TheChek News Flow

Having made one trading error already this month, I’m now buying energy stocks

Just back from Los Angeles and recovering from a friend’s 50th birthday bash. The highlight was his wife assuring us that she’s requested some old Paul Oakenfold tunes from our clubbing days. Turns out the DJ knew them only too well.

The legendary disc jockey was faultless on the decks. Unlike me last week, when I committed what is known as a “fat-finger” mistake. Typing in a trade, I pressed the wrong key and now have almost a fifth of my portfolio in Asian equities.

Oops! Time will tell whether I win or lose versus the roughly 15 per cent allocation I wanted. Has anyone else ever done this? And please email me your best examples of riches made from genuine screw ups.

I need reassurance because my error is giving me panic attacks due to a similar blunder more than 20 years ago. It was the worst of my professional life and also got my wonderful boss in a lot of trouble.

The asset management firm where I was running Japanese equity funds was implementing a huge allocation switch. At the same time we were rejigging every portfolio and I had been working all weekend.

Japanese stocks have high unit prices, so we had to make difficult investment calls, name after name. For example, although I might have wanted a 3 per cent weighting in one company, the maths meant only a 2 or 4 per cent allocation was possible.

All of which is to say that having entered what felt like was my thousandth trade of the evening, I didn’t notice the extra zero added to a buy order for NTT Data. Trigger warning, Gen Z: next morning I received a clip round the ear.

An asset manager’s fiduciary duty means we had to reverse the trade immediately. If the stock went up, the client’s fund would book the gain. If it fell, they are reimbursed by us.

Sod’s law guaranteed the share price dropped overnight, and so my mistake cost a lot of money. Worse was NTT Data then soared over the following days and weeks. I swore never to forget the lesson. It seems I have.

Fat fingers are not uncommon, though we probably can’t use that phrase any more. Let’s just say that a healthily proud digit was supposedly responsible for a 6 per cent fall in the pound in 2016. And the year before, a colleague of mine accidently sent £6bn to a client upon inputting a gross instead of net number.

Usually, errant trades are spotted by software. Or clients agree to reverse them, as in the case above. But the likes of you and me are stuck with our plus-sized errors. I couldn’t find any information on how to cancel or revise a trade on my broker platform.

That said, the correct response when a salad-averse finger takes a breather on the wrong button is the same for retail and professional investors alike. Correct the mistake, accept a small profit or loss, and move on.

Don’t do what I’m doing and hope markets go your way. Or, like me, try to retrofit a post-trade justification such as “I’m glad I bought too many Asian equities as they were cheaper than what I was supposed to buy. Actually a 20 per cent weighting does make more sense.”

Truth is, I wish I hadn’t spent the surplus cash at all, as I’m warming ever more towards buying an oil and gas ETF. Last week I explained that high- emitting stocks outperform, and why that might be. But I needed to review valuations first.

They are certainly more attractive than three weeks ago when Brent was approaching $95 per barrel. Since then, oil prices have fallen 15 per cent, taking most of the popular oil and gas ETFs with them.

But are they cheap? And what is the simplest way for a non-expert to value them? Like all companies, in the long run they are worth the present value of their future cashflows. What makes the resources sector unique, however, is that it generates cash by selling its fixed assets.

Most industrial firms derive revenues by continually producing current assets. By contrast, oil and gas companies deplete their reserves. This means cashflows dry up if they make no new discoveries, and exploration costs are capitalised if fruitful.

So just as normal assets are depreciated, reserve depletion hits the profit and loss account. Annoyingly, oil and gas companies sometimes do this at different rates. They also have hugely varying amounts of debt.

For both these reasons it is better to look at cashflows instead of earnings, and it is why analysts spend so much time assessing reserves as well as exploration and development costs. Production volumes and associated expenses also affect profitability.

All that before the nightmare of trying to work out the supply and demand for oil and gas worldwide. I take the view that markets have already discounted a best guess on geopolitics, macroeconomics and all the other fundamental and technical drivers. What do I know?

And the reality is that even the most diversified of energy stocks still have a 50 per cent-plus correlation to oil prices. Indeed, the latest JPMorgan sensitivity analysis shows that for Shell, say, free cashflows jump by a third if Brent rises from $80 to $100 per barrel.

The trouble is, oil is not a hundred bucks, and global valuations, while down some, aren’t as cheap as they were a year ago. But also remember that oil prices are nominal. If inflation stays high, the chances are oil will be in three figures again.

It’s a better inflation hedge than my inflation-protected bond ETF anyway, as I’ve explained in previous columns. I’m going to swap them — assuming I press the right button.

CNN

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Iceland has declared a state of emergency, with police officials urging residents to evacuate the coastal town of Grindavík following an intense wave of earthquakes in the southwest of the country linked to a possible volcanic eruption.

Nearly 800 quakes were recorded between midnight and 2 p.m. on Friday, with the shallowest at a depth of 3-3.5 kilometers (1.86-2.18 miles), according to the Icelandic Meteorological Office.

In statements Friday, Iceland’s Civil Protection Agency said a magma tunnel that is forming could reach Grindavík. But as of Friday evening, the Icelandic authority said it has been impossible to tell if and where the magma might break through to the surface.

“Earthquakes may become bigger than those that have already occurred, and this sequence of events could lead to an eruption. However, there are still no signs that the magma is nearing the surface. Its progress is being closely monitored,” the Civil Protection Agency said.

Magma is a mixture of molten and semi-molten rock found beneath the surface of the Earth that can cause an eruption when it finds its way to the surface, becoming lava.

Authorities urged residents to evacuate calmly and emphasized that there is no imminent danger.

“We want to reiterate that residents MUST evacuate their homes and leave the town. But we also want to reiterate that this is not an emergency evacuation, there is plenty of time to prepare, secure things and drive out of town calmly,” the Civil Protection Agency said.

“It is clear that we are dealing with events that we Icelanders have not experienced before, at least not since the eruption in Vestmannaeyjar. We faced that together, we will face this together and we will not lose heart,” the Civil Protection Agency added.

The US Embassy in Iceland issued a volcano alert, warning about the increased signs of volcanic activity.

“If an eruption occurs, follow the instructions of Icelandic authorities. Volcanic hazards may include lava, toxic gases, and heavy smoke from fires ignited by lava,” it said.

The world-famous Blue Lagoon thermal pool in the area has already closed due to the ongoing seismic activity.

Since 2021, there has been an eruption almost every 12 months and the latest one took place in July south of Iceland’s capital Reykjavik.

Iceland sits on a tectonic plate boundary that continually splits apart, pushing North America and Eurasia away from each other along the line of the Mid-Atlantic Ridge. It is home to 32 active volcanoes.

Men's accounts for about 10 percent of turnover, with the goal of reaching 30 percent in two years.

French furrier Yves Salomon is expanding his reach in the menswear business. After presenting his first full men’s line for fall 2023, the brand’s first summer collection will launch in January during Paris Men’s Week.

It’s been a piece-by-piece progression since the brand created its first outerwear for men in 2015 after it discovered guys were buying military-inspired women’s parkas off the rack. Salomon has slowly added items since then.

“We had a lot of requests, so we decided to extend it,” Salomon said. “Actually, a lot of men like the way we approach fashion — especially our winter garments.”

The fall collection features slim-cut jackets, blue and khaki trousers with suspenders, cashmere sweaters and the smart casual quarter-zip collar popularized by “Succession.” Shearling coats are also offered.

Although the lightweight nature of the summer season initially presented a dilemma for the company — “It was a challenge because there is no fur and no shearling,” he said — Salomon is going full steam ahead with the ready-to-wear collections and sees the category as a main growth driver. Men’s represents about 10 percent of sales now, but he sees that increasing to 30 percent within two years.

To help achieve that goal, the brand has opened a corner in Paris’ Le Bon Marché, and will open a pop-up in London’s Harrods — the only department store in U.K. that still sells fur — in December. “We are satisfied with the results — it is one of the best[sellers] on the floor,” said Salomon of the Le Bon Marché corner.

In addition to the ready-to-wear, the brand has also developed a full men’s ski collection, which is sold mostly in its 15 company-owned stores, centered in resorts around the world. The ski line will also have a big push in China where the goal is sell in 1,000 ski resorts by 2030. “There is huge demand in the winter ski garment sector there,” he said.

Salomon sources fabrics from Italy and Spain, with fur coming from Scandinavia, with the majority of the collections produced in France. Salomon said they are “using their know-how” from the women’s lines for the men’s collection, which is designed by a team based in Paris.

“There is demand for a luxury product that is also fashionable, comfortable and done with beautiful material,” he said. “There is a little bit of a vacuum in the market.”

New products in the men’s line include cashmere sweaters, which have initially sold well and will be expanded. And it has developed a range of fur-alternatives for retailers and platforms such as Mr Porter, which have ethical policies.

“Because we do not have big distribution, we feel we have a huge potential for expansion,” he said.

As a way to beef up its wholesale presence, Salomon will participate in January’s Pitti Uomo show in an effort to reach new buyers. “We’re going to be quite aggressive commercially to extend our distribution.” The company’s ability to now offer two full collections a year should also help the brand reach its potential, he believes, as its previously limited range was a problem for retailers.

Pieces in the men’s line range from 300 to 3,000 euros for its signature fur-lined Army parka. Salomon believes this price range positions it competitively among luxury brands. “[Our target] is a man who can afford a beautiful, nice garment,” he said. “We are quite aggressive on price and so it is the man who is looking for a luxury product and value.”

In the U.S., the brand operates a store in Aspen and sells at Bergdorf Goodman in New York, but the country is a major growth target for 2024. “We find a lot of great potential there. For the moment it is not a big market but we expect it to grow,” he said, noting they will extend their reach through additional department and specialty store distribution instead of opening more standalone stores.

China also is a target, due to the rising popularity of skiing and snowsports. It’s available through Lane Crawford and Salomon will work to expand distribution with specialty stores as well. South Korea is also a target for the brand.

While expanding wholesale is a key strategy, direct-to-consumer is also a focus. Web sales account for around 20 percent of sales and Salomon is seeking to more than double that over the next two years. “We are doubling the investment in communication and the team will also be doubled,” he said.

Despite many luxury brands goinng fur-free, including Armani, Prada and all the Kering houses including Balenciaga, Gucci and Saint Laurent, Salomon will continue to use fur, particularly in men’s.

“What’s interesting is the attitude for men’s fur is not as aggressive as women’s,” he said. “I question myself every day but I think they feel that their own comfort is more important than the criticism they could get.”

The history of self-driving cars has been one disappointment after another. Tesla CEO Elon Musk has been promising fully autonomous vehicles since 2014, but the technology remains a science experiment.

Earlier this year, the National Highway Transportation Safety Administration ordered Tesla (ticker: TSLA) to recall more than 360,000 cars over safety concerns with its “full self-driving” beta software.

In October, California suspended General Motors’ (GM) Cruise robotaxi unit from operating in the state, after a series of safety incidents. And, this past week, Cruise announced a recall after one of its robotaxis hit and dragged a pedestrian in San Francisco.

Those drivers hoping to read Barron’s from the back seat of their cars will have to wait.

But, in some areas, the future of autonomous driving continues to make progress. And for investors, there’s a way to play the theme that doesn’t require a direct bet on Tesla, GM, or any other automobile manufacturer.

Mobileye Global

MBLY

3.32%

(MBLY) is a Jerusalem-based autonomous-driving systems company that first went public in 2014, before selling itself to Intel (INTC) for $15.3 billion in 2017. It returned to the public market late last year at $21 a share, opened for trading at $26.71, and now sits at $37, up 75% from the offering price. (Intel continues to own a majority of the stock.) It’s one of the few big initial public offerings of the past 18 months. As a successful IPO, it’s in even rarer company.

The momentum for the stock could continue, especially if Mobileye founder and CEO Amnon Shashua is right about the future of the business. Unlike Musk’s self-driving promise, Shashua sees a middle ground for autonomy, making cars safer while keeping drivers behind the wheel. At least for now.

Shashua founded Mobileye in 1999, capitalizing on his academic research on computer vision systems at Hebrew University. Fifteen years later, the company launched the largest-ever U.S. IPO by an Israeli company.

To be sure, the stock isn’t cheap. Wall Street estimates call for 2023 revenue of about $2.1 billion, with adjusted profit of 71 cents a share, giving the stock a valuation of 50 times projected earnings and 14 times forward sales.

But Mobileye’s business is about to change in a way that analysts don’t fully appreciate.

Currently, the company makes systems for auto makers—mostly front-facing cameras and related software—that help to make cars safer. They handle tasks like collision avoidance, emergency braking, and lane-keeping, protecting drivers from their own bad behavior.

Shashua estimates that 60% to 70% of new cars now ship with front-facing cameras for safety applications, and Mobileye thinks it has about 75% of that market.

Over time, those systems will grow in sophistication and power—and the focus will shift from saving lives to saving time. And that’s where the big money awaits.

Shashua is particularly excited about a Mobileye platform called SuperVision—an apt name for a technology that can see better than humans, while supervising automobile safety.

SuperVision has been installed in about 100,000 Zeekr cars, produced by China-based Geely, which is getting ready to expand sales of the line into Europe. Mobileye also has agreements in place to add SuperVision to new models from Porsche (PAH3.Germany), Polestar, and Volvo over the next three years.

Shashua says Mobileye is negotiating with 10 additional auto makers with a combined 34% of global auto production to add SuperVision, with “many more” in the pipeline.

The Mobileye chief concedes that some companies, including Tesla and Mercedes, are likely to continue to develop self-driving systems in-house, but he thinks many others will turn to Mobileye as a better alternative.

“Very few car makers will be able to sustain their own development of these high-end systems,” he says. “The rest will find their systems are not optimized in terms of time to market, in terms of costs, in terms of performance.”

Citi analyst Itay Michaeli recently wrote that Cruise parent GM could be considering a shift to SuperVision from its own proprietary UltraCruise program.

“One must wonder whether Cruise’s recent setback might compel GM to consider a Plan B so as to provide Cruise with more time to resolve recent issues—in turn keeping Cruise focused solely on robotaxis for the foreseeable future,” wrote Michaeli, who has a $72 target on Mobileye stock, about double the current price.

Mobileye’s hardware currently generates revenue of $54 per vehicle. Those cars offer ADAS—advanced driver assistance systems—with a front-facing camera that can provide features like emergency autonomous braking, lane-departure warnings, and adaptive cruise control.

Shashua says the company’s revenue per car can double to about $100 by adding cloud-connected features that access high-definition maps, enabling cars to achieve lane-keeping without road markers, for instance.

But even those numbers look tiny compared with the opportunity from SuperVision. Shashua says that system will generate revenue of about $1,500 per vehicle for Mobileye. With those systems, the car gets a network of 11 cameras, along with onboard computing capability, and in some situations a hands-free experience for the driver—a significant step toward full autonomy.

Shashua sees a market for SuperVision-level cars of one million vehicles by 2026. Cowen models 2024 SuperVision shipments of 200,000 units, twice the company’s own 2023 target.

Mobileye has also developed a less-expensive version of the self-driving system—SuperVision Lite—for lower-cost vehicles. That one comes with seven cameras, only works on highways, and provides more limited opportunities for hands-free driving.

Further out, Mobileye expects to sell auto makers a $3,000-per-vehicle system called Chauffeur, which will allow drivers to safely take their eyes off the road, initially on highways. Mobileye already has deals with FAW Group, a Chinese auto maker, and Polestar to use Chauffeur.

Shashua says that almost every auto maker will be using SuperVision—or something like it—in at least some models by 2026. “Autonomy is coming to consumer cars,” he says. “This is not speculation anymore.”

To be clear, this version of autonomy doesn’t match Musk’s back-seat experience. With SuperVision, Shashua says, you can take your eyes off the road and your hands off the wheel but you still need to be in the driver’s seat—and awake.

Eventually, though, Shashua says, the software will allow cars to drive from Point A to Point B without any human intervention—and without any need for human supervision. Which is to say, you’ll be able to go to sleep.

Shashua’s timeline has cars traversing highways with “eyes off” systems in 2026, adding arterial and urban roads by 2028. He says the cost of those systems to consumers will be about $10,000 per vehicle. And he thinks they will sell like hotcakes.

“I think $10,000 for a real eyes-off system is something that will have big traction,” he says.

If he’s right, Mobileye shares are going to get big traction, too.

The Collection of a Discreet Hedge-Funder Has Quietly Become Active Business

When financier Arthur Samberg died in July 2020 at 79, he was best known as the founder of Pequot Capital Management, one of the largest US hedge funds in the early 2000s. But court documents reviewed by ARTnews reveal that, behind the scenes, Samberg and his family were quiet major art collectors, owners of blue-chip works by Jackson Pollock, Constantine Brancusi, Willem de Kooning, Roy Lichtenstein, Andy Warhol, and Edward Hopper, among others.

Beginning in February 2021, Samberg’s estate began selling off holdings to select galleries, according to public records filed in New York at the time. Among the works consigned were Jenny Holzer’s Go where people sleep and see if they are safe, a red granite bench first produced in 1983, and an untitled LED sign from 2003, both of which were privately consigned to Hauser & Wirth. Around the same time, the estate also consigned Joyce Pensato’s 2016 painting Flashy Donald to Friedrich Petzel in New York.

Samberg founded Pequot in 1998. By 2001, the firm was reported to be the largest hedge fund in the world, with $15 billion in assets. Only eight years later, Pequot closed following an SEC insider trading probe, Samberg and Pequot agreeing to a settlement that included a $28 million fine and barred him from association with an investment adviser.

Samberg and his wife, Rebecca, were noted philanthropists, particularly for major Jewish organizations and higher education. Though they were noted supporters of organizations like Jazz at Lincoln Center and the Jacob Burns Film Center, and Rebecca served as a trustee at the Katonah Museum of Art in Upstate New York, they never cultivated reputations as cultural patrons in the art world, either as collectors or supporters of major arts institutions. For example, the Sambergs never featured on the ARTnews Top 200 Collectors list. (A representative from the Katonah Museum of Art did not respond to an ARTnews inquiry.)

The Sambergs’ lack of engagement in the art world and their previously unknown collection may speak to a view of their collecting as investment-minded, rather than driven by the reputational benefits that accrue from ties to museums and living artists. According to a recent survey of high-net-worth collectors published by Art Basel and UBS, only 10 percent of collectors identify as ‘investor’ types.

Meanwhile, as recent industry reports have detailed, the art market appears to have cooled considerably, with transactions at the top being more conservative. That economic environment has increased the necessity for auction houses and other top art trade players to pursue the business of valuable estates. Just last week, the New York Times reported that major auction houses have struggled with a “thinning availability of estates” to draw from, forcing them to dig deeper into private collections for one-off works, and often pricing those works lower to drive competition. Those consignments are typically the subject of tense negotiations. For example, one collector and museum trustee, who asked to remain anonymous, told ARTnews that Sotheby’s specialists had estimated a $6 million Philip Guston painting from 1952 that he’d consigned to an evening sale at a value lower than he believed it was ultimately worth.

Public financial documents filed in New York in 2015[HJ1] show that the Sambergs listed seven works from their private collection that were used as collateral for a loan from Bank of America. The document provides a window into their collection. Works held by the Sambergs at the time included Brancusi’s 1911 sculpture of a head, Sleeping Muse, and Roy Lichtenstein’s 1977 painting Interior with Woman. An edition of the Brancusi sold in 2017 at Christie’s for $57 million, while a 1977 Lichtenstein titled Landscape with Figures sold for $18 million in 2014.

Meanwhile, another work listed in the document, Edward Hopper’s 1945 painting Two Puritans, sold at Christie’s for $11.6 million about a year and half after Samberg’s death, in November 2021. It was partially owned by the auction house, according to a cataloging note published at the time of the sale. The house assumed ownership of the work years earlier, in 2015, when the Sambergs consigned it to a New York evening sale; it failed to sell when offered at an estimate of $20 million–$30 million.

An attorney who worked on the transactions declined an ARTnews request for comment owing to confidentiality. A representative for Hauser & Wirth declined to comment on the status of the estate.

The Paris-based designer has opened her 25th store in the U.S. and 65th one worldwide.

Thirty years after starting her namesake company, Anne Fontaine was understandably reflective before Thursday night’s launch party for her Madison Avenue store.

While guests mingled in the Gabriel Kowalski-designed space, the designer and her cofounder husband Ari Zlotkin detailed future plans and one life-changing experience that left an indelible imprint on Fontaine.

Like many fashion companies, sales were robust last year due to post-shutdown spending, but they have tempered a bit. Anne Fontaine expects this year’s volume to be close to last year’s tally of $60 million, Zlotkin said. Some of last year’s gains were due to opening a Monaco store, relocating stores in Florence and Zurich and a revival in sales in the company’s Paris flagship, he added, adding that the number of high-end travelers from Russia, China and the Middle East have declined in Europe, due to ongoing military and political conflicts, including the Israel-Hamas war.

While there is “a very strong base in America that is still spending,” Zlotkin said the base in Europe is “not that strong.“ However, online sales are doing well, “probably because many people are afraid to go out,” he said. The average in-store sale is about $800 or $850, whereas the average online sale is $600.

The 1,000-square-foot boutique at 723 Madison Avenue is the company’s 25th store in the U.S., and its 65th worldwide, with a Toronto store slated to open next year. The Upper East Side outpost is south of the brand’s former Madison Avenue location, which the couple said had become less trafficked due to pandemic-induced vacancies. When that lease expired and another one opened up near the Hermès store, they took advantage of the opportunity and immediately noticed an uptick in sales due to locals and tourists.

The designer’s signature white shirt continues to sell well, but there is also interest in gowns and other gala-worthy styles, she said. “People want to feel good, have some fun in life and go out wearing a nice silhouette,” Fontaine said. “I had a chance to live with an Indigenous tribe before I studied in France. The decoration of our bodies has been part of our culture for centuries,” she said, adding that tribe members change how they cut their hair and paint their bodies as a way to create a shared experience.

Building domestic sales online and in stores is a priority, since that accounts for 50 percent of the business. Along with a gala collection, the brand has diversified with handbags, shoes and other accessories.

Fontaine’s business model was centered around the white shirt, and was questioned by many, she said. Today, she’s noticed the wardrobe staple surfacing on many designer runways, and said Carolyn Bessette Kennedy is also generating interest in the trend.

“The white shirt is just back, back, back,” she said.

Born and raised in Rio de Janeiro, the designer moved to Paris as a 17-year-old to study biology and, three years later, met her husband through a mutual friend. They started a relationship and a month later, started working together.

Nature and fashion have been her two constant passions. Anne Fontaine was started in 1993 with a small shop in Paris that specialized solely in crisp white shirts that were manufactured in a factory that Slotkin’s family used. The initial plan was if-it-works-it-works, if not, that’s it, he said.

And it worked from the start.

Dressed in one of her own evening suits with a short skirt and seated on the second floor of her pristine boutique, Fontaine described her six-month stay with the Canela tribe in Amazonia. Although her mother had forbade her from taking a gap year to discover Brazil before going to school in France, she packed up a backpack, climbed out of her bedroom window to join a friend, and called her mother to apologize in advance for her Brazilian travel plans.

That experience is one of the reasons Fontaine created a foundation to help indigenous people in Brazil, who protect the Amazon, and to support reforestation in the country. She first visited a small structure where tribespeople trade goods to try to find a tribe that would allow her to live with them temporarily, and was surprised to see many people wearing soccer club shirts and drinking cachaça, she said. But an intermediary approached her about meeting his chief, who asked the then 17-year-old to come into their tribe.

“It was a long process. I need to write a book about that because it was a beautiful experience,” Fontaine said, adding that living with the tribe taught her the importance of respecting people that you work with. That has carried over to how she runs her business, and the focus on creating a long-lasting, quality product that will prevent any wasted materials, she said.

To that end, the designer said she aways drapes fabrics to avoid cutting and make them reusable. Next season, Fontaine wants to create a collection made entirely of reused materials.

The mother of three daughters said she has always wanted to return to the tribe and hopes to at some point, since she had “a baptism” into the tribe.

She claims the stay became dangerous when someone began to steal the tribe’s resources and said she was abducted at one point and taken from the tribe.

While being transported by helicopter, she said she told her alleged captors that her uncle, who was a high-powered judge in Brazil, knew of her whereabouts. “I said, ‘If you are going to have a young girl eaten by crocodiles, you are going to have trouble. He already knows everything that is happening in that tribe,’” Fontaine said. “Once they put me in jail, I called my uncle and he told me that they were going to let me leave, and then you will need to disappear.”

Once released, the designer said she snuck into the back of a lumber truck, traveling for days across the Amazon.

“After that, my mom said, ‘OK, now you have to do your studies and go to Paris,’” Fontaine said.

That change in direction led to her fashion career, but the designer said she is considering writing a book or possibly a film about her Brazilian adventure.

“Do you know anyone?” she asked.

The store will open in early 2024, Burberry has confirmed.

CHANNEL CROSSING: Burberry is making more moves in Paris, following the opening of its flagship last year on Rue Saint-Honoré, WWD has learned.

Early next year Burberry will open a store at 17 to 19 Avenue Montaigne, Valentino’s former home, and the hoardings are already up.

The Italian brand has since moved up the prestigious thoroughfare to number 35, the former location of the Canadian embassy in Paris.

Burberry, which publishes its interim results on Thursday, declined to reveal further details.

Last year Burberry opened a three-story Paris flagship catty-corner to the massive Dior and Chanel locations. It was an expression of the brand’s upscaling drive — and the first store on the continent to feature its new design concept.

The 8,500-square-foot flagship replaced a previous Burberry unit on the Rue du Faubourg Saint-Honoré, an extension of the same thoroughfare which has lost some momentum in recent years.

Burberry has been working its way around the world, opening or refurbishing stores with a new and more airy interior concept introduced in 2021 and recently updated by chief creative officer Daniel Lee.

In June the brand reopened its flagship on New Bond Street in London with a focus on the high-end customer and luxury interiors and services that could rival those of a five-star hotel.

The store, located on one of the world’s prime retail strips, had been under refurbishment for two years and reflects a more modern and minimal design concept, which Burberry unveiled in its Knightsbridge store in 2021.

The store concept has been evolving in order to accommodate a bigger focus on accessories and a fresh approach to color and branding by Lee, who made his debut for the brand in February.

The 22,000-square-foot space spans three floors, and is a showcase for British luxury.

The space is bright with wide open floor space and fixtures designed to make the clothing and accessories pop. The design is pared back, and the star of the show is the merchandise.

There are white walls with matching floors, which are interrupted now and again with shiny, Art Deco-style tiles arranged in a checkerboard pattern.

Flashes of color and texture appear across the space in the form of chubby chairs or swirling rugs covered in intense cobalt blue, Burberry’s new color. A soft bouclé sofa is made for lingering, while gold-tinged fixtures add another dash of Art Deco.

Sculptural wood furniture dotted around the space adds a midcentury modern touch.

The ground floor is dedicated to accessories, a primary focus for Burberry.

Lee’s imprint is also on the store’s façade, which was restored in smooth Portland stone, and which is adorned with new, cobalt blue Burberry knight flags.

- Downside risks to US fiscal strength have increased and may no longer be fully offset by the sovereign's unique credit strengths

- US fiscal deficits remain very large- Debt affordability to be significantly weakened, steadily and significantly, to very weak levels v other highly-rated sovereigns

- US long-term local and foreign currency country ceilings remain unchanged at AAA

- Absent policy action globally fiscal strength will decline

- Political polarization exacerbates fiscal risks that govt might not be able to reach consensus on fiscal plan to slow decline in debt affordability

- Affirmation of AAA ratings reflects Moody's view that the US formidable credit strengths continue to preserve the sovereign's credit profile

- Considers US to have significantlhigher capacity to carry a larger debt burden than other sovereigns globally

The Week’s 10 Biggest Funding Rounds: Metropolis Snags Big Round For Dealmaking, Electric Hydrogen Powers Up

1. Metropolis, $1.1B, computer vision: Parking startups aren’t usually high on this list, but when they add computer vision to their offering, well, that’s different. Los Angeles-based checkout-free parking startup Metropolis raised $1.7 billion in debt and equity led by Eldridge and 3L Capital. The startup company has raised $1.05 billion through a Series C offering and $650 million of debt financing. The deal was used to take logistics firm SP Plus private in a deal worth approximately $1.5 billion. The deal is the biggest M&A transaction of the year by a VC-backed company, per Crunchbase data. It even beats out Databricks’ purchase of San Francisco-based language models training startup MosaicML for $1.3 billion in June. Metropolis has developed a computer-vision system that enables drivers to park without using a credit card or even cash. Instead, drivers can use the app and enter information such as name and payment method. Metropolis then tracks the car and charges the owner. It can even email a receipt as they’re on their way out of the parking lot. Founded in 2017, the company has now raised $1.9 billion, per Crunchbase.

2. Electric Hydrogen, $380M, energy: Green hydrogen hasn’t always been a favorite among investors, but that may be changing. Earlier this year, Ohmium International raised a $250 million Series C led by TPG Rise Climate. This week, Electric Hydrogen became a unicorn, raising a $380 million Series C at a $1 billion valuation. The round included the likes of Microsoft’s Climate Innovation Fund and BP Ventures. Green hydrogen is produced through electrolyzer systems — which are used to split water through electrolysis to create hydrogen and powered by renewable energy. The process can be expensive because of the energy consumed and the equipment needed, but obviously investors are starting to warm to the sector and see a way to make money. Founded in 2021, Natick, Massachusetts-based Electric Hydrogen has raised more than $600 million, per Crunchbase.

3. Headway, $125M, health care: Even before the pandemic, mental health was becoming a primary concern for many people. In June, mental health startup Author Health locked up a $115 million round from General Atlantic and Flare Capital Partners. This week, New York-based Headway raised $125 million in a Series C at a $1 billion valuation, per Reuters. The round was led by Spark Capital. The startup’s platform helps connect patients with therapists who are covered under a user’s insurance. Founded in 2018, the company has now raised more than $225 million, per Crunchbase.

4. (tied) Iambic Therapeutics, $100M, biotech: If it seems like a biotech startup always makes it into the top five every week, that’s because one does. This week, Iambic Therapeutics closed a $100 million Series B financing co-led by Ascenta Capital and Abingworth. The San Diego-based biotech firm is developing new therapeutics from its generative AI discovery platform, which may explain why Nvidia also was an investor. Founded in 2019, the company has raised $153 million, per Crunchbase.

4. (tied) Prins AI, $100M, artificial intelligence: Investors love AI, you may have heard. One of the larger and more interesting AI rounds this week went to Lakewood, Colorado-based Prins AI, which raised a somewhat under-the-radar $100 million Series B led by AAB VC. The startup has developed a platform for creating AI digital identities — or “smart workers” — that can be used in lieu of humans for things such as marketing and training videos, or even broadcast media. The company has offices around the world, including China, and plans to use the fresh cash to enhance its R&D in deep-learning tech for digital identity products. The startup has now raised $132 million, per Crunchbase.

4. (tied) Stoke Space, $100M, space: For the second week in a row, spacetech saw a big round. Last week, Sierra Space raised a $290 million Series B. This week, Dallas-based reusable rocket developer Stoke Space raised a $100 million Series B led by Industrious Ventures. The company plans to use the new cash to develop its Nova rocket and new construction at its Cape Canaveral Space Force Station site in Florida. Founded in 2019, the company has raised more than $176 million, per Crunchbase.

7. Mach Industries, $79M, defense: Austin, Texas-based defense tech startup Mach Industries closed a $79 million Series A led by Bedrock Capital at a post-money valuation of $335 million, per TechCrunch. Founded in 2022, the company has raised nearly $85 million, according to Crunchbase.

8. iLink Digital, $75M, software: Redmond, Washington-based software developer iLink Digital raised a $75 million round from private equity firm True North. Founded in 2002, this is the company’s first significant outside investment, per Crunchbase.

9. Stampli, $61M, accounting: Mountain View, California-based Stampli, which makes AI-powered tools to help companies pay bills, raised a $61 million round led by funds managed by Blackstone. Founded in 2015, the company has raised nearly $146 million, according to Crunchbase.

10. Regent Craft, $60M, electric vehicle: Rhode Island-based Regent Craft, a manufacturer of all-electric seagliders, locked up a $60 million Series A co-led by 8090 Industries and Founders Fund. Founded in 2020, Regent has raised $90 million, per the company.

Anthropic led the way globally, but there were big rounds overseas.