WWD : Amazon Luxury Stores to Make Its European Debut With Kristen McMenamy

Amazon Luxury Stores to Make Its European Debut With Kristen McMenamy
Amazon Fashion Luxury Stores Europe will debut with a campaign featuring Kristen McMenamy, Precious Lee, Leon Dame and Dara.

LONDON — Amazon Fashion Luxury Stores is taking a long-awaited leap into Europe, nearly two years after launching the concept in the U.S.

An announcement is expected on June 8.

The retail brand, which was originally set to make its European debut last November, according to industry sources, will come to market with a roster of names including Christopher Kane, Dundas, Elie Saab, Mira Mikati, Boglioli and Altuzarra, many of which already sell on the U.S. version of the site.

The shop will initially be available in the U.K., Germany, France, Italy and Spain at Amazon.co.uk/luxury stores.

“Fashion is an area where we continue to innovate and add selection, and we’re always looking for opportunities to offer our diverse, fashion-engaged customers more of their favorite brands and styles,” said Ruth Diaz, vice president of Amazon Fashion Europe.

“This is just the beginning, and we look forward to continuing to support brands with innovative tools and resources, so they can share their latest collections and unique stories with our customers across Europe season after season,” she added.

The collections will be sold directly by the brands and designers, which make “independent decisions regarding their inventory, selection and pricing,” Amazon said.

The digital retail giant said customers in Europe and the U.S. can shop Luxury Stores on devices such as the Amazon mobile app, desktop, mobile and tablet browsers.

When the Luxury Stores concept launched two years ago in the U.S., it was much more limited: It was by-invitation-only platform for top-spending Prime members, with its own site located inside the Amazon app.

As the months have progressed — and the competition has stiffened — the site has progressively opened to a broader customer base. On Instagram, it is also working with influencers including Imaan Hammam, Tommy Dorfman and Camille Rowe.

Xavier Flamand, vice president of Amazon Seller Services, said Amazon offers client brands digital enhancements such as motion graphics and auto play imagery, “to further share their stories and connect to a fashion-engaged customer base.”

Amazon Luxury Stores Europe will launch with a campaign shot by Angelo Pennetta and styled by Charlotte Collet. It features Kristen McMenamy, Precious Lee, Leon Dame and Dara.

Sally Singer, head of fashion direction, said: “We have a unique opportunity to bring directional, inclusive storytelling and technology to the business of fashion with exciting opportunities for designers and customers alike.”

As reported, the European arm of Luxury Stores is launching as competition for brands — and customers’ wallets — is more ferocious than ever.

While some of the brands on the U.S. platform have been reporting robust sales and remain transfixed by the potential of reaching even a fraction of Amazon’s customers, there are those who believe the momentum might not transfer to Europe.

Europe is brimming with homegrown, multibrand fashion and luxury sites such as Zalando, Farfetch, Mytheresa, Net-a-porter, Matchesfashion and the LVMH Moët Hennessy Louis Vuitton-owned 24 Sèvres.

Add the Tmall and JD.com dynamics to the punchbowl, and it makes for one potent cocktail of competition.

In the nearly two years since Amazon Luxury Stores launched, those European sites have been forging new, international alliances, such as Compagnie Financière Richemont and Farfetch’s impending deal, and making further inroads in luxury.

Some brand managers interviewed by WWD last year said they were disappointed that Amazon had opened Luxury Stores to a broader audience (no longer restricting it to top Prime customers) and that the big-name luxury brands from groups such as Kering and LVMH never arrived.

“There are no adjacencies to elevate the smaller brands that are already on the site,” said one manager who asked not to be named. Another one added: “We were expecting them to come up with the heavy hitting brands, but they haven’t so far.”

Another company chief who asked not to be named told WWD that Luxury Stores makes more sense in the U.S., because the wholesale market is smaller with the recent closure of so many department stores in the region.

WSJ : Publicis Sees Ukraine War Weighing on Advertising Growth

Publicis Sees Ukraine War Weighing on Advertising Growth
Its Zenith ad-buying unit expects global ad market to remain strong despite inflation, supply-chain issues

Advertising giant Publicis Groupe SA PUBGY -1.08% pared back its global ad-spending forecast for 2022 due to the war in Ukraine, but said the advertising market remained healthy despite macroeconomic challenges.

Zenith, an ad-buying unit of Publicis, PUBGY -1.08% said it expects global ad spending to grow 8% to $781 billion this year, a downgrade from the 9.1% growth it predicted in December.

The firm said it reduced its projections because of the sharp cuts to advertising in Russia and neighboring countries. Since the war began in February, hundreds of companies such as McDonald’s Corp. , Anheuser-Busch InBev SA and Netflix Inc. have suspended their businesses in Russia or pulled out entirely from the country.

The conflict has had a chilling effect on advertising spending in the region, something that many tech companies including Facebook parent Meta Platforms Inc. noted in their most recent quarterly earnings. Zenith estimates that Russia’s invasion of Ukraine will lead to a 26% decline in ad expenditures in Central and Eastern Europe this year.

Still, Zenith expects overall ad spending to be buoyed by the Beijing Winter Olympics, the midterm elections in the U.S. and the soccer World Cup in Qatar, events that all attract significant amounts of advertising.

“We expect a strong year of growth,” said Jonathan Barnard, Zenith’s director of global intelligence.

Analysts and observers have grown increasingly worried over the past few months that the global advertising market could falter due to macroeconomic headwinds such as high inflation, supply-chain problems and higher commodity prices.

Those fears were ratcheted up after retailers such as Walmart Inc. and Target Corp. posted weaker-than-expected quarterly earnings and most major digital-ad players reported a notable slowdown in ad-revenue growth during their latest earnings reports. Social-media giant Snap Inc., which generates most of its revenue from advertising, recently warned investors that its second-quarter revenue and earnings would be lower than expected because the macroeconomic environment had deteriorated further and faster than the company had expected.

Despite these headwinds, ad spending has “remained on track,” Zenith said. The firm expects ad spending in North America to grow by 12% to $332 billion this year.

Zenith attributes the ad market’s resiliency partly to consumer spending, which continues to grow, as people are looking to travel and enjoy entertainment such as going to the movies, experiences that they missed during the global pandemic.

“Some consumers are reassessing where their budgets are going given the rapid rise in prices for energy and food, but overall consumer spending has maintained because a lot of people still have a cushion of savings that they built up during the pandemic,” Mr. Barnard said. “People are keen to get back to their prepandemic life.”

Ad executives said many companies have refrained from making deep cuts to advertising since consumer spending has managed to remain relatively healthy.

Cleaning products maker Clorox Co. said last month that it remained on track to spend 10% of its revenue on ads, and consumer-goods giant Kraft Heinz Co. told analysts in April that it had no intentions of cutting marketing. “We want to continue investing in our brands,” said Heinz CEO Miguel Patricio.

Ad and media executives have said advertising categories doing well include pharmaceuticals, entertainment and travel, while others such as cars have been shrinking, partly due to supply shortages.

Automotive ad spending in the U.S. declined about 8% in the first quarter from a year earlier, according to estimates from Standard Media Index, whose research captures data from national-brand spending with major ad-buying companies.

Zenith said it expects digital-ad spending globally to grow by 13% to $472 billion, down slightly from the 13.7% growth it expected in December. Zenith said that higher prices for TV ads, caused by lackluster ratings, are causing brands to accelerate their shift to digital ads. The ad firm estimates that 62% of ad budgets will be spent on digital media in 2022, up from 59% in 2021.

WSJ : Western Digital Reaches Settlement With Activist Investor Elliott

Western Digital Reaches Settlement With Activist Investor Elliott
Company says it will consider alternatives including a split of traditional hard drives from flash memory

Western Digital Corp. WDC 1.00% reached a settlement with activist investor Elliott Management Corp. that calls for the $19 billion company to consider splitting into two.

The company said in a statement that it would consider strategic alternatives including a separation into businesses focused on traditional hard drives for computers and flash memory, respectively, confirming an earlier report by The Wall Street Journal.

Elliott in May revealed a 6% stake in Western Digital and sent a letter calling on the company to explore a breakup.

San Jose, Calif.-based Western Digital, which has a market value of around $19 billion, previously said it would consider Elliott’s ideas. At a conference in late May, Western Digital Chief Executive David Goeckeler said the company and Elliott had been discussing additional ways to improve the company’s valuation.

Western Digital in 2020 decided to form separate units for its two businesses, a move Elliott praised and some saw as a precursor to a split.

Meanwhile, Japanese chip maker Kioxia Holdings Corp. is still open to a possible deal with Western Digital, according to people familiar with the matter.

Western Digital and Kioxia had been speaking since early 2021 and were working on a stock deal that would have created a memory-chip powerhouse, the Journal reported last summer. But the talks stalled, partly because of a steady decline in Western Digital’s shares.

Kioxia’s business would be a logical fit for Western Digital’s flash unit, which Elliott estimated could command an enterprise value of $17 billion to $20 billion. That is roughly equal to Western Digital’s market capitalization before its shares rose when Elliott’s campaign surfaced.

Elliott also said in the letter to the company that it would invest an additional $1 billion or more in equity in a potential spinoff or merger of the flash business in conjunction with another industry player.

>>> Stoxx 600 Pre-Market Indications

  • Prosus (1TY TH) +2.8%
  • Voestalpine (VAS TH) +1.3%
  • Orsted (D2G TH) +1.3%
  • Yara (IU2 TH) +1.2%
    • Yara Now Top Fertilizer Pick at Morgan Stanley, OCI Downgraded
  • Inditex (IXD1 TH) +1%
    • *INDITEX 1Q EBIT EU1.03B, EST. EU1.05B
  • Air Liquide (AIL TH) +0.8%
  • Adidas (ADS TH) +0.8%
  • ASML (ASME TH) +0.8%
  • Bechtle (BC8 TH) +0.8%
  • Bawag (0B2 TH) -0.8%
  • Publicis (PU4 TH) -0.8%
    • Publicis Cuts Forecast Of World Ad Spending

>>> TradeGate Pre-Market Indications

DAX:
  • Delivery Hero (DHER TH) +0.9%
  • Adidas (ADS TH) +0.8%
  • SAP (SAP TH) +0.8%
MDAX:
  • Varta (VAR1 TH) +2.1%
  • K+S (SDF TH) +1%
  • Telefonica Deutschland (O2D TH) -0.8%
    • Telefonica Deutschland New Sell at Berenberg on Dividend Risks
SDAX:
  • Adler Group (ADJ TH) +3.1%
  • Nordex (NDX1 TH) +1.8%
  • MorphoSys (MOR TH) +1.6%
  • Heidelberger Druck (HDD TH) +1.3%
  • SAF-Holland SE (SFQ TH) -1%
    • SAF-Holland to Buy Haldex for SEK66 a Share: M&A Snapshot

>>> Europe : Brokers Upgrades & Downgrades - 8th of June 2022

>>> Up
* AIB Group Raised to Outperform at KBW; PT 3.30 euros
* Assa Abloy Raised to Hold at HSBC; PT 225 kronor
* Atlas Copco Raised to Buy at HSBC; PT 130 kronor
* BT Raised to Hold at HSBC; PT 185 pence
* Hexpol Raised to Buy at SEB Equities; PT 107 kronor
* Johnson Matthey Raised to Buy at Panmure Gordon; PT 3,888 pence
* MFE Raised to Overweight at JPMorgan; PT 1.20 euros
* MOL Raised to Buy at Erste Group; PT 3,520 forint
* Safran Raised to Outperform at Exane; PT 134 euros
* Sanoma Raised to Buy at Nordea; PT 15.90 euros
* Standard Chartered PT Raised to 991 pence at Jefferies
* Yara Raised to Overweight at Morgan Stanley; PT 580 kroner

>>> Down
* Altria Cut to Underweight at Morgan Stanley; PT $50
* OCI Cut to Equal-Weight at Morgan Stanley; PT 36 euros
* Schindler Cut to Reduce at HSBC; PT 173 Swiss francs

>>> Initiation
* Investec Rated New Overweight at ABSA Securities
* Kingspan Reinstated Buy at Goldman; PT 105 euros
* Pensionbee Group Rated New Buy at Jefferies; PT 220 pence
* Rockwool Reinstated Neutral at Goldman; PT 2,257 kroner
* Telefonica Deutschland Rated New Sell at Berenberg

>>> Call
* Altria Gets Only Negative Rating as MS Cites Competitive Risks
* Pensionbee New Buy as Jefferies Sees High Growth Continuing
* Safran Raised to Outperform at Exane for First Time in 9 Years
* Telefonica Deutschland New Sell at Berenberg on Dividend Risks
* Yara Now Top Fertilizer Pick at Morgan Stanley, OCI Downgraded