Nike just told Wall Street the year gets worse before it gets better. And one fix is fewer Jordans. Fashion Business Daily. Galliano's Zara collection hits the racks, Moschino's owner gets a rescue bid, and Dallas loses the store where Neiman Marcus started. First, the swoosh, and the one category that's actually working. Hit follow so the next episode shows up on its own.
From Modern Retail, on Nike's earnings call:
But during the fiscal first quarter, Nike’s running business was up double digits with “consistent share gains,” Hill said. Specifically, the “innovation in max cushioning helped reignite this business,” Hill said. “We’ve nearly tripled our share of the max cushioning category over the past year.”
That's the good news. Here are the company-reported numbers. Revenue of $11.2 billion, down 4 percent. Net income about $712 million, down 2. Gross margin up 60 basis points to 42.8 percent, mostly on cheaper warehousing and logistics. Greater China down 26 percent, currency-neutral. And the full-year guide is a high-single-digit revenue decline, while analysts were at roughly minus 2, per LSEG data cited by Reuters. So running's back, and the stuff that made Nike cool is the problem. Sportswear down low double digits, Converse down 28. And Elliott Hill on Jordan, quote, 'we have been oversupplying the product.' Sole Retriever counts about ten retro Jordans a month for the past year. Nineteen in February. Of course they're sitting on shelves. Per Sole Retriever, scaling back the retros should start sometime in 2027. There's also a new program, Pace: three geographies instead of four, a campus in Bengaluru, and about $2.5 billion in savings through fiscal 2031. Layoffs start in calendar 2027, and Nike says it doesn't know the number yet. Fewer drops is the right call. Scarcity is the whole Jordan business. But you can't restructure your way to a hit lifestyle shoe, and Sportico points out they still haven't made one. Meanwhile Mbappé just left for On. GlobalData's Neil Saunders asked the obvious thing: if the model isn't fit for purpose, why weren't these changes made sooner? Hill says targets get updated starting in November.
Shayeza Walid and Mimosa Spencer, writing in The Business of Fashion:
Zara’s tie-up with Galliano, announced in March, is part of the retailer’s strategy to move upmarket as it grapples with the rise of ultra-fast fashion platforms like Shein and Temu, which have grabbed a share of spend from younger shoppers with tighter budgets. So far, it seems to be paying off.
Okay, I'll say it. The concept is great. Galliano took Zara stock, a wool coat, a slip dress, a cotton shirt, and cut and reworked it with couture technique. Then Zara produced the new designs. He told Vogue's Alexander Fury, 'I had no intentions to dumb down.' It launched Thursday, online globally, with store space in London and Madrid and a pop-up in Paris. Prices run from just under 20 euros for scarves to over 700 for the most elaborate gowns. In London, BoF says some shoppers waited an hour and a half for wristbands. That's early demand. It isn't sell-through yet. And the baggage is real. The Met dropped its planned Galliano retrospective after a backlash over his antisemitic remarks, and Galliano withdrew in August. One London shopper told BoF, 'It's not about the name, it's about the design.' Zara's betting most people agree. It's also branded 'Re{form} Zara Authored by the Couturier John Galliano,' partly because LVMH still owns the John Galliano name. What I'd watch is whether volume one sells at full price, or ends up as an expensive marketing exercise.
CPP-Luxury reports on Aeffe, the group behind Moschino and Alberta Ferretti:
According to a statement, it is now envisaged that, rather than being acquired by a single company destined to be subsequently split into several entities, substantially all of the Aeffe and Pollini businesses will be purchased directly by three newly incorporated, operating and independent companies, indirectly controlled by Oxy.
To be clear on status: this is a bid, inside a negotiated settlement procedure for a business in crisis, and that procedure expires October 4. Oxy Capital puts the total value at about 115 million euros. Final agreements with co-investors, including an industrial investor listed in China, are expected by the end of October. Completion would come in the first weeks of 2027. A hundred fifteen million euros for Moschino, Alberta Ferretti, Pollini, and the factories in San Giovanni in Marignano. That's a distressed price for real Italian manufacturing. I care about those workers. The statement says Italian staff affected by the deal move to the new companies. And the Ferretti family, which controls the majority of Aeffe, is still in talks about whether to take part. Compare that with Chanel. AK&M, citing foreign media, says it signed an agreement to buy the Paris shirtmaker Charvet. Terms weren't disclosed, and Charvet keeps its creative independence. So the cash-rich house buys the atelier to protect its craft, and the stretched group sells off the factory. Same country's skills, very different buyers.
Brian Womack, writing in The Dallas Morning News:
The store has held its iconic place downtown for over a century, drawing in celebrities, local elite and many others. Yet its closure was announced earlier this year amid financial headwinds. Now, its parent, Exemplar Luxury Group, is turning its focus in Dallas to NorthPark Center, where it has a decades-old locale.
Wednesday was the last day at 1618 Main Street. A hundred twelve years. One shopper came for her 91st birthday. Coco Chanel tried on hats in that store in 1957. And the business logic, per Candy's Dirt: the company said the store wasn't profitable, citing falling foot traffic downtown. Saks Global filed for Chapter 11 in January and emerged over the summer as Exemplar Luxury Group, saying it cut debt by nearly 75 percent and more than 100 stores. A WARN notice puts the closure at 67 employees. Some of the tradition moves north. The Zodiac Room is being reimagined at NorthPark before the holidays, and bridal moves there too. Nice, but you can't move a nine-story building. Nobody knows what happens to the building yet. CoStar reported Exemplar is looking for a development partner, and the Dallas Landmark Commission has started the historic designation process. It's fewer, bigger doors where the customers already shop. That's the department-store playbook now.
Got feedback, a story we should be chasing, or a correction? Send it to fashionbusinessdaily at lantern podcasts dot com. We read every note.
We'll be watching for Aeffe's settlement deadline on October 4 and its co-investor agreements by the end of October, Nike's updated targets starting in November, and whether Galliano's Zara pieces keep selling once the queues are gone. Links to every story are in the show notes. That's Fashion Business Daily for this week. Have a good weekend, and we'll be back Monday. This is a Lantern Podcast.