Daily LInks
1. Forever 21’s Bankrupt Shell May Stiff Creditors of $200 Million: The U.S. Department of Justice’s bankruptcy watchdog is urging the judge overseeing the shell company’s case to convert it to a Chapter 7 liquidation from a Chapter 11 reorganization, estimating that high-ranking creditors owed some $250 million will likely only get 17% of that money back, or less than $50 million, according to court papers. – Read More on Bloomberg
2. Fewer retailers are seeking US IPOs in 2020. Those that do are raising less amid coronavirus pandemic: A total of seven retail companies have gone public in 2020 during the coronavirus pandemic as of Sept. 4, raising $987.78 million in gross proceeds. In comparison, 10 retailers fetched a combined $3.13 billion in their public debuts during the same period in 2019. – Read More on S&P Global
3. B Corps May Be Fashion’s Next A-list: While B Corps haven’t long carried cachet for brands, interest in the designation is ramping up as sustainability becomes fashion’s “It” item. “We saw a 60 percent increase in B Corp. certifications from 2018 to 2019, and we’re expecting that to be even larger in 2020.” – Read More on WWD
4. U.S. Retail Spending Grew at Slower Pace in August: U.S. consumers increased retail spending in August for the fourth straight month but at a slower pace than earlier in the summer as the economy tried to recover with the coronavirus pandemic still under way. Clothing purchases rose 2.9 percent, while furniture spending increased 2.1 percent from July. – Read More on the Wall Street Journal
5. Why Retailers are battling over business interruption insurance: When Century 21 filed for bankruptcy last week, the New York City-based department store chain blamed its demise on failing to receive payouts from its business interruption insurance. International chains like Ralph Lauren, as well as popular local clothing brands like Oaklandish, have gone to court, claiming that their insurance providers are not paying out what their businesses are owed under their business interruption policies. – Read More on Modern Retail
1. Smaller Watches Show China’s Growing Hold on Luxury Industry: Luxury good makers are retooling themselves to suit Chinese tastes. This process is being accelerated by the Asian nation’s rebound as the rest of the world still reels from the economic devastation of the coronavirus pandemic. “China, for the first time in the history of the brand, will become our No.1 country this year,” said Jean-Marc Pontroué, CEO of Panerai, a unit of Swiss luxury group Richemont. – Read More on Bloomberg
2. Fashion conversations grow louder on social as consumers return to work and school: Business fashion, nail polish and male fashion advice are just three of the interest areas on Reddit that saw huge spikes last week. Despite altered work and school schedules across the globe, people are now pulling themselves – and their outfits – together. “There has been a dramatic shift,” says Reddit’s head of partner insights and research, Dan Gould. “Conversations have moved from dressing up a Zoom background to actually dressing up.” – Read More on the Drum
3. The rise of fractional ownership in luxury assets: During the pandemic, a niche investment avenue whereby individuals buy a portion of a luxury assets, such as a painting or a vintage car, has enjoyed a spike in popularity. – Read More on European CEO
4. RELATED READ: Are Birkin Bags Really a Better Investment than Stocks and Gold? One Company is Actively Testing That Theory. Rally is letting consumers invest in rare assets, including certain hard-to-get Hermès Birkin bags, in much the same way as they can buy stock in publicly-traded companies. – Read More on TFL
5. Sales of Luxury Goods in China to End the Year Above 2019: Players with a distinctive premium fashion offering will do better than others. For example, Louis Vuitton’s biggest store in Shanghai is hitting a record-high $22 million monthly sales in August. At the same time, “Brands with a clear point of view, including those putting sustainability at the forefront of their brands and communications, are driving consumer affinity and performing well.” – Read More on Yahoo
6. Case in point: Prada says China sales to date well above 2019 levels. CEO Patrizio Bertelli said the appetite of Chinese customers for luxury goods remained very strong despite the coronavirus pandemic. – Read More on CNBC
1. How Has the Pandemic Changed Your Spending Habits? “’Fast fashion’ clothing from the likes of Zara and H&M will no longer be my go-to picks. I’ve realized that a closet full of clothing is useless. Instead, I plan to invest more in a high-quality, capsule wardrobe – one that’s heavy on the tops. Spending more on individual items today can mean saving more money in the long run.” – Read More on Bloomberg
2. Deals Are Being Dropped as Buyers Turn Wary During the Pandemic: U.S. companies this year have canceled 82 deals through Wednesday, up 41% from 2019. Material adverse clauses are a core ingredient in merger agreements and permit buyers to back out of a transaction in case of an event that harms the target company before closing. In some cases, deal makers now exclude the pandemic from what counts as a material adverse event to prevent a buyer from citing Covid-19 as a reason to terminate the transaction. – Read More on the Wall Street Journal
3. RELATED READ: A Key Concept in the Age of COVID-19 Dealmaking: The “Material Adverse Effect” Clause. One component of these evaluations will certainly be whether a public health crisis, such as COVID-19, is sufficient to trigger a material adverse effect clause and permit a buyer to terminate a transaction in anticipation of deterioration of the target’s business and financial performance due to the pandemic. – Read More on TFL
4. DTC brands are rethinking their ‘never-go-on-sale’ rule: While some direct-to-consumer startups have reported that their online sales have tripled or doubled since the start of the pandemic, not every retail company is benefitting from the e-commerce gold rush, and as a result, some are doing something they swore they never would before: offer a sale. – Read More on Modern Retail
5. On the Eve of New York Fashion Week, What’s Next? “There will probably be a separation between the brands that are really well-funded and use those shows as an amazing marketing moment and theater, and smaller brands like mine, which will continue to focus on creating a connection with product through a cultural moment. And I think it’s good. It forces all brands, big and small, to get more creative about how to reach the customer.” – Read More on the New York Times
6. Name Your Brand with a Global Audience in Mind: The longer you expect the brand name to stay in global circulation, the more careful you’ll need to be with selecting a name that takes international considerations into account. Are international customers contributing a significant percentage of revenue today? Do you expect that percentage to increase in the future? If so, you’ll definitely want to consider other markets in your decision-making process. – Read More on HBR
7. How to Make Political Merch as Buzzy as a Fashion Drop: Working with designers like Prabal Gurung, Proenza Schouler and Thom Browne, the Biden/Harris campaign has created a way for voters to acquire “a piece of the campaign.” It is “a way to attract different voters,” said Meaghan Burdick, senior advisor for the Biden campaign, which worked with 19 American designers to create a collection of shirts, hoodies, hats, totes, one very stylish face mask, and more. – Read More on Harper’s Bazaar
1. Tiffany Has Other Would-Be Buyers But Doesn’t Really Need Them: “Tiffany is quite a solid company on its own with relatively low debt levels and the possibility to both weather the crisis and finance its growth,” said Jelena Sokolova, an analyst at Morningstar. “It is also one of the few established global luxury jewelry names.” – Read More on Bloomberg
2. A California Law Was Supposed to Give Uber Drivers New Protections. Instead, Comedians (and Journalists) Lost Work: When California legislators passed the high-profile labor law last year, they said it would increase protections for laborers by classifying certain freelancers as employees, instead of independent contractors, the law, known as AB-5, would make these workers eligible for health insurance, paid time off and other benefits—if their roles included tasks that are part of the normal course of a company’s business, among other requirements. – Read More on the Wall Street Journal
3. RELATED READ: What Does California’s “Gig Worker” Law Mean for the Fashion Industry? While most fashion brands maintain staffs of traditionally-classified employees, many brands “lean on freelancers to get products designed, made, and sold. Many brands and companies bring in freelancers in a permalance scenario,” essentially treating these individuals “as employees but without benefits, or job security.” – Read More on TFL
4. The World’s Most Esteemed Fashion Houses Now Have Workshops That Will Repair Your Stuff: “We like to think that this is a sort of lifetime guarantee for our clients,” Cucinelli says. While the service has been available for decades, he says the past few years have seen notable growth. In 2019, the company estimates it performed 5,000 repairs for its global clientele. – Read More on Robb Report
5. Le Drian within his rights to intervene in LVMH-Tiffany deal: French Finance Minister Bruno Le Maire said Foreign Minister Jean-Yves Le Drian was within his rights to intervene in LVMH’s plans to back out of a takeover of U.S. jeweller Tiffany. Others are slamming LVMH for “hiding behind the French government” in an attempt to potentially “see if they can get Tiffany at a lower price.” – Read More on Reuters
6. The luxury sector is going to be hard hit for years, says former LVMH exec: The lack of global tourism is “the biggest issue which doesn’t get talked about enough as a huge portion of luxury, especially in the U.S. and in Europe,” Brown explains. “The tourism industry has decimated [it]. The Tiffany flagship on 57th Street alone accounted for 10% of their total global sales, and you know that store is closed.” – Read More on Yahoo
1. Even a Tiffany Discount Comes with a Cost: Renegotiate the price of LVMH’s pre-COVID deal to acquire Tiffany might not be worth the reputational damage, particularly if there is a lengthy court battle between the two sides. Shares in LVMH have taken the developments in their stride so far. But for some investors, if they believe he really doesn’t want the deal at all, Arnault’s move might be read as a worrying signal about the strength of LVMH and the future of luxury. – Read More on Bloomberg
2. Lululemon’s Sales Rise as Athleisure Demand Persists: The company’s online business increased by 157% in the period, accounting for 61% of overall sales compared with 25% in last year’s second quarter. Even as steep declines in bricks-and-mortar traffic continue to batter retailers, Lululemon has benefited from the shift to online shopping given its focus on activewear and loungewear as well as its developed e-commerce business. – Read More on the Wall Street Journal
3. Can luxury brands meet the needs of the new consumer? 60% of Gen Z & Millennials say collaborations increase their willingness to buy a product. Luxury brands have also adapted their pricing strategy to capitalize on young consumers behaviors, by releasing more readily-accessible products, such as the Gucci ‘Instagram-ready’ £90 socks, or £170 phone cases. – Read More on the Drum
4. Would you spend $10,000 on a virtual dress? Gucci is betting on it: “The virtual world is creating its own economy. Virtual items have value because of their own scarcity, and because they can be sold and shared.” (To wit: Someone recently dropped $2,400 on a pair of virtual sneakers on a mobile game called Aglet; another spent $9,500 on a digital dress that only exists on Instagram.) – Read More on Fast Co.
5. RETRO READ: With the Video Game Market on Track to Reach $300 Billion, Luxury Brands Want to Make Real Money from Virtual Clothes. The video game segment is estimated to reach a whopping $300 billion by 2025 with a portion of those revenues inevitably coming from sales of video game-related “downloadable content and micro-transactions,” i.e., ones where players purchase virtual goods, such as clothing – or in gamer-speak, skins – for their characters. – Read More on TFL
1. If Tiffany Gets Left at the Altar, It Will Need a Bigger Web Strategy: “Luxury is about being seen wearing certain products, including jewelry,” said Neil Saunders, a managing director of research firm GlobalData PLC. “As people stay home more, the need for purchasing these items has dissipated.” – Read More on the Wall Street Journal
2. Urban Outfitters Navigates Inventory Challenges Amid Pandemic: Lowering inventory levels relative to sales—for example, by ordering fewer goods from suppliers—is key to protecting the company’s finances and reducing the amount of cash trapped in operations, Mr. Conforti said. – Read More on the Wall Street Journal
3. Bankrupt retailers face a new hurdle: Getting rid of inventory. Deep discounts and liquidation sales are no longer enough to lure customers. Liquidation firms say they’ve changed the way deals are structured. Instead of paying retailers for their inventory upfront, as has long been the norm, they have shifted to a fee-based model where the retailer gets a portion of the proceeds after the sale is complete. – Read More on the Washington Post
4. Changes in Luxury Retail And Brand Collaboration in the Post-Covid-19 World: Luxury brands are known to control distribution (especially during uncertain times); therefore, visibility is a key driver when stores are closed and when they start to open. – Read More on Forbes
5. H&M Says It’s Not Working With Any Garment Factories in Xinjiang: Swedish retailer Hennes & Mauritz AB says it’s not working with any garment factories in the Xinjiang region of China. On Tuesday, the Trump administration said it was banning imports from three companies in Xinjiang over Beijing’s alleged repression of Uighur Muslims. It also plans to add curbs on six more firms and target cotton from the area. – Read More on Bloomberg
6. Peter Do’s ‘true luxury’ wardrobe staples for women ‘tired of trendy’ give label head start on fashion’s repositioning after Covid-19: “Everything is designed by us and done by us, so if something comes up it’s very easy to adapt and make things work, whereas at bigger brands there are so many layers you have to go through. We’re more flexible.” – Read More on SCMP
1. Burberry Plans Ethical Luxury Investment: Burberry Group Plc is offering a touch of luxury to ethical investors. The trench-coat maker intends to sell a sterling sustainability bond, as the socially responsible debt market increasingly grows beyond utilities, banks and governments. Companies in the industry have tapped ethical investors to help pay for projects. Pradaraised a sustainability-linked loan last year, while VF Corp. has sold green bonds. – Read More on Bloomberg
2. Shopify, Suddenly Worth $117 Billion, Is One of the Biggest Pandemic Winners: Millions of small businesses have had to adapt to a world where online sales abruptly jumped to levels that weren’t expected for years. U.S. e-commerce sales surged 37 percent to $200 billion in the second quarter. Big brands have long used Shopify’s technology to sell directly to consumers. During the pandemic, it has been small-business owners, however, that have given the company a boost. – Read More on the Wall Street Journal
3. Luxury brands must be human first: “It is important to emphasize the value behind luxury goods,” says Filip Libal, CEO of Worldwide Partners agency Proboston, based in Prague. “Luxury goods no longer serve as a demonstrative status symbol as they once did. Rather, they now showcase a way of preserving value, an investment.” – Read More on the Drum
4. Fendi Selects Kim Jones to Replace Karl Lagerfeld: Mr. Jones will be responsible for the haute couture, ready-to-wear and fur collections for women, Fendi said in a statement. He will also maintain his current position as artistic director of Dior Men in Paris. – Read More on the New York Times
5. Now-stalgia: why fashion is going back to the future. “Nostalgic content comprises a big portion of what resonates well with viewers in 2020,” Abraham says. “It’s almost like a new form of expression, creating a repository of images of significance or inspiration in a sort of modern day form of scrapbooking. We have social media: Instagram, Tumblr, Pinterest, Twitter to thank for that.” – Read More on the Guardian
6. RETRO READ: As Nostalgia Reigns Supreme on Instagram, It’s Driving Demand Amongst Consumers. The push amongst some of the web’s most well-known re-sale sites to stock throw-back pieces, and the rate with which these items are selling, is also indicative of a larger moment. Rati Sahi Levesque, chief merchant of The Real Real, told WWD late last year, “Nineties Dior slipdresses are flying out. Manolo Blahnik mules are gone. It feels like it’s a little more about the iconic pieces from a designer.” – Read More on TFL
7. Beauty Stocks Face New Reality Amid Coronavirus Pandemic: The coronavirus pandemic is changing the face of the makeup business, but sales are expected to bounce back once there is a vaccine. However, with no clear end date to coronavirus restrictions in sight, makeup sales are likely to remain depressed and will continue to weigh on the results of beauty companies. – Read More on the Wall Street Journal
1. Welcome to Your Bland New World: Why do disruptive startups slavishly follow an identikit formula of business model, look and feel, and tone of voice? Because it works, sort of. What makes a brand a bland is duality: claiming simultaneously to be unique in product, groundbreaking in purpose, and singular in delivery, while slavishly obeying an identikit formula of business model, look and feel, and tone of voice. – Read More on Bloomberg
2. RETRO READ: Blanding – What Is It, How Did We Get Here and What Does it Mean Going Forward? As part of a larger trend in branding, or better yet, blanding, a growing number of high fashion and luxury brands – and other consumer goods and tech companies, as well – are looking to spartan logos, which are “designed not to stand out at all, but to blend in.” – Read More on TFL
3. RELATED READ: How Can You Protect Branding That Barely Even Exists? Minimal branding does not mean non-distinctive branding. Consider the logos of Chanel and Calvin Klein, for example. The companies’ branding is clean and streamlined, and it is replicated across the product lines (i.e., on beauty and fragrances, as well as on ready-to-wear and accessories) and across media channels, working on the assumption that repeated customer exposure creates recognition, which builds reputation, which generates sales. – Read More on TFL
4. Neiman Marcus Approved to Exit Bankruptcy After Critic’s Arrest: The luxury retailer is poised to come out of bankruptcy having shed $4 billion of its more than $5 billion debt load. Neiman will have new owners, including Pacific Investment Management Co., Davidson Kempner Capital Management LP and Sixth Street Partners LLC. Pimco will be the largest shareholder, controlling three of the company’s seven board seats, according to court records. – Read More on the Wall Street Journal
5. The pandemic is changing the future of fashion and shopping: The pandemic’s role as an accelerant can be seen and felt across the entire fashion and beauty landscape. “COVID has made us speed up like five to 10 years.” – Read More on the LA Times
6. The Fashion Industry’s Ties to Forced Labor, by the Numbers: One in five – that’s roughly how many cotton garments in the global apparel market include cotton or yarn that can be traced back to forced labor in the Chinese province of Xinjiang, according to End Uyghur Forced Labor, a human rights coalition. – Read More on Marker
1. Can Quotas Fix Diversity? These Major Companies Hope So: Some of the country’s biggest companies have set targets to make up for a lack of Black workers. Fashion house Ralph Lauren Corp., for instance, said it aims to make 20% of its global leaders people of color, including Black, Asian and Latino workers. – Read More on Bloomberg
2. Retail Eviction Proceedings Pick Up as Economy Restarts: Landlords said they have modified tens of thousands of leases over the past few months, including deferrals or discounts in exchange for lease extensions or other concessions, such as the removal of clauses that prohibited certain types of tenants in the neighboring space, such as direct competitors or other uses of common-area space. But for some, negotiations reached a stalemate and landlords said they have no choice but to resort to litigation. – Read More on the Wall Street Journal
3. The fashion world looks to China: The fewer middlemen involved, the less grey-market activity there is, and the more control brands have over how their goods are presented and sold. See Nike, for instance, which recently slashed the number of retailers selling its shoes. No more Jordans on Zappos. – Read More on Axios
4. Retailers are seeing app downloads surge: But, there’s a risk that app usage may start to decrease once shoppers feel more at ease shopping in stores again. The retailers who will get the most out of the current increase of app downloads are the ones who offer enough unique services through it that will convince shoppers to use it regularly. – Read More on Modern Retail
5. Beauty Stocks Face New Reality Amid Coronavirus Pandemic: Makeup sales were already softening for about the past two years partly because of some consumers’ increasing preference for a more natural look. According to research firm Mintel, U.S. retail sales of color cosmetics are projected to be down 10.6 percent in 2020. – Read More on the Wall Street Journal
6. Demand for luxury vehicles is returning to normal: Speaking at the launch of the new Rolls-Royce Ghost on Wednesday, Torsten Muller-Ottos told the BBC that demand is now “more or less back to normal” in Asia, Europe and the Middle East. – Read More on CNBC
1. Chinese Shoppers Splash on Luxury Goods, but Still Won’t Eat Out: Bored after months of strict social distancing measures and unable to vacation overseas, wealthy Chinese consumers are seeking comfort in retail therapy. This bodes well for dozens of luxury goods makers whose growth was fueled by China’s increasing affluence in the past decade. But these spoils are not shared by mass-category consumer products. – Read More on Bloomberg
2. Let’s Stop Pretending We Need New Clothes Every Season: People aren’t buying as much clothing right now because of the pandemic, and brands have to adjust to a coronavirus-induced plunge in sales. But in this radical shift of a cycle that has been spinning and overproducing for decades, fashion consumers — who are all about doing the most — have an opportunity to do so much less. – Read More on InStyle
3. Designers—From Joseph Altuzarra to Virginie Viard—on the Future of Creating Fashion: “Maybe certain things don’t have to be so available for everybody everywhere; maybe we localize things and are less global with what we do. Having diversity in the product as well—that’s important. With most brands today, you print a logo on a hoodie, and there you go. We kind of got over it. It’s so 2015. Fashion can’t be based on that—there is so much more we can do.” – Read More on Vogue
4. From Bergdorf’s to Farfetch, 10 Retailers on the Future of Buying Fashion: “What we do as a [fashion] industry is create beauty and magic. We tell a story that people want to be a part of—and now we’re telling that story again and again, but it doesn’t sound fantastic anymore. It sounds like a broken record. We’re pushing things on them that they don’t necessarily need.” – Read More on Vogue
5. Slow Fashion for the Instant Gratification Generation: Retailers have been in an ongoing race to keep up to speed with the new generation of digitally savvy customers used to getting everything with a mere click. Now, brands and retailers alike are turning to the pre-order model, as customers are learning to wait longer for a luxury purchase. – Read More on WWD
6. Luxury Goods Sparkle In Retail Comeback: “The pent-up demand from nearly two months of lockdown between February-March likely led local shoppers to purchase more aspirational brands than mass brands,” said Catherine Lim, a Singapore-based Bloomberg Intelligence analyst. “Consumers are definitely looking to treat themselves following the scare from the outbreak.” – Read More on PYMNTS