Last week, a flurry of earnings showed that a near-future return of shopping in China is unlikely. Elsewhere, SaksOff5th upped its focus on e-commerce, and LVMH set its sights on acquiring Cartier. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes, and to the Glossy Beauty Podcast for interviews centered on the beauty industry. –Danny Parisi, sr. fashion reporter
LVMH sets sights on Cartier
According to a report from the Swiss newspaper Finanz und Wirtschaft, LVMH is eyeing a takeover of competitor Richemont. If that’s not possible, LVMH wants to acquire Cartier from Richemont, as a complement to Tiffany & Co. which it bought in 2021, per the story.
Taking ownership of Cartier, best known for its high-end jewelry and Tank watch, would help LVMH grow its jewelry segment to match its dominance in leather goods and bags. According to the report, Johann Rupert, patriarch of the Rupert family which has a controlling stake in Cartier, is averse to the sale and will attempt to resist it.
While Richemont may be one of LVMH’s main competitors along with Kering, the two are quite lopsided in size. LVMH’s annual revenue in 2022 was north of $83 billion, while Richemont’s was $22 billion.
Luxury earnings show China is still an open question
China continues to be a question mark for luxury brands, according to recent earnings reports. After China lifted its zero-Covid policy in December, rising infections in the region disrupted many brands’ plans. On Thursday, MyTheresa’s earnings showed that its sales in China heavily contracted in the last quarter, leading to overall slowed sales and just a 1% increase in overall revenue. Also on Thursday, Farfetch blamed its lower quarterly sales on the loss of business in Russia and low demand in China. Total sales in China across its brands have dropped about 2% since December.
But not every brand operating in China has seen the same problems. Alibaba said that increased demand in China helped boost its business, leading to a 2% rise in revenue.
Farfetch is hoping a turnaround in China is just around the corner. The company also expects the layoffs and office closures it enacted earlier this year will help take $85 million off its expenses. It has goals of increasing its profits by 10% this year and reaching $10 billion in revenue by 2025.
SaksOff5th focuses on e-commerce and loyalty
SaksOff5th hired Julie Mares, an e-commerce veteran who’s worked at UnTuckit and Gucci, in a critical new digital role of svp of e-commerce. The company’s CEO, Paige Thomas, said last week that the hire is part of a reshifting of priorities.
According to Thomas, no one person or department was in charge of SaksOff5th’s e-commerce experience. Mares’ goal will be to oversee every element, from the online store to the app to the digital loyalty program.
SaksOff5th’s investment in e-commerce comes at a time when many brands and retailers are turning their focus back to brick-and-mortar. Online sales across brands had a huge boom in 2021 but slowed by the beginning of 2023. But Thomas sees the company’s digital loyalty program, which has attracted 1.6 million members since its launch less than a year ago, as key to its further growth. And, she said, e-commerce needed to grow that program.