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.”

WWD : SMCP to Detail Turnaround Plan This April

SMCP to Detail Turnaround Plan This April
The accessible luxury player is looking to reduce costs and boost growth after a tough year, it said as it reported its numbers for 2023.

PARIS – SMCP, the owner of contemporary labels Sandro, Maje and Claudie Pierlot, is in the final stages of defining a new plan to boost its growth and profitability.

The turnaround efforts, which will be revealed in detail in April when the accessible luxury player reports its first-quarter sales, involve actions to boost growth and increase market share in a weak economic context, rebalance the portfolio geographically, especially in China, to mitigate risk, and optimize costs and protect profits, chief executive officer Isabelle Guichot told journalists during a call prior to the publication of its fourth-quarter and full-year results for 2023.

“It’s a very broad action plan,” said Guichot. “We are looking at our brands, at our store network, at untapped opportunities, like reinforcing our position in men’s and accessories,” she said. “There is a lot to do.”

She continued, “We will reallocate CapEx [capital expenditures] to the most promising regions,” she said, citing the U.S. as one area where she sees white space for the company. There are also high hopes for its launch in India later this year.

A significant rationalization of the company’s store footprint in China is expected to be one area of focus — it could close as much as 15 percent of its network there.

The company expects to reap significant benefits from the new plan starting in 2025.

Commenting on the 2023 results, Guichot said, “It was a difficult year…Our results will be no surprise, given our last warning in January.”

SMCP reported a 78.2 percent drop in its net income for 2023, to 11.2 million euros, on the back of weak sales and increased costs.

The accessible luxury group has issued several warnings on its numbers in recent months, most recently in January, when it said sales for the year would come in below previous estimates.

While its 2023 gained 2.1 percent at reported rates, to 1.23 billion euros, the company said lower than anticipated revenues in China and the slowdown in Europe, especially France, dinted its numbers in the second half. On an organic basis, total sales were up 2.9 percent

Inflation — on both store rents and staffing costs, especially in Europe — was also a factor in the decline in net profit as well as on adjusted earnings before interest, taxes, depreciation and amortization, which dropped 11.3 percent to 236.4 million euros.

The company’s domestic sales for the year fell 0.1 percent year-on-year in reported terms, to 413.2 million euros, while revenues in the rest of Europe, the Middle East and Africa were up 3.1 percent. Sales in the Americas fell 6 percent, to 173.4 million euros, although Guichot said the company had been performing well Stateside. Sales for the year in Asia-Pacific were up 10.6 percent, to 255.2 million euros.

Brand-wise, Sandro, the company’s biggest label, performed well, with its sales up 3.3 percent to 601.4 million euros. In breaking the 600 million sales barrier, “It has become a significant player,” observed Guichot.

>>> US Notable earnings/guidance movers: DUOL +20.3%, OKTA +18%, AI +14.3% on up

Notable earnings/guidance movers: DUOL +20.3%, OKTA +18%, AI +14.3% on upside; WW -26.3%, SNOW -21.9%, SHLS -19.1%, DV -18.8%, CRM -4.8%, HPQ -4.1% on downside

  • Earnings/guidance gainers: DUOL +20.3%, OKTA +18%, AI +14.3%, RVNC +11.1%, AMRC +9.4%, IONQ +9.4%, PSTG +9.2%, SILK +8.8%, NTRA +8%, MGNI +7.9%, PETQ +6.7%, AAON +5.9%, NTNX +5%, CCCS +4.1%, SRPT +4%, TASK +2.9%, KNTK +2.7%, JRVR +2.4%

  • Earnings/guidance losers: WW -26.3%, SNOW -21.9%, SHLS -19.1%, DV -18.8%, FIGS -13.6%, SDGR -12.7%, AMC -8.1%, MQ -5.9%, CRM -4.8%, STEM -4.8%, IOVA -4.3%, HPQ -4.1%, NARI -3.9%, SBGI -3.8%, ALKT -3.5%, JAZZ -2.9%, ZUO -1.2%

>>> US Close Dow -0.06% S&P -0.17% Nasdaq -0.55% Russell -0.77%

Closing Stock Market Summary
The market continues to exhibit lackluster price action. Like recent sessions, the major indices made fairly modest moves today. The S&P 500 moved only 21 points between its intraday high and low, ultimately settling with a 0.2% decline.
The muted action is due to a catalyst-void in the market that has participants biding time until the next market-moving event. This may come in the form of earnings news from influential names this afternoon, or the closely-watched Personal Income and Spending report tomorrow at 8:30 ET, which features the Fed's preferred gauge on inflation (the core-PCE Price Index).

There's also a growing feeling among some participants that stocks are due for a pullback after a big run that has many names trading near all-time highs, which contributed to the lackluster action today.

Market breadth favored decliners at the close, but modestly so. Decliners led advancers by a 4-to-3 margin at the NYSE and by a 5-to-3 margin at the Nasdaq.

The movement in the S&P 500 sectors was also limited today, except for the real estate sector, which gained 1.2%, and the communication services sector, which fell 0.9%.

Semiconductor stocks were also an exception in today's lackluster session, underperforming the broader market. The PHLX Semiconductor Index (SOX) slipped 1.1%. NVIDIA (NVDA 776.6, -10.38, -1.3%) and Broadcom (AVGO 1289.42, -6.81, -0.5%) were among the influential laggards from the SOX, along with Applied Materials (AMAT 197.54, -8.32, -2.6%), which traded down after disclosing it received multiple subpoenas from government authorities requesting information relating to certain China customer shipments.

Treasury yields settled lower today, but that didn't translate into support for stocks due to the wait-and-see mentality in front of the Personal Income and Spending report. The 2-yr note yield fell four basis points to 4.67% and the 10-yr note yield fell four basis points to 4.27%.
  • S&P 500: +6.3% YTD
  • Nasdaq Composite: +6.2% YTD
  • Dow Jones Industrial Average: +3.3% YTD
  • S&P Midcap 400: +3.1% YTD
  • Russell 2000: +0.7% YTD

Reviewing today's economic data:
  • The weekly MBA Mortgage Applications Index sank 5.6% following last week's 10.6% drop
  • The second estimate for Q4 GDP showed a slight downward revision to 3.2% (consensus 3.2%) from the advance estimate of 3.3%, primarily due to a downward revision to private inventory investment. The GDP Deflator, meanwhile, was revised slightly higher to 1.6% (consensus 1.5%) from the advance estimate of 1.5%.
  • The key takeaway from the report is that there was an upward revision to personal spending growth (3.0% versus 2.8% in the advance estimate) that was driven by an upward revision to services spending (to 2.8% from 2.4%), underscoring the resilience of the U.S. consumer, who has been fortified by a solid labor market.
  • The weekly MBA Mortgage Applications Index sank 5.6% following last week's 10.6% drop
  • The trade deficit increased to $90.2 billion in the advance report for January from $88.5 billion in December.
  • Retail inventories rose 0.5% in the advance report for January following a revised 0.6% increase in December (from 0.8%).
  • Wholesale inventories declined 0.1% in the advance report for January following a 0.4% increase in December.

Thursday's economic calendar features:
  • 8:30 ET: Weekly Initial Claims (consensus 206,000; prior 201,000), Continuing Claims (prior 1.826 mln), January Personal Income (consensus 0.5%; prior 0.3%), Personal Spending (consensus 0.2%; prior 0.7%), PCE Prices (consensus 0.4%; prior 0.2%), and Core PCE Prices (consensus 0.4%; prior 0.2%)
  • 9:45 ET: February Chicago PMI (consensus 47.6; prior 46.0)
  • 10:00 ET: January Pending Home Sales (consensus 1.0%; prior 8.3%)
  • 10:30 ET: Weekly natural gas inventories (prior -60 bcf)

WSJ : Essence in Talks to Buy Refinery29 From Embattled Publisher Vice Media

Essence in Talks to Buy Refinery29 From Embattled Publisher Vice Media
Vice, which acquired the women’s lifestyle site in 2019 for $400 million, is retrenching under new ownership

Essence Magazine’s parent company is in talks to acquire Vice Media’s women’s lifestyle site Refinery29, a deal that could help the Black-owned media brand expand its digital profile and reach more young women.

The price being discussed couldn’t be learned but Essence would likely pay a fraction of the $400 million Vice paid when it bought Refinery29 in 2019, according to people familiar with the situation.

News of the discussions, which could still fall apart, comes just days after Vice’s largest shareholder, Fortress Investment Group, said it would stop publishing content on the company’s namesake site, Vice.com, and was laying off hundreds of staffers.

Refinery29, founded in 2005, was one of the early digital-media players to gain relevance among millennial women, with revenue generated through ads, events and licensing deals. Vice was drawn to Refinery29 as a way to complement its male-heavy audience and draw in new advertisers.

Refinery29 has struggled with the same challenges as other online publishers, including a volatile ad market and a decline in traffic sourced from Google and social-media sites. Refinery29 saw a decrease in revenue to $30 million last year from around $50 million in 2022, The Wall Street Journal previously reported.

Essence Ventures, which is owned by Richelieu Dennis and is the magazine’s parent, is among the companies marketers are targeting as they try to increase spending on Black-owned media. Adding Refinery29 to its stable would substantially increase the inventory Essence can sell to those advertisers.

Dennis is chairman and co-founder of the Group Black consortium, which aims to help advertisers more efficiently spend greater sums of money with Black-owned media. Group Black in recent years has expressed interest in acquiring various digital publishers, including Vice.

Vice Media was once valued at $5.7 billion and was among the most promising digital-media ventures, but has struggled to stay afloat. Fortress, which took over Vice in bankruptcy last year, is now focusing on its remaining assets, which include its production studio, TV network and ad agency Virtue.

FT : Stripe reaches $65bn valuation in deal to let employees cash out stock

Stripe reaches $65bn valuation in deal to let employees cash out stock
Payments company’s value is 30% higher than last year but is still well below its 2021 peak

Stripe will allow its employees to cash out about $1bn of stock at a valuation 30 per cent higher than last year, as the payments processing group continues to put off going public amid uncertainty in global markets.

Investors including Goldman Sachs’ growth equity fund and Sequoia Capital will acquire the employee shares as part of a tender offer announced on Wednesday. The sale is also being supported by a small amount of capital from Stripe’s own balance sheet.

The deal values Stripe at $65bn, which is higher than its $50bn valuation a year ago — but far below its peak value of $95bn in 2021.

Having soared in the boom times, the company is now regarded as an industry bellwether. The extent of its valuation decline since 2021 and likelihood that it will delay an initial public offering into next year has set a marker for other late-stage start-ups that will need to raise funds this year.

Stripe carried out one of the largest private stock sales in US history last year, accepting a big discount to secure new funds. It raised $6.5bn from investors including Peter Thiel’s Founders Fund, Josh Kushner’s Thrive Capital and Andreessen Horowitz, which allowed it to pay billions of dollars of tax liabilities associated with employees’ stock units.

The latest share sale means Stripe staff can access liquidity despite the company’s delay in pursuing an IPO that was first discussed years ago. Public listings for tech companies have been largely paused as valuations have whipsawed and interest rates have risen, pushing investors away from riskier investments.

A series of large private tech start-ups have arranged stock deals for their employees in the past few months, including ChatGPT-maker OpenAI, design software developer Canva and Elon Musk’s SpaceX.

“We’re pleased to once again offer employees an opportunity for liquidity,” said Stripe chief financial officer Steffan Tomlinson. “Our business continues to see strong momentum with the most advanced companies in the world.”

Stripe, which is based in San Francisco and Dublin, was Silicon Valley’s most feted start-up as it rode frothy private markets to secure investments from top venture funds. It has been expanding its core payments business from tech companies such as Shopify and Instacart to retailers that have increased their online sales during the pandemic, including Best Buy and Zara.

FT : St James’s Place shares fall 30% as it takes £426mn provision for client re

St James’s Place shares fall 30% as it takes £426mn provision for client refunds
UK wealth manager under fire from regulators over fee structure

Wealth manager St James’s Place has announced a £426mn provision for potential client refunds and slashed its dividend, sending shares in the group down almost a third in early trading on Wednesday.

The group said it had received a significant increase in the number of client complaints late last year about whether they had received a sufficient level of service, prompting St James’s Place to make the provision.

“We recognise that this is a disappointing outcome for everyone,” said chief executive Mark FitzPatrick, who was presenting his first set of results since taking the top job in December. The provision pushed the company to a pre-tax loss of £4.5mn last year, down from a pre-tax profit of £504mn in 2022.

FitzPatrick cautioned that the industry outlook remained “challenging”.

Shares in the wealth manager closed on Wednesday at 505.80p, down over 18 per cent.

The Financial Conduct Authority has repeatedly warned wealth managers to ensure consumers are receiving value for money when they pay for financial advice, and this month it said it may crack down on high charges.

The warnings are part of the watchdog’s consumer duty regulations, introduced last year, which require companies to meet higher standards of customer protection. Under the new rules, firms must act in good faith towards customers, avoid causing foreseeable harm, and enable and support customers to pursue their financial objectives.

St James’s Place said it anticipated it would take between two and three years to settle the issue, and had engaged “extensively” with the FCA on the matter.

The FCA said on Wednesday that it had “significant engagement” with SJP ahead of the announcement, and it would continue to engage with the company as it develops and implements its approach to the redress. It also warned consumers not to engage with claims management companies and to be alert to the possibility of scams.

The £426mn provision was based on a “statistically credible representative cohort” of clients, the company said. However it did not know how many clients in total were affected. SJP said that over the course of 2023, the company “switched off” ongoing advice charges for 2 per cent of clients, totalling nearly 20,000.

“The further back in time we go, our ability to evidence the interaction that the client and the adviser had is less available,” said FitzPatrick. 


The company said the introduction of a new IT system from Salesforce in 2021 meant that it was now able to monitor the service provided to clients, and that it expected the claims to be a “historic issue”.

But analysts at Numis said on Wednesday that it was “disappointing to see another piecemeal warning/major adverse development to the investment story . . . rather than seeing these issues dealt with comprehensively on one occasion”.

Based in Gloucestershire, SJP became a powerhouse over three decades as its more than 4,000 financial advisers offered clients everything from wealth management to retirement planning.

However, over the past year the group has found itself in the crosshairs of the Financial Conduct Authority over a fee structure long regarded as opaque and expensive.

SJP charges an upfront advice fee for clients when they sign up, and then an ongoing advice fee annually for the relationship with their adviser, which is 0.5 per cent of assets for most clients.

Following pressure from regulators, SJP in October announced an overhaul of its fees, including scrapping penalties for customers pulling their money within a certain period.

The company said on Wednesday that the new charging structure would hit its ability to increase profits, and “reduces our ability to invest for long-term growth in our business over the next few years”.

It has cut payouts to shareholders as a result, reducing its final dividend from 37.19p a share to 8p a share. The total payout for the year was 23.83p, less than half the level of 2022.