The metaverse theme has been largely a technology investing theme thus far. But the next chapter for market participants is likely to be more about key first movers in other sectors building a footprint in the virtual universe to add a new channel of access and further monetize their IP and operations.
In other words, we have already seen juice for investors in tech plays involved in building the foundation of the metaverse from a functionality perspective – including Autodesk Inc. (Nasdaq:ADSK), NVIDIA Corporation (NASDAQ:NVDA), Qualcomm Inc. (Nasdaq:QCOM), Tencent Holdings Ltd. ADR (OTC US:TCEHY), and Roblox Corp. (NYSE:RBLX), among others.
But the laying of that foundation is just the first step. Once that foundation is in place, it’s “game on” for capitalism to thrive in a new domain of human interactive experience.
The next tranche of big winners will be those retailers, service providers, and entertainment brands that get ahead of the curve and beat their competitors into the new economic realm that Goldman Sachs recently called an $8 trillion opportunity on the revenue and monetization side.
With that in mind, we take a look below at a handful of new first-movers that could be the vanguard in their respective industries as we look around the corner to a new and more virtual business context in the years ahead.
Ralph Lauren Corp. (NYSE:RL) is an iconic fashion brand with designs on building a competitive advantage through establishing a footprint in the metaverse. The company has been adding non-fungible token elements to new collections and recently partnered with Roblox to launch The Ralph Lauren Winter Escape to allow players to purchase clothing to customize their avatars at virtual Polo Shops.
The firm offers apparel, accessories, home furnishings, and other licensed product. It operates through the following North America, Europe, and Asia segments.
Ralph Lauren Corp. (NYSE:RL) recently unveiled a groundbreaking apparel and textile innovation with Intelligent Insulation – a first-to-market, sustainably-minded temperature responsive fabric that adapts to cooler temperatures by expanding and creating a layer of insulation – that will be used to outfit Team USA for the Winter Games Opening Ceremonies.
“The development and introduction of Intelligent Insulation reimagines what is possible in the apparel landscape. For the first time, you can have a singular item that provides incredible versatility and style, for a variety of temperatures, changing the way we can holistically think about the makeup of a consumer’s closet. As a longtime partner of Team USA, Ralph Lauren is proud to continually provide innovative and purposeful apparel to the world’s best athletes,” David Lauren, Chief Branding and Innovation Officer, Ralph Lauren.
Market participants may want to pay attention to this stock. RL is a stock with a past that has featured a litany of sudden rips to the upside. What’s more, the company has registered increased average transaction volume recently, with the past month seeing 64% over what the stock has registered over the longer term.
Ralph Lauren Corp. (NYSE:RL) has a significant war chest ($3B) of cash on the books, which compares with about $2.4B in total current liabilities. One should also note that debt has been growing over recent quarters. RL is pulling in trailing 12-month revenues of $6B. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 26.7%.
B2Digital Inc (OTC US:BTDG) is another company with a strong real-world footprint that’s finding a new home in the metaverse as the first-mover among combat sports brands to have a serious virtual presence in the works. In fact, according to the company’s most recent release, the “B2 Fighting Series” is about to put on its first metaverse MMA event.
At the end of the day, this is just a new channel of content distribution. But it’s one that taps into an entirely new audience and offers the company the chance to make a qualitative leap up the industry ladder and into a pole position slot through innovation. The company’s model will likely evolve to feature both virtual MMA training and pay-per-view pro MMA events. But, for now, this facet for B2 will be about showcasing emerging MMA talent in Vegas City, Decentraland.
B2Digital Inc (OTC US:BTDG) isn’t all that speculative as a business. The company is already pulling in millions on the revenue side and has a top brand in the mixed martial arts space with years of experience putting on major events as the “farm league to the UFC”. It has also developed a strong model to drive sales through a gym/training segment that leverages its MMA media brand to drive sales and expansion. This model helped to drive triple-digit percentage growth over the past year in basically all of the company’s major metrics, including revenues, ticket sales, and gym memberships.
Now, the company is adding a serious metaverse dimension that could spark enthusiasm for BTDG shares: B2 announced this week that is upcoming major MMA event, “B2FS 153”, which will take place on March 26 in Dothan, Alabama, will be the Company’s first MMA event hosted live in the metaverse.
In addition to taking place live from the Dothan City Civic Center, and in addition to being broadcast live on Pay-Per-View and over the B2 Fighting Series apps on Amazon Fire TV and Apple TV, B2FS 153 will also take place virtually at the Aquarium Casino in the Vegas City district in Decentraland (-140,127).
B2Digital Inc (OTC US:BTDG) CEO Greg Bell noted, “We are pushing to the next level again by hosting one of the first top-tier professional combat sports events ever to take place live in the metaverse. I have been involved in the implementation of new and emerging technologies my entire career from airways to cable, cable to satellite, and satellite to internet TV. Connecting our B2 Fighting Series audience to the Meta Verse is staying ahead of the curve once gain. We have some extremely exciting matchups to showcase at B2FS 153, and our fighters know they will have an unprecedented breadth of coverage. Everyone who steps into that B2 cage on March 26 will know the bright lights of an even bigger stage could be just one spectacular KO away!”
Burberry Group PLC ADR (OTC US:BURBY) is another iconic luxury retailer that looks to be moving toward a metaverse presence. In August of last year, the company hitched up with Mythical Games to issue a vinyl NFT toy version of its signature Sharky B character. The move was a hit, with the company selling out of all 750 NFT units in less than a minute. We wouldn’t be surprised to see this angle develop and lead to a full metaverse strategy.
Burberry Group Plc operates as a holding company, manufactures, designs, and distributes apparels and accessories under the Burberry brand. It operates through its Retail/Wholesale and Licensing segments.
Burberry Group PLC ADR (OTC US:BURBY) recently announced its quarterly update on performance, noting strong results.
“Full-price sales continued to grow at a double-digit percentage compared with two years ago, accelerating from the previous quarter and reflecting a higher quality business. Our focus categories outerwear and leather goods performed strongly as we continued to attract new, younger consumers to the brand. Despite the ongoing challenges of the external environment, we are confident of finishing the year strongly and providing an excellent platform on which to build when our new CEO Jonathan Akeroyd joins in April.” Gerry Murphy, Chair.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action BURBY shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -17% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -19%.
Burberry Group PLC ADR (OTC US:BURBY) managed to rope in revenues totaling $1.2B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -5.4%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($1.2B against $764.3M).