How cultural capital becomes financial capital

0:02Welcome to Season 2 of Hitmakers. In this season, we're going to track how culture moves margins, multiples, and market cap. Today, we are looking at moments when cultural capital turns into financial capital. We break down why Labubu is still printing money, long after most thought the hype had peaked. Why Hailey Bieber Road became a$600 million brand almost overnight. And why bootleg Gucci is a hotter business than Gucci itself.

0:44Welcome, everyone. How are you doing today, Anna? I'm doing great. Shall we introduce ourselves for a second? I'm Anna Angelic. I'm Leland Mashmeyer. And this is a long time in the making, and it's finally happening, and I cannot be more delighted. So for those who don't remember me from season one or don't know me, I work as a brand executive, formerly chief brand officer at Banana Republic NS3, and currently consulting, author of two books, The Business of Aspiration, and hitmakers writing a newsletter, Sociology of Business. Leland, your turn. Leland Mashmeyer, I have done many, many things, but I'm probably most famous for being one of the co-founders of the consultancy, Collins, working with a lot of companies from a design perspective on increasing the value of their company.

1:36For many years was the chief brand officer of Chobani, yes, the yogurt company that we helped expand into being much more than a yogurt company, but also been an investor, worked with a lot of PE firms, but always in the space of using design as a strategic method for improving the value of a business and transforming businesses. Love that. So what have you been up to last week? Well, I have two kids, so it's always just about the kids and moving them from A to B and trying to get clothes on them and toothbrushes in their mouth. That's been the main thing. Oh yeah, I've heard enough. I've been in Paris in Milange.

2:13Actually, I did do one cool thing. I was in Bhutan for 10 days. Oh, that's true. Okay, cool. Yeah, going to, that's why we're recording this so late, because we were going to a bunch of monasteries up there, had a very lovely audience with the king of Bhutan and got to learn about a new city that they're building, which integrates Bitcoin and cryptocurrencies into the model of the city. And it's a whole mindfulness city. And it's really fascinating listening to the king talk about it and stuff and got to ask him a bunch of questions about it and kind of interrogate the thinking and the approach to it.

2:46Because I mean, like, how often do you get to design a city? that's wild maybe we'll leave that for some for a next episode on my end there were fashion weeks so that's what brought me there and i'm really glad that we're going to talk about some of these topics later but i had the opportunity to stop by gucci flagship at via monta napoleone and see gucci archetypes which i really love as the new model of brand building because what Dernoy has done basically broke down the code in brand code into 37 archetypes and what he is doing is basically using mood and the vibe to sell products and saying hey there is not one way that Gucci is getting sold there are 37 ways and we are using the Italianess of this brand and breaking it down in different architects the way you can wear it and which is very smart and modern way of doing it.

3:44It's not telling you you need to wear it like that. It's like what are you in the mood for today? So I find that so interesting because like obviously so much about business is about a singular idea that you consistently and efficiently execute on. Even what Alessandro was doing at Gucci before had a very singular aesthetic to it and it's very singular world building. I mean it modified a lot and had a lot of kitsch and a lot of play to it so there was always something new in there, but man, 37 archetypes is a lot to manage. I wonder why he thought 37 and not like 32, for example. Honestly, when you go in and those, I asked store associates, I was like, what's selling?

4:27What's selling? And they were like, VIP selling La Bomba sold like immediately, which is like fur. And I'm like, who bought this golden thing? and they were like, there was a Chinese customer in private sale and then the denim is selling really well, so they knew. And then I got into conversation and obviously them being Italians, they're like, we're seeing this renaissance fashion. Of course, they're going to say renaissance, they're Italians. But it's sort of nice to see people being excited about creativity again, which I guess gets us to creativity plus finance equals cultural capital becoming business capital and market moves.

5:10So what's been happening in the market this week? We're going to have this segment that we call Market Moves. We're going to do it with every episode. And it's really just kind of a check-in on tracking how culture is moving the markets. And so a lot of stuff has been happening over the summer. So we're just going to get right into it and kind of give you an overview of some of the stuff that we thought was meaningful and worth noting from the summer. Skims raised new funding in July at a$4 billion valuation, up from$3.2 billion just last year. The boost wasn't just from sales, it was cultural dominance.

5:46Its new men's line launched with a campaign starring Nick Bosa, Neymar, and Shea Gilgis-Alexander, turning sex appeal in sports, casting into viral fuel. Kim Kardashian built a fashion brand and priced it like a media company. In August, NVIDIA quietly hired its first ever global community manager, a signal that even the world's most valuable semiconductor company sees brand affinity as a strategic moat. For a company that rarely speaks outside earnings calls, it's a major cultural shift. GPUs are now consumer objects, not just components. In September, Balenciaga and Momo launched a capsule collection featuring archival imagery and logos, a collision of cultural institutions and commercial fashion.

6:28It's part of a broader strategy, turning museum cachet into streetwear clout and reframing heritage as hype. Can I just jump in? Balenciaga also has t-shirts and this looks like Demna's parting gift, question mark, to the brand spring summer collection saying luxury priced at$795. I love Paris, Britney Spears, and then Ripsteads for$7 ,000. That's his parting gifts for Pierre-Paul Piccoli. Figure out how you're going to sell this. Go on. Hey, it's a Veblen good. That's all it is. Veblen good. Lodges. Social capital, baby. Layering on social capital to drive financial capital. That's cultural and fashion design.

7:17He's like so totally effing with shape. most special designer. Okay, and Pierre Paolo, self-esteem motherfucker. You're gone. It works. You save. That goes unstable. Okay, LVMH is always doing something, but recently it deepened its investment in Japan through artisan partnerships and fashion exhibitions, which is part of a strategy to hedge tourism volatility by betting on cultural permanence. LA Galaxy dropped a limited edition capsule with cult streetwear brand Ryoko Rain. It's the latest example of a sports team moving beyond ticket sales into high margin cultural merchandise. As match day revenues plateau, clubs are repositioning as lifestyle platforms with apparel now driving a growing share of both revenue and ROI on fan engagement.

8:06And finally, after years of confused brand identity, Burberry is finally embracing its British roots, which just seems so obvious, but they're finally doing it. Burberry leaned hard into Britishness with its It's Always Burberry Weather campaign and a British music subculture inspired runway show featuring nods to Oasis, Bowie and Sting. The cultural collaboration appears to be working. Q1 losses were less severe than forecast, signaling early traction in the brand's turnaround under CEO Joshua Schulman. So, Ana, that is just a small grouping of stuff that's happened, but a lot of exciting stuff going on.

8:44Love the summary. I just want to kind of like stay with Burberry for a second, because that's a brand that I have a long history with. Since I've been working at the group, which is an agency that built websites for luxury brands more than 10 years ago, we did Art of the Trench. So there is nothing more British than, like maybe the Queen or now the King is more British than Burberry. and it was like really strange to watch a brand that so british struggle with its identity and it was fantastic it is fantastic to see it finally embrace it and sort of find its way and like in maybe a macro on a macro level just when britain is i don't want to say struggling with its identity but maybe that's that's what british need maybe they need the reminder what what they are all about you know maybe they just need like i think they need a little bit of their courage i mean isn't that always the case like when things go to shit you try to find like who you actually are in the midst of all the like the fucked upness and like try to recenter on that i mean i you know i i said the whole burberry thing was like so obvious that it's british and i think it's just one of those things that it's like it's so obvious that you overlook it and it just seems too easy of an answer but my god like what a great history what a great canon to pull from and reinterpret and remix at the heart of your brand there is no other brand in the world that can do that except burberry and just for years they just weren't focused on it because they felt they had to chase some other stuff totally and not only that the history of the trench the way that the trench as the product speaking of product led branding is the way the trench was made it was truly innovative and it was not possible to make that like how it was how the material was actually covered to be waterproof that was a true innovation hundred years ago or whatever more than that how was how it was made and only that horrible horrible damage could have inspired So going back to 2025 and the past year under Joshua Shulman, the results are there.

11:06Decline in sales is not as severe as before. They have clearly refocused their product focus on trenches. And what they have also been doing is, again, brand identity clearly on Britishness. And then again, refocus on the product strategy and the brand strategy are in sync, which is very clear in Daniel Lee's latest show, fashion show at the London Fashion Week, where he really leaned into, again, the British, one of the greatest experts is its music. and he leaned in the music subcultures, Oasis, David Bowie, The Queen, and so on, and he had the codes of those music subcultures like Oasis, Parka, Vita Far, David Bowie, like suede, suit, and so on to kind of to inform his visual language for the latest collection.

12:07So those guys who are familiar with my work and those who are not, I use cultural programming a lot to say, what is the narrative of brands in culture? How do you use subcultures and their sort of behaviors and dates and codes and aesthetics to partner with the subculture in a way to generate a new cultural story? An example is really that Burberry is using the language of a music subculture to create something new, both in terms of product and in terms of their cultural program visible in what they have done last summer when they went to Blastonbury and other famous British music festivals and what they did in their brand activations across British Isles and And what are they doing now in terms of the short, longer form content with Olivia Colman, which is another British treasure.

13:13So they're almost hitting all the marks. We have the content. We have the right personalities. We have the right food. We have the right language that we are using. So the consistency and the tightness of that program and the cultural products that they're using within it, the collaborations, the merge, the content, the experiences, the events, they're hitting all the marks. I have to say I'm impressed. I'm very curious what they're going to do next year. And I mean, I think that's really well said. Like I was thinking of a conversation I had, I think at this point, like two weeks ago. So I basically spent the better part of a full day with a CMO of a major tech company, like one of the largest in the world.

14:00And our entire conversation was around how a company can be widely known, trusted, score high on all the traditional brand metrics, but be completely invisible in culture. And this was something that completely baffled him. And it was not like the company needed to be visible in culture in order to drive business. The business was fantastic, but it was a confounding challenge of like, how can one be true and the other not true? And a big part of what you just said is the idea of focusing on those subcultures, focusing on not just targeting and marketing at them, but contributing to them, almost participating in a conversation and a bunch of inside jokes, a bunch of inside code cues and stuff like that.

14:49And having sort of like this ongoing drip of little things that you do. No real different than you would do with like a campaign where it's like different levels of activations or different levels of communications, but you do it through the lens of cultural product. But this idea of focusing on smaller groups, creating sort of like cultural products for them, interesting activations that sort of like advance that subgroup's narrative or enriches the storytelling within that group, like sort of like British music culture, for example, was an entirely new concept to him. I mean, it was really fascinating.

15:24We've sort of continued the conversation about it since then. But in this algorithmically driven world of media where community, where memetic content, memetic artifacts and stuff like that are really driving most of the conversations and culture, this is like a very core thing. And it would be a big cultural shift within the organization of this tech company to start doing that. But I imagine even within Burberry, it would be a big shift. But the point that I want to make here really is, you know, the point that I made with him was as a tech company, as a titan of tech, he actually needed to look at fashion brands and what fashion brands were doing in this space because fashion brands rise or fall based on their ability to do this, which means they are the leading R &D labs of how to engage with culture.

16:13And from an outside, it can look frivolous and it can look like, oh, these are just stunty things. But if you're really in it and you're really paying attention to it, it is thoughtful. It is intentional. There are clear mechanics to it. There are clear strategies behind it. And I think a lot of people who want to create cultural resonance and relevance for their companies and their products can learn a lot from what the Burberrys of the world are doing, particularly Burberry, because they are leading that changeover from the way they used to do stuff to something that's actually working and resonating in culture.

16:46I love that you said that. Why do you think that I'm interested in fashion? I have a PhD for the love of God in sociology. So, you know, like that is, I was always interested in brands that have cultural influence. Fashion has outsized cultural influence regarding their budgets, the size of their companies, and how innovative they are in all other regards, except their cultural influence. so yes thank you for saying that and the other thing that is important what you said music culture it's music cultures and that's why it's not just David Bowie or Oasis or Queen or Nick Cave or others it's all of them and using different codes so it's parka from one like like, I don't know, like skin, leopard skin from another and snake skin from turd and really narrow the beetles from the fort.

17:45And that's, and going back to where we started is the archetypes. There is no anymore a mass consumer. They're just all those different micro consumers. And that is really important. Even when you're buying that, people are buying based on mood, based on different needs and based on different behaviors. And it's not just psychographics. People make a mistake. It's demographics plus. You don't figure out demographics and then psychographics. You can't separate the two anymore. Well, you're hitting on something that we'll get into in later episodes, but it's effectively a portfolio approach. So whether Gucci is with the 37 archetypes or Burberry talking to different British subcultures within the thing, it's never about one thing.

18:31It's never one monolithic approach given the fragmentation of culture, given the fragmentation of media and community and just different types and levels of conversations. Companies have to run a portfolio approach very similar to like an investment firm on this because you never know what's going to hit. And so very similar to a portfolio approach, you put a little money in a lot of different places as investments. When you start seeing a return on it, you shift some of that capital to continue investing where you got traction in a particular subculture or community and so on. But anyway, we'll get into all that in other episodes.

19:02Absolutely. And that's exactly like, first of all, portfolio of audiences, but also portfolio of cultural products. And I do think that it's relevant what everybody is doing, not putting all their eggs in one proverbial basket with just a campaign, but doing a lot of things. And I don't know if it's like, again, maybe we're projecting too much intention, but let's go to Ralph, Ralph floor and they've been doing amazing recently. They had their earnings called three weeks ago and I mean I know that they changed their annual outlook because their Q1 results have been so amazing. They're doing especially well in Asia where no one else is doing well.

19:43Everyone or luxury and premium brands are complaining about the headwinds. Burberry is doing amazing. So again And it's nothing that they've done well in the past couple of years, although all respect and all credit goes to the new CEO. It's what Ralph has been doing for the past, whatever, 50 years, which he understood you don't build a brand by doing just one thing, by just doing fashion. You build a world. You build a universe that has many doors into a brand. So he has fashion, he has purple label, he has polo, he has main collection, he has furniture, bedding, restaurant. He has double RL, which is a completely different aesthetic.

20:34I think he had paint for a while. Like you could buy Ralph Lauren paint. You name it. You name it. So that's basically like there is nothing that it's not like that is not. But the point is that is that consistency in the portfolio. it's a galaxy model and you have all those different it's a gravity of one strong point of view and you can basically add whatever you want that fits into that galaxy and into that world and like he has a cafe now and i was in madison avenue and it's crowded why is it crowded why are people buying ralph loren coffee because they want part of that lifestyle and how did that guy achieve American aristocracy which is a complete oxymoron in itself the four point of America is not to have aristocracy he sold his great Gatsby aristocracy he sold it as the wild west two aesthetics east coast west coast under the same brand it's it's it's genius so no wonder like why is he doing so well because the portfolio approach of completely market the product pyramid is complete.

21:43And image and merchandising. Go ahead. So I think the thing about Ralph Lauren, which is really interesting, is you could kind of look at it and say, well, they're actually just benefiting from a fashion cycle right now. Streetwear dominated everything for a long time. Even Ralph Lauren tried to do streetwear for a bit. And really, we're just coming back to preppy. It's part of the zeitgeist and sort of the rise of conservatism and stuff in the United States and things like that. But when you actually like unpack it and really look at the mechanics of what they're doing, they're doing something fundamentally different than just writing a fashion cycle.

22:21I mean, the fact that they are reselling vintage pieces at like a five times markup rate, which is like right now for them is about 7 % of that total revenue. And it's like growing a hundred percent annually. So people are reaching for more than just preppy fashion with Ralph Lauren. There's more of a story there. There's more of a new kind of value there. And I think this is something that you and I have talked a lot about, which is lots of times people end up talking about a product value from a utility or functional perspective, or even a monetary perspective. Like it's a high quality good at a low price, but there's all sorts of different types of value.

23:03There's social value. There's cultural value. There is emotional value and so on. And when you layer these things on top of a product, it increases the willingness to pay of the consumer because they see greater value. And I think that's like a really important concept in all of this for like listeners to know, which is consumers aren't price conscious as much as they're value conscious. They're not going to pay more for something that doesn't seem like it has a lot of value. And I think what Ralph Lauren has done over the decades so, so well. I mean, they are really among the best at it, despite having, you know, periods, financial periods of up and downs, is they have romanticized a fake but idealized vision of aristocratic life in the United States.

23:50And I would actually argue that Ralph Lauren has done as much for the mythos of American identity as someone like Norm Claussen, who's a photographer for the Marlboro Man campaign, did for the American West. you take sort of a versimilitude of a partial truth and you elevate it, you romanticize it, you idealize it. Like just in the example of Norm Claussen in the West, the West prior to Norm Claussen and his photography for the Marlboro Man campaign was really just cowboys and Indians, as they would say back in the day. It was a wild, wild West of these different groups fighting each other. But when Norm came in and started romanticizing the cowboy and really spent time with these people, understanding it, trying to figure out how to tell a story of those cowboys and capture the light, capture the color, the art direction.

24:39He created some of the most beautiful photography of the American West, but it wasn't documentary. It was an elevated aesthetic that is distinctly Norm Claussen and has since then become sort of the archetypal image of our romanticized idea of the West, whether it's Montana or Nevada or Utah or whatever it is. And I would argue like Ralph Lauren did the exact same thing for sort of American aristocratic culture that in a meritocracy of the United States where we're all aspiring to be better and have more and achieve more. He kind of painted the picture of what the top of the ladder looked like better than anyone else and romanticized it, but through the products made it accessible to everyone so that you could get a little piece of it when you went to a cafe, if you wanted your home to feel like you could paint in a ruffler and paint, or you could wear the clothes regardless if you were going to a black tie ball or going to hang out with chaps and stuff like that and be more casual and stuff.

25:41But it was this idea that he kept harvesting different products from and then commercializing it. And that kind of cultural value, that symbolic value that was baked into the product is not something you just, you know, have on day one. That is decades and decades of curating a story, which he always did. I read stories about how Ralph would be on photo shoots and he would literally like in his mind come up with stories about the models in the portrait of like why they were there, what they were doing, their relationship with each other. And in many cases, it comes through the photography and just makes it much more emotional than just a straight photo shoot of a beautiful person wearing the clothes.

26:22Always. And I'm really glad you brought all of that up, especially the aesthetic, because I think it's not about trend cycles. And with Ralf is always timelessness. And there is a video that I saw this morning when he says, oh, in Europe, you have people who drive cars that are 10, 15 years old. And here in America, you have like, oh, the car is two years old and the neighbors are going to be like, oh, that's an old car. You need a new car after two years. So there is that kind of consumerism that you always need to replace. And there is like this idea that you have like maybe a corduroy suit or a twit suit with like suede patches.

27:03And then that has that heritage. And that has that story. So the story in products themselves and the story in his advertising. And his advertising looks the same. 50 years ago. And now when you look what he shot at Spelman College a month ago, it's recognizably Ralph Lauren. The vibe, the atmosphere, the mood, even the models, the same. I want you to dig into that in a moment on the Spelman College thing, because the story of how they did their research of, even though it looked distinctively Ralph Lauren, they did their research as to what the models were wearing, where they were showing up.

27:42So it was deeply authentic. And And it wasn't just a shoot. It was like there was a real heritage, if you knew the heritage, in the photography. Absolutely. And you cannot, as someone who directed shoots, you cannot have that sort of photography that they mentioned if you don't have that story. For Banana, what you've seen, what you reacted so well was because there was a core of those people. Where are they going? What imagined world are they inhabiting? if we didn't have so many props, so many, the styling was not there. If we didn't have such a considered narrative, it wouldn't have looked like that.

28:23Like that is the story that has to come through the photographer, the setting. You can't just put a bunch of people together. You need to have that research. And I literally killed myself sort of to build that world. And it did come through. and I'm glad it did because there is a lot of work that goes into building a narrative world. But what I wanted to say, why is that aesthetics of time? Go ahead. Oh, no. I was just going to do a shout out to you that for anyone who's listening who hasn't seen Ana's work on revamping Banana Republic and taking it back to its luxury safari days, you absolutely should.

28:58I remember when it came out and I actually didn't know you were behind it. I saw it and I was like, oh, thank God they finally did this. This is so right. This looks so good. And then I found out you were behind it. And I was like, oh, this makes complete sense now. But I loved it. And so like, you know, people should totally look it up because it is exactly where Banana Republic should be. Thank you, Lee. Thank you. And then like just going back to that aesthetic and enduring power of Ralph Lauren is that that aesthetic was interpreted. So that is not one crappy monolithic aesthetic. It was taken in Japan and preserved and rift off.

29:40It was taken to Europe and rift off and worn differently upturned colors and so on. And here it was, if you can change it and reform it and make it your own and hip hop and rap and so appropriate, that's what ensures durability. And you and I are going to talk a lot about it because collaborations are a way to ensure brand durability and to kind of take what I said Damna has done, to take DNA and disperse that DNA. And that is what that aesthetic is. It doesn't matter if PrEP comes and goes because that PrEP is not the same PrEP that was 50 years ago, but it's still the DNA, the source code is the same, but it has many different interpretations.

30:33So it's like evolution is, it's going to last forever because of the combination. And I think that's super important. When you have aesthetic, you need to open it up because close aesthetic is dead aesthetic. Well, so I think, again, Ralph Lauren is a really good example here because when they were, let's call it in the trough of their financial performance because of the sort of the dominance of streetwear, they found their way into the streetwear conversation and created a whole line using their preppiness within the context of streetwear, sort of like predating ALD and what he's been doing with that line.

31:14But from everything that I remember, actually, the Ralph Lauren kind of streetwear approach was really well received from a fashion standpoint, from an insider standpoint. I don't think it sold that well, but it was a really good example of what you're talking about, about how they opened up their preppy aesthetics and began blending it with other stuff to keep it relevant, but still timeless and integrous to the Ralph Lauren brand. And that's why you have modern rep. And that's like you have rowing blazers and ALD. And that's why you had 1990s Kanye wearing. I know I'm not supposed to say Kanye, but you know, like you have all those different ways in.