WEBVTT - Surveillance: Black Friday's Massive Move to Online 0:00:00.040 --> 0:00:02.640 Who you put your trust in matters. Investors have put 0:00:02.680 --> 0:00:07.000 their trust and independent registered investment advisors to the two 0:00:07.040 --> 0:00:10.680 and four trillion dollars. Why learn more and find your 0:00:10.760 --> 0:00:26.360 independent advisor dot com. Welcome to the Bloomberg Surveillance Podcast. 0:00:26.760 --> 0:00:30.480 I'm Tom Keene with David Gura. Daily we bring you 0:00:30.520 --> 0:00:35.560 insight from the best in economics, finance, investment, and international relations. 0:00:35.960 --> 0:00:40.559 Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot com, and 0:00:40.640 --> 0:00:47.880 of course on the Bloomberg Yeah, I'm Francine Lack. What 0:00:48.080 --> 0:00:51.840 in for David or Tom Keene? We're not sure. I'm 0:00:51.840 --> 0:00:54.520 with Michael McKee. Mike, we got to choose who we 0:00:54.560 --> 0:00:57.880 are today. Are you worried about I'm not, but in 0:00:57.920 --> 0:01:00.960 my mind I am everywhere I go to Keane is 0:01:01.080 --> 0:01:03.640 in my mind. Let's have a look at the markets. 0:01:04.319 --> 0:01:06.040 That's what it is, a little bit scary, It's a 0:01:06.120 --> 0:01:08.319 little bit freaky. This is what Tom would do. So 0:01:08.400 --> 0:01:10.880 he'd open it up and look at the dollar pairing 0:01:11.240 --> 0:01:13.039 some of the weekly advance that was spurred by the 0:01:13.080 --> 0:01:16.200 prospect of hire u S interest rates, gold also rebounding 0:01:16.240 --> 0:01:20.480 from a nine month Mike, I know you're watching, of course, 0:01:20.520 --> 0:01:24.119 Black Friday, and the shift for me is really incredibly 0:01:24.160 --> 0:01:27.240 Onto Mobile and the online retailers doing a lot better 0:01:27.240 --> 0:01:29.959 than they did in previous years. Right. Yeah, We've been 0:01:29.959 --> 0:01:32.959 watching live pictures of various retailers coming in because it's 0:01:33.000 --> 0:01:35.200 Black Friday, and you send your cameras out to do that, 0:01:35.280 --> 0:01:39.640 and stories don't look all that crowded. But um, why 0:01:39.760 --> 0:01:41.800 would you This one I don't understand is why you 0:01:41.840 --> 0:01:44.840 would go to a store when you can do the 0:01:44.880 --> 0:01:47.040 same thing and get the same bargains by sitting at 0:01:47.080 --> 0:01:50.000 home and not getting whacked in the head by somebody 0:01:50.040 --> 0:01:53.440 grabbing a TV set and swinging it around. Um, I 0:01:53.440 --> 0:01:56.760 don't get that. I did not realize that it could 0:01:56.800 --> 0:02:00.280 be that violent. Actually remember seeing in the past a 0:02:00.320 --> 0:02:02.240 lot of you know, when the stores open, people actually 0:02:02.240 --> 0:02:04.560 fighting for stuff. I'm a little bit more old school, Mike. 0:02:04.720 --> 0:02:06.800 I like going in shops because I get a feel 0:02:06.840 --> 0:02:08.480 for the things I want to buy, and then I 0:02:08.520 --> 0:02:11.360 can't deal with the hassle of returning them. Let's get 0:02:11.360 --> 0:02:14.240 to someone who knows a thing or two about retail. 0:02:14.280 --> 0:02:18.080 He is Howard Davidovits from Davidovitz Associates. He is chairman there. 0:02:18.120 --> 0:02:21.160 Howard Great to speak to you on this Black Friday. 0:02:21.400 --> 0:02:24.440 Black Friday a success, but are people really moving to 0:02:24.520 --> 0:02:31.120 online massively? Massively? There's a massive moved online. And the 0:02:31.160 --> 0:02:36.519 total picture is, uh, we're so overstowed. We have three 0:02:36.840 --> 0:02:41.800 times the amount of sales of square feet three times 0:02:42.360 --> 0:02:46.280 per person in the United States than any other country England, Japan, 0:02:46.520 --> 0:02:51.080 you mentioned in Canada. We're overstewed and the hottest area 0:02:51.240 --> 0:02:54.840 is online. Now you put those two things together and 0:02:54.919 --> 0:02:59.000 you're going to be in for a massive readjustment in 0:02:59.120 --> 0:03:02.880 retail space and shopping center space. And that's what's going 0:03:02.919 --> 0:03:07.520 on with major retailers across the board closing stores and 0:03:07.600 --> 0:03:10.639 downsizing stores, and that's what's going on. Yeah, but it 0:03:10.800 --> 0:03:14.160 is is anybody gonna can you still make money? Put 0:03:14.200 --> 0:03:16.720 it that way, if you're a retailer, are you gonna 0:03:16.760 --> 0:03:18.960 make money? Or are we gonna see people even if 0:03:19.000 --> 0:03:20.799 they're trying to move people online? A We're gonna see 0:03:20.800 --> 0:03:25.200 people going out of business. We're going to massively see 0:03:25.240 --> 0:03:28.600 people going out of business, as we've seen and as 0:03:28.680 --> 0:03:32.840 we will continue to see malls closing, stores closing, and 0:03:33.000 --> 0:03:38.800 folks going out of business. Departments, well, the largest department 0:03:38.840 --> 0:03:43.200 store in the United States. See here's they're in liquidation. 0:03:43.280 --> 0:03:45.640 What do you want them to do? Came out with 0:03:45.760 --> 0:03:49.520 the largest discounted They were ten times bigger than Walmart. 0:03:50.760 --> 0:03:53.560 They're liquid dating. I mean, if you go and you 0:03:53.840 --> 0:03:57.200 and the list goes on and on and on. If 0:03:57.200 --> 0:04:00.400 you're in the office supply business, you know, off the 0:04:00.400 --> 0:04:04.200 there's just so many people in trouble out there, and 0:04:04.240 --> 0:04:08.520 it's because we're overstowed and the growth areas online. That 0:04:08.720 --> 0:04:12.600 is a deadly combination. All right, But Howard, is this 0:04:12.800 --> 0:04:15.560 because of cheap money out there so we've kept, you know, 0:04:15.680 --> 0:04:20.479 zombie retailers alive. Or do we actually think that because 0:04:20.520 --> 0:04:23.839 Donald Trump is coming on January twenties and he wants 0:04:23.920 --> 0:04:27.200 to remove the US a little bit from globalization, that 0:04:27.240 --> 0:04:29.520 actually it's going to be so much more difficult for 0:04:29.600 --> 0:04:32.600 you guys to import cheap prices cheap clothing from the 0:04:32.640 --> 0:04:35.400 rest of the world, so they'll automatically have to go under. 0:04:36.080 --> 0:04:38.080 First of all, it says nothing to do with Donald 0:04:38.120 --> 0:04:40.320 Trump or anything else. This has been going on for 0:04:40.400 --> 0:04:45.400 some time. What happened is retail is over expanded, and 0:04:45.520 --> 0:04:49.159 one reason they did is with the craziness of Wall Street, 0:04:49.200 --> 0:04:52.680 where you have to show growth. What they don't like you, 0:04:52.680 --> 0:04:56.279 you got to show growth. So they all over expand 0:04:56.320 --> 0:04:58.680 that cheap money was a major part of it. When 0:04:58.760 --> 0:05:03.279 it comes to real estate and shopping centers, the time 0:05:03.360 --> 0:05:07.240 is coming. We're gonna have fifty billion dollars up for 0:05:07.320 --> 0:05:11.520 refinancing in the next eighteen months, and then forty billion 0:05:11.560 --> 0:05:15.640 more f that. At those c MBS loans. There is 0:05:15.720 --> 0:05:18.000 going to be trouble because the banks are going to 0:05:18.080 --> 0:05:21.719 be very tough and the lenders are on renewals and 0:05:21.839 --> 0:05:26.560 new and new structures. So and you're gonna have shopping 0:05:26.560 --> 0:05:29.679 center developers just hand the shopping center back to the banks. 0:05:29.920 --> 0:05:32.400 The loan is secured with the property, they're gonna say 0:05:32.440 --> 0:05:35.680 goodbye and good luck. You're gonna see this everywhere because 0:05:35.720 --> 0:05:38.400 this is what's going on. Well, it is the same 0:05:38.440 --> 0:05:44.040 thing happening with small businesses, the local retailers as you're 0:05:44.080 --> 0:05:47.279 talking about with the big guys with the Yeah, the 0:05:47.400 --> 0:05:50.320 local retailers, many of them are getting crushed. You know, 0:05:50.360 --> 0:05:52.719 when I started in this business, I traveled a gross 0:05:52.760 --> 0:05:57.440 America and I dealt with independent department stores in almost 0:05:57.480 --> 0:06:01.080 every state affirmed in either way. You know how many 0:06:01.080 --> 0:06:04.800 of them are left none. There are literally you can 0:06:04.920 --> 0:06:08.719 count them on one hand. You don't have any more 0:06:08.760 --> 0:06:12.160 independent department stores in America. Wherever I used to go, 0:06:12.880 --> 0:06:16.440 Think about New York, we had all we had Altmans, 0:06:16.520 --> 0:06:20.080 we had Gimbals, which we had six quarterbacks. We had 0:06:20.160 --> 0:06:25.160 six independent department stores. They're all gone Best and Cup 0:06:25.200 --> 0:06:30.680 they're all out. That's true in every single state. This 0:06:30.760 --> 0:06:34.839 is what's gone on already, and we're just beginning. The 0:06:35.000 --> 0:06:38.880 problem is going to get worse. We're overstored. This is 0:06:38.920 --> 0:06:43.640 the number one retail problem in the United States. Overstored, 0:06:44.000 --> 0:06:48.800 and the fastest growing area is online. How can you 0:06:49.000 --> 0:06:53.960 possibly put those things together? You got a mess, all right? 0:06:54.000 --> 0:06:55.719 But how I mean? This is true in the UK, 0:06:55.920 --> 0:06:58.320 This is true in a lot of our Western societies. 0:06:58.360 --> 0:07:00.599 That the big guys come over, they take office space, 0:07:00.640 --> 0:07:03.960 they can pay so much more than the independent retailer. 0:07:04.040 --> 0:07:09.680 Do you ever see independent retailers coming back? Independent retailers 0:07:09.720 --> 0:07:12.880 will always find the way to come back because there 0:07:13.000 --> 0:07:17.920 is genius and independent entrepreneurs, and I see it everywhere 0:07:17.960 --> 0:07:20.600 I can look. Take New York City. We used to 0:07:20.640 --> 0:07:24.520 have independent uh drug stores on every block with the 0:07:24.600 --> 0:07:27.080 name of the owner. Now or and none, because of 0:07:27.120 --> 0:07:31.200 course all either Walgreens or CBS are right. Eight owns 0:07:31.240 --> 0:07:35.480 everything right to know. Now what what I see now 0:07:35.760 --> 0:07:41.160 are guys opening up little stores without a pharmacist, selling 0:07:41.200 --> 0:07:44.240 health and beauty aids all over the place. And they 0:07:44.280 --> 0:07:47.960 look like they're very profitable. They're narrow spaces, very cheap. 0:07:48.320 --> 0:07:50.800 The owner is there with two employees and they look 0:07:50.840 --> 0:07:53.640 to me like they're really doing well and they're selling 0:07:53.760 --> 0:07:57.720 lots of cosmetics. They know exactly what they do. They're 0:07:57.760 --> 0:08:03.400 selling it for less entreprene door is always find a way, 0:08:03.400 --> 0:08:06.280 but it's harder and harder. Let's talk a little bit 0:08:06.320 --> 0:08:11.280 about a Black Friday itself. This used to be huge. 0:08:10.840 --> 0:08:15.160 A certain presidential candiate would say, uh, and now everybody 0:08:15.280 --> 0:08:18.480 serif why do I want to do that? Well, there 0:08:18.520 --> 0:08:23.360 are several reasons. Number one, Black Friday starts way earlier 0:08:24.160 --> 0:08:27.400 that and that is out of desperation on the part 0:08:27.400 --> 0:08:29.960 of retail is in a fight for market share and 0:08:30.080 --> 0:08:34.760 the mighty Amazon. They all started weeks ago with all 0:08:34.760 --> 0:08:37.400 of the sales for Black Friday, and I mean it's 0:08:37.520 --> 0:08:42.480 it's amazing Amazon Prime. So it started a long time ago. 0:08:43.080 --> 0:08:46.320 Now we have Cyber Monday, which takes up a lot 0:08:46.360 --> 0:08:50.080 of space, which is a huge day. We have Thanksgiving open. 0:08:50.200 --> 0:08:52.400 We got all of his stuff going on, and all 0:08:52.440 --> 0:08:56.320 of that takes away from Black Friday? So is Black 0:08:56.360 --> 0:08:59.960 Friday still are very important? That yes, doesn't have any 0:09:00.080 --> 0:09:03.160 we near the impact it used to have. No, and 0:09:03.280 --> 0:09:07.199 you said something like very important before that, I didn't 0:09:07.240 --> 0:09:10.920 miss you said there were there was a report from 0:09:11.040 --> 0:09:15.160 Target at Walmart on TVs. You know what that means? 0:09:15.240 --> 0:09:18.440 The best Buy is going to do great. That is 0:09:18.480 --> 0:09:22.080 the interpretation of what I heard from you. And best 0:09:22.120 --> 0:09:25.640 Buy has been rolling anyway, look for a very good 0:09:25.720 --> 0:09:30.080 performance from best Buy. Why do people buy TVs? Now? 0:09:31.280 --> 0:09:33.360 This can be the cheapest of the year. If if 0:09:33.400 --> 0:09:35.520 everybody knows you're gonna go buy a TV, I jack 0:09:35.640 --> 0:09:38.959 up the price. Nobody can jack up the price. It 0:09:39.040 --> 0:09:43.240 here's the reason this too much product in too many places. 0:09:43.400 --> 0:09:47.680 You that's what you can do. Nobody has pricing power 0:09:47.920 --> 0:09:52.839 unless your product is unique, no one. So if everybody 0:09:52.920 --> 0:09:57.319 is selling the same TV, that means the only difference 0:09:57.559 --> 0:10:02.480 is price. That drives the a price down. But Howard, 0:10:03.640 --> 0:10:07.880 this is a crazy business model. This won't work long term, right? 0:10:08.679 --> 0:10:12.120 Why I am saying there is gonna be Carne. Do 0:10:12.120 --> 0:10:14.240 you know how many electronics chains we used to have 0:10:14.280 --> 0:10:19.840 in America? You remember CompUSA? Remember Radio Shack? Remember Ultimate 0:10:19.880 --> 0:10:23.320 Electronics circuits? Do you remember all of them? By the way, 0:10:23.360 --> 0:10:28.800 they're all gone. They're all gone. Best Buy is almost 0:10:28.880 --> 0:10:33.839 the only one left standing out of the seventeen we had. 0:10:34.080 --> 0:10:37.680 Welcome to the Club. We are talking Black Friday and 0:10:37.920 --> 0:10:42.319 retail with Howard Davidovitz and Howard Dividov's is coming to us, 0:10:42.400 --> 0:10:48.360 as I understand it, live from Trump Tower, Howard, Absolutely, 0:10:49.040 --> 0:10:53.199 you live in the home of the President elect. Correct. 0:10:54.080 --> 0:10:57.560 What's it like to live in a tower that is 0:10:57.760 --> 0:11:02.680 basically a military outpost? Now it seems, well, I'm my 0:11:02.840 --> 0:11:05.960 reaction is there's no military I mean, I go in 0:11:06.040 --> 0:11:07.960 and that and I put my stuff through the machine. 0:11:08.000 --> 0:11:12.600 It takes one second and that's it. So I I 0:11:12.640 --> 0:11:14.959 don't see a lot I'm in any outpost. However, there 0:11:15.000 --> 0:11:16.840 are a lot of people in the building who do 0:11:16.960 --> 0:11:22.160 feel exactly as you just said, a military outpost. I 0:11:22.200 --> 0:11:26.079 think the NYPD has been absolutely sensational, and so is 0:11:26.120 --> 0:11:30.560 the Secret Service. Their total gentleman and general ladies and 0:11:31.200 --> 0:11:34.280 have been doing the job magnificently and really don't bother 0:11:34.440 --> 0:11:38.360 us very much at all. That's my personal reaction. However, 0:11:38.880 --> 0:11:43.360 if I was one of the stores like Gucci, Tiffany's, Nike, 0:11:43.559 --> 0:11:47.760 or one of those stores that that if you're a customer, 0:11:48.760 --> 0:11:51.480 a lot of customers are going to be turned off ongoing. 0:11:51.559 --> 0:11:55.680 And that's pretty heavy duty because ten percent of Tiffany's 0:11:55.720 --> 0:11:59.680 businesses in their flagship store on Fifth Avenue, so that 0:11:59.760 --> 0:12:03.080 could be a problem for some stores. And that's where 0:12:03.120 --> 0:12:05.480 I see the problem as far as the residents go, 0:12:06.360 --> 0:12:09.640 at least from my perception. In my reality, we just 0:12:09.720 --> 0:12:11.640 go in and out. If you want to make a 0:12:11.640 --> 0:12:14.040 big deal out of it, good luck. But to me, 0:12:14.120 --> 0:12:18.120 it's no big deal. Yeah, I am fascinated, Howard. And actually, 0:12:18.400 --> 0:12:21.000 when Tom Keene was starting to talk about Tiffany's and 0:12:21.040 --> 0:12:23.280 Gucci and how their head, I was laughing it off 0:12:23.320 --> 0:12:26.080 at the start, right, But you really believe that tiffany 0:12:26.280 --> 0:12:29.720 could get hurt because they're really next door to Donald Trump. 0:12:30.280 --> 0:12:33.040 It's not because the Donald Trump and nothing that I 0:12:33.120 --> 0:12:38.400 mean what they they have a store in a location 0:12:39.200 --> 0:12:45.400 where is kind of security that's gonna turn off I 0:12:45.440 --> 0:12:48.920 think certain customers from going in because it's a pain 0:12:49.000 --> 0:12:54.360 in the neck. So I think they're gonna lose potential business, 0:12:55.200 --> 0:12:57.600 and I think that will be hurtful. So I think 0:12:57.640 --> 0:13:03.480 that would be part of this total picture. Go ahead. No, 0:13:04.000 --> 0:13:06.320 I was curious hard when we know we've never seen 0:13:06.320 --> 0:13:08.760 a president like this, so we're expecting the cummings and 0:13:08.800 --> 0:13:15.679 goings to last until January. We understand that. Actually, no, no, 0:13:15.840 --> 0:13:19.480 it's gonna go. He's gonna come home weekends. First of all, 0:13:20.559 --> 0:13:22.920 he loves the building. Look, George Bush was going to 0:13:23.040 --> 0:13:26.880 Texas for months, if you recall, for months and operating 0:13:26.880 --> 0:13:30.200 out of his Texas home because that's what he liked. No, no, no, 0:13:30.440 --> 0:13:33.880 I mean I think this is gonna go on for 0:13:33.920 --> 0:13:36.440 four or eight years, and I think everybody is going 0:13:36.520 --> 0:13:39.000 to get used to it, and all the hysteria will end, 0:13:39.840 --> 0:13:43.960 and everybody will adjust. As Americans, we adjust to things 0:13:44.559 --> 0:13:46.839 and and that, and that's what will happen. I just 0:13:46.960 --> 0:13:51.400 don't think it's that big of a deal for me, 0:13:51.679 --> 0:13:56.720 and yet Howard uh. This is for those who don't know. 0:13:57.120 --> 0:14:00.280 Trump Tower is between fifty six and fifty seven on 0:14:00.440 --> 0:14:04.960 Fifth Avenue, which basically the shopping section part of Fifth 0:14:05.000 --> 0:14:08.240 Avenue starts at fifty and goes down, So you've got 0:14:08.240 --> 0:14:12.440 this security courting that cut cuts Fifth Avenue down to 0:14:12.600 --> 0:14:15.760 one or two lanes when he's there. Does that change 0:14:15.840 --> 0:14:20.160 the whole dynamic of Fifth Avenue itself? I do well. 0:14:20.200 --> 0:14:22.280 There are two dimensions to it. One, it's the most 0:14:22.320 --> 0:14:26.160 expensive space on a planet Earth, five thousand dollars of 0:14:26.200 --> 0:14:30.240 square foot from fort nine to fifty seventh on Fifth. 0:14:30.840 --> 0:14:34.240 So the retail stores are paying the highest rent on 0:14:34.320 --> 0:14:39.680 the planet Earth, highest rent on the planet Earth. Now, 0:14:39.720 --> 0:14:42.240 when you pay the highest rent on the planet Earth, 0:14:42.480 --> 0:14:46.360 you expect to be able to do business. There is 0:14:46.520 --> 0:14:50.880 an obstruction to do we business and I think this 0:14:50.960 --> 0:14:56.280 is going to hurt certain stores and it's unfortunate and 0:14:56.680 --> 0:15:01.040 it's part of what's going on, and that's it. So 0:15:01.160 --> 0:15:03.080 that has to live with it. They'll have to make 0:15:03.120 --> 0:15:05.680 an adjustment in their rent, they'll have to do something 0:15:05.720 --> 0:15:11.440 to litigate, they'll do something. They're going to lose business, okay, 0:15:11.440 --> 0:15:13.960 but can they not make up for that business elsewhere? 0:15:14.040 --> 0:15:15.720 I don't know if they have other stores that are 0:15:15.760 --> 0:15:20.400 not These is a worldwide I said that that stores 0:15:20.480 --> 0:15:23.320 ten percent of their business, which is huge because they've 0:15:23.360 --> 0:15:26.760 got stores everywhere all over. There was a worldwide company 0:15:26.960 --> 0:15:31.600 they've got stores all across America. Of course, that's you know, 0:15:31.800 --> 0:15:35.640 one of the store Nike is a giant organization, Gucci 0:15:35.880 --> 0:15:42.080 that LVMH. I mean, these are giant organizations that will 0:15:42.200 --> 0:15:48.840 suffer just in that location. How divids from Divinos An Associates. 0:15:48.880 --> 0:15:52.000 Thank you very much for joining us today from Chuck Tower. 0:16:03.760 --> 0:16:06.320 Now we're hearing it's black of course we know that 0:16:06.360 --> 0:16:09.160 it's Black Friday, but holiday prices, well, that war is 0:16:09.200 --> 0:16:13.640 intensifying as companies such as Walmart and Target are pursuing Amazon. 0:16:13.760 --> 0:16:16.360 So Mike, let's continue the retail conversation. Let's bring in 0:16:16.400 --> 0:16:20.560 a Jerry Storage. He is Hudson Bay CEO on Black Friday. Jerry, 0:16:20.600 --> 0:16:23.040 great to have you here in the program. To her website. 0:16:23.360 --> 0:16:26.040 I'm looking at the sales you're on offer, They're great. 0:16:26.120 --> 0:16:28.520 Is it not too much? How much of an inconvenience 0:16:28.640 --> 0:16:31.080 is it? If you're a retail a person, then what 0:16:31.200 --> 0:16:33.560 will fly off the shelves or what you will sell 0:16:33.560 --> 0:16:37.400 online is actually the blockbusters. Well, look, this is Black Friday, 0:16:37.600 --> 0:16:41.360 and Black Friday is an American institution, and Black Friday 0:16:41.440 --> 0:16:45.320 is totally about the deals. Everyone knows that. That's that's 0:16:45.360 --> 0:16:47.520 why it exists. It's the super Bowl of retail and 0:16:47.560 --> 0:16:49.640 you have to bring your top game. People don't go 0:16:49.680 --> 0:16:52.480 to stores on Black Friday to buy things at regular price. 0:16:52.560 --> 0:16:55.480 That's a very different time. If you're reconsumer, they come 0:16:55.520 --> 0:16:58.160 to get the bargains and they're having fun doing it. 0:16:58.520 --> 0:17:00.360 You know, it's a treasure hunt, So you have to 0:17:00.360 --> 0:17:02.240 have great bargets. So like a Lord and Taylor with 0:17:02.320 --> 0:17:05.919 Kashma swear for th it is just flying. I mean, 0:17:05.920 --> 0:17:09.040 people are so excited to snag a Kashma whatever tht 0:17:09.440 --> 0:17:12.360 get that online. You can also get online. Every merchandise 0:17:12.400 --> 0:17:15.159 offer we have for Black Friday is also you've been 0:17:15.240 --> 0:17:19.080 visiting stores, your stores, you have, uh, Lord and Taylor, 0:17:19.080 --> 0:17:22.480 You've got Sacks, You've got a whole bunch of department 0:17:22.520 --> 0:17:26.760 stores around the country. Have you noticed fewer people I'm 0:17:26.760 --> 0:17:30.800 not saying lower sales, I'm saying fewer actual bodies in 0:17:30.840 --> 0:17:33.720 the stores? Are more people shopping online? And is Black 0:17:33.760 --> 0:17:37.320 Friday the experience of going out sort of fading? Uh? 0:17:37.840 --> 0:17:41.959 The answer is that both are happening. So uh, the 0:17:41.960 --> 0:17:44.480 the physical shopper and the and the in stores in 0:17:44.520 --> 0:17:47.720 the online shopper are both happening. So Black Friday is 0:17:47.720 --> 0:17:51.160 definitely a physical experience. People love to go out, and 0:17:51.320 --> 0:17:56.040 still you have to remember of sales in almost any 0:17:56.080 --> 0:17:58.960 category take place in a bricks and mortar store. But 0:17:59.119 --> 0:18:00.919 we are seeing general only in the retail industries as 0:18:00.960 --> 0:18:03.240 a whole, is that more of the growth is taking 0:18:03.240 --> 0:18:05.919 place online, and of course the economy is growing, so 0:18:05.960 --> 0:18:10.920 more the growth is coming online, and certainly Thanksgiving Day 0:18:11.040 --> 0:18:14.639 and Black Friday arrivaling Cyber Monday in terms of online sales, 0:18:14.640 --> 0:18:17.040 so growing very rapidly. For a company like us, whether 0:18:17.040 --> 0:18:20.000 it's Sackforth, Avenue, Lord and Taylor or one of our 0:18:20.040 --> 0:18:22.439 many other banners, what we're focused on is providing the 0:18:22.440 --> 0:18:24.880 best all channel experience. So so we have the same 0:18:24.920 --> 0:18:26.560 offers online and in store, and it's up to the 0:18:26.600 --> 0:18:29.480 customer to choose how she wants to do it. Some 0:18:29.560 --> 0:18:31.240 of is their doorbusters and get people to wait in 0:18:31.320 --> 0:18:33.159 line and come into the stores like there was you know, 0:18:33.200 --> 0:18:35.359 there's a great doorbuster at Lord and Taylor where the 0:18:35.400 --> 0:18:37.840 first five hundred people each day this week get a 0:18:37.880 --> 0:18:41.160 twenty other gift card for being in line and going 0:18:41.160 --> 0:18:44.320 into the store. But but most of the merchandise offers 0:18:44.560 --> 0:18:47.040 are the same in the store and online, and you 0:18:47.080 --> 0:18:49.000 buy it however you choose. It's not our job to 0:18:49.119 --> 0:18:52.600 try to train you or teach you or change your behavior. 0:18:52.760 --> 0:18:54.280 If you want to buy inline, great, you want to 0:18:54.280 --> 0:18:57.119 come to the store, that's great too. I like the 0:18:57.119 --> 0:19:00.400 way that you said she, Jerry, is it the she's 0:19:00.480 --> 0:19:03.040 at The female shoppers actually spend more on Black Friday. 0:19:03.160 --> 0:19:05.240 Let me tell you, after thirty years in retailer, it 0:19:05.520 --> 0:19:08.440 always has been she and always will be she. The 0:19:08.800 --> 0:19:12.080 woman is the CFO of the household and certainly, uh 0:19:12.119 --> 0:19:15.520 you know, buys far more at retail than than men do. 0:19:15.600 --> 0:19:18.239 But but another interesting phenomenon, as long as we're on this, 0:19:18.640 --> 0:19:21.000 is that the men's areas in our stores haven't grown 0:19:21.040 --> 0:19:22.840 more rapidly than the women's. And it's not just us, 0:19:22.880 --> 0:19:25.359 it's industry wide, and we say that men are the 0:19:25.359 --> 0:19:28.600 new women as they're starting to grow their their their purchases. 0:19:29.280 --> 0:19:32.320 Take that. It's a good thing, Mike. Shopping is always 0:19:32.320 --> 0:19:33.960 a good thing. But you know, part of it is 0:19:33.960 --> 0:19:37.080 because with the more casual workplaces, I mean, you know, 0:19:37.280 --> 0:19:40.679 they're less sort of formal suits and ties, men have 0:19:40.720 --> 0:19:42.840 to learn all over again have a dress when they 0:19:42.880 --> 0:19:44.879 go to work, and they need to buy sweaters and 0:19:45.080 --> 0:19:47.439 and different shoes and and really pay attention to it, 0:19:47.440 --> 0:19:50.000 because you know, you can't just wear the same navy 0:19:50.000 --> 0:19:51.840 blue suit aid to work and no one notices. You've 0:19:51.840 --> 0:19:53.840 got to be different each day. And that's part of 0:19:53.840 --> 0:19:57.600 what's driving that. It's still though, uh true that fastly 0:19:57.640 --> 0:20:00.320 more of the spetting is buy women and more of 0:20:00.320 --> 0:20:03.399 it is for women and Jerry overall, do I spend 0:20:03.440 --> 0:20:05.320 more if I go online and I want to buy 0:20:05.440 --> 0:20:07.760 a I don't know, perfumer or one of your great 0:20:07.760 --> 0:20:10.000 sale items that you have on do I end up 0:20:10.000 --> 0:20:12.960 spaying more than if I were in one of your 0:20:12.960 --> 0:20:15.400 shops or the other way around? Actually, and quite interesting, 0:20:15.480 --> 0:20:18.880 you spend more if you're all channel shopper. So we 0:20:18.960 --> 0:20:21.040 love as customers who love the brand and shop with 0:20:21.080 --> 0:20:23.360 us whichever way it works the best for that occasion, 0:20:23.440 --> 0:20:25.960 both online or in store. And we find is those 0:20:26.000 --> 0:20:28.159 are the customers who spend the most with us. It's 0:20:28.200 --> 0:20:30.199 the ones who love us online and love us in 0:20:30.240 --> 0:20:32.119 the store and sometimes use the combination. So we have 0:20:32.160 --> 0:20:37.280 some fantastic integration of online and the internet. So for example, 0:20:37.440 --> 0:20:39.240 if you go to Saxforth Avenue, you're likely to have 0:20:39.320 --> 0:20:42.320 a personal salesperson that you work with. That person knows 0:20:42.320 --> 0:20:44.680 you what you bought the last time. They will send 0:20:44.680 --> 0:20:47.760 you a curated selection from the website in an email 0:20:47.800 --> 0:20:49.520 to you that you can then open up and shop 0:20:49.560 --> 0:20:51.880 the website. But it's not the entire website. It's what 0:20:52.119 --> 0:20:54.600 your salesperson picked us appropriate for you. And of course 0:20:54.600 --> 0:20:56.159 you can get from there to the entire website if 0:20:56.160 --> 0:20:58.040 you if you want to get something else, But it's 0:20:58.040 --> 0:20:59.800 a way of using the Internet is a tool that 0:20:59.800 --> 0:21:02.119 helps shoe shop even better. And if you don't have 0:21:02.160 --> 0:21:04.160 a salesperson, Let's say you go to sax dot com 0:21:04.320 --> 0:21:06.480 a which it pops up and it says, would you 0:21:06.520 --> 0:21:09.120 like to speak to a stylist? And if you say yes, 0:21:09.680 --> 0:21:11.639 we connect you to someone in the store near you 0:21:11.920 --> 0:21:14.040 who's not like someone in a call center in some 0:21:14.080 --> 0:21:16.439 foreign country. It's someone in the store you're you, who 0:21:16.520 --> 0:21:18.439 knows something about style. He says, what would you like 0:21:18.480 --> 0:21:20.479 to get, and we'll do everything to satisfy. I did 0:21:20.480 --> 0:21:22.480 it once in front of a group of investors, and 0:21:22.520 --> 0:21:24.639 I said I wanted a bow tie and and he 0:21:24.720 --> 0:21:26.239 said what type? And you want a fan too? And 0:21:26.280 --> 0:21:28.040 I said, what is the black one? Find next. You know, 0:21:28.480 --> 0:21:31.040 this nice fellow wanted to deliver it to me. Literally 0:21:31.080 --> 0:21:32.640 know that I was in Toronto when I was talking 0:21:32.640 --> 0:21:34.639 to him in the York story in that case. But 0:21:34.640 --> 0:21:37.520 but you know, it's a fantastic integration experience, and that's 0:21:37.520 --> 0:21:40.600 what the customers want. They don't. They don't think, especially 0:21:41.200 --> 0:21:44.359 millennials and young they're not thinking online versus in store. 0:21:44.600 --> 0:21:46.280 They're thinking, this is what I want. This is a 0:21:46.320 --> 0:21:48.720 brand I like, This is a company I like. You know, 0:21:48.920 --> 0:21:51.800 it's sack fordam Lord and Taylor Guilt. How do I 0:21:51.840 --> 0:21:54.040 deal with them? And I deal with him online? When 0:21:54.040 --> 0:21:55.520 I choose to Some say I just look and see 0:21:55.520 --> 0:21:56.600 what I want to buy and they go to the 0:21:56.600 --> 0:21:58.640 store and find it. You know, I do whatever I want. 0:21:58.720 --> 0:22:01.240 I don't that that line is a false dichotomy. Do 0:22:01.680 --> 0:22:04.880 you have a demographic breakdown as to who shops online 0:22:05.000 --> 0:22:07.080 versus who shops in the brick and mortar stores is 0:22:07.119 --> 0:22:10.000 and the millennials who are more likely to shop online, Well, 0:22:10.000 --> 0:22:12.560 there's no doubt that the younger you are, the more 0:22:12.640 --> 0:22:15.240 likely you're you are to use a smartphone or some 0:22:15.320 --> 0:22:18.199 Internet enable tool. But make no mistake about it. You know, 0:22:18.400 --> 0:22:21.439 even our most senior customers use the internet now and 0:22:21.520 --> 0:22:25.080 have a smartphone, and so everybody's online, everybody's in the store, 0:22:25.400 --> 0:22:27.720 and that's the that's the world of the future, and 0:22:27.760 --> 0:22:30.840 the online owner retailers better get physical pretty darn fast, 0:22:31.320 --> 0:22:33.320 or are we physical retailers is gonna kill them. And 0:22:33.359 --> 0:22:35.040 that's why you see some of the internet guys starting 0:22:35.080 --> 0:22:36.879 to open up stores now where it's Warwy Parker with 0:22:36.960 --> 0:22:40.160 glasses or Amazonism stores because they realize that that bricks 0:22:40.160 --> 0:22:42.080 and more thing is kind of an advantage that we're 0:22:42.080 --> 0:22:45.600 getting a report from the front lines of Black Friday shopping. 0:22:45.680 --> 0:22:49.560 Jerry Starch is the chief executive officer of Hudson's Bay Company. 0:22:49.560 --> 0:22:53.800 They own a whole bunch of department stores, and um, 0:22:53.800 --> 0:22:57.040 I want to ask you about that because we've been 0:22:57.080 --> 0:23:01.800