Last week, Walmart completed the full selloff of the last of its DTC portfolio by selling Eloquii. Elsewhere, Gucci was investigated by the E.U.’s antitrust regulators, luxury resale platform Cudoni shut down, and LVMH shifted resources out of Hong Kong. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes, and the Glossy Beauty Podcast for interviews from the beauty industry. —Danny Parisi, sr. fashion reporter
Walmart sells off Bonobos and Eloquii
Just a week after agreeing to sell Bonobos to Express, Walmart struck a deal to sell another of its DTC acquisitions. On Friday, Walmart announced its sale of the extended-size brand Eloquii to FullBeauty Brands for an undisclosed sum. Walmart bought Eloquii in 2018 for $100 million.
In the mid-2010s, Walmart went on a spree of buying online DTC startups including Eloquii, Bonobos, Moosejaw and Modcloth. It sold Modcloth in 2019 and sold the other three all this year — starting with Moosejaw in February — signaling an end to that DTC experiment.
Walmart, like many companies across the industry, is looking to cut underperforming aspects of its business and focus on fewer but more successful pieces. For Walmart, a major continued focus is its investment in its shipping infrastructure, seeing as it’s one of the few companies that can compete with Amazon on that front.
Gucci investigated by EU antitrust regulators
Regulators from an E.U. antitrust group have begun inspecting Gucci facilities across Europe, exploring the possibility that the Italian brand has violated the E.U.’s antitrust policies.
Reuters initially reported the news on Tuesday and confirmed it with Gucci’s parent company on Wednesday. There isn’t much detail available beyond that, besides the fact that Kering said it is complying with the investigation. Luxury conglomerates including Kering and its rival LVMH are among the largest companies in Europe. LVMH owner Bernard Arnault is currently the richest man on earth. If Kering is found to be in violation of antitrust laws, it could be fined 10% of its global revenue.
LVMH pulls out of Hong Kong amid declining sales
Despite its surging sales across the board, LVMH is reportedly pulling resources out of Hong Kong to focus its China business on the mainland, according to Bloomberg. Already, LVMH has moved several Chinese headquarters and offices for its various brands that were based in Hong Kong to Shanghai.
The shift was blamed on anti-government protests in Hong Kong coupled with long Covid-related shutdowns damaging luxury brands’ prospects in the city. LVMH’s sales in Hong Kong have been slow to recover, while it expects sales in the mainland to double from pre-pandemic levels this year.
Cudoni shuts down
Speaking of slow luxury recovery, the luxury resale platform Cudoni announced on Friday that it will be shutting down permanently. The company raised nearly $10 million only a few months ago. In a statement, the company said that continued operation had become impossible due to the rising costs of business and a bleak economic outlook.
Cudoni’s shutdown comes at a time when resale as a category is flourishing. But much of the growth in fashion resale in recent months has been in the branded resale space through partners like Archive and Recurate. Dedicated resale platform The RealReal, meanwhile, recently enacted layoffs in an attempt to reach profitability.