From Counterfeiting to a Legal Battle: LVMH Had an Intense Week
Hello and welcome to the 22nd issue of moderated, a newsletter created to dive into insights and phenomenons in the Fashion Industry. It also has a curation and summary of the most talked last week’s events of the industry, offering further readings for more details.
If you are new here, welcome! I hope I can somehow help you to keep up with the fast-paced Fashion Industry.
If you haven’t subscribed yet to receive a weekly issue by e-mail, you can do it just by clicking below.
In this week’s moderated, I got overwhelmed by the amount of news around the LVMH group and brands. Therefore, I saved a whole section to present the many events that LVMH went through last week, from counterfeit schemes to a massive legal battle.
But before we jump into the main section, check the last week’s recap of the Fashion Industry.
Last Week’s Recap
Courrèges Hires New Artistic Directors
Nicolas Di Felice was appointed as the new Artistic Director of the French brand Courrèges. Di Felice, who previously worked as a senior designer at Louis Vuitton, will present his first collection for Courrèges in March 2021. Only four months ago, Courréges had announced its new CEO Adrien Da Maia, who Di Felice will report to.
…
StockX Co-Funder Josh Luber Leaves Company
Josh Luber, the co-founder of the unicorn sneaker reseller StockX, announced he is leaving the company. Luber was the face of StockX, promoting the platform’s innovative sneakers-as-stock approach. After the company achieved a US$1 billion valuation in 2019, Luber was replaced as CEO by Scott Cluter, who had previously worked at eBay and Stubhub. Luber continued to be involved with the company until his announcement last week. He made a statement about his depart from StockX, which he will remain a stakeholder:
“It was always my intention from the day I started StockX that I would start another start-up — and then probably after that, another one and another one.”
…
Keeping Track of Covid-19 Financial Impact
Under Armour to Cut 600 Employees Worldwide
Amazon set to hire 100,000 more workers due to the rise of online shopping
Rating La Mode - Vogue Runway
OK, this one may seem a bit obvious for some, but talking to a friend that works in the fashion industry I found out not everyone knows about the Vogue Runway platform, so I decided to recommend it! Available as an app or website, Vogue Runway's simple but extremely useful value proposition is to offer images and a brief description of every single major fashion show around the globe. Vogue Runway also offers street style images from all major fashion weeks and allows you to save your favourite images. On the platform, you can search designers/brands by name or just scroll throw the latest fashion shows, all for free. For me, Vogue Runway is not only the most practical way to keep up with fashion shows and trends, but also the perfect place to find designers and brands that I may not have heard about yet.
From Counterfeiting to a Legal Battle: LVMH Had an Intense Week
So, this week’s main article has a different format. I was making my ‘Last Week Recap’ and I noticed it was taken by LVMH. I couldn’t just ignore that LVMH probably had one of the busiest and most intense weeks in its year. Therefore, I decided to focus this whole second section of the newsletter on the many events that the French conglomerate and its brands went through. I saved the most important for last, so stay with me.
However, before I start, I will explain to those who may not know what is LVMH and why they are so relevant to the fashion industry. LVMH is the largest luxury group in the world, owning brands in the five main sectors of luxury: Wines & Spirits, Fashion & Leather Goods, Perfumes & Cosmetics, Watches & Jewelry, and Selective Retailing. In the fashion industry, LVMH owns 17 fashion houses, making it the largest fashion luxury group too. LVMH’s portfolio of fashion brands includes giants such as Louis Vuitton, Dior, Fendi, Celine, Givenchy, Marc Jacobs, and many more. The French conglomerate’s CEO Bernard Arnault is not only Europe’s richest man but also between the 5 wealthiest men in the world. I believe this gives you the idea of how relevant LVMH.
Now that we got that out of the way, wtf** happened to LVMH last week?
Well…from good to bad news…let’s say A LOT.
.
Chinese Police Catch Louis Vuitton Bags’ Counterfeit Scheme
Last week, Shanghai police unveiled a major counterfeit bust. In total, the police made 62 arrests and seized more than 30 items of manufacturing equipment, 2,000 counterfeit bags, and more than US$14.6 million worth in raw materials. The organization was accused of producing counterfeit Louis Vuitton bags with the help of an insider: a Louis Vuitton shop assistant working at a store in Guangzhou. The employee would send new bag models to the gang, making it possible to sell high-quality fake products at the same time or even before the actual brand. The sophisticated counterfeits even had an NFC (near-field-communication) microchips, which when scammed would redirect the customers to Louis Vuitton’s official website. This high-tech last feature is not even available at the real Louis Vuitton bags yet. A representative of LVMH, Louis Vuitton’s parent company, reaffirmed the group’s “zero tolerance” policy on fakes.
.
Nicholas Kirkwood Takes Control of His Brand Back From LVMH
In 2013, LVMH bought the majority stake in Nicholas Kirkwood. After this 7 years partnership, the shoe designer Nicholas Kirkwood is taking back the control of his brand. LVMH told BoF that the decision of going part ways was “mutual and amicable”. The French conglomerate said it would assist the designer over the next few months to “ensure a smooth transition”. LVMH does not break out the performance of individual brands of its portfolio, but, according to UK company filings, Nicholas Kirkwood was suffering losses even before the pandemic. This may be the reason for LVMH’s decision, even though the company did not share any financial details of the deal.
.
Fendi Names Kim Jones the Successor of Karl Lagerfeld
After the pass of Karl Lagerfeld, Fendi was left without an Artistic Director. Last week, the position has finally been filled by Kim Jones. Last week, Fendi announced Jones is its new womenswear Artistic Director. This position includes being responsible for the haute couture, ready-to-wear, and fur collections for women. Jones will keep his position as Artistic Director of Dior Homme, dealing with both brands at the same time – following the steps of Karl Lagerfeld, who designed three brands at once (Chanel, Fendi, and Karl Lagerfeld). LVMH’s decision was not well received by everyone. The decision of giving such an important position again to an already well-employed white man divided opinions. However, LVMH’s CEO Bernand Arnault stated that Jones “has continuously proven his ability to adapt to the codes and heritage of the LVMH houses while revisiting them with great modernity and audacity.”
.
Sephora Names New President and Chief-Executive
Martin Brok was appointed by LVMH as the new president and CEO of its beauty retailer Sephora. Most recently, Brok was Starbucks Inc.’s president of Europe, the Middle East, and Africa. Brok is the successor of Chris de Lapuente, who, as Sephora’s president and CEO for 10 years, transformed the company into the only truly global beauty retailer. Lapuente will remain a member of LVMH’s executive committee and will also take additional responsibilities at the group, which haven’t yet been announced. The appointment of Martin Brok is a mark of a new era for the company, as a period of transformation begins in the industry, especially regarding the rise of online sales.
.
LVMH Acquisition of Tiffany & Co Is Cancelled, Starting a Legal Battle Between the Two Giants
Finally, the news that took over the fashion industry media last week. The US$16 billion acquisition of Tiffany & Co. by LVMH was going to be the largest deal in the history of the modern luxury industry. However, after months postponing the closure of the deal, last Wednesday, LVMH officially called off the mega-merge with Tiffany. Since March, many speculated that the acquisition would not go ahead due to the Covid-19 pandemic hit on the luxury sector, whose sales are forecasted to shrink by up to 35%, according to Bain. Indeed, LVMH stated that the decision was made base on the “succession of events”, including the US threat of imposing import taxes on French products.
The relationship between the two companies has not been amicable after the deal fell apart. After LVMH announced the decision, Tiffany filed a lawsuit in Delaware against the French conglomerate. The jeweller accused LVMH of “baseless, opportunistic attempts to use the US social justice protests and the COVID-19 pandemic to avoid paying the agreed price for Tiffany shares”. The lawsuit is an attempt to make LVMH keep the acquisition deal. In response, LVMH denied the accusations and announced plans to file a countersuit against Tiffany for defamation and handling the pandemic financial impact poorly. The unusual drama of the normally discrete world of luxury corporate may not be the end of hope for a future deal, once LVMH stated it is still proceeding with plans to file for regulatory approvals from Brussels.
Thanks for reading this week’s moderated and next Tuesday I will be back with more.
If you haven’t already, subscribe below to receive the moderated newsletter by email.
Also, share this post with friends and family - and don’t forget to leave a like! :)
Bye-bye and see you next week!
About the author behind the text
About the artist behind the illustrations
If you want, send suggestions, comments or a hi to luizapplima@gmail.com