Modish Issue #2: Q1 and the Post-Pandemic Revival

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Issue #2: Q1 and the Post-Pandemic Revival

© 2021 Carolyn Hammond

APRIL 23, 2021


Welcome to

Issue #2







Rebirth & Resurgence: The Year Ahead After more than a year since the COVID-19 crisis first took hold, it seems the fashion industry has finally regained its footing. As interminable lockdowns are lifted and the vaccine is rolled out, consumerism has steadily rebounded, and along with it, the entire fashion business. Though destructive the pandemic helped shed light on how antiquated the fashion industry had become.


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With upwards of four shows and at the least two collections per year, not only had the business of running a brand become dauntingly expensive, but also wasteful and creatively exhausting for the designers in charge. Thus, while many brands were pushed to the brink thanks to store closures, detrimental losses in revenue, and waning consumer support, most have since recovered by creating more strategic business models aimed at increasing efficiency, consumer engagement, and their online presence. Now, the fashion business is a game of survival of the fittest. Having faced its toughest challenge in almost a century, the fashion industry has come out leaner and stronger than before, better equipped to take on the nuances of both the post-pandemic market and consumer. Q1 was an exciting and encouraging quarter for investors and fashion enthusiasts alike. Luxury’s power players posted strong Q1 results overall, signaling that the return to pre-COVID numbers is likely not far off. Additionally, the skincare and beauty industry has become one of the hottest sectors on the market in recent months, largely due to an uptick in personal care spending as a result of lockdowns that has continued post-pandemic. Finally, NFTs (non-fungible tokens) have found their way into high fashion, making tangible goods a thing of the past and giving us a glimpse into fashion’s high-tech future. In closing, Q1 has given us insight into the new and improved fashion industry—one characterized by intense competition for consumer engagement, wildly exciting creativity, and double vaccinations. If Q2 is anything like Q1, we’re in for an exceptional first half of FY 2021.


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Letter from the Editor Dear reader, Welcome back to Modish! This quarter in the fashion world has been marked by signs of a return to normalcy, or at the very least, a new “normal” postpandemic. With that has come extraordinary rebounds in business operations, profits, and a resurgence of innovation and consumerism lost during the COVID-19 crisis. As we roll into May, over a year since the pandemic first started, it is truly amazing to witness the progress the fashion industry has made. For most companies, the pandemic forced them to make tough business decisions that have since made them leaner and better-equipped to take on the new world of fashion business. Many companies pushed to the brink of bankruptcy have since rebounded, clean beauty has emerged as one of the hottest investments on the market, and NFTs have invaded high fashion. In Q2 and the year ahead, I look forward to a complete rejuvenation of the fashion industry, characterized by innovation, efficiency, and a welcome boom in creativity. In this issue, I hope to give you an idea not only of what’s to come in Q2 of 2021, but what will make FY2021 a uniquely exciting and exceptionally important year in fashion.

Sincerely, Carolyn Hammond Editor-in-Chief of Modish


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In this Issue Q1 in Review Luxury Rebounds……6 Taking Stock: LVMH, Kering, and Richemont……6 Editorial: All or Nothing At All……7 The Asia Market Reigns Supreme……10 Market Watch: Highlight on Luxury Consumerism in Asia…..10 Resale Resurgence……11 Editorial: The Resale Rage……11 Editorial: Rue Cambon v. Resale……14 Looking ahead : Q2 2021 and Beyond The Beauty Buzz……16 Editorial: The Beauty Battle……26 Editorial: Clean Beauty Craze……18 High Fashion and the Rise of NFTs……21 Editorial: Fad or Future?……21 Stocks I’m Watching……25 Stock Watch: L’Oréal, Tapestry, and The RealReal……25 Final Thoughts What to Expect in Q2 FY 2021……26 References, Citations……27


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Luxury Rebounds

Revenues by Sector s s g ts ry tic od el lin iri e o w ai m G Sp et Je os R & er & C h e es at iv es & in ct ch Le es le W at m & Se W

i sh Fa

Q1 2020



Revenues (in billions of €)


Q1 Revenues, 2020-2021 €16.000 €13.500



Q1 2019

Q1 2020

Q1 2021

Revenues by Brand

Q1 2021





tte a


n Ve er






After a rough second half of FY 2020, Gucci returned to its place of prominence within the group, raking in nearly €2.2 billion alone, a 24.6% increase Y/Y. Bottega Veneta and YSL posted similarly dramatic results, increasing their revenues by 24.6% and 23.4%.

Q1 2020


Kering boasted equally impressive results in Q1, almost matching rival LVMH’s stunning performance. The group as a whole posted revenues of €3.89 billion, a 21.4% increase compared with the same period in 2020. The conglomerates luxury houses, specifically, made up €3.73 billion of the group’s revenues, a 21.6% increase over Q1 2020.



Of the “big three,” LVMH posted the strongest Q1 results, outperforming not only its competitors, but the market as a whole. With total revenues of €14 billion, a 32% increase on the same period in 2020, and an 11% increase on 2019, the French conglomerate has more than erased its COVID-19 losses.



Revenues by Sector


€1,300.00 €1,900.00 €2,500.00

Revenues (in millions of €)

s rs ry or le ke ut a el ib m w tr Je ch is at D W e in nl

Though not as successful as its competitors,


er th



€3,800.00 Revenues (in millions of €)



Q1 2021

r Pe

Post-pandemic, fashion’s luxury conglomerates have made a miraculous recovery.



€1,325.00 €1,862.50 €2,400.00

Richemont performed on par with the rest of the market in Q1, posting a mix of gains and losses. While three of the group’s main categories, speciality watchmakers, online distributors, and others incurred losses or remained flat, the core of the French conglomerate’s business model, jewellery, remained strong even amid a downturn in discretionary spending, boasting revenues of €2.36 billion, a 9% increase over Q1 2020.

Profits and Net Cash (in millions of €) Q1 2020

Q1 2021


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All or Nothing at All Originally published on, April 11, 2021.

When Kering took control of Gucci in 1999, the brand was finally on the mend after suffering a creative and financial depression throughout most of the 1990’s. However, Tom Ford completely reimagined the iconic Italian label, steering away from the brand’s sixties silhouettes and pastel colors in favor of clean lines, edgy shapes, and bold colors. Thanks to Ford’s rejuvenation, Gucci went from being in the red to being valued at more than $4 billion in a span of three years. This stunning success made Gucci ripe for acquisition, and billionaire François-Henri Pinault snapped it up, adding the eponymous label to his luxury lineup.

One of Tom Ford’s groundbreaking ad campaigns for Gucci. Photo credit: CR Fashionbook

Since the 90’s, Gucci has only become stronger, building its brand around reinvigorated classics and obnoxiously enticing logomania. In fact, under the direction of Alessandro Michele, Gucci has arguably reached its peak popularity, attracting consumers of all ages and demographics who want the double G’s.


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As Gucci has become more successful, it has quickly become the “golden child” among Kering’s extensive brand lineup, which includes Saint Laurent, Bottega Veneta, and Alexander McQueen, among others. Always the first brand listed in financial reports and documents, Gucci is the conspicuous and undeniable favorite, and for good reason. Since 2018, the brand’s revenue has been higher than all of Kering’s other labels, combined.

A shot from Gucci's 2020 Cruise show. Photo credit: Gucci

According to FY 2018 reports, Gucci’s revenue was €8.2 billion, a 34% increase year-over-year (YoY), while rivals Saint Laurent and Bottega Veneta had revenues of €1.75 billion and €1.1 billion, respectively. The brand’s other houses, grouped under one financial document, had revenues of €2.1 billion. Thus, Gucci outmatched the revenues of other companies under the Kering umbrella by about €3.25 billion. In 2019, Gucci yet again beat its YoY results, raking in €9.63 billion in revenue, a 16.2% increase on the year prior. And, while Saint Laurent, Bottega Veneta, and the conglomerate’s other houses also increased their revenues to €2.05 billion, €1.2 billion, and €2.54 billion, respectively, Gucci still reigned supreme, beating the other labels’ revenues by a whopping €3.83 billion. By the end of FY 2019, Gucci had cemented its place as Pinault’s favorite. In fact, when asked which companies Kering owns, there is usually only one answer: Gucci. Reminiscent of Bernard Arnault’s love affair with the house of Christian Dior, Gucci receives more capital than any of Kering’s other houses. However, Gucci’s smashing growth hit a speedbump, in the form of COVID-19. Like all other labels, Gucci suffered as lockdowns took hold and consumers all but halted their discretionary spending. Suddenly, Kering’s favorite brand had been knocked down a few rungs on the ladder, and still hasn’t managed to climb back up to the top. In FY 2020, Gucci reported revenues of €7.4 billion, a 22.7% decrease YoY. Saint Laurent also posted a loss in revenue of 14.9%, landing it at €1.7 billion. This loss, while not small, was nearly 10% less than that of Gucci—a worrying sign for Kering. Even more worrying for Gucci was Bottega


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Veneta’s performance—the cult-favorite brand increased its revenues by 3.7% to €1.2 billion in 2020, outperforming not only Gucci, but the luxury market as a whole. For Kering, Gucci’s underperformance compared with its competitors should be concerning. Because the conglomerate’s business model is heavily Gucci-oriented, the majority of the group’s capital and resources are put toward Alessandro Michele with the expectation that Gucci will continue to rake in increasing profits. Ultimately, not only does Kering risk harming its other brands by refusing them the capital they need to match their impressive performance, but because Gucci has so much pull and makes up a massive portion of the group’s revenue, any stagnation or loss in revenue threatens to destroy the group as a whole.

From left, Alessandro Michele walks the Met Gala red carpet with Lana del Ray and Jared Leto. Photo credit: Esquire

Ultimately, in order to counteract Gucci’s lagging 2020 financials, Kering needs to drop its Guccicentricism and work to better the group as a whole. With Gucci’s success, Kering has had it all. However, if the group doesn’t react to Gucci’s downturn, Kering will likely have nothing at all.


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Market Watch Consumerism in Asia is heating up again, and luxury conglomerates are reaping the benefits. 12% 29%


8% 8%

Q1 2020


23% 18%




Asia Europe Japan

Q1 2021

US France Other



Like LVMH, Kering’s business model has relied heavily on Asian consumers. However, following a worrying dip during FY 2020, sales in Asia have rebounded dramatically. In Q1, Asia Pacific was responsible for more than 53% of Gucci’s sales, compared to only 37% a year prior. YSL and Bottega Veneta experienced similar boosts from the region, with Asia accounting for 32% and 43% of their Q1 sales, respectively, compared to 25% and 32% in Q1 2020.

Revenues by Region

Asia Japan

North America RoW



Ja p










Eu ro


Finally, in its Q3 press release, Richemont highlighted its ever-increasing popularity among Asian consumers. In Q3 2019, Asia accounted for €1.429 billion of Richemont’s revenues. In Q3 2020, that figure increased by 21% to a whopping €1.73 billion.

Ea e dl id M


Q2 2020


Q1 2020



While LVMH has long maintained a strong consumer base in Asia, luxury consumerism in Asia has reached new heights post-pandemic. While in Q1 2020 Asia made up only 29% of LVMH’s sales, that figure has since jumped to over 41%, while sales in the US, Europe, and Japan have all dropped.






And, while Richemont has picked up substantially higher revenues in Asia year over year, it has lost revenues in almost every other market, aside from the Middle East. In Q3 2019, the conglomerate garnered €1.286 billion from Europe and €874 million from the Americas. By Q3 2020, these figures dipped by 22% and 4%, respectively, with Europe posting revenues of €982 million, and the US only €841 million.

Revenues, in millions of € Q1 2020

Q1 2021

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The Resale Rage Originally published on Modish Quarterly, January 15, 2021

Yesterday, Poshmark, the online resale marketplace, went public on the NYSE. After pricing its initial IPO at $42/share, Poshmark opened trading at a whopping $97.50/share, more than two times its expectations, giving the company a valuation of around $3 billion. However, by the close, Poshmark's stock was trading at an astonishing $101.50, boosting the company's valuation to over $8.5 billion; an increase of $5.3 billion in only 8 hours, raising $277 million for the company.

Poshmark celebrates its IPO in Times Square. Photo credit: Barron's

Poshmark's IPO is one of many in a line of hotly anticipated e-commerce listings this year, which include ThredUp, MyTheresa, and Revamp Resale. As I discussed in Modish Issue #1, thanks to the pandemic's tireless crusade against brick and mortar retail, investors have become infatuated with e-commerce companies, practically throwing money at them in the hopes they can deliver on their lofty projections.

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Photo credit: Business of Fashion (@bof)

Within the e-commerce category, resale and secondhand marketplaces like Poshmark have grown immensely in popularity among investors, as various studies and data point to Gen Z's supposed love of secondhand goods. Poshmark's insane valuation, however, gives me pause. Investors seem to be hedging their bets on resale marketplaces based on data interpretations rather than actual consumer behavior. As such, I believe secondhand marketplace companies are incredibly overvalued, their valuations based on ideals rather than concrete performance. 
 Take the RealReal, for example. While it is not identical to Poshmark--it is a consignment business rather than a direct seller-to-buyer model, and only sells luxury items from a curated list of designers--the two are similar in makeup. Most notably, they both inhabit the secondhand market space, focusing on the resale of clothing, shoes, accessories, and jewelry. 
 The RealReal (REAL) went public in May of 2019. Ahead of many of its competitors in entering the public market, REAL has acted as a sort of beta test for other resale marketplaces. Prior to COVID-19, REAL's GMV grew over 40%; however, at the end of Q3 2020, its GMV was down -3% on the year, according to a report by Piper Sandler. Sales for REAL were also down -2% Y/Y at the end of Q3, and available inventory also dropped substantially, signifying a lack of supply from previously loyal consignors. Despite these disappointing numbers, REAL's new buyers increased by +24% in November compared with the same period in 2019, setting a new monthly record for customer acquisition.

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The RealReal flagship in SoHo, NYC. Photo credit: The New York Times

According to the same Piper Sandler report, the total US secondhand market was estimated to be worth $28 billion in 2019. The 2020 Resale Report projects that the value of the market will more than double by 2029, to a whopping $80 billion. And, though this estimate appears encouraging, it is not the size of the resale market, but the market's consumers that investors should be focused on. Unfortunately, Gen Z is not as enthralled with resale as investors would like to believe. Piper Sandler's annual Taking Stock with Teens Fall 2020 survey shows that only 28% of teens claim to already use a secondhand marketplace, while thrift/consignment stores were ranked #10 among the most preferred apparel brand/retailer for upper-income teens. While this is a vast improvement from #38 a year prior, this data simply is not enough to merit REAL's current share price ($19), especially as steady supply remains difficult to secure and consumer confidence continues to be tenuous. Bottom line: Secondhand marketplaces are extremely overvalued. Not only are they reliant upon future consumer behaviors, specifically those of the seemingly impossible-to-predict Gen Z, but they lack concrete proof that the resale model will survive long-term. Ultimately, secondhand e-tailers like Poshmark and the RealReal are writing checks their models can't cash.

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Rue Cambon v. Resale

Originally published on Modish Quarterly, March 18, 2021.

The Ongoing Fight Between Chanel and TRR Highlights Questions of Exclusivity, Ubiquity, and the Future of Resale. In November of 2018, iconic French fashion house Chanel filed suit against New York-based luxury resale company The RealReal (TRR), claiming that TRR was not only selling counterfeit goods, but that it was manipulating the price of Chanel goods; specifically, its handbags and accessories. This claim was based largely on the fact that TRR boasts the largest pre-owned Chanel collection of any second-hand vendor, often at 70% less than the retail price. Recently, TRR fired back, filing a counterclaim stating that TRR does not in any way manipulate the price of Chanel goods on the luxury market, noting that products from secondhand luxury resalers like TRR are not in the same consumer marketplace as new luxury goods from houses like Chanel. As the legal battle between the two entities continues to roll on, captivating the fashion law media, it raises myriad questions about luxury resale, and what its roll is in the luxury goods marketplace. Are TRR’s prices actually driving down the value of Chanel’s products, or do Chanel’s competition claims indicate a growing fear of resale’s share of the luxury market? Let’s break it down. First, let’s start with the product in question. Take a brand new, medium Chanel Classic Flap Bag. This bag retails from between $4000 and $6000 on average, depending upon its material and finishes, such as embellishments and hardware. Even for the average luxury consumer, this is a big purchase; for reference, other luxury bags that are comparable in style, size, material, and brand name, such as Louis Vuitton or Prada, retail between $1400 and $2500. Because of this steep upfront price and the fact that pre-owned Chanel bags hold their value better than any other luxury brand, most shoppers, whether new to luxury or not, are more likely to buy vintage Chanel rather than new. Now, to the question at hand: Is TRR driving down the value of Chanel’s beloved bags? In short, yes. As I mentioned above, TRR offers its pre-owned goods at a fraction of the price of traditional luxury retail. That same $4000 medium classic Chanel flap bag, even if it is brand !1 4

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new, would likely retail for around $3200 on TRR. And, while that may seem like a small drop in price, it equates to a massive drop in value. As with most luxury houses, Chanel thrives on its exclusivity, which it cultivates through its high prices, low production, and its boutique experience. Thus, that $800 that you saved in buying from TRR is taking Chanel’s “boutique fee” away. Essentially, a fifth of the price of a Chanel purse is just the “Chanel experience.” Now, let’s look at a truly vintage bag. Take another classic medium Chanel flap, but one that is five years old and has light wear consistent with its age (a few marks to the lining, maybe a bit of scratching on the hardware, but nothing of note). This one retails for $2000. Bear in mind, a new Chanel medium classic flap retails for $4000. This is a 50% discount on a bag that, given its condition, is virtually new. Now, in taking away half of the bag’s value, not only has TRR taken away the “Chanel experience” fee, but it has also neutralized the exclusivity fee. Now, this lightly-worn Chanel bag is comparable to other, new luxury bags that are more approachable in price. As such, the shopper now has a tougher decision to make than they did before: Do they buy a new Prada double tote, or do they capitalize on this Chanel “deal” and get the clout of having a vintage Chanel bag? This is where Chanel’s competition claims against TRR find merit. The undying fervor for vintage Chanel coupled with TRR’s massive markdowns makes Chanel’s battle for exclusivity almost unwinnable. Not only is the average shopper willing to forgo the boutique experience for a lower price, but luxury consumers are also more likely to buy vintage Chanel than new Chanel purely because of the clout that comes with it—a strange and inexplicable phenomenon that continues to puzzle the fashion community. As a result, through its monopoly on the pre-owned Chanel market, TRR has also put itself in a position to fix the prices of the entire Chanel market, vintage or new. By this logic, Chanel’s competition claims are more than justified, as TRR is taking away the brand’s exclusivity, threatening to make Chanel’s accessories ubiquitous rather than elusive, a battle luxury houses have been fighting since the dawn of online retail. Contrastingly, Chanel’s claims also demonstrate luxury’s growing fear of resale; particularly, its growing share of the market. With sustainability initiatives continuing to drive the fashion industry, resale has gained support from industry executives and consumers alike. TRR has done especially well, continuing to increase both its number of customers and consigners month-over-month as well as expanding its stock, even amid the COVID-19 crisis. Ultimately, luxury resalers only stand to become more prominent in the luxury market, putting them in a position that will allow them to set prices and bust exclusivity, but will also leave them fighting anticompetition suits for years to come.

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The Beauty Battle

Originally published on Modish Quarterly, February 17, 2021.

Arguably the fastest-growing and most competitive industry on the planet, comparable only to the notoriously cut-throat food and beverage industry, beauty has become all the rage. With a growing focus on wellness and weeks on end spent in quarantine, the beauty industry has experienced a renaissance in the past few months. Thanks to lockdowns, consumers have had more time than ever before to experiment with skincare and makeup, two categories whose sales increased over the course of worldwide quarantines, despite being discretionary spending categories. 
 Part of the reason for the beauty industry’s overcrowding are celebrities. Everyone from Selena Gomez to Nikki Reed has created their own skincare or makeup line. However, many of these upstart brands die off quickly, crushed by the beauty industry’s heavy hitters. So, how do the best beauty brands consistently beat out the intense competition; and, more importantly, what are the other brands missing? In the exclusive upper echelon of beauty, there are two categories: the classics and the newcomers. The classics consist of time-honored brands like Chanel, YSL, Giorgio Armani, Laura Mercier, etc. These brands are well established, with longstanding, loyal clientele. While they do occasionally introduce new products, their business models thrive on maintaining the classic skincare and makeup products they’ve carried since their launch. 
 The newcomers, on the other hand, consist of successful startups, such as Fenty Beauty, Charlotte Tilbury, Hourglass Cosmetics, and most notably, Glossier. Most of these brands were founded in the last five to ten years, and didn’t have the benefit of a large name behind them. Take Glossier, for example. Named one of the “most innovative companies” by Fast Company, Glossier was born entirely of social media. Its founder, Emily Weiss, started her beauty blog, Into the Gloss, while she was a fashion assistant at Vogue. Through ITG, Weiss began cultivating her own skincare and makeup line, incorporating her community’s skincare and makeup likes and dislikes to create the now-eponymous Glossier. Launched in 2014, Glossier is now worth a reported $1.5 billion, according to Expand Rambling’s Craig Smith. Between 2015 and 2016, Glossier grew more than 600%, and in 2020, its annual revenues surpassed $100 million. As for its incomparable social media presence, Glossier now has more than 2.7 million followers, while Weiss’s blog account, ITG, has 870k.

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So, what sets Glossier apart? Or, more importantly, how did it break into the same league as Chanel, YSL, and Dior? The answer, in short, is the brand’s cult of personality. First, Glossier has an unparalleled social media presence. From its website to its Instagram page, the aesthetic is seamless. Now termed “Glossier pink,” the brand’s iconic color sets a relaxed, coolgirl tone for the brand. Second, Weiss has built her brand on the idea of “no makeup makeup,” such that all of her products are more skincare-focused. Prior to Glossier, no other brand was able to fill this niche, and to make it their entire brand culture. Third, Glossier constantly rolls out new products, all of which employ “beauty tech.” Basically, through color matching algorithms and impeccable customer support, Glossier has tailored its makeup to every possible skin type. Finally, the brand’s packaging and ventures into “Glossiwear” have built a brand whose influence extends beyond the company’s product line. Sweatshirts with Glossier printed across them are a staple in every beauty enthusiast’s closet, and the company’s stickers and pink, bubble wrap pouches make every Glossier purchase Instagrammable. 
 Glossier has proven that you don’t have to have a big name to make it in the beauty industry. So, why do other upstart brands not have the same success? First, most of them lack a strong social media presence. And, without an “Instagrammable” appeal, these upstarts are dead in the water. Second, they don’t have established client bases, and will find it extremely difficult to steal loyal consumers from classic brands. Third, though many of these brands are created by celebrities, the brand doesn’t have a cult following. That is to say, celebrity can’t do it all. Though celebs assume their fans will buy from their line, this infatuation will likely result in a one-time purchase, not a devoted customer. Finally, their products aren’t innovative enough. Unfortunately, most categories have been filled. From broader ones like vegan cosmetics to niche categories like pH-balancing lip balms, pretty much every area of the market has been cornered. As a result, there’s very little that’s new under the sun in the beauty industry. This, in turn, puts increased stress on a company’s marketing; as there’s nothing proprietary about their products, their marketing has to set them apart. And, as I already mentioned, if you don’t have a well-developed social media presence or a cult following, this will make marketing your products virtually impossible. 
 Ultimately, beauty startups now, whether celebrity-backed or not, have a tough road ahead. In order to succeed, they have to find and cultivate their “edge,” build a formidable social media presence, and create a brand community that extends beyond their product line. In an age where we’ve shifted online now more than ever before, companies are in a constant battle for relevance, and in a cut-throat industry like beauty, you have to stand out to survive.

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Clean Beauty Craze Originally published on on March 2, 2021.

This Friday, I had the opportunity to virtually attend the Fashion Law Institute’s symposium, Inside-Out 6: Purple Reign: Fashion’s In-House Counsel on a New US Administration & a New World Order. Moderated by Professor Susan Scafidi, the first professor to teach a course in fashion law, founder of the Fashion Law Institute, and professor at Fordham University’s School of Law, the symposium featured the general counsels for PVH Corporation (the parent company of Calvin Klein), Warby Parker, LVMH North America, Birchbox and Fresh Beauty. Each shared their thoughts on a variety of topics, from the bankruptcies caused by the ongoing pandemic, to the possibilities presented by a new presidential administration, and most notably, the future of clean beauty.

The Fashion Law Institute's 6th Annual Inside-Out Symposium. Photo credit: The Fashion Law Institute

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Over the course of the past decade, clean beauty has grown from a niche category to an entire industry in and of itself. Now, as the fervor for sustainability reaches a fever pitch, not only has clean beauty become more popular than ever before, but it has become the standard in beauty. Sephora, for example has entire pages on its website dedicated to clean beauty, all marked by the green Clean at Sephora seal of approval. As Fresh Beauty’s General Counsel and symposium panelist Nick Barnhorst noted, around 65% of consumers have said they would stop using their favorite products if they were not sustainable. This shocking figure demonstrates both the rise in consumer consciousness as well as the growing popularity and variety of clean beauty brands. Today, there is a clean beauty alternative for every kind of makeup in your vanity, from eye makeup, to foundation, and everything in between. Clean beauty is also constantly evolving. While “clean” originally meant having natural ingredients and being free of parabens and other nasty chemicals that could damage your skin, its meaning has since changed. Now, “clean” means being vegan, cruelty-free, and organic, among other things. However, according to Barnhorst, the requirements for “clean” beauty are set to evolve yet again. According to Barnhorst, it is no longer enough for a company to be Ilia’s lineup of popular clean beauty products. Source: Business sustainable in its ingredients and Insider. practices alone. Now, in order for beauty brands to be considered truly “clean,” they must also be sustainable in their sourcing. In fact, Barnhorst relayed that Sephora will soon roll out a new product classification: Sephora Blue. While Sephora Blue will focus on ingredients and testing practices just like Clean at Sephora, Sephora Blue will take sustainability to the next level, only awarding those products with sustainably sourced ingredients its coveted blue seal.

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Requirements for clean at Sephora, defined in this graphic, are about to get an upgrade with the launch of Sephora Blue. Photo credit: Sephora

As big-name companies like Sephora expand their sustainability initiatives, redefining cleanliness and environmental consciousness, others will undoubtedly follow suit. Like most social consciousness endeavors, sustainability owes much of its success to peer pressure. No company wants to fall behind, lest they lose their customer base. As a result, companies often vie for the award of being the most environmentally conscious, especially in the beauty industry, where loyal consumer bases are an invaluable commodity, and public image is everything. Ultimately, clean beauty will only continue to increase in popularity. No longer a select few brands stashed on two shelves at Sephora, clean brands have not only conquered, but completely overhauled the beauty industry, and they’re just getting started.

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Fad or the Future? Recently, NFTs, or non-fungible tokens, have taken over the world of e-commerce. From artistic renderings to video files, these members of the blockchain family are lucrative, futuristic, and all the rage. Now, fashion companies are capitalizing on the trend, giving us a potential glimpse at not only the future of consumerism, but the future of the fashion business. However, the question remains: Are NFTs just a fad, or are they the future? So, what are NFTs? According to The Verge, NFTs, or non-fungible tokens, are units of data stored on a digital ledger, the now-infamous blockchain, that certifies a digital asset to be unique and therefore not interchangeable. While part of the cryptocurrency family, NFTs differ from Bitcoin, as Bitcoin is a fungible token, meaning that it can be traded as an interchangeable good. In an NFT sale, all computers are hooked into a cryptocurrency network that records the transaction on a shared ledger—a blockchain—technically making it part of a permanent public record that serves as a certification of authenticity that can neither be altered nor erased. NFTs come in many forms, but they are typically photos, videos, audio, and other digital files. And, while they’ve been around for a while now, they’ve only recently become popular. At a recent Christie’s auction, artist Beeple sold an NFT for $69 million, a new record. Twitter founder Jack Dorsey sold his first tweet from 2006 for $3.2 million. The iconic Nyan Cat gif sold for almost $600,000, a shoe collaboration between design studio Rtfkt and digital artist Fewocious raked in $3.1 million for digital renderings of custom Nike Air Maxes, and Kate Moss sold a series of videos for $16,000, according to L’Officiel.

A still from one of Kate Moss’s NFTs. Source: Vogue

However, you may have noticed that you can still google and save gifs of Nyan Cat and his rainbow Poptart body, despite it having “sold” for more than half a million dollars. So, what makes an NFT special? And, more importantly, what is the point of buying an NFT if its likeness are still available publicly? These are both excellent questions. And, for those of

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us unfamiliar with the nuances of blockchain, they’re imperative to understanding why NFTs exist in the first place. Essentially, NFTs are special in that they create a digital object that can be bought and sold out of something otherwise intangible and publicly available. Take Jack Dorsey’s first tweet, for example. This tweet is still online for everyone to see—if you scroll to the very beginning of Mr. Dorsey’s feed, you can still see and access this tweet—you can even retweet it or comment on it if you want to. By making this tweet into an NFT, Mr. Dorsey has packaged his tweet into a digital object with a digital signature—a virtual “seal of authenticity”—denoting that it is, in fact, Jack Dorsey’s original tweet. So, what is the point of buying an NFT? In short: bragging rights. With an NFT, the buyer isn’t paying for the copyright or the trademark—they’re paying for the clout. The main appeal of an NFT is the knowledge that you didn’t copy and paste Nyan Cat from Google Chrome—you own the original work, digital signature and all.

The first pair of NFT Gucci sneakers by artist Wanna retail for $12, but they’re not real. Source: The National

While it seems crazy to spend upwards of a million dollars on an original copy of a digital file you can download for free on the internet, this obsession with having an authentic digital work speaks to twenty-first century consumer behavior. Gen Z, the largest and most important consumer demographic, grew up in the digital age. As such, it is unsurprising that e-commerce

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based on buying pieces of the internet would be popular among these tech-saavy, bragging rights-oriented consumers. Now, high fashion brands are likely to get in on the NFT action; that is, if the NFT bubble doesn’t burst first. Gucci has already ventured into the digital universe via Pokémon Go, launching its Gucci x North Face collection on the gaming platform. However, this is only the tip of the iceberg. For high fashion, NFTs could not only prove to be extremely lucrative, but they could also target new consumer groups as well as help increase brand desirability and exclusivity. First, NFTs could be great moneymaking opportunities for high fashion. Because an NFT can be any digital file, luxury labels could sell previously “worthless” things, such as their ads, fashion videos, Instagram posts, and even runway and fashion week tapes. NFTs could also bring in steady royalty payments for brands. According to L’Officiel, it was recently discovered that Beeple, the same artist whose NFT sold for $69 million at Christie’s, stands to make a 10% royalty every time one of his NFTs is sold on a secondary marketplace. Currently, luxury brands see no revenue from the sale of their goods from secondhand retailers such as 1st Dibs, The RealReal, and Vestiaire Collective. However, if Cartier, for example, were to attach an NFT to its Balon Bleu watch, the brand could receive a royalty from the resale of that watch thanks to its NFT Second, NFTs could help the high fashion market target new consumer demographics. Not only would NFTs allow luxury labels to reach fashion-forward gamers and those with significant online presences, but they would also reach non-fashion-conscious collectors who are looking to buy a Louis Vuitton NFT, per say, for the exclusivity rather than the actual item. Finally, NFTs could help curb the counterfeit issue constantly facing high fashion. If oftencopied goods, like handbags, were to have an NFT attached to them (in addition to the physical bag), this would not only make the bag more valuable, but it would better separate the real products from the fakes. In this case, NFTs would act as advanced, uncopiable serial numbers. This would, in turn, boost brand desirability, and even more importantly, brand exclusivity. Some luxury companies have already capitalized on the crypto boom. On Wednesday, it was announced that LVMH, Prada Group, and Cartier had formed their own blockchain group, the Aura Blockchain Consortium, designed to promote a single global blockchain secured by ConsenSys and Microsoft for the high fashion community. According to Vogue Business, Bulgari, Cartier, Hublot, Louis Vuitton, and Prada are already active on the platform. Ultimately, though difficult to explain and mind boggling in their value, NFTs are fascinating pieces of the crypto puzzle that will likely remain a part of consumer culture for a longtime to !2 3

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come. While I don’t fully understand them yet, I don’t think they’re just a fad. As our world becomes increasingly digital and e-commerce becomes substantially more sophisticated, I believe NFTs give us a good idea of not just the future of the fashion industry, but of consumerism in general. Ultimately, NFTs will only make the post-pandemic fashion industry that much more cutthroat, as brands compete against each another in retail, e-commerce, and now the ever-changing, wildly complicated cryptoverse, too.

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Stocks To Watch

Clean Beauty Revenues, 2018-2020







From resale, to beauty, to mainstay fashion labels, here are the stocks I’m watching in Q2.




FY Results, 2019-2020

€ (in billions)






Active Cosmetics Revenue


Easily one of the most iconic beauty brands on earth, the


L’Oréal Group boasts more than 40 makeup, skincare, and haircare brands. From iconic labels like Yves Saint Laurent cosmetics to clean beauty-centric brands like La Roche Posay, L’Oréal has something for everyone.

$6 $0


Revenue, in billions of €


Net Sales

Operating profit

FY 2018

FY 2019

Not only are its financials and brands arguably better than rival Estée Lauder, but L’Oréal has a better handle on clean beauty. Thus, while it maintains its classic labels, it also knows how to capitalize on profitable fads.

FY 2020

After a rough few years of lagging numbers and

Key Figures, Q2 2019-2021 et

N es

l Sa et

N co

In m e




leadership turnover, Tapestry finally seems to be back on track. While the parent company of Coach, Stuart Weitzman, and Kate Spade isn’t posting revenues on par with conglomerates like LVMH and Kering, it has slowly returned to profitability, even amidst the COVID-19 crisis. With innovative ad campaigns and collaborations, quality products, and improved social media engagement, Tapestry is finally turning the corner toward being a stable company.








$1,200 $1,600 $2,000

$ (in millions) $ (in millions)





co In

GMV & Revenues, 2019-2020


Q2 2019

$200 $100 $0

Q4 2019

Q2 2020


Q4 2020


Q2 2020

Q2 2021

As the luxury resale rage rolls on, The RealReal has become the premier secondhand retailer, opening new store fronts and consistently increasing its inventory despite the pandemic. And, while the company’s stock is arguably a bit overvalued at present, The RealReal boasts strong financials, almost matching both its prepandemic gross merchandise value (GMV) and revenues. !2 5

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Final Thoughts What to Expect in Q2 of FY 2021…. With the world finally returning to some semblance of normalcy thanks to the long-awaited COVID-19 vaccines, the economic terrors brought on by the pandemic seem to have finally abated. For the fashion industry, this means the end of interminable lockdowns in almost every market, an increase in discretionary spending by consumers, and the return of in-person fashion shows. However, the effects of the COVID-19 pandemic have also permanently changed the fashion industry. Many luxury houses are altering their fashion calendars, allowing creative directors to drop collections at random, rather than requiring one every season, e-commerce has become more important than ever before in reaching consumers, and crypto has finally infiltrated the previously stagnant world of high fashion, and beauty and tech have become synonymous. As a result, the fashion, beauty, and luxury industries are more competitive now than ever before. Overall, I expect an exciting, vibrant, and futuristic Q2, characterized by continued innovation across the fashion, beauty, and luxury sectors, new social media initiatives to increase consumer engagement, the invasion of NFTs into high fashion, and a fight for greater share of the clean beauty market. Finally, in regard to the luxury conglomerates, I believe LVMH will only continue building upon its post-pandemic success, hopefully topping its pre-pandemic Q2 2019 numbers in Q2 2021, just as it did in Q1. Kering and Richemont will likely follow suit, and although I don’t see such a drastic move happening in Q2, Kering appears to be in prime position to make an acquisition some time during FY 2021, and, as I’ve written about before, Richemont would be an excellent choice—but don’t get your hopes up. In closing, I am optimistic that Q2 will continue the fashion industry’s impressive post-pandemic rebound and look forward to the undoubtably exciting new developments it brings with it. Until next time, Carolyn

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References & More Sources, By Page -(pg. 6) LVMH Q1 2019 Presentation -(pg. 6) LVMH Q1 2020 Presentation -(pg. 6) LVMH Q1 2021 Presentation -(pg. 6) Kering Q1 2020 Presentation -(pg. 6) Kering Q1 2021 Presentation -(pg. 6) Richemont Q3 2020 Press Release -(pg. 6) Richemont Q3 2021 Press Release -(pg. 10) LVMH Q1 2019 Presentation -(pg. 10) LVMH Q1 2020 Presentation -(pg. 10) LVMH Q1 2021 Presentation -(pg. 10) Kering Q1 2020 Presentation -(pg. 10) Kering Q1 2021 Presentation -(pg. 10) Richemont Q3 2020 Press Release -(pg. 10) Richemont Q3 2021 Press Release -(pg. 25) L’Oréal 2019 Annual Report -(pg. 25) L’Oréal 2020 Annual Report -(pg. 25) Tapestry Q2 2019 Report -(pg. 25) Tapestry Q2 2020 Report -(pg. 25) Tapestry Q2 2021 Report -(pg. 25) The RealReal Q4 2019 Report -(pg. 25) The RealReal Q2 2020 Report -(pg. 25) The RealReal Q4 2020 Report *The above list does not include sources cited within previously published articles..

Photos, by Page -(Cover/pg. 1) Zoe Magazine -(pg. 7) The Impression -(pg. 11) WWD -(pg. 14) Chanel -(pg. 16) Glossier -(pg. 18) Tower 28 Beauty -(pg. 21) In the order in which they appear: Vogue, Business of Fashion -(pg. 22) The National -(pg. 28) From top to bottom: Grazie USA, The Verge (Beeple’s $69 million NFT), Fashion Gone Rogue *The above list does not include photos cited within previously published articles. !2 7

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© 2021 Carolyn Hammond !2 8

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