In its latest executive shuffle, Estée Lauder Companies has announced key leadership changes to its West Coast-based brands. Somer Tejwani will be promoted to SVP and global general manager of Too Faced, while Michelle Shigemasa has been appointed SVP and global general manager of Smashbox Cosmetics and Glamglow.

The two executives will serve as the successors to ELC’s global president of California brands Tara Simon. The news comes one week after the announcement that Simon would become the company’s North America president, succeeding North America group president Mark Loomis, who will retire at the end of fiscal year 2025. Tejwani, Shigemasa, and Simon will take their posts on Jan 1, 2025, followed by Loomis and ELC CEO Fabrizio Freda’s retirement at the end of fiscal year 2025.

Tejwani and Shigemasa will help Too Faced, Smashbox, and Glamglow “by elevating their brand equity, inspiring creativity, and enhancing consumer engagement through immersive brand experiences and product education,” said ELC executive group president Stéphane de La Faverie. Both hope to drive growth through innovative product launches and strengthening their respective brands’ equity in an increasingly competitive prestige beauty market.

Tejwani joined Too Faced’s marketing team in 2012, and the brand was acquired by ELC four years later. Shigemasa has recently held CEO roles at Ariana Grande’s R.E.M. Beauty, Shani Darden Skin Care, and Unilever Prestige. She re-joins ELC after serving 13 years at Smashbox in leadership roles through 2017.

Learn more:

Estée Lauder Companies Announces Leadership Changes

The beauty conglomerate names two replacements for its North America group president, who will retire in 2025.

In its heyday, Sears dominated the US from its headquarters in Chicago, once the country’s tallest tower. The retailer won over patrons with mail-order catalogues by taking advantage of the railroad system and the US Postal Service, but setting the stage for online shopping.

Now, Sears’ once-bright blue logo sits fading on abandoned, empty buildings in strip malls across the country, serving as a relic for passing drivers. And it’s struggling to hold onto less than a dozen stores it has left.

Sears is working with advisory firm Huron Consulting Group Inc. to help score rent concessions from its landlords of its remaining locations, according to people with knowledge of the matter, who asked not to be identified discussing the private talks. A representative for Huron declined to comment. Sears and its parent ESL Investments did not respond to requests for comment.

The department store chain, founded as Sears, Roebuck and Co. in 1893 and hailed in the 1980s as America’s largest retailer, has become a shell of itself. In 2005, Sears was acquired by discount retailer Kmart, under the leadership of billionaire hedge fund manager Edward Lampert.

Over the next decade, the business was splintered into 30 different divisions, stores were shuttered and thousands of employees were fired. Compiled with years of underinvestment and plunging sales, Sears snowballed into bankruptcy in 2018 with 687 stores, down from 3,500 at the time of the Kmart deal.

Sears exited bankruptcy under the ownership of Lampert’s ESL Investments in 2022 with 22 stores in the US and Puerto Rico, but is now down to 11 locations, according to its website. It has four locations open in California, two in Washington, two in Florida and one in Massachusetts, Texas and Puerto Rico. Sears does not have any stores within 100 miles of New York City — it closed its last store in the area in 2021 — or Chicago, once its home city.

Big-box retailers have struggled to hold onto physical presences over the last four years, after the pandemic led to an uptick in online shopping. About 15 percent of all retail sales in the second quarter were online, up from about 10 percent in 2019, according to a report from the US Census Bureau.

Last year, Bed Bath & Beyond Inc. filed for bankruptcy, closing all of its stores and liquidating its assets in the process. It cited a continued decline in sales, with fourth quarter sales in 2022 dropping $1 billion from a year prior.

By Reshmi Basu

Learn more:

The Debrief | Can Department Stores Save Themselves?

BoF Senior Correspondent Sheena Butler-Young and Retail Editor Cathaleen Chen discuss the ongoing struggle of American department stores to remain relevant and what lessons they might learn from their European counterparts.

Gucci has promoted deputy chief executive Stefano Cantino to lead the Italian mega-label, succeeding interim CEO Jean-François Palus.

Cantino climbed the ranks at Prada over the course of two decades, working closely with executive chairman Patrizio Bertelli in various communications, merchandising and strategy roles through the company’s global expansion, public offering and lengthy turnaround. The Italian executive then decamped to Louis Vuitton, where he oversaw communication at the LVMH flagship.

Cantino succeeds Jean-François Palus, formerly the managing director of Gucci owner Kering. Palus joined the brand in 2023 following the departure of Marco Bizzarri and has worked to revamp internal processes and culture while onboarding a new designer, Sabato De Sarno, but has been seen to lack hands-on experience in running a large fashion brand at a time when Gucci’s fortunes are under severe pressure.

Gucci’s first-half revenue fell 20 percent as it struggles to transition its image during a sharp slowdown in demand for luxury goods. The brand phased out product and marketing from its previous creative era, led by star designer Alessandro Michele, clipping sales of maximalist couture and streetwear-inflected merch. A new strategy seeking to underscore Gucci’s heritage and better promote the brand’s core range of carry-over items has thus far been unable to fill the gap, in part hindered by a muted industry reception to De Sarno’s vision and slow delivery of his seasonal collections.

Stay tuned to BoF for updates on this developing story.

Shein’s UK sales soared to £1.55 billion ($2 billion) last year ahead of the online fashion retailer’s potential initial public offering in London.

The company, which was founded in China but is now based in Singapore, saw its British revenue rise 38 percent in 2023 from a year earlier, according to a filing last week at UK registry Companies House.

Shein has become one of the world’s most valuable startups thanks to its model of high-volume, ultra-cheap fashion. The e-commerce company is awaiting regulatory approval in China and the UK to proceed with an initial public offering that would boost London’s stock market amid a dearth of listings. The IPO could value Shein at about £50 billion, Bloomberg reported earlier this year.

Shein had been considering a US listing but decided to look elsewhere given the intense scrutiny of the company and its Chinese roots.

Pretax profit in Britain doubled in 2023 to £24.4 million, the Companies House filing shows. It was filed under Shein Distribution UK Limited, the company’s subsidiary in the country that was incorporated in 2021.

Significant milestones in the year included opening its Manchester office and pop-up shops across the UK, including a bus tour, the company said.

The sales surge in 2023 was down to strong customer demand, a Shein spokesperson said in a statement.

By Jennifer Creery

Learn more:

Shein Plans Investor Meetings Ahead of London IPO

Shein is initiating informal discussions with investors for a potential IPO in London, pending regulatory approvals, as the Singapore-based retailer faces scrutiny over its supply chain practices amidst criticism from UK lawmakers and advocacy groups.

Mytheresa on Monday announced it would acquire its competitor Yoox-Net-a-Porter for €555 million ($609 million) from Swiss conglomerate Richemont, perhaps the most significant deal yet in a year of upheaval for luxury retail that has left few of the category’s major players untouched.

The deal, slated to close in the first half of 2025, would bring together the German Mytheresa, which has built a profitable business catering to ultra-high-net-worth shoppers, with the larger Net-a-Porter, which set the template for online luxury retail when it launched in the early 2000s with its mix of high-end merchandise and more accessible offerings. The companies will remain standalone e-commerce sites.

The hope is that bringing the two under one roof will break the cycle of escalating customer acquisition costs, brand defections and similar-seeming product offerings that have dogged luxury e-tailers for years. Mytheresa shares spiked more than 50 percent on news of the deal, ending Monday at a four-month high.

“The vision is clear: clearly differentiated brand identities based on different assortments, different marketing, different customer touch points,” Michael Kliger, Mytheresa’s chief executive, said in an interview with The Business of Fashion. “There is so much room in luxury to fulfil these positions and attract different customers.”

The acquisition also brings to a close a long period of uncertainty for Net-a-Porter, which remains the first stop for many luxury consumers and brands seeking industry validation (the company was name checked on the most recent of HBO’s hit series “Industry” about young, high-earning finance professionals). But Net-a-Porter has long struggled to convert cultural cachet into consistent profits, both as an independent entity and under Richemont, which acquired the company in 2010.

In 2022, Richemont had agreed to sell a 47.5 percent stake in YNAP to Farfetch, with the opportunity for Farfetch to acquire its competitor once it reached profitability within three to five years. But that agreement failed when Coupang rescued Farfetch from near bankruptcy last December.

There were fears that Net-a-Porter could suffer a similar fate, or even be shut down, as was the case for rival Matches when owner Frasers Group entered the company into administration three months after acquiring it.

What Lies Ahead

Mytheresa has avoided the worst of the luxury e-commerce bust. But it has its own problems: with €914 million in gross merchandise volume — sales on its marketplace — in the year ending in June, it is smaller than its chief rivals. Its adjusted earnings before interest, taxes, depreciation and amortisation accounted for only 3 percent of net sales during that period. Even after surging on Monday, the company’s stock is down over 70 percent since its initial public offering in January 2021.

The YNAP merger, however, gives Mytheresa a chance to change that. The two companies’ combined GMV reaches nearly €3 billion, close to one time leader Farfetch’s sales at its peak in 2022. Mytheresa plans for that to grow to €4 billion by 2029, the company’s finance chief Martin Beer said on an investor call on Monday.

Doing so will require reversing a steady slide in YNAP’s sales, which fell 15 percent year-over-year in the quarter ending in June. It will also need to carve distinct identities for the two sites, which have some overlap in the customers they cater to, and the brands they carry.

“Any merger is not easy,” said Mario Ortelli, managing director of luxury advisory Ortelli & Co. “You have to change the operating model. If for so long you were never profitable and your objective is not just to grow but profitability, you have to change something.”

Becoming a Leader

Mytheresa’s deal with YNAP is its chance to generate the type of sales that would make it the biggest company in luxury e-commerce.

Mytheresa will access YNAP’s distribution centres in China and the US, where it is seeing its largest sales growth. The company, which typically carries a smaller number of brands than its competitors, will enjoy the increase in sales volume from YNAP’s greater number of labels without compromising its curatorial focus.

Mytheresa’s core strengths can also rub off on YNAP. The Germany-based e-tailer has proven its ability to grow profitably by wooing its top spending customers, which has boosted profits because that cohort spends more money with each purchase and returns goods less frequently.

The company has been more successful than its competitors at offering exclusive capsule collections from brands like Loewe and Brunello Cucinelli, and hosting brand trips and private dinners with designers. It ended its full fiscal year in June with €25 million in adjusted EBITDA.

Mytheresa will help Net-a-Porter play to its own strengths, Kliger said, such as doubling down on its editorial content, which contextualises its product offering through celebrity interviews and other lifestyle content that appeals to its more aspirational luxury consumer base.

But if a deal is approved, Mytheresa will first have to undo Richemont’s efforts, where the Swiss conglomerate’s lack of expertise in running a digital business led to decisions that ultimately drained YNAP’s profits.

In 2010, Richemont acquired Net-a-Porter in a deal that valued the company at £350 million ($458 million). When Richemont bought the remaining shares in YNAP that it didn’t already own in 2018, it increased the e-tailer’s investments in technology and logistics. But the €200 million upgrade led to functional hiccups on Net-a-Porter’s site and dissatisfied customers. It also resulted in a massive drop in profits that YNAP has struggled to recoup since.

Mytheresa plans to refocus Net-a-Porter by migrating its operations, along with the latter’s menswear site Mr. Porter, onto Mytheresa’s platform, which boasts capabilities like identifying potential high-spending clients based on browsing activity. YNAP’s off-price division that consists of Yoox and The Outnet will operate separately and remain on the company’s existing platform, Kliger said.

A Refined Sector

Mytheresa’s merger with Net-a-Porter is part of a big shakeout in luxury e-commerce that’s come after years-long shifts in the sector.

The influx of luxury e-tailers in the last 20 years has given brands a range of partners to help grow and consumers several marketplaces with differentiated offerings to explore. But these platforms lost their edge by carrying similar labels and competing on price, causing their margins to suffer and brands to invest more in driving shoppers to their direct selling channels, where they can control pricing and communication with customers.

Still, smaller labels that lack funds to ramp up their DTC businesses remain heavily reliant on multi-brand retailers with a global audience and streamlined logistics to acquire customers and drive sales.

But online luxury could benefit from reduced saturation, where direct competition on price has made it harder for retailers and brands to grow profitably and a return to differentiation, said Stefano Martinetto, founder of brand management firm Tomorrow, which owns popular labels like Martine Rose, Charles Jeffrey Loverboy and A-Cold-Wall.

Luxury e-commerce upstarts, large and small, are already moving toward that goal. Moda Operandi is still where sophisticated luxury shoppers go to pre-order collections; Ssense continues to appeal to younger, fashion-obsessed consumers searching for statement-making pieces from established and emerging brands. There’s also a sector of high-growing and profitable platforms that carry emerging brands that sell exclusively through them, including Garmentory, Cult Mia and Wolf & Badger. These rising marketplaces provide brands with marketing services and let them decide how much discounting they want to participate in.

“Curated multi-brand is the future. It is the mix-match of luxury institutional brands and young independent designers,” Martinetto said. “All of those need one or two opportunities to sell online globally and to reach customers … they don’t need 20, they need two solid players competing on tone of voice and editing and selection rather than pricing.”