SMCP Set to Expand Into India
The Sandro, Maje and Claudie Pierlot parent company will enter the market in partnership with retail giant Reliance Brands.
PARIS — French accessible luxury player SMCP is set to enter India through a partnership with Reliance Brands Ltd.
SMCP is parent company to women’s labels Sandro, Maje and Claudie Pierlot and men’s label Fursac. The partnership will see the first Sandro and Maje stores open in India in 2024, the French group said Thursday.
The stores are slated to open in the second half of the year at the Jio World Plaza shopping mall in Mumbai.
The group plans to open an average of three additional stores a year over the next two years, with the goal to open up to 10 units in the country by 2027. Key target markets after Mumbai will be Delhi, Bangalore and Kolkata.
“Those are the cities where you find the proper retail environment and the commercial level of retail,” SMCP chief executive officer Isabelle Guichot told WWD. “The commercial level of retail is now really developing in India and that allows for the proper brand portfolio and environment.”
SMCP had explored expansion into the country before COVID-19 and felt now was the right time to move as the country’s retail landscape has evolved and several luxury players have entered the market. India also has a potent mix of new money and demographics, Guichet said, noting the growing segment of high net worth individuals in the country, alongside upwards of 116 million eager Gen Z shoppers.
Feedback from young Indian consumers that shop in the Middle East and the U.K. helped the company “see that appetite, which really confirmed our willingness to enter the country.”
The company hopes to make inroads with that young shopper who is interested in exploring the story of French style. “It’s quite relevant for us to be a pioneering element in that segment in India,” she said. “It’s an obvious untapped opportunity for us.”
Sandro and Maje will be the first two brands making strides as the company finds its footing in the market. “Then let’s see with Claudie Pierlot and Fursac how we can maneuver once we get a little more experience in the market with Reliance,” she said.
The partnership with Reliance and their experience with luxury brands was also a key deciding factor.
RBL is the country’s largest retailer in the luxury to premium sector and has been riding the wave of expansions into the subcontinent through partnerships with high-end houses including Giorgio Armani, Balenciaga, Bottega Veneta, Valentino, Versace and more.
The Reliance conglomerate is an industrial giant that ranges from oil and gas to telecoms, media, textiles and retail. It operates more than 900 brand stores and retail concessions throughout India.
The expansion into India is continuing SMCP’s growth strategy after 46 net openings in the third quarter. The group operates more than 1,600 stores worldwide across its four labels.
SCMP is entering India at a time when it is remixing its strategy elsewhere in Asia. In China, where the company faced a slower-than-expected recovery, it is looking at opening stores on the Hainan peninsula in the south of the country as domestic tourism heats up.
“It’s a constant moving environment we will absolutely maintain and make the best of our network in China to make sure that we have the best presentation and retail execution in that country,” the CEO said.
The company will continue its strategy by enlarging or optimizing stores throughout its existing network in first- and second-tier cities, “rather than enlarging the number of cities,” she said, however noting there “may be one or two openings” in the near future.
Guichet said the dynamic in China has changed as those shoppers are moving around more within the region and heading less to far-flung locales abroad, such as Europe.
“The Chinese consumer is a very important target for us, but we have to deal with it differently — more locally, both in brick-and-mortar and digital. We have a bit of a different conversation with the Chinese client now but still very important,” Guichet said.
In Europe, a new mix of local tourism has also increased. SCMP is looking to its home country of France, which will host the Olympics next year, for another new injection in Paris, as well as cities like Lille and Marseille where some events will be held. The company is mapping that strategy out. “We are really scrutinizing very closely the program and what will be the flow,” she said.
Elsewhere, the Americas are “normalizing” after a pointed drop in Chinese tourists heading to Canada. The company is continuing its expansion in the U.S. with two openings in New York City’s Meatpacking District slated for mid-December, and an opening in Scottsdale, Ariz., in the first quarter of next year.
SMCP’s continuing concentration on developing its omnichannel strategy is being adapted to the different markets, with a focus on integration and streamlining logistics. “The technology and infrastructure behind it are really for us a key to our retail development,” she said. “Globally, we are making sure our omnichannel capacity and capabilities from reservations, ship from the store, [and] to resale, circular economy are developing.”
That development brings in a bit of a different client mix, as the company concentrates on its post-pandemic full-price strategy. Digital channels “sometimes attract people more eager to look for nice prices,” but that is shifting. For example, the Maje “Miss M” bag launched in September sold out quickly, Guichet said, and customers were able to use the digital services to reserve and place a deposit for the next drop.
November “was a big month in digital,” Guichet said, adding that China’s Singles’ Day was strong, as well as Black Friday kicking off the holiday season elsewhere in the world.
The company continues to be “watching very carefully what happens” with macroeconomic and political conditions shifting quickly worldwide. “It’s something that has an impact on consumer behavior, but we’re looking at what’s going on and we’re preparing [for] the last month of the year with the utmost care and attention.”
Guichet said the company’s corporate social responsibility is a main pillar and “key to each and every move that we do…there will be no U-turn,” she said. One move is that the company is shifting away from using oil-based virgin polyester to recycled materials, as well as using more natural fibers. “It’s very important that we keep in mind that it’s no longer an option, it’s something that is part of our business model and that is to be conveyed properly to the client,” she said.
The Gen Z shoppers are particularly keen on this information before making purchasing decisions, she said, and are aided by the inclusion of QR codes that have traceability information available. Guichet said about 70 percent of the company’s stock keeping units now carry the QR codes on hangtags.
The French company has seen a slowdown in consumer spending in key markets in Europe and the Americas, as well as a slower-than-expected recovery in China, dampening its growth in the third quarter.
In the most recent financial results released in October, the company reported sales fell 1 percent at constant exchange to 295 million euros during the three-month period, while it seeks to implement a cost-cutting and full-price sales strategy to boost its numbers.
India’s apparel sector is set to grow about 3.6 percent per year through 2027. The market reached $101 billion in 2023, with the market value of women’s apparel estimated at $49 billion.
3 Myths About AI Investing
The market is exuberant about AI, and rightly so, but that exuberance has caused many VCs to lose their minds, chasing any deal with a dot-ai domain name.
Some of the investment rationales are based on conventional wisdom that’s just wrong — I call these the “myths” of AI investing.
Here are three of the most common:
Myth No. 1: First-mover matters
So many VCs have been quoted breathlessly saying: “We have to be first and fast to catch the AI wave.”
That’s sloppy thinking — or, more likely, the absence of thinking. Think about Pets.com vs. Chewy. Webvan vs. Instacart. AltaVista vs Google. Myspace vs. Facebook. Being first isn’t necessarily a disadvantage, but it’s not necessarily an advantage either.
Spencer Greene
There are specific, narrow situations where being first is important. In a “land-grab” market, for example, the first company that spends enough to acquire a majority of customers can establish long-term hegemony.
That was the strategy behind a16z’s overcapitalization of Clubhouse. It didn’t work that time, but sometimes it does.
In other industry structures, though, being well-capitalized and first means you are educating customers on a new behavior and making it easy for later entrants to acquire them on the back of your investment.
With AI moving so fast, the benefits of being first are arguably even weaker than in slower-moving markets.
Google and OpenAI have spent billions of dollars on technology that Facebook is now giving away for free. This is not to say that Google or OpenAI won’t be successful — they’ll do fine.
But if you hear a startup or an investor citing first-mover as their primary source of competitive advantage, you need to be very skeptical indeed, as it means they haven’t thought through the hard question of how to sustain advantage over time.
Myth No. 2: Exciting product = exciting business
This is a common logical fallacy, confusing necessary with sufficient. It’s generally true that you need to have a good product to have a good business, but being a good product isn’t nearly enough.
Netscape literally invented the World Wide Web; its Navigator browser may have been the single most impactful product of the last 50 years. Still, it turned out to be a terrible business.
In AI we are seeing new gee-whiz demos every day. There’s truly amazing, science-fiction-y stuff coming out regularly now. But here’s the thing: A lot of it is not going to make money.
How cool something is often doesn’t correlate to its business potential. Often the real money is in the less sexy markets. Think about Netscape, the inventor of the web browser, vs. F5 Networks, a leader in — wait for it — HTTP load balancers. One generates $500 million of free cash flow; the other is an exhibit at the Computer History Museum.
Myth No. 3: Incumbents are slow and stupid
It’s accepted wisdom that large companies can’t innovate, and that when the world changes startups always win.
Think about Netflix vs. Blockbuster, Airbnb vs. Hilton, PayPal vs. banks, Amazon vs. Barnes & Noble/Tower Records/Walmart.
Tech companies currently occupy all five of the top spots in the S&P 500; in 2010, there were none even in the top 10. Obviously, then, new “AI-native” startups will knock off today’s incumbents and achieve similar dominance, right?
Actually, no. AI companies seeking to disrupt Big Tech incumbents mostly won’t succeed, because Big Tech is hyper-aware of AI, has plenty of talent, controls most of the world’s data, and is spending freely.
When you hear “software is eating the world,” the “world” that is being eaten is the world of traditional, nontech businesses, like Barnes & Noble. Those were businesses that treasured profits over investment (didn’t spend freely), were not cool or lucrative places for innovators to work (didn’t have the talent), and that misunderestimated how the world was changing (not hyperaware).
Of course, there will be successful outliers who will beat Big Tech here and there, but broadly speaking Big Tech is much less vulnerable to disruption than pre-internet companies were.
Where AI startups will succeed is in battles against nontech incumbents. The 80% of the S&P 500 that is not tech is the most vulnerable to AI disruption from startups. Industries that were too difficult to automate in the pre-AI era, and that can be automated now for the first time, are the best opportunities.
So, don’t expect that AI will eat software, at least not in the sense of new AI-native companies displacing Microsoft or Apple. Instead, we can say: Software ate some of the world, and now AI has come along to eat what software could not digest.
Federal Reserve not ready to start talking about interest rate cuts
Policymakers are wary of calling time on tightening campaign prematurely even as data suggests work may be nearly done
Federal Reserve officials are preparing to leave their historic interest-rate raising campaign on hold next month for the third meeting in a row — but that does not mean they are ready to discuss cuts yet.
Since July the federal funds rate has held steady at a 22-year high of 5.25 per cent to 5.5 per cent, a level that policymakers have described as “restrictive” for households and businesses as the central bank seeks to curb demand across the world’s largest economy.
But officials have danced around two crucial questions: whether rates are now high enough to bring inflation down to the Fed’s 2 per cent target, and how long they must stay at a “sufficiently restrictive” level.
Those questions will remain unanswered when the Federal Open Market Committee convenes in mid-December for the final gathering of 2023. Fed officials are poised to leave open the possibility of more tightening while keeping prospective cuts at bay, even as the economic signals increasingly suggest the debate within the central bank will begin to creep in that direction.
The hesitation to officially declare the rate-rising phase of the inflation fight over, and address more directly the parameters for rate cuts, stems in part from concerns that doing so could unleash a wave of looser financial conditions that undermine the Fed’s efforts to rein in price pressures.
In one cautionary sign, US stock markets have rallied sharply in recent weeks as long-term interest rates have fallen — something Christopher Waller, a Fed governor, on Tuesday said serves as a reminder that “policymakers must be careful about relying on such tightening to do our job”.
That rally accelerated this week after Waller said he was “increasingly confident” that monetary policy was in the right place to achieve the Fed’s goals, and suggested rates could come down if inflation moderates “for several more months”.
Now, traders in futures markets wager the first cut will come in May, and that the policy rate will hover around 4 per cent by the end of next year, about a full percentage point lower than its current level.
Policymakers are also genuinely uncertain about how quickly inflation will cool and whether the recent string of better than expected data will prove fleeting — as was the case in 2021 — or if consumer price growth will plateau at an unacceptably high level.
Thomas Barkin, president of the Richmond Fed, on Wednesday warned that if inflation looks set to “flare back up, I think you want to have the option of doing more on rates”.
Jay Powell, Fed chair, also seemed wary earlier this month of again being “misled” by positive news on the inflation front as he kept the door open to more tightening.
“I would be very surprised if anytime soon you heard commentary from somebody like the chair or others that ‘we’re done’,” Charles Evans, who retired from the Fed in January after serving 15 years as president of its Chicago bank.
John Roberts, who worked for 35 years at the Fed until his departure in 2021, added: “It’s definitely not time for a victory lap.”
Still, officials have been unable to deny that the data is starting to suggest they may have done enough to squeeze the economy. Consumer spending has begun to cool alongside business activity across both the manufacturing and services sectors. Demand for workers has ebbed, too, without causing serious cracks in the labour market.
Perhaps the most encouraging signal came from the October consumer price index report, which showed annual inflation had moderated to 3.2 per cent — more than analysts had expected — as cost increases slowed.
For rate cuts to be considered, officials need to be confident inflation is trending back to 2 per cent in a sustainable way. Powell said earlier this month that officials are not thinking about such policy action “right now at all”.
But Powell has previously offered up clues about the Fed’s thinking. He hinted in September that rate cuts could be warranted as inflation moderates, so the central bank’s policy settings do not become more prohibitive. Such an adjustment could resemble the series of cuts the Fed implemented over three meetings in 2019 — which it dubbed a “mid-cycle adjustment” — aimed at mitigating risks to the economy.
At minimum, the Fed likely needs to see several inflation reports that reflect a downward trend, as October’s CPI report indicated.
For Roberts, now a senior adviser at Evercore ISI, a “headfake-proof” threshold would be core inflation as measured by the personal consumption expenditures price index hitting a six-month pace of 2.5 per cent with wage growth also moving down.
As of October, core PCE was running at an annual pace of 3.5 per cent following a 0.2 per cent monthly increase in prices, data released on Thursday showed.
“It’s not implausible that by mid-year inflation could be down to where the Fed would be wanting to cut,” Roberts said.
A sudden, sharp downturn in activity could also influence the Fed’s approach, although staffers and officials are not expecting that.
According to individual forecasts published in September, policymakers predict just 0.5 percentage points’ worth of cuts next year with core inflation cooling to 2.6 per cent, slower growth of 1.5 per cent and a slightly higher unemployment rate of 4.1 per cent. Those estimates will be updated next month.
Economists at Deutsche Bank currently forecast the Fed will begin lowering its policy rate in June, bringing it down by a total of 1.75 percentage points by year-end, as the economy tips into a “mild” recession in the first half of 2024. UBS also anticipates the US economy to flatline around 0.3 per cent next year and expects cuts beginning in March.
Evans said: “They do have the ability now that inflation has come down that if the economy weakens, they can reposition the funds rate lower but still be restrictive in that environment.
“I think they have more policy options if they get into that situation [compared to] if inflation was closer to 4 per cent and they weren’t sure it was coming down.”
OpenAI CEO Sam Altman went on an 18-month, $85 million real-estate shopping spree — including a previously unknown Hawaii estate
- OpenAI CEO Sam Altman owns multimillion-dollar properties in San Francisco, Napa, and Hawaii.
- Altman, fired then reinstated as OpenAI's CEO this month, has tried to keep a relatively low profile.
- When Business Insider set out to catalog his assets, we found a previously unknown giant estate.
Years before the recent drama at OpenAI turned CEO Sam Altman into a household name, the former Y Combinator president went on an extraordinary 18-month, $85 million real-estate shopping spree, according to records reviewed by Business Insider — including a previously unreported $43 million Hawaii estate on land that locals describe as historically significant.
The purchases, which also include multimillion-dollar residences in San Francisco and Napa, California, took place between early 2020 and mid-2021, when Altman was ginning up support for his eyeball-scanning crypto startup, Worldcoin, and releasing OpenAI products in private beta, BI's review of business and real-estate filings found.
A spokesperson for Altman declined to comment.
Altman's precise net worth isn't known. As the CEO of OpenAI, his salary is just $58,333, according to IRS filings, and his equity stake in the company is so small that it's "immaterial," he's said. He's made more than 400 investments in nine years, BI previously reported, in companies across diverse fields such as commercial flights and brain implants.
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Earlier this year, Altman seemed to take a subtle dig at his fellow tech executives for amassing too much wealth.
"This concept of having enough money is not something that is easy to get across to other people," Altman said at the Bloomberg Technology Summit in San Francisco.
But as Altman's wealth has grown, he's become increasingly removed from the daily life of the non-ultra-ultra-rich. His mother told The Wall Street Journal in March that Altman hadn't been to a grocery store in four or five years. In 2021, he hired his cousin to manage his family office.
Here's where Altman spends his time.
Sam Altman's Hawaii estate is immediately adjacent to the reconstruction of the royal temple of King Kamehameha I.
A $43 million estate in Hawaii
In July 2021, Altman bought a 12-bedroom estate in Kailua-Kona, on the Big Island of Hawaii, for $43 million. Judging by listing photos, the property has a private inlet and several houses. The estate is adjacent to a national landmark, a reconstruction of the royal temple of King Kamehameha I, the first ruler of the unified Hawaiian islands.
"This land here is very sacred," the security manager of the property said in a recent video posted on YouTube about the estate urging visitors to be respectful. The property, he said, "is presently on the platform that the original house of King Kamehameha I resided." He added that the land was "one of the most historical places here in Hawaii."
A second video highlighted the estate's adventurous amenities, including cliff jumping, motorboating, wakesurfing, Jet Ski-ing, and scuba diving. A person who worked on the second video said the intent was to produce something that friends and family could watch to remember their trips to the residence. (Both videos were removed from YouTube after BI requested comment for this article.)
Altman's purchase of the Hawaii property has not been previously reported. BI linked the property to Altman by examining business and real-estate filings showing the land was owned by an LLC managed by Jennifer Serralta, whose name appears as a manager on paperwork for other businesses known to be owned by Altman. Serralta, who previously worked in the automotive industry, describes herself on LinkedIn as the chief operating officer of a family office — presumably Altman's — and is his cousin, according to an obituary for their grandmother. Reached by phone, Serralta declined to comment.
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Family offices are entities established to manage the finances and investments of wealthy individuals, wrangling everything from real estate and yachts to philanthropy. Altman's, like those of many Silicon Valley tech CEOs, is intensely private. He has launched several investment vehicles over the years, including one with his brothers, Jack and Max, named Apollo Projects, and another entity titled Altman Family LLC.
In a March post on her personal blog, Serralta wrote that she stayed at a Kailua-Kona property owned by "a friend" while vacationing in Hawaii. Last year, Altman tweeted a photo of himself wakesurfing in Hawaii; the view of the Big Island in the background of the photo precisely matches the view from the Kailua-Kona compound. And in 2021, Altman registered a business, the Sam Altman Qualified Opportunity Fund, at an address adjacent to the property. (It's possible that Altman wanted to register the business to his address but made a mistake; the address he used differs from his own by just one digit and has been owned by the same person since 2007.)
He joins a roster of Silicon Valley titans with Hawaii estates, including Mark Zuckerberg, whose property purchases on the island of Kauai have sparked controversy, and Larry Ellison, who owns most of the island of Lanai. Marc Benioff, Jeff Bezos, and Peter Thiel have also scooped up sizable properties on the islands.
Altman has one family connection to Hawaii: His youngest sibling, Annie Altman, has lived on the islands on and off since 2017. Annie Altman, an artist and entertainer who has supported herself through in-person and virtual sex work, lives a much-different life from her brother's. Annie is teetering on financial insolvency, she told BI, after a lengthy stretch of illnesses. She has not spoken with her brother since 2021, when she refused his offer to buy her a home after learning that a lawyer would control the property, she said.
She had been unaware that her oldest brother owned property in Hawaii until BI asked her about it, she said.
A $27 million San Francisco home
Altman's weekday residence is on San Francisco's Russian Hill, once described — inaccurately — as the most expensive home in San Francisco. He purchased it through an LLC in March 2020 for $27 million, according to property and business records.
The compound, with sweeping views over San Francisco, includes a main residence, a wellness center, a cantilevered infinity pool, and an underground garage with a car turntable, BI reported earlier this year.
The property is the home base for a number of Altman's investment vehicles, according to business and Securities and Exchange Commission filings, including the venture firm Apollo Projects, 9Point Ventures, and Uncommon Ventures. In recent weeks, the property functioned as a war room for Altman and his closest allies as he planned his return to OpenAI.
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A $15.7 million ranch in Napa
Altman took a New York Times reporter to his weekend home, a working ranch in Napa, earlier this year. The reporter, Cade Metz, described the estate as "both folksy and contemporary," adding: "The Cor-Ten steel that covers the outside walls is rusted to perfection."
Altman purchased the 950-acre property in late 2020 for $15.7 million through an LLC, according to real-estate records reviewed by BI. The estate comprises five homes and vineyards in a picturesque Northern California landscape.
Several Altman companies are or have been registered to the address, including the opaquely named Project 2024 LLC, as well as another Altman venture firm, Hydrazine Capital.
At the time of purchase, one of the property's former owners described the buyer, whom he did not name, as having "complete passion for the land."
"It's hard to explain how marvelous it is to live where there are still river otters on your property and oaks that are centuries old. He gets it. He's enthusiastic about it," the former owner, the Hollywood lighting designer Bob Dickinson, told the San Francisco Chronicle. "He has a very close family, and I think his motivation is to make it the same kind of community experience with his family and friends."
Altman flies groups of friends and colleagues to the property frequently.
A 'big patch of land' in Big Sur, cars, and planes
In 2016, Altman told The New Yorker that he owned a getaway in California's Big Sur that he could "fly to" if a superpowerful artificial-intelligence attack led to "nations fighting with nukes over scarce resources." (He added that he had stockpiled "guns, gold, potassium iodide, antibiotics, batteries, water," as well as gas masks from the Israel Defense Forces to prepare for that event.)
BI wasn't able to find which "big patch of land" Altman said he owned in the expensive coastal California enclave, but it seems likely he'll be able to fly himself there in the event of the apocalypse: A 2010 document shows Altman is licensed to fly single-engine planes, and he's posted about small-plane trivia on X. In the same New Yorker interview, Altman also copped to owning five cars, including two McLarens and an "old Tesla." Altman posted on X in 2014 about owning a Tesla Roadster, of which only 2,450 were made. The cars are now collectors' items selling for more than $100,000. He's also posted about owning a 2013 Tesla Model S.
Bally — can the shoemaker finally make a footprint in fashion?
After a deal to sell the leather goods brand fell apart, Bally’s Simone Bellotti and Nicolas Girotto are forging a fresh — and quintessentially Swiss — identity for the label