Core Viewpoint - The future of Kendo, the beauty incubator under LVMH, is uncertain as the group considers selling its 50% stake in Fenty Beauty, which has become a significant part of Kendo's identity and success [1][4][5] Group 1: Kendo's Background and Success - Kendo was established in 2010 as a spin-off from Sephora Originals and has successfully incubated several notable beauty brands, including Fenty Beauty, which was co-founded with Rihanna in 2017 [2][4] - Kendo's incubator model provided essential brand-building tools for emerging beauty brands, ensuring their products were featured in Sephora, a leading beauty retailer [2][4] Group 2: Current Challenges and Market Dynamics - Kendo has faced challenges, including the sale of KVD Beauty and the expiration of the Marc Jacobs Beauty brand license, leaving Fenty Beauty and Ole Henriksen as its only remaining brands [5][8] - Fenty Beauty's sales have plateaued, with 2023 revenue reaching $750 million (approximately 5.34 billion RMB), and there are concerns about declining consumer interest and product quality [8][10] - LVMH's overall perfume and cosmetics sales fell by 2% to $6.9 billion (approximately 49.1 billion RMB) in the first nine months of 2023, indicating broader market challenges [8] Group 3: The Decline of the Incubator Model - The beauty incubator model, once thriving, is now facing decline, with competitors like Amyris and Forma Brands filing for bankruptcy in 2023 [9][11] - The typical exit timeline for incubator-supported beauty brands has extended from 3-5 years to approximately 5-8 years, reflecting increased market competition and challenges [9][12] - Successful incubators today demonstrate the ability to pivot quickly, contrasting with Kendo's slower, more traditional approach, which may have hindered its growth potential [10][12] Group 4: Future Outlook - If LVMH can sell Fenty Beauty for a valuation of $2 billion (approximately 14.2 billion RMB), it could signal a viable path for incubators to achieve higher returns through long-term brand development [12][13] - The fate of Kendo may determine the future of the beauty incubator model, as the industry grapples with rapid changes and increasing competition [13]

Core Insights - The global luxury goods industry is seeking a new balance amid structural differentiation, driven by creative innovation, market restructuring, and strategic focus [1] Group 1: Company Performance - Prada Group reported a revenue of €4.07 billion for the nine months ending September 30, 2025, an increase of 8.9% year-on-year, with Miu Miu's sales soaring by 41% [2] - Unilever's Q3 sales exceeded expectations, driven by double-digit growth in beauty brands like Dove, with a total turnover of €14.7 billion, down 3.5% year-on-year [3] - Chanel appointed Sarah Weisz-Pirel as the new communications director, emphasizing the brand's strategic focus on crisis and reputation management [4][5] - Kering's Q3 revenue fell by 10% to €3.42 billion, but the decline is narrowing compared to previous quarters, with North America showing a surprising 3% same-store sales growth [6] - L'Oréal's Q3 sales reached €10.33 billion, a 0.5% increase year-on-year, but still below analyst expectations [7][8] - Hermès reported a 9.6% increase in sales to €3.88 billion, although it fell short of market expectations [10][11] - LVMH is considering selling a 50% stake in Fenty Beauty, reflecting a strategic reassessment of its diverse business portfolio [12] - Ermenegildo Zegna's Q3 revenue grew by 0.2% to €398.2 million, with significant improvement in the Greater China region [13][14] Group 2: Market Trends - Swiss watch exports to the U.S. plummeted by 55.6%, resulting in the U.S. losing its status as the largest export market for Swiss watches [17] - The luxury goods sector is witnessing a shift towards high-end beauty and personal care products, as evidenced by Unilever's strategic focus [3][6] - The appointment of Grace Wales Bonner as Hermès' menswear creative director signifies a cultural and strategic shift towards contemporary aesthetics [16] - The collaboration between Hyatt and Home Inn to enter the long-stay hotel market indicates the growing potential of the business travel segment in China [18][19]

Core Viewpoint - LVMH is exploring the sale of its 50% stake in Fenty Beauty, collaborating with investment bank Evercore for this process [1][4] Group 1: Company Overview - Fenty Beauty was co-founded by singer Rihanna and LVMH's Kendo Brands in 2017, with both parties holding equal shares [1] - The brand has gained popularity on social media, known for its inclusive range of beauty products, including 40 foundation shades [1] - In 2024, Fenty Beauty is projected to generate approximately $450 million in net sales, with a market valuation estimated between $1 billion and $2 billion [4] Group 2: Kendo Brands and Market Adjustments - Kendo Brands, established in 2010, focuses on creating and acquiring innovative beauty brands and has previously launched brands like Ole Henriksen Skin Care [4] - Recently, Kendo Brands sold its vegan makeup brand KVD Beauty to Windsong Global, as the brand faced challenges amid changing beauty trends [6] - KVD Beauty's revenue significantly declined to tens of millions after a reduction in marketing investment [8] Group 3: Industry Trends and Strategic Moves - The luxury beauty market is experiencing a slowdown, prompting companies to reassess their business strategies [14] - LVMH's beauty segment, including perfumes and cosmetics, reported a slight revenue decline of 1% in the first half of 2025, indicating a shift from rapid growth to a more challenging phase [12][14] - Kering Group's recent strategic partnership with L'Oréal, involving a €4 billion acquisition of its beauty business, reflects a broader trend of luxury brands adjusting their beauty portfolios [8][12] Group 4: Financial Performance - LVMH's financial report for 2024 shows a 2% decline in total revenue, with the perfumes and cosmetics segment experiencing a 2% growth [9] - In contrast, Kering's beauty business has seen a significant strategic shift, with L'Oréal's third-quarter same-store sales growth at only 4.2%, below analyst expectations [12][13]

Core Insights - The overall growth of international beauty companies is slowing down in the first half of 2025, prompting them to optimize their organizations through sales and personnel adjustments to rebuild growth trajectories [1] - Major luxury groups are accelerating acquisition and divestiture activities, as evidenced by Kering Group's recent sale of its fragrance brand Creed to L'Oréal and the establishment of a long-term strategic partnership [1] Company Summaries - LVMH is reportedly exploring the sale of a 50% stake in Fenty Beauty, which has generated nearly $4.5 billion in net sales in 2024, with a valuation between $1 billion and $2 billion [2][4] - Fenty Beauty, established in 2017, has seen significant growth, achieving over €500 million in global sales in its first fiscal year and $505 million in 2018 [10] - The brand is set to enter the mainland China market in 2024, with a notable presence on Tmall, where it has garnered 1.37 million followers [6] Market Trends - The celebrity beauty brand landscape is facing challenges, with many brands struggling to maintain momentum after initial success driven by social media [12][17] - Acquisitions by larger beauty groups are becoming a more favorable exit strategy for celebrity brands, as seen with the recent $1 billion acquisition of Rhode by e.l.f. Beauty [17] - The beauty sector is experiencing a divide, with established luxury groups like LVMH and Kering reassessing their beauty divisions, potentially leading to strategic sales to optimize resource allocation [19]

Hiring & Visa Policy - Walmart is pausing hiring of candidates requiring H-1B worker visas [1] - Walmart was the ninth largest corporate recipient of H-1Bs in America in fiscal year 2025 [1] - President Trump imposed a new $100,000 fee on H-1B applications last month [2] Financial Performance & Shareholder Value - Barclays is raising guidance and announcing a 500 million pound share buyback, stock up by 45% [2] - Western Alliance reported a more than 27% increase in profits year-over-year [2] - Western Alliance reassured investors that an alleged fraud tied to a real estate investor group did not hurt the bank's overall performance, stock is up by 28% [3] Executive Compensation - Microsoft CEO Satya Nadella's pay for fiscal year 2025 climbed 22% to more than $96 million, including more than $84 million in stock awards [4] Mergers & Acquisitions/Investment - LVMH is exploring a sale of its 50% stake in Fenty Beauty, which it co-owns with Rihanna [3]

Group 1 - Walmart is pausing hiring of candidates requiring H-1B worker visas, being the ninth largest corporate recipient of H-1Bs in America for fiscal 2025 [1] - Walmart's spokesperson stated the company is committed to hiring the best talent while being thoughtful about its H-1B hiring approach [2] - Barclays is raising guidance and announcing a £500 million share buyback, with its stock increasing by 4.5% [2] Group 2 - Western Alliance reported a more than 27% year-over-year increase in profits, with stock up by 2.8% despite an alleged fraud incident [3] - LVMH is exploring the sale of its 50% stake in Fenty Beauty, co-owned with Rihanna [3] - Microsoft CEO Satya Nadella's pay for fiscal 2025 increased by 22% to over $96 million, including more than $84 million in stock awards [4]

Core Insights - The streetwear brand model, which relied on hype and celebrity endorsements, is losing effectiveness, exemplified by the bankruptcy protection filing of the Italian brand group New Guards Group (NGG) [1][2] - The shift in consumer preferences, particularly among Generation Z, is moving towards brands that resonate with their cultural values rather than just hype-driven marketing [2][6] - The luxury market is experiencing a slowdown, with a projected decline in growth rates, indicating a broader challenge for both niche and major brands [7][9] Group 1: Market Dynamics - The New Guards Group, which once thrived by launching brands like Off-White, has faced significant challenges, leading to its bankruptcy protection filing and the departure of several brands seeking independent operations [1][2] - The acquisition of NGG by Farfetch for $675 million in 2019 did not sustain growth, resulting in Farfetch selling its stake to Coupang in 2023 due to NGG's underperformance [1] - The luxury goods market in China is projected to see an 18% decline in growth in 2024, reflecting a global trend of slowing sales across major luxury brands [7] Group 2: Consumer Behavior - Generation Z consumers are increasingly favoring brands that align with their personal values and cultural beliefs, moving away from the previous model of limited editions and celebrity endorsements [2][6] - The focus has shifted from exclusive products to practicality and meaningful experiences, with consumers seeking items that reflect their lifestyle [6] - The concept of "silent hits" has emerged, where products fail to generate buzz or discussion, leading to poor sales despite good design [9] Group 3: Brand Strategies - Brands like Madhappy are redefining success by emphasizing emotional health and community engagement rather than rapid product turnover or celebrity collaborations [10][12] - Madhappy's approach includes a focus on quality over quantity, with prices ranging from $175 to $300, and a commitment to social causes, resulting in a 30% year-over-year sales increase [12] - The global streetwear market is expected to grow from $2.1 trillion in 2025 to $2.576 trillion by 2030, indicating ongoing demand despite a cooling market environment [12]

Core Insights - LVMH reported a total revenue of €39.81 billion (approximately ¥335.12 billion) for the first half of 2025, a decline of 4% year-on-year, with operating profit down 15% to €9.01 billion (approximately ¥75.84 billion) [1][5][10] - The luxury goods sector is facing significant challenges, with the "Veblen Effect" losing its influence as younger consumers reassess the value of luxury items [3][4] - The high-end beauty segment has emerged as a key area of focus for LVMH, showing resilience with stable revenue of €4.08 billion (approximately ¥34.34 billion) in the first half of 2025 [12][13] Financial Performance - LVMH's total revenue for the first half of 2025 was €39.81 billion, down 4% from the previous year, while operating profit decreased by 15% to €9.01 billion [1][5][10] - The operating margin fell to 22.6%, a decrease of 2.5 percentage points year-on-year [5] - The Asian market (excluding Japan) saw its share decline to 28%, down 2 percentage points [1][10] Market Trends - The luxury goods market is experiencing a shift, with younger consumers increasingly questioning the traditional pricing logic of luxury items [4][5] - The beauty segment, particularly high-end cosmetics, is viewed as a potential growth driver amidst overall market contraction [12][19] - LVMH's beauty brands, including Christian Dior and Fenty Beauty, are adapting to changing consumer preferences, with Fenty Beauty showing significant growth in China [15][19] Strategic Initiatives - LVMH is focusing on brand revitalization and innovation in the beauty sector, with new product launches and a commitment to quality and desirability [17][18] - The company is restructuring its operations, including closing underperforming DFS stores and laying off staff in its wine and spirits division to reallocate resources towards beauty [21][23] - Sephora is being positioned as a key player in the Chinese market, with new brand introductions and a direct reporting structure to the global CEO [21][23]