WWD : LVMH’s Chris de Lapuente on ‘Delighting’ Shoppers

LVMH’s Chris de Lapuente on ‘Delighting’ Shoppers
"Stores are going to have to work harder and harder to excite the customers," said the chairman and CEO of the selective retailing division of the French luxury giant.

Today’s consumers have become so demanding, premium and luxury retailers must surprise and “delight them more than anyone else.”

So says Chris de Lapuente, chairman and chief executive officer of the selective retailing division of LVMH Moët Hennessy Louis Vuitton, which clocked gains of 26 percent last year and in the most recent quarter.

Generating around 15 billion euros in revenues annually, it’s the second-largest division at the French luxury group after fashion and leather goods, comprising Sephora, which has grown fivefold over the last dozen years; travel retail specialist DFS; cruise-ship retailer Starboard; website 24S; grocery retailer La Grande Épicerie de Paris, and department stores Samaritaine Paris and Le Bon Marché.

“We are expecting a fourth quarter of double-digit growth as well,” de Lapuente predicted.

But all retailers have to work harder than ever to keep consumers coming back.

“You come to the store not just to buy your product, but you come to experience, you come to discover things that you might have not expected, the elements of surprise, the wow, the stories, the relationship,” he told the WWD Apparel & Retail CEO Summit in New York City on Oct. 24. “We believe the role of stores is changing. Boring retail may be dead, but exciting retail is alive and kicking.

“Stores are going to have to work harder and harder to excite the customers and make the effort to delight them,” he said.

De Lapuente made a compelling case for “retail entertainment,” roaming the stage and flashing slides showing how Le Bon Marché in Paris is sparking curiosity with storewide displays, like a recent invasion of strange pink figures by iconoclastic French artist Philippe Katerine.

The Left Bank department store is now in the habit of clearing away the beauty stands in its vast nave to make way for immersive evening theater performances, for which customers pay 75 euros. The executive noted that 17,000 people attended a dramatic interpretation of Émile Zola’s “Au Bonheur des Dames” earlier this year, and a fall spectacle, “Cirque le Roux,” has already sold more than 10,000 tickets in less than two months.

“This delights our customers and they feel they’re living a special experience,” he said.

Likewise, some 4,200 beauty enthusiasts recently paid between $120 and $370 to attend a New York engagement for Sephoria, the beauty festival hosted by Sephora that debuted in Los Angeles in 2018. De Lapuente noted some 90,000 people joined the Manhattan event via the internet, suggesting customers appreciate such “insider” opportunities.

“The dream and ambition would be to do this in most of the major cities,” he said of the fairs, which have also been staged in Paris and Shanghai recently. “It will be the place where you go to discover what is hot, exciting and trendy in the world of prestige beauty.”

De Lapuente also touted the art of curation and the need to take brand partnerships to the highest levels. Of about 2,200 brands carried at Le Bon Marché, roughly one-third are exclusive, including fashion line Sézane and jewelry-maker Maria Tash.

Dior’s takeover of Harrods in London last holiday, with a gingerbread-palooza encompassing the entire store, was “truly remarkable,” exemplifying “fantastic storytelling,” he argued.

Meanwhile, aboard cruise ships destined for Alaska, Starboard teams created a bespoke store of exclusive, unique products that travelers could purchase as authentic souvenirs.

The executive also trumpeted the need for retailers to build communities, noting that Sephora boasts 60 million regular customers, and that Le Bon Marché employs a dozen personal shoppers. “I would like to have 100,” he said. “This has to be a major area of focus.”

In a similar vein, he noted the department store boasts 50 stations where various products can be personalized — a number he would like to double.

Finally, he stressed the need to put “people and culture” at the heart of the business.

Echoing other speakers at the WWD event, de Lapuente cited the growing challenge of staff retention in retail, especially after the pandemic, which prompted widespread questioning about the “work-life balance” and popularized remote working on — simply not possible in retail, when evenings and weekend shifts are the norm.

“We need to focus on better retention, better career development,” he said. “Post-COVID-19, the challenges are even greater than before.…We are gradually introducing more flexible work arrangements.”

On the diversity front, de Lapuente said his division has made major strides. When he arrived, about 70 percent of the top 100 executives at Sephora were men. “Ten years later, we flipped it,” he said, flashing a slide of Artemis Patrick, the first female leader of Sephora North America in 25 years.

He noted Patrick is on track to be the first female CEO of the prestige beauty retailer’s North American arm when current president and CEO Jean-André Rougeot retires next year.

“Across the whole of selective retailing, about 65 percent of our top leaders are female,” he said, noting “it’s not something that’s happened in five minutes: It’s taken us 10 years to get there.”

“We need to be braver, and more courageous managing the careers of young people,” he added.

Sephora is also seeking more diverse suppliers, identifying promising beauty entrepreneurs of color under its Accelerate program.

“You can keep on waiting and waiting for another Rihanna to come along. Alternatively, you can go out and look for young, promising founders, and you work with them in the kitchen coaching, helping them develop,” he said.

During a question-and-answer session, de Lapuente trumpeted the Sephora at Kohl’s initiative, initiated in 2021 with the opening of 200 shops-in-shop and expanded since. He cited “zero cannibalization” and “all incremental” business.

“There are others who have tried to follow our example, and it often doesn’t feel like prestige,” he opined. “We do $1 billion at Kohl’s and we think we can double it.”

WSJ : Italy’s Rumbling Supervolcano Has Half a Million Residents on Edge

Italy’s Rumbling Supervolcano Has Half a Million Residents on Edge
Campi Flegrei, not far from ill-fated Pompeii, has had 2,500 earthquakes since August

POZZUOLI, Italy—Diners at restaurants around this tiny port streamed outside while moored boats and an eight-story crane began to sway. Some cats milled about, unfazed by the umpteenth tremor to hit this picturesque seaside town.

“You feel that? It’s nonstop earthquakes here,” said Luca Averna, a part-time fisherman, as he paused from working on his small boat during the 3.6-magnitude tremor. “We’re used to it, but that doesn’t mean we aren’t afraid.”

Pozzuoli, about 8 miles west of Naples, has had more than 2,500 earthquake tremors in the past three months. So far, few have been large, but residents are on edge: They live on top of a supervolcano, a classification given to about 20 of the world’s largest volcanoes. The constant earthquakes are a sign of volcanic activity deep underground.

Vesuvius, southeast of Naples, which destroyed Pompeii in the first century A.D., is the region’s most famous volcano. But modern volcanologists are far more worried about the cluster of low-lying craters around Pozzuoli known as Campi Flegrei. The 80-square-mile depression is home to more than a dozen conical volcanoes, several crater lakes—and half a million residents. Another 800,000 people live just outside the depression.

In Campi Flegrei, like in Yellowstone and the world’s other supervolcanoes, the probability of a catastrophic eruption is low but not nil, said Alessandro Iannace, a geology professor at the University of Naples Federico II who wrote a popular geology book.

“The difference is that in Yellowstone, if you think the eruption is coming, you can send the tourists home and close the park for four years,” said Iannace. “You can’t do that with Campi Flegrei. There are just too many people there.”

Residents here get frequent reminders that they live on top of a slumbering giant. Hydrogen sulfide, with its distinctive smell similar to rotten eggs, often drifts into town from one of the craters, displacing the salty sea breeze.

“If you want to live in Pozzuoli, you have to learn to cohabit with the volcano,” said Roberto Marotta, who manages a clothing shop in Pozzuoli. “You’re always thinking about it, even when you sleep. If my wife moves in bed I jump up thinking it’s a quake.”

The frequent earthquakes are part of a phenomenon called bradyseism, the gradual rising or falling of a part of the earth’s surface caused by activity inside a volcano.

The area around Pozzuoli’s port has risen about 11.5 feet since the late 1960s, including more than 3 feet since 2014, according to Italy’s National Institute for Geophysics and Volcanology.

On a recent Sunday, authorities in Pozzuoli handed out pamphlets titled “I’m Not Risking It,” containing information on how to evacuate if an eruption appears imminent, and how to act in the aftermath of an eruption. Tips include thoroughly washing food that has come in contact with volcanic ash and not driving on ash-covered roads.

The authorities’ evacuation plans include identifying routes out of Campi Flegrei. Locals say the roads, which are often clogged with traffic on normal days, are too small to handle the crush of a full-scale evacuation.

“Everybody here knows the evacuation plan is inadequate,” said Claudio Correale, who heads a local cultural association that keeps an archive of photos and news clippings of past periods of volcanic activity. “But it’s probably not even necessary, because everybody will have left by the time the volcano erupts.”

An eruption in Campi Flegrei isn’t imminent, but earthquakes have weakened the volcano, making a rupture in the crust more likely, according to a recent study by researchers at Italy’s national institute and University College London.

Pozzuoli endured intense earthquake activity in the early 1970s and again a decade later when authorities issued an obligatory evacuation order for part of the town. When local realtor Antonio Guitto was a boy, he remembers, he slept in the family car some nights with his parents and two siblings after nocturnal quakes.

The recent spate of quakes has put Pozzuoli’s housing market into a deep freeze, with nervous buyers canceling deals at the last minute, said Guitto.

“The quakes spooked everybody,” he said. “The nighttime quakes are the worst because you can’t get back to sleep.”

Pozzuoli’s population of 77,000 has grown steadily in recent decades. Even the forced evacuation in the 1980s didn’t stop people moving to the area.

Campi Flegrei’s last big eruption was in 1538, when the fiery outburst swallowed an entire village and left behind a new volcanic cone that rises 440 feet above sea level. That volcano, called Monte Nuovo, meaning “new mountain,” is now a nature reserve. A trail winds through dense trees to the edge of the crater, where visitors can peer inside or enjoy a view of the bay of Pozzuoli. A school, restaurants, cafes and shops line the streets at Monte Nuovo’s base.

At the nearby Solfatara crater, a smell similar to rotten eggs blends with the scent of fig trees. The crater contains the decaying remains of a soccer field, a swimming pool and other facilities. It used to be a popular campground, but the authorities closed it in 2017 after a boy and his parents fell into a sinkhole and died from inhaling toxic gases.

Houses and apartment buildings line the road leading up to the Solfatara crater. Soccer fields have been carved into the slope 50 yards away from where vents constantly emit steam and volcanic vapors.

At Pozzuoli’s shore, years of frequent earthquakes have raised the seabed so that only the smallest boats can now enter the historic port.

“Kids used to dive into the water here,” said Averna, the fisherman, gesturing at a patch of dirt and weeds. “You can’t help wondering where we’re headed.”

FT : Lloyds rebuffs Barclay family’s latest £1bn attempt to regain Telegraph

Lloyds rebuffs Barclay family’s latest £1bn attempt to regain Telegraph
The family turned to Abu Dhabi to back its latest offer to regain control of the newspaper

Lloyds Banking Group has rebuffed the latest £1bn attempt by the Barclay family to reclaim the Telegraph, attempting to reassure unsettled bidders in an auction for the British newspaper group.

Bidders for the centre-right broadsheet have been concerned by repeated offers by the Barclay family to take back control of The Telegraph and The Spectator by paying down much of the £1.1bn debt owed to Lloyds.

The bank, which placed the Telegraph into receivership in June, rejected a £1bn offer initially made by the family and backed by Middle Eastern investors as recently as three weeks ago, according to two people familiar with the situation.

Lloyds told the Barclays to either repay the £1.1bn with a transparently funded offer, or bid in an ongoing auction, those people said. The bank has contacted bidders to reassure them of progress in the auction, which aims to be completed by early next year, they added.

Analysts do not expect the sale price for the Telegraph to exceed £600mn based on market comparisons. 

The move by Lloyds comes as a court hearing last week in the British Virgin Islands postponed the appointment of liquidators for a holding company that sits above the newspaper group and the debt. The court heard that the Barclay family had made a £1bn offer backed by a member of the Emirati royal family.

The court said that the family had an extra month to resolve the ownership of the newspaper with the bank before a judgment would decide the fate of the holding company.

Lloyds considers that there has not been sufficient proof of funds so far from the family, despite a letter to the bank suggesting that the offer was backed by the First Abu Dhabi Bank, according to the two people familiar with the bid. There are also concerns over whether a bid backed by Abu Dhabi would need to be scrutinised for approval by the secretary of state through a Public Interest Intervention Notice (PIIN).

A person close to the family said that the letter from the Abu Dhabi bank over funding should be sufficient to show that the offer was real.

The Barclay family will still try to negotiate a deal to buy back the debt before the end of the month, according to people familiar with their position. 

A spokesperson for the family said that the proposals concern “the settlement of outstanding loans . . . there is no precedent and no basis for a PIIN being issued in relation to a debt transaction, and we are highly confident [this] would not trigger any regulatory reviews regarding the ownership of the media assets”. 

Lloyds declined to comment.

The auction is proceeding as planned, with first-round bids expected over the next few weeks, and a conclusion of the process scheduled for the first quarter of 2024, according to people familiar with the situation. As well as any additional scrutiny triggered by a PIIN, any deal will probably attract investigations by the regulator, Ofcom, and the Competition and Markets Authority. 

Analysts at Enders say most bidders would be subject to public interest scrutiny, and in particular if using Middle Eastern cash. Lord Rothermere’s DMGT is in talks over a minority investment from investors in Qatar to boost its firepower in the auction for the Telegraph, while other bidders are also sounding out funders from Saudi Arabia and other parts of the region.

Nadhim Zahawi confirmed in a Times Radio interview on Wednesday that he has tried to help the Barclay family as a “friend”, including introducing them to potential investors from the UAE “and other parts of the world”. Zahawi, the Conservative MP and former minister, denied acting as a broker in any deal, and insisted this was a matter for the family and Lloyds. He added that it would be “an honour” to be appointed chairman of the newspaper group.

Other bidders for the newspaper include a consortium fronted by Sir William Lewis and UK-listed National World. Rupert Murdoch’s News UK has also registered interest, but it is expected to focus on attempting to acquire The Spectator magazine, according to those close to the process.

Bidders were this week asked to sign non-disclosure agreements before accessing the data room to examine the financial position of the newspapers.

Paul Marshall, the Brexit-supporting hedge fund founder who has agreed funding from US financier Ken Griffin, also wants to grow the newspaper in the US, where his management team sees a gap in the market for a mainstream centre-right audience.

Some bidders have also attempted to approach Lloyds about a potential deal involving the debt behind the paper, including Marshall, but have been told that the bank only wanted to sell through the auction. Any deal over the debt would also need the dissolution of the British Virgin Islands holding company.

FT : Brookfield-led ‘final’ bid for Australian energy giant rebuffed by largest

FT : Brookfield-led ‘final’ bid for Australian energy giant rebuffed by largest shareholder
$12.5bn takeover of Origin Energy in balance ahead of vote this month on deal

A “best and final” offer from a Brookfield-led consortium to take over Australia’s largest energy provider has been immediately rebuffed by the target’s biggest shareholder, putting the A$19.4bn ($12.5bn) deal in the balance.

The future of Origin Energy, which has 4.2mn retail customers and a stake in a large offshore gas project, will now be determined on November 23, when shareholders will vote on the new offer. It was pitched at a 70 per cent premium to the share price of the company a year ago when the bid was first made.

The 8 per cent increase in the bid came after AustralianSuper, the country’s largest pension fund and biggest Origin shareholder, with a 13.67 per cent stake, said this week it would vote against what was on the table. The fund then said on Thursday the new offer was still “substantially below” its view of the energy company’s long-term intrinsic value.

Origin shares fell more than 6 per cent to A$8.49 on Thursday as investors bet that the deal would fail.

The takeover is an acid test for the country’s energy transition. Canadian asset manager Brookfield, which teamed up with US firm EIG to buy Origin with a view to splitting it up, has maintained the takeover means it would invest between A$20bn and A$30bn over the next decade in Australia’s move away from fossil fuels.

Brookfield argues that private capital is needed for the country to rapidly reduce its reliance on coal-fired power plants for electricity if it is to meet its net zero targets. They include a commitment to source 80 per cent of electricity from renewable sources by 2030.

The takeover has already received regulatory approval and has been championed by Mark Carney, the former Bank of England governor, who is co-head of Brookfield’s Global Transition Fund. 

The rising value of Origin shares over the past year, partly driven by the growth of UK supplier Octopus Energy, in which it holds a 20 per cent stake, has put pressure on Brookfield and EIG, which intends to take the gas assets, to raise their offer.

They have now added A$1.2bn in cash to the bid, which they describe as a “best and final” offer. It is pitched at A$9.53 a share — above an independent valuation of Origin’s assets and potential conducted this year.

Origin’s board has recommended acceptance, with the deal giving the company an enterprise value of A$19.4bn, which includes $2.9bn of net debt.

Simon Mawhinney, chief investment officer at Allan Gray Australia, which owns a 3.5 per cent stake in Origin, said his fund would vote in favour. “I think the consortium has made a reasonable offer here. It strikes the right balance between risks and opportunities for the company,” he told the Financial Times.

Brookfield and EIG need 75 per cent of shareholders to back its bid as the takeover has been structured as a scheme of arrangement. However, the consortium inserted a new clause into the improved offer that would allow it to make an off-market takeover bid for Origin within three months of an acquisition of a 5 per cent stake in the company.

Such a move would lower the threshold of acceptance for a deal to 50.1 per cent.

>>> US After Hours Summary: Busy earnings night; ROKU +15.9%, FARO +11%, FSLY +1

After Hours Summary: Busy earnings night; ROKU +15.9%, FARO +11%, FSLY +10.5%, ELF +8.4%, DASH +7.6%, PYPL +3.6% higher on earnings; CFLT -34.7%, RELY -22.4%, SEDG -22%, ABNB -2.9% lower on earnings

After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: ROKU +15.9%, FARO +11%, CDNA +10.9% (raises revenue outlook; also CEO steps down), CWH +10.8%, FSLY +10.5%, FROG +9.6%, LMND +9%, CLX +8.6%, ELF +8.4%, MIR +8.3%, DASH +7.6%, RPD +7.6%, RSI +7.5%, SEMR +7.4%, ATRC +7.1%, MTW +6.6%, HLF +6.3%, PTVE +6.3%, PBPB +6.2%, SCI +6.1%, EA +5%, INFA +4.5% (also authorizes new $200 mln share repurchase program), NVRO +4.5%, MOD +4.4%, CAR +4.3% (also names new chairman; names new CFO), ALL +4.1% (also pursuing sale of Health and Benefits businesses), ERII +4.1%, PK +4.1% (also declares special dividend of $0.77/sh), EGHT +3.9%, PYPL +3.6% (also names new CFO), QCOM +3.4%, QDEL +3.3%, SMCI +3.2%, NOG +3.1%, SITM +3.1% (also names new CFO; also acquires Clock Products), TS +3.1% (also authorizes new $1.2 bln share repurchase program), IIPR +3%, MSTR +2.7%, ALKT +2.3%, CHRW +2.3%, CHRD +2.2%, BFAM +2.1%, HST +2.1%, HCC +2%, JOBY +2%, MLNK +2%, SIMO +2%, RYN +1.9% (also CEO to retire; CFO named as new CEO; also names new CFO; also announces capital structure realignment plan, including $1 bln of asset sales), SRPT +1.9%, CWAN +1.8%, SP +1.7%, ZETA +1.6%, APA +1.6%, CRC +1.5%, BWXT +1.4%, QRVO +1.3%, AFL +1.2% (also COO to retire; also raises dividend), MUSA +1.2%, MDLZ +1%, MELI +0.9%, SDGR +0.8%, ATUS +0.7%, RGLD +0.3%, PRU +0.2%, AWK +0.1%, BKH +0.1%, IR +0.1%, KAR +0.1%, NSA +0.1%, PGRE +0.1%, RLJ +0.1%, WTS +0.1%

Companies trading higher in after hours in reaction to news: JAKK +27.5% (announces deal with Authentic Brands, also reports earnings), ATRA +5.6% (files $400 mln mixed shelf securities offering), CVAC +5% (announces solid progress in vaccine development programs in COVID-19 and seasonal flu), PHAT +4.1% (FDA approves Voquezna for erosive GERD and heartburn), ACR +3% (CFO retires, names new CFO), MYRG +1.5% (authorizes new $75 mln share repurchase program), MODG +1.1% (purchases certain assets from Invited), AGL +0.4% (sells MDX Hawaii unit to private buyer), SXI +0.3% (to acquire Sanyu Switch), DK +0.3% (increases dividend), JPM +0.2% (responds to govt inquiries re processes to inventory trading venues), DIS +0.1% (DIS to acquire remaining 33% stake in Hulu, held by CMCSA), CMCSA +0.1% (DIS to acquire remaining 33% stake in Hulu, held by CMCSA), COST +0.1% (reports Oct comps), RYI +0.1% (acquires TSA Processing), BOC +0.1% (acquires SunRiver Fiber Network)

After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: CFLT -34.7%, RELY -22.4%, SEDG -22%, TNDM -17.1%, CCRN -16.3%, PCOR -13.5%, STAA -11.1%, ANSS -10.3%, TENB -9.5%, NUS -8.9%, ASH -8.9%, LNC -8.8%, QNST -8.5%, NVST -8.5%, AMWL -7.6%, RVLV -6.7%, RUN -6.7%, VAC -5.6%, ALB -5.1%, EXEL -4.9%, ETSY -4.5%, HPP -4.3%, CTSH -4.2%, NARI -3.9% (also to acquire LimFlow), TWI -3.9%, LMAT -3.8%, AFG -3.7% (also declares $1.50/sh special dividend), BMRN -3.7% (also CEO to retire; names new CEO), EXAS -3.6%, RGR -3.6%, MKSI -3.5%, RRX -3.1%, ABNB -2.9%, WSC -2.5%, NTR -2.4%, MCK -2.3%, CLB -2.2%, ZG -2.2%, CPE -2.1%, NFG -2.1%, SBGI -2%, NGVT -1.6% (also announces further repositioning of its Performance Chemicals business), CF -1.5%, RNR -1.5%, RRGB -1.5%, DXC -1.4%, CAKE -1.3%, PRCT -1.3%, AVT -1%, BXP -0.9%, MET -0.6%, CWST -0.5% (also names new CFO), AROC -0.2%, AIG -0.1%, ET -0.1%, GFL -0.1%, GKOS -0.1%, SRI -0.1%, WES -0.1%

Companies trading lower in after hours in reaction to news: NRIX -1.1% (FDA places partial clinical hold on Phase 1 NX-2127-001 study), KHC -0.8% (files $24 bln mixed shelf securities offering), ABCL -0.5% (ABCL and PRLD announce multi-program partnership), F -0.2% (buying Auto Motive Power to bolster EV plans, according to TechCrunch), CNI -0.1% (acquires stake in Cape Breton and Central Nova Scotia Railway)

Wired : How Telegram Became a Terrifying Weapon in the Israel-Hamas War

How Telegram Became a Terrifying Weapon in the Israel-Hamas War
Hamas posted gruesome images and videos that were designed to go viral. Sources argue that Telegram’s lax moderation ensured they were seen around the world.

At around 8 am local time the morning of October 7, Haaretz’s cyber and disinformation reporter, Omer Benjakob, was woken by his wife at their home in the historic port city of Jaffa. Something was happening in southern Israel, she said, but Benjakob shrugged it off, presuming “another round of the same sh/t.” Flare-ups between the Israel Defense Forces (IDF) and militants in southern Israel are not uncommon. “No, no,” Benjakob’s wife insisted. “It’s more serious.”

There was nothing yet on television or state media except unverified reports of casualties. The authorities were silent. In response to requests from Haaretz, the IDF said the situation was “under review.” On social media, a different story was unfolding. There were clips of dead IDF soldiers. Paragliders descending on a rave in the Negev desert, 3 miles from the $1.1 billion militarized Gaza-Israel Barrier. Militants commandeering IDF military vehicles. “You’re seeing videos of kidnapping. Hamas guys going over the border, and then like shoot-’em-up-style videos going in kibbutz houses,” Benjakob says, still sounding stunned. Like many other Israelis that morning, he couldn’t believe what he was seeing.

Telegram was already familiar to many Israelis, who, among other things, often procure cannabis through the app. Sustained government pressure on the country’s press had also driven people in search of alternative news sources, Benjakob says. Previous escalations of violence tended to coincide with an uptick of activity on Telegram. Now the Hamas attacks brought a surge of users. “Hundreds of thousands are signing up for Telegram from Israel and the Palestinian Territories,” Pavel Durov, Telegram’s Russian founder, posted on his public channel on October 8, adding that the company was bringing support for Hebrew and Arabic to the app. “Everyone affected should have reliable access to news and private communication in these dire times,” Durov said.

Maria Rashed, a longtime resident of Tel Aviv who recently moved to London, had flown home to Nazareth for her sister’s engagement party the night before the October 7 attacks. “It was overwhelming to wake up facing war,” she tells WIRED. A Palestinian who grew up in a Christian family, Rashed is now an independent journalist. The morning of October 7, she scoured mainstream platforms, especially Instagram. But in the absence of official information, she wanted to see for herself how Hamas fighters had entered Israel. “The only way for me to do that was to go on Telegram, enter the channel related to Hamas’ press team,” she says. “And there you could see unfiltered videos of the attack.”

During the course of the day, Telegram, which has 800 million users worldwide, became the main source of videos and information spreading to other social media platforms, including X, Instagram, and TikTok, where content was being reposted with little to no verification.

In one open source intelligence war-watching group on Telegram, Benjakob saw videos of IDF forces being humbled—basic quad drones dropping grenades on Israel’s state-of-the-art Mark IV Merkava tanks, followed by footage of soldiers fleeing their vehicles and being captured by Hamas fighters. But Benjakob couldn’t be sure if the videos were real. “All the [official] Israeli groups are silent. The official government groups are silent,” he says. “Fncking crazy.”

Five hours after the attacks started, Israeli prime minister Benjamin Netanyahu declared that his country was at war. With little to no official information, many desperate Israelis were not just watching violent videos released by Hamas; they were also getting caught up in a mess of conspiracy theories. In some groups, the attacks were already being blamed on the IDF for having betrayed Netanyahu. Other conspiracy theory groups on Telegram and X claimed it was all a false-flag operation by the Israeli prime minister. “One of the biggest fronts Israel failed on, and one of the biggest things that helped create panic in Israeli society, was mis- and disinformation during the first 72 hours of this thing,” Benjakob says.

While videos and images of victims were soon going viral on major social networks, the most extreme content can all be traced back to Telegram. Benjakob describes Hamas’ real-time broadcasting of its attack on Israel as “psychological warfare.”

“As [Hamas] entered Israel, there was a digital onslaught launched as well,” says Benjakob. It was “insane” to see militants jumping the border fence, old women being taken away, people being murdered in their beds. “It’s honestly beyond anything the Israeli psyche has experienced, at least in my lifetime.”

The weaponization of Telegram played a key role in this psychological attack, sources argue. The platform’s lack of robust content moderation, alongside its sprawling honeycomb of public channels and groups, enabled content to rapidly reach millions of people.

Although Apple and Google, which host Telegram in their app stores, have now begun asking the company to ban Hamas’ main channels, Telegram has otherwise declined to block channels disseminating extreme content. In a post on his public channel on October 13, Durov alluded to the difficulty of policing speech in a conflict, and cited a Hamas warning before a strike on the Israeli city of Ashkelon as a reason not to act: “Would shutting down their channel help save lives—or would it endanger more lives?”

As with Russia's invasion of Ukraine, Telegram, which is headquartered in Dubai, has once again found itself at the center of a complex geopolitical and humanitarian crisis. How this happened—not once, but twice—reveals the outsize power of one of the world's most tight-lipped technology companies. More than a dozen interviews with sources on the ground, analysts, and former Telegram employees reveal the power of the platform to quickly spread unfiltered content ahead of traditional media, as well as the true extent of Hamas’ weaponization of the app—and what seems to be an ideological aversion to interfere at the upper echelons of Telegram.

The Weaponization of Telegram
Hamas accounts have been banned from most social media platforms for years. But, when it launched its attack on Israel on October 7, Hamas had a huge presence on Telegram. The platform’s potential to rapidly disseminate easily downloadable and sharable content made it a crucial weapon. Hamas’ Telegram channels grew rapidly in the first five days of the conflict. Qassam Brigades, the channel dedicated to the organization’s military wing, tripled in size from 205,000 to nearly 620,000 subscribers, alongside a tenfold increase in the number of views per post, according to analysis by the Atlantic Council’s Digital Forensic Research Lab (DFRLab). In the year prior to the attacks, the channel had only grown by 20,000 followers. Before the takedown requests from Google and Apple, the Qassam Brigades channel was nearing 800,000 subscribers. It is currently down to roughly 670,000 subscribers.

DFRLab analyst Layla Mashkoor followed the October 7 attacks in real-time on Telegram. One of the most-viewed videos she saw featured professionally filmed and edited footage of armed paragliders landing on sandy terrain and storming buildings. It isn’t clear from when or where the video was filmed. Other footage, seemingly recorded on body cameras and phones, shows fighters crossing the Gaza-Israel Barrier and exchanging fire. There are also scenes of Hamas fighters dragging bloodied IDF soldiers from burning tanks. Cameras pan over slain Israeli soldiers in the aftermath of an attack. This video, and others like it, have received more than 700,000 views apiece on Telegram.

“On the actual day of the attack, Hamas was very prepared to spread their message,” says Mashkoor. “We saw highly produced content and there was a more sophisticated media strategy than we've previously seen from them. They definitely had content ready to go, and then their ability to post and upload in real time as the attack was unfolding also shows there was a degree of media strategy,” she adds.

Mashkoor argues that the vacuum left by Israeli authorities let Hamas take control of the narrative in those first few hours. The delay in any official response from Israel meant that Hamas could effectively shape the conversation. By the evening of October 7, the IDF, which had been concentrating on X, began posting more regularly on Telegram. By then Mashkoor was already observing a “very clear pipeline” of images and videos from Telegram to X.

Mashkoor watched as content first uploaded to the Qassam Brigades Telegram channel was reshared by supporters and news outlets, before proliferating all over Telegram and spreading to other social platforms. This pipeline meant that facts were distorted and events were exaggerated or misinterpreted. “A lot of the content is also obviously in Arabic, which adds to some of the confusion when people might be using machine translation while trying to share real-time updates,” says Mashkoor.

Other channels became popular, too. Gaza Now, which the DFRLab describes as “Hamas aligned,” doubled its 350,000 subscribers in the first 24 hours of the crisis, while the average number of views in the first five days increased tenfold. The channel currently has more than 1.9 million subscribers and consistently reposts Hamas content.

Hamas’ own channels still played the commanding role. Analysts at SITE Intelligence Group, a consultancy which monitors the Qassam Brigades channel, claim that Hamas’ Telegram strategy totally changed on October 7. Whereas before it was somewhat dated, now it was specifically designed for “2023 virality,” SITE says. Livestreams were accompanied by a deluge of short, branded clips that could easily be shared. “I couldn’t believe what Hamas was posting,” says Rita Katz, SITE’s executive director and founder. She believes the group’s strategy was partly inspired by the Islamic State’s playbook.

Katz alleges that Hamas’ social media activity has been effective in cultivating rare support across disparate radical Islamist groups around the world, whether Sunni or Shia. “It’s the first time anything like this has happened,” she claims.

Without Telegram, this would have been impossible, argues Katz. “What you can do on Telegram, you can’t do anywhere else. It allows for quick uploads and sharing, to utilize automated bots, to stay anonymous. No other platform comes close.” Katz points to what she claims is an alleged inconsistency in Telegram’s actions given Durov’s stated refusal to move against Hamas’ channels despite the platform removing other groups.

Telegram used to be the app of choice for Islamic State (IS) and other jihadist groups. When asked about this in an interview in 2015, Durov replied that IS would simply find another app if kicked off his. “I don’t think we should feel guilty about this,” he said. “I still think we’re doing the right thing—protecting our users’ privacy.” Shortly afterward, the Islamic State carried out a series of attacks in Paris, killing 130 people, earning Telegram widespread criticism. Telegram subsequently banned 78 IS channels, created a bot to track and eliminate new IS channels, and cooperated with Europol.

This didn’t stop Durov from indulging in a spot of sh...tposting when, in 2017, he shared a photo of himself on Twitter with the caption “My new passport photo is strangely suitable for media articles about terrorists using Telegram 🤔”, and followed a few days later by changing his profile picture on VK, the Russian social network he ran from 2006 to 2014, to a photoshopped amalgam of his face and the body of an armed IS suicide bomber. That image is still the background image for what appears to be Durov’s YouTube channel.

Only yesterday, October 30, Durov posted a meme of the same image to his Russian-language Telegram channel with the words “Persecuting people on the basis of nationality or religion is unacceptable,” in reaction to Telegram’s blocking of a channel linked to the mob that surrounded a plane arriving in Russia’s mostly Muslim region of Dagestan from Israel. “Channels calling for violence (as in the screenshot above) will be blocked for violating the rules of Telegram, Google, Apple and the entire civilized world,” Durov wrote. While human rights defenders will welcome this rare intervention from Durov and Telegram, the choice to use his IS militant meme may raise eyebrows.

Ruslan Trad, a researcher at the Atlantic Council's DFRLab, argues that IS has had a major influence on how other militant Islamist groups use social media. “IS has shown how to reach a wider audience and how to process content in such a way that it evokes both fear and admiration, and also reaches users who have not been relevant before.” But, he adds, Hamas, unlike IS, maintains international contacts, and many governments don’t regard it as a terrorist group, particularly in Asia and Latin America. “Hamas is also an enemy of the Islamic State,” Trad says.

Even so, Hamas’ ability to widely share images and videos of its attacks have the potential to inspire further violence, Katz argues. “Unless Telegram immediately takes action,” she says, “this is going to escalate and be a much bigger problem. Because this will lead to more violence around the world.” And for that, Katz claims, Telegram will be in no small part responsible.

Inside Telegram
In a bid to understand how Telegram is handling its role in the crisis, WIRED contacted three senior employees: founder and CEO Pavel Durov, vice president Ilya Perekopsky, and head of communications, Mike Ravdonikas. None responded. Neither did Telegram’s press spokesperson. All anyone outside Telegram has to go on is Durov’s public channel, where he has posted twice about the crisis: first on October 8, when he announced large numbers of new signups in Israel and the occupied Palestinian territories by people in search of “reliable access to news,” then on October 13, when he claimed that Telegram’s moderators and unspecified “AI tools” were removing “millions of obviously harmful content.”

But, he went on, “tackling war-related coverage is seldom obvious,” highlighting Hamas’ warning to civilians prior to air strikes. “It’s always tempting to act on emotional impulses. But such complex situations require thorough consideration that should also take into account the differences between social platforms.” Durov argued that Telegram users only received the content they have specifically subscribed to—unlike other apps that “algorithmically promote shocking content to unsuspecting people.” As such, he concluded, it was “unlikely” that Telegram channels could be used to “significantly amplify propaganda.”

WIRED spoke to four ex-Telegram employees to try and understand what’s going on inside the company. A former developer agreed with Durov about algorithmic amplification, arguing that “if there are no algorithms to recommend content, then the platform has no responsibility for what the users post because they themselves choose to expose themselves to that content.” The former employee also suggested why Durov may be treading a careful line: “Let’s not forget that Telegram is headquartered in a mostly neutral Arab country that is friends with its less neutral neighbors.” A location tag on an Instagram post dated October 19 shows Durov was recently in Saudi Arabia, as was Perekopsky, according to a photo of Riyadh he posted to Telegram Stories.

When asked how staff would feel about the extreme content on the platform and Telegram’s role in the current crisis, the developer responded: “I don't care about this organizational boringness. I write code. That's what I do. I don't moderate content and I don't solve human problems, I only solve technical ones.”

Elies Campo, who directed Telegram’s growth, business, and partnerships from 2015 to 2021, argues that Durov has chosen to “maximize” amplification of content on his platform. Public channels, for example, can have an unlimited number of subscribers while private groups can reach 200,000 people, far more than WhatsApp’s 1,024-member limit.

Telegram also has built-in tools for spreading content to other platforms: “Being able to upload any type of file of up to 2 GB enables Telegram to become a bridge for content between social networks and other platforms, and we've seen this in recent events,” Campo says. “These features are fantastic in a healthy society with no bad actors, but in today's world, any good product with such a large audience will have a complete representation of the good and the bad in humanity.”

Axel Neff, who helped cofound Telegram and worked at VK, the Russian social network Durov used to run, believes that Durov sees Telegram as an almost neutral, public utility: “He very much views it as a tool of the people.” Neff claims his old boss accepts there will always be both good users and bad users—but that Durov believes good people will prevail against bad people. “They use Telegram to communicate safely, and reliably. And in situations like the [current conflict in the] Middle East, they ideally warn each other of danger which might hopefully save some lives,” Neff says.

Ultimately, Telegram’s employees are “stretched very thin and not positioned to handle situations like this,” Neff says. (As of February 2023, there were only 60 employees.) “The almost nonexistent trust and safety team in no way can keep up with the daily global chaos they are now faced with at the scale they’ve become,” Neff adds.

Unlike other platforms, Telegram does not appear to have a codified process for dealing with crises like this, instead tending to make changes under intense legal or media pressure. Anton Rozenberg—who worked with Durov from the early days of VK in 2007, before, he says, becoming director of special areas, which involved anti-spam work, at Telegram from 2016 to 2017—is clear about who makes the decisions at Telegram. “Moderation rules, especially in high-profile cases, are set by Pavel himself,” Rozenberg claims.

Based on prior examples, Durov appears to have an aversion to interfering or taking sides in political and international crises, based more on pragmatism than principle. “First of all, he’s worried about the size of the audience. And if he started blocking channels or content with pro-Palestine and/or pro-Israel positions, he would be blamed by huge parts of Telegram's audience in a lot of countries, that he supported another side of the conflict,” Rozenberg claims. “So, it’s just business.”

Finding a Balance
As Meta’s Mark Zuckerberg might attest, the leader of a major social media platform is often damned if they do, damned if they don’t. Many people who are distrustful of official narratives in the Israel-Hamas crisis are depending on Telegram for unfiltered information. It’s also a free space compared to other major platforms. Maria Rashed says that many believe Instagram has been censoring and shadow-banning pro-Palestinian accounts, some of which had resorted to burying the #IStandWithIsrael hashtag in posts to get seen. Meta, which owns Instagram, said it had fixed a number of bugs that may have been causing such issues.

Nadim Nashif, a Palestinian digital rights activist, wasn’t just thinking about Hamas when he read Durov’s October 13 post about not blocking channels. “That means that Telegram is also not going to shut Israeli channels inciting [violence],” Nashif tells me via video call from his home in the northern Israeli city of Haifa. Nashif and 7amleh, the civil rights organization he leads, have been documenting cases of Palestinians being threatened by Israeli channels and groups on Telegram since the conflict began. Doxing is rife, and attacks, arrests, and threats against their jobs are increasing. Nashif has also seen Israeli channels mocking murdered Palestinians. “Horrible videos you don’t want to see,” Nashif says, grimacing. “People abusing the [dead] bodies, making jokes …”

Back in May 2021, when there was an outbreak of violence in Israel and the Palestinian territories, Nashif recalls that activists were able to persuade some social media platforms to remove racist comments and hate speech, especially against Palestinians living in Israel. “But the feeling now is that [Telegram is] not closing anything,” Nashif says. He’s conferred with other digital activist colleagues from organizations like Access Now, who have been escalating cases with contacts at Telegram. “But nobody’s answering,” he says.

“I think that the owner and leadership of the company are very aware that this is bringing to them millions of people and subscribers,” Nashif alleges. “I think it's part of the business model.” The leaders of companies like Telegram are not stupid, Nashif adds: “They have reached this decision that maybe it's better to have a controversial platform where more people keep joining and engaging with what's happening there.”

It remains to be seen whether Hamas’ channels will stay up on Telegram. On Android, people now see a message telling them that two of the main Hamas-run channels, including Qassam Brigades, cannot be displayed on “Telegram apps downloaded from the Google Play Store.” Hamas-run channels are also now blocked on iOS. Such blocks can be circumvented, however. Telegram instructs Android users who want “fewer restrictions'' to download the app directly from its website. People wanting to get around restrictions and view blocked Hamas channels can also purchase anonymous Telegram numbers at auction using a Telegram-approved cryptocurrency called Toncoin; download the messenger via Telegram’s website and then log in via anonymous numbers.

In the European Union, regulators have warned social media platforms against content that contravenes its Digital Services Act. A spokesman for the European Commission told WIRED that they are in contact with Telegram, without offering details. After a recent meeting of the European Union Internet Forum and pressure from Germany, Hamas’ Telegram channels are now blocked in a number of EU member states.

Even if Hamas is definitively removed from Telegram, it will find other ways to share its message. The group is trialing a rudimentary app for keeping people updated on the latest news and announcements from the Qassam Brigades—another example of its expanded technical capabilities. “Hamas seems to be preparing for their communications to be disrupted in the event that Telegram does remove the group,” says Mashkoor.

Whatever happens, as Telegram continues to develop into the de facto platform for witnessing war in real-time, unfiltered and unmoderated, it is changing the way the world experiences violent conflict.

As October 7 ended, Maria Rashed cried herself to sleep. “Because you’re receiving so much information at once and you don’t know what to feel,” she says. “I’m seeing my Israeli friends struggling and they’re losing people that they love. But I’m a Palestinian at the same time.” She fears how Israel will respond and the repercussions for friends in the West Bank and Gaza.

Benjakob, who viewed scores of violent videos released by Hamas on Telegram on October 7, spent the rest of the morning trying to ground himself in his local community. Accompanied by his wife, he went to their favorite café in Jaffa: “The Palestinians from Jaffa who are my neighbors made a massive effort to talk to us,” he says. “We ended up sitting for three hours with Palestinian people we’d never spoken to before.” It was a very Tel Aviv–Yafo type of statement, he says, one that declared: “We refuse to be enemies.”

WWD : Biomaterial Behind Balenciaga Coat Raises $3.3 Million, Fashion Lags in Su

Biomaterial Behind Balenciaga Coat Raises $3.3 Million, Fashion Lags in Sustainable Supply Chains: Short Takes
Gozen's nanocellulose leather alternative to scale up production, while a BCG report says time is running out for fashion brands to invest in lower carbon materials.


LUNA MISSION: Gozen, the biomaterial company behind Balenciaga’s maxi bathrobe coat, has raised $3.3 million in seed funding.

The company created Lunaform, which made its fashion debut on the spring 2024 runway.

Hong Kong-based Happiness Capital lead the round, joined by Accelr8, Astor Management and climate tech focused fund SOSV.

“We produce advanced biomaterials with the potential to unlock circular design. With this investment, we’ve shown that we have a path to delivering on that potential at scale,” said founder and chief executive officer Ece Gozen, who founded the company in 2020.

The funding will go toward accelerating research and development, and scaling production of Lunaform, as well as other materials, and the company is planning to open a production facility in Turkey that will have a capacity of 1 million square feet.

Lunaform distinguishes itself from plant-based leathers as the material is formed by nanocellulose microorganisms during a fermentation process, meaning it’s entirely vegan and plastic free.

The production process takes just 10 days and bypasses the need for tanning.

“There is a lot of competition now in animal-free leather. But I believed that Gozen’s approach could surpass all others in both performance and economics, and we’ve already demonstrated this by launching our first commercial product — at [Paris] Fashion Week no less. We’ve accomplished in months what it’s taken others years to do,” said SOSV general partner and IndieBio managing director Po Bronson.

Lunaform is available in 13-square-foot sheets and a minimum thickness of 0.2 mm, and can be customized in thickness and texture, eliminating the need for layering in other materials, like polyurethane. Gozen said the material is stronger than traditional animal leather and the single sheets also have applications in home furnishings and the automotive industry.

REALITY BITES: Demand for “preferred” raw materials — those that have reduced climate impacts versus a conventional standard textile — could exceed supply by as much as 133 million tons by 2030, putting the fashion industry increasingly under pressure as businesses try to hit announced sustainability goals.

That’s according to a new report titled, “Sustainable Raw Materials Will Drive Profitability for Fashion and Apparel Brands,” by Boston Consulting Group, in collaboration with Textile Exchange and Quantis.

BCG looked at 36 brands and companies that represent more than 10 percent of the industry’s revenues, and notes that 85 percent have publicly declared decarbonization targets for their supply chains by 2030, but are unprepared to hit those targets as the time clock ticks down.

The report projects that just 19 percent of materials produced in 2030 will be “preferred,” given the current lack of scale and that companies and brands are not investing enough to ensure growers to expand their supply.

“Fashion and apparel brands need to take immediate action to invest in the supply of preferred raw materials, thereby securing resources and transforming their business models for a sustainable future,” said Philipp Meister, global lead for fashion and sporting goods at Quantis. “This will require brands to rethink product portfolios, strengthen supplier relationships and build company-wide engagement — all of which could take years.”

Brands that are able to invest and stabilize their sustainable supply chains will be well-placed to capture profit benefits.

The report also noted that there are roughly 35 new pieces of legislation set to go into effect around the world, and particularly in the E.U., that cover everything from product design through the life cycle and recovery of post-consumer waste.

All of these upcoming rules will require overhauls of operations, data flows and information systems, but again, the report finds that many brands will “struggle to adapt.” As an example, BCG looked at the U.K.’s Modern Slavery Act from 2015 and found that only 15 percent of luxury brands are currently compliant.

“Failure to comply poses a real threat to a brand’s bottom line,” the report stated.

“In the face of the climate crisis, the policy landscape and investor and consumer scrutiny, fashion and apparel brands cannot afford to underinvest in their raw-materials strategies any longer,” added Beth Jensen, director of Climate+ Impact at Textile Exchange. “Brands must act boldly now to invest in the supply chain relationships that will enable achievement of their climate goals by 2030 — a key milestone year that is rapidly approaching.”