Strutting down the runway
Shakeup at Chanel
Good morning, fierce fashionistas. This is your Stock Market Rundown for June 10th, 2024. Thanks for joining me for another week of finance fun. Let’s dig in:
TODAY’S TOP STORY: FASHION DESIGNER DRAMA
Fashion is a notoriously fickle industry, where loyalty is rare. If you’re a designer, one day you’ve got Vogue covers showcasing your runway looks. The next, you’re sent packing like an NFL coach whose team lost twelve games in a row.
The latest victim of the revolving door is Chanel’s creative director, Virginie Viard. Viard worked at Chanel for three decades, and was mentored by iconic style visionary Karl Lagerfeld.
When Lagerfeld died in 2019, Viard was his logical successor. Financially, her tenure has been a big success—Chanel’s revenue rose 16% last year, to $20 billion. (That’s a lot of little black dresses and quilted purses.)
But fans of the brand were uninspired by the clothes Viard sent down the runway. Top fashion critic Cathy Horyn complained that Viard’s work “lacked surprise and innovation.” Understandable: a couture gown with a $50,000 price tag should be more exciting than a pile of Old Navy sweatshirts.
Chanel is majority-owned by the septuagenarian Wertheimer brothers—Alain and Gerard—whose grandfather was founder Coco Chanel’s business partner.
Under their stewardship, the brand’s reputation for quality has earned them a devoted customer base… with an apparent willingness to pay any price. The cost of a classic Chanel handbag has doubled since 2019.
So the next time you see a society matron at your local country club with her Chanel tote, pause to appreciate that somebody is willing to shell out the equivalent of a mortgage payment, for a purse. Now that’s loyalty.
SO WHAT ELSE IS GOING ON?
How about a vacation in Boise instead of Barcelona? An airline industry group says airfare costs will continue to rise due to aging aircraft and rising fuel costs.
Here’s some chicken soup for the MBA student’s soul: the typical public-company CEO’s compensation is 200 times the annual pay of their average worker. Heartwarming.
Global public debt hit a record $27 trillion in 2023. Seems like a lot of national governments are the fiscal equivalent of a deadbeat dad with a gambling addiction.
Ticketmaster disclosed that it was breached by a hacker who sold its customers’ personal information on the dark web. When I bought tickets to the Creed reunion tour, I really didn’t expect my credit card would end up being used to buy auto parts in Estonia.
That's a wrap on today, friends. Make sure to tune in tomorrow morning. Yours in capitalism, The Axe
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