Tiffany's, The Gap, "Snackable" Skincare, LVMH News
A "snackable" skincare company gets $2.4 million in funding, The Gap lays off 1,800 employees, and LVMH exceeds half a trillion market value.
Hello beautiful people!
Welcome back to The Devil Wears Data, a newsletter I send out every weekend to summarize all the big numbers and the latest business news in the fashion and beauty industry so you can stay informed about the stuff you buy.
This newsletter has grown over 130% since last week, and I’m so beyond grateful to have you here. If you have any feedback (good or bad), have a company you want to see covered, or anything else, you can always reach me at [email protected]. Since this newsletter is only a few weeks old, I’d love any feedback I can get!
The news is split into two sections: fashion news and beauty news.
Fashion News by the numbers:
Tiffany & Co. aims for $400 million in sales
Tiffany’s, the famous diamond and jewelry company, launched a flagship store in New York City this week. In a new Bloomberg interview, CEO of Tiffany’s Anthony Ledru, says that he hopes the sales of this store will double that of the temporary Tiffany’s store that existed before it, which made $200 million in sales. It’s not totally crazy to aim for a number like $400 million, considering the jewelry market is showing positive growth. It is currently worth an estimated $340 billion globally, and is projected to grow to $482 billion by 2030, according to Grandview Research. Another surprising thing: jewelry sales went up during the pandemic, unlike clothes, beauty, fragrance, and hair products which took a hit. Turns out that people don’t stop buying necklaces and earrings even when they’re in quarantine.
The inside of the store uses digital screens as “windows”. Credit: Tiffany & Co.
Kering brings in $5.6 billion this year
Kering, the conglomerate that owns Gucci, Balenciaga, and so many others, had subpar sales and earnings results for the first three months of 2023 (you can read the full report here). Sales were up just 1%, lagging behind its rivals like LVMH. The company brought in $5.6 billion USD (or 5.1 billion euros) in sales, and Balenciaga is still struggling to pick itself up after the disaster last year involving kids in ads. Gucci, another brand that’s huge for Kering’s portfolio (see chart below), was down in 2023 compared to previous years. To recession-proof the company, Kering is going to focus on ultra-rich customers, who make up just 5% of their customer base but are a significant portion of their revenue. (This is also what Tiffany’s is doing, according to the article I pasted above). Brands do this because the ultra-elite are less likely to lose their jobs and lose spending power during a recession, unlike middle class and lower class folks whose quality of life will be impacted by economic downturns.
Graph created by The Devil Wears Data to show that Gucci outperforms other brands under Kering.
The Gap lays off 1,800 to save $300 million
Sad times at The Gap. The company cut 1,500 corporate jobs this week, in an effort to save $300 million for the brand. The company is trying to navigate a slowing economy and inflation, and unlike the brands we discussed above (Kering and Tiffany’s), The Gap can’t really cater to the ultra-rich (at least not yet anyway, unless they make that part of their strategy, who knows!). Apparently The Gap has been struggling for a while (it used to be so cool in the ‘90s and ‘00s, being at the forefront of trends like jeans and corduroy with super memorable commercials). I’m curious — when’s the last time you shopped there intentionally? Feel free to use the email address I provided above to answer that!
LVMH’s market value exceeds $500 billion
LVMH, the conglomerate that owns brands like Louis Vuitton and Dior and so many others that we use and wear, had its market value surpass $500 billion this week, becoming the first European company to reach that milestone. It was in part thanks to booming luxury item sales in China (remember what I said above about the rich loving to spend even during times of recession and inflation?). This has made the world’s richest man, Bernard Arnault, (who I discussed in my newsletter last week) even richer. His fortune stands at an estimated $212 billion, according to Bloomberg Billionaires Index.
This 2022 chart illustrates the rise of LVMH’s market value in the 5 years prior, going from around 125 billion euros in 2018 to 400 billion by 2022. Credit: Reuters.
Beauty News by the numbers:
Sex sells at Sephora, $112 billion market
This week, a sexual wellness brand called Tabu launched at Sephora. Tabu’s products focus on sexual health for women over 50. The brand said “80% reported an increase in their libido” using these products. Sexual wellness products are on the rise, and Sephora first got into the game with the launch of Maude, which started selling in their stories in March of this year. According to some data, the sexual wellness market is going to be worth $112 billion in 2030, compared to $84 billion in 2022 — and a majority of sexual wellness products are increasingly purchased online.
$2.4 million for…snackable skincare?
I thought “snackable skincare” would mean taking your vitamins from a pharmacy and eating your veggies (both of which are good for the skin), but apparently it’s an entirely different category of beauty at Sephora that venture capitalists (aka people who invest in private companies to try and make a high return on those investments) are focusing on. A 3-year old brand called Sourse just raised $2.4 million in funding, at a time when beauty brands are having a harder time raising venture funding. Will this be a short-lived trend or a longterm revolutionary change in the crowded skincare market? Do you see yourself eating chocolate bits from Sephora if it promises better skin? It’s hard to say how successful this category will be this early. Sourse is currently available at Sephora and Whole Foods, and the article doesn’t say what they plan to do with the additional funding.