Kering didn't cut its guidance this week. It just sounded less sure of it, and the analysts noticed. Fashion Business Daily, Saturday edition. Goldman props up Shein's shares, Germany's Galeria files for insolvency for the fourth time, and ChatGPT wants to be your fitting room. First, Gucci's owner, and a call that cost it a pile of price targets. Hit follow so the next episode shows up on its own.
Thomas Barnet, writing in MarketScreener, quoting Jefferies analyst James Grzinic:
Kering's pre-close preparation process was overtaken by growing investor concerns about the group's messaging, which placed increasing emphasis on efficiency gains rather than on the timing of a more decisive recovery in Gucci's brand momentum.
Context. Kering held a call with sell-side analysts ahead of its third-quarter sales on Thursday, October 22. Per Investing.com, management sounded more cautious than at the first-half results. Kering didn't formally reiterate guidance, but it didn't change it either. Then the cuts: Barclays, Citi, HSBC, Jefferies, JP Morgan. Citi went from 282 euros to 243. These are analyst targets, not company numbers. Efficiency gains. That's the line that spooked people. On Thursday we heard Luca de Meo say 50 or maybe 70 million customers left luxury. You don't win them back with a leaner org chart. You win them back with Gucci product people actually want. To be fair, management did point to progress on Gucci's product offer and pricing, resilience at Saint Laurent and Bottega Veneta, and a stronger fourth-quarter newness pipeline. But Bernstein's Luca Solca says Kering reported a worse macro environment, and that brand momentum will clearly slow in the third quarter. Barclays now expects Q3 organic growth of minus 1.5 percent, from flat before. And the stock? Down 2.7 percent Thursday in Paris, then, per Ad Hoc News, another 2.8 Friday to about 211 euros. The 52-week low is 203.20. For reference, first-half net income fell 60 percent to 189 million euros, and Gucci comparable revenue was down 5. October 22 tells us whether 'gradual' means one quarter or a whole year.
The Financial Times, via Headlines Briefing:
Goldman Sachs bought $220mn worth of Shein shares after the fast-fashion retailer’s rocky stock market debut. The Wall Street bank purchased 42mn shares, or 13 per cent of Shein’s initial float, as part of its role as an underwriter to stabilise a stock shunned by investors.
This follows the results we covered Wednesday. Goldman disclosed the buying in a Hong Kong exchange filing, at prices between HK$35.90 and the HK$48.56 listing price. That's the greenshoe. Underwriters sell extra stock at the issue price, then cover by buying in the market if the price falls. Per the FT, that buying would have produced a trading profit of about $34 million. So the bank made money propping up the stock it sold. Love that for them. Here's the number that matters. The shares are down 38 percent since listing, valuing Shein at about $16.3 billion. Shein reported $15 billion in cash at June 30. The market is valuing the whole operating business at just 1.3 billion dollars more than that cash pile. And Europe's getting harder. Anadolu has analyst Juozas Kaziukenas calling the EU's three-euro duty on low-value parcels 'devastating' for Shein and Temu, with a separate handling fee due by November 1 at the latest. And it's spreading. The Korea Herald says analysts are questioning Musinsa's 8 to 10 trillion won valuation ahead of its IPO, likely in the first half of 2027. Musinsa's first-half revenue rose 22.5 percent, but operating profit fell 11.2. IBK's Cho Kyung-jin pointed straight at Shein's listing. Fashion platforms are getting priced on profits now, not on growth stories.
From dpa, published in FashionNetwork:
For Galeria, this is the fourth insolvency filing in six years, following those in 2020, 2022, and 2024. Numerous branches were closed as a result of the earlier proceedings. Creditors waived claims worth billions of euros to give the department store chain a path out of the crisis.
Galeria filed Friday with the Düsseldorf Local Court. Its 83 stores keep trading for now, and about 12,000 employees don't know if they'll get insolvency pay or which stores close. US firm NRDC and Bernd Beetz have owned it since summer 2024. In June it got up to 160 million euros of financing from Gordon Brothers, tied to a three-year restructuring plan. And Meyka says that money is already gone. Four months. Citing Bild, it says talks on more funding fell apart Thursday night, and it puts September sales down 25 percent. The union, ver.di, blames 'hair-raising management errors.' And the workers pay for it again. Treat those as reported figures. The structural numbers are from the EHI Retail Institute. Net revenue was 4.5 billion euros in 2019 across 174 stores, and roughly 2 billion with fewer than half as many. Department and variety stores went from 4.2 percent of German retail to 1.2. And Kodi, the discounter, is closing 43 stores and its headquarters in its own insolvency. Meanwhile Selfridges is back in profit. Per The Times, a 13 million pound pre-tax profit for the year to January 3, from a 15.9 million loss, on more foot traffic across just four stores. The format isn't dead. A big fleet of mid-market stores with no reason to visit is.
Evan Clark, writing in WWD:
While virtual try-on or favorites functionality are nothing new online, anything ChatGPT changes for its 1.2 billion weekly users can be meaningful.
OpenAI launched this globally on Thursday. You upload a selfie or a full-body photo and hit Try On in shopping results, or upload a screenshot of an item from anywhere. A new Favorites feature saves products and try-ons to a library. It runs on the new ChatGPT Images 2.5 model. Last week it was Tesco putting try-on screens in a supermarket. Now it's in the chatbot. My question is drape. Show me a bias-cut slip dress on a real body, not a sticker on a selfie. That's the open question, and TechCrunch notes Google launched virtual try-on last year. OpenAI also had to drop instant checkout after it didn't perform well, so this is discovery, not buying. But WWD cites an Adobe report: in May, AI-referred retail visitors converted 54 percent better than other traffic. So brands need product imagery that works for the bot, not just a nice campaign. B&T made the same point: marketers now have to be findable inside the AI, not just on the product page. The test I'd watch is returns. Nobody's shown this cuts them yet.
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We'll be watching for Kering's third-quarter sales on October 22, which Galeria stores survive the court process, and the EU's parcel handling fee due by November 1. Links to every story are in the show notes. That's Fashion Business Daily for this week. Enjoy the rest of your weekend, and we'll be back Monday. This is a Lantern Podcast.