Retail’s winners are pulling away—and the brands in the middle have picked a terrible moment to be merely fine. This is Fashion Business Daily. Today: the earnings split gets sharper, Fabletics goes after campuses, and fashion AI gets another enormous pile of money. First, the Q2 retail read-through—and whether the numbers actually back up all those strategy decks. Follow the show and the next briefing lands in your feed on its own. Jharonne Martis, writing in Lipper Alpha Insight:
The U.S. consumer remains resilient enough to support earnings growth, but that resilience is increasingly concentrated. Strong profit growth is being driven by a handful of large, high-margin retailers, while guidance across the broader sector points to a more cautious outlook for discretionary spending in the second half of the year.
At last, some numbers. LSEG’s Q2 retail-and-restaurant earnings index is estimated to grow 67%, but the strength is concentrated: Broadline Retail is forecast up 231.1%, while discretionary guidance turns cautious for the second half. So the consumer hasn’t vanished; they’ve become extremely selective. Nike’s rebound and Lululemon’s weakness fit the picture: products people want still move, and the middle is getting squeezed. Let’s keep the labels straight: Textiles, Apparel & Luxury Goods is the second-strongest group, with estimated earnings growth of 51.6%. That’s a sector estimate, not proof every fashion brand has healthy sell-through. Etsy reported 292% earnings growth; Amazon, 33.3%. Meanwhile, this is a brutal moment for luxury multi-brand retailers trying to win nervous labels back. PR Newswire writes:
Naiz Fit's technology has generated more than 500 million size recommendations to date, serving more than 10 million users and connecting with more than 100 million garments across more than 100 apparel brands.
Five hundred million size recommendations sounds huge. I want the return-rate number right beside it, because a virtual try-on that doesn’t stop the wrong jeans coming back is just a very polished slide deck. MySize says Naiz Fit has served more than 10 million users, linked 100 million garments, and works with more than 100 brands, including Levi’s, Desigual and Paul & Shark. That’s meaningful deployment scale. It still doesn’t prove a margin benefit. And those brands have wildly different fits. If one tool works for Levi’s denim and the very different worlds of Desigual and Paul & Shark, okay—there’s a product test I respect. We just heard that Q2 shoppers are more price-sensitive and discretionary guidance is getting cautious. In that market, show that you cut returns or improve conversion and sell-through—not just that you generate more recommendations. Higgsfield writes:
Higgsfield, the leading AI video and image creation platform for professional creators, brands, agencies, and studios, today announced a $400 million Series B financing at a $5.4 billion valuation. The round was led by DST Global, with participation from Tribe Capital, Growth Equity at Goldman Sachs Alternatives, Smash Capital, Fifth Wall, Valor Capital, Intel Capital, Liberty Global Tech Ventures, Mirae Asset Capital, and NTT DOCOMO Ventures.
Higgsfield says annualized revenue has reached $700 million, alongside a $400 million Series B at a $5.4 billion valuation. That puts it at roughly 7.7 times revenue—serious software-market pricing for a tool selling visual production to brands and agencies. A $5.4 billion valuation for making more brand content faster. Great—because the world was clearly suffering from a shortage of glossy, dead-eyed campaign imagery. Natalia Vodianova Arnault joining as an investor and adviser gives Higgsfield real fashion access. But the proof is commercial: lower creative costs, better sell-through, maybe fewer returns. Bigger recommendation or content counts don’t answer that. Exactly. If Higgsfield helps a small label make a sharper lookbook, great. But if it lets fifty brands generate the same fake-luxury moving wallpaper at once, it’s scaling sameness. From Modern Retail:
Fabletics is expanding its college apparel offerings as it continues its quest to become a $2 billion company. Just in time for back-to-school, the activewear brand is cranking out licensed merchandise for 200 U.S. colleges and universities, including the University of Indiana, the University of Michigan, Emory University and San José State University.
Two hundred schools is a real campus push, not a cute logo capsule. But a $64.95 hoodie has to beat Nike College and Champion on the actual garment—students can spot a lazy licensed blank from across the bookstore. Fabletics cleared $1 billion in 2025, up 18%, and wants $2 billion by 2030. Fourteen campus-adjacent stores make this a real retail bet; I want the traffic, sell-through and margin data before crediting College Shop with much of that doubling. “Phenomenal results” after a spring test at roughly 100 schools is executive talk, not a scorecard. The VIP discount can get a freshman through checkout once; the tees and belt bags have to earn the next purchase. With discretionary guidance turning cautious, this is a sensible customer-acquisition experiment. But licensed merchandise can carry a different margin profile from core activewear. The revenue target is company-stated; the operating proof is still ahead. Have feedback, story ideas, or a correction? Email us at fashionbusinessdaily at lantern podcasts dot com. Your notes help us make Fashion Business Daily better.
Links to every story are in the show notes if you want to dig deeper. Thanks for listening. We’ll be back tomorrow. That’s Fashion Business Daily for today. This is a Lantern Podcast.