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As the social media-fired brand expands its retail operation with new locations in London, Dubai and beyond, Grede told WWD that business is often misunderstood.

Kim Kardashian is a creature of the social media world — with 344 million Instagram followers she might just be the queen of it.

But Skims — the brand she cofounded with Jens and Emma Grede in 2019 — has its real base in something much more tactile.

The market, the media and the world at large have oversimplified Skims, said Jens Grede, chief executive officer, in an interview ahead of the opening of the brand’s London flagship, which is part of a new retail push.

“They miss that — beyond the celebrity campaigns and the collaborations with Fendi or Dolce & Gabbana or partnership with Nike, or beyond the Will Ferrells or Hailey [Bieber] or even Kim — what Kim and I really designed is a fabric company first and foremost,” Grede said.

“We don’t really engage so much in collections as we engage in fabrication,” he said. “The press tries sometimes to talk more about the thing that’s more visually gratifying. What they miss is the fact that the business is built on soft lounge.”

He pointed to Skims’ Everyday Cotton line, which renders the brand’s signature fit and comfort in natural cotton, as an example.

“Everything else is wonderful to engage with the world and make people excited and bring people in and build this cultural moment,” he said. “But at the heart of it is really a fabric business.”

If Skims’ base is built on something so tangible, it’s fitting. The brand’s future is also clearly physical.

“Eighty percent of our category is bought in physical retail,” Grede said. “I want to be in the 80 percent business rather than the 20 percent business. I want to be in the 100 percent business.”

Including London, which opens Thursday, Skims has 27 company-operated stores as well as two doors in Mexico and, as of this week, two in the United Arab Emirates that are run by partners. The brand is also looking to open in Seoul later this year and, after that, Delhi and Mumbai.

Skims will have 55 stores by the end of this year and Grede plans to have more than 100 by the end of 2027.

“I want to do business the way that my customer wants to shop the brand,” he said. “The most frequently asked question we get is, ‘When are you going to open [a store near me]?’ And the brand is actually still underrepresented in terms of physical presence.

“In New York, we have a phenomenal flagship on Fifth Avenue, but Manhattan isn’t the one-store market,” he said. “Manhattan by itself in our category might be a three- or four-store market.”

Skims’ retail push began in the U.S. and Grede said the market there is a couple years ahead.

“The U.S. strategy has also really been about opening important stores in the most important American cities and the most important retail destinations in the U.S., which is really a combination of key street locations as well as let’s say the Tier A malls,” he said.

Grede doesn’t have a set target for how many retail stores to ultimately open, but he said the approach is “fiscally disciplined.”

“We have a good 200 to 300 Tier A retail locations around the world before we would start taking a step down,” he said. “We’ll monitor that as we get further into our retail rollout. I’ve been very focused on making sure that the box and the concept of how we do retail really works.”

Going big seems to work for Skims, as it does for Kardashian herself.

The new Regent Street flagship in London has some 12,000 square feet of selling space in the middle of one of the world’s most-important shopping districts.

“We’re on the 50 yard line next to Apple [with a] corner store,” Grede crowed. “We put together two stores to make it happen.”

Designed by Rafael de Cárdenas Ltd., the location features the brand’s most expansive offerings in the U.K., bringing together signature collections and seasonal launches across underwear, shapewear, loungewear, menswear, accessories and NikeSkims.

The new UAE store, which opened on Tuesday, covers 6,200 square feet in the Dubai Mall.

Grede said Skims still operates retail with a “one world, one concept” approach, but will start to modulate the offering.

“I’m sure we will make adaptations and learn each and every market in terms of their preferences and make sure that we stay relevant in the assortment, fit and sizing,” he said.

As Skims continues to flesh out its retail business, it will have a natural growth story to tell future investors — current investors already like the story, giving the seven-year-old company a $5 billion valuation in a fundraising round last year.

But while the company has long been seen as one of fashion’s strongest potential IPOs, Grede is not racing toward Wall Street.

“Good companies have good options,” he said. “My focus has been to build a good company together with Kim. We don’t feel that we have any pressure to go public right now, nor do I think that the market is particularly forgiving for consumer [products companies]. But over time we are becoming a large company, but we have institutional investors and it is our responsibility to offer them optionality into the future. We’re very lucky that we have a group of investors that are not giving us any particular time pressure. It will happen when the time is right.”

In the meantime, Skims will continue to live at “the intersection of culture and commerce,” said Grede, who also puts the brand somewhere between the traditional intimates and lounge categories.

“We are our own category,” he said. “We really have carved our own niche in the concept of intimates and lounge. And I think that we’re the home of that wherever we open up.

“I remember Remo Ruffini of Moncler telling me once, they were asking him, ‘How many more of these black ski jackets can you sell?’ And turned out you could sell quite a few,” Grede said.

“Just like Moncler created a category of fashion ski performance and Lululemon defined the yoga and athleisure category, I believe Skims is on its way to define the category between intimates and lounge,” he said.

If that sounds ambitious — and it is — that doesn’t mean that Kardashian and Grede & Co. can’t do it.

Skims, for all the time it’s spent in the spotlight, is used to being overlooked.

“The brand has been somewhat underestimated for a long period of time,” Grede maintained. “I understand why because we have a cofounder that’s one of the most famous women in the world.

“At first they said it was Kim and then people said it was online. And first they said it was shapewear and then they said it was underwear. And then they said it was American. And then it turned out that it was global. And then they asked us if we could do stores.”

With plans to quadruple Skims’ retail presence in the next 18 months, Grede is preparing his answer to that last one right now.

Rivers and water flows low as evaporation rates rise in extreme warm conditions, study finds

Europe was suffering a “flash drought” after a series of heatwaves starting in spring drove an “atmospheric thirst” as a result of climate change, particularly affecting central and eastern countries, scientists said.

The drying of river systems in Italy, France, Poland, England, the Rhine and the Danube has disrupted cargo, threatened hydropower, hit harvests and led to some countries putting bans on non-essential water use.

Scientists from 12 European countries in the World Weather Attribution group found that long-term rain patterns varied widely and western Europe had started the year with more winter rainfall than the east.

But the series of early heatwaves starting in May had made the onset of drought more rapid as the warmer air had dried out soil more quickly.

Imperial College researcher Theodore Keeping described a “flash drought, where basically these extreme hot, dry conditions drive a much more rapid drying of that soil bed than we have seen historically in a lot of places”.

The WWA group, which tracks the relationship between weather shifts and climate change, analysed trends in rainfall, soil moisture and evaporation potential.

The study of this year’s trend was not yet peer-reviewed but found that across western Europe in the April-to-June study period, a lack of rain was not clearly driven by climate change.

But extreme heat driven by global warming had made it about 80 times more likely that the evaporation potential was increasing, it concluded.

Across eastern Europe, from the January-to-June study period, heat-driven evaporation potential was made about 40 times more likely.

“Despite more wintertime rainfall across most of Europe, we now see an enhanced tendency for unusual soil drying already in spring, before summer has even begun,” said Dominik Schumacher of the Institute for Atmospheric and Climate Science at ETH Zurich.

“That is our own doing: as temperatures climb, the atmosphere’s thirst increases quickly, sucking moisture out of rivers, lakes, reservoirs and the soil.”

The UK has put in place bans on the use of hosepipes, and the Netherlands last week lifted its drought scale to level 2, or an “actual water shortage” with measures needed to manage water supplies.

Prolonged dry conditions affecting the Rhine and wider basin have also put pressure on water resources in parts of the Alps, Germany, France and Belgium, while the Danube water levels in Romania were the lowest since 1996.

The early wet period in western Europe, including Spain, France and Portugal, had encouraged the growth of vegetation that then became quickly very dry, providing the “prime ingredients” for wildfires, Schumacher said.

An EU directive about water management was not mandatory and shifts would be needed for continent-wide adaptation measures, said Merel Laauwen of Wageningen University in the Netherlands, to deal with disparate leakage and water-reuse policies for industry and agriculture.

“Knowing what we know about how climate change is shortening the return periods of these severe drought events, which also means less recovery time in between, there are some shifts needed for adaptation across the continent,” she said.

On Tuesday, OpenAI revealed that one of its models went rogue during a test and hacked the systems of AI dataset platform Hugging Face in a fully AI-enabled attack, a dramatic example of the dangers posed by advanced AI models.

But, according to some cybersecurity experts, at the heart of this unprecedented AI-powered breach there was a very human mistake: OpenAI failed to properly configure what it called a “highly isolated environment,” allowing a testing sandbox that should have been completely secluded from the internet to actually connect to the internet.

Dan Guido, the founder of cybersecurity research startup Trail of Bits, called the mistake “a containment failure with the safeties turned off.”

In its blog post detailing the incident, OpenAI said that the test that led to the Hugging Face breach was set up to run in “a highly isolated environment, with network access constrained to the ability to install packages through an internally hosted third-party software that acts as a proxy and cache for package registries.”

The model was able to escape the sandboxed testing environment thanks to a previously undisclosed vulnerability in the package-installation system, a critical first step in the eventual hack on Hugging Face, according to OpenAI.

In response, the company “responsibly disclosed the identified zero-day vulnerability in the internally-hosted third-party software and are working with them to patch.”

But to most cybersecurity professionals, software vulnerabilities are to be expected — and the real fault lies with the decision to maintain the third-party software in the first place. Ultimately, the value of a “sandbox” system lies in its full and total isolation. Including a package-installation system is asking for trouble.

Martin Boone, a cybersecurity researcher, told TechCrunch that “this sounds like human failure.”

“This should never have happened,” Boone said. “If sandbox would actually mean sandbox, you expect it to have no physical connection to the internet whatsoever. This sounds more like they had some firewalling or something in place, and firewalling is hard from the outside in, let alone inside to the outside internet.”

Cybersecurity veteran Jake Williams agreed. “Any model performing the types of actions documented by Hugging Face was not fully contained in a sandbox,” said Williams, who called this “a massive control failure” by OpenAI.

“One man’s ‘the model escaped the sandbox’ is another man’s ‘you failed to build the sandbox correctly, so of course it escaped,’” Williams continued.

Daniel Card, a cybersecurity consultant, agreed that OpenAI “didn’t put adequate effort into the design of the sandbox nor its controls” by giving the sandbox or some part of it “an unfiltered route to the internet.” Setting up the sandbox, even with limited network access as OpenAI described it, was not a “reasonable” decision, according to Card.

To be sure, those criticisms have the benefit of hindsight, but they raise real questions about security practices in AI labs — particularly in maintaining isolated environments for testing models. OpenAI spokespeople did not respond to TechCrunch’s questions, which included whether an AI or a human had set up the testing environment.

But those questions go far beyond OpenAI.

In the document introducing its cybersecurity-focused model Mythos, Anthropic wrote that in a test, the model “was provided with a secured ‘sandbox’ computer to interact with,” and instructed to try to escape that “secure container.” Mythos succeeded and gained broader access to the internet “from a system that was meant to be able to reach only a small number of predetermined services.” Still, Anthropic noted that the model was not able to “fully” escape the designed containment.

Buyers can pitch themselves as liquidity providers to fund managers

Markets, like nature, abhor a vacuum. So when there is a surfeit of sellers, a new coterie of buyers will emerge. That’s what is happening in the private credit space, where a relatively new asset class — the private credit secondary fund — is set to take advantage of recent disruptions. 

Private credit secondaries, like their namesakes in the private equity world, mostly pick up assets that others need to offload. That can mean buying stakes in funds from investors who want out, or buying loans that are housed in the fund and that the manager would like to turn into cash. 

Demand for that sort of liquidity is increasing. Older private credit funds aimed at institutional investors need to return cash to their investors. And semi-liquid funds aimed at retail investors have suffered a stampede of exit requests.

Investors, concerned that the underlying loans may be overly exposed to AI-threatened software stocks, have been asking managers to redeem much more than the quarterly 5 per cent of net asset value that semi-liquid funds usually promise. Even though outflows were mostly restricted to this level, investors pulled a net $1.8bn out of the 10 largest credit funds in the first quarter, according to Morningstar.

The question for semi-liquid fund managers is how to manage such requests. A quarterly 5 per cent is a fifth of the fund per year: yields, loan turnover and on-hand liquidity may need supplementing if the outflows are prolonged. Hence the opportunity for secondaries investors. They can either turn hostile and try to take advantage of the stampede to buy loans directly from spooked retail investors — a strategy Boaz Weinstein unsuccessfully tried at Blue Owl — or pitch themselves as liquidity providers to the fund managers.

Selling a strip of loans to a special purpose vehicle capitalised by a secondary investor isn’t a bad way for a semi-liquid fund to secure access to more cash, especially if it gets to keep management fees on the loans. And, depending on the pressure that the specific fund is under, buyers may be able to extract a good deal. Even if the loans are priced at NAV, buyers can hammer down their effective entry point by deferring payment, for example.

It may help that, despite rapid growth, there are still not many private credit secondary funds around. Ares Management raised a relatively large $7bn from institutional investors earlier this year. Overall, assets under management are in the tens of billions, compared with well over $2tn for the private credit industry.

Even unstressed semi-liquid funds may benefit from having the option to raise extra cash. There is at least an argument to be made that investors, clocking the crush for the door, are asking for more money than they hope to receive. Should funds decide to redeem more than 5 per cent of NAV, it might help deflate headline requests, too.

Carve-outs of loans from semi-liquid funds are a new phenomenon. And, should the underlying credit quality be an issue, they would simply be moving the problem around. Still, they look like a useful addition to the toolbox given how far private credit has ventured down the retail path.

Rivers and water flows low as evaporation rates rise in extreme warm conditions, study finds

Europe was suffering a “flash drought” after a series of heatwaves starting in spring drove an “atmospheric thirst” as a result of climate change, particularly affecting central and eastern countries, scientists said.

The drying of river systems in Italy, France, Poland, England, the Rhine and the Danube has disrupted cargo, threatened hydropower, hit harvests and led to some countries putting bans on non-essential water use.

Scientists from 12 European countries in the World Weather Attribution group found that long-term rain patterns varied widely and western Europe had started the year with more winter rainfall than the east.

But the series of early heatwaves starting in May had made the onset of drought more rapid as the warmer air had dried out soil more quickly.

Imperial College researcher Theodore Keeping described a “flash drought, where basically these extreme hot, dry conditions drive a much more rapid drying of that soil bed than we have seen historically in a lot of places”.

The WWA group, which tracks the relationship between weather shifts and climate change, analysed trends in rainfall, soil moisture and evaporation potential.

The study of this year’s trend was not yet peer-reviewed but found that across western Europe in the April-to-June study period, a lack of rain was not clearly driven by climate change.

But extreme heat driven by global warming had made it about 80 times more likely that the evaporation potential was increasing, it concluded.

Across eastern Europe, from the January-to-June study period, heat-driven evaporation potential was made about 40 times more likely.

“Despite more wintertime rainfall across most of Europe, we now see an enhanced tendency for unusual soil drying already in spring, before summer has even begun,” said Dominik Schumacher of the Institute for Atmospheric and Climate Science at ETH Zurich.

“That is our own doing: as temperatures climb, the atmosphere’s thirst increases quickly, sucking moisture out of rivers, lakes, reservoirs and the soil.”

The UK has put in place bans on the use of hosepipes, and the Netherlands last week lifted its drought scale to level 2, or an “actual water shortage” with measures needed to manage water supplies.

Prolonged dry conditions affecting the Rhine and wider basin have also put pressure on water resources in parts of the Alps, Germany, France and Belgium, while the Danube water levels in Romania were the lowest since 1996.

The early wet period in western Europe, including Spain, France and Portugal, had encouraged the growth of vegetation that then became quickly very dry, providing the “prime ingredients” for wildfires, Schumacher said.

An EU directive about water management was not mandatory and shifts would be needed for continent-wide adaptation measures, said Merel Laauwen of Wageningen University in the Netherlands, to deal with disparate leakage and water-reuse policies for industry and agriculture.

“Knowing what we know about how climate change is shortening the return periods of these severe drought events, which also means less recovery time in between, there are some shifts needed for adaptation across the continent,” she said.

Francisco Partners co-founder Dipanjan ‘DJ’ Deb says AI will not kill software sector as firm raises $21bn

Private equity takeovers of software groups are at a turning point as investors hunt for bargains among companies at risk of being disrupted by AI, the co-founder of one of the buyout industry’s biggest players has said.

The valuations of software companies collapsed earlier this year amid fears about how AI will disrupt their businesses. However, markets have underestimated its potential to help many companies become more efficient and grow faster, according to Dipanjan “DJ” Deb, co-founder of Francisco Partners, a technology-focused private equity firm with $75bn in capital raised.

“AI will not kill the software industry, but it will create a dispersion of winners and losers. For some companies, their [long-term valuations] are permanently impacted, but for others people will realise that not only do they have strong moats, but they will be able to have a greater market to sell to,” Deb told the FT.

His comments come as the San Francisco-based firm completed the first large fundraising for a software-focused PE group since AI worries fuelled a February market sell-off.

Francisco Partners raised $21bn in new cash since the beginning of the year in a fundraise that exceeded its $18bn target. Kirkland & Ellis advised on the capital raise.

The firm was set up by Deb and a group of investors including the late technology banker Sanford Roberts in 1999. It held a first close for the fundraising following February’s “SaaS-pocalypse”, in which software valuations tumbled after the release of Anthropic’s Claude Code AI tool raised fears about the future of many tech firms.

The successful fundraising underscores some institutional investors’ willingness to plough new cash into a sector where takeover multiples have fallen and growth rates and profit margins may now be underestimated, according to Deb.

“If you look at the history of private equity, when you buy right, you tend to make a lot of money — and valuations are at their lowest level in a long time,” he said.

While Deb conceded that some of Francisco Partners’ tens of billions of dollars in software PE investments “will have issues by virtue of what’s happened”, he added that “there should be great opportunities”.

The veteran technology investor, whose portfolio includes cyber security firms Barracuda Networks and Jamf, predicted that while vintages of private equity funds raised in 2021 and 2022 will struggle after deals were struck at heady valuations, the coming funds in the industry could be strong performers.

Francisco Partners has been among the PE industry’s fastest-growing firms over the past two decades, growing from just a few billion dollars in assets into one of the $4tn industry’s largest players and matching a trajectory of specialist rivals such as Thoma Bravo and Vista Equity Partners.

However, Francisco Partners is the first large-cap software investor to close a fundraise since markets were disrupted earlier this year.

The firm’s funds have historically been among the industry’s strongest performers. Its 2011 and 2015-era funds returned more than three times investors’ original commitments, according to filings from California pension funds.

Francisco’s newer 2018 fund has already returned nearly 100 per cent of investors’ cash and generated a net internal rate of return of 18.4 per cent, according to the filings.

Deb said credit markets remained open to funding software buyouts but the cost of financing packages had risen, reflecting investors’ uncertainty over AI risks and some retail-focused credit funds lowering their new commitments.

He also warned that investors had grown overly excited about the future of AI companies, whose valuations have soared to unprecedented levels, and underestimated the risk that some companies would fail — just as some internet start-ups such as Netscape did in the dotcom era.

“I think we’re sitting on a massive AI bubble. This reminds me of 2000,” Deb said.

Swiss food group’s new leaders are attempting a sweeping turnaround after years of underperformance

Nestlé’s shares suffered their biggest drop since 2020 after the Swiss food group’s sales disappointed and profit margins were squeezed by high coffee and cocoa prices.

Shares in the KitKat maker fell almost 7 per cent on Thursday after it said it expected its operating profit margin would be “broadly similar” in the second half of the year to the first after previously forecasting stronger margins.

The negative investor reaction comes as Nestlé’s new leaders attempt a sweeping turnaround to rectify years of underperformance. New chief executive Philipp Navratil and chair Pablo Isla, the former Inditex boss, have simplified the group’s sprawling organisational structure and sold off parts of its portfolio.

Shares had risen in the run-up to earnings over expectations that the group’s second-quarter results would show a 2 per cent rise in sales volumes.

However, sales volumes rose only 1.8 per cent in the second quarter of the year, in line with consensus analyst estimates but lower than some had forecast.

“Given the rally, we don’t think the [volume] print is quite good enough,” said Barclays analyst Warren Ackerman.

The company’s operating profit margin fell 0.1 percentage points year on year to 16.4 per cent in the first half, held back by higher coffee and cocoa prices. Operating profit fell 2.8 per cent to SFr7.1bn ($8.7bn).

Nestlé said its operating margin was also affected by increased marketing spend, tariffs and its global infant formula recall earlier this year. The group has been forced to issue recalls for products potentially contaminated with cereulide, a toxin that can cause nausea and vomiting.

Bernstein analyst Callum Elliott said the change to margin guidance for the rest of 2026 “takes the shine off” Nestlé’s earnings.

Despite the margin downgrade and weaker than expected volumes, Nestlé reported better than expected revenues in the second quarter of the year. Sales rose 3.7 per cent, driven by price rises of 1.9 per cent.

Nestlé also announced it had formed a multibillion-euro joint venture for its water business with private equity firm Platinum Equity in a deal that will raise €3bn for the Nespresso maker.  

The new company, called Peranel, will be a 50-50 joint venture valued at €4.9bn. It will comprise 30 brands sold in 120 countries, including San Pellegrino, Perrier and Acqua Panna.