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.
An Earnings Surprise
The fashion industry is entering the thick of earnings season, and for many companies, the results are not going to be pretty. Companies must contend with the war in Ukraine, China’s lockdowns, rising inflation and last week’s unexpected report that the US economy contracted in the first quarter. The news isn’t all bad: that same GDP report showed consumers and businesses have continued to spend through all the disruption, and numerous brands have said in recent months they were able to raise prices without losing too many customers.
This week will provide a good cross section of the industry, with fast fashion’s Boohoo, luxury’s Boss, online retailer Revolve and activewear giant Adidas all reporting financial results. So far, results have been mixed: it was “so far, so good” at LVMH, but Kering reported underwhelming sales for Gucci. Puma and other footwear brands have indicated the worst may be over as far as supply chain troubles, while big tech firms like Shopify and even Amazon are grappling with inflation and tough pandemic-era comps. That’s a bad omen for the fashion start-ups that went public during the pandemic, as investors already skeptical of promises to reach profitability in two or three years may become more vocal if supply chain problems or rising costs push those timelines even further out.
The Bottom Line: Results in the coming weeks should also fuel M&A speculation. Ted Baker, Kohl’s and maybe even Gap Inc. are in play. Will other struggling retailers join that list?
Well Met
The Met Gala is sometimes called the Super Bowl of fashion, and increasingly has the stakes to match the nickname. The importance of the event has grown both for the Met’s Costume Institute and for Condé Nast, which is looking to events as an alternative revenue stream to replace waning ad sales. The Met Gala is the linchpin of that strategy, with Vogue able to line up Instagram and other big companies to sponsor the festivities, brands to buy tables and, starting last year, a livestream to grab some of the ad revenue that once went to E! and other entertainment shows that cover the red carpet. As for what the celebrities will be wearing on that red carpet, expect the usual loose adherence to the theme, which this time is the sufficiently vague “gilded glamour.” It’s a good time for corsets to be back in style.
The Bottom Line: Even the biggest events increasingly struggle to hold onto their audience in a fragmented culture. But as one of the few remaining tentpoles in the fashion calendar, the Met Gala remains immensely valuable to Vogue and to brands, even if overall viewership declines. BoF will have more to say on the subject this week.
The BoF Tech Summit
Technology has infiltrated nearly every aspect of fashion, and it’s only just getting started. Now, emerging frontiers like web3, augmented reality, virtual worlds and digital IDs for physical goods are presenting brands with new opportunities as well as new challenges. BoF will host a series of frank, informative talks covering the ways technological innovation is reshaping business and culture. Guests will hear from Natalie Massenet, who was at the forefront of bringing luxury online when she founded Net-a-Porter two decades ago, and Benoit Pagotto, who is now leading the charge into the metaverse at RTFKT, which Nike acquired last year. Speakers from companies such as Prada, Mango, Coinbase and LanzaTech will also provide their insight on the transformations changing fashion.
- Marc Bain contributed to this item
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