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Analyst’s Take: How J.Crew & Yoplait Became Dinosaurs

Rivet's 2020 Denim Circularity report takes a deep dive into how the global denim industry is plotting its circular future amidst a worldwide pandemic.

Ahead of the long weekend, here’s a potpourri of articles on a variety of topics that have been top of mind in recent months and are likely to be so indefinitely. First, while I’ve already shared several articles on “What Happened to J.Crew,” I’m including this article from the New York Times, because it discusses a crucial issue that affects almost all of apparel retail, i.e., the impact of “internet driven fashion interest.”  Pull quote: 

“Striking that balance [between sophisticated and accessible] had been Ms. Lyons’s skill, but that skill is both more widespread and also less essential now. What we want from fashion is more varied than it was a decade ago. This iteration of J.Crew was perfect for the first wave of internet-driven fashion interest, when being slightly smarter and more modern than the other centrist brands was enough. But it is no longer sufficient. Once the internet made it easier to see more, to learn more, and to buy more widely, J.Crew began to feel fusty. It was too slow-moving for those who were paying close attention, and a little too rich for those who do indeed look for no-brainers.”

I’d add that the prevalence of Instagram et al, which dictates that many consumers don’t want to be seen online wearing the same outfit twice, drives a need for constant fashion newness, rather than for both the basics and  “investment dressing” that J.Crew exemplifies.

Separately, this excellent article on Yoplait, whose sales were down 23 percent last year, with the terrific title “General Mills Lose the Culture Wars,” touches on many of the challenges that the large incumbent food companies face. Consumers’ rapidly changing eating habits and openness to newness, a tradition of sloooow decision making and the trendy emphasis on zero-based budgeting can, as the article in Fortune delineates, all have very unfortunate consequences.

Finally, here’s an interview in Axios with John Foley, the CEO of Peloton, the fitness company that this week became a unicorn, quite an accomplishment in the very crowded and competitive world of fitness. I might, possibly, be able to poke some holes in the pitch, and might, possibly, wonder how many times a CEO can draw an analogy between his company and Apple in one brief interview, but none of that matters right now. What is highly relevant is that the two major incumbent spinning studios, SoulCycle and Flywheel, which have national footprints and, in the case of Soul, huge share of mind thanks to brilliant pr, chose not to get into this business (Flywheel announced last week that it will), thereby ceding it to a company that is now worth over a billion dollars. Time will tell whether this was a classic case of the innovator’s dilemma.

Faye Landes, co-founder and general partner of Back to the Future Ventures, advises emerging consumer and retail companies on strategy, branding and fundraising. She was one of Wall Street’s leading consumer and retail analysts for over 20 years and was widely recognized for her ability to anticipate sweeping trends, such as the widespread adoption of activewear. She has frequently appeared on CNBC, Bloomberg TV and other media outlets and has presented at industry conferences all over the world. Read her “Analyst’s Take” column here weekly. Contact her at faye@backtothefutureventures.com.

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