Brand acquisitions take on a tech component, and creative challenges to AI continue

Upcoming Webinar: How AI Is Already Reshaping Apparel Supply Chains

Next month, The Interline will be hosting a live, free-to-attend webinar in partnership with TradeBeyond – building on the themes of this year’s AI Report and Sustainability Report to examine how, and where, AI is transforming fashion’s supply chains.

The webinar will run for an hour, at 9AM New York (2PM London, 3PM Paris) on 7th November 2024, and will feature scene-setting opening remarks from our Editor-in-Chief, Ben Hanson, a deep-dive presentation from Jeff Alpert, Founder & Ceo of Pillar AI, and a back-and-forth discussion about the tangible applications of AI in the supply chain with André Von Appen, TradeBeyond’s VP of Retail Solutions in Europe.

Download the latest Retail Sourcing Report

And for more from TradeBeyond, download their recent Retail Sourcing Report: Q3/Q4 2024 Insights & Indicators, providing a comprehensive look at the emerging trends and economic indicators that will define the second half of the year. Along with key insights into the rise of regional trading blocs and the decoupling from globalisation, the report shows signs of stabilisation in the global sourcing landscape for the first time since the pandemic.

Mytheresa acquires Yoox Net-a-Porter – will technology help both keep their identity?

Swiss luxury group Richemont is breathing a sigh of relief. This week, the company finalised a deal to sell its underperforming digital business Yoox Net-a-Porter (YNAP) to German online retailer Mytheresa – marking the end of a costly venture for the Swiss luxury group. 

Mytheresa acquired 100% of the share capital of YNAP, with a cash position of €555 million and no financial debt. Somewhat reciprocally, Richemont will receive a 33% equity stake in Mytheresa. More particulars of the deal include that Richemont will not be able to sell any of its Mytheresa shares for one year, but will be able to nominate a member to the Mytheresa board with a final decision to be made in early 2025. Richemont will also grant a six-year revolving credit of €100 million to assist with YNAP’s general expenses.

The announcement follows Richemont’s unsuccessful attempt to sell 47.5% of YNAP to Farfetch in 2022. The deal fell through after Farfetch was rescued from near bankruptcy through a $500 million emergency purchase by South Korean e-commerce firm Coupang – as Farfetch faced challenges attracting customers amid fashion’s broader luxury slowdown struggles. 

Why, then, is Mytheresa so eager to board a ship already taking on water? 

They see a big opportunity, clearly – despite it being a tough moment for online luxury – and that their proprietary technology and infrastructure savvy will see them reap the rewards of the future market, projected to balloon to $170 billion in 2030 from its current $80 billion. And they could be right. Mytheresa has solidified its position as a leading luxury e-commerce player, capitalising on the collapse of competitors like Farfetch and Matchesfashion over the past year.

“With this transaction, Mytheresa aims to create a pre-eminent, multi-brand, digital luxury group worldwide,” CEO of Mytheresa, Michael Kliger, said after the deal was revealed on Monday. The acquisition, he added, will create significant value “for our shareholders, brand partners and most importantly for our high-end customers.” 

But, critically, both Mytheresa and YNAP will maintain their distinct product selections, making the deal a purely financial one with a strictly limited operational relationship between the two. 

This is in contrast to other deals that the industry has seen over time, including American Apparel,  J. Crew, and The Kooples – who once acquired shifted away from either the aesthetic and/or values that made them popular with customers to begin with. 

Another brand at risk is Off-White. This week, French luxury conglomerate LVMH announced that it would sell the brand (founded by the late American designer Virgil Abloh) to Bluestar Alliance, a brand management company with a roster including labels such as Tahari, Bebe and Scotch & Soda. The companies did not disclose the terms of the deal. “Our core business is licensing,” Bluestar Alliance CEO Joey Gabbay said about the brand’s acquisition of Scotch & Soda. “Once we got our arms around the brand, we had our partners come in and take over certain aspects of the business.”

This leaves an open question about what will become of the Off-White label under its new management. LVMH originally increased its stake in Off-White to 60% in 2021, just after Abloh’s death. But their plans for the brand never materialised due to a combination of creative choices that alienated customers, as well as some tough macro-industry circumstances. One of which was that Off-White’s exclusive licensor (New Guards Group) was acquired by Farfetch in 2019. Enough said.

So while YNAP and Mytheresa may be able to maintain their distinct identities and leverage technology for growth, Off-White’s future may be a bit different – although the licensing business is one are where technology adoption is moving along its own distinct track..

OpenAI continues its era of AI expansion, but creatives continue to feel frosty

Following our recent analysis of Google pushing to be the leading voice in AI, it’s onto the next round and this week OpenAI is pushing for the lead. The company announced an update in its global expansion with offices to open New York and Seattle in the US, Paris, France, and Brussels, Belgium in Europe, and Singapore. This comes as the firm raised $6.6 billion in cash (the largest funding round in history, although not by a massive margin above XAI’s previous raise) and secured a $4 billion credit line earlier this month, catapulting it to a reported $157 billion valuation.

But Google does get an honourable mention, as DeepMind CEO Demis Hassabis and Director John Jumpe won the Nobel Prize in Chemistry this week for their work using AI for protein-structure prediction. The news comes a day after AI pioneers Geoff Hinton and John Hopfield won the Nobel Prize in Physics for their foundational work in machine learning and AI.

But when it comes to business, OpenAI is now making moves. A graduate of OpenAI’s Converge accelerator, called Unify, has raised $19 million of Series A  and Seed financing. Through AI and automation, Unify integrates “intent signals, prospecting, AI agents, email sequencing and more in one end-to-end platform.” Essentially, the company enables sales, marketing, and revenue teams to engage potential customers more efficiently by using diverse data sources to create personalised messages, moving away from one-size-fits-all outreach. 

This is done by extracting information from customer relationship management systems (CRMs) and other data repositories to inform the messaging directed at potential buyers. It also can analyse online data sources to pinpoint prospects and detect signals indicating their intent to make a purchase.

According to TechCrunch, AI sales development representative companies (AISDR) are booming. Startups like 11x.ai, Reggie.ai, and Artisan are experiencing explosive growth, prompting venture capitalists to eagerly invest at impressive valuations. But Unify positions itself as a cut above typical AISDRs, highlighting its advanced tailoring features. In a recent LinkedIn post, Unify said that one of their partners saw a “6.8x ROI in 6 months by launching 3 warm outbound plays in just 3 days after onboarding.”

While the business landscape for AI thrives (at least in short term, until those investors come looking for their returns), with the lines between human-generated content and machine-produced work becoming increasingly blurred but largely – grudgingly, in many cases -accepted, the creative world continues to grapple with AI-related challenges.

At the end of September, artist Jason Allen appealed a decision of the US Copyright Office after they refused to register his work. The reason being that the artwork in question created by Allen work was AI-generated and that copyright registration requires more human authorship than simply plugging a prompt into generative  AI-tool Midjourney.

Allen’s piece, “Théâtre D’opéra Spatial,” clinched the top award at the Colorado State Fair’s competition for emerging digital artists in 2022, and was one of the first AI-generated artworks to receive such recognition. The achievement caused online controversy, with many artists accusing him of cheating, even though he disclosed his use of AI. Other argued that using AI for creation is akin to using Photoshop or other digital editing tools, and that human creativity remains essential in crafting the prompts necessary to generate an award-winning piece.

But the US Copyright Office feels otherwise, with its reason ultimately boiling down to a practicality: if the ultimate image is generated by an AI system, then it’s not a work of human authorship, and it is not entitled to copyright. 

But this could change over time, as Allen points out: “Just as the advent of the camera ushered in a previously unimagined art form, AI-assisted art holds the potential to do the same,” Allen argued. “This evolution should be embraced as a positive development in the creative landscape. When photography first gained popularity, critics argued that it lacked skill and artistry, yet it has since become a highly respected and valued art form.”

For now, the fashion industry will need to work with the fact that AI is flourishing in business applications, but that when it comes to creativity things are not getting any simpler. Each legal battle introduces additional layers of complexity, raises more questions than it provides answers to, and provides valid points to consider on both sides.

3D Tech Fest: Replay The Days

After our Editor-in-Chief hosted the second day of the 2024 3D Tech Fest (for the third year running) the full replays of every session are now available to registered users.

To view all the panels and presentations from each of the three days of the event, visit the 3D Tech Fest website, register a profile, scroll to “Agenda 2024” and select a session to watch on-demand.

To get a taste of the content, Ben’s opening remarks are available to watch on YouTube.