Cashmere chaos
Italian fashion gets knotted up
Good morning, textile trendsetters. This is your Stock Market Rundown for June 4th, 2024. Thank you so much for reading. Let’s dig in:
TODAY’S TOP STORY: BLOUSE BLUNDER AT BENETTON
What a nightmare scenario. You belly up to the boardroom table for an annual review from the managers who run your family business… and they stun you by disclosing a plunge in profits.
That’s what Italian fashion scion Luciano Benetton faced, when his hired hands admitted to racking up massive losses at Benetton, the fashion retailer his family controls.
I’m imagining the PowerPoint presentation: “There’s good news and bad news. The bad news is, we lost €230 million in 2023… the good news is, no big tax bill, since we didn’t make any money.” You had one job, guys.
Benetton peaked in the 90s, when it stirred up controversy with provocative ads that leaned into social messages (who needs to see the clothes?)
But in recent years, the retailer has struggled with competition from fast-fashion upstarts like Zara and H&M. Benetton’s wares are, as the Financial Times put it, “too costly to be classed as fast-fashion, but not sumptuous enough to be classed as luxury.” Basically, the fashion equivalent of Outback Steakhouse.
Since Benetton is in more need of repair than a moth-eaten cashmere sweater, the family replaced the CEO and brought in a crew of consultants to restructure the business.
Maybe the MBAs should re-evaluate some of their SKUs. “Carrot fit jeans”? I’m sure it sounds better in Italian.
SO WHAT ELSE IS GOING ON?
Visa and Mastercard will pay $197 million to resolve accusations that they overcharged customers on fees—the electronic equivalent of getting shortchanged by a store clerk.
Accounting firm PwC just struck a deal with ChatGPT marker OpenAI to resell its enterprise version. Accountants already have a reputation for being robotic—this isn’t going to help.
Back in 2023 I told you about Birkenstock’s IPO. Checking in with the business, it seems like management has been doing a swell job selling those ugly sandals. The shoemaker recently raised annual revenue forecasts.
A floating hotel, with six waterslides, where you might get Norwalk virus… and now it’s 20% off! Major cruise operators are offering big discounts in an effort to fill up their cabins with sunburned Boomers.
So concludes today’s program, my friends; tune in tomorrow for more at our usual morning hour. Yours in capitalism, The Axe
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