Happy Wednesday and welcome back to The Spin! Further changes are shaking up the retail landscape. This holiday season, for example, online sales are predicted to surpass in-store spending for the first time ever. Amidst these shifts, the new deal between Canadian retail holding Hudson's Bay Company and WeWork is a noteworthy development. Enjoy the read and feel free to share! Best, Ulrike


WeWork at Lord & Taylor. To reduce its debt load, Hudson's Bay Company (HBC) has sold Lord & Taylor's New York flagship to WeWork Property Advisors, a joint venture between the shared workspace provider WeWork and Rhône Capital, for $850 million. Starting in 2019, WeWork will use the top floors as headquarters and offices, while Lord & Taylor will lease back a retail space of about 15.000 m2. Rhône will also invest $500 million into HBC equity. The entire transaction should result in an aggregate of $1.26 billion of debt reduction and incremental cash on the Company's balance sheet, increasing total liquidity by about $870 million.


Retail vs real estate. WeWork plans to lease additional space in select HBC department stores, beginning with the upper floors of Hudson's Bay locations in Toronto and Vancouver as well as Galeria Kaufhof in Frankfurt. HBC expects hardly any impact on the earnings of those downsized locations. According to the Toronto-based company, the Lord & Taylor flagship on Fifth Avenue and 38th Street is many times less productive (press release) than its Saks Fifth Avenue building on Fifth Avenue and 50th Street. As a bonus, WeWork might bring a well-funded new clientele into HBC's weaker locations.


Gucci ascending. Thanks to meteoric growth of its Gucci label, French fashion group Kering beat sales forecasts and now projects a record year. Gucci, which fared particularly well in China, reported a Q3 revenue increase of 42 percent to €1.5 billion, more than offsetting a 4.5 percent sales drop at Bottega Veneta and the effects of a strong Euro. On a like-for-like basis, Gucci's revenues skyrocketed 49.4 percent, setting a high bar for 2018. Kering reported a 23 percent sales increase to €3.9 billion in Q3.

End of an era. Amidst declining revenues and rising debt levels, MCS Cavaliere (formerly Marlboro Classics) and Industries Sportswear Company have declared (in Italian) bankruptcy. The companies which hold the Marina Yachting, Henry Cotton's and MCS labels are owned by London-based Emerisque Brands and Italian Moncler Group (30 percent). As part of a restructuring plan, Emerisque had pledged (in Italian) an €18 million investement in August, which was later reduced to €6 million and then withdrawn altogether, leaving the labels no way out.


Hey, big spender. This holiday season, US online sales are going to surpass in-store spending for the first time in history. More than 51 percent of shoppers in the US expect to spend their holiday budgets online, while only 42 percent plan to spend it in stores. Average holiday spending is forecast to remain at last year’s level of $1,226 per household, but an increasing part of the budget (40 percent) is earmarked for experiences like entertaining and socializing. Amazon will likely increase its market share, further increasing the pressure on traditional retailers.


Hidden meaning. The differences in Melania and Ivanka Trump's dress style offer unexpected insight into their political missions. While Ivanka likes to portray herself as a middle-class advocate with affordable brands like Zara and her own collection, the designer dresses of the First Lady evoke (image gallery) the luxe version of the American Dream. Combined, they cover the entire spectrum of Trump’s constituents from relatable to aspirational.

Victorious draftsman. Riccardo Tisci, who kept a low profile since stepping down from his role as Creative Director at Givenchy, opens up about his poor childhood in Southern Italy, his love for basketball, and why he thinks that sportswear has become too fashionable. With his current NikeLab x Riccardo Tisci collaboration, he moves casual sports style into a distinctly more elegant realm.


Farewell, Uncle Terry. In the aftermath of the Harvey Weinstein scandal, controversial photographer Terry Richardson, who's also known as Uncle Terry, has been bannend from working with Condé Nast International, Bulgari and Valentino. At Condé Nast, all shoots that have been commissioned or completed but not yet published are to be killed and substituted. Bulgari will cease its collaboration with Richardson, as will Valentino, whose resort 2018 campaign was shot by the Richardson last July.


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