Luxury, Retail and FMCG News & Trends: July Week 3

Luxury, Retail and FMCG News & Trends: July Week 3

Luxury, Retail and FMCG News & Trends: July Week 3

1. Market Trends and Regulations

i. Luxury’s New Handbag Strategy: Pricing, Smaller Selection and Diversification

The challenges the luxury market has faced since the end of 2023 have prompted brands to re-evaluate their strategies, particularly in the leather accessories category.

  • Price Hike: To counter the market slowdown, many luxury labels have increased prices for their leather goods, focusing more on high-end products and reducing the range of small leather accessories and entry-level items. China sees the highest retail prices for luxury handbags, especially for iconic handbags. Meanwhile, the pricing in Japan and South Korea remains relatively stable, indicating growth potential in the Asia Pacific (APAC) region. In the USA, prices have risen between 12% and 22%. The study highlights a general trend of rising prices across Europe, Asia, and America between 2022 and 2024.
  • Narrower Selection: The selection of small leather goods also became narrower as brands now target wealthier consumer segments.
  • Diversification: Luxury brands are also diversifying their iconic handbags, offering multiple versions in different sizes and materials. These often come as limited editions aimed at enhancing exclusivity and profitability. The popularity of mini handbags continues to grow, with notable increases in their presence within collections, driven by their profitability due to lower material requirements.

Read the full article about luxury brands’ strategy for handbags.

 

ii. Apparel and Textiles with PFAS to be Banned

From January 1, 2025, selling apparel and textiles containing PFAS will be illegal in New York and California due to their toxic nature and potential to cause cancer. The ban on PFAS affects water and stain-resistant clothing, which has been used since the 1950s. New York’s law initially targeted regular apparel but has since extended to outdoor gear, with further restrictions coming by 2028. California’s AB 1817 act covers all textiles, including shoes and accessories, and requires rigorous testing and compliance. Brands must provide Certificates of Compliance to prove their goods are PFAS-free. Testing labs are expected to become busier as major retailers already demand these certificates. Brands face challenges managing existing inventory and complying with EPA requirements to report PFAS usage since 2011, with deadlines in 2025. Alternatives to PFAS have been found, but they may affect the performance of water-repellent clothing.

Read the full article about the PFAS law.

 

2. Offline Business Moves

i. LVMH-Backed L Catterton Allegedly Interested in Buying Mattel

L Catterton, a private equity firm supported by luxury brand LVMH, has made an acquisition offer to Mattel, a toy maker known for Barbie and Hot Wheels. This could prompt other suitors, such as rival Hasbro, to consider making their own offers. However, there’s no certainty that Mattel will pursue a sale. Mattel’s spokesperson expressed confidence in the company’s current strategy and potential for long-term value as an independent entity. Following the news, Mattel’s shares rose significantly, while Hasbro’s shares also saw an increase.

Mattel has been focusing on media partnerships to counter weak toy demand despite a successful Barbie movie. The company reported a smaller-than-expected loss for the first quarter, aided by cost management amidst weak sales. Activist investor Barington Capital has urged Mattel to consider changes, including exploring options for its brands and altering its leadership structure.

Read the full article about L Catterton’s interest in Mattel.

 

ii. L Catterton Buys Stake in Value Retail to Target Chinese Retail

LVMH-backed private equity firm L Catterton acquired a significant stake in Value Retail, the owner of Bicester Village, from UK shopping centre landlord Hammerson for £1.5 billion. This deal provides £600 million in cash to Hammerson, allowing it to focus on its core assets. Value Retail operates nine luxury outlets in Europe, including Bicester Village, and two in China. Value Retail’s European outlets are popular with Chinese tourists. L Catterton plans to leverage its operational expertise to strengthen its presence in the Chinese travel retail market and attract more visitors. This acquisition also has potential synergies with LVMH’s luxury travel retailer, DFS, which caters to Chinese tourists globally. For Hammerson, selling its stake in Value Retail is part of its strategy to focus on urban retail assets and improve financial stability. The deal will help Hammerson reduce debt and invest in key properties like the Bullring in Birmingham and London’s Brent Cross.

Read the full analysis of L Catterton’s stake in Value Retail.

 

iii. Coach Forays Into Metaverse

American fashion brand Coach is partnering with Roblox and Zepeto to bring its Spring 2024 collection into the digital space. This move is part of Coach’s “Find Your Courage” campaign, which encourages self-expression and identity exploration through themed digital wearables. The campaign features a virtual human named Imma, who embarks on a journey of self-discovery across five themed worlds, three of which (Colourful World, Summer World, and Floral World) will be available on Roblox and Zepeto starting July 19. These platforms allow users to style their avatars with Coach items, participate in fashion competitions, and engage in scavenger hunts to win virtual Coach pieces. This initiative aims to make high-end fashion more accessible and interactive, targeting Gen Z, who heavily influence their real-world fashion choices based on their avatar styles.

Read the full article about Coach’s entry into Metaverse.

 

iv. Dolce&Gabbana Considers Opening to New Investors

Dolce&Gabbana is considering opening its capital to new investors, potentially through a stock market listing or other financial methods, as stated by CEO Alfonso Dolce. This move aims to secure financing without compromising the company’s ethical values and growth. Although a stock market listing is a possibility, it is not currently a priority. The company’s revenue for the 2023-2024 fiscal year grew by 17%, reaching 1.871 billion euros. Dolce&Gabbana plans to open 12 new stores in the U.S., emphasizing the importance of the American market, which, along with Canada, accounts for 28% of its turnover.

Read the full article about Dolce&Gabbana’s opening to new investors.

 

v. Dolce & Gabbana to Nurture Designer Susan Fang

London and Shanghai-based Canadian Chinese designer Susan Fang was selected to join Dolce & Gabbana’s emerging designer programme. This initiative, which has previously supported designers like Miss Sohee and Matty Bovan, aims to nurture young creative talents. With collaboration from stylist Katie Grand, the Shanghai Fashion Designers Association, and the Camera Nazionale della Moda Italiana, Dolce & Gabbana will assist Fang in creating and presenting her new collection. This support includes providing materials and organising a catwalk showcase during Milan Fashion Week in September. Fang has previously collaborated with Victoria’s Secret and & Other Stories.

Read the full article about designer Susan Fang.

 

vi. China’s Largest Perfume Brand Management Firm to List in Hong Kong

Eternal Beauty Holdings Limited, the largest perfume brand management company in mainland China, Hong Kong, and Macau, has applied for an IPO on the Hong Kong Stock Exchange. Over 80% of Eternal Beauty’s revenue comes from perfume products, and it manages 63 brands, including Versace and Xerjoff. The funds raised will support brand development, acquisitions, and expansion of retail channels. The company has a robust omnichannel sales network, contributing to its stable revenue growth and strong market position in the perfume industry.

 

vii. Kao Launches First Global Flagship Store in Shibuya

Japanese beauty conglomerate Kao launched the flagship store for its make-up brand Kate in Tokyo’s Sakura Stage shopping centre. The 126-square-foot store features AI-powered advisors and 108 shades of eyeshadow testers. It deviates from Japan’s traditional ‘kawaii’ aesthetic, opting for an edgier design with graffiti by street artist Kazzrock to emphasise its “urban mood.” The store aims to challenge conventional beauty standards by offering virtual and digital experiences. Located in Shibuya, it targets young beauty shoppers and tourists, offering a full range of Kate cosmetics and multilingual consultations. Kate, established in 1997 and acquired by Kao in 2006, is primarily sold in the APAC market.

Read the full article about Kao’s first flagship store.

 

4. E-Commerce Business Moves

i. Taobao Launches Apparel Global Free Shipping Plan

Taobao recently launched the “Global Free Shipping Plan for Major Apparel”. The initiative will first cover countries such as Singapore, Malaysia, and South Korea. It is expected to expand from Asia to Europe by the end of this year and eventually achieve global free shipping. The platform will provide merchants substantial overseas shipping subsidies, enabling direct free shipping to international consumers. Merchants do not need to open new stores or make special settings for their products. By joining the plan, they can display and sell their products globally with consistent pricing for domestic and international markets. Merchants retain control over pricing and inventory and only need to ship orders to Chinese consolidation warehouses without worrying about cross-border logistics, returns, refunds, or shipping insurance costs.

Read the full Chinese article about Taobao’s apparel free shipping plan.

 

ii. Hong Kong to Launch First E-Commerce Festival

Hong Kong will host its first online shopping festival in August, targeting mainland Chinese consumers. The event, running from August 1 to 31, will feature over 230 Hong Kong brands on major Chinese e-commerce platforms like Taobao, Xiaohongshu, JD.com, Pinduoduo, and Douyin. The Hong Kong Trade Development Council (HKTDC) organised the festival to help Hong Kong businesses break into the mainland market amid an economic slowdown in China. The festival will offer significant discounts and leverage the influence of top mainland influencers and celebrities to boost sales.

Read the full article about Hong Kong’s first e-commerce festival

 

4. People Moves

i. Fashion: LVMH, TF, Sergio Rossi, Bottega Venetta and Allbirds

LVMH: LVMH announced new leadership for its Hublot and TAG Heuer brands as part of a strategy to enhance its watches division.

  • Julien Tornare, the current CEO of TAG Heuer, will take over as CEO of Hublot. Tornare replaces Ricardo Guadalupe, who will become the honorary president.
  • Antoine Pin, the general manager of Bulgari Horlogerie, will succeed Tornare as the CEO of TAG Heuer.

These changes, effective September 1, are intended to support the division’s growth under Frédéric Arnault’s leadership.

Tom Ford: Peter Hawkings is stepping down as Creative Director of Tom Ford, a role he assumed just over a year ago, though he has been with the brand since its inception under Tom Ford. The announcement was made in a brief statement, with gratitude expressed by Guillaume Jesel, President and CEO of Tom Ford and Luxury Business Development at The Estée Lauder Companies, and Lelio Gavazza, CEO of Tom Ford Fashion. Despite mixed reviews for his collections, Hawkings maintained a high level of celebrity attendance at his shows. The Tom Ford fashion business reported €65 million in sales for Q1, mainly in the US. The company plans to announce a successor soon, with the SS25 collection set to be presented in Milan this September.

Sergio Rossi: Italian luxury footwear label Sergio Rossi, now owned by the Chinese Lanvin Group, appointed Paul Andrew as its new creative director effective July 23. Andrew, a distinguished British designer with over 20 years of experience in high-end fashion, has an impressive resume that includes stints at Alexander McQueen, Narciso Rodriguez, and Salvatore Ferragamo, among others, and he also owns his own shoe brand. Sergio Rossi’s collections were previously created by its in-house design team, and from 2022 to early 2024, Greek influencer Evangelie Smyrniotak served as the artistic director. This leadership change aims to rejuvenate the brand.

Bottega Venetta: Bottega Veneta, known for its leather products and signature intrecciato weaving technique, is appointing Barbara Zanin to the new role of head of crafts and heritage. Zanin, a long-time veteran expert who joined in 1998, will work with Creative Director Matthieu Blazy and CEO Leo Rongone to preserve and promote the brand’s artisanal skills. She will oversee artisans at the Montebello atelier, expand the brand’s archives, and be an ambassador for its craftsmanship. This move underscores Bottega Veneta’s focus on its leather accessories, especially as the luxury market slows down. Zanin also founded the brand’s vocational school to teach these techniques.

Dior: Dior men’s footwear designer Thibo Denis announced his departure from the fashion house after a tenure of six years. Denis joined Dior in March 2018 when Jones became the artistic director of Dior Men’s. Together, they created iconic footwear, such as the Dior x Jordan 1 Retro High, which now sells for over $20,000. Denis also showcased some of his notable designs, including the Dior x Birkenstock clogs, B9S and B22 sneakers, and the engineer boot clogs from the summer 2025 collection.

Allbirds: Allbirds appointed Jason Israel as the vice president of design, effective June 1. Israel has previously served at Salomon, The North Face, and K2 Sports. His entry comes as Allbirds aims to rejuvenate its product lineup and brand image and drive growth by focusing on innovation and storytelling. The company is undergoing a transformation plan initiated in March 2023 to reverse its financial decline, which includes leadership changes and cost-cutting measures.

Read the full article about the new CEO’s of LVMH’s watch brands.

Read the full article about Hawkings’s departure from Tom Ford.

Read the full article about Paul Andrew’s appointment.

Read the full article about Barbara Zenin’s appointment.

Read the full article about Denis’s departure from Dior.

 

ii. Beauty: Estée Lauder and Pechoin

Estée Lauder: Estée Lauder promoted Akhil Shrivastava to the role of Chief Financial Officer, effective November 1. Shrivastava will succeed the retiring Tracey Travis, who will stay until June 30, 2025, to ensure a smooth transition. Shrivastava, who joined Estée Lauder in 2015 and previously worked for Procter & Gamble.

Pechoin: Jiang Ligang, the former Chief R&D Officer of Proya, has joined Pechoin as their new CTO. His responsibilities will include overseeing the entire technology segment of the company. Jiang has extensive experience working at Mary Kay and Estée Lauder before joining Proya in 2008, where he significantly contributed to the brand’s success with innovations like bubble masks. After leaving Proya in 2022, he ventured into entrepreneurship and held a leadership position at Huarui Bio. Industry experts believe Jiang’s addition to Pechoin will enhance the company’s technological innovation and product differentiation, strengthening its unique brand image and increasing its international competitiveness.

Read the full article about Akhil Shrivastava’s promotion to CFO.

Read the full Chinese article about Pechoin’s new CTO from Proya.

 

iii. FMCG: Wahaha

Wahaha: Kelly Zong Fuli, heiress and general manager of China’s Wahaha Group, retained her position after initially tendering her resignation due to shareholders’ distrust in her leadership. Following “friendly negotiations,” the company apologised for the media uproar caused by her resignation. Zong, who took charge after her father’s death, faced opposition from shareholders regarding her plans for an IPO. Wahaha, once a leading soft drink producer, has seen a significant decline in market share due to competition, notably from Nongfu Spring. Despite challenges, Zong is trying to revive the brand by appointing a new ambassador, increasing TV commercials, and expanding online sales.

Read the full paid article about Kelly Zong’s return to Wahaha.

 

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Image Sources:

  • South China Morning Post
  • Fashion Snap
  • Sergio Rossi
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