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The Glossy Podcast
Week in Review: Milan Fashion Week, Steve Madden raises prices, De Beers struggles
00:26:42
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- [00:02]
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- [01:15]
Danny Parisi
Hello and welcome back to the Glossy Week in Review podcast. I'm your host, senior fashion reporter Danny Parisi and I'm here with our international reporter Zofia Zvyglinska. Hello Zofia. How's it going?
- [01:25]
Zofia Zvyglinska
Yeah, good. It's sunny in London right now.
- [01:28]
Danny Parisi
I was literally just about to make a joke about like, I bet the weather's great in London because I feel like you're always saying it's rainy and miserable all the time. That's good to hear. Good to hear that you're finally getting some sun. It's actually pretty nice in New York this week too. That's been great. I'm very ready for it to be warm again. But this week we'll be talking about a different city. Not London or New York, but Milan. Milan Fashion Week's happening right now. We will be continuing our Fashion Month coverage and talking a little bit about some of the shows that have already happened and just some of the themes we're seeing in Milan. But then we will also talk a little bit about Steve Madden said this week that they're going to be raising some prices to deal with the increased cost of tariffs. We will discuss that. And then finally we're going to talk about De Beers, the mined diamond company, which is just really continuing to struggle amid the entire diamond industry crashing. There's a lot to talk about there too. But so let's start with Milan. So Milan Fashion Week, like I said, happening right now. One thing I noticed just from reading a little bit about it, seeing some of the shows, we talked a lot about how New York and London are seeing a lot of changes. There is A lot of people not showing. There's last minute changes at the London schedule. There was a big gap between the weeks where there usually isn't. Looking at the Milan schedule. I also noticed Gucci was showing without a creative director because Savanto di Sarno left, but Ortega Veneta didn't show at all. Tom Ford went to Paris, so he was also not showing. Feels like all of the big fashion weeks are sort of changing their identity or I don't know, there's alterations to the schedule or maybe just Paris is sucking all the energy from the other three. Like a parasitic twin or something. Parasitic quadruplet. I don't know. Did you get that sense? I'm just looking at the schedule and I'm realizing that Milan sort of has some of the same things that we've been seeing at the previous two weeks of like big designers not showing or weird changes to the schedule, that kind of thing.
- [03:23]
Zofia Zvyglinska
Yeah, definitely. Great pun, by the way. I think that there's definitely been some changes in the fashion week schedules globally and obviously with Paris being the longest, but also the kind of most notable, the one where the buyers come in. I think it's become the kind of hub for. For Fashion Week activity in terms of cost of living and as a result, declining budget publications, all of the above for buyers as well. I think a lot of people are having to make very cost efficient decisions as to where they're going. And obviously if everyone is going to Paris, it makes sense to only go to Paris and avoid having to pay for extra fashion weeks on the side. However, Milan is still obviously a hub in a sense for fashion and for a lot of storied brands, brands like Diesel or Prada. Jill Sander, whose creative directors have just left. And I think that there's a lot still going on in the city, both with its ties to design, but also just in general in terms of Fashion Week. There's still a lot of great independent young designers and yeah, some of those kind of younger designers are positing some new ideas on the Fashion week circuit that I'm sure will be attracting a lot of attention.
- [04:41]
Danny Parisi
Yeah, totally. And I'm glad you mentioned Jill Sander because I wanted to talk about. Yeah. Luke and Lucy Meyer, who are the creative directors or were did their Milan show, came out and bowed and everything and literally eight hours later it was like announced that they were leaving. And I was just like, is that not the most typical thing that we've seen in the last couple years? Like, and they've been at Jules Sanders Since 2017, I think, which is like an eternity by modern standards, because a lot of creative directors are at a brand for like six months or a year or something, it feels like. Definitely made me think of our previous conversations about the ways that a lot of brands are kind of juggling their creative directors all the time. They're constantly, like, leaving and starting new tenures elsewhere. I mean, I mentioned, but like multiple brands that showed up, Milan Fashion Week, multiple houses, like, don't even have a creative director at the moment. Gucci is between creative directors. Bottega Veneta as well, although they have their creative director named Louise Trotter, but I think she hasn't started yet. So a lot of brands are kind of left in this weird limbo period where they're either doing a show with no creative director or they're doing a show with their creative director and then the creative director leaves right after. Weird. It's weird time.
- [05:51]
Zofia Zvyglinska
Yeah, definitely. And it's weird also because obviously Jill Sands is owned by the OTB Group and they also own Diesel and Maison Martin Marcella. And obviously there's been some creative director changes there as well. Diesel's creative director is leaving for Margiela, so there's a little bit of a shift happening, I think, within the group as well. I think it's interesting to look at these brands in the case of their group ownership, because a lot of this is dictated by those executives at the top. And obviously it's a challenging time for a lot of brands. I think Diesel did not have the best figures last time I checked. And the other brands are also kind of slowing down. So I'm wondering if that's been also a driver for change things up on the creative director side for Jill Sander, although I do feel like their customer's always been a bit more stable. Like there's just people who love the brand and who are happy to kind of continue buying and being very, very loyal to their aesthetic. So I'm wondering if changes might not be the best thing for them.
- [06:53]
Danny Parisi
Yeah, no, that's a great point. And I'm glad you mentioned Margiela, because I wanted to mention MM6, which is sort of the lower price offshoot of Margiela, but they had a show at. At Milan Fashion Week this season and there was a great article in Vogue Business talking to the Anonymous, like, creative team behind mm6. And speaking of, you know, a lot of brands not having creative directors because they're in between creative directors or their people are leaving. MM6 has a creative director and they have designers, but they intentionally are sort of anonymous. They don't. They actually did do an interview, but it was like just quoted as like anonymous creative person at mm6, which feels kind of the opposite of what a lot of other brands are doing. I feel like creative directors are becoming more and more like sort of faces of the brand or like celebrities kind of in their own right. So interesting to see a brand kind of take the opposite path. They have a creative director on hand and they're just kind of deciding to let the clothes do the talking, which is probably a little easier if you're a spin off of Margiela and you've got like that backing already. But I did think that was an interesting kind of approach.
- [07:58]
Zofia Zvyglinska
Yeah, definitely. And it's the same thing at Gucci as well. Obviously their collection this season was done by the team rather than by the creative director. And I think there was some interesting references there, some lovely velvets and chartreuse. I think there was some Scooby Doo references in terms of the colors, but that's just my observation.
- [08:18]
Danny Parisi
Yeah. Is there any other designers or shows that have happened that you found notable? I mostly wanted to talk about the MM6 one because I thought that was cool. But there was, there was a lot of other good ones. Diesel showed off a lot of denim, I thought, which was very cool. I don't know. Anything else stand out to you from the week so far?
- [08:35]
Zofia Zvyglinska
Yeah, I mean, I think the D Squared one and the Fendi both in terms of the brand anniversaries, I think were quite big shows. Obviously D Squared is slightly less focused, I'd say on the fashion side, definitely more on the performance side. You had Dochi perform, you had multiple celebrities. I think Naomi was dancing on the podium somewhere and there was a lot of kind of setup. There's a whole little street set up for D Squared. And you know, as a Canadian brand showing in Italy, it's quite an interesting, I guess, dichotomy for them. And then obviously the other one is Fendi. You know, such a big kind of anniversary for the brand as well. And a lot of kind of focus on old time luxury. And again, lots and lots of velvets. But it was a beautiful collection. I think there was a lot of very nice, nice pieces from the brand beyond the just appeal of the baguette, which has been kind of what it's been known for in recent years.
- [09:29]
Danny Parisi
Yeah. And I also just remembered that Bottega Veneta didn't have a show, but they did unveil kind of like a new headquarters instead. That was their Fashion Week presence, I guess. So they're clearly gearing up for more stuff in the future. They talked about preparing for Louise Trotter's debut and we talked about this with previous weeks. But it does feel like the February Fashion Month is just in general is sometimes a little bit. We'll pull back here so we can lean in in September. So in September, I wonder what we'll see from some of the brands we're talking about that maybe did more understated things or. I don't know. It'll be different for sure.
- [10:06]
Zofia Zvyglinska
Yeah, definitely. I think September is going to be the big one and it's kind of fun to see the different ways that brands are activating in a smaller way because obviously that lends itself more to creativity kind of beyond the catwalk, which I think is quite good as well.
- [10:20]
Danny Parisi
Yeah. Cool. Let's move on to our next topic. Want to talk about Steve Madden? So Steve Madden is one of many brands that has been sort of feeling the pressure around tariffs. They talked in the past about moving production out of China. I think at the time they did like 70% of their production and imports came from China, which they have lowered it to around 60%. I think it's 58% or something now with the goal to get that down to 40%. But this week they also said that they will be selectively raising some prices to handle the increased costs. I feel like there has been so much confusion about this and how to handle it from brands and from consumers that I have heard in the last couple of weeks or the last month or two. I kind of respect just outright saying we're just going to raise prices, we just have to, instead of like sort of being wishy washy about it. But it does feel like a lot of brands are kind of dealing with this and trying to figure out how do we respond to objectively just increased costs for us in a way that doesn't make people too angry. And I feel like that's a very hard needle to thread. So I don't know, what do you think of Steve Mann's decision and the way that they kind of just announced it?
- [11:30]
Zofia Zvyglinska
Yeah, I mean, I think that it's something that's going to happen a lot from brands over the next couple of months as they figure out what their supply chain is going to look like under these tariffs. Because again, just because the tariffs are coming from the US does not mean that that's the only thing that's being affected. Because obviously there's retaliatory tariffs from other markets as well and then raise prices for everything. So, I mean, we've already seen a notable shift of a lot of brands moving their production from China to Vietnam. And then Vietnam is becoming this kind of base for a lot of production now because it doesn't have the same tariff applications. And then the other thing that we're seeing is the kind of near shoring or insuring depending on if you're able to produce in America or not. I know that it's not fashion, but obviously the fact that Apple is now going to be producing stuff in the US is most likely going to end up affecting a lot of companies to also kind of make that shift over, especially if there are going to be some kind of rebates or I guess rewards for producing it locally. And I think that considering how reliant fashion has been on China, I think it's not just Steve Madden, we've seen it with Ralph Lauren having to kind of shift their supply chain around as well. I think there's going to be a lot of possible price increase, but I think most brands, especially now will be looking to kind of absorb it because it's just, it would be another kind of thing to make customers not want to buy. I think there's been enough of those reasons already.
- [12:59]
Danny Parisi
Yeah, yeah. There's so much to talk about here. One thing is, I feel like before the sort of implementation or the announcement of the specifics of tariffs, there has definitely been an effort, I think, of some companies to be like, maybe we shouldn't be so reliant on China, especially if they're in the U.S. they're like, let's move production closer to the U.S. like, we can move production to Mexico. And then it's like China and Mexico are both getting hit. So it's like, okay, well, that didn't really. That didn't really help, actually. The details also have changed so much and the timing has changed and which countries are affected have changed. I wrote a story about how brands were responding to the changes a couple of weeks ago. And in the two days I was working on this story, the rules, like sort of coming from the White House changed. And the response from the people I was talking to changed. I was like, one brand told me they were going to increase their costs one day and then literally later that day they were like, actually we changed our mind, we're not doing it. It was like, it was very back and forth. And I sympathize with those companies that are trying to Figure out how to handle this. Because moving your entire production or even part of it to another country is not a easy, simple thing you do in one afternoon. And if you move it all and then right after it's like, actually the tariffs are not even happening, we like change our mind again. You're like, okay, well that was a waste, you know, so I, I don't even know how you smartly handle regulations, if you even want to call it that, like rules around how you can operate that are changing like on the daily, you know.
- [14:32]
Zofia Zvyglinska
Yeah, definitely. I think that for a lot of global brands it's going to be a lot easier because they have that kind of already like mindset shift that. Okay, well, if this production area doesn't work out, we have to shift really quickly. So we're already prepped with options A, B and C. Whereas for independent brands and designers, I think a lot of them have quite significant relationships with their suppliers. And that usually means kind of a lot of time has been taken to develop these things. They don't want to be switching those over. So if there are any shifts there which affect the kind of bottom line or the price of the items, I think it's going to be much, much harder for them. And usually at least it will take six months to say, do the proper audits, or else even longer depending on what kind of items and the level of production that's needed. So it's quite a challenging time, I'd say. And we might see, I think this has been hinted at by various other outlets, that the quality of the items as a result might go down as well. Because obviously brands will be looking at cutting costs and if the tariffs are increasing costs for them, then they might end up shifting that over to the materials, for example.
- [15:42]
Danny Parisi
Yeah, and I think part of that is because raising prices is not ever a popular idea, especially if you have like sort of a built in audience who will notice, like they're, it's, you can't just like slip it in. So I think it's probably the most responsible way to deal with it is to just say our costs are increasing so we're raising our prices. But like you said, there's a lot of other ways to offset that. For example, making frankly shittier stuff, using worse materials or paying your garment workers less. There's a lot of other ways that are maybe less upsetting to the customer but would result in a worse product or a worse supply chain process ethically. Maybe you skirt some other rules or something, or maybe you lay off a bunch of people. There's a lot of ways that you can offset that that are also not great, but don't require you to like, tell your customers that everything's going to be more expensive because especially in the US everything is already so expensive. I think the consumer wallet is extremely under pressure and has been for years now. I've mentioned this on the podcast many times before, but like general wages have not increased in the US like, or basically they've stagnated for a very long time. And I think sometimes people look at like the economy quote unquote, is like doing well because of like the stock market or something. But I'm like, that's, that's different than regular people being able to afford stuff. Like that's not the same as the stock market doing well. So anyway, if people's wallets are under pressure, if things are already really expensive, if you live in a city like New York, which is incredibly expensive, you already have very limited extra money to spend. And then if like the one little luxury you allow yourself is like, oh yeah, we're now also increasing our prices, I feel like that can be upsetting.
- [17:29]
Zofia Zvyglinska
Yeah, nail in the coffin kind of situation. You see that in Europe as well. Just like those kind of cost of living prices, all of that going up significantly, bills going up significantly, which again gets that discretionary spending down. I think previously as well, a lot of customers would end up going to TEMU and Shein for those super, super low prices. But obviously both of those companies are now going to be affected by this. I think there's been a shift to the shopping pages showing only local items. So things are already in the US that they wouldn't have to pay tariffs on. So I think again, like customers are now being squeezed from, from both sides, if that makes sense.
- [18:05]
Danny Parisi
Yeah. And I think you and I have both talked about bemoaning the fact that we chose to live in the two, like most expensive cities in the world. That's true, but I wouldn't live anywhere else. Okay, let's talk about our final topic, which is De Beers Big Mine diamond company. They're owned by another company called Anglo American. This week, Anglo American basically wrote down De Beers value by like $3 billion. I think Anglo American has been trying for quite a while to spin off De Beers or sell it or like do something to get De Beers off of their like spreadsheet because it is not doing so well and it's dragging them down. They're sort of like dead weight. I mean, De Beers, like a lot of Other mined diamond companies has just been really, really like, has not figured out how to handle lab grown diamonds. The prices of both mined diamonds and lab grown diamonds has come down so, so much. I think it's like 25% for mined diamonds in the last two years and 75% for lab grown in the last four years or something like that. So both have reduced in price a lot. And I just feel like the big mined diamond companies do not know how to handle it. I don't know. I have more to say, but I don't want to monopolize. What do you think of the state that they're in and is there any way out of it?
- [19:24]
Zofia Zvyglinska
Yeah, I mean I think the kind of natural diamond industry has been struggling for so long now and it doesn't seem like they've had a kind of successful opportunity to rebrand or to remarket their product to make it kind of more interesting for customers nowadays. And I think it's really kind of quite funny considering the importance De Beers has to the general kind of wedding market and the marketing around it. They were the original kind of coiners, I guess of the engagement ring and the value associated with that. So it's quite ironic I guess to see it doing so badly now. I think it's weird obviously also because Anglo American is mostly a premium materials company so they focus on a lot of like ores and metals and obviously like precious stones as well. But they're not a consumer product company or owner. And so owning De Beers might be very different from the kinds of other companies that they own. And I think as a result they might also not know what to do with evaluation. I'm sensing that with the, with De Beers as well, it's, it's been a very tough time for them and I think they need something a little bit more revolutionary I guess in terms of a turnaround if they're going to get that kind of final Hail Mary attempt at getting the brand back.
- [20:45]
Danny Parisi
Yeah, and the big sort of mined diamond companies have experimented with having a lab grown sector of their business and I think some of them maybe have done a little better than others and others have just sort of dropped it after a while. The other thing that happened with De Beers this week is they finally signed a deal with the government of Botswana which they have been in negotiation with for years over this. They have a joint venture with the government called Debswana, which it took me a minute to kind of put that together. But it's a pretty simple, just mashing together of De Beers And Botswana, but they have a joint venture called Debswana that sort of mines and sells the vast amount of diamonds that are found in Botswana. It's a big part of Botswana's economy. And so this deal has just been in negotiation I think since like the 2010s or something, like 2013, 2018 or something. So it's been a while. It basically would give Botswana, the government up to I think between 40 and 50% share in Debswana. They will sell like 30% of the of the joint ventures output. And I don't have any like concrete reason to believe this, but other than just the timing. I wonder if the fact that De Beers is like really struggling recently kind of gave Botswana more leverage to finally get this deal like agreed to and signed. But it is like the situation with diamond prices is obviously not good for De Beers, but it's also not great for places like Botswana that have a lot of naturally occurring diamond deposits and they make a significant chunk of their national sort of income from working and selling those diamonds. There's obviously a lot of negatives that come with the diamond industry in Africa historically, but it does form a big chunk of several countries economies there. So I will be curious to see how both De Beers and other mined diamond companies and also the places where those diamonds are found are affected by the sort of Lab Grown revolution.
- [22:43]
Zofia Zvyglinska
Yeah, and I think it's really interesting on the sustainability side because obviously the kind of social implications of mining have been notoriously bad for a really long time. Which is why also Lab grown diamonds have been so popular because they've been touted as this kind of sustainable and kind of cruelty free, I guess, alternative to mined diamonds. I think De Beers has been countering that. They've got a new verification service for their diamonds which basically traces them down to the source to try and again kind of counter that image of blood diamonds or kind of the abuses that are happening on the social side. But I think that there's been a lot going on with Lab Grown that has made them much more popular in terms of both the price and I guess their visual appeal. They don't seem that different from kind of regular diamonds. And I think that considering the boom in the market, this is only just going to keep accelerating. I don't think there's been any shifts in terms of that. And now that the Responsible Jewelry Council has also set some new standards around Lab Grown, I think that there's a bit more of an authentication to them so making them more valid than they were before.
- [23:55]
Danny Parisi
Yeah, One more thing on that note is one defense of mined diamonds that I hear often from people who work in that industry, who of course are going to defend it, is that mined diamonds have a better resale value and that if you buy a lab grown diamond, you won't be able to like sell it for anywhere close to what you paid for it. I think a lot of people don't buy jewelry with the intention of selling it. They're buying it as a gift or like for sentimental value with no thought to how much they can sell it for in the future. But then also I saw someone on a R diamond subreddit put it this way, which I thought was a great way to think about it. It's like if you buy a quote unquote natural diamond for $10,000 and sell it for 5000, it's like a net loss of 5000. But if you buy a mine diamond for 1000 and you sell it for zero, it's a net loss of 1000. So it's sort of like even then it's still not necessarily better. You know what I mean? Like, even if you sell it for, if you do sell it, which again, I think a lot of people don't, if you do sell it for a little bit less, what also didn't cost that much either. You know what I mean?
- [24:57]
Zofia Zvyglinska
Yeah, definitely. I think like, typically, especially with like engagement rings, they're meant to be like this like backup policy for women where basically if you didn't have anything else, you could sell your, your engagement ring. And I don't know if with the growth, I guess, of, of lab growing diamonds and so many like issues with devaluation around diamonds, if that's really a thing anymore, I think there's probably other ways of investing in other assets which are going to give you a better payoff. So I guess its value is this kind of social asset has gone down as well.
- [25:31]
Danny Parisi
Yeah, for sure. Cool. Well, I think that's all the time we have for this week's episode, but thank you as always for being here, Zofia. It's always great talking with you.
- [25:40]
Zofia Zvyglinska
Thanks you. This was really fun.
- [25:41]
Danny Parisi
For those of you listening, don't forget to give us a rating and a review, whether that's on Apple Podcasts or Spotify, wherever you listen to this. That helps us out so much. And don't forget to subscribe to the glossy podcast because you'll hear interviews with industry insiders every Wednesday and weekend review episodes with me every Friday. But until next week, thank you for listening.