The Debrief

Patagonia founder Yvon Chouinard’s is giving away his billion-dollar company. BoF chief sustainability correspondent Sarah Kent explains why — and what influence the change could have on the culture of business.

Background: 

Patagonia has long been the standard bearer for responsible capitalism: the jackets and fleece maker has donated 1 percent of all sales — which top $1 billion a year according to The New York Times — to environmental groups since the ’80s, and was one of the first companies to qualify for B-Corp sustainability certification. In its latest bid to live out its mission statement, “founder Yvon Chouinard gave most of Patagonia’s shares over to a non-profit which will be tasked with reinvesting its profits (projected at some $100 million a year) in fighting the climate crisis. “Earth is our shareholder now,” Chouinard wrote in an open letter on the company’s site. 

“This is pretty unprecedented. Individuals don’t do this, and it almost broke the bounds of what people had imagined business should look like, ” said BoF chief sustainability correspondent Sarah Kent. 

Key Insights: 

• Chouinard created a structure in which Patagonia’s profits cycled toward charitable endeavours focused on climate change in perpetuity. 
• All shares priorly held by the Chouinard family will be given away to different entities, two percent of shares will be put into a trust which will govern the company and ensure it operates in line with responsible business practices and the other 98 percent will be held by a non-profit that will be responsible for distributing them.  
• Through the years, Patagonia has made it a goal to balance turning a profit with encouraging responsible spending. It's managed to go about communicating that in an authentic way because it's transparent about the tension between those two goals. 
• While the move by Patagonia will be hard to replicate elsewhere (given shares were owned by the family), it has created a template that could be used on a smaller scale. 

Additional Resources:



• Can Patagonia Make Capitalism Climate Friendly?
• Patagonia’s Radical New Ownership Structure, Explained

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After years of speculation, designer e-tailers are finally consolidating in an effort to increase profits and gain market share. BoF’s Robert Williams and Tamison O’Connor unpack what’s in store for major players including Farfetch, YNAP and MatchesFashion. 

Background: 

The launch of Net-a-Porter in 2000 changed fashion forever, heralding the first phase of luxury e-commerce, and inspiring a slew of competitors to get in the game. But in an increasingly competitive market, e-tailers have struggled to retain pricing power and turn a profit. Now, the space is starting to see some consolidation. In August, Farfetch took a stake in Yoox-Net-a-Porter Group, which laid the groundwork for an eventual acquisition, and allowed Richemont to offload the platform — which had long weighed on its portfolio. 

“This deal is a pretty major step for Farfetch in terms of setting up the platform to solidify a dominant position… YNAP was Farfetch’s biggest competitor,” said Tamison O’Connor, BoF luxury correspondent. 

Key Insights: 

• As part of the deal, Farfetch acquired a 47.5 percent stake in YNAP, in an agreement that contains provisions for a full acquisition within a full year. Farfetch will power YNAP’s technology, and sell YNAP inventory — including Richemont brands — on its own platform. 
• E-commerce can be hard. Farfetch is attractive to brands because it offers back-end management, stock management and connection to the company’s fulfilment logistics network, at a time when brands are struggling to wrangle their supply chains due to macroeconomic challenges. 

Additional Resources:

• Richemont, Farfetch and YNAP: Understanding a Transformational E-Commerce Deal: The Swiss luxury group is spinning off Yoox Net-a-Porter in a joint venture with Farfetch. What does it mean for Richemont, Farfetch, YNAP and the luxury industry at large? BoF dissects the deal.
• Inside Farfetch’s Bid to Dominate Luxury E-Commerce — Download the Case Study: During a blockbuster year for online sales, Farfetch surged ahead of rivals to position itself at the front of luxury’s e-commerce race. Can it spin the current momentum into sustainable — and profitable — growth and become the unrivalled platform for luxury fashion online?

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BoF’s retail correspondent Cathaleen Chen joins The Debrief to discuss how the mall brand plotted a turnaround that’s starting to pay off.

Background:

Gap Inc. has had a hard year, accented last week by a dramatic Ye break-up following an anticlimactic retail roll-out of Yeezy Gap, which it staked its comeback on a year ago. Old Navy sales sank, and its once fast-growing sportswear label Athleta has seen sales level. But there’s been one glimmer of hope in the midst of it all: Banana Republic. The long-struggling mall brand’s sales were up 9 percent in the quarter ended July 30, helping to send Gap Inc. shares up 6 percent after what was an otherwise grim report. It seems the company is finally starting to see the payoff of the brand and product re-fashioning it started a year ago under chief executive Sandra Stangl and then-chief brand officer Ana Andjelic. 

“For the first time in a long time, it's exciting, it's different — and the fact that it’s not for everybody serves an advantage for Banana, because it finally has a point of view,” said retail correspondent Cathaleen Chen. 

Key Insights: 

• After getting lost in an amalgamation of indistinct mall brands, Banana Republic has started to redefine itself with a pointed aesthetic that doesn’t serve every consumer — reinventing its look and product offering. It launched a line “Imagined Worlds” IS THIS THE RIGHt NAME?” that nods to its heritage as a travel and safari line.
• Half of Banana Republic’s sales come from its off-price segment. 
• Overall, the Banana Republic makeover could be a learning experience for Gap, which hasn’t yet mounted a brand turnaround as significant as this. 

Additional Resources: 

• How Banana Republic Became a Bright Spot in Gap Inc.’s Portfolio: The mall retailer saw sales rise after swapping generic office clothes for a stronger point-of-view inspired by its safari-themed origins. The new look wasn’t for everyone — and that was the point.
• The Secret to Breathing New Life Into Old Brands: Banana Republic, J.Crew, Express and other mall brands are all promoting a new, more digital and fashion-forward identity in a bid to regain relevance.

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Louis Vuitton is expected to name its Virgil Abloh successor within weeks. BoF’s Imran Amed joins Lauren Sherman to discuss what luxury labels think about when recruiting top designers.

Background:

Louis Vuitton has spent almost a year searching for a Virgil Abloh successor after the designer died in November 2021. According to sources, Martine Rose, Grace Wales Bonner and Telfar Clemens are among the names that were considered by owner LVMH, and the decision is expected to be announced within weeks. But how do brands like Louis Vuitton even go about finding a designer?

“Without the creative energy, without that kind of excitement, there’s nothing to sell,” said Imran Amed, BoF founder and editor-in-chief.

Key Insights:

• While all brands have their own personality and the situations that necessitate finding a new creative director differ, the things most brands look for in a leader are similar.
• Executives have to consider whether they’re looking for revolution, like when Gucci tapped Alessandro Michele for creative energy and new ideas, or evolution, like when Saint Laurent tapped Anthony Vaccarello to keep its aesthetic formula after Hedi Slimane departed.
• A strong vision is the most important thing. But creative directors also need to have commercial sensibility and the ability to work in a corporate environment.
• One of Abloh’s achievements was that he managed to build a community at Louis Vuitton, and engage consumers who had been traditionally excluded by the luxury industry.

Additional Resources:

• Virgil Abloh: Building on a Legacy: Like Yves Saint Laurent, Alexander McQueen and Gianni Versace before him, the late Virgil Abloh leaves a powerful legacy. What does this mean for Off-White and Louis Vuitton?
• Which Luxury Leadership Configuration Works Best? In luxury fashion, the right configuration of creative and commercial leadership is critical to success, writes Pierre Mallevays.

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BoF’s workplace and talent correspondent Sheena Butler-Young unpacks how fashion’s labour market has evolved in the past year, and what positions brands are hiring for now. 

Background: 

As companies confront a potential recession, they’re making changes to the way they hire, and who they hire. During the pandemic, the number of fashion jobs requiring expertise in web3 or the metaverse rose exponentially. But now, brands are once again focused on hiring for jobs in traditional areas like human resources, supply chain and finance that can help meet new consumer demands. 

“The pandemic has fundamentally changed the way people work,” said BoF workplace and talent correspondent Sheena Butler-Young. 

Key Insights:

• Brands are having to scale up how they address environmental social and governance issues as regulations and laws emerge around climate impact and fair labour practices. That’s driven the need for lawyers and people attuned to environmental studies. 
• Supply chain has gone from a back-office function to be more closely connected to consumer experiences. 
• DEI departments are evolving: most human resources employees say diversity roles should not sit in HR, but rather, in the C-suite, next to chief executives. Added to that, chief diversity officers are starting to get better budgets and hire managers and directors. 

Additional Resources: 

• Fashion’s In-Demand Jobs: Recruiters say interest in the metaverse is cooling, while brands look for candidates with the real-world expertise to navigate uncertain times.
• How to Know When Layoffs Are Coming — And What to Do About It: Fashion workers worried about their jobs amid an economic downturn should watch for warning signs and look for ways to transition their role if the worst happens.
• What Makes a Great Fashion Office: More and more companies want to see their staff in person again. Creating a work environment that fosters collaboration, offers flexibility and thoughtful perks could convince employees to leave the home office behind.

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BoF technology correspondent Marc Bain and contributor Chantal Fernandez join Lauren Sherman to discuss how TikTok took over fashion conversation — and what brands need to know to get the most out of the platform.

Background: 

It seems Instagram’s autonomous rule over fashion is finished. While the Meta-owned app still has more users, a growing number of brands and creators are turning to TikTok as their go-to marketing platform. As TikTok ascended to Gen-Z-favourite status, fashion and beauty used the app as a space for experimentation, while doing most of their marketing on Instagram. That is starting to change — and it's shaking up the way brands approach their social media channels.  

“The content demands on brands are just escalating and escalating,” says BoF contributor Chantal Fernandez. 

Key Insights:

• Just a year ago, TikTok wasn't taken seriously as a marketing platform by fashion brands, which struggled to adapt their polished content to its loosy-goosy approach. Now, it's seen as a place where all brands need to have a presence. However, returns on TikTok marketing investment aren't great yet. The app is still pretty new, where Facebook and Instagram have decades-old, more sophisticated advertising platforms. 
• For influencers, wannabe influencers and regular users, TikTok is appealing because it has created a relatively level playing field, where anyone could go viral at any moment. Casual, personality-forward content is preferred over high-production, over-the-top shoots and scenes. 
• Instagram still plays an important role for influencers and brands. It can serve as a channel for reaching older consumers, showcasing products and can act as almost a secondary website or blog that people refer back to. 
• Prompted by the rise of TikTok, social media is moving away from being social — and more toward acting as a sort of recommendation machine, where algorithms decide what’s shown to users. 

Additional Resources: 

• How TikTok Won Over Fashion
• The Returns on TikTok Ads Don’t Match the Hype Just Yet

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BoF’s Sheena Butler-Young and Tamison O’Connor join Lauren Sherman to discuss how a new generation of entrepreneurs are driving growth in this underdeveloped category.

Background: 

Monique Rodriguez turned a series of Instagram tutorials — where she made hair care concoctions out of ingredients found in her kitchen — into one of the most recognisable multicultural hair care brands in the US, Mielle Organics. The label just secured a reported $100 million non-controlling investment from Berkshire Partners that will help Rodriguez, who is now one of fewer than 100 Black women founders to have secured at least $1 million in funding, scale her business independently. 

Products for natural hair is a billion-dollar plus business in the US, and getting more attention from investors as they start to recognise its enormous untapped potential and historical neglect. At the same time, founders are re-thinking how products are made, marketed and distributed to consumers. 

“The next class of Black hair care founders want to flip the narrative arc: this isn't a segment, this is the market,” said BoF correspondent Sheena Butler-Young. ”I think that's where we're headed. That's the goal of these kinds of brands.”

Key Insights: 

• The textured hair category remained relatively stagnant even as beauty saw a wider branding evolution with the rise of brands like Glossier that changed attitudes in beauty about the way brands can look and market themselves. Now, that’s changing.
• For a long time, fashion and beauty has neglected to direct proper attention and resources to catering to and courting the Black consumer. That’s shifting as it has become clear to investors and brands they are leaving money on the table. 

Further Reading: 

• Rethinking Luxury’s Relationship With Black Consumers
• How Mielle Organics Is Rewriting the Playbook for Black Hair Brands
• Modernising the Black Hair Care Market

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Mounting customer acquisition costs and a pressure to grow fast have made it hard to build a profitable DTC business. BoF deputy editor Brian Baskin and retail correspondent Cathaleen Chen join Lauren Sherman to analyse the past, present and future of the market. 

Background: 

About a decade ago, a number of flashy direct-to-consumer brands peddling premium products and promising to cut out retail’s middlemen emerged on the scene. Quickly, names like Warby Parker, Allbirds and Glossier attracted investor attention with battle cries of disruption, setting off a DTC boom. They managed to raise hundreds of millions of dollars, and garner valuations in the billions of dollars. However, the market as a whole has largely failed to live up to sky-high expectations. How does the model need to change? 

“Over the last year or so, investors are looking around and saying ‘wait a minute, you told us you’d get big enough and the profits would come. Where are the profits?’” said BoF deputy editor Brian Baskin. “Consumers have also looked around and said, ‘ok, I got my Allbirds sneakers — what else you got for me?’”

Key Insights: 

• The pandemic exposed a huge flaw in the DTC model: scaling ultra-fast without the support of multi brand retailers is tough — and often requires heavy spending on customer acquisition. . In both private and public markets right now, investors have little patience for brands that aren’t profitable. 
• Today, DTC brands are embracing other distribution channels in order to scale, or choosing to grow more slowly. 
• Growing a profitable DTC brand can be done with tight control over spending, scrappiness and smart marketing. AYR — a basics brand that started in 2014 as a Bonobos subsidiary and was later taken over independently by its co-founders — is on track to hit $60 million in sales, having only taken around $6 million in funding.  

Additional Resources: 

• Why the DTC Model Can Still Work
• The Direct-to-Consumer Reckoning

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BoF’s Cathaleen Chen and Marc Bain join Lauren Sherman to talk about retailers’ big hires, hopes and plans for bringing their brands back to life.

Background: 

J.Crew and Gap defined how Americans dressed for much of the ’90s and 2000s, until their clothes grew stale, malls emptied out and fast fashion took retail’s reins. Then, during the pandemic, J.Crew filed for bankruptcy and Gap closed hundreds of stores. More recently, they’ve both orchestrated attempts to win back consumers: Gap, with its Yeezy-Gap collaboration, and J.Crew, with new mainline designers, including former Supreme creative director and Noah-founder Brendon Babenzien, whose menswear collection dropped a few weeks ago. 

Though they share similar histories, the retailers’ comeback plans couldn’t be any more different. 

Key Insights: 

• In the late-aughts, CEO Mickey Drexler and designer Jenna Lyons turned J.Crew into a fashion powerhouse before insurmountable debt sent it into bankruptcy a few years later. Meanwhile, Gap struggled to define its design aesthetic after dominating 1990s mall fashion with its preppy basics. 
• With its 2020 appointment of the artist then known as Kanye West, Gap has been able to generate hype, but not sustained sales. Yeezy Gap and Gap are still mostly bifurcated: its retail rollout in Times Square featured clothes in black trash bags, in a blacked-out room separate from the rest of the Gap store.
• Both retailers face significant headwinds, but J.Crew is best poised to win given its balanced merchandising strategy aimed at satisfying new and old customers, said retail correspondent Cathaleen Chen. Particularly tough, added technology correspondent Marc Bain, is the fact that Gap is so large, and beholden to shareholders.

Additional Resources: 

• J.Crew’s and Gap’s Comeback Playbooks Couldn’t Be More Different. Only One Is Working
• The J.Crew Comeback Starts Now
• Yeezy Gap Brings a Dystopian Retail Experience to Stores

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In an effort to reignite consumer fire, the Italian megabrand has done some restructuring. Bernstein luxury analyst Luca Solca breaks down what it all means. 

Background: 

In the late 2010s, Gucci pulled off a successful turnaround by aligning creative director Alessandro Michele’s unique, baroque aesthetic and Jacopo Venturini’s expert merchandising under the leadership of chief executive Marco Bizzarri, according to Luca Solca, Bernstein luxury analyst and BoF contributor. They injected the brand’s heritage and tradition with streetwear codes and coolness — bringing more casual products like sneakers into the luxury fold, and sparking the era of “new luxury,” said Solca. 

Lately, the brand has started to see momentum slow, falling behind rivals on organic growth. In search of a boost, Gucci has reorganised, introducing two newly created roles to support creative director Alessandro Michele. 

“The onus is on Gucci to continue to drive newness so that consumers can turn their heads and say, ‘Wow, this is something I don't have. I want to buy it,’” said Solca. 

Key Insights: 

• One of creative director Alessandro Michele’s longtime deputies will develop the brand’s commercial collections in the newly created role of design studio director. Maria Cristina Lomanto will oversee merchandising and brand elevation as executive vice president, brand general manager. 
• The shifts are a signal of Gucci’s intent to appeal to more consumers, while searching for a creative spark. Its biggest challenge right now, according to Solca, is for Gucci to “drive newness” to spur consumer demand. 
• Michele has been creative director of Gucci for seven years; a long tenure by today’s standards. Relying more on a wider team could help mitigate the risks associated with an eventual creative transition for Gucci as it targets annual sales of €15 billion. 

Additional Resources: 

• Will Gucci’s New Creative Configuration Work?
• How Big Can Luxury Brands Get?

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Kim Kardashian’s ‘solution wear’ line was recently valued at $3.2 billion. BoF correspondent Alexandra Mondalek charts the rise of the brand, and details what challenges lie ahead.

Background: 

Founded in 2019 by Kim Kardashian and retail veteran Jens Grede, ‘solution wear’ line Skims has taken the fashion industry by storm, disrupting the sleepy shapewear category and fetching a $3.2 billion valuation following its Series B funding round in January 2022. Now, the brand is looking to launch new categories and in new geographies, and is eyeing brick-and-mortar and a potential IPO. 

“Investors particularly like to talk about founder-product fit, and this really felt like a business that accomplished that,” said BoF’s Alexandra Mondalek. 

Key Insights: 

• Skims has seen non-stop momentum since its launch. Going forward, the brand will have to find a way to keep up with lofty expectations based on its early performance. As Grede told BoF in March, “[Skims] doesn’t have the luxury of failing.”
• A big challenge Skims has faced is managing unrelenting demand, especially amid the global supply chain crisis. Core items are often out of stock on the brand’s site — a huge problem for getting and keeping customers, and a reason for the business to take on funding, raising a $240 million round in January.

Additional Resources:  

• Skims Plots Its Next Moves: ‘We Don’t Have the Luxury of Failing’
• The BoF Podcast | Jens Grede on Building Skims, Frame and the Future of Fashion
• Building a DTC Challenger Brand | Download the Case Study

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BoF’s Daniel-Yaw Miller unpacks why — and how — sports stars including Russell Westbrook and Megan Rapinoe are running their own labels, with full financial and creative control. 

Background: 

Athletes have long been part of the fashion conversation. In the past, they’ve capitalised on their influence by inking brand endorsements with the likes of Nike and Adidas. Now, stars like the NBA’s Russell Westbrook, soccer player Megan Rapinoe and runner Allyson Felix are taking it a step further and launching their own labels in pursuit of more financial and creative control. 

Key Insights:

• Tennis champion Rene Lacoste’s namesake label is one of the earliest examples of an athlete starting a brand. One of the latest is NBA star Russel Westbrook’s Honor the Gift, which just showed its Spring 2023 collection at Paris Fashion Week. 
• Founding a brand gives athletes more control over creative direction, finances and their future; whereas endorsement deals often mean athletes have little say, are restricted in what they can wear and will expire upon their retirement. 
• Many athlete-founded brands are imbued with a sense of purpose. After leaving Nike, track star Allyson Felix founded footwear and apparel label Saysh — which just closed an $8 million funding round led by Gap’s investment fund — with a nod to her advocacy for maternity rights baked in, allowing mothers and pregnant women to trade in shoes as their foot sizes change. 
• Though many athletes, including Westbrook and Felix, are pushing out brands toward the end of their playing and running careers, younger players are starting their careers with the mindset that they will eventually run fully-fledged businesses like Honour the Gift or Saysh.

Additional resources:

• How Athletes Went From Selling Merch to Building Fashion Brands
• How NBA Star Russell Westbrook Is Changing How Men’s Fashion Works
• Why Luxury Brands Want in on Football

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After a pandemic pivot to e-commerce, many brands are back to working with third-party retailers, this time, with better terms.

Background:

The wholesale model, while offering exposure and some upfront revenue, did not always have the best terms for vendors. Department store bankruptcies, pandemic-induced store closures and the boom in online shopping pushed brands further towards their direct-to-consumer and e-commerce businesses to drive revenue. 

But that’s beginning to change. As shoppers return to stores, brands are seeing value in ramping up their partnerships with multi-brand retailers — this time on better terms. “What I'm hearing across the board from both brands and retailers is that this vendor-retailer relationship is more collaborative than ever,” said BoF retail correspondent Cathaleen Chen. 

Key Insights: 

• There are multiple factors pushing brands back to wholesale. Among them, the growth of e-commerce, which has slowed after spiking in 2020, and the growing consumer appetite for curated, in-person shopping experiences that allow them to stumble upon new designers. “That discovery is still so important, and now [shoppers are] relying on a cool third-party retailer to sort of facilitate that discovery,” said Chen.
• Both parties are also increasingly open to exploring other models like concession, consignment — more typical to European department stores — and drop-shipping, where the brands themselves are responsible for fulfilling orders made through retailer’s websites.  
• Brands are returning to wholesale, but not at the expense of their direct-to-consumer and retail offerings. “I think we're at a point where everybody has a more well-rounded business so that if things do go bad again in whichever channel, they can be agile and adapt very quickly,” said Chen. 

Additional resources:

• How to Take a Brand From Local to Global | BoF 
• Searching for the Next Barneys 
• Inside Neiman Marcus' Post-Bankruptcy Playbook 

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BoF correspondents Chavie Lieber and Daniel-Yaw Miller discuss why fashion brands are making products for sports like pickleball, padel, rugby, boxing and skiing. 

Background: 

Two decades ago, Lululemon built its brand around yoga — then considered counter culture. Today, it’s a $6 billion behemoth that makes products for everything from running to swimming and tennis, becoming a model for upstarts like Gymshark and Nobull hoping to filch market share from giants like Nike and Adidas. Now, as sports like pickleball, padel and skiing are gaining traction, there’s yet another opportunity for start-ups to disrupt the activewear market.

“If you go niche and focus on a very specific customer base with a very specific niche following, that might be a better way to crack activewear as opposed to selling everything for the masses — then you’re going head to head with Lululemon and Nike,” said BoF correspondent Chavie Lieber.  

Key Insights: 

• Instead of going after the activewear space in general, brands are serving underrepresented groups or making noise with differentiated products and price points. 
• A few brands, like Gymshark and District Vision have succeeded by identifying strong communities and putting themselves at the centre of them. 
• The activewear market represents a massive opportunity for brands: global sportswear is expected to grow to $395 billion by 2025, at an annual rate of 8 to 10 percent, according to McKinsey. 
• Brands are tapping into the desire to look good while playing sports like pickleball, rugby and boxing. They are poised to benefit from and buzz surrounding events like the 2028 Olympics and 2031 and 2033 Rugby World Cup, which will be held in the US. 

Additional resources: 

• The Hunt for Activewear’s Next Big Category
• Activewear’s Biggest Disruptors
• The Race to Develop the Best Sports Bra

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The vice president of fashion and shopping partnerships at Meta and BoF technology correspondent Marc Bain join Lauren Sherman to discuss the company’s new marketplace — which sells digital items from Thom Browne, Balenciaga and Prada — and the future of fashion on the platform.   

Background: 

Social-media company Meta has launched a virtual clothing store, and Balenciaga, Prada and Thom Browne are the first major designers to create looks fit for avatars in Mark Zuckerberg’s metaverse.The designs, available for use on Instagram, Facebook and Messenger, include a Balenciaga motorcycle suit, Prada shorts and one of Thom Browne’s signature grey suits. The move marks Meta’s formal entry into the virtual high-fashion business after Zuckerberg declared his ambitions to build the metaverse in late 2021.

Key Insights: 

• Meta’s virtual goods represent an opportunity for consumers who may not be able to afford physical items from the labels, to own a piece of the iconic brands. 
• Chen said the designers already are masters of creating their own immersive worlds — whether through shows or clothes — so it wasn’t hard to get them interested in the experience. Translating real-world texture and detail to virtual items, however, was a challenge. 
• Right now, the metaverse doesn’t represent a huge revenue stream for fashion companies. But, being a first name to the nascent space has a branding advantage. 
• Eventually, when brands are able to make virtual items into NFTs, they’ll be able to create true ownership and scarcity, which could create the same dynamics of exclusivity and hype that drive fashion today. 

Additional Resources:

• Balenciaga, Prada and Thom Browne Will Be the First Brands on Meta’s Virtual Fashion Store 
• Facebook’s Vision for Fashion in the Metaverse

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BoF’s workplace and talent correspondent Sheena Butler-Young explains why managers in the fashion and beauty industries are struggling to balance their youngest employees’ expectations against the needs of their businesses.

Background:

The youth-obsessed fashion and beauty industries can’t get enough of Gen-Z talent: they believe they need to recruit more entry-level employees in order to maintain relevance and attract new customers. But the cohort is entering the workforce with big expectations — not only around salary, but remote working, too — that many companies feel unprepared to meet. 

“Gen-Z is entering the workforce amid a labour shortage… So that’s real leverage behind the demands they’re making,” explained Sheena Butler Young, BoF’s workplace and talent correspondent. 

Key Insights: 

• Gen-Z is the latest in a long line of generations accused of impatience entering the workforce.
• A key difference between Gen-Z and its Millennial predecessors is that the job market currently favours job-seekers rather than employers — so their demands are more likely to be met. 
• Fashion is finding demands surrounding remote work particularly hard to deal with given the collaborative nature of most jobs. 
• Brands shouldn’t get caught up in stereotypes about young talent, but find ways to actually understand job-seekers’ desires. 
• Often, the generation that hates being sold to and just wants transparency, honesty and open lines of communication about career progression. 

Additional Resources:

• What Will It Take to Make Gen-Z Happy at Work?
• What Fashion’s Class of 2022 Expects from Employers
• Solving Retail’s Labour Shortage

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BoF’s luxury editor Robert Williams offers insight into the surprising news that the mega-label plans to open stores dedicated to serving top customers.

Background: 

As traffic to stores soars, Chanel’s chief financial officer Philippe Blondiaux said the brand plans to open dedicated boutiques for top-spending clients starting in key Asian cities. It's a strategy that emphasises the importance of big-spenders to the in-demand French luxury brand’s future amid whispers of an impending recession — but one that risks alienating first time and occasional shoppers who are still dropping upwards of $10,000 for bags.

“Brands like Chanel, they’ve lived through lots of cycles of boom and bust in the economy… When there’s an economic crisis, they need to be ready to have a real focus on repeat business,” said BoF’s luxury editor Robert Williams. 

Key Insights: 

• Chanel sells many items in-store only, and limits locations to the most luxurious places in the world’s most luxury cities — operating just around 250 stores compared with Louis Vuitton’s over 400 doors. 
• Chanel is not the first brand to open special stores for private clients; Brunello Cucinelli deployed a similar concept last December. Other brands like Zegna have dedicated spaces in-store for special items. 
• The brand’s growth in fashion, watches and jewellery last year was driven by its decision to raise prices and a flood of new clients and first-time buyers to luxury. 
• In addition to focusing on its physical footprint, Chanel is pushing its beauty business, which has been historically driven by department stores and beauty retailers like Sephora and Marionnaud, toward majority direct-to-consumer. 

Additional Resources:  

• Chanel to Open Private Stores for Top Clients as Sales Soar 50%
• How Luxury Brands Court the 1 Percent

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Brands including Stella McCartney, Balenciaga and Hermès are making products from mushroom-based material. BoF’s chief sustainability correspondent Sarah Kent details the forces pushing next-gen fabrics like mycelium leather forward — and whether the much-hyped sustainability solution has a future in fashion.

Background: 

After years of experimentation and development, handbags, shoes and coats made of mycelium leather — created from the roots of mushrooms — are hitting the shelves from names like Stella McCartney, Balenciaga and Hermès. It’s a test of whether mycelium leather will make it in the mainstream. Made by start-ups like Bolt Threads and MycoWorks, mycelium is promising for fashion as brands seek out non-plastic, non-animal-based, less-energy-intensive leather alternatives and consumers demand more environmentally friendly products. But taking an idea from the lab to the store floor involves a lot of trial and error. 

Key Insights: 

• Though the space is gaining momentum as brands bring products to market and start-ups attract investment, most items are still limited-edition or very expensive. To gain mainstream traction, companies need to scale up and prices need to go down. Much depends on how brands’ first experiments perform.  
• If all goes well, the market for alternative materials could be worth $2.2 billion by 2026. 

Additional Resources: 

• Fashion’s Race for New Materials — Download the Case Study: Brands are pursuing a raft of initiatives to adopt recycled textiles, regeneratively farmed cotton and mushroom-based leather, but giving fashion’s major materials a sustainability makeover still requires billions of dollars worth of investments and deeper, longer-term commitments to scale. 
• Luxury’s Latest Battleground: Material Science: Armed with extensive patent portfolios, Bolt Threads, Modern Meadow, MycoWorks, Natural Fiber Welding and others are targeting luxury brands with alternative materials.

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“It really just speaks to the changing of the times and how styles are evolving within fashion,” said BoF correspondent Chavie Leiber.  

Key Insights: 

• Skinny jeans are no longer the most popular denim silhouette, according to data from NPD Group. But, that doesn’t mean no one is buying them. 
• As consumers come out of the pandemic, they don’t just want comfort. Shoppers are either skewing toward raw denim with no stretch or athleisure and leggings — but jegging and stretch denim styles occupying the in-between have started to fall to the wayside. 
• The world is in the midst of a “denim Renaissance,” says Marie Pearson, senior vice president of denim at Madewell, who added she’s never seen so many different types of fits and shapes selling.

Additional Resources: 

• The Style That Finally Dethroned Skinny Jeans
• Why Skinny Jeans Will Never Die
• Fashion Drives New Denim Momentum

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BoF’s Chavie Lieber dives into the elaborate and secretive way luxury brands court their high-spending clients with trips to exotic locales and entry to exclusive events. 

Background: 

In the midst of a post-Covid luxury boom, brands are going the extra mile to lavish top spenders — known as very important clients, or VICs. To court and keep VICs, who often account for the majority of their sales, names like Givenchy, Balenciaga, Alexander McQueen and Chopard fly clients out to ritzy charity galas and film festivals, organise exclusive runway shows and extended stays in five-star hotels and even grant access to designers and executives.   

“It's really about access to a designer, keeping them in the inner rings of the fashion world, so they feel seen and appreciated,” said BoF correspondent Chavie Lieber. “And then, obviously it leads back to more sales.” 

This week on The Debrief, BoF’s Chavie Lieber takes Lauren Sherman inside the cloistered world of luxury clienteling. 

Key Insights: 

• VICs, who can range from being very private to Insta-influencer status, are the engine powering luxury. Luxury e-commerce platform MyTheresa said 3 percent of its customers account for 30 percent of its business. 
• In response to consumer appetite in the wake of Covid, brands have upped the ante on experiences for VICs and potential new big spenders. 
• Much focus has been on the US, where spending in tertiary cities like Palm Beach and Austin — rather than New York and Los Angeles — is redirecting luxury’s attention. 
• In the midst of economic turbulence, VICs are becoming even more important to brands, as entry level consumers hold off on spending-up. 

Additional Resources:

• How Luxury Brands Court the 1 Percent
• The Crypto Wealthy Are Luxury’s New Big Spenders
• The Two Hottest Cities in America

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In a sea of unsubstantiated claims about sustainability, BoF’s Sarah Kent explains why it's so hard to measure impact, and what sort of regulation could be coming for fashion.  

Background: 

Concern about the environmental impact of clothing has swelled in the past few years. So too, has the practice of greenwashing. Right now, fashion marketing is flooded with eco-conscious messaging as brands dub their products “sustainable” without doing the groundwork to back up declarations. Consumers and regulatory parties are starting to demand more. 

Key Insights: 

• With little oversight outside voluntary inter-industry initiatives and no regulation, a sustainable marketing free-for-all has swept over fashion. 
• European policymakers looking to crackdown on greenwashing are currently considering legislation about how impact across various environmental areas can be measured. 
• Several snags have inhibited any real progress on measuring sustainability, including bad data, tangled methodologies, and the presence of complex social factors that go beyond ecological impact. 

Additional resources: 

• Green or Greenwashing: Who Gets to Decide?: European efforts to introduce standardised rules governing how brands backup environmental claims are fuelling a heated debate that stands to create winners and losers.
• The Sustainability Regulations That Could Reshape Fashion: Governments in Europe and the US are discussing regulations and policy proposals that could help steer the sector in a more sustainable direction.
• Fashion's Greenwashing Problem Begins with Bad Data: Fashion is doubling down on ambitious promises to clean up its environmental impact, but bad and misleading data are complicating efforts to build a more sustainable industry.

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BoF’s Tamison O’Connor explains how the fashion industry is betting on resortwear as consumers return to their pre-pandemic lifestyles and travel rebounds.   

Background: 

Every spring, top fashion clients, influencers and insiders are whisked away to lush destinations like Monte Carlo and Capri to indulge in fabulous dinners and cocktail parties — and sneak a peek at brands’ resort collections. Resortwear, which began as a way for luxury houses to cater to wealthy, travelling clients halfway through the main season, now represents so much more as a meaningful driver of sales for retailers. 

“It's really attractive for the true luxury customer who sees these items as a fun way to accessorise a holiday, but it's also an entry point for more aspirational and younger consumers,” said luxury correspondent Tamison O’Connor.

Key Insights: 

• As consumers start travelling and treating themselves again, luxury is betting big on vacation dressing. 
• Resortwear stands apart with more casual designs, lighter fabrics and lower prices. Brands aren’t just using these collections to attract travellers and true luxury consumers, but also to snag wealthy domestic clients and appeal to aspirational buyers.
• Retailers are picking up on opportunities to engage wealthy consumers by building buzz with events and activations surrounding resortwear online and in stores.
• Big brands are opening more stores and pop-up markets in vacation towns. 
• Luxury doesn’t expect growth in the segment to slow, even amid global economic turbulence, travel restrictions in China and skyrocketing inflation.

Additional Resources: 

• Luxury Seizes the Vacation Dressing Boom 
• Loewe's Brand Within a Brand: Is This the New Way to Do Diffusion? 
• How Fashion Is Targeting the Travel Rebound

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BoF’s Marc Bain chats with Lauren Sherman about the 3D creators, game designers and NFT experts bringing fashion into the virtual world.  Background: 

A new generation of digital creatives are leading fashion brands into virtual worlds by using their technical expertise and creative prowess to craft experiences for games like Fortnite or Roblox, and launch Web3 products like NFTs. Translating real-world brand imagery to virtual spaces, however, requires a unique skill set and grasp of the culture driving different ecosystems. 

“There's a community that already exists [in the metaverse]. That's one of the things that brands have to consider …” said Marc Bain, technology correspondent. “Making sure what they're doing works for the community that's already there. You don't want to alienate people.” 

Key Insights: 

• Creative studios like Emperia and BeyondCreative that specialise in the metaverse have seen an uptick in brand interest. 
• Training in skills like 3D design is becoming more mainstream: fashion schools are teaching it and designers are making an effort to learn the tools. 
• Even amid the hype, as Bain points out in his review of Decentraland’s Metaverse Fashion Week, digital fashion still often looks rudimentary. That’s due to a number of factors, like insufficient consumer technology, which proponents bet will evolve as worlds become more developed. 

Additional Resources: 

• The New Creatives Bringing Fashion Brands Into the Virtual World: Their mix of technical expertise and digital artistry has put 3D creators, game designers and NFT experts in high demand among fashion brands as they venture further into virtual territories.
• Can The Metaverse Transform Fashion Business Models?: There may be a better analogy than e-commerce to size up fashion’s metaverse opportunity: will it be more like streaming or 3D movies?
• Lessons From Metaverse Fashion Week: Brands such as Tommy Hilfiger and Dolce & Gabbana were among those to test the virtual waters, encountering challenges like low-quality visuals as well as some opportunities.

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BoF’s Lauren Sherman and Matthew Schneier, senior writer at New York Magazine and The Cut, discuss the former star designer’s attempted industry re-entry following a slew of sexual assault allegations. 

Background: 

Following a flurry of sexual assault allegations — which some thought would wipe him from fashion forever — Alexander Wang is attempting a return to fashion. After dressing celebrities including Rihanna and Julia Fox, and honing his business strategy in China, the designer staged a runway show in Los Angeles historic Chinatown — his first live event in more than three years.  

But his plans were thwarted when swarms of consumers rejected the idea of any kind of Alexander Wang comeback following the fashion show — making it clear that his return to fashion is in no way guaranteed. Will consumers buy into a revived Alexander Wang? 

“It's up to the public to decide whether they are still interested in what he has to say and whether whatever issues they may have with him personally impact their interest in hearing it,” said Matthew Schneier, senior writer at New York Magazine and The Cut. 

Key Insights: 

• The rise of the Alexander Wang brand was fueled by Wang’s energetic, party-forward image. 
• Even before publicly facing allegations of groping, non-consensual touching and druggings — the relevance of Wang’s brand was beginning to fade amid market shifts including the rise of luxury streetwear labels like Off White.
• It remains unknown how much the scandal affected Wang’s brand. According to a source close to the business, e-commerce sales have almost doubled since 2020. 

Additional Resources:

• Alexander Wang Plans a Comeback: After sexual assault allegations tarnished his brand, the designer is back with a booming business in China, an upcoming show in Los Angeles and a broader strategy.
• What Will Happen to Alexander Wang?: Five men spoke to BoF about similar encounters with the New York-based designer, who is facing an onslaught of sexual assault allegations, which he vehemently denies. Could a backlash hurt his business?

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Fast fashion upstart Shein set the industry ablaze this month after reports it was seeking to raise $1 billion in funding at a $100 billion valuation, according to Bloomberg. Shein has upended fast fashion by making apparel at jaw-droppingly low price points and gaining market share, attracting major investors. But is it profitable?

“Even if Shein isn’t profitable now, the thesis is that if enough people shop from the brand it would be able to leverage some of its operational costs … It could become a very lucrative business,” said Chen. 

Key Insights

• While it is unknown whether Shein is profitable, the retailer drives ultra-high sales volume and razor-thin margins 
• Shein is powered by a nimble, AI-driven supply chain, which allows it to produce a plethora of trendy items for an internet-obsessed young fashion audience almost instantaneously. 
• The retailer’s app uses casino-like tactics and rewards to draw shoppers in and keep them buying, sharing and engaging. 
• Despite its murky manufacturing process and reputation for amplifying rates of consumption, Shein is popular among young consumers — who purport to care about sustainability.

Additional Resources

• The $100 Billion Shein Phenomenon Explained: Reports revealed that Shein is seeking over $1 billion in funding at a $100 billion valuation. BoF breaks down how the fast-fashion disruptor has built a global business that now rivals Zara and H&M.
• How to Compete With Shein: The Chinese fast fashion giant built an empire on unmatched speed-to-market and unbelievably low prices. To compete, others must play a different game.

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In this weekly series,  BoF’s chief correspondent will go behind the scenes of the $2.5 trillion global fashion industry. 

Fashion has the ability to move markets, shake up cultural norms and even transform society. But who — and what — are the forces driving major change?

We’re answering that question on The Debrief, a new weekly podcast series from The Business of Fashion, where we go beyond the industry’s glossy veneer to understand how the fashion business is evolving, from the inside out.

Hosted by BoF’s chief correspondent Lauren Sherman, The Debrief will be your guide into the megalablels, indie upstarts and unforgettable personalities shaping the $2.5 trillion global fashion industry. Each week, Lauren will take you through BoF Professional story —  in conversation with our correspondents and industry experts — to unpack the analysis and insights you need to know to navigate an industry undergoing rapid change.From the rise of direct-to-consumer disruptors, to the rapid consolidation of the luxury industry, to cultural shifts turning beauty upside down.

BoF covers it all.

Make sure to follow wherever you listen to podcasts to never miss an episode. 

Join BoF Professional today with an exclusive 25% discount on an annual membership, follow the link here.

Email Lauren with your feedback, ideas and tips at [email protected]

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