LONDON — The final day of the World Retail Congress was ignited by a riveting discussion featuring Authentic Brands Group (ABG) founder, chairman, and CEO, Jamie Salter, alongside Saks Global Executive Chairman Richard Baker. Their conversation revolved around *Authentic Luxury Group*, an innovative partnership that took an astounding **12 years** to bring to fruition. This **joint endeavor**, first unveiled by WWD last October, is poised to reshape the future of luxury retail.
In a concise **20-minute dialogue**, both leaders spotlighted the pivotal role of **margin, data-driven insights**, and the intensifying need to expand into sectors like **hospitality** and **content** to elevate the luxury shopping experience.
Saks Global operates a staggering business with an annual gross merchandise value exceeding **$9 billion**, accounting for roughly **60% of luxury distribution** in the U.S.
Salter views the partnership as a **win-win**, emphasizing the importance of empowering retailers to achieve adequate margins. “In today’s landscape, **vertical margin** is everything. Without maintaining margins in the low to high 60s, profitability in the retail industry becomes a daunting challenge,” Salter asserted.
Baker also requires a strong foundation regarding vertical margins. He depicted the Authentic Luxury Group as a **50/50 joint venture**, suggesting significant earnings potential. “While we generate substantial royalties through brands like Vince at Saks, Neiman Marcus, and Bergdorf Goodman, this partnership will also extend our reach globally, enhancing both our margins and share of royalties,” Baker noted.
Another crucial element discussed was consumer data. Salter expressed interest in the **valuable insights** derived from Saks Global’s data, which can facilitate brand adjustments and keep ABG brands competitive, alongside guaranteed support across **Saks Global channels**.
In a candid revelation, Baker pointed out plans to trim down **500 to 600 brands** that don’t align with their portfolio—a figure aligning with the **25% reduction** mentioned earlier in the year. “Upon reviewing our vendor matrix, we identified **2,660 vendors**—a clear indication that specifications needed resetting,” Baker explained.
Enhancing operational efficiency, **Saks Global** is pivoting towards “controlled brands” through collaborations, similar to what Authentic Luxury Group represents.
First reported by WWD, the formation of Authentic Luxury Group aimed to elevate high-end brands like Barneys New York, Judith Leiber Couture, Hervé Léger, and Vince in both retail locations and in-store shops, seeking broader distribution across the U.S. and internationally.
Baker pointed out, “Our collaboration can yield **over $600 million** annually in synergy—an important figure that underscores how diligently we need to strive for financial growth at Saks Global.”
Furthermore, Salter hinted at the exciting potential of shifting **20%** of sales to controlled brands, which could lead to nearly **$400 million** in additional profits—a game-changer for both parties.
Shifts in Consumer Behavior and Market Adaptation
Nadine Graf, President of EMEA at Estée Lauder Companies, emphasized understanding **generational shifts** and evolving consumer behavior in her address. She pointed out, “More than **90% of Gen Z** regularly engage with TikTok, spending **hours** on the platform for entertainment, research, and shopping. They are hyper-experimental.”
Graf articulated how Estée Lauder is committed to transforming its operations to adhere to a more consumer-centered philosophy. “We are committed to tripling our new product launches within a **12-month** window,” she elaborated.
Embracing a **“glocal”** approach has become crucial—for Graf, adapting global brands to local realities is essential. “Understanding diverse consumer backgrounds, including skin tones and climate preferences, allows us to tailor our approach effectively,” she stated.
Simultaneously, she highlighted the **aging market**, noting that approximately 70% of older consumers feel underrepresented in beauty marketing. “We celebrate beauty at **every age**,” Graf affirmed.
The Creative Vision of Todd Snyder
American designer **Todd Snyder**, founder of his own label, captivated the audience with his unique **fashion journey**. From his beginnings with iconic brands like Ralph Lauren and Gap to establishing his brand in 2011, Snyder shared insights on creating modern, high-quality essentials for men, alongside a strategic pivot towards **direct-to-consumer sales**.
Elaborating on his successful flagship store in New York and his growth to **26 stores** nationwide, Snyder discussed the value of brand collaborations and his plans for international expansion. “We must approach carefully; pop-up events will precede any broader moves abroad to maintain the integrity of Todd Snyder,” he noted.
Community, resonating throughout the conference, emerged as a fundamental theme. Many brands attribute their success to the loyalty of their fan base.
Eshita Kabra-Davies, founder of peer-to-peer rental platform **By Rotation**, proudly announced an extension of her impressive **pop-up** in a five-story townhouse, initially set for October but now extended to **September**.
Kabra-Davies expressed the success of the Westminster council program, stating, “More brands are embracing pop-ups, resulting in increased revenue for the council.” Additionally, she secured another round of funding for By Rotation, emphasizing her global approach to rental platforms.
By Rotation is gearing up for a launch in the **United Arab Emirates** by year’s end, recognizing a potential market opportunity for peer-to-peer rental frameworks, previously nonexistent in the region.
“The landscape is evolving, and with growing expatriate communities, we anticipate early adopters who previously utilized By Rotation,” she discussed with keen optimism.
