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The Glossy Podcast
Kering’s luxury slump, Louis Vuitton's price hikes and Another Tomorrow’s push for circular fashion
01:06:29
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- [00:02]
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- [00:52]
Danny Parisi
Hello and welcome back to the Glossy Podcast. I'm your host, senior fashion reporter Danny Parisi, and I'm here with our reporter Zofia Zwinglinska. Hello, Zofia. How are you doing?
- [01:02]
Zofia Zwinglinska
Doing good. How are you doing?
- [01:04]
Danny Parisi
I'm great. I'm excited to chat about the industry with you later in the episode. Actually, Zofia, you have a discussion with Vanessa Barboni Halleck, who is the co founder and CEO of another Tomorrow, where you guys talked about digital product passports, sustainability, you talked about their store expansion, lots of cool stuff. So that will be later in the episode. But first you and I are gonna discuss some big things happening in the industry this week. First, I want to talk about Kering's earnings, which were reported this week and were not so good. We'll talk about why and how and how they're going to try to address that, mainly in the form of Gucci not doing so hot. And that's a huge part of their revenue. So we'll get to that. We will talk about Louis Vuitton raising their prices, the effects of that, particularly in the US you can imagine what might be the culprit. I'm guessing it's tariffs. And then finally we're going to talk about the, the war on woke. And by that I mean the kind of big companies like Target that have rolled back DEI initiatives under kind of intense pressure from the president and the immediate negative effect they felt. And the companies like Levi's that have done the opposite, that have kind of stood by their, their diversity efforts. But let's get to that last. So we'll, we'll start with Kering. Kering reported their earnings this week and it did not look so good as a group there, you know, across the whole portfolio there was a 14% decline. And specifically at Gucci, we're looking at like a 25% decline. It is not great across the luxury industry right now, but specifically for Kering, I think they are doing worse than some others. It's not a great time. And Gucci is like half their revenue I believe. So when Gucci is not doing well, the whole group is not doing well. Why don't you start? Zofia, what do you make of the fact that Kering has kind of been struggling? It's not their first quarter of kind of bad results either. What do you think's going on?
- [02:53]
Zofia Zwinglinska
Yeah, I mean I feel like it's quite interesting because it's what you mentioned. The group has been experiencing this almost slowdown for a couple of quarters and I feel like the efforts at Gucci haven't been big enough to counter for these effects. I think that there's been initial kind of gradual campaigns. Last year like you saw that with some of the new collections as well as the kind of big campaign. There was a lot of big signage happening in London when that was around, but it didn't feel like that made enough of an impact. I'm wondering with Alessandro, is that because his idea of Gucci was so strong that it's very hard to kind of change and top that or is it just that customers don't seem to care about Gucci anymore?
- [03:42]
Danny Parisi
Yeah, I mean I definitely think the kind of period of rudderlessness that Gucci was in kind of, they were without a creative director for a while and. And then before that Sabato di Sarno was kind of living in the shadow of Alessandro Michele, like you said. I feel like they're sort of just in an identity crisis moment. And again there's such a big part of caring that kind of any issues at Gucci, you know, filters out to the whole group for luxury as a whole. The other big thing is the two kind of biggest luxury markets in the world, which is the US and China are like at war with each other economically speaking. And they've been rivals obviously for a while, but they're currently in a trade war that's kind of damaging both countries economies partially or maybe even mainly self inflicted on the American side with tariffs and everything. That's obviously eating into, like I said, two huge markets for luxury. And I think you can see, I mean covering earnings and the movements of big luxury groups over the last couple years, you can see them kind of shifting back and forth. Like when China's up they're like we're moving more focus to China, we're opening stores there and stuff. And then when it's down they're like, well we're focusing more on North America and Europe at the moment. They kind of like just kind of go whichever way things are flowing. And then right now both countries economies are kind of hurting again from a kind of unnecessary trade war. So that's going to have obvious impacts on luxury as a whole and Kering in particular.
- [05:07]
Zofia Zwinglinska
Yeah, definitely. And just to add to that, obviously the main kind of story is Gucci, but you're also seeing some of a slowdown with its other brands. I think Saint Laurent was down 9%. So it's not just Gucci where I guess the customer demand isn't quite as strong. Conversely, obviously Bottega Venta is doing relatively well. I think that it's got shown some retail growth. I think they talked about the brand still having high brand desirability and younger customers are also more interested in it as well as Vic's. Whereas the same cannot be said for Saint Laurent. And especially on, as you said, the reliance on markets like China. It seems to be doing a little bit worse there.
- [05:53]
Danny Parisi
And I'm forgetting, did Louise Trotter start at Bottega already?
- [05:58]
Zofia Zwinglinska
Not yet, no. I believe her first collection is coming in later this year.
- [06:03]
Danny Parisi
Okay. So that will be interesting to see just as a kind of growing part of Kering's portfolio, how Bottega kind of fits into the picture. Also on that note, we have Demeno coming in at Gucci, who will have his first collection, I think somewhat soon as well. He was a huge moneymaker for caring at Balenciaga. He ballooned Balenciaga's revenue from when he started to. I don't have the numbers in front of me, but it was many multiples of growth from when he started to when he departed at Balenciaga, which is another caring brand. So they're certainly, I think, banking on having another like big personality with a super distinct style and a proven financial track record. Kind of in the vein of Alessandro taking over at Gucci. So I'm not a business expert, but seems to me like a smart move. He's like probably one of their most successful creative directors that they have in their stable already. So moving him to their biggest brand doesn't seem like a bad idea to me. But I guess we will see because the same creative director does not always have the same kind of success at different brands. Like Gucci and Balenciaga are certainly similar and share some DNA, but they're not the same brand.
- [07:08]
Zofia Zwinglinska
Yeah, definitely. And on the kind of tariff impact side of things, they've got a lot of brands in that jewelry space. I know that the price of gold has been fluctuating, so I'm wondering if that's affecting their. Their bottom line too. Boucheron is obviously a big brand for them, but I think they had relatively flat performance and some positive growth in North America as well. And yeah, very interested to see also what Balenciaga will kind of look like over the next couple of seasons because that will be a very different identity. And as you said, it was very much rooted in Demna's kind of aesthetic. And I'm wondering what the next shift will be.
- [07:48]
Danny Parisi
Yeah, for sure. Cool. Let's move on to another luxury brand and big luxury group. Louis Vuitton is raising their prices this week. That's not the most shocking news. They raise their prices all the time. The interesting thing to me was that it seems like the prices are going up more in the US Than compared to some other markets. I saw some reports said this week their US prices were up 5% and markets like France or Japan were only up 2 or 3%. So the obvious kind of culprit here is likely tariffs. I listened in on LVMH's earnings call last week, and tariffs were like the number one thing that every question at the, you know, they do the Q and A section at the end, every single question almost was about tariffs. And Louis Vuitton does produce a good amount of stuff in the U.S. i think it's about a third of Louis Vuitton goods that are sold. Not a third of all Louis Vuitton goods, but a third of Louis Vuitton that's sold in the US Is made in the US which is bigger than I was expecting. I didn't realize that. But that also means 2/3 of it are not made in the US which means 2/3 are subject to at least 10% tariffs and depending on where it's coming from, even more so. I don't know. What's your take on Louis Vuitton's price strategy here? And just luxury in general?
- [09:02]
Zofia Zwinglinska
Yeah, I mean, as you mentioned, the fact that Louis Vuitton produces some of its products in the US and I read a note from Bernstein that said that 13 of their SKEs, including the carryall, the biker, and the graceful Rangers, could potentially be produced there because those are the items that did not have an increase on their prices. And obviously Louis Vuitton doesn't break it down in terms of which products are produced where I'm assuming that they're trying to keep it quite general. And all of their products say it's either made in France, Spain, Italy or the US to kind of blanket term the whole thing. But I do think that having some manufacturing in the US will potentially at least stabilize some part of that business. Accessories are always something that keeps brands going, especially through tougher periods because it is seen as more of a stable kind of section. And Louis Vuitton has seen some success with younger customers with the carryall, some wondering with both of those things maintaining some stability, it could end up to better growth for the brand. However, I did also see that HSBC has downgraded Louis Vuitton, so I'm not sure in terms of long term growth how well they're going to be able to do even with the price increases.
- [10:24]
Danny Parisi
Yeah, absolutely. In the call with LVMH on their earnings call, they talked a bit about possibly moving some production to the US to kind of like increase the amount of stuff that's made there. But it was very non committal to be honest. Didn't sound like there was a lot of heart behind it. They kind of just floated it as an idea. They were like we're still monitoring the situation, maybe we won't do it. So that's a possibility. A quick aside, I think I told you this the other day, but I recently went to buy a new tablet. Like I had a Kindle and I liked the paper screen but I didn't want to have. I didn't want to be locked into Amazon. I bought a tablet from this company called Supernote or, sorry, the company's called Radha and the product's called Supernote, but it's a small Chinese brand. They make these really nice tablets but it's like a small operation. Right after I bought it they made an announcement that they were just pausing all orders to the us they're just not. At least for a couple of weeks. They may resume it. But we've talked about companies raising their prices to handle U.S. tariff rates and stuff, but that was the first one I had seen that was just straight up like we're not going to sell to the US for a couple of weeks. I bring it up because one in the comments of this post there were a lot of European people gloating that they could still get it. So good for you guys. But also that I wonder if Louis Vuitton is big enough it can absorb the extra costs of exporting to the US or moving production to the us But a lot of smaller companies. This company is not fashion, but the same thing applies if you're a small fashion brand based outside the US and your options are raise your prices on American customers or absorb those costs yourself. Another option is you just stop selling in the U.S. or at least you just retreat from the U.S. a little bit. Just de. Emphasize it. Like we were saying, with big luxury brands, when things are going towards China, they kind of shift their focus for a smaller brand. You might be worth it to just not even sell in the US Entirely, which is kind of a sad kind of reality. But I don't know, I wonder if we will see more kind of fashion companies doing that again. Obviously probably not Louis Vuitton because the US Is still a big market for them, but just kind of that. That deprioritizing of the US or shifting away from the US Might happen.
- [12:34]
Zofia Zwinglinska
Yeah, definitely. And you're already kind of seeing that already with customers not willing to travel to the US when prices go up there too, across a range of products, it might make things even less attractive. I know some brands, one that I spoke to today was talking about how it's actually moving some of its allocation around marketing more into Europe as well as kind of expanding into the Middle east, just because the kind of customer segment that they're looking at is relatively similar to the US and apparently the custom situation in the US Right now is really difficult. So it makes it more worthwhile for them to just shift it within the customs and kind of logistics sections, which are actually working.
- [13:20]
Danny Parisi
Yeah. And again, when the rules change every couple days, it's like really impossible to have any sort of strategy. Let's move on to our last topic. So I wanted to talk about this very aggressive, what you might call the war on woke in the last couple months by that. I mean, the Trump administration has made it very clear that they do not approve of DEI initiatives at American companies. And as much as they can, and in many ways that they're not really having the legal authority to do, have been trying to stomp out any kind of diversity initiatives, DEI programs at big American companies. I think it's not really going the way that they hoped. The big example that we've seen people talking about is Target caved to the pressure in January and made a very public rollback of a lot of its diversity initiatives starting the week after that. And for the past 11 weeks, they've had a straight decline of foot traffic and revenue. Obviously, correlation does not equal causation, but I think there's pretty good evidence that those two are related. There's been an immense amount of backlash. There's been boycotts. I think it's Pretty clear that giving into that pressure had an immediate negative impact on their revenue. There's more we can go into, but I'll pause there and ask your thoughts on. Again, as an outsider's perspective, it's been very interesting to hear a non American's thoughts on what's happening here.
- [14:43]
Zofia Zwinglinska
Yeah, I mean, I think that the EU is notably very kind of pro dei, so seeing what some of the largest companies in the world in the US are doing is quite shocking, especially, I guess, if you consider how important customer trust is right now, and also just how easy it is to switch retailers or to buy something online or to go to Amazon. You know, if those companies, or, you know, in general, if other companies have the same product or a similar product, they might literally just blacklist you as, as a brand or as a company and not shop there. And to be honest, like the, I guess the fallback, the blowback, sorry, from all of this can be much longer than just like the initiation of this, like, DEI kind of backlash. It can end up taking years for a customer to end up returning to that company or coming back to Target, because they know that that's not important for them. They did behave like that in the past. Similarly, I think just most fashion things don't tend to have a very long memory. We've seen so much backlash where customers do end up coming back. But I feel like with these bigger companies like Target, people will remember this and they'll kind of make their decisions accordingly when they're shopping.
- [16:06]
Danny Parisi
Yeah, yeah, I think you're absolutely right. And for years people have been telling me, people in the industry that, like, customers want, you know, to shop at brands that share their values. They want to shop at places that, like, have integrity. And it's like a company that's like, we support diversity until we get the slightest amount of pushback, and then we immediately will, like, burn it all. It's like that. Whether you're someone who values that or not, it does show, like, a complete, just like no backbone kind of appearance. There's kind of a lot of caving going on. The Trump administration has been putting extremely heavy pressure on law firms, for example, basically threatening and extorting pro bono work out of them, threatening universities and sending them kind of like menacing lists of demands, threatening businesses, threatening media publications, which is relevant for us. But there's actually, I think, a growing kind of number of these institutions that are not caving. Not enough. But there's a good amount. I mean, Harvard obviously is in the middle of a huge lawsuit against the federal government over what it said were pretty extreme, far reaching demands that the government made, which the Trump administration then was like, oh, that was an accident. We sent those by accident. But also we still, I don't know, it was so confusing. They're trying to backpedal. On the fashion side, a notable one was Levi's. This week they received a proposal to their shareholders to abolish all DEI programs and they put it to a vote. And the vast majority, I think it was like 98% voted not to retain their DEI programs, to not cave to that pressure. Outside of fashion, there's also been like Goldman Sachs just did the exact same thing, put it to a vote, and their shareholders voted overwhelmingly not to cut those programs. We were just saying before the recording, I think the administration had not been so aggressively heavy handed about forcing people to stop. Probably more would have acquiesced just naturally. But because of the, again, just extreme direct threats to companies that have any sort of DEI programs. I think that activated some contrarian feelings in some people. And especially the more like with the law firms. I think at first a lot of them were kind of giving into whatever menacing letter they received from the Trump administration. But then once one or two started to kind of like push back, I think you see a little bit more of a snowball effect where others do as well. So I don't know, it's really weird time for fashion. I wouldn't be surprised if we see more companies like Levi's kind of doing the same thing where they put it to a vote. Should we cut our DEI programs? And they say no?
- [18:39]
Zofia Zwinglinska
Yeah, definitely. And I think especially for brands that have very strong link with a bigger demographic or with a more diverse demographic, Levi's I think is kind of such a ubiquitous brand, but also just anyone can wear it. And I think that as a result, if you don't end up sitting with your customers and understanding their values, you can again lose them very quickly. Like, there's so many denim brands out there that it just ends up being, you know, a kind of what's the point of supporting this brand if they're not supporting me? Essentially?
- [19:16]
Danny Parisi
Yeah. Cool. Well, I think that's all the time we have for our Week in Review section. But like I said, we're going to pass it over to you. Zofia, you have a conversation with Vanessa Barboni Halleck from another tomorrow. Can you give us a little preview before the break of what you guys talked about?
- [19:30]
Zofia Zwinglinska
We. Yeah, of course. So the brand has had a little bit of A reawakening. It's opened a new store in soho and obviously it's one of the biggest players in the sustainability space. And we're recording this during Earth Month and specifically this week, it was Earth day on the 22nd. So very interested to kind of introduce Vanessa's take on what sustainability means for brands today. You know, what the kind of pushback on regulation means for a lot of these brands and how they're still, I guess, similarly to what we talked about, still going against it, still trying to put up the good fight and make sure they're building more responsible brands.
- [20:11]
Danny Parisi
Well, that sounds like a great conversation. Like I said, stick around after the break to hear that.
- [20:26]
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- [21:13]
Zofia Zwinglinska
Hi, I'm Sofia Zvaglinska and this is the Glossy podcast. Every week we explore how the fashion and beauty industries are rethinking legacy systems, building new ones and pushing for more responsible growth, whether that's through innovation, investment or radical transparency. This week I'm joined by Vanessa Borboni Halleck, founder and co CEO of Another Tomorrow, the New York based brand that's rewriting the sustainable luxury playbook. Since its launch in 2020, another tomorrow has prioritized traceability, circular design and regenerative sourcing long before these became buzzy terms. Now, as the industry grapples with mounting climate pressure and regulatory shifts, Another Tomorrow is evolving once again with a newly opened soho flagship and a plastic free Myram capsule. We spoke during Earth Month, a time that tends to spotlight performative campaigns. But for Vanessa, it's also an annual check in, a reminder that storytelling means little if it's not supported by systems level change. Vanessa, welcome. It's such a pleasure to have you.
- [22:16]
Vanessa Barboni Halleck
Thank you so much for having me. It's great to be here.
- [22:19]
Zofia Zwinglinska
Yeah. And it's lovely for you to be on. And obviously it's a very important time for sustainability brands, but also kind of brands in general. Thinking about what they're doing around sustainability and for your brand, it's something that has been a core tenet from the beginning. So thinking about Earth Month, it's kind of become a bit of this litmus test showing which brands are kind of serious about sustainability and which are just toe dipping. How are you approaching it this year at another tomorrow? And how has your strategy had to evolve now that there's so much noise and scrutiny around the event?
- [22:55]
Vanessa Barboni Halleck
Well, it's interesting. I think you see a lot less about Earth Month in the press, and in many respects, I think that's actually not a bad thing, because I think it really kind of demonstrates a general distaste for the performative aspects of sustainability. On the flip side, I think it's clear that the work is more important than ever. And it's not controversial to say that we've seen some pretty material backsliding in the case of esg. And I think that brand leadership, especially at a time when, you know, policy is moving forward at a very uneven pace on a regional level, is absolutely crucial. And so for us, honestly, it's really about staying the course, and it's about collaboration, deepening and infrastructure for scale. So really nothing has changed in that regard. But there is a more pronounced focus on corporate and individual action and collaboration relative to policy, at the margin, I would say.
- [24:00]
Zofia Zwinglinska
Yeah, of course. And, you know, obviously with Earth Month, a lot of this is simply about, you know, speaking about what you're doing. How does another tomorrow do it? You know, how do you communicate that?
- [24:11]
Vanessa Barboni Halleck
We really do understand the absolutely critical aspect of storytelling. And I say that because I think people are so disconnected with how clothing is made in the first place. So, on the one hand, we try and really break it down into easy actions that people can follow whether they're purchasing from another tomorrow or not. And a lot of that does emphasize, you know, circularity as well as the role of curiosity for customers, for. Of any brand. But then for us also, you know, it's critical that people understand, you know, from farm to closet, effectively how clothing is made and why those choices at every single step of the supply chain truly do matter. Inclusive of, you know, what the aftercare and ultimate end of life looks like. So it's a bit of a kitchen sink approach. And we do really try and meet the customer and our community members, you know, where they are and at their level of kind of curiosity and awareness, which is highly varied.
- [25:09]
Zofia Zwinglinska
Yeah, absolutely. And, you know, in terms of how the brand started, I'd say that you were one of the first, first movers in the space. You launched the brand before. I'd say sustainable luxury as it's kind of commonly known now was really a trend. You know, does that early foundation give you an edge either in terms of, you know, whether customers trust the brand more or, you know, how you approach the operation side of things?
- [25:34]
Vanessa Barboni Halleck
You know, I think it's both. One of the things that we did from the very outset that I'm a very strong advocate for for all brands is, you know, the digital ID component and the traceability and transparency that comes alongside that. Because I think that customers are increasingly in a mode of, you know, show me. And I think that that's really helpful and I think that that has really helped to engender trust for another tomorrow. We've been very clear from the outset that we have zero interest in cornering any solution. You know, for those of us who care about this industry transforming, it's sort of like antithetical to think about not wanting to share what we've developed and wanting to open source what we've developed. And so we don't view sustainability as ideally any kind of lasting competitive advantage because we want the industry to evolve and shift the brand in terms of product, in terms of supply chain infrastructure, et cetera. Is all the foundational work that we've done from day one, essentially developing a custom materials library that is in many cases, as I reference Farm to Closet, really thoughtfully, science based, sustainable across multiple different parameters and being able to really produce into that materials library with our ethical production. So that has been an absolute game changer for us because I think what we find and where we find a lot of brands struggle is you cannot reinvent the wheel every season. It just does not work at the current level of solutions in the market. And so to really develop that supply chain infrastructure from the get go has allowed us to really grow and actually deepen our impact without bottlenecks.
- [27:23]
Zofia Zwinglinska
Yeah, I can definitely imagine that that's challenging enough to have to do it once, to have to do that multiple times a year throughout collections is even more difficult. Just for our listeners. Farm to Closet means basically that you're tracing something literally from the place it's made. Whether that's if it's cotton, then where the cot grown all the way through to the finished product. But you did mention another term and that's digital IDs, and that's something that I've been covering a little bit for Glossy. It's focused on giving a kind of digital identifier to every piece of Clothing. Tell me how that works for another tomorrow and I guess how you manage to log all of the different kind of elements that go into making a garment.
- [28:10]
Vanessa Barboni Halleck
Yeah, absolutely. So this is something that we did right from launch, which I have to say is a heck of a lot easier when you a brand new brand. But I really advocate everyone to adopt it. So every single item that we've ever made has its own completely unique digital ID. So that means that if there are two black blazers in an Italian size 38 that look identical, they actually have two completely different digital IDs. And that's important, particularly for the resale component. And so the way that our digital IDs work today is if you scan the product, you can see the entirety of supply chain, but you can also leverage that for our authenticated resale and size exchange programs, where size exchange is relevant. And very soon there'll be some additional product registration features. And, you know, it really just maps back to a vast relational database of supply chain information that's now validated by Fairly Made, who's been a wonderful partner to us. So we're really thrilled about that. But we did this for a long time on our own prior to bringing them on. And that's just added an additional step of authenticity and verification that we believe is really, really important. But digital IDs are incredibly powerful for CRM, for your marketing funnel, in terms of being able to really connect with the end owner of the product, which is not necessarily the person who purchased it originally, as well as, you know, for authentication for resale. And so that connectivity for us is fantastic, but it's new. Right? So you do need to continuously make sure that you're messaging this and that you're effectively training the customer to expect this. And I think the more the industry adopts the technology, the more sort of secondhand that will be. But it's still a real point of education.
- [30:07]
Zofia Zwinglinska
Yeah, of course. And I actually was on a Shop Talk panel last year with nobody's child. And DPPs are also something that they've implemented both as a traceability measure, but also, as you mentioned, a CRM tool. What kind of information are you able to add in to a dpp? Because obviously the regulation requirements from next year for most brands are going to be that DPPs are going to be essential. Is that something that you can almost turn around into this marketing tool where you can give more information about the garment to your customers?
- [30:43]
Vanessa Barboni Halleck
Oh, absolutely. I mean, I think that the DPP legislation is not yet incredibly specific in terms of how the information is communicated, but I think digital IDs are the most elegant approach to that. The truth is the brand can supply as much information as that they have about how the garment is made. For us, we're excited that for, you know, our kind of our North Star is to have that farm level relationship and we have that for much of our product. So you're really going down to effectively tier 4. We know of course that that is not always the case and I think one of the beautiful side effects of this legislation is ensuring that brands indeed know their supply chains in the first place. So, you know, it's really up to the legislative framework and then the brand to figure out, you know, what are they going to share, in what manner are they going to share it and ideally deliver it in a way that's actually engaging of the customer so it doesn't sort of die on the vine, which it can certainly do. So I think we're going to start to see a lot more innovation in this space. There was sort of one of those like initial waves or is that hot button Web three moment where we all thought that there were going to be NFTs all over the place. Now I think that we're in a really exciting moment because we're really looking at digitalization, including blockchain, as really critical infrastructure solutions that solve for real business challenges and real opportunities for consumer engagement.
- [32:18]
Zofia Zwinglinska
Yeah, definitely. And we've already seen this on the luxury side of things where kind of authentication using the blockchain is used by Kering and LVMH with Aura Blockchain Consortium. And I think that this will tie in quite well to the general issues around the supply chain that a lot of brands are having right now because of the tariffs. The regulation is going to be set to start next year, but full implementation might still take a couple of years. So I think a lot of brands will be figuring it out and be useful for some of those first movers to give some tips. I'm sure that you're going to be sharing some how to and best practices.
- [32:56]
Vanessa Barboni Halleck
On that too, with total pleasure. I mean, the goal here is to make it as easy to replicate as possible. So I've got office hours. Ping me. Happy to chat.
- [33:09]
Zofia Zwinglinska
Love that. Moving on to your physical retail presence because obviously that's expanded this year and I know that you've had a little bit more room to scale as a result. Your Soho flagship opened that year, a big shift from just being digitally first. Why was it the right time for your brand to go physical and you know, what role does the store play in expressing your values in a physical, kind of tangible way?
- [33:37]
Vanessa Barboni Halleck
Well, you know, the truth is it's been the right time and we've just been hunting for the perfect spot. We were so lucky in Covid that we had a couple of really exciting, kind of like extended temporary retail experiences. And so for us it was crystal clear that it works and makes sense in so many ways for the brand. And so we have been on the hunt and we were absolutely thrilled, thrilled to find our space at 135 Worcester, which is kind of the perfect, the perfect block for us. Clearly, on the product side, this is a really, really high quality, impeccable product. And so to give the customer the ability to touch and feel the level of fabric and construction, et cetera, is really, really wonderful. And, you know, it's great to see so many people coming through the door that learned about the brand, either word of mouth or social or media, what have you, who are really excited to have that kind of tactile and service experience. And we have a wonderful, wonderful team there. But it's also really the seat of community for us and we've had many, many activations there that we consider really meaningful. It's a place to have a nuanced conversation. I've been so blown away by how engaged the kind of, I wouldn't even want to say audience, but like community has been in these, in these conversations, there's real substantive dialogue that's taking place. And we've had an incredible group of people come through, from, you know, venture capitalists to animal rights activists to leaders in the arts. So it's really a multifaceted way for us to have what we view as a really meaningful and actionable dialogue around our brand values and mission.
- [35:30]
Zofia Zwinglinska
Yeah, of course. And how does that end up kind of feeding into what you're thinking about doing as a brand and the kind of engagement that you're thinking about putting on in the store now that you have this physical space.
- [35:43]
Vanessa Barboni Halleck
Well, it's great to see where people's curiosity is. Right. I mean, I think that as companies today, it's really crucial that we have a service oriented mindset. You know, in a world where in particular in this industry there is no shortage of product on the market. I think we all have a responsibility to ensure that what we do produce is serving a need and how we do engage is serving a need. And so it helps to certainly the product feedback is instrumental in terms of, you know, the design process. So we really, really value that that's perhaps not, not unique to us, but also, you know, truly the direction that conversations take and what we hear people are interested in or want to hear more from absolutely helps to inform programming. So it's, it's pretty multifaceted and you know, we also allow our community to, you know, use the space for their communities as well. So if they want to introduce people to the mission and the topics that we're focused on, you know, it's an opportunity for them to bring as well. So it's kind of like a one to many approach of community and we love it.
- [36:56]
Zofia Zwinglinska
Yeah, that sounds really exciting. I know that the store is particularly interesting. I've seen that you have some vintage seating, you've got this loom in the middle of the store, I guess. How do you feel that centers the conversation, pulling it back to the brand narrative around farm to fabric, I guess as well.
- [37:14]
Vanessa Barboni Halleck
Yeah. Interior sustainable interior design and architecture is pretty challenging. Yes. And in that challenge is a tremendous opportunity. And we faced this with our very first retail opportunity. So this was not new to us, but we thought we had a moment in this space and we had to move in so quickly when the opportunity came up to really say, okay, how do we actually make sure that, that the space integrates really not only our sourcing, but our circular design philosophy. And so how do you effectively design for disassembly? And one of the reasons that's particularly interesting for us is that in building this flagship, we're also building a language, right? We're building a visual language for experiences. And so how do we think about how would we take this design language like quote unquote on the road, you know, and so we worked with this incredible architect, Anna Dyson, who is not just a professor of architecture, but also the founder of the Yale center for Ecosystems and Architecture, and really challenged her, which she did not need much challenging because she was already so deeply ensconced in the brand principles. But to take this circular design philosophy and approach it to the store and, and she was the one who came up with this incredible like loom, helix structure because she really used the concept of a loom as the inspiration and then leveraged that with mathematics to create this beautiful helix structure that ultimately is what supports the clothing. And the beautiful thing about that is that can just as easily go up as come down. It can go into, you know, similar design language can come into a different space. You know, all the materials are inherently circular and then the vintage furniture, you know, really just aligns back to that, you know, philosophy around, around circularity. You know, good luck trying to buy a beautiful, you know, sustainably sourced sofa. You know, if you can do it, please, please email me. And there might be furniture in our future as a result, but, you know, if you're on a, on a timeline, have a specific aesthetic, want to, you know, really stay true to your principles around circularity, that was, that was crucial for us. And so in that first dibs was a, was a dear friend.
- [39:49]
Zofia Zwinglinska
Oh, I could imagine.
- [39:51]
Vanessa Barboni Halleck
Yeah. And then we, you know, then the beautiful thing was, you know, we, we've had some furniture that we've used, we've had some incredible books from my personal collection and Liz's personal collection. So a lot of what you see in the space is really deeply personal to us. And even for me, it's really been such a homecoming. And I think as a CEO and leader for many years, I was uncomfortable going there on a personal basis. But I grew up at this beautiful intersection of the arts and technology and academia. And in this particular iteration of our flagship, it's really felt like such a homecoming for me because we've really been able to bring all of those kind of core values that so inform the brand into life, into community. So it's been, it's been really wonderful. And the work that we've done with work of art holdings has been really wonderful. So, yeah, I'm really grateful for the opportunity.
- [40:49]
Zofia Zwinglinska
That sounds amazing. I think it's so nice when you know, you have a unique kind of brand founder and I guess, like identity as well that you can call upon for that visual language. And language, I think is a good starting point when you're thinking about sustainability, because obviously messaging as a brand is so important and so much of the conversations that a lot of the brands have been having recently has been muddied because either there's erroneous use of sustainability language terms are thrown around. How do you do it that you end up communicating very clearly, you know, what sustainability means for you.
- [41:28]
Vanessa Barboni Halleck
Well, we do it in a multitude of ways. You know, one, we have an extremely detailed sustainability section on the website for anyone who is sufficiently curious to really get in there. And I encourage anyone who is sufficiently curious to do that. Which, look, I think it goes back to your earlier question about trust. Right. So it's there if you want it. It's also there if you want it, but by the digital id, but then there are multiple other layers that are required. And so we try and really provide that sort of hierarchy of depth, I think candidly I've probably personally erred on the side of being a little bit overly intellectual and detailed in a way that I think is sometimes harder to digest. And so I think that, that we're personally adapting our communication in two different directions. One is maintaining and pushing even, you know, more of that rigor and detail that has always existed. And the other is, is also not being afraid to really speak about the why of what we do. Right? Because I think that there's a real, you know, when you think about the idea of integrity and authenticity and trust, I think that the core root of all of that is trusting the why. Right? It's like, are you doing this because you think it's a competitive advantage? Are you doing this because it's like the flavor of the day? I think that people want to understand, like, why. Why are you actually doing this? And we just did some wild posting and I wore, I wrote the copy.
- [43:13]
Zofia Zwinglinska
Oh, interesting.
- [43:14]
Vanessa Barboni Halleck
And I kind of shocked myself because in the very first, the very first thing that came to me was this is about love, right? This is about connection. This is about the inherent dignity and humanity, you know, and, and all of it has to come from the. This, this for me, right, comes from this, this place. Now the execution of it is a completely different story, right? Like. Well, I shouldn't say completely different story. It's a more nuanced story that involves, you know, chemicals, protocols and regenerative agriculture and what have you. But like, the why of it is really about our inherent interconnectedness and the respect that I believe comes from that and the love that I believe comes from that. And so it, that feels kind of like diametrically opposite in some ways to, you know, talking about chemicals. But they're, they're. There are two sides of a very important story I think both of them need to come across. So I'm playing with that tension because I think it's the truth.
- [44:20]
Zofia Zwinglinska
Yeah, no, I mean, I think that's a great point. There's so much, I guess, around sustainability language which kind of lacks that human element of it. And obviously when you're talking about, I guess even something like supply chains nowadays you're realizing how linked, I guess, those systems are and also how interdependent they are. And I was actually wondering, because you recently partnered with NFW and introduced my room into the collection, which is a fully kind of plastic free leather alternative, just as a lot of next gen materials are kind of failing, I would say it's the nicest way to say it. There's A lot of brands also that have pulled back as a result as well. What gave you the confidence, I guess, to double down on, on this innovation rather than pull back when others have done so well?
- [45:12]
Vanessa Barboni Halleck
I think they're critical. We don't have the luxury or the intention to mess around with things that we don't believe can scale because I don't think that you're doing anyone any service in that regard. And we have been working with NFW for literally years as they were evolving, Miriam and it finally got to play where together we were able to, you know, sample and produce at a level of product integrity that we thought made sense for the customer and clearly make sense from an impact standpoint. We basically had the luxury of skipping over the entirety of sort of the plastics composite alternatives to leather. We don't use anything that, where you have to harm or kill the animal. And so it was critical that we did develop some, some leather alternatives. But we, we had the, again, we had the luxury to kind of skip over that first generation of sort of bio based materials with a pu kind of coding things of that nature. And so we had effectively been working on and waiting for this for years and we knew the end product that we wanted to create out of it. And this was really the right time.
- [46:26]
Zofia Zwinglinska
Yeah. And you know, I think that with Myram, obviously, like the conversations around leathers has, I would say, kind of scaled and grown a little bit over the last couple of years. It feels like fashion has been using leather more than ever now. If you had to make, I guess, a kind of case for plastic, I guess, free alternatives. Why do you think that brands should be investing in this technology right now?
- [46:52]
Vanessa Barboni Halleck
Well, I think it's two things. I mean, one is clearly the actual impact in terms of ecosystems and carbon. You know, we really deeply need to move away from, you know, meat and animal skin products, you know, period, over time. Just like we, we cannot, whatever your ethics are and you know, mine personally or in a particular place, like we need to be moving away from that. And then, and then the other is, look, these are like sentient beings. And for me we see the word like calf skin or lambskin and we don't actually think about like what does that actually mean? And I think that if, you know, if we were, if we were creating products and we thought a little bit more about like, what does that actually entail, I think people might create a bit differently. And so it kind of goes back to that sense of, you know, connection and responsibility. And you know, I, I don't expect everyone to agree with my personal preferences as it pertains to animal welfare. But I think they're really strong arguments for the planet, full stop. And I think that you're seeing a growing sense of empathy and curiosity amongst in particular younger generations who are thinking about some of this differently. And if brands don't start to move, I mean this is like a super tanker to shift in terms of the dependence on handbags, in particular that leverage leather. So I think it's just clearly smart to be investing in the future for any business.
- [48:35]
Zofia Zwinglinska
Yeah. And in terms of I guess other investments around infrastructure, there's been a lot of development around different components here of traceability, as you mentioned, circularity. So making sure that things can be kind of put back, I guess after the full use you've got resale, repair, all of these different kind of new infrastructure models for fashion. What do you think? I think has a future right now in the current system and I guess which parts are you interested in as a brand?
- [49:09]
Vanessa Barboni Halleck
I think that we are increasingly as an industry going to need to start thinking about the full circular life cycle of a product and also what that full life cycle of a customer looks like. And I think that that's really exciting. You think about. I always like to think about automotive as a use case. Right. Like that was actually BMW was one of our inspirations for authenticated resale model. It's, you know, you buy or lease the car and then you have many kind of service touch points over the life cycle of the car and then at some juncture you're giving it back, trading it in. Those are amazing opportunities for building customer relationships, for building customer longevity and also obviously ensuring the appropriate end of the asset which oftentimes has many other owners. So I think clothing of course is a much lower price point than that, but I think it offers clear parallels. And so. So I think we see a tremendous interest in repair, which is great. I think the implementation of that in luxury is more nuanced because you really want to make sure that you're guaranteeing a level of customer experience that is commensurate with your brand. So not trivial, but I think repair is huge and it also underpins kind of the investment thesis in anything the resale market. But absolutely, I think there's enough evidence out there that clearly this is here to stay. The recycling component is where there's just tremendous amount of infrastructure that needs to get built and transparency that DPPs will really assist with in terms of componentry composition and then ultimately facilities. So I Think for us we're most interested really in the repair and resale components, but there's still something to be done in this sort of like rental and loaning kind of market as well. And the logistics around that are completely non trivial as well. But there's our general kind of attitudes toward ownership have shifted. So that remains an area of, I would say more curiosity than action for us. And we're monitoring that.
- [51:31]
Zofia Zwinglinska
Yeah, of course. And there's been some news this week kind of around Pickle and I guess the, the growing rental economy in the us. I know that on the UK side you've got birotation, you've got her, and these seem like very popular kind of ideas. Also the idea of kind of peer to peer rental also allows for new revenue streams where when everyone's kind of cash strapped, it's a good way, I guess, to make money. What are you looking at? I think around those rental models. And why do you think it works for maybe more of a luxury brand rather than someone in the mass range?
- [52:06]
Vanessa Barboni Halleck
Well, for sure, I mean for rental to work, the product, you know, can't fall apart as it's being used. So it's got to be able to retain its function and integrity and value. So I think that's certainly compelling. But look, in this world of at least at the margin, localization, it becomes really, really interesting. And we know that, you know, people on average, globally, you know, just thinking about the apparel use case, and there are many other use cases, you know, we don't touch, you know, 80% of our closets on a trailing 12 month basis, which is just insane from a waste standpoint, including economic waste. Like we've got tons of cash essentially locked up in our closets. So I think it, you know, I think it makes a ton of sense. You know, I think where, where it gets more challenging. And this is where I think that the models require a little bit of evolution is I question, like not that you age out, but I think over time people become more and more time poor, you know, so what you're willing to do when you're 25 is different from perhaps what you're willing to do when you're 35, 45, 55, etc. Depending on what your other responsibilities are in life. So I'm really curious to see how the rental model can continue to evolve to touch the widest demographic possible. And I think we're in the early innings, but it's really, really exciting.
- [53:31]
Zofia Zwinglinska
Yeah, maybe we'll see, you know, kind of B2C customer product, where someone will come in, you know, photograph and describe your wardrobe for you and allow you to kind of have, you know, rental income the same way you have like agents for, you know, rental property. I can take these, I would imagine.
- [53:47]
Vanessa Barboni Halleck
Yeah. And also I think, look, there, there are other ways in which it can function. I mean, this in some respects maps back to the size exchange program that we implemented for our foundation, which is where we found that one of the biggest impediments to being willing to purchase high quality clothing is that you think your body might change, which is totally rational on the face of it. But if you're able to take that off the table and say, oh well, if your body does change, we'll just swap you a size that also I think we've got to think about where are the pain points to buying fewer, better, and how do we keep those products in rotation. So I think just customer listening is kind of just a treasure trove.
- [54:36]
Zofia Zwinglinska
Yeah, definitely. I think that that's the thing. It's always about keeping very tight to what the customer is looking at. I think that's such a great point. There's so much customers cash wrapped up in people's clothes and people are probably not making use of that. I know that we mentioned some regulation already. We spoke about the dpp, but there's obviously other regulations coming down the pipeline. There's some on the US side too. How are you preparing for it? And I guess what do you see is the right step forward happening right now? There's been a bit of pushback I guess as well with the current administration. I think the, that some of the PFAS regulation has been rolling back. Where do you think brands should stand on that front and how much are you going to be pushing forward regardless of regulation?
- [55:24]
Vanessa Barboni Halleck
We will continue. We will continue. And I think that we believe first and foremost at the local and state level, there's always opportunity for forward movement. I think we would be relatively naive to think that we're going to get some federal level movement on many of these issues in the near term. But that doesn't mean that you can't do meaningful work on a state and local level. And certainly as a, you know, as a company that is increasingly global, both in terms of our own infrastructure and team as well as the markets that we participate in. You know, we believe that we need to be participants on a global basis. And right now the EU is really, you know, essentially exporting regulation in ways that I think are extremely productive. We think it can go even further in certain cases. And so, you know, we will continue to be an advocate. And that's true on very like specific issues. As you know, you referenced like PFAs or more umbrella issues like producer responsibility.
- [56:32]
Zofia Zwinglinska
Yeah. And especially obviously kind of extended reduce responsibility. So what happens to that garment after it is bought by a customer? And you've weighed into that with the DPP and as you said as well, repair. I guess it's quite an interesting time for your brand right now because obviously with the retail expansion with I guess how you're thinking about growth, the conversation around sustainability typically kind of of defers away from growth because those two things are almost at attention. Is that something that you're going to be thinking about even more consciously now that the brand is expanding into its next chapter?
- [57:12]
Vanessa Barboni Halleck
I mean, for us, we view scale as an opportunity for both enhanced impact as well as very critical to the overall thesis that what we are doing is doable at scale. And so it's a strange position to be in because as you reference, I mean, there is an inherent tension, particularly in industry, that it overproduces to a relatively significant magnitude. But we do believe that demonstrating that what we do is scalable is crucial to helping accelerate its adoption. So we're not afraid of that, but we want to, or I should say, and we will ensure that we're doing that at the same level of integrity or even greater. And so we're excited about is, you know, for example, we've got a portfolio of about seven farms on the wool side that we produce with. And one of them actually net sequesters, carbon at the farm level has incredible biodiversity programs. Many of the others have similar programs, but this one in particular is really outstanding and we're finding that we can actually scale even further with them, reduce our impact. We've been able to bring on manufacturing partners that are also carbon neutral, in addition to some of the mills that are carbon neutral. So we're looking at projects even with other brands to potentially support solar installation, even if it's not our factory. So there are all of these ways that I think you can scale actually with enhanced impact as opposed to watering down what you do, which for me is a tremendous opportunity. Now I think the bigger piece piece is really like getting this circular life cycle right. And I think that we've still got some work to do as a brand and collectively as an industry to really follow through on like that promise of, you know, how are we making our inputs and our outputs as truly circular as possible. And that's, I think that's where the rubber really hits the road in terms of impact as well. And that's going to be an area of a lot of focus, right us?
- [59:22]
Zofia Zwinglinska
Yeah, of course. I mean, circularity is a big challenge, but it's great that you're approaching it even when you're thinking about growth. And I think the kind of ideas of partnerships with manufacturers and farms is also kind of part of this extended conversation around why it's so important to band together in that sustainability space. Because a lot of it is kind of peer to peer learning. So in that respect, who do you see as your, your peers or competitors in that space and are they operating at that same level of rigor? What are you learning from them?
- [59:55]
Vanessa Barboni Halleck
I've been so grateful to have built relationships both with many of the traditional luxury maisons in Europe and really see the level of commitment, which is sometimes much greater than it looks on the outside, frankly. And also some incredible brands, you know, that maybe are outside of our kind of peer set, like a Ghani, but that who are really putting, continuing to put action, you know, over perfection and doing some really meaningful work. And so, you know, my, my general gauge is to what extent are people willing to have open and collaborative diet like solutions oriented dialogue. And that is not certainly true across the entirety of the industry, but it's increasingly true. And I think that what really heartens me is that particularly in Europe, there is not a question of direction of travel. No one is reversing course. The pace of the course may shift depending a little bit on what the particularities of it are. But everything is advancing and people are looking for more efficient and effective ways to do that. So it's a really collaborative moment. I recognize that I completely dodged your question in terms of which brands, which I'm going to continue to dodge. But suffice to say that there's a growing handful out there that are doing some pretty deep and meaningful work. And I think that at this particular moment, globally leadership really does come from the top in a lot of these institutions to make sure that, that, that stays a priority.
- [61:41]
Zofia Zwinglinska
Yeah, definitely, and you might have already answered that point, but Obviously it's the 55th, I guess Earth day today and when this will be out, it will be already the 55th Earth month, I guess, five years from now. What do you hope the fashion industry is actually going to be talking about when it comes to sustainability and what role do you think your brand will play in that?
- [62:05]
Vanessa Barboni Halleck
I hope that in five years we are in a very different place in terms of infrastructure and systems so that we can really start talking about deeply meaningful core reductions in emissions and in biodiversity loss, et cetera. Because right now that's not the track that we're on. So, you know, I think that we need to really be seeing that we're on the other side of the curve here, that we are seeing significant reductions in overproduction, that we are seeing much longer life cycles of product, and that we are talking about how to accelerate that as opposed to how we can get to that, that inflection point. But to be there, you know, it's going to take a lot of work and it's a systems level problem. So it's going to take a lot of work at the agricultural level, it's going to take a lot of work at the municipal systems level. You know, it's going to. I think AI actually has a tremendous role to play in terms of waste and efficiency across many industries, but particularly in fashion, when we think about, you know, of sell through kind of becomes a sustainability metric in the end. So I think that I really hope that we're on the other side of that curve and we're talking about accelerating.
- [63:36]
Zofia Zwinglinska
Yeah, definitely. And I'm sure I'll be picking your brain on the AI side, but for now, it seems like the industry has still got to roll up its sleeves and do a lot more. Thank you, Vanessa, for coming on. It was brilliant to have you join us for the Earth Month podcast.
- [63:51]
Vanessa Barboni Halleck
With great, great pleasure. Thank you for having me.
- [63:53]
Zofia Zwinglinska
Thank you. And thank you for tuning into the glossy podcast. If you haven't already, be sure to subscribe on Spotify, Apple or wherever you get your podcasts. And don't forget to give us a rating and leave a review. We'd love to hear what you think. We'll be back next week with another great conversation. Thank you for listening.