Hi, and welcome back to Line Sheet. Did the Dodgers win?

Speaking of: Los Angeles is lousy with events and parties post-Vogue World and pre-LACMA Art+Film Gala. I regrettably missed the little get-together last night for Melissa Morris and Métier at Daphne Javitch’s house-with-the-red-carpet, but maybe I will catch you tonight at the Swarovski extravaganza, Andrea Lieberman’s dinner, or the afterparty for the premiere of I Love L.A.—a show with a plotline involving Courage Bagels, I’m told. There are a number of television series set on the Eastside of Los Angeles right now, which means my life eating at Mozza, shopping at Cookbook, and walking through the Atwater Village farmers market has become an even bigger cliché than before.

If you, too, are a person who cannot escape trends, you might already own a sweater from Guest in Residence, Gigi Hadid’s cashmere line that surprisingly satisfies on a lot of levels: color, design, and value. Sarah “SShapiro@puck.news” Shapiro is here to share the secret-sauce recipe. You might be surprised by the hitmaking capability of this brand. Up top, Sarah follows up on her piece last week about the psychological recession plaguing Americans, explains why everyone is suddenly into the NFL (Travis?), and previews layoffs at Target and Amazon.

Mentioned in this issue: Teyana Taylor, Gigi Hadid, Nordstrom, Isaac Ross, Sijeo Kim, Whatnot, Naadam, Kristin Juszczyk and Emma Grede, Roger Goodell, Mel C, and many more…

A MESSAGE FROM OUR SPONSOR

Lyst is re-imagining the multi-brand fashion store online, partnering with the world's best brands to help you reach the customers who matter.

With the stakes higher than ever this holiday season, Lyst insights reveal new search trends and behavioural data from fashion’s most strategic shoppers, and how your brand can cut through the noise online.

Download the Lyst Peak Season Playbook now.

Sarah Shapiro

Three Things You Should Know…

Consignment cope: The feedback I received from last week’s psychological recession article contained hints of how retailers and shoppers are navigating the economic headwinds. Take consignment boutiques, many of which are finding that offering immediate cash, rather than making consignors wait for their items to sell, can juice business. One boutique I spoke to captures higher margins by offering less money up front, while sellers get guaranteed money now instead of uncertain payouts later. It’s a win-win, and they are finding that more consignors are choosing this option. Meanwhile, U.S. shoppers are orchestrating their own workarounds to dodge surprise tariffs on international orders. The new hack is having relatives abroad ship items as “gifts.” What will come first? The end of the tariffs, or a secondary industry of Taskrabbity personal shopping services designed to game the system?
Lululemon, Naadam, and Off Season bet on sports: When your business is struggling, you could do worse than slap on some NFL branding during football season and hope for the best. New versions of Lululemon’s popular Align leggings and Scuba hoodies with NFL team logos are now available at Fanatics and NFL.com, where the activewear brand is hoping to capture even a tiny fraction of the country’s 140 million NFL fans as it contends with a 50 percent drop in its stock price year to date. I’m already hearing buzz from the teens that are into the products and excited—we live in an area where flag football, especially for girls, has taken off. In a similar play, I’ve heard from an inside source that cashmere sweater maker Naadam’s new collab with the NFL is performing well. The first delivery, featuring 10 teams, sold out quickly, and sales hit half a million dollars within a week. Commissioner Roger Goodell sent a personal thank-you note.

Meanwhile, the digital sports giant Fanatics is now selling Kristin Juszczyk and Emma Grede’s Off Season NBA-themed puffer jackets, following their NFL collection earlier this year. (Check out Fanatics C.E.O. Michael Rubin’s recent walk-through of the exploding $25 billion sports betting industry with our Bill Cohan.)
Target and Amazon layoffs are coming: Amazon and Target announced this week that layoffs are coming before Black Friday. Amazon is cutting up to 30,000 corporate employees, or about 10 percent of its white-collar workforce, according to Reuters. (The company put the number at 14,000 in its own release.) Target is laying off 1,800 employees, its largest purge in a decade, as C.O.O. Michael Fiddelke ascends to C.E.O. in February.

The layoffs will come just as the ever-pivotal holiday season is revving up. The fourth quarter typically accounts for 28 to 30 percent of both retailers’ annual top lines. But Amazon is betting on A.I. and robots to help cut operational expenses. (The stock was up slightly on the news.) As for Target, investors seem pleased with the notion that Fiddelke will wring out more operational efficiencies on the corporate side. Ideally Target would announce some new merchandise, too, but for now we’ve got survival cuts and managed decline. If this is how the biggest companies are staring down the end of the year, what can we expect for the smaller retailers going into Q4?

Now, the main event…

Gigi Hadid’s Soft Power

The supermodel’s cashmere label, Guest in Residence, has quietly become a $30 million business—profitable, well-liked, and largely unrecognized as hers.

Sarah Shapiro

You can see directly into supermodel Gigi Hadid’s NoHo apartment from her store on 21 Bond Street, but most customers browsing the striped polo knits, cashmere vests, and quilted wool-cashmere puffer jackets at Guest in Residence have no idea they’re shopping a celebrity brand. Instead, they’re congratulating themselves on finding a sweet spot, price- and quality-wise, between Quince and cashmere from The Row or Elder Statesman. Sure, it’s still a celebrity vanity project, but one with the potential to become something more.

A MESSAGE FROM OUR SPONSOR

Lyst is re-imagining the multi-brand fashion store online, partnering with the world's best brands to help you reach the customers who matter.

Hadid, the creative director of the label, generates about a third of the estimated $19 million in media advertising value that Guest in Residence accrues through social media, according to Launchmetrics. But while Hadid has 76 million followers on Instagram, and was on two Vogue covers this year—this past month with pal Kendall Jenner—the brand’s customers seem mostly drawn to the product, not the celebrity connection. One boutique employee I spoke to told me the “pieces sell themselves” and that most shoppers have no awareness of Hadid’s involvement.

That makes Guest in Residence an interesting case study among the countless, often baffling business alliances between celebrity and fashion. As Lauren wrote this week, there’s been pushback lately among fashion insiders to brands that seem to have lost the plot by relying too much on famous faces (and some not-so-famous ones). Hadid’s cashmere play has flipped the script: It’s a low-key fashion brand from a mega-celebrity that seems genuinely pretty beloved.

Guest in Residence, which was founded in 2022, is now doing over $30 million in gross annual revenue, I’m told, and has been profitable since last year, with high EBITDA margins. The sales balance is about 60 percent wholesale and 40 percent direct-to-consumer via e-commerce and its two storefronts, in New York and L.A. And there’s plenty of room for the company to get bigger. While the stores are in solid locations—the NoHo location has Goop and J.Crew as neighbors—Guest in Residence doesn’t yet have much name recognition. The brand also occupies a distinct position in the hierarchy between mid-tier and luxury. Yes, the sweaters (ranging from about $300 to $695) will pill—it’s hard to find one that won’t these days—but the yarn is a higher gauge than what one might find at Quince or other D.T.C. players. Design director Sijeo Kim is a veteran of The Row, Theory, and Helmut Lang.

The first week that Guest in Residence was sold on Net-a-Porter, an inside source heard it was the online retailer’s top-selling brand. Guest in Residence’s women’s shrunken crew, a basic style you can find at almost any cashmere brand, is priced at $295. On the higher-priced side, I’ve heard from boutiques that the Western Fringe jacket—number 15 among affiliate links in driving conversion in ShopMy’s September rankings—has been hard to keep in stock. Also in September, Guest in Residence showed a 270 percent spike on Lyst. Top items besides the Western jacket were striped polo knits and cashmere vests.

More than half of Guest in Residence customers are between 25 and 34, according to Charm, which tracks D.T.C. and e-commerce businesses. Another 24 percent are between 35 and 44—Millennials with disposable income. The brand’s strategic collabs align with this demographic—most recently with kids’ brand Bonpoint, wellness-coded Madhappy, and Caviar Kaspia for the aspirational.

Celebrity brands tend to peak at around $50 million in sales. Hadid and C.E.O. Isaac Ross may soon have to answer the big question of what happens to a brand when the celebrity loses interest, or loses traction in the culture—or both. But when things go well, you end up with The Row.

What We’re Reading… Looking at… and Listening To…

Nordstrom is returning to bigger catalogues and also took a page from late shopping bible Lucky magazine, with included stickers to highlight favorites. [New York Times]

First, John Malkovich for J.W. Anderson. Now, Mel C. Is there a better-cast campaign this season? [Instagram]

Whatnot, the largest live shopping platform, raised another $225 million in funding, bringing their valuation to $11.5 billion. This round was led by DST Global and CapitalG. Luxury shoppers are spending an average of $1,000 a month on live selling, according to Whatnot, and this is a big spot for resale opportunities. [Inbox]

After a two-month-long deliberation, a court has ruled that Canadian billionaire Ruby Liu can’t take over the leases for 25 Hudson Bay stores. She was hoping to open her own department store. [The Globe and Mail]

Teyana Taylor will host this year’s CFDA Fashion Awards, presented by Amazon Fashion, on November 3 at the American Museum of Natural History, with Jenna Lyons handling the red carpet. Andre Walker, Donatella Versace, and Cynthia Rowley will be among those taking home awards. [Inbox]

Moncler beat analyst projections in Q3. [Inbox]

Until tomorrow,
Lauren

P.S.: We use affiliate links because we are a business. We may make a couple bucks off them.

Need help? Review our FAQ page or contact us for assistance. For brand partnerships, email ads@puck.news.

You received this email because you signed up to receive emails from Puck, or as part of your Puck account associated with {{customer.email}}. To stop receiving this newsletter and/or manage all your email preferences, click here.

Puck is published by Heat Media LLC. 107 Greenwich St., New York, NY 10006

SEE THE ARCHIVES