← The Glossy Podcast
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- [00:02]
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- [01:14]
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 Zviglinska. How's it going, Zofia?
- [01:24]
Zofia Zviglinska
Doing great.
- [01:26]
Danny Parisi
We have a nice gap before London Fashion Week starts, which I know you will be covering intensely. We will talk about more Fashion Month stuff throughout the next couple weeks. But right now, since we've got a nice gap and since we just did a bunch of New York Fashion Week coverage, I thought we'd just do a regular old week in review episode. Talk about some of the fashion news that is not related to Fashion Week because we have lots of other stuff. If you want more Fashion Week coverage, it will be coming, but not in this episode. This episode we're going to talk about a couple of things. So first we're going to talk about Blue Star alliance, which is maybe a name you're not super familiar with, but they bought off White last year and then just this week they bought Palm Angels, another luxury brand. So they've been kind of quietly amassing a luxury portfolio. We'll talk a little bit about that acquisition. Next we will talk about how U.S. trade policies are affecting imports from China, the effects that will have on the economy since we're already seeing some impact. And then lastly, it brings me no pleasure to say we will be talking about Kanye West. I was hoping that we would not have to after a couple of years ago when the first big implosion happened, but he said some pretty insane things the other day and it definitely affects the fashion industry. So we will be, we will be talking about kind of the second crumbling of the Kanye west empire. But let's start with Palm Angels. So like I mentioned, Blue Star Alliance. Who are they? They are a brand management company that owns a bunch of kind of a random assortment of brands. They own Hurley, which is a skate and snowboard, extreme sports, I guess, kind of brand. They own Limited 2, which is a mall brand for young teens and girls. And then recently though, last year they bought Off White, which is Virgil Abloh's brand from lvmh when it became clear that LVMH kind of didn't really know what to do with them. And at the time I wrote, oh yeah, it seems like Blue Star alliance is maybe looking to do a little more luxury, high fashion kind of stuff. And then I think that was confirmed because this week they bought Palm Angels, which is an Italian kind of luxury brand. And the founder of Palm Angels, Francesco Ragazzi, is also departing and they're planning to kind of grow the global footprint. All the, all the stuff people say when they buy a company, they're like, we're looking to continue what the brand was already doing, that kind of stuff. I have some thoughts on this, but Zofia, why don't you go first? What's your take on Bluestar acquiring Palm Angels?
- [03:51]
Zofia Zviglinska
Yeah, I mean, you don't get a lot of these groups in fashion, but when one does make so many different acquisitions, it really kind of puts it top of mind. I think that Bluestar's been doing a lot more and not just with Off White, but also with some of its other brands. I think that they're starting to come out with more womenswear collections, looking at kind of expanding more into apparel, as you mentioned. I think all of the brands are a little bit random and I think they're trying to create a more cohesive fashion group out of it, essentially.
- [04:23]
Danny Parisi
Yeah. And they did also purchase in 2023 Scotch and soda, which is another kind of European, maybe not luxury, but definitely more fashion forward brand, similar to what they said they want to do with Palm Angels. So Scotch and Soda is a Dutch brand originally, but now they have stores in London and in places outside of Europe as well. So it seems like they'll probably apply that same strategy to Palm Angels as well. You're right. We've talked a lot about who will be the great American luxury group and we've talked a lot about Capri and Tapestry and those kinds of companies. Then I feel like Bluestar is sort of a dark horse candidate, a little bit slowly building up a small but Respectable portfolio. I definitely think each acquisition has been a little bit bigger. Scotch and soda, I think is a good size. And then off white is. I don't know what their size is in terms of revenue, but definitely prestige and name recognition is pretty high. And I think same with Palm Angel. So it seems like each acquisition that they've made has kind of been ratcheting it up a little bit.
- [05:24]
Zofia Zviglinska
Yeah, definitely. I think it's weird because most of the brands that they're known for kind of in that ski or skate or kind of surf space and taking on two luxury kind of streetwear brands, I mean, Palm Angels I wouldn't say is particularly high end. I think most of it is still kind of focused more on that high end streetwear kind of aspect. And I think it's the same for off white. There's fewer kind of luxury associations with it nowadays compared to when it was at the height of its time. I'm wondering what they're going to be doing with that turnaround to bring them back to luxury positioning or if they're going to change the positionings of the brands altogether. Because I haven't actually heard that much about off white since they've been acquired.
- [06:11]
Danny Parisi
Yeah, I haven't either. I haven't actively gone and dug up what they're doing, but I also like haven't gotten many pitches or heard much publicity around them. So they might be doing sort of a reorganization because it's only been a couple months, I guess, since they bought them, but who knows? Yeah, and I think the randomness of their assortment, like they definitely own a good amount of apparel brands and the difference between a mall based, kind of low price apparel brand and a luxury fashion brand is like operationally maybe not that different. Like you're making clothes, so it's not like they couldn't do it, but it's definitely like a step into a new category a little bit. And whether they can actually kind of grow to the size of and in competition with a company like Tapestry or Capri, I mean, I think that's a little up in the air.
- [07:02]
Zofia Zviglinska
Yeah, it'll depend on the leadership, basically. I feel like a lot of these times when brands or groups kind of take on, you know, certain kind of brands, I think they need to change the leadership out to also make it so that those luxury brands have a future. I think most of these brands have basically had their heyday and Palm Angels I think has been consistent, but again, not kind of in the limelight in the last couple of years. I think that Both of these brands now need a new direction to kind of help them build on this new, I guess, investment and ownership as well.
- [07:37]
Danny Parisi
Yeah, I agree. Okay, well, how about we move on to our next topic? I don't really have much more to say about Blue Star alliance other than I do think more. Well, actually I do one more quick thing, which is that even though they're an American company, most of their acquisitions have been European. Off White, I think is technically based in Milan. Even though Virgil was an American designer and founder, I'm pretty sure the company itself is based in Italy. We mentioned Scotch and Soda is Dutch and Palm Angels is also Italian. But I think they are working on kind of establishing more of a presence in the US for all those brands too. Okay, let's move on and talk about sort of the situation with imports from China. There was a great report in Bloomberg that showed a pretty immediate drop in sales from Temu and Shein, two companies we talk about on this podcast all the time. Over the last like week or so, Shein's US sales fell anywhere from 16 to 41%. And the data is inexact because it's estimated by Bloomberg. They, they're like doing an external estimate based on credit card and like debit card data? I think so. I think it's reasonably accurate, but it's not precise. And TEMU had kind of a similar thing. I think their sale, their US sales fell by like 32% in the last week. It feels like there's a pretty obvious reason why, which is those companies are both relying heavily on the de minimis exemption, which we've talked about a lot basically on imports that are below a certain price, it's like $800. They have to pay fewer taxes and duties. And because Shein and TEMU is so, so, so dirt cheap, they could bring in a huge shipment of stuff and still under $800. But now with pretty strict tariffs placed on imports from China, I think that's pretty immediately hampering that strategy of just sending in tons of really low price stuff into the country. What do you make of that, Zofia? And is that expected or unexpected?
- [09:30]
Zofia Zviglinska
Yeah, I mean, I think it was pretty expected just because the de minimis aspect was almost kind of snuck in around the other tariff news. It wasn't something that was particularly overt, but obviously if the imports can't be made into the country, and I think US Accounts for most of Shein sales, definitely TEMU is slightly less just because of the diversification of product. They don't Just sell apparel. Their focus initially wasn't just on that, and I think as a result, they've been able to shift production elsewhere pretty fast. So with Shein, definitely, I think it just accounted for their biggest category and biggest market at the same time. So I would expect that those sales will plummet. I think that now it's a little bit different, obviously, because I think since the Bloomberg News, the de minimis exception, I guess, or exemption has been put in place again. So now both of those companies are able to import back into the US And I'm assuming that there will be some kind of an extension of that as well.
- [10:35]
Danny Parisi
See, and that's the challenge of like writing and recording stuff around. This is like, it changes literally day by day. I wrote a story the other day that was talking to some brands about how they were dealing with or planning to deal with the increased costs of shipping. And one brand I talked to was like, yeah, we're, we're going to like be adding the, the cost of the duties, like the import fees into our price to our consumers. And in the course of writing the story, which I only took like a day to write, like, that changed, like multiple times. Like the rules from the top change. But then the brands I were talking, I was talking to were also like changing their minds. And then they were like, this one woman I was talking to was like, honestly, I have no idea. I'll just let you know when it's more established. It feels really kind of chaotic, which I think I remember talking with you about this on a podcast before the inauguration. I was like, get ready for chaos. Like just unpredictable plans changing all the time. And also like carve outs for people. Like, I'm certain that some Trump friendly businesses will probably be able to get around some of the costs and others will not. So it's changing all the time. And it makes our job a little bit more difficult because even this podcast, I mean, we're recording Thursday morning and it goes out Friday morning. It might change again tomorrow, who knows?
- [11:57]
Zofia Zviglinska
Yeah, exactly. I think it's interesting with these companies that they're still relying on a more stable model. So far, or up till now, they've basically had a steady influx of sales from the US and the de minimis exemption was essentially irrelevant. It was spoken about a lot, but it wasn't anything that had changed under the previous administration. And then now I think that because of this issue and obviously the pause in sales, they're thinking that this is going to be an unstable supply chain essentially. So a lot of the news that I'm hearing is that instead of these Chinese supply chains, they're going to be focusing on producing in Vietnam. I did a story earlier this week around tariff engineering, which I think is a really interesting way of approaching it, just to kind of go into a little bit of detail on what that is. It basically allows you to break down the product into specific elements, all of which are mostly produced in different areas, and then use that to get around those de minimis exemptions or even the tariff exemptions as well. So if you have part of a garment that is produced in China, maybe if you can just get that part produced elsewhere, then that category would end up being recategorized elsewhere, basically. So instead of being made in China, it could be made in Vietnam or made in another area. And that's how you get around the tariffs. So there are definitely workarounds. And I think a lot of these bigger companies which rely on these steady sales will end up using them because they don't want to. You know, even a couple of days of missed sales can have a big impact. And, you know, Shane was still in talks about doing an IPO at some point. So that will also have an impact on their bottom line.
- [13:47]
Danny Parisi
Yeah, I forgot about the Shein ipo. I definitely wonder how that's going to be affected by this. If I were them, I would maybe delay for a bit until we figure something out. Maybe not the right time to be going public. The other thing we should mention is, well, two other things I want to mention. One, that it's not just the US and the specific countries who are hit with tariffs that are affected. I mean, Trump has like, specifically targeted China and then also, for some reason, Canada and Mexico. So it's like allies and rivals alike. But even if you are neither of those countries, like I talked to an Australian brand who is, like, feeling, you know, an effect of that, because the price increase in one part, like the. The global supply chain is so intertwined that, like, even if you are not directly paying any tariffs, your costs somewhere might increase because someone you work with increase their cost because they're importing from China. You know what I mean? So like you said, if somebody's moving one element of a garment to Vietnam instead of China, and then maybe you are a brand who was already making stuff at that Vietnamese, like, factory, maybe now you've got competition all of a sudden. So it ripples out. Regardless of whether you're actually, like, selling, like importing from China to the US or any of the other affected countries. The Other thing that I worry about is like the Trump administration's extreme protectionism, basically like tanking the American economy, which I feel like is not unlikely. And then the concerning part about that is like Musk is gutting every possible, like, organization that might protect people from the repercussions of that. Like the Consumer Financial Protection Bureau, which was literally set up because of the last recession and did a lot of, you know, it was probably one of the most helpful, beneficial, like federal agencies for like everyday people. And now that's just like being destroyed. So if there is a another second like Great recession, like a 2008 era thing, it's going to be with fewer protections for people. And I'm just like, not sure what, how that will affect people's everyday lives. And then of course, the industry who rely on people to buy the stuff. So I don't know. It's a concerning time.
- [15:58]
Zofia Zviglinska
Yeah, definitely. And I think that this protectionism would typically be coupled with a kind of decent manufacturing system at home, something where they would be able to almost replace what's happening elsewhere. But because of how fragmented supply chain and especially with fashion, the amount of production that's happening elsewhere and how little, I guess, is still being produced in the US Also, which is mostly intertwined with immigration and the kind of migration coming in from South America, I think that there's a bigger tie in here that isn't there to replace what people have been relying on now for over 20 years in terms of fashion products coming into the country from elsewhere. So if, if that was in place, I think it would make for a lot more sense and Trump's policies would, as a result, have a little bit of sense. But no, I think you can't have one without having the other in place.
- [17:00]
Danny Parisi
Yeah, I completely agree. So we'll see if the American manufacturing sector magically revivifies or not. Let's talk about our last topic. Let's see how long we really want to dwell on this, but I think it does merit a discussion. A couple years ago, we talked a lot and I wrote a lot about Kanye west having this very inauspicious fall in which he went on a pretty crazy tirade that was extremely anti Semitic. He went on Alex Jones Infowars, which doesn't even exist anymore, and said he loved Hitler and the Nazis and it was really bad. And then at the time we were like, well, that's it. You can't say that you love Hitler and still be a public figure. But he kind of did, which is crazy to me. He was still bopping around the public sphere. I mean, he was at the Grammys like, you know, two weeks ago despite that. So that is a little concerning how quickly that was sort of forgotten. And then last week, like right in the middle of Fashion Week, he basically did the exact same thing again. He posted a very, very unhinged long thread on Twitter, or X we're supposed to call it now, in which he reiterated that he is a Nazi and he loves Hitler and etc. We don't have to repeat every claim, but it's pretty bad. And then on top of that, he started selling on his website two things. Sean John collaboration. Sean John is a brand owned by Diddy, who is like in jail right now for sex crimes. And then he started selling a T shirt with a swastika on it. And I think both of those were enough for that. Shopify, which is the commerce platform that his website was running on, just like shut it down. They're like, you can't sell swastikas on our. On our platform. Which I think is a fair stance to take. It's just crazy. Like, it's. It was wild the first time this happened. It was wild that he sort of was able to come out of it like, and was not completely barred from any, like, public space at all. And then it's wild that it happened again. So, like, no lessons learned from anybody. I don't know. What do you make of this whole situation?
- [19:07]
Zofia Zviglinska
I think that it just goes to show how unwilling fashion is to really cancel anyone. The signs have been there, written on the walls for a very long time. And yet he has made his rounds in the circles for a number of seasons. And it's the same as you said, still showing up at Grammys, still having a kind of social platform. And I think that this is, I don't know, maybe it's just like a nihilistic kind of effort to self destroy. There's no way that I think that anyone can come back from this, but I've been proven wrong in the past, so perhaps that will happen again.
- [19:48]
Danny Parisi
I mean, I think you put it right that the crowing about cancel culture and you can't say anything and it's like, no, you can literally say anything because he said maybe some of the worst things you can say and was fine for a while. The other thing is, at the time when this first kind of implosion happened, he did lose his Adidas partnership, which was a huge deal, like a billion dollar kind of business they were doing. But he still had his sort of independent version of Yeezy. And I remember there was a lot of hand wringing from Adidas of, like, what to do with all of their Yeezys that they had. And they were like, do we want to sell, like, Nazi shoes? And then they just did. And, like, people bought it. So maybe that was a sign that people didn't care that much. He also, right around this was happening. I'm not sure the exact timing if it was before or after, but Goszar Rubchinski, who is the Russian designer who was Yeezy's head of menswear, left. He, like, announced a kind of. His announcement was a little bit bare bones, but he was just like, the time has come and I'm like, leaving. Yeezy and Gosia also has like, kind of a weird past with like, maybe soliciting sexual images from minors. So, like, maybe they were, you know, a good fit. But he's now left Yeezy. So Yeezy has no longer has a, like an online platform to sell clothes and doesn't have a designer anymore. So who knows? I mean, that feels pretty final. And honestly, selling a swastika shirt should be the nail in any coffin of any designer's career. But again, who knows?
- [21:19]
Zofia Zviglinska
Yeah, I mean, I think that at this point, with, with the amount of vitriol that he's kind of putting out there, I think that there should be criminal prosecution considerations. But obviously with so much of social media nowadays kind of focusing on, you know, what can we say? And, like, how much of that, you know, is really going to be penalized. I'm assuming he's going to get away with it, but yeah, here's to hoping.
- [21:46]
Danny Parisi
They might be able to do that in Europe or the uk, But I don't think, I don't think the US Would. I don't think criminal prosecution is going to happen, unfortunately. One other thing to mention is, of course, that, like, Elon Musk, who's like right hand man of the president or maybe vice versa, did a Nazi salute at the inauguration. And in Kanye West's thread, he was like, elon stole my Nazi swag. So I'm like, okay, this is not good that two, like, very prominent figures in American culture are, like, both flirting with Nazism. Like, that's, that's very scary. And again, like, the fact that Kanye was able to sort of just skate by after doing it the first time, like, was maybe a dark harbinger that this is not the career killer that you'd hope it would be. And in fact, you could be maybe the most powerful man in the country or possibly the world and still do it and like, it's totally fine. I don't know. It's kind of scary.
- [22:48]
Zofia Zviglinska
Yeah. I think that there's a kind of definite association with the kind of history of the Jewish kind of population. And I think with this there should be more of an out, kind of a definitive kind of statement saying that this is not allowed and it shouldn't be forgotten. I think that a lot of this making Nazi stuff okay is just really, really weird. And it just shows how much time has passed since the Second World War that these kind of things are brought up in such a casual way and almost like offhand remarks by some of the most powerful people in the world. It doesn't make sense to me.
- [23:32]
Danny Parisi
No, it's pretty terrifying. Well, that's a depressing note to end on, but unfortunately I cannot think of any more light hearted thing to say, so maybe we'll just stop there. But Zofia, thank you for being here and thanks as always for discussing the fashion industry with me.
- [23:49]
Zofia Zviglinska
Thank you so much.
- [23:50]
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 or wherever you listen to this because that helps us out a lot. 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. Until next time, thank you all for listening.