With the fashion industry slowly recovering from the pandemic, 2023 was a year of news in many different fields. What stories have left the most lasting impression on you?
In fashion business news, the year was marked by the bankruptcy of a major media company, a series of mergers and acquisitions of fashion and beauty brands, and a slowdown in sales in the luxury industry. There were also increased standards for more sustainable and transparent corporate initiatives, such as issues surrounding traceability and fair wages for garment workers.
In addition, many major fashion brands had a change of creative directors, and many maisons started under a new organization. There was also an active movement among celebrities to launch their fashion lines.
In this article, following Summary of Memorable News in the Fashion Industry 2023, OSF’s editorial team has carefully selected the most notable news that occurred in the fashion business industry in 2023.
The collapse of the emerging U.S. media company Vice and the acquisition of i-D Magazine by Karlie Kloss
In May 2023, VICE, an emerging American media company, filed for Chapter 11 protection and announced that it had gone bankrupt. According to the company’s filings with the court, its total debt was reportedly estimated at up to $1 billion.
One of the companies under the Vice Media umbrella was the British fashion and culture magazine i-D Magazine. In November, however, the acquisition of the magazine by model and entrepreneur Karlie Kloss was announced. The acquisition also revealed that Kloss will become CEO of i-D Magazine and that Alastair McKimm, the former editor-in-chief, will become chief creative officer and global editor-in-chief.
Kering Buys 30% of Valentino for a Valuation of Over €5 Billion
In July 2023, Kering announced that it would acquire a 30% stake in the brand from Valentino’s parent company, Qatari investment firm Mayhoola, for €1.7 billion. This included an option for Kering to acquire 100% of Valentino’s share capital by 2028.
Mayhoola also indicated that he may eventually invest in Kering as part of the partnership. Valentino has 211 directly operated stores in more than 25 countries and has recorded revenues of €1.4 billion and recurring EBITDA of €350 million in 2022.
This strategic partnership furthers the brand enhancement strategy implemented by Valentino CEO Jacopo Venturini under the umbrella of Mayhoola and was expected to further develop Valentino as one of the most admired luxury houses in the world.
Coach parent company Tapestry acquires Michael Kors, Versace, and Jimmy Choo for $8.5 billion
In August, Coach’s parent company, Tapestry, acquired Capri Holdings, which owns fashion brands such as Michael Kors, Versace, and Jimmy Choo, for about $8.5 billion.
Tapestry showed its willingness to challenge giant European conglomerates such as LVMH and Kering by acquiring several well-known brands and holding them under its umbrella. The company also expects to save about $200 million in costs over the next three years as a result of this integration and plans to finance the majority of this acquisition with debt.
François Pinault Buys Majority Stake in Talent Agency CAA
In September, it was revealed that Artémis, the holding company of French billionaire and businessman François Pinault, had purchased a majority stake in Creative Artists Agency, a major Hollywood talent agency, from private equity firm TPG.
Artémis added CAA to its portfolio, which includes assets such as luxury brands Gucci and Alexander McQueen. Founded in 1975, CAA is an agency that represents top celebrities in a variety of fields, including sports, film, television, music, digital media, and marketing. Terms of the deal were not disclosed, but information previously reported by Bloomberg valued the transaction at approximately $7 billion by Pinault.
Korean Online Shopping Giant Coupang Buys Farfetch for $500 Million
December 2023 was the month of a series of acquisitions of major luxury e-commerce platforms due to financial difficulties.
Farfetch, the luxury e-commerce platform on the verge of bankruptcy, has been acquired by South Korean e-commerce giant Coupang for $500 million. In recent years, Farfetch’s market capitalization had plummeted to about $200 million for a combination of reasons, including skyrocketing costs and debt, a string of high-risk investments, and a slowdown in the global luxury goods market.
Founded in 2010, Korea’s Koopan is a fast-growing e-commerce company that has been dubbed the “Amazon of Korea. In cooperation with GREENOAKS CAPITAL PARTNERS, an American investment firm, the company provided $500 million in funding to Farfetch.
Matchesfashion Sells to Mike Ashley’s Frasers Group for £52 million
Immediately following the Farfetch news, it was reported that Frasers Group, a retail group owned by Mike Ashley of the UK, had acquired the luxury e-commerce site Matchesfashion for just 52 million pounds.
Matchesfashion was once a fast-growing luxury e-commerce site, but since its sale to Apax Partners in 2017, the company has struggled to balance the complex challenges of acquiring new customers and scaling its business with profitability, with losses increasing each year. Multiple management changes, an unexpected pandemic, and the structural decline of the wholesale model further spurred the company to struggle until Nick Beighton, currently CEO of Matchesfashion, arrived last year.
Like these two companies, Richemont’s Yoox Net-a-Porter is in a state of uncertainty about its prospects until the end of 2023, after the merger deal with Farfetch for its loss-making division collapsed.