Luxury Headlines – 28/05/2024
Luxury Headlines – 28/05/2024
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L’Oréal Announces Partnership with EcoDesignCloud
L'Oréal's luxury division is partnering with data solutions company Eviden's EcoDesignCloud to implement more sustainable practices. The software analyzes the environmental impact of in-store displays, promotional gifts, and other retail elements. By collecting this crucial data, L'Oréal can identify areas for improvement and develop more sustainable solutions throughout the customer experience. The technology relies on 16 criteria, including carbon dioxide emissions. L'Oréal's luxury brands, such as YSL Beauty and Prada Beauty, will benefit from this partnership by developing more eco-friendly solutions.
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LVMH Leans into Partnership with Alibaba
LVMH is strengthening its partnership with Alibaba, China's e-commerce leader, in a move to boost its China presence despite a recent economic slowdown. LVMH will leverage Alibaba's cloud and AI capabilities to enhance its online presence, highlighting the growing importance of online shopping, even for luxury brands. LVMH already has a strong presence on Alibaba's Tmall platform with unique digital services like 3D product displays, virtual try-ons, and live streaming. The new agreement further expands their collaboration, granting LVMH access to technology from Alibaba Cloud to optimize supply chain processes and gain deeper customer insights.
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Chanel Sales Hit Record $20 Billion Despite Market Slowdown
Chanel's revenues grew by 16%, reaching a record $19.7 billion at constant exchange rates fueled by double-digit growth across all categories, which continued into the fourth quarter. According to CFO Philippe Blondiaux, price increases played a pivotal role in sales growth. Despite a slowdown in the luxury industry, demand for iconic Chanel items remained constant. Operating profit has grown by 11%, reaching $6.4 billion. In 2023, privately held fashion brand Chanel, with a $1.2 billion investment budget, opened 47 new stores. Of these, 31 were dedicated to beauty and fragrance stands and boutiques. In the face of economic challenges, Chanel remains resilient, continuing to invest in stores, supply chains, and new talent. Despite China’s uncertain economic environment, Chanel will continue investing in this region. With only 18 stores compared to 45 or 50 for its luxury rivals, Chanel is determined to expand its network specifically in mainland China.
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Prada Focuses on Internal Growth with No Current Merger and Acquisition Plans
While speculation around increased M&A activity has been ripe, Prada stated that it remains focused on internal growth; the Italian luxury landscape faces potential disruption, fueled by Giorgio Armani's recent comments hinting at a future merger for his fashion house. The Italian luxury sector has traditionally followed a model of independence and family control. However, Prada CEO Andrea Guerra highlighted the company's commitment to Italian know-how through supply chain investments. The company has acquired a stake in Superior Tannery and partnered with Zegna on cashmere and knitwear specialists.
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Aura Blockchain Creates Digital Passports For Millions of Luxury Goods
The Aura Blockchain Consortium has created digital "passports" for over 40 million luxury items. These passports contain detailed information about the items, accessible via NFC chips or QR codes. Examples include Prada's Eternal Gold fine jewelry, Loro Piana's Linen André shirts, and more than 800,000 items from OTB Group brands. Luxury brands are embracing sustainability by adding digital product passports (DPPs) to their products. According to the EU, these DPPs will provide customers with more information about the items and are expected to become mandatory by 2026. Founded in April 2021, Aura is the leading blockchain partner for luxury goods and has forged alliances with LVMH, Prada Group, Richemont, and OTB Group, which joined as a founding member.
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