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CEO Olivier Bron discusses the agenda for the upscale department store and how it transcends a sector fraught with difficulties.

With Bloomingdale’s distancing itself from the competition and strengthening its luxury and contemporary profile, the challenge is clear — how to sustain the momentum and build upon last year’s gains.

That formidable task falls on the shoulders of chief executive officer Olivier Bron, a 48-year-old Frenchman. Before taking the reins of Bloomingdale’s two years ago, he served as CEO of the Central and Robinson Department Stores in Thailand. Before that, he was chief operating officer and director of strategy at Galeries Lafayette Group in France, and earlier he worked at Bain & Company, the global consulting firm, focusing on retail transformations.

“We had a great performance in 2025, which set a new high watermark for Bloomingdale’s. We’re working on building 2026 into a better year than 2025,” Bron told WWD. “It was the highest sales in Bloomingdale’s history. We’re doing amazingly well in ready-to-wear — across the board from contemporary to luxury. We’re doing amazingly well in beauty and in fine jewelry, and we’re doing great in home, which is a key differentiator for us. These trends will keep going in 2026.”

Bloomingdale’s comparable sales rose 9 percent in the third quarter last year — the upscale department store’s biggest gain in 13 quarters — 5.6 percent in the second quarter, and 3.8 percent in the first quarter. Total annual volume hovers around $4 billion, industry sources estimate.

Bloomingdale’s recent performance provides some affirmation that with proper execution, the department store model is still viable, despite what have been decades of consolidation and skepticism dogging the sector. Bloomingdale’s operates 31 department stores, 25 Bloomingdale’s outlets and four Bloomie’s units, which are smaller, contemporary-oriented versions of the full-line stores.

There’s little chance for opening additional department stores, but Bron has built a strategy for organic growth, with the rallying cry, “Dream Big.” The strategy centers on investing in store renovations at the 59th Street flagship and key branches; building up the luxury image by attracting designer and premium contemporary brands not previously carried, and giving top brands deeper, fulsome presentations and additional points of distribution through much of the store fleet.

“We launched, let’s say, 3,300 new points of distribution over the past 12 months,” said Bron, citing Acne, Chloe, Burberry, Casablanca, Bottega Veneta, Jacquemus, Khaite, Roger Vivier, Skims and Zimmermann as examples.

“We’re still developing our luxury footprint, which was very much focused on a couple of doors. Now, we’re creating the right ecosystem for luxury brands to succeed. We have more opportunities in luxury ready-to-wear and luxury fine jewelry. We also have opportunities outside of New York for really expanding points of distribution.”

He cited 10 “destination” Bloomingdale’s doors best suited to bolstering luxury: 59th Street; South Coast Plaza, Century City, Valley Fair and Fashion Valley, which are all in California; Roosevelt Field in Garden City, N.Y.; Tysons, Va.; Aventura, Fla.; Short Hills, N.J., and Chestnut Hill, Mass.

“But we don’t want again to be luxury only. It’s very important we’re not Neiman Marcus,” Bron said. “The core, the sweet spot for Bloomingdale’s, is premium and contemporary to high luxury. We don’t ask the brands just to join us. We’re creating this ecosystem for them to succeed, meaning great store environments, big spaces for brands to express their identity and great service.

“Let’s move from a transactional relationship with the customer to a more experiential relationship.”

During an interview at Bloomingdale’s Long Island City, N.Y., offices, which command sweeping views of the East River and Manhattan skyline, Bron pointed out that it’s the day before Bloomingdale’s was due to stage its first vendor conference, happening at the 59th Street flagship. (He also maintains his office at the 59th Street flagship.) About 200 people representing 180 vendors would learn about the “Dream Big” strategy, plans for the future and why Bloomingdale’s is an outlier.

“It’s rare in our industry [when] all the planets are aligning like today. The underlying economics are actually pretty OK, despite some uncertainty, and of course, the competition is struggling, but most importantly, it’s the fruits of this ‘Dream Big’ strategy we implemented. It’s about modernizing the assortment, bringing new brands in, and new points of distribution for the brands. We are really expanding with brands that are working well. Our growth is happening with almost no new stores, maybe one outlet here and there, but it’s mostly organic. We’re also playing the role of incubator of new brands to make sure Bloomingdale’s is the place of discovery.”

At the vendor event, Bron would introduce a “partner intelligence platform” geared to strengthen partnerships with vendors by giving them greater information on customer shopping behavior. It’s being beta tested with five brands with the aim of a rollout to all brands within a few months. Vendors will be able to get greater customer information on how a customer shops their brand, other brands and other categories.

“It’s impossible to get this unless you’re launching a big survey, but we have this information,” Bron said. “Brands can benchmark the behavior of their customers against comparable brands. For example, if you’re L’Agence and you’re selling a lot of pants, where are customers buying tops? Department stores are the only ones able to deliver this kind of data.”

“Dream Big” also entails enhancing service and customer engagement by bringing more salespeople to the selling floors. Over the past year or so, about 90 “top” sellers were hired, many recruited from competitors and armed with client books filled with “VICs,” those high-spending, very important clients.

“It’s my worst nightmare when a customer comes to a store and can’t find anyone to help. That’s a disaster,” Bron said. “We increased our number of our VIC sellers — our top sellers — by 30 percent. They sell at least $1.5 million a year [each]. It’s very important that locally we’re relevant. The story we’re building at Bloomingdale’s right now is making us more and more attractive for these top sellers. We have the right brands. We have the right environment. We have the right momentum now. And we have a great culture at Bloomingdale’s.”

So what makes for a good salesperson?

“You have to genuinely care for people,” Bron said. “If you don’t, you don’t belong in retail. At department stores, there’s a complex selling ceremony because we have so many different types of customers and categories. The people in the store have the hardest jobs in the company. Without them, we can’t live. We can’t make a difference. You’re standing all day long, waiting and welcoming customers. And sometimes [business] is soft. Sometimes you have challenging customers. Sometimes you have a bad day or a bad evening with your kids or significant other. And what I keep saying is when you come to the store, you have to shine. You have to be welcoming. You have to be enthusiastic. That’s tough when otherwise, you’ve had a bad day.

“We have not only the best sales ever, but we have the best NPS score ever, thanks to the service that we’re providing in our stores — more people, better people and better training,” meaning more storytelling and awareness of the brands. “Are we perfect? By far no. We will keep working on it. But honestly, when you look at the surveys and what we’ve done, customers can perceive the evolution.”

In certain ways, Bron is reshaping the culture. He’s taking much of what he learned overseas and liked best about department stores in Europe and Asia and applying it to Bloomingdale’s. Overseas, retailers invest in stores differently, often providing richer experiences and presentations, with greater impact than stores in the U.S. He believes that in Europe and in Asia, a visit to a department store can be an enjoyable family outing. That’s not what department stores are generally known for in the U.S.

“Bloomingdale’s is definitely the best job I ever had,” Bron said. “It’s the convergence of everything I learned before and what I’ve learned since coming here. It’s an amazing opportunity to bring everything together with the team here and build the next chapter, the next golden age of Bloomingdale’s. 2024 for me was about learning the U.S. market, learning about Bloomingdale’s, learning how to work with the teams, and for the teams to learn to work with me. It was really about setting the vision. We launched our ‘Dream Big’ strategy two years ago, with this key notion of being the local leader,” meaning dominating the competition in each market where Bloomingdale’s operates, not just in New York City, where for much of Bloomingdale’s history, investments were heavily weighted toward the flagship.

“Our model for the department store model is a profitable and very strong model,” Bron said. “We have a strong balance sheet. We can invest in small brands. We can invest in service. We can invest in renovations.” The plan is to upgrade 12 stores, with renovations underway in Century City and Glendale, Calif., in addition to 59th Street.

“We have 4.2 million active customers every year. They visit at least 2.7 times a year, and many of these customers come every week. So saying the department store model is dead is crazy. There are some boring department stores that might be dead, so we have to keep reinventing ourselves and challenging our reasons for being.”

The Saks Global bankruptcy this year perpetuates doubts about department stores, yet for Bloomingdale’s, “it accelerates our journey,” Bron said. “We were already on track, and our performance was already very strong without the Saks Global situation. Now it’s important for brands to consider some diversification, and we’re probably the best option in that given context. So it’s not changing our strategy. It’s accelerating the success of this strategy. With ‘Dream Big,’ we are on a five-year journey. We started two years ago.”

Saks Global is closing certain department stores — nine have been revealed so far — which could pose some opportunity for Bloomingdale’s. “We remain open to opportunities of potential expansion,” Bron said. “We don’t have any plans right now.” It has to be the right market and right box. “If some opportunities come on the market, we will look for sure.” Bloomingdale’s does not operate any department stores in Texas or the Pacific Northwest, though the retailer has “a pretty strong online performance” in those areas, Bron said.

At Bloomie’s, the smaller format, contemporary-oriented versions of the bigger department stores, “We’re looking for some more opportunities. There is nothing we can share now,” Bron said. “It’s a profitable model for us, and very complimentary to our full-line stores.”

Additional outlets are also expected to open. About 30 percent of the merchandise in the outlets is from Bloomingdale’s department stores; 70 percent is bought expressly. Last year, two outlets were opened.

Asked if food and beverage is another growth opportunity, Bron replied, “I think you are right about that. It’s a very important complimentary service for our customers.” He suggested possibly opening additional restaurants in the department stores, though several operate in such locations as White Plains, Short Hills, South Coast Plaza, Roosevelt Field and 59th Street. “It’s definitely something we’re exploring.”

At 59th Street, there are three restaurants: Forty Carrots for frozen yogurt and salads; Flip for burgers, and Studio 59 for sophisticated cocktails and quick bites like tuna tartare or avocado toast. There is also Magnolia Bakery. A fourth restaurant is being “explored,” Bron said.

Regarding selling food to take home, “It’s a bit more complex in the current environment,” particularly given inflation and low margins. “But we could do that from an opportunistic perspective. In some of our campaigns, where we’re pushing food products, it worked pretty well with [fall 2024 campaign] ‘From Italy With Love.’ But I don’t think it will be a significant portion of our business in the future.” Decades ago, Bloomingdale’s 59th Street operated a section for epicureans on its main floor.

E-commerce represents about 38 percent of Bloomingdale’s total volume. “It’s still growing massively. We’re elevating the editorial content, and bringing new brands in, but the best way to invest in our digital business is to invest in our stores. When we talk about the marketing investment for digital, we talk about lower funnel, which is really about activating Google, Facebook, etc. Upper funnel is more about the branding. But what better way to invest in our brand than investing in our stores? Think about your best experience at Bloomingdale’s. You will never remember a brown box in front of your door shipped by someone you don’t know. That’s not the experience at Bloomingdale’s. It’s about being in a store to buy a suit or a sweater, and the seller was great, the store looked good and the ambience was good.”

His biggest challenge is enabling Bloomingdale’s to keep up with the fast-changing market. “We have to get ahead of the wave, and that’s why I’m pushing and pushing the teams to go bigger and faster. With the opportunities in the market and our positioning, we are doing the right things, but we have to keep going faster.

“My best day at Bloomingdale’s was when I realized what Bloomingdale’s was all about. It was the Saturday launch of ‘From Italy With Love.’ At noon, I told my wife I’m going to spend an hour in the store to check what’s going on. We had so many activations; I really wanted to take a look. Ultimately, I spent six hours in the store instead of one. When I went back home, there was this kind of negotiation with my wife — that’s a different topic. But I realized what Bloomingdale’s was about: all these customers, all these brand partners and our staff having fun together, having a drink together, going from one activation to another, one brand corner to another and spending time together. There is one KPI we don’t measure in our store, that I’m sure would be amazing — the amount of time people spent in the store that day. Sales were great, but most importantly, when I was watching the people, seeing some still there after three hours, I realized, that’s Bloomingdale’s. It was just my best day.”

Since then, Bloomingdale’s has stepped up its special events strategy. “Saturdays at Bloomingdale’s” occurs about eight times a year at all stores. “It’s where people just come to enjoy having a glass of Aperol spritz, an ice cream and chat with the brands doing some activations,” Bron said. “It’s an opportunity for people to relax, spend time together, for brands to cascade their storytelling. It’s about amplifying animation with our vendor partners. You see more carts, more food, DJs, installations and personalization.”

When the “Dream Big” strategy was launched, Bron and his executive team visited every Bloomingdale’s store to explain the strategy to everyone in the stores, before opening hours. “People were challenging us, questioning us. It was about getting some feedback. Were we missing something? The reactions were amazing. So the energy and the vibe it created in the company was amazing. We’ve done that for every single function here in the head office, at every single store. We went to the distribution centers. We went to call centers. We explained to 100 percent of the people in the company what the strategy was. It took us six months. I wanted our people to hear about the strategy directly from me and from the executive committee, not through layers of management and intermediaries.

“Our people are making the Bloomingdale’s experience different. They are engaging. That’s one thing. The brand mix is also different. This mix of contemporary with luxury, I think is very attractive. And look at our stores — they don’t look the same as others. It’s absolutely not the same experience.” There’s a vibe unlike other stores. The stores are high energy, upscale, pulsating with crisp, sophisticated of-the-moment merchandise displays with bright lighting, and they’re often busy, with a multigenerational draw.

“We want people to feel cozy, warm, to feel connected, to feel this relationship. It’s all about emotions, and that’s exactly why we’re investing and redesigning the look, feel and the aesthetic of Bloomingdale’s, because we want people to feel these emotions, and you won’t feel that anywhere else,” Bron said. “We’re redesigning totally the entire store in a warm way, in a festive way,” Bron said, referencing the 59th Street flagship. “Actually the experience at Bloomingdale’s is not as formal as others. It’s not intimidating. It’s easygoing. You can come in your weekend outfit. We don’t care. Come as you are and feel good.

“There’s always something happening. We’re doing these campaigns three or four times per year. So our next campaign this spring is going to be ‘California.’ We will have another campaign in September, and another campaign for holidays. You don’t see that anywhere else. Each of these campaigns will be bigger and more impactful from a creative standpoint and an execution standpoint.

“There’s a lot to do, and we have to go fast, but the opportunity is here. We have this opportunity to bring Bloomingdale’s to international market standards. It’s an opportunity to really realign the department store strategies with the brand strategies. It’s about more storytelling, and less about pricing and discount and things like that. It has to be vibrant, but without being overwhelming.”

That percentage could change if other aspects of the pair’s relationship change: for instance, if Anthropic purchases more cloud computing power from Amazon, according to a third person with knowledge of the arrangement.

A spokesperson for Amazon Web Services declined to comment on the gross profits figure. “AWS and Anthropic have forged a differentiated partnership where we serve as Anthropic’s primary cloud provider and primary training partner,” the spokesperson said. “This partnership continues to flourish as we work together to push the boundaries in AI.”

Google typically takes a cut of somewhere between 20% and 30% of net revenue, after subtracting infrastructure costs, from resale of its partners’ software, according to a Google employee with knowledge of the arrangement. It’s not clear how much it gets from reselling Anthropic’s AI.

It couldn’t be learned what portion of gross profits or revenue Anthropic shares with Microsoft, which became a cloud provider for Anthropic in November and committed to investing $5 billion in the company.

Anthropic’s executives have said that having partnerships with all three cloud companies gives it an advantage over OpenAI, which resells its AI through Microsoft as well as directly to its customers, because those cloud providers can offer its models to their many business customers, according to a person familiar with the matter.

For the cloud providers, Anthropic and OpenAI represent marquee AI customers that could attract other AI startups to use their services—and more of Anthropic’s cloud business is up for grabs.

As of last summer, Anthropic was generating the majority of its revenue—which it recently forecast would total as much as $18 billion this year—from selling its AI directly to customers rather than through the cloud providers, according to The Information’s analysis of its financial projections.

To run the AI sold directly to customers, Anthropic mostly uses AWS, according to a person with knowledge of the arrangement. But Anthropic could eventually spread the costs of supporting AI it sells directly to customers, known as first-party sales, between the three cloud providers and their own data centers, according to the person who spoke to executives and the person with knowledge of the Amazon and Anthropic arrangement.

Rival OpenAI also shares a portion of its sales with longtime backer Microsoft.

OpenAI pays 20% of its total revenue to Microsoft, but under the terms of a recently renegotiated partnership, the payouts will be more heavily weighted toward the years leading up to 2032 so that the payouts don’t impact OpenAI’s cash flow as much, according to a person with knowledge of the deal. The company has projected paying more than $13 billion in total in revenue share, primarily to Microsoft, this year and next.

Anthropic’s and OpenAI’s payouts follow a tradition of cloud providers earning a commission when they resell other companies’ products. Microsoft, for instance, gets a payment when people buy Databricks software over its Azure cloud.

The cloud providers make money off Anthropic in other ways. In addition to the $80 billion it pays them to run its models, Anthropic pays them for the cost of training its models. The company expects that expense to total as much as $100 billion through 2029. As well as using Nvidia chips, Anthropic also relies on Amazon’s and Google’s chips—AWS Trainium and tensor processing units, respectively.

As of late last year, Anthropic stopped breaking out how much it shares with cloud partners that resell its AI in some of its financial disclosures, instead lumping that figure with other sales and marketing expenses, according to one of the people.

The company expects sales and marketing expenses to rise to as much as $2.8 billion this year and $9 billion next year, according to its winter forecasts. The payouts to its resale partners are expected to be $1.9 billion this year and $6.4 billion next year, according to The Information’s analysis of Anthropic’s most optimistic forecasts for sales and marketing expenses and how much AI resale payouts contributed to past sales and marketing costs.

In the summer, Anthropic projected the payouts for AI resales would be $1.6 billion this year and about $4.4 billion next year.

New York City mayor says ‘drastic measures’ might be needed to fund his proposed budget

Mayor Zohran Mamdani proposed raising New York City property taxes by nearly 10%, having failed so far to persuade New York Gov. Kathy Hochul to increase taxes on corporations and the wealthy.

Higher taxes for rich corporations and individuals remains his first choice, Mamdani said Tuesday as he shared his proposed budget for fiscal year 2027.

If those options are off the table, his budget recommends raising city property taxes by 9.5%, which would generate $3.7 billion. He also called for drawing down the city’s reserves by $1.2 billion to help close a looming budget deficit.

“We do not want to have to turn to such drastic measures to balance our budget,” Mamdani said. “But, faced with no other choice, we will be forced to.”

Mamdani, a Democratic socialist, campaigned on raising taxes on the wealthy and corporations to pay for many of his initiatives such as free child care and free bus service. Increasing taxes on corporations and on the wealthy, however, requires the approval of the state legislature and governor.

Hochul, a Democrat who is up for re-election this year, has opposed raising taxes. She said Monday that the state would steer $1.5 billion to New York City over two years to help address its cash crunch.

“I’ve worked hard to bring in unprecedented levels of money to help the city because the strength of the city affects the strength of the state,” Hochul said Tuesday at an unrelated news conference.

The Mamdani administration had initially identified a budget deficit of about $12 billion over the next two years. After accounting for some revenue adjustments and the additional $1.5 billion from Hochul and other measures, the city is looking at a two-year gap of $5.4 billion.

Raising property taxes to fill the budget hole would affect more than 3 million residential units and over 100,000 commercial buildings, the mayor’s office said.

New York City Council Speaker Julie Menin and City Council member Linda Lee, chair of the finance committee, criticized Mamdani’s plan.

“At a time when New Yorkers are already grappling with an affordability crisis, dipping into rainy day reserves and proposing significant property tax increases should not be on the table whatsoever,” they said in a statement.

Mamdani needs the council’s support to pass his budget and approve any property tax increases.

The Real Estate Board of New York, a trade group, urged the city to first evaluate its spending.

“Using tax hikes of any kind, including increases to an already egregiously regressive property tax system, to raise revenue or plug budget holes is a non-starter,” said James Whelan, president of REBNY.

Hochul said Tuesday she didn’t support raising property taxes and didn’t know if it would be necessary to pass a budget. Mamdani and the city council, however, don’t need Hochul’s approval to raise property taxes.

“That’s between the City Council and the Mayor,” Hochul said. “That’s their prerogative to look at that as an option.”

A federal appeals court rejected Kalshi’s bid for a stay on Nevada’s efforts to block the platform; national debate over industry’s regulation heats up

Kalshi suffered a blow in its battle to remain available in Nevada, as a federal appeals court rejected its request for a stay on the state’s efforts to block the prediction-market platform.

The case is being followed closely as a debate heats up over the proper way to regulate the nascent and fast-growing prediction markets industry. Battle lines have formed between officials at the federal and state level who say buying and selling event contracts on platforms like Kalshi, including on sports, is distinct from online betting and those who see them as one and the same.

Nevada, the country’s gambling capital, has emerged as a key battleground. The state is arguing that Kalshi must obtain gaming licenses to keep operating there. Kalshi had filed a motion to the U.S. Appeals Court in Las Vegas seeking an administrative stay on Nevada’s civil-enforcement case against the company.

Within hours of Tuesday’s ruling, the state Gaming Control Board filed its enforcement proceeding against Kalshi in Nevada state court. The case may ultimately force Kalshi to leave Nevada, says Daniel Wallach, a lawyer focused on gaming regulation. “This was a major setback for Kalshi,” Wallach said

A Kalshi spokeswoman declined to comment.

Kalshi and Polymarket, another leading prediction-markets platform, offer all manner of things to bet on, from the likely attendees at the State of the Union to the high temperature that will be reached in Miami on a given day. A large amount of betting is focused on professional and college sports—the outcome of contests and performance of players—which puts the platforms in competition for the same audience that uses betting sites like FanDuel and DraftKings.

Earlier on Tuesday, the Commodity Futures Trading Commission filed a “friend of the court” brief with the appeals court, arguing that it had exclusive jurisdiction over the commodities-derivatives market, which it stated included event contracts like those offered by Kalshi.

“Event contracts allow businesses and individuals to hedge event-driven risks, enable investors to manage portfolio exposure, and provide the public with information about the outcome of future events,” Mike Selig, the CFTC’s chairman, wrote in a statement. “These products are commodity derivatives and squarely within the CFTC’s regulatory remit.”

For those who sought to challenge the CFTC’s authority on event contracts, Selig wrote on X, “We’ll see you in court.”

Utah Gov. Spencer Cox responded to the chairman’s X feed.

“I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds,” Cox wrote on X in response to the chairman’s remarks. “These prediction markets you are breathlessly defending are gambling—pure and simple.”

Duplicated efforts, fragmented industry and soured collaborations are among reasons region isn’t getting more bang for its defense buck

It was billed as the answer to high-tech U.S. stealth fighters. Instead, an ambitious pan-European project has become a case study into some of what has gone wrong with the region’s defense push.

The French, German and Spanish Future Combat Air System project was meant to build a next-generation aircraft to catch up with the latest U.S., Chinese and Russian models. Now the venture has devolved into bickering between defense companies Airbus and Dassault Aviation—and between Berlin and Paris—over who gets to lead its development, with all sides now questioning its future.

The unraveling collaboration is a symptom of one of Europe’s biggest problems when it comes to defense: While European countries’ spending on the military collectively dwarfs Russia’s and has overtaken China’s, the whole is somewhat less than the sum of its parts. With capitals often giving priority to contracts with national companies, Europe’s armed forces suffer from overlaps and incompatibilities, high prices due to low economies of scale, and a fragmented industry.

One solution has been for several countries to join forces in developing new systems. They have teamed up to build tanks, frigates and missiles. There is also a separate British, Italian and Japanese stealth fighter that could be delivered within 10 years.

“It’s more than essential to have more joint collaboration, it’s a matter of efficient spending of tax money and the credibility of European defense versus the threats that we face,” said Jean-Paul Alary, the CEO of KNDS, which was created through the merger of French and German defense giants.

The FCAS project, which has gone through various iterations for more than two decades, was conceived as a sixth-generation jet fighter, potentially surpassing the U.S. F-35. In addition to advanced stealth, making it much more difficult to detect by the enemy, it is meant to incorporate artificial intelligence and fly connected with a swarm of drones.

The venture, though, took a wrong turn last year, when French plane maker Dassault Aviation, a key partner, said it had to lead the development and construction of the aircraft. Chief Executive Eric Trappier argued that the project needed clear leadership, that Dassault should be able to select its subcontractors, and that it had the best record of developing combat aircraft.

Airbus said it remains committed to the FCAS program. Dassault declined to comment.

Airbus, a cross-European company—much of whose defense business sits in Germany—has pushed back. German politicians and labor unions are increasingly impatient with the French demands. German Defense Minister Boris Pistorius said last week that it “wouldn’t be the end of the world,” if the project didn’t go ahead.

“The Germans want to cooperate but are fed up with being pushed around by the French,” said Nick Cunningham, a defense analyst at Agency Partners.

Some cross-border projects succeed. But too often, they have descended into acrimony as companies and governments argued over specs or who would get the bulk of the contracts. France has dropped out of an earlier joint jet fighter project, the Eurofighter, while collective efforts to develop a long-range drone and a tank have been delayed.

Military spending by European Union member states, the U.K. and Norway could reach up to about $890 billion to $1 trillion in 2030, compared with the $832.3 billion the U.S. spent last year, according to a study by the Milken Institute think tank and Oliver Wyman, a management consulting firm.

Much of this spending is purely national. In 2022, collaborative procurement accounted for less than a fifth of the total spent on defense equipment in the EU, according to the study.

Development costs for weapon projects are vast. For Europe, this means a lot of redundant military spending and less going into research than other regions. In the U.S., research and development accounted for 16% of total military spending in 2023, according to the Milken study, against 4.5% in Europe a year earlier.

There is also a lack of standardization in a region whose militaries may have to fight together. European nations have supplied Ukraine with 11 different types of howitzer firing one caliber, the 155mm shell.

Jet fighters are among the most expensive weapons to develop and are seen as an example of where Europe should but isn’t coming together enough. There are currently three different jet fighters produced in Europe—all a generation behind what the U.S., China and Russia offer.

FCAS was one project that could have filled this gap.

There is something of a pattern for France, the world’s second-largest defense exporter after the U.S., getting blamed for disrupting joint ventures. Italy’s Leonardo abandoned a deal to make a tank with KNDS after the Franco-German company failed to offer enough of a share in the project’s development, according to a person familiar with the matter.

There were many reasons why Leonardo didn’t join, but the company and others are always welcome, said KNDS’s Alary, who added that his company is working on a separate artillery project with the Italian company.

French opposition also nixed an attempt to invite German satellite maker OHB to join the Bromo project—a proposed merger of space activities of Leonardo, Airbus and France’s Thales—a person familiar with the discussions said.

For all the bickering, defense analysts say Europe has little choice but to make such joint projects work if it is to step up as a pillar of NATO and more effectively deter threats from Russia. Some projects have been quietly ticking along, including a tank project and several collaborations aimed at producing long-range missiles.

“We need to combine the special technical and industrial capabilities of our two nations,” U.K. Defense Minister John Healey said on Friday, referring to Britain and Germany cooperating on a long-range hypersonic missile—a field Europe is behind on.

Another way to go is multinational companies. Missile maker MBDA is often touted as the European defense company that works. Britain’s BAE Systems and Airbus each own 35.5% of it, with Leonardo holding the balance. Yet like Airbus, MBDA is based in France and has a French CEO.

European governments are also likely to increase projects where they pool their development budgets and have their national companies produce the resulting weapon. Italian naval shipbuilder Fincantieri and Naval Group in France codesigned a frigate that is made in their own yards and are working on a patrol boat together.

This wouldn’t lead to consolidation but would still generate efficiency, said Pierroberto Folgiero, Fincantieri’s CEO. “What should be here is defragmentation,” he said.

Intimate art fairs and international galleries are competing to be the destination of choice for the Alpine glitterati

Forget the Winter Olympics. The latest battle in the Alps is between the Swiss ski resorts of St Moritz and Gstaad, competing to be the art venue of choice for their well-heeled clientele.

Each seems similar to those of us on lower ground, offering the rewards of five-star hotels, Michelin-starred restaurants and luxury goods boutiques in the wells of their manicured slopes.

Their art offerings are also rich. Both have intimate art fairs, international gallery outposts and seasonal stand-out commissions, as well as home-grown spaces, notably theStable — a gallery in St Moritz’s surrounding Engadin Valley — and Tarmak22, named after the runway that it overlooks at Saanen-Gstaad’s private jet airport.

There are differences. “If you want to explore historic Engadin towns full of storied and grand hotels, bump into artists and their families and have the flashiest après-ski, head to St Moritz. If you want a traditional Swiss town full of delicious food and new projects, go to Gstaad,” says the London-based art adviser Janna Lang, who takes collectors to the region every year.

The higher St Moritz has long held the jet-set gold medal. Its list of legends range from Friedrich Nietzsche to Roger Moore’s James Bond, while artists including Jean-Michel Basquiat and Gerhard Richter are among those who have been inspired by its sublime landscapes. Meanwhile, St Moritz’s vast private jet airport, Samedan, is well-known to the Davos glitterati.

Legendary hotels include the Kulm, now owned by the Niarchos shipping family, and currently displaying a hot pink carousel by the conceptual artist Carsten Höller on its ice rink. The Engadin also boasts the Chesa Marchetta opposite Nietzsche’s house in Sils Maria and now with Paul McCarthy’s bulbous 2004 “Santa Long Neck (Bronze)” standing outside, and Hotel Castell in neighbouring Zuoz (due to close for renovations next month), famed for its art talks and Pipilotti Rist’s sensually-lit Red Bar. Both hotels are owned by Artfarm, the hospitality arm of Hauser & Wirth, which also has galleries in Gstaad and St Moritz: the latter currently has a show of Giacometti’s portrayals of family and Alpine scenes.

Gstaad is fast catching up with St Moritz’s cultural credentials. These were boosted by the Swiss art patron Maja Hoffmann, founder and president of the Luma Foundation, when she launched the site-specific exhibition Elevation 1049 there in 2014 (named after the resort’s altitude in metres). Expanding to St Moritz in 2022, its current project — Gerhard Richter’s glossy “Strip Tower (962)” — is on the Sils Maria snow, though next year returns to Gstaad. Galleries that have opened in Gstaad alongside Hauser & Wirth include Gagosian and Almine Rech. 

The region’s art fairs show a similar trajectory. St Moritz was there first, with Nomad opening in 2018 with just 20 high-calibre exhibitors, including Massimo de Carlo and Eva Presenhuber. “The first edition set the tone for a boutique fair in the area,” says co-founder Nicolas Bellavance-Lecompte. His fair, also in Abu Dhabi and launching in The Hamptons this year, has an emphasis on design, and grew to 34 exhibitors in St Moritz last year. These were down to 18 this year (the fair ran from Feb 12-15), each taking a different room in a former orthopaedic clinic called the Villa Beaulieu. 

Bellavance-Lecompte says that “new fire regulations mean that we had to close some rooms this time” (in response to the New Year’s Day fire in the Swiss resort of Crans-Montana). Exhibitor Rajan Bijlani says that “while it wasn’t quite as crazy as last year, we made some good sales,” notably of furniture by the 20th-century Swiss architect Pierre Jeanneret.

Snapping at Nomad’s heels is Maze Art, a fair group that opened in Gstaad just two years ago and whose exhibitor numbers have doubled to more than 50 this time. The salon, which now operates nine such events around the world, comes courtesy of Thomas Hug, who co-directed Artgenève until 2023, when allegations of fraud and theft ended his relationship with fair owners Palexpo. Hug maintained his innocence though is not commenting on the situation as the investigation is ongoing.

Newcomers to this weekend’s Maze Art in Gstaad range from the antiquities outfit Jean-David Cahn and medieval manuscript specialists Dr Jörn Gunther Rare Books to contemporary art galleries including Thaddaeus Ropac, Lisson and Mendes Wood DM. Vintage watch dealer Karry Berreby features too, while the fair’s sponsors include watchmaker FP Journe, Chanel high jewellery and the auction house Phillips.

Ropac, whose debut includes local hero Not Vital and the photographer Robert Mapplethorpe, finds that while “many art fairs around the world are like big operas, Maze Art Gstaad is chamber music.” 

Zurich dealer Larkin Erdmann is back for the second time with work including a red Alexander Calder mobile and a work on paper by Augusto Giacometti (a second cousin to Alberto’s father). Erdmann says that one thing that Maze has got right for gallerists is its intimate, yet no-frills, format. Held in a central, bespoke festival marquee, “there is no VIP opening, it is free to enter, people just walk in and buy things — and you meet them directly,” he says. Erdmann, who adds that he had six-figure sales in Gstaad last year, is among the exhibitors at Maze’s first fully-fledged fair in St Moritz later this month.

He and the fair’s organisers underline that Maze’s visitors are people who live in the region as much as those there for a swish half-term holiday. Maze’s artistic director, Baptiste Janin, says that “collectors are present not as hurried visitors navigating a packed itinerary, but as residents” (although they may have more than one home).

Lang identifies a younger crop of “great gallerists and curators” among the next generations, notably in Gstaad, making their mark in a region they grew up knowing well. These include Tatiana De Pahlen, granddaughter of dynastic industrialist Giovanni Agnelli. She co-founded Tarmak22 and is now on the sales team at Gagosian in Gstaad. The gallery, which opened a show of the photographer Irving Penn last week, “gets busier and busier every year”, De Pahlen says. Her Gagosian colleague Carolyn Hodler Franks, “a distant relation” to the Swiss painter Ferdinand Hodler, says that Gstaad’s proximity to international schools, such as JFK in Saanen and Swiss boarding school Le Rosey, contributes to its “year-round community” of serious collectors.

With so much art to see and buy, does anyone actually ski? More in St Moritz, which also has the Cresta run — a skeleton-toboggan racing track — for the truly daring. But, Lang says, not so much: “If you want to eat a power bar and throw yourself off a mountain on skis, you go to Jackson Hole [a resort in Wyoming]. But if you want to leisurely ski, lunch and see great art then you go to St Moritz or Gstaad.” 

Blackstone, EQT and CVC make offers for VW’s Everllence unit

Shipping engines and heat pumps business is being valued at between €5bn and €6bn

Volkswagen has attracted bids from top private equity funds including Blackstone, EQT and CVC for its Everllence division, bolstering its plans to sell off the shipping engines unit.

The deadline for initial offers for the business, formerly known as MAN Energy Solutions, expired last week. The division, which produces shipping engines and heat pumps, is being valued at between €5bn and €6bn by prospective buyers, according to people familiar with the matter.

Other buyout groups to have previously shown interest for the unit include buyout firm CD&R and industrial carve-out specialist KPS, the people said, adding that some rival companies had also explored bids.

VW is planning to spin off a majority stake in Everllence while keeping a significant minority holding.

Offloading Everllence would aid VW in its effort to reshape its business in the face of weaker demand and growing competition from Chinese carmakers.

For 2025, Volkswagen said it generated net cash flow of €6bn from its automotive division in 2025, a significantly better figure than the carmaker had expected as it aims to cut costs.

The possible sale of Everllence comes alongside the auction of ContiTech, the belts and hoses business of German automotive parts group Continental. The Hannover-based group is aiming to focus its operations solely on tyres.

The competing deals come as Europe’s automotive industry faces Chinese competition and a slower than expected transition to electric vehicles. One German investment banker said it was “a very rare situation where you have very similar assets in the same country at the same time”.

Continental has stuck to its plans to divest ContiTech this year, despite the sale coinciding with VW’s auction and a profit warning at the unit last month.

ContiTech’s operating profit margin in 2025 came in at 4.9 per cent after a weak fourth quarter, below the company’s target range.

The tyremaker believed there was still a “good deal” to be made for ContiTech and had pitched the unit’s upside potential to investors, a person familiar with Continental’s thinking said.

Plans by Volkswagen and Continental to divest non-core assets follow a similar trend by other major European industrial groups to sell down assets in order to streamline their businesses as they navigate volatile energy costs, Chinese imports and rising costs from environmental regulation.

Such plans have attracted interest from private equity groups, which see an opportunity to substantially improve divisions with further investment.

Last year there were almost €60bn of European private equity carve-outs up to early November, according to data from market researcher PitchBook, accounting for 13.5 per cent of PE deals by value.

Representatives for Volkswagen, Blackstone, EQT, CVC, CD&R and KPS declined to comment.

European airlines call for scrapping of Qatar deal after top official’s dismissal

Lufthansa, Air France-KLM and SAS raise concerns after EU civil servant sacked over corruption allegations

European airlines have called on the European Commission to scrap an aviation deal with Qatar after the senior EU official who had overseen the negotiations was dismissed over corruption allegations.

In a letter to Commission president Ursula von der Leyen signed by the chief executives of the Lufthansa, Air France-KLM and SAS groups and seen by the FT, the airlines highlighted “unresolved concerns” in their latest salvo against the “open skies” pact.

The Commission fired the former director-general for transport Henrik Hololei last month at the conclusion of an investigation into accusations of wrongdoing, including accepting free flights from Qatar Airways.

“As long as questions of corruption, undue influence, and conflicts of interest remain unresolved, the agreement cannot stand untouched,” the airline CEOs said in the letter dated February 6.

“An agreement granting unrestricted access to the EU aviation market cannot remain provisionally applied when the negotiating conditions fail to meet the most basic standards of transparency and accountability.”

The letter, which was also signed by the heads of two aviation unions — the European Cockpit Association and the European Cabin Crew Association — called on von der Leyen to “immediately suspend” the deal.

The two lobbies and the European Network Airlines’ Association, whose members include Lufthansa and Air France-KLM, publicly called for the deal to be suspended earlier this month.

The call to scrap the agreement, which was agreed in 2021, comes as the European Union is trying to build closer links with Qatar.

The EU opened negotiations over a strategic partnership with the Gulf emirate last December. It is also seeking to facilitate more gas deals with the emirate.

Hololei, who had headed up the commission’s transport directorate since 2015, was moved in 2023 to a different department as a senior adviser after the corruption allegations were first reported.

A formal investigation into allegations that he had broken conflict of interest rules was opened in March 2025.

The Commission said at the end of January that it had “concluded a disciplinary procedure with regard to a senior official” and that “appropriate and commensurate measures had been taken”.

An EU official with knowledge of the situation said the person referred to was Hololei and that he had been fired after he took free flights from Qatar Airways for himself as well as family members.

“After nearly 22 years at the Commission, I am obviously disappointed,” Hololei told Politico after his dismissal, adding: “But I’m happy that this long process has finally come to a conclusion.” He could not be reached by the FT for comment for this article.

EU airlines have long been sceptical of the EU-Qatar air deal, which opened up European airspace to Qatar Airways, and have previously called for the deal to be suspended before the conclusion of the investigation.

European carriers argue that the Qatar deal and others like it open the door to unfair competition from non-EU airlines, who do not have to meet the same environmental standards or face limits on state support.

The agreement has been provisionally applied even though it has not been formally signed off by all EU member states.

Germany, France and the Netherlands are among the 12 countries that have yet to ratify the deal.

A Qatari government official said the country “works closely with the EU to support shared goals on a range of important issues”, adding that this was done “through established institution-to-institution channels” and that Qatar operates “in full compliance with international laws and regulations”.

“Any suggestion that Qatar has acted outside these frameworks is unfounded and categorically rejected,” the official said.

Qatar Airways declined to comment.