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Speaker 2: Big news in a text bak Big news for Google
Speaker 2: and Apple on others. The US government proposal to break
Speaker 2: up Google did not get the support of the courts. Here,
Speaker 2: let's talk to an expert on this stuff. Jennifer Reed
Speaker 2: joins US here Senior Litigation. Now she covers all the
Speaker 2: antitrust stuff for Bloomberg Intelligence.
Speaker 3: It looks like this. Well, first of all, Jen, what
Speaker 3: did the court's rule?
Speaker 4: You know, really, the court aligned much more so with
Speaker 4: what Google proposed than what the Department of Justice proposed.
Speaker 4: No divestiture of Chrome or contingent divesture of Android because
Speaker 4: that was in there. Some data sharing, no exclusive agreements,
Speaker 4: some search syndication meaning search engine can basically provide results
Speaker 4: that just come straight from Google. Right, They're mimicking Google.
Speaker 4: The surprising thing though, here, and what was great for Apple,
Speaker 4: is that the judge said Google can could continue to
Speaker 4: pay for search default positions.
Speaker 3: That's with Apple.
Speaker 4: With Mozilla, it pays some OEMs to pre install Google
Speaker 4: Search on the Android phones that they group that they manufacture,
Speaker 4: and that I think was a really big surprise.
Speaker 5: How is this remedy consistent with the original ruling, with
Speaker 5: the original finding of the court.
Speaker 3: You know, I actually have a.
Speaker 4: Really big problem with aligning those two things because I
Speaker 4: don't think that it is. In terms of no chrome divestiture.
Speaker 4: I think it's very consistent. And Paul, you know, I've
Speaker 4: been on this show before and I've been saying for
Speaker 4: two years that there would not be a chrome divestiture
Speaker 4: ordered here. But where it's inconsistent is with this default position.
Speaker 4: Because having a monopoly is not illegal, but it's the
Speaker 4: conduct that maintains the monopoly that's exclusionary that is illegal.
Speaker 4: And what the judge found in that liability decision that
Speaker 4: the conduct that was illegal were the default agreements. Right,
Speaker 4: This was exclusionary. This kept other search engines from being
Speaker 4: able to grow and scale and get better. He's allowing
Speaker 4: those default positions to stay in place. Now it's a
Speaker 4: shorter term. It's only for one year. Theoretically, in one
Speaker 4: year or one year after that, other search engines that
Speaker 4: have improved can compete for that contract. But it's still
Speaker 4: odd to me that what is found to be legal
Speaker 4: is allowed to continue.
Speaker 3: Well, the stock market likes it.
Speaker 2: This is a company, it's got two point eight trillion
Speaker 2: dollars in market capital, it's up nine percent today. You
Speaker 2: just don't see that very often here. So what does
Speaker 2: this mean for just Silicon Valley in general? Can I
Speaker 2: sit back if I'm a CEO in Silicon Valiant saying, Hm,
Speaker 2: the courts are maybe a little bit more aligned with
Speaker 2: our industry how we think about the world than maybe
Speaker 2: the government.
Speaker 4: I would say that the way Silicon Valley can think
Speaker 4: about it is that this judge was cautious. And this
Speaker 4: judge did talk about needing to apply caution when you're
Speaker 4: dealing with tech markets and Silicon Valley companies because judges
Speaker 4: don't understand it want to impact the route, the innovation
Speaker 4: and the natural course of the industry, right, they don't
Speaker 4: want to distort that. And so it does suggest that
Speaker 4: it's more likely a judge is going to be cautious
Speaker 4: in future remedies for other cases. But what I think
Speaker 4: everybody has to keep in mind, because I've seen people
Speaker 4: talking about the fact that there's read through for some
Speaker 4: of these other monopolization cases. I don't really think that
Speaker 4: there is, because the facts are entirely different case by case,
Speaker 4: the markets are entirely different, and what made a divestitor
Speaker 4: remedy inappropriate here doesn't necessarily exist as a fact pattern.
Speaker 4: Let's say an FTCV Meta or usdojb Apple or the
Speaker 4: other DOJ case against Google in the ad tech space.
Speaker 4: Those are different cases with different facts, and I don't
Speaker 4: think that there's necessarily a read through that companies are
Speaker 4: safe from divestiture orders because of this one.
Speaker 5: Do we think that AI, the quickness and how it's
Speaker 5: developing played any kind of role in the judge's decision here?
Speaker 6: Oh?
Speaker 4: Absolutely. The judge even observed that in the liability hearing,
Speaker 4: which was now a year and a half or so ago,
Speaker 4: that AI barely came up at all other than by Google,
Speaker 4: it barely came up. But in the remedies hearing it
Speaker 4: was all about AI, and the witnesses were all AI,
Speaker 4: and he says it just shows in a year a
Speaker 4: year and a half how much things have changed, and
Speaker 4: the fact that you now have real competition to general
Speaker 4: search other than other general search engines, and I think
Speaker 4: that impacted him a lot.
Speaker 3: Stay with us.
Speaker 2: More from Bloomberg Intelligence coming up after this.
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Speaker 2: So in Bloomberg News, Scarlett, I think if you get
Speaker 2: a b a green Bee nextra story, that means it's
Speaker 2: like an exclusive or breaking news.
Speaker 5: Yeah, great, a scoop.
Speaker 3: Okay, so that's a good thing, right that.
Speaker 2: It's a very good thing, you know, Yeah, reporter, you
Speaker 2: know who gets a lot of those green Bee things.
Speaker 3: He's walking to the Sucio Stuve.
Speaker 2: Mark Germy and it's usually about like textuff Apple particular stuff.
Speaker 3: And he's got another one today. I don't know.
Speaker 2: Apple's lead artificial intelligence researcher for robotics has departed the
Speaker 2: company to join the meta platforms. I feel like I've
Speaker 2: read this kind of piece from Mark almost on a
Speaker 2: weekly basis.
Speaker 5: Over you mean Apple losing on AI.
Speaker 2: Yeah, I mean people kind of walking out the door.
Speaker 3: At some point, it's got to be a problem even
Speaker 3: for the apples of the word.
Speaker 2: Mark Irmont juines is he's a managing editor for Global
Speaker 2: Consumer Technology Bloomberg News. He's usually out there in LA.
Speaker 2: But something's going on there because Mark Herman's here in
Speaker 2: New York. Who was the other dude we had on
Speaker 2: the entertainment Dude Shaw he was. He's in New York.
Speaker 2: So I don't know what's going on out there in LA.
Speaker 2: Maybe they're cleaning offices or something.
Speaker 7: No, we both have both have colleagues here, are all right?
Speaker 3: All right? Mark talked to us about Apple.
Speaker 2: Is it a problem that they're losing some of their
Speaker 2: AI folks, the robotics folks, that kind of thing.
Speaker 3: You don't typically see that too often.
Speaker 7: It's only a problem if it impacts the consumer. And
Speaker 7: right now, Apple's AI efforts are impacting the consumer because
Speaker 7: Apple Intelligence and Siri lag very much in comparison to
Speaker 7: competing products on other platforms. Now, this can all be
Speaker 7: turned around, right You've got the ability for Apple to
Speaker 7: do partnerships. I predict there'll be some sort of big
Speaker 7: AI partnership for Apple. I've reported that they're in talks
Speaker 7: with Google and an AI partnership I've reported they've been in
Speaker 7: talks with Anthropic and Open Ai on potential AI partnerships.
Speaker 7: They get one of those done, it's a different ballgame.
Speaker 7: They buy a company I reported first reported over the
Speaker 7: summer that they've talked to Mistral reported that they talk
Speaker 7: to Perplexity. I don't expect either of those deals to
Speaker 7: get done, but that certainly shows you where.
Speaker 3: Their head's at.
Speaker 7: Okay, if this all gets turned around with a major
Speaker 7: new version of Siri next year, if they get the
Speaker 7: Apple Intelligence pipeline heading in the right direction, if they
Speaker 7: buy and hire the right LLLM people, they could be
Speaker 7: in pretty good shape. Don't forget. Apple has the best
Speaker 7: ECO system, they have the best hardware, and they're able
Speaker 7: to deploy new features and operating system upgrades faster than
Speaker 7: any other company. And so at the end of the day,
Speaker 7: this is still their game to lose because there are
Speaker 7: so many levers they can pull, especially with their cash balance,
Speaker 7: to turn this thing around.
Speaker 5: So why haven't they done any of those things so far?
Speaker 5: Why are they waiting? What's the hold up?
Speaker 7: Well, you know Apple, Unfortunately for them, they're very tied
Speaker 7: to a couple cycles, right. They have their spring cycle,
Speaker 7: and then they have their fall cycle. The fall cycle
Speaker 7: has been set for some time. There's really no changing that.
Speaker 7: That's locked and loaded. You'll see the introduction of those
Speaker 7: products and those software features next Tuesday at the iPhone
Speaker 7: seventeen launch event. The spring is really the next opportunity
Speaker 7: for there to be major new features, right, that's when
Speaker 7: they're going to roll out pretty big update to iOS
Speaker 7: twenty six called iOS twenty six point four. At that time,
Speaker 7: I expect them to release an overhauled version of Siri
Speaker 7: that are going to fix a lot of these issues.
Speaker 7: That's a lot total now though it is a long time. Yeah,
Speaker 7: it is a long time. And the truth of the
Speaker 7: matter is is that the AI space runs far more
Speaker 7: quickly than even the mobile space. You saw a lot
Speaker 7: of innovation in the smartphone space in the last two decades.
Speaker 7: AI is moving ten times as fast as.
Speaker 2: That, and they're aware of that. They're smart people. I
Speaker 2: guess they've made the decision that they're comfortable with their timing.
Speaker 2: Did they run the risk of making a fun fundamental
Speaker 2: error in their judgment of that timing.
Speaker 7: I don't think they're comfortable with the timing. I think
Speaker 7: that the timing was actually even further out. I wasn't
Speaker 7: expecting a major new version of SERI with incredible enhancements
Speaker 7: for consumers, probably not until the end of twenty six
Speaker 7: or sometime even at the tail end of twenty twenty seven.
Speaker 7: So this is going to be happening at least six
Speaker 7: to twelve months sooner than Apple had originally planned. They
Speaker 7: are probably one or two years away if they did
Speaker 7: nothing of starting to bleed share to competing smartphones with
Speaker 7: major AI features right now. Let to tell you the truth.
Speaker 7: We talk about AI all day every day. It's very
Speaker 7: important to the market. It's very important for the current
Speaker 7: technology age. Nobody's buying phones because of AI or not
Speaker 7: because of AI, but we are moving towards that, and
Speaker 7: that is going to happen. It's one or two years away,
Speaker 7: and so if they're not in good shape by then,
Speaker 7: they're going to start being impacted not only in terms
Speaker 7: of what we talk about, not only on Wall Street
Speaker 7: in the stock market, but in actual purchasing decisions by consumers,
Speaker 7: because right now, consumers only care about a few things
Speaker 7: when they buy new phones. They want to fix their
Speaker 7: broken screen, they want a better.
Speaker 5: Camera, and they don't want to pay too much for
Speaker 5: it either. That's the other thing. I mean, we'll incorporating
Speaker 5: all these AI g wiz factors bring up the price
Speaker 5: to fifteen hundred dollars for your standard phone. That's something
Speaker 5: that consumers may not stand for.
Speaker 7: Well, to your point, it's a very good point. You
Speaker 7: may see AI cost drivers increase because in many cases
Speaker 7: it requires, especially on Apple's side, improve chips, more processing power,
Speaker 7: improve battery life, improve cameras to take advantage of these things.
Speaker 7: So you may see the core technologies in these devices
Speaker 7: actually go up in price in order to enable these
Speaker 7: next set of AI features. Because unlike Google and Open AI,
Speaker 7: Apple's less reliant on the cloud. It's really a hybrid model.
Speaker 7: So to your point that the core hard is very
Speaker 7: important here too.
Speaker 2: The Google legal announcement here the ruling obviously very positive
Speaker 2: for Google, but also positive for Apple to stocks up.
Speaker 7: Yeah, it's a big deal for Apple, and some people
Speaker 7: have said this is a bigger deal for Apple than Google.
Speaker 7: Is complete nonsense. To be honest with you, Google had
Speaker 7: hundreds of billions of dollars at stake here.
Speaker 3: They could have lost.
Speaker 7: Their ability to strike search agreements at all, default search agreements.
Speaker 7: They're basically giving up some data and pretty much nothing else.
Speaker 7: So massive win for Google, big win for Apple, gigantic
Speaker 7: win for the technology industry.
Speaker 3: Because you ask you that, yeah, you have precedent.
Speaker 7: Here is set now, so you know, Meta is probably
Speaker 7: in better shape than they would have been otherwise. You know,
Speaker 7: Apple has this DOJ trial too. You know that we've
Speaker 7: Google just had its moment. Apple's going to have its
Speaker 7: moment in a couple of years, and this sets a
Speaker 7: lot of the precedent for that. So at this point
Speaker 7: it's anyone's guess, but I would assume that Apple's going
Speaker 7: to get off scott free.
Speaker 2: Also, I mean so, I mean again in Silicon Valley,
Speaker 2: I got to think that this feels like a little
Speaker 2: bit of a little bit of a reset on the
Speaker 2: regulatory front, which was front and center.
Speaker 3: A little bit of a reset.
Speaker 7: You know, the European Union is still you know, going
Speaker 7: fast and furious. But if you're a technology consumer, this
Speaker 7: is amazing news. If you work at a technology company,
Speaker 7: if you invest in a technology company, if you're into technology,
Speaker 7: this is great news. These companies are going to be
Speaker 7: able to innovate at the pace that they want to
Speaker 7: and you know, move fast. And break things.
Speaker 2: I guess stay with us. More from Bloomberg Intelligence coming
Speaker 2: up after this.
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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
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Speaker 5: Macy's on earnings, the department store chain lifted its outlook,
Speaker 5: but did take care to point out that the consumer
Speaker 5: is still feeling pretty cautious. So for more, let's bring
Speaker 5: in Emily Cohne. Emily is Bloomberg's consumer team leader, also
Speaker 5: a Big Red alum, graduated from Cornell University and was
Speaker 5: an editor at the Cornell Deli Sun to discuss Macy's
Speaker 5: latest results. So it sounds like a good news bad
Speaker 5: news kind of story, but investors are taking the good news.
Speaker 6: Here, Thanks Carlett. Yeah, maybe I would say cautiously optimistic.
Speaker 5: That's a favorite term of ou CEOs.
Speaker 3: I think this falls in.
Speaker 6: Line with what we've heard from other retailers. Shoppers are
Speaker 6: still shopping. Tony Spring told us on a caller earlier
Speaker 6: this morning. He used the word surgical, So they're being
Speaker 6: precise about what they're spending on being choosy. They called
Speaker 6: out home furnishings and apparel as strong sellers, also citing
Speaker 6: high demand for fine watches, jewelry, mattresses, so they are shopping.
Speaker 6: I think the main question I have is how long
Speaker 6: will this last?
Speaker 3: How promotional are some of these retailers. How promotions do
Speaker 3: they have to be? Because I know that goes right to
Speaker 3: the margin.
Speaker 6: Yeah, I mean, that's an interesting segue into Dollar Tree.
Speaker 6: I think Dollar Tree raised prices so far this year
Speaker 6: to offset the cost of tariffs, and shoppers felt that
Speaker 6: and that doesn't have that has a limit. There's only
Speaker 6: so far you can raise prices, and I think that
Speaker 6: is starting to eat away at their bottom line. They
Speaker 6: can't really raise prices that much anymore. I think these
Speaker 6: retailers are in a difficult spot. They want to keep
Speaker 6: let prices low because of how the consumer is feeling,
Speaker 6: but also their costs are up on account of tariffs.
Speaker 5: I would imagine Dollar Tree has a lot less cushion,
Speaker 5: as you say, to raise prices, given who they're targeting,
Speaker 5: and given how they're seeing a lot of higher end
Speaker 5: consumers trade down to Dollar Tree than a Macy's. Macy's
Speaker 5: did say explicitly that price increases are on the way, didn't.
Speaker 6: They Yes, they said that they've already started and that
Speaker 6: they're coming. But their sales are strong, and I think
Speaker 6: you know they're in the midst of a turnaround. There
Speaker 6: were signs that Tony Springs strategy is taking hold.
Speaker 3: Comp sales rose more at.
Speaker 6: His reimagined stores than they did overall. So I think
Speaker 6: that that's a good reason behind the stock jump this morning.
Speaker 3: What is a what's different about a quote unquote reimagine?
Speaker 5: Good question?
Speaker 6: I think that is a really good question. I think
Speaker 6: these are the stores where they believe that they can
Speaker 6: have the greatest edge. So they're they're doing a lot
Speaker 6: to reinvigorate sales. They're redesigning the stores, they're rethinking their assortment,
Speaker 6: and these are the stores that they say we should
Speaker 6: really watch. This is the future of Macy's.
Speaker 2: And Tony spring is also Cornell guy.
Speaker 5: Oh there you go, not big red gathering here.
Speaker 6: I didn't even know that.
Speaker 5: Let's put this into context. What we heard from Macy's,
Speaker 5: what we heard from Dollar Train, of course Dollar General
Speaker 5: earlier in the month, or was it this month or
Speaker 5: last last? In any case, what are we hearing from
Speaker 5: retailers overall, because investors are punishing some and rewarding others.
Speaker 5: Even though the message, I would say is fairly consistent
Speaker 5: that consumers are spending, they're just being really, really weary
Speaker 5: and careful. I think you nailed it.
Speaker 6: I think retailers continue to point to strong sales momentum.
Speaker 6: People are shopping even in the face of tariffs and
Speaker 6: threats of inflation. I think the question I have is
Speaker 6: knowing that retailers stock up months ahead of time, They
Speaker 6: had their inventory that they sold through now months ago,
Speaker 6: perhaps even before tariffs. I don't think we've really seen
Speaker 6: the full paths through of the costs of tariffs yet,
Speaker 6: and I think we'll continue to see that in the
Speaker 6: coming months, and especially during the all important holiday shopping season.
Speaker 3: Let's go there.
Speaker 2: What's Is there a consensus building to how the holiday
Speaker 2: season may shape up?
Speaker 6: It's still early. I think the outlook isn't great so far.
Speaker 6: Although Tony Spring did say that the back to school
Speaker 6: shopping season was he used the word good, and he
Speaker 6: said that back to school is generally a good bell
Speaker 6: weather for the holiday shopping season, So there was a
Speaker 6: slight note of optimism there, But not totally bullish.
Speaker 5: Emi you cover the consumer team or the team leader
Speaker 5: for this group, which company is most interesting is most
Speaker 5: exciting right now? Like who is leading the way in
Speaker 5: terms of being innovative and coming up with novel solutions
Speaker 5: to the persistent challenges that this industry faces.
Speaker 3: Yeah, for sure.
Speaker 6: I mean I think that discount retailers are really the
Speaker 6: ones to watch right now. So I'm really interested in
Speaker 6: TJ Max, Marshals. These are the companies that people really
Speaker 6: look to for deals. They have an interesting buying model
Speaker 6: where they're buying like the extra inventory that other retailers
Speaker 6: didn't sell, so they're a little bit isolated from the tariffs,
Speaker 6: and they also are benefiting from the fact that a
Speaker 6: lot of retailers bought a lot of stuff ahead of tariffs.
Speaker 6: I'm also really interested in the dollar stores. Dollar stores,
Speaker 6: you know, have a huge footprint there in these rural
Speaker 6: parts of the country that traditionally the big retailers don't reach.
Speaker 6: That has given them a big advantage. Now Amazon and
Speaker 6: Walmart are coming for those dollars from e commerce in
Speaker 6: a really big way. So I'm really interested in how
Speaker 6: these value retailers do.
Speaker 5: Any of those companies have a large online presence.
Speaker 6: While they are doing things like partnering with Uber Eats
Speaker 6: and delivery delivery services like that. But I think the
Speaker 6: main draw is like, if you're living in a rural
Speaker 6: part of the country, like the place that you go
Speaker 6: to buy a gallon of milk at the end of
Speaker 6: the day is your Dollar General, Like that's the store
Speaker 6: that you have. But increasingly Walmart and Amazon are looking
Speaker 6: to these rural areas as their last frontier.
Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
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Speaker 2: Dollar Tree profit outlook disappoints investors. Here let's go to
Speaker 2: Jen Bartash's Bloomberg Intelligence senior al. She covers a lot
Speaker 2: of the retail names for Bloomberg Intelligence. Jen, what did
Speaker 2: you learn from Dollar Tree?
Speaker 8: Yeah, it's an interesting It's an interesting takeaway from Dollar
Speaker 8: Tree because a lot of what they talked about was
Speaker 8: bringing in hire income households. That's an echoing of what
Speaker 8: we've heard from a couple of the retailers, most notably Walmart.
Speaker 8: But at the same time, they're staying super conservative and so,
Speaker 8: you know, although they had a much stronger than expected quarter,
Speaker 8: I think there's a lot of anticipation that the second
Speaker 8: half of the year might be a lot harder for them.
Speaker 5: Right The outlook for this quarter on its own kind
Speaker 5: of underwhelmed investor, and a lot of that, the company
Speaker 5: says is tied to terror related costs.
Speaker 8: Exactly Scarlett and what they're talking about, and this is
Speaker 8: something that we're seeing across the retail sector broadly, is
Speaker 8: that the costs of tariffs have started to come in,
Speaker 8: but they really haven't fully hit yet. A lot of
Speaker 8: retailers are selling through inventory they bought when tariffs were
Speaker 8: at a different rate were not there, and as they're
Speaker 8: replenishing that inventory, it's becoming more expensive. It's getting harder
Speaker 8: to mitigate those costs, and they're starting to see some
Speaker 8: targeted price increases being passed through to consumers. We think
Speaker 8: that's only going to accelerate as we get into the
Speaker 8: second half of the year.
Speaker 2: So have you is there any consensus building at jenas
Speaker 2: to how much retailers are going to pass through terror
Speaker 2: related cost increases to consumers are kind of a rule
Speaker 2: of thumb being created.
Speaker 8: You know, I think for the most part, we're looking at,
Speaker 8: you know, between eighty and ninety percent can be mitigated
Speaker 8: by retailers at this point in time. Now, that does
Speaker 8: change whenever the tariff landscape changes. So when tariffs for
Speaker 8: China are you know, or for India, we're at ten percent,
Speaker 8: that was easy to forecast. When they jump to fifty percent,
Speaker 8: that gets a lot harder. And we still don't have
Speaker 8: a final number for China, and so there's still some
Speaker 8: uncertainty out there, but there's there's pretty good confidence that
Speaker 8: between negotiating with suppliers, diversifying sources and things like that,
Speaker 8: that they can mitigate a large portion of the cost.
Speaker 8: But it's just a question of how long they consistain
Speaker 8: that mitigation before inevitably they start having to pass a
Speaker 8: little bit of price through.
Speaker 5: And a lot of that is kind of unanswerable right
Speaker 5: now until they go through the whole process. Jen remind
Speaker 5: us of where Dollar Tree is at with the divestitu
Speaker 5: or the shedding of the family dollar chain that did
Speaker 5: not work out as planned, is that completely off its books?
Speaker 3: Now it is.
Speaker 8: They completed the transaction on July fifth, so it's completely
Speaker 8: off the books. It gives them a lot of liberty
Speaker 8: to really focus on the business and really drive growth
Speaker 8: and what's always been the bigger part of their business.
Speaker 8: And there's a lot of opportunity out there. You know,
Speaker 8: they talk about gaining share and there there have been
Speaker 8: some retailers that have gone under in the last you know,
Speaker 8: year and a half that that makes it a great
Speaker 8: opportunity for them, as a more focused organization to take
Speaker 8: advantage of that. And that would be Party City to
Speaker 8: a lesser extent, Joan Fabrics. You know, these these create
Speaker 8: present opportunities for Dollar Tree to really execute on their
Speaker 8: strategy and hopefully continue driving some top line growth.
Speaker 2: So what's the what's kind of the expectation here for
Speaker 2: for just kind of the holiday season broadly defined?
Speaker 8: Jen, Yeah, for for the holidays, I think, you know,
Speaker 8: the retailers all say that they're pretty well prepared. You know,
Speaker 8: consumers I think will be ready to spend, but they'll
Speaker 8: be selective. We're we're expecting that once inventory is sold out,
Speaker 8: there won't be a lot of reordering. So this is
Speaker 8: a holiday season where if there's something special if you
Speaker 8: want to get you might want to get it because
Speaker 8: once it's gone, it might not get replenished or replenished
Speaker 8: quickly or at the same price. So sorry you seeking
Speaker 8: that sort of behavior.
Speaker 5: So the takeaway for this holiday season is you see it,
Speaker 5: you snap it up because it may not come back.
Speaker 5: Will it ever come back? I mean, you have the
Speaker 5: removal of the Deminimus exemption, So consumers are losing a
Speaker 5: lot of their DTC access that they once counted on,
Speaker 5: and these retailers need to think very carefully about how
Speaker 5: they're going to restock and rebuild their inventory. That's that's
Speaker 5: again I hate to use the word sobering again, but
Speaker 5: it's a whole new mindset for consumers.
Speaker 8: It is. It's a new mindset for retailers as well,
Speaker 8: where we've already seen them kind of scale back on
Speaker 8: some of their ordering. They had a lot of orders
Speaker 8: that were canceled waiting on tariffs. Now they've kind of
Speaker 8: put some through. But what we're hearing is that they're
Speaker 8: very closely managing their inventory. And so you know, if
Speaker 8: a hot new toy sells out, you know, like early November,
Speaker 8: you know they may or may not be getting more
Speaker 8: in It's gonna be an interesting holiday season this year,
Speaker 8: for sure.
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