TOP10 NEWS OF THE WEEK / 11.02.2024
ROBLOCKS STOCKS REACH RECORD HIGH AS FASHION BRANDS EMBRACE THE METAVERSE
?? Roblox stock jumped after the company raised its annual outlook, following a quarter where daily user count and hours played surged. Shares rose 13% after the market opened to $48.79. Roblox’s meteoric rise in user engagement reveals a massive opportunity for fashion brands to explore the metaverse. Recently, the gaming platform’s daily active users surged to 88.9 million, surpassing projections, while engagement hours soared to 20.7 billion.
?? Bookings also increased by one-third, driving annual revenue expectations to as much as $3.57 billion. This growth reflects a larger trend: the demand for interactive, virtual environments where users create, explore, and express themselves—ideal conditions for fashion innovation. Fashion brands are already engaging millions of young users on Roblox, offering digital wearables that parallel physical fashion collections. This space offers an unprecedented opportunity for fashion to intersect with technology, as consumers increasingly value digital expressions of style. Roblox’s ability to convert engagement into revenue underscores that the metaverse can be a valuable avenue for fashion investment.? Fashion investors, meanwhile, should take note of Roblox’s strategic gains, as fashion in the metaverse requires partnerships with tech giants and investment in VR and AI customization.
The METAVERSE FASHION COUNCIL recognizes this potential, promoting tech-forward solutions that align the industry with emerging digital economies at the Metaverse FASHION WEEK ek this November - https://lnkd.in/gpijXEMZ
?? In November, Roblox will introduce safety updates following significant criticism and reports of misuse on the platform. Children under 13—representing around 40% of Roblox users—will need parental consent to access specific chat features. A Bloomberg investigation in July revealed that over two dozen individuals have been arrested for alleged abuse or abduction tied to the platform.
?? Earlier, in October, Roblox shares dipped 9% after Hindenburg Research alleged the company neglected child safety and overstated user data. Addressing these concerns, Roblox reaffirmed its commitment to safety, with thousands of moderators actively monitoring content.
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TECH GIANTS ARE SET TO SPEND $200 BILLION THIS YEAR CHASING AI
Key Takeaways:
?? Amazon , Alphabet Inc. , Meta and Microsoft all accelerated spending
?? Mixed results from the big tech won’t slow 2025 investment
?? The capital expenditures of the four largest internet and software companies — Amazon.com Inc., Microsoft Corp., Meta Platforms Inc. and Alphabet Inc. — are set to total well over $200 billion this year, a record sum for the profligate collective. Executives from each company warned investors this week that their splurge will continue next year, or even ramp up.
?? On an investor call on Thursday, Andy Jassy , Amazon ’s chief executive, called AI a “really unusually large, maybe once-in-a-lifetime type of opportunity,” evidenced by his company’s?projection?for a record $75 billion in spending for 2024.?? A day earlier, Meta CEO Mark Zuckerberg pledged to?ramp up investing?in AI language models and other futuristic projects he now frames as core to his company’s future. Meta’s capital spending may climb as high as $40 billion this year.
?? Meanwhile, Alphabet Inc. ’s capex budget came in higher than Wall Street expectations, and its Chief Financial Officer Anat Ashkenazi projected “substantial” increases in 2025.
?? Apple Inc.?has also vowed to invest in AI, introducing a suite of services, like a more capable Siri, called Apple Intelligence. But its relatively weak financial results this quarter weren’t helped by its new AI products, which mostly hadn’t arrived.
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THE CREATIVE CHURN IN LUXURY: WHO’S IN, WHO’S OUT, AND WHY IT MATTERS
?? Global economic shifts and consumer demands are fueling unprecedented changes among creative directors at top luxury houses like CHANEL , Christian Dior Couture , and Gucci . Analyst Luca Solca terms it a “creative director carousel,” with seasoned talent navigating demands for both innovation and brand stability.
?? Fresh Vision vs. Brand DNA: As Karen Harvey from her eponymous consultancy emphasizes, the industry needs dynamic business-creative duos to truly revitalize brands. Strong partnerships—rather than abrupt shifts in direction—allow brands to stay relevant while honoring core identity.
?? Training Gaps: Emma Davidson of Denza stresses that recent fashion grads often lack couture expertise, which limits their runway success. This shortage in couture talent, she argues, calls for reinvestment in long-term talent pipelines to prevent future brand stagnation.?? Governance-Driven Success: Consultant Floriane de Saint Pierre advocates for tailored governance, arguing that executives should align creative leadership with strategic goals for sustained influence.
In a fast-evolving market, governance, team cohesion, and strategic creative leadership remain central to securing the future of luxury.
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THERE WILL BE NO AMERICAN LVMH
?? Key Takeaways
?? Federal Trade Commission Blocks $8.5 Billion Merger AttemptThe merger between Tapestry (Coach , kate spade new york ) and Capri Holdings Limited (Michael Kors , Versace ) was blocked by a federal judge, marking a setback in creating a U.S.-based luxury powerhouse to compete with European conglomerates like LVMH.
?? Risk of Stifling CompetitionThe FTC argued that combining these brands would limit competition in the “accessible luxury” handbag market, potentially raising prices and lowering wages.?? Legal and Market Challenges for Future M&AsThe decision may increase scrutiny of mergers in fashion, where brand consolidation could now face more regulatory resistance, slowing growth opportunities.
?? Strategic Implications for U.S. FashionTapestry and Capri must now pivot, with Tapestry’s CEO expressing concerns over lost growth potential if the merger appeal fails.
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EVEN CHANEL PREDICTS HARSH 2025-2026 FOR LUXURY FASHION. THE ONLY REDEMPTION IS INVESTMENT IN TECH
The luxury fashion industry faces turbulent times, with third-quarter reports from giants like LVMH , L'Oréal , and Kering showing marked declines. LVMH reported a 4.4% drop in sales, and Kering saw a staggering 15% drop, primarily attributed to the slump in Chinese demand, an ongoing property crisis, and rising youth unemployment in China. However, industry insiders believe these economic woes underscore a deeper issue: "luxury fatigue." CHANEL 's Frederic Grangie recently highlighted the luxury sector's overreliance on traditional models and emphasized an emerging disinterest among customers in mature markets. This fatigue is prompting brands to rethink their approach to innovation. Leading experts argue that the industry's salvation lies in technology: integrating AI, blockchain, and wearable tech into a new era of?smart fashion.
Notably, Chanel foresees complications for 2025 and 2026, stemming from oversaturation and wavering consumer interest.
Smart fashion, championed by innovative fashion tech and investment leaders, supported by initiatives from the METAVERSE FASHION COUNCIL , holds the potential to reinvigorate the luxury space. The council’s upcoming?Metaverse Fashion Summit, set to take place during the?Metaverse Fashion Week, November 20-24 (https://lnkd.in/gpijXEMZ ), aims to bridge fashion, technology, and investment sectors, discussing sustainable paths forward in the luxury industry. The Summit will spotlight AI-powered personalization, virtual and augmented fashion experiences, and blockchain-enabled assets, which can offer buyers more meaningful and interactive experiences, adding value beyond traditional luxury. As smart fashion gains traction, the luxury market may indeed find its path to recovery, evolving from physical opulence to an era defined by digital innovation. The collaboration of leading tech and investment stakeholders in the Metaverse Fashion Council initiative signals a turning point for an industry on the brink of reinvention.
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BITCOIN HITS AN ALL-TIME HIGH ABOVE $72,500: LESSONS FOR THE FASHION INDUSTRY FROM CRYPTO INVESTMENT
Bitcoin has surged to an unprecedented $72,500, fueled by substantial investments in innovative financial technologies, the allure of resilient assets amid financial instability, and a growing shift away from traditional centralized economic models. Compared to luxury fashion giants like LVMH and Kering , Bitcoin's rise starkly contrasts with recent downturns in these luxury shares since 2009.
Over its brief 15-year history, the crypto industry's market cap has soared from 0 to $2.5 trillion, outpacing the luxury fashion industry with its 150-year history, which stands at $1.5 trillion. This market discrepancy highlights crypto's appeal to both retail and institutional investors, positioning it as a formidable contender within the global financial landscape and potentially signaling the future of luxury investment.
However, fashion is facing challenges in adapting to the digital age. Despite advancements in AI that could enable new value propositions within the metaverse, the luxury industry remains tied to outdated practices and a heavy reliance on the Chinese market. To address this gap, the?Metaverse Fashion Council?is advocating for deeper investment in fashion tech, blockchain, cryptocurrency, and AI, striving to position fashion for long-term viability within a tech-driven economy. The upcoming?Metaverse Fashion Summit, hosted during?Metaverse Fashion Week, November 20-24, (https://lnkd.in/gpijXEMZ ) aims to facilitate a critical dialogue among leaders in technology and investment. The event will showcase transformative strategies, technological solutions, and innovative pathways for luxury fashion’s integration within the expanding metaverse economy, pointing the way toward a revitalized, tech-infused industry future.
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JOIN THE METAVERSE FASHION COUNCIL:
EUROPE'S PATH TOWARD A PAN-EUROPEAN C-CORP
Key Takeaways:
?? EU Inc Petition for Startup-Friendly Corporate StatusInspired by the U.S. Delaware C-Corp, EU Inc is a proposed “28th regime” designed to unify Europe’s startup regulations. The initiative, with 11,000+ supporters, aims to simplify and harmonize corporate structures for innovation across EU nations.
?? Broad Grassroots and VC SupportEntrepreneurs, investors, and advocacy groups like France Digitale are rallying for EU Inc. This unified structure could unlock cross-border growth by lowering bureaucratic barriers and creating a competitive EU alternative to the Delaware model.
?? Moving Toward Unified Regulation, Not DirectivesA key lesson from the EU’s past “Societas Europaea” form is to avoid differing national adaptations. Advocates, including co-author Antoine Latran , recommend a “regulation” for all EU members to create consistent rules and sidestep complex country-specific adaptations that previously stunted cross-border integration.
?? Investment Potential and Economic DriveVCs like Index Ventures support EU Inc, seeing it as essential for unlocking European capital flows and accelerating tech and startup investment. This pan-European alignment aims to make the EU more attractive for both founders and VCs in a rapidly competitive global tech landscape.
? High Stakes, Strong Allies, and a Realistic TimelineA roadmap to submit the final petition by December 1, when new EU commissioners take office, positions EU Inc for five years of structural reform focus. Reports from EU figures such as Mario Draghi support EU Inc’s transformative potential—though advocates note challenges from national capital maintenance standards may arise.
?? Beyond EU Borders, Preparing for Competitive GrowthWhile intended for the EU, EU Inc’s focus on Europe could influence the U.K. post-Brexit and boost Europe’s innovation stance against global powers like China. This initiative sends a message: European tech can’t afford to sit on the sidelines in a competitive landscape.
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CHANEL'S CEO WENT TO MICROSOFT HQ AND ASKED CHATFPT TO SHOW HER A PICTURE OF HER COMPANY LEADERSHIP. THEY WERE ALL MEN IN SUITS
Key takeaways:
?? CHANEL ’s second female global CEO Leena Nair , who has worked to increase gender diversity in the workplace, recently learned that OpenAI ’s ChatGPT had a much different idea about the demographic makeup of the legacy luxury brand.
Nair and her team visited Microsoft ’s Seattle headquarters and spent time experimenting with ChatGPT, Nair said in a recent Stanford Graduate School of Business “View from the Top”?interview. “We’re like, ‘Show us a picture of a senior leadership team from Chanel visiting Microsoft’—it is all men in suits,” she said.
?? Nair’s Silicon Valley trip also included a visit to Google and other tech firms—part of Chanel’s push into AI investment, including?Lipscanner, an AI-powered app allowing users to virtually try on lipstick, which it introduced in 2021. But she said the image ChatGPT created to depict her team failed to account for Chanel’s employee makeup of 76% women—including the company’s own chief executive. She added that 96% of the brand’s clientele is also women.“It was a 100% male team, not even in fashionable clothes,” she said. “Like, come on. This is what you’ve got to offer?”
?? “AI is everywhere, yes, and it’s going to be transformative in our world, so luxury has to engage with it. Chanel has to engage with it,” Nair said. “It’s so important that we keep the ethics and integrity of what we’re doing,” she added. “I constantly talk to my friends in tech, all the CEOs, saying, ‘Come on, guys, you gotta make sure that you’re integrating a humanistic way of thinking in AI.’”?? The careful AI-vetting process aligns with Nair’s previous work to address gender disparities in her own workplace. Since her tenure at Chanel began in 2021—after?working 30 years?at?Unilever, where she rose to the rank of chief human resources officer—Nair has increased the company’s percentage of female managers from 38% to?about 60%.Nair’s role as global CEO disrupts a long line of male executives that have helmed the company. Beyond Maureen Chiquet , who served as?Chanel’s first female global CEO?from 2007 to 2016, no other woman besides Nair has had the title of chief executive in the brand’s 114-year history.
?? “I’ve been the first at every job I’ve done,” she?told the?Wall Street Journal?in 2023. “The first woman, the first brown person, the first Asian, the first Indian—but I don’t want to be the last.”
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