We are pleased to share with you our news roundup from June 2019. There was high investment activity from strategic players, new collaborations from Stadium Goods and Sotheby's, unexpected products from Birkenstock and Lady Gaga and more!
In July we continued to see high activity in the private markets, particularly with acquisitions and investments coming from strategic players. Colgate acquired French skincare brand Laboratoires Filorga Cosmetiques for $1.7 Billion. We can expect to see the brand expanding much more heavily in the US in 2020. On a smaller scale, Wacoal acquired digital native lingerie brand Lively for $85 Million. From an investment standpoint, several strategics made majority investments: Galeries Lafayette invested in French Jewelry brand Mauboussin, Henkel invested in hair color business eSalon and Vera Bradley invested in Pura Vida Bracelets. Reformation, the sustainable contemporary fashion brand also sold a majority stake to private equity firm Permira. In addition, Chanel took a stake in Italian tannery Samanta, a specialist in printed leather. Other notable raises included: Health-Ade Kombucha ($20M by Coca-Cola), plant-based chicken nuggets Nuggs ($7M), Bulletin ($7M), Bobo’s ($5.5M) and Briogeo (undisclosed from VMG). In the public markets, J. Crew tapped banks for a potential IPO of their Madewell business.
We continue to see brands new and old extend into unchartered territory whether it be through new product categories or collaborations. In streetwear, Stadium Goods partnered with Sotheby’s for an online auction selling 100 ultra-rare sneakers from their collection. The entire collection was purchased by Canadian investor and car collector Miles Nadal, who plans to display the collection in a museum setting in Toronto. He paid a total of $850,000 for 99 sneakers, and $437,500 for the final pair alone – the Nike “Moon Shoe” which Bill Bowerman designed for the 1972 Olympics. This marked the highest price ever paid for sneakers in an auction.
In sustainability, Stella McCartney continues to lead the way as an example for luxury brands. It announced a new tech called “NuCycl” which essentially turns old clothing into high-quality raw material for the creation of new clothes. They are beginning to use this with their Adidas by Stella McCartney line. In addition, LVMH announced a partnership with the brand, and will disclose full details in September. This comes about one year after Stella McCartney split from Kering group, and we can imagine LVMH sees this as an important opportunity to boost its sustainability credentials.
In beauty, Lady Gaga announced her first foray into the space under makeup brand Haus Laboratories. She chose to partner with Amazon which makes Haus the first major beauty brand to be sold exclusively on the Amazon platform. In a very unexpected move, legendary shoe company Birkenstock announced it will launch a skincare line called “Birkenstock Natural Care” which will include a range of premium priced products from anti-aging creams to shampoos. The products are currently only available in their Venice store in Los Angeles and in October will become available on their website and in their Soho store in NYC. In 2020 they will launch with third party retailers including Nordstrom.
The CBD craze continues with American Eagle and Sephora both announcing they will begin to sell CBD products in stores. Digital native brand Outdoor Voices announced a new marketing platform called “The Recreationist” which features content focusing on community, culture and recreation. They also released a capsule collection with Peloton which included twelve total items for women and men. Finally, digital native Orchard Mile launched a loyalty program where consumers are rewarded with each purchase.
Experiential retail continues to dominate the crop of new stores opening across the country. After shutting all its US stores last year, Toys R’ Us announced it will come back this holiday season with two new locations – at the Galleria in Houston and Westfield in Paramus NJ. The stores will be much smaller than previously, and offer open play areas, interactive displays and spaces for special events and birthday parties.
In Chicago, Lululemon opened its largest store yet, fully equipped with in-store classes and a café, and Crate & Barrel opened its first restaurant in collaboration with Cornerstone Restaurant Group. Macy’s partnered with Dick’s Sporting Goods for its second in-store Story concept which is themed “Outdoor Story.” The Outdoor Story features more than 70 different brands and events at each location such as gardening workshops and kayaking on the Hudson River. Lastly, digital natives continue to show an interest in retail expansion. Canadian jewelry brand Mejuri opened its third store in Los Angeles and brands like Third Love and Rockets of Awesome are opening multi-month long pop-ups with the potential to stay and become permanent locations. On the topic of retail, it is important to note that Barneys is looking for financing as it nears a potential bankruptcy.
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