• Olivier Moingeon

W02 - L'Oreal, Baccarat, Sephora, Dior, Poshmark, Nordstrom..

1. It was a busy week on the IPO side. First of all, Poshmark made its market debut on the Nasdaq and its shares skyrocketed by 141% in the first day of trading, bringing the company’s valuation to more than $6b dollars. Poshmark is a second hand marketplace which was founded in 2011. It shows the appetite for the resale market and we can also note that one of Poshmarks’ competitors, Threadup, which is a virtual thrift shop, filed confidentially to go public next year.

Another big win happened this week for the buy now pay later company Affirm, which also listed on the Nasdaq and saw its share doubled in their market debut and the company’s market cap is now $13b.

In terms of future IPOs,, MyTheresa and Dr Martens both announced their intentions to go public in 2021. MyTheresa plans on listing at the NY stock exchange and to raise 280m for a $1.5b valuation. The proceeds will be used to repay the debt of its parent company, Neiman Marcus. Regarding Dr. Martens, it is currently owned by Private Equity investor Permira, and they plan on selling 25% of their ownership in a public offering on the London Stock Exchange. The brand’s valuation could reach $4b in the process.

2. There has been some interesting news on the investment side. First of all, the french perfumer Juliette Has a Gun sold minority stakes to Cathay Capital. Founded in 2006 by Romano Ricci, the grand-son of Nina Ricci, the brand will use this cash injection to expand internationally, especially in China.

Then, Baccarat has new owners, after its parent company was acquired by Tor Investment Management, which is a group of funds based in Hong Kong. Baccarat has been struggling and poorly managed for the past few years, and was under judicial administration since September after reporting revenues being down by 30% and a loss of more than 11 million euro. The new owner announced that they would continue Baccarat’s development and growth plan, including a sale or restructuring of the group, which is, well, mysterious and casts a strong shadow of uncertainty on the Brand’s future. Founded in 1764 Baccarat is one of the oldest brands in the luxury landscape today, and we can only hope that a heritage brand like Baccarat gets the investments and management it deserves to make a comeback.

Finally, Parisian fashion brand Ami also sold minority stakes to Sequoia Capital China in an effort to accelerate their global digital footprint.

3. For the first time. China has become the world’s largest market for luxury watches. While Chinese consumers have been the #1 clients for many years, it’s the first time that these clients buy in their domestic market Thus making China the number one market. Exports of Swiss watches to China reached 2.1 billion Swiss francs from January to November 2021, which is a 17% Increase vs 2019. Every other market registered a double digit decline during the same period, including Hong Kong and the United States, which were the historical leaders.

Last summer, a number of luxury watch brands, including the Richemont companies Montblanc, IWC and Piaget, opened stores on Tmall Luxury Pavilion. Other brands, such as Omega, turned to the Chinese app WeChat,

Executives at Kering reported that their brands grew in China by double digits year on year, while the CEO of Zenith, an LVMH brand, reported that China now accounts for 30% of their total business.

4. L’Oreal USA featured 2 innovative products at the Consumer Electronic Show this week:

The first one was a smart sink called “Water Saver” which was developed through L’oreal Technology Incubator. The smart sink will reduce a salon’s water usage by 80% and is currently being tested at 3 New York salon. The goal is to roll it out to 10,000 salons by 2022. Salon owners can also track their water and dollar savings through a connected app.

Then, L’Oréal also announced that their customization device called Perso will start being commercialised in the second quarter of 2021 through YSL Beauty lipstick. The device will cost $299. It can dispense over 5,000 shades of lipstick using an AI-powered app that can color match, provide recommendations, and allow people to post and share their own lipstick shades. One of the objectives is also for users of Perso to turn into micro-influencers within the app by gaining followers through their sharing of the shades they develop.

5. On the sustainability side, after launching vegan shoes in June, Adidas announced they are developing a new vegan sneaker made of mushroom-leather. The brand has set ambitious sustainability goals, and making its shoes biodegradable is an important milestone. Other brands announced some achievements this week:

First of all, Aveda delivered on their promise to go 100% vegan by this January: they have now removed all bee-derived ingredients from their formulations!

The skincare company Rodan + Fields is expanding its partnership with the waste management company TerraCycle to Canada and Australia, after launching the US recently. The brand’s consultants and customers will now be able to ship to Terra Cycle all the beauty packaging leftover, at no charge.

Then, the Skincare brand Tula announced that they were investing $250,000 to develop partnerships with sustainability experts, such as TerraCycle or Sustainable Forrest Initiative, as well as launching a biodegradable toner pad.

Finally Moncler also released a new jacket around its climate action initiative, with every material being sustainable, recyclable, circular or coming from fair sources.

6. A short news coming from the world of fashion: the Pandemic continues to completely disturb the fashion show calendar. After lock down measures implemented in England, Italy and France, all 3 fashion weeks have announced this week that they will all take place, but virtually. Designers will be able to display their collection but without any live audience. I am curious to see what type of digital innovation will come out of these shows!

7. Sephora revealed a plan of anti-racial measures in an effort to re-engage with customers of colors they have lost after a series of discriminatory behaviors were revealed on social media, as well as complaints over a lack of assortment catering to their needs.

The plan includes measures to crack down on discrimination amongst its staff, doubling its assortment of black-owned brands by year end, and downsizing its security forces. Sephora also plans on sharing progress on employee diversity twice a year on their website. In a June 2020 survey, 6.5% of their leadership across departments identified as black, and that number was 13% for their executive team.

In a statement, Sephora explained that this plan is commercially driven and that addressing all of their clients needs present a tremendous commercial opportunity. I’m not sure I would have positioned it this way, but hey, it’s clear that Sephora is under pressure to catch up with Ulta, which is dominating the beauty market and has been surpassing Sephora for 2 years now.

8. Dior opened a pop-up store in New York called Dior Chez Moi, featuring a capsule collection of exclusive loungewear, which is a first for the brand. This ephemeral store is part of a series of limited pop-ups set to launch across the world. Dior opened a similar pop up experience a few weeks ago, still in Soho, featuring a ski gear collection. It’s interesting to see that Dior is using the concept of capsule collection and pop up to test new product categories. I think it has a double effect of expanding the cultural reach of the brand while collecting tons of data to support potential category expansions.

9. American jewelry brand Signet, which owns Kay Jewelers, Zales and Jared, posted positive holiday sales results, driven by eCommerce sales increasing 61% over the same period in 2019, to bring the total sales to $1.8billion, or flat vs 2019. The Bridal and Fashion categories grew by double digits. To achieve these results, the company developed new services buy online pick up in stores, as well as virtual consultations and visualization of jewelry through new technologies. The company also announced that it had completed the closure of 355 stores out of the 380 they planned on closing this fiscal year.

10. Let’s finish the week with some holiday sales results.

Nordstrom reported a 22% sales decline in their 9-week Holiday period, mainly due to a slow foot traffic in their stores around the country. As you can expect, Digital sales increased by 23% vs the same period in 2019. Nordstrom now generates more than 54% of their total business Online, compared to 34% a year ago. ⅓ of online sales were fulfilled by the stores, instead of warehouses. It confirms the massive trend towards digitization and also the evolving role of stores. Management remains confident in the business trajectory and expects to remain profitable in this fiscal 4th quarter.

other major retailers and brands published their holiday sales results this week. Let’s go through the results quickly:

. Target reported a 17% sales increase over the holiday thanks to Online sales almost doubling in November and December. This also confirms that malls are generally declining and that the stores located outside of malls destinations tend to perform better.

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