Breaking down the Tariff Playbook — plus the latest news on Richemont, Chanel and Mytheresa
The Glossy Podcast · with Danny Parisi and Zofia Zwieglinska · May 23, 2025 · 42 min
Summary
This episode dissects the strategies luxury fashion brands are employing to navigate tariff volatility and market shifts. It offers insights into how companies like Richemont thrive through focused portfolios, while others like Chanel face downturns requiring significant operational adjustments. Ecommerce operators will learn tactical approaches to manage supply chain costs and market diversification in an unpredictable global economy.
Key takeaways
Richemont's focus on jewelry provided resilience against headwinds and demonstrates the value of specialized portfolios in volatile markets.
Mytheresa's successful acquisition and integration of Yoox Net-a-Porter highlight effective post-merger management and market consolidation strategies.
Brands are using a 'tariff playbook' with three core strategies: price adjustments, supply chain alterations (e.g., bonded storage, production relocation), and market diversification.
Chanel's profit decline and subsequent layoffs/hiring freeze illustrate the rapid impact of market shifts on even established luxury brands and the need for agile response.
Lowering SKU counts and pausing orders are practical tactics to manage inventory and mitigate risks associated with tariffs and slumping sales.
On the Glossy Podcast, senior fashion reporter Danny Parisi and international reporter Zofia Zwieglinska break down some of the biggest fashion news of the week. This week, we discuss the state of the luxury business through the lens of three major luxury companies that reported earnings this week. Richemont’s reliance on jewelry has put the company in a good position as the jewelry sector, despite headwinds, has managed to stay afloat. Meanwhile, Mytheresa, having completed its acquisition of Yoox Net-a-Porter, now has a much larger portfolio of retail companies to manage. So far, the company has been handling it well — CEO Michael Kliger said Mytheresa’s positive earnings results made it an outlier in luxury. On the flipside, Chanel has seen a downturn for the first time in a long time. Chanel has over 38,000 employees, 10,000 of whom were hired in the last three years alone. But with profits plummeting 30% last year, Chanel has had layoffs and now a hiring freeze reflecting its slumping sales. Later in the episode, we lay out the tariff playbook, a collection of strategies and methods we’ve heard from fashion brands about how they’re navigating tariff volatility. We lumped these strategies into three broad categories: raising prices, altering the supply chain, and shifting focus to other markets outside of the U.S. We’ve heard from dozens of brands about all the ways they’re approaching these three tactics, including sharing cost increases with manufacturers, using bonded storage to avoid paying harsh duties, lowering SKU counts, moving production to new countries and pausing U.S. orders.
What does this episode say about supply chain & operations?
Richemont's focus on jewelry provided resilience against headwinds and demonstrates the value of specialized portfolios in volatile markets.
What does this episode say about finance & fundraising?
Mytheresa's successful acquisition and integration of Yoox Net-a-Porter highlight effective post-merger management and market consolidation strategies.
What does this episode say about retail & omnichannel?
Brands are using a 'tariff playbook' with three core strategies: price adjustments, supply chain alterations (e.g., bonded storage, production relocation), and market diversification.
What does this episode say about founder & leadership?
Chanel's profit decline and subsequent layoffs/hiring freeze illustrate the rapid impact of market shifts on even established luxury brands and the need for agile response.
What does this episode say about supply chain & operations?
Lowering SKU counts and pausing orders are practical tactics to manage inventory and mitigate risks associated with tariffs and slumping sales.
