Briefing: Aug. 12, 2022
If the latest round of revenue reports is any indication, demand for luxury goods is still up, despite enduring struggles for brands in China. Ralph Lauren reported sales growth of 8.3% to $1.49 billion for Q1, while Canada Goose’s revenue for Q1 (ending on Jul. 3) topped $54 million – up 24% compared to the same 3-month period in 2021. Michael Kors and Versace-owner Capri Holdings also reported Q1 revenue this week, generating $1.36 billion in sales for the period ending on Jul. 2, an increase of 8.5% YoY. And still yet, The RealReal announced that its revenue for the quarter ending on June 30 rose by 47% YoY to $154 million – a nod to consumers continuing to shop for post-pandemic events and travel.
Prada is in the news this week, with the Italian fashion group reportedly pondering a $1 billion-plus second listing in Milan for 2023, per Bloomberg. “Investors have long asked for a double listing,” Bernstein analyst Luca Solca stated late last month, noting that “it would be an important and very positive development” for the owner of Prada and Miu Miu, which went public in Hong Kong in 2011, raising $2.14 billion in exchange for 20% of the company. Such reports come as Prada says that it is doubling down on its investments in digital channels, as well as its supply chain. (We speculated last year that Prada might be looking to build out a bigger group but that has not yet come into fruition.)
In non-financial news, in addition to requesting public comment on commercial privacy and security practices and their effects on consumers, the FTC reached a settlement with Axis LED Group and ALG-Health this week over allegations that the companies made false U.S.-origin claims in connection with their marketing of personal protective equipment and other products. The FTC’s guidelines over endorsement disclosures have also been an increasingly relevant topic in connection with the promotion of NFT projects by celebrities, with ad watchdog TINA.org sending a new batch of letters to the likes of Gwyneth Paltrow, Madonna, and Tom Brady, among others, over their disclosure-less endorsement of certain projects that they may have a material connection to. More about that below.
As for a complaint that caught my eye this week: On the heels of filing suit last month against the administrators of more than 10,000 Facebook groups that allegedly facilitate the posting of fake product reviews, Amazon has filed a new review-centric suit, accusing defendant Trey King and his company Auction Sentinel of violating the Washington Consumer Protection Act by allegedly selling fake, 5-star reviews to third-party retailers on its marketplace site. (You can find that complaint here.)
And in deal-making news this week: Sequoia Capital China has acquired a majority stake in Holzweilerto help accelerate the Norwegian fashion brand’s global expansion. The 10-year-old company says that the strategic partnership will help boost its direct-to-consumer business internationally, including in the U.S., UK, and China. It expects consolidated turnover to amount to $50 million in 2022, up 60% YoY.