The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Hello BoF Professionals, your exclusive 'This Week in Fashion' briefing is ready, with members-only analysis on the key topic of the week and a digest of the week's top news.
For years, New York Fashion Week was in decline, long on days and short on relevance. Critical favourites like Joseph Altuzarra and Thom Browne decamped for Paris, while other mainstays, including Alexander Wang and Rodarte, adopted less conventional ways of showing their clothes. Some thought Raf Simons' Calvin Klein reboot would bring fresh energy to New York. It did, for a while, but the experiment ultimately proved disastrous. Calvin Klein has abandoned the runway altogether, as has DKNY, which is now owned by a licensing firm.
The decline of fashion week reflected the state of American fashion at large: the old model of selling ready-to-wear to department stores is broken, especially if you don't have a strong accessories business. And while the timing of New York Fashion Week once gave it a leg up on setting the aesthetic agenda, some designers here have more recently resorted to just picking up on the trends from last season's European runways. No wonder the international press increasingly stayed away (with editors flying in and out just for the shows of key advertisers) and buyers waited until Paris to spend their budgets.
But after years of incremental efforts to bolster New York Fashion Week, there was a real shift this season, under the watch of newly appointed Council of Fashion Designers of America (CFDA) Chairman Tom Ford, who wants New York to play on the global stage once again.
To kick off the week, Ford hosted a dinner at fashion haunt Indochine on Friday night, enabling young designers to mingle with international press. The vibe was old school, but not dated, and the designers felt seen in a way they often haven't in the past.
Ford was also strict about keeping the schedule tight: Friday night to Wednesday afternoon was the window of opportunity, and everyone who wanted to be seen was obligated to wedge themselves into these five days. The tweak was impactful. While the days were long, and the most high-profile shows happened early in the morning and late at night — meaning sleep was scarce — the schedule was expertly choreographed.
Designers also did the right thing by focusing on experience. Live musical performances were plentiful, and labels also made better use of the city, staging events at exciting locations from the Bronx all the way down to Brooklyn's Flatbush.
Brooklyn, in particular, was a big draw. VFiles and Savage x Fenty both tapped the Barclay's Center, a 19,000-seat arena typically reserved for basketball games and pop concerts. And while fringe designers like Telfar, Lou Dallas, Pyer Moss and Eckhaus Latta might be more expected on that side of the river, the establishment was there too. Tory Burch and Michael Kors chose Brooklyn, as did Phillip Lim. Burch told BoF that she had always wanted to show there, while Kors explained that choosing the Navy Yards was something of an ode to his great grandmother, who, as a Lower East Side immigrant, had her sights set on a better life in Brooklyn.
To be sure, it didn't make travel easy, especially for attendees whose first time on a subway platform was at Ford's show, staged on the platform of Bowery Station. But in many ways, the shift makes sense logistically, given that more people live and work downtown than ever before, making Brooklyn less of a trek than it used to be when more fashion publishers were based in Midtown. Plus, it meant a greater variety of venues (and probably some cost-savings).
There’s still a lot of work to be done in New York, of course. There is tension between the CFDA and IMG, the “official” host of New York Fashion Week, which staged several shows outside of the established Friday night-Wednesday afternoon perimeters. And while brands have started to nail the fashion-show-as-consumer-facing-event concept, it’s hard to know how much trade is actually taking place at New York Fashion Week.
At the beginning of the week, Telfar Clemens told BoF that he chose to throw a party in New York and show his collection in Paris, where buyers are spending. As major retailers continue to struggle, it’s hard to imagine their purse strings really loosening up this early in the season.
Ford seems confident that, with a bit of time and further effort, they will. But whatever happens next season, New York Fashion Week provided an example of what London and Milan could also do to keep people interested. Paris is Paris, but other weeks can be something more.
THE NEWS IN BRIEF
FASHION, BUSINESS AND THE ECONOMY
Gucci Pre-Fall 2019 campaign | Source: Courtesy
Gucci looks to set a new trend on carbon neutrality. Luxury's coolest brand is pouring millions of dollars into a programme to become carbon neutral, as scrutiny on fashion's climate impact gains momentum. The Italian company is in the midst of a 10-year plan to slash its emissions in half by 2025, but it said Thursday it will go a step further, paying to mitigate the emissions it can't eliminate across its supply chain in a nod to the seriousness of the current climate challenge. It's a bold move from a company that is positioning itself as a climate leader within the industry.
Hermès remains bullish on Greater China. The French luxury house has said growth in greater China remains rapid despite months of protests in the luxury shopping hub of Hong Kong. A "slight acceleration" in mainland China will offset the impact from store closures in Hong Kong, according to Chief Financial Officer Eric du Halgouet. Hermès reported first-half operating profit of €1.14 billion ($1.26 billion). Analysts had predicted €1.12 billion.
Zara owner Inditex disappoints on profit margin despite strong sales. The world's biggest fashion retailer has reported weaker-than-expected growth in profit margins in the first half of the year, knocking its shares lower. The disappointing margin growth overshadowed strong growth in sales in the first half, which, in stores and online, increased 8 percent in the first five weeks of the latest financial period. Inditex reported net profit of €1.55 billion ($1.66 billion) for the six months from February 1 to July 31, on sales up 7 percent at €12.82 billion, broadly in line with analysts' expectations.
Neiman Marcus secures $100 million facility to increase liquidity. The luxury retailer completed a $100 million first-in-last-out facility (also known as a FILO) that it will use to pay down the company's revolver. Neiman Marcus plans to use proceeds from the FILO to reduce its revolving credit facility and create $100 million in liquidity the company can access in the future. Neiman Marcus is under pressure as shoppers go online instead of shop in department stores. The retailer said same-store sales fell 1.5 percent in its fiscal third quarter from a year earlier.
Hudson's Bay loss widens on "hyper-promotional" retail environment. Hurt by store closures, deep discounts and declining sales at the retailer's name brand, Hudson's Bay Co reported a wider second-quarter loss. The group said its luxury department store Saks Fifth Avenue felt the biggest effect from a "hyper-promotional" retail environment. Total revenue in the quarter ended August 3 fell to $1.39 billion from $1.40 billion a year earlier, and net loss from continuing operations widened to $348 million from $78 million a year earlier.
Thailand's Central Retail targets $2 billion IPO in 2020. Central Group, one of Thailand's biggest conglomerates, is targeting an initial public offering of its retail arm as soon as the first quarter of next year, an IPO that could raise around $2 billion. The closely-held conglomerate operates shopping malls under the Central and Central Embassy brands. Outside Thailand, it owns Italian department store La Rinascente, Danish retailer Illum and bought the Big C hypermarket chain in Vietnam in 2016. Central Group plans to consolidate its retail arm operations in Thailand, Vietnam and Italy under a single listed entity.
JD Sports outperforms struggling UK retail sector. Britain's biggest sportswear retailer saw a profit rise that pushed shares up 5.8 percent Tuesday, topping the FTSE 100 index of leading British companies. JD has successfully targeted younger consumers who are driving the athleisure trend. It sells premium ranges from the likes of Nike and Adidas, often using exclusive products to set itself apart from rivals. Executive Chairman Peter Cowgill is confident that JD will achieve full-year market expectations for pretax profit, which currently range from £402 million ($494 million) to £424 million.
THE BUSINESS OF BEAUTY
Glossier cloud paint products | Source: Courtesy
Glossier heads to TV and hires COO. The direct-to-consumer brand is embarking on its most wide-ranging campaign to date – an initiative that will see it broadcast TV advertising for the first time. The "Feeling Like Glossier" campaign, starring seven real-life members of Glossier's community, is set to air exclusively on ABC. Meanwhile, Melissa Eamer has left Amazon after nearly two decades to become Glossier's new COO.
Slick Woods in a campaign for C1V1L, a jewelry line she co-founded | Source: Courtesy
Slick Woods launches a jewellery line that aims to fund minority-owned businesses. The model and Instagram star has partnered with other black creatives to found C1V1L, a direct-to-consumer jewellery line that plans to invest 20 percent of its profits into other minority- and female-owned businesses. With nearly a million Instagram followers, a Calvin Klein modelling career and a signature look — gapped teeth, a buzz cut, tattoos — Slick Woods is one of fashion's most recognisable characters and, in many ways, the face of today's inclusivity movement. C1V1L is the brainchild of Blakely Thornton, a marketer who has worked at Ralph Lauren and Maxim.
Alaïa announces CEO and Richemont head of fashion resigns. The French luxury label has named Myriam Serrano chief executive of the brand, effective earlier this week. Serrano joins the brand from Richemont stablemate Chloé, where she was director of communications and accessories, and replaces Alison Sachs, who has taken on new responsibilities within the luxury group. Both Sachs and Serrano report to Richemont's now former head of fashion, Eric Vallat, who announced his resignation just this week citing "personal reasons." He was promptly named CEO of cognac maker Rémy Cointreau starting December 1.
MEDIA AND TECHNOLOGY
Jack Ma ends 20-year reign over Alibaba. After amassing a $41.8 billion fortune, the former English teacher stepped down as executive chairman of China's largest company on his 55th birthday. His record-breaking rise from a bootstrapped entrepreneur working out of his apartment in 1999 to jet-setting e-commerce mogul is one for the history books, mirroring China's own evolution from technological backwater to the world's No. 2 economy.
Amazon brings Prime programme to Brazil to outflank local rivals. In a country where it has been expanding slowly but surely, Amazon is bringing Prime membership to Brazil in an effort to leapfrog competitors and gain traction. The service will offer free unlimited shipping for about 500,000 products out of the 20 million Amazon currently sells in Brazil, and two day-shipping will be available in 90 cities. Deliveries in other urban centres will take three days or more, the company said.
JD.com makes investment head appointment. China's second-largest e-commerce firm has appointed Jason Hu, a former managing director at Chinese private equity firm CDH Investments, as head of strategic investment to oversee deals both at home and overseas. Hu, who joined the company in late July, was also named vice president, reporting directly to Chief Strategy Officer Jon Liao. The newly created role will beef up JD.com's investment arm which has long been dwarfed by deal teams at bigger rival Alibaba as well as tech peer Tencent.
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