Marketplaces For the Win
Richemont and Farfetch are in “advanced talks” on a partnership that would potentially include a spinoff of Yoox Net-a-Porter
The deal could see Farfetch technology power Richemont stores, and the conglomerate’s brands sold on the online marketplace; Farfetch could also take a minority stake in YNAP
Farfetch reports quarterly results on Nov. 18
A decade-long corporate saga appears to be entering a new chapter. Richemont has spent billions of dollars trying to make e-commerce work for its brands and for Net-a-Porter, which it acquired, spun off in a merger with Yoox and acquired again. Now, the Swiss conglomerate is in talks to effectively cede control of the online space to Farfetch. A deal would end a battle over the future of the online luxury market. YNAP represented the wholesale model, selling luxury clothes and accessories online, but otherwise in much the same way department stores did for much of the last century. Farfetch pitched itself as the future, with its inventory-free marketplace putting a luxury sheen on Amazon’s “everything store” concept.
For a while, the two duked it out for customers and vendors. But for several years, the unmistakable trend has been toward an online shopping experience split between marketplaces like Farfetch and brands’ own websites. Wholesale still has its backers — a VC firm poured $500 million into Saks.com at a $2 billion valuation earlier this year. Still, when even Mytheresa, one of the more successful online wholesale retailers, is working on a marketplace-style “curated platform,” it’s clear where the wind is blowing.
The Bottom Line: The Farfetch as Amazon metaphor only carries so far. Luxury products are not toilet paper or batteries; sophisticated branding, exclusivity, craftsmanship and other factors still matter. There is still ample room for competitors that promise an elevated, curated online shopping experience.
Prada Meets Investors
Prada will release third-quarter results at its Capital Markets Day Nov. 18, where executives will go over the state of the business and outline future plans
Prada’s sales have fully rebounded from the pandemic, and profitability is improving as it relies less on wholesale
Prada has promised to replace virgin nylon with “Re-Nylon” across its merchandise by the end of the year
Prada is not exactly secretive — its founder and co-creative director Miuccia Prada holds plenty of interviews, even turning a 2020 fashion show into a forum to answer fan questions last year. But the brand’s upcoming investor day will offer a rare, top-to-bottom look at the company’s strategy. The event will showcase a brand on the upswing: after a bruising start to the pandemic, sales were up 13 percent in the second quarter of 2021 compared with the same period in 2019. The appointment of Raf Simons as co-creative director last year added a fresh frisson. Profit margins are also improving, after Prada reduced its wholesale business from 37 percent of revenue in the first half of 2019 to just 13 percent today. The latest results will reflect consumers’ response to Simons’ influence on the brand, as well as the continued growth of sportswear, nylon bags and other luxurious takes on casual items. It’s not all blue skies though: like other luxury brands, Prada’s stock took a tumble this summer as China launched its “common prosperity” campaign against income inequality.
The Bottom Line: While chief executive Patrizio Bertelli will be the day’s emcee, his and Miuccia Prada’s son, Lorenzo, will be addressing digital innovation and social responsibility. In addition to an update on the company’s progress in eliminating virgin nylon from its clothes and accessories, the younger Bertelli is seen as a potential successor to the CEO role.
Logos on Logos on Logos
Balenciaga and Gucci will release items from their “Hacker Project” at 74 pop-ups and retail locations worldwide on Nov. 15
The logo-heavy project was first revealed at a Gucci event in April. Future releases, including a Gucci-fied Triple S sneaker, have been teased
Collaborations between megabrands are growing more common, including a team-up between Fendi and Versace in September
After six months of buildup, Kering’s biggest brand and its buzziest brand go on sale at dozens of locations worldwide this week. The products revealed so far include plenty of Gucci bags covered in Balenciaga logos. Gucci appears set to return the favour if Instagram images of a Triple S sneaker covered in double-Gs are to be believed. The brands describe the collection as a commentary on counterfeit culture, a recurrent theme for both brands. The ostentatious logos splayed across popular items like the Triple S are engineered to go viral on social media. It’s certainly a masterpiece of corporate synergy, with red-hot Balenciaga giving Gucci a shot in the arm as the brand struggles to regain its pre-pandemic momentum.
The Bottom Line: It’s easy to find commenters on Instagram begging for an end to the hype collab boom that has taken over luxury fashion. Those critics are in for a long wait; between “Fendace,” Fendi X Skims, Supreme X Tiffany and Balenciaga X Gucci, the era of mega-collaborations is just getting started.
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