More Designer Anxiety, Kamala Fashion Support & Brittany Mahomes’ Style Journey

Hi, welcome back to Line Sheet. If it’s Thursday night and you’re reading this from the Fondation Louis Vuitton celebration of LVMH’s utter domination of consumer culture, please shoot me a line to say how the party’s going. Also, let me know what you thought of the Presumed Innocent finale.

What a time to be alive… and working in luxury? In today’s issue, I give you the 411 on this week’s financial results. (As my fictional childhood hero Anne Shirley said, “The sun will go on rising and setting whether I fail in geometry or not.” And guess what, the sun will go on rising and setting whether Chinese consumers shop or not.)

I’ve also got some news from the Kamala campaign trail, and a Victoria’s Secret runway show mystery (easily solved, I’m sure). And straight from my Los Angeles backyard: the latest on the Marciano family’s expanding interests in higher-end fashion. And lucky you, Rachel “[email protected]” Strugatz is back with some intel on Summer Fridays’ deal to sell a majority stake to TSG.

🚨🚨Programming note: On tomorrow’s episode of Fashion People, I’m joined by John Ourand, the world’s biggest Sporty and Rich fan and author of The Varsity, Puck’s private email about the business of sports. We’re talking Olympics (which, uh, start tomorrow), LVMH at the Olympics, why athletes love fashion (especially LVMH), and vice versa. It’s fun, don’t miss it! P.S., for fans of sports and Zaz’s white bandana, John is also doing a Reddit AMA tomorrow about the NBA’s media rights deals. Ask your questions HERE and he’ll answer them in real time on Friday at 3:00 p.m. ET.

Also, quit lying to my face and subscribe to Puck!

Mentioned in this issue: Kering, LVMH, Vennette Ho, Summer Fridays, Gucci, Kamala Harris, Derek Blasberg, Lauren Santo Domingo, Victoria’s Secret, Janie Schaffer, Venetia Kidd, Hermès, Moncler, Andrew Rosen, Co, Stephanie Danan, Guess, Bottega Veneta, Sabato de Sarno, Chanel, Thom Browne, Daniel Roseberry, Marianna Hewitt, Lauren Ireland, Amy Klobuchar, Erewhon buffalo cauliflower, and many more…

• First up… here’s Rachel with a dispatch from the world of beauty M&A: Yesterday, I got a call from Vennette Ho, beauty’s favorite banker, to tell me that private equity shop TSG Consumer Partners bought a majority stake in Summer Fridays, the skincare brand co-founded by influencers Marianna Hewitt and Lauren Ireland. Summer Fridays has been doing steady business since its 2018 debut, but its growth trajectory has really accelerated in the last 18 months or so. (The brand’s lip butters were the best-selling lip product in all of Sephora last year.) I originally reported in March that the line had engaged Ho, the global head of beauty and personal care at Raymond James, to explore a sale process.

  To be clear, TSG hasn’t acquired Summer Fridays—this is a majority investment, and Hewitt and Ireland have “retained a pretty significant stake in the business,” Ho told me. That sounds like a little money off the table for the founders and some extra cash on the balance sheet to continue growing… presumably with the opportunity to let TSG engage further down the line. I’ll have more on the state of beauty M&A next week, including a deeper dive on Summer Fridays. Until then, I leave you with this: In beauty, private equity is rarely the first choice.

• Bring on the good coconut merch: No surprise, fashion people are ramping up their support for Kamala Harris, energized by the fact that she is Gen X, and also a good dresser. Earlier this week, Derek Blasberg and No. 1 Kamala Fan Lauren Santo Domingo urged industry friends to attend Wednesday afternoon’s “friends and family” call with Harris advisor Megan Jones, Senator Amy Klobuchar, and Maryland Governor Wes Moore. (Crystal McCrary—the inspiration for the Lisa Todd Wexley character in the Sex and the City reboot—was also pinging a lot of people, I hear.)

  If you or one of your friends is hosting a fundraiser for Harris, or doing something larger than life in an effort to get her elected, let me know. (Also, if you’re one of those secret Trumpers, I will definitely find out, so just be open with me!)

• The Victoria’s Secret show will… go on?: Obviously Chantal (Fernandez, my Selling Sexy co-author) and I are very curious to see what happens with the VS fashion show, which chief design officer Janie Schaffer and marketing head Sarah Sylvester insist is definitely happening this fall. In an interview with Lisa Lockwood in WWD, the duo said that “all women” will be represented on the runway, but they wouldn’t give Lisa a date. Instead, they simply said they are “exploring all options” when it comes to a distribution partner. (Before it got cancelled, literally and figuratively, after 2018, the show ran on network television in the U.S.)

  I’m intrigued by the timing of the WWD story since I had heard late last week that the show was slated for October 16. I reached out to a Victoria’s Secret rep, who said that was inaccurate, and that the company “will confirm the date when we make the official announcement.” I called a couple more people and received conflicting reports: Some said it was October 15, some said October 16, another said they heard October 15 or 16. What is true is that they are close to pinning down a date, and that it will almost definitely take place in New York City. (As of earlier this week, the company wasn’t even willing to commit to the location when talking to some partners.)

  My takeaway, no matter what date they land on: Mid-October is soon. The previous regime would begin planning these events a year in advance. It’s totally possible to put a runway show together over two months’ time—and the fact that they haven’t locked in casting isn’t so crazy. But it means that things are going to be different, and perhaps not as delightfully unhinged, as they were in previous iterations. No word on whether there will be a musical performance.

• CO has a new backer: The Los Angeles-based, Andrew Rosen-supported clothing line CO has a new financial partner in Guess Inc. which acquired a minority stake in the business, according to multiple people directly involved. Co-founder Stephanie Danan moved the design team to Paris, where she’s based part-time, although the headquarters will remain stateside, where the majority of transactions take place. It’s an interesting move for Guess, which recently acquired another Rosen property, Rag & Bone. (Danan has also known the Marcianos since childhood.)

  It marks a second act for CO, which was founded in 2011 and carries a price point just above Rag & Bone’s. The brand tends to sell on the designer floor rather than the contemporary one, and I first clocked it years ago at Barneys, where it was conveniently positioned between The Row and Old Céline. Today, however, there are a lot of gently priced, nicely made lines catering to the Old Céline-loving customer. I assume that operating out of Paris, where Danan has started collaborating with the talented stylist Samuel Drira and others, helps to sharpen the necessary edge. As for the Marcianos, the deal to watch here is really Rag & Bone. Let’s see if they can transform that business.

• A Brittany Mahomes fashion update: Her stylist’s name is Venetia Kidd, and Venetia actually still assists with Joseph Cassell Falconer, Taylor Swift’s stylist. (Yesterday, I said that she was Joseph’s former assistant.)

This guy was sort of an alarmist, and I often deleted his warnings of financial catastrophe. But this week, as I was sitting down to write about the new earnings reports from LVMH and Kering, I was sifting through old emails and stumbled upon that Krugman column, which was undeniably prescient. “China has masked underlying imbalances by creating an immense housing bubble,” he wrote. “And it’s hard to see how this ends well.”

As this week’s results at LVMH and Kering indicated, the situation in China has affected the spending habits of its increasingly wealthy 0.1 percent. LVMH is the better off between the two, but it still missed analyst’s expectations, with a 14 percent year-over-year decrease in net profit in the first half of 2024. Kering issued another profit warning as Gucci’s sales fell 20 percent this past quarter, and Saint Laurent, its second-biggest brand, also struggled. (Operating income at Kering could fall by as much as 30 percent in the second half of the year, the company warned.) LVMH’s stock is down 24 percent over the last year. Kering’s is down nearly 45 percent. Investors are worried about China, yes, and also inflation, and the election, and general consumer fatigue. Luxury goods are slowly but surely losing their cachet as they’ve become “democratized,” with more consumers able to access them via the secondhand market, discounting, and the expansion of what is defined as a luxury good. (It can be a $300 scarf, an $800 pair of sneakers, or a $40,000 dress.)

The family fortunes of the two men who run these companies have dipped as well. Bernard Arnault is now the third-richest man in the world, according to Forbes, after volleying for the top spot for months with Elon Musk. (Jeff Bezos is back at No. 2.) The family of Kering C.E.O. François-Henri Pinault, represented on the list by his 87-year-old father, also named François, sits at No. 76, down from No. 54 in April.

Of course, these families are still unspeakably rich, and those lists are unbelievably flawed. And, of course, LVMH will sail through this period just fine—it’s larger, more diversified, more integrated, and most analysts still have it as a buy. Kering, as I’ve gestured toward in the past, is more exposed, and there are now more questions about what happens if the Gucci restructuring doesn’t pan out. It’s not just new-ish designer Sabato de Sarno: Gucci is undergoing major surgery to overhaul its business, creating new positions (deputy C.E.O., chief commercial officer) and eliminating others. They will probably close a lot of stores in the U.S., and perhaps elsewhere. After years of engineering record sales through increased distribution, good marketing, and super-hot product, the company will undoubtedly have to continue to shrink for some time in order to grow, especially if de Sarno’s work doesn’t connect with Chinese customers as Alessandro Michele’s designs famously did. It’s no surprise analysts are recommending a hold on the Kering stock. As I’ve written before, a merger with another group has never felt more viable.

As for Hermès, the this-company-can-do-no-wrong narrative continued, with sales rising double digits in pretty much every region (even in greater Asia, which is mostly China) and category (save for watches and textiles) and net profits up 6 percent in the first half of the year. As analyst Luca Solca pointed out in his note to investors, the company’s EBIT margin is the highest in the industry at 42 percent. We all know that the brand’s stewards, descendants of its founders, possess a discipline that other luxury firms do not. They sell fewer units than they could, they let the product tell the story, and they make the trends instead of following the trends. In other words, it never feels like they’re trying too hard.

I was wrong. The current state of the industry demonstrates that the biggest brands focused too much on growth, and not enough on creating things people wanted to buy. The result, as we’re now seeing, is that consumers who can afford to buy aren’t buying. No one wants to spend money on ugly (or worse, mediocre) clothes and accessories, especially at stupid prices. Even (and especially) very wealthy people.

The companies that are performing well, or at least staying above water—Hermès, Moncler, and Bottega Veneta, the one bright spot in Kering’s portfolio—have one thing in common: They make nice things and not too many of them. Figuring out how many is too many is difficult, and there’s always a chance you’re leaving money on the table. But the alternative is what’s happening now in Paris—utter chaos, with brands scrambling to figure out which creative person can fix the existential problem of an industry that went too far in order to achieve mass appeal overseas.

This reflex explains the tendency, amid this latest round of designer musical chairs, to favor traditional designers—Peter Copping, Sarah Burton, and perhaps John Galliano—at the top of fashion houses. In some scenarios (Lanvin, Givenchy), this makes a lot of sense. In others (Dior, Louis Vuitton), you need a designer-executive hybrid, and not all traditional designers are cut out for that kind of work. Regardless, I’m unbothered by the number of open vacancies, and I’m not sure it says much about the current state of the industry—this is how it has worked for the past 15 years or so, and will continue to work. The endless stream of firing and resigning and replacing and retiring is more reflective of the current state of work in our society than fashion’s troubles. What’s concerning is that, in many cases, executives are hiring out of fear and, therefore, hiring the wrong designers.

At Chanel, the abrupt, mid-afternoon exit of Virginie Viard in June set off a tremendous amount of speculation, with so many in the industry (including me) desperate to see Hedi Slimane fill the role. I was reminded this week by a person who works with the brand that Chanel chairman Alain Wertheimer still listens to Anna Wintour, and so while there are almost certainly many people auditioning for this job, Slimane is probably not one of them. I’m also hearing that the notion of hiring from within—an idea going around among the plebes—is a pipe dream. Names currently in the mix include Thom Browne and Daniel Roseberry, who used to work for Thom Browne. As for Simon Porte Jacquemus being spotted in the Chanel offices… who knows? But he has been in the offices before, and it’s likely unrelated. Maybe he’s friends with someone who works there?

Anyway, Browne is quite a sensible choice. Hopefully the industry would see it as an inspired choice, too. What Chanel needs to do here is lead, not follow, and show that creating desire, especially as the consumer’s desires change, is not a simple plug and play. There’s far too much copying in this industry—and I’m not just talking about handbag designs. Chanel should not try to be more like Hermès, just as Dior should not try to be more like Chanel. Mimicry only gets you so far.

“I feel compelled to defend citrus in salad! With fennel, preferably. And yes to stone fruits also.” —A designer (I don’t disagree)

“Citrus and apples are great in salad! Just saying.” —An editor-in-chief (okay, yes, but still no berries)

I took to Apple TV+’s Presumed Innocent because of the great performances, the good looks, the summertime-appropriate plotline, and the feeling of being in Chicago without actually being in Chicago. But also, it was stylish without feeling artificial, from the wardrobing to the interiors. Johanna Argan, the fabulous costume designer, previously worked on several seasons of House of Cards. She’s very good at suits (yes, Jake Gyllenhaal’s true blue, but also Bill Camp’s Brooks Brothers and Peter Sarsgaard’s slouchy check, and O-T Fagbenle’s running-for-office pinstripes). Also: sweaters. Ruth Negga looked great the entire time; she’s also very beautiful. I really hope there’s a new cast next season, although I will miss them all. [Harper’s Bazaar]

Paul Andrew is now the creative director of Sergio Rossi (currently owned by the Lanvin Group). Paul runs his own brand, consults for others, and was previously the creative director of Salvatore Ferragamo. I ran into the C.E.O. of Sergio Rossi the last time I was in Milan and she was cool. [Vogue]

It never ends: Fforme, the still-new brand backed by V.C. heiress Nina Khosla, has a new creative director: Stella McCartney vet Frances Howie. Acclaimed designer Paul Helbers has peaced out. No one is saying why. [WWD]

To all the media companies enjoying a boost in traffic because of this election drama, learn from your past mistakes! [Puck]

A bunch of fashion people who are not a size zero (Paloma Elsesser, Daphne Seybold, Gabriella Karefa-Johnson, Ariella Starkman, Steff Yotka, Lynette Nylander) are doing a closet sale in New York on Sunday. [Instagram]

Sometimes, a tan line is just a tan line, okay? (Also, this story should not be behind a paywall. If you want to see it, DM me and we can work something out.) [Business Insider]

Sure, all these creative directors are moving around, but so are the designers working for them. Sam Hine gets into it. [GQ]

The great Willie Norris is now the chief creative officer of underwear brand TomboyX. [Fashionista]

Will read anything about Michael Rubin and Fanatics. [Puck]

An investment vehicle controlled by L Catterton took a minority stake in Value Retail, the company that owns Bicester Village and a new, soon-to-be-open value retail destination on Long Island. [WWD]

Some of Tiffany’s top salespeople have left the company, according to this report. [Bloomberg]

Oooh, Dolce & Gabbana’s C.E.O. said the owners are open to raising money or maybe even being acquired. [BoF]

What actually makes Erewhon money: the buffalo cauliflower and chicken fingers. [Businessweek]

Susan Orlean’s tips for being an effective writer are really good. [Wordy Bird]

Mattie Kahn on the thing we’re all obsessing over—the lower facelift. [Vogue]

Until Monday,
Lauren