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And now, the main event…

Last week, during LVMH’s Q4 earnings call, Bernard Arnault referred to
laid-off employees as being “promoted outward, so to speak,” which may go down as the funniest, most brutal, downright Mr. Burnsian example of corporate spin ever spun. Arnault was referring to store-level layoffs at Tiffany’s historic Fifth Avenue flagship, but he might as well have been talking about Stella McCartney, with whom he recently cut ties. 

Only six years ago, LVMH
announced it was taking a 49 percent stake in McCartney’s business, following her breakup with Kering, which had owned 50 percent of the company she launched in 2001. Now McCartney, who is buying back her business, is once again a solo operator. Saving face on both sides, McCartney will continue to advise Arnault & Co. on their environmental and social responsibility efforts—similar to the structure she brokered with Kering before subsequently making a deal with its biggest rival.

Back in September, I’d heard that LVMH was in the process of selling its stake in the Stella McCartney business, but a company representative roundly dismissed my reporting as “fake news.” The most generous interpretation, given the longitudinal timelines of such corporate
maneuvers at a conglomerate, is that the company had begun to explore a divestiture, but was preserving its optionality until the final moment. The decision to sell the brand always made too much sense to me to believe the company’s defensive spin.

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Between the share purchase in 2019 and the continued financing, LVMH might have
sunk as much as €500 million into Stella, according to people familiar with the business. (A rep for LVMH had no comment.) One person suggested that LVMH’s decision to shed McCartney was also a signal to other underperforming brands in its portfolio, à la the divestiture of Off-White, that a new era of fiscal discipline and scalability has dawned. The late Virgil Abloh, sadly, was not able to take back Off-White before it was
sold to the vultures. At least McCartney could provide a soft landing for her own namesake business. 

LVMH, as I noted last week, has no choice but to implement this sort of
strategy. As Europe’s largest company, endowed with billions in shareholder capital, it has a fiscal responsibility to no longer tolerate middling businesses. Instead, it has already signaled its intent to invest in brands, like Tiffany and Rimowa and Sephora, that have a chance of supporting the P&L near the scale of its bulwarks: Louis Vuitton, Dior, etcetera. Mezzanine brands like Loewe and Celine will also do well in this scenario.

Stella McCartney was certainly unprofitable. In 2022, the company released a statement noting that any future business forecasts were “dependent on the company’s ultimate shareholders providing additional financial support during that period.” That year, Stella McCartney’s U.K.-based business entity made £40 million (about $49.6 million at current exchange) in revenue—which included £3 million ($3.7 million) in royalties from the Stella McCartney kids license and profits from
an Italian subsidiary—and lost more than £10 million ($12.4 million), according to a recent filing on Companies House, the British business registrar.

To be clear, these numbers, which are the most recent available (2023 and 2024 are still in a lockbox), do not represent retail sales at stores operated outside of the U.K., including four stores in the U.S. and more than 20 in Japan. There’s also her Adidas collection, now more than two decades running, which positioned
Stella McCartney as a first mover in high-end activewear and brand collaborations. But that was ages ago. At one point, overall Stella McCartney revenue reached $250 million. I suspect the number is meaningfully lower today.

McCartney’s journey from nepo wunderkind designer to twentysomething maison creative to
entrepreneur to veteran of the duopoly is indicative of larger industry trends. In 2001, she was fresh off her run as the creative director of Richemont-owned Chloé, which felt like a stunt move in 1997 when the Central Saint Martins grad and daughter of Paul and Linda McCartney became the youngest person ever to be appointed to run a French fashion house. But her airbrushed t-shirts, clingy satin skirts, and horse motifs sold incredibly well,
catapulting her to legit stardom. (Notably, McCartney’s right-hand at Chloé just so happened to be Phoebe Philo, who ultimately replaced her, and soon surpassed her in the designer hierarchy.)

For the first decade or so of Stella McCartney, the company was on even ground with stablemates Alexander McQueen and Balenciaga, all part of what was then known as the Gucci Group, which was
eventually absorbed by parent company PPR, which eventually became Kering. This was a time when Kering still had the ambitions to build small businesses into bigger ones, and all three brands were on track to hit $200 million, and eventually $400 million, then perhaps even $1 billion in sales… if they got the marketing and distribution right. And for many years, it seemed like McCartney had nailed it. The partnership with Adidas proved prescient: Not only did the designer foresee the
mainstreaming of activewear—outfitting Tribeca moms before Alo was even a germ of an idea—but she also understood the distribution power of the sportswear giant’s retail stores, as well as the legitimacy it conferred as a performance brand.

McCartney was ahead of the curve in other ways, too. Unlike most tasteless designer kids-clothing lines, which trade on logos, she earned credibility by developing a playful visual language. And then there was the sustainability piece: She refused to
use leather in her handbags—an idea that became ultra-popular for a spell—and was refreshingly transparent about the industry’s environmental and production challenges. Like her mother, she positioned herself as an activist long before that posture was trendy, too. In the process, she pushed many companies, including both Kering and LVMH, to take more accountability for their environmental output.

But by the time McCartney exited her partnership with Kering, in 2018, the concepts that
she innovated had overtaken her business. Activewear was quickly replacing denim as the general population’s everyday look—especially in the U.S.—and Adidas had prioritized higher-grossing partnerships, including one with Kanye West. Sustainability was everyone’s game. The Stella chain-link bag, which became popular with the type of women who now carry Coach’s “Brooklyn” shoulder boulder, receded in popularity.

At one point, McCartney’s suiting was a uniform for women who followed corporate dress codes and shopped on Net-a-Porter. These days, that’s a shrinking and embattled population. Meanwhile, Kering’s business changed, too, becoming hyper-focused on what were then the group’s fastest growing brands—including Saint Laurent, Gucci, and Balenciaga—as deals with independent designers like McCartney, and later Christopher Kane and Joseph
Altuzarra, were unwound.

During her time with Kering, McCartney’s C-suite was stable. From 2009 to 2019, she had
one C.E.O., Frederick Lukoff, who now runs the French brand Casablanca. But since the break, executive turnover at the business has accelerated, with two C.E.O.s (Gabriele Maggio, then Amandine Ohayon) and at least five C.M.O.s in five years (including Stephane Jaspar, Caroline Deroche Pasquier,
Peter Chipchase, and Claudia Plant, who left in June 2024).

It’s easy to understand why LVMH wanted to shed its stake in Stella McCartney, and also easy to understand why McCartney wanted to take full control of her legacy. Nevertheless, things are going to get trickier for her now—at least for a while. I know that McCartney wanted to
partner with LVMH so that the conglomerate could help manage business operations and the attendant operating costs off her balance sheet. After all, she’d relied on Kering for all this—legal, people, finance, strat and ops, supply chain—for two decades.

Perhaps LVMH didn’t provide the level of support, financial or otherwise, that McCartney was after. But going it alone will be harder on many levels. It
doesn’t help that McCartney’s greater mission—to make the fashion industry more socially and environmentally responsible—is up against more powerful forces than ever, as anti-woke rhetoric and policies gain momentum. 

Now that she’s exhausted the only strategic partners for a brand of that stature, she’ll have to fight all these headwinds herself. It’s fitting that the brand’s recent marketing campaign was called “It’s
About Fucking Time,” inspired by the t-shirt she wore to Paul’s 1999 induction into the Rock and Roll Hall of Fame. The phrase has become a sort of manifesto for McCartney: a person of tremendous privilege and advantages who has chosen, time and again, to rebel against the forces that made her success possible in the first place. With this new beginning, McCartney will once again need to prove herself. The question is whether this is her time… or her time is simply up.

Grammy’s best-dressed (an oxymoron if there ever was one): Doechii in
Thom Browne, Sabrina Carpenter in J.W. Anderson, Beyoncé in Schiaparelli, Kevin Morby and Katie Crutchfield in Bode, Mandy Moore in Stella McCartney, and everything that José Criales-Unzueta said in this series. [Instagram]

Dang, too bad about Marco Gobbetti leaving Salvatore Ferragamo. He’s good. [WWD]

R.I.P. Doris Brynner.
[WWD]

This Gordon von Steiner–directed Chanel commercial, featuring Dua Lipa lip-syncing to She Drives Me Crazy, is awesome. As Meecham Whitson Meriweather, one of X’s last great cultural critics, said, it’s so ’90s. I
love this song a lot (played continually in my house growing up), Dua Lipa is soooooo pretty, and the clothes look great. And while I still get a little stressed by how referential everything is these days, I’m embracing it in this case. It’s a good omen for the future of Chanel. [X]

And finally… Look, if I don’t see you in New York, there’s always London,
Milan, and two whole weeks in Paris. Can’t wait.

Until tomorrow,

Lauren

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An essential, insider-friendly Hollywood tip sheet from Matthew Belloni, who spent 14 years in the trenches at The Hollywood
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