W11 - Gucci, Nordstrom, Loewe, IWC, Breitling, Yeezy, Youtube
Your weekly luxury podcast, summarizing 10 important news!
1. Gucci is selling virtual sneakers for $12
2. Nordstrom launches live video shopping
3. Sustainability news: Loewe + Stella McCartney + IWC strap
4. Product Launches of the week: Ba&sh, Diesel.
5. Breitling subscription program
6. Yeezy x Gap $1 billion dollar deal
7. Finance - SPACs new: Athena, Waldencast
8. Technology: Youtube launches tik tok equivalent
9. People: Les Werner and Elsa Peretti
10. Earnings: GIII Group (DKNY, Donna Karan)
1. As the world is going through the NFT craze, we have passed a new milestone this week with the announcement that Gucci was selling virtual sneakers for $12 ! To be exact, Gucci partnered with the start-up Wanna,to develop this virtual sneakers, which can be bought for $11.99 on Gucci’s app or for $8.99 on Wanna’s app. The virtual sneaker was designed by Alessandro Michele himself. Wanna specializes in using Augmented Reality to create 3D technology for virtual try-ons. Its clients include Gucci, but also Farfetch, Reebok, Puma and Snapchat. The virtual sneakers can be worn in other virtual worlds, such as games like Roblox, or fit their avatars in social media apps. Virtual sneakers are a way for Gucci to target the digitally native Gen Z audience, and bring them into the brand’s eco-system even if they cannot afford buying physical products yet. This is only the beginning and I think we are witnessing the birth of a new business stream for fashion houses and probably luxury companies at large. The intersection of consumer goods, gaming and the metaverse paves the way for new methods of consumption which might have been unthinkable in the past.
2. Nordstrom launched a live video shopping channel. The American department store will start a series of livestreamed events during which brands and sales associates will feature products, and customers will be able to purchase these products in real time. The virtual events allow shoppers to engage with the hosts and ask questions about the products. One of the first shows was with Burberry, while upcoming ones feature Anastasia of Beverly Hills as well as Charlotte Tilbury. Nordstrom has already hosted more than 50 events so far. According to Coresight research, live video shopping will represent $25 billion in sales in the US only by 2023. This is a trend which will keep increasing and we will most likely report it frequently on this podcast.
3. On the sustainability front, Loewe unveiled a new bag made from surplus leather. The design of this woven basket bag initially came out in 2015, but this time Loewe is releasing it as part of a broader initiative called The Surplus Project, which showcases how to reuse, rethink and recreate luxury products from high quality leather, with the lowest impact on the environment.
Then, Stella Mc Cartney unveiled the first garment made from Mylo, which is a vegan, sustainable animal free leather alternative made from mycelium. As avid listeners of this podcast, you surely know by now that Mycelium is the infinitely renewable underground root system of mushrooms! In the case of Stella McCartney, the brand partnered with Bolt Threads, which produces Mylo and has also partnered with Adidas to produce vegan sneakers.
Finally, IWC developed a watch strap made from paper and recycled material, as an alternative for leather straps.
4. On the product launch side, Diesel entered the petwear market by releasing its first collection for dogs ! It is called Diesel Doggies, and features denim jackets, coats and mini knitted sweaters. The denim jacket with punk embroidery cost $150, while the cheapest item is an $80 sweater. This is a new trend to follow, as other brands such as Moncler and Moschino have also tapped into the pet fashion market.
Then, French fashion brand Ba&sh launched a new category, with the introduction of a pair of sneakers. The strategic objective is to target a Gen Z clientele, through a design reminiscent of 90s iconic sneakers like the Jordan One. To promote the launch, Ba&sh partnered with Snapchat to let users virtually try-on the shoes through a special filter. An interesting point is that the shoes are not carried in the stores, but sales associates can help clients virtually try on the shoes in the stores, before they place the order online.
5. Breitling launched a new program allowing customers to borrow a watch to test it, without committing to a purchase. This new service is called #Breitling Select and is a subscription model, requiring to sign a 12-month contract. Once signed-up for the program, subscribers will be able to select from an assortment of 60 models, and wear up to 3 models consecutively over a year-long period. Only one watch can be in possession of the users at all times and a watch cannot be kept more than 6 months. Clients can buy the watch they are trying at any time, at a discounted rate. Subscribers collect loyalty points which can be used towards the purchase.
6. Some financial information came out regarding the deal between Kanye west and Gap which was signed last year. The 10-year partnership will see Kanye West design and sell clothes for men, women and kids under the Yeezy Gap label. The first collection will hit the stores this summer. The deal excludes footwear, given the exclusivity agreement that binds West to Adidas until 2026. According to bank documents, the deal could be worth at least 970 million dollars for Kanye West. The brand could reach $150 million dollars in sales in the first full year and Gal things the Yeezy Gap label can become a billion dollar brand within a few years. Gap hopes that this strategic alliance will help make them more relevant with younger shoppers.
7. On the finance side: i wanted to see what’s happening with Spacs. For those of you who don’t know, a spac, or Special Purpose Acquisition Corporation, is a company which raises money through an IPO, with the objective to acquire private companies in the future. The acquisition targets don’t need to be disclosed during the IPO process, which is why SPACs are also dubbed “blank check companies”, however the SPAC has 2 years to identify and buy a target company, otherwise the money is returned to investors. Spacs are not new but they became highly popular recently. 2 spacs caught my attention this week. The first one is Athena Technologies Acquisition Corps, which listed at the New York stock exchange and raised $250 million dollars. It will target companies in fin tech, cyber security but also direct to consumer spaces. Why does it matter, because it is female led and is the only spac on the New York stock exchange with a black female CEO. With prestigious investors and advisors, such as Stacey Abrams, It will leverage a vast network of female founders and CEOs. The second spac was formed by Waldencast Ventures, a known VC in the beauty space. The new company is called Waldencast Acquisition and raised $300m to acquire companies in the beauty, personal care and wellness space.
8. On the technology side, Youtube launched a new service called Shorts, which is meant to compete with Tik Tok. Users are able to record, edit and share videos of 60 seconds or less, in a vertical format. They can add music, even though the popular tik tok sync feature is missing. Yes marketers, there is one more channel that you have to add to your radar now !
Finally, Snapchat acquired tech company Fit Analytics, specialized in apparel and footwear digital sizing. This strategic acquisition shows how Snapchat is focused on growing their shopping platform.
9. I rarely talk about people on this show, but 2 important news came this week: Les Werner, the historical founder of L Brands, which owns Victoria Secrets and The Body Shop, will not seek re-election to the board. Him and his wife will no longer be part of the company he founded almost 60 years ago. It marks the end of an era, especially because Victoria Secret will be split away from L Brands in August, but details of how it will be done remain unknown. The lingerie giant has been struggling to adapt to changing consumer needs and mindset. Annual sales for Victoria’s Secret have steadily declined and the brand closed nearly 250 stores in 2020, with 50 more planned for 2021.
Then, iconic Jewellery designer and former model Elsa Petretti passed away at age 80, in her home outside of Barcelona. She had been collaborating with Tiffany since 1974, and one of her most iconic creations was the Tiffany cuff bone.
10. Some financial results to finish the week: GIII apparel group, owner of DKNY and Donna Karan amongst others, reported a 35% sales decline during their fiscal year ending in Jan 2021. Sales ended slightly above $2 billion dollars, which is a decrease by a staggering 1.1 billion dollars vs the previous year. The group was still able to turn a profit of 25 million dollars, even though it declined by 85%. During the pandemic, the group restructured their retail operations by closing almost 200 stores at lesser known brands and adapting their merchandise to the new trend towards casual fashion. The outlook for the future is positive with a 13% growth expected in the first quarter.