TheChek News Flow

What's the mission of a fashion designer today? Creating honest garments, according to Miuccia Prada, as she demonstrated with her desirable collection.

One voice, multiple views. For her last collection as the solo Prada creative director — starting from September she will be joined at the creative helm by Raf Simons — Miuccia Prada let five artists interpret her spring effort through five short videos, offering different interpretations and takes on the men’s and women’s lineup.

The message came through as strong, coherent and cohesive as ever. The pandemic, the economic crisis, the social tensions spreading around the globe can’t leave anyone indifferent, and cannot leave a sensitive designer like Prada unresponsive.

“I think that our job as fashion designers is to create clothes for people, that is the honesty of it. That is really the value of our job — to create beautiful, intelligent clothes. This season, we focused on that idea: it is about clothes, about giving value to pieces,” Prada said. “The clothes are simple — but with the concept of simplicity as an antidote to useless complication. This is a moment that requires some seriousness, a moment to think and to reflect on things. What do we do, what is fashion for, what are we here for? What can fashion contribute, to a community?”

In keeping with her commitment, the designer embraced an unfussy yet highly sophisticated approach, minimal yet emotional. Combining function and aesthetics, she proposed the alpha and the omega of the brand’s fashion lexicon, exuding no nostalgia, only contemporary desirability.

Touches of Nineties minimalism emerged along with a subtle Sixties vibe, but Prada really focused only on what is relevant today, for boys and girls, men and women, living in our own world, with its joys and its limits.

Sharply cut, narrow silhouettes defined the men’s wear, where impeccable sartorial suits and uncomplicated outerwear styles, all worn with crisp white shirts, were juxtaposed with jersey bombers, track pants, lightweight jackets with a workwear feel, as well as cozy ribbed knits in powdery tones.

In the women’s wear, the precise, graphic lines of duchesse coats and suits worn with stirrup pants were counterbalanced by the couture-like volumes of feminine frocks and full skirts, sometimes stamped with Prada’s iconic metallic triangle tag. Playing a restrained palette of solids, including black, white, gray and hints of camel and powder pink, Prada introduced two delicate floral motifs, which seemed like fragile, pretty flowers growing from concrete.

The designer’s functional approach reached a peak with the garments of the Linea Rossa range, where futuristic elements collided with retro touches in high-end activewear with a polished allure.

Focusing on purity and the essential, on practicality and authenticity, Prada’s collection explored the power of simplicity.

The once fast-growing brand had failed to meet expectations following its 2011 acquisition by L'Oréal.

Clarisonic is shutting down.

The L’Oréal-owned skin-care device brand, best known for its sonic skin-cleansing brushes popular with young Millennial women in the early 2010s, announced Wednesday via an Instagram post that it is closing on Sept. 30. All Clarisonic products, which are sold at Sephora, Ulta Beauty and on Amazon as well as the Clarisonic web site, are being marked down to 50 percent off.

“After more than a decade of game-changing innovation and technology, the Clarisonic brand will be shutting down on September 30, 2020,” reads the post. “We want to thank all of our loyal customers, dermatologists and retail partners who have helped put this brand on the map.”

L’Oréal did not respond to WWD’s request for comment.

When L’Oréal acquired Clarisonic from Pacific Bioscience Laboratories in 2011, it was considered to be one of the fastest-growing and hottest brands on the market. Industry sources estimated the brand generated $100 million in retail sales in 2010. But its popularity faltered under L’Oréal, and sales failed to meet expectations as the brand attempted to branch out from $150 skin-cleansing tools to devices for men, feet and makeup application.

Despite a lot of buzz around at-home skin-care devices, the category has never quite taken off in the way experts seemed to predict it would. Category sales were stable prior to the coronavirus, and certain devices, such as the at-home microcurrent tools NuFace and Ziip, have seen upticks during the pandemic, but these brands seem to be the exception — not the rule.

Meanwhile, Dr. Robb Akridge, the founder of Clarisonic, is set to bring a new beauty system to market this year through his new company, Opulus Beauty Labs — a novel beauty appliance with corresponding, self-contained, single-use, skin-care products, likened to a Nespresso for skin care.

Luxury fashion group’s retail sales fell 45% as lockdowns stymied activity this spring

British luxury fashion group Burberry has said it sees no immediate end to disruption to its business from coronavirus, as the pandemic continues to reduce activity in its stores and keep tourists away.

Burberry said it expects its financial second quarter, ending in September, “to continue to be materially impacted by the pandemic”.

“Tourist flows are likely to remain negligible,” the group said on Wednesday. “Store operations are continuing to face significant headwinds, with some remaining closed and operating with reduced trading hours.”

The group forecast that retail sales in the second quarter would be up to 20 per cent lower than the same time last year. In its wholesale business, revenues in the first half of the year were running around 50 per cent lower than a year ago. 

In the quarter to June 27, Burberry’s same-store retail revenues fell 45 per cent on the same period in 2019. 

Burberry, whose business model depends on wealthy tourists visiting its European stores, said that coronavirus-related lockdown measures in Europe meant sales fell 75 per cent on a year ago. Revenues in the US fell by 70 per cent, although Burberry said trading is improving after some restrictions have eased.

Chief executive Marco Gobbetti said that, despite such declines, consumer response to Burberry’s latest collections had been “excellent”, particularly with new, younger customers. 

DAX:

MDAX:

SDAX:

Nikkei +1.62% Hang Seng -0.06% CSI -0.09% Shanghai -0.49% Shenzen -0.40%

Eur$ 1.1380 -0.94% CNH 7.0054 CNY 7.0033 JPY 107.27 GBP 1.2569 CHF 0.9405 RUB 70.9326 WTI $ 40.51 +0.60%

S&P +0.77% Nasdaq +0.48% EuroStoxx +1.36% FTSE +1.10%% Dax +1.39% SMI +1.16%

Macro :

- Portugal to Keep Restrictions in 19 Parishes Through July 31

- Trump Ends Hong Kong’s Special Status With U.S. to Punish China

- Fed’s Bullard Sees Unemployment Rate Falling Substantially Lower

Keep an eye on :

- ANTO LN : Antofagasta Invokes Mediation in a Bid to Avert Strike in Chile

- AKBMME NO : Aker Biomarine Second Quarter Loss $9.07 Mln

- AKSO NO : Aker Solutions Second Quarter Adj Loss/Shr NOK0.23

- ASML NA : ASML Third Quarter Net Sales Forecast Beats Estimates (1)

- ATEA NO : Atea Sees Covid-19 Pandemic Accelerating Digitalization Trend

- ATL IM : Italy’s Conte Sets Ultimatum as Benettons Make New Proposal

- ATL IM : *ITALY SEEKS TO SETTLE AUTOSTRADE DISPUTE UNDER NEW PROPOSAL

- AXFO SS : Axfood Second Quarter Operating Profit SEK605 Mln

- BC IM : Brunello Cucinelli 1H Net Rev. EU205.50, Est. EU208.0M

- BYW6 GY : BayWa Unit to Introduce First Climate-Change Resistant Apple

- BOSN SW : Bossard Second Quarter Sales CHF180.5 Mln, -17% Y/y

- BRBY LN : Burberry to Cut Jobs in Revamp After Lockdown Causes Sales Fall

- CCIV/U US : Michael Klein Seeks to Raise $1 Billion For New Blank-Check Co. (SPAC)

- CLASB SS : Clas Ohlson June Sales +5%

- COPN SW : Cosmo Assigns Remimazolam License Pact to Acacia Pharma

- DHER GY : Delivery Hero Says It’s Open to a Deal With Rappi or Glovo

- DEH/U US : Blank-Check Company D8 Raises $300M in Upsized U.S. IPO: Terms (SPAC)

- DKSH SW : DKSH First Half Adjusted Operating Profit CHF111.3 Mln, -10% Y/y

- DRW3 GY : Draegerwerk Boosts Full Year Ebit, Sales Forecast

- ELISA FH : Elisa Second Quarter Revenue 1.5% Above Estimates

- FB US : Facebook, Sony to Boost Output of Devices by Up to 50%: Nikkei

- FIF LN : Finsbury Food Says Performance is in Line With Market Views

- GALP PL : Galp: Unauthorized Derivatives Transactions Result in EU60m Loss

- SHBA SS : Handelsbanken’s Capital Buffer Soars While Credit Losses Decline

- INWI SS : Inwido Second Quarter Ebita SEK193 Mln, +3.2% Y/y

- MRNA US : Moderna Coronavirus Vaccine Shows Promise in Key Early Trial

- MOWI NO : Mowi Prelim Second Quarter Ebit About EU96 Mln

- KOG NO : Kongsberg Second Quarter Ebitda Beats Highest Estimate

- LYV US : Back-to-Normal Trade Gets Boost From Moderna Vaccine Trial --> +12% after hours

- MOR GY : MorphoSys’s Licensee Janssen Says U.S. FDA Approves Tremfya

- PNDXB SS : Pandox Second Quarter EPRA NAV/Shr SEK177.32 Vs. SEK173.83 Y/y

- PIRC IM : Pirelli CEO Proposes Nomination Angelos Papadimitriou as Co-CEO

- SEBA SS : SEB Second Quarter Net Income 1.7% Below Estimates

- SOLG LN : Cornerstone Rejects Unsolicited Bid by Solgold for Second Time

- STB NO : Storebrand Second Quarter Net Income Misses Estimates

- UHR SW : Swiss Comco Doesn’t Impose New Delivery Obligation on Swatch

- TEL2B SS : Tele2 2Q Adjusted Ebitda Below Estimates, Reinstates Guidance

- TEL NO : Telenor Grameenphone 2Q Ebitda Before Items Rises to NOK2.44B

- TKA AV : Telekom Austria Sees Full Year Revenue -2%

- TSCO LN : Reusable Container Service Loop Teams With Tesco to Enter U.K.

- TOM2 NA : TomTom Second Quarter Revenue 3.3% Above Estimates

- UBI IM : UBI Investor Fondazione CRC Says Intesa’s Bid Not Congruous

- ZO1 GY : Zooplus Boosts Full Year Ebitda Forecast

When Ya-Chieh Hsu, professor of stem cell and regenerative biology at Harvard University and the Harvard Stem Cell Institute, wanted to figure out exactly what makes hair turn grey, she started with an obvious, albeit anecdotal, culprit: stress. There are well-known historical examples of the connection between stress and hair greying—Marie Antoinette’s coif reportedly blanched after she was captured during the French Revolution—and studies have even linked stress in animals to greying hair. But for the first time, Hsu and her colleagues figured out the biological reason why stress saps the pigment out of hair.

In a study published in Nature, Hsu and her team report that the process starts with the sympathetic nervous system, which orchestrates all of the critical body processes that we never have to think about—our heart rate, our breathing, as well as things like digesting food and fighting off germs. It is also responsible for the fight-or-flight response—the auto-pilot behavior system that helps us to recognize and respond to threats before we really have time to think about and process them. The sympathetic nervous system is intimately linked to our stress response, so in that respect it’s not entirely surprising it might have something to do with greying hair.

But the sympathetic nervous system’s response to stress is generally one of last resort, activated only in a dire emergency when other systems are too slow or have failed. It’s not called into action when you’re behind on a project at work, for example, or are anxious about making an upcoming public presentation. Because of the energy required to turn on the fight-or-flight response, it wouldn’t make sense to rely on it for those situations. For those non-emergency stressors, there are other processes at work.

Improve your mood by signing up for TIME’s guide to managing stress and anxiety.

And that’s where Hsu focused her attention at first. She suspected that if stress were indeed turning hair grey, then it was probably working through something like the immune system, which might be releasing cells to attack color-producing cells in the hair follicle; or by triggering the release of stress hormones like cortisol from the adrenal glands. But neither seemed to be the case. She chemically induced stress in mice by injecting them with a compound called resiniferatoxin, which boosted the animals’ stress hormone levels; this method provided a reliable way of inducing the stress response over other strategies that the team explored, including using restraints, tilting the animals’ cages, wetting their bedding and changing their lighting conditions. Mice lacking immune cells and mice without adrenal glands both continued to show premature greying after getting these stress-mimicking injections.

That’s when Hsu turned to the sympathetic nervous system, and found that it could do permanent damage to a population of cells responsible for coloring hair. “We were really surprised,” she says. “The sympathetic nervous system would have been the last system we thought about. We know it’s activated under stress but you normally think about it as an emergency system, for fight-or-flight responses that are at the very least transient and reversible once the threat is gone. But here, we found that the sympathetic nervous system can permanently deplete an entire stem cell population.”

The cells that are targeted by the sympathetic nervous system under stress are a group of color-generating stem cells found deep in the so-called bulge of the hair follicle from which all new hair grows. Called melanocyte stem cells, these cells become active when a new hair begins to sprout in the follicle; the melanocyte stem cell then starts to divide and produce pigment-producing cells that color the shaft of the hair as it grows.

Hsu found that even during normal stress (not the fight-or-flight kind), the sympathetic nervous system is active, and produces the chemical norepinephrine, which leads to increased muscle contraction, including in the heart. In response to the norepinephrine, the melanocyte stem cells start churning out more than the usual allotment of pigment, misreading the stress-induced cue for the one that signals new hair growth. Eventually, their color reservoir runs dry and they can’t produce pigment any more. “Melanocyte stem cells are important in maintaining the pigment-producing cells in the hair follicle, and they are the only ones that can do so. Once they are gone, they are gone for good,” says Hsu. “ The result: hair stripped of color, turned grey.

The connection between stress and the nervous system and pigment-producing cells may be an evolutionarily conserved association among different species—cephalopods, including squid and octopi, also change color when under stress. Whether something similar (but in reverse) is at work in mammals and greying hair isn’t clear yet, but these findings are a reminder that stress has widespread effects on the body, and may be working in ways that doctors still don’t fully understand. Understanding how stress affects stem cell populations, which seed all of the cells in the body, from skin cells to blood cells and hair cells, could provide clues about how to cope better under stress and perhaps even age in a more healthy way. “Stress is an inevitable part of modern life, but we understand very little about how it affects stem cell biology and tissue turnover,” says Hsu. “Hair color is an excellent starting point because hair is so visible and easily accessible. But different stem cells and different organs may respond to the signals of the sympathetic nervous system very differently, and we don’t know exactly how yet.”

Based on these findings, it’s possible that there may eventually be a way to either preserve the melanocyte stem cells, or control the effect that the sympathetic nervous system has on their number. But for now, Hsu says, “There is no treatment available at this very moment. There is still a lot of work to do in this area.”

Swatch: watchmaker’s argument

Swiss group is going to need all the Churchillian vigour its chief can muster

In the spirit of Winston Churchill, Swatch chief executive Nick Hayek does not want to waste the coronavirus crisis — or so he told investors at the Swiss watchmaker’s results on Tuesday.

Unfortunately for Mr Hayek he will need more than the wartime prime minister’s rhetoric to turn this into an opportunity. The flight to safety has pushed the Swiss franc to levels last seen in 2015. That was one reason sales fell 46 per cent in the first half, pushing Swatch into its first-ever net loss. 

Lockdown, of course, was the main reason. Sales in China, where the virus first surfaced, plunged more than 80 per cent in February — a big hit in a country that accounted for 36 per cent of the group’s revenue last year. South Korea’s less stringent lockdown meant year-on-year declines of a tenth at worst in March. Overall, Swatch has closed 260 stores this year. That will not only reduce costs — of paramount importance for the group — but also increase reliance on lower-margin wholesaling. Sales to third-party resellers rebounded more modestly in June as retailers unwound existing stocks.

Swatch needs to clear a similar inventory at group level, amassed in part by dwindling sales in Hong Kong. A combination of protests, which shut shops and deterred mainland tourists, resulted in group inventories hitting a high of 83 per cent of sales last year. This ratio has steadily grown from half of sales a decade ago, suggesting excess manufacturing capacity. Swiss luxury rival Richemont manages to keep inventories below half of sales. Mr Hayek wants to take this Covid-19 crisis opportunity to accelerate online sales. He will also need to implement aggressive cost control.

Swatch will need all the Churchillian vigour Mr Hayek can muster. Shares, despite being stuck at levels last seen in 2009, are historically expensive — trading at 19 times two-year forward earnings Swatch still looks pricey compared with five-year norms.

If Mr Hayek can pull off inventory adjustments, take the short-term hit on profits, and move sales online he has a fighting chance of keeping Swatch up with the times. Long-suffering shareholders may well feel they have already waited too long.

The fintech cleaning up online money laundering

One Israeli company has spotted a niche in helping banks make sure their systems are not being used by criminals

In Ron Teicher’s view, the internet has made money laundering a lot easier.

Back in the old bricks and mortar days, criminals looking to send their misbegotten cash through the washing machine of fake commerce at least had to invest in, well, bricks and mortar. In Breaking Bad, Walter White and his wife ended up buying a car wash. In Better Call Saul, there was a nail salon.

But as commerce moved online, so did money laundering. Mr Teicher’s company, EverCompliant, followed suit, slipping into a niche slot in an estimated $2bn market — helping financial institutions make sure their networks were not the conduit for criminals to clean their money.

The Israeli start-up is coy about its successes, but Mr Teicher estimates that for most financial institutions, up to 10 per cent of the merchants sending payments through their systems are complete unknowns.

“You know nothing about them — who they are, what they do, what countries they are incorporated in,” he says. “They’re hiding behind what seems to be legitimate merchants.”

Take, for instance, the florist in a tiny Dutch town that was generating 70 per cent of its sales on French credit cards. The payments processor — one of the many layers of intermediaries that take a slice out of every swipe (or click) of a credit card — hired Mr Teicher’s crew to figure out what was going on.

Patterns popped out. There were far too many transactions, for instance, on days when people do not normally buy flowers (Fridays, by the way). That led to them uncovering a network of 10 marijuana websites using a fake florist’s storefront to illegally process payments using credit cards.

In another case, a European bank was warned that one of its clients, ostensibly a sports equipment merchant, was actually a front for a dozen illegal websites selling illegal pharmaceuticals on the side.

“These are gigantic markets, and they create a lot of damage to society,” says Mr Teicher.

His company is a small player. It has about 120 employees, with $13m in an initial round of fundraising backed by American Express Ventures. But because patterns, by definition, repeat themselves, the more data EverCompliant crunches, the more it knows about the tell-tale signs of money laundering.

This kind of data analysis is becoming a niche for Israeli fintech companies. There is a big universe of start-ups involved in crunching vast amounts of data — from traffic to transactions — for their clients or to refine their own algorithms.

Start-up Nation Central, an advisory firm, counts at least 60 companies involved in tracking and analysing transactions for financial institutions, and twice as many selling compliance products to deeply regulated western financial institutions.

Many of them are in the midst of fundraising rounds, despite, or sometimes because of, a coronavirus-related slowdown in all investments.

Since crime isn’t going anywhere, except online, Mr Teicher sees a large market. Grand View Research, a US-based advisory firm, estimated pre-coronavirus that the market for products such as EverCompliant was nearly $900m in 2018, and would grow at about 15 per cent a year until 2025.

Covid-19 has accelerated that timeline, says Mr Teicher. As ecommerce companies have boomed, so has the portion of their transactions that are suspicious. “People are looking for alternative ways to make money in financial crisis. And unfortunately, during times of financial crisis, we see more people trying to move into some criminal activity.”

Quick Fire Q&A

Company name: Loanboox

When founded: 2015

Where based: Zurich

CEO: Philippe Cayrol

What do you sell, and who do you sell it to: Loanboox is an independent platform connecting companies and public-sector borrowers with institutional investors and banks.

How did you get started: In 2015, the founding team developed a prototype together with 30 customers and successfully launched the platform a year later.

Amount of money raised so far: SFr30m

Valuation at latest fundraising: SFr120m

Major shareholders: Founders and employees, Deutsche Kreditbank, LGT Group, professor Roland Berger.

There are lots of fintechs out there — what makes you so special: We are a pioneer and market leader in making debt capital markets efficient, transparent and accessible across borders.

Wirecard fallout: The reverberations of Wirecard’s collapse are still being felt around the world. The UK Financial Conduct Authority’s decision to temporarily close Wirecard’s UK business left some people unable to buy food or basic services for several days, the Financial Times reported. Meanwhile, regulators have toughened their scrutiny of the payments sector and potential buyers are looking at several of Wirecard’s businesses. Find FT’s full coverage of the Wirecard saga here.

Stumbling blocks: Business banking start-up Tide is to halt lending under the UK government’s Bounce Back Loan scheme, reports Finextra. Tide’s CEO told customers that the company was unable to win funding to finance the loans. He said that the structure of the scheme was better suited to large lenders than fintech companies.

Follow the money: Root, an US-based insurtech specialising in motor insurance, is in talks to raise $1bn from investors, according to Inside P&C. The publication reports that the company is also looking at a potential IPO following the success of the Lemonade flotation earlier this month.

New frontiers: Sifted lifts the lid on Hedosophia, a secretive venture capital fund run by Ian Osborne which is one of the biggest backers of European fintechs. According to Sifted, the billion-dollar venture fund has invested in a range of companies including TransferWise, Raisin, WeFox and Qonto.

AOB: Payments company Taulia is raising $60m from investors including Ping An and JPMorgan, reports the Wall Street Journal; Spain’s Banco Sabadell is to use WhatsApp to deliver insurance services, says Finextra; Marqeta, the US payment card issuer, is looking at an IPO, according to Reuters.