>>> Up
* AAK Raised to Buy at ABG; PT 360 kronor
* Aviva Raised to Overweight at JPMorgan; PT 615 pence
* Bachem Raised to Equal-Weight at Barclays; PT 65 Swiss francs
* Big Yellow Group Raised to Buy at Berenberg
* BMW Raised to Buy at Berenberg
* Cargotec Raised to Buy at SEB Equities; PT 57 euros
* Cargotec Raised to Buy at SEB Equities; PT 57 euros
* Coloplast Raised to Buy at HSBC; PT 920 kroner
* Corticeira Amorim Raised to Buy at JB Capital Markets
* Elisa Raised to Buy at Kepler Cheuvreux (+)
* Halma Raised to Buy at Berenberg; PT 3,250 pence
* Hannover Re Raised to Buy at HSBC; PT 280 euros
* JM Raised to Hold at SEB Equities; PT 173 kronor
* LDA SM Raised to Neutral at JB Capital Markets; PT 1.10 euros
* Millicom GDRs Raised to Buy at HSBC; PT 380 kronor
* Millicom Raised to Buy at HSBC; PT $34 (+)
* Munich Re Raised to Buy at HSBC; PT 560 euros
* Netflix Raised to Buy at Canaccord; PT $1,150
* Netflix Raised to Equal-Weight at Barclays; PT $900
* Netflix PT Raised to $1,150 from $1,000 at TD Cowen (+)
* Suedzucker Raised to Hold at M.M. Warburg; PT 10.40 euros (+)
* Vestas Raised to Buy at Jefferies; PT 135 kroner
* Virbac Raised to Buy at IDMidcaps; PT 410 euros (+)
>>> Down
>>> Down
* Ambev ADRs Cut to Neutral at Grupo Santander; PT $3.56
* Amedeo Air Four Plus Cut to Hold at Jefferies
* America Movil ADRs Cut to Hold at HSBC; PT $15.50
* Apple Cut to Fully Valued at DBS Bank; PT $210 (+)
* Carrefour Cut to Underperform at BNPP Exane; PT 11 euros (+)
* DFDS Cut to Sell at Nordea; PT 108 kroner
* Flow Traders Cut to Neutral at Oddo BHF; PT 25 euros
* Hochschild Mining Cut to Sector Perform at RBC; PT 260 pence (+)
* JD Sports Cut to Neutral at Citi; PT 95 pence
* Mercedes Cut to Hold at Berenberg
* Porsche SE Cut to Hold at Berenberg
* Schaeffler Cut to Hold at Deutsche Bank; PT 4.50 euros
* STMicro Cut to Underweight at Barclays; PT 20 euros
* STMicro Cut to Underweight at Barclays; PT 20 euros
* Swiss Re Cut to Hold at HSBC; PT 140 Swiss francs
>>> Initiation
>>> Initiation
* Alfa Financial Rated New Buy at Shore Capital; PT 270 pence
* Bilia Reinstated Buy at Pareto Securities; PT 150 kronor
* Dassault Systemes Rated New Outperform at Grupo Santander
* Geberit Rated New Underweight at JPMorgan; PT 450 Swiss francs
* Kaufman & Broad Rated New Buy at Kepler Cheuvreux (+)
* Lindab Rated New Hold at SEB Equities; PT 200 kronor
* Lindab Rated New Hold at SEB Equities; PT 200 kronor
* PolyPeptide Group Rated New Overweight at Barclays
* Sunrise Communications Rated New Buy at Redburn
* Transense Technologies Rated New Corporate at Cavendish (+)
>>> Call
>>> Call
* Aviva Raised to Overweight at JPMorgan on Direct Line Deal (+)
* Bachem Raised to Equal-Weight at Barclays on Valuation Pullback (+)
* Delivery Hero Slides as BofA Reinstates Rating as Underperform
* Delivery Hero Slides as BofA Reinstates Rating as Underperform
* Geberit Rated Underweight at JPMorgan, Earnings Risk Not Priced
* Morgan Stanley Starts Operations of Futures Company in China (+)
- Adidas (ADS TH) +4%
- Adidas Rises on Sales Beat, Strong Brand Momentum: Street Wrap
- Aviva (GU81 TH) +2.7%
- Aviva Raised to Overweight at JPMorgan; PT 615 pence
- BAE (BSP TH) +1.7%
- Vestas (VWSB TH) +1.5%
- ASML (ASME TH) +1.5%
- Novo Nordisk (NOV TH) +1.4%
- Orsted (D2G TH) +1.3%
- Thales (CSF TH) +1.2%
- Amundi (ANI TH) +1.1%
- Hannover Re (HNR1 TH) +1.1%
- Porsche SE (PAH3 TH) -0.9%
- Porsche SE Cut to Hold at Berenberg
- Carrefour (CAR TH) -1%
- French Food Retail Doesn’t Get Volume Boost From Banner Changes
- Porsche (P911 TH) -1%
- Qiagen (QIA TH) -1.1%
- Norsk Hydro (NOH1 TH) -1.5%
- STMicro (SGM TH) -1.5%
- STMicro Faces Key Customer Risks But AI Power Strong: 4Q Preview
- STMicro Cut to Underweight at Barclays; PT 20 euros
- Frontline Plc (HF6 TH) -2.1%
Where’s the (implied) volatility?
There is a new American president with an economic agenda that is long on radical ideas and short on specifics. We have just endured the first major inflationary incident in decades — and it may not be over yet. Stocks are at extremely high valuations and long-term bonds yields are in flux. Federal Reserve monetary policy rests on a razor’s edge. Uncertainty, in sum, appears to be everywhere. Why, then, are indices of implied — that is expected — stock and bond volatility so low?
The Vix index, the options-implied movement of the S&P 500, moved down yesterday, and at 15 it is below the threshold usually taken as a sign of market fear. The Move, the equivalent index for Treasury yields, is trading in its usual band. The implied volatility of investment-grade credit spreads is near a multiyear low, too.
These indices are based on the prices investors are paying for portfolio insurance, in the form of put and call options. Shouldn’t insurance be expensive right now? One explanation is that there is too much policy uncertainty. As a result, there is not much speculation in the options market, which suppresses volatility indices. From Russell Rhoads, head of research at EQDerivatives:
Most professional traders seem to be in a wait-and-see mode. Wait-and-see implies they are not putting new hedges and not speculating too much, as they don’t know what is coming around the bend . . . For the Vix to be active, you need a lot of activity in the index options.
The same logic applies to the Move. Traders still don’t know how to price Donald Trump’s unique mix of populist and conservative policy promises. The market, perhaps, is like a deer in the headlights.
Another possibility: there was a mechanical flow-through from good recent earnings and economic results to lower implied volatility. Fourth-quarter earnings results have been strong so far, causing a rally for those who have reported, but not for those who haven’t. Last week’s inflation print was not as dire as many predicted. According to Garrett DeSimone at OptionMetrics, those both “translate to lower market volatility”: diverging equity performace lowers correlation, in turn lowering the Vix, and the fall in inflation expectations pulls down bond yields, “which would be supportive of both a lower Vix and a lower Move”.
That does not mean that there is no volatility in markets. Trump’s tariff threats have appeared, logically enough, in currency markets. Rates svengali Ed Al-Hussainy at Columbia Threadneedle notes that:
Markets have focused on foreign exchange as the key adjustment mechanism in response to tariffs (higher tariffs = stronger dollar). The rest of the policy mix — immigration/taxes/regulation/etc — is too amorphous to price. This leaves a lot of room for last year’s positive economic/earnings growth story to continue driving risk higher.
At some point, policy proposals will turn into policies, for good or ill. Until then, the usual “fear gauges” might not tell you much.
Will Luxury Bounce Back in 2025? It’s Hard to Call
Richemont's surprise 10 percent uptick in third-quarter revenue sent a jolt of energy — and hope — through the markets, but analysts remain divided as to whether the luxury giant's success signals a wider recovery.
LONDON — Is luxury on the rebound? It’s difficult to say.
Analysts are divided about the future of demand after the unexpected uptick in revenue at Richemont during the Christmas trading quarter, which prompted a surge in share prices last week at the big luxury groups.
In a flurry of reports this week, equities analysts from banks and brokers including Bernstein, Barclays, and RBC Capital Markets have been parsing Richemont’s surprising third-quarter results.
Some argue that Richemont’s gains point to better times ahead for the sector, while others believe the surge was specific to hard luxury — and to the power of the Richemont brands.
As reported, Richemont revenue rose 10 percent to 6.2 billion euros with double-digit gains in all regions except for China, where demand continues to stagnate. Revenue beat consensus by 9 percent.
On Thursday, Richemont’s shares closed up more than 16 percent and lifted those of its luxury peers including LVMH Moët Hennessy Louis Vuitton, which rose more than 9 percent, and Kering, which was up more than 6 percent.
The Richemont effect has continued to buoy luxury stocks since then, while in his report Bernstein’s Luca Solca said Tuesday that the sector is now “back in vogue after spending a few months in the penalty box.”
Solca named a few of the reasons behind luxury’s rebound. He said the “cyclical demand environment” has improved sequentially nearly everywhere, and added that all nationalities are now spending more year-on-year than in the third fiscal quarter of 2024 “even if the Chinese stay on the back foot.”
He believes that the tide of changes “will lift all boats.”
Solca added that jewelry in particular is experiencing stronger sales momentum compared with soft luxury because “it’s a lot cheaper than handbags today, in relative terms, and doesn’t face the same value for money challenge. This has been apparent for a few quarters, and is unlikely to change in the short term.”
Solca also pointed to Richemont’s own strengths, and portfolio of brands.
He said the group “provides clean exposure to hard luxury, has been even-handed on price increases, and holds the hottest hard luxury brands on the market today.” He acknowledged that Richemont occupies a “sweet spot” in the market, which he believes was a big contributor to the bounce in third-quarter sales.
Both Barclays and RBC also believe it was Richemont’s special positioning that fueled growth in the quarter, and suggested that investors shouldn’t necessarily get their hopes up regarding other luxury groups’ performance in the Christmas period.
In its report, “Shining Bright,” Barclays’ luxury goods team wrote that “Richemont is a positive read across the rest of the sector. However, we believe that the extent of growth acceleration at Richemont is also due to brand-specific factors [such as] the strong momentum of jewelry, newness at key brands Cartier and Van Cleef & Arpels, better availabilities of inventories, and space expansion.”
Barclays maintained its overweight rating on the stock and increased its price target to 175 Swiss francs from 150 Swiss francs following the publication of the Richemont results last week.
RBC Capital Markets also raised its price target on the Richemont stock to 170 Swiss francs from 145 Swiss francs.
The bank said Richemont’s revenue acceleration was down to “company-specific drivers including jewelry trends, perceived store of wealth and value for money, and brand momentum at Cartier and Van Cleef & Arpels” as well as the inherent strength of its brands.
The author of the report, Piral Dadhania, said “the extent to which we can read across Richemont results to the wider soft luxury space is not likely to be broad-based, but brand specific, with the winners likely to continue, and the laggards likely to remain so in the near term, in our view.”
Dadhania is expecting negative, near-term share price risk for the wider sector through the 2024 full-year reporting season, unless companies report better-than-expected results, or announce earnings upgrades, in what is still a “mixed” environment for luxury companies.
Cautious optimism might be the best approach for brands and investors alike. At least that’s what Richemont founder and chairman Johann Rupert would advise.
Rupert, who always takes the long view on business and market trends, said last year that “uncertainty has become the norm” in the luxury business, and the weakness in Chinese demand will take longer to recover.
OpenAI teams up with SoftBank and Oracle on $500B data center project
OpenAI says that it will team up with Japanese conglomerate SoftBank and with Oracle, among others, to build multiple data centers for AI in the U.S.
The joint venture, called the Stargate Project, will begin with a large data center project in Texas and eventually expand to other states. The companies expect to commit $100 billion to Stargate initially and pour up to $500 billion into the venture over the next four years.
They promise it will create “hundreds of thousands” of jobs and “secure American leadership in AI.”
“The Stargate Project is a new company which intends to [build] new AI infrastructure for OpenAI in the United States,” OpenAI, Oracle, and SoftBank said in a joint statement. “This project will not only support the re-industrialization of the United States but also provide a strategic capability to protect the national security of America and its allies.”
The companies made the announcement during a press conference at the White House on Tuesday, where President Donald Trump spoke about plans for investment in U.S. infrastructure. SoftBank chief Masayoshi Son, OpenAI CEO Sam Altman, and Oracle co-founder Larry Ellison were in attendance.
Microsoft is also involved in Stargate as a tech partner. So are Arm and Nvidia. Middle East AI fund MGX will join SoftBank in its investment; MGX’s first public deal was an investment in OpenAI.
SoftBank, OpenAI, and Oracle are also listed as “initial equity investors” in Stargate.
“SoftBank and OpenAI are the lead partners for Stargate, with SoftBank having financial responsibility and OpenAI having operational responsibility,” the statement continued. “Masayoshi Son will be the chairman [of Stargate] … As part of Stargate, Oracle, Nvidia, and OpenAI will closely collaborate to build and operate this computing system.”
The data centers could house chips designed by OpenAI someday. The company is said to be aggressively building out a team of chip designers and engineers, and working with semiconductor firms Broadcom and TSMC to create an AI chip for running models that could arrive as soon as 2026.
SoftBank is already an investor in OpenAI, having reportedly committed $500 million toward the AI startup’s last funding round and an additional $1.5 billion to allow OpenAI staff to sell shares in a tender offer. Oracle, meanwhile, has an ongoing deal with OpenAI to supply AI computing resources.
SoftBank also earlier pledged to invest $100 billion in the U.S. over the next four years. Son and Trump have had a close working relationship since 2016, during Trump’s first term, when Son announced that SoftBank would invest $50 billion in U.S. startups and create 50,000 jobs.
The Information previously reported that OpenAI was negotiating with Oracle to lease an entire data center in Abilene, Texas — a data center that could reach nearly a gigawatt of electricity by mid-2026. (A gigawatt is enough to power roughly 750,000 small homes.) Data center startup Crusoe Energy was said to be involved in the project, which was estimated to cost around $3.4 billion.
That Abilene site will be Stargate’s first site, and OpenAI says that Stargate is “evaluating potential sites across the country for more campuses as [it finalizes] definitive agreements.”
It’s unclear what connection, if any, Stargate has to a rumored partnership between Microsoft and OpenAI to spin up a $100 billion supercomputer. TechCrunch has reached out to OpenAI for additional information.
Last year, The Information reported that Microsoft and OpenAI would build a series of data centers for AI beginning in five stages over the next several years, culminating in Stargate: a 5-gigawatt facility spanning several hundred acres of land. Stargate was expected to take between five and six years to complete, according to The Information. In the lead-up to its completion, Microsoft had reportedly planned to launch a smaller-scope data center for OpenAI around 2026.
A number of tech leaders have called for the U.S. to up its investment in data centers, particularly as the AI industry continues to grow at an explosive pace. AI systems require enormous server banks to develop and run at scale.
Goldman Sachs estimates that AI will represent about 19% of data center power demand by 2028. OpenAI has blamed a lack of available compute for delaying its products, and compute capacity has reportedly become a source of tension between the AI company and Microsoft, its close collaborator and major investor.
Microsoft, which recently announced it is on track to spend $80 billion on AI data centers, said in a recent blog post that the company’s success depends on “new partnerships founded on large-scale infrastructure investments.” In an interview with Bloomberg, Altman said that he believes it is urgent that what he perceives as barriers to building additional data center infrastructure in the U.S. be cleared.
“The thing I really deeply agree with [President Trump] on is, it is wild how difficult it has become to build things in the United States,” Altman said in that interview. “Power plants, data centers, any of that kind of stuff. I understand how bureaucratic cruft builds up, but it’s not helpful to the country in general.”
Massive data center projects have vocal critics who say that data centers often create fewer jobs than promised and tend to have severe environmental impacts. Data centers are typically water hungry, placing a strain on regions with insufficient water resources, and their high power requirements have forced some utilities to lean heavily on fossil fuels.
Those concerns don’t appear to be slowing investments any. Per a McKinsey report, capital spending on procurement and installation of mechanical and electrical systems for data centers could eclipse $250 billion in the next five years.
In January, Trump announced that Hussain Sajwani, an Emirati billionaire businessman who founded the property development giant DAMAC Properties, will invest $20 billion in new data centers across the U.S. Industry insiders have expressed skepticism of the deal’s concreteness, however.
Rio Tinto bets Donald Trump will give green light to US copper mine
Arizona facility could supply 25% of American needs after being held up for 12 years in battle over permits
Rio Tinto is betting Donald Trump will finally give the green light to its giant copper mine in Arizona after a 12-year permitting battle, as part of a wave of domestic projects expected to be approved by the new US administration.
“I do think that we have really good chances now to progress that project,” said Jakob Stausholm, chief executive of the London-listed miner, in an interview with the Financial Times, which will be broadcast on Wednesday. “We have made a lot of progress.”
The Resolution mine, which first submitted a mining plan to the US Forest Service in 2013, would be the biggest copper mine in North America once fully developed.
The project, which is 55 per cent owned by Rio Tinto and 45 per cent owned by Australian-based BHP, is a deep underground mine that would produce as much as 1bn pounds of copper a year, meeting 25 per cent of US needs.
“If they [the US] want to be less dependent on importing a critical mineral like copper, it would be a good thing,” Stausholm said.
The mine is one of several expected to benefit from the policies of Trump, who declared last year that he would speed up regulatory approvals for any company investing more than $1bn in the US.
The permitting process for Resolution has been slowed down by a complex land ownership swap arrangement, water use concerns, opposition from traditional land owners, and flip-flopping policies in Washington.
The fate of the mine now rests with the US Supreme Court, which is due to issue a ruling in the coming days on a case brought by the San Carlos Apache tribe, which opposes the development of the mine.
In the case, Apache Stronghold versus the United States, the plaintiffs seek to halt the proposed mine on religious freedom grounds. They say it would have an impact on sacred Apache sites.
Under Trump’s previous administration, one of his last acts was to give the go-ahead to a series of mining projects, including the land swap for the Resolution mine just days before leaving office.
While many of Trump’s mining appointments have yet to be announced, his nomination for secretary of the interior Doug Burgum has a pro-industry record, supporting oil and gas development in his previous role as governor of North Dakota.
The Pebble Project in Alaska, a copper-gold project owned by Toronto-listed Northern Dynasty Minerals, is also expected to get its final approval under the new administration, according to industry executives.
Trump halts more than $300bn in US green infrastructure funding
New president’s order to pause federal disbursements cuts critical loans and grants to developers
Donald Trump’s return to the White House has put more than $300bn of potential federal infrastructure funding at risk, US investors said, as they grappled with the scale of his move to unpick Joe Biden’s climate agenda.
Within hours of his inauguration on Monday, Trump signed scores of executive orders rescinding Biden’s policies, including one halting federal disbursements to manufacturers and infrastructure developers.
The funds affected were provided under two of Biden’s signature legislative achievements — the Inflation Reduction Act and bipartisan infrastructure law — and include almost $50bn in Department of Energy loans already agreed and another $280bn worth of loan requests under review, according to Financial Times analysis of the DOE’s loan portfolio.
“All agencies shall immediately pause the disbursement of funds appropriated” through the acts, the Trump administration said in an executive order titled “Unleash American Energy”.
Among the disbursements now immediately in peril are a $9bn conditional loan to Michigan-based utility DTE Energy and another of $3.5bn to Oregon-based utility PacifiCorp.
DTE did not immediately respond to a request for comment. PacifiCorp said it was working with the department on the loan guarantee conditions.
“If you had grants, loan guarantees, funding that was sort of tied in with the IRA and the money’s not out the door yet, it’s going to be very hard to see that money go out the door under the Trump administration,” said Rob Barnett, a senior analyst at Bloomberg Intelligence.
The executive order was among dozens signed by Trump in a late-night blitz after he was sworn in for a second presidential term and promised to end Biden’s “Green New Deal” and boost fossil fuel output.
Trump’s move to halt the funding sent a shockwave through the clean energy sector and signalled his intent to undermine Biden’s industrial policy, particularly his programmes to speed up an energy transition.
“The executive orders indicate that federal funding for EV and battery manufacturing will be harder to access, increasing the risk of stranded capital for manufacturing projects already under way,” said Shay Natarajan at Mobility Impact Partners, a private equity fund based in New York.
The 2021 infrastructure law offered $1.2bn to improve the country’s transport system, while the IRA offered $370bn in tax credits, grants and loans.
Both programmes vastly expanded the Department of Energy’s Loan Programs Office, which was responsible for doling out $400bn to developers and has been a favourite target of Republican attacks.
Investors said they feared another $300bn worth of future federal funding — mostly from the infrastructure law — would also now be frozen by Trump’s move.
Unlike the money in the loans office, the IRA’s tax credits — the main form of subsidy in the legislation — are unlikely to be affected. The credits have been a primary driver of investment, with manufacturers committing more than $130bn since the law passed, according to FT analysis.
Fearing that Trump would move to halt the disbursements, Biden officials rushed nearly $50bn in loan commitments out to developers in the weeks after he won re-election in November.
Trump also wants to stop construction of wind farms on federal lands and waters and said he would end “unfair subsidies” for electric vehicles. Shares in Tesla, Rivian, Ørsted and other EV and wind companies fell on Tuesday.
This week Italian cable manufacturer Prysmian Group said it was scrapping plans to build a factory in Somerset, Massachusetts, which would have made cables for the offshore wind sector.
Other investors had already scaled back their US renewable energy plans in the US ahead of Trump’s return. German energy giant RWE announced in November it was pulling back its US wind power plans.
Nearly 25GW of offshore wind projects, 65 per cent of the US projects in development, are unlikely to progress under the Trump administration, Rystad Energy said on Tuesday.
“When you start to make it look like there’s a lack of stability in the investment that you thought you were making into the US, that has a potentially very negative effect, long term, on our ability to attract capital,” said Eli Hinckley, a partner at Baker Botts.
After Hours Summary: NFLX +14.2% surges on robust earnings, net adds; UAL +3.6%, IBKR +3.2%, STX +2.5% also higher on earnings; AGYS -17.8%, WTFC -11.3%, CASH -3.7%, PRGS -3.7% lower on earnings
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: NFLX +14.2%, UAL +3.6%, IBKR +3.2%, STX +2.5%, FULT +2.3%, PNFP +1.5% (also increases dividend), PFC +1.3%, SFNC +0.4%
Companies trading higher in after hours in reaction to news: SMTI +9.5% (signs license and distribution agreement with Biomimetic Innovations; also guides Q4 revs higher), ROKU +3.8% (in sympathy with strong NFLX earnings), IAC +1.7% (amends services agreement with Google), EXAS +1.1% (will present new data at ASCO), DIS +1% (in sympathy with strong NFLX earnings), PB +1% (authorizes new 4.8 mln share repurchase program), WBD +0.3% (in sympathy with strong NFLX earnings), PARA +0.2% (in sympathy with strong NFLX earnings), FBP +0.2% (increases dividend), TWI +0.1% (union votes to ratify new contracts), GVA +0.1% (awarded contract from US Army Corps of Engineers)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: AGYS -17.8%, WTFC -11.3%, CASH -3.7%, PRGS -3.7%, SMBK -2.6%, ZION -0.9%, COF -0.4%
Companies trading lower in after hours in reaction to news: NOW -0.5% (enhances global partner program), RKLB -0.4% (schedules the next Electron launch for Kinéis), PDCO -0.4% (announces expiration of "Go-Shop" Period), CDRE -0.1% (increases dividend), IP -0.1% (set to win EU approval for its purchase of DS Smith, according to Reuters), HOMB -0.1% (increases share repurchase program)
As Luxury Slows, Paris Department Stores Bet Big on Menswear Growth
Galeries Lafayette will revamp its four-floor men's store in 2026, with a focus on drawing the newly fashion-forward male shopper.
PARIS — Despite the slowdown in luxury spending and an overall rocky retail environment, Parisian department stores are bullish about menswear.
Printemps recently opened a 2,690-square-foot concept store space on its ground floor dedicated to men’s accessories, beauty, watches, jewelry and home, and Galeries Lafayette is gearing up for a full revamp of its four-floor menswear building slated for 2026.
It’s less a boom in the category than a slow-and-steady post-pandemic climb, said Galeries Lafayette director of menswear Alice Feillard.
“We can see that men began following women’s emotional shopping values” during the pandemic, Feillard said. “Now it has moved from a more rational and functional buying to a more emotional and fashionable buying.”
Men’s habits have changed from seeking basics like T-shirts and sweaters, to more designer-driven creative pieces, formal workwear, statement pieces and a heightened interest in sharp silhouettes. The shift has been consistent across categories including luxury, accessories, contemporary, urban and outdoor, Feillard said.
Copenhagen-based brand Les Deux was virtually unknown in France when it opened a pop-up at Galeries Lafayette three years ago. Now it has seven shop-in-shop outposts in Paris and regional stores. The space at Galeries Lafayette generated “seven-digit revenue” last year alone, reflecting the shopping shift, noted Feillard.
Remote work plays a part, said Les Deux head of sales for France Eric Obré, as men want to “sharpen up a bit” when they are outside of the house.
“Men are becoming a lot more interested in brands. People buy into narrative as much as product now, which I think is a reaction to how much content is around. Everyone wants clothes that represent them and their values, and they find that individuality in the brand universe they relate to. It’s an exciting time for the industry,” Obré said.
Male shoppers are versed in design lingo such as “placket” or “selvedge,” he added. “They’re a lot more aware of how many decisions go into each garment.”
Les Deux is one of Galeries Lafayette’s recent standout success stories, but it’s certainly not alone, noted Feillard. A dedicated menswear corner from French brand Lemaire was originally slated for a six-month run but was so successful it has now been extended through the spring.
Other indie brands that have been a hit with the more fashion-forward male shopper are Ami, Courrèges and Jacquemus. Rick Owens opened earlier this month, and Ami will open an exclusive pop-up there in March. Vintage label Cent Neuf will open its dedicated men’s corner Jan. 29, during men’s fashion week.
Skims is another success story: having opened as an exclusive at Galeries Lafayette in September, it fast became the store’s second bestselling underwear brand for men, trailing only stalwart Calvin Klein. Now it will open its own dedicated men’s corner in July.
With the revamp, Galeries Lafayette will increase its luxury and independent designer offerings, as well as expand its shoe department. The more modern presentation is poised to appeal to the department store’s shifting demographic as it is less reliant on large Chinese tour groups and sees more American, Middle Eastern and local French shoppers come through its doors.
Currently, menswear accounts for 15 percent of sales at Galeries Lafayette’s Boulevard Haussmann flagship, and that proportion is higher in its 18 regional stores. The men’s trend is not confined to Paris, Feillard said. The retailer also revamped the menswear sections in Bordeaux and Strasbourg.
“We’re very strong [in the regions]…we know we have the potential to recruit some local and international customers with a more premium offer,” she said.
The Galeries Lafayette Paris flagship revamp will switch up everything from the layout and flow to the assortment, enlarge the luxury offer and focus on architectural touches such as opening street-level windows to allow more light. It will be a cross-category approach, including lifestyle, skin care and fragrance.
And with luxury growth stalled, there will also be a focus on upscaling contemporary brands, including labels like Casablanca, Officine Generale, Fear of God, Y3, Korean brands System and Solid Homme, plus a multibrand space in the center of the first floor.
“Now that [luxury] brands have increased prices — and they have been very, very high — they need to rethink the different categories,” she said. “We have seen some more accessible categories recruit more aspirational customers that [the luxury brands] lost. It’s definitely an interesting and important opportunity in terms of category.”
Galeries Lafayette’s outpost on the Avenue des Champs-Élysées is also seeing an uptick in interest for menswear. That store has more of a focus on experimental and emerging brands, as well as a younger shopper with a higher percentage of American tourists.
Galeries Lafayette has also recently revamped its men’s offerings in regional stores in Bordeaux, Nice and Strasbourg with more fashion-forward and premium offerings, and will continue to develop the category in its 18 regional stores.
The Printemps corner also capitalized on this shift. “For a long time, the men’s business was mainly, if not only, about clothing. In the last couple years, we’ve noticed a shift in customer behavior, with more men buying beauty products, handbags, objects and small accessories,” said Printemps chief merchandising officer Karen Vernet.
“We can see that, especially now, luxury growth is quite complicated for the brands in the women’s market, and especially [women’s] accessories market is a bit more mature,” Feillard said. “There is a stronger opportunity to grow in the men’s category.”