Nike says the turnaround arrives in fiscal 2029. So what exactly are shareholders holding until then? This is Fashion Business Daily. Today it's Nike's long runway and Prime Day shoppers piling into basics, then LVMH and Kering finally rewriting the rules for models. Somebody's having a worse week than they're admitting. Starting with Nike, and the first quarter since the tariff refund. Tap follow so the next episode finds you. From Convexity:
Nike's first quarter without its tariff refund raised gross margin 60 basis points on logistics and currency. It guides revenue down high-single digits, and says most of Pace's savings arrive in fiscal 2029 and 2030.
So Nike's turnaround has a date now. Fiscal 2029. That's a lot of sneaker drops to sit through waiting on a finance schedule. Credit where it's due, though. These are Nike's own numbers from the October 1 call, run through by Convexity Research. Gross margin was 42.8%, up 60 basis points, in the first quarter without that $986 million tariff refund propping it up. Compare that to June, when the refund was worth about nine points of margin. Up 60 on what, though? Logistics and currency. So shipping got cheaper and the dollar moved. Nobody lined up for any of it. Agreed, and it's still the cleanest margin read we've gotten in this tariff cycle. Funny detail: neither the release nor the call said the word 'tariff.' My problem is the guide. Revenue down high-single digits, China still soft. If most of Pace's savings land in 2029 and 2030, I want to know what moves sell-through in the next four quarters. Product. Put a shoe on the wall that resells over retail and the 2029 math takes care of itself. From Modern Retail:
Notably, apparel basics were up 25% year over year, according to Adobe. That momentum appears to build on the summer’s Prime Day event, when apparel overtook home and gardens as one of the top categories in the U.S. and globally, according to Numerator. Indeed, fashion sellers on Amazon are seeing pleasantly positive results despite overall weakness across the category this year.
Apparel basics up twenty-five percent over Prime Big Deals Days. Right after the Nike piece we just hit? People stocked up on tees and socks at a discount. Nobody camps out for a two-day markdown. That twenty-five is Adobe's tracking, not an Amazon number, and it's basics on promotion. Put it next to the Citi card-spending note from yesterday's show, luxury down 5.8, ready-to-wear up 0.2, and you can see where the price-conscious money's drifting. Down-market. Which is brutal if you need full-price desire. You spend October training people to wait for the deal, then you want them paying retail for a hyped release in March? Good luck. Ponyflo's founder says hats came in forty percent over goal, and great, but that's a small brand winning on a promo calendar. Over their own goal, as the founder tells it. Adobe's top line is $9.86 billion across those two days, up 8.5%, faster than last year's 7.3. So yes, growth. What I'd want next is what all those markdowns cost in margin. Miles Socha, writing in WWD:
All parties involved in shows, model castings and photo shoots for Kering and LVMH brands are to receive training next year as part of a new zero-tolerance policy for any form of harassment, abuse or violence. In a fortification of the model charter they jointly established in 2017, the two French luxury groups said Thursday they are also planning unannounced checks and audits at workplaces, and increased monitoring of interactions with models, particularly during situations of nudity or partial nudity.
Okay, this is the one this week I actually care about. LVMH and Kering moved the minimum age for models representing adults to eighteen, up from sixteen. And anybody who's worked a shoot will clock the nudity rule: formal agreement first, a dedicated space, and you're never left alone with someone from the production team. The unannounced audits are the right design. You can't stage-manage a check you don't know is coming. But per Worthbury, the updated charter doesn't name a penalty for a breach. And zero tolerance with no stated consequence is hard to measure from the outside. Yeah, and the people being protected aren't the ones who signed it. Agencies and casting directors decide who's in the room. If the bookings don't change, an audit just writes up what already happened to some nineteen-year-old. The timing's a gap too. Training starts next year, and the rules kick in at Paris Men's in January. So every resort and pre-fall shoot between now and then is still running on the 2017 terms. Have feedback, story ideas, or a correction? Email us at fashionbusinessdaily at lantern podcasts dot com. We'd love to hear what you're noticing and what we should cover next.
We're watching the strengthened LVMH-Kering model charter take effect with Paris Fashion Week Men's in January, including its minimum age of 18 and the zero-tolerance rules. Links to every story are in the show notes, so you can follow up on whatever caught your attention. That's Fashion Business Daily for today. This is a Lantern Podcast.