Clockwise from Top.
Q1 Results
The big luxury players are starting to report their Q1 results, and there was one big outlier.
Kering was down 11% vs LY driven by extremely poor sales at Gucci (down 21% vs LY). New creative director Sabato de Sarno’s collections have not (yet) been a commercial hit, though changing the brand away from its former maximalist aesthetic towards a subtle, “quiet luxury” look will certainly take time. The group expects Gucci sales to turn around by the end of the year.
Prada saw strong growth year over year, driven by a turn around in China as well as it-brand of the moment Miu Miu. And Hermès also saw strong sales out of China, seeing worldwide sales jump 17% vs last year.
The strength of Prada and Hermès is China is in contrast to the poor results in that region from both Kering and LVMH. As it has grown into the largest luxury market in the world, quarterly results are increasingly dominated by how well a brand is able to perform in China.
Turning 80
Michèle Lamy is the legendary wife of Rick Owens, one of the most iconic and sui generic designers in the business. She is a designer in her own right, and she just turned 80. To mark the occasion, she hosted an all night rave at an abandoned warehouse outside of Venice.
The Owens diaspora assembled from all over the globe:
Collecting the Lamy fans and the Owens heads on the Lido in the middle of the night is sort of like recalling the Avengers to a convention in Middle America. Which is to say, throughout my journey from New York to Venice, I could pick out the black-clad guests, Geobaskets on the plane, Bauhaus jackets in the train station, like beacons among the streamlined corpo-casual wardrobes of the international elite. Here’s a guy at 8 AM at Milano Centrale in head-to-toe Rick Owens, three silver carabiners jangling from his waistband. Here’s another on the ferry to the Lido at noon in a backwards Rick Owens baseball cap and Erewhon tote. To be a part of the Rick-Michèle clan is to never really be alone, a pair of Kiss boots or long beige drawstrings signaling kinship across all borders.
At 3AM, the local “kids” - students from the surrounding Venezia area - were admitted, with late night vaporetto’s ferrying attendees home.
Matches Administration
The gruesome details of the Matches bankruptcy are starting to become public. In particular, we know now what brands are getting stiffed the worst. As unsecured creditors, these vendors are unlikely to receive any payment at all despite shipping product to Matches.
Swedish label Toteme is the brand owed the most by Matches, according to the administrators report, with a debt of almost £1m. Burberry, Gucci and Max Mara are each owed about £500,000.
Well-known British labels are also on the hook. Paul Smith and Samantha Cameron’s Cefinn are both owed more than £100,000 while Anya Hindmarch and Joseph are owed more than £200,000 each.
That Toteme, a small-ish Swedish brand with only 13 boutiques worldwide, is owed double what brands like Gucci are owed, is not great for them. One hundred million pounds is probably a substantial amount of business for them, though probably is not big enough to bankrupt them.
And the fact that very well established brands like Burberry or Paul Smith are on this list just shows why luxury brands continue to pull back on their wholesale distribution in favor of their own retail networks.
The full administrator’s report is here.
Links.
Why Members Only Clubs Are Everywhere
Tiny electric trucks are coming to your bike lanes
The diminishing returns of having good taste
Equinox’s $40K/yr membership program
Whatever happened to 3BR apartments?
<3
Raquel & Chris