Cryptocurrency exchange FTX exploded last week, causing an ongoing domino effect throughout the crypto world. In this Weekend Briefing, I take a look at the brands still encouraging people into the crypto space despite the volatility, along with fashion’s sustainability legislation, Uniqlo’s expansion and grim tidings at Kohl’s. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes, plus the Glossy Beauty Podcast for interviews from the beauty industry. –Danny Parisi, sr. fashion reporter
Bad timing for Nike’s and Adidas’s new NFT programs
A year after acquiring the NFT startup RTFKT, Nike made its next big play into the crypto-web3 space last week with the launch of .Swoosh, a hub for all its future NFTs. Just days later, Adidas announced its own first collection of digitally-wearable NFTs, while also introducing a complex system: People who bought one of Adidas’s earlier NFTs are permitted a single “capsule,” which they can use to acquire an NFT from the new collection.
I’ve expressed my own skepticism around cryptocurrencies and NFTs several times on the Glossy Podcast, and I have to question the optics of both companies currently betting big on the crypto space. After all, one of the largest exchanges in the world, FTX, just imploded, sending the global cryptocurrency ecosystem into a chaotic spiral.
Customers of FTX saw their entire savings disappear in an instant. The crypto world is largely unregulated, so there’s no chance of those customers salvaging their losses. And this is only the latest crash, after the massive Terra-Luna collapse in May. There have also been hundreds of related incidents of securities fraud, bubbles bursting and class action lawsuits. (Check out this extremely thorough 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 crypto world at a time when exchanges are collapsing and billions of dollars are simply disappearing reads as 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 in the New York State Assembly on Thursday focuses on required action, as well.
Brands making more than $100 million annually and selling in New York would be required to take steps to reduce emissions, meet stricter guidelines on the usage and disposal of certain chemicals, and face a fine of up to 2% of their annual revenue for non-compliance.
On this week’s Glossy Week in Review podcast, U.K. reporter Zofia Zwieglinska and I talked more about the fact that the fashion industry needs actual regulation, with consequences for not complying, if we are to meet the ambitious emission reduction goals that are promised every year. The New York Fashion Act is a step in that direction.
Uniqlo continues its retail expansion
The Japanese fashion brand Uniqlo already has 44 stores in the U.S. It added to that fleet with the launch of a 12,000-square-foot flagship in Seattle on Friday. This comes shortly after its sister brand, GU, opened its first U.S. store, in New York last month.
Kohl’s continues to struggle
Heading into the crucial holiday season, Kohl’s is still searching for a new CEO after Michelle Gass’s departure for Levi’s was announced earlier this month. On the embattled retailer’s third-quarter earnings on Thursday, it reported a 60% decline in income for the last quarter and retracted its initial guidance for expected sales for the rest of the year. Inflation has been particularly tough for Kohl’s and its bargain-hunting customers. If Kohl’s sees what other U.S. retailers like Target are expecting — higher costs of business and lower consumer spending through the holidays — it will be a dire winter for the company.