The Glossy Podcast: Week in Review – LA's Fires, True Religion's Acquisition, Wolford's Fulfillment Problems

Release Date: January 10, 2025

In this episode of The Glossy Podcast, host Danny Parisi and editor-in-chief Jill Manoff delve into three pressing issues affecting the fashion and luxury industries: the devastating fires in Los Angeles, the acquisition of True Religion, and the fulfillment challenges faced by luxury tights brand Wolford. Through insightful discussions and expert commentary, they explore the immediate impacts, underlying trends, and future implications for brands navigating these turbulent times.

1. California Wildfires: Devastation and Industry Response

Overview: The episode opens with a somber discussion about the recent wildfires in California, highlighting their destructive impact on both residential areas and local businesses. Danny and Jill emphasize the broader implications for brands based in or operating within the affected regions.

Key Points:

• Immediate Impact: The wildfires have led to the destruction of homes and businesses, with reports of fatalities. Prominent figures like model Carolyn Murphy and Paris Hilton have had their homes totaled, and brands like Elise Walker have faced physical damages.

• Industry Preparedness: The hosts question the preparedness of brands for such recurring natural disasters, especially in light of increasing frequency due to climate change. They discuss the challenges brands face in supporting their teams and maintaining operations during emergencies.

• Insurance and Future Risks: Concerns are raised about the sustainability of insuring expensive properties and stores in high-risk areas. Given the soaring costs and increasing likelihood of disasters, both brands and individuals are left grappling with financial and logistical uncertainties.

Notable Quotes:

• Jill Manoff reflects on the severity:

  "It's just bananas what everyone is going through. ... I can't imagine how infuriated people are." (02:04)

• Danny underscores the inevitability of such events:

  "Natural disasters like this are not going to get less frequent. ... more storms, more floods, more hurricanes." (05:38)

Implications for Brands: The discussion highlights the urgent need for brands to develop robust disaster preparedness strategies, invest in resilient infrastructure, and reassess their insurance policies. Additionally, there is a call for higher-level interventions and resources to support affected communities and businesses.

2. True Religion's Acquisition: Strategic Moves and Brand Evolution

Overview: The conversation transitions to the acquisition of True Religion by Akon Investments and SB360 Capital Partners. Danny and Jill analyze the strategic motivations behind the acquisition and its potential impact on the brand's trajectory.

Key Points:

• Acquisition Details: True Religion was acquired by Akon Investments (unrelated to the singer Akon) and SB360, which is connected to American Eagle through its CEO. This move follows True Religion's emergence from bankruptcy in 2020 and a subsequent sales increase.

• Brand Performance: Since exiting bankruptcy, True Religion saw a 20% sales increase, achieving over $280 million in sales in 2023. This resurgence is attributed to strategic pricing adjustments and capitalizing on the Y2K trend.

• Future Plans: The new ownership aims to expand globally, diversify product offerings, and shift towards more direct online sales while reducing reliance on wholesale channels. Additionally, there is a focus on targeting a broader female demographic, leveraging collaborations with pop culture icons like Megan Thee Stallion.

• Sustainability Beyond Trends: Danny raises concerns about the brand’s ability to sustain growth beyond current trends, emphasizing the importance of building a resilient brand that can thrive irrespective of fluctuating fashion trends.

Notable Quotes:

• Jill praises the strategic insight of the acquiring group:

  "They have an interesting background because they don't really do a lot of apparel stuff they own. ... [Jay Schottenstein] knows what he's doing." (10:56)

• Danny questions the longevity of trend-dependent success:

  "I don't want a company that can only survive in the most favorable conditions. ... it should be viable whether the trend is in or out." (14:07)

Implications for True Religion: The acquisition presents an opportunity for True Religion to leverage the expertise and resources of its new owners to solidify its market position. However, the brand must navigate the challenges of maintaining relevance and profitability beyond transient fashion trends.

3. Wolford's Fulfillment Challenges: Navigating Logistical Hurdles in a Competitive Market

Overview: The final segment addresses the severe fulfillment issues faced by Wolford, a renowned luxury tights brand. Danny and Jill explore the root causes of these delays and their broader implications in the context of evolving consumer expectations and heightened competition.

Key Points:

• Fulfillment Delays: Wolford has been experiencing months-long delays in order fulfillment, particularly affecting holiday orders from November. These issues stem from a problematic switch to a new logistics provider, resulting in a 27% drop in sales as reported in their last earnings.

• Competitive Pressure: The luxury tights market has become increasingly crowded with brands like Skims, Commando, and Fabletics offering similar products with more efficient delivery systems. This heightened competition exacerbates Wolford's struggles to maintain its market share.

• Shipping Industry Challenges: The hosts discuss broader shipping and logistics challenges, including potential strikes on the East Coast ports and ongoing disruptions on the West Coast due to natural disasters. These factors contribute to congestion, increased costs, and unpredictable delivery times, affecting brands’ ability to meet customer expectations.

• Consumer Expectations: The rise of e-commerce has conditioned consumers to expect rapid, often next-day, deliveries. Delays not only frustrate customers but also harm brand reputation and loyalty.

Notable Quotes:

• Danny expresses frustration over Wolford's logistical issues:

  "I was like, what the hell is going on over there. ... what in the world is happening here?" (15:39)

• Jill highlights the competitive landscape:

  "Skims, they've got competition from Commando ... so I think there's a lot of competition now and I don't know if they have the cachet they once had." (16:01)

Implications for Wolford and the Industry: Wolford's fulfillment problems underscore the critical importance of reliable logistics in the fashion and luxury sectors. As consumer expectations for swift and seamless delivery continue to rise, brands must prioritize robust supply chain management and strategic partnerships with logistics providers. Additionally, the fragmentation and unpredictability of the shipping industry require brands to adopt flexible and resilient fulfillment strategies to mitigate disruptions.

Conclusion

Danny Parisi and Jill Manoff provide a comprehensive analysis of the multifaceted challenges facing the fashion and luxury industries in this week's episode of The Glossy Podcast. From natural disasters threatening the very foundations of brand operations to strategic acquisitions reshaping market dynamics, and logistical nightmares disrupting customer satisfaction, the episode underscores the complex interplay between external factors and business resilience. As the industry continues to evolve amidst environmental, economic, and competitive pressures, the insights shared offer valuable guidance for brands striving to navigate these turbulent times.

Upcoming Highlight: The episode concludes with a teaser for the next week’s guest, President Joyce F. Brown of FIT, who will discuss fashion’s evolving direction and its future trajectory.

Notable Mentions:

• NRF Conference: Danny mentions preparing for the upcoming NRF conference, inviting listeners to connect if they are attending.

• Upcoming Episodes: The team encourages listeners to rate and review the podcast on platforms like Apple Podcasts and Spotify to enhance visibility and recommendations.

For more in-depth discussions and industry insights, subscribe to The Glossy Podcast and stay updated with the latest trends and challenges in the fashion and luxury sectors.