Retail Diary - Deep Dive - Week of March 25th 2024 - Resale trends, luxury online retail & independent Designer news
Resale trends, luxury retailer news and the challenges of being an independent designer are all covered in this newsletter. I also share the latest beauty & fashion collabs and launches. Lots to love
This Week's Topics:
Resale Round-Up
High Cost of Fashion & Luxury Retailer News
Bits of Beauty News
New Collabs, Launches, Corporate Moves, Stores & News
What else I ❤️️
🛍️ Quick note: I write a lot (too much good stuff to share!) so if you’re reading via email only, you may need to click through to the web version or read on the Substack app. I promise it will be worth it. 🛍️
Resale Round-up
Online resale site Mercari is looking to remove friction by changing two policies. First, resellers have zero fees (previously 10%) and second, returns are now allowed within 3 days. However (!!) removing the friction of returns for buyers is negative for sellers. Balancing the two is a challenge in this market.
ThredUp released their 2024 Resale Report. Here are a few key highlights from the report:
By 2028, the global secondhand market will reach $350 billion. Growing 3X faster than overall global apparel market. In 2023 the resale market grew 18% and by 2025 10% of the total global economy is expected to be resale.
Online is seeing especially robust growth - an accelerated growth in 2023, growing at 23%—220 bps faster than in 2022.
Value is what is driving this trend: Nearly 3 in 4 consumers say when it comes to apparel spend, value is king. Ranking is 1) to get better deals 2) to find unique items 3) to afford higher-end brands and 4) it’s better for the planet. (Thoughts from Sarah: keep these reasons in mind when marketing resale. Sustainability (while important) might not be the number one reason consumers are making the switch and what will drive the purchase. From this study it sounds like focusing on the better deals will be a more customer centered approach in marketing.) Same with why people resell - to get more money vs more sustainable approach (not that it isn’t, just that it is the driving factor.)
We discussed in a recent newsletter but the idea of branded resale (ex Dôen, La Ligne, Reformation etc) is a way to grab more traffic and more shoppers attention and is working for brands.
Image via ThredUp’s 2024 Resale Report linked above.
High Cost of Fashion & Luxury Retailer News
Chavie Leiber wrote an excellent piece “Can Anyone Afford to be an Independent Designer” (gift link to read behind paywall) for the WSJ interviewing fashion designer Edvin Thompson on the decision to cancel a staged fashion show after the sponsors pulled out. It would have required shelling out an additional $125K to cover the costs of the event. Leiber’s article also lays out the challenges of pulling together finances to sell wholesale (and waiting to be paid for inventory you up front cover) and the balance of selling wholesale to retailers that are also struggling. Thompson is focused on slowly growing the business in a thoughtful and fiscally responsible manner. Partnerships, like with Warby Parker, have also supported the business. If you liked The Cut article by Danya Issawi I mentioned in February here, this is another great piece on the costs of working in the fashion industry.
Another amazing read, “Has the Luxury E-Commerce Bubble Burst?” (gift link to read behind paywall) written by Elizabeth Paton for the NYTimes is worth a study. Here are a few notes that I gathered from the piece:
It really highlights (again, like the article above) the difficult position independent designers are in to juggle the payment terms from retailers and the challenge of what happens when a retailer you are reliant on struggles. (Thought from Sarah: Getting a healthy balance on omnichannel - between where you wholesale to benefit from traffic and marketing vs selling direct to consumer is possibly the most important part of success outside of having a product or design consumers actually want.)
This quote below says a lot about luxury pricing too - potentially we have hit the spot where forecasts for luxury prices is inflated and Merchants need to buy less of the higher end of pricing and recalibrate the pricing mix in stores.
“More recently, questionable management choices, a volatile global economy and soaring luxury prices — and with big brands heavily investing in their own digital operations — constricted retailers’ ability to stand out in a competitive market, let alone make a profit.”
Robert Burke, a luxury consultant, is quoted in the article about the luxury online marketplace:
“We are about to see a major evolution in luxury e-commerce — or perhaps a better word would be correction,” Mr. Burke said. “Overall, online sales for luxury fashion went up last year. This isn’t a shrinking market. What is changing is who is getting slices of the pie.”
Evan Clark writes The Bottom Line for WWD. In “How Internet Economics Brought Down Matches and Farfetch” the whole ecosystem is detailed. How department stores previously operated and worked (somewhat) successfully servicing a customer with curation, customer service and access to a variety of luxury brands. Then came the digital disruption with online retailers. The ripples are still being felt and haven’t been fully flushed out how a department store should operate or exist in this new ecosystem. Additionally, online department stores are also not totally without problems as outlined in the article above and seen from bankruptcies etc. Clearly there is a lot to be repaired right now across the retail landscape. This means major opportunity for disruptors who take smart, calculated risks and industry shake-ups.
Bits of Beauty News
Last week I asked if we wanted to dive into beauty news (we do) and if I keep in the same newsletter or devote one to Beauty. Overwhelmingly it was voted to keep and mix it in with what I already post. Here is what I’ll do, for major beauty news or a week with a lot, I’ll break out into its own post. Otherwise I’ll keep as a separate section. Scroll on if Beauty isn’t your focus. Thank you to everyone who voted.
New & Recent Launches
Both Sol de Janeiro and Nexxus announced a partnership/spokesmodel relationship with Sofia Richie Grainge this week. SDJ as they launched their first sunscreen and Nexxus on a TikTok inspired styling range. (Late last month Erewhon introduced their Sofia Richie Grainge Smoothie. Solid & Striped. Skinceuticals has The Sofia kit. David Yurman. Anyone not partnering with SRG?)
Laneige partners with Sydney Sweeney for their Dreamy Skin Collection. (This is my personal favorite.) Hint: Laneige you need to add a click to a bundle or kit PDP so that one one page you can buy each of the items. Since it is a “Sweeney Dreamy” collab it should include a sleep mask, silk pillowcase or some other sleep-y time item. That could be an approx $90 AOV vs the $24-$34 currently on site.
K18 launched a dry shampoo, their first new launch post acquisition by Unilever.
Summer Fridays just launched the first extension to their Jet Lag collection - there is now Jet Lag Overnight Eye Serum for Fine Lines & Wrinkles.
Clinique is the first Estée Lauder Co brand to launch on Amazon.
Josie Maran rebrand (I’ve always loved their Argan Oil.)
Beauty Biz Stories
Rachel Strugatz wrote an exceptional piece for Puck’s Line Sheet about Glossier, Fragrance, Sephora and LVMH. The pieces seem to be falling together for Glossier to be acquired by LVMH. With Glossier expanding their fragrance portfolio, now selling in Sephora, and LVMH (Sephora owner) looking to acquire a healthy beauty brand, we could have a match made.
Sephora launched two new global sustainability seals. I’m curious if this helps the consumer be a more informed shopper or if it is just confusing (or possibly if this is to juggle legal requirements while still promoting sustainability efforts.)
Marketing Consulting firm Market Defense shared the top monthly Amazon search terms with WWD. Interesting that Sol de Janerio is not only the one brand listed by name, it is #1. Also, pimple patches is the only facial care product in the top ten, although “skin care” as a term is number 10. Which leads me to believe there are so many unique steps/product names (ex. serum, toner, moisturizer) that it is more difficult to breakthrough to the top.
Amazon top search terms in beauty via WWD article linked above.
New Collabs, Launches, Investments, Corporate Moves, Stores & News
Collabed
Everlane x Marques Almedia Everlane collabed with London based independent label Marques Almedia on a salable and strong transition line. This is the first designer collab for Everlane.
Superga x Victor&Rolf before I even looked at the collab I had a feeling I would see chunky soles and oversize bows.
Not the only sweet sneaker collab. Keds x Magnolia Bakery.
Lilly Pulitzer x Badgley Mischka to mark 65 years of Lilly. This collab between the two brands feels very aligned. Also feels smart timing wise as it mixes with Palm Royale (Palm Beach) and FX Feud (Truman Capote’s Swans) very well.
In honor of Marc Jacobs’ 40 years in the industry, he is doing a Varsity Jacket and Snapshot Bag collab with friend and designer Anna Sui. Earlier this year he collab with Pat McGrath on a lipstick…more collabs with friends to come.
Warby Parker x Theophilio (read more about Theophilio designer Edvin Thompson above in the WSJ article by Leiber.)
Reebok and Anine Bing collabed on a Princess Diana inspired athleisure collection that heavily draws on the Princess Di paparazzi shots of her in biker shorts and sweatshirts looking stylishly gym ready.
Sweater brand Naadam collabs with Peanuts on a limited edition collection. I wonder if this collection was already scheduled, or if it was inspired by the Gen Z interest NPR wrote about in December here.
Lane Crawford is launching a collab with Korean label Bonbom. The collection will launch April 17th.
Alex Cooper (from Call Her Daddy podcast) partners with Skims on the Wedding Collection. (Redditors now speculating on Kim Kardashian to appear on the CHD podcast as part of the collab announcement.)
Launched
Phoebe Philo’s Edit Two just dropped. Cathy Horyn wrote about it for The Cut here.
Brazilian brand Farm Rio launches a men’s collection priced $165-$250. On site it is under the navigation “Unisex” which is more inclusive and fits with how the pieces can be worn.
Rhode clothing keeps teasing something new is coming and I’m expecting it to be swimwear. Keep your eyes peeled.
Dr. Martens launches a collection made of reclaimed leather.
Nordstrom is relaunching their private label Nordstrom line.
Kylie Jenner’s fashion line KHY has their first retail partner in Selfridge’s.
Corporate Moves
Tim Hamilton was named VP of Men’s Apparel Design at Nike. Most recently he was at VF owned The North Face as Global Creative Director where he helped drive collabs with Gucci and Supreme.
LVMH corporate moves planning for future successions: Toni Belloni is leaving LVMH as one of Bernard Arnault’s key advisors after over 20 years. Stéphane Bianchi will be stepping into this role at LVMH. Belloni’s new role will be president of LVMH Italy and in charge of strategic missions for Arnault. Next month, according to WWD, LVMH will propose the appointments of his sons Alexandre Arnault and Frédéric Arnault to the board, who will join their siblings Antoine Arnault and Delphine Arnault on the board. Michael Burke is the head of LVMH Fashion Group, previously in that position Sidney Toledano, is now an advisor to Bernard Arnault. Bernard Arnault still has no immediate plans to retire as the board voted to increase the age limit of the CEO from 75 to 80.
Stores & News
TJ Maxx has been successful during this struggling economic climate, and I found this article from Retail Dive with insights of what Macy’s closing stores will do to further drive sales and inventory for TJ Maxx really interesting. Between benefiting from a flood of off price inventory1 and a consumer that is already likely shopping TJ Maxx losing the option to shop a nearby Macy’s, TJ Maxx has the opportunity to drive foot traffic, revenue and quality inventory via Macy’s closures.
Modern Retail spoke with Urban Outfitters owned Nuuly to hear about the growth and opportunities in their rental business and how they have been able to be profitable and successful in a struggling - and still emerging space. Upcoming, they are adding from their single 300,000 square foot warehouse to an additional 600,000 square foot warehouse in another state. This can be logistically challenging but if they can manage the operations it should help them grow.
At Shoptalk Kohl’s CEO Tom Kingsbury spoke about how the Sephora lease has really helped the department store be in the beauty business and the performance there is being seen in ripples around the store.
For the Washington Post, Herb Scribner and Rachel Tashjian covered the Hermés Birkin Class Action Suit about the illegal pricing practices (tying the “opportunity” to buy a Birkin to buying other products first). “Does the Hermés Antitrust Lawsuit Carry Weight” (gift link to read behind paywall) Since this lawsuit came out I have seen people sharing that they lucked into purchasing a new Birkin without having to purchase other products first.
What else I ❤️️
Ssense released their trend report. Lots of themes including
Sundberg’s defined “Corporate Fetish” (in fact, the whole report feels very ‘90s/early 2000s office), Western inspired via new albums from Beyoncé and Kacey Musgraves and Pharrell for LV, prep via Ralph Lauren thinking of a fresh rugby and those Miu Miu boat shoes, ladylike swans (get your opera gloves and pearls ready) and a fancy little structured hat.Isabelle Truman wrote for Vogue Business “To escape the algorithm, fashion girls are shopping via Substack” and it has been shared multiple times this week among the Substack crew.
The article mentions some of my favorite Substacks (many) that are run by former fashion editors:
Substack shared that they have more than 35 million active subscribers and that fashion and beauty has emerged as a strong category on the site. Subscriptions are up in the category 80% year-over-year and over 3 million paid subscribers - already up over a million from 2023.
The article has so many insights from Substackers and brands talking about how they are running their business (and still figuring it out as it is still a relatively new space.) Brands are seeing more engagement and sales via Substack vs Instagram/other social media. Brands like Tory Burch and Sporty & Rich are also exploring how to use Substack as a brand/retailer.
System Magazine wrote about the powerhouse Co-CEOs of The Lede Company, the new way of doing PR and publicity in a world that reacts quickly, needs immediate responses, and the line between person/brand/celebrity/business is constantly be blurred. It is a super interesting article in a new way of managing talent and opportunity.
Dorsey founder
was interviewed by Designmilk on her experience of being an entrepreneur.Orange County Museum of Art will have an exhibit “Yves Saint Laurent: Line and Expression” opening on June 28.
Coach seems to have hit a home run with their Tabby bag and they are leaning into the ability to iterate and rollout additional versions.
I’m worried about women everywhere. NY ladies hope y’all are okay.
LOL - Facebook Marketplace humor. For anyone attempting to sell products in a marketplace this made me laugh.
In honor of Cowboy Carter, this is a great rodeo round-up from Vogue.com.
I thought the embroidered Chanel was the new ballet flat this spring (a la LY’s Denim Quilted Chanel ballet flat.) Then the white or black Mary Jane ballet. Now I’m thinking it is the robins egg blue (Morgan Stewart and Gab Waller are both fans.) Maybe I need to do a Ballet Flat Fashion 🌀 Spiral - this shoe is the hero of my closet!
What's Next?
Later this week (Friday??) my Fashion Spiral on Trench Coats will be published. I’ve been having fun exploring the history and pop culture trends around this classic and traditional lightweight coat. Next week I’m taking a mini break so you might see lighter posts from me, or less posts but who knows. You likely have realized I don’t give myself much of a break and I’m enjoying writing Sarah’s Retail Diary too much!! Seriously, thank you to everyone for commenting, chatting, reaching out, sharing. It means so much to me.
Industry wise, I’m expecting we will be seeing lots of “festival season” posts and plenty more beauty news.
Thanks for reading Deep Dive Edition 158
Sarah Shapiro
Recent Posts:
Tuesday’s This Will Be Quick 3.25.24 - Fashion & Canceling, Algorithms & Style and more
Sunday’s Sunday Scoop - Piccioli, Beckham & Substacks to Scroll
Last Week’s Deep Dive - Week of March 18th 2024 - iconic tailor's legacy, Dries Van Noten's retirement & Beauty News
Fashion 🌀 Re-Spiral: Seeing Stripes and Fashion 🌀 Spiral Kick Flare Pant Trend (there is still no pant I’ve been wearing more than my favorite Kick Flares lately)
Retail 101: Math & Financials & Retail 101: Math & Financials Part Deux on Markdowns
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often via Jobbers - product that isn’t sold in stores and needs to be liquidated it often sold to off-price retailers via Jobbers.
The Yves Saint Laurent exhibit in OC is the best thing to happen here since, well, “The OC” 🤣
As always, a fabulous read that leads me down more than a few rabbit holes! Thank you for sharing 🤍