can bite you when you're not looking. So you have to be distinctive. You also need a core business to fall back on and that's one of the strengths of Burberry's.

LISOVICZ: IPO or not, Bravo's on track. She's brought Burberry Burberry to the fashion forefront while catching the eye of high- powered department store buyers like Neiman Marcus' Joan Kaner.

JOAN KANER, FASHION DIRECTOR, NIEMAN MARCUS: At this point in time we'd be foolish not to carry Burberry Burberry. As I say, it's most desirable and it has become a fashion icon and people want it. They want something in the Burberry pattern.

BRAVO: Do you two know each other? Do you know Michelle Duveaux?

UNIDENTIFIED FEMALE: Yes.

BRAVO: Of course.

LISOVICZ: A fashion icon on both sides of the Atlantic Bravo like Burberry has joined the jet set.

Talk to me about your own lifestyle. You're commuting frequently between London and New York. How do you like that?

BRAVO: Well, I'm blessed with a good I guess energy level. You sort of learn to live with a jet lag -- a permanent jet lag I call it. And eventually I guess it just disappears and you just -- you just -- it's just part of your life. And, you know, you try to be as organized as you can and try to simplify things. You find that what you really need in end is a very -- a few good black dresses and having a comfortable pair of shoes in each closet.

LISOVICZ: And with that in mind Bravo soldiers her way through the trenches of the fashion world.

(END VIDEOTAPE)

LISOVICZ: Well, Bravo and the Burberry Burberry brand aren't just battling for market share these days but for charity as well. A special edition Burberry Burberry scarf will hit the shelves for the month of October in support of fashion target breast cancer. The limited edition scarf will be sold in Burberry Burberry and Sachs Fifth Avenue stores in the U.S. and as well in its London flagship store.

Thirty percent of the retail sales will be donated to breast cancer charities throughout the U.S.

And coming up next on BUSINESS UNUSUAL a facelift for a famed neighborhood. And aging Hollywood is getting a makeover. We'll take a look when we return.

(COMMERCIAL BREAK)

LISOVICZ: Hollywood Boulevard -- in it's Hay Day it was the center of everything in Tinsletown from Mann's Chinese Theater to the Egyptians to the El Capitan the famed street wound through the heart of Hollywood. But in a city where looking young is everything Hollywood's landmarks have started to show their age. And now the effort to rejuvenate the once vibrant tourist spot is underway. It's the five-year-old Hollywood revitalization project -- $1 1/2 billion in development projects are in the pipeline or underway. Walter Tannon takes a look at this high priced face-lift.

(BEGIN VIDEOTAPE)

WALTER TANNON, CNN CORRESPONDENT (voice-over): Hollywood, which for decades has looked like a faded and frazzled starlet is getting a $1.5 billion facelift in cement and steel. On a driving tour the president of Hollywood's Chamber of Commerce explained how Tinsletown is changing. LERON GUBLER, PRESIDENT AND CEO, HOLLYWOOD CHAMBER OF COMMERCE: Hollywood in the '20s and '30s was the place in America where they were experimenting. They were trying to create this larger than life community.

TANNON: Now the business community is tinkering with big plans again. The centerpiece of the revitalization efforts is the 640,000 square foot Hollywood and Highland project. It will include shops, a ballroom, the Debbie Reynolds Museum and the Kodak Theater -- the future site of the Academy Awards.

LEE WAGMAN, TRIZECHAHN DEVELOPMENT CORP.: Hollywood as a brand that as it stands for the people's concept of the entertainment business is known literally around the world. And to most people it connotes a place that didn't physically exist for the last couple of generations. And our idea was to rebuild off of that idea a physical place that delivered on the promise that people have of Hollywood.

TANNON: With an estimated $650 million investment in the project, Trizechahn is making a big bet on Hollywood's overhaul.

WAGMAN: Real Estate development is always a bit of a gamble. We felt we understood the neighborhood. We felt that the city was very much behind us. And we felt that people thirst in Los Angeles for a place like Times Square that they can call the symbolic heart of the city.

And Hollywood and Highland comes as close to delivering that as anywhere.

TANNON: Almost 80 percent of the buildings on Hollywood Boulevard built in the 1920s and '30s still stand today including the Pantages Theater. Impresario James Nederlander spent $10 million reworking the former site of the Academy Awards.

JAMES NEDERLANDER, OWNER AND PRESIDENT NEDERLANDER ORG.: It's a beautiful theater. I mean, you just couldn't afford to build it. It would take you $200 -- $300 million to build this today.

TANNON: Nederlander added more than 80,000 square feet of gold, silver and bronze leaf to the Pantages and 78 chandeliers. And now it hosts Disney's "The Lion King."

But Hollywood, for all of its re-found glamour, is still pockmarked with wig shops, strip clubs and tattoo parlors.

GUBLER: Well, we're going to see a change, it's not going to happen overnight but over the next two to three years you're going to see a major upgrading in tenants.

TANNON: The talk is on this block -- Borders Books, Bed Bath & Beyond will both set up shop.

GUBLER: The story of Hollywood is really the story of America. It's the story of people striving for dreams. And this is the dream factory where the dreams were made and it's nice to see that the dreams that the local people have had for years is finally going to happen -- that Hollywood's going to come back a perhaps a second golden era.

TANNON: For BUSINESS UNUSUAL, I'm Walter Tannon, CNN, Hollywood.

(END VIDEOTAPE)

LISOVICZ: Well, the bandages are starting to come off in Hollywood. The 640,000 square foot Hollywood and Highland project is set to open on November 8. Still to come on BUSINESS UNUSUAL -- our fascination with World War II. On the screen, on the stage and, of course, in print the war is still a hot topic. What we can learn from this trend when we return.

(COMMERCIAL BREAK)

LISOVICZ: World War II still remains one of the hottest topics in books and film. So why are we fascinated by the war more than 50 years after the fact? Vince Farrell is Chairman of Victory SBSF Capital Management, a regular CNN FINANCIAL NEWS guest and a connoisseur of World War II literature. He joins me with his World War II book picks and his take on this trend. Welcome.

VINCE FARRELL, CHAIRMAN, SBSF VICTORY CAPITAL MANAGEMENT: Thanks, Susan.

LISOVICZ: And this is something that's far more meaningful to you I would imagine than your day to day job stock picking. I mean, to think about really the -- what happened and the ramifications of World War II.

FARRELL: I think if you study any history really that it puts the present day in much better perspective. You know, one of the books that we're going to look at is "Flag of our Fathers" by James Bradley. It's about his dad's situation. He was one of the guys that raised the flag on Iwojima. The very first line in the book is, "The only thing new in the world is the history you don't know," attributed to Harry Truman. Now if we'd remembered that during the dot-com stuff -- that this has happened before and if we think it hasn't, this is brand new, it's just because we don't know the history of this.

So I really do believe by studying history you put the present into much better perspective and you can deal with it a lot better.

LISOVICZ: Well, and this particular story is very poignant because it's written by the son of one of the six men who raised the flag on Iwojima. The son did not know it until after his father passed away.

FARRELL: Well, actually the son knew that his dad had been one of the flag raisers. What the son and his mother did not know is that his dad had been award the Navy Cross for unrelated action, which is second only to the Medal of Honor.

But when his dad died they were looking through some boxes and they found, "My God. He won the Navy Cross." And they couldn't believe that he had never said anything about it at all. But as Brokaw's book, "The Greatest Generation," points out so effectively, this is a generation of unbelievable modesty and achievement. They just didn't talk about these things. They did what was required -- they went back to their lives.

LISOVICZ: And I have to say that I know from personal experience, my uncle Lenny Lisovicz was part of the D-Day Invasion, won the Silver Star, the Purple Heart. My father has the distinguished Flying Cross. These were people who were active members of the community and never really brag in this day and age when everybody seems to be clamoring for their 15 minutes of fame. These are people from a different generation.

FARRELL: Well, it is -- it is a different generation. It's a different time. I really do believe it's a different cut. It's good for us to emulate these guys because they went and did what was necessary and they came back and they rebuilt their lives and they rebuilt society. And they just kept going forward unlike -- and I'm very critical here -- the dot-comers that weren't going to build anything. They were going to create and sell and move on. And then it all blew up because unless you -- I really think unless you go with the idea that I'm going to create something of lasting value, the chances of getting away with that on the short term are really very slim.

LISOVICZ: There's another book that's part of your recommended reading list and that is "Goodbye Darkness." And this was written by someone who actually participated.

FARRELL: Yeah, by William Manchester. And this was written 20 years ago. And Manchester unfortunately has recently suffered a stroke. He had just finished two volumes -- just over the past few years on Churchill and was going to do the third. Unfortunately he can't finish it. He was also wrote a book called "American Seizure," which is about McArthur -- all great.

But "Goodbye Darkness" is his experience in the South Pacific, which is where my dad served during World War II -- in the South Pacific. And maybe that's what sparked my interest originally so many years ago.

But Manchester, after Robert Kennedy was assassinated, found himself with the same recurring nightmare. And the nightmare was an old man was meeting a young battle-scared Marine on a -- on a hill and he couldn't figure out what it was. But he finally realized he was the old man and the young man. And the young man was him as a young soldier coming up to the older man saying, "How could you have let our sacrifice be in vain to let society go so crazy," Robert Kennedy was dead, John Kennedy had been killed.

So he went back and revisited all the battle fields of the South Pacific to try and figure out why they did what they did and why it became what it has become. And the theme through all of these books is that you did it for your buddies, you did it because you were called upon to do it. You were not a hero -- as Bradley has said so many times about his dad. His dad kept saying, "I don't talk about the war. I'm not a hero. The heroes are the guys that didn't come back."

But I think it's very tough for this generation to square what they did with some of the things that our society will occasionally go through. And I think it's so wonderful that we have this slate of books.

You know, the other series -- anything written by Ambrose -- Steven Ambrose is worth reading. And HBO is coming out with a new series called "Band of Brothers." Well, "Band of Brothers" -- that actually is a quote from Shakespeare. Henry V, which goes back hundreds of years, "We few, we happy few, we band of brothers. He who sheds his blood for me today shall be my brother."

Admiration of the people that have allowed us our wonderful society has been true for centuries and I think it's now just appropriate that we're getting around to honor these guys.

LISOVICZ: And it's very nice to have you with us to talk about it because these are, as many would say, the greatest generation. Vince Farrell, it's always good to see you.

FARRELL: Thank you, Susan.

LISOVICZ: Thanks for joining us.

Coming up next on BUSINESS UNUSUAL -- the unusual beginnings of a denim dynasty when we return.

(COMMERCIAL BREAK)

ANNOUNCER: We're interested in your comments and story ideas. E-mail us at BUSINESSUNUSAL@CNNFN.com.

LISOVICZ: And finally Fashion Week is in full swing here in New York City. So while the industry is looking ahead to the styles of next season we take a look back to the beginning of one of the oldest names in the business. Myron Kandel takes a look at Levi Strauss.

(BEGIN VIDEOTAPE)

MYRON KANDEL, CNN FINANCIAL EDITOR (voice-over): Levi Strauss, a Bavarian immigrant, left his family's business in New York City for San Francisco in 1853. Levi, only 24 years old, saw the California Gold Rush as an ideal business opportunity. But instead of catching the gold bug his idea was to sell dry goods to the flood of gold miners hoping to strike it rich.

His business quickly flourished and then a tailor named Jacob Davis came up with the idea of placing copper rivets on denim pants to strengthen the material. But he lacked the $68 he needed to patent his invention.

Davis enlisted his cloth supplier, Levi Strauss & Company, to finance the patent. In 1873 the men became business partners and later on in life became wealthier than they could imagine. The reinforced denim pants then called braced overalls were an instant success. These denim pants were not referred to as blue jeans until the 1960s when the terms was coined by the Baby Boom Generation.

Levi Strauss & Company went public in 1971 to finance further growth only to return to privatization in 1985 when the publicly held shares were repurchased in one of the biggest leveraged buyout transactions in U.S. history.

In 1996 the company went one step farther by purchasing employee- held shares as well.

Today Levi Strauss & Company is controlled primarily by the Haus family, descendants of the original Levi Strauss. In fact, Bob Haus, the current chairman is the great-great-grand-nephew of Levi.

So nearly 150 years later after it's unusual beginnings, Levi Strauss & Company is one of the largest mom and pop operations in U.S. business history.

(END VIDEOTAPE)

LISOVICZ: And that's BUSINESS UNUSUAL. If you missed any of today's program you can catch it on the Web. Just go to CNNFN.com/BUSINESSUNUSUAL. And be sure to tune into our daily edition each weeknight at 7:00 p.m. Eastern Time on CNNFN. I'm Susan Lisovicz -- thanks for joining us. Goodbye from New York.

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