FT : Latin American homebuyers are drawn to Madrid’s elegance

Latin American homebuyers are drawn to Madrid’s elegance
Lower costs and a shared cultural heritage attract well-heeled émigrés — with many choosing the Spanish capital over Miami

Next month Kathia from Buenos Aires and her British husband are moving to Madrid to start a family. They’ve swapped Islington in north London for the upscale Salamanca district, where they’ve bought a four-bedroom apartment.

“Madrid is the obvious choice for us to live — for an Argentinian it feels rather like home but it’s only two hours from London,” says Kathia, who preferred not to disclose her surname. “We also love Barcelona, but Madrid is more beautiful . . . It’s possible to live in the best neighbourhood of Madrid for a fraction of the price for the equivalent in London.”

She’ll be joining a nearly 55,000-strong Argentine community in Madrid, according to the INE, Spain’s statistics institute — a number that increased by more than 6,500 between 2022 and 2023.

In recent years, political and financial instability in Latin American nations have helped drive immigration, leading some to nickname the Spanish capital the “new Miami” — the city in Florida has been a magnet for people from the region for decades. In 2022, more than 820,000 Latin Americans were living in Madrid, according to the INE — 50 per cent more than in 2015.

Kathia says that while her friends and family are not intending to leave Argentina following the election of the populist Javier Milei in November, many share her fears about the economic climate back home.

It was concern for the safety of her four children growing up in Mexico City that persuaded artist Fernanda Cordero and her Spanish husband to move to Madrid two years ago, where they rent a 400 sq m apartment in the Salamanca neighbourhood. “Although my husband, an architect, works a lot in Miami, we did not think that was the best culture for our children either,” she says. “We miss our large garden but don’t want to go back to Mexico.”

Buyers from Argentina, Mexico and Colombia are joined by Chileans, Venezuelans and Peruvians, says Pelayo Barroso, national director of research at Savills Spain. Because these buyers tend to have their capital in US dollars, a favourable exchange rate at the end of 2022 made homes in the Spanish capital cheaper, too.

Property prices are rising, though. In January, the average property price in the city in January was €4,190 per sq m, according to the online property website Idealista.com, up 8.2 per cent year on year, although the level of transactions fell by 16 per cent between 2022 and 2023, according to the Spanish notaries association.

Prime housing prices — defined as the top 5 per cent of the market — grew by 6.4 per cent in the 12 months to Q4 2023 to €9,412 per sq m, according to Knight Frank Research, yet this is still much cheaper than many other global cities: by comparison, in Paris the figure was €22,599; in London, it was €28,160.

Buying agent Lucía de la Fuente started helping Colombians move to Spain when victory was expected for Gustavo Petro of the leftist coalition Pacto Historico. “At first they were wanting to get their savings out and buy an apartment for €200,000-€300,000 in Madrid — but then they wanted to get themselves out, and spending €1.5mn on an apartment for the family.”

Some of de la Fuente’s clients will seek a residency permit with a purchase of at least €500,000 — the golden visa is available to non-EU nationals who spend more than that amount, unmortgaged, on a property. Given that they are cash buyers, they are unaffected by tighter financing conditions in Spain. They tend to want to live in Salamanca and send their children to the private IE Business School (Instituto de Empresa), she says.


Madrid is the autonomous community with the lowest tax rates in Spain, and new tax residents will benefit from a cut in personal income tax (IRPF), announced by the president of the Madrid region, Isabel Díaz Ayuso, in October. If the measure is approved, they will be able to deduct 20 per cent of investment made in financial assets, including real estate.

For students in public universities, late last year the Comunidad de Madrid announced that it would pay 85 per cent towards fees for Latin American students — the same as those from Spain or the EU.

Colombia-born Paula Ibarra moved to a rented flat in Chamberí in December. “I like the mix of trendy places and ‘mom & pop’ shops, and quieter residential vibe,” says Ibarra, who works in marketing and moved from Paris to Madrid “for its familiar language and warm, southern European culture”.

Meanwhile, María Susana Del Prado, who moved from Argentina in 2020, says Madrid isn’t just for the young. “It’s ideal for seniors seeking safety, quality healthcare, gyms and churches in a shared cultural heritage,” says the 78-year-old, whose son already lived in Madrid.

Within Salamanca, with its elegant architecture and narrow streets of boutiques and high-end restaurants, is the upscale pocket of Recoletos, next to Retiro Park, where renovated properties can cost €17,300 per sq m, according to Alex Vaughan of the estate agent Lucas Fox.

Julio, from Tampa in Florida, completed on a two-bedroom flat in Recoletos this week. “Getting a mortgage for 3 per cent, rather than the 7-8 per cent rates in the US, made it seem a good investment right now. We liked the south of Spain, too, but there just aren’t the direct flights [to Tampa],” says the software company owner, who preferred not to disclose his surname.

Vaughan says Almagro is also popular for its elegant 19th-century buildings on leafy avenues, upscale restaurants and art galleries (turnkey properties up to €14,000 per sq m), but Chamberí, Ibiza, Justicia and Huertas-Cortes are vibrant areas where international buyers are now looking for greater choice and affordability — with prices €10,500 to €13,000 per sq m.

Prices at flagship high-end projects such as the Four Seasons Private Residences have achieved record prices for the city, exceeding €18,000 per sq m, according to Savills. Last year, The Mandarin Oriental Residences in Salamanca launched, and next month the SLS Madrid Infantas Residences on the city’s Gran Vía, with prices from €1.375mn for a one-bedroom apartment, will open. The 33 apartments will have access to luxury amenities managed by the SLS Hotels group.

While these properties appeal to wealthy international buyers, Ana White, premium residential properties director at Knight Frank Madrid, says most of her buyers last year were Spanish, accounting for 60 per cent of their sales. British buyers are rare, she adds.

The lower cost of buying and renting a property in Madrid compared with Miami is also persuading some Latin Americans to move cities, says de la Fuente. “Salaries are lower in Spain [than Florida] but they say that the lower living costs and lifestyle benefits of living in Spain balance this.”

Renters would need around €7,000 per month in Miami to enjoy the same standard of life — based on average costs of food, rent and other living expenses — that costs €4,000 in Madrid, according to statistics site Numbeo.

Cuban photographer and barista Ricardo Iglesias left the Floridian city of his birth because he felt it was “pushing him out”.

“Miami was getting too intense and the lifestyle pretentious. Madrid offered me the opportunity to set up a business more easily,” says Ricardo, who set up UNFLTRD, a coffee shop, in the city centre, and rents a flat in Chamberí with his wife. “I might not make the same money as I might have done in Miami but here I can do more for less.”

FT : Can European carmakers stop China’s electric behemoth BYD?

Can European carmakers stop China’s electric behemoth BYD?
The company began selling on the continent a little over a year ago and is already making inroads

The maiden voyage of the BYD Explorer No 1 was far from plain sailing.

The ship, 2.5 times the length of a football pitch and carrying more than 5,000 electric vehicles made in China, was forced to divert around the Cape of Good Hope to avoid the Red Sea, adding 10 days to its journey, captain Sabev Bozhidar told the Financial Times. 

Its eventual arrival in the German port of Bremerhaven on Sunday marks a new chapter in the ambitions of China’s EV specialists to crack open the lucrative European car market.

“The demand is increasing . . . our Google searches have overtaken Tesla . . . we are going to achieve a lot of things in the European market,” said Michael Shu, managing director of BYD Europe. 

But the bloc’s carmakers are determined to fight back. More than 600 miles from Bremen, hours after the BYD ship docked, Renault boss Luca de Meo used the Geneva Motor Show to unveil a series of cars he believes will help the French manufacturer hold its ground against Asian rivals. 

These included the Renault 5, a £25,000 EV that will pave the way for cheaper models and the Dacia Spring, the first EV from the group’s budget brand.

The Spring, which is made in China, will have a starting price of less than €20,000 the company has said, with some reports putting it as low as £15,000 in the UK. 

Renault had also begun talks with Volkswagen about collaborating on a low-cost EV project, De Meo said. 

Meanwhile, Renault’s arch-rival Stellantis, which owns brands including Peugeot and Fiat, hopes to offer an electric model in Europe that would cost less than €20,000, according to European operations boss Uwe Hochgeschurtz, by cutting costs from its new electric Citroën e-C3, which sells for £23,000. 

“It depends on what you put into the car, we have the platform for this . . . we adapt the range, we adapt the battery,” Hochgeschurtz said. “It is possible.” 

The fight for the cheap end of the EV market is crucial. Small cars are best-sellers in Europe, yet several manufacturers have discontinued them as the rising costs of meeting emissions rules has made them unprofitable to produce at an affordable price. 

“Everyone” was getting out of the market for small combustion engine cars because “nobody is able to produce [them] profitably”, De Meo said. “Polo is out, Fiesta is out, everyone is out.” 

The Renault 5 is the company’s first cheaper EV, but Renault is planning a cost reduction of up to 40 per cent in subsequent versions later this decade. 

And while the Dacia Spring will be imported from China, Renault’s own-brand models will be made at home. 

“What was very challenging for the team was that I decided to do the thing in France,” De Meo said. “Everyone was telling me that I was completely nuts.” 

However, because EVs had fewer parts than combustion engine cars, fewer workers were required and the impact of France’s high wages would be lower, he said, adding that about 80 per cent of the supply chain would be within 300km, cutting logistics costs. 

But at the moment, the company’s Dacia brand is at the head of the pack. 

When designing cheaper models, the brand often begins with a Renault vehicle and removes everything not deemed essential.

“We have nothing superfluous in it,” said Denis le Vot, the brand’s chief executive. “We don’t have 22 screens, we don’t have electric seats, and [this approach] resonates more and more, because some people are saying: don’t spend your money on useless things. We don’t put chrome in the car. Why? Because it is shiny and useless. We just take it totally out.”

Across the hall from Renault and Dacia’s displays at the motor show is BYD’s stand, showing a range of models that are priced at similar levels to the electric models made by the incumbents they are hoping to beat. 

Although the company began selling in the region only a little over a year ago, it is already making inroads. 

The BYD Seal, a large saloon costing about £45,000, already outsells the equivalent Tesla Model 3 in some markets such as Ireland and Austria, Shu said.

But the company also has a close eye on other markets. “Lots of customers or partners are asking for a smaller car, because European people like smaller cars,” said Shu, who added that a “new model, lower than €30,000 is coming . . . next year”.

Getting below €20,000 is harder, he added, because of regulations, particularly on crash safety. The company hopes the BYD Explorer will help with this.

The ship, which was launched from China amid a riot of fireworks and dragon dances, has been engineered to be as cost-effective as possible. BYD said that among other things, special paint on its hull cuts down water drag, reducing fuel consumption. It also cuts expensive waiting times for space on other car carriers — which is in short supply — Shu said, adding it was “for sure” a cheaper option.

A bigger fleet is planned. Wang Chuanfu, chair and chief executive of BYD, told a conference in Shenzhen this month that the company would “deploy seven car carriers in the coming two years to ease the shortage of shipping capacity for automobile exports and deliver more . . . vehicles” to the global market, according to several Chinese media reports. 

As they strive to cut costs, European carmakers feel they are insufficiently supported by governments, whose decarbonisation policies have forced them to develop the battery vehicles at which China excels. 

“Europe’s industrial strategy is totally missing,” said De Meo, who also heads the European carmakers’ association, ACEA. “We need to be listened to by politicians, we are the people who are putting the money in and risking the investments.” 

A European Commission investigation of Chinese imports may lead to higher tariffs on cars coming in. But European carmakers say this may not be enough.

According to Hochgeschurtz, the Chinese “can reduce the price much lower than you even think in your wildest dreams”. Many brands sell similar EVs in China for roughly half the price they were advertising in Europe, he added. They can absorb higher tariffs, cut prices and still make high profits.

“Prices in China are very low, so [Europe] is paradise for them.”

FT : The threat to the Italian heritage in car manufacturing

The threat to the Italian heritage in car manufacturing
Rome faces choice over how to handle the transition to electric vehicles

As products linked to the Italian identity go, the Fiat 500 is right up there with fashion and food. So when Carlos Tavares, the chief executive of Stellantis — which now owns the Fiat brand — issued a warning over the future of the car’s production in Italy, there was a backlash in the country.

Tavares raised doubts over the Fiat factory in Turin, home to the company’s founding Agnelli family, and a plant near Naples if Giorgia Meloni’s government refused to further subsidise electric vehicles. “If you don’t give subsidies to purchase EVs, you are putting at risk the Italian plants,” he told Bloomberg.

The prime minister had previously criticised Stellantis in parliament of working, saying: “If you want to sell a car on the international market by advertising it as an Italian jewel, then that car must be produced in Italy.” The spat comes ahead of a crucial EU parliamentary election in June as the impact of the bloc’s 2050 net zero targets on jobs and industries takes centre stage across the continent.

The Paris-based carmaker, created in 2021 from the merger between Italy’s Fiat-Chrysler and France’s PSA, seemingly backtracked last week in a bid to ease tensions with Rome and unions. “The [Fiat 500] will always be linked to the city of Turin which should be considered [its] home,” the group said after a meeting with unions and local authorities. The root cause of the issue, however, remains unsolved.

Stellantis wants to sell a total of 5mn EVs a year by the end of the decade. In the first half of 2023, it sold 170,000. If European car manufacturers are to reach their ambitious goals — in line with the EU’s decarbonisation targets which includes a ban on combustion engines by 2035 — and fend off competition from China, industry experts say that they should focus on affordable small electric cars priced between €12-€15,000.

Stellantis says that it is impossible to produce EVs with such a price tag in continental Europe. The retail price of the electric version of the Fiat 500 — once known as the “people’s car” is priced about €30,000 before subsidies. The group has also recently released a new electric version of its historic Topolino model. The minicar, with a maximum speed of 45km/h, does not require a driver’s licence and sells for €9,800 and upward. 

The government envisages higher EV subsidies for households earning up to €30,000, the national average. In general Italian EV subsidies in 2023 ranged from €2,000 to €7,500 — depending on emissions and the car’s price tag — and were less generous than some other European nations.

Reports have suggested Stellantis could begin producing the low-cost models of its new Chinese partner Leapmotor in Turin by 2026 or 2027, increasing the group’s overall Italian production.

For the time being, the cheapest EV in Italy is one produced in China by the Romanian car company Dacia, which costs around €21,400. Yet, out of the meagre 66,679 electric cars sold in 2023 (under 20 per cent of total car sales), the most popular model among Italians was the Tesla Y, which costs more than €42,000 before subsidies That raises the question of how much more generous subsidies would lift sales.

One obstacle is the lack of charging infrastructure across the country, especially in the south, which is problematic during long journeys. Plus, battery recharging is time consuming and costly (Italy has the third highest household electricity price in the world).

But there’s also another crucial issue: Italy and Fiat were latecomers to the EV market and the national manufacturing industry has been slower than its peers in shifting component production from combustion engines to electric ones. A PwC report published in July shows that close to 40 per cent of the largest 350 domestic suppliers to the automotive industry exclusively produce components for combustion engine vehicles. The report also showed the profit margins of the suppliers had taken a hit in the last three years as a result of the Covid pandemic, raw material shortages and supply chain issues.

Such a backdrop is a challenge for the likes of Stellantis to meet its own 2030 targets and comply with the EU’s ban on the 2035 combustion engine. The appeal of looking to source cheaper production elsewhere must be tempting.

If Rome wants to secure national jobs and salvage its car manufacturing industry, it might face a choice: is it better to subsidise EV sales more or to steer greater public investments into EV infrastructure and supporting the automotive supply chain transformation?

FT : Hedge fund Eisler plans hiring spree to take on industry giants

Hedge fund Eisler plans hiring spree to take on industry giants
UK group to tap investors for $1.5bn and add up to 25 portfolio managers

Eisler Capital is planning to raise between $1bn and $1.5bn of capital from investors and hire up to 25 portfolio managers this year as the fast-growing UK hedge fund muscles into one of the hottest parts of the industry.

The London group’s plans include raising more funds from investors — only a year after increasing assets by more than $1bn — and taking its number of portfolio managers to about 120 or 125, according to a person familiar with the matter.

Eisler’s rapid expansion underscores the war for talent among so-called multi-manager hedge funds, as large institutional investors such as pension funds seek out consistent returns and more extensive risk management, rather than big gains in one year and a loss in the next.

Multi-managers, which include giants Izzy Englander’s Millennium and Ken Griffin’s Citadel as well as Eisler, employ teams of professionals trading a wide variety of strategies, diversifying the fund against market losses.

Traditional hedge funds may have only a couple of portfolio managers trading a specific strategy, supported by a few analysts.

Multi-manager assets increased by 150 per cent in the five years to 2022 while the rest of the industry grew by just 13 per cent in the same period, according to Goldman Sachs estimates. 

Eisler, which only started its multi-manager fund in 2021 and has grown to manage $4bn of assets, was founded by former co-head of Goldman Sachs’ global markets division Edward Eisler. It has about 300 staff globally and trades a variety of strategies in bonds, equities and commodities markets.

Eisler posted a 9.8 per cent return last year, beating many of its rivals and returned 15 per cent in 2022. Notable large hedge funds that underperformed last year include US-headquartered Balyasny and Schonfeld, whose main funds were up 2.7 per cent and 3 per cent, respectively.

Eisler’s plans for 2024 include expanding trading in equities and commodities, and to scale its quantitative trading strategy business, in which computer models trade based on market signals, a person familiar with the matter said.

Some of the hires will be for its equity long-short business, in which portfolio managers buy companies they think will outperform the market, while simultaneously betting against lower-quality companies. The firm this year hired Jeff Russel, the former head of equities at Balyasny, to lead this strategy.

Investors have been drawn to multi-manager funds because they offer tighter risk management, intervening quickly when their portfolio managers begin to lose money, in a bid to limit losses. Fuelling their growth is the sector’s fee structure, which passes through all costs of the fund to investors rather than charging a management fee.

However, investors have been disappointed by their performance last year and the high fees charged by many multi-manager hedge funds, prompting concern that the war for talent has resulted in overall costs spiralling out of control.

A study from BNP Paribas of 238 hedge fund investors showed that hedge funds that charge traditional management fees delivered returns of 7.88 per cent after those fees were taken into account. Hedge funds that use the pass-through model only delivered 5.98 per cent net of fees, the first time in three years they lagged behind peers.

WSJ : SEC Investigating Whether OpenAI Investors Were Misled

SEC Investigating Whether OpenAI Investors Were Misled
Regulator is examining internal communications of CEO Sam Altman, after board last year temporarily ousted him for alleged lack of candor

The Securities and Exchange Commission is scrutinizing internal communications by OpenAI Chief Executive Sam Altman as part of an investigation into whether the company’s investors were misled.

The regulator, whose probe hasn’t previously been reported, has been seeking internal records from current and former OpenAI officials and directors, and sent a subpoena to OpenAI in December, according to people familiar with the matter. That followed the OpenAI board’s decision in November to fire Altman as CEO and oust him from the board. At the time, directors said Altman hadn’t been “consistently candid in his communications,” but didn’t elaborate.

Altman returned as CEO less than two weeks later as part of a deal that also entailed a reconstituted board, which he hasn’t joined.

SEC officials based in New York are conducting the investigation and have asked that some senior OpenAI officials preserve internal documents.

The SEC enforces laws that forbid people from misleading investors, regardless of whether fundraisers seek capital in public or private markets. The SEC often closes investigations without making formal accusations of wrongdoing.

Some of the people familiar with the investigation described it as a predictable response to the former OpenAI board’s claim in its November statement. One of the people said that the SEC hasn’t pointed to any specific statement or communication by Altman that it has deemed misleading.

The SEC’s civil investigation has been percolating in the background as OpenAI officials pitched investors as part of its recently closed tender offer, which valued the AI juggernaut behind viral chatbot ChatGPT at more than $80 billion.

OpenAI is governed by a nonprofit. Investors in its for-profit arm include employees, venture capitalists, and Microsoft MSFT 0.06%increase; green up pointing triangle, which has committed $13 billion to the company in exchange for what is essentially a 49% stake in the earnings of its for-profit arm.

The SEC probe adds to a growing list of government and legal challenges confronting OpenAI, reflecting intense global scrutiny of the company’s business practices and impact on the world. It also shows how the company is still dealing with the fallout from the failed ouster of Altman last year.

At that time of the leadership turmoil, OpenAI executives started getting questions from regulators and law-enforcement entities such as the Manhattan U.S. Attorney’s Office about the board’s accusation of Altman’s lack of candor, The Wall Street Journal reported in November.

That criminal investigation is ongoing, people familiar with the matter said. Its focus couldn’t be learned.

Government officials in the U.S. and Europe also have launched competition inquiries into the relationship between OpenAI and Microsoft, which also has a commercial partnership with the company.

As part of Altman’s return, OpenAI appointed two new board members, who commissioned a review of the events around Altman’s firing from the law firm WilmerHale.

The WilmerHale review is expected to wrap up in a few weeks and produce a report on the events, people familiar with that review said. The review focuses on the board’s handling of his ouster as well as Altman’s conduct.

In some cases, WilmerHale lawyers’ line of questioning has appeared to be more focused on what happened in November and the board’s role, rather than a broader look at Altman’s conduct and managerial style over the years, some of those people said. Another person familiar with the review said the lawyers asked questions about both topics.

>>> US After Hours Summary: OKTA +24.2%, DUOL +21.3%, ESTA +14.4%, AI +13.5% hig

After Hours Summary: OKTA +24.2%, DUOL +21.3%, ESTA +14.4%, AI +13.5% higher on earnings; LPSN -25%, WW -24.5%, SNOW -20.8%, FWRD -20.7%, DV -18.4% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: OKTA +24.2%, DUOL +21.3%, ESTA +14.4%, AI +13.5% (also names new CFO), SILK +13.2%, ATRO +9.7%, MDXG +9.1%, NTRA +8.9%, RVNC +8.7%, PSTG +8.6% (also authorizes add'l $250 mln in share repurchases), AMRC +8%, CPRX +7.9%, GEF +6.4%, CCCS +6%, CWAN +5.1%, MNST +5.1%, STKL +5%, WHD +4.9%, NTNX +3.8%, STN +3.8% (also CFO retiring; increases dividend), AAON +3.6%, EPR +2.9% (also increases dividend), TASK +2.6%, RXST +2.5%, PETQ +1.7%, AXNX +1.3%, KNTK +1.2%, MGNI +1.1%, PAGS +1.1%, CODI +0.9%, CRM +0.4% (also initiates dividend; increases share repurchase auth by $10 bln), PARA +0.3%, NSA +0.1%, SOVO +0.1%

Companies trading higher in after hours in reaction to news: CXM +6.5% (to join S&P SmallCap 600), NVRO +1.1% (FDA clears its sacroiliac joint fusion device), EA +0.7% (approves restructuring plan, which includes 5% workforce reduction), FBMS +0.7% (authorizes new $50 mln share repurchase program), PNW +0.4% ($650 mln stock offering; also files mixed shelf securities offering),

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: LPSN -25%, WW -24.5%, SNOW -20.8% (also CEO to retire, names new CEO), FWRD -20.7% (also suspends dividend), DV -18.4%, SHLS -16.2%, SDGR -15.4% (also files mixed securities shelf offering), FIGS -15.3%, NARI -11%, ALKT -10.8%, STEM -10.6%, AMC -9.8%, IONQ -9.6%, MARA -7.5%, MYRG -7.5%, SRI -6.7%, MQ -4.5%, IOVA -4.1%, HPQ -3.5%, SBGI -3.4%, SDRL -1.9%, ADMA -0.9% (also CFO to step down), JAZZ -0.9%, ZUO -0.3%, RNA -0.3% (also stock offering by selling shareholder), PNTG -0.2%, USPH -0.1% (also increases dividend),

Companies trading lower in after hours in reaction to news: FIGS -15.3% (CFO to resign), CLPT -10.6% (commences stock offering), MIRM -5.9% (to delay 10-K filing), ARQT -5.4% (commences $150 mln offering; also announces collaboration and licensing agreement for Topical Roflumilast in Japan), PTLO -5.4% (launches 8 mln share offering), APG -2.9% (stock offering by selling shareholders), CLDX -2.6% ($250 mln stock offering), NVAX -2.5% (CDC advisory committee votes to recommend 65 and older should receive an additional dose of COVID-19 vaccine), CSTL -1.6% (files $300 mln mixed shelf securities offering), EDIT -1.2% (files mixed shelf securities offering), ANET -1% (COO to take leave of absence), BA -1% (DOJ looks into its door plug blowout, according to Bloomberg), TPB -0.1% (increases dividend),

>>> Petrobras says it has not made a decision regarding the distribution of div

Petrobras says it has not made a decision regarding the distribution of dividends that have not yet been declared
  • Management's decisions on dividends, including the proposed allocation of the result to be submitted for approval at the Ordinary General Meeting scheduled for 04/25/2024, will be taken based on the Company's new Shareholder Remuneration Policy, approved by the Board of Directors. Administration on 07/28/2023.
  • Release

FT : Universal Music impasse with TikTok leads to ‘murder on the dance floor’

Universal Music impasse with TikTok leads to ‘murder on the dance floor’
Talks stumble over money, copyrights and AI as more tracks disappear from social media platform

TikTok has failed in its attempts to restart negotiations with Universal Music, according to people familiar with the matter, leaving two of the most powerful companies in entertainment deadlocked over money, copyrights and how to treat songs created by artificial intelligence.

The impasse means that even more musicians face the prospect of their work disappearing from the social media platform that has been one of the biggest drivers of music consumption in recent years. 

Universal, which controls a third of the world’s music, last month stopped licensing its music to TikTok after a year of tense negotiations. Many videos on the site have already been muted, but the dispute is escalating significantly this week as millions of more songs are set to be silenced.

In the past few weeks TikTok executives have repeatedly contacted Universal executives to try to restart negotiations. Ole Obermann, TikTok’s music head, Zhen Cao, the music lead at parent company ByteDance, and even TikTok chief executive Shou Zi Chew have been in touch via emails, text messages, Zoom and phone calls, according to people familiar with the matter. 

However Universal, whose negotiating team is led by digital chief Michael Nash and chief executive Lucian Grainge, does not view TikTok’s offers as compelling enough to agree a deal, these people said. 

When talks fell apart last month, people familiar with the matter said, TikTok had been offering to pay Universal a “low single-digit” percentage of its advertising revenue for the use of its music, which includes the repertoire of stars such as Taylor Swift, Drake, The Weeknd and Lana Del Rey. 

TikTok recently came back with an offer that was higher, but still well below the 20 per cent cut of advertising revenue that YouTube pays to the music industry, according to people familiar with the matter. 

The other big sticking point is AI. Universal wants TikTok’s royalty money to go towards human musicians, while TikTok wants the “royalty pot” to also be shared with fans who use AI to make their own tracks. Universal views this as a non-starter, people familiar with the matter said. 

In a statement on Wednesday, TikTok said it remained “committed to reaching an equitable agreement” with Universal but it was in the process of carrying out the music company’s requirement to remove all songs that have been written or co-written by one of its songwriters.

“Their actions not only affect the songwriters and artists that they represent, but now also impact many artists and songwriters not signed to Universal,” TikTok said.

The stand-off is among the most heated clashes between tech giants and media groups in recent memory, as they battle for control over the future of entertainment. 

Big music companies earn billions of dollars a year through royalty payments from streaming services and social media platforms including Spotify, Apple and Meta. They typically renegotiate these contracts every couple of years, in licensing talks that are often tense but almost always result in a deal. 

This is the first time in the streaming era that Universal has gone so far as to remove its music from a tech company’s platform. The outcome of the TikTok-Universal dispute will affect music revenues for years to come. 

Obermann, a former Warner Music executive who joined TikTok in 2019 to lead its negotiations with the big music labels, has been at the forefront of the talks. However, his boss at ByteDance, Zhen, has also been involved in recent weeks, with the communications sometimes appearing uncoordinated, according to people familiar with the matter. Chew, TikTok’s Singapore-based chief executive, who is based in Singapore, has also been in touch with Universal to try to restart talks. 

The stand-off has left Universal artists without their biggest marketing tool, while TikTok users are seeing their posts muted en masse.

Beyoncé, who is signed with Universal’s rival Sony, seems to have benefited from the stand-off. Her new song “Texas Hold ‘Em” has soared to the top of the Billboard charts, helped by its prominence on TikTok, where users are posting hundreds of thousands of videos using the track. 

However, this week’s expansion of the licensing takedowns will affect even artists who are not affiliated with Universal, such as Beyoncé.

Every song has two sets of copyrights: one for the recording, and one for the “publishing”, meaning the writing and composition. Starting late on Monday, TikTok began removing songs tied to Universal’s publishing arm. This means that artists who collaborate with songwriters signed to Universal will have their work removed, too. 

According to these rules, “Texas Hold Em’”, which was co-written with Raphael Saadiq, who is signed with Universal, would also be muted on TikTok. 

Some executives and analysts estimate that 60-80 per cent of all the popular music on TikTok will be muted this week. TikTok disputes this, saying the figure is closer to 30 per cent. 

People close to TikTok said it had not lost users since the removal of Universal’s catalogue, but argued that the dispute was hurting the wider industry.

On Universal’s earnings call on Wednesday, Grainge said: “We’re friendly people. My phone is open, unfortunately, 24 hours a day . . . We negotiate and deal with platforms that combined are worth trillions. I’ve spent my entire career creating win-win situations.”

The waiting music ahead of the call included Sophie Ellis-Bextor’s “Murder on the Dance Floor”, a song Universal owns the rights to, that exploded in popularity on TikTok in recent months.

Business Of Fashion : Lucien Pagès, the PR Prince of Paris

Lucien Pagès, the PR Prince of Paris
What does it take to be fashion’s favourite public relations guy? The man who weaves stories for the likes of Saint Laurent, Jacquemus and Schiaparelli has become a story himself.
Lucien Pagès has become the public relations prince of Paris. (Tess Petronio)

PARIS — It’s Monday, February 26, the start of Paris Fashion Week, and the public relations kingpin Lucien Pagès begins his day with a walkthrough of the space for Saint Laurent’s show, happening the following evening. He returns to his office to finalise the seating plan for the shows of clients like Schiaparelli, Sacai, Courrèges, Carven and Rabanne before a planning lunch with the organisers of the next Vogue World event. Then he has two shows by new designers, Marie Adam-Leenaerdt (a finalist for this year’s LVMH Prize) and CFCL, a Japanese disciple of Issey Miyake, before he ends his day at his friend Sarah Andelman’s launch of her new project, Mise En Page, at the department store Bon Marché. Over the course of the next nine days, Pagès will manage 25 runway shows, 11 presentations and re-sees, and nine dinners and cocktail parties for his clients. The list doesn’t include afterparties — of which there will be many — because he draws the line at late late nights.

His clients could scarcely begrudge him his bed rest. “I feel Lucien is my guardian,” says Schiaparelli designer Daniel Roseberry. “I call him the Prince of Paris because everywhere we go, he is so loved and respected. He also has absolutely no ego.” Saint Laurent designer Anthony Vaccarello goes a step further. “I think he is the best right now because he combines the knowledge and culture of the past, which we’re missing in fashion, and the codes of today. For me, that’s the mark of the great.”

“It’s a service,” is Pagès’s blunt rejoinder. “And I like to be in service.” At the same time, he acknowledges he has become the individual who most embodies ‘the fashion PR’ in the eyes of the industry. “Because I’m probably the most exposed as a person.” But the process by which the man who weaves stories for his clients has become a story himself was a deliberate move on his part.

Pagès wants to prove what’s possible in life for people like him, he says. No child of privilege, he grew up far from Paris in Vialas, a small town in the remote, mountainous Cévennes in the southwest of France. The region has traditionally been a magnet for bohemians and non-conformists. His parents Patrick and Christiane ran a hotel with a Michelin-starred restaurant. In May 1987, French president François Mitterand helicoptered in from Paris for lunch. There was, fortuitously, a journalist in the restaurant at the same time. He photographed the Pagès family with Mitterrand. Lucien refused to change for the commemorative snap. “But retrospectively, I could say that press changed my life, because after we were on the front page of the local paper, we became more established, more respected. My father became a kind of legend.”

A young Lucien Pagès snapped with his parents and French president François Mitterrand, who helicoptered from Paris for lunch at the family’s hotel and restaurant in May 1987. (Courtesy)

There’s a curious psychology attached to hotels, especially when you live in them. “I realised recently we never had a family house,” Pagès muses. “We were always living with strangers, the clients, the staff. We’d eat lunch with the staff every day, 20 or so of them. My father and mother had a room, I had a room. Because it was in the mountains, we closed during the winter and I would take another more fancy room. It was totally like “The Shining.” I’d be running down the corridor because I was scared to go to my room. The corridor was red as well. But growing up in a hotel opens you to people. Even though I was shy, I was not that shy because my house was full of strangers, and also my parents served people all their lives. And now I’m serving people too.”

Patrick had always wanted to be a photographer. He was obliged to take over the family business when his mother died young. And he was equally obliged to make it fabulous, hence the Michelin star.

“Some chefs still know my dad, but he was more important to the wine industry because he created an association of sommeliers, and all his friends became the best sommeliers of the world. We had an amazing wine cellar.” But running a hotel in a remote French village was a curse for Pagès père. He travelled constantly, taught French cooking in Japan, and opened the first wine bar in Moscow. And he had a lot of famous friends, singers, writers, even Willy Brandt, the chancellor of West Germany. “How do you make that transition?” Pagès wonders about his father. “What drives you? I would not have been what I am without his ambition because he was a kind of case study of how you create yourself.”

But in those days Patrick was perplexed by his son. The solution to his skinny, long-haired only child’s perceived effeminacy was judo lessons, once a week for three years, from age eight to 11. And all the while, Lucien was increasingly, mystifyingly drawn to fashion. It wasn’t Christiane’s doing. She had no interest in it at all. But he’d be buying Vogue, Madame Figaro and Marie Claire Bis at the local newsagent, or he’d be transfixed by the nightly news in the hope that there might be a three or four minute update on what was happening at the haute couture shows. Saturday night was “Dynasty” night. Joan Collins was Lucien’s first crush, and also the first time he saw a gay character on TV. “I was living in the village of Vialas, dreaming to be on “Dynasty.” I remember someone asking me at the time whether I was studying for my driving test, and I told him, ‘No, I will have a Rolls-Royce and a driver because I saw that on “Dynasty.”’ And he said, ‘I can’t imagine you in a Rolls-Royce.’ Maybe that gave me the drive to end up in one. Though I’m still not there.” Pagès laughs now as he remembers his life as “the only gay in the village.” He’s mostly blocked whatever torment he suffered. “But when someone new arrived who was more gay than me, everything was on him and I was so relieved.”
1989 was a watershed year for teenage Lucien. The Italian Gianfranco Ferré was appointed at Dior and the scandalised French establishment was all over the TV. Karl Lagerfeld fired Inès de la Fressange as the face of Chanel for posing as Marianne, daughter of the French Revolution. More scandal. And a Saint Laurent show was deemed to be in bad taste. All Pagès could think of was Paris. “Christiane was always on my side. She knew I was gay. She knew I wanted to do fashion so she was facilitating things. I was talking to her first about how to prepare my father to accept things.” To accept, for instance, the fact that his son wanted to be Yves Saint Laurent.

When Pagès was 18, he saw an article in the weekly Nouvel Observateur which ranked all of France’s fashion schools. The hardest to get into was the Chambre Syndicale de la Couture, very select, very BCBG. Of course, that was the one he settled on. Family friends said it would never happen. That made him all the more adamant. Pagès arrived in Paris on a Sunday, and started school on the Monday. He was terrified. He imagined everyone would be in Chanel so he wore his most fashionable look: black turtleneck, red Cimarron jeans from Spain (very fashionable in the South) and Kenzo boots. When he got to school, no one was wearing Chanel.
After graduating from the Ecole de la Chambre Syndicale, Lucien Pagès interned at Dior under designer Gianfranco Ferré. (Courtesy)

By the time Pagès graduated from the Chambre Syndicale, he knew he could draw, he knew how to make a dress, but he also knew he could never be a fashion designer. “I was not able to do it, because I didn’t dare.” But the experience coloured his career, first and foremost with the instinctive understanding it gave him of the design process and the profound respect he has felt ever since for designers. When I ask what his favourite part of his job is, he takes a long time to answer. “I like it when we help people to have success, but my favourite thing is talking to the designer beforehand. Discovering the collection, what they are creating, what they want.” Designers are his true kindred spirits. “It’s the thing he respects in other people because he has it as well,” Daniel Roseberry observes. “He has a wildly rich education in the industry.”

His education also left him with an appetite for fashion’s inner sanctums. The Chambre Syndicale belonged to the Fédération de la Haute Couture et de la Mode, so students had access to fabulous internships. For three years, before every couture and ready-to-wear show, Pagès interned with Ferré at Dior, drifting dreamily in the slipstream of Naomi, Stella, Amber, Claudia and various Arnaults. But it was Saint Laurent he craved.

He eventually wangled a meeting where he was offered a place in the atelier. He vehemently insisted that it was work directly with Monsieur Saint Laurent that he wanted, or nothing at all. Somehow, it worked, and Pagès found himself showing his portfolio to Anne-Marie Munoz, the house’s formidable studio director. He blanches as he remembers a disco collection that was more appropriate for Priscilla, Queen of the Desert than the Emperor of French fashion. Mme. Munoz felt the same way. “It’s everything we hate.” He was dismissed, only to be called back because Mme. Munoz had a change of heart. “She’s happy for you to stay because you’re discreet.”

Given that strange and shaky start, it’s small wonder that Pagès encountered some bitchy resistance. He was in his dream job but he was reminded that he didn’t belong. One day, in the grip of a panic attack, he locked himself in the bathroom and wouldn’t come out. Once again, Mme. Munoz came to the rescue, coaxing him out, giving him words of advice that still resonate with him to this day: “The road is long and the journey is full of traps.” His encounters with his idol Yves mostly involved Monsieur’s dog Moujik. The whole experience was inevitably fascinating for Pagès, but sad too. “That world doesn’t exist anymore. It showed me that fashion is changing, and we have to embrace it.”

That realisation led him straight to the heart of French fashion’s new wave. For five or so years he assisted stylist Marc Ascoli. He ended up helping out Ascoli’s girlfriend Martine Sitbon a lot, whose PR Michèle Montagne was old school in the sense that celebrity endorsements hadn’t crossed her radar. Which is how Pagès happened to intercept a fax from stylist Jessica Paster asking for some looks for her client Cate Blanchett. On his own initiative, he packed off a selection of dresses, one of which ended up on Blanchett and in Vogue. This first step into fashion PR was hardly Pagès’s Eve Harrington-like takedown of Michèle Montagne. “I wasn’t consciously building a network. I was a really good assistant, very dedicated. I never said, ‘Oh, I’ll be a PR.’ At the same time, I was in my late 20s, scared of where I would end up, and my friend Vincent Darré, who was at Ungaro, told me he was sure I would be a great PR, because I reminded him of Isabella Capece at Louis Vuitton. You know when someone turns a light on for you? I thought, ‘I should do PR.’”

At the time, he knew nothing of publicists like Karla Otto, or KCD in New York. The rest of Parisian PR was as old school as Michèle Montagne. So Pagès’s first client — the American menswear designer Adam Kimmel — was an unwitting declaration of intent. “I started working with Lucien in 2005 and he made all the difference in how a young American menswear brand could find an audience in Europe,” says Kimmel. They met through the stylist Aleksandra Woroniecka who knew his brother, the photographer Alexei Hay. “It took a bit of time,” Pagès recalls. “I helped him to do a presentation in Paris. I brought my friends. And then we decided to open the office together. He was smart. He told me, ‘If I show in Paris as an American designer, I want the French to love me. I need you as a kind of ambassador.’ So that was my mission, to make him the American that the French love.” Clearly it worked. Jonathan Anderson saw the now-legendary presentation that Kimmel did with the artist George Condo in Paris. “You just have to do one thing right. It was everything you would want in a show. I didn’t know where Adam Kimmel was from but he seemed so embedded in French culture, I instantly wanted to know who did the press for him,” says Anderson. “I brought Lucien on the minute I started work at Loewe. He was able to connect me with the French environment, which can be hard when you’re not from France. He’s good at showing you what the nuances are.”
Lucien Pagès opened his first office on 7 Rue Debelleyme after signing American designer Adam Kimmel. (Courtesy)

“When we were together, we never felt like we were working,” Kimmel remembers. “And the worst stresses that would come, he would turn into a challenge that seemed to amuse him. He had the perfect mix of humility and ballsiness, as well as kindness and sarcasm… and always with elegance and an amazing sense of humour.” The Pagès agency was, at this point, himself and an intern. Through his friends André and Olympia Le-Tan, he learned of a Japanese designer named Chitose Abe. Well-known in Japan but nowhere else, she was keen to grow. On a press trip to Tokyo for Kimmel, Pagès saw a presentation for her label Sacai. He was captivated. Now he had a menswear designer and a womenswear designer on his client list. “People had never heard of Sacai, but everybody was laughing because Ça caille is slang for ‘It’s freezing’ in French. We grew together, which is something we share. I cherish our relationship for that, because it’s totally linked to my story.”

One of the first big events that Pagès worked on was the 2010 launch of M/M Mink, a collaboration between Swedish fragrance brand Byredo and the Parisian design agency M/M. Mathias Augustyniak and Michael Amzalag were friends from his days with Marc Ascoli. Byredo signed up. “Ben Gorham was the first person who trusted me for beauty, so he opened that door for me, like Sacai opened the door for womenswear.”

You can see a pattern emerging. Friends. Friends of friends. Adventurous young brands. I think of the extraordinary Jacquemus presentation during the pandemic, when 100 people convened in a wheat field outside Paris for the first fashion show in ages. It was a testament not just to the young designer’s vision, but also to his PR’s commitment to helping him realise that vision.
Simon Porte Jacquemus is one of Lucien Pagès’ most successful young designer clients. (Saskia Lawaks)

“I think that’s still my reputation,” Pagès says. “It’s something that we preserved. We are working for the big companies — LVMH, Kering, Richemont — but I still want that we are seen as this place for talent, because I think it’s part of what we do well.” The young guns join a long list, around 100 clients in all. Beauty alone is probably 25 accounts.

As with any art gallery or agency, the client list is the key to success. “I knew that since day one,” Pagès agrees, “and that’s why I say money was never my motivation. I knew that the client list was the curation and I knew that the curation was a key to the business.” But you’ll often hear artists complaining that someone else is getting all the attention from their gallerist. Has that ever happened for Pagès? “No, because I have to be fair. There will always be frustration. It’s normal, it’s human.”

I envisage dozens of fragile egos needing a good massage and the exhausting degrees of commitment that must take. “You have to love every project,” Pagès counters. “You have to believe in it. If you believe in it, it can be enjoyable. Where it’s complicated is when you lose faith.” That happens regularly. “Yeah, I’m human,” he admits. “Sometimes there’s a project that doesn’t last long. They never take off. Also, I have experience. I see quickly when something will work or not. Three seasons, press people with experience know if there’s a chance. We know the traps.” Does someone of his repute think he can save careers with a little judicious PR? “If I arrive too late, no. Because it’s a combination of events. I can re-animate the interest, but if there is no follow-up with the commercial, with the structure…” The rest of his answer dangles unspoken over the void of oblivion.

“Sometimes PR’s can be overpowering in a weird way,” Jonathan Anderson says. “They want to hold the narrative. But Lucien is good at making a framework for the narrative to work within. A lot of the big PR companies are relics. Or they’ve collapsed. Lucien was on the cusp of change when that change was happening. He doesn’t do mean PR.” That’s a very good point. The meanness of traditional fashion publicists is one of the most caricatured facets of the industry. But Pagès agrees that the job has changed. “You have to behave differently. We are not allowed to scream at people. I was never tempted to be a monster. I don’t think it’s my nature. But if you are a toxic person, you will have trouble on social media.”

This season, Lucien Pagès will manage 25 runway shows and 11 presentations and re-sees, and nine dinners and cocktails. (Meyabe)
I feel I’ve been begging the critical question this whole time. What exactly is fashion PR? Pagès answers like someone who’s been asked it a thousand times. “For me, it’s really basic. It’s the link between a brand or designer and the media, the exterior world. I always give that definition because saying you’re doing consultancy and blah blah blah… I mean, I can be a consultant and sometimes I can be a therapist. It’s a mix. I’m there if people need my advice, but if they don’t need it I don’t give it. And sometimes I can be wrong. If you say the wrong thing at the wrong moment, you can fnck things up.”

“I understand why people don’t want to get too close to PR, because you can end up feeling manipulated,” he continues. “But I listen to journalists. I really learn a lot from them. Someone once told me about a PR who kept telling her she needed to see something because it was good, when it wasn’t. ‘She should just tell us, I need you to come.’ That stayed in my mind. Sometimes when you need people, you just have to tell them.” Pagès is always telling his team not to forget that public relations is about the relationship you create with your client or the media or celebrities or opinion leaders… whoever, just don’t forget the relationship. “Everybody matters in this industry,” he adds. “It’s a small world and creating this relationship is a key to success.”

In 2007, his father was diagnosed with cancer at the age of 57. During his four year fight, Pagès was back and forth to Vialas all the time. But when Patrick finally surrendered, Lucien was busy at Paris Fashion Week, supervising the launch of a Claudia Schiffer cashmere collection and the first show of new client Julien David. Father and son managed to iron out those childhood kinks before the end. “Dad didn’t know Adam Kimmel or Sacai, but he loved Claudia Schiffer,” Pagès says wryly. He was recently profiled in the newspaper Libération. His father’s friends called to tell him how proud Patrick would have been. No Rolls-Royce yet though.

WWD : Moncler Group 2023 Revenues Graze 3B Euros

Moncler Group 2023 Revenues Graze 3B Euros
Chairman and CEO Remo Ruffini touted the performance, celebrating the first decade since the IPO in Milan.

MILAN — Ten years after its public listing in Milan, Moncler continues to grow.

“We celebrate the anniversary with an excellent set of results, and revenues more than five times what they were in 2013,” chairman and chief executive officer Remo Ruffini said proudly during a conference call with analysts on Wednesday at the end of trading.

In the 12 months ended Dec. 31, group sales, including also the Stone Island brand, rose 15 percent to 2.98 billion euros, compared with 2.6 billion euros in 2022. At constant exchange, revenues rose 17 percent. In the fourth quarter, group revenues were up 16 percent at constant exchange rate to 1.17 billion euros compared with the same period of 2022.

He underscored that for the first time, the group financial position amounted to more than 1 billion euros (and this was after a dividend payment of 303.4 million euros).

In fact, during the almost two-hour call, analysts asked about potential additional acquisitions, given the amount of liquidity, but Ruffini said “we have in our pipeline to continue to work on Moncler and Stone Island. We have a lot of ideas and dreams to achieve and we are very confident to continue to work with the two brands.”

In 2023, net profit amounted to 611.9 million euros compared with 606.7 million euros in 2022. The gain included an extraordinary tax benefit of 92.3 million euros for a tax value realignment for Stone Island.

Operating profit rose to 893.8 million euros compared with 774.5 million euros in the previous year, with an EBIT margin of 30 percent.

“These financial results are more than just numbers: they are a testament to a decade of thinking beyond conventions, a relentless pursuit of product excellence, a consistent customer-centric focus and an unwavering brand-first strategy that continues to guide our Group and inspire our people,” Ruffini continued.

“As we look ahead, the journey continues. At Moncler, we are committed to strengthening the three dimensions of our brand — Collection, Genius and Grenoble — ensuring continued resonance with existing communities while reaching new ones. Meanwhile, Stone Island is embarking on an exciting new chapter, poised to unlock its full potential through a highly distinctive brand positioning and engagement strategy which we have recently launched.”

Ruffini admitted that the “operating environment remains complex and unpredictable. We will continue to navigate through these uncertainties remaining vigilant while leveraging on our agility and reactivity. At the same time, we will continue to invest in our organization, in our brands and in the exceptional talent within our group, with a long-term oriented mindset and always pushing for higher peaks.”

By brand, Moncler sales climbed 17 percent to 2.57 billion euros in 2023 compared with 2.2 billion euros in 2022. In the fourth quarter, sales grew 17 percent at constant exchange rates, driven by the strength of the direct-to-consumer channel, which was up 20 percent, accelerating sequentially from the third quarter. Growth improved in all regions compared to the previous quarter.

Like-for-like sales were up 19 percent in the year.

Stone Island revenues were up 2 percent to 411.1 million euros, compared with 401.1 million euros in 2022. At constant exchange rates, sales rose 4 percent in the year. In the fourth quarter, sales gained 7 percent at constant exchange rates, led by strong double-digit growth in the direct-to-consumer channel, which rose 16 percent.

Moncler sales in Asia, which includes APAC, Japan and South Korea, amounted to 1.3 billion euros, up 25 percent compared to 2022, representing 50.2 percent of the total. In the fourth quarter, revenues in the region grew by 28 percent at constant exchange. Japan, South Korea and the rest of APAC continued to record a very solid performance, all growing at a double-digit pace in the fourth quarter.

The Europe, Middle East and Africa region recorded revenues of 910.5 million euros, up 13 percent compared to 2022. In the fourth quarter, revenues in the area increased by 7 percent at constant exchange, with an acceleration driven by the DTC channel, with a positive contribution from both tourists and locals. Chinese, Korean and American customers remained the strongest contributors to tourist purchases in the region.

Moncler revenues in the Americas rose 1 percent from 2022 to 371.3 million euros. In the fourth quarter, revenues in the region were up 3 percent at constant exchange with a positive DTC business offsetting the decline in the wholesale channel. The performance of the region in the two channels was influenced by the conversions of Nordstrom and part of Saks from a wholesale to a DTC business model.

In 2023, Moncler’s DTC channel recorded revenues of 2.16 billion euros, up 22 percent on 2022.

The wholesale channel recorded revenues of 409.2 million euros, a decline of 5 percent compared to 2022 due to the conversions of Nordstrom and part of Saks in the U.S. and by the ongoing efforts to upgrade the quality of the distribution network.

As of Dec. 31, there were 269 directly operated Moncler stores, an increase of 18 units compared to the end of December 2022, including the first Grenoble store in Saint Moritz Grenoble. The Moncler brand also operates 57 wholesale shops-in-shop.

Stone Island in the EMEA region, the most important for the brand, registered revenues of 287.5 million euros, up 3 percent compared with 2022. Asia reported a 12 percent gain to 89.4 million euros.

Revenues in the Americas were down 19 percent to 34.1 million euros compared to 2022, impacted by challenging trends mostly among department stores, as well as by the ongoing efforts in upgrading the quality of this channel.

Robert Triefus, CEO of Stone Island, said he expected “higher visibility” for the brand, with increased media communication and global community engagement. In January, for the first time during Milan Men’s Fashion Week, the brand staged a presentation/fashion show event, and Triefus was speaking from Los Angeles where an archival exhibition was opening on Wednesday, taking place during Frieze there. “We are working on raising visibility in the U.S. and improve the understanding of the brand,” in that market, Triefus explained. “I have great confidence in the potential of Stone Island, but with no shortcuts, laying methodically the foundations for growth.”

The wholesale channel for Stone Island was down 5 percent to 238.2 million euros, representing 58 percent of the total, due to the focus on improving the quality of the distribution network.

The DTC channel grew by 16 percent compared to 2022 to 172.8 million euros.

As of Dec. 31, there were 81 directly operated stores, a net increase of nine units compared to the end of December 2022, and 15 wholesale stores, a net decrease of four units.

At the end of December 2023, Stone Island started the process to take full control of the brand distribution in the Chinese market, which will be completed over the first months of 2024 and which will also include the closure of some wholesale mono-brand stores.

Roberto Eggs, chief business strategy and global markets officer, said the retail trend for the group in the first months of 2024 is “very solid, we are very happy with the direct-to-consumer growth in all regions, we have kept momentum.” Responding to analysts, he said the Chinese cluster “was one of the best, growing 50 percent on a two-year stack,” and citing good performance in Japan, Hong Kong and Macao.

The Americas are “a focus for both brands” going forward, Eggs said. “We are underrepresented in the market.”

Eggs said management “is obsessed” with sales density and that for the first time, Moncler’s is reaching 38,000 euros per square meter.

Asked about buying real estate, he said “it’s not in the philosophy of the company, we have very good locations but we don’t need to buy into properties.”

In 2023, capital expenditures totaled 174.1 million euros, compared with 167.1 million euros in 2022. Investments related to the distribution network were equal to 100.7 million euros, of which more than half dedicated to renovation and expansion projects. Investments related to infrastructure amounted to 73.3 million euros, mainly related to IT, production and logistics.

Luciano Santel, group chief corporate and supply officer, said the group is “looking at increasing its knitwear facility in Italy, moving into a much bigger facility” as the category is the second leading one.

Responding to an analyst who asked to clarify Stone Island chairman Carlo Rivetti’s direct investment into Moncler, as reported, Ruffini said it was “a natural evolution of the three-year agreement” and that there was “no change in the governance structure.”

In November, EssilorLuxottica and Moncler inked a licensing agreement for Moncler eyewear, which was previously produced and distributed by Marcolin. The first collections will bow for fall 2024, and Eggs said the goal was to “enhance the identity of the product” and to leverage the “great power” of the eyewear maker’s “huge capability and distribution.”