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L'Oreal Shares Down After Q3 Sales Disappoint 

Model Cindy Bruna presents a creation during a public show named "Walk Your Worth" organized by French cosmetics group L'Oreal near the Eiffel Tower as part of Paris Fashion Week, in Paris, France, October 1, 2023. (Reuters)
Model Cindy Bruna presents a creation during a public show named "Walk Your Worth" organized by French cosmetics group L'Oreal near the Eiffel Tower as part of Paris Fashion Week, in Paris, France, October 1, 2023. (Reuters)
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L'Oreal Shares Down After Q3 Sales Disappoint 

Model Cindy Bruna presents a creation during a public show named "Walk Your Worth" organized by French cosmetics group L'Oreal near the Eiffel Tower as part of Paris Fashion Week, in Paris, France, October 1, 2023. (Reuters)
Model Cindy Bruna presents a creation during a public show named "Walk Your Worth" organized by French cosmetics group L'Oreal near the Eiffel Tower as part of Paris Fashion Week, in Paris, France, October 1, 2023. (Reuters)

L’Oreal shares fell on Friday, sinking to their lowest level since March, after a larger-than-expected hit to its travel retail business in Asia and disappointing sales of its luxury division as inflation and a choppy economic environment curb high-end spending.

Shares were down 2.6% in early trading, the lowest performer on the Paris CAC-40 index.

A slowdown in the luxury division was most likely expected after LVMH’s perfume and cosmetics division slightly missed expectations last week, but 3.2% growth versus consensus expectations of 12.2% likely comes as a negative surprise to the market, Jefferies analysts said.

Analysts also pointed to a sharper-than-expected hit to business in Asia from tighter controls by the Chinese government of daigou resellers, who buy products at lower prices abroad and resell them at a discount in China.

Although weakness in North Asia because of travel retail issues and the luxury division was expected by investors, the scale of the miss "took us by surprise," analysts at Barclays said.

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Zalando Uses AI to Speed Up Marketing Campaigns, Cut Costs

FILE PHOTO: A person with a shopping bag of Zalando outlet walks along Kurfuerstendamm shopping street looking for bargains in Berlin, Germany, December 3, 2022. REUTERS/Lisi Niesner/File Photo
FILE PHOTO: A person with a shopping bag of Zalando outlet walks along Kurfuerstendamm shopping street looking for bargains in Berlin, Germany, December 3, 2022. REUTERS/Lisi Niesner/File Photo
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Zalando Uses AI to Speed Up Marketing Campaigns, Cut Costs

FILE PHOTO: A person with a shopping bag of Zalando outlet walks along Kurfuerstendamm shopping street looking for bargains in Berlin, Germany, December 3, 2022. REUTERS/Lisi Niesner/File Photo
FILE PHOTO: A person with a shopping bag of Zalando outlet walks along Kurfuerstendamm shopping street looking for bargains in Berlin, Germany, December 3, 2022. REUTERS/Lisi Niesner/File Photo

European online fashion retailer Zalando is using generative artificial intelligence to produce imagery faster for its app and website, it said on Wednesday, as AI shakes up the fashion industry and cuts costs.
Zalando, which sells branded clothes, shoes, and accessories across 25 markets in Europe, is using AI to produce imagery quickly enough to respond to short-lived fashion trends spread on social media. It is also developing AI-generated "digital twins" of models to use in its marketing.
"We are using AI to be able to be reactive," Matthias Haase, vice president of content solutions at Zalando, told Reuters in an interview.
Using generative AI cuts the time needed to produce imagery to around three to four days from six to eight weeks, and reduces costs by 90%, Haase said, adding the AI-generated content drives greater engagement from customers.
"It's not because of AI content that is better than human-created content, it is really about how new, how relevant it is to our customers," Haase added.
Around 70% of Zalando's editorial campaign images were AI-generated in the fourth quarter of last year as it has increased use of the technology. AI-generated images illustrated Zalando's recap of the year's biggest trends, including "brat summer", "mob wife", and double denim.
For an industry used to costly, meticulously planned fashion shoots on sets or in far-flung locations, the prospect of using AI to speed up production and use marketing money more efficiently is of particular appeal to retailers with far smaller budgets than the big, luxury players.
Zalando is the latest retailer to try out AI-generated digital twins of models, after Sweden's H&M in March said it created digital twins in collaboration with a modelling agency.
The AI-generated three-dimensional replicas enable Zalando to feature a model in a campaign and show an exact replica of that model in the app's product pages, without needing to take hundreds of photos.
Asked how generative AI could affect job prospects for fashion photographers, Haase said traditional fashion shoots will still be needed, but that photographers and other creatives will also have to adapt to using AI tools.
"Creative people fear that AI makes creatives redundant," Haase said. "I don't see that at all, to be honest... I see it rather that creative minds have now, instead of two hands, six hands."