TheChek News Flow

FT : Private capital zombie firms will pile up in next decade, says EQT chief

Private capital zombie firms will pile up in next decade, says EQT chief

Per Franzén says inability to raise fresh funds may leave many firms only managing existing investments in coming decade

Eighty per cent of all private capital groups could be zombie firms within the next decade, according to one of the industry’s most senior executives, surviving only to manage existing investments because they cannot raise fresh capital.

Only about 5,000 of the 15,000 or more private capital firms that exist today had successfully raised funds in the past seven years, Per Franzén, chief executive of Sweden’s EQT, told the Financial Times.

“How many of these firms will have a successful fundraising also in the next five to 10 years? . . . Probably less than half,” he said. “The number of zombie firms will increase by an additional couple of thousand.”

Private equity groups have struggled to raise funds in recent years after finding it difficult to return cash to their backers because of a dealmaking drought.

Instead, private equity firms have sought to increase the amount of fees they can generate from existing funds, as well as leaning more heavily on continuation vehicles, a tool that buyout firms use to hang on to some assets by selling them to themselves.

Continuation vehicles have exploded in popularity in recent years and enable firms to generate new management fees on assets that they might have otherwise sold to outside buyers.

These structures could help compensate for a lack of fees from new funds. However Franzén said continuation vehicles were not a long-term solution.

“It’s not a sustainable business model to squeeze out fees out of . . . existing funds and to opportunistically raise continuation vehicles,” he said.

“That’s not going to help you attract and retain the best people in the industry,” he added. “At some point, these firms will cease to exist.”

Just 50 to 100 globally diversified firms would capture around 90 per cent of capital flowing into private markets in the next fundraising cycle, the Swedish executive predicted.

As of October, the number of private equity funds to reach “final close” this year was on track to be the lowest in at least nine years, according to Preqin data.

But Rob Lucas, chief executive of private capital group CVC, said that despite the fundraising difficulties the industry faced, there was nonetheless likely to be an influx of capital.

“If you look at the real headlines of the demand for private capital over the next decade or two, it is immense,” he said.

Private capital groups have set their eyes on the US retirement market, where the Trump administration earlier this year issued an executive order that enables 401k saving plans to invest in a range of alternative assets.

Firms are also increasingly targeting wealthy individuals as a new source of cash, including through semi-liquid structures listed on public markets.

“There will be firms that regenerate,” said Lucas. “I do think there’s real scope in the market for new firms to form and for the smaller firms to develop.”

FT : Gold rally puts shine on cyanide producers

Gold rally puts shine on cyanide producers

Suppliers of chemical used to process metal have rapidly expanded production on back of rising prices

Gold’s recent rally has boosted the prospects of cyanide producers as they increase production to meet rising demand for chemicals to process the metal.

Two of the largest suppliers of sodium cyanide, which is used to leach gold specks from crushed rock, said they had rapidly expanded production on the back of rising gold prices and increased mining activity.

Orica, which acquired US rival Cyanco for $640mn last year, plans to accelerate production as North American operators look to restart mothballed gold mines, said Andrew Stewart, head of Orica’s speciality chemicals division.

“We’re enjoying the volatility coming out of the White House,” he said, referring to the trade uncertainty from US President Donald Trump’s tariffs, which has driven much of gold’s record run.

Australian Gold Reagents, another sodium cyanide producer, this year applied to the state government to boost production capacity at its Western Australia facility to 210,000 tonnes a year in the future.

The company, which supplies miners in Africa, Australia, South America and south-east Asia, has already started to raise capacity by 30 per cent to 130,000 tonnes this year.

“Within chemicals, [the sodium cyanide plant] is one of our strongest return on capital investments and will continue to be so,” said Aaron Hood, managing director of Wesfarmers’ chemicals, energy and fertiliser division, which owns AGR.

The price of gold has risen 15 per cent in the past two months and hit an all-time high of $4,381.52 a troy ounce last week before settling at about $4,000 this week.

The sharp rally, partly driven by a dash to safer assets amid geopolitical uncertainty, comes as the mining sector undergoes consolidation and has spurred more mining activity.

Gold groups Newcrest, Northern Star and Gold Fields have acquired smaller rivals in the past two years, while smaller miners have begun to look at gold deposits previously deemed unviable.

Ramoun Lazar, an analyst with Jefferies, said the rally “incentivises gold exploration and, in turn, increases the demand for . . . sodium cyanide given ore bodies become deeper and harder to mine”.

Orica’s history dates to the Victorian gold rush of the 1870s when it supplied explosives to miners. It later became part of UK chemicals group ICI before being spun out in the 1990s. “We started in gold and we’ve gone back there,” said Stewart.

Wesfarmers, which started as a farmers’ co-operative and owns several Australian retail chains, has invested in a wide array of minerals and chemicals, including lithium.

But the sodium cyanide business, which it has owned alongside Coogee Chemicals since 1988, has been a “quiet achiever”, said Hood. “It’s one of our largest export businesses.”

The Australian companies compete with Czech chemicals group Draslovka and Chinese rivals, which make it as a byproduct of nylon manufacturing.

A longer-term threat to cyanide producers could be less toxic alternatives, said Paul Breuer, a scientist at the government research institute CSIRO, who has led a research team to develop an alternative gold leaching product called thiosulphate.

Breuer said government regulations on cyanide use were becoming more stringent — especially around the risk of the chemical entering water supplies — but it has been a struggle to convince the conservative gold industry to switch from a chemical considered effective and robust.

Wesfarmers’ Hood said he was unconvinced that alternatives would make much of a mark given the mining industry’s cost pressures, adding: “If you’re a metallurgist, why would you take the risk?”

FT : London becomes ‘quant’ powerhouse as traders rake in revenues

London becomes ‘quant’ powerhouse as traders rake in revenues

A pipeline of skilled graduates is helping the UK build out its expertise in algorithmic trading

London is establishing itself as a centre for quantitative finance, with a number of trading firms and investors based in the capital becoming multibillion-dollar forces in the market.

Algorithmic trading firm XTX along with quantitative investors Qube and Quadrature have each made more than £1bn in revenues over the past year according to public filings by their UK entities, cementing their positions at a time when London’s status as a global financial hub has been called into question.

So-called “quant” trading firms and hedge funds use mathematical models combined with vast amounts of data and computing power to spot correlations and asymmetries in asset prices and make bets.

They rely much less on human input and, partly because of less onerous regulation, have quietly become some of the most dominant and profitable firms in the trading world.

Some of the biggest quant firms are based in and around New York but there is “absolutely” a quant renaissance in London, according to Raffaele Savi, global head of BlackRock’s quantitative investing teams.

“It’s the combination of great [universities] in the UK and Europe, a good regulatory framework, and tradition,” he said.

A US-based quant hedge fund manager commented: “It’s quite remarkable seeing the rise of London as a quant centre, perhaps even rivalling New York.”

When quantitative trading started to take off in the 1980s, some UK firms carved themselves a niche. One such example is AHL — now owned by Man Group — which pioneered a strategy known as trend following.

This spawned a generation of similar quantitative funds, such as Winton and Aspect.

These days, UK-based quant firms employ a wider range of strategies.

Qube focuses on market making and statistical arbitrage trading, a data-driven strategy based on assessing pricing differences between securities. Net revenues for its UK entity were £2bn last year, up almost sevenfold on 2020.

XTX, led by its billionaire founder Alexander Gerko, uses machine learning to forecast the price of assets including stocks, bonds, crypto and currencies. It made £1.3bn in profits after tax at its UK entities last year, a 54 per cent rise on 2023. Its revenues rose 36 per cent in the same period, hitting £2.7bn last year.

Showing the importance of computing power, it is spending more than €1bn to build its own data centre in Finland, while Qube is building a data centre in Iceland.

Revenues at Quadrature, which was founded in 2010, rose almost fivefold to £1.2bn between 2020 and 2024.

Another London quant business that has been doing well is research firm G-Research, which advises investment firms affiliated to its founder Peter De Putron. Two companies linked to the group that supply research and IT services alone made £712mn combined in the 15 months to the end of 2023, according to UK filings.

People familiar with the firm said its input powered sizeable quant trading revenues. G-Research did not respond to a request for comment.

The growth of these firms in London has been helped by a pipeline of skilled graduates from UK universities — in contrast to the US, where engineering and computing graduates often join big tech companies. Quant groups often sponsor student society events, hackathons and PhD programmes in the UK.

“After the global financial crisis, London as a city had some cracks in it,” said Paul Rowady, founder of trading consultancy Alphacution. “You’re now seeing a wave of lots of very talented and smart people coming through.”

Quant firms can also offer very high pay and a more relaxed working environment than comparable finance or tech jobs.

“Only a handful of people went into big tech in our year, whereas dozens joined market makers or quant hedge funds,” said one recent computing graduate from Imperial College London who now works at a quant hedge fund.

Alvaro Cartea, director of Oxford university’s quantitative finance institute, said almost all his students ended up working at trading firms, on salaries from £250,000 to £800,000.

“If you get offered a salary less than £250K, you’re kind of the sad guy,” he said, adding: “Nobody I know interviews for JPMorgan, Goldman Sachs . . . not once do I hear anybody entertain any of these traditional investment banking jobs.”

FT : No new planes for UK if taxes keep rising, warn Ryanair and Wizz Air

No new planes for UK if taxes keep rising, warn Ryanair and Wizz Air

Low cost airline bosses are braced for increase in air passenger duty

Two of the UK’s largest low cost airlines have warned that raising taxes on the sector will push carriers to shift planes out of Britain in the future.

Senior executives from Ryanair and Wizz Air have separately warned about the risk to UK growth from increasing charges in the Budget.

Airports are concerned that a feared jump in business rates will force them to raise prices, while airlines are braced for another increase in air passenger duty, which is already the highest in the world.

“It’s definitely a risk that aviation in the UK could be very growth stunted,” said Michael Delehant, chief operations officer at Wizz Air.

He cited Wizz’s recent decision to pull all its flights from Vienna over rising airport costs, and relocate planes over the border in Slovakia’s Bratislava.

“When you’re at the price sensitive part of the chain, you have to and you can’t just accept [higher prices],” he told the Financial Times. “Vienna was the perfect example. That’s your case study.”

In a separate warning, Eddie Wilson, chief executive of Ryanair, said that raising air passenger duty would result in the airline using fewer new planes on UK routes.

The comments follow Gatwick’s warning last week that a sharp rise in business rates at the airport could jeopardise upcoming investment decisions, including its expansion to build a second runway.

Wizz flies from both Gatwick and Luton, and has 19 aircraft based in the UK. It is the airline’s second largest centre of operations outside of Hungary.

Delehant warned that Gatwick’s prices were already “unsustainable,” with the airport the most expensive in Wizz’s network.

If the company is “trying to offer its ultra-low fares, and already before you leave the gate you’re paying €50, €60, it’s not sustainable,” he said. “People won’t buy it.”

Trade body Airports UK has calculated that each plane stationed in the UK supports around 400 jobs and adds some £27mn of economic benefit to the economy each year.

While airports are concerned about rising business rates, ministers have already raised Air Passenger Duty that airlines pay to record levels. The industry is braced for an inflation-linked rise this year, although there have been reports that Reeves could look to raise it even higher.

While the Labour government wants to decarbonise the UK’s aviation sector, Reeves has also been a vocal proponent of airport expansion as a way of injecting growth into the economy.

Wilson told the FT that Reeves raising air passenger duty any further would see Ryanair divert future aircraft orders to cheaper locations.

He said the airline has cut some services from Newquay in Cornwall in favour of Sweden, which has abolished air passenger duty. The tax changes mean the gap between the two destinations was €20. “When our average fair last year was just over €50, that’s massive,” he told the FT.

Ryanair has 300 new aircraft on order, and will allocate them across Europe according to the most profitable routes it can fly. This means that growth earmarked for the UK would be diverted elsewhere if taxes rise, he warned.

Airlines are “the most mobile investment in the world”, he added. “But the dull grey people in the Treasury don’t see that, they think the aeroplanes are just there. It means the decision to allocate growth won’t go where you have rising taxes.”

FT : EU set to expand supervision of stock and crypto exchanges

EU set to expand supervision of stock and crypto exchanges

Esma to also settle disputes between large asset managers, according to proposals

The European Commission is drawing up plans to expand central supervision over key financial markets infrastructure, including stock exchanges, crypto exchanges and clearing houses, in an effort to eliminate fragmentation in one of the single market’s core areas.

The move is part of a broader effort to bolster the EU competitiveness in relation to the US by ensuring that companies can access funding and scale up on the continent rather than across the Atlantic. The current landscape, with dozens of national and regional regulators and hundreds of trading and post-trading institutions, raises the costs for cross-border trades, a significant obstacle for start-ups to scale up in Europe.

A single supervisor modelled after the Securities and Exchange Commission in the US is seen as a significant step to completing the EU’s “capital markets union”. The move is backed by ECB President Christine Lagarde and her predecessor Mario Draghi, who mentioned this in a report he drafted last year on improving Europe’s competitiveness.

The commission has said it will put forward proposals in December for a “markets integration package”.

The most contentious idea is to expand the powers of the existing European Securities and Markets Authority (Esma) to also cover “the most significant cross-border entities”, including stock exchanges, crypto assets service providers, and post-trading infrastructure such as central clearing counterparties and central securities depositories, according to people briefed on the matter.

The commission will also call for Esma to have the last say on disputes between large asset managers. While not directly in charge of supervision, Esma would issue binding decisions in case of disputes between national supervisory authorities, the people said.

Central supervision has long been opposed by Berlin, but the government led by Chancellor Friedrich Merz has recently signalled openness and is exploring options together with France, a strong backer of the capital markets union. The Financial Times previously reported that the asset management industry was among the areas where the German government could envisage Esma supervision, but not crypto exchanges.

Other capitals, notably Luxembourg and Dublin, are still balking at the idea of handing over oversight powers to the Paris-based authority. They argue that the move could disadvantage their national financial sector, as they remain sceptical that EU regulators would act in the best interests of smaller nations.

“We would like to have [supervisory] convergence rather than creating a costly and ineffective centralised model,” said Gilles Roth, Luxembourg’s finance minister.

One European exchange group said it saw little benefit in shifting oversight of crypto assets service providers to Esma, citing a good working relationship with its national supervisor, and expressing concerns about higher compliance costs and potential Esma over-reach.

“Expanding Esma’s supervisory responsibilities would mean higher fees paid by the industry,” said Marin Capelle, policy adviser at Efama, the fund industry lobby.

The commission said it was “still exploring the potential of EU level supervision in relation to some critical infrastructures, such as central counterparties, central securities depositories and trading venues, as well as in relation to big cross-border entities such as asset managers”.

“We are considering different models for single supervision . . . from the perspective of balancing the EU interest with local expertise,” it added.

>>> Barron’s Weekend Summary

Cover:

-Boeing's trajectory shifted dramatically from a success story to turmoil, particularly following the crashes of two 737 MAX jets in 2018 and 2019, resulting in significant operational and reputational setbacks. By the end of 2024, Boeing had delivered only 265 737-model jets, substantially below its targets and markedly fewer than the 396 delivered in 2023. The stock price had fallen to 55% below its peak in March 2019. However, the appointment of Kelly Ortberg as CEO in July 2024 marked a turning point. Ortberg, an experienced aerospace engineer, has revitalized Boeing by enhancing supplier relationships, restructuring management, reallocating development resources, and prioritizing proximity to production sites. His leadership has spurred a 7% increase in stock value since his appointment, indicating a potential recovery for the company as investors regain confidence in its future prospects.

Interview:

-Rithm's CEO, Michael Nierenberg, highlights that commercial real estate prices in these cities remain approximately 40% lower than pre-COVID levels, making it an appealing investment. He expects the demand for office space to grow as employees return to work, supported by a favorable economic environment characterized by reduced interest rates and strong leasing quarters. Big banks and tech companies are encouraging employees to return to the office, with some advocating for a full five-day work week. In line with this trend, Rithm Capital, a real estate investment company offering a dividend yield above 9%, plans to acquire Paramount Group, a real estate investment trust, for $1.6B. This acquisition is based on the optimism that white collar workers will commute more, especially in New York and San Francisco.

Tech Trader:

-Shares of Meta Platforms fell 11% following their earnings report, despite a 26% increase in sales for the third quarter. This decline was attributed to rising expenses from significant investments in artificial intelligence (AI). CEO Mark Zuckerberg noted that capital expenditures forecast for 2025 had been revised higher for the third time this year, with expectations for continued spending into the next year. He expressed confidence in the core business's returns, emphasizing the importance of not underinvesting. However, investors showed increasing concern as total costs rose 32%, outpacing revenue growth, leading to a decrease in the operating margin by 2.7 percentage points. Analysts anticipate a rise in depreciation expenses—expected to increase by 48% next year—transforming Meta into a more asset-heavy company that will impact its financial structure for years. The expense growth stems from a hiring surge of AI researchers at high salary levels, as reflected in the 35% increase in research and development costs and an 18% rise in share-based compensation within three months.

The Trader:

-Vertex Pharmaceuticals has faced significant challenges following the failure of its next-generation painkiller, VX-993, in a Phase 2 drug trial, leading to an 11% drop in stock prices since early August. However, there is optimism surrounding its non-opioid painkiller, Journavax, and the robust performance of its cystic fibrosis business. Upcoming third-quarter earnings reports are anticipated to reverse the negative trend, with analysts projecting sales growth exceeding 10%, reaching approximately $3.06 billion, primarily driven by the cystic fibrosis segment, while Journavax is estimated to contribute about $23 million. Vertex has a consistent track record of exceeding earnings forecasts, having surpassed sales expectations in 16 of the last 20 quarters. Analysts expect this trend to continue, with cystic fibrosis products particularly highlighted as strong performers.

-Defensive stocks, typically expected to perform well during economic uncertainty, have underperformed significantly in 2023 despite slowing job growth and concerns around the economy. The Consumer Staples Select Sector SPDR ETF has returned only 1.7%, while the S&P 500 has gained 18%. The low performance of defensive stocks is peculiar given the current sluggish manufacturing sector. However, market analysts suggest this trend may reverse soon, as the price ratios of defensive stocks compared to economically sensitive ones are at historic lows, potentially signaling a forthcoming catch-up for defensive sectors.

Features:

-Investors looking for non-AI related stocks should consider Boston Scientific. The growth in AI stocks raises concerns over potential market corrections, thus prompting a shift to medical-device companies that continuously innovate for patient care. Companies like Intuitive Surgical and Abbott Laboratories have experienced significant stock increases due to their advancements. In particular, Boston Scientific is positioned to benefit from the expected growth in cardiac procedures, projected to reach about $92B by 2030. With forecasted sales of $20B by 2025—$13B of which will come from its cardiovascular segment—Boston Scientific's stock, currently trading at $100, might have room for growth as analysts expect a 13% rise in cardiovascular product sales next year. The company has a history of exceeding earnings estimates, further strengthening investor confidence.

-President Trump and Chinese leader Xi Jinping are set to meet to devise a strategy for mending US-China relations, potentially involving reduced tariffs on fentanyl-related products from China. This meeting concludes a week of negotiations aimed at finalizing trade agreements. Key topics include U.S. tariffs on fentanyl, China's resumption of U.S. agricultural purchases, mutual shipping fees, and export controls. Additionally, the meeting may address Beijing's approval of TikTok's divestiture and U.S. language surrounding Taiwan. Despite hopes for a significant agreement, experts suggest a modest deal may emerge, focusing on maintaining rare earth shipments and avoiding further tariff increases.

Europe:

-Novo Nordisk is aggressively pursuing a $6B cash acquisition of the anti-obesity biotech Metsera, surpassing Pfizer’s $4.9B offer, which has escalated their bidding war. Pfizer characterized Novo's bid as an attempt to suppress competition and circumvent antitrust laws, highlighting Novo's dominant position in the market. Novo's shares have plummeted over 60% since mid-2024, raising questions about its stability. The bid indicates a bold, possibly desperate move by Novo’s new leadership amidst ongoing challenges, including a hostile regulatory environment, as the Trump administration looks to lower drug prices. The situation intensifies as Novo engages with Pfizer, a rival noted for strong ties to the current administration.

Emerging Markets:

-Argentina's recent parliamentary elections saw right-wing leader Javier Milei of La Libertad Avanza party emerge victorious, a development viewed positively by U.S. Treasury Secretary Scott Bessent, as it ensures repayment of a $20B loan. This election outcome may signal the decline of the Peronist party, which has historically driven Argentina into economic turmoil and frustration among citizens. Despite Argentina’s recurring patterns of economic collapse since its independence in 1816, the nation has occasionally pursued reform, such as in the 1930s and the 1990s under President Carlos Menem. However, these reforms were often followed by a return to unsustainable political choices that led to further crises, including a significant default in 2020. In contrast, Milei’s campaign promises included a stark message against financial irresponsibility and a radical proposal to cut government spending to combat hyperinflation, which approached 200%. The electorate's support for Milei, characterized by his unconventional appearance and promise of immediate pain for future gain, marks a shift in voter priorities.

Commodities:

-Rare earth materials have become a focal point of concern for investors due to their volatility and implications for American manufacturing amid ongoing trade tensions. As of Tuesday trading, shares of leading US rare earth miners, such as MP Materials, USA Rare Earth, and Ramaco Resources, have seen a significant average increase of over 210% this year, despite a nearly 30% drop in the past week. The stocks were anticipated to retreat further ahead of potential US-China negotiations regarding rare earth export controls, following Chinese threats to limit exports, highlighting China's dominance in the sector with around 85% of global processing capacity.

While the global utilization of rare earth elements is currently modest, around 390,000 metric tons of rare earth oxides were mined in 2024, demand has surged by 350% over the last decade, driven by their essential role in various applications from electronics to defense. Recognizing the need for a stable supply, the US Defense Department secured a comprehensive deal with MP Materials in July, which involves an equity stake and a price floor for rare earth products, aimed at diminishing reliance on Chinese sources. In addition, Ramaco Resources leverages its metallurgical coal operations to contribute towards achieving rare earth independence.

Streetwise:

-Tesla, although primarily recognized as a car manufacturer, also identifies itself as a "physical AI" company engaged in two emerging AI ventures: operating robotic taxis and deploying humanoid assistants in homes and businesses. These initiatives currently contribute minimally to Tesla's income and stock market valuation. Recently, the company's visibility has diminished, particularly as CEO Elon Musk stepped back from the public eye after a controversial stint leading the Department of Government Efficiency—an experience that drew mixed evaluations regarding its taxpayer savings impact. Investors expressed concerns over Musk's political engagements and their potential repercussions on Tesla's brand. According to Wedbush Securities analyst Dan Ives, this situation has led to significant stock declines, with estimates of 15%-20% permanent demand loss attributed to perceived brand damage. Tesla's market value has plummeted to approximately $777B, resulting in its ranking dropping to 10th among major tech companies, significantly overshadowed by competitors and even trailing behind firms involved in unrelated industries.

WWD : How U.S. Tariffs Will Impact the French Beauty Industry in 2026

How U.S. Tariffs Will Impact the French Beauty Industry in 2026

Export sales of 620 million euros could be lost and 10,900 jobs directly or indirectly threatened.

U.S. tariffs will take a big bite out of the French beauty industry, both export- and employment-wise.

A year after the election of Donald Trump as president of the United States, the French beauty association Fédération des Entreprises de la Beauté, or FEBEA, unveiled a study, which was carried out by Asterès, that models the impact of U.S. customs duties on French cosmetics exports for 2026.

Fragrance and cosmetics are the second-largest export after aeronautics for France. The U.S. is the most important export country for French beauty products. In 2024, almost 3 billion euros’ worth of products were exported to the country, half of which were fragrances.

“The conclusions of the Asterès study are clear: While customs duties for exports of cosmetics products to the U.S. were zero (0 percent) in 2024, the combination of customs duties of 15 percent on cosmetics (July 28, 2025) as well as additional customs duties of 50 percent on the metal components of packaging (Aug. 19, 2025), associated with the depreciation of the dollar against the euro, would lead to a 21 percent drop in French exports to the United States in 2026,” FEBEA wrote in a press release. It added that represents a sales loss of 620 million euros.

As a result, this could lead to the elimination of 2,700 direct jobs in exporting cosmetics companies and 8,200 indirect jobs — suppliers, logistics, packaging and communication, for instance — for a total of 10,900 jobs at risk, FEBEA continued.

“In 2024, the French cosmetics sector ranks second with a trade surplus vis-à-vis the U.S. of 2.4 billion euros, thanks to 2.9 billion euros in exports,” FEBEA wrote. “It’s a strategic position that is therefore today particularly threatened by the introduction of these new tariff barriers.”

The impact of custom duties and the dollar’s depreciation — of minus 4 percent — on French cosmetics exports is already starting to be felt. Notable already: an immediate drop in exports. In first-half 2025, they’ve already sunk by 12.7 percent, which is directly linked to the stockpiling in anticipation of tariffs by large groups at the end of last year, according to FEBEA.

“A multiplier effect on employment is to be feared,” the association continued. “In fact, each direct job in the cosmetics industry generates on average three indirect jobs. Thus, the loss of 10,900 jobs impacts the entire value chain, from production to distribution.”

FEBEA said that with 35.6 billion euros of sales in 2024 and 300,000 direct and indirect jobs in France, the cosmetics industry is an industrial and cultural flagship that contributes to the economic sovereignty and international influence of France.

“However, the increase in American customs duties comes on top of other threats already identified by FEBEA: regulatory inflation in Europe, exacerbated competition from Asian players and the multiplication of trade barriers.”

“Faced with this shock, we cannot remain spectators,” said Emmanuel Guichard, general delegate of FEBEA. “This summer, FEBEA launched a Beauty Industry Package, an emergency European action plan intended to protect the competitiveness and future of our industry.

“We ask our European and French decision-makers to give us the means to maintain our global leadership, without unnecessarily complicating our action framework,” he said.

WWD : Canada Goose Unveils Paris Flagship as the First of Its ‘2.0’ Luxury Retai

Canada Goose Unveils Paris Flagship as the First of Its ‘2.0’ Luxury Retail Concept

The Champs-Élysées flagship is the first location of Canada Goose’s new retail format and a key step in its strategy to grow direct-to-consumer sales and expand its European footprint.

Exterior of the flagship on the Champs-Élysées

PARIS — Canada Goose is ready to soar.

The outerwear brand has unveiled its ambitious retail concept with the opening of its flagship on Avenue des Champs-Élysées, marking the kickoff of its reboot as “Canada Goose 2.0.”

The location, which officially opened Thursday, lays out a global design concept to redefine its retail stores as upscaled and immersive. The opening also sets the groundwork for a renewed push into Europe, a region chief executive officer Dani Reiss frames as both its historic base and a key growth territory.

Despite the Canadian name, “Europe is where it started for us,” Reiss told WWD, with Italy and Scandinavia early territories for its parkas.

“We began building the consumer side of the brand here 20 years ago, and now it’s time to bring this luxury brand back to Europe.”

It took about 18 months to transform the 3,200-square-foot location from a former mobile phone store into an immersive, conceptual design space. The brand worked with Oslo-based architecture firm Snøhetta, best known for its modernist work on major landmark buildings such as the Beijing Library, Shanghai Grand Opera House and the St. Louis Symphony Orchestra.

“To show up in this kind of way, in Paris, is really important as the next step in being the only global luxury brand from Canada,” he said. “It’s a dream come true, honestly.”

Local French oak was used for the walls and fixtures, echoing the Canadian company’s sustainability commitments, while aluminum shelving has been engineered without glue for easy recycling. The space also integrates light sensors that adjust brightness according to rain or shine, a nod to the natural world that is part of the brand’s outdoor heritage.

The result is a visual and tactile contrast that recalls ice and trees, which references both the brand’s Arctic roots and its new positioning in the global luxury landscape.

The flagship houses art from the company’s extensive collection in Toronto, including a stone-and-copper sculpture by Michael Belmore and an etched wall fresco by Inuit artist Ningiukulu Teevee. Seating has gentle curving to mimic parka interior quilting, while pieces from the brand’s archives are exhibited museum-style, including a jacket designed for Canadian mountaineer Laurie Skreslet.

Downstairs, a private VIC suite — the brand’s first in Europe — has been designed to support its growing clienteling program aimed at cultivating high-spending clients.

Asked about speculation regarding a potential sale by its majority shareholder Bain Capital, Reiss dismissed knowledge of any internal movement on the corporate side. “We’re not working on anything. There are no processes that I am aware of,” he said. “I can’t speak for them, but I’m not personally participating in any process…it’s not something that’s gonna be worked up at all.”

Paris is the first of two major openings for the brand, with Milan slated for the end of November.

Paris now serves as its global design hub, home to creative director Haider Ackermann and more than 30 employees. While Toronto remains the base, those design teams now report into Paris.

Ackermann, who joined the brand in 2023, oversees both capsule and main-line collections, including Snow Goose, a limited series inspired by archive pieces from the company’s early years. “He went back to the archives and reengineered some of our older, more iconic pieces,” Reiss said, describing Ackermann’s aesthetic as “strategic and very particular.” A fourth Snow Goose drop is expected later this year, and Reiss indicated that future collections will be increasingly Ackermann-coded.

Best known for its parkas, Canada Goose has broadened its offer into knitwear, fleece and sportswear, categories Reiss says are outperforming core lines. Eyewear, launched this year, has also shown strong initial results. “Our new products are growing faster than our core products, which also continue to grow,” Reiss said, with fleece products a standout.

The flagship highlights the company’s ongoing shift from wholesale to direct-to-consumer retail, a strategy that began about a decade ago. Canada Goose was a fully wholesale brand before it started online sales. Reiss said at that point he couldn’t even imagine having a store, but with one, then two, his mindset shifted. “I realized how powerful a direct relationship with customers can be,” he said.

Now about 80 percent of sales come from its DTC channels, including e-commerce and nearly 80 stores worldwide. The company does not break out online versus in-store figures, but digital remains “a very material number,” said Reiss.

Physical retail is key to the brand’s expansion strategy, however, as the best way to “feel the product.” But while some competitors have hundreds of stores, Reiss believes in quality over quantity in retail spaces.

“Brands and products that succeed make people feel something,” he said. “This store is another way of doing that.”

Canada Goose has been opening about eight to 12 stores annually, and plans to keep near to that rate, though Reiss stressed that depends on securing the right locations alongside luxury peers.

“We don’t force the pace,” he said. “It’s about finding the right space, where our peers are and where we want the brand to be going.”

Despite being just steps away from brands like Christian Dior and Louis Vuitton on the famed shopping street, Reiss believes the brand is complementary and not competitive with big French labels. He frames Canada Goose as less as a fashion house than a functional luxury brand.

“We’re not a fashion brand — we’re a clothing brand,” said Reiss, noting the label’s enduring focus on performance.

It’s the brand’s Canadian core that separates it from traditional luxury competitors, and he would place it more along the lines of Range Rover than runway. Which means that while the brand presented the upcoming collection in its atelier during the most recent Paris Fashion Week, there are no plans for a formal show.

“We can express ourselves in different ways. And I think that the authenticity and the functionality of who we are actually separates us from the pack,” he said.

The Canadian approach has also exempted the brand from some of the U.S. tariffs, as the wholly-made in Canada products qualify for an exemption under the current North American trade treaty. Some products, like knitwear, are made in Europe but it has not affected pricing in the U.S.

“There are some impacts here and there,” said Reiss. “But it’s negligible effect.”

The company reported strong first-quarter results earlier this year, with comparable store sales up year-over-year. That trajectory has continued into the second quarter, Reiss indicated.

“We knew after Q1 that going into Q2 we had great momentum. Going into Q2 things were looking really good. The beginning of Q2 was really strong,” he said. Financial results will be released Nov. 6.

“When we look at our metrics, we see that we’re outperforming many other major brands in our category, in the higher end apparel category,” he added.

Alongside product diversification, Canada Goose is deepening its approach to clienteling. The VIC suite is part of a broader strategy to elevate the brand through personalization and luxury positioning. “Customer service is more important than it’s ever been,” Reiss said. “Real service is knowing what an individual wants — whether they want a full tour, a private appointment, or just to buy one thing and leave.”

Client demographics vary across markets, with global sales roughly balanced between men and women, though the brand sees stronger male sales in southern Europe and stronger female sales in northern markets.

“Historically we used to be known as a jacket brand, then an outerwear brand, and we are known for making the best in kind, best in class, products,” he said. “I don’t think we’re going to be known as a luxury brand, but I think we’re moving out of [outerwear brand] and just becoming known as an iconic Canadian brand, period.”

The Information : Clara Wu Tsai’s Plan to Build the First $1 Billion WNBA Franch

Clara Wu Tsai’s Plan to Build the First $1 Billion WNBA Franchise

The co-owner and governor of the New York Liberty discusses surging WNBA valuations, the rise of sports streaming and negotiations with the league’s players over a new contract.

The Takeaway

Clara Wu Tsai believes the New York Liberty could become the first $1 billion WNBA team.
The Liberty is building a new $80 million practice facility for players.
WNBA revenues haven’t caught up viewership growth.

When Clara Wu Tsai and her husband, Alibaba co-founder Joe Tsai, bought the WNBA’s New York Liberty in 2019, one of her first priorities was convincing her fellow team owners they needed to spend money to see real growth in the sport.

“For so long, we felt that the owners in the league have been operating from this scarcity mindset and just trying to save money,” Wu Tsai said earlier this week at The Information’s Women in Tech, Media and Finance conference in Yountville, Calif. “But that’s not how you grow.

“We’re spending money in order to grow,” said Wu Tsai, who is the governor of the Liberty and also co-owns the NBA’s Brooklyn Nets with her husband. “That’s a mindset.”

The latest example of the Tsais’ willingness to pump money into the Liberty is a new $80 million practice facility for the team under construction in Brooklyn’s Greenpoint neighborhood. Wu Tsai discussed that investment, the surging valuations of WNBA teams (including her own) and other topics in an interview at the WTF conference conducted by Jessica E. Lessin, the founder and editor in chief of The Information.

Here are excerpts of that interview, edited for length and clarity. The interview took place on Wednesday, ahead of Friday’s agreement between the WNBA and the players association to extend their negotiations over a new collective bargaining agreement for 30 days.

Jessica E. Lessin: I like starting with news. The agreement with the players—the negotiations are continuing, there’s been a [proposed] extension. What can you share about that process and what do you hope is the outcome?

Clara Wu Tsai: Well, we’re right in the thick of it, so there’s very little that I can say. What I can say is just sort of explain what the [collective bargaining agreement] is.…It’s the framework for salaries, benefits and travel standards and basically the working conditions of all the players in the league. It’s essentially the biggest piece of the cost structure of the league. It’s very important.

If we get this right…the salaries and the benefits of the players will grow, but at the same time, we’ll be able to have a sustainable model so that teams and the league can be profitable and also scale the business in the way that we’re actually ready for it to scale right now.

You said you want to build the first billion-dollar WNBA team. What does it take to get from here to there?

First of all, it’s going to be a lot easier to get from $450 [million] to a billion than [it was to get] from zero to $450 [million].

And $450 [million] is the most recent valuation, right?

Yeah. What it takes is just a continued trajectory of growth. We’re very positive that that’s going to happen. In fact, I actually think there might be more than one WNBA team who actually reaches a billion-dollar valuation in the next five to 10 years. It’s obviously based on revenues. We look at the trajectory of revenues, and for the last three to four years, we’ve been growing revenues on the order of 20% to 80% on all the key metrics. We fully expect all of that to continue.

What makes the WNBA exciting is there’s a lot of room for monetization because the revenues haven’t caught up with the viewership. When you look at national broadcast viewership of the WNBA, it’s about 30% that of the NBA. But when you look at the percent that the WNBA has of the media deal, we’re 2%. Even when the new deal kicks in, we’ll be 4% of it. If we grow to some sort of parity on sponsorships and media, on a per-viewer basis, we could easily double our revenues, which would also mean that we would double our valuation.

On the team level, it’s really important that we also start to price at market value. And so an example is sponsorships. We’ve now set some sponsorship floors and some minimums, and we’re just aligning with partners who have the scale and also the ambition to grow with us. We’re doing the same thing on ticketing, especially for our courtside and our premium seat holders. We’ve actually improved the entertainment a lot, and we’ve improved our [food and beverage]. But we haven’t raised prices. It’s now time to align pricing with the value that we’re providing.

Why did you buy the team?

In 2019, we bought the Brooklyn Nets and the Barclays Center. In 2017, the previous owner of the Liberty put it up for sale and then got a little impatient, and in 2018, [they] moved them to play at Westchester County Center from Madison Square Garden. That wasn’t a good look for the league. It made the league really nervous.

The commissioner of the NBA came to us and asked us to take a look because by that point, we’d bought the Brooklyn Nets and we had the arena. It does make sense for the owner of [the Liberty] to have an arena, because you need a big stage for these women to play. We took a look and the numbers weren’t good. I would call it a distressed asset in the pure definition of the term. But we saw some good fundamentals.

We knew that we were going to lose money because the first thing we did was move them to Barclays Center. They were playing to crowds of 2,000 in Westchester. Barclays sits 18,000. We thought, OK, we’ll lose money, but we just didn’t know for how long.

We started to invest in facilities and in player health. And then when the biggest free agent became available in 2023, I went to Turkey to talk to Breanna Stewart. I basically told her that in order for the league to grow in New York, it needed New York to be a strong franchise. I wanted her to join me to just elevate the standards of the league. It worked. She joined us. She brought a couple other stars with her. In four years, we went to the finals for the first time in 20 years, and then in the fifth year, we actually won a championship.

Let’s talk about this wild streaming media rights landscape at the moment. How do you take advantage of that, both on the revenue side but also in terms of maximizing viewership?

Wu Tsai: I haven’t quite seen [NBA broadcasts from] NBC yet. I’ve been really impressed with the game presentation that I’ve seen from Amazon Prime Video, who is one of the new media partners in the new media deal.

A little bit less than half of all sports viewership is actually through streaming right now. That’s just streaming on a TV screen. If you actually add streaming on a mobile device or a laptop, the share is even more than that. This is where the next generation of fans lives. The second key piece of information is that streaming has very much closely reached broadcast scale.

If you look at football, for example, like Thursday night football on Amazon Prime this year, they set a brand-new record in viewership for a regular season game. They had 18 million viewers on average. When you look at the viewership of NFL games in a regular season for a linear network like a CBS or a Fox, it’s 21 million. It’s very, very close. I think you can say that streaming is not really complementary at this point. It’s a premier destination. It’s at broadcast scale and it has global reach. Just to see the way that Amazon has approached game presentation, they’ve made quite an investment, they paid quite a lot for the rights.

What are they doing differently?

There are some interesting tech-enabled elements that make the experience more interactive and also more educational. They have an LED regulation half court, and they have former star players like Dirk Nowitzki and Steve Nash and Udonis Haslem and a few others actually go. They’ll break down defensive plays on this LED court…that’s, like, really bringing you on the inside. The game analysis is really good. They’re layering data and odds for sports betting…on their broadcast as well.

What about tech outside the broadcast—are you adopting it for your players, for your fans?

In the arena, for sure. When you think about what the future is of sports and entertainment, it’s definitely a friction-free experience. That means biometric entry. It means mobile ordering. It means more personalization. It means real-time data loops and feedback. We implemented face authentication for faster entry, and we’ve upgraded audio and lighting. We introduced haptic devices for the blind.

From your perspective, is there too much capital chasing women’s sports? Is there not enough capital chasing women’s sports?

There is so much investor demand for women’s sports, but in particular for the WNBA. I think it’s because it’s the most mature women’s professional league right now. It has the best infrastructure, it has great talent, it has a pipeline of talent coming up. People probably see this gap, this monetization potential between the viewership and the revenue.

There’s a lot of people who want to get into the league and think of it as a good investment. There will also be scarcity. We’re going to add two teams this year and two more teams after that. By 2030, there’ll be 18 teams in the league. It’ll be kept at that for a little bit because we need to sort of absorb all of that. But as a result of that scarcity, there are a lot of people who want to be in it.

What about private equity? We’re seeing that as a big trend. Is that playing out in basketball?

Definitely. Maybe two-thirds of the NBA teams have some bit of private equity in it. On the WNBA side, I know there were private equity companies that were part of the expansion bids.

I think that private equity has really been transformational for all sports team owners. Because it allows for liquidity…without owners having to relinquish control. Previously, it was really media rights that were propping up valuations in the league. It’s really now private equity that’s…going to cause valuations to stay healthy.

You said earlier you knew you were going to lose money for a long time. Are you making money yet?

That will always depend on how long your postseason is. We had a bit of an early exit [this season]. This is the thing—the profitability is very fragile. And again, as I said earlier, it’s investment-led growth…the capital investments, like we just announced, building an $80 million, 75,000-square-foot practice facility in Greenpoint. Why? It’s going to be incredible. Why? Because the players deserve it.

This is a place where we’re going to fit it out with biomechanics labs. We’re at that point—speaking of AI—where if a player said, ‘I really wanna be known for my hang time, or I wanna dunk, or whatever,’ we could figure out with all the motion capture and AI…and biomechanical data from the video. We could…

Make me an NBA player? Probably not.

If someone said that’s what they wanted to do, we could tell that person what exercises or what muscles they needed to work in order to actually achieve their goal.