The FTX cryptocurrency exchange exploded last week, causing an ongoing domino effect in the crypto world. In this Weekend Briefing, I take a look at the brands that are still encouraging people to enter the crypto space despite the volatility, as well as fashion sustainability legislation, the expansion of Uniqlo and bad news at Kohl’s. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and episodes of Week in Review, and to the Glossy Beauty Podcast for beauty industry interviews. –Danny Parisi, sr. fashion journalist
Bad timing for new NFT programs from Nike and Adidas
A year after acquiring NFT startup RTFKT, Nike made its next big play in the crypto-web3 space last week with the launch of .Swoosh, a hub for all its future NFTs. A few days later, Adidas announced its own first collection of digitally wearable NFTs, while introducing a complex system: people who bought one of Adidas’ first NFTs were entitled to a single “capsule”, which they can use to acquire an NFT from the new compendium.
I have repeatedly expressed my own skepticism towards cryptocurrencies and NFTs on the Glossy podcast, and I have to question the optics of the two companies currently betting big on the crypto space. After all, one of the largest exchanges in the world, FTX, has just imploded, sending the global cryptocurrency ecosystem into a chaotic spiral.
FTX customers saw all their savings disappear in an instant. The crypto world is largely unregulated, so there is no chance of these clients recouping their losses. And this is just the latest crash, following Terra-Luna’s massive collapse in May. There have also been hundreds of related incidents of securities fraud, bubble bursting and class action lawsuits. (Check out this extremely comprehensive 2020-2022 timeline of crypto incidents and implosions from Wikipedia.)
Part of Nike’s .Swoosh plan is to encourage people to create a crypto wallet through a company called BitGo. But enticing people to join the extremely volatile world of crypto at a time when exchanges are collapsing and billions of dollars are simply disappearing reads reckless at best.
The new version of the New York Fashion Act is much stricter
While an earlier version of the New York Fashion Sustainability and Social Accountability Act only required brands to disclose the environmental impact of their operations, a new version of the bill that was introduced Thursday in the New York Assembly New York State is focusing on the required actions, as well.
Brands earning more than $100 million a year and selling in New York would be required to take steps to reduce emissions, meet stricter guidelines on the use and disposal of certain chemicals, and deal with a fine of up to 2% of their annual turnover for non-compliance.
In this week’s Glossy Week in Review podcast, British journalist Zofia Zwieglinska and I talked more about how the fashion industry needs real regulation, with consequences for non-compliance, if we want to meet the ambitious emission reduction targets that are promised each year. The New York Fashion Act is a step in this direction.
Uniqlo continues its business expansion
Japanese fashion brand Uniqlo already has 44 stores in the United States. It added to that fleet with the Friday launch of a 12,000 square foot flagship store in Seattle. This comes shortly after its sister brand, GU, opened its first US store in New York last month.
Kohl’s continues to struggle
As the crucial holiday season approaches, Kohl’s is still looking for a new CEO after Michelle Gass announced she was leaving for Levi’s earlier this month. On the beleaguered retailer’s third-quarter earnings report on Thursday, it announced a 60% drop in revenue for the last quarter and withdrew its initial forecast for expected sales for the rest of the year. Inflation has been particularly difficult for Kohl’s and its bargain-hunting customers. If Kohl’s sees what other U.S. retailers like Target are expecting — higher costs for business and lower consumer spending during the holidays — it will be a disastrous winter for the company.
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