TheChek News Flow

When your Rolex is due for servicing, you’ll probably take the time to take it to a specialty service center. Likewise, you’re not going to trust the repair of the crimson soles of your Louboutins to the corner shoe-shiner. So why, then, should you be forced to use any plebeian charging network for your premium EV?

Mercedes-Benz is hoping that its well-heeled clientele will want to give their luxury EVs the same sort of premium treatment. At CES 2023 in Las Vegas last week, Mercedes announced the creation of a bespoke charging network for its growing line of EVs — all-electric offerings that will make up the company’s entire portfolio by 2030.

The $1 billion initial investment, split with Mn8 Energy, will create an initial 400-plus charging sites across North America, with an eventual 2,000 sites globally offering 10,000 total chargers.

By way of context, that’s one quarter the size of Tesla’s current Supercharger network, a charging offering that has taken a decade to build.

TechCrunch spoke with Magnus Östberg, chief software officer, and Markus Schäfer, chief technology officer, for more details on why Mercedes is jumping into EV charging and it how it will execute its plan.

Schäfer said the final cost to build the network will total a “couple billion dollars” based on the scope of the initial investment (“you can do the math,” he said).

“We think it’s absolutely worthwhile,” he said during an interview at CES 2023. “If you’re an EV driver, you know what kind of experience you have, especially in the holidays and traveling with an EV. And that’s not Mercedes-like.”

Though the initial investment is steep, Schäfer said it’s just another big spend the company is prepared to make to own the EV space.

“We talk about tens of billions in cost of transforming the company,” he said. “It was not our first priority to deal with the raw material supply chain or with cell-making, or with charging in the first place.”

But, these are things Mercedes has had to do, partnering with Rock Tech Lithium and others for supply of raw materials, and committing to build eight battery manufacturing plants globally.

Mercedes is now turning its attention to a charging network because nobody else has created a network they’re happy with.

“We thought really some other entities would take care [of it] and you know, energy companies running gas stations today would take care [of it]. It didn’t happen. It didn’t happen,” Schäfer lamented.

Of course, plunking down the billions in capital needed to build an EV charging network is just one piece — albeit an important one — to successfully complete such an ambitious project. Where these chargers are located and how they are maintained are the other critical components to the EV charging network pie.

Both Chief Software Officer Östberg and CTO Schäfer said that dealers will have input here, but that customer density and usage patterns will be the most significant factors in selecting locations.

“We know their preferences in traveling,” Schäfer said, “and that’s exactly going to be the basis for selecting the perfect site.”

Reading between the lines, that means this will not be a network designed to fill gaps in existing charging networks. It’ll instead be a premium choice offered in population-dense areas, places surely already well-serviced by Electrify America, Tesla’s Supercharger network and others.

Östberg said each spot will be selected to create a “luxury Mercedes experience,” ensuring none are installed at a “scary location.”

Proximity to good food will be a priority, while each location will have plenty of light and surveillance systems. Mercedes said it will invest to ensure each location is up to snuff, buying or leasing land as needed.

Chargers will be high-speed, 350 kW to start but upgradeable even beyond that, and Mercedes-Benz is taking steps to ensure up-time, the bane of many an EV road trip.

ChargePoint will provide the physical chargers and the back-end to monitor them. Schäfer said Mercedes and partner Mn8 will ensure spare parts are readily available nearby, along with on-call technicians to install them, but that it’ll be up to ChargePoint to keep the software side operational. That’s a reason for concern. When chargers break, it’s usually the software at fault. A 2022 survey of 657 Bay Area chargers found that 22.7% were non-functional due to various system failures like non-responsive touchscreens. Only 0.9% of the chargers had an obvious hardware fault like a broken connector.

The final luxury aspect here will be availability. While these chargers will be open for use by any EV, Mercedes-Benz owners will have the extra privilege of a charger reservation system. Today’s MBUX navigation already suggests charging stops along the way and preconditions the battery when approaching one. When selecting a Mercedes-owned charger, the car will take the additional step of saving them a spot.

“If you’re in a traffic jam and, you know, you can’t make it to this time, the system will know that you’re arriving later, and it’s going to update your reservation,” Schäfer said. This, of course, will only happen if you’re using the integrated Mercedes navigation experience, not Apple or Google Maps. “The idea is also the key to keep them in our ecosystem,” Schäfer said.

The $1 billion spent up-front to launch this network will just be the beginning of the investment, but Schäfer is adamant that it will eventually be a profitable endeavor: “It has to be a self-sustaining business. Absolutely.”

Schäfer said the enterprise will eventually be profitable and cites Ionity as an example of what can go right.

“The valuation of this network has grown so much,” he said. “So it was a great investment… We think we can do the same here.”

The French designer brand has bounced back from the pandemic strongly, with 2022 sales approaching €300 million. Now, the company is laying plans for its next stage of growth, debuting a new logo to signal bigger ambitions.

• Isabel Marant is targeting €500 million in sales in the next for years, in part by expanding its menswear, leather goods and accessories offerings.
• The brand hit turbulence early in the pandemic but had a strong rebound in 2022, thanks to diverse product offerings and geographies.
• Marant sees a balance between expanding its own store network and a well-curated wholesale channel as key to growth.

For Isabel Marant, the new year brings with it a new look.

On Monday, the French label will unveil a new brand identity, complete with a refreshed logo and updated packaging design conceived by New York-based British art director Peter Miles, who in the past has worked with brands from Marc Jacobs and Celine to Proenza Schouler.

The changes to the logo typeface are relatively subtle — as Marant puts it, it’s “not an earthquake,” but rather an evolution to signal the next chapter of the label she started in 1994.

“It was to explain the new era we are stepping into,” she told BoF in an interview.

There are bigger changes happening behind the scenes. With just shy of €300 million ($323 million) in annual sales last year, Marant, majority owned by the Paris-based private equity firm Montefiore since 2016, is no longer the sometimes-hard-to-find label beloved by fashion insiders for capturing nonchalant Parisienne style.

The brand has a path to hitting €500 million in sales within four years, said chief executive Anouck Duranteau-Loeper, who joined the company from Paco Rabanne in 2016 after leading the leather-goods business at Céline and working on strategy at LVMH. In recent years, Marant has opened dozens of stores, and on the product side, it has launched menswear and expanded its accessories offering, adding eyewear, jewellery and leather bags to the lineup.

Marant has had successes, most recently its £695 Oskan Moon bag, which has emerged as a popular new hero style since its debut in December. But it stumbled early in the pandemic, and, as a small brand in a market dominated by a few giants, struggled to navigate the turbulence that came with the onset of Covid-19. Montefiore tried to sell the brand a year ago. (Now, the firm says it’s flexible about an exit).

Marant and the brand’s chief executive Anouck Duranteau-Loeper say the brand has reached a new level of maturity in the past five years, after it brought on Paris-based private equity firm Montefiore as a majority investor in a bid to accelerate growth in 2016.

Now, it wants to signal to its customers and the industry that the label is ready to play at a higher level. The new products, the new stores, and yes, the new logo, are all part of that grand plan.

“With all the changes that we made, it makes sense to also change the logo,” said artistic director Kim Bekker, a longtime collaborator of Marant’s who rejoined the business in 2021 after leaving for a brief stint at Saint Laurent. “It really establishes all the growth that the company has been through the last two years.”

Realising the next stage of growth won’t be easy, however. The brand’s recent run of success has come during a near-unprecedented boom in luxury spending. It will need to execute its next phase as the industry enters into a period of uncertainty. Isabel Marant is positioned at the affordable end of the luxury segment and remains relatively small, with sales a sliver of the billions generated by luxury’s biggest players. This makes it more vulnerable if an economic downturn causes middle-class consumers to pull back on spending.

Yet the business performed better than expected in 2022, both in terms of sales numbers and earnings growth, said Guillaume Leglise, vice president and senior analyst at credit rating and research firm Moody’s Investor Service. In January of last year, Moody’s upgraded the brand’s credit rating to B2, with a stable outlook. That is still below investment grade, but indicates Marant’s financial prospects are brighter than they were two or three years ago.

“The brand positioning is well oriented, it is resonating very well with customers despite all the current challenges,” Leglise said. “The numbers demonstrate the brand is very successful.”

Growing the Brand

Isabel Marant carved out a niche for herself with fashionable yet wearable designs that embodied a French-girl cool aesthetic. In the 2000s and early 2010s, the brand’s elevated take on jersey sweats, wedge sneakers and bohemian-meets-rock chick dresses gained wide traction among consumers, spurring pacey growth for the independent label. Many retailers stocked the brand’s mainline and its contemporary-priced sister brand Isabel Marant Etoile. A 2013 high-low collaboration with H&M was a blockbuster hit.

“There has always been a consistent vision for the brand that is reflective of Isabel’s personal style,” said Rickie de Sole, women’s fashion and editorial director at Nordstrom. “The collections often exude a joyous and optimistic embrace of life, our customers can easily see themselves in it.”

For years, Marant was content flying somewhat under the radar (in the early days, part of the brand’s appeal with insiders was that outside of its home market, it wasn’t that easy to find). But soon the space Marant occupied became more crowded. Fast fashion players mimicked the French girl aesthetic, lower-priced French contemporary names like Sandro and Zadig and Voltaire expanded outside their home market, and direct-to-consumer labels like Sezane and Rouje emerged onto the scene.

In 2016, Marant sold a 51 percent stake in her company to Montefiore, receiving a cash injection as well as a strategic partner with the expertise to help the business scale.

Even then, it wasn’t easy sailing. The Covid-19 pandemic briefly stymied growth plans, with sales falling 13 percent in 2020. Last year, Montefiore explored an exit from the company after five years. However, despite having “strong interest from different parties,” it shelved plans amid an uncertain market following the outbreak of war in Ukraine, Montefiore president Eric Bismuth said. (The firm is “very flexible regarding timing” for a future exit, Bismuth said.) But the brand bounced back more quickly than expected.

“It is impressive, because it’s not a high end luxury brand so it doesn’t have this irrational sentiment to buying it,” said Celia Friedman, managing director of the luxury division at strategy consulting firm Publicis Sapient. “But it is a strong brand in terms of consumer love. It’s a brand of aficionados, so it’s a brand that can create that very strong [loyalty] without being a pure luxury player.”

A Playbook for Growth

Part of Isabel Marant’s success lies in the fact that the brand is well diversified for a brand of its size, both in terms of product and geography, said Friedman. A well-balanced distribution strategy has also helped, she added. The brand has grown from nine stores in 2016 to 73 today, even as it has continued to leverage wholesale. Combined, the two channels provide decent global exposure while remaining “still very curated,” according to Duranteau-Loeper.

On the product side, adding leather goods to its offering and building out other accessories has helped fuel growth, with the category now driving 30 percent of sales. Marant and her team have repositioned the Etoile line to complement rather than cannibalise mainline sales.

Initially, Etoile was a proposition in and of itself, offering buyers a route into the brand at a lower price point, explained Marant. Now, it’s presented as a more casual offering geared toward holiday and weekend dressing.

“There’s a difference in price tag, because there’s a difference in the nature of the product,” said Duranteau-Loeper. “You would buy your denim from Etoile and you would buy your fancy, sparkling dress or leather from Isabel Marant.”

Going forward, the focus will be on nurturing its menswear, which has been renamed Marant as part of the rebrand. The plan is to expand its menswear store footprint by opening locations in key cities globally, adding to the two standalone stores currently in Paris. The ambition is to grow menswear to drive 10 to 15 percent of sales, up from about 5 percent currently, said Duranteau-Loeper.

The Future of French Girl Cool?

Internal forecasts indicate the brand is on track to hit the €500 million mark within the next four years. Competition for consumer attention will only intensify should a recession hit. While luxury shoppers are more insulated from economic turbulence, they still tend to become more discerning during times of economic uncertainty, tending to gravitate to higher-end, big-name brands, which can be viewed as a better investment.

Meanwhile, Isabel Marant remains a niche brand in a fragmented industry, said Moody’s Leglise. For brands driven by ready-to-wear that’s rooted in a very specific aesthetic, staying relevant becomes more difficult.

“For this kind of brand … you really need to have the right collection at the right time, to have the right product to keep the brand appeal,” he said. “If you start to miss [the mark on] a collection, things can quickly go wrong.”

Yet Marant’s signature style of French je ne sais quoi still has strong appeal. The global appetite for French luxury shows no signs of slowing down, said Publicis Sapient’s Friedman, while Marant’s DNA is more rooted in culture and female empowerment, rather than a specific look, giving the brand codes more longevity.

“‘French-girl cool’ is more about style and energy than a specific look,” said Nordstrom’s De Sole. “The trends are always evolving, but the desire to feel confident and carefree with a halo of polish will always be relevant.”

The beauty giant participated in the $4 million funding round via its venture capital fund BOLD.

In a fashionable vote of confidence for the metaverse and Web3, L’Oréal’s venture capital fund BOLD and the British Fashion Council are among participants in a $4 million funding round for French metaverse developer Digital Village.

The Venture Reality Fund, Venrex and others also invested in Digital Village, billed as a “technology platform” devoted to emerging virtual worlds.

“The company revolutionizes commerce and community engagement by equipping brands and creators with the tools to build captivating, immersive virtual experiences in the metaverse,” according to an announcement shared first with WWD. “The funding will be used to enhance the platform’s capabilities, adding new tools to power 3D world development, advanced avatar customization and virtual store creation to enable brands and creators to deliver unparalleled, immersive virtual experiences.”

According to Evelyn Mora, founder and chief executive officer of Digital Village, technology is enabling “the next evolution of retail.”

Instead of ho-hum solo shopping on a brand’s website, Digital Village wants consumers to “visit a 3D virtual world and come together for social experiences where brands can engage…in a more meaningful way.”

In her view, virtual fashion, art and culture represent a “massive opportunity in what will be the largest disruption for commerce since the emergence of e-commerce platforms.”

L’Oréal seems to agree as it explores what beauty means in the Web3 world.

“We seek to work with the most promising start-ups who adhere to the highest possible visual and technical standards,” said Camille Kroely, chief metaverse and Web3 officer at L’Oréal. “We are excited to be partnering with Digital Village, whose solutions will be powerful enablers for our brands and whose ideals of sustainability, accessibility and interoperability in the metaverse or Web3 are ones we share.”

Last year, L’Oréal partnered with cross-game avatar platform Ready Player Me to bring an array of gaming-inspired hair and makeup looks to the metaverse under the Maybelline New York and L’Oréal Professionnel brands.

But this marks the beauty giant’s first venture capital investment in the metaverse and Web3 space.

Established in 2018, the Business Opportunities for L’Oréal Development fund, or BOLD, has invested in a range of disruptive start-ups including French biotech firm Microphyt, Sparty Inc., a Japanese firm focused on personalized beauty, and temporary tattoo-maker Prinker Korea Inc.

Marco DeMiroz, cofounder and general partner at the Venture Reality Fund, noted that it is expensive and time-consuming to develop and manage virtual worlds, avatars and digital assets.

“There is no simple end-to-end solution for virtual experiences as brands and creators have come to expect from e-commerce and website builder platforms,” said DeMiroz, while noting that Digital Village’s model “solves this by providing robust, aesthetically advanced templates so that anyone can create accessible and interoperable immersive experiences.”

Mora is a tech entrepreneur and the sustainability guru behind Helsinki Fashion Week. She is now focused on the emerging alternative online world where avatars can own or rent land, test out sustainable construction methods, visit digital stores and museums, trade digital fashions and artworks and even mount ad campaigns.

Digital Village has already created virtual worlds for the likes of United Nations and WWD, which last year conscripted the firm to create a gallery, storefronts and meeting spaces for various conferences and events.

President’s aides found small number of records in Wilmington residence garage

WASHINGTON—President Biden’s aides found an additional small number of classified records after searching his residences in Wilmington and Rehoboth Beach, Del., Richard Sauber, Mr. Biden’s lawyer, said in a statement Thursday.

“All but one of these documents were found in storage space in the President’s Wilmington residence garage,” Mr. Sauber said. “One document consisting of one page was discovered among stored materials in an adjacent room. No documents were found in the Rehoboth Beach residence.”

The discovery of the additional batch, which The Wall Street Journal and others reported on Wednesday but hadn’t been confirmed by the White House, came after documents with classified markings were located at the Penn Biden Center for Diplomacy and Global Engagement, the president’s Washington-based think tank, on Nov. 2.

The search was done in coordination with the Justice Department and the lawyers completed the review Wednesday, Mr. Sauber said.

Aides searched locations where Mr. Biden’s documents from his tenure as vice president might have been shipped during the transition in 2017, Mr. Sauber said, adding that the White House would continue to cooperate with the review under way by the Justice Department.

Asked about the discovery of the latest batch of documents on Thursday, Mr. Biden said the documents had been in a locked garage with his Corvette sports car. “It’s not like they’re sitting out in the streets,” he said.

After reading language similar to his lawyer’s statement from the podium, the president said, “We’re going to see all this unfold,” adding, “I’m confident.”

The discovery of another set of classified documents is likely to intensify the political pressure on the president as the Justice Department determines how to handle the classified documents seized in August from the Mar-a-Lago residence of former President Donald Trump, who has joined fellow Republicans in accusing Mr. Biden of hypocrisy on the issue.

White House press secretary Karine Jean-Pierre said Wednesday that Mr. Biden’s lawyers did “the right thing” by immediately turning over the documents found in November to the National Archives.

Mr. Biden on Tuesday said during a press conference in Mexico he was briefed about the incident and was “surprised to learn that there were any government records that were taken there to that office.” The president said he doesn’t know and hasn’t asked what the documents contain.

Following a CBS News report, the White House on Monday confirmed that Mr. Biden’s personal attorneys discovered the classified materials at the center more than two months earlier, on Nov. 2, and turned them over to the National Archives the following day.

How quickly we can invest and build is the only real constraint on renewables

It seems like an odd thing to say in the middle of an energy crisis, but we may be on the cusp of a new era of abundant energy. Not because of nuclear fusion, exciting though recent breakthroughs are, but because of renewable energy.

Over the past week, renewable energy has met more than half of the UK’s demand for electricity, breaking records for wind power in the process. Gas, the dirty and expensive part of the electricity grid, has provided just 14 per cent of electricity. In some parts of Scotland, the grid has regularly been operating with zero carbon emissions.

And there is a lot more to come. On offshore wind alone, the UK is set to double from 14GW of capacity now to 28GW by 2027. The government has a Boris Johnson-era target of 50GW of offshore wind capacity by 2030. For comparison, average UK electricity demand this week has been 33GW.

This explosion in renewables is being driven by the dramatic fall in costs of wind and solar farms. The most recent UK contracts for difference auction priced electricity from offshore wind at £37 per MWh, compared to more than £100 for the Hinkley Point C nuclear plant, while gas-fired electricity has cost several times more than this throughout 2022.

Renewable energy has very low marginal costs and is virtually unlimited by physical constraints. The only real constraint on renewables is how quickly we invest and build.

This is not just good news for fighting climate change. There is now, if we want it, the prospect of abundant, clean, nearly inexhaustible energy. It is possible, by the late 2030s, if the UK has met its goal for a net zero electricity supply, that the debate could move from eliminating carbon to creating abundance.

But there is a catch: renewable energy is only abundant some of the time. Wind power may be breaking records this week, but for large parts of December it was barely contributing to the grid.

Part of the solution to this intermittency lies in storing electricity and helping people to use it more flexibly, matching consumption to availability. There are many promising technologies for storing energy — from batteries to hydrogen — and they will play a key role in getting to net zero.

Another important step is to build more electricity supply than we need. The more electricity we have, the smaller the shortfalls will be during renewables’ low periods, with more available for storage.

But why would investors keep building renewable energy past the point where there was demand for it? The more supply there is, the more electricity prices — and returns to investors — would fall. The answer lies in finding new sources of demand for excess electricity.

How could we use abundant but intermittent energy? One option is to use it to further fight climate change. Direct air carbon capture may have a role to play in stabilising the climate, but is very energy-intensive. Likewise, desalinating water could ease droughts and protect agriculture, but uses lots of energy. If the energy constraint drops some of the time, these become more viable solutions.

Another option may lie in energy-intensive industries that can turn themselves on and off at short notice. Industries that use electrolysis, such as aluminium and green hydrogen, could expand production significantly if energy costs fall.

One of the lessons of economic history is that energy breakthroughs usually lead to periods of rapid economic change. But that change is not easy to predict. In 1954, Lewis Strauss, chair of the US Atomic Energy Commission, foresaw a future where nuclear electricity was “too cheap to meter”. Nuclear has yet to fulfil that promise, but renewables may soon be able to. The key to getting there may not be using less energy, but figuring out how to use more.

Lapland mine could help reduce Europe’s dependence on China imports

Sweden’s state-owned mining company LKAB has said it has discovered Europe’s largest deposit of rare earth metals. The discovery bolsters the continent’s ambition to rely less on imported raw materials needed for the green transition.

The deposit, dubbed Per Geijer, is located north of the Arctic Circle in Sweden’s province of Lapland and contains more than 1mn tonnes of rare earth oxides — the largest known deposit of its kind in Europe, the company said.

Speaking at the company’s existing iron ore mine in Kiruna — itself the largest in the EU — chief executive Jan Moström said it would take several more years to establish what the deposit contained. “We have ongoing exploration activities in this deposit, which means for us it’s open, it’s not closed — we don’t actually know how big it is,” he added in a press conference.

Moström stressed the regulatory challenges lying ahead as the company seeks to exploit the discovery. “If we really want to pursue the green transition we must find ways to speed up this process quite substantially.”

Rare earths deposits are — contrary to their name — fairly common across different geographies, but it is the extraction of the minerals that is the most challenging part, because of complex processing and intensive environmental effects.

It would take 10 to 15 years before the raw materials could be delivered to the market, Moström said, but if permitting processes at a Swedish and EU level can be accelerated this timescale could be cut by upwards of 50 per cent. The company plans to submit an application for an exploitation concession this year.

At present more than 80 per cent of the world’s rare earths processing capacity is in China and the EU predicts that demand for the metals used in electric car motors and wind turbines will increase fivefold by 2030.

The mining company’s announcement came as European commissioners visited Kiruna in the opening days of Sweden’s six-month rotating EU presidency.

The EU has put the drive for greater self-sufficiency in raw materials at the top of its agenda as it seeks to curb its reliance on China and Russia and shore up its ambitions to boost homegrown green technologies including wind and car batteries.

The European Commission is working on plans to lower regulatory barriers to mining and production of critical materials such as lithium, cobalt and graphite, needed for wind farms, solar panels and electric vehicles.

The work has taken on greater urgency amid a stand-off with the US over its $369bn Inflation Reduction Act, which offers huge industrial subsidies aimed at boosting green technologies in the US.

The US scheme has triggered fears of an exodus of green investment from the EU across the Atlantic, amplified this week by Belgian prime minister Alexander De Croo, who complained of “aggressive” US efforts to woo EU companies.

Some member states are sceptical about how far the EU can go towards lowering its reliance on imported raw and refined materials given the regulatory obstacles, stressing the need to stick with a free-trade agenda aimed at unlocking deals with mineral-rich continents such as South America.

Valdis Dombrovskis, trade commissioner, has emphasised the need to widen the union’s network of free trade agreements, pointing to Chile, and its vast stocks of lithium, as the EU seeks to sign a deal updating a 2002 agreement. The EU also wants an agreement with Australia, another raw materials powerhouse, by next summer.

“Having a wide network of FTAs is a source of diversification and thus a source of resilience,” Dombrovskis told the Financial Times last year.

Northern Sweden is home to one of the biggest green industrialisation projects in the world as several large battery and steel factories tap the region’s surplus of renewable energy. The resulting rush of investments has turned the region into a boom area as companies such as Northvolt, Facebook and H2 Green Steel have moved there.

But the amount of power needed for the projects is vast: LKAB’s plans to make carbon-free sponge iron needed for steel will alone take up one-third of Sweden’s electricity resources.