The Business of Fashion

Brand-building isn’t what it used to be. After years of leaning heavily on instantly trackable performance marketing, the fashion marketing landscape is shifting. A convergence of factors, including pressures on discretionary spend, is sharpening consumer appetite for entertaining brand storytelling that captures their aspirations and interests, well beyond the products on offer. Spurring this change are the increasing costs of performance marketing alongside new data privacy regulations restricting customer targeting, forcing marketers to find different ways to engage with shoppers.

Many fashion leaders now plan to reprioritise marketing spend. According to the BoF-McKinsey & Company State of Fashion 2024 Executive Survey, 71% of executives plan to increase brand marketing spend in 2024, while 46% intend to do the same for performance marketing. This marks a fundamental shift for many fashion companies, including direct-to-consumer labels that have built their brands using the trackable, targeted performance-marketing playbook.

While brand marketing by its very nature doesn’t enable the same depth of trackable insights as performance marketing, it does offer other benefits — notably, done effectively, it can help brands to stand out in an increasingly saturated media world. Brand marketing is also proving to be pivotal in transforming a label’s market position, while often helping it capture entirely new customer bases.

The State of Fashion 2024 explores the potentially elevated role that brand marketing will play as competition for consumer attention and loyalty intensifies across the fashion industry, read this story and download your copy:

This week, two of online luxury’s biggest players narrowly avoided collapse.

On Monday, after reports in recent weeks suggested a dire financial position, FARFETCH announced it would sell to South Korean e-commerce giant Coupang, securing $500 million in emergency funding in a delisting deal that wiped out shareholders and bondholders. Then on Wednesday, UK retail group Frasers said it would buy Matches (known until recently as MATCHESFASHION LIMITED) for £52 million ($63 million), a fraction of the $1 billion valuation the e-tailer reportedly fetched when private equity firm Apax Partners acquired it six years ago.

The fate of YOOX NET-A-PORTER remains up in the air, however, now that a deal by owner Richemont to sell a 47.5 percent stake to Farfetch is off.

These underwhelming exits were the latest symptoms of luxury e-commerce’s post-pandemic slump. Companies could avoid reckoning with longstanding challenges for the business model — including price competition, high logistics costs and restricted access to desirable inventory — so long as demand for luxury goods was surging. But inflation and rising interest rates have starved loss-making businesses of capital and reduced even wealthy consumers’ appetite for shopping.

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✍️ Robert Williams, Malique Morris

Bastien DAGUZAN is leaving his post as chief executive of JACQUEMUS effective immediately, a spokesperson for the brand confirmed.

“I would like to thank Simon for his trust and the incredible journey we have been on together with the team. He has always been an immense source of inspiration; I am so proud to have been a part of this adventure,” Daguzan said in a statement.

Daguzan joined Jacquemus officially as CEO in May 2022, though he had a long-standing relationship with the brand: He consulted with Jacquemus while he was serving as the general manager of paco rabanne and had been a fixture at its runway shows. He was the brand’s first CEO after founder Simon Porte Jacquemus himself, who previously held the positions of both creative director and CEO.

“Bastien has been a driving force behind the business and its leadership. We wish him well in his new endeavor,” Jacquemus said in a statement.

Read the full story on Daguzan's departure. https://bit.ly/4axGIKY

This week, amid rising uncertainty in the luxury market, Ermenegildo Zegna Group reported 20 percent organic growth in the fourth quarter, beating estimates and pushing full-year revenues to €1.9 billion ($2.1 billion).

Zegna’s mostly logo-free collections, including “triple-stitch” sneakers, silk and cashmere blended knits, got a boost last year from the “quiet luxury” boom: a TikTok trend fuelled by HBO’s “Succession” and wider fatigue with luxury logos whose prevalence in collections reached a crescendo during the pandemic. North American retailers sold 40 percent fewer heavily-logoed products in 2023 than in the year before, according to Trendalytics.

TikTok kids have since moved on, with the exaggerated glamour of “mob wives” and caked-on contoured makeup techniques of reality TV stars stealing the spotlight.

But rapid growth during the holiday season for logo-free brands, including Zegna and its LVMH-owned rival Loro Piana, suggest the “quiet luxury” boom is far from over. Loro Piana is “actually growing too fast, I would prefer to pump the brakes a bit,” LVMH chairman Bernard Arnault said in his annual results presentation last week. (The company does not break out sales for individual brands, but stay tuned for an in-depth interview with Loro Piana CEO Damien BERTRAND next week on BoF).

Read the full story by BoF's Robert Williams.

#LuxuryFashion

Salomon Sportstyle — the division responsible for the outdoor brand’s fashion-forward adaptations of its trail running footwear and apparel — generated over $165 million in sales for the nine months ended September 30, 2023, up from $80 million in 2022, according to parent-company Amer Sports’ US IPO registration published Thursday.

The Sportstyle division — boosted by the popularity of its XT-6 trail sneaker among streetwear and mainstream consumers — is now the fastest growing segment of the Salomon businesses, which began in 1947 as a family-owned manufacturer of ski equipment in the French Alps, the filing said.

Overall, Salomon posted revenue of over $1 billion in 2022, up from $961.2 million the previous year. In addition to Salomon, Amer Sports holds a roster of sports and outdoor brands, including Arc'teryx and tennis and basketball equipment company Wilson Sporting Goods Co..

A successful stock market debut will propel ambitions to increase revenue at each of these three businesses to over €1 billion ($1.1 billion) annually — Arc’teryx recorded sales of $952.6 million in 2022, according to Amer Sports’ IPO registration.

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