Hello BoF Professionals, welcome to our latest members-only briefing: The Week Ahead. Think of it as your 'cheat sheet' to what everyone will be talking about on Monday.
THE CHEAT SHEET
Activewear-as-Fashion Forcing Change at Nike and VF Corp.
- Nike City Ready women’s line launches in early September
- VF Corp. may sell Wrangler jeans unit as denim sales slide, The Wall Street Journal reports
- Athleisure sales jumped 17 percent to $9.6 billion last year, according to NPD
The ascent of the activewear-as-fashion trend is forcing major changes at some of the world’s biggest fashion companies. Nike, eyeing the success of brands like Lululemon and Outdoor Voices that mix performance and fashion, is introducing Nike City Ready, pitched at women who want to wear the same clothes to the gym, the office and out on the town. While Nike hopes its “performance-first” approach will help it reach $11 billion in womenswear sales by 2020, it's telling that its latest product announcement appeared first on Vogue’s website, above a feature about what Kylie Jenner wore to her 21st birthday party.
Meanwhile, VF Corp. sold $2.7 billion worth of denim last year, but sees a bleak future for reliable if unexciting Wrangler and Lee jeans (the company sold premium jeans progenitor Seven For All Mankind in 2016) in the era of yoga pants. Better to jettison the fading brands now to focus on Vans sneakers and North Face jackets.
The Bottom Line: The moves at Nike and VF Corporation confirm that activewear is no flash in the pan. Watch for more fashion giants to start brushing up on their yoga poses.
"Crazy Rich Asians" Gives Luxury's Best Customers a Global Showcase
- "Crazy Rich Asians" has its US premiere on August 15
- The movie depicts the free-spending ultra rich in Singapore
- Asian consumers drive about half of global luxury spending
We are in the nadir of the summer doldrums, so let’s go to the movies. "Crazy Rich Asians" is generating plenty of buzz, helped by positive early reviews, its milestone all-Asian cast and the eye-popping fashion. Conspicuous consumption is front and centre. The original book (and presumably the film) name-checks European and American luxury houses whose labels are de rigueur among Asia's elite. Author Kevin Kwan, born into a wealthy Chinese family in Singapore, wrote from personal experience, recalling shopping trips to Europe with his mother.
Today, a much wider cross-section of Asian tourists can still be seen lining up outside Paris boutiques, but a growing share of luxury purchases are being made at home and local designers are gaining traction. Brands, which increasingly depend on Asia to drive growth, clamoured to be featured in the movie, with Ralph Lauren reportedly sending a box containing dozens of dresses to the production. Pieces from Giorgio Armani, Salvatore Ferragamo and Chloé also made the cut.
The Bottom Line: "Crazy Rich Asians" showcases some of the conspicuous consumption patterns that have made luxury brands so dependent on the continent's consumers. But beneath the glitzy surface, the landscape is shifting.
American Department Stores Face Off
- Macy’s may report third straight quarter of same-store sales growth Wednesday
- J.C. Penney’s chief executive quit in May; the company reports financial results Thursday
- Nordstrom, also reporting Thursday, is growing at a slower pace than Macy’s
J.C. Penney, Macy’s and Nordstrom are three very different department store chains, but they are all embarking on a period of wild experimentation in the face of growing online competition. So far, only Macy’s is showing consistent results. The company acquired experiential retail pioneer Story, revamped its beauty counter and expanded off-price offshoot Backstage to bring customers back to stores. Even there, it's not clear if it's corporate strategy or the strong economy driving sales.
Contrast that with J.C. Penney, which pivoted toward millennial fashion, confusing the chain's mostly middle-age clientele. Nordstrom falls somewhere in between, as it's making smart moves, such as inviting trendy online brands to sell in its stores, that haven't yet translated into consistent sales growth.
The Bottom Line: Department stores must adapt to survive the e-commerce onslaught, but they risk losing their identities in pursuit of short-term sales gains.
Still Fashion's Most Reliable Season: Back to School
- Parents are expected to spend $15.1 billion on back-to-school clothing and accessories
- Deloitte sees online share of clothing sales rising
- Retailers are holding less inventory but discounts remain the norm
The fashion calendar isn't what it once was. Fewer people buy their wardrobes at the start of each season, and some designers no longer show during fashion week. However, one fashion season remains as rigidly enforced as ever: back to school. The academic calendar forces parents to refresh their children's wardrobe around this time each year, and Deloitte predicts strong spending thanks to a healthy US economy.
Back-to-school is when mall retailers like Gap and American Eagle look to rack up sales, since most parents still prefer to shop in stores to outfit their children for the return to classes. But e-commerce is making inroads even here, and Amazon Prime Day, coming at the start of the back-to-school ramp-up, now steals a bit of retailers’ thunder.
The Bottom Line: Back to school remains a bright spot on brick-and-mortar retail calendars, but it's no panacea for the industry's e-commerce challenge.
COMMENT OF THE WEEK
"Thank you for putting so clearly to me what has been bothering me for so long. After working for more than 10 years as a fashion designer I decided to abandon designing and pursue something that would motivate me to create like fashion once did. In part, I realised, it’s because fashion in the sense of cohesive and artistic storytelling has transmuted into lightning trends in our Instagram feeds!"
— Diego Moura, commenting on "Whatever: How Fashion Lost Its Meaning."
Professional Exclusives You May Have Missed:
- Luxury's obsession with drops: deeper than marketing?
- Brands use the language of science to sell skincare.
- Tips for mastering the in-store experience.
- Anna Wintour addresses those pesky rumours.
- Benefit Cosmetics is an old brand that's managed to stay young.
From Around the Web:
- September issues by the numbers. (New York Times)
- Conservatives love fashion too. (Racked)
- Cosmetics are in, fragrances are out. (Fashionista)
- Fancy.com channels the pop-up model with its first permanent store. (Glossy)
The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to firstname.lastname@example.org.
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