>>> Up
* Boeing Raised to Buy at Citi; PT $209
* Centrica Raised to Add at AlphaValue/Baader
* Dustin Raised to Hold at Handelsbanken
* Euronext Raised to Overweight at JPMorgan; PT 101 euros
* Hochschild Mining Raised to Buy at Peel Hunt; PT 135 pence
* Keywords Studios Raised to Buy at Peel Hunt; PT 3,000 pence
* Suedzucker Raised to Hold at M.M. Warburg; PT 13.90 euros (+)
* Victrex Raised to Overweight at Barclays; PT 2,200 pence
>>> Down
* Atos PT Cut to 13 euros from 24 euros at Bryan Garnier (+)
* Colruyt Cut to Hold at Kepler Cheuvreux; PT 29 euros
* Colruyt PT Cut to 25 euros from 29 euros at Barclays (+)
* Fresnillo Cut to Add at Peel Hunt; PT 875 pence
* Ipsen PT Cut to 80 euros from 90 euros at Morgan Stanley
* Nike PT Cut to $159 from $192 at Morgan Stanley
* Synthomer Cut to Equal-Weight at Barclays; PT 323 pence
>>> Initiation
* ADDvise Group Rated New Buy at Pareto Securities; PT 10 kronor (+)
* Calliditas Therapeutics Rated New Buy at Kepler Cheuvreux (+)
* Weibo ADRs Rated New Buy at GF Securities; PT $36.42
* Wilmington Rated New Buy at Investec; PT 370 pence (+)
>>> Call
* Asos PT Lowered at Berenberg as Outlook Cut Raises Questions (+)
* Boeing Upgraded at Citi on Assumption Problems Can Be Resolved
* Centrica Upgraded at AlphaValue on Positive Market Dynamics
* Colruyt Cut to Hold at Kepler Amid Further Margin Pressure (+)
* Halma Results ‘Overshadowed’ by CEO Retirement, Jefferies Says (+)
* Ipsen Gets New Street-Low PT at Morgan Stanley on ‘Challenges’
* Rexel Margin Guidance Upgrade Better Than Expected, Citi Says (+)
Why Chanel Is Opening Private Boutiques
BoF’s luxury editor Robert Williams offers insight into the surprising news that the mega-label plans to open stores dedicated to serving top customers.
Background:
As traffic to stores soars, Chanel’s chief financial officer Philippe Blondiaux said the brand plans to open dedicated boutiques for top-spending clients starting in key Asian cities. It’s a strategy that emphasises the importance of big spenders to the in-demand French luxury brand’s future amid whispers of an impending recession — but one that risks alienating first-time and occasional shoppers who are still dropping upwards of $10,000 for bags.
“Brands like Chanel, they’ve lived through lots of cycles of boom and bust in the economy … When there’s an economic crisis, they need to be ready to have a real focus on repeat business,” said BoF’s luxury editor Robert Williams.
Key Insights:
- Chanel sells many items in-store only, and limits locations to the most luxurious places in the world’s most luxurious cities — operating just around 250 stores compared with Louis Vuitton’s over 400 doors.
- Chanel is not the first brand to open special stores for private clients; Brunello Cucinelli deployed a similar concept last December. Other brands like Zegna have dedicated spaces in-store for special items.
- In 2021, the company’s profits have tripled and revenue jumped 50 percent year over year.
- The brand’s growth in fashion, watches and jewellery last year was driven by its decision to raise prices and a flood of new clients and first-time buyers to luxury.
- In addition to focusing on its physical footprint, Chanel is pushing its beauty business, which has been historically driven by department stores and beauty retailers like Sephora and Marionnaud, toward majority direct-to-consumer.
The Hunt for Activewear’s Next Big Category
Luxury brands and startups are betting on the growth of pickleball, padel, rugby, boxing and skiing to inspire a new appetite for sportswear.
KEY INSIGHTS
- Sports like pickleball, padel and skiing are seeing record participation. Pickleball drew in 4.8 million US players last year, while the US ski industry saw a record 61 million visits.
- Retailers are seeing a growing appetite for sports apparel. Farfetch’s skiwear assortment grew 192 percent in 2022 while Asos has seen a 10 percent annual increase of rugby products.
- Start-ups are centring product lines around these sports in hopes of capitalising on the growing interest, like Civile with pickleball and Halfdays with skiing.
People used to wear old sweats to yoga classes. Then came Lululemon.
When it first emerged on the market two decades ago, the activewear giant gained traction by focussing on yoga, then a niche, untapped sport. Now, it’s a $6 billion empire that’s expanded beyond yoga to create apparel and accessories for sports like running, swimming and tennis, too.
Lululemon’s trajectory has become a model for activewear upstarts that hope to compete with the likes of Nike and Adidas by catering to a sport that’s gaining momentum and hasn’t yet been claimed by bigger companies. Gymshark, for instance, has done this with strength training, while Nobull made its mark in the CrossFit community. After two years of a global pandemic creating new recreational habits, activewear labels big and small have been eager to identify the next big sport — and swoop in with accompanying gear.
Some brands, like Rhone and Palmes Society, are expanding on already-popular sports like golf and tennis. But others are finding opportunities in still-niche sports that don’t have associated established apparel giants yet.
BoF spoke with brands, retailers and sports industry experts to identify where they see the next big activewear opportunities.
Pickleball
The fastest-growing sport in the US, according to the Sports & Fitness Industry Association (SFIA), is pickleball, a combination of tennis, badminton and ping pong. Created in the 1960s, it’s played on a smaller court than tennis and has historically attracted an older demographic since it requires less endurance. It soared during the pandemic, drawing 4.8 million players in the US last year, per SFIA, up from 3.5 million in 2019.
“The sport is getting younger and it has a lot of youthful energy in it,” said Lauren Mallon, Fila’s senior director of marketing and strategic partnerships of tennis and pickleball. The brand has been creating pickleball apparel in varied colours and patterns.
There are 267 percent more pickleball products in stock now versus last year, according to Edited. The William Sonoma-owned Mark and Graham and K Swiss brands now sell an assortment of pickleball bags while Frances Valentine, Ssense and Anthropologie offer patterned rackets.
Pickleball apparel is similar to tennis gear, but entrepreneurs like Aubri Steele, who launched pickleball label Civile last year, see an opportunity in designing specifically for “picklers.” Civile sells muscle tanks, mini skirts, leggings and visors branded with a green, Supreme-like logo, and slogan puns like “don’t be a dink” (a finesse shot in the game).
“You can wear the same pair of leggings for 85 percent of what you do, but it’s about tribe mentality,” said Steele. “Pickleball people tend to be wholly consumed by the sport and are very proud to be a part of the community.”
Mallon said there’s also an opportunity with pickleball-specific footwear since “you are on your toes a lot … with quick, fast, lateral movements.” Fila, Nike and Asics have all started selling pickleball sneakers.
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Fila's pickleball sneakers worn by pickleball professional player Lucy Kovalova. (Lucy Kovalova)
Racket sports are gathering steam across the globe. Padel, a squash-like racket sport popular in South America and the Middle East, is growing fast in England and Italy. These sports, popular at private clubs, attract a gear-inclined audience, said Tom Cove, SFIA president and chief executive.
“It’s health or tennis clubs that people generally do want nicer … performance outfits,” he said. “If there’s a tournament at a club or in a local neighbourhood, that drives players to want to be … perceived as real competitors.”
Skiing
While brands like the North Face and Moncler have long served ski enthusiasts, the world of luxury ski wear is expanding as interest in the sport climbs. Last winter, the US ski industry saw a record 61 million visits, according to the National Ski Areas Association, while in Europe, sales at Swiss ski resorts were up 37 percent.
Skiing has long been considered a sport for the wealthy and avid skiers are known to spend heavily on gear. But with the sport welcoming many first-timers who hope to look stylish for Instagram, consumers want more fashion-forward choices. Sales of men’s skiwear were up 30 percent last year at MatchesFashion, said Damien Paul, the site’s head of menswear. Farfetch’s assortment of skiwear grew 192 percent in 2022, according to data from Edited, while Mytheresa’s new skiwear arrivals grew 32 percent.
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Louis Vuitton's skiwear collection, LV, launched in 2021. (Carlijn Jacobs)
“As the retro look is back, ski suits performed very well for us, especially those in feminine silhouettes and in flattering block colours,” said Lea Cranfield, chief buying and merchandising officer at Net-a-Porter.
This past winter saw skiwear collaborations between the likes of Balmain and Rossignol; Prada and the Aspen Skiing Company, which owns several Colorado ski resorts; and Jil Sander and Arc’teryx. Louis Vuitton also debuted its first ski collection, LV Ski, selling puffer jackets, leggings and boots. Upstart brands like Halfdays and Italic have launched ski accessories and apparel that are more inclusive with price points and marketing messages.
Industry experts say the opportunity in skiwear extends beyond products for the slopes. Heritage skiwear brand Fusalp, which sees about $40 million in annual sales and received an investment from Chanel heir David Wertheimer last month, is expanding its apparel offering to include silhouettes that “can be worn in the city,” said Sophie Lacoste Dournel, Fusalp owner and board member.
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Looks from heritage ski brand Fusalp. (Courtesy)
At Net-a-Porter, customers snapped up wool jumpsuits from We Norwegians and turtlenecks from Perfect Moment, for “lounging around the chalet,” added Cranfield.
“Customers are looking for … an outfit for après and an outfit for travel, as well as accessories to complete each look,” she said.
Rugby
Rugby has long been considered a predominantly male game, favoured by private schools and elite universities. But in recent years, the sport’s governing bodies have made efforts to reach new audiences and make rugby more accessible.
The US now has the largest population of rugby enthusiasts, with 45 million active fans, according to a report from governing group World Rugby and Nielsen. The US is set to host the prestigious Rugby World Cup tournament for men in 2031 and women in 2033, games sure to up the sports’ stateside popularity. Patrick Ouyi, director of Le Coq Sportif, a French activewear company that makes rugby performance apparel, said the US is a “big focus” for the brand.
Rugby is also a high-growth category for Castore, a UK-based activewear start-up. Increasing demand for rugby products was a factor in the brand surpassing £100 million ($125 million) in revenue last year, according to co-founder Tom Beahon.
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Rugby shirts from apparel brand Rowing Blazers. (Courtesy)
Plenty of shoppers are also buying rugby apparel without any intention of playing the sport. Shirt drops by Supreme, Palace and Jacquemus often sell out and these stores have brought a cool factor to the sport. Asos has seen a 10 percent annual increase in rugby products like polos and sweatshirts, according to Edited. And at the New York-based Rowing Blazers, rugby styles have picked up significantly since the pandemic, said Jack Carlson, the former Olympic rower and archaeologist who founded Rowing Blazers in 2018.
“We think rugby absolutely will have a residual apparel brand impact going forward because it has this continental flair, European branding that ... people appreciate as both cool and stylish,” said SFIA’s Cove.
Boxing
After gyms closed during the pandemic, boxing saw a resurgence, thanks to the popularity of short, intense fitness classes. Studios like 1Rebel in the UK and Australia, and Rumble in the US have cult followings and have been opening more studios over the past year, where they sell their apparel.
The rise of YouTube boxing, with social media stars like Jake Paul and KSI committing to professional boxing careers, has also attracted younger generations to the sport, while “fight night” charity events and “white collar” boxing tournaments have renewed interest in older, corporate settings, added SFIA’s Cove.
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Free People's boxing collection with Everlast. (Courtesy)
Brands across the pricing spectrum are unveiling their own takes on boxing gear. Lululemon sells men’s and women’s boxing training wraps and Alo Yoga sells an assortment of boxing gear too. In May, Urban Outfitters-owned womenswear label Free People released a collection featuring bright pink boxing gloves and a $200 satin boxing robe in collaboration with boxing equipment manufacturer Everlast. Celine, Dolce & Gabbana and JW Anderson sell boxing-style shorts and in February, Miu Miu released a $1,550 boxing gloves and backpack set as part of a sports capsule.
Still, brands know there’s a possibility that boxing — or any emerging sport — may not grow enough to become the next major activewear category. At 1Rebel, apparel drives only just over 5 percent of its revenue, said marketing director Adam Wagner, but it’s also expanding to more general athleisure items, designed to be worn in and out of the boxing studio.
“Athleisure apparel ... supports the overall lifestyle of people who come to our gym classes,” said Angus Doyne-Ditmas, head of retail at 1Rebel.
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Can Biotech Evade Higg’s Fiber Sustainability Score Controversy?
Criticism of material sustainability scores continues in fashion with added nuance amid innovative strides.
Controversy around material sustainability scores has stoked recent criticism with Higg once again at the center.
Following a New York Times article published this week — alleging big fashion has buoyed big plastic and maintained biases against natural fibers — Amina Razvi, chief executive officer of Sustainable Apparel Coalition (which Higg used to be part of before becoming a separate tech company producing the Higg Index) issued a statement on LinkedIn.
“Stating that the Higg [Material Sustainability Index] favors synthetic materials over natural ones is incorrect,” she wrote. “It does not favor synthetic over natural fibers, and it was not designed to compare the two. The purpose of the MSI is to show designers and developers where environmental hot spots are in the production of a material, by breaking down impact categories such as Greenhouse Gas Emissions. The SAC’s communication guidelines for brands specifically prohibit brands from making comparisons across material types.”
Razvi assured that product designers and life cycle assessment, or LCA, experts use the dataset to make “more informed decisions” but not as a “generalized measure” of sustainability. She also addressed the Higg Index’s involvement in incoming policy under the European Union’s Circular Economy Action Plan, among other initiatives, saying the intent to use Higg as a benchmark is “incorrect.”
However, the SAC’s website says otherwise: “In support of future circular policies initiated by the European Commission, the SAC has been engaged by the Commission to facilitate a collaborative, multistakeholder secretariat, whose task is to develop Global Apparel and Footwear (PEFCR) which will serve as a policy standard for apparel and footwear products in the EU.”
PEFCR stands for Product Environmental Footprint Category Rules, and along with Organization Environmental Footprint Sector Rules, the rules are among the methods by which fashion is to transition to greener standards. Acting as technical secretariat to the Commission, The Policy Hub was launched by the SAC in collaboration with the Federation of the European Sporting Goods Industry and Global Fashion Agenda.
But where natural fibers are pitted against petrochemical-derived synthetics with the available data, the biotech firms driving the next wave of material innovation (many of which, although buzzy for their mushroom, kombucha or pineapple origins, are not free of plastic) are remaining largely cautious to free up their data.
From Bolt Threads to Pangaia, players are still working on definitive LCAs for their latest proprietary materials. And commercial releases, such as Bolt Thread’s Mylo innovation — arriving in Stella McCartney’s “Frayme Mylo” handbag this July, or Everlane’s Bio-Tex handbag line arriving fall 2022 — still have shoppers holding their breaths.
At a press tour of biotech start-up Modern Meadow’s New Jersey testing facility on Wednesday (where an early glimpse at Everlane’s Bio-Tex line was given), David Williamson, chief science and technology officer at Modern Meadow, told WWD how the firm is handling its own LCA data amid the continued tension and relatively threadbare data landscape.
Asked whether the LCA is or would be included in the Higg MSI, Williamson said: “No, it’s broader….So, our LCA actually goes beyond just what you’d see in the Higg Index. We did a cradle-to-gate LCA of our material all the way until the brand uses it. It’s much more extensive than what you’d get out of the Higg Index because it’s tied to the construction and the production processes.”
Unilever, Geno Aim to Develop Biotech Solutions That Lather, Lift Dirt
Unilever is making its largest biotechnology investment to date, teaming with the California-based Genomatica on greener alternatives to palm oil and fossil-fuel-derived ingredients.
LONDON — Unilever is making its largest investment in biotechnology to date, teaming with the California-based company Genomatica on developing alternatives to palm oil for beauty and cleaning products.
Unilever and Genomatica, known as Geno, will on Thursday reveal the creation of a $120 million venture to commercialize and scale alternatives to palm oil and fossil fuel-derived ingredients for use in everyday cleaning and personal care products.
The aim of the venture is to offer plant-based, sustainable and “highly effective alternatives” to the home and personal care markets, which have a combined value of $625 billion.
Unilever, parent of around 400 brands including Dove, Domestos, Love Beauty & Planet, and The Vegetarian Butcher, is the first corporate backer of the venture, with other strategic investors expected to join.
According to Unilever and Geno, the challenge is to develop a plant-based surfactant, or cleaning agent, that can lather and lift dirt. Surfactants are the key ingredients in shampoo, body wash, and soap. Most surfactants right now are made using either palm kernel oil derivatives or petrochemical sources.
“At present, there are few viable alternatives to palm and fossil sources that can be produced at scale to make those ingredients,” said Unilever, adding that the partnership with Geno marked its largest investment so far in developing biotechnology alternatives to palm oil.
Geno said it has spent decades using biotechnology to develop and scale sustainable materials derived from plant- or waste-based feedstocks. It converts plants and waste into chemical building blocks that go into cosmetics, carpets, home cleaners, and apparel.
Among the companies it has worked with is Lululemon Athletica.
Geno believes that the products it develops could also potentially help companies reduce their carbon footprint by up to 50 percent.
Unilever’s chief R&D officer Richard Slater said that biotechnology has the potential to “revolutionize the sourcing of our cleansing ingredients and ensure that Unilever is a future-fit business.”
He said the new venture with Geno “will sit at the intersection of science and sustainability, meaning we can continue to grow our business without relying only on palm oil or fossil fuel derivatives.”
Slater added that developing new materials will also help to make Unilever’s supply chains more resilient. “We will be marrying science and nature to make sure there is no trade-off for our consumers between the efficacy and sustainability of their products.”
He told WWD that, in the past biotechnology alternatives have shown promise “but they’ve not been at the stage where we can scale and commercialize. Thanks to advances in biology, engineering and — importantly — digital technology, we are now at this stage. We’re moving from trial-and-error physical experiments to using data, virtual modeling, and AI to dramatically speed the process and improve the chance of success at commercial scale.”
In terms of timing, he said the plan is to run trials over the next few years, with the intention of scaling up production for use in products between 2026-28.
Slater said they’re using sugar as the main feedstock, which goes through a fermentation process.
“As we progress, we’d like to make this process even more sustainable by using the parts of crops that don’t currently make it into the supply chain — like the waste corn stubble that’s left in a field after a harvest. Lifecycle analysis shows that this is a lower carbon alternative. This will mean we can use feedstocks that are close to future production hubs, shortening freight distances too,” he added.
Christophe Schilling, Geno’s chief executive officer, said his company has proven “that biotechnology can replace traditional production methods to produce ingredients with bio-based sources that deliver both high-performance and sustainability, at scale. Our Geno technology also represents the potential to reduce greenhouse gas emissions by 100 million tons in upcoming years.”
Unilever, which had sales of 52.4 billion euros last year, has repeatedly said it wants to be a purpose-driven organization and a global leader in sustainable business. More than half of the company’s footprint is in developing and emerging markets.
The company said that while sustainably sourced palm oil will remain an important source of bioenergy, alternative ingredients can play a growing role in diversifying supply chains to drive optionality, sustainability, and cost management.
Unilever, Geno Aim to Develop Biotech Solutions That Lather, Lift Dirt
Unilever is making its largest biotechnology investment to date, teaming with the California-based Genomatica on greener alternatives to palm oil and fossil-fuel-derived ingredients.
LONDON — Unilever is making its largest investment in biotechnology to date, teaming with the California-based company Genomatica on developing alternatives to palm oil for beauty and cleaning products.
Unilever and Genomatica, known as Geno, will on Thursday reveal the creation of a $120 million venture to commercialize and scale alternatives to palm oil and fossil fuel-derived ingredients for use in everyday cleaning and personal care products.
The aim of the venture is to offer plant-based, sustainable and “highly effective alternatives” to the home and personal care markets, which have a combined value of $625 billion.
Unilever, parent of around 400 brands including Dove, Domestos, Love Beauty & Planet, and The Vegetarian Butcher, is the first corporate backer of the venture, with other strategic investors expected to join.
Stocks and US equity futures rose Thursday but were off session highs, hampered by the prospect of a sustained campaign of Federal Reserve interest-rate hikes to get runaway inflation under control.
An Asian share gauge and US contracts rose less than 1% after a Wall Street rally that halted a five-day, 10% rout in the S&P 500. US equities had advanced as markets focused on Fed Chair Jerome Powell’scomment that super-sized hikes will be rare. He was speaking in a briefing after the central bank increased borrowing costs the most since 1994. Treasury yields had also tumbled Wednesday as traders pared bets on Fed tightening next month -- no longer fully pricing in a three-quarter point move. But the notes subsequently reversed a chunk of that shift in Asian trading. Powell signaled another big hike in July after the Fed raised rates by three-quarters of a percentage point, but added “today’s 75 basis-point increase is an unusually large one and I do not expect moves of this size to be common.” Leaning against the risk of a string of jumbo moves spurred the now-ebbing relief rally. The dollar ticked up and the yen fell. Cryptocurrencies -- emblematic of market stress due to tighter financial conditions -- pared gains. Wednesday’s decision took the target range for the federal funds rate to 1.5% to 1.75%. Officials projected 3.4% by year-end and 3.8% by the end of 2023. The Fed also reiterated it will shrink its balance sheet by $47.5 billion a month -- a move that took effect June 1 -- stepping up to $95 billion in September. Fears of an environment of sharply slower economic growth, elevated price pressures and rising rates continue to shadow markets. An unexpected first-quarter contraction in New Zealand’s economy underlined worries about recession risks in a range of nations.
From Friday through Tuesday, US Treasury yields surged in one of the biggest selloffs in decades and global equities fell into a bear market. In commodity markets, crude oil pushed higher and gold trimmed a rally. US After Hours Quiet after hours; many banks increased prime lending rates by 75bp, as expected, following Fed decision.
Nikkei +0,56% Hang Seng -1,29% CSI -0,32% Shanghai -0,45% Shenzen +0,36%
Eur$ 1,0440 CNH 6,7042 CNY 6,6991 JPY 134,36 GBP 1,2151 CHF 0,9954 RUB 57,25 TRY 17,2595 WTI$ 116,05 Gold 1,831,25 BTC 22,310 ETH 1,213
S&P -0,33% Nasdaq -0,37% EuroStoxx +0,32% FTSE -0,16% Dax +0,32% SMI -0,39%
Macro :
- Fed Hikes 75 Basis Points, Powell Says 75 or 50 Likely in July
- ECB Acts to Stem Nascent Italian Crisis With Pledge of New Tool
- Jeffrey Gundlach Tells CNBC That Powell Is ‘Very Short-Termist’
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