• Olivier Moingeon

W16-17: Tiffany, Pandora, LVMH, Neiman Marcus, Hermes, Kering, Estee Lauder

Your weekly podcast summarizing 10 important news for the weeks of April 26th and May 3rd 2021!


1. Jewelry News: Tiffany men’s bridal collection. Pandora turns to lab-grown diamonds

2. Historic alliance between LVMH, Cartier and Prada to create a luxury blockchain

3. Sustainability: Zegna, Miu Miu, J. Crew, Beauty zero-waste pledge

4. Resale: Neiman Marcus, LVMH

5. Finance: Honest company. RTFK

6. Technology: Hermes, Pull&Bear

7. Hermes’s Q1

8. Kering’s Q1

9. Tapestry Q3 results

10. Estee Lauder’s Q3


1. In the world of Jewelry, we saw a few interesting news. First of all, Tiffany launched their first engagement ring collection for men, called the Charles Tiffany Setting, after the brand’s founder. Each ring holds either a round brilliant or emerald cut diamond of up to five carats in a more masculine bezel-style setting. Tiffany started embracing gay marriage as early as 2015, through an iconic campaign, and it is now moving one step closer towards inclusion by offering a more suitable diamond option for a man to be proposed to. This proposition apologetically masculine also strays away from gender neutral designs.

Then, Pandora made a historic announcement this week, when stating that they would no longer sell mined diamonds, but would instead only sell lab-grown diamonds. After years of skepticism, lab-grown diamonds got a real boost in 2018 when the FTC removed the word “natural” in its definition of a diamond. However, diamonds sellers are required to clearly state when a diamond is man-made as opposed to coming from nature. Lab-grown diamonds have a clear appeal for customers, because they are the exact same composition as natural diamonds. They are rated the same way, using the 4Cs, but they cost on average 30% less than mined ones.


2. On the technology side, a historic alliance between LVMH, Cartier and Prada gave birth to a blockchain which will allow customers to authenticate their luxury goods.

Called the Aura Blockchain Consortium, the initiative will offer a secure method for consumers to access information about a product's history, from sourcing of raw materials to craftsmanship and sales, including resale. The blockchain guarantees authenticity and transparency at every step of the product life cycle. The Aura platform is accessible by any brand, irrespective of size. Blockchain technology allows to register information into a digital public ledger, which can never be changed, modified or deleted. Therefore, it guarantees full traceability and authenticity of the data provided. Customers will be able to access the data by scanning a QR code on the label of the products they purchase. This is a fundamental moment in the luxury industry as we are witnessing 3 luxury brands and groups joining forces to develop a technology accessible by every brand out there, in an effort to provide customers with a better luxury experience.


3. Here is the sustainability segment with a few rapid news:

Miu Miu and Levi’s collaborated on an upcycled denim collection, which will launch at Selfridges in London and IAPM in Shanghai.

J. Crew unveiled their sustainability initiative called ReImagined, through which the fashion label commits to increase the sustainability of their products and supply chain by 2025. As such, 100% of their fibers will be ethically sourced. 90% of their cashmere and chinos will be produced in Fair Trade Certified facilities and 100% of plastic and paper will be sustainably sourced. By 2030, the brand will eliminate virgin plastic and become 100% carbon neutral.

Zegna partnered with automotive giant Stellantis to switch their entire fleet to green cars by 2025. They currently have more than 200 enterprise vehicles.

Finally, 5 competing beauty brands came together to sign a zero-waste pledge. Led by REN, the consortium of brands includes Biossance, Caudalie, Herbivore and Youth To The People, which are all sold at Sephora. The zero-waste pledge states that all the brands will create packaging that can be recycled and reused and that contains recycled materials by 2025.The purpose of the pledge is twofold: to advance sustainability and to show that collaboration is more fruitful than competition.


4. Neiman Marcus launched a service allowing their customers to resale their bags and accessories through Neiman Marcus stylists. The service was developed in partnership with the resale website Fashionphile, that Neiman Marcus owns a minority stake in. Neiman’s stylists simply have to upload their clients’ undesirable products on the fashionphile app, where they can then track their sales and commissions. I love this new service, which shows how the retail sales function is evolving to adapt to new consumption trends and behaviors. A stylist’s function is to edit a client’s closet, which means make room for new items by removing older products. Stylists now have the possibility to earn a commission in the process, and provide an elevated service to their clients. It’s a win for everyone.

Along the same lines, LVMH just launched a platform dedicated to reselling their dead stock of fabric and raw materials. Called Nona Source, the platform offers young designers and brands to buy premium fabric and leather for up to 70% off.


5. On the financial side, the Honest Company went public on the Nasdaq this week and the share price raised by 40% on the first day before quickly correcting the day after. The company raised $412 million dollars through this process, and is valued at $1.44 billion now. The funds will be used to strengthen the company’s marketing efforts and international expansion.

Another interesting news came from one of the hottest start-ups of the moment, no it’s not a clubhouse, but it’s RTFKT Studios, which raised an $8 million dollars seed round led by Andreesen Horrowitz. By the way, it’s pronounced Artifact Studios. The start-up specializes in NFTs and aims at becoming the digital Supreme, starting with sneakers. They made the news last month when selling $3.1 million worth of fashion NFTs in seven minutes. The use of proceeds will help build a digital NFT marketplace, engage with creators and artists, as well as become the first digital fashion label. I find it super exciting to witness the birth of an entire new segment of the luxury industry, made possible by blockchain technology and conceptualized by visionary entrepreneurs.


6. Here is what happened on the Innovation side. First of all, Hermes and Apple collaborated on creating a leather case for airtag, a small product developed by Apple which you can clip onto your most available objects, like your bag or luggage, and track this item on your phone in case it goes missing. It is not the first collab between the 2 powerhouses, as Hermes also developed watch straps for Apple when they launched their watch.

Pull & Bear partnered with Facebook and Instagram to develop a video game called Pacific Game, which aims at attracting a younger female audience. The fashion label is owned by Inditex, which continues its digital innovation strategy through that type of initiative. The game can be accessed on Pull&Bear’s website as well as their facebook and insta channels.

Finally, Amazon opened a hair salon in London to test new technologies, including Augmented Reality which lets customers visualize what hairstyles and colors look like on them. The salon is meant to be an experiential venue to showcase new products and technology, and there are no plans to open any other salons. Some said it is a modest marketing stunt to signal Amazon’s interest for the world of fashion and beauty, following the launch of Amazon Professional Beauty Store in the UK, which is an online storefront selling wholesale salon and spa products to professionals.


7. Hermes posted a strong performance in the first quarter of 2021 with sales increasing by 44%, which is almost double last year’s level. Sales reached $2.5 billion dollars, largely beating analyst’s forecasts. If we compare to Q1 of 2019, or pre-pandemic, Revenue increased by 33%.

Every product category experienced growth. Sales from Hermes’ retail stores increased by more than 50% whereas wholesale was down by 2% mainly due to the continuous slowdown in travel retail. Sales in Japan increased by 20%, whereas the rest of Asia experienced a 94% sales increase, largely driven by China. Sales in the Us increased by 23%, but were down by 1% in Europe, including a 9% decrease in France.


8. Kering published their Q1 results and posted a strong rebound in sales, sending the stock price up by 1% in early trading. Sales increased by 25% to reach 3.9 billion euros, which is 5% above pre pandemic levels. As a matter of comparison, LVMH’s Q1 sales were 8% above Q1 2019.

This is a positive sign, confirming the strong recovery underway in the luxury industry, but Kering’s share increased only by 4% since January, whereas LVMH and Hermes’s stocks gained more than 50% in the same period. Why is the recovery at Kering slower? It is mainly due to its reliance on Gucci, which drives 2 third of the group’s sales. While Gucci fell slightly short of pre-pandemic levels, it surpassed Q1 2020 and the recent show that we covered on this podcast last week shows a renewed energy and dynamism at the brand.

At the group level, The absence of Chinese tourists in Europe continues to hurt sales, as well as a group’s decision to limit products sold through department stores and independent retailers. Kering’s sales rose 83 per cent in Asia, and 46 per cent in North America.


9. Tapestry also released their fiscal Q3 results. The owner of Coach, Kate Spade and Stuart Weitzman reported a 19% increase in sales to reach $1.3 billion dollars. They also reported a net income of $92million as opposed to a loss of 677 million in the same period last year. In North America, sales levels went back to pre-pandemic levels. Digital sales increased by triple digits while revenue in mainland China increased by 175%.

The group closed 49 stores year to date across its brands and also reduced its sku count by 30 to 50%. They also invested in data and analytics tools.

At the brand level, Coach sales were up by 25% during the quarter compared with a year earlier, Kate Spade sales were up by 1%, and sales at Stuart Weitzman rose by 13%.


10. Estee Lauder published their fiscal 2021 3rd quarter results. Sales increased in every region, and in most product categories. The group exceeded sales and earnings expectations. However, despite these positive results, the stock price decreased by 8% as analysts had higher expectations and felt that the recovery was uneven. Net sales grew by 13% to reach 3.8 billion dollars. The Asia-Pacific region grew by double digits. In terms of product categories, growth drivers were skincare and fragrance. Makeup sales continue to suffer but a slight recovery has been spotted in Asia Pacific. A bright spot came from the travel retail business, which grew year-on-year despite the absence of international travels in EMEA and the USA.


4 views0 comments