Brands, Retailers Navigate Changes at World Retail Congress
Tianwei Zhang and Hikmat Mohammed
7 min read
LONDON — Kicking off the last day of the World Retail Congress, Authentic Brands Group founder, chairman, and CEO Jamie Salter and Saks Global executive chairman Richard Baker discussed Authentic Luxury Group, a new partnership, first reported by WWD last October, between the two that took 12 years to finalize.
During a 20-minute discussion, they emphasized the importance of margin, data-driven insights, and expanding into hospitality and content to enhance the luxury shopping experience.
Saks Global runs a business with over $9 billion of gross merchandise value per year, representing around 60 percent of luxury distribution in the U.S.
Salter sees the deal as mutually beneficial.
“What’s important for us is working with our licensees and retailers to make sure that they can make the right margin. If you look at what the business model is today, vertical margin is everything. If you are not making somewhere in the low 60s to high 60s on a maintain margin, it’s very difficult to make money in the retail space,” he said.
“On Baker’s part, he needs that vertical margin also. Authentic Luxury Group is a 50/50 joint venture. We collect a lot of royalties selling Vince to Saks, Neiman Marcus, and Bergdorf Goodman, but we’re also going to collect a lot of royalties selling those brands all over the world and to other retailers all over the world. Saks Global is now not only making the margin in their store, but they’re also getting a 50 percent share in all of the royalties that are being created from Authentic Luxury Group,” Salter continued.
He also sees great value in consumer data from Saks Global, which can help ABG brands to better adjust their product mix and stay competitive, in addition to getting guaranteed support across all Saks Global channels.
Two speakers at the World Retail Congress in London.
During the talk, Baker revealed the retailer will slash 500 to 600 brands that don’t work within the portfolio, a figure that’s roughly in line with the 25 percent cut revealed in February.
It was the first time that Baker specified the number of proposed cuts to the vendor matrix.
“We had to right-size our vendor matrix. When we put all these companies together, it turned out we had 2,660 vendors. Too many and terms of many of these vendors weren’t right. We had to reset our expectations for what vendor relationships would look like,” said Baker.
Instead, Saks Global will work increasingly with “controlled brands” via partnerships similar to Authentic Luxury Group.
First reported by WWD last October, Authentic Luxury Group was formed to promote Authentic’s high-end brands, including Barneys New York, Judith Leiber Couture, Hervé Léger, and Vince. The plan is to roll them out to retail locations or in-store shops, and widen their distribution in the U.S. and abroad.
“As part of our transaction, we have over $600 million a year in synergy. We all know how hard we have to work to make an additional $600 million a year, and [what was] first and most important was getting that figured out at Saks Global,” said Baker.
“If I can bring our mix to 20 percent controlled brands with a larger margin and an ownership position with Salter, that’s a tremendous win for us, and a much more conservative and appropriate cash flow,” he continued.
Salter added, “You take 20 percent of $9 billion, that’s $1.8 billion. He’s gonna make 25 percent more on that product. That’s almost a $400 million change. That’s why this relationship is so critical.”
Nadine Graf, president of EMEA [Europe, Middle East and Africa], U.K. & Ireland, and emerging markets at the Estée Lauder Companies, Inc., said she is closely navigating the generational shifts and the changes in consumer behavior that come with it.
“More than 90 percent of Gen Z are on TikTok every single day, multiple times, not for minutes, for hours. And they go there to be entertained, to learn, research, and shop, ultimately. They are highly hyper experimental,” she said.
Graf said Estée Lauder is adapting and changing pretty much everything across the business to adapt to the new reality as part of its beauty reimagined vision to become the most consumer-centered prestige company in the world.
“We are putting a lot of effort into changing our entire value chain, into being faster, committed to accelerating triple our new product launches in less than 12 months,” she added.
She is also embracing a “glocal” mentality.
“The more consumer-centric we are, the more we need to adapt to the local realities. We have got global brands, strong global brand DNAs, but we flex them and translate them into local brands. The consumer is very different, skin tone, weather, everything that impacts the way they live and the way they look needs to be adapted,” Graf said
At the same time, Estée Lauder is betting on the ageless market.
Graf observed that around 70 percent of the ageless consumers do not feel seen or represented in beauty media or social media, in advertising. “We celebrate beauty at every age,” she added.
A preview of Todd Snyder fall 2025 collection with designer Todd Snyder.
American designer Todd Snyder, founder of his namesake label, brought firsthand fashion experience to the retailers at the event, sharing his journey from working at major brands like Ralph Lauren and Gap to launching his label in 2011. The seasoned designer emphasized the importance of creating modern, high-quality essentials for men and the strategic shift to direct-to-consumer sales.
He highlighted the success of his flagship in New York and the growth of his brand to 26 stores across the U.S. He also touched on the impact of brand collaborations, such as with Champion and Time and one that’s coming next year, and his plans for international expansion, aiming to balance growth with maintaining brand authenticity.
“We have to be very precise. We’ll do pop-ups before we do things that are a little bit more granular and thinking about what Todd Snyder Europe or Todd Snyder Japan look like. It terrifies me at the same time, because it’s the one thing that can kill a brand. It can’t be something that would just flood the markets,” added Snyder.
Community was the buzzword of the conference with many brands attributing their success to their loyal following.
Eshita Kabra-Davies, the founder of the peer-to-peer rental platform By Rotation revealed that the five-story townhouse pop-up she set up in October last year on Brook Street was getting extended to September.
Eshita Kabra-Davies
“It’s been a huge success for the Westminster council program and more brands are taking on pop-ups on the street, which is driving revenue for the council,” she said in an interview.
Kabra-Davies has also closed another round of funding for By Rotation — details of which she didn’t share while they’re being finalized.
She has a global thinking cap on when it comes to the rental platform.
By Rotation will be launching in the United Arab Emirates at the end of the year. The region currently doesn’t have any form of rental platforms, not even a peer-to-peer one.
“We’re really interested to actually see what we can do with our app there. I wouldn’t have done this maybe two, three years ago because there’s a stigma associated around secondhand [in the region], but there’s a growing population of expats and people who are already customers of By Rotation, who have recently moved to the U.A.E., we actually think that we have an early adopter base there,” said Kabra-Davies.
