• Olivier Moingeon

W10 - International Women's Day, Saks, Louboutin, Hermes, Adidas, Jared, Aesop, Ulta

Luxury business News Podcast. Here are the 10 news we review this week !


1. Last Monday was International Women’s Day, and I wanted to highlight a few initiatives. First of all, LVMH, Kering and L’Oreal joined a group of 41 large french companies which committed to have at least 30% of women within the 10% top jobs, as well as increase the share of women’s executives by 2% every year. These results could be achieved by 2027 or 2030. While that type of news is meant to show positive signs, I feel the horizon is too long, and it doesn’t address salary disparity. Another initiative which caught my attention this week came from WIE Suite, which is a platform and community for female leaders. Through the hashtag 2millionmentor minutes, the platform invites women (and men!) to donate at least 60 minutes of their time in March to mentor and help women who recently lost their jobs or are looking to re-enter the job market. Rebecca Minkoff, Bobbi Brown and countless others have already signed up as mentors.

Along the lines of D&I, Nike announced that for the first time, it will tie its executive compensation to the company’s progress on diversity and inclusion throughout its workforce.


2 Hudson Bay Company, owner of Saks 5th Avenue, will spin off the department store’s eCommerce website, saks.com, as a completely separate business entity. The website received a $500 million capital injection from Private Equity firm Insights Partner, which values the business at $2 billion dollars. Saks' 40 brick-and-mortar stores will become a separate business known as SFA, and will remain wholly owned by HBC. If you remember, I already explained a few weeks ago why Hudson Bay would separate saks.com. By giving total freedom to saks.com to grow as an online retailer, it is expected that sales and therefore the valuation will increase significantly. This successful new metrics will help increase the valuation of the entire Hudson Bay portfolio.

A few weeks ago, Neiman Marcus did the same thing, when they spun off Mytheresa.com to resolve a dispute with its investors. The online entity ultimately went public in January and raised $2.4 billion dollars.


3. Christian Louboutin sold a 24% stake in its business to Exor for $640 million dollars. Exor is the holding company of Italian billionaire Agnelli family. The transaction is expected to close in the second quarter of 2021 and values the company at more than $2.7 billion dollars.

It’s an interesting move because over the years Louboutin has always refused to open its capital despite approaches from luxury giants like LVMH. According to Louboutin, Exor is the perfect partner to accelerate the next phase of development, and share a long term vision. The deal is also expected to boost Louboutin’s presence and eCommerce capabilities in China.


4. On the sustainability front, Hermes announced a partnership with MyCoWorks, a Californian start-up which developed a patented process to turn mycelium into a material that imitates the properties of leather. What is mycelium you might ask? It is a network of threads from the root structure of mushrooms !

Hermes and mycoworks co-developed a specific material which will be used to produce parts of its Victoria travel bag, to be released by the end of the year. This new material, called Sylvana, is a form of fine mycelium and is produced in the MycoWorks facilities. It is then provided to Hermes ateliers in France, where master craftsmen will tan and finish it to increase its strength and durability.

Mycoworks is a startup founded in 2013, which received 2 consecutive founding rounds in 2020, bringing its total funding to $62 million dollars. Experts in the field expects the vegan leather market to be worth nearly $90 billion by 2025


5. In China, a major milestone was passed in the beauty space, with the announcement that 2 cruelty-free brands, Aesop and The Body Shop, will start physical distribution in mainland China. As a reminder, the Chinese regulators have always required cosmetics brands to perform animal testing for imported brands. Over the past 10 years, cruelty free beauty brands found an alternative through online cross-border businesses such as Tmall, Little RedBook and many others, selling online and shipping directly to the end-consumer from warehouses located outside of China or in duty free zones. Aesop started selling on Tmall in 2018 and generated almost $25 million dollars in sales since then. The Chinese government announced last July that the animal testing requirement would be lifted in 2021, making way for international beauty brands to develop their business directly from mainland China and tap into physical channels.


6. Adidas unveiled a new 4-year strategy which plans on doubling its eCommerce sales to reach 9 billion euros. By 2025, Direct to Consumer channels will represent 50% of the brand’s total sales, compared to 40% in 2020 and 30% in 2019. The counterpart of this online push is that Adidas will significantly reduce its wholesale footprint, keeping only strategic wholesale partners. The brand will invest 1 billion euros in developing its digital operations. This new growth strategy followed the brand’s strong results in the 4th quarter of 2020 and it predicts a strong 2021 performance.

Adidas will also make sustainability a key pillar of its strategy, as the company plans on making nine out of 10 products sustainable by 2025. It is currently at 6 out of 10. Finally, in terms of categories, Adidas will focus on athleisure as well as develop the women’s market.


7. American jewelry brand Jared is testing a bespoke jewelry service within 19 of its stores. The new shop in shop experience is called The Foundry and it allows clients to work with Jared’s jewelers in order to create any piece of jewelry from scratch, as well as repurposing heirloom pieces or matching missing earrings. The service is also available online, through a video consultation with master jewelers. The Foundry is expected to reach $30 million dollars in sales in the first year


8. Ulta published their fiscal 2020 results, for the year ending in January, and sales declined by almost 17% to reach $6.2 billion dollars. Their CEO, Mary Dillon, will step down after 8 years in the job, and be replaced by the current president. Ulta stated that their 4th quarter results were better than expected and that they will open 40 new stores and remodel 21 before the end of the year. Sales levels are expected to reach $7.2 billion dollars, which is close but not yet pre-pandemic levels.


9. Hugo Boss reported a 33% sales decrease for the year 2020, falling short of 2 billion euros, and a 219 million euro loss. The formal wear brand obviously suffered from stores closures around the world but also from the shift to casual clothing, as no-one really needed to dress up for special events in 2020. However, a shift to more casual clothing has been underway for a year now, as seen in recent partnerships with the NBA and Russel Athletics. Hugo Boss is being re-positioned as a lifestyle brand for the modern man. Recovery is expected for Q2 of 2021 thanks to a strong push in eCommerce, an already performing Asia Pacific region and a gradual recovery in the US and Europe.


10. A few rapid results from other companies:

Revlon reported a 21% drop in sales for the year 2020, reaching $1.9 billion dollars. The beauty conglomerate focuses its efforts on 4 strategic objectives: driving growth at 2 iconic brands, Revlon and Elizabeth Arden, as well as in key markets such as China, and finally accelerating their e-commerce business.

In fashion, the luxury group Brunello Cucinelli raised its sales guidance for the year on expectations that the end of the coronavirus pandemic was near. Sales could grow between 15 to 20% in 2021 and by almost 10% in 2022.

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