Hi, and welcome back to Line Sheet, reporting live from Chicago, where the air-conditioning is on full blast
even when it definitely doesn’t need to be.
My husband, kid, and I are spending our time here visiting friends and family, and attending an inordinate number of podcast tapings. (Two.) For today’s issue, I ripped a page from my reporter’s notebook, sharing thoughts on whether LVMH’s Loro Piana fiasco will impact sales, as well as some intel on the return of Tyler Haney at Outdoor Voices. (I know. We all need to move on.) And
Bill Cohan is back to explain what Saks Global’s first-quarter results mean, offer a payment update, and more.
Programming note: Tomorrow on Fashion People, my guest is How Long Gone’s Jason Stewart. (Jason is the one who seems nicer in public but is actually meaner in private.) We’re both
in Chicago right now, so we discuss the street style here, plus Loro Piana, O.V., Burberry, Keds, and more. Listen here and here.
Mentioned in this issue: Tyler Haney, Outdoor Voices, LVMH, Loro Piana, Damien
Bertrand, Pietro Beccari, Antoine and Frédéric Arnault, Kering, François-Henri Pinault, Francesca Bellettini, Luca de Meo, Jean-Marc Duplaix, Gucci, Demna, Burberry, Joshua Schulman, Saks Global, Marc Metrick, and many, many more… |
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Five Things You Should Know…
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- Nothing
has ever been as good as early-era Outdoor Voices: This weekend, Outdoor Voices wiped its Instagram feed, added “doing things, brb” to the bio line, and followed one person: Founder Tyler Haney, who did a spectacular job losing control of her early-D.T.C.-era activewear label many years ago. Haney also added Outdoor Voices to her personal bio.
I’m sick of writing about Outdoor Voices, so I’ll spare you the history (catch up
here, here, here, and here). However,
I’m a completist, and people still care, so here we are. My sources tell me that Consortium, the licensing firm that bought Outdoor Voices in June 2024, hired Haney to consult on the relaunch of what is now officially a zombie brand, still reliant on watered-down versions of products and ideas she conceived more than 10 years ago. (Haney has contracted multiple original team members, and is working on a site redesign and brand overhaul.) Why she is bothering with this after raising $11 million
for Try Your Best (or TYB), I don’t know, but I’m sure all will be revealed in the coming days. (In layman’s terms, TYB helps brands set up a modern loyalty program. Haney used Joggy—her C.B.D. gummy turned energy drink startup—as a prototype, and I assume Outdoor Voices will now also use the platform.)
When I spoke to Haney about TYB in 2022, she mentioned being open to getting back into the apparel category. And, as I’ve documented, it clearly annoyed her that Outdoor Voices wasn’t living up to the brand’s potential from a product or marketing perspective, even though the whole mess, in the end, was mostly her fault. (She gave up too much equity too early, didn’t hire the
right business people around her, raised the wrong amount of money, etcetera.)
When Consortium bought O.V. out of near-bankruptcy in 2024, executives expressed interest in bringing Haney back into the fold. It isn’t a terrible idea from Consortium’s perspective. The partnership could help position the group—which also owns the Reese Witherspoon vehicle Draper James, and funny-pillow-maker Jonathan Adler—as more than a licensing firm. (The modern
way to operate these value vampires is to suggest you are interested in maintaining brand equity, even if the proposition—juice these brands as much as possible—ultimately erodes it.)
In the case of O.V., it was never more than $90 million a year in sales, and far too hyped by people like me in the press. This relaunch probably won’t work in any measurable sense. And yet, when it comes to the activewear market, there is still room for many different brands, of many different
sizes, and I have yet to find one I like as much as Outdoor Voices when Haney was running it. That said, who knows whether Haney—who was in her early 20s when she launched O.V.—has matured enough to play nice with Consortium, and whether Consortium is sophisticated enough to execute on her vision. Either way, it’s almost certainly too late. (A rep for Consortium did not respond to a request for comment. Haney and Cory Baker, one of Consortium’s founders, did not respond to my
direct requests for comment.) - Will Loro Piana sales be hurt by the sweatshop accusations?: When news broke last week that LVMH’s Loro Piana was being investigated by the Italian courts for using a factory accused of unfair labor practices, I shrugged. After all, the Italian government has cracked down on factories in general over the
past year, and Loro Piana is only the most recent example of a name brand getting looped in. (Previously, Armani, Dior, and Valentino were all exposed.)
Loro Piana made it clear, in what was otherwise a pretty unclear statement, that the parties involved were subcontractors, and that they had no idea what was going on. It seems naive to believe that they weren’t aware, but these are subcontractors. And it’s also true that what constitutes “fair” and “unfair” labor
practices in Italy has clearly changed in recent years—perhaps not in terms of the language of the law, but in how much the court cares. To me, this is yet another indication that these once local-yokel businesses, which are now global powerhouses, need to readjust their operations to reflect the increased regulation.
The funny thing about Loro Piana, in particular, is that the company culture is really good, especially by LVMH standards—so good, in fact, that employees were very upset
when C.E.O. Damien Bertrand was called back to Paris to support Pietro Beccari at Louis Vuitton. L.P. was sort of left alone for the past decade, but now the fine-adjustment knob on the microscope has been turned up, since it’s currently one of the only growth engines in the LVMH portfolio.
Anyway, it’s a particular trial for chairman Antoine Arnault, who oversees image and communications
for all of LVMH. His little brother, Frédéric, became the C.E.O. of Loro Piana earlier this year, but has been roundly left out of the coverage of this mini-scandal for whatever reason. In the meantime, all that LVMH and the Arnault Bros. can do is continue to plead ignorance, and fix the process internally so it doesn’t happen again. (You can’t really avoid working with subcontractors in fashion, even if you’re pretty much vertically integrated, so they’ll have to manage it
even more closely for a while.)
As for whether this will impact sales in any way—a question that a few LVMH employees did ask me—the answer is no. We all know people don’t vote with their dollars, and we also know that the value of most products does not directly correlate with the cost of making those products. In my mind, this is a good lesson more than anything else.
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The refined BMW 7 Series is all luxury. With the ability to define your design, the ultimate glamour is yet to be.
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- The
Kering waiting game: There was a lot of online speculation last week about Francesca Bellettini’s future at Kering. (So much, in fact, that I had several Kering executives calling me, asking me what was up.) Is she staying? Is she going? Is she being reassigned?
Here’s what we know: Luca de Meo, Kering’s new C.E.O., doesn’t start until September, and I can’t imagine a world in which anything is
decided before then—even if he’s already having preliminary conversations with executives about how things should be rejiggered. The only certainty is that there will be change. It’s unlikely that Bellettini and Jean-Marc Duplaix stay in their deputy C.E.O. roles; the “no one is safe” feeling among executives is warranted.
But we also have to remember that industry expertise matters, and while de Meo can clean house to an extent, he still
needs to employ people like Bellettini who understand how to run the business while he gets up to speed under chairman François-Henri Pinault. At Gucci, the profit engine (but also the most troubled brand of the group), there is a feeling that the company still operates with too many layers of management, and that further streamlining is required. Then there’s the fact that Demna’s first runway show will not occur until March 2026, which means another year and a
half until his Gucci is fully realized in stores.
That’s not great news, on top of all the macro issues that Gucci (and everyone else) is facing. However, I’m told that Demna is already making changes, and there’s good feedback internally about the stuff that’s been produced. And, from everything I’ve heard about the September non-fashion-show concept, there will be plenty to talk about. - The Burberry opportunity: The British heritage brand’s
recent financial results indicate that C.E.O. Joshua Schulman’s strategy—hype the happy scarves, focus on outerwear, tweak the marketing, cut costs—is starting to work. Sales in the Americas were up 4 percent in the quarter ending June 28, Europe was stable, and Japan drove sales in Asia, while China continues to flag.
There’s also something bigger playing in Burberry’s favor. In recent years, a new category has emerged between accessible luxury and pure
luxury, as costs of pure luxury goods have risen. Tory Burch is the best example, but you can see it at smaller outfits like Auralee, Lemaire, and Jacquemus, too. While these brands have a legitimate fashion point of view, their pricing is gentler. Burberry can play in this space as well.
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| William D. Cohan
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- Saks’s latest vendor
outrage: On Thursday, Saks Global reported that the net loss for the quarter was $232 million, compared with $184 million in 1Q24. Any comparisons with last year are difficult, of course, since the Neiman Marcus Group combination closed last December. Revenue for the first quarter was $1.6 billion, compared to $900 million a year ago without Neiman and $1.9 billion with Neiman.
Saks Global reported having $326 million of cash and availability under its ABL line, and around
$850 million of liquidity as of June 27, following the deal with the holders of 54 percent of the 11 percent, $2.2 billion bonds issued in December. That $850 million balance has since been reduced by around $120 million, after Saks made its first interest payment on those bonds at the end of June.
Marc Metrick, the Saks Global C.E.O., has been crowing about the results, although I’m not sure why. Maybe he has no choice, which I get, although it strikes me as borderline
delusional. “We are pleased to report that we continue to make solid progress in executing our transformation, and our first-quarter results came in slightly better than expected,” he wrote to vendors after the call with bondholders. Metrick also introduced Saks Global’s new C.F.O., Brandy Richardson, who starts August 18. (Welcome to the fire, Brandy.)
First up on her plate, I’m sure, will be mollifying Saks’s increasingly peeved vendors. As faithful
readers know, on Valentine’s Day, Metrick told vendors that Saks Global would be stretching payables from 30 days to 90 days—one of the first signs of financial trouble at any company. I’ve heard from vendors who shipped new inventory on March 1, after Valentine’s Day, and who expected to get paid on July 1, and guess what? They still haven’t been paid in full. In fact, I’m told that some were paid a small percentage of what they were owed, and that messages to Metrick haven’t been returned.
Referring to Metrick’s Thursday email, one vendor wrote me, “They use the word ‘partner’ often, but a more accurate word should be ‘sucker.’”
A spokesperson for Saks Global declined to comment, but a person close to the company told me he’s not surprised that some vendors haven’t been paid after 90 days. “We’ve probably missed some payments, or are behind with some folks,” he said. “I don’t doubt that it happened. When I look at our past-due accounts payable, the vast, vast majority of
our accounts payable is on time. But… I’d be shocked if we weren’t behind with a few folks.”
This is obviously rather troublesome. If you set up a new payment plan for vendors, and you violate it right out of the gate, while also boasting about how much “liquidity” you have, something isn’t adding up.
Anyway, the first-quarter results appear to have landed with a bit of a thud for Saks bondholders. For the unlucky 46 percent of bondholders, who were screwed over by the other 54
percent, their bonds have traded down to 31 cents on the dollar, from 35 cents, in recent days. As for the bonds of the 54 percent? They are trading at around 50 cents on the dollar, down from 60 cents after the new financing was announced. Will this thing make it to Christmas? (Sign up for Dry Powder to never miss Bill’s frontline dispatches on what’s happening behind closed doors
on Wall Street…)
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What I’m Reading… and Listening
to…
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If you were in Amagansett this past weekend and didn’t attend the Mina Stone–cooked dinner on the lawn of Galerie Sardine’s farmhouse on Saturday night… sorry. Emily Weiss, casting director Rachel Chandler, Sara Moonves, Ulla Johnson, Elin Kling, Karl Lindman (of Toteme fame), Molly Jong-Fast,
Mel Ottenberg, Selby Drummond, Estelle Bailey-Babenzien, Elisa Lipsky-Karasz, and Jane Wenner (with Theo and Gus) were all there to celebrate Sardine’s latest exhibition featuring Nate Lowman lamps and Tenki Hiramatsu paintings. [My Secret Spy]
If you think of Kering as DC and LVMH as Marvel, this conversation between Julia Alexander and Matt Belloni about the “superhero wars” runs in total parallel to what’s happening in luxury, all the way down to the China problem. [The Powers That
Be]
Incredibly chic art advisor Barbara Guggenheim is suing her former business partner, Abigail Asher, accusing her of misusing funds, etcetera. Asher has countersued, accusing Guggenheim of doing similar. It’s a pretty explosive story that is an interesting follow-up to the closure
of Tim Blum’s gallery. Entertainment, art, media, fashion: We’re all in crisis! [ARTnews]
Jonathan Anderson is designing the costumes for Luca Guadagnino’s Sam Altman
biopic. [Instagram Stories]
The Caastle lady was indicted for fraud. [WWD]
Karla Welch is styling WNBA star Kelsey Plum. [Who What Wear]
Marisa Meltzer on Jane Birkin and her Birkins (she owned only five over the course of her life). [NY Times]
By the way, if you have yet to receive a galley of Marisa’s Jane Birkin biography, I am sorry for you! Did you know galleys are the new
status symbol? [Air Mail]
Claire’s, the ear-piercing emporium, is once again looking to file for Chapter 11 bankruptcy protection. About a decade ago, shortly before the last time they filed, I wrote for Lenny Letter about getting accused of stealing by a Claire’s employee at Century III mall in West Mifflin, Pennsylvania. I (obviously) didn’t do it. I remain annoyed.
[Slate]
I’m a proud Geoff Snack customer. [NY Times] |
And finally… The Devil Wears Prada 2 is currently casting
“Midtown pedestrians,” if you are interested in being a part of film history.
Until tomorrow,
Lauren
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