LVMH finds Fenty


May 13, 2019

Today, helium is running low and baseball players don’t want to go, but first…
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Rihanna brings LVMH into the Fenty-first century with an influential new partnership

Last week, LVMH Möet Hennessy Louis Vuitton added Fenty — Rihanna’s beauty line — to its group of luxury brands. The partnership makes Fenty LVMH’s first new in-house brand to debut since 1987 — and makes Rihanna the first female partner to launch an LVMH brand.

Following in the footsteps of other famous fashionistas like the Kardashian-Jenners, Rihanna’s partnership proves that, in the influencer age, personal brands can become big businesses.

Fenty’s fast and fashionable rise

Rihanna created Fenty with the goal of providing more inclusive cosmetics options, raising $10m from Kendo (LVMH’s cosmetics incubator) to get the business off the ground.

After launching in 2017 with 40 different skin tones, Fenty brought in more than $550m in revenue in its first year. 

Fenty’s massive success inspired LVMH to invite outsider Rihanna to launch a new brand under the luxury company’s ultra-exclusive corporate umbrella (ella, ella, eh, eh, eh — sorry).

Rihanna, who will be the first woman of color to run an LVMH line, will own 49.99% of the company.

Buying new followers with old money

The LVMH-Fenty collaboration is a collision of old and new: LVMH has called its brands “maisons” since it fabricated clothes for French aristocrats in their homes (“maisons,” en français); Rihanna has “Thug Life” tattooed on her knuckles.

But, even though LVMH did more than $14B in revenue last quarter, the luxury conglomerate doesn’t have as much influence with young, fashionable consumers as Rihanna — who has 70m Instagram followers.

The evolution of celeb-preneurship

For decades, celebrities — mostly men like Paul Newman or George Clooney — have parlayed newsworthy names into successful side hustles, usually by launching kitschy alternatives to big brands. 

But a new generation of celebrities — mostly women like Gwyneth Paltrow, Kylie Jenner, and Kate Hudson — is transforming star power into sales power and building billion-dollar businesses that actually threaten the big brands. 

Now, stuffy old companies like LVMH are actively seeking out partnerships with celebrities like Rihanna to capitalize on their influence: When Rihanna recently partnered with Puma for a sneaker collaboration, the company’s footwear sales increased 23%.

Plenty o’ Fenty
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Baseball stars are getting paid less than they were 10 years ago

Major League Baseball teams started going yard on player contracts when Kevin Brown became baseball’s first nine-figure player in 1998. And by 2007, Alex Rodriguez signed a 10-year, $275m contract with the New York Yankees. But since 2015, MLB salaries have been in a slump. 

With adjusted inflation even Bryce Harper (who signed a record 13-year, $330m deal with the Phillies this year) can’t match what the Yankees shelled out for A-Rod 12 years ago. 

So why the small ball?

Blame Billy Beane

Over the years, clubs have fielded armies of statisticians who’ve realized it’s not always a home run to pay top dollar for top-level talent. Why swing for one when you can field an entire infield for the same price?

Now, many top players have lost interest in free agency, instead opting to sign extensions with their current teams for a set salary after their contracts expire.

The free agency curveball 

In 2018, superstar Mike Trout stayed with the Anaheim Angels instead of testing the market. That led to the largest contract extension in baseball history

Anyone else would’ve likely made more in free agency than by signing an extension — but if you get hurt when you’re about to become a free agent, you could lose out on the grand slam tickle.

» There’s no crying in baseball

A merger between the makers of Sam Adams and Dogfish Head brews up controversy

Boston Beer Co. — the brewery that makes Sam Adams — bought rival brewing company Dogfish Head in a crafty $300m deal.

The merger will combine the 2nd-largest (Boston Beer) and 13th-largest (Dogfish) craft beer companies in the same corporate keg, raising some questions about what it means for a brewery to be considered “craft.”

What counts as ‘craft,’ anyway?

According to the not-for-profit Brewer’s Association, a brewery must make less than 6m barrels of beer per year and be less than 25% controlled by a Big Beverage company to count as “craft.”

Dogfish Head produces 262k barrels per year, but Boston Beer, which pumps out 4.3m barrels per year, barely makes the cut.

Since Boston Beer is one of the 10 largest breweries in the country and it’s publicly traded, beer snobs argue it’s not “true” craft  — and now they say Dogfish sold out.

Go home angry Facebook mob… you’re drunk

The fizzy flood of Facebook furor ranged from “Drink craft, not corporate!” to “oh f*ck me this is awful.”

But both businesses will still be independently operated and founder-run (albeit with wider distribution for Dogfish). 

Plus, the acquisition will allow Dogfish Head to grow without selling to a multinational beverage giant like Anheuser-Busch InBev SA/NV that could lay off employees and change production practices.

» Cheers, I guess?
kill your commute

Check out these tips, tricks, and apps used by Hustle readers to get more out of their commutes.

#1: Check some boxes.

“Timeblocking with Trello” (a flexible list-making app). – Debra H.  

#2: Keep in touch.

“During my long commute home, I started calling my mom. We talk more than ever now.” – Amy C.

#3: Warm up, then cool down (your listening).

“Align your podcast listening to your mental state. In the morning, I want to warm up my mind for the day ahead. So I listen to ones that are learning focused. In the evening, my mind is spent. So I listen to the fluffier, talk/banter-focused ones.” – Hayley B.

Got a commuting tip — or crazy story — of your own? Tell us about it here (we might just include it in our next send).

Party City is closing 45 stores as balloon sales deflate due to helium shortage

Balloon sales dropped 8% last quarter for Party City, deflating its overall sales 1.4%. But don’t worry, people still love to party. It’s actually because of a global helium crisis. 

According to the company, sales would have floated up if not for their gas problems. Instead, the celebration corporation has to let the air out of 45 of its stores — tripling the number it usually closes per year. 

‘Where’s the helium?’ the party animal said in a chipmunk voice. 

Helium is the second-most-abundant element in the solar system, but it has been running low for years down here on Earth.

Now, the US government’s helium reserves are almost depleted — forcing the Bureau of Land Management to ration its supplies. Problem is, market demand keeps on keepin’ on.

Helium’s also vital for several medical devices — like MRI machines — so, yeah, putting balloon fuel on the back burner makes sense.

Now, Party City’s digging through couches to find it

The company has signed an agreement for a new source of helium that might fill its stores with more of the gas for the next 2 ½ years (at a steeper price). But no one will know until the helium’s actually canned.

What’s worse, balloons may not start inflating again until summer. That’s bad news for Party City because springtime is graduation time —  AKA peak balloon season, people!

» I graduated and all I got was a balloon
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