W15 - Tiffany, Gucci, Canada Goose, Nike, Bottega Veneta, Air Yeezy 1, Beautycounter, LVMH, L'Oreal
1. Gucci’s 100-year anniversary show with a fashion hack
2. Tiffany stops historical advertising in NYT
3. Canada Goose new sustainability initiative: move to reclaimed fur
4. Nike starts selling reconditioned shoes,
5. Bottega Veneta new secret show in one of Berlin’s most iconic nightclub
6. A pair of Nike Air Yeezy 1 might reach $1.0 million at Sotheby’s auction
7. The Carlyle Group takes majority stakes in Beautycounter, valuing the clean beauty brand at $1.0 billion
8. Brand Diversification: LV’s library, Clarins’ wine domain in Bordeaux
9. LVMH posts stellar performance in Q1 2021
10. L’Oreal reports positive results in Q1 2021, except the Consumer Products Division
Your Weekly Luxury Podcast.
1. I wanted to highlight Gucci’s latest fashion show, which celebrated the brand’s 100 year anniversary. In a 15-minute video called Aria, Gucci presented their new collection, as a whimsical tribute to the brand’s founder and history. One of the most interesting features was what some experts called a Fashion Hack, because the balenciaga logos was next to Gucci logos on some of the designs. It is an unusual collaboration between 2 Kering brands, which Gucci’s designer, Alessandro Michele, explained as a tribute to the creative universe of Balenciaga’s designer, Demna Gvasalia.
This attitude breaks the codes and the internet is already on fire thinking of other collaborations between powerhouses, such as Louis Vuitton and Dior for example.
While on the subject of Fashion, it was announced this week that Fashion Week New York will return to in-person shows in September.
2. Tiffany made an unexpected change to their advertising strategy, by canceling their daily ad in the New York Times. Why does it matter, because the American jeweler had been running an ad on the top right corner of page 3 every day since 1896. Don’t worry I’ll do the math for you, it’s been 125 years ! The placement was ideal, at eye level as soon as readers turned the page from the paper’s cover. The brand did not communicate on the change, but It shows the brand’s desire to take advertising in a new direction, under the elm of Alexandre Arnault, who is now EVP of products and communication.
3. On the sustainability front, Canada Goose unveiled a set of new ambitious sustainability goals to achieve by 2025, but don’t hold your breath, fur is not part of it. The brand is investing heavily in off-setting its carbon footprint, and will also transition 90% of its materials to recycled fabrics and materials. To do so, internal teams will review each and every product to assess how existing material can be replaced by a sustainable alternative. Packaging will become 100% sustainable by 2025 also. Canada Goose partnered with Bluesign, a company that issues a certification for products which meet a minimum standard of carbon emissions. The objective is to reach 90% product certification by 2025. The brand currently stands at 45%. When it comes to fur, the brand will favor using reclaimed fur instead of new fur, and it will also add an option for clients to buy every product with or without fur. Clients are incentivized to return their fur hood against a gift certificate, so that the brand can meet its internal goal of using 100% reclaimed fur by 2022.
4. Still on the sustainability front, Nike started selling reconditioned shoes, through a new program called “Nike Refurbished”. How does it work? Within 60 days after purchasing a brand new pair, customers now have the option to return the shoes, which will then be classified in 3 separate categories describing the conditions: “Like New”, “Gently Worn” and “Slightly Flawed”. Then, the Nike team will refurbish the shoes to bring them to as close to a new condition as possible. Once reconditioned, the shoes will make it back to stores, and price will be determined by their footwear type and condition grade. Shoes which cannot be refurbished but can still be worn are donated to charity. Shoes that have reached the end of their life are recycled internally through the program called Nike Grind. The shoe box is covered in messages explaining the condition of the shoes inside, as well as Nike’s mission called “Nike’s Move to Zero” which is an overarching sustainability program towards zero carbon footprint and waste, that was launched 2 years ago. . This is a really interesting way to capture their own second-hand market. The program debuted in 15 stores in the USA, with plans to scale up rapidly.
5. Bottega Veneta continues to create a buzz around unusual formats and events. The brand staged a secret show in one of Berlin’s most famous and decadent nightclubs, famous for being the temple of techno. No pictures of the actual event were released for now, but they will be in June, along with a video. The only pictures available, strategically provided by Bottega, were pictures of guests entering the venue, amongst who were famous artists, Djs, and direct competitors, such as Stefano Pilati or Virgil Ablo, fully dressed in Louis Vuitton as one can expect. The show featured Bottega’s fall winter collection and was titled “Salon 02”, after the brand hosted a similar secret event in london a few months ago, called Season 01, showcasing their Spring Summer 21 collection. Bottega is garnering a huge amount of media coverage and discussions around their unusual strategies, from leaving social media, to hosting secret shows and launching a quarterly digital magazine.
6. Sneaker’s collector Ryan Chang is selling a pair of Nike Air Yeezy 1 through an auction at Sotheby’s, and it is expected to sell for more than $1.0 million dollars. It will be sold as a private sale, meaning nor the price, or the name of the buyer, will be released unless authorized. The Air Yeezy 1 was first introduced in 2008, when Kanye West wore them at the Grammys. They were commercialized in 2009 and the Air Yeezy 2 came out in 2012. Kanye West ended the partnership with Nike and moved to Adidas after feeling he was not earning enough money. That move proved successful as a recent report showed that the Adidas Yeezy franchise is valued at 1.7 billion dollars.
7. On the Investment side, private equity giant the Carlyle Group took a majority stake in Beautycounter, which valued the clean beauty brand at $1.0 billion. Beautycounter was founded in 2013 with the mission to develop clean beauty products, free of 1,800 ingredients on their “never list”, consisting of questionable or potentially harmful ingredients. The brand also took an activist role in politics, and influenced at least 9 pieces of legislation passed in the US promoting the safety of personal care products. BeautyCounter has about 100 products in their portfolio and became famous also because of their unique distribution model, where pretty much anyone could become a sales consultant for the brand, sell their products and earn a commission. They have a network of more than 65,000 such sellers in the US, on top of their eCommerce, retail stores and partners. The investment will accelerate the growth and development of BeautyCounter. Carlyle is a renowned private equity firm, notorious for investments in Supreme, Golden Goose
Another investment news came this week, coming from the Clarins-Courtin family office, which led a $9 million dollars series B in Pai skincare.
8. I want to introduce a new segment where I review Brand diversification. The first example came from Louis Vuitton, which converted one of their Parisian stores into an ephemeral library. It features the entire collection of books published by Vuitton’s publishing house, which was created more than 20 years ago, as well as a finely curated selection of other books covering art, photography, fashion, design and lifestyle. This is another example of luxury brands digging deeper into culture as a means to create an emotional connection with consumers. This is also a way to pay tribute to one of Louis Vuitton’s grand sons, who opened multiple book clubs in Paris in the early 1900s.
Then, French beauty giant Clarins acquired a wine domain in Bordeaux for 75 million Euro, and will let the original family continue to run that domain. This is obviously not the first brand to do so, and Chanel also owns a few domains, and their latest acquisition happened 2 years ago with a domain in the south of France.
9. LVMH posted a strong first quarter of 2021, returning to growth despite lockdowns in Europe. Comp sales increased by 30% during the 3 month period January to March, to reach 14 billion euros. It was twice more than analysts consensus predicted for that period. If we compare to the first quarter of 2019, pre-pandemic, sales increased by 8%. Fueled by stellar performances at Louis Vuitton and Dior, the Fashion and Leather division, which accounts for nearly half of LVMH’s revenues, recorded a 52% increase in comp sales, again largely beating analysts estimates. Sales in the Watches and Jewelry division increased by 138% benefiting from the acquisition of Tiffany. The Wine and Spirits division increased by 36% Year on Year, or 17% compared to 2019 levels. In terms of geography, growth is driven by a surging demand in the US and Asia, with each market up respectively by 23% and 86%. On the other end, Europe experienced a 9% decrease as the region kept on facing lockdown measures.
10. L’Oreal reported a strong performance for the first quarter 2021, with sales up by more than 10% to reach 9.1 billion dollars. However, analysts were disappointed by the mediocre performance of their Consumer Products Division, which was the only division to report a sales decline due to the continued sluggish demand in the make-up category. As a result, the share price fell by 1.5%. The three other divisions of the group posted double digit gains for the period. eCommerce sales increased by more than 47% to now account for more than 26% of the Group’s revenue. Sales in China increased by 38%.