Daily LInks
1. Luxury e-commerce stares down consolidation. The era of low-cost capital and chasing growth is past, and there’s more of an emphasis on building a sustainable business model, says Nicolas Llinas, a partner in Boston Consulting Group’s luxury, fashion and beauty practice. – Read More on Axios
2. Farfetch, Now Matches: Investors Look for Deals Amid Luxury eCommerce Sites. January 2023 marked a bold investment move, with Apax injecting £60 million into Matches — its most significant investment in the company since the acquisition. – Read More on PYMNTS
3. RETRO READ: Farfetch’s $1.1 Billion Deal with Richemont, Alibaba Exemplifies Some Existing Trends in Luxury. Beyond the focus on China, the headline-making deal plays to two existing but ever-accelerating trends in fashion/luxury in light of the COVID-19 pandemic: the rampant adoption of e-commerce by notoriously digitally-averse high fashion and luxury brands, and an enduring consolidation of players in the upper echelon of the industry. – Read More on TFL
4. Return Policies Have Gotten More Annoying This Holiday Season. Returns are expensive for online retailers. Companies charge return fees to offset shipping and labor costs, said David Morin, vice president of customer strategy at Narvar. The fees are also an attempt to reduce customer returns, he said. – Read More on WSJ
5. ESG Is Under Attack. How Should Your Company Respond? Leaders need to better understand exactly how ESG or sustainability are being used as a critique, and whether those doing the critiquing are doing so in good faith. – Read More on HBR
6. Bustling City Stores Are Hurting Luxury Middlemen. Fashion houses see shoppers flock to their websites and physical stores while third-party online platforms struggle. – Read More on Bloomberg
1. ‘Daigou’ goes corporate as retailers seek new ways to reach Chinese shoppers. “I think we have to level up our idea of daigou,” Re-Hub’s Piachaud said. “Essentially there’s this chain from global retail to Chinese consumers not directly from the brands. That’s the professionalization of daigou at work.” – Read More on Reuters
2. RETRO READ: Fendi Case Shed Light on Challenging Fight Against Parallel Imports in China. Tackling counterfeits can be frustrating and challenging at the best of times. Dealing with their trickier – and more “lawful” – cousin, parallel imports can be even more challenging. – Read More on TFL
3. Inside PDD, China’s e-commerce titan behind Temu and Pinduoduo. “We’ve reinvented the online shopping experience to be more interactive and engaging, drawing inspiration from some aspects of physical retail.” – Read More on Nikkei
4. Luxury Brands Are Overstocked, Leading to Discounts That Threaten Their Reputations. Many brands got into this fix because they overestimated demand after the post-pandemic sales spike. However, consumers put the brakes on luxury spending this year. – Read More on Forbes
5. Whole Foods beats NLRB case over ban on Black Lives Matter apparel. Whole Foods Market Inc did not violate U.S. workers’ labor rights by barring them from wearing Black Lives Matter facemasks, shirts and other apparel, a National Labor Relations Board judge has ruled. – Read More on Reuters
6. Allen & Overy rolls out AI contract negotiation tool in challenge to legal industry. Allen & Overy has created an artificial intelligence contract negotiation tool, as the magic circle law firm pushes forward with technology that threatens to disrupt the traditional practices of the legal profession. – Read More on FT
1. Can anyone bar Europe do luxury? The biggest beneficiaries of the boom have been European companies. These account for around two-thirds of luxury-goods sales, according to Deloitte. – Read More on the Economist
2. Pulitzer-winning authors join OpenAI, Microsoft copyright lawsuit. A group of 11 nonfiction authors have joined a lawsuit in Manhattan federal court that accuses OpenAI and Microsoft of misusing books the authors have written to train the models behind OpenAI’s popular chatbot ChatGPT and other artificial intelligence based software. – Read More on Yahoo
3. RELATED READ: Author Takes Issue with “Unfair” Use of Copyrights in OpenAI Lawsuit. A new copyright lawsuit targeting OpenAI and Microsoft sheds light on what at least one plaintiff is asserting in an effort to get ahead of the fair use arguments being waged by the companies behind large language models. – Read More on TFL
4. Digital reinvention fuels a fast-growing luxury sector. Competition to win customers may intensify if economic growth slows in 2024 (as we expect it will) and aspirational luxury consumers reduce their spending. The likely outcome: The strongest luxury brands will get even stronger. – Read More on JP Morgan
5. Ebay to Take on Poshmark, The RealReal for Luxury Resale Spend. Even despite the April shutdown of Cudoni, a luxury resale platform backed by eBay, eBay has continued to double down in the space. – Read More on PYMNTS
6. Wartime sanctions on Russia have sparked new smuggling opportunities for hot-ticket items like luxury Italian handbags and microchips. Hundreds of millions of dollars worth of luxury items — including champagne, watches, perfume, Rolls Royce cars, and designer fashion items from brands like Chanel and Louis Vuitton — were cleared for entry into Russia between March and August of 2022. – Read More on BI
1. Fashion executives see uncertainty for industry in 2024. While growth in luxury goods is expected to slow in China and European markets, it is expected to expand a bit in the U.S. – Read More on Seeking Alpha
2. The Oldest Businesses in the World Share Their Secrets. The average American business closes shop after about 21 years. What does it take to stay open for the long haul—and not just for a few generations, but hundreds if not thousands of years? – Read More on Bloomberg
3. Activists call for more transparency as fashion continues to fail on human rights. While 95% of brands placed expectations on their suppliers around human rights, fewer than a third took proactive steps, such as providing targeted support on gender equality or maintaining cash flow by avoiding delayed payments. – Read More on Reuters
4. These six questions will dictate the future of generative AI. Will we ever mitigate the bias problem? How will AI change the way we apply copyright? Will we come to grips with its costs? Will doomerism continue to dominate policymaking? – Read More on MIT Tech Review
5. GPT and other AI models can’t analyze an SEC filing, researchers find. Large language models, similar to the one at the heart of ChatGPT, frequently fail to answer questions derived from Securities and Exchange Commission filings, new research finds. – Read More on CNBC
6. Sustainable finance fuels fashion industry decarbonization. “Accelerating net zero for supply chains requires the rapid scaling of low-carbon technologies and new, innovative financing models to drive adoption.” – Read More on Sustainability Mag
1. ChatGPT and other LLMs have created a copyright crisis. The writers and artists argue that the companies behind these models didn’t ask permission before hoovering up countless people’s life work, and many of these models will end up competing with the same humans on whose opuses they were trained. – Read More on the Washington Post
2. Retailers Enlist AI in Fight Against Returns. They are using AI to sharpen product descriptions and recommendations, steer certain ads away from shoppers most likely to return those products and aim advertising toward consumers they believe will hold on to their purchases. – Read More on WSJ
3. Saks CEO says luxury retail will be ‘here to stay’ in 2024. “People are not going to trade down out of it. Folks that reached in, maybe a few years ago, even last year, might not be reaching in this year, but the core luxury consumer doesn’t trade down.” – Read More on Yahoo
4. Golden Goose IPO to raise about $1.1B, sources say. Luxury fashion group Golden Goose plans is looking to raise about 1 billion euros ($1.1 billion) from an initial public offering (IPO) in Milan, three people said. – Read More on Reuters
5. RELATED READ: A Running Tracker of Fashion/Retail Industry Initial Public Offerings. As for the companies that are expected to make public listings next, names like Shein, Italian footwear brand Golden Goose, Kim Kardashian’s SKIMS, sustainable fashion brand Reformation, e-commerce tech company Rokt, activewear-maker Vuori, and Spanish fashion retail company Tendam have been raised. – Read More on TFL
6. Apple to pause some Watch sales before Christmas over patent dispute. The decision stems from two orders issued by the U.S. International Trade Commission on Oct. 26, which would restrict Apple’s ability to sell products that use the Blood Oxygen feature after an IP disagreement between Apple and Masimo, a med tech company. – Read More on CNBC
1. Top influencer Ferragni fined $1.2M for misleading Christmas cake advert. Companies controlled by top Italian fashion influencer Chiara Ferragni must pay a fine of $1.18M for misleading customers over charity donations linked to sales of a Christmas cake, Italy’s antitrust authority said. – Read More on Reuters
2. States are lagging in tackling political deepfakes, leaving potential threats unchecked heading into 2024. Just three states enacted laws related to those rapidly growing policy areas in 2023 — even as the size, scale and potential threats that AI and deepfakes can pose came into clearer view throughout the year. – Read More on NBC
3. ‘No circuit split’ — Herbal Brands exhorts Supreme Court to skip Amazon reseller case. Herbal Brands opposes Supreme Court review of a 9th Cir. decision allowing the company to sue five Amazon resellers in Arizona for alleged trademark infringement. Its primary argument: The Amazon resellers are asking the justices to decide a question that the case does not present. – Read More on Reuters
4. H&M Sales Drop as Consumer Demand for Fast Fashion Wavers. Sales fell 4% in the three months through November at constant currencies, the company said Friday, in line with analysts’ expectations. – Read More on Bloomberg
5. How much did you say it costs, $40,000? I’ll take it! Luxury buyers are becoming younger thanks to social media, installment payments and resale platforms; they devour classic and exclusive articles whose greatest appeal is the fact that they are expensive. – Read More on El Pais
6. Second-hand luxury: handbag resale market tests pricing power. The bags that best hold their value tend to be those that were more expensive to start with, according to data from broker Bernstein, based on Rebag’s Clair report. – Read More on the FT
1. Where did Farfetch go wrong? “The cash burn has been too high, they will have to refinance . . . [and] if they don’t secure refinancing soon, survival may not be guaranteed.” – Read More on FT
2. Luxury slowdown prompts fears of inventory pile-up over key holiday season. Conflict in the Middle East added geopolitical uncertainty to a luxury industry outlook already clouded by inflation, with shoppers in the U.S. and Europe tightening their purse strings while expectations for a strong post-pandemic rebound in China were derailed by a property crisis. – Read More on Reuters
3. “Average customer doesn’t care terribly much about sustainability” says LVMH US head. “Sustainability is something we do not because we think our customers care – we do it because it is existential to our business.” – Read More on Dezeen
4. COVID Tested Global Supply Chains. Here’s How They’ve Adapted. The Biden Administration has continued former President Trump’s tariff policies aimed at Chinese goods, while also offering incentives that encourage American companies to bring manufacturing operations back from China. – Read More on HBS
5. The state of supply chain sustainability. Supply chain managers indicated that investors are far and away the fastest-growing source of pressure to improve their sustainability, followed by governments and international governing bodies, corporate buyers, company executives, end consumers, and current and prospective employees. – Read More on MIT
6. What It Actually Takes to Make Your Products More Sustainable. Redesigning your existing SKUs to be more eco-conscious isn’t a simple task–but it is one that businesses of all sizes can successfully navigate. – Read More on Inc.
1. European luxury labels’ distaste for discounts frustrates Farfetch ambitions. Its longer-term challenge is a drive among labels to seek greater control of their products, usually at their own retail boutiques – a strategy aimed at avoiding discounts that third party retailers like Farfetch rely on to attract shoppers. – Read More on Reuters
2. They spent big to be B Corps. Now they’re questioning the do-good corporate status symbol. An increasing number of B Corps are voicing concerns about the standards used to assess members, raising questions about rapid growth in the number and size of companies being certified. – Read More on LA Times
3. RELATED READ: Chloé Is Luxury’s First B Corp, What Does the Popular Certification Really Entail? The reality behind B Corps can be more complicated that meets the eye given that “B Corp standards are not legally enforceable, and neither a company’s board nor the company, itself, is liable for damages if it fails to meet them.” – Read More on TFL
4. Why the AI Act was so hard to pass. Unsurprisingly, OpenAI (a company known for refusing to disclose details about its work), Google, and Microsoft all lobbied the EU to water down the harsher regulations. Those attempts seemingly paid off. – Read More on the Verge
5. Rebag CEO sees ‘tension’ in luxury market. Gorra says that less spending in the firsthand luxury market directly impacts the resale market, noting “we [resale retailers] are a consequence of some of the trends that you see in the firsthand market.” – Read More on Yahoo
6. After liquidating stores, bankrupt retailers are staging a comeback. Months after shuttering 115 locations earlier this year due to its parent company Bed Bath & Beyond going bankrupt, BuyBuy Baby unveiled plans last month to reopen 11 closed locations. And, off-price department store Century 21 reopened its flagship location in New York this May. – Read More on Modern Retail
1. European Retailers Try On Second-Hand Fashion. Clothing retailers have been attracted into the second-hand market by a combination of consumer demand and sustainability concerns but, while the market is expected to grow at a fast clip in the coming years, analysts caution that profitability looks set to be challenging for now. – Read More on WSJ
2. Amazon asks federal judge to dismiss the FTC’s antitrust lawsuit against the company. In its 31-page filing made in a federal court in Washington state, Amazon pushed back, arguing the conduct that the FTC has labeled anti-competitive consists of common retail practices that benefit consumers. – Read More on ABC
3. RELATED READ: FTC Accuses Amazon of “Illegally Maintaining Monopoly Power” in New Lawsuit. One of the most striking cases to be initiated under the watch of FTC Chairwoman Lina Khan, the FTC claims that “by stifling competition on price, product selection, quality, and by preventing its current or future rivals from attracting a critical mass of shoppers and sellers, Amazon ensures that no current or future rival can threaten its dominance.” – Read More on TFL
4. Unilever Faces ‘Greenwashing’ Probe by UK Watchdog. The maker of Dove soap and Cif cleaner may have been overstating the environmental qualities of certain products through the use of “vague and broad” claims, unclear statements and natural looking images and logos. – Read More on Bloomberg
5. Can Sustainability Drive Innovation at Ferrari? “We want our car to be really highly personalized. We want our car to deliver a unique emotional experience. We want our car to be sustainable. And we want our car to be culturally relevant.” – Hear More on HBR
6. Macy’s Billion-Dollar Question: What’s More Valuable, Real Estate or the Business? The bidders haven’t spelled out their intentions with the company and its operations. Investors in years past have said Macy’s ownership of hundreds of stores and real-estate parcels was as valuable as the retail business, if not more so. – Read More on WSJ
1. Macy’s Investors Reportedly Launch $5.8 Billion Bid to Take Retailer Private. The report says these investors believe Macy’s is undervalued on the public market and have said they would raise their offer, subject to due diligence. – Read More on PYMNTS
2. The World’s Most Anonymous CEO Is About to Take Center Stage. Sky Xu, the founder of fast-fashion juggernaut Shein has managed to stay out of the spotlight despite his company’s meteoric rise. With an IPO looming, he likely won’t remain under the radar for much longer. – Read More on WSJ
3. When Push Comes to Shove, Amazon Does Cut Prices. Starting next year, its commissions on sales of cheap apparel are dropping from 17% to as low as 5%, it announced last week. The reason, while not explicitly mentioned by the e-commerce giant, is the Chinese fast-fashion retailer Shein. – Read More on Bloomberg
4. Luxury Brands Seek Discreet Ways to Move Goods During Slowdown. Off-price outlets have become increasingly popular. These outlets can shift meaningful amounts of stock while offering brands the discretion of offline prices. – Read More on PYMNTS
5. RETRO READ: As Unsold Goods Continue to Mount, the Off-Price Market is Coming into View. The result of the growing mound of unsold merchandise will be a field day for a select few: off-price retailers and resale entities. The T.J. Maxxes and Marshalls of the world and the growing number of digitally-native resale sites are being presented with “the greatest buying environment for off-price in a decade.” – Read More on TFL
6. CIOs grapple with the ethics of implementing AI. With ethical considerations around AI use increasingly top of mind, IT leaders are developing governance frameworks, establishing review boards, and coming to terms with the difficult discussions and decisions ahead. – Read More on CIO