Hello from Paris, where the Louvre reopened this morning three days after a jewel heist that shocked the world. The French crown jewels were plundered in a seven-minute operation — calling into question the institution’s ability to protect the country’s patrimoine (including priceless artefacts taken from around the world).
While the historic and cultural value of the stolen artefacts is staggering in this case, I’m reminded that museums aren’t the only ones being targeted by organised criminals: In recent years, luxury stores in Paris have increasingly fallen prey to carefully planned operations resulting in the loss of millions in inventory. On Place Vendôme and Rue de la Paix, Piaget, Bulgari, Chanel and Chaumet have all been hit in recent years — sometimes in broad daylight.
The Louis Vuitton store on Saint Germain has been robbed no less than three times, its windows smashed by cars before robbers quickly stripped the store of inventory. Balmain fell prey to a truck-jacking in 2023 which saw the brand lose a big chunk of its collection just days before its runway show.
Balmain went public, but brands usually try to stay discreet about these incidents: mindful of perceptions of customer safety, the potential for copycat crime and of the need to carefully manage the narrative with investigators and insurers.
The situation will be hard to tame. In an increasingly cashless society, luxury boutiques (and their clients) have become an obvious alternative to banks and gas stations. The rising price of gold and burgeoning fashion resale market are making matters worse.
Hermès vs. Expectations
If Hermès’ nomination of Grace Wales Bonner as creative director for men’s ready-to-wear was particularly well received — her taste, discretion and emphasis on process all seem like a great fit for the house — investors found the French brand’s third-quarter sales to be mildly disappointing.
The brand is still outperforming rivals by a long shot. Revenue grew by 10 percent at constant exchange rates, slightly accelerating vs. the previous quarter, the company said Wednesday.
But shares fell 3 percent in early trading, as the figures failed to live up to mounting investor optimism in recent weeks. Consistent performance is already baked into Hermès’ valuation, whereas other groups are luring investors by making progress on turnaround plans: Shares in LVMH rose 14 percent last week after organic growth turned positive, even if sales in the key fashion division remained down 2 percent.
Analysts also flagged the potential impact of currency shifts on Hermès’ profitability. The US market is driving performance, which means a weak dollar compared to the euro is sure to take a toll. (The company’s cost base is heavily concentrated in France.)
Kering’s Big Unwind
A wise woman once told me that leading a company is about juggling a “portfolio of actions to create results in the short, medium and long term.” She is now the CEO of Gucci.
At parent company Kering, new chief executive Luca de Meo has clearly realised the company needs to shift its focus, at least temporarily, from ultra-long-term ambitions to an immediate improvement of the balance sheet in order to restore confidence in the group.
Sunday, Kering announced a €4 billion ($4.7 billion) deal to hand over its beauty businesses to L’Oréal, which already has a long-term licence for Yves Saint Laurent.
The decision represents a striking about-face: Since June 2023, the group had moved perfume and makeup for Bottega Veneta and Balenciaga in-house, while waiting to onboard Gucci when its licence with Coty expires in a couple years. It also acquired niche perfumer Creed for an eye-popping €3.5 billion.
The strategic logic remains intact for Kering’s push to integrate its beauty businesses: Controlling beauty would allow its brands to craft a consistent image and positioning across categories.
But building a substantial footprint in beauty was going to take years. Balenciaga and Bottega Veneta’s recent perfume launches were far more luxurious, tasteful and aligned with their message than previous iterations conceived under licence. But they were also very niche: priced above $300, featuring understated packaging and design.
This feels like an inevitable outcome from involving the tastemakers behind top-end fashion houses in beauty. The tension between beauty specialists and designers (who are often horrified by the mass-ified approach taken by cosmetics groups) can actually help speed things up: Designers take care of the couture dream, while beauty groups usually translate that vision to a wider audience with more accessible prices and graspable marketing. Beauty partners amplify brand visibility with big-budget ad campaigns in addition to paying royalties that go straight to brands’ bottom lines.
As of June, Kering had net debt of €9.5 billion in addition to €6 billion in long-term lease liabilities. Kering won’t get another chance to bring its beauty business in house for 50 years under the terms of its deal with L’Oréal. But the chance to slash its debt while freeing up bandwidth for brands to focus on what they do best felt like a necessary compromise.
“We are confident we had a very good team at Kering Beauty. We could have pursued our strategy all the way. But if we wanted to go faster, if we wanted to optimise our capital allocation, we needed to review our options without taboo,” chief operating officer Jean-Marc Duplaix told analysts Wednesday.
Kering reported third-quarter sales that fell 5 percent on a like-for-like basis, compared to analyst forecasts of a 9.6 percent drop. Saint Laurent, Bottega Veneta and the Other Houses division including Balenciaga and Boucheron all beat Bloomberg’s consensus significantly.
Gucci’s sales fell 14 percent in its seventh consecutive quarter of double-digit declines.
Even as the cash deal with L’Oréal eases pressure on the company’s balance sheet, it’s continuing to cut costs. “It’s a good window for us — and the industry — to work on streamlining organisations,” Duplaix said.
Kering’s retail footprint is under particular scrutiny. The group opened several hundred stores during luxury’s post-pandemic surge. Now, “we want to focus on the most important locations. … In the two coming years we’ll continue to rationalise quite drastically the network,” Duplaix said.
Paris Art Week
Paris Art Week continues to reach new proportions since the main fair was taken over by Art Basel in 2022 and moved back into the renovated Grand Palais in 2024.
The volume of exhibitions, dinners and magazine and book launches announced in recent weeks ratcheted up excitement for the gathering — as well as raising the spectre that the art might not live up to the hype, or that fashion’s increased involvement could strain credibility.
So far I’ve been pleasantly surprised: Helen Marten’s monumental takeover of the Palais d’léna in partnership with Miu Miu is a standout. Grey cartons labeled with various ideas and identities (Wind, The Mother) circle the space on a conveyor belt. Performers filter in and out delivering readings, songs and dance numbers in front of a series of animated films. The aesthetic is post-industrial — but the sensibility is baroque, even rococo, due to the work’s overwhelming scale and the layered-on variety of media and entry points audiences can latch onto.
(Miu Miu owner Prada Group reports third-quarter sales Thursday, by the way. Its CEO Andrea Guerra is set to speak at The Business of Fashion‘s VOICES gathering Nov. 18–21).
“Expectations were very high, and Paris delivered,” gallerist Thaddaeus Ropac told me at his booth in the main fair. “This is the excitement we need to create, that will restart the market.”
American collectors are back — which is a boon for the fair’s commercial potential, he added.
“Paris Art Week has taken on a new dimension. It starts earlier, it’s bigger, it’s more international. It’s starting to be in line with Paris’s reputation as an art capital in terms of creativity, the quality of its institutions,” gallerist Guillaume Sultana said.
But there’s still a stark contrast between Art Week’s glitzy vibe and the everyday reality of running a gallery in Paris. “The French local market remains quite slow. Collectors are afraid of taking risks, particularly on emerging art,” he said.
BoF is running a special package this week about the art market: Look out for my breakdown of Chanel’s art strategy (published today), or Marc Spiegler’s profile of Alvaro Barrington (coming Friday. The artist is also set to attend VOICES).